text:
    Darrel Patrick FOUSE v. STATE of Arkansas
    CR 98-928
    989 S.W.2d 146
    Supreme Court of Arkansas
    Opinion delivered March 18, 1999

      Hampton, Larkowski & Coleman, by: Mark F. Hampton and Patrick J. Benca, Law Student Admitted to Practice Pursuant to Rule V(E)(1)(6) of the Rules Governing Admission to the Bar of the Arkansas Supreme Court, for appellant.

      Winston Bryant, Att’y Gen., by: Kent G. Holt, Ass’t Att’y Gen., for appellee.
   Robert L. Brown, Justice.

This case comes to this court on a conditional plea of guilty pursuant to Ark. R. Crim. P. 24.3(b). Appellant Darrell Patrick Fouse contends that the trial court erred in finding that the affidavit for search warrant stated sufficient facts to justify a nighttime search and further erred in ruling that the good-faith exception under United States v. Leon, 468 U.S. 897 (1984), salvaged the search in this case. We agree that the trial court erred, and we reverse and remand the case for an order consistent with this opinion.

On November 29, 1997, the McRae Police Department received reports from concerned citizens of a strange smeE coming from a shed near Fouse’s residence which is a mobEe home. Two police officers from the McRae Police Department went to Fouse’s property and confirmed the smeE of a chemical odor. On December 22, 1997, the McRae Police Department contacted Detective David Oser, who was assigned to the 17th East Judicial District Drug Task Force, after reports that the chemical odor could again be detected on Fouse’s property. Detective Oser and Arkansas State Trooper Roger Ahlf went to Fouse’s residence and smelled ether coming from the mobile home or around it. Detective Oser learned from Trooper Ahlf that in 1988 and 1989, Fouse had been allegedly associated in the distribution of methamphetamine with persons who had been convicted in federal court of methamphetamine crimes. The detective also learned that Fouse had been convicted of delivery of a controlled substance in 1987.

Based on this information and his knowledge of the methamphetamine cooking process, Detective Oser presented an Affidavit for Search Warrant to the municipal judge, who issued a search warrant for Fouse’s premises. The judge allowed execution of the warrant to take place at any time and checked the box on the search warrant stating that the objects to be seized were in danger of imminent removal as his reason for doing so. At 12:20 a.m. on December 23, 1997, police officers conducted the search and found evidence of an active methamphetamine lab, drug paraphernalia, communication equipment, methamphetamine on Fouse’s person, and a firearm.

On March 6, 1998, Fouse filed a Motion to Suppress the evidence seized and asserted that the search warrant failed to establish probable cause for a nighttime search, that a nighttime search was not authorized in the warrant, and that the smell of ether does not constitute probable cause to support the issuance of a search warrant. A hearing on the motion was held, and on May 11, 1998, the trial court granted Fouse’s motion to suppress, finding that the smell of ether, a legal substance, without other facts, did not provide sufficient probable cause for the issuance of a search warrant. The following day on May 12, 1998, the trial court set aside his first order and found that the good-faith exception established by the United States Supreme Court in United States v. Leon, supra, applied. Suppression of the evidence, accordingly, was denied. On May 14, 1998, Fouse entered his conditional plea of guilty to manufacture of a controlled substance, felon in possession of a firearm, and use of a communication facility for drug purposes, subject to the decision on the suppression issue in this appeal.

I. Probable Cause for Nighttime Search

Fouse initially argues that there was nothing in Detective Oser’s affidavit to show that Oser had information that Fouse possessed methamphetamine on his property or that the methamphetamine was in danger of imminent removal. Fouse further contends that the only language in the Oser affidavit regarding imminent removal of drugs was a conclusory statement to that effect, and that conclusory statements cannot support the issuance of a nighttime search warrant.

We recently described our standard of review for a trial court’s decision on a motion to suppress:

In reviewing a trial court’s ruling on a motion to suppress, we make an independent determination based upon the totality of the circumstances; we view the evidence in the light most favorable to the appellee, and we reverse only if the ruling is clearly erroneous or against the preponderance of the evidence. Mullinax v. State, 327 Ark. 41, 938 S.W.2d 801 (1997), cert. denied, 117 S. Ct. 2411 (1997). We apply the totahty-of-the-circumstances analysis when determining whether the issuing magistrate had a substantial basis for concluding that probable cause existed. Moore v. State, 323 Ark. 529, 915 S.W.2d 284 (1996); State v. Mosley, 313 Ark. 616, 856 S.W.2d 623 (1993).

Langford v. State, 332 Ark. 54, 59-60, 962 S.W.2d 358, 361 (1998).

Rule 13.1(b) of the Arkansas Rules of Criminal Procedure provides the requirements for a valid application for a search warrant and the totality-of-the-circumstances approach to be taken in determining whether reasonable cause exists for the search. Nighttime searches, however, are treated differently under our criminal rules and require that the judicial officer find reasonable cause that at least one of three listed exigent circumstances exists:

Except as hereafter provided, the search warrant shah provide that it be executed between the hours of six a.m. and eight p.m., and within a reasonable time, not to exceed sixty (60) days. Upon a finding by the issuing judicial officer of reasonable cause to beheve that:
(i) the place to be searched is difficult of speedy access; or
(ii) the objects to be seized are in danger of imminent removal; or
(iii) the warrant can only be safely or successfully executed at nighttime or under circumstances the occurrence of which is difficult to predict with accuracy; the issuing judicial officer may, by appropriate provision in the warrant, authorize its execution at any time, day or night, and within a reasonable time not to exceed sixty (60) days from the date of issuance.

Ark. R. Crim. P. 13.2(c).

This court has invalidated nighttime search warrants on several occasions when facts supporting one or more exigent circumstances have been found wanting. See, e.g., Richardson v. State, 314 Ark. 512, 863 S.W.2d 572 (1993); Garner v. State, 307 Ark. 353, 820 S.W.2d 446 (1991); State v. Martinez, 306 Ark. 353, 811 S.W.2d 319 (1991); Hall v. State, 302 Ark. 341, 789 S.W.2d 456 (1990); State v. Broadway, 269 Ark. 215, 599 S.W.2d 721 (1980). In Richardson v. State, supra, this court held that a nighttime search warrant based on a conclusory statement in the police detectives’ affidavit that pornographic photographs and other evidence were in danger of being removed was issued in error. In holding that the police detectives’ language about removal was conclusory, we said: “We have consistently held that a factual basis supporting a nighttime search is required as a prerequisite to the issuance of a warrant authorizing a nighttime search. . . . We have held conclusory language . . . unsupported by facts is insufficient to justify a nighttime search. . . . Given that there was nothing to give reasonable cause to believe the items specified in the search warrant would be disposed of, removed, or hidden before the next morning, issuance of the nighttime search warrant was in error.” Id. at 518-519, 863 S.W.2d at 576.

Likewise, in Garner v. State, supra, the police officers’ affidavit in support of the search warrant for drugs stated that the dwelling to be searched was located 12.5 miles from the courthouse; a person arrested for possession of drugs had stated that he bought the drugs from the appellant; the sheriff s office had received information in the past sixty days that several purchases of marijuana had been made from the appellant; and a person arrested for possession of marijuana stated that he had observed a quantity of marijuana on the appellant’s property. The judge issued a nighttime search warrant and checked two boxes on the warrant: “the place to be searched is difficult of speedy access” and “the warrant can only be safely or successfully executed at night time or under circumstances the occurrence of which is difficult to predict with accuracy.” In reversing the trial court’s denial of appellant’s motion to suppress, we said: “[C]onclusory statements [do] not suffice to establish the requisite factual basis for reasonable cause. . . . We, therefore, hold that the two statements ‘checked’ were conclusory and unsupported by sufficient facts and, accordingly, did not establish reasonable cause for a nighttime search. Without sufficient factual premises, it was impossible for the municipal judge to make an intelligent finding of reasonable cause to justify a nighttime search.” Id. at 357-358, 820 S.W.2d at 449.

We have also upheld the issuance and execution of a nighttime search warrant, when facts evidencing an exigent circumstance were present. See, e.g., Langford v. State, supra; Owens v. State, 325 Ark. 110, 926 S.W.2d 650 (1996). In Langford v. State, for example, the affidavit given in support of the nighttime search warrant contained four exigent circumstances: (1) there were drugs currently located at the appellant’s residence that were packaged and maintained in a manner that their destruction or removal could be easily accomplished; (2) the appellant had threatened one of the informants in the case with a weapon, and was believed to be armed and dangerous, making the element of surprise inherent with a nighttime search essential for the safety of the officers executing the warrant; (3) the affiant had information that the appellant would be leaving on September 29, 1993, thus giving rise to the belief that the drugs would be removed; and (4) the residence was located on a hill overlooking the road, making speedy access impossible. We held that these statements contained in the affidavit presented a sufficient factual basis to support the trial court’s decision to deny suppression of the evidence seized in the nighttime search.

