678 S.W.3d 789
Ark. Ct. App.2023Background
- Grayson & Grayson, P.A. sued David A. Couch (and originally Couch, PLLC) in 2006, alleging Couch failed to pay Grayson its share of fees from several settled nursing‑home cases. Couch, PLLC was dismissed for lack of service in 2009 and did not appeal that dismissal.
- The case proceeded to a three‑day bench trial in October 2019; witnesses included Keith and Melanie Grayson and Couch. The Graysons testified to an oral arrangement that Couch would join their firm (as "of counsel"), use firm staff and facilities, bring cases, and split fees 50/50; Couch maintained no global fee‑split existed and that any agreement was with Couch, PLLC or limited to cases actually worked together.
- At trial, after the plaintiff rested, Grayson moved to amend the pleadings to conform to the proof to add breach‑of‑fiduciary‑duty and alter‑ego claims; Couch objected as untimely and prejudicial. The court took the motion under advisement and permitted posttrial briefing.
- The trial court entered judgment on December 10, 2019: it found no enforceable contract (terms too indefinite), denied amendment to conform to proof as untimely, and entered judgment as a matter of law against Grayson on unjust enrichment. The court later denied Couch’s motion for attorney’s fees.
- On appeal, the Court of Appeals affirmed denial of the motion to amend, reversed and remanded on the unjust‑enrichment claim (holding such a claim can be pursued where an express contract is unenforceable), and dismissed Couch’s cross‑appeal on attorney’s fees as moot.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Motion to amend pleadings to conform to proof (add breach of fiduciary duty and alter ego) | Grayson: evidence at trial supported breach of fiduciary duty and alter‑ego claims; Couch had notice because same facts were tried | Couch: motion was raised only at close of plaintiff’s case after 13 years; untimely and prejudicial; no implied consent to try new claims | Denied. Trial court did not abuse discretion; amendment untimely and prejudicial given long delay and lack of implied consent |
| Unjust‑enrichment claim barred because no enforceable contract | Grayson: unjust enrichment is equitable and may be asserted when an express contract is unenforceable; evidence supported restitution based on use of firm resources and fees paid to Couch/PLLC | Couch: unjust enrichment pleaded as alternative to contract but trial court correctly treated absence of contract as fatal | Reversed and remanded. Court of Appeals held absence of enforceable contract is not a bar to unjust‑enrichment; trial court should decide claim on proper equitable standards |
| Attorney’s fees denial (cross‑appeal) | Couch: as prevailing party on breach‑of‑contract claim, entitled to fees under Ark. Code Ann. § 16‑22‑308 | Grayson: not addressed on appeal; merit depends on who ultimately prevails overall | Dismissed as moot. Because unjust‑enrichment claim remanded, prevailing party for entire case not yet determined; trial court’s fee denial not reviewed now |
Key Cases Cited
- Bailey v. Matthews, 279 Ark. 117, 649 S.W.2d 175 (party who knowingly acquiesces to evidence beyond pleadings cannot later contest amendment)
- City of Dardanelle v. City of Russellville, 372 Ark. 486, 277 S.W.3d 562 (courts cannot enforce contracts with indefinite essential terms)
- Patton v. Brown‑Moore Lumber Co., 173 Ark. 128, 292 S.W. 383 (unjust enrichment recoverable where money received under circumstances equity requires restitution)
- Perry v. Baptist Health, 368 Ark. 114, 243 S.W.3d 310 (prevailing‑party analysis under Ark. Code § 16‑22‑308 looks to case outcome as a whole)
- Harrill & Sutter, PLLC v. Kosin, 2011 Ark. 51, 378 S.W.3d 135 (discretionary nature of awarding attorney’s fees and need for explanation when denied)
- Sexton Law Firm, P.A. v. Milligan, 329 Ark. 285, 948 S.W.2d 388 (elements of breach‑of‑contract claim)