Jewell v. Fletcher

• Decision Date: 03 June 2010
• Docket Number: No. 09–313.,09–313.
• Citation: 377 S.W.3d 176,2010 Ark. 195
• Court: Arkansas Supreme Court
• Parties: Barry JEWELL, Appellant, v. Scott FLETCHER, Appellee/Cross–Appellant, Debra Worley, as Special Administrator of the Estate of Micheal D. Sims, Cross–Appellant/Cross–Appellee, Keith Moser; Jewell, Moser, Fletcher & Holleman, a Professional Association; JMF Enterprises, Inc., Appellees, John T. Holleman, IV; and Holleman & Associates, P.A., Intervenors/Appellees.

2010 Ark. 195

377 S.W.3d 176

Barry JEWELL, Appellant,

v. Scott FLETCHER, Appellee/Cross–Appellant,Debra Worley, as Special Administrator of the Estate of Micheal D. Sims, Cross–Appellant/Cross–Appellee,Keith Moser; Jewell, Moser, Fletcher & Holleman, a Professional Association; JMF Enterprises, Inc., Appellees,John T. Holleman, IV; and Holleman & Associates, P.A., Intervenors/Appellees.

No. 09–313.

Supreme Court of Arkansas.

April 29, 2010.

Rehearing Denied June 3, 2010.

Shelly Lynn Hogan, Little Rock, for Appellant.

David M. Donovan, Edward Thomas Oglesby, Joel Franklin Hoover, Elizabeth C. Abney, Ashley D. Peoples, Little Rock, for Appellee.

DONALD L. CORBIN, Justice.

This is an appeal from an order of the Pulaski County Circuit Court entered on December 9, 2008, in the course of a judicial-dissolution proceeding. Appellant Barry Jewell appeals that part of the order denying his motion to vacate a judgment entered in favor of his former law partner, Appellee/Cross–Appellant Scott Fletcher. Debra Worley, as Special Administrator of the Estate of Micheal D. Sims,¹ filed a cross-appeal from that part of the order approving the claim filed by Sims in the dissolution action but rejecting his request to order an unwinding of previous distributions in order to satisfy his claim. Fletcher also cross-appeals that part of the order approving Sims's claim, arguing that no proof was submitted to support the claim. Because this is a subsequent appeal, our jurisdiction is pursuant to Ark. Sup.Ct. R. 1–2(a)(7) (2009). As to Jewell, we affirm. As to Sims, we reverse and remand, and we affirm on Fletcher's cross-appeal.

This is the third time that this court has had proceedings stemming from the judicial dissolution of the law firm of Jewell, Moser, Fletcher & Holleman, P.A. (JMFH). The underlying facts that precipitated this lengthy litigation were set forth in detail by this court in Sims v. Fletcher, 368 Ark. 178, 243 S.W.3d 863 (2006), part of which can be summarized as follows:

Jewell, a shareholder in JMFH, filed a complaint seeking judicial dissolution and an accounting of JMFH's assets in Pulaski County Circuit Court on June 19, 2003, alleging that the members of the firm stopped practicing law together on or about August 31, 2002, but continued to collect receivables owed to the firm. Fletcher, also a shareholder at one time, filed a counterclaim against Jewell on July 16, 2003, asserting causes of action for breach of contract, unjust enrichment, breach of fiduciary duty, defamation, intentional destruction of property, fraud, and negligence. Moser, also a shareholder, filed a motion to dismiss Jewell's complaint pursuant to Ark. R. Civ. P. 12(b)(6). In response to Fletcher's counterclaim and Moser's motion to dismiss, Jewell filed a motion for summary judgment, asserting that Moser had lost his license to practice law and was no longer a shareholder in JMFH and that Fletcher was also no longer a shareholder and, thus, neither party had standing to challenge the dissolution. The court entered an order on September 22, 2004, granting Jewell's motion for summary judgment as to the dissolution of JMFH. The trial court subsequently appointed Milas “Butch” Hale to serve as the receiver for JMFH pursuant to Ark.Code Ann. § 4–27–1432 (Repl.2001).

Following entry of the trial court's order with regard to dissolution, Holleman, the fourth shareholder of JMFH, sought to intervene in the proceeding in order to seek salaries and benefits owed to him pursuant to his employment agreement with JMFH. The trial court granted Holleman's motion to intervene. Appellants also sought to intervene in this case in order to assert claims against JMFH, but the trial court determined that their interests would be adequately protected and that it was not appropriate for creditors to intervene in a judicial-dissolution proceeding.

As the dissolution proceeded, the trial court held a hearing on November 8, 2005, to begin adjudicating claims and to take testimony on what assets belonged to the firm, as opposed to individual shareholders. Hale presented the court with a list of claims filed to date and the trial court announced that as long as claims had been filed within the time period established by the receiver, it would allow creditors to amend or supplement claims if needed. The trial court then proceeded to hear testimony and take evidence with regard to what assets belonged to JMFH and what assets belonged to certain individuals, including whether certain fees collected by Holleman after the dissolution proceeding began were fees that belonged to JMFH or to Holleman and Holleman & Associates.

