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

text:
    William Henry FURR a/k/a Fuhr v. STATE of Arkansas
    CR 87-42
    761 S.W.2d 160
    Supreme Court of Arkansas
    Opinion delivered December 5, 1988

      Pruitt & Hodnett, by: Roger T. Jeremiah, for appellant.

      Steve Clark, Att’y Gen., by: Clint Miller, Asst. Att’y Gen., for appellee.
   Steele Hays, Justice.

By this appeal we are again asked to decide whether a factual basis for a plea of guilty was established in the trial court.

In January 1984 appellant pled guilty to being a felon in possession of a firearm, and, as an habitual offender, to having committed an aggravated robbery. The plea was tendered as part of a plea agreement for a sentence of twenty years with five years suspended for aggravated robbery and a concurrent sentence of five years for possession of a firearm. At the close of the plea hearing, the circuit judge accepted the pleas and imposed the sentence proposed by the plea agreement.

On June 18, 1986, appellant filed a motion to withdraw the guilty pleas pursuant to A.R.Cr.P. Rule 26. The trial court treated the motion as a petition for post-conviction relief under Rule 37 and scheduled an evidentiary hearing on the petition. At the conclusion of the hearing the circuit judge denied the petition and appellant has appealed on two assignments of error: one, at the plea hearing the trial court failed to establish a factual basis for the pleas and, two, appellant received ineffective assistance of counsel in that his attorney failed to investigate appellant’s defenses, failed to file pretrial motions and but for these errors appellant would not have pled guilty. We reject the arguments and affirm the denial of the petition.

The state does not take issue with the appellant’s contention that no factual basis was established at the plea hearing, rather, it argues that a factual basis for the guilty pleas was shown at the post-conviction hearing, which under our cases remedies any deficiency which may have existed at the plea hearing. Snelgrove v. State, 292 Ark. 116, 728 S.W.2d 497 (1987); Branham v. State, 292 Ark. 355, 730 S.W.2d 226 (1987); Muck v. State, 292 Ark. 310, 730 S.W.2d 214 (1987); Treadwell v. State, 271 Ark. 823, 610 S.W.2d 884 (1981); Davis v. State, 267 Ark. 507, 592 S.W.2d 118 (1980). While we might well dispose of the issue on that basis, we prefer to deal with the plea hearing, as we believe our cases have resulted in some confusion as to the proper method of conducting a plea hearing under A.R.Cr.P. Rules 24.4, .5 and .6.

There are three phases to the entry of a guilty plea: first, under Rule 24.4 the trial judge must address the accused personally and determine that he understands the nature of the charge, the mandatory minimum sentence, if any, the possible maximum sentence, the effect prior convictions or additional charges could have on the sentence, and that by pleading guilty or nolo contendere, the accused waives the right to a jury trial and to be confronted with the witnesses (except where the death penalty is sought).

Secondly, Rule 24.5 requires the trial judge to determine that the plea is voluntary, whether the plea is the result of a plea agreement and, if so, that the provisions of the plea agreement be stated. Under Rule 24.5 the trial judge must also address the accused personally and determine whether any force, threats or promises, other than the plea agreement, induced the guilty plea.

The third phase of the plea hearing has to do with establishing a factual basis for the plea. A factual basis requires the existence of sufficient evidence from which a judge may fairly conclude that a defendant could be convicted if he chose to stand trial. American Bar Association, Standards For Criminal Justice, No. 14-1.6. A factual basis is most commonly established by inquiry of the accused, of the prosecutor and an examination of the presentence report. W. LaFave and J. Israel, Criminal Procedure § 20.4(f) (1984). Rule 24.6 provides that the trial judge will not accept a plea of guilty or nolo contendere “without making such inquiry as will establish that there is a factual basis for the plea.” Significantly, Rule 24.6, unlike Rule 24.4 and Rule 24.5, contains no requirement that the accused be addressed personally by the trial judge in determining the factual basis for a guilty plea. By separating this step in the procedure from those steps which must be addressed directly to the accused, the framers of the rules did not contemplate that only the accused could establish a factual basis for a plea of guilty or nolo contendere. Indeed, as the Commentary to Rule 24.6 observes, the existence of a factual basis is “a legal conclusion.” The evident purpose of the factual basis requirement is to prevent an accused from unwittingly pleading guilty on the mistaken assumption that his conduct was unlawful when in fact it was not. See American Bar Association, Standards for Criminal Justice, No. 14-1.6(a) (Commentary). Since our criminal rules were patterned and adopted from those standards, it seems clear that the rules contemplate that a factual basis may be established either by addressing the accused, defense counsel, the prosecutor, or all three.

Appellant relies primarily on McDaniel v. State, 288 Ark. 629, 708 S.W.2d 613 (1986), where we stated that a factual basis can be established only by addressing the accused personally. It may well be that the decision in McDaniel turned on the fact that these rules were considered as one, and the dictates of A.R.Cr.P. Rule 24.4 were largely ignored at McDaniel’s plea hearing. However, in spite of language to the contrary in McDaniel, in establishing the factual basis of a defendant’s charge and plea, there is no single method by which the requirement of Rule 24.6 can be achieved. Clearly, we have no rule that the factual basis for a defendant’s plea must be furnished only by the defendant. We have held that the court must ask the defendant if he did the things of which he stands accused and is pleading guilty because he is guilty. Smith v. State, 291 Ark. 496, 725 S.W.2d 849 (1987). However, in Smith the Rule 24.6 requirement was met by the prosecutor reciting the underlying facts of the crimes with which the defendant was charged, and the appellant admitting his guilt. Here, the court recounted the charges and bases of the crimes in the presence of the defendant, defense counsel and prosecutor and the defendant acknowledged his guilt and described unlawful conduct both orally and by signing his plea agreement. Defendant’s counsel also confirmed in open court and in the presence of the defendant, the truthfulness of the factual basis recited by the court. That, we believe, entirely suffices.

With that attempted clarification, we turn to the proceedings at the appellant’s plea hearing. Major excerpts from the plea hearing follow, with significant portions underlined:

THE COURT:
Are you William Henry Fuhr?
MR. FUHR:
Yes, sir.
THE COURT:
Are you represented by Mr. Fred Hart of the Public Defender’s Office, your court-appointed attorney?
MR. FUHR:
Yes, sir.
THE COURT:
You are charged in Case No. 83-203 with the offense of felon in possession of a firearm, a Class “D” Felony, and being a habitual criminal, that on the 19th day of March 1983, you did unlawfully and feloniously possess a firearm, a .38 caliber Colt revolver, after having been convicted of a felony. Count II, that you having been previously convicted of three or more felonies on the day of the commission of the above charged felony, are subject to an extended period of imprisonment in accordance with Ark. Stat. Ann. Section 41-1001. Do you understand the charge of felon in possession of a firearm?
MR. FUHR:
Yes, sir.
THE COURT:
Do you understand that habitual criminal is a way of enhancing that penalty in that case, increasing it, do you understand that?
MR. FUHR:
Yes, sir.
THE COURT:
In Case No. 83-204, you are charged with the offense of aggravated robbery, a Class “Y” Felony and habitual criminal, that on the 10th day of March 1983, you did unlawfully and feloniously threaten to immediately employ physical forcé upon Fletcher Singleton for the purpose of committing a theft and did so while armed with a deadly weapon, to wit: a pistol. Count II: that you, having been previously convicted of three or more felonies on the day of the commission of the above charged felony, are subject to an extended period of imprisonment in accordance with Ark. Stat. Ann. Section 41-1001. Do you understand the aggravated robbery charge and the habitual criminal would enhance that penalty, do you understand that?
MR. FUHR:
Yes, sir.
THE COURT:
Aggravated robbery, a Class “Y” Felony, carries from ten to forty years or life imprisonment, do you understand that?
MR. FUHR:
Yes.
THE COURT:
Possession of a firearm, a Class “D” Felony, carries up to six years in the Department of Correction and up to a Ten Thousand Dollar fine or both, do you understand that?
MR. FUHR:
Yes.
THE COURT:
Mr. Saxon, what does habitual criminal do to the aggravated robbery, as far as possible penalty?
MR. SAXON:
It increases the minimum.
MR. HART:
(Appellant’s attorney): It is twenty to sixty to life, Your Honor.
THE COURT:
Do you understand that? (T. 53-54)
MR. FUHR:
Yes, sir.
THE COURT:
What does it do to the felon in possession of firearm, up to thirteen years?
MR. HART:
Six to twelve, Your Honor.
THE COURT:
Do you understand that you are subject to six to twelve years in the Department of Correction if the habitual criminal is involved and up to a ten thousand dollar fine? Do you understand that those could be made consecutive, that is, added together, instead of being made concurrent, do you understand all that?
MR. FUHR:
Yes, sir.
THE COURT:
So we have twenty to sixty or life and from six to twelve and a ten thousand dollar fine, do you understand that?
MR. FUHR:
Yes, sir.
THE COURT:
Mr. Hart, do you think he understands both the possible penalties and the charges?
MR. HART:
Yes, Your Honor. (T. 55)
THE COURT:
I show you two documents here Mr. Fuhr, a plea statement of guilty and statement of the Court respecting a partial suspension of sentence, did you read and understand these two documents?
MR. FUHR:
Yes, sir.
THE COURT:
Any questions about them?
MR. FUHR:
No, sir.
THE COURT:
Did you sign them?
MR. FUHR:
Yes.
THE COURT:
Mr. Hart, do you think he understood these two documents?
MR. HART:
Yes, Your Honor.
THE COURT:
Mr. Fuhr, how do you plead to aggravated robbery with habitual criminal, how do you plead?
MR. FUHR:
Guilty.
THE COURT:
Felon in possession of a firearm with habitual criminal?
MR. FUHR:
Guilty.
THE COURT:
Do you understand that if you plead guilty that you waive your right to a jury trial on each charge?
MR. FUHR:
Yes, sir. (T. 55-56)
THE COURT:
That you waive your right to be confronted with the witnesses against you and to testify or not testify in your own behalf on each charge?
MR. FUHR:
Yes, sir.
THE COURT:
Do you understand that you give up your right to appeal any sentence I might give you to the Arkansas appellate courts?
MR. FUHR:
Yes, sir.
THE COURT:
Is your plea of guilty based on a plea agreement?
MR. FUHR:
Yes, sir.
THE COURT:
What is your agreement?
MR. FUHR:
A sentence of twenty years with five years suspended?
THE COURT:
Twenty with five suspended on the aggravated robbery charge?
MR. HART:
Yes, that is correct.
THE COURT:
And how much on the felon in possession of a firearm?
MR. FUHR:
Five years. (T. 56-57)
THE COURT:
Is it your understanding they are to be concurrent?
MR. FUHR:
Yes, sir.
THE COURT:
Mr. Fuhr, do you understand that the Court does not have to go along with this agreement if it does not want to?
MR. FUHR:
Yes, sir.
THE COURT:
Were any force, threats or promises used against you to get you to enter this plea of guilty?
MR. FUHR:
No, sir.
THE COURT:
You were set for trial Monday morning and it is late Friday afternoon, almost 5:30 in the afternoon, are you sure you want to do this?
MR. FUHR:
Yes, sir.
THE COURT:
You want to waive your Constitutional rights to a jury trial and all your other Constitutional rights, is that correct?
MR. FUHR:
Yes.
THE COURT:
Mr. Hart, is there a factual basis for the plea in both cases?
MR. HART:
Yes, Your Honor, there is. (T. 58)
THE COURT:
Mr. Saxon?
MR. SAXON:
Yes, Your Honor, there is.
THE COURT:
Mr. Fuhr, based on your plea of guilty, based on the fact that the informations do state the criminal offenses of aggravated robbery and felon in possession of a firearm, and since you have admitted that you are an habitual criminal, the Court can and does hereby find you guilty of aggravated robbery, a Class “Y” Felony, of felon in possession of a firearm, a Class “D” Felony, I will ask you if you have any legal reason why sentence should not be pronounced at this time?
MR. FUHR:
No, sir.

