Ashley and Jonathan Kirk Cupp v. Amy and Chad Register and Gretchen and Phillip Greer
CourtCourt of Appeals of Arkansas
Date FiledSeptember 9, 2026
StatusPublished
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Full Opinion
Cite as 2026 Ark. App. 394
ARKANSAS COURT OF APPEALS
DIVISION III
No. CV-24-498
ASHLEY AND JONATHAN KIRK CUPP Opinion Delivered September 9, 2026
APPELLANTS
APPEAL FROM THE GREENE
COUNTY CIRCUIT COURT
V. [NO. 28CV-22-106]
AMY AND CHAD REGISTER AND HONORABLE MELISSA BRISTOW
GRETCHEN AND PHILLIP GREER RICHARDSON, JUDGE
APPELLEES
AFFIRMED
WENDY SCHOLTENS WOOD, Judge
This case arises from a business-relationship breakup in connection with a venture
in recreational trampoline parks. Appellants, Jonathan “Kirk” Cupp and his now-ex-wife,
Ashley Cupp, sued appellees, Phillip Greer and Chad Register and their respective spouses,
Gretchen Greer and Amy Register. The Cupps sought declaratory relief and damages for
breach of contract, breach of fiduciary duties, fraud, and other tortious conduct in
connection with Kirk Cupp’s buyout and the business’s subsequent bankruptcy. The
Greers and the Registers counterclaimed and sought contribution for amounts they paid to
extinguish guaranty liability relating to the business. After a four-day bench trial, the
Greene County Circuit Court dismissed and denied the Cupps’ claims, awarded the
Greers and the Registers contribution without setoff, and later granted the Greers’ and the
Registers’ motion for attorney’s fees. The Cupps appeal the orders of the circuit court
awarding the Greers and the Registers contribution and attorney’s fees. We affirm.
I. Relevant Facts
In 2017, Kirk Cupp, Phillip Greer, and Chad Register formed a trampoline-park
business, Church Bells, LLC, and each had a one-third equity-ownership interest in the
company. Church Bells wholly owned four subsidiaries that in turn owned and operated
trampoline parks in four different states. The Church Bells subsidiaries leased commercial
properties for trampoline parks located in Kentucky, Ohio, South Carolina, and
Pennsylvania. Cupp, Greer, and Register personally guaranteed all four commercial leases,
and their spouses guaranteed two of the leases. Additionally, Cupp, Greer, and Register
each personally guaranteed a $3 million commercial loan from First National Bank of
Paragould (“FNB”) to Church Bells.
To get the trampoline parks up and running, construction and repair work had to
be completed on the commercial rental properties. In late 2018, Mulhearn Wilson
Constructors, Inc., filed a lawsuit against Cupp and one of the Church Bells subsidiaries
relating to a construction project at the trampoline-park facility located in South Carolina.
That litigation went on until 2020, when the action was ultimately dismissed.
By early 2020, Cupp had communicated to Greer and Register that he wanted out
of Church Bells, and the three business partners had begun negotiating Cupp’s separation
from the company. Around the same time, the Church Bells trampoline parks were
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significantly affected by the COVID-19 pandemic, including government-mandated
closures of some of the parks in April and May 2020.
On April 8, 2020, Cupp, Greer, and Register executed an “Equity Purchase and
Sale Agreement” (the “EPA”). Cupp agreed “to sell, transfer, assign, deliver and convey” to
Greer and Register the one-third equity interest “and all other rights and incidents of
ownership in the Company” held by Cupp. As consideration, Greer and Register agreed to
pay Cupp a total amount of $590,000, payable in monthly payments of $20,000, beginning
May 1, 2020, for one year, followed by annual payments of $70,000, beginning May 1,
2021, for the next five years.
In the EPA, Section 2.5, Remedy Upon Default, the parties agreed that Cupp’s
“sole remedy” upon payment default was “the exercise of a right to demand that the Buyers
assign back to him the Equity Interest previously transferred pursuant to this Agreement.”
Cupp agreed and understood “that under no circumstances will he be entitled to a money
judgment against Chad Register and Phillip Greer, even upon default.” His “sole remedy
upon default is the return to him of the ownership of the Equity Interest.”
