MICHAEL MATTOX AND PINNACLE PARTNERS, LLC v. MAIN ENTRANCE, INC.; JEFFREY CLAY SMITH; MCGILL COMPANIES, LLC; AND ALICE MATTOX
No. CV-20-342
ARKANSAS COURT OF APPEALS, DIVISION II
October 6, 2021
2021 Ark. App. 382
KENNETH S. HIXSON, Judge
APPEAL FROM THE PULASKI COUNTY CIRCUIT COURT, SIXTH DIVISION [NO. 60CV-18-645], HONORABLE TIMOTHY DAVIS FOX, JUDGE. AFFIRMED IN PART; DISMISSED IN PART.
KENNETH S. HIXSON, Judge
Appellants Michael Mattox (Mr. Mattox) and Pinnacle Partners, LLC (Pinnacle LLC), appeal from three separate orders filed by the Pulaski County Circuit Court granting partial summary judgment in favor of appellees Main Entrance, Inc. (Main Inc.); Jeffrey Clay Smith (Mr. Smith); and McGill Companies, LLC (McGill LLC).1 On appeal, appellants argue that (1) the circuit court erred because the vote by Pinnacle LLC‘s members to dismiss the case was tainted with self-interest, and Mr. Mattox‘s claims are supported by common-law theories and statutory provisions; (2) the circuit court erred because the lease does not permit Mr. Smith to violate his statutory and common-law duties; (3) the corporate
I. Relevant Background
Pinnacle LLC is an Arkansas limited liability company that was formed on December 13, 1999. Pinnacle LLC was created to purchase unimproved real property and to operate a parking lot near Verizon Arena in North Little Rock. The two principals in this business arrangement were Mr. Mattox and Mr. Smith. According to the operating agreement, Pinnacle LLC‘s original members consisted of Maverick Partners, LLC (representing Mr. Mattox‘s interest), and McGill LLC (representing Mr. Smith‘s interest). McGill LLC and Maverick Partners, LLC (Maverick LLC), each owned a 50 percent interest in Pinnacle LLC at the time the company was formed. Of interest to this litigation, the primary purpose of the company as set forth in the operating agreement was “to acquire, hold, develop, lease or sell real property.” And, the purpose of the company as set forth in the accompanying operating agreement was to “operate as a real estate ownership entity and to undertake all other types of commercial or business activities not specifically prohibited by law.” Further, the operating agreement named Mr. Mattox as the manager “who will have the authority to act on behalf of the Company [Pinnacle LLC], make all decisions regarding the day to day management of the company and shall be responsible for all administrative matters affecting the Company or its business, except as specifically otherwise provided for herein.” The operating agreement limited the manager‘s authority by also providing that “the Manager must have full and unanimous consent of all Members in any event that any action
Mr. Smith and his wife, Karla Smith (Mrs. Smith), owned 100 percent of McGill LLC. However, after the creation of Pinnacle LLC, Mr. Mattox and Ms. Mattox were divorced. As a result of the divorce, Mr. Mattox now owns 25 percent of Pinnacle LLC, and Alice Mattox (Ms. Mattox) owns 25 percent of Pinnacle LLC. Hence, at the commencement of this litigation, the ownership of Pinnacle LLC consisted of McGill LLC (the Smiths) 50 percent, Mr. Mattox 25 percent, and Ms. Mattox 25 percent.
In 1999, Pinnacle LLC purchased a piece of real property (Pinnacle parking lot) near the now Simmons Bank Arena2 in North Little Rock, Arkansas. The purchase of the property by Pinnacle LLC was financed by a promissory note and mortgage. Once Pinnacle LLC purchased and improved the property upon which the parking lot was created, the parking lot was leased to Main Inc., which was owned by Mr. Smith. The July 2000 lease agreement between Pinnacle LLC and Main Inc. (Pinnacle/Main lease) provided that Main Inc. leased the premises “for the purpose of maintaining office space and operate a parking lot or other related uses as may be desired by [Main Inc.]” (Emphasis added.) The lease also provided that Main Inc. would lease the parking lot for $1500 a month. Apparently, there was a side agreement between Mr. Mattox and Mr. Smith that Main Inc. would remit the
Apparently, this arrangement ran smoothly from 2000 to 2012. Main Inc. remitted the payments to the finance company until the mortgage was paid off in May 2012. For some reason not revealed in the record, Main Inc. did not remit the post-May 2012 monthly lease payments to Pinnacle LLC, and these nonpayments were the genesis of the underlying dispute among the parties.
