author: David Newbern, Justice.

text:
    ARKANSAS STATE HIGHWAY COMMISSION v. Charles K. POST, Shelby Jean Post, and First Financial Savings and Loan
    96-1403
    955 S.W.2d 496
    Supreme Court of Arkansas
    Opinion delivered October 30, 1997

      Robert L. Wilson, Chief Counsel, Barbara A. Griffin and Lawrence W. Jackson, Staff Attorneys, for appellant.

      Ronald L. Griggs, for appellee.
   David Newbern, Justice.

This is an eminent domain case. For the purpose of widening a highway, the Arkansas State Highway Commission (“the Commission”) condemned .14 acres of frontage which was part of a tract owned by the appellees Charles and Shelby Post. The Posts reside on the remaining portion of the tract consisting of some 4.2 acres. Appellee First Financial Savings and Loan holds a mortgage on the Posts’ property. Along with its condemnation complaint, the Commission deposited $1,600 into the court registry as “just compensation.” The Posts contended that the deposited amount was inadequate, and a jury trial was held to determine proper compensation. The Commission’s liability for the taking was not contested. A judgment was entered upon a jury verdict awarding the Posts $7,000, and the Commission appealed. The Arkansas Court of Appeals affirmed by an opinion not designated for publication. Arkansas State Hwy. Comm’n v. Post, No. CA95-906 (Nov. 6, 1996). We review the decision of the Trial Court as if it had come to this Court in the first instance. See Allen v. State, 326 Ark. 541, 542, 932 S.W.2d 764, 765 (1996). We granted review and now reverse and remand on three of the four points raised by the Commission.

We hold that the Trial Court erred by (1) requiring the party who did not have the burden of proof, i.e., the Commission, to present its case first; (2) allowing the Posts to introduce a photograph of the temporary conditions on their property caused by ongoing construction; and (3) refusing to strike the speculative testimony of Peter Emig, the Posts’ expert witness, regarding the property’s after-taking value. As a new trial is in order, we need not consider the Commission’s fourth argument that the damages verdict was excessive.

Í. Order of proof

Over the Commission’s objection, the Trial Court ruled that the Commission would present its case before the Posts presented their case. Ms. Griffin, counsel for the Commission, was not permitted to make an objection on the record until after she had concluded the Commission’s case. She asserted that the Posts had the burden to prove that the $1,600 deposit was inadequate and that they therefore should have proceeded first. Ms. Griffin argued that the Commission had been prejudiced by “having to go forward first and having the burden of proof placed on us.” She maintained that the Commission had prepared its case on the assumption that its presentation of evidence would follow the Posts’ and that its witnesses had expected to be in the position of rebutting the testimony given by the Posts’ witnesses. Mr. Griggs, counsel for the Posts, responded that the Commission had the burden of proving the value of the Posts’ property and that the Commission had not been prejudiced by the Trial Court’s ruling.

The Trial Court stated that its ruling caused only “minimal prejudice” to the Commission and that the Commission would have the opportunity to present rebuttal evidence after the Posts completed their case. The Trial Court referred to Ark. Code Ann. § 27-67-316 (Repl. 1994), which provides that eminent domain actions should proceed “as in other civil cases,” and observed that, in the pleadings, the Commission was listed as the plaintiff and the Posts as the defendants. The Trial Court agreed with the Commission that the Posts would have the burden of proving their entitlement to the damages claimed and said that it would make that clear in a jury instruction. The Trial Court later instructed the jury that “the burden of proof is on the landowner to prove his claim for just compensation due him by a preponderance of the evidence.”

The order of trial in civil cases is clearly prescribed by Ark. Code Ann. § 16-64-110 (1987). Subsection (3) (A) of that statute provides, “The party on whom rests the burden of proof in the whole action must first produce his evidence.” In an eminent domain proceeding such as this one, the “whole action” is devoted to allowing proof that the landowners have not been adequately compensated for the taking. The law clearly provides that they are to present their proof first.

In Springfield and Memphis Railway v. Rhea, 44 Ark. 258 (1884), we held that it was proper for the defendant landowner “to open and close” the case because he had the burden of proof on the issue of his entitlement to damages. Id. at 260. That case was followed by the Court of Appeals in Property Owners Improvement Dist. 241 v. Williford, 40 Ark. App. 172, 843 S.W.2d 862 (1992), in which it was held that the landowner had the right to “open and close” in the presentation of evidence and argument to the jury.

In the case at bar, the Trial Court should have required the Posts to present their evidence first because “the burden of proof in the whole action” rested on them. § 16-64-110(3)(A). The Trial Court identified no “special reasons,” and we can think of none, that warranted a departure from the order prescribed by § 16-64-110(3). Thus, we must conclude the Trial Court’s failure to follow the procedure oudined in this provision was erroneous.

The error was prejudicial. Although the Trial Court correctly instructed the jury that the Posts had the burden of proof with respect to the adequacy of the $1,600 deposit, the unexpected decision to rearrange the order of proof unfairly hindered the Commission’s ability to present its case. Having relied on the procedures long established by statute and case law, the Commission reasonably expected that the Posts would present their case first, and it tailored its own case to be in the form of a rebuttal. The Commission was put at an unfair disadvantage when it was made to proceed in the posture of a plaintiff and present what was in essence a rebuttal case at the beginning of trial. The Commission could not have anticipated this unorthodox procedure, and we cannot say that the eleventh-hour surprise encountered by the Commission was harmless.

2. Construction photograph

During the Posts’ case-in-chief, the Posts’ expert witness, Peter Emig, testified that the value of the Posts’ land prior to the talcing was $73,000 and that the value after the taking was $55,000. The Posts moved to introduce into evidence the appraisal report that Mr. Emig had produced and referred to during his testimony. The appraisal report included several photographs of the Posts’ home and surrounding land.

One of the photographs included in the appraisal report was taken from the right-of-way in front of the Posts’ home. The highway, located to the east of the home and right-of-way, appears on the far right side of the photograph. The driveway leading from the highway to the Posts’ home is in the foreground, toward the bottom of the photograph. The middle portion of the photograph depicts three trees standing in the Posts’ front yard. In the background, toward the top of the photograph, is the right-of-way to the north of the home. That portion of the photograph depicts piles of dirt and dead trees that appeared to have been cut in the course of construction work.

The Commission objected to the introduction of the photograph and suggested that the photograph was prejudicial because it might lead the jury to believe that the dead trees would remain on the land after completion of the construction project and affect the value of the property. The Posts responded that the photograph would not prejudice the Commission and that it simply revealed the part of the land that was being “taken.” The Trial Court ruled that the photograph could be admitted because it depicted “the land at the time of the taking” and because it showed part of the basis for Mr. Emig’s opinion and was an “accurate reflection of the property at the time he based his opinion on it.” The Trial Court acknowledged that the photograph “obviously shows construction,” but it stated it could not “see how that’s going to be prejudicial.”

Mr. Griggs questioned Mr. Emig about the photograph as follows:

Q. Okay. Now, turn to the third page and it shows a photograph and I believe the caption is “Current construction of the right-of-way as seen from the right-of-way in front of the home,” is that correct?
A. That is correct.
Q. Now, that is not the right-of-way as it will exist after the taking, is it? It’s not gonna look like that after the taking, is it?
A. The front of the property, once the trees are removed, will look like the area in the background.
Q. Okay. And so those are trees that will be removed from the taking?
A. My understanding is those are the trees.

The Trial Court erred by admitting the photograph of the piles of dirt and dead trees that had resulted from the ongoing construction work. Evidence is inadmissible in partial-taking cases when it pertains to the temporary conditions of the property during the course of construction. Such evidence does not assist the jury in determining “just compensation” in a partial-taking case because it is irrelevant to “(1) the value of the part taken; (2) the value of the part taken plus the damages to the remainder; [or] (3) the before- and after-value rule.” Arkansas State Hwy. Comm’n v. Frisby, 329 Ark. 506, 508, 951 S.W.2d 305 (1997), quoting Arkansas State Hwy. Comm’n v. Barker, 326 Ark. 403, 405, 931 S.W.2d 138, 140 (1996). Temporary conditions prevailing on the land during the course of a construction project simply have no bearing on the worth of the land prior to the taking or what its worth will be after the project is completed. Thus, in a partial-taking case, evidence of temporary conditions caused by ongoing construction is irrelevant, as well as potentially misleading and prejudicial, and should not be admitted. Arkansas State Hwy. Comm’n v. Ptak, 236 Ark. 105, 364 S.W.2d 794 (1963); Donaghey v. Lincoln, 171 Ark. 1042, 287 S.W. 407 (1926); City of Fort Smith v. Findlay, 48 Ark. App. 197, 893 S.W.2d 358 (1995).

We note the Posts’ suggestion that Mr. Emig, in his testimony, clarified that the conditions depicted in the photograph were not permanent and that the property would look differently after completion of the construction project. That testimony supposedly cured any prejudice that resulted from the admission of the photograph. Nothing in Mr. Emig’s testimony could have had such a remedial effect. When asked whether the right-of-way depicted in the photograph would look differently after the taking, Mr. Emig did not answer “yes.” Rather, he testified that “[t]he front of the property, once the trees are removed, will look like the area in the background.” As we noted, the “area in the background” of the picture contains the piles of dirt and dead trees. Mr. Emig’s testimony, rather than suggesting the piles would be cleared after the project was complete, tended to suggest that the entire property, for an unspecified amount of time, would eventually be covered with dead trees. This testimony in no way clarified to the jury that the conditions depicted in the photograph were merely temporary. The error was not harmless.

3. Expert testimony on “after value”

Mr. Emig testified during the Posts’ case-in-chief that the value of the Posts’ land before the taking was $73,000 and that the value after the taking was $55,000. Mr. Emig testified that there are three approaches to valuing property — the market approach, the cost approach, and the income approach. He stated that he determined the “before value” using the market approach. Mr. Emig testified that he considered three sales of property similar to the Posts’ property and adjusted for the differences between those properties and the Posts’ property. Relying on these sales, Mr. Emig concluded the value of the Posts’ property before the taking was $73,000.

Mr. Emig testified that he was unable to use the market approach to determine the property’s “after value.” In his appraisal report, Mr. Emig wrote that, “[t]ypically, three comparable sales are found which have the condition the Subject Property will have after the taking. After adjusting for the differences the indicated ‘After Value’ is subtracted from the ‘Before Value’ and that amount is considered as just compensation to the owner. In this assignment there were no comparable sales with which to estimate an ‘After Value.’”

Thus, Mr. Emig indicated in his appraisal report that he determined the after value of the property using an “alternate method for estimating a market reaction to the change in the property configuration.” In his testimony, Mr. Emig described his “alternate method” as follows.

