Forever Green Athletic Fields, Inc. v. Lasiter Construction, Inc.
Annotate this Case
Download PDF
Cite as 2011 Ark. App. 347
ARKANSAS COURT OF APPEALS
DIVISION II
No. CA10-1049
FOREVER GREEN ATHLETIC
FIELDS, INC. d/b/a PROGREEN,
KEITH DAY, DAVID RIPKA,
PROGREEN SPORT SURFACES, LLC,
and RAYMOND FRITZ
APPELLANTS/CROSS-APPELLEES
Opinion Delivered
MAY 11, 2011
APPEAL FROM THE PULASKI
COUNTY CIRCUIT COURT,
THIRD DIVISION
[NOS. CV06-4800 & CV06-4801]
HONORABLE JAY MOODY, JUDGE
V.
LASITER CONSTRUCTION, INC.
APPELLEE/CROSS-APPELLANT
AFFIRMED ON DIRECT APPEAL;
AFFIRMED ON CROSS-APPEAL
ROBERT J. GLADWIN, Judge
Appellant Forever Green Athletic Fields, Inc. (Forever Green) and appellant Progreen
Sport Surfaces, LLC (PSS) separately appeal the circuit court’s June 4, 2008 order, which
denied their motions for judgment notwithstanding the verdict but granted
appellee/cross-appellant Lasiter Construction, Inc. (Lasiter Construction) a new trial on its
breach-of-contract claims. Lasiter Construction cross-appeals the court’s denial of a new trial
on its third-party beneficiary claim and the denial of its motion for judgment notwithstanding
the verdict. The parties raise a total of nine points on appeal and cross-appeal. We affirm on
direct appeal, and we affirm on cross-appeal.
Cite as 2011 Ark. App. 347
Background
These parties became involved with one another in 2004, when Forever Green bid
on several construction projects in Arkansas to supply and install ProGreen1 synthetic grass
football fields for the Batesville and Rogers School Districts, Pulaski Academy, Shiloh
Christian School, and the University of Arkansas (collectively referred to as the “projects”).
Forever Green was awarded the bid for the projects but subsequently learned it could not act
as the contractor because it did not have a proper contractor’s license. Lasiter Construction
was awarded the bids, and it negotiated with Forever Green to obtain ProGreen materials
for use on the projects.
In 2006, Forever Green sued Lasiter Construction for the unpaid balance of the
materials it supplied. Lasiter Construction answered and counterclaimed for cost overruns
that it contended Forever Green agreed to be responsible for and for claims it received by
assignment from the University of Arkansas for problems it had with its synthetic fields.
Lasiter Construction also filed a third-party complaint against appellant PSS and other
third-party defendants contending that they were jointly and severally responsible as partners
with Forever Green for Lasiter Construction’s claims against Forever Green. PSS answered
and counterclaimed against Lasiter Construction and filed a third-party complaint against
Lasiter Construction’s president, Michael Lasiter, claiming various tortious conduct for
1
ProGreen is a trademark that multiple parties, including both Forever Green and PSS,
have the right to use.
2
Cite as 2011 Ark. App. 347
bringing PSS into the lawsuit. A seven-day trial was held and the issues were submitted to
the jury on interrogatories, resulting in a judgment entered April 25, 2008, that denied all the
claims and counterclaims of all the parties and awarded no damages. Motions were filed by
the parties for judgment notwithstanding the verdict or, in the alternative, for a new trial. An
order entered June 4, 2008, denied all motions for judgment notwithstanding the verdict but
granted Lasiter Construction a new trial on its breach-of-contract claims. This appeal
followed.
I. Arguments on Direct Appeal
A. New Trial
We first address the argument by both Forever Green and PSS that the circuit court
erred in granting Lasiter Construction a new trial. We disagree.
In its counterclaim, as amended, Lasiter Construction alleged that Forever Green was
responsible for the cost overruns associated with the projects. Forever Green defended on
the basis that the alleged agreement that it would be responsible for cost overruns was
unenforceable because of the statute of frauds. The statute of frauds, codified at Arkansas
Code Annotated section 4-59-101(a)(2) (Repl. 2001), provides in pertinent part:
Unless the agreement, promise, or contract, or some memorandum or note
thereof, upon which an action is brought is made in writing and signed by the party
to be charged therewith, or signed by some other person properly authorized by the
person sought to be charged, no action shall be brought to charge any . . . [p]erson,
upon any special promise, to answer for the debt, default, or miscarriage of another.
3
Cite as 2011 Ark. App. 347
Ark. Code Ann. § 4-59-101(a)(2). Forever Green contends that an agreement for it to be
responsible for cost overruns is within the statute of frauds because it is an agreement to
answer for the debt, default, or miscarriage of another, in this case, the installation
subcontractors.
