Ed Matthews et al. v. John Spencer et al.

ca00-766

NOT DESIGNATED FOR PUBLICATION

ARKANSAS COURT OF APPEALS

OLLY NEAL, Judge

DIVISION III

ARKANSAS COURT OF APPEALS

No. CA00-766

Opinion Delivered JUNE 13, 2001

ED MATTHEWS, PRESIDENT &

DIRECTOR OF LAKESIDE COUNTRY

CLUB; LAKESIDE COUNTRY CLUB,

INC; LARRY DUNCAN, DIRECTOR;

TERRY VIALA, DIRECTOR; NORBERT APPEAL FROM THE SALINE

DUGAN, DIRECTOR; DON MCNEILL, COUNTY CHANCERY COURT,

DIRECTOR; RON OAKES, DIRECTOR; [E-99-1397-1]

BILL CULP, DIRECTOR; BOB RITCHIE,

DIRECTOR; AND DR. BUFORD SUFFRIDGE,

DIRECTOR HON. ROBERT W. GARRETT,

APPELLANTS CHANCERY JUDGE

v.

AFFIRMED

JOHN SPENCER, R.J. JONES, DOUGLAS

HEAD, DON FREEMAN, FRANK JONES,

STEVE BERRY, CHRISTOPHER HUBBARD,

WALTER KOON, TODD LEWIS, JAMES

GANNAWAY, and BRYAN CAMPBELL

APPELLEES

OLLY NEAL, Judge

The appellees in this case consist of two members of the Lakeside Country Club Board of Directors ("The Board") and general members of Lakeside Country Club. The appellants include the Lakeside Country Club, Inc. and members of its Board of Directors. In late 1999, the Board adopted the Forest Stewardship Plan prepared by Kingwood Forestry Services, Inc. (hereinafter referred to as "the Kingwood Plan"), in order to manage timber and wildlife on 800 acres of land owned by the Club. Under the Kingwood plan, the Club's property would be divided into six management areas. The plan specifically recommended a complete harvest followed by reforestation of area five due to the "age, location, access, and size" of mature pines and hardwoods found in that area. Prior to the implementation of the Kingwood plan, appellees brought this action to enjoin the appellants from implementing the management objectives contained under the Kingwood plan. Appellees sued the appellants seeking both a temporary and permanent injunction enjoining the appellants from implementing "any timber management on Lakeside property except on a conservative, selective basis . . ." They argued that Lakeside Country Club was a non-profit corporation and that by entering into a timber management arrangement, the Board was seeking to make the Club a "for profit" corporation. Appellees further considered the Board's actions as ultra vires acts which are prohibited by the Corporation Code of the State of Arkansas. In their second amended complaint filed February 7, 2000, appellees asked the trial court to order a general election on the issue of the Kingwood plan. Appellees asked the trial court to issue an injunction allowing the Lakeside members to vote on the issue by secret ballet and the results from the election to be counted by a third party.

Following a hearing held February 11, 2000, to determine appellees' request for a temporary restraining order, the trial court made the following findings in an order filed February 29, 2000:

After having heard testimony, received evidence and being well and

sufficiently advised as to all matters of law and fact, the Court finds that

the President of Lakeside Country Club shall mail a copy of the Club's

Stewardship Plain, which in Court was referred to as the Kingwood Plan,

along with any other information the Board of Directors deems

informative to its members, to each and every member of the Club along

with a notice for an election which shall take place upon a day certain

approximately thirty (30) days after the information is mailed. The election

will take place in the same manner as dictated in Section 7 of the

Constitution of Lakeside Country Club. The election shall be an election

for or against adoption of the Kingwood Plan, and shall be binding upon

the Board of Directors. The results of this election shall be made known

the respective lawyers in this case and a report made back to this Court

upon which this cause shall be dismissed.

On March 13, 2000, the appellants filed a document entitled "Defendants' Motion to Reconsider and Supporting Memorandum." In the motion, appellants argued that the trial court's order entered February 29, 2000, made no mention of granting or denying appellees' request for a temporary restraining order and that from the evidence taken at the February 11 hearing, it was "improper procedurally for the Court to rule on anything other than whether [appellees'] request for a temporary restraining order was to be granted or denied." The appellants requested the trial court to "reconsider and amend its February 29, 2000, Order to (1) dismiss the case with prejudice and, alternately, (2) rule only on [appellees'] entitlement to a TRO while reserving for a full trial on the merits of [appellees'] case."