Mr. Emig’s opinion that the after value of the property was $55,000 rested on his assumption that the value of a home decreases in direct proportion to the decrease in the distance between the home and the right-of-way. Mr. Emig noted that, on account of the taking, the distance between the Posts’ home and the right-of-way had decreased by one third from 120 feet to 80 feet. He testified that the Posts’ property, prior to the taking, had an “improvement value” of $60,000. He said that, if the home were moved right next to the right-of-way, it would have only a “salvage value” of $5,000. (Relying on two other “salvage sales,” Mr. Emig determined that a buyer would pay $5,000 to move the Posts’ home to another location.) Thus, according to Mr. Emig’s theory, the Posts’ home would decrease in value by $55,000 if the right-of-way were moved from its position 120 feet away directly next to the home. As the right-of-way had been moved only one third of this distance, Mr. Emig reasoned, the home had decreased in value by one third of $55,000, or $18,333, which Mr. Emig rounded down to $18,000. Mr. Emig suggested this amount was the “just compensation” due the Posts. He subtracted it from the before value of $73,000 to arrive at an after value of $55,000.

During cross-examination, Ms. Griffin asked Mr. Emig about his valuation method.

Q. What basis — what do you base that estimate on? Were there any sales in the market that indicate that a house that had set 120 feet from the right-of-way decreases a certain percentage amount for every percent it moves toward the right-of-way?
A. No.
Q. So that’s based on what?
A. Logic.
Q. Just your personal opinion?
A. Well, I think it’s reasonable to assume that if it is 60 thousand for the improvement, as it is today, and if it were located next to the highway, and it has a five thousand dollar salvage value, somewhere between those two points value was lost and I’m assuming that as this property gets closer and closer to the highway, the value diminishes and there is a direct relationship between the distance and a value lost. If it’s 50 percent closer it’s reasonable to say that 50 percent is lost.
Q. Okay. When you say it’s reasonable, it’s an assumption, is that based on your personal opinion, is that your assumption?
A. It is, that’s my professional opinion.
Q. And there’s nothing in the market that you found that would prove or disprove that?
A. No, I could not find any.
Q. Are you also aware that although the right-of-way is 40 feet closer to the home that the lanes of traffic, the closest one to the Post home is still 132, well a little more than 132 feet from their house?
A. I was not aware of the exact distances insofar as the distance from the home to the actual pavement.
Q. Okay. Have you examined any properties that were approximately 80 feet from the right-of-way to determine what their values were, what they sold for?
A. No.
Q. You also stated that you found no comparable sales with which to do an after-value, what approach would you call what you did in arriving at an after-value?
A. Well, I’m not sure that there’s a specific name given to it.
Q. So, it’s not one of the three generally accepted approaches?
A. Well, I think that most appraisers, most appraisal organizations, and the Uniform Standards of Professional Appraisal Practice, allow the appraiser the latitude to use whatever he considers appropriate for solving the value problem, and given the conditions in this case, I did the best that I could.
Q. Did you check for any sales that are 80 feet from the right-of-way or did you just not find any or did you look, search the market for that?
A. We looked for sales anywhere on 167 South that were being directly impacted by this property.
Q. Okay. And you said directly on 167, are your comps — none of your comps from the before-value except the first one is on North 167, were on 167, is that correct?
A. That’s correct. . . .
Q. And also I want to bring up the fact, have you — first I want to ask you: Did you find any sales in the market when you were doing your research that would indicate a direct proportion between the distance of the right-of-way as it moves to the residence and the decrease in value of the residence?
A. I did not.

Ms. Griffin moved to strike Mr. Emig’s after-value testimony. She asserted that his opinion on the matter of after value was speculative and lacked a reasonable basis. The Trial Court denied the motion.

The Trial Court erred by refusing to strike Mr. Emig’s after-value testimony. Although an expert’s opinion is admissible even if the expert fails on direct examination to explain the basis for his conclusions, the testimony must be stricken if the Commission demonstrates on cross-examination “that the landowners’ expert witness[] had no reasonable basis for [his] opinions.” Arkansas State Hwy. Comm’n v. Johns, 236 Ark. 585, 586-87, 367 S.W.2d 436, 438 (1963).

Mr. Emig’s opinion that the value of the Posts’ home would decrease in direct proportion to the decrease in distance between the home and the right-of-way was speculative and lacked a sound and reasonable basis. Mr. Emig conceded that his approach had no specific name and that it was not rooted in the three approaches to valuation previously recognized in eminent domain cases. He offered no foundation for comparing the Posts’ home to the two homes that were sold for “salvage value” for the purpose of relocating them elsewhere. Those homes were sold for $3,000 and $5,000, but Mr. Emig did not establish that a buyer would pay a comparable figure for the Posts’ home under such circumstances.

We also note that Mr. Emig was unable to point to any market data to corroborate his view that the value of a home decreases in direct proportion to the decrease in distance between the home and the right-of-way. In Arkansas-Missouri Power Company v. Sain, 262 Ark. 326, 556 S.W.2d 441 (1977), the landowner’s expert witness testified that a newly installed transmission line would reduce the value of the property by $27,197. We held that the testimony was speculative and should have been stricken because the “expert on cross-examination admitted that he could not think of a single instance where a transmission line had any effect on the market value of the property.” Id. at 327-28, 556 S.W.2d at 442. “Therefore,” we said, “his testimony that the damages amounted to some $27,000 did not have a sound and reasonable basis.” Id.

Mr. Emig’s testimony concerning the property’s after value lacked a sound and reasonable basis. We must therefore reverse because “[t]he public . . . cannot be compelled to pay prices based . . . upon speculation . . . .” Arkansas State Hwy. Comm’n v. Roberts, 246 Ark. 1216, 1221, 441 S.W.2d 808, 812 (1969), citing Arkansas State Hwy. Comm’n v. Watkins, 229 Ark. 27, 313 S.W.2d 86 (1958); Arkansas State Hwy. Comm’n v. Griffin, 241 Ark. 1033, 411 S.W.2d 495 (1967).

Reversed and remanded.

Glaze, J., concurs to point out that, by requiring the Commission to present its evidence first, the court caused the Commission to lose any effective right to a directed-verdict motion.


source: Caselaw Access Project

license: Public Domain

text:
    Stacy JOHNINSON v. STATE of Arkansas
    CR 97-660
    953 S.W.2d 883
    Supreme Court of Arkansas
    Opinion delivered October 30, 1997

      William M. Brown, for appellant.

      Winston Bryant, Att’y Gen., by: Vada Berger and C. Joseph Cordi, Jr., Asst. Att’ys Gen., for appellee.
   David Newbern, Justice.

Stacy Johninson pleaded guilty before Judge David Bogard to a number of felonies. The issues in this case are whether a motion to withdraw the guilty pleas was untimely and, if not, whether the motion was properly denied. We hold the motion was not untimely but that it was lacking in merit. We affirm as no error occurred in the denial of the motion to withdraw the pleas.

On September 16, 1996, Judge Bogard sentenced Mr. Johninson to imprisonment for forty years for aggravated robbery, ten years for theft by receiving, five years for being a felon in possession of a firearm, and five years due to revocation of probation of a previous sentence. Those sentences were pronounced in open court to be served consecutively for a total of sixty years’ imprisonment. An additional five-year sentence for being a felon in possession of a firearm was pronounced to be served concurrently with the other sentences.

After pronouncing the sentence, Judge Bogard recused and transferred the case to a separate division of the Pulaski Circuit Court presided over by Judge Chris Piazza. On November 22, 1996, Mr. Johninson moved to withdraw his guilty pleas on the ground that his counsel had told him he would receive only a combined ten-year sentence for all of the offenses. The only request made of Judge Piazza was that Mr. Johninson be allowed to withdraw the pleas due to the ineffectiveness of his counsel. Mr. Johninson contended that, although he was guilty of the offenses, other than aggravated robbery, to which he had pleaded guilty, he would not have entered the pleas but for his counsel’s promise of a ten-year sentence.

On December 5, 1996, Judge Piazza held a hearing bn the motion. Testimony was taken from Mr. Johninson, his mother, and his sister, all of whom said the promise of ten years had been made by Mr. Johninson’s lawyer. After reviewing the record of the proceedings before Judge Bogard and the thorough inquiry made of Mr. Johninson by Judge Bogard with respect to whether he had been promised anything in return for his plea and whether he was pleading guilty because he was indeed guilty and knew the maximum sentences he might receive, Judge Piazza announced that he would follow the sentences imposed by Judge Bogard. The judgment and commitment order document, signed by Judge Piazza, was filed of record February 4, 1997.

1. Timeliness

The State argues that we must dismiss the appeal because the Trial Court lacked jurisdiction to permit withdrawal of the guilty pleas at the time the attempt to withdraw them occurred and, therefore, this Court lacks jurisdiction of the appeal. Two subsections of Ark. R. Crim. P. 26.1 are significant in this instance.

(a) Prior to pronouncement of sentence, the court shall allow a defendant to withdraw his plea of guilty or nolo contendere upon a timely motion and proof to the satisfaction of the court that withdrawal is necessary to correct a manifest injustice.
(b) A motion to withdraw a plea of guilty or nolo contendere to correct a manifest injustice is timely if, upon consideration of the nature of the allegations of the motion, the court determines that it is made with due diligence. Such motion is not barred because it is made after the entry of judgment upon the plea. If the defendant is allowed to withdraw his plea after judgment has been entered, the court shall set aside the judgment and the plea.

If a sentence has been entered and placed in execution prior to the filing of a motion to withdraw the guilty plea upon which it was based, the motion must be treated as having been made pursuant to Ark. R. Crim. P. 37, and the provisions of that rule govern timeliness of the motion. Shipman v. State, 261 Ark. 559, 550 S.W.2d 454 (1977). See also Travis v. State, 286 Ark. 26, 688 S.W.2d 935 (1985); Rawls v. State, 264 Ark. 954, 581 S.W.2d 311 (1979).

Rule 26.1(b) provides for withdrawal of a guilty plea after entry of judgment upon the plea, but it is not limited to that situation. The previous sentence says the motion is timely if there has been “due diligence,” and allowance is made for consideration of “the nature of the allegations of the motion.” The question thus becomes whether a motion to withdraw a guilty plea that was not made prior to pronouncement of sentence or after entry of the judgment may be timely. If withdrawal motions, other than those made prior to pronouncement of sentence, are to be considered under Rule 37 and its provisions on timeliness, the answer is found in Rule 37.2(c) which provides:

(c) If a conviction was obtained on a plea of guilty, or the petitioner was found guilty at trial and did not appeal the judgment of conviction, a petition claiming relief under this rule must be filed in the appropriate circuit court within ninety (90) days of the date of entry of judgment. If the judgment was not entered of record within ten (10) days of the date sentence was pronounced, a petition under this rule must be filed within ninety (90) days of the date sentence was pronounced.
* * *

(Emphasis supplied.)

