author: Robert L. Brown, Justice. Annabelle Clinton Imber, Justce,

text:
    STATE of Arkansas v. CIRCUIT COURT OF LINCOLN COUNTY
    CR 98-855
    984 S.W.2d 412
    Supreme Court of Arkansas
    Opinion delivered January 21, 1999

      Winston Bryant, Att’y Gen., by: O. Milton Fine II, Special Deputy Prosecuting Att’y, Eleventh Judicial Circuit — West, for petitioner.

      Sam T. Heuer, for Murray F. Armstrong.
    Robert L. Brown, Justice.
   Robert L. Brown, Justice.

The State of Arkansas, as petitioner, prays ice. court grant its petition for a writ of prohibition or, alternatively, writ of certiorari, directing the Circuit Court of Lincoln County to dismiss Murray Armstrong’s petition for Rule 37 relief. We grant the petition and direct that the writ of prohibition be issued.

Murray Armstrong was charged with multiple counts of theft of property and forgery in Lincoln, Bradley, and Cleveland Counties. Each county is part of a separate judicial district. Lincoln County is part of the Eleventh Judicial District West, Bradley County is part of the Tenth Judicial District, and Cleveland County is located in the Thirteenth Judicial District. On June 11, 1997, the State through the prosecutor of the Eleventh Judicial District West and Armstrong moved to transfer the charges filed against Armstrong in Lincoln County Circuit Court to Cleveland County Circuit Court in the Thirteenth Judicial District. This motion to transfer was apparently filed pursuant to Ark. R. Crim. P. 28.4, though that rule is not specifically cited. An order granting the transfer of the Lincoln County charges was entered that same date by Special Judge John Cole, who had been assigned to the Lincoln County Circuit Court after the regular judges recused.

On June 12, 1997, Armstrong and the prosecuting attorneys for the Tenth, Eleventh West, and Thirteenth Judicial Districts executed a Statement of Plea wherein Armstrong acknowledged that he faced twenty-two counts of theft of property in Lincoln County. As part of the Statement of Plea, Armstrong specifically waived speedy-trial considerations for the charges filed in the three circuit courts in the three judicial districts. With respect to the twenty-two counts filed in Lincoln County, Armstrong pled guilty to seventeen counts, and five counts were nolle pressed by the prosecuting attorney.

On August 5, 1997, a judgment and commitment order was entered by the Cleveland County Circuit Court for the Lincoln County charges. That judgment noted a “change of venue” from Lincoln County to Cleveland County and provided for a sentence for all offenses of 1020 months. On October 14, 1997, Armstrong filed separate petitions for Rule 37 relief in Lincoln, Cleveland, and Bradley Counties. One of the grounds for relief asserted in the Rule 37 petition filed in Lincoln County Circuit Court is that the Cleveland County Circuit Court did not have jurisdiction to impose a sentence for charges emanating from Lincoln County because that county is outside the territorial boundaries of the Thirteenth Judicial District. As a result, Armstrong prayed that the Lincoln County convictions be set aside and vacated.

On June 19, 1998, the State moved to dismiss the Rule 37 petition filed in Lincoln County Circuit Court for the reason that that court neither convicted nor sentenced Armstrong and, thus, lacked jurisdiction over the petition for postconviction relief. The motion was denied by Special Judge Cole on July 7, 1998. On July 14, 1998, the State filed a petition for writ of prohibition, or, alternatively, certiorari, in which it contended that under Ark. R. Crim. P. 37.1(d), a person seeking Rule 37 relief may only do so by filing a petition “[i]n the court which imposed the sentence.” It is that petition which we now consider in this opinion.

A writ of prohibition is extraordinary relief which is appropriate only when the trial court is wholly without jurisdiction. Henderson Specialties, Inc. v. Boone County Circuit Court, 334 Ark. 111, 971 S.W.2d 234 (1998); Nucor Holding Co. v. Rinkines, 326 Ark. 217, 931 S.W.2d 426 (1996). The writ is appropriate only when there is no other remedy, such as an appeal, available. Henderson Specialties, Inc. v. Boone County Circuit Court, supra; West Memphis Sch. Dist. No. 4 v. Circuit Court, 316 Ark. 290, 871 S.W.2d 368 (1994) (quoting National Sec. Fire & Cas. Co. v. Poskey, 309 Ark. 206, 828 S.W.2d 836 (1992)). When deciding whether prohibition will fie, we confine our review to the pleadings in the case. The Wise Company, Inc. v. Clay Circuit, 315 Ark. 333, 869 S.W.2d 6 (1993).

Jurisdiction is the power of the court to hear and determine the subject matter in controversy between the parties. State v. Watson, 307 Ark. 333, 820 S.W.2d 59 (1991). Here, the question raised is whether Lincoln County Circuit Court, which was not the sentencing court, has jurisdiction to decide a Rule 37 petition for postconviction relief. We conclude that it does not.

The controlling rule is Ark. R. Crim. P. 37.1(d), which reads:

A petitioner in custody under sentence of a circuit court claiming a right to be released, . . . or . . .
(d) that the sentence is otherwise subject to collateral attack; may file a verified petition in the court which imposed the sentence, praying that the sentence be vacated or corrected. (Emphasis added.)

The Rule 37 petition in the instant case manifestly was not filed in the sentencing court. We view this as a fact not in dispute. As described above, the Lincoln County charges were transferred to Cleveland County Circuit Court, which sentenced Armstrong on those charges and entered judgment against him. Filing the petition in Lincoln County Circuit Court violates the clear terms of the Rule, and we hold that that court, not being the sentencing court, is wholly without jurisdiction to hear and decide the matter.

Furthermore, we consider the requirement of Rule 37.1(d) that the sentencing court hear petitions for postconviction relief to make perfect sense. It is the sentencing court that is familiar with the history of the case and the proceedings that resulted in the conviction and sentence. Accordingly, that is the court which should be deciding postconviction petitions.

Armstrong claims, however, that a writ of prohibition cannot lie following the denial of a motion to dismiss. We give this argument little credence. To be sure, a writ of prohibition is not the proper remedy for appealing the issue of whether a trial court erred in denying a motion to dismiss. See West Memphis Sch. Dist. No. 4 v. Circuit Court, supra. But the writ is always appropriate when a trial court is operating wholly without jurisdiction to do so.

In sum, the Judgment and Commitment Order for the Lincoln County charges was entered by the Cleveland County Circuit Court. That court, according to the judgment, was the sentencing court — not the Lincoln County Circuit Court — and that decides the jurisdictional issue.

Armstrong goes farther, though, and contests whether the Cleveland County Circuit Court in the Thirteenth Judicial District had subject-matter jurisdiction to hear the Lincoln County charges under the Arkansas Constitution, state statutes, and this court’s caselaw, despite his waiver of venue. Fie makes a valid point about a circuit court’s doubtful jurisdiction over charges filed outside of the territorial boundaries of the court’s judicial district. See Ark. Const, art. 2, § 10; Ark. Code Ann. § 16 — 13— 210 (1987); Waddle v. Sargent, 313 Ark. 539, 855 S.W.2d 919 (1993). See also Kemp v. State, 324 Ark. 178, 919 S.W.2d 943 (1996); Davis v. Reed, 316 Ark. 575, 873 S.W.2d 524 (1994). But his argument does not really assist him in withstanding the prohibition petition.

Article 2, section 10, of the Arkansas Constitution provides that:

In all criminal prosecutions the accused shall enjoy the right to a speedy and public trial by an impartial jury of the county in which the crime shall have been committed; provided that the venue may be changed to any other county of the judicial district in which the indictment is found ....

Ark. Const, art. 2, § 10. State statutes are in a similar vein. See, e.g., Ark. Code Ann. § 16-13-210 (1987). Section 16-13-210 provides that a circuit judge who is “physically present in the geographical area of the judicial district which he serves as judge” may adjudicate any matter over which he or she presides.

This court has held that disposition of á criminal charge which occurs outside the territorial boundaries of the judicial district in which the charge was brought is void. See, e.g., Waddle v. Sargent, supra. In Waddle, the defendant was charged in Faulkner County Circuit Court with rape and capital murder. Faulkner County is located in the Twentieth Judicial District. After the judge for that circuit court disqualified from the case, a special judge from the Eleventh Judicial District was assigned to hear the case. A plea hearing, where the defendant pled guilty, was then conducted in Arkansas County which was located in the Eleventh Judicial District. The judge sentenced the defendant to life in prison. In deciding the jurisdictional question, we first observed that we have consistently held that a circuit judge may only act in a criminal case when that judge is “within the geographical area of the judicial district in which the charge is filed.” Id. at 542, 855 S.W.2d at 920. We went on to say that while a defendant in a criminal case may waive venue within the territorial boundaries of a judicial district, a defendant may not do so where charges have been filed in a county outside of those boundaries. We held that such an extraterritorial order by a circuit judge in a criminal case was void, and that jurisdiction for such an order could not be waived or conferred by consent.

