author: W.H. “Dub” Arnold, Chief Justice. Tom Glaze, Justice, Donald L. Corbin, Justice, Ray Thornton, Justice,

text:
    CRITTENDEN HOSPITAL ASSOCIATION v. The BOARD OF EQUALIZATION of Crittenden County
    97-43
    958 S.W.2d 512
    Supreme Court of Arkansas
    Opinion delivered December 18, 1997

      Hanover, Walsh, Jalenak & Blair, by: James A. Johnson, for appellant.

      Hale, Fogleman & Rogers, by: Joe M. Rogers, for appellees.
   W.H. “Dub” Arnold, Chief Justice.

The property that is the subject of this appeal is a physicians’ office building and parking lot located adjacent to the Crittenden Memorial Hospital and leased from the county by appellant Crittenden Hospital Association. The primary issue presented is whether this property is exempt from ad valorem taxation as public property used exclusively for public purposes. Ark. Const, article. 16, § 5(b). The Association was assessed taxes for this property for the tax year 1993 and applied for an exemption. The County Equalization Board denied the exemption. The Association appealed to the county court, which reversed the board’s ruling and ordered the property to be removed from the tax rolls. The tax assessor appealed to the circuit court, which ruled that the Association had not met its burden of proving that the property was used exclusively for public purposes. The Association appeals, raising several arguments for our review. We have permitted the Arkansas Hospital Association to file a brief as amicus curiae in support of the Association’s position. Finding no merit to the Association’s claims, we affirm the circuit court’s judgment.

I. Burden of proof

We examine first the Association’s argument that the circuit court erred in requiring it to establish an entitlement to the tax exemption beyond a reasonable doubt. In making its argument, the Association asks us to reconsider our well-established case law on ad valorem tax exemptions:

It is settled that a taxpayer must establish an entitlement to an exemption beyond a reasonable doubt. City of Little Rock v. McIntosh, 319 Ark. 423, 892 S.W.2d 462 (1995). A strong presumption operates in favor of the taxing power. Id. Tax exemptions must always be strictly construed against the exemption. City of Fayetteville v. Phillips, 306 Ark. 87, 811 S.W.2d 308 (1991). In Hilger v. Harding College, 231 Ark. 686, 331 S.W.2d 851 (1960), we wrote:
Taxation is an act of sovereignty to be performed, so far as conveniently can be, with justice and equality to all, and exemptions, no matter how meritorious, are acts of grace, and must be strictly construed, and every reasonable intendment must be made that it was not the design to surrender the power of taxation or to exempt any property from its due proportion of the burden of taxation.
Id. at 693, 331 S.W.2d at 855 (quoting Brodie v. Fitzgerald, 57 Ark. 445, 22 S.W. 29 (1893)).

City of Fayetteville v. Phillips, 320 Ark. 540, 899 S.W.2d 57 (1995). We have plainly stated that “fw]e cannot accept any lesser standard for a tax exemption case arising under the Constitution.” City of Fayetteville v. Phillips, 306 Ark. 87, 811 S.W.2d 308 (1991). We decline to depart from our long line of cases embracing this standard of proof.

II. Exclusivity requirement

Article 16, section 5(b), of the Arkansas Constitution provides that:

The following property shall be exempt from taxation: public property used exclusively for public purposes, . . . and buildings and grounds and materials used exclusively for public charity.

It is undisputed that the budding and parking lot are public property; thus, the question is whether the property is used exclusively for public purposes. The circuit court concluded that the Association failed to prove beyond a reasonable doubt that the building and lot are used exclusively for public purposes. The Association challenges this conclusion, claiming that the facts presented to the circuit court demonstrated that the properties indeed serve a public and charitable purpose.

The Association initially points to the fact that the properties were constructed for a public purpose. In 1976, Crittenden County issued bonds for the purpose of financing extensions and improvements to its hospital. The following year, the bonds were refunded to finance the costs of these improvements, which included the construction of the physicians’ office building and parking lot in question. The 1977 bonds were issued under the authority of Act 175 of 1961, codified at Ark. Code Ann. § § 14-265-101 et seq. (1987). In the county’s official statement required to issue the bonds, it concluded that the improvements to the hospital and surrounding facilities were necessary in order to recruit new physicians to the area and thus to provide medical care to the public. The county entered into a long-term lease agreement whereby it leased the hospital and surrounding facilities to the Association, a not-for-profit corporation. The Association leases office space in the physicians’ office building to doctors engaged in private practice who also staff the hospital. It receives rental income from this property and uses it to fund the operation of the hospital. According to the Association, it has not raised the rental price since the building was erected.

The Association contends that, since the purpose of constructing the building and parking lot was to attract physicians to the county and thus provide better medical care to its citizens, this public purpose justified the issuance of a tax exemption. According to the Association, the legislature, in passing Act 175, pronounced the public policy to assist hospitals and related facilities with financing. However, the issue here turns not on the purpose behind the issuance of the bonds under Act 175 to construct these properties, but on whether the building and lot are exclusively used for public purposes and are thus entitled to a tax exemption under Article 16, § 5(b). We illustrated this point in Holiday Island Suburban Improvement District No. 1 v. Williams, 295 Ark. 442, 446, 749 S.W.2d 314 (1988), a case involving recreational facilities that were open only to members of an improvement district:

The District contends there is a distinction between a public use and a public purpose, proposing that the Article 16 exemption rests not upon usage by the public but upon a public purpose as that term is used in connection with tax exempt revenue bonds. The District submits that “retirement” is an industry and Holiday Island promotes employment and other economic benefits to northern Arkansas. No doubt that is true, and if the issue here were tax exemption for the income from improvement district bonds, the public purpose might well be satisfied. But this is not the issue and it is clear the phrase “public purpose” is not an exact term, susceptible of a static definition [City of Glendale v. White, 194 P.2d 435 (Ariz. 1948)], but has various shades depending on whether the context is eminent domain, revenue bonds, lending the credit of a political subdivision, or tax exemption under § 5(b) of Article 16. Thus, our decision here deals only with a public purpose within the context of Article 16 § 5(b).

The Association further contends that the building should be considered as part of the hospital because one could not function without the other. The collection of rent, the Association asserts, is merely incidental to the charitable purpose of the hospital. In support of its argument that its purpose is not to make a profit, the Association alludes to the fact that it has not raised the rental fees for the building. However, the applicable test for Article 16, § 5(b), purposes is not whether the rents collected from the building are used for a public purpose, but whether the building is used exclusively for a public purpose:

There is a material difference between the use of property exclusively for public purposes and renting it out and applying the proceeds arising therefrom to the public use. The property under our Constitution must be actually occupied or made use of for a public purpose and our court has recognized the difference between the actual use of the property and the use of the income.

Hilger v. Harding College, 231 Ark. 686, 694, 331 S.W.2d 851 (1960) (emphasis in the original); see also City of Fayetteville v. Phillips, 320 Ark. 540, 899 S.W.2d 57 (1995); Off-Street Parking Development District No. 1 v. City of Fayetteville, 284 Ark. 453, 683 S.W.2d 229 (1985).

The Association asks that we apply the rationale of our decision in Burgess v. Four States Memorial Hospital, 250 Ark. 485, 491, 465 S.W.2d 693 (1971), where we recognized that a benevolent and charitable organization’s property used as a hospital may be constitutionally exempt from taxation if it is open to the general public, if its services are not refused for inability to pay, and if all profits go toward maintaining the hospital and extending and enlarging its charitable purposes. However, in that case, we held that the chancellor did not err in finding that a portion of hospital property for which rents were collected was not being used directly and exclusively for a charitable purpose and thus was subject to taxation. Id. at 493. The tax exemption of the hospital, we said, was not affected by the revenue-generating hospital building, just as the budding was not made exempt by the tax-exempt hospital. Id. In so holding, we emphasized that the determining factor for tax-exemption purposes is the actual use to which the property is put. Id.

In the present case, the circuit court considered evidence that the Association rents the building exclusively to for-profit private health-care providers. While the Association presented testimony that the parking lot is used by hospital physicians, patients, staff, and visitors, there was also evidence that it is used by the physicians who rented the building and their patients. The circuit court obviously considered this evidence in reaching its conclusion that the Association failed to meet its burden of proving that the budding and lot are used exclusively for public purposes, as “[t]o doubt is to deny the exemption.” City of Little Rock v. McIntosh, 319 Ark. 423, 426, 892 S.W.2d 462 (1995); quoting Pledger v. Baldor Int’l, 309 Ark. 30, 33, 827 S.W.2d 646, 648 (1992). Moreover, an additional reason for the trial court’s decision to deny the exemption is the fact that the budding is in competition with other tax-paying medical facdities in the county. See City of Little Rock v. McIntosh, supra (city and its airport commission not entided to ad valorem exemption where city leased airport property in question to private car rental agencies who were in competition with other tax-paying car rental companies); City of Fayetteville v. Phillips, supra (art center not entided to ad valorem exemption where facdity offered priority seating whereby the general public was excluded to an unknown extent from events and the center was in competition with simdar tax-paying art facdities).

The Association further contends that the budding is being used exclusively for the public purpose of insuring that the hospital wdl continue to survive. Requiring the payment of taxes on the budding, the Association suggests, would threaten the existence of the hospital. After reviewing the record, we cannot say that the Association proved beyond a reasonable doubt that the hospital would not survive without a tax-free physicians’ office budding.

We wid set aside the circuit court’s findings of fact only if they are clearly erroneous. City of Little Rock v. McIntosh, supra. When reviewing ad the facts in this case, we cannot say the circuit court’s finding that the Association faded to prove beyond a reasonable doubt that the budding and lot are used exclusively for public purposes was clearly erroneous.

III. Estoppel

The Association further contends that the tax assessor should be estopped from assessing ad valorem taxes against the Association. In making its argument, the Association refers us to the lease agreement between it and the county that provides that the county will take no action to assess the leased premises. According to the Association, the assessor, whom it claims is a county official, should not be permitted to break this covenant.

