{ "id": 1893784, "name": "Hazel G. QUICK v. Charles WOODY, et al.", "name_abbreviation": "Quick v. Woody", "decision_date": "1988-04-04", "docket_number": "88-39", "first_page": "168", "last_page": "176", "citations": [ { "type": "official", "cite": "295 Ark. 168" }, { "type": "parallel", "cite": "747 S.W.2d 108" } ], "court": { "name_abbreviation": "Ark.", "id": 8808, "name": "Arkansas Supreme Court" }, "jurisdiction": { "id": 34, "name_long": "Arkansas", "name": "Ark." }, "cites_to": [ { "cite": "294 Ark. 421", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 1895716 ], "weight": 2, "year": 1988, "opinion_index": 0, "case_paths": [ "/ark/294/0421-01" ] }, { "cite": "257 Ark. 278", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 8719617 ], "weight": 2, "year": 1974, "opinion_index": 0, "case_paths": [ "/ark/257/0278-01" ] }, { "cite": "Ark. Code Ann. \u00a7 23-42-102", "category": "laws:leg_statute", "reporter": "Ark. Code Ann.", "weight": 2, "year": 1987, "pin_cites": [ { "page": "(2)" }, { "page": "(8)(D)" } ], "opinion_index": 0 }, { "cite": "719 S.W.2d 418", "category": "reporters:state_regional", "reporter": "S.W.2d", "case_ids": [ 1873740 ], "weight": 2, "year": 1986, "opinion_index": 0, "case_paths": [ "/ark/290/0314-02" ] }, { "cite": "290 Ark. 315", "category": "reporters:state", "reporter": "Ark.", "year": 1986, "opinion_index": 0 }, { "cite": "Ark. Code Ann. \u00a7\u00a7 23-42-101-23", "category": "laws:leg_statute", "reporter": "Ark. Code Ann.", "opinion_index": 0 }, { "cite": "Ark. Code Ann. \u00a7 23-42-106", "category": "laws:leg_statute", "reporter": "Ark. Code Ann.", "weight": 4, "year": 1987, "pin_cites": [ { "page": "(c)" }, { "page": "(c)" }, { "page": "(a)(1)" }, { "page": "(a)(1)" } ], "opinion_index": 0 } ], "analysis": { "cardinality": 638, "char_count": 15060, "ocr_confidence": 0.913, "pagerank": { "raw": 1.1464923023130103e-07, "percentile": 0.5803635655978399 }, "sha256": "d902e5cc1a87a4df85e6b5e884c4e0ac2d20581f0a3537512e52710caf2c11c0", "simhash": "1:9f4e015243a9c497", "word_count": 2473 }, "last_updated": "2023-07-14T18:11:27.354550+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [], "parties": [ "Hazel G. QUICK v. Charles WOODY, et al." ], "opinions": [ { "text": "Jack Holt, Jr., Chief Justice.\nThis case involves the interpretation of Ark. Code Ann. \u00a7 23-42-106(c) (1987), formerly Ark. Stat. Ann. \u00a7 67-1256(b) (Repl. 1980), which subjects an agent who materially aids in the sale of unregistered, nonexempted securities to civil liability. Jurisdiction is pursuant to Ark. Sup. Ct. R. 29(l)(c).\nOn March 6, 1984, the appellees, Charles Woody, Charles Edward Woody, Larry Joe Woody, Ricky Don Woody, William F. Woody, Eddie Jones, and Lucille Shelton filed suit against Quick Oil Company; Trans world Petroleum, Inc., a subsidiary of Quick Oil Company; J. Gary Nolan Quick II, owner and operator of both companies; and Hazel G. Quick, Gary Quick\u2019s mother and the sole appellant in this appeal, seeking rescission of the sale and purchase of securities representing various interests in three oil and gas wells, recovery of their invested monies, interest, costs, and reasonable attorneys\u2019 fees on the basis that the securities sold were not registered in Arkansas as required by the Arkansas Securities Act, Ark. Code Ann. \u00a7\u00a7 23-42-101\u201423-42-508 (1987), formerly Ark. Stat. Ann. \u00a7\u00a7 67-1235\u201467-1264.14 (Repl. 1980). A consent judgment was entered against all defendants except Hazel Quick for $33,810.00, plus interest, costs, and attorneys\u2019 fees.\nSubsequently, the appellees proceeded to trial against the remaining defendant, Hazel Quick. The trial court held that she, acting as an agent of the defendants, materially aided in the sale of unregistered securities to the appellees. The trial court found for the plaintiff-appellees and awarded $14, 490.00 collectively to Charles Edward Woody, Larry Joe Woody, Ricky Don Woody, and William F. Woody; $4,830.00 to Charles Woody; $4,830.00 to Eddie Jones; and $4,830.00 to Lucille Shelton; plus interest, but denied their request for costs and attorneys\u2019 fees. In addition, it denied Charles Woody relief with respect to securities he purchased on December 20,1980. Hazel Quick filed a motion for a new trial, which was denied. She now appeals. We agree with the trial court\u2019s holding and affirm.