Born v. Hosto & Buchan, Pllc
Decision Date | 17 June 2010 |
Docket Number | No. 09–971.,09–971. |
Citation | Born v. Hosto & Buchan, Pllc, 2010 Ark. 292, 372 S.W.3d 324 (Ark. 2010) |
Parties | William G. BORN, Sr., Barbara Johnson, Billy W. Nabours, Cindy Miller, and Nathan Scoggins, each Individually and on Behalf of Other Similarly Situated Citizens of Arkansas, Appellants v. HOSTO & BUCHAN, PLLC, Appellee. |
Court | Arkansas Supreme Court |
OPINION TEXT STARTS HERE
Sanford Law Firm, PLLC, by: Josh Sanford, Russellville, for appellants.
Wright, Lindsey & Jennings, by: Kimberly Wood Tucker and Bettina Brownstein, Little Rock, Chester Harris Lauck III, Little Rock, for appellees.
The appellants in this case are people who had lawsuits filed against them in an effort to recover debts allegedly owed by them to certain creditors.These underlying lawsuits were brought by the appellee, Hosto & Buchan, PLLC(“H&B”), a law firm, on behalf of various clients.According to the appellants, H&B filed suit against appellantWilliam G. Born on October 3, 2008, on behalf of Atlantic Credit & Finance 8 (“Atlantic Credit”); appellantBarbara Johnson in March 2007 on behalf of First Community and Collecting Bank, N.A.(“First Community”); appellantBilly W. Nabours on October 31, 2007, on behalf of Capital One Bank (“Capital One”); appellantCindy Miller on October 8, 2008, on behalf of Atlantic Credit; and appellantNathan Scoggins on March 5, 2009, on behalf of Capital One.The appellants will be referred to throughout the opinion as the Born debtors.
On April 13, 2009, the Born debtors filed a Second Amended and Substituted Complaint (“the complaint”) against H&B.In the complaint, they sought to bring a class action against H&B for eight causes of action: (1) violations of the Fair Debt Collection Practices Act (“FDCPA”), codified at 15 U.S.C. § 1962, et seq.;(2) abuse of process; (3) violations of the Arkansas Deceptive Trade Practices Act (“ADTPA”), codified at Ark.Code Ann. § 4–88–101 et seq.;(4) civil conspiracy; (5) fraud and misrepresentation; (6) constructive fraud; (7) negligence; and (8) defamation.1
On May 4, 2009, H&B moved to dismiss the complaint under Arkansas Rule of Civil Procedure 12(b)(6) and filed an answer as well.In its motion, H&B claimed that the complaint should be dismissed without prejudice on multiple grounds.H&B urged, as its overarching defense, that it was immune from suit under Arkansas Code Annotated section 16–22–310, which provides that attorneys “shall not be liable to persons not in privity of contract ... for civil damages resulting from acts, omissions, decisions, or other conduct in connection with professional services performed by the person, partnership, or corporation....”According to H&B, all claims other than actual fraud or intentional torts, which are expressly exempted from section 16–22–310, and claims under the FDCPA were barred by the attorney-immunity statute.
H&B's motion to dismiss also maintained that res judicata and Arkansas Rule of Civil Procedure 12(b)(8) barred the claims because the issues raised by the Born debtors could have, and should have, been raised in the underlying complaints.H&B further urged that the Born debtors' argument that H&B was required to be licensed by the state board of collection agencies was incorrect, even though it conceded that it was deemed a debt collector under the FDCPA.As a final point, H&B asserted that appellant Born did not have standing to bring suit against it because he was not the proper defendant, by his own assertion, in the underlying complaint.
The motion to dismiss made many additional arguments with respect to the specific causes of action raised by the plaintiffs.On May 21, 2009, the Born debtors responded.In their response, they first claimed that H&B was not entitled to immunity under section 16–22–310 because it was not acting as an attorney; that is, it was not rendering professional services.Rather, they contended that H&B operated as a debt collector or as a collection agency, and they answered H&B's specific arguments made in its motion.
The circuit judge held a hearing on H&B's motion on July 27, 2009.After hearing arguments from the attorneys, he announced that he was granting the motion to dismiss based on Rule 12(b)(6).The judge further stated that while the facts in the pleadings, if true, may be grounds for sanctions under Arkansas Rule of Civil Procedure 11, attorneys' fees, and ethics complaints, he concluded that no cause of action against H&B existed for actions taken as the professional representative.The judge acknowledged the Born debtors' allegation that H&B acted not as an attorney but as a debt collector, but he determined that the actions alleged in the complaint were all done in H&B's capacity as a law firm.
