author: Searcy W. Harrell, Jr., Special Justice. Bill W. Bristow, Special Justice,

text:
    FIRST AMERICAN CARRIERS, INC. and David Newman v. The KROGER COMPANY
    89-220
    787 S.W.2d 669
    Supreme Court of Arkansas
    Opinion delivered April 16, 1990
    [Rehearing denied June 18, 1990.]

      Wright, Lindsey & Jennings, for appellants.

      Barber, McCaskill, Amsler, Jones & Hale, P.A., for appellee.

      Sp. J. Bill Bristow would grant rehearing.

   Searcy W. Harrell, Jr., Special Justice.

On June 8,1988, an eleven vehicle accident occurred on Interstate 40 east of Little Rock. At the time of the accident, the highway was clouded by smoke from wheat fields being burned by Lonoke County farmers. One of the vehicles was owned by Ryder Truck Rental, Inc. (Ryder), leased by it to First American Carriers, Inc. (First American) and driven by a First American employee, David Newman. Three of the vehicles were owned by The Kroger Company (Kroger), which was insured by CNA Insurance Company (CNA).

On the day following the accident, Ryder retained Roger Glasgow of the law firm of Wright, Lindsey & Jennings (the Wright Firm) to supervise its investigation of the accident and to represent its interest, and that of First American and Newman, in the event of litigation arising out of the accident. Mr. Glasgow immediately became actively involved in the investigation of the accident. On that same day, Edwin L. Lowther, Jr., of the Wright Firm was also contacted by a claims representative for CNA who advised him that vehicles owned by its insured, Kroger, were involved in the same accident and requested legal research on open field burning in Arkansas. Mr. Lowther copied relevant Arkansas statutes on open burning and transmitted them to CNA. The only other contact between CNA and the Wright Firm concerning this accident was a June 13, 1988, telephone request from CNA inquiring if the advancement of funeral expenses would be prejudicial to it in subsequent litigation. Mr. Lowther advised CNA’s representative on this issue.

The two attorneys then discovered the conflict, and Mr. Lowther promptly notified CNA and declined further representation. Subsequently, by letter dated July 7, 1988, Mr. Lowther wrote CNA, advised it of Mr. Glasgow’s heavy involvement in assisting Ryder promptly after the wreck, and stated “because of the extent of work performed by Roger on Ryder’s behalf, we have no choice but to withdraw as CNA-retained counsel for Kroger Stores.” The Wright Firm transmitted a bill for $82.50 with this letter.

There was never any direct contact between any employee or other representative of Kroger and the Wright Firm. There is no evidence that the Wright Firm obtained any confidential information from CNA or Kroger regarding Kroger and this accident.

On June 13,1988, a lawsuit was filed in the Circuit Court of Lonoke County. Among the named defendants were First American, Newman, and Kroger. CNA retained other counsel for Kroger and during the course of this litigation, Kroger made a motion for the disqualification of the Wright Firm as attorneys for First American and Newman on the basis of a conflict of interest. The trial court granted this motion, from which First American and Newman appeal. The decision is affirmed.

Appellants rely on three points for reversal. They contend: (1) Kroger is not a former client of the Wright Firm regarding this action; thus, Rule 1.9 of the Model Rules of Professional Conduct has not been violated, (2) CNA is not a party to this action and is not being harmed by the Wright Firm’s representation of First American and Newman; thus, there is no violation of Rules 1.7 and 1.9 of the Model Rules of Professional Conduct, and (3) the facts of this case do not create an appearance of impropriety; thus, Canon 9 of the Model Rules of Professional Responsibility has not been violated.

The issue presented is whether, under these facts, the trial court properly disqualified the Wright Firm.

The issue presented is difficult because the contacts were solely between the Wright Firm and CNA, the contacts were minimal, there is no evidence that confidential information relating to this litigation was obtained as a result of the contacts, no direct contacts were made between the Wright Firm and Kroger, and the Wright Firm acted promptly in declining further representation of CNA and Kroger.

Rule 1.9 of the Model Rules pertains to the representation of a former client; Rule 1.7 pertains to the representation of an existing client.

Rule 1.9 provides:

A lawyer who has formerly represented a client in a matter shall not thereafter: (1) represent another person in the same or a substantially related matter in which that person’s interests are materially adverse to the interests of the former client unless the former client consents after consultation; or (2) use information relating to the representation to the disadvantage of the former client except as Rule 1.6 would permit with respect to a client or when the information has become generally known.

Rule 1.7 provides:

(a) A lawyer shall not represent a client if the representation of that client will be directly adverse to another client, unless: (1) the lawyer reasonably believes representation will not adversely affect the relationship with the other client; and (2) each client consents after consultation.
(b) A lawyer shall not represent a client if the representation of that client may be materially limited by the lawyer’s responsibilities to another client or to a third person, or by the lawyer’s own interest, unless: (1) the lawyer reasonably believes representation will not be adversely affected; and (2) the client consents after consultation. . . .

The appellants’ points (1) and (2) are closely related, and we will discuss them together.

We have consistently taken strong positions in situations where the public’s confidence in attorneys might be eroded by the appearance of a conflict of interest.

It is clear under the Model Rules of Professional Conduct and the prior decisions of this Court that if the contacts had come from Kroger, rather than CNA, then the'Wright Firm would have been subject to disqualification. The appellants argue forcibly that the Wright Firm’s former client in this case was CNA, and not Kroger, because there was never any engagement by Kroger of the firm’s services nor any consultation with Kroger for the purpose of obtaining information concerning the subject of the litigation.

We cannot agree with this argument. There are two ABA opinions on point. The ABA Comm, on Professional Ethics and Grievances, Formal Op. 282 (1950) states that “[the] essential point of ethics involved was that the lawyer so employed would represent the insured as his client with undivided fidelity. . . .” ABA Comm, on Ethics and Professional Responsibility, Informal Op. 1476 (1981) states that “. . . when a liability insurer retains a lawyer to defend an insured, the insured is the lawyer’s client.” We agree with the principles established by these opinions.

It is interesting to note that neither of the Wright Firm’s initial contacts came from entities which became parties to the litigation. CNA initially contacted the Wright Firm regarding Kroger, and Ryder did so regarding First American and Newman. This is the nature of the insurance defense law practice. The record is clear that the Wright Firm knew it was being contacted by CNA regarding Kroger’s involvement in this anticipated litigation, and it understood that the work was for the eventual benefit of Kroger as a potential party. The Wright Firm’s letter to CNA discontinuing representation stated that “[w]e have no choice but to withdraw as CNA-retained counsel for Kroger Stores.”

The Rules of Professional Conduct are established so members of the public will have confidence in their attorney. The appellants point out that a party has the right to choose his attorney; however, a party also has the right not to have his prior attorney take a case against him involving that same matter. We believe that Kroger had a reasonable expectation that the Wright Firm was Kroger’s attorney in this case. The Wright Firm’s continued representation of the appellants would create that appearance of impropriety that the rules and prior decisions of this court require attorneys to carefully avoid.

The third point raised by appellants is that there is no appearance of impropriety and thus “Canon 9 of the Model Rules of Professional Responsibility has not been violated.” Actually, Canon 9 was a part of the ABA Code of Professional Responsibility and the exact language is not in the Model Rules of Professional Conduct adopted by this court. Canon 9 provided that “a lawyer should avoid even the appearance of impropriety.” The fact that Canon 9 is not in the Model Rules does not mean that lawyers no longer have to avoid the appearance of impropriety.

In Gipson v. Brown, 288 Ark. 422, 706 S.W.2d 369 (1986), an attorney represented a church with regard to its incorporation. The same attorney later participated as legal counsel and party plaintiff in an action against the church elders seeking financial data and business information. On motion by the elders, we disqualified the attorney based on his prior representation of the church, stating:

Courts will disqualify counsel in an adversary proceeding when: (1) the moving party was previously represented by the attorney whose disqualification he now seeks; (2) the matters embraced within the pending lawsuit are substantially related to the matters or the cause of action on which the attorney previously represented the moving party; and (3) the attorney is representing an adversary of the movant party in the pending suit.

We further stated:

If the two actions are found to be substantially related, a presumption arises that the former client’s confidences were disclosed to the former attorney, which confidences the attorney might use to the detriment of the movant in the current action. . . . The Court will entertain this presumption and will not inquire into the nature and extent of the confidences. The confidential disclosures, whether actual or presumed, necessitate the disqualification of the attorney when he represents an adverse interest in a related matter.

Gipson v. Brown was decided under the ABA Code of Professional Responsibility, Canons 4,5, and 9. Canon 4 provided that a lawyer should preserve the confidence and secrets of a client. Canon 5 provided that a lawyer should exercise independent professional judgment on behalf of a client. Canon 9 provided that a lawyer should avoid even the appearance of impropriety. The attorney in Gipson v. Brown was not disqualified solely because of the appearance of impropriety, but because of the reasons stated in the opinion and quoted above.