In this case, the judgment and conviction order document was not entered until February 4, 1997, and the motion to withdraw the guilty plea was made within ninety days of the pronouncement of sentence.

We are, of course, aware that subsections (a) and (b) of Rule 26.1 may be read as inconsistent with each other. The opinion in the Shipman case seemed to be an attempt to reconcile them. We are also aware of the history of the rule subsequent to the Shipman decision.

In Malone v. State, 294 Ark. 376, 724 S.W.2d 945 (1988), we noted that there was nothing in the record to show that the parties seeking to withdraw guilty pleas had moved to do so prior to “sentencing” as required by Rule 26.1. We acknowledged, however, that Rule 37 could have applied but did not because that remedy is confined to use by a prisoner who is in custody under sentence of a circuit court, and the parties at issue were out on bond. Rule 37.2(c) and the provision with respect to the period from ten days after pronouncement of sentence and the entry of the judgment and commitment order document were not at issue and not discussed. While relief pursuant to Rule 37.1 is limited to prisoners incarcerated under sentence, that obviously is not contemplated by Rule 37.2 which, by its terms, applies prior to entry of the judgment.

In Brown v. State, 290 Ark. 289, 718 S.W.2d 937 (1986), we again acknowledged that a motion to withdraw a guilty plea could be treated pursuant to Rule 37 if there is a ruling on the merits of the motion. In the case now before us, there was such a ruling.

In Scalco v. City of Russellville, 318 Ark. 65, 883 S.W.2d 813 (1994), we discussed the history of Rule 26. We recited subsection (a) and emphasized the words “prior to pronouncement of sentence.” We wrote, “once the guilty plea has been accepted, and the sentencing [apparently referring to pronouncement] has taken place, the trial court is without jurisdiction to set aside a plea of guilty, unless there was some kind of stay of the sentence.” 318 Ark. at 70, 883 S.W.2d at 815. In the Scalco case, the sentence had been, in effect, “stayed” during an appeal of a suppression-of-evidence issue pursuant to Ark. R. Crim. P. 24.3 but had ultimately been affirmed by the Court of Appeals. We held that, as the sentence was not under any sort of a stay at the time the motion to withdraw the guilty plea was made, the Trial Court lacked jurisdiction to permit its withdrawal.

In McCuen v. State, 328 Ark. 46, 941 S.W.2d 397 (1997), a motion to withdraw a guilty plea was treated as a Rule 37 petition in the Trial Court. The contention was that Mr. McCuen’s counsel had been ineffective in seeking withdrawal of his guilty plea. We ruled on the merits of the argument and held there was no right to counsel in a postconviction proceeding. In that case, the motion had been made after entry of the judgment and commitment order document.

In Standridge v. State, 290 Ark. 150, 717 S.W.2d 795 (1986), the issue was whether a defendant, the imposition of whose sentence had been delayed for five years and who had been placed on probation for one year, could have probation revoked for an act which occurred prior to entry of the judgment. We held that the sentence was effective from the time of its pronouncement in open court. In Redding v. State, 293 Ark. 411, 738 S.W.2d 410 (1987), however, we held that “A sentence is placed into execution when the court issues a commitment order unless the trial court grants appellate bond or specifically delays execution upon other valid grounds.” 293 Ark. at 413, 738 S.W.2d at 411. The State would have us overrule that language in favor of the rationale of the Standridge case.

We agree with the State that the Standridge opinion cited persuasive authority for its result and the Redding case opinion was lacking in cited authority. We decline, however, to follow the Standridge opinion here. The Standridge holding that a judgment of conviction and a sentence are “entered” and “placed in execution” upon pronouncement in open court is inconsistent with our Admistrative Order No. 3, which describes entry of judgment, and our rule for civil cases which clearly provides for the effectiveness of judgments upon their entry or filing. Ark. R. Civ. P. 58; Standridge v. Standridge, 298 Ark. 494, 796 S.W.2d 12 (1989). In addition, it conflicts with Rule 37.2(c) quoted above. The latter rule obviously contemplates a period of time which, for a variety of reasons, may occur between the pronouncement of sentence and entry of a judgment and commitment order. To the extent it conflicts with this opinion, Standridge v. State, supra, is overruled.

In the case now before us, the “sentencing” took place on September 16, 1996, but the judgment and commitment order document was not entered until February 4, 1997. The motion to withdraw the guilty pleas was made between those dates. As Rule 26.1(a) is obviously not applicable because the motion was not made prior to pronouncement of the sentence, we are relegated to subsection (b) and Rule 37. Again, Rule 37.2(c) settles the timeliness issue, and it permitted the Trial Court to consider the issue of ineffective assistance of counsel on its merits because the judgment was not entered within ten days of the pronouncement of the sentence.

2. Ineffective assistance of counsel

“We will not reverse a trial court’s denial of postconviction relief unless the ruling was clearly erroneous.” Rowe v. State, 318 Ark. 25, 26-27, 883 S.W.2d 804, 805, citing Thompson v. State, 307 Ark. 492, 821-S.W.2d 37 (1991). Mr. Johninson claims he is entitled to withdraw his guilty plea on account of ineffective assistance of counsel.

In Hill v. Lockhart, 474 U.S. 52 (1985), [it was held that] the two-part standard adopted in Strickland v. Washington, 466 U.S. 668 (1984), for evaluating claims of ineffective assistance of counsel — requiring that the defendant show that counsel’s representation fell below an objective standard of reasonableness, and that there is a reasonable probability that, but for counsel’s unprofessional errors, the result of the proceeding would have been different — applies to guilty plea challenges based on ineffective assistance of counsel. In order to satisfy the second requirement, the defendant must show that there is a reasonable probability that, but for counsel's error, he would not have pleaded guilty and would have insisted on going to trial. It is the defendant’s burden to prove ineffective assistance of counsel, and it is a heavy burden because counsel is presumed effective. Hicks v. State, 289 Ark. 83, 709 S.W.2d 87 (1986).

Duncan v. State, 304 Ark. 311, 316, 802 S.W.2d 917, 919-20 (1991)(emphasis added). See Cranford v. State, 303 Ark. 393, 797 S.W.2d 442 (1990). See also Thompson v. State, 307 Ark. 492, 494, 821 S.W.2d 37, 38 (1991). (“We have recognized that a defendant whose conviction is based on a plea of guilty will have difficulty in proving prejudice under the Strickland standard since his plea rests on his admission in court that he did the act with which he is charged.”), citing Huff v. State, 289 Ark. 404, 711 S.W.2d 801 (1986); Crockett v. State, 282 Ark. 582, 669 S.W.2d 896 (1984).

In Stobaugh v. State, 298 Ark. 577, 769 S.W.2d 26 (1989), the defendant sought to withdraw his plea on the basis of his claim that his attorney provided ineffective assistance. The attorney’s assistance was alleged to be ineffective on several grounds, one of which was that the attorney had misled the defendant by giving him the impression that he would receive a suspended or probated sentence if he pleaded guilty. The defendant received a sentence of four years and a fine of $10,000. We rejected the argument as follows:

A defendant who receives a greater sentence than expected is not entided to have his plea withdrawn solely on that basis. In the absence of a plea agreement or other extenuating circumstances, the fact that a defendant hoped for, or even expected, a lighter sentence is not grounds for withdrawing the plea after an unfavorable sentence is pronounced.

Id. at 580, 769 S.W.2d at 28.

Despite the clear record showing that Mr. Johninson was advised of the sentences he might receive for the offenses to which he pleaded guilty and his statements that he understood that advice, he maintains that his attorney’s advice was “invalid” because he ultimately received a sentence in excess of ten years. “The judge is not required to believe any witness’s testimony.” McDaniel v. State, 291 Ark. 596, 599, 726 S.W.2d 679, 681 (1987).

The Trial Court could also have reasonably disbelieved the testimony of Mr. Johninson’s mother and sister. The prosecutor succeeded in showing some problems with their credibility. Even counsel for Mr. Johninson stated that the mother’s testimony concerning the attorney’s alleged promise of a ten-year sentence had changed since the meeting counsel had with her prior to the hearing before Judge Piazza.

Given our deference to the Trial Court’s position with respect to evaluation of the testimony of witnesses, we cannot conclude that its decision that Mr. Johninson’s counsel was not ineffective was clearly erroneous or clearly against the preponderance of the evidence.

Affirmed.


author: Tom Glaze, Justice.

text:
    BOATMAN’S NATIONAL BANK of Northwest Arkansas (Successor-in-Interest to Worthen National Bank of Northwest Arkansas) v. Shirley A. MOSS, Sharon J. Hale and City of Springdale
    97-127
    953 S.W.2d 583
    Supreme Court of Arkansas
    Opinion delivered October 30, 1997

      Stockland & Trantham, P.A., by: Charles S. Trantham, for appellant.
    No brief filed for appellee.
   Tom Glaze, Justice.

On February 23, 1996, appellant Boatmen’s National Bank of Northwest Arkansas filed a foreclosure suit against Shirley and Sharon Moss when they defaulted on a loan. Boatmen’s subsequently added the City of Springdale as a defendant because the city claimed an interest in the mortgaged property. In March 1996, Shirley Moss filed a pro se response to Boatmen’s complaint, and the city filed its answer, reserving the right to file a counterclaim or cross claim. Sharon filed nothing.

On March 29, 1996, Shirley filed a notice in the foreclosure suit, reflecting she had filed a petition for Chapter 13 bankruptcy on March 14, 1996, and an automatic stay went into effect pursuant to 11 U.S.C. § 362(a) (Supp. 1994). No further pleadings were filed or actions taken in Boatmen’s suit until December 5, 1996, when the chancery judge dismissed the case for want of prosecution under Rule 41 (b) of the Arkansas Rules of Civil Procedure. Rule 41(b), in pertinent part, provides that, in any case in which there has been no action shown on the record for the past twelve months, the court shall cause notice to be mailed to the attorneys of record, and to any party not represented by an attorney, that the case will be dismissed for want of prosecution unless on a stated day application is made, upon a showing of good cause, to continue the case on the court’s docket.

On December 18, 1996, Boatmen’s filed a motion to set aside the court’s dismissal order, stating Shirley was currently in bankruptcy and Boatmen’s foreclosure suit against Shirley had been automatically stayed. Boatmen’s requested its foreclosure action be reinstated, otherwise, it would be forced to refile its lawsuit in the future. After the chancery judge denied Boatmen’s motion, Boatmen’s filed this appeal.

