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

text:
    Erin Marie CALNAN v. STATE of Arkansas
    CR 92-189
    841 S.W.2d 593
    Supreme Court of Arkansas
    Opinion delivered November 2, 1992

      Smith, Norwood & Smith, P.A., by: Doug Norwood, for appellant.

      Winston Bryant, Att’y Gen., by: J. Brent Standridge, Asst. Att’y Gen., for appellee.
   David Newbern, Justice.

The appellant, Erin Marie Calnan, was convicted of first-offense DWI, disorderly conduct, and as a result of her refusal to take a breathalyzer test, violation of the implied consent law. She was sentenced to two days in jail with credit for one day served and fined $250 plus costs for the DWI conviction. For the disorderly conduct conviction Calnan was fined $50 and sentenced to two days in jail to run concurrently with the other sentence, and she was given the same one day credit. For violation of the implied consent law, her driver’s license was suspended for six months.

Ms. Calnan argues the Trial Court erred by (1) violating her right to a jury trial with respect to the DWI conviction, and (2) violating her right to due process by refusing to allow her to obtain an independently administered blood test. We find reversible error on the first point and remand for a new trial. We discuss the second point to assist the Trial Court upon retrial.

On January 10, 1990, at approximately 1:30 a.m., Calnan was stopped by Officer Ron Largent of the Rogers Police Department, who had observed her driving erratically and speeding. Office Largent testified he smelled alcohol on Calnan’s breath and when he asked her to get out of the car she staggered. He administered field sobriety tests to Calnan, and based on her difficulty with each test, Calnan was arrested for DWI.

After Ms. Calnan was informed she was under arrest, she began yelling and cursing Officer Largent. She requested permission to make a phone call. While she was on the phone, Officer Largent informed her that, due to her condition, she would not be released until the next morning. Officer Largent testified that at that point it became necessary to take the phone away from her for fear she would yank it from the wall. He also testified that Calnan kicked and pushed him. He and another officer restrained her.

Officer Largent requested that Calnan take a breathalyzer test, but she refused and demanded to be taken to the hospital for a blood alcohol test. Officer Largent testified that he refused to comply as he was not required to do so in view of her refusal to take the breathalyzer test and that “she was just totally too combative and abusive to be taken to the hospital.” Ms. Calnan was later taken to the Benton County Jail for the remainder of the night.

Ms. Calnan was tried in Rogers Municipal Court and found guilty of DWI, disorderly conduct, violation of the implied consent law, and speeding. She appealed to the Circuit Court and was found guilty of all charges but speeding in a de novo bench trial. There was no mention by either party or the Court of trial by jury.

1. Jury trial

Ms. Calnan argues that she did not waive her right to a trial by jury, and thus the case should be reversed as her right to trial by jury was violated.

Arkansas Const. art. 2, § 7, provides in relevant part:

The right to trial by jury shall remain inviolate, and shall extend to all cases at law, without regard to the amount in controversy; but a jury trial may be waived by the parties in all cases in the manner prescribed by law. . . . [emphasis added].

The manner prescribed by law for a defendant in a criminal trial to waive the right to a jury trial is set out in Ark. R. Crim. P. 31.1, .2, and .3. Rule 31.2 states:

Should a defendant desire to waive his right to trial by jury, he must do so personally either in writing or in open court. A verbatim record of any proceedings at which a defendant waives his right to a trial by jury shall be made and preserved.

The law is clear that the only way a defendant may waive the jury trial right is by personally making an express declaration in writing or in open court and that the open court proceedings where the defendant waives his or her right must be preserved. That did not occur here. In Fretwell v. State, 289 Ark. 91, 708 S.W.2d 630 (1986), we wrote “Criminal cases which require trial by jury must be so tried unless (1) waived by the defendant, (2) assented to by the prosecutor, and (3) approved by the court. The first two requirements are mandatory before the court has any discretion in the matter.”

Our clearest expression that a criminal defendant bears no burden of demanding a trial by jury under our constitution and law came in Elmore v. State, 305 Ark. 426, 809 S.W.2d 370 (1991) . We stated “There was no need for Elmore to demand or move for a trial by jury, much less obtain a ruling on the issue, thus the trial court erred in not honoring Elmore’s right to be tried by a jury.”

No doubt we have a contemporaneous objection rule, which requires objection at the trial level in order to preserve an argument for appeal. Smith v. State, 310 Ark. 30, 832 S.W.2d 497 (1992); Miller v. State, 309 Ark. 117, 827 S.W.2d 149 (1992) . The contemporaneous objection rule applies even with respect to denial of constitutional rights. Moore v. State, 303 Ark. 514, 798 S.W.2d 87 (1990); Smith v. State, 296 Ark. 451, 757 S.W.2d 554 (1988). In the case of the right to jury trial, however, the Constitution provides that it may be waived “by the parties in all cases in the manner prescribed by law.”

The Constitution thus expresses the only manner in which the right can be lost, that is, by waiver. “Waiver” is an “intentional relinquishment of a known right.” Johnson v. Zerbst, 304 U.S. 458, 464 (1938). We have followed the familiar doctrine of expressio unius est exclusio alterius since our first volume of reported decisions. It means if the Constitution expresses one exception to a general provision, other exceptions are excluded. We first applied the doctrine in Hall v. State, 1 Ark. 201 (1838). It remains viable and governs in this case. The constitutional right to a jury trial cannot be lost by forfeiture. It can only be waived. It is otherwise to remain “inviolate.”

The State argues that our decision in Griggs v. State, 280 Ark. 339, 658 S.W.2d 371 (1983), holds that a defendant must raise in the trial court the denial of the constitutional right to a jury trial to preserve the argument for appeal. There the defendants did not contend that they did not waive their right to a jury trial in accordance with the law. They argued only that their waiver was omitted from the record. In affirming, we cited the contemporaneous objection rule but noted that the issue being decided was not a constitutional one. While it does appear that we used the contemporaneous objection rule to overcome failure to comply with the “preservation” aspect of Rule 31.2, our opinion consisted of less than one page, and it is apparent that no consideration was given to the Rule and the constitutional requirement that a jury trial remain inviolate unless waived by the parties as provided by law.

There are four exceptions to the contemporaneous objection rule. They occur (1) when, in a death penalty case, a trial court fails to bring to the jury’s attention a matter essential to its consideration of the death penalty itself; (2) when a trial court errs at á time when defense counsel has no knowledge of the error and thus no opportunity to object; (3) when a trial court should intervene on its own motion to correct a serious error; and (4) when the admission or exclusion of evidence affects a defendant’s substantial rights. Wick v. State, 270 Ark. 781, 606 S.W.2d 366 (1980). The third exception applies in this case. There need be no contemporaneous objection to raise an issue on appeal if otherwise a serious error will result.

Our Court of Appeals held in a civil case that the right to a jury trial is so fundamental that if it is denied a serious error results. Bussey v. Bank of Malvern, 270 Ark. 37, 603 S.W.2d 426 (Ark. App. 1980). The principle applies equally, if not more so, to a criminal trial.

In every criminal trial where there is a right to trial by jury, the court should proceed as if a jury were to be used unless waiver takes place in accordance with the law. That was the intent, clearly expressed, of our opinion in Elmore v. State, supra. The burden is on the trial court to assure that, if there is to be a waiver of the right to a jury trial in a criminal case, it be done in accordance with the Rule by which we have implemented our Constitution.

The Arkansas Constitution and Rules of Criminal Procedure assume a defendant will be tried by a jury unless that right is expressly waived. The law providing the manner of waiver is obviously designed to assure that the jury trial right is not forfeited by inaction on the part of a defendant. The contemporaneous objection rule does not apply in this circumstance and the conviction must be reversed.

2. Constitutionality of the statute

The argument here is that Ms. Calnan was deprived of due process of law because she was not allowed to go to a hospital to obtain a blood test. Our law permits a person who has been subjected to a breathalyzer test to obtain an independent second test. Arkansas Code Ann. § 5-65-204(e) (Supp. 1991) provides in relevant part:

(e) The person tested may have a physician or a qualified technician, registered nurse, or other qualified person of his own choice administer a complete chemical test in addition to any test administered at the direction of a law enforcement officer.
* * *
(2) The refusal or failure of a law enforcement officer to advise such person of this right and to permit and assist this person to obtain such test shall preclude the admission of evidence relating to the test taken at the direction of a law enforcement officer.

As the breathalyzer test was refused by Calnan, there was no requirement that an independent chemical test be afforded her pursuant to the Statute. McEntire v. State, 305 Ark. 470, 808 S.W.2d 762 (1991). The Statute is clear that an independent test should be made available in addition to tests administered at the law enforcement officer’s direction.

In Patrick v. State, 295 Ark. 473, 750 S.W.2d 391 (1988), we held that a defendant’s due process rights were not violated when he was not informed of his right to an independent test for intoxication. We stated that Patrick did not have a right to an independent chemical test because he was not given a test at the direction of the law enforcement officer.

In Grayson v. State, 30 Ark. App. 105, 783 S.W.2d 75 (1990), the Court of Appeals dealt with a similar issue. The Court of Appeals held that pursuant to Ark. Code Ann. § 5-65-204(e)(2) the remedy for a person who is not afforded the opportunity to obtain an additional test is the exclusion of any chemical test taken at the direction of the law enforcement officer. The Court of Appeals wrote, “It naturally follows that appellant, in not having any test results introduced into evidence against him, was not deprived of the right the statute cited [5-65-204(e)] is intended to insure.” See also Fletcher v. City of Newport, 260 Ark. 476, 541 S.W.2d 681 (1976).

Nor can we accept the contention that the Statute is unconstitutional because it prohibited Ms. Calnan from gathering evidence. We know of no authority, other than the law of mandatory bail, which is not at issue here, requiring that a defendant who has been arrested for an offense be let out of jail to gather evidence.

Reversed and remanded.

Glaze, J.,

dissents for most of the same reasons set out in the dissenting opinion in Winkle v. State, 310 Ark. 713, 841 S.W.2d 589 (1992). Hays and Brown, JJ., join in the dissent in this case as well.

Robert L. Brown, Justice,

dissenting. This case was a misdemeanor appeal in circuit court where the appellant was sentenced to two days in jail for DWI and fined. The majority has reversed her conviction and held that she was entitled to a jury trial, though neither she nor her attorney requested one in circuit court. I disagree.