The plea agreement, signed by Mr. Furr and by Mr. Hart, contained the following representation from defense counsel:

I have carefully gone over this paper with the accused. To the best of my judgment he is fully able to understand all of it and, further, his plea ofguilty is consistent with the facts he has related to me and my own investigation of the case. (Our emphasis).

Thus the trial court followed Rules 24.4, .5 and .6 exactly as provided and accepted the plea agreement by imposing precisely the sentences Mr. Furr hoped to receive. Not only did Mr. Furr receive what appears to be a favorable sentence, given his history, he got the benefit of the dismissal of several other pending charges. We reject the argument that a factual basis was not established and hold that the trial court complied with Rules 24.4, .5 and .6.

We need not dwell at length on the remaining issue — ineffective assistance of counsel. A petitioner seeking relief under Rule 37 assumes a difficult burden where ineffective assistance is alleged, that is, the petitioner must show, one, that counsel’s representation fell below an objective standard of reasonableness and, two, that there is a reasonable probability that but for counsel’s unprofessional errors, the result of the proceeding would be different. Strickland v. Washington, 466 U.S. 668 (1984).

The Strickland standard has been made applicable to challenges of guilty pleas based on ineffective assistance of counsel in Hill v. Lockhart, 474 U.S. 52 (1982), and Jones v. State, 288 Ark. 375, 705 S.W.2d 874 (1986). In order to satisfy the second element of the Strickland test, Hill requires that the appellant show that he would not have pled guilty and would have insisted on a trial.

Where the alleged error of counsel is a failure to investigate or discover potentially exculpatory evidence, the determination whether the error “prejudiced” the defendant by causing him to plead guilty rather than go to trial will depend upon the likelihood that discovery of the evidence would have led counsel to change his recommendation as to the plea. This assessment, in turn, will depend in large part on a prediction of whether the evidence likely would have changed the outcome of a trial. Hill v. Lockhart, 474 U.S. 52, 59 (1985).

In the case before us appellant alleges that counsel: 1) failed to fully investigate all available defenses, 2) failed to question certain witnesses, 3) failed to file pre-trial motions, 4) failed to confer with appellant often enough, and 5) was inexperienced. However, appellant fails to specify what new evidence or matter further investigation would have uncovered to change his plea, or how additional pre-trial motions could have produced a different result. The allegations are wholly conclusory and will not, therefore, sustain a claim of ineffective assistance of counsel. Ross v. State, 292 Ark. 663, 732 S.W.2d 143 (1987); Pride v. State, 285 Ark. 89, 684 S.W.2d 819 (1985). Nor will general assertions that counsel did not meet with the defendant often enough, or did not aggressively prepare for trial be sufficient. See Travis v. Lockhart, 787 F.2d 409 (8th Cir. 1986), Houston v. Housewright, 678 F.2d 757 (8th Cir. 1982), cert. denied, 459 U.S. 993 (1982).

AFFIRMED.

Purtle, J., Dudley, J., and Newbern, J., dissent.

Robert H. Dudley, Justice,

dissenting. In McDaniel v. State, 288 Ark. 629, 708 S.W.2d 613 (1986), we interpreted A.R.Cr.P. Rules 24.4 and 24.6 to require that: “The court must ascertain from the accused whether he is pleading guilty because he is in fact guilty.” (Emphasis added.) Both before and after McDaniel v. State, supra, we have set out the same clear standard for accepting guilty pleas. We repeated the statement in Snelgrove v. State, 292 Ark. 116, 728 S.W.2d 214 (1987). In Muck v. State, 292 Ark. 310, 730 S.W.2d 214 (1987), we wrote: “The court must ask the defendant if he did the things of which he stands accused and is pleading guilty because he is guilty.” (Emphasis added.) Earlier, in Atkins v. State, 287 Ark. 445, 701 S.W.2d 109 (1985), we wrote: “No court should accept a plea of guilty without determining whether the accused believes he is guilty and that belief has a factual basis.” (Emphasis added.)

The majority opinion says it is now “clarifying” this bright line interpretation of Rule 24.6 so that now “there is no single method by which the requirement of Rule 24.6 can be achieved.”

The trial courts have lost a clear standard, and we will be faced with endless post-conviction appeals from guilty pleas. If anything in the law ought to be clear cut and have finality it is a guilty plea in a criminal case.

Establishing the factual basis from the defendant would also eliminate problems associated with false promises or statements by a prosecutor. See Vagi v. State, 296 Ark. 377, 757 S.W.2d 533 (1988). This is one of the reasons the federal trial courts are required to ascertain from the defendant whether there is a factual basis. As stated by Justice Douglas in his concurring opinion in Santobella v. New York, 404 U.S. 257 (1971):

The decisions of this Court have not spelled out what sorts of promises by prosecutors tend to be coercive, but in order to assist appellate review in weighing promises in light of all the circumstances, all trial courts are now required to interrogate the defendants who enter guilty pleas so that the waiver of these fundamental rights will affirmatively appear in the record. McCarthy v. United States, 394 U.S. 459, Boykin v. Alabama, 395 U.S. 238.

In summary, I would not erase the bright line about who must state the factual basis for a plea of guilty. Therefore, I dissent.

Purtle and Newbern, JJ., join in this dissent.

       The record uses Fuhr, but it appears the correct spelling is Furr.


source: Caselaw Access Project

author: Steele Hays, Justice.

license: Public Domain

text:
    WEST APARTMENTS, INC. v. Leland BOOTH, d/b/a Booth Home Improvements
    88-156
    760 S.W.2d 861
    Supreme Court of Arkansas
    Opinion delivered December 5, 1988
    [Rehearing denied January 9, 1989.]

      Martin, Voter, Karr & Hutchinson, by: Charles Karr, for appellant.
    No brief filed.
   Steele Hays, Justice.

This small claims case originated in municipal court. The only question is whether or not an appeal to circuit court was timely filed.

Leland Booth, appellee, filed a small claims action against West Apartments, appellant, in the Ft. Smith Municipal Court on October 12, 1987. Appellant was served by certified mail and the complaint and summons were received by appellant’s agent for service on October 15, 1987.

Subsequently, a default judgment was signed by Municipal Judge John Settle which recites that the cause came to be heard on November 3, 1987. There is no date stamp on the default judgment showing when it was filed with the clerk of the court. However, on the official docket sheet of the municipal court is an entry for “11-3-87, Default Judgment,” and the default judgment itself has the date of November 3, 1987 typed in on the designated date line on the document.

On December 7, 1987, appellant’s attorney attempted to take an appeal to the circuit court but was told by the municipal court clerk that it could not be done because more than thirty days had elapsed from the date of the default judgment. On December 8, 1987, appellant filed a notice of appeal to circuit court. On December 9, 1987, appellant filed a letter with Judge Settle pointing out that there was no date or “filed” stamp on the judgment, and that the language of Rule 9(a) of the Arkansas Inferior Court Rules, providing for appeal to circuit court, is similar to Rule 4(e) of the Arkansas Rules of Appellate Procedure, which provides that time for appeal runs from the date of filing.

Apparently in response to this contention, the municipal judge instructed the clerk to process the appeal to circuit court, as the docket notes, “12-9-87 Judge said to accept the appeal.” The transcript was prepared and filed with the circuit clerk on December 11, 1987.

Appellee filed a motion for summary judgment in circuit court contending that the circuit court had no jurisdiction because the appeal was not timely filed. On March 28,1988, the circuit court entered an order finding it did not have jurisdiction because the appeal was not timely filed, and remanded the case to municipal court. It is from the order dismissing the appeal that appellant brings this appeal.

Appellant’s argument essentially relies on applying ARAP to the procedures in inferior courts. ARAP 4(e) and our case law make it clear that the time for appeal runs from the time the judgment is filed, Caskey v. Pickett, 272 Ark. 521, 615 S.W.2d 359 (1981). ARAP 4 deals with the time that an appeal must be taken, and specifically provides that an appeal must be filed within thirty days of the “entry of the judgment,” ARAP 4(a), and that for the purposes of this rule, “A judgment. . .is entered . . . when it is filed with the clerk of the court in which the claim was tried.” ARAP 4(e).

AICR 9 is similar to ARAP 4 and provides:

(a) Time for Taking Appeal. All appeals in civil cases from inferior courts to circuit courts must be filed in the office of the clerk of the particular circuit court having jurisdiction of the appeal within thirty (30) days from the date of the entry of the judgment. [Emphasis added.]

