author: Robert H. Dudley, Justice. Robert L. Brown, Justice, Steele Hays, Justice,

text:
    James PLEDGER, Director, Dept. of Finance and Administration of the State of Arkansas v. TROLL BOOK CLUBS, INC.
    93-674
    871 S.W.2d 389
    Supreme Court of Arkansas
    Opinion delivered March 7, 1994

      Cora L. Gentry, for appellant.

      Wright, Lindsey & Jennings, by: John R. Tisdale and Troy A. Price, for appellee.
   Robert H. Dudley, Justice.

This is another in the recent series of use tax cases. The chancellor ruled that Troll Book Club, Inc.’s sales of books in Arkansas were not subject to taxation under the Arkansas Compensating Tax Act of 1949. The Department of Finance and Administration appeals. We affirm.

Appellee Troll is a New Jersey Corporation with its principal place of business in Mahwah, New Jersey. It is neither incorporated nor registered to do business in Arkansas. It has neither a place of business, nor property, nor employees in this State. It markets and sells children’s books throughout the United States by mailing catalogs to teachers who have either previously purchased books or who have requested the catalogs. Each catalog contains about thirty-two individual order forms listing .the current book selections for a particular grade.

The catalogs instruct the teacher on how to collect student orders, how to consolidate those student orders, and how to collect the money for the orders. After collecting the student orders, the teacher fills out one master order form in his or her name and sends it to Troll. Payment is handled in one of three ways: Either (1) parents send checks payable to Troll and the teacher forwards the checks with the orders; or, (2) teachers receive cash from the students, and then, in turn, issue their personal check for the same amount to Troll; or, (3) teachers channel the order through the school’s bookkeeping department and have the school issue the check to Troll.

When the books arrive, the teacher retrieves the student order forms and distributes the books accordingly. Teachers can receive cash or merchandise “bonuses,” depending on the size of the order. Troll estimates its total annual sales in Arkansas at 2.7 to 3 million dollars.

The Director of the Department of Finance and Administration initially assessed Troll a vendor’s use tax in the arbitrary amount of $706,849.87 for the audit period from February 1, 1983, through January 31, 1989. After an administrative hearing, Troll agreed to allow the Department to examine its books, and the arbitrary assessment was recalculated to an assessment of $260,261.70 for the period for the period from 1983 through 1989. A second assessment in the amount of $104,801.85 was made for the period beginning February 1, 1989, and ending June 30, 1991. An administrative decision was issued upholding the Department’s assessments. Troll subsequently posted a bond for the taxes and brought this suit under the Arkansas Tax Procedure Act. The chancellor ruled that Troll’s sales of books to students in this State were not subject to the use tax.

The Standard of Review

The Arkansas Tax Procedure Act, Ark. Code Ann. § 26-18-101 — 904 (Repl. 1992 & Supp. 1993), provides for de novo review of administrative tax decisions by chancery courts. Ark. Code Ann. § 26-18-406(b)(l) (Repl. 1992). Troll was not claiming an exemption from a tax, but rather was claiming that a tax could not be levied upon it. Consequently, the Department had the burden of proving the propriety of the tax, Leathers v. A & B Dirt Movers, Inc. 311 Ark. 320, 325, 844 S.W.2d 314, 316 (1992), and all doubts and ambiguities had to be resolved in favor of the taxpayer. Dunhill Pharmacies, Inc. v. State, 295 Ark. 483, 749 S.W.2d 660 (1988). Although we review these cases de novo, we will not disturb the chancellor’s finding of fact unless they are clearly erroneous. Jones v. Ragland, 293 Ark. 320, 323, 737 S.W.2d 641, 643 (1987).

The Applicable Law

Sections 26-53-101 to 129 of the Arkansas Code Annotated of 1987 impose a use tax on vendors selling personal property for use, storage, or consumption in this State. Section 26-53-102(4) provides that a “vendor” is: “Every person engaged in making sales of tangible personal property by mail order, by advertising, by agent; or by . . . taking orders for sales [of tangible personal property] for use, consumption, or storage in this state;. . . .”

The foregoing statutes provide for the imposition of the tax upon a vendor located out of state if the vendor makes sales of personal property for use, storage, or consumption within this State. However, the Constitution of the United States, through the dormant Commerce Clause, art. I, § 8, cl. 3, limits a state’s ability to tax out-of-state entities when such taxation would burden interstate commerce. The Supreme Court has recently considered this issue in relation to mail order sales and determined that, for such a tax to be upheld under the dormant Commerce Clause, the entity to be taxed must maintain a physical presence in the taxing state. Quill Corp. v. North Dakota, 112 S. Ct. 1904 (1992). The Department sought to prove Troll’s “physical presence” by proving that the teachers, who were physically present in this state, were the agents of Troll. Indeed, if Troll’s agents were present in this State, Troll would be present in this State.

Procedure in This Case

In the trial court, the parties agreed that unless the Department could prove a formal agency relationship between the teachers and Troll, the necessary conclusion by the trial court would be that Troll lacked the “substantial nexus” required by the federal Constitution in order to be taxed by Arkansas. The Department’s trial brief provides: “The only issue for this court to determine is whether the teachers were agents of Troll Book Club, Inc.” Troll agreed and, in its brief to this court, states:

Since appellee [Troll] had no offices, employees, or facilities in Arkansas, the parties agreed and the Chancery Court required appellant [Department] to prove that the teachers who purchased books were appellee’s agents under Arkansas law in order to establish such “substantial nexus.” The [trial] court also concluded, and the parties agreed, that in the absence of such a showing of agency, no substantial nexus between the New Jersey company and Arkansas would exist.

The chancellor ruled on the only issue submitted to her, which was whether an agency relationship had been created. One paragraph of the final order provides:

The Defendant [Department] alleged that teachers are the agents of the Plaintiff [Troll] in the State of Arkansas, thus attempting to bring Plaintiff within the definition of vendor under the Arkansas Compensating Tax Act and provide the substantial nexus between Plaintiff and the State of Arkansas which is required to impose the tax under the Commerce Clause under the United States Constitution. The Defendant has the burden of proof with respect to establishing that teachers are agents of the Plaintiff in the State of Arkansas. The Defendant and the Plaintiff further acknowledge that the Court finds that the Plaintiff does not have a “substantial nexus” with the State of Arkansas unless an agency relationship exists between the teachers and Plaintiff.