Prior to giving the instructions on the statute of frauds, the circuit court expressed
some concern over whether they were supported by the evidence. The court nevertheless
gave the requested instructions as follows:
The Statute of Frauds requires that certain contracts be in writing. Included in
those contracts that must be in writing are promises to answer for the debt, default or
miscarriage of another. In other words, if one is to guarantee the work of another, the
contract must either be in writing or accompanied by some additional consideration,
not included in the primary contract between the parties.
If you find that Forever Green promised Lasiter to be responsible for cost
overruns, then the Statute of Frauds may apply.
An oral undertaking to answer for the debt of another without any new
consideration is a collateral undertaking and not enforceable under the Statute of
Frauds. However, an oral contract is considered original and enforceable when the
agreement is based on new consideration or benefit moving to the promisor.
When considering whether the undertaking is collateral or original, you should
look to the words of the promise, the situation of the parties, and the circumstances
surrounding the transaction. If you find that Forever Green promised to be
responsible for cost overruns, you then must decide whether that promise was a
collateral promise to the promise to supply the materials for the fields. If it was
collateral, then you must decide whether Lasiter offered any additional consideration.
If the promise was collateral, no consideration was conferred by Lasiter to Forever
Green and there is no clear writing evincing the same, that promise is barred by the
Statute of Frauds, and Forever Green cannot be bound by same.
4
Cite as 2011 Ark. App. 347
Lasiter Construction objected to the giving of the statute-of-frauds instruction,
contending that the statute of frauds did not apply because the agreement as to cost overruns
was original to the agreement and not collateral.2 The court submitted two special
interrogatories asking the jury to decide whether the terms of the agreement were as Lasiter
Construction asserted and whether Forever Green’s agreement to be responsible for cost
overruns was barred by the statute of frauds. The jury answered both interrogatories in the
affirmative.3 Lasiter Construction filed a motion for judgment notwithstanding the verdict
or, alternatively, a motion for new trial. The circuit court found that there was insufficient
evidence to establish that the agreement as to the cost overruns was collateral to the original
agreement and granted the motion for a new trial based on Arkansas Rule of Civil Procedure
59(a)(8).
A Rule 59(a)(8) motion may be used to determine if it was an error of law in giving
instructions to the jury. See Coca-Cola Bottling Co. v. Priddy, 328 Ark. 666, 945 S.W.2d 355
(1997). In reviewing the circuit court’s grant of a motion for new trial, the test is whether
the circuit court abused its discretion. Carlew v. Wright, 356 Ark. 208, 148 S.W.3d 237
(2004). A showing of abuse of discretion is more difficult when a new trial has been granted
2
In its arguments to the circuit court on the instruction, Lasiter Construction also
incorporated its arguments made in response to the motion in limine that the statute of frauds
did not apply because the agreement was taken out of the reach of the statute by partial
performance and because there was a writing that satisfied the statute of frauds.
3
The court also submitted a third interrogatory that preceded the other two
interrogatories and asked whether the terms of the agreement were as alleged by Forever
Green. The jury unanimously answered in the negative.
5
Cite as 2011 Ark. App. 347
because the party opposing the motion will have another opportunity to prevail. Id. Abuse
of discretion in granting a new trial means a discretion improvidently exercised, i.e., exercised
without due consideration. Razorback Cab of Fort Smith, Inc. v. Martin, 313 Ark. 445, 856
S.W.2d 2 (1993).
The real issue before us is not whether Forever Green agreed to answer for the debt
or default of the installation subcontractors, but whether it is being sued upon its own
obligation outside of the statute of frauds. Our courts have long recognized that a promise
is not within the statute of frauds where the main purpose of the promissor was to serve some
purpose of his own, even though the effect is to be responsible for the debt of another. See
Oil City Iron Works v. Bradley, 171 Ark. 45, 283 S.W. 362 (1926); S. R. H. Robinson & Son
Contracting Co. v. Twin City Bank, 103 Ark. 219, 146 S.W. 523 (1912); Gale v. Harp, 64 Ark.
462, 43 S.W. 144 (1897); Chapline v. Atkinson, Co., 45 Ark. 67 (1885).