AICR 10 provides:

Where applicable and unless otherwise specifically modified herein, the Arkansas Rules of Civil Procedure and rules of evidence shall apply to the govern matters of procedure and evidence in the inferior courts of this State.

Therefore, appellant argues, we should apply ARAP 4(e) to determine the time for appeal, as there is no similar provision in the AICR. Given that application, the argument continues, the judgment was never “entered,” or filed, as required by ARAP 4(e), and the time from entry of judgment never began to run and the appeal was timely. We disagree.

While ARAP 4(e) establishes that a judgment is entered when it is filed with the clerk of a circuit, chancery or probate court, the procedure is decidedly different from the manner in which a judgment is entered in inferior court proceedings. That difference becomes quickly apparent by a review of AICR 8 and 9, which provide in relevant part:

Rule 8:
(a) By Default. When a defendant has failed to appear or plead within the time specified by Rule 4 hereof, a default judgment may be rendered against him.
(b) Upon the Merits. Where the court has decided the case, it shall enter judgment in favor of the prevailing party for the relief to which he is deemed entitled.
(c) Docket Entry. The court shall timely enter in the docket the date and amount of the judgment, whether rendered by default or upon the merits.
(d) Judgment Lien. A judgment entered by an inferior court in this state shall not become a lien against any real property unless a certified copy of such judgment, showing the name of the judgment debtor, the date and amount thereof, shall be filed in the office of the circuit clerk of the county in which such land is situated.
* * *
Rule 9:

(a) Time for Taking Appeal. All appeals in civil cases from inferior courts to circuit court must be filed in the office of the clerk of the particular court having jurisdiction of the appeal within thirty (30) days from the date of the entry of the judgment. (Emphasis added).

The foregoing rules, particularly Rule 8(c), reflect that an inferior court, such as the municipal court, enters any judgment it renders by entering, in a timely manner, the date and amount of the judgment in the court’s docket. This specific procedure for entering judgments in an inferior court is in marked contrast to that applicable to courts of general jurisdiction under ARAP 4(e), where judgments are entered only when they are filed with the clerk of those courts.

In the instant case, it is clear that the Ft. Smith Municipal Court timely entered a default judgment against the appellant on the court’s docket on November 3, 1987, and that more than thirty days had elapsed from that date before appellant attempted to file a notice of appeal. That being so, we conclude that the trial court was correct in finding it had no jurisdiction because appellant’s attempted appeal was untimely.

Affirmed.


author: Steele Hays, Justice. Darrell Hickman, Justice,

text:
    Dewayne WORTH v. CIVIL SERVICE COMMISSION of El Dorado
    88-188
    761 S.W.2d 169
    Supreme Court of Arkansas
    Opinion delivered December 5, 1988

      Spencer, Spencer, Depper & Guthrie, by: David F. Guthrie, for appellant.

      Henry C. Kinslow, for appellee.
   Steele Hays, Justice.

This is the second appeal by Dewayne Worth arising from a dispute with the Civil Service Commission of El Dorado over the use of seniority in civil service eligibility. In 1985, Worth, a thirteen year veteran of the El Dorado Fire Department, took the civil service examination for promotion to the rank of captain. In that examination seniority was considered by the Civil Service Commission, resulting in Wesley Harper having a higher eligibility rating than Worth. If seniority had not been considered, Worth, rather than Harper, would have been promoted to one of the two openings which occurred during the eligibility period.

After our decision in Bradley v. Bruce, 288 Ark. 342, 705 S.W.2d 431 (1986), Worth filed suit against the Civil Service Commission of El Dorado contending that the use of seniority was a violation of Ark. Code Ann. § 14-51-301 (1987), and asking that he be promoted to the rank of captain. The trial court held that the decision in Bradley v. Bruce should not be applied retroactively, that to do so would be disruptive to both the fire and police departments, and on that basis Worth’s suit was dismissed.

Worth appealed and this court held that the trial court erred, because at all times material to the Bradley case, as to Worth, the statute did not provide for the use of seniority as a factor in promotion. See Worth v. Civil Service Commission, 294 Ark. 643, 746 S.W.2d 364 (Decided March 7, 1988).

Following remand it appears that a vacancy in the rank of captain had occurred in 1987, and three applicants had been declared eligible for promotion, though the selection had not been completed. Counsel for Worth and the Commission agreed on March 17,1988,thatno promotion would occur until the case was resolved.

On April 7, the trial court entered a judgment consistent with our opinion in Worth I, reciting that seniority was not a proper consideration under Ark. Code Ann. § 14-51-301 (1987), that Bradley v. Bruce, supra, was applicable to the case, that the agreement suspending promotion was dissolved over Worth’s objection, and that Worth’s argument that he should be promoted and awarded attorney’s fees should be dismissed as inconsistent with the opinion of this court.

Dewayne Worth has again appealed. He maintains that the trial court erred in failing to order his promotion to captain and in failing to award attorney’s fees pursuant to 42 U.S.C.A. § 1988 (West 1981). We affirm the judgment.

Worth contends that he should be promoted, not on the basis of current eligibility, but because of our decision in the first appeal. He urges that even though the City of El Dorado and Wesley Harper are not parties, that does not prevent the commission, which is a party, from being ordered to promote him to captain. But to sustain that argument would be tantamount to overruling the decision in the first appeal, which contains this language:

Even though the appellant prevails on his point of appeal, his victory will be one of principle only. He has not joined the captain whom he seeks to have demoted, nor has he joined the City against whom he seeks a judgment for back wages. His relief necessarily will be limited to that which can be granted against the only defendant, the Civil Service Commission of El Dorado. We can only reverse and remand for entry of a decree consistent with this opinion. (Emphasis supplied).

Just as in Worth I, the individuals who underwent the examination process for the 1987 vacancy and established their eligibility for promotion may not have their rights prejudiced by litigation in which they were not joined. Worth v. Civil Service Commission, supra; Hunt v. McWilliams, 218 Ark. 922, 240 S.W.2d 865 (1950); Leola Lumber Co. v. Bozarth, 91 Ark. 10, 120 S.W. 152 (1909); Greer v. Mid-West National Fire & Casualty Insurance Co., 434 F.2d 215 (8th Cir. 1970); Order of Railway Conductors of America v. Gorman, 133 F.2d 273 (8th Cir. 1948). The inevitability of this result was clearly presaged in Worth I:

This is not the type of case we remand for a complete new trial and in which the parties may amend their pleadings. See Overton Construction Co. v. First State Bank, 285 Ark. 361, 688 S.W.2d 268 (1985); and Sanders v. Walden, 214 Ark. 523, 217 S.W.2d 357 (1949).

Turning to the matter of attorney’s fees, under the circumstances we cannot say the trial court abused its discretion in denying attorney’s fees. 42 U.S.C.A. § 1988 (West 1981); Paragould Music Co., Inc. v. City of Paragould, 738 F.2d 973 (8th Cir. 1984); Johnson v. Snyder, 639 F.2d 316 (6th Cir. 1981); David v. Travisono, 621 F.2d 464 (1st Cir. 1980).

AFFIRMED.

Hickman, J., concurs.

Darrell Hickman, Justice,

concurring. The opinion in Worth v. Civil Service Commission, 294 Ark. 643, 746 S.W.2d 364 (1988), should have stopped with the decision that a fatal non-joinder of the necessary parties existed.


author: David Newbern, Justice.

text:
    FIRST SECURITY BANK of Searcy, Arkansas, Executor of the Estate of Darrell Wayne James, Deceased v. John DOE 1, 2, and 3, and United States Fire Insurance Company
    88-199
    760 S.W.2d 863
    Supreme Court of Arkansas
    Opinion delivered December 5, 1988

      Boyett, Morgan & Miller, P.A., by; Comer Boyett, Jr., for appellant.

      Barber, McCaskill, Amsler, Jones & Hale, P.A., for appellee United States Fire Insurance Company.
   David Newbern, Justice.

This case presents a question of insurance law. The issue is whether our uninsured motorist insurance statute requires an insurance company to provide uninsured motorist coverage to one using an insured vehicle where the named insured is a corporation and the user is an employee of the corporation. The trial court granted a summary judgment to appellee, United States Fire Insurance Company (U.S. Fire), holding the policy issued to the corporate employer provided coverage to the employee only if he were occupying the covered vehicle at the time of the injury, and concluding that in this case the employee was not an occupant. We hold that our statute which deals with uninsured motorist coverage requires that a company issuing liability insurance on a vehicle must also issue uninsured motorist coverage to one using the insured vehicle. We conclude the employee in this case was using the insured vehicle at the time the accident occurred, and we therefore need not consider whether he would have been covered under the terms of the policy as an occupant of the vehicle. The summary judgment is reversed, and the case is remanded.

The appellant, First Security Bank of Searcy, Arkansas, is the executor of the estate of Darrell Wayne James. It brought this wrongful death action on behalf of James’s estate. James was co-driver of a tractor-trailer rig owned by B & D Transport, Inc. The rig was insured under a policy issued by U.S. Fire, naming B & D Transport, Inc., as the insured.

James and his stepfather, who was his co-driver, had driven the truck to Santa Clara, California. James got out of the truck and was standing in a street directing the backing of the truck to a loading dock when he was struck by one or more hit-and-run drivers and killed. The hit-and-run driver or drivers remain unidentified. If the uninsured motorist coverage applies to James, there is no question that a hit-and-run driver qualifies as an uninsured motorist.

1. The terms of the policy

The general provisions of the basic liability policy make it clear that coverage extends to persons, including employees of B & D Trucking, Inc., using the vehicle with permission. The uninsured motorist endorsement, however, describes “who is insured,” in pertinent part as follows: “1. You [the named insured] or any family member. 2. Anyone else occupying a covered auto . . . .” U.S. Fire successfully argued to the trial court that, as James had dismounted the truck and was standing some six to eight feet away from it at the time he was hit and killed, he was not covered by the uninsured motorist provisions because he was not occupying the vehicle when he was killed.

