ARKANSAS COURT OF APPEALS

NOT DESIGNATED FOR PUBLICATION

CHIEF JUDGE JOHN F. STROUD, JR.

DIVISION IV

ORAN CARTER

APPELLANT

V.

BANK OF YELLVILLE

APPELLEE

CA 00-1476

August 29, 2001

APPEAL FROM THE MARION

COUNTY CHANCERY COURT

[E98-189-1]

HONORABLE ROGER V. LOGAN,

JR., CHANCERY JUDGE

AFFIRMED

Appellant, Oran Carter, initially filed this action against appellee, Bank of Yellville, in Marion County Chancery Court on August 31, 1998. On January 20, 1999, the action was dismissed without prejudice. Appellant filed a petition to reopen on January 5, 2000. Following a hearing the chancellor dismissed the action with prejudice on September 6, 2000. We affirm on direct appeal and on cross-appeal.

There was no testimony and the following facts are taken from the documents and arguments that were abstracted in the briefs. Appellant served on appellee's board of directors for approximately fifteen years prior to 1992, when the board adopted a resolution establishing its "Directors Retirement Policy." The resolution provided that upon reaching the age of seventy, directors had the option of electing to be placed on emeritus status, whichwas a nonvoting position, and for which they would receive a $100 per month stipend upon attending the monthly board-of-directors meetings. Appellee's board also enacted a subsequent policy that allowed directors emeriti who had reached the age of eighty to receive compensation regardless of whether they attended the monthly meetings.

Appellant opted to take the emeritus status when he reached the age of seventy in 1992. However, in September 1995, appellee's board of directors eliminated the director emeritus position. Appellant filed his initial petition in chancery court on August 31, 1998, seeking specific performance from appellee based on his theory that he took the emeritus position "upon full faith reliance from The Bank of Yellville that this position would continue for his lifetime or until he saw fit to resign." Appellee filed its motion to dismiss on January 7, 1999, contending 1) that more than 120 days had passed with no service of summons and that the petition should be dismissed pursuant to Rule 4(i) of the Arkansas Rules of Civil Procedure, and 2) that the petition failed to state facts upon which relief could be granted and that it should be dismissed pursuant to Rule 12(b)(6) of the Arkansas Rules of Civil Procedure. On January 20, 1999, the trial court dismissed the action pursuant to Rule 4(i), without prejudice.

On February 1, 1999, appellant filed a motion to vacate the January 20 order dismissing his case, and he also filed a motion for amendment of judgment and/or new trial. Both of these motions were subsequently withdrawn by appellant.

On January 5, 2000, appellant filed a petition to reopen his original petition, which sought specific performance to restore him to his position as director emeritus. In addition,appellant contended that appellee's director-emeritus policy was a binding, written contract between the parties. On January 21, 2000, appellee filed its motion to strike appellant's petition to reopen, contending that the case was never properly commenced and therefore could not be reopened. In addition, appellee contended that appellant's claims were barred by the three-year statute of limitations.

On February 24, 2000, appellee filed its motion for sanctions under Rule 11, and appellant responded on March 3, 2000, contending that the instant case differed from the original in that it included a claim based upon a written contract, that it was filed in good faith, and that if it could not be reopened appellant requested that it be transferred to a new file for which he would pay filing fees.

Finally, on September 6, 2000, the trial court entered its decree, finding that appellant did not obtain service of process on its original petition; that the original petition did not toll the statute of limitations; that unless appellant had a claim founded upon a written contract, his petition to reopen was barred by the statute of limitations; that appellant had not attached any written document that stated the duration of his position was to be for the rest of his life; that, consequently, the three-year statute of limitations barred the action; and that appellee was entitled to terminate the relationship because under Arkansas law when an employment contract is silent as to its duration either party may terminate the relationship at will and without cause.

For his sole point of appeal, appellant contends that the agreement between the parties is a written contract governed by a five-year statute of limitations pursuant to which he is entitled to an emeritus position for the remainder of his life. We disagree.

First, Arkansas Code Annotated section 16-56-105 (1987), provides in pertinent part:

The following actions shall be commenced within three (3) years after the cause of action accrues:

(1) All actions founded upon any contract, obligation, or liability not under seal and not in writing, excepting such as are brought upon the judgment or decree of some court of record of the United States or of this or some other state;

. . . .

(3) All actions founded on any contract or liability, expressed or implied[.]

(Emphasis added.) On the other hand, Arkansas Code Annotated section 16-56-111(a) (Supp. 1999), provides that "[a]ctions to enforce written obligations, duties, or rights . . . shall be commenced within five (5) years after the cause of action shall accrue." (Emphasis added.) Here, appellant contends that the "written description of the director emeritus position is sufficient to establish a contract between Dr. Carter [appellant] and the Board [appellee]." Even if we were to conclude that the director-emeritus policy created a contractual obligation with respect to payment for attendance at monthly board meetings, it says nothing about the duration of the emeritus position. In Scroggin Farms Corp. v. Howell, 216 Ark. 569, 572, 226 S.W.2d 562, 564 (1950), our supreme court explained:

We need not decide whether or not this implied warranty is to be read into the contract; it is enough that it is not written into the contract. The three-year statute applies to actions on all contracts, expressed or implied, which are not in writing,and has regularly been applied to incidental obligations implied from written contracts.

(Emphasis added.)

The key argument asserted by appellant is that the policy provided him a position for life. Yet, as noted by the trial court, appellant "has not attached to his pleading any written document that states that the duration of his position as director emeritus was to be for the remainder of his life." With no written term of duration, we hold that the trial court was correct in applying the three-year limitations period.

Second, even if we regarded the director-emeritus policy as a written employment contract with respect to which the five-year statute of limitations applied, appellant still could not prevail on his argument that he was entitled to the emeritus position for the remainder of his life. "It is well established under Arkansas law that when an employment contract is silent as to its duration, either party may terminate the relationship at will and without cause." Cottrell v. Cottrell, 332 Ark. 352, 354, 965 S.W.2d 129, 130 (1998). Here, as noted previously, the director-emeritus policy is silent as to its duration. Consequently, we hold that the trial court was correct in determining that appellee was entitled to terminate the relationship at will.

On cross-appeal, appellee contends that the chancellor abused his discretion in not awarding sanctions. We disagree.

Rule 11 of the Arkansas Rules of Civil Procedure provides in pertinent part:

(a) Every pleading, motion, and other paper of a party represented by an attorney shall be signed by at least one attorney of record in his individual name,whose address shall be stated. . . . The signature of an attorney or party constitutes a certificate by him that he has read the pleading, motion, or other paper; that to the best of his knowledge, information, and belief formed after reasonable inquiry it is well grounded in fact and is warranted by existing law or a good faith argument for the extension, modification, or reversal of existing law, and that it is not interposed for any improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation. . . . If a pleading, motion, or other paper is signed in violation of this rule, the court, upon motion or upon its own initiative, shall impose upon the person who signed it, . . . an appropriate sanction, . . . .

As our supreme court explained in Ward v. Dapper Dan Cleaners & Laundry, Inc., 309 Ark. 192, 195, 828 S.W.2d 833, 836 (1992), "Whether a violation occurred is a matter for the court to determine, and this determination involves matters of judgment and degree, and in reviewing a trial court's Rule 11 determination, we do so under an abuse of discretion standard." Here, while we find no error in the chancellor's dismissal of this case, neither do we find that he abused his discretion in refusing to award sanctions.

Affirmed.

Pittman and Jennings, JJ., agree.