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The full case caption appears at the end of this opinion. 1. Judgment — summary judgment — when granted. — Summary judgment is to begranted by a trial court only when it is clear that there are no genuine issues ofmaterial fact to be litigated, and the party is entitled to judgment as a matter oflaw. 2. Judgment — summary judgment — burdens of proof. — Once the moving partyhas established a prima facie entitlement to summary judgment, the opposing partymust meet proof with proof and demonstrate the existence of a material issue offact. 3. Judgment — summary judgment — standard of review. — On review, theappellate court determines if summary judgment was appropriate based on whether theevidentiary items presented by the moving party in support of the motion leave amaterial fact unanswered; the appellate court views the evidence in a light mostfavorable to the party against whom the motion was filed, resolving all doubts andinferences against the moving party; the appellate court’s review focuses not onlyon thepleadings, but also on the affidavits and other documents filed by theparties. 4. Civil procedure — res judicata — issue preclusion. — The concept ofres judicata has two facets, issue preclusion and claim preclusion; issuepreclusion precludes further litigation in connection with a certain issue and islimited to those matters previously at issue that were directly and necessarilyadjudicated. 5. Civil procedure — res judicata — appellants’ claims not barred underissue preclusion. — Appellants correctly concluded that their claims in thecircuit court action would not be barred under the issue-preclusion facet of resjudicata, as it was undisputed that the issues of liability raised in thecounterclaim against appellee were never actually litigated in the chancery courtaction. 6. Civil procedure — res judicata — claim preclusion. — The claimpreclusion facet of res judicata forecloses relitigation in a subsequent suit when(1) the first suit resulted in a final judgment on the merits; (2) the first suitwas based upon proper jurisdiction; (3) the first suit was fullycontested in goodfaith; (4) both suits involved the same claim or cause of action; and (5) bothsuits involved the same parties or their privies. 7. Civil procedure — res judicata — issues barred by claim preclusion.– Claim preclusion bars not only the relitigation of issues that were actuallylitigated in the first suit, but also those that could have been litigated but werenot; however, the doctrine of res judicata does not bar a plaintiff from refilinga claim after he or she has exercised the absolute right to one voluntary dismissalunder Ark. R. Civ. P. 41(a); the application of the doctrine of res judicata to aplaintiff’s voluntary dismissal under Ark. R. Civ. P. 41(a) would change theabsolute right to a qualified right and create two types of first-time nonsuits,those that could and those that could not be refiled. 8. Civil procedure — counterclaim voluntarily dismissed –applicability ofArk. R. Civ. P. 13(a) did not depend solely on general principles of resjudicata. — Where appellants’ assertion of a counterclaim in the first actionand the voluntary dismissal of that counterclaim pursuant to Ark. R. Civ. P. 41(a)were in issue, the applicability of Ark. R. Civ.P. 13(a) did not depend solely onthe general principles of res judicata. 9. Civil procedure — Ark. R. Civ. P. 13(a) — purpose of. — The purpose ofRule 13(a) of the Arkansas Rules of Civil Procedure is to require parties topresent all existing claims simultaneously to the court or be forever barred, thuspreventing a multiplicity of suits arising from one set of circumstances. 10. Civil procedure — claims arose from same set of circumstances –present claims by appellants constituted compulsory counterclaims inearlier chancery action. — Where the claims at issue arose from the same set ofcircumstances, financing arrangements for a bed-and-breakfast, the appellants’claims arose directly from the financing transactions, and a logical relationshipexisted between the foreclosure, the counterclaim, and the subsequent complaint,appellants’ claims in the present circuit court action constituted compulsorycounterclaims in the earlier chancery court action under Ark. R. Civ. P. 13(a). 