This dispute came to a head in 2016. Mr. Mattox alleged that Main Inc. was in arrears of the Pinnacle/Main lease in the approximate amount of $72,000 including late fees. After a demand was made, Main Inc. paid $30,000 in June 2016 and another $40,000 in October 2016.3 By the time Mr. Mattox, on behalf of Pinnacle LLC, filed his original complaint, he alleged that Main Inc. was in arrears in the amount of $37,100 plus $30 a day going forward.
II. Litigation Leading to the Circuit Court‘s First Order on Appeal
The case before us contains multiple pleadings filed by appellant, Mr. Mattox. Not only did Mr. Mattox file pleadings allegedly on behalf of Pinnacle LLC as the managing member and authorized representative, but Mr. Mattox also filed pleadings on behalf of himself, individually. This cross-contamination of the pleadings by Mr. Mattox contributes to some of the complications of the issues below and herein on appeal. The timing of the
Mr. Mattox filed the оriginal complaint as the managing member of Pinnacle LLC (owner/lessor) for unlawful detainer against Main Inc. (lessee) and Mr. Smith. This original complaint generally alleged that Pinnacle LLC owned real property that was being operated as a parking lot (Pinnacle parking lot), that Pinnacle LLC leased the premises to Main Inc., and that Main Inc. was in default for nonpayment. The original complaint further alleged that despite being in default, Main Inc. (lessee) and its owner, Mr. Smith, unlawfully remained in possession of the leased premises and that Pinnacle LLC should be awarded immediate possession of the leased premises and a judgment for unpaid rent and late fees.
Appellees, Main Inc. and Mr. Smith, filed both an objection to the issuance of the writ of possession and an answer4 alleging, inter alia, that Mr. Mattox did not have the right, power, or authority to declare the lease in default or to take legal action on behalf of Pinnacle LLC. They explained that because Mr. Mattox owned only a 25 percent interest in Pinnacle LLC, the complaint filed on behalf of Pinnacle LCC was not authorized by the majority of its members. They also alleged that the Pinnacle/Main lease remained in full force and
To counter the new allegations challenging his authority, Mr. Mattox filed a response on behalf of Pinnacle LLC. Mr. Mattox alleged that the operating agreement gave him authority to act on behalf of Pinnacle LLC and that because McGill LLC and Mr. and Mrs. Smith5 were delinquent in their financial obligations to Pinnacle LLC, they had no authority to disqualify Mr. Mattox from acting on behalf of Pinnacle LLC.
Shortly thereafter, Pinnacle LLC members Ms. Mattox and Mr. Smith, on behalf of McGill LLC and representing 75 percent of the membership, decided to call a meeting of the membership of Pinnacle LLC, and notices of the meeting were distributed to all members, including Mr. Mattox. At 9:00 a.m. on April 19, 2018, a meeting of the members of Pinnacle LLC was held. The minutes of the meeting provided that Mr. Mattox was notified of the meeting through his counsel and that Mr. Mattox‘s counsel replied, “I have conveyed the notice of the meeting to Michael Mattox. He is not agreeing to dismiss the lawsuit or resign as manager of Pinnacle Partners, LLC, but he further advised that he will not attend the meeting.” Those attending the meeting were Ms. Mattox, representing her 25 percent ownership, and Mr. Smith on behalf of McGill LLC, representing its 50 percent ownership. The minutes indicated that the first motion was to remove Mr. Mattox as managing member and replace him with Mr. Smith as managing member. The next order of business was to terminate the lawsuit—Pinnacle Partners, LLC v. Main Entrance, Inc., et
Armed with the new resolutions of Pinnacle LLC, both Main Inc. and Mr. Smith filed what was later deemed its first motion for partial summary judgment. The substance of the first motion for partial summary judgment is condensed to the following: (1) Mr. Mattox is no longer an authorized representative of Pinnacle LLC; (2) the members of Pinnacle LLC voted to terminate the lawsuit Pinnacle Partners, LLC v. Main Entrance, Inc., et al., Pulaski County Circuit Court Case No. 60CV-18-645; and (3) that as a matter of law, the motion for partial summary judgment should be granted and Pinnacle LLC‘s complaint dismissed with prejudice.