The assessor is charged with the duties of making the county tax books and preparing and submitting a final abstract of those books to the State Equalization Board. See Ark. Code Ann. § 28-28-303 (Supp. 1995). The lease agreement referenced by the Association was not signed by the assessor, but the county judge. Thus, the assessor is not bound by the contents of the lease agreement. However, even if we were to agree with the Association that the assessor was bound by the agreement’s terms, the parties to this agreement are “conclusively presumed” to have contracted with reference to the existing law, which, in this case, is our Constitution, article 16, § 5(b). See Ellison v. Tubb, 295 Ark. 312, 749 S.W.2d 650 (1988); quoting Robards v. Brown, 40 Ark. 423 (1883).

For the foregoing reasons, we affirm the decision of the circuit court.

Glaze and Imber, JJ., concur.

Corbin and Thornton, JJ., dissent.

Tom Glaze, Justice,

concurring. Although Crittenden Hospital Association contends that estoppel applies in this case, I thoroughly disagree. The Association’s argument is based upon the county having leased the hospital office building to the Association and thereby agreeing “no part of the leased premises would be subject to ad valorem taxation.” The tax assessor was not a party to the lease.

This court has held that a government entity can be estopped to deny the authorized acts of its officers, but it cannot be estopped by the unauthorized acts of its officers. See Miller v. City of Lake City, 302 Ark. 267, 789 S.W.2d 440 (1990); Klinger v. City of Fayetteville, 297 Ark. 385, 762 S.W.2d 338 (1988); Greene County v. Paragould, 166 Ark. 192, 265 S.W.2d 839 (1924).

Here, the county court and the county judge leased the premises to the Association without the tax assessor joining in the agreement. Nevertheless, the assessor is the county officer who is mandated by law to assess and place a value on all real properties. See Ark. Code Ann. §§ 26-26-301 -1306 (Repl. 1992) and (Supp. 1995). Simply put, neither the county court nor the county judge was authorized to agree to dispense with the imposition of an ad valorem tax on the leased premises. Consequently, under a long line of Arkansas case law, estoppel is not applicable to the circumstances described in this case. I join in the majority opinion on the other points with these added thoughts regarding estoppel.

Imber, J., joins this concurrence.

Donald L. Corbin, Justice,

dissenting. I dissent. The majority’s decision is based on a long-standing precedent that entitlement to a tax exemption has to be proven beyond a reasonable doubt. It gives no consideration to the legislative intent declared by the Hospital Revenue Bond Act, Ark. Code Ann. § 14-265-102, the enabling act in this case. The burden here is too onerous. Proof beyond a reasonable doubt is a criminal standard and should not be applicable in a civil proceeding because it violates due process guaranteed by the Fifth and Fourteenth Amendments to the United States Constitution and Article 2 of our Arkansas Constitution.

It is no small wonder that there have been several efforts to seek a new constitution over the past twenty or so years. I suspect that it is the very strictness and narrow-mindedness of this court’s interpretations of our 1874 Constitution that has led to the dissatisfaction with that Constitution. I am forced to the inescapable conclusion that, historically, it is rare to find a tax that this court does not like.

The record in this case outlines the critical atmosphere of modern rural Arkansas as it relates to the delivery of health care to our rural citizens. Hospitals have closed their doors throughout rural Arkansas. Crittenden County recognized the critical shortage of doctors in rural Arkansas and made a noble effort to protect the health and welfare of its citizens by establishing a plan to attract physicians to its rural location. Today we condemn these efforts, placing the future health and welfare of Crittenden County residents at risk.

Thornton, J., joins in this dissent.

Ray Thornton, Justice,

dissenting. In return for providing charitable care to the public, nonprofit hospitals historically have been afforded tax exemptions on their buildings and lands. Crittenden Hospital is no exception, having provided millions of dollars of charity care over the years to Crittenden County residents. It is not only the physical plant and the lands that allow the Hospital to provide charity care, but also it is the physicians who examine and treat those citizens in the hospital, and who provide after care to those same citizens in their office building following discharge from the Hospital. Without physician staff at the Hospital, the Hospital could not provide charity care. Without physician aftercare, medical services to the poor would be poor indeed. It is for this reason, and the reasons set forth below, that I respectfully dissent from the decision by the majority.

In affirming the trial court’s ruling, the majority relies on the extraordinary standard of proof required to sustain a tax exemption. The majority then exercises its review of the trial court’s decision and determines that the trial court’s finding that the Association failed to prove beyond a reasonable doubt that the buñding and parking lot were used exclusively for public purposes was not clearly erroneous. While I agree that the decision of the trial court should be accorded deference, this case presents an issue involving the interpretation of our constitution, and it is our responsibility to decide the legal issues and to develop a coherent principle of law for application in future cases.

Under Article 16, section 5, of the Arkansas Constitution, all real and tangible personal property are taxable, except those enumerated in subsection (b), which excludes from taxation “public property used exclusively for public purposes; . . . and buildings and grounds . . . used exclusively for public charity.” The statutes add that all buildings, and lands on which these buildings sit, are exempt from taxation so long as they are “not leased or otherwise used with a view to profit.” Ark. Code Ann. § 26-3-301(7) (Supp. 1995).

The constitution does not define every instance of “exclusive public use and purpose.” In fight of that, we have adhered to the notion that “public policy is declared by the General Assembly; not by courts,” when considering issues of tax exemption. Kerr v. East Cent. Arkansas Regional Hous. Auth., 208 Ark. 625, 630, 187 S.W.2d 189, 192 (1945).

In this case, the improvements to the hospital complex were financed pursuant to Act 175 of 1961, which authorizes counties to build health-care facilities for the public benefit and provides the procedure for issuance of bonds to accomplish that public purpose. In Act 175, the legislature spoke: improvement of health care is of vital importance to the public; and as such, the construction of needed health-care facilities is a necessary and essential public purpose and function of county governments. See preamble to Health Care Facilities Act, codified at §§ 14-265-101 to - 112.

Our decisions over many years have construed “exclusive public use and purpose” in the terms of “necessary and essential public purpose and function.” When reading these cases together, a coherent principle of law emerges: A facility of a tax-exempt organization does not lose its exclusive public purpose when a private person exacts a benefit as long as the facility remains essential and necessary to the organization’s primary public or charitable purpose.

In one of the earliest cases, we determined that school property held for investment was not exempt from taxation, and said: “It is necessary that a school district shall have a school building and grounds .... But it is not essential that a school district should hold land for the purpose of sale or rent, and as an investment for profit.” School Dist. of Fort Smith v. Howe, 62 Ark. 481, 487, 37 S.W. 717, 718 (1896). We expanded on this analysis in Hilger v. Harding College, 231 Ark. 686, 331 S.W.2d 851 (1960). In that case, we determined that the operation of a printing plant, a laundry, and a dairy, at least partially for profit, caused the college to lose its tax-exempt status for those operations because they were not necessary to the educational purposes of the institution. We noted, however, that a different result might be reached if the college offered courses of instruction requiring those operations. We said: “If and when [animal husbandry and dairying courses are offered,] a different situation will be presented relative to the exemption from taxation of such equipment and lands as are necessary to implement such course or courses . . . .” Hilger, 231 Ark. at 695, 331 S.W.2d at 856.

While we have recently held that the operations by private businesses of aircraft modification and service shops, car rental agencies, and other for-profit enterprises justified the removal of tax-exempt status, the thoughtful dissent by Justice Glaze joined in by two other justices reminds us of the well-established principles that clearly apply to the facts before us. City of Little Rock v. McIntosh, 319 Ark. 423, 892 S.W.2d 462 (1995). The dissent pointed out that the majority opinion “ignores the well-settled rule that, where the primary and principal use to which the property is put is public, the mere fact that income is incidentally derived from its use does not affect its character as property devoted to public use.” Id. at 432, 892 S.W.2d at 468. Equally important, the dissent recognized the “essential” character of the aircraft modification and service shops to the operation of the airports. Id. at 433, 892 S.W.2d at 468.

In the case before us, the primary purpose of the improvements was, and is, to attract new physicians to the area to deliver needed medical care to the County’s citizens. Without physicians, the hospital cannot provide that charity care. These physicians need office space, and they need a place to park their cars. Here, the Hospital’s office building and parking lot remain essential and necessary to the Hospital’s primary public and charitable purpose because they afford space for an important Hospital resource, the physician staff, to practice its trade.

Further, it should not matter that these physicians also treat patients who are able to pay their bills, just as it does not matter that tax-exempt hospitals may treat patients who pay their bills. See Burgess v. Four States Memorial Hosp., 250 Ark. 485, 465 S.W.2d 693 (1971). Like the charity hospital, a physician who provides charity care must also treat non-charity patients to survive. Moreover, it would defy logic to preserve a tax exemption when physicians deliver this medical care from office space located in the Hospital, but to deny this exemption when these physicians provide this care in an adjacent budding, connected by a walkway.

The majority points out that the trial court based its decision, in part, on the fact that the office building is in competition with other tax-paying medical facilities in the county. I find no merit in this argument. While appellees state that at least fifty percent of the physicians in the area are housed in buildings in competition with the Hospital’s office building, appellees do not tell us how many of those physicians provide charity care at the Hospital, or whether those physicians were recruited to the area by the Hospital to deliver needed care to the County’s citizens.

I believe the trial court erred in interpreting the law, and clearly reached the wrong conclusion on the evidence presented in this case. I would also reverse the court under principles that we established in another context, the use of municipal bonds and tax exemptions to attract industry to our state. In Wayland v. Snapp, 232 Ark. 57, 334 S.W.2d 633 (1960), we held that the profits made by a private manufacturing plant constructed on public lands using tax-exempt bonds did not invalidate the public policy of providing employment opportunities, and therefore met the constitutional exemption from ad valorem taxes.

The appellants in that case challenged the manufacturing plant’s tax exemption as “contrary to Article 16, sections 5 and 6 of the Arkansas Constitution.” Id. at 61, 334 S.W.2d at 636. In disposing of this argument, we held:

As we understand the above provisions of the Constitution, for property to be exempted from taxation two elements must be present: (a) the subject property must be “public property”, that is, it must be owned [in this instance] by the City of Batesville; (b) it must be used exclusively for public purposes. In our opinion both of these elements are present .... Any benefit [the manufacturer] may receive from this entire undertaking will be entirely incidental it seems to us.

