In Re Estate of Smith

Cite as 2024 Ark. App. 275
ARKANSAS COURT OF APPEALS
DIVISION I
No. CV-22-188

Opinion Delivered April 24, 2024
IN THE MATTER OF THE ESTATE OF
EUNICE FAYE SMITH, DECEASED APPEAL FROM THE LITTLE RIVER
COUNTY CIRCUIT COURT
LLOYD SMITH AND DERRELL SMITH [NO. 41PR-17-1]
APPELLANTS/CROSS-APPELLEES
HONORABLE VANN SMITH, JUDGE
V.

MARTIN SMITH AND ALWIN SMITH
APPELLEES/CROSS-APPELLANTS

AFFIRMED ON DIRECT APPEAL;
AFFIRMED ON CROSS-APPEAL

RITA W. GRUBER, Judge

This is the second appeal in this probate case involving a protracted dispute among

three brothers, appellants Lloyd Smith and Derrell Smith and appellee Martin Smith, over

real estate owned by their late mother, Eunice Smith, who died on December 17, 2016.1 In

2010, Eunice executed a will leaving all her real property to her youngest son, Martin, on the

condition that he would pay his older brothers, Lloyd and Derrell, the sum of $10,000 each.

In 2012, Eunice executed a special warranty deed that transferred the property to Martin

and his wife, Sonja, as tenants by the entirety. In 2014, Martin and Sonja executed a warranty

deed that transferred 99 percent of their interest in the property back to Eunice and retained

1
Appellee Alwin Smith (unrelated to Eunice Smith’s family) was appointed to serve
as special administrator of the estate following the first appeal.
the remaining 1 percent interest for themselves. A “survivorship agreement” attached to this

warranty deed provided that Eunice, Martin, and Sonja thereafter owned the property “in

the same manner as joint tenants with right of survivorship” and that, upon Eunice’s death,

her 99 percent interest would transfer to Martin and Sonja. Martin, as Eunice’s attorney-in-

fact, signed the survivorship agreement on her behalf.

Lloyd and Derrell successfully challenged the 2010 will and subsequent conveyances

in the probate proceedings. The circuit court ruled that the will was the product of undue

influence and set it aside and imposed a constructive trust on the real property in favor of

Eunice’s estate. In the first appeal, we affirmed the circuit court’s order setting aside the will

but reversed and remanded its order imposing the constructive trust. In re Est. of Smith, 2020

Ark. App. 113, at 1–2, 597 S.W.3d 65, 68.

On remand, Lloyd and Derrell, for the first time, contested the legal effect of the

2014 deed and survivorship agreement as to title in the property. The circuit court granted

summary judgment in favor of Martin, concluding that relitigation of the issue was barred

by the doctrines of law of the case and res judicata.

On appeal, Lloyd and Derrell argue that the circuit court erred by granting summary

judgment in favor of Martin. On cross-appeal, Martin contends that certain “verbiage” in

the circuit court’s order should be set aside under the doctrine of law of the case. Since filing

their notice and cross-notice of appeal, the parties have filed multiple motions for sanctions.

We find no merit in any of the arguments presented. Accordingly, we affirm on direct appeal

and on cross-appeal, and we deny the parties’ sanctions motions.

2
The bulk of the relevant facts are summarized in our decision in the first appeal.

Smith, 2020 Ark. App. 113, at 1–11, 597 S.W.3d at 68–73. In 2006, Eunice and her husband,

Lloyd Sr., executed a will that bequeathed ownership of their real property to their three

sons equally as tenants in common. After Lloyd Sr. died in 2009, Eunice executed a power

of attorney appointing Martin as her attorney-in-fact. On May 27, 2010, she executed a will

that appointed Martin as her executor and left the real property solely to Martin on the

condition that he pay $10,000 to Lloyd and Derrell within six months of her death. Also in

2010, Eunice began showing signs of dementia. In 2011, she suffered a severe stroke, after

which she began living with Martin and Sonja, who served as her primary caretakers.

In March 2012, Eunice executed a deed that transferred her real property to Martin

and Sonja outright. In 2014, due to Eunice’s deteriorating health, she was placed in a long-

term nursing care facility, after which Martin and Sonja executed a warranty deed

transferring 99 percent of their interest in the property back to Eunice and retaining a 1

percent interest subject to a survivorship agreement attached to the deed. This was done so

that Eunice could receive financial assistance from the Arkansas Department of Human

Services (DHS) Medicaid program without incurring a substantial penalty as a result of the

2012 gift transfer of real property. As stated, Martin signed the survivorship agreement, as

Eunice’s attorney-in-fact, on her behalf.

