Bayird v. Floyd

• Decision Date: 05 November 2009
• Docket Number: No. 08–1099.,08–1099.
• Citation: 2009 Ark. 455,344 S.W.3d 80
• Court: Arkansas Supreme Court
• Parties: John H. BAYIRD, as Administrator for the Estate of Mamie Elliott, Deceased, Appellant,v.William FLOYD; Beverly Enterprises, Inc.; Beverly Health and Rehabilitation Services, Inc.; Beverly Enterprises–Arkansas, Inc. d/b/a Beverly Healthcare–Monticello; XL Insurance, Inc.; and XL Insurance (Bermuda) Ltd., Appellees.

2009 Ark. 455

344 S.W.3d 80

John H. BAYIRD, as Administrator for the Estate of Mamie Elliott, Deceased, Appellant,

v.William FLOYD; Beverly Enterprises, Inc.; Beverly Health and Rehabilitation Services, Inc.; Beverly Enterprises–Arkansas, Inc. d/b/a Beverly Healthcare–Monticello; XL Insurance, Inc.; and XL Insurance (Bermuda) Ltd., Appellees.

No. 08–1099.

Supreme Court of Arkansas.

Oct. 1, 2009.Rehearing Denied Nov. 5, 2009.

David A. Couch, and Brian G. Brooks, Attorney at Law, PLLS, by: Brian G. Brooks, Greenbrier, for appellant.William & Anderson, PLC, Little Rock, by: Jess Askew III and Stephen A. Hester, Little Rock, for appellee.DONALD L. CORBIN, Justice.

Appellant John H. Bayird, as administrator for the estate of his deceased mother, Mamie Elliott, appeals the order of the Drew County Circuit Court granting the motion of Appellee William Floyd to dismiss the complaint against him for failure to state facts upon which relief could be granted. Because the circuit court considered “other pleadings and exhibits” that Appellant had not included in his addendum and brief, we determined that the motion to dismiss had been converted to one for summary judgment and ordered Appellant to file a substituted addendum and brief that included the omitted pleadings and exhibits. Bayird v. Floyd, 2009 Ark. 254, 308 S.W.3d 142 (per curiam). Appellant has filed a substituted brief and addendum, and we now affirm the order of the trial court dismissing Appellee Floyd.

Appellant filed a complaint alleging that his mother suffered emotional trauma and egregious physical injuries including death due to the care and treatment, or lack thereof, while she was a resident of a nursing home in Monticello, Arkansas, known as Beverly Healthcare—Monticello. Appellant filed suit against the nursing home and related corporations for multiple causes of action arising under principles of equity and the common law and various statutory laws of this state. Appellant also filed suit against Appellee Floyd, alleging he was the chief executive officer in charge at all times relevant to Ms. Elliott's injuries. Appellee Floyd filed a motion to dismiss pursuant to Ark. R. Civ. P. 12(b)(6), arguing, among other things, that the complaint failed to state sufficient facts to establish his individual liability.

The complaint, which was later amended three times, asserted multiple causes of action ¹ against multiple defendants.² The order appealed from dismissed the complaint as to only one defendant, Appellee Floyd, and contained a certification pursuant to Ark. R. Civ. P. 54(b) that the order was a final judgment. The circuit court made the Rule 54(b) certification at Appellant's request, over Appellee Floyd's objection. Because we consider compliance with Rule 54(b) to be a requirement of this court's subject-matter jurisdiction, we must first address Appellee Floyd's challenge to the factual findings in the circuit court's Rule 54(b) certification. See Howard v. Dallas Morning News, Inc., 324 Ark. 91, 918 S.W.2d 178 (1996).

This court only reviews final orders. Ark. R.App. P.-Civ. 2(a). For an order to be final and appealable, it must dismiss the parties from the court, discharge them from the action, or conclude their rights to the subject matter in controversy. Quality Ford, Inc. v. Faust, 307 Ark. 371, 820 S.W.2d 61 (1991). It is not enough to dismiss some of the parties; the order must cover all parties and all claims in order to be final and appealable. State Farm Mut. Auto. Ins. Co. v. Thomas, 312 Ark. 429, 850 S.W.2d 4 (1993). However, Rule 54(b) provides that a trial court may direct the entry of final judgment with regard to fewer than all of the claims or parties by an express determination that there is no just reason for delay and by the requisite certification and factual findings. When an appropriate certification is made by the trial court pursuant to Rule 54(b), this court considers the judgment final for purposes of appeal. See id. (citing Arkhola Sand & Gravel Co. v. Hutchinson, 291 Ark. 570, 726 S.W.2d 674 (1987)).

