author: David Newbern, Justice. Robert L. Brown, Per Curiam.

text:
    OMEGA TUBE & CONDUIT CORPORATION v. Ed MAPLES, Pulaski County Tax Collector, and B.A. McIntosh, Pulaski County Assessor
    92-669
    850 S.W.2d 317
    Supreme Court of Arkansas
    Opinion delivered April 5, 1993
    [Supplemental Opinion on Denial of Rehearing May 17, 1993.]

      Art Givens and Davidson, Horne & Hollingsworth, by: Cyril Hollingsworth, Michael O. Parker and Chet Roberts, for appellant.

      Larry D. Vaught, Pulaski County Att’y, for appellees.

      Hays and Brown, JJ., would grant rehearing.

   David Newbern, Justice.

This tax case involves a dispute between the appellant, Omega Tube and Conduit Corporation (Omega), and the Pulaski County Assessor and Collector, appellees (the County). The question is whether raw materials used to produce products to be shipped outside this State attain a “situs” here and thus are subject to personal property taxation. The Trial Court held that the controlling Statute, Ark. Code Ann. § 26-26-1102 (1987), is unambiguous and requires the tax to be levied. In response to Omega’s request for a declaratory judgment as to the meaning of the Statute, we hold it is ambiguous and that the General Assembly did not intend to tax the raw materials in question; however, in response to Omega’s request for refund, Omega may not recover taxes it has paid voluntarily. The Trial Court’s decision is thus reversed and remanded.

Omega paid personal property taxes for 1986, 1987, and 1988 on raw materials imported for use in manufacturing goods to be shipped out of Arkansas. In 1989 Omega sought a refund from the Pulaski County Board of Equalization for $94,583.01, the taxes paid in those prior years. The Board denied the refund. Omega ultimately appealed unsuccessfully to the Circuit Court, seeking not only the refund but a declaration of the meaning of the Statute for its benefit and the benefit of other taxpayers similarly situated.

Omega contends the Trial Court erred by (1) holding § 26-26-1102 clear and unambiguous, (2) not considering all the subsections of the Statute, (3) holding contrary to public policy, and (4) concluding that Pulaski County is not estopped to apply § 26-26-1102 in this manner due to assurances given Omega when it located in Arkansas that the raw materials would not be taxed. As we reverse on the first point, we need not address the others.

In 1985, Omega Tube & Conduit built a manufacturing plant in Pulaski County. Omega receives steel coils from outside Arkansas from which it manufactures steel tubing, conduit, fence posts, automobile parts, and related goods. Over 90% of the finished products are then shipped outside the State. Dave Harrington, Director of the Arkansas Industrial Development Commission (AIDC), told Omega officials that Arkansas had a “freeport” statute, which exempts raw materials used in the production of finished goods sold outside Arkansas from ad valorem personal property taxes. Omega officials testified that assurance was a major consideration in its decision to locate in Arkansas.

Pulaski County assessed Omega’s raw material inventory as personal property and collected ad valorem personal property taxes on the raw material for 1986, 1987, and 1988. In 1989, Omega’s Controller questioned the levy.

1. The statute

Omega questions the Trial Court’s holding that § 26-26-1102 is not ambiguous. The Statute, enacted as Act 269 of 1969, is commonly referred to as the “freeport” or “no situs” law. It provides:

Place of assessment.
(a) All real estate and tangible personal property shall be assessed for taxation in the taxing district in which the property is located and kept for use.
(b)(1)(A) Tangible personal property in transit for a destination within this state shall be assessed only in the taxing district of its destination.
(B) Tangible personal property in transit through this state and tangible personal property manufactured, processed, or refined in this state and stored for shipment outside the state shall, for purposes of ad valorem taxation, acquire no situs in this state and shall not be assessed for taxation in this state.
(C) The owner of tangible personal property in transit through this state and of tangible personal property in transit for a destination within this state may be required, by the appropriate assessor, to submit documentary proof of the in-transit character and the destination of the property.
(2) “Tangible personal property in transit through this state” means, for the purpose of this section, tangible personal property:
(A) Which is moving in interstate commerce through or over the territory of this state; or
(B) Which is consigned to or stored in or on a warehouse, dock, or wharf, public or private, within this state for storage in transit to a destination outside this state, whether the destination is specified when transportation begins or afterward, except where the consignment or storage is for purposes other than those incidental to transportation of the property; or
(C) Which is manufactured, processed, or refined within this state and which is in transit and consigned to, or stored in or on, a warehouse, dock, or wharf, public or private, within this state for shipment to a destination outside this state.

The subsection at the center of this dispute is (b)(1)(B). Omega reads the subsection to mean that tangible personal property manufactured, processed, or refined in this State and stored for shipment outside Arkansas acquires no situs in Arkansas during the processing. The County and the Trial Court read the subsection to mean that only the final product being stored has no situs here but raw materials awaiting manufacture acquire an Arkansas situs.

2. Ambiguity

When the language of a statute is plain and unambiguous, we give the language its plain and ordinary meaning. City of Fort Smith v. Tate, 311 Ark. 405, 844 S.W.2d 356 (1992); McGee v. Amorel Pub. Schools, 309 Ark. 59, 827 S.W.2d 137 (1992); Bishop v. Linkway Stores, Inc., 280 Ark. 106, 655 S.W.2d 426 (1983). If a statute is clear and unambiguous, the primary concern is with what the document says and not what its drafters may have intended. Mourot v. Arkansas Board of Dispensing Opticians, 285 Ark. 128, 685 S.W.2d 502 (1985).

When a statute is ambiguous, however, effect must be given to the legislative intent. McGee v. Amorel Pub. Schools, supra; Graham v. Forrest City Housing Auth., 304 Ark. 632, 803 S.W.2d 923 (1991). To determine the intent of the legislature we must look at the whole act. First State Bank v. Arkansas State Banking Bd., 305 Ark. 220, 806 S.W.2d 624 (1991); Cozad v. State, 303 Ark. 137, 792 S.W.2d 606 (1990). As far as practicable, we must give effect to every part, reconciling provisions to make them consistent, harmonious, and sensible. McGee v. Amorel Pub. Schools, supra; Shinn v. Heath, 259 Ark. 577, 535 S.W.2d 57 (1976).

Marvin Russell, the Director of the State Assessment Coordination Division (ACD) from 1976 to 1988, interpreted § 26-26-1102 as exempting raw material that is received, manufactured, and shipped out-of-state. Larry Crane, the current Director of ACD testified that he interprets the Statute to mean the exemption only applies to the finished product awaiting shipment out and not to raw materials in storage awaiting manufacturing.

Steve Sutterfield, ACD supervisor of personal property research and development, testified he had conducted research with respect to the application of § 26-26-1102. He stated “there was a determination that there was not a consistent application of this statute and the different assessors read it different ways.”

Two County Assessors testified as to their application of § 26-26-1102. Larry Fratesi, Jefferson County Assessor for 21 years testified he did not tax raw materials during the production phase when the finished product is destined for shipment out of Arkansas. He said a company in Jefferson County brings pipe in, galvanizes it, and then ships it outside the state. Fratesi testified that he does not tax the pipe brought in, during processing, or as a finished product. Jim Tompkins, Mississippi County Assessor, testified that during his 18 years as an assessor he did assess the raw materials and work in process; however, he did not tax the finished product to be shipped out of state. The Trial Court was thus presented with considerable evidence that the meaning of the Statute was not, at least to others charged with its interpretation, clear on its face. Thus it seems persons hired or elected to interpret and apply the Statute are not clear as to its meaning.

The Trial Court relied upon Eoff v. Kennefick-Hammond Co., 80 Ark. 138 (1906), to hold that tangible personal property in transit attains a situs here for taxation when its trip is broken and the property is located in Arkansas for purposes other than those incidental to transportation. The issue in the Eoff case was whether property brought into Arkansas by a nonresident and used here to prepare a roadbed acquired a situs here for tax purposes. It did not involve a statutory exemption but turned on whether the State had the legislative authority to impose a tax.

The Eoff case is but one of many in which we have dealt with the power of the State to tax in the face of the Commerce Clause. In the latest of those cases, Pledger v. Arkla, Inc., 309 Ark. 10, 827 S.W.2d 126 (1992), we discussed the Supreme Court’s test established in Complete Auto Transit v. Brady, 430 U.S. 274 (1977), which is much more detailed than the one we used in 1906.

If the issue here were whether Arkansas is constitutionally empowered to impose a tax on the raw materials, the later cases discussing the basic issue confronted in the Eoff decision might be significant, but that is not so. While one aspect of § 26-26-1102 asserts the State’s power to tax within the confines of the Constitution, the aspect with which we are concerned here is that which has to do with exemption. Are the steel coils “moving in interstate commerce through or over the territory of this State” and thus within the definition of “in transit” provided in subsection (2) (a) of the Statute? Certainly the steel must stop long enough to be manufactured into a finished product, but does that keep it from being considered as “moving in interstate commerce?”

In interpreting a statute and determining the legislative intent, this Court looks to the language, subject matter, object to be accomplished, purpose to be served, remedy provided, legislative history, and other appropriate matters. City of Fort Smith v. Tate, supra. We must give effect to the intent of the General Assembly.

3. Administrative interpretation

It is also a familiar rule of statutory construction that the manner in which a law has been interpreted by executive and administrative officers is to be given consideration and will not be disregarded unless it is clearly wrong. Morris v. Torch Club, Inc., 278 Ark. 285, 645 S.W.2d 938 (1983); Walnut Grove Sch. Dist. No. 6 v. County Bd. of Education, 204 Ark. 354, 162 S.W.2d 64 (1942). An administrative interpretation is to be regarded as highly persuasive. Bramley School Dist. No. 35 v. Right, 206 Ark. 87, 173 S.W.2d 125 (1943). In Walnut Grove Sch. Dist. No. 6 v. County Bd. of Education, supra, we quoted with approval from Crawford’s Digest:

As a general rule executive and administrative officers will be called upon to interpret certain statutes long before the courts may have an occasion to construe them. Inasmuch as the interpretation of statutes is a judicial function, naturally the construction placed upon a statute by an executive or administrative official will not be binding upon the court. Yet where a certain contemporaneous construction has been placed upon an ambiguous statute by the executive or administrative officers, who are charged with executing the statute, and especially if such construction has been observed and acted upon for a long period of time, and generally or uniformly acquiesced in, it will not be disregarded by the courts, except for the most satisfactory, cogent or impelling reasons. In other words, the administrative construction generally should be clearly wrong before it is overturned. Such a construction, commonly referred to as practical construction, although not controlling, is nevertheless entitled to considerable weight. It is highly persuasive.

John O’Nale, the Director of ACD prior to Russell, wrote a letter to a Pennsylvania Company in 1974, in which he commented on § 26-26-1102:

Goods moving in interstate commerce may be assembled, bounded, joined, processed, dismantled, divided, cut, broke in bulk, relabeled, or repackaged, yet still be entitled to exemption from ad valorem taxation. There is no time limit on how long such goods may be stored.
The only requirement for exemption is the goods must be destined for out-of-state.