Similarly, in Kemp v. State, supra, we noted that if the allegation of a charging instrument is that the offense occurred outside the territorial boundaries of the court, then a judgment rendered by that court would be void, because a criminal trial must be held in the county in which the crime was committed. We added that upon the request of the accused, venue may be changed, but only to another county within the judicial district in which the indictment is filed. See also Davis v. Reed, supra.

From the Arkansas Constitution, state statutes, and this line of cases, it is clear that any judgment by a circuit court outside of the judicial district where the charges are filed is void. Furthermore, this lack of jurisdiction, unlike venue within a judicial district, cannot be waived. Thus, if the Cleveland County Circuit Court’s judgment is void vis-á-vis the Lincoln County charges, there was no conviction or sentence in Cleveland County Circuit Court regarding the Lincoln County charges. It appears elementary to us and beyond serious dispute that postconviction relief is unavailable when the judgment of conviction and sentence at issue is void. Though not the rationale posited by the State, this appears to be another valid reason to grant the petition for prohibition. The effect of our decision today on the viability of the Lincoln County charges is not before us, and we do not reach that issue. We do observe, however, that in the Statement of Plea relative to the Lincoln County charges that Armstrong waived all speedy-trial considerations concerning those charges.

As a final point, we emphasize that the Cleveland County Circuit Court’s judgment regarding the Cleveland County charges is not affected by this decision.

Petition for writ of prohibition granted.

Imber and Smith, JJ., concur.

Annabelle Clinton Imber, Justce,

concurring. I agree ice, majority’s holding that the Lincoln County Circuit Court, not being the sentencing court, is wholly without jurisdiction to hear and decide Mr. Armstrong’s Rule 37 petition for postconviction relief under the clear terms of that Rule. Nothing more need be said. However, the majority goes on to address Mr. Armstrong’s contention that the Cleveland County-Circuit Court in the Thirteenth Judicial District did not have subject-matter jurisdiction to hear the Lincoln County charges under the Arkansas Constitution, state statutes, and this court’s case law.

I do not believe that it is necessary to address this contention in order to resolve the issue presented by the State’s petition for writ of prohibition, that is whether the Lincoln County Circuit Court has jurisdiction to hear and decide Mr. Armstrong’s Rule 37 petition. Whether or not the Cleveland County Circuit Court had subject-matter jurisdiction to hear the Lincoln County charges has no impact on our decision in this matter. If we were to conclude that the Cleveland County Circuit Court had jurisdiction to hear the Lincoln County charges, then the Cleveland County Circuit Court would be the sentencing court under Rule 37.

On the other hand, if we were to conclude that Cleveland County Circuit had no such jurisdiction, as the majority suggests, there would be no sentencing court for the Lincoln County charges. In either event, the Lincoln County Circuit Court has no jurisdiction to hear and decide Mr. Armstrong’s Rule 37 petition. Furthermore, by addressing Mr. Armstrong’s contention that the Cleveland County Circuit Court lacked subject-matter jurisdiction to hear the Lincoln County charges, the majority prematurely decides the merits of his Rule 37 petition. We should refrain from going beyond the State’s petition for a writ of prohibition against the Lincoln County Circuit Court.

For these reasons, I concur with the majority in granting the petition for writ of prohibition under the express terms of Rule 37, but I do not join in the majority’s unnecessary and premature resolution of the Cleveland County Circuit Court’s jurisdiction to hear the Lincoln County charges.

Smith, J., joins in this concurrence.

       Because the State’s petition for prohibition is only directed to the Lincoln County Circuit Court, we need not discuss the facts surrounding the Bradley County charges.


source: Caselaw Access Project

author: Annabelle Clinton Imber, Justice.

license: Public Domain

text:
    NIGHT CLUBS, INC. v. FORT SMITH PLANNING COMMISSION, et al.

    98-165
    984 S.W.2d 418
    Supreme Court of Arkansas
    Opinion delivered January 21, 1999

      Eddie N. Christian Jr., for appellant.

      Bassett Law Firm, by; Gary V. Weeks and James M. Graves, for appellees.
   Annabelle Clinton Imber, Justice.

This is an appeal Annabelle Clinton Imber, Justice. e. dismissing the appeal by appellant, Night Clubs, Inc., d/b/a Regina’s House of Dolls, II., (Regina’s II), due to lack of subject-matter jurisdiction. We affirm.

On March 20, 1997, Regina’s II filed a Business Registration Application with the City of Fort Smith to open a nightclub at 7000 Highway 71 South in Fort Smith, Arkansas. The Fort Smith Planning Commission approved the Business Registration Application and assigned a zoning classification of Commercial-5 to the proposed business use by Regina’s II. On April 1, 1997, Regina’s II requested approval from the City of Fort Smith to open a nude-dancing establishment at the same location. Mr. William Harding, Director of Planning, determined that nude dancing was not listed as a use in Fort Smith’s zoning ordinances. Pursuant to section 27-97 of the Fort Smith Municipal Code, Mr. Harding decided that the unlisted use proposed by Regina’s II should be assigned a zoning classification of Commercial-5-SPL-D. At the time of this decision, only one site in the City of Fort Smith was zoned Commercial-5-SPL-D. Regina’s II appealed the Planning Director’s decision to the full Planning Commission pursuant to section 27-97(3) of the Fort Smith Municipal Code. A hearing was held on May 13, 1997. At the conclusion of the hearing, the Planning Commission voted unanimously to uphold Mr. Harding’s decision that the proposed use was unlisted and that the proposed use should only be allowed on premises zoned Commercial-5-SPL-D.

On June 12, 1997, Regina’s II filed a complaint against the Planning Commission, its members, and the City of Fort Smith in the Sebastian County Circuit Court pursuant to the Fort Smith Municipal Code § 27-97 and Ark. Code Ann. §14-56-425 (Repl. 1998). The complaint appealed the Planning Commission’s May 13, 1997 decision. However, no record of the Planning Commission’s proceedings was filed with the circuit court. On September 16, 1997, the Planning Commission filed a motion for summary judgment, alleging in part that the circuit court lackéd jurisdiction to hear the zoning appeal because Regina’s II failed to perfect its appeal in the manner required by Ark. Code Ann. § 14-56-425. This motion was treated as a motion to dismiss, pursuant to Rule 12(h)(3) of the Arkansas Rules of Civil Procedure. On October 15, 1997, the circuit court granted the Planning Commission’s motion to dismiss. Regina’s II now appeals the circuit court’s decision on the grounds that Ark. Code Ann. § 14-56-425 is unconstitutionally vague because it fails to give adequate notice of the proper procedure for perfecting an appeal from the Planning Commission’s decision.

A review of a challenge to the constitutionality of a statute begins with the principle that statutes are always presumed to be constitutional and the burden of proving otherwise is upon the party challenging the statute. Jones v. State, 333 Ark. 208, 969 S.W.2d 618 (1998); State v. Torres, 309 Ark. 422, 831 S.W.2d 903 (1992). We must construe a statute as constitutional if it is possible to do so. Jones, supra.

Regina’s II filed its appeal from the Planning Commission pursuant to section 27-97 of the Fort Smith Municipal Code and Ark. Code Ann. § 14-56-425. Section 27-97(5) provides: “The decision of the Planning Commission on the appropriate zone of a new use may be appealed to the Court of the appropriate jurisdiction.” Arkansas Code Annotated § 14-56-425, entitled “Appeals to Circuit Court,” further provides:

In addition to any remedy provided by law, appeals from final action taken by the administrative and quasi judicial agencies concerned in the administration of this subchapter may be taken to the circuit court of the appropriate county where they shall be tried de novo according to the same procedure which applies to appeals in civil actions from decisions of inferior courts, including the right of trial by jury.

Regina’s II suggests that section 14-56-425 does not require that the appeal from the Planning Commission be perfected according to the same procedure that applies to appeals from decisions of inferior courts; but, rather, merely provides that a de novo standard of review be applied by the circuit court. Thus, Regina’s II argues that section 14-56-425 is void for vagueness because it does not provide potential appellants with adequate notice as to what procedures must be followed to perfect their appeal.

A law is unconstitutionally vague under due process standards if it does not give a person of ordinary intelligence fair notice of what is prohibited. Craft v. City of Fort Smith, 335 Ark. 417, 984 S.W.2d 22 (1998). A statute will pass constitutional scrutiny if the language conveys sufficient warning when measured by common understanding and practice. Jones, supra; Dougan v. State, 322 Ark. 384, 912 S.W.2d 400 (1995).

We previously interpreted the requirements of Ark. Code Ann. § 14-56-425 in Board of Zoning Adjustment v. Cheek, 328 Ark. 18, 942 S.W.2d 821 (1997). There we held that section 14-56-425 incorporates the appeal procedure found in Inferior Court Rules 8 and 9. Id. In particular, Rule 9 provides:

(a) Time for Taking Appeal. All appeals in civil cases from inferior courts to circuit court must be filed in the office of the clerk of the particular circuit court having jurisdiction of the appeal within thirty (30) days from the date of the entry of judgment.
(b) How Taken. An appeal from an inferior court to the circuit court shall be taken by filing a record of the proceedings had in the inferior court. It shall be the duty of such clerk to prepare and certify such record when requested by the appellant and upon payment of any fees authorized by law therefor. The appellant shall have the responsibility of filing such record in the office of the circuit clerk.
(c) When the clerk of the inferior court, or the court in the absence of a clerk, neglects or refuses to prepare and certify a record for filing in the circuit court, the person desiring an appeal may perfect his appeal on or before the 30th day from the date of the entry of the judgment in the inferior court by filing an affidavit in the office of the circuit court clerk showing that he has requested the clerk of the inferior court or the inferior court to prepare and certify the record thereof for purposes of appeal and that the clerk or the court has neglected to prepare and certify such record for purposes of appeal.

