FROM THE GARLAND COUNTY CIRCUIT COURT [NO. 26CV-15-2]
HONORABLE MARCIA R. HEARNSBERGER, JUDGE
Applegate Law Firm, PLLC, by: Ryan J. Applegate, for
Schulze Murphy & Patterson, by: Darryl E. Baker and J.G.
Schulze, for appellee.
PHILLIP T. WHITEAKER, JUDGE
Lara Thompson appeals the decision of the Garland County
Circuit Court awarding appellee Rachel Broussard $7, 111 plus
attorney's fees of $2, 000. Finding no error, we affirm.
was the owner of Summit Gymnastics, a gymnastics studio. She
agreed to sell the business to Broussard. The parties
executed a document entitled "Agreement for the Sale and
Purchase of Assets and Bill of Sale" in October 2014.
Broussard agreed to pay Thompson $48, 000 for the business by
making installments of $1, 500 per month for thirty-six
months. Broussard made a down payment of $4, 500, and
Thompson kept $1, 000 in receivables after the sale was made,
for a total initial payment of $5, 500. In addition, Thompson
applied $345 in salary she owed to Broussard (who had been
employed by the studio), and Broussard made payments on two
loans-one for $152 and the other for $1, 114-that the studio
owed to Diamond Lakes Federal Credit Union.
operated the gymnastics studio for two months-November and
December 2014. The parties began to have disputes early on,
however, and by December, Thompson was threatening to sue
Broussard for breach of contract. Broussard returned
ownership of the studio to Thompson on January 1, 2015.
Thompson nonetheless filed a breach-of-contract suit against
Broussard on January 2, 2015, alleging that Broussard had
failed to make the required monthly payments. Thompson
demanded that Broussard pay her the entire purchase price of
$48, 000. Broussard answered and filed a counterclaim,
alleging that Thompson had failed to disclose that she did
not own 100 percent of the business's assets. Broussard
sought cancellation of the contract and return of the money
she had paid to Thompson.
eventually filed a motion for summary judgment, contending
that the contract between the parties had been rescinded and
that she was therefore entitled to a refund of the amounts
she had paid toward the purchase of the business, totaling
$7, 111. The circuit court agreed with Broussard and granted
summary judgment. The court found that the parties had
rescinded the contract, that Thompson had retaken the
business, and that Broussard had paid Thompson or made
payments on her behalf totaling $7, 111. The court noted,
however, that there was still a dispute as to whether
Thompson was entitled to an offset for any net profits
Broussard might have earned during the two months that she
ran the business.
circuit court later held a hearing on Thompson's request
for an offset. After hearing testimony and taking evidence,
the circuit court concluded that Thompson had not met her
burden of proof that Broussard made a profit for which
Thompson would be entitled to a credit, and it therefore
ordered that Thompson's complaint be dismissed. The court
entered judgment for Broussard in the amount of $7, 111, plus
costs and interest. Additionally, the court awarded Broussard
$2, 000 in attorney's fees. Thompson subsequently filed a
timely notice of appeal.
Thompson's Entitlement to an Offset
first argument on appeal, Thompson argues that the circuit
court erred in finding that she failed to meet her burden of
proof on the issue of an offset. Our standard of review on
appeal in civil bench trials is whether the circuit
court's findings were clearly erroneous or clearly
against a preponderance of the evidence. Patel v.
Patel, 2015 Ark.App. 726, at 2, 479 S.W.3d 580, 582;
Tadlock v. Moncus, 2013 Ark.App. 363, at 3, 428
S.W.3d 526, 529. A finding is clearly erroneous when,
although there is evidence to support it, the reviewing
court, on the entire evidence, is left with a firm conviction
that a mistake has been committed. Patel,
supra. We must give recognition to the circuit
court's superior opportunity to determine the credibility
of witnesses and the weight to be given to their testimony.
S. Bldg. Servs., Inc. v. City of Ft. Smith, 2013
Ark.App. 306, at 6, 427 S.W.3d 763, 766.
addressing the merits of Thompson's argument, we briefly
set out the general law as it relates to rescission. Our
supreme court has stated that rescission is cognizable both
at law and in equity. Maumelle Co. v. Eskola, 315
Ark. 25, 29, 865 S.W.2d 272, 274 (1993). Equitable rescission
is distinct from rescission at law in that equitable
rescission requires the affirmative powers of an equity court
to rescind or undo the contract, whereas in rescission at
law, the court merely grants restitution after the party
seeking it has achieved rescission by his or her own acts.
Phelps v. U.S. Life Credit Life Ins. Co., 336 Ark.
257, 984 S.W.2d 425 (1999); Moreland v. Dodds, 2012
Ark.App. 10, 388 S.W.3d 73.
the parties agree that the agreement for Broussard to
purchase the business from Thompson was legally rescinded
when Broussard returned the venture to Thompson. Thompson
does not appear to dispute that the $7, 111 judgment against
her accurately represents the funds that Broussard expended
during her time as owner of the business. She maintains,
however, that she met her burden of proof ...