Although this court has previously reviewed a trial court's factual findings with respect to a Rule 54(b) certification, we have done so without expressly stating our standard of review. We take this opportunity to state that a trial court's Rule 54(b) findings and certifications are reviewable for abuse of discretion, with some deference given to the trial court's decision, since that court is the one most likely to be familiar with the claims and the parties in the case. However, as we have previously acknowledged, the requirement of a final judgment is the cornerstone of appellate jurisdiction, therefore even a trial court's strict compliance with Rule 54(b)'s required findings and certifications are not binding upon this court. As this court has stated, merely tracking the language of Rule 54(b) will not suffice; the record must show facts to support the trial court's conclusions. Arkhola, 291 Ark. 570, 726 S.W.2d 674. This is because it is our duty to ensure, sua sponte if necessary, that the limits of our jurisdiction are observed. Thus, “our role on appeal ‘is not to reweigh the equities or reassess the facts but to make sure that the conclusions derived from those weighings and assessments are judicially sound and supported by the record.’ ” Id. (quoting Curtiss–Wright Corp. v. Gen. Elec. Co., 446 U.S. 1, 100 S.Ct. 1460, 64 L.Ed.2d 1 (1980) (discussing Fed.R.Civ.P. 54(b) which is identical to our own rule)).

In this case, the circuit court included the following factual findings in its Rule 54(b) certification. First, the circuit court found that because all claims against Appellee Floyd had been dismissed, the remaining defendants' liability would be determined on legal theories separate and apart from the dismissed defendant, Appellee Floyd. Second, the circuit court found that judicial economy would be served by an immediate appeal because, if appellate review were delayed, reversal of Appellee Floyd's dismissal would likely require duplicative depositions and a largely duplicative second trial with possible inconsistent verdicts. Certification now, found the circuit court, would allow for a single trial against the remaining defendants. Third, the circuit court found that a failure to certify would not ensure that only one appeal would ensue, given the likelihood that the parties would appeal both trials. For these reasons, the circuit court concluded that a compelling, discernable hardship would ensue if the case were not certified for immediate appeal and that there was no just reason for delay of entry of a final judgment. Appellee challenges each of these findings and argues that the contrary of these findings would result from an immediate appeal of his dismissal.

We observe that in support of these findings, the circuit court relied upon, among other cases, Howard, 324 Ark. 91, 918 S.W.2d 178, and First Commercial Trust Co. v. Lorcin Engineering, Inc., 321 Ark. 210, 900 S.W.2d 202 (1995). In both of these cases, this court allowed appeals from orders dismissing fewer than all defendants when doing so would permit the remaining claims and defenses to be presented at a single and timely trial. We cannot say that the circuit court's reliance on these cases was misplaced or that the circuit court failed to make the factual findings necessary to comply with Rule 54(b). Accordingly, we find no error in the circuit court's Rule 54(b) certification, and therefore conclude we have jurisdiction to hear this appeal.

Appellant's first argument for reversal of the summary judgment is that Appellee Floyd should be held personally liable for his corporate philosophy emphasizing profits before care. We are thus required to review the law concerning the personal liability of corporate officers.

This court has stated that when “it can be shown that an individual employed by a corporation is personally involved in the events surrounding an injury, the individual may be sued.” McGraw v. Weeks, 326 Ark. 285, 294, 930 S.W.2d 365, 367 (1996) (citing Cash v. Carter, 312 Ark. 41, 847 S.W.2d 18 (1993)). In McGraw, a farm manager was found liable by a jury for instructing another employee to use a rice herbicide that damaged nearby cotton. This court affirmed the trial court's refusal to grant a directed verdict for the farm manager because there was sufficient evidence to show he was personally involved. There was testimony that the farm manager made the decision to apply the herbicide and instructed another employee to do so. In contrast, this court in Cash affirmed a summary judgment in favor of an individual who was the owner of a parent and related corporations on the basis that there had been no evidence presented that he was directly involved in the events surrounding the injury or that he was acting in any capacity other than a corporate officer when the accident occurred. Hence, this court concluded there was nothing on which to premise individual liability.

As Appellant points out in his brief, both McGraw and Cash were cited with approval in In re Speers, 244 B.R. 142 (Bankr.E.D.Ark.2000), for the proposition that officers and directors of corporations are personally liable to the extent that their tortious acts result in harm to a third party. We also note Appellant's citation to Scott v. Central Arkansas Nursing Centers, Inc., 101 Ark. App. 424, 278 S.W.3d 587 (2008), where the court of appeals, among other cases, cited McGraw in affirming a denial of a directed verdict for a corporate owner and officer based on insufficient evidence connecting his corporate philosophy to the level of care at the specific nursing home there in question.

Before applying these precedents to the merits of Appellant's argument, however, we find it helpful to point out our standard of review when a Rule 12(b)(6) dismissal is converted to summary judgment. As we noted previously, although the circuit...