Druyvestein v. Gean
2014 Ark. App. 559
| Ark. Ct. App. | 2014Background
- H.J. “Humpy” Druyvestein died owning a Summit Brokerage bond account; ownership between Lois (his widow) and Terry Druyvestein (nephew/plaintiff) was contested.
- This court previously reversed dismissal and awarded Terry judgment in excess of $200,000 against Summit Brokerage; proceeds of the bond account ($208,830.72) were thereafter liquidated.
- Roy Gean, Jr. (defendant/appellee), as Lois’s attorney, received a check for the full proceeds, had Lois endorse it, deposited proceeds into his account, paid Lois’s daughter Linda Van Divner $105,625.72, and retained about $103,205 (purported fee).
- Terry sued Van Divner and Gean under the Arkansas Fraudulent Transfer Act and sought imposition of a constructive trust, alleging the transfers left Lois’s estate insolvent and that Gean’s fee was excessive and not for reasonable value.
- Gean moved for summary judgment arguing lack of privity/standing and that he was paid by Lois for legal services; he submitted no supporting affidavits or documents. The circuit court granted summary judgment for Gean and later entered a $60,000 judgment against Van Divner under the Fraudulent Transfer Act.
- On appeal the Arkansas Court of Appeals held genuine issues of material fact remained as to whether Lois received reasonably equivalent value and whether a constructive trust was warranted; summary judgment for Gean was reversed and case remanded.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Were the transfers from Lois fraudulent under the Arkansas Fraudulent Transfer Act? | Lois’s transfers to Gean/Van Divner left her estate unable to satisfy Terry’s judgment; transfers were not for reasonably equivalent value and were made while insolvent or rendering her insolvent. | Gean contended Terry lacked standing/privity to challenge payment of an attorney fee and that the fee was voluntarily paid for services to Lois. | Reversed: genuine factual dispute exists whether Lois received reasonably equivalent value; summary judgment inappropriate. |
| Could Terry impose a constructive trust on funds held by Gean? | Terry alleged unjust enrichment and that equity required a constructive trust because the funds derived from property to which he had judgment rights. | Gean argued no fraud or confidential relationship with Terry and no basis for a constructive trust. | Reversed: factual issues remain (fraud, unjust enrichment/mistake, or equitable duty); constructive trust may be appropriate. |
| Was summary judgment appropriate where movant submitted no supporting evidentiary materials? | N/A (plaintiff did not have burden on movant’s proof) | Gean relied on briefs asserting facts (agreement with Lois) but produced no affidavit or documents. | Court held movant failed to carry summary-judgment burden; cannot base grant on factual assertions in briefs. |
| Did circuit court properly apply doctrines like third-party beneficiary, tort, or declaratory-judgment law to bar relief? | Terry proceeded under fraudulent-transfer statute and constructive trust—these are the operative theories. | Gean argued alternative legal theories (contract, tort, declaratory relief) to show Terry had no viable claim. | Court: those arguments were largely irrelevant; the controlling inquiry is statutory fraudulent-transfer elements and equitable grounds for constructive trust. |
Key Cases Cited
- Mitchell v. Lincoln, 366 Ark. 592 (Ark. 2006) (summary-judgment standard)
- New Maumelle Harbor v. Rochelle, 338 Ark. 43 (Ark. 1999) (moving party’s burden on summary judgment)
- Inge v. Walker, 70 Ark. App. 114 (Ark. App. 2002) (nonresponse does not automatically support summary judgment)
- Pyle v. Robertson, 313 Ark. 692 (Ark. 1993) (trial court cannot base summary-judgment decision on facts stated only in briefs)
- Druyvestein v. Summit Brokerage Servs., Inc., 375 S.W.3d 777 (Ark. App. 2010) (prior appeal resolving ownership/judgment regarding the bond account)