The majority is correct that the right to trial by jury is a fundamental right, time-honored and revered. In a very real sense what confronts us in this case is a delineation of that right. The question is two-fold: 1) in what cases does the right attach? and 2) under what circumstances may it be waived or forfeited?

I. RIGHT TO TRIAL BY JURY

Under the majority’s theory of the case and constitutional interpretation, trial by jury is available and inviolate in “all cases at law.” Does this mean that the right attaches for all misdemeanors and small claims, regardless of the court where they are tried? Surely not. But in support of its argument the majority quotes from the Arkansas Constitution:

The right of trial by jury shall remain inviolate, and shall extend to all cases at law, without regard to the amount in controversy, but a jury trial may be waived by the parties in all cases in the manner prescribed by law; and in all jury trials in civil cases, where as many as nine of the jurors agree upon a verdict, the verdict so agreed upon shall be returned as the verdict of such jury, provided, however, that where a verdict is returned by less than twelve jurors all the jurors consenting to such verdict shall sign the same.

Ark. Const. art.2, § 7. (Emphasis added.) Though I recognize that this section has been applied in the past to criminal offenses, as well as civil matters, I question its application to criminal prosecutions. As is the case with the Seventh Amendment to the Federal Constitution, this amendment, by its terms, contemplates the amounts involved in the controversy, or damages. It also specifically refers to “civil cases.” Accordingly, I interpret the jury-trial guarantee in Section 7 as applying to civil matters — not criminal prosecutions.

The section of the Arkansas Constitution that deals with criminal prosecutions is Article 2, Section 10:

In all criminal prosecutions the accused shall enjoy the right to a speedy and public trial by impartial jury of the county in which the crime shall have been committed; provided that the venue may be changed to any other county of the judicial district in which the indictment is found, upon the application of the accused, in such manner as now is, or may be, prescribed by law; and to be informed of the nature and cause of the accusation against him, and to have a copy thereof; and to be confronted with the witnesses against him; to have compulsory process for obtaining witness in his favor, and to be heard by himself and his counsel.

Ark. Const. art 2, § 10. (Emphasis added.) In the commentary to our waiver rules for trial by jury, the fact that Section 10 applies to criminal prosecutions is brought home: “Article 2, § 10 of the Arkansas Constitution confers the right to trial by jury upon an accused. Under this provision an accused enjoys the right to a jury trial in all criminal prosecutions in a circuit court.” Commentary to Article IX, Arkansas Rules of Criminal Procedure, Rule 31, p. 250.

The commentary then goes on to say that Section 10 does not distinguish between serious and petty offenses with respect to the right’s attachment. This is not correct. Specific reference is made to indictments in Article 2, the clear indication being that the right to trial by jury was intended to apply to felonies. Indictments are not filed in misdemeanor cases. See Burrow v. City of Hot Springs, 85 Ark. 396, 108 S.W. 823 (1908).

The Federal Constitution has a similar guarantee for trial by jury under the Sixth Amendment, which has been applied to the states through the Fourteenth Amendment. Duncan v. Louisiana, 391 U.S. 145 (1968). The right to a jury trial under the Federal Constitution attaches to “serious” crimes. Id. The U.S. Supreme Court has expanded on what it means by a serious crime. See Blanton v. City of North Las Vegas, 489 U.S. 538 (1989). In Blanton, the issue was whether the Federal Constitution required that a jury trial be afforded for a charge brought by the State of Nevada for driving under the influence of alcohol which carried a maximum sentence of six months for first offense. The Court held that DWI in Nevada was a petty offense because it entailed a penalty of not more than six months. The Court added than an objective indicator of seriousness was the maximum penalty assessed for the crime by statute:

[P]rimary emphasis, however, must be placed on the maximum authorized period of incarceration.
Following this approach, our decision in Baldwin established that a defendant is entitled to a jury trial whenever the offense for which he is charged carries a maximum authorized prison term of greater than six months. [Citing authority.]

489 U.S. at 542.

In the case before us, the criminal offenses that were tried de novo in circuit court were all misdemeanors. But first-offense DWI is punishable by a maximum prison term of one year and a fine of $150 to $1,000, even though only two days in prison were assessed in this case. Ark. Code Ann. §§ 5-65-111(a), 5-65-112(1) (1987). Under the objective test set out in Duncan v. Louisiana, supra, and Blanton v. City of North Las Vegas, supra, the crime is deemed serious due to the potential for a maximum incarceration of one year, and the constitutional right to trial by jury attaches under the Sixth Amendment. This is so, even when the applicable state constitution appears to afford the jury trial right to felonies rather than misdemeanors as the Arkansas Constitution appears to do in Article 2, Section 10. See Duncan v. Louisiana, supra. Hence, it is not Article 2, Section 7 or Section 10, of the Arkansas Constitution that mandates a jury trial in the case, but the Federal Constitution as interpreted by decisions of the United States Supreme Court.

II. WAIVER OR FORFEITURE

The issue then becomes whether the right to a jury trial, which attached in this case, can be forfeited by non-compliance with our contemporaneous objection rule or whether the right can only be lost by an overt waiver in accordance with Ark. R. Crim. P. 31.1 - 31.3 Under these facts, I contend that the right can be forfeited.

As already noted, Article 2, Section 7, relates to civil cases — not criminal. Its waiver provision, as a consequence, does not control this case, as the majority maintains. Our criminal rules and our statutes provide a jury-trial waiver by the defendant which must be expressly made. Ark. Code Ann. § 16-89-108 (1987). Ark. R. Crim. P. 31.1 - 31.3. Again, though, the rules and statute must be interpreted as relating primarily to Article 2, Section 10, and Section 10 guarantees the right for felonies, not misdemeanors. But, in addition, the statute and rules do not provide the exclusive means of losing a constitutionally protected right. That right may also be forfeited under circumstances such as we have here.

When a defendant has been charged with a felony, the right to a jury trial and the waiver provisions kick in under state law. When a defendant has been charged with a “serious” misdemeanor, the United States Supreme Court also says the right to a jury trial must be afforded. But the Court has not gone so far as to hold that with respect to all misdemeanors the right may not be forfeited under state law. A reasonable interpretation is that the right can be forfeited in certain misdemeanor cases by failure to demand it or to object to its absence. That is exactly what happened in the instant case.

Failure to object to a matter at the trial level deprives the circuit court of the opportunity of ruling on that issue, as we have noted many times. See, e.g., Withers v. State, 308 Ark. 507, 825 S.W.2d 819 (1992); Wicks v. State, 270 Ark. 781, 606 S.W.2d 366 (1980). The contemporaneous objection rule is well-entrenched in this state. For example, we said in Withers: “We have long been resolute in holding that a contemporaneous objection is a prerequisite to our review .... [Citations omitted.] Otherwise, this would give rise to a basic unfairness in that the trial court would be foreclosed from considering the point of error on appeal.” 270 Ark. at 510, 606 S.W.2d at 821. Parties on appeal are, therefore, bound by the scope and nature of those arguments presented to the trial court for its consideration. Williams v. State, 304 Ark. 279, 801 S.W.2d 296 (1990).

This court has stressed that the denial of any right, even a constitutional one like due process protection, must be objected to at trial to be preserved for appeal. See, e.g., Smith v. City of Little Rock, 305 Ark. 168, 806 S.W.2d 371 (1991) [retroactive application of legislation]; Kittler v. State, 304 Ark. 344, 802 S.W.2d 925 (1991) [failure to receive notice prior to trial of filing of habitual offender charge]; Barnes v. State, 294 Ark. 369, 742 S.W.2d 925 (1988) [challenge to constitutionality of probation statute]; Harvey v. State, 292 Ark. 267, 729 S.W.2d 406 (1987) [defective recording of statement as violation of due process]; see also Wainwright v. Sykes, 433 U.S. 72, 90 (1977), where the Court noted: “If a criminal defendant thinks that an action of the state trial court is about to deprive him of a Federal Constitutional right there is every reason for following state procedure in making known his objection.”

There is precedent for a situation virtually identical to our present dilemma. See Griggs v. State, 280 Ark. 339, 658 S.W.2d 371 (1983). In Griggs, the issue also was a misdemeanor trial before the circuit court involving third-degree burglary, and a year’s sentence was given with nine months suspended. We said there that we recognized the constitutional right to a jury trial in felony cases, but we also stated that in Griggs a constitutional issue was not involved, which, implicitly, was due to the fact that the crime was a misdemeanor. We then held that a constitutional question must be raised in the trial court for the question to be reviewable on appeal. Since it was not raised in the trial court, it was forfeited for purposes of appeal. Thus, in Griggs, we squarely associated forfeiture of the right to a jury trial in a misdemeanor case with failure to object to its absence at the trial court level. The same issue now looms before us in this case. As in Griggs, the record is silent on the jury trial question. It may have been discussed at the circuit court level or it may not have been. We can only speculate on the matter. What we do know is that no demand or objection relating to a jury trial appears of record.

No action was taken by Calnan to preserve her right to trial by jury for DWI, a misdemeanor, and she was sentenced to two days in jail. She is presumed to have known her rights, especially when she was represented by counsel. Yet, she opted for trial before the circuit judge. It was only after conviction and on appeal to this court that she asked for a jury trial.

We go too far in mandating jury trials for misdemeanors when no jury trial has been requested and no objection made. Defense counsel and the appellant were presumed to have known the appellant’s rights. By waiting until after conviction to assert a jury trial guarantee smacks of double protection. Failure to demand a right in a misdemeanor appeal must carry with it some consequences. In this case, the consequence should be forfeiture of that right.

I respectfully dissent.

Hays and Glaze, JJ., join.

        Baldwin v. New York, 399 U.S. 66 (1970) (plurality opinion).

       Ark. R. Crim. P. 31.3 does authorize a waiver by counsel in misdemeanor cases where a fine is involved.


source: Caselaw Access Project

author: David Newbern, Justice.

license: Public Domain

text:
    Eddie DANIELS v. RILEY’S HEALTH AND FITNESS CENTERS, d/b/a Little Rock Athletic Club
    92-116
    840 S.W.2d 177
    Supreme Court of Arkansas
    Opinion delivered November 2, 1992

      Gary Eubanks & Associates, by: James Gerard Schulze and T. Michael Lee, for appellant.