\nOn cross-appeal the appellees challenge the portions of the trial court\u2019s judgment that (a) deny Charles Woody relief with respect to securities purchased on December 20, 1980, and (b) deny the appellees\u2019 request for costs and attorneys\u2019 fees. We also affirm the trial court on the cross-appeal.\nThe material facts in this case are as follows: In June of 1980, Gary Quick, an Oklahoma resident, Quick Oil Co., and Trans-world Petroleum, Inc. began offering for sale fractional undivided working interests in an oil and gas well project in Navarro County, Texas. The appellees, Arkansas residents and eventual investors in the project, initially obtained information about the investment opportunity either at an August 1980 promotional meeting in Little Rock at which Hazel Quick, also an Arkansas resident, participated or by virtue of her direct or indirect dissemination of information about the project. At trial both Hazel and Gary Quick disputed the fact that the meeting took place in August contending it was held in November, after the purchase of securities by the appellees, to answer questions concerning the venture. The record does reflect that the appellees sent their checks to Quick Oil in August 1980 and that they have not received any return on their investments.\nKaren Woody, wife of appellee Larry Joe Woody, testified that the promotional meeting was held at Jan and Charles Edward Woody\u2019s house in August of 1980 to discuss the oil and gas venture with potential investors. According to Karen Woody, all of the named plaintiffs-appellees were present at the meeting. (Eddie Jones later testified that he was not present.) She also stated that during Gary Quick\u2019s presentation, Hazel Quick interrupted him numerous times with comments about what to expect in investing and also made the statement that \u201cif we [the appellees] knew of anyone that was interested, that they [Hazel and Gary] were still looking for investors and to be sure and let them know.\u201d Additionally, Karen Woody asserted that Hazel Quick handed out business cards to the appellees while, at the same time, stating that if they came across anyone interested in investing, let her know. A business card that stated \u201cTransDelta Gas and Oil Company, Inc. [Hazel Quick\u2019s son-in-law\u2019s company], Hazel Quick Arkansas Regional Manager,\u201d was later admitted at trial to impeach Hazel Quick\u2019s testimony that she had no knowledge of oil and gas affairs. Karen Woody and Larry Joe Woody, her husband, sent a check to Quick Oil on August 26, 1980.\nLucille Shelton, Hazel Quick\u2019s cousin and Jan Woody\u2019s mother, testified at trial that Hazel Quick met with her at Shelton\u2019s office concerning the oil and gas investment, encouraged her to invest, and sent or gave her a prospectus explaining the investment, which had a written notation on its face, \u201cRemit to Hazel Quick.\u201d Shelton also attended the meeting held at her daughter\u2019s house, and sent her check to Quick Oil on August 26,1980. Shelton further testified that it was Hazel who must have instigated communications about the meeting. However, Hazel Quick denied that she arranged the meeting.\nEddie Jones testified that while he and his wife were attending a church reunion in August 1980, Hazel Quick talked to him concerning the investment and accepted his check, upon which she filled in Quick Oil as payee. Quick Oil later received this check. He also stated that Hazel Quick was the only person he talked to directly about the investment and that she indicated to him that she was handling Gary Quick\u2019s interest in Arkansas. Lav\u00e9rne Jones, Eddie Jones\u2019 wife and Hazel Quick\u2019s cousin, testified that Hazel Quick convinced her husband to invest.\nCharles Woody testified that he made his initial purchase of securities after attending the meeting and that he did not talk to Gary Quick before making his investment. However, he did communicate with Gary Quick in December of 1980, after which he purchased additional securities.\nGary Quick testified that he sold the appellees securities through telephone communications before the meeting. However, both Charles Woody and Eddie Jones asserted that they had no telephone communications with Gary prior to investing in August of 1980.\nHazel Quick contends that the trial court erred in finding that she participated as an agent of the seller and materially aided in the sale of the securities. We disagree.