11. Civil procedure — Ark. R. Civ. P. 41 — dismissal ofcompulsorycounterclaim. — A plaintiff may once voluntarily dismiss his or her complaintwithout prejudice to refile it within one year; similarly, under Rule 41, adefendant may once voluntarily dismiss his or her compulsory counterclaim withoutprejudice to refile it within one year. 12. Civil procedure — grant of summary judgment & dismissal of complaintin error — reversed in part. — Where appellants timely asserted theircompulsory counterclaims in the chancery court action, and therefore met therequirements of Rule 13, and the provisions of Rule 41 allowed appellants tovoluntarily dismiss those claims without prejudice to refiling them within oneyear, the trial court erred in granting summary judgment and dismissing appellants’complaint, which was not barred by the doctrine of res judicata or by thecompulsory counterclaim requirements of Ark. R. Civ. P. 13(a). Annabelle Clinton Imber, Justice. This case arises from ongoing litigationbetween the parties in both circuit and chancery court. This appeal is from asummary judgment by the circuit court and presents the question of whether theappellants, Jim R. Linn and Virginia Cheryl Linn, lost their right to refile claimsin circuit court when they voluntarily nonsuited similar claims in the previouschancery court proceeding. The appellees, NationsBank, as successor-in-interest to Boatmen’s National Bank ofConway, and Tom Nelson, a Boatmen’s employee, committed to provide constructionfinancing loans to the Linns in April, 1995, for the purpose of building abed-and-breakfast facility in Greenbrier, Arkansas. After construction of thefacility had been completed, a dispute arose between the parties as toNationsBank’s obligation to provide permanent financing equal to eighty percent(80%) of the value of the bed-and-breakfast as evidenced by an appraisal. As aresult of this dispute, the Linns discontinued interest payments on theconstruction loans, and NationsBank responded by filing a foreclosure action in theChancery Court of Faulkner County in June 1996. In August 1996, the Linns filed acounterclaim in the chancery court action, alleging breach of contract, fraudulentmisrepresentation, and negligence, arising from NationsBank’s refusal to honor analleged oral agreement to provide permanentfinancing after construction wascompleted on the bed-and-breakfast. The Linns also requested that the counterclaimbe severed and transferred to circuit court for a jury trial. NationsBank filed areply to the Linns’s counterclaim, denying any liability for breach of contract,fraudulent misrepresentation, or negligence. NationsBank also requested that theLinns’s request for severance, transfer, and jury trial be denied. In September 1996, the Linns filed a Chapter 7 bankruptcy proceeding in the UnitedStates Bankruptcy Court, Eastern District of Arkansas. On January 23, 1997,NationsBank obtained an order for abandonment and relief from the automatic stay inthe bankruptcy proceeding, and on January 24, 1997, an order of discharge wasentered by the U.S. Bankruptcy Court releasing the Linns from all dischargeabledebts. On February 14, 1997, a decree was entered by the chancery court thatgranted the foreclosure. Paragraph seven (7) of the decree stated as follows: Thatupon motion by the Linns pursuant to Arkansas Rules of Civil Procedure 41(a), thecounterclaim filed herein by defendants Linns against plaintiff [NationsBank]should be dismissed without prejudice. On February 9, 1998, the Linns filed a complaint against NationsBank and Tom Nelsonin the Circuit Court of Faulkner County, which stated that it was “founded upon thesame action non-suited by the Plaintiffs [the Linns] in Faulkner County ChanceryCourt onor about 2/13/98 [sic].” The complaint again asserted claims for breach ofcontract, fraudulent misrepresentation, and negligence, and asserted new claims forbreach of good faith and breach of fiduciary duty. NationsBank and Tom Nelson filedan answer to the Linns’s complaint and a motion for summary judgment, whichasserted that the claims by the Linns in the present circuit court actionconstituted compulsory counterclaims in the previous chancery court