Jones-Blair Co. v. Hammett
| Decision Date | 30 September 1996 |
| Docket Number | JONES-BLAIR,No. 95-1359,95-1359 |
| Citation | 326 Ark. 74,930 S.W.2d 335 |
| Parties | COMPANY, Appellant, v. Lucy HAMMETT, d/b/a Conway Carpets and Interiors, Appellee. |
| Court | Arkansas Supreme Court |
Jeffrey H. Moore, Little Rock, for appellant.
Charles E. Clawson, Jr., Michael L. Murphy, Conway, for appellee.
Jones-Blair Company appeals from a $39,819.90 judgment entered against it in Faulkner County Circuit Court. It seeks a new trial on the ground that its attorney was allowed to withdraw from the case in violation of ARCP 64(b). We agree that a new trial is warranted and therefore reverse and remand.
This appeal was originally filed in the Arkansas Court of Appeals. See Jones-Blair Co. v. Hammett, 51 Ark.App. 112, 911 S.W.2d 263 (1995). We granted review of the case pursuant to Arkansas Supreme Court Rules 1-2(f)(1) and 1-2(a)(3). Three issues are presented on appeal: 1) whether Jones-Blair may receive a new trial on the ground that its attorney withdrew in violation of ARCP 64(b); 2) whether the trial judge should have granted Jones-Blair's motion to extend time to file its notice of appeal; and 3) whether the evidence is sufficient to support the judgment. We agree with Jones-Blair that it is entitled to a new trial due to the circumstances under which its attorney was allowed to withdraw. We reverse and remand on that ground, making discussion of the other issues unnecessary.
This case has its genesis in a 1982 contract entered into between Jones-Blair, a Texas paint and wall-covering supply company, and Lucy Hammett, doing business as Conway Carpets and Interiors. The business relationship between the parties was, apparently, never a smooth one. In November of 1988, Jones-Blair contacted Faulkner County attorney David Reynolds for the purpose of collecting a $6,779.34 delinquency on Hammett's account. Reynolds filed suit on Jones-Blair's behalf on January 3, 1989. Hammett answered, denying the allegations in the complaint. She also filed a counterclaim in which she alleged Jones-Blair had committed certain accounting errors, had failed to reimburse her for promotional materials, and had tortiously interfered with her customer contracts.
In the course of his representation, Reynolds took Hammett's deposition and forwarded it to Jones-Blair on May 15, 1989. In a letter accompanying the deposition, Reynolds asked Jones-Blair to conduct a review and advise on how to proceed. Five months later, Reynolds received a letter from credit analyst James Holt. Holt said he had inherited the account from the previous credit manager and noticed there was no correspondence in the file regarding the status of the case. He requested an update and a recommendation on how to proceed.
The record is bereft of any further activity in the case for nearly a year. Then, in August of 1990, David Reynolds was appointed circuit/chancery judge for Faulkner County. He filed a motion to withdraw from the case and asked that his law partner, Richard W. Atkinson, be named attorney of record. Atkinson was so named on October 5, 1990, and the case was set for nonjury trial on February 11, 1991. The record gives no indication that Jones-Blair was notified of this trial setting or of Atkinson's entry of appearance.
For reasons not revealed on the court's docket sheet, the February 11, 1991 trial did not take place. In October of 1992, the case was reset for trial on January 27, 1993. Upon learning of the trial setting, Atkinson wrote to Jones-Blair for the first time. His October 22, 1992 letter reads as follows:
This appears to be a case which I inherited from a former law partner, David Reynolds. Please find enclosed a copy of a transfer order and a copy of [Hammett's attorney's] letter informing me that the case has been set for trial on January 27, 1993 at 9:00 a.m.
My file indicates no correspondence with you on this case. I am undertaking at this time a review of the file and a discussion with Judge [David] Reynolds to find out exactly what's going on in this case. Please contact me as soon as possible and let me know how you wish to proceed.
Larry Steele, a credit analyst at Jones-Blair, responded to Atkinson's correspondence by the following letter dated November 10, 1992:
According to our records, we charged off the [Hammett] account in the amount of $7222.14 in 1990.
As for further litigation, we would like to have the particulars in regard to fees, court costs, etc ... Thank you.
After reading the above correspondence, Atkinson feared that Jones-Blair did not understand that Hammett's counterclaim was still active. He composed the following letter, dated December 3, 1992:
I am in receipt of your letter of November 10. I am not sure you are aware of the fact that this is still an active case in Faulkner County Circuit Court. Mrs. Hammett has a counterclaim against your company that is still pending. Even if you dismiss your suit against Mrs. Hammett, she is not willing to dismiss the counterclaim. If you do not authorize me, or retain other counsel and appear on the 27th day of January, the judge will enter a default judgment against Jones-Blair.
My fee is $100 per hour. If I do not hear from you within a reasonably short period of time, I will ask the court for permission to withdraw as attorney of record in this case. Looking forward to hearing from you.
Jones-Blair claims it never received this letter.
On January 27, 1993, the day of trial, Atkinson appeared and asked the court for permission to withdraw. He told the court he had had "sparse and uncooperative communication" with Jones-Blair and that he didn't believe he had actually been authorized to act on Jones-Blair's behalf. He further noted that he had sent a letter to Jones-Blair explaining the need to defend the counterclaim and that "up until yesterday afternoon, they didn't return my phone calls, and I've had no further communication with them, and I would ask for leave to withdraw." The court summarily relieved Atkinson from representation, based on Atkinson's claim that Jones-Blair was uncooperative. Atkinson left the courtroom and a nonjury trial proceeded on Hammett's counterclaim. At the close of the hearing, Hammett was awarded $36,191.99 in damages, plus attorney fees. Judgment was entered of record on January 28, 1993.
Jones-Blair did not learn of the January 28 judgment until it received a letter from Hammett's attorney dated May 14, 1993. At Jones-Blair's request, Atkinson filed a motion to set aside the judgment. The motion recited that Jones-Blair believed the only issue to be tried on January 27 was its original action. The motion was denied on August 6, 1993. Over the next few weeks, Jones-Blair obtained new counsel and filed two motions: a motion for extension of time to file an appeal and a motion to set aside the judgment. In the motion to set aside, Jones-Blair asked for a new trial on the ground that Atkinson's withdrawal from the case violated ARCP 64(b). At a hearing on the motions, Atkinson candidly testified that he took no steps to contact Jones-Blair between December 3, 1992, and January 27, 1993 (despite his earlier implication to the court that he had tried to contact Jones-Blair by phone), that he did not move for a continuance, did not stay for the trial, did not notify Jones-Blair that he had withdrawn, and did not send Jones-Blair a copy of the judgment. He further said that, although he remembered typing the letter of December 3, he had no specific recollection of mailing it. The trial judge denied the motion to set aside and made the following pertinent findings, which we summarize below:
Although there was "some question" whether Jones-Blair received the letter dated December 3, 1992, Jones-Blair was aware of the pending counterclaim.
There were no communications between Jones-Blair and Atkinson other than the letters of October 22, 1992, November 10, 1992, and the letter of December 3, 1992, "which Jones-Blair did not receive."
Considering Jones-Blair's November 10 letter and no response to the December 3 letter, Atkinson was well within his rights to think Jones-Blair did not want him to defend them at trial.
Jones-Blair was negligent in failing to show up for trial and this negligence continued until it became aware of the judgment and took some action to...
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