      Anderson & Kilpatrick, by: Marian T. Hopkins, for appellee.
   David Newbern, Justice.

Eddie Daniels, the appellant, sued the appellee, Riley’s Health and Fitness Centers, d/b/a Little Rock Athletic Club (Club), for injuries he received while working for the Club, having been furnished to the Club by Aaron Temporary Services (Services). He alleged his injuries were caused by the negligence of a Club employee. Summary judgment was entered in favor of the Club because of the exclusivity of the workers’ compensation remedy. Ark. Code Ann. § 11-9-105 (1987). Daniels contends summary judgment was improper because he was not employed by the Club and thus the workers’ compensation coverage provided by Services did not preclude his suit. We hold Daniels was employed by both Services and the Club in accordance with the dual employment doctrine, and thus there was no error.

The evidence before the Trial Court, consisting of discovery responses and affidavits revealed these facts. Daniels and representatives of Services and the Club all signed a time card which contained a contract pursuant to which Daniels was provided to the Club by Services. It provided Services assumed all legal responsibility as employer, including workers’ compensation coverage. The contract specified that if the Club hired Services’ employee within 12 weeks of his placement with the Club, the Club would be obligated to pay $600 liquidated damages. This provision was placed in the contract to protect Services’ investment in its employees. Daniels was injured while working at the Club removing the surface of a tennis court.

Summary judgment is appropriate where the pleadings, depositions, answers to interrogatories and admissions on file, together with affidavits, if any, show that there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Ark. R. Civ. P. 56(c); Morris v. Valley Forge Ins. Co., 305 Ark. 25, 805 S.W.2d 948 (1991).

Daniels argues he could not have known he was employed by the Club in view of the wording of the contract, and there was no evidence he was employed by the Club. He contends a jury should have been allowed to decide the issue as one of fact. In our view, all relevant facts were undisputed. The real question here is thus whether the Club was entitled to summary judgment as a matter of law.

The dual employment doctrine

The Club cites the dual employment doctrine in support of its contention that while Daniels was Services’ employee he was also employed by the Club as a matter of law and, therefore, the exclusive remedy provision of the Worker’s Compensation Act bar recovery. We have recognized the doctrine. In Charles v. Lincoln Const. Co., 235 Ark. 470, 361 S.W.2d 1 (1962), we cited South Arkansas Feed Mills v. Roberts, 234 Ark. 1035, 356 S.W.2d 645 (1962), where we quoted from 1C, A. Larson, The Law of Workmen’s Compensation, § 48.00 (1962), under the heading “Lent Employees and Dual Employment:”

When a general employer lends an employee to a special employer, the special employer becomes liable for workmen’s compensation only if
(a) The employee has made a contract for hire, express or implied, with the special employer;
(b) The work being done is essentially that of the special employer; and
(c) The special employer has the right to control the details of the work.

The remainder of that section was not quoted but is relevant to this case. It provides:

When all three of the above conditions are satisfied in relation to both employers, both employers are liable for workmen’s compensation.
Employment may also be “dual” in the sense that, while the employee is under contract of hire with two different employers, his activities on behalf of each employer are separate and can be identified with one employer or the other. When this separate identification can clearly be made, the particular employer whose work was being done at the time of injury will be held exclusively liable.

In the Charles opinion we also quoted from Stuyvesant Corporation. Waterhouse, 74 So.2d 554 (Fla. 1954), as follows:

. . . the solution of almost every such case finally depends upon the answer to the basic, fundamental and bedrock question of whether as to the special employees the relationship of employer and employee existed at the time of the injury. If the facts show such relationship, the existence of a general employer should not change or be allowed to confuse the solution of the problem.

We quoted from Nepstad v. Lambert, 235 Minn. 1, 50 N.W.2d 614 (1951) as follows:

Since both employers may each have some control there is nothing logically inconsistent, when using this test, in finding that a given worker is the servant of one employer for certain acts and the servant of another for other acts . . . .The crucial question is which employer had the right to control the particular act giving rise to the injury. In this connection, Restatement Agency, 227, comment a (2) states:
Since the question of liability is always raised because of some specific act done the important question is not whether or not he remains the servant of the general employer as to matters generally but whether or not as to the act in question, he is acting in the business of and under the direction of one or the other. (Italics supplied.)

There is no question that the Club exercised the right to control Daniels, and in both his brief and oral argument Daniels conceded as much. Nor is there any doubt that Daniels was in the scope of his employment, performing a task for and under supervision of the Club when he was injured. He argues, however, that the right to control is not the only issue to be determined in finding dual employment and points to his own affidavit denying employment with the Club and the contract provision which he argues prohibits a finding that he was an employee of the Club.

The quotation from Professor Larson’s treatise supports Daniels’ assertion that all three conditions must be met before the doctrine applies. It is also made clear, however, that there may be employment by virtue of an implied contract and that there may be situations where the employee is under contract with different employers simultaneously.

The language in the contract on which Daniels relies was intended to prohibit the customer from hiring him as their permanent employee without payment of a penalty under certain conditions. There is nothing in that language to prohibit Daniels from being a temporary employee of the Club by virtue of an implied in fact contract.

In other jurisdictions a temporary employee has been held, for purposes of applying the exclusivity provision of workers’ compensation coverage, to be the employee of a temporary employer by virtue of an implied contract. Summary judgment or dismissal of the employee’s claim was found appropriate in Beaver v. Jacuzzi Brothers, Inc., 454 F.2d 284 (1972) (applying Arkansas law); Fox v. Contract Beverage Packers, Inc., 398 N.E.2d 709 (Ind. Ct. App. 1980), and McMaster v. Amoco Foam Products Company, 735 F. Supp. 941 (D.S.D. 1990). In none of these cases was there an express penalty clause contract with the temporary employment agency, but we find that to be immaterial.

As stated above, the language on which Daniels relies required only that Daniels not become the Club’s permanent employee within a specified time or else the Club would become liable for liquidated damages. As the Trial Court correctly found, there was dual employment, and the only remedy available against either of the employers was workers’ compensation. There was no error in granting summary judgment.

Affirmed.

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


text:
    HMO ARKANSAS, INC. v. Jeffrey & Christine DUNN
    92-82
    840 S.W.2d 804
    Supreme Court of Arkansas
    Opinion delivered November 2, 1992
    [Rehearing denied December 7, 1992.]

      Walters Law Firm, P.A., for appellant.

      Turner & Mainard by: James C. Mainard, for appellee.
   David Newbern, Justice.

This is an insurance case. The appellant, HMO Arkansas, Inc., contends it was erroneously held liable for the claim of the appellees, Jeffrey and Christine Dunn. We agree it was error for the Trial Court to apply provisions of the general laws governing health insurance providers to a health maintenance organization (HMO) such as HMO Arkansas, Inc. Had the provisions specifically applicable to HMOs been applied, the Dunns’ claim would have failed. We also conclude the Dunns could not recover under their contract of insurance because they failed to comply with its terms. We, therefore, must reverse the judgment and dismiss the claim. In view of our holding that the claim is to be dismissed, we need not address the parties’ contentions with respect to the penalty and attorney’s fee which were awarded, as they were dependent upon the basic recovery and, therefore, must also be reversed.

Christine Dunn was formerly married to Greg Thomas, an employee of Quanex Corporation, Mac Steel Division, located in Fort Smith. While married to Thomas, Christine was insured under the group health insurance policy provided by the employer through HMO Arkansas, Inc. Christine and Thomas divorced, and she elected to continue her coverage as a single person. She subsequently married Jeffrey Dunn, and they elected to continue coverage. Christine became pregnant and prematurely gave birth on February 11, 1989. At the time of the birth the Dunns had in effect a “couple” membership, and they did not notify the insurer of their intent to add the child to their coverage until after the birth.

Coverage was denied, and the Dunns sued to recover the birth costs. The Dunns argued that Ark. Code Ann. § 23-79-129 (1987) required coverage, but HMO Arkansas, Inc., argued the Statute was not applicable to HMOs. The Trial Court resolved the matter on a joint stipulation of facts and ordered HMO Arkansas, Inc., to pay the Dunns’ claim for $59,431.42 plus attorney’s fee and penalty without stating a basis for his conclusion.

HMO Arkansas, Inc., argues the Trial Court erred in holding the Dunns entitled to coverage because they were not entitled to it pursuant to the insurance contract or Arkansas insurance law.

1. The statutes

The statutes in question are:

23-79-129. Coverage of newborn infants.
(a) Every disability insurance policy, contract, certificate, or health care plan sold, delivered, issued, or offered for sale, issue, or delivery in this state, other than coverage limited to expenses from accidents or specified diseases, whether an individual or group policy, contract, certificate, or plan, which covers the insured and members of the insured’s family, shall include coverage for newborn infant children by the insured from the moment of birth.
* * *
(b) The insurer may require that the insured give notice to his insurer of any newborn children within ninety (90) days of the birth or before the next premium due date, whichever is later.
(c) The Insurance Commissioner shall not approve any policy or contract to be sold, issued, or offered for sale in this state unless it shall specifically include the coverage required in this section for newborn infants.

This Statute is a part of the general provisions concerning all insurance policies written in the State. A specific provision found in a separate chapter covering health maintenance organizations is as follows:

23-76-104. Inapplicability of certain laws.
(a) Except as otherwise provided in this chapter, provisions of the insurance law and provisions of hospital and medical service corporation laws shall not be applicable to any health maintenance organization granted a certificate of authority under this chapter. This provision shall not apply to an insurer or hospital and medical service corporation licensed and regulated pursuant to the insurance laws or the hospital and medical service corporation laws of this state except with respect to its health maintenance organization activities authorized and regulated pursuant to this chapter.

When construing a statute we compare it with other statutes on the same general subject matter and if possible reconcile them. Sargent v. Cole, 269 Ark. 121, 598 S.W.2d 749 (1980). All acts passed upon the same subject matter should be construed together and made to stand if capable of being reconciled. Vandiver v. Washington County, 274 Ark. 561, 628 S.W.2d 1 (1982).

