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DLC Properties, LLC v. Carmike Cinemas, Inc.

Court of Appeals of Arkansas, Division I

March 4, 2015

DLC PROPERTIES, LLC d/b/a TWIN LAKES PLAZA, LLC APPELLANT
v.
CARMIKE CINEMAS, INC. and EASTWYNN THEATRES, INC. APPELLEES

APPEAL FROM THE BAXTER COUNTY CIRCUIT COURT [NO. CV-2010-55-4] HONORABLE GORDON WEBB, JUDGE

Grayson & Grayson, P.A., by: Keith L. Grayson and Melanie L. Grayson, for appellant.

Trammell Law Firm, by: William D. Shelton, Jr., and Robert D. Trammell, for appellees.

DAVID M. GLOVER, JUDGE

This appeal returns to the court following our order for rebriefing. DLC Props., LLC v. Carmike Cinemas, Inc., 2014 Ark.App. 684. With the deficiency that necessitated rebriefing cured, we now reach the merits of this appeal.

This lawsuit arose out of a lease agreement that bound DLC Properties, LLC, d/b/a Twin Lakes Plaza, LLC (DLC) and Carmike Cinemas, Inc., and Eastwynn Theatres, Inc. (Carmike). On appeal, DLC argues that the trial court erred by denying its motion for directed verdict on the claims of unlawful conversion and tortious interference with business expectancy. DLC also contends that the trial court erred by denying its motion for new trial because (1) the verdict violated the doctrine of election of remedies, (2) there was insufficient evidence to support a finding of damages on the conversion claim, and (3) there was insufficient evidence to support a finding of damages for the unlawful detainer and entry claim. Carmike cross-appeals the trial court's order denying its motion for attorneys' fees. Because we find that the trial court erred in refusing to grant DLC's motion for directed verdict on conversion, we grant the relief requested by DLC. We reverse and remand this matter for a new trial and dismiss Carmike's cross-appeal.

I. Facts

On July 25, 2008, DLC purchased a shopping mall located in Mountain Home, Arkansas. The mall housed a movie theater that was leased and occupied by Carmike. Carmike's original lease began on August 18, 1977. The lease was for a term of twenty years and included two five-year options to renew. Under these terms, Carmike's lease would have expired in 2008. However, Carmike and the former owner of the mall executed an amendment to the lease in 1994. The 1994 amendment gave Carmike an additional five-year extension on the lease-until December 31, 2013. At the time of the purchase, DLC's owners did not have actual knowledge of the 1994 amendment, and they erroneously believed that Carmike was leasing the theater on a month-to-month basis.

DLC purchased the mall with the understanding that improvements to the premises were necessary. In September 2008, DLC began negotiations with Carmike regarding new lease terms and a remodel of the premises; these negotiations lasted for several months. It was not until the negotiations broke down that DLC learned of the 1994 amendment to Carmike's lease. Additionally, the negotiations revealed that Carmike was not paying the amount of rent required by the 1994 amendment.

On March 1, 2010, DLC locked Carmike out of the movie theater. The lock out lasted two-and-one-half days, and on March 3, 2010, Carmike filed the lawsuit that was the source of the present appeal.

Based upon these facts, Carmike sued DLC under the theories of forcible entry and detainer, tortious interference with business expectancy, conversion of personal property, and breach of contract. Carmike also sought punitive damages. DLC counterclaimed for unlawful detainer and breach of contract.

The case proceeded to jury trial on December 3–6, 2012. At the close of the evidence, DLC moved for a directed verdict on the claims of tortious interference with business expectancy and conversion. The trial court denied the motion, and the case was submitted to the jury. The jury awarded Carmike $3000 for conversion, $5000 for forcible entry, and $40, 000 in punitive damages. The jury also found for Carmike on its claims for breach of contract and tortious interference but declined to award damages for either claim. Additionally, the jury found for DLC on its breach-of-contract claim and agreed that Carmike was not paying the proper amount of rent but further concluded that DLC waived its right to the proper payments. The trial court entered a judgment memorializing the jury's verdict, and DLC filed a timely notice of appeal of the judgment.

Following the entry of the judgment, Carmike petitioned the trial court for attorneys' fees and costs pursuant to Arkansas Code Annotated section 16-22-308 (Repl. 1999). The trial court denied the motion, finding that neither party prevailed on the portion of this lawsuit that involved contract ...


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