In Section 3.2, Disclosure, Cupp affirmed that he was provided with or permitted
access to all information that he deemed material to formulating his decision with respect
to the sale of his equity interest. The agreement notes that “[a]s a member of the Company,
Kirk Cupp is very familiar with the business operations and financial status of the
Company.”
3
Section 3.3(a), Cooperation with Litigation, states that Cupp “understands and
recognizes that, at the time this Agreement is executed, the Company, and other limited
liability companies or corporations associated with or owned by the Company, are parties,
or potential parties, in multiple lawsuits involving Mulhearn Wilson Constructors, Inc.,
and potentially other adverse parties . . . . [the “Litigation”].” Cupp “agrees to cooperate
with and participate in the Litigation[.]” Section 3.3(b) provides: “Upon the conclusion of
the Litigation, either by settlement or by judgment entered by a court of competent
jurisdiction and exhaustion of any associated appeal rights, the Buyers shall make good-
faith efforts with the Company’s lenders to cancel or void any guaranty agreements
executed by Kirk Cupp.”
Section 3.6, Voluntary agreement; attorneys, confirms that Cupp entered into the
EPA “of his own free will and choice” and “has consulted with an attorney and has
received legal advice concerning this Agreement, or has made a knowing and voluntary
decision to proceed without the advice of an attorney.” Additionally, Cupp understood
and agreed “that Branch Thompson Warmath & Dale, LLC, represents the Buyers with
respect to this Agreement, [and] does not represent Kirk Cupp.”
Cupp received payments under the buyout agreement through July 2020. As of
August 1, 2020, Greer and Register stopped making payments to Cupp. Cupp did not
exercise his right under the EPA to demand the return of the previously transferred equity
interest in the company.
4
By August 2020, the Church Bells trampoline parks were permanently shut down.
Without revenue, the Church Bells subsidiaries were unable to pay the rent for the
trampoline-park facilities. Both the Church Bells entities and the parties, as personal
guarantors, were threatened with lawsuits for back rent. On August 14, 2020, Church Bells
filed a petition for Chapter 7 bankruptcy.
On October 8, 2020, a commercial landlord filed a lawsuit against the Church Bells
subsidiary operating in Pennsylvania and the parties, as personal guarantors on the lease,
seeking damages for breach of the lease and breach of the related guaranty. A default
judgment in the amount of $292,885.33 was entered against the Cupps in that action on
December 28, 2020.
On February 18, 2021, the parties executed an agreement (the “Authorization”)
authorizing Chad Register, “on their individual and collective behalf, to sign individual
settlement agreements” with the landlords for the facilities in South Carolina, Ohio,
Kentucky, and Pennsylvania. In the Authorization, the parties acknowledged that they had
executed various guaranties securing payment of leases associated with the four Church
Bells subsidiaries for rental units located in those four states. The parties further
acknowledged that, as of the date of their agreement, “no firm agreement has been reached
with the Pennsylvania landlord.” The Authorization sets out the details of the settlements
that had been reached with the landlords in Ohio, South Carolina, and Kentucky.
Regarding the settlement that had not yet been reached with the Pennsylvania landlord,
the Authorization states: “Currently, the settlement amount is expected to be [between]
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approximately $180,000.00 and $210,000.00. When and if settlement is reached, if
signatures of all Guarantors are needed, Chad Register shall have authority to sign for the
Guarantors.”
Additionally, the Authorization includes the following “Liability of Payment and
Ownership Interests” provision:
The parties hereto, the Guarantors, agree that the amounts to be paid under
the various leases will be paid by Chad Register (“Register”) and/or Phillip
Greer (“Greer”), and that the payments will satisfy the guarantees of all
Guarantors. The parties agree that such payments are not an admission by
Register and Greer, or their above-named spouses, that such payments are
solely theirs to bear, and they hereby reserve any right to recoup a portion of
the payments from Jonathan “Kirk” Cupp (“Cupp”), and his above-named
spouse; and they do not waive any defenses as to the Cupps’ claim that they
be indemnified against such payments. Likewise, the Cupps reserve their
argument of indemnification against the above detailed payments, and do
not waive their defenses as to any argument of Registers’ and Greers’ for
reimbursement.