We recognize that there may be occasions when there may be an appearance of impropriety without factual basis. In the case before this Court, the Wright Firm had an actual conflict of interest, and all parties agreed that it would have been inappropriate for the Wright Firm to continue to represent both clients. It is not just the appearance of impropriety but the fact that the Wright Firm accepted both clients, even though innocently, and even though there was no confidential information obtained from CNA or Kroger that would prejudice Kroger. The Wright Firm, during its dual representation, although short, might well have acquired confidential information from Ryder that could be used against Kroger.

While Canon 9 is not expressly adopted by the Model Rules, the principle applies because its meaning pervades the Rules and embodies their spirit. It is included in what the preamble to the Rules refers to as “moral and ethical considerations” that should guide lawyers, who have “special responsibility for the quality of justice.” This is why the principle applies here, and not because it was part of the Code.

In Martindale v. Richmond, 301 Ark. 167, 782 S.W.2d 582 (1990), an attorney received a letter of caution from the Arkansas Supreme Court Committee on Professional Conduct after the committee found that he had violated Rule 1.9. The facts were that in 1982 the attorney was retained to file a divorce suit against his client’s wife. The parties reconciled, and the suit was dismissed that same year. The parties subsequently were divorced, but the appellant attorney represented neither of them at that time. In 1987, the former client’s former wife retained the appellant attorney to represent her in seeking an increase in child support. On motion of appellant’s former client, the husband, appellant was disqualified, and a subsequent complaint was lodged with the Committee on Professional Conduct. Although there was no evidence that the appellant attorney actually had information or confidences from the prior relationship that he intended to use in the support case, we held that “the appearance exists that such an abuse could occur and for that reason, appellant should have declined to represent Adele when he learned that he had represented Richmond earlier.”

The current situation meets the criteria set forth in Rule 1.9 and in Gipson v. Brown and Martindale v. Richmond. This is the same matter, and the interests of the appellants and Kroger are adversarial as the issue of relative fault between these parties will be litigated.

Under the rules, Kroger could have waived the conflict but it has specifically declined to do so.

In addition, Rule 1.10 of the Model Rules of Professional Conduct provides that while lawyers are associated in a firm, none of them shall knowingly represent a client when any one of them practicing alone would be prohibited from doing so by the other rules.

The violation of Rule 1.9 and the rules set forth in our prior decisions require that this case be affirmed.

Affirmed.

Special Justice Carl A. Crow, Jr., joins in this opinion.

Hays, Glaze, and Price, JJ., not participating.

Special Justice Bill W. Bristow dissents.

Bill W. Bristow, Special Justice,

dissenting. The majority opinion has fairly and succinctly stated the factual background which precipitated the motion to disqualify the law firm of Wright, Lindsey & Jennings (the Wright Firm). In addition, it should be noted that the accident occurred on a Wednesday, that the two lawyers were contacted on the next day, and that the following Monday the firm discovered the potential conflict and immediately notified CNA that it could not represent the CNA insured, Kroger Stores, in the matter. Thus, only one full work day, Friday, elapsed between the time that the insurance carrier contacted Edwin L. Lowther, Jr., and his notifying CNA that he must decline further representation. As noted by the majority, and of paramount importance, no confidential information of any type was obtained by the Wright Firm from CNA or Kroger. Finally, it should be noted that Roger Glasgow, who had been contacted by Ryder, according to the undisputed testimony had been immediately and considerably involved at the outset, which involvement had consisted of meeting with a Ryder representative and a consulting expert and visiting the scene of the accident.

It is the manner in which the majority has applied the Model Rules of Professional Conduct and the policy considerations implicit in such application which provokes this dissent. The Preamble to the Model Rules contains the following recognition of the practical side of the practice of law:

In the nature of law practice, however, conflicting responsibilities are encountered. Virtually all ethical problems arise from conflict between a lawyer’s responsibilities to clients, to the legal system and to the lawyer’s own interest in remaining an upright person while earning a satisfactory living. The Rules of Professional Conduct prescribe terms for resolving such conflicts. Within the framework of these Rules many difficult issues of professional discretion can arise. Such issues must be resolved through the exercise of sensitive professional and moral judgment guided by the basic principles underlying the Rules.

At another point, the Preamble states:

The Rules of Professional Conduct are rules of reason. They should be interpreted with reference to the purposes of legal representation and of the law itself.

The Preamble also contains a pertinent caveat:

The Rules are designed to provide guidance to lawyers and to provide a structure for regulating conduct through disciplinary agencies. They are not designed to be a basis for civil liability. Furthermore, the purpose of the Rules can be subverted when they are invoked by opposing parties as procedural weapons.

In the instant case the contacts were solely between the Wright Firm and CNA and were minimal in nature, taking place over the span of one work day and parts of two others. Upon discovering the situation, the Wright Firm properly notified CNA that it was declining further representation of Kroger. There was no contact whatsoever between Kroger and the Wright Firm, and absolutely no confidential information was imparted to the Wright Firm from CNA.

What policy basis can require the disqualification of the Wright Firm from representing the interest of Ryder in this fact situation? The majority analogizes this case to situations where the public’s confidence in attorneys might be eroded by the appearance of a conflict of interest. But if one looks at the public’s confidence in attorneys, one must consider the impact of this decision on Ryder. On the day after the accident its representatives met with its chosen lawyer and a consulting expert who visited the scene and began supervising defense efforts. Now, Ryder is being told that it cannot have the benefit of further representation of the attorney who orchestrated its original defense strategy because this would erode the public’s confidence in attorneys. How does this revelation increase the confidence in the legal system of a client in the position of Ryder?

From the standpoint of the public at large it is difficult to fathom how this decision can be perceived as anything other than one of those endless rules which lawyers constantly argue over. The Preamble warns against the use of the Model Rules as procedural weapons and the commentary to Rule 1.7 notes that disqualification motions can be misused as a technique of harassment. When the only contact is from an insurance carrier and did not impart confidential information, disqualification amounts to exalting form over substance. It can hardly be justified as adding to the public’s confidence in the legal system.

If one looks at this by balancing the interests of the respective clients, how has this affected Kroger? They did not talk directly with the Wright Firm. Under their insurance contract with CNA, the carrier typically chooses the defense counsel. As has been repeatedly underscored no confidential information was revealed. Certainly if the respective effects on CNA/Kroger and Ryder are balanced, there is harm to Ryder without corresponding harm to CNA/Kroger.

Finally, how does this decision affect lawyers? If this result is mandated by Rule 1.9, does not a law firm which is retained by CNA have a Rule 1.9 conflict in any instance in which the interest of another carrier is adverse to CNA? Must such firm then withdraw from representing both carriers? When one considers the subrogation claims in the casualty insurance field, the logical extension of such reasoning is that a law firm may only represent one carrier at a time. The effect of such a decision on defense practice, and large law firms, should be readily apparent. It is submitted that such a result is not intended by the language and policy of Rule 1.9.

Of course, the answer to this problem is that the insured is the defense firm’s client from the standpoint of any Rule 1.9 analysis. Yet if this perspective is used in the instant case, the absence of any contact between Kroger and the law firm means that Rule 1.9 can not be the underpinning for disqualification.

As another basis for disqualification, one turns to the question of appearance of impropriety. This is a familiar and oft-quoted phrase but does not actually appear in the language of the Model Rules of Professional Conduct as adopted by this Court. Further, it should not be used to explain the end result of reasoning rather than to explain the exact policies and intricacies of such reasoning. This phrase should not be used as a tool for disqualification when the facts do not justify its invocation. See International Electric Corp. v. Flanzer, 527 F.2d 1288 (2nd Cir. 1975).

In summary, there simply is no practical reason nor is there a discernible policy behind the decision to disqualify. The effects on one of the litigants, the law firm, the practice of law, and indeed the public are unnecessary and unwarranted. Moreover, the potential mischief for the future in the logical extensions of this reasoning is apparent. For all of these reasons, I respectfully dissent.


source: Caselaw Access Project

author: Per Curiam.

license: Public Domain

text:
    Vicki KOROKLO (now Kanady) v. Joseph KOROKLO, Jr. and Intervenor Arkansas Department of Human Services
    90-96
    787 S.W.2d 241
    Supreme Court of Arkansas
    Opinion delivered April 16, 1990

      Bill Walters, for appellant.

      Shaw, Ledbetter, Hornberger, Cogbill & Arnold, by: Ronald D. Harrison, for appellee Joseph Koroklo, Jr.
   Per Curiam.

On March 9, 1990, the trial court entered an order finding, among other things, Vicki Kanady in contempt of court, sentencing her to six months in jail. Appellant filed a notice of appeal from the contempt order and now requests this court to grant a petition for prohibition against or to stay further proceedings by the trial court. She further asks that she be released without additional bond or supersedeas from incarceration, but if we should determine a bond is required, that we should fix the amount. The trial court has previously denied a bond or a stay pending the appeal.