Looking at the plain meaning of the language in these statutes there is no doubt that the general provisions of the insurance law do not apply to HMOs. The only insurance statutes applicable to HMOs are found in a chapter entitled “Hospital and Medical Service Corporations” and are identified in the HMO chapter as follows:

23-76-103. Applicability of 23-75-101 - 23-75-110 and 23-75-112 - 23-75-120.
Sections 23-75-101 - 23-75-110 and 23-75-112 - 23-75-120 shall be construed to apply to health maintenance organizations, health care plans, and evidences of coverage except to the extent that the commissioner determines that the nature of health maintenance organizations, health care plans, and evidences of coverage render such sections clearly inappropriate.

Nothing in any of these sections requires automatic coverage of a newborn from the time of birth, so we are left to determine whether the intent of the General Assembly will be defeated in this situation if the requirements of the general insurance law are not applied in this case. The answer to the question is clearly set out in the HMO Statutes as follows:

23-76-101. Purpose.
(a) The General Assembly determines that health maintenance organizations, when properly regulated, encourage methods of treatment and controls over the quality of care which effectively contain costs and provide for continuous health care by undertaking responsibility for the provision, availability, and accessibility of services.
(b) For this reason, and because the primary responsibility of a health maintenance organization lies in providing quality health care services on a prepaid basis without regard to the type and number of services actually rendered, rather than providing indemnification against the cost of the services, the General Assembly finds it necessary to provide a statutory framework for the establishment and continuing regulation of health maintenance organizations which is separate from the insurance laws of this state, except as otherwise provided in this chapter [emphasis added].

The HMO law originated in Act 454 of 1975 which was approved on March 18, 1975. The general provisions of the insurance code set out in this case were enacted as Act 298 of 1975 and approved on March 3, 1975. With full knowledge of the general provisions of the insurance code the legislature specifically excepted HMOs from the general insurance provisions. The Trial Court, therefore, was in error in concluding that coverage was required if the decision rested upon § 23-79-129.

2. The contract

Nor does the contract provide a basis for recovery. It provides several categories of coverage. Article III of the Group Master Contract provides:

The employee may choose one of the following types of memberships, subject to the group’s election of enrollment categories:
(1) Single membership, to include coverage for the employee only;
(2) Couple membership, to include coverage for the employee and spouse of the employee;
(3) Two party membership, to include coverage for the employee and one dependant child as defined in Article II. paragraphs A.2.(b), (c), or (d).
(4) Family membership, to include coverage for the employee and all eligible and enrolled dependents.

Article VI of the group contract provides:

Subject to payment of all applicable monthly membership charges and all other provisions of this contract or certificate, coverage shall become effective as follows:
* * *
(d) Changing coverage due to pregnancy can occur effective on group’s next first of the month if written notice is received prior to delivery. Newborn coverage will then begin on the date of birth ....
(e) Coverage for newly eligible dependent, (other than a newborn or legally adopted child) will be effective the first day of the month following receipt by HMO of written application, if the member has a family contract, provided such application is made within 31 days after the Dependent becomes eligible for coverage.

Article II of the contract defines eligibility and provides as follows:

A. Who is Eligible
(2) Dependent. To be eligible to enroll as a dependent .... The person must also be either:
(b) An unmarried, dependent child of the Subscriber ....
NOTE: Children born to the Subscriber and/or his spouse,.... These children will be treated as dependents if enrolled within 31 days from the date of birth

The contract is relatively simple. If there is a single or couple membership and there is a pregnancy the child is an eligible dependent who will be covered from birth if during the pregnancy the prospective parent elects, by application accompanied with the payment of the appropriate fee, to convert to a family or two party membership. If there is no election prior to the birth then the parent must apply within 31 days of the birth of the child to establish the child as a dependent within the meaning of Article II.A.2.

An application for a membership change accompanied by payment of the premium was mailed as of May 3, 1989, outside the 31 day period. The Dunns, therefore, failed to meet the contract requirements.

As there is no statutory coverage requirement and the Dunns did not fulfill the contract requirements, the judgment must be reversed.

Reversed and dismissed.


text:
    HOPE EDUCATION ASSOCIATION, et al. v. HOPE SCHOOL DISTRICT
    92-526
    839 S.W.2d 526
    Supreme Court of Arkansas
    Opinion delivered November 2, 1992

      Roachell Law Firm, by: Richard W. Roachell, for appellant.

      Smith, Stroud, McClerkin, Dunn & Nutter, by: R. Gary Nutter, for appellee.
   David Newbern, Justice.

This case involves the chancellor’s refusal to require the Board of Education of Hope School District (the Board) to submit to the District Personnel Policies Committee (the Committee) a five percent increase in extra duty pay for teachers and administrators prior to adoption. The Chancellor held the Committee was invalidly formed, and therefore, the Board’s failure to refer the five percent increase was excused.

The Hope Education Association (HEA), an unincorporated association of fifty-eight classroom teachers employed by the Hope School District (HSD), argues the Chancellor erred because (1) the Board was estopped from raising the alleged invalidity of the Committee, and (2) the Committee was formed in substantial compliance with Arkansas law. As HEA did not present evidence on all elements of estoppel or argue substantial compliance to the Trial Court, we must affirm.

On July 11, 1988, the Board adopted a salary schedule for the 1988-89 school year and a five percent increase in extra duty pay for teachers and administrators who work after school hours. The Board submitted the salary schedule to the Committee prior to its adoption but failed to submit the five percent increase in extra duty pay.

The President of HEA sent a letter to the Board asking that it reconsider its action because the increase had not been referred to the Committee. The Board refused to do so at its August and September meetings.

HEA filed suit claiming the Board violated Ark. Code Ann. § § 6-17-201 — 208 (1987) by failing to refer the five percent increase to the Committee. HEA requested a declaratory judgment invalidating the increase and a mandatory injunction requiring the Board to submit the proposal to the Committee. HSD answered and admitted all factual allegations in HEA’s complaint, but denied that Arkansas law required submission of the proposed increase to the Committee for review. Because HSD admitted all the factual allegations in the complaint, HEA moved for judgment on the pleadings pursuant to Ark. R. Civ. P. 12(c) (1992).

After HEA’s motion for judgment on the pleadings was filed, HSD counterclaimed seeking a ruling invalidating the election by which the teacher members of the Committee were chosen. HSD claimed the teacher members of the Committee were not elected by a majority of teachers employed by the District as required by Act 687 of 1987. Instead, the members were elected separately by school campus.

Act 687 required each school district to establish a committee on personnel policies consisting of no fewer than five classroom teachers and no more than three administrators. Ark. Code Ann. § 6-17-203(a) (1987). The Act also provided:

[T]he classroom teacher members of each district’s committee on personnel policies shall be elected by a majority of the classroom teachers employed in the district by secret ballot in an election conducted by the teachers.

Ark. Code Ann. § 6-17-203(b) (1987) (emphasis added). In 1989, this provision was amended to require that the teacher members of the committee be elected by a majority of the classroom teachers voting. Act 56 of 1989; Ark. Code Ann. § 6-17-203(b) (Supp. 1991).

Responding to HSD’s counterclaim, HEA admitted the teacher members of the Committee were elected by teachers voting separately by campus contrary to the law. HEA argued, however, that the elections should be upheld because HSD’s administrative officials controlled the manner in which they were conducted.

The Chancellor ruled that, although the Board violated Ark. Code Ann. § 6-17-205(c) (1987) by not referring the five percent increase to the Committee, the violation was excusable. He stated the teacher members of the Committee were not elected in accordance with Ark. Code Ann. § 6-17-203(b) (1987). Because the Committee was invalidly constituted, the Board’s failure to submit the proposal was excused. HEA’s complaint was dismissed with prejudice.

1. Estoppel

We have some doubt whether HEA adequately raised the issue of estoppel in the Trial Court. The only allegation relevant to an estoppel theory was that school officials set up the elections. The word “estoppel” was not used in the proceedings below, and the Chancellor did not use it in his ruling. Assuming the issue was presented to the Chancellor, it is clear that HEA failed to prove the necessary elements of estoppel.

To apply estoppel to a sovereign, there are four requirements: (1) the party to be estopped must know the facts; (2) he or she must intend that his or her conduct shall be acted upon or must act so that the party asserting the estoppel has a right to believe the other party so intended; (3) the party asserting the estoppel must be ignorant of the true facts; and (4) the party asserting the estoppel must rely on the other party’s conduct to his or her injury. Miller v. City of Lake City, 302 Ark. 267, 789 S.W.2d 440 (1990); Foote’s Dixie Dandy v. McHenry, Adm’r, 270 Ark. 816, 607 S.W.2d 323 (1980).

Assuming HSD’s administrative officials set up the elections which the Chancellor found to be invalid, HEA has produced no evidence with respect to some essentials of estoppel. There was no evidence that HSD officials knew the campus based elections were invalid or that they intended their conduct to be relied upon by HEA. There was no evidence that HEA was ignorant of the facts or relied on HSD’s actions to their detriment. Estoppel is unavailable when there is no showing of reliance upon a misleading action. Arkansas Alcoholic Beverage Control Div. v. Person, 309 Ark. 588, 832 S.W.2d 249 (1992); Arkansas Power & Light Co. v. Arkansas Pub. Serv. Comm., 275 Ark. 164, 628 S.W.2d 555 (1982).

In conclusion on this point, and lest our opinion be misleading, we point out that the law in effect at the time of the elections expressly required them to be “conducted by the teachers.” Ark. Code Ann. § 6-17-203(b) (1987). In Nathanielv. Forrest City School Dist. No. 7, 300 Ark. 513, 780 S.W.2d 539 (1989), we interpreted the phrase “conducted by the teachers” to mean without any direction or interference from administration.

2. Substantial compliance

HEA next contends the Committee formulation by separate campus based elections substantially complied with the requirements of the Statute. It is argued in HEA’s brief before this Court that the Committee was functioning and fulfilling the intent, purpose, and spirit of the Statute and should not have been declared invalid.

That is a good argument, but we find nothing in the record to indicate that the issue of substantial compliance with the Statute was presented to the Chancellor for consideration. We will not consider an issue for the first time on appeal. See, e.g., Smith v. City of Little Rock, 305 Ark. 168, 806 S.W.2d 371 (1991).

Affirmed.


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

text:
    IN THE MATTER OF SUGARLOAF MINING COMPANY, Permit No. P-272-M-CO Banco Portugues Do Atlantico v. Arkansas Department of Pollution Control & Ecology
    92-409
    840 S.W.2d 172
    Supreme Court of Arkansas
    Opinion delivered November 2, 1992
    [Supplemental Opinion on Denial of Rehearing December 14, 1992.]

