LESTER FULMER, ROB BENTLEY, ROBERT BEST, AND CARL CHILSON APPELLANTS
WILLIAM HURT, MICHAEL HOOVER, AND MOBILITY LIFT SYSTEMS, LLC APPELLEES
FROM THE CLEBURNE COUNTY CIRCUIT COURT [NO. 12CV-12-177-4]
HONORABLE TIM WEAVER, JUDGE
Richard Mays Law Firm, PLLC, by: Richard H. Mays, for
Phelps Puryear Mayfield & McNeil, P.A., by: Jeffrey W.
Puryear and Ryan M. Wilson, for appellees.
J. GLADWIN, Judge.
Lester Fulmer, Rob Bentley, Robert Best, and Carl Chilson
appeal the October 8, 2015 order entered by the Cleburne
County Circuit Court granting the motion for summary judgment
filed by appellees William Hurt, Michael Hoover, and Mobility
Lift Systems, LLC ("MLS"). On appeal, appellants
argue that the trial court imposed a higher standard of
misconduct by appellees needed to support piercing the
corporate veil than is required by Arkansas law. This appeal
initially arose from an earlier lawsuit and related
appeals in the Cleburne County
Circuit Court between the plaintiffs/appellants and
Hurt-Hoover Investments, LLC ("HHI") d/b/a MLS, of
which individual defendants/appellees Hurt and Hoover are the
events leading to this particular appeal began with the
signing of an "Interests Purchase and Sale
Agreement" ("Agreement") dated June 19, 2008,
between appellants and HHI. In the Agreement, appellants
agreed to sell, and HHI agreed to purchase, all the interests
of appellants in H2O Lifts and Ramps, LLC ("H2O"),
of which appellants were the sole owners.
agreed to pay appellants $955, 000, with an initial payment
of $400, 000 in cash at closing, and the remaining $550, 000
to be paid by promissory notes from HHI to the respective
appellants as follows: (i) Lester Fulmer, $249, 750; (ii) Rob
Bentley, $194, 250; (iii) Robert Best, $55, 500; and (iv)
Carl Chilson, $55, 500. Each note was to be paid in
thirty-six monthly installments, starting October 1, 2008,
and continuing on the first day of each month thereafter
until September 1, 2011, when the final installments of all
remaining principal were due.
Agreement was drafted by HHI's attorney, Robert Jones, at
the request of Hoover. Hoover specifically directed Jones to
include a right of HHI to offset against appellants'
promissory notes in the Agreement. In addition, Jones
included the procedure that HHI would follow to assert any
were not represented by counsel in the negotiation and
execution of the Agreement, and the terms of the indemnity
provisions therein were not explained to them at closing.
Immediately after the closing on June 19, 2008, HHI assumed
control of the business, but Hoover did not conduct an
inventory of the assets before the closing because there was
a provision in the Agreement to offset any difference that
existed after the sale. Only in September 2008 did HHI
actually take possession of and move the parts and equipment
to Jonesboro. On July 3, 2008, Hoover and Hurt formed a
limited liability corporation named "Lifts,
People-Mobility, LLC, " the name of which was changed to
MLS on September 3, 2008. The acquired assets of H2O were
transferred to MLS, and that new LLC continued to operate the
business under its name.
initial installment payments on the promissory notes to
appellants were due on October 1, 2008. However, when those
payments became due, HHI, through Hoover, notified appellants
by letter that it was claiming offsets against the notes, and
then immediately deducted those offsets without following the
procedure set out in the Agreement. Additional offsets
against subsequent installment payments were similarly
claimed by HHI without notifying appellants or following the
acknowledge that appellants' ownership in H2O was
purchased as a "going business" and that they
assumed the liabilities of H2O as well as its assets.
Notwithstanding, Hoover testified that he did not accept the
current normal business expenses of H2O incurred before
closing. Offsets claimed included H2O's normal business
expenses prior to closing; charges for services ordered by
Hoover after the closing; charges for the value of equipment
the parties had, prior to the sale, agreed was obsolete; and
estimates of future sales that did not develop. Those offsets
collectively amounted to more than the cumulative total of
all the promissory notes.
appellants objected to these offsets, HHI made a partial
payment on one installment of the notes on April 3, 2009.
Fulmer received a check for $135.75; Bentley was paid
$105.58; and Best and Chilson each received $30.16. Those
checks were not cashed or deposited by appellants.
filed suit against HHI d/b/a MLS on August 28, 2012, alleging
breach of contract by appellees. The suit resulted in the
following jury verdicts in favor of appellants: for Fulmer,
$294, 705; for Bentley, $229, 215; for Best, $65, 490; and
for Chilson, $65, 490. A judgment totaling $651, 490,
including interest, was entered on August 22, 2012. A
garnishment served on HHI's bank account in May 2013,
realized $4, 391.44. That is the only sum that has been paid
on the judgment, and Hurt and Hoover have individually paid
nothing on the obligation since that time. HHI, doing
business as ...