The Greers and the Registers paid the landlords in Ohio, South Carolina, and
Kentucky in accordance with the settlements. And Greer and Register paid the FNB loan
in full. The Cupps did not pay anything to either the landlords or FNB. The payments
made by the Greers and the Registers satisfied and resolved all personal guaranties that the
Cupps signed with the landlords and FNB.
On March 18, 2021, the Greers and the Registers executed a judgment-sale
agreement with the Pennsylvania landlord to purchase the default judgment against the
Cupps for a sum of $210,000. In exchange, the Pennsylvania landlord agreed to “cease
efforts to, and not attempt to recover the Default Judgment or otherwise pursue claims
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against Defendants or Cupp under the Lease or the Guaranty[.]” Greer and Register each
paid $105,000 to the landlord pursuant to the agreement.
The Greers and the Registers subsequently filed a petition to register the foreign
judgment in Arkansas. The Cupps thereafter filed an objection and noted their intention
to file a separate action relating to (1) a claim for setoff of the unpaid balance of $530,000
resulting from Greer’s and Register’s breach of the EPA; (2) Greer’s and Register’s failure
to make good-faith efforts with Church Bells’ lenders to cancel or void any guaranty
agreements executed by Cupp; (3) Register’s breach of fiduciary duties created under the
Authorization; and (4) Greer’s and Register’s actions in the Church Bells bankruptcy.
On April 15, 2022, the Cupps filed a six-count complaint against the Greers and
the Registers. Count I asserted claims for breach of contract and sought damages and
attorney’s fees. Count I alleged that Greer’s and Register’s purchase of the default
judgment was in breach of the Authorization and that Greer and Register breached the
EPA by failing to make payments due under the agreement and by failing to use good-faith
efforts to release Cupp from personal guaranties signed on behalf of Church Bells and the
subsidiaries.
Count II alleged that Greer and Register breached fiduciary duties created under
the Authorization when they purchased the Pennsylvania default judgment and then
initiated the foreign-judgment action. Count III asserted a deceptive-trade-practices claim,
alleging that Greer and Register knowingly took advantage of the Cupps or engaged in
other unconscionable, false, or deceptive conduct in business by (1) signing the EPA, (2)
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filing the Church Bells bankruptcy, and (3) inducing and procuring the Authorization to
induce the Cupps to believe the Pennsylvania judgment would be resolved for their
benefit. Count IV asserted fraud, alleging that the Greers and the Registers induced the
Cupps to reasonably rely on the express provisions of the Authorization and on
representations made in connection with the Authorization, including statements made
under oath before the bankruptcy court, only to take actions in frustration of the
Authorization’s purpose.
Count V sought declaratory relief, alleging that (1) Greer’s and Register’s actions
demonstrated lack of good-faith efforts to remove the Cupps from the guaranty liability in
violation of the EPA; (2) filing the Church Bells bankruptcy and then breaching the
Authorization by purchasing the default judgment and initiating the foreign-judgment
action reflects bad faith on the part of Greer and Register; and (3) the bankruptcy filing
further tied up and wasted funds of Church Bells and the subsidiaries. Count V sought a
judicial declaration that the Cupps owe nothing to the Greers and the Registers, by way of
contribution or otherwise, related to the guaranty liability because of “the foregoing
examples of bad faith, breach of contract, breach of fiduciary duty, deceptive trade
practices, fraud, and failure to take reasonable good faith efforts to release [the Cupps]
from the Guarantee Liability.” Count V, in the alternative, requested a judicial declaration
that the Cupps are liable only for the amount of contribution minus a setoff sum for (1)
damages for breach of the EPA ($530,000), (2) further “unnecessary expenses” relating to
the Church Bells bankruptcy ($44,000) and the foreign-judgment action ($10,000), and (3)
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Church Bells funds that were imposed with administration fees in the bankruptcy
($82,000).