In Cheek, we construed the words “inferior court” as used in Rule 9 to include the Board of Zoning Adjustment, which is similar to the Planning Commission in this case. Id. We then held that the circuit court never acquired jurisdiction over the appeal because Cheek failed to properly perfect his appeal pursuant to Rule 9. Id. Specifically, Cheek failed to file in the circuit court: 1) a record of the Board’s proceedings; or 2) an affidavit stating that he had requested a record but the Board had neglected to prepare and certify it. Id.

It is clear that a statute is not void-for-vagueness where its terms may be adequately determined through reference to judicial decisions construing it. See State v. Torres, 309 Ark. 422, 831 S.W.2d 903 (1992); Carter v. State, 225 Ark. 225, 500 S.W.2d 368 (1973). We have also said that any interpretation of a statute by this court subsequently becomes a part of the statute itself. See Burns v. Burns, 312 Ark. 61, 847 S.W.2d 23 (1993).

Cheek clearly construes Ark. Code Ann. § 14-56-425 to require compliance with Rules 8 and 9 of our Inferior Court Rules in order to perfect an appeal to the circuit court. The statute, therefore, cannot be void for vagueness as its requirements may be adequately determined by reference to the Cheek decision. Further, Cheek was decided on April 7, 1997, and Regina’s II hearing before the full Planning Commission was held on May 13, 1997. Thus, at the time the Planning Commission upheld the zoning classification, the interpretation of section 14-56-425, as articulated in Cheek, had become a part of the statute.

Regina’s II also asserts that our language in Cheek reflects an awareness of vagueness in the statute. Specifically, Regina’s II notes our reference to a “murky area caused by section 14-56-425.” Plowever, a careful reading of Cheek reveals that we were referring to terms such as “entry of judgment” and “court clerk,” which are used in the Inferior Court Rules but do not normally apply to actions taken by administrative agencies, boards, or commissions. Nonetheless, in Cheek, we were resolute in deciding that the circuit court had no authority to hear the appeal because Cheek filed to file in the circuit court either a record of the board’s proceedings or an affidavit reflecting a request for such a record.

Therefore, we hold that Ark. Code Ann. § 14-56-425 is not unconstitutionally vague under due process standards because we have previously construed that statutory provision to require compliance with the appeal procedure set forth in Rules 8 and 9 of our Inferior Court Rules. Regina’s II failed to file with the circuit court either a record of the Planning Commission’s proceedings, or an affidavit reflecting a request for such a record. Thus, we also hold, as we did in Cheek, that Regina’s II failed to perfect its appeal in the manner provided by Inferior Court Rule 9, and we affirm the circuit court’s dismissal of the appeal.

Affirmed.


author: W.H. “Dub” Arnold, Chief Justice. Tom Glaze, Justice,

text:
    COOPER COMMUNITIES, INC., et al. v. The CIRCUIT COURT of BENTON COUNTY, et al.

    98-1004
    984 S.W.2d 429
    Supreme Court of Arkansas
    Opinion delivered January 28, 1999

      Howard L. Slinkard, P.A., by. Howard L. Slinkard and Pat Moran, for petitioners.
    No response.
   W.H. “Dub” Arnold, Chief Justice.

On August 17, 1998, petitioners, Cooper Communities, Inc., and Jan L. Seth and Judith F. Seth, co-trustees of the Family Trust of Jan L. Seth and Judith F. Seth, filed a petition for writ of certiorari, requesting that we quash the Benton County Circuit Court’s order dismissing the petitioners’ case and order the circuit court to proceed with a trial de novo. In support of their position, the petitioners argue that the circuit court was wholly without jurisdiction to dismiss the case and that a writ of certiorari is the only available remedy to cure the circuit court’s erroneous exercise of jurisdiction. We disagree, and we deny the petition for writ of certiorari.

In October 1993, Cooper Communities filed a petition in the Benton County Court seeking the establishment of a private road crossing through the respondents’ property and onto Cooper Communities’ land-locked property. After conducting hearings, the county court issued a final order, in October 1995, creating a permanent thirty-foot right-of-way across the respondents’ property. Subsequently, on December 11, 1995, the respondents, as owners of property crossed by the right-of-way, appealed the county court’s decision to the Benton County Circuit Court.

Also in December of 1995, Cooper Communities conveyed its interest in its formerly land-locked tract and its right-of-access via the permanent right-of-way, to Jan L. Seth and Judith Seth, as co-trustees of the Family Trust of Jan L. Seth and Judith F. Seth. As a result of the transfer, Cooper Communities filed a motion in the circuit court to either substitute or join the Seth Family Trust as a party in the case. In June of 1996, the circuit court granted Cooper Communities’ motion and joined the Trust as a party.

Following the circuit court’s decision to join the Trust as a new party, respondents Mikel D. Lott and Luyen Lott challenged the joinder and, in December 1996, filed a petition for a writ of prohibition in this court. Specifically, the Lotts claimed that the joinder deprived the circuit court of jurisdiction because the claim before it was no longer the same as the one tried by the county court. In our May 27, 1997, opinion, Lott v. Circuit Court, 328 Ark. 596, 945 S.W.2d 922 (1997), we held that a substitution of the real party in interest, upon a transfer of interest, is permitted as a procedural matter pursuant to Ark. R. Civ. P. 17(a) and 25(c). Further, we noted that there was no assertion that the claim had increased or that it differed from the original claim in any way or that the circuit court would be required to consider any new pleadings. Moreover, we found that there was no evidence demonstrating that the circuit court was wholly without jurisdiction. Accordingly, we denied the writ of prohibition. Id. at 599.

However, in dicta in Lott, we noted that if the circuit court ultimately found that the joinder of the Trust “in some way makes the claim different” than the one presented by Cooper Communities to the county court, then the circuit court could “take appropriate action.” Lott, 328 Ark. at 599. From such a decision, whether or not the circuit court reached the merits of the case, we suggested that an appeal would presumably He. Id. On September 23, 1997, after the case returned to the circuit court, the circuit court granted a motion to transfer the case back to the county court and noted with emphasis the precise language in Lott permitting it to “take appropriate action” if it found that joinder “in some way makes the claim different.” Notably, the petitioners failed to appeal from the circuit court’s decision granting the transfer, and, on May 8, 1998, the petitioners participated in hearings before the county court.

Following the May 8, 1998, hearing, the county court issued a letter order on May 22, 1998, concluding that the Trust made no claims different from the original claim, presented by Cooper Communities in the original county court case, and that the location and route of the road selected and laid out in the previous county court case was the most feasible route onto the land-locked property. Although the county court adopted the location and route of the right-of-way as laid out in the prior case, it specifically reserved the question of damages for the taking of the land until it heard testimony at a hearing scheduled for July 14, 1998. The county court also noted that its final order, reflecting all findings, would be entered following the July 14th hearing.

The scheduled July 14, 1998, hearing never took place because the petitioners precipitously filed a motion in the circuit court on May 27, 1998, requesting that the circuit court adopt the findings made by the county court in its May 22, 1998, letter order. On June 16, 1998, in a bench ruling, the circuit court denied the motion to adopt the county court’s findings and noted that the case had been terminated upon its transfer to county court. Additionally, on June 30, 1998, the circuit court issued an order of dismissal. From this order of dismissal comes the instant petition for writ of certiorari.

A writ of certiorari is an extraordinary writ that can only be granted when the petitioner is clearly entitled to relief and there is no other adequate remedy at law. This court will grant a writ of certiorari only when there is a lack of jurisdiction, an act in excess of jurisdiction on the face of the record, or the proceedings are erroneous on the face of the record. Although certiorari is not available to control judicial discretion, we will grant it to control plain, manifest, clear, great, or gross abuse of discretion. See Fulkerson v. Thompson, 334 Ark. 317, 974 S.W.2d 451 (1998) (per curiam).

Flere, we deny the petition because the petitioners failed to avail themselves of other adequate remedies at law. Specifically, the petitioners failed to appeal from the circuit court’s September 23, 1997, final order granting the transfer back to county court. See Batesville v. Ball, 100 Ark. 496, 500-01, 140 S.W. 712 (1911). Also, rather than awaiting the scheduled July 14, 1998, county court hearing resolving damages and rather than awaiting a final county court order, the petitioners returned to circuit court, urging it to adopt the county court’s findings. Should the petitioners have awaited a final county court order, mindful that (1) the county court hearing resulted in a letter order in their favor, and (2) the May 22, 1998, letter order was not a final order, they could have appealed to the circuit court at the appropriate time. However, these are not the facts in the record before us. Moreover, because the petitioners prematurely approached the circuit court, the issue of damages had not yet been reached by the county court and could not be heard in the first instance by the circuit court. We cannot grant an extraordinary writ when the petitioners failed to pursue other adequate remedies at law and are responsible for the “procedural morass” of which they now complain.

