Thompson v. Potlatch Corp.

• Decision Date: 14 October 1996
• Docket Number: No. 95-386,95-386
• Parties: Larry THOMPSON, et al., Appellants, v. POTLATCH CORPORATION, Appellee.
• Court: Arkansas Supreme Court

Page 355

930 S.W.2d 355

326 Ark. 244

Larry THOMPSON, et al., Appellants, v. POTLATCH CORPORATION, Appellee.

No. 95-386.

Supreme Court of Arkansas.

Oct. 14, 1996.

Bill G. Wells, Warren, David O. Bowden, Little Rock, for Appellants.

Richard L. Roper, Warren, for Appellee.

JESSON, Chief Justice.

Appellant Larry Thompson, an officer of the Pair-O-Geese Hunting Club, claims that the Potlatch Corporation orally agreed to lease the club hunting and trapping rights to certain lands in Bradley County. When Potlatch leased the rights to others, Thompson filed suit for specific performance. The chancellor ruled against the club, finding that no contract had been formed between Pair-O-Geese and Potlatch. We affirm.

Hunting clubs such as Pair-O-Geese have, for many years, hunted the woods of Bradley County on land now owned by Potlatch. In 1989, rumors began to circulate that Potlatch would begin formally leasing the hunting rights to its land. Larry Thompson, as a representative of Pair-O-Geese, visited the Potlatch offices to make an inquiry. He spoke with Curtis Blankenship, a Potlatch land representative. According to Thompson, Blankenship told him the following: that Potlatch was talking about leasing but didn't know when that might happen or how much would be charged to lessees; that Thompson should submit a letter requesting a lease and containing a legal description of the land desired; that Thompson should incorporate the hunting club; and that existing clubs would be given the right of first refusal. Blankenship's account of the meeting differs markedly. According to him, Thompson was told that if he forwarded a letter and a map of the desired area, Potlatch would keep it on file, as it did in the case of many other interested parties. Blankenship denied that he told Thompson to incorporate the club or that existing clubs would have right of first refusal.

In early 1990, Thompson incorporated the club. He sent the incorporation papers to Potlatch, along with the following letter:

This letter is to request that Pair-O-Geese Deer Club have a chance to lease the highlighted areas indicated on the attached map when and if Potlatch decides to lease the land. We have been hunting this area for the past 40 years and would like to continue if you would allow us to do so.

In 1991, Potlatch management gave its approval for a hunting lease program. On November 6, 1992, over 1,000 letters were mailed to sportsmen who had expressed an interest in leasing hunting rights from Potlatch. The letter read, in pertinent part, as follows:

Dear Sportsman:

For several months Potlatch management has been considering the possibility of beginning a hunting lease program. After careful deliberation a decision has been made to initiate a hunting lease program for the Southern Division of Potlatch Corporation in 1993.

As you are probably aware, for several years our Land Agent has been keeping a file of requests from hunters to lease hunting rights for specific areas of interest to them. From this file interested parties are being notified of Potlatch's policy change along with the basics of the program.

1. Leasing priority will be given to individuals and/or clubs that are already utilizing Potlatch's land. Other criteria will also be considered in determining the award of leases.

2. The cost of the program to the Lessee will be $2.50 per acre. Applications will be accepted on any size tract, but no lease shall cost less than $100.

3. Lessee will be required to be incorporated as a not-for-profit corporation under the laws of the State of Arkansas.

4. Lessee will not be required to furnish liability insurance.

5. There will be no subleasing of the leased lands.

Enclosed is a self-addressed postcard which should be completed and mailed back to Potlatch by December 1. This postcard will provide Potlatch with a current mailing address and indicate whether or not you desire to continue with the lease application process. For interested parties a lease application packet containing instructions for continuing with the lease process will be mailed in early 1993. The application packet will provide information but will in no way constitute a promise or commitment for a lease from Potlatch.

After mailing the postcard, you should not contact Potlatch. You have done all that is necessary at this time. (Emphasis in original).

The letter was signed by Potlatch representatives William Pope, Curtis Blankenship, and Gary Thornton.

Over 900 interested parties, including Pair-O-Geese, responded to the letter. Potlatch, in turn, sent a mailing to the interested parties on January 12, 1993. The mailing contained, among other things, a leasing-priority list and a hunting-lease application form. The priority list provided that applications would be ranked with preferences for established deer camps, adjacent landowners, local residents hunting on Potlatch lands, and other interested parties. The hunting-lease application requested general information about the prospective lessee and contained the following language just above the applicant's signature line:

I understand this application provides information and in no way constitutes a promise or commitment from Potlatch Corporation.

In April of 1993, Thompson noticed that other hunting clubs had received their leases but Pair-O-Geese had not. He contacted Gary Thornton at Potlatch and was told that his club would not receive a lease. Through his attorney, he sent a letter to Potlatch expressing a desire to lease the hunting rights to 354.3 acres and enclosing a check for $885.75. Potlatch returned the check.

On September 15, 1993, Thompson and other club members filed suit against Potlatch, William Pope, Curtis Blankenship and Gary Thornton in Bradley County Chancery Court. ¹ The complaint alleged that Thompson's 1989 conversation with Blankenship constituted an offer to lease and that the club's subsequent incorporation constituted acceptance and consideration. No summons was issued for Potlatch. Instead, the complaint contained a certificate of service signed by the plaintiffs' attorney stating he had hand-delivered a copy of the complaint to Richard Roper, an attorney in Warren, Arkansas.

Potlatch responded to the complaint on October 11, 1993, by filing a motion to dismiss for failure to state facts upon which relief could be granted. See ARCP 12(b)(6). The motion was signed by attorney Roper. The appellants filed a motion to strike and a motion for default judgment claiming that Potlatch had missed the twenty-day deadline for responsive pleadings. See ARCP 12(a). The chancellor denied the motions on two grounds: one, no complaint and summons were properly served on Potlatch or a person legally authorized to accept service, and two under the case of Citicorp Industrial Credit, Inc. v. Wal-Mart Stores, Inc., 305 Ark. 530, 809 S.W.2d 815 (1991), Potlatch had thirty days to respond to the complaint. ² The order, which was filed December 6, 1993, also denied Potlatch's Rule 12(b)(6) motion to dismiss. Potlatch thereupon filed its answer on December 16, 1993.

A trial of the matter was held before the chancellor on September 26, 1994. After hearing testimony and reviewing the documentary exhibits, the chancellor requested briefs from the parties. The...