Title: How the Pratt/Archer Family Lost Markham Hill to a Developer - Part 5
As a review of this five-part series, four things contributed to the Pratt/Archer family losing their historic land on Markham Hill to a developer: (1) Julian and Jane Archer were late on a payment to Simmons First National Bank, (2) Simmons First National Bank refused to accept the Archer’s late payment as promised, (3) developer Seth Mims (Partner and President of Specialized Real Estate Group) did not follow through on his promises made under oath in federal court during the bankruptcy trial, and (4) allegedly, the Archer's lawyer Stanley Bond repeatedly failed to act in their best interest. After the bankruptcy trial, the Archers filed a malpractice lawsuit against Stanley Bond.
Part 5 of this series gives United States District Judge Timothy L. Brooks’ decisions on the Archer v. Bond lawsuit. I will be quoting from the decision documents found on www.leagle.com concerning Case No. 5:19-CV-5075 entitled Julian Pratt Waterman Archer and Jane Gochenour Archer, Plaintiffs, v. Stanley V. Bond and Stanley V. Bond, LTD., Defendants.
The first decision document dated August 17, 2020 concerns Stanley Bond’s request to throw out the case because of the statute of limitations. This was denied by the judge. In other words, the case must proceed.
https://www.leagle.com/decision/infdco20200819703
The second decision document dated August 21, 2020 concerns Stanley Bond’s request to exclude the Archer’s expert witness. This was also denied by the judge. In other words, the expert witness can be called as the case proceeds.
https://www.leagle.com/decision/infdco20200824a85
The third decision document was on Order of Dismissal dated September 2, 2020. It states, “IT APPEARING to the Court that the matter has been settled, counsel for all parties having so advised the Court, it is ORDERED that the case be, and it is hereby, DISMISSED WITH PREJUDICE, subject to the terms of the settlement agreement. If any party desires to make the terms of settlement a part of the record herein, those terms should be reduced to writing and filed with the Court within thirty (30) days from the file date of this Order. The Court retains jurisdiction to vacate this Order and to reopen the action upon cause shown that settlement has not been completed and that a party wishes this Court to enforce the settlement agreement specifically. IT IS SO ORDERED.” In other words, the case was settled out of court. Details unknown.
https://www.leagle.com/decision/infdco20200904641
For those interested in more details about these three court decisions on the Archer v. Bond case, go to the links above.
Sections from the first decision document are quoted below.
Memorandum Opinion and Order
“Currently before the Court are a Motion for Summary Judgment (Doc. 28) and Brief in Support (Doc. 29) filed by Defendants Stanley V. Bond and Stanley V. Bond, Ltd. Plaintiffs Julian Pratt Waterman Archer and Jane Gochenour Archer (collectively, "the Archers") filed a Response (Doc. 32), and Bond filed a Reply (Doc. 36). For the reasons stated herein, the Motion is DENIED.”
I. Background
[See the original document for the paragraphs omitted here. Part 4 of this series also summarizes the allegations against the Archer’s bankruptcy lawyer Stanley Bond.]
“The Motion for Summary Judgment now pending before the Court does not attempt to argue that Bond met the applicable standard of care with respect to his legal representation of the Archers and their businesses; instead, the Motion focuses solely on the statute of limitations. Bond argues, and the Archers do not dispute, that the applicable statute of limitations for claims of attorney malpractice is three years. Ark. Code Ann. § 16-56-105; see also Goldsby v. Fairley, 831 S.W.2d 142, 143 (Ark. 1992) ("Undisputedly, the three-year statute of limitations applies to actions against attorneys for negligence."). Though the Archers bring claims for both professional negligence and breach of contract—arising from a contract "to represent and provide legal services to Plaintiffs" (Doc. 1, p. 10)—the "gist" of the action is for legal malpractice/negligence, and the three-year statute of limitations applies to all claims, including the contract claim. See Sturgis v. Skokos, 977 S.W.2d 217, 220-21 (Ark. 1998) (finding that in a legal malpractice lawsuit involving claims for negligence and breach of contract, the "gist" of the action was for attorney negligence and the statute of limitations as to all claims would be three years, as "[t]he obligation to act diligently is present in every lawyer-client relationship" and "[t]he violation of that obligation is, by definition, nothing more than negligence").”
