Stokes v. Stokes

• Decision Date: 28 April 2016
• Docket Number: No. CV–15–557,CV–15–557
• Citation: 2016 Ark. 182,491 S.W.3d 113
• Parties: George M. Stokes, Sr., Appellant v. Mason F. Stokes, Appellee
• Court: Arkansas Supreme Court

2016 Ark. 182

491 S.W.3d 113

George M. Stokes, Sr., Appellant

v.Mason F. Stokes, Appellee

No. CV–15–557

Supreme Court of Arkansas.

Opinion Delivered April 28, 2016

Bridges, Young, Matthews & Drake PLC, Pine Bluff, by: John P. Talbot, for appellant.

Hashem Law Firm, PLC, Monticello, by: Hani W. Hashem, for appellee.

HOWARD W. BRILL, Chief Justice

This appeal arises from a dispute between a father and his son over the ownership of Chicot County farmland. The father, appellant George M. Stokes, Sr. (“George”), appeals an order of the Chicot County Circuit Court, denying and dismissing George's motion to set aside title in the farmland and awarding attorney's fees to his son, appellee Mason F. Stokes (“Mason”). For reversal, George argues that the circuit court erred (1) by denying his constitutional right to trial by jury, (2) by ruling that a 1999 warranty deed was valid, (3) by ruling that no genuine issue of material fact existed as to a 2009 quitclaim deed, and (4) by awarding attorney's fees to Mason. Pursuant to Arkansas Supreme Court Rule 1–2(d) (2015), this case was transferred from the court of appeals to this court because it involves an issue concerning the interpretation of the Arkansas Constitution. We affirm in part and reverse in part.

I. Facts

In the 1970s, George and his wife, Penelope, acquired farmland in Chicot County. During the 1990s, their son, Mason, requested that some of the farmland be placed in his name. On April 12, 1999, George and his wife transferred ownership of the Chicot County farmland to Mason and George II, Mason's son, as tenants in common by warranty deed. George recorded the deed on September 27, 1999. After executing the warranty deed, Mason and George II appointed George as their power of attorney to transact business on their behalves. On April 13, 2000, George recorded the power of attorney.

In 2007, Mason and George II revoked the power of attorney and recorded their revocations with the Chicot County Circuit Clerk. Subsequently, George became concerned about Mason's personal life, health, and stability. In October 2009, George executed and recorded a quitclaim deed, transferring the disputed farmland in Chicot County back to himself by purporting to act as the power of attorney for Mason and George II.

On November 16, 2010, Mason and George II filed a petition to quiet title to the farmland.¹ Specifically, Mason sought to set aside the 2009 quitclaim deed and to recover damages for conversion, fraud, and negligence. His prayer for relief included immediate injunctive relief, the appointment of a receiver to manage the property, and the recovery of rents and government payments on an unjust-enrichment basis. George filed a counterclaim seeking to set aside the 1999 warranty deed. On August 22, 2012, the circuit court entered an order granting partial summary judgment and found that Mason's power of attorney had been effectively revoked in July 2007; that the 2009 quitclaim deed was void because George had transferred the land to himself based on an ineffective power of attorney; and that the 1999 warranty deed was unambiguous and not subject to the parol-evidence rule.

The circuit court reserved ruling on George's counterclaim and later denied it. In a letter order, the circuit court wrote,

[George] executed a warranty deed to his son and grandson, in what he admitted was an attempt to avoid probate of at least some of his estate and to avoid or evade some possible estate tax. When he did not die [from a stroke] as he contemplated, he wanted to undo it all[,] ... and at the end of the ten years [after executing his warranty deed] he wanted to renege on the transaction through a half bogus and half revoked power of attorney.... [He] has failed to prove any grounds for setting it aside.

The circuit court entered an order, ruling that the 1999 warranty deed was a valid deed and transferred a one-half interest in the farmland to Mason; that George failed to prove any grounds for setting aside the 1999 warranty deed; that his counterclaim was denied and dismissed. The court found that Mason and George each owned an undivided one-half interest in the farmland as tenants in common. The court authorized distribution of one-half of the crop income to Mason. On January 26, 2015, the circuit court entered a final decree ordering distribution of the crop proceeds. George timely filed a notice of appeal.

Mason filed a motion for attorney's fees seeking fees and costs in the amount of $63,021.81 pursuant to Arkansas Code Annotated section 16–22–308 (Repl. 1999). The circuit court found that the fee request was reasonable but that a portion of the fees was caused by Mason's own actions, and as a result, the circuit court reduced the fee request by one-third and awarded Mason $41,972.52. George filed a timely notice of appeal.

