Articles Posted in Business Law

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The circuit court determined that appropriations made by ordinances or resolutions of the cities of Little Rock and North Little Rock (Appellants) to the cities’ chambers of commerce and related economic development entities were in violation of article 12, section 5 of the Arkansas Constitution. The court concluded that Appellants had appropriated city funds to private corporations using “service contracts” that violated article 12, section 5 and were invalid due to lack of consideration and absence of benefits to the taxpayers. The court permanently enjoined Appellants from passing such ordinances or resolutions. The Supreme Court remanded the case to the circuit court with instructions to lift the injunction and dismiss Appellees’ complaint, holding that an amendment to article 12, section 5 rendered the basis for the circuit court’s injunction moot. View "Stodola v. Lynch" on Justia Law

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Following the bankruptcy of BioBased Technologies, LLC, certain members of BioBased (Appellants) brought an action against other members, the members’ lawyers, and the managers of the corporation for fraud, breach of duty to disclose company information, conversion of membership interest, civil conspiracy, and breach of contract. The circuit court granted summary judgment on some claims, dismissed some claims, and found that the remainder of the claims were barred by collateral estoppel and res judicata. The Supreme Court reversed, holding (1) the circuit court erred in granting summary judgment on Appellants’ claims for fraud, breach of duty to disclose company information, and conversion of membership interest claims based on Appellants’ lack of standing, as Appellants had standing to assert their claims; (2) the circuit court erred in granting summary judgment on Appellants’ fraud claim against certain defendants on the basis that Appellants “failed to meet proof with proof” to show that the defendants made false representations of fact; (3) the circuit court erred in dismissing claims for lack of subject-matter jurisdiction; and (4) the circuit court erred in concluding that the bankruptcy proceeding had res judicata or collateral estoppel effect on Appellants’ state-law claims. Remanded. View "Muccio v. Hunt" on Justia Law

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Appellant pleaded guilty to rape and was sentenced as a habitual offender to 180 months’ imprisonment. Appellant subsequently filed a petition for writ of habeas corpus, making several allegations. The circuit court denied the petition without a hearing, concluding that the allegations were conclusory in nature and failed to state a basis for a writ of habeas corpus to issue. The Supreme Court affirmed the circuit court’s order and denied Appellant’s motion to file a belated reply brief, holding that the circuit court did not err when it denied the petition, as Appellant did not establish a basis for a writ of habeas corpus to issue. View "Tolefree v. State" on Justia Law

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This matter began when the state insurance commissioner filed a petition for receivership against Signature Life Insurance Company of America, which had become insolvent. The commissioner was appointed receiver and began to rehabilitate Signature. The successor to the commissioner then filed a complaint against Frank Whitbeck, the sole shareholder and director of Signature, who obtained the loans from the company resulting in its insolvency, and several LLCs, all of which were owned by Whitbeck. This action was settled. The circuit court subsequently approved a rehabilitation plan for Signature. Due to Whitbeck's failure to perform under the rehabilitation plan, the receiver filed a petition for order of liquidation and for foreclosure and replevin. The circuit court entered an order of liquidation and a foreclosure and replevin decree ordering the sale of the real property. Whitbeck filed a complaint seeking a declaration that the receiver's alleged malfeasance and nonfeasance extinguished and released Defendants from any further liability. The circuit court dismissed the complaint. The Supreme Court affirmed, holding that Whitbeck's claims were barred by the claim preclusion facet of res judicata, and the circuit court did not err in dismissing Whitbeck's action. View "Whitbeck v. Bradford" on Justia Law

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Appellants filed a complaint against Appellees asserting claims for conspiracy, fraud, and violating the Arkansas Deceptive Trade Practices Act after Appellees took control of a biotech company and bought out the former CEO of the company. The circuit court entered summary judgment in favor of Appellees. Appellants then filed a motion to reconsider seeking to vacate the judgment, which was denied. On appeal, Appellees filed motions to dismiss Appellants' appeal, alleging that Appellants' motion to reconsider was a nullity and that the notice of appeal was untimely because it was not filed within thirty days of entry of summary judgment. The Supreme Court denied the motions to dismiss, holding that the motion to reconsider was a valid motion. View "Muccio v. Hunt" on Justia Law

