author: W. H.“Dub” Arnold, Chief Justice. Glaze, J.,

text:
    Lorene ELLIS v. Jean PRICE
    98-1378
    990 S.W.2d 543
    Supreme Court of Arkansas
    Opinion delivered May 27, 1999

      Sandra Trotter Phillips, for appellant.

      Mitchell, Blackstock, Barnes, Wagoner & Ivers, by: Marcia Barnes, for appellee.
   W. H.“Dub” Arnold, Chief Justice.

This case arose when appellee Jean Price filed a complaint against appellant Lorene Ellis and a co-defendant, Henrietta Glayson, contending that they had falsely and maliciously accused the appellee of adultery and that statements made by them were defamatory per se, in that they defamed appellee’s reputation to her husband.

Knowing that appellee was three months pregnant, appellant and Ms. Glayson telephoned appellee’s husband on May 9, 1995, and alleged to him that appellee was having an affair with another man and that the baby appellee was carrying may be the other man’s child. On May 16, 1995, appellee suffered a miscarriage. Appellee alleged in her complaint against appellant and Glayson that because of the proximate result of the statements to her husband, she suffered injury to her reputation, personal humiliation, embarrassment, weight loss, difficulty sleeping, and loss of appetite. The record is clear that appellee had already suffered complications with her pregnancy and therefore did not allege that appellant’s statements were the proximate cause of her miscarriage.

A motion in limine was filed by appellant and Glayson the day before trial requesting that evidence concerning appellee’s pregnancy and subsequent miscarriage be excluded from the trial because the probative value of such evidence would be greatly outweighed by the prejudice to the defendants. On the day of trial, the court ruled on the motion in limine, ordering that neither the plaintiff nor any of her witnesses could testify that statements made to her husband were the proximate cause of the miscarriage, but that the plaintiff would be allowed to discuss the pregnancy and miscarriage as to the plaintiff s state of mind.

Although motions for directed verdicts were made, the case proceeded to the jury and the jury found in favor of the appellee, awarding her damages in the amount of $40,000.00 from each of the defendants, for a total of $80,000.00. The appellee was awarded from each defendant $20,000.00 in compensatory damages and $20,000.00 in punitive damages. The trial court entered a judgment on April 30, 1998, awarding these damages with interest to be paid at 6% per annum. Appellant and Glayson filed motions for judgment notwithstanding the verdict, or alternatively for remittitur of the jury award, or a new trial. All motions were denied.

This appeal followed, in which appellant seeks to have the judgment overturned. She asserts the following two points on appeal:

1) The court erred in denying the defendants’ motion in limine to exclude testimony from the plaintiff, her witnesses, and her counsel concerning her pregnancy and subsequent miscarriage, in a defamatory per se case.
2) The court erred in the following ways: by allowing the case to proceed to the jury on the evidence; by allowing the $80,000.00 jury award in compensatory and punitive damages to stand; by denying the defendants’ motion for either a directed verdict, judgment notwithstanding the verdict, remittitur of the jury award, or a new trial.

We disagree.

I. Whether the court erred in denying the defendants’ motion in limine to exclude testimony from the plaintiff, her witnesses, and her counsel concerning her pregnancy and subsequent miscarriage, in a defamatory per se case.

A motion in limine was filed by appellant and Glayson the day before trial, requesting that evidence concerning appellee’s pregnancy and subsequent miscarriage be excluded from the trial because the probative value of such evidence would be greatly outweighed by the prejudice to the defendants. On the day of trial, the court ruled on the motion in limine, ordering that neither the plaintiff nor any of her witnesses could testify that statements made to her husband were the proximate cause of the miscarriage, but that the plaintiff would be allowed to discuss the pregnancy and miscarriage as to the plaintiff s state of mind.

A trial judge may exclude evidence, although relevant, if its probative value is substantially outweighed by the danger of unfair prejudice. A.R.E. Rule 403. The standard of review on appeal is whether the trial court committed a manifest abuse of discretion in its ruling. Id.; Peters v. Pierce, 314 Ark. 8, 858 S.W.2d 680 (1993); Bennett v. State, 297 Ark. 115, 759 S.W.2d 799 (1988). In the absence of abuse of discretion, the appellate court will not reverse. Benson v. Shuler Drilling Co., 316 Ark. 101, 871 S.W.2d 552 (1994); Gipson v. Garrison, 308 Ark. 344, 824 S.W.2d 829 (1992).

Although appellant contends that the trial court erred in denying her motion in limine to exclude certain evidence in a defamatory per se case, appellant cites no authority in support of her argument, other than simply restating A.R.E. 403. This Court has said on numerous occasions that it will not consider an issue if the appellant has failed to cite any convincing legal authority in support of her argument. Craft v. City of Fort Smith, 335 Ark. 417, 984 S.W.2d 22 (1998); Porter v. Harshfield, 329 Ark. 130, 948 S.W.2d 83 (1997); Miller v. State, 328 Ark. 121, 942 S.W.2d 825 (1997). Appellant’s failure to cite authority or make a convincing argument is sufficient reason for affirmance of the trial court’s ruling on this point. Williams v. Martin, 335 Ark. 163, 169, 980 S.W.2d 248 (1998), citing Williams v. State, 329 Ark. 8, 946 S.W.2d 678 (1997). It is certainly not apparent without further research that appellant’s argument is well-taken. Id., citing Roberts v. State, 324 Ark. 68, 919 S.W.2d 192 (1996).

In addition, appellee’s counsel clarified in her opening statement that appellee was not contending that her miscarriage was a result of the phone calls made by appellant and Glayson. Appellee’s counsel stated as follows:

Mrs. Price is not contending that this phone call or any action by Ms. Ellis or Ms. Glayson had anything to do with that miscarriage because there will be evidence that there was already a problem with the pregnancy and a heartbeat problem with the fetus. I wanted to clarify to you that we are not asking you to consider that as any damages or even to assume or imply that we are contending in any way that her miscarriage was a result of this phone call or why we are coming to court.

Further, the trial judge gave a cautionary instruction to the jury that this was not part of appellee’s case, and no objection was made by appellant to the instruction. For the foregoing reasons, we hereby affirm the trial court on this point.

II. Whether the court erred in the following ways: by allowing the case to proceed to the jury on the evidence; by allowing the $80,000.00 jury award in compensatory and punitive damages to stand; by denying the defendants’ motion for either a directed verdict, judgment notwithstanding the verdict, remittitur of the jury award, or a new trial.

Directed-verdict motions are treated as challenges to the sufficiency of the evidence. Pettigrew v. State, 64 Ark. App. 339, 984 S.W.2d 72 (1998). When considering a motion for directed verdict made by a defendant, the plaintiffs evidence, and all reasonable inferences therefrom, are examined in the light most favorable to the plaintiff. Dodson v. Charter Behavioral Health Sys., Inc., 335 Ark. 96 (1998); See also, Avery v. Ward, 326 Ark. 829, 934 S.W.2d 516 (1996). A directed-verdict motion should be granted only if the evidence would be so insubstantial as to require a jury verdict for that party to be set aside; evidence is insubstantial when it is not of sufficient force or character to compel a conclusion one way or the other, or if it does not pass beyond mere suspicion or conjecture. See City of Little Rock v. Cameron, 320 Ark. 444, 897 S.W.2d 562 (1995); St. Paul Fire & Marine Ins. Co. v. Brady, 319 Ark. 301, 891 S.W.2d 351 (1995).

We held in the case of United Ins. Co. of America v. Murphy, 331 Ark. 364, 961 S.W.2d 752 (1998), that a plaintiff in a defamation case must prove reputational injury in order to recover damages. In United Ins., the doctrine of presumed damages in a defamation per se case was abolished, and all prior inconsistent decisions were overruled.

Appellant asserts that her motion for directed verdict should have been granted. However, a review of the record indicates that there was sufficient evidence in this case to proceed to the jury. In Hogue v. Ameron, Inc., 286 Ark. 481, 695 S.W.2d 373 (1985), we held that a plaintiffs testimony that his reputation was injured is enough to take the case to the jury in a defamation case. In Hogue, the defendant wrote a letter to Hogue’s police supervisor, complaining about driving an unlicenced vehicle and yelling obscenities. The accusations were untrue. When Hogue sued, the only evidence of injury to his reputation was his testimony and that of another witness who testified “rather vaguely” that Hogue’s reputation changed for the worse about the time of the investigation of the accusations. Id. at 483. The trial court granted a motion for directed verdict. We reversed and remanded the case.

A plaintiff must establish actual damage to his reputation, but the showing of harm is slight. Mitchell v. Globe International Publishing, Inc., 773 F.Supp. 1235 (W.D. Ark. 1991). A plaintiff must prove that the defamatory statement(s) have been communicated to others and that the statements have detrimentally affected those relations. The law does not require proof of actual out-of-pocket expenses.

In the instant case, appellee testified that the defamation had damaged her reputation and her relationship with her husband. The testimony revealed that appellee’s husband was angry. His actions indicated he did believe the accusations, although he denied believing them. He did not sleep in the same room with her beginning the night of the phone call. When he would pass her in the house, he would make sure she did not touch him; and, he would not have any conversation with her for a long time. They did not sleep together for two to three months. Appellee went home to Memphis at one point and had little contact with her husband. She had not planned to stay in Memphis, but as she testified, “There was really no reason to be there [Little Rock] ... we didn’t have a relationship ... so I just took my child and we just went home for the summer.”

Testimony further revealed that after the phone call, appellee’s husband questioned her about everywhere she went and began doubting her. He testified that the allegations about his wife and the other man being alone behind locked doors “disturbed” him. He testified that he asked appellee before she filed the lawsuit to be honest with him and tell him if anything had happened. He said, “I think that hurt her because she knew that I always had trust in her and I’ve never doubted her before.”

Appellee’s testimony, coupled with her husband’s testimony, was more than sufficient to establish harm to reputation and that the statements had detrimentally affected the relationship between appellee and her husband. We hold that when viewed in a light most favorable to the plaintiff, the evidence presented in this case was certainly sufficient for this case to go to the jury. Therefore, we hold that the trial court did not err in denying appellant’s motion for a directed verdict.