Mr. Russell, the ACD Director from 1976 to 1988, interpreted the Statute and instructed assessors around the state that raw materials being processed into a product which will be shipped out of the state do not attain a situs for personal property taxation purposes.. Mr. Harrington, as Director of AIDC and in charge of “marketing” Arkansas to attract companies to locate in Arkansas, interpreted the Statute to mean raw materials will not be taxed so long as they are processed and shipped outside the state. AIDC has published informational brochures stating, in effect, this interpretation of § 26-26-1102.

The General Assembly enacted Act 269 obviously having in mind the purpose of making Arkansas competitive in attracting new manufacturing companies to locate in this State. The Emergency Clause stated in relevant part:

It is hereby determined by the General Assembly that prospective manufacturing and processing industries and commercial warehouses are confused as to ad valorem taxation of personal property in transit through Arkansas, and that because of this confusion the decision to locate industries therein may be adversely influenced to the extent that the State may lose valuable new industries. Therefore, an emergency is hereby declared to exist,....

The Emergency Clause indicates the General Assembly wanted to clarify the status of ad valorem taxes on personal property in transit through Arkansas in a manner so as to encourage decisions to locate industries in this State. It is very doubtful to us that the General Assembly intended to entice manufacturers to Arkansas by exempting from taxation property destined for other states only when it achieved the manufactured form. We can think of no reason why material should be taxable by virtue of its presence here in one form but not in another when the purpose is to exempt things which will be sold or otherwise disposed of outside Arkansas.

We recognize, and have recited the evidence above, that various county officials have given various interpretations of the law in question. However, we recognize that the state officials given overarching responsibility for interpretation as heads of the ACD interpreted the law as exempting the raw materials from as early as 1974 until 1988. That long period of interpretation favoring the exemption at the state level is persuasive. It is clear that before 1988 the ACD was interpreting the Statute in accordance with its perceived purpose as did the AIDC.

Given the ambiguity of the Statute, our understanding of the intent of the General Assembly, and the interpretation and application given to § 26-26-1102 by officials, we hold § 26-26-1102 exempts from ad valorem taxation raw materials shipped to Arkansas for inclusion in tangible personal property manufactured, processed, or refined here for shipment outside the state.

4. Voluntarily paid taxes

Omega paid the 1986, 1987, and 1988 taxes voluntarily, and thus it is not entitled to have them refunded. Rutherford v. Barnes, 312 Ark. 177, 847 S.W.2d 689 (1993); City of Little Rock v. Cash, 277 Ark. 494, 644 S.W.2d 229 (1982); cert. denied 462 U.S. 1111 (1983); Thompson v. Continental Southern Lines, Inc., 222 Ark. 108, 257 S.W.2d 375 (1953).

Reversed and remanded.

Hays and Brown, JJ., dissent.

Robert L. Brown,

Justice, dissenting. I cannot subscribe to the view of the majority that the dispositive statute — Ark. Code Ann. § 26-26-1102 (Repl. 1992) — is ambiguous. Accordingly, I would affirm the trial court. The pertinent sections of the statute are these:

(B) Tangible personal property in transit through this state and tangible personal property manufactured, processed, or refined in this state and stored for shipment outside the state shall, for purposes of ad valorem taxation, acquire no situs in this state and shall not be assessed for taxation in this state.
(2) “Tangible personal property in transit through this state” means, for the purpose of this section, tangible personal property:
(C) Which is manufactured, processed, or refined within this state and which is in transit and consigned to, or stored in or on, a warehouse, dock, or wharf, public or private, within this state for shipment to a destination outside this state.

Ark. Code Ann. § 26-26-1102 (b)(1)(B), (b)(2)(C) (Repl. 1992). (Emphasis added.)

Only goods that are 1) manufactured for shipment in this state, and 2) stored for shipment out of state are exempt from assessment. Clearly, these criteria do not include raw material — coiled steel, in the case before us — which is shipped into this state for the purpose of eventual manufacture. ■

The reason raw material is not exempt is obvious. It may never find its way into goods that are manufactured. Or if it does, the goods may not be shipped out of state but instead may be sold in Arkansas. Also, the raw material could be sold off for some other business venture and avoid the manufacturing process altogether.

That is why it makes eminent sense to exempt only raw material that has actually been manufactured and is actually stored, awaiting shipment out of state. That way Pulaski County is assured that the goods have not established a situs in Arkansas but are on their way out of state. Otherwise, the eventual fate of the steel coil in its unprocessed state is speculative at best.

What also militates in favor of the statute’s clarity is the fact that Omega Tube followed it for two years — 1986 and 1987 — and did not contest assessment of its steel coil until 1988. Voluntary assessment is certainly some indication that the company did not believe its raw material was exempt. Yet in this appeal, Omega Tube contends that it came to Arkansas on assurances that its steel coil would be exempt from property taxes and was misled. If that is so, why did the company voluntarily pay the tax on raw material for two years after locating here?

Omega Tube argues that the practices of county assessors vary with regard to assessing raw materials. No doubt. But that does not translate into ambiguity. Nor does the testimony of individuals involved in promoting business development in Arkansas who may have intended a different result from that actually memorialized by statute. I go back to the words of the statute itself, and the words could not be clearer. The General Assembly is presumed to have intended what it states, and here it did so with clarity and precision. See Roy v. Farmers & Merchants Ins. Co., 307 Ark. 213, 819 S.W.2d 2 (1991).There is nothing that remotely suggests that raw materials are exempt. Only after the material has been processed into product and awaits shipment out of state does it receive the favorable tax treatment. I would affirm the trial court.

Hays, J., joins.

MAY 17, 1993

No response.

Larry Vaught, Pulaski County Att’y, for appellees.

SUPPLEMENTAL OPINION ON DENIAL OF REHEARING

Per Curiam.

Pulaski County argues our opinion is contrary to Ark. Const, art. 16, §§ 5 and 6. The County, again citing Eoff v. Kennefick-Hammond Co., 80 Ark. 138 (1906), says we misused the terms “exempt” and “exemption” as only certain property listed in the Constitution may be “exempted” from taxation.

In the Eoff case, in addition to the Commerce Clause issue, we interpreted a statute now codified as Ark. Code Ann. § 26-3-201 (Repl. 1992) which, in relevant part, provides, “All property, whether real or personal, in this state; . . . shall be subject to taxation.” We held property brought to Arkansas to use in construction of a railroad was not in transit but acquired a tax situs here. We did not have before us Act 269 of 1969 [Ark. Code Ann. § 26-26-1102 (Repl. 1992)].

It was not our intention to declare the property in question “exempt” in the constitutional sense; rather, according to § 26-26-1102, it does not attain a tax situs in Arkansas.

Rehearing denied.

Hays and Brown, JJ., would grant rehearing.


source: Caselaw Access Project

author: Tom Glaze, Justice.

license: Public Domain

text:
    B.A.R. ENTERPRISES, INC. and R.A.P. Sales, Inc. v. PALIN MANUFACTURING COMPANY, Inc.
    92-700
    850 S.W.2d 322
    Supreme Court of Arkansas
    Opinion delivered April 5, 1993

      Williams H. McKimm, for appellants.

      Evans, Farrar, Reis & Associates by: Bryan J. Reis, for appellee.
   Tom Glaze, Justice.

Appellants, B.A.R. Enterprises, Inc. and R.A.P. Sales, Inc., bring this appeal from a default judgment entered in behalf of appellee, Palin Manufacturing, Inc. Palin is an Arkansas company which manufactures and sells sludge consolidation filters, and these filters were comprised of goods Palin purchased from B.A.R.’, another domestic company. Sometime in February of 1986, R.A.P., a Wisconsin company, agreed to market Palin’s filters. R. A. Phipps, who has an interest in B.A.R. and R.A.P., was to use his best efforts on R.A.P.’s behalf and in furtherance of its agreement with Palin.

The parties performed their agreement until September of 1988, when Phipps went to work for Texo Corporation, which was both a customer of Palin’s but was also a competitor of other customers of Palin. Palin then initiated this suit, alleging R.A.P. could no longer perform under the parties’ agreement because of Phipps’ employment with Texo. Among other things, Palin sought to prohibit the wrongful use of Palin’s customer lists and to enforce noncompetition restrictions to which the parties had agreed. Palin also sought damages from R.A.P. for certain “start-up” monies that Palin incurred and asked the court to determine any indebtedness existing between Palin and B.A.R.

Apparently, the parties’ counsel made some attempt to resolve their differences immediately after Palin filed suit, but those negotiations quickly faded. James Ward, a Wisconsin attorney representing both R.A.P. and B.A.R., asked Palin’s attorney to agree to extend the time to answer Palin’s complaint, but when Palin’s counsel said that he would check with his client, Ward responded saying he would answer immediately. Ward prepared an answer which was filed timely on R.A.P.’s behalf, but his answer for B.A.R. was one day late.

Palin moved to strike B.A.R.’s answer as untimely and requested both answers be struck because Ward was not licensed to practice law in Arkansas and Ward had not complied with the state’s “Practice by Comity” requirements found in Rule XIV. Ward opposed Palin’s motion merely by filing an affidavit that related (1) his prior talks with Palin’s counsel, (2) his decision to file answers for R.A.P. and B.A.R. immediately after negotiations failed, (3) when he mailed the respective answers and (4) his willingness to secure local counsel and to comply with Rule XIV.

Nothing further occurred in this lawsuit until two years later when the trial court granted Palin’s motion to strike R.A.P.’s and B.A.R.’s answers. The court then entered a default judgment finding R.A.P. owed Palin $11,308.80 in damages, declaring the non competition and customer list issues as moot and further holding all remaining disputes between the parties had been adjudicated. R.A.P. and B.A.R. filed no motion to set aside the default judgment under ARCP 55(c), but merely filed a notice of appeal instead.

In this appeal, R.A.P. and B.A.R. generally argue the trial court’s enforcement of the Rule XIV requirements is too harsh and that the goals and policies of ARCP 55 would be furthered by remanding this cause for trial on the merits. In this connection, they claim a meritorious defense exists and that hiring of out-of-state counsel in these circumstances constituted excusable neglect. Finally, B.A.R. argues R.A.P.’s timely answer should inure to B.A.R.’s benefit because both the defendants had a timely common answer. None of these arguments were raised below, and as Palin points out, this court has repeatedly held that it will not countenance arguments raised for the first time on appeal. Lytle v. Wal-Mart, 309 Ark. 139, 827 S.W.2d 652 (1992). Because R.A.P. and B.A.R. failed to present these issues below, we affirm.


author: Robert L. Brown, Justice.

text:
    James M. SHEPHERD, Administrator of the Estate of Donna L. Shepherd; Jerry Kent Snow, Administrator of the Estate of Rena Kay Snow; Williams James Kennedy, Administrator of the Estate of Cheryl Lynn Holcombe; and Kelli Shawn Wheeler and Darrell Wheeler v. STATE AUTO PROPERTY AND CASUALTY INSURANCE COMPANY
    92-411
    850 S.W.2d 324
    Supreme Court of Arkansas
    Opinion delivered April 5, 1993

      Ronald W. Metcalf, for appellants Shepherd and Wheeler.