Id. at 72, 334 S.W.2d at 641. Wayland tells us that the exclusive public use that justifies the tax exemption is determined by the public benefit of the entire project, not just the subtenant’s use. Here, as in Wayland, the exclusive public use is to provide needed medical care to the citizens of Crittenden County. These citizens would suffer an important detrimental loss without this tax-exempt undertaking.

For sixteen years, Crittenden County honored its agreement not to seek or impose ad valorem taxes on the improved property, the use and purpose of which has not changed. We need not rely, however, on principles addressing the question of estoppel in concluding that the actions of the Tax Assessor should be reversed on the basis of the reasons stated in this dissent.

Corbin, J. joins.


source: Caselaw Access Project

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

license: Public Domain

text:
    Thomas B. SCHUECK v. W.F. BURRIS
    97-465
    957 S.W.2d 702
    Supreme Court of Arkansas
    Opinion delivered December 18, 1997

      Mark T. McCarty, for appellant.

      Lewis E. Ritchey, for appellee.
   W.H. “Dub” Arnold, Chief Justice.

The appellee, W. F. Burris, filed a negligence suit against the appellant, Thomas B. Schueck, in Pulaski County Circuit Court. Following a bench trial, the trial judge ruled that Mr. Schueck was negligent and that he had breached the parties’ contract. The trial judge awarded Mr. Burris a judgment of $1392.51. It is from that judgment that Mr. Schueck appeals, raising four allegations of error. We find no merit to his arguments and affirm.

The parties are former owners of adjacent properties located in the Hillside Village area of Little Rock. They entered into a written agreement in 1978 to settle Mr. Burris’s claim that he had established title by adversely possessing a portion of Mr. Schueck’s land. Pursuant to the agreement, Mr. Burris received $2,500.00 cash and was entided to use, for so long as he owned and occupied his property, a six-foot strip of Mr. Schueck’s land running along Mr. Burris’s south property line. Desiring to settle the ownership dispute, Rector-Phillips-Morse, Inc. (“RPM”), the agent who sold Mr. Schueck his lot and a party to the 1978 agreement, constructed a six-foot-high wooden fence, six feet south of Mr. Burris’s south property line, that extended the 140-foot depth of Mr. Burris’s lot. RPM also covenanted to leave the property in such a condition that Mr. Burris could plant and mow the strip. On January 3, 1979, Mr. Burris and his wife executed a quit-claim deed in favor of Mr. Schueck, relinquishing all of their ownership rights in the disputed property.

In 1994, Mr. Schueck began construction of six separate patio homes known as Fillmore Place. During this construction, Mr. Schueck’s contractor removed the six-foot wooden fence described in the 1978 agreement and replaced it with a twelve-foot-high wall. The height of the new fence was six feet off the ground at one end of the property line and then rose to twelve feet at the other end, with a concrete wall underneath the wooden portion of the fence.

In Mr. Burris’s complaint against Mr. Schueck, he alleged that Mr. Schueck’s agent negligently carried out the performance of constructing the patio homes, resulting in damage to his land and property. Specifically, Mr. Burris claimed that Mr. Schueck’s negligent and intentional actions caused the loss of a fence, the destruction of twelve azalea bushes, the erosion of soil, and the destruction of siding on the southeast corner of his home. Mr. Burris requested compensatory damages in the amount of $1,838.51, attorney’s fees, and costs.

After hearing the testimony of the parties and other witnesses, the trial judge ruled in Mr. Burris’s favor. Mr. Schueck appeals.

1. Negligence

Mr. Schueck first claims that the trial judge’s finding that he was negligent was not supported by substantial evidence. This is not, however, the correct standard of review in civil cases where the trial judge, rather than a jury, sits as the trier of fact. In bench trials, the standard of review on appeal is not whether there is any substantial evidence to support the finding of the court, but whether the judge’s .findings were clearly erroneous or clearly against the preponderance of the evidence. Superior Improvement Co. v. Mastic Corp., 270 Ark. 471, 604 S.W.2d 950 (1980); see also Ark. R. Civ. P. 52. Particularly, to meet his burden of proving negligence, Mr. Burris was required to prove that he sustained damages, that Mr. Schueck was negligent, and that Mr. Schueck’s negligence was the proximate cause of his damages. See Anselmo v. Tuck, 325 Ark. 211, 924 S.W.2d 798 (1996).

At trial, Mr. Burris claimed that cement and water used during the construction of the foundation of the patio homes washed onto his property and damaged his twelve azalea bushes. In support of this claim, Mr. Burris offered oral testimony, photographic evidence, and a written estimate of the cost of replacing the lost bushes. Mr. Schueck’s general contractor also testified that “some of the cement did go into Mr. Burris’s azalea bed,” and that “[t]he concrete people may have ruined the azaleas.” On appeal, Mr. Schueck merely maintains that Mr. Burris failed to establish the “three-prong requirement for negligence as it relates to the allegedly destroyed azaleas.” We disagree. In light of the above evidence, the trial judge could have rightfully concluded that Mr. Burris sustained damages to his azaleas, that Mr. Schueck was negligent in permitting cement to run into the azalea beds, and that, as a result of Mr. Schueck’s negligence, Mr. Burris’s azalea bushes were lost. We cannot say that the trial judge’s finding in this regard was clearly erroneous.

Mr. Burris further testified that his property was eroded and offered photographic evidence of erosion damage. He testified that the drainage problems began after Mr. Schueck’s construction in 1994. Prior to that, he claimed that there were no drainage problems in over thirty years. On appeal, Mr. Schueck asserts that Mr. Burris had existing drainage problems prior to the construction, and that the preventative land contouring and drainage control measures improved, rather than exacerbated, these problems. He also argues that Mr. Burris’s oral estimates of damages provided no basis for the trial judge’s award because Mr. Burris lacked credibility.

The trial judge was free to find Mr. Burris a truthful witness. As the fact-finder, it was within the judge’s “province to believe or disbelieve the testimony of any witness.” Smith v. Galaz, 330 Ark. 222, 953 S.W.2d 576 (1997). In this case, the trial judge was in the best position to observe Mr. Burris, to hear his testimony, and to weigh the alleged inconsistences argued by Mr. Schueck. In this regard, we conclude that the trial judge’s finding as to Mr. Burris’s erosion claim was not clearly erroneous.

Mr. Burris also claimed that trim on the southeast corner of his house was damaged by Mr. Schueck’s subcontractor’s truck. According to Mr. Burris, the truck was driven on the elevated ground and caught the telephone wire attached to his house, pulling the trim off the structure. He contended that the trier of fact might infer from circumstantial evidence that his damages were proximately caused by Mr. Schueck’s negligence. In a negligence action, the proximate-cause evidence is sufficient “if the facts proved are of such a nature and are so connected and related to each other that the conclusion therefrom may be fairly inferred.” White River Rural Water Dist. v. Moon, 310 Ark. 624, 839 S.W.2d 211, 212 (1992). Proximate cause is a cause that, in a natural and continuous sequence, produces damage and without which the damage would not have occurred. Id.

Giving the trial judge’s finding the benefit of all reasonable inferences permissible under the proof, we cannot agree that his finding as to the damaged siding was clearly erroneous.

2. Breach of contract

Mr. Burris maintained at trial that Mr. Schueck’s intentional acts caused the removal and loss of the six-foot-high wooden fence that was erected pursuant to their 1978 written agreement. He presented photographic evidence, a written estimate of replacement cost, and oral testimony to prove his damages. On appeal, Mr. Schueck asserts that Mr. Burris’s failure to specifically plead breach of contract in his complaint barred the trial judge from awarding contract damages.

Arkansas Civil Procedure Rule 15(b) permits the amendment of pleadings to conform to the evidence presented at trial. If an issue is tried by the implied consent of the parties, it shall be treated as if it were raised in the pleadings. Godwin v. Churchman, 305 Ark. 520, 810 S.W.2d 34 (1991). A party may move to amend the pleadings, but failure to do so does not affect the result of the trial of the issue. Id.

Mr. Schueck contends that, because the contract claim was not specifically pleaded, he was deprived of notice and the opportunity to prepare a defense to this claim at trial. The record, however, does not support his contention. In his motion to dismiss made at the close of Mr. Burris’s case, Mr. Schueck’s attorney argued the alleged lack of proof on the contract issue, stating that the “agreement is explicit on the terms in regard to [the] fence.” Under these circumstances, we cannot agree that Mr. Schueck was unaware of the contract claim. Thus, the trial judge did not err in treating the contract issue as if it were raised in the pleadings.

Turning to the merits of Mr. Burris’s contract claim, the trial judge heard testimony that the new fence was twelve-feet high and encompassed a concrete wall that prevented maintenance and mowing. When considering the four corners of the parties’ 1978 written agreement, the photographic evidence, and oral testimony describing the old and new fences, we cannot say that the trial judge’s finding that Mr. Schueck breached the contract was clearly erroneous.

3. Attorney’s fees

Next, Mr. Schueck asserts that the trial judge’s award of attorney’s fees was inappropriate because the case involved a tort action. We do not reach this argument because Mr. Schueck did not object to this award below. Thus, he has not preserved this issue for appeal. Jamison v. Estate of Goodlett, 56 Ark. App. 71, 938 S.W.2d 865 (1997).

4. Evidentiary rulings

Finally, Mr. Schueck maintains that the trial judge erred in allowing Mr. Burris to testify about the terms of the parties’ 1978 agreement. Mr. Schueck claims that this testimony was permitted in violation of the parol evidence rule, which prohibits the introduction of extrinsic evidence to vary the terms of a written agreement, absent an ambiguity in the contract’s terms. First National Bank of Crossett v. Griffin, 310 Ark. 164, 832 S.W.2d 816 (1992). This rule does not, however, prohibit a trial judge from becoming familiar with the circumstances surrounding the making of a contract. Id. On appeal, we will not reverse the trial judge’s ruling allowing or disallowing evidence absent an abuse of discretion. Id.

Mr. Burris’s disputed testimony at trial was as follows:

I signed this agreement on December 26, 1978. I basically agreed to sign this document and waive any claims to the property. And as part of that agreement, [RPM] constructed a fence on my property line. As part of this agreement, I was entitled to use six feet of that land south of my property for my life, and they built the fence directly on that line. I could not tell you when the fence was built, but it [was] shortly after 1979. . .