We have not had occasion to define the term “occupying” in the context presented here. In Southern Farm Bureau Cas. Ins. Co. v. Fields, 262 Ark. 144, 553 S.W.2d 278 (1977), we dealt with whether a school child was “occupying” a school bus. The child had left the bus and was crossing a street when she was injured. We held she was not occupying the bus because the insurance policy being interpreted defined “occupying” in such a way as to require physical contact with the vehicle. We have not had a case in which we interpreted the word as it is usually defined in insurance policies and as it is defined in the policy we now consider. That definition is, “upon, getting in, on, out of or off.” Defined in that way, the term “occupying” has been given liberal interpretation in many jurisdictions. See, e.g., Sayers v. Safeco Ins. Co., 628 P.2d 659 (Mont. 1981); Manning v. Summit Home Ins. Co., 128 Ariz. 79, 623 P.2d 1235 (Ariz. App. 1980); State Farm Mut. Ins. Co. v. Holmes, 175 Ga. App. 655, 333 S.E.2d 917 (1985). These cases have, in general, considered matters such as the amount of time which had passed between the time the claimant departed the vehicle and the time of the injury, the relative distance of the claimant from the vehicle, whether the claimant had reached a point of safety after leaving the vehicle, and whether the claimant was still “oriented” to the vehicle. Other cases have been stricter. See, e.g., Testone v. Allstate Ins. Co., 165 Conn. 126, 328 A.2d 686 (1973); Miller v. Loman, 518 N.E.2d 486 (Ind. App. 1987); Greer v. Kenilworth Ins. Co., 60 Ill. App. 3d 22, 376 N.E.2d 346 (1978).

We need not determine whether James was “occupying” the vehicle, however, because we agree with the bank’s argument that he was covered by the policy as a user of the vehicle because our statute requires it.

2. The statutory requirement

The statute in question, Ark. Code Ann. § 23-89-403 (1987), is as follows:

23-89-403. Bodily injury coverage required.
(a) No automobile liability insurance covering liability arising out of the ownership, maintenance, or use of any motor vehicle shall be delivered or issued for delivery in this state with respect to any motor vehicle registered or principally garaged in this state unless coverage is provided therein or supplemental thereto and is not less than limits described in § 27-19-605, under provisions filed with and approved by the Insurance Commissioner, for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured motor vehicles because of bodily injury, sickness, or disease, including death, resulting therefrom.
(b) However, the coverage required under this section shall not be applicable where any insured named in the policy shall reject the coverage, and this rejection shall continue until withdrawn in writing by the insured.

Subsection (a) of the statute requires uninsured motorist coverage if the policy covers liability arising from use of a vehicle. The policy in question undoubtedly covered liability resulting from the use of the vehicle by a B & D employee. We conclude the statute expressed the intent of the general assembly to include in uninsured motorist coverage the persons included in liability coverage. The uninsured motorist coverage requirement is for the protection of “persons insured . . . who are legally entitled to recover damages from owners or operators of uninsured motor vehicles. . . .” Darrell Wayne James was such a person.

Our decision is supported by cases from other courts. First, we note the general rule that a statute governing insurance coverage becomes part of a policy affected by it. Our court of appeals has stated the principle, Carner v. Farmers Ins. of Arkansas, 3 Ark. App. 201, 623 S.W.2d 859 (1981), citing Gill v. General Am. Life Ins. Co., 434 F.2d 1057 (8th Cir. 1970), as have courts of other jurisdictions. See, e.g., Ex Parte State Farm Fire & Cas. Co., 523 So.2d 119, on remand, Martin Motors, Inc. v. State Farm Fire & Cas. Co., 523 So.2d 121 (Ala. 1988); Missouri Medical Ins. Co. v. Wong, 234 Kan. 811, 676 P.2d 113 (1984); Samson v. Transamerica Ins. Co., 178 Cal. Rptr. 343, 30 Cal. 3d 220, 636 P.2d 32 (1981); USAA Cas. Ins. Co. v. Yaconiello, 226 Va. 423, 309 S.E.2d 324 (1983); Billings v. State Farm Mut. Auto Ins. Co., 741 S.W.2d 886 (Mo. App. 1987).

We have found cases from other jurisdictions in which there was a statute similar to § 23-89-403(a) where it was held that uninsured motorist coverage was required with respect to a person injured while using a covered vehicle regardless of the terms of the insurance policy. In National Union Fire Ins. Co. of Pittsburgh, Penn. v. Olson, 751 P.2d 666 (Hawaii 1988), the United States Court of Appeals for the Ninth Circuit had certified to the Hawaii Supreme Court the question whether a statute like ours required uninsured motorist coverage of a person who was physically outside and away from the covered vehicle when the accident occurred. Olson was working as an emergency medical technician. He had arrived, with an EMT crew, at the scene of an accident and had left the insured EMT vehicle to set flares to warn approaching motorists of the presence of the remains of the accident in the highway. The statute, HRS § 431-448 (1978), required that uninsured motorist coverage be included in any liability policy insuring against loss resulting from liability for injury or death “suffered by any person arising out of the. . . use of a motor vehicle. . . .” The supreme court rejected the contention that the policy requirement limiting uninsured motorist coverage to persons “occupying” the vehicle was controlling. It was held that where there is a conflict between the language of the policy and that of the controlling statute, the policy language is void.

In Oberkramer v. Reliance Ins. Co., 650 S.W.2d 300 (Mo. App. 1983), the same question was posed. A police officer, Oberkramer, drove his insured police vehicle to a place where it was parked and used as part of a roadblock. An uninsured motorist being pursued by other officers at a high speed lost control of his vehicle at the roadblock and crashed into Oberkramer who was standing between 25 and 50 feet away from his vehicle. A statute, RSMo § 379.203 (1978), provided that liability insurance would not be delivered in Missouri unless uninsured motorist coverage were included “for the protection of persons insured thereunder.” The policy on Oberkramer’s police vehicle provided liability coverage to one utilizing the vehicle with the owner’s permission. The policy limited uninsured motorist coverage to “any other person while occupying an insured highway vehicle.” The court of appeals held that Oberkramer was covered because the statute prevailed over the policy language.

Other examples include Hartford Accident & Indent. Co. v. Booker, 140 Ga. App. 3, 230 S.E.2d 70 (1976), and Federated Mut. Implement and Hardware Ins. Co. v. Gupton, 357 F.2d 155 (4th Cir. 1966). Cf., Utica Mut. Ins. Co. v. Contrisciane, 473 A.2d 1005 (Pa. 1984), where the court appeared to equate the terms “use” and “occupancy.” For cases holding that the connection between the person who had dismounted the vehicle had become too remote to constitute “use” of the insured vehicle, see Hite v. Hartford Acc. and Indem. Co., 344 S.E.2d 173 (S.C. App. 1986), and Anderson v. Ford, 168 Ga. App. 684, 309 S.E.2d 854 (1983).

We agree with the cases holding that a statute like § 23-89-403 (a) requires uninsured motorist coverage for the user of a vehicle insured against liability, and that is our holding here.

3. U.S. Fire’s arguments

a. Named insured

U.S. Fire argues that a corporation’s employees cannot be its “family members,” and thus James does not qualify for uninsured motorist coverage because he is not a named insured. While we might agree that James did not qualify as a “family member” of the corporation which purchased the insurance, our determination that our statute requires that he be covered because he was a user of the vehicle answers the argument.

b. Purchaser

U.S. Fire points out that in Howard v. Grain Dealers Mut. Ins. Co., 342 F. Supp. 1125 (W.D. Ark. 1972), the federal court wrote that the purpose of the statute was “to enable Arkansas motorists purchasing automobile insurance to obtain for an additional premium” uninsured motorist protection. In view of the language of the statute requiring uninsured motorist coverage with respect to liability policies covering use of the vehicle to be insured, we cannot conclude that the only purpose of the statute was to cover purchasers.

c. Rejection

U.S. Fire argues that § 23-89-403(b) permits only a named insured to reject uninsured motorist coverage, and thus it is clear that the statute intended only that the named insured be protected. The conclusion simply does not follow the premise. The focus of the insurance is on the insured vehicle. If, by not rejecting it, the owner of the vehicle purchases the coverage, the question becomes what has he or she bought. Our holding is that he or she has purchased at least the coverage contemplated by § 23-89-403(a), for the reasons stated above, and that includes coverage for one using the insured vehicle.

d. Users of uninsured vehicles

In Crawford v. Emcasco Ins. Co., 294 Ark. 569, 745 S.W.2d 132 (1988), and Holcomb v. Farmers Ins. Exch., 254 Ark. 514, 495 S.W.2d 155 (1973), this court concluded that a party insured by a policy containing an uninsured motorist provision was not covered when driving another owned vehicle which was not listed in the policy. The policies in question contained clauses limiting coverage by stating that the uninsured motorist coverage would not apply when occupying an owned but not insured vehicle. It was argued that the coverage limitation was in violation of § 23-89-403, and we held that it was not.

U.S. Fire argues that if an insurer can limit coverage in that manner it follows a fortiori that it can limit uninsured motorist coverage, as in the policy in this case, only to occupants of the insured vehicle. “A fortiori” is a term of logic meaning “with stronger reason” or “much more.” Black’s Law Dictionary (5th ed. 1979), p. 56. Our decision in the Crawford case made it clear why it follows not at all. There we stated clearly that the insurance coverage required by the statute is, as noted in part 3. c. of this opinion, not personal insurance but vehicle insurance. We were not required in that case to consider a possible exception to that conclusion with respect to coverage of the named insured and his or her family members.

e. Non-user cases

U. S. Fire quotes language from Mullis v. State Farm Mut. Auto. Ins. Co., 252 So. 2d 229 (Fla. 1971), stating that, under Florida law, a named insured and members of the insured’s household were given the same protection they would have if the uninsured motorist had complied with the financial responsibility law of that state, but that other coverage under the policy is restricted to persons occupying the insured vehicle. In that case, the minor son of the named insured was riding an uninsured motorcycle when he was injured, and it was held that the uninsured motorist coverage applied to cover his injuries. Nothing was said about Florida law with respect to uninsured motorist coverage for one, other than a named insured, using a vehicle as to which uninsured motorist coverage applied. Other Florida cases cited by U.S. Fire, Velasquez v. American Manuf. Mut. Ins. Co., 387 So. 2d 427 (Fla. App. 1980), and Thiem v. Hertz Corp., 732 F.2d 1559 (11th Cir. 1984), are equally inapplicable to the discussion here, because they do not deal with the question whether a person is entitled to uninsured motorist protection because he or she is using an insured vehicle.

