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United-Bilt Homes, Inc. v. Sampson

315 Ark. 156 (1993)

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United-Bilt Homes, Inc. v. Sampson

Arkansas Supreme Court

315 Ark. 156 (1993)

Facts

Sampson, a homeowner, sued United-Bilt Homes, Inc, his mortgage company and the loss-payee on Sampson’s homeowner’s policy, in state court after United-Bilt refused to release insurance proceeds to the contractor who repaired Sampson’s home after a fire. Sampson won the case and was awarded compensatory and punitive damages. United-Bilt then brought a foreclosure action against Sampson. Sampson sought dismissal and alleged that the foreclosure action was barred under the Arkansas compulsory-counterclaim rule, which for all relevant purposes was identical to Federal Rule of Civil Procedure 13(a). The court agreed and dismissed United-Bilt’s case, finding that the foreclosure was a compulsory counterclaim that should have been brought in the earlier case. United-Bilt appealed and argued that its foreclosure claim did not arise out of the same transaction or occurrence that was litigated in the first case and that, at the time United-Bilt answered the complaint in the earlier case, it had not yet exercised its option to accelerate Sampson’s debt, therefore, its foreclosure claim was not mature and could not be a compulsory counterclaim.

Rule of Law

Issue

Holding and Reasoning (Corbin, J.)

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