Eunice died on December 17, 2016. Her last will executed on May 27, 2010, was

admitted to probate, and Martin was appointed as executor of the estate. On February 2,

2017, Lloyd and Derrell filed a petition contesting the will and the probate order, alleging

3
that Eunice “was unduly influenced” by Martin and “lacked testamentary capacity to execute

the will in question.” On March 21, 2017, DHS entered an appearance and filed a claim

against Eunice’s estate for approximately $85,000. On July 10, 2017, Derrell filed a petition

for constructive trust, alleging that the 2010 will and subsequent conveyances were the

product of Martin’s undue influence, which was “aided by Eunice’s declining health and

mental incompetency.” He claimed that Martin engaged in self-dealing and breached a

fiduciary duty he owed to Eunice by using his power of attorney to acquire title to the

property with a survivorship interest. DHS thereafter filed a pleading in which it contested

the validity of the 2014 conveyance, arguing that Eunice’s 99 percent interest in the real

property belonged to her estate and not to Martin and Sonja by virtue of the 2014 deed and

survivorship agreement.

At an April 23, 2018 hearing, the circuit court heard extensive testimony regarding

the 2014 conveyance. Attorney Lisa Shoalmire testified that, for eldercare and estate-

planning purposes, she advised Martin and Sonja that the 2012 deed in which Eunice gifted

her real property was likely to result in a substantial Medicaid penalty. To get around this

issue, she prepared a deed with an incorporated survivorship agreement in which Martin

and Sonja transferred 99 percent of their interest back to Eunice and owned the remaining

1 percent as joint tenants with right of survivorship. Shoalmire explained that Martin and

Sonja did not receive any monetary benefit from the 2014 deed because “the benefit had

been bestowed on them back in 2012 with the original gift so there was no change in the

4
position of any of the parties.” In addition, an attorney Medicaid expert, Amanda Jarvis,

testified that she saw no issues with the 2014 deed and survivorship agreement.

Following the hearing, the circuit court entered an order invalidating the 2010 will

and imposing a constructive trust on the real property. Martin appealed to this court, arguing

that the circuit court erred (1) by rejecting his statute-of-limitations defenses to the challenges

to the 2012 and 2014 deed conveyances; (2) by allowing testimony about a 2006 will that

Eunice and Lloyd Sr. executed; (3) by allowing testimony about expenditures from Eunice’s

account before her death; and (4) by ruling that he failed to rebut the presumption of undue

influence attending to the execution of Eunice’s last will. We agreed that the action for a

constructive trust, based on claims of unjust enrichment and breach of fiduciary duty, was

filed more than three years after the claims accrued; thus, it was time-barred under Arkansas

Code Annotated section 16-56-105 (Repl. 2005). Accordingly, we “reverse[d] and remand[ed]

the order imposing the constructive trust.” Smith, 2020 Ark. App. 113, at 16, 597 S.W.3d at

75. However, we affirmed the circuit court’s ruling that Martin failed to rebut the

presumption of undue influence in procuring the probated will. Id. at 22–23, 597 S.W.3d

at 78.

Following our remand, the probate proceedings continued. Relevant to this appeal,

on December 21, 2020, Lloyd and Derrell filed a joint motion to interpret the 2014 deed

and survivorship agreement.2 In the motion, they contested the legal effect of the

2
Lloyd and Derrell withdrew a previously filed joint motion to set aside the deed on
grounds of fraud. Martin’s first postappeal motion for summary judgment addressed this

5
conveyance, arguing that the 2014 deed should be construed, under Arkansas law, as creating

a tenancy-in-common relationship between Eunice (as to a 99 percent interest) and Martin

and Sonja (collectively as to a 1 percent interest). In support, they submitted the affidavit of

real estate attorney J. Cliff McKinney, who opined that the survivorship agreement attached

to the 2014 deed failed to create a joint tenancy and instead vested title to Eunice as a tenant

in common with Martin and Sonja because (1) the common law requires the four unities of

interest, time, title, and possession to create a joint tenancy; (2) the survivorship agreement

is not properly executed or acknowledged; and (3) Arkansas law creates a presumption in

favor of a tenancy in common when there is uncertainty and ambiguity.

