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Mountain Pure, LLC v. Clear Water Holdings, LLC

Court of Appeals of Arkansas, Division II

November 9, 2016

MOUNTAIN PURE, LLC d/b/a MOUNTAIN PURE WATER COMPANY; MOUNTAIN PURE MS, LLC; MPAR, LLC; MPMS, LLC; MOUNTAIN PURE HOLDINGS, LLC; and JOHN B. STACKS APPELLANTS
v.
CLEAR WATER HOLDINGS, LLC, AS SUCCESSOR IN INTEREST TO SIMMONS FIRST NATIONAL BANK APPELLEE

         APPEAL FROM THE PULASKI COUNTY CIRCUIT COURT, SEVENTEENTH DIVISION [NO. 60CV-14-1104] HONORABLE MACKIE M. PIERCE, JUDGE AFFIRMED

          Gibson Law Office, by: Chuck Gibson, for appellants.

          Quattlebaum, Grooms & Tull PLLC, by: Geoffrey B. Treece, for appellee Michael McAfee.

          LARRYD. VAUGHT, Judge

         Appellants, Mountain Pure, LLC d/b/a Mountain Pure Water Company; Mountain Pure MS, LLC; MPAR, LLC; MPMS, LLC; Mountain Pure Holdings, LLC; and John B. Stacks, [1] appeal the Pulaski County Circuit Court's order denying their petition for contempt filed against appellee Clear Water Holdings, LLC, as successor in interest to Simmons First National Bank. We affirm.

         Appellants' petition for contempt arose out of a foreclosure action. Simmons First National Bank initiated the action on March 17, 2014, by filing a complaint to foreclose its mortgages and security interests in certain real and personal property secured by loans Simmons made to appellants. On April 16, 2014, the circuit court entered a consent order appointing Michael McAfee as receiver to preserve the property by managing the Mountain Pure entities.

         On September 22, 2014, Simmons and appellants executed a settlement agreement and mutual release of claims and security interests, which, pertinent to this appeal, included the following provision:

5. Information for Preparation of Mountain Pure Entities Tax Returns.
Within 30 days of the date of this agreement, the Receiver shall in the ordinary course of its business provide a copy of all information from the Mountain Pure MAS-90 computer system in Little Rock, Arkansas to enable the Mountain Pure Entities to prepare and file tax returns for the year 2013 and the partial year 2014 through September, 2014. After the Receivership is concluded, Simmons and the Receiver shall turn over the actual hard drive(s) and computer towers[2] that contain the hard drives to the Stacks Parties. Simmons and the Receiver have no responsibility in this regard other than providing copies of information on the computer system, and the Stacks Parties have no right or claim to any information of the Mountain Pure Entities on the computer system except as set forth in this paragraph.

         A foreclosure decree was entered on September 24, 2014; the Little Rock Mountain Pure plant was sold at a foreclosure sale on October 16, 2014, to Clear Water Holdings, LLC; an order confirming the sale was entered on October 21, 2014; and Clear Water Holdings was subsequently substituted as the proper party plaintiff.

         On January 9, 2015, McAfee delivered one computer tower, the main file server containing the MAS-90 system, to appellant Stacks; however, Stacks claimed that there was no data on the tower. McAfee claimed that his delivery of the computer tower with the MAS-90 system satisfied the terms of the settlement agreement.

         On February 26, 2015, appellants filed a motion for emergency relief to enforce settlement, and later, on March 26, 2015, filed an amended motion. Although Stacks had possession of the computer tower containing the MAS-90 system, he requested that McAfee be ordered to immediately turn over the computer towers containing the hard drives and that nothing be removed from the hard drives and computer systems, particularly the MAS-90 system. Appellants claimed that the data on the hard drives was extremely important to prepare their taxes and to seek funding for continuing businesses.

         A hearing was held on appellants' motion for emergency relief on April 1, 2015. On April 13, 2015, the circuit court entered an order providing, "Immediately upon the conclusion of the Receivership, the Receiver shall turn over and surrender the remaining computer towers and hard drives from the Mountain Pure facility to John Stacks. The Receiver shall not delete or remove any data, software or anything else from said hard drives."

         On May 6, 2015, McAfee delivered a second computer tower to appellants-the terminal server; however, Stacks claimed that data had been deleted from the hard drive. As a result, on May 15, ...


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