After the first motion for summary judgment was filed, Mr. Mattox filed a first amended complaint again alleging that he was the authorized representative of Pinnacle LLC. Mr. Mattox further inserted himself, individually, as a party plaintiff. Mr. Mattox essentially repeats the allegations for unlawful detainer specifically alleging that Main Inc. and Mr. Smith had breached the Pinnacle/Main lease and remained unlawfully on the leased premises. However, Mr. Mattox included a myriad of new allegations including causes of action for declaratory judgment, injunctive relief, and damages for self-dealing. Most of these allegations emanated from Mr. Mattox‘s belief that Mr. Smith was guilty of self-dealing as a result of Mr. Smith‘s simultaneous ownership interests in McGill LLC (who is a member of Pinnacle LLC), Main Inc. (the lessee), and a third business, Peri Investments, LLC (Peri
- Judgment declaring that:
- Smith‘s purchase of the unimproved lot adjacent to Pinnacle Partner‘s improved parking lot through Peri Investments was a usurpation оf Pinnacle Partners’ opportunities, self-dealing, and bad faith on the part of Smith;
- Smith‘s use of Pinnacle Properties’ parking lot to allow vehicles to travel across the improved parking lot to the unimproved lot for parking at events is self-dealing and bad faith;
- McGill Companies’ vote on April 19, 2018, is void because Smith (or Smith and his wife) through his or their ownership of Main Entrance and Peri Investments had a self-interest in the vote to dismiss the lawsuit; and
- Alice Mattox‘s 1/4 interest was insufficient to carry the vote, and Mattox has complete authority to evict a non-paying tenant such as Main Entrance;
- Injunction against Smith from using Pinnacle Partners’ parking lot to give vehicles access from Magnolia Street to Peri Investments’ unimproved lot for parking at events;
Judgment against Smith and in favor of Mattox for money damages in the amount of at least $122,556.00, plus pre- and рost-judgment interest accruing at the highest legal rate, costs, and attorney‘s fees pursuant to Ark. Code Ann. § 16-22-308 ; and- all other just and proper relief to which Plaintiffs are entitled.
Not only did Mr. Mattox file his first amended complaint, but he also filed a response to the first motion for partial summary judgment. Mr. Mattox‘s response essentially mirrored the arguments he made in this first amended complaint.
A hearing on the first motion for partial summary judgment was held. The previous chronology is important because at the hearing, the circuit court recognized that Mr. Mattox raised new substantive issues in the first amended complaint that was filed after the first motion for partial summary judgment had been filed. In this first amended complaint, there were claims pertaining to Pinnacle LLC, as plaintiff, and there were claims pertaining to Mr. Mattox, individually, as plaintiff. At the conclusion of the hearing, the circuit court stated the following regarding the motion for partial summary judgment:
Now, let‘s talk about the motion for partial summary judgment. When this case first started -- actually, when it first started I believe it was basically just an unlawful detainer action. There was a -- no, it was just a complaint in unlawful detainer when it first started, with just Pinnacle Partners, LLC. That was the original complaint filed on January 31, 2018. It‘s changed, both parties and causes of action, since that time.
