Tilley v. Malvern National Bank

Summary

The Arkansas Supreme Court held that a foreclosure proceeding is equitable, but related legal counterclaims and third-party claims seeking money damages must be submitted to a jury based on the historical nature of the claims. The court further held that predispute contractual jury waivers are unenforceable under the Arkansas Constitution and clarified that the clean-up doctrine was abolished after Amendment 80. The court also overruled a per se new-business rule barring lost-profit damages, holding that the applicable standard is whether the claimant presents a reasonably complete evidentiary basis for the damages.

Holdings

1. After Amendment 80, Arkansas abolished the clean-up doctrine. A circuit court must determine whether a claim is legal or equitable by examining the claim's historical nature and the remedies sought. Tilley's claims were historically legal claims seeking money damages and therefore should have been submitted to a jury.
2. Predispute contractual waivers of the right to a jury trial are unenforceable under the Arkansas Constitution.
3. Tilley preserved his argument that predispute contractual jury waivers are unenforceable under the Arkansas Constitution.
4. The reasonably complete figures standard for proving anticipated profits applies even when the alleged lost profits arise from a new business venture. Arkansas therefore has no per se new-business rule barring such damages solely because the business is new.

Questions Presented

1. Whether Tilley's legal counterclaims and third-party claims arising in a foreclosure action were triable to a jury under Amendment 80 to the Arkansas Constitution and the historical nature of the claims.
2. Whether a predispute contractual waiver of the right to a jury trial is enforceable under the Arkansas Constitution.
3. Whether Tilley's constitutional challenge to the predispute jury-waiver clause was preserved for appellate review.
4. Whether Arkansas applies a per se new-business rule barring recovery of lost profits by a new business venture.

Disposition

reversed_and_remanded