Maly Farms, Inc., and Maly Lodging, LLC v. Reynolds Excavating, Inc.

2024 Ark. App. 270

• Court: Court of Appeals of Arkansas
• Decided: April 24, 2024
• Status: Published

Opinion

Cite as 2024 Ark. App. 270 ARKANSAS COURT OF APPEALS DIVISION I No. CV-22-608

MALY FARMS, INC., AND MALY Opinion Delivered April 24, 2024

LODGING, LLC APPEAL FROM THE FAULKNER APPELLANTS COUNTY CIRCUIT COURT [NO. 23CV-22-674] V. HONORABLE SUSAN WEAVER, REYNOLDS EXCAVATING, INC. JUDGE APPELLEE DISMISSED

ROBERT J. GLADWIN, Judge

This appeal arises from an order of the Faulkner County Circuit Court denying the

petition filed by appellants, Maly Farms, Inc., and Maly Lodging, LLC (collectively referred

to herein as “appellants”), to discharge the materialmen’s and mechanic’s lien held by

appellee, Reynolds Excavating, Inc., for labor and materials supplied on the property in

question. Appellants contend that the circuit court erred in finding the lien valid because

appellees failed to strictly comply with the lien statutes. We dismiss the appeal without

prejudice for lack of a final order.

I. Background Facts

Appellant Maly Farms, Inc. (“Maly Farms”), contracted with appellee Reynolds

Excavating, Inc. (“Reynolds”), to perform services on a commercial construction project.

After commencement of construction, Maly Farms sold the property to Maly Lodging, LLC (“Maly Lodging”). Reynolds performed the work on the project and, due to nonpayment,

filed a materialmen’s and mechanic’s lien for $671,431.84 plus interest, attorney’s fees, and

costs, on the property where the work was performed.

Reynolds served the required seventy-five-day notice and ten-day notice on appellants,

pursuant to Arkansas Code Annotated sections 18-44-114 (Repl. 2018) and 18-44-115 (Supp.

2023), prior to filing its lien. Subsequently, Reynolds filed a verified statement of account

and claim of materialmen’s and mechanic’s lien. The document included a description of

the work; the parties; the amount due; an itemization of the amount due and labor and

materials supplied; a legal description of the improved land; an affirmation that the proper

statutory notices were given; copies of the notices; affidavits of service; a copy of the contract

between the parties; and the attorney’s authority to release the lien. The lien was verified

and signed by Reynolds’s president, Aaron Reynolds, and was notarized and acknowledged.

On June 2, 2022, appellants filed a complaint to declare Reynolds’s lien invalid as

well as causes of action for slander of title, declaratory judgment, and claims for injunctive

relief, damages, special damages, punitive damages, treble damages, attorney’s fees, and costs.

Specifically, appellants maintain that Reynolds’s ten-day notice did not contain the necessary

information as required by Arkansas Code Annotated section 18-44-115(b)(6); thus, the lien

is invalid. In response, Reynolds filed its objection to discharge of lien as well as a

counterclaim against Maly Farms for judgment on the unpaid balance of the contract.

Appellants requested a prompt hearing pursuant to Arkansas Code Annotated

section 18-44-118(f)(4)(A) (Repl. 2018), which took place on June 20. At the conclusion of

2 the hearing, the circuit court held that Reynolds’s lien was valid. On June 22, the circuit

court entered its order denying discharge of the materialmen’s lien. The court held as

follows:

The court finds that the Statement of Account filed with the Clerk of Faulkner County as Instrument MM202200044 was filed in the form required by A.C.A. § 18- 44-117 and that all of the applicable requirements of A.C.A. § 18-44-114 and § 18- 44-115 were satisfied. In this case the specifically applicable statute was A.C.A. § 18- 44-114 in that the Ten Day Notice was given in a form that satisfied the statute’s requirements and the notice was given to an officer of the company.

Furthermore, the court held that it “retains jurisdiction of this matter and the remaining

issues between the parties.”

