author:
David Newbern, Justice. Tom. Glaze, Justice,
      Robert L. Brown, Justice,

text:
    R. Don CAPLENER and Kathy Caplener v. BLUEBONNET MILLING COMPANY; Fry’s Reproductive Center; and English Lawn Garden and Feed
    95-221
    911 S.W.2d 586
    Supreme Court of Arkansas
    Opinion delivered December 18, 1995

      The Samuel A. Perroni Law Firm, P.A., by: Samuel A. Perroni, for appellants.

      Trammell Law Firm, by: Thomas F. Meeks, for appellee Bluebonnet Milling Co.

      Margaret Meads, P.A., by: Margaret Meads, for appellee English Lawn Garden & Feed.
   David Newbern, Justice.

In the summer of 1993, 23 young ostriches belonging to the appellants, Don and Kathy Caplener, died. The Capleners sued Bluebonnet Milling Company (Bluebonnet) which manufactured the feed they had fed the ostriches. They also sued the feed wholesaler, Fry’s Reproductive Center (Fry’s), and the retailer, English Lawn, Garden & Feed (English). The Trial Court entered summary judgment in favor of the defendants. The Capleners contend summary judgment was inappropriate as a genuine issue of material fact remained whether defective feed caused the deaths of the Ostriches. We affirm due to the failure to produce evidence that the feed caused the ostriches to die. We also affirm on cross-appeal the Trial Court’s refusal to award attorney’s fees to the prevailing parties and his denial of English’s request for indemnification for litigation expenses from Bluebonnet.

Mr. Caplener’s deposition testimony was that his ostriches, which ranged in age from one month to four months, were being fed Bluebonnet Chick Starter. Between May 28, 1993, and June 9, 1993, four bags of the feed were purchased from English and used. On June 16, 1993, some of the ostriches began to show symptoms of illness.

Dr. James W. Mills, a veterinarian, executed an affidavit on September 9, 1993. He said he was called to treat the birds. He initially prescribed antibiotics and electrolytes and then flushing with water. The birds did not respond to the treatment. Dr. Mills then recommended changing to a different brand of feed. None of the treatments succeeded. From postmortem operations Dr. Mills discovered the feed had impacted in the birds’ stomachs and that caused their deaths. He stated, “blood tests . . . showed normal cultures . . . and no bacteria or infection present which could have caused death.”

The Capleners had a laboratory analysis performed on a sample of the feed which had been left in a feed pan after most of the Bluebonnet feed had been removed. The results from the first sample sent to the laboratory were negative, but a second sample contained four parts per billion of aflatoxin. It is undisputed that aflatoxin, in concentrated amounts, can be lethal to ostriches. According to Mr. Caplener’s deposition, lettuce or boiled eggs had been sprinkled on the Bluebonnet feed occasionally to encourage the birds to eat.

The complaint alleged the feed was adulterated due to the presence of aflatoxin. It was amended to add the allegation of failure to warn and, after the motion for summary judgment was filed, it was amended to allege liability based on the feed being indigestible.

In a deposition, Dr. Mills contradicted his earlier affidavit. He admitted that both e. coli and klebsiella pathogens were found in the intestines of the ostriches, and that death by bacterial pathogen could not be ruled out. His deposition testimony was also internally contradictory. At one point, Dr. Mills opined that the birds died from feed impaction, but in another part of his deposition, he stated he could not give a definite opinion as to why the birds died. Finally, when questioned on the quality of the feed, the following colloquy occurred:

MR. MEEKS [counsel for Bluebonnet]: What caused the impaction?
DR. MILLS: I don’t know the answer to that.
* 3= *
MR. MEEKS: Okay. Well, I guess what I’m asking: Are you going to testify at trial that there was something wrong with the food and that caused them to impact?
DR. MILLS: No, because I don’t know that there was anything wrong with the food.
MR. MEEKS: Okay.
DR. MILLS: And I can’t stand up and say that the food was bad. No, I can’t do that.

On August 15, 1994, Fry’s and English filed a joint motion for summary judgment. Bluebonnet moved for summary judgment on the same day. Both motions were based on the Capleners’ failure to produce evidence that the feed proximately caused the deaths of the birds. Attached to Bluebonnet’s motion were excerpts from the depositions of Dr. Mills and Richard Plant, a chemist who had examined some of the leftover feed and found low levels of aflatoxin. Mr. Plant said he was not an expert on the effects of aflatoxin on ratites and that he did not know how much aflatoxin it would take to kill an ostrich. He stated that his opinion was based simply on the fact that toxins are known to vary widely in their concentration within a batch of feed. He also stated that he was not going to testify that aflatoxin killed the birds. Also attached were affidavits from Dr. John Reagor, the head of the Texas Diagnostic Toxicology Department, and Dr. Karen Hicks-Alldredge, a veterinary expert on the care of ratites. Both concluded, based on the deposition testimony in the record, that the birds did not die from aflatoxin poisoning.

With their response to the motion for summary judgment the Capleners filed a second affidavit of Dr. Mills, dated August 17, 1994, in which he stated, in contrast to his deposition testimony, “I believe that there was something wrong with the commercial feed that prevented it from digesting properly. As I testified, I did not test the feed and could not say in what way the feed was defective.”

The Trial Court granted a motion by Bluebonnet to strike Dr. Mills’s second affidavit and granted the defendants’ motions for summary judgment. The Capleners moved for reconsideration. Attached to the motion, in addition to Dr. Mills’s two affidavits and excerpts from his deposition testimony, were several customer complaint forms which showed that other ostrich farmers had complained of molded feed. The Trial Court denied the motion for reconsideration.

The Trial Court also refused to award attorney’s fees and refused to order Bluebonnet to indemnify English and Fry’s for the cost of the litigation. The Capleners appeal from the summary judgment. Bluebonnet and English appeal from the denial of attorney’s fees, and English appeals from the denial of indemnification.

1. Material fact issue

When summary judgment is sought, the Trial Court must decide if “the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.” Ark. R. Civ. P. 56(c); Oglesby v. Baptist Medical System, 319 Ark. 280, 891 S.W.2d 48 (1995); Forrest City Mach. Works v. Mossbacher, 312 Ark. 578, 851 S.W.2d 443 (1993).

Among the attachments to Bluebonnet’s summary judgment motion were excerpts from Dr. Mills’s deposition testimony as well as testimony of the toxicology expert who said the postmortem evidence did not indicate the ostriches died from aflatoxins. Also included was testimony of the ratite expert who concluded there was insufficient information to identify the specific cause of death of the ostriches.

Once the movant makes a prima facie showing of entitlement to summary judgment, the respondent must meet proof with proof to demonstrate a remaining genuine issue of material fact. Sanders v. Banks, 309 Ark. 375, 830 S.W.2d 861 (1992). When a party cannot present proof on an essential element of the claim, the moving party is entitled to judgment as a matter of law. Id.

In response to the motion for summary judgment, the Capleners were required to produce some evidence which would raise a material question of fact as to whether the feed manufactured by Bluebonnet caused the impaction. They submit that the second affidavit of Dr. Mills, in which he stated the feed was “indigestible,” was sufficient to create a fact issue as to whether the feed caused the birds to die. We hold that the Trial Court correctly excluded the second affidavit when considering the motions for summary judgment.

Our summary judgment rule, Ark. R. Civ. P. 56, is virtually the same as F.R.C.P. 56. The General Assembly adopted the Federal Rule 56 initially by Act 123 of 1961, and we continued to follow the federal model upon adoption of the Arkansas Rules of Civil Procedure which became effective in 1979. As we do with others of our rules modeled on the federal rules, we refer to federal court decisions in our interpretation of Rule 56. Irvin v. Jones, 310 Ark. 114, 832 S.W.2d 837 (1992); Short v. Little Rock Dodge, 297 Ark. 194, 795 S.W.2d 104 (1988).

While we have not addressed the issue, federal courts have held that an affidavit which is inherently and blatantly inconsistent with prior deposition testimony may not be used to establish a question of fact to ward off the granting of a summary judgment motion. Camfield Tires, Inc. v. Michelin Tire Corp., 719 F.2d 1361 (8th Cir. 1983); Radobenko v. Automated Equip. Corp., 520 F.2d 540 (9th Cir. 1975); Perma Research & Dev. Co. v. Singer Co., 410 F.2d 572 (2d Cir. 1969); Vanlandingham v. Ford Motor Co., 99 F.R.D. 1 (N.D. Ga. 1993). See also Jacobs v. Fire Ins. Exch., 42 Cal.Reptr.2d 906 (Cal.App. 3 Dist. 1995). These cases indicate that a subsequent affidavit may perhaps be used to explain internally inconsistent deposition testimony, see Kennett-Murray Corp. v. Bone, 622 F.2d 887 (5th Cir. 1980); however, as the Court said in the Perma Research case, “If a party who has been examined at length on deposition could raise an issue of fact simply by submitting an affidavit contradicting his own prior testimony, this would greatly diminish the utility of summary judgment as a procedure for screening out sham issues of fact.”

Although Dr. Mills’s deposition testimony was not a model of clarity, he stated definitely that he did not know what had caused the Capleners’ ostriches to die and did not plan to testify on the subject. In his later affidavit he said the birds died because there was something wrong with their feed which caused it to impact. The contradiction is direct, and we hold it was not error for the Trial Court to disregard Dr. Mills’s second affidavit.

In addition to Dr. Mills’s affidavits, the Capleners presented other evidence in their motion for reconsideration that Bluebonnet and its distributors had received other complaints about feed having mold, being in “clumps,” and being discolored. Even if that evidence were to be appropriate for consideration at the late date it was presented, it was insufficient to raise an issue of fact whether the feed eaten by the Capleners’ ostriches cause their deaths.

2. The evidence standard

The Capleners also argue the Trial Court used the wrong standard in determining whether to grant the motion for summary judgment. The contention is based on the Trial Court’s letter ruling in which he wrote, “There is no substantial evidence why [the ostriches] died. There is no substantial evidence the feed was defective or that it caused the deaths.” In responding to the Capleners’ motion for reconsideration, the Trial Court did not use the term “substantial evidence,” but it did appear in the order granting summary judgment.

