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Arkansas Court of Appeals sides with Fort Chaffee Redevelopment Authority in misrepresentation case

by Thomas Saccente | June 3, 2023 at 5:00 a.m.
A worker removes debris at a construction site in February 2022 at Fort Chaffee in Fort Smith. (File Photo/River Valley Democrat-Gazette/Hank Layton)

FORT SMITH -- The Arkansas Court of Appeals has granted the Fort Chaffee Redevelopment Authority its third court victory in four years over property owners concerning its historic district.

The court unanimously ruled in favor of the authority, which oversees development of the Chaffee Crossing area in Fort Smith and Barling, on claims by four property owners that the authority misrepresented future development of the Chaffee Crossing Historic District to get them to purchase property, according to an authority news release Wednesday.

"We are pleased the court system has continuously recognized that the FCRA has not committed any wrongdoing despite the persistent false allegations made against us by a select few individuals," Daniel Mann, the authority's executive director, said in the news release.

The appeal originated from a lawsuit against the authority, Ghan and Cooper Commercial Properties and other defendants identified as "John Does 1–10" initially filed April 2020 in Sebastian County Circuit Court, according to the majority opinion filed Wednesday in the Arkansas Court of Appeals.

The people and entities who filed the lawsuit included Christina and John Coats of JKC Cellars, Tina and Randy DeCanter of Old Fort Furniture, Paul Van Lare of GrowFresh, Kraig Koren of Premier Heating and Air, KRIJO Investments and DeCanter Family Revocable Trust. Keith Munro was another plaintiff on behalf of "a class of similarly situated taxpayers," with others being named as interested parties.

The lawsuit asserted claims for "estoppel, reliance, unclean hands, misrepresentation, breach of contract and implied covenant of good faith and fair dealing, violation of the Arkansas Trust Code and illegal exaction," according to the opinion. However, this was amended in June 2020 to only assert claims of misrepresentation and inverse condemnation against the authority.

The amended complaint states that each of the entities involved bought property from the authority, arguing that it made representations to them that it knew were false to get them to do so. This included representations that the development requirements in place in the area were critical to the value of the property wouldn't be changed in a "material way" and would be applied to all other properties in the area.

The authority also acted in contradiction to these representations, according to the lawsuit.

Each plaintiff suffered a decrease in property value compared with what it would have been worth if the authority hadn't made false representations, the lawsuit states.

The lawsuit also contends that actions the authority took relating to the regulation of property reduced the collective value of the plaintiffs' property in excess of $600,000. It asked the court to enter a judgment against the authority for "inverse condemnation" in the same amount of money, along with granting them all other relief to which they were entitled.

The Circuit Court granted a motion from the authority to dismiss the inverse-condemnation claim with prejudice in November 2020, the opinion states. It granted summary judgment to the authority on the misrepresentation claim March 16, 2021.

The plaintiffs -- who at this point consisted of JKC Cellars, Old Fort Furniture, KRIJO Investments and DeCanter Family Revocable Trust due to dismissals in the case -- filed an appeal in April 2021. The authority at this point was the sole defendant, with the others and the interested parties being dismissed at various points.

The plaintiffs' legal counsel filed a brief in the Arkansas Court of Appeals Sept. 9, 2021.

However, the opinion -- written by Judge Waymond Brown and agreed to by judges Kenneth Hixson and Mike Murphy -- affirmed the Circuit Court's order.

Print Headline: Fort Chaffee Redevelopment Authority wins appeal in misrepresentation case


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