Elizabeth Frawley v. Stanley and Sue Wood, and Laland and Georgia Booth

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NOT DESIGNATED FOR PUBLICATION  ARKANSAS COURT OF APPEALS  D.P. MARSHALL JR., Judge  DIVISION IV  CA07­21  31 October 2007  ELIZABETH FRAWLEY,                        AN APPEAL FROM THE SEBASTIAN  APPELLANT               COUNTY CIRCUIT COURT  v.                                                            [CIV 2005­1102]  STANLEY and SUE WOOD,  and  LALAND and GEORGIA BOOTH,  APPELLEES  THE HONORABLE JAMES ROBERT  MARSCHEWSKI, CIRCUIT JUDGE  AFFIRMED  Elizabeth Frawley sued Stanley and Sue Wood to recover an alleged $50,000.00  debt by foreclosing a mortgage.  After Frawley presented her case at trial, the circuit  court granted the Woods’ motion to dismiss the lawsuit. Frawley appeals the dismissal  and argues that the circuit court erred in considering inadmissible parol evidence.  I.  In February 2004, Frawley made a contract with the Woods to establish a bail­  bond company.  The contract consisted of several documents executed over a two­day period.  Frawley  loaned  the  Woods  $50,000.00.    In  a  “Promissory  Note,  Security  Agreement,” the parties agreed that the Woods would use Frawley’s $50,000.00, along  with $50,000.00 of their own money, to open “Liz and Stan Bail Bonds, Inc.”  All this  money was for a State­required bond in the form of a certificate of deposit.  They  agreed  that,  once  the  company  opened  and  received  its  State  license,  Frawley’s  $50,000.00  loan  would  be  transformed  into  a  50%  ownership  interest  in  the  corporation.  The Woods also gave Frawley a mortgage on their home and signed a  promissory note attached to that mortgage.  In a third contemporaneous document, the  parties agreed that Frawley would release her mortgage once two things happened:  when she showed half ownership in the corporation at the State Licensing Board, and  her name was added to the State­required $100,000.00 CD.  Liz and Stan’s Bail Bonds opened as planned and operated for about one year.  Then it went out of business and the State took the bond.  Frawley sued the Woods, seeking to foreclose the mortgage and collect on the  promissory note.  Frawley wanted to recover the $50,000.00, plus interest on the loan.  Frawley  also  sued  Laland  and  Georgia  Booth.  She  alleged  that  the  Booths  were  necessary parties to the action because they held a first mortgage on the Woods’ home.  The Booths filed a cross­claim against the Woods, seeking one thing:  indemnification  if the circuit court found them liable to Frawley.  After Frawley presented her case at 2  1  trial, the circuit court granted the Woods’ motion to dismiss.  Here is the exchange:  [Woods’ Attorney]: Your Honor, before we put on testimony, I  would move to dismiss on grounds that the Plaintiffs have not made their  case.  The Court: Granted.  I believe that Ms. Frawley had her interest in  the company.  She got 50% interest in Liz and Stan, Inc., she got a 50%  stock certificate, she operated the business, she knew that’s what she got.  I think she made a commitment that this property that was security for this  initial  $50,000[.00]  would  be  returned  after  the  business  was  incorporated, and she didn’t do it.  II.  Frawley first argues that the circuit court erred because she made a prima facie  case on her claim, Swink v. Giffin, 333 Ark. 400, 402, 970 S.W.2d 207, 208 (1998),  and because the Woods’ motion to dismiss was not specific.  Viewing the evidence in  the light most favorable to Frawley on the merits, we see no error.  Woodall v. Chuck  Dory Auto Sales, Inc., 347 Ark. 260, 264, 61 S.W.3d 835, 838 (2001).  Frawley contended that she held a mortgage and promissory note signed by the 1  The dismissal order did not mention the Booths’ cross­claim against the  Woods.  Because the Booths’ claim was solely for indemnification, and was  therefore completely dependent on their alleged liability to Frawley, we see no  jurisdictional problem.  It is clear to us that the dismissal of Frawley’s claim, after it  was fully litigated, resolved all the claims among all the parties because the Booths  now have no basis for indemnification.  McKibben v. Mullis, 79 Ark. App. 382,  384–85, 90 S.W.3d 442, 444–45 (2002).  Therefore, the dismissal order entered by  the circuit court was a final order.  Ibid.  3  Woods and that the Woods failed to make payments.  We agree that the Woods did not  repay the note with cash, but that was not the parties’ deal.  Frawley testified herself  out of court by admitting facts that showed the Woods fulfilled the parties’ agreement,  and thus Frawley had no case.  Cf. Early v. Bankers Life and Casualty Co., 959 F.2d  75, 79 (7th Cir. 1992).  On cross­examination,  Frawley agreed  that  she  was  “going  to  be  a  creditor  unless [Liz and Stan Bail Bonds, Inc.] got open, at which point [her] interest would  then  convert  to  a  50%  interest  in  the  company  .  .  .[.]”  Frawley  admitted  that  the  company  opened  its  doors  and  operated  for  about  a  year.    She  admitted  that  she  received her 50% ownership interest in the corporation. Frawley also testified that Stan  approached her about releasing the mortgage after the business opened.  