author: Donald L. Corbin, Justice. Annabelle Clinton Imber, Justice, Donald L. Corbin, Justice.

text:
    Alton Levern BRUNSON v. STATE of Arkansas
    CR 96-826
    940 S.W.2d 440
    Supreme Court of Arkansas
    Opinion delivered March 17, 1997
    [Supplemental Opinion on Denial of Rehearing delivered May 5, 1997.]

      William R. Simpson, Jr., Public Defender, by: Kent C. Krause, Deputy Public Defender, for appellant.

      Winston Bryant, Att’y Gen., by: J. Brent Standridge, Asst. Att’y Gen., for appellee.
   Donald L. Corbin, Justice.

We granted the State’s petition to review the decision of the court of appeals in this case where the sole issue is whether the odor of marijuana or the smell of marijuana smoke emanating from a legally stopped vehicle constitutes probable cause to search the occupants. The trial court ruled that probable cause existed, convicted Appellant Alton Levern Brunson of one count of possession of a controlled substance, fined him $250, imposed court costs, and sentenced him to five years’ probation. The court of appeals reversed, holding there was no probable cause to conduct the warrantless search of Appellant’s person. Brunson v. State, 54 Ark. App. 248, 925 S.W.2d 434 (1996). After granting a petition for review following a decision by the court of appeals, we review the case as though the appeal was originally filed with this court. Mullinax v. State, 327 Ark. 41, 938 S.W.2d 801 (1997); Allen v. State, 326 Ark. 541, 932 S.W.2d 764 (1996). Upon our review, we conclude the trial court did not err in denying Appellant’s motion to suppress and therefore affirm the judgment of conviction.

Appellant was charged by information with one count of felony possession of cocaine and one count of misdemeanor possession of marijuana. He moved to suppress the evidence obtained from the search of his person on the bases that he was searched without a warrant, without benefit of reasonable suspicion that he was armed and dangerous, and without probable cause to believe that he had committed a felony. After a bench trial, the trial court denied the motion to suppress. Upon his conviction, the misdemeanor was merged with the felony.

In reviewing the denial of a motion to suppress evidence, we make an independent examination based upon the totality of the circumstances and reverse only if the decision is clearly against the preponderance of the evidence. Mullinax, 327 Ark. 41, 938 S.W.2d 801; Crail v. State, 309 Ark. 120, 827 S.W.2d 157 (1992). We view the facts in the light most favorable to the State. Id.

Appellant does not dispute that the vehicle in which he was a passenger was legally stopped for violation of a raucous noise ordinance in North Litde Rock, Arkansas, on March 19, 1994, at approximately 1:30 in the morning. Detective John Breckon, of the North Little Rock Police Department, testified that as he approached the driver’s side of the vehicle, he smelled an odor of marijuana coming from the vehicle; on cross-examination, he stated he smelled marijuana smoke. He stated that he had all four occupants step out of the vehicle and that, because of the smell, all four occupants were searched. Detective Breckon testified that he performed a pat-down search of Appellant, who was in the rear passenger seat of the vehicle, and found a small quantity of marijuana and a package of cigarette rolling papers in his left front pants pocket. After arresting Appellant, Detective Breckon stated that he continued searching Appellant and found two rocks of cocaine in the cargo pocket of his left leg.

Appellant’s sole point of error on appeal is the legality of the search of his person. He does not challenge the stop itself or the qualifications of the officer to identify the odor of marijuana or its smoke. Rather, he contends that the smell of marijuana or its smoke emanating from the vehicle alone did not justify the search of his person. We simply do not agree and find Appellant’s argument to be wholly without merit.

The same standards govern reasonable cause or probable cause determinations, regardless of whether the question is the validity of an arrest or the validity of a search and seizure. Hudson v. State, 316 Ark. 360, 872 S.W.2d 68 (1994). The determination of probable cause is to be based on the factual and practical considerations of everyday fife upon which reasonable and prudent persons act. Id. In assessing the existence of probable cause, our review is liberal rather than strict. Id.

With reasonable cause to believe that an offense has been or is being committed in the officer’s presence, an officer may make an arrest without a warrant pursuant to A.R.Cr.P. Rule 4.1 (a) (iii) - There is no doubt that, after having stopped the vehicle at 1:30 a.m. for playing music so loudly it violated a city ordinance, upon smelling the marijuana or its smoke emanating from the vehicle, Detective Breckon had probable cause to believe that an offense had been or was being committed in his presence. Quite simply, the smell of the marijuana or its smoke emanating from a vehicle constitutes facts and circumstances sufficient to warrant a person of reasonable caution to believe that a controlled substance has been or is being possessed or delivered or both, and, thus, that a violation of law has occurred or is occurring.

Courts in this state have held that the smell of marijuana or its smoke emanating from a vehicle gives rise to reasonable suspicion to detain the occupants to determine the lawfulness of their conduct, Phillips v. State, 53 Ark. App. 36, 918 S.W.2d 721 (1996), to search the vehicle, Lopez v. State, 29 Ark. App. 145, 778 S.W.2d 641 (1989) (citing Gordon v. State, 259 Ark. 134, 529 S.W.2d 330 (1976), cert. denied, 434 U.S. 929 (1977)), and to arrest some or all of its occupants, depending upon the particular circumstances, Crail, 309 Ark. 120, 827 S.W.2d 157.

In the present case, the smell of the marijuana or its smoke emanating from the vehicle gave Detective Breckon reasonable cause to believe an offense had been or was currendy being committed inside the enclosed space of the vehicle. He thus had probable cause to arrest the occupants of the vehicle consistent with Rule 4.1 (a) (iii). We are not persuaded by Appellant’s argument that an individualized suspicion or cause is required to arrest each occupant under the facts and circumstances presented in this case. Such an argument would lead to the illogical conclusion that none of the four occupants could have been arrested even though the smell of marijuana or its smoke was emanating from the enclosed space of the vehicle where all four occupants were present.

Once an officer has made a lawful arrest, he may, without a warrant, search the person to obtain evidence of the commission of the offense or to seize contraband pursuant to A.R.Cr.P. Rule 12.1(d). A search is valid as incident to a lawful arrest even if it is conducted before the arrest, provided that the arrest and search are substantially contemporaneous and that there was probable cause to arrest prior to the search. Rawlings v. Kentucky, 448 U.S. 98 (1980); Horton v. State, 262 Ark. 211, 555 S.W.2d 226 (1977). Here, the smell of marijuana or its smoke emanating from the vehicle constituted probable cause to arrest the occupants, and, according to Detective Breckon’s testimony, the smell existed prior to the search. The search and the arrest were substantially contemporaneous as Detective Breckon testified he conducted a pat-down search of Appellant, found the marijuana, arrested Appellant, and then continued to search him following the arrest.

Under the totality of the circumstances, we conclude the warrandess search of Appellant’s person was reasonable. Accordingly, we cannot conclude the trial court erred in denying Appellant’s motion to suppress. In making this conclusion, we have balanced the public interest of officer safety against Appellant’s right to personal security free from arbitrary interference by law officers. Maryland v. Wilson, _ U.S. _, 117 S.Ct. 882 (No. 95-1268, February 19, 1997).