In United Ins. Co. of America v. Murphy, supra, we further articulated the standards of review of allegations of excessive damage awards, remittitur, and punitive damages, which the appellant in the instant case has also alleged. We held as follows:

When an award of damages is alleged on appeal to be excessive, we review the proof and all reasonable inferences most favorable to the appellee and determine whether the verdict is so great as to shock our conscience or demonstrate passion or prejudice on the part of the jury. Builder’s Transp., Inc. v. Wilson, 323 Ark. 327, 914 S.W.2d 742 (1996).

Id. at 371.

[R]emittitur is appropriate when the compensatory damages awarded cannot be sustained by the evidence. Johnson v. Gillilan, 320 Ark. 1, 896 S.W.2d 856 (1995).

Id. at 372.

Turning to the issue of punitive damages, when reviewing such an award, we consider the extent and enormity of the wrong, the intent of the party committing the wrong, all the circumstances, and the financial and social condition and standing of the erring party. McLaughlin v. Cox, 324 Ark. 361, 922 S.W.2d 327 (1996). Punitive damages are to be a penalty for conduct that is malicious or done with the deliberate intent to injure another. Id.

Id. at 372. We further concluded in United Ins. that where, in light of the evidence, the jury could have concluded that appellants displayed a conscious indifference for appellee and that their acts were done with the deliberate intent to injure her, the amount of punitive damages did not shock our conscience. Id. at 372.

In the instant case, given the admission by appellant and Glayson that they made the phone calls to appellee’s husband with the intent to tell him of the alleged adultery, knowing that appellee was pregnant and had had complications with her pregnancy and was supposed to avoid stress, it is highly possible that the jury could have concluded that appellant displayed a conscious indifference for appellee and that appellant’s acts were done with the deliberate intent to injure appellee.

Further, the record is replete with evidence of appellant and Glayson’s malice and reckless indifference to the effect the allegations would have on appellee. Neither appellant nor Glayson investigated the facts by contacting or confronting appellee. Glayson did not even know appellee. Donnie Coffinan, the man with whom appellant alleged appellee was having an affair, told appellant several times that he and appellee were not having a sexual relationship. Appellant told another party, Cornelius Roberts, that “all this would stop if [Coffinan] repaid a debt.” Malice was abundant in this case. Under these circumstances, it does not seem shocking that the jury would have assessed a $20,000.00 punitive penalty against appellant.

As far as the question of remittitur, as stated previously, remittitur is appropriate when the compensatory damages awarded cannot be sustained by the evidence. Johnson v. Gillilan, 320 Ark. 1, 896 S.W.2d 856 (1995). Again, we review the proof and all reasonable inferences most favorable to the appellee and determine whether the verdict is so great as to shock our conscience or demonstrate passion or prejudice on the part of the jury. Builder’s Transp., Inc. v. Wilson, 323 Ark. 327, 914 S.W.2d 742 (1996). In light of the evidence in this case, and because the standard is whether the verdict is so great as to shock the conscience of the court, the jury award of $20,000.00 compensatory damages was clearly not excessive.

Finally, a judgment notwithstanding the verdict is not proper where there is substantial evidence to support the jury verdict. Sparks Reg’l Med. Ctr. v. Smith, 63 Ark. App. 131, 976 S.W.2d 396 (1998); Rathbun v. Ward, 315 Ark. 264, 866 S.W.2d 403 (1993). On appeal, we again review the evidence and all reasonable inferences deducible in the light most favorable to the party against whom the judgment notwithstanding the verdict may be rendered. Whether the evidence is substantial is a question of law. Substantial evidence means evidence that is of sufficient force and character that it will compel a conclusion one was or another. The evidence must force the mind beyond mere suspicion or conjecture. Id.

Again, there is sufficient evidence in this case to compel the conclusion that appellant slandered appellee. Therefore, the trial court did not err in faffing to grant appellant’s motion for judgment notwithstanding the verdict. We hold that for all of the foregoing reasons, the trial court should be affirmed on all points.

Affirmed.

Glaze, J.,

concurring, see United Ins. Co. of America v. Murphy, 331 Ark. 364, 961 S.W.2d 752 (1998) (Glaze, J., dissenting).


source: Caselaw Access Project

author: W. H.“Dub” Arnold, Chief Justice. Ray Thornton, Justice,

license: Public Domain

text:
    SAFORO & ASSOCIATES, INC., Geo Specialty Chemicals, Inc., and William Evans v. POROCEL CORPORATION
    98-1193
    991 S.W.2d 117
    Supreme Court of Arkansas
    Opinion delivered May 27, 1999
    [Petition for rehearing denied July 1, 1999.]

      Friday, Eldredge & Clark, by: Kevin A. Crass, for appellants.

      Rose Law Firm, by: Richard T. Donovan, for appellee.
   W. H.“Dub” Arnold, Chief Justice.

This is a case involving the toll processing (i.e., processing for a fee) by appellee of raw material owned by appellant Saforo & Associates and alleged misappropriations by Saforo, as well as appellee’s former plant manager, appellant Williams Evans, and appellant GEO Specialty Chemicals, Inc., of trade secrets regarding the wash water system designed for that toll processing, in this case the washing step, of a raw material referred to as “Bayer Scale,” which is an alumina residue that has been used for various applications in the past and is currendy being used in the refrigerate core industry, as well as other applications.

Appellant Saforo had originally entered into an arrangement with appellee Porocel whereby appellee would perform the washing step of the Bayer Scale. At the time the wash water system ultimately used by appellee was constructed, appellant William Evans supervised the construction and operation of the wash system at Porocel. Within a short time, the business relationship between appellee and Saforo deteriorated, and Saforo began looking for an alternative processor of his Bayer Scale. Ultimately, appellant GEO Specialty Chemicals was contracted by Saforo to process the Bayer Scale.

Appellee brought an action in Pulaski County Chancery Court seeking to enjoin the appellants from processing the Bayer Scale at the GEO facility in Litde Rock utilizing the specific wash water system which had been utilized at Porocel. Appellee also sought damages for the misappropriation of a trade secret, as well as contract damages from Saforo & Associates for failure to pay for the processing completed by appellee.

On March 31, 1997, the trial court conducted a hearing on appellee’s motion for temporary injunction and found, in an order dated April 10, 1997, that the appellants had misappropriated appellee’s trade secret; the court issued an injunction. The trade secret at issue is limited to the wash step of the processing of the Bayer Scale. The wash step consisted of a tank and a separate component referred to by the parties as a Sweco screen. Appellants contended that the wash water system was not unique and had been utilized in processing of aluminum products throughout the industry for a long period of time.

On March 13 and March 17, 1998, the trial court conducted a trial to determine the following: whether appellee should be granted a permanent injunction; whether appellee was entitled to damages for the misappropriation of the trade secret; and, whether appellee was entitled to damages from Saforo & Associates, Inc., for breach of contract. In an order dated April 1, 1998, the court reaffirmed its earlier finding that the appellants had misappropriated appellee’s, trade secret. The court further found that appellee had been damaged in the amount of $88,092.73 by the misappropriation of the trade secret and awarded appellee $63,500.00 against Saforo & Associates, Inc., on a theory of an implied contract. Additionally, the court found that the misappropriation was willful and malicious and awarded appellee attorney’s fees in the amount of $15,000.00, but declined to award prejudgment interest.

Appellants appeal from the court’s order and judgment and assert the four following points as the basis for their appeal:

1) The trial court erred in finding that the appellee’s wash water system constituted a trade secret under Ark. Code Ann. § 4-75-601;
2) The trial court erred in finding that the appellants willfully misappropriated a trade secret;
3) The trial court erred in the determination of appellee’s damages sustained as a result of the misappropriation of trade secrets;
4) The trial court erred in its determination of damages owed by appellant Saforo & Associates, Inc., for breach of an implied contract.

We agree with appellant that the trial court erred in its determination of appellee’s damages sustained as a result of the misappropriation of the trade secret, but affirm the trial court on each of the other points asserted by appellants.

I. Whether appellee’s wash water system constituted a trade secret.

It is well settled that chancery cases are reviewed de novo on the record, but we do not reverse a finding of fact by the chancellor unless it is clearly erroneous. Slaton v. Slaton, 336 Ark. 211, 983 S.W.2d 951 (1999). A finding is clearly erroneous when, although there is evidence to support it, the reviewing court on the entire evidence is left with a definite and firm conviction that a mistake has been committed. Id.; RAD-Razorback Ltd. Partnership v. B.G. Coney Co., 289 Ark. 550, 713 S.W.2d 462 (1986).

Ark. Code Ann. § 4-75-601 et seq. (Repl. 1996) is the Arkansas Trade Secrets Act and is based upon the Uniform Trade Secrets Act. It defines a trade secret as “a . . . process . . . that: [d]erives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use; and [i]s the subject of efforts that are reasonable under the circumstances to maintain its secrecy.” Ark. Code Ann. § 4-75-601(4). (Subsection divisions omitted.)

When applying the six factors articulated in Vigoro Industries, Inc. v. Cleveland Chemical Co. of Arkansas, Inc., 866 F.Supp. 1150 (E.D. Ark. 1994), to the evidence in this case, as the trial court correctly did, it is clear that Porocel’s wash water system constituted a trade secret. We hereby adopt the Vigoro factors as the controlling analysis for determining whether any particular information constitutes a trade secret.

The first factor is the extent to which the information is known outside the business. It was uncontested that the Bayer Scale industry is very limited, given that Reynolds Metal is the only producer of Bayer Scale and purchasers of same are few. Saforo has the exclusive right to that Bayer Scale. The evidence showed that only three companies have ever processed Bayer Scale — Porocel, GEO, and Alcoa. Several industry experts testified that in all their years of experience in the aluminum/bauxite industry, they had never seen a wash water system like the Porocel wash water system.

Appellants contend that the Porocel wash water system is within the public domain. However, the evidence adduced at trial indicated that the Porocel wash water system was a unique solution to the needs of one customer in the industry. It is a combination of components, each of which by itself is in the public domain, but the unified process has afforded a competitive advantage. The competitive advantage was evidenced by the fact that appellant GEO hired appellant Evans to set up the Porocel wash water system at GEO. It is telling that with all the engineering expertise available at GEO, it nevertheless hired Evans, a former Porocel employee, to oversee the installation of the wash water system at GEO, which was almost identical to the unique Porocel wash water system.