action, andwere barred by the doctrine of res judicata or collateral estoppel. The trialcourt granted the motion for summary judgment and dismissed the complaint on thebasis that the claims raised by the Linns in the circuit court action were (1)compulsory counterclaims under Ark. R. Civ. P. 13(a) in the previous chancery courtaction; and (2) were barred by the doctrine of res judicata. On appeal, the Linns contend that the trial court erred in granting NationsBank’smotion for summary judgment and dismissing their complaint under the doctrine ofres judicata. In Adams v. Arthur, 333 Ark. 53, 969 S.W.2d 598 (1998), we statedthe standard of review for a grant of summary judgment: The law is well settled that summary judgment is to be granted by a trial court 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. Wallace v. Broyles, 331 Ark. 58, 961 S.W.2d 712 (1998), supp. opinion on denial of reh’g, 332 Ark. 189 (1998). Once the moving party has established a prima facie entitlement to summary judgment, the opposing party mustmeet proof with proof and demonstrate the existence of a material issue of fact. Id. On appellate review, this court determines if summary judgment was appropriate based on whether the evidentiary items presented by the moving party in support of the motion leave a material fact unanswered. Id. This court views the evidence in a light most favorable to the party against whom the motion was filed, resolving all doubts and inferences against the moving party. Id. Our review focuses not only on the pleadings, but also on the affidavits and other documents filed by the parties. Id. Adams v. Arthur, 333 Ark. at 62, 969 S.W.2d at 602. The Linns first assert that the trial court erred in granting summary judgmentbecause the traditional elements of res judicata were not satisfied. The conceptof res judicata has two facets. In Matter of Estate of Goston v. Ford Motor Co.,320 Ark. 699, 898 S.W.2d 471 (1995) (citing John Chesseman Trucking, Inc. v.Pinson, 313 Ark. 632, 855 S.W.2d 941 (1993)). Issue preclusion precludes furtherlitigation in connection with a certain issue, and is limited to those matterspreviously at issue, which were directly and necessarily adjudicated. Id. TheLinns correctly conclude that their claims in the circuit court action would not bebarred under the issue preclusion facet of res judicata, as it is undisputed thatthe issues of liability raised in the counterclaim against NationsBank were neveractually litigated in the chancery court action. The claim preclusion facet of res judicata forecloses relitigation in a subsequentsuit when: (1) the first suit resulted in a final judgment on the merits; (2) the first suit was based upon proper jurisdiction; (3) the first suit was fully contested in good faith; (4) both suits involved the same claim or cause of action; and (5) both suits involved the same parties or their privies. Bailey v. Harris Brake Fire Protection Dist., 287 Ark. 268, 269, 697 S.W.2d 916,917 (1985) (citing Wells v. Ark. Pub. Serv. Comm’n., 272 Ark. 481, 616 S.W.2d 718(1981)). Claim preclusion bars not only the relitigation of issues which wereactually litigated in the first suit, but also those which could have beenlitigated but were not. Wells v. Ark. Pub. Serv. Comm’n., supra. However, we haveheld that the doctrine of res judicata does not bar a plaintiff from refiling aclaim after he or she has exercised the absolute right to one voluntary dismissalunder Ark. R. Civ. P. 41(a). Lemon v. Laws, 305 Ark. 143, 806 S.W.2d 1 (1991). Inso holding, we concluded that the application of the doctrine of res judicata to aplaintiff’s voluntary dismissal under Ark. R. Civ. P. 41(a) would change theabsolute right to a qualified right andcreate “two types of first-time nonsuits:Those that could and those that could not be refiled.” Id. at 145, 806 S.W.2d at2. While acknowledging that Ark. R. Civ. P. 41 does provide for the voluntarydismissal of claims, the trial court nevertheless concluded that the principles ofres judicata were applicable in this case, citing Shrieves v. Yarbrough, 220 Ark.256, 247 S.W.2d 193 (1952); Golden Host Westchase, Inc. v. First Service Corp., 29Ark. App. 107, 778 S.W.2d 633 (1989); and McDaniel Bros. Constr. Co. v. SimmonsFirst