author: Donald L. Corbin, Justice. Robert L. Brown, Justice,

text:
    Ted SMITH, Individually and d/b/a Shiloh Ranches, Inc. v. John P. ELDER, Margaret G. Elder, Vance N. Elder, Jean E. Elder, N. Dwight Heathman, Jr., Helen Faye Heathman, G. Hugh Smith, Charlotte Smith, Individually and d/b/a Washington Farm Venture, an Arkansas Limited Partnership; John H. Adair, Jerry Hines, Marjorie Hines, James N. Morton, Dorothy Morton, Paul K. Smith, Doris R. Smith Individually and d/b/a Benton Farm Joint Venture, an Arkansas Limited Partnership; and McIlroy Bank & Trust Company
    92-948
    849 S.W.2d 513
    Supreme Court of Arkansas
    Opinion delivered March 22, 1993

      Davis, Cox & Wright, by: William Jackson Butt II and Tim E. Howell, for appellant.

      Friday, Eldredge & Clark, by: Joe D. Bell and Tonia P. Jones, for appellees.
   Donald L. Corbin, Justice.

Ted Smith, separate appellant, an attorney, was rendering tax and other personal services for plaintiffs in this case. In the fall of 1976, Mr. Smith approached plaintiffs about investing in a limited partnership he was forming. Mr. Smith advised plaintiffs they would receive tax benefits by entering into the limited partnership. On November 16, 1976, Washington Farm was formed as an Arkansas limited partnership with limited partners, John P. and Margaret G. Elder, Vance N. and Jean E. Elder, N. Dwight and Helen Faye Heathman and G. Hugh and Charlotte Smith, husbands and wives, respectively. On December 23,1976, Benton Farm was formed as an Arkansas limited partnership with limited partners, Jerry and Marjorie Hines, Paul K. and Doris R. Smith and Harold and Geraldine Collins, husbands and wives, respectively, and John H. Adair. James N. and Dorothy Morton subsequently purchased the Collins’ limited partnership interests. The general partner for both limited partnerships was Shiloh Ranches (Shiloh), separate appellant, of which Ted Smith was 1/3 owner and served as secretary-treasurer. Both limited partnerships were involved in dairy farming operations.

Pursuant to the formation of the limited partnerships, appellees signed many documents, including personal bank guaranties, some of which had blanks in the body, which they admit they did not read. Appellees were also provided with a limited partnership agreement and private placement memorandum which they concede they did not read “in any detail” prior to entering into the agreement. Each appellee did however sign a receipt and/or purchaser certification indicating the limited partnership agreement, subscription agreement and private placement memorandum (PPM) (collectively the pre-formation documents) had been received. Each appellee also signed a subscription agreement stating that the PPM had been read and understood and indicating a desire to purchase into the respective limited partnership.

The pre-formation documents detailed the risks involved and informed the potential investors that Mr. Smith was the attorney for Shiloh and for the partnership, that Mr. Smith and Shiloh would be acting in different capacities and conflicts of interest could arise. The documents also stated Shiloh was authorized to employ affiliated persons whom it deemed necessary for proper operation of the venture; Shiloh would receive rental payments for leasing equipment to the partnerships; and the partnerships would be forced to obtain loans to establish their operations for which the investors would be required to sign personal guaranties. Pursuant to the partnership agreement, Shiloh was to maintain adequate accounting records and furnish the limited partners with annual statements together with tax information.

Appellees allege that they relied on Ted Smith’s representation as their personal attorney that the documents they were signing were “just formalities.” They contend they were unaware of the extent of the partnership losses because, even though Ted Smith occasionally requested additional funds for maintenance, Smith failed to report the financial condition of either of the ventures for any period after the year ending December 31,1976, despite repeated requests from appellees.

In March of 1978, the Washington Farm was sold and appellees John Elder, Vance Elder, Dwight Heathman and Harold Smith became partners in the Benton partnership, which was doing business as Viney Grove Dairy. Also in March of 1978, Mr. Smith caused Mcllroy Bank & Trust to extend credit to each partnership in the amount of $175,000. Appellees allege that in March of 1978 the personal guaranties executed by them at the formation of the partnerships were delivered by Mr. Smith to Mcllroy Bank & Trust as additional security for the loans. However, George Edwards, Senior Vice-President of Mcllroy, testified that the loan guaranties were in place in 1976.

Appellees allege they did not learn of the personal guaranties and the fact that they had been given to Mcllroy Bank & Trust until March of 1979. On March 13,1979, Shiloh was removed as general partner, effectively ousting Mr. Smith as well. Appellees continued to operate the dairy farm owned by the Benton Farm partnership as Illinois River Dairy.

In September of 1980, Benton Farm and eight of the appellees, John R. Elder, Vance N. Elder, John Adair, James Morton, Dwight Heathman, G. Hugh Smith, Paul Smith and Jerry F. Hines as individuals, d/b/a Illinois River Dairy filed suit against Ted Smith and Shiloh alleging misapplication of limited partnership funds. Shiloh Ranches filed a counterclaim for money allegedly due the general partner by the limited partnerships. Following defendants’ motion to dismiss, Illinois River Dairy and five of the individual plaintiffs, John R. Elder, Vance N. Elder, James Morton, Dwight Heathman and G. Hugh Smith were dismissed from the suit. Ted Smith was also dismissed as an individual defendant. None of the remaining plaintiffs, John Adair, Paul Smith or Jerry F. Hines appeared for trial in August of 1983. The suit was then dismissed with prejudice as to those three plaintiffs and a judgment entered in favor of Shiloh on its counterclaim in the amount of $82,189.56. That judgment was not appealed and remains unsatisfied.

On October 1, 1982, appellees filed the lawsuit which produced this appeal. An Amended Complaint was filed October 25,1982. In their complaint, appellees alleged Ted Smith caused Washington Farm and Benton Farm to become indebted to Mcllroy Bank & Trust; Ted Smith acting as the attorney for each appellee as an individual advised appellees to sign guaranties containing blank spaces obligating them for any indebtedness incurred by Washington Farm and/or Benton Farm to Mcllroy Bank & Trust; negligently failed to advise appellees of the extent of their liability if they signed blank guaranties, which failure to advise was a breach of Ted Smith’s fiduciary duty to appellees as their attorney. Appellees alleged Ted Smith breached his fiduciary duty to avoid conflicts of interest in advising plaintiffs which he violated by:

(a) Charging the plaintiffs a management fee under the guise of Shiloh Ranches, Inc., for managing Washington Farm and Benton Farm.

(b) Leasing equipment to both Washington Farm and Benton Farm, under the guise of Shiloh Ranches, Inc.

(c) Realizing an undisclosed profit on sale of assets to Washington Farm and Benton Farm, under the guise of Shiloh Ranches, Inc. or other entities affiliated with or controlled by Defendant Ted Smith.

(d) Commingling and misapplication of funds and assets of Washington Farm and Benton Farm, without a full, correct and adequate accounting to the plaintiffs of those transactions.

Appellees also alleged these actions were contrary to the duty Ted Smith owed appellees as their attorney and pursuant to the limited partnership agreements. Lastly, appellees alleged Ted Smith, under the guise of Shiloh, mismanaged the business affairs and assets of plaintiffs and failed and refused to properly account for the unauthorized and negligent acts performed.

Appellees also included Mcllroy Bank & Trust (Mcllroy) as a defendant alleging Mcllroy knew appellees did not understand the extent of their liability as a result of signing incomplete personal guaranties and that they did not intend to incur that liability by signing the incomplete guaranties and should, therefore, be barred from recovering on the guaranties from appellees. Mcllroy made an oral motion to dismiss the complaint as to Mcllroy. This motion was granted by order filed January 16, 1984.

The case was transferred to equity by order filed February 2, 1984, as a result of equitable claims and defenses having been made by the parties. It was docket No. E 84-140.

Appellant Shiloh filed a counterclaim against all the appellees except, John Adair, Paul Smith, and Jerry F. Hines against whom Shiloh received judgment in the 1980 suit. The counterclaim alleged Shiloh had advanced money to the partnerships and the amount of $82,189.56 was still due. -

In a separate action, Mcllroy filed a petition for foreclosure against the partnership real estate naming Washington Farm, Benton Farm, each of the limited partners and their spouses, Shiloh, Ted Smith and Frederick S. Winn, individually and as guarantors of the Washington Farm and Benton Farm loans. Shiloh and Ted Smith filed cross-claims against the limited partners alleging waste of partnership assets following the termination of Shiloh as general partner. The limited partners cross-claimed against Shiloh and Ted Smith alleging the same causes of action in the suit resulting in this appeal. The cross-claims were dismissed with prejudice since the same claims were ready to be decided in the case reaching us on appeal. In its decree of foreclosure, the court ordered that the issue of Ted Smith’s liability for payment of the judgment be consolidated with the case under docket No. E 84-140, which is before us now.

In this case, appellants Shiloh and Ted Smith also filed cross-claims against all appellees alleging misfeasance and nonfeasance in the operation of the partnership causing a wasting of partnership assets. Appellees then filed a cross-claim against appellants realleging the same causes of action contained in their complaint. The trial court found that these cross-claims and the counterclaims of Ted Smith and Shiloh were barred by laches, waiver, estoppel and clean hands.

Appellant originally appealed this decision in case No. 90-176 which we remanded for lack of a final appealable order. The case comes to us again after entry of a final appealable order.

The trial court granted appellees relief finding that Ted Smith breached his fiduciary duty to appellees as their attorney and thereby committed constructive fraud and eight separate acts of malpractice against appellees and that Shiloh breached its fiduciary duty as a partner to appellees. As to Ted Smith, the trial court determined that appellees should have judgment against Ted Smith in the amount due on the notes executed on behalf of Benton Farm and Washington Farm. As to Shiloh, the trial court determined that appellees should have judgment against Shiloh for the amount of equipment rental charges over the amount the trial court found Shiloh was authorized to charge Benton Farm and Washington Farm. The court also determined that Ted Smith was liable to Mcllroy for the balance due on the March 8, 1978, loans pursuant to a Guaranty executed by Mr. Smith in favor of Mcllroy on May 11, 1976, absolutely and unconditionally guaranteeing the prompt payment of any and all indebtedness from Shiloh to Mcllroy. As a separate Conclusion of Law, the trial court determined that the five (5) year statute of limitations for breach of a written contract applied.

On appeal, appellants assert ten (10) points of error. We need only address two of these points.

