Nielsen v. Berger-Nielsen

• Decision Date: 14 March 2002
• Docket Number: No. 01-997.,01-997.
• Citation: Nielsen v. Berger-Nielsen, 347 Ark. 996, 69 S.W.3d 414 (Ark. 2002)
• Parties: William Lee NIELSEN, v. Deborah BERGER-NIELSEN and Joe Benson.
• Court: Arkansas Supreme Court

69 S.W.3d 414

347 Ark. 996

William Lee NIELSEN, v. Deborah BERGER-NIELSEN and Joe Benson.

No. 01-997.

Supreme Court of Arkansas.

March 14, 2002.

Harry McDermott, Fayetteville, for appellant.

Taylor Law Firm, by Terry D. Harper and Chris D. Mitchell, Fayetteville, for appellee Deborah Berger-Nielsen.

Benson, Robinson & Wood, P.L.C., by Joe P. Robinson, Fayetteville, for appellee Joe Benson.

JIM HANNAH, Justice.

Appellant William Lee Nielsen ("William") appeals the Washington County Circuit Court's dismissal of his complaints against Appellee Joe Benson and Appellee Deborah Berger-Nielsen ("Deborah").

On February 14, 2000, Deborah filed for divorce from William. Deborah's attorney was Benson. William filed a general answer on March 14, 2000, and then counterclaimed against Deborah on September 11, 2000, seeking the divorce in his favor and for division of the marital property. Deborah filed her answer to the counterclaim on September 20, 2000. Around September 2000, the parties began negotiations for a property settlement in the divorce action. Documents in the record indicate that Benson and William's attorney, Harry McDermott, spoke on the phone on September 12, 2000, regarding the terms of the property settlement, to which Benson followed up by letter on September 15, 2000, laying out the general terms of the settlement agreement. This letter stated:

This confirms our phone call of September 12, 2000 wherein I advised that my client, Deborah Nielsen, had agreed to the terms of your client's settlement proposal in this divorce matter. Mr. Berger is transferring $61,600 to my trust account which will be dispersed upon signature of the Property Settlement Agreement. Mrs. Nielsen will present a title to the `91 Isuzu Trooper at that time. I will provide you a Quitclaim Deed for Bill's signature of the marital residence and the Property Settlement Agreement once drafted, however, I need verification of Bill's income to complete the support clause. Accordingly, please provide me copies of his most recent payroll stubs. Also, please enter an Order of Dismissal of the partition action which you filed against Mr. and Mrs. Berger and Deborah.

On the same day Benson wrote this letter to McDermott, he wrote a letter to the chancery court noting that the parties had reached a settlement resolving the issues and, therefore, the full-day trial set for September 22, 2000, was not needed.

Five days after Benson wrote these letters, he filed a motion on September 20, 2000, to withdraw as Deborah's counsel. In the motion, Benson cited as his reason for withdrawal as "irreconcilable differences between the Plaintiff, Deborah Berger-Nielsen and her attorney, Joe Benson regarding the terms of a proposed property settlement agreement." The trial court granted Benson's motion to withdraw on October 4, 2000.

On November 14, 2000, Attorney Terry Harper entered his appearance as Deborah's attorney. Approximately one month later on December 8, 2000, William filed a motion to compel settlement and for a temporary hearing, claiming that a settlement agreement had been reached, and asking the court to compel action on that settlement. He attached two exhibits to this motion: a written copy of his basic terms of the settlement agreement and Benson's letter to McDermott on September 15, 2000. Deborah responded to this motion on December 18, 2000. The trial court set a hearing on all pending motions for February 7, 2001.

Prior to the hearing, William attempted to subpoena Benson's appearance at the hearing, presumably seeking testimony that an oral property settlement agreement had been reached by the parties. On January 30, 2001, Benson filed a motion on his own behalf to quash the subpoena claiming that the testimony sought by William was protected by attorney-client privilege. The trial court heard the motion to quash on February 5, 2001. At the hearing, the trial court determined that Deborah did not intend to waive the attorney-client privilege; therefore, the court granted Benson's motion to quash the subpoena. An order was entered to this effect on February 13, 2001.

