Hurt-Hoover Invs., LLC v. Fulmer

2014 Ark. 461

448 S.W.3d 696

HURT–HOOVER INVESTMENTS, LLC, Appellant

v.Lester FULMER, Rob Bentley, Robert Best, and Carl Chilson, Appellees.

No. CV–14–311.

Supreme Court of Arkansas.

Nov. 6, 2014.

Waddell, Cole & Jones, P.A., Jonesboro, by: Shane Baker and Justin E. Parkey, for appellant.

Richard Mays Law Firm, PLLC, Heber Springs, by: Richard H. Mays, for appellees.

Opinion

COURTNEY HUDSON GOODSON, Justice.

Appellant Hurt–Hoover Investments, LLC (Hurt–Hoover), appeals the judgment entered by the Cleburne County Circuit Court after a jury returned its verdict in favor of appellees Lester Fulmer, Rob Bentley, Robert Best, and Carl Chilson. For reversal, Hurt–Hoover contends that the circuit court erred in ruling that venue for this civil action concerning a debt and note was proper in Cleburne County and that the court erred by denying its motion for withdrawal of counsel and its concomitant request for a continuance. Our jurisdiction is pursuant to Arkansas Supreme Court Rule l–2(e), as we granted appellant's petition to review the decision of the Arkansas Court of Appeals affirming the judgment. See Hurt–Hoover Invs., LLC v. Fulmer, 2014 Ark. App. 197, 433 S.W.3d 917. We also find no reversible error and affirm.

Factual Background

The record discloses that the parties entered into a contract for Hurt–Hoover to purchase appellees' interests in H20 Lifts and Ramps, LLC. Pursuant to their agreement, dated June 19, 2008, Hurt–Hoover agreed to pay the total sum of $955,000 for the business, which included an initial cash payment of $400,000 that was remitted at the time of closing. Hurt–Hoover executed individual promissory notes to each appellee, according to their respective interests, for payment of the balance in thirty-six monthly installments, commencing on October 1, 2008.

On May 28, 2009, appellees filed suit against Hurt–Hoover in Cleburne County Circuit Court, alleging that Hurt–Hoover had wholly failed to pay the installments due under the promissory notes. In their complaint, appellees alleged that venue was proper in Cleburne County, where they all resided, pursuant to Arkansas Code Annotated section 16–55–213 (Supp.2013). In its answer, Hurt–Hoover denied that venue was proper in Cleburne County, and it moved to dismiss, asserting that venue lay in Craighead County, where it had its principal place of business, under Arkansas Code Annotated section 16–60–111 (Supp.2013). Hurt–Hoover also pled the affirmative defense of set-off, alleging that the terms of the parties' agreement allowed it to take credit for damages it incurred as a result of appellees' alleged misrepresentations and breach of warranties made in connection with the purchase agreement.

The circuit court held a hearing on the issue of venue on November 16, 2010. At the hearing, Hurt–Hoover asserted that section 16–60–111(a) was controlling, as it specifically applied to actions on a “debt, account, or note,” and that the statute established venue where the defendant resided, which was in Craighead County, its principal place of business. Appellees maintained that section 16–55–213(a)(3)(A) provides that venue can be fixed in the county in which the plaintiff resided and that this statute provides that it applies to “all civil actions” with certain enumerated exceptions that do not include section 16–60–111. Appellees contended that section 16–55–213, as the more recently enacted statute, repealed section 16–60–111(a) by implication because the two were in irreconcilable conflict. The circuit court took the question under advisement and issued an order denying Hurt–Hoover's motion to dismiss on April 23, 2010. In the order, the circuit court found that the two venue statutes were invincibly repugnant and that section 16–55–213 impliedly repealed section 16–60–111. Accordingly, the court concluded that venue was proper in Cleburne County as the county where appellees resided.

On May 17, 2011, appellees filed a motion for summary judgment, arguing that there were no material facts in dispute that Hurt–Hoover had defaulted on its obligations under the promissory notes. They also contended that the indemnity provisions of the agreement, relied on by Hurt–Hoover to support its claim of set off, applied only to damages that Hurt–Hoover might incur from a third party but not for any claims Hurt–Hoover may have against them. Thus, they argued that they were entitled to judgment as a matter of law. In response, Hurt–Hoover maintained that the agreement endowed it with the right to set off damages it incurred as a result of appellees' alleged misrepresentations and breaches of warranty and that the agreement also stated that the exercise of its right to set-off was not an event of default. Hurt–Hoover also filed a counterclaim alleging breach of contract and the claim for set-off.

