MIRACLE KIDS SUCCESS ACADEMY, INC. APPELLANT
MARVIN MAURRAS APPELLEE
FROM THE PULASKI COUNTY CIRCUIT COURT [NO. 60CV-14-2778]
HONORABLE ALICE GRAY, JUDGE
L. Parker II; and Ronald S. Burnett, Jr., for appellant.
Campbell, P.A., by: Haley Heath Burks, Phil Campbell, and
Chris Stevens, for appellee.
K. WOOD, ASSOCIATE JUSTICE
Kids Success Academy, Inc., appeals the circuit court's
order granting summary judgment in favor of Marvin Maurras
and awarding Marvin attorney's fees. In this contract
dispute, the circuit court concluded that Marvin's 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 company's
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 company's 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 Hardin's loan and Keller's loan at a rate of
$5, 000 per month, and they agreed to defer repayment of
Marvin's and Chris's 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 attorney's 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 Marvin's 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 Marvin's
summary-judgment motion and denied Miracle Kids' motion.
The court's 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 attorney's
fees. The court of appeals reviewed the circuit court's
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
a petition for review of the court of appeals' decision,
which we granted.
circuit court should grant summary judgment when there is no
issue of fact to be litigated, and the moving party is
entitled to judgment as a matter of law. Cannady v.
St.Vincent Infirmary Med'l Ctr., 2018 Ark.
35, 537 S.W.3d 259. Summary judgment is appropriate when the
pleadings, depositions, answers to interrogatories, responses
to requests for admission, and affidavits show that there is
no genuine issue of matter fact and that the moving party is
entitled to judgment as a matter of law. Id. The
moving party bears the burden of proving that ...