Initially, we are concerned with the circumstances. This case involves a moveable vehicle. It was early in the morning when the vehicle was stopped, 1:30 a.m. The four occupants were riding and listening to music played so loudly that it was in violation of a city ordinance. When the vehicle was stopped, the officer smelled marijuana or its smoke emanating from the confined and enclosed space of the vehicle. The odor constituted probable cause to believe an offense was committed or being committed under the Controlled Substances Act. The pat-down search was incident to the arrest.

On the private-interest side, we note that the search was a pat-down search conducted contemporaneously with an arrest based on probable cause. Accordingly, this was not an arbitrary interference with Appellant’s personal security interest.

On the public-interest side is officer safety. There were four occupants in this vehicle. Because the danger to an officer during a traffic stop is likely to be greater when there are passengers in addition to the driver of the stopped car, an officer making a traffic stop may order passengers to get out of the car pending the completion of the stop. Wilson,_U.S. __, 117 S.Ct. 882 (No. 95-1268, February 19, 1997). On these facts, there was no need for further detention to complete the stop because the smell of marijuana or its smoke emanating from the vehicle constituted probable cause to arrest the occupants. See Wilson, n.3 (slip opinion at page 6, n.3). As cited by the Court in Wilson, eleven officers were killed and 5,762 were assaulted during traffic stops in 1994 according to an FBI report; the risk of harm to an officer increases when there is more than one occupant of the vehicle. Wilson (slip opinion at page 4). Contrary to Appellant’s assertions, Officer Breckon did not testify that he was not concerned about weapons or his safety. No evidence to that effect was ever introduced, nor were any questions on the subject of weapons or officer safety ever posed by either side. Accordingly, we conclude that the balance weighs in favor of the public interest and that the search was reasonable.

We are not unmindful of Appellant’s arguments concerning, and the court of appeals’ interpretation of, A.R.Cr.P. Rule 14.1. There is no evidence, however, that the vehicle was searched in this case, and we have not analyzed the search of Appellant’s person as being incident to a vehicular search. Even assuming arguendo that we did so analyze the search, we would be hesitant to interpret Rule 14.1 as narrowly as did the court of appeals. Such an interpretation would require officers to turn their backs on the occupants to search the vehicle before ever patting-down the occupants for weapons and would be in total disregard of the officer’s safety. Rather, upon presentation of appropriate facts, we might consider an interpretation of Rule 14.1(b) upholding the search of an individual’s person contemporaneously with the search of a vehicle — an interpretation that is analogous to our law on searches contemporaneous with arrests.

The judgment of conviction is affirmed.

Imber, J., concurs.

Newbern, J., dissents.

Annabelle Clinton Imber, Justice,

concurring. I agree with the majority that, based on the particular facts of this case, Detective Breckon had reasonable cause to believe that an offense had occurred, justifying a pat-down search of the appellant incident to his arrest. However, I disagree with the majority’s reliance on Wilson v. Maryland, _ U.S. _, 117 S.Ct. 882 (No. 95-1268, February 19, 1997), to justify the reasonableness of the search.

In Wilson the United States Supreme Court held that a police officer may order the passengers of a lawfully-stopped car to exit the vehicle. There, the defendant was a passenger in a lawfully-stopped automobile. The investigating officer ordered the defendant, who was sweating and appeared extremely nervous, out of the vehicle. When the defendant exited the car, an amount of crack cocaine fell out of the vehicle and onto the ground. The defendant was subsequently charged with possession of cocaine with intent to distribute.

The Wilson Court extended to passengers the rule articulated in Pennsylvania v. Mimms, 434 U.S. 106 (1977), that a police officer may order the driver of a lawfully-stopped vehicle to exit the car. There, the Court balanced the public and private interests in determining the reasonableness of the intrusion, deeming the additional intrusion of stepping outside of the vehicle de minimis. In Wilson, the Court likewise balanced the public and private interests, noting in particular legitimate concerns about officer safety in traffic stops when there are passengers inside the vehicle. While the considerations for ordering a passenger to exit were not as strong as those for the driver, “the additional intrusion on the passenger is minimal.” Maryland v. Wilson, supra.

Returning to the present case, there is no doubt that Maryland v. Wilson would provide a justification for ordering Brunson out of the vehicle. However, as noted by the majority, there was no evidence that Detective Breckon was concerned about personal safety. He simply smelled marijuana or smoke emanating from the vehicle, giving him probable cause to believe that an offense had been committed. Thus, the search in this case was reasonable because it was incident to his lawful arrest. See Ark. R. Crim. P. 12.1(d).

David Newbern, Justice, dissenting. The unconstitutionality of the search of Alton Levern Brunson and the subsequent error in admitting evidence found in the search were explained very well in the Court of Appeals opinion, Brunson v. State, 54 Ark. App. 248, 925 S.W.2d 434 (1996), and need not be explained again.

The majority of this Court concludes the search was proper because it was incident to an arrest. It relies on Ark. R. Crim. P. 4.1 (a)(iii) to justify the arrest. The rule provides:

(a) A law enforcement officer may arrest a person without a warrant if the officer has reasonable cause to believe that such person has committed
(iii) any violation of law in the officer’s presence; . . .

There was no “reasonable cause” to search Mr. Brunson until after the search had turned up marijuana on his person. In an attempt to apply the rule allowing a search incident to arrest, the majority says, “The search and the arrest were substantially contemporaneous as Detective Breckon testified he conducted a pat-down search of Appellant, found the marijuana, arrested Appellant, and then continued to search him following the arrest.” Clearly, the search commenced prior to any arrest, and the arrest was the result of the search.

Rawlings v. Kentucky, 448 U.S. 98 (1980), and Horton v. State, 262 Ark. 211, 555 S.W.2d 226 (1977), are cited by the majority for the proposition that a search prior to arrest is proper if there is probable cause to arrest prior to the search. The majority does not say what the probable cause for arresting Mr. Brunson may have been.

After expressing the legitimate general concern with respect to the safety of officers making traffic stops, the majority opinion states,

Contrary to Appellant’s assertions, Officer Breckon did not testify that he was not concerned about weapons or his safety. No evidence to that effect was ever introduced, nor were any questions on the subject of weapons or officer safety ever posed by either side. Accordingly, we conclude that the balance weighs in favor of the public interest and that the search was reasonable.

The implication is that a lack of evidence that an officer feared for his safety outweighs a citizen’s right under the Fourth Amendment to the United States Constitution to be free of an unreasonable search. That is a remarkable conclusion.

Also remarkable is the majority’s statement that it would be illogical to say none of four occupants of the vehicle could be arrested even though a marijuana smell came from the car. That suggests that when an officer reasonably suspects a crime has been committed by someone in a vehicle, all of the occupants of the vehicle may be arrested and searched. It is reminiscent of the opinion by Justice George Rose Smith in Catt v. State, 691 S.W.2d 120, delivered April 1, 1995, which appeared in the Arkansas Advance Reports at 285 Ark. 334, but which, sadly, did not make it into the bound volume. There, Justice Smith wrote to affirm the convictions of twin brothers, tried jointly, because an officer identified one of them, or someone who looked enough like him to be his twin brother, as having sold the officer cocaine. Justice Smith wrote, “We have no alternative except to hold that each verdict is supported by Officer Javert’s unshaken identification of the culprit, no matter who he was.”