Forever Green and PSS rely on Michael Lasiter’s testimony that the agreement
between Lasiter Construction and Forever Green “morphed” over time and was, therefore,
a forbidden modification of an agreement required to be in writing. However, that
presupposes that the agreement was required to be in writing in the first instance. They also
stress the fact that the contract between Lasiter Construction and the installation
subcontractor was not entered into until after the agreement between Forever Green and
Lasiter Construction was made to argue that the agreement on cost overruns was collateral
to the original agreement and, therefore, within the statute of frauds. However, Lasiter’s
testimony actually supports the argument that the cost-overrun provision was part of the
6
Cite as 2011 Ark. App. 347
original agreement and not for the primary benefit of the installation subcontractor, because
the evidence shows Forever Green wanted a presence in Arkansas and could not establish
that presence without having a contractor’s license. Lasiter Construction knew that Forever
Green could not do the installation on these projects itself and offered to serve as project
manager for a fee if Forever Green would be responsible for all cost overruns, thereby
reducing the risk to Lasiter Construction. Forever Green was also to recommend qualified
installation subcontractors. Lasiter Construction later hired one subcontractor recommended
by Forever Green. The determination of whether an undertaking to answer for the debt of
another is collateral or original is one of fact. Capel v. Allstate Ins. Co., 78 Ark. App. 27, 77
S.W.3d 533 (2002). When considering whether the undertaking is collateral or original,
courts look to the words of the promise, the situation of the parties, and the circumstances
surrounding the transaction. Id.; see also E.P. Dobson, Inc. v. Richard, 17 Ark. App. 155, 705
S.W.2d 893 (1986).
As noted earlier, the circuit court was concerned about whether there was evidence
to support the instructions on the statute of frauds. After the jury returned its answers to the
interrogatories, the court considered the arguments in Lasiter Construction’s motion for new
trial, found that there was not sufficient evidence to support the giving of the instruction, and
ordered a new trial on Lasiter Construction’s breach-of-contract claims. We cannot say that,
in so doing, the circuit court acted improvidently or without due regard. In other words, PSS
and Forever Green have failed to demonstrate that the circuit court abused its discretion, and
their arguments on this point thus fail.
7
Cite as 2011 Ark. App. 347
Moreover, we are further convinced that the circuit court did not abuse its discretion
in granting a new trial because the jury’s answers to interrogatories two and eight were
inconsistent. In interrogatory two, the jury was asked to determine whether the contract was
as alleged by Lasiter Construction. The jury answered in the affirmative. In interrogatory
eight, the jury was asked whether Forever Green’s agreement to be responsible for cost
overruns was barred by the statute of frauds. The jury answered in the affirmative. The
ultimate test of inconsistency is whether the conflict is such that one answer would require
a verdict for the plaintiffs and the other a verdict for the defendants. Russell v. Pryor, 264 Ark.
45, 568 S.W.2d 918 (1978). Under this test, the jury’s finding that the contract was as
asserted by Lasiter Construction necessarily included a determination that the agreement as
to the cost overruns was original and not collateral, while the finding that the agreement was
barred by the statute of frauds was a determination that the agreement as to the cost overruns
was collateral. There is simply no way to reconcile the answers to these interrogatories.
B. Denial of Motion for Judgment Notwithstanding the Verdict
PSS and Forever Green next argue that the circuit court erred in denying their motion
for judgment notwithstanding the verdict because of Lasiter Construction’s violation of the
Arkansas Contractor’s Licensing Law.4 A motion for judgment notwithstanding the verdict
allows the court to reconsider all other questions of law raised during trial. Willson Safety
4
Forever Green and PSS also moved for summary judgment on this issue, which was
denied by the circuit court. They also argue the point on appeal. The denial of a motion for
summary judgment is neither reviewable nor appealable, even after there has been a trial on
the merits. Bull Motor Co. v. Murphy, 101 Ark. App. 33, 270 S.W.3d 350 (2007).
8
Cite as 2011 Ark. App. 347
Prods. v. Eschenbrenner, 302 Ark. 228, 788 S.W.2d 729 (1990). This issue involves the
application of the Contractor’s Licensing Law. The question of the correct interpretation and
application of an Arkansas statute is a question of law, which we decide de novo. Cooper
Realty Invs., Inc. v. Arkansas Contrs. Licensing Bd., 355 Ark. 156, 134 S.W.3d 1 (2003).
In this point, both Forever Green and PSS contend that Lasiter Construction’s claims
against them were barred as a matter of law because of Lasiter Construction’s failure to
comply with portions of the Contractor’s Licensing Law, specifically Ark. Code Ann. §§ 1725-101 and 17-25-103. According to PSS and Forever Green, the violation occurred when
Lasiter Construction required Forever Green to supervise the installation of the surfaces for
the projects without Forever Green having a contractor’s license. Section 17-25-101(a)(1)
defines a “contractor” as
any . . . corporation, . . . that, for a fixed price, . . . contracts or undertakes to
construct, . . . or assumes charge in a supervisory capacity or otherwise, or manages
the construction . . . or any other improvement or structure on public or private
property for lease, rent, resale, public access, or similar purpose, . . . when the cost of
the work to be done, or done, in the State of Arkansas by the contractor, . . . is
twenty thousand dollars ($20,000) or more.