Generally, a trial court looks for substantial evidence when determining whether to grant a motion for a directed verdiet. See Mahan v. Hall, 320 Ark. 473, 897 S.W.2d 571 (1995); See also Jackson v. State, 290 Ark. 375, 720 S.W.2d 282 (1986). We have, however, said that if the defendant conclusively shows that some fact essential to the plaintiff’s cause of action is wanting and the plaintiff is unable to offer substantial evidence to the contrary, a summary judgment is proper. See Tillotson v. Farmers Ins. Co., 276 Ark. 450,637 S.W.2d 541 (1982); Lee v. Doe, 274 Ark. 457, 626 S.W.2d 353 (1981); Akridge v. Park Bowling Ctr., Inc., 240 Ark. 538, 401 S.W.2d 204 (1966). Our use of the term “substantial evidence” in opinions describing the evidence which must be produced in response to a motion for summary judgment was ill advised. Substantial evidence is that which is sufficient to compel a conclusion one way or the other and which induces the fact finder to go beyond mere suspicion or conjecture. Aronson v. Harriman, 321 Ark. 359, 901 S.W.2d 832 (1995); Barnes, Quinn, Flake & Anderson, Inc. v. Rankins, 312 Ark. 240, 848 S.W.2d 924 (1993).

As discussed above, the standard to be applied in summary judgment cases is whether there is evidence sufficient to raise a fact issue rather than evidence sufficient to compel a conclusion on the part of the fact finder. Although it was wrong for the Trial Court to have used the term “substantial evidence,” some of our prior cases notwithstanding, the error was not prejudicial. As noted in the first segment of this opinion, the Capleners were unable to present evidence to show that a defect in the ostrich feed supplied by the defendants was the cause of the birds’ deaths; thus no genuine issue of material fact remained to be decided. We do not presume that prejudice has resulted from a trial court’s error, and we will not reverse for error unless prejudice is demonstrated. People’s Bank & Trust Co. v. Wallace, 290 Ark. 589, 721 S.W.2d 659 (1986). See also Mikel v. Hubbard, 317 Ark. 125, 876 S.W.2d 558 (1994); Carton v. Missouri Pac. R.R., 315 Ark. 5, 865 S.W.2d 635 (1993); Webb v. Thomas, 310 Ark. 553, 837 S.W.2d 875 (1992).

3. Attorney’s fees

Bluebonnet and English argue that the Trial Court should have awarded attorney’s fees based on Ark. Code Ann. § 16-22-308 and pursuant to Ark. R. Civ. P. 11. The statute provides:

In any civil action to recover on an open account, statement of account, account stated, promissory note, bill, negotiable instrument, or contract relating to the purchase or sale of goods, wares, or merchandise, or for labor or services, or breach of contract, unless otherwise provided by law or the contract which is the subject matter of the action, the prevailing party may be allowed a reasonable attorney fee to be assessed by the court and collected as costs.

The award of attorney’s fees is discretionary under the statute. Little Rock Wastewater Util. v. Larry Moyer Trucking, 321 Ark. 303, 902 S.W.2d 760 (1995). Neither party cites authority or presents argument indicating that the Trial Court abused his discretion. Absent such authority or argument, we find no abuse of discretion in denying attorney’s fees pursuant to the statute.

Rule 11 requires an attorney to make a reasonable inquiry into the law prior to signing a pleading, motion, or other paper. The rule states, in part, “If a pleading, motion or other paper is signed in violation of this rule, the court... shall impose upon the person who signed it... an appropriate sanction, which may include an order to pay . . . the amount of the reasonable expenses incurred.” Ark. R. Civ. R 11; Whetstone v. Chadduck, 316 Ark. 330, 871 S.W.2d 583 (1994). The Trial Court has discretion in determining whether a violation occurred. Whetstone v. Chadduck, supra; See also Bratton v. Gunn, 300 Ark. 140, 111 S.W.2d 219 (1989). Only if this discretion is abused will we reverse. Whetstone v. Chadduck, supra; Ward v. Dapper Dan Cleaners and Laundry, Inc., 309 Ark. 192, 828 S.W.2d 833 (1992). The Trial Court did not find a violation of Rule 11, and there is simply no evidence that the determination was an abuse of discretion.

English makes the separate contention that it was entitled to attorney’s fees pursuant to Ark. Code Ann. § 16-22-309 (Repl. 1994) which provides for award of an attorney’s fee when a claim is brought absent a justiciable issue. The statute describes a claim lacking a justiciable issue as one commenced “in bad faith solely for purposes of harassing or maliciously injuring another or delaying adjudication without just cause or that the party or the party’s attorney knew, or should have known, that the . . . claim . . . was without any reasonable basis in law or equity and could not be supported by a good faith argument of an extension, modification, or reversal of existing law.”

Had discovery shown the feed which impacted the ostriches’ stomachs to have been defective, perhaps by a greater presence of aflatoxin, an issue might have arisen as to how it appeared in the feed, and that could have raised questions about its handling and storage by English. There has been no showing of bad faith or harassment or that the claim was without “any reasonable basis.”

4. Indemnity

English submits that it is entitled to indemnification under Ark. Code Ann. § 16-116-107 (1987). The statute provides that “a supplier of a defective product who was not the manufacturer shall have a cause of action for indemnity from the manufacturer of a defective product arising from the supplying of the defective product.” [Emphasis added.]

When the language of a statute is plain and unambiguous, we give the language its plain and ordinary meaning. Omega Tube & Conduit Corp. v. Maples, 312 Ark. 489, 850 S.W.2d 317 (1993); City of Fort Smith v. Tate, 311 Ark. 405, 844 S.W.2d 356 (1992). In this instance, the defective product claim has failed.

Affirmed.

Glaze and Brown, JJ., dissent.

Tom. Glaze, Justice,

dissenting.

I join in Justice Brown’s dissent, but I also believe this case must be reversed and remanded because the trial court utilized the wrong standard in granting the appellee’s summary judgment. The majority opinion recognizes this point, states the trial court’s use of the “substantial evidence” was incorrect, but then affirms the trial court’s ruling, saying the error was not prejudicial. From the record, we cannot be sure the trial court was not requiring plaintiffs to prove their case by substantial evidence. That fact, alone, is sufficient prejudice.

Brown, J. joins this dissent.

Robert L. Brown, Justice,

dissenting.

In the case at hand Dr. Mills, a veterinarian, was adamant throughout that impacted bird feed had caused the birds to die. He had performed the postmortems on the birds and knew whereof he spoke.

On September 9, 1993, which was months before the first complaint was filed by the Capleners on January 31, 1994, Dr. Mills averred by way of affidavit:

After the birds died, I posted them, i. e., cut them open and examined them. They were all impacted with commercial bird feed. They did not have sufficient grass within them to cause a problem. There were no other foreign objects inside them. Their stomachs were swollen with food. They died from food impaction by commercial bird feed.
I advised Don to change bird feed after a few of the ostriches died because I determined that the ostriches ate the food and the food impacted them, which caused their deaths.

On July 15, 1994, Dr. Mills’s deposition was taken, and he testified that impaction killed the birds but that he did not know what caused the impaction.

Motions for summary judgment were filed by the appellees on August 15, 1994, and two days later on August 17, 1994, Dr. Mills averred again by way of affidavit:

After reviewing my deposition, I discovered that my answers left it unclear as to my belief regarding cause of death of Don Caplener’s ostriches.
It is my belief that the primary cause of death of these birds was feed impaction resulting from indigestible feed. I believe a virus or bacteria contracted by any of these birds would have been a secondary infection that resulted from the feed impaction. I did not observe anything to indicate that these birds were suffering from shock or stress. On posting, these birds appeared generally healthy and I did not observe any other abnormalities.
For these reasons, I believe that there was something wrong with the commercial feed that prevented it from digesting properly. As I testified, I did not test the feed and could not say in what way the feed was defective.

On August 25, 1994, and August 26, 1994, the respective appellees moved to strike Dr. Mills’s second affidavit. The trial court’s letter opinion of September 6, 1994, struck the second affidavit and granted the appellees’ motions for summary judgment.

The majority decision affirms the striking of the second Mills affidavit on the basis that it contradicts Dr. Mills’s deposition. But there was a reason for the second affidavit. Dr. Mills is a veterinarian, not a chemist or toxicologist. He did not test the feed or know precisely how it was defective and why it impacted. Thus, he stated at deposition that he could not testify at trial what exactly was wrong with the feed. But he never wavered from his opinion that feed impaction caused the birds to die.

A reasonable explanation for a statement made in deposition seems perfectly permissible to me, and I would not decide this case by striking the second Mills affidavit. Moreover, there is still the first Mills affidavit where he unmistakably opined that the birds died of feed impaction and where he states that he advised the Capleners to change bird feed.

Admittedly, why the commercial feed impacted remains an open question. The affidavits supporting the appellees’ motions for summary judgment discounted aflatoxin as a cause, as the majority opinion points out, but in appellants’ second amended complaint allegations of adulterated feed go beyond the assertions related to aflatoxin. The appellants should have the right to further develop their case.

I would reverse the order of summary judgment and remand.

Glaze, J., joins.


source: Caselaw Access Project

author: David Newbern, Justice.

license: Public Domain

text:
    Patrick HALTIWANGER v. STATE of Arkansas
    CR 95-837
    912 S.W.2d 418
    Supreme Court of Arkansas
    Opinion delivered December 18, 1995

      Maxie G. Kizer, for appellant.

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

Patrick Haltiwanger was convicted of two counts of aggravated robbery and sentenced to two consecutive terms of imprisonment for 30 years resulting from the robberies of two convenience stores. He contends the evidence was insufficient. He also contends the Trial Court erred in refusing to allow him to introduce in evidence video tapes portraying robberies by others of convenience stores to show that some other person was committing robberies in a manner similar to the ones charged against him and that person might have committed the offenses with which he was charged. Neither point has been preserved for appeal. The motion for a directed verdict was not sufficiently specific, and the video tapes were not proffered. We affirm the conviction.

On June 10, 1994, at approximately 9:50 p.m., a man entered the Shell Git-N-Go in Pine Bluff, pulled a pistol, and told the Clerk, John Ridgeway, “Give me the money. Give me the money now.” Mr. Ridgeway opened the cash register and told the robber, “There it is. Take what you want.” The man took the money and left.

Just after midnight on June 11, 1994, a man entered the Jr. Food Mart on Cherry Street in Pine Bluff and asked the cashier, Larry Woodcock, for a pack of cigarettes. After Mr. Woodcock got the cigarettes, the man pulled a pistol and said “Give me all the money.” Mr. Woodcock complied with the request, and the robber said “Give me more.” Mr. Woodcock gave the robber a box of food stamps and checks, -and the robber left.

Mr. Ridgeway and Mr. Woodcock viewed a photographic lineup. Mr. Ridgeway identified Mr. Haltiwanger from the photos. Mr. Woodcock was not able, at that time, to identify Mr. Haltiwanger. Mr. Haltiwanger was arrested. Then Ricky Shine, a patron at the store where Mr. Woodcock worked, who had been present when the robbery occurred, was shown the photographic lineup and identified Mr. Haltiwanger as the robber of the Jr. Food Mart.

Prior to trial, Mr. Haltiwanger moved to admit video tapes showing similar robberies of other convenience stores which occurred after his arrest and during his incarceration. The Trial Court denied the motion on the ground that the videotapes were irrelevant.

