Rovnaghi v. Ronaghi

2022 Ark. App. 203

646 S.W.3d 163

Irag ROVNAGHI, Appellant

v.Turag RONAGHI d/b/a Ronaghi International Rug Gallery, Appellee

No. CV-21-259

Court of Appeals of Arkansas, DIVISION IV.

Opinion Delivered May 11, 2022

Green & Gillespie, by: Chad M. Green, Little Rock, for appellant.

Rose Law Firm, a Professional Association, by: Peter Kumpe and David S. Mitchell, Jr., Little Rock, for appellee.

BRANDON J. HARRISON, Chief Judge

Irag Rovnaghi appeals the judgment entered against him that ordered him to pay $362,000 to Turag Ronaghi (d/b/a Ronaghi International Rug Gallery).¹ Rovnaghi argues that the circuit court erred in denying his motions for directed verdict and judgment notwithstanding the verdict (JNOV) based on the statute of frauds. We affirm.

In January 2017, Ronaghi filed suit against Rovnaghi and his wife, Pegah Deheshmand.² The complaint explained that in August 2007, smoke from a nearby fire damaged a large number of Persian rugs in Rovnaghi's possession. Rovnaghi retained Ronaghi's services to clean and preserve the rugs. The total bill for those services was $1,663,347.73. The complaint alleged that Rovnaghi had made a $50,000 payment toward the balance owed in February 2014, but no further payments had been received. The complaint also explained that Rovnaghi had provided storage services for 140 rugs owned by Ronaghi; that Rovnaghi returned ninety-one rugs; and that he refused to return the remaining forty-six rugs, which constituted a conversion of the rugs, valued at approximately $365,696.

Rovnaghi answered and claimed that Ronaghi had volunteered to clean the rugs and that he was paid $50,000 for providing a conversion of the measurements of the rugs from metric to square feet/square yards and relabeling the rugs. The answer also explained that Rovnaghi gave Ronaghi ninety-one rugs "in full payment of all claims of [Ronaghi] in regard to [Ronaghi's] rendering of services in respect to said rugs and the fire loss described in [Ronaghi's] complaint." Rovnaghi also counterclaimed that Ronaghi was in possession of rugs that belonged to him. Ronaghi filed an amended complaint that reasserted the contract-damages claim and also asserted claims for misappropriation, deceit, and fraud.

The case was eventually tried in front of a jury. During the trial, Rovnaghi moved for a directed verdict; on the breach-of-contract claim, he argued that "all the evidence presented, even viewed in the light most favorable to the plaintiff, establishes that this claim is barred by the statute of frauds. The contract that cannot be performed within one year is unenforceable unless it is in writing and signed by the person to be bound." The circuit court, noting that a partial payment had been made with respect to the contract, agreed that the cleaning and restoration was going to take multiple years but denied the motion under the statute of frauds. The motion was renewed and denied at the close of the case.

In August 2019, the circuit court issued a final judgment based on the jury's findings on a series of interrogatories. The judgment stated, in pertinent part, as follows:

Breach of Contract:

First , the jury found that Turag Ronaghi and Irag Rovnaghi entered into a contract for Turag to clean approximately 2,400–2,500 rugs that were damaged by smoke from a fire that occurred near Defendant's house.

Second , the jury found that Turag Ronaghi cleaned and preserved the approximately 2,400–2,500 rugs as required by the contract.

Third , the jury found that lrag Rovnaghi failed to make payment in full to Turag Ronaghi for his work in cleaning and preserving the approximately 2,400–2,500 rugs.

Fourth , the jury found that Irag Rovnaghi owes Turag Ronaghi $362,000 for cleaning and preserving the approximately 2,400–2,500 rugs.

Conversion:

Fifth , the jury found the fair market value of the 49 rugs to be $173,000.

Sixth , the jury found that the Defendants, Irag Rovnaghi and Pegah Deheshmand, owned the 49 rugs prior to July 25, 2007.

Seventh , the jury found that Irag Rovnaghi and Pegah Deheshmand owned or were entitled to possess rugs in Turag Ronaghi's possession.

Eighth , the jury found that Turag Ronaghi did not exercise dominion or control over the rugs in violation of Irag Rovnaghi's and Pegah Deheshmand's rights.

Finally , the jury found that Irag Rovnaghi and Pegah Deheshmand did not sustain any damages as a result of Turag Ronaghi's conversion of their property.

Rovnaghi was ordered to pay Ronaghi $362,000 for the cleaning and restoration of the rugs. The claims for conversion asserted by both parties were dismissed with prejudice.

Rovnaghi filed a motion for JNOV on 3 September 2019, again arguing that the work could not be completed within one year and that there was no signed contract, so the agreement was in violation of the statute of frauds and not enforceable. He asserted that the partial payment did not constitute partial performance such as to take the agreement out of the statute of frauds. Ronaghi responded that his full performance of his obligation to clean the rugs removed the contract from the statute of frauds. The JNOV motion was not ruled on within thirty days, so it was deemed denied as of 3 October 2019. Rovnaghi filed a timely notice of appeal on November 4.

This court submitted the case in October 2020; however, we dismissed the appeal without prejudice because the judgment entered below was not final. Rovnaghi v. Ronaghi , 2020 Ark. App. 509, 2020 WL 6479359. Specifically, we held that the court's August 19 judgment was not final because "it did not address Turag's contract claim against Pegah, and it did not address the fraud claim that Turag's amended complaint alleged against Irag and Pegah." Id. at 3.

On 22 February 2021, the circuit court entered an amended judgment in which it (1) dismissed with prejudice Ronaghi's claim for breach of contract against Pegah Deheshmand and (2) dismissed with prejudice Ronaghi's claims for fraud and/or deceit against both Rovnaghi and Deheshmand. Rovnaghi again filed a timely notice of appeal.

Typically, the appellate court reviews the circuit court's denial of a motion for directed verdict and the denial of a motion for judgment notwithstanding the verdict to determine whether there is substantial evidence to support the jury's verdict. Miller Brewing Co. v. Ed Roleson, Jr., Inc. , 365 Ark. 38, 223 S.W.3d 806 (2006). However, whether the parties’ agreement was barred by the statute of frauds is a question of law, which we review de novo. Hodges v. John F. Jenkins Contracting, Inc. , 98 Ark. App. 125, 252 S.W.3d 152 (2007).

The statute of frauds, in relevant part, requires a contract to be in writing if the contract or promise is incapable of performance within a year. See Ark. Code Ann § 4-59-101(a)(6) (Supp. 2021). Rovnaghi argues that there was no possible way the agreement to clean the rugs could be performed within one year, and the circuit court found as such; therefore, the statute of frauds applies. And because there was no signed contract, the statute...