Fie further described his maintenance efforts and the difference between the old and new fences. When viewing this testimony, we cannot say that it varied the terms of the parties’s contract; rather, Mr. Burris was merely describing the circumstances surrounding the making of the 1978 agreement. Therefore, we conclude that the trial judge did not abuse his discretion in permitting this testimony.

Mr. Schueck further contends that the trial judge should have permitted an RPM employee , who negotiated the 1978 agreement to testify about his interpretation of the contract. The trial judge disallowed this testimony as well as the agent’s opinion testimony regarding Mr. Burris’s rights under the contract. On appeal, Mr. Schueck asserts that Mr. Burris opened the door to this otherwise inadmissible testimony.

Having concluded that Mr. Burris’s testimony was properly admitted, we disagree that Mr. Burris opened the door to testimony violative of the parol evidence rule. While Mr. Burris’s testimony addressed circumstances surrounding the making of the agreement, the agent’s testimony was offered to elicit a legal opinion and an interpretation of the contract that could vary its terms in the absence of any ambiguity in those terms. See First National Bank of Crossett v. Griffin, supra. Under these circumstances, we hold that the trial judge did not abuse his discretion in disallowing this testimony.

Affirmed.


author: David Newbern, Justice.

text:
    TRI-COUNTY FUNERAL SERVICE, INC., d/b/a Howard Funeral Home v. EDDIE HOWARD FUNERAL HOME, INC.
    97-220
    957 S.W.2d 694
    Supreme Court of Arkansas
    Opinion delivered December 18, 1997

      Home, Hollingsworth & Parker, by: Allan W. Horne and Mark H. Allison, for appellant.

      Blair & Stroud, by: J. Scott Davidson and Robert D. Stroud, for appellee.
   David Newbern, Justice.

This is a trade-name infringement case. The appellant, Tri-County Funeral Service, Inc. (“Tri-County”), which does business as Howard Funeral Home in Melbourne, sought an injunction pursuant to Ark. Code Ann. § 4-71-113 (Repl. 1996) to prohibit the appellee, Eddie Howard Funeral Home, Inc., also located in Melbourne, from using the name “Howard” in connection with its funeral business. The Chancellor declined to issue the injunction. Our determination in this de novo review is that Tri-County was entitled to the relief sought; thus we reverse the Chancellor’s decision.

In 1949, Roman and Wilma Howard began working for the Roller Funeral Home in Melbourne. At some point in the 1950s they left that employment. The funeral home changed hands several times, and Mr. and Mrs. Howard returned as employees in 1961. A Mr. Robinson purchased the business while it was being operated as “McCollum Funeral Home,” and in 1968 Mr. Robinson asked the Howards for permission to operate as “Howard Funeral Home,” although the Howards owned no interest in the business. Permission was granted.

In 1974, Billy Howard, Mr. and Mrs. Howard’s son, joined them as an employee of Howard Funeral Home. In 1978, the business was sold to Justin Jones who, in 1984, sold it to Rhodes-Madden, Inc., the parent company of Tri-County. In the sales agreement, there was a provision selling the name, “Howard Funeral Home.” The ensuing bill of sale, however, did not mention the sale of the name. Tri-County continued to operate the business as Howard Funeral Home.

Roman Howard retired sometime during the 1980s. Billy Howard left his employment with the business in 1984. Wilma Howard remained until 1989 when her employment was terminated because of rumors that Billy Howard was attempting to open a competing funeral business.

In 1991, Billy Howard was rehired by Tri-County to manage the business, and he rehired Wilma Howard as an employee. In 1992, Billy Howard hired his younger brother, Eddie Howard, to work in the business. Billy Howard died, and Eddie Howard became the manager in 1994. In 1996, Eddie Howard’s employment was terminated due to his apparent efforts to begin a competing business. Wilma Howard then resigned from her employment with Tri-County.

Eddie Howard established “Eddie Howard Funeral Home, Inc.,” a corporation of which he and his wife are the only shareholders. Tri-County sued to prevent that corporation from using the Howard name, alleging that the name had acquired a secondary meaning and that it constituted an interest protectable in accordance with § 4-71-113.

Eddie Howard and Wilma Howard intervened in the proceeding with a complaint seeking to enjoin Tri-County from using the name “Howard,” alleging that they had not been compensated for the use of the name and seeking to revoke the permission given to Tri-County’s predecessor.

At the trial, Robert Eichelberger, secretary-treasurer of the parent company of Tri-County, testified that when his company purchased a funeral home it attempted to keep the same name and employees in the operation so that people may not even realize that a change in ownership has taken place. He testified further that there had been a slight decrease in the business of Howard Funeral Home since the Eddie Howard Funeral Home commenced operations and that some confusion had resulted from the fact that two funeral businesses are now using the Howard name.

The first of two orders issued by the Chancellor denied temporary relief to Tri-County. The Chancellor emphasized that the Howards had not been compensated for the use of their name and that Tri-County had failed to show that any property interest had been “damaged” by use of the name by Eddie Howard Funeral Home, Inc. The subsequent order denied permanent relief but ordered Eddie Howard to return a customer list to Tri-County. In his order denying relief to Tri-County, the Chancellor dismissed the Howards’ claim in intervention, and no appeal has been taken from that aspect of the order. Nor has the order to return the list been appealed by Eddie Howard.

The relevant language of § 4-71-113 is as follows: “Likelihood of injury to business reputation or of dilution of the distinctive quality of ... a trade name valid at common law, shall be grounds for injunctive relief notwithstanding the absence of competition between the parties or the absence of confusion as to the source of goods and services.” Eddie Howard Funeral Home, Inc., concedes that the Chancellor applied the wrong standard in holding that there had been no showing of “damage” to an interest held by Tri-County, as the statute imposes no such requirement. The question for us is thus whether Tri-County had a “trade name valid at common law,” and if so, whether there was “likelihood of injury” to Tri-County’s “business reputation” or “dilution” of its trade name. In addition, we consider whether Eddie Howard has an inherent right to use his own name in his business even if it runs afoul of an established secondary meaning and the protection offered by the statute.

Generally speaking, the granting or denying of an injunction is a matter within the discretion of a chancellor, and we do not reverse unless there has been a clearly erroneous factual determination, Warren v. Robinson, 288 Ark. 249, 704 S.W.2d 614 (1986); Bassett v. City of Fayetteville, 282 Ark. 395, 669 S.W.2d 1 (1984), or unless the decision is contrary to some rule of equity or the result of improvident exercise of judicial power. Mills v. Patton, 233 Ark. 755, 346 S.W.2d 689 (1961). We agree, however, with Tri-County’s assertion that when a statute provides terms that constitute grounds for issuing an injunction, a chancellor’s discretion is somewhat circumscribed. See State Industrial Accident Comm’n v. Miller, 162 P.2d 146, 150 (Or. 1945)(stating injunction should issue when statute imposes “positive duty” “upon the court to grant injunctive relief. . . when the conditions set forth therein are made to appear”); Vicksburg, S. & P. Ry. Co. v. Webster Sand, Gravel & Constr. Co., 62 So. 140, 143 (La. 1913); Sawyer v. Termohlen, 122 N.W. 924, 925 (Iowa 1909).

1. Trade name property

Eddie Howard Funeral Home, Inc., suggests that Tri-County was not entitled to an injunction because it has no valid interest or property right in using the “Howard” name in connection with its business. The suggestion seems to be that Tri-County had not acquired an interest in the Howard name because (1) neither it, nor any of its predecessors, paid consideration to the Howards for the use of their name; (2) the Howards had orally given permission to Mr. Robertson to use their name, and that permission was later revoked with respect to Tri-County; and (3) the right to use the Howard name was not mentioned in the bill of sale and thus was not acquired by Tri-County from Mr. Jones. No authority is cited by the Howards or the Chancellor for the proposition that successful acquisition of a trade name depends on those factors.

There is ample authority for the proposition that a person acquires a property right in a trade name merely by using the name in connection with a particular business for a period of time.

“Generally, the word ‘trade name’ applies to a business and its good will, while the word ‘trade-mark’ applies to the commodity to which it is affixed.” King Pharr Canning Operations, Inc. v. Pharr Canning Co., 85 F. Supp. 150, 157 (W.D. Ark. 1949). “Trade names are afforded protection under the law of unfair competition. They are protected by a registration statute and by the common law. See Ark. Stat. Ann. 70-539(E), 70-550 [now Ark. Code Ann. § 4-71-113], and 70-552 (Repl. 1979).” Pullan v. Fulbright, 287 Ark. 21, 23, 695 S.W.2d 830, 831 (1985). “[W]hen a name, mark or symbol has acquired a ‘secondary meaning,’ the original user has a ‘property right which equity will protect against unfair appropriation by a competitor.’” Champions Golf Club, Inc. v. Sunrise Land Corp., 846 F. Supp. 742, 757 (W.D. Ark. 1994), quoting Pullan v. Fulbright, supra.

The concept of “secondary meaning” has been explained as follows:

There are certain names, marks, and symbols which in their primary sense are merely generic or descriptive and do not ordinarily indicate the origin of goods or services. Such names, marks, or symbols, when used in their primary sense, cannot form the subject matter of a trade or service mark. However, a name, mark, or symbol by long and exclusive use and advertising by one person in the sale of his goods and services may become so associated in the public mind with such goods or services that it serves to identify them and distinguish them from the goods or services of others. When such an association exists, the name, mark, or symbol is said to have acquired “secondary meaning” in which the original user has a property right which equity will protect against unfair appropriation by a competitor.

Pullan v. Fulbright, 287 Ark. at 23-24, 695 S.W.2d at 831, quoting Liberty Mut. Ins. Co. v. Liberty Ins. Co. of Tex., 185 F.Supp. 895, 903 (E.D. Ark. 1960).

We do not have many cases that thoroughly treat the question of how one acquires a property right in a trade name. Of course, we have recognized that a person may acquire such a right by purchasing the name. See Williams v. Spelic, 311 Ark. 279, 284, 844 S.W.2d 305, 309 (1992)(“When a business purchases goodwill and a trade name, it acquires a valuable property right, and that is the right to inform the public that it possesses the experience and skill symbolized by the original concern.”; sale of trade name specifically mentioned in bill of sale).