But she never  went to the Licensing Board to tell them that she owned half the corporation.  Frawley  testified that she could not tell the Board about her ownership interest in Liz and Stan  Bail Bonds because her bail­bond license had been revoked.  The circuit court dismissed the case based on Frawley’s admissions. The court  did not, as Frawley asserts, weigh credibility at the motion­to­dismiss stage. Cf. Rymor  Builders, Inc. v. Tanglewood  Plumbing Co., Inc., __ Ark. App. __, __, __ S.W.3d __,  __ (October 10, 2007).  The court was entitled to take Frawley at her word and correct  to  dismiss  her  case.  She  testified  unequivocally  that  she  got  the  benefit  of  the 4  bargain—a 50% ownership interest in the corporation that eventually failed.  Frawley next challenges, as a procedural matter, the Woods’ non­specific motion  to dismiss.  While we agree that the motion was not specific, we hold that no reversible  error occurred.  As we read the transcript, the circuit court may well have interrupted  the  Woods’  lawyer  as  he  was  moving  to  dismiss.  In  any  event,  the  circuit  court  explained in detail its reasons for granting the motion.  The  specific­grounds  rule  insures  that  the  particular  ground  asserted  for  a  dismissal or a directed verdict is brought to everyone’s attention. Ouachita Wilderness  Institute, Inc. v. Mergen, 329 Ark. 405, 413–14, 947 S.W.2d 780, 784–85 (1997).  Then the other party can respond, the circuit court can rule, and a complete record will  be made for appellate review. Here the court’s specific, though quick, ruling eliminated  any  ambiguity  about  the  reason  for  its  decision.    Frawley  had  an  opportunity  to  respond,  albeit  belatedly.  She  was  present  for  the  Woods’  motion  and  the  circuit  court’s bench ruling.  She could have, but did not, argue against it.  Nor did she object  at that point to the lack of specificity in the Woods’ motion. Had she done so, the  Woods could have fleshed out their arguments.    Frawley therefore waived the no­  specificity error that she now  asserts. Pearrow v. Feagin, 300 Ark. 274, 278, 778  S.W.2d 941, 943 (1989).  III. 5  Frawley also claims that the circuit court erred by considering parol evidence at  trial.  When the parties make a clear and integrated contract in writing, the so­called  parol­evidence  rule  requires  the  exclusion  of  prior  or  contemporaneous  oral  agreements, or prior written agreements, to vary or contradict the terms of the parties’  contract.  Faver v. Faver, 266 Ark. 262, 267, 583 S.W.2d 44, 46 (1979); WILLISTON  ON CONTRACTS § 33.1 (4th Ed. 1999). The essence of this substantive rule of law is in  the parties’ integration of their contract.  All antecedent proposals and negotiations are  merged  into  the  written  contract,  and  that  contract  cannot  be  varied  by  extrinsic  evidence, whether written or oral.  Brown v. Aquilino, 271 Ark. 273, 275, 608 S.W.2d  35, 36 (Ark. App. 1980).  In this case, Frawley did not contend that the parties made  no contract or that they modified their contract later.  Extrinsic documents may be snagged by the rule in some circumstances, e.g.,  Lower  v.  Hickman,  80  Ark.  505,  509–10,  97  S.W.  681,  681–82  (1906),  but  the  documents to which Frawley objected were not.  The circuit court correctly refused to  exclude a complaint from the Pulaski County circuit court where Frawley had pleaded  that she owned 50% of Liz and Stan Bail Bonds, Inc.  This document did not offend the  rule because it was created after the parties made their agreement.  Faver, 266 Ark. at  267, 583 S.W.2d at 46. The complaint  was another admission by Frawley.  Further,  the  “Promissory  Note,  Security  Agreement”  that  Frawley  also  argued  was  parol 6  evidence was actually part of the same contract as the combined mortgage/note on  which  Frawley  sued  the  Woods.  The  parties  made  their  agreement  in  multiple  documents. And the circuit court had to consider all of the documents together as one  contract.  Integon Life Ins. Co. v. Vandegrift, 11 Ark. App. 270, 276, 669 S.W.2d 492,  495 (1984).  The court therefore properly admitted the rest of the parties’ contract into  evidence.  Likewise, the circuit court did not err by admitting testimony over Frawley’s  parol­evidence objections.  First, the court correctly overruled Frawley’s objection to  a question about her occupation; Frawley’s occupation is not parol evidence about the  parties’ contract.  The court also did not err in admitting what was by then cumulative  testimony about the parties’ agreement.  On cross­examination and on the court’s own  examination,  Frawley  acknowledged  the  circumstances  surrounding  her  entire  agreement with the Woods.  It is a close call whether this was parol evidence.  Cf. First  National Bank of Crossett v. Griffin, 310 Ark. 164, 168–72, 832 S.W.2d 816, 818–20  (1992).  But in this case the point does not matter.  Frawley did not  object to this  testimony when it was first given.  We therefore see no prejudice in the court refusing  to exclude later cumulative testimony about those same circumstances.  Affirmed.  BAKER  and MILLER, JJ., agree. 7  8

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