      Phillip K. Kinsey, for appellant Cheryl Lynn Holcombe.

      Gean, Gean & Gean, by: Thomas C. Gean, for appellant Rena Kay Snow.

      Hardin, Jesson, Dawson & Terry, by: Robert T. Dawson and J. Rodney Mills, for appellee.
   Robert L. Brown, Justice.

This appeal arises out of an automobile accident in which the drivers of both vehicles, Cheryl Holcombe and Terry Arthur Van-Beber, died. Two passengers in Holcombe’s vehicle, Donna Shepherd and Kay Snow, were also killed and a third passenger, Kelli Shawn Wheeler, was permanently injured. The appeal and cross appeal center upon the appropriate amount of underinsured benefits to be paid by the appellee, State Auto Property and Casualty Insurance Company, to the appellants. Issues are also raised concerning the propriety of a 12 percent penalty assessed against State Auto and what are proper attorneys’ fees and prejudgment interest under these circumstances.

On May 17, 1989, Van-Beber was operating his car, while intoxicated, in the wrong direction on Interstate 40 in Pope County. His vehicle collided with the car owned and operated by Cheryl Lynn Holcombe with her three passengers. All four women were employed by Arkansas Best Corporation and were in the course of their employment at the time of the accident. VanBeber’s car was insured for $50,000 bodily-injury liability coverage. Holcombe’s vehicle carried underinsurance coverage through the appellee, State Auto, with policy limits of $300,000.

The appellants, who are the personal representatives of the deceased women’s estates and Kelli Sharon Wheeler and her husband, Darrell Wheeler, pursued litigation against VanBeber’s estate, alleging negligence. The Wheelers and the estates of Shepherd and Snow eventually also cross-claimed against the estate of Cheryl Lynn Holcombe after a State Police accident reconstruction report was released indicating that the Holcombe vehicle was traveling in excess of 77 miles per hour at the point of impact. Because damages of the victims exceeded Van-Beber’s resources, the appellants made demand on State Auto on July 31, 1989, for the $300,000 underinsurance policy limits on the Holcombe vehicle without regard to any offsets. The demand was refused.

From July 1 through July 3, 1991, a trial was held on the negligence issues, and the jury assessed 100 percent negligence against Van-Beber and no negligence against Holcombe. A verdict was rendered in favor of the appellants against Van-Beber in the amount of $1,216,168.85.

Later, on November 13, 1991, a hearing was held on stipulated facts on the matter of State Auto’s underinsurance, with the principal issue being whether State Auto was entitled to offset workers’ compensation benefits and the liability proceeds in the amount of $50,000 paid by Van-Beber’s carrier. Arkansas Best Corporation, as the employer of the four victims in the Holcombe vehicle, had paid the following workers’ compensation benefits to the victims as of October 21, 1991: Wheeler — $78,131; Shepherd — $44,566; Snow — $29,344; Holcombe — $29,494. The amounts totaled $181,535.

The trial court announced its decision and judgment was subsequently entered on December 12, 1991, in favor of the appellants and against State Auto in the amount of $250,000, with the trial court finding that the carrier was entitled to offset the $50,000 Van-Beber liability policy against its $300,000 policy limits. The trial court also found that Arkansas Best was entitled to a two-thirds workers’ compensation lien on the $50,000 Van-Beber benefits after deducting trial expenses of $9,200 and a one-third attorneys’ fee to be divided among the appellants’ attorneys. The court refused, however, to permit State Auto to offset the amount of workers’ compensation payments.

Included in the judgment were attorneys’ fees of $30,000, to be divided among the appellants’ three attorneys as follows: $20,000 to Ronald Metcalf, counsel for Shepherd and Wheeler; $5,000 to Roy Gean, Jr., counsel for Snow; and $5,000 to Phillip Kinsey, counsel for Holcombe. Prejudgment interest was calculated at six percent on the $250,000 from July 31, 1989, to December 12, 1991, and ten percent thereafter. The trial court held that the 12 percent penalty provision for failure to pay insurance benefits upon demand under Ark. Code Ann. § 23-79-209 (Repl. 1992) did not apply because the offset of certain collateral benefits against underinsured benefits was a matter of first impression in this state.

The judgment was entered on December 12, 1991. State Auto voluntarily paid the judgment amounts against it totalling $317,183.34 on January 2, 1991, and the trial court entered an Order of Disbursement, which included an order that the judgment against State Auto was satisfied and discharged in full. The Order of Disbursement was signed and entered, the appellants claim, without notice to them. Subsequently, the appellants and their attorneys individually endorsed and cashed the checks made out to them on various dates within the month of January 1992.

On January 10, 1992, the appellants filed a joint notice of appeal and designation of record and asserted in their Statement of Points the following:

The Circuit Judge erred as a matter of law by finding that State Auto can offset their $300,000 underinsurance policy limits by the amount of $50,000 automobile liability coverage of Terry Arthur Van-Beber.
The Circuit Judge erred as a matter of law by finding that State Auto is not liable for a 12% penalty on the principal sum of $300,000.
The Circuit Judge erred as a matter of law by making an inadequate award of attorneys’ fees to Appellants.
The Circuit Judge erred as a matter of law by failing to assess prejudgment interest on the principal sum of $300,000 instead of $250,000.

State Auto filed a notice of cross-appeal on January 21, 1992, asserting in its Statement of Points that the trial court erred in not offsetting workers’ compensation payments and, further, that the appellants had waived the right to appeal because they accepted payments on the judgment from State Auto.

On April 15, 1992, the appellants filed their motion to dismiss the cross appeal of State Auto due to voluntary payment of the judgment amounts. According to an affidavit by appellants’ counsel attached to the motion, payment of $317,183.34 by State Auto representing payment of $250,000 in underinsurance benefits, attorneys’ fees and prejudgment interest was made without prior notice to appellants and without a request from them. In the same affidavit, the appellants’ counsel attest that the Order of Disbursement, satisfying the judgment in full, was entered without notice to them or their agreement. The affidavit also contains an averment that State Auto’s counsel advised the affiants that the reason for the Order of Disbursement was to stop the accumulation of the ten percent postjudgment interest.

On April 27, 1992, State Auto moved to dismiss the appellants’ appeal due to their receipt of the $317,183.34 paid into court in satisfaction of the judgment.

I. STATE AUTO’S MOTION TO DISMISS THE APPELLANTS’ APPEAL

State Auto’s motion to dismiss the appellants’ appeal is premised on the theory that a party cannot accept benefits from a judgment and at the same time contest that judgment. The appellants retort that their acceptance of the judgment payment was not inconsistent with the points they now specifically raise on appeal, to wit, the $50,000 offset for Van-Beber’s liability coverage was error, a 12 percent penalty should have been assessed, and the attorneys’ fees and prejudgment interest awarded were inadequate and constituted an abuse of discretion.

The governing law on this issue was handed down early on, and both sides cite it in part:

Again, a party may prosecute his appeal from a judgment, partly in his favor and partly against him, even after accepting the benefit awarded him by the judgment, provided the record discloses that what he recovers is his in any event — that is, whether the judgment be reversed or affirmed. But he waives his right to an appeal by accepting a benefit which is inconsistent with the claim of right he seeks to establish by the appeal. “A party cannot ratify and yet repudiate the same transaction in one breath. He must make his election at the outset to repudiate it in toto or take it cum onere, and, when once made and acted upon, he is estopped from assuming an attitude inconsistent with his first position and detrimental to the rights of others.”

Bolen v. Cumby, 53 Ark. 514, 515 (1890). That basic proposition has been quoted with approbation by this court in later cases. See, e.g., Arkansas State Hy. Comm’n v. Marlar, 236 Ark. 385, 366 S.W.2d 191 (1963); Anderson v. Anderson, 223 Ark. 571, 267 S.W.2d 316 (1954); Jones v. Rogers, 222 Ark. 523, 261 S.W.2d 649 (1953); McCown v. Nicks, 171 Ark. 260, 248 S.W.2d 739 (1926).

This issue, therefore, turns on whether the appellants’ appeal is inconsistent with their acceptance of the judgment amounts. We think not. The judgment awards that were accepted were the appellants in any event. In contrast, their claims on appeal expressly go to additional awards related to the liability policy offset, penalties, attorneys’ fees, and interest as set forth in their Statement of Points. We are mindful that the Order of Disbursement states that the judgment is satisfied in full and that State Auto is discharged from liability due to its payment. The appellants, however, were not notified of the Order and aver that they did not agree that the Order satisfied the liability of State Auto in full. To be sure, State Auto paid the judgment amounts ordered by the trial court. But the order does not purport to foreclose the appellants’ right to appeal regarding any additional liability of State Auto.

On this point, it is instructive that the trial court itself contemplated an appeal when it stated with reference to its decision to deny a 12 percent penalty at the November 13, 1991 hearing: “Well, I realize this will be appealed and I assume you’ll find out when it is, how far I’m out of line and then we’ll know.” That statement suggests that the trial court anticipated that an appeal was in the offing.

Under the circumstances, we do not believe that the appellants’ acceptance of State Auto’s judgment payments or the language of the Order of Disbursement prevent an appeal on the separate points raised in this appeal. We deny State Auto’s motion to dismiss.

II. APPELLANTS’ MOTION TO DISMISS CROSS APPEAL OF STATE AUTO

In the wake of the appellants’ notice of appeal filed January 10,1992, State Auto filed its notice of cross appeal on January 21, 1992, and stated as its principal point that the trial court erred in not offsetting workers’ compensation payments against underinsurance benefits. Prefatory to its notice of appeal, State Auto had voluntarily paid into court the judgment amounts awarded against it totalling $317,183.34. It is that voluntary payment of the judgment that the appellants contend negated State Auto’s ability to cross-appeal. We agree.

A 1982 case handed down by the Court of Appeals is persuasive on this issue. See Lytle v. Citizens Bank of Batesville, 4 Ark. App. 294, 630 S.W.2d 546 (1982). In that case, the appellant satisfied a deficiency judgment against him which was owed the bank which arose out of a tractor sale. After paying the judgment, the appellant appealed. The bank contended that the appeal was moot due to the voluntary satisfaction of judgment and the fact that the appellant had not posted a supersedeas bond. The Court of Appeals hinged its decision on the failure to post bond:

We adopt the majority rule as the better reasoned rule. Thus, if appellant’s payment was voluntary, then the case is moot, but if the payment was involuntary, this appeal is not precluded. In applying this rule to the facts at bar, we must determine whether the payment made by appellant was voluntary or involuntary. In doing so, we believe that one of the most important factors to be considered is whether appellant was able to post a supersedeas bond at the time he satisfied the judgment. The record supports the conclusion that he could have done so.