Similarly, in Owens v. State, supra, the affidavit in support of the issuance of a nighttime search warrant stated in part:

Access to the Dean Owens residence can be made only by a one lane dirt road which is filled with potholes, currently very muddy and the approach of vehicles can be observed from the residence. . . .
Informant information has revealed that Dean and Christie (Judy) Owens have been under the constant influence of methamphetamine for the past six (6) months and have because of this use exhibited characteristics consistent with a fear of being watched and approached by law enforcement authorities at their residence. Information addressed in Paragraph Four of this affidavit supports the possibility of automatic firearm(s) being in the possession of the occupants of the Dean Owens residence. Therefore, safe and speedy access to the Dean Owens residence by authorities can only be obtained under the cover of darkness and during an hour when it would be reasonable to believe that occupants of the residence would be less attentive to approaching officers. Speedy access is necessary both for the protection and safety of approaching officers as well as occupants of the residence and to ensure that objects to be seized are not destroyed or removed in that the residence is equipped with indoor plumbing which could easily facilitate the flushing or washing of methamphetamine out of the residence.

Id. at 117, 926 S.W.2d at 654. We affirmed the issuance of the nighttime search warrant based on the supporting exigent circumstances set out in the affidavit.

In the case before us, the portion of the affidavit prepared by Detective Oser that touched on imminent removal read as follows:

It has been my experience and I know that the process of manufacturing methamphetamine takes approximately four hours and that the chemicals used to manufacture methamphetamine are volatile and subject to explode or at the least cause a fire and can be a danger to surrounding houses in a residential setting such as this. There is also an emminent (sic) danger that the items and hardware used to manufacture methamphetamine may be moved or destroyed and the methamphetamine product may be transported and/or sold.

We view these comments by Detective Oser as conclusory and as falling more readily within the Richardson/Garner line of cases where we held that factual support for a nighttime search had not been forthcoming. Nor can we agree with the trial court that a strong odor of ether detected at the Fouse residence at 9:00 p.m. on December 22, 1997, was a reasonable basis for concluding that methamphetamine was to be removed or sold or both within the next four hours and that a nighttime search was justified. We hold that not only was the search warrant deficient under Ark. R. Crim. P. 13.2(c) but that probable cause was lacking to justify a nighttime search.

II. Good-Faith Exception

We turn then to the issue of whether the police officers acted in good faith in executing this search warrant under United States v. Leon, supra. The test under Leon is not whether the police officers executing the search warrant subjectively believed they were complying with the law. Rather, the test to be applied under Leon is an objective standard of what reasonably well-trained police officers would believe is probable cause for a nighttime search. See Richardson v. State, supra; Garner v. State, supra. In Garner, after discussing the Supreme Court’s decision in United States v. Leon, supra, we said:

Our concern today is for the integrity of our Rules. If they are to have any meaning relative to nighttime searches, more must be shown the municipal judge than was offered in this case. Subjectively, the executing officers no doubt believed that they were complying with the law because they were using a printed form. Objectively, the affidavit and warrant were lacking in any indicia of a reasonable cause for a nighttime search other than a reiteration of the conclusory language in our Rules.

Garner, 307 Ark. at 359-360, 820 S.W.2d at 450. Because the objective standard was not met in Garner v. State, supra, we declined to uphold the nighttime search on the basis of the police officers’ good faith.

What is required for establishing probable cause for a nighttime search is clear from Ark. R. Crim. P. 13.2(c) and the multiple decisions of this court requiring more than merely conclusory statements. We have held that an objective standard of good faith is not met when a police officer only presents suspicions regarding removal and the municipal judge only repeats the boilerplate language from Rule 13.2(c). See Richardson v. State, supra; Garner v. State, supra. Using an objective standard, we conclude that a reasonably well-trained police officer would not have believed that probable cause existed to conduct a nighttime search based on the smell of ether. We discern no reason to retreat from our prior decisions on this issue.

The trial court relied on the case of United States v. Tate, 795 F.2d 1487 (9th Cir. 1986), in determining that the smell of ether can provide a good-faith basis for a search. In Tate, police officers received an anonymous tip on July 12, 1980, that at least three men were parked in a van in front of a residence and that there was a strong smell of ether coming from that residence. The police officers went to the residence in question and confirmed the smell of ether. They then prepared affidavits and presented them to the magistrate for a search warrant. Meanwhile, at 3:30 a.m. on July 13, 1980, an agent with the California Bureau of Narcotics Enforcement went to the same residence. Fie also smelled ether and continued his surveillance of the residence. At 5:45 a.m., the agent noticed four or five men moving parcels to a station wagon. The men left in a car and the narcotics agent followed them. While following the men, the agent learned that a search warrant for the residence had been issued. Based on this information and his own surveillance, he stopped the station wagon. The agent detected a strong smell of ether and white powder on the men and arrested them. While the search of the men was taking place, other investigators were searching the residence.

The men who were charged filed motions to suppress the evidence seized in each of the searches. These motions were denied by the federal district court. In their first appeal, the Ninth Circuit Court of Appeals reversed the convictions, holding that “the smell of a noncontraband substance having a number of legitimate uses, standing alone does not establish probable cause to search a residence.” United States v. Tate, 694 F.2d at 1221. The government appealed this decision to the Supreme Court. The Court reversed the Ninth Circuit and remanded for consideration of the issue in light of the Leon decision. United States v. Tate, 468 U.S. 1206 (1984). On subsequent appeal, the Ninth Circuit determined that under the Leon decision, “courts must determine if no reasonably well-trained officer could have believed that there existed probable cause to search the residence.” Tate, 795 F.2d at 1491. The court went on to hold that applying this test to this case, “a reasonably well trained police officer could, in good faith, conclude that there was probable cause to search the residence. Accordingly, although the search warrant was arguably invalid, the district court properly admitted the evidence seized from the residence against the defendants.” Id.

The Tate case is distinguishable from the instant case on two bases. First, it does not appear that the search warrant at issue was for execution at night. At least, the Ninth Circuit fails to discuss the factors relating to a nighttime search or any of those exigent circumstances which pertain to the necessity for a search at night. Second, and this is a related point, the criminal rule at issue in Tate (it is unclear whether a federal rule or California rule was involved) apparently does not contain the same or similar exigent requirements as Ark. R. Crim. P. 13.2(c) for nighttime searches. Again, the exigencies of the situation were simply not discussed in the opinion. Because of this, the Tate case offers no guidance in connection with good-faith conduct and a nighttime search.

In sum, we hold that the affidavit and resulting search warrant in the instant case did not contain sufficient facts to justify a nighttime search under Ark. R. Crim. P. 13.2(c). Moreover, even disregarding the defective affidavit and search warrant, we do not view the smell of ether as sufficient probable cause to justify a nighttime search. Using an objective standard, we do not see how a reasonably well-trained officer could have believed that this nighttime search passed muster under our criminal rules and caselaw. We have stated in the past: “The privacy of citizens in their homes, secure from nighttime intrusions, is a right of vast importance as attested not only by our Rules, but also by our state and federal constitutions.” State v. Garner, 307 Ark. at 358-359, 820 S.W.2d at 449-450. We reverse and remand for entry of an order consistent with this opinion.

Reversed and remanded.


source: Caselaw Access Project

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

license: Public Domain

text:
    Pam JACKSON, Individually and as Administratrix of the Estate of James C. Jackson v. CADILLAC COWBOY, INC., d/b/a Sundowners Club, John Fontana, Billy Burns, Jr., and Regina Applegate
    98-574
    986 S.W.2d 410
    Supreme Court of Arkansas
    Opinion delivered March 18, 1999

      Crisp, Jordan & Boyd, L.L.P., by: William D. Schubert, for appellant.

      Dunn, Nutter, Morgan & Shaw, by: W. David Carter and Adam O Fellows, for appellees.
   Robert L. Brown, Justice.

This appeal brings to the forefront once again the issue of whether this court should recognize common-law liability for the negligence of vendors licensed by the state who sell alcoholic beverages to intoxicated persons who, in turn, cause injury to third persons. In our previous decisions, we have declined to establish that liability judicially, beginning with the seminal case of Carr v. Turner, 238 Ark. 889, 385 S.W.2d 656 (1965). The trial court, in the instant case, followed our past decisions and dismissed the complaint of the appellant, Pam Jackson, for failure to state facts upon which relief could be granted. Jackson now urges on appeal that either our decision in Shannon v. Wilson, 329 Ark. 143, 947 S.W.2d 349 (1997), decides the issue concerning the validity of her claim, or, in the alternative, we should recognize a cause of action for vendors who sell alcohol to inebriated persons. We agree with Jackson that she has stated facts upon which relief may be granted, and we reverse the trial court’s dismissal and remand for further proceedings.

The facts as alleged in Pam Jackson’s complaint are these. On August 31 and September 1, 1994, appellee Cadillac Cowboy, Inc., and its owners through their agents and employees served alcoholic beverages at the Sundowners Club to Kevin Holliday, an adult, who they knew or should have known was extremely intoxicated and intended to drive his motor vehicle while intoxicated. At about 12:45 a.m. on September 1, 1994, a 1977 Chevrolet pickup truck driven by Holliday struck the side of the vehicle driven by James Jackson, causing it to overturn and kill Jackson. Pam Jackson, individually and as administratrix of the Estate of James Jackson, sued Cadillac Cowboy, Inc., and its owners and asserted that their conduct constituted negligence per se due to their violation of certain provisions of the Arkansas Alcoholic Control Act.