The chancellor initially opined that, in order to find an agency relationship, Arkansas law requires both a showing that an agent is authorized to perform for and to bind a principal, and that the principal has a right to control the agent. Next, the chancellor found that the evidence failed to show that Troll authorized the teachers to bind it. In addition, she found that the catalogs which directed the method of sales were for display and convenience, and did not constitute an implied contract to control the teachers’ actions. Finally, the chancellor found that the bonus points were not compensation. In sum, the chancellor found that the Department had failed to prove an agency relationship. In the absence of proof of an agency agreement, the chancellor ruled that Troll could not be subjected to the use tax under Ark. Code Ann. §§ 26-53-101-129 (1987 & Supp. 1993) (R. 133-34).

In oral argument before this court, there was considerable discussion about whether a “substantial nexus” might be found with proof of something less than agency. However, that is an issue we do not reach because it was not raised below, and we have often written that we will not address an issue on appeal which was not raised below. Hubbard v. The Shores Group, Inc., 313 Ark. 498, 855 S.W.2d 924 (1993). Accordingly, the holding in this case is limited to the one issue argued, whether an agency relationship existed.

The burden of proving an agency relationship lies with the party asserting its existence. B.J. McAdams, Inc. v. Best Refrigerated Express, Inc., 265 Ark. 519, 579 S.W.2d 608 (1979). This court has used different definitions of agency that were appropriate for the particular cases, but each of them includes the element of control by the principal. In Evans v. White, 284 Ark. 376, 682 S.W.2d 733 (1985) and Campbell v. Bastain, 236 Ark. 205, 365 S.W.2d 816 (1968), we adopted the definition of agency contained in the Restatement (Second) of Agency. We said the two essential elements of an agency relationship are (1) that an agent have the authority to act for the principal and (2) that the agent act on the principal’s behalf and be subject to the principal’s control. In Hinson v. Culberson-Stowers Chevrolet, Inc., 244 Ark. 853, 427 S.W.2d 539 (1968), we examined the Restatement definition together with a quote from 2 Am. Jur. 13, Agency § 2 and concluded that the essential elements for a showing of the agency relationship were authorization and control. Id. at 855, 427 S.W.2d at 541-42.

The Department contends that the chancellor’s finding was clearly erroneous because Troll exercised control over the teachers through the language contained in its brochures. The brochures describe the books, set dates to tally and return the order forms and money, and instruct the teachers on distributing the enclosed newsletter and filling out the master order. Such instructions fall far short of establishing authorization and control. In fact, the testimony showed that about eighty percent of the teachers who received the brochures did nothing with them except to throw them away.

The Department, in its argument that the chancellor should have found an agency relationship, relies heavily on a California decision, Scholastic Book Clubs, Inc. v. State Board of Equalization, 255 Cal. Rptr. 77 (Cal. App. 1 1989). In that case, involving almost an identical arrangement for selling books, the appellate court held that (1) the teachers operated under the authority of Scholastic in taking the orders, (2) an implied contract existed between Scholastic and the teachers, and (3) Scholastic’s use of teachers to solicit book orders was a sufficient nexus for the California use tax. Id. at 81. The case is on point, but it is clearly distinguished for two reasons. First, it was decided before the Supreme Court decided Quill Corp. v. North Dakota, 112 S. Ct. 1904 (1992), which mandated the bright-line physical presence test for interstate mail order sales. The California appellate court viewed physical presence as only one of the factors to be considered in determining whether a nexus should be found rather than viewing it as the dispositive factor. Second, California agency law, unlike Arkansas agency law, allows the relationship of agency to be implied retroactively by ratification. In Arkansas, the agency relationship must be shown to exist by proof of both authorization and control or else the doctrine of ratification is inapplicable. See E.P. Dobson, Inc. v. Richard, 17 Ark. App. 155, 158, 705 S.W.2d 893, 893 (1986) (citing Runyan v. Community Fund of Little Rock, 182 Ark. 441, 31 S.W.2d 742 (1930)).

Finally, the Department contends that its position is supported by our case of Ragland v. Quality School Plan, Inc., 279 Ark. 256, 651 S.W.2d 447 (1983). Again the argument is without merit for the reason that the case is clearly distinguished. In that case the taxpayer, Quality, represented one hundred publishers of magazines. Quality’s agents, who were present in this State, went to various school districts within the State and recruited students to sell magazines for the publishers. The students sold the magazines throughout the State. The Department assessed a use tax against Quality. Quality sought a refund of the use tax and argued that the students, rather than Quality, were the vendors. See Quality School Plan, 279 Ark. at 257-58, 651 S.W.2d at 448. We held that, under the language of the statute, Quality was a vendor. Id. at 257, 651 S.W.2d at 448-49. The case has no application to the sole issue now before us, whether an agency relationship was proven between Troll and the teachers.

The chancellor’s finding that an agency relationship was not proven is not clearly erroneous.

Affirmed.

Hays, J., dissents.

Brown, J., concurs.

Robert L. Brown, Justice,

concurring. The Department hints at what to me might be a winning argument in this matter but failed to articulate it sufficiently to the chancery court. That argument is that our vendor statute does not mandate an agency relationship as defined by Arkansas case law but rather an agency relationship as defined by statute. The statute reads:

(4) “Vendor” means and includes every person engaged in making sales of tangible personal property by mail order, by advertising, by agent; or by peddling tangible personal property, soliciting, or taking orders for sales of same for storage, use, or consumption in this state; and includes all salesmen, solicitors, hawkers, representatives, consignees, peddlers, or canvassers as agents of the dealers, distributors, consignors, supervisors, principals, or employers under whom they operate or from whom they obtain the tangible personal property sold by them. Irrespective of whether persons are making sales on their own behalf or on behalf of dealers, distributors, consignors, supervisors, principals, or employers, they must be regarded as vendors; and the dealers, distributors, consignors, supervisors, principals, or employers must be regarded as vendors for purposes of this subchapter.

