Poff v. Brown

• Decision Date: 23 October 2008
• Docket Number: No. 08-305.,08-305.
• Citation: 374 Ark. 453,288 S.W.3d 620
• Parties: John L. POFF, Appellant, v. Harold Ray BROWN, Claude C. Brown and Estate of Thelma Payton, Deceased, Appellees.
• Court: Arkansas Supreme Court

288 S.W.3d 620

374 Ark. 453

John L. POFF, Appellant, v. Harold Ray BROWN, Claude C. Brown and Estate of Thelma Payton, Deceased, Appellees.

No. 08-305.

Supreme Court of Arkansas.

October 23, 2008.

Richard H. Mays Law Firm, by: Richard H. Mays, Heber Springs, for appellant.

Tilley & Thomas, by: R. Bryan Tilley and Albert Thomas, III, Heber Springs, for appellees.

JIM HANNAH, Chief Justice.

John L. Poff appeals a decision of the Cleburne County Circuit Court refusing to order specific performance on a contract between Poff and Harold Ray Brown. Poff asserts that the circuit court erred in considering the equitable defense of unconscionability because it is an affirmative defense that Brown failed to plead in his answer. He further alleges that the circuit court erred in admission of evidence on which the circuit court based its decision that the contract was unconscionable. We affirm the decision of the circuit court based on the clean-hands doctrine. Our jurisdiction is pursuant to Ark. Sup.Ct. R. 1-2(a)(7).

Brown served as the executor to his mother's estate. At the time the estate was being closed, Poff approached Brown with an offer to purchase mineral rights held by the estate. Brown was willing to consider the sale but told Poff he first wished to investigate the value. Poff, a licensed real estate appraiser, agreed to put off further negotiations for several days; however, he then phoned Brown and expressed a need to proceed the next day. Poff went to Brown's home the next day. They met, and Brown signed a contract provided by Poff; however, Brown did not receive a copy of the contract until suit was instituted against him. After signing the contract, Brown became convinced that he had not been paid what the mineral rights were worth, so he called Poff and attempted to rescind the sale. Poff refused and filed the present suit for specific performance.

Poff alleges that unconscionability is an affirmative defense and that the failure to plead it as an affirmative defense is dispositive of this case. Pursuant to Arkansas Rule of Civil Procedure 8(c), an affirmative defense must be set forth in the defendant's responsive pleading. Rule 8 sets out a number of affirmative defenses but does not include unconscionability; however, the list is not exhaustive and includes "any other matter constituting an avoidance or affirmative defense." The basic rule as developed under the common law is that any issue raised by the plaintiff in the complaint may be countered by a general denial in the answer, but any issue raised in the answer for the first time constitutes a new matter that must be specifically set out by the defendant:

Under our system of pleading the only proper way to raise such matters is by way of plea in the answer. The plea corresponds to the common law plea of confession and avoidance. It is an affirmative plea in nature and ... the burden of proof is upon the party asserting the defense.

Southern Farmers Ass'n v. Wyatt, 234 Ark. 649, 653, 353 S.W.2d 531, 533 (1962); see also Clark v. Holt, 16 Ark. 257 (1855) (a plea in confession and avoidance confesses the allegations and seeks to avoid them by raising a new matter). In Smith v. Ryan, 175 Ark. 23, 27-28, 298 S.W. 498, 500 (1927) (quoting Burr W. Jones, Jones Commentaries on Evidence § 486, at pp. 866-67 (2nd ed.1926)), this court stated as follows:

The burden of proving defenses of an affirmative nature, or in confession and avoidance, is upon the defendant. The reason is obvious. In such instances the effect of the pleading is to admit the material allegations of the complaint or declaration, but to seek to avoid the effect thereof by the affirmative allegation of new matter avoiding plaintiff's case. If the defendant pleads a release, in abatement, a discharge in bankruptcy, or other substantive defense, the burden is upon him to prove such affirmative defense and forms no part of the plaintiff's averments.

In the present case, the issue of unconscionability was raised by Brown for the first time at trial. Thus, it is an issue that was not raised by Poff in his complaint and raised a new matter in avoidance. It therefore constituted an affirmative defense. Poff alleges that Brown's failure to plead unconscionability as an affirmative defense in his answer is dispositive of this case. Certainly, the "failure to plead an affirmative defense can result in a waiver and exclusion of the defense from the case." Felton v. Rebsamen Medical Center, 373 Ark. 472, 480, 284 S.W.3d 486, 492 (2008). Further, as in this case where there was no attempt to amend the answer under Arkansas Rules of Civil Procedure 15(c), the failure to plead the affirmative defense may be determinative of the issue. See Slaton v. Slaton, 330 Ark. 287, 956 S.W.2d 150(1997).

Our analysis in this case does not begin or end with determining that unconscionability was an affirmative defense. In filing a complaint for specific performance, Poff chose to proceed in equity rather than seek damages in an action at law. Specific performance is an equitable remedy cognizable only in equity. Hardy Constr. Co. v. Ark. State Highway & Transp. Dep't, 324 Ark. 496, 922 S.W.2d 705 (1996).

Equity will not intervene on behalf of a plaintiff whose conduct in connection with the same matter has been unconscientious or unjust. Wilson v. Brown, 320 Ark. 240, 897 S.W.2d 546 (1995); Batesville Truck Line, Inc. v. Martin, 219 Ark. 603, 243 S.W.2d 729 (1951). Courts of equity are careful to deny any person the advantage of his or her own wrong. Middleton v. Lockhart, 344 Ark. 572, 43 S.W.3d 113 (2001). The party who seeks equity must do equity. Ouachita Trek Dev....