National Enters., Inc. v. Rea

NATIONAL ENTERPRISES, INC. and Arkansas No. 1
LLC v. Charles REA and Mickie Rea, His Wife

97-274                                             ___ S.W.2d ___

                    Supreme Court of Arkansas
                 Opinion delivered July 7, 1997


1.   Appeal & error -- record on appeal confined to that which is
     abstracted -- failure to abstract critical documents precludes
     appellate consideration. -- The record on appeal is confined
     to that which is abstracted and cannot be contradicted or
     supplemented by statements made in the argument portions of
     the briefs; appellants are required to abstract such material
     parts of the pleadings, proceedings, facts, documents,
     exhibits, and other matters in the record that are necessary
     to an understanding of each issue presented to the supreme
     court for review; the judgment or decree appealed from,
     including relevant factual findings, is an essential part of
     the abstract; failure to abstract a critical document
     precludes the supreme court from considering any issues
     concerning it; when those exhibits necessary for a clear
     understanding of the issues are not included in the abstract,
     the decision of the trial court will be summarily affirmed; it
     is impractical to require all seven members of the supreme
     court to examine one transcript in order to decide an issue. 
     
2.   Appeal & error -- abstract flagrantly deficient -- judgment of
     trial court affirmed. -- From the abstract provided, the
     supreme court could not discern what services, if any,
     appellants were obligated to provide to appellees and other
     time-share owners or what the original developer was obligated
     to provide; although there were scant references to the note
     and mortgage, the master deed and by-laws, and the letter
     written by the ex-employee of appellant contained in the
     abstracted testimony and in the argument portion of
     appellants' briefs, as well as references to some of the
     documents as trial exhibits, such references did not comply
     with the abstracting requirements set out in Ark. Sup. Ct. R.
     4-2(a)(6); the abstract failed to give the specific factual
     findings made by the trial court and her reasons for ruling as
     she did and did not make clear whether the chancellor ever
     ruled on appellants' argument concerning the application of
     Ark. Code Ann.  18-14-601 to the facts of this case; without
     the benefit of knowing the specific findings and conclusions
     made by the trial court, it was impossible for the supreme
     court to conduct a meaningful review of appellants'
     allegations of error; the order of the chancery court was
     affirmed.

     Appeal from Garland Chancery Court; Vicki S. Cook, Chancellor;
affirmed.
     Joel Taylor, for appellants.
     Skokos, Bequette & Billingsley, P.A., by;  Jay Bequette and
Keith I. Billingsley and Wood, Smith, Schnipper & Clay, by:  Don M.
Schnipper, for appellees.  
     Donald L. Corbin, Justice.
     Appellants National Enterprises, Inc. ("NEI"), and Arkansas
No. 1 LLC appeal the judgment of the Garland County Chancery Court
permitting Appellees Charles P. Rea and Mickie Rea to equitably
rescind their contract of purchase and deed of conveyance of a
time-share unit located in the now-defunct Lakeshore Resort & Yacht
Club in Hot Springs.  Appellants raise four points for reversal,
one of which requires an interpretation of Ark. Code Ann.  18-14-
601 (1987).  Our jurisdiction is thus pursuant to Ark. Sup. Ct. R.
1-2(a)(17)(vi) (as amended by per curiam July 15, 1996).  We cannot
reach the merits of the appeal, however, due to a flagrantly
deficient abstract.  Accordingly, we affirm pursuant to Ark. Sup.
Ct. R. 4-2(a)(6). 
     From the sparse abstract provided to us, it appears that
Appellees purchased a time-share condominium from Hansen, Hooper &
Hayes, Inc., the developer of the Lakeshore project.  Appellant NEI
purchased the note and mortgage on the condominiums from the
Resolution Trust Corporation ("RTC") and subsequently foreclosed on
the property.   Appellees filed suit against NEI for rescission of
the contract, alleging that NEI had failed to provide them with
utilities, parking, and access to the facilities of the adjacent
hotel, as promised by the original developer.  Sometime after
Appellees had filed suit, NEI transferred 100% of its right, title,
and interest to Arkansas No. 1 LLC.  The chancellor ruled in favor
of Appellees on a theory of constructive fraud and this appeal
followed. 
     The points argued on appeal comprise two issues:  (1) Whether
Appellants were the proper party defendants as the successors-in-
interest to the developer, and (2) whether there was sufficient
evidence of constructive fraud.  We are unable to reach the merits
of either of these points due to the fact that Appellants have
failed to abstract the following essential documents:  (1) The note
and mortgage on the Lakeshore property purchased by NEI from the
RTC; (2) the original contract for the purchase of the time-share
unit entered into by Appellees and the developers; (3) the
foreclosure action executed by NEI on the Lakeshore time-share
project; (4) a letter written by an ex-employee of NEI on
December 3, 1993, advising time-share purchasers that the services
and amenities previously provided by the hotel had been terminated;
and (5) the master deed and by-laws of the time-share development. 
     Additionally, Appellants have failed to sufficiently abstract
the relevant parts of the chancellor's letter order, which actually
comprised some seven pages, but is summarized in one paragraph as
follows:  
          Defendants['] status as successor in interest to
     Hanson [sic], Hooper & Hayes cannot be seriously
     questioned.  In order to rescind a contract, actual fraud
     is not necessary, and constructive fraud is sufficient. 
     Plaintiffs did not prove actual fraud, but the Court
     finds constructive fraud.  Plaintiffs are entitled to
     rescission.  The provision in the By-Laws which require
     the developer to relinquish its right and duty to
     administer the regime no later than three years following
     the first sale of the unit week was not supported by
     testimony that the counsel of co-owners was established. 
     Plaintiff's [sic] resitutionary [sic] damages should be
     reduced pro rata, based upon the amount of use they had
     in their time-share. 

