A dispute between Little Rock homebuilder Tracie Kelley and her former clients over a million-dollar home is now heading to arbitration as a result of her recent legal victory at the Arkansas Court of Appeals.
The three-judge panel said in an opinion delivered on Oct. 22 that Circuit Court Judge Morgan “Chip” Welch erred by denying Kelley and her KellCo Custom Homes Inc.’s motion to dismiss for arbitration.
If you recall, Daniel and Ellen Williams said in a lawsuit that they hired Kelley and KellCo Custom Homes to build a million-dollar home in 2021. They said they spent $1.6 million on the Little Rock home before it was finished.
Kelley promised to cancel the contract and refund the couple’s money, but returned only $310,000, the lawsuit said. Then, the complaint said, Kelley herself moved into the house.
KellCo Custom Homes asked to dismiss the lawsuit because the company and the Williamses had agreed to go to arbitration to settle disagreements. But in early 2023, Welch denied the request.
KellCo appealed that decision, resulting in the first appeal to the Arkansas Court of Appeals. The appellate court sent the case back to Welch for further processing.
During the appeal process, the Williameses amended their complaint to add Kelley as a defendant.
But after further processing, Welch once again ruled against KellCo and Kelley, saying the lawsuit shouldn’t be dismissed.
KellCo and Kelley appealed that second decision. The appellate court then found that the custom homebuilding agreement the Williameses signed contained an arbitration clause for any “disputes related to the performance of this subcontract,” according to the Court of Appeals opinion by Judge Ray Abramson. Judges Bart Virden and Casey Tucker also agreed with the decision to reverse and remand the case.
“We appealed the judge twice, and we won both times,” Kelley’s attorney, Charles Darwin “Skip” Davidson of Little Rock, told Whispers. “And so now the case will go where it should have been in the first place, which is arbitration.”
As a result of the case being sent to arbitration, the motion for sanctions that was filed by the Williamses’ attorney against KellCo and Kelley won’t be heard.
In the motion, Kayla Applegate of Maumelle, one of the Williameses’ attorneys, asked that Kelley and KellCo’s answer be dismissed and the Williameses be awarded a default judgment against Kelley for $1.3 million.
Davidson had asked that the motion for sanctions against his clients be dismissed.
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