Ark. Code Ann. § 17-25-101(a)(1) (Repl. 2010). PSS and Forever Green argue that Lasiter
Construction’s actions violated the definition of a contractor and its counterclaim was barred
as a matter of law by Ark. Code Ann. § 17-25-103. That section provides as follows:
(a) Any contractor shall be deemed guilty of a misdemeanor and shall be liable
to a fine of not less than one hundred dollars ($100) nor more than two hundred
dollars ($200) for each offense, with each day to constitute a separate offense, who:
(1)(A) For a fixed price, . . . assumes charge in a supervisory capacity or
otherwise, or manages the construction, . . . or any other improvement or structure,
9
Cite as 2011 Ark. App. 347
when the cost of the work to be done, or done, in the State of Arkansas by the
contractor, including, but not limited to, labor and materials, is twenty thousand
dollars ($20,000) or more, without first having procured a license with the proper
classification to engage in the business of contracting in this state.
....
(d) No action may be brought either at law or in equity to enforce any
provision of any contract entered into in violation of this chapter. No action may be
brought either at law or in equity for quantum meruit by any contractor in violation
of this chapter.
Ark. Code Ann. § 17-25-103(a)(1)(A), (d) (Repl. 2010). The provisions of section 17-25103(d) are punitive in nature and must be strictly construed so that, if a provision is not clear
and positive, every doubt as to its construction must be resolved in favor of the one against
whom the enactment is sought to be applied. Meadow Lake Farms, Inc. v. Cooper, 360 Ark.
164, 200 S.W.3d 399 (2004).
The Contractor’s Licensing Law does not bar Lasiter Construction’s counterclaim.
The purpose behind the Contractor’s Licensing Law is to require contractors who desire to
engage in particular types of construction work to meet standards of responsibility such as
experience, ability, and financial condition. Brimer v. Arkansas Contractors Licensing Bd., 312
Ark. 401, 849 S.W.2d 948 (1993). This is made clear in section 17-25-103(a)(2) through
(a)(5), where it clearly prohibits an unlicensed contractor from presenting or filing the license
certificate of another; giving false or forged evidence in order to obtain its license;
impersonating another; or using an expired or revoked license. It is undisputed that Lasiter
Construction has a valid contractor’s license. It is also undisputed that Lasiter Construction
was not attempting to do any of the activities prohibited by section 17-25-103(a)(2) through
10
Cite as 2011 Ark. App. 347
(a)(5). Therefore, section 17-25-103(d) does not apply to bar Lasiter Construction’s claims
against Forever Green or PSS.
C. Denial of Motion for Directed Verdict
Next, PSS alone argues that the circuit court erred in denying its motion for a directed
verdict concerning whether it and Forever Green were operating as a partnership or other
joint venture and in denying its motion in limine to prevent Lasiter Construction from
making collective reference to Forever Green and PSS as “Progreen.”
As noted earlier, the name “ProGreen” was a trademark that multiple parties,
including both Forever Green and PSS, had the right to use. Lasiter Construction sought to
recover from Forever Green and PSS based on a theory that they were a partnership or other
form of joint venture. David Ripka, the former vice president of Forever Green, testified that
there was a partnership between PSS and Forever Green and that this partnership was in effect
at the time the contracts for the projects were bid. Ripka explained that there were so many
“ProGreens” and that Forever Green also used the name “ProGreen Sport Technologies.”
He further said that the use of the name “ProGreen” was because Forever Green was going
to buy the assets of PSS. However, the sale was never consummated. Ripka also explained
that Forever Green never took the name “ProGreen” for their company, but he did use
“ProGreen” in referring to his company as part of a marketing campaign. Keith Day, the
president of Forever Green, also testified that there was a partnership between PSS and
Forever Green from early 2004 until sometime in 2005. Charlie Dawson, Forever Green’s
former director of field operations and the person responsible for the agreement between
11
Cite as 2011 Ark. App. 347
Forever Green and Lasiter Construction, had also submitted correspondence and bid
proposals that referred to Forever Green as “ProGreen.” There was also evidence to the
contrary in the form of Dawson’s testimony that there was no partnership between Forever
Green and PSS with respect to the sale of the fields in 2004.
The question of whether a partnership existed is one of fact. See Gammill v. Gammill,
256 Ark. 671, 510 S.W.2d 66 (1974). The circuit court did not err in refusing PSS’s motion
for a directed verdict. Wal-Mart Stores, Inc. v. Tucker, 353 Ark. 730, 120 S.W.3d 61 (2003).
We need not separately discuss PSS’s argument concerning its motion in limine.
D. Attorney Disqualification
In this point, PSS argues that the circuit court erred in failing to disqualify Lasiter
Construction’s attorney and his entire firm. We will affirm a circuit court’s order that denies
a motion to disqualify an attorney unless it is shown that the court abused its discretion. Smith
v. Campbell, 71 Ark. App. 23, 26 S.W.3d 139 (2000).