STATUTE OF LIMITATIONS

The trial judge determined in Conclusion of Law No. 3 that the five (5) year statute of limitations applicable to actions for breach of a written contract applied to the partners’ claims against Ted Smith and Shiloh. The judge based this determination on the finding that as an officer of Shiloh, Ted Smith was obligated to perform the duties imposed on him by the written limited partnership agreement. The court went on to say that in addition to the duties included in the written contract, Mr. Smith owed each of the limited partners, his clients, the fiduciary duty to disclose all transactions he performed and conducted as executive or manager pursuant to the written agreements. Finally, the court found that appellees’ cause of action arose from Mr. Smith’s failure to disclose the Mcllroy loan transaction which resulted in personal liability being imposed on appellees as a result of the personal guaranties they had signed.

Mr. Smith’s duty of disclosure arose from his relationship to the limited partners as their personal attorney and not from any written obligation imposed by the partnership agreements. Mr. Smith did not sign the partnership agreements other than as a representative for Shiloh. Shiloh was a partner, not Mr. Smith individually.

The trial court determined that the cause of action against Ted Smith arose on March 8, 1978, the date of the loans. No finding was made as to the date the action against Shiloh arose. However, the latest possible date the action could have arisen would be March 13, 1979, the date Shiloh was terminated as general partner. Suit was commenced on October 1, 1982, the date of the original Complaint and not October 25,1982, the date of the Amended Complaint as the trial court determined.

Although the trial court determined that the five year statute of limitations applicable to written contracts applied, the trial court did not make any findings of breach of contract. The trial court based its finding of liability against Mr. Smith completely upon the finding that Mr. Smith breached his fiduciary duty to appellees as their attorney and thereby committed malpractice. Three years is the applicable statute of limitation for breach of fiduciary duty and malpractice actions. Goldsby v. Fairley, 309 Ark. 380, 831 S.W.2d 142 (1992). The statute of limitations as to Ted Smith should therefore have been three years and appellees’ action against Ted Smith, individually, is barred. As to Shiloh, three years is also the applicable statute of limitations since the only finding by the trial court as to Shiloh was breach of fiduciary duty. Therefore, appellees’ action against Shiloh is also barred by the statute of limitations.

However, the trial court also determined that Mr. •Smith’s filing of a cross-claim relating to the ousting of Shiloh as general partner, which occurred in 1978, revived appellees’ right to file a responsive answer and cross-claim against Mr. Smith stating the same cause of action. This does not amount to a waiver of the statute of limitations as appellees contend. In Holley v. Holley, 264 Ark. 35, 568 S.W.2d 487 (1978), this court stated that the filing of a counterclaim waives objections to the court’s jurisdiction, but indicated that the statute of limitations would still apply. Also, the claims asserted by Mr. Smith in this case are compulsory counterclaims. Ark. R. Civ. P. 13 (a). Assertion of a compulsory counterclaim does not act as a waiver. Arkansas Game & Fish Comm’n v. Lindsey, 292 Ark. 314, 730 S.W.2d 474 (1987).

TED SMITH GUARANTY

In its Third Amended and Supplemental Judgment, the trial court determined that the written guaranty dated May 11,1976, and executed by Ted Smith in favor of Mcllroy absolutely and unconditionally guaranteeing the payment of any and all indebtedness from Shiloh to Mcllroy was valid. The trial court also determined that the guaranty was in effect on March 8,1978. On this basis, the trial court held Mr. Smith liable for the balance of debts owed to Mcllroy from Shiloh remaining unpaid on the March 8, 1978, promissory note executed by Shiloh as general partner for Benton Farm and the March 8, 1978, note executed by Shiloh as general partner for Washington Farm.

Mr. Smith contends the trial court erred in finding the guaranty valid. Mr. Smith gave notice to Mcllroy on March 16, 1979, that Shiloh had been removed as general partner and that Shiloh and Ted Smith wished to have no further responsibility for Benton Farm or Washington Farm. Mr. Smith contends that after he gave notice of his and Shiloh’s desire to be relieved of responsibility for Benton Farm and Washington Farm, Mcllroy was equitably obligated to obtain his approval before releasing any collateral or other obligers, allowing any extensions, delaying enforcement action or commingling collateral. As a result of Mcllroy’s failure to obtain Mr. Smith’s approval before taking or failing to take these actions, Mr. Smith contends he was relieved from his obligations as guarantor.

It is the law in Arkansas that a material alteration in an obligation, made without the assent of the guarantor, may discharge the guarantor. Germer v. Missouri Portland Cement Co., 301 Ark. 277, 279, 783 S.W.2d 359, 360 (1990). An alteration is not material unless the guarantor is placed in the position of being required to do more than his original undertaking. Continental Ozark, Inc. v. Lair, 29 Ark. App. 25, 29, 779 S.W.2d 187, 189 (1989). Provisions included in a guaranty will be honored. Germer, 301 Ark. Ill, 279, 783 S.W.2d 359, 360.

Mr. Smith contends his agreement was materially altered because Mcllroy made no effort to account for the cattle existing on the farm at the time Mr. Smith gave notice of discontinuance of the guaranty; subsequently extended additional loans to the farm for the purchase of additional cattle that were commingled with the existing cattle, making it impossible to determine which cattle secured which loan; extended the loans on several occasions without Mr. Smith’s approval as guarantor; did not accelerate the loans even though the limited partnership was consistently late with its loan payments; allowed its perfected security interest to lapse; and did not apply the proceeds from the sale of the cattle when they were finally sold to the outstanding balance of the 1978 loans.

The guaranty signed by Ted Smith provided in pertinent part:

[T]he undersigned hereby guarantee(s) absolutely and unconditionally the prompt payment when due, whether at maturity, by declaration, demand or otherwise of any and all indebtedness from [Shiloh] to [Mcllroy] plus such interest as may accrue thereon, whether such indebtedness is incurred as principal, guarantor or indorser, is direct or indirect, absolute or contingent, due or to become due or whether such indebtedness is now existing or arises hereafter and in addition, the undersigned agree(s) to pay all costs of collection, legal expenses and attorney’s fees paid or incurred by [Mcllroy] in collecting and/or in enforcing such indebtedness and in enforcing this guaranty (all such indebtedness, interest, cost, fees and expenses being hereinafter called the “indebtedness”).
No renewal or extension of time of payment of the indebtedness, no relief or surrender of any security for the indebtedness or this guaranty, no release of any person primarily or secondarily liable on the indebtedness (including any maker, indorser or guarantor), no delay in enforcement of payment of the indebtedness of this guaranty and no delay or omission in exercising any right or power with respect to the indebtedness, or this guaranty, shall affect the liability of any of the undersigned hereunder.
Each of the undersigned waives presentment, protest, demand, notice of dishonor or default, notice of acceptance of this guaranty, notice of any loans made, extensions granted, or other action taken in reliance hereon and all demands and notices of any kind in connection with this guaranty or the indebtedness.
This guaranty shall remain in full force and binding upon the undersigned until written notice of the discontinuance hereof shall be received by [Mcllroy], notwithstanding the death of one or more of the undersigned and until any and all indebtedness accepted before receiving notice of revocation shall have been fully paid. [Emphasis added.]

Time extensions are not material alterations if they are expressly provided for in the guaranty as they were here. Germer, 301 Ark. 277, 279, 783 S.W.2d 359, 360. Nor are any other terms expressly provided for in the guaranty material alterations. Id. We have recently held that an absolute and unconditional guaranty which contains a term providing that omission of the holder does not affect the liability of the guarantor waives any defense based on impairment of collateral. First Nat'l Bank of Crossett v. Griffin, 310 Ark. 164, 832 S.W.2d 816 (1992). The guaranty signed by Mr. Smith specifically provides that Mr. Smith shall remain liable for all indebtedness accepted before Mcllroy received notice of discontinuance of the guaranty until it is fully paid. Ted Smith was not released from liability for the loans Mcllroy made on March 8,1978, by reason of Shiloh’s removal as general partner. Only payment of the loans after Mr. Smith gave notice of revocation of the guaranty would discharge his liability.

Nor were any of the actions or inactions alleged by Mr. Smith sufficient to materially alter his obligations under the guaranty and release Mr. Smith from liability thereon. The guaranty is absolute and unconditional and specifically provides neither extensions of time of payment, relief or surrender of security, delay in enforcement of payment, or delay or omission in exercising any right or power with respect to the indebtedness shall affect the liability of Mr. Smith. Griffin, 310 Ark. 164, 832 S.W.2d 816. Therefore, the trial court properly determined Ted Smith was responsible for payment of the outstanding amount of the debt due Mcllroy from Shiloh.

Affirmed in part; reversed in part.

Brown, J., concurs.

Robert L. Brown, Justice,

concurring. I disagree with the majority that the trial judge based his finding of liability solely on legal malpractice. Under his February 8, 1988 Findings of Fact and Conclusions of Law, the judge specifically finds that Ted Smith was a shareholder and officer of Shiloh Ranches, Inc., the general partner of Benton Farms Joint Venture and Washington Farms Joint Venture. The judge then, in Conclusion of Law No. 3, determines that Smith violated a fiduciary duty owed to the limited partners as a principal of the general partner, Shiloh. By not disclosing, all pertinent information regarding his self-dealing as a principal of the general partner and by mismanaging the partnership, all of which benefitted Shiloh and Smith personally, he breached his fiduciary duty to the limited partners and violated the partnership agreement.

We have recognized that a corporate officer owes a duty not to do an unfair or fraudulent act which will result in his private gain at the expense of the corporation. Godwin v. Churchman, 305 Ark. 520, 810 S.W.2d 34 (1991); Taylor v. Terry, 279 Ark. 97, 649 S.W.2d 392 (1983); Raines v. Toney, 228 Ark. 1170, 313 S.W.2d 802 (1958). When a corporate officer commits such an act, he breaches his fiduciary duty to the shareholders. Id. The same reasoning applies to a limited partnership. The general partner and the principals of that limited partnership should not benefit themselves at the expense of the limited partners in violation of the partnership agreement. That is what Smith is found to have done in the case before us.

Therefore, I believe that the trial judge was correct in concluding that a breach of fiduciary duty tied to a violation of the partnership agreement carries with it a five-year statute of limitations.

Having said that, I cannot find a provision in the subsequent judgments (as opposed to the Findings of Fact and Conclusions of Law) where the trial judge made an award against Smith based on anything other than legal malpractice. Rather, it appears that the judge specifically premised each of his judgment awards expressly on his Conclusion of Law No. 1, which dealt with Smith’s malpractice, and Conclusion of Law No. 2, which concerns the breach of fiduciary duty by Shiloh Ranches, Inc. Without a judgment award related to Conclusion of Law No. 3, which I read as a conclusion that Smith breached his fiduciary duty to the limited partners as a principal of the general partner — Shiloh — and not as their attorney, there is no basis for applying on a five-year limitations period on Smith’s liability.

