Anderson's Taekwondo Ctr. Camp Positive, Inc. v. Landers Auto Grp. No. 1, Inc.

Decision Date18 June 2015
Docket NumberNo. CV-14-594,CV-14-594
Citation2015 Ark. 268
CourtArkansas Supreme Court
PartiesANDERSON'S TAEKWONDO CENTER CAMP POSITIVE, INC. APPELLANT v. LANDERS AUTO GROUP NO. 1, INC. D/B/A LANDERS TOYOTA; STEVE LANDERS, SR.; STEVE LANDERS, JR.; AND SCOTT LANDERS APPELLEES

APPEAL FROM THE PULASKI COUNTY CIRCUIT COURT

[NO. 60-CV-2011-3536]

HONORABLE TIMOTHY DAVIS FOX, JUDGE

AFFIRMED IN PART; REVERSED AND REMANDED IN PART; COURT OF APPEALS OPINION VACATED.

JIM HANNAH, Chief Justice

Appellant Anderson's Taekwondo Center Camp Positive, Inc. ("ATC") appeals an order of the Pulaski County Circuit Court granting summary judgment in favor of Landers Auto Group No. 1, Inc. d/b/a Landers Toyota; Steve Landers, Sr.; Steve Landers, Jr.; and Scott Landers (collectively "Landers") and dismissing with prejudice ATC's counterclaims and third-party complaint. For reversal, ATC argues that the circuit court erred in granting summary judgment because it had a license to use Landers's property and in granting summary judgment and dismissing ATC's counterclaims. Landers cross-appeals the denial of its request for attorney's fees and expenses. The court of appeals had affirmed in part and reversed and remanded in part. See Anderson's Taekwondo Center Camp Positive, Inc. v. Landers Auto Group No. 1, Inc., 2014 Ark. App. 399. We accepted ATC's petition for review, and we affirm inpart and reverse and remand in part.

I. Facts

Steve Landers, Jr., and Richard Anderson had an oral agreement that ATC would use, free of charge, an empty bay at the site of Landers Toyota in Little Rock. ATC needed a space for its nonprofit taekwondo and youth-outreach activities. Landers did not want to incur costs associated with ATC's use of the bay, but Landers was aware that the bay need to undergo improvements before it was fit for ATC's use. ATC improved the bay, claiming that the improvements were worth approximately $100,000. Landers was aware that ATC had made improvements, but it did not stop ATC and expressed no concern about the improvements.

ATC used the bay for approximately one year, and Landers never asked ATC to pay any costs, utilities, or other expenses. In March 2011, after noticing that utility expenses for the building had significantly increased, Landers approached ATC about paying a portion of the utilities. Landers also asked ATC to sign a lease and to begin paying rent and utilities. ATC refused, claiming a lack of funds to make such payments in light of the extensive expenditures that it had made in improving the bay.

On July 9, 2011, Landers brought an action against ATC, alleging unlawful detainer and seeking a writ of possession, damages, costs, and attorney's fees. ATC answered the complaint, alleging that its lawful presence on the property, pursuant to an oral partnership agreement with Landers, allowed ATC to conduct its charitable operations on the property, free of charge, and that, in reliance upon the oral agreement, ATC had made improvementsto the property worth $100,000. ATC filed a counterclaim and third-party complaint, alleging specific performance, detrimental reliance, promissory estoppel, fraud, abuse of process, and breach of contract. Landers answered the counterclaim and third-party complaint. On April 19, 2013, Landers filed a motion for summary judgment, attaching excerpts from Richard Anderson's deposition. ATC did not timely respond to the motion, nor did it appear at the hearing on May 22, 2013. At the conclusion of the hearing on the summary-judgment motion, the circuit court orally granted the motion for summary judgment, issued a writ of possession, and dismissed all of ATC's counterclaims and third-party claims with prejudice. On May 30, 2013, the circuit court formally entered a summary-judgment order memorializing its findings at the hearing. Landers requested attorney's fees, but its motion was denied.

ATC sought review in the court of appeals, which affirmed in part and reversed and remanded in part. Landers petitioned this court for review of the court of appeals's decision, and we granted Landers's petition. When we grant a petition for review, we consider the appeal as though it had been originally filed in this court. Bohannon v. Robinson, 2014 Ark. 458, 447 S.W.3d 585.

II. Summary Judgment

ATC now appeals the circuit court's grant of summary judgment. Landers cross-appeals the circuit court's denial of its request for attorney's fees and expenses.