We initially mention the obvious fact that the twelve-month period under Rule 41(b) had not elapsed at the time Boatmen’s case was dismissed. In this respect, the City of Springdale filed its answer on March 27, 1996, and Shirley filed notice of her bankruptcy on March 29, 1996, but the chancellor dismissed Boatmen’s suit on December 5, 1996. The chancellor’s dismissal was about four months premature. For this reason, alone, Boatmen’s request for reinstatement of its case would appear to have merit, based on the failure of the court to comply with the terms of Rule 41(b). However, because this court will not reverse a case based on an argument not raised below, we will decide the question that Boatmen’s raised below and now argues on appeal — Did the trial court err in dismissing Boatmen’s suit for want of prosecution when a bankruptcy stay order was in effect at the time?

This court has not addressed the question posed here, but courts in other jurisdictions have. For example, a Florida appellate court considered a lower court’s dismissal of a plaintiffs non-suit under a rule almost identical to Arkansas’s Rule 41(b) when a bankruptcy stay order was in effect. The appellate court reversed, stating the following:

[I]f an action is stayed as to one or more of the parties either by court order or by an automatic stay invoked because of the federal bankruptcy act, it will not be dismissed for failure to prosecute. To hold otherwise would frustrate the purpose of the rule which is to expedite and simplify litigation, not to cause additional litigation through no fault of the one moved against.

Bowman v. Peele, 413 So.2d 90 (1982); see also Bowman v. Dickey, 505 So.2d 581 (1987); Cf. Hughes v. Robo Bay Cities, Inc., 184 Cal. Rptr. 926 (1982). In addition to and consistent with the Florida decisions on the issue, the Texas Supreme Court held its court of appeals erred in issuing an opinion after a party to the appeal had filed bankruptcy and a stay order was in effect under 11 U.S.C. § 362(a).

Although no want-of-prosecution rule like Arkansas’s Rule 41(b) was at issue, a number of federal cases dealing with dismissal of actions when bankruptcy stay orders were in effect are particularly insightful and essentially reach the same outcomes as the ones reached by the Florida and Texas courts. In Dean v. Trans World Airlines, Inc., 72 F.3d 754 (9th Cir. 1995), for example, the court of appeals held the district court’s dismissal of Dean’s lawsuit against Trans World Airlines violated the § 362(a) automatic stay in effect when TWA filed for bankruptcy. The court of appeals explained its decision as follows:

Section 362(a) has two broad purposes. First, it provides debtors with protection against hungry creditors:
It gives the debtor a breathing spell from its creditors. It stops all collection efforts, all harassment, and all foreclosure actions. It permits the debtor to attempt a repayment or reorganization plan, or simply to be relieved of the financial pressures that drove him into bankruptcy.
H.R.Rep. No. 595, 95th Cong., 1st Sess., at 340 (1977), reprinted in 1978 U.S.C.C.A.N. 5963, 6296-97. Second, the stay assures creditors that the debtor’s other creditors are not racing to various courthouses to pursue independent remedies to drain the debtor’s assets:
The automatic stay also provides creditor protection. Without it, certain creditors would be able to pursue their own remedies against the debtor’s property. Those who acted first would obtain payment of the claims in preference to and to the detriment of other creditors.

See also Pope v. Manville Forest Products Corporation, 778 F.2d 238 (5th Cir. 1985).

The Pope case is particularly helpful. There, the Fifth Circuit Court of Appeals held that Pope’s Title VII action against her employer Manville Forest Products must remain on the district court’s docket until final disposition of Manville’s bankruptcy proceedings or some relief is granted from the § 362(a) stay. The court in Pope set out the following rationale in support of its decision:

We recognize that the stay, by its statutory words, operates against “the commencement or continuation” of judicial proceedings. No specific reference is made to “dismissal” of judicial proceedings. Nevertheless, it seems to us that ordinarily the stay must be construed to apply to dismissal as well. First, if either of the parties takes any step to obtain dismissal, such as motion to dismiss or motion for summary judgment, there is clearly a continuation of the judicial proceeding. Second, in the more technical sense, just the entry of an order of dismissal, even if entered sua sponte, constitutes a judicial act toward the disposition of the case and hence may be construed as a “continuation” of a judicial proceeding. Third, dismissal of a case places the party dismissed in the position of being stayed “to continue the judicial proceeding,” thus effectively blocking his right to appeal. Thus, absent the bankruptcy court’s lift of the stay, or perhaps a stipulation of dismissal, a case such as the one before us must, as a general rule, simply languish on the court’s docket until final disposition of the bankruptcy proceeding.

We believe the foregoing cases, particularly the federal ones, set out compelling reasons why party debtors and creditors should be protected against early dismissals of those pending court actions when bankruptcy proceedings and stay orders are filed. Even though such protective stays under § 362(a) automatically go into effect upon the filing of a bankruptcy action, a party in interest is provided an opportunity to seek relief from the stay for good cause under 11 U.S.C. § 362(d) (Supp. 1994). Meanwhile, the stay provides debtors with protection against hungry creditors, and assures creditors are not racing to various courthouses to pursue independent remedies to drain the debtor’s assets. Dean, 72 F.3d at 755, 756. Also, this court’s interpretation of its Rule 41(b) to prevent a want-of-prosecution dismissal of a pending state court action after a § 362(a) is in effect, eliminates a plaintiff from refiling the action in the future, serves judicial economy and avoids possible statute of limitation and priority claim problems.

For the reasons stated above, we reverse and remand with directions to reinstate Boatmen’s case.

       Too, while this court could reverse on the failure of complying with Rule 41(b), the bankruptcy stay argument would likely arise again, and judicial economy would be served to decide the issue now and avoid another appeal.

       Rule 1.420(e) of the Florida Rules of Civil Procedure reads as follows:
      (e) Failure to Prosecute. All actions in which it appears on the face of the record that no activity by filing of pleadings, order of court or otherwise has occurred for a period of one year shall be dismissed by the court on its own motion or on the motion of any interested person . . . unless a stipulation staying the action is approved by the court or a stay order has been filed or a party shows good cause in writing at least five days before the hearing on the motion why the action should remain pending.


text:
    25 RESIDENTS of Sevier County and the United Transportation Union v. ARKANSAS HIGHWAY and TRANSPORTATION COMMISSION
    97-340
    954 S.W.2d 242
    Supreme Court of Arkansas
    Opinion delivered October 30, 1997

      Youngdahl, Sadin, Morgan & McGowan, by: Thomas H. McGowam and Nga Ostoja-Starzewski, for appellant.

      Robert Wilson, Chief Counsel and Tom G. Lorenzo, for appellee Arkansas State Highway & Transp. Comm’n.

      Friday, Eldredge & Clark, by: John Dewey Watson and Allison Graves, for appellee DeQueen & Eastern R.R.
   Tom Glaze, Justice.

On January 26, 1996, pursuant to Ark. Code Ann. § 23-12-611 (1987), the DeQueen and Eastern Railroad (Railroad) filed an application to discontinue its agency station in Dierks, Arkansas. The Railroad operates as a rail carrier that transports goods, property, and raw materials in interstate and intrastate commerce. By discontinuing the Dierks agency station, the Railroad intended to consolidate that station with the agency operation in nearby DeQueen, Arkansas. Notice of the proposed discontinuation was filed with the Arkansas Highway and Transportation (AHT) Commission, and it provided the discontinuation would be effective in ninety days.

Twenty-five registered voters, who were residents of Dierks, petitioned the AHT Commission, asking it to reestablish the agency station operation. See § 23-12-611(b). The Commission set a hearing on the matter for May 21, 1996, but the hearing was postponed so that the respective parties could brief the following question:

"Whether the federal Interstate Commerce Commission (ICC) Termination Act of 1995 preempts state jurisdiction of the discontinuation of railroad agency stations?

See 49 U.S.C. § 10101 (1994) et seq. On June 4, 1996, the Commission entered its report and order concluding that it no longer had jurisdiction over the matter, because the ICC Termination Act, specifically § 10501, granted the Federal Surface Transportation Board the exclusive jurisdiction over “transportation by rail carriers” as part of the interstate rail network. The Commission’s decision resulted in its dismissing the residents’ petition.

Next, the residents appealed the Commission’s decision to the Pulaski County Circuit Court, and the court affirmed the holding of the Commission. The residents then filed this appeal, and assign two points of error by the circuit court. First, the residents argue that the federal act does not preempt § 23-12-611, and the AHT Commission retains jurisdiction over agency station closings in the state. Second, the residents contend that Congress’s enactment of the ICC Termination Act violates the Commerce Clause. Only these two questions of law need be addressed to decide this appeal.

In their first point of error, the residents claim that state law is preempted only when it conflicts with federal law, and no conflict is shown to exist in the federal and state laws here. The residents further argue that the federal act not only lacks specific language requiring preemption, but also that the state has long regulated the discontinuation of agency stations under state authority and should continue to do so. The Railroad counters by declaring preemption of § 23-12-611 has been effected by passage of the 1995 ICC Termination Act, and submits such preemption was accomplished in the three ways the Supreme Court sanctioned in English v. General Electric Co., 496 U.S. 72, 78-79 (1990). There, the Court held preemption may occur as follows: (1) express preemption, where Congress defines explicitly the extent to which its enactments preempt state law; (2) field preemption, where Congress’s regulation of a field is so pervasive or the federal interest so dominant that an intent to occupy the entire field can be inferred, and (3) conflict preemption, where state law stands as an obstacle to the accomplishment of the full purposes and objectives of a federal statute.

In any preemption analysis, the overriding principle which must guide our review is whether Congress intended to preempt state law. Id.; see also Medtronic, Inc. v. Lohr, 116 S.Ct. 2240 (1996). This analysis depends primarily on statutory and not constitutional interpretation. Philadelphia v. New Jersey, 430 U.S. 141 (1977); see also 16 Am. Jur. 2d, Constitutional Law § 291 at p. 795. Here, Congress’s intent is discerned from the act, itself. Section 10501(b)(1) establishes the parameters of the Surface Transportation Board’s jurisdiction as follows:

(1) transportation by rail carriers, and the remedies provided in this part (with respect to) rates, classifications, rules . . . practices, routes, services, and facilities of such carriers; and
(2) the construction, acquisition, operation, abandonment, or discontinuance of spur, industrial team, switching, or side tracks, or facilities, even if the tracks are located, or intended to be located, entirely in one State, is exclusive. Except as otherwise provided in this part, the remedies provided under this part with respect to regulation of rail transportation are exclusive and preempt the remedies provided under Federal or State law. (Emphasis added.)