So, Mr. Niswanger [Mr. Mattox‘s counsel], here‘s what I see from the pleadings, the things that do not seem to be in dispute. The folks with 75 percent of the shares of the LLC got together and voted Mr. Mattox out as managing partner. He had notice of the meeting and did not attend the meeting. I don‘t know that if he had attended -- 75 percent vs. 25 percent, last time I checked, that‘s not only a majority, that‘s always a super majority. So I read everything in the argument, responsive arguments about voidable and those types of things, and it still seems like it‘s summary [judgment] as far as Pinnacle Partners, LLC. There‘s a new managing partner that‘s got 75 percent of the vote, and the vote was to dismiss this action with prejudice, and that‘s in the file; it‘s some of the attachments to the motion for partial summary judgment. But the first amended complaint states a number of causes of actions on
behalf of Mr. Mattox individually, about how he‘s been treated as a minority shareholder, and with respect to some of the other arguments that you made on his behalf in his individual capacity. I don‘t know that the motion for partial sought to address those, to any extent that it does, it‘s denied. The bottom line is it seems to me there‘s no material facts in dispute that Pinnacle Partners, LLC, with its current managing partner, has voted to dismiss this аction with prejudice, and that‘s going to be granted, as far as Pinnacle Partners, LLC. So there will be one plaintiff versus still everybody that was named, unless subsequent pleadings clean that up with respect to -- I don‘t know if Ms. Mattox will still be there or not there. Probably. With the arguments that were made, it appears to me that at this point in time, yes, because there‘s an argument that there was some unfairness that went on with respect to the treatment of the minority shareholder. As to whether there was or wasn‘t, we‘re not here for that today.
(Emphasis added.) When the circuit court was specifically asked by Mr. Mattox‘s counsel whether it found any merit to the argument that the vote was tainted with self-interest, it responded,
There‘s not anything that rose to any level for Pinnacle Partners, LLC, that I thought would stop a summary judgment on that motion. Now, some of those arguments and those operative facts that you have alleged, they may or may not be important with respect to an individual cause of action by Mr. Mattox, and that‘s still viable, and we‘re not addressing that today. And if you-all don‘t resolve it otherwise, then I presume at some point in time we‘ll have a jury trial on it.
(Emphasis added.) Thereafter, on July 17, 2018, the circuit court filed its first order granting partial summary judgment and denying the motion to dismiss. The order stated, “[F]or the reasons stated from the bench . . . the Motion for Partial Summary Judgment is hereby GRANTED. The Complaint and First Amended Complaint of the Plaintiff, Pinnacle Partners, LLC, are dismissed with prejudice; the First Amended Complaint of Plaintiff, Michael Mattox, remains pending.” (Emphasis in the original.) Thus, it is clear that the intent of the circuit court was to dismiss with prejudice the lawsuit of Pinnacle LLC while preserving any pending claims individually on behalf of Mr. Mattox, and we must first examine whether the circuit court‘s decision was reversible error.
Summary judgment mаy be granted only when there are no genuine issues of material fact to be litigated, and the moving party is entitled to judgment as a matter of law. Greenlee v. J.B. Hunt Transp. Servs., 2009 Ark. 506, 342 S.W.3d 274. The burden of sustaining a motion for summary judgment is always the responsibility of the moving party. McGrew v. Farm Bureau Mut. Ins. Co. of Ark., 371 Ark. 567, 268 S.W.3d 890 (2007). Once the moving party has established a prima facie entitlement to summary judgment, the opposing party must meet proof with proof and demonstrate the existence of a material issue of fact. Greenlee, supra. However, if a moving party fails to offer proof on a controverted issue, summary judgment is not appropriate, regardless of whether the nonmoving party presents the court with any countervailing evidence. Moses v. Bridgeman, 355 Ark. 460, 139 S.W.3d 503 (2003). On appellate review, this court determines if summary judgment was appropriate by deciding whether the evidentiary items presented by the moving party in support of the motion leave а material fact unanswered. Greenlee, supra. We view the evidence in the light most favorable to the party against whom the motion was filed, resolving all doubts and inferences against the moving party. Id. Our review focuses not only on the pleadings but also on the affidavits and other documents filed by the parties. Id. However, when there is no material dispute as to the facts, we determine on review whether “reasonable minds” could draw “reasonable” inconsistent hypotheses to render summary judgment inappropriate. Town of Lead Hill v. Ozark Mountain Reg‘l Pub. Water Auth., 2015 Ark. 360, 472 S.W.3d 118. In other words, when the facts are not at issue but possible inferences therefrom are, the court will consider whether those inferences can be reasonably
IV. Appeal from the Circuit Court‘s First Order
While the various pleadings are somewhat complicated and intertwinеd, when one separates the wheat from the chaff, the issues presented in the first motion for partial summary judgment were not. On the one hand, Main Inc. and Mr. Smith argued that because the majority of Pinnacle LLC‘s members voted to remove Mr. Mattox as the managing member and to dismiss this lawsuit for, or on behalf of, Pinnacle LLC, Mr. Mattox “is not authorized to maintain or prosecute a lawsuit for or on behalf of Pinnacle.” Therefore, they argued that Pinnacle LLC‘s lawsuit should be dismissed. On the other hand, Mr. Mattox, purportedly on behalf of Pinnacle LLC and himself individually, disagreed, arguing that neither he nor Pinnacle LLC was “bound by the April 19 vote because it was tainted with self-interest and was made in bad faith, and so the vote should be voided.” He went on to explain, “McGill Companies’ vote on April 19, 2018, should be voided because Smith (or Smith and his wife) through his (or their) ownership of Main Entrance and Peri Investments had a self-interest in the vote to dismiss the lawsuit. His (or their) vote to alleviate Mattox‘s authority to evict Main Entrance was made in bad faith and is a breach of the Operating Agreement. Alice Mattox‘s 1/4 interest was insufficient to carry the vote.”