In December 2007, PSS notified attorney Richard Newland, the lead attorney for
Lasiter Construction, that it expected to call him as a material witness in the upcoming trial.
On March 19, 2008, Forever Green filed its motion seeking to disqualify Newland and his
entire firm from representing Lasiter Construction at trial. PSS filed a similar motion on
March 21, 2008. In its brief in support of the motion, PSS argued that Newland’s testimony
was central to the issues of whether there was a violation of the Contractor’s Licensing Law,
whether Forever Green was to serve merely as a material supplier or an installer of the
artificial surfaces, and whether there was a partnership or joint venture between PSS and
12
Cite as 2011 Ark. App. 347
Forever Green. PSS also argued that any disqualification of Newland would not result in any
undue hardship to Lasiter Construction.
On March 27, 2008, the circuit court held a hearing on the motion and on Lasiter
Construction’s motion to quash a subpoena issued to Newland. The court ruled from the
bench and denied the motion to quash the subpoena, finding that Newland was a material
witness. The court also denied the motions to disqualify Newland based on the substantial
hardship a disqualification would work on Lasiter Construction. Newland later testified at
trial concerning his communication with the Arkansas Contractor’s Licensing Board and on
the terms of the agreement between Forever Green and Lasiter Construction.
Rule 3.7 of the Model Rules of Professional Conduct provides that a lawyer shall not
act as advocate at a trial in which the lawyer is likely to be a necessary witness. The rule
allows for exceptions where the testimony relates to an uncontested issue or to the nature and
value of legal services rendered in the case, or where the disqualification would work
substantial hardship on the client. The fact that an attorney has served as both witness and
advocate in the same action does not require automatic reversal. Smith v. Wharton, 349 Ark.
351, 78 S.W.3d 79 (2002); McIntosh v. Southwestern Truck Sales, 304 Ark. 224, 800 S.W.2d
431 (1990). The supreme court has also noted that the rule against the attorney who becomes
a witness continuing as an advocate was not designed to permit a lawyer to call opposing
counsel as a witness and thereby disqualify him. McCoy Farms, Inc. v. J & M McKee, 263 Ark.
20, 563 S.W.2d 409 (1978). However, based on the circuit court’s finding that Newland was
13
Cite as 2011 Ark. App. 347
a material witness, we cannot say that either PSS or Forever Green was attempting to call
Newland as a ploy to disqualify him and his firm.
In the present case, the circuit court denied the motion to disqualify Newland based
upon the hardship it would cause Lasiter Construction. The motion was denied at a hearing
held just four days prior to trial. Undoubtedly at that late date, disqualification would have
worked a great injustice on Lasiter Construction and forced a lengthy postponement of the
trial. Therefore, we conclude that the circuit court did not abuse its discretion in denying the
motion to disqualify Newland and his entire firm.
Although we hold that the circuit court did not abuse its discretion in denying the
motions to disqualify Newland and his entire firm, we note that, on remand, a hardship will
no longer exist. Rule 1.10(a) of the Model Rules provides,
While lawyers are associated in a firm, none of them shall knowingly represent
a client when any one of them practicing alone would be prohibited from doing so by
Rules 1.7, 1.9 or 3.7, unless the prohibition is based on a personal interest of the
prohibited lawyer and does not represent a significant risk of materially limiting the
representation of the client by the remaining lawyers in the firm.
Under this rule, if Newland is barred from representing Lasiter Construction, then the same
bar is imputed to all lawyers who are associated with him in the same firm. See Norman v.
Norman, 333 Ark. 644, 970 S.W.2d 270 (1998). The time constraints that led the circuit court
to conclude that the disqualification would work a hardship on Lasiter Construction will not
be present on remand, and Lasiter Construction will have time to obtain new counsel prior
to retrial.
14
Cite as 2011 Ark. App. 347
E. Dismissal of Tort Claims
Finally, PSS makes a multi-part argument that the circuit court erred in dismissing its
various tort claims against Lasiter Construction and Michael Lasiter for bringing PSS into this
suit.
On January 30, 2007, Lasiter Construction filed its third-party complaint against PSS,
and PSS responded by filing an answer and counterclaim on April 23, 2007. PSS also asserted
a third-party complaint against Michael Lasiter. PSS asserted that Lasiter Construction acted
in bad faith in filing its third-party complaint against PSS because it knew that PSS was not
connected with Forever Green or the installation subcontractors. The third-party complaint
against Michael Lasiter sought to pierce the corporate veil and hold Michael Lasiter
personally responsible for the torts of Lasiter Construction.
Michael Lasiter filed a motion to dismiss the third-party complaint against him on the
basis that it failed to state facts upon which relief could be granted. The motion asserted that
PSS’s third-party complaint only alleged conclusions as to why the corporate veil should be
pierced. Lasiter Construction filed a separate motion seeking to dismiss PSS’s counterclaim,
also on the basis that it failed to state facts upon which relief could be granted.
