Nobles v. Tumey

• Court: Arkansas Court of Appeals
• Writing for the Court: ROBERT J. GLADWIN
• Citation: Nobles v. Tumey, 2010 Ark. App. 731, 379 S.W.3d 639 (Ark. App. 2010)
• Decision Date: 03 November 2010
• Docket Number: No. CA 09–861.,CA 09–861.
• Parties: Mike NOBLES, Appellant v. Robbyn TUMEY, Appellee.

2010 Ark. App. 731

379 S.W.3d 639

Mike NOBLES, Appellant

v.Robbyn TUMEY, Appellee.

No. CA 09–861.

Court of Appeals of Arkansas.

Nov. 3, 2010.

Rex Wallace Chronister, Fort Smith, and Brian Gene Brooks, Greenbrier, for appellant.

Michael K. Redd, Fort Smith, for appellee.

ROBERT J. GLADWIN, Judge.

[Ark. App. 1]Mike Nobles appeals from the denial of a motion to vacate a judgment that the Sebastian County Circuit Court entered against him in favor of appellee Robbyn Tumey and its denial of his motion to dismiss the lawsuit. We affirm the trial court's refusal to dismiss the action and reverse its decision on the motion to vacate the judgment.

The parties entered into a business venture in June 1998 in which appellee agreed to solicit subcontractors for construction projects, from which the parties would split the profits. By October 1998, appellee had formed the belief that appellant was not paying her according [Ark. App. 2]to the agreement. On October 16, 1998, the parties entered into a “Memorandum of Understanding,” which stated:

A dispute has arisen as to the proper division of profits derived from the joint efforts of the undersigneds. To resolve this dispute and to avoid any disruption of the business, the undersigneds mutually agree and accept the following understandings, the same to be controlling in any distribution of profits accruing from their joint business efforts since June 18th, 1998.

1. Each of the undersigneds shall be entitled to 50% of the gross profits derived from the business subsequent to June 18, 1998. Operating expenses incurred by each shall be deducted from his or her portion of the gross profits. Revenues from the business shall be paid to Mike Nobles for accounting, administration, and distribution.

2. Mike Nobles agrees that accrued gross profits payable to Robbyn Tumey, subsequent to June 18, 1998 and prior to October 15, 1998, have not been paid as contemplated by the parties. Mike Nobles agrees to deliver to James R. Filyaw, attorney for Robbyn Tumey, the sum of $25,000.00, the same to be deposited in his trust account. The sum shall not be disbursed to Robbyn Tumey until it be agreed to by the parties, or it be conclusively established that said sum is payable to Robbyn Tumey as her portion of the gross profits of the business for the period of June 18, 1998 to October 15, 1998. Mike Nobles further agrees to deliver to Robbyn Tumey the sum of $25,000.00 cash. Any amount payable in excess of the amounts deposited or paid shall be paid promptly by Mike Nobles to Robbyn Tumey upon demand.

3. Robbyn Tumey agrees that she will immediately notify all customers of the parties that payments made pursuant to outstanding contracts shall be paid to Mike Nobles. She agrees not to divert such payments hereafter.

4. Robbyn Tumey shall receive without discount or delay on a weekly basis commencing on October 18, 1998, 50% of gross profits realized from the business.

5. Mike Noble will provide to Robbyn Tumey a complete accounting of the books and records maintained for the business for the period from June 18, 1998, through October 16, 1998, no later than November 13, 1998.

6. Profits payable to each party will be disbursed no later than October 26, 1998.

[Ark. App. 3]According to appellee, appellant did not comply with the terms of that agreement. On November 2, 1998, appellee filed a lawsuit against him for breach of contract and requested damages, an accounting, and attorney's fees. Appellee took a non-suit of that action on August 27, 2001. On August 16, 2002, appellee filed this action against appellant and one of his sons, Michael Gabriel Nobles, alleging fraud, conspiracy, and breach of contract. In her complaint, appellee stated that, after repeated requests, appellant had reluctantly given her incomplete financial reports and inadequate payments. She stated that she was unable to determine the exact amount of the money that appellant had diverted.

On December 2, 2002, appellee filed a motion for an extension of time to serve appellant and his son. She stated: “Service has been attempted by Certified Mail without result. It is anticipated that the services of a professional process server will be required.” The same day, the circuit court entered an order granting appellee an additional 120 days to serve appellant and his son. On April 9, 2003, appellee filed another motion for an extension of time to serve appellant and his son. She requested an additional ninety days, stating: “Service has been attempted by Certified Mail and by a professional process server. The Defendant has secreted himself for the purposes of avoiding service. The Plaintiff has retained the services of an investigator to locate and serve the Defendant.” The next day, the court entered an order granting appellee an additional ninety days to serve appellant and his son.