Count VI sought an injunction prohibiting the Greers and the Registers from
pursuing the foreign-judgment action against the Cupps.1
In an amended complaint filed June 2, 2023, the Cupps asserted three additional
causes of action. Count VII alleged that the “acts, conduct, misrepresentations, and
omissions” of Greer, Register, and business consultant Joshua Clark in negotiating the
EPA constitute violations of the fraud provision of the Arkansas Securities Act. Count VIII
alleged that Greer and Register breached fiduciary duties owed to Cupp by failing to
disclose conflicts of interest and significant and material facts concerning Church Bells and
by taking actions to injure Cupp in connection with the hiring of business consultant
Joshua Clark. Count IX asserted a civil-conspiracy claim alleging that Greer, Register, and
Clark knowingly conspired to defraud and dispossess Cupp of his interest in Church Bells
without the benefit of full disclosure, intentionally interfering with his ability to fairly
negotiate the sale of his interest in the company.
In a second amended complaint filed January 5, 2024, the Cupps asserted a tenth
cause of action. Count X, asserting malicious prosecution, sought punitive damages and
1
The Greers and the Registers ultimately voluntarily dismissed the petition to
register a foreign judgment, and the Pennsylvania default judgment was never registered in
Arkansas.
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alleged that the Greers’ and the Registers’ actions in filing the foreign-judgment petition
were “willful, malicious, not well-founded under applicable law, and reckless.”
The Greers and the Registers counterclaimed for an award of contribution against
the Cupps in a total amount of $725,103.08, which represented the Cupps’ proportionate
share of the guaranty liability paid by the Greers and the Registers to the landlords and
FNB.
The circuit court conducted a four-day bench trial from January 29 to February 1,
2024. At the conclusion of the Cupps’ case-in-chief, the Greers and the Registers moved
for a directed verdict. The circuit court acknowledged, and counsel for the Cupps agreed,
that the evidence presented in the Cupps’ case-in-chief addressed “everything,” including
their affirmative claims, their requests for declaratory relief, and their counterclaim
defenses. The circuit court said that it would wait until all evidence had been presented to
consider the claims for declaratory relief and counterclaim relating to contribution. The
circuit court then heard the Greers’ and the Registers’ motion for directed verdict as to the
Cupps’ affirmative claims for breach of fiduciary duties, fraud, malicious prosecution,
breach of contract, violation of the Arkansas Securities Act, and civil conspiracy. The
circuit court granted the motion in part and dismissed all but one of the affirmative claims
under Arkansas Rule of Civil Procedure 50(a).2 The circuit court denied the motion as to
2
The Cupps’ claim for injunctive relief relating to the foreign judgment was resolved
before trial after the Greers and the Registers dismissed the foreign-judgment petition. The
Cupps’ deceptive-trade-practices claim also was resolved before trial on summary judgment.
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the claim for breach of the EPA because it was “intricately tied” to the remaining issues
concerning contribution.
At the conclusion of all proof at trial, the circuit court denied the Greers’ and the
Registers’ renewed motion for directed verdict, and the parties’ counsel made closing
arguments. Counsel for the Cupps argued, in relevant part, as follows:
And finally, I’ll just note that contribution ultimately is an equitable remedy,
and while I appreciate and understand the Court’s ruling yesterday with
regard to the [Cupps’] affirmative causes of action, irrespective of those issues
I would note for the Court that the [Cupps] believe that there was ample
evidence of actions that were taken by the [Greers and the Registers] that
were themselves if not bad faith, at least inequitable, and that unclean hands
and those issues ought to be weighed as to any contribution award that this
court should make. Although we believe there is none because the agreement
modified that and changed the relationship by and between the parties.
In response, counsel for the Greers and the Registers argued that “given the Court’s
directed verdicts yesterday there’s no conduct of the parties that was inequitable that would
be considered for any contribution claim.”