Cadillac Cowboy, Inc., and its owners moved to dismiss Jackson’s complaint under Ark. R. Civ. P. 12(b)(6) for failure to state facts upon which relief could be granted. The trial court granted the motion and in its order wrote that our decision in Shannon v. Wilson, supra, narrowly modified Carr v. Turner, supra, and only extended liability for the sale of alcohol to minors. The trial court concluded that in all other respects Carr remained intact and refused to extend Shannon to include sales to intoxicated adults.

Jackson first urges in her appeal that our decision in Shannon v. Wilson, supra, where we recognized a cause of action for the sale of alcohol to minors, also included the sale of alcohol to intoxicated persons. We disagree. The facts and decision in Shannon manifestly involved the sale of liquor to minors. We do agree with Jackson, however, that she has stated facts sufficient for a negligence cause of action against Cadillac Cowboy, Inc., and its owners for the sale of alcohol to an intoxicated person.

In 1965, we observed that a distinct minority of jurisdictions extended liability to vendors for sale of alcohol to minors or intoxicated persons. See Carr v. Turner, supra. In Carr, we declined for the first time to amend our common law and to judicially create a cause of action for negligence against a vendor for selling alcohol to an intoxicated person. The facts in Carr were similar to those in the instant case. Alcoholic drinks were sold at a club to the club’s patron and co-defendant until she became visibly intoxicated. The patron left the club in her car and ran into a parked taxicab which injured the plaintiff. We held that there was no liability on the part of the club because the proximate cause of the injuries was the consumption of alcohol by the patron, not the sale of it. We further remarked on the fact that our criminal statute was not limited to the sale of alcohol to minors and intoxicated persons but also included giving away alcoholic beverages to those groups. We stated in Carr that, as a practical matter, we could not confine liability to vendors of alcohol as opposed to social hosts serving alcohol to guests.

In our cases since Carr, we have continued to decline to recognize liability for the licensed vendor who sells liquor to an inebriated person or to other high-risk groups such as minors. See, e.g., Mann v. Orrell, 322 Ark. 701, 912 S.W.2d 1 (1995); Rone v. H.R. Hospitality, Inc., 297 Ark. 107, 759 S.W.2d 549 (1988); First American Bank of North Little Rock v. Associated Hosts, Inc., 292 Ark. 445, 730 S.W.2d 496 (1987); Yancey v. The Beverage House of Little Rock, Inc., 291 Ark. 217, 723 S.W.2d 826 (1987); Milligan v. County Line Liquor, Inc., 289 Ark. 129, 709 S.W.2d 409 (1986). In most of these cases, we reiterated that consumption of alcohol was the proximate cause of alcohol-related injuries and repeatedly-stated that if there was to be a change in our public policy for licensed vendor liability, it was for the General Assembly to decide.

Last year, in the case of Shannon v. Wilson, supra, this court noted that thirty-five years after Carr v. Turner, supra, the vast majority of jurisdictions now recognize vendor liability for the sale of alcohol to high-risk groups. In Shannon, we further recognized that the sale of alcohol to a minor that resulted in injuries was a proximate cause of those injuries. Now we are confronted with a comparable situation relating to intoxicated persons. We see no distinction between the two high-risk groups of minors and intoxicated persons when it comes to causation. Just as the sale of alcohol to a minor may be one proximate cause of resulting injury, so may such sales to those who are intoxicated. Indeed, the abundant authority from other jurisdictions that we cited in Shannon were cases that involved minors as well as intoxicated persons.

The question then becomes whether there is a duty of reasonable care owed by licensed vendors of alcohol to their patrons. This question, too, was answered by our decision in Shannon v. Wilson, supra. In 1989, the General Assembly passed Act 695, which fixed a high duty of care for all license holders who sell alcoholic beverages. This legislation was passed twenty-four years after our decision in Carr v. Turner, supra. Act 695 stated in pertinent part:

(a) It is the specifically declared policy of the General Assembly of the State of Arkansas that all licenses issued to establishments for the sale or dispensing of alcoholic beverages are privilege licenses, and the holder of such privilege license is to be held to a high duty of care in the operation of the licensed establishment.
(b) It is the duty of every holder of an alcoholic beverage permit issued by the State of Arkansas to operate the business wherein alcoholic beverages are sold or dispensed in a manner which is in the public interest, and does not endanger the public health, welfare, or safety. Failure to maintain this duty of care shall be a violation of this act and grounds for administrative sanctions being taken against the holder of such permit or permits.

1989 Ark. Acts 695 (codified at Ark. Code Ann. § 3-3-218(a) & (b) (Repl. 1996)). In Shannon v. Wilson, supra, we relied on Act 695 coupled with statutes prohibiting the sale of alcohol to minors to establish a duty of care. We said:

We conclude that the statutes establishing affirmative obligations upon license holders authorized to sell alcohol and the statute classifying the criminal act of selling or furnishing alcohol to minors for monetary gain a felony create a duty for licensees to exercise a high standard of care for the protection of minors. A breach of this duty can lead to a suit for negligence.

Shannon, 329 Ark. at 159-160, 947 S.W.2d at 357. The same reasoning applies to this case in establishing a duty of care for sales by licensed vendors to intoxicated persons.

Among the prohibited practices in the Arkansas Alcoholic Beverage Control Act is the sale of alcohol “to a habitual drunkard or an intoxicated person,” which is a misdemeanor offense. See Ark. Code Ann. § 3-3-209 (Repl. 1996). When we read this statute in conjunction with Act 695, it is clear to us, as it was in Shannon v. Wilson, supra, that the General Assembly has spoken on this point and has established a high duty of care on the part of holders of alcohol licenses, which includes the duty not to sell alcohol to high-risk groups, including intoxicated persons. Stated a different way, a duty of care exists on the part of licensed alcohol vendors not to endanger the public health, welfare, or safety, and that duty is breached when vendors sell alcohol to intoxicated persons in violation of § 3-3-209. Although these ABC statutes do not specifically provide for civil liability, a duty of care and the attendant standard of care may be found in a statute that is silent on civil liability. See Restatement (Second) of Torts § 286 Comt. d (1965).

That is precisely what is alleged in Jackson’s complaint in the case before us. When considering a motion to dismiss on Rule 12(b)(6) grounds, we treat the allegations made in the complaint as true and view them in the light most favorable to the plaintiff. See Mann v. Orrell, supra; Perrodin v. Rooker, 322 Ark. 117, 908 S.W.2d 85 (1995). This means that we must accept as true the allegation that Cadillac Cowboy’s employees or agents served Holliday alcohol when he was extremely intoxicated, knowing that he intended to drive his motor vehicle while intoxicated. We conclude that Jackson states the case correctly when she maintains that serving alcohol to Holliday, an intoxicated person, knowing that he intended to drive his motor vehicle, breached the high duty of care set by the General Assembly for licensed vendors of alcohol. The risk of harm to the public at large by an intoxicated driver is not only foreseeable but beyond dispute.

As we have already noted, the vast majority of jurisdictions in this country now have established vendor liability for sales to high-risk groups either by statute or judicial opinion. Indeed, a majority of states has done so by basing this liability on the duty of care established'in alcoholic beverage control statutes. The first jurisdiction to premise liability on the duty of care set forth in local alcoholic beverage control statutes was New Jersey. See Rappaport v. Nichols, 156 A.2d 1 (N.J. 1959). According to our research, at least thirty-two jurisdictions have allowed civil causes of action based on the duty of care established in ABC statutes. See Nazareno v. Urie, 638 P.2d 671 (Alaska 1981); Ontiveros v. Borak, 667 P.2d 200 (Ariz. 1983); Largo Corp. v. Crespin, 727 P.2d 1098 (Colo. 1986); Rong Yao Zhou v. Jennifer Mall Restaurant, Inc., 534 A.2d 1268 (D.C. 1987); Davis v. Shiappacossee, 155 So.2d 365 (Fla. 1963); Ono v. Applegate, 612 P.2d 533 (Haw. 1980); Fischer v. Cooper, 775 P.2d 1216 (Idaho 1989); Elder v. Fisher, 217 N.E.2d 847 (Ind. 1966); Haafke v. Mitchell, 347 N.W.2d 381 (Iowa 1984); Pike v. George, 434 S.W.2d 626 (Ky. Ct. App. 1968); Garcia v. Jennings, 427 So.2d 1329 (La. Ct. App. 1983); Klingerman v. SOL Corp. of Maine, 505 A.2d 474 (Me. 1986) (now abrogated by Me. Rev. Stat. Ann. tit. 28-A, § 2511); Michnik-Zilberman v. Gordon’s Liquor, Inc., 453 N.E.2d 430 (Mass. 1983); Trail v. Christian, 213 N.W.2d 618 (Minn. 1973); Munford, Inc. v. Peterson, 368 So.2d 213 (Miss. 1979); Sampson v. W.F. Enters., Inc., 611 S.W.2d 333 (Mo. Ct. App. 1981); Jenning v. Skyline Bar, 726 P.2d 326 (Mont. 1965); Ramsey v. Anctil, 211 A.2d 900 (N.H. 1965); Rappaport v. Nichols, 156 A.2d 1 (N.J. 1959); Lopez v. Maez, 651 P.2d 1269 (N.M. 1982); Hutchens v. Hankins, 303 S.E.2d 584 (N.C. Ct. App. 1983); Mason v. Roberts, 294 N.E.2d 884 (Ohio 1973); Brigance v. Velvet Dove Restaurant, 725 P.2d 300 (Okla. 1986); Davis v. Billy’s Con-Teena, Inc., 587 P.2d 75 (Or. 1978); Jardine v. Upper Darby Lodge No. 1973, Inc., 198 A.2d 550 (Pa. 1964); Christianson v. Campbell, 328 S.E.2d 351 (S.C. Ct. App. 1985); Brookins v. The Round Table, Inc., 624 S.W.2d 547 (Tenn. 1981); Poole v. El Chico Corp., 713 S.W.2d 955 (Tex. Ct. App. 1986); Purchase v. Meyer, 737 P.2d 661 (Wash. 1987); Bailey v. Black, 394 S.E.2d 58 (W. Va. 1990); Sorenson v. Jarvis, 350 N.W.2d 108 (Wis. 1984); McClellan v. Tottenhoff, 666 P.2d 408 (Wyo. 1983).

