Parker v. Parker, 520 S.W.3d 693

Background

In 2006 Jeffery and Sheila Parker executed a $165,000 promissory note and mortgage to Jeffery’s parents; the note provided $859.38 monthly interest-only payments and a 30-year maturity but did not expressly state an interest rate. The mortgage was recorded; the signed note was later produced with slight date inconsistencies.
The Parkers assigned the note and mortgage to the Parker Family Trust (appellees) in 2014; appellees sued in October 2014 for foreclosure, alleging payment defaults, lapsed insurance, and tax liens. An attached copy of the note initially was blank/unsigned.
Appellants moved to dismiss and counterclaimed for conversion, outrage, ADTPA violations, usury, and unjust enrichment, arguing the note was usurious because Arkansas’s default rate (6%) conflicted with the effective rate (6.25%).
Procedurally, the circuit court denied summary-judgment motions (both sides), allowed enforcement of the note under Ark. Code Ann. § 4-3-309 despite initial failure to produce the original, and tried the case to the bench in October 2015. The court found appellants in default, entered foreclosure judgment for $165,000 plus interest, and dismissed appellants’ counterclaims with prejudice; attorney’s fees and costs were awarded to appellees.
On appeal appellants raised four issues: denial of their summary-judgment motion based on appellees’ initial failure to produce the original note; alleged indefiniteness/usury and inconsistencies between note and mortgage; dismissal of conversion claim; and dismissal of the ADTPA claim.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
1. Denial of appellants’ summary-judgment motion for appellees’ failure to produce the original note	Parkers argued appellees could not enforce the note because they failed to produce the original and appellees’ affidavits contradicted themselves about locating it	Appellees said they eventually located and produced the signed original note; § 4-3-309 allows enforcement of an instrument under certain conditions	Court rejected review of the denial of summary judgment on appeal and affirmed enforcement under the cited statute; denial not reversible here
2. Indefiniteness/usury and inconsistencies between the note and mortgage	Parkers argued the note lacked essential terms (no stated interest rate, payment-start ambiguity, conflicting dates and terms) making it unenforceable and usurious (calculated 6.25% > statutory 6%)	Appellees argued the note and mortgage must be read together as one transaction; the principal, payment date, maturity, and interest rate are ascertainable from the instruments when read together	Court found the documents, read together, formed a valid contract; effective interest rate calculable (6.25%) and not void; foreclosure proper
3. Conversion claim dismissal	Parkers claimed appellees converted tax-escrow payments by holding funds and refusing to reallocate them to cure delinquent interest payments	Appellees maintained payments were held and ultimately applied to taxes as agreed; Parkers waived right to reallocation by not directing application at time of payment	Court affirmed dismissal: appellants waived reallocation right because they sought reallocation only after missing payments; funds were applied to taxes as agreed
4. ADTPA claim dismissal	Parkers alleged appellees took advantage of disabled Sheila Parker and engaged in unconscionable, deceptive acts in violation of ADTPA	Appellees conceded Sheila met the disability definition but argued no business/consumer transaction or actual damages shown; this was a parental private loan, not a lender in trade	Court affirmed dismissal: no evidence appellees acted in business/commerce or that appellants suffered actual ADTPA damages; private claim failed

Key Cases Cited

Ball v. Foehner, 326 Ark. 409 (Ark. 1996) (denial of summary judgment is not reviewable on appeal)
McElroy v. Grisham, 306 Ark. 4 (Ark. 1990) (same principle on appellate review of summary-judgment denial)
Rick’s Pro Dive ’N Ski Shop v. Jennings-Lemon, 304 Ark. 671 (Ark. 1990) (summary-judgment denial not reviewable after trial on merits)
Malone & Hyde, Inc. v. West & Co. of La., Inc., 300 Ark. 435 (Ark. 1989) (same rule)
Price v. Willbanks, 2009 Ark. App. 849 (Ark. Ct. App. 2009) (contract formation and factual determination reserved to trial court)
Graves v. Graves, 7 Ark. App. 202 (Ark. Ct. App. 1986) (instruments in one transaction are read together to effect parties’ intent)
Choctaw, Inc. v. Great Am. Ins. Co., 235 Ark. 978 (Ark. 1964) (debtor’s right to direct application of payments)
Wallis v. Ford Motor Co., 362 Ark. 317 (Ark. 2005) (private ADTPA action requires both violation and actual damages)
Baptist Health v. Murphy, 2010 Ark. 358 (Ark. 2010) (ADTPA private cause requires showing of damages)