Ark. Code Ann. § 26-53-102 (4) (1987). In my opinion, teachers soliciting on behalf of Troll Book Clubs, Inc. might well qualify as representatives, canvassers, and so forth under the statute. There is no requirement under the statute that control of the teachers is a necessary factor, although control is clearly an essential element of common law agency.

Again, the Department failed to bring this argument sufficiently to the attention of the chancery court and for that reason, our review of this facet of the case is foreclosed. I concur in the affirmance.

Steele Hays, Justice,

dissenting. This case presents a legal

question of singular importance: Whether certain merchandising methods of Troll Book Club, Inc. (Troll) above and beyond mere mail order solicitation provide a “substantial nexus” consistent with the Commerce Clause for purposes of state taxing authority. The case is important to Troll, a nationwide distributor of books and materials, and to the State of Arkansas. It is the first case to reach this court since Quill Corporation v. North Dakota, _U.S._, 112 S.Ct. 1904 (1992), was decided in May, 1992.

The problem with the case from our standpoint is that there are segments of the record which are susceptible of differing interpretations. The majority finds that the parties agreed in the trial court that unless the Department could prove “a formal agency relationship between the Teachers and Troll, the necessary conclusion by the trial court would be that Troll lacked the substantial nexus required by the federal Constitution in order to be taxed by Arkansas.” I am not persuaded that such was the understanding, as I interpret the Department’s position before the trial court and renewed in this de novo appeal, to be whether the Teachers were agents of Troll within the meaning of Ark. Code Ann. §§ 26-53-101 and 102(4) (1987). Section 26-53-101 imposes a use tax on vendors of personal property for use, storage or consumption in Arkansas. Section 26-53-102(4) defines a vendor as:

“Every person making sales of tangible personal property by mail order, by advertising, by agent, or by peddling . . . .soliciting, or taking orders . . . including all salesmen, solicitors, members, representatives, consignees, peddlers, or canvassers as agents of the dealers, distributors, consignors, supervisors, principals, or employers under whom they operate or from which they obtain the tangible personal property sold by them.” [My emphasis.]

By focusing entirely on the word “agent” and disregarding the statute as a whole, the trial court misconstrued the issue to be decided. “A statute must be analyzed in its entirety and meaning given to all portions.” Callahan v. Little Rock Distributing Co., 220 Ark. 443, 248 S.W.2d 297 (1952). “Where it was unnecessary to resort to the rule of ejusdem generis to ascertain legislative intent, the court was without power to disregard any of the terms of an act, but was required to give effect to all words, provisions, and terms employed.” Wiseman v. Affolter, 192 Ark. 509, 92 S.W.2d 388 (1936). And see Ledbetter v. Hall, 191 Ark. 791, 87 S.W.2d 996 (1936) (“Courts must give effect to every part of the act”); Kifer v. Liberty Mutual Ins. Co., 277 F.2d 1325 (C.A. Ark. 1985) (“Particular provision of a statute must be construed with reference to the statute as a whole, not in isolation.”) But even if one accepts the issue as being whether a “formal agency relationship” exists between the teachers and Troll, I believe the majority errs in its application of the law.

The majority notes that Troll sends teachers materials describing books offered for sale, which the teacher distributes to the students, sets a time limit for orders, gives direction for filling out the orders, accepts the orders and money, converts the individual orders to a master order, forwards the master order to Troll, receives and distributes the merchandise when the order is filled and earns a commission based on the amount of merchandise sold. The majority concludes that no agency exists because the foregoing activities by the teachers fall short of authorization and control. Up until the point at which the materials have merely been received by the teachers, the majority is correct.

However, once the teacher undertakes to participate by sending in the orders, the picture changes. At that point a contract between the teacher and Troll has been established. Troll has made an offer to the teacher which the teacher accepts by participating in the program. Once the teacher engages in the invited arrangement, an acceptance occurs and a contract of agency exists. Restatement of Contracts Second, §§ 1, 17, 50, 71 (1979); 1 Lord, Williston on Contracts, § 4:5 (1992); Restatement of Agency, 2d § 15 (1958), Comment a and b. Id. at 83.

a. Manifestation by principal. One becomes an agent only if another in some way indicates to him consent that he may act on the other’s account. This consent can be communicated by any of the means stated in Section 26, including acquiescence by the principal in a series of acts previously done by another as agent. A person is not an agent merely from the fact that he believes he had been authorized to act as agent for another or purports to act as such. It is only where the person acting believes reasonably, from conduct for which the other is responsible, that he is authorized so to act that there is an agency relation. The same consequences as if there were an agency may result, however, from the ratification by the person on whose account the act is purported to be done. See §§ 100-101.
b. Consent by agent. The agency relation exists only if the agent consents to it. A person may, by his sole act, create a power in another to act on his account, but since agency is a fiduciary relation, it can exist only if the other accepts the power. As in the case of contractual relations, the manifestation of the principal may be such that it is not necessary for the acceptance to be communicated to him. Thus, if the principal requests another to act for him with respect to a matter, and indicates that the other is to act without further communication and the other consents so to act, the relation of principal and agent exists. If, under such circumstances, the other does the requested act, it is inferred that he acts as agent unless he manifests that he does not so intend or unless the circumstances so indicate. This inference is strengthened if, being requested to act in the matter, the other does something which he could properly do only as an authorized agent.

Id. at 83.

These comments from the Restatement are applicable to the facts in this case and demonstrate that an agency relationship was established between Troll and the teachers.