The circuit court thereafter issued its rulings on the three remaining issues: breach
of the EPA, contribution, and setoff. The circuit court found that Greer and Register did
not violate the EPA. Specifically, the circuit court found that Greer and Register did not
violate Section 2.5 when they failed to make payments to Cupp or when they filed
bankruptcy for Church Bells. The circuit court found, as to Section 3.3(b), that Greer and
Register made the requisite good-faith efforts when Register asked FNB to cancel Cupp’s
personal guaranty. Further, the guaranties that the Cupps signed with FNB and the
landlords were resolved by the payments of the Greers and the Registers. The circuit court
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also rejected the Cupps’ contention, based on Section 3.3(b), that Greer and Register
waived their rights to contribution. The circuit court found that the same was true with
respect to the Authorization agreement, in which all parties expressly preserved and
acknowledged their continued rights against one another. The circuit court concluded that
the Greers and the Registers paid more than their pro rata share of the guaranteed liability
and were thus entitled to the full amount of contribution claimed against the Cupps. 3 On
February 23, 2024, the circuit court entered a judgment incorporating its bench rulings. 4
On March 5, 2024, the Greers and the Registers filed a motion for attorney’s fees
under Arkansas Code Annotated section 16-22-308 (Repl. 1999). The circuit court granted
the motion and entered an order and judgment on May 14, 2024, awarding fees as
requested in the amount of $220,167. The circuit court set out the following findings on
attorney’s fees in a letter order filed May 6, 2024:
This motion is granted, as an award of attorney fees to the prevailing party in
a breach of contract suit is appropriate under applicable law and as
specifically provided for by A.C.A. 16-22-308.
There is no dispute that [the Greers and the Registers] are the prevailing
party in this action. Therefore, the next question is whether this lawsuit is
based primarily in contract. See Jiles v. Union Planters Bank, 90 Ark. App. 245,
205 S.W.3d 187 (2005).
3
The circuit court noted that there was no disagreement as to the amounts that the
Greers and the Registers paid to extinguish the guaranty liability.
4
The circuit court noted that the Greers and the Registers had requested an award
of prejudgment interest as part of the judgment and that it would defer consideration and
allow the parties time to submit briefs on the issue. On May 14, 2024, the circuit court
entered an order and judgment awarding prejudgment interest. The Cupps do not appeal
that award.
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In the Complaint filed April 15, 2022, [the Cupps] sought declaratory relief
that they had no liability to [the Greers and the Registers] by way of
contribution or, alternatively, to fix and determine the amount of [the
Cupps’] guaranty liability to [the Greers and the Registers]. (Complaint at 1).
The Complaint then explains “the basis for [the Cupps’] request” for
declaratory judgment, alleging (a) [Greer’s and Register’s] breach of the
Equity Purchase Agreement (EPA); (b) [the Greers’ and the Registers’] breach
of the Authorization; (c) [Greer’s and Register’s] “false or misleading
testimony” in the bankruptcy case related to the alleged breach of the
Authorization; and (d) [Greer’s and Register’s] breach of fiduciary duty
related to the Authorization. Id. Additional counts in the Complaint include
(1) Breach of Contract (alleging breach of the EPA and the Authorization);
(2) Breach of Fiduciary Duty (as related to the Authorization); (3) Deceptive
Trade Practices (related in part to the EPA and the Authorization); and (4)
Fraud (related to alleged representations associated with the Authorization).
In June, 2023, [the Cupps] filed an Amended Complaint adding Josh Clark
and his company as parties. In January, 2024, [the Cupps] filed a Second
Amended Complaint adding a cause of action for malicious prosecution. [The
Greers and the Registers] counterclaimed for contribution.
Here, the evidence at trial established that the alleged breaches of the EPA
and Authorization were the bulk of [the Cupps’] action, despite the other
pleaded claims. Indeed, the conduct, actions, or inactions of the parties
related to these agreements dominated the evidence at trial. Additionally,
while [the Greers’ and the Registers’] counterclaim for contribution is not
based in contract, all of the controversy surrounding the right of
contribution stemmed from [the Cupps’] claims incident to the contracts.
Accordingly, the Court finds that the [Cupps’] lawsuit was based primarily in
contract.
The Cupps now appeal, arguing three points for reversal: (1) the circuit court
misapplied the principles of equity in finding that the Greers and the Registers are entitled
to contribution from the Cupps; (2) the circuit court misapplied the principles of equity in
finding that the Cupps are not entitled to a setoff; and (3) the attorney’s-fee award must be
13
reversed. We affirm both the award of contribution without setoff and the award of
attorney’s fees.
II. Standards of Review
The standard of review on appeal from a bench trial is whether the circuit court’s
findings were clearly erroneous or clearly against the preponderance of the evidence. City of
Rockport v. City of Malvern, 2010 Ark. 449, at 6, 374 S.W.3d 660, 663. A finding is clearly
erroneous when, although there is evidence to support it, the reviewing court on the entire
evidence is left with a firm conviction that an mistake has been made. Id., 374 S.W.3d at
663. Facts in dispute and determinations of credibility are solely within the province of the
fact-finder. Id., 374 S.W.3d at 663.