In their reply to the motion, appellees asserted that the effect of the February 29, 2000, order was a temporary restraining order to maintain the status quo until a general election could be held on the issue of the Kingwood plan. Appellees argued that every defense alleged by the appellants was presented by them at the February 11 hearing and that if appellants were entitled to a second hearing, appellants should be required to state what proof they would present at the second hearing. Appellees argued that the motion to reconsider should be denied in its entirety and requested that if the trial court reconsideredits order, it would "just be to the extent of ordering a vote by secret ballot mailed to all members, to be handled by an impartial third party."

The appellate court reviews chancery cases de novo. Songer v. Wiggins, 71 Ark. App. 152, 27 S.W.3d 755 (2000). However, the court does not reverse a chancellor's findings unless they are clearly erroneous. Id.

Appellants first argue that the trial court erred in not dismissing appellees' complaint. Specifically, they argue that under Ark. Code Ann. §§ 4-28-202(3) and 4-28-209(4)-(6) (Repl. 1996), Lakeside Country Club is authorized to manage its own property and assets, including timber, so long as it does not violate the law. Appellants argue that by virtue of Arkansas law and the Club's own governing documents, their alleged acts cannot be ultra vires. Therefore, appellants contend that appellees' complaint failed to state facts upon which legal relief could be granted and that the trial court erred in not dismissing the action with prejudice.

Appellants have correctly set forth the powers authorized to a non-profit corporation under Ark. Code Ann. § 4-28-209, and several provisions of the Constitution of the Lakeside Country Club. However, the record does not show that appellants have abstracted their motion to dismiss appellees' complaint for failure to state facts upon which relief can be granted and their brief in support filed January 25, 2000. The record further does not show that appellants' obtained a ruling from the trial court on their motion to dismiss. The burden is placed on the appealing party to provide both a record and abstract sufficient to demonstrate error for appellate review. Greene v. Pack, 343 Ark. 97, 32 S.W.3d 482 (2000). The appellate court will not examine the transcript of a trial to reverse a trial court, although it will do so to affirm. Id. Further, it is incumbent upon appellants to call their motion to the trial court's attention and obtain a ruling. Fratesi v. Fogleman, 72 Ark. App. 1, 32 S.W.3d 38 (2000). Objections and questions left unresolved are waived and may not be relied upon on appeal. Id.

For their second point on appeal, appellants argue, alternatively, that the trial court erred procedurally in ruling on the merits of the case and dismissing the action after only the hearing on whether to issue a preliminary injunction. Appellants argue that absent on order of consolidation from the trial court, Ark. R. Civ. P. 65 contemplates a two-step adjudicatory process for cases seeking a preliminary injunction or temporary restraining order. These issues were first raised in appellants' post-trial motion for reconsideration.

We are unable to reach the merits of appellants' argument because they have failed to properly perfect their appeal from the denial of the post-trial motion. Rule 4 of Arkansas Rules of Appellate Procedure-Civil states in pertinent part:

(b)(1) Upon timely filing in the trial court of a motion for judgment

notwithstanding the verdict under Rule 50(b) of the Arkansas Rules

of Civil Procedure, a motion to amend the court's findings of fact or

to make additional findings under Rule 52(b), or a motion for a new

trial under Rule 59(a), the time for filing a notice of appeal shall be

extended for all parties. The notice of appeal shall be filed within

thirty (30) days from the entry of the order disposing of the last motion

outstanding. However, if the trial court neither grants nor denies the

motion within thirty (30) days of its filing, the motion shall be deemed

denied by operation of law as of the thirtieth day, and the notice of

appeal shall be filed within thirty (30) days from that date.

(2) A notice of appeal filed before disposition of any of the motions listed in paragraph (1) of this subdivision shall be treated as filed on the day after the entry of an order disposing of the last motion outstanding or the day after the motion is deemed denied by operation of law. Such a notice is effective to appeal the underlying judgment, decree, or order. A party who also seeks to appeal from the grant or denial of the motion shall within thirty (30) days amend the previously filed notice, complying with Rule 3(e). No additional fees will be required for filing an amended notice of appeal.

Arkansas Rule of Civil Procedure 52(b) allows ten days after judgment for the filing of a motion to amend judgment. Newcourt Financial v. Canal Ins., 67 Ark. App. 347, 1 S.W.3d 452 (1999). Because the time period prescribed is less than eleven days, intermediate Saturdays, Sundays, and legal holidays shall be excluded in the computation. Id.; See ARCP Rule 6(a).

