Innisfree Senior Living Apartments, Ltd. v. Chicago Title Services, Inc., et al.

ARKANSAS COURT OF APPEALS

NOT DESIGNATED FOR PUBLICATION

PER CURIAM

EN BANC

INNISFREE SENIOR LIVING

APARTMENTS, LTD.

APPELLANT

V.

CHICAGO TITLE SERVICES, INC.,

et al.

APPELLEES

CA 02-394

OCTOBER 9, 2002

APPEAL FROM THE BENTON

COUNTY CIRCUIT COURT

[NO. CIV 2000 526-2]

HONORABLE DAVID CLINGER,

JUDGE

DISMISSED

On January 27, 1999, the Regina V. Bynum Trust sold the assets of the Innisfree Retirement Center to appellant. A policy of title insurance was issued to appellant by Chicago Title Insurance Company through Landmark Title Services in Rogers, Arkansas. In 2001, appellant sued the Bynum Trust, Landmark Title Services, and Chicago Title Company alleging that, on March 22, 1999, it became aware of a lease that had been executed in 1996 between the Retirement Center and Madeline and Lee Zachary. The complaint averred that the trust had breached the terms of the sales agreement by failing to disclose the existence of the lease; that Landmark was negligent in failing to discover the lease; and that Chicago Title Company had breached the terms of its insurance contract by declining to cover any loss or damages arising out of the existence of the lease.

Landmark and the Bynum Trust filed answers to the complaint, setting forth various denials and affirmative defenses. Landmark also filed a cross-claim against the Bynum Trust, alleging that the trust had represented that all leases had been disclosed. Chicago Title Insurance filed a motion to dismiss on several grounds, including (1) that the lease was not an encumbrance that the property was insured against because the lease was not acknowledged as required by statute, and (2) that the policy did not cover the type of damages sought by appellant. On January 17, 2002, the trial court granted the motion to dismiss on those two grounds. The court's order stated that "the complaint of the plaintiff is dismissed as to the separate defendant, Chicago Title Insurance Company." Appellant's claims against the other two defendants and Landmark's cross-claim against the trust were not disposed of by the order.

When multiple parties are involved in an action, the trial court may direct the entry of a final judgment as to one or more but fewer than all of the parties only upon express determination, supported by specific factual findings, that there is no just reason for delay and upon express direction for entry of judgment. See Ark. R. Civ. P. 54(b). In the event the trial court makes such a determination, it shall execute a certificate setting out its findings, as required by subsection (b)(1) of Rule 54. In the absence of such a certificate, a judgment or order that adjudicates the rights and liabilities of fewer than all the parties shall not terminate the action as to any of the parties. See Ark. R. Civ. P. 54(b)(2). The failure to comply with Rule 54 presents a jurisdictional issue that we are required to raise on our own, even if the parties do not. See Martin v. Nat'l Bank of Commerce, 316 Ark. 83,870 S.W.2d 738 (1994).

Because the order appealed from in this case disposed only of appellant's claims against one of three defendants, we dismiss without prejudice to re-file upon entry of an order compliant with Rule 54(b).

Dismissed.

Jennings and Crabtree, JJ., not participating.