      Harper, Young, Smith & Maurras, by: S. Walton Maurras, for appellant Banco Portugues Do Atlantico.

      Chisenhall, Nestrud & Julian, P.A., by: Ann P. Faitz; and Steve Weaver, for appellee Arkansas Department of Pollution Control and Ecology.

      Hays and Brown, JJ., would grant rehearing.

   David Newbern, Justice.

This is an appeal from the final order of the Circuit Court of Sebastian County, Greenwood District, which affirmed Minute Order 91-01 issued by the Arkansas Department of Pollution Control and Ecology Commission (PC&E), the appellee. That order required forfeiture of a letter of credit issued by Banco Portugués Do Atlántico (Banco), the appellant. We conclude it was error to permit the forfeiture, and thus we reverse.

PC&E issued a surface or strip mining permit to Sugarloaf Mining Company (Sugarloaf) on October 9, 1981. The permit, # P-272-M-CO, was bonded by American Casualty Company, which later became National Fire Insurance Company (National Fire), in the amount of $657,250. The bond had an expiration date of October 9, 1986.

The testimony of Arthur Ritchie, Engineer Supervisor for PC&E’s Mining Division, established that this permit limited Sugarloaf to reclamation work only within a confined work area. The reclamation requirement amounted to bringing the area to approximate original contour, replacing topsoil, and replacing vegetation. The amount of the bond was calculated to cover the cost of reclamation of the area and was tied to the specific conditions set out in the permit. The resulting figure represents the cost of reclamation in an existing 4000 feet of pit with an area of 118 acres. The specifications called for the preparation and loading area of 59 acres at $ 1500 per acre, and the permit would not allow Sugarloaf to work beyond that point until an adjustment was made in the bond.

Prior to the expiration of the permit, Sugarloaf was notified that an increase in bond was required. National Fire’s bond was then augmented with a letter of credit issued by Banco on June 9, 1986, in the amount of $375,385.75. The letter of credit stated that it covered permit § P-272-M-CO and that it was payable upon demand by PC&E upon the satisfaction of certain conditions, including presentation of a draft accompanied by a notice of forfeiture issued by PC&E and a statement that the bond covering the permit had been fully depleted for reclamation.

Contemporaneously with the issuance of the letter of credit Sugarloaf and PC&E were negotiating to begin mining operations over a larger project area. The negotiations resulted in the issuance of another permit which PC&E described as # P-272-MCO (Renewal) which substantially altered the terms of the agreement between Sugarloaf and the PC&E. The application for a renewal was received by PC &E prior to the expiration of the first permit, but because the application was unacceptable, it was not signed by Sugarloaf until July 31, 1986, and finally approved by PC&E until August 7, 1987. In the conditions to the permit Ritchie added “as of May 6, 1986, the reclamation bond requirements for the permit are $1,032,635.75” or the combined total of the National Fire bond and Banco’s letter of credit.

The new permit added sections not contained in the earlier permit, permitted mining operations, and added tasks to be performed by Sugarloaf, including backfill and grading of 1,335,335 cubic yards (almost triple the requirement of the first permit); reclamation of 1.25 acres for each acre of land disturbed; bulldozer work, and the fencing of a high wall.

Sugarloaf began mining operations sometime in 1986 but ceased operation altogether in May of 1987. Ritchie testified that Sugarloaf mined for about one month, producing about 44,000 tons of coal and did only a little reclamation work on the project while opening up new areas which had to be reclaimed. Ritchie also testified that reclamation costs at all times after January 1986 exceeded the combined $1.03 million value of the bond and the letter of credit, and he concluded that the ultimate cost of reclamation would be in excess of $2 million.

A notice of bond forfeiture was issued by PC&E on March 14, 1990. The specific violations in the notice were all of requirements spelled out in the renewal permit which was executed August 1, 1987. Banco requested an adjudicatory hearing which was held October 5, 1990, before a hearing officer who issued a decision recommending approval of the forfeiture. Banco appealed the recommendation to the Commission, and by Minute Order of January 25, 1991, the recommendation was adopted. Banco appealed to the Circuit Court, and the order was affirmed.

Banco appeals arguing the Court erred as there is no evidence to support the decision. They also assert that the decision is arbitrary, capricious, and characterized by an abuse of discretion because, (1) the obligation the letter of credit was given to secure was materially altered to their detriment, (2) the letter of credit is not subject to forfeiture because the conditions precedent have not been satisfied, and (3) PC&E failed to disclose material facts concerning Banco’s potential liability and is therefore estopped from forfeiting the letter of credit.

1. Standard of review

Review of administrative decisions, both in the Circuit Court and here, is limited in scope. Such decisions will be upheld if they are supported by substantial evidence and are not arbitrary, capricious, or characterized by an abuse of discretion. Arkansas Alcoholic Beverage Control Board v. King, 275 Ark. 308, 629 S.W.2d 288 (1982); Arkansas Real Estate Commission v. Harrison, 266 Ark. 339, 585 S.W.2d 34 (1979). Administrative action may be regarded as arbitrary and capricious only when it is not supportable on any rational basis. Partlow v. Arkansas State Police Commissioner, 271 Ark. 351, 609 S.W.2d 23 (1980). It has been said that the appellate court’s review is directed, not toward the circuit court, but toward the decision of the agency. That is so because administrative agencies are better equipped by specialization, insight through experience, and more flexible procedures than courts, to determine and analyze legal issues affecting their agencies. First National Bank v. Arkansas State Bank Commissioner, 301 Ark. 1, 781 S.W.2d 744 (1989). Finally, the interpretation of statutes by an administrative agency, while not conclusive, is highly persuasive. Arkansas Contractor’s Licensing Board v. Butler Construction Co., 295 Ark. 223, 7 S.W.2d 129 (1988).

The standard has its origin in the Administrative Procedure Act and our case law which requires that appellate review under the act be “narrowly prescribed,” Arkansas Poultry Commission v. House, 276 Ark. 326, 634 S.W.2d 388 (1982), with “a role of limited scope” City of Newport v. Emery, et al, 262 Ark. 591, 559 S.W.2d 707 (1977). This narrow scope does not, however, permit this Court to allow an agency to disregard the law because the A.P.A. provides:

25-15-212. Administrative adjudication - Judicial review.
* * *
(g) The review shall be conducted by the court without a jury and shall be confined to the record, except that in cases of alleged irregularities in procedure before the agency, not shown in the record, testimony may be taken before the court. The court shall, upon request, hear oral argument and receive written briefs.
(h) The court may affirm the decision of the agency or remand the case for further proceedings. It may reverse or modify the decision if the substantial rights of the petitioner have been prejudiced because the administrative findings, inferences, conclusions, or decisions are:
(1) In violation of constitutional or statutory provisions;
(2) In excess of the agency’s statutory authority;
(3) Made upon unlawful procedure;
(4) Affected by other error or law;
(5) Not supported by substantial evidence of record; or
(6) Arbitrary, capricious, or characterized by abuse of discretion.
[emphasis added]

In Woodyard v. Ark. Diversified Ins., 268 Ark. 94, 594 S.W.2d 13 (1980), we explained the standard with respect to legal issues as follows:

The requirement that administrative action not be arbitrary or capricious is less demanding than the requirement that it be supported by substantial evidence. To be invalid, under the former standard, the action must lack rational basis, First Nat. Bank of Fayetteville v. Smith, 508 F.2d 1371 (8th Cir. 1974) cert. den. 421 U.S. 930, or hinge on a finding of fact based on an erroneous view of the law. Williams v. Celebrezze, 243 F. Supp. 103 (W.D. Ark. 1965). Action is not arbitrary simply because the reviewing court would act differently. Harding Glass Co. v. Ark. Public Service Comm., 229 Ark. 153, 313 S.W.2d 812 (1958).

In this case we are confronted with an erroneous view of law which affects the decision of the agency. The hearing officer found the renewal permit constituted a material alteration of the original permit. We agree that the changes constituted a material alteration of the contract obligation between Sugarloaf and the PC&E. The officer also concluded that the conditions of the renewal permit were accepted by Sugarloaf on June 9, 1986, because the application for renewal was signed by Sugarloaf s attorney on that date. It was the same day that the letter of credit was issued by Banco. From this, the hearing officer concluded that Banco also accepted the conditions of the renewal permit. This conclusion is factually defective because the testimony establishes that the renewal permit, containing the new conditions, was not executed until more than a year later. This finding also reveals that the hearing officer was treating the letter of credit as a surety bond which incorporated the conditions of the underlying contract, the renewal permit, by acquiescence. This is contrary to both the law of letters of credit and the provisions of the Uniform Commercial Code which govern these documents.

2. The law of letters of credit

The letter of credit and the surety contract are both commercial devices, and they share a common purpose. Both insure against the obligor’s nonperformance. They function, however, in distinctly different ways. The letter of credit is somewhat akin to a performance bond in that:

In place of a performance bond from a true surety, . . . (customer) gets his bank (issuer) to write . . . (beneficiary) a standby letter of credit. In this letter, issuer engages to pay beneficiary-owner against presentment of two documents: 1) a written demand (typically a sight draft) which calls for payment of the letter’s stipulated amount, plus 2) a written statement certifying that customer-builder has failed to perform the agreed construction work.

Another difference between the standby letter of credit and the surety contract is that the standby credit beneficiary has different expectations.

In the surety contract situation, there is no duty to indemnify the beneficiary until the beneficiary establishes the fact of the obligor’s nonperformance. The beneficiary may have to establish that fact in litigation. During the litigation, the surety holds the money and the beneficiary bears most of the cost of delay in performance.
In the standby credit case, however, the beneficiary avoids that litigation burden and receives his money promptly upon presentation of the required documents. It may be that the account party has in'fact performed and that the beneficiary’s presentation of those documents is not rightful. In that case, the account party may sue the beneficiary in tort, in contract, or in breach of warranty; but during the litigation to determine whether the account party has in fact breached his obligation to perform, the beneficiary, not the account party, holds the money.

J. Dolan, The Law of Letters of Credit, ¶ 1.05 [1] at 1-18,1-19 (2d ed. 1991). See also, Rose Developments, Inc. v. Pearson Properties, 38 Ark. App. 215, 832 S.W.2d 286 (1992).

