Wilson v. Vaughn
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Cite as 2009 Ark. App. 159 (unpublished)
ARKANSAS COURT OF APPEALS
DIVISION III
No. CA08-801
NADINE WILSON d/b/a SUNSTONE
JUDGMENT RECOVERY
APPELLANT
Opinion Delivered
MARCH 4, 2009
APPEAL FROM THE YELL COUNTY
CIRCUIT COURT
[NO. CV 08-32]
V.
LAWRENCE VAUGHN d/b/a
VAUGHN’S TRUCK & EQUIPMENT
REPAIR
APPELLEE
HONORABLE DAVID H.
MCCORMICK, JUDGE
AFFIRMED
WAYMOND M. BROWN, Judge
In this one-brief appeal, Nadine Wilson d/b/a Sunstone Judgment Recovery
challenges an order from the Yell County Circuit Court, which dismissed her case against
Lawrence Vaughn d/b/a Vaughn’s Truck and Equipment Repair. According to that order,
Wilson was not entitled to recover under an agreement that purported to assign a civil
judgment to her. Wilson contends that the evidence showed a valid agreement between the
parties and that, pursuant to that agreement, she is entitled to 40% of the amount Wilson
collected on a judgment belonging to him. We affirm, as the circuit court did not err in
finding that the parties rescinded the agreement.
Factual and Procedural History
Wilson advertises her business as one that “specializes in the enforcement of
delinquent judgment claims.” On March 23, 2007, she wrote a letter to Vaughn, stating that
she could help him collect on a $1,091.97 small-claims judgment that he had against Daniel
Warren. On March 27, 2007, Vaughn filed an “Acknowledgment of Assignment of
Judgment” in small-claims court, thereby transferring his right to the judgment to Wilson.
Vaughn also executed an “Agreement for Assignment.” Under the terms of that agreement,
Vaughn assigned the judgment and the exclusive right to collect on the judgment, and he
would keep 60% of any money Wilson collected.
On April 20, 2007, the small-claims court set aside the Assignment of Judgment,
finding that Wilson was acting as a collection agency, which was prohibited from being a
party in a small-claims action under Administrative Order No. 18, and that she was not a
licensed attorney at law. The court also set aside all garnishments filed by Wilson.1 On July
1
Wilson appealed the order and several others to circuit court. In one of those cases, the
circuit court ruled that the assignment of judgment was valid. Based on that ruling, Wilson
filed a motion to reconsider setting aside the assignment in Vaughn’s case. On July 20, 2007,
the small-claims court recognized the circuit court’s order, but still found that Wilson, who
was acting as a collection agency and was not an attorney at law, lacked the authority to
practice in small-claims court. At some point, Wilson filed a petition for writ of mandamus
against the small-claims court. The pleadings from that petition are not in the record, but on
March 11, 2008, the circuit court denied Wilson’s petition, finding that as a collection agency
she lacked the authority in small-claims court and that, if she wanted to collect judgments,
she had to use the civil division of the district court. Our supreme court recently affirmed the
circuit court’s decision. See Wilson v. Dardanelle Dist. of the Dist. Ct. of Yell County, 375
Ark. 294, 290 S.W.3d 1 (2008).
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2, 2007, Vaughn sent a letter indicating that Wilson’s services were no longer needed. That
same day, he filed a request for a writ of garnishment for funds held by the Perryville Police
Department, seeking funds owed to Warren. Pursuant to the writ, he received checks from
the police department, which would eventually satisfy Vaughn’s judgment against Warren.
The instant case began on March 12, 2008, when Wilson filed a complaint against
Vaughn, seeking a share of the proceeds he collected on the judgment. The circuit court had
a bench trial on the merits on May 13, 2008.2 Vaughn presented the testimony of Cindy
Dixon, who stated that Wilson came into Vaughn’s shop one day and told Vaughn that he
would have to collect the judgment on his own. Dixon testified that Vaughn asked if he
owed any money, to which Wilson replied no. While questioning Dixon, Wilson “testified”
that she came to the shop after Wilson collected the judgment to discuss payment terms.
Six days after trial, the circuit court entered an order dismissing Wilson’s case. The
court made the following findings:
2. The exhibits introduced by the Plaintiff reveal no consideration was paid to
the Defendant upon either the execution of the “ACKNOWLEDGMENT OF
ASSIGNMENT OF JUDGMENT” or the “AGREEMENT FOR ASSIGNMENT.”
The court therefore finds that the Plaintiff is acting as a collection agency and
attempting to collect judgments with a percentage of the total recovery being her fee
rather than the total amount of the judgment if there had been in fact a true assignment
of the entire judgment.
3. The court further finds that although the “ACKNOWLEDGMENT OF
ASSIGNMENT OF JUDGMENT” was acknowledged in the manner and form
2
The May 13, 2008 trial was supposed to be a hearing on the summary-judgment motion, but
the circuit court decided to hear the proof as if there were no motion pending.
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required by law for the acknowledgment of deeds as required by Ark. Code Ann. §
16-65-120, the “AGREEMENT FOR ASSIGNMENT” was not so executed.
4. The court further finds that prior to the time that the Defendant collected any
amounts on the judgment involved in this action that the parties rescinded the
“ACKNOWLEDGMENT OF ASSIGNMENT OF JUDGMENT” and the
“AGREEMENT FOR ASSIGNMENT” and that the Defendant was authorized to
collect said judgment himself.
Analysis
The sole issue in this appeal is whether Wilson was entitled to collect a portion of
Vaughn’s judgment. We review a circuit court’s findings of fact following a bench trial
under the clearly-erroneous standard. See, e.g., Burke v. Elmore, 341 Ark. 129, 14 S.W.3d
872 (2000). A finding is clearly erroneous when, although there is evidence to support it, the
reviewing court on the entire evidence is left with a firm conviction that an error has been
committed. Sims v. Moser, 373 Ark. 491, 284 S.W.3d 505 (2008). Facts in dispute and
determinations of credibility are within the province of the fact-finder. Id.
In urging this court to reverse the circuit court’s order, Wilson discusses the elements
of a contract and argues that the parties in this case had a valid contract to assign the
judgment to her. She challenges the circuit court’s finding that the contract in this case failed
for lack of consideration. Wilson also disagrees with the circuit court’s characterization of
her business as a collection agency, though she argues that she was entitled to 40% of
Vaughn’s judgment even if her business was a collection agency. Finally, she disputes the
circuit court’s finding that the parties rescinded the contract. We address the third of these
arguments without addressing the first two, as the issue of rescission is dispositive of the
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appeal.
Parties to a contract may rescind it by mutual agreement, but the party claiming that
the contract has been rescinded has the burden of proving such claim. Standard Abstract &
Title Co. v. Rector-Phillips-Morse, Inc., 282 Ark. 138, 666 S.W.2d 696 (1984). Rescission
of an executory contract requires no new or independent consideration. First Nat’l Bank v.
Tate, 178 Ark. 1098, 13 S.W.2d 587 (1929).
The testimony presented supports the circuit court’s finding that the parties rescinded
the agreement. The evidence shows that Wilson informed Vaughn that he would need to
collect the judgment on his own, that she could no longer do it, and that he did not owe her
anything on the agreement. Wilson argues that this evidence is insufficient to support a
finding of rescission. But because the agreement mandated that she had the exclusive right
to pursue collection efforts and the entire purpose of the contract was for her to collect the
judgment, a court could reasonably find that the contract was rescinded. Accordingly, we
affirm.
Affirmed.
R OBBINS and M ARSHALL, JJ., agree.
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