One may, however, acquire a protectable interest in a trade name, without purchasing the rights to it, simply by using the name in connection with a business over the course of time and giving a “secondary meaning” to the name. Clyde Campbell University Shop v. Campbell-Bell, Inc., 243 Ark. 937, 422 S.W.2d 875 (1968); Liberty Cash Groceries, Inc., v. Adkins, 190 Ark. 911, 82 S.W.2d28 (1935). See also Champions Golf Club, Inc. v. Sunrise Land Corp., 846 F. Supp. at 757 (stating the right to a trademark or trade name “originates in common law by prior appropriation and use”), citing 4A Rudolf Callman, The Law of Unfair Competition, Trademarks and Monopolies § 25.03 (L. Altman ed., 4th ed. 1993); Restatement of the Law (Third) Unfair Competition § 18, at p. 184 (1995).

Tri-County has used the Howard name continuously in connection with its business since 1984, and prior owners of the business used the name continuously since 1968. No one else in the area used that name or a similar name in connection with any business. The Howards, themselves, had never used their own name in connection with a business they owned. Howard Funeral Home was one of only two funeral businesses in the area, and its share of the funeral business was near 70 percent before Eddie Howard opened his business in 1996. Tri-County advertised and promoted its name in various ways.

Thus, it is clear that Tri-County went through the necessary steps of acquiring “Howard Funeral Home” as a valid trade name with obvious “secondary meaning.” It occurred irrespective of any “permission” initially given by the Howards to Mr. Robertson in 1968 and irrespective of the fact that the Howards later purported to revoke the permission with respect to Tri-County, after it had used the name beginning in 1984.

The Howard name was not previously appropriated when Mr. Robertson began to use it in connection with his funeral business in 1968. It was just a surname, and there is no protection given to a surname until it acquires a secondary meaning. 2 McCarthy on Trademarks and Unfair Competition § 13.02[1], at p. 13-5 (3d ed. 1995). In 1968, the Howards had not used their name in connection with their business; it had not acquired a secondary meaning. Thus, it was not necessary for the Howards to “permit” Mr. Robertson or anyone else to call the business the “Howard Funeral Home” because the Howards had not established a protectable interest in their name.

It also was irrelevant that the bill of sale was silent on the matter of whether the right to the Howard Funeral Home trade name passed in the transaction between Mr. Jones and TriCounty. Regardless of what transpired in connection with the bill of sale, Tri-County has continued to use, advertise, and promote the Howard Funeral Home name since 1984. Even if Tri-County did not “acquire” the right to that name at the precise point of the 1984 transaction with Mr. Jones, Tri-County most certainly gave the name a “secondary meaning” in the years thereafter.

2. Infringement

The next question is whether Eddie Howard Funeral Home, Inc., by calling its business the “Eddie Howard Funeral Home,” has infringed on Tri-County’s trade name, “Howard Funeral Home.” According to the statute, Tri-County has presented grounds for an injunction against Eddie Howard Funeral Home, Inc., if the latter’s actions have created a “[l]ikelihood of injury to business reputation or of dilution of the distinctive quality of. . .a trade name valid at common law.” Ark. Code Ann. § 4-71-113 (Repl. 1996). That “likelihood,” if established, “shall be grounds for injunctive relief notwithstanding the absence of competition between the parties or the absence of confusion as to the source of goods or services.” Id. (emphasis added).

“The issue is . . . one ... of the likelihood of dilution of the value of the trade name as an asset by its use by someone other than the owner.” Williams v. Spelic, 311 Ark. at 282, 844 S.W.2d at 308. See also Wood v. Wood’s Homes, Inc., 519 P.2d 1212, 1215 (Colo.App. 1974)(“Nor is it necessary for the plaintiff to prove present damage, since the purpose of the action is to prevent the damage which would arise if defendant becomes established under the deceptive name.”)(emphasis added).

“An infringement on a trade name is such a colorable imitation of the name that the general public, in the exercise of reasonable care, might think that it is the name of the one first appropriating it. Where such a similarity occurs, it tends to divert trade from a business rival who has previously adopted its name and operates as a fraud which may be restrained by injunction, although the prior users may not have an exclusive right to the use of the name.”

Liberty Cash Groceries, Inc. v. Adkins, 190 Ark. at 912, 82 S.W.2d at 28 (emphasis added), quoting 26 R.C.L., at p. 876.

Tri-County demonstrated all that the statute required it to demonstrate to be entitled to injunctive relief. It established at least a likelihood of harm or dilution, given the fact that the names are sufficiently similar, Howard Funeral Home had long established a secondary meaning, and — although seemingly made unnecessary by the statute — there was testimony about name confusion and a decrease in Howard Funeral Home’s business following the opening of Eddie Howard’s business.

3. The right to use one’s own name

Older cases suggested that a junior user, or “second comer,” should never be enjoined from using his or her own name in connection with a business, even if a senior user of the same name could be harmed. See, e.g., Societe Vinicole de Champagne v. Mumm, 143 F.2d 240, 240 (2d Cir. 1944). As early as 1949, however, Judge John Miller in King Pharr Canning Operations, Inc. v. Pharr Canning Co., 85 F. Supp. 150, 153-54 (W.D. Ark. 1949), rejected the “sacred right” theory in a case involving the federal trade-mark law.

Recent cases reject the idea that a junior user has an absolute or “sacred” right to use his or her own name in business if a first comer has been using that name and has established a secondary meaning. See generally Annotation, Use of “Family Name” by Corporation as Unfair Competition, 72 A.L.R.3d 8 (1976). See also McCarthy, supra, at § 13.03[3], at p. 13-13. Because it may become a trade name subject to the rule of priority in order to prevent deception of the public, one has no absolute right to use one’s own name, even honestly, as the name of a business. John R. Thompson Co. v. Holloway, 366 F.2d 108, 113 (5th Cir. 1966). See McCarthy, supra, at § 13.03[6], at pp. 13-25 to 13-28 (discussing cases imposing “absolute prohibition against use of personal name as business mark”).

No doubt one may continue to use one’s own name personally even after another has added a secondary meaning to it. The question, however, is whether one may use one’s own name in a business if there is a likelihood of dilution of the trade name used by the party having established a secondary meaning or injury to the business reputation of the first user.

In Williams v. Spelic, supra, the office-supply portion of a business known as “Vowels Printing and Supply” was sold to Mr. and Mrs. Spelic by Mr. and Mrs. Williams. The Vowels name had been used by Mrs. Williams’s father in connection with the business for many years and Vowels apparently was Mrs. Williams’s name prior to her marriage. The part of the business sold was the office-supply portion. The Williamses retained the printing portion that operated across the street from the office-supply store. The Chancellor found that the sales agreement had impliedly sold the Vowels name to the Spelics. The Williamses began using the Vowels name with their printing business. One of the Williamses’ arguments on appeal of an injunction against their use of the Vowels name was that “a family name may be used in the absence of fraud or deceit unless the exclusive right to the family name is contracted away.” 311 Ark. at 282, 844 S.W.2d at 308. We held that the argument ignored the statutory grounds for injunction, noting that a showing of a likelihood of injury to the trade name was sufficient for the issuance of the injunction.

An inescapable conclusion to be drawn from our decision in the Williams case is that we reject the “sacred right” argument because, “[w]hen a surname is used as a trade name, it risks becoming a symbol of the business and losing its individual identity.” Id. at 284, 844 S.W.2d at 309.

4. Conclusion

The decision of the Chancellor is reversed. Eddie Howard Funeral Home, Inc., is enjoined from using the name “Howard” as part of the name of its business or to identify its business.

Imber, J., not participating.


author: Donald L. Corbin, Justice.

text:
    Paul CALCAGNO v. SHELTER MUTUAL INSURANCE COMPANY and Bill Bledsoe
    97-45
    957 S.W.2d 700
    Supreme Court of Arkansas
    Opinion delivered December 18, 1997

      Q. Byrum Hurst, Jr., for appellant.

      Matthews, Sanders & Sayes, by: Margaret M. Newton and Roy Gene Sanders, for appellees.
   Donald L. Corbin, Justice.

Appellant Paul Calcagno appeals the decision of the Garland County Circuit Court dismissing his complaint for negligence and breach of contract against Appellees Shelter Mutual Insurance Company and Bill Bledsoe. The Arkansas Court of Appeals affirmed the trial court’s decision. Calcagno v. Shelter Mut. Ins. Co., 55 Ark. App. 321, 934 S.W.2d 548 (1996). We granted Appellant’s petition for review of that decision pursuant to Ark. Sup. Ct. R. l-2(e). When we grant review following a decision by the court of appeals, we review the case as though the appeal was originally filed with this court. Olsten Kimberly Quality Care v. Pettey, 328 Ark. 381, 944 S.W.2d 524 (1997). We affirm.

The facts of this case are not in dispute. Appellant was injured in an automobile accident on January 11, 1990. Appellant settled with the tortfeasor for the limits of the tortfeasor’s insurance policy on January 24, 1992. Appellant then demanded payment from Shelter for underinsured motorist coverage pursuant to his insurance policy, as his medical damages exceeded the amount of money available from the tortfeasor’s insurance. Shelter refused to pay, asserting that Appellant’s policy did not include underinsured motorist coverage. Appellant filed his initial complaint against Shelter on February 23, 1993, for breach of contract and for the negligence of Bledsoe, Shelter’s agent. The complaint was amended to include Bledsoe as a named defendant in December 1994.

Appellees filed motions to dismiss the complaint on the ground that the three-year statute of limitations barred both causes of action. They argued that the limitations period began to run on January 11, 1990, the date of the accident, and that Appellant’s initial complaint filed on February 23, 1993, was untimely. The trial court agreed with Appellees and granted the motions.