On May 6, 2003, appellant and his son filed a motion to dismiss appellee's complaint. They alleged that appellee had failed to offer any proof to support the facts alleged in her [Ark. App. 4]motion filed on April 9, 2003, which, they asserted, was filed late. They also argued that the three-year statute of limitations applicable to fraud, Arkansas Code Annotated section 16–56–105 (Repl.2005), had expired. Appellee responded that her original motion for extension filed on December 2, 2002, was timely. Robert Hough, one of appellant's attorneys,¹ sent a letter to the circuit judge on October 14, 2003, recognizing that appellee's attorney had asked for an extension of time within the statutorily-allowed period. He stated:

Therefore I will have to abandon this aspect of the Motion to Dismiss. Please allow this letter to stand as any necessary Amendment to the Motion. Michael Gabriel Nobles, and to the extent there are new causes of action pleaded, Mike Nobles, do not abandon the Statute of Limitations issues in that same Motion.

The circuit court denied appellant's motion to dismiss.

In their answer to the complaint, appellant and his son raised the affirmative defenses of statute of limitations and accord and satisfaction. On November 22, 2004, the circuit judge sent the attorneys a letter stating that the case would be dismissed without prejudice for lack of prosecution unless the attorneys informed it to the contrary within fifteen days. Appellee's attorney immediately sent a letter requesting that the case be scheduled for trial. The court then scheduled a jury trial on March 10, 2005.

On January 25, 2005, appellee filed an amended complaint against appellant and Michael Gabriel Nobles, asserting fraud and spoliation of evidence, and alleging that appellant had provided her with incomplete reports of financial information. She stated that she was [Ark. App. 5]unable to determine the amount owed her from appellant because he and his son had conspired to divert the money, and that appellant had deliberately destroyed all the business records associated with the contracts procured by her with the intention of defrauding her. In a motion for continuance filed on February 16, 2005, appellee stated that appellant had testified in his recent deposition that he had disposed of all records relating to this case. The court continued the case until July 28, 2005. Appellee filed another motion for continuance on July 19, 2005. The court granted this motion and stated that the case would be reset upon the request of either party.

On October 31, 2005, appellee filed a second amended complaint for fraud, civil conspiracy, and spoliation of evidence against appellant, Michael Gabriel Nobles, and another son, Christofer Shawn Nobles. Appellee asserted that the statute of limitations should be tolled because appellant had destroyed evidence, prevented discovery, and committed perjury. She stated that he had failed to produce business records and had hidden the involvement of his sons in his scheme to defraud her and to avoid having to provide an accounting. In response, appellant and his sons pled the affirmative defenses of statute of limitations, statute of frauds, novation, and accord and satisfaction.

Appellant's attorney, Stephen Hough, surrendered his law license on September 28, 2006, but did not withdraw as appellant's counsel and did not notify appellant. On April 12, 2007, the court again warned appellee's attorney that the case would be dismissed for lack of prosecution; it did not, however, send this letter to appellant's attorney or to appellant. [Ark. App. 6]Appellee's attorney asked that the case be set for trial. On May 14, 2007, the circuit court sent notice to appellee's attorney and to appellant and his sons that the case was set for jury trial on August 1, 2007. The notice sent to Michael G. Nobles was returned to the court as undeliverable.

Appellee appeared for trial on August 1, 2007, but appellant and his sons did not. The court permitted appellee to testify about the merits of the case. ² She introduced exhibits to support her testimony. On August 1, 2007, the court entered judgment for appellee against appellant and his sons in the amount of $773,055.10. This amount included a punitive damages award of $500,000.

On August 29, 2007, appellant and his sons moved to vacate the allegedly void judgment under Arkansas Rule of Civil Procedure 60 (2007), to prevent a miscarriage of justice, because they had not received notice of the trial. They also stated that:

If allowed to testify, the Defendant, Mr. Mike Nobles, would state that he had ... paid the Plaintiff in full for all commissions and work completed during their business agreement. Additionally, he would testify that any changes in his businesses during the last several years were done purely as a means of helping the business grow. Separate defendants Michael Gabriel Nobles and Christofer Shawn Nobles would testify that they had no involvement in their father's business. Finally, all documents supporting their claims were the file [sic] that was in the possession...