Bank, 24 Ark. App. 106, 749 S.W.2d 348 (1988). However, those cases do notmention the voluntary dismissal of counterclaims under Rule 41. Thus, with regardto the circumstances in this case, they are inapposite and readily distinguishable.In Golden Host, supra, the counterclaim was dismissed with prejudice in the firstaction, and the McDaniel case dealt with claims that the plaintiff never pled whenit filed the original foreclosure actions. See also, In Matter of Estate of Gostonv. Ford Motor Co., supra; Martin v. Citizens Bank of Beebe, 283 Ark. 145, 671S.W.2d 754 (1984); and McJunkins v. Lemons, 52 Ark. App. 1, 913 S.W.2d 306 (1996),in which the issue of omitted compulsory counterclaims under Ark. R. Civ. P. 13 hasbeen addressed by this court and the court of appeals. Finally, Shrieves v.Yarbrough, supra, predates this court’s adoption of the Rules of Civil Procedure,and, therefore, does not address either compulsorycounterclaims under Ark. R. Civ.P. 13 or voluntary nonsuits under Ark. R. Civ. P. 41. This case, however, involvesthe Linns’s assertion of a counterclaim in the first action and the voluntarydismissal of that counterclaim pursuant to Ark. R. Civ. P. 41(a). Under thesecircumstances, we agree with NationsBank that the applicability of Ark. R. Civ. P.13(a) does not depend solely on the general principles of res judicata. The Linns next assert that the trial court erred in granting judgment because theclaims raised in the circuit court action were not compulsory counterclaims in theprevious chancery court action. We disagree. Rule 13(a) of the Arkansas Rules of Civil Procedure provides that: A pleading shall state as a counterclaim any claim which, at the time of filing the pleading, the pleader has against any opposing party, if it arises out of the transaction or occurrence that is the subject matter of the opposing party’s claim and does not require for its adjudication the presence of third parties of whom the court cannot acquire jurisdiction. But the pleader need not state the claim if (1) at the time the action was commenced the claim was the subject of another pending action, or (2) the opposing party brought suit upon his claim by attachment or other process by which the court did not acquire jurisdiction to render a personal judgment on that claim, and the pleader is not stating any counterclaim under this Rule 13. The purpose for this rule is to require parties to present all existing claimssimultaneously to the court or be forever barred,thus preventing a multiplicity ofsuits arising from one set of circumstances. In Matter of Estate of Goston v. FordMotor Co., 320 Ark. 699, 898 S.W.2d 471 (1995); Bankston v. McKenzie, 288 Ark.65, 702 S.W.2d 14 (1986). There is no question that the claims at issue here arose from the same set ofcircumstances — financing arrangements for a bed-and-breakfast facility. The Linnsalleged, in both the counterclaim filed in the chancery court action and thesubsequent complaint filed in circuit court, that Tom Nelson told Ms. Linn on April18, 1995, that NationsBank had agreed to make a construction loan and a permanentloan. They further alleged that the purported offer to provide permanent financinginduced them to enter into the construction loan agreement with NationsBank,instead of obtaining financing with another lending institution. Thus, the factsrelating to the claims between the parties originate in a single conversation andculminate when NationsBank commenced the foreclosure on the construction loan. TheLinns’s claims arise directly from the financing transactions and a logicalrelationship exists between the foreclosure, the counterclaim, and the subsequentcomplaint. Wasp Oil, Inc. v. Arkansas Oil & Gas, Inc., 280 Ark. 420, 625 S.W.2d397 (1983). See also, Adam v. Jacobs, 950 F.2d 89, 92 (2nd Cir. 1991) (the claimswere compulsory counterclaims where “[t]he guarantees and the merger agreementwereexecuted together and, by the plaintiff’s own argument, the parties would nothave signed one without the other.”). We therefore hold that the Linns’s claims inthe present circuit court action constituted compulsory counterclaims in theearlier chancery court action under Ark. R. Civ. P. 13(a). The Linns further argue that their claims in