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Florida Oil Investment Group, LLC v. Goodwin & Goodwin, Inc.

Court of Appeals of Arkansas, Division II

April 1, 2015


Editorial Note:

This opinion is uncorrected and subject to revision before publication in the printed official reporter.


Ledbetter, Cogbill, Arnold & Harrison, LLP, by: Ronald D. Harrison and Victor L. Crowell, for appellant.

Smith, Cohen & Horan, PLC, by: Matthew T. Horan, for appellee.

RITA W. GRUBER, Judge. WHITEAKER, J., agrees. BROWN, J., concurs.


Page 324


Florida Oil Investment Group, LLC, appeals from a judgment of the Sebastian County Circuit Court after a bench trial foreclosing the materialmen's lien of Goodwin & Goodwin, Inc., on property owned by Florida Oil. Appellant contends that the circuit court erred in finding appellee's lien valid and enforceable, arguing that appellee failed (1) to name the necessary parties; (2) to establish that it entered into a contract for labor and materials with an owner of the property at the time the labor and materials were provided; and (3) to strictly comply with the statutory requirements by properly identifying to whom the debt was owed and by adequately describing the labor and materials provided. Appellant also contends that the court erred in allowing appellee to include overhead and profits. Finally, appellant argues that the court erred in awarding attorney's fees to appellee. Because we hold that Goodwin & Goodwin did not enter into a contract either with the owner of the property or with a person or entity that had an interest in the property at the time it supplied materials and as required by Ark. Code Ann. § 18-44-101 (Repl. 2003), we reverse the circuit court's judgment foreclosing the alleged lien. We also reverse the award of attorney's fees, which were awarded pursuant to Ark. Code Ann. § 18-44-128 (Supp. 2013).

The facts in this case are complicated due to all of the entities involved. The facts that are relevant to the arguments before us are as follows. Bryan Goodwin, appellee's owner and president, testified that David Northcutt approached him sometime in 2011 while Mr. Goodwin was working on another job and asked if he would be interested in working for him on some property in Sebastian County, which we refer to herein as the Fort Chaffee site. Mr. Northcutt told Mr. Goodwin that Fort Smith Petro Environmental, LLC (" FSP" ) was building a refinery on the property. Mr. Goodwin testified that he thought Mr. Northcutt was a " partner" in FSP and that FSP was the owner or had an ownership interest in the Fort Chaffee site. Mr. Goodwin testified that he did not have a contract with any entity and was involved only with Mr. Northcutt, as FSP's representative; that he was a general contractor; and that he initially agreed to install utilities at the Fort Chaffee site. He testified that he began working at the site in August 2011 and that Mr. Northcutt continued to expand the scope of his work to include roofing, putting up sheet rock, landscaping, plumbing, and laying concrete. He said that Mr. Northcutt never asked him for an estimate of expenses and that he never provided one. Mr. Northcutt, for FSP, periodically paid invoices submitted by appellee. Mr. Goodwin acknowledged that the invoices included overhead of seven percent and a profit margin of ten percent. Appellee continued

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to work on the property until November 18, 2011, when it submitted a final invoice.

Mr. Goodwin admitted that he never contacted the Secretary of State to determine whether Mr. Northcutt had the authority to represent FSP, never " pulled the permits" on the project, and generally just relied on " the good ole boy relationship" in his dealings. He did not learn until he had finished the project that FSP did not actually own the property, which he discovered was owned by the Fort Chaffee Redevelopment Authority (" FCRA" ), an Arkansas public trust.

Appellee filed a materialmen's lien on February 23, 2012, on the Fort Chaffee site, alleging that appellee had sold and delivered to FSP labor and materials and that the amount due and unpaid was $40,000. Appellee served the notice of intent to file lien on the executive director of FCRA and on David Northcutt, as agent for FSP. On March 1, 2013, when the $40,000 debt remained unpaid, appellee filed a ...

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