Mountain Pure, LLC v. Clear Water Holdings, LLC

2016 Ark. App. 542, 506 S.W.3d 281, 2016 WL 6610204, 2016 Ark. App. LEXIS 569
CourtCourt of Appeals of Arkansas
DecidedNovember 9, 2016
DocketCV-16-122
StatusPublished
Cited by2 cases

This text of 2016 Ark. App. 542 (Mountain Pure, LLC v. Clear Water Holdings, LLC) is published on Counsel Stack Legal Research, covering Court of Appeals of Arkansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Mountain Pure, LLC v. Clear Water Holdings, LLC, 2016 Ark. App. 542, 506 S.W.3d 281, 2016 WL 6610204, 2016 Ark. App. LEXIS 569 (Ark. Ct. App. 2016).

Opinion

LARRY D. VAUGHT, Judge

| Appellants, Mountain Pure, LLC d/b/a Mountain Pure Water Company; Mountain Pure MS, LLC; MPAR, LLC; MPMS, LLC; Mountain Pure Holdings, LLC; and John B. Stacks, 1 appeal the Pulaski County Circuit Court’s order denying their petition for contempt filed against appellee Clear Water Holdings, LLC, as successor in interest to Simmons First National Bank. We affirm.

Appellants’ petition for contempt arose out of a foreclosure action. Simmons First National Bank initiated the action on March 17, 2014, by filing a complaint to foreclose its mortgages and security interests in certain real and personal property secured by loans 12Simmons made to appellants. On April 16, 2014, the circuit court entered a consent order appointing Michael McAfee as receiver to preserve the property by managing the Mountain Pure entities.

On September 22, 2014, Simmons and appellants executed a settlement agreement and mutual release of claims and security interests, which, pertinent to this appeal, included the following provision:

5. Information for Preparation of Mountain Pure Entities Tax Returns. Within 30 days of the date of this agreement, the Receiver shall in the ordinary course of its business provide a copy of all information from the Mountain Pure MAS-90 computer system in Little Rock, Arkansas to enable the Mountain Pure Entities to prepare and file tax returns for the year 2013 and the partial year 2014 through September, 2014. After the Receivership is concluded, Simmons and the Receiver shall turn over the actual hard drive(s) and computer towers 2 that contain the hard drives to the Stacks Parties. Simmons and the Receiver have no responsibility in this regard other than providing copies of information on the computer system, and the Stacks Parties have no right or claim to any information of the Mountain Pure Entities on the computer system except as set forth in this paragraph.

A foreclosure decree was entered on September 24, 2014; the Little Rock Mountain Pure plant was sold at a foreclosure sale on October 16, 2014, to Clear Water Holdings, LLC; an order confirming the sale was entered on October 21, 2014; and Clear Water Holdings was subsequently substituted as the proper party plaintiff.

On January 9, 2015, McAfee delivered one computer tower, the main file server containing the MAS-90 system, to appellant. Stacks; however, Stacks claimed that there was no data on the tower. McAfee claimed that his delivery of the computer tower with the MAS-90 system satisfied the terms of the settlement agreement.

|aOn February 26, 2015, appellants filed a motion for emergency relief to enforce settlement, and later, on March 26, 2015, filed an amended motion. Although Stacks had possession of the computer tower containing the MAS-90 system, he requested that McAfee be ordered to immediately turn over the computer towers containing the hard drives and that nothing be removed from the hard drives and computer systems, particularly the MAS-90 system. Appellants claimed that the data on the hard drives was extremely important to prepare their taxes and to seek funding for continuing businesses.

A hearing was held on appellants’ motion for emergency relief on April 1, 2015. On April 13, 2015, the circuit court entered an order providing, “Immediately upon the conclusion of the Receivership, the Receiver shall turn oyer and surrender the remaining computer towers and hard drives from the Mountain Pure facility to John Stacks. The Receiver shall not delete or remove any data, software or anything else from said hard drives.”

On May 6, 2015, McAfee delivered a second computer tower to appellants—the terminal server; however, Stacks claimed that data had been deleted from the hard drive. As a result, on May 15, 2015, appellants filed a petition for contempt against McAfee.

At the contempt hearing on August 3, 2015, Stacks testified that on May 6, 2015, McAfee delivered a computer tower; however, data on it had been deleted. Stacks testified that he hired Tracy Bush, a former employee, and Gordon Bond, a computer expert, who both confirmed that the data had been deleted. Stacks stated that two weeks prior to the contempt hearing, on July 21, 2015, McAfee delivered a USB drive containing 300GB of data. Stacks further testified that he had been trying to obtain the computers and the data thereon since |4September 2014 and that he desperately needed it to file his taxes and to secure loans for his other businesses. He claimed that the ordeal had caused him considerable trouble and expense.

Tracy Bush testified that the computers delivered by McAfee in January (the main file server) and May 2015 (the terminal server) had no data. Gordon Bond, service manager of The Computer Works, testified that he had been retained by Stacks to examine the terminal server Stacks received from McAfee on May 6, 2015. Bond’s examination revealed that data had been deleted from the terminal server on May 5, 2015, the day before it was delivered. Bond further stated that the 300GB of data on the USB drive that was provided by McAfee in July 2015 was not data from the terminal server.

Marvin Bonney worked for a computer-networking company that was hired by Clear Water Holdings. He testified that in January 2015 he was asked to “decommission” the main file server and replace it with another server. He said that he was told by McAfee not to compromise the MAS-90 system or its data but to remove all remaining data—300GB—from the main file server. Bonney copied the 300GB of data to a USB drive and then deleted that data from the main file server before it was delivered to Stacks. Bonney testified that he was later asked by McAfee to remove the terminal server from the network so that it could be delivered to Stacks. Bonney was told not to delete anything from the terminal server; however, he did delete user names, files, and data of hackers that he claimed compromised the server.

McAfee testified that it was his understanding based on the settlement agreement that he was to deliver a copy of the MAS-90 system and its data from the main file server to appellants so they could prepare their tax returns. He said that he did that in January 2015. McAfee stated that he did not believe that he was obligated, pursuant to the settlement | ¡¡agreement, to provide appellants any other data from the main file server or the server itself until the end of the receivership. Nevertheless, he testified that the data deleted from the main file server was delivered to Stacks in July 2015. McAfee conceded that at the April 2015 hearing he did not report to the circuit court that he had caused data from the main file server to be deleted in January 2015. However, he testified that he complied with the April 2015 order when he delivered the remaining server—the terminal server—to Stacks in May 2015. He testified that to his knowledge there was no usable data on the terminal server that had been deleted pri- or to its delivery.

Johnny Pabian testified that he is the owner of Pabian Partners, a SAGE 3 software reseller.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Smith v. Orsbun
2024 Ark. App. 330 (Court of Appeals of Arkansas, 2024)

Cite This Page — Counsel Stack

Bluebook (online)
2016 Ark. App. 542, 506 S.W.3d 281, 2016 WL 6610204, 2016 Ark. App. LEXIS 569, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mountain-pure-llc-v-clear-water-holdings-llc-arkctapp-2016.