Issues of statutory construction are reviewed de novo. Id., 374 S.W.3d at 663. We
are not bound by the circuit court’s interpretation of law, but “in the absence of a showing
that the circuit court erred in its interpretation of law, that interpretation will be accepted
as correct on appeal.” Id., 374 S.W.3d at 663.
The decisions to award attorney’s fees and the award amount are discretionary and
will be reversed only if the appellant can demonstrate an abuse of discretion. Perry v. Baptist
Health, 368 Ark. 114, 116, 243 S.W.3d 310, 313 (2006). Our supreme court has
recognized “the superior perspective of the trial judge in determining whether to award
attorneys’ fees.” Id., 243 S.W.3d at 312. Where the issue is one of law, however, our review
is de novo. Vowell v. Waldrip Lands, LLC, 2025 Ark. App. 523, at 6, 722 S.W.3d 801, 810.
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Appellate courts give no deference to circuit courts on matters of law. Freeman v. Rushton,
360 Ark. 445, 449, 202 S.W.3d 485, 487 (2005).
III. Discussion
A. Contribution
For their first point on appeal, the Cupps argue that the circuit court misapplied the
principles of equity in finding that the Greers and the Registers are entitled to
contribution from the Cupps. The right of contribution among co-guarantors is well
settled. Wroten v. Evans, 21 Ark. App. 134, 136–37, 729 S.W.2d 422, 424 (1987). In Hazel
v. Sharum, 182 Ark. 557, 32 S.W.2d 315 (1930), the supreme court held that an obligation
created by the obligors jointly liable on a promissory note, one of whom subsequently paid
the entire obligation, entitled the payor to contribution by the others on an implied
obligation. The court said:
Here the appellees, having paid the whole amount of the debt for which all
were jointly liable, were entitled to maintain an action for contribution
against the joint makers of the note, not on the note, but on the contract
which the law implies, an obligation worked out by courts of equity to do
exact justice between the parties.
Id. at 559, 32 S.W.2d at 316. Thus, the right of action for contribution accrues when one
surety pays more than his share of the common liability. Pennington v. Karcher, 171 Ark.
828, 286 S.W. 969, 970 (1926); see also Halford v. S. Cap. Corp., 279 Ark. 261, 263–64, 650
S.W.2d 580, 582 (1983) (holding that appellants were liable for their individual
proportionate share of the amount paid by the appellee to extinguish joint indebtedness on
15
note). These equitable principles are codified in Arkansas Code Annotated section 16-107-
304(a) (Repl. 2016), which provides:
When there are two (2) or more securities in the bond, bill, or note and any
of them shall pay in money or property more than his or her due proportion
of the original demand, the security may recover the excess in the same form
of action as provided in this subchapter for a security against the principal
debtor.
The Cupps do not dispute the circuit court’s findings that the parties executed
personal guaranties in connection with the commercial leases and bank loan, that the
Greers and the Registers paid the whole amount of debt relating to such guaranties to
extinguish the common liability, and that the Cupps paid nothing. Nevertheless, they
argue that the circuit court’s award of contribution for their pro rata share of the paid-off
debt should be reversed. They contend that the circuit court committed reversible error
because it considered only whether the Greers’ and the Registers’ conduct was in breach of
the terms of the parties’ agreements and failed to consider other “alleged inequitable
conduct.” We disagree.
Virtually all the claims asserted by the Cupps alleged, in some form or fashion, that
the Greers and the Registers engaged in “inequitable conduct,” had “unclean hands,” or
otherwise acted in “bad faith.” Indeed, the Cupps, in opposition to the request for
attorney’s fees, represented that their case “focused almost exclusively on [the Greers’ and
the Registers’] alleged inequitable and tortious conduct towards [the Cupps] as a basis to
reduce or eliminate any contribution awarded to [the Greers and the Registers].” And the
Cupps acknowledged at trial that their breach-of-contract claims and equitable claims and
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defenses relating to contribution were “intertwined” and not easily “pulled apart.” The
arguments and rulings below, including the dismissal of the Cupps’ claims at directed
verdict and concomitant findings of the circuit court—which are not challenged on appeal—
leave no doubt that the circuit court considered and found that there was insufficient
proof of bad faith or inequitable conduct by the Greers and the Registers to support any
defense to contribution. On this record, we cannot say that the circuit court clearly erred
in finding that the Greers and the Registers were entitled to contribution.