Prohibition in this matter clearly does not lie, but appellant’s request for a stay pending appeal under Ark. R. App. P. 8 is proper for this court’s consideration. However, we first note that there is no absolute right of supersedeas in child custody cases. Goodin v. Goodin, 240 Ark. 541, 400 S.W.2d 665 (1966). After a careful review of the partial record, we decline to stay that part of the trial court’s order concerning custody and visitation rights and specifically direct that, despite the pendency of this appeal, the trial court retains continuing power to enforce its March 9, 1990 order, including that portion suspending appellant’s visitation rights. Regarding that part of the trial court’s March 9 order finding appellant in contempt and sentencing her to six months in the Sebastian County Jail, we issue a stay order in accordance with Rule 8(b), (c) and (d). Issuance of the stay order is conditioned upon appellant filing a bond with the trial court in the amount of $5,000.00 and the bond is to contain those requirements set out in Rule 8(c). The bond shall provide for the additional condition that, if during the pendency of this appeal, the trial court should allow the appellant visitation, supervised or otherwise, an additional $5,000.00 bond shall be provided by the appellant and she is ordered not to remove the parties’ child from this state’s jurisdiction.


author: Jack Holt, Jr., Chief Justice.

text:
    Margaret Ullrich GOLDSMITH, Mother, and Lee Goldsmith, Father of: Samantha Goldsmith, DOB 7/11/78 and William L. Goldsmith, DOB 8/27/79 v. ARKANSAS DEPARTMENT OF HUMAN SERVICES
    90-47
    787 S.W.2d 675
    Supreme Court of Arkansas
    Opinion delivered April 23, 1990

      Raymond C. Smith, P.A., for appellant.

      S. Whittington Brown, Deputy Counsel, Office of Chief Counsel, Department of Human Services, for appellee.
   Jack Holt, Jr., Chief Justice.

This appeal is from an order of the probate court finding that the appellants, Margaret and Lee Goldsmith, were unfit to have their children, Samantha and William Goldsmith, returned to their custody and that it was in the best interests of the children that parental rights be terminated. The probate judge appointed the appellee, Arkansas Department of Human Services (Department), as the children’s guardian, with the power to consent to their adoption without notice to, or consent of, the natural parents.

From that order, the Goldsmiths appeal and allege three points of error: 1) that the appointment of a special master and a master pursuant to Act 14 of 1987 violates Ark. Const, art. 7 and amounts to the creation of a substitute judge, 2) that the authority to terminate parental rights and to permit the appointment of a guardian with the power to consent to adoption without notice to, or the consent of, the parents as provided by Act 424 of 1985 has been ruled unconstitutional and has been repealed, and 3) that the Department failed to provide remedial support services designed to reunite them with their children and to substantially reduce the risk of harm to their children.

We find no merit in any of the points of error and affirm.

The Goldsmiths initially allege that the appointment of a special master and a master pursuant to Act 14 of 1987 violates Ark. Const, art. 7 and amounts to the creation of a substitute judge.

The Arkansas Constitution, article 7 § 4 as amended by Amendment 24, provides that in each county the judge of the court having jurisdiction in matters of equity shall be the judge of the court of probate, and shall have such exclusive original jurisdiction in matters relative to guardians as is now vested in courts of probate, or may be hereafter prescribed by law.

In Hutton v. Savage, 298 Ark. 256, 769 S.W.2d 394 (1989), we held that section 6 of Act 14, which grants judges the right to appoint juvenile masters with such powers as the judges direct and which purports to vest in the masters the full authority of the judges of their respective divisions, constituted an unauthorized grant of legislative authority and the impermissible creation of what amounted to substitute judges.

However, the Goldsmiths’ reliance on Hutton v. Savage, supra, is misplaced because the order appealed from in that case was a final order entered by the master that reflected his findings and judgments and which was merely co-signed by the probate judge. See also Collins v. State, 298 Ark. 380, 769 S.W.2d 402 (1989).

In contrast, although a magistrate was utilized during the intermediate phases of this case, prior to our holding in Hutton v. Savage, supra, the final order terminating the Goldsmiths’ parental rights, from which the Goldsmiths appeal, was entered by the probate judge after he conducted a lengthy hearing to make a determination on the issue. From the extensive testimony presented at the hearing, the probate judge found that the Goldsmiths were unfit to have Samantha and William returned to their custody and that it was in the best interests of the children that parental rights be terminated. Consequently, the fact that the probate judge presided over the hearing and entered the final order terminating the Goldsmiths’ parental rights removes this case from the purview of Hutton v. Savage, supra.

In their second point of error, the Goldsmiths contend that the authority to terminate parental rights and allow the appointment of a guardian with the power to consent to the adoption without notice to, or consent of, the parent as provided by Act 424 of 1985 has been ruled unconstitutional and been repealed by Act 273 of 1989.

The Goldsmiths cite no authority for their contention that Act 424 has been ruled unconstitutional; accordingly, we decline to address that aspect of this point of error because the argument is not convincing. Kiefer v. State, 297 Ark. 464, 762 S.W.2d 800 (1989).

In this case, on April 26, 1989, the probate judge presided over the hearing to determine the termination of the Goldsmiths’ parental rights. The order terminating the Goldsmiths’ parental rights was entered on May 18,1989, and specifically incorporated the authority of Ark. Code Ann. § 9-9-303 (1987) as a basis for the order. Act 273 of 1989, which repealed sections 9-9-303(a) — (e) and 9-9-304, became effective on August 1, 1989.

The Goldsmiths’ reliance on Green v. Abraham, 43 Ark. 420 (1884), for the proposition that the initiation of a suit does not vest in a party the right to a particular decision, and the suit must be determined on the law in effect at the time judgment is rendered, as opposed to the time when the lawsuit was commenced, is also misplaced. Green dealt with the retrospective application of a curative law concerning the quieting of title to real property.

In contrast, Act 273 is not retrospective and only became effective after the final order of the probate judge. As a result, the subsequent repeal of section 9-9-303 does not affect the validity of the probate judge’s final order entered before the effective date of Act 273.

Finally, the Goldsmiths argue that the Department failed to provide remedial support services designed to reunite them with their children and to substantially reduce the risk of harm to the children.

On appeal, this court reviews probate cases de novo on the record. We do not reverse unless the chancellor’s findings are clearly against the preponderance of the evidence. Courtney v. Courtney, 296 Ark. 91, 752 S.W.2d 40 (1988).

The Goldsmiths’ argument focuses on the Department’s termination of counseling services to them after 18 months of counseling. They claim that the Department’s prerequisite for continued counseling, that Mr. Goldsmith admit to child abuse, placed an unreasonable burden on them in order to continue receiving Department counseling services.

Although the Goldsmiths cite specific testimony from the hearing as to their progress in parenting skills, marital relationship, and relationship with their children, they apparently overlook the fact that the bulk of their testimony was in reference to the effects of the services provided by the Department. They also overlook the fact that there were two major reasons for removing the children from their home: 1) the unsanitary home environment, and 2) the allegation of sexual abuse by Mr. Goldsmith.

The evidence does show inconsistent progress in improving the Goldsmiths’ home environment, but it also demonstrates that the services of a homemaker were provided to the Goldsmiths by the Department for a six month period, during which time the home environment conditions improved. However, due to Mrs. Goldsmith’s change in work schedule from the night shift to the day shift, which prevented her from being at home during the homemaker’s work hours, the homemaker was unable to continue visiting the Goldsmith home, and the conditions in the home deteriorated.

In addition, despite 18 months of counseling services provided by the Department, the issue of sexual abuse had not been resolved. Mr. Goldsmith denied the allegation, and Mrs. Goldsmith continued her disbelief of the accusation. At the hearing to determine the termination of parental rights, a social worker testified that Samantha related that Mr. Goldsmith had touched and kissed her private parts and that she had touched and kissed his private parts. Subsequently, Samantha indicated that William was also being sexually abused by his father, and William related that his father had touched his private parts.

In an effort to facilitate resolving the issue of sexual abuse, the Department also worked with the Prosecuting Attorney to arrange immunity for the Goldsmiths so that an admission could be made without fear of prosecution, but the Goldsmiths did not take advantage of the offer.

The probate judge made specific findings that Samantha and William had suffered sexual abuse by Mr. Goldsmith, noting Samantha’s sexual acting out as well as their counselor’s testimony. Both Samantha and William have intellectual limitations that were a factor in assessing the validity of the sexual abuse allegations and which were considered as making them particularly susceptible to further abuse should they be returned to the Goldsmiths’ home.

Consequently, the evidence of the Department’s efforts to improve the unsanitary home environment and unhealthful living conditions by making homemaker services available and the Department’s attempt at resolving the issue of sexual abuse by providing 18 months of counseling supports the chancellor’s findings, and his findings are not clearly against the preponderance of the evidence.

Affirmed.


author: Robert H. Dudley, Justice. Dale Price, Justice,

text:
    Virginia Sue BRACKEN v. Virgil BRACKEN
    89-265
    787 S.W.2d 678
    Supreme Court of Arkansas
    Opinion delivered April 23, 1990
    [Rehearing denied May 29, 1990.]

      Douglas, Hewett & Shock, by: Mark Hewett, and Patten & Brown, by: Charles A. Brown, for appellant.

      Jones, Gilbreath, Jackson & Moll, by: Mark Moll, for appellee.

      Hays and Price, JJ., would grant rehearing.

   Robert H. Dudley, Justice.