4 Ark. App. at 297, 630 S.W.2d at 547.

Similarly, in the case before us State Auto could have posted a supersedeas bond and elected to appeal on the failure of the trial court to offset workers’ compensation benefits. It elected not to do so, however, but instead paid the full judgment amounts and on that same date, unbeknownst to the appellants, obtained an immediate Order of Disbursement discharging it from liability on the judgment.

We view voluntary payment of a judgment amount assessed against a party as entirely inconsistent with a subsequent appeal directly related to that payment. Should State Auto prevail on its cross appeal, it would be entitled to an offset against the amount already paid for workers’ compensation benefits. That should not be. State Auto willingly paid the total judgment amount, thereby rendering any later contest involving that amount moot.

The appellants’ motion to dismiss State Auto’s cross appeal is granted.

III. OFFSET OF TORTFEASOR’S LIABILITY COVERAGE

The appellants first argue on appeal that the trial court was in error in offsetting Van-Beber’s $50,000 liability proceeds against the underinsured benefit of $300,000. We agree.

This question is resolved by our recent decision in American Casualty Co. v. Mason, 312 Ark. 166, 847 S.W.2d 392 (1993). There, we considered whether the General Assembly intended under Act 335 of 1987, codified as Ark. Code Ann. § 23-89-209 (Supp. 1989), for an insured to receive the limits of underinsured motorist coverage over and above any recovery from the tortfeasor’s carrier if that recovery was not adequate to fully compensate the insured. We concluded that it did.

We noted in Mason that the language of Act 335 was somewhat unclear, but that “the changes made to section 23-89-209(a) by Act 209 of 1991, the title of Act 209, and the emergency clause of Act 209, clearly indicate the legislature intended underinsured motorist benefits under Act 335 of 1987 to be provided without regard to the amount of insurance carried by any liable party.” 312 Ark. at 170, 847 S.W.2d at 394.

Though the accident in the present case occurred prior to the enactment of Act 209 of 1991, as was the case in Mason, the emergency clause in Act 209 amplifies legislative intent relative to passage of the 1987 act:

It is hereby found and determined by the General Assembly that the present underinsured motorist insurance coverage law is being misinterpreted; that under the present misinterpretation persons covered by underinsured motorist coverage may not receive the benefits intended by the law; and that this act clarifies the law and should therefore go into effect immediately in order to resolve the misinterpretation as soon as possible.

The appellants were not paid in full by the tortfeasor’s coverage and the underinsured benefits. The offset of $50,000 against the underinsured benefits was, therefore, error, and the decision of the trial court is reversed on this point. We remand so that judgment against State Auto in the full amount of $300,000 may be entered.

IV. 12 PERCENT PENALTY

The appellants contend that they made demand on State Auto to pay full benefits on July 31, 1989, and that they were entitled to judgment in the amount of $300,000. Because of this, the 12 percent penalty as authorized by Ark. Code Ann. § 23-79-208 (Repl. 1992) should have been assessed. The trial court declined to award the appellants the statutory penalty because it believed the case to be one of first impression in this state and State Auto was, therefore, justified in following the language of its insurance policy which contemplated a workers’ compensation offset. The trial court did, however, award reasonable attorneys’ fees under § 23-79-208.

The allowance of the statutory penalty and attorneys’ fees is penal in nature and a procedural matter. USAA Life Ins. Co. v. Boyce, 294 Ark. 575, 745 S.W.2d 136 (1988). As the language of § 23-79-208(a) states, the penalty is to be added to recovery when an insurer, after demand, fails to pay for an insured loss within the time specified in the policy. Simmons First Nat’l Bank v. Liberty Mutual Ins. Co., 282 Ark. 194, 667 S.W.2d 648 (1984). The punitive nature of the statute is directed against the unwarranted delaying tactics of insurers. Id.

Because the statute is highly penal in nature, it is to be strictly construed. Callum v. Farmers Union Mutual Ins. Co., 256 Ark. 376, 508 S.W.2d 316 (1974). Heretofore, it was necessary for the plaintiff to recover the exact amount claimed in order to collect the penalty and attorneys’ fees. Miller’s Mutual Ins. Co. v. Keith Smith Co., 284 Ark. 124, 680 S.W.2d 102 (1984). With the enactment of Act 349 of 1991, which added a subsection (d) to § 23-79-208, recoveries within twenty percent of the claimed amount entitled the claimant to the 12 percent penalty and attorneys’ fees.

Two offsets against the underinsured benefits were at issue here: $50,000 received from Van-Beber’s liability policy, and $181,535 in paid workers’ compensation benefits. The offset of $50,000 was contrary to the purpose behind the underinsured motorist law, as already discussed.

Secondly, while there may be no Arkansas authority precisely on point with regard to underinsured policies and workers’ compensation benefits, we have held that the amount of recovery under the uninsured motorist provisions of a liability policy could not be reduced by the amount the injured party received under workers’ compensation coverage where the setoff provision reduced the limit of liability under the uninsured motorist coverage. Travelers Ins. Co. v. National Farmers Union Property & Casualty Co., 252 Ark. 624, 480 S.W.2d 585 (1972). Moreover, in O’Bar v. MFA Mutual Ins. Co., 275 Ark. 247, 628 S. W. 2d 5 61 (1982), we held that accidental death benefits should not be reduced because an insured’s beneficiaries also received workers’ compensation payment for the insured’s death and that a clause in a policy denying benefits on such a basis is a violation of public policy.

Underinsured motorist coverage was enacted in this state in 1987 to supplement benefits recovered from a tortfeasor’s liability carrier. Ark. Code Ann. § 23-89-209 (1987). We have stated its purpose to be “to provide compensation to the extent of the injury, subject to the policy limit.” Clampit v. State, 309 Ark. 107, 110, 828 S.W.2d 593, 595 (1992).

Even though a precise case applicable to underinsured policies had not been decided at the time State Auto refused to pay underinsured benefits, we believe that the public policy of the state could be sufficiently extrapolated from analogous cases and from the underinsured motorist statute itself. Even with the knowledge of the State’s clear public policy, State Auto refused to pay though a demand for payment was made on July 31,1989. In the light of these facts, State Auto’s good-faith argument must fail.

Because we hold today that payment of the policy limits of $300,000 was appropriate, State Auto has no argument that the penalty is inapplicable due to an award of less than the amount claimed. We further observe that at the time of trial in November 1991, Act 349 of 1991 was in effect which authorized the penalty and attorneys’ fees when the amount recovered was twenty percent less than the amount claimed. The amount awarded by the trial court — $250,000 — was within twenty percent of the amount claimed by the appellants — $300,000.

We hold that the penalty statute was appropriately invoked, and we remand for an order assessing the 12 percent penalty from date of demand under § 23-79-208.

V. REASONABLE ATTORNEYS’ FEES

The appellants next contend that the attorneys’ fees of $30,000 were not reasonable under § 23-79-208 when divided among three attorneys. We disagree.

There is no fixed formula for a trial court to use in determining the reasonableness of attorneys’ fees. Southall v. Farm Bureau Mutual Ins. Co., 283 Ark. 335, 676 S.W.2d 228 (1984). This court has, however, recognized factors such as the experience and ability of the attorney; the time and work required; the amount involved in the case and the results obtained; the novelty and difficulty of the issues involved; the fee customarily charged in the locality for similar legal services; whether the fee is fixed or contingent; the time limitations imposed upon the client or the circumstances; and the likelihood, if apparent to the client, that the acceptance of the particular case will preclude other employment by the lawyer. Northwestern Nat’l Life Ins. Co. v. Heslip, 309 Ark. 319, 832 S.W.2d 463 (1992).

The trial court is to consider the factors listed above in exercising its discretion. Northwestern Nat’l Life Ins. Co. v. Heslip, supra. Because of the trial court’s intimate acquaintance with the record and the quality of the service rendered, we generally recognize the superior perspective of the trial court in assessing the applicable factors. State Farm Fire & Casualty Co. v. Stockton, 295 Ark. 560, 750 S.W.2d 945 (1988). Accordingly, an award of attorneys’ fees will not be set aside absent an abuse of discretion by the trial court. Id.

The appellants are emphatic and forceful in their argument that the present case involved complex issues and multiple parties. The attorneys computed their own expenses at $7,000 for Metcalf, and $1,100 each for Gean and Kinsey. Metcalf estimated that he had spent 565 hours and 20 minutes on the case at $150 per hour. He requested a fee of $84,800. Gean billed a total of 318 hours at $200 per hour, bringing his fee to $63,600.

In making its award, and apportioning it at $20,000 for Metcalf, $5,000 for Gean, and $5,000 for Kinsey, the trial court noted that attorney Metcalf had “taken the lead” throughout the case. In addition to these amounts, the court awarded costs totalling $9,200 from the $50,000 in liability proceeds and then awarded one-third of the balance as attorneys’ fees as required by Ark. Code Ann. § 11-9-410 (1987): Metcalf— $6,800; Kinsey — $3,400; Gean — $3,400.

In sum, the trial court obviously took into account the respective efforts of the three attorneys for the appellants and the other attorneys’ fees paid. No abuse of discretion is readily apparent. We affirm the trial court on this point.

VI. PREJUDGMENT INTEREST

Because we have decided that the appellants are entitled to $300,000 instead of the $250,000 they were awarded, prejudgment interest must be assessed on the larger sum, dating from July 31, 1989, the date on which demand for payment was made by the appellants to State Auto. The fact that the statutory penalty and attorneys’ fees are also assessed against State Auto does not impede an award of prejudgment interest as well. See USAA Life Ins. Co. v. Boyce, supra; Maryland Casualty Co. v. Maloney, 119 Ark. 434, 178 S.W. 387 (1915).

The appellants assert that they should receive 11.5 percent interest, which was the interest cost to borrow $250,000 from a lending institution in Ft. Smith on July 31, 1989. In the alternative, they argue that they should receive the actual rate of return that they would have received had their money been invested in a 30-year government security on July 31, 1989 — 7.990 percent.

No rate was agreed upon by the parties in this case. Under Ark. Const. Art. 19, § 13, when no rate of interest has been agreed upon by the parties, prejudgment interest is limited to 6 percent. Killam v. Texas Oil & Gas Corp., 303 Ark. 547, 798 S.W.2d 419 (1990); Wooten v. McClendon, 272 Ark. 61, 612 S.W.2d 105 (1981). In Killam, we specifically affirmed six percent as prejudgment interest under the state constitution rather than the market rate, when the parties had not agreed otherwise. The trial court awarded the proper rate of prejudgment interest.

Affirmed in part. Reversed in part and remanded for an order in accordance with this opinion.