After a hearing on both motions, the circuit court ruled from the bench and granted
Lasiter Construction’s motion as to the deceit and fraud, tortious interference, and Arkansas
Deceptive Trade Practices Act counts. The court granted Michael Lasiter’s motion, finding
that “that cause of action is [not] necessary or proper.” The court denied Lasiter
Construction’s motion as to the malicious prosecution and abuse-of-process counts.
15
Cite as 2011 Ark. App. 347
On February 22, 2008, Lasiter Construction filed a motion for summary judgment as
to PSS’s claims of malicious prosecution and abuse of process. In its supporting brief, Lasiter
Construction argued that it had a good-faith basis for asserting that PSS and Forever Green
were jointly and severally liable for Lasiter Construction’s damages and that PSS had failed
to prove an essential element of its claim, namely, that the proceedings instituted by Lasiter
Construction had been terminated in PSS’s favor. PSS filed a response in which it asserted
that the motion was untimely under Ark. R. Civ. P. 56 and the circuit court’s scheduling
order. The court granted Lasiter Construction’s motion as to PSS’s claims for malicious
prosecution and abuse of process.
1. Malicious Prosecution
PSS first argues that the circuit court erred in granting summary judgment in favor of
Lasiter Construction on PSS’s claim for malicious prosecution against Lasiter Construction.5
We disagree.
In Farm Service Cooperative, Inc. v. Goshen Farms, Inc., 267 Ark. 324, 590 S.W.2d 861
(1979), the supreme court held that there was no basis for the filing of a counterclaim for
malicious prosecution in the same action that was alleged to have been the basis of the
malicious prosecution. The court stated that, in such a situation, the first action had not been
terminated in favor of the plaintiff in the malicious-prosecution action and, therefore, an
5
PSS does not separately argue its abuse-of-process claim in its brief. An argument not
raised by the appellant in his brief cannot be considered by this court on appeal. Vickers v.
Freyer, 41 Ark. App. 122, 850 S.W.2d 10 (1993).
16
Cite as 2011 Ark. App. 347
essential element of the cause of action for malicious prosecution was missing. 267 Ark. at
334–35, 590 S.W.2d at 867. Because the malicious-prosecution action was prematurely
brought, summary judgment for the defending party was proper. 267 Ark. at 335, 590
S.W.2d at 867. PSS asserts that it should have been allowed to prove at trial that the
proceedings were concluded in its favor and that there was no law that prevented the
initiation of a cause of action based upon elements expected to be proved at trial. However,
PSS cites no authority for this proposition. Moreover, it is contrary to the holding in Farm
Service. Therefore, summary judgment was proper on PSS’s malicious-prosecution claim.
2. Arkansas Deceptive Trade Practices Act and Tortious Interference Claims
PSS next argues that the circuit court erred in dismissing its claim under the Arkansas
Deceptive Trade Practices Act and its claim for tortious interference with a contract or
business expectancy. We review a circuit court’s decision on a motion to dismiss by treating
the facts alleged in the complaint as true and by viewing them in the light most favorable to
the plaintiff. Biedenharn v. Thicksten, 361 Ark. 438, 206 S.W.3d 837 (2005). In viewing the
facts in the light most favorable to the plaintiff, the facts should be liberally construed in
plaintiff’s favor. Id. Our rules require fact pleading, and a complaint must state facts, not mere
conclusions, in order to entitle the pleader to relief. Id. (citing Ark. R. Civ. P. 8(a)(1)).
The Arkansas Deceptive Trade Practices Act provides a private right of action to “any
person” who suffers actual damage or injury as a result of a violation of the Act. See Ark.
Code Ann. § 4-88-113(f). The Act prohibits a variety of listed practices, including
“[k]nowingly making a false representation as to the . . . sponsorship . . . of goods or services”
17
Cite as 2011 Ark. App. 347
and a catchall provision prohibiting “any other unconscionable, false, or deceptive act or
practice in business, commerce, or trade.” Ark. Code Ann. § 4-88-107(a)(1), (a)(10). The
elements of such a cause of action are (1) a deceptive consumer-oriented act or practice
which is misleading in a material respect, and (2) injury resulting from such act. See Ark.
Code Ann. § 4-88-113(f). A private cause of action does not arise absent a showing of both
violation and resultant damages. Wallis v. Ford Motor Co., 362 Ark. 317, 208 S.W.3d 153
(2005). PSS’s counterclaim fails to assert that Lasiter Construction engaged in any type of
consumer-oriented act or practice that caused damage to PSS. Instead, PSS alleges that Lasiter
Construction made “false representations as to its services and business activities and engaged
in unconscionable, false, or deceptive acts or practices” and that Lasiter Construction’s
actions “constitute fraud and are deceptive and unconscionable as defined in the Arkansas
Deceptive Trade Practices Act.” However, PSS never explains what the false representations
were or what acts Lasiter Construction engaged in that violated the Deceptive Trade
Practices Act. Nor does PSS explain how it was damaged by Lasiter Construction’s actions.