At the conclusion of the hearing, the court instructed the parties, including the creditors, to submit simultaneous briefs on the issues of what assets belong to JMFH and whether, under the receivership statutes, the shareholders had any standing to object to the receiver's recommendation regarding what claims should be accepted....

....

After the parties submitted their briefs, the trial court entered an order on December 29, 2005, finding that the effective date of JMFH's dissolution was July 25, 2002, and issuing orders that Jewell, Fletcher, and Holleman pay certain monies into the court's registry for fees that had been recovered on behalf of JMFH. In addition, the trial court ruled that a default judgment obtained by Sims in Lonoke County was void ab initio because the Lonoke County Circuit Court was divested of jurisdiction once the claim for judicial dissolution was filed in Pulaski County. Sims and the other creditors were given thirty days to file additional evidence supporting their claims against JMFH.

Following the submission of amended claims, the trial court entered an order allowing certain claims sought by Jewell, Fletcher, and Holleman, as well as a claim by creditor Betty Hoyt. Appellants' claims were summarily denied. They filed a joint motion for reconsideration or new trial, and requested the court to issue findings of fact and conclusions of law. The trial court never ruled on either motion, and the motions were subsequently deemed to be denied. No order was ever entered with regard to the causes of action brought by Fletcher in his counterclaim against Jewell.

Id. at 180–82, 243 S.W.3d at 864–65.

Sims and the other creditors appealed the circuit court's order to this court, but we dismissed the appeal for lack of a final order. Sims, 368 Ark. 178, 243 S.W.3d 863. At the time that Sims filed his direct appeal, he also filed a petition for certiorari or, alternatively, prohibition. Sims v. Cir. Ct. of Pulaski County, 368 Ark. 498, 247 S.W.3d 493 (2007). Therein, he requested, among other relief, that this court prohibit the circuit court from voiding the default judgment he obtained in Lonoke County. Sims also moved for a temporary stay to prohibit the circuit court from disbursing any funds held in the court's registry as part of the dissolution proceeding, which this court granted. On January 18, 2007, we denied Sims's request for an extraordinary writ on the basis that he had an adequate remedy available in the nature of a direct appeal. Id. That same day, the circuit court entered an order directing the Pulaski County clerk to disburse the majority of funds held in the court's registry.

The circuit court subsequently held a hearing regarding Fletcher's counterclaim against Jewell and entered an order finding, in relevant part, that Fletcher was entitled to judgment against Jewell for office expenses incurred pursuant to an oral agreement between Fletcher and Jewell, in the principal amount of $49,095.15. This order was entered of record on August 1, 2007.

Once the final order was entered, the parties again appealed to this court. In Sims v. Moser, 373 Ark. 491, 284 S.W.3d 505 (2008), Sims argued that the circuit court erred in voiding the default judgment he had obtained in Lonoke County. Sims and the other appellants, who are no longer a part of this litigation, also argued that they were denied due process when the circuit court denied their claims without a hearing. This court agreed, explaining that the fundamental requirement of due process is the opportunity to be heard at a meaningful time and in a meaningful manner. Id. (citing Mathews v. Eldridge, 424 U.S. 319, 96 S.Ct. 893, 47 L.Ed.2d 18 (1976)). Accordingly, we reversed and remanded the matter so that the claimants could present their claims at a meaningful hearing.² We did not, however, address Sims's request that we order the circuit court to unwind the previous distributions. Doing so would have required us to issue an advisory opinion as Sims's claim had not yet been approved, and this court will not issue advisory opinions. Riceland Foods, Inc. v. Pearson, 2009 Ark. 520, 357 S.W.3d 434.

Following remand, Jewell filed a motion to vacate the August 1, 2007 judgment entered against him in favor of Fletcher. Jewell argued that Fletcher had defrauded the court by testifying that he had never benefitted from any immunity agreements in the course of a federal investigation into Jewell and a pending federal indictment against him. According to Jewell, because their case came down to credibility, Fletcher's perjured testimony rendered the resulting judgment void.

Also on remand, Sims filed a bench memorandum arguing that because his claim was in the form of a judgment, it was not subject to a collateral attack. He further argued that because he was denied due process, he should not be placed at a disadvantage to those claimants who were afforded due process.³ Sims requested that the circuit court approve his claim and order a refund of previously disbursed funds in an amount sufficient to pay that claim.

A hearing was held in circuit court on October 31, 2008. The court entered a written order on December 9, 2008, ruling relevant to this appeal, that: (1) Jewell's motion to vacate was denied; (2) Sims's claim against JMFH was approved in the...