At trial, Mr. Ridgeway stated he was less than four feet from the perpetrator during the crime, the lighting was bright, and he was face-to-face with the perpetrator for two to four minutes. He then identified Mr. Haltiwanger as the man who had robbed the Git-N-Go. Mr. Woodcock testified that, based on his recollection from the crime, he recognized Mr. Haltiwanger as the man who had robbed the Jr. Food Mart. According to Mr. Woodcock, he could clearly see the perpetrator’s face for about 30 seconds. Mr. Shine stated he was popping popcorn in the store when the robbery occurred and that Mr. Haltiwanger came in, pulled a gun, and demanded money. He testified he had known Mr. Haltiwanger for four years prior to the robbery.

At the close of the State’s case, counsel for Mr. Haltiwanger approached the bench and said “I’d like to have the appropriate opportunity to let [the] record reflect that I made a motion for directed verdict.” The Court denied the motion. At the close of all the evidence and outside the hearing of the jury the Court said, “I need the record to reflect that the Defendant did at the close of the State’s case move the court for a directed verdict which the court denied. The motion was again renewed at the conclusion of the Defendant’s case. Both those motions were made at a side-bar conference, and they are now being put on the record and outside the hearing of the jury.”

The jury was then instructed and returned a verdict of guilty on each count.

1. Sufficiency of the evidence

The sufficiency of the evidence is challenged by a motion for directed verdict. Stewart v. State, 320 Ark. 75, 894 S.W.2d 930 (1995); Evans v. State, 317 Ark. 449, 878 S.W.2d 409 (1994); Glick v. State, 275 Ark. 34, 627 S.W.2d 14 (1982). A challenge to the sufficiency of the evidence requires the moving party to apprise the Trial Court of the specific basis on which the motion is made. Stewart v. State, supra; Goins v. State, 318 Ark. 689, 890 S.W.2d 602 (1995); Daffron v. State, 318 Ark. 182, 885 S.W.2d 3 (1994); Walker v. State, 318 Ark. 107, 883 S.W.2d 831 (1994). Neither in the original motion nor in the evidence that it was renewed is there any indication that any specific deficiency in the evidence was called to the Trial Court’s attention. We decline to consider the point further.

2. The video tapes

Mr. Haltiwanger contends the Trial Court should have allowed him to present the videotapes because they tended to prove another person committed the crimes of which he was accused. No proffer of the tapes was made.

To challenge a ruling excluding evidence, an appellant must proffer the excluded evidence so we can review the Trial Court’s decision, unless the substance of the evidence is apparent from the context. A.R.E. Rule 103(a)(2); Bowen v. State, 322 Ark. 483, 911 S.W.2d 555 (1995); Wade v. Grace, 321 Ark. 482, 902 S.W.2d 785 (1995); Davis v. State, 319 Ark. 460, 892 S.W.2d 472 (1995); Cupples v. State, 318 Ark. 28, 883 S.W.2d 458 (1994). We would have to know a good deal more about the video tapes in order to review the Trial Court’s determination that they were irrelevant. Absent the proffer, we have no means of determining if prejudice occurred. The failure to proffer evidence so that the appellate court can make that determination precludes review of the issue on appeal. See Roe v. State, 310 Ark. 490, 837 S.W.2d 474 (1992).

Affirmed.


text:
    REGIONAL CARE FACILITIES, INC. d/b/a Regional Healthcare Center of Bentonville v. ROSE CARE, INC.
    95-458
    912 S.W.2d 409
    Supreme Court of Arkansas
    Opinion delivered December 18, 1995

      Hilburn, Calhoon, Harper, Pruniski & Calhoon, Ltd., by: Sam Hilburn and Pamela A. Mosley, for appellant.

      Matthews, Campbell, Rhoads, McClure & Thompson, P.A., by: David R. Matthews, for appellee.

      The Rose Law Firm, A Professional Association, by: Richard T. Donovan, for Beverly Enterprises-Arkansas, Inc.
   David Newbern, Justice.

The issue in this appeal is whether the Arkansas Health Services Agency failed to give proper notice to potential applicants for a permit of approval (POA) to construct a new nursing home in Benton County. The appellee, Rose Care, Inc., appealed from the granting of a permit to the appellant, Regional Care Facilities, Inc., by the Arkansas Health Services Commission. The Trial Court agreed with the contention of Rose Care, Inc., that the POA should not have been granted due to lack of notice. Regional has appealed from that decision. We agree that the Commission failed to follow its announced rules by not providing proper notice to potential POA applicants, thus the decision is affirmed.

The facts are not disputed. In February, 1992, the Agency published notice that a POA would be issued by the Commission for one 70-bed nursing home facility in Benton County. Four applications were submitted in response to the notice. Regional Care Facilities, Inc. (Regional), the appellant, filed two applications, one for a 70-bed unit in Rogers and one for a 70-bed facility in Bentonville. Rose Care applied to build a 70-bed facility in Bentonville. The other application was filed by Innisfree for a 70-bed nursing home in Rogers.

The Agency “in considering the need for only one facility” recommended to the Commission that the POA be awarded to Innisfree. Included in the Agency recommendation, however, was the statement that the Commission “might consider approving a second facility.” The Agency ultimately recommended that a second POA be granted to Regional for the construction of a 70-bed unit in Bentonville.

The Agency then notified the applicants of its recommendations and published notice of a Commission hearing on “Proposals for new 70-bed nursing homes.” At the hearing, each applicant discussed its application. The Rose Care representative voiced concern over the possibility of the approval of a second POA. He expressed surprise at the suggestion of a second POA and referred to the lack of notice concerning the second POA.

The Commission followed the Agency recommendations and awarded one POA to Innisfree for a 70-bed facility in Rogers, and one to Regional for a 70-bed facility in Bentonville. Notice of the decision was sent to the applicants, and Regional and Rose Care appealed to the Commission seeking, in effect, reconsideration of the decision.

At the appeal hearing, Rose Care argued that the Agency did not give proper notice that a second POA would be considered prior to making its recommendations to the Commission. Rose Care also contended the Commission had violated its own rules when it granted the second POA.

Orson Berry, director of the Agency, testified he did not think the notice was mandatory if the Commission found certain extenuating circumstances. He agreed that, to his knowledge, no notice was given to Rose Care of the Agency’s conclusion to suggest approval of a second POA. Mr. Berry also confirmed that the Commission’s notice of the need the Agency had determined spoke in terms of one 70-bed facility.

The Commission denied the appeal, and Rose Care sought judicial review. Regional intervened, taking the position that the Commission’s decision was not improper. Beverly Enterprises— Arkansas, Inc., intervened to object to the Commission’s action. The Trial Court’s ruling included the following:

The Court does not rule on whether the Commission had authority to grant more than one [POA], but simply rules that they could not do so under the procedures which they followed because they did not give adequate notice. The failure to give notice as required by their own rules and by the rights of due process deprived persons who are considered affected persons and who would be interested in whether or not new nursing home permits would be granted of the right to appear before the Commission and submit information and/or objections. For this reason, the Court will reverse the decision and remand it to the Commission to reopen the case and provide the adequate notice as is called for in their own rules and regulations to all affected persons concerning the granting of what has been called in the record the second permit of approval.

Regional contends that adequate notice was given to Rose Care because the Agency’s recommendations were supplied prior to the initial Commission hearing and a notice was published seeking “Proposals for new 70-bed nursing homes.” Rose Care and Beverly respond that the notice was inadequate because it came after the applications were submitted to the Agency and because the original notice contemplated only one new 70-bed facility.

This is not a typical appeal of an exercise of judgment by an administrative agency in which we conduct a limited review of the propriety of an agency’s action to determine if it was arbitrary and capricious. See, e.g., Arkansas Dep’t of Human Servs. v. Kistler, 320 Ark. 501, 898 S.W.2d 32 (1995); Arkansas Bank & Trust Co. v. Douglass, 318 Ark. 457, 885 S.W.2d 863 (1994). We are, rather, concerned with whether the Commission violated its own announced rules with respect to the decision in question by failure to give proper notice of the intention to recommend to the Commission that two, rather than one, nursing home POAs be granted.

Arkansas Code Annotated § 20-8-106(a) (Repl. 1991) requires that the Commission adopt standards for review of requests for new nursing home facilities on a county-by-county basis. In its regulations, the Commission requires that notice of a proposed review of applications for a POA be given. Although it is not specified, to have any meaning whatever the notice must spell out that for which applications may be submitted. The Agency did that in this case, but then, in effect, changed the notice after the applications had been reviewed by it and its recommendations prepared for the Commission.

The decision of an administrative agency may be reversed “if the substantial rights of the petitioner have been prejudiced because the administrative findings ... are ... made upon unlawful procedure ...” Ark. Code Ann. § 25-15-212(h)(3) (Repl. 1992). See Wright v. Arkansas State Plant Board, 311 Ark. 125, 842 S.W.2d 42 (1992). As stated in Panhandle Eastern Pipe Line Co. v. F.E.R.C., 613 F.2d 1120 ( D.C. Cir. 1979), “It has become axiomatic that an agency is bound by its own regulations,” citing Service v. Dulles, 354 U.S. 363 (1957). See also Columbia Broadcasting Sys., Inc. v. United States, 316 U.S. 407 (1942).

We do not agree with the testimony of the Agency director to the effect that the Agency was not bound by the notice it published to prospective POA applicants. The procedure was “unlawful” because the Agency failed to follow that which it had prescribed. The applicants were prejudiced because they were unprepared to address their prospects for supplying the need for 140 nursing home beds in Benton County as opposed to the 70 stated in the original notice. We agree with the Trial Court’s decision to reverse the Commission and to remand the case so that the process may begin with the issuance of a proper notice.

Affirmed.

Corbin, J., not participating.


author: Tom Glaze, Justice.

text:
    Jim ALLRED v. ARKANSAS DEPARTMENT of CORRECTION SCHOOL DISTRICT; David C. McClintion; Morris H. Dreher; Janis Walmsley; Rev. Hezekiah D. Stewart, Jr.; Bobby L. Roberts; Mike Gaines; & Larry Norris, as Members of the Department of Correction School District Board of Directors
    95-762
    912 S.W.2d 4
    Supreme Court of Arkansas
    Opinion delivered December 18, 1995

      Mitchell, Blackstock & Barnes, by: Clayton R. Blackstock and Lisa Wilis, for appellant.

      Winston Bryant, Att’y Gen., by: Tim Humphries, Deputy Att’y Gen., for appellees.
   Tom Glaze, Justice.