Based on the language of section 4-88-113(f), there must be a causal connection between the
violation of the Deceptive Trade Practices Act and the injury. Because PSS failed to allege
facts setting forth a cause of action for violation of the Deceptive Trade Practices Act, the
circuit court properly dismissed PSS’s claim under the Act.
We next turn to that part of PSS’s argument in which it contends that the circuit
court erred in dismissing its claim for tortious interference with a contract or a business
expectancy. Under Arkansas law, in order to state a claim for tortious interference, PSS must
18
Cite as 2011 Ark. App. 347
allege (1) the existence of a valid contract or a business expectancy; (2) Lasiter Construction’s
knowledge of that contract or expectancy; (3) intentional interference inducing or causing
termination of the contract or expectancy; and (4) resultant damage to PSS. See Dodson v.
Allstate Ins. Co., 345 Ark. 430, 47 S.W.3d 866 (2001); Brown v. Tucker, 330 Ark. 435, 954
S.W.2d 262 (1997). Some precise business expectancy or contractual relationship must be
obstructed in order to commit the tort of interference with a business expectancy. Stewart
Title Guar. Co. v. American Abstract & Title Co., 363 Ark. 530, 215 S.W.3d 596 (2005). In the
present case, there are no facts alleged demonstrating that PSS had a valid contractual
relationship or business expectancy that Lasiter Construction interfered with, or that it was
damaged by Lasiter Construction’s alleged actions. Instead, the allegations were that Lasiter
Construction’s actions damaged its reputation and interfered with PSS’s ability to contract
in the state of Arkansas or elsewhere. These allegations are nothing more than a general
desire to be able to contract in the state of Arkansas and, as such, do not show a specific
relationship or expectancy with which Lasiter Construction interfered. Therefore, the circuit
court did not err in granting the motion to dismiss PSS’s tortious-interference claim.
3. Piercing the Corporate Veil
Finally under this point, PSS argues that the circuit court erred in dismissing its thirdparty complaint against Michael Lasiter.
The doctrine of piercing the corporate veil is an equitable remedy; it is not itself a
cause of action; rather, it is a means of imposing liability on an underlying cause of action,
such as a tort or breach of contract. See William Meade Fletcher, Fletcher Cyclopedia of the Law
19
Cite as 2011 Ark. App. 347
of Corporations, § 41.28 (2006); Winchel v. Craig, 55 Ark. App. 373, 383, 934 S.W.2d 946, 951
(1996) (Rogers, J., dissenting); Gass v. Anna Hosp. Corp., 911 N.E.2d 1084 (Ill. App. 2009).
A separate cause of action to pierce the corporate veil does not exist independent from the
claims asserted against the corporation. Morris v. New York State Dep’t of Taxation and Fin.,
623 N.E.2d 1157 (N.Y. 1993); Drury Dev. Corp. v. Foundation Ins. Co., 668 S.E.2d 798 (S.C.
2008). In other words, without a proper claim for corporate liability, the issue of disregarding
the corporate entity simply does not arise. Because we affirm the summary judgment on the
malicious prosecution and the dismissal of the tortious-interference and Deceptive Trade
Practices Act claims, there are no underlying claims against the corporation to provide a basis
for piercing the corporate veil and imposing personal liability on Michael Lasiter.
II. Arguments on Cross-Appeal
A. Third-Party-Beneficiary Claims
Lasiter Construction first argues that the order granting it a new trial on its breach-ofcontract claims should be expanded to include the third-party-beneficiary claims that were
assigned to it. According to the circuit court’s order granting Lasiter Construction’s motion
for new trial, the new trial was granted to the claims based on breach of contract. The thirdparty-beneficiary claims are clearly based on breach of contract and are therefore included
in the new trial.
B. Breach-of-Warranty Claims
Lasiter Construction next argues that the circuit court erred in denying its motion for
judgment notwithstanding the verdict or, in the alternative, a new trial on the breach-of20
Cite as 2011 Ark. App. 347
warranty claims assigned to it. The jury was instructed as to the elements of a breach-ofwarranty claim and included both express and implied warranties. An interrogatory was
submitted to the jury asking it to determine whether Forever Green breached any warranties.
Ten members of the jury answered in the negative. The jury was also asked to determine
what damages Lasiter Construction suffered as a result of Forever Green’s breach of any
warranties. The jury unanimously determined “$0.”
In its argument, Lasiter Construction relies on two warranties that Forever Green made
concerning its product. The first is that the product was impervious to water.