Similarly, in Ragland v. Quality School Plan, Inc., 279 Ark. 256, 651 S.W.2d 447 (1983), this court considered marketing methods of Quality School to sell magazine subscriptions in Arkansas by students at various schools. The schools collected the subscription orders, retained a percentage, and submitted the balance of the subscription price to Quality. Quality maintained it was not the vendor within the meaning of our statute. We cited an Alabama case as “persuasive” — Quality School Plan, Inc. v. Alabama, 53 Ala. App. 418, cert. den. 293 Ala. 771 (1974):

There it was found that the students selling subscriptions were salesmen or agents. In the present case it was agreed to by the parties and subsequently held by the court, that magazine subscriptions were items of tangible personal property. Someone was the vendor and we think that of all the candidates the appellee best fits the statutory description of a vendor.
Hi H* H* Hí Hí H* H*
Considering the facts of the instant case we think our conclusion must be that the appellee, through its agents, made sales of tangible personal property within the State of Arkansas. [My emphasis.]

The majority opinion states that Scholastic Book Clubs Inc. v. State Board of Equalization, 207 Cal. App. 734, 255 Cal Rptr. 77 (Cal. App. Dist. 1989), involving an arrangement for selling books, is “almost identical” to this case. However, it finds that California law of agency allows the relationship of agency to be implied retroactively by ratification, whereas in Arkansas agency must be shown to exist by proof of authorization and control. The majority has misread the case. The Scholastic court found the agency relationship to be established in the first instance, finding the offer to have occurred when the bookseller sent its materials to the teachers, the acceptance occurring when the teachers participated in the program. Ratification was only seen as an alternative basis for the agency:

Appellant stresses the fact that the teachers have no initial obligation to act, and argues therefrom that they are not acting under its authority. We conclude otherwise. The teachers are certainly not acting under anyone else’s authority, and once they undertake to act, they are obviously acting under appellant’s authority, and certainly as appellant’s agents or representatives. “An agent is one who represents another, called the principal, in dealings with third persons.” (Civ. Code, § 2295.) The creation of an agency relationship is not dependent upon the existence of a written agreement. The relationship may be implied based on conduct and circumstances.

Thus, the decision in the Scholastic case fully supports the Department’s position here. I suggest that a contract for agency was formed and that the teachers were acting as representatives for Troll. Consequently, there is no question but that Troll is subject to the tax.

As to the matter of substantial nexus, in my estimation Troll’s merchandising operation in Arkansas falls plainly within the broad language of § 26-53-101, limited only by the Commerce Clause as measured by the factors established in National Bellas Hess, Inc. v. Department of Revenue of Illinois, 386 U.S. 753, 87 S.Ct. 1389 (1967), Complete Auto Transit, Inc. v. Brady, 430 U.S. 274, 97 S.Ct. 1076 (1977) and Quill Corporation v. North Dakota,_U.S._, 112 S.Ct. 1904 (1992).

Nor is a substantial nexus dependent upon a finding of an agency relationship. Indeed, even independent contractors have been held to constitute a substantial nexus for purposes of state taxing authority. See Scripto Inc. v. Carson, 362 U.S. 207, 80 S.Ct. 619 (1960) and Ragland v. Quality School Plan, Inc., supra. The most recent case on this subject is Quill Corporation v. North Dakota,____U.S.____, 112 S.Ct. 1904 (1992), where the Supreme Court reviewed National Bellas Hess, Inc. v. Department of Revenue of Illinois, 386 U.S. 753, 87 S.Ct. 1389 (1967), and Complete Auto Transit, Inc. v. Brady 430 U.S. 274, 97 S.Ct. 1076 (1977), among others, in determining whether North Dakota’s use tax impinged on either the Commerce Clause, or the Due Process Clause, and distinguishing the substantial nexus requirements of the two provisions. The court reaffirmed the rule of Bellas Hess, drawing a “sharp distinction” between mail order sellers with “a physical presence” in the taxing state and those which do no more than communicate with customers in the state by mail or common carrier as part of a general interstate business. In this case, it is beyond serious contention that Troll engages in considerably more than mail order mailings and follow-up deliveries as in Quill. Troll capitalizes on the time, position and presence of Arkansas teachers to distribute, promote, gather, consolidate, collect, forward the orders, and to receive and distribute the merchandise, for all of which the teachers earn a commission.

In sum, Troll Book Club has chosen to avail itself of a market for its products consisting of Arkansas school children and their parents and reaches that market through the instrumentality of classroom teachers, a market producing annual sales of $2,700,000 to $3,000,000. It mails 170,000 brochures a year at monthly intervals to coincide with the school year to the teachers at the schools. The brochure contains thirty to forty color tear-outs which the participating teacher distributes to the students. The tear-outs include the order forms and there are forms for use of the students during the summer break. The teachers collect the money, in cash or checks payable generally to Troll, and the merchandise comes to the teacher, who then distributes it to the buyer. In addition to the numerous other activities mentioned, Troll maintains a toll free telephone available for use. That the children, and not the teachers, are Troll’s targeted consumer is plain. In light of those activities, far in excess of anything existing in Quill, I can see no sound reason why the sale of Troll’s merchandise by these methods should not be subject to a reasonable, nondiscriminatory tax in Arkansas. For those reasons I respectfully dissent.


source: Caselaw Access Project

author: Steele Hays, Justice.

license: Public Domain

text:
    Marvin V. CARMICAL and Margaret E. Carmical v. CITY OF BEEBE, Arkansas; Roy E. Simmons, Former Mayor of the City of Beebe, Individually and in his Former Official Capacity; Jessie R. Lay, Individually and in his Former Official Capacity as Code Enforcement Officer of the City of Beebe, Arkansas; Robert W. Herman; Orval Devore; Mary Jane Chudomelka; Eugene McQueen; Bobby Burns, Individually and in their Official Capacity as Members and Former Members of the Beebe Planning Commission and Board of Adjustment
    93-989
    871 S.W.2d 386
    Supreme Court of Arkansas
    Opinion delivered March 7, 1994
    [Rehearing denied April 18, 1994.]

      Rhonda K. Slay den, P.A., for appellants.

      Richard B. Berry, for appellees.

      Corbin, J., not participating.

   Steele Hays, Justice.