The parties to this action were divorced in 1974 and, at that time, the appellant, wife, was awarded alimony of $700.00 per month. Fourteen years later, in 1988, the appellee, ex-husband, filed a petition asking that the amount of alimony be either modified or terminated. The Chancellor ordered that alimony be reduced to $300 per month for six months and then terminated. Appellant appeals. We affirm as we cannot say the Chancellor clearly abused his discretion.

. At the time of the divorce the appellee, husband, was fifty-one years old and a partner in a firm of certified public accountants. His average annual income for the five years prior to the divorce amounted to $21,167.00, with his 1973 earnings amounting to $30,000.00 and expenses of $50,000.00. He testified that his marital problems affected his income that particular year.

The appellant, wife, was fifty years old with only a high school education. She had not been employed outside the home during the twenty-five years the parties had been married and had custody of the parties’ thirteen year old daughter.

The appellant, wife, was denied a divorce, but appellee was granted one on his counterclaim. The appellant was awarded one-half of all jointly held property, one-third of all of appellee’s separate property, use of the residence, child support, and the aforementioned alimony. The appellee appealed and this court, in an unpublished opinion, affirmed all of the decree except the award of one-third of appellee’s separate property to appellant. We reversed that part of the decree because under the then current law, Ark. Stat. Ann. § 34-1214 (Repl. 1962), a wife was entitled to one-third of a husband’s separate property only when “the wife [is] granted a divorce against the husband.” As previously set out, she was denied a divorce. Secondarily, we said that if he was to pay alimony and child support the title to his separate property ought not be clouded. The unpublished opinion further provided: “While we are of the opinion that the $700.00 per month alimony awarded in this case is certainly liberal, we recognize that alimony and child support may be adjusted from time to time as changes in circumstances may require. . . .”

On November 30, 1987, the then sixty-five year old appellee retired, sold his interest in his accounting partnership, and entered into a non-competition agreement. In June 1988, the child support had ended and appellee filed a petition asking that the amount of alimony be modified or terminated. The law applicable to the petition is well-settled. An award of alimony is always subject to modification, upon application of either party. Ark. Code Ann. § 9-12-1314 (1982). Such modification must be based, however, on a change in the circumstances of the parties. Boyles v. Boyles, 268 Ark. 120, 594 S.W.2d 17 (1980). The burden of showing such a change in circumstances is always upon the party seeking the change in the amount of alimony. Boyles, supra; Hurley v. Hurley, 255 Ark. 68, 498 S.W.2d 887 (1973). The primary factors to be considered in making or changing an award of alimony are the need of one spouse and the ability of the other spouse to pay. Harvey v. Harvey, 295 Ark. 102, 747 S.W.2d 89 (1988). An award of alimony is in the sound discretion of the chancellor, and we will not reverse such an award unless the chancellor has clearly abused his discretion. Wilson v. Wilson, 294 Ark. 194, 741 S.W.2d 640 (1987); Harvey, supra.

The facts proven at the hearing with regard to appellee’s ability to pay alimony may be summarized as follows. By 1987, the year appellee retired, his income from the accounting partnership amounted to $130,483.00 according to his Arkansas income tax return. He had an additional $3,287.00 income from investments. Appellant testified that his total income in 1988, the year he filed his petition, dropped to $28,880.00 and that his 1989 total income would amount to only $31,347.00. However, it appears from a de novo review of the record that appellant misspoke about his 1988 and 1989 income. On cross-examination he admitted he would receive $3,200.00 per month in severance pay, and admitted that pay would continue for a total of ten years. That source of income would amount to $38,400.00 per year. In addition, in 1987, he received $900.00 per month in social security payments, or $10,800.00 per year, and received around $1,200.00 per year as his part of a trust. Both of those incomes will continue. He received about $500.00 per month, or $6,000 per year, from an investment retirement account, and almost $200.00 per month from municipal bond interest, or $2,400.00 per year. He drew an unspecified amount of dividends, a minimum of $5,000.00, from a partnership interest in a financial management account in which he had invested $146,163.00. The foregoing amounts to at least $62,600.00 in gross income for each of the years 1988 and 1989. He has other investments which have small returns. He pays approximately $1,200.00 per month or $14,400.00 per year on the $133,772.00 debt he owes for money borrowed to open the financial management account. This leaves net income of around $48,200.00. The Chancellor apparently believed appellee’s testimony about his relatively small income and found that appellee’s income “has been substantially reduced.” As the de novo review of the record demonstrates that finding is clearly erroneous and there is no change in circumstances in appellee’s ability to pay alimony. However, the Chancellor was correct in his finding that there was a change in circumstances regarding appellant’s need for alimony.

In 1974, at the time of the divorce, the appellant was unskilled, untrained, and unemployed. After the divorce, she used her alimony to obtain an Associate in Arts degree from Westark Community College, a Bachelor of Arts degree from the University of Arkansas, and in 1980, a Masters Degree in Social Services from California State University. Her grade point at the University of Arkansas was 4.00 and 3.75 at California State. Clearly appellant is highly intelligent, and is now well educated and employable.

In 1980, she went to work at the Fresno [California] Learning Center and earned $850.00 per month. She quit that job and, in 1982, went to work for the California Child Protective Service at an annual pay of $20,400.00. She worked there for thirteen months and also quit that job ostensibly because of required travel at night. However, cross-examination developed that the night travel consisted of one seventy-five mile trip and one thirty mile trip over the thirteen month period. Since that time she has not sought to utilize her education in seeking a job. She testified that she “gave up on it” and now “wanted to wait until this [hearing] was over.” Since then she has held only part-time or seasonal jobs, and her wages and other income, excluding alimony, are summarized as follows:

Year Wages Other Income Total
1984 313.00 10,043.00 10,356.00
1985 3,300.00 5,340.00 8,640.00
1986 11,174.00 4,242.00 15,416.00
1987 10,457.00 2,642.00 13,099.00

In his finding of facts at the conclusion of the hearing, the Chancellor stated that the alimony ordered in 1974 was to enable the appellant to rehabilitate herself, and that has now occurred. The Chancellor stated that appellant “has received educational training and experience, and is a professional person in her own field.” “That’s been the result of alimony being paid over these years, and that’s one reason why it was ordered, so that you could rehabilitate yourself, and you have. You have done a good job of that.” The Chancellor further stated: “Alimony is not awarded as a reward to the receiving spouse, or as a punishment of the spouse against whom it is charged, but for the purpose of rectifying, in so far as reasonably possible, the frequent economic imbalance and the earning power and standard of living of the divorced husband and wife; so that’s what really took place in this case.”

We cannot say the Chancellor abused his discretion in holding that there has been a change in appellant’s circumstances. Appellant is well educated and is capable of gainful employment. The Chancellor obviously concluded that a person who made a 4.0 grade point average in college and a 3.75 in obtaining a master’s degree is capable of far more than part-time or seasonal jobs. Such a conclusion is buttressed by appellant’s statement that she had not sought to fully utilize her education since 1985, and she “wanted to wait until this was over” before she sought maximum employment. Under these circumstances we cannot say the Chancellor clearly abused his discretion in terminating alimony and, accordingly, we affirm.

Hays and Price, JJ., dissent.

Dale Price, Justice,

dissenting. I wholeheartedly agree with the majority that the appellee’s income has not been substantially reduced. I can even see a basis for concluding the appellant has not sought employment as fervently as she should. But I think the peculiar facts of this case and a fundamental sense of fairness require reversal.

In the 1974 decree, the chancellor awarded Mrs. Bracken one-third of her husband’s separate property. But we reversed that portion of the award. As a result, Mrs. Bracken’s ability to better her standard of living and plan for her future was considerably reduced. She had been a housewife for 25 years, but was able to educate herself and obtain some employment. She is now 65 years old. To say that she must “fully utilize her education” at a time when Mr. Bracken is comfortably retiring and has had no change in income is unfair and disregards her 25 year contribution to the marriage.

I respectfully dissent.

Hays, J., joins the dissent.


author: Robert H. Dudley, Justice.

text:
    CITY OF CLINTON v. Dora P. JONES
    90-62
    787 S.W.2d 242
    Supreme Court of Arkansas
    Opinion delivered April 23, 1990

      John C. Aldworth, Clinton City Attorney, for petitioner.

      No response.
   Robert H. Dudley, Justice.

The Municipal Court of Clinton found appellee, Dora Jones, guilty of public intoxication and leaving the scene of an accident. The findings in the judgment of conviction recite, among other things, that the appellee had habitually abused herself with librium, alcohol and codeine to the extent that she was a danger to herself, and, in lieu of a sentence, she was committed to an alcohol treatment facility for not less than thirty (30) nor more than ninety (90) days. See Ark. Code Ann. § 20-64-709 (1987). Her appeal bond was set at $500.00. The hearing, judgment, and fixing of the amount of bond all occurred late in the afternoon of Friday, March 3,1989. Appellee did not make bond. Later that evening she was transported to the treatment facility.

