Scollard v. Scollard

Citations: 947 S.W.2d 345; 329 Ark. 83; 1997 Ark. LEXIS 392Docket: 96-953

Court: Supreme Court of Arkansas; June 16, 1997; Arkansas; State Supreme Court

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In the case of Stephen G. Scollard v. Garrett S. Scollard, the Supreme Court of Arkansas addressed a dispute arising from a property transaction between Garrett Scollard and his son, Stephen Scollard. In 1991, during his divorce proceedings, Garrett transferred a parcel of land to Stephen to prevent the collection of a potential judgment from a Florida court favoring Garrett's former wife, Jeanette. Garrett intended for Stephen to reconvey the property later. However, Stephen refused Garrett's requests to return the land or transfer it to Garrett's estranged wife, Mary, and ultimately sold it.

In January 1995, Garrett filed a lawsuit against Stephen for constructive fraud, which the trial court initially ruled in favor of Garrett. Stephen appealed, arguing that the claim was barred by the statute of limitations. The court found that Garrett's claim was indeed time-barred, as the statute of limitations for such actions is three years under Arkansas law. The court noted that even if constructive fraud occurred on August 31, 1991, the statute of limitations began running at that time, but could be tolled if the fraud was not discovered with reasonable diligence. The trial court's earlier ruling that the statute was tolled for 116 days due to a prior action was rejected, and the case was reversed and dismissed on appeal, confirming that Garrett's claims were untimely.

In the case of Garrett v. Stephen, the statute of limitations for a property dispute commenced when Garrett was notified that Stephen claimed ownership of the property, which was no later than November 30, 1991. Although Stephen argued that the statute began in November 1991 when he refused to transfer the property, Garrett contended it did not start until February 1992 when he formally demanded the return of the property. The court sided with the Trial Court's ruling that Stephen's refusal provided sufficient notice of his claim, leading to the conclusion that the statute of limitations began running by the end of November 1991 and barred any action after November 30, 1994, unless tolling applied.

Regarding tolling, Stephen challenged the Trial Court's finding that a prior chancery court action tolled the statute during its 116-day duration. The burden was on Garrett to prove that the limitations period was tolled, which he argued was supported by previous case law. The Trial Court referenced cases such as Erwin, Inc. v. Arkansas Louisiana Gas Co. and Linder v. Howard to justify its decision that the circuit court action was "essentially" the same as the earlier chancery action, differing only in the remedy sought. The Erwin case involved continuous claims against Arkansas Louisiana Gas Company, while the Linder case dealt with a timely filed complaint that was later transferred to the correct court without dismissal. The court's reasoning emphasized that a mistake in filing should not require a new claim if the original action was validly initiated.

The action was timely filed and not subject to a statute of limitations bar upon transfer. Previous cases cited, including Peek v. Pulaski Federal Savings & Loan Assn., indicated that the statute of limitations was tolled during the pendency of a suit; however, they involved a continuation of the same action. In contrast, the current case involved separate actions in circuit and chancery courts, each alleging different causes of action: the chancery court sought a constructive trust for alleged fraudulent conduct, while the circuit court sought damages for constructive fraud. 

To establish fraud, the plaintiff must demonstrate several elements, including a false representation, knowledge of its falsity, intent to induce reliance, justifiable reliance, and resultant damages. While constructive fraud can arise in breaches of fiduciary duties, it requires a material misrepresentation. A constructive trust, however, can be imposed without a material misrepresentation, often to prevent unjust enrichment.

Garrett's previous action was nonsuited within the statute of limitations, allowing ample time to file the subsequent action. After the nonsuit on June 9, 1992, Garrett had until November 30, 1994, to file for constructive fraud and over seven months post-sale of the property to initiate the circuit court action. The court concluded that the limitations period had expired before the action was filed, leading to a reversal and dismissal of the case.