It is clear from a review of the abstract that the trial court treated the motions to dismiss as motions for summary judgment, by considering the partial depositions of Appellant and Bledsoe. Where the trial court considered matters outside the pleadings, we will treat the motion as one for summary judgment. ARCP Rule 12(b)(6); Smothers v. Clouette, 326 Ark. 1017, 934 S.W.2d 923 (1996). Summary judgment should only be granted when it is clear that there are no genuine issues of material fact to be litigated and the moving party is entitled to judgment as a matter of law. Pugh v. Griggs, 327 Ark. 577, 940 S.W.2d 445 (1997). The burden of sustaining a motion for summary judgment is the responsibility of the moving party. Morrison v. Jennings, 328 Ark. 278, 943 S.W.2d 559 (1997). Once the moving party has established a prima facie entitlement to summary judgment, the opposing party must meet proof with proof and demonstrate the existence of a material issue of fact. Pugh, 327 Ark. 577, 940 S.W.2d 445. This court views the evidence in a light most favorable to the party against whom the motion was filed, resolving all doubts and inferences against the moving party. Id. Where it is clear that the statute of limitations bars the action, summary judgment is appropriate. Alexander v. Twin City Bank, 322 Ark. 478, 910 S.W.2d 196 (1995).

I. Action Against Bledsoe

It is Appellant’s theory that Bledsoe was negligent in failing to advise him about underinsured motorist coverage at the time he obtained his policy from Shelter, and that Ark. Code Ann. § 23-89-209 (Supp. 1987) required insurance companies and their agents to make such coverage available to the named'insured. The parties to this suit agree that the applicable statute of limitations for negligent acts of an insurance agent is three years. See Ark. Code Ann. § 16-56-105 (1987); Flemens v. Harris, 323 Ark. 421, 915 S.W.2d 685 (1996). The question then is when did the action against Bledsoe accrue.

Appellant contends that the cause of action accrued on the date that he settled his claim with the tortfeasor. He claims that prior to such settlement, he was not in fact underinsured. Appellant relies on the cases of State Farm Mut. Auto. Ins. Co. v. Beavers, 321 Ark. 292, 901 S.W.2d 13 (1995), and State Farm Mut. Auto. Ins. Co. v. Thomas, 316 Ark. 345, 871 S.W.2d 571 (1994), in support of his argument. Appellant’s reliance on those cases is misplaced, as neither case presented a question involving the statute of limitations.

In Flemens, 323 Ark. 421, 915 S.W.2d 685, which was relied upon by the court of appeals, this court held that in an action for negligence against an insurance agent, the three-year-limitations period begins to run, absent concealment of the wrong, on the date that the negligent act was committed, rather than the date that it was discovered. This court recognized the harshness of this rule to insurance clients, but nevertheless concluded that it would be up to the General Assembly to effect a change in the well-settled principle that an action for negligence accrues at the time the negligent act is committed.

Here, the alleged negligent act, Bledsoe’s failure to make underinsured motorist coverage available to Appellant, occurred on the date that Appellant obtained his insurance policy, which was sometime prior to January 11, 1990. Appellant’s initial complaint was not filed until February 23, 1993. Applying the holding in Flemens, it is clear that Appellant’s claim for the alleged negligent actions of Bledsoe is precluded by the statute of limitations.

II. Action Against Shelter

Appellant makes an identical argument with regard to his claim for breach of implied contract against Shelter. Appellant asserts that his action against Shelter is one based upon a contract implied in law, as opposed to one implied in fact, because Shelter did not fulfill its statutory duty by making underinsured motorist coverage available to him. Without reaching the issue of whether the action against Shelter is barred by the statute of limitations, we affirm the trial court’s ruling on the basis that Appellant did not present proof of a material element of his claim.

At the time that Appellant obtained his insurance policy with Shelter, section 23-89-209 (a) provided in pertinent part:

Every insurer writing automobile liability insurance covering liability arising out of the ownership, maintenance, or use of any motor vehicles in this state shall make underinsured motorist coverage available to the named insured[.]

To sustain his action against Shelter, Appellant must prove that Shelter failed to fulfill its duty under section 23-89-209 to make underinsured motorist coverage available to him at the time he took out his policy with Shelter. It is the act of failing to inform an insured about the availability of underinsured motorist coverage that triggers the trial court’s implying such coverage by operation of law. Shelter Mut. Ins. Co. v. Irvin, 309 Ark. 331, 831 S.W.2d 135 (1992); see also Colonia Underwriters Ins. Co. v. Richardson, 325 Ark. 300, 924 S.W.2d 808 (1996).

Appellant has failed to demonstrate that Shelter did not fulfill its duty to make such coverage available to him pursuant to section 23-89-209. In fact, Appellant conceded in his deposition that Shelter did comply with the statutory requirements. When asked by Shelter’s counsel if he had previously known about the existence of underinsured motorist insurance, Appellant indicated that he was aware of that type of coverage, but that Bledsoe had told him about it anyway. Thus, Appellant has admitted that Shelter fulfilled its statutory duty by informing him of the existence and availability of underinsured motorist coverage. This court has recognized that summary judgment is proper when an appellant fails to present proof of a material element of his claim. Bushong v. Garman Co., 311 Ark. 228, 843 S.W.2d 807 (1992). We have recently held that where a plaintiff “makes a pivotal admission that goes to the heart of the case,” we will affirm the grant of summary judgment. Sublett v. Hipps, 330 Ark. 58, 65, 952 S.W.2d 140, 144 (1997).

Accordingly, because Appellant’s own words contradict the very basis of his claim against Shelter, we conclude that the trial court was correct in ruling that Shelter was entitled to summary judgment. We will affirm the ruling of the trial court if it reached the right result, even though it may have been for a different reason. Nettleton Sch. Dist. v. Owens, 329 Ark. 367, 948 S.W.2d 94 (1997).

Affirmed.


author: Robert L. Brown, Justice.

text:
    Leo DARROUGH v. STATE of Arkansas
    CR 96-1514
    957 S.W.2d 707
    Supreme Court of Arkansas
    Opinion delivered December 18, 1997

      Clarence W. Cash, Jr., for appellant.

      Winston Bryant, Att’y Gen., by: Mac Golden, Asst. Att’y Gen., for appellee.
   Robert L. Brown, Justice.

Appellant Leo Darrough was convicted of possession of a controlled substance with intent to deliver. He was sentenced to eighty years’ imprisonment as a habitual offender with four or more prior offenses. His sole assignment of error concerns the sufficiency of the evidence supporting his conviction. We affirm.

At trial, Little Rock Police Department Narcotics Detective Bruce Jones testified that he executed a search warrant for an address on Highway 365 on December 21, 1994. He stated that the structure he entered was a double-door garage, and upon entry, he found Darrough and another man who he believed to be Roderick Darrough. He searched the garage and discovered a small pill bottle wrapped in black duct tape on the garage floor about three feet behind Leo Darrough. The pill bottle contained numerous off-white, rock-like substances which he assumed was crack cocaine. His belief was confirmed by the State Crime Lab. On cross-examination, Detective Jones admitted that there may have been more people in the garage than the two men and that he did not know who owned the building.

Officer Austin Lynch, who was then a member of the Little Rock Police Department’s Narcotics Division, testified that he orchestrated a controlled buy in the garage about 30 to 45 minutes before executing the search warrant. As part of the subsequent search, he found $230 on Leo Darrough, which included a $20 bill that matched the serial number of a $20 bill used in the controlled buy. According to Officer Lynch, though Darrough did not reside in the residence located just northeast of the garage, some of his relatives did. On cross-examination, Officer Lynch admitted that he did not enter the garage as part of the controlled buy but, rather, the buy was accomplished by a confidential informant. Officer Lynch also related that the informant told him that he made the purchase from a person matching Leo Darrough’s physical description and the clothes Darrough was wearing and that there were two other people in the garage. He testified that the informant bought one-quarter gram of crack cocaine.

At the conclusion of the State’s case, Darrough’s counsel moved for a directed verdict on two grounds: (1) that there was insufficient evidence connecting him to the cocaine found in the garage, and (2) that the chain of custody was not maintained in a proper fashion. The motion was denied, and Darrough put on no proof.

Darrough now argues that the trial court erred in denying his directed-verdict motion because the evidence presented by the State was insufficient. The standard of review for an appeal from a denial of a motion for directed verdict was reiterated recently in Williams v. State, 329 Ark. 8, 16, 946 S.W.2d 678, 682 (1997):

A motion for directed verdict is treated as a challenge to the sufficiency of the evidence. Peeler v. State, 326 Ark. 423, 932 S.W.2d 312 (1996). When a defendant challenges the sufficiency of the evidence convicting him, the evidence is viewed in the light most favorable to the State. Dixon v. State, 310 Ark. 460, 839 S.W.2d 173 (1992). Evidence, whether direct or circumstantial, is sufficient to support a conviction if the evidence is forceful enough to compel reasonable minds to reach a conclusion one way or the other. Peeler v. State, supra; Dixon v. State, supra. Only evidence supporting the verdict will be considered. Moore v. State, 315 Ark. 131, 864 S.W.2d 863 (1993).

Id.

Under our law, it is clear that the State need not prove that the accused physically possessed the contraband in order to sustain a conviction for possession of a controlled substance if the location of the contraband was such that it could be said to be under the dominion and control of the accused, that is, constructively possessed. Heard v. State, 316 Ark. 731, 876 S.W.2d 231 (1994); Crossley v. State, 304 Ark. 378, 802 S.W.2d 459 (1991). We have further explained:

Constructive possession can be implied when the controlled substance is in the joint control of the accused and another. Joint occupancy, though, is not sufficient in itself to establish possession or joint possession. There must be some additional factor linking the accused to the contraband. The State must show additional facts and circumstances indicating the accused’s knowledge and control of the contraband.

Hendrickson v. State, 316 Ark. 182, 189, 871 S.W.2d 362, 365 (1994) (citations omitted). See also Jacobs v. State, 317 Ark. 454, 878 S.W.2d 734 (1994); Nichols v. State, 306 Ark. 417, 815 S.W.2d 382 (1991). When seeking to prove constructive possession, the State must establish (1) that the accused exercised care, control, and management over the contraband, and (2) that the accused knew the matter possessed was contraband. Darrough v. State, 322 Ark. 251, 908 S.W.2d 325 (1995); Plotts v. State, 297 Ark. 66, 759 S.W.2d 793 (1988).