Accordingly, I concur in the majority decision.


source: Caselaw Access Project

author: Per Curiam. Robert H. Dudley, Justice,

license: Public Domain

text:
    Cathryn Chadwick YATES v. Floyd Andrew STURGIS and Vanessa Sturgis Arkansas Association of Counties, Arkansas Municipal League, Movants

    92-281
    849 S.W.2d 523
    Supreme Court of Arkansas
    Opinion delivered March 22, 1993
    [Rehearing denied April 19, 1993].

      Loh, Massey & Yates, Ltd., by: Harold C. Yates, for appellant.

      McMillan, Turner & McCorkle, by: F. Thomas Curry, for appellee.

      Duncan & Rainwater, by: Michael R. Rainwater, for movants.
   Per Curiam.

The respective motions of the Arkansas Association of Counties and the Arkansas Municipal League to file amicus curiae briefs are granted. Each movant shall file its brief within ten (10) days from the date of this per curiam order.

We grant the motions and allow additional time for the filing of these briefs because Supreme Court Rule 20(k) regarding rehearing and amicus briefs is not entirely clear as to when the briefs are to be filed' once permission of this court is granted.

By this order we interpret Rule 20(k) to mean that amici curiae counsel must file briefs in support of or in opposition to rehearing simultaneously with their motions for permission to participate. If the motion and amicus brief support rehearing or are neutral, they must be filed within the time period that the petitioner’s petition and brief are due. If the motion and amicus brief oppose rehearing, they must be filed within the time period that the respondent’s petition and brief are due.

Henceforth, no additional time to file an amicus brief will be granted. Amicus briefs must accompany motions to participate.

Dudley and Newbern, JJ., dissent.

Robert H. Dudley, Justice,

dissenting. Movants in this motion, the Arkansas Association of Counties and the Arkansas Municipal League, have asked permission to file amicus curiae briefs for rehearing. They filed briefs when they filed their petitions, but the majority per curiam indicates that movants wish to file additional briefs. The majority per curiam grants the motion allowing the movants to file additional briefs because our rule “is not entirely clear as to when the briefs are to be filed.” The majority per curiam is most unusual in that the time for filing briefs for rehearing is long past, and the movants have not asked for extra time to file additional briefs. In addition, the movants have not complained that the rule is not clear; the majority per curiam advances that theory on its own motion.

There is no ambiguity in the rule. The movants have asked that we grant their amicus curiae petitions for rehearing. Rule 20 (a) of the Rules of the Supreme Court and Court of Appeals provides:

Time Limited for Filing—Service.—Petitions for rehearing, briefs thereon, and evidence of service both of petition and brief, must be filed within 17 days from the date of decision.

Seventeen days have long passed. Under the clear language of the rule, the movants are barred from filing any additional briefs. They should have tendered any additional briefs within seventeen days of the decision.

In addition, Rule 20 (c) provides:

Additional Time.—Neither party will be granted further time than as above indicated, except on showing of illness of counsel, or other unavoidable casualty.

The majority per curiam grants additional time to the movants even though they have not asked for it, and they certainly have not shown an unavoidable casualty.

The majority per curiam granting movants leave to file amicus curiae briefs long after the deadline has passed is unusual in other respects. It grants the amicus curiae greater rights than those of the parties, and the result is that the respondent will be denied the right to answer the amicus curiae briefs. This unjust result will come about in the following manner. We handed down our decision in this case weeks ago. Within seventeen days, the Sturgises, the losing parties, timely petitioned for a rehearing. The movants in this motion, the Arkansas Association of Counties and the Arkansas Municipal League, filed petitions asking permission to file amicus curiae briefs and, at the same time, filed briefs. The prevailing party, respondent Yates, timely filed her response to all of the briefs. Now, the majority per curiam grants the movants additional time to file additional amicus curiae briefs. Quite naturally, since the unusual procedure granted by the majority per curiam is not in accordance with the rules, there is no rule allowing respondent Yates to file yet another response. Thus, the party who won the case, respondent Yates, will not be allowed to respond to the second briefs for rehearing that will be filed by amicus curiae. I would simply follow our rules. The amicus curiae briefs for rehearing were due within seventeen days of the decision. I would consider those that were filed within that time and would not allow any additional briefs asking for rehearing after the seventeen days had passed. Accordingly, I dissent.

Newbern, J., joins in this dissent.


author: Per Curiam.

text:
    Trayvon Lavell SCOTT v. STATE of Arkansas
    CR 93-232
    847 S.W.2d 717
    Supreme Court of Arkansas
    Opinion delivered March 22, 1993

      William M. Howard, Jr., for appellant.
    No response.
   Per Curiam.

Appellant, Trayvon Lavell Scott, by his attorney has filed for a rule on the clerk.

His attorney, William M. Howard, Jr., admits that the failure to file the record in time was due to a mistake on his part.

We find that such an error, admittedly made by the attorney for a criminal defendant, is good cause to grant the motion. See our Per Curiam opinion dated February 5, 1979, In Re: Belated Appeals in Criminal Cases, 265 Ark. 964. A copy of this opinion will be forwarded to the Committee on Professional Conduct.


author: Jack Holt, Jr., Chief Justice.

text:
    Judge BRIMER, Jr. v. ARKANSAS CONTRACTORS LICENSING BOARD
    92-1220
    849 S.W.2d 948
    Supreme Court of Arkansas
    Opinion delivered March 29, 1993

      Thaxton, Hout & Howard, by: Steven G. Howard, for appellant.

      Winston Bryant, Att’y Gen., by: Rick D. Hogan, Asst. Att’y Gen., for appellee.
   Jack Holt, Jr., Chief Justice.

This is an appeal of the White County Circuit Court’s approval of a decision of the Arkansas Contractors Licensing Board (Board) to fine Judge Brimer, Jr. (Brimer) for acting as a contractor without a license in violation of Ark. Code Ann. § 17-22-101 (1987). Weagree and affirm.

Michael Hoofman is an investigator with the Board. According to Hoofman’s testimony before the Board, he first investigated the appellant, Brimer, when he was working on the Brown Sheet Metal Building in Gravel Ridge. Brimer told Hoofman that he was getting out of the business and working for his cousin, Mrs. Brown. So, Hoofman closed the investigation without a hearing.

Hoofman next encountered Brimer when he was working as a contractor on the Russell Grocery Store in Russell, Arkansas. This investigation led to a hearing' before the Board at which it voted unanimously to charge Brimer with a civil penalty of $547 to be suspended and ordered him to refrain from bidding on projects in excess of $20,000 prior to being properly licensed as a contractor.

Mr. Hoofman then testified as to the contracting job at issue stating that he was in Blytheville, Arkansas and saw a church, First United Pentecostal, under construction. He took photographs of it and then went up to Brimer, who was on the job site, and asked him how he was involved in the project. Brimer replied that he was being paid by the hour and that Pastor Stephen Spears was in charge.

Hoofman talked to Pastor Spears who indicated that Brimer had given him proposals and contracts for the concrete work and the metal building. The concrete work proposal quoted $15,000 and the building proposal quoted $ 16,000. Both of these proposals were signed by Brimer.

Hoofman next subpoenaed Razorback Concrete to obtain statements it had sent to the church. These statements totalled $16,814.16 for materials. And, according to a proposal by M.B.I. Enterprises, the metal for the building would total $75,084.80. This proposal is addressed to and signed by Stephen Spears.

After hearing this testimony, the Board voted unanimously to find Brimer guilty of violating the Contractor’s Licensing Law and fined him $100 per day to the limit of three percent of his contract. This fine would be reduced to two percent if he obtains a license within one hundred twenty days. The Board’s findings were:

FINDINGS OF FACTS

1. Judge Brimer, Jr. has undertaken the position of contractor as defined in Section 1. (Act 150 of 1965 as amended), 1st United Pentecostal Church in Blytheville, AR.
2. Judge Brimer, Jr. is not licensed by the Contractors Licensing Board.
CONCLUSIONS OF LAW
Judge Brimer, Jr. is guilty of violating Section 13, Act 150, as amended. (See Act 180 of 1985.)
ORDER
(1.) The Board voted unanimously that Judge Brimer, Jr. shall pay a civil penalty of $3,687.00, suspended to $2,458.00 upon licensure within 120 days of receipt of this Order and refrain from bidding on or performing work on any projects in excess of $20,000.00 prior to being licensed with the Contractor’s Licensing Board.
DONE AND SO ORDERED this 8th day of May, 1992.

Brimer appealed this decision to the White County Circuit Court. After reviewing the transcript of the hearing and briefs submitted by both sides, the court affirmed the decision of the Board. It is from this decision that Brimer brings this appeal.

Brimer claims that proper interpretation of the statute, Ark. Code Ann. § 17-22-101 (1987) leads to the conclusion that he is not a contractor.

The language of the statute clearly indicates that in determining whether a person is a contractor, the court should look at the total costs of the contracting job:

As used in this chapter, unless the context otherwise requires, “contractor” means any person, firm, partnership, association, corporation, or other organization, or any combination thereof, who, for a fixed price, commission, fee or wage, attempts to or submits a bid to construct, or contracts or undertakes to construct, or assumes charge, in a supervisory capacity or otherwise, or manages the construction, erection, alteration, or repair, or has or have constructed, erected, altered, or repaired, under his, their or its direction, any building, apartment, condominium, highway, sewer, utility, grading, or any other improvement or structure on public or private property for lease, rent, resale, public access or similar purpose, except single-family residence, when the cost of the work to be done, or done, in the State of Arkansas by the contractor, including but not limited to, labor and materials, is twenty thousand dollars ($20,000) or more.

(Emphasis added.)

Our rule of interpreting statutory language is that we construe a statute just as it reads, giving the words their ordinary and usually accepted meaning in common language. City of Hot Springs v. Vapors Theatre Restaurant, Inc., 298 Ark. 444, 769 S.W.2d 1 (1989). The language in licensing statutes must be strictly construed. Wilcox v. Safley, 298 Ark. 159, 766 S.W.2d 12 (1989). Applying this rule, the statute clearly indicates that the court is to look at the total cost of the work to be done and not merely the cost of the materials actually ordered or passing through the contractor’s hands. In short, the statute refers to the cost of the project.

The purpose behind the Contractors Licensing Act is to require contractors who desire to engage in certain types of construction work to meet certain standards of responsibility such as experience, ability, and financial condition. Bird v. Pan Western Corp., 261 Ark. 56, 546 S.W.2d 417 (1977). Brimer has twice been penalized for acting outside this law.