The second factor is the extent to which the information is known by employees and others involved in the business. The trial court found, and its finding remains unrebutted, that the specific washing system involved was not generally known by either appellee’s or appellants’ employees. The court further found that there was no testimony that the information was known to others outside the business.

The third factor is the extent of measures taken by appellee to guard the secrecy of the information. The evidence showed that Saforo had entered into a confidentiality agreement with AluChem, which eventually purchased Porocel, and that Evans had entered into one with Porocel, through Englehard Corporation — Porocel being a wholly owned subsidiary of Englehard. Further, while Porocel did not have a confidentiality agreement with Saforo, the evidence is clear that Porocel took sufficient measures to guard the configuration of the washing system since it was only revealed to Evans, who was under a duty to maintain its secrecy under his confidentiality agreement with Porocel through Englehard, regardless of whether he had signed a confidentiality agreement with AluChem. In an attempt to prove that Porocel’s measures to guard the secrecy of the configuration were inadequate, it was argued by appellants that Ron Bell’s sketch design of the Porocel wash water system had been shown to Saforo; however, when questioned regarding the subject, Mr. Saforo testified that he had never before seen the sketch.

Mike Sharp of Porocel described the measures taken by Porocel to maintain the secrecy of its wash water system:

1) Secrecy agreement between Saforo and AluChem;
2) Secrecy agreement between AluChem and Englehard;
3) Secrecy agreements signed by all Porocel employees when Englehard owned Porocel;
4) Secrecy agreements signed by all Porocel employees after acquisition by the AluChem owners; and
5) Secrecy agreements as a condition of employment for all new Porocel hires.

The Arkansas Trade Secrets Act requires reasonable measures to maintain secrecy. We hold that appellee employed reasonable measures to guard the configuration of the washing system.

The fourth factor is the value of the information to appellee and to its competitors. The apparent value of the Porocel wash water system was its efficiency and inexpensive installation. The testimony revealed that the cost of installing Porocel’s system was approximately $17,000.00, whereas, an alternative system of vacuum filtration would have cost approximately $200,000.00 to install. Even William Evans admitted that he saved GEO thousands of dollars and weeks of installation time by installing Porocel’s wash water system at GEO. Obviously, the information of Porocel’s system was valuable to Porocel and to its competitors.

The fifth factor is the amount of effort or money expended by appellee in developing the information. The record indicated that Ron Bell, the chemical engineer employed by Porocel’s eventual owner, AluChem, spent weeks considering the solution to the engineering problem presented by the washing step in the processing of Saforo’s Bayer Scale. Although there was testimony that Mr. Bell sketched the system in a relatively short period of time, it was obviously his intellectual effort that gave Porocel a competitive advantage, since the other experts who testified said they had never before seen a wash water system such as the one designed by Bell.

The sixth and final factor is the ease or difficulty with which the information could be properly acquired or duplicated by others. The trial court found:

[Appellants] rely on the testimony of Mr. Saforo and Dr. Albers [the Baltimore “batch” washer] to assert that the Porocel system is not unique. However, the [c]ourt does not find their testimony in this regard as credible. Therefore, the [c]ourt finds that while the component parts of the system are in the public domain, the system’s configuration is not.

We have held many times that this Court will defer to the trial court’s evaluation of the credibility of the witnesses. Ark. R. Civ. P. 52(a); Crawford v. Dep’t. of Human Services, 330 Ark. 152, 951 S.W.2d 310 (1997). Further, no evidence was introduced at the final hearing to change this finding. No witness testified that he had ever seen Bayer Scale washed in the fashion of Porocel’s wash water system.

As stated in L. M. Rabinowitz & Co., Inc. v. Dasher, 82 N.Y.S.2d 431 (1948), cited by appellee, “[I]t is easy for the [appellants’] experts to point to various parts of [appellee’s] machines which may now be in the public domain and having seen and examined the [appellee’s] machines, to state that they could have been constructed by a skilled mechanic who knew the ‘prior art.’” Still, the fact remains that no one except Porocel came up with the design at issue; further, GEO hired a former Porocel employee with confidentiality obligations to duplicate the system at GEO.

In sum, we hold that substantial and credible evidence exists to support the trial court’s finding that the appellee’s wash water system constitutes a trade secret. Applying our holding in the case of Allen v. Johar, Inc., 308 Ark. 45, 823 S.W.2d 824 (1992), to the present case helps clarify the issue. In Allen, we held that where tours of the building were not allowed and evidence showed that it was a very competitive business because there were a limited number of companies involved, the appellate court could not say that the chancellor was clearly erroneous in finding that Johar’s production machines were protected under the Arkansas Trade Secret Law. When applying the Allen holding to the facts present in the case at bar, it is clear that Porocel’s system was also protected under the Arkansas Trade Secret Law. Therefore, we affirm the trial court on this point.

II. Whether appellants willfully misappropriated the trade secret.

The trial court held Porocel was entided to an attorney’s fee of $15,000.00 under Ark. Code Ann. § 4-75-607 (Repl. 1996) because appellants willfully misappropriated Porocel’s trade secret. The trial court held that Porocel should bear some of its own fee due to the “lax manner of handling its affairs.” This referred to Porocel’s contract claim for unpaid processing fees and the lack of a definitive agreement on price.

We agree with the trial court and hold that from the record, it is clear that substantial and credible evidence exists to support the trial court’s finding of willful misappropriation. First, appellant Evans was Porocel’s former plant manager who implemented the Porocel wash water system, and although he had signed a confidentiality agreement which obligated him to maintain secrecy of the Porocel wash water system after his employment with Porocel was terminated, he nonetheless became Saforo’s “consultant” to help Saforo find a new processor, without alerting Porocel.

Appellants GEO and Saforo knew that Evans was implementing the Porocel wash water system at GEO. They claim that they did not believe Porocel’s system was a trade secret. However, GEO required that Saforo indemnify it for any liability it may incur for theft of trade secrets in the processing of Saforo’s Bayer Scale. The existence of the indemnity agreement is a clear indication that appellants at least contemplated the existence of a trade secret and the possible misappropriation thereof.

In sum, the evidence is overwhelming that Evans was specifically hired by Saforo to implement the Porocel wash water system at GEO because Evans knew all about the system and GEO would charge Saforo less for the toll processing, thereby benefit-ting each of the appellants in one way or another. Each appellant was a willing participant because each had something to gain from the misappropriation of Porocel’s trade secret. Therefore, we affirm the trial court on this point, as well.

III. Appellee’s damages sustained as a result of the misappropriation of the trade secret.

Appellants’ third argument challenges the award of damages to Porocel for the misappropriation of its trade secret. While noting that there is no Arkansas law on the appropriate calculation of such damages, appellants contend that the award is in error because the trial judge erroneously commingled damage theories based on plaintiff s lost profits and defendant’s gain.

Appellants had submitted to the trial court a measure that would be based on the calculation of the profits earned by a defendant as a result of the misappropriation. They argue here that the trial court should have based the award on their profits, and that such a calculation is preferred in a majority of jurisdictions who have entertained the question. Appellants claim that calculating damages based upon the defendant’s actual profits is the most reasonable method available and serves the purpose of preventing unjust enrichment. Appellee recognizes that the trial judge did not follow either party’s theory to calculate damages, yet contends that the method used by the trial court was not clearly erroneous. Still, appellee points to authority which holds that a plaintiffs lost profits is an appropriate measure of damages in a trade-secret-misappropriation case. See, i.e., Sperry Rand Corporation v. A-T-O, Inc., 447 F.2d 1387 (4th Cir. 1971). Appellee asserts that it would be denied a full recovery if damages for misappropriation of a trade secret were to be calculated simply on a defendant’s profit-margin basis.

The resolution of this issue is one of first impression and requires the application of this Court’s rules on statutory construction to Ark. Code Ann. § 4-75-606 (Repl. 1996), which states as follows:

(a) In addition to or in lieu of injunctive relief, a complainant may recover damages for the actual loss caused by misappropriation.
(b) A complainant also may recover for the unjust enrichment caused by misappropriation that is not taken into account in computing damages for actual loss.

Recendy, we set out rules of statutory interpretation in the case of State v. R & A Investment Co., 336 Ark. 289, 985 S.W.2d 299 (1999). In R & A Investment Company, we explained that the basic rule of statutory construction, to which all other interpretive guides must yield, is to give effect to the intent of the legislature. When a statute is clear, it is given its plain meaning, and we will not search for legislative intent; rather, that intent must be gathered from the plain meaning of the language used. Id. We further stated that we are hesitant to interpret a legislative act in a manner contrary to its express language unless it is clear that a drafting error or omission has circumvented legislative intent. In interpreting a statute and attempting to construe legislative intent, we look to the language of the statute, the subject matter, the object to be accomplished, the purpose to be served, the remedy provided, the legislative history, and other appropriate means that throw light on the subject. Id.

From the plain language of the statute, it is apparent that the General Assembly has provided for recovery of a complainant’s “actual loss.” It is further clear that a complainant may also recover any unjust enrichment of the defendant caused by the misappropriation. The problem with this provision is that there is no guidance as to what the General Assembly meant by “actual loss.” “Actual loss” could mean the complainant’s lost profits, as appellee suggests, or the term could be construed to mean a defendant’s profits, since the complainant may also recover for unjust enrichment of the defendant that is “not taken into account in computing damages for actual loss.” Therefore, we hold that the language of § 4-75-606 is ambiguous, and that guidance from other sources is necessary.

One compelling source on the subject is the American Law Reports Annotation of the proper measure and elements of damages for misappropriation of trade secrets. See, Michael A. Rosenhouse, Damages Misappropriation of Trade Secret, 11 A.L.R. 4th 12. The annotation collects and discusses state and federal cases in which courts from other jurisdictions have considered the measure and elements of recovery for misappropriation of a trade secret. 11 A.L.R. 4th at 19. Rosenhouse writes that in determining the proper measure of damages in a misappropriation case, the first inquiry of the courts generally has been whether there is any factual basis, such as a royalty agreement or an offer and a counteroffer in anticipation thereof, from which one might legitimately determine the value which the parties themselves actually assigned to the misappropriated information. If there is such an agreement, the court should then look to its terms in setting the complainant’s damages. 11 A.L.R. 4th at 20.