The rationale for the approach taken by these jurisdictions, and now by this court, is best summarized by the North Carolina Court of Appeals:

Most state and federal courts that have considered these issues since 1960 have reevaluated and rejected as patently unsound the rule that a seller cannot be held liable for furnishing alcoholic beverages to an intoxicated or minor patron who injures a third person on the grounds that sale or service is causally remote from the subsequent injurious conduct of the patron. A substantial majority have decided that the furnishing of alcoholic beverages may be a proximate cause of such injuries and that liability may be imposed upon the vendor in favor of the injured third person, and nearly every court recognizing such a claim for relief against a licensed vendor has premised the action for negligence upon the violation of statutes imposing a duty upon licensees to refrain from selling or serving alcoholic beverages to a visibly intoxicated person.

Hutchens v. Hankins, 303 S.E.2d 584, 589 (N.C. Ct. App. 1983), petition denied, 309 N.C. 191, 305 S.E.2d 734 (1983).

We have no doubt that the high duty of care established by Act 695 was essentially for regulatory purposes, but it also is legislative recognition of the vital and weighty responsibility that our state places on licensed alcohol vendors. We emphasize the point that this high duty of care fixed by the General Assembly is on licensed vendors of alcohol, and we view the liability as confined to this group by Act 695. Though we said in Carr v. Turner, supra, that we could not see how liability could be confined to vendors as opposed to social hosts, this was before the enactment of Act 695 establishing the duty of care for licensed vendors. Now it is clear under Shannon v. Wilson, supra, as well as our decision today that the liability does not extend to social hosts.

To date, there are six states that impose no vendor liability for the sale of alcohol to high-risk groups, either judicially or by statute — Nevada, Nebraska, Delaware, Virginia, Kansas, and Maryland. Our neighboring states impose vendor liability in a variety of ways:

• Missouri has addressed the issue by statute. Mo. Ann. St. § 537.053 (West 1988) imposes limited liability against licensed vendors of alcohol by the drink for consumption on the premises. A cause of action exists only if (1) the vendor is convicted of or receives a suspended sentence for selling alcohol to a minor or obviously intoxicated person, and (2) that sale is the proximate cause of the injury or death sustained by that person. Prior to the enactment of the statute, Missouri judicially recognized a common-law cause of action. See Sampson v. W.F. Enters., 611 S.W.2d 33 (Mo. Ct. App. 1981).
• Oklahoma is a common-law jurisdiction. One who furnishes liquor may be liable for damages for serving an obviously intoxicated person from which it can be determined that an unreasonable risk of harm to others was created by the impaired ability to operate a motor vehicle. See Mansfield v. Circle K. Corp., 877 P.2d 1130 (Okla. 1994); Brigance v. Velvet Dove Restaurant, Inc., 725 P.2d 300 (Okla. 1986).
• Tennessee has enacted Tenn. Code Ann. § 57-10-101 (Repl. 1989). This statute declares that consumption is the proximate cause and not the furnishing of alcohol. But § 57-10-102 sets up a standard of proof notwithstanding § 57-10-101: A jury of twelve must ascertain beyond a reasonable doubt that the sale of alcohol to a person known to be under 21 or obviously intoxicated caused the injury as a direct result of the consumption of the alcohol.
• Texas has addressed the issue by statute. Tex. Aleo. Bev. Code Ann. § 2.02 (West 1995) imposes liability for providing, selling, or serving an alcoholic beverage to an obviously intoxicated person to the extent that he presented a clear danger to himself and others and if the intoxication is the proximate cause of the injury.
• Louisiana has the most restrictive statute. La. Rev. Stat. Ann. § 9:2800.1 (West 1997) immunizes alcoholic beverage vendors who serve alcohol to persons who aré legally of age. In instances where the statute does not apply, such as where the consumer is under age 21, the courts resort to general negligence principles. See Godfrey v. Boston Old Colony Ins. Co., 718 So.2d 441 (La. Ct. App. 1998).
• Mississippi has addressed the issue by statute. Miss. Code Ann. § 67-3-73 (1991) limits liability to those cases in which licensed alcohol vendors furnish alcohol to visibly intoxicated patrons or in cases where a person causes the consumption of alcoholic beverages by force or false representations that the beverage contains no alcohol. Mississippi courts have also recognized a common-law cause of action. See Bryant v. Alpha Entertainment Corp., 508 So.2d 1094 (Miss. 1987).

In sum, the complaint by Jackson is that the employees of the Sundowners Club knowingly served an intoxicated person, Holliday, knowing he would drive while intoxicated. Jackson argues, in effect, that serving alcohol to Holliday, knowing that he would drive, was much like loading a pistol. Under these circumstances, we will not immunize licensed vendors of alcohol to engage in activity which is in blatant disregard of the standard of care set forth in Act 695 and § 3-3-209, especially since we declined to do so under comparable circumstances pertaining to alcohol sales to minors in Shannon v. Wilson, supra. Instead, we now consider the question of whether the duty of care fixed by statute for ABC license holders has been breached to be an issue for the fact-finder, and we hold that evidence of the sale of alcohol by a licensed vendor to an intoxicated person is some evidence of negligence. We overrule Carr v. Turner, 238 Ark. 889, 385 S.W.2d 656 (1965), and its progeny to the extent those cases are inconsistent with this opinion.

The dissent spends considerable time complaining that the majority opinion fails to give standards or guidelines to prove who is an intoxicated person. Of course, the proof required would be the same as would be necessary to enforce § 3-3-209. But, suffice it to say, the appellees do not argue the vagueness of that statute or its failure to provide standards and that was not an issue before the trial court or on appeal.

Reversed and remanded.

Glaze, J., concurs.

Arnold, C.J., Corbin and Thornton, JJ., dissent.

Tom Glaze, Justice,

concurring. Before the case of Shannon v. Wilson, 329 Ark. 143, 947 S.W.2d 349 (1997), this court under its common-law authority held that no business licensed to sell alcohol was liable for any accident and injuries following its illegal sale of liquor to a minor. Such nonliability was primarily based on the fact that Arkansas has no laws that expressly imposed civil liability on the seller, and the further rationale that it was the minor’s consumption, not the sale, of the alcohol that was the sole proximate cause of the ensuing accident and injuries. See, e.g., Carr v. Turner, 238 Ark. 889, 385 S.W.2d 656 (1965). Concerning the proximate cause issue, the Shannon court explained and then concluded it could not find any basis for determining that the voluntary consumption by the minor was the proximate cause of the resulting damages or injuries. Id. at 156—158, 947 S.W.2d at 355-357. That being said, it also follows that an intoxicated patron’s voluntary consumption of alcohol, illegally sold him by a licensed alcohol permit holder, is not necessarily, as a matter of law, the sole proximate cause of an accident that followed that sale. In sum, if a licensed liquor-permit holder who illegally sells alcohol to a minor can factually be found liable for injuries ensuing from the sale to a minor, that licensed holder could also be factually found liable for injuries resulting from the illegal sale of alcohol to an intoxicated patron. To hold otherwise would render Shannon meaningless.

In my view, the Shannon decision simply recognized that this court’s earlier cases offered an invalid and artificial immunity from suit to licensed alcohol permittees who had made illegal liquor sales to minors as well as to intoxicated patrons. In doing so, those earlier decisions improperly ignored or failed to discuss relevant general negligence principles. For example, where a licensed alcohol holder violates a statute and regulation by selling alcohol to an intoxicated person, such is evidence of negligence which should be considered by a jury along with other facts and circumstances in the case. AMI Civ. 3rd 601. Moreover, when the acts of two or more persons work together as proximate causes of damage to another, each of those persons may be found to be liable. In a case like the present one, both the liquor vendor’s and intoxicated person’s acts should be considered together when determining each person’s fault. This is true regardless of the relative degree of fault between them. See AMI Civ. 3rd 502. Our negligence law defines proximate cause as being that cause, which “in a natural and continuous sequence, produces damage,” and such a cause is usually a question for the jury. AMI Civ. 3rd 501. Finally, a defendant has the burden of proof to show that following any act on his part, an event intervened (such as a person’s consumption of alcohol) which in itself caused damage completely independent of the defendant’s conduct. AMI Civ. 3rd 503. It seems clear to me that when alcohol is illegally sold to an intoxicated person, a fact issue, at the very least, arises as to whether the licensed liquor holder should share in having created a situation that foreseeably could have resulted in an accident and ensuing injuries.