Clearly, the act covers “transportation by rail carriers” and the discontinuation of their carriers’ related facilities.

The next logical question is whether the station agencies are related “facilities” within the meaning of the federal act. Three recent cases from other jurisdictions addressing this issue have answered this question, yes. The Nebraska Supreme Court, in In re Application of Burlington Northern R. Co. v. Page Grain Co., 545 N.W.2d 749 (Neb. 1996), held that the states no longer have jurisdiction over services and facilities of interstate rail carriers, and further decided that the regulation and remedies relevant to rail service agencies are under the exclusive jurisdiction of the federal government. In CSX Transportation, Inc. v. Georgia Public Service Commission, 944 F. Supp. 1573 (N.D. Ga. 1996), a United States District Court case came to the same conclusion, holding that the ICC Termination Act preempted the state regulation of railroad agency closings. Finally, the United States District Court in Montana determined that, by the federal act, Congress expressly preempted state law on railroad agency discontinuations, and further held that state law was preempted by virtue of both field and conflict preemption. See Burlington Northern Sante Fe Corp. v. Anderson, 959 F. Supp. 1288 (D. Mont. 1997).

Given the broad language of the act itself, its statutory framework, and considering the recent decisions interpreting the act, we believe it is clear that Congress intended to preempt the states’ authority to engage in economic regulation of rail carriers. The preemptive strike, we hold, includes regulation of agency station discontinuations. Accordingly, we conclude § 23-2-611, which gives the AHT Commission the authority to regulate such closings, is preempted by the ICC Termination Act of 1995.

In their second point of error, the residents maintain that the act violates the Commerce Clause of the United States Constitution. The residents argue that Congress has exceeded its authority by regulating closings of agency stations. This argument is without merit.

In 1981, the Supreme Court held that Congress may regulate (1) the use of channels of interstate commerce, (2) the instrumentalities of interstate commerce, or persons or things in interstate commerce, even though the threat may come only from intrastate activities, and (3) activities having a substantial relation to interstate commerce. Hodel v. Virginia Surface Mining & Recl. Assn., Inc., 452 U.S. 264, 276-77 (1981). Congress’s authority to regulate extends even to intrastate aspects of the operation of railroads. The law is well settled that Congress has the power to regulate railroad boxcars traveling exclusively intrastate because of their inherent mobility and connection to interstate commerce. See Southern Ry. Co. v. United States, 222 U.S. 20 (1911).

Contrary to the residents’ argument, Congress’s authority to regulate even intrastate aspects of railroads under the Commerce Clause is not undercut by recent United States Supreme Court decisions. See United States v. Lopez, 514 U.S. 549 (1995). When complete regulation of interstate commerce requires incidental regulation of intrastate commerce, the Commerce Clause authorizes such regulation. Id.; see also CSX Transp., 944 F.Supp. 1573. Congress’s regulation of intrastate railroad agencies under the act is part of a larger regulation of economic activity, in which the regulatory scheme would be undercut unless the intrastate activity were regulated. Id. Therefore, the preemptive effect of the act does not violate Congress’s power to regulate railroad agency station discontinuations. The dismissal of the residents’ petition by the Pulaski County Circuit Court for lack of jurisdiction due to preemption must be affirmed.

Affirmed.


author: Robert L. Brown, Justice. Ray Thornton, Justice,

text:
    SEECO, INC., et al. v. Allen HALES, et al.
    96-1392
    954 S.W.2d 234
    Supreme Court of Arkansas
    Opinion delivered October 30, 1997

      Everett & Mars, by: Thomas A. Mars; Kenneth S. Gould; and John J. Watkins, for appellants.

      Harper, Young, Smith & Maurras, PLC, by: Don A. Smith and S. Walton Maurras; Marilyn J. Eickenhorst; and Gable Gotwals Mock Schwabe, by: James M. Sturdivant, M. Benjamin Singletary, and Timothy A. Carney, for appellees.
   Robert L. Brown, Justice.

Appellants SEECO, Inc. (SEECO), and Arkansas Western Gas Company (AWG) are wholly owned subsidiaries of appellant Southwestern Electric Company (Southwestern). Appellees Allen Hales, et al. (the royalty owners), are lessors under various oil and gas leases possessed by SEECO who brought a class action suit to claim royalties that were allegedly due but not paid. The trial court certified the royalty owners as a class after considering the criteria set out in Rule 23(a) and (b) of the Arkansas Rules of Civil Procedure. The class is estimated to consist of more than 3,000 members. SEECO, AWG, and Southwestern have appealed the class certification and specifically contest the trial court’s findings that common questions of law and fact predominate over questions affecting individual class members. The appellants further reject the claim that the royalty owners’ class action is the superior method for the fair and efficient adjudication of this controversy. As a corollary issue, the appellants contend that the constitutional right to trial by jury will be skewed by having bifurcated trials with one jury deciding common questions for the royalty owners and a second jury determining individual questions. We affirm.

In their complaint, the royalty owners claim that SEECO failed to enforce the provisions of a gas-sales contract, known as Contract 59, against AWG and further failed to pay the royalty-owners the proper proceeds from the gas produced under the numerous SEECO leases affected by the contract. The complaint states that Contract 59 was entered into between SEECO and AWG on July 24, 1978. It alleges that under Contract 59 SEECO dedicated acreage in Franklin, Johnson, Washington, Crawford, and Logan Counties for oil and gas production, and that AWG obligated itself for 20 years to purchase volumes of gas under a “take-or-pay” arrangement at a guaranteed price. That arrangement provided that the purchaser (AWG, in this instance) would either buy a volume of gas at the contract price or pay a specified price without taking the gas. The royalty owners allege that throughout the term of Contract 59, SEECO did not require AWG to pay the guaranteed prices or take the required volumes of gas per the terms of the agreement.

The royalty owners further allege: (1) that SEECO allowed AWG to freeze gas prices below the contract price for the period between December 1984 and July 1, 1994; (2) that SEECO imprudently and arbitrarily released wells, acreage, and production from Contract 59 throughout the term of the contract, which resulted in the sale of gas for less than the contract price; (3) that SEECO failed to drill additional wells and fully develop a plan for increased production on the royalty owners’ acreage; and (4) that SEECO continuously provided gas storage to AWG without compensation. Other misdeeds by SEECO were set out in the complaint which, according to the royalty owners, resulted in lower prices for gas and, thus, less proceeds for them.

The royalty owners also allege that SEECO fraudulently concealed its failures under Contract 59 by intentionally refusing to document the pricing and other deficiencies under Contract 59. They state that SEECO engaged in conduct favorable to AWG due to their relationship as affiliate companies wholly owned by Southwestern and that SEECO’s course of conduct resulted in significant losses to the royalty owners.

The complaint specifically alleges that in 1987 SEECO solicited the purchase of mineral interests from the royalty owners and misrepresented the market price for natural gas. In that solicitation letter, SEECO noted that gas prices had been declining in recent years, but, according to the allegation, SEECO failed to disclose that under Contract 59 AWG was obligated to make minimal volume purchases of gas and to pay for that gas at a certain price. The complaint also asserts that in a 1983 letter SEECO advised the royalty owners that it had entered into a gas-sales contract with Natural Gas Pipeline (NGP) which would result in reduced royalties. The royalty owners claim that SEECO failed to disclose that the same gas dedicated under the NGP contract was already dedicated under Contract 59, with its take-or-pay provision, at a significantly higher purchase price.

The royalty owners seek compensatory damages in excess of $58,450,000 and punitive damages against appellants, jointly and severally, on the legal theories of: (1) fraud and constructive fraud; (2) breach of the oil and gas leases; (3) breach of the duty to market the gas reasonably; (4) breach of the duty of good faith and fair dealing; (5) violation of Ark. Code Ann. §§ 15-74-601 & -602 (Repl. 1994), which govern penalties for fraudulently withholding oil and lease payments; (6) unjust enrichment; (7) tortious interference with contractual relations; (8) civil conspiracy; and (9) violation of Ark. Code Ann. § 15-72-305 (Repl. 1994), which requires calculation of royalties on a weighted-average price. The royalty owners also asked for certification of a class pursuant to Rule 23 of the Arkansas Rules of Civil Procedure.

At the class-certification hearing, Dr. David Taylor testified that he was a named plaintiff seeking to become a class representative because of his royalty interests in eleven oil and gas leases dedicated under Contract 59. He testified that his claims concerned the lack of enforcement of Contract 59 regarding the price of gas sold by SEECO to AWG as well as the volume of gas to be purchased. On cross-examination, Dr. Taylor stated that SEECO had voluntarily converted the leases from fixed-price leases to proceeds leases based on its performance over the last number of years. He also contended that the terms of the leases should not control because SEECO and AWG were affiliates which were not dealing at arms’ length; therefore, the royalty-price determination should be dictated by the terms of Contract 59, as opposed to his leases. Dr. Taylor further contended that there was fraud in connection with the 1983 letter and the 1987 solicitation letter sent out by SEECO because neither letter made reference to Contract 59 and AWG’s take-or-pay obligation under that contract.

In rebuttal, SEECO attacked Dr. Taylor’s assertion of fraudulent concealment and showed that Contract 59 had been on file with the Arkansas Public Service Commission (PSC) since 1978 or 1979. SEECO also offered several newspaper articles with information that, it argued, should have put royalty owners on notice about pricing. One was a January 21, 1991 article entitled “Purchasing Practices Defended by Company,” from the Ozark Spectator, which documented challenges from the PSC and the Attorney General’s Office regarding high prices paid by AWG, which were passed on to ratepayers under Contract 59. A second article was a January 15, 1993 story entitled “Gas Company Left Prices High, PSC Told” from the Arkansas Democrat-Gazette, which also indicated that AWG was paying too much under Contract 59. Finally, a November 1, 1994 article entitled “Settlement Reached After 3 Years” in the Northwest Arkansas Times documented a settlement between the Attorney General’s Office, PSC staff, SEECO, and AWG, causing a reduction for AWG ratepayers because Contract 59 violated Arkansas’s least-cost purchasing law. Dr. Taylor testified that he was unaware of these articles.

Allen Franklin Hales, another named plaintiff and potential class representative, testified that he was asking for certification as a royalty owner under two leases with SEECO which were dedicated to Contract 59. In his deposition, Hales echoed Dr. Taylor’s concerns about the fact that the 1983 and 1987 letters were silent about Contract 59. Dr. Robert Gordon Jeffers also testified by deposition that SEECO should have enforced Contract 59.

