Sexton v. Sowell
2016 Ark. App. 574
| Ark. Ct. App. | 2016Background
- In May 2012 Sexton, Bargiel, and Beaver Liquor (buyers) purchased a Fort Smith liquor-store business from Scott and Lynn Sowell and Town & Country, LLC (sellers) for $450,000: $80,000 paid at closing and a $370,000 promissory note payable in monthly installments secured by a security agreement and an assignment of sublease.
- Buyers made payments from July 2012 through July 2013 (some late); in May 2013 buyers requested and received a partial payment arrangement for that month.
- On August 11, 2013 sellers repossessed the store assets and changed the locks; buyers then sued for breach of contract and conversion (later adding unjust enrichment).
- Sellers counterclaimed for breach; both parties moved for summary judgment. The circuit court granted summary judgment for sellers, concluding buyers breached and sellers were not required to provide notice before repossession; the court awarded possession of assets and offset repossession expenses against the $80,000 down payment, awarding no other damages.
- Buyers filed a Rule 52(b) motion asking the court to amend findings to award them $91,666.69 to account for monthly payments if rescission restored the status quo (first time they sought rescission-based damages). That motion was filed November 3, 2015 and was deemed denied on December 3, 2015. Buyers filed a notice of appeal on November 19, 2015 (before the motion was deemed denied) and did not amend it to appeal the deemed denial.
- On appeal the Court of Appeals held the buyers’ rescission/damages argument was not preserved (they failed to amend their notice of appeal to include the deemed-denied posttrial motion) and affirmed the summary-judgment order.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether sellers were required to give notice before repossessing assets | Buyers: repossession without notice breached the asset-purchase agreement | Sellers: contracts allowed repossession without notice and buyers were in breach | Court: on the undisputed contracts and facts, buyers breached and sellers were not required to give notice (circuit court granted summary judgment for sellers) |
| Whether the trial court erred by not awarding rescission-based restitution (crediting monthly payments) | Buyers: trial court rescinded contracts and should have restored status quo by crediting monthly payments, entitling them to $91,666.69 | Sellers: (procedural) buyers’ rescission/damages claim was raised only in the Rule 52(b) motion and not preserved for appeal | Court: buyers’ argument not preserved—posttrial motion was deemed denied and buyers failed to amend their notice of appeal to include the denial, so the appellate court cannot reach the claim; affirmance required |
Key Cases Cited
- Tate-Smith v. Cupples, 355 Ark. 230 (court rule that a deemed-denied posttrial motion leaves the original order as the only appealable matter)
- Vibo Corp. v. State ex rel. McDaniel, 2011 Ark. 124 (failure to amend notice of appeal after a posttrial motion is deemed denied results in unpreserved issues on appeal)