In early cases, this court utilized its common-law authority to hold licensed liquor vendors free from liability where accidents and injuries resulted after illegal sales to minors and intoxicated patrons. However, if this court is to inject itself into these illegal liquor-sale matters via the common law, that common-law application should include the court’s adherence to general negligence principles and Arkansas’s jury instructions noted above. If the court does so, a licensed liquor vendor would not as a matter of law be immune from suit as has been the result in this court’s prior cases. For these added reasons, I join the majority opinion.

The majority opinion has satisfactorily and conclusively set forth the duty-of-care issue by discussing the General Assembly’s statutory enactments relating to the holders of alcohol licenses. Thus, I need say no more on this point except to emphasize that it is this aspect of the case that differentiates it from the social-host situation. Suffice it to say, I agree with that distinction.

Donald L. Corbin, Justice,

dissenting. This decision, in my estimation, is the most far-reaching judicial fiat I have seen in all of my thirty-three years’ experience in the law. I dissent because I believe that the Arkansas General Assembly did not intend to create civil liability for vendors of alcoholic beverages with the passage of Act 695 of 1989, codified as Ark. Code Ann. § 3-3-218(a) and (b) (Repl. 1996). The majority holds that through section 3-3-218 the General Assembly has established “a duty of reasonable care owed by licensed vendors of alcohol to their patrons.” I disagree. Section 3-3-218 provides nothing more than the grounds for administrative sanctions to be imposed upon vendors by the Alcoholic Beverage Control Board for the failure to operate their businesses in the public interest, in a manner that does not endanger the public health, safety, or welfare. This pales in comparison to the statute relied upon in Shannon v. Wilson, 329 Ark. 143, 947 S.W.2d 349 (1997), that made it a felony to sell alcoholic beverages to minors.

Until the decision in Shannon, this court had consistendy declined to recognize tort liability for vendors who sell alcoholic beverages to persons who then later cause injuries to themselves or others. When this court finally did recognize such liability in Shannon, it was on the basis of the strong public-policy reasons set forth by the General Assembly in prohibiting the sale of alcoholic beverages to minors. See Ark. Code Ann. § 3-3-202(b) (Repl. 1996). Although this court discussed the various regulatory statutes, it relied primarily on the fact that the public policy against selling liquor to minors was so strong that the legislature had declared the proscribed acts to be a felony. On that basis, this court recognized a narrow exception to its long line of cases that had rejected any type of “dramshop” liability. The exception was reserved for situations where vendors knowingly sell alcoholic beverages to minors, based upon the recognition of the General Assembly that minors, as a particular class of persons, deserve added protection from the dangers of consuming alcoholic beverages. This court took great pains to particularize this public policy:

The legislature determined that the prohibition of the selling or furnishing alcohol to minors for monetary gain was of such importance that [section 3-3-202] was amended in 1993 by Act 875 establishing the violation as a Class D felony. In the emergency clause for Act 875, the legislature made the determination that existing statutes criminalizing the sale of alcohol to minors were too lenient and thus heightened the penalty from a misdemeanor to a felony. Specifically, the legislature found, “supplying alcoholic beverages to underage persons is strictly contrary to the public policy and is detrimental to the young people of this State, and that the penalties for this conduct should be increased to deter and to punish these violations of Arkansas law and policy.” 1993 Ark. Acts 875.
In enacting the foregoing statutes, it is clear that the legislature determined it is the public policy of the State of Arkansas to protect minors as a special class of citizens from the adverse consequences of alcohol consumption. The statutes establish an affirmative duty for alcoholic beverage license holders to safeguard against minors purchasing alcohol. These statutes serve to regulate the liquor industry and to promote the safety of our citizenry as a whole. We conclude that the statutes establishing affirmative obligations upon license holders authorized to sell alcohol and the statute classifying the criminal act of selling or furnishing alcohol to minors for monetary gain a felony create a duty for licensees to exercise a high standard of care for the protection of minors. A breach of this duty can lead to a suit for negligence.

Id. at 159-60, 947 S.W.2d at 357 (emphasis added). I joined the majority in Shannon because I, too, believed that there are strong public-policy reasons for preventing the sale of alcoholic beverages to minors. I cannot, however, join the majority here because I believe that it is unsound to base tort liability for vendors on nothing more than regulatory statutes that constitute “grounds for administrative sanctions.” Section 3-3-218(b).

Correspondingly, the majority’s conclusion is not further supported by its reliance on Ark. Code Ann. § 3-3-209 (Repl. 1996). Section 3-3-209 makes it a misdemeanor, not a felony, to “sell, give away, or dispose of intoxicating liquor to a habitual drunkard or an intoxicated person[.]” This court has consistently rejected the theory that section 3-3-209, then codified as Ark. Stat. Ann. § 48-901, was intended to change the common-law rule of nonliability. See Milligan v. County Line Liquor, Inc., 289 Ark. 129, 709 S.W.2d 409 (1986); Carr v. Turner, 238 Ark. 889, 385 S.W.2d 656 (1965). Those particular holdings were not disturbed by the decision in Shannon, 329 Ark. 143, 947 S.W.2d 349.

Moreover, with the holding in this case, we are but one small step away from extending such liability to social hosts. The majority holds:

We emphasize the point that this high duty of care fixed by the General Assembly is on licensed vendors of alcohol, and we view the liability as confined to this group by Act 695. Though we said in Carr v. Turner, supra, that we could not see how liability could be confined to vendors as opposed to social hosts, this was before the enactment of Act 695 establishing the duty of care for licensed vendors. Now it is clear under Shannon v. Wilson, supra, as well as our decision today that the liability does not extend to social hosts.

Despite its declaration to the contrary, by relying on section 3-3-209 in addition to Act 695, the majority has left wide open the possibility that tort liability may also be extended to social hosts in the future. As previously indicated, the behavior prohibited by section 3-3-209 applies to any person who sells, gives away, or otherwise disposes of alcoholic beverages to intoxicated persons. That prohibition does not, however, establish the legislature’s intention to impose tort liability upon all offenders, including social hosts. This court said as much in Carr, 238 Ark. 889, 385 S.W.2d 656, discussing the predecessor to section 3-3-209:

In all the decisions [from other jurisdictions] the liability to the injured person fell solely upon one engaged in the sale of alcoholic beverages. [Ark. Stat. Ann. § 48-901] is not so narrow. It applies to any person who sells or gives away intoxicating liquor to a minor or to an inebriate. By its terms it is equally applicable to a liquor dealer and to a host who serves cocktails in his own home. Perhaps the legislature did not mean for the law to be so sweeping in its scope, but we must give effect to the statute as we find it.
Even if the prohibition against the sale of liquor to an intoxicated person had the comprehensive implications that the appellant attributes to it, we do not see how the impact of the statute could be confined to those who sell liquor, legally or illegally. The same reasoning would be applicable in the case of a person entertaining his friends in his home. He would be compelled to maintain supervision over all his guests and to refuse to serve drinks to those nearing the point of intoxication. Such a principle of liability would be more far-reaching than any decision that we have discovered. We think it clear that the lawmakers, in enacting the statutes now on the books, have not undertaken to extend the offender’s responsibility to the extreme degree now urged by the appellant. It may be that a Dramshop Act is to be desired, but such a measure should be the result of legislative action rather than of judicial interpretation.

Id. at 892, 385 S.W.2d at 658 (emphasis added). In light of the plain language of section 3-3-209, it is not apparent how the majority can attempt to limit its holding to licensed vendors. There will be no logical basis to make an exception for social hosts. Necessarily, this would include the person who serves alcoholic beverages in his home to friends at social gatherings and the employer who provides alcoholic beverages at office parties.

Additionally, I take issue with the fact that the majority has offered no standard for measuring a vendor’s civil liability. Rather, the holding only reflects that “the sale of alcohol by a licensed vendor to an intoxicated person is some evidence of negligence.” The majority offers no guidance as to who qualifies as an “intoxicated person.” Without such guidance, the standard is entirely subjective and will thus be difficult to apply. What may appear to one person to be signs of intoxication may not seem so to another person. We all recognize the “falling down drunk,” but how will we detect that marginal individual? Visible signs of intoxication include not only persons who sway or cannot otherwise stand up, but also persons who have red, watery eyes. Of course, red, watery eyes may be the result of other causes, not just intoxication. Clearly, the question of who is intoxicated becomes illusive. Furthermore, police officers, who have received extensive training in the detection of intoxicated persons, often cannot agree whether someone is intoxicated. Without specific standards, guidelines, and training procedures established by our legislature, it is beyond me how we can expect waitresses and bartenders, not to mention social hosts, to measure a person’s intoxication level with any amount of certainty.

