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Mountain Pine Timber, Inc. v. Smith

Court of Appeals of Arkansas, Division IV

April 6, 2016

MOUNTAIN PINE TIMBER, INC.; JOE T. BENTON III; RUSSELL A. BENTON; AND SHEILA SNOWDEN, IN HER CAPACITY AS PERSONAL REPRESENTATIVE OF THE ESTATE OF DANNY SNOWDEN, DECEASED, APPELLANTS,
v.
BRUCE SMITH AND JAN SMITH, APPELLEES

APPEAL FROM THE CLEBURNE COUNTY CIRCUIT COURT [NO. CV-2010-210-4] HONORABLE TIM WEAVER, JUDGE.

Morgan Law Firm, P.A., by: M. Edward Morgan, for appellant Sheila Snowden, in her capacity as personal representative of the Estate of Danny H. Snowden, Deceased.

Wright, Lindsey & Jennings LLP, by: Charles T. Coleman, Rodney P. Moore, and Seth R. Jewell, for appellants Joe T. Benton III and Russell A. Benton.

Bowen Law Firm, PLLC, by: Martin W. Bowen; and Gregory D. Taylor, P.A., by: Gregory D. Taylor, for appellees.

LARRY D. VAUGHT, JUDGE.

This appeal follows a Cleburne County Circuit Court's award of attorney's fees, costs, postjudgment interest, and prejudgment interest to Bruce and Jan Smith (the Smiths) in a case involving the conveyance of mineral rights.[1] On appeal, we consider (1) whether the Smiths were the prevailing party and thus entitled to receive an award of attorney's fees and costs; (2) whether the circuit court's award of attorney's fees was excessive; and (3) whether the circuit court properly awarded the Smiths prejudgment interest from the date of the conveyance. We affirm in part and reverse and remand in part.

Because this appeal arises out of the same circuit-court case as the appeal in CV-15-341, we briefly recite the necessary facts. In 1987, Mountain Pine Timber, Inc. (MPT), sold two tracts of land to the Smiths and claimed to convey all rights to the land to them.[2] However, upon the Smiths' attempt to sell the mineral rights to the land to a third party in 2008, they learned that MPT had previously conveyed the mineral rights to the land to another corporation they owned. The Smiths sued MPT and its former shareholders-the Bentons and Sheila Snowden, in her capacity as the personal representative for the estate of Danny Snowden (the Estate of Snowden), for breach of warranty of title. There were three central issues raised during the course of this litigation; namely, whether the statute of limitations barred the Smiths' lawsuit, the proper measure of damages, and whether the former shareholders of MPT could be held personally liable. A jury ultimately awarded the Smiths damages in the amount of $250.22 on their breach-of-warranty claim. This figure represents an award of $1 per acre of land conveyed to the Smiths by MPT.

Following the jury trial, the Smiths petitioned the circuit court for attorney's fees, costs, postjudgment interest, and prejudgment interest from the date of the conveyance. After a hearing on the petition, the circuit court awarded the Smiths $165 in costs, $17, 500 in attorney's fees, 6 percent prejudgment interest from the date of the conveyance, and 10 percent postjudgment interest. Both the Bentons and the Estate of Snowden timely appealed.

I. Issues on Appeal

On appeal, the Bentons and the Estate of Snowden contend that the circuit court's award of attorney's fees, costs, and prejudgment interest to the Smiths was improper because the Smiths were not the prevailing party. Additionally, they claim that the circuit court erred in awarding the Smiths prejudgment interest from the date of the conveyance because (1) the award of prejudgment interest was not authorized by law because the damages were not definitely ascertainable, and (2) prejudgment interest, if authorized, was only recoverable from the date of constructive eviction. An additional argument raised solely by the Bentons is that the award was excessive.

II. The Prevailing Party

A threshold issue in this appeal is whether the Smiths were the prevailing party in this matter. Arkansas Code Annotated section 16-22-308 (Repl. 1999) controls the award of attorney's fees in contract cases and provides that "the prevailing party may be allowed a reasonable attorney fee." "This court has recognized that to be the prevailing party under section 16-22-308, the litigant must be granted some relief on the merits of its claim." Harrill & Sutter, PLLC v. Kosin, 2012 Ark. 385, *10, 424 S.W.3d 272, 278 (citing CJ Bldg. Corp. v. Trac-10, 368 Ark. 654, 249 S.W.3d 793 (2007)). The prevailing party is determined by analyzing each cause of action and its subsequent outcome. Id. Ultimately, the prevailing party is determined by who comes out "on top" at the end of the case. Id.

The Smiths sued for breach of warranty of title and prevailed on their claim. However, the parties disputed whether the Smiths' damages were to be calculated from the date of the conveyance or the date of constructive eviction. The Bentons and the Estate of Snowden contend that they conceded a breach of warranty of title prior to trial, that the only issue litigated was the proper measure of damages, and that they prevailed at trial because they successfully argued that the Smiths' damages were limited to the value of the mineral rights at the time of the conveyance.

We disagree. The parties fiercely contested several issues in this case. The Smiths successfully defended their breach-of-warranty claim against multiple motions to dismiss. Additionally, contrary to their assertion, the Bentons and the Smiths did not admit full liability. Liability was admitted only by MPT. The parties disputed the liability of MPT's former shareholders, and the Smiths successfully held those shareholders liable for breach of warranty of title. Although the Smiths did not receive the full amount of damages they requested, they prevailed on their breach-of-warranty claim against MPT and its former shareholders. We review the circuit court's ...


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