“The parties agree that on May 11, 2018, they entered into a 120-day tolling agreement as to all causes of action "concerning the attorney-client relationship and the legal services provided." (Doc. 33-1, p. 1). In Bond's view, the statute of limitations should be calculated by starting with the date the Complaint was filed, April 12, 2019, and counting back three years to April 12, 2016. He believes that the Complaint asserts negligent acts and omissions constituting legal malpractice that occurred well prior to April of 2016. In particular, Bond points out that the Archers' first allegation of malpractice occurred on April 21, 2014, when Bond filed for Chapter 11 bankruptcy as to only two of their businesses as opposed to all of them. Next, the Archers allege that Bond negligently advised them about which assets to list on their Chapter 11 bankruptcy schedules filed on April 28, 2015, and that error caused the Trustee to move to convert their Chapter 11 case to a Chapter 7 case and exposed their assets to liquidation. Bond argues that if the Court assumed April 28, 2015, was the earliest date that he committed any act of legal malpractice, the claim would have expired by April 28, 2018—thirteen days before the tolling agreement was signed.”
“The Archers have a different interpretation of the tolling agreement. They, like Bond, begin the statute-of-limitations calculation with the date the Complaint was filed, April 12, 2019. Then they subtract three years plus 120 days—the length of time the statute was tolled by agreement. "Three years and 120 days before [April 12, 2019] was December 13, 2015," so the Archers contend that if any acts or omissions constituting a claim for legal malpractice occurred after December 13, 2015, the case should survive summary judgment. (Doc. 32, p. 2).”
II. Legal Standard
A. Summary Judgement
[See the original document for these two paragraphs. They define the legal standard for a summary judgement.]
B. Legal Malpractice
“According to the Arkansas Supreme Court:
An attorney is negligent if he or she fails to exercise reasonable diligence and skill on behalf of the client. In order to prevail on a claim of legal malpractice, a plaintiff must prove that the attorney's conduct fell below the generally accepted standard of practice and that such conduct proximately caused the plaintiff damages. In order to show damages and proximate cause, the plaintiff must show that but for the alleged negligence of the attorney, the result in the underlying action would have been different. An attorney is not liable to a client when, acting in good faith, he or she makes mere errors of judgment. Moreover, attorneys are not, as a matter of law, liable for a mistaken opinion on a point of law that has not been settled by a court of highest jurisdiction and on which reasonable attorneys may differ.” Pugh v. Griggs, 940 S.W.2d 445, 447 (Ark. 1997) (internal citations omitted)."
III. Discussion
“As the Court previously explained, Bond's summary judgment motion does not attack the merits of the Archers' claims but focuses only on the statute of limitations. Therefore, for purposes of evaluating the motion, the Court will assume that the Archers' substantive claims are true.”
“As a starting point for the discussion, the Court observes that "[i]n Arkansas malpractice cases, concerning attorneys ... the statute of limitations begins to run, in the absence of concealment of the wrong, when the negligence occurs, not when it is discovered." Ford's, Inc. v. Russell Brown & Co., 773 S.W.2d 90, 92 (Ark. 1989). This means that Arkansas ascribes to the "occurrence rule" in professional malpractice cases, and a cause of action is said to accrue when the negligent act occurs, unless the professional actively conceals the wrongdoing. See Ragar v. Brown, 964 S.W.2d 372, 377 (Ark. 1998). Accordingly, the statute of limitations cannot be calculated as the parties suggest by counting backward from the date the Complaint was filed. Instead, the limitations period should be calculated forward from the date of accrual, i.e. the date that an act of legal malpractice occurred. The tolling agreement paused the accrual of time for 120 days, but "d[id] not extend the statute of limitations on any claims that h[ad] already expired as of [May 11, 2018]" Doc. 33-1, p. 1.”
