Robert Goodman and Patty Goodman v. Ellis Maness and Debbie Maness

NOT DESIGNATED FOR PUBLICATION

ARKANSAS COURT OF APPEALS

JOHN E. JENNINGS, JUDGE

DIVISION III

CA01-556

February 20, 2002

ROBERT GOODMAN and PATTY AN APPEAL FROM LAFAYETTE COUNTY

GOODMAN CHANCERY COURT

APPELLANTS NO. E2001-06-2

HONORABLE JIM HUDSON,

CHANCELLOR

ELLIS MANESS and DEBBIE MANESS

APPELLEES REVERSED AND REMANDED

This case arose from a real estate installment contract in which the appellees purchased 154.5 acres of land from appellants. On appellees' petition, the chancellor ordered specific performance of the contract and directed appellees to pay $42,659.72 into the court registry to satisfy the full balance owed. Appellants were then directed to deed the property to appellees upon receipt of that amount. Appellants appealed, contending that the chancellor erred in ordering specific performance, and the appellees cross-appealed, arguing that the chancellor should have awarded attorney fees to them rather than to appellants. We granted a motion to dismiss the direct appeal on September 12, 2001, because appellants hadtaken receipt of the $42,659.72 and had delivered a deed to appellees,1 so only the cross-appeal remains. We agree that appellees rather than appellants prevailed below and remand to allow the chancellor to consider whether an award of attorney fees to appellees is warranted.

Appellees were originally the record owners of 154.5 acres of property in Lafayette County, subject to a mortgage. In 1998, they began to experience difficulty in making their mortgage payments. Appellants, who were their friends, paid off the mortgage in exchange for a deed to the property. They then executed a real estate sale contract that allowed appellees to repurchase the property and retain possession of it. Appellees agreed to pay appellants $48,000 in monthly installments of $709.50 per month "beginning February 5, 1999 and monthly thereafter" for ninety-six months. The contract provided that if appellees were in default on their payments for sixty days, they would be required to surrender possession to appellants. The contract also provided that appellees retained the right to pay the balance owed on the contract at any time without penalty.

The controversy that gave rise to this litigation began on April 28, 2000. On that date, appellee Ellis Maness visited appellants' home and attempted to present appellant Robert Goodman with the March 2000 payment, which at that point was less than sixty days late. Goodman refused the payment, apparently because he was upset with appellees' chronictardiness.2 Although there is some controversy on this point, the chancellor found that appellees then offered to pay the balance due on the contract, an offer that Goodman declined. A few days later, fearing appellants would sell the property, appellees filed a pro se petition to enjoin such a sale. Appellants then filed a complaint seeking ejectment, alleging that appellees were in default. Appellees obtained assistance of counsel and filed a complaint seeking specific performance of the contractual provision that would allow them to pay the balance due on the contract.

The case went to trial on January 16, 2001, and the chancellor found that appellants' refusal to accept payment of the balance due on April 28, 2000, was unwarranted. He therefore granted appellees' petition for specific performance and ordered them to place the payoff amount of $42,659.72 into the court registry by the following Monday. Upon receipt of that amount, appellants were to give appellees a deed to the property.

At the close of the hearing, appellees' counsel requested attorney fees. The chancellor made the following remark:

I don't think you prevailed. Your folks were in default every month. I'm finding that its not necessary for me to decide who the prevailing party is, because I really think in all likelihood, I'm going to deny attorney fees on both sides, but [appellants] did have to hire an attorney to get paid.

Despite the chancellor's comments, both sides filed petitions for attorney fees. Appellants sought $6,711.90, and appellees sought $7,474.70. In a letter ruling, the chancellordetermined that appellants were the prevailing parties (although he recognized that they "did not prevail on each issue") and awarded them $3,355.95. Appellees bring their cross-appeal from that ruling.

Arkansas Code Annotated section 16-22-308 (Repl. 1999) provides:

In any civil action to recover on an open account, statement of account, account stated, promissory note, bill, negotiable instrument, or contract relating to the purchase or sale of goods, wares, or merchandise, or for labor or services, or breach of contract, unless otherwise provided by law or the contract which is the subject matter of the action, the prevailing party may be allowed a reasonable attorney's fee to be assessed by the court and collected as costs. (Emphasis added).

An award of attorney fees under this statute will not be set aside absent an abuse of discretion by the trial court. Chrisco v. Sun Indus., Inc., 304 Ark. 227, 800 S.W.2d 717 (1990).

To be a prevailing party for purposes of section 16-22-308, one must prevail on the merits of the case. Burnette v. Perkins & Assoc., 343 Ark. 237, 33 S.W.3d 145 (2000). In reviewing a trial court's determination of which party prevailed, we must analyze each cause of action pled and subsequent award of relief. See Marcum v. Wengert, 344 Ark. 153, 40 S.W.3d 230 (2001).

The case of Gill v. Transcriptions, Inc., 319 Ark. 485, 892 S.W.2d 258 (1995), is instructive. There, Laura Bushman sold her court reporting service, Bushman Court Reporting, Inc., to Transcriptions, Inc. She later reentered the court reporting business under the name Laura Bushman Gill. One of her listings in the telephone directory was carried as "Bushman, Laura Gill crt. reptr." Transcriptions, claiming consumer confusion over the Bushman name, filed a complaint in chancery court seeking inter alia an injunctionprohibiting renewal of the Laura Gill Bushman listing in the telephone directory. Further, Transcriptions suggested that Gill place a recording on her telephone to clear up any customer confusion with regard to the listing. The chancellor did not award Transcriptions all the relief it sought, but she did enjoin the use of the name Laura Gill Bushman in the phone directory, and she ordered Gill to place a recording on the phone number in question, redirecting calls to Transcriptions if the callers were seeking Bushman Court Reporting. Later, in a hearing on attorney fees, the chancellor found that Transcriptions was the prevailing party. The supreme court affirmed on the basis that Transcriptions had requested and received injunctive relief.

In the case at bar, appellees sought specific performance of the provision of the contract that would permit them to pay the balance due. They asked that they be allowed to pay appellants $42,659.72 and that appellants be required to execute a deed to them in return. That was exactly the relief granted by the chancellor, based on a finding that appellants' rejection of appellees' April 2000 attempt to pay the balance due was unwarranted. Appellants sought to eject appellees from the property, but that relief was not granted. Additionally, appellants testified that they believed they were entitled to $70,000 as a payoff rather than $42,659.72. They did not win that argument, although they did receive, in addition to the payoff amount, another $7,375.02 for accrued interest on late payments. Finally, if appellants prevailed as they contend, one might ask why they appealed the chancellor's grant of specific performance and the denial of their complaint for ejectment.

We hold that appellees rather than appellants were the prevailing parties below. We therefore reverse the chancellor's decision to the contrary, and remand for the court to determine whether to award appellees an attorney fee and, if so, in what amount.

Reversed and remanded.

Hart and Neal, JJ., agree.

1 See generally Shepherd v. State Auto Prop. & Cas. Ins. Co., 312 Ark. 502, 850 S.W.2d 324 (1993) (recognizing that a party waives his right to appeal by accepting a benefit which is inconsistent with the claim of right he seeks to establish on appeal).

2 It is undisputed that appellees did not make a single payment in a timely fashion. On one particular payment they were seventy-six days late, but appellants accepted the payment without exercising their right to regain possession of the property.