Dolphin v. Wilson

942 S.W.2d 815, 328 Ark. 1, 1997 Ark. LEXIS 199

• Court: Supreme Court of Arkansas
• Decided: April 7, 1997
• Docket: 96-631
• Status: Published

Opinions

W.H. “Dub” Arnold, Chief Justice.

The case concerns an alleged oral contract for the sale of land. The appellees, Jimmie L. Wilson and Henrietta J. Wilson, filed suit for specific performance against appellant Beatrice D. Dolphin. The chancellor ruled in favor of the Wilsons, and Mrs. Dolphin appeals, raising two issues. The first question presented is whether the chancellor, a former law partner of Mr. Wilson’s, should have recused from the case. The second issue is whether the complaint for specific performance was barred by the statute of frauds. Because we disagree with the chancellor’s conclusion that the proof of the alleged agreement was clear and convincing, we hold that the complaint was barred by the statute of frauds, and reverse and remand.

Mrs. Dolphin and her late husband owned approximately 22 acres of farm land in Phillips County. It was heavily encumbered by over $300,000.00 in liens. The great majority of the encumbrance was due to farm loans made by the Farmers Home Administration. Mrs. Dolphin left the Phillips County area in 1988 and had very little to do with the land thereafter.

On April 5, 1994, the FmHA obtained a judgment in the amount of about $271,000.00 as the result of an in rem foreclosure action filed in federal district court. The land was set to be sold at public auction when Mr. Wilson, an attorney, saw the auction notice in the newspaper and contacted Mrs. Dolphin in Ohio the week before the auction. At this point, Mrs. Dolphin and the Wilsons offer conflicting accounts of what happened. According to Mr. Wilson, Mrs. Dolphin agreed that, if he could purchase the land in her name for its appraised value, approximately $13,000.00, and if he could clear up all outstanding indebtedness, she would deed the land to him. However, when it came time to sign the deed, Mrs. Dolphin refused. Mrs. Dolphin denies the existence of an agreement.

i. Recusal

We first consider the question of whether the chancellor should have recused from the case. After the Wilsons filed their complaint for specific performance, Mrs. Dolphin filed a motion asking Chancellor Kathleen Bell to recuse. The basis of the motion was that Mr. Wilson was Judge Bell’s law partner from 1981 to 1989. The motion also stated that Judge Bell’s name remained listed in the yellow pages of the Helena-West Helena telephone directory as an attorney in private practice with the same address and phone number as Usted for Mr. Wilson.

On appeal, Mrs. Dolphin argues that the chancellor’s failure to recuse violates Canon 1, Canon 2(a), and Canon 3(e) of the Arkansas Code of Judicial Conduct. Canon 1 is general in nature, requiring a judge to uphold the integrity and independence of the judiciary. Canon 2(a) requires a judge to avoid impropriety and the appearance of impropriety. Canon 3(e) requires a judge to disqualify herself in a proceeding in which her impartiality might reasonably be questioned, including where the judge has a personal bias or prejudice concerning a party or a party’s lawyer.

Judges must refrain from presiding over cases in which they might be interested and must avoid all appearance of bias. Reel v. State, 318 Ark. 565, 886 S.W.2d 615 (1994). However, we will not reverse a judgment on the basis of a trial judge’s decision not to disqualify unless the judge has abused her discretion. Id. To decide whether there was an abuse of discretion, we review the record to determine if any prejudice or bias was exhibited. Id. The question of bias is usually confined to the conscience of the judge. Noland v. Noland, 326 Ark. 617, 932 S.W.2d 341 (1996). Judges are presumed to be impartial, and the party seeking disqualification has the burden of showing otherwise. Turner v. State, 325 Ark. 237, 926 S.W.2d 843 (1996).