The law is well settled regarding the standard of review used by this court in reviewing a grant of summary judgment. Fed. Nat'l Mortg. Ass'n v. Taylor, 2015 Ark. 78, 455 S.W.3d811. A circuit court will grant summary judgment only when it is apparent that no genuine issues of material fact exist requiring litigation and that the moving party is entitled to judgment as a matter of law. See id. The burden of proof shifts to the opposing party once the moving party establishes a prima facie entitlement to summary judgment, and the opposing party must demonstrate the existence of a material issue of fact. See id. After reviewing the undisputed facts, the circuit court should deny summary judgment if, under the evidence, reasonable minds might reach different conclusions from the same undisputed facts. See id.

On appeal, this court determines if summary judgment was appropriate based on whether the evidentiary items presented by the moving party leave a material question of fact unanswered. Repking v. Lokey, 2010 Ark. 356, 377 S.W.3d 211. This court views the evidence in the light most favorable to the party against whom the motion was filed, resolving all doubts and inferences against the moving party. See id. This review is not limited to the pleadings but also includes the affidavits and other documents filed by the parties. See id.

A. Unlawful Detainer

For its first point on appeal, ATC argues that the circuit court erred in granting summary judgment on the issue of unlawful detainer. Specifically, ATC asserts that, although Landers filed an unlawful-detainer action, it remained lawfully on the Landers property pursuant to a license, instead of a lease or other possessory interest, granted in the oral partnership agreement.

The unlawful-detainer statute, found at Arkansas Code Annotated section 18-60-304(Supp. 2013), provides as follows:

A person shall be guilty of an unlawful detainer within the meaning of this subchapter if the person shall, willfully and without right:

. . .

(2) Peaceably and lawfully obtain possession of any such property [lands, tenements, or possessions] and hold it willfully and unlawfully after demand made in writing for the delivery or surrender of possession thereof by the person having the right to possession, his or her agent or attorney[.]

Unlawful detainer is founded on a breach of contract. McGuire v. Cook, 13 Ark. 448 (1853).

With regard to the issue of a partnership, we have stated that a partnership is the association of two or more persons who carry on as co-owners a business for profit. Courtney v. Courtney, 296 Ark. 91, 752 S.W.2d 40 (1988). We have stated that a partnership does not exist when there is no proof of a partnership name, a method to divide profits or losses, or any other indicia of a partnership. See id.

ATC relied on Ultracuts Ltd. v. Wal-Mart Stores, Inc., 70 Ark. App. 169, 16 S.W.3d 265 (2000), in its amended answer and in its brief in support of its objection to the entry of summary judgment, arguing that a lease is not an estate in land and that a genuine issue of material fact remained to be decided on the lease-versus-license issue. This court reversed Ultracuts, 70 Ark. App. 169, 16 S.W.3d 265, affirming the circuit court's grant of summary judgment on the license-agreement, breach-of-contract claim and holding that a prior oral licensing agreement merged into and was superseded by a written agreement. Ultracuts, Ltd. v. Wal-Mart Stores, Inc., 343 Ark. 224, 33 S.W.3d 128 (2000). Thus, ATC's reliance on Ultracuts on this issue is misplaced because this court overruled Ultracuts, 70 Ark. App. 169, 16 S.W.3d 265, on this specific issue. More significantly, ATC in this instance failed to meetproof with proof that, in the absence of a written agreement, ATC occupied the Landers property pursuant to a license.

Further, ATC conceded in its answer that it occupied the Landers property pursuant to an oral partnership agreement. However, this partnership with Landers did not have a formal name, a bank account, an accountant, a tax return, any partnership meetings, or a mechanism for governing, voting, or dissolving the business. Thus, under Courtney, 296 Ark. 91, 752 S.W.2d 40, the alleged partnership between ATC and Landers did not exist, and ATC merely occupied the Landers premises at will. See Ark. Code Ann. § 4-59-102(a) (Supp. 2011) (stating that oral leases are at will). For these reasons, we hold that the circuit court properly granted summary judgment on the issue of unlawful detainer.

B. ATC's Counterclaims

For its second point on appeal, ATC argues that the circuit court erred in granting summary judgment because Landers failed to present a prima facie case and that a genuine issue of material fact existed on each of ATC's following counterclaims.

1. Abuse of process

In proving an abuse-of-process claim, ATC needed to establish the following elements: (1) a legal procedure set in motion in proper form, even with probable cause and ultimate success; (2) the procedure is perverted to accomplish an ulterior purpose for which it was not designed; and (3) a willful act is perpetrated in the use of process which is not proper in the regular conduct of the proceeding. S. Ark. Petroleum Co. v. Schiesser, 343 Ark. 492, 36 S.W.3d 317 (2001). The test of abuse of process is whether a judicial process is used to extortor coerce. Routh Wrecker Serv., Inc. v. Washington, 335 Ark. 232, 980 S.W.2d 240 (1998). The key to the tort is the improper use of process after its issuance to accomplish a purpose for which the process was not...

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