Cooper v. Bryant

APPEAL FROM THE BENTON COUNTY CIRCUIT COURT [NO. 04PR-16-891] HONORABLE XOLLIE DUNCAN, JUDGE

L. David Stubbs; and Taylor & Taylor Law Firm, P.A., by: Andrew M. Taylor and Tasha C. Taylor, for appellants.

Cochran Law Firm, by: Tamra Cochran, for separate appellee Horace Bryant.

LARRY D. VAUGHT, JUDGE

This is a dispute over a trust prepared by the decedent, Dolores S. Bryant. Appellee Horace Bryant, the decedent's surviving spouse and stepfather to the appellants Shelley Cooper and Annette Edelen and separate appellee Nancy Edelen, the decedent's daughters, filed suit to reform the trust, alleging that conflicting trust provisions could operate to prejudice his right to occupy the residential real estate for his lifetime. The circuit court removed appellants as trustees of the trust, granted Horace a life estate, and awarded attorney's fees to the appellees. This appeal challenges those rulings. However, we do not reach the merits of the appeal because Horace has filed a motion to dismiss the appeal, arguing that appellants failed to file a timely notice of appeal. Shelley and Annette have filed

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their own motions contending that any dismissal should be without prejudice because the order appealed from lacks finality. We conclude that the order appealed from lacks finality. We therefore dismiss the appeal without prejudice.

This is a dispute over a trust created by Dolores. Among the trust assets was a twenty-acre tract of real property with a residence where Dolores and her husband, Horace, resided. Upon Dolores's death, Horace was to be allowed to reside on the property until his death or remarriage. All net income from the trust was to be distributed to Horace. Upon Horace's death, the residence and surrounding acreage were to be distributed in equal shares to appellants Shelley and Annette and separate appellee Nancy, Dolores's daughters. Shelley, Nancy, and Annette were designated to serve as successor co-trustees after their mother's death to act collectively and jointly in such capacity by majority vote. The trust also contained an in terrorem clause whereby the interests of any person who "contests" or "in any other manner, attacks or seeks to impair or invalidate" any term of the trust shall be forfeited. A dispute-resolution clause was included among the trust's provisions. This clause set forth a procedure for the appointment of a special trustee to resolve disputes over the trust without resorting to litigation. Shelley and Annette contended below that failure to comply with the dispute-resolution provision also triggers the no-contest clause.

Dolores Bryant died on July 14, 2013. The parties agree that no action to administer the trust was taken for several years after Dolores's death.

When Horace learned that Shelley and Annette had proposed to distribute the home property and residence from the trust to themselves without making provision for his rights

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and interest, he filed suit against Shelley, Annette, and Nancy, individually and as co-trustees, seeking to reform the trust, alleging that conflicting trust provisions could operate to prejudice his right to occupy the residential real estate for his lifetime. After filing several motions to dismiss Horace's petition that were denied, appellants filed a counterclaim against Horace and a cross-claim against Nancy, contending that the interests of Horace and Nancy in the trust were forfeited under the trust's no-contest provision.

After granting Horace's motion for partial summary judgment on the reformation issue and following a bench trial, on December 10, 2018, the circuit court entered a document titled "Findings of Fact and Conclusions of Law," determining the merits of the remaining issues. The court, among other things, removed appellants as co-trustees of the trust and granted Horace a life estate in the residential property. The court also directed Nancy, as the sole trustee, to distribute the accumulated trust income to Horace. The court later awarded attorney's fees to the appellees in February 2019. Appellants filed their notice of appeal from both the "Findings of Fact and Conclusions of Law" and the orders on attorney's fees on February 25, 2019.

After the appeal was perfected, Horace filed a motion to dismiss the appeal, and the appellants filed a motion to remand for entry of a final order or, in the alternative, a motion to dismiss the appeal without prejudice. Horace argued that the appeal should be dismissed with prejudice because appellants failed to file a timely notice of appeal from what Horace contends was a final, appealable order. Appellants argue that the appeal is taken from a nonfinal order and should be dismissed without prejudice.