Brooks Clower, an attorney employed by Southwestern, testified that he perused the oil and gas leases of Dr. Taylor, Dr. Jeffers, and Mr. Hales, and concluded that some leases contained a fixed-price royalty and a disclaimer of implied covenants, while other leases provided for royalties to be paid on a proceeds basis and did not contain a disclaimer clause. He also testified that the various leases differed with respect to government-regulation clauses, which would make some leases subject to certain defenses that would be unavailable in connection with other leases. The leases also differed in form, with Dr. Taylor, for example, having three different types of leases. Clower testified that the leases may or may not be subject to pooling agreements made for the purpose of forming a drilling unit, which would also vary the terms of the lease agreements.

The trial court entered an order certifying the class of royalty owners affected by the alleged acts and omissions of SEECO, AWG, and Southwestern. Two subclasses were created based on whether the subclass leases were leased to SEECO and dedicated under Contract 59, or leased to third parties and affected by Contract 59. The trial court’s order found that the following common and predominating issues existed:

The evidence produced by the plaintiffs indicates: an alleged overall scheme and course of conduct by the defendants designed to defraud the members of the proposed class as a group irrespective of the type of oil and gas lease or the volume of production from the leases; that SEECO in deference to Arkansas Western Gas Company’s interest allegedly failed to enforce the take, price and other provisions of Contract 59 almost since the contract’s inception and actively concealed such conduct from the proposed class; that the defendants failed to state material facts in correspondence which appears to have been sent to members of the potential class including citizens and residents of this judicial district; the defendants intentionally failed to keep documentary records of the deficiencies under Contract 59 for fear of discovery of such deficiencies by the members of the proposed class; and the defendants allegedly engaged in actions before the Arkansas Public Service Commission designed to conceal their actions from the members of the proposed class.

I. Predominance

The appellants urge that the trial court erred in its predominance finding. We observe initially that trial courts are given broad discretion in matters of class certification. Direct Gen. Ins. Co. v. Lane, 328 Ark. 476, 944 S.W.2d 528 (1997); Union Nat’l Bank v. Barnhart, 308 Ark. 190, 823 S.W.2d 878 (1992); First Nat’l Bank v. Mercantile Bank, 304 Ark. 196, 801 S.W.2d 38 (1990). Appellants claim, however, that the following issues, which can only be resolved individually, illustrate that the trial court abused its discretion in certifying the class: (1) differences in the leases with respect to their form, (2) differing bases for determining royalties, (3) the presence or absence of waivers of implied covenants, (4) the presence or absence of government-regulation clauses; (5) the effect of pooling agreements on the leases; (6) the difficulty of determining damages, especially with respect to Subclass II, which involves contracts between third-party producers or operators and purchasers affected by Contract 59; (7) proof of reliance in support of the claims for fraud; and (8) proof of reasonable diligence with respect to claims of fraudulent concealment. The royalty owners respond with the argument that the one issue that permeates every claim is appellants’ fraudulent and wrongful course of action taken against the royalty owners in light of Contract 59.

Five cases provide a compendium of this court’s recent statements and holdings on predominance. In Arkansas La. Gas Co. v. Morris, 294 Ark. 496, 744 S.W.2d 709 (1988), the trial court certified a class action brought by fixed-price lessors owning mineral tracts in the Cecil Field against the appellants, collectively referred to as ArkLa. The class sought royalties on a proceeds basis under ten different theories with respect to new wells that were drilled, including estoppel, waiver, and reformation. ArkLa challenged the class under the requirements of Rule 23(b) of the Arkansas Rules of Civil Procedure and asserted that the case would require individual proof of detrimental reliance for each class member under the estoppel theory and also either proof of mutual or unilateral mistake or proof of fraud or inequitable conduct for success on the reformation theory. We affirmed the trial court and noted that even if ArkLa’s arguments were correct, the class presented alternative theories for recovery that presented common questions. We stated that a common question existed as to whether appellants’ course of conduct, which included ignoring the fixed prices contained in the leases, gave rise to a cause of action in favor of the fixed-price lessors. We then concluded that if the trial court found that the evidence presented individual questions of reliance or mistake, it could defer those individual questions until after it disposed of the questions common to the class. Accordingly, this court established a procedure of handling the common issues first, recognizing that the trial court, in its discretion, could later resolve the individual questions.

This approach was embraced in International Union of Elec., Radio & Mach. Workers v. Hudson, 295 Ark. 107, 747 S.W.2d 81 (1988). There, the trial court certified a class of non-union salaried and hourly employees who sued a labor union and its local chapter for loss of wages, personal injury, and property damage that occurred during a three-day period while the class attempted to work through a strike. Specifically, the trial court certified two subclasses: one containing those appellees who were deprived of the opportunity to work over the three-day period; and those appellees who suffered personal or motor-vehicle damages or both while attempting to cross the picket line.

In affirming the trial court’s decision, this court determined that the common question of the unions’ liability for the actions of their members predominated. We again advocated an approach of deciding the merits of the common issue first:

The central question of the unions’ liability will be the focus of the class action. That can be decided with respect to the subclasses even though the alleged mass action was not an instantaneous event. Again, if they are held liable in general, the unions will be able to present any defenses they may have as the claims of the individual class members are presented thereafter, the only effect of the decision being that the individual class members will not have to prove, and the court will not have to decide, the general question of liability in each case.

International Union of Elec., Radio & Mach. Workers v. Hudson, 295 Ark. at 120, 747 S.W.2d at 88.

To the same effect was this court’s decision in Lemarco, Inc. v. Wood, 305 Ark. 1, 804 S.W.2d 724 (1991). In Lemarco, a class was certified which consisted of persons who entered into retail installment membership contracts with Lemarco, a private buyers club. We estimated the potential size of the class at about 800 members. Appellees asserted that Lemarco defrauded them of membership fees by promising free gifts for attending sales presentations and misrepresenting the value of membership. This court affirmed the trial court’s decision on the basis that predominance was satisfied because there were common issues of fact arising out ofLemarco’s sales training, solicitation mailing, sales presentations, installment contracts, and its intentions with regard to all of them. We concluded by discussing the predominance and superiority questions in tandem. We followed Hudson and held that common issues should be resolved first to attain real efficiency. We then stated:

Even if the trial court eventually determines that the cases have to splinter with respect to some individual claims, efficiency would still have been achieved by resolving those common questions which predominate over individual questions. Finally, pursuing this case as a class action is fair to both sides. Lemarco can offer evidence concerning its sales training, solicitation mailings, sales presentations, installment contracts, and its intentions regarding all of them. It can also present individual defenses to the claims of individual class members, if necessary, once the common questions have been determined. A class action approach is also fair to the class members in that they probably would not sue if they could not do so as a class since it would not be economically feasible to do so.

Lemarco, Inc. v. Wood, 305 Ark. at 4, 804 S.W.2d at 726.

This rationale continued to hold sway in Summons v. Missouri Pac. R.R., 306 Ark. 116, 813 S.W.2d 240 (1991). In that case, the trial court refused to certify a class of about 5,000 North Little Rock residents and business people who were forced to evacuate the area when a railroad accident caused a chemical tank car to overturn. The residents sought a recovery against the railroad and Union Carbide under theories of negligence and strict liability for expenditures on food, clothing, shelter, medical treatment, and damages for pain and mental anguish. This court determined that the trial court abused its discretion in not certifying the class because the questions regarding liability for negligence and strict liability predominated over any individual issues, and because a class action was a superior method for handling the numerous claims. We concluded that the repeated litigation of the liability question and the possibility of inconsistent results outweighed the fact that each claimant would have different damage evidence. We reversed the trial court and approved the class certification even though this court recognized that each claimant would have the burden of proving that the railroad’s conduct was the proximate cause of his damages.

The case of Arthur v. Zearley, 320 Ark. 273, 895 S.W.2d 928 (1995) followed. In that case, this court determined that the trial court abused its discretion in certifying a class of plaintiffs who brought claims for medical negligence, battery, fraud, outrage, strict liability, and breach of warranty arising out of the implantation of Orthoblock into their spines. Appellants, who were the manufacturer of Orthoblock and the doctors and medical facilities responsible for the surgical procedures, argued that the issue of informed consent was a predicate to the individual claims and could not be tried on a class basis. This court agreed, as it was clear that each plaintiff would be required to testify about oral communications with his physician and that the issue of informed consent was woven throughout the claims for negligence, battery, outrage, and fraud or fraudulent concealment. This court also concluded that the issue of causation would require focus on individual claims, as each person who received the Orthoblock treatment would be required to place his or her medical condition into evidence. Although this court acknowledged the presence of common issues, it determined that the large number of individual questions rendered individual actions the superior means for obtaining efficiency and fairness.

SEECO now asserts in the present appeal that Arthur v. Zearley, supra, essentially changed our caselaw on class actions because we renounced the certification of a class of plaintiffs with individual claims as opposed to upholding certification to resolve common issues and deferring individual issues until later in the proceeding. We disagree with that characterization of the Zearley decision. What is alleged in the case at hand is a single course of fraudulent conduct perpetrated by the appellants and directed at the royalty owners, with each plaintiff depending on the same facts and legal arguments for recovery. The issue of a fraudulent scheme is central to the instant case and a common starting point for all class members. Arthur v. Zearley, supra, simply had no common issue, and we recognized in that case that individual issues of informed consent and causation were the essence of the claims of each separate plaintiff.

In support of their argument that individual issues predominate, SEECO, AWG, and Southwestern point to the fact that the royalty owners seek recovery based on a fraud theory that requires proof of reliance by each plaintiff. The appellants are correct that to prove actual fraud, evidence of justifiable reliance must be offered. Sexton Law Firm, P.A. v. Milligan, 329 Ark. 285, 948 S.W.2d 388 (1997); Calandro v. Parkerson, 327 Ark. 131, 936 S.W.2d 755 (1997); Clark v. Ridgeway, 326 Ark. 378, 914 S.W.2d 745 (1996). Moreover, under Arkansas law, fraud is never presumed, and clear and convincing testimony must exist to prove its elements. Nicholson v. Simmons First Nat’l Corp., 312 Ark. 291, 849 S.W.2d 483 (1993); Interstate Freeway Serv., Inc. v. Houser, 310 Ark. 302, 835 S.W.2d 872 (1992). In the same vein, appellants assert that there are individual issues with respect to the assertion of fraudulent concealment, particularly surrounding the requirement that the royalty owners exercise reasonable diligence to discover any fraudulent concealment. See Milam v. Bank of Cabot, 327 Ark. 256, 937 S.W.2d 653 (1997); Norris v. Baker, 320 Ark. 629, 899 S.W.2d 70 (1995); First Pyramid Life Ins. Co. v. Stoltz, 311 Ark. 313, 843 S.W.2d 842 (1992).