Mrs. Dolphin did not mention Canon 1 at the trial level, so we will not address this portion of her argument for the first time on appeal. Douthitt v. Douthitt, 326 Ark. 372, 930 S.W.2d 371 (1996). Canons 2(a) and 3(e), also relied on by Mrs. Dolphin, do not address the situation in which a judge is a former law partner of an attorney who is before the judge. We are aware, however, of one federal district court case from Arkansas holding that a judge is not required to disqualify if a former law partner is counsel in the proceeding. Katz v. Looney, 733 F.Supp. 1284 (W.D. Ark. 1990). Cases from other jurisdictions have held likewise. Singer v. Wadman, 745 F.2d 606 (10th Cir. 1984), cert denied, 470 U.S. 1028 (1985); Certain Underwriters at Lloyds, London v. Oryx Energy Co., 944 F. Supp. 566 (S.D. Tex. 1996); Miller Industries, Inc., v Caterpillar Tractor Co., 516 F.Supp. 84 (S.D. Ala. 1980), affirmed, 733 F.2d 813 (11th Cir. 1984); Bonelli v. Bonelli, 570 A.2d 189 (Conn. 1990); Hall v. Hall, 247 S.E.2d 754 (Ga. 1978).

It does concern us that, in this case, Mr. Wilson is not appearing as an attorney, but as the party seeking specific performance of an alleged oral contract. However, no hearing was held on the issue of recusal, and none was requested. The decision on the part of a judge not to recuse is affirmed when there is no abuse of discretion. Reel v. State, supra. Mrs. Dolphin did nothing more on this issue than file a motion making the assertions described above, and the chancellor denied the motion without comment, so we have little information in the record. Because Mrs. Dolphin has not met her burden of proving that Judge Bell was biased, we must conclude that the chancellor did not abuse her discretion in faffing to recuse from the case. We add, however, that the recusal issue was not well developed in this case. We do not foreclose the possibility that the outcome might be different in another case with a better-developed record.

2. Specific performance of an oral contract to sell land

We next consider whether the Wilsons’ complaint for specific performance was barred by the statute of frauds. In a letter opinion, the chancellor ruled in favor of the Wilsons and granted the petition for specific performance. The chancellor found that, by clear and convincing proof, the terms of the oral contract had been proven. She also required the Wilsons to reimburse Mrs. Dolphin for the 1994 taxes she paid on the land.

Contracts for the sale of lands must be in writing to be enforceable. Ark. Code Ann. § 4-59-101 (a)(4) (Repl. 1996). There is no allegation in this case that a written agreement exists. Instead, Mr. Wilson claims that his payment for the land and his assumption of possession took the contract out of the operation of the statute of frauds. However, to take an oral contract out of the statute of frauds, both the making of the oral contract and its performance must be proven by clear and convincing evidence. French v Castleberry, 238 Ark. 1038, 386 S.W.2d 482 (1965); Pfeifer v Raper, 253 Ark. 438, 486 S.W.2d 524 (1972).

The trial in this case primarily consisted of the competing testimonies of Mr. Wilson and Mrs. Dolphin. According to Mr. Wilson, Mrs. Dolphin told him that she owed so much money on the property that she could not do anything about the public sale. It was Mr. Wilson’s testimony that Mrs. Dolphin agreed that, if he could get the indebtedness satisfied and could pay for the land to keep it from being sold at auction, she would deed the land to him. According to Mrs. Dolphin, she told Mr. Wilson that he could “look into” the sale of the property. However, she testified that she specifically told him that he could not purchase the land in her name. She denied the existence of any agreement to deed the property to the Wilsons.

The only written evidence of communications between the parties is a facsimile that was sent from Mrs. Dolphin to Mr. Wilson on May 18, 1994. Mr. Wilson had told Mrs. Dolphin that he needed her authorization to obtain information from the FmHA about the indebtedness on the property. The one-page fax that Mrs. Dolphin sent read, according to her, as follows:

This is to certify that I, Beatrice Dolphin, authorize Jimmie L. Wilson, to obtain information relating to the sale of my property located at Lakeview (Phillips County Arkansas).

Past due monetary amounts are not to be dispensed with.

s/Beatrice Dolphin NOTARIZED

The record reflects that this exhibit is an original with a raised notary seal. Mr. Wilson denies that the sentence relating to past-due monetary amounts was included.

After receiving the fax, Mr. Wilson sent a letter to the FmHA on his law firm’s letterhead, in which he stated that Ms. Dolphin had contacted his office and had asked that he determine the appraised value of the property. The letter referenced the in rem action in federal district court, and stated that Mr. Wilson’s representation in the matter was limited to tendering the settlement to FmHA. However, at trial, Mr. Wilson testified that he did not represent Mrs. Dolphin as an attorney. Attached to Mr. Wilson’s letter to the FmHA was a copy of Mrs. Dolphin’s May 18, 1994, fax; however, this authorization did not contain the sentence, “[p]ast due monetary amounts are not to be dispensed with.”

