Worley v. City of Jonesboro
2011 Ark. App. 594
Ark. Ct. App.2011Background
- Worleys bought a Jonesboro home from Drum in July 2002, with Crye-Leike and Isbell listed as both seller and buyer agents.
- The real estate contract included an as-is clause and a Buyer’s Disclaimer of Reliance, stating buyers would not rely on seller or agent representations beyond what they personally inspected.
- A Seller Property Disclosure form disclosed no known drainage problems beyond temporary standing water, with Drum stating it drains quickly and knowledge to the best of her knowledge.
- Worleys alleged flooding/drainage problems and related fraud claims against Drum, Crye-Leike, and Isbell, plus a claim of unlawful taking against the City of Jonesboro; they sought damages, injunctive relief, and fees.
- Crye-Leike and Isbell moved for summary judgment, arguing they did not assist Drum or know of drainage issues; Drum and Worleys submitted opposing affidavits and deposition excerpts; the trial court granted summary judgment on key claims.
- Jury later awarded Worleys $15,000 against City of Jonesboro; injunctive relief was denied; this prompted direct and cross-appeals related to summary judgment and attorney’s fees.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether summary judgment was proper on fraud claims | Worley contends Drum misrepresented drainage; constructive fraud established by undisclosed issues and reliance. | Crye-Leike/Isbell and Drum argue no misrepresentation beyond owner disclosures; as-is/disclaimer clauses negate reliance. | Yes; summary judgment proper against Worleys on those fraud claims. |
| Whether Worleys had justifiable reliance despite as-is and disclaimers | Worley asserts reliance on disclosures and inspector; Beatty distinguished but does not bar here. | Defendants rely on as-is clause and Buyer’s Disclaimer of Reliance; no duty to disclose for agents beyond owner disclosures. | Reliance not proven; summary judgment affirmed for Crye-Leike/Isbell on this element. |
| Whether attorney’s fees were properly awarded under contract | Worleys challenge reasonableness and the scope of fee-shifting rights. | Contract §28 mandates fees for prevailing party; fees must be reasonable but are permissible. | Contractual award affirmed; fees limited to reasonable amounts per case law. |
| Whether cross-appeal limits on fee awards were correct | Worleys argue fees should be broader under contract terms not limited by reasonableness. | Appellees urge that the contract allows all fees but must be reasonable; Phi Kappa Tau does not control here. | Reasonableness framework controls; cross-appeal rejected; fees validated within reasonableness bounds. |
| Whether the City of Jonesboro verdict should be vacated if summary judgment is reversed | Worleys propose vacating the Jonesboro verdict if summary judgment reversed. | No reversal of Jonesboro verdict requested; issue moot if summary judgment affirmed. | Not necessary to address; verdict stands as affirmed. |
Key Cases Cited
- Beatty v. Haggard, 87 Ark.App. 75, 184 S.W.3d 479 (Ark. App. 2004) (as-is clause does not bar fraud claims when disclosures are at issue)
- Barringer v. Hall, 89 Ark.App. 293, 202 S.W.3d 568 (Ark. App. 2005) (as-is clause and reliance disclaimers do not foreclose fraud claims where misrepresentation proven)
- Thomas v. Olson, 364 Ark. 444, 220 S.W.3d 627 (Ark. 2005) (affirmed sellers’ verdict where disclaimers noted; foundation problems context)
- Griffin v. First National Bank of Crossett, 318 Ark. 848, 888 S.W.2d 306 (Ark. 1994) (implicit reasonableness standard in fee-shifting contract awards)
- Phi Kappa Tau Housing Corp. v. Wengert, 350 Ark. 335, 86 S.W.3d 856 (Ark. 2002) (absent a 'reasonable' qualifier, broader contract fee language still subject to reasonableness)