Poff v. Peedin
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Cite as 2010 Ark. App. 365
ARKANSAS COURT OF APPEALS
DIVISION I
No. CA09-737
Opinion Delivered
NATHAN LEROY POFF, JR., JOHN
LAURENCE POFF, and JENNIFER
LYNN POFF BEAM
APPELLANTS
V.
CAROLYN SUE POFF PEEDIN
APPELLEE
April 28, 2010
APPEAL FROM THE CLEBURNE
COUNTY CIRCUIT COURT
[CV-2007-211-2]
HONORABLE ADAM HARKEY,
JUDGE
AFFIRMED
DAVID M. GLOVER, Judge
Appellants, Nathan LeRoy Poff, Jr., John Laurence Poff, and Jennifer Lynn Poff Beam,
are the adult children of Dr. Nathan LeRoy Poff, who died on July 26, 1994. At the time
of his death, Dr. Poff was married to his second wife, appellee Carolyn Sue Poff. Appellee
is not the appellants’ mother. She was eventually appointed as personal representative of the
estate. A dispute arose among the parties during the administration of Dr. Poff’s estate, and
a family-settlement agreement was entered in July 1996. Approximately ten years later,
additional property interests belonging to Dr. Poff were discovered in the form of mineral
rights to 615 acres located in Cleburne County. It is undisputed that those property interests
were unknown to any of the parties at the time the family-settlement agreement was entered.
Cite as 2010 Ark. App. 365
On August 13, 2007, appellants sought to quiet title to the mineral rights in them.
Appellee answered their complaint and counterclaimed that appellants were barred by the
terms of the family-settlement agreement from claiming any interest in the mineral rights.
On June 16, 2008, appellee filed a motion for summary judgment. Appellants contended in
response that summary judgment was not appropriate because the meaning of the familysettlement agreement was in dispute in that it was their intent to settle issues that existed at
the time the agreement was executed, not unknown matters such as subsequently discovered
property.
Appellee filed a motion for declaratory judgment on November 8, 2008, asserting
ownership of the mineral rights. Following a hearing on February 19, 2009, the trial court
entered its decree on April 14, 2009, denying the relief sought by appellants in their complaint
to quiet title and determining that appellee was the sole and rightful owner of the minerals.
This appeal followed in which appellants contend that the “agreement did not terminate the
rights of the Poff children in and to subsequently discovered mineral rights not listed in the
estate inventory, nor known to exist by any of the parties, and the circuit court erred in ruling
that the terms of the agreement gave Peedin sole ownership of the decedent’s mineral
interests.” We affirm.
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Cite as 2010 Ark. App. 365
Standard of Review
This case was decided by the trial court on appellee’s motion for declaratory
judgment.1 We review a circuit court’s findings of fact from a bench trial for clear error,
giving due regard to the opportunity of the circuit court to judge the credibility of the
witnesses. See Ark. R. Civ. P. 52(a); see also Poff v. Peedin, 2010 Ark. 136, ___ S.W.3d ___
(answering certified question regarding appropriate standard of review). A finding is clearly
erroneous when, although there is evidence to support it, the reviewing court on the entire
evidence is left with a definite and firm conviction that a mistake has been committed. Crane
v. Talliaferro, 2009 Ark. App. 336, ___ S.W.3d ___.
This appeal also clearly involves our review of the trial court’s construction of the
terms of the family-settlement agreement. Accordingly, our standard of review for contract
interpretation is implicated as well. When a contract is free of ambiguity, its construction and
legal effect are questions of law for the court to determine. Tri-Eagle Enterprises v. Regions
Bank, 2010 Ark. App. 64, ___ S.W.3d ___. When contracting parties express their intention
in a written instrument in clear and unambiguous language, it is the court’s duty to construe
the writing in accordance with the plain meaning of the language employed. Id. As
explained by our supreme court in Wal-Mart Stores, Inc. v. Coughlin, 369 Ark. 365, 371, 255
S.W.3d 424, 429 (2007):
Our standard of review for contract interpretation has been stated often:
“All orders, judgments, and decrees under this chapter [on declaratory judgments]
may be reviewed as other orders, judgments, and decrees.” Ark. Code Ann. § 16-111109 (Repl. 2006).
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The first rule of interpretation of a contract is to give to the language employed
the meaning that the parties intended. In construing any contract, we must consider
the sense and meaning of the words used by the parties as they are taken and
understood in their plain and ordinary meaning. The best construction is that which
is made by viewing the subject of the contract, as the mass of mankind would view it,
as it may be safely assumed that such was the aspect in which the parties themselves
viewed it. It is also a well-settled rule in construing a contract that the intention of the
parties is to be gathered, not from particular words and phrases, but from the whole
context of the agreement.
See also Alexander v. McEwen, 367 Ark. 241, 239 S.W.3d 519 (2006). It is a well-settled rule
that the intention of the parties to a contract is to be gathered, not from particular words and
phrases, but from the whole context of the agreement. Roberts Contr. Co., Inc. v. ValentineWooten Road Public Facility Bd., 2009 Ark. App. 437, ___ S.W.3d ___. The court is to give
great weight to the construction of the contract given to it by the parties, and it may look to
the conduct of the parties to determine their intent. Id. When a contract is free of
ambiguity, its construction and legal effect are questions of law for the court to determine.
Id. Language is ambiguous if there is doubt or uncertainty as to its meaning and it is fairly
susceptible to more than one equally reasonable interpretation. Id. The determination of
whether ambiguity exists is ordinarily a question of law for courts to resolve. Id.