May 5, 1997

William R. Simpson, Jr., Public Defender, by: Kent C. Krause, Deputy Public Defender, for appellant.

Winston Bryant, Att’y Gen., by: Vada Berger, Asst. Att’y Gen., for appellee.

My appreciation of the literary value of Catt v. State, supra, which has been cited as far away as Delaware, see The [Wilmington] News Journal, p. B4, April 12, 1996], is so strong that I could never agree to overrule it. The logic espoused in support of the Catt brothers’ convictions should not, however, be extended to the search and the arrest of Mr. Brunson.

I respectfully dissent.

SUPPLEMENTAL OPINION ON DENIAL OF REHEARING

CR 96-826

940 S.W.2d 440

Petition for Review from the Arkansas Court of Appeals.

Donald L. Corbin, Justice.

Our decision in this case affirming the trial court was delivered on March 17, 1997. Appellant filed a petition for rehearing, which was submitted to us on April 14, 1997. In his petition, Appellant asserted that Officer Breckon lacked probable cause to arrest him and that our reliance on Maryland v. Wilson,_U.S._, 117 S. Ct. 882 (1997) was misplaced. In its response, Appellee agreed with Appellant that our reliance on Wilson was misplaced, but nonetheless contended that there was probable cause to arrest Appellant. Because we agree with Appellee, we deny rehearing of this case and issue this supplemental opinion for the purpose of correcting our error.

Although we viewed our citation to Wilson as merely collateral, rather than controlling authority, we supplement our decision to clarify our position. We agree with both parties that our reference to the balancing test provided in Wilson may have been misplaced. Nonetheless, we view our inclusion of that test as extraneous, and we affirm the trial court on the ground that the search of Appellant was valid as incident to his lawful arrest.


source: Caselaw Access Project

author: Donald L. Corbin, Justice. M. Edward Morgan, Special Justice,

license: Public Domain

text:
    Joy PUGH, Individually and as Administratrix of the Estate of John Pugh v. Ronald L. GRIGGS and Stephen R. Crane
    96-402
    940 S.W.2d 445
    Supreme Court of Arkansas
    Opinion delivered March 17, 1997
    [Petition for rehearing denied April 28, 1997.]

      Steven R. Smith, for appellant.

      R. Gary Nutter, for appellees.

       Special Justice M. Edward Morgan would grant. Newbern, J., not participating.

   Donald L. Corbin, Justice.

This is an appeal from the order of the Union County Circuit Court granting summary judgment on the issue of attorney malpractice to Appellees Ronald L. Griggs and Stephen R. Crane and denying summary judgment on the issue of liability to Appellant Joy Pugh. As this appeal involves a question concerning the law of torts, jurisdiction is proper in this court. Ark. Sup. Ct. R. l-2(a)(16) (as amended by per curiam July 15, 1996). On appeal, Appellant argues that the trial court erred in granting Appellees’ motion for summary judgment as there were issues of material fact yet to be decided and that the trial court also erred in denying her motion for summary judgment. For the reasons outlined below, we affirm the trial court’s judgment.

I. Facts and Procedural History

We have discerned the following facts from the pleadings and affidavits filed with the trial court. Appellant entered into a contract with Appellee Griggs on June 21, 1985, in which Griggs agreed to represent Appellant in her claim for damages, wrongful death, and medical malpractice for the death of her husband John Pugh. Thereafter, Appellee Griggs associated with Appellee Crane in the prosecution of Appellant’s claim. Appellees continually represented Appellant through January 27, 1992.

On May 21, 1987, Appellees sent notice of intent to sue to the medical defendants, including Warner Brown Hospital and two doctors, James Weedman and Durwood Flournoy. On July 29, 1987, Appellees filed Appellant’s suit against the medical defendants alleging negligence in the treatment of Appellant’s husband, resulting in his death. The negligent acts complained of occurred on or about May 26, 1985. On September 29, 1989, Appellant, on the advice of Appellees, took a voluntary nonsuit.

On September 24, 1990, Appellees served the medical defendants with notice of intent to sue, pursuant to Ark. Code Ann. § 16-114-204 (1987) (repealed 1995). On November 29, 1990, Appellees refiled Appellant’s complaint. The medical defendants moved for summary judgment on December 19, 1990, alleging that Appellant’s action was barred by the one-year statute of limitations for filing a claim after nonsuit as provided in Ark. Code Ann. § 16-56-126 (1987). The motion was denied.

On February 25, 1993, approximately one year after Appellees had withdrawn from Appellant’s case, the medical defendants filed a motion for reconsideration of summary judgment. This time the .trial court granted the motion, applying this court’s holding in Weidrick v. Arnold, 310 Ark. 138, 835 S.W.2d 843 (1992), which overruled Jackson v. Ozment, 283 Ark. 100, 671 S.W.2d 736 (1984), and held that ARCP Rule 3 was in direct conflict with, and thus superseded, the requirement of notice of intent to sue in medical injury cases as provided in section 16-114-204. Appellant appealed the trial court’s grant of summary judgment and this court affirmed. See Pugh v. St. Paul Fire & Marine Ins. Co., 317 Ark. 304, 877 S.W.2d 577 (1994) (“Pugh I”).

Subsequent to this court’s ruling in Pugh I, Appellant initiated the current litigation by filing a complaint against Appellees alleging that they were negligent in failing to prosecute the first medical malpractice lawsuit, which resulted in a nonsuit, and in failing to timely refile her complaint within the one-year time period allowed for refiling a claim after a nonsuit pursuant to section 16-56-126. Appellees filed a motion for summary judgment on both allegations. The trial court granted Appellees’ motion. As to the first allegation of negligence, the trial court reasoned that the decision to take a nonsuit was a discretionary one and that it would defer to Appellees’judgment call on that issue. As for the allegation that Appellees failed to timely file the complaint after taking the nonsuit, the trial court found that Appellees exercised reasonable skill and diligence on behalf of their client and that the question of whether the one-year period provided for in section 16-56-126 was extended in medical malpractice cases, in which notice must first be given before suit is filed, was not settled law. Additionally, the trial court denied Appellant’s motion for summary judgment on the issue of Appellees’ liability for professional negligence. This appeal followed.

II. Summary Judgment

Summary judgment is to be granted by a trial court only 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. Tyson Foods, Inc. v. Adams, 326 Ark. 300, 930 S.W.2d 374 (1996); Cherepski v. Walker, 323 Ark. 43, 913 S.W.2d 761 (1996). 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 máterial issue of fact. Anthony v. Kaplan, 324 Ark. 52, 918 S.W.2d 174 (1996). On review, this court determines if summary judgment was appropriate based on whether the evidentiary items presented by the moving party in support of the motion leave a material question of fact unanswered. Tyson Foods, Inc., 326 Ark. 300, 930 S.W.2d 374. 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. Cherepski, 323 Ark. 43, 913 S.W.2d 761. The granting of summary judgment may be appropriate in a legal malpractice suit. Tyson Foods, Inc., 326 Ark. 300, 930 S.W.2d 374; Anthony, 324 Ark. 52, 918 S.W.2d 174.