When an administrative agency’s decision is appealed, a number of general rules of appellate review apply. Review of administrative decisions, both in the circuit court and here, is limited in scope. The appellate court’s review is directed, not toward the circuit court, but toward the decision of the agency. In Re Sugarloaf Mining Co., 310 Ark. 772, 840 S.W.2d 172 (1992); Arkansas Alcoholic Bev. Control v. Person, 309 Ark. 588, 832 S.W.2d 149 (1992). The construction of a statute by an administrative agency should not be overturned unless it is clearly wrong, and the court will not substitute its judgment for that of an administrative agency unless the administrative agency’s decision is “arbitrary and capricious.” Ramsey v. Department of Humans Services, 301 Ark. 285, 783 S.W.2d 361 (1990); Arkansas State Bank Comm’r v. Bank of Marvell, 304 Ark. 602, 804 S.W.2d 692 (1991). The evidence is given its strongest probative force in favor of the ruling of the administrative agency. Arkansas Contractors Licensing Bd. v. Butler Constr. Co., 295 Ark. 223, 748 S.W.2d 129 (1988). The court may not reverse a decision of an administrative agency if there is any substantial evidence to support its decision. Butler Constr. Co., supra, citing Williams v. Scott, 278 Ark. 453, 647 S.W.2d 115 (1983).

Brimer contends that because he did not directly oversee or order the materials used for the building and the concrete work, his work did not total $20,000 or more as required by the statutory definition of contractor. But, the evidence presented at the administrative hearing clearly indicates that the labor and materials for the metal building totalled over $90,000 and for the concrete work it totalled over $30,000. Taken together or separately these jobs designate Brimer as a contractor for the purposes of Ark. Code Ann. § 17-22-101 (1987).

Yet, Brimer insists that because the materials were paid for by the church and not by him, then he is not a contractor. This argument is not persuasive. In Arkansas Contractors Licensing Bd. v. Butler Constr. Co., 295 Ark. 223, 748 S.W.2d 129 (1988), this court was faced with a similar argument. Like Brimer, Butler contended that he was working for a flat fee and did not furnish any materials or labor. In finding against Butler, we determined that the court should look to see if the overall cost of the project equals or exceeds $20,000 in determining if a contracting license is required.

Nevertheless, Brimer argues that Butler Constr. Co. is not persuasive because the board found that Butler had agreed to be responsible for obtaining all material and no such finding was made in Brimer’s situation. It seems, though, that the Board’s decision comes down to a question of sufficiency of the evidence before the Board. This court has previously held that in order to establish an absence of substantial evidence, the appellant has the burden of establishing that the proof before the administrative board was so nearly undisputed that fair-minded persons could not reach the Board’s conclusions. Wright v. Arkansas State Plant Bd., 311 Ark. 125, 842 S.W.2d 42 (1992); Arkansas Health Planning and Development Agency v. Hot Springs County Memorial Hospital, 291 Ark. 186, 723 S.W.2d 363 (1987).

Brimer has failed to meet this burden. The evidence before the Board indicated that he has a history of refusing to become licensed... he even admitted that he did not want to get a contractor’s license. He submitted proposals for the metal building and the concrete work on his business stationery. He admittedly oversaw the concrete work and the metal building. The evidence presented clearly proves that Brimer was in charge of jobs costing more than $20,000, and as such, the decision of the administrative board is upheld and the findings of the White County Circuit Court are affirmed.

Affirmed.


text:
    Marvin L. HICKS v. Carroll L. GRAVETT, In His Official Capacity as Sheriff of Pulaski County, Arkansas
    92-1152
    849 S.W.2d 946
    Supreme Court of Arkansas
    Opinion delivered March 29, 1993
    [Rehearing denied May 3, 1993.]

      Hilburn, Calhoon, Harper, Pruniski & Calhoon, Ltd., by: Sam Hilburn, for appellant.

      Larry D. Vaught, Pulaski County Att’y, for appellee.
   Jack Holt, Jr., Chief Justice.

Marvin Hicks, a federal prisoner, appeals a circuit court decision denying his petition for writ of mandamus against Pulaski County Sheriff Carroll Gravett. Hicks wanted the trial court to order Sheriff Gravett to withdraw a detainer that was lodged against Hicks by the sheriff because of a state conviction in Arkansas. We affirm.

The petitioner, Marvin Hicks, is presently serving a twenty-four month sentence at the Federal Correctional Institution in Seagoville, Texas. Subsequent to his federal sentencing, Hicks was sentenced in Pulaski County Circuit Court to the Department of Correction. As a result, Sheriff Gravett lodged a detainer against Hicks at Seagoville Federal Correctional Institution. Once the Federal Bureau of Prisons learned of this detainer, it refused Hicks’ request to be transferred to a minimum security federal prison explaining that if the detainer was removed, Hicks would be considered for minimum security placement.

Hicks subsequently filed a petition for writ of mandamus with the Pulaski County Circuit Court asking the court to issue a writ of mandamus “compelling the Defendant to withdraw the Detainer filed against the Plaintiff immediately.” Hicks based his petition on an allegation that Sheriff Gravitt lacked the authority to issue the detainer and that this was an improper use of a detainer.

After a hearing on this matter, the Pulaski County Circuit Court determined in pertinent part that:

2. That the Defendant placed a detainer on Plaintiff with the Federal Bureau of Prisons to hold Plaintiff to serve his state sentence when he completed his federal sentence.

3. That the detainer was not issued under, nor is it governed by, the Interstate Agreement on Detainers (Ark. Code Ann. § 16-95-101, et seq.).

4. The detainer is a valid request to hold the prisoner and to notify Defendant when release is imminent, and Defendant has the inherent authority to place the detainer.

IT IS, THEREFORE, ORDERED AND ADJUDGED that Plaintiffs Petition for Writ of Mandamus be denied and dismissed.

It is from this decision that Hicks brings this appeal.

The standard of review upon .denial of a writ of mandamus is whether the trial court abused its discretion. State v. Sheriff of Lafayette County, 292 Ark. 523, 731 S.W.2d 207 (1987). In deciding when a writ of mandamus should issue, we said in Eason v. Erwin, 300 Ark. 384, 781 S.W.2d 1 (1989):

A mandamus is not a writ of right but is within the discretion of the court, and the party applying for it must show a specific legal right and the absence of any other adequate remedy. It will not lie to control or review matters of judicial discretion, but only to compel the exercise of such discretion.

(Citations omitted.) See Thompson v. Irwin, 310 Ark. 533, 838 S.W.2d 353 (1992). Furthermore, a mandamus action enforces the performance of a legal right after it has been established; a mandamus’ purpose is not to establish a right. Springdale Bd. of Education v. Bowman, 294 Ark. 66, 740 S.W.2d 909 (1987); Buttolph Trust v. Jarnagan, 302 Ark. 393, 789 S.W.2d 466 (1990).

Hicks has failed in his proof to show a “specific legal right” to have the detainer withdrawn. As such, the decision of the circuit court to deny the writ of mandamus is affirmed.

Defined generally, a detainer is the “restraint of a man’s personal liberty against his will.” Blacks Law Dictionary, 5th Ed. The Interstate Agreements on Detainers Act, Ark. Code Ann. § 16-95-101 et seq., deals specifically with ensuring that prisoners with pending charges in other states are protected from speedy trial violations. Under the Act, a detainer is “an informal notice to prison authorities that charges are pending elsewhere against an inmate and requesting the custodian to notify the sender before releasing the prisoner.” 21 Am. Jur. 2d § 404 (1981). This court has determined that for purposes of the Interstate Agreement on Detainers, a detainer is a “notification filed with the institution in which a prisoner is serving a sentence, advising that he is wanted to face criminal charges in another jurisdiction.” Finley v. State, 295 Ark. 357, 748 S.W.2d 643 (1988) (citing United States v. Mauro, 436 U.S. 340 (1978)).

According to Hicks’ argument, because the detainer against him was issued due to a previous conviction and not due to pending charges or indictment, it was issued in violation of the Interstate Agreement on Detainers and issued by the sheriff absent any authority to take such an action. Yet, the fact that the detainer was not issued pursuant to pending charges merely indicates, as the circuit court found, that the detainer is not subject to the Interstate Agreement. Besides, the Interstate Agreement on Detainers was not drafted to protect prisoners in situations like Hicks’. Instead, it was designed to give a “prisoner incarcerated in one State the right to demand the speedy disposition of any untried information or complaint.” Carchman v. Nash, 473 U.S. 716 (1985).

Hicks also bases his argument on a contention that Sheriff Gravett did not have the authority to issue a detainer, yet he cites no convincing authority to support his argument. Instead, he merely points out that there is not a statute that specifically grants the sheriff the authority to issue detainers. Assuming this is correct, a party applying for a mandamus must show a “specific legal right,” Eason, supra, for the writ, and Hicks has not done so.

In affirming the trial court, we note that it also found that the sheriff has the inherent authority to place the detainer. We do not pass judgment on this issue as it is not necessary under the facts of this case.

Affirmed.

Corbin, J., not participating.


author: Tom Glaze, Justice. Steele Hays, Justice,

text:
    Tina WHEELER v. Martha BENNETT
    92-1149
    849 S.W.2d 952
    Supreme Court of Arkansas
    Opinion delivered March 29, 1993

      Gary Eubanks & Associates, by: William Gary Holt and James Gerard Schulze, for appellant.

      Barber, McCaskill, Amsler, Jones & Hale, P.A., by: R. Kenny McCulloch, for appellee.
   Tom Glaze, Justice.

On May 5, 1990, the appellant, Tina Wheeler, failed to see and ran a stop sign located at the corner of Mitchell and Thompson streets in Conway, Arkansas, and collided with the vehicle driven by appellee, Martha Bennett. Bennett sustained injuries to her lower back and neck. Ms. Wheeler was on her way to an aerobics class and was driving a pick-up truck owned by her father’s business, Wheeler Construction Company. Mrs. Bennett initially filed respective negligence and vicarious liability claims against Tina Wheeler and her father, Bob Wheeler d/b/a Wheeler Construction Company. Bennett sought recovery for permanent injury, loss of earning capacity, past and future medical expenses, and past and future pain, suffering and mental anguish. The Wheelers answered denying all allegations and asserting comparative fault. Bennett subsequently took Ms. Wheeler’s deposition and discovered Ms. Wheeler had had two accidents and had received three speeding tickets all in the preceding four years. Bennett then amended her complaint by substituting the vicarious liability claim with one alleging Ms. Wheeler was reckless and that Bob Wheeler was guilty of negligent entrustment. The Wheelers again answered denying these new allegations.

Prior to trial, Bob Wheeler filed a motion for summary judgment as to the negligent entrustment claim. In addition, Ms. Wheeler filed two pretrial motions seeking to exclude certain evidence from being introduced at trial. The trial court denied both Wheelers’ requests.

At trial and upon conclusion of Bennett’s case-in-chief, the judge directed two verdicts. First, the judge dismissed Bennett’s negligent entrustment claim against Bob Wheeler. Second, he granted Bennett’s directed verdict finding Ms. Wheeler had breached her duty to exercise ordinary care. The judge then submitted only the issues of proximate cause and damage to the jury. The jury returned a general verdict assessing Mrs. Bennett’s damages at $100,000.