On January 4, 2021, Martin moved for summary judgment, raising the affirmative

defenses of statute of limitations, law of case, and res judicata to Lloyd and Derrell’s new

deed challenge. Martin asserted that, prior to the first appeal, DHS had challenged the 2014

deed and survivorship agreement on the same grounds raised by Lloyd and Derrell. He noted

that, in its July 2018 order, the circuit court found that an enforceable joint right of

survivorship was created by the 2014 deed, albeit for the purpose of avoiding Medicaid and

probate issues, and that no cross-appeal was filed from that finding.

motion and raised the same affirmative defenses of law of the case, res judicata, and statute
of limitations that he raised in his second postappeal motion for summary judgment, which
addressed the joint motion to interpret the 2014 deed and survivorship agreement.

6
At a November 15, 2021 hearing, the parties argued their respective positions. On

December 3, 2021, the circuit court entered an order granting summary judgment in favor

of Martin, ruling as follows:

[T]he issue of the interpretation of the deeds and survivorship agreement
could have been raised at the same time that Lloyd and Derrell Smith sought
a constructive trust over the real property at issue in this case. The 2012 deed
and the 2014 deed, as well as the survivorship agreement, were all known by
the parties. Instead of pursuing a different interpretation of the deed and
survivorship agreement, Lloyd and Derrell elected to pursue the request for a
constructive trust.

The trial court had a final hearing on Lloyd and Derrell Smith’s request
for a constructive trust, and, in fact, ruled in their favor. [DHS] attempted to
raise the issue of interpretation of the 2014 deed and survivorship agreement
but it failed to obtain an order allowing its intervention in the case. Clearly,
Lloyd and Derrell Smith could have raised this issue at the same time [they]
sought a constructive trust.

This Court finds that there are no material facts in dispute, and that
summary judgment in favor of Martin Smith is proper. The Court further
finds that the defenses of res judicata and law-of-the-case control.

Accordingly, the court concluded “that the issue of the real property is resolved and

shall be placed in the name of Martin and Sonja Smith.” This timely appeal and cross-appeal

followed.

I. Standard of Review

Probate cases are reviewed de novo on the record; however, the decision of the circuit

court will not be reversed unless it is clearly erroneous. Farrow v. Fuller, 2017 Ark. App. 144,

at 4, 515 S.W.3d 652, 654. A finding is clearly erroneous when, although there is evidence

7
to support it, the appellate court is left, on the entire evidence, with the firm conviction that

a mistake has been made. Id.

Summary judgment should be granted only when it is clear that there are no genuine

issues of material fact to be litigated, and the party is entitled to judgment as a matter of law.

O’Marra v. MacKool, 361 Ark. 32, 35, 204 S.W.3d 49, 51 (2005). We evaluate the appeal of

a grant of summary judgment in light of the evidence presented, and the burden rests on the

moving party. Cooper Realty Invs., Inc. v. City of Bentonville, 2022 Ark. App. 155, at 3, 643

S.W.3d 816, 819. If summary judgment was granted on a question of law, we review all the

pleadings and evidence de novo and give no deference to the circuit court’s ruling. Id. at 4,

643 S.W.3d at 819.

II. Discussion

On appeal, Lloyd and Derrell argue that the circuit court erred by concluding that

the doctrines of law of the case and res judicata precluded its consideration of their deed

challenge on remand following our reversal of the circuit court’s July 5, 2018 order imposing

the constructive trust. In its December 3, 2021 order, the circuit court found that the same

challenge “had already been presented to the trial court prior to the hearing on the merits

in 2018.” The court concluded that Lloyd and Derrell could have raised the same argument

in the circuit court and on appeal, noting both the circuit court’s and this court’s

acknowledgements that DHS had “raised a similar argument challenging the interpretation

8
of the 2014 deed and survivorship agreement prior to the appeal.”3 Instead, they elected to

file an action for a constructive trust based on claims of breach of fiduciary duty and unjust

enrichment.

Lloyd and Derrell maintain that because they prevailed initially in their action for a

constructive trust, they were not required to raise an “alternative” challenge to the 2014

deed. They further contend that, on remand, the circuit court was free “to do what it had to

do anyway: interpret the deed and decide where the property should go.” We disagree.

