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Manuel Bail Bond Co., Inc. v. Hosto & Buchan, PLLC

Court of Appeals of Arkansas, Division II

December 12, 2018



          McCutchen and Sexton, by: Sam Sexton III, for appellant.

          Barber Law Firm PLLC, by: Robert L. Henry III, for appellee.


         Appellant Manuel Bail Bond Co., Inc. (Manuel) appeals from the Pulaski County Circuit Court's order granting the summary-judgment motion of appellee Hosto & Buchan, PLLC (the law firm), which was entered on November 7, 2017. Manuel also appeals from the December 12, 2017 order denying its motion for reconsideration and to vacate, alter, and amend judgment. On appeal, Manuel argues that the circuit court erred in (1) granting summary judgment in favor of the law firm, (2) dismissing Manuel's complaint for an accounting, and (3) granting summary judgment on Manuel's claim for declaratory judgment. We affirm.

         I. Procedural History and Background

          In November 2010, Manuel, which was formerly in the business of writing bail bonds, entered into a debt-collection-service agreement with the law firm, a firm that provides debt collection services. The law firm filed numerous lawsuits on behalf of Manuel and obtained default judgments. Manuel notified the law firm by email that it wished to terminate the services of the law firm on November 12, 2013. The law firm responded by email that it would prepare the files, and it notified Manuel of a $15, 000 balance due the firm for the advancement of court costs by the law firm to file the cases on behalf of Manuel. Manuel never received the judgments collected by the law firm, but the firm assured Manuel that the money collected on was used as a credit toward Manuel's account with the firm.

         On April 23, 2015, the Arkansas Supreme Court decided Earls v. Harvest Credit Management VI-B, LLC, 2015 Ark. 175, 460 S.W.3d 795. Earls involved the law firm as a party. There, the supreme court explained that the summons form the law firm had been using was defective because it incorrectly stated that an incarcerated person in the state had thirty days, instead of sixty days, to file an answer. The law firm had been using the same summons form at issue in Earls in pursuing debts on behalf of Manuel. In a deposition, Bryan Hosto (a partner in the law firm) testified that of 318 judgments obtained in Arkansas on behalf of Manuel he could only exclude eighteen judgments from being affected by the Earls decision. In an affidavit, Hosto stated that the last defective summons used by the law firm was filed on July 25, 2011.

         On November 1, 2015, Manuel filed suit stemming from the law firm's service of voidable summonses on Manuel's behalf. [1] Manuel specifically sued for breach of contract and negligence and sought damages in the amount of the default judgments and for costs. Manuel also demanded an accounting for all amounts expended and received by the law firm. Lastly, Manuel sought declaratory judgment for indemnity for any future claim against it arising from the defective summonses used and void judgments obtained. The law firm answered and following discovery, filed a motion for summary judgment based on statute-of-limitations grounds. The motion explained that the claim against the law firm was based on an allegation that the law firm had filed defective summonses on behalf of Manuel. The law firm argued the suit is untimely because the time in the statute of limitations should have started running from the date the last defective summons was used, which was on July 25, 2011. Manuel argued that the April 23, 2015 holding of Earls should be the proper date. A hearing on the motion was conducted on October 31, 2017.

         On November 7, 2017, the circuit court entered summary judgment in favor of the law firm finding that all of Manuel's claims were barred by the controlling statute of limitations and that there was no tolling of the statute. Manuel filed a timely motion for reconsideration and to vacate, alter, and amend judgment, and it was denied by court order. Manuel then filed a timely notice of appeal.

         II. Standard of Review

         The law is well settled regarding the standard of review used by this court in reviewing a grant of summary judgment. Crockett v. C.A.G. Invs., Inc., 2011 Ark. 208, at 7, 381 S.W.3d 793, 798. A circuit court will grant summary judgment only when it is apparent that no genuine issues of material fact exist requiring litigation and that the moving party is entitled to judgment as a matter of law. Id. The burden of proof shifts to the opposing party once the moving party establishes a prima facie entitlement to summary judgment; the opposing party must demonstrate the existence of a material issue of fact. Id. After reviewing the undisputed facts, the circuit court should deny summary judgment if, under the evidence, reasonable minds might reach different conclusions from the same undisputed facts. Id. On appeal, this court determines if summary judgment was appropriate based on whether the evidentiary items presented by the moving party leave a material question of fact unanswered. Id. This court views the evidence in the light most favorable to the party against whom the motion was filed, resolving all doubts and inferences against the moving party. Id. This review is not limited to the pleadings but also includes the affidavits and other documents filed by the parties. Id.

         III. Summary Judgment for Negligence

         To prove negligence in Arkansas, the plaintiff must show that he or she suffered damages proximately caused by the defendant's negligence. Callahan v. Clark, 321 Ark. 376, 386, 901 S.W.2d 842, 847 (1995). To show damages and proximate cause in a legal-malpractice action, the plaintiff must show that but for the alleged negligence, the result would have been different in the underlying action. Hearst v. Newcomb, 2018 Ark.App. 573. In ...

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