Farris v. Conger, 2017 Ark. 83

Background

Dr. Felicia Farris hired Cynthia Conger, a CPA doing business as Conger Wealth Management, under a 2005 Wealth Management Agreement governing management of Farris’s Fidelity investment account.
Paragraph 5 of the agreement stated Conger would "endeavor to process all Account transactions in a timely manner," and described brokerage execution practices.
In November 2008 Farris asked Conger to transfer funds from the Fidelity account to her personal checking account so Farris could pay off a mortgage and buy a five-acre tract before a foreclosure sale; the transfer was not completed in time and the property was initially lost to a third party.
Farris alleged she incurred $29,557.28 in additional costs to later obtain the parcel and that liquidating her account cost her an alleged $126,969 in lost value.
Farris sued in 2013 alleging breach of the Wealth Management Agreement (citing paragraph 5) and also alleged reckless disregard and attempted fraud, seeking compensatory and punitive damages.
The circuit court granted summary judgment for Conger, characterizing the claim as negligence subject to a three-year statute of limitations; the Supreme Court reversed, holding the complaint pleaded a contract claim subject to a five-year limitations period and remanded.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the claim sounds in contract or tort for statute-of-limitations purposes	Farris: complaint pleads a specific contractual promise (Paragraph 5: "endeavor to process…in a timely manner") and breach caused damages; five-year contract SOL applies	Conger: the alleged failure to timely transfer funds is negligence/failure to act diligently; three-year tort SOL applies	The Court held the complaint alleged a specific contractual promise and breach; contract SOL (five years) applies
Whether paragraph 5 imposes an actionable contractual obligation to timely effect transfers	Farris: paragraph 5’s promise to "endeavor to process…in a timely manner" is a specific contractual promise whose breach is actionable	Conger: paragraph 5 is aspirational/duty-of-care language amounting to diligence (a duty present in fiduciary/agent relationships), not a specific contractual covenant	The Court held interpretation of paragraph 5 and whether it imposed an actionable obligation are factual/contract-interpretation issues for the factfinder, not grounds to treat claim as pure tort
Whether allegations of fraud/reckless disregard convert or preclude a contract claim	Farris: alleged fraud/reckless disregard are pleaded in addition to breach of contract, and do not negate the contractual claim	Conger: plaintiff’s punitive-damage and fiduciary-duty framing shows the real claim is tort/negligence	The Court: presence of torty allegations does not convert a properly pleaded breach-of-contract claim; contract claim survives and governs SOL
Whether summary judgment was proper based on statute of limitations	Farris: filed within five-year contract SOL, so claim is timely; summary judgment improper	Conger: claim time-barred under three-year tort SOL; summary judgment proper	The Court reversed summary judgment and remanded for proceedings consistent with applying the five-year contract SOL

Key Cases Cited

McQuay v. Guntharp, 331 Ark. 466, 963 S.W.2d 583 (identifies that the complaint’s facts determine the area of law and the applicable statute of limitations)
Sturgis v. Skokos, 335 Ark. 41, 977 S.W.2d 217 (contract language promising diligence may be mere duty-of-care language and not convert a negligence claim into a breach-of-contract claim)
Rabalaias v. Barnett, 284 Ark. 527, 683 S.W.2d 919 (elements required to plead a breach of contract)
Cornett v. Prather, 293 Ark. 108, 737 S.W.2d 159 (substance of the pleading controls over labels)
Branscumb v. Freeman, 360 Ark. 171, 200 S.W.3d 411 (elements required to prove negligence)
Jack Wood Constr. Co., Inc. v. Ford, 258 Ark. 47, 522 S.W.2d 408 (pleading substance and gist-of-action analysis)