\nThis matter was tried before the court without benefit of a jury. In such cases, the findings of the trial court shall not be set aside unless clearly against the preponderance of the evidence. Burdette v. Madison, 290 Ark. 315, 719 S.W.2d 418 (1986). Furthermore, we give due regard to the trial court\u2019s superior ability to determine the credibility of the witnesses and the weight to be given their testimony. Id.\nArk. Code Ann. \u00a7 23-42-106(c) (1987) provides in pertinent part as follows:\n[E]very broker-dealer or agent who materially aids in the sale [of an unregistered, nonexempted security] are [sic] liable jointly and severally with, and to the same extent as the seller or purchaser [This liability is for the consideration that the purchaser paid for the security, together with interest at six percent (6%) per year from the date of payment, costs, and reasonable attorneys\u2019 fees, less the amount of any income received on the security, upon the tender of the security and any income received on it, or for damages if he no longer owns the security. Ark. Code Ann. \u00a7 23-42-106(a)(1).], unless the nonseller or nonpurchaser who is so liable sustains the burden of proof that he did not know, and in the exercise of reasonable care could not have known, of the existence of the facts by reason of which the liability is alleged to exist. There is contribution as in cases of contract among the several persons so liable.\nArk. Code Ann. \u00a7 23-42-102(2) (Supp. 1987), formerly Ark. Stat. Ann. \u00a7 67-1247(b) (Repl. 1980), defines \u201cagent\u201d as \u201cany individual, other than a broker-dealer, who represents a broker-dealer or issuer in effecting or attempting to effect the purchases or sales of securities.\u201d Ark. Code Ann. \u00a7 23-42-102(8)(D) (Supp. 1987), formerly Ark. Stat. Ann. \u00a7 67-1247(g) (Repl. 1980), states that \u201c[w]ith respect to fractional undivided interests in oil, gas, or other mineral rights, the term \u2018issuer\u2019 means the owner of the right or of any whole or fractional interest in the right who creates fractional interests therein for the purpose of the offering.\u201d\nThere are no Arkansas cases interpreting the term \u201cagent\u201d under \u00a7\u00a7 23-42-102(2) and 23-42-106(c). We must, therefore, examine Hazel Quick\u2019s conduct in light of a plain reading of the language of the statutes. There is evidence in the record that Hazel Quick aided in arranging a meeting of potential investors. As previously noted in Karen Woody\u2019s testimony, Hazel Quick actively participated in the meeting by interrupting Gary with comments about what to expect in investing, handing out business cards to the appellees, and stating to them that if they knew of anyone interested in investing, to let them [Hazel and Gary] know. (Hazel Quick later denied that she had any knowledge of securities.)\nHazel Quick also promoted the sale of her son\u2019s securities in her direct dealings with Eddie Jones. After talking with Mr. Jones about the investment opportunity at a church reunion, Hazel Quick accepted a check that he wrote for his interest in the project, filled in Quick Oil as payee, and forwarded the check to Quick Oil. As noted above, Mr. Jones also testified that Hazel Quick indicated to him that she was handling Gary Quick\u2019s interest in Arkansas.\nOn the basis of the foregoing facts, we conclude that Hazel Quick represented an issuer (Gary Quick, Quick Oil Co., or Transworld Petroleum, Inc.) in effecting or attempting to effect purchases or sales of securities to the appellees and therefore is an agent under the Arkansas Securities Act. Although Gary Quick testified he neither employed nor asked her to solicit purchasers, it is apparent that he was aware of her promotional activities and did not attempt to curtail them. Furthermore, he acquiesced in or ratified her conduct by accepting the check from Eddie Jones.\nHaving found that Hazel Quick was an agent, we must determine if she materially aided in the sale of unregistered securities for liability to attach. The language of \u00a7 23-42-106(c), \u201cmaterially aids in the sale of securities,\u201d is not defined in the Arkansas Securities Act. However, in Titan Oil and Gas v. Shipley, 257 Ark. 278, 517 S.W.2d 210 (1974), we did interpret this language, which was then found in Ark. Stat. Ann. \u00a7 67-1256(b) (Repl. 1966). Although neither the appellant nor the appellee cited this case, its treatment of the statutory language is essential to our present analysis.