William filed a brief in support of his motion to compel the settlement on February 6, 2001. In this brief, William argued that Arkansas law indicates that an attorney can authorize a settlement for his or her client, and that Benson clearly authorized this settlement by letter and over the phone for his client, Deborah. Following this filing, William filed an amended counterclaim and third-party complaint against Deborah and, for the first time, against Benson as a third-party defendant. He included a claim for breach of contract against Deborah, claiming that she agreed to the property settlement agreement and then withdrew this agreement. He filed his third-party complaint against Benson on a theory of a "breach of an implied promise" to William representing that he had the authority to contractually bind Deborah to the settlement agreement. William concluded his amended pleading by stating:

Wherefore, premise considered, Bill Nielsen, defendant/counterclaimant, prays that the complaint of Deborah Berger-Nielsen be dismissed, he be granted a divorce from the defendant as well as awarded his attorney's fees and court costs, the marital property of the parties be divided by the Court pursuant to the property settlement agreement attached and for all other relief to which he may be entitled including his additional attorney's fees and cost directly caused by the plaintiff's breach of the property settlement agreement.

In the alternative, Bill Nielsen, defendant/counterclaimant, prays that the complaint of Deborah Berger-Nielsen be dismissed, he be granted a divorce from the defendant as well as payment of his attorney's fees and court costs, the marital property of the parties be divided by the Court, and for all other relief to which he may be entitled. Plaintiff further prays for damages in excess of $1,000 against third party defendant Joe Benson as well as for all his attorney's fees and costs resulting from the plaintiff's failure to affirm or agree to the settlement agreement agreed to by third party defendant Joe Benson on her behalf and for all other relief to which he may be entitled.

William attached to this complaint the exhibit of his proposed property settlement agreement and a copy of Benson's September 15, 2000, letter.

On February 21, 2001, Benson filed a motion and supporting brief to dismiss Nielsen's thirdparty complaint, noting that the complaint was not timely filed, that a settlement that deals with real property must be in writing and signed by the parties to be bound according to the statute of frauds, that Benson was not in privity of contract with Deborah or William, and that the third-party complaint fails to state facts upon which relief could be granted. Deborah filed her answer to William's amended counterclaim on February 22, 2001. William filed his response to the motion to dismiss on February 28, 2001, claiming that he amended his complaint to include claims for breach of contract against Deborah, breach of duty against Benson, and that one of them is liable for the failure to honor the proposed settlement agreement.

On March 7, 2001, the trial court held a hearing on Deborah's and Benson's motions to dismiss the third-party complaint against Benson and on William's motion to compel discovery. The court first heard arguments on the motion to dismiss, and concluded that because the property settlement dealt with real property, it had to have been in writing to be binding on the principals as well as on Benson, an agent. Because it was not, there was no contract and, therefore, the third-party complaint was meritless. Following the hearing, William filed a motion for findings of fact and conclusions of law on the dismissal, and set out his claims in a letter to the court filed on March 20, 2001. In that letter, William indicated that he wanted the findings of fact and conclusions of law in writing because he planned to immediately appeal that order, in that he had "nonsuited his amended claim against the plaintiff," presumably meaning he had dismissed his counterclaim against Deborah. The trial court filed its order on March 20, 2001, noting that it had taken into account the "[m]otion, representations of counsel, and other facts and matters appearing before the Court" in deciding to dismiss William's complaint against Benson. Specifically, the court found that William did not have a claim against Benson for breach of an implied contract because the settlement agreement had to be in writing and signed by the parties to that contract because it transferred real property. Furthermore, the court found that the dismissal was pursuant to Ark. R. Civ. P. 12(b)(6) because William pled no fact holding Benson liable for a contract on which he was not in privity with the parties. The court also awarded attorney's fees in the amount of $1,062.50 to Benson's attorney.

Ultimately, William and Deborah reached a property settlement agreement and child-custody and support agreement filed on March 20, 2001. The parties's divorce decree was also filed on March 20, 2001. William indicated at that time that he dismissed his counterclaim against Deborah, thus allowing her to proceed on her original divorce petition.

Although the divorce was finalized on March 20, 2001, the court considered William's second motion to compel answers to interrogatories and for production of documents on March 30, 2001. The court ordered Deborah to produce certain documents by March 23, 2001, (although that was impossible by the date of the order), and ruled that no attorney's fees were due for William's pursuit of this motion. Following this on May 11, 2001, William filed a motion for an extension of time to file an appeal claiming that he did not find out about this order until May 10, 2001, and that too much time had passed to timely file an appeal. He...