Glaze, J. would grant.


author: Per Curiam.

text:
    FIRST PYRAMID LIFE INSURANCE COMPANY OF AMERICA; Usable Insurance v. J. Michael STOLTZ, as Special Administrator of the Estate of J. P. Stoltz, Deceased
    92-4
    849 S.W.2d 525
    Supreme Court of Arkansas
    Opinion delivered April 5, 1993

      Peter G. Kumpe, for appellant.

      Davidson Law Firm, by; Charles Phillips Boyd, Jr., for appellee.
   Per Curiam.

On March 12,1993, appellee filed a motion to supplement the record in this matter, and after the ten days expired for response, the motion was submitted to the court for action on March 22, 1993. Mandate had issued in this case on March 15, 1993.

This court previously considered earlier motions by appellee to suggest disqualification of the court’s members and for a rehearing. Those motions were denied on February 22,1993. On this same date, appellee filed a motion to stay mandate, which was also denied on March 15, 1993 — the date mandate issued.

This court’s jurisdiction in this cause concluded on March 15, 1993. Appellee cites no authority under which the court can act in this cause, and we are aware of none. Because the court has no further jurisdiction, appellee’s motion to supplement the record is denied.

Holt, C.J. and Dudley, J., not participating.


text:
    Irwin GIDRON v. STATE of Arkansas
    CR 92-1388
    850 S.W.2d 331
    Supreme Court of Arkansas
    Opinion delivered April 5, 1993

      Appellant pro se.

      Winston Bryant, Att’y Gen., by: Clint Miller, Senior Asst. Att’y Gen., for appellee.
   Per Curiam.

On March 26,1990, a Judgment was entered in the Circuit Court of Crittenden County reflecting that the appellant Irwin Gidron had been found guilty by a jury of battery in the second degree-and murder in the second degree. He was sentenced to consecutive terms of six and twenty years imprisonment. On February 8, 1993, this court by Per Curiam Order directed Gidron’s court-appointed attorney at trial, Davis Loftin, to appear to show cause why he should not be held in contempt of this court for failure to perfect an appeal in the case. While pleading not guilty to being in contempt of this court for failure to perfect the appeal, Loftin agreed to file the record and the appellant’s brief. The issue of whether a finding of contempt is appropriate under the circumstances was deferred until the case was concluded on its merits. Gidronv. State, CR 92-1388 (March 1, 1993). Gidron has now filed a motion asking that Loftin be relieved as counsel because of his failure to perfect the appeal and further that he be held in contempt and suffer the “most harsh penalty” for placing Gidron under emotional stress. Gidron further requests that this court allow him to file his own arguments. It is not clear whether Gidron is asking to proceed pro se on appeal or asking permission to supplement whatever arguments are raised by counsel in the case.

The motion to relieve Loftin is denied. The fact that counsel may not have perfected the appeal in this case in a timely manner does not in itself demonstrate that he is unable to provide effective assistance of counsel on appeal.

Gidron’s request that he be allowed to make his own arguments to this court is also denied. If he is asking to supplement the brief filed in his behalf by counsel in this court, he has not established that the brief is deficient. An appellant is not permitted to supplement a brief filed by counsel unless he clearly shows that counsel’s brief is lacking. Wade v. State, 288 Ark. 94, 702 S.W.2d 28 (1986). Appellant has not made such a showing.

If appellant Gidron is requesting permission to proceed pro se in the appeal, he has not demonstrated that he is entitled to self-representation under the criteria set out by this court in State v. Van Pelt, 305 Ark. 125, 806 S.W.2d 627 (1991). We recognized in Van Pelt, that a defendant in a criminal trial has the right under the sixth amendment to represent himself when he voluntarily and intelligently elects to do so. Faretta v. California, 422 U.S. 806 (1975). We further held that a criminal appellant pursuing a first appeal as a matter of right may avail himself of the right to self-representation provided that he makes the same voluntary and intelligent waiver of counsel that a defendant at trial is required to make. See Supreme Court Rule 8(d); see also Evitts v. Lucey, 469 U.S. 387 (1985). To enter a voluntary and intelligent waiver, the appellant must indicate in his motion to proceed pro se that at the least he is aware of the right to counsel and that he understands the advantages of being represented by counsel and the disadvantages of self-representation.

It is the practice of this court to require an affidavit signed by the appellant who desires to proceed pro se which specifically sets out the waiver of right to counsel. If the appellant is incarcerated, the affidavit must bear the signature of the Attorney for Inmates attesting that the attorney has advised the appellant of the right to counsel and the advantages of counsel’s assistance and that appellant has elected to refuse the services of attorney on appeal. See Gay v. State, 289 Ark. 236, 713 S.W.2d 232 (1986).

The pro se appellant should be aware before he elects to proceed pro se that pro se appellants receive no special consideration of their argument and are held to the same standard for brief form as a licensed attorney. Wade v. State, 288 Ark. 94, 702 S.W.2d 28 (1986) (fn 1). T'htprose appellant cannot later claim that he was denied effective assistance of counsel. Faretta v. California, 422 U.S. 806 (1975).

The motion filed by Gidron contains no statement that he is fully aware of his right to representation by counsel and the disadvantages of self-representation. Furthermore, no affidavit has been received from him pertaining to waiver of counsel. Since it cannot be ascertained from appellant’s motion if he has made an intelligent waiver of his right to counsel, or even if he is indeed requesting to proceed without the services of counsel, his request is denied.

Motion denied.


text:
    Barrie REGISTER v. STATE of Arkansas
    CR 92-735
    852 S.W.2d 309
    Supreme Court of Arkansas
    Opinion delivered April 5, 1993

      Barry J. Watkins, for appellant.
    No response.
   Per Curiam.

We ordered Barry Watkins, counsel for the appellant, to appear Monday, March 22, 1993, to show cause why he should not be held in contempt. See Register v. State, 312 Ark. 261, 852 S.W.2d 308 (1993). The State had moved to dismiss due to failure of the appellant, Register, to file a brief due August 24, 1992.

Mr. Watkins appeared, admitted he had not filed the brief for Register by the filing date, and pleaded guilty to contempt. At his appearance in response to the show cause order Mr. Watkins stated he was ready to tender a brief. The brief was tendered, and it has now been accepted. The State’s motion to dismiss the appeal had been denied. Register v. State, 312 Ark. 260, 852 S.W.2d 308 (1993). Mr. Watkins is held in contempt of this Court and fined $250.00.


author: Robert H. Dudley,

text:
    Ruben MILLER v. Timothy LEATHERS, Commissioner of Revenues; Julia Hughes Jones, Auditor of the State of Arkansas; and Jimmie Lou Fisher, Treasurer of the State of Arkansas
    92-1031
    851 S.W.2d 421
    Supreme Court of Arkansas
    Opinion delivered April 19, 1993

      Oscar Stilley, for appellant.

      Karen W. Hathaway, Revenue Legal Counsel, for appellee Timothy Leathers.

      Susan G. Jones, Asst. Att’y General, for appellee Julia Hughes Jones.
   Robert H. Dudley,

Justice. Appellant registered and licensed his motor vehicle with the appellee Commissioner of Revenues. The license expired on December 31, 1990, and on March 15, 1991, two and one-half months after the license expired, appellant sought to renew it. He signed an affidavit that he had not operated his car during the period that the license was expired. The Commissioner waived the penalty for failing to timely renew the license, see Ark. Code Ann. § 27-14-1004(b) (1987), and renewed the license with an expiration date of December 31, 1991. See Ark. Code Ann. §§ 27-14-601 (b)(1) (1987), 27-14-1011(d) (Supp. 1991), 27-14-1013 (1987). Appellant objected to the expiration date being December 31 and contended that it should be changed to March 31. He subsequently filed suit in chancery court and alleged that the Commissioner’s interpretation of the applicable statutes constituted an illegal exaction, that he should be given a refund for the two and one-half month period, and, in addition, that he should be allowed to collect refunds on behalf of all other car owners similarly taxed. The chancellor ruled that the complaint failed to state a claim for illegal exaction and dismissed the complaint. The chancellor’s ruling was correct, and we affirm.

Appellant’s complaint does not allege that the statutes imposing the registration and licensing renewal fees are illegal. Rather, it alleges that the Commissioner’s interpretation of those statutes is in error. We have long held that such an allegation is not sufficient to state a claim for an illegal exaction. In Pledger v. Feather lite Precast Corp., 308 Ark. 124, 823 S.W.2d 852 (1992), we wrote:

[W]e have always held that if the taxes complained of are not themselves illegal, a suit for illegal exaction will not lie. Schuman v. Ouachita County, 218 Ark. 46, 134 S. W.2d 42 (1950). In Taber v. Pledger, 302 Ark. 484, 489, 791 S.W.2d 361, 364 (1990), we wrote that “a suit to declare a tax statute unconstitutional, and therefore void” comes within the illegal exaction provision, while a suit “to determine whether the taxpayer’s transactions fall within an exemption created by statute” does not come within the section. More important, and precisely on point in this case, we have held that a flaw in the assessment or collection procedure, no matter how serious from the taxpayer’s point of view, does not make the exaction itself illegal.

308 Ark. at 129, 823 S.W.2d at 856. We reaffirmed this holding only two weeks ago. See Cook v. Department of Fin. and Admin., No. 92-670 (April 5, 1993).

Appellant’s relief, if he is entitled to any, is under Ark. Code Ann. § 27-14-604(b), which provides: “Whenever the office through error collects any fee not required to be paid under this chapter, it shall be refunded to the person paying it upon application therefor made within six (6) months after the date of payment.” If appellant filed for a refund in a timely manner, and, if it were denied, he could then appeal to circuit court.

Affirmed.


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

text:
    David and Gayle SANFORD v. Theresa ZIEGLER
    92-997
    851 S.W.2d 418
    Supreme Court of Arkansas
    Opinion delivered April 19, 1993

      Matthews, Sanders, Liles & Sayes, by: Marci Talbot Liles, for appellants.

      Baxter, Wallace, Jensen & McCallister, by: Bobby D. McCallister, for appellee.
   Robert H. Dudley, Justice.

This is a tort suit involving a collision between a car and a horse. David Sanford and Gayle Sanford, the defendants below, own a pasture. On October 5, 1989, David Sanford was keeping three of his horses in the pasture, which was some distance from the Sanfords’ home. The grass in the pasture was short in October, and each day the Sanfords drove their pickup truck from their home to the pasture to supplement the horses’ feed with both hay and grain. The pasture is enclosed by a relatively new fence that has fenceposts made of steel. The gate is a metal panel gate that has a cross support. A chain with two snaps is attached to the gate so that it can be secured when it is closed. The horses had never escaped from the pasture. David Sanford testified that between five and six o’clock on the evening of October 4, the evening before the accident, he, his wife Gayle, and his daughter drove to the pasture to feed the horses. He testified that after they fed the horses, his daughter latched the gate, and he checked it to be sure that it was securely latched. It was securely latched, and they drove home.