Six days later, on Thursday, March 9, while still in the recovery facility, and with neither making the appeal bond nor seeking a reduction of bond, she filed a petition for a writ of habeas corpus in circuit court. The allegations of the petition were that (a) no evidence was introduced in municipal court to show that appellee habitually abused herself with alcohol or drugs and (b) petitioner was denied her right to appeal because she could not make bond over the weekend of Friday night, March 3, and Saturday and Sunday, March 4 and 5. The trial court issued the writ on the day the petition was filed, Thursday, March 9, and made it returnable on March 13. After the hearing on the 13th, the circuit court ordered that appellee be released because (a) no evidence was introduced in municipal court to show she habitually abused alcohol or drugs and (b) she was denied her right to appeal. The City of Clinton later found out about the ex parte proceeding and sought to intervene and have the circuit court order vacated. The circuit court refused to allow the intervention. The City “appeals” the circuit court’s order releasing the appellee pursuant to the Writ. The order releasing the appellee was erroneously issued.

First, we address the matter of whether we will hear this “appeal.” The proper method of bringing up proceedings on habeas corpus for review is by means of a writ of certiorari. Taylor v. Moore, 99 Ark. 412, 138 S.W. 634 (1911). However, even though parties have said they “appeal,” we have treated the matter as one to be reviewed by certiorari. Ex Parte Holdaway, 105 Ark. 1, 150 S.W. 123 (1912). See also Von Luce v. Rankin, 267 Ark. 34, 588 S.W.2d 445 (1979). We so treat this case. Further, the general rule is that one who was not a party to the habeas corpus proceeding below is ordinarily not entitled to apply for a writ of certiorari to review the trial court’s finding; however, there are exceptions to the general rule, and one of them is that the State may seek review when a defendant is released. Ex Parte Boles, 88 Ark. 388, 114 S.W. 918 (1908). Here, the State seeks review because a defendant has been released from a hospital confinement ordered in lieu of sentence without posting the appeal bond. Accordingly, we will exercise jurisdiction and hear this matter.

The circuit court issued the writ of habeas corpus. Such a writ is to be granted only when a person is (1) detained without lawful authority or (2) imprisoned when by law he is entitled to bail. Ark. Code Ann. § 16-112-103 (1987). The writ of habeas corpus is not to be used as a substitute for appeal. In emphasizing that it is not to be used as a substitute for appeal, we have said that in habeas corpus proceedings it is conclusively presumed that there was sufficient evidence to sustain a conviction. Baird v. Bray, 125 Ark. 511, 189 S.W. 657 (1916).

In discussing the first ground for issuance of the writ, we have said that a person is detained without lawful authority when it is shown (1) that the commitment is invalid on its face, or (2) thecourt lacked jurisdiction. Mitchell v. State, 233 Ark. 578, 346 S.W.2d 201 (1961). In this case the circuit court did not find that the municipal court commitment was invalid on its face nor that the municipal court lacked jurisdiction. In fact, the commitment was regular on its face and the municipal court had subject matter and personal jurisdiction over the appellee. Thus, the circuit court could not have properly released the appellee on the first ground.

The second ground for the issuance of the writ is that a person “is imprisoned when by law he is entitled to bail.” The circuit court did not find that appellee was confined to the treatment facility when by law she was entitled to bail. We could summarily end the discussion on that basis. However, the circuit court did find that she was denied her right to appeal. If a person is denied the right to appeal, she could be confined “when by law she is entitled to bail.” Accordingly, we address the issue.

The circuit court’s ruling that “she was denied her right to appeal” is clearly erroneous. The record in this case reflects the municipal court set an appeal bond of $500.00. The appellee’s petition recites that a “$500.00 appeal bond was set. . .’’and the appellee testified that the municipal judge set the appeal bond at $500.00. The record reflects that appellee simply did not make bond, and did not petition to have the bond reduced, even though she was represented by an attorney at all times.

A possible reason for the trial court’s finding that appellee was denied a right to appeal is appellee’s testimony that the municipal court judge would not have been available to approve the bond over the weekend of March 4 & 5. If that is the basis of the holding, it would also be in error because (1) she never attempted to make bond, and (2) the judge’s absence the weekend of March 3-5 was not material to the issue of making bond on Thursday, March 9, the date she filed the petition. Accordingly, the trial court erred in ordering the appellee released.

The order releasing appellee is quashed on certiorari.


author: Steele Hays, Justice.

text:
    Angelia ISHIE v. James KELLEY
    90-5
    788 S.W.2d 225
    Supreme Court of Arkansas
    Opinion delivered April 23, 1990

      Rieves & Mayton, by; Elton A. Rieves IV, for appellant.

      The Etoch Law Firm, for appellee.
   Steele Hays, Justice.

James Kelley was injured when his automobile was struck from behind by Angelia Ishie. Some three months later Kelley was injured again when a truck in which he was riding failed to negotiate a curve and turned over. Kelley sued Ishie for personal injuries and property damage. The jury awarded Kelley $50,000 and Ms. Ishie has appealed. We find merit in one of the assignments of error and, accordingly, we reverse and remand for a new trial.

Over Ms. Ishie’s specific objection that there was insufficient evidence of a loss of profits, the trial court submitted that issue to the jury in the form of AMI 2206, which permitted the jury to consider as an element of damages, the value of “any profits lost and the present value of any profits reasonably certain to be lost in the future.” That was error, in light of the testimony, and the judgment must be reversed.

Mr. Kelley testified that he operated his own plumbing business. He said that he had made $970 in January and February of 1988 leading up to the accident on February 24. In 1987 he had filed an income tax return reflecting income of $4,970 and had made approximately $8,000 (“a little more or a little less”) in 1986. His income for 1985 was $15,000 (“it could have been a little more or a little less.”) He was able to produce only one tax return for the previous five years, 1987, and on cross-examination said he did not know how much he had earned in 1986. While his testimony was undeniably vague as to earnings for the years involved, that alone might not compel reversal. The problem is the totals appear to be gross earnings, whereas Mr. Kelley conceded that he employed others to help him in the business, yet he offered no evidence whatever as to the cost of labor or other expenses, if any, from which net income could be determined.

It is settled law that past and future earnings or profits lost because of personal injuries are recoverable as damages. AMI 2206. St. Louis San Francisco Ry. Co. v. Spradley, 199 Ark. 174, 133 S.W.2d 5 (1939); St. Louis, I. M. & S. Ry. Co. v. Eichelman, 118 Ark. 36, 175 S.W. 388 (1915). However, it is equally true that in order to recover lost profits a plaintiff must present a reasonably complete set of figures and not leave the jury to speculate. Sumlin v. Woodson, 211 Ark. 211, 199 S.W.2d 936 (1947). That is to say, the law requires that profits be shown with reasonable certainty. Swenson & Monroe v. Hampton, 244 Ark. 104, 424 S.W.2d 165 (1968); Crow v. Russell, 226 Ark. 121, 289 S.W.2d 195 (1956).

Where, as here, it is evident that the only figures provided are gross amounts rather than net, with no basis from which a jury could reasonably infer the approximate net earnings of the plaintiff, any resulting verdict is based on conjecture. Farmers Coop. Assn. v. Phillips, 241 Ark. 28, 405 S.W.2d 939 (1966); Beasley v. Boren, 210 Ark. 608, 197 S.W.2d 287 (1946). In Phillips, reversal was compelled because the only proof of loss was testimony that the plaintiff had “received $1,866 for the last bunch of broilers sold, but this was the gross amount, there was no testimony as to the net amount.”

Appellee regards this case as indistinguishable from Coca- Cola Bottling Co. of Southwest Arkansas v. Jones, 226 Ark. 953, 295 S.W.2d 321 (1956). We cannot agree. In Jones the defendant made only a general objection to an instruction on the measure of damages, so the issue on review was simply whether the instruction was inherently wrong — the opinion suggesting that if the evidence of net or gross earnings was subject to challenge, a specific objection was called for.

It is clear in this case there was some uncertainty about the difference between loss of earnings and loss of earning capacity. When counsel for Ms. Ishie moved for a directed verdict with respect to the claim for loss of profits, counsel for Mr. Kelley responded that the evidence was offered to establish loss of earning capacity rather than loss of profits. Evidently on that basis the trial court denied the motion.

While loss of profits or earnings and loss of earning capacity have similarities, they are distinctly different concepts. The difference is explained in H. Woods, Earnings and Earning Capacity as Elements of Danger In Personal Injury Litigation, 19 Ark. L. Rev. 304 (1965), and Cates v. Brown, 278 Ark. 242, 645 S.W.2d 658 (1983). The problem here was not the admissibility of Mr. Kelley’s testimony as to his earnings for purposes of proving the impact of an impaired earning capacity, but whether there was sufficient proof for the jury to determine the dollar value of a loss of past and future profits. For the reasons already explained, the evidence was not adequate, and AMI 2206 should not have been given over Ms. Ishie’s objection.