Here, it is undisputed that none of the parties involved in this matter were aware of
the mineral rights at issue at the time the family-settlement agreement was entered, and,
consequently, the mineral rights were not listed as part of the estate’s inventory. There are
no allegations of fraud. As noted by appellants, Ark. Code Ann. section 28-53-119 allows for
the reopening of an estate under certain conditions, including the discovery of additional
property. But here, the estate had never even been properly closed. Therefore, unless the
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Cite as 2010 Ark. App. 365
terms of the family-settlement agreement bar consideration of the newly discovered mineral
rights, it is clear that a trial court could determine the proper distribution of such property.
The family-settlement agreement provided in pertinent part:
WHEREAS, the parties have been involved in litigation pertaining to the
interpretation of certain documents admitted to probate as the Last Will and Testament
of Nathan LeRoy Poff, deceased, in Cleburne County Probate No. P 94-51; the
decision in this matter having been appealed to the Arkansas Court of Appeals, in
Arkansas Court of Appeals No.: CA95-1302; and
WHEREAS, the parties have also been involved in litigation pertaining to the
foreclosure of certain real and personal property belonging to the Estate of Nathan
LeRoy Poff and Carolyn Sue Poff in Cleburne County Chancery No.: E 95-109-1;
the decision in this matter having been appealed to the Arkansas Court of Appeals, in
Arkansas Court of Appeals No.: CA 95-1303; and
WHEREAS, the parties wish to avoid further litigation necessary to finally
resolve the issues pertaining to all pending litigation; and
WHEREAS, the parties believe that it is in the best interest of all involved to
enter into a stipulated agreement among and between themselves;
NOW, THEREFORE, all parties agree as follows:
1. For and in consideration of $60,000.00, $20,000.00 to be paid to each Poff
child, the Poff Children hereby settle any and all interest they have as beneficiaries,
and/or heirs-at-law of Nathan L. Poff, deceased in Cleburne County Probate Case P
94-51. The sum of $60,000.00 for the three Poff Children shall be paid immediately
upon the delivery of this document executed by the three Poff Children, by Hoyt
Thomas, their attorney, to Michelle Strause, Attorney for Carolyn Sue Poff. This
settlement does not bar the Poff Children from seeking a deficiency judgment against
the Nathan L. Poff Estate in Cleburne Chancery Case No: E-95-109-1.
....
3. This agreement settles all matters and outstanding claims between the parties
with the exception of the payment of the foreclosure decree hereinafter set forth.
....
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7. Both appeals in the Arkansas Court of Appeals, No CA 95-1302 and CA
95-1303 shall be dismissed.
8. After dismissal of the two cases appealed to the Arkansas Court of Appeals,
the parties hereto agree to enter their appearance in the Cleburne County Probate
Court and the Cleburne County Chancery Court for the purpose of reducing this
agreement to a Court Order in each case. . . . With the execution of the agreement,
. . ., it is understood that Carolyn Sue Poff may administer the Estate of Nathan L.
Poff according to Arkansas law without any further obligation or notice to the Poff
Children.
....
10. This Agreement shall bind the heirs, administrators, executors, and assigns
of the parties hereto.
Appellants contend that the language of the family-settlement agreement was clearly
intended to address only existing claims between the parties and the division of property that
was known to the parties, not undisputed and unknown property rights. In support of their
position, they emphasize the settlement-agreement language that ties the agreement to the
litigation that was pending between the parties in designated case numbers and point out that
the estate inventory and amended inventory did not list the mineral property rights at issue
here. They also rely upon the fact that the agreement had no language addressing the
possibility of subsequently discovered property nor any language releasing all claims, “known
or unknown.” With respect to the contract provision settling “all matters and outstanding
claims between the parties,” they contend that there were no outstanding claims between the
parties regarding anything other than the property that was known to exist in the estate.
They also analogize the settlement agreement to a release signed by an injured party
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Cite as 2010 Ark. App. 365
concerning an automobile collision, and argue that “in the absence of express wording that
the release covers injuries or other claims that are unknown at the time of the execution of
the release, the majority of states have held that such a release does not cover future claims
for unknown injuries.”
Appellee counters, in essence, that the trial court did not err in concluding that the
parties intended by their agreement to settle the entire estate and that, under the terms of that
agreement, she was entitled to the subsequently discovered mineral rights. Both parties
acknowledge that there are no Arkansas cases directly on point with the facts presented here.
The trial court examined the settlement agreement, and, clearly finding it to be
unambiguous, concluded that appellee was the sole and rightful owner of any mineral rights
owned by Dr. Poff at the time of his death, citing the following language in its final decree:
3. Paragraph 1 of the Family Settlement Agreement states: “For and in
consideration of $60,000, etc., the Poff Children hereby settle any and all interest
they have as beneficiaries” with the exception of their right to seek “a deficiency
judgment against the Estate in Cleburne Chancery Case No. E-95-109-1.”
4. Paragraph 3 of the Family Settlement Agreement states: “This agreement
settles all matters and outstanding claims between the parties.”
5. This Court finds that the term “outstanding claims” contained in said
paragraph 3 included any and all claims that could have been asserted through a search
of the public record.
(Emphasis in original.)
After our review of the contract language and the arguments raised by the parties in
this appeal, we hold that there was no clear error in the trial court’s findings of fact and that
there was no error of law in its construction of the family-settlement agreement.
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Cite as 2010 Ark. App. 365
Affirmed.
VAUGHT, C.J., and GRUBER, J., agree.
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