     It is fundamental that the record on appeal is confined to
that which is abstracted and cannot be contradicted or supplemented
by statements made in the argument portions of the briefs.  In the
Estate of Brumley, 323 Ark. 431, 914 S.W.2d 735 (1996).  Appellants
are required to abstract such material parts of the pleadings,
proceedings, facts, documents, exhibits, and other matters in the
record as are necessary to an understanding of each issue presented
to this court for review.  Kingsbury v. Robertson, 325 Ark. 12, 923 S.W.2d 273 (1996); Brumley, 323 Ark. 431, 914 S.W.2d 735.  The
judgment or decree appealed from, including relevant factual
findings, is an essential part of the abstract.  Pulaski County
Child Supp. Enforcement Unit v. Norem, 328 Ark. 546, ___ S.W.2d ___
(1997).  Failure to abstract a critical document precludes this
court from considering any issues concerning it.  Brumley, 323 Ark.
431, 914 S.W.2d 735.  Similarly, when those exhibits necessary for
a clear understanding of the issues are not included in the
abstract, we will summarily affirm the decision of the trial court. 
Kingsbury, 325 Ark. 12, 923 S.W.2d 273.  We have stated on
occasions too numerous to count that it is impractical to require
all seven members of this court to examine one transcript in order
to decide an issue.  See, e.g., Duque v. Oshman's Sporting Goods
Servs., Inc., 327 Ark. 224, 937 S.W.2d 179 (1997); Kingsbury, 325
Ark. 12, 923 S.W.2d 273.  
     From the abstract provided, we cannot discern what services,
if any, Appellants were obligated to provide to Appellees and other
time-share owners or what the original developer was obligated to
provide.  Without a copy of the note and mortgage purchased by NEI
from the RTC, we cannot address Appellants' argument that
Appellees' time-share unit was specifically excluded from the
mortgage.  Moreover, without a copy of the master deed and by-laws,
we cannot address Appellants' argument that the developer's
obligations ceased after three years from the date of the sale of
the first time-share week.  Furthermore, without being able to
examine the letter written by the ex-employee of NEI, we cannot
address Appellants' argument that the trial court erred in finding
that statements made in the letter were authorized by Appellants
and were binding upon them as admissions.  Though there are scant
references to these documents contained in the abstracted testimony
and in the argument portion of Appellants' briefs, as well as
references to some of the documents as trial exhibits, such
references do not comply with this court's abstracting requirements
set out in Ark. Sup. Ct. R. 4-2(a)(6).  
     Correspondingly, from Appellants' summary of the chancellor's
order, we are left to guess as to the specific factual findings
made by the trial court and her reasons for ruling as she did.  It
is further unclear from the abstracted order that the chancellor
ever ruled on Appellants' argument concerning the application of
section 18-14-601 to the facts of this case.  Without the benefit
of knowing the specific findings and conclusions made by the trial
court, it is well nigh impossible for this court to conduct a
meaningful review of Appellants' allegations of error. 
Accordingly, we affirm the order of the chancery court.