However, we note that the circuit court erred in entering an order of dismissal. As of September 23, 1997, the circuit court lost jurisdiction over the case and could not, therefore, subsequently dismiss the case on June 30, 1998. Accordingly, although we agree that the circuit court lacked jurisdiction to “dismiss” a case previously transferred, in light of the petitioners’ failure to properly pursue an appeal from the circuit court’s final order or from the county court to the circuit court, we deny the petition for writ of certiorari.

Glaze and Thornton, JJ., dissent.

Smith, J., not participating.

Tom Glaze, Justice,

dissenting. I respectfully dissent. In reaching ce, decision, the majority court cites Fulkerson v. Thompson, 334 Ark. 317, 974 S.W.2d 451 (1998), but then misapplies that case’s holding. In Fulkerson, we reiterated the established rule that whatever is before the supreme court and disposed of in the exercise of its appellate jurisdiction must be considered settled, and the lower court must carry that judgment into execution according to its mandate. The Fulkerson holding further cited Carroll Elec. Coop. v. Benson, 319 Ark. 68, 889 S.W.2d 756 (1994), for the proposition that a trial court has no power to change or extend the mandate of the supreme court.

In this court’s first decision involving Cooper Communities, Inc., Jan and Judith Seth, co-trustees of the Seth Family Trust, and Mikel and Luyen Lott, we held the circuit court had jurisdiction of this case. Lott v. Circuit Ct., 328 Ark. 596, 945 S.W.2d 922 (1997) (Lott I). This court said that, on appeal from the [Benton] county court, the [Benton County] circuit court must try the case de novo. This court concluded further as follows:

If, however, it turns out that joinder of the Seth Family Trust in some way makes the claim different from the one presented by Cooper Communities to the county court, theii the circuit court can take appropriate action. From its [circuit court’s] decision, whether or not it reaches the merits of the case, an appeal presumably will lie. (Emphasis added.)

In the instant case, the circuit court did not try the case de novo, nor did it determine whether the joinder of the Seth Family Trust in some way made the claim different from the one presented by Cooper Communities. Instead, the circuit court erroneously sent the case to the Benton County Court to make that decision. In sum, this court’s decision in Lott I made it clear that the circuit court must determine whether the Seth Family Trust’s joinder changed Cooper Communities’ original claim, and regardless of how the trial court decided the issue, the circuit court’s decision, whether it reaches the merits or not, could presumably be appealed.

The majority opinion is further mistaken when it suggests Cooper Communities and the Seth Family Trust should have appealed the circuit court’s decision to return the case to the Benton County Court. The circuit court’s order transferring the case to the county court is not a final order or one that can be appealed under Ark. R. Civ. P. 2. This court has held on numerous occasions that an order that contemplates further action by a party or the court is not a final, appealable order. Payne v. State, 333 Ark. 154, 968 S.W.2d 59 (1998). Flere, the circuit court’s order merely returned this case to the county court for that court to determine if the joinder of the Seth Family Trust made the case different from the one earlier presented to the county court by Cooper Communities. That decision was for the circuit court to make and remanding this case has only delayed it. In short, the circuit court’s remand order was not intended to end this litigation, but instead contemplated further action by the parties.

Even if Cooper Communities could be said to have had a right to appeal the circuit court’s transfer order, the remedy was not an adequate one. It had already prevailed in one appeal, and should not have been forced to appeal on an issue that had already been decided in Lott I. Cooper Communities is, in my view, entitled to the use of a writ of certiorari to obtain its relief. In fact, it is these type circumstances where extraordinary relief is necessary.

The circuit court’s failure to follow this court’s mandate in Lott I has caused this case to be retried in the Benton County Court and will necessitate yet another appeal to the Benton County Circuit Court for a de novo trial. If this case had been decided by the circuit court in compliance with this court’s earlier mandate, this case undoubtedly would by now have been tried and decided by the circuit court. In fact, enough time has passed that the case likely could have been decided by this court on appeal.

For the reasons above, I would, in accord with Fulkerson, hold that the circuit court had no power to transfer this case to the county court, and direct the circuit court to comply with the mandate and decision rendered by this court in Lott I.

Thornton, J., joins this dissent.

       About eight months later, the county judge found the joinder of the Seth Family Trust made no difference in Cooper Communities’ original claim.


author: Tom Glaze, Justice.

text:
    CARDINAL FREIGHT CARRIERS, INC., et al. v. J.B. HUNT TRANSPORT SERVICES, INC., and J.B. Hunt Logistics, Inc.
    98-917
    987 S.W.2d 642
    Supreme Court of Arkansas
    Opinion delivered January 28, 1999

      Morris, Manning & Martin, L.L.P., by: Jefferson D. Kirby III and Ann R. Schildhammer and Conner & Winters, P.L.L.C., by: John R. Elrod and Ruth Ann Wisener, for appellants.

      Shemin Law Firm, by: Kenneth R. Shemin and Bassett Law Firm, by: Woody Bassett, for appellees.
   Tom Glaze, Justice.

This case involves a significant issue regarding ce. construction of the Arkansas Trade Secrets Act, compiled in Ark. Code Ann. §§ 4-75-601 — 4-75-607 (Repl. 1996). This litigation arises out of a controversy over a confidential agreement that a number of managerial or key employees, appellant-employees herein, signed when going to work with appellees J.B. Hunt Transport Services, Inc. and J.B. Hunt Logistics, Inc. (hereafter referred to as Hunt). The confidential agreement did not include a non-competition provision.

In 1991, appellant Thomas Hostetler was hired by Hunt to build its dedicated contract services division, which was to provide customized transportation and distribution systems for companies that outsource private trucking fleets. Appellant Vincent McLoughlin and other appellant-employees had been hired by Hunt directly from Ryder, a Hunt competitor. McLoughlin and Hostetler were responsible for building the new division, which turned out to be successful. Hostetler and McLoughlin were offered and given a bonus plan when they went to work with Hunt, but that plan was subsequently terminated in 1995. An alternate bonus plan was offered by Hunt, but the new plan did not satisfy the appellants. In July of 1997, appellant-employees resigned their jobs with Hunt and accepted employment with appellants Cardinal Freight Carriers and Cardinal Logistics Management, Inc. (hereafter Cardinal).

In September 1997, Hunt filed suit in chancery court, seeking injunctive relief and claiming the appellants had violated the Arkansas Trade Secrets Act. Hunt asserted that it had been irreparably damaged, that it had no adequate remedy at law, and that the appellants’ use of Hunt’s confidential information would affect the goodwill of its customers and its goodwill in the marketplace generally. The chancellor found that Hunt had a valid interest protected by its confidential agreement and that Cardinal had no compunction against using or disclosing such confidential information to gain an unfair competitive advantage. The chancellor enjoined Cardinal and the other appellants from conducting any new business with four of Hunt’s customers — Home Depot, Office Depot, Georgia Pacific, and Auto Zone. The injunction expired on July 15, 1998, one year after the appellants, former Hunt employees, resigned and went to work for Cardinal. Appellants raise four points for reversal.

Appellants first contend the chancellor wrongfully created a non-competition agreement between the parties when, although the confidentiality agreement signed by appellants did not contain a non-compete clause, the chancellor issued an injunction. We resolved this issue in Allen v. Johar, Inc., 308 Ark. 45, 823 S.W.2d 824 (1992), where Johar alleged its former employee Allen had used confidential information (the design and process of Johar’s machines and customer lists) when contacting Johar’s customers, and the chancellor enjoined Allen’s use of that information because it was protected by the Arkansas Trade Secret Law. This court determined that a non-competition agreement was not a prerequisite for the enjoinment of Allen. As we said in Johar, the actual or threatened misappropriation of a trade secret may be enjoined under § 4-75-604; the injunction shall be terminated when the trade secret has ceased to exist or after an additional reasonable period of time in order to efiminate a commercial advantage that otherwise would be derived from the misappropriation. In permitting the issuance of an injunction in these circumstances, the Johar decision is also conceptually consistent with this court’s acknowledged rule in Hyde Vending Co. v. Wayne Poultry, 252 Ark. 355, 479 S.W.2d 250 (1972). There the court stated that, where the case is one in which the negative remedy by injunction will do substantial justice between the parties by compelling the defendant to carry out his contract or lose all benefit of the breach, the remedy at law is inadequate, and there is no reason or policy against it, the court will interfere to restrain conduct which is contrary to the contract, although it may be unable to enforce specific performance of it. See also Pepsico, Inc. v. Redmond, 54 F.3d 1262 (7th Cir. 1995) (court upheld the enjoinment of Pepsico’s former managerial employee from assuming duties with competitor, based on that employee’s knowledge of Pepsico’s trade secrets and confidential information).