II. Law and Equity

For his first point on appeal, George argues that the circuit court impaired his constitutional right to a trial by jury by adjudicating the equitable claims before the legal claims. Specifically, George had filed a demand for jury trial on “all pending legal claims prior to final determination of Plaintiffs' equitable claims.”²

The applicable standard of review is that any claim to a jury trial is reviewed de novo on appeal. First Nat'l Bank of DeWitt v. Cruthis, 360 Ark. 528, 203 S.W.3d 88 (2005). The first Arkansas Constitution of 1836 stated that the right to trial by jury “shall remain inviolate.” The four subsequent constitutions continued that guarantee with the addition of the term, “cases at law.” This court has held that the Arkansas Constitution does not assure the right to a jury trial in all possible instances; rather, it is reserved to those cases where the right to a jury trial existed when the Arkansas Constitution was framed. See Baptist Health v. Murphy, 2010 Ark. 358, 373 S.W.3d 269. The constitutional right to a jury trial does not extend to a case in equity. S. Farm Bur. Cas. Ins. Co. v. Tallant, 362 Ark. 17, 207 S.W.3d 468 (2005). The right to a jury trial extends only to those cases that were subject to trial by jury at the common law. Id. In Arkansas, this court looks to the historical nature of the claim to determine whether a trial by jury is warranted.

Amendment 80 to the Arkansas Constitution merged the chancery and circuit courts. See Cruthis, 360 Ark. 528, 203 S.W.3d 88.³ We have stated that amendment 80 did not alter the jurisdiction of law and equity; it only consolidated jurisdiction in the circuit courts. See id. It did not alter or expand a party's right to trial by jury. See, e.g., Nat'l Bank of Ark. v. River Crossing Partners, 2011 Ark. 475, 385 S.W.3d 754. Our opinions since 2001 have affirmed the historical test by looking to the remedies sought in the complaint. See River Crossing Partners, 2011 Ark. 475, 385 S.W.3d 754 (reversing the circuit court and holding that foreclosure, equitable-lien, and fraudulent-transfer claims should have been submitted to the judge); Ludwig v. Bella Casa, LLC, 2010 Ark. 435, 372 S.W.3d 792 (reversing and remanding a portion of the circuit court's decision to send an equitable claim of nuisance to the jury and to reserve for itself the question of whether to grant an injunction); Baptist Health, 2010 Ark. 358, 373 S.W.3d 269 (holding that the circuit court properly heard equitable matters of declaratory judgment and injunctive relief); In re Estates of McKnight v. Bank of Am., N.A., 372 Ark. 376, 277 S.W.3d 173 (2008) (holding no right to jury trial in probate proceedings); Tallant, 362 Ark. 17, 207 S.W.3d 468 (holding that the equitable principle of subrogation was properly decided by the circuit court); Cruthis, 360 Ark. 528, 203 S.W.3d 88 (holding that the circuit court erred in submitting the issue of an equitable lien to the jury).

Traditionally, setting aside a deed has been an equitable remedy in Arkansas. Wood v. Swift, 244 Ark. 929, 428 S.W.2d 77 (1968). Additionally, an accounting is an equitable remedy. In re Estates of McKnight, 372 Ark. 376, 277 S.W.3d 173. Likewise, injunctive relief and the appointment of a receiver are equitable in nature. In this instance, the circuit court properly disposed of both issues—setting aside the deed and an accounting of the farm expenses—as equitable claims. Therefore, the right to a jury trial did not attach. Thus, we conclude that the circuit court properly adjudicated the claims.

III. Warranty Deed

For his second point on appeal, George argues that the circuit court erred in validating the 1999 warranty deed.

The relevant facts pertaining to George's argument are as follows. The 1999 warranty deed states that consideration was “for ... the sum of Ten Dollars ($10.00) and the job as farm manager for ten (10) years, or until death.” However, George later sought to set aside the 1999 warranty deed by offering evidence of additional consideration that was not contained in the 1999 warranty deed. After considering the evidence, the circuit court granted partial summary judgment:

3. That the warranty deed executed by George M. Stokes, Sr. and Penelope Stokes (now deceased) on April 12, 1999 and recorded on September 27, 1999, transferring the disputed farm land in Chicot County to Mason Stokes and George M. Stokes, II, as tenants in common, is hereby found to be unambiguous, and not subject to parol evidence as to its meaning.

The circuit court also ruled that “the claims of George M. Stokes, Sr., regarding consideration for, and delivery of, the 1999 warranty deed pursuant to his counterclaim” would be determined in a bench trial. Subsequently, the circuit court denied and dismissed George's counterclaim and ruled that the warranty deed was a valid deed.

Because the circuit court disposed of George's counterclaim concerning the 1999 warranty deed after trial, our standard of review on appeal is whether the circuit court's findings were clearly erroneous or clearly against the preponderance of the evidence. Cochran v. Bentley, 369 Ark. 159...