In contrast, the standard set forth in Shannon creating a cause of action against a vendor who “knowingly sells alcohol to a minor,” was taken from the language of section 3-3-202(b)(1). The standard is objective in that it requires a vendor to request proper identification from purchasers before selling alcoholic beverages to them. This standard would not require vendors to receive any specialized training in the recognition of signs of intoxication. Additionally, the trier-of-fact is not left to speculate whether the vendor’s actions were sufficient under the circumstances; rather, the only issue to decide is whether the vendor obtained proper age identification prior to the sale.

In sum, I do not interpret sections 3-3-218 and 3-3-209 as creating tort liability upon vendors who sell alcoholic beverages to intoxicated persons. I shudder to think of the detrimental effect that this holding will have on the lifestyles of Arkansans — restaurants, hotels, private clubs, country clubs, VFW Halls, and Elks Clubs, to name but a few establishments, will be significandy affected by this decision. If and when a “dramshop” act is to be desired, I have no doubt that the General Assembly will make its intention clear, such that this court will not have to resort to stretching licensing and administrative provisions to judicially create such liability. Because such an act has not been created by the legislature, I respectfully dissent.

Arnold, C.J., and Thornton, J., join in this dissent.

       There are nine jurisdictions that refuse to impose a civil cause of action based on ABC statutes and state as their reason that these statutes are meant to regulate an industry and not create civil liability. See Nichols, Drinking/Driving Litigation, § 37:07, n. 9.

       Although proximate causation is usually a question for the jury, where reasonable minds cannot differ, a question of law is presented for determination by the court. Wilson v. Evans, 284 Ark. 101, 679 S.W.2d 205 (1984).


author: Robert L. Brown, Justice.

text:
    James MUNHALL v. STATE of Arkansas
    98-1140
    986 S.W.2d 863
    Supreme Court of Arkansas
    Opinion delivered March 18, 1999

      Dunham & Faught, P.A., by: James Dunham, for appellant.

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

Appellant James Munhall appeals from the chancery court, juvenile division’s adjudication of delinquency and order to pay $1,000 as restitution for a burglary and theft which occurred at a residence in Russell-ville. Munhall had previously entered into a plea agreement and had pled guilty to eight offenses, which resulted in his commitment to the Department of Youth Services. The chancery court held a hearing on the remaining counts of residential burglary and theft. At the hearing, Walter Perks testified that on April 18, 1998, his home was burglarized, and $1,000 in cash was taken. He was not at home at the time and did not know who committed the crime. He also testified that his daughters knew James Munhall, age 14, and that one of them, Nicki, was in the same grade as Munhall at school. Aaron Royce, who was found by the chancery court to be an accomplice to the crimes, testified that he entered the Perks home on the date in question with Munhall and that Munhall took some money — between $100 and $1,000.

After the testimony was concluded, Munhall’s counsel moved to dismiss the burglary and theft charges and argued that the only testimony connecting Munhall to the offenses was that of an accomplice, which is insufficient evidence as a matter of law. The chancery court ruled that even though Royce was an accomplice, his testimony was sufficiently corroborated by Walter Perks’s testimony about the burglary and theft. The court, accordingly, denied the motion to dismiss and found Munhall guilty of both burglary and theft for delinquency purposes. The court ordered Munhall and his father to pay restitution of the amount stolen.

Munhall now contends on appeal that the juvenile court erred in failing to dismiss the charges due to insufficient corroboration of an accomplice’s testimony. The State responds that accomplice testimony need not be corroborated in juvenile proceedings. We first turn to the statute that incorporates the accomplice-corroboration rule. See Ark. Code Ann. § 16-89-111(e)(1) (1987). That statute provides:

A conviction cannot be had in any case of felony upon the testimony of an accomplice unless corroborated by other evidence tending to connect the defendant with the commission of the offense. The corroboration is not sufficient if it merely shows that the offense was committed and the circumstances thereof.

Id.

Munhall argues in his reply brief that this court should apply the accomplice-corroboration rule to juvenile proceedings. This we will not do because the clear legislative intent as evidenced by the plain language of the statute limits its applicability to adults. The State correctly points out that § 16-89-111 (e)(1) speaks in terms of a “conviction” in the “case of felony” and uses the word “defendant.” None of these terms applies to juvenile proceedings. The State also relies on Snyder v. State, 332 Ark. 279, 965 S.W.2d 121 (1998), in which this court held that an adjudication of delinquency in juvenile court is not a conviction for purposes of the Habitual Child Sex Offender Registration Act, codified at Ark. Code Ann. § 16-97-103 (Supp. 1997). Munhall counters that the word “conviction” should not be determinative because the statute was first passed in 1883, and at that time there were no juvenile proceedings. We give this argument little credence. The General Assembly has had ample time to amend § 16-89-111 (e)(1) to make it applicable to juveniles if it was of a mind to do so.

We are aware that many states that have decided this issue have held that the accomplice-corroboration rule applies to juvenile proceedings. See, e.g., T.L.T. v. State, 212 S.E.2d 650 (Ga. Ct. App. 1975); In re Dugan, 334 N.W.2d 300 (Iowa 1983); In re D.S., 306 N.W.2d 882 (Minn. 1981); In re B.S., 496 N.W.2d 31 (N.D. 1993); _ A Minor v. Juvenile Dep’t Fourth Judicial Dist. Court, 608 P.2d 509 (Nev. 1980); C.R.B. v. State, 638 P.2d 1130 (Okla. Crim. App. 1982). The reasoning behind these decisions is that state legislatures have afforded juveniles certain constitutional protections by statute, and the accomplice-corroboration rule is simply the application of another right which is essential for a juvenile to have a fair trial.

We are more persuaded, however, by the court decisions in California. See In re Mitchell P., 587 P.2d 1144 (Cal. 1978); In re E.L.B., 218 Cal. Rptr. 429 (Cal. Ct. App. 1985). In In re Mitchell P., the California Supreme Court held that a finding that the juvenile had committed a crime and was declared a ward of the court is not a conviction within the meaning of the California statute requiring accomplice corroboration. The court noted that a California penal code provision specifically stated that an order adjudging a minor to be a ward of the juvenile court should not be deemed a conviction of a crime for any purpose. The court reasoned that so long as basic due process and other constitutional demands are satisfied, reasonable differences in criminal and juvenile evidentiary standards are still permissible. It further acknowledged that: (1) a juvenile judge is more likely than a jury to be critical of accomplice testimony and to give it appropriate weight, (2) an adult convicted of a serious crime generally is confined longer than a juvenile ward charged with the same offense, and (3) it is incumbent on the legislature to strike the proper balance between rehabilitating a juvenile and requiring corroborative evidence for accomplices in juvenile cases.

The Arkansas Juvenile Code provides as one of its purposes that “the parties are assured a fair hearing and their constitutional and other legal rights recognized and enforced.” Ark Code Ann. § 9-27-302(4) (Repl. 1998). Specific rights afforded to juveniles by statute, among others, are the right to counsel (see Ark. Code Ann. § 9-27-316 (Repl. 1998)), the right against double jeopardy (see Ark. Code Ann. §9-27-319 (Repl. 1998)), the right against self-incrimination for statements made to an intake officer or probation officer during the intake process (see Ark. Code Ann. § 9-27-321 (Repl. 1998)), the right to a detention hearing within 72 hours, if the juvenile is taken into custody (see Ark. Code Ann. § 9-27-326 (Repl. 1998)), and the requirement of proof beyond a reasonable doubt in delinquency hearings (see Ark. Code Ann. § 9-27-325 (h)(2) (A) (Repl. 1998)). It is clear to us that the General Assembly through this statutory scheme has taken concrete steps to assure juveniles of a fair trial.

We conclude that if the accomplice-corroboration rule, as embodied in § 16-89-111(e)(1), is to be extended to juvenile hearings, it must be by legislative enactment.

Affirmed.


author: Annabelle Clinton Imber, Justice. Ray Thornton, Justice,

text:
    Alice L. WALTON v. David LEWIS
    98-512
    987 S.W.2d 262
    Supreme Court of Arkansas
    Opinion delivered March 18, 1999
    [Petition for rehearing denied April 22, 1999.]

      Conner & Winters, PLLC, by: John R. Elrod and Vicki Bronson; Williams & Anderson LLP, by: Leon Holmes, Peter G. Kumpe, and Jeanne L. Seewald, for appellants.

      Estes, Estes & Gramling, PLC, by: Peter G. Estes, Jr.; and Charles L. Stutte, for appellee.

       Corbin and Thornton, JJ., would grant.

   Annabelle Clinton Imber, Justice.

This is an arbitration case. The appellants contend that the trial court erred when it denied their motion to compel arbitration of a tort action Mr. Lewis filed against them. We affirm the trial court’s ruling.