In the present case, the trial court's order was entered on February 29, 2000, and appellants' notice of appeal was filed March 28, 2000. Appellants' motion for reconsideration requesting the trial court to amend its order was filed on March 13, 2000. Excluding weekends and holidays, appellants' filed their motion for reconsideration within the ten days prescribed by the rule. However, the motion was not ruled upon by the trial court. Thus, since the motion was filed on March 13, 2000, it was deemed denied on April 12, 2000, by operation of law. Under Rule 4(b)(2), appellants were then required to file an amended notice of appeal within thirty days from the date that the motion was deemed denied to appeal from the grant or denial of the motion for reconsideration. Because this was not done, no appeal from the issues raised in the motion has been perfected. While this issue is not raised by the parties, it is jurisdictional, and the appellate court is required to raise it even if the parties do not. See Mitchell v. Mitchell, 40 Ark. App. 81, 842 S.W.2d 66 (1992). We affirm on appellant's second point.

Affirmed.

Pittman and Bird, JJ., agree.

SUPPLEMENTAL OPINION UPON GRANT OF REHEARING

NOT DESIGNATED FOR PUBLICATION

ARKANSAS COURT OF APPEALS

SAM BIRD, JUDGE

DIVISION III

ED MATTHEWS, ET AL.,

APPELLANTS

V.

JOHN SPENCER, ET AL.,

APPELLEES

CA00-766

SEPTEMBER 26, 2001

APPEAL FROM THE SALINE COUNTY CHANCERY COURT,

NO. E99-1397-1,

HON. ROBERT W. GARRETT, JUDGE

SUPPLEMENTAL OPINION ON GRANT OF REHEARING;

REVERSED AND REMANDED IN PART

In a previous unpublished opinion, Matthews et al. v. Spencer et al., CA00-766, slip op. (Ark. App. June 13, 2001), we affirmed an appeal from a decision of the Saline County Chancery Court. As their second point on appeal, appellants argued that the chancellor erred in ruling on the merits of the case and dismissing the action after only conducting a hearing on whether to issue a preliminary injunction. Holding that appellants had not properlyperfected their appeal because of their failure to file an amended notice of appeal from the denial of their post-trial motion for reconsideration, we affirmed as to that point. Appellants now challenge our dismissal as to their second point, asserting that we have misinterpreted Rule 4 of the Arkansas Rules of Appellate Procedure - Civil. We grant appellants' petition for rehearing and issue this supplemental opinion.

The procedural history of this case, as it relates to the point argued by appellants in their petition, is as follows:

Appellees filed their petition in chancery court seeking a permanent injunction against the implementation of a forestry management plan. The petition included a prayer for a temporary injunction pending a "complete and total hearing."

Appellees' petition was served on appellants, accompanied by a notice that appellees would apply to the Saline County Chancery Court for a temporary restraining order (TRO).

A hearing on appellees' application for a TRO was conducted on February 11, followed by the court's rendition, on February 29, 2000, of an order purporting to dispose of the case on its merits.

On March 13, 2000, appellants timely filed a motion for reconsideration and supporting memorandum, making the sole argument that the court should not have decided the case on its merits where the only purpose of the initial hearing was to determine whether to enter a TRO, and requesting that the court modify its order to a ruling only on appellees' motion for a TRO and reserving a ruling on the merits until after a full trial.

On March 28, 2000, appellants timely filed their notice of appeal from the court's February 29, 2000, order.

Appellants' motion for reconsideration was deemed denied by the court's inaction within thirty days of its filing.

Appellants' appeal record was timely lodged, followed by appellants' abstract and brief. Appellees filed no brief.

By our opinion of June 13, 2001, we dismissed the appeal because appellants had not filed an amended notice of appeal subsequent to the "deemed denial" of their motion for reconsideration, holding that an appeal from the post-trial motion had not been properly perfected.

Appellants petitioned for rehearing. Appellees filed no response.

As stated previously, appellants' petition for rehearing addresses only their second point on appeal. Appellants assert that the trial court erred procedurally in ruling on the merits and dismissing the action after conducting a hearing only on the issue of whether appellees were entitled to a TRO. We hold that this alleged error could have been the basis of an appeal without the necessity of filing a post-trial motion for reconsideration. The fact that appellants' post-trial motion asked the court to reconsider its action in erroneously rendering a final order on the merits following a TRO hearing does not preclude appellants from prosecuting an appeal from the court's February 29 order, even though the issue on appeal was also the subject of a post-trial motion for reconsideration.