Two additional arguments are rendered moot but are mentioned briefly for purposes of retrial. Ms. Ishie urges that the proof was insufficient to enable the jury to determine the amount of damage to Mr. Kelley’s automobile. But testimony as to the before and after value was sufficient. Mr. Wesley King, whose qualifications as an expert were not challenged, testified that the car was totally destroyed, had a value before impact of $2,500 to $2,600 and a salvage value of $200. Second, Ms. Ishie contends that portions of the deposition of Dr. John L. Wilson should have been stricken because Mr. Kelley failed to tell Dr. Wilson that he had sustained injuries in the second accident and Dr. Wilson could not render a medical opinion that the collision with Ms. Ishie was the cause of Mr. Kelley’s residual complaints. While we think it unlikely that Dr. Wilson’s deposition will be offered in the identical form at retrial, we point out that under the general rule, expert testimony is subject to being stricken if it is demonstrated that the witness “has no reasonable basis whatever for an opinion.” However, if the opinion is merely weak or questionable, that fact bears on the weight to be given the testimony and not to its admissibility. Wallace v. Williams, 263 Ark. 702, 567 S.W.2d 111 (1978), Arkansas State Highway Comm. v. Jones, 256 Ark. 40, 505 S.W.2d 210 (1974). Thus, the burden will be upon Ms. Ishie to demonstrate that Dr. Wilson had no reasonable basis whatever to support his opinion as to the cause and permanency of Mr. Kelley’s injuries. Whether the admission of Dr. Wilson’s identical testimony would constitute reversible error will depend on such additional considerations as whether it is merely cumulative of other medical testimony, as in the first trial, and whether it substantially affects the rights of the defendant so that prejudice results. A.R.E. Rule 103(a). We will not attempt to anticipate how the proof at retrial will develop; we simply alert the trial court and the plaintiff to the fact that in its current state, Dr. Wilson’s deposition presents potential problems.

For the reasons stated, the judgment on the verdict is reversed and the case is remanded for further proceedings.


text:
    Tommy LUCKEY v. STATE of Arkansas
    CR 89-192
    787 S.W.2d 244
    Supreme Court of Arkansas
    Opinion delivered April 23, 1990

      Cash Law Firm, by. William A. Cash, for appellant.

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

This appeal stems from an aggravated robbery of a truck stop convenience store near Prothro Junction, on February 23, 1989. The store clerk recognized the robber as having been in the store several days before. She helped the police make a composite drawing of the perpetrator and later picked appellant out of a photographic lineup.

The appellant waived a jury and after hearing the evidence, the trial court found appellant guilty and sentenced him as an habitual offender with more than four prior felony convictions to 100 years for aggravated robbery and one year for theft. The appellant argues on appeal the evidence was insufficient to sustain the conviction and the sentence is cruel and unusual. We cannot sustain the arguments.

The appellant moved for a directed verdict challenging the sufficiency of the evidence at the end of the state’s case and again at the close. The motions were denied and appellant renews the argument on appeal, now challenging specifically the sufficiency of the clerk’s identification. Appellant has attempted to frame his argument in terms of one of the standard objections to identification testimony, i.e., that if the photo lineup is impermissibly suggestive, the in-court identification is then only admissible if otherwise reliable, based on established factors. See Maulding v. State, 296 Ark. 328, 757 S.W.2d 916 (1988).

Here, the appellant made no pretrial suppression motions and at trial there was no objection when the clerk identified the appellant as the robber, dr when she testified to having identified appellant from the photographic lineup. Similarly, there was no objection when an investigating officer testified about the clerk’s identification from the photo lineup. It was only when the state had finished examining the officer and the photo lineup had been received as an exhibit, that appellant made any objection and then, only to the exhibit itself, on the basis that it was not a fair representation of appellant among the others in the lineup. Thus the argument made in Maulding v. State, supra, not having been made in the trial court, is of no avail. Hedgewood v. State, 297 Ark. 218, 760 S.W.2d 859 (1988).

The only question preserved for appeal is the sufficiency of the evidence as it relates to the reliability of the clerk’s identification. Here there is no question but that the evidence is sufficient to sustain the conviction. The clerk gave unequivocal testimony in her identification of the appellant, saying she was “one hundred percent” certain of her identification. Thus, her testimony was a matter of credibility for the trier of fact. Penn v. State, 284 Ark. 234, 681 S.W.2d 307 (1984). As we have often said, the testimony of one eyewitness alone is sufficient to sustain a conviction. See Carmichael v. State, 296 Ark. 479, 757 S.W.2d 944 (1988).

Appellant also argues that his sentence of 100 years is cruel and unusual and not within the given statutory limits of the habitual offender statute, Ark. Code Ann. § 5-4-501 (1987), which provides:

* * *

(b) A defendant who is convicted of a felony committed after June 30,1983, and who has previously been convicted of four or more felonies or who has been found guilty of four or more felonies, may be sentenced to an extended term of imprisonment as follows:
(1) For a conviction of a Class Y felony, a term of not less than forty years nor more than life . . .

Appellant maintains his lengthy sentence is “more than life” and therefore contrary to the statutory limit provided for in § 5-4-501, as he would then be 128 years old. We answered the same argument in Malone v. State, 294 Ark. 127, 741 S.W.2d 246 (1987), where the sentence imposed was 348 years. We upheld the sentence and stated:

A sentence of ‘more than life’ under our statutes would be life without the possibility of parole or death, the only penalties more severe than life in prison. There is no provision under Arkansas law or the United States Constitution which prohibits a sentence of a term of years which exceeds the usual life span of human beings.

The judgment is affirmed.


text:
    Don RICKENBACKER and Debra Rickenbacker v. WAL-MART STORES, INC.
    89-341
    788 S.W.2d 474
    Supreme Court of Arkansas
    Opinion delivered April 23, 1990

      Gary Eubanks & Associates, by: James Gerard Schulze and Gary L. Eubanks, for appellants.

      Robinson, Staley & Marshall, by: Robert L. Robinson, Jr. and Stephen P. Carter, for appellee.
   Steele Hays, Justice.

On May 18, 1985, Don Rickenbacker, an employee of Henderson Steel Company, was injured during construction of the Wal-Mart Distribution Center at Searcy. Don Rickenbacker and his wife filed suit in White Circuit Court against Wal-Mart Stores, Inc. and Searcy Steel Company, Inc. alleging that each was the general contractor on the job (or, alternatively, either) and therefore liable for Rickenbacker’s injuries. The trial court granted Wal-Mart Stores’ motion for summary judgment on the premise that Rickenbackers’ allegations arose from duties imposed by the terms of a construction contract between Harco Construction Company, Inc., and WalMart Properties, Inc. Under that agreement Harco was to become the general contractor for the distribution center. The trial court held the proper party defendant was Wal-Mart Properties, rather than Wal-Mart Stores. The Rickenbackers appeal from the summary judgment.

ARCP Rule 56 provides that summary judgment is appropriate where the pleadings, depositions, answers to interrogatories and admissions on file, together with affidavits, if any, show that there is no genuine issue of material fact. On appeal, in determining whether there is an issue of fact, the proof is viewed in the same light as though it were a motion for a directed verdict. Accordingly, the evidence is viewed most favorably to the party resisting the motion, with all doubts and inferences resolved against the moving party. Gregory v. Nat’l Life & Acc. Ins., 250 Ark. 770, 467 S.W.2d 770 (1971). The burden of proving that there is no genuine issue of material fact rests with the party moving for summary judgment. Pinkston v. Lovell, 296 Ark. 543, 759 S.W.2d 20 (1988).

Appellants contend the motion for summary judgment should not have been granted because they were led to believe that Wal-Mart Stores was the proper party defendant in reliance on misrepresentations by Wal-Mart Stores. Their contention is based in part on a defense asserted by Wal-Mart Stores in an earlier action filed by the Rickenbackers in federal court. We find no merit in the argument.

Rickenbacker and his wife had initially sued the Harnishchfeger Corporation, manufacturer of a hydraulic crane which was alleged to have caused the injury, and Harco Construction Company, Inc., in federal court. Harco impled WalMart Stores based upon an indemnity agreement between WalMart Stores and Harco. Harnishchfeger filed a third party complaint against Harco, Wal-Mart Stores, and Searcy Steel asking for indemnity and contribution. While that action was pending Harnishchfeger and Harco settled with the Richenbackers for $1,000,000. The claims against Wal-Mart Stores and Searcy Steel were nonsuited.

Under those circumstances Wal-Mart Stores properly appeared and defended in federal court. Wal-Mart Stores did not stand in the shoes of Wal-Mart Properties. Rather, Wal-Mart Stores, as a third-party defendant under the indemnity agreement with Harco, simply defended against the claims asserted against it. Wal-Mart Stores also appeared in the federal suit as a third-party defendant when Harnishchfeger asked for indemnity and contribution. The record does not reflect the basis for Harnishchfeger’s claim for indemnity or contribution from WalMart Stores, but whatever it may have been, Wal-Mart Stores did not engage in misrepresentation simply by pleading a defense to a claim for indemnity and contribution. Furthermore, the construction contract between Wal-Mart Properties and Harco was furnished to the appellants during discovery in the federal action. The contract clearly reflected that Wal-Mart Properties was the proper party to be sued for any claim arising from the construction of the distribution center.