An attorney is negligent if he or she fails to exercise reasonable diligence and skill on behalf of the client. Schmidt v. Pearson, Evans, and Chadwick, 326 Ark. 499, 931 S.W.2d 774 (1996). In order to prevail on a claim of legal malpractice, a plaintiff must prove that the attorney’s conduct fell below the generally accepted standard of practice and that such conduct proximately caused the plaintiff damages. Id. In order to show damages and proximate cause, the plaintiff must show that but for the alleged negligence of the attorney, the result in the underlying action would have been different. Id. An attorney is not liable to a client when, acting in good faith, he or she makes mere errors of judgment. Id. Moreover, attorneys are not, as a matter of law, liable for a mistaken opinion on a point of law that has not been settled by a court of highest jurisdiction and on which reasonable attorneys may differ. Id.

Appellant argues on appeal that the trial court erred in granting summary judgment to Appellees because there were issues of material fact left unresolved. The trial court ruled that Appellees exercised reasonable skill and diligence on behalf of their client and, thus, it did not reach the issues of proximate cause and damages. We discuss each allegation of negligence separately.

A. Negligence in Prosecution of First Lawsuit

Appellant initially argues that the trial court erred in granting the motion for summary judgment on the issue of Appellees’ alleged negligent prosecution of the first lawsuit, which resulted in a voluntary nonsuit. Appellant asserts that Appellees’ lack of preparation of the case left her no choice but to agree to a nonsuit. Appellant challenges the trial court’s deference to Appellees’ legal judgment in electing to take a nonsuit without looking beyond counsels’ decision to the facts leading up to that decision. Appellees maintain that ARCP Rule 41 provides an absolute right to a voluntary dismissal and that Appellant consented to taking the nonsuit.

The trial court ruled that it was within Appellees’ discretion as counsel for Appellant to take a voluntary nonsuit and that such decisions were frequently made by attorneys. The trial court stated:

Cases are dismissed for any number of reasons and as counsel has been given such discretion [pursuant to ARCP Rule 41], I’m not going to look behind that dismissal at this point and make a determination as to whether or not their development of the case up until that time was proper or improper. I think I must defer to counsel’s judgment call on the case as it existed with the facts and issues known to counsel at the time.

We hold that it was not error for the trial court to defer to Appellees’ decision to seek a voluntary dismissal or non-suit of Appellant’s case, as such matters were within counsel’s discretion. Rule 41(a) clearly allows a plaintiff to nonsuit a claim, and this court has recognized that the rule creates an absolute right to a nonsuit. Whetstone v. Chadduck, 316 Ark. 330, 871 S.W.2d 583 (1994); Jenkins v. Goldsby, 307 Ark. 558, 822 S.W.2d 842 (1992). Appellant does not claim that the nonsuit was taken without her consent or that she did not understand the concept of taking a nonsuit. Additionally, we conclude that by continuing her retainment of Appellees as her attorneys well into the filing of the second complaint, Appellant effectively waived any claim she may have had against Appellees for any alleged negligence committed in the prosecution of the first suit.

B. Negligence in Failing to Timely Refile Case after Nonsuit

Appellant also argues that Appellees were negligent in fading to timely refile her lawsuit within the one-year period provided for in section 16-56-126. Appellant contends that there are remaining issues of material fact concerning Appellees’ reliance on existing law in effect in 1990. In support of this contention, Appellant relies on a letter written by Appellee Griggs to Appellee Crane on September 21, 1990, and an office memo completed by a member of Appellee Crane’s staff on December 20, 1990. The letter states in pertinent part:

The last day to file this matter [Pugh v. Flournoy, et al.] is 28 September 1990. I have not had a chance to check on whether or not we have to give a notice of intent to sue prior to filing or whether or not we simply file a lawsuit after a non-suit.

The memo to Appellee Crane from a member of his staff reads in pertinent part:

On this date I did some research on Joy Pugh. The following appears to be the law. According to the statute, you have one year after taking a non-suit to commence a new action. The notice provision for malpractice cases is strictly construed. The notice provision for malpractice cases is required to be filed after a non-suit. If you are unable to comply with the notice provisions within the prescription period, then the period of time to commence your lawsuit is extended by 70 days. We did file the lawsuit between 60 and 70 days after the notice. Therefore, the summary judgment motion is not applicable.

Appellant contends that these two documents are evidence of Appellees’ lack of knowledge of the law regarding refiling of a medical malpractice claim after nonsuit rather than their alleged good-faith reliance on existing law. In addition, she argues that it should have been clear to Appellees that pursuant to section 16-114-204, notice of intent to sue for medical injury was required after taking a nonsuit, but that pursuant to section 16-56-126 a new action had to be commenced within one year from the date of taking a nonsuit notwithstanding the notice requirement.

At the time Appellant’s claim was refiled, section 16 — 114— 204(b) provided:

If the notice is served within sixty (60) days of the expiration of the period for bringing suit described in § 16-114-203, the time for commencement of the action shall be extended seventy (70) days from the service of the notice.

Section 16-56-126 provides in pertinent part:

If any action is commenced within the time respectively prescribed in this act, in §§ 16-116-101 — 16-116-107, in §§ 16-114-201 — 16-114-209, or in any other act, and the plaintiff therein suffers a nonsuit, or after a verdict for him the judgment is arrested, or after judgment for him the judgment is reversed on appeal or writ of error, the plaintiff may commence a new action within one (1) year after the nonsuit suffered or judgment arrested or reversed.

Appellees maintain that they acted in good faith pursuant to the relevant law in existence at the time they refiled the medical negligence lawsuit and that because they followed the existing law, they were not negligent in failing to timely refile Appellant’s complaint. Appellees rely on this court’s holdings in Ofili v. Osco Drug, Inc., 300 Ark. 431, 780 S.W.2d 11 (1989), Dawson v. Gerritsen, 290 Ark. 499, 720 S.W.2d 714 (1986), Jackson, 283 Ark. 100, 671 S.W.2d 736, Simpson v. Fuller, 281 Ark. 471, 665 S.W.2d 269 (1984), and Gay v. Rabon, 280 Ark. 5, 652 S.W.2d 836 (1983). Although none of those cases directly supports Appellees’ position that the seventy-day extension of the limitations period provided in section 16-114-204(b) applied to the one-year period provided for filing a claim after taking a nonsuit, this court had not had the opportunity to address the issue until the first appeal of Appellant’s case.

In Pugh I, 317 Ark. 304, 877 S.W.2d 577, this court held that under the wording of the statute, the extension period found in section 16-114-204(b) applied only to the two-year limitation in section 16-114-203 and that the savings statute for refiling a claim after nonsuit is not mentioned in section 16-114-204(b). Similarly, this court noted that the savings statute makes reference to the medical malpractice act but expressly states a one-year limitation and does not mention any time period of extension. Without resorting to the rules of statutory construction or looking to the intent of the General Assembly, this court stated that the plain language of section 16-56-126 does not include the addition of the extension of time provided for in section 16-114-204(b). Based upon this construction of the two statutes, this court concluded that Appellant’s medical malpractice claim was barred by the statute of limitations.