Appellants’ real issue centers on whether Hunt’s confidential agreement covered a protected trade secret as that term is defined by Arkansas’s Act. Under the Act, trade secret is broadly defined to mean “information, including a formula, pattern, compilation, program, device, method, technique, or process, that: (A) Derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use; and (B) Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.” Ark. Code Ann. § 4-75-601(4) (Repl. 1996).

When the appellant-employees were hired by Hunt, they executed confidentiality agreements that read as follows:

Employee has . . . been employed by Company to perform certain functions for Company in connection with the development and distribution of Company’s services and recognizes and acknowledges the proprietary nature of information received by Employee form [sic] Company about the latter’s method of operation, distribution of services and customers.
It is understood and agreed that all details, instructions, lists, computer programs and other work product developed in connection with Employee’s work are at all times the property of Company exclusively. Employee will not copy or reproduce in any way any details, instructions, lists, computer programs or other work product prepared by Employee or prepared by any other employees of Company.
Employee recognizes . . . that, by reason of Employee’s employment with Company, Employee will acquire information concerning company methods, processes, operations, marketing programs, computer programs, future plans and customers, and that such information (hereafter referred to as “Confidential Information”) is a valuable asset of Company and affects the effective and successful conduct of Company’s business. If known to Company’s competitors, such Confidential Information would give such competitors a competitive advantage.
Employee agrees . . . that during the term of employment, and for a period of one year thereafter, Employee will not discuss, disclose, describe or reproduce in any manner Confidential Information of the Company. It is further understood that a breach of this provision shall entitle Company, in addition to other legal and equitable remedies available to it, to apply to any court of competent jurisdiction to enjoin any violation of this provision.
* * *
Appellant-employees and Cardinal submit that Hunt failed to identify any protectable trade secrets. In arguing their point, appellants contend further that the information possessed by the former Hunt employees was generally known to others in the trucking industry, or readily ascertainable by proper means. They further assert that Hunt did not take reasonable steps to protect its alleged trade secrets. We must disagree.

First, Hunt identified its trade secrets at trial as follows:

(1) The amount of profit that Hunt made on a contract with particular customers.
(2) Hunt’s margins of profitability utilized in its pricing model. Hunt submitted that the profitability in the industry is not huge, and if a competitor knows what Hunt’s profit margin is regarding a particular customer, that competitor is armed with an unfair advantage. For example, a competitor could knowingly undercut Hunt’s price with a particular customer. In addition, a person with special knowledge of what Hunt pays for fuel, equipment, insurance, and other overhead expenses would allow a competitor to anticipate with greater accuracy what price Hunt would charge a customer.
(3) A customer’s established buying habits with Hunt over a long-term period.
(4) Hunt’s methods of doing business and its processes, operations, marketing programs, computer programs, and future plans. This includes Hunt’s proprietary software in logistics and dedicated contract services.
(5) Hunt’s strategic planning for the future and how Hunt intends to attack certain markets with specific customers.

If any of the foregoing information falls within the definition of a trade secret, that information may be subject to the protection of the Act, assuming of course, the information derives actual or potential independent economic value, is not properly and generally known or readily ascertainable by others who can obtain economic value from its disclosure, and has been the subject of reasonable efforts to maintain its secrecy.

As is related by the plain terms of the confidential agreement signed by the appellant-employees, they agreed that Hunt’s methods, processes, operations, marketing programs, computer programs, future plans, and customers encompass confidential information that would give Hunt’s competitors a competitive advantage. Cardinal, by its president, Derwood Randolph, testified that a company’s customer information should be kept confidential, and the profitability of a particular customer should not be disclosed by company employees to competitors.

The type of confidential information and secrets Hunt seeks to protect here are very much like those found in Pepsico. There, the Seventh Circuit Court of Appeals affirmed a lower court holding wherein Pepsico, a soft-drink manufacturer, sought to prevent its managerial employee from disclosing trade secrets to competitor Quaker Oats Company, and from assuming any duties of Quaker Oats relating to beverage pricing, marketing, and distribution. In Pepsico, the parties never questioned the nature of the trade secrets that Pepsico sought to protect under the Illinois Trade Secrets Act, but we point out the similarity of those trade secrets with the type of confidential information Hunt seeks to protect here. For instance, Pepsico identified its “Strategic Plan,” an annually revised document that contains its company’s plans to compete, its financial goals, and its strategies for manufacturing, production, marketing, packaging, and distribution for the coming three years. Without this information, Pepsico surmised its competitors could not contemplate Pepsico’s next moves. Pepsico also pointed to its annual operating plan as a trade secret, and submitted that such plan included a guide for Pepsico’s financial goals, marketing plans, promotional events, growth expectations, and operational changes for that year. The plan contained “pricing architecture,” which was highly confidential and would be extremely valuable to a competitor. Knowing Pepsico’s pricing architecture would, Pepsico asserted, permit a competitor to underbid Pepsico whenever and wherever the competitor desired. Pepsico offered trade secrets, too, regarding “attack plans” for specific geographical markets and innovations in its selling and delivery systems.

Hunt’s chief executive officer, Kirk Thompson, here similarly testified how Hunt’s trade secrets derived economic value by keeping confidential information bearing on price modeling, customer profit margins, logistics, future plans, and specific market strategies. Obviously, armed with such information, a competitor would have an edge in capturing some significant part of Hunt’s customers and business. In sum, we harbor no doubts that Hunt’s confidential agreements signed by appellant-employees cover secrets of the type that are protected by Arkansas’s Trade Secret Act.

We are also of the opinion that, in the circumstances, Hunt’s trade secrets are the type of information that is not generally known or ascertainable by others who might have an interest in such information, and that Hunt took reasonable steps to maintain the secrecy of the information. Hunt’s CEO Thompson testified that the company’s trade secrets are not readily ascertainable by others outside the company. Thompson said that the confidential agreement Hunt requires employees to sign is one way it assures its trade secrets are not passed to others. It is significant, too, that Hunt’s agreement limits its employees from disclosing Hunt’s information for a period of one year, which seems patently reasonable for the type of trade secrets covered, especially since the terms of Hunt’s customer contracts generally run between one and five years. Thompson also testified that Hunt issues passwords and pass codes to employees who are privy to trade secret information in order to prevent the releasing of such information. Finally, Thompson said that Hunt maintains trade-secret information by the employment of a “loose-lips” policy, which is well known by everyone at Hunt and permits only two Hunt personnel to talk to the media. Cardinal witness Charles W. Clowdis, an independent transportation consultant, countered, indicating his belief that there are no meaningful secrets in the trucking business. He related that a trucking company’s costs can generally be ascertained from a variety of legitimate sources and trade journals. However, Clowdis conceded that the profitability of a customer’s account is information a company would like to keep confidential and would not want “someone else to know.” In other testimony, Clowdis averred such information was “confidential information.” While there was conflicting testimony offered at trial on these matters, we cannot say the trial court erred by finding Hunt had a protected interest under our Trade Secret Act.

Cardinal next argues that the trial court erred in issuing an injunction because as a threshold matter, Hunt failed to show the threat of irreparable harm. As previously mentioned, a court, under the Arkansas Trade Secrets Act, may enjoin the “actual or threatened misappropriation” of a trade secret, § 4-75-604; Johar, 308 Ark. at 47, 823 S.W.2d at 825. See Pepsico, 54 F.3d at 1268 (interpreting the Illinois Trade Secrets Act, which allows an injunction against threatened misappropriation). Section 4-75-601(2)(B) of the Act defines misappropriation in relevant part as a “ [disclosure or use of a trade secret of another without express or implied consent by a person who . . . [a]t the time of disclosure or use, knew or had reason to know that his knowledge of the trade secret was . . . [a] cquired under circumstances giving rise to a duty to maintain its secrecy ... or [d]erived from or through a person who owed a duty to the person seeking relief to maintain its secrecy.” A number of federal cases dealing with trade secrets have held that a plaintiff may prove a claim of trade-secret misappropriation by demonstrating that a defendant’s new employment will inevitably lead him to rely on the plaintiff s trade secrets. See Pepsico, 54 F.3d at 1269; AMP, Inc. v. Fleischhacker, 823 F.2d 1199 (7th Cir. 1987); Teradyne, Inc. v. Clear Communications Corp., 707 F.Supp. 353 (N.D. Ill. 1989). That is the situation now before us.

Cardinal, of course, disagrees by stating that no wrongful disclosure has been shown, and that Hunt could only speculate that the disclosure of confidential information could take place. Cardinal offered testimony that the appellant-employees had not utilized Hunt’s confidential information when contacting Hunt’s customers, and in fact, when appellant-employee Timothy F. Voulopos was asked by Home Depot and Office Depot to review the earlier bid he had prepared when he worked for Hunt, Voulopos said that he declined the invitation. Cardinal asserts that, at most, Hunt’s evidence is circumstantial and weak and fails to show the appellants’ employment with Cardinal would inevitably lead them to use Flunt’s trade secrets. Again, we must disagree.

