549 S.W.3d 919
Ark. Ct. App.2018Background
- Chris and Kerri divorced in 2015; their divorce decree included a mutual right of first refusal over various income-producing lots in the Stonegate subdivision. The decree required an option-holder to elect to exercise within 10 days of notice or waive the right, but said nothing about the form or content of notice.
- In February–March 2017 Chris provided Kerri varying levels of notice: a February text identifying eight Stonegate duplexes/triplexes with asking prices, and later emails (March 25) with single-page, partially redacted/unsigned offers for five additional lots. Full deeds/contracts were provided April 13 for the earlier eight lots.
- Kerri did not make a clear, signed acceptance within ten days of the February or March communications; she sought additional information and at times said she was interested, and on March 27 texted she would exercise her rights through the decree.
- Kerri filed an emergency motion (May 3, 2017) seeking injunctive relief and a declaration that Chris had violated her right of first refusal; the trial court found Chris in contempt for the February sales (Eight Lots) but found the March notices (Five Lots) adequate.
- On appeal the appellate court reviewed de novo whether contempt was proper given the decree’s lack of specificity about required notice and whether Kerri’s communications constituted an effective election to purchase.
Issues
| Issue | Plaintiff's Argument (Kerri) | Defendant's Argument (Chris) | Held |
|---|---|---|---|
| Whether trial court properly held Chris in contempt for selling Eight Lots without providing adequate notice | Decree gave Kerri a right of first refusal and Chris’s February notices were legally inadequate; he should be held in contempt | Final order did not specify form/content of notice; Chris provided more than required (type, subdivision, price) and thus did not disobey an express command | Reversed: contempt finding vacated because the decree was not definite in its commands regarding notice and Chris did not willfully disobey an express order |
| Whether Kerri’s emergency motion gave Chris adequate notice of a contempt charge | Kerri’s motion alleged violation of the decree and bad faith, so it was sufficient notice of contempt | Chris lacked specific notice of a contempt charge and opportunity to prepare a defense; he was entitled to explicit notice when contempt is charged | Reversed: trial court erred in finding contempt without specific notice of contempt charge |
| Whether the March 25 notices (Five Lots) were sufficient to trigger the right of first refusal | Initial notices were insufficient; Chris failed to provide requested additional information and thus violated her right | March notices provided lot numbers and prices; Kerri did not timely accept or give a binding election within 10 days | Affirmed: March notices were adequate; Kerri’s equivocal responses did not constitute timely acceptance |
| Whether attorney’s fees awarded based on contempt should stand | Fees are proper if contempt stands | Fees should be vacated if contempt is reversed | Reversed: fee award vacated because contempt finding reversed |
Key Cases Cited
- Jones v. Jones, 898 S.W.2d 23 (1995) (contempt-review principles and requirement that orders imposing duties be definite and clear)
- Ivy v. Keith, 92 S.W.3d 671 (2002) (willful disobedience required for contempt)
- Applegate v. Applegate, 275 S.W.3d 682 (2008) (commands giving rise to contempt must be express rather than implied)
- Lilly v. Earl, 771 S.W.2d 277 (1989) (no contempt where order does not expressly impose the specific duty challenged)
- John D. Stump & Assoc., Inc. v. Cunningham Mem. Park, Inc., 419 S.E.2d 699 (1992) (a right of first refusal requires reasonable disclosure of essential terms of the offer)