In reviewing a circuit judge's decision on a motion to dismiss, we treat the facts alleged in the complaint as true and view them in the light most favorable to the plaintiff.2See, e.g., Dollarway Patrons for Better Schools v. Morehead,2010 Ark. 133, 361 S.W.3d 274.In testing the sufficiency of a complaint on a motion to dismiss, all reasonable inferences must be resolved in favor of the complaint, and the pleadings are to be liberally construed.Id.However, it is also true that our rules require fact pleading, and a complaint must state facts, not mere conclusions, in order to entitle the pleader to relief.Ark. R. Civ. P. 8(a)(1);see alsoDoe v. Weiss,2010 Ark. 150, 2010 WL 1253216.Finally, our standard of review for the granting of a motion to dismiss is whether the circuit judge abused his or her discretion.Doe v. Weiss,2010 Ark. 150, 2010 WL 1253216.
The Born debtors maintain on appeal that section 16–22–310 does not provide immunity to H&B in this case.They make multiple arguments on this point.
According to section 16–22–310,
(a) No person licensed to practice law in Arkansas and no partnership or corporation of Arkansas licensed attorneys or any of its employees, partners, members, officers, or shareholders shall be liable to persons not in privity of contract with the person, partnership, or corporation for civil damages resulting from acts, omissions, decisions, or other conduct in connection with professional services performed by the person, partnership, or corporation, except for:
(1) Acts, omissions, decisions, or conduct that constitutes fraud or intentional misrepresentations....
Ark.Code Ann. § 16–22–310(Supp.2009)(“the immunity statute”).This court has made it clear that the immunity statute protects attorneys from civil liability from those not in privity of contract with them for actions taken during the course of their employment as attorneys.See, e.g., Nielsen v. Berger–Nielsen,347 Ark. 996, 69 S.W.3d 414(2002).We have held that the statute's plain language provides that immunity and limits it to suits based on conduct in connection with professional services rendered by the attorney.See, e.g., id.; seealso Madden v. Aldrich,346 Ark. 405, 58 S.W.3d 342(2001)( );Almand v. Benton County,145 B.R. 608(W.D.Ark.1992)( ).Claims for fraud and intentional misrepresentations are exempted by the express terms of the statute.SeeArk.Code Ann. § 16–22–310(a)(1).
In Fleming v. Cox Law Firm,this court recently held that, while fraud is excepted from the immunity statute, the complaint must include more than “conclusory allegations” because otherwise the attorney would improperly be liable “merely upon the act of filing” an improper pleading.363 Ark. 17, 210 S.W.3d 866(2005).The Flemingcourt expressed its concern that to subject attorneys to liability for negligent filings would undermine the attorney's duty of care to his or her client and would impede attorneys from “zealously represent[ing] their clients without the threat of suit from third parties compromising that representation.”Id. at 22, 210 S.W.3d at 869.
In the instant case, despite the Born debtors' contention that H&B operates, in part, as a debt-collection agency and should not benefit from the immunity statute, the circuit judge properly dismissed the abuse of process, civil conspiracy, constructive fraud, and negligence claims based on section 16–22–310.3The actions the Born debtors maintain give rise to these claims involved H&B's professional legal representation on behalf of its debt-collectionclients.For example, these debtors do not bring their claims based on H&B's actions in collecting debts via its website.Rather, their claims are based on H&B's actions in filing complaintsagainst them.The circuit judge did not err in granting H&B's motion to dismiss on these claims.
The Born debtors, however, go further and raise some individual arguments with respect to their specific causes of action.Yet, it is clear to this court that each of these arguments is an attempt to circumvent the clear intent of the immunity statute.We do note, as the circuit judge observed in the hearing on the motion to dismiss, that the Born debtors could seek sanctions under Arkansas Rule of Civil Procedure 11 or report H&B to the Supreme Court Committee on Professional Conduct, if they believed H&B was practicing law inappropriately.
With regard to their abuse-of-process claim, the Born debtors specifically allege that the immunity statute does not apply because H&B's actions constituted intentional misconduct.They cite this court to Almand v. Benton County,145 B.R. 608(W.D.Ark.1992), in support of this contention.In Almand, the federal district court concluded that section 16–22–310 did not apply to intentional actions and that a claim of abuse of process could lie against an attorney.There, a jury found the attorney for a bank liable for abuse of process where he allegedly made false representations to a trial court and caused an order of delivery to be...
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