On June 29, appellants filed a notice of interlocutory appeal and, on the same day,

filed a motion to reconsider order and declare lien invalid. The circuit court did not issue a

ruling on appellants’ motion to reconsider; thus, it was deemed denied. Appellants’ notice

of appeal alleged—pursuant to Rule 2(a)(1) of the Arkansas Rules of Appellate Procedure–

Civil (2023)—that the June 22 order is a final order on the issue of lien validation.

Furthermore, appellants state that “a motion for a 54b certificate will [be] filed

contemporaneously requesting the circuit court to enter a certification of final judgment of

only the lien validation order issued on June 22, 2022.” Finally, appellants abandoned “all

pending but unresolved claims at the trial level” adding “although there are none.” This

appeal followed.

II. Points on Appeal

3 Appellants argue (1) that the circuit court erred by not following Arkansas Code

Annotated section 18-44-118(f), which requires strict compliance with Arkansas Code

Annotated sections 18-44-114 and -115 for a lien to be valid and (2) that the circuit court

erred by not following Arkansas Code Annotated section 18-44-114, which states that every

person who wishes to avail himself or herself of the benefit of the provisions of subchapter

one shall give a ten-day notice with the required statutory language prior to filing a lien.

III. Discussion

We must first address the preliminary issue of whether this appeal involves a final,

appealable order. When the order appealed from is not final, this court will not decide the

merits of the appeal. Kines v. McBride, 2017 Ark. App. 40, at 3, 511 S.W.3d 352, 354. The

finality of an order is a jurisdictional question that we have the right and duty to raise in

order to avoid piecemeal litigation. Toney v. White, 31 Ark. App. 34, 36, 787 S.W.2d 246,

247 (1990). Arkansas Rule of Appellate Procedure–Civil 2(a)(1) provides that an appeal may

be taken only from a final judgment or decree entered by a circuit court. For an order to be

appealable, it must dismiss the parties from the court, discharge them from the action, or

conclude their rights to the subject matter in controversy. Toney, supra. Arkansas Rule of

Civil Procedure 54(b) (2023) permits an appeal from an order resolving fewer than all claims

against all parties but only when a proper certificate is executed by the circuit court. Without

either a final order pursuant to Arkansas Rule of Appellate Procedure–Civil 2(a) or an order

with a proper Arkansas Rule of Civil Procedure 54(b) certification, we do not have

jurisdiction to hear this case.

4 Reynolds maintains that this court lacks jurisdiction to consider the merits of this

appeal because the June 22 order is not a final, appealable order. We agree. Appellants filed

a notice of interlocutory appeal but then in the same document assert that the June 22 order

“is a final order on the issue of lien validation.” However, it cannot be both, considering an

interlocutory order is the direct opposite of a final order.

Here, the only appellate jurisdiction alleged in appellants’ notice is Rule 2(a)(1).

While appellants abandoned their unresolved claims in their notice of appeal, they cannot

dispose of Reynolds’s pending counterclaim for damages; thus, the June 22 order is not a

final judgment. On appeal, appellants acknowledge that Reynolds’s counterclaim remains

pending—as well as their third-party complaint against Holloway Engineering, Surveying &

Civil Design, PLLC—but nonetheless insist that “[a]ny remaining issues will be litigated at

trial and can be subject to another appeal if needed or desired by the parties.” This

statement—and appellants’ decision to move forward with this appeal—demonstrate either a

deliberate attempt to ignore the rules of appellate procedure or a fundamental

misunderstanding of our rules on finality. As stated above, the purpose of requiring a final

order is to avoid piecemeal litigation, and to allow this appeal to proceed would inevitably

lead to just that.

Finally, the circuit court did not issue a Rule 54(b) certificate allowing for an

interlocutory appeal of its June 22 order. In their notice of appeal, appellants state they will

be filing a contemporaneous Rule 54(b) certificate requesting that the circuit court enter a

5 certification of final judgment of the June 22 order. However, there is no Rule 54(b) motion

or order in the record.

IV. Conclusion

Under the plain language of Rule 2 of the Arkansas Rules of Appellate Procedure–

Civil, the order is not final; thus, we dismiss the appeal.

Dismissed.

KLAPPENBACH and GRUBER, JJ., agree.

Corbitt Law Firm, PLLC, by: Chris P Corbitt, for appellants.

H. Bradley Walker and Tim Cullen, for appellee.