Shortly after 6:30 the next morning, the gate had been opened somehow, and the horses were out of the pasture and on the adjacent roadway. The plaintiff was driving her car along the road and collided with one of the horses. As a direct result of the collision, the plaintiff suffered personal injury, as well as property damage to her car.

The plaintiff filed suit against both defendants and pleaded that they had been negligent in “permitting a horse to run at large” and in “creating a public nuisance.” At trial, only two witnesses testified, plaintiff Ziegler and defendant David Sanford. Their testimony is set out above. Although the record does not include the instructions given by the trial court, it seems clear enough from the comments of the attorneys, as well as the comments of the trial court, that the jury was instructed on ordinary negligence. The jury returned a verdict for the plaintiff. The defendant appeals. We reverse and dismiss.

The plaintiff had the burden of proving that she sustained damages, that the defendants were negligent, and that such negligence was the cause of her damages. Fuller v. Johnson, 301 Ark. 14, 781 S.W.2d 463 (1989). There is no question that plaintiff sustained damages. The issue is whether there was substantial evidence of the defendants’ negligence. Negligence is the failure to do something which a reasonably careful person would do. A negligent act arises from a situation where an ordinarily prudent person in the same situation would foresee such an appreciable risk of harm to others that he would not act or at least would act in a more careful manner. White River Rural Water Dist. v. Moon, 310 Ark. 624, 839 S.W.2d 211 (1992). The standard of review on appeal of a jury’s verdict is whether the verdict is supported by substantial evidence, giving the verdict the benefit of all reasonable inferences permissible under the proof. Ferrell v. Whittington, 271 Ark. 750, 610 S.W.2d 572 (1981).

In this case, giving the verdict the benefit of all reasonable inferences permissible under the proof, we cannot say there was any evidence whatsoever of negligence by either David or Gayle Sanford.

Appellee, the plaintiff below, argues that the jury was free to find that David Sanford “did not sound truthful.” It was, of course, within the jury’s province to believe or disbelieve the testimony of any witness. Fuller v. Johnson, 301 Ark. 14, 781 S.W.2d 463 (1990). However, even if the jury chose to disbelieve Sanford’s testimony, such would not constitute substantial evidence of negligence, and, as stated, the plaintiff had the burden of proof on this issue.

Reversed and dismissed.

Hays, Corbin, & Brown JJ., dissent.

Robert L. Brown, Justice,

dissenting. The majority reverses a jury verdict which was predicated on circumstantial evidence and, in effect, holds that the trial court abused its discretion in denying a motion for directed verdict. I disagree and would hold that the circumstantial proof supports the jury’s decision in favor of the appellee, Theresa Ziegler.

Ziegler was injured and her car was damaged by a horse that escaped from the appellant’s field through an open gate. The appellant, David Sanford, admitted the gate was open. There is no question that the horse and field were under Sanford’s exclusive control.

The precise issue before us today — inferred negligence — was argued to the trial court in response to the appellant’s motion for a directed verdict:

APPELLEE/PLAINTIFF’S COUNSEL: ... He has stated that the gate was within the control of he and his family, that they are the only ones that go in and out of the gate, that they are the only ones that, to their knowledge, were on the property that night, the only ones that, and they have never before had a problem with anybody else touching the gate or opening the gate or leaving it open. I think the jury can infer from the fact that the gate was within their exclusive control, they were the last ones to use it, that they could have made a mistake even though Mr. Sanford has testified on the record that he doesn’t make mistakes.
THE COURT: Anything further?
APPELLANT/DEFENDANT’S COUNSEL: Your Honor, I think it requires the jurors to make a considerable assumption or presumption to tie the open gate to the conduct of the Sanfords. There’s just a total absence of any evidence that the Sanfords are the ones that left the gate open and without that critical evidence or something indicating that they failed to exercise ordinary care, like failing to check it when they did leave the night before, there’s simply not any evidence of negligence on their part. (Emphasis added.)

The court then denied the appellant’s motion and sent the case to the jury. Because the appellant designated his record and did not include jury instructions, we have no way of knowing whether the jury was instructed on inferred negligence or not.

Surely an open gate to a field where the horse was kept under the exclusive control of appellant Sanford is sufficient circumstantial evidence of negligence. Indeed, Sanford admitted that the horse got out through the open gate. The jury was perfectly free to infer negligence from these facts.

This court has been reluctant in the past to decide a plaintiffs circumstantial case against the plaintiff as a matter of law, whether it be by directed verdict, summary judgment, or reversal of a jury verdict. See, e.g., Muskogee Bridge Co. v. Stansell, 311 Ark. 113, 842 S.W.2d 15 (1992) (material facts established by circumstantial evidence; directed verdict denied); Interstate Freeway Serv., Inc. v. Houser, 310 Ark. 302, 835 S.W.2d 872 (1992) (fraud inferred from circumstances supported a jury verdict). As illustrative of this point, most recently this court denied a defendant’s motion for summary judgment and inferred negligence from a glob of soap on the floor of a restroom in a slip-and-fall case. Shrum v. Southern Farm Casualty Insur. Co., 312 Ark. 151, 848 S.W.2d 395 (1993).

Indeed, it is blackletter law that reasonable inference of negligence gleaned from the circumstances may qualify as substantial evidence to sustain a jury verdict. White River Rural Water Dt. v. Moon, 310 Ark. 624, 839 S.W.2d 211 (1992); Ferrell v. Whittington, 271 Ark. 750, 610 S.W.2d 572 (1981). The reasonable inferences in the present case are that Sanford negligently left the gate to his field open and his horse escaped causing injury to Theresa Ziegler.

The trial court’s refusal to direct a verdict, undoubtedly, was based on what could be reasonably inferred in this case. The majority now holds that the court abused its discretion. To hold that an abuse of discretion transpired in this instance is inconsistent with past decisions and is something of an anomaly in our history of inferred-negligence cases. I respectfully dissent.

Hays and Corbin JJ., join.


author: Steele Hays, Justice.

text:
    Kenneth Ray CLEMENTS v. STATE of Arkansas
    CR 92-1042
    851 S.W.2d 422
    Supreme Court of Arkansas
    Opinion delivered April 19, 1993

      Richard W. Atkinson, for appellant.

      Winston Bryant, Att’y Gen., by: Clint Miller, Senior Asst. Att’y Gen. and Sandy Moll, Asst. Att’y Gen., for appellee.
   Steele Hays, Justice.

Appellant Kenneth Ray Clements was convicted of shooting and killing Conway Police Officer Ray Noblitt. The jury convicted him of capital murder and sentenced him to death by lethal injection. On October 8, 1990, this court reversed the conviction and remanded for a new trial because the prosecutor failed to timely provide him with the testimony of one of the state’s witnesses. See Clements v. State, 303 Ark. 319, 796 S.W.2d 839 (1990). The case was retried on February 11, 1992 and Clements was convicted of second degree murder and sentenced to twenty years in prison. As his sole issue on appeal Clements argues that the trial court erred in denying his motion to dismiss for lack of a speedy trial. We find no merit in his argument and affirm.

Pursuant to Ark. R. Crim. P. 28.1, the state had twelve (12) months from the time provided in Rule 28.2 to bring the appellant’s case to trial, excluding only such periods of necessary delay as are authorized in Rule 28.3. Appellant contends the time for trial commenced running on October 8, 1990, the day that the case was reversed and remanded. However, the time actually began to run anew on October 26, 1990, the date the mandate was issued by the Supreme Court Clerk. Ark. R. Crim. P. 28.2 states that if a defendant is to be retried following an appeal, the time for trial shall commence running from the date of the order granting a new trial or remand. The decision is not final until the mandate is issued because a Petition for Rehearing is cognizable within seventeen (17) days from the date of the decision pursuant to Ark. Sup. Ct. R. 20. In addition, the trial court does not have jurisdiction of the case until the mandate is issued. See Morton v. State, 208 Ark. 492, 187 S.W.2d 335 (1945).

Because appellant’s trial on February 11, 1992 was 108 days outside the twelve month speedy trial period from the date the mandate was issued on October 26, 1990, he presented a prima facie case of violation of his right to a speedy trial. Once an appellant presents a prima facie case of violation of speedy trial, the burden shifts to the state to show that the delay is the result of the appellant’s conduct or otherwise legally justified. Scroggins v. State, 312 Ark. 106, 848 S.W.2d 400 (1993); Meine v. State, 309 Ark. 124, 827 S.W.2d 151 (1992). In each of the following five time periods, the state met its burden of proving that any delay was chargeable to Clements or was otherwise justified.

THE PERIOD FROM DECEMBER 31, 1990 TO MARCH 25, 1991

On December 31, 1990, Circuit Judge Francis T. Donovan recused from the case and requested the Arkansas Judicial Department to appoint a new trial judge. This was necessary because Judge Donovan was leaving office and the other two judges in Faulkner County with criminal jurisdiction, the Honorable David Reynolds and the Honorable Watson Villines, would be disqualified from the case. Judge Reynolds had acted as deputy prosecuting attorney during Clements’ first trial and Judge Villines was defense counsel in Clements’ first trial. On March 25, 1991, the Honorable Floyd Lofton was assigned to hear the case. This period is excludable under Ark. R. Crim. P. 28.3(h) as a period of delay “for good cause.” The state could have done nothing further to expedite the trial during the time that Judge Donovan recused and Judge Lofton was appointed. This delay was necessary and reasonable under the circumstances.

Appellant erroneously relies upon Art. 7, sections 21 and 22 of the Arkansas Constitution and Arkansas Supreme Court Administrative Order No. 1 published in In re: Changes to the Arkansas Rules of Civil Procedure, Abolishment of the Uniform Rules of Circuit and Chancery Courts, and Publication of Administrative Orders, 294 Ark. 664, 742 S.W.2d 551 (1987) to argue that a special election to elect a judge should have been held. These provisions only apply when the circuit court judge’s office is vacant at the commencement of the term of court or if the judge fails to attend or is disqualified. No special election was required in this case. The correct procedure of waiting until the Arkansas Judicial Department appointed Judge Lofton was followed. Therefore, this period is excludable.

THE PERIOD FROM JUNE 17, 1991 UNTIL SEPTEMBER 3, 1991

On April 23, 1991, Judge Lofton appointed Kenneth Suggs and Richard Atkinson to represent Clements and scheduled trial for June 24,1991. At an omnibus hearing on June 17,1991, Mr. Suggs asked to be relieved as counsel. His request was denied. Mr. Atkinson then requested a continuance due to an inability to be ready on the June 24th trial date. Judge Lofton found both Atkinson and Suggs negligent, held them in contempt of court, fined them $1,000.00 each, and removed them from the case. Judge Lofton immediately appointed Ray Hartenstein as defense counsel and asked him if he would be ready to go to trial on the previously set trial date to which he received a negative response. The court recessed to allow Mr. Hartenstein to go to his office to get his calendar. When the court reconvened, Judge Lofton announced that the motion for continuance was before the court. The court appointed Blake Hendrix to assist Mr. Hartenstein. Over the state’s objection, Judge Lofton granted a continuance until September 23, 1991.

