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Ash v. First National Bank of Eastern Arkansas

Court of Appeals of Arkansas, Division III

March 6, 2019

WILLIAM CAMPBELL ASH APPELLANT
v.
FIRST NATIONAL BANK OF EASTERN ARKANSAS APPELLEE

          Appeal From The ST. Francis County Circuit Court [No. 62CV-14-179] Honorable Chalk Mitchell, Judge

          Branch, Thompson, Warmath & Dale, P.A., by: Robert F. Thompson, for appellant.

          Mitchell, Williams, Selig, Gates & Woodyard, P.L.L.C., by: M. Samuel Jones III and Brian A. Pipkin, for appellee.

          BRANDON J. HARRISON, Judge.

         This appeal concerns the transfer of more than $1.2 million in stock and the securities law of Arkansas. The main procedural issue is whether the circuit court correctly granted summary judgment in favor of First National Bank of Eastern Arkansas on a complaint that William Ash filed against the bank. The complaint raised breach-of-fiduciary-duty, conversion, and replevin claims against First National Bank. Ash challenges the circuit court's decision that he had legally transferred his shares of stock in Bancshares of Eastern Arkansas, Inc. to First National Bank of Eastern Arkansas, as the trustee for the irrevocable testamentary trust Ash's mother had created. Ash says he intended to put the stock into a separate and new revocable trust that he thought he had created with an attorney's help. Ash also contends that, even if there was a transfer of stock to the irrevocable testamentary trust, then the transfer still represents an overreach by the bank and opens it up to some potential liability such that summary judgment was improper. We agree with Ash in part, and disagree in part.

         I. The Previous Appeal (Ash I)

         This is neither the parties' nor this court's first rodeo. In 2017, we vacated the St. Francis County Circuit Court's order granting summary judgment to First National Bank and held that the "court erred as a matter of law when it determined that the stock power, standing alone, effectively transferred the stock and foreclosed all of Ash's claims under Arkansas law." Ash v. First Nat'l Bank of E. Ark., 2017 Ark.App. 57, at 4, 513 S.W.3d 268, 271 (Ash I). We stated that the "better course" was for the parties to argue, and the circuit court to decide, how a security is effectively transferred under Arkansas law and whether an adverse claim is foreclosed under this state's securities law. Id.; see also Ark. Code Ann. §§ 4-8-101 to -603 (Repl. 2001 & Supp. 2017) (adopting Uniform Commercial Code).

         After First National Bank's unsuccessful attempt to seek review of our first opinion in the Arkansas Supreme Court, the mandate issued and the summary-judgment order was officially voided. See Johnson v. Windstream Commc'ns, Inc., 2014 Ark.App. 99. On remand in November 2017, the circuit court set the case for a bench trial in 2018. In December 2017, the bank filed a "post-appeal motion for summary judgment" that also incorporated its previous summary-judgment motion. Ash responded. But on the second go-around Ash did not also ask the court for summary judgment; he only asked the court to deny the bank's motion and to award all the relief requested in the complaint. Ash attached seven exhibits to his response:

1. Stock certificate (included in the first appeal record)
2. Corporation's shareholder agreement
3. Bank's supplemental objections and responses to Ash's third set of interrogatories and requests for production of documents
4. Deposition of William Campbell Ash dated 18 May 2015 (included in the first appeal record)
5. Deposition of William Campbell Ash dated 15 September 2015 (included in the ...

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