Grand Valley Ridge, LLC v. Metropolitan National Bank
2012 Ark. 121
| Ark. | 2012Background
- Grand Valley Ridge, LLC and Terminella appeal a circuit court order dismissing the second amended complaint and imposing Rule 11 sanctions against them."
- The circuit court previously ruled Terminella had no standing to sue MNB and dismissed his claims with prejudice; Grand Valley’s tort claims were dismissed or barred.
- The court also denied a motion to compel production of MNB’s financial records, and later entered a foreclosure decree against appellants.
- After the first appeal (Grand Valley I) was dismissed for lack of finality, appellants filed a new complaint in 2010 alleging, among other things, ADTPA violations.
- The circuit court granted summary judgment and Rule 11 sanctions in March 2011, ruling Terminella lacked standing, and that many claims were barred by res judicata, collateral estoppel, or statute of limitations.
- Appellants challenge these rulings on appeal; the court affirms.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing of Terminella to sue | Terminella, as Grand Valley member and guarantor, has standalone damages. | Terminella as guarantor lacks standing to sue on the loan documents. | Terminella lacked standing; court affirmed summary judgment on standing. |
| Discovery/production of MNB financial records | Grand Valley needed records to prove MNB’s unsound banking practices caused breach. | Records were publicly available and not relevant to a demand-note breach. | No abuse of discretion; denial of discovery affirmed. |
| Motion to set aside the judgment on fraud | New evidence shows MNB fraud on the court. | No proven fraud; prior ruling that note was a demand note controls. | Rule 60 motion denied; no fraud proven. |
| Nonsuited claims and limitations/res judicata | Savings statute tolling and res judicata should permit revival. | Claims barred by one-year savings statute and three-year limit; tolling not proven. | Claims barred; limitations and res judicata/collateral estoppel upheld. |
| ADTPA claim and Rule 11 sanctions | ADTPA claim should proceed; sanctions warranted for harassment. | ADTPA claim improperly pled; sanctions justified under Rule 11. | ADTPA claim properly dismissed; Rule 11 sanctions affirmed. |
Key Cases Cited
- Farm Bureau Ins. Co. of Ark., Inc. v. Running M Farms, Inc., 366 Ark. 480 (2006) (standing and ability to sue as guarantor reviewed de novo)
- First Commercial Bank, N.A. v. Walker, 333 Ark. 100 (1998) (guarantor lacks independent standing against bank; representative capacity matters)
- Jewell v. Fletcher, 2010 Ark. 195 (2010) (fraud elements; clear, cogent, convincing standard to set aside judgment)
- Crockett v. C.A.G. Invs., Inc., 2011 Ark. 208 (2011) (abuse of discretion standard for Rule 11 sanctions in unwarranted claims)
- Bomar v. Moser, 369 Ark. 123 (2007) (fraud tolling of statute of limitations; discovery of fraud)