Waterall v. Waterall

155 S.W.3d 30, 85 Ark. App. 363, 2004 Ark. App. LEXIS 202
CourtCourt of Appeals of Arkansas
DecidedMarch 10, 2004
DocketCA 03-701
StatusPublished
Cited by8 cases

This text of 155 S.W.3d 30 (Waterall v. Waterall) 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
Waterall v. Waterall, 155 S.W.3d 30, 85 Ark. App. 363, 2004 Ark. App. LEXIS 202 (Ark. Ct. App. 2004).

Opinion

Larry D. Vaught, Judge.

Appellant/cross-appellee Ron Waterall (Ron) appeals the circuit court’s findings that he failed to prove a legal entitlement to property owned by his father, appellee/cross-appellant Rex Waterall (Rex), through promissory estoppel and/or constructive trust. On cross-appeal, Rex requests an additional award of liquidated damages, as mandated by Ark. Code Ann. § 18-60-309(b)(l) (Repl. 2003), that was not a part of the circuit court’s order. We affirm on direct appeal and reverse and remand on cross-appeal.

In June 1977, Rex purchased an eighty-acre unimproved tract of land in Garland County, Arkansas. In July 1977, he purchased a 24' x 24' building from a house-mover and had it relocated to the eighty-acre tract. Ron repaid Rex the purchase price of the building and moved into it shortly after it was moved to the property. Allegedly, Ron was given permission to live in the building in consideration for him keeping: (1) a right-of-way on the property open; (2) the property clean and presentable; (3) dumpers, timber thieves, etc. off of the property. Ron was not required to pay rent but was required to pay taxes on the property. There is a dispute as to whether there was ever an agreement between the parties for Rex to either give the property to Ron or sell it to him.

Ron lived on the property and made various additions and improvements to it until 1992, when he and his wife Tara entered into a divorce action. As part of their property settlement, Ron and Tara acknowledged that their residence was located on real property owned by Rex. They further agreed that Tara could have the exclusive use and possession of the residence until such time as she remarried or no longer wanted to reside there. At such time as either event occurred, the house (but not the realty) was to be sold and the proceeds split equally between Ron and Tara. On April 7, 1992, this understanding was further evidenced by a written agreement containing the same terms that was executed by Ron, Tara, and Rex. The agreement further stated that Rex would sell neither the realty on which the house was situated nor the one acre surrounding it without first obtaining written permission of both Tara and Ron.

Shortly after the agreement was executed, Tara remarried. Rex brought an unlawful detainer action, in which Ron intervened, against Tara and her new husband to force them from the property. The parties entered into a consent decree on September 19, 1994, which provided that Tara and her new husband would vacate the property by November 1, 1994, and that the clerk of the court would sell the house. The consent decree further provided that the sale would not include any realty, and that unless the house was sold to either Rex or his agent, the house would be immediately removed from the eighty-acre tract by the buyer.

On October 12, 1994, the circuit clerk held a public sale of the house, which was not attended by either Tara or her attorney. The property was sold to Rex for $100 cash. Ron reimbursed Rex at the time of the sale. A bill of sale was executed by the circuit clerk to Rex. Ron then immediately moved back into the house on the property. Rex testified that again, there was no agreement to give or sell the property to Ron, but that Ron was required to keep it neat and clean. Rex further testified that Ron did not keep the property up, and he asked Ron to move off the property. Rex then filed an unlawful-detainer action on August 20, 2001, after Ron refused to clean up the property. Rex testified that the remaining seventy-nine acres were sold in 2002, and that there was $25,000 placed in escrow by the buyer for the one acre that Ron continued to occupy.

Ron testified that he had made substantial improvements to the house, including the addition ofbathrooms, bedrooms, garage, and shed. He estimated the current value of the house at $40,000 to $50,000. Ron testified that he had paid the real estate taxes for the previous three years, and that he would not have spent the money he did improving the property if he had not intended to live there forever. Ron filed a counterclaim seeking the right to occupy the house located on Rex’s property “to the extent of one (1) acre surrounding it,” for as long as he lived, under theories of promissory estoppel and constructive trust.

Following a trial and the submission of trial briefs, the circuit judge held that Ron had failed to sustain his burden of proof as to the allegations set forth in the counterclaim, and found in favor of Rex, ordering Ron to surrender possession of the property to Rex. This appeal followed.

Direct Appeal

In bench trials, the standard of review on appeal is whether the trial court’s findings were clearly erroneous. Schueck v. Burris, 330 Ark. 780, 957 S.W.2d 702 (1997). Ron acknowledges that Rex is the legal title holder to the one acre tract in question. He contends, however, that he is entitled to reside on the one acre for the remainder of his life under the theories of promissory estoppel and constructive trust, and that the circuit court erred in finding that he failed to prove those allegations.

A. Promissory Estoppel

The black-letter law on promissory estoppel is found in the Restatement (Second) of Contracts, § 90:

A promise which the promisor should reasonably expect to induce action or forbearance on the part of the promisee or a third person and which does induce such action or forbearance is binding if injustice can be avoided only by enforcement of the promise. The remedy granted for breach may be limited as justice requires.

See also Superior Federal Bank v. Mackey, 84 Ark. App. 1, 27, 129 S.W.3d 324, 341 (2003). Whether there has been actual reliance and whether it was reasonable is a question for the trier of fact. Id. The party claiming estoppel must prove he relied in good faith on the wrongful conduct and has changed his position to his detriment. Taylor v. Eagle Ridge Developers, LLC, 71 Ark. App. 309, 29 S.W.3d 767 (2000). The doctrine of promissory estoppel may be asserted to prevent the application of the statute of frauds. See Ralston Purina Co. v. McCollum, 271 Ark. 840, 611 S.W.2d 201 (Ark. App. 1981). Where one has acted to his detriment solely in rebanee on an oral agreement, estoppel may be raised to defeat the defense of the statute of frauds. Country Corner Food & Drug, Inc. v. Reiss, 22 Ark. App. 222, 737 S.W.2d 672 (1987).

Ron testified that it was his understanding that he was going to be able to live on the property forever; accordingly, he occupied the property from 1979 until the time of trial (except for a brief period during his divorce proceeding), made valuable improvements totaling at least $40,000, and paid taxes on the property except for the most recent two or three years.

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Bluebook (online)
155 S.W.3d 30, 85 Ark. App. 363, 2004 Ark. App. LEXIS 202, Counsel Stack Legal Research, https://law.counselstack.com/opinion/waterall-v-waterall-arkctapp-2004.