Ms. Wheeler appeals contending the trial judge committed error in (1) directing a verdict against her on the issue of negligence, (2) denying her motions in limine, (3) allowing the testimony of eyewitness Jeff Johnston, and (4) denying her motion for judgment notwithstanding the verdict or, in the alternative, for a new trial, in that the damages awarded were unsupported by the evidence and were excessive. We affirm upon condition that appellee accept a remittitur.

We first address whether the trial judge committed error by directing a verdict for Mrs. Bennett on the issue of Wheeler’s negligence. This court has consistently reaffirmed the holding that it is for the jury in a comparative negligence case to determine the negligence of each party. Baker v. Matthews, 241 Ark. 539, 408 S.W.2d 889 (1966). However, we have also adopted the rule that the issue should be taken from the jury “when the proof of one party is so clear, convincing and irrefutable that no other conclusion could be reached by reasonable men.” Spink v. Mourton, 235 Ark. 919, 362 S.W.2d 665 (1962); Morton v. American Medical International, Inc., 286 Ark. 88, 689 S.W.2d 535 (1985); See also, Williams v. Carr, et al, 263 Ark. 326, 565 S.W.2d 400 (1978), and Young v. Johnson, 311 Ark. 551, 845 S.W.2d 509 (1992).

It is key to note that those cases involved issues of negligence. Moreover, the following language from the Spink opinion is especially appropriate to the case at bar:

Thus, no matter how strong the evidence of a party, who has the burden of establishing negligence and proximate cause as facts, may comparatively seem to be, he is not entitled to have those facts declared to have reality as a matter of law, unless there is utterly no rational basis in the situation, testimonially, circumstantially, or inferentially, for a jury to believe otherwise.

Spink, 235 Ark. at 922, 362 S.W.2d at 667, citing United States Fire Ins. Co. v. Milner Hotels, 253 F.2d 542 (8th Cir. 1958). Similarly, as we said in Woodmen of the World Life Ins. Soc. v. Reese, 206 Ark. 530, 176 S.W.2d 708 (1943):

A verdict upon an issue of fact should not be directed in favor of the party who has the burden of proof with respect thereto, unless such fact is admitted, or is established by the undisputed testimony of one or more disinterested witnesses and different minds cannot reasonably draw different conclusions from such testimony.

In presenting her case to the jury, Bennett called Tina Wheeler to the witness stand and elicited the two following statements from her: (1) She had admitted to the police officer at the scene that she had run the stop sign, and (2) she admitted that Bennett had done nothing to contribute to the accident. Although this testimony had the effect of affirmatively proving negligence on Ms. Wheeler’s part, it had the greater and more critical impact of conceding the collision was in no way the fault of Bennett. Other evidence did not contradict Wheeler’s admissions or concessions. Because Wheeler conceded all fault was hers, the trial judge was correct in directing a verdict for Bennett.

Our determination that the trial judge did not err in directing a verdict on the issue of Ms. Wheeler’s negligence renders moot, for lack of prejudice, other contentions raised by appellant. In this respect, Ms. Wheeler argues the trial court erred when it allowed fifteen-year-old Jeff Johnston to give his opinion concerning the speed of Tina Wheeler’s vehicle when it impacted Bennett’s vehicle. Johnston’s testimony reflected only on the issue of Ms. Wheeler’s negligence and liability concerning the accident, and that issue was correctly disposed of by the trial court’s granting Bennett’s directed verdict. Wheeler was at fault. Thus, even if Johnson’s testimony was inadmissible, no prejudice ensued and reversible error did not occur. Peoples Bank & Trust v. Wallace, 290 Ark. 589, 721 S.W.2d 659 (1986).

Ms. Wheeler also argued the trial court erred in failing to exclude documented evidence that she had been involved in two wrecks and had received three speeding tickets since she obtained her driver’s license some four years earlier. This evidence was introduced to prove Bennett’s claim of negligent entrustment against Bob Wheeler — which claim was dismissed before this case went to the jury. In short, Wheeler argues that, although the trial court eventually dismissed the negligent entrustment claim, the evidence already introduced to support the claim was before the jury and was highly prejudicial to Ms. Wheeler’s case. First, we reiterate that the trial court not only dismissed the negligent entrustment claim, but also it directed a verdict finding Ms. Wheeler at fault. Second, Wheeler simply fails to show how Ms. Wheeler’s prior driving record actually prejudiced her case. Clearly, it was her burden to prove prejudice resulted from any inadmissible evidence. Id. Ms. Wheeler simply has not demonstrated how any inadmissible evidence bearing on the resolved liability issues affected the damages rendered against her.

Ms. Wheeler next contends that the trial judge erred in refusing to exclude (1) any reference or testimony to plaintiff's alleged loss-of-earning capacity, and (2) any reference to or admission of post-accident expenses incurred by Bennett for medical treatment related to chest pains which Wheeler claims were unrelated to the accident.

We first address the loss-of-earning capacity contention. Wheeler specifically argues that the trial judge erred in admitting evidence of loss of earning capacity because Bennett failed to show with reasonable certainty that the injuries she suffered were permanent, and that unless there is such testimony the court should not let the jury assess any damages for permanent injury. Missouri Pacific Transportation Co. v. Kinney, 199 Ark. 512, 135 S.W.2d 56 (1939). A permanent injury is one that deprives the plaintiff of his right to live his life in comfort and ease without added inconvenience or diminution of physical vigor. Adkins v. Kelly, 244 Ark. 199, 424 S.W.2d 373 (1968). It is well recognized that impairment-of-earning capacity is recoverable only upon proof that an injury is permanent. Henry Woods, Earning Capacity as Elements of Danger in Personal Injury Litigation, 18 Ark. L. Rev. 304, 305 n.12 (1965); Cates v. Brown, 278 Ark. 242, 645 S.W.2d 658 (1983). Further, whether a permanent injury exists must not be left up to speculation and conjecture on the part of the jury. Handy Dan Improvement Center, Inc. v. Peters, 286 Ark. 102, 689 S.W.2d 551 (1985).

Wheeler first argues that no “permanent injury” per se exists in this case because none of the physicians who treated Bennett ever assigned her a numerical “impairment rating.” No such rating is required. Review of our cases that address this subject sufficiently illustrate that the failure to assign an impairment rating in no way wholly precludes an injured person from recovering damages for permanent injuries or loss of earning capacity. See Matthews v. Rodgers, 279 Ark. 328, 335, 651 S.W.2d 453 (1983); Belford v. Humphrey, 244 Ark. 211, 424 S.W.2d 526 (1968).

Wheeler further argues that, even if assignment of an impairment rating is unnecessary to recover for loss-of-earning capacity, Bennett failed to meet her burden of proving a permanent injury with reasonable certainty because there was insufficient proof of an objective injury. We disagree.

Tina Wheeler herself stated immediately after the collision that Bennett exclaimed, “My back hurts. I’m in pain.” Further, the emergency room records show that Bennett had a bulging disc in the lower lumbar area of her spine. That evidence was corroborated by the MRI (Magnetic Resonance Image) analysis which showed an irritation of the SI nerve rootlet on the right side. Bennett’s regular physician, Dr. George Gray, III, testified that objective tests showed that the Si nerve rootlet remained irritated from April of 1990 through July of 1991. Dr. Gray further testified that upon Mrs. Bennett’s first examination, just ten days after the wreck, he located and verified “objective spasms in her lumbar spine,” such spasms being consistent with an irritated nerve rootlet. He also testified that upon examination Bennett had quite a decrease in her range of motion in her back, flexion, extension, side bending and rotation. Moreover, Mrs. Bennett complained of pain in her neck. In this connection, MRI results showed a mild protrusion of the disk between C6 and Cl which Dr. Gray testified was the most common area of the neck to be injured as far as discs were concerned. Although Dr. Gray also testified that the scant objective findings of injury could not have caused the myriad of symptoms and pain complained of by Bennett, he stated that there was no reason that he would think that Bennett would show improvement and that he anticipated she would continue to have the same complaints.

In East Texas Motor Freight Lines, Inc. v. Freeman, 289 Ark. 539, 545, 713 S.W.2d 456, 460 (1986), this court was confronted with an auto accident in which one of the drivers, Ms. Freeman, was injured, and testified that she sustained a head injury, suffered nausea, vomiting and severe and continuing headaches up to the time of trial, a period of approximately three and a half years. Although this court conceded the proof of permanency was marginal, and further stated that Freeman’s injuries were more emotional than physical, we allowed evidence of permanency to be submitted to the jury:

While we have held that future pain and permanency must be established with reasonable certainty and not left to the jury’s speculation and conjecture, (cite omitted) we have also said the jury may consider the nature, extent and persistency of the injuries and may rely on lay testimony, (cite omitted). Between the two extremes of objective injuries on the one hand and subjective complaints on the other lies a grey area “in which the issue of permanency becomes a matter of judgment.” Belford v. Humphrey, 244 Ark. 211, 424 S.W.2d 526 (1968). All in all we are satisfied there was enough evidence of permanency to submit the issue to the jury.

In light of the fact that the objective signs and other evidence bearing on the permanency of Bennett’s injuries here are more substantial than those presented in Freeman, we hold that the testimony adduced on the issue of permanent injury was sufficient to warrant its submission to the jury.

Ms. Wheeler’s next point for reversal has merit. She contends the trial court erred in allowing Bennett to introduce testimony and medical bills, totalling $8,281.24, which related to the treatment of chest pains suffered by Bennett some eight months after the collision. Bennett was required to show by a preponderance of the evidence that it was Wheeler’s negligence that proximately caused Bennett’s chest pains and related medical expenses.

Proximate cause means a cause which, in a natural and continuous sequence, produces damage without which the damage would not have occurred. In an action for negligence, proximate cause may be shown from circumstantial evidence, and such evidence is sufficient to show proximate cause if the facts proved are of such a nature and are so connected and related to each other that the conclusion therefrom may be fairly inferred. White River Rural Water District v. Moon, 310 Ark. 624, 839 S.W.2d 211 (1992).

In Jonesboro Coca-Cola Bottling Co. v. Young, 198 Ark. 1032, 1036, 132 S.W.2d 382, 384 (1939), this court cited 15 Am. Jur. 413 for the proposition that:

The damages recovered in any case must be shown with reasonable certainty both as to their nature and in respect of the cause from which they proceed. No recovery can be had where it is uncertain whether the plaintiff suffered any damages unless it is established with reasonable certainty that the damages sought resulted from the act complained of. Hence, no recovery can be had where report must be had to speculation or conjecture for the purpose of determining whether the damages resulted from the act of which complaint is made or from some other cause, or where it is impossible to say what, if any, portion of the damages resulted from the fault of the defendant, and what portion from the fault of the plaintiff himself.