Appellants, Margaret and Marvin Carmical, challenge actions of the White County Circuit Court in dismissing their complaint based on grounds of res judicata and statute of limitations. This is the second time they have appealed to this court, therefore we have jurisdiction pursuant to Rule l-2(a)(ll). We dismissed the first appeal because counterclaims were still pending in the trial court and there was not an appealable order pursuant to ARCP Rule 54(b). Carmical v. City of Beebe, 302 Ark. 339, 789 S.W.2d 453 (1990). We do not reach the merits of this appeal because the abstract does not contain all the information necessary to our resolution of the issues presented. Accordingly, we affirm pursuant to Ark. Sup. Ct. R. 4-2(6).

Rule 4-2(6) requires that the abstract be included as part of the brief and contain only the information in the transcript that is “necessary to an understanding of all questions presented to the Court for decision.” We have said that as long as we can determine from a reading of the briefs and appendices material parts necessary for an understanding of the questions at issue, we will render a decision on the merits. Montgomery v. Butler, 309 Ark. 491, 834 S.W.2d 148 (1992). However, the briefs and abstract do not afford such an understanding.

Appellants are a mother and son who applied for and were granted a building permit by appellees, various Beetle city officials. Apparently, in reliance on the building permit, appellants contracted for the construction of a building. Thereafter, appellees issued an order requiring appellants to cease the construction of the building.

Appellants filed suit in federal district court alleging violations of 42 U.S.C. § 1983 as well as other state law violations. The abstract does not tell us what specific state law violations were alleged. The federal district court granted summary judgment for appellees. However, the abstract does not indicate the particular claims that were included in the summary judgment or whether the summary judgment was with or without prejudice. The Eighth Circuit Court of Appeals affirmed the summary judgment and then denied requests for rehearing.

Appellants then filed suit in White County Circuit Court. The abstract tells us only that appellants “allegfed] tort and contract causes of action.” The circuit court ruled the case should be dismissed due to res judicata. We dismissed the appeal of that ruling because appellees’ counterclaims for mental anguish were still pending. Carmical, 302 Ark. 339, 789 S.W.2d 453.

Upon appellants’ request, the White County Circuit Court reconsidered its dismissal and set it aside. Appellants amended their complaint, adding additional parties and additional claims. The abstract of the amended complaint does not specify the additional claims; it merely states that constitutional and civil rights violations were alleged in addition to the tort and contract violations. The circuit court then ruled that res judicata did apply to the action because of the federal court decisions, that the complaint should be dismissed because the limitations period had expired, and granted summary judgment to one of the defendants. The abstract does not reveal on what basis the partial summary judgment was entered or whether it was with or without prejudice. The trial court entered two more orders, one dismissing another defendant, and the other dismissing without prejudice the defendants’ counterclaims. This appeal followed.

The two questions presented for our decision in this appeal are whether a federal court judgment operates as res judicata to bar a state court action and whether a complaint filed in state court can relate back to a complaint filed in federal court so as to toll the statute of limitations. The abstract does not contain sufficient information for us to decide either question.

Under the doctrine of res judicata or claim preclusion, a valid and final judgment rendered on the merits by a court of competent jurisdiction bars another action by the plaintiff or his privies against the defendant or his privies on the same claim or cause of action. Robinson v. Buie,. 307 Ark. 112, 817 S.W.2d 431 (1991). This court has stated that “the test in determining whether res judicata applies is whether the matters presented in a subsequent suit were necessarily within the issues of the former suit and might have been litigated therein.” American Standard, Inc. v. Miller Eng’g, Inc., 299 Ark. 347, 351, 772 S.W.2d 344, 346 (1989). The claim preclusion aspect of the doctrine bars relitigation in a subsequent suit when: (1) the first suit resulted in a judgment on the merits; (2) the first suit was based upon proper jurisdiction; (3) the first suit was fully contested in good faith; (4) both suits involve the same claim or a cause of action which was litigated or could have been litigated but was not; and (5) both suits involve the same parties or their privies. Ward v. Davis, 298 Ark. 48, 765 S.W.2d 5 (1989).

Before we can determine if res judicata applies to the present case, we must be able to determine the specific claims that were presented in both the federal court action and the state court action. Ward, 298 Ark. 48, 765 S.W.2d 5. The abstract of the complaint filed in federal district court states only that “The appellants alleged a 42 U.S.C. Section 1983 action as well as state law claims.” The abstract of the order granting summary judgment does not offer any clarification; it merely states that summary judgment was entered on appellees’ motion and that “The Court dismissed the federal as well as the pendent state claims.” The abstract of the complaints filed in circuit court states only that tort and contract causes of action were alleged in addition to constitutional and civil rights violations. The abstract of the circuit court’s orders does not supply the missing information. The identification of the specific claims that were raised in both suits is necessary to an understanding of the res judicata issue. Therefore, appellants’ abstract is flagrantly deficient on this point.

As for the second question presented for our decision, the relation back of the state court complaint to the federal court complaint, appellants’ abstract is also deficient. According to ARCP Rule 15(c) and Bridgman v. Drilling, 218 Ark. 772, 238 S.W.2d 645 (1951), the primary authorities on which appellants rely, we must have the following information to decide the relation back question and it does not appear in the abstract: the specific claims raised in both complaints; the facts sufficient to determine whether the two cases arose out of the same conduct, transaction or occurrence; and whether all parties received notice of the subsequent complaint. Therefore, even assuming, without deciding, that ARCP Rule 15(c) applies to two separate complaints filed in federal court and state court, the abstract is flagrantly deficient and we cannot reach the merits of this point.

In summary, the transcript of this case is 1419 pages. Appellants’ abstract is four and one-half pages. The notice of appeal is completely omitted from the abstract. The entire abstract, including the pleadings, is written in narrative form and contains only the barest terms. Previously, we have held such an abstract to be flagrantly deficient. D.J. v. State, 308 Ark. 37, 821 S.W.2d 7 (1992). While nearly all the required pleadings and orders are noted in the abstract, their essential components are missing, rendering a decision on the merits impossible. This court has held that “When an abstract’s deficiencies are so flagrant that a decision is well nigh impossible, we will affirm.” Haynes v. State, 313 Ark. 407, 409, 855 S.W.2d 313, 315 (1993).

