Patton Hospitality Management, LLC v. Bella Vista Village Coopershares Owners Ass'n
2016 Ark. App. 281
Ark. Ct. App.2016Background
- Bella Vista Village Coopershares Owners Association (Association) owned Greens I resort; Patton Hospitality Management (Patton) became the management company by assignment under earlier management agreements.
- A 2004 Affiliation Agreement among the Association, Escapes!/ETC, and others required the Association to notify ETC of any change affecting resort operation, including termination of a management company.
- In January 2013 the Association, Patton, and ETC executed a Tri-Party Agreement containing a broad merger clause and a termination procedure that extended the management term annually unless either party gave 90 days’ notice; the Tri-Party Agreement did not require notice to ETC.
- The Association gave Patton notice it would not extend the management agreement (letters in July 2013 and August 2014) but did not notify ETC; Patton sued in Dec. 2014 for breach and related relief; ETC was not a party.
- The circuit court granted summary judgment for the Association, holding the 2013 Tri-Party Agreement superseded the 2004 Affiliation Agreement (eliminating any obligation to notify ETC); ordered Patton to transfer Association property to the Association.
- After summary judgment the court awarded the Association $22,941.50 in attorney’s fees under Ark. Code Ann. § 16-22-308 and found Patton in civil contempt for failing promptly to turn over Association property; Patton appealed.
Issues
| Issue | Plaintiff's Argument (Patton) | Defendant's Argument (Association) | Held |
|---|---|---|---|
| Whether the 2013 Tri-Party Agreement superseded the 2004 Affiliation Agreement (notice-to-ETC requirement) | Tri-Party merger clause should be read narrowly; Affiliation Agreement survives because it was not an exhibit and its notice provision is not "contemplated" by the Tri-Party Agreement | Tri-Party Agreement expressly supersedes prior agreements on the same subject; both agreements cover termination procedures so merger clause is effective | Tri-Party Agreement supersedes the Affiliation Agreement; no duty to notify ETC |
| Whether summary judgment was premature because ETC was not a party or discovery incomplete | ETC was an indispensable party; discovery needed to resolve intent/ambiguities | Contract interpretation presents pure questions of law; no indispensable-party ruling was sought; merger clause and terms are unambiguous | Court properly granted summary judgment; Patton waived the indispensable-party claim for lack of ruling; discovery unnecessary for unambiguous contracts |
| Whether attorney’s fees under Ark. Code Ann. § 16-22-308 were authorized and reasonable | Case not primarily contract-based; fees included non-contract matters and duplicative dual representation | Action was primarily based in contract (resolution depended on contract interpretation); fees reasonable for complex litigation | Fees awarded were authorized and not an abuse of discretion; award affirmed |
| Whether contempt finding was improper because order was ambiguous or compliance occurred | Summary-judgment order was ambiguous as to "all property," jointly held items, and timing; Patton had relinquished bank info and disputed tangible items | Order unambiguously required immediate transfer of all Association property; Patton retained equipment and keys; failure was willful and malicious | Contempt finding affirmed; order clear and evidence supports willful noncompliance |
Key Cases Cited
- Nichols v. Farmers Ins. Co., 83 Ark. App. 324, 128 S.W.3d 1 (summary-judgment standard)
- Beaver v. John Q. Hammons Hotels, Inc., 81 Ark. App. 413, 102 S.W.3d 903 (summary-judgment review)
- Elam v. First Unum Life Ins. Co., 346 Ark. 291, 57 S.W.3d 165 (contract interpretation can be decided as a matter of law)
- Tunnel v. Progressive N. Ins. Co., 80 Ark. App. 215, 95 S.W.3d 1 (construction of unambiguous contract is question of law)
- Tri-Eagle Enters. v. Regions Bank, 2010 Ark. App. 64, 373 S.W.3d 399 (initial determination of contract ambiguity)
- Aceva Techs., LLC v. Tyson Foods, Inc., 2013 Ark. App. 495, 429 S.W.3d 355 (merger/novation principles for integrated agreements)
- Hanners v. Giant Oil Co. of Ark. Inc., 373 Ark. 418, 284 S.W.3d 468 (extrinsic evidence for ambiguous contracts)
- Ivy v. Keith, 351 Ark. 269, 92 S.W.3d 671 (requirements for contempt: order must be definite and clear)