FROM THE PULASKI COUNTY CIRCUIT COURT [NO. 60CV-14-2778],
HONORABLE ALICE GRAY, JUDGE
L. Parker II, Jonesboro; and Ronald S. Burnett, Jr., for
Campbell, P.A., by: Haley Heath Burks, Phil Campbell, Little
Rock, and Chris Stevens, for appellee.
K. WOOD, Associate Justice
Miracle Kids Success Academy, Inc., appeals the circuit
courts order granting summary judgment in favor of Marvin
Maurras and awarding Marvin attorneys fees. In this contract
dispute, the circuit court concluded that Marvins loan to
Miracle Kids was payable on demand because the loan agreement
did not have a maturity date. We affirm.
Katherine Hardin and Shelly Decker Keller formed Miracle Kids
in August 2008. After its formation, Marvin and his nephew,
Chris Maurras, joined Miracle Kids as shareholders and
directors with each owning 25 percent of the companys
outstanding stock. On September 23, 2009, the directors
unanimously approved an "Operations Agreement." The
Operations Agreement provided that each shareholder agreed to
contribute $ 175,000 as start-up capital, and Marvin and
Chris agreed to loan an additional $ 300,000 to Miracle Kids
during the first six months of the companys operation.
December 11, 2009, the shareholders and directors held
another meeting to discuss the start-up funding. They revised
the initial funding provision of the original Operations
Agreement. Per the December 2009 meeting minutes, they
unanimously agreed to treat $ 25,000 of the start-up capital
for Miracle Kids as a "capital contribution," and
to treat the remaining $ 150,000 of their contributions as a
loan with 5 percent interest per annum. They further agreed
to repay Hardins loan and Kellers loan at a rate of $ 5,000
per month, and they agreed to defer repayment of Marvins and
Chriss loans "for now."
made his initial $ 25,000 start-up capital contribution and
later funded his $ 150,000 loan to Miracle Kids. In June
2014, Marvin demanded repayment of his loan, and Miracle Kids
refused to pay. In July 2014, Marvin sued Miracle Kids for
repayment of the loan and attorneys fees pursuant to
Arkansas Code Annotated section 16-22-308 (Repl. 1999).
filed a motion for summary judgment on his claim for
repayment of the loan. He asserted that because the Operating
Agreement as amended by the December 2009 meeting minutes did
not include a maturity date for the loan, it was payable in
full on demand. Miracle Kids responded to Marvins motion for
summary judgment and filed a counter-summary-judgment motion.
Miracle Kids argued that the agreement did not constitute any
type of loan instrument to be used for the purpose of
demanding payment from Miracle Kids. It asserted that the
December 2009 minutes did not constitute a negotiable
instrument. Rather, it claimed that majority-shareholder
approval was a condition precedent for repayment. Miracle
Kids also asserted that it was financially unable to repay
Marvin and that any repayment of the loan would require
shareholder approval as required by the Operating Agreement.
The circuit court granted Marvins summary-judgment motion
and denied Miracle Kids motion. The courts final
order concluded that because the loan did
not have a maturity date, it was payable on demand. The
circuit court also awarded Marvin $ 19,200 in attorneys
fees. The court of appeals reviewed the circuit courts
decision and reversed and remanded because genuine issues of
material fact existed as to whether the loan agreement was an
on-demand contract. Miracle Kids Success Acad., Inc. v.
Maurras,2018 Ark.App. 40, 539 S.W.3d 603. Marvin filed