Appellant contends that the holding in Pugh I supports her argument that the law on the issue of the time allowed in which to refile a complaint after taking a nonsuit was well settled, and that the Appellees were negligent in failing to timely refile her lawsuit. Appellees maintain that the law was not settled until this court rendered its decision in Pugh I and that, therefore, they should not be held accountable for a mistaken opinion of an unsettled question of law. We agree with Appellees.

As noted above, this court recently held in Schmidt, 326 Ark. 499, 931 S.W.2d 774, that as a matter of law, attorneys are not Hable for a mistaken opinion on a point of law that has not been settled by this court and on which reasonable attorneys may differ. Accordingly, while we may not approve of Appellees’ lack of due diligence in the handling of Appellant’s cases, because this area of the law was not settled and had not even been addressed by this court until the decision in Pugh I, we conclude that the trial court’s grant of summary judgment was proper and that Appellees were entitled to judgment on this issue as a matter of law.

III. Denial of Summary Judgment

Lastly, Appellant argues that it was error for the trial court to deny her motion for summary judgment on the issue of Appellees’ liability for the alleged negligent handling of Appellant’s medical malpractice cases. We decline to address this argument as this court has repeatedly held that the denial of a motion for summary judgment is not reviewable on appeal. See, e.g., Ball v. Foehner, 326 Ark. 409, 931 S.W.2d 142 (1996); Nucor Holding Corp. v. Rinkines, 326 Ark. 217, 931 S.W.2d 426 (1996). Moreover, in this particular case, we have, to a certain extent, already addressed the merits of this argument by addressing the trial court’s grant of summary judgment in favor of Appellees on the issue of professional negligence.

Affirmed.

Special Justice M. Edward Morgan dissents.

Newbern, J., not participating.

M. Edward Morgan, Special Justice,

dissenting. I disagree with that part of the majority opinion that affirms the trial court’s granting summary judgment in favor of Appellees on the issue of negligence in failing to timely refile the case after nonsuit was taken. The Appellant entered into a contract with Appellee Griggs on June 21, 1985, to represent her in her claim for damages, wrongful death, and malpractice, resulting in her husband’s death. Appellee Griggs associated with Appellee Crane to assist him in prosecuting this case. During the period of time from July 29, 1987, the date in which the original complaint was filed on behalf of the Appellant and the nonsuit of September 29, 1989, the only discovery the Appellees initiated was a set of Request for Production of Documents, submitted on September 21, 1988. The Appellees took no depositions and propounded no Interrogatories or Requests for Admission to Defendants. The case was set for trial on October 23, 1989, and the Appellant, on advise of Appellees, took a nonsuit.

The record reflects that the Appellees waited until September 21, 1990, five days prior to the expiration of the statute of limitations to review whether the “notice of intent” requirement to sue in the medical malpractice was applicable when a nonsuit had been taken. The letter states in pertinent part:

The last day to file this matter, [Pugh v. Flournoy, et al.] is 28 September 1990. I have not had a chance to check on whether or not we have to give a notice of intent to sue prior to filing or whether or not we simply file a lawsuit after a non-suit.

It appears from the record that this issue was not researched until a memo from a staff member on December 20, 1990, was provided as summarized in the majority’s opinion.

Summary judgment is an extreme remedy, and should be granted only when there are no genuine issues of material fact left to be determined and when the case can be decided as a matter of law, Cherepski v. Walker, 323 Ark. 43, 913 S.W.2d 761 (1996). On appellate review, this court determines if granting summary judgment was appropriate based on whether the evidentiary items presented by the moving party in support of the motion leave a material question of fact unanswered. Knowlton v. Ward, 318 Ark 867, 889 S.W.2d 721 (1994).

The letter from Appellee Griggs to Appellee Crane, dated September 21, 1990, a mere five days prior to the statute oflimitations expiring on the nonsuit, demonstrates that no previous effort was made by the Appellees to determine whether the notice of intent to sue was required before the malpractice case could be refilled. This appears to be reaffirmed by the Appellee Griggs’s staff memo of December 20, 1990. The September 21, 1990 letter, memo, and lack of basic discovery by the Appellees leaves a question of fact of whether the Appellees exercised reasonable skills and diligence on behalf of their clients while they were entrusted to prosecute this claim.

The standard of review for summary of judgment is whether the evidentiary items presented by the moving party in support of the motion leave a question of material fact unanswered, and if not, whether the moving party is entided to a summary judgment as a matter of law. All proof is viewed in the light most favorable to the party opposing the motion, and all doubts and inferences are resolved against the moving party. McCaskill v. Fort Smith Pub. Sch. Dist., 324 Ark. 488, 921 S.W.2d 945 (1996).

From review of the record, there were no evidentiary items presented in affidavits, discovery, or depositions in support of summary judgment that this area of law was unsettled and reasonable attorneys may differ.

In Pugh v. St. Paul Fire & Marine Ins. Co., 317 Ark. 304, 877 S.W.2d 577 (1994), this court in an unanimous decision, had no difficulty in finding the statute relied on by Appellees was clearly not applicable, and the Weidrick v. Arnold, 310 Ark. 138, 835 S.W.2d 843 (1992), change in the law did not apply. Based upon the rules set out in which all proof is to be viewed in the light most favorable to the party opposing the motion and all doubts and inferences are resolved against the moving party, the Appellant should be given her opportunity to present her cause of action to a jury and have her day in court.

I would reverse the majority’s opinion in part and remand the case for further proceedings.

       Although in Pugh I this court referred to a ninety-day extension period found in section 16-114-204(b), the time period provided in that section at the time Appellant’s claim was refiled in November 1990, was actually seventy days. The time period was subsequently expanded to ninety days by the General Assembly in 1991. See 1991 Ark. Acts 346. We note, however, that the reference to the ninety-day time period in Pugh I does not affect the outcome of that case.


author: Robert L. Brown, Justice.

text:
    Roger BARKER, Patty MacDonald and Malcolm MacDonald, On Behalf of Themselves and All of the Citizens, Residents, Taxpayers, Inhabitants, and Owners of Real Property in Fountain Lake School District No. 18 in Saline County, Arkansas v. Flenry FRANK, In His Official Capacity as President and Member of the Board of Education of Fountain Lake School District No. 18; Ron Koller, In His Official Capacity as a Member of the Board of Education of Fountain Lake School District No. 18; Eddie Culpepper, In His Official Capacity as a Member of the Board of Education of Fountain Lake School District No. 18; Tim Culbreth, In His Official Capacity as a Member of the Board of Education of Fountain Lake School District No. 18; Phil Mariage, In His Official Capacity as a Member of the Board of Education of Fountain Lake School District No. 18; Charles Clark, In His Official Capacity as Superintendant of Fountain Lake School District No. 18; Freddie Barton, In His Official Capacity as Saline County Clerk; and Nancy Elrod, In Her Official Capacity as Saline County Collector
    96-305
    939 S.W.2d 837
    Supreme Court of Arkansas
    Opinion delivered March 17, 1997

      Gill Law Firm, P.A., by: Glenn E. Kelley and C. Tad Bohannon, for appellants.

      Laser, Wilson, Bujford & Watts, P.A., by: Dan F. Bufford; and Nichols, Wolff, Ledbetter & Campbell, P.A., by: Mark W. Nichols, for appellees Frank, Roller, Culpepper, Culbreth, Mariage, and Clark.
   Robert L. Brown, Justice.