On the other hand, where there is a lack of such proof indicating what the parties thought the trade secret was worth, courts are then guided by what the plaintiff has proved — whether that be the plaintiffs lost profits or an accounting for the defendant’s profits. According to Rosenhouse, both measures have been deemed acceptable in general, and some jurisdictions hold that a complainant may recover either his own lost profits or the defendant’s profits, whichever affords the greater recovery. With this we agree.

Regardless of which calculation affords the greater recovery to appellee in this case, it is clear that the trial court erred in its calculation because it based the measure of damages on a hybrid calculation not contemplated by the language of § 4-75-606. Even the appellee admits that the trial court used both its estimated price per ton for processing the Bayer Scale, as well as GEO’s number of tons of scale it actually processed from December 10, 1996, to the date of the temporary injunction on March 31, 1997, to arrive at the damage award.

While it is difficult to fault the trial court, based on the lack of Arkansas authority in this area as well as the ambiguous controlling statute, there is ample guidance from other jurisdictions that the damages are to be calculated by either the plaintiff s lost profits or the defendant’s gain, but not a combination of the two. For this reason, we hold that the trial court’s damage award for misappropriation of the trade secret was in error, and reverse and remand the case on this point with instruction to the trial court to modify the award according to the rule adopted by this Court that a complainant may recover either his own lost profits or the defendant’s profits, whichever affords the greater recovery.

IV. Damages owed by appellant Saforo & Associates, Inc., for breach of an implied contract.

Count II of Porocel’s original complaint was a breach-of-contract claim solely against Saforo. Porocel sought damages based upon a claim that there was an express contract whereby Saforo agreed to pay a processing fee of $490 per ton. The trial court found that there was no express contract but acknowledged that Porocel was entitled to recover its costs under an implied contract and that the proof indicated the variable costs incurred by Porocel to be approximately $241 per ton for processing the Bayer Scale. The court found “Porocel is entitled to $250 per ton for the 254 tons. Porocel is entitled to recover of and from Saforo the sum of $63,500.”

Appellant Saforo contends that while the trial court was correct in its finding that Porocel was limited to recovery under an implied contract and that the costs were $241 per ton, it clearly erred in its conclusion that Porocel was entitled to $63,500. Appellant Saforo & Associates asserts that it should be given credit for payments totaling $80,092.91, which would leave an amount of only $12,022.92 owing to Porocel.

Again, chancery cases are reviewed de novo on the record, but we do not reverse a finding of fact by the chancellor unless it is clearly erroneous. Slaton v. Slaton, supra. A finding is clearly erroneous when, although there is evidence to support it, the reviewing court on the entire evidence is left with a definite and firm conviction that a mistake has been committed. Id.; RAD-Razorback Ltd. Partnership v. B.G. Coney Co., supra.

Appellant Saforo fails to make a compelling argument to support its contention. Appellant Saforo references several invoice numbers and exhibits to purportedly demonstrate that when the proper tonnage is applied to the court’s determination of a fair price of $250 per ton, it would only owe $12,022.92. However, appellant Saforo’s argument, when compared to the exhibit showing its payment history with attached checks, fails to prove that it was entitled to an $80,092.91 credit. Therefore, when applying our standard of review to appellant Saforo’s assertion, we cannot say that the trial court erred. We, therefore, affirm the trial court on this point.

For all of the foregoing reasons, we hereby affirm the trial court on points one, two, and four above, but reverse and remand the case on point three, that being the measure of damages regarding the misappropriation of a trade secret, with instruction to the trial court to modify the award according to the rule adopted by this Court that a complainant may recover either his own lost profits or the defendant’s profits, whichever affords the greater recovery.

Affirmed in part; reversed and remanded in part.

Thornton and Smith, JJ., dissent.

Ray Thornton, Justice,

dissenting. I respectfully dissent from the majority in this case on the grounds that appellees failed to satisfy the requirements of the factors articulated in Vigoro Industries, Inc. v. Cleveland Chemical Co. of Arkansas, Inc., 866 F. Supp. 1150 (E.D. Ark. 1994), and I would hold that the trial court’s finding that appellee’s wash water system constituted a trade secret under Ark. Code Ann. § 4-75-601 was clearly erroneous.

The trial court and the majority rely upon secrecy agreements between Saforo and AluChem, between AluChem and Englehard, and confidentiality agreements signed by Porocel employees with first Engjehard and later AluChem. However, the wash-water system was designed by Mr. Ron Bell, a chemical engineer who was a part owner of AluChem. As stated by counsel for appellee, Mr. Bell was the owner of whatever trade secrets were incorporated in his design. At the time he completed the wash-water design and sent it to Bill Evans, an employee of Porocel, in February of 1996, Mr. Bell had not consummated any relationship with Mr. Evans or with Porocel. The requirement of maintaining the secrecy of a trade secret was discussed in Ruckelshaus v. Monsanto, 467 U.S. 986 (1983), when the Supreme Court stated: “If an individual discloses his trade secret to others who are under no obligation to protect the confidentiality of the information, or otherwise publicly discloses the secret, his property right is extinguished.” Id.

At the time of the disclosure, there was only the anticipation of the relationship between AluChem and Porocel. That relationship did not develop until May 7, 1997, several months after the design was disclosed, and during which interval Porocel built the machine and produced Bayer Scale using the design. There is no evidence to support a finding that a confidentiality agreement existed between Mr. Bell and Porocel in February. The majority is willing to bootstrap a later purchase of the corporate entity to create a confidential relationship that simply did not exist at the time the disclosure was made. The only support for the majority’s leap of faith was Mr. Bell’s testimony that he believed there was a confidentiality agreement in place and that, while he never designated his sketch as “confidential,” he intended it to be proprietary. In my view, this subjective test of what Mr. Bell believed is insufficient to convey trade-secrecy protection upon the wash-water system, in light of Arkansas law which requires that those who claim the protection must take reasonable measures to maintain their secrecy.

In oral arguments, counsel for Porocel conceded that Mr. Bell was the original owner of the trade secret, and that he had given away his trade secret in the hope that he could sometime later acquire Porocel. Counsel further agreed that if the acquisition did not go through, Bell would have lost any protection for the wash-water system as a trade secret. Once the trade secret was destroyed by disclosure, it entered the public domain. Even if it had been a unique solution to the needs of one customer, it was not modified or redesigned by Porocel. There is no showing that Porocel added any concepts to the design. No new trade secret came into existence, but only Mr. Bell’s design, which had already entered the public domain, was utilized by Porocel. No argument was made by Porocel that after a trade secret is destroyed by disclosure, it can be brought back into existence by purchasing the company to which it was disclosed. Mr. Bell did not take appropriate measures to protect his trade secret, and when it was disclosed, it ceased to be a trade secret. “With respect to a trade secret, the right to exclude others is central to the very definition of the property interest. Once the data that constitute a trade secret are disclosed to others, or others are allowed to use those data, the holder of the trade secret has lost his property interest in the data.” Ruckelshaus, supra.

This clearly does not meet the Vigoro test of making reasonable efforts to maintain its secrecy. As a matter of interest, during the time after Mr. Bell’s trade secret had been terminated by its disclosure to Porocel, and before Mr. Bell’s purchase of Porocel, Porocel built the wash-water machine, installed it, and commenced selling the product to Saforo. It was not until May 7, 1997 that Bell consummated the purchase of the facilities under the name of Porocel, and, as appellees conceded at oral arguments, if that purchase had not been completed, Bell would have lost any claim of a trade secret. I dissent because, as I read the law, there were no appropriate measures taken to guard the secrecy of the wash-water system; therefore, appellees should be denied the protection of the trade-secrecy laws.

I am authorized to state that Justice Smith joins in this dissent.


author: Tom Glaze, Justice.

text:
    Craig SUNESON v. HOLLOWAY CONSTRUCTION COMPANY, APAC-Arkansas, Inc., McClinton-Anchor Division and Highway Valets, Inc.
    98-846
    992 S.W.2d 79
    Supreme Court of Arkansas
    Opinion delivered May 27, 1999

      Dewey Moore, for appellant.

      Friday, EUredge & Clark, by: Donald H. Bacon, , for appellee Holloway Construction Company.

      Davis, Cox & Wright PLC, by: Constance G. Clark and Don A. Taylor, for appellee APAC-Arkansas, Inc., McClinton-Anchor Division.

      Anderson, Murphy & Hopkins, L.L.P., by: Overton S. Anderson and Scott D. Provencher, for appellee Highway Valets, Inc.
   Tom Glaze, Justice.

This appeal is a tort case involving a legal principle of major importance called the “accepted-work doctrine.” One of Craig Suneson’s points for reversal is that the doctrine is outdated and that this court should repudiate it. Our court has jurisdiction of this appeal under Ark. Sup. Ct. R. 1-2(b)(5).

The facts leading to Suneson’s accident and injuries and to the filing of this case are largely undisputed. At approximately 5:40 a.m. on February 24, 1992, Suneson was driving a tractor-trailer north on Highway 71 near Bentonville in heavy fog. He was driving in the outside lane, using the solid white outside line as a guide when he found himself in exit lane 72. Because he believed he could not return safely to the main highway, Suneson stayed in the exit ramp which was on an incline and curve. His truck overturned, and Suneson suffered a broken neck, rendering him a quadriplegic.

In February 1995, Suneson filed suit against three defendant contractors, Holloway Construction Company (Holloway); APAC-Arkansas, Inc., McClinton-Anchor Division (APAC); and Highway Valets, Inc. (Valets), alleging each of them was negligent in causing latent and hazardous defects at the exit 72 ramp where Suneson’s truck overturned. Holloway and APAC each had a contract with the Arkansas Highway and Transportation Department (AHTD) to perform construction work on the exit 72 ramp. Holloway was granted a contract for project R90045 for the grading and structure portion completing Highway 71, and APAC received the contract for project R90071 for the base and surfacing, which included the pavement markings and markers. Holloway also did some surfacing work on exit ramp 72. Valets had a subcontract with APAC to perform certain striping and marking work. Suneson alleged that Holloway negligently failed to construct the exit curve as required by the plans and specifications, that APAC negligently constructed the base and surfacing portion of the exit curve, and that Valets negligently failed to place markings on the roadway at exit 72 as required by the Manual of Uniform Traffic Control Devices (MUTCD). The MUTCD was a part of the contract specifications. Suneson asserted the negligence of these defendant-contractors resulted in defects that proximately caused him not to be placed on notice of the approaching exit and caused him to drive his loaded tractor-trailer into the exit curve.