In its first order, the circuit court dismissed the complaint and first amended complaint as to Pinnacle LLC only. At the hearing, the circuit court specifically explained that any individual claims of Mr. Mattox, including any arguments regarding how he had been treated as a minority shareholder, were still viable and were not being addressed at that
Recall that the ownership of Pinnacle LLC consisted of 50 percent McGill LLC (the Smiths), 25 percent Ms. Mattox, and 25 percent Mr. Mattox. Even assuming arguendo that Mr. Mattox‘s arguments on behalf of Pinnacle LLC had merit and that McGill LLC‘s votes should be invalidated because they were “tainted with self-interest,” the circuit court did not err in dismissing Pinnacle LLC‘s suit on the basis of the provisions of Pinnacle LLC‘s operating agreement and the undisputed evidence that Ms. Mattox, representing her 25 percent ownership interest, also voted to dismiss the suit. We may affirm a circuit court
Here, Pinnacle LLC‘s operating agreement set out who has authority to act on behalf of Pinnacle LLC. The operating agreement states, pursuant to § 5.2 Management Responsibilities, that Pinnacle‘s manager “had the authority to act on behalf of the Company [Pinnacle LLC], make all decisions regarding the day to day management of the company and shall be responsible for all administrative matters affecting the Company or its business, except as specifically otherwise provided for herein.” However, the operating agreement limited the manager‘s authority and also provided, under § 5.4 Extraordinary Matters, that “the Manager must have full and unanimous consent of all Members in any event that any action of the Manager shall in any way obligate or bind the Company for any sum greater than $1,000.”
When contracting parties express their intention in a written instrument in clear and unambiguous language, it is the court‘s duty to construe the writing in accordance with the plain meaning of the language employed. In re Estate of Cook v. Willhite, 2020 Ark. App. 292, 601 S.W.3d 453. We must consider the sense and meaning of the words used by the parties as they are taken and understood in their plain and ordinary meаning. Id. It is a well-settled rule that the intention of the parties to a contract is to be gathered, not from particular words and phrases, but from the whole context of the agreement. Id. On appeal from a circuit court‘s determination of a purely legal issue, we must decide only if its interpretation of the law was correct, as we give no deference to the circuit court‘s conclusion on a question of law. Id.
That brings us to appellees’ argument on appeal that we should also dismiss any appeal Mr. Mattox filed on behalf of Pinnacle LLC. The second amended notice of appeal was filed by Mr. Mattox‘s counsel. In it, counsel acknowledged that the other members of Pinnacle LLC—McGill LLC and Ms. Mattox (colleсtively accounting for a 75 percent interest of the members of Pinnacle LLC)—had given notice that Mr. Mattox did not have the authority to represent Pinnacle LLC in filing an appeal. Nevertheless, the second amended notice of appeal stated that Mr. Mattox refused to dismiss Pinnacle LLC‘s appeal, and Mr. Mattox‘s counsel stated that he purported “to represent Pinnacle Partners but only to the extent necessary to preserve the appellate rights herein.” Pinnacle LLC‘s appeal arises from its lawsuit that was not unanimous as required pursuant to § 5.4 of the operating agreement, and Pinnacle LLC‘s lawsuit was dismissed with prejudice by the circuit court. Therefore, for the same reasons we affirmed the circuit court‘s decision that Pinnacle LLC‘s lawsuit had to be dismissed because unanimous consent was required under the circumstances, we must also agree with appellees and dismiss Pinnacle LLC‘s appeal. However, having dismissed the appeal of Pinnacle LLC, Mr. Mattox‘s concerns that the voting was tainted with self-dealing remain reviewable in this appeal and are reviewed in his individual claims against appellees in the second and third orders granting partial summary judgment below.
