Bugg v. Honey
| Decision Date | 20 October 2021 |
| Docket Number | No. CV-20-510,CV-20-510 |
| Citation | 2021 Ark. App. 393,636 S.W.3d 359 |
| Parties | Eldon K. BUGG and Danny C. Bugg, Appellants v. Marc HONEY; Wm. Marshall Hubbard; Cyril Gray ; and Honey Law Firm, P.A., Appellees |
| Court | Arkansas Court of Appeals |
Eldon K. Bugg and Danny C. Bugg, pro se appellants.
Baxter Law Firm, PLLC, by: James R. Baxter, for appellees.
Appellants Eldon K. Bugg and Danny C. Bugg appeal the May 2020 order of the Garland County Circuit Court that granted the motion for summary judgment requested by appellees Marc Honey; Wm. Marshall Hubbard; Cyril Gray; and Honey Law Firm, P.A. We affirm in part and reverse and remand in part.
In 2013, Cyril Gray was living in a residence located in Hot Springs owned by Eldon K. Bugg, a resident of Missouri.1 Gray was allegedly in significant default on the monthly payments owed, so Bugg intended to evict Gray from the premises. In October 2013, Gray filed a Chapter 13 bankruptcy; Gray was represented by the Honey Law Firm and its attorneys, Marc Honey and Wm. Marshall Hubbard. In November 2013, Bugg requested that the bankruptcy court lift the Bankruptcy Code's automatic stay that stops certain legal proceedings against a bankruptcy debtor.
On February 20, 2014, the bankruptcy court conducted a hearing on Bugg's request, during which the parties notified the court that they had settled the matter; the court decided that the stay would terminate as to Gray's alleged interest in the Hot Springs residence. On or about March 8, 2014, Bugg had Gray's truck and personal belongings removed and placed in storage. According to Bugg, he gave Gray ample opportunity to remove his belongings before he (Bugg) removed them, and he gave Gray ample opportunity to recover his personal property but only if Gray paid the storage fees. On March 19, 2014, the bankruptcy court issued a formal order reflecting the events of the February 20, 2014 hearing.2
On April 4, 2014, the law firm, on Gray's behalf, filed a motion for contempt in the bankruptcy proceeding and sought actual and punitive damages, attorney's fees, and costs for Bugg's alleged willful violation of the bankruptcy court's automatic-stay protections afforded to Gray, (hereinafter "the stay case"). On June 10, 2014, the bankruptcy court convened a hearing and awarded Gray compensatory and punitive damages for Bugg's having taken Gray's truck and other personal items; the bankruptcy court also awarded Gray attorney's fees.3 Bugg appealed this order to the bankruptcy appeals court, which affirmed the compensatory-damage award but reversed the punitive-damage award in an opinion handed down in December 2014. See In re Gray , 519 B.R. 767 (B.A.P. 8th Cir. 2014). Bugg appealed again. Bugg prevailed. In April 2016, the Eighth Circuit Court of Appeals issued an opinion, In re Gray , 642 F. Appx. 641 (8th Cir. 2016) in which it found that the automatic stay as to the residence was terminated as a matter of law before the eviction occurred; that Bugg "did not violate the automatic stay by taking possession of the personal effects [of Gray], as the stay had been lifted as to those items because they were divested from the estate, prior to the eviction, by Gray's claimed exemptions for their full value," and that Gray had "suffered no harm" from the truck's removal because a secured creditor had filed an uncontested claim for the balance of the debt secured by the truck. Id. at 643.
In July 2016, Bugg filed a lawsuit against appellees in a Missouri circuit court, alleging counts of malicious prosecution, abuse of process, conspiracy, negligence, "prima facie tort," and fraudulent misrepresentation. The allegations stemmed from the Arkansas bankruptcy proceedings, which Bugg believed were designed to wrongfully obstruct his efforts to evict Gray and to have Gray's personal property removed from Bugg's Hot Springs property.4 In September 2016, the law firm filed in Missouri bankruptcy court a "Notice of Removal of State Court Action to Bankruptcy Court" (hereinafter "the removal case"). In response, Bugg moved to have the Missouri bankruptcy court remand this matter back to Missouri state court.
In November 2016, the Missouri bankruptcy court conducted a telephone conference in which the bankruptcy judge remarked that he "had heard no persuasive argument as to how the Bankruptcy Court could conceivably have jurisdiction over Mr. Bugg's claims against the lawyer-defendants and the law firm" in this case. The bankruptcy judge told the parties that "my only appropriate course is to remand the case" to Missouri state court. After remand, the Missouri circuit court action was dismissed, and the dismissal was affirmed on appeal in late 2017. Bugg v. Honey , 542 S.W.3d 367 (Mo. Ct. App. 2017).
In October 2019, Bugg filed the Garland County Circuit Court lawsuit at issue in the present appeal. Bugg alleged that Gray, Honey, Hubbard, and the Honey Law Firm had committed two counts of malicious prosecution and two counts of abuse of process.5 In summary, Bugg's complaint alleged that the law firm wrongfully used the bankruptcy court's legal processes in the stay case when it was fully aware that Gray had no legal or equitable interest in the Hot Springs residence; appellees knew that Bugg had given Gray ample time to retrieve his personal property both before and after Bugg moved the property; appellees wrongly failed to notify Bugg of the contempt petition; and attorney Hubbard lied to the bankruptcy court to obtain sanctions against Bugg. As to the removal case, Bugg alleged the law firm wrongfully sought to transfer Bugg's Missouri state-court lawsuit to a Missouri bankruptcy court when appellees were aware there was no basis for the Missouri bankruptcy court to have jurisdiction over the Missouri state claims in his complaint; and appellees wrongfully placed a legally burdensome task on Bugg when appellees tried to push the Missouri state case into Missouri federal court to gain a more favorable forum. Bugg contended that, overall, appellees acted with malice and improper and fraudulent motives, made tactical legal decisions without probable cause, wrongfully used the Arkansas and Missouri legal systems in retaliation against Bugg to delay the inevitable consequences of Gray's misdeeds, and wrongfully attempted to financially punish Bugg for his legitimate legal proceedings against Gray. Bugg sought more than $270,000 in damages against appellees. In November 2019, appellees filed an answer to Bugg's complaint asserting general denials.
In December 2019, appellees moved for summary judgment. Appellees attached an affidavit by Honey, who had practiced law in Arkansas for more than thirty years. Honey's affidavit contained statements to support the following assertions:
Bugg responded in resistance to appellees’ motion for summary judgment, providing his own affidavit to support the following assertions: that the Eighth Circuit Court of Appeals had conclusively found that Gray had no interest in the Hot Springs residence; that the Hot Springs residence never became property of the bankruptcy estate; that Gray's personal property was exempt from the automatic-stay provisions of the bankruptcy code; that Gray had abandoned his personal property at the Hot Springs residence; and that no damages resulted in removing Gray's personal property. Bugg noted that Honey swore that he had practiced law more than thirty years but made self-serving, conclusory statements that there was probable cause to file the aforementioned papers on Gray's behalf in the bankruptcy court. Bugg contended that this was necessarily a factual jury question. Bugg added that, although Honey averred that "they" relied on the advice of Missouri counsel in the removal proceedings, none of the other defendants had adopted Honey's affidavit or provided their own affidavit;...
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