The trial court found appellant-employees now with Cardinal were servicing the same customers that they had serviced when they were employed by Hunt. The trial court further found that (1) Cardinal’s president said that he would approve telling customers where Cardinal is better than Hunt, and would approve comparing Hunt’s future plans and operational capabilities; and (2) Cardinal or its employees expressed an intention to exploit the holes in Hunt’s program (software). Based on the foregoing findings, the trial court found that Cardinal had no compunction about using or disclosing information covered under Hunt’s confidential agreement to gain an unfair competitive advantage. We believe such evidence and findings are more than sufficient to show a threatened or inevitable misappropriation of Hunt’s trade secrets.

Cardinal and other appellants next contend the clean hands doctrine bars them from obtaining injunctive relief in the circumstances. They complain that Hunt’s following improper acts and conduct should bar Hunt from the relief it seeks:

(1) Hunt’s unilateral termination of Hostetler’s and McLoughlin’s bonus plans.
(2) Hunt’s harassment of some of the appellant-employees concerning their employment decisions and interference with Hunt’s internal communication resources.
(3) Hunt’s failure to pay certain amounts due appellant-employees for wages, accrued vacation time, expense reimbursement, and commissions.
(4) Hunt’s original bad-faith claim (later withdrawn) that appellant-employees should have obtained Hunt’s permission to accept employment with Cardinal.

This court has recognized the principal involved in the “clean hands” maxim to be that equity will not intervene on behalf of a plaintiff whose own conduct in connection with the same matter or transaction has been unconscientious or unjust. Batesville Truck Line, Inc. v. Martin, 219 Ark. 603, 243 S.W.2d 729 (1951). However, if the wrong is shown to be merely collateral to the complainant’s cause of action, it does not constitute a matter of defense. Id. Moreover, the purpose of the maxim is to secure justice and equity, and not to aid one in an effort to acquire property to which he has no right. Id. As pointed out above, we affirmed the trial court’s holding that protects Hunt’s trade secrets and prohibited the appellants’ misappropriation of them. As a consequence, we conclude Cardinal is in no position to invoke the clean hands defense. In any event, Cardinal and appellant-employees raise issues that appear only to be collateral in nature to the action brought against them by Hunt. The trial court was correct in holding the appellants’ clean hands defense had no merit.

Appellants’ final point for reversal is that the trial court erred in failing to require Hunt to post a bond under Ark. R. Civ. P. 65(a)(2) before issuing an injunction, since Cardinal would incur damages from being enjoined from conducting new business with four of its major customers. In Galloway v. Arkansas State Hwy & Transp. Dep’t, 318 Ark. 303, 885 S.W.2d 17 (1994), the court stated that Rule 65(d) clearly provides a court with discretion to require the giving of an adequate security as a condition precedent to the issuance of a preliminary injunction and that discretion is given the trial court in such matters because that court is in the best position to know whether security should be required. Here, the trial court required no security and, all matters considered, Hunt has not been found wrong to have obtained a preliminary injunction. Therefore, we reject appellants’ argument that a bond was required to effectuate the trial court’s injunction.

Imber, J., not participating.

       We note the Johar and Pepsico decisions enjoin former employees from disclosing trade secrets, rather than, the employees’ new company from performing new business with designated customers of the employees’ former company.

       While Randolph candidly conceded the confidentiality of such information, he also strangely added, “I really don’t think it should be discussed with the competition because really what value is it?”

       In an effort to show how Hunt’s information was readily ascertainable, appellants offered evidence that Hunt’s pricing model was similar to Ryder’s, a competitor, and that Hunt had given its pricing model to a client.


text:
    Joe Buck E. EVANS v. HARRY ROBINSON PONTIAC-BUICK, INC., Autobond Acceptance Co., Auto Bond Receivables Trust 1966-C, and First Fidelity Acceptance Corp.
    98-191
    983 S.W.2d 946
    Supreme Court of Arkansas
    Opinion delivered January 28, 1999

      Thurman Ragar, Jr., for appellant.

      Warner, Smith & Harris, PLC, by: Joel D. Johnson, for appellee Harry Robinson Pontiac-Buick, Inc.

      Friday, Eldredge & Clark, by: William A. Waddell, Jr., for appellee Autobond Acceptance Corp.
   Tom Glaze, Justice.

This litigation is a usury case involving . choice-of-law provision in a retail installment contract. The case is before this court upon the grant of summary judgment to three of the defendants, Autobond Acceptance Company, Auto Bond Receivables Trust 1966-C (hereinafter to be collectively referred to as “Autobond”), and First Fidelity Acceptance Corporation (First Fidelity), and the grant of dismissal to the remaining defendant, Harry Robinson Pontiac-Buick, Incorporated (Harry Robinson). The plaintiff, Joe Buck E. Evans, appeals from the order of Sebastian County Chancery Court extending the defendants such relief. Evans presents three arguments for the court’s review. Because we do not find Evans’s arguments to be persuasive, the chancellor’s order is affirmed.

The undisputed facts show that Evans approached Harry Robinson about purchasing an automobile. In order to obtain financing, Evans completed and signed a credit application for First Fidelity at the offices of Harry Robinson. First Fidelity is a Nevada corporation with its business office in Texas. First Fidelity evaluated Evans’s information at its Texas office and informed Harry Robinson that it had conditionally approved Evans’s application. On June 6, 1996, Evans entered into a retail installment contract with Harry Robinson for the purchase of a 1994 Buick Skylark. The contract provided for interest at an annual rate of 18%, an amount that exceeded the legal amount in Arkansas. Contemporaneous with the contract, Evans also completed and signed an employment verification authorization for First Fidelity. First Fidelity received this document at its Texas office and then made its final decision to extend credit to Evans for the financing of the Buick Skylark.

On the face of the retail installment contract, language in bold print indicates that the contract was assigned. Specifically, the contract provided that the agreement was assigned to First Fidelity and reflects First Fidelity’s address and telephone number. The language further described that the terms of the assignment were made under separate agreement. The assignment provision was signed by Harry Robinson on the same day Evans signed the contract. On the reverse side, in a boxed-off space, the contract reads as follows:

To contact the holder of your Contract about this account call the number appearing with the Assignee’s name in the ASSIGNMENT section.

Additionally, under the “GENERAL TERMS” section, it is agreed that the contract “will be governed by the law of the State of Texas.”

After entering the agreement, Evans began to make payments on the Buick Skylark to First Fidelity by mailing the payments to First Fidelity’s Texas office, which First Fidelity required. Some months later, Evans stopped making payments and fell into default. He then filed suit in Sebastian County Chancery Court on June 17, 1997, naming Harry Robinson and Autobond, to whom the contract had been assigned when Evans went into default, as separate defendants. Eight days later, the vehicle was repossessed from Evans’s place of employment. Evans’s complaint alleged that the retail installment contract was usurious under Arkansas Constitution, Article 19, section 13, and that, because Harry Robinson and Evans were Arkansas residents, and the contract was a wholly Arkansas contract, Harry Robinson and Evans could not choose for Texas law to govern their agreement. Evans later amended his complaint to add First Fidelity as a party defendant. The second amended complaint claimed that the subsequent assignment to First Fidelity by Harry Robinson was merely a scheme to cloak its usurious nature. Evans amended his complaint a final time on September 3, 1997, whereby Evans added that Harry Robinson had violated certain federal Truth-in-Lending laws. The prayers for relief of the various complaints asked that the chancellor find the contract void for usury and allow Evans a double recovery for the interest paid on the contract. Evans also demanded the return of his vehicle free of any liens. Finally, Evans requested that First Fidelity be enjoined from putting any provision in its contracts in violation of Arkansas usury law.

Cross-motions for summary judgment were filed by Autobond and First Fidelity, as well as Evans. On September 10, 1997, Harry Robinson answered Evans’s third amended complaint and also moved to dismiss the case based on the statute of limitations for Truth-in-Lending claims. Harry Robinson similarly alleged that the complaint failed to state facts upon which relief could be granted.

The chancellor held two hearings, the first on July 9, 1997. At this hearing, Evans was the primary witness. During his testimony, Evans admitted that he had the opportunity and did in fact read the retail installment contract prior to signing the document. Evans further admitted that he knew First Fidelity was providing the financing for the automobile, and that an agent of First Fidelity had to be present when Evans signed the contract. Evans also testified to the fact that all payments were mailed by him outside Arkansas to First Fidelity’s Texas office. Also during the hearing, Autobond challenged the chancellor’s jurisdiction, arguing that Evans’s case was one that should be heard in circuit court. After considering counsel’s arguments on various issues, the chancellor ordered the car to be kept with the repossessor and continued the hearing for another day, taking the jurisdictional question under advisement.

The second hearing took place on November 19, 1997. Harry Robinson asserted its statute-of-fimitations argument pertaining to the Truth-in-Lending allegation. After reviewing the relevant dates, Evans’s counsel agreed that Harry Robinson “may have a point on the one-year statute of limitations matter.” At the conclusion of the hearing, the chancellor orally announced that summary judgment would be granted. On December 12, 1997, the chancellor entered his formal order granting Autobond and First Fidelity summary judgment, and dismissing Harry Robinson based on the applicable statute of limitations.

