Skalla v. Canepari

2013 Ark. 415, 430 S.W.3d 72, 2013 WL 5761063, 2013 Ark. LEXIS 493
CourtSupreme Court of Arkansas
DecidedOctober 24, 2013
DocketCV-12-1065
StatusPublished
Cited by26 cases

This text of 2013 Ark. 415 (Skalla v. Canepari) is published on Counsel Stack Legal Research, covering Supreme Court of Arkansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Skalla v. Canepari, 2013 Ark. 415, 430 S.W.3d 72, 2013 WL 5761063, 2013 Ark. LEXIS 493 (Ark. 2013).

Opinion

COURTNEY HUDSON GOODSON, Justice.

| Appellant Virginia McCreary Skalla appeals an order of the Crittenden County Circuit Court granting a motion for summary judgment filed by appellee Joseph F. Canepari. For reversal, Skalla argues that the circuit court erred in dismissing her claims that Canepari breached his fiduciary duty to her as a tenant in common and that Canepari was liable for tortious interference and deceptive trade practices. We have jurisdiction pursuant to Arkansas Supreme Court Rule 1 — 2(b)(5) (2013), as this appeal presents a significant issue needing clarification or development of the law. We affirm.

I. Facts

Skalla, a resident of Georgia, and her uncles, Albert McCreary, a resident of Alabama, and Charles McCreary, a resident of Texas, each owned an undivided one-third interest in two tracts of farmland totaling approximately 960 acres in Crit-tenden County. One 640-acre tract lies north of Earle (the “North Farm”), while the second tract includes approximately |2320 acres and lies south of Earle (the “South Farm”). Skalla’s grandparents originally owned the 960-acre farm, and after Skalla’s father, William McCreary, died when she was a minor, she inherited her father’s one-third share. With Skalla, her uncles each inherited an undivided one-third interest in the North and South Farms as tenants in common. Skalla, Albert, and Charles never farmed the land but leased the farms to two groups of farmers, the Hood family and the Bramuc-ci family. The Hoods leased the North Farm while the Bramuccis leased the South Farm.

Skalla and her uncles allegedly operated the two farms through an unwritten partnership agreement whereby Charles served as the managing partner. Throughout the 1990s, Albert allegedly told Skalla that she had a right of first refusal for his interest in the two farms, but this agreement was never reduced to writing. By 2002, the North Farm had fallen into disrepair. As a result, Charles hired George Baird to manage the North Farm per a written farm-management agreement. In 2003, Skalla sought advice from Baird about further improvements to both farms. Baird explained to Skalla that certain portions of the undulating farmland were not well-suited for farming and that, because those portions would need leveling and irrigating at great expense, she would be unwise to spend additional money on further improvements. Baird allegedly advised her to sell her one-third interest, but Skalla insisted on gathering more information for future improvements to the farms. In May 2004, Baird sent Skalla a letter outlining a preliminary estimate of $250,000, which included installing two wells and leveling portions of the farms. According to Baird, Charles did not agree with these improvements, and Baird did not submit a letter to Albert. Skalla never Issought approval for a loan to finance the plan.

Subsequently, in 2004, Albert agreed orally to give Skalla the right of first refusal and offered to sell his one-third interest. Skalla asked Charles to join her in buying Albert’s interest, but Charles declined. When Canepari learned that Albert’s son, Bert McCreary, who acted as his father’s power of attorney, was interested in selling the property, Canepari contacted Bert. Subsequently, on August 20, 2004, Canepari contracted to purchase Albert’s one-third interest in the 960 acres for the sum of $217,600.

On September 19, 2004, Canepari wrote a letter to his real estate agent, Powell Jennings, instructing him to deliver the contract to Skalla’s farm manager. Cane-pari’s letter stated that he had no interest in being partners with other owners and that he understood that he must wait three years to sue for a partition. He claimed that he was prepared to challenge the validity of the management agreement and leases and that he was interested in farming the property himself. In order to avoid an expensive legal conflict, Canepari proposed that he take the South Farm and that Skalla and Charles could take the North Farm, but such an exchange never happened. On September 24, 2004, Skalla responded, stating that she was willing to continue the leases of the farm for the next farming cycle and offered to sell her undivided one-third interest to Canepari for $1,050 per acre. Skalla also stated that if Canepari was not interested in purchasing her interest or leasing his interest, then she was prepared to file a partition action. Skalla’s attorney also reminded Canepari of his fiduciary duty as a tenant in common.

In January 2005, Skalla informed Cane-pari that she leased the farms to the Hoods and |4the Bramuccis. As a result, Canepari entered into separate leases for his one-third interest with the Hoods and the Bramuccis, and the Hoods’ attorney later informed Skalla that she had no right to lease Canepari’s one-third interest without his permission. Skalla amended her leases, and the Hoods and the Bramuccis later renewed.

After Albert sold his interest to Cane-pari, Charles entered into a contract with Skalla, giving her a right of first refusal to purchase Charles’s one-third interest and vice versa. In late 2005, Charles met Ca-nepari and offered to sell his one-third interest in the farms. According to Cane-pari, he agreed to purchase Charles’s interest but stated that Charles must first satisfy his right-of-first-refusal agreement with Skalla. On December 23, 2005, Charles gave Skalla thirty days to exercise her right of first refusal, and she declined to accept his offer. Subsequently, Cane-pari entered into a contract with Charles to purchase his one-third interest for $240,000.

On June 26, 2006, after Canepari purchased Charles’s one-third interest, his counsel received a letter from Skalla’s counsel, stating that Canepari prevented the McCreary Partnership from entering into seven-year-renewal leases with the Hoods and the Bramuccis. Skalla’s counsel maintained that Canepari limited the lease terms to three years, prevented the partnership from implementing the long-term plan, and forced Charles to sell his one-third interest. In the letter, Skalla offered to sell her one-third interest to Canepari for $450,000 and agreed to a voluntary partition allocating the South Farm to her and the North Farm to him, plus $50,000 in damages. According to Canepari, this letter signified the first time that he had heard of any such improvement plan.

IsOn May 29, 2007, Skalla filed a complaint, seeking a partition of the lands and damages for interference and breach of fiduciary duty. In her complaint, Skalla alleged that Canepari first purchased an undivided one-third interest from Albert and then an undivided one-third interest from Charles. Skalla further asserted that, at the time of the second purchase, Canepari owed an existing fiduciary duty to her as a cotenant, had breached his fiduciary duty, tortiously interfered with a business expectancy; and had violated the Arkansas Deceptive Trade Practices Act (ADTPA). She sought $75,000 in actual damages, punitive damages, and attorney’s fees.

On June 27, 2007, Canepari responded by letter that he was amenable to partition and that Skalla could take any 320 acres of the farms. In February 2008, Skalla agreed to exchange deeds with Canepari, and on February 6, 2008, the deed transferring the North Farm to Canepari was executed. Skalla then took possession of the South Farm but did not dismiss her claims.

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Bluebook (online)
2013 Ark. 415, 430 S.W.3d 72, 2013 WL 5761063, 2013 Ark. LEXIS 493, Counsel Stack Legal Research, https://law.counselstack.com/opinion/skalla-v-canepari-ark-2013.