Appellants Roger Barker, Patty MacDonald, and Malcolm MacDonald (hereinafter referred to as “taxpayers”) own real property in Saline County and reside within Fountain Lake School District #18, which includes part of Saline County and part of Garland County. The appellees are members of the Board of Fountain Lake School District #18, the County Clerk of Saline County, and the County Collector of Saline County.

The complaint filed by the taxpayers against the appellees alleged that in July 1993 the State Assessment Coordination Division advised the Saline County Judge that the preliminary ratio of the assessed value of real property to actual value of the real property had fallen below 18 percent and that the state turnback funds to the county were in jeopardy. To cure this problem, reappraisal of land located in Saline County was suggested, and a reappraisal was done. In August 1994, the Saline County Equalization Board received the results of the reappraisal, which showed that the aggregate value of taxable real property in the school district for 1994 had increased 28.8% over that in 1993.

At the core of the taxpayers’ complaint is their assertion that the collection of the 1994 school district tax constitutes an illegal exaction because of the reappraisal and the failure of the school district to roll back taxes. This is so, they allege, because the school district stands to receive revenues exceeding by more than 10% those received in 1993, which violates the specific requirements of Amendment 59 of the Arkansas Constitution. The taxpayers assert that because the aggregate value of taxable real and personal property itself eclipsed 1993 by more than 10%, the school district must roll back its rate of taxation under Amendment 59. Otherwise, the tax is illegal.

The taxpayers further complain that a number of statutory tasks related to the reassessment of property have not been performed by the school district and by Saline County public officials. For example, they point out that the Saline County Clerk must certify the 1994 assessed value of land located in the school district under Ark. Code Ann. § 26-26-403 (Repl. 1992), which was not done. Also, the Saline County Clerk must report to the school district’s governing body and provide certification of the assessment data on land in Saline County under the same code section, which allegedly was a duty not performed. Finally, the taxpayers allege that the school district’s governing body must complete certain forms and return them to the Saline County Clerk, using the data previously provided by the clerk, as required by Ark. Code Ann. § 26-26-404 (Repl. 1992). This, too, was not accomplished, according to the complaint.

The complaint sought a writ of mandamus (1) to the Saline County Clerk, requiring him to perform his duties, and (2) to the school district to complete the rollback form and roll back its tax rate pursuant to the State Constitution. The taxpayers further sought a writ of prohibition to prevent the collection of 1994 real property taxes in violation of Amendment 59. Next, the taxpayers prayed for judgment declaring the collection of 1994 real property taxes in the school district to constitute an illegal exaction under Amendment 59 as revenue collected which is more than 10% above revenues collected in 1993. Finally, they sought to enjoin the appellees from further violations of Amendment 59.

The school district moved to dismiss the taxpayers’ complaint for lack of subject matter jurisdiction. The Saline County Clerk and Collector moved similarly and asserted that the taxpayers’ claims were required to be brought in county court because they involved county taxes. The taxpayers replied that the taxes at issue were school district taxes as opposed to county taxes, and, thus, circuit court was the appropriate jurisdiction. They further referred to their prayers for mandamus and prohibition, remedies which typically lie in circuit court.

The taxpayers subsequently supplemented their response to the motions to dismiss. They contended that even assuming that the school district tax was a county tax, jurisdiction in circuit court was still proper because the case involved an illegal exaction. Citing Foster v. Jefferson County Quorum Court, 321 Ark. 105, 901 S.W.2d 809 (1995), supp. op. granting reh’g, 321 Ark. 116-A, 901 S.W.2d 815 (1995), they contended that circuit court was an appropriate jurisdiction. The school district replied that the case did not involve an illegal exaction but merely a legal tax that was illegally collected.

After a hearing on the motions to dismiss, the trial court found that the school district tax was indeed a county tax, and that under Foster v. Jefferson County Quorum Court, supra, jurisdiction was vested exclusively in county court. The trial court also concluded that the matter more appropriately lay in chancery court as opposed to circuit court because injunctive relief was sought. The trial court finally stated that it would dismiss the case without prejudice so that the taxpayers could file in either chancery or county court, or appeal the matter. An order of dismissal was entered.

I. Jurisdiction

The taxpayers urge as their initial point that the trial court erred in finding that a county tax was involved and that county court was the proper jurisdiction. The school district argues that the trial court did not rule that the tax was a county tax and that this issue is a “red herring.” We disagree. The trial court stated: “[I]t is my understanding and my belief that this should go to county court, that I believe this is a county tax.” Turning to the merits of this issue, the Arkansas Constitution does provide that county courts shall have exclusive jurisdiction in all matters relating to county taxes. Ark. Const, art. 7, § 28. We agree with the taxpayers, however, that the tax at issue here is not a county tax.

We first observe that under the constitution school taxes and county taxes are treated differently. This matter was clearly reflected in Cole v. Blackwell, 38 Ark. 271 (1881), where we stated that under Ark. Const. art. 14, § 3, the power to levy taxes for school purposes was solely that of the school districts and that such a levy was not within the jurisdiction of the county court. Although this section of the State Constitution has since been amended on two occasions, the language that school districts shall levy taxes remains intact. See Ark. Const, amends. 11 & 40.

We further observe that the General Assembly, the body to whom the State Constitution delegates the power to tax, has consistently treated school districts, counties, and municipalities as separate taxing units. See, e.g., Ark. Code Ann. §§ 26-80-101 to -109 (1987 & Supp. 1995)(school district taxes); Ark. Code Ann. §§ 26-74-101 to -505 (1987 & Supp. 1995)(county sales and use taxes); Ark. Code Ann. §§ 26-75-101 to -801 (1987 & Supp. 1995)(municipal sales and use taxes). In addition, there are numerous statutes that contain language which differentiates between school district and county taxes, the most relevant being Ark. Code Ann. § 26-80-104(b) (1987), which provides that school taxes are to be collected in the same manner as county taxes. See also Ark. Code Ann. § 26-26-402(a)(l) (Repl. 1992) (requiring the rollback of city or town, county, school district, and community college district taxes); Ark. Code Ann. § 14-94-122(a) (Supp. 1995)(requiring improvement district taxes to be paid in installments at the same time as county, city, and school district taxes).

Moreover, this court has observed that Article 14 of the State Constitution “makes it the duty of the Legislature to provide for the establishment, maintenance and support of a system of common schools in this State.” LeMaire v. Henderson, 174 Ark. 936, 939, 298 S.W. 327, 329 (1927). We went on to say: “This court has recognized from the beginning that the Legislature must employ agencies to accomplish that object, and that a school district is a proper agency therefor.” Id. Matters concerning public schools rest within the province of the State — not the county government. This makes good sense, especially when some school districts are situated in more than one county, as in the case at hand.