The record reflects that in November of 1990 (eight months after the accident) Mrs. Bennett visited Dr. Gray complaining of chest pains for which he had her admitted to Conway Regional Hospital. Mrs. Bennett had a pre-existing heart condition characterized as a rapid heart beat. In fact there was.testimony that Bennett was placed on heart and blood pressure medication as early as 1979, and was required to continue taking the medication. However, for alleged monetary reasons, Bennett stopped taking the medication just a few days prior to experiencing the chest pains. Dr. Gray stated that in his opinion the cause of the chest pains was “multifactorial” — pre-existing heart condition, smoking, obesity, family history of heart problems, stress, and “I would assume that stopping her medication had the major component to her having chest pain but as far as to any degree of certainty, I can’t say.”

After examination, Dr. Gray transferred Bennett to the University of Arkansas Medical Center in Little Rock for more definitive testing. Bennett was placed in CCU and her echocardiogram showed poor function of her left ventricle. Upon Bennett’s release, UAMS sent Dr. Gray a discharge report, which he read during his video deposition. Dr. Gray testified:

the diagnoses on the discharge report were that they thought (sic) was caused by gastrointestinal problems, esophagitis and gastritis. This could be anything from preexisting ulcer problems, medication induced — she was on anti-inflammatory medications, which could have caused this from her back, stress and so forth. So the picture on her heart is very cloudy at best in my estimation.

Again, in characterizing the UAMS discharge diagnoses Dr. Gray stated:

“It appears that they thought that, more or less, her chest pain was a referred chest pain from her esophagus. . . . Usually, these are seen in hyper-secretory states of acid. Rather this be (sic) the most common results of which are medication and stress and smoking.”

However, when Dr. Gray was asked to give his opinion as to which of the three possible sources most likely induced the gastrointestinal chest pains, he repeated that he did not know one way or the other, but that he did know that probably all of them do contribute, but could not say to what degree. Thus, there was absolutely no evidence that ingestion of the anti-inflammatory medication more probably than not caused Mrs. Bennett’s chest pains. Further, the record is devoid of any document or statement reflecting that physicians at UAMS conducted any tests to determine whether anti-inflammatory medication was indeed a source of the gastro-intestinal chest pains. In addition, the deposition testimony of Dr. Warren Boop, Jr., Bennett’s chronic pain physician, fails to carry Bennett’s burden. Dr. Boop treated Bennett only once and that was prior to the onset of chest pains. Although he did state that anti-inflammatory medication frequently causes gastric irritation, he could not give an opinion as to the possible source of Bennett’s chest pain.

We hold that the evidence submitted required the jury to speculate in deciding which of the various possible causes more likely than not caused Bennett’s chest pains. The evidence failed to prove with reasonable certainty that the chest pains were the result of the anti-inflammatory medication prescribed for treatment of Bennett’s injured back. In sum, Bennett’s proof falls short of showing her chest pains resulted from any fault of Wheeler’s. Thus, the trial judge erred in allowing that evidence to be presented to the jury. We mention Bennett’s reliance on this court’s decision in the recent case of National Bank of Commerce v. McNeil Trucking, 309 Ark. 80, 828 S.W.2d 584 (1992). Suffice it to say that the McNeil Trucking case is inapposite because there the court did not address the issue presented here, namely, whether alleged damages were causally connected to the accident.

Because we find reversible error in the trial court’s allowing Bennett to introduce medical expenses unrelated to her chest pains, we note that single verdicts as a general rule may not be divided. However, this court has adopted and applied an exception to this rule, that is, when the only error relates to a separable item of damages, a new trial can sometimes be avoided by the entry of a remittitur. Martin v. Rieger, 289 Ark. 292, 711 S.W.2d 776 (1986); Swenson v. Hampton, 244 Ark. 104, 424 S.W.2d 165 (1968). Of course, we have no assurance what damages the jury actually considered when rendering its verdict. Nevertheless, the judge incorrectly admitted evidence bearing on the element of medical expenses that are clearly separable damages in the amount of $8,281.24. Therefore, if Mrs. Bennett remits $8,281.24 within seventeen judicial days, we will affirm; if not, this cause will be directed for a new trial on damages.

Wheeler finally contends the jury’s award of damages is both unsupported by the evidence and was the result of passion or prejudice. We disagree. In each case we must study the proof, viewing it most favorably to the appellee, and decide the difficult question of whether the verdict is so great as to shock our conscience or to demonstrate passion or prejudice on the part of the trier of fact. Matthews v. Rodgers, 279 Ark. 328, 651 S.W.2d 453 (1983); Warhurst v. White, 310 Ark. 546, 838 S.W.2d 350 (1992). In determining whether the amount of damages is so great as to shock the conscience, the appellate court considers such elements as past and future medical expenses, permanent injury, loss of earning capacity, scars resulting in disfigurement, and pain, suffering and mental anguish. Bill Davis Trucking, Inc. v. Prysock, 301 Ark. 387, 784 S.W.2d 755 (1990). As discussed above, we concluded that Bennett’s injuries were indeed submissible as “permanent,” and Bennett’s evidence on the single element of loss of earning capacity alone was estimated at $197,600. Accordingly, we find no merit in this contention.

Affirmed on condition of remittitur.

Hays, J., dissents.

Steele Hays, Justice,

dissenting. I disagree that it was proper for the trial court to direct a verdict for the plaintiff on the issue of liability. The plaintiff had the burden of proving negligence, proximate cause and damages and the jury could have disbelieved her proof on any or all of those issues.


author: Tom Glaze, Justice.

text:
    CITY OF MARION, Arkansas, et al. v. Primo BAIONI, James R. Williford and Crittenden County Homebuilders Association
    92-924
    850 S.W.2d 1
    Supreme Court of Arkansas
    Opinion delivered March 29, 1993
    [Rehearing denied May 3, 1993.]

      Hale, Fogleman & Rogers, for appellants.

      Sloan, Rubens & Peeples, by: Kent J. Rubens, for appellees.
   Tom Glaze, Justice.

This case involves certain sewer and water “tap and access fees” the City of Marion has charged appellees, as developers of residential land in and around the city. Marion has experienced a considerable growth in population since 1975, and this influx of new people has resulted in the city exceeding the design capacity of both its water and sewer systems. Between July of 1988 and August of 1990, the city enacted a series of ordinances that placed “tapping fees” on builders or lot owners connecting on to the city’s existing water and sewer systems and required “access fees” from any person or entity connecting to the city’s transmission lines. These fees only apply to new development. The ordinances, as amended, provide that the funds collected from these respective fees must be placed in separate accounts designed as the “water expansion account” and “sewer expansion account,” and used solely to expand the city’s water and sewer systems.

The appellees brought suit challenging the constitutionality of the city’s ordinances as well as their validity under state law. The chancellor held the ordinances invalid, finding that the fees assessed under the city’s ordinances amounted to a general revenue raising scheme and therefore “taxes,” that had not been approved by the vote of the people as required under Ark. Code Ann. § 26-73-103 (1987). The city appeals the chancellor’s decision.

We first point out, as did the chancellor below, that a municipality’s ordinance levying a tax is not valid until the tax is adopted by the voters of the city at a special or general election. § 26-73-103. Here the City of Marion held no election to authorize a tax to expand the city’s water and sewer systems, presumably because the city believed it could underwrite the costs of such expansions by charging tapping and access fees (sometimes called impact fees) to persons who would benefit from such extensions.

The distinction between a tax and a fee is that government imposes a tax for general revenue purposes, but a fee is imposed in the government’s exercise of its police powers. City of North Little Rock v. Graham, 278 Ark. 547, 647 S.W.2d 452 (1983). An example of a fee charged in the exercise of a city’s police power is found in Holman v. City of Dierks, 217 Ark. 677, 233 S.W.2d 392 (1950). There, the court held that an “annual sanitation charge” of $4.00 per business and residence which was to pay for fogging the city with insecticide three times a year was a fee, not a tax, for services to be rendered. On the other hand, the Graham court considered the validity of a North Little Rock ordinance which imposed a $3.00 per month “public safety fee” on the water bill of each household, business and apartment resident for the purpose of increasing the salaries of the city policemen and firemen and held such a fee was in actuality a tax because the so-called fee was for the cost of maintaining a traditional governmental function and services already in effect and not for a special service as was the case in the Holman case. 278 Ark. at 549, 647 S.W.2d at 453. As is illustrated by the Graham decision, this court in determining whether a governmental charge, assessment or fee is a tax is not bound by how the enactment or levy labels it. See also City of Hot Springs v. Vapors, 298 Ark. 444, 769 S.W.2d 1 (1989); cf. Rainwater v. Haynes, 244 Ark. 1191, 428 S.W.2d 254 (1968).

In this case, the chancellor reviewed considerable legal authority leading him to the general conclusion that a governmental levy or fee, in order not to be denominated a tax, must be fair and reasonable and bear a reasonable relationship to the benefits conferred on those receiving the services. We agree with the chancellor’s conclusion, which seems to be the prevailing rule in other jurisdictions. However, the rule’s application is not always an easy one for the courts. See Bldg. Ind. Ass’n of S. Cal. v. City of Oxnard, 198 Cal. Rptr. 63 (Cal. App. 2 Dist. 1984) (a growth requirement capital fee applicable to new development held a tax because the fee was designed to collect revenues to benefit the community as a whole); Contractors & Builders Ass’n v. City of Dunedin, 329 So.2d 314 (Fla. 1976) (connection fees to expand water and sewage systems held a tax because the use of the money collected was not limited to the costs of expansion); Eastern Diversified v. Montgomery County, 570 A. 850 (Md. 1990) (development impact fees to raise funds to finance construction of roads held a tax because funds benefited general public); Amherst Builders Assn v. City of Amherst, 61 Ohio St.2d 345, 402 N.E.2d 1181 (1980) (sewer tap-in or connection fees of $400 for single family homes of new users upheld as valid fee, not a tax); but see State Ex Rel. Waterbury Development v. Witten, 58 Ohio App.2d 17, 387 N.E.2d 1380 (1977) (water tap-in fee of $720 held a tax because it exceeded cost of service provided new users); Hayes v. City of Albany, 490 P.2d 1018 (Or. App. 1971) (sewer connection fee of $255 for a single family dwelling for construction and expansion of sewer system held valid because proceeds must be used directly in development and maintenance of sewer system); Haugen v. Gleason, 359 P.2d 108 (Or. 1961) (land acquisition fee held tax because the use of money produced no direct benefit or relationship to the new division); Hillis Homes, Inc. v. Snohomish County, 97 Wash.2d 804, 650 P.2d 193 (1982) (development fees imposed on new residential subdivisions constituted taxes because the primary purpose was to raise money not regulate land subdivision).