Also cited is Allstate Ins. Co. v. Graham, 106 N.M. 779, 750 P.2d 1105 (1988), where the sole question was whether injured persons were occupying an insured car when they were out of the insured car observing or helping in the changing of a wheel on another vehicle to which they had driven in the insured car. A third car, driven by an uninsured motorist, injured them. There was no indication that the New Mexico law required uninsured motorist coverage for a person using an insured vehicle or whether the insured vehicle was being used by the injured parties at the time of the injury.

Other cases cited by U.S. Fire include Polzin v. Phoenix of Hartford Ins. Companies, 5 Ill. App. 3d 84, 283 N.E.2d 324 (1972), and Reaves v. Farm Bureau, Town and Country Ins. Co. of Mo., 706 S.W.2d 911 (Mo. App. 1986). In the Polzin case, a pedestrian was struck on a street corner by an uninsured motorist. He had purchased a car and transferred title to the corporation which employed him. The policy provided uninsured motorist coverage to the corporation. The court pointed out that the plaintiff was neither occupying nor using the car at the time he was injured, thus there was no possibility of coverage, as he was not the named insured. In the Reaves case, it was held that where the driver of a truck, who was neither a named insured nor a member of the named insured’s family, left the truck where it broke down, walked away, and was struck by an uninsured motorist two miles from the truck, he was neither occupying nor using it. The court specifically distinguished the Oberkramer case, discussed above, where it was held that the policeman was using the police car in the roadblock while he was standing some 25 to 50 feet away from it.

We find nothing in any of these cases to raise any doubt about our conclusion that our statute requires uninsured motorist coverage be provided an employee using his employer’s vehicle which is insured with uninsured motorist coverage.

Conclusion

In the Fields case we held there was nothing to preclude an insurer from limiting uninsured motorist coverage to occupants of the insured vehicle as far as passengers were concerned. Here we draw a distinction between users, who are protected by the statute, and passengers who are not, and we hold that uninsured motorist insurance coverage may not be limited so as to exclude a user of an insured vehicle.

Reversed and remanded.

Hickman, J., not participating.


author: Tom Glaze, Justice.

text:
    James G. BARR and Delois Barr v. ARKANSAS BLUE CROSS AND BLUE SHIELD, INC.
    88-202
    761 S.W.2d 174
    Supreme Court of Arkansas
    Opinion delivered December 5, 1988

      Q. Byrum Hurst, for appellants.

      Wright, Lindsey & Jennings, for appellee.
   Tom Glaze, Justice.

This case involves a claim dispute under the Federal Employees Health Benefit Act (FEHBA) embodied in 5 U.S.C.A. §§ 8901-8914 (West 1967 & Supp. 1988). Appellant James G. Barr, a retired Federal employee, paid into the Federal Employees Benefit Plan offered through the appellee, Arkansas Blue Cross and Blue Shield. Under FEHBA, the United States Office of Personnel Management (OPM) enters into contracts with private carriers, in this case the appellee, that will administer the Federal Benefit plan. OPM promulgated regulation 5 C.F.R. § 890.105 (1986) which sets forth a procedure for resolving benefit claim disputes between a FEHBA plan’s carrier and enrollees in the plan, such as appellants.

Appellants submitted hospital and medical bills to appellee for payment under the terms of FEHBA. After appellee denied two requests for payment of those bills, appellants filed suit against appellee in circuit court, alleging breach of contract and the tort of bad faith for appellee’s alleged outrageous conduct in denying the appellants’ claims. Appellee moved to dismiss the appellants’ action because the appellants had not exhausted their administrative remedies by appealing to the OPM. Appellee also moved for partial summary judgment on the tort of bad faith claim on the basis that such a state claim was preempted by FEHBA. The trial court granted both of appellee’s motions, and we affirm.

Regarding the preemption issue, we first turn to the terms of the preemption clause contained in § 8902(m)(l) of FEHBA, which provides as follows:

The provisions of any contract under this chapter which relate to the nature or extent of coverage or benefits (including payments with respect to benefits) shall supersede and preempt any State or local law, or any regulation issued thereunder, which relates to health insurance or plans to the extent that such law or regulation is inconsistent with such contractual provisions. (Emphasis added.)

The Ninth Circuit Court of Appeals in Hayes v. Prudential Ins. Co. of America, 819 F.2d 921 (9th Cir. 1987), considered the foregoing clause in a case similar to the one before us. In Hayes, the retired employee claimed he was wrongfully refused benefits under FEHBA and sought damages against the contract carrier (Prudential Insurance Co.) alleging state law causes of action which included breach of contract and breach of a duty of good faith and fair dealing. The employee contended his state claims were not preempted under § 8902(m)(l) because the claims related to the manner in which Prudential Insurance Co. processed his benefits and not to the “nature or extent of coverage or benefits.” The court rejected the contention, stating no such distinction existed since tort claims arising out of the manner in which a benefit claim is handled are not separable from the terms of the contract. The court reasoned that the employee’s state claims “relate to” the health insurance plans, under § 8902(m)(l) of FEHBA, as long as they have a connection with or refer to the plan. Because the court determined the employee’s state law claims referred to the health insurance plan provided under FEHBA, it held the claims fell under the Act’s preemption clause. The Hayes court further concluded as follows:

Because the state law claims invariably expand appellees’ obligations under the terms of the Plan, the claims are inconsistent with the Plan and, hence, preempted under § 8902(m)(l).

The rationale employed by the court in Hayes is well supported by the Supreme Court’s decision in Pilot Life Ins. v. Dedeaux, 107 S. Ct. 1549 (1987). In Dedeaux, the Court held that the Employee Retirement Income Security Act (ERISA) preempts state common law tort and contract claims for benefits under an ERISA regulated plan. The Supreme Court’s holding was based upon its interpretation and application of the following preemptive clause contained in ERISA, which is notably similar to FEHBA’s preemptive clause before us now:

[T]he provisions of this subchapter . . . shall supersede any and all state laws insofar as they may now or hereafter relate to any employee benefit plan .... 29 U.S.C. § 1144(a) (1982).

In construing the foregoing clause, the Supreme Court gave the phrase “relate to” its broad common-sense meaning, such that a state law “relates to” a benefit plan in the normal sense of the phrase if it has a connection with or reference to such a plan. In doing so, the Court emphasized that the preemption clause was not limited to state laws specifically designed to affect employee benefits plans and concluded that common law causes of action raised in Dedeaux’s complaint, each based on alleged improper processing of a claim for benefits under an employee benefit plan, undoubtedly met the criteria for preemption under the clause. Cf. Allis-Chalmers Corp. v. Lueck, 471 U.S. 202 (1985) (where the Court held § 301 of the Labor Management Relations Act, 29 U.S.C. § 185(a) (1982), preempted Wisconsin tort law for alleged bad faith delay in making disability payments under a collective bargaining agreement).

We believe the principles employed by the Court in Dedeaux, to determine Congress’s intent and purpose in enacting the preemptive clause in ERISA, are equally applicable here, when construing FEHBA’s preemptive clause. As we have cited already, other jurisdictions have adopted this same view when holding state causes of actions, such as contract and bad faith tort, are precluded under FEHBA. In the present case, appellants’ actions clearly made reference or related to the plans provided by FEHBA, and in order to prevail in their breach of contract and bad faith tort claims, appellants must show that the appellee failed, in varying degrees, to comply with the requirements under that federal law when appellee denied appellants their benefits. In accordance with what we believe to be the controlling law on this subject, we conclude that appellants’ state actions are preempted under FEHBA, and that the trial court was correct in so holding.

Next, we address appellants’ argument that the trial court erred in dismissing their action because appellants failed to exhaust their administrative remedies. The doctrine of exhaustion of administrative remedies provides that no one is entitled to judicial relief for a supposed or threatened injury until the prescribed administrative remedy has been exhausted. Myers v. Bethlehem Shipbuilding Corp., 303 U.S. 41 (1938). The doctrine is, however, subject to numerous exceptions. McKart v. United States, 395 U.S. 185 (1969). For example, exhaustion is not required where no genuine opportunity for adequate relief exists or where irreparable injury will result if the complaining party is compelled to pursue administrative remedies. Exhaustion is also not required where an administrative appeal would be futile. See, e.g., Linfors v. United States, 673 F.2d 332 (11th Cir. 1982).

Appellants first claim no remedy is available to them because they failed to request a review of the denial of benefits within a 90-day period required under 5 C.F.R. § 890.105(c)(3). We find little merit in this argument in view of 5 C.F.R. § 890.105(d)(1), which provides that OPM may extend the time for requesting a review when a person shows he or she was never notified of the time limit or was prevented by circumstances beyond his or her control from submitting a timely request for review. Clearly, OPM has the discretion to grant appellants a belated review, and we are unable to presume OPM will decline such a request given an opportunity to do so.

Appellants next argue that the administrative remedy fails to provide them with adequate relief because they seek judicial redress for appellee’s bad faith conduct. This argument, of course, is resolved by our decision that FEHBA preempts the state causes of actions sought by appellants. Thus appellants’ remedies lie within the terms and procedures set forth in that federal law.

Appellants also assert their claim clearly would be rejected by OPM because appellee has rejected it twice and it was rejected again by the trial court. Appellants’ assertion ignores that the OPM review process provided by law is designed to remedy any error committed by a carrier — in this case, the appellee. As is set out in § 8902(j) of FEHBA, the carrier is required to pay benefits under the law if OPM finds that the employee is entitled to them.

Finally, appellants argue estoppel as another exception or reason they should not be obliged to pursue their administrative remedies. They claim, among other things, that the appellee had a duty, but failed, to advise appellants of their responsibility to seek OPM review. Appellants never raised this point below, and it is well settled that this court will not consider arguments raised for the first time on appeal. Hooper-Bond. Ltd. Partnership Fund III v. Ragar, 294 Ark. 373, 742 S.W.2d 947 (1988).