The distinction between county taxes and school district taxes is further driven home by the fact that although the General Assembly has given counties the responsibility of collecting school district taxes, Ark. Const, art. 16, § 11, states: “No tax shall be levied except in pursuance of law, and every law imposing a tax shall state distinctly the object of the same; and no moneys arising from a tax levied for one purpose shall be used for any other purpose.” Id. This provision of the State Constitution has been interpreted to require that funds generated from school taxes must be credited to the school fund and may not be converted into the county’s general fund for county purposes. County Board of Education v. Austin, 169 Ark. 436, 276 S.W. 2 (1925). This court has interpreted Ark. Const, art. 14, § 2, and Amendment 40, to the same effect. See Special School Dist. v. Sebastian County, Til Ark. 326, 641 S.W.2d 702 (1982). This, again, is consistent with the limited powers of counties:

The powers of the quorum court are limited. It does not have the power to change millages voted by city councils (Ark. Constitution Art. 12, Secs. 3 & 4 and Ark. Stats. 19-4501) and school districts (Amendment 40 Ark. Constitution), but its duty is simply to levy without change such millages as voted. This duty is purely clerical and the county clerk is required to extend taxes on the basis of the millages voted by city councils and school districts without reference to levies made by the quorum court on city and school district millages.

Layne v. Strode, 229 Ark. 513, 518, 317 S.W.2d 6, 9 (1958).

Hence, it is clear that counties may levy taxes for county purposes only. As pointed out in Layne v. Strode, supra, this power in the counties does not include the power to levy school taxes. The role of the county is strictly clerical with respect to school district taxes in that it collects and disburses the tax money. We hold that school taxes are not county taxes, and, thus, exclusive jurisdiction does not lie in county court.

II. Circuit Court Jurisdiction

We turn next to the question of whether proper jurisdiction lies in circuit court. In Foster v. Jefferson County Quorum Court, 321 Ark. 105, 901 S.W.2d 809 (1995), supp. op. granting reh’g, 321 Ark. 116-A, 901 S.W.2d 815 (1995), the initial opinion (Foster I) held that Ark. Const, art. 16, § 13, did not designate a specific court in which illegal exaction actions must be litigated. We recognized once more in Foster I that “an [illegal exaction] action in the circuit court for declaratory judgment is well chosen.” Foster v. Jefferson County Quorum Court, 321 Ark. at 109, 901 S.W.2d at 811, quoting Jones v. Clark, 278 Ark. 119, 122, 644 S.W.2d 257, 259 (1983). As we noted in Foster I, that is consistent with Ark. Const, art. 7, § 11, which provides: “The circuit court shall have jurisdiction in all civil and criminal cases the exclusive jurisdiction of which may not be vested in some other court provided for by this Constitution.” Id. Under this provision, unless the constitution confers jurisdiction exclusively in another court, the circuit court has either exclusive or concurrent jurisdiction. Foster v. Jefferson County Quorum Court, supra; State v. Devers, 34 Ark. 188 (1879). Thus, the Foster I analysis answers this question. The circuit courts of this state are vested with concurrent jurisdiction to hear illegal exaction cases.

II. Illegal Exaction

The question then becomes whether an illegal exaction is the issue in the instant case. The taxpayers assert that they are challenging an illegal exaction under Ark. Const, art. 16, § 13 due to the failure of the school district to roll back the millage rate. This, the taxpayers contend, will result in an increase in revenues higher than 10% over 1993 revenues and, as a result, the failure of the school district to roll back taxes under Amendment 59 constitutes an illegal tax. In support of their argument, the taxpayers cite this court to Greedup v. Franklin County, 30 Ark. 101 (1875), a case which stands for the proposition that a levy of taxes in excess of that allowed by the constitution is illegal. The school district, on the other hand, contends that this case is more properly characterized as one charging the county with the improper collection and assessment of county taxes, and notes that Ark. Const. art. 16, § 13 was “intended to be the means by which taxpayers, generally in a collective capacity, resist illegal taxation.” Martin v. Couey Chrysler Plymouth, Inc., 308 Ark. 325, 331, 824 S.W.2d 832, 835 (1992)(emphasis in original). In sum, the school district urges that improper collection of taxes by the county in excess of constitutional limits is not an illegal tax.

The law of illegal exactions was well-summarized in Pledger v. Featherlite Precast Corp., 308 Ark. 124, 823 S.W.2d 852 (1992). In Featherlite, this court stated that there are only two types of illegal exactions: (1) “public funds” cases; and (2) “illegal tax” cases. The former contemplates either the misapplication of public funds or the recovery of funds wrongly paid to a public official. See, e.g., Brewer v. Hawkins, 241 Ark. 460, 408 S.W.2d 492 (1966). The latter requires that the tax itself be illegal. On the latter point, we said:

It is true that we have many cases in which the collection of taxes has been enjoined under the illegal exaction provision, but all involve a tax that was itself illegal. See for example Greedup v. Franklin County, 30 Ark. 101 (1875), an attempt to collect a county levy in excess of the five mills allowed by the constitution; Lyman v. Howe, 64 Ark. 436, 42 S.W. 830 (1897), a tax based upon an assessment not made by the assessor; Ragan v. Venhaus, 289 Ark. 266, 711 S.W.2d 467 (1986) and Merwin v. Fussell, 93 Ark. 336, 124 S.W. 1021 (1910), attempts to collect taxes not properly voted by the people; McDaniel v. Texarkana Cooperage & Mfg. Co., 94 Ark. 235, 126 S.W. 727 (1910), a tax levied by a county having no jurisdiction over the property; City of Little Rock v. Cash, 277 Ark. 494, 644 S.W.2d 229 (1982) and Waters Pierce Oil Co v. Little Rock, 39 Ark. 412 (1882), taxes which were not authorized by the city’s delegated power of taxation. However, we have always held that if the taxes complained of are not themselves illegal, a suit for illegal exaction will not lie. Schuman v. Ouachita County, 218 Ark. 46, 234 S.W.2d 42 (1950).

Pledger v. Featherlite Precast Corp., 308 Ark. at 128-29, 823 S.W.2d at 855-56.

In order to refute the contention that this case involves an illegal exaction, the school district relies upon the rationale employed in three cases: Pockrus v. Bella Vista Village Property Owners Ass’n, 316 Ark. 468, 872 S.W.2d 416 (1994), Scott County v. Frost, 305 Ark. 358, 807 S.W.2d 469 (1991), and McIntosh v. Southwestern Truck Sales, 304 Ark. 224, 800 S.W.2d 431 (1990). The case of McIntosh v. Southwestern Truck Sales, supra, involved an action to enjoin the Pulaski County Collector from collecting property taxes for county purposes on nonexistent property of the taxpayer, which property was assessed and included as part of the tax bill. We held that this was clearly an improper assessment or collection case as opposed to an illegal exaction case. The same holds true of Scott County v. Frost, supra, a case involving equal protection and due process arguments, that arose when a reappraisal of land in Scott County could not be completed before 1990. It was stipulated that certain property owners in the county would owe property taxes for county purposes in 1990 based on the reappraised value of their property, whereas others would pay based on the old value of their property. This court held that jurisdiction was proper in county court under Ark. Const, art. 7, § 28, as opposed to circuit court, because the case concerned a matter of procedure rather than an assertion that the tax itself was illegal or unauthorized. This court noted that under Ark. Const, art. 7, § 33, the circuit court would have jurisdiction over the claim only on appeal from the county court’s ruling. Neither McIntosh v. Southwestern Truck Sales, supra, nor Scott County v. Frost, supra, is apposite to the case at hand since both cases clearly involved issues of improper collection of county taxes.