Valets filed a summary judgment motion asserting that the AHTD had accepted its work prior to Suneson’s accident and that under the “accepted-work doctrine,” it bore no liability to third parties for the condition of its work once the work was turned over to and accepted by the AHTD. Holloway and APAC joined in Valets’ motion. Suneson filed a response, asserting the accepted-work doctrine should be repudiated, but if the doctrine is not overruled, the contractors’ work had not been accepted by the AHTD under the terms of the parties’ contracts. Suneson further claimed that, even if the accepted-work doctrine was applied, the contractors’ work left the exit 72 ramp in a defective condition which was imminendy dangerous or contained latent defects — two recognized exceptions to the doctrine.

After a hearing, the trial court granted summary judgment in favor of the contractors, Holloway, APAC, and Valets. Suneson brings this appeal, raising the the same issues he argued at trial. However, if this court agrees with Suneson that the court should abandon the accepted-work doctrine, Suneson’s other arguments need not be addressed. Thus, we will first consider whether to repudiate the doctrine.

Suneson initially emphasizes that the doctrine has its roots in an 1842 English case called Winterbottom v. Wright, 152 Eng. Rep. 402 (Ex. 1842), wherein a negligent contractor was shielded from liability for a third party’s injuries because the contractor and third party were not in privity of contract. Suneson cites an early Connecticut case, Howard v. Redden, 93 Conn. 604, 107 A. 509 (1919), as typical of the early cases involving builders or contractors adhering to the Winterbottom rationale. In Howard, the court adopted a rule of proximate cause, holding that a contractor was not liable to a passerby injured when struck by a faulty cornice built by the contractor. The Howard court stated that the plaintiff’s injury, which occurred after the contractor had completed the work, was due solely to the owner’s failure to inspect and guard against the cornice’s deterioration. The Connecticut court noted that although the contractor remained Hable through privity after completion and acceptance of the work, the contractor’s liability did not extend to third persons. The Howard court recognized the following three reasons supporting the accepted-work doctrine:

(1) The Winterbottom decision and its application of the doctrine of privity to cases in negligence;
(2) The owner alone was in control of the entity when the injury occurred; and
(3) The presumption that the owner had carefully inspected the work and knew of its defect before accepting. See also Minton v. Krish, 34 Conn. App. 361, 642 A.2d 18 (1994).

In 1977, the Connecticut Supreme Court in Coburn v. Lenox Homes, Inc., 173 Conn. 567, 378 A.2d 599 (1977), reversed its earlier Howard decision and concluded that a contractor could be liable to an injured third party even though the contractor’s negligent work had been completed and the owner had accepted it. In doing so, the Connecticut court recognized the revolution in the law of negligence sparked by MacPherson v. Buick Motor Co., 217 N.Y. 382, 111 N.E. 1050 (1916), and the fact that the MacPherson decision marked the demise of the privity-of-contract requirement in products cases and established the rule that a seller of a product is Hable for neghgence that may foreseeably injure another. Coburn, 378 A.2d at 602. The Coburn court further impHcitly rejected the control theory and the theory of knowledge and acceptance the Howard court had previously used when applying the accepted-work rule. See also Minton, 642 A.2d at 21.

The Minton court, in explaining Connecticut’s decisions departing from the accepted-work doctrine, stated as follows:

In rejecting the “completed and accepted” rule, our courts join the majority of jurisdictions. W. Prosser & W. Keeton, supra, § 104A; annot., 58 A.L.R.2d 891 (1958) (listing jurisdictions that have rejected the rule). We conclude that the “completed and accepted” rule has been repudiated in Connecticut and replaced with the rule of foreseeability as expressed in 2 Restatement (Second), Torts (1965) § 385: “One who on behalf of the possessor of land erects a structure or creates any other condition thereon is subject to liability to others upon or outside of the land for physical harm caused to them by the dangerous character of the structure or condition after his work has been accepted by the possessor, under the same rules as those determining the liability of one who as manufacturer or independent contractor makes a chattel for the use of others.”

Minton, 642 A.2d at 21.

Suneson cites cases from other jurisdictions that have repudiated the accepted-work doctrine. See Saylor v. Hall, 497 S.W.2d 218 (Ky. 1973); McDonough v. Whalen, 313 N.E.2d 435 (Mass. 1974); Krisovich v. Booth, 181 Pa. Super. 5, 121 A.2d 890 (1956); Johnson v. Oman Const. Co., 519 S.W.2d 782 (Tenn. 1975); Strakos v. Gehring, 360 S.W.2d 787 (Tex. 1962); see also Thompson v. Coats, 547 P.2d 92 (Or. 1976); Hunt v. Blasins, 384 N.E.2d 368 (Ill. 1979); Totten v. Gruzen, 52 N.J. 202, 245 A.2d 1 (1968); Russell v. Arthur Whitcomb, Inc., 121 A.2d 781 (N.H. 1956); Pierce v. ALSC Architects, P.S., 890 P.2d 1254 (Mont. 1995); Lynch v. Norton Constr. Inc., 861 P.2d 1095 (Wyo. 1993); Hanna v. Fletcher, 231 F.2d 469 (D.C. Cir. 1956); Hankins v. Elro Corp., 149 Mich. App. 22, 386 N.W.2d 163 (1986); Pastorelli v. Associated Eng’rs, Inc., 176 F.Supp. 159 (D.R.I. 1959); Kristek v. Catron, 7 Kan. App.2d 495, 644 P.2d 480 (1982); Annotation, Negligence of Building or Construction Contractor as Ground of Liability Upon His Part for Injury or Damage to Third Person Occurring After Completion and Acceptance of the Work, 58 A.L.R.2d 865, 891 (1958 & Supp. 1994 & 1999) (citing cases in other jurisdictions supporting the view that a building or construction contractor is hable for injuries to, or the death of, third persons occurring after the completion of his work and its acceptance by the contractor where the work is reasonably certain to endanger third persons if negligently prepared or constructed). One authoritative treatise states its displeasure with the accepted-work rule in the following way:

In the case of builders and other contractors in construction work, a rule once prevailed that exonerated the contractor for injuries to third persons caused by defective construction but occurring after the employer had accepted the work. This will be recognized as an offspring of the privity rule and the last-wrongdoer rule. Both lines of holdings represent anachronistic and unwarranted exceptions to general negligence principles and are being progressively repudiated by the courts.

5 Harper, James & Gray, The Law of Torts, § 28.10 (2d ed. 1986) (footnotes omitted).

The Texas Supreme Court, in Strakos v. Gehring, abandoned the accepted-work doctrine in 1962 by rejecting the notion that although a contractor is found to have performed negligent work or left the premises in an unsafe condition and such action or negligence is found to be a proximate cause of injury, he must nevertheless be immune from liability solely because his work has been completed and accepted in an unsafe condition. Strakos, 360 S.W.2d at 790. The Texas court further indicated that the doctrine is simple but produces a harsh and unsound approach to the problem. It explained its reasons for rejecting the doctrine as follows:

The retention of the “accepted-work” doctrine would inevitably yield the same unwieldy results as have come about in virtually every other jurisdiction that has formally adhered to the rule. The rule eventually becomes enveloped by complex exceptions to cover such situations as nuisance, hidden danger, and inherently dangerous conditions. The result would be that in each case, after having first decided that there was an acceptance of the work, we would then have to decide issues involving all the various exceptions to the rule and in case any exception were found applicable, the basic issues of negligence and proximate cause would still remain for consideration. We believe that outright rejection of this oft-repudiated and emasculated doctrine would restore both logic and simplicity to the law.

Strakos, 360 S.W.2d at 791.

The Montana Supreme Court in Pierce v. ALSC Architects, P.S., 890 P.2d 1254 (Mont. 1995), offered an additional reason for rejecting the doctrine. There, the court held that the doctrine:

[H]as the undesirable effect of shifting responsibility for negligent acts or omissions from the negligent party to an innocent person who paid for the negligent party’s services . . . based on the legal fiction that by accepting a contractor’s work, the owner of property fully appreciates the nature of any defect or dangerous condition and assumes responsibility for it.

Id. at 1262. The court concluded that in reality the opposite is usually true. Contractors, whether they be building contractors or architects, are hired for their expertise and knowledge. Id.

Some states have retained the accepted-work doctrine, but in doing so, they have added exceptions under which a contractor could remain liable after his work is accepted by the owner. See Easterday v. Masiello, 518 So.2d 260 (Fla. 1988) (contractors continue to be liable for latent defects); Bob v. Scruggs Co., 204 Ga. App. 375, 419 S.E.2d 100 (1992) (contractor not liable unless work constituted nuisance per se, was inherently or intrinsically dangerous, or was so negligently defective as to be imminently dangerous to others); Blake v. Calumet Constr. Co., 674 N.E.2d 167 (Ind. 1996) (contractor remains liable if the work presents imminent injury to third parties); Gast v. Shell Oil Co., 819 S.W.2d 367 (Mo. 1991) (en banc) (while court adheres to doctrine, contractor could still be Hable for hidden defects); Dvorak v. Bunge Corp., 256 Neb. 341, 590 N.W.2d 682 (1999) (applying inherently dangerous and latent defect exceptions); Nelson v. L. & J. Press Corp., 223 N.W.2d 607 (Wis. 1974) (the accepted-work rule does not apply where the defect is not readily observable upon reasonable inspection); Nifong v. C.C. Magnum, Inc., 121 N.C. App. 767, 468 S.E.2d 463 (1996) (applying imminently dangerous exception); Mendez v. Paddock Pool Constr. Co., 172 Ariz. 258, 836 P.2d 968 (Ct. App. 1991) (doctrine applies only when the contractor has no discretion and merely foHows the plans and specifications provided by its employer). In recognizing those states that have retained the doctrine conditioned upon specified exceptions, it is interesting at this point to note the Wyoming Supreme Court’s view on the subject. In Lynch v. Norton Constr. Co., 861 P.2d 1095 (Wyo. 1993), the Wyoming court explained its refusal to adopt the doctrine by pointing out that the “rule of nonfiabifity with its many exceptions is more cumbersome than traditional negligence analysis,” as the exceptions to the rule nearly swallow up the rule. See also W. Page Keeton, et al., Prosser and Keeton on the Law of Torts § 104A (5th ed. 1984) (noting that the exceptions tended to swallow the rule).