After the circuit court dismissed with prejudice the complaint and first amended complaint on behalf of Pinnacle LLC, leaving only Mr. Mattox‘s individual claims, Main Inc. and Mr. Smith filed their second motion for partial summary judgment. In Mr. Mattox‘s first amended complaint, he alleged, inter alia, that Arkansas Code Annotated section 4-32-402(2) (Repl. 2016)7 prohibits “tainted self-dealing transactions, usurpation of entity opportunities, and competition,” and he alleged that it was under this provision that he was entitled to declaratory judgment on his individual self-dealing claims. In the appellees’ second motion for partial summary judgment, they argued that Mr. Mattox‘s remaining individual claims regarding self-dealing should also be dismissed “due to, inter alia, the clear language of A.C.A. § 4-32-402(2), lack of standing, lack of privity, lack of any duty, statute of limitations and clear language of Main [Inc.‘s] lease with Pinnacle.” More specifically, Main Inc. and Mr. Smith argued that Arkansas Code Annotated section 4-32-402(2), relied upon by Mr. Mattox, did not create an individual right of action in Mr. Mattox but that the plain language of the statute gave such a right to the company—in this case Pinnacle LLC. Moreover, they argued that neither Main Inc. nor Mr. Smith has any privity with,
The second motion for partial summary judgment was supported by Mr. Smith‘s affidavit and documentation. In his affidavit, Mr. Smith admitted that he was the owner of Main Inc., the lessee. He also repeated and affirmed many of the facts already outlined above. Additionally, Mr. Smith stated that he had told Mr. Mattox about the purchase of the Peri LLC property either at the time of the purchase or shortly thereafter. He explained that the parties thought the Peri LLC property would improve the marketability of the Pinnacle LLC property and that no one has ever voiced an objection to the purchase of, or to Main Inc.‘s parking vehicles on, the Peri LLC property by driving through the Pinnacle parking lot. Also, Ms. Mattox submitted an affidavit stating that she had never complained about the parked vehicles in the Peri parking lot nor had she heard Mr. Mattox complain until he voiced his objections in this case. Ms. Mattox joined in requesting that the second motion for partial summary judgment be granted.
- Judgment declaring that:
- Smith‘s purchase of the lots adjacent to Pinnacle Partner‘s improved parking lot through Peri Investments was a usurpation of Pinnacle Partners’ opportunities, self-dealing, and bad faith on the part of Smith;
- Smith‘s use of Pinnacle Properties’ parking lot to allow vehicles to travel across the improved parking lot to the unimproved lot for parking at events is self-dealing and bad faith;
- Injunction against Smith from using Pinnacle Partners’ parking lot to give vehicles access from Magnolia Street to Peri Investments’ unimproved lot for parking at events;
- Judgment against Smith and Peri Investments and in favor of Mattox for money damages in the amount of secret profits derived from the adjacent lots purchased by Smith through Peri Investments, plus pre- and post-judgment interest accruing at the highest legal rate, costs, and attorney‘s fees pursuant to
Ark. Code Ann. § 16-22-308 ; and - all other just and proper relief to which Plaintiffs are entitled.9
Main Inc., Mr. Smith, and McGill LLC subsequently filed an answer to this second amended complaint, and as with the answer to the first amended complaint, they generally denied the allegations, requested that the complaint be dismissed, and pleaded the affirmative
The circuit court held a hearing on the second motion for partial summary judgment on November 12, 2019, and the parties orally argued their respective positions as set out in the pleadings. At the conclusion of the hearing, the circuit court recognized that, once again, Mr. Mattox had filed his second amended complaint after appellees’ second motion for summary judgment was filed, and the second amended complaint raised new substantive issues against a new added party, McGill LLC. As a result of the new allegations set forth in the second amended complaint, the court ruled as follows:
All right. I‘m granting the motion [for partial summary judgment] with respect to the cause of action in the parties that were present at the time of the first amended complaint. I am not making any ruling with respect to the new party [McGill LLC] or any new causes of action.
