Heartland Bank v. Parsley et al
ORDER denying 61 Third-party Defendant's Motion for Summary Judgment and granting 63 Plaintiff's Motion for Summary Judgment. Plaintiff should file a brief setting out an updated loan balance. Trial on the Third-party Complaint remains set for Tuesday, 10/10/2017. Signed by Judge Billy Roy Wilson on 09/25/2017. (cmn)
IN THE UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF ARKANSAS
RANDAL B. PARSLEY, et al.
RANDAL B. PARSLEY
L. WALTER QUINN
Pending are Third-party Defendant’s Motion for Summary Judgment (Doc. No. 61) and
Plaintiff’s Motion for Summary Judgment (Doc. No. 63). Responses and replies have been
filed.1 For the reasons set out below, Third-party Defendant’s Motion for Summary Judgment
(Doc. No. 61) is DENIED and Plaintiff’s Motion for Summary Judgment (Doc. No. 63) is
In 2011, Third-party Defendant Walter Quinn and a man named John Lewis owned Rock
Exploration, LLC, which was involved in the oil-and-gas business. Looking for another
investor, Mr. Quinn offered to sell Mr. Randal Parsley a 10% stake in Rock Exploration. The
agreement between Mr. Quinn and Mr. Parsley was never reduced to writing. Based on a report
supplied by Mr. Quinn, Rock Exploration had $30 million in oil-and-gas reserves, which meant
Mr. Parsley needed to pay $3 million to obtain the 10% stake. On December 19, 2011, Plaintiff
Doc. Nos. 79, 83, 85, 87.
Unless otherwise noted, the Background comes from the statements of material fact not
in dispute (Doc. Nos. 60, 64, 81).
Heartland Bank loaned Mr. Parsley and Ambassador Energy, LLC (“Defendants”) $3 million, (at
7% annual interest) to invest in Rock Exploration. Defendants have not timely repaid the loan,
and, as of August 30, 2017, a little over $1.7 million was outstanding on the loan, with interest
Heartland Bank filed the Complaint seeking repayment of the loan. Defendants
responded by claiming they were duped by Mr. Quinn, and that Heartland Bank has unclean
hands because it was owned by Mr. Quinn and knew what was going on with the loan. Mr.
Quinn contends that Defendants’ claims are subject to the statute of limitations.
SUMMARY JUDGMENT STANDARD
Summary judgment is appropriate only when there is no genuine issue of material fact, so
that the dispute may be decided on purely legal grounds.3 The Supreme Court has established
guidelines to assist trial courts in determining whether this standard has been met:
The inquiry performed is the threshold inquiry of determining whether there is the
need for a trial -- whether, in other words, there are any genuine factual issues that
properly can be resolved only by a finder of fact because they may reasonably be
resolved in favor of either party.4
The Court of Appeals for the Eighth Circuit has cautioned that summary judgment is an
extreme remedy that should only be granted when the movant has established a right to the
judgment beyond controversy.5 Nevertheless, summary judgment promotes judicial economy by
preventing trial when no genuine issue of fact remains.6 This court must view the facts in the
Holloway v. Lockhart, 813 F.2d 874 (8th Cir. 1987); Fed R. Civ. P. 56.
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986).
Inland Oil & Transport Co. v. United States, 600 F.2d 725, 727 (8th Cir. 1979).
Id. at 728.