Arkansas adopted the accepted-work doctrine when this court first applied the doctrine in the 1910 case of Memphis Asphalt & Paving Co. v. Fleming, 96 Ark. 442 (1910). There the court stated the general rule that after the contractor has turned the work over to and it has been accepted by the proprietor, the contractor incurs no further liability to third parties by reason of the condition of the work, but the responsibility, if any, for maintaining or using it in its defective condition is shifted to the proprietor. Id. at 443-44. In Memphis Asphalt, the contractor had constructed a sidewalk over a branch in an alley for the City of Litde Rock. No guard rails or barriers were erected, and the plaintiff fell off the sidewalk into the branch. The plaintiff then sued and recovered damages in the trial court. On appeal, this court reversed and dismissed the action, holding that the contractor’s liability ceased when the sidewalk improvement had been completed by the contractor, accepted by the engineer of the district, and opened to the public. Id. at 444; see also Southwestern Bell Tel. Co. v. Travelers Indem. Co., 252 Ark. 400, 479 S.W.2d 232 (1972) (recognizing doctrine).

This court has on other occasions recognized the accepted-work doctrine, but in those instances, our court, like the jurisdictions retaining it as set out above, adopted certain exceptions in an attempt to soften the harsh effects of the doctrine. For example, in Canal Construction Co. v. Clem, 163 Ark. 416 (1924), the court stated the general rule that where the contractor turns work over to the owner that is a nuisance per se, imminently dangerous, or contains hidden or concealed defects, the contractor may be found hable to a third party injured as a result of the work even after the owner accepted it. In Reynolds v. Manley, 223 Ark. 314, 265 S.W.2d 714 (1954), the court explicitly acknowledged and considered two exceptions to the doctrine by stating the following:

The courts and authorities in general recognize at least two exceptions to the general rule upon which appellees here rely, namely: (a) Where a defect in construction caused by the negligence of the contractor is so concealed that it could not reasonably be detected on inspection by the proprietor, and; (b) Where the job is turned over by the contractor in a manner so negligently defective as to be imminendy dangerous to third persons.

Id. at 320; see also Milam v. Midland Corp., 282 Ark. 15, 665 S.W.2d 284 (1984) (court found construction was not imminendy dangerous); Chesser v. King, 244 Ark. 1211, 428 S.W.2d 633 (1968) (court applied doctrine, holding no contractor liability because no nuisance per se, imminent danger, or latent defect was shown).

In Reynolds, the plaintiff had been forced to pull his car off the highway and onto a concrete extension slab. At the end of the extension slab, the right wheel of plaintiff s car had gone into a hole or rut, causing him to lose control and to swerve into the path of an oncoming car. As a result of the collision, plaintiffs wife died and the plaintiff and his children were injured. On review, this court determined that neither the imminent danger nor latent defect exception had been proven and, therefore, under the general rule of the accepted-work doctrine, the contractor could not be held liable. In support of its adherence to the general rule of no liability under the doctrine, the Reynolds court reasoned that holding the contractor liable under such a situation would cause contractors to be subjected to potential liabilities so great as to deter them from undertaking such work, or would force them to demand such exorbitant prices as to make further road construction impossible, and render it questionable as to the point in time such liability would cease. Id. at 323.

In the case of Sproles v. Associated Brigham Contractors, Inc., 319 Ark. 94, 889 S.W.2d 740 (1994), we acknowledged the forceful authority in support of abandoning the accepted-work doctrine. Sproles, 319 Ark. at 98 (citing Restatement (Second) of Torts § 385 (1965); W. Page Keeton, et al., Prosser and Keeton on the Law of Torts § 104A (5th ed. 1984); McDonough v. Whalen, 365 Mass. 506, 313 N.E.2d 435 (1974); Johnson v. Oman Const. Co., 519 S.W.2d 782 (Tenn. 1975); Kristek v. Catron, 1 Kan. App.2d 495, 644 P.2d 480 (1982); Nichols v. Corntassel, 852 P.2d 583 (Mont. 1993)). We also announced a willingness to reexamine the doctrine, although the court added that no inference should be drawn from such an invitation.

As previously mentioned, the accepted-work doctrine is based on a privity of contract theory, which is a concept that has become virtually extinct in American jurisprudence, at least to the extent privity had been recognized earlier in the product-liability context. Citing the Winterbottom and MacPherson cases, our court in Chapman Chemical Co. v. Taylor, 215 Ark. 630, 222 S.W.2d 820 (1949), adopted the doctrine of manufacturers’s liability based upon foreseeability rather than privity of contract. See also Ark. Code Ann. § 4-86-101 (Repl. 1996) (General Assembly statutorily provided that the lack of privity between plaintiff and defendant shall be no defense in any action brought against the manufacturer or seller of goods to recover damages for breach of warranty, express or implied, or for negligence).

During oral argument, appellees urged that the foreseeability and negligence rules applicable in a products liability case should not be controlling in an owner-contractor situation. They assert that, in a products case, a manufacturer has the ability to recall the defective products, but in the owner-contractor situation, once an owner takes control of the work or improvement, the contractor, unless he has the owner’s permission, cannot correct a defect or negligent work condition. The treatise, The Law of Torts, discusses similar distinctions in these two situations and addresses them in the following way:

The manufacturer makes standard goods and develops standard processes. Defects are harder to find in the contractor’s special jobs. Again, the owner usually gives more thorough inspection to a building or structure than a vendee gives to a chattel. And a longer time may elapse between construction and injury in the contractor’s case with the consequently greater opportunity for intervening factors to play a part. These considerations, however, go to the question of negligence and should be treated simply as problems of proof in individual cases. They should not be erected into a rule of thumb. And the modern tendency has been to measure the scope of duty here by the same broad principies of negligence as are generally applied in the field of accidental injuries.

5 Harper, James & Gray, The Law of Torts § 18.5 (2d ed. 1986) (footnotes omitted). Appellees in the instant case tend to rely heavily on the possibility that an owner, such as the AHTD, could exercise control over the improvement to exclude a contractor from correcting a negligent condition that the contractor belatedly discovered. Of course, any such refusal could well be argued and considered an intervening proximate cause when applying applicable negligence principles, and such a scenario offers little logic for the doctrine’s retention. AMI Civil 3d, 503 (1989).

In conclusion, as noted above, the accepted-work rule has been thoroughly criticized as anachronistic and has provided unwarranted exceptions to general negligence principles. It has been said to have provided harsh results and many exceptions have been adopted to ameliorate such harshness. In our recent decision in Shannon v. Wilson, 329 Ark. 143, 947 S.W.2d 349 (1997), we stated that, when a judicially created rule becomes outmoded or unjust in its application, it is appropriate for the judiciary to modify it. Id. at 151; see also Nelson v. Timberline Int'l, Inc., 332 Ark. 165, 964 S.W.2d 357 (1998). From our review of the substantial legal authority on the subject, we believe the better-reasoned view is that the accepted-work doctrine is both outmoded and often unnecessarily unfair in its application. We believe it would be a mistake to continue to apply a doctrine based upon privity of contract when the third party’s injury is foreseeable.

For the reasons above, we reverse and remand.

Special Associate Justice Searcy Harrell joins this opinion; Smith, J., dissents; Brown, J., not participating.

       U.S. Fire Insurance Company subsequently filed a complaint in intervention, alleging it had accepted liability for Suneson’s injury under its workers’ compensation policy. U.S. Fire asserted that it had paid $600,000 in workers’ compensation benefits and medical bills, and it was entided to recover such payments from any money recovered in this suit.

       Suneson presumably filed no complaint against the State or AHTD because of the State’s sovereign immunity in such matters. See Ark. Const. art. 5, § 20; see also Austin v. Arkansas State Highway Comm’n, 320 Ark. 292, 895 S.W.2d 941 (1995).


author: Donald L. Corbin, Justice.

text:
    Jerry E. SMITH v. Shana Benson Crumley SMITH
    97-1165
    990 S.W.2d 550
    Supreme Court of Arkansas
    Opinion delivered May 27, 1999

      Compton, Prewett, Thomas & Hickey, P.A., by: William I. Prewett, for appellant.

      Ronald L. Griggs, for appellee.
   Donald L. Corbin, Justice.

Appellant Jerry E. Smith appeals the judgment of the Union County Chancery Court awarding Appellee Shana Benson Crumley Smith custody of the parties’ child and ordering Appellant to pay child support in the amount of $390 per week. This case was certified to us from the Arkansas Court of Appeals for resolution of two issues: (1) whether the order appealed from is final, and (2) whether the chancellor abused his discretion in awarding the amount of child support provided in the Family Support Chart. Our jurisdiction is pursuant to Ark. Sup. Ct. R. 1-2(b)(1), (5), and (6). We conclude that the order appealed from is not final, and we dismiss.

The record reflects that Jerry and Shana were married on December 2, 1995, and separated in April 1996. Jerry filed for divorce on April 4, 1996. One child, Savana, was born of the marriage on October 30, 1996. Jerry filed a motion requesting blood tests to confirm that he was the child’s father. The chancellor granted Jerry’s motion during the hearing on January 6, 1997. The divorce decree, entered on March 4, 1997, reflects in pertinent part:

The plaintiff has requested a blood test to confirm paternity and the parties have agreed that this will be done at the expense of the plaintiff. Until the blood test has been completed, Savana is presumed to be the child of these parties.
The parties are ordered to cooperate in procedures for a blood test to determine the paternity of the child which will be at the expense of the plaintiff. The Court retains jurisdiction for appropriate orders if the parties are unable to agree. [Emphasis added.]

The results of the blood tests are not contained in the record, and no subsequent order was entered by the chancellor resolving the issue of paternity. Thus, the first issue we must consider is whether the March 4, 1997 decree is a final, appealable order.