Because appellants fail to establish their situation and circumstances relieve them from first pursuing their administrative remedies under FEHBA, we believe the trial court was right in dismissing their claim under that federal law for their failure to exhaust their remedies. Also, for the reasons given hereinabove, we affirm the trial court’s ruling that appellants’ state claims are preempted under the provisions of FEHBA.

       Other jurisdictions have held to the same effect. See Blue Cross & Blue Shield v. Dept. of Banking, 791 F.2d 1501 (11th Cir. 1986); LaBelle v. Blue Cross & Blue Shield United, 548 F. Supp. 251 (W.D. Wisc. 1982); Hartenstine v. Superior Court, 196 Cal. App. 3d 206, 241 Cal. Rptr. 756 (1987). But see, Howard v. Group Hosp. Service, 739 F.2d 1508 (10th Cir. 1984); Skoller v. Blue Cross-Blue Shield of Greater New York, 584 F. Supp. 288 (S.D.N.Y. 1984).

       In reaching this issue, we observe that a state court, as here, has concurrent jurisdiction with the federal courts to enforce rights granted by a federal act unless prohibited from doing so. McEntire v. Monarch Feed Mills, Inc., 276 Ark. 1, 631 S.W.2d 307 (1982). We find nothing in FEHBA that prohibits this court’s interpretation of that federal law.


text:
    The HOME INDEMNITY COMPANY v. CITY OF MARIANNA, Arkansas, et al.
    88-196
    761 S.W.2d 171
    Supreme Court of Arkansas
    Opinion delivered December 5, 1988
    [Rehearing denied January 9, 1989.]

      Lovett Law Firm., by: Tom F. Lovett and Brian P. Boyce, for appellant.

      Daggett, Van Dover, Donovan & Cahoon, by: Robert J. Donovan, for appellees.
   Tom Glaze, Justice.

The appellee has been (and continues to be) involved in defending a federal lawsuit wherein a group of black voters charged that the appellee’s city boundaries violated the Voting Rights Act of 1965 and the one man, one vote rule. This state litigation ensued in connection with determining whether the appellant or others had the obligation to defend the federal lawsuit. After several hearings and appeals, we affirmed the Lee County Circuit Court’s decision which held that under the terms of a public officials error and omissions liability policy (E & O policy) issued to appellee, appellant was obligated to defend appellee’s interests in the federal suit. See Home Indemnity Co. v. City of Marianna, 291 Ark. 610, 727 S.W.2d 375 (1987); see also City of Marianna v. Arkansas Municipal League, 291 Ark. 74, 722 S.W.2d 578 (1987); City of Marianna v. Arkansas Municipal League, 289 Ark. 473, 712 S.W.2d 305 (1986).

Upon the court’s last remand of this cause, the parties encountered a further dispute concerning the terms of the E & O policy, viz., whether the appellant was required, under a supplementary payments provision, to pay all costs taxed against the insured, the appellee, in the federal lawsuit. In holding the appellant was obligated to pay the costs taxed against appellee, the trial court further awarded appellee the sum of $100,675.62 for the appellee’s cost of defending the federal suit and the sum of $70,906.62 for the costs the federal court assessed against appellee for attorneys’ fees awarded the plaintiffs who instituted, and prevailed in, the federal suit. In this appeal, appellant claims the trial court erred in finding the supplemental payments provision was a part of the coverage given appellee under the E & O policy. It further contends the trial court was wrong in finding that the attorneys’ fees, incurred by the appellee in defending the federal litigation, were reasonable and that the court improperly relied upon oral testimony when determining the reasonableness of those fees since the fees issue was submitted pursuant to a motion for summary judgment. We affirm the trial court in all respects.

Appellant first argues the E & O policy issued to appellee should not be read to include the supplemental payments provision, which requires the appellant to pay all the costs taxed against the appellee for defending the federal suit. Undisputably, some confusion existed as to coverage, due to the manner in which the E & O policy was issued. James L. Winchell, claims adjuster for the appellant, opined that the policy jacket, which was attached to and contained the E & O policy, was one which related to a general liability policy — a policy that covers bodily injury or property damage. However, the policy jacket, on its face, specified the appellee as the insured and reflected the premium payment paid for E& O coverage under policy number GL1396972. The jacket also contained a supplementary payments provision which stated that, in addition to the policy’s limit of liability, appellant was obligated to pay all costs taxed against the appellee in any suit the appellant defended on the appellee’s behalf. The confusion arose in this matter when both an attachment and an amendatory endorsement were added and made a part of the policy. The first attachment, entitled “coverage part,” contained another supplementary payment provision but, unlike the jacket’s provision, it provided the payments would not be in addition to the policy limits. Subsequently, an amendatory endorsement was added and it specifically replaced the supplementary payments provisions in the attachment and provided that “supplementary payments do not apply to insurance afforded by this coverage part.” While the amendatory endorsement clearly amended or cancelled any supplemental payments provision in the E & O coverage attachment, the endorsement made no mention of the supplemental provision set forth in the jacket policy. Thus, the question arose as to whether the amendatory endorsement voided both supplemental payments provisions contained in the policy jacket and the first attachment even though the endorsement failed to refer to the one contained in the jacket.

We recognize that a contract of insurance is to be construed like other contracts, with the different clauses read together and an interpretation given that would harmonize all parts. See Continental Casualty Co. v. Davidson, 250 Ark. 35, 463 S.W.2d 652 (1971). However, an interpretation that will harmonize all parts is not always possible when there is ambiguity in the insurance policy because of two conflicting provisions. It is also established law in our state that provisions contained in a policy of insurance must be construed most strongly against the insurance company which prepared it, and if a reasonable construction may be given to the contract which would justify recovery, it is the duty of the court to do so. See Drummond Citizens Ins. v. Sergeant, 266 Ark. 611, 588 S.W.2d 419 (1979). Further, this court has held that if there is doubt or uncertainty as to the policy’s meaning and it is fairly susceptible of two interpretations, one favorable to the insured and the other favorable to the insurer, the former will be adopted. Id.

The appellant’s own witness, Mr. Winchell, agreed that the language contained in the amendatory endorsement was confusing when trying to determine whether that endorsement was intended to affect the supplemental payments provision set out in the policy jacket. Winchell attributed this confusion to the wrong policy jacket, i.e., a general liability form, being placed on the E & O policy by appellant’s own employee. From the evidence, it is clear the appellee had nothing to do with causing the existing confusion that resulted from the appellant’s own mistake when issuing the E & O policy. Unquestionably, an ambiguity exists when one tries to reconcile the various conflicting provisions that were made a part of appellee’s E & O policy, and in applying the controlling principles set out in our cases cited above, we construe the policy provisions most strongly against the appellant. Accordingly, we are unable to say that the trial court was clearly erroneous in finding that the appellee was entitled to supplementary payments under the terms of the E & O policy issued to it by the appellant. See Burdette v. Madison, 290 Ark. 314, 719 S.W.2d 418 (1986).

Appellant also challenges the reasonableness of the attorneys’ fees awarded to the appellee. In the same connection, appellant argues that the trial judge improperly relied upon oral testimony given by witnesses for the appellee and that such testimony should not have been considered because the matter was before the court on a motion for summary judgment. Appellant cites the case of Montgomery Ward & Co. v. Credit, 274 Ark. 66, 621 S.W.2d 855 (1981), for the proposition that there is no provision for taking oral testimony in the matter of a summary judgment. Appellant does not contest the sufficiency of the oral testimony, but it contends that without the testimony of the appellee’s witnesses, there was insufficient proof that the attorneys’ fees were reasonable.

We cannot agree that the issue concerning attorneys’ fees was before the trial court by way of a summary judgment motion. The appellee had filed both a summary judgment motion and a second amended supplemental complaint seeking monetary judgments for attorneys’ fees and the costs assessed against it. When the hearing in question commenced, the appellee’s attorney made the following statement: “We are here this morning on a hearing on outstanding motions or a second amendment to the supplemental complaint that was in the file.” (Emphasis added.) The appellant never objected to counsel’s statement nor did it object to the testimony subsequently given by appellee’s witnesses. It is obvious that the appellant realized there were disputed facts to be resolved in the hearing that morning. In fact, appellant offered the testimony of Winchell to show that the E & O policy did not require the payment of any costs assessed against the city. From our review of the record, it is readily apparent that the trial judge conducted a hearing on the appellee’s complaint.

For the reasons set out above, we affirm the trial court’s findings and decisions.

       While the style of this case shows that there are additional appellees besides the City of Marianna, the issues addressed in this case apply only to the City and therefore we refer to the singular, appellee. The City appealed after the trial court entered judgment under ARCP Rule 54(b).

       In this respect, the federal court, under 42 U.S.C.A. § 1988 (1981), awarded attorneys’ fees as a part of costs and it is undisputed in this appeal that this provision, standing alone, would obligate appellant to pay attorneys’ fees assessed against the appellee.


author:
Tom Glaze, Justice. Tom Glaze, Justice.
      David Newbern, Justice,

text:
    Dodd MILES v. Byron SOUTHERN, Fred Hunt, and Wayland Roberts
    88-176
    760 S.W.2d 868
    Supreme Court of Arkansas
    Opinion delivered December 5, 1988
    [Supplemental Opinion on Denial of Rehearing January 30, 1989.]

      Gill Law Firm, by: Joe D. Calhoun, for appellant.

      Southern, Allen & James, by: Beth Briscoe Carson, for appellees.

      Holt, C.J., and Dudley and Newbern, JJ., dissent.

   Tom Glaze, Justice.

The appellees initiated this litigation by filing in the Pulaski County Municipal Court a tort claim for trespass against the appellant, asserting the appellant’s connecting pipeline to Little Rock’s sewer system was wrongfully constructed on the appellees’ property. The appellees claimed $1,309.00 in damages to have the pipeline fixed and removed after they discovered and damaged the pipeline when excavating their property. Appellant denied these allegations, claimed the appellees had filed a frivolous lawsuit and prayed for damages for having to defend against the suit. The municipal court granted judgment to appellees. Appellant then appealed to the circuit court, and in that appeal, appellees moved to dismiss (nonsuit) their own claim and to dismiss appellant’s counterclaim, which appellees suggested, “appears to be for malicious prosecution.” Appellant responded by claiming he had an absolute right to a trial de novo on his counterclaim. Pursuant to ARCP Rule 11, appellant also moved for sanctions against appellees.