The circuit court held a hearing on the summary-judgment motion on November 2, 2011. The court entered an order denying the motion on June 1, 2012.¹ In relevant part, the court's order provided,

2. Plaintiffs contend that defendant has defaulted on certain promissory notes.

3. Defendant contends that it is allowed to take certain set-offs pursuant to paragraph 6.01 of the Interests Purchase and Sale Agreement entered into between the parties on June 19, 2008 (the “Agreement”).

4. Plaintiffs reason that because there have been no claims for indemnification made by an third party, then defendant is not entitled to take any set-offs.

5. Plaintiffs would be correct if the issues in the case involved a simple indemnification agreement. However, the Court finds that because of the language in paragraph 6.01(a) of the Agreement, there is a fact question as to what plaintiffs promised to indemnify against.

6. Paragraph 6.01(a) of the Agreement could be interpreted as providing indemnification to the defendant for damages and losses resulting from any “misrepresentation, breach of warranty, or failure to perform any covenant or agreement undertaken by seller in this agreement.”

7. The Court finds that there is a fact question as to whether or not plaintiffs agreed to indemnify defendant and hold defendant harmless for damages from any misrepresentation, breach of warranty, or failure to perform under the terms and conditions of the Agreement. This issue is to be determined by a trier of fact. Consequently, plaintiffs' Motion for Summary Judgment is denied.

Thereafter, the circuit court scheduled the trial for July 19, 2012. On June 19, 2012, Hurt–Hoover filed a motion for the withdrawal of counsel, asserting that it was necessary for the law firm of Barrett & Deacon, P.A., to be relieved as counsel so that one of its members, Robert S. Jones, who had drafted the parties' agreement, could testify as to the parties' intentions in light of the circuit court's ruling that the indemnity provisions were ambiguous. Two days later, Hurt–Hoover also moved for a continuance in order to give it an opportunity to retain substitute counsel, should the circuit court grant its motion for counsel to withdraw. Appellees objected to a continuance and argued that the testimony of counsel was not admissible. The circuit court, via email communication, denied both motions, ruling that Jones's testimony was barred by the parol-evidence rule and that, therefore, a continuance was not required. At trial, the circuit court permitted Hurt–Hoover to make a proffer of Jones's proposed testimony.

After considering the evidence, the jury returned its verdict in favor of appellees on their complaint and against Hurt–Hoover on its counterclaim. Accordingly, the circuit court entered judgment in favor of appellee Fulmer in the amount of $294,705; appellee Bentley in the amount of $229,215; appellee Best in the amount of $65,490; and appellee Chilson in the amount of $65,490. This timely appeal followed.

Hurt–Hoover presents, essentially, two issues on appeal. First, it contends that the circuit court erred in denying its motion to dismiss on the question of venue by ruling that section 16–55–213 repealed section 16–60–111 by implication. Second, Hurt–Hoover argues that the parol-evidence rule did not bar Jones's testimony and that the circuit court erred by denying its motion for a continuance to obtain substitute counsel. Neither argument warrants reversal.

Repeal by Implication

As its first argument on appeal, Hurt–Hoover argues that the two venue statutes are not in conflict and that the circuit court erred in ruling that venue was proper in Cleburne County based on its ruling of repeal by implication. Further, it contends that, because section 16–55–213 did not repeal section 16–60–111, section 16–60–111 should apply as the more specific venue statute over the general venue statute found in section 16–55–213.

This court has outlined its statutory construction rules regarding repeal by implication on numerous occasions. See Doe v. Baum, 348 Ark. 259, 72 S.W.3d 476 (2002). The fundamental rule of the doctrine is that a repeal by implication is not favored and is never allowed except when there is such an invincible repugnancy between the two provisions that both cannot stand. Brock v. Townsell, 2009 Ark. 224, 309 S.W.3d 179. A statute of a general nature does not repeal a more specific statute unless there is a plain, irreconcilable conflict between the two. Moreover, we will not find a repeal by implication if there is any way to interpret the statutes harmoniously. Neeve v. City of Caddo Valley, 351 Ark. 235, 91 S.W.3d 71 (2002). Thus, repeal by implication is recognized in only two situations: (1) where the statutes are in irreconcilable conflict, and (2) where the General Assembly takes up the whole subject anew, covering the entire subject matter of the earlier statute and adding provisions clearly showing that it was intended as a substitute for the former provision. Lambert v. LQ Mgmt., LLC, 2013 Ark. 114, 2013 Ark. App. 114, 426 S.W.3d 437.

It is well established that the General Assembly is vested with the power to...