Peck v. Peck
2016 Ark. App. 423
Ark. Ct. App.2016Background
- Robert Peck created the Peck Family Trust (May 2001) naming his wife, Hannah (Finley), as successor trustee and providing that his children (including Alison Peck) would receive trust assets after Hannah’s death.
- A share-cancellation clause stated that any child who sued to challenge the trust, attack its validity, or question Hannah’s actions as trustee would forfeit their share.
- Dispute arose over ownership and sale of a Calder painting (“Autumn Leaves”); Finley sold the Calder and deposited proceeds into her personal account.
- Multiple lawsuits followed: a 2008 action (dismissed without prejudice) in which Alison asserted a counterclaim alleging breach of fiduciary duty; a 2010 action concerning ownership (Peterson v. Peck) that went to trial and resulted in an appellate decision.
- In 2014 Alison filed the present suit alleging breach of fiduciary duty, conversion, deceit, unjust enrichment (constructive trust), and requesting an accounting and punitive damages; Finley moved to dismiss Alison’s amended complaint under the trust’s share-cancellation clause.
- The circuit court granted Finley’s Rule 12(b)(6) motion, finding Alison had forfeited beneficiary status under the share-cancellation clause; the Court of Appeals reversed and remanded.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the share-cancellation clause deprived Alison of standing to sue | Alison: clause unenforceable as to breaches in bad faith or reckless indifference under Ark. Code § 28-73-1008(a)(1); her amended complaint alleges facts showing bad faith/reckless indifference | Finley: Alison challenged trustee actions and thus triggered share-cancellation; forfeited her beneficiary interest and lacks standing | Court: Reversed dismissal — circuit court failed to evaluate amended-complaint facts on bad faith; remand to determine if allegations meet § 28-73-1008 threshold |
| Whether prior decisions (Peterson) compelled dismissal | Alison: Peterson is distinguishable (ownership dispute; trial on merits; did not consider § 28-73-1008) | Finley: Peterson interpreted the clause to be triggered by filing a challenge | Court: Peterson is not dispositive; circuit court improperly relied on it without considering Alison’s pleaded facts |
| Whether savings statute or res judicata bar this suit | Alison: did not rely on savings statute/res judicata in amended complaint | Finley: argued savings statute and res judicata bar suit based on earlier litigation | Court: Issues not properly before court on the amended complaint because Finley failed to renew those defenses against the amended complaint; appellate court will not address them |
| Proper standard on Rule 12(b)(6) dismissal | Alison: amended complaint must be viewed in plaintiff’s favor; factual allegations accepted for Rule 12(b)(6) review | Finley: claimed legal deficiency (lack of standing) justified dismissal | Court: Circuit court abused its discretion by not viewing amended-complaint facts in plaintiff’s favor and by not considering applicability of § 28-73-1008; dismissal improper without evaluation of alleged bad faith/reckless indifference |
Key Cases Cited
- Peterson v. Peck, 430 S.W.3d 797 (Ark. Ct. App. 2013) (resolved ownership of the Calder and addressed forfeiture under the share-cancellation clause at trial)
- McMullen v. McHughes Law Firm, 454 S.W.3d 200 (Ark. 2015) (amended complaint supersedes the original unless it adopts/incorporates it)
- Farmers Union Mut. Ins. Co. v. Robertson, 370 S.W.3d 179 (Ark. 2010) (same rule on amended complaints superseding originals)
- Biedenharn v. Thicksten, 206 S.W.3d 837 (Ark. 2005) (Rule 12(b)(6) review — consider four corners of the complaint and accept plaintiff’s factual allegations)
- Sanford v. Walther, 467 S.W.3d 139 (Ark. 2015) (standard of review for dismissal under Rule 12(b)(6))
- Doe v. Weiss, 2010 Ark. 150 (Ark. 2010) (review standard for motions to dismiss)