The circuit court granted appellees’ motion to dismiss both the appellees’ complaint and the appellant’s counterclaim, and it further denied appellant’s motion for sanctions. The court later denied appellant’s motion for reconsideration and entered its order dismissing with prejudice both the appellees’ complaint and appellant’s counterclaim.

On appeal, the appellant raises several issues which include his asserted right to a de novo trial in circuit court and the circuit court’s improperly dismissing with prejudice both parties’ actions and denying the appellant’s request for ARCP Rule 11 sanctions against appellees. A paramount issue, however, is whether the municipal court had subject matter jurisdiction to decide appellees’ cause of action in the first place. Although this argument was not raised below, it is well settled that this court may consider subject matter jurisdiction for the first time on appeal. See Venhaus v. Hale, 281 Ark. 390, 663 S.W.2d 930 (1984).

In reviewing the record, we find the appellees’ trespass claim was based on assertions that the appellant wrongfully constructed a sewer line on the appellees’ property. Appellees sought damages from appellant because they were required to remove and repair the sewer line after appellant refused to do so. Clearly, appellees’ claim was a trespass on land action, which is not cognizable in municipal court. In this connection, municipal court jurisdiction is set forth in amendment 64 to the Arkansas Constitution and Ark. Code Ann. §§ 16-17-206(a) and 16-17-704 (1987) which provide as follows:

Amendment 64:
[Municipal courts shall have jurisdiction concurrent with circuit courts (a) in matters of contract where the amount in controversy does not exceed three thousand dollars ($3,000) excluding interest, (b) in suits for the recovery of personal property where the value of the property does not exceed three thousand dollars ($3,000), and (c) in all matters of damage to personal property where the amount in controversy does not exceed three thousand dollars ($3,000) ____
§ 16-17-206(a):
(a) Municipal courts and justices of the peace shall not have jurisdiction in civil cases where a lien on land or title or possession thereto is involved.
§ 16-17-704:
(a) The municipal court shall have original jurisdiction, coextensive with the county wherein the court is situated, over the following matters:
(1) Exclusive of justices of the peace and of the circuit court, over violations of all ordinances passed by the city council of the city or quorum court of the county wherein the municipal court is situated;
(2) Exclusive of justices of the peace in townships subject to this subchapter and concurrent with the circuit court, over misdemeanors committed with the county and the issuance of search warrants within the county;
(3) Concurrent with justices of the peace, and exclusive of the circuit court, in all matters of contract where the amount in controversy does not exceed the sum of one hundred dollars ($100), excluding interest;
(4) Concurrent with the circuit court in matters of contract where the amount in controversy does not exceed the sum of three thousand dollars ($3,000), excluding interest;
(5) Concurrent with the circuit court in actions for the recovery of personal property where the value of the property does not exceed the sum of three thousand dollars ($3,000);
(6) Concurrent with the circuit court in matters of damage to personal property where the amount in controversy does not exceed the sum of three thousand dollars ($3,000), excluding interest;
(7) Concurrent with the circuit court in matters of claims for personal injury or injury to persons where the amount in controversy does not exceed three thousand dollars ($3,000).
(b) Municipal courts shall have jurisdiction to sit as examining courts, and to commit, discharge, or recognize offenders to the court having jurisdiction of the trial, and to bind persons to keep the peace or behavior.
(c) The jurisdiction of the courts as provided in this subchapter shall be coextensive with the county. In counties having two (2) judicial districts, the jurisdiction shall be limited to the district in which the court is situated.

As can be discerned from the foregoing, Arkansas law, constitutional and statutory, provides municipal courts with no authority to hear and decide actions concerning damages to land. Accordingly, the municipal court lacked subject matter jurisdiction of appellees’ original action in the instant case, and because the municipal court had no jurisdiction of appellees’ cause, the circuit court acquired none on appeal. See Bynum v. Patty, 207 Ark. 1084, 184 S.W.2d 254 (1944). Thus, the circuit court should have reversed that part of the appellant’s appeal from the municipal court’s judgment with direction to dismiss appellees’ original trespass on land action.

We are still confronted with appellant’s contention that he has an absolute right to a de novo trial in circuit court on his counterclaim for malicious prosecution and that the trial court erred in dismissing his claim with prejudice. The major problem with appellant’s argument is that neither the abstract of record nor the transcript reflects a counterclaim that alleges a cause of action for malicious prosecution against the appellees. In Farm Service Corp. v. Goshen Farms, 267 Ark. 324, 590 S.W.2d 861 (1979), the court enumerated the essential elements for the tort of malicious prosecution as follows:

(1) A proceeding instituted or continued by the defendant against the plaintiff.
(2) Termination of the proceeding in favor of the plaintiff.
(3) Absence of probable cause for the proceedings.
(4) Malice on the part of the defendant.
(5) Damages.

As noted above, the court in Goshen Farms held that the plaintiff must allege and prove the original proceedings terminated in his favor. Id. Here, appellant has simply failed to allege facts to state a cause of action for malicious prosecution, and for this reason alone, the trial court was correct in dismissing any such claim.

Appellant also complains that when the trial court dismissed the counterclaim, the court should not have done so with prejudice. From the record, we are unable to determine why appellant’s counterclaim was dismissed with prejudice, nor can we find where the appellant questioned the trial court’s authority to do so except that appellant did appeal from the order of dismissal. Because we have decided that the appellant failed to state a cause of action, the court’s dismissal should have been without prejudice. See Ratliff v. Moss, 284 Ark. 16, 678 S.W.2d 369 (1984).

Appellant next argues the circuit court erred in refusing, to impose sanctions against appellees pursuant to ARCP Rule 11. That rule provides (1) that the signature of an attorney or party constitutes a certificate by him that he has. read the pleading, motion or other paper filed in the judicial proceeding, and (2) that, to the best of his knowledge, information and belief formed after reasonable inquiry, those documents are well-grounded in fact and are warranted by existing law or a good faith argument for the extension, modification or reversal of existing law. The rule further provides that the pleading, motion or. other paper is not interposed for any improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation. Rule 11 also provides for certain sanctions when the rule has been violated.

This court has had few opportunities to consider Rule 11. However, we believe the recent federal case of O’Connell v. Champion Intern. Corp., 812 F.2d 393 (8th Cir. 1987) is worthy of note in our consideration of the Rule 11 issue argued here. In O’Connell, the defendant, the moving party for Rule. 11 sanctions claimed the plaintiff had brought their actions knowing the statute of limitations would provide a good defense. While the district court agreed that the plaintiffs’ respective claims were barred by the statute of limitations, it refused to impose sanctions against the plaintiffs. In upholding the trial court’s ruling, the court of appeals said the following:

This determination that the plaintiffs’ , conduct was justified rests upon ... the District Court’s intimate familiarity with the case, parties, and counsel, a familiarity we cannot have. Such a determination deserves substantial deference from a reviewing court. Judged by this standard, the District Court’s decision to deny sanctions is not so far out of bounds as to justify our coming to a different conclusion at the appellate level. The imposition of sanctions is a serious matter and should be approached with circumspection.

In the present case, the circuit judge denied the appellant’s Rule 11 motion, and in doing so, mentioned that the appellees previously had prevailed on the merits of their trespass claim in municipal court. While ruling on the parties’ motions, the judge had the municipal court record before him as well as the motions, extensive briefs and arguments which were filed in circuit court. After a careful review of the record, we believe the circuit judge’s determination deserves substantial deference on our part, and conclude that his decision is not so clearly wrong as to justify reversal. We in no way mean to suggest that a trial court is deprived from imposing Rule 11 sanctions in an abbreviated proceeding where a party’s claim is dismissed for want of jurisdiction. Our holding merely reflects that, based on the record, the appellant failed to demonstrate the trial court erred in denying those sanctions.

In accordance with the above, we affirm the trial court’s decision to dismiss the appellant’s counterclaim but modify it to reflect the dismissal to be without prejudice; deny Rule 11 sanctions; and because the trial court did not have subject matter jurisdiction of appellees’ suit on appeal, we reverse and remand with directions that the trial court reverse and dismiss the appellees’ municipal court proceeding.

763 S.W.2d 656

SUPPLEMENTAL OPINION ON DENIAL OF REHEARING JANUARY 30, 1989

Tom Glaze, Justice.

In his petition for rehearing, appellant argues this court’s opinion seemed to permit the trial court to abdicate exercising its discretion when refusing to impose Rule 11 sanctions. He suggests the only reason underlying the trial court’s finding that the Rule 11 motion was without merit was that the appellees were the prevailing parties in the municipal court proceeding. In other words, appellant claims that since the trial court accorded dispositive weight to the municipal court judgment, the court thereby failed to exercise its own discretion when ruling on the motion.

Although the trial court remarked that the critical factor in denying appellant’s Rule 11 motion involved the appellees’ success in municipal court, the court never stated — as appellant suggests — that the municipal court judgment was the sole reason for its ruling. As we clearly related in our opinion, the trial judge, when ruling on the parties’ motions, had the municipal court record before him as well as the extensive briefs and arguments of the parties. We are unwilling to conclude that he failed to consider or ignored these matters when he dismissed this cause and denied Rule 11 sanctions.

Appellant seems to premise his argument on the fact that the evidence before the trial court showed that the appellees’ trespass action against the appellant had been frivolously filed. We cannot agree. Appellees submitted evidence, along with their motion to dismiss, which countered appellant’s motion and argument that the appellees’ claim had no factual basis. Clearly, this evidence supports, in part, why the appellees initially brought their action against the appellant and offered a basis for appellees having prevailed in the municipal court proceeding. With this record before him, the trial judge was well within his discretion to rule that the municipal judgment favoring appellees was significant and was reason enough to show appellees’ action was not frivolous nor subject to Rule 11 sanctions.