light most favorable to the party opposing the motion.7 The Eighth Circuit has also set out the
burden of the parties in connection with a summary judgment motion:
[T]he burden on the party moving for summary judgment is only to demonstrate,
i.e.,“[to point] out to the District Court,” that the record does not disclose a genuine
dispute on a material fact. It is enough for the movant to bring up the fact that the
record does not contain such an issue and to identify that part of the record which
bears out his assertion. Once this is done, his burden is discharged, and, if the record
in fact bears out the claim that no genuine dispute exists on any material fact, it is
then the respondent’s burden to set forth affirmative evidence, specific facts,
showing that there is a genuine dispute on that issue. If the respondent fails to carry
that burden, summary judgment should be granted.8
Only disputes over facts that may affect the outcome of the suit under governing law will
properly preclude the entry of summary judgment.9
Plaintiff’s Motion for Summary Judgment
Plaintiff asserts that it is entitled to summary judgment because it is undisputed that
Defendants took out a loan that is now overdue. Defendants do not deny this, but argue that
Plaintiff may not recover based on the unclean-hands doctrine.10 “[T]he clean-hands doctrine
bars relief to those guilty of improper conduct in the matter in which they seek relief.”11
Defendants point to numerous “questions of fact” to support their claim of unclean
hands. For example, when Defendants obtained the loan, Mr. Quinn “was the principal
Id. at 727-28.
Counts v. MK-Ferguson Co., 862 F.2d 1338, 1339 (8th Cir. 1988) (quoting City of Mt.
Pleasant v. Associated Elec. Coop., 838 F.2d 268, 273-74 (8th Cir. 1988) (citations omitted)).
Anderson, 477 U.S. at 248.
Doc. No. 80.
Poff v. Brown, 374 Ark. 453, 456, 288 S.W.3d 620, 623 (2008).
shareholder and chairman of Rock Bancshares, which owned all the stock of Heartland.”12
Notably, this is not in dispute. Defendants also alleged that Heartland Bank knew that Mr.
Quinn was benefitting from the loan to Mr. Parsley and this would have been obvious because
Mr. Parsley didn’t make a payment on the loan until June 2015 – before then, payments were
always made by Mr. Lewis. Neither of these arguments – nor the others set out in Defendants’
response – have anything to do with the legitimacy of the loan between Defendants and
The undisputed facts are that Defendants borrowed $3 million to buy 10% of a business
owned by Mr. Quinn. Defendants have not repaid the loan. Plaintiff seeks repayment. The fact
that Mr. Quinn allegedly induced Defendants to get a loan and has failed to come through on his
alleged agreement with Defendants is irrelevant to the dispute between Plaintiff and Defendants.
Defendants obtained a loan from Plaintiff under terms that were agreeable to both parties.
Defendants – through no fault of Plaintiff – have failed to repay the loan. Accordingly,
Plaintiff’s Motion for Summary Judgment (Doc. No. 63) is GRANTED.
Third-party Defendant’s Motion for Summary Judgment
Third-party Defendant Quinn asserts that he is entitled to summary judgment based on
the statute of limitations – which everyone agrees is three years. According to Mr. Quinn, the
statute of limitations commenced on January 12, 2012, because that was when Defendants first
requested a certificate of ownership interest in Rock Exploration. Defendants contend that the
claims did not arise until December 1, 2015, when Mr. Quinn finally denied having an
agreement with Defendants.
It seems to me that the run-around Defendants allegedly got from Mr. Quinn (and Mr.
Lewis) tolled the statute of limitations, since this run-around, obviously, lead Defendants to
believe that the deal was still on. Mr. Quinn even admits that he was dodging Defendants – e.g.
In 2013, Defendants asked Mr. Quinn about the remainder of the loan but “Quinn never provided
Parsley a direct answer.”13 In May 2015, Mr. Quinn told Defendants that he “would make good
on his promise to pay the $1.5 million to Heartland if Parsley would sign the Heartland Bank
Accordingly, Third-party Defendant’s Motion for Summary Judgment (Doc. No. 61) is
Based on the findings of fact and conclusions of law above, Third-party Defendant’s
Motion for Summary Judgment (Doc. No. 61) is DENIED and Plaintiff’s Motion for Summary
Judgment (Doc. No. 63) is GRANTED.
Plaintiff should forthwith file a brief setting out an updated loan balance.
Trial on the Third-party Complaint remains set for Tuesday, October 10, 2017.
IT IS SO ORDERED this 25th day of September, 2017.
/s/ Billy Roy Wilson _____________
UNITED STATES DISTRICT JUDGE
Doc. No. 60.
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?