Appellant Jim Allred had been hired by the appellee Department of Correction School District as a certified teacher for the 1993-1994 school year. In a letter dated April 1,1994, the district’s supervisor of education services, Hurshell Qualls, informed Allred that Qualls intended to recommend to the Board that Allred be placed on “a year’s (sic) leave or longer without pay beginning next school year.” Qualls referred to Allred’s excessive absenteeism and his failure to provide a doctor’s statement regarding his illness. Allred received Qualls’s letter on April 6. On April 21, Allred provided his principal, Jack Broach, with the required doctor’s statement. On April 28, 1994, the Board met and placed Allred on an indefinite leave of absence without pay because of 75.5 days of absenteeism.

On June 13, 1994, Allred filed a petition for writ of mandamus and complaint in circuit court, and amended it on August 22. Alleging denial of his constitutional due process rights and violation of the Teacher Fair Dismissal Act (TFDA), Allred requested a writ of mandamus to compel the Department to renew his teaching contract, and to declare that his contract was automatically renewed under the TFDA and that the Board’s action was constitutionally void. Allred requested reinstatement and damages for breach of contract.

The Department filed a motion to dismiss Allred’s amended petition and complaint for failure to state a claim upon which relief could be granted. The Department claimed the Department’s school district is not a public school district and subject to the requirements of the TFDA, and Allred does not possess a property right in his employment which would afford him due process rights.

By order entered March 23, 1995, the trial court dismissed Allred’s complaint pursuant to Ark. R. Civ. P. 12(b)(6). Allred appeals only the trial court’s dismissal of his TFDA claim.

The Teacher Fair Dismissal Act of 1983, as amended, governs the dismissal of teachers within the state’s public school system. Ark. Code Ann. §§ 6-17-1501—1510 (Repl. 1993). The term “teacher” is defined as any person, other than a superintendent or assistant superintendent, employed in an Arkansas “public school district,” who is required to hold a state teaching certificate as a condition of employment. § 6-17-1502(a)(l). See also Love v. Smackover Sch. Dist., 322 Ark. 1, 907 S.W.2d 136 (1995). Under § 6-17-1506(a), every contract between a teacher and the school board shall be automatically renewed for the next school year unless the teacher is notified of nonrenewal by May 1 of the contract year. Arkansas law requires school districts to strictly comply with the notice provisions of the TFDA. § 6-17-1503.

Here, no dispute exists between the parties that Allred was required to have a state teaching certificate in order to be employed as a teacher with the Department. The question on appeal is whether the Department of Correction school district is part of the state’s public school system and subject to the requirements of the TFDA.

The Department’s school district was established by Act 279 of 1973, which is codified as amended at Ark. Code Ann. §§ 12-29-301—310 (1987 and Supp. 1993). The district was created to provide elementary, secondary, and vocational and technical education to all persons incarcerated in the Department’s facilities who are not high school graduates, irrespective of age. § 12-29-301 (b). The Board of Correction acts as the school board for the district. § 12-29-301(c). Section 12-29-303 provides as follows:

The schools established under the provisions of this subchapter and those persons incarcerated who attend the schools shall be entitled to all of the privileges provided generally to common public schools and adult education programs administered by the State Board of Education to students who attend them under the laws of the State of Arkansas, provided the privileges do not conflict with the rules, regulations, and policies of the Department of Correction or the laws of the state respecting the establishment and operation of the Department of Correction.

(Emphasis added).

Allred argues that the Department’s district is part of the state’s public school system, and his dismissal as a teacher with the Department is subject to the TFDA. Allred bases his argument on the following: (1) the General Assembly expressly recognizes the district as a public school district; (2) the General Assembly distinguishes only between public and private school districts; and (3) the district is subject to the standards for accreditation of public schools.

First, Allred cites several statutes and emergency clauses that make reference to the Department’s “school district.” Specifically, Allred cites § 12-29-301 as quoted above, and the emergency clause to Act 671 of 1989 which amended Act 279 establishing the Department’s school district. The emergency clause of Act 671 reads in pertinent part as follows:

It is hereby found and determined by the General Assembly that confusion has arisen concerning the funding of the public school program operated in the Department of Correction; that it is necessary to clarify that funds generated from various programs within the department may be utilized in support of the public school district within the department^.]

(Emphasis added). Allred argues the emergency clause clarifies the district’s classification as a public school district, and statutory rules of construction allow the use of an act’s emergency clause in determining the intent of the legislature. Farm Bureau Mutual Ins. Co. v. Wright, 285 Ark. 228, 686 S.W.2d 778 (1985).

Further, Allred cites Ark. Code Ann. § 6-13-101 (Repl. 1993) where the General Assembly provided as follows:

(a) There shall be only one (1) kind of school district in this state, and each shall have the same prerogatives, powers, duties, and privileges as herein set forth.
(b) All school districts which may be hereafter created shall be the same kind, with the same prerogatives, powers, duties, and privileges as provided by law.

Allred contends the General Assembly has authorized only the creation of one type of school district and that type is a “public school district.”

The Department responds that true public schools are those elementary and secondary schools operated by school districts which receive both federal, state, and local funds for the benefit of children in grades kindergarten through twelve. See § 6-13-902(1). The Department contends its school district is an entirely different sort of school. First, the Department notes that children who live within the geographic confines of the Department’s school district cannot attend the Department’s school because it is limited to those incarcerated within the Department. Further, the Department claims board members of true public school districts are elected; whereas, the correction board members serve as the district’s school board and those members are appointed by the Governor, rather than elected. See Ark. Code Ann. § 6-13-604 et seq. (Repl. 1993).

Second, Allred argues the only reason the General Assembly used the phrase “public school district” in the TFDA is to distinguish it from a private school district. Allred cites §6-18-702(a) which requires all children to be immunized before admission “to a public or private school.” Allred also contends that public refers to school districts which receive public funds and the Department’s district receives public funds. Allred cites other statutes where the General Assembly addresses “public and private schools.” See § 6-16-105(b) (a flag shall be displayed at every public and private school).

The Department counters Allred’s second argument by stating its district is not required to meet the education standards required by the Quality Education Act of 1983 (QEA), §§ 6-15-201 et seq.; and thus, it cannot be a true public school district. Further, the Department points out that its district cannot be dissolved or annexed with another school district or lose public aid if it does not comply with the QEA, as other districts can be sanctioned.

In reply, Allred contends the Department is not completely exempt from the QEA as it claims, and cites § 12-29-304(b) which reads as follows:

In view of the role, duties, and responsibilities of the Department of Correction as a penal and correctional institution, the inability of the Department of Correction School District to meet the full requirements of the rules and regulations of the quality education standards promulgated by the State Board of Education pursuant to §§ 6-15-201— 6-15-212, and other laws and regulations of the state pertaining to quality education standards shall, in no way, penalize or jeopardize the state grants and aids for public school districts as authorized in this subchapter.

(Emphasis added). Allred contends the General Assembly recognized the special differences between common public school districts and the Department’s district, and argues, if the Department’s district is not a public school district, no need existed for the General Assembly to create the special exemption in § 12-29-304(b).

Third and finally, Allred argues the Department’s district is a public school district because it is subject to the same standards for accreditation for public schools as cited above in § 12-29-304(b). Further, Allred points out the Department is like other public school districts, in that it is authorized to provide vocational and high school education for students under 21 years and over 21 years of age. See § 6-16-308.

In reviewing a trial court’s decision on a motion to dismiss, this court treats the facts alleged in the complaint as true and views them in a light most favorable to the plaintiff. Forehand v. First Bank of Ark., 315 Ark. 282, 867 S.W.2d 431 (1993). It is improper for the trial court to look beyond the complaint to decide a motion to dismiss. Id. All reasonable inferences must be resolved in favor of the complaint, and all pleadings are to be reasonably construed. Id. Here, the question is one of law which requires statutory interpretation.

We agree with Allred. As § 6-13-101 provides, there shall be only one kind of school district in this state. That single kind of district is supported by public funds, and hence a public school district is established.

While the Department’s school district is certainly different from other public school districts, it is clear from reading Ark. Code Ann. §§ 12-29-301—310 (1987 and Supp. 1993), and emergency clauses of associated acts that the General Assembly intended to establish a public school district within the Department of Correction for the benefit of both the free and the incarcerated populations. The emergency clause of Act 279 of 1973 reads in pertinent part as follows:

The General Assembly finds that there is an immediate need for the institution of basic education for inmates of the Department of Correction, to the end that the said inmates may improve their minds and characters and become less likely to commit further crimes.

Further, public funds support the district — federal funds and state funds from the departments of education and correction. § 12-29-304(a). While the special role, duties, and responsibilities of the Department of Correction are first and foremost those of maintaining a correctional institution, the General Assembly has created a public school district within the institution for rehabilitative purposes. As other school districts, the Department is authorized to offer both general education and vocational education experiences for its student population. The fact that the Department’s students are awarded a GED or receive vocation-technical training does not negate the Department’s responsibility to operate under the law as a publicly supported school district.

In line with our review of the controlling statutes above, we hold the Department’s district is a public school district as a matter of law. As a public school district, the Department is subject to requirements of the Teacher Fair Dismissal Act. Because Allred was employed with the Department’s school district as a teacher and was required to have a state teaching certificate as prerequisite to employment, Allred was a teacher within the meaning of the TFDA. See Love v. Smackover Sch. Dist., 322 Ark. 1, 907 S.W.2d 136 (1995). Allred’s amended complaint, if taken as true, establishes a cause of action against the Department for violation of the TFDA. The trial court was wrong to dismiss the complaint under Rule 12(b)(6).

On remand, the trial court should determine whether Qualls’s letter of April 1, 1994, gave Allred sufficient notice under the TFDA that his contract for the 1994-1995 school year would not be recommended for renewal. For the reasons above, we reverse and remand.

       We note there is no constitutional or statutory authority for establishment of private school districts.


text:
    REGIONAL CARE FACILITIES, INC. d/b/a Regional Healthcare Center of Benton County v. ROSE CARE, INC.
    95-463
    912 S.W.2d 406
    Supreme Court of Arkansas
    Opinion delivered December 18, 1995

      Hilburn, Calhoon, Harper, Pruniski & Calhoon, Ltd., by: Sam Hilburn and Pamela A. Mosley, for appellant.

      Matthews, Campbell, Rhoads, McClure & Thompson, P.A., by: David R. Matthews, for appellee.
   Tom Glaze, Justice.

This appeal is a companion one to Regional Care Facilities, Inc. v. Rose Care, Inc., No. 95-458, which is also decided today. While these two cases have not been consolidated, the procedural events in each are the same and are important in deciding the respective appeals. While not mentioned in case no. 95-458, a brief discussion of the statutory history giving rise to these cases might be helpful.