Alice L. Walton owns and controls over fifteen different companies bearing the “Llama” name. The Llama companies involved in this appeal are Llama Capital Services, L.L.C. (“Llama Capital”), Llama Mortgage Services Corp. (“Llama Mortgage”), and Llama Company, L.P. (“Llama Company”). The appellee, David Lewis, was the Senior Managing Director of the Arbitrage Department of Llama Company, which is a member of the National Association of Securities Dealers (“NASD”). Pursuant to his employment with Llama Company, Mr. Lewis executed a “Uniform Application for Securities Industry Registration or Transfer” form in 1993. This form, which is commonly known in the securities industry as the “U-4,” contained the following arbitration clause:

I agree to arbitrate any dispute, claim or controversy that may arise between me and my firm, or a customer, or any other person, that is required to be arbitrated under the rules, constitutions, or by-laws of the organization indicated in Item 10 [the NASD by-laws including the Code of Arbitration Procedures] as may be amended from time to time and that any arbitration award rendered against me may be entered as a judgment in any court of competent jurisdiction.

In October of 1995, Llama Capital and Llama Mortgage entered into a joint venture with Boston Capital Corporation for the buying and selling of commercial mortgages. The joint venture was called “Boston Capital Mortgage Company” (hereinafter “the joint venture”). At the urging of Ms. Walton, Mr. Lewis agreed to serve as a member of the joint venture’s Capital Markets Committee. As a member of this committee, Mr. Lewis contends that he was eligible for the “Capital Markets Bonus Plan,’’which provides that as a “financial incentive ... to maximize the value of the mortgage loan portfolio,” committee members would be entitled to bonus awards from a bonus pool. The bonus plan contains a formula to calculate the bonus pool, which is based upon a percentage of the joint venture’s portfolio net gain. Specifically, Mr. Lewis alleges that he was entitled to approximately $30,000 under this bonus plan. Finally, Mr. Lewis did not complete a U-4 form or any other arbitration agreement in connection with his services to the joint venture as a member of the Capital Markets Committee, and he remained on the Llama Company payroll at all times relevant to this appeal.

Mr. Lewis claims that without his permission or knowledge Ms. Walton, Llama Capital, and/or Llama Mortgage instructed the joint venture to make the bonus payments directly payable to the general partners of the joint venture instead of the individual members of the Capital Markets Committee. The joint venture allegedly complied with this request by paying the funds to the general partners instead of Mr. Lewis. Ms. Walton then allegedly transferred the funds to Llama Company and notified Mr. Lewis that he would not receive those funds.

Accordingly, on August 19, 1997, Mr. Lewis filed a tort action against Ms. Walton, Llama Capital, Llama Mortgage, and Llama Company. In his complaint, Mr. Lewis alleged that the defendants converted his property and intentionally interfered with his contractual relationship with the joint venture. Mr. Lewis concluded his complaint with a prayer for “compensatory damages in an amount not less than $35,000” and for “punitive damages against the separate defendant, Alice L. Walton, in the sum of $2,000,000.00.” The trial court subsequently granted Mr. Lewis’s request to voluntarily nonsuit his claim against Llama Company.

Soon after Mr. Lewis filed his complaint, the defendants filed a motion to dismiss and to compel arbitration. In this pleading, the defendants alleged that the U-4 agreement, the NASD bylaws, and the Federal Arbitration Act required the claim to be submitted to arbitration. On January 28, 1998, the trial court denied the defendants’ motion to compel arbitration because the arbitration agreement did not encompass the subject matter or the parties involved in the underlying dispute.

Ms. Walton, Llama Capital, and Llama Mortgage (hereinafter “appellants”) timely filed a notice of appeal of the January 28, 1998 order denying the motion to compel arbitration. As we have previously explained, the denial of a motion to compel arbitration is an immediately appealable order. Terminix Int’l Co. v. Stabbs, 326 Ark. 239, 930 S.W.2d 345 (1996); American Ins. Co. v. Cazort, 316 Ark. 314, 871 S.W.2d 575 (1994).

I. Standard of Review

The first issue we must resolve in this case is what is the appropriate standard of review. The parties concede, and we agree, that this case is governed by the Federal Arbitration Act, instead of the Arkansas Arbitration Act, because the underlying dispute involves interstate commerce. See Prima Paint Corp. v. Flood & Conklin Mfg., Co., 388 U.S. 395 (1967); McEntire v. Monarch Feed Mills, Inc., 276 Ark. 1, 631 S.W.2d 307 (1982). State and federal courts have concurrent jurisdiction to enforce an arbitration agreement pursuant to the terms of the Federal Arbitration Act. McEntire, supra. Although we have never addressed the standard of review under the Federal Arbitration Act, the Eighth Circuit Court of Appeals has held that the denial of a motion to compel arbitration is reviewed de novo. Telectronics Pacing Syst., Inc. v. Guidant, Corp., 143 F.3d 428 (8th Cir. 1998); Storey v. Shearson Lehman Hutton, Inc., 949 F.2d 1039 (8th Cir. 1991).

Two principles guide this determination. First, the duty to arbitrate is a contractual obligation, and thus we must determine from the language of the arbitration agreement whether the parties intended to arbitrate the particular dispute in question. Morgan v. Smith Barney, Harris Upham & Co., 729 F.2d 1163 (8th Cir. 1984); Merrill Lynch, Pierce, Fenner & Smith v. Hovey, 726 F.2d 1286 (8th Cir. 1984). Second, when the contract language is ambiguous or unclear, a “healthy regard” for the federal policy favoring arbitration requires that “any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration.” Morgan, supra (quoting Moses H. Cone Memorial Hosp. v. Mercury Constr. Corp., 460 U.S. 1 (1983)).

II. NASD Code of Arbitration Procedure 10201

Turning now to the merits, we must decide whether the U-4 agreement, the arbitration clause contained therein, and the NASD Code of Arbitration Procedure 10201 required arbitration of Mr. Lewis’s tort claims against Llama Capital, Llama Mortgage, and Ms. Walton. As mentioned previously, the U-4 agreement Mr. Lewis signed in connection with his employment with Llama Company provided in relevant part that:

I agree to arbitrate any dispute, claim or controversy that may arise between me and my firm, or a customer, or any other person, that is required to be arbitrated under the rules, constitutions, or by-laws of the organization indicated in Item 10 [the NASD by-laws including the Code of Arbitration Procedures] as may be amended from time to time and that any arbitration award rendered against me may be entered as a judgment in any court of competent jurisdiction.

NASD Code of Arbitration Procedures 10201(a), entitled “Required Submission,” provides that:

Any dispute, claim, or controversy eligible for submission under the Rule 10100 Series between or among members and/or associated persons, and/or certain others, arising in connection with the business of such member(s) or in connection with the activities of such associated person(s), or arising out of the employment or termination of employment of such associated person(s) with such member, shall be arbitrated under this Code, at the instance of:
(1) a member against another member;
(2) a member against a person associated with a member or a person associated with a member against a member; and
(3) a person associated with a member against a person associated with a member.

(Emphasis added.)

Pursuant to the unambiguous language of this provision, we believe that a court is required to compel arbitration, under the NASD Code, if the underlying dispute either arises: 1) “in connection with the business of such member(s) or in connection with the activities of such associated person(s),” or 2) “out of the employment or termination of employment of such associated person(s) with such a member.”

A. Arising Out of Employment of the Member

In their briefs, the appellants assert that the “first reason this dispute must be arbitrated is that the dispute arose out of Lewis’s employment with Llama Company.” This is the second subject matter listed above.

Article I(q) of the NASD by-laws defines “person associated with a member” or “associated person of a member” as:

every sole proprietor, partner, officer, director, or branch manager of any member, or any natural person occupying a similar status or performing similar functions, or any natural person engaged in the investment banking or securities business who is direcdy or indirectly controlling or controlled by such member, whether or not any such person is registered or exempt from registration with the Corporation pursuant to these By-Laws.

Furthermore, Article I (m) and (g) of the NASD by-laws define “member” as “any broker or dealer admitted to membership in the Corporation [NASD].” The parties agree that Mr. Lewis is the “associated person” and that Llama Company is the “member.” Moreover, there is nothing in the record that suggests that either Llama Capital, Llama Mortgage, Ms. Walton, or the joint venture are members of NASD. Although the appellants cite many cases in their brief that define what type of dispute “arises out of employment,” we think that the salient issue in this case is whether the dispute over the proceeds of the bonus plan arose out of Mr. Lewis’s employment with Llama Company.

After a careful analysis of the relevant relationships in this case, we must answer this question in the negative. The parties admit that Llama Company is the only NASD member in this case. As an employee of a NASD member, Mr. Lewis signed an arbitration agreement embodied in the U-4 form. The underlying dispute in this case is whether Mr. Lewis is entitled to payment under the terms of the joint venture’s Capital Markets Bonus Plan, and not whether Mr. Lewis is entitled to payment under any agreement with Llama Company. Importantly, the Capital Markets Bonus Plan does not indicate that Mr. Lewis served on the Capital Markets Committee as a representative of any Llama company.

