Southern Forestry and Wildlife, LLC v. James B. Feinman

2024 Ark. App. 234, 688 S.W.3d 465

• Court: Court of Appeals of Arkansas
• Decided: April 10, 2024
• Status: Published

Opinion

Cite as 2024 Ark. App. 234 ARKANSAS COURT OF APPEALS DIVISION IV No. CV-22-528

SOUTHERN FORESTRY AND Opinion Delivered April 10, 2024 WILDLIFE, LLC APPELLANT APPEAL FROM THE PULASKI COUNTY CIRCUIT COURT, ELEVENTH DIVISION V. [NO. 60CV-20-5639]

JAMES B. FEINMAN HONORABLE PATRICIA JAMES, APPELLEE JUDGE

REVERSED; MOTION FOR SANCTIONS DENIED

BRANDON J. HARRISON, Chief Judge

This appeal is mostly about an Arkansas Rule of Civil Procedure 12(b)(6) dismissal

based on a statute of limitations, but it is also about Arkansas Rule of Appellate Procedure–

Civil 11. The parties are Southern Forestry and Wildlife, LLC (Southern Forestry), whose

sole member (and head cook and bottle washer, we take it) is Benton Gann, an Arkansas

lawyer; and James Feinman, an attorney who lives in Virginia. The stakes, under a final

invoice from Southern Forestry that Feinman refused to pay, are $7,713.50. Except where

we note otherwise, we take the facts from Southern Forestry’s second amended complaint,

the pleading the circuit court dismissed with prejudice.

Feinman is a duck hunter who leases hunting property in Prairie and Arkansas

Counties. Southern Forestry provides turnkey caretaking services for owned or leased

property, plants food plots, maintains hunting blinds, and otherwise maintains and inspects the property. In December 2012, Feinman contacted Southern Forestry and entered a

verbal agreement that contemplated an ongoing contractual relationship in which Southern

Forestry would perform services for Feinman as requested and invoice him periodically for

labor and materials. Initially, Feinman paid the invoices in full upon receipt. Around 1

December 2014, Feinman asked to defer payment of some invoiced amounts and have them

included in future invoices. The parties did not set a specific time for performance. From

that day to 15 October 2017, Feinman made regular payments on the balance owed and

continued to ask Southern Forestry to perform additional services, which Southern Forestry

did. And through that time, Feinman’s “words and actions affirmed that [the] balances

would be paid in full.”

On October 15, Southern Forestry pleads, Feinman abruptly terminated the

contractual relationship in an email. The following day, Southern Forestry sent a final

invoice. On 16 November 2017, Feinman informed Southern Forestry he would not pay

it. He met continued requests for payment with refusals that escalated to threats, including

that he would sue for fraud, punitive damages, and attorney fees if he heard from Southern

Forestry again, and that he would “never pay [Southern Forestry] a penny until a court tells

me to.” On those facts, Southern Forestry sought to recover the sum reflected in the final

invoice under claims for breach of contract, promissory estoppel, and unjust enrichment.

That was not the first complaint in this action, of course—and this action was not

the first between these parties involving this invoice. Gann filed an action on behalf of

Southern Forestry for breach of contract in January 2019. But he was not a lawyer yet.

2 The circuit court dismissed the action without prejudice on Feinman’s motion in May 2019

because Gann could not sue on behalf of his LLC without a law license.

Gann signed and filed the complaint in this action 7 October 2020. Like the later

amended complaints, this one alleged that a “verbal agreement” existed between the parties.

Feinman argued that a three-year statute of limitations under Arkansas Code Annotated

section 16-56-105 (Repl. 2005) applied to, and barred, Southern Forestry’s claims. Feinman

sought leave, if the court did not dismiss the complaint, to file a counterclaim with his

answer. Southern Forestry defended the timeliness of the October 2020 complaint, but

superseded it with an amended complaint in January 2021.

On 4 January 2022, the circuit court denied the motion to dismiss. The order

explained that, by the court’s calculation, “plaintiff’s Original Complaint in this matter was

filed within the three-year statute of limitations.” Feinman filed a timely answer and

counterclaim asserting that he entered “written contracts” with Southern Forestry for

services on his hunting property, and Southern Forestry had broken them. He requested

$100,000 in compensatory damages, interest, attorney’s fees, and court costs. Southern

Forestry filed a motion to dismiss of its own, arguing Feinman failed to plead sufficient facts,

failed to attach any written contracts as Arkansas Rule of Civil Procedure 10(d) required,

and argued his counterclaim was barred by the applicable statutes of limitations and repose.