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The starting point is the parties' disagreement over whether the circuit court's December 10, 2018 Findings of Fact and Conclusions of Law constitutes an appealable order. This analysis requires us to ask two questions: was the document an order, and if so, was it appealable? Regarding the first question, we look to the substance of the document to determine its nature.

Decision of this appeal, then, depends entirely upon the determination of the character of the first court action Formal requirements for a judgment in Arkansas are few. It is the final determination of the right of parties in an action . . . A judgment must specify clearly the relief granted or other determination of the action. The few basic requirements must be met and the judgment must clearly show that it is the act of the law, pronounced and declared by the court upon determination and inquiry. While a rather technical application was made of this rule in the cited case, strict formality in language used to express the adjudication of the court is not necessary and a "judgment" will be tested by its substance, not its form. The name by which it is called by the court is not controlling. We have held that the designation or title given a pleading is not controlling but that its effect, character and sufficiency are to be determined by its substance regardless of what it is called. There is no reason we should not apply the same rule to a court order.

Thomas v. McElroy, 243 Ark. 465, 468, 420 S.W.2d 530, 532 (1967) (internal citations omitted). Despite the fact that Thomas predates the Arkansas Rules of Civil Procedure, it has been consistently cited since the Rules' adoption for its holding as to what constitutes a judgment. See David Newbern, John Watkins & D.P. Marshall Jr., Arkansas Civil Practice & Procedure § 31-1 at 651-52 (5th ed. 2010). Our rules of civil procedure do not, in any event, set out a list of formal requirements for a judgment other than to provide a definition of "judgment" that includes "a decree and any order from which an appeal lies," Ark. R. Civ. P. 54(a), and a requirement that a judgment be set forth "on a separate document." Ark. R. Civ. P. 58; see also White v. Mattingly, 89 Ark.App. 55, 199 S.W.3d 724 (2004).

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Applying the Thomas test of substance to the December 10, 2018 Findings of Fact and Conclusions of Law in this case, we conclude that the circuit court entered an order instead of mere findings and conclusions. Supporting this conclusion is the circuit court's internal reference to its decision as an "Order," stating that Nancy should distribute all trust income accrued "up to the date of the entry of this Order" to Horace. The court also dismissed appellants' counterclaim against Horace and concluded the decision with the words "IT IS SO ORDERED" just above the judge's signature.

Appellants argue that the Findings of Fact and Conclusions of Law, even if deemed an order, lacks finality because it fails to address, among other things, Horace's claim for an inventory and accounting; Nancy's cross-claim against appellants for indemnity and possible forfeiture of appellants' interest in the estate; and Horace's request to hold appellants in contempt for failing to distribute the accumulated funds. They argue that because the Findings of Fact and Conclusions of Law lacked finality, it was never appealable, requiring us to dismiss the case without prejudice due to lack of jurisdiction.

Appellees, on the other hand, urge us to follow Sloan v. Arkansas Rural Medical Practice Loan & Scholarship Board, 369 Ark. 442, 445, 255 S.W.3d 834, 837 (2007), in which the Arkansas Supreme Court held that appellate courts must first consider the jurisdictional issue related to the timeliness of the notice of appeal before proceeding to an analysis of any finality issues. "It is well established that this court is without authority to overrule a decision of the supreme court." Box v. State, 348 Ark. 116, 71 S.W.3d 552 (2002) (quoting Brown v.

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State, 63 Ark.App. 38, 44, 972 S.W.2d 956 (1998)). The question, then, is whether Sloan is applicable to the case at bar.

We hold that it is not. Sloan does not apply here because we cannot hold litigants to a "timeliness" requirement if they are never put on notice that the time has begun to run. In Sloan, the finality issue was related to Rule 54(b) and that rule's requirements for certifying an otherwise nonfinal order for appeal. It made sense in Sloan for the Arkansas Supreme Court to decline to reach the merits of whether the Rule 54(b) certificate in that case was sufficient to establish appellate jurisdiction because it had already determined that the notice of appeal from the order containing the Rule 54(b) certificate was obviously untimely. The finality...