Muccio v. Hunt, CV–15–636

Decision Date21 April 2016
Docket NumberNo. CV–15–636,CV–15–636
Citation490 S.W.3d 310,2016 Ark. 178
PartiesTom Muccio, Mike Muccio, and Next Chapter Resources, LLC, Appellants v. Johnelle Hunt; Phil Phillips; David Schumacher; Trey Trumbo; Johnelle Hunt, LLC; Phil and Judy Phillips Family Limited Partnership, LLLP ; and Big Horn Lodge Financing, LLC, Appellees
CourtArkansas Supreme Court

Knight Law, P.A., Fayetteville, by: K. Vaughn Knight, for appellants.

Shemin Law Firm, PLLC, by: Kenneth R. Shemin, Fayetteville, for appellees.

ROBIN F. WYNNE, Associate Justice

Tom Muccio, Mike Muccio, and Next Chapter Resources, LLC, appeal from an order of the Pulaski County Circuit Court granting summary judgment in favor of appellees Johnelle Hunt, Phil Phillips, David Schumacher, Trey Trumbo, Johnelle Hunt, LLC, Phil and Judy Phillips Family Limited Partnership, LLLP, and Big Horn Lodge Financing, LLC. We affirm.

In 2012, appellants sued appellees in the Pulaski County Circuit Court, alleging causes of action for civil conspiracy, intentional interference with a contractual relationship or business expectancy, fraud and fraudulent inducement, and violation of the Arkansas Deceptive Trade Practices Act (ADTPA). The operative facts, as relayed in the complaint, are as follows. The parties were all members of a company called BioBased, LLC. Appellants controlled 41.81 percent of the company, with Tom Muccio individually controlling 4.85 percent of the company, Mike Muccio individually controlling 10.08 percent of the company, and Next Chapter Resources controlling 26.88 percent of the company. Appellees controlled 56.19 percent of the company.

Appellants allege that appellees, along with other nonparty co-conspirators, conspired to gain control of appellants' interests in BioBased. In September 2008, Tom Muccio, who served as the company's CEO from 2004 to 2008, agreed, at the urging of a majority of the membership, to bring in Walter Smiley to serve as a business consultant. Appellants allege that Smiley was represented by the conspirators as being neutral and objective but was actually brought in to further the conspiracy. In December 2008, a majority of the company membership voted to remove Tom as CEO and replace him with Smiley.

Appellants allege that, at an August 14, 2009 membership meeting, Smiley informed the members that Signature Bank, an institution that was providing BioBased with an operating line of credit that was set to expire in the near future, would bounce BioBased's checks if the company did not declare bankruptcy. Appellants allege that this statement was false, as Amy Sorrell, the company's acting CFO, had made several bank deposits in order to avoid having checks bounce on the Signature account. Smiley also told the membership that Signature would not renew the line of credit and demanded that it be moved to another institution, which claims appellants allege were false. According to appellants, the alleged conspirators were aware that Smiley's statements were false when they were made at the meeting. BioBased's membership voted unanimously in favor of placing the company into Chapter 11 bankruptcy. Appellants contend in the complaint that the alleged conspirators, including appellees, worked together to fraudulently induce them into voting in favor of the bankruptcy. They also contend that they were stripped of their membership interests in the resulting bankruptcy.

Appellants originally sued appellees, along with several other defendants who are not parties to this action, in the Washington County Circuit Court. On August 5, 2011, appellants took a voluntary nonsuit of their claims against appellees. That same day, the Washington County court entered summary judgment in favor of the remaining defendants. In the order granting summary judgment, the Washington County Circuit Court found that the bankruptcy plan that had been approved by management and the bankruptcy court was “proper and approved by seventy-five percent of the membership.”

On March 5, 2015, appellees moved for summary judgment in the Pulaski County action. At a pretrial conference, appellants voluntarily dismissed their claims for intentional interference with a contractual relationship or business expectancy and violation of the ADTPA. The trial court subsequently entered an order granting summary judgment in favor of appellees on the remaining claims. The trial court found that the Washington County court's finding regarding the bankruptcy plan was law of the case. The trial court also found that appellants acknowledged that the only vote taken that required a three-fourths majority was the vote to authorize filing of Chapter 11 bankruptcy and that appellants knew before that vote that the bankruptcy plan would not include them. The trial court granted summary judgment based on law of the case and its determination that appellees were “factually entitled to summary judgment.” This appeal followed.

The law is well settled regarding the standard of review used by this court in reviewing a grant of summary judgment. Brock v. Townsell, 2009 Ark. 224, 309 S.W.3d 179. A trial court will grant summary judgment only when it is apparent that no genuine issues of material fact exist requiring litigation and that the moving party is entitled to judgment as a matter of law. Id. The...

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16 cases
  • Ark. Dev. Fin. Auth. v. Wiley
    • United States
    • Arkansas Supreme Court
    • December 3, 2020
    ...justifiably relied on the representation; and (5) appellees suffered damage as a result of the false representation. Muccio v. Hunt , 2016 Ark. 178, 490 S.W.3d 310 (citing Jewell v. Fletcher , 2010 Ark. 195, 377 S.W.3d 176 ). Appellees did not allege in their complaint that ADFA ever made a......
  • Jenkins v. Mercy Hosp. Rogers
    • United States
    • Arkansas Supreme Court
    • November 12, 2021
    ...relied on the representation; and (5) the plaintiff suffered damage as a result of the false representation. Muccio v. Hunt , 2016 Ark. 178, at 4–5, 490 S.W.3d 310, 312–13. Projections of future events or conduct cannot support a fraud claim as a matter of law. Se. Distrib. Co. v. Miller Br......
  • Franke v. Clinton William Holland Revocable Trust Uad Aug. 9, 2010
    • United States
    • Arkansas Court of Appeals
    • September 1, 2021
    ...issues of material fact exist requiring litigation and that the moving party is entitled to judgment as a matter of law. Muccio v. Hunt , 2016 Ark. 178, 490 S.W.3d 310. The burden shifts to the opposing party once the moving party establishes a prima facie entitlement to summary judgment; t......
  • Jackson v. Harps Food Stores, Inc.
    • United States
    • Arkansas Court of Appeals
    • October 21, 2020
    ...issues of material fact exist requiring litigation and that the moving party is entitled to judgment as a matter of law. Muccio v. Hunt , 2016 Ark. 178, 490 S.W.3d 310. The burden shifts to the opposing party once the moving party establishes a prima facie entitlement to summary judgment; t......
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