Frawley v. Stanley, CA07-21 (Ark. App. 10/31/2007)
Decision Date | 31 October 2007 |
Docket Number | CA07-21 |
Parties | Elizabeth FRAWLEY, Appellant v. STANLEY and Sue Wood, and Laland and Georgia Booth, Appellees. |
Court | Arkansas Court of Appeals |
Elizabeth Frawley sued Stanley and Sue Wood to recover an alleged $50,000.00 debt by foreclosing a mortgage. After Frawley presented her case at trial, the circuit court granted the Woods' motion to dismiss the lawsuit. Frawley appeals the dismissal and argues that the circuit court erred in considering inadmissible parol evidence.
In February 2004, Frawley made a contract with the Woods to establish a bail-bond company. The contract consisted of several documents executed over a two-day period. Frawley loaned the Woods $50,000.00. In a "Promissory Note, Security Agreement," the parties agreed that the Woods would use Frawley's $50,000.00, along with $50,000.00 of their own money, to open "Liz and Stan Bail Bonds, Inc." All this money was for a State-required bond in the form of a certificate of deposit. They agreed that, once the company opened and received its State license, Frawley's $50,000.00 loan would be transformed into a 50% ownership interest in the corporation. The Woods also gave Frawley a mortgage on their home and signed a promissory note attached to that mortgage. In a third contemporaneous document, the parties agreed that Frawley would release her mortgage once two things happened: when she showed half ownership in the corporation at the State Licensing Board, and her name was added to the State-required $100,000.00 CD.
Liz and Stan's Bail Bonds opened as planned and operated for about one year. Then it went out of business and the State took the bond.
Frawley sued the Woods, seeking to foreclose the mortgage and collect on the promissory note. Frawley wanted to recover the $50,000.00, plus interest on the loan. Frawley also sued Laland and Georgia Booth. She alleged that the Booths were necessary parties to the action because they held a first mortgage on the Woods' home. The Booths filed a cross-claim against the Woods, seeking one thing: indemnification if the circuit court found them liable to Frawley. After Frawley presented her case at trial, the circuit court granted the Woods' motion to dismiss.1 Here is the exchange:
[Woods' Attorney]: Your Honor, before we put on testimony, I would move to dismiss on grounds that the Plaintiffs have not made their case.
The Court: Granted. I believe that Ms. Frawley had her interest in the company. She got 50% interest in Liz and Stan, Inc., she got a 50% stock certificate, she operated the business, she knew that's what she got. I think she made a commitment that this property that was security for this initial $50,000[.00] would be returned after the business was incorporated, and she didn't do it.
Frawley first argues that the circuit court erred because she made a prima facie case on her claim, Swink v. Giffin, 333 Ark. 400, 402, 970 S.W.2d 207, 208 (1998), and because the Woods' motion to dismiss was not specific. Viewing the evidence in the light most favorable to Frawley on the merits, we see no error. Woodall v. Chuck Dory Auto Sales, Inc., 347 Ark. 260, 264, 61 S.W.3d 835, 838 (2001).
Frawley contended that she held a mortgage and promissory note signed by the Woods and that the Woods failed to make payments. We agree that the Woods did not repay the note with cash, but that was not the parties' deal. Frawley testified herself out of court by admitting facts that showed the Woods fulfilled the parties' agreement, and thus Frawley had no case. Cf. Early v. Bankers Life and Casualty Co., 959 F.2d 75, 79 (7th Cir. 1992).
On cross-examination, Frawley agreed that she was "going to be a creditor unless [Liz and Stan Bail Bonds, Inc.] got open, at which point [her] interest would then convert to a 50% interest in the company . . .[.]" Frawley admitted that the company opened its doors and operated for about a year. She admitted that she received her 50% ownership interest in the corporation. Frawley also testified that Stan approached her about releasing the mortgage after the business opened. But she never went to the Licensing Board to tell them that she owned half the corporation. Frawley testified that she could not tell the Board about her ownership interest in Liz and Stan Bail Bonds because her bail-bond license had been revoked.
The circuit court dismissed the case based on Frawley's admissions. The court did not, as Frawley asserts, weigh credibility at the motion-to-dismiss stage. Cf. Rymor Builders, Inc. v. Tanglewood Plumbing Co., Inc., __ Ark. App. __, __, __ S.W.3d __, __ (October 10, 2007). The court was entitled to take Frawley at her word and correct to dismiss her case. She testified unequivocally that she got the benefit of the bargain—a 50% ownership interest in the corporation that eventually failed.
Frawley next challenges, as a procedural matter, the Woods' non-specific motion to dismiss. While we agree that the motion was not specific, we hold that no reversible error occurred. As we read the transcript, the circuit court may well have interrupted the Woods' lawyer as he was moving to dismiss. In any event, the circuit court explained in detail its reasons for granting the motion.
The specific-grounds rule insures that the particular ground asserted for a dismissal or a directed verdict is brought to everyone's attention. Ouachita Wilderness Institute, Inc. v. Mergen, 329 Ark. 405, 413-14, 947 S.W.2d 780, 784-85 (1997). Then the other party can respond, the circuit court can rule, and a complete record will be made for appellate review. Here the court's specific, though quick, ruling eliminated any ambiguity about the reason for its decision. Frawley had an opportunity to respond, albeit belatedly. She was present for the Woods' motion and the circuit court's bench ruling. She could have, but did not, argue against it. Nor did she object at that point to the lack of specificity in the Woods' motion. Had she done so, the Woods could have fleshed out their arguments. Frawley therefore waived the no-specificity error that she now asserts. Pearrow v. Feagin, 300 Ark....
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