\nIn Titan Oil, a representative of a company offering securities in an oil and gas project gave two investors a prospectus concerning the project and invited them to a meeting in which individuals other than the representative spoke and presented investment material. We held that the trial court\u2019s finding that the representative did not materially aid in the sale of securities was not clearly against the preponderance of the evidence.\nIn examining Hazel Quick\u2019s participation in the sale of securities to the appellees in light of Titan Oil, we quickly find that her activities fully support the trial court\u2019s finding that she materially aided in the sale of her son\u2019s securities. Hazel Quick convinced Eddie Jones to invest in the venture at a church reunion, accepted his check, upon which she filled in Quick Oil as payee, and forwarded it to Quick Oil. Hazel Quick met with Lucille Shelton at Shelton\u2019s office to discuss the investment, encouraged her to invest, and sent or gave her a prospectus explaining the investment, which had a written notation on its face, \u201cRemit to Hazel Quick.\u201d According to Karen Woody, appellees Lucille Shelton, Charles Woody, Larry Joe Woody, Charles Edward Woody, Ricky Don Woody, and William F. Woody all attended the investment meeting, arranged at least in part by Hazel Quick, at which Hazel Quick actively participated by telling the investors what to expect in investing, handing out business cards to them, and stating that if they knew of anyone interested in investing, to let them [Hazel and Gary] know. Based upon these facts, we cannot say that the trial court\u2019s finding was clearly against the preponderance of the evidence. She is liable to the appellees for a refund of their investments plus interest.\nIn affirming the trial court, we should note that \u00a7 23-42-106(c) allows an agent who has materially aided in the sale of unregistered, nonexempted securities to avoid liability if he proves that \u201che did not know, and in the exercise of reasonable care could not have known, of the existence of the facts by reason of which the liability is alleged to exist.\u201d In the instant case, Hazel Quick did not specifically contend either below or on appeal that she did not know, and in the exercise of reasonable care could not have known, that the securities were unregistered and nonexempted. Accordingly, we do not address this issue. See Boatman v. Dawkins, 294 Ark. 421, 743 S.W.2d 800 (1988).\nOn cross-appeal, the appellees contend that the trial court erred in failing to award Charles Woody relief for the additional securities he purchased December 20,1980, through contact with Gary Quick. We disagree.\nGranted, it is doubtful that Charles Woody would have known of this investment opportunity absent Hazel Quick\u2019s initial dissemination of information and encouragement to invest. However, there is no indication that Hazel Quick encouraged or solicited this second investment, nor was it purchased as a result of her influence. For this reason, he is not entitled to relief.\nAppellees also cross-appeal the trial court\u2019s refusal to award them attorneys\u2019 fees and costs. As noted above, Ark. Code Ann. \u00a7 23-42-106(a)(1) provides that any person who offers or sells unregistered, nonexempted securities is liable to the purchaser for costs and reasonable attorneys\u2019 fees in addition to the consideration paid for the securities and interest. The appellees included a prayer for costs and attorneys\u2019 fees in their complaint, but did not put on evidence at trial to establish the amount of such fees. The trial court denied their request on the ground that the appellees failed to sufficiently establish the fees and costs. Based upon the trial court\u2019s finding, we conclude that it did not abuse its discretion in this matter. It was the appellees\u2019 obligation to put on testimony as to costs and reasonable attorneys\u2019 fees.\nAffirmed on appeal and cross-appeal.", "type": "majority", "author": "Jack Holt, Jr., Chief Justice." } ], "attorneys": [ "Barron & Coleman, P.A., by: Keith I. Billingsley, for appellant.", "Mitchell, Williams, Selig & Tucker, by: John C. Lessell, for appellees." ], "corrections": "", "head_matter": "Hazel G. QUICK v. Charles WOODY, et al.\n88-39\n747 S.W.2d 108\nSupreme Court of Arkansas\nOpinion delivered April 4, 1988\nBarron & Coleman, P.A., by: Keith I. Billingsley, for appellant.\nMitchell, Williams, Selig & Tucker, by: John C. Lessell, for appellees." }, "file_name": "0168-01", "first_page_order": 192, "last_page_order": 200 }