It is clear from our caselaw that individual questions relating to a class member’s reliance for an estoppel claim (Arkansas La. Gas Co. v. Morris, supra) or reliance for a misrepresentation claim (Lemarco, Inc. v. Wood, supra) will not defeat class certification. Moreover, one distinguished treatise, Newberg on Class Actions, supports this position:

Challenges based on the statute of Hmitations, fraudulent concealment, releases, causation, or rehance have usually been rejected and will not bar predominance satisfaction because those issues go to the right of a class member to recover, in contrast to underlying common issues of the defendant’s liability.

1 Herbert B. Newberg, Newberg on Class Actions § 4.26, at 4-104 (3d ed. 1992).

Other courts have reached the same conclusion in common-law fraud claims despite the reliance requirement. See, e.g., Walco Investments, Inc. v. Thenen, 168 F.R.D. 315 (S.D. Fla. 1996)(certi-fying global class of investors who brought several claims, including common-law fraud, against promoters allegedly involved in a Ponzi scheme; numerous common questions of law and fact connected to the fraud allegations predominated over individual issues); Murray v. Sevier, 156 F.R.D. 235 (D. Kan. 1994)(stating that common issues are found under a common-law fraud claim that involves written misrepresentations and/or omissions; reliance might be shown by proving that the misrepresentations were material to a person who would have read it); Smith v. MCI Telecommunications Corp, 124 F.R.D. 665 (D. Kan. 1989)(certifying a claim for common-law fraud arising from misrepresentations relative to the payment of commissions; reliance on the terms of written documents given to all salespersons could be established by proving their employment with MCI); Alexander v. Centrafarm Group, N.V., 124 F.R.D. 178 (N.D. Ill. 1988)(allowing pendent common-law fraud claim in a securities action; holding there was no indication that reliance would create significant individual issues because the alleged misrepresentations were contained in a proxy statement uniform to all class members). But see, e.g., Kelley v. Mid-America Racing Stables, Inc., 139 F.R.D. 405 (W.D. Okl. 1990) (denying certification for pendent common-law fraud claim in a securities action; stating that every member of the proposed class would have to testify as to his reliance on the prospectus).

As to appellants’ contention of lack of reasonable diligence in discovering fraudulent concealment, the majority view appears to be that this lapse does not operate as a bar to a finding of predominance in the common issue. See, e.g., In Re Indus. Diamonds Antitrust Litigation, 167 F.R.D. 374 (S.D. N.Y. 1996); In Re Catfish Antitrust Litigation, 826 F. Supp. 1019 (N.D. Miss. 1993); Town of New Castle v. Yonkers Contracting Co., 131 F.R.D. 38 (S.D. N.Y. 1990).

We hold that although the fact that lack of reliance and diligence may be arguments raised by the appellants, these challenges will not override the common question relating to the allegation of a scheme perpetrated by the appellants. The overarching issue which must be the starting point in the resolution of this matter relates to the existence of the alleged scheme. There was no abuse of discretion by the trial court.

Appellants also raise a challenge to the constitutionality of bifurcated trials under Article 2, section 7, of the Arkansas Constitution. They assert that a bifurcated procedure could infringe upon their jury-trial right, if the matter began with one jury deciding common issues but concluded with a second jury determining individual issues. We do not know at this juncture whether the trial court will use multiple juries. Thus, any opinion on the subject would be advisory in nature. See, e.g., Baker Car & Truck Rental, Inc. v. City of Little Rock, 325 Ark. 357, 925 S.W.2d 780 (1996). We decline to address this issue.

II. Superiority

Rule 23(b) further requires that a class action be superior to other available methods for the fair and efficient adjudication of the controversy. As noted, this court has held repeatedly that real efficiency can be had if common, predominating questions of law or fact are first decided, with cases then splintering for the trial of individual issues, if necessary. See, e.g., Farm Bureau Mutual Ins. Co. v. Farm Bureau Policy Holders, 323 Ark. 706, 918 S.W.2d 129 (1996); Summons v. Missouri Pac. R.R., supra; Lemarco, Inc. v. Wood, supra; International Union of Elec., Radio & Mach. Workers v. Hudson, supra.

Moreover, to repeat in part what we said in Lemarco, Inc. v. Wood, supra, a class action is fair to both sides. The appellants can present evidence of fair dealing with the royalty owners and may prevail on this core issue. They can also present individual defenses subsequendy, should this prove to be necessary. This procedure is fair to the royalty owners because to sue as individuals may not be economically feasible. We hold that a class action is the superior method for adjudicating this controversy. Again, there was no abuse of discretion by the trial court in certifying the class.

Affirmed.

Thornton, J., dissents.

Ray Thornton, Justice,

dissenting. I would reverse because I do not find that either the trial court’s order or the record reflects the type of rigorous analysis that I believe is required under Rule 23 to determine the reasons why the common questions predominate over the individual questions and why a class action is superior to other methods of trying the issues. Therefore, I respectfully dissent for the reasons stated in the dissenting opinion in Mega Life & Health Ins. Co. v. Jacola, 330 Ark. 261, 954 S.W.2d 898 (1997).


author: Annabelle Clinton Imber, Justice.

text:
    Patrick MAJESTY v. STATE of Arkansas
    97-411
    954 S.W.2d 245
    Supreme Court of Arkansas
    Opinion delivered October 30, 1997

      Christopher Carter, Marion County Public Defender, for appellant.

      Winston Bryant, Att’y Gen., by: Kelly Terry, Asst. Att’y Gen., for appellee.
   Annabelle Clinton Imber, Justice.

The appellant, Patrick Majesty, appeals the trial court’s denial of his motion to transfer to juvenile court. Because we cannot say that the trial court was clearly erroneous, we affirm.

On August 5, 1996, Majesty was charged with commercial burglary, a class C felony, and theft of property, a class B felony, in Marion County Circuit Court. These crimes were allegedly perpetrated on August 2, 1996, during the burglary of a pawn shop. According to the information, the value of the stolen property was estimated at $5,000. On August 9, 1996, Majesty filed a motion to transfer the charges to juvenile court. He was seventeen years of age at the time of the offenses; his date of birth was October 13, 1978. In his transfer motion, Majesty claimed that his only prior connection with the criminal justice system, adult or juvenile, was a theft of property charge brought against him in Louisiana when he was fourteen years old.

The trial court held a hearing on the motion on December 16, 1996. The State conceded that it had no prior juvenile history concerning Majesty. However, given that Majesty turned eighteen shortly after the crimes, the State took the position that transfer should be denied because “there is nothing we can do with him in juvenile court.” While defense counsel announced his intentions to call Majesty and his father as witnesses, the trial court responded, “Well, for what — I mean, it doesn’t sound to the Court, if he’s already turned 18, I don’t find that a very viable option of putting him in juvenile court if there is nothing juvenile court can do, really.” Accordingly, the trial court denied the motion to transfer to juvenile court because Majesty was over the age of eighteen, the crime charged was a serious offense involving substantial restitution, and “under the circumstances, I just don’t feel like juvenile court could adequately deal with the resolution of this case.” Majesty brings this interlocutory appeal from the denial of his motion to transfer.

On appeal, Majesty argues that the trial court erred in denying the transfer because it only considered his age and the nature of the crimes charged. He in turn asserts that “[t]he court did not give a careful consideration in this matter and certainly did not make a finding by clear and convincing evidence.”

While the trial court’s decision to try a juvenile as an adult must be supported by clear and convincing evidence, Ark. Code Ann. § 9-27-318(f) (Supp. 1995), the court is not required to give equal weight to the statutory factors found in Ark. Code Ann. § 9-27-318(e) (Supp. 1995). Brooks v. State, 326 Ark. 201, 929 S.W.2d 160 (1996); Ring v. State, 320 Ark. 128, 894 S.W.2d 944 (1995). We will not reverse the trial court’s determination unless it was clearly erroneous. Kindle v. State, 326 Ark. 282, 931 S.W.2d 117 (1996); McGaughy v. State, 321 Ark. 537, 906 S.W.2d 671 (1995).

It is true that seriousness alone is not a sufficient basis to deny a transfer to juvenile court. See Green v. State, 323 Ark. 635, 916 S.W.2d 756 (1996). However, in reviewing transfer motions this court has also emphasized the importance of evaluating the juvenile’s prospects for rehabilitation within the Division of Youth Services in cases where the juvenile has already turned eighteen. See, eg., Jensen v. State, 328 Ark. 349, 944 S.W.2d 820 (1997); Brooks v. State, 326 Ark. 201, 929 S.W.2d 160 (1996); Maddox v. State, 326 Ark. 515, 931 S.W.2d 438 (1996); Hansen v. State, 323 Ark. 407, 914 S.W.2d 737 (1996). When a juvenile beyond the age of eighteen may not be committed at youth services, see Ark. Code Ann. § 9-27-331(a)(1) (Supp. 1995) and Ark. Code Ann. § 9-28-208(d) (Supp. 1995), we have characterized the juvenile’s chances for rehabilitation there as “nonexistent.” See Jensen, supra; Brooks, supra; Hansen, supra.

In Oglesby v. State, 329 Ark. 127, 946 S.W.2d 693 (1997), this court recently considered the juxtaposition of a serious property offense with an eighteen year old’s prospects for rehabilitation in the context of juvenile transfer. Among other things, Oglesby was charged in circuit court with residential burglary, a class B felony. At the time of his arrest on the charge, Oglesby was seventeen years old, and he turned eighteen shordy before the hearing on his motion to transfer. The trial court denied Oglesby’s motion to transfer to juvenile court. While conceding that the offense charged was a serious one, Oglesby argued on appeal that the lack of violence in the crime charged warranted a transfer. This court rejected his argument and affirmed, emphasizing that Oglesby had reached eighteen years of age and was no longer eligible for juvenile rehabilitative services. “Based upon the seriousness of a Class B felony and the fact that Oglesby is now eighteen years old, we cannot say that the denial of transfer was clearly erroneous.” Id.; see also Smith v. State, 328 Ark. 736, 946 S.W.2d 667 (1997) (affirming the denial of transfer where the defendant was charged with numerous property crimes and nineteen years old at the time of the opinion).

In the present case, Majesty is charged with serious offenses — theft of property, in this case a class B felony, and commercial burglary, a class C felony. At the time of this writing, Majesty is now nineteen years old; thus, he has virtually no juvenile services available to him. See Ark. Code Ann. § 9-28-208 (d); Oglesby, supra; Smith, supra. In light of these two factors, the trial court was not clearly erroneous in denying the motion to transfer to juvenile court.