We are also persuaded by the fact that neither the joint venture nor any of its individual members (Llama Capital, Llama Mortgage, or Boston Capital Corporation) are members of NASD. Hence, the appellants claim that the NASD arbitration agreement applies in this case because two of the members of the joint venture, Llama Capital and Llama Mortgage, were one of the fifteen or so business entities loosely associated with Llama Company, the only NASD member. In fact, the only thing that Llama Company has in common with Llama Capital and Llama Mortgage is that all three entities are owned by Alice Walton, who was sued in her individual capacity and not as a director or officer of any of the relevant Llama entities. We agree with the trial court that this connection is much too tenuous to say that the underlying dispute in this case arose out of Mr. Lewis’s employment with Llama Company, the sole NASD “member.”

B. Arising in Connection with the Business of a Member

Next, the appellants turn to the first phrase of Section 10201(a) defining the subject matter of disputes that must be submitted to arbitration. Specifically, they allege in this section of their briefs that “the second reason the subject matter of this dispute must be arbitrated is that it arose out of the business of Lewis’ employer, Llama Company.” For the reasons explained above, we agree with the trial court that the dispute over the bonus-plan proceeds has to do with the business of the joint venture, and not with the business of Llama Company, the sole NASD member in this case.

III. Conclusion

Because we do not think that Mr. Lewis’s tort claims against the appellants fall under the subject matter of the arbitration agreement, we need not address the appellants’ remaining arguments as to whether they are the proper parties to compel arbitration under NASD Code 10201, or whether they may enforce the arbitration agreement as third-party beneficiaries. In sum, although there is a strong federal policy favoring arbitration when the language of the arbitration agreement is ambiguous, we hold that the unambiguous language of the arbitration agreement in this case does not require arbitration of Mr. Lewis’s tort claims against the appellants. Accordingly, we affirm the trial court’s denial of the motion to compel arbitration.

Affirmed.

Corbin, J., Thornton, J., and Smith, J., dissent.

Ray Thornton, Justice,

dissenting. I respectfully dissent from the majority’s conclusion that arbitration is not required. In my view, the agreement entered into by Mr. Lewis and the Llama Company, the U-4, clearly subjects this case to arbitration. The NASD Code of Arbitration Procedure 10201(a) applies to any dispute between or among members and/ or associated person(s) arising out of the employment of a person associated with such member. The code further provides that such dispute shaE be arbitrated under this code, at the instance of “a person associated with a member against a person associated with a member.”

The Llama Company, a member of the NASD, was originaEy joined as a defendant in this case. The Llama Company was the employer of Mr. Lewis, and was the only party to the litigation who was providing employment compensation to Mr. Lewis for providing services to, or at the direction of, the Llama Company throughout the time of this dispute.

Mr. Lewis, as an employee of the Llama Company, was an associated person with the NASD member, the Llama Company, and executed an agreement with his employer (the U-4 agreement) to arbitrate any dispute between himself and his firm “or any other person” as described in 10201(a). The U-4 agreement is an agreement to arbitrate. Alice Walton, the President of the Llama Company, was also a person associated with a member, the Llama Company, and had also executed a U-4 agreement to arbitrate any disputes arising between Ms. Walton and the Llama Company or a person associated with the Llama Company.

This dispute relates to the employment of Mr. Lewis, and the appropriate compensation for services provided by him at the direction of his employer, for the benefit of a joint venture, which was closely associated with his employer, the Llama Company.

The majority holds that the dispute does not arise out of Mr. Lewis’s employment with a member. This conclusion is not supported by the pleadings, stipulations of fact, or affidavits presented in this case. Mr. Lewis was at all times relevant to this suit an employee of the Llama Company. The Llama Company is an NASD member. The Llama Company and all of its sister companies are controlled by Alice Walton. Alice Walton urged Mr. Lewis to perform services for the joint venture. While providing services to this joint venture, Mr. Lewis continued to work for Alice Walton’s Llama Company. All work on the joint venture performed by Mr. Lewis was completed from his Fayetteville Llama Company office. Moreover, the claim asserted by Mr. Lewis was that Alice Walton, and two other defendants, Llama Capital, and/or Llama Mortgage, converted the money in dispute by depositing it with the Llama Company, the NASD member, and Mr. Lewis’s employer. The heart of this dispute involves activities that took place during Mr. Lewis’s tenure at the Llama Company. Specifically, it involves events that were the direct result of a work assignment given to Mr. Lewis by Alice Walton. Accordingly, all conditions set forth in the unambiguous agreement to arbitrate signed by Mr. Lewis with Alice- Walton’s Llama Company should be enforced.

Alice Walton, as a person associated with the NASD member, has the right to demand arbitration. Mr. Lewis sought to avoid this result by dismissing the Llama Company from the litigation on the day before the hearing, but that does not bar Alice Walton’s rights. See American Ins. Co. v. Cazort, 316 Ark. 31, 871 S.W.2d 575 (1994) (holding that one should not be allowed to circumvent arbitration by nonsuiting a party that would subject the matter to arbitration).

In my view, Llama Capital and Llama Mortgage have a status interwoven with that of Atice Walton, and arbitration addressing the merits of the compensation issue will resolve any remaining issues between Mr. Lewis and these two corporations. If not joined in arbitration of the underlying dispute, any separate action against them should be stayed pending resolution of the arbitration dispute. The disposition of this case by submitting it to arbitration is required by the plain and unambiguous language of the U-4 agreements and the Code of Arbitration Procedure.

It must also be noted that the position taken by the majority opinion today is contrary to the overwhelming public policy favoring arbitration. The United States Supreme Court in Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213 (1985), articulated its position on the use of arbitration in cases such as the present case subject to the Federal Arbitration Act. The Court held that:

the Arbitration Act provides that written agreements to arbitrate controversies arising out of an existing contract “shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.” 9 U.S.C. § 2. By its terms, the Act leaves no place for the exercise of discretion by a district court, but instead mandates that district courts shall direct the parties to proceed to arbitration on issues as to which an arbitration agreement has been signed. §§ 3, 4.

Id. The Court also noted that “the Arbitration Act establishes that, as a matter of federal law, any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration.” Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213 (1985); See also Moses H. Cone Memorial Hospital v. Mercury Construction Corp., 460 U.S. 1 (1983); Morgan v. Smith Barney, Harris Upham & Co., 729 F.2d 1163 (8th Cir. 1984). The language used by the Court seems clear that in a case that is governed by the Federal Arbitration Act there is strong public policy in favor of arbitration.

Arkansas has followed the federal courts’ lead and also expressed a preference for resolving matters through arbitration. In Anthony v. Kaplan, 324 Ark. 52, 918 S.W.2d 174 (1996), we explained the advantages to arbitration, noting that as a matter of public policy, arbitration is strongly favored, and is looked upon with approval by courts as a less expensive and more expeditious means of settling litigation and relieving docket congestion. Lancaster v. West, 319 Ark. 293, 891 S.W.2d 357 (1995); Estate of Sandefur v. Greenway, 898 S.W.2d 667 (Mo. App. W.D. 1995); Anthony v. Kaplan, 324 Ark. 52, 918 S.W.2d 174 (1996). We have also foEowed the federal courts view that any doubts and ambiguities of what matters are subject to arbitration should be resolved in favor of arbitration. See Wessell Bros. v. Crossett Sch. Dist. No. 52, 287 Ark. 415, 701 S.W.2d 99 (1985). Thus, I am dismayed that the majority has faded to acknowledge that the U-4 signed by Mr. Lewis clearly subjects him to arbitration at the demand of Ms. Walton, who has also signed a U-4 agreement. I am also concerned that the majority has ignored the strong public policy favoring arbitration as consistently announced by this court and federal courts. For those reasons, I respectfuEy must dissent.

I am authorized to state that Corbin and Smith, JJ., join in this dissent.

       The bonus plan defines “net gain” as “realized gain after payment of all expenses . . . including payment to Llama Company of a fair market investment banking fee in the case of securitization.”

       Mr. Lewis did not name Boston Capital Corporation or the joint venture, Boston Capital Mortgage Company, as defendants.

       On page 64 of their brief, the appellants argue that the trial court should have compelled arbitration under Section 10201 because “[a]ll claims asserted by Lewis arise from the business of Llama Company or his employment with Llama Company and his relationship with person and entities associated with Llama Company.” (Emphasis added.) This argument, however, ignores the plain language of Section 10201, which requires the underlying employment dispute to be between the associated person and “a member,” and not between an associated person and “person and entities associated with” the member.

       It should be noted that in their briefs the appellants do not rely upon the remaining portion of this phrase, which is “in connection with activities of such associated person(s).”

       Any dispute, claim, or controversy eligible for submission under the Rule 10100 Series between or among members and/or associated persons, and/or certain others, arising in connection with the business of such member(s) or in connection with the activities of such associated person(s), or arising out of the employment or termination of employment of such associated person(s) with such member, shall be arbitrated under this code, at the instance of:
      (1) a member against another member;
      (2) a member against a person associated with a member or a person associated with a member against a member; and
      (3) a person associated with a member against a person associated with a member.

       I agree to arbitrate any dispute, claim or controversy that may arise between me, and my firm, or a customer, or any other person, that is required to be arbitrated under the rules, constitutions, or by-laws of the organization indicated in Item 10 [the NASD bylaws including the Code of Arbitration Procedure].