FROM THE CRAIGHEAD COUNTY CIRCUIT COURT, WESTERN DISTRICT
[NO. 16JCV-13-478] HONORABLE PAMELA HONEYCUTT, JUDGE.
& Cone, P.L.C., by: Jim Lyons, for appellants.
Law Firm PLLC, by: Scott M. Strauss and Breana Ott Mackey,
MARK KLAPPENBACH, JUDGE.
appeal concerns the entry of summary judgment in favor of a
real estate agent in the lawsuit filed by her clients
subsequent to their purchase of a home. The house had
settling and other problems that the buyers did not know
about until after the sale had been completed, which the
buyers blamed on the real estate agent. The trial court
granted summary judgment on the tort claims as barred by the
three-year statute of limitations and on the
breach-of-contract claim because the real estate agent was
not a party to the offer-and-acceptance contract between the
buyer and seller. We affirm.
facts are not in material dispute. Appellants David and Dana
Hill (collectively "Hill") bought a house located
at 4208 Nobhill Circle in Jonesboro. Hill was represented by
a buyer's agent, appellees Brooksie Felty Hartness and
Image Realty LLC (collectively "Hartness"). Hill
entered into a real estate contract with the sellers, Martin
and Karen Hesch, on September 6, 2010. The offer and
acceptance set forth deadlines in which the seller was to
provide the seller's disclosure (three business days
after signing the offer and acceptance) and in which the
buyer could exercise the right to obtain a home inspection
(ten business days after acceptance of the offer). The
sellers provided a "Seller Property Disclosure" to
Hartness on or about September 8, which indicated settling
issues, but Hartness did not provide this disclosure to Hill.
Hartness also allegedly told Hill that a home inspection was
not necessary because the house was so new and it would be a
waste of money. The aforementioned deadlines passed in
September. The sale closed on October 15, 2010, after which
Hill discovered settling and other problems.
sued Hartness in a complaint filed on October 11, 2013,
asserting five causes of action: breach of the real estate
contract (the offer and acceptance), violation of the
Deceptive Trade Practices Act,  fraud, breach of fiduciary duty,
and negligence. Hill recited in the complaint that Hartness
was bound by Arkansas Real Estate Commission Regulation 10.6,
which provides that real-estate agents are required to exert
reasonable efforts to ascertain those facts that are material
to the value or desirability of every property so that the
agent will be informed about the property's condition and
thus avoid intentional or negligent misrepresentations to the
public about the property. Hill appended the
offer-and-acceptance contract and the Arkansas Real Estate
Commission Regulations as exhibits to the complaint. Hartness
subsequently moved for summary judgment on all counts,
asserting primarily that there could be no breach of contract
because the real estate agent was not a party to the written
real estate contract between the buyer and seller, that this
case was essentially a professional-negligence claim, and
that the three-year statute of limitations barred the tort
claims. Hartness argued that Hill was trying, unsuccessfully,
to assert that Hartness was a party to this offer and
acceptance to trigger the longer five-year statute of
limitations applicable to a breach of a written contract.
Hill responded that Hartness was a party to the contract as
the buyer's agent and had duties under the contract to
the buyer. Hill argued that, as to the other claims, Hill did
not suffer damages until the sale was closed, so the statute
of limitations should commence in October 2010, not in
September 2010 when Hartness failed in her obligations to her
clients. The trial court ultimately granted the motion for
summary judgment. Hill appeals.
appeal, Hill presents two arguments for reversal: (1) that
the trial court erred in finding that the statute of
limitations had begun to run on the fraud,
breach-of-fiduciary-duty, and negligence claims at any time
before the October 15, 2010 closing; and (2) that the trial
court erred in finding that Hartness was not a party to the
written real estate contract in order to trigger a five-year
statute of limitations.
standard of review is well settled. A motion for summary
judgment should be granted when, in light of the pleadings
and other documents before the circuit court, there is no
genuine issue of material fact, and the moving party is
entitled to a judgment as a matter of law. Ark. R. Civ. P.
56(c) (2017). When reviewing whether a motion for summary
judgment should have been granted, this court determines
whether the evidentiary items presented by the moving party
in support of the motion left a material question of fact
unanswered. Flentje v. First Nat'l Bank of
Wynne, 340 Ark. 563, 11 S.W.3d 531 (2000). The burden of
sustaining a motion for summary judgment is always the
responsibility of the moving party. Id. All proof
submitted must be viewed in a light most favorable to the
party resisting the motion, and any doubts and inferences
must be resolved against the moving party. Bomar v.
Moser, 369 Ark. 123, 251 S.W.3d 234 (2007). Summary
judgment is proper, however, when the statute of limitations
bars an action. Alexander v. Twin City Bank, 322
Ark. 478, 910 S.W.2d 196 (1995); IC Corp. v. Hoover
Treated Wood Prods., Inc., 2011 Ark.App. 589, 385 S.W.3d
880; Tony Smith Trucking v. Woods & Woods, Ltd.,
75 Ark.App. 134, 55 S.W.3d 327 (2001).
first argument focuses on when the three-year statute of
limitations (SOL) began to run, which Hill contends was on or
after the date of closing, October 15, 2010. Hill argues that
it is the actual conveyance of the home that triggers the SOL
because the buyers were not actually damaged until then.