Affirmed.

       In Smith, various witnesses testified on the defendant’s behalf, while the defendant in Oglesby offered no evidence to show that transfer was warranted. Although the point is quite vague, Majesty arguably asserts in his brief that the trial court erred in ruling on the transfer motion “without testimony of defendant or his father which was requested by the defense.” To the extent that this is argued as an independent ground for reversal, we agree with the State that this point was waived by Majesty’s failure to present any objection to the trial court concerning its failure to take witness testimony. Moreover, Majesty failed to proffer the substance of the testimony.


author: Ray Thornton, Justice.

text:
    Sharon Harris COLE v. Olen D. HARRIS
    97-421
    953 S.W.2d 586
    Supreme Court of Arkansas
    Opinion delivered October 30, 1997

      William F. Cavenaugh, for appellant.

      Harrell & Lindsey, P.A., by: Searcy W. Harrell, Jr., for appellee.
   Ray Thornton, Justice.

The issue in this case is whether the statute of limitations bars the action for child-support arrearages brought by appellant Sharon Harris Cole on behalf of her child, Brian Lynn Harris. Brian was born on July 11, 1972. On July 9, 1974, the chancery court granted appellant a divorce from appellee Olen Dale Harris and awarded her weekly child support of $15.00.

Eleven months after Brian turned twenty-three years of age, appellant filed a notice of income withholding for child support. Appellee petitioned to terminate the child-support collections, claiming that appellant’s action was barred by the statute of limitations, which had run at Brian’s twenty-third birthday. The trial court granted the petition, and appellant brings this appeal. Appellant contends that the trial court committed reversible error in applying the wrong statute of limitations. We find no error and affirm.

We have recently addressed the question of what statute of limitations applies in actions to collect child-support arrearages. Branch v. Carter, 326 Ark. 748, 933 S.W.2d 806 (1996). We interpreted Act 870 of 1991, codified at Ark. Code Ann. section 9-14-236 (Supp. 1995), as follows: “The statute of limitations for child support thus now commences with an initial order of support and extends until the child reaches the age of twenty-three.” Branch, 326 Ark. at 751, 933 S.W.2d at 807.

Appellant contends that the trial court erred in applying Ark. Code Ann. section 9-14-236 in this case. She argues that the 1987 legislative enactment of Ark. Code Ann. section 9-14-234 (Supp. 1995), stating that accrued child-support arrearages are enforceable as final judgments, makes Ark. Code Ann. section 16-56-114 (1987), a ten-year limitation period for general collection of civil judgments, applicable to actions to collect child-support arrearages. This is a novel argument, and we proceed with our review of the legislative actions and judicial principles that guide our analysis.

The general limitation for filing actions on all judgments and decrees, enacted in 1844, provides the following: “Actions on all judgments and decrees shall be commenced within ten (10) years after [the] cause of action shall accrue, and not afterward.” Ark. Code Ann. § 16-56-114. In Brun v. Rembert, 227 Ark. 241, 297 S.W.2d 940 (1957), we determined that this ten-year statute of limitations did not apply to child-support payments since the order for child support is not a final decree. Instead, we held that a general five-year statute of limitations applied. Id. at 243, 297 S.W.2d at 943 (applying Ark. Stat. Ann § 37-213, later replaced by Ark. Code Ann. § 16-56-115 (1987)).

In 1987, the legislature adopted the following language concerning child-support payments:

Any decree, judgment, or order which contains a provision for the payment of money for the support and care of any child or children through the registry of the court shall be final judgment as to any installment or payment of money which has accrued until the time either party moves through proper motion filed with the court and served on the other party to set aside, alter, or modify the decree, judgment, or order.

1987 Ark. Acts 1057 (codified at Ark. Code Ann. § 9-12-314(b); readopted in 1989 at § 9-14-234(a)) (emphasis added). This Act was adopted to ensure that child-support programs of the State of Arkansas would qualify for future federal funding. Sullivan v. Edens, 304 Ark. 133, 137, 801 S.W.2d 32, 34 (1990). We note, however, that there was no expression of any legislative intent to contemporaneously revive the ancient, general ten-year provision that appellant urges us to adopt now.

The legislature then enacted “AN ACT to Set a Ten-Year Statute of Limitations on Collection of Child Support Arrearages; and for Other Purposes.” 1989 Ark. Acts 525, repealed by 1991 Ark. Acts 870 and 1995 Ark. Acts 1184, § 30. The legislature had never before specifically provided a limitation on child-support actions, and Act 525 provided the foEowing, in pertinent part:

In aE cases where the support of any chüd or children is involved, an action for the enforcement of chüd support or for judgment of arrearages shall be limited to ten (10) years prior to the filing of the action.

Id. § 1 (codified at Ark. Code Ann. §§ 9-56-129 and 9-14-236). This Act would have been redundant if the 1987 statute had revived the effectiveness of the ten-year general statute of limitations under Ark. Code Ann. section 16-56-114.

In Sullivan v. Edens, we stated that although the legislature had clearly extended the statute of limitations to ten years prospectively, the Act did not operate retroactively to extend the five-year limit on actions that were already barred because it did not repeal the former statute of Emitations provision. Sullivan, 304 Ark. at 135, 801 S.W.2d at 33. Of course, if the 1844 limitation had been revived, there would have been no issue of retroactive effect. Because of the issue of retroactivity, we held that the general five-year statute of limitations at Ark. Code Ann. section 16-56-115 was applicable to causes that had already accrued as of the date that the new statute was enacted. Id.

After Sullivan, the legislature enacted provisions repealing the ten-year statute of limitations and providing that chEd support actions can be “brought at any time up to and including five (5) years beyond the date the chüd for whose benefit the initial support order was entered reaches the age of eighteen (18) years.” 1991 Ark. Acts 870, §§ 1 and 2 (current version at Ark. Code Ann. §§ 9-14-105 and 9-14-236). Furthermore, the Act repealed aE laws in conflict with its provisions and included a clause for the changes to apply retroactively to aE chüd-support orders existing as of March 29, 1991. Id. §§ 1, 2, and 5. This expanded statute of limitations remains in effect.

It is clear to us that the legislative intent was not to revive the ten-year limitation under the 1844 general limitation statute. The rules of statutory construction give a result that is harmonious with this legislative history. The following rule of statutory construction is instructive on this point:

When two or more statutes of limitation deal with the same subject matter, the statute which is more recent and specific will prevail over the older and more general one. In fact it has been held that where two constructions concerning the limitation period are possible, the courts prefer the one that allows the longer period.

3A Norman J. Singer, Sutherland Stat. Const. § 70.03 (5th ed. 1992) (emphasis added).

By specifically repealing the ten-year statute of limitations that was previously enacted under Act 525 of 1989, the legislature made clear its intention that a ten-year statute of limitations should not apply to actions for child-support arrearages. The effect of the legislature’s action in adopting Act 870 of 1991 was to expand the time in which a cause of action could be maintained, thereby affording a greater opportunity for a parent or child to collect child-support payments than the ten-year statute that it repealed. Branch, 326 Ark. at 752, 933 S.W.2d at 808. We hold that the limitation period found at Ark. Code Ann. section 9-14-236 applies to the action before the court.

Appellant also contended before the trial court that her use of the 1844 general ten-year statute of limitations to collect payments eleven months after Brian turned twenty-three tolled the ten-year statute of limitations with respect to all other arrearages. Because we have determined that the ten-year statute, section 16-56-114, does not apply to actions for child-support arrearages, we do not reach this argument.

We conclude that the Chancellor applied the correct statute of limitations and that because appellant brought this cause of action after her child turned twenty-three, the decision of the chancery court was not in error.

Affirmed.


author: Per Curiam.

text:
    Albert Curtis HUTCHINS v. Karen Ruth HUTCHINS
    CA 97-429
    954 S.W.2d 249
    Supreme Court of Arkansas
    Opinion delivered October 30, 1997

      Laurie A. Bridewell, for appellant.

      Karen Ruth Hutchins, pro se.
   Per Curiam.

This appeal was filed in the Arkansas Court of Appeals. The appellee, Karen Ruth Hutchins, moved to dismiss the appeal on the ground that there was no final, appealable order. The appellant, Albert Curtis Hutchins, responded to the effect that the orders being appealed are contempt orders which are final. In his response, Mr. Hutchins stated that he had filed a federal bankruptcy petition and that Ms. Hutchins had petitioned the federal Bankruptcy Court for relief from the automatic stay of proceedings required by 11 U.S.C. § 362(a)(1). Ms. Hutchins’s petition for relief from the stay was pending when the response to this motion was filed. Mr. Hutchins also asked for additional time to file his abstract and brief. The Court of Appeals certified the motion to this Court because this Court has not determined the effect of the “automatic stay” provision of 11 U.S.C. § 362(a)(1) upon contempt proceedings. We hold that the contempt orders are final and appealable. Some of them are merely coercive and thus civil in nature. Those orders are stayed by the federal law. One of the orders is a criminal contempt citation. It is not stayed by the federal bankruptcy law. Further consideration of the case will remain with the Court of Appeals.

Mr. Hutchins was held in “willful contempt” on a number of grounds having to do with his failure to comply with previous court orders concerning custody of the Hutchinses’ son, Joseph. The sanctions imposed were, however, in all but one instance prospective and coercive in nature. Those were civil contempt citations which were entered for the purpose of compelling obedience to orders and decrees made for the benefit of the parties. Bates v. McNeil, 318 Ark. 764, 888 S.W.2d 642 (1994); Fitzhugh v. State, 296 Ark. 137, 752 S.W.2d 275 (1988).

One of the Chancery Court’s orders was, however, a criminal contempt order. It fined Mr. Hutchins $50 outright for having written on the child’s underwear a message to Ms. Hutch-ins having to do with his allegation that Ms. Hutchins had sexually abused the child. That obviously final order was entered to punish Mr. Hutchins for disobedience to its previous order not to do or say anything that would lead the child to believe he was unsafe in the custody of either parent. As it was punitive in nature, that order was a criminal contempt citation. Fitzhugh v. State, supra.

All actions with respect to the civil contempt orders are stayed in the Chancery Court and in the Court of Appeals until such time as the automatic stay provided for in 11 U.S.C. § 362(a)(1) has been lifted by the Bankruptcy Court. The criminal contempt order is not stayed. See In re Allison, 182 B.R. 881 (N.D. Ala. 1995); In re Kearns, 168 B.R. 423 (D. Kan. 1994); Stovall v. Stovall, 126 B.R. 814 (N.D. Ga. 1990); In re Roussin, 97 B.R. 130 (D.N.H. 1989).