Peck v. Peck

          APPEAL FROM THE PULASKI COUNTY CIRCUIT COURT, SIXTH DIVISION [NO. 60CV-14-1883] HONORABLE TIMOTHY DAVIS FOX, JUDGE

          Eichenbaum Liles, P.A., by: Joshua Allen and Christopher O. Parker, for appellant.

          Richard F. Hatfield, P.A., by: Richard F. Hatfield, for appellee.

          PHILLIP T. WHITEAKER, JUDGE.

         Alison Peck appeals the order of the Pulaski County Circuit Court that granted partial summary judgment and dismissed in part Peck's amended complaint against appellee Hannah Peck Finley on the basis of the statute of limitations. At Peck's request, the circuit court certified the order as a final judgment pursuant to Arkansas Rule of Civil Procedure 54(b). We reverse and remand for further proceedings consistent with this opinion.

         I. Procedural History

         Peck is the daughter of the late Robert Peck. Finley is Robert Peck's widow. After Robert's death, a series of lawsuits developed between Finley, Peck, Capi Peterson, and Ashley O'Dell over Robert's estate plan.^[1] We have heard two previous appeals resulting from the litigation between Peterson and O'Dell and Finley. See Peterson v. Peck, 2013 Ark.App. 666, 430 S.W.3d 797; O'Dell v. Peck, 2017 Ark.App. 532. The instant appeal returns to us a second time after a previous reversal and remand. See Peck v. Peck, 2016 Ark.App. 423, 502 S.W.3d 553 (Peck I).

         In our previous opinions, we set forth in detail the facts of the disputes between Robert's daughters and his widow. For purposes of this opinion, we will not repeat the facts in detail but provide the following summary. Robert Peck created a trust naming Finley as trustee and primary beneficiary (the Peck Family Trust). Robert named his daughters as contingent beneficiaries within the trust. The heart of the dispute between the sisters and Finley has been how Robert funded the trust. Robert possessed a piece of artwork created by Alexander Calder (the Calder). Finley believed that Robert funded the trust with the Calder. As trustee, she sold the Calder and invested the proceeds. Her investments were not profitable and lost money. In 2008, she filed a lawsuit seeking a declaratory judgment to determine the ownership of the Calder. Peck was a defendant in this lawsuit. She denied Finley's assertions that the trust owned the Calder and asserted that the owner of the Calder was her sister, Peterson. Peck also filed a counterclaim requesting an accounting and asserting that Finley breached her fiduciary duties. Both actions-the declaratory judgment and the counterclaim-were dismissed without prejudice in 2009.

         In October 2010, Peterson filed suit against Finley, alleging that she (Peterson) was the owner of the Calder, that Finley wrongfully sold it to a third party, and that Finley was liable to Peterson for the value of the Calder and damages for its sale.^[2] Peterson also sought an accounting for the Peck Family Trust and alleged that Finley acted in bad faith. Finley denied Peterson's allegation and contended that Peterson's actions triggered a share-cancellation clause within the trust that resulted in a forfeiture of Peterson's beneficiary status under the trust. Following a bench trial, the circuit court ruled that Peterson had failed to prove that she was the owner of the Calder. The court also ruled that Peterson failed to prove that Finley had acted in bad faith, that the trust's share-cancellation clause was thereby triggered, and that Peterson was thus excluded as a beneficiary. We affirmed. Peterson, supra.

         In May 2014, ^[3] Peck sued Finley, seeking a declaratory judgment of Finley's duties as trustee and of her own rights as a beneficiary to be kept promptly informed of all material information regarding administration of the trust. She asserted that Finley was required to produce reports to her as a beneficiary, that Finley had failed to do so, and that Finley had acted in bad faith. Peck subsequently amended her declaratory-judgment complaint to add claims for conversion, breach of fiduciary duty, deceit, and unjust enrichment or the imposition of a constructive trust. She also sought an accounting and punitive damages. Finley responded with a motion to dismiss. Finley argued that our decision in Peterson held that the mere filing of a complaint challenging Finley's actions as trustee triggered the share-cancellation clause. The circuit court agreed and dismissed Peck's complaint. In Peck I, we reversed the order dismissing Peck's complaint. We remanded the case for the circuit court to determine whether Peck's amended complaint stated sufficient facts showing that Finley acted in bad faith or with reckless disregard of either the trust's purposes or Peck's interests as a contingent beneficiary.

         On remand following Peck I, Finley voluntarily withdrew her motion to dismiss. She filed an answer denying that Peck was a qualified beneficiary of the trust or had standing to seek a declaratory judgment. Finley further asserted that Peck's action was barred by various grounds, including the expiration of the one-year savings statute, judicial estoppel, and res judicata.^[4]

         Peck amended her complaint three more times, incorporating the allegations of her first amended complaint and adding additional factual allegations. Finley amended her answer to assert that Peck's action was barred by the three-year statute of limitations found in Arkansas Code Annotated section 16-56-105 (Repl. 2005).

         Finley ultimately filed a motion for summary judgment in which she contended that res judicata and the general three-year statute of limitations barred Peck's action. Peck responded to the motion for summary judgment, denying that her claims were barred by the statute of limitations. She further argued that Finley's affirmative defenses were barred by the doctrine of law of the case.

         Following a hearing at which the circuit court explained its reasoning from the bench, the court entered an order addressing Finley's motion for summary judgment.^[5] The court denied Finley's motion for summary judgment as to Peck's standing based on res judicata, judicial estoppel, and the expiration of the savings statute. The court denied the motion in part and granted it in part as to Peck's claim for declaratory relief. Specifically, the court denied the motion as to the questions of whether (1) Peck was and is a "qualified beneficiary" under the Peck Family Trust; (2) Finley provided Peck with an annual report within the one-year period prior to the filing of the initial complaint in this matter; and (3) any such report complied with Arkansas Code Annotated section 28-73-813(c)(1) (Repl. 2012). The court granted Finley's motion and dismissed Peck's claims for conversion (Count II), breach of fiduciary duty (Count III), deceit (Count IV), and unjust enrichment (Count V) with prejudice on the basis that they were barred by the general three-year statute of limitations set forth in Arkansas Code Annotated section 16-56-105. Similarly, the court ruled that the one-year statute of limitations barred Peck's claim for accounting (Count VI) for any period of time more than one year prior to the filing of the complaint. The court granted the motion as to Peck's ...