Beck v. Inter City Transportation, Inc.
2012 Ark. App. 370
Ark. Ct. App.2012Background
- Beck and Inter City contracted to sell two complete engines; one engine was incomplete upon delivery.
- Inter City filed suit in Pulaski County for breach of contract and fraud; Beck’s charter had been revoked then reinstated.
- Beck filed a declaratory-judgment action in Monroe County; Inter City later showed charter reinstatement, challenging Beck’s standing.
- Arkansas law § 26-54-112 reinstates a forfeited charter retroactively to the date of forfeiture.
- Beck argued retroactivity defeats any vested rights accrued during forfeiture; Inter City argued no rights exist to defeat reinstatement.
- The trial court denied Beck’s Rule 12(b)(6) and later proceedings addressed contract/recission implications and attorney’s fees for Inter City.
- The court ultimately denied attorney’s fees under Hudson v. Hilo but recognized rescission as a potential remedy; this decision is reviewed on appeal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Retroactivity of reinstatement defeats vested rights | Beck: vested Monroe County rights survive | Inter City: §26-54-112 retroactivity nullifies Beck’s rights | Affirmed denial; retroactivity applies; vested rights do not defeat reinstatement. |
| Attorney’s fees and equitable lien in contract case | Beck argues fees improper due to rescission; equitable lien appropriate | Inter City: fees allowed if case primarily contractual; lien justified | Remand on attorney’s fees; equitable lien affirmed. |
Key Cases Cited
- Omni Holding and Dev. Corp. v. C.A.G. Invs., Inc., 370 Ark. 220 (2007) (retroactive reinstatement vests continuous existence)
- Hudson v. Hilo, 88 Ark.App. 317 (2004) (not a blanket bar on §16-22-308 in rescission contexts)
- Barnhart v. City of Fayetteville, 335 Ark. 57 (1998) (recovery limits under §16-22-308 when claim is not contract-based)
- Friends of Children, Inc. v. Marcus, 46 Ark.App. 57 (1994) (quasi-contract not basis for §16-22-308 fees)
- Jiles v. Union Planters Bank, 90 Ark.App. 245 (2005) (fees under §16-22-308 depend on contract basis of action)
- Sunbelt Exploration Co. v. Stephens Prod. Co., 320 Ark. 298 (1995) (fees in equitable actions may be allowed under §16-22-308)
- Childs v. Adams, 322 Ark. 424 (1995) (fee award not precluded in equitable action for contract relief)