In the present case, the chancellor found that the City of Marion had demonstrated that the costs or fees were fair and equitable, reasonably related to the benefits conferred on the appellees (developers and builders), and are restricted to future use for expansion of the water and sewer systems. Nonetheless, the chancellor still opined the access and tapping fees constituted unauthorized taxes because the fee amounts provided in the city ordinances exceeded the direct cost of the services to be provided to new users and the funds raised were designated for future improvements traditionally provided and underwritten by the city. We must disagree with the chancellor.

Under the City of Marion ordinances, sewer and water fees total $950.00 for each single family unit. While $150.00 of this amount is required to tap-in to the sewer system, the actual cost of tapping-in is about fifteen or twenty dollars. The chancellor held, and appellees argue on appeal, that because the fees imposed by the city exceed the services provided, the fees are in actuality taxes. Such a conclusion ignores the fact that the tapping and access fees established by Marion are for the raising of funds to pay for the extension of existing water and sewer systems to developments where new users reside. Raising such expansion capital by setting connection charges, which do not exceed a pro rata share of reasonably anticipated costs of expansion, is permissible where expansion is reasonably required, if the use of the money is limited to meeting the cost of that extension. Contractors & Builders Ass'n, 329 So.2d 314; see also Amherst Builders Assn, 61 Ohio St. 345, 402 N.E.2d 1181.

Here, the city’s expert witness, John Sheahen, testified that he determined an appropriate level of fees to developers that justified the projected costs of water and sewer facilities needed to serve future customers. He said that the projected costs for extending the water system would require $805.00 per single family unit and sewer costs would require $808.00 per unit. Obviously, the city’s combined water and sewer connection fees, $950.00, imposed on builders and developers for new users is considerably less than the costs projected by Sheahen — $1,613.00 per single family unit. Such evidence certainly supports the chancellor’s finding that the city’s fees are reasonably related to the benefits conferred on the appellees, and in our de novo review of the record, we also conclude the fee amounts established by the city are more than reasonable.

Of major importance, we point out that the city ordinances require the tapping and access fees to be segregated and placed into accounts to be used solely and exclusively to expand the capacity of the city’s water and sewer systems. In other words, these funds will be used directly.to benefit the new users and for no other purposes. Graham, 278 Ark. 547, 647 S.W.2d 452; Contractors & Builders Ass’n, 329 So.2d 314; Amherst Builders Assn, 61 Ohio 345, 402 N.E.2d 1181. This fund restriction distinguishes this case from those situations where municipalities have imposed fees to underwrite the costs of a special service to a new development but instead the monies benefited the general public. Id.

While appellees make little mention of it in their argument, they do touch on the idea that Marion’s ordinances violate the equal protection clause because these city enactments treat appellees differently than non-resident users located in five areas surrounding Marion. These non-residents use approximately 25 % of the city’s present water and sewer capacity. The chancellor did not reach this constitutional issue below, and we do not feel obliged to do more than to say Marion’s ordinances are presumed constitutional. Thus, it is appellees’ burden in these circumstances to show the ordinances are not rationally related to achieving a legitimate government objective. See Streight v. Ragland, 280 Ark. 206, 655 S.W.2d 459 (1983). Arkansas law permits cities under certain circumstances to contract with nonresident users to provide water and sewer services. Ark. Code Ann. § 14-234- 111 (1987). Marion has done so for years — though it also has expressed these users will now face possible impact fees at the end of their respective agreements. In any event, the city justifies its present disparate treatment of these five users because it incurs no operation or maintenance expense for these customers’ systems. Based on the record and argument before us, we are unable to accept appellees’ suggestion that the city’s ordinances violate the equal protection clause.

In conclusion, appellees attempt to challenge on cross-appeal certain provisions in city ordinance 123, and contend these provisions could force appellees to donate land for parks as a condition for having a subdivision approved. The chancellor rejected appellees’ argument below, but the record reflects appellees filed no appeal from that ruling. Therefore, we must dismiss appellees’ cross-appeal as the record fails to show a notice of cross-appeal was ever filed. Edwards v. Neuse, 312 Ark. 302, 849 S.W.2d 479 (1993).

For the above reasons, we reverse this cause on direct appeal and dismiss appellees’ cross-appeal.


author: Robert L. Brown, Justice.

text:
    STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY v. Steve THOMAS and Carol Thomas, as Parents and Natural Guardians of Lindsay THOMAS
    92-1224
    850 S.W.2d 4
    Supreme Court of Arkansas
    Opinion delivered March 29, 1993

      Boswell, Tucker & Brewster, by: Clark S. Brewster, for appellant.

      John Doyle Nalley, for appellee.
   Robert L. Brown, Justice.

Appellant State Farm Mutual Automobile Insurance Company appeals from a judgment assessing a twelve percent penalty and attorney’s fees against it for failure to pay $25,000 in underinsured motor vehicle coverage to Lindsay Thomas within the time specified in the policy under Ark. Code Ann. § 23-79-208 (Repl. 1992). We decline to reach the merits of this appeal due to the failure of State Farm to show compliance with Ark. R. Civ. P. 54(b).

According to the second amended complaint in this matter, appellees Steve Thomas and Carol Thomas brought suit individually and as parents and natural guardians of their daughters, Lindsay Thomas and Jennifer Thomas, against appellant State Farm, the estate of John Laughlin, and David Spears. The plaintiffs sued David Spears and the estate of John Laughlin for negligence and sought damages for personal injuries that arose out of a three-car traffic accident that occurred on March 29, 1991. Lindsay Thomas prayed for $285,000, according to counsel for appellees.

Steve Thomas settled his claim with the estate of John Laughlin. In addition, all four Thomases settled their claims with State Farm, although State Farm retained the right to appeal the issue of the penalty and attorney’s fees with regard to Lindsay Thomas. Lindsay Thomas also settled with the liability carriers for David Spears and the estate of John Laughlin. The record and abstract, however, are silent on the disposition of 1) the claim of Steve Thomas against David Spears; 2) the claims of Carol Thomas and Jennifer Thomas against David Spears and the estate of John Laughlin; and 3) any additional claims that Lindsay Thomas might have had against David Spears and the estate of John Laughlin, in addition to her settlement with their liability carriers.

In discussing the history of Lindsay Thomas’s claim for penalty and attorney’s fees, the appellees make a general statement in their brief that “[the] cases were settled June 10, 1992, the day before trial.” To support this statement reference is made to pages in the record, but the pages cited do not show disposition of the claims listed above. Nor is their disposition shown anywhere else in the record.

We, therefore, remain largely in the dark about the status of these remaining claims. The judgment appealed from awarded Lindsay Thomas the sum of $3,000 as penalty and $5,000 as attorney’s fees. The judgment also contained language that “this court retains jurisdiction for such further orders as may be necessary,” suggesting that there were other matters still to be resolved.

This court will only review final matters on appeal. Ark. R. App. P. 2(a). A judgment which adjudicates fewer than all of the claims of all of the parties does not terminate the action. Ark. R. Civ. P. 54(b). The failure to comply with Rule 54(b) by the absence of an order adjudicating the rights of all parties is a jurisdictional issue that we are obligated to raise on our own. Smith v. Leonard, 310 Ark. 782, 840 S.W.2d 167 (1992); Quality Ford, Inc. v. Faust, 307 Ark. 371, 820 S.W.2d 61 (1991). We have held in this regard that for an order to be final and appealable, it must dismiss the parties from the court, discharge them from the action, or conclude their rights to the subject matter in controversy. Id. It is not enough to dismiss some of the parties; the order must cover all parties and all claims in order to be appealable. See Parks v. Hillhaven Nursing Home, 309 Ark. 373, 829 S.W.2d 419 (1992). The trial court may direct final judgment with regard to fewer than all of the claims or parties by an express determination that there is no just reason for delay. Ark. R. Civ. P. 54(b). When an appropriate certification is made by the trial court, we will consider the judgment final for purposes of appeal. See Arkhola Sand & Gravel Co. v. Hutchinson, 291 Ark. 570, 726 S.W.2d 674 (1987).

In Smith v. Leonard, supra, we considered an appeal that had a complex procedural history, involving various interventions, cross-claims, counterclaims, and third-party claims. We dismissed the appeal without prejudice for failure to comply with Rule 54(b) because the omnibus decree appealed from did not dispose of six separate claims, and there was no indication in the record that those claims were otherwise concluded by the chancellor.

Similarly, in the present case the circuit court’s judgment respecting Lindsay Thomas’s entitlement to twelve percent interest and attorney’s fees under § 23-79-208 gives no indication of the disposition of several claims brought by the Thomases. Indeed, the record gives no hint of the overall status of the litigation pertaining to David Spears and the estate of John Laughlin, other than Thomas’s lone settlement with the Laughlin estate and Lindsay Thomas’s settlement with their liability carriers. The other claims may still be viable or they may have been disposed of. We simply have no way of knowing. Furthermore, the court’s judgment contains no Rule 54(b) certification for purposes of appeal.

The burden is on the appellant to bring a record before us that shows that all claims in this matter have been brought to conclusion, and that the circuit court’s judgment was final. That was not done in this instance. In one of the first decisions rendered by this court, we held that the record must disclose a final adjudication of the matter in controversy between the parties for this court to have jurisdiction. Campbell v. Sneed, 5 Ark. 398 (1843). Accordingly, we will not address the substantive issues and, instead, dismiss the appeal without prejudice due to noncompliance with Rule 54(b).

Appeal dismissed.


text:
    Brian K. HOWARD v. STATE of Arkansas
    CR 92-1236
    847 S.W.2d 717

    Supreme Court of Arkansas
    Opinion delivered March 29, 1993

      Campbell and Campbell, by: J. Calvin Campbell, for appellant.

      Winston Bryant, Att’y Gen., by: Catherine Templeton, Asst. Att’y Gen., for appellee.
   Per Curiam.

The appellant Brian K. Howard was convicted of theft by receiving and burglary. He was sentenced as an habitual offender to serve twenty years imprisonment. A “no merit” appeal was filed with the Arkansas Court of Appeals where Howard’s convictions were affirmed in an opinion not designated for publication. Howard v. State, CACR 91-265 (April 29, 1992). Howard then filed a petition for post-conviction relief in the trial court. It was denied, and Howard brings this appeal.

Howard’s petition to the trial court alleged that his counsel was ineffective in numerous ways. His chief allegation was that his counsel had a conflict of interest since she represented all three co-defendants. The state responded to the petition by stating that the petition was longer than permitted by the rule and that the allegation was ruled upon by the Arkansas Court of Appeals in its opinion. The trial court held that “the responses” raised the issue of jurisdiction and concluded that it did not have jurisdiction. Although the allegation of conflict of interest was mentioned in its opinion, the issue was not properly before the Court of Appeals because it had not been raised at trial. The case is remanded so that the trial court can consider Howard’s Rule 37 petition on its merits. The record of the hearing should be filed in this court together with the court’s findings of fact and conclusions of law.