The parties agree now that there was no written contract. Although Feinman has

abandoned his cross-appeal—the order on appeal dismissed his counterclaim alongside

Southern Forest’s second amended complaint—Southern Forestry has moved this court to

sanction him for filing a notice of cross-appeal in the first place. The parties’ tit-for-tat

3 filings sometimes recall a divorcing couple fighting in front of a dinner guest they have

forgotten about. In any event, when the circuit court issued its second relevant order April

19, the active pleadings included Southern Forestry’s claims on an alleged oral agreement,

and Feinman’s claims on an alleged written agreement, covering what appeared to be the

same subject matter. Feinman denied, in his answer, virtually every averment in Southern

Forestry’s active complaint. The court entered an order as follows:

1. The Court has reviewed the pleadings in this matter and it appears there was no written contract between the parties. If there is a written contract, then it needs to be produced within 10 (ten) days of entry of this Order.

2. However, if there is no written contract, then the Court’s ruling in the Order entered on [4 January 2022] was made in error. The three year statute of limitations would not apply and the Amended Complaint and Counterclaim should be dismissed.

Southern Forestry filed a second amended complaint April 27 elaborating on the factual

allegations relevant to the parties’ agreements and contractual relationship. Southern

Forestry then responded to the April 19 order and advised that “upon reviewing all available

evidence, [Southern Forestry’s] counsel has not located any document that would clearly

qualify as a written contract.” Feinman did not respond to the order.

On May 18, the circuit court entered an order finding that, in the absence of a

written contract, “the three-year statute of limitations applies.” The order continued,

“Therefore, Plaintiff’s Second Amended Complaint and Defendant’s Counterclaim is

hereby dismissed with prejudice to refiling.” The court had not held a hearing, and did not

explain its rulings.

4 In essence, by entertaining and then rejecting a suggestion that a different limitations

period for written agreements might apply, the circuit court had swapped an initial ruling

that Southern Forestry’s action on an oral contract was timely, for a final ruling that it was

untimely, under the same limitations period from section 16-56-105. Further, though the

court had indicated in the April 19 order that its earlier order denying Feinman’s motion to

dismiss might have been in error, the complaint whose timeliness the court had assessed

then had been superseded.1 The second amended complaint detailed the long history of

Feinman’s payment under loose terms, which only strengthened Southern Forestry’s posture

to argue (as it had) that its claims did not accrue until Feinman repudiated the agreement

and refused to pay the final invoice. Rice v. McKinley, 267 Ark. 659, 590 S.W.2d 305 (Ark.

App. 1979). And Feinman had not yet filed a motion to dismiss it.

The parties agree in their briefs that the material legal question is whether it was clear

on the face of Southern Forestry’s second amended complaint that the statute of limitations

had run. Loftin v. First State Bank, 2020 Ark. App. 66, 596 S.W.3d 16. What standard of

review to apply is not nearly as clear. Since our supreme court’s opinion in Doe v. Weiss,

2010 Ark. 150, our appellate courts have mostly stated that review of a Rule 12(b)(6)

dismissal is for abuse of discretion—described as “a high standard that requires not only error

in the circuit court’s decision, but also that the ruling was made improvidently,

1 See Matsukis v. Joy, 2010 Ark. 403, at 7–8, 377 S.W.3d 245, 249 (reversing and remanding sua sponte dismissal in a similar posture); see also A-1 Recovery Towing & Recovery, Inc. v. Walther, 2023 Ark. 34, at 4, 660 S.W.3d 797, 799 (noting that supreme court “has repeatedly reversed circuit court orders sua sponte disposing of cases on the merits in the absence of dispositive motions”). Feinman filed a motion to dismiss later May 18.

5 thoughtlessly, or without due consideration.” Steinbuch v. Univ. of Ark., 2019 Ark. 356, at

7–8, 589 S.W.3d 350, 356. Naturally, that’s the standard Feinman urges us to apply.