In 1987, the General Assembly enacted statutes forming the Arkansas Health Services Commission and the Arkansas Health Services Agency to evaluate the availability and adequacy of health facilities and health services related to long-term care facilities and home health care service agencies. Through Act 422 of 1989, the General Assembly imposed a moratorium on the construction of new home health care agencies or nursing homes from March 8, 1989, until June 1, 1989. As part of that Act, the Commission was empowered to remove “any and all of the moratoria any time after June 1, 1989, provided the Commission has duly adopted and promulgated standards for the review of the health facility for which the moratorium is removed.” Ark. Code Ann. § 20-8-106(a)(1) (Repl. 1991). Subsequently, the Commission promulgated the “Arkansas Health Services Commission Policies and Procedures for Permit of Approval Review.”

As is factually set out in companion appeal no. 95-458, the Health Services Agency in February 1992, published notice that a permit of approval (POA) would be issued by the Health Services Commission for one 70-bed nursing home facility in Benton County. Four applications to construct the facility were submitted. Regional Care Facilities, Inc. (Regional), filed two applications, one for a 70-bed unit in Rogers and one for a 70-bed facility in Bentonville. Rose Care applied to build a 70-bed facility in Bentonville. The other application was filed by Innisfree for a 70-bed nursing home in Rogers.

The Agency “in considering the need for only one facility” recommended to the Commission that the POA be awarded to Innisfree. Included in the Agency recommendation, however, was the statement that the Commission “might consider approving a second facility.” The Agency recommended that a second POA be granted to Regional for the construction of a 70-bed unit in Bentonville.

The Agency then notified the applicants of its recommendations and published notice of a Commission hearing on “Proposals for new 70-bed nursing homes.” At the hearing, each of the applicants discussed its application. The Rose Care representative voiced concern over the possibility of the approval of a second POA and referred to the lack of notice concerning the second POA.

The Commission followed the Agency recommendations and awarded one POA to Innisfree for a 70-bed facility in Bentonville and endorsed the Agency’s recommendation to award an additional POA for seventy beds to Regional. Notice of the decision was sent to the applicants, and Rose Care filed an appeal with the Commission seeking, in effect, reconsideration of its decision. The Commission set a hearing for September 30, 1992, to consider Rose Care’s review requests. However, while the administrative review hearing was still pending before the Commission, Rose Care filed its complaint against the Agency and Commission on September 28, 1992, in circuit court, wherein it alleged it anticipated the Commission would grant the second POA to Regional at the scheduled September 30, 1992 hearing unless the court enjoined the permit’s issuance. On September 28, 1992, the circuit court granted Rose Care’s request for injunctive relief by entering an ex parte order. Regional later was allowed to intervene, and among other things, it contended Rose Care’s lawsuit was premature because no final Agency (Commission) decision had been made at the time the court’s ex parte restraining order was issued. In sum, Regional, the Agency, and the Commission requested summary judgment be granted, contending Rose Care had failed to exhaust its administrative remedies, and the circuit court was without jurisdiction to have issued its ex parte order. We agree.

Citing Ark. Code Ann. § 25-15-207(d), Rose Care submits it was not required to exhaust its administrative remedies before seeking a declaratory order from the court. That statute provides as follows:

(d) A declaratory judgment may be rendered whether or not the plaintiff has requested the agency to pass upon the validity or applicability of the rule in question.

It is important to emphasize at this point that declaratory actions are intended to supplement rather than replace ordinary causes of action. Rehab Hospital Services Corp. v. Delta-Hills Health Systems Agency, Inc., 285 Ark. 344, 687 S.W.2d 840 (1985). In Rehab,, the Arkansas State Health Planning and Development Agency granted a certificate to Rehab Hospital to construct a hospital in Jonesboro. Delta-Hills Health Systems Agency filed a motion for reconsideration after conducting a telephone poll of its executive committee and before any action was taken on the motion, Rehab filed suit in circuit court alleging the reconsideration motion should be voided since Delta-Hill’s telephone poll violated the Freedom of Information Act. In upholding the trial court’s decision refusing to void the motion, this court stated:

It seems to be now a recognized doctrine that requires administrative relief to be sought before resorting to declaratory procedure, wherever administrative relief is afforded and this requirement is not one merely requiring the initiation of administrative procedure, but the administrative procedure must be pursued to its final conclusion before resort may be had to the court for declaratory relief

The Rehab decision is consistent with prior law on this subject. For example, the court in Boyett v. Boyett, 296 Ark. 36, 598 S.W.2d 86 (1980), stated that declaratory relief is not proper when the identical questions involved in the declaratory judgment proceeding are already at issue between the parties in a pending action. The court further said that declaratory judgment procedure is not proper as a means of trying a case, or various issues involved in it, by piecemeal. In Consumers Co-op Assn. v. Hill, 233 Ark. 59, 342 S.W.2d 657 (1961), this court held that failure to seek a rehearing before an administrative agency was failure to exhaust administrative remedies where rehearing could have cleared up a confusing ruling. See also Arkansas Motor Vehicle Comm’n v. Cantrell Marine, Inc., 305 Ark. 449, 808 S.W.2d 765 (1991).

This court in Barr v. Arkansas Blue Cross & Blue Shield, Inc., 297 Ark. 262, 761 S.W.2d 174 (1988), recognized that the exhaustion of administrative remedies is not required where no genuine opportunity for adequate relief exists or where irreparable injury will result if the complaining party is compelled to pursue administrative remedies. That is not the situation here. Although Rose Care argues the Arkansas Health Planning statutes do not provide administrative procedural redress for review of the Commission’s approval of a permit to construct a nursing home facility, we must disagree.

To support its argument, Rose Care cites Ark. Code Ann. § 20-8-106(d) (Repl. 1990) and contends the statutes only contemplate review of the Commission’s denial, not approval, of a POA. Rose Care’s argument totally ignores Ark. Code Ann. § 20-8-103(f) and (h) which provide as follows:

(f) The commission shall review the recommendations of the agency concerning action on applications by long-term care facilities or home health care service agencies for permits of approval and endorse or reject the same.
* * *
(h) The commission, upon appeal by the applicant, shall conduct hearings on permits of approval by the agency within thirty (30) days of receipt of the notice of appeal. The commission shall render its final decision within forty-five (45) days of the close of the hearing. Failure of the commission to take final action within these time periods shall be considered a ratification of the agency decision on the permit of approval and shall constitute the final decision of the commission from which an appeal to circuit court may be filed.

As is evident by reading the foregoing provisions, the General Assembly has provided for the review of agency recommendations and the Commission may endorse or reject them. And while provision (h) provides that the Commission, upon appeal by the applicant, must conduct hearings on permits of approval by the Agency, we find nothing in this language, or that in provision (f), that would prevent Rose Care from requesting the review of the Agency’s recommendations or the approval of a permit. Moreover, as is specifically provided in provision (h), the Commission’s decision is then appealable to circuit court.

Here, Rose Care was an applicant and had every right to pursue the statutory procedures discussed above. In fact, Rose Care requested a review of the Agency’s recommendation that a second POA should be issued to Regional and was granted a review.

In conclusion, we mention Rose Care’s argument in this case that the Agency and Commission failed to give proper notice that a second POA would be considered prior to making its recommendations to the Commission. This notice issue is addressed and decided in Rose Care’s favor in companion case no. 95-458 where we point out that the Commission’s regulations require that the notice of a proposed review of applications for a POA be given, but the Agency failed to comply. As we state in case no. 95-458, we hold the trial court was correct in reversing and remanding this matter directing the Commission to take further steps in connection with the approval of the second POA. In the event of an adverse ruling, an appeal would be to circuit court.

For the reasons stated hereinabove, we reverse and dismiss the trial court’s order.

Corbin, J., not participating.

       1989 Act 422 § 6 specifies June 1, 1988, as the date after which the commission may lift the moratoria, but that is a mistake and should read “June 1, 1989.” The trial court correctly read the Act as specifying June 1, 1989, and not 1988.

       Although the order was entered, the Commission subsequently approved and issued Regional the second POA. Regional raises this point on appeal, but it is unnecessary to discuss and decide it.

       Section 20-8-106(d) provides any applicant seeking review of the agency denial of a permit of approval shall file a written appeal.


text:
    Ira RUSSEY v. STATE of Arkansas
    CR 95-867
    912 S.W.2d 420
    Supreme Court of Arkansas
    Opinion delivered December 18, 1995

      William R. Simpson, Jr., Public Defender, by: C. Joseph Cordi, Jr., for appellant.

      Winston Bryant, Att’y Gen., by: Kent G. Holt, Asst. Att’y Gen., for appellee.
   Tom Glaze, Justice.

Appellant Ira Russey was convicted by a jury of first-degree murder of his wife and sentenced to forty years’ imprisonment. His sole point for reversal is that the trial court abused its discretion by allowing into evidence a police officer’s testimony regarding a domestic violence incident which occurred between Ira and his wife, Diane, before the date he shot and killed her.

The state’s evidence showed that, sometime in April of 1994, Diane left Ira, and moved into her mother’s, Ruby Irvin’s, house. Ira had professed his love for Diane, and wanted her to return to him. On June 2, 1994, Ira observed Diane in a car with a man named “Greg,” and later that same day, Ira waited for Diane at Diane’s mother’s house. Diane arrived in her mother’s car and an argument ensued between her and Ira. Diane fled back into the car where Ira broke the windows and hit Diane in the face, causing her to be taken to the hospital. On the morning of June 3, Diane swore out a warrant for Ira’s arrest.

The state also presented testimony by other witnesses, Diane’s grandmother, Mozella Ward, and Margaret Thomas, that Ira had said nobody else could have Diane and that he was going to kill her. In fact, both the state and Ira agree that, early on the morning of June 5, 1994, Ira took his loaded shotgun to Mrs. Irvin’s house and confronted Diane about her having been with Greg. Ira testified that he had not intended to shoot Diane, but when she said, “Don’t you worry about what me and Greg were doing,” he said, “My mind snapped — I went to throw the shotgun and that’s how I shot her in the arm.” Ira further related the shot “blew out the bottom part of her arm,” and then he left the scene. Diane was hospitalized, but died on June 18, 1994. At trial, Ira claimed the shooting was accidental.

The state also called Detective Lawrence Welborn as a witness to testify concerning a disturbance call which had taken place on April 27, 1994 — thirty-nine days prior to the June 5 shooting. Over Ira’s objection, the trial court permitted Welborn to testify that, when he responded to the April 27 disturbance call at the Russey’s residence, he had observed a loaded shotgun lying on a bed, and he unloaded it and returned it to Ira. Diane gathered her clothes and left the house. During his direct examination, Welborn was shown the shotgun Ira used in shooting his wife, and he said that it was the same gun he had seen at the April 27 incident.