The appellants also assert that appellee engaged in misrepresentation in the state court action by answering the complaint, filing an amended answer, filing a motion for summary judgment, and filing a supplemental motion for summary judgment. In the supplemental motion for summary judgment the appellee asserted that it was the wrong party to be sued. Appellants cite cases from other jurisdictions in which defendants were estopped from asserting a defense under the statute of limitations where plaintiffs were led to believe that they had sued the correct party. For example, in Argenbright v. J.M. Fields Co., 196 So.2d 190 (Fla. Dist. Ct. App. 1967), the defendant/appellee Fields, knowing it neither owned nor operated the store in the complaint, nevertheless conducted extensive discovery in order to lull the plaintiff/appellant into believing that they sued the proper party until the statute of limitations had elapsed as to J.M. Fields of East Florida, Inc.

The appellee here did nothing to enhance a belief by the appellants that they had sued the proper party. The appellants’ complaint was served on the appellee on August 9, 1988, well after the statute of limitations had expired. The appellee answered on August 29,1988. Thus it cannot be said that any action by Wal-Mart Stores was the cause of appellants’ untimeliness. We find no conduct by the appellee nor any misrepresentations made, that could have been the basis of reliance by the appellants that Wal-Mart Stores was the proper party defendant.

In addition the appellants cite two cases involving situations in which an employee or agent of the defendant made verbal representations to the plaintiffs regarding potential liability of the defendant. See Argenbright v. J.M. Fields Co., 196 So.2d 190 (Fla. Dist. Ct. App. 1967), and Layton v. Blue Giant Equipment Company of Canada, Ltd., 105 F.R.D. 83 (1975). Four of the six cases cited by the appellants focus on the issue of amending the original complaints in order to substitute the correct party under the rules of civil procedure. Layton v. Blue Giant Equipment Co. of Canada, Ltd., 105 F.R.D. 83 (1985); Kleinecke v. Monticecito Water District, 147 Cal. App.3d 240, 195 Cal. Rptr. 58 (1983); Smith v. Brush-Moore Newspapers, Inc., 27 Ohio St.2d 111, 271 N.E.2d 846 (1971); Hartford Acc. & Ind. Co. v. Interstate Equip. Corp., 74 F. Supp. 791 (D. N.J. 1947). Here, the appellants made no attempt to amend their pleadings to include the proper party. We have studied the cases cited by the appellants and do not find them dispositive.

Appellants maintain the trial judge erred in granting summary judgment because genuine issues of fact remained. The court determined that the allegations in the complaint arose from duties imposed under the construction contract between Harco and Wal-Mart Properties. Appellants argue that only one of their allegations against Wal-Mart Stores arose from contractual duties. Appellants suggest that Wal-Mart Stores was the wrong defendant only with respect to those allegations arising from contractual duties. Therefore, for some issues of negligence appellants allege that Wal-Mart Stores was the proper party defendant. However, we fail to find any theories of negligence for which Wal-Mart Stores could be liable. The complaint alleges duties by a general contractor to provide a safe work place for its employees and names Wal-Mart Stores as an alternative general contractor. Under Count II of the complaint the appellants allege that Wal-Mart Stores should have provided a safe work place, as well as instruction, training, and supervision of its employees. But these are responsibilities of the general contractor and Wal-Mart Properties delegated these responsibilities to its contractor, Harco. The construction contract between Wal-Mart Properties and Harco in paragraphs 3 and 5 provides that Harco agrees to furnish and pay for all labor, materials, and tools. Furthermore, paragraph 5 expressly states that Wal-Mart [Wal-Mart Properties] shall have no supervision over the contractor or any of its employees, but the contractor will prosecute and direct the work himself.

The appellants allege in the complaint that Wal-Mart Stores agreed to assume responsibility for the safety of the job site. Additionally, they suggest that Wal-Mart Stores as owner of the premises assumed duties and responsibilities for injuries to an employee of a subcontractor. There are no facts supporting these contentions, nor is this argument advanced in appellants’ brief. A review of the documents filed in this case reveals nothing which would raise an issue of fact. And although it was not necessary that the appellants submit affidavits in opposition to those submitted by the appellee, Adams v. Hudspeth Motors, Inc., 266 Ark. 790, 587 S.W.2d 227 (Ark. App. 1979), it is necessary that their response refer to something in the record, such as admissions or answers to interrogatories, raising an issue of fact. The only issue raised in the appellants’ response to the motion for summary judgment, but not argued on appeal, was the fact that Wal-Mart Stores may have been a general contractor, or at least exercised the control of a general contractor. Thus, arguably Wal-Mart Stores may have been a proper defendant if it could be shown it assumed the role of general contractor. Issues of fact as to whether Wal-Mart Stores operated as a general contractor may have existed, but even if Wal-Mart Stores could be deemed to be the general contractor, a general contractor does not owe to employees of a subcontractor a duty to use care to supply them with safe working places or safe tools and appliances unless such duties have been assumed expressly or by implication. Kennedy v. U.S. Const. Co., 545 F.2d 81 (8th Cir. 1976). There were no facts demonstrating that the general contractor expressly or by implication assumed the duty of supplying safe work places or tools.

No basis was established for any liability by Wal-Mart Stores, other than the theory that it operated as the general contractor. As to the liability of Wal-Mart Stores as “general contractor,” the exhibits and testimony demonstrate that Harco operated as the general contractor. Furthermore, the duties and responsibilities of a general contractor, including supervision, were delegated to Harco by Wal-Mart Properties via a construction contract signed June 14, 1984.

We find that the trial judge correctly granted summary judgment for the appellee, although summary judgment should not have been based on the statute of limitations because this affirmative defense is one which must be asserted by Wal-Mart Properties, Inc., a stranger to this action. Nevertheless, if a ruling by the trial court is correct we will affirm, even though the trial court may have announced the wrong reason. Ratliff v. Moss, 284 Ark. 16,678 S.W.2d 369 (1984). Appellants’ complaint arose out of the duties imposed under the terms of the construction contract between Harco Construction Company and Wal-Mart Properties, Inc., and therefore Wal-Mart Properties rather than WalMart Stores was the proper party defendant in this action. As Wal-Mart Stores was not a party to the construction contract, it owed no duties to the appellants and accordingly was not the proper party to sue.

AFFIRMED.

Dudley, J., not participating.

       A non-suit was taken against Searcy Steel Company on April 26, 1989.

       Rickenbacker worked for Henderson Steel Company, a sub-contractor to Searcy Steel, and Searcy Steel worked as a sub-contractor to Harco, the general contractor.


text:
    Chief James VIRDEN, Leroy Boas, Boyce Alford, Lennis Coleman, Arthur Leath and Vernon McMurray, Individually v. Dois ROPER
    89-263
    788 S.W.2d 470
    Supreme Court of Arkansas
    Opinion delivered April 23, 1990

      Winston Bryant, for appellants.

      Bart Mullís Law Firm, by: Bart Mullís, for appellee.
   Steele Hays, Justice.

Appellants-defendants are members of the Pine Bluff Civil Service Commission and the Chief of the Pine Bluff Police Department. Appellee-plaintiff Dois Roper is a captain in the Pine Bluff Police Department. Appellants have been sued as individuals and in their official capacities. They bring this interlocutory appeal only as individuals.

In 1985 the Commission conducted an examination for the position of assistant chief of police. Dois Roper, four lieutenants and another captain took the examination. Lt. Robert G. Brown emerged as the successful applicant.

Following the hiring of Robert Brown, Roper filed an action in the United States District Court against the appellants individually and in their official capacities. Citing 42 U.S.C. § 1983, the complaint alleged Roper was denied due process and equal protection under the 14th Amendment based on violations of state statutes affecting civil service procedures, namely: that Brown’s promotion was in contravention of Ark. Code Ann. § 14-51-301 (1987), that interviews by the Commission failed to follow the provisions of § 14-51-301, that promotion was not based on an open competitive examination, that an oral examination failed to establish a measureable standard, that Roper was not notified of his final rating in comparison to the other candidates, nor allowed to inspect the test results and that no promotion list for assistant chief was established prior to the election.

Appellants moved for summary judgment, and the District Court expressed serious doubt that Roper possessed a property interest, noting that the complaint spoke essentially in terms of the violation of state statutes on civil service which, absent a constitutional violation, do not give rise to a § 1983 claim, citing Baker v. McCollam, 443 U.S. 137 (1979). The District Court saw the issues as a matter of harmonizing state statutes and civil service regulations, issues more appropriate to state courts, and elected to abstain. The complaint was dismissed without prejudice. Roper v. City of Pine Bluff, et al., No. PB-C-86-735 (November 17, 1987).

Roper then filed a complaint in Jefferson Circuit Court on essentially the same grounds, praying for declaratory judgment, that he be installed as assistant chief with back pay, and for an award of damages, attorneys fees and costs. The appellants, in their individual capacities, moved for summary judgment, contending that violations of state statutes, absent a constitutional right, do not give rise to a § 1983 cause of action, that the complaint failed to state an equal protection claim under the 14th Amendment, and that the doctrines of res judicata and qualified immunity barred the plaintiffs cause of action. Appellants’ motion was accompanied by a number of affidavits but the issues were submitted to the trial court on memorandum briefs. The motion was denied and by this appeal appellants renew the arguments advanced in the trial court. For reasons to be explained, we reverse and remand the cause to the trial court for further proceedings.