Arkansas Rule of Appellate Procedure-- Civil 4(b) provides:

(b)(1) A notice of appeal filed before disposition of any of the motions listed in paragraph (1) of this subdivision shall be treated as filed on the day after the entry of an order disposing of the last motion outstanding or the day after the motion is deemed denied by operation of law. Such a notice is effective to appeal the underlying judgment, decree, or order. A Party who seeks to also appeal from the grant or denial of the motion shall within thirty (30) days amend the previously filed notice, complying with Rule 3(e). No additional fees will be required for filing an amended notice of appeal.

(Emphasis added.)

We have concluded that our affirmance on the basis of appellants' failure to amend their notice of appeal was incorrect. Appellants did not appeal from the denial of their motion for reconsideration: their notice of appeal states expressly that they appeal from thecourt's February 29, 2000 order. Arkansas Rule of Appellate Procedure-- Civil 4(b) provides that a notice filed before disposition of a post-trial motion "is effective to appeal the underlying judgment, decree, or order." It was not necessary for appellant also to have amended his notice of appeal in order to perfect his appeal from an invalid underlying order.

Rule 65(a) of the Arkansas Rules of Civil Procedure requires that notice of an application for a temporary restraining order be given to an adverse party or his attorney and that such adverse party be afforded an opportunity to be heard in opposition to the application. Rule 65(b) states:

(b) Hearing. Upon application by the party against whom the preliminary injunction or temporary restraining order has been issued without notice, the Court shall, as expeditiously as possible, hold a hearing to determine whether the preliminary injunction or temporary restraining order should be dissolved. Where a hearing is required to be held on an application for a preliminary injunction or temporary restraining order, the Court may order the trial of the action on the merits advanced and consolidated with the hearing on the application. When consolidation is not ordered, any evidence received upon application for a preliminary injunction or temporary restraining order which would be admissible upon the trial on the merits becomes a part of the record of the trial and need not be repeated upon the trial. This subdivision (b) shall be construed and applied as to save to the parties any rights they may have to a jury trial.

(Emphasis added.)

In the present case, appellees gave notice to appellants of their intention to apply for a temporary restraining order. A hearing on that application was held on February 11, followed by the entry of the order of February 29, 2000, that had the effect of disposing of the case on its merits. There is nothing in the record to indicate that the court ordered that the trial of the action on the merits be advanced and consolidated with the hearing on the application. Appellees' notice of the TRO hearing stated expressly that application wouldbe made for a temporary restraining order to be effective "until the court can have a complete and total hearing over these matters." Furthermore, during his opening remarks to the court at the temporary restraining order hearing, appellants' counsel stated that the purpose of the hearing was for the appellee to put on proof of irreparable harm and to make a showing of the likelihood of success when the case would be considered on the merits. Appellees' counsel did not dispute that purpose. Following the opening remarks of counsel, the chancellor stated to appellees' counsel that he could call witnesses "concerning your request for a preliminary injunction . . . ." From these remarks of counsel and the court, there does not appear to be any question that everyone understood that the sole purpose of the hearing was to determine whether it was appropriate for the court to enter a temporary restraining order.

In Jacksonville Chrstn. Acdmy. v. Ark. Social Svcs., 277 Ark. 339, 641 S.W.2d 716 (1982), the supreme court relied on Ark. R. Civ. P. 64(b) in holding that the chancellor had erred in treating a hearing on whether a temporary restraining order should be dissolved as a trial on the merits of the case. The supreme court said: "Rule 65 (b) does not contemplate a trial on the merits at the time of the temporary hearing unless the trial court has ordered the proceedings consolidated. No such order was made in this case."

The record in this case contains no order for the consolidation of the hearing on the TRO and the trial on the merits of the case. Appellees' notice of the hearing stated that the hearing would be only on the issue of whether a TRO should be issued. There was no reason for appellants to expect that the February hearing was for any purpose other than to examine whether a TRO should be entered. Consequently, appellants were not afforded anopportunity for a full trial on the merits.

For the foregoing reasons, we grant the petition for rehearing relating to appellants' second point on appeal, and we reverse and remand this matter to the trial court.

Petition granted; reversed and remanded in part.

Jennings, Robbins, Griffen, and Baker, JJ., agree.

Pittman, J., concurs.