For the reasons stated, the abstract in the present case renders a decision on the merits impossible and the case must be affirmed for failure to comply with Rule 4-2(6).

Corbin, J., not participating.


text:
    Ravin Donnell EVERETT v. STATE of Arkansas
    CR 93-1214
    871 S.W.2d 568
    Supreme Court of Arkansas
    Opinion delivered March 7, 1994

      William R. Simpson, Jr., Public Defender, by: Kent C. Krause, Deputy Public Defender, for appellant.

      Winston Bryant, Att’y Gen., by: Kent G. Holt, Asst. Att’y Gen., for appellee.
   Steele Hays, Justice.

This appeal comes from a conviction for capital murder. The only issue is the trial court’s refusal to suppress a statement made by appellant to the police. There is no merit to the argument.

Ravin Everett, appellant, was charged with the capital murder of Marvin Donley on September 5, 1992. On September 8, 1992, appellant was taken into custody by the Little Rock Police Department and while in their custody, gave an inculpatory statement. On April 2, 1993, a hearing was held on the appellant’s motion to suppress the custodial statement. The motion was denied. On July 21, 1993, a jury trial was held and appellant was found guilty of capital murder and sentenced to life without parole. Appellant appeals from that conviction. Appellant argues his statement to the police should have been suppressed for three reasons: 1) he was intoxicated at the time of the interrogation; 2) he asked for an attorney and that the questioning cease, but the interrogation continued; and 3) the interrogation tactics of the police render the confession involuntary.

Custodial statements are presumed to be involuntary, Moore v. State, 301 Ark. 1, 791 S.W.2d 698 (1990), and on appeal the burden is on the state to show the confession was made voluntarily, freely, with understanding, and without hope of reward or fear of punishment. Sanders v. State, 305 Ark. 112, 805 S.W.2d 953 (1982). The issue of voluntariness of an inculpatory statement given by an accused in custody is one this court determines after considering the totality of the circumstances in the case. It is for the trial court to decide questions of credibility and conflicts in testimony and we will not reverse unless the decision is clearly erroneous. Patterson v. State, 306 Ark. 385, 815 S.W.2d 377 (1991).

The officers who interrogated appellant testified that a Miranda form was completed advising appellant of his constitutional rights. Detective Ronnie Smith testified Everett told them he had completed the ninth grade, repeated the tenth grade and could read and write. Smith said Everett read the rights form along with them, indicated he understood it and signed the waiver portion of the form. •

Smith further testified Everett was interrogated in a 10 x 12 room and did not appear to be under the influence of alcohol or drugs, nor did he exhibit erratic or unusual behavior. Smith said at no time did Everett request an attorney or ask that the interrogation cease. Other detectives testified to the same effect.

Appellant testified he was under the influence of drugs and alcohol at the time of the interrogation and had requested an attorney. Appellant’s mother corroborated his claim that he had been drinking heavily that day. While being under the influence of alcohol or drugs is not in itself sufficient to invalidate a confession, Davis v. State, 308 Ark. 481, 825 S.W.2d 584 (1992), the issue was resolved by the trial court as a matter of credibility. We discussed the voluntariness of custodial statements in some detail quite recently in Thomas v. State, 315 Ark. 504 (CR93-520, January 18, 1994).

Obviously, the trial court discounted appellant’s claim that he had requested an attorney.

Appellant argues the police used impermissible tactics — they admitted they wanted to get a confession from him and that a second set of detectives interrogated him, thus the confession was involuntary. Appellant has cited no authority except Miranda, and we find nothing in that opinion pertinent to the facts of this case which would prohibit such methods. Having reviewed independently the testimony of the detectives who interrogated appellant, we are satisfied the interrogation was handled in accordance with Miranda.

Affirmed.

Corbin, J., not participating.


author: David Newbern, Justice.

text:
    John L. CHRISTOPHER v. Mary N. CHRISTOPHER
    93-960
    871 S.W.2d 398
    Supreme Court of Arkansas
    Opinion delivered March 7, 1994

      Michael Knollmeyer, for appellant.

      Hubert W. Alexander, for appellee.
   David Newbern, Justice.

This is a divorce case. The question presented is the extent to which the appellee, Mary N. Christopher, is entitled to share in the military retirement pay of the appellant, John L. Christopher. The parties were first married for some 11 years while Mr. Christopher was on active duty in the United States Air Force. They divorced before Mr. Christopher’s right to military retirement pay vested. Some eight months later they remarried and remained so for an additional nine years during which Mr. Christopher completed 20 years of service and his right to retirement pay vested. He retired in 1991. They again divorced in 1993, and the Chancellor held that Mrs. Christopher was entitled to a percentage of the retirement pay based upon the total number of years she was married to Mr. Christopher. Mr. Christopher contends the Chancellor should have considered only the years of the second marriage. We affirm the decree.

If a divorcing spouse has achieved an entitlement to military retirement pay, that entitlement is an asset which may be divided between the parties to the divorce. Young v. Young, 288 Ark. 33, 701 S.W.2d 369 (1986). If, however, the divorcing military spouse has not served for a time sufficient to have earned the right to receive military retirement pay, the right has not “vested” and there is no asset to be divided upon divorce. Burns v. Burns, 312 Ark. 61, 847 S.W.2d 23 (1993); Durham v. Durham, 289 Ark. 3, 708 S.W.2d 618 (1986).

Mr. Christopher cites Bagwell v. Bagwell, 282 Ark. 403, 668 S.W.2d 949 (1984), for the proposition that, “when parties are married to each other twice, property which either received in the first divorce is not marital property in the second divorce.” That case involved a division of land between the parties upon the first divorce, and we held that, upon the second divorce, the asset divided in the earlier proceedings was not to be considered. As there was no military retirement pay asset to be divided upon the first divorce in this case, we cannot find the relevancy of the Bagwell case.