As an initial matter, Evans submits that jurisdiction is proper in chancery court. This point is not contested on appeal by either Autobond, First Fidelity, or Harry Robinson. In its brief, Autobond concedes that it failed to get a precise ruling below on its argument to transfer the case to circuit court. Autobond submits that because there is no ruling on this issue by the chancellor, the issue is not ripe for decision in this court. Harry Robinson has adopted Autobond’s position. We conclude that equity was not without jurisdiction in this matter. In his various complaints, Evans alleged certain causes of action and requested certain relief which sounded in equity. The adequacy of a legal remedy does not render the chancery court wholly without jurisdiction, and the issue of the legal remedy must first be presented to the chancery court. Townsend v. Arkansas State Highway Comm’n, 326 Ark. 731, 933 S.W.2d 389 (1996). While portions of Evans’s complaint requested a legal remedy, other portions asked for relief properly recognized in equity. Here, as in Townsend, the issue was argued to the chancery court, but for the reasons just expressed, we hold jurisdiction was properly in the chancery court.

Evans’s next two arguments pertain to the grant of summary judgment to First Fidelity and Autobond. Recently, in another usury case, this court set out its standard of review of grants of summary judgment. Nelson v. River Valley Bank & Trust, 334 Ark. 172, 971 S.W.2d 777 (1998). In Nelson, this court wrote that summary judgment is appropriate when there are no genuine issues of material fact to be litigated, and the moving party is entitled to judgment as a matter of law. In making this determination, we view the evidence in the light most favorable to . . . the part[y] resisting the motion, and resolve all doubts and inferences in their favor. Id. Evans submits summary judgment is inappropriate because a fact issue exists as to whether an assignment of a contract containing a choice-of-law provision that made the contract usurious on its face was simply a scheme to circumvent Arkansas usury law. Evans, after acknowledging that the test for a choice-of-law provision is the degree of relation of the chosen state to the transaction, argues that Texas had nothing to do with him or Harry Robinson, and that the “real deal” centered not on choice-of-law, but on the fact that it was a wholly Arkansas transaction.

Usury occurs when a lender charges more than the legally permissible maximum rate of interest, defined by Article 19, section 13 of the Arkansas Constitution, as amended by Amendment 60. Smith v. MRCC Partnership, 302 Ark. 547, 792 S.W.2d 301 (1990). For an agreement to be usurious, it must be so at the time it was entered into. Id. The party asserting usury has the burden of proof, and the proof must be sustained by clear and convincing evidence. Id. The intention to charge a usurious rate of interest will never be presumed, imputed, or inferred where the opposite result can be fairly and reasonably reached. Id.

Here, there is no disagreement that, under Arkansas law, the retail installment contract is usurious, because it expressly states that an interest rate of 18% per annum was to be charged. This is in violation of Article 19, section 13(b), which applies to consumer loans and credit sales, and dictates that interest rates on such loans shall not be above 17%. Therefore, the retail installment contract would be usurious, but for the assignment to a Texas entity and the provision in the contract stating that Texas law shall apply.

Arkansas Code Annotated § 4-1-105(1) (Supp. 1997), a provision of the Uniform Commercial Code, allows parties to choose a foreign state’s law to govern a transaction:

Except as provided hereafter in this section, when a transaction bears a reasonable relation to this state and also to another state or nation the parties may agree that the law either of this state or of such other state or nation shall govern their rights and duties. Fading such agreement, this subtitle applies to transactions bearing an appropriate relation to this state.

This statute, formerly Ark. Stat. Ann. § 85-1-105(1), was cited to with approval in Arkansas Appliance Distributing Co. v. Tandy Electronics, Inc., 292 Ark. 482, 730 S.W.2d 899 (1987), a case upholding a contract challenged for usury purposes. Autobond, First Fidelity, and Harry Robinson argued below that Arkansas Appliance Distributing controls the outcome of this appeal. We agree.

In Arkansas Appliance Distributing, Arkansas Appliance Distributing Company (Arkansas Appliance) entered into a contract with Tandy Electronics, Incorporated (Tandy), for a computer and software equipment, but Arkansas Appliance later defaulted on the contract. Tandy demanded return of the equipment, sold the equipment to Radio Shack, and filed suit for the deficiency. The trial court determined that Texas law applied, held the contract and interest valid, and entered a deficiency judgment against Arkansas Appliance, who appealed. This court recognized that, while the parties’ contract was initiated in Arkansas, it had been accepted in Texas. Moreover, the contract provided that Texas law would apply, and monthly payments were to be mailed from Arkansas to Texas. The court concluded that the Uniform Commercial Code’s provision, allowing parties to choose their own law so long as the jurisdiction chosen bears a reasonable relationship to the transaction in question, was applicable, and that appellate courts typically favor the law of the state that will make the transaction valid rather than void. 292 Ark. at 485, 730 S.W.2d at 900. Finally, this court in Arkansas Appliance Distributing held that, since Texas had substantial contacts with the contract in question, and the parties expressed their intention that Texas law would govern, the trial court correctly applied Texas law, making the parties’ contract valid. Id.

Evans responds that Huchingson v. Republic Finance Co., Inc., 236 Ark. 832, 370 S.W.2d 185 (1963), is more in line with the facts of this case, and therefore, it should control. Evans contends that, in light of Huchingson, Arkansas Appliance Distributing should be “revisited,” suggesting it should be overruled. Evans overlooks several key distinguishing facts in Huchingson.

The chief distinguishing feature between the instant case and Huchingson is that in Huchingson the allegedly usurious contract contained no choice-of-law provision. As mentioned earlier, Evans’s retail installment contract states in the general provisions section that the law of Texas shall govern the transaction. Another important distinguishing feature is that the Huchingson court found that the contract was actually executed in Arkansas, because “acceptance and approval” was not necessary in Iowa. Here, acceptance and approval in Texas by First Fidelity was a necessary predicate to Evans’s execution of the contract. More particularly, without First Fidelity, Evans could not have purchased the automobile from Harry Robinson. It was confirmed during oral argument that the money for the purchase came from First Fidelity and was transferred to Harry Robinson. Thus, while the contract was initiated in Arkansas by Evans and Harry Robinson, final execution of the contract occurred in Texas. In short, Huchingson is still good law, but is inapposite to the facts here.

Arkansas Appliance Distributing, consequently, is on point, and sets out certain inquiries that are important in determining whether a reasonable relationship exists between Texas and the retail installment contract at issue. For example, a court should look at where the transaction originated, where payments under the transaction were sent, and where the parties to the contract were located. 292 Ark. at 485, 730 S.W.2d at 900. The transaction originated in Arkansas. Yet, all payments under the transaction were mailed by Evans outside Arkansas to First Fidelity and Autobond in Texas. Evans conceded as much at the hearing on the motions of the defendants. Likewise, while Harry Robinson and Evans were in Arkansas, the contract provided that it was being simultaneously assigned to First Fidelity, and gave First Fidelity’s Texas address. Given these facts, we conclude that there was a reasonable relationship between Texas and the retail installment contract, making the choice-of-law provision, and therefore the interest charged, valid.

A recent decision by the United States Bankruptcy Court for the Eastern District of Arkansas was argued by Autobond and Harry Robinson in further support of their position. In re Brock, 214 B.R. 877 (Bkrtcy. E.D. Ark. 1997), aff'd, Op. No. PB-C-97-531 (E.D. Ark. May 11, 1998). That decision is certainly consistent with our analysis in this case. There, a Chapter 13 debtor, Brock, brought a proceeding against First Fidelity, Autobond, and others on the theory that the financing transaction violated Arkansas usury law. The parties filed cross-motions for summary judgment, but the bankruptcy court upheld the transaction. The facts showed that Brock had purchased an automobile from Harrell Motors d/b/a Pine Dodge GMC in Pine Bluff, Arkansas. Financing was provided by First Fidelity, through its Texas office, and the financing contract was later assigned to various entities including Autobond. Brock, just like Evans, completed the financing documents that were then reviewed and approved in Texas. Brock, also like Evans, admitted that he was aware of First Fidelity’s involvement. The contract in In re Brock similarly provided that Texas law would govern the transaction. The bankruptcy court, relying on the same rules applied in Arkansas Appliance Distributing, held that the facts showed a substantial connection between the contract and the State of Texas, and upheld the parties’ contract as valid. Id. at 880-881. We believe the court in In re Brock was correct and such an analysis would dictate the same result here. In the instant case, no genuine issue of material fact existed, so we affirm the chancellor’s granting of summary judgment to Autobond and First Fidelity.

