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ARKANSAS COURT OF APPEALS
DIVISION III
CV-16-392
No.
MARY COLLINS OPINION DELIVERED: JANUARY 25, 2017
APPELLANT
APPEAL FROM THE RANDOLPH
V. COUNTY CIRCUIT COURT
[NO. 61CV-10-156]
AVA LEUTHOLT AND RICHARD
LEUTHOLT, INDIVIDUALLY, AND
LEUTHOLT PROPERTIES, LLC HONORABLE HAROLD S. ERWIN,
JUDGE
APPELLEES
REVERSED AND REMANDED
ROBERT J. GLADWIN, Judge
In this third attempt to appeal the Randolph County Circuit Court’s order of
December 26, 2013, which granted summary judgment to appellees Ava and Richard
Leutholt, individually, and Leutholt Properties, LLC, appellant Mary Collins argues that the
trial court erred in granting judgment as a matter of law. We agree and reverse and remand
for further proceedings.
On January 21, 2009, Collins entered into a contract to purchase a home at 1104
Grand Street in Pocahontas, Arkansas, from Leutholt Properties, LLC, for $24,000, of which
Collins paid $10,000 down. Ava and Richard Leutholt are members of the LLC. The
contract obligated Collins to “obtain and maintain an insurance policy against loss due to
fire or other hazard with a loss payable clause in favor of Seller herein in an amount equal
to the outstanding principal balance.” On the same day that the contract was executed,
Collins paid the Leutholts $165 and received a receipt purported to be signed by Ava
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Leutholt stating that she had received from Collins $165 for homeowner’s insurance for one
year, January 2009 through December 2009. The LLC maintained insurance on the home
in a policy that covered several properties owned by the LLC.
On November 18, 2009, the home was destroyed by fire. Thereafter, the LLC filed
an insurance claim and received $40,000 from Cameron Mutual Insurance Company. On
November 15, 2010, Collins filed a complaint against Ava and Richard Leutholt and the
LLC seeking damages for conversion by claiming that the insurance proceeds, above the
amount owed on the property as principal on the contract, belonged to her. Attached to
the complaint were exhibits A (a copy of the land-sale contract) and B (a copy of the alleged
receipt for $165 that was written and signed by Ava Leutholt). The Leutholts timely
answered and counterclaimed, alleging that Collins had failed to (1) maintain insurance on
the premises; (2) pay the real-estate taxes; (3) protect the property from waste; and (4) make
payments. Consequently, the Leutholts treated the sums paid as rent and chose to terminate
the contract, and they asked the court to quiet title.
On July 16, 2013, the Leutholts filed a motion for summary judgment, alleging that
Collins had never obtained an insurance policy but that the LLC had obtained and
maintained a policy, and it was attached as an exhibit to the motion. The Leutholts alleged
that the house had burned, they had filed an insurance claim, the proceeds of the policy had
been paid to the LLC as the named insured, and there had been no conversion of property
belonging to Collins. Collins responded that under the contract, she had paid $165 to the
Leutholts on January 21, 2009, for one year of homeowner’s insurance on the house. She
alleged that, after the fire destroyed that house, the Leutholts had received the insurance
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proceeds but did not pay any money to her after deducting the amount she owed them for
the house, thereby converting the insurance proceeds to their own use. In her brief in
support of her response to the motion for summary judgment, Collins contended that the
Leutholts’ argument, that the insurance money was theirs because the contract for insurance
was between the insurance company and the LLC, goes against the terms of the contract
the LLC had with Collins and the receipt she had been given for the $165 payment for
homeowner’s insurance. Collins claimed that she had paid $10,000 on the contract, which
left a balance of $14,000 owed to the Leutholts. Allowing the Leutholts to keep the $40,000
in insurance proceeds, on a house that was sold for $24,000, would allow them to be unjustly
enriched. She argued that the Leutholts, as owners of the LLC, received the proceeds and
were liable for conversion.
On October 21, 2013, a hearing was held on the summary-judgment motion, and
on December 26, 2013, the trial court entered an order granting the Leutholts’ motion,
finding that Collins’s complaint had alleged conversion; there had been an insurance policy
on the house; the house had burned; the insurance company had paid the $40,000 in benefits
to the LLC; the money paid had been the LLC’s sole property; and, thus, no conversion
had occurred.
Collins timely filed her notice of appeal and designation of record on January 21,
2013. On June 18, 2014, this court dismissed Collins’s appeal and remanded the case to the
trial court for lack of a final order, because the Leutholts’ counterclaim had never been
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addressed below. 1 Following remand, Collins filed a motion to amend or alter the order on
February 2, 2015, alleging that the trial court had jurisdiction to amend based on Arkansas
Rule of Civil Procedure 54(b)(2) (2015), because no final order had been filed. In her brief
in support, Collins argued that the trial court should find that the Leutholts held her money
in a constructive trust. The Leutholts responded that Arkansas Rule of Civil Procedure 60
(2015) controlled because more than ninety days had passed since the entry of the judgment
Collins sought to amend. However, the Leutholts claimed that none of the bases on which
to grant a motion to vacate were applicable. Ark. R. Civ. P. 60(c). No order was filed
addressing Collins’s motion to amend or alter the order.