Appellant first argues that this period is not excludable because there is no written order or docket entry setting forth the excludable period. Under Ark. R. Crim. P. 28.3(i), the trial court should enter written orders or make docket notations specifying the reasons for the delays and the specific dates or number of days to be excluded. Hubbard v. State, 306 Ark. 153, 812 S.W.2d 107 (1991); Cox v. State, 299 Ark. 312, 772 S.W.2d 336 (1989). However, a trial court’s failure to comply with Rule 28.3(i) does not result in automatic reversal. McConaughy v. State, 301 Ark. 446, 784 S.W.2d 768 (1990). We have held that when a case is delayed by the accused and that delaying act is memorialized by a record taken at the time it occurred, that record may be sufficient to satisfy the requirements of Rule 28.3(i). See Key v. State, 300 Ark. 66, 776 S.W.2d 820 (1989); Kennedy v. State, 297 Ark. 488, 763 S.W.2d 648 (1989).

Here, the docket sheet reflects “Jury Trial 9-3-91” and that attorneys Suggs and Adkisson were removed from the case. Also, the continuance was adequately memorialized on record at the hearing on June 17, 1991. This was sufficient to satisfy the necessary requirements.

Clements also argues that he was not responsible for the continuance. He notes that the oral motion made by his attorney was denied by the court and the ensuing continuance was the result of the court’s sua sponte initiative and not that of the defense attorneys.

Under Ark. R. Crim. P. 28.3(c), a period of delay is excluded only if the continuance was granted at the request of the defendant or his counsel. Matthews v. State, 268 Ark. 484, 598 S.W.2d 58 (1980); Campbell v. State, 264 Ark. 372, 571 S.W.2d 597 (1978). In the present case, the trial judge asked Clements if he desired to go to trial as scheduled and he replied, “I’m not happy with him.” “I’m not ready to go to trial.” Also, the prosecution objected to the continuance. Therefore, the delay in the trial was attributable to the actions of the appellant and not to the State. As such, this period is excludable as a delay for “good cause”. See Lewis v. State, 307 Ark. 260, 819 S.W.2d 689 (1991).

THE PERIOD FROM JUNE 17, 1991 TO OCTOBER 7, 1991

Clements argues that the period from the June 17, 1991 pretrial hearing, in which his counsel of choice was removed from the case, and October 7, 1991, the date on which this court reversed Judge Lofton’s removal of Richard Atkinson and placed him back on the case, is not excludable. (See Clements v. State, 306 Ark. 596, 817 S.W.2d 194 (1991) in which we held that the trial court’s removal of Atkinson violated Clements’ sixth and fourteenth amendment rights to counsel under the United States Constitution and his right to counsel under Art. 2, Section 10 of the Arkansas Constitution.) Appellant contends that he was without his counsel of his choice during this period due to Judge Lofton’s erroneous ruling. He relies upon Glover v. State, 307 Ark. 1, 817 S.W.2d 409 (1991) where we held that a two month period was not excludable when defense counsel was allowed to withdraw without the knowledge of the defendant and the court waited two months to appoint new counsel.

Although Clements was without counsel of his choice during this time, it is excludable because it involved an interlocutory appeal filed July 8, 1991. Ark. R. Crim. P. 28.3(a) specifically excludes periods in which an interlocutory appeal is pending. Also, as we noted above, the appellant was responsible for the continuance which was granted at the June 17th hearing.

THE PERIOD FROM SEPTEMBER 3, 1991 TO JANUARY 14, 1992

At a hearing on September 3, 1991, Attorney Hartenstein asked that a previous oral order by Judge Lofton allowing the payment of Tommy Crosthwait, a private investigator, be honored. The court stated that Mr. Crosthwait would not be paid at that point. Mr. Hartenstein then moved for a continuance stating that it would be impossible for him to be ready for trial without the research of the investigator. The continuance was granted and the trial was set for January 14,1992. Judge Lofton then recused from the case on September 4, 1991, and the Honorable Randall Williams was appointed on September 9, 1991. A nunc pro tunc order reflecting the continuance was later prepared by the prosecution, signed by Judge Lofton and filed on October 8, 1991. In a letter to all counsel dated November 20, 1991, Judge Williams acknowledged the continuance/setting order signed by Judge Lofton.

Appellant argues that the order is invalid because his counsel was not present nor apprised of the ex parte order until after November 20, 1991, the date on which he received Judge Williams’ letter. Clements claims that his Sixth Amendment Right to Counsel was violated and that he was unable to make a contemporaneous objection to the order being entered.

Appellant concedes he was aware of the order at least as of November 20, 1991. However, he did not voice any disagreement until February 10, 1992, the day before trial. We have stated that if a defendant discovers a docket error which affects his speedy trial rights or takes exception to the wording of an order, it is incumbent on him to bring the matter to the attention of the trial court within a reasonable time. See Lewis v. State, supra: Anderson v. Hargarves, Judge, 272 Ark. 259, 613 S.W.2d 587 (1981). If appellant believed that Judge Lofton’s order charging the continuance to him was in error, he should have immediately brought this to the court’s attention.

Clements also contends that the backdated nunc pro tunc order is invalid as a matter of law. A nunc pro tunc order may be entered to make the court’s record speak the truth or to show that which actually occurred. Murry v. State Farm Mutual Automobile Ins. Co., 291 Ark. 445, 725 S.W.2d 571 (1987). However, a court may not change the record to do that which should have been done but was not. Bradley v. French, 300 Ark. 64, 776 S.W.2d 355 (1989). In addition, appellant claims that because Judge Lofton had recused from the case, he was without jurisdiction to sign any nunc pro tunc order.

As in Lewis v. State, supra, we believe that the order entered after the continuance was granted was sufficient. In Lewis, we held that an order entered two months after a continuance was granted was sufficient. Here, the order was entered thirty-five days after the continuance was granted. Because Judge Lofton recused from the case the day after he granted the continuance, the administrative oversight of not filing the order immediately is understandable and the later correction of the record was permissible.

As stated above, a review of the record might be enough to satisfy the requirements of Ark. R. Crim. P. 28.3(i). See Hubbard v. State, supra; McConaughy v. State, supra, Key v. State, supra, and Kennedy v. State, supra. See also Hudson v. State, 303 Ark. 637, 799 S.W.2d 529. The record of the September 3, 1991 hearing indicates that it was appellant who requested the continuance which delayed the trial. The state was prepared to try Clements within the speedy trial period and objected to the continuance. The record also demonstrates that all of the parties understood that a continuance was being granted. Because the record itself demonstrates that this delay was attributable to Clements and was memorialized in the proceedings at the time, this period is excludable under the circumstances.

THE PERIOD FROM JANUARY 14, 1992 TO FEBRUARY 11, 1992

On December 12,1991, Judge Williams recused from the case. The next day, the Honorable Fred Davis was appointed. Judge Williams held a hearing on December 18, 1991 and reset the case from January 14,1992 to February 11,1992. An order was signed on December 26,1991 and filed with the Circuit Clerk on December 27,1991. The order states that the continuance was with the approval of all parties and that the period of time shall be an excluded period. This period is excludable as evidenced by its own terms. All parties agreed to the delay and the order was properly entered.

In conclusion, all of the delays in bringing Clements to trial were justified under the circumstances of this case. When the relevant periods are excluded the appellant was not denied his right to a speedy trial.

Affirmed.


text:
    Darren HARDING v. Julie SMITH
    92-1262
    851 S.W.2d 427
    Supreme Court of Arkansas
    Opinion delivered April 20, 1993

      Dodds, Kidd, Ryan & Moore, by: Robert T. James and Donald S. Ryan, for appellant.

      Laser, Sharp, Mayes, Wilson, Bufford & Watts, P.A., by: Brian Allen Brown and Richard N. Watts, for appellee.
   Steele Hays, Justice.

This is a suit for personal injuries arising from a motor vehicle collision. The jury returned a verdict for the plaintiff Darren Harding in the amount of $653.41. Harding appeals on a single point— the trial court erred in instructing the jury on comparative fault. Finding no error, we affirm the judgment.

Darren Harding was driving his automobile west on Third Street in Little Rock. Appellee Julie Smith (now Buford) was driving a 1988 Ford van north on Commerce. The two vehicles collided in the intersection in a heavy downpour. Harding contends Ms. Buford failed to stop at a stop sign, among other acts of negligence, causing extensive physical damage and seriously injuring him. Harding claimed to have incurred medical bills totalling $10,500. Ms. Buford alleged that Harding’s injuries were the result of his own negligence.

Over Harding’s objection the trial court instructed the jury on comparative negligence. The amount of the verdict, $653.41, exactly equaled the amount of medical expenses incurred on the day of the accident, plus $38.52 for medication. Harding complains that it was reversible error for the jury to be instructed in accordance with AMI 206, 305(a), 901 and 2102 because there was no evidence of fault on his part. Thus, he maintains there is no substantial evidence supporting Ms. Buford’s theory of comparative negligence. Hamilton v. Pan American Southern Corp., 238 Ark. 38, 378 S.W.2d 652 (1964).

We disagree with the argument on two grounds: given the nature of the testimony, it was not improper for the jury to be instructed in accordance with the AMI instructions on comparative fault, and it has not been demonstrated that the jury reduced an award to Harding by comparative negligence.

As to the verdict, this was a general verdict and we have no way of determining how the jury arrived at the amount awarded. As Ms. Buford points out, the cause and degree of Darren Harding’s injuries were sharply challenged and the jury may have determined that any damages attributable to Ms. Buford’s negligence were minimal. There was testimony that Harding did not appear to be injured, that he was walking around after the impact without complaint. The investigating officer testified that he saw no sign of blood or cuts. A paramedic testified that Harding had a laceration on his head, but it was so insignificant that he did not treat it, that in his opinion Harding was not significantly injured. Other testimony indicated Mr. Harding’s symptoms may have been preexisting.

As to causation, Darren Harding testified it was raining hard, that he was driving about 25 miles per hour in a 30 mile per hour speed zone; that he did not have his headlights on. He saw Ms. Buford approaching the intersection at a speed, he estimated at 20 miles per hour and attributed the collision to her failure to stop at the stop sign. Ms. Buford testified that the downpour impaired visibility. She testified she had her headlights on and stopped at the stop sign, looking both ways. As she entered the intersection she heard a car coming very fast and slammed on her brakes just as the two vehicles collided.

On the basis of that testimony the jury could well have inferred that Harding was guilty of some degree of fault which proximately caused or contributed to the occurrence, and it was not error to instruct the jury accordingly. James v. Bill C. Harris Construction Co., Inc., 297 Ark. 435, 763 S.W.2d 640 (1989).