In this appeal, Ira urges that the state offered Welborn’s testimony only for the purpose of showing Ira’s propensity for violence. He also argues that, if this testimony had any relevance, it was to show Ira was “in the vicinity of a shotgun,” and such evidence was more prejudicial than probative because the state had other means of proving Ira had access to a gun.

Here, the state was. required to prove Ira killed his wife with the purpose of doing so. Ark. Code Ann. § 5-10-112(a)(2) (Repl. 1994). This court has recognized that intent or state of mind is seldom capable of proof by direct evidence and must usually be inferred from the circumstances surrounding the killing. Starling v. State, 301 Ark. 603, 786 S.W.2d 114 (1990). Although A.R.E. Rule 404(b) prohibits evidence of other crimes, wrongs, or acts to prove the character of a person, such evidence may be admissible for other purposes, such as proof of motive, opportunity, intent, preparation, plan, knowledge, identity, or absence of mistake or accident. See Brenk v. State, 311 Ark. 579, 847 S.W.2d 1 (1993).

Because Ira claimed he shot his wife accidentally on June 5, Detective Welborn’s testimony concerning the April 27 domestic violence call was relevant to show lack of mistake or accident on Ira’s part. At the very least, Welborn’s testimony showed, by fair inference, that Ira and his loaded shotgun necessitated a call and an investigation by the police. Moreover, that disturbance involved the same shotgun Ira used only five weeks later when he shot and killed his wife. Also, based on the circumstances, we cannot say Welborn’s testimony was unduly prejudicial.

For the above reasons, we affirm.


author: Robert L. Brown, Justice. Andree Layton Roaf, Justice,

text:
    Homer W. DURHAM v. ARKANSAS DEPARTMENT OF HUMAN SERVICES/Child Support Enforcement Unit
    95-299
    912 S.W.2d 412
    Supreme Court of Arkansas
    Opinion delivered December 18, 1995
    [Petition for rehearing denied January 16, 1996.]

      J.G. Molleston, for appellant.

      Greg L. Mitchell, for appellee.

       Corbin and Roaf, J.J., would grant.

   Robert L. Brown, Justice.

Appellant Homer W. Durham appeals from a judgment awarded to appellee Arkansas Department of Human Services/Child Support Enforcement Unit in the amount of $16,621.20. The Arkansas judgment was the result of an Illinois judgment for child support arrearages which was entered in that state in 1975. It was subsequently revived in Illinois in 1992, and then registered in Arkansas in 1993. Durham contends that the chancellor erred in enforcing a judgment which had been revived in Illinois under Illinois’s 20-year statute of limitations rather than refusing to enforce the judgment under Arkansas law which limits commencement of actions on judgments to ten years after the cause of action accrues. We disagree with Durham’s analysis and affirm the judgment.

On July 20, 1971, appellant Durham and his wife, Linda Sue Durham (now Kautz), were divorced in Illinois. The divorce decree ordered Durham to pay $20 per week for each of the couple’s two children. According to a stipulation of facts entered into by the parties, Durham resided in Arkansas between May 7, 1971, and June 25, 1975. On July 9, 1975, Durham relinquished his parental rights in his children so that his former wife and her new husband could adopt them, which they did. At that time, further support obligations were terminated. Unpaid support arrearages totalling $7,600, however, had accumulated, and the Illinois court awarded Linda Kautz judgment in that amount on that same date. Pursuant to that judgment, Durham was ordered to pay $50 a week to reduce the judgment amount.

In 1992, Human Services attempted to enforce the judgment in Arkansas but learned that it had not been revived in Illinois. On September 18, 1992, the Illinois circuit court revived Kautz’s judgment against Durham by court order and extended the judgment until 2002. Human Services petitioned to register the revived Illinois judgment in the chancery court of Columbia County, Arkansas. On March 26, 1993, the chancellor ordered registration of the Illinois judgment but delayed enforcement of it until the matter could be further developed. On October 24, 1994, the chancellor entered judgment in the amount of $16,621.20 against Durham. The chancellor found that the 1992 Illinois judgment was valid and was not barred by the Arkansas statute of limitations and further found that the 20-year Illinois statute of limitations applied. The chancellor again granted the request for registration of the Illinois order and provided for enforcement of that judgment by execution and garnishment. On November 7, 1994, Durham filed a motion for new trial or amendment of judgment and primarily contended that the chancellor retroactively applied Act 468 of 1993, now codified as Ark. Code Ann. § 9-17-604 (Repl. 1993), in applying the Illinois statute of limitations. The motion was denied.

Durham’s sole point on appeal is that the chancellor erred in giving retroactive effect to Act 468 of 1993, which provides for application of the longer statute of limitations as between the law of the state issuing the support order (in this case, Illinois) and Arkansas. Act 468 became effective March 13, 1993, which was one day after the chancellor issued his letter opinion approving the registration of the Illinois judgment. Durham directs us to our caselaw that the General Assembly may not revive a cause of action previously barred by the existing statute of limitations. See Johnson v. Lilly, 308 Ark. 201, 823 S.W.2d 883 (1992). He argues that if the revival of the Illinois judgment and its registration in Arkansas were already barred as of March 13, 1993, under Arkansas’s ten-year statute of limitations, Act 468 could not be used to resurrect it.

The chancellor makes no reference to Act 468 of 1993 in his letter opinion, his order, or his judgment in this matter. Human Services, however, concurs with Durham that the chancellor relied on Act 468 and retroactively applied it to the registration of this foreign judgment. We agree that if the chancellor did indeed retroactively apply Act 468 so as to breathe life into a dormant judgment, this was an erroneous application of the law. But we further agree with Human Services that if the result reached by the chancellor was correct even for the wrong reason, we will affirm it. In the Matter of Estate of F.C., 321 Ark. 191, 900 S.W.2d 200 (1995).

In 1985, the General Assembly passed Act 387, which reads in part relating to conflicts of laws and limitation periods:

(a) Except as provided by § 16-56-204, if a claim is substantially based:
(1) Upon the law of one (1) other state, the limitation period of that state shall apply; or
(2) Upon the law of more than one (1) state, the limitation period of one (1) of those states, chosen by the law of conflict of laws of this state, shall apply.
(b) The limitation period of this state shall apply to all other claims.

Ark. Code Ann. § 16-56-202 (1987).

If the statute of limitations of another state applies to the assertion of a claim in this state, the other state’s relevant statutes and other rules of law governing tolling and accrual shall apply in computing the limitation period, but the other state’s statutes and other rules of law governing conflict of laws shall not apply.

Ark. Code Ann. § 16-56-203 (1987). The claim in this case is in the form of enforcement of an Illinois judgment, which is substantially based on the law of that state. See Ill. Rev. Stat. ch. 110, par. 13-218.

We recognize that Arkansas provides a ten-year period for the enforcement of all judgments and that this period also applies to judgments revived in this state. Ark. Code Ann. §§16-56-114, 16-65-501 (1987). But in the instant case a judgment was revived in Illinois under that state’s 20-year statute of limitations, and registration and enforcement were then sought in Arkansas. Thus, we must address whether this state should give full faith and credit under the U.S. Constitution to a validly revived judgment in Illinois. We can discern no valid reason for not doing so.

The oft-stated law in this state is that a foreign judgment is as conclusive on collateral attack as a domestic judgment, absent fraud in the procurement or want of jurisdiction in the rendering court. See, e.g., Strick Lease, Inc. v. Juels, 30 Ark. App. 15, 780 S.W.2d 594 (1989); see also Tisdale v. Seavey, 286 Ark. 222, 691 S.W.2d 144 (1985). Full faith and credit, however, does not require a state to substitute the statute of another state that reflects a conflicting policy from that of its own statute. Orintas v. Meadows, 17 Ark. App. 214, 706 S.W.2d 199 (1986).

We are aware that cases in the various states dealing with conflicting statutes of limitation are not of one mind. One treatise on conflict of laws states the problem as follows:

Some uncertainty exists whether revival of the original judgment in the state of rendition will serve to overcome the recognizing forum’s shorter limitation on the original judgment, assuming that the revived judgment itself is not barred by the limitation. One view distinguishes between revival prolonging the original judgment and revival having the effect of creating a new judgment: the former is said to continue to be barred by the shorter local statute, while the latter is entitled to full faith and credit. However, the implication in the U.S. Supreme Court’s decision in Watkins v. Conway [385 U.S. 188 (1966) (per curiam)] is that any revival of a judgment is entitled to full faith and credit.

Scoles and Hay, Conflict of Laws § 24.32, p. 995 (2d Ed. 1992).

While Arkansas does have a ten-year limitations period for revival of judgments and for enforcement of judgments, it also has enacted § 16-56-202 and § 16-56-203, which apply the statute of limitations of a foreign state, when the claim involved is substantially based on the law of that state. We perceive no contravention of our domestic policy by giving full faith and credit to a valid Illinois judgment, appropriately revived in that state, under that state’s limitations statute. Were we to sanction Durham’s position, this might well lead to situations where devious obligors would shop from state to state to find the most favorable limitations period and then subsequently seek to invalidate enforcement of the issuing state’s judgment. We can also conceive of the burden placed on those seeking to enforce support orders by first having to ascertain the state of the obligor’s residence in order to determine the time period for revival. While there is no indication that either circumstance existed in the instant case, an opinion in accordance with Durham’s position would allow for that result.

Though the chancellor, according to the parties, permitted registration and enforcement of the Illinois judgment under an inapposite statute, we affirm his decision and give full faith and credit to the revived Illinois judgment.

Affirmed.

Newbern, Corbin, and Roaf, JJ., dissent.

Andree Layton Roaf, Justice,

dissenting.

The majority correctly concludes that the issue we must address is whether this state should give full faith and credit under the U.S. Constitution to an Illinois judgment, validly revived in that state. Because the Illinois revival is simply a continuation of the original judgment, I find our statute of limitations precludes enforcement of the judgment. Consequently, I would reverse the trial court’s decision.

Arkansas Code Annotated § 16-56-114 (1987) provides: “Actions on all judgments and decrees shall be commenced within ten (10) years after cause of action shall accrue, and not afterward.” This ten year limitations period was first adopted by our legislature in 1844. Acts 1844, § 1, p. 24. In Jordan v. Muse, 88 Ark. 587, 115 S.W. 162 (1909), this Court addressed the issue of whether the precursor of our current statute of limitations applied to foreign judgments as well as domestic judgments. We noted that the statute by its express terms “relates to ‘actions on all judgments and decrees.’” Further, this Court noted it could not presume that the legislature used such comprehensive terms merely for the purpose of including all kinds of domestic judgments. Consequently, we concluded that the statute was applicable to actions on foreign judgments.

