Dean Leasing, Inc. v. Van Buren County

• Decision Date: 05 April 1989
• Docket Number: No. CA88-365,CA88-365
• Citation: 27 Ark.App. 134,767 S.W.2d 316
• Parties: DEAN LEASING, INC., Appellant, v. VAN BUREN COUNTY and Bobby Woodard, Appellees.
• Court: Arkansas Court of Appeals

Page 316

767 S.W.2d 316

27 Ark.App. 134

DEAN LEASING, INC., Appellant, v. VAN BUREN COUNTY and Bobby Woodard, Appellees.

No. CA88-365.

Court of Appeals of Arkansas Division I.

April 5, 1989.

Dale W. Finley, Russellville, for appellant.

John C. Aldworth, Marshall, for appellees.

ROGERS, Judge.

Dean Leasing, Inc., appeals a summary judgment entered by the Van Buren County Circuit Court for appellees, Van Buren County and Bobby Woodard, former Van Buren County Judge. On appeal, appellant does not appeal the summary judgment for the county, but argues that the trial judge erred in granting summary judgment to Woodard. We disagree and affirm.

In 1984, Woodard signed a lease-purchase agreement with appellant for a copier and copier stand on behalf of the county. Woodard signed the agreement in his representative capacity as county judge and in his personal capacity as guarantor of the agreement. The total of the installment payments amounted to over $6,000.00, and the county was to make sixty monthly payments. Although the agreement was entitled "Lease Agreement," it made no provision for the return of the equipment to appellant. Appellant does not dispute that the lease was actually a lease purchase agreement. The county never advertised bids for a copy machine before this agreement was entered into, nor did it pass an appropriation ordinance or resolution for the purchase or lease of the equipment. Additionally, no order of the county court was passed or signed authorizing the county judge to enter into this transaction. The county used the equipment for approximately ten months; it then stopped making payments and notified appellant to pick up the equipment.

On April 1, 1986, appellant sued the county and Woodard for the remaining payments due under the contract. Although Woodard was served with process, he did not file an answer or appear. In its answer, the county denied that it entered into a valid agreement and asserted that the agreement was void ab initio because the parties did not comply with state law concerning such transactions. On November 2, 1987, the county moved for summary judgment on the ground that the lease purchase transaction was invalid because the county did not advertise for bids or pass an appropriation ordinance or resolution for the equipment obtained from appellant. In its motion for summary judgment, the county also relied on the fact that the county court did not authorize Woodard to enter into the transaction. The county filed an affidavit of the Van Buren County Clerk in which he stated that no county court order, appropriation ordinance or resolution was prepared and filed regarding the transaction, and that there was no record made of any competitive bidding regarding the transaction.

On July 19, 1988, the circuit judge issued a letter opinion in which he found that the contract was illegal and that the defenses raised by the county were applicable to Woodard. Summary judgment was then entered for the county and Woodard in which the circuit judge found that the lease purchase contract is invalid and unenforceable for the reasons stated in the county's motion for summary judgment and that the issues and defenses raised in the pleadings by the county are applicable to and inure to the benefit of Woodard.

On appeal, appellant does not dispute the circuit judge's finding that the lease purchase agreement is invalid or that the county did not comply with state laws regarding such transactions. Although appellant does not argue that Woodard should have been found in default for failure to file an answer or appear, we will briefly address this question. In this case, the county's answer clearly inures to the benefit of Woodard because the county's defense goes to the merits of the whole case and answers allegations directed at and common to Woodard. See Firestone Tire & Rubber Co. v. Little, 269 Ark. 636, 599 S.W.2d 756 (Ark.App.1980). Here, appellant simply argues that, although the principal obligation between appellant and the county is invalid and unenforceable, Woodard is not relieved of his personal guaranty obligation. We disagree.

Summary judgment is governed by Ark.R.Civ.P. 56, which provides in part that summary judgment may be rendered where the pleadings, depositions, answers to interrogatories and admissions on file, along with supporting affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. Summary judgment is an extreme remedy and should only be allowed when it is clear that there is no issue of fact to be litigated. Johnson v. Stuckey & Speer, Inc., 11 Ark.App. 33, 665 S.W.2d 904 (1984).

As we stated above, there is no dispute that the parties did not comply with Arkansas law regarding such transactions when they entered into this agreement, or that the agreement is invalid with respect to the county. Ark.Code Ann. Section 14-20-106 (1987) [formerly Ark.Stat.Ann. Section 17-416 (Repl.1980) ] provides:

No county court or agent of any county shall make any contract on behalf of the county unless an appropriation has been previously made therefor and is wholly or in part unexpended. In no event shall any county court or agent of any county make any contract in excess of any appropriation made, and the amount of the contract shall be limited to the amount of the appropriation made by the county quorum court.

Ark.Code Ann. Sections 14-22-102 and 14-22-104 (1987) [formerly Ark.Stat.Ann. Sections 17-1601 and 17-1603 (Supp.1985) ] provide that it is unlawful for any county official to make any purchases with county funds in excess of $5,000.00 unless, with certain exceptions not applicable here, prescribed bidding procedures are followed. Ark.Code Ann. Section 14-22-112 (1987) [formerly Ark.Stat.Ann. Section 17-1609 (Repl.1980) ] provides that "[n]o contract shall be awarded or any purchase made until it has been approved by the county court, and no contract shall be binding on any county until the court shall have issued its order of approval."

Generally, a...