We must first address jurisdiction and our authority to hear an appeal at this stage of the litigation. While it remains unsettled whether it is obligatory upon state courts to exercise such jurisdiction, the state court option to assume jurisdiction over § 1983 cases is routinely exercised. Martinez v. California, 444 U.S. 277 (1980); Arkansas Writers’ Project, Inc. v. Ragland, 293 Ark. 395, 738 S.W.2d 402 (1987); Burden v. Hayden, 275 Ark. 93, 627 S.W.2d 555 (1982); S. Steinglass, Section 1983 Litigation in State Courts, §§ 9.1, 9.2.

The other jurisdictional consideration concerns the finality of the order. In Jaggers v. Zolliecoffer, 290 Ark. 250, 718 S.W.2d 441 (1986), we dismissed an interlocutory appeal of a § 1983 action for lack of finality. But we distinguished daggers in a subsequent decision, Robinson v. Beaumont, 291 Ark. 477, 725 S.W.2d 839 (1987), by pointing out that the qualified immunity claimed by the appellants in daggers was based on a specific statute which provided only qualified immunity from liability, whereas the immunity defense asserted in Robinson, as in this case, is liability from suit. The appealability of a denial of summary judgment based on qualified immunity from suit is clearly established. Robinson v. Beaumont, supra; Mitchell v. Forsyth, 472 U.S. 511 (1985); and see Cohen v. Beneficial Industrial Loan Corp., 337 U.S. 541 (1948). Ordinarily, that is the only issue that may be raised by an interlocutory appeal. However, when there are closely related questions of law which, in good sense and judicial economy, ought to be decided, we will address those as well. That was the course adopted in Drake v. Scott, 812 F.2d 395 (8th Cir. 1987), with which we agree.

In view of the foregoing, the issue we now address on appeal is whether the trial court properly denied appellants, in their individual capacity, qualified immunity against the § 1983 action.

Appellants first contend the dismissal by the District Court renders appellee’s § 1983 cause of action res judicata. We disagree. The order itself (which is all the record contains pertinent to this issue) reflects that dismissal was grounded on the abstention doctrine, and the general comments questioning whether a § 1983 cause of action was stated were merely dicta. Those comments, seemingly gratuitous, were not essential to the holding of the District Court and do not preclude the appellee from filing suit in state court. See Leslie v. Bolen, 762 F.2d 663 (8th Cir. 1985).

Laying jurisdiction aside, to be entitled to qualified immunity, the actions of an individual must not violate “clearly established statutory or constitutional rights of which a reasonable person would have knowledge.” Robinson v. Beaumont, supra; Mitchell v. Forsyth, supra. Such violations must relate to federal statutes and constitution, however, in order to give rise to a § 1983 action. M. Schwartz, Section 1983 Litigation §§ 3.1, 3.11 (1986); R. Rotunda, Treatise on Constitutional Law Vol. 2, §§ 19.19, 19.20 (1986). Appellants argue that, since no federal statutory or constitutional violations are shown to have occurred, no § 1983 action is available to appellee, rendering the issue of qualified immunity moot. See Drake v. Scott, supra. They maintain in the alternative if a violation of a constitutional right occurred, it is not a “clearly established” right and, hence, appellants are entitled to qualified immunity under Mitchell, supra. We agree, and so we first consider whether the allegations of the complaint meet that requirement.

Appellee alleges violations of Ark. Code Ann. § 14-15-301 (1987) . That section contains numerous provisions affecting civil service commissions of cities of the first class. Appellee asserts that “at the very least” the appellants violated § 301 (4)(A)(ii), providing that no person shall be eligible for advancement from a lower to a higher rank (except in an emergency) until he or she shall have served one year in the lower rank, and § 301(6)(A), stating that the Commission shall certify to the department head the three highest names on the eligibility list, from which the department head shall select one of the three for appointment. But the issue is not whether one or more of these provisions may have been misinterpreted or disregarded. The issue is whether the alleged noncompliance with the civil service statutes constitutes a violation of appellee’s constitutional rights.

This court has dealt with some frequency with cases in which an individual aggrieved under the civil service statutes has filed suit to declare a particular practice or course of action by a commission to be in violation of law. See, for example, Worth v. Civil Service Commission, 294 Ark. 643, 746 S.W.2d 364 (1988); Bradley v. Bruce, 288 Ark. 342, 705 S.W.2d 431 (1986); Amason v. City of El Dorado, 281 Ark. 50, 661 S.W.2d 364 (1983); Civil Service Commission v. Matlock, 205 Ark. 286, 168 S.W.2d 424 (1943). It is clear that civil servants have a right under the act to challenge the disputed conduct. But it is by no means clear that such challenges are constitutionally based. We have never held that a breach of civil service statutes has constitutional overtones to the extent that any misstep in the civil service process, even a well intentioned but incorrect interpretation of the statutes, subjects the individual commissioners to liability for civil damages. Indeed, we are not aware of any authority for such a conclusion, and nothing in the act, or in our several cases, or in appellee’s brief compels such a course. Both parties cite Dalton v. City of Russellville, 290 Ark. 603, 720 S.W.2d 918 (1986), for their position. But it was not necessary in that case to decide whether Dalton, a Russellville police officer discharged for allegedly accepting outside employment without permission in violation of department rules, had a property interest in continued employment, because it was clear that he had received all the process he was due under the civil service statutes in the form of written notice of the grounds for discharge, right to a hearing and an appeal. And even if Dalton had a property interest in his continued employment, which we did not expressly decide, it would not necessarily follow that such interest in continued employment translates into a constitutionally protected interest in promotion to higher rank.

Admittedly a state may create a constitutionally protected liberty or property interest through statutory or regulatory measures. Hewitt v. Helms, 459 U.S. 466 (1983); Farmer v. Lane, 864 F.2d 473 (7th Cir. 1988); Edwards v. Johnson Co. Health Department, 885 F.2d 1215 (4th Cir. 1989). In Hewitt, for example, the Supreme Court found a liberty interest had been created through the use of repeated mandatory language in certain state regulations along with specified substantive predicates, producing a constitutionally protected interest not otherwise extant. See also S. Herman, The New Liberty: The Procedural Due Process Rights of Prisoners and Others, 59 N.Y.U. L. Rev. 482 (1984).

Even so, for the limited scope of this review, it is not necessary for us to determine at this time whether there is a constitutional right, if we initially determine that such a constitutionally protected interest has not yet been clearly established.

Whether an official may prevail in his qualified defense depends on the ‘objective reasonableness of his conduct as measured by reference to clearly established law.’ No other ‘circumstances’ are relevant to the issue of qualified immunity. Davis v. Scherer, 468 U.S. 183 (1984). The analysis therefore ends if the court finds the federal law is not clearly established when the administrative official acted. R. Rotunda, Treatise on Constitutional Law § 19.29 (1986).

See also Mitchell v. Forsyth, supra.

Such an approach is also in keeping with traditional appellate review that we do not decide a constitutional question if the issue can be resolved on other grounds, McNew v. McNew, 262 Ark. 567, 559 S.W.2d 155 (1977). Consequently, if we determine first that this issue has not yet been clearly established, as that phrase has been interpreted by the courts, we may thereby dispose of the question before us.

Our analysis is impeded by the fact that the Supreme Court has not sharply defined “clearly established” law within the context of qualified immunity, nor has some common ground emerged from the general case law. See M. Schwartz, Section 1983 Litigation § 7.13 (1986). That is to say, there is no real agreement among the courts on how firmly the law must be established or recognized.

However, for our.purposes, that presents no real problem, for we have found that the law on the issue in this case, i.e., whether the violations of these statutes are of constitutional magnitude, is not clearly established under any definition of that phrase. Our research has turned up no precedent for that position either from our own case law or from any other jurisdictions. Nor has the question been one for which we ourselves can easily formulate an answer from the existing law in this area. To the contrary, the law under the Hewitt v. Helms line of cases is, at most, still in an evolving and unsettled state. See e.g. Edwards v. Johnson County Health Department, supra; Farmer v. Lane, supra; 59 N.Y.U.L. Rev., supra.

In light of the foregoing, we hold that for the purposes of this appeal it has not been shown that the alleged violation of the state statutes in question constitutes a clearly established right under the federal constitution. See Mitchell, supra. It follows that the appellants in their individual capacities are entitled to qualified immunity in this § 1983 action. Accordingly, the trial court’s decision is reversed and the case is remanded for further proceedings consistent with this opinion.

Price, J., not participating.

       Qualified immunity under § 1983 has developed under its own federal common law, and while there are some obvious similarities to state immunities, they are distinct doctrines. See S. Steinglass, Section § 1983 Litigation in State Courts § 15.2(b), § 15.3 (1987);Shepard’s/McGraw Hill, Civil Action Against State Government § 6.10 (1982). While there may be state immunities available to appellants in either their individual or official capacity, that issue has not been raised and is not addressed in this opinion.

       The record indicates that Robert Brown had served as lieutenant from September 1, 1984, and was promoted to assistant chief on October 3, 1985.