Perhaps equally inapplicable is Mrs. Christopher’s citation of McMurtray v. McMurtray, 275 Ark. 303, 629 S.W.2d 285 (1982), where in the first divorce property settlement agreement the wife gave up her interest in a non-transferable stock account in exchange for receiving the equity in a home. There it was held that it was the intention of the parties, upon second marriage, to abrogate their earlier property settlement agreement. Again, in the case now before us there simply was no asset to be dealt with upon dissolution of the first marriage.

Mr. Christopher has also presented cases from other jurisdictions in an attempt to bolster his position. We do not find these cases persuasive. Our previous holdings along with Ark. Code Ann. § 9-12-315(b) (Supp. 1993) control the issue involved in this case.

Our marital property statute, § 9-12-315(b), defines “marital property” as “all property acquired by either spouse subsequent to the marriage,” with exceptions not relevant here. The right to military retirement pay was acquired by Mr. Christopher subsequent to the second marriage.

Section 9-12-315(a) provides:

All marital property shall be distributed one-half (1/2) to each party unless the court finds such a division to be inequitable. In that event the court shall make some other division that the court deems equitable taking into consideration: . . . (viii) Contribution of each party in acquisition, preservation or appreciation of marital property, including services as a homemaker. ....

In cases where there has been continuous marriage between parties such as Mr. and Mrs. Christopher, we have approved a division of the vested right to military retirement pay based upon the contribution of the non-military spouse calculated in terms of the number of years of marriage during the service of the military spouse. Askins v. Askins, 288 Ark. 333, 704 S.W.2d 632 (1986); Marshall v. Marshall, 285 Ark. 426, 688 S.W.2d 279 (1985). That was the Chancellor’s approach here. She held the parties were married for 16 of the 24 years Mr. Christopher served in the Air Force, thus Mrs. Christopher was entitled to 50% of 2/3, Le., 1/3, of Mr. Christopher’s military retirement pay.

We find no fault in the result reached. We are given no reason to hold that Mrs. Christopher’s contribution was of less value because some of it occurred during the first marriage. As this asset was one acquired by Mr. Christopher subsequent to the second marriage and did not exist for the purpose of consideration or division in the earlier divorce, it was not improper to assess Mrs. Christopher’s total contribution to the acquisition of it. Affirmed.

Brown, J., concurs.-

Corbin, J., not participating.


author: Tom Glaze, Justice.

text:
    Billy Joe BRITTON v. STATE of Arkansas
    CR 93-832
    870 S.W.2d 762
    Supreme Court of Arkansas
    Opinion delivered March 7, 1994
    [Rehearing denied April 18, 1994.]

      Kearney Law Offices, by: John L. Kearney, for appellant.

      Winston Bryant, Att’y Gen., by: Sherry L. Daves, Asst. Att’y Gen., for appellee.

      Corbin, J., not participating.

   Tom Glaze, Justice.

On April 7, 1993, Billy Joe Britton was convicted as a habitual for the delivery of a controlled substance. At trial, the state offered evidence that, on October 14, 1989, Officer Willie Robinson, an undercover investigator, and a confidential informant made a controlled buy from Britton of one small plastic bag of cocaine for twenty dollars. Britton was not charged with the offense until the state arrested him on August 19, 1992, and filed an information on September 11, 1992. The original and a later amended information filed on March 10, 1993, both reflected the date of the offense was October 14, 1991. The first amended information added that Britton was a habitual offender. On April 6, 1993, the day before Britton’s trial, the state again amended the prior information to reflect that Brit-ton’s alleged criminal offense occurred on October 14, 1989.

For reversal, Britton presents four points, but none of them are properly preserved on appeal. He claims that (1) the state’s information as amended did not correctly charge him with delivery of cocaine or as a habitual, (2) the delay in bringing the charges prejudiced him, (3) he was improperly denied the testimony of his sole alibi witness, and (4) a prison photograph of him was improperly displayed to the jury. As pointed out by the state, the trial court’s rulings on each of these objections are fatally absent from the abstract of record. Lenell v. State, 283 Ark. 162, 671 S.W.2d 741 (1984). Our rule is clear that, without proper abstracting, seven justices would be constrained to pore through the sole record of the case on file with the clerk of the supreme court in search of the error(s) propounded by the defense. We have said repeatedly, and our rule so states, that we will not go to the record in search of prejudicial error. Haynes v. State, 313 Ark. 407, 855 S.W.2d 313 (1993).

Besides not having the trial court’s rulings before us, we must also mention the extreme difficulty we have in understanding or reaching the errors assigned in this appeal because of the abbreviated or limited abstract provided the court. Britton’s abstract consists of nine pages and omits pertinent pleadings and testimony set out in a transcript which contains 286 pages. Such omissions prevent us from having a full and fair understanding of the arguments made by the parties in this appeal. For example, much of.Britton’s argument for seeking reversal involves his contention that he was misled to believe up until the trial date that he was defending against an offense which purportedly occurred on October 14, 1991 — a date which provided him a perfect alibi because he was then in the penitentiary serving a sentence for yet another criminal offense. He claims the state’s amending its information a day before trial caused him to defend against a different crime, namely, one occurring on October 14, 1989, not October 14, 1991 as originally charged.

Important documents contained in the transcript are omitted from Britton’s abstract and support the state’s position that the October 14, 1991 date in the original and first amended information was a typographical error and should have read 1989. In fact, those documents and pleadings reflect Britton was well aware that the state’s case from its inception centered on Brit-ton’s having committed the alleged offense on October 14, 1989. The state’s affidavit and arrest warrant and attached police report reflect the offense occurred on October 14, 1989, as did the state’s criminal laboratory report. Even Britton’s pro se motions referred to October 14, 1989 as being the date of the offense. The state’s documents .were filed and available as early as September 11, 1992, the date of filing of the original information.

Other pertinent matters, including exhibits (prosecutor’s letters to Britton’s counsel), state responses, and colloquy between the court and counsel, are absent from the abstract that would be relevant to this appeal, but we need not belabor our point further. Suffice it to say, the abstract of record before this court is seriously insufficient and fails to provide a record which would allow us a full and fair understanding of the issues presented or to permit a decision in this case. Therefore, we affirm.