Apparently, the appellant is troubled because the trial court did not specifically note such other evidence or findings when dismissing appellees’ cause and denying appellant’s request for Rule 11 sanctions. As noted earlier, the court only referred to the municipal court judgment that was awarded appellees. Of course, the trial court was not required to give detailed reasons for its action. Even so, under ARCP Rule 52, appellant certainly could have requested the trial court to set out facts and conclusions of law which constituted the grounds for its decision. He failed to do so. Thus, on appeal, we are relegated to a review of the entire record to determine if the record supports the trial court’s decision. We have no doubts that it does. Accordingly, we conclude the trial court properly exercised its discretion in ruling on appellant’s Rule 11 motion, and from our review of the record, we are unable to say it abused its discretion in denying his motion.

For the foregoing reasons, we deny appellant’s petition for rehearing.

Holt, C.J., Dudley and Newbern, JJ., would grant.

David Newbern, Justice,

dissenting. The court’s original opinion is quite correct in holding that the municipal and circuit courts lacked jurisdiction of the trespass claim. We were also correct in modifying dismissal of the counter-claim so that it is without prejudice. We erred by not requiring the trial court at least to hold a hearing to determine whether sanctions pursuant to Ark. R. Civ. P. 11 would be appropriate.

The appellant, Dodd Miles, argued that the appellees, Byron Southern, Fred Hunt, and Wayland Roberts, had at least constructive notice of the subservience of their land to an easement in favor of the land owned by Miles. It is also contended that all the evidence of record indicates that Southern, Hunt, and Roberts had actual knowledge of the existence of the easement, and thus their action to recover their costs for damaging and moving Miles’s sewer line was totally frivolous. These allegations do not, of course, necessarily mean that Miles is entitled to Rule 11 sanctions, however, the allegations require serious consideration.

In our opinion we noted that the trial court, in denying Rule 11 relief, “mentioned that the appellees [Southern, Hunt, and Roberts] . . . prevailed on the merits of their trespass claim in municipal court.” We also noted that the trial court had before it all the pleadings, municipal court records, briefs and arguments filed in the circuit court. We did not point out that the only reason the trial court gave for denial of sanctions was that Southern, Hunt, and Roberts prevailed in the municipal court. That was an improper reason to give. The rule does not absolve a party of the possibility of sanctions just because he prevailed at an earlier stage of the litigation. It is easy to conceive of instances where the prevailing party might file a pleading, motion, or other paper which could violate the rule and thus require sanctions.

The majority opinion upon denial of rehearing states that it was proper for the trial court to give as its reasons for denial of Rule 11 sanctions the fact that the plaintiffs prevailed in the municipal court. What if the plaintiffs’ victory there was the result of a pleading or other document filed in direct violation of Rule 11? Surely the majority would not agree that the fact that the plaintiffs won would have anything to do with the issue of whether the sanctions should be imposed. Miles’s contention here is that the complaint filed against him in the municipal court was known by the plaintiffs to be without basis. If it turns out that it was without basis and the plaintiffs knew or should have known it was without basis when they filed it, is the fact that they prevailed on such a complaint relevant? To ask the question is to answer it. The fact that one party or the other prevailed at an earlier stage of the litigation has absolutely nothing to do with whether Rule 11 has been violated.

I disagree with the suggestion of the court’s opinion on denial of rehearing that the trial judge stated that the plaintiffs’ victory in the municipal court was only a “critical factor” in deciding whether to award Rule 11 sanctions. That was the language the judge used in his letter responding to Miles’s request for reconsideration of the dismissal of his counterclaim for malicious prosecution. In a separate paragraph in that letter, the court stated:

In regard to the Rule 11 sanctions motion filed by the defendant, this Court finds it is, once again, without merit. A lower court has found in favor of the plaintiff and I am not prepared to invoke the stringent penalties of Rule 11 on a prevailing party.

The final order denying reconsideration states only the following with respect to denial of Rule 11 sanctions:

In regard to Defendant’s Motion for sanctions pursuant to Rule 11, such Motion is again without merit. The Court will not invoke the penalties of Rule 11 on a prevailing party, and since Plaintiffs won in the lower court, such Motion is denied.

Unlike the majority, I take the judge at his word. The record demonstrates nothing other than that the judge had only one reason for his action, and that reason was incorrect.

Miles’s brief concedes that a trial court has some discretion in deciding to impose or not impose sanctions under Rule 11. The argument made, however, is that we have no evidence that the trial court exercised its discretion in this matter. There is nothing of record to show that the judge considered anything, in making the decision not to impose sanctions, other than the fact that Southern, Hunt, and Roberts had prevailed in the municipal court. If the trial court does have discretion to impose or decline to impose Rule 11 sanctions, we have no evidence that the trial court exercised whatever discretion it may have had in the matter, and we should have remanded the case for that purpose. Unlike Miles, I cannot concede that the trial court has the kind of discretion of which I think Miles and our opinion speak. I will address that question below, after making the point that even if the trial court has that sort of discretion we should have remanded the case so that it could be exercised by the trial court.

In Acklin v. State, 270 Ark. 879, 606 S.W.2d 594 (1980), the trial judge decided, as was within his discretion to do, that sentences of a convict should be served consecutively rather than concurrently. In the course of making that decision, the judge spoke in open court about how the defendant had failed to present a defense, and thus had put the county to unnecessary expense of trying him. He then stated he was not necessarily making the sentences consecutive for the reason just expressed and that he normally ran jury sentences consecutively anyway as he thought that was what jurors intended. In the opinion of this court reversing and remanding the case for resentencing, Justice George Rose Smith wrote:

The Code vests the choice between concurring and consecutive sentences in the judge, not in the jury. We commend the trial judge for his outspoken candor and would certainly condemn a resort to silence as a deliberate means of concealing an improper practice. But the trouble is, nothing in the colloquy indicates that the trial judge really exercised his discretion. Rather, he seems to have imposed consecutive sentences either because the defendant asked for a jury trial without any defense or because it was the court’s rule to direct that jury sentences run consecutively. We have often said that a court proceeding should not merely be fair; it should also appear to be fair.

We should at least have sent this case back to the trial judge so that he could give consideration to whether Rule 11 sanctions were warranted. Otherwise, this case takes on the appearance that we have exercised the discretion we seem to say the trial judge had. That would be unfair because, as our opinion pointed out, the trial judge is in a much better position than we to exercise whatever discretion there may be in making the decision.

All I need say about O’Connell v. Champion Intern. Corp., 812 F.2d 393 (8th Cir. 1987), upon which our opinion approving denial of Rule 11 sanctions was based, is that it clearly states that the trial court heard the arguments that the plaintiff had known of two defenses to his claim, one based on the statute of limitations and the other on a release from liability he apparently had executed, but that the trial court had rejected the contentions. There the trial court did not give an incorrect reason for his decision which, as in this case, indicates he thought he did not have any discretion to exercise in the matter.

In addition, I think it is error for this court to ascribe a tone to the opinion in the O’Connell case which seems to me to foster the attitude that a trial court could find a violation of Rule 11 and yet, in its discretion, refuse to impose sanctions. Prior to its amendment in 1986, that may have been the case, but the rule now states that upon making the finding, for example, that a party has filed a pleading not “well grounded in fact and . . . warranted by existing law or a good faith argument for the extension, modification or reversal of existing law,. . . the court. . . shall impose upon the person who signed it, a represented party, or both, an appropriate sanction. . . .[emphasis supplied].” The discretion to be exercised rests wholly in the area of fact finding, for the court has no power to refuse to impose sanctions where violation of the rule is found to have occurred. I think it is a mistake to hold that the trial court has discretion in this respect. I think Judge Arnold’s opinion in the O’Connell case should be read as pointing out that the trial court rejected, as matters of fact, that the plaintiff knew there were valid defenses to his claim.

We should grant rehearing and point out that we give deference to a trial court’s finding of facts in the process of considering Rule 11 sanctions just as we do in other cases where trial judges are required to find facts and they have the witnesses and the parties and the papers before them. We should not, in this first case interpreting our Rule 11, make the mistake of saying or implying that the trial court may or may not impose Rule 11 sanctions “in his discretion” thus leaving the further implication that, even if a violation is found the trial court need not do anything about it.

I interpret our Rule 11 as leaving no discretion in the trial court to decline to impose sanctions once a violation of the rule has been found to have occurred. However, rehearing should be granted on this aspect of the case even if the majority of the court concludes that the trial court does have such discretion because there is no evidence here that it was properly exercised or exercised at all. I would grant rehearing on the Rule 11 aspect of the case. Therefore, I respectfully dissent from the denial of rehearing.

Holt, C.J., and Dudley, J., join this opinion.

       The trial court apparently dismissed the appellant’s counterclaim for malicious prosecution because the appellees prevailed in municipal court. On appeal, appellees appear to rely on the trial court’s ruling, but also argue ARCP Rule 12(b)(6). Of course, we affirm the trial court where it is correct, but states the wrong reason for its ruling. Ratliff v. Moss, 284 Ark. 16, 678 S.W.2d 369 (1984). The trial court’s decision to dismiss appellant’s countrclaim was clearly correct regardless of whether it announced an erroneous reason for doing so.

       Appellant did specifically question the trial court’s authority to enter the order with prejudice in a pleading captioned, “Defendant’s Reply to Response to Defendant’s Motion to Supplement,” which was filed four months after the appellant filed his notice of appeal. There is nothing in the record that shows that issue was presented to the trial court.


author: Per Curiam.

text:
    Thomas Kevin TAYLOR v. STATE of Arkansas
    RC 88-54
    760 S.W.2d 382
    Supreme Court of Arkansas
    Opinion delivered December 5, 1988

      Matt Keil, for appellant.
    No response.
   Per Curiam.

Appellant, Thomas Kevin Taylor, by his attorney, Matt Keil, seeks reconsideration of his Motion for Rule on Clerk which we denied because the attorney did not admit error. In this petition he admits error in filing untimely notice of appeal. See Ark. R. App. P. 5(a).

We find that such error, admittedly made by the attorney for a criminal defendant, is good cause to grant the motion. See per curiam dated February 5, 1979, In Re: Belated Appeals in Criminal Cases, 265 Ark. 964; Terry v. State, 272 Ark. 243, 613 S.W.2d 90 (1981).

A copy of this opinion will be forwarded to the Committee on Professional Conduct.