Reversed and remanded.


author: Robert H. Dudley, Justice.

text:
    Joe Paul ALBERTY v. John W. WIDEMAN
    92-1172
    850 S.W.2d 314
    Supreme Court of Arkansas
    Opinion delivered April 5, 1993

      Dean A. Garrett, for appellant.

      Hardin, Jesson, Dawson & Terry, by: Bradley D. Jesson and /. Rodney Mills, for appellee.
   Robert H. Dudley, Justice.

We dismiss this appeal without prejudice. The parties to this case are two orthopedic surgeons who entered into a partnership agreement in 1981 to own office space in a condominium office building and to own certain items of medical equipment, office equipment, and office furnishings in Fort Smith. In 1987, appellee notified appellant of his intention to retire from his medical practice and, pursuant to the partnership agreement, offered appellant the right to purchase the partnership property. Over two years later, the partnership still had not been terminated, so appellee filed this suit. After a trial on the merits, the chancellor entered an order finding that the real and personal property of the partnership should be sold at public auction, but withheld “final determination of the distribution of the proceeds of the sale, attorney’s fees and costs until after the sale has been conducted, if, in fact, the parties are unable to reach an agreement on these issues prior to the expiration of sixty days.” That order was entered on August 9,1991. On August 14, 1991, the chancellor supplemented the order and ruled that appellee owned 42.7 per cent of the partnership, appellant owned 57.3 per cent, and appellee owed the partnership almost $7,000.00 in expenses. However, the trial court did not set the amount of the attorney’s fee, and more important, ordered that “the real and personal property of the parties will be sold by a commissioner appointed by the court within sixty days from the date of this order rather than from the August 9 date of the previous order if the parties are unable to come to terms.” In short, the orders did not put the court’s order of sale into execution. That remains to be done in a subsequent order.

On September 6, 1991, appellant filed a notice of appeal from both orders. On September 12,1991, appellee filed a notice of cross-appeal. On September 18, 1991, the chancellor entered an order pursuant to Rule 54(b), stating that there was no just reason for delay and declaring that the two orders constituted a final judgment as to the matters addressed therein. Neither party filed a notice of appeal after the entry of the September 18,1991, order.

Appellee contends that Ark. R. App. P. 4, as construed in Kelly v. Kelly, 310 Ark. 244, 835 S.W.2d 869 (1992), mandates dismissal of this appeal for failure to file a second notice of appeal after the certification under Rule 54(b). The argument is without merit. Appellant gave his notice of appeal within thirty days of the entry of the order and supplemental order from which he seeks to appeal. See Ark. R. App. P. 4(a). The Rule 54(b) certification states that there is no just reason for further delay and that the two previous orders constitute a final judgment as to the matters contained in them. Appellant does not appeal from the 54(b) certification. He gave a timely notice of appeal from the orders from which he seeks to appeal, and it was not necessary to give another notice of appeal after obtaining a certification that the orders from which he seeks to appeal are final orders pursuant to Rule 54(b). Accordingly, we do not dismiss for the reason argued by appellee.

However, we must dismiss the appeal for another reason. The orders are not final as to the claim. The trial court’s certification is in error in that regard. The rule that an order must be final to be appealable is a jurisdictional requirement that this court is obliged to raise even when the parties do not. Fratesi v. Bond, 282 Ark. 213, 666 S.W.2d 712 (1984). In cases involving court-ordered judicial sales of property, we have long held that if the decree puts the court’s directive of sale into execution, it constitutes a separable and “final” part of the litigation. In Parker v. Bodcaw Bank, 161 Ark. 426, 256 S.W. 384 (1923), we held that a decree foreclosing a mortgage and a later decree confirming the foreclosure sale were both final and appealable orders. The decree foreclosing the mortgage was rendered on September 22, 1922, and the decree confirming the sale was rendered on December 21, 1922. We held the appeal, which was perfected on March 29, 1923, to be untimely for the purpose of reviewing the decree of September 22, 1922. In Festinger v. Kantor, 264 Ark. 275, 277-78, 571 S.W.2d 82, 84 (1978), we wrote:

The test of finality, however, is not whether the order settles the issue of title as a question of law. To be final the decree must also put the court’s directive into execution, ending the litigation or a separable branch of it. On this controlling point Chief Justice Cockrill’s entire opinion in Davie v. Davie, 52 Ark. 227, 12 S.W. 558, 20 Am. St. Rep.

170 (1889), is applicable, but we quote only its especially pertinent language:

A judgment in equity is understood ordinarily to be interlocutory when inquiry as to matter of law or fact is directed preparatory to a final adjudication of the rights of the parties .... But, “where the decree decides the rights to the property in contest and directs it to be delivered up, or directs it to be sold, and the complainant is entitled to have it carried into immediate execution, the decree must be regarded as final to that extent, although it may be necessary for a further decree to adjust the account between the parties.”
****
In this case while the decree takes the form of a final order in adjudicating the parties’ proportionate interests in the land, it is apparent that the court has not fully adjudicated that branch of the cause. The relative interests of the parties in the land have been ascertained and determined, but... the court is yet to determine . . . what amounts shall be charged as liens upon the several interests, and whether there shall be a sale of some of the interests to satisfy the same. The decree does not direct its execution, but looks to further judicial action before that event. The plaintiffs can suffer no injury by awaiting the termination of the litigation.

Thus, a decree that orders a judicial sale of property and places the court’s directive into execution is a final order and appealable under Ark. R. App. P. 2(a)(1). When there is such an order, a certification under Rule 54 (b) is not necessary. Such a rule is very practical. Under it, the parties are able to appeal an order directing a judicial sale and have a determination of the issues at that time. If it were otherwise, and there were questions about the validity of sale, prospective bidders might not bid a reasonable amount because there would be a cloud over the matter, and no one wants to buy a lawsuit. Those issues can be finally determined under our procedure. As a separate matter, any questions concerning the validity and adequacy of the bids might be heard on a later appeal from the order confirming title.

Here, the chancellor only determined the property shall be sold “by a commissioner appointed by this Court within sixty days from the date of this order. . . .” Such an order did not place the court’s directive into execution. The chancellor must still appoint a commissioner and set a day and place for the sale, and, perhaps, set an attorney’s fee, before the directive can be placed into execution. Thus, the order is not appealable, and, accordingly, we dismiss the appeal without prejudice.


text:
    Kristi COOK, On Behalf of Herself and All Other Similarly Situated Tax Payers v. STATE of Arkansas, Department of Finance and Administration
    92-670
    850 S.W.2d 309
    Supreme Court of Arkansas
    Opinion delivered April 5, 1993

      Michael A. Skipper, for appellant.

      Beth B. Carson, for appellee.
   Robert H. Dudley, Justice.

The chancellor ruled that the complaint in this case failed to state a cause of action for an illegal exaction, and, as a result, the chancery court did not have jurisdiction. Appellant appeals and argues that she pleaded facts sufficient to state a cause of action for an illegal exaction. The ruling of the chancellor was correct, and, accordingly, we affirm.

The facts pleaded were that appellant taxpayer purchased, within the State, a new automobile and an extended warranty, and that appellee Revenue Division of the Department of Finance and Administration misinterpreted the gross receipts tax statute and imposed the sales tax on the price of the extended warranty. The taxpayer challenges only the State’s interpretation of the law. She does not challenge the validity of the underlying tax law.

In Pledger v. Featherlite Precast Corp., 308 Ark. 124, 128-29, 823 S.W.2d 852, 855-56 (1992), we explained:

This exaction case involves a taxpayer who seeks tp enjoin a government from taxing him. In this second kind of exaction case, which, for convenience, we label an “illegal tax” exaction case, the exaction itself must be alleged to be illegal before the chancery court has jurisdiction under the constitutional provision. It is true that we have many cases in which the collection of taxes has been enjoined under the illegal exaction provision, but all involve a tax that was itself illegal. See for example Greedup v. Franklin County, 30 Ark. 101 (1875), an attempt to collect a county levy in excess of the five mills allowed by the constitution; Lyman v. Howe, 64 Ark. 436, 42 S.W. 830 (1897), a tax based upon an assessment not made by the assessor; Ragan v. Venhaus, 289 Ark. 266, 711 S.W.2d 467 (1986) and Merwin v. Fussell, 93 Ark. 336, 124 S.W. 1021 (1910), attempts to collect taxes not properly voted by the people; McDaniel v. Texarkana Cooperage & Mfg. Co., 94 Ark. 235, 126 S.W. 727 (1910), a tax levied by a county having no jurisdiction over the property; City of Little Rock v. Cash, 277 Ark. 494, 644 S.W.2d 229 (1982) and Waters Pierce Oil Co. v. Little Rock, 39 Ark. 412 (1882), taxes which were not authorized by the city’s delegated power of taxation. However, we have always held that if the taxes complained of are not themselves illegal, a suit for illegal exaction will not lie. Schuman v. Ouachita County, 218 Ark. 46, 234 S.W.2d 42 (1950). In Taber v. Pledger, 302 Ark. 484, 489, 791 S.W.2d 361, 364 (1990), we wrote that “a suit to declare a tax statute unconstitutional, and therefore void” comes within the illegal exaction provision, while a suit “to determine whether the taxpayer’s transactions fall within an exemption created by statute” does not come within the section. More important, and precisely on point in this case, we have held that a flaw in the assessment or collection procedure, no matter how serious from the taxpayer’s point of view, does not make the exaction itself illegal. Schuman v. Ouachita, supra (citing Missouri Pacific Ry. Co. v. Fish, 181 Ark. 863, 28 S.W.2d 333 (1930) and Beard v. Wilcockson, 184 Ark. 349, 42 S.W.2d 557 (1931)). Here, the taxpayer does not contend that the use tax is itself illegal, but rather contends that the assessment of its individual tax, and that of others similarly situated, is carried out in an unconstitutional and illegal manner. Consequently, this suit does not come within the illegal exaction provision of the Constitution of Arkansas, and the Chancellor erred in certifying it as a class action coming within that provision.

Subsequently, in Martin v. Couey Chrysler Plymouth, Inc., 308 Ark. 325, 824 S.W.2d 832 (1992), we held that when the legality of the underlying tax act was not in issue, but only the correctness of the person assessed, the complaint did not state a cause of action for an illegal exaction.

In this case the taxpayer does not challenge the validity of the underlying tax; therefore, the chancellor correctly ruled that the complaint did not state a cause of action for an illegal exaction. The taxpayer’s relief is that which is provided by Ark. Code Ann. §§ 26-18-405 & 28-18-406 (1987), and not a suit for illegal exaction.

Affirmed.