Stone v. Washington Regional Medical Center

2016 Ark. App. 236, 490 S.W.3d 669, 2016 WL 1719114, 2016 Ark. App. LEXIS 259
CourtCourt of Appeals of Arkansas
DecidedApril 27, 2016
DocketCV-15-503
StatusPublished
Cited by2 cases

This text of 2016 Ark. App. 236 (Stone v. Washington Regional Medical Center) 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
Stone v. Washington Regional Medical Center, 2016 Ark. App. 236, 490 S.W.3d 669, 2016 WL 1719114, 2016 Ark. App. LEXIS 259 (Ark. Ct. App. 2016).

Opinion

KENNETH S. HIXSON, Judge

|! This is an appeal from a decree quieting title to certain property in appellee Washington Regional Medical Center (“WRMC”). Appellants, the heirs at law of the original grantors, bring this appeal, arguing six points. 1 We affirm the circuit court. 2

| j,Facts and Procedural History

In 1906, Stephan (or S.K.) and Amanda Stone (“the Stones”) owned block 37 of the original town plat of Fayetteville, Arkansas. The Stones decided to gift the property to the City of Fayetteville (the “City”) “as a testimonial of our affection for the people among whom we have passed our lives.” The purpose of the gift was to “establish and maintain permanently a hospital which shall be known as the Stone Hospital.”

In September 1906, the Stones executed a Warranty Deed (the “1906 Deed”) that conveyed the property to the City. The 1906 Deed contained a reverter clause which would cause the property to be conveyed back to the Stones or their heirs in the event that either of two triggering events occurred. The 1906 Deed further established a Stone Hospital Board of Control (“Board of Control”) to operate the Stone Hospital. 3

Despite the conveyance in 1906, by 1909 Stone Hospital still had not been established. In February 1909, the Stones executed another warranty deed in favor of the City (the “1909 Deed”). The 1909 Deed contained a recital that explained the reason why the second deed was created. The recital provided: “Whereas, in said [1906 Deed] there are certain conditions providing for a reversion of the premises which may tend to retard the establishment and maintenance of said Hospital.” There were two significant differences between the 1906 Deed and the 1909 Deed. First, the 1906 Deed retained a possibility of reverter in the Stones which could “retard” the establishment of the Stone Hospital; while |sthe 1909 Deed omitted the language that created the possibility of reverter. Second, in the place of the possibility of reverter, the 1909 Deed added a condition to the conveyance which provided that if the hospital should change its location, the entire proceeds of the property should constitute a trust fund to be devoted to the maintenance of the hospital at the location selected; and, that any change in location would have to be approved by both the Board of Control named in the 1906 Deed and by the City.

The Stone Hospital was subsequently established and became operational in 1912. In 1914, the Board of Control petitioned the Washington County Circuit Court to be incorporated for the purpose of conducting a charitable hospital. The new corporation was known as Fayetteville City Hospital (“FCH”). The articles of incorporation were approved on April 30, 1914. 4

The City owned and held legal title to the FCH property from 1906 until 1978, at which time the City transferred the FCH property to FCH. FCH continued to operate the facility until 1991. In July 1991, WRMC and FCH entered into an assignment and lease agreement. Under those agreements, WRMC operated a skilled-nursing and long-term-care facility on the FCH property. 5

Unrelated to the WRMC/FCH lease agreement and the FCH property, in 2010 the City decided to construct a roundabout to ease traffic congestion near the WRMC campus |4in north Fayetteville. The City required one acre of land to construct the roundabout, and the City offered WRMC $172,500 for a one-acre parcel. Instead of accepting cash for the one-acre parcel, WRMC offered to swap the roundabout site in exchange for the FCH property owned by the City. After what can best be described as a series of legal maneuvers (which are discussed below), the City-agreed to the land swap. Stibsequently, the FCH property was conveyed to WRMC, and the WRMC property was conveyed to the City.

In July 2014, WRMC filed suit seeking to quiet title to the FCH property. The Stone heirs were named as defendants. The petition asserted that, although the 1906 Deed created the possibility of re-verter in the Stones, that possibility of reverter was released by the 1909 Deed in favor of a conveyance in trust for the benefit of the City.

The Stone heirs responded, contending that because the City failed to establish the Stone Hospital and failed to operate it pursuant to the terms of the trust, its actions constituted a rejection of the trust, and that title should be quieted in appellants. The heirs later filed amended answers and counterclaims to have title reinvested in them. WRMC filed an amended petition adding the City as a party. The City answered and sought to have title to the property quieted in WRMC. The heirs amended their counterclaim and cross-claimed against the City.

WRMC filed a motion for summary judgment, asserting that it held legal title to the property, that it was in possession of the property, and that it had complied with all statutory-notice requirements for quiet-title actions. In an accompanying brief, WRMC argued that the Stones and their heirs did not retain any interest in the property after execution and delivery of the 1909 Deed. The City later adopted WRMC’s summary-judgment motion Ras its own. The heirs responded to WRMC’s motion for summary judgment, arguing that WRMC did not hold legal title because the City held only an equitable title as beneficiary under the 1906 and 1909 Deeds.

The Circuit Court’s Decision

Following a hearing, an order was entered granting WRMC summary judgment and dismissing the heirs’ counterclaim with prejudice, and granting the City summary judgment on the heirs’ cross-claim against it. The court found that the 1906 and 1909 Deeds were clear and unambiguous and that both Deeds conveyed the property to the City. The court also found that the Stones intended for the 1909 Deed to release the possibility of reverter retained by them in the 1906 Deed. The court concluded that the release of the possibility of reverter had the effect of vesting title to the property in the City in fee simple absolute. The court also found that the FCH board of directors was the successor to the Stone Hospital Board of Control established in the 1906 Deed, and that the FCH board and the City properly took the required corporate actions to approve the relocation of the city hospital to another location. The court then concluded that WRMC had established all of the elements necessary to sustain a decree quieting title. Based on the entry of the order granting summary judgment, a separate decree quieting title to the property in WRMC was also entered. This appeal followed.

Standard of Review

Summary judgment may be granted only when there are no genuine issues of material fact to be litigated, and the moving party is entitled to judgment as a matter of law. Walls v. Humphries, 2013 Ark. 286, 428 S.W.3d 517. On appellate review, we determine Rif summary judgment was appropriate based on whether the evidentiary items presented by the moving party in support of the motion leave a material fact unanswered. Id. Our review focuses not only on the pleadings, but also on the affidavits and documents filed by the parties.

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Related

Stone v. Washington Regional Medical Center
2017 Ark. 90 (Supreme Court of Arkansas, 2017)

Cite This Page — Counsel Stack

Bluebook (online)
2016 Ark. App. 236, 490 S.W.3d 669, 2016 WL 1719114, 2016 Ark. App. LEXIS 259, Counsel Stack Legal Research, https://law.counselstack.com/opinion/stone-v-washington-regional-medical-center-arkctapp-2016.