Fire Systems Technology, Inc. v. First Community Bank of Crawford County , 2015 Ark. LEXIS 343 ( 2015 )

Cite as 2015 Ark. App. 334
ARKANSAS COURT OF APPEALS
DIVISION II
No. CV-14-852
Opinion Delivered May 20, 2015
FIRE SYSTEMS TECHNOLOGY, INC. APPEAL FROM THE CRAWFORD
APPELLANT COUNTY CIRCUIT COURT
[NO. 17CV-12-60]
V.
HONORABLE MICHAEL MEDLOCK,
FIRST COMMUNITY BANK OF JUDGE
CRAWFORD COUNTY
APPELLEE APPEAL DISMISSED
LARRY D. VAUGHT, Judge
Appellant Fire Systems Technology, Inc. (FST), appeals from the Crawford County
Circuit Court’s order granting partial summary judgment foreclosing on construction loans
made by appellee First Community Bank of Crawford County. The bank has raised the issue
of whether FST timely filed the record on appeal, a jurisdictional requirement. We conclude
that we lack jurisdiction to decide this appeal; therefore, we dismiss it.
The events leading up to this appeal began in 2009 when Armstrong Remodeling and
Construction, LLC; Armstrong Remodeling, LLC; James Eric Armstrong; Gary Armstrong;
and Harvester’s Fellowship Church (collectively, Armstrong) contracted with FST to act as
a subcontractor for two construction projects located at an adjacent apartment complex and
church. The bank financed the projects with a series of construction loans and took mortgages
to secure the debts.
Cite as 2015 Ark. App. 334
Contending that it had completed its work without receiving payment, FST filed a
materialmen’s lien against the property in July 2010. It later filed suit in August 2011 to
foreclose its lien, but did not name the bank as a party. In July 2012, FST obtained a
foreclosure judgment against Armstrong, containing a declaration that its lien held first
priority. The property was ordered to be sold if the judgment was not paid. Two separate sales
were held, one for each property, with FST the successful bidder in both instances for the
amount of its judgment.
In the meantime, on January 25, 2012, the bank filed a separate case seeking to
foreclose on three construction notes and mortgages it received from Armstrong for the
apartment complex. The bank was also seeking to enforce personal guaranties. In an amended
complaint, the bank added FST and another judgment creditor of Armstrong as defendants.
The bank amended its complaint a second time, to seek foreclosure on two more notes and
mortgages on the church property.
FST answered, denying the material allegations and asserting that it held a first-priority
judgment lien against the property, based on the judgment it had previously received in the
lien-foreclosure case. Later, FST filed a counterclaim to the bank’s foreclosure action seeking
to quiet title to the property it received through the two commissioner’s deeds. FST also
claimed that any lien the bank may have was junior to its lien because the bank did not record
its mortgages until after construction had begun. The bank answered the amended
counterclaim and filed a motion to dismiss or, in the alternative, for summary judgment.
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On February 14, 2013, the bank filed a motion for partial summary judgment to
declare its mortgage superior to all other liens. The bank asserted that, even if FST’s lien was
valid, the underlying debt was merged into and extinguished by FST’s judgment in the lien-
foreclosure case.
FST filed a summary-judgment motion on its amended petition to quiet title. In its
motion, FST contended that there was no dispute that the foreclosure of its materialman’s lien
was proper and that it was entitled to priority over the bank’s mortgage lien.
Following a hearing, the circuit court granted the bank’s summary-judgment motion
to dismiss FST’s counterclaim for quiet title and denied FST’s countermotion for summary
judgment. The court found that the bank’s mortgage was superior to FST’s lien. The court
also found that FST’s failure to include the bank as a party in its foreclosure action meant that
it could not foreclose on the bank’s lien and that FST stood in Armstrong’s shoes, meaning
it took the property subject to the bank’s mortgage lien. A “Partial Judgment and Decree of
Foreclosure” memorializing the court’s ruling was entered on July 15, 2013. The order
contained a Rule 54(b) certificate. The order also specifically reserved issues between the bank
and two guarantors.
FST filed a notice of appeal from the order granting partial summary judgment to the
bank on August 7, 2013. It filed an amended notice of appeal on August 15, 2013. However,
FST did not lodge the record or otherwise pursue its appeal at that time.
After FST had filed its notices of appeal, the commissioner’s sale of the property took
place on August 28, 2013. The bank was the successful purchaser, bidding $750,000 for the
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apartment property and $300,000 for the church property. The confirmation of the reports
of sale and approval of the commissioner’s deeds was made by orders entered on September
3, 2012.