Darrough relies primarily on Osborne v. State, 278 Ark. 45, 643 S.W.2d 251 (1982), where this court held that the State’s proof of constructive possession was insufficient to support the appellant’s convictions for possession of various controlled substances. That case, however, is factually distinguishable. In Osborne, police officers searched the appellant’s residence while he was across the street at his parents’ home. The police officers discovered phentermine pills in a bedroom dresser and in a suitcase in the hall as well as marijuana on a tray in the living room where the appellant’s wife and others were present. This court reversed the appellant’s convictions for possession of these items because the State presented no evidence linking him to the contraband other than proof that the home was his residence. We concluded that in that case the relationship between the appellant and the contraband was speculative. Here, Darrough argues that, as in Osborne, there was no proof linking him to the pill bottle found on the garage floor.

Darrough’s argument is unavailing. Unlike Osborne v. State, supra, in the instant case there was substantial evidence to support the jury’s verdict that he exercised dominion and control over the pill bottle and knew that the pill bottle contained contraband. See Darrough v. State, supra; Plotts v. State, supra. To summarize that evidence once more, Detective Jones testified that he discovered the pill bottle within three feet of Darrough on the floor. Officer Lynch told the jury that a $20 bill matching the serial number from the previous controlled buy was found on Darrough and that he matched the physical description of the seller as well as the description of the seller’s clothing which were given to him by the confidential informant.

Darrough makes a number of peripheral arguments, including an assertion that this court should not consider Officer Lynch’s testimony about the confidential informant’s description because it was hearsay evidence. We note, however, that there was no hearsay objection at trial, and this court has stated repeatedly that hearsay evidence admitted without objection may constitute substantial evidence. See, e.g., Sanders v. State, 326 Ark. 415, 932 S.W.2d 315 (1996); Clemmons v. State, 303 Ark. 265, 795 S.W.2d 927 (1990); Johnson v. State, 298 Ark. 617, 770 S.W.2d 128 (1989).

Finally, Darrough contends that the State failed to present additional evidence to the jury such as fingerprint evidence with respect to the pill bottle and the confidential informant’s testimony. Be that as it may, we are only called upon to decide whether the evidence actually presented by the State was substantial, and we conclude that it was.

Affirmed.


text:
    Brian John WHITE v. STATE of Arkansas
    CR 96-955
    958 S.W.2d 519
    Supreme Court of Arkansas
    Opinion delivered December 18, 1997
    [Petition for rehearing denied January 22, 1998.]

      Sam Sexton III, for appellant.

      Winston Bryant, Att’y Gen., by: Sandy Moll, Asst. Att’y Gen., for appellee.
   Robert L. Brown, Justice.

This appeal arises out of the conviction of appellant, Brian White, for the offense of sexual abuse in the first degree. White received a sentence of eighteen years. He raises multiple points on appeal, none of which has merit. We affirm.

On June 29, 1994, White allegedly had sexual intercourse with a 12-year-old female, NE. The incident was reported to the police on July 9, 1994. At the time, White was on probation due to pleas of guilty that were deferred under Act 346 of 1975, the First Offenders Act.

At trial, the evidence presented by the State consisted primarily of the testimony of the victim together with medical and physical evidence. The victim testified that on the date in question, White, who was the uncle of the victim, was sent to pick up the victim and another minor, Rachel White, who was the 12-year-old aunt of the victim. According to the testimony, White and his girlfriend, Barbara Frazee, took the two girls back to his apartment where they offered the girls alcohol and marijuana, which the girls' accepted. The victim testified that she went to sleep in White’s bedroom and awoke to find White fondling her. White, she stated, eventually had sexual intercourse with her against her will. Although neither of them actually witnessed the alleged rape, the testimony of Rachel White and Barbara Frazee confirmed certain aspects of the victim’s testimony.

The prosecutor also presented physical evidence of the crime. Several items of clothing, including the underwear that the victim claimed to have been wearing that night, were introduced into evidence. These clothing articles were collected by Rogers Police Detective Gary Armstrong and sent to the State Crime Lab for testing. The prosecutor also presented the testimony of two technologists who conducted tests to determine if White and the victim suffered from any sexually transmitted diseases. The tests showed that both the victim and White had chlamydia on July 11 and 12, 1994, respectively. A pharmacist also testified that White had purchased an antibiotic on July 17, 1994, which could be used to cure chlamydia.

I. Discovery Delay

For his first issue White protests the refusal of the trial court to allow the jury to be informed or, alternatively, to instruct the jury that the prosecutor did not turn over the test results on the victim’s underwear and hairs found in the underwear conducted by the State Crime Lab until the day before the trial. The test results had been sent to the Rogers Police Department on May 26, 1995. In spite of White’s motion to compel discovery filed on January 23, 1995, White had not been told about the tests. The defense moved to exclude the evidence. Recognizing that a violation of Ark. R. Crim. P. 17.1 had occurred, the trial court offered the defense a continuance to allow time to examine the evidence and to have tests performed pursuant to Ark. R. Crim. P. 19.7. White declined and insisted that the trial proceed. The test results were admitted as part of the State’s case.

During the trial, White’s counsel first tried to cross-examine Detective Gary Armstrong on the failure of the prosecutor to make the Crime Lab report available to him until just before trial. The trial court ultimately refused to allow defense counsel to inquire into the matter and also refused to instruct the jury on when the defense received the test results. Then, during closing arguments, defense counsel argued to the jury that the reason the prosecutor had not performed DNA tests on hairs found in the victim’s underwear was that the State knew White was innocent. The prosecutor responded in his rebuttal argument that White could have performed his own tests, and White’s counsel objected based on the fact that the defense did not have time to perform any tests.

The trial court ruled that White had an opportunity to do his own tests and, in effect waived his right to argue that he did not have sufficient time to perform tests on the underwear or the hairs. We agree. The trial court’s choice of remedy under Ark. R. Crim. P. 19.7 will not be disturbed absent an abuse of discretion. Nooner v. State, 322 Ark. 87, 907 S.W.2d 677 (1995). In Esmeyer v. State, 325 Ark. 491, 930 S.W.2d 302(1996), this court addressed a situation where the State failed to disclose a witness before trial:

[A] failure to disclose that information will not warrant a reversal of a conviction absent a showing of prejudice. Alford v. State, 291 Ark. 243, 724 S.W.2d 151 (1987); Snell v. State, 290 Ark. 503, 721 S.W.2d 628 (1986). When the State fails to provide the information, the burden is on the appellant to show that the omission was sufficient to undermine the confidence in the outcome of the trial. Bray v. State, 322 Ark. 178, 908 S.W.2d 88 (1995). Prejudice, though, does not exist when the defendant already has access to the information that the State did not disclose. See Johninson v. State, 317 Ark. 431, 878 S.W.2d 727 (1994).

Esmeyer, 325 Ark. at 499, 930 S.W.2d at 307.

Here, White has been unable to show that the discovery violation resulted in any prejudice because he was offered a continuance to correct any potential prejudice. White argues that the offer of continuance was unacceptable because accepting a continuance would have, in some way, waived his speedy-trial claim. This is simply not true. A continuance charged to the defendant would have had no effect on any speedy-trial claims that may have existed at that time.

Moreover, the trial court is in the best position to evaluate the potential for prejudice based on the prosecutor’s remarks. Bullock v. State, 317 Ark. 204, 876 S.W.2d 579 (1994). In the instant case, counsel for the defense invited the State’s response in closing argument by implying that the State did not conduct further tests because it knew that White was innocent or because it did not care enough to conduct the tests. The prosecutor’s reply that White could have conducted his own tests was warranted and an accurate statement of the situation. There was no misrepresentation by the prosecutor and no abuse of discretion by the trial court in refusing to instruct the jury about the delay in furnishing the test results. See Lee v. State, 326 Ark. 529, 932 S.W.2d 756 (1996).

II. Exclusion of Medical Record

For his next point, White contends that the trial court was in error in not allowing his medical record that he tested negative for chlamydia into evidence. The record in question was the result of a chlamydia test performed on him on July 21, 1994. The record was excluded at trial because the trial court found that a proper foundation had not been laid concerning the chain of custody and the protocol followed in collecting the samples. White argues on appeal, however, that a medical record can come in under the business-record exception to the hearsay rule [Ark. R. Evid. 803(6)], and laying a foundation is not required.

We disagree with White’s conclusion. The law governing the foundation required for the introduction of evidence and chain of custody is well established:

Evidentiary matters regarding the admissibility of evidence are left to the sound discretion of the trial court and rulings in this regard will not be reversed absent an abuse of discretion. Hubbard v. State, 306 Ark. 153, 812 S.W.2d 107 (1991). We have consistently agreed that the purpose of establishing a chain of custody is to prevent the introduction of evidence that is not authentic or that has been tampered with. Pryor v. State, 314 Ark. 212, 861 S.W.2d 544 (1993). However, the trial court must be satisfied that, in reasonable probability the evidence has not been tampered with; it is not necessary that the State eliminate every possibility of tampering, (citations omitted).

Harris v. State, 322 Ark. 167, 176, 907 S.W.2d 729, 734 (1995).

We conclude that there was no abuse of discretion in the trial court’s finding that the testimony presented to establish a foundation for White’s independent test was inadequate. Both of the witnesses called by the defense testified that the procedures at the lab were reliable. Yet, neither of the witnesses could testify as to who collected the samples from White and if that person actually followed an established protocol. The sum and substance of the testimony was the trial court could not be assured of how the samples were collected, when they were collected, or even if they were taken from White. Something more must be done to establish the legitimacy of the tests than was done in this case. We have often stated that proof of the chain of custody for interchangeable items like blood must be more conclusive. See, e.g., Crisco v. State, 328 Ark. 388, 943 S.W.2d 582 (1997). The same would hold true for a swabbed sample taken in connection with a chlamydia test.

Furthermore, we agree with the State that any error caused by the exclusion of the medical record was harmless because the evidence of a test conducted on July 21, 1994, was irrelevant.

Here, the relevant dates, as shown at trial, are as follows:

• 'June 19, 1994 date of the sexual intercourse,
• July 11, 1994 the victim tested positive for chlamydia.
• July 12, 1994 White tested positive for chlamydia.
• July 17, 1994 White purchased an antibiotic that could cure chlamydia.
• July 21, 1994 White’s independent test allegedly showed that he tested negative for chlamydia.

