Evans v. Hamby
2011 Ark. 69
Ark.2011Background
- Jerry Evans appeals a summary judgment in favor of Hamby and the Walters Law Firm on his legal-malpractice claim.
- Northwest Amusement Company, Inc. had its charter revoked for failure to pay franchise taxes on Dec. 31, 1998; later, a consolidated promissory note for $74,000 was executed on Feb. 25, 1999, with 10% interest.
- The note was treated as a capital contribution in Northwest’s books, with no corporate authorization for the loan.
- Jerry Evans paid some against the note, then stopped; Luther Evans sued Northwest, Joe Evans, and Jerry Evans for the debt.
- Hamby did not assert usury and did not advise reinstatement of Northwest’s charter under Ark. Code Ann. § 26-54-112; Jerry Evans was found liable on the note and awarded costs and fees.
- The circuit court granted summary judgment to Hamby/Walters Firm; the Court of Appeals affirmed; this court reviews under de novo standard for statutory interpretation and legal-malpractice issues.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the failing to plead usury supported summary judgment. | Evans argues Hamby’s neglect to plead usury caused damages. | Hamby asserts estoppel and the contract’s language negate usury liability; the record shows no genuine issue of material fact. | Yes; summary judgment upheld on estoppel and lack of proof of material facts. |
| Whether Hamby’s failure to advise reinstatement of Northwest’s charter proximately caused damages given retroactivity issues. | Evans contends reinstatement could limit personal liability under § 26-54-112 retroactively. | Act 522’s retroactive provisions apply prospectively to the note’s date; retroactivity not established; lack of proximate causation. | Yes; summary judgment affirmed; no genuine issue of retroactivity or proximate-cause proof. |
Key Cases Cited
- Nash v. Hendricks, 369 Ark. 60 (Ark. 2007) (negligence standard for attorney malpractice; case within a case rule)
- Hickman v. Courtney, 361 Ark. 5 (Ark. 2005) (requires clear and convincing evidence of intent to commit usury; estoppel may negate usury defense)
- Carter v. Four Seasons Funding Corp., 351 Ark. 637 (Ark. 2003) (tests for determining usury intent; contract interpretation authority)
- Omni Holding and Development Corp. v. C.A.G. Invs., Inc., 370 Ark. 220 (Ark. 2007) (retroactivity of § 26-54-112; distinguishable facts)
- Pakay v. Davis, 367 Ark. 421 (Ark. 2006) (Fed. Reserve Rate changes; application to usury timing)
- Bean v. Office of Child Support Enforcement, 340 Ark. 286 (Ark. 2000) (remedial/retroactive treatment considerations)