On November 25, 2019, the circuit court entered an order containing the following pertinent language:
[B]ased upon the Motion, the responses and replies thereto, the arguments of counsel at the hearing and for the reasons stated from the bench, the Motion as to all claims against defendants, Main Entrance, Inc. and Jeffrey Clay Smith, is hereby GRANTED; since the Second Amended Complaint was filed and the defendant, McGill Companies, LLC, was added as a defendant after the Motion was filed, the Motion as to defendant, McGill Companies, LLC, is hereby DENIED. The First Amended Complaint and Second Amended Complaint of Plaintiff, Michael Mattox, are dismissed with prejudice as to defendants, Main Entrance, Inc. and Jeffrey Clay Smith, but remains pending as to defendant, McGill Companies, LLC, only.
(Emphasis in the original.)
The litigation continued. With McGill LLC the only remaining defendant based on Mr. Mattox‘s allegations in the second amended complaint, McGill LLC filed what we are
VI. Appeal from the Circuit Court‘s Second and Third Orders
The circuit court dismissed Mr. Mattox‘s individual claims as alleged in the second amended complaint against appellees in its second and third order granting partial summary judgment. In his opening brief to this court, Mr. Mattox argues several points as to why the circuit court erred in granting the second and third motions for partial summary judgment, including his continuing argument that the pinnacle LLC vote should be voided due to self-dealing by Mr. Smith. However, before addressing the merits of these points, we must first address appellees’ argument that we must summarily affirm.
In both its second and third order, the circuit court states that its ruling is “based upon the Motion, the responses and replies thereto, the arguments of counsel at the hearing and for the reasons stated from the bench.” (Emphasis added.) However, the circuit court‘s
Here, appellees correctly argue that the circuit court is deemed to have accepted all the arguments advanced by appellees in their second and third motions for partial summary judgment with its blanket ruling, including their contention that Mr. Mattox‘s claims as alleged in the second amended complaint were barred by the statute of limitations. Id. Generally, appellees argued below, inter alia, in the second and third motions for partial summary judgment that any alleged self-dealing or fraud occurred eight years earlier in 2008 when Mr. Smith‘s other entity, Peri LLC, purchased and began operating the Peri parking lot. Hence, the statute of limitations for fraud is three years and the litigation is time-barred. Mr. Mattox did not raise or argue this statute-of-limitations issue in his opening brief. Because Mr. Mattox does not raise an argument to contest that finding in his opening brief, we cannot address any issue regarding the circuit court‘s decision to grant partial summary judgment to appellees in response to Mr. Mattox‘s first and second amended complaints.
V. Conclusion
In conclusion, we affirm the circuit court‘s orders, and to the extent Mr. Mattox is purporting to file an appeal on Pinnacle LLC‘s behalf, we must dismiss it.
Affirmed in part; dismissed in part.
ABRAMSON and VIRDEN, JJ., agree.
Niswanger Law Firm PLC, by: Stephen B. Niswanger, for appellants.
A. Vaughan Hankins, for separate appellees Main Entrance, Inc.; Jeffrey Clay Smith; and Peri Investments, LLC.
Notes
Arkansas Code Annotated section 4-32-402(2) provides,
Every member and manager must account to the limited liability company and hold as trustee for it any profit or benefit derived by that person without the consent of more than one-half (1/2) by number of the disinterested managers or members, or other persons participating in the management of the business or affairs of the limited liability company, from any transaction connected with the сonduct or winding up of the limited liability company or any use by the member or manager of its property, including, but not limited to, confidential or proprietary information of the limited liability company or other matters entrusted to the person as a result of his or her status as manager or member.