B. Setoff
Similarly, in their second point, the Cupps argue that the circuit court misapplied
the principles of equity in rejecting their claim of entitlement to a setoff against the
contribution award. Again, they contend that the circuit court focused on “the contract
defenses” and failed to make factual findings about “inequitable conduct and associated
possible setoff claims.” According to the Cupps, the circuit court “was required to address
the equitable considerations supporting a setoff of some obligations [Register] and [Greer]
owed [Cupp] against any contribution claim running the other way.” Their argument is not
persuasive.
The doctrine of setoff arises from mutual obligations or liabilities among parties. W.
Coal & Min. Co. v. Hollenback, 72 Ark. 44, 80 S.W. 145, 146 (1903); see also Collier v. Dyer,
27 Ark. 478, 478 (1872) ("[T]o authorize a set-off, the debts must be mutual and due to and
from the same parties."). In Arkansas, there is no right to a setoff when there is no
sufficient proof of a legal claim. Coats v. Milner, 134 Ark. 311, 314, 203 S.W. 701, 702
17
(1918). For example, “[j]udgments for the recovery of money may be set off against each
other, having due regard to the legal and equitable rights of all persons interested in both
judgments.” Ark. Code Ann. § 16-65-603(a) (Repl. 2025).
As with the primary issue of contribution, the Cupps’ claim for a setoff was based
on the same allegations as their affirmative claims that were dismissed at directed verdict
and their breach-of-contract claim that was resolved at the conclusion of the trial. The
parties even addressed the issue of setoff in their directed-verdict arguments. In any case,
the circuit court, upon consideration of all the evidence, found that there were no
obligations the Greers and the Registers owed the Cupps to set off from the contribution
award. The Greers and the Registers paid the common debt liability in full, and the Cupps
paid nothing. Further, the Cupps lost all their legal claims in the circuit court, and they do
not challenge those decisions by the circuit court on appeal. Among other things, the
circuit court found that Kirk Cupp was not entitled to any additional payments under the
EPA—a finding that is not challenged on appeal. In short, there simply was not a legal
claim, right, or cause of action to support a setoff. Accordingly, the circuit court properly
rejected the Cupps’ setoff claim.
C. Attorney’s Fees
For their third and final point, the Cupps argue that the circuit court abused its
discretion in awarding attorney’s fees under Arkansas Code Annotated section 16-22-308.
(Repl. 1999). They contend that the fee award should be reversed because the Greers and
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the Registers “prevailed below on an equitable claim that is not among those entitling a
party to an award of attorneys’ fees under Arkansas law.” Additionally, they argue that the
circuit court erred “in considering the claims brought by the [Greers and the Registers]
below, when the [Greers and the Registers] were not the prevailing party.” They further
contend that the fee award was improper because the action was for declaratory judgment.
Alternatively, they argue that if the fee award is upheld, this court should remand with an
instruction for the circuit court “to make findings about which fees were properly allocable
to a contract claim and which were not” and to limit recovery to those fees incurred in
connection with contract claims. Their arguments are unavailing.
It is well established that attorney’s fees are not allowed except when authorized by
statute. Chrisco v. Sun Indus., Inc., 304 Ark. 227, 229, 800 S.W.2d 717, 718 (1990).
Arkansas allows the prevailing party “[i]n any civil action to recover on . . . breach of
contract” reasonable attorney’s fees to be assessed by the court and collected as costs. Ark.
Code Ann. § 16-22-308.
