First Nat. Bank of Dewitt v. Cruthis, 02-610.
| Decision Date | 13 March 2003 |
| Docket Number | No. 02-610.,02-610. |
| Citation | 100 S.W.3d 703 |
| Parties | FIRST NATIONAL BANK OF DeWITT, v. William Claude "Bill" CRUTHIS, Jr. and Terry Cruthis, d/b/a Cruthis Brothers. |
| Court | Arkansas Supreme Court |
Russell D. Berry and Bradley A. Chambless, DeWitt, for appellant.
T. David Carruth, Clarendon, for appellee.
Appellant, First National Bank of DeWitt ("Bank"), appeals the trial court decision in favor of appellees, William Cruthis and Terry Cruthis, d/b/a Cruthis Brothers, refusing to grant its motion to dismiss based on Rules 12 and 13 of the Arkansas Rules of Civil Procedure. We hold that the action was a compulsory counterclaim and must have been brought as such. Accordingly, we reverse and dismiss.
The Bank financed the Cruthises' farming operations by making loans for the production of crops. The loans were secured by the Cruthises' farm equipment and crops. In October and November of 1995, the Bank made a wheat-production loan to the Cruthises to finance that year's wheat and oat crops. The loan was also secured by the crops.
In March of 1996, the Cruthises discontinued their farming operation and informed the Bank that they had no funds to continue production of the wheat and oat crop that was growing. The Cruthises surrendered the crop to the Bank to complete the harvest. After evaluating the benefits of completing the crop, the Bank decided to complete production.
As the crop approached maturity, the market price of wheat and oats increased and the Cruthises asked the Bank to enter a booking contract in order to secure the higher price. The Bank entered the booking contract with Bunge Corporation ("Bunge") for the sale of 11,000 bushels of wheat. However, on May 21, 1996, the Cruthises told the Bank that the crop should be delivered to Stratton Seed Company ("Stratton") on booking contracts that the Cruthises had entered prior to relinquishing possession, and the Cruthises threatened action for conversion if the crop was delivered to Bunge.
The Bank hired Mike Walton to harvest the wheat. Mr. Walton cut and delivered one trailer load of wheat to Stratton, as requested by the Cruthises and over the Bank's objections. Mr. Walton abandoned his job, and the Cruthises rented machinery to complete production, delivering all the remaining crops to Stratton. The Cruthises disavowed any contract with Bunge, and the Bank terminated the contracts with Bunge. Bunge then paid $5,920.00 to the Bank, pursuant to their contract, to compensate for the drop in the price of wheat.
After the harvest was completed in August of 1996, the Cruthises delivered settlement checks from Stratton payable to the Cruthises, the Bank, and Stratton. In the settlement checks, Stratton allocated rental shares and set prices over the Bank's objection. The Bank did not negotiate these checks. The Bank then filed suit in Arkansas County Chancery Court in May, 1997, against Stratton, the Cruthises, and the Cruthises' parents on the basis of equitable theories for the recovery of property lost in the liquidation of the Cruthises' equipment and crops. In April 1998, the Cruthises and their parents brought this action based on conversion, fraud, tortious interference with a contract, breach of fiduciary duty, slander of title and defamation against the Bank in Monroe County Circuit Court. The Bank responded with a motion to dismiss due to the pendency of the action in the Arkansas County Chancery Court pursuant to Rules 12 and 13 of the Arkansas Rules of Civil Procedure, as well as a general denial asserting its security interest and its rights as a secured party. The trial court denied the motion to dismiss.
The Cruthises' causes of action for conversion, interference with a contractual relationship, and breach of fiduciary duty proceeded to trial. The trial court also ruled as a matter of law that a fiduciary relationship to the Cruthises was imposed upon the Bank. The jury was instructed upon the theories of conversion, tortious interference with a contract, and over the Bank's objection, on breach of fiduciary duty.
The jury returned a verdict of $172,850.00, and the judge entered the judgment on November 13, 2001. This appeal arises from the trial court's denial of appellant's motion to dismiss on the basis of Rules 12 and 13, the trial court's denial of appellant's motion on the sufficiency of the evidence, and the trial court's alleged error in instructing the jury on breach of fiduciary duty.
We first address the questions of whether the claims filed in Arkansas County and Monroe County arise out of the same transaction or occurrences and whether the claims are compulsory counterclaims that should have been brought in Arkansas County in response to the Bank's complaint.
Rule 12(b) of the Arkansas Rules of Civil Procedure states in pertinent part:
Every defense, in law or in fact, to a claim for relief in any pleading, whether a claim, counterclaim, cross-claim or third party claim, shall be asserted in the responsive pleading thereto if one is required, except that the following defenses may, at the option of the pleader, be made by motion: (1) lack of jurisdiction over the subject matter, (2) lack of jurisdiction over the person, (3) improper venue, (4) insufficiency of process, (5) insufficiency of service of process, (6) failure to state facts upon which relief can be granted, (7) failure to join a party under Rule 19, (8) pendency of another action between the same parties arising out the same transaction or occurrence. A motion making any of these defenses shall be made before pleading if a further pleading is permitted. No defense or objection is waived by being joined with one or more other defenses or objections in a responsive pleading or motion. If a pleading sets forth a claim for relief to which the adverse party is not required to serve a responsive pleading, he may assert at the trial any defense in law or fact to that claim for relief.
Id. (emphasis added). We have held that we had no choice but to dismiss the complaint where another case is pending in a different court. Patterson v. Isom, 338 Ark. 234, 992 S.W.2d 792 (1999). Where concurrent jurisdictions are vested in different tribunals, the first exercising jurisdiction rightfully acquires control to the exclusion of, and without the interference of, the other. Id., (citing Tortorich v. Tortorich, 324 Ark. 128, 919 S.W.2d 213 (1996)). When a case is brought in a court of competent...
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