Further, it is well established that “[a] valid judgment rendered in a State of the United States may be denied enforcement in a sister State if suit on the judgment is barred by the sister State’s statute of limitations applicable to judgments.” Restatement (Second) Conflicts of Law § 118, (1971). In addition, the United States Supreme Court has concluded that a state is free to apply its own statute of limitations in an action to enforce a judgment rendered in a sister state. McElmoyle v. Cohen, 13 Pet. (38 U.S.) 312 (1839); see also Watson v. Conway, 385 U.S. 188 (1966).

Since the decision in Jordan v. Muse, the General Assembly has adopted the Uniform Enforcement of Foreign Judgments Act, Ark. Code Ann. §§ 16-66-101—16-66-619 (1987 and Supp. 1993). However, I find the adoption of the Uniform Enforcement of Foreign Judgments Act has not affected the holding of Jordan. The act does not contain a statute of limitations for foreign judgments, and other states which have adopted the act have applied their own statute of limitations to foreign judgments. See Pan Energy v. Martin, 813 P.2d 1142 (Utah 1991); Johnson Bros. Wholesale Liquor v. Clemmons, 661 P.2d 1242, cert. denied, 464 U.S. 936 (Kan. 1983).

Although it is clear that the 1975 judgment cannot be enforced, the difficult question is what effect to give the 1992 revival of judgment. Comment c of the Restatement (Second) Conflicts of Law § 118, (1971), provides in part:

If under the local law of the State of rendition the effect of this revival is to create a new judgment, then suit on this judgment may not be held barred under full faith and credit in the sister State. The contrary will be true, however, if the effect of the revival in the State of rendition is not to create a new judgment but rather to prolong the effective life of the original judgment.

See also Johnson Bros. Wholesale Liquor v. Clemmons, 661 P.2d 1242, cert. denied, 464 U.S. 936 (Kan. 1983); Annotation, Conflict of laws as to time limitations governing action on foreign judgment, 36 A.L.R.2d 567 (1954). Thus, the controlling question is whether the 1992 revival was a “new” judgment. In Illinois, a “revival of a judgment is not the creation of a new judgment. but merely a continuation of that being revived.” Guertler v. Barlow Woods, Inc., 596 N.E.2d 24 (Ill. App. 1 Dist. 1992); Bank of Edwardsville v. Raffalelle, 45 N.E.2d 651 (1942). Consequently, Arkansas should not enforce the Illinois judgment based upon our statute of limitations regarding the enforcement of judgments.

Although the majority also cites Ark. Code Ann. § 16-56-202 and § 16-56-203 (1987), this is not an action involving the “assertion of a claim,” rather it is an action for the enforcement of a judgment. This state, as a matter of policy, has determined that actions to enforce judgments must be commenced within ten years after the cause of action accrues. That period applies regardless of whether the issuing state has a five year limitation on judgments or a twenty year limitation on judgments. See Annotation, Conflict of laws as to time limitations governing action on foreign judgment, 36 A.L.R.2d 567 (1954). The majority expresses the fear that, should this Court deny enforcement of the revived judgment, judgment debtors would attempt to avoid their obligations by moving to states with shorter limitations periods. It is true that such a holding would render unenforceable in this State an Illinois judgment which lay dormant for some seventeen years after its entry in 1975, and sixteen years after the appellant moved back to his home state of Arkansas. It is also true that such a result comports with the doctrine of Full Faith and Credit and our limitations policy of long standing.

For the foregoing reasons, I respectfully dissent.

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


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

text:
    Alice FIMPEL v. STATE AUTOMOBILE MUTUAL INSURANCE COMPANY
    95-679
    911 S.W.2d 950
    Supreme Court of Arkansas
    Opinion delivered December 18, 1995

      Nolan, Caddell & Reynolds, P.A., by: Bennett S. Nolan, for appellant.

      Hardin, Jesson, Dawson & Terry, by; J. Gergory Magness, for appellee.
   Robert L. Brown, Justice.

This appeal raises the issue of whether a declaration of automobile insurance issued with a substituted vehicle requires a second rejection of no-fault insurance under Ark. Code Ann. § 23-89-203 (Repl. 1992). We conclude that it does, and we reverse the decision of the circuit court and remand.

On March 6, 1992, appellant Alice Fimpel entered into a contract for automobile insurance with appellee State Automobile Mutual Insurance Company. The contract covered Fimpel’s 1974 Nissan B210. At the time the policy was executed, Fimpel rejected no-fault and uninsured motorist coverages. Sometime after that date, Fimpel replaced the 1974 Nissan B210 with a 1978 Oldsmobile Ninety-Eight. A six-month declaration effective March 8, 1994, and showing the 1978 Oldsmobile as a covered vehicle was issued to Fimpel by State Automobile. State Automobile did not propose no-fault coverage for the substituted vehicle, and Fimpel never withdrew her rejection of that coverage.

On July 24, 1994, Alice Fimpel was involved in an accident while driving her 1978 Oldsmobile Ninety-Eight. As a result of the accident, Fimpel incurred medical expenses in the amount of $6,417.44. On August 23, 1994, Fimpel made demand on State Automobile for payment of medical benefits under her policy of insurance. She claimed that pursuant to our decisions in Lucky v. Equity Mut. Ins. Co., 259 Ark. 846, 537 S.W.2d 160 (1976), and American Nat’l Prop. & Cas. Co. v. Ellis, 315 Ark. 524, 868 S.W.2d 469 (1994), coverage existed despite her earlier rejection in 1992. State Automobile refused payment of the claim.

On December 13, 1994, Fimpel filed suit against State Automobile for the payment of $5,000 under Ark. Code Ann. § 23-89-202 (Repl. 1992), a 12% penalty, and attorney’s fees. Fimpel then moved for summary judgment. In her brief in support of her motion, she claimed that an issued declaration by State Automobile with a substituted vehicle amounted to a delivery of a new policy, which triggered the statutory requirement that the coverage be rejected anew. She adduced Lucky v. Equity Mut. Ins. Co., supra, and American Nat’l Prop. & Cas. Co. v. Ellis, supra, as authority for her position. Because no rejection was executed by her at the time of the 1994 declaration, Fimpel maintained that coverage was implied and that she was entitled to a judgment against State Automobile under the policy as a matter of law.

State Automobile also moved for summary judgment. It argued that Fimpel could not recover her medical expenses under the policy because she had expressly rejected no-fault coverage when the policy was originally executed. ITie insurance carrier further argued that Fimpel’s reliance on the Lucky and Ellis opinions was misplaced, as those opinions pertained to uninsured motorist coverage, which is a separate and distinct form of insurance from no-fault. Thus, those cases, according to State Automobile, were not determinative. State Automobile also urged that under the terms of the insurance contract the policy was not a new policy but a continuation of the old. The insurance contract, according to the carrier, expressly contemplated substitution of vehicles and a continuation of the same coverage on those vehicles.

The trial court granted summary judgment in favor of State Automobile and concluded that Fimpel never withdrew her rejection of no-fault insurance. The court further stated:

14. Plaintiff relies on American National Property & Casualty Co. v. Ellis, 315 Ark. 524, 868 S.W.2d 469 (1994) and Lucky v. Equity Mutual Insurance Co., 259 Ark. 846, 537 S.W.2d 160 (1976) in order to support her request for medical injuries coverage under no-fault insurance. However, Plaintiff’s reliance on said cases is misplaced because such cases deal exclusively with uninsured motorist coverage, not personal injury protection or no-fault coverage. Uninsured motorist coverage and no-fault coverage are separate and distinct types of insurance, governed by separate and distinct statutes. Consequently, as determined by the Arkansas Supreme Court in Aetna Insurance Co. v. Smith, 263 Ark. 849, 854, 568 S.W.2d 11 (1978), cases adjudicating issues involving uninsured motorist coverage are not determinative as to cases involving no-fault coverage due to the disparity between uninsured motorist and no-fault coverages.
15. Further, Plaintiff’s reliance on American National Property & Casualty Co. and Lucky is misplaced in that a new insurance policy was not entered into between the parties at the time Plaintiff substituted her 1978 Oldsmobile 98 for her 1974 Nissan B210. The terms of the Auto Policy contemplate vehicle substitution in paragraph J of the definitional section. The parties have the right to make their own contract and legal effect must be given to all provisions and language contained in an insurance contract which are not contrary to statute or public policy. See Shelter General Insurance Co. v. Williams, 315 Ark. 409, 867 S.W.2d 457 (1993); Continental Casualty Co. v. Davidson, 250 Ark. 35, 463 S.W.2d 652 (1971). Therefore, since the Auto Policy clearly anticipates the substitution of vehicles, such event does not alter, amend or modify the original contract nor does it cancel or terminate the original contract.

We agree with the trial court that the policy as originally issued with endorsements expressly provided that a substituted vehicle would have the same coverage as the vehicle it replaced. The remaining issue to be resolved, however, is whether the public policy of this State, as expressed in the applicable statutes, is contravened under these facts. More precisely, do the mandatory coverage statutes as construed by our caselaw require a second rejection of no-fault insurance when a declaration of renewal is issued which covers a substituted vehicle?

In Lucky v. Equity Mut. Ins. Co., supra, the issue was whether a policy endorsement covering a substituted vehicle constituted a delivery of insurance for purposes of the Uninsured Motorist Act. The insured rejected uninsured motorist coverage in 1966 on his 1960 Ford pickup but later bought a 1964 Ford pickup. In 1971, a policy endorsement was issued showing the substituted pickup truck, but uninsured motorist coverage was not rejected at that time. In 1973, the insured was injured in a vehicular accident. In refusing to accept the carrier’s argument that one rejection sufficed for all substituted vehicles, we stated:

Such a construction should not be placed upon a public policy statute that expects uninsured motorist coverage to be issued or rejected any time automobile liability insurance is “delivered or issued for delivery in this State.”

Lucky, 259 Ark. at 848, 537 S.W.2d at 162.

In American Nat’l Prop. & Cas. Co. v. Ellis, supra, we followed the Lucky decision in a case which also involved a substituted automobile and policy endorsement, but where the Uninsured Motorist Act had been amended in 1977 to provide that “rejection shall continue until withdrawn in writing by the insured.” See Act 532 of 1977, now codified at Ark. Code Ann. § 23-89-403(b) (Repl. 1992). We decided in Ellis that the intent of the General Assembly for single rejections to apply to substituted vehicles was still not clear. We further concluded that a new contract is entered into when a new declaration occurs which covers a substituted vehicle. Accordingly, uninsured motorist coverage must be rejected at that time.