Here, the Cupps sought declaratory relief and asserted breach-of-contract claims and
other noncontract claims. The fact that the complaint sought declaratory relief and
asserted noncontract claims along with breach-of-contract claims does not preclude an
award of attorney’s fees under section 16-22-308. In instances in which both contract and
noncontract claims are pursued, we have held that fees are proper under section 16-22-308
only when the action is based primarily in contract. See DWB, LLC v. D&T Pure Tr., 2018
Ark. App. 283, at 14, 550 S.W.3d 420, 430 (affirming fee award under section 16-22-308
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in mixed contract/tort case and noting that several of appellants’ requests for declaratory
relief were based in contract); see also Patton Hosp. Mgmt., LLC v. Bella Vista Vill.
Coopershares Owners Ass’n, Inc., 2016 Ark. App. 281, at 11, 493 S.W.3d 798, 805–06
(“[W]here multiple claims are advanced—including a breach-of-contract claim—an attorney’s
fee award is proper when the action is primarily based in contract.”). Further, contrary to
the Cupps’ argument, “a successful defendant in a contract action may be considered a
‘prevailing party’ for the purposes of Ark. Code Ann. § 16-22-308.” Perry v. Baptist Health,
368 Ark. 114, 117, 243 S.W.3d 310, 313 (2006) (emphasis added).
As set out above and in the circuit court’s rulings, the Cupps sued the Greers and
the Registers to recover damages. Their leading cause of action, set out in Count I of the
complaint, was breach of contract arising from two agreements between the parties: the
EPA and the Authorization. The Cupps asserted additional noncontract claims, which
stem from the EPA and/or Authorization. The claims for breach of fiduciary duty were
based on the Authorization and negotiations for the EPA. The civil-conspiracy claim
alleged intentional conduct in connection with the negotiation of the EPA. The deceptive-
trade-practices claim was based on the Authorization and the EPA. The fraud claims
related to the Authorization. The claim for violations of the Arkansas Securities Act was
based on the EPA and sought return of payments that were not made under that
agreement. The claim for malicious prosecution pertained to the petition to register the
foreign judgment, which the Cupps alleged was filed in violation of the Authorization. The
Cupps also sought declaratory and injunctive relief based on the EPA and the
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Authorization. And the Cupps’ defenses to the Greers’ and the Registers’ counterclaim for
contribution largely hinged on interpretation of the parties’ agreements. The circuit court
properly found that the action was based primarily in contract.
We likewise reject the Cupps’ alternative argument. As demonstrated, this is not a
case in which the contract claims are “easily separable” from the noncontract claims and
counterclaim for fee purposes. Cf. Bollinger v. Farm Credit Midsouth, PCA, 2026 Ark. App.
167, at 15, 734 S.W.3d 252, 260 (noting that “this does not appear to be a case where time
spent on the contract action was so intertwined with time spent defending the tort
counterclaims that the two cannot be separated for fee purposes”). Rather, the breach-of-
contract claims and other claims are “intertwined” such that “to clearly separate the time
spent for pursuing the counterclaim versus what was spent for defending the complaint
[would be] almost impossible.” Am. Express Bank, FSB v. Davenport, 2017 Ark. App. 105, at
6–7, 513 S.W.3d 880, 884–85 (upholding entire fee award under section 16-22-308 where
the circuit court noted that counterclaim was “intertwined” and an “integral part” of
prevailing party’s successful defense against a breach-of-contract claim); see also Patton Hosp.
Mgmt., LLC, 2016 Ark. App. 281, at 11, 493 S.W.3d at 806 (upholding fee award under
section 16-22-308 where resolution of mixed contract/noncontract claims hinged on
interpretation of two contracts). Again, the Cupps’ own attorney expressly acknowledged
that the Cupps’ “breach of contract position relative to the EPA . . . is so intricately
entwined with our declaratory judgment request and the counterclaim based on
contributions, so as to not really be able to be pulled apart.”
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The circuit court properly found that the Greers and the Registers were the
prevailing parties in an action based primarily in contract and did not abuse its discretion
in awarding attorney’s fees as requested under section 16-22-308. Accordingly, we affirm
the fee award in full.
Affirmed.
VIRDEN and BROWN, JJ., agree.
Fuqua Campbell, P.A., by: John T. Adams; and Keech Law Firm, PA, by: Kevin Keech,
for appellants.
Puryear Mayfield & McNeil, P.A., by: Jeffrey W. Puryear, Mark Mayfield, and Roger
McNeil, for appellees.
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