Southern Forestry argues we should review de novo, the standard that has applied to

review of a dismissal for legal insufficiency of the pleaded facts in American and English law

since at least 1768. See Nichols v. Swindoll, 2022 Ark. App. 399, at 12–28 (Harrison, C.J.,

dissenting) (collecting cases from every federal circuit and every other state reviewing de

novo, where appellant conceded standard was abuse of discretion). That would be

consistent with our treatment of other legal questions answered from the pleadings.2 It

would also avoid inconsistency with de novo review we would conduct, at other points in

a case, of the legal sufficiency of the same facts.3

In fact, the parties might have reached one of those “other points” here: the circuit

court recited in its May 18 dismissal order that it had consulted the “record, pleadings,

2 For example, subject-matter jurisdiction, Cherokee Nation Businesses, LLC v. Gulfside Casino Partnership, 2023 Ark. 153, at 5, 676 S.W.3d 368, 372; and personal jurisdiction, Lawson v. Simmons Sporting Goods, Inc., 2019 Ark. 84, at 5, 569 S.W.3d 865, 869. The determination that a pleading does (or does not) state facts on which the law allows relief should not be confused with discretionary decisions to “accept or reject pleadings” under other Rules—whether, for example, the circuit court abused its discretion by concluding it was too late to add a permissive counterclaim under Arkansas Rule of Civil Procedure 13(e). A decision whether to strike an amendment can include considerations collateral to the merits that the circuit court is better able to evaluate—whether an existing trial setting could accommodate the needed proof, for example, or whether a prejudicial amendment could have been filed sooner if the pleader had been diligent. 3 For example, if the parties agreed the material pleaded facts were true, review of a summary judgment on those facts would be de novo. See Hobbs v. Jones, 2012 Ark. 293, at 8, 412 S.W.3d 844, 850 (citing Aloha Pools & Spas, Inc. v. Emp.’s Ins. of Wausau, 342 Ark. 398, 39 S.W.3d 440 (2000)). But the Rule 12(b)(6) analysis requires us to assume they are true. E.g., Ingram v. City of Pine Bluff, 355 Ark. 129, 133 S.W.3d 382 (2003).

6 evidence, and all things and matters before it[.]” It noted Southern Forestry’s statement, in

response to the order to produce a written contract, that there was none. That admission

was a matter “outside the pleading” under Rule 12(b)(6) (and “outside the pleadings,”

plural, under Rule 12(c)). If Feinman had moved to dismiss the second amended complaint,

and the May 18 order had granted that motion, we would have to treat it as a summary

judgment under the text of Rule 12 and our caselaw—and our review would be de novo.

Parsons v. Preferred Fam. Healthcare, Inc., 2023 Ark. 56, 662 S.W.3d 654.

But Southern Forestry never contended there was a written contract. Quite the

opposite. Its admission that there was no written contract conflicted with Feinman’s

averments in his counterclaim. But Feinman abandoned his cross-appeal. None of the

pleadings or papers were sworn to. They demonstrate that the parties simply disagree about

what kind of agreement they had. Feinman offers a number of labels that might fit the

arrangement Southern Forestry described, for determining the accrual date of its claims (an

“open account” or a “debt payable on demand,” among others.) But we conclude that

determination, like the ultimate question of timeliness, is for the trier of fact.

Finally, Southern Forest moves us to sanction Feinman under Rule 11 of the

Arkansas Rules of Appellate Procedure–Civil for filing a frivolous notice of cross-appeal.

Rule 11(b)(1) expressly prohibits “taking or continuing a frivolous appeal or initiating a

frivolous proceeding” separate from the prohibition in Rule 11(b)(2) on filing a “brief,

motion, or other paper” without the proper purpose, and legal and factual grounding,

required in Rule 11(a). Southern Forest argues that Feinman’s counterclaim for damages in

7 the amount of $100,000 never had any grounding in law or fact, and was brought solely to

intimidate him into dropping his demands for payment.

We assume that Rule 11 would allow our appellate courts to sanction parties for

filing notices of appeal or cross-appeal in circuit court, in appropriate cases, even if the

appeal or cross-appeal were not pursued. (For one thing, this would avoid an interpretation

that would allow the circuit courts to sanction parties for seeking independent appellate

review of their orders.) However, we decline to do so in this case. Feinman filed a notice

of cross-appeal but promptly abandoned it in his appellee’s brief. We see no evidence that

the possibility of a cross-appeal imposed any more expense or burden on Southern Forestry

than it would have borne by merely pursuing the appeal it noticed first.

Reversed; motion for sanctions denied.

ABRAMSON and HIXSON, JJ., agree.

Ben Motal, for appellant.

Lovell, Nalley & Nalley, by: Chance W. Nalley; and Tim Cullen, for appellee.