Rule 2(a)(1) of the Appellate Rules of Procedure — Civil provides that an appeal may be taken from a final judgment or decree entered by the trial court. When the order appealed from is not final, this court will not decide the merits of the appeal. Arkansas Dep’t of Human Servs. v. Lopez, 302 Ark. 154, 787 S.W.2d 686 (1990). Whether a final judgment, decree, or order exists is a jurisdictional issue that we have the duty to raise, even if the parties do not, in order to avoid piecemeal litigation. Id. For a judgment to be final, it must dismiss the parties from the court, discharge them from the action, or conclude their rights to the subject matter in controversy. Id. Thus, the order must put the trial court’s directive into execution, ending the litigation, or a separable branch of it. K.W. v. State, 327 Ark. 205, 937 S.W.2d 658 (1997). Where the order appealed from reflects that further proceedings are pending, which do not involve merely collateral matters, the order is not final. Id. This court has consistently recognized that an order directing the parties to obtain blood tests to determine paternity of a child is not a final order. See Scheland v. Chilldres, 313 Ark. 165, 852 S.W.2d 791 (1993); Helton v. Arkansas Dep’t of Human Servs., 309 Ark. 268, 828 S.W.2d 842 (1992); Lopez, 302 Ark. 154, 787 S.W.2d 686.

Clearly, the order appealed from here is not final in that it leaves open the issue of the child’s paternity. Pending entry of a final order declaring the results of the blood tests and resolving the issue of paternity, this court lacks jurisdiction to hear the appeal. It is of no consequence that both parties have orally stated, during argument before this court and the court of appeals, that Jerry is the child’s father, as such statements are not evidence and are merely tantamount to a stipulation or consent to this court’s jurisdiction. This court has repeatedly stated that it will not consider matters not contained in the record. See, eg., Black v. Van Steenwyk, 333 Ark. 629, 970 S.W.2d 280 (1998); Boswell, Tucker & Brewster v. Shirron, 324 Ark. 276, 921 S.W.2d 580 (1996); Craig v. Traylor, 323 Ark. 363, 915 S.W.2d 257 (1996).

It is true that the law has created a presumption that a child conceived or born of the marriage is the legitimate child of the parties. See, e.g., Thomas v. Pacheco, 293 Ark. 564, 740 S.W.2d 123 (1987). In this case, however, where the issue of paternity was raised in the trial court, that presumption will not suffice to turn an otherwise nonappealable order into a final judgment under Rule 2. In short, because the issue of paternity was raised, it must now be resolved before an appeal may be taken. Accordingly, we must dismiss the appeal.


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

text:
    Willie WELLS III v. STATE of ARKANSAS
    CR 98-909
    990 S.W.2d 114
    Supreme Court of Arkansas
    Opinion delivered May 27, 1999

      Bart Ziegenhorn, for appellant.

      Winston Bryant, Att’y Gen., by: Brad Newman, Ass’t Att’y Gen., for appellee.
   Donald L. Corbin, Justice.

Appellant Willie Wells III appeals the judgment of the Crittenden County Circuit Court revoking his probation and sentencing him to ten years’ imprisonment. This case was certified to us from the Arkansas Court of Appeals, as it requires our resolution of conflicting statutes establishing time limits for periods that a defendant may be placed on probation; hence, our jurisdiction is pursuant to Ark. Sup. Ct. R. 1-2(b)(6). For reversal, Appellant argues that he was illegally sentenced to ten years’ probation in violation of Ark. Code Ann. § 16-93-401 (1987) (repealed 1991), which limited sentences of probation to a period not in excess of five years. Thus, he contends that the trial court lacked authority to revoke his probation some nine years after he was sentenced. In contrast to section 16-93-401, Ark. Code Ann. § 5-4-306(a) (Repl. 1997), which was also in effect at the time Appellant was sentenced, limited the period of probation to the maximum jail or prison sentence allowable for the offense charged. We conclude that section 16-93-401 controls, and we reverse.

A brief history of the relevant statutory provisions is helpful, to an understanding of the issue presented. In 1973, the General Assembly passed Act 818, establishing Ark. Stat. Ann. § 43-2331. Act 818 specifically provided that “[t]he period of probation, together with any extension thereof, shall not exceed five (5) years.” Two years later, the legislature passed Act 280 of 1975, which adopted the Arkansas Criminal Code, effective January 1, 1976. Section 1205 of Act 280, later codified at Ark. Stat. Ann. § 41-1205, also provided that the period of probation for committing a felony shall be for a definite period of time, not to exceed five years. Thus, as of January 1, 1976, both sections 41-1205 and 43-2331 limited terms of probation to a maximum of five years. In 1977, however, the legislature passed Act 772, amending section 41-1205 to reflect that the period of probation “shall be for a definite period of time not to exceed the maximum jail or prison sentence allowable for the offense charged.” Thus, with the 1977 amendment of section 41-1205, a conflict arose between it and section 43-2331.

In 1980, this court decided the case of Culpepper v. State, 268 Ark. 263, 595 S.W.2d 220 (1980), which held that section 43-2331 was impliedly repealed by the sentencing provisions of the Criminal Code, insofar as it conflicted with those provisions, specifically as it authorized trial courts to suspend execution of a sentence, as opposed to imposition of a sentence. One year later, the legislature passed Act 620 of 1981, amending section 43-2331 to prohibit courts from suspending execution of a defendant’s sentence; however, the legislature retained the provision that limited the period of probation to five years. With the passage of the current Arkansas Code Annotated in 1987, section 43-2331 was codified as section 16-93-401, and section 41-1205 was codified as section 5-4-306. Finally, in Act 586 of 1991, the General Assembly repealed altogether section 16-93-401.

The record in this case reflects that on April 3, 1989, Appellant pled guilty to the offense of possession of a controlled substance with intent to deliver it and was sentenced to ten years’ probation. At that time, both sections 5-4-306 and 16-93-401 were in effect. The trial court revoked Appellant’s probation on February 26, 1998, nearly nine years later. Appellant argues that his sentence was illegal because he was given more than five years’ probation, in violation of section 16-93-401. We agree.

It is well settled that statutes relating to the same subject should be read in a harmonious manner if possible. Johnson v. State, 331 Ark. 421, 961 S.W.2d 764 (1998); Reed v. State, 330 Ark. 645, 957 S.W.2d 174 (1997). All legislative acts relating to the same subject are said to be in pari materia and must be construed together and made to stand if they are capable of being reconciled. Id. In construing two acts on the same subject, we first must presume that when the General Assembly passed the later act, it was well aware of the prior act and did not intend to pass an act without purpose. Id. Furthermore, the General Assembly is presumed to have enacted a law with the full knowledge of court decisions on the subject and with reference to those decisions. Id. Thus, where two legislative acts relating to the same subject are in conflict with each other, the later act controls. Kyle v. State, 312 Ark. 274, 849 S.W.2d 935 (1993).

Here, the legislature was obviously aware of this court’s decision in Culpepper, 268 Ark. 263, 595 S.W.2d 220, when it reenacted section 43-2331 in 1981, as the section was changed to reflect that trial courts no longer had authority to suspend the execution of sentences. Thus, we may presume without hesitation that when the legislature reenacted section 43-2331 with the five-year limitation on periods of probation, it was well aware of the Culpepper decision and the existence of the conflicting provision contained in the Criminal Code. Indeed, the 1988 Supplementary Commentary to section 5-4-306 reflects this awareness:

Act 620 of 1981 readopted § 43-2331 [§ 16-93-401], which provides that the “period of probation, together with any extension thereof shall not exceed five (5) years.” Since Act 620 had a clause repealing all conflicting laws and parts thereof, the five year limit on probations has apparently been reinstated.

We view this commentary as highly persuasive. See Kyle, 312 Ark. 274, 849 S.W.2d 935.

Based on the foregoing sequence of legislative enactments, we conclude that section 16-93-401 controls Appellant’s 1989 probation. Under that section, the trial court lacked authority to place a defendant on probation for a period of time in excess of five years. Appellant was thus illegally sentenced to a term of ten years’ probation. Because the trial court had no authority to place Appellant on probation for more than five years, it correspondingly had no authority to revoke his probation and sentence him to imprisonment some nine years later. Accordingly, we must reverse and dismiss the judgment of revocation.

Glaze and Smith, JJ., dissent.

Tom Glaze, Justice,

dissenting. Because I believe that appellant Willie Wells is procedurally barred from challenging his purported illegal sentence entered on April 3, 1989, I dissent. In summary, Wells never directly attacked his original sentence giving him a ten-year probationary period, nor has he ever filed for postconviction relief under Rule 37 of the Rules of Criminal Procedure, Ark. Code Ann. § 16-90-111(a) (1997), or by petition for writ of habeas corpus. See Renshaw v. Norris, 337 Ark. 494, 989 S.W.2d 515 (1999) (Glaze, J., concurring in part, dissenting in part) (while agreeing with the majority that trial court erred in refusing to reduce sentence under Ark. Code Ann. § 16-90-111(a) (1987), rejected holding that a writ of habeas corpus was proper method to correct the error). Instead, Wells brings this appeal from a revocation proceeding related to the 1989 ten-year probation, and for the first time, challenges the trial court’s jurisdiction to revoke his probationary sentence. Apparently, it no longer matters to this court what procedure a defendant must follow to question the legality of his or her sentence. The majority opinion was wrong in Renshaw and continues to add to its error by its decision today. The trial court’s decision should be affirmed.

Smith, J., joins this dissent.


author: Lavenski R. Smith, Justice.

text:
    Daniel BUCHTE v. STATE of Arkansas
    98-1002
    990 S.W.2d 539
    Supreme Court of Arkansas
    Opinion delivered May 27, 1999
    [Petition for rehearing denied July 1, 1999.]

      William R. Simpson, Jr., Public Defender, by: Russell Byrne, Deputy Public Defender, for appellant.

      Mark Pryor, Att’y Gen., by: Vada Berger, Ass’t Att’y Gen., for appellee.
   Lavenski R. Smith, Justice.

Appellant, Daniel Buchte, appeals from a forty-five-day commitment order entered by a Pulaski County probate judge. Buchte contends that the commitment order was invalid because he did not appear nor was he represented at a probable-cause hearing as required by Ark. Code Ann. § 20-47-209 (Repl. 1991). The State acknowledges the invalidity of the forty-five-day commitment order. The State, however, requests we reverse and dismiss exclusively on the grounds that the Pulaski County probate court did not have jurisdiction to enter the order pursuant to our decision in Chatman v. State, 336 Ark. 323, 985 S.W.2d 718 (1999). We do reverse and dismiss, but we also will discuss the merits of Buchte’s appeal in that the alleged errors are subject to repetition and yet could evade review.