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Appellant Barry Jewell appealed from the denial of his motion for entry of satisfaction of judgment. For reversal, he contended that as one of four shareholders in the law firm of Jewell, Moser, Fletcher & Holleman (JMFH), he was a joint obligor and that when two of the shareholders, Scott Fletcher and John Holleman, were released, the debt was satisfied. On October 26, 2011, several hours after Appellant filed his notice of appeal from the denial of his motion for entry of satisfaction, the circuit court entered an order denying Appellant's motion for entry of satisfaction of judgment. Appellant never filed a notice of appeal from the court's October 26 order, but rather, on October 28, filed a supplement to his notice of appeal asking that the October 26 order be added to his designation of record. The Supreme Court dismissed the appeal for lack of jurisdiction because Appellant failed to file a timely notice of appeal from the court's order denying his motion. View "Jewell v. Moser" on Justia Law

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Cancun Cyber Cafe and Business Center was an internet cafe and business center that operated a sweepstakes promotion whereby Cancun's customers could play casino-style video games to learn whether they had won prizes through the sweepstakes promotion. Cancun filed a complaint for emergency declaratory and injunctive relief and a motion for temporary restraining order (TRO) and preliminary injunction against the city, police chief, and county prosecuting attorney, seeking declarations that, inter alia, Cancun's business and sweepstakes promotion was lawful. The county attorney filed a motion to dismiss Cancun's complaint. The circuit court granted the motion and denied as moot Cancun's motion for TRO and preliminary injunction. The Supreme Court affirmed, holding that because there was no existing legal controversy in this case, Cancun was not entitled to declaratory and injunctive relief, and therefore, the circuit court did not err in granting the prosecuting attorney's motion to dismiss and denying as moot Cancun's motion for TRO and preliminary injunction. View "Cancun Cyber Cafe & Bus. Ctr., Inc. v. City of N. Little Rock" on Justia Law

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In this corporate-dissolution action, the circuit court awarded the estate of Michael Sims a personal judgment against Barry Jewell, a former shareholder of the dissolved corporation of Jewell, Moser, Fletcher & Holleman. The circuit court denied Jewell's subsequent motion to vacate the order. The Supreme Court dismissed Jewell's appeal, holding (1) Jewell's notice of appeal was untimely under Ark. R. App. P.-Civ. 4(b) because Jewell did not file his notice of appeal within thirty days of the court's order entering judgment against him; (2) Jewell's motion to vacate the order was untimely, and therefore, Jewell was precluded from extending the time for filing a notice of appeal under Rule 4(b)(1); and (3) Jewell's letter to the circuit court objecting to the court's order was not one of the postorder motions that extends the time for filing the notice of appeal under Rule 4(b). View "Jewell v. Fletcher" on Justia Law

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This case began as a criminal action filed by the City of Clinton against Southern Paramedic Services, alleging that Southern Paramedic violated two of the City ordinances prohibiting an entity from engaging in the ambulance business within the City without first obtaining a franchise from the City Council. At issue was whether Southern Paramedic qualified for an exemption under Arkansas's Municipal Ambulance Licensing Act as an ambulance service provider who is "not-for-hire on a fee-for-service basis." The City filed a declaratory-judgment action seeking an interpretation of the statute. The circuit court eventually found that Southern Paramedic remained "not for hire" to the general public within the City. The City appealed. The Supreme Court dismissed the appeal as moot, as the issue of whether Southern Paramedic was "not-for-hire on a fee-for-service basis" and not subject to the City's regulation was moot because the ordinances under which the City sought to regulate Southern Paramedic had been repealed. View "City of Clinton v. S. Paramedic Servs., Inc." on Justia Law

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Appellants were retired police officers who did not receive the benefit of all the monthly benefit increases for retired members of a municipal police pension and relief fund. The increases were authorized by the fund's Board of Trustees. Appellants mounted a multi-pronged challenge to the increase in benefits. The circuit court granted summary judgment for the Board. The Supreme Court affirmed, holding that the circuit court did not abuse its discretion in (1) ruling that the additional payments were authorized by Ark. Code Ann. 24-11-102(a); (2) finding that the statute did not constitute an unconstitutional delegation of legislative authority; (3) finding that the Board did not breach its fiduciary duties by increasing benefits to current retirees and not to future retirees, an action that was expressly authorized by statute; and (4) in ruling that the statute, as applied, did not violate the equal protection clause of the state Constitution as there was a rational basis for the Board's disparate treatment of current and future retirees.