Because the obligations and expectations of the issuer and the beneficiary differ from the traditional surety situation it follows that once an irrevocable letter of credit is established, the credit engagement may not be altered in any way without the consent of the parties. Dolan, supra, ¶ 5.02[1] at 5-12. LeaseAmerica Corp. v. Norwest Bank Duluth, N.A., 940 F.2d 345 (8th Cir. 1991).

Banco’s letter of credit stated on its face that it was issued pursuant to The Uniform Customs and Practice for Documentary Credits (UCP), a body of rules established more than 60 years ago and adopted by credit issuers throughout the world in 1963. Article 10(d) of the UCP (1983 version) provides:

Such undertakings can be neither amended nor can-celled without the agreement of the issuing bank, the confirming bank (if any) and the beneficiary. Partial acceptance of amendments contained in one and the same advice of amendments is not effective without the agreement of all the above-named parties.

Clearly the agreement between the account party (Sugarloaf) and the beneficiary (PC&E) cannot alter the terms of the credit, which specified coverage of the original permit, without the consent of the issuer. Equally clearly, Banco may not be held to have consented, by its agreement to the terms of an existing permit, to changes which had not occurred and would not occur until execution of a different permit on a later date.

3. The Uniform Commercial Code

Letters of credit are also governed by the Uniform Commercial Code - Letters of Credit, Ark. Code Ann. §§ 4-5-101 through 117 (Repl. 1991). Section 4-5-114(1) provides that an issuer must honor a draft which complies with the terms of the relevant credit regardless of whether the goods or documents conform to the underlying contract between the customer and the beneficiary. However, the issuer does not have an absolute duty to honor a draft authorized by the letter of credit. An exception is provided by 4-5-114(2) which provides that an issuer need not honor the draft if “a required document does not in fact conform to the warranties made on negotiation or transfer of a document of title (4-8-306) or of a certificated security (4-8-306) or is forged or fraudulent or there is fraud in the transaction.” Section 4-5-106(2) specifies two of the parties, the account party and the beneficiary, must consent to any modification, and § 4-5-104 requires not just that the credit be a signed writing but that the confirmation and amendments be signed by the issuer as well.

In the absence of Banco’s signature approving the renewal permit and authorizing coverage of the obligations it established, no forfeiture may occur based on Sugarloaf s failure to meet those obligations.

4. Conclusion

Only PC &E offered testimony in the case presented to the hearing officer, and all of it concerned violations of the renewal permit. Banco’s letter of credit does not apply to the renewal permit, and the order of forfeiture must be reversed. However, that testimony also established that the cost of reclamation from January 1986 exceeded the bonding provided by National Fire which suggests that some portion if not all the sum guaranteed by the letter of credit may be required to reclaim the area specified in the original permit. We remand this case to the Circuit Court for further remand to the Commission to permit the parties to present evidence concerning the cost of reclamation under the original permit.

Reversed and remanded.

Hays and Brown, JJ., dissent.

Robert L. Brown, Justice,

dissenting. Sugarloaf agreed to the new conditions for Permit No. 272-M-CO on June 9, 1986, by the signature of its attorney, Sam Sexton, Jr. A vice president of Sugarloaf then signed the same document six months later. Also on June 9, 1986, BPA established its irrevocable letter of credit covering Permit No. 272-M-CO, effective that same date. The hearing officer found:

It is reasonable to conclude that the Renewal Permit and BPA’s letter of credit were basically simultaneous acts. The only reason it was necessary to obtain BPA’s letter of credit was because the Renewal Permit required it. It is unreasonable to believe that BPA was not aware of the Renewal Permit.

The Pollution Control & Ecology Commission adopted the recommendation of the hearing officer to forfeit the bond. The circuit court found that the Commission’s decision was supported by substantial evidence. The finding of the hearing officer, albeit based on circumstantial evidence, makes good common sense to me. I would affirm.

DECEMBER 14, 1992

Harper, Young, Smith and Maurras, by: S. Walton Maurras, for appellant.

Steve Weaver, William Eckert, III, and Chisenhall, Nestrud & Julian, P.A., by: Ann P. Faitz, for appellee.

Hays, J., joins.

SUPPLEMENTAL OPINION ON DENIAL OF REHEARING

David Newbern, Justice.

In part 1. of our opinion in this case, entitled Standard of review, we erred in our discussion by failing to cite Ark. Code Ann. § 15-58-212(i) (1987) which sets out the standard to be used by a circuit court reviewing a decision reached in an administrative proceeding before the Arkansas Pollution Control and Ecology Commission. We adhere, however, to our statement that the limited review of administrative agency decisions, generally, has its origins in the Administrative Procedure Act.

The reader should know that, although we found a factual error, as described in our original opinion, the main burden of the opinion is to point out that the hearing officer’s decision misperceived the law of letters of credit by finding that an account party and a beneficiary may bind the issuer of a letter of credit where there is no evidence that the issuer assumed any additional obligation.

Rehearing denied.

Hays and Brown, JJ., would grant PC&E’s motion for rehearing.


author: Donald L. Corbin, Justice.

text:
    Jeannette E. SMITH, James E. and Paula Parker, and James Larry Smith v. John Paul LEONARD and Shirley Leonard and Leonard’s Hardware, Inc., an Arkansas Corporation
    92-524
    840 S.W.2d 167
    Supreme Court of Arkansas
    Opinion delivered November 2, 1992

      Wright, Lindsey & Jennings, for appellant Jeannette E. Smith.

      Mobley, Smith, and Mobley, by: William F. Smith, for appellants.

      Edgar, Perigo & Hillabeck, Inc., by: Steven E. Edgar, for appellants.

      Davidson, Horne, & Hollingsworth, by: Derrick M. Davidson, Robert E. Irwin and Laws & Murdoch, P.A., by: Ike A.

      Laws, for appellees.
   Donald L. Corbin, Justice.

This case has a complex and complicated procedural history. This case originally began as an action by Jeannette Smith, a shareholder of Leonard’s Hardware, Inc. and partner in Leonard-Parker-Smith against the corporation, the partnership and one of the other shareholders and partners, John Paul Leonard. The case quickly became more complicated with several interventions, cross-claims, counterclaims, and third party claims being filed. This case was appealed to us pursuant to Ark. Sup. Ct. R. 29(1 )(c) because it involves the interpretation and construction of certain provisions of the Arkansas Business Corporation Act of 1965, Ark. Code Ann. § 4-26-101 et seq. (1987). However, we do not address the substantive issues on appeal because we find the final decree does not address all the parties and all the claims and is therefore not a final and appealable judgment. ARCP Rule 54(b); Quality Ford, Inc. v. Faust, 307 Ark. 371, 820 S.W.2d 61 (1991). Therefore, we dismiss this appeal pursuant to ARCP Rule 54(b). We will set out the procedural history of this case only in as much detail as is necessary to explain our decision.

On August 23, 1990, Jeannette Smith filed suit against Leonard’s Hardware, Inc., an Arkansas Corporation, Leonard-Parker-Smith, an Arkansas general partnership and John Paul Leonard, individually, alleging fraudulent and intentional misconduct on the part of John Paul Leonard, oppressive conduct by Mr. Leonard, breach of fiduciary duty by Mr. Leonard, fraud by Mr. Leonard, and violation of the Arkansas Securities Act as codified at Ark. Code Ann § 23-42-106 (1987). Ms. Smith asked for rescission of certain stock transactions, an accounting and independent audit of the financial records of the corporation, appointment of a receiver for the corporation and a partnership, injunctive relief, and money damages. The complaint was properly served on each of the three defendants and each of the three defendants filed answers to the complaint within the permitted time period.

On September 7, 1990, Shirley Leonard filed a motion to intervene as a creditor and as joint owner of John Paul Leonard’s stock and to file a cross-complaint. Shirley Leonard also filed a cross-complaint against Jeannette Smith on September 7, 1990, for filing a false and slanderous lawsuit against John Paul Leonard and Leonard’s Hardware that will be detrimental to the business of Leonard’s Hardware and Shirley Leonard. Shirley Leonard’s motion to intervene was granted on September 7, 1990, and the order allowing intervention was filed on September 12, 1990.

On October 1, 1990, Jim and Paula Parker filed a motion to intervene. The October 1 motion to intervene was apparently not acted upon by the court as no order is contained in the record granting or denying the motion to intervene of Jim and Paula Parker. On January 23, 1991, Paula Parker filed a motion to intervene and to file a third party complaint. The order granting Paula Parker’s motion to intervene and file a third party action was filed on January 22, 1991.

John Paul Leonard filed a counterclaim against Jeannette Smith on January 18, 1991, adopting all the allegations of the cross-complaint filed by Shirley Leonard regarding filing of a wrongful action.

February 28, 1991, Leonard’s Hardware, Inc. filed a third party complaint against James Larry Smith for conversion, and fraud.

Jeannette Smith’s First Amended and Substituted Complaint was filed on March 8, 1991. The First Amended and Substituted Complaint added Shirley Leonard, James Larry Smith, James E. Parker, and Paula Parker as defendants along with Leonard’s Hardware, Inc., Leonard-Parker-Smith, and John Paul Leonard. Answers were filed on behalf of all the parties except Leonard-Parker-Smith.

March 26, 1991, John Paul Leonard filed a Motion to Join Mrs. W.O. Tibbels as a cross defendant to his cross-claim. On the same day, John Paul Leonard also filed a counterclaim against Jeannette Smith and cross-claim against James Larry Smith, Leonard’s Hardware, Inc., James Parker, Paula Parker, Leonard-Parker-Smith Partnership, and Mrs. W.O. Tibbels for a declaratory judgment that the partnership has been dissolved and requesting the court appoint a receiver to wind up the affairs of the partnership. It does not appear from the record the counterclaim against Jeannette Smith or the cross-claim against James Larry Smith, Leonard’s Hardware, Inc., James Parker, Paula Parker, Leonard-Parker-Smith Partnership, and Mrs. W.O. Tibbels was never resolved, although the motion to join Mrs. Tibbels was withdrawn. The following exchange occurred between Mrs. Tibbels’ attorney, Mr. Leonard’s attorney and the chancellor on the day of the trial:

THE COURT:
Mr. Streett, are you involved?
MR. STREETT:
I don’t think so, Judge. I represent Mrs. Tibbels, and I think the Court’s ruled in Chambers — I’d like it on the record that the motion to enjoin her as a party has either been withdrawn or denied.
THE COURT:
My understand, it was mute. There was no — I may be in error, but I thought I was advised in Chambers that they had settled and dissolved the property which she was a partner.
MR. DERRICK DAVIDSON (Counsel for John Paul Leonard):
The parties have settled the matters in regards to the claims against Mrs. Tibbels, and the motion is withdrawn.