Dave Ripka testified that he was not aware that Lasiter Construction was claiming that
Forever Green’s product was represented to them as impervious to water. He was aware that
the University of Arkansas claimed that representations had been made to it that the product
was impervious to water. Ripka asserted that the individual product sheets were impervious
to water, but added that the seams between the sheets were not necessarily impervious to
water. He said that the installation subcontractor installed the product using spikes. He had
also testified that the product manufacturer suggested using mechanical hook tape on all
seams. Ripka added that the use of the spikes would only minutely affect the product where
the nail had been but that water could still collect underneath the surface.
Keith Day, the president of Forever Green, similarly testified that, although the
individual product sheets were impervious to water, the seams between the 250 to 300 sheets
that are used on a field are not necessarily impervious to water.
21
Cite as 2011 Ark. App. 347
The jury had been instructed that the failure to conform must proximately cause Lasiter
Construction’s damages. Lasiter Construction suggests that Forever Green was responsible for
the installation subcontractor using nails and spikes for the installation. However, Ripka
testified that the subcontractor’s use of the spikes was different from the installation method
suggested by the manufacturer. From this, the jury could have determined that any problem
with the field was the result of the subcontractor using spikes instead of following the
manufacturer’s suggested method.
The second warranty involved whether Forever Green warranted its product to be
a shock-attenuation pad. There was conflicting testimony on this point. For example, Charlie
Dawson testified that he had discussions with Jerry Pufall of the University of Arkansas that
its product was a shock-attenuation pad, even though such a pad would not be needed on
an outdoor field. Dave Ripka said that the drainage blanket had “proven to be [a] shockattenuation pad.” He also said on cross-examination that the product was not designed to be
a shock attenuation pad as would a gym mat but that it would help to absorb shock. As to
any conflicting evidence presented in this case, it is up to the jury to resolve the conflicts in
the testimony and judge the weight and credibility of the evidence. Cadillac Cowboy, Inc. v.
Jackson, 347 Ark. 963, 69 S.W.3d 383 (2002). Accordingly, we affirm the trial court’s denial
of Lasiter Construction’s motion for judgment notwithstanding the verdict and, alternatively,
the denial of the motion for new trial, on the breach-of-warranty claims.
C. Jury Instruction
22
Cite as 2011 Ark. App. 347
Because we affirm the circuit court’s grant of a new trial on the contract claim, we
need not address Lasiter Construction’s third point where it argues that the circuit court
erred in submitting a statute-of-frauds instruction to the jury.
D. Findings of Fact on Remand
Finally, Lasiter Construction argues that, on remand, it is entitled to the benefit of
certain findings of fact that the jury made by answering special interrogatories in Lasiter
Construction’s favor.
At trial, the jury answered interrogatories in which it found that the contract was as
alleged by Lasiter Construction, that Forever Green breached that contract, and that the
agreement did not violate the Arkansas Contractor’s Licensing Law. For the retrial on its
breach-of-contract claims, Lasiter Construction asks that the parties be bound by the
determinations that the contract was as alleged by Lasiter Construction and that the contract
did not violate the Arkansas Contractor’s Licensing Law because the jury’s answers to the
special interrogatories constitute separate verdicts and, therefore, it is possible to have a retrial
only on the issue of whether the contract has been breached and the amount, if any, of its
damages. It cites two federal appellate decisions, Robertson Oil Co. v. Phillips Petroleum Co.,
930 F.2d 1342 (8th Cir. 1991) and Green v. American Tobacco Co., 325 F.2d 673 (5th Cir.
1963), in support of its argument. The cases are inapposite.
In Arkansas, the long-standing rule is that when a judgment is reversed or set aside by
the court that issued it, the rights of the parties are immediately restored to the same
condition in which they were before its rendition; and the judgment is said to be mere waste
23
Cite as 2011 Ark. App. 347
paper. Palmer v. Carden, 239 Ark. 336, 389 S.W.2d 428 (1965); Holt v. Gregory, 222 Ark. 610,
260 S.W.2d 459 (1953); Harrison v. Trader, 29 Ark. 85 (1874). Because the rights of the
parties are as if no trial had occurred, there are no jury interrogatories finding in Lasiter
Construction’s favor that would be binding in a second trial. Lasiter Construction’s request
attempts to relieve it of the burden of proving all of the elements of its cause of action for a
breach-of-contract claim. See AMI Civ. 2401 (setting forth that, in breach-of-contract case,
the plaintiff must prove, among other things, that the parties entered into a contract, that the
contract required the defendant to perform in a certain manner, and that the defendant did
not do as the contract required of him). This necessarily includes the terms of that contract
if those terms are, as here, disputed.
Affirmed on direct appeal; affirmed on cross-appeal.
VAUGHT, C.J., and HOOFMAN , J., agree.
24
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.