Lone v. Koch, 2015 Ark. App. 373

Lone and Koch entered an RPSA (Nov. 1, 2011) under which Koch paid $200,000 for a Wichita location and $50,000 for a Johnson, AR location; Lone failed to open the Wichita store.
Koch sued Lone in Oklahoma (filed Apr. 26, 2012) for breach and sought return of funds; Lone was served in late May 2012.
The parties negotiated a modification substituting a Frontenac, KS store for Wichita; Lone signed a Modification Agreement (returned July 3, 2012), Koch did not execute a returned copy, but Koch nonetheless supplied fuel to Frontenac and Johnson per the modified terms.
Koch obtained a default judgment in Oklahoma (Jan. 4, 2013) without notifying Lone; judgment ($268,000) was later registered in Pulaski County, AR.
Lone moved in Arkansas to set aside the registered foreign default judgment under Ark. R. Civ. P. 55(c), alleging fraud/misrepresentation in procurement; after a hearing the circuit court denied the motion but stayed execution until Koch appeared to show cause for failing to attend a deposition.
On appeal, the Arkansas Court of Appeals affirmed denial of the motion to set aside (finding Lone failed to prove fraud by clear and convincing evidence) but reversed the stay of execution as premature and unsupported.

Issue	Plaintiff's Argument (Lone)	Defendant's Argument (Koch)	Held
Whether the registered Oklahoma default judgment should be set aside for fraud/misrepresentation in procurement	Lone: parties reached a post-filing settlement/modification (Frontenac substitution); Koch’s silence and conduct (emails, performance under modified RPSA) amount to fraud that procured the default; therefore judgment should be set aside under Rule 55(c)	Koch: no false representation that the Oklahoma suit would be dismissed; no duty to disclose; Lone failed to prove the elements of fraud by clear, convincing evidence	Court: Affirmed. Lone failed to prove a false material representation, intent to induce inaction, or justifiable reliance by clear and convincing evidence; Rule 55(c) relief denied.
Whether the trial court properly stayed execution of the judgment until Koch personally showed cause for contempt for not attending a deposition	Lone sought stay and argued procedural bases to litigate enforcement issues; court stayed execution pending Koch’s appearance	Koch: no prior order existed compelling deposition attendance; no motion to compel or contempt proceedings had been filed, so stay was improper	Court: Reversed. The stay was premature because there was no existing order to be violated and statutory procedures govern stays of execution.

Marcinkowski v. Affirmative Risk Mgmt. Corp., 322 Ark. 580, 910 S.W.2d 679 (procedure for appealability of order denying motion to set aside default judgment)
Nationwide Ins. Enter. v. Ibanez, 368 Ark. 432, 246 S.W.3d 883 (effect of registering foreign judgment in Arkansas)
Dickson v. Fletcher, 361 Ark. 244, 206 S.W.3d 229 (Rule 55(c) / Rule 60 principles on setting aside default judgments)
West v. West, 103 Ark. App. 269, 288 S.W.3d 680 (elements of fraud required to set aside judgment)
Diebold v. Myers Gen. Agency, 292 Ark. 456, 731 S.W.2d 183 (duty to keep oneself informed; limitations on relief when plaintiff fails to monitor litigation)
Ward v. Worthen Bank & Trust Co., N.A., 284 Ark. 355, 681 S.W.2d 365 (duty to disclose and elements for silence to constitute actionable fraud)
Ivy v. Keith, 351 Ark. 269, 92 S.W.3d 671 (requirements for contempt: willful disobedience of a definite order)
Looney v. Raby, 100 Ark. App. 326, 268 S.W.3d 345 (statutory exclusive procedures for staying or vacating writs of execution)