On March 26, 1991, a motion for summary judgment was filed by John Paul Leonard on all claims of the plaintiff against John Paul Leonard.

April 10, 1991, James Larry Smith filed a third-party counterclaim against Leonard’s Hardware, Inc.

May 13, 1991, Paula Parker filed a counterclaim against Leonard’s Hardware, Inc. and John Paul Leonard for breach of fiduciary duty to the minority stockholders and asking that the alleged conveyance from Larry Smith to the Corporation be set aside as it was invalid and unauthorized and was only a pledge which was never consummated or approved by the Board of Directors.

On May 30, 1991, an order was filed granting John Paul Leonard’s Motion for Summary Judgment on Mrs. Smith’s claim of ownership to Mr. Smith’s stock, promissory note and interest in the property located at 1319 South Arkansas Avenue and denying summary judgment on all remaining issues pending before the court.

The case was tried on August 26, 1991. At the beginning of the trial, the motion to join Mrs. Tibbels as a party was withdrawn and the cross complaint of Shirley Leonard was transferred to circuit court. There is no indication in the record of the treatment of the counterclaim by John Paul Leonard encompassing the same claims as Shirley Leonard’s cross-complaint.

After the trial, the case was taken under advisement, a letter setting forth the chancellor’s findings of fact and conclusions of law was issued October 2, 1991, and the chancellor’s decree was entered on October 9, 1991. The decree stated:

1. That all claims of Jeannette Smith and Paula Parker against John Paul Leonard and Leonard’s Hardware, Inc. should be and are hereby dismissed with prejudice.
2. That the third party complaint of James Larry Smith against Leonard’s Hardware, Inc. should be and is hereby dismissed with prejudice.
3. That it is not necessary for the court to decide the cross complaint of Leonard’s Hardware, Inc. against James Larry Smith.
4. That all parties shall pay their own costs and attorney fees.

On motion by Jeannette Smith and by order of the court filed November 7, 1991, the decree was amended to incorporate by reference into the decree the findings of fact and conclusions of law set forth in the chancellor’s letter of October 2, 1991. The chancellor’s findings of fact and conclusions of law were:

FINDINGS OF FACT
1. James Smith misappropriated funds from Leonard’s Hardware in an amount not less than $125,000.00.
2. The Board of Directors of Leonard’s Hardware agreed to accept the pledge of James Smith’s interest in the corporation as security for repaying the money he misappropriated.
3. The pledge approved by the Board of Directors conferred authority on the president of the corporation, John Paul Leonard, to settle James Smith’s debt to the corporation.
4. The pledge contemplated the transfer of all or a portion of James Smith’s interest in the corporation in satisfaction of his debt.
5. On March 13, 1989, James Smith sent a letter to John Leonard stating that “after review of all the documents and the checks .... I realize that the debt is far greater than I had anticipated. . . (and) that at this time, I wish to sign and deliver all of my stock in Leonard’s Hardware to the store.”
6. John Leonard and James Smith met in May of 1989 at Leonard’s Hardware and agreed that the amount misappropriated by James Smith exceeded the value of the property pledged plus the value of real property already transferred to the corporation in partial satisfaction of the debt.
7. At the May, 1989 meeting, John Leonard accepted the property pledged in satisfaction of James Smith’s debt.
8. The amount misappropriated by James Smith exceeded the value of the property that was transferred to Leonard’s Hardware in satisfaction of his debt.
9. At the time the pledged property was accepted by John Leonard, the corporation had unrestricted earned surplus.
10. John Leonard acted on behalf of the corporation and in its best interest by recovering funds misappropriated by James Smith, even though he may have personally benefitted by the change in ownership.
11. In recovering the misappropriated funds, John Leonard did not conceal the method of recovery. John Leonard did not deceive the shareholders about the purpose for recovering the misappropriated funds.
12. At the time James Smith’s stock was pledged to the corporation, Paula Parker and Jeannette Smith did not rely on John Leonard for information about the corporation.
13. The tender into court made by James Larry Smith was made after all parties had rested and the case was closed. Therefore the court did not consider the tender in reaching its decision.
CONCLUSIONS OF LAW
1. Neither John Leonard nor Leonard’s Hardware committed fraud or constructive fraud.
2. John Leonard did not breach his fiduciary duty by recovering the misappropriated funds from James Smith.
3. Mr. Leonard’s conduct does not constitute oppression sufficient to warrant dissolution of the corporation.
4. The transfer of James Smith’s stock into the corporation’s treasury was a valid corporate act.
5. Judgment should be entered in favor of John Paul Leonard and Leonard’s Hardware, Inc. on the claims brought by Jeannette Smith and Paula Parker for fraud, constructive fraud, breach of fiduciary duty, unauthorized corporate acts and oppression, and all remedies requested in connection with those claims are denied.
6. That Leonard’s Hardware, Inc. have judgment on the third party counterclaim brought by James Smith for an accounting and an offset and all remedies requested in connection with these counterclaims are hereby denied.
7. That since James Smith’s debt to Leonard’s Hardware, Inc. was settled by the acceptance of the property he pledged, it is unnecessary for the court to consider the third party complaint of Leonard’s Hardware in determining this matter.
8. That each party shall pay their own costs and attorney fees.
9. The clerk of the court shall return to James Larry Smith the amount of money tendered into court after the trial of this cause.

This appeal followed. James E. Parker and Paula Parker filed a notice of appeal on October 29, 1991, in the Court of Appeals. Jeannette Smith filed a notice of appeal on November 6, 1991, in the Supreme Court. Larry Smith filed a notice of appeal on November 7, 1991, in the Court of Appeals. November 12, 1991, James E. Parker and Paula Parker filed a notice of appeal in the Supreme Court. Jeannette Smith filed the notice of appeal which this opinion concerns in the Supreme Court to the court’s amended decree on November 13, 1991. December 6, 1991, James Larry Smith filed a notice of appeal with the Supreme Court.

Even incorporating the findings of fact and conclusions of law, there are several parties and several claims which are not addressed by the decree. ARCP Rule 54(b) provides:

When more than one claim for relief is presented in an action, whether as a claim, counterclaim, cross-claim or third party claim, or when multiple parties are involved, the court may direct the entry of a final judgment as to one or more but fewer than all of the claims or parties only upon an express determination that there is no just reason for delay and upon an express direction for the entry of judgment. In the absence of such determination and direction, any order or other form of decision, however designated, which adjudicates fewer than all the claims or the rights and liabilities of fewer than all the parties shall not terminate the action as to any of the claims or parties, and the order or other form of decision is subject to revision at any time before the entry of judgment adjudicating all the claims and the rights and liabilities of all the parties.

The failure to comply with ARCP Rule 54(b) is a jurisdictional issue which we are obligated to raise on our own. Quality Ford, Inc. v. Faust, 307 Ark. 371, 820 S.W.2d 61 (1991). As we have said many times, “for an order to be final and appealable it must dismiss the parties from the court, discharge them from the action, or conclude their rights to the subject matter in controversy.” Id. at 372, 820 S.W.2d at 62 (and cases cited therein). It is not enough to dismiss some of the parties, the order must cover all the parties and all the claims in order to be an appealable order. Parks v. Hillhaven Nursing Home, 309 Ark. 373, 829 S.W.2d 419 (1992).

The decree appealed from does not finally dispose of the following claims nor is there any indication in the record that they were otherwise disposed of by the court:

1. The claim of Jeannette Smith against Shirley Leonard, Leonard-Parker-Smith, James Larry Smith, James E. Parker, and Paula A. Parker.
2. The cross-complaint of Shirley Leonard against Jeannette Smith, nor is there an order transferring this claim to circuit court as the parties apparently intended to do or otherwise disposing of this claim.
3. The counterclaim of John Paul Leonard filed January 18, 1991, against Jeannette Smith.
4. The counterclaim of John Paul Leonard filed March 26, 1991, against Jeannette Smith.
5. The cross-claim of John Paul Leonard against James Larry Smith, Leonard’s Hardware, Inc., James Parker, Paula Parker, and Leonard-Parker-Smith Partnership.
6. The decree states that “it is not necessary for the court to decide the cross complaint of Leonard’s Hardware, Inc. against James Larry Smith”, but it does not actually dispose of this claim by dismissing it or otherwise.

We dismiss the appeal without prejudice for failure to comply with ARCP Rule 54(b).

Hays, J., not participating.


author: Robert L. Brown, Justice.

text:
    Jackie LOVELL And Keith Lovell, Individually and as Parents and Natural Guardians of Taylor Keith Lovell, a Minor v. ST. PAUL FIRE & MARINE INSURANCE CO., Liability Insurance Carrier of Baptist Memorial Hospital
    92-306
    839 S.W.2d 222
    Supreme Court of Arkansas
    Opinion delivered November 2, 1992

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

      Laser, Sharp, Mayes, Wilson, Bufford & Watts, P.A., by Richard N. Watts and Alfred F. Angalo, Jr., for appellee.
   Robert L. Brown, Justice.

The appellants, Jackie Lovell and Keith Lovell, appeal individually and as the parents of their minor child, Taylor Keith Lovell, and contend that the circuit court erred in granting summary judgment to the appellee, St. Paul Fire & Marine Insurance Company. We affirm the judgment.

On August 31, 1990, appellant Jackie Lovell, who was seven months pregnant, went to Baptist Memorial Hospital in North Little Rock to pick up her friend, Terry Peeples, who was an employee of Baptist Hospital, for lunch. Jackie Lovell parked her car, leaving her two-year-old daughter inside, and entered the hospital to get Peeples. At about the same time, Bill and Dessie Herring, husband and wife, arrived at the hospital. Mr. Herring was driving. The Herrings had come to pick up some x-rays for Mrs. Herring, age 74, who had been experiencing dizziness and having problems with her balance. She had been referred to Baptist Hospital for tests. Mr. Herring parked the car in a loading zone in front of the main entrance to the hospital, left his wife in the car, and went inside to pick up the x-rays.