Hartness argues that any alleged wrongful conduct had to have
occurred before closing. Hartness asserts that, at the
latest, any alleged wrongs committed by Hartness occurred by
mid-September 2010, weeks prior to closing. We hold that the
trial court did not err in deeming the "occurrence
rule" to apply and therefore did not err in entering
summary judgment because the complaint was filed after the
expiration of three years from the occurrence of the alleged
Code Annotated section 16-56-105 (Repl. 2005) provides for a
three-year statute-of-limitations period from the accrual of
actions based in contract or liability, including unwritten
breaches of duty. The statutory-limitations period begins to
run when there is a complete and full cause of action and, in
the absence of concealment or wrong, when the negligence
occurs and not when it is discovered. Riggs v.
Thomas, 283 Ark. 148, 671 S.W.2d 756 (1984). The same
statute applies to claims for negligence, fraud, and breach
of fiduciary duty. See Chalmers v. Toyota Motor Sales,
USA, Inc., 326 Ark. 895, 935 S.W.2d 258 (1996); Rice
v. Ragsdale, 104 Ark.App. 364, 292 S.W.3d 856 (2009).
1877, our supreme court has consistently held that the
three-year limitations period applies to legal malpractice
actions, and the accrual is when the negligent act occurs.
Chapman v. Alexander, 307 Ark. 87, 817 S.W.2d 425
(1991) (citing White v. Reagan, 32 Ark. 281 (1877)).
Hill argues that Chapman is instructive in that it
holds that the SOL begins to run for torts upon the
occurrence of the last element essential to the cause of
action. Hill contends that there were no damages in existence
to support a cause of action until the property was conveyed.
To accept this argument, however, Arkansas would have to
abandon the occurrence rule and adopt the so-called
"date of injury" rule. This latter rule provides
that the SOL begins to run, not from the occurrence of the
negligent act, but rather from the time injury results from
the negligent act. Our supreme court has expressly refused to
abrogate the occurrence rule and adopt the "date of
injury" rule, and thus the occurrence rule remains.
See Moix-McNutt v. Brown, 348 Ark. 518, 522, 74
S.W.3d 612, 614 (2002) (holding that although appellant
argued that common sense required that a plaintiff actually
suffer a loss or damages arising out of the negligent act
before a cause of action arose, this was precisely the
argument that the supreme court had repeatedly rejected).
Chapman, our supreme court explained the application
of the commencement of the SOL in legal malpractice
(negligence) actions, stating that it is when the negligent
act occurs and not when it is discovered; it declined to
adopt the "discovery rule" or "date of injury
rule." Chapman, 307 Ark. at 91, 817 S.W.2d at
427. The same rule applies to an action brought against an
abstractor for damages resulting from an omission in the
abstract of title. St. Paul Fire & Marine Ins. Co. v.
Crittenden Abstract & Title Co., 255 Ark. 706, 502
S.W.2d 100 (1973). In Flemens v. Harris, 323 Ark.
421, 427, 915 S.W.2d 685, 689 (1996), the supreme court
applied the occurrence rule when the defendant was an
insurance agent alleged to have committed a negligent act
"in keeping with our traditional rule in professional
malpractice cases." See also Ford's Inc. v.
Russell Brown & Co., 299 Ark. 426, 429, 773 S.W.2d
90, 92-93 (1989) (holding that the occurrence rule applied to
claim against accountant from date erroneous advice given,
not the date a tax-delinquency assessment was made because of
erroneous advice). The Chapman opinion noted that an
abstractor, accountant, architect, attorney, escrow agent,
financial advisor, insurance agent, medical doctor,
stockbroker, or other such person should not be forced to
defend some alleged act of malpractice that occurred many
years ago. Chapman, 307 Ark. at 88-89, 817
S.W.2d at 426. The Chapman opinion went on to adhere
to the traditional "occurrence rule" despite
arguments that this rule was too harsh, noting that such a
change in the law should come from the legislature and not
the courts. Chapman, 307 Ark. at 89-90, 817 S.W.2d
at 426-427; see also Ragar v. Brown, 332 Ark. 214,
964 S.W.2d 372 (1998); Smith v. Elder, 312 Ark. 384,
392, 849 S.W.2d 513, 517 (1993);Tate v. Lab. Corp. of Am.
Holdings, 102 Ark.App. 354, 285 S.W.3d 261 (2008);
Morrow Cash Heating & Air, Inc. v. Jackson, 96
Ark.App. 105, 239 S.W.3d 8 (2006). Thus, all the tort
claims are time-barred as having
"occurred" before closing, and Hill's first
point on appeal holds no merit.
second point on appeal is that the trial court erred in
finding that Hartness did not breach the written real estate
contract. If Hartness was a party to the real estate contract
here, then a five-year SOL would apply to allegations of
breach of this written contract. See Ark. Code Ann.
§ 16-56-111. The trial court rejected Hill's
argument and entered summary judgment on the
breach-of-contract claim. Hill's arguments focus on the
contentions that (1) Hartness signed the contract as the
buyer's agent and representative of the real estate
company; (2)the contract disclosed to the seller that
Hartness was Hill's agent and responsible to Hill; (3)the
contract for the sale of the Nobhill Circle house entitled
Hartness to a commission; and (4) Arkansas Real Estate
Commission Regulations require agents to exert reasonable
efforts to inform their clients of material facts as to the
value or desirability of the subject property, which Hartness
did not do. Hill adds that the "gist" of the
complaint clearly asserted a breach of this written contract,