Corbin, J., not participating.

      We note that one justice’s review of the sole transcript of the proceedings below sets forth concise reasons given by the trial court for ruling as it did on each objection that Britton made below and now argues on appeal. Britton, however, fails to abstract these rulings or mention them in his argument.


author: Tom: Glaze, Justice.

text:
    Frances HOUSE v. WAL-MART STORES, INC.
    93-970
    872 S.W.2d 52
    Supreme Court of Arkansas
    Opinion delivered March 7, 1994

      Delay Law Firm, by: R. Gunner Delay, for appellant.

      Daily, West, Core, Coffman & Canfield, by: Jerry Lee Can-field, for appellee.
   Tom: Glaze, Justice.

This appeal involves a slip and fall case. Appellant Frances House slipped in a liquid disinfectant and fell at a Wal-Mart Store in Waldron. Ms. House brought this action against appellee Wal-Mart Stores, Inc. for injuries sustained in the slip and fall. Wal-Mart moved for a directed verdict at the close of the evidence, and the trial court granted the motion. Ms. House argues on appeal that the trial court should have permitted the issue of Wal-Mart’s negligence to be decided by the jury.

On July 27, 1992, Ms. House was shopping in the Wal-Mart store. As the appellant neared the check-out line, she noticed a liquid on the floor. The liquid was a disinfectant which had a pine odor, and the spill was approximately ten to twelve inches in diameter. Ms. House walked around the spill and took her place in the check-out line. While Ms. House was standing in line, she stepped towards a display rack to pick up a cigarette lighter. As she was stepping back to the check-out line, Ms. House slipped and struck her foot on the display table. As a result, Ms. House sustained a fractured toe.

The law is well-settled that a property owner has a general duty to exercise ordinary care to maintain the premises in a reasonably safe condition for the benefit of invitees. Mankey v. Wal-Mart Stores, Inc., 314 Ark. 14, 858 S.W.2d 85 (1993). In order to prevail in a slip and fall case, a plaintiff must show either (1) the presence of a substance upon the premises was the result of the defendant’s negligence, or (2) the substance had been on the floor for such a length of time that the appellee knew or reasonably should have known of its presence and failed to use ordinary care to remove it. And the mere fact a person slips and falls does not give rise to an inference of negligence. Sanders v. Banks, 309 Ark. 375, 830 S.W.2d 86 (1992); Boykin v. Mr. Tidy Car Wash, Inc., 294 Ark. 182, 741 S.W.2d 270 (1987). Also, the presence of a foreign or slick substance which causes a slip and fall is not alone sufficient to prove negligence, but instead, it must be proved that the substance was negligently placed there or allowed to remain. Mankey, 324 Ark. 14, 858 S.W.2d 85.

Here, House makes no contention that the presence of the disinfectant was on the floor as a result of Wal-Mart’s negligence. Nor do the parties dispute the testimony or evidence below, although they do draw different inferences. House’s sole argument is that the pine odor of the disinfectant was strong enough to put Wal-Mart employees, who were within a fifteen-to-twenty foot radius of the spill, on notice that the disinfectant was present. Having such notice, House claims the employees failed to use ordinary care to. remove the spill.

House specifically contends that, a few minutes before her fall, Sue Young, a Wal-Mart employee, had walked in the alley where the spill was present and House argues that it was inconceivable that, because of the pine scent, Young would not have detected the spill. House also points out the Wal-Mart manager testified that he smelled the disinfectant when he was about fifteen feet from the spill. Based upon the manager’s testimony, House further asserts that a Wal-Mart check-out employee, located only twenty feet from the spill, should also have been aware of the disinfectant’s presence because of the strong pine smell.

Wal-Mart counters, saying that no evidence was presented showing that any Wal-Mart employee had knowledge of the spill prior to House’s fall or that anyone reported the spill. To the contrary, Wal-Mart employees testified, indicating they had no such knowledge. And the manager further observed that, when he saw the spill after House’s fall, he saw no tracks through the spill, thus suggesting the spill had been present a short duration.

We have recognized the length of time a substance is on the floor is a key factor, and the burden is on the plaintiff to show a substantial interval between the time the substance appeared on the floor and the time of the accident. Monkey, 314 Ark. at 17-18, 858 S.W.2d at 87. The fact an employee was in the vicinity where a foreign substance was later discovered is not sufficient to raise an inference that a spill was negligently overlooked. Id. See also Safeway Stores, Inc. v. Willmon, 289 Ark. 14, 708 S.W.2d 623 (1986) (employees had been up and down the aisle for an hour and fifteen minutes before the fall and did not see the substance); Sanders, 309 Ark. 375, 830 S.W.2d 861 (employee had gone down the aisle ten to fifteen minutes before the accident and saw no spill on the floor); Skaggs v. White, 289 Ark. 434, 711 S.W.2d 819 (1986) (employee had walked down the aisle five minutes before the occurrence and did not observe the foreign matter).

In sum, in viewing the evidence in the light most favorable to House, we conclude her proof is insufficient to show the substance or disinfectant in issue here was on the Wal-Mart floor for such a period of time that Wal-Mart reasonably should have known of its presence. No one knew when the spill occurred, and at most, the evidence reflects the liquid had been on the floor for five or six minutes before House’s fall. While House suggests that the disinfectant’s strong odor should have caused a quick discovery and removal of the spill by Wal-Mart employees, it would be pure conjecture to draw such an inference. The evidence was clear that the Wal-Mart employees were unaware of the spill, and none of them smelled the disinfectant prior to House’s fall. Again, although Wal-Mart employee Young may have been in the vicinity of the spill before the fall, this court, as previously mentioned, has held such presence is insufficient to raise an inference that a spill was negligently overlooked. Here, Young denied smelling or seeing the disinfectant.

Because we hold House failed to present substantial evidence showing an inference of negligence on Wal-Mart’s part, we affirm the trial court’s decision directing a verdict in WalMart’s favor.

Dudley and Corbin, JJ., not participating.