Orders dismissing the bank’s remaining claims against the two guarantors were entered
on June 26, 2014, and July 10, 2014. FST filed a notice of appeal on August 8, 2014,
designating only the July 2013 orders on partial summary judgment as the orders from which
it appealed.
The jurisdictional issue raised by the bank is that FST’s appeal of the July 2013 orders
is not timely because it failed to lodge the record within ninety days from its first notice of
appeal, which was filed August 7, 2013. The orders from which FST appeal (the July 2013
orders) contained Rule 54(b) certificates. Rule 2 of the Arkansas Rules of Appellate
Procedure–Civil, which governs what orders are appealable, provides that an appeal may be
taken from an order that adjudicates fewer than all the claims or the rights and liabilities of
fewer than all the parties if the circuit court has directed entry of a final judgment as to one
or more but fewer than all the claims or parties and has made an express determination that
there is no just reason for delay and has executed the certificate required by Rule 54(b) of the
Arkansas Rules of Civil Procedure. Ark. R. App. P.–Civ. 2(a)(11) (2015). In other words, an
order containing a Rule 54(b) certificate is immediately appealable. Id. Although Rule 2(a)
uses the term “may,” the supreme court has held that orders that may be appealed under this
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rule must be appealed within thirty days after they are entered as required by Rule 4(a),1 or
the right to appeal that order is lost. In re Estate of Stinnett, 2011 Ark. 278, at 7, 383 S.W.3d
357, 361. Thus, because of the inclusion of the Rule 54(b) certificates, FST was required to
pursue its appeal of the July 2013 orders at that time. It could not wait until the conclusion
of the case before appealing from the orders granting partial summary judgment to the bank.
Although FST did file timely notices of appeal from the July 2013 orders, it inexplicably failed
to file the record.2 The timely lodging of the record has been deemed a jurisdictional
requirement to perfect an appeal. Seay v. Wildlife Farms, Inc., 342 Ark. 503, 29 S.W.3d 711
(2000). Accordingly, we do not have jurisdiction of any portion of this appeal that challenges
the July 2013 orders.
FST argues that the Rule 54(b) certificate is invalid and, therefore, it was not required
to perfect the appeal in 2013. We disagree. Whether an order has properly been appealed
pursuant to Rule 54(b) is indeed a jurisdictional question. See, e.g., Jones v. Huckabee, 363 Ark.
239, 213 S.W.3d 11 (2005). However, it is for the appellate court—not FST as the
appellant—to determine whether the order properly fits within one of the subsections of Rule
1
Rule 4(a) of the Arkansas Rules of Appellate Procedure–Civil provides that “a
notice of appeal shall be filed within thirty (30) days from the entry of the judgment,
decree, or order appealed from.” Ark. R. App. P.–Civ. 4(a) (2015).
2
The record on appeal “shall be filed with the clerk of the Arkansas Supreme Court
and docketed therein within 90 days from the filing of the first notice of appeal.” Ark. R.
App. P.–Civ. 5(a) (2015). If a party fails to file the record within the ninety-day period
provided under Rule 5(a), the party’s appeal is dismissed. Dalton v. First State Bank, 374
Ark. 142, 288 S.W.3d 589 (2008); Farris v. Merrill Lynch Bank & Trust Co., 372 Ark. 373,
276 S.W.3d 257 (2008). FST filed its first notice of appeal on August 7, 2013, making the
record due no later than November 5, 2013. The record was filed almost eleven months
later on October 3, 2014.
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2 once an appeal is lodged. Sloan v. Ark. Rural Med. Practice Loan & Scholarship Bd., 369 Ark.
442, 255 S.W.3d 834 (2007). Such a determination for Rule 2 purposes is always secondary
to whether a timely notice of appeal and record have been filed. Stinnett, supra; Sloan, supra.
In closing, we note that FST timely filed the record from its notice of appeal from the
June 26 and July 10, 2014 orders dismissing the bank’s claims against the guarantors and argues
one point relating to the confirmation of the foreclosure sale to the bank. However, we
cannot properly consider that point because FST failed to designate these orders in its notice
of appeal. Orders not mentioned in a notice of appeal are not properly before the appellate
court. Lindsey v. Green, 2010 Ark. 118, 369 S.W.3d 1.
Appeal dismissed.
HARRISON and GRUBER, JJ., agree.
The Overton Law Firm, LLC, by: J. Don Overton; and
The Corbitt Law Firm, LLC, by: Chris P. Corbitt, for appellant.
Hardin, Jesson & Terry, PLC, by: Rex M. Terry, for appellee.
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