After waiting in the car for about ten minutes, Mrs. Herring got out. She walked over near the door to the hospital and stood leaning against the wall for another fifteen to twenty minutes. The Herring’s car was blocking a principal entry to and exit from the hospital. Because of this, a Baptist Hospital employee, Tressie Pruss, asked Mrs. Herring to move her car. Pruss later testified that Mrs. Herring appeared upset by the request, and Pruss told her not to worry about the car. Mrs. Herring testified at deposition that a loud-mouthed fellow told her to move her car.

A few minutes after the request and after the nurse had gone back inside, Mrs. Herring decided to move the car. No Baptist Hospital employees apparently were present at this time. At the same moment, Jackie Lovell and Terry Peeples came out of the hospital and headed towards Jackie Lovell’s car. Mrs. Herring started her car and backed over Peeples. She then hit Lovell’s car which caused the car’s brake to disengage, and the car began to roll. Jackie Lovell testified that she started to chase her car because her daughter was inside. Mrs. Herring’s car then ran over Lovell, pinning her beneath the car. Betty Jackson, an onlooker, ran up to Mrs. Herring’s car and told her that Lovell was trapped beneath it. When Mrs. Herring did not respond, Jackson reached inside the car and set the parking brake.

Jackie Lovell was badly injured and her baby had to be delivered prematurely by C-section. While she was recuperating, Betty Jackson called to see how she was doing. Jackson said that during one conversation with both Jackie and Keith Lovell, they told her they were suing the hospital and that the hospital did not want to be liable. The Lovells told her that if she could remember having heard a hospital employee tell Mrs. Herring to move her car, it would help them in their lawsuit.

The Lovells filed suit against Mrs. Herring and St. Paul Fire & Marine Insurance Company as liability carrier for Baptist Hospital. The suit against Mrs. Herring was settled. In the suit against St. Paul, the discovery depositions of Betty Jackson, Terry Peeples, and several Baptist Hospital employees were taken. St. Paul then moved for summary judgment which the circuit court granted, finding as a matter of law that Baptist Hospital had not breached any recognized duty owed to Jackie Lovell and that the hospital should not have to insure that all persons on the premises were competent drivers. The court added that the imposition of such a duty was a legislative function rather than a judicial one.

On appeal, the Lovells urge that the circuit court erred in granting summary judgment in favor of the insurance company. We have often stated that summary judgment is an extreme remedy which should be allowed only when there is no issue of fact to be litigated. See, e.g., Cullpepper v. Smith, 302 Ark. 558, 792 S.W.2d 293 (1990); Saunders v. National Old Line Ins. Co., 266 Ark. 247, 583 S.W.2d 58 (1979). We need only decide if the granting of summary judgment was appropriate based on whether the evidentiary items presented by the moving party in support of the motion left a material question of fact unanswered. Nixon v.H & C Elec. Co., 307 Ark. 154, 818 S.W.2d 251 (1991). The burden of sustaining a motion for summary judgment is always the responsibility of the moving party. Cordes v. Outdoor Living Center, Inc., 301 Ark. 26, 781 S.W.2d 31 (1989). All proof submitted must be viewed in a light most favorable to the party resisting the motion, and any doubts and inferences must be resolved against the moving party. Harvison v. Charles E. Davis & Assoc., 310 Ark. 104, 835 S.W.2d 284 (1992); Reagan v. City of Piggott, 305 Ark. 77, 805 S.W.2d 636 (1991).

The circuit court decided the matter due to the absence of any legal duty. The question of what duty, if any, is owed by one person to another is always a question of law and never one for the jury. Catlett v. Stewart, 304 Ark. 637, 804 S.W.2d 699 (1992); Keck v. American Employment Agency, Inc., 279 Ark. 294, 652 S.W.2d 2 (1983). The circuit court erred, however, according to the Lovells, in not finding that Baptist Hospital had a duty either to ascertain Mrs. Herring’s competency or to warn other drivers and pedestrians on the hospital’s premises that a danger existed. We agree with the circuit court that no such duty existed in this case.

Viewing the proof in the light most favorable to the Lovells, as we are required to do, we turn to the deposition testimony of Betty Jackson, who watched Mrs. Herring for thirty to thirty-five minutes between the time her car arrived in front of the hospital and the ensuing accident. She testified at deposition that it was obvious to her that Mrs. Herring was not fit to drive. Mrs. Herring appeared very unsteady on her feet, and her thick glasses made her appear almost blind. Jackson added that her nine-year-old son asked her if Mrs. Herring was blind. Initially, Mrs. Herring’s condition did not move Jackson to help her, and she testified that after Mrs. Herring got out of the car and stood up, she looked “okay.” Jackson then heard Baptist Hospital employees ask whom the car belonged to. Mrs. Herring answered, “It’s mine.” She also heard employees make comments that the car needed to be moved. Specifically, she heard a nurse tell Mrs. Herring that she needed to move her car. Two or three minutes later, Jackson says Mrs. Herring walked over to her car and got in. Jackson testified that she realized Mrs. Herring needed help and she began running to assist, but she was too late. No hospital employee was present at the entrance when Mrs. Herring moved her car, although a nurse observed the accident from the top floor.

Under these circumstances, we can extract no duty on the part of Baptist Hospital to determine the capacity of Mrs. Herring to drive competently. Though Mrs. Herring appeared unsteady on her feet to Betty Jackson and her son, who watched her for an extended period of time, there is no testimony or proof of any kind to suggest that Baptist Hospital employees were aware that she suffered from any physical or mental infirmity. Nor is there any proof that the hospital employees were alerted in any way to the fact that Mrs. Herring possibly was unable to move her car. Mrs. Herring gave no verbal indication that she could not drive. Without such proof and a resulting awareness on the part of the hospital employees, there was no reason for those employees to assess her condition further and certainly no reason to warn other pedestrian or vehicular traffic on the hospital premises of an impending danger.

Absent the hospital’s awareness of her condition or its assumption of control, we will not impress any legal duty on the hospital to act to protect others on the grounds. Mrs. Herring did not have a special relationship with Baptist Hospital such as master-servant. Nor did the hospital exercise the type of control over her to give rise to a legal duty to act with care. This comports with blackletter law. The owner of a premises is not liable for injuries caused by acts of third persons which were unauthorized or which it had no reason to anticipate and about which it had no knowledge. See Magnolia Petroleum Co. v. Melville, 202 Ark. 382, 150 S.W.2d 220 (1941); Leonard v. Standard Lumber Co., 196 Ark. 800, 120 S.W.2d 5 (1938).

The appellants direct our attention to three cases to support their theory of the case. See Karbel v. Francis, 709 P.2d 190 (N.Mex. App. 1985); Pamela L. v. Farmer, 169 Cal. Rptr. 282 (1980); Haralson v. Jones Truck Lines, 223 Ark. 813, 270 S.W.2d 892 (1954). None of these cases sufficiently mirrors the facts of this case. In Karbel, security guards at a Polytechnical Institute directed an intoxicated driver to leave the campus, and that driver then injured a person off-campus. The issue was whether the security firm owed any duty to the person injured, and the New Mexico Court of Appeals held that it did due to the actual control asserted by the security guards over the intoxicated driver. In doing so, the appellate court reversed a summary judgment in favor of the security firm and stated:

The common law also provides the source of a duty in such a situation based on actual control. The duty of one who takes charge of a third person whom he knows or should know to be likely to cause harm to others, if not controlled, is the duty to exercise reasonable care to prevent the person from doing harm.

709 P.2d at 193. The Karbel situation is distinguishable from the present case. There, the guards assumed actual control over a person obviously intoxicated who was likely to harm others. Here, there was no knowledge of impairment. Moreover, there was an insufficient assumption of control by the hospital employees. Direction to move her car by a nurse or “loud mouthed fellow” is not in the same category as security guards directing a drunk driver to leave a school campus. Whoever told Mrs. Herring to move the car then left the site, and Mrs. Herring decided to act on her own some minutes later.

The second case is Pamela L. v. Farmer. There, three girls who were sexually molested by the defendant sued him and his wife. The wife demurred on the basis that she owed no duty to the girls, and the trial court sustained the demurrer. The California Court of Appeal reversed, citing the fact that the wife had made matters worse by inviting the girls to their house to swim, telling their parents that the girls would be safe, and then leaving the premises, knowing all the time that her husband had molested children in the past. The court first referred to the general principle that a person ordinarily has no duty to control the conduct of a third party or to warn those endangered by such conduct in the absence of a special relationship with the third party or the victim. The court concluded, however, that the principle has no application where the defendant has made the victim’s position worse and has increased a foreseeable risk of harm by her actions. Again, these facts differ from what transpired in the present case. The hospital employees had no awareness of danger or reason to be aware that an enhanced risk of harm might result from their asking Mrs. Herring to move her car.

Finally, in Haralson v. Jones Truck Lines the driver of a truck signaled a second truck to pass him on a state highway which resulted in the death of a pedestrian who was walking on the left side of the highway. The trial court directed a verdict for the defendants, but this court reversed on the basis that a case for the jury had been made. We stated there that the real issue centered on whether the driver of the signaling truck owed any duty to the pedestrian. We concluded that he did since he chose to act, and having done so, he was under a duty to act carefully.

We are not convinced that requesting Mrs. Herring to move her car from a congested hospital entrance was the type of act that automatically created a duty on the part of the hospital. The same might not hold true under more dire circumstances where potential danger was clear and obvious to the acting party. In this case, though, there is nothing of record to suggest that the hospital employees knew that Mrs. Herring was in any way impaired in her driving prowess or that they should have known she was impaired. Only Betty Jackson, who observed Mrs. Herring for thirty to thirty-five minutes, had formed an opinion about her infirmity.

To hold that a duty exists under these circumstances would mean that the owner of a premises with a parking area must evaluate the condition of every driver who is requested to vacate that parking area. This would be required, according to the appellants’ theory, even when the driver gives no indication, verbally or otherwise, that he or she is unable to drive effectively. We are unwilling to go that far when, as here, there was no apparent manifestation of potential danger.

We hold that no legal duty attached under these circumstances and that the circuit court did not abuse its discretion in granting summary judgment in favor of the appellee.

Affirmed.

Glaze, J., not participating.