The coverage involved in the instant case is no-fault coverage which is mandated by the General Assembly, as is uninsured motorist coverage, although it is categorically different in its intent and purpose from uninsured motorist coverage. See Ark. Code Ann. § 23-89-202 (Repl. 1992); Ark. Code Ann. § 23-89-403 (Repl. 1992); see also Aetna Ins. Co. v. Smith, 263 Ark. 849, 568 S.W.2d 11 (1978). At the time of the accident in the instant case, a statute provided for rejection of no-fault coverage by the insured:

(a) The named insured shall have the right to reject in writing all or any one (1) or more of the coverages enumerated in § 23-89-202.
(b) After the rejection, unless the named insured requests coverage in writing, the coverage need not be provided in, nor supplemental to, a renewal policy.

Ark. Code Ann. § 23-89-203 (Repl. 1992).

Though uninsured motorist coverage and no-fault coverage have different purposes, both modes of insurance are mandated coverages which must be offered to prospective insureds. Furthermore, both coverages may only be rejected by the insureds. We have construed the Uninsured Motorist Act in the Lucky and Ellis cases to require a rejection of that mandatory coverage when a new declaration occurs which includes a substituted automobile. We see no reason why that construction should not apply to a second category of mandatory automobile insurance — in this case, no-fault coverage — as well.

It is true that § 23-89-203 in 1994 provided that a rejection will be effective for policy renewals, but that language does not precisely embrace renewals when vehicles have been substituted. Had the General Assembly desired to expand the single-rejection concept to substituted vehicles as well as to simple renewals of existing coverage, it could easily have done so. But it had not done so in 1994. We have stated that when an insurance statute is imprecise, it should be construed against the insurance company. See Ross v. United Serv. Auto. Assoc., 320 Ark. 604, 899 S.W.2d 53 (1995). That principle easily applies to the case at hand. In sum, the 1978 Oldsmobile Ninety-Eight was included in the 1994 declaration sent to Fimpel prior to the accident in question. This equated to delivery of a new policy on the substituted covered vehicle, and a rejection of no-fault insurance was required at that time. Failure to obtain a rejection of the coverage with respect to the 1978 Oldsmobile Ninety-Eight results in no-fault coverage being in effect in 1994 pursuant to § 23-89-202.

We are cognizant of the fact that the General Assembly amended section (b) of § 23-89-203 by Act 527 of 1995 to read in part:

(b) After a named insured or applicant for insurance rejects this coverage, the insurer or any of its affiliates shall not be required to notify any insured in any renewal, reinstatement, substitute, amended, or replacement policy as to the availability of such coverage.

We are further aware that Act 527 amended the Uninsured Motorist Act as well and carried with it an Emergency Clause that found that present insurance laws should be clarified with regard to notifying insureds of no-fault and uninsured motorist coverage when there is a substitution of coverage. Subsequent Acts amending existing statutes may in certain instances clarify the original intent of the General Assembly in those earlier statutes. See Pledger v. Baldar Int'l, Inc., 309 Ark. 30, 827 S.W.2d 646 (1992); Nixon v.H & C Elec. Co., 307 Ark. 154, 818 S.W.2d 251 (1991); Nathaniel v. Forrest City Sch. Dist. No. 7, 300 Ark. 513, 780 S.W.2d 539 (1989). It would, however, be patently unfair to sanction a legislative clarification of a preexisting statute when this court has previously construed the effect of mandatory coverage on substituted vehicles contrary to the purported clarification. Insureds and their representatives are entitled to rely on our decisions interpreting existing law at the time of an accident without a subsequent clarification by the General Assembly which has the effect of nullifying caselaw. Fimpel was injured in the accident on July 24, 1994. We interpret § 23-89-203, as it existed on that date, in light of our decisions in Lucky v. Equity Mut. Ins. Co., supra, and American Nat’l Prop. & Cas. Co. v. Ellis, supra, respecting mandatory coverage and substituted vehicles. Because of our own construction of the effect of declarations of renewal on substituted vehicles, we decline to utilize Act 527 of 1995 as a gauge for determining prior legislative intent.

The order of the trial court is reversed, and this case is remanded for entry of a judgment consistent with this opinion and for such other proceedings as may be required.

Reversed and remanded.

Jesson, C.J., not participating.

Dudley, J., dissents.

Robert H. Dudley, Justice,

dissenting.

In March 1992, appellant Alice Fimpel purchased an automobile insurance policy from appellee State Automobile Mutual Insurance Company covering a Nissan automobile. She rejected first party no-fault coverage, did not pay a premium for the coverage, and signed a form in compliance with Ark. Code Ann. § 23-89-403 (1987) rejecting the coverage. The policy provides that, if the policyholder acquires a new vehicle, it will have the same coverage as the vehicle it replaced. Later, she replaced the Nissan with an Oldsmobile. In March 1994, the insurance company renewed the policy and the renewed policy reflected that the Oldsmobile was the covered vehicle. The insurance company did not propose no-fault coverage for the substituted vehicle. Fimpel never withdrew her rejection of the no-fault coverage, and she never paid a premium for such coverage.

On July 24, 1994, Fimpel’s Oldsmobile was struck by an unidentified car which was driven by an unknown person. She was injured in the accident and incurred medical expenses of $6,417.44. She submitted a claim for first party no-fault medical coverage. The insurance company refused to pay because she had rejected the coverage when she applied for the policy in 1992.

Fimpel sued the insurance company. There was no material dispute about the facts, and both parties moved for summary judgment. The trial court granted summary judgment in favor of the insurance company because the Oldsmobile had been substituted for the Nissan, the terms of the policy provided that a substituted vehicle would have the same coverage as the original vehicle, the terms of the policy remained the same, Fimpel had rejected the coverage when she applied for the policy, and the policy was not contrary to public policy. The majority opinion reverses the trial court and holds that the insurance company must pay the claim. I dissent.

The majority opinion admits that Ark. Code Ann. § 23-89-203 provided, in 1994, that rejection was effective for no-fault policy renewals and admits that the policy provided that a substituted vehicle would have the same coverage as the vehicle it replaced. It tacitly admits that the parties to an insurance contract have the right to make their own contract and that legal effect must be given to all provisions and language contained in an insurance contract that are not contrary to a statute or public policy. See Shelter Gen. Ins. Co. v. Williams, 315 Ark. 409, 867 S.W.2d 457 (1993). Even so, the majority opinion holds that Fimpel’s rejection did not apply to the substituted vehicle because of public policy set forth in two uninsured motorists cases, American Nat’l Property & Casualty Co. v. Ellis, 315 Ark. 524, 868 S.W.2d 469 (1994), and Lucky v. Equity Mut. Ins. Co., 259 Ark. 846, 537 S.W.2d 160 (1976). In those uninsured motorists cases we held that, when parties to an insurance contract agree to a policy endorsement which has the effect of substituting coverage of one automobile for another, the transaction constitutes new insurance. American Nat’l Property & Casualty Co. v. Ellis, 315 Ark. at 524, 868 S.W.2d at 470; Lucky v. Equity Mut. Ins. Co., 259 Ark. at 848, 537 S.W.2d at 162. In American Nat’l Property & Casualty Co. v. Ellis, we said that the holdings required insurers to offer uninsured motorist coverage to the insured when vehicles were substituted even though the insured had previously rejected such coverage. 315 Ark. at 524, 868 S.W.2d at 470.

However, the wording of the statute involving uninsured motorist coverage, which was construed in the two above cited cases and relied upon in the majority opinion, and the wording of the statute involving no-fault coverage, which is at issue in this case, is profoundly different. Section 23-89-403(b), a part of the uninsured motorist statute discussed in the two cited cases, does not mention policy renewal. It only provides that rejection of this coverage “shall continue until withdrawn in writing by the insured.” Id. In American Nat’l Property & Casualty Co. v. Ellis, we construed this language to mean that insurers had to offer uninsured motorist coverage to the insured in the event the insured substituted vehicles even though the insured had previously rejected such coverage. Id. at 524, 868 S.W.2d at 470. But, unlike the language of the uninsured motorists statute, the no-fault insurance statute in effect in 1994 provided, “After the rejection, unless the named insured requests coverage in writing, the coverage need not be provided in, nor supplemental to, a renewal policy.” Ark. Code Ann. § 23-89-203(b) (Repl. 1992). In its ruling, the trial court astutely recognized the difference in the language of the uninsured motorist coverage statute and the no-fault coverage statute and ruled that the insured’s reliance on American National Property & Casualty Co. v. Ellis and Lucky v. Equity Mutual Insurance Co. was misplaced.

Even though the above emphasized language in the no-fault coverage statute applies to both supplemental and renewal policies, the majority opinion states that it is ambiguous because the statute “does not precisely embrace renewals when vehicles have been substituted.” The accuracy of this statement is questionable, but even if it should be correct and even if there is some ambiguity about the legislative intent expressed in the no-fault coverage statute in effect in 1994, it was laid to rest by Act 527 of 1995. The act specifically states that its purpose is “to clarify” the statutes “to indicate that once an insured has rejected certain automobile insurance that the insurer should not be required thereafter to notify the insured of the availability of the rejected coverage at such time as the coverage not rejected is renewed . . . [or] substituted.” Act 527 of 1995, § 6 (emergency clause). It changes the wording of subsection (b) to provide as follows:

(b) After a named insured or applicant for insurance rejects this coverage, the insurer or any of its affiliates shall not be required to notify any insured in any renewal, reinstatement, substitute, amended, or replacement policy as to the availability of the coverage.

Act 527 of 1995, § 2 (to be codified as Ark. Code Ann. § 23-89-403(b)).

It is the settled law of this court that it is permissible to rely on an act that was not in effect at the time of an incident if the act is merely for clarification. Pledger v. Baldor, 309 Ark. 30, 827 S.W.2d 646 (1992); cf. Nathaniel v. Forrest City Sch. Dist. No. 7, 300 Ark. 513, 780 S.W.2d 539 (1989). It is manifest from the unmistakable language of the 1995 act that the trial court was correct in its ruling and should be affirmed.

The cardinal rule in construing and interpreting statutes is to give effect to the legislative intent. Southwest Elec. Power Co. v. Carroll Elec. Coop. Corp., 261 Ark. 919, 554 S.W.2d 308 (1977). It is also a cardinal rule of construction that legislative intent is to be first determined from the language used in the statute. Arkansas State Highway Comm’n v. Mabry, 229 Ark. 261, 315 S.W.2d 900 (1958). The basic rule of construction and interpretation to which all other construction and interpretation guides defer is to give effect to the legislative intent. McCoy v. Walker, 317 Ark. 86, 876 S.W.2d 252 (1994). The legislative intent is clear in this case. The majority opinion refuses to acknowledge it and refuses to acknowledge the public policy set and expressed by the General Assembly. This error causes the majority to violate the separation of powers doctrine, for it is the province of the legislative branch, and not the judicial branch, to set public policy. Arkansas Louisiana Gas v. Hardin, 206 Ark. 593, 176 S.W.2d 903 (1944).