On May 24, 1994, one day before the auction, Mr. and Mrs. Wilson sent checks to the FmHA in the amount of $13,200.00 for the property, and $1,239.40 for costs. These payments stopped the public sale of the property, and resulted in a satisfaction of judgment being entered on the FmHA’s foreclosure action in federal court. The Wilsons then began work on trying to reduce the $300,000.00 indebtedness on the property. Unbeknownst to them, Mrs. Dolphin was working on her own, during this same period, to get her debt forgiven. She filed a formal application for settlement on August 16, 1994, and the FmHA issued a satisfaction on August 17, 1994. On August 18, 1994, the FmHA county supervisor recommended that Mrs. Dolphin’s debt be can-celled. The FmHA approved the cancellation of the debt on May 2, 1995.

Once the debt was satisfied, Mr. Wilson sent a warranty deed to Mrs. Dolphin so she could sign the property over to him. He also began to work on the land. He tried to clean up the property, and drained the back part of the land. He hired the city to mow the property a few times. He had someone disc the land, and he allowed others to plant a crop on part of the parcel. Sometime thereafter, he received notice from Mrs. Dolphin’s attorney that she would not sign the warranty deed.

The factors that point to the making of the contract and its performance include the following. The Wilsons paid the appraised value of the land, and worked to remove the indebtedness from the land. After the debt was satisfied, the Wilsons performed maintenance on the land and allowed a crop to be planted on a part of it. Finally, the Wilsons prepared a warranty deed for Mrs. Dolphin to sign.

The cases of French v. Castleberry, supra, and Pfeifer v. Raper, supra, are instructive. Both involved tenants who claimed that their landlord had orally agreed to sell them the land which was the subject of their tenancy. In each case, the tenants claimed to have made improvements on the land in reliance on the oral contract. We observed in both cases that the improvements were of the type that might ordinarily be made by tenants. French, 238 Ark. at 1040; Pfeifer, 253 Ark. at 440. We also noted that, to satisfy the statute of frauds, the improvements must be so valuable and substantial that it would be inequitable to refuse specific performance. Id.; Blanton v. First Nat’l Bank of Forrest City, 136 Ark. 441, 206 S.W. 745 (1918).

The improvements (mowing, discing to keep down the weeds, and bulldozing debris from a burned building into a pile) by the Wilsons in this case essentially amounted to maintenance. They are the type of maintenance an agent will do for an absentee landowner and hence are consistent with Mr. Wilson’s representation to the FmHA that he was acting as Mrs. Dolphin’s agent. For that matter, Mr. Wilson testified that he had known Mrs. Dolphin all of his life, and this type of maintenance could easily be done by a long-time friend of an absentee landowner. These acts are not “unequivocally referable to the agreement”; they are not “unintelligible or extraordinary unless as an incident of ownership.” 1 E. Allen Farnsworth, Farnsworth on Contracts § 6.9, at p. 442, & n. 11 (1990), quoting Burns v. McCormick, 135 N.E.373 (N.Y. 1922). Thus, the only evidence of an agreement in this case is the Wilsons’ payment for the land, in Dolphin’s name, and the maintenance of the property. When examining this evidence, we must conclude that it “lacks the clarity and cogency that the law demands.” French, 238 Ark. at 1039. When looking at the countervailing evidence on behalf of Mrs. Dolphin, the written evidence that she offered reflects that she only authorized Mr. Wilson to obtain information relating to the sale of her property. She also continued her own efforts to cancel the indebtedness on the land, and paid taxes on the lánd in 1994. When considering all the evidence, we conclude that the chancellor clearly erred in finding that there was clear and convincing evidence that an agreement existed between the parties. Under these circumstances, we hold that the Wilsons’ complaint was barred by the statute of frauds, and reverse and remand for entry of an order consistent with this opinion.

Reversed and remanded.

Newbern, Glaze, and Corbin, JJ., not participating. Special Justices William Lee Fergus, Leon FIolmes, and John C. Lessel, join in this opinion. Thornton, J., dissents.