Dr. Denman, the State’s expert in pathology, testified that antibiotics could cure chlamydia in as little as two to three days. White’s independent test was conducted on July 21, 1994, four days after purchasing an antibiotic that could cure chlamydia. The fact that he did not have chlamydia on that particular date shed no light on whether he had chlamydia on July 12, 1994.

III. Falsification of Evidence Collateral issue

White next claims that the trial court erred in refusing to allow testimony about a concerted effort to have NE falsify evidence. White and Carol White, his sister-in-law, worked at a pawnshop owned by White’s parents. Carol White was also the grandmother of the victim, NE.

During the direct examination of Chris Fisher, defense counsel elicited testimony that the victim told Fisher that she did not have sex with White and that her grandmother, Carol White, was pressing her to pursue charges against White. Defense counsel later called Carol White as his own witness and asked her leading questions about why she encouraged the victim to press false charges. Specifically, defense counsel asked whether Carol White pursued the charges against White (through NE) “to get Brian White out of the picture.” She denied this and also denied that the charges were instigated by her to “get even” with White’s mother for not giving her the pawn shop. Defense counsel asked Carol White if she had been stealing from the pawn shop where she and White both worked, it being the theory of the defense that Carol White wanted White out of the pawn shop so she could continue stealing. The prosecutor objected to the question on grounds of relevancy and also on grounds that this was a collateral matter. The trial court sustained the objection.

Defense counsel next sought to call Katherine Ann McElroy and Ellen Wadene White (White’s mother) to prove that Carol White wanted the pawn shop, was refused it, and found a way to get even with White’s mother for not giving the pawn shop to her. The trial court, after objection by the prosecutor, refused the testimony.

Our Rules of Evidence provide that extrinsic evidence is not admissible to attack the credibility of a witness. Ark. R. Evid. 608(b). Flowever, if collateral evidence is introduced for the purpose of showing the bias of a witness, it is admissible. Bowden v. State, 297 Ark. 160, 761 S.W.2d 148 (1988); Kellensworth v. State, 275 Ark. 252, 631 S.W.2d 1 (1982).

We view this issue as being whether proof of Carol White’s motives for bringing pressure to bear on NE to institute false charges against White is a proper area for development before the jury. We hold that the trial court did not abuse its discretion in ruling as it did. Defense counsel was allowed to question Carol White about her motives. It was only when the issue of her stealing was raised that the questioning was curtailed. At that point, we agree with the trial court that defense counsel was roaming far afield. Nor do we view these circumstances where encouraging false testimony is alleged as falling within the bias exception.

With respect to extrinsic evidence to impeach Carol White herself, defense counsel attempted to call two witnesses (Katherine Ann McElroy and Ellen Wadene White) to show that Carol White had lied in her answers about wanting the pawn shop and wanting White out of the shop. To call witnesses to show that Carol White had lied about wanting White out of the pawn shop and that that was a motive for pressuring NE to accuse White falsely seems not only collateral but a confusing and convoluted area to explore before the jury. The trial court did not abuse its discretion in refusing this collateral testimony. See Ark. R. Evid. 608(b); Barnes v. State, 287 Ark. 297, 698 S.W.2d 504 (1985).

IV. Prior Felonies

White contends that the trial court erred in allowing the jury to consider during the sentencing phase the fact that he had previously been found guilty of nine other felonies and was, therefore, a habitual offender. The essence of his argument is that he had not been found guilty of the previous crimes because his guilty pleas were withheld or deferred under Act 346 of 1975, the First Offender Act.

The wording of the Habitual Offender Statute is apposite in resolving this issue:

(a) A previous conviction or finding of guilt of a felony may be proved by any evidence that satisfies the trial court beyond a reasonable doubt that the defendant was convicted or found guilty.

Ark. Code Ann. § 5-4-504 (1987) (emphasis ours). Accordingly, if the trial court is convinced beyond a reasonable doubt that a defendant was found guilty of a felony, this may be considered by the jury in sentencing.

During the sentencing phase, but prior to the trial court’s instructing the jury, counsel made their arguments to the trial court as to whether the nine Act 346 sentences should be considered by the jury for habitual offender purposes in light of the fact that the convictions were deferred. The trial court found that there was a finding of guilt by the original trial court, following the guilty pleas for habitual-offender purposes. Indeed, in the Order of Probation, the trial court had determined that the guilty pleas were voluntary and that there was a “factual basis” for the pleas. The State, as a result, urges that this meets the finding-of-guilt requirement under § 5-4-504, because the trial court in the instant case ruled that evidence of prior guilt existed beyond a reasonable doubt.

Though this is the first time that we have confronted this precise issue, we conclude that the trial court’s finding of sufficient evidence of prior guilt in this case for habitual-offender purposes was not clearly erroneous. We affirm the trial court on this point as well.

V. Speedy Trial

For his next point, White contends that his right to a speedy trial under Ark. R. Crim. P. 28.1 was violated. Both parties concede that White was tried more than twelve months after his arrest, and, therefore, the burden is placed on the State to show sufficient excluded periods under Ark. R. Crim. P. 28.3. White was arrested on July 10, 1994, and his trial began on January 22, 1996, for a total of 561 days between arrest and trial.

In meeting its burden, the State lists the following as excluded time periods:

• 14 days — September 19, 1994, to October 3, 1994. Defendant’s failure to appear. Agreed to by both parties.
• 14 days — October 3, 1994, to October 17, 1994. Defendant’s request.
• 14 days — November 21, 1994, to December 5, 1994. Arraignment order with time charged to defendant.
• 12 days - March 3, 1995, to March 15, 1995. Pre-trial order with time charged to defendant.
• 76 days — March 15, 1995, to May 30, 1995. Pre-trial order continuance granted on motion from defendant.
• 48 days — May 30, 1995, to July 17, 1995. Pre-trial order in which time was allotted to defendant to receive mental evaluation.
• 79 days — July 17, 1995, to October 4, 1995. Pre-trial order with time charged to defendant.
• 83 days — October 25, 1995, to January 16, 1996. Order excluding time due to the unavailability of the victim.

This provides a total of 340 excluded days, which is more than sufficient for the State to comply with Rule 28.

The only time period that White appears to preserve for appeal was the continuance allowed for the unavailability of the victim, NE, to testify. On October 24, 1995, the trial court entered an order granting the State a continuance because the victim was unavailable and the State had shown that it had employed due diligence in an effort to obtain the victim as a witness. The trial court stated in its order that the time would be excluded for speedy-trial purposes. White now argues that the time should not have been excluded for two reasons. First, Ark. R. Crim. P. 28.3 only allows time to be excluded when “evidence” is unavailable and a witness is not evidence. In swift fashion, however, White concedes that this proposition is contrary to our current caselaw. See Henson v. State, 38 Ark. App. 155, 832 S,W.2d 269 (1992). See also Meine v. State, 309 Ark. 124, 827 S.W.2d 151 (1992).

Secondly, White contends that the time should not be excluded because the witness was, in fact, available. According to White, the only reason the victim was “unavailable” was that she was pregnant and in a drug rehabilitation program in California. The State responds by emphasizing that defense counsel did not ask for a hearing on this precise question until the day of the trial, almost three months after the order granting the continuance was entered. The trial court refused to revisit its decision that the State had used due diligence to obtain the witness for trial. The trial court correctly applied the due diligence standard. Meine v. State, supra. Hence, there was no abuse of discretion on the part of the trial court in excluding the time attributed to the unavailability of NE.

VI. Inappropriate Testimony

Two comments by witnesses denied him a fair trial, according to White. During her direct testimony, VW, who was 16 years old, testified about her sexual relationship with White when she was 12. She testified that at one point White asked her to convince the victim, NE, to go out for the night and rent a room with him. The State asked the witness what she thought when White asked her to do that. She replied: “He was crazy.” White’s counsel objected, and the trial court overruled the objection. White contends that the trial court’s failure to instruct the jury to disregard the statement constitutes reversible error because the witness was not qualified to give an opinion on his mental state.

We disagree. There is no indication that allowing the testimony of VW without an admonition was an abuse of the trial court’s discretion. See Nooner v. State, supra. There are many things that the witness could have meant by her statement. A conclusion by a teenager that White was “crazy” falls more readily into the category of a non-technical conclusion than a medical opinion. The trial court was in the best position to determine the context and meaning of the statement, and on this point, we will defer to the trial court’s ruling.

White’s second issue relates to the direct examination of Rachel White, who testified that after charges were filed against White, his parents evicted her from a house they owned. The prosecutor asked her if she knew why she was evicted by White’s father. She replied: “Because his son raped my niece.” White objected and asked for a declaration of a mistrial. The motion was denied. White then asked the trial court to admonish the jury to disregard the statement, which the trial court did. White now contends that the statement by Rachel was so prejudicial that only a mistrial could have remedied the prejudice.

We have often stated that a mistrial is such an extreme remedy that it should not be declared unless there has been error “so prejudicial that justice cannot be served by continuing the trial or when the fundamental fairness of the trial itself has been manifestly affected.” See, e.g., Puckett v. State, 324 Ark. 81, 89, 918 S.W.2d. 707, 711 (1996). A trial court’s discretion to grant or deny a mistrial will not be disturbed absent a showing of an abuse of discretion, and a motion for declaration of a mistrial should only be granted when an admonition to the jury would be ineffective. Id. We have also held that an admonition can cure any possible prejudice resulting from prosecutorial misconduct. See, e.g., Sullinger v. State, 310 Ark. 690, 840 S.W.2d 797 (1992); Porter v. State, 308 Ark. 137, 823 S.W.2d 846 (1992).

We conclude that the prosecutor did not ask the question in bad faith. But even if the prosecutor’s question was inappropriate, the trial court’s admonishment cured any semblance of prejudice. There was no abuse of discretion in denying the mistrial motion.

Affirmed.

Corbin, J., not participating.

       Though the age of both the victim and Rachel White was 12, Rachel White was indeed the aunt of the victim.

       The judge was the same person in both instances.