the present circuit court actionshould not be barred even if they were compulsory under Ark. R. Civ. P. 13(a),because they were voluntarily dismissed without prejudice pursuant to Ark. R. Civ.P. 41. In considering this argument, we must examine not only the language of Rule13, but also the language of Rule 41. As quoted above, Rule 13(a) requires that any claim existing at the time of filinga responsive pleading must be asserted in that responsive pleading if it arisesfrom the same transaction or occurrence that is the subject matter of the opposingparty’s claim. Rule 13 does not, however, state whether a compulsory claim must belitigated in order to prevent a bar. In contrast, the plain language in Rule 41clearly states that a defendant has the right to proceed on his or hercounterclaim although the plaintiff’s action may have been dismissed, and that theprovisions of Rule 41 apply to the dismissal of any counterclaim: (a) Voluntary Dismissal: Effect Thereof (1) Subject to the provisions of Rule 23(d) and Rule 66, an action may be dismissedwithout prejudice to afuture action by the plaintiff before the final submission ofthe case to the jury, or to the court where the trial is by the court. Althoughsuch dismissal is a matter of right, it is effective only upon entry of a courtorder dismissing the action. (2) A voluntary dismissal under paragraph (1) operates as an adjudication on themerits when filed by a plaintiff who has once dismissed in any court of the UnitedStates or of any state an action based upon or including the same claim, unless allparties agree by written stipulation that such dismissal is without prejudice. (3) In any case where a set-off or counterclaim has been previously presented, thedefendant shall have the right of proceeding on his claim although the plaintiffmay have dismissed his action. * * * (c) The provisions of this rule apply to the dismissal of any counterclaim,cross-claim, or third-party claim. Ark. R. Civ. P. 41. (Emphasis added.) As previously stated, we have held that aftera counterclaim has been filed, a plaintiff may once voluntarily dismiss his or hercomplaint without prejudice to refile it within one year. Lemon v. Laws, supra.Similarly, we hold that under Rule 41, a defendant may once voluntarily dismiss hisor her compulsory counterclaim without prejudice to refile it within one year. For these reasons, we conclude (1) that the Linns timely asserted their compulsorycounterclaims for breach of contract, fraudulent misrepresentation, and negligencein the chancerycourt action, and therefore met the requirements of Rule 13 forthose claims; and (2) that the provisions of Rule 41 allowed the Linns tovoluntarily dismiss those claims without prejudice to refiling them within oneyear. This conclusion is controlled by the language in Rule 13 and Rule 41 of theArkansas Rules of Civil Procedure. Furthermore, this conclusion does not depriveRule 13 of its efficiency, in that omitted compulsory counterclaims will still bebarred in subsequent litigation. Thus, we further conclude that the Linns failed toassert their compulsory counterclaims for breach of good faith and breach offiduciary duty in the chancery action, and therefore did not satisfy therequirements of Rule 13 for those claims. Consequently, we hold that the trialcourt properly dismissed, by summary judgment, the Linn’s claims for breach of goodfaith and breach of fiduciary duty. However, with regard to their previouslyasserted claims for breach of contract, fraudulent misrepresentation, andnegligence, we hold that the trial court erred in granting summary judgment anddismissing those claims, which were not barred by the doctrine of res judicata orby the compulsory counterclaim requirements of Ark. R. Civ. P. 13(a). Affirmed in part, reversed in part, and remanded.
Linn v. Nationsbank Jim R. LINN and Virginia Cheryl Linn v. NATIONSBANK and Tom Nelson 99-443 ___ S.W.3d ___ Supreme Court of Arkansas Opinion delivered April 13, 2000 Appeal from Faulkner Circuit Court; Charles Edward Clawson, Judge; affirmed inpart, reversed in part. Harrill & Sutter, PLLC, by: Raymond Harrill, for appellants. Rose Law Firm, P.A., by: Allen W. Bird II, for appellees.
 
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