“To establish the element of proximate causation on a claim for legal malpractice, at least some evidence must show that "but for the alleged negligence of the attorney, the result in the underlying action would have been different." Pugh, 940 S.W.2d at 447. For Defendants to prevail on their Motion for Summary Judgment, then, the Court would have to find that there is no genuine dispute as to whether a but-for cause of the harm to Plaintiffs occurred outside the statutory period. Here, the alleged harm is easy enough to identify: The Archers blame Bond for the liquidation of their property and the nondischarge order suffered in the bankruptcy proceedings. However, pinpointing the date on which the statute of limitations began to accrue is more difficult. This is true because the Archers' Complaint alleges (often in a conclusory fashion) multiple (overlapping) acts and omissions during the course of Bond's three-year period of representation that (singularly and/or collectively) constitute "but-for" causes of their harm—none of which are disputed for summary judgment purposes.”
“Some of those possible but-for causes are clearly outside the statute of limitations, but others are not. For example, the Complaint asserts that Bond began advising the Archers improperly from the very beginning of their business relationship, sometime in April of 2014. They maintain that on April 21, 2014, Bond filed Chapter 11 bankruptcy petitions for only two of their businesses, Archer, L.L.C., and Sassafras Hill Communications, Inc., but failed to realize that the note/debt held by Simmons Bank was secured by Pratt Place Inn, Inc., Sassafras Hill Enterprises, Inc., and the Archers personally. The Archers believe that Bond should have filed for Chapter 11 protection on their behalf and on behalf of all their collateralized business entities immediately. (Doc. 1, p. 4). If the factfinder were to conclude that this omission by Bond was the but-for cause of the Archers' injury, the Archers' claims would be barred by the statute of limitations.”
“Another possible but-for cause of the Archers' damages is Bond's "fail[ure] to properly prepare Plaintiffs' bankruptcy petition and schedules [filed on April 28, 2015,] by failing to list certain assets, including horses; a garage and apartment in Paris, France; furnishings inside the Inn, many of which were antique family heirlooms; bank accounts; and other assets." (Doc. 1, p. 5). The Archers contend that this act/omission by Bond directly resulted in "many of Plaintiffs' personal assets eventually bec[oming] part of their bankruptcy estate and subject to liquidation to satisfy creditor debts." Id. And they believe Bond's negligent advice concerning their asset disclosures prompted the United States Trustee to move to convert their Chapter 11 proceeding into a Chapter 7 proceeding. Again, if the factfinder were to conclude that those facts are true and constitute malpractice, the claim would nevertheless be barred by the statute of limitations because the petition was filed on April 28, 2015, and the three-year statutory period would have expired on or before April 28, 2018—two weeks prior to the parties' May 11, 2018 tolling agreement.”
“But the Archers point to other acts/omissions by Bond in early 2016 that, if found to be a but-for cause of the liquidation of the Archers' personal assets, would mean that their malpractice claim was preserved by the tolling agreement. For example, the Complaint alleges the following but-for causes: (1) Bond's negligent advice, acts, or omissions in the months leading up to the Trustee's decision to file a motion for conversion; (2) Bond's alleged failure to file a response in opposition to the motion for conversion and/or his advice to the Archers to consent to the conversion; (3) Bond's alleged failure to convey to the Trustee the written offers for sale of certain isolated parcels of real property; and (4) Bond's alleged failure to challenge the Trustee's motion for approval of the sale of all of the Archers' real property. If any of these acts/omissions were found to be a but-for cause underlying the Archers' claims, the statute of limitations would not bar the Archers' recovery.”
“Because the Archers' Complaint states multiple overlapping claims (sometimes in conclusory and collective terms), and because Bond's summary judgment briefing does not engage with the merits of any particular claim of malpractice, the Court cannot say at this juncture that the entire Complaint should be dismissed as a matter of law. The Court will therefore reserve that determination until such time as it is known which (if any) assertions of malpractice are submitted to and determined by the jury to be but-for causes of the Archers' alleged harm.”
IV. Conclusion
“IT IS THEREFORE ORDERED that the Motion for Summary Judgment (Doc. 28) filed by Defendants Stanley V. Bond and Stanley V. Bond, Ltd., is DENIED. IT IS SO ORDERED.”
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Photo of Stanley Bond found online