Facts

On Thursday, June 25, 1998, an Independence County sheriff took Buchte into custody from his home. Apparently, Buchte held a loaded shotgun to his father’s head while his father was napping. The sheriff took Buchte to the Independence County jail under protective custody pursuant to an involuntary alcohol/ drug commitment petition completed by Buchte’s father, Harold Buchte. John and Martha Clark, who were present when the incident occurred, also signed the petition. John Clark reported the incident to Vickie A. Warner, deputy prosecuting attorney for Independence County. At the jail, Buchte underwent a screening evaluation by a representative of North Arkansas Human Services, and was then transported the next day to the Living Hope Institute in Little Rock.

Five days after its completion, the prosecutor filed the commitment petition in the Independence County probate court on Tuesday, June 30, 1998. Also on June 30, 1998, Independence County Probate Judge John Norman Harkey held an ex parte “hearing” in chambers to determine whether a seven-day evaluation of Buchte was necessary. Present at the hearing were Warner, John Clark, and Harold Buchte. Neither appellant nor his legal representative was present, and there is no indication in the record that Buchte was served with notice of the hearing, nor given an opportunity or provided transportation from Litde Rock to attend the hearing. The probate court made no written record of the hearing. However, Judge Harkey entered an order granting the seven-day evaluation of Buchte at the Living Hope Institute. Judge Harkey also noted in his order that the case should be transferred to a Pulaski County probate court since Buchte, at that time, resided in a Pulaski County treatment facility. Judge Harkey further ordered that Buchte should be afforded legal counsel through the public defender for involuntary admissions located in Little Rock.

Buchte first saw a judge on July 8, 1998, when a hearing was held in Pulaski County before Judge Mary McGowan, a Pulaski County probate judge. At the hearing, Buchte’s attorney moved to dismiss the case contending Buchte’s constitutional due process rights had been violated by the prosecutor’s failure to serve notice on Buchte or give Buchte an opportunity to attend the initial hearing, or the subsequent hearing on the seven-day-evaluation commitment petition termed the “Section Five probable cause hearing.” Judge McGowan ordered Buchte committed for forty-five days at the Arkansas State Hospital. Judge McGowan denied Buchte’s dismissal motion stating that the Pulaski County probate court does not have jurisdiction to overrule an order entered by another county’s probate court.

Standard of Review

We review probate proceedings de novo, and the decision of the probate court will not be disturbed unless clearly erroneous, giving due regard to the opportunity and superior position of the trial judge to determine the credibility of the witnesses. Vier v. Vier, 62 Ark. App. 89, 968 S.W.2d 657 (1998), citing Dale v. Franklin, 22 Ark. App. 98, 733 S.W.2d 747 (1987).

Mootness

As a first consideration, Buchte argues that this case is not moot because it contains an issue of public interest or tends to be capable of repetition, but avoids review. In Campbell v. State, 311 Ark. 641, 846 S.W.2d 639 (1993), we noted that generally we will not address issues that are moot except in cases involving issues of public interest or those that tend to become moot before they run their course. As this court stated in Chatman v. State, 336 Ark. 323, 985 S.W.2d 718 (1999), people affected by this type of procedure “would never be able to appeal those orders because they will likely have been released from the order before their appeals can reach this court.” Id. at 326. As such, mootness based on the fact that Buchte has long since been released from this forty-five-day involuntary commitment will not bar this court’s consideration of his appeal.

Due Process

On the merits, the Arkansas statutes containing the mental commitment procedures are contained in Ark. Code Ann. §§ 20-47-101 et seq., and explained in Chatman. In Chatman, we explained the proper procedure to follow for involuntary commitments, for both an involuntary commitment initiated by a petition and one initiated by immediate confinement. We stated:

The statutory scheme for evaluating and treating a person who is dangerous to himself or others is laid out in the Code under the title “Commitment and Treatment of the Mentally Ill.” See Ark. Code Ann. §§ 20-47-201 through 20-47-222 (Repl. 1991, Supp. 1997). The first step in the procedure for involuntary admissions is for an individual who has reason to believe another person constitutes a danger to himself or others to file a petition in the probate court in the county where that person resides. Ark. Code Ann. §§ 20-47-207, 20-47-210 (Repl. 1991). After the petition is filed, a hearing must be held within three days of that event before the probate judge of that county to determine whether there is probable cause to believe the person has a mental illness and is a danger to himself or to others. Ark. Code Ann. § 20-47-209 (Repl. 1991). This is the Section Five hearing, and in order for a person to be admitted to a hospital for evaluation, the probate judge must be convinced that such is warranted by clear and convincing evidence. Id. If the probate judge orders the person admitted for evaluation, a second hearing must be held within seven days by a probate judge where the person is being evaluated to decide if detention in a hospital or receiving facility or other program for up to forty-five days for treatment is needed. Ark. Code Ann. §§ 20-47-205(b), 20-47-214 (Repl. 1991, Supp. 1997). Any probate judge in the Sixth Judicial District, where the Arkansas State Hospital is located, may hold that hearing if the person is detained within that district. Ark. Code Ann. § 20-47-205(g) (Supp. 1997). If the probate judge determines by clear and convincing evidence that the person is a danger to himself or others, the judge shall order detention for treatment for a maximum of forty-five days. Ark. Code Ann. § 20-47-214 (Repl. 1991).

There is also a procedure for immediate confinements and evaluation for emergency situations. See Ark. Code Ann. § 20-47-210 (Repl. 1991). Under § 20-47-210, whenever a person is a danger to himself or to others and immediate confinement appears necessary, a law enforcement agency in the jurisdiction shall transport that person to a hospital or receiving facility, if there is no other safe means of transportation available. A petition for involuntary admission with a request for immediate confinement must be filed within seventy-two hours, excluding weekends and holidays. The probate judge for the county then holds an ex. parte hearing with the petitioner to determine whether there is reasonable cause for involuntary admission and' imminent danger of death or serious bodily harm.- If the probate judge finds that immediate confinement under those criteria is necessary, the judge shall order the law enforcement agency to transport the person to a receiving facility. A probable-cause hearing under § 20-47-209(a)(1) (the Section Five hearing) must then be held within seventy-two hours of the person’s detention and confinement. Chatman, supra, at 327-328. In a footnote to the opinion, we noted that Ark. Code Ann. § 20-47-209(a)(1) requires that the probable-cause hearing be “set” within three days, and the court construed that to mean “set” and “held” within the three-day time period.

Finally, pursuant to Ark. Code Ann. § 20-47-211 (Repl. 1991), upon detention the detainee is supposed to be served a copy of the petition for involuntary commitment, a copy of a summons to appear at the probable-cause hearing, and a copy of a statement of rights. This statement of rights, contained in Ark. Code Ann. § 20-47-211, states:

1) That he has a right to effective assistance of counsel, including the right to a court-appointed attorney;
2) That he and his attorney have a right to be present at all significant stages of the proceedings and at all hearings; except no attorney shall be entitled to be present upon examination of the person by the physician or any member of the treatment staff pursuant to an evaluation, whether initially, or subsequently;
3) That he has the right to present evidence in his own behalf;
4) That he has the right to cross-examine witnesses who testify against him;
5) That he has the right to remain -silent;
6) That he has a right to view and copy all petitions, reports, and documents contained in the court file.

This statement of rights is required to be served on the detainee under the statute. However, the code states no specific remedy for failure to serve the statement on the defendant, or to provide these rights, short of constitutional due process remedies.

As in Chatman, Appellant Buchte contests the entry of the order requiring the forty-five-day involuntary commitment based on the fact that there was not a valid Section Five probable-cause hearing for the original seven-day evaluation. It appears that the Independence County probate court combined the order permitting immediate confinement with the probable-cause order allowing a seven-day evaluation, resulting in a denial of Buchte’s right to be heard at the hearing. Because this is an immediate-confinement case, Ark. Code Ann. § 20-47-210 applies. Under that statute, the rules for an immediate-confinement situation require that the petition for immediate confinement be filed within seventy-two hours from the time of confinement, and that the probable-cause hearing be held, pursuant to Ark. Code Ann. § 20-47-209, also within the seventy-two-hour period. We made it clear in Chatman that in immediate-confinement cases, the probable-cause hearing must be held within seventy-two hours of confinement before allowing the seven-day evaluation to proceed. The court stated:

It is imperative under the statutes that a probable-cause hearing, justifying further detention and evaluation, be conducted within three days of the petition for involuntary admission or, in the case of immediate confinement, within three days of detention. The hearing to determine probable cause is mandatory. . . . (Emphasis added.)

Chatman, supra, at 329; see also, Ark. Code Ann. § 20-47-210(b)(3). Furthermore, upon confinement, the person detained must be served with a statement of rights codified in Ark. Code Ann. § 20-47-211, which specifically notes that this person has the right to be present or have an attorney present at all significant stages of the proceedings and at all hearings.

In this case, while it is arguable that the probable-cause hearing was held within seventy-two hours, excluding weekends, of Buchte’s confinement (Thursday to Friday, twenty-four hours; Friday to Monday, forty-eight hours; Monday to Tuesday, seventy-two hours), Buchte was neither allowed to appear nor was he afforded legal counsel to appear on his behalf. While the code permits a court to conduct the hearing in a detainee’s absence due to physical infirmity, or if appearance would be detrimental to his health, well-being, or treatment, or that his conduct would be disruptive, the court must make specific findings that one of these conditions was present to justify the detainee’s nonattendance. See Ark. Code Ann. § 20-47-209(b)(1) through (3). No such findings were made in the instant case. Furthermore, Buchte was not afforded any legal counsel at what turned out to be the probable-cause hearing in his case. In fact, the order for evaluation is the first instance in which the probate court appointed legal counsel for Buchte. In short, Buchte was not afforded his due process protection pursuant to Ark. Code Ann. § 20-47-211.

For all the forgoing reasons, we reverse and dismiss.

Reversed and dismissed.

       We note that, since Chatman, the General Assembly has addressed the jurisdiction issue by amending A.C.A § 20-47-205 through enactment of Act 1245 of 1999.