Affirmed.

Glaze, J., not participating.


author: David Newbern, Justice.

text:
    SPHERE DRAKE INSURANCE COMPANY v. BANK OF WILSON
    92-1265
    851 S.W.2d 430
    Supreme Court of Arkansas
    Opinion delivered April 20, 1993

      Matthews, Sanders, Liles & Sayes, by: Roy Gene Sanders, for appellant.

      Gibson & Rhodes, by: Mike Gibson and Richard Rhodes, for appellee.
   David Newbern, Justice.

This is the second appeal resulting from a default judgment holding the appellant, Sphere Drake Insurance Company (Sphere Drake), liable to the Bank of Wilson on a casualty insurance claim. In the first appeal we approved the default judgment to the extent it determined Sphere Drake liable on the policy in question but reversed and remanded because the Trial Court had precipitously awarded damages. Sphere Drake Ins. Co. v. Bank of Wilson, 307 Ark. 122, 817 S.W.2d 870 (1991). The Trial Court considered the damages issue on remand and entered an award. It was held, over Sphere Drake’s objection, that the Bank could have the benefit of the valued policy law and thus was entitled to the face amount of the policy but not to exceed the value of the indebtedness secured by the insured property rather than being entitled only to recover up to the value of the insured property. We affirm the Trial Court’s award.

Edward and Rachel Carr purchased a building for $13,000. They sold it to relatives named Conway for $36,000. The Conways gave the Carrs a deed of trust to secure payment of the purchase price. The Carrs assigned the deed of trust to the Bank to secure certain loans from the Bank to them. The Conways insured the building with Sphere Drake for $55,000, and the Bank was named as an insured “mortgagee” on the policy. The building burned, and the Bank filed its claim with Sphere Drake for the amount of the Carrs’ indebtedness to the Bank. Sphere Drake refused to pay, and the Bank sued. Sphere Drake defended on the theory that the Carrs and the Conways burned the building to collect the insurance proceeds thus defrauding Sphere Drake.

The default judgment came about as the result of Sphere Drake’s failure to comply with an order compelling discovery. On the first appeal we said the judgment “should have provided only that [Sphere Drake] was liable to the Bank on the insurance policy,” but should not have awarded damages as it did. It is thus clear that whatever defense Sphere Drake may have had on the basis of fraud is no longer available to it as the basic liability issue is foreclosed. Sphere Drake is liable to the Bank “on the insurance policy.” The sole issue now is whether the Bank was entitled only to recover the value of the lost building or the amount owed to it by the Carrs up to the policy limit.

The parties stipulated that the principal balance of the loan was $20,388.83, interest was $9,873.85, and that the statutory 12% penalty for unwarranted failure to pay the claim would amount to $2,446. Sphere Drake also agreed to pay attorney’s fees of $10,000 and judgment was entered for these sums.

Sphere Drake first argues the statute does not apply for the benefit of the mortgagee when the insurer has been defrauded. The second argument is that the fraud of an insured party is imputable to the mortgagee. Third, the valued policy statute does not apply for the benefit of a mortgagee who is not the named insured and who did not purchase the policy, thus a mortgagee may not collect more than the actual value of the mortgaged property.

1. Law of the case

We rej ect the first two arguments as the fraud issue has been determined adversely to Sphere Drake by the default judgment. As we made clear in B & F Eng’g, Inc. v. Cotroneo, 309 Ark. 175, 830 S.W.2d 835 (1992):

After default, the defendant has the right to cross-examine the plaintiffs witnesses, to introduce evidence in mitigation of damages, and to question on appeal the sufficiency of the evidence to support the amount of damages awarded. The defaulting defendant may not introduce evidence to defeat the plaintiffs cause of action.

Sphere Drake’s liability to the Bank under the policy is now law of the case, foreclosing arguments which would defeat the cause of action. This includes the argument which presumes the existence of fraud and the argument that fraud should be imputed to the mortgagee.

2. The valued policy law

The valued policy law is found at Ark. Code Ann. § 23-88-101 (1987):

(a) A fire insurance policy, in case of a total loss by fire of the property insured, shall be held and considered to be a liquidated demand and against the company taking the risk, for the full amount stated in the policy, or the full amount upon which the company charges, collects, or receives a premium.
(b) However, the provisions of this section shall not apply to personal property.

Identical language in a prior codification, Ark.Stat.Ann. § 66-515, was addressed in Tedford v. Security State Fire Ins. Co., 224 Ark. 1047, 278 S.W.2d 89 (1955), as follows:

Statutes of this sort are passed for the purpose of avoiding the uncertainty of determining the value after the fire. The manifest policy of the statute is to guard against over-insurance of the property. The agents or the company have the opportunity to inspect the property fully before taking the insurance and fixing the amount of the premiums. It is the valuation fixed in advance by the parties by way of liquidated damages in case of a total loss by fire of the property insured without the fault of the insurer.
***
Since the enactment of the statute in 1889 this Court has consistently held that it cannot be evaded by contrary policy stipulations. In E.O. Barnett Bros. v. Western Assurance Co., 143 Ark. 358, 220 S.W. 465, the Court said the valued policy statute “becomes a part of every policy of insurance on real property in this State, the same as if it were actually written in the policy.”

Sphere Drake does not question the validity of the assignment of the deed of trust from the Carrs to the Bank. It is clear that, although the Bank was not technically a “mortgagee” as stated on the policy, it was in the same position as a mortgagee.

While we know of no case directly on point decided by this Court, Sphere Drake has given us no reason to hold that a secured party who qualifies as an insured is not entitled to the benefit of the statutory provision. In 15 Couch on Insurance 2d, § 54:221, it is stated that, “In the absence of a controlling regulation or stipulation to the contrary, a mortgagee, in case of a total loss, is entitled to recover the whole amount insured, provided it does not exceed that which, at the time of the loss, was due upon the mortgage.” See Fireman’s Fund Ins. v. Jackson Hill Marina, 704 S.W.2d 131 (Tex.App. 12 Dist. 1986); Cooper v. Alford, 446 So.2d 1093 (Fla.App. 1 Dist. 1984); Fuller v. Stonewall Cas. Co. of W. Va., 304 S.E.2d 347 (W.Va. 1983); Helmer v. Texas Farmers Ins. Co., 632 S.W.2d 194 (Tex.App. 1982).

We have found no general rule in cases which have considered both the questions of the effect of a valued policy statute and the extent of a mortgagee’s entitlement to recovery, but in Great American Ins. Co. v. Smith, 172 So.2d 558 (Miss. 1965), both issues were raised. The Supreme Court of Mississippi concluded a mortgagee was protected by a valued policy law and entitled to recover the full value of the policy up to the extent of the indebtedness.

Section 23-88-101 does not specify for whose benefit it was enacted. It does not limit its effect to claims filed by a party holding legal title to insured property. It speaks rather in terms of certainty through creating a “liquidated demand” which is to be “for the full amount stated in the policy, or the full amount upon which the company charges, collects, or receives a premium.” Given the policy objectives of the statute which we discussed in the Tedford case, we find no good reason why anyone who qualifies as an insured under the policy should be limited contrary to those objectives. An exception, of course, might exist when there is some illegality or fraud in the issuance of the policy, an issue which is foreclosed in this case.

Affirmed.

Brown, J., not participating.


text:
    Richard ECKL v. STATE of Arkansas
    CR 92-1188
    851 S.W.2d 428
    Supreme Court of Arkansas
    Opinion delivered April 20, 1993

      Michael Knollmeyer, for appellant.

      Winston Bryant, Att’y Gen., by: Catherine Templeton, Asst. Att’y Gen., for appellee.
   David Newbern, Justice.

The appellant, Richard Eckl, pleaded guilty to sexual abuse in the first degree and was sentenced to three years probation and a $500 fine. Eckl contends the Trial Court erred by denying a motion to dismiss premised upon alleged violations of the statute of limitations and the speedy trial rule. Because we lack authority to hear Eckl’s appeal from a guilty plea, the appeal is dismissed.

The right of appeal in criminal cases is conferred upon “any person convicted of a misdemeanor or a felony ... in any circuit court of this state” by Arkansas R. Crim. P. 36.1 (1992). The Rule also provides, “Except as provided by Rule 24.3(b) there shall be no appeal from a plea of guilty or nolo contendré [contendere].” Rule 24.3(b) provides:

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

Eckl reserved in writing the right to appeal the denial of the pretrial motion to dismiss. The Court, the prosecutor, and the defense counsel all agreed the motion to dismiss would be treated as a motion to suppress under Rule 24.3 (b) so as to preserve Eckl’s right to appeal.

Rule 24.3 (b) applies only to adverse rulings on motions to suppress evidence illegally obtained. See, e.g., Pickett v. State, 301 Ark. 345, 783 S.W.2d 854 (1990); Jenkins v. State, 301 Ark. 20, 781 S.W.2d 461 (1989).

In Jenkins v. State, 301 Ark. 586, 786 S.W.2d 566 (1990), Jenkins pleaded nolo contendré to an offense and reserved the right to appeal the denial of a motion to dismiss based upon a speedy trial violation. We refused to address the speedy trial issue because Jenkins had no right to appeal from a plea of nolo contendere. We reached that decision despite the fact that the Trial Court, the prosecutor, and the defense counsel all agreed that Jenkins could enter a conditional plea and reserve his right to appeal the denial of the motion to dismiss.

Eckl contends a guilty plea waives only non-jurisdictional errors, relying on Garrett v. State, 296 Ark. 550, 759 S.W.2d 23 (1988), and Finley v. State, 295 Ark. 357, 748 S.W.2d 643 (1988) . Eckl argues that because the speedy trial and statute of limitations defenses are jurisdictional, they have not been waived by his plea of guilty.

It is clear that the right to a speedy trial is waived by a guilty plea. Kennedy v. State, 297 Ark. 488, 763 S.W.2d 648 (1989) Hall v. State, 281 Ark. 282, 663 S.W.2d 926 (1984). Eckl is correct, however, in arguing that the statute of limitations is “jurisdictional” in the sense of not being subject to waiver in a criminal case. In Savage v. Hawkins, 239 Ark. 658, 391 S.W.2d 18 (1965), we wrote:

Unlike some of the civil statutes of limitation which are waived unless pleaded, this limitation of prosecution statute (§ 43-1602, supra) is jurisdictional. Under the express wording of the statute that “No person shall be prosecuted, tried and punished for any felony unless an indictment be found within three years after the commission of the offense,” after three years (unless the running of the statute is tolled) a court is without power to try the case.

The jurisdictional nature of the alleged error does not, however, create a basis for direct appeal to this Court. The only possibility for establishing the right of appeal of a judgment of conviction resulting from a guilty plea is pursuant to Rule 24.3(b). As that Rule does not apply in these circumstances, we must dismiss the appeal.

Appeal dismissed.