The Leutholts filed a motion to voluntarily dismiss their counterclaim, and the trial
court entered an order dismissing the Leutholts’ counterclaim without prejudice on March
18, 2015. Collins timely filed her notice of appeal and designation of record on March 24,
2015. Again, this court dismissed the appeal for lack of a final order, holding that the
compulsory counterclaim that was dismissed without prejudice was subject to being refiled
at a later date. 2 Following the second remand, the trial court filed an amended order on
March 17, 2016, granting summary judgment with a certificate attached in compliance with
Arkansas Rule of Civil Procedure 54(b). Collins filed a timely notice of appeal on March
21, 2016, and this appeal followed.
1
Mary Collins v. Ava Eugenia Leutholt, Richard Michael Leutholt, and Leutholt Properties, LLC,
CV-14-225, was dismissed by order of this court filed June 18, 2014, for lack of finality due
to an unaddressed counterclaim and no Rule 54(b) certificate. See Ark. R. Civ. P. 54(b)
(2014).
2
Collins v. Leutholt, 2015 Ark. App. 664.
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In addressing a summary-judgment order on appeal, our supreme court recently
stated,
A trial court may grant summary judgment only when it is apparent that no
genuine issues of material fact exist requiring litigation and that the moving party is
entitled to judgment as a matter of law. Crockett v. C.A.G. Invs., Inc., 2011 Ark. 208,
381 S.W.3d 793. Summary judgment is not proper, however, where evidence,
although in no material dispute as to actuality, reveals aspects from which inconsistent
hypothesis might reasonably be drawn and reasonable minds might differ. Thomas v.
Sessions, 307 Ark. 203, 818 S.W.2d 940 (1991). In Flentje v. First Nat. Bank of Wynne,
340 Ark. 563, 569–70, 11 S.W.3d 531, 536 (2000) (internal citations omitted), we
explained, “we only approve the granting of the motion when the state of the
evidence as portrayed by the pleadings, affidavits, discovery responses, and admission
on file is such that the nonmoving party is not entitled to a day in court, i.e., when
there is not any genuine remaining issue of fact and the moving party is entitled to
judgment as a matter of law. However, when there is no material dispute as to the
facts, the court will determine whether reasonable minds could draw reasonable
inconsistent hypotheses to render summary judgment inappropriate.” On appeal, 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. Harrisburg Sch.
Dist. No. 6 v. Neal, 2011 Ark. 233, 381 S.W.3d 811.
Town of Lead Hill v. Ozark Mountain Reg’l Pub. Water Auth., 2015 Ark. 360, at 3, 472 S.W.3d
118, 121−22.
Viewing the evidence in the light most favorable to herself, Collins contends that the
trial court erred in granting summary judgment. The Leutholts argue that the trial court
did not err in granting summary judgment, because Collins alleged one cause of action—
conversion. Conversion is wrongful possession of another’s property; an act of distinctive
dominion over the property of another. Dillard v Wade, 74 Ark. App. 38, 45 S.W.3d 848
(2001). The Leutholts claim that the proceeds belonged to their LLC because it was the
named insured on the policy. They assert that the trial court did not err in so finding. Also,
the Leutholts assert that the issue of constructive trust was not ruled on by the trial court
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and was therefore not preserved for appellate review. Abramson v. Eldredge, 356 Ark. 321,
149 S.W.3d 880 (2004).
However, we do not reach the Leutholts’ arguments concerning constructive trust
because we hold that there remain to be answered genuine issues of material fact. The
receipt, signed by Ava Leutholt and purported to evidence proof that Collins paid for the
insurance coverage prescribed by the contract, was never acknowledged or addressed by the
trial court. Whether Collins was entitled to the insurance proceeds must be resolved by the
trial court’s determination of some material questions of fact that remain unanswered in light
of the receipt. Viewing the evidence in the light most favorable to Collins and resolving all
doubts and inferences against the Leutholts, we hold that the trial court’s order granting
summary judgment was in error. We reverse and remand for a determination of whether
the signed receipt entitled Collins to the insurance proceeds as set forth in the contract
between the parties.
Reversed and remanded.
GRUBER, C.J., and BROWN, J., agree.
Murphy, Thompson, Arnold, Skinner & Castleberry, by: Kenneth P. “Casey” Castleberry;
and Grider Law Firm, by: M. Joseph Grider, for appellant.
James, House & Downing, P.A., by: Richard C. Downing, for appellees.
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