Evans’s final point concerns the grant of dismissal to Harry Robinson. The trial court based its dismissal on 15 U.S.C. § 1640. The relevant portion of that provision mandates that an action under the section be brought within one year from the date of the occurrence of the violation. 15 U.S.C. § 1640(e). The record shows that Evans entered into the contract with Harry Robinson on June 6, 1996, but Evans did not file suit until, at the very earliest, June 17, 1997. Clearly, this is beyond the one-year time requirement in 15 U.S.C. § 1640(e). Evans argues, for the first time on appeal, that the one-year statute of limitations had been tolled, and also that, at the least, his claim against Harry Robinson should have been dismissed without prejudice. We have repeatedly held that we will not consider an issue for the first time on appeal. Western World Ins. Co. v. Branch, 332 Ark. 427, 965 S.W.2d 760 (1998). Regarding his dismissal without prejudice argument, the trial court’s dismissal was based upon Harry Robinson’s affirmative statute-of-limitations defense, not on Robinson’s assertion that Evans failed to state facts upon which relief could be granted, as is contemplated under Ark. R. Civ. P. 12(b)(6). Thus, the court’s grant of dismissal to Harry Robinson was appropriate, and its decision is affirmed.


author: Donald L. Corbin, Justice.

text:
    Daron Ray BARNETT v. STATE of Arkansas
    CR 98-826
    984 S.W.2d 444
    Supreme Court of Arkansas
    Opinion delivered January 28, 1999

      J. Eric Hagler, for appellant.

      Winston Bryant, Att’y Gen., by: O. Milton Fine II, Ass’t Att’y Gen., for appellee.
   Donald L. Corbin, Justice.

The State petitioned this stice. of the Arkansas Court of Appeals denying its motion to dismiss this appeal for failure to comply with the express provisions of A.R.Cr.P. Rule 24.3(b). We granted review on September 10, 1998, pursuant to Ark. Sup. Ct. R. l-2(e). We find merit to the State’s motion, and we dismiss the appeal.

The record reveals that Appellant Daron Ray Barnett was arrested and charged with thirteen counts of residential burglary, one count of theft of property, and one count of theft by receiving, all of which occurred between April 1995 and October 1996. Appellant filed a motion to suppress the evidence obtained from his residence with three different search warrants. The Drew County Circuit Court granted his suppression motion with regard to the evidence obtained with the first search warrant, but denied suppression as to the remaining two warrants.

On January 5, 1998, Appellant pleaded guilty to the charges and was sentenced to a total of fifteen years’ imprisonment. Also on January 5, 1998, Appellant filed a notice of appeal. The judgment and commitment order was filed the following day, January 6, 1998. Recognizing that the notice of appeal was invalid because it was filed prior to entry of the judgment and commitment order, defense counsel filed a second notice of appeal on January 13, 1998. On January 20, 1998, a corrected judgment and commitment order was filed of record, and a subsequent notice of appeal was filed on January 28, 1998. Unlike the January 5-notice, which did not contain any reference to a conditional plea, both the January 13 and January 28 notices of appeal reflect that Appellant was appealing “pursuant to a conditional plea of guilty (See A.R.Cr.P. Rule 24.3(b).”

Appellant filed the transcript of this case in the court of appeals on February 9, 1998. On June 2, 1998, the State filed a motion to dismiss the appeal on the ground that the requirements of Rule 24.3(b) were not met and that, therefore, the court of appeals lacked jurisdiction to hear the appeal. The court of appeals denied the State’s motion on June 24, 1998. The issue for our review is whether Appellant reserved in writing his right to appeal the suppression issue under the strict requirements of Rule 24.3(b). We conclude that he did not.

When a defendant pleads guilty to a charge, he or she waives the right to appeal that conviction. Green v. State, 334 Ark. 484, 978 S.W.2d 300 (1998). When, however, a defendant enters a conditional plea pursuant to Rule 24.3(b), he or she may retain the right to appeal an adverse suppression ruling. Id. See also Ark. R. App. P. — Crim. 1(a). Rule 24.3(b) provides:

With the approval of the court and the consent of the prosecuting attorney, a defendant may enter a conditional plea of guilty or nolo contendré [contendere], reserving in writing the right, on appeal from the judgment, to review of an adverse determination of a pretrial motion to suppress evidence. If the defendant prevails on appeal, he shall be allowed to withdraw his plea.

Other than an appeal from a sentence imposed by a jury after a guilty plea, Rule 24.3(b) provides the only procedure for an appeal from a plea of guilty. Ray v. State, 328 Ark. 176, 941 S.W.2d 427 (1997).

This court has interpreted Rule 24.3(b) to require strict compliance with the requirement that the right to appeal be reserved in writing; otherwise, the appellate court does not obtain jurisdiction. Green, 334 Ark. 484, 978 S.W.2d 300 (citing Tabor v. State, 326 Ark. 51, 930 S.W.2d 319 (1996); Burress v. State, 321 Ark. 329, 902 S.W.2d 225 (1995); Bilderback v. State, 319 Ark. 643, 893 S.W.2d 780 (1995); Noble v. State, 314 Ark. 240, 862 S. W.2d 234 (1993)). This is true even when there has been an attempt to enter a conditional plea below. Ray, 328 Ark. 176, 941 S.W.2d 427. This court has further interpreted Rule 24.3(b) to require that there be a contemporaneous writing by the defendant reserving his or her right to appeal. Tabor, 326 Ark. 51, 930 S.W.2d 319. There must also be an indication that the conditional guilty plea was entered with the approval of the trial court and the consent of the prosecuting attorney. Noble, 314 Ark. 240, 862 S.W.2d 234.

In the present case, there are two plea statements contained in the record, both of which were filed on January 6, 1998. The first plea statement bears the typed heading “GUILTY PLEA STATEMENT,” with the handwritten word “conditional” above the heading and the handwritten words “per Rule 24.3(b)” beside the heading. The statement is signed by Appellant and defense counsel, and it reflects the date of January 5, 1998, next to Appellant’s signature.

The second plea statement, which was subsequently added to the appellate record, bears the typed heading “STATEMENT OF CONDITIONAL PLEA OF GUILTY.” This plea statement reflects in pertinent part:

I, the undersigned defendant, do hereby state as follows:

That I am hereby offering a plea of guilty to the following enumerated charges, expressly conditioned upon my right to appeal the adverse determination of the suppression hearing had in the above-styled causes of action pursuant to A.R.Cr.P. Rule 24.3(b). With the understanding that my change of plea is conditioned upon my right to appeal to the Arkansas Supreme Court and/or the Arkansas Court of Appeals, I hereby change my plea to one of guilty to the charges enumerated herein.

This statement is signed by Appellant, defense counsel, and the prosecuting attorney, but there is no indication as to when it was signed. The only date contained on the face of the plea statement is the date that it was filed, January 6, 1998.

The first plea statement does not evince strict compliance with the requirements of Rule 24.3(b) for two reasons. First, it does not purport to reserve any right to appeal. To the contrary, the statement reflects that Appellant understood that if he pleaded guilty, he would give up various legal rights, including his “right to appeal a verdict against [him] to a higher court for review for possible error made against [him].” The situation here is thus unlike that in Green, 334 Ark. at 489, 978 S.W.2d at 302, wherein this court held that the requirements of Rule 24.3(b) had been met where the handwritten word “conditional” appeared above the typed heading “PLEA STATEMENT,” which was signed by the appellant, and where that portion of the plea statement acknowledging waiver of the right to appeal was crossed out and initialed by the appellant. Second, this plea statement fails to demonstrate that the trial court approved a conditional plea, or that the prosecuting attorney consented to a conditional plea. Rule 24.3(b) expressly provides that the conditional plea be entered “[wjith the approval of the court and the consent of the prosecuting attorney.” See also Noble, 314 Ark. 240, 862 S.W.2d 234.

The second plea statement also fails to strictly comply with Rule 24.3(b) in that it is devoid of any reference to the trial court’s approval of a conditional guilty plea. The fact that the signature of the prosecuting attorney is present does not cure this defect; Rule 24.3(b) requires both the consent of the prosecuting attorney and the approval of the trial court. Additionally, despite the fact that this plea statement reflects Appellant’s intent to reserve his right to appeal, it does not strictly comply with Rule 24.3(b) because there is no indication that it was entered contemporaneously with his guilty plea. See Tabor, 326 Ark. 51, 930 S.W.2d 319. Rather, the record reflects that Appellant entered his guilty plea on January 5, 1998; however, the only date on this plea statement is the date that it was filed, January 6, 1998. A signed plea statement entered after the guilty plea is not a contemporaneous writing and thus does not demonstrate strict compliance with Rule 24.3(b).

Also significant in this case is the fact that neither the January 6 nor the January 20 judgment and commitment order makes any reference to Appellant’s guilty plea being conditioned upon his right to appeal the suppression issue. Instead, both orders reflect that Appellant was advised of the nature of the charges against him, his constitutional and legal rights, and the effect of a guilty plea upon those rights. They also reflect that Appellant “voluntarily, intelligently, and knowingly entered a negotiated plea of guilty.” These orders are thus inconsistent with Appellant’s assertion that he entered a conditional guilty plea. Accordingly, we conclude that the requirements of Rule 24.3(b) were not strictly complied with and that, therefore, the appeal must be dismissed for lack of jurisdiction.

       Appellant filed a petition for writ of certiorari to complete the record on June 10, 1998, asserting that this document had been omitted from the record due to an error by the circuit clerk. The State did not object, and the court of appeals granted the petition on June 24, 1998.