In the first appeal, we reversed and remanded the circuit court’s order imposing a

constructive trust on statute-of-limitations grounds. As counsel for Lloyd and Derrell

acknowledged at the oral argument, our remand did not include specific instructions.

Rather, it was a general remand, allowing the circuit court to conclude the probate

proceedings and close the estate, as is common in probate appeals, which often arise at the

interlocutory stage. See In re Est. of Stinnett, 2011 Ark. 278, at 4, 383 S.W.3d 357, 359 (noting

that under Arkansas Rule of Appellate Procedure–Civil 2(a)(12) and Arkansas Code

Annotated section 28-1-116, virtually all orders in probate cases are immediately appealable).

It did not, however, provide an opportunity for Lloyd and Derrell to contest the conveyance

on grounds that they did not assert in the first instance.

3
We noted in the first appeal that DHS entered an appearance and filed a pleading
in which it asserted that Eunice’s 99 percent interest in the real property belonged to her
estate and not to Martin and Sonja by virtue of the survivorship agreement. Smith, 2020 Ark.
App. 113, at 4 n.1, 597 S.W.3d at 69 n.1. We also noted that the circuit court made an oral
order allowing DHS to intervene, but the record did not contain a written order, and DHS
did not file a brief in the appeal. Id.

9
On remand, the circuit court, as it correctly recognized, was “vested with jurisdiction

only to the extent conferred by [this] court’s opinion and mandate.” Turner v. N.W. Ark.

Neurosurgery Clinic, P.A., 91 Ark. App. 290, 297, 210 S.W.3d 126, 133 (2005). We have long

held that neither new proof nor new defenses may be raised after remand when they are

inconsistent with the appellate court’s first opinion and mandate. Id. “[T]o allow such to

occur undermines the finality of this court’s decision and denies closure on matters

litigated.” Id. at 298, 210 S.W.3d at 133 (citations omitted).

The “mandate rule” is a “sub-species” of the law-of-the-case doctrine, under which the

appellate court’s decision “establishes the law of the case for the trial court upon remand

and for the appellate court itself upon subsequent review and is conclusive of every question

of law and fact previously decided in the former appeal, and also of those that could have

been raised and decided in the first appeal but were not presented.” Id. Law of the case also

prevents consideration of arguments that could have been made at trial but were not

presented. Id. at 299, 210 S.W.3d at 134. Additionally, “[w]hen there is no cross-appeal, the

order from which [a] cross-appeal is not taken becomes the law of the case.” Pro-Comp Mgmt.,

Inc. v. R.K. Enters., LLC, 366 Ark. 463, 466, 237 S.W.3d 20, 22 (2006) (quoting Clemmons v.

Office of Child Support Enf’t, 345 Ark. 330, 351, 47 S.W.3d 227, 241 (2001)).

In its July 5, 2018 order, the circuit court rejected DHS’s title challenge and

concluded that the 2014 deed created an enforceable right of survivorship. Having found

that Martin and Sonja acquired legal title to the property through that conveyance, the court

considered and ultimately granted Lloyd and Derrell’s request for a constructive trust in

10
favor of the estate. The remedy of a constructive trust comes into play only after a person

has acquired legal title to property, albeit under circumstances that result in a finding that

“the beneficial interest should not go with the legal title.” Gregory v. Gregory, 2013 Ark. App.

57, at 2, 425 S.W.3d 845, 846. Lloyd and Derrell did not challenge the validity of title in

Martin and Sonja. Instead, they challenged the manner in which that title had been acquired

by electing to pursue the remedy of a constructive trust. As Martin points out, they also did

not file a notice of cross-appeal from the circuit court’s finding that Martin and Sonja had

acquired legal title.

We agree that Lloyd and Derrell could have challenged the validity of title as an

“alternative” theory at the same time they sought a constructive trust, just as DHS did. Our

reversal of the constructive trust in the first appeal, moreover, did not reopen the issue of

interpretation of the 2014 deed on remand. In electing to pursue only the remedy of

constructive trust, Lloyd and Derrell assumed that the 2014 deed and survivorship

agreement vested legal title solely in Martin and Sonja upon Eunice’s death, leaving the estate

with no interest in the property. See Farrow, 2017 Ark. App. 144, at 4–5, 515 S.W.3d at 656

(“When a joint tenant dies and is survived by other joint tenants, title to the real estate passes

by operation of law to the survivor or survivors.”). The circuit court found that Martin and

Sonja held legal title as joint tenants with survivorship rights, thereby rejecting the argument

raised by DHS. Lloyd and Derrell did not challenge this finding. Accordingly, we cannot say

that the circuit court erred by ruling that the belated-deed challenge was barred under the

11
law-of-the-case doctrine. Therefore, we affirm the circuit court’s order granting summary

judgment in favor of Martin.

