APPEAL FROM THE SEBASTIAN COUNTY CIRCUIT COURT, FORT SMITH DISTRICT. NO. CV-2012-34. HONORABLE JAMES O. COX, JUDGE.
Brett D. Watson, Attorney at Law, PLLC, by: Brett D. Watson, for appellant.
Gean, Gean & Gean, by: Roy Gean, III, for appellee.
RITA W. GRUBER, Judge. WALMSLEY and HARRISON, JJ., agree.
RITA W. GRUBER, Judge
Appellant Terry Druyvestein appeals from an order of the Sebastian County Circuit Court granting summary judgment to appellee Roy Gean, Jr. Appellant filed a complaint against appellee alleging fraudulent transfer and also requesting the court to impose a constructive trust on certain funds held by appellee that were acquired from Lois Druyvestein. We hold that there were genuine issues of material fact to be decided on both claims; accordingly, we reverse the circuit court's order and remand for further proceedings.
This case arose out of a dispute over the ownership of a bond account after the death of appellant's uncle, H.J. " Humpy" Druyvestein. Humpy died on February 24, 2007, survived by his wife Lois Druyvestein. It was unclear at Humpy's death whether he intended to leave the bond account at Summit Brokerage to either Lois or appellant. Appellant filed a complaint against Lois in October 2007 seeking a constructive trust over the bond account, which the circuit court dismissed. In an opinion dated June 16, 2010, this court reversed that dismissal, and the circuit court subsequently entered judgment in favor of appellant for an amount in excess of $200,000. Druyvestein v. Summit Brokerage Servs., Inc., 2010 Ark.App. 500, 375 S.W.3d 777. Lois's daughter, Linda Van Divner, appeared in lieu of her mother in that case and also answered postjudgment interrogatories, through which appellant learned that the funds from the bond account in the amount of $208,830.72 had been liquidated. According to a letter from Ms. Van Divner attached to appellant's complaint in this case, Lois's lawyer in the previous case, appellee, received a check for the entire proceeds of the account made out to Lois. He drove to Kansas to have Lois endorse the check; he placed the proceeds in his own account; then he wrote a check to Ms. Van Divner for $105,625.72 and kept the remaining $103,205, presumably for his fee. When Ms. Van Divner asked appellee for a statement for services rendered to explain the amount, appellee never provided one.
On January 11, 2012, appellant filed a complaint against Ms. Van Divner and appellee for the creation of a constructive trust and for relief pursuant to the Arkansas Fraudulent Transfer Act, found in Ark. Code Ann. § 4-59-201 et seq. He filed an amended complaint on February 9, 2012. Appellant alleged that Ms. Van Divner and appellee took control of the entire funds to which he was entitled and requested the court to create a constructive trust over the funds. He alleged that Ms. Van Divner concealed the location of the funds for more than a year and defrauded the court by failing to reveal in requested interrogatories the location of the funds. Appellant also alleged that Ms. Van Divner and appellee transferred the funds to themselves without the knowledge or consent of Lois, the court, or any guardian acting on behalf of Lois.
In addition, appellant requested relief under the Arkansas Fraudulent Transfer Act, claiming that Lois's estate was insolvent, that this fact was known or should have been known to Ms. Van Divner and appellee, that Ms. Van Divner and appellee were aware of appellant's claim to the funds at the time they transferred them to themselves, and that Lois did not have sufficient funds to satisfy the judgment to
appellant upon her death. He claimed that the transfers to Ms. Van Divner and appellee left Lois's estate unable to pay appellant, her creditor. He alleged that, pursuant to Ark. Code Ann. § 4-59-207, the transfers to Ms. Van Divner and appellee were not made for value received and thus were fraudulent under the statute. Finally, he alleged that appellee's fee was six times the fee that his counsel charged for similar work on the same matter and was not based on value. He concluded by requesting the court to void the transactions.
I. Summary Judgment
On July 20, 2012, appellee filed a motion for summary judgment, alleging that appellant had no standing to question the payment of an attorney's fee from Lois to him. He asserted that he had no direct relationship to appellant and that they lacked privity of contract. He alleged that it was undisputed that appellee " provided legal services for Lois Druyvestein based upon a agreement between Ms. Druyvestein and Mr. Gean and the attorney fee was voluntarily paid by Lois Druyvestein." Although there were no attachments to the motion, appellee did file a brief in support, which contained the following legal arguments: (1) appellant assumed the risk of Lois transferring the money by failing to file a supersedeas bond in the earlier case; (2) appellant could not recover under a valid contractual theory and was not a third-party beneficiary to appellee's fee contract; (3) appellant could not recover under a valid tort-based theory; (4) appellant had no standing under the Declaratory Judgment Act to require appellee to pay his attorney's fee collected from a non-party to the case; (5) ...