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Anita G, LLC v. Centennial Bank

Court of Appeals of Arkansas, Division II

April 17, 2019

ANITA G, LLC, Appellant

Page 562

[Copyrighted Material Omitted]

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[Copyrighted Material Omitted]

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         Robert S. Tschiemer, Mayflower; and Collins, Collins & Ray, P.A., Little Rock, by: Brian W. Ray, for appellant.

         Mitchell, Williams, Selig, Gates & Woodyard, P.L.L.C., by: John Keeling Baker, Little Rock and Nathan A. Read, Rogers, for appellee.


         RITA W. GRUBER, Chief Judge

Page 565

          This is an interlocutory appeal of an order granting a preliminary injunction. The focus of this litigation is a piece of property commonly referred to as Dayton Avenue, which is owned by appellant Anita G, LLC (Anita G). After many years of use of Dayton Avenue by members of the public, which included appellee Centennial Bank’s employees and customers, Anita G barricaded Dayton Avenue, terminating its public use. Centennial Bank sued Anita G and sought a preliminary injunction to require Anita G to remove its barricades and reopen Dayton Avenue for public use. The circuit court granted the preliminary injunction, and Anita G appealed. We affirm.

          I. Background

          Dayton Avenue is located in a busy commercial area in Jonesboro, Arkansas. Despite its name, Dayton Avenue is not a public road, but it has been used by members of the public, including employees and customers of Centennial Bank, for many years.

          Anita G currently owns the property on which Dayton Avenue sits, having purchased it in March 2016. Before Anita G acquired the property, it was owned by the Craighead County Fair Association (CCFA). It is undisputed that during the years that the CCFA owned the property, the public regularly drove on Dayton Avenue.

          After Anita G purchased the property, it immediately erected barricades across Dayton Avenue, effectively ending its public use. Anita G intends to build a commercial development on Dayton Avenue and claims that it is investing millions of dollars in the project. Significantly, Anita G has not begun construction on the property nor has it sought a building permit to commence construction. Moreover, Anita G has not entered into any leases for the property nor does it have any contracts for the sale of any portion of the property. However, Anita G has incurred expenses relating to the hiring of civil engineers and architects for potential development.

          In June 2017, fifteen months after Anita G’s purchase, Centennial Bank sued Anita G, seeking declaratory and injunctive relief. Specifically, Centennial Bank sought to have the barricades across Dayton Avenue removed and for it to be reopened for public travel based on the theories of implied dedication and the establishment of a prescriptive easement.

          Centennial Bank also petitioned the circuit court for a preliminary injunction pursuant to Arkansas Rule of Civil Procedure 65 to prevent Anita G from taking any action that would impair the public’s use of the barricaded section of Dayton Avenue. Arkansas Rule of Civil Procedure 65 requires a circuit court to affirmatively determine that irreparable harm will result in the absence of an injunction and that the moving party has demonstrated a likelihood of success on the merits. See Baptist Health v. Murphy, 365 Ark. 115, 226 S.W.3d 800 (2006).

          In its motion for preliminary injunction, Centennial Bank alleged that its customers and employees as well as the general public had used Dayton Avenue as a public street for more than seven continuous years. Centennial Bank further claimed that Anita G intended to construct new structures on Dayton Avenue. Centennial Bank urged the circuit court to order Anita G to remove the barricades and to enjoin it from erecting further barricades

Page 566

or otherwise interfering with the public’s use of Dayton Avenue.

          Anita G responded and objected to the motion for preliminary injunction. It argued that Centennial Bank was not entitled to injunctive relief but admitted that it intended to construct new structures on Dayton Avenue.

          Later, Anita G answered Centennial Bank’s initial complaint. Its answer is pertinent because, in it, Anita G raised certain affirmative defenses that are relevant to this appeal, including laches and lack of standing.

          The circuit court held a hearing on the motion for preliminary injunction in January 2018. At the hearing, the circuit court heard testimony from a multitude of witnesses, including bank employees and customers, CCFA representatives, a member of Anita G, city employees, and other members of the general public.

          The evidence regarding the use of Dayton Avenue was often cumulative with twelve affiants and eighteen witnesses testifying in person. The testimony generally showed that Dayton Avenue had been heavily traveled for well over seven years— evidence indicated use as far back as the 1970s— and that travelers neither sought nor received permission to use Dayton Avenue. Also important was testimony from Jonesboro city engineer Craig Light who discussed a traffic study that indicated an average of 1869 cars used the disputed stretch of Dayton Avenue every day.

          Evidence also indicated that the CCFA knew Dayton Avenue was being used by members of the public but never specifically granted anyone permission to use it. Michael Cureton, a former board member of the CCFA, testified that the CCFA never opened Dayton Avenue to the public or granted anyone permission to use it despite the board of directors knowing that the public was using it. Cureton further explained that the CCFA paved Dayton Avenue in the late 2000s so that there would be less maintenance on it. During the time the CCFA owned the property, Dayton Avenue was continuously open to the public for all but a few hours of the day during the six days of the annual Craighead County Fair.

          Prateek Gera, a representative and member of Anita G, presented testimony regarding Anita G’s plans for the property. He explained that it intended to develop a 40,000-square-foot shopping center on it. He further offered that had this lawsuit not been filed, Anita G would have already begun construction.

          In February 2018, the circuit court entered an order for preliminary injunction. It made its findings based only on the theory that a prescriptive easement had been established. Notably, it did not base its decision on the theory of implied dedication, which Centennial Bank also advanced as a theory under which it was entitled to relief in its initial complaint. The preliminary-injunction order included findings that Centennial Bank demonstrated a likelihood of success on the merits. The court highlighted witnesses’ testimony concerning significant use of Dayton Avenue over a period longer than seven years and that the evidence indicated that no one ever sought or received explicit permission to use it. Moreover, the circuit court found that Centennial Bank had demonstrated irreparable harm in the event a preliminary injunction was not granted. Specifically, the circuit court found that without a preliminary injunction, Anita G could "diminish or destroy the public’s use of the roadway even if [Centennial Bank] ultimately prevailed."

          After the order granting the preliminary injunction was entered, Anita G filed a motion to stay in which it argued that ...

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