Martin’s cross-appeal is easily resolved. Martin “takes issue” with statements in the

circuit court’s December 3, 2021 order that he “used undue influence over his mother in

creating this entire scenario.” He asks that this “verbiage” be set aside under the law-of-the-

case doctrine. However, he failed to preserve this issue by raising it in the circuit court. See

Priesmeyer v. Huggins, 2021 Ark. App. 410, at 9 n.5, 637 S.W.3d 274, 280 n.5 (holding that

appellate court lacked jurisdiction to address appellee’s argument when no cross-appeal was

filed and noting also that the arguments were not preserved due to appellee’s failure to raise

them below). Moreover, at the oral argument, his counsel conceded that the “verbiage” at

issue is merely dictum that has no effect on the judgment. See Mehaffy v. Clark, 2022 Ark.

App. 268, at 5 n.6, 646 S.W.3d 651, 653 n.6 (noting cross-appeal is considered abandoned

when brief asks for no affirmative relief). Indeed, “obiter dictum is mere comment and not

a decision of the court, and therefore not binding as the law of the case under res judicata.”

Clemmons, 345 Ark. at 348, 47 S.W.3d at 238. Accordingly, we reject Martin’s argument on

cross-appeal.

Finally, we turn to the multiple sanctions motions. On March 30, 2022, Martin filed

his first motion for sanctions, arguing that “[t]here can be no reasonable purpose to the filing

of this appeal. Even if the Decedent’s house is brought back into the probate estate, the claim

of [DHS] and the Special Administrator will clearly dispose of all the moneys derived

therefrom.” As such, he contends that delay can be the only reason for Lloyd and Derrell’s

12
appeal. Lloyd and Derrell countered, noting that the motion failed to cite any legal authority,

failed to include citations to the record to show that the appeal had been prosecuted merely

for the purpose of delay, and failed to otherwise comply with Arkansas Supreme Court Rule

6-2(b). Martin thereafter filed an amended motion for sanctions that included some record

citations. On May 24, 2022, Lloyd and Derrell filed their motion for sanctions alleging that

Martin’s motions were intended to harass and needlessly increase litigation costs and

requesting costs and fees associated with the preparation and filing of multiple responses—a

total amount of $1,877.50—pursuant to Arkansas Rule of Appellate Procedure–Civil 11(c).

Martin subsequently filed a motion to strike Lloyd and Derrell’s motion.

Rule 11(b) of the Arkansas Rules of Appellate Procedure–Civil provides, in pertinent

part, that the court “shall impose a sanction upon a party or attorney or both for: (1) taking

or continuing a frivolous appeal or initiating a frivolous proceeding, . . . (3) prosecuting an

appeal for purposes of delay . . ., and (4) . . . an improper purpose, . . . to cause unnecessary

delay or needless increase in the cost of litigation.” A frivolous appeal or proceeding is one

that has no reasonable legal or factual basis. See also Bambico v. Ouachita Indus., Inc., 2018

Ark. App. 537, at 4, 564 S.W.3d 534, 536. The primary purpose of Rule 11 sanctions is to

deter future litigation abuse. Id.

We cannot say that the present appeal is frivolous or prosecuted solely for the

purposes of delay. And although this is the second appeal in this probate case spanning

several years, we do not find that “future litigation abuse” is a significant concern here. Id. at

13
5, 564 S.W.3d at 536. Accordingly, we deny the motions for sanctions and the motion to

strike.

Affirmed on direct appeal; affirmed on cross-appeal.

GLADWIN and KLAPPENBACH, JJ., agree.

Brett D. Watson, Attorney at Law, PLLC, by: Brett D. Watson, for appellants/cross-

appellees.

Eckhart Alford, P.L.L.C., by: Fredye Long Alford, for appellees/cross-appellants.

14