Finally, in Pockrus v. Bella Vista Village Property Owners Ass’n, supra, the Bella Vista Village Property Owners Association (Bella Vista Village) filed an action in Benton County Chancery Court seeking to enjoin the Benton County Tax Collector from collecting 1991 property taxes, resulting from a reappraisal and reassessment commenced in 1990. The reappraisal and reassessment, performed by way of a “cyclical reassessment plan,” would take five years to complete. An equal protection argument was mounted over the length of time involved in the five-year reassessment since some property owners would be forced to pay under a new assessment, while others would not. The second argument was that the five-year plan violated Amendment 59 and Ark. Const, art. 16, § 14, because it did not allow for completion in one year of the reappraisal and reassessment in any of the three school districts (separate taxing units) in which Bella Vista Village property was located. The chancellor determined that the five-year plan violated Amendment 59 because the plan potentially foreclosed Bella Vista Village from receiving a rollback as contemplated by Amendment 59 due to the failure to reassess in one year.

On appeal, this court reversed and dismissed for want of jurisdiction. We noted that the ad valorem tax itself was not illegal and held that an action for illegal exaction did not He:

[Bella Vista Village] contends only that the reassessment and tax collection scheme ... to collect these legal ad valorem taxes is unconstitutional. In other words, Bella Vista Village effectually questions only the reassessment procedure or plan employed by the county assessor and collector as being a flawed one. Because this case does not involve a void or illegal tax assessment, the chancery court was without power to hear this matter.

Pockrus v. Bella Vista Village Property Owners Ass’n, 316 Ark. at 472, 872 S.W.2d at 418 (emphasis in original).

In the case before us, the issue is markedly different. Here, the taxpayers do not contest the reappraisal and reassessment by the county. They contest the failure of the school district to roll back taxes, which, they contend, violates Amendment 59. Unlike the Pockrus case where the issue was the constitutionality of a five-year reassessment plan, here the issue is the tax itself, which allegedly exceeds constitutional limits, because a rollback has not been accomplished by the school district. See Greedup v. Franklin County, supra. See also Foster v. Jefferson County Quorum Court, supra. We conclude that a valid claim for an illegal exaction has been raised.

Reversed and remanded.

Glaze, J., not participating.

Corbin and Thornton, JJ., concur.

Special Justice W. Kelvin Wyrick joins.

       The essential provisions of Amendment 59, adopted by vote of the people in 1980, which are at issue in this matter are set out at Article 16, § 14 of the Arkansas Constitution. For ease of reference, we will refer to this constitutional provision as Amendment 59.

       The jurisdictional holding of Foster I was not an issue on rehearing.

       In Foster I, an illegal exaction was held to exist due to a tax that exceeded constitutional limits. On rehearing, that holding was superseded solely because the court held that the constitutional limit referred only to ad valorem property taxes and, therefore, did not control a sales and use tax. Thus, the holding in Foster I concerning illegal exactions was not at issue on rehearing.


author: Annabelle Clinton Imber, Justice.

text:
    Howard CHERRY v. TANDA, INC., and Transcontinental Insurance Co.
    96-1229
    940 S.W.2d 457
    Supreme Court of Arkansas
    Opinion delivered March 17, 1997

      R. Theodore Strieker, for appellant.

      Jones, Jackson & Moll, PLC, by: J. Scott Hardin, for appellees.
   Annabelle Clinton Imber, Justice.

Howard Cherry, as administrator of David H. Cherry’s estate, appeals the dismissal of his wrongful death action against the decedent’s former employer, Tanda, Inc., and the employer’s insurance carrier, Transcontinental Insurance Co. We affirm.

On June 22, 1993, the City of Fort Smith (“City”) entered into a contract with Tanda, Inc. (“Tanda”), for the construction of a sanitary landfill. As part of the contract, Tanda agreed to indemnify the City for all claims and damages for injuries or deaths arising out of the performance of the contract. In addition, Tanda agreed to carry general liability insurance which it subsequently obtained from Transcontinental Insurance Company (“Transcontinental”).

On September 13, 1993, the walls of the excavation site collapsed causing the death of David H. Cherry. On November 30, 1996, Floward Cherry, as administrator of David Cherry’s estate, filed in the Sebastian County Circuit Court a wrongful death action against Tanda and Transcontinental.

Tanda filed a Rule 12(b)(6) motion to dismiss in which it alleged that the exclusive-remedy provision of the Workers’ Compensation Act, Ark. Code Ann. § 11-9-105 (Supp. 1995), immunized Tanda from Cherry’s tort action. Likewise, Transcontinental filed a motion for summary judgment in which it claimed that Tanda, not the City of Fort Smith, was the insured, and thus the estate could not maintain a direct action against the insurance carrier pursuant to Ark. Code Ann. § 23-79-210 (Repl. 1992). The trial court granted both motions and Cherry appeals.

I. Immunity of Employer From Suit Under the Exclusive Remedy Provision of Ark. Code Ann. § 11-9-105 (Supp. 1995)

Cherry’s first point on appeal is that the trial court erred when it dismissed Cherry’s complaint against Tanda on the grounds of the “exclusive remedy” provision of Ark. Code Ann. § 11-9-105 (Supp. 1995) of the Workers’ Compensation Act. According to the Workers’ Compensation Act, an employee’s remedy against his or her employer for injuries sustained while on the job is to file a claim with the Workers’ Compensation Commission. Specifically, the statute declares that:

The rights and remedies granted to an employee subject to the provisions of this chapter, on account of injury or death, shall be exclusive of all other rights and remedies of the employee, his legal representative, dependents, next of kin, or anyone otherwise entitled to recover damages from the employer. . .on account of the injury or death, and the negligent acts of a coemployee shall not be imputed to the employer. No role, capacity, or persona of any employer. . .other than that existing in the role of employer of the employee shall be relevant for consideration for purposes of this chapter, and the rights and remedies provided by this chapter shall in fact be exclusive regardless of the multiple roles, capacities, or personas the employer may be deemed to have.

Ark. Code Ann. § ll-9-105(a) (Supp. 1995) (emphasis added). Moreover, the employer’s tort immunity under this provision extends to the employer’s insurance carrier. Burkett v. PPG Indus., Inc., 294 Ark. 50, 740 S.W.2d 621 (1987).

Cherry attempts to circumvent the immunity created by Ark. Code Ann. § ll-9-105(a) by asserting that his lawsuit sounds in contract, and not tort, and thus is not barred by this statutory provision.

A. Third-Party Beneficiary to the Express Indemnity Agreement.

As mentioned above, Tanda contractually agreed to indemnify the City for any injuries or damages resulting from the construction of the landfill. The relevant contract provisions provide that:

6.30. To the fullest extent permitted by Laws and Regulations, CONTRACTOR [Tanda] shall indemnify and hold harmless OWNER [City of Fort Smith] and ENGINEER and their consultants, agents and employees from and against all claims, damages, losses and expenses, direct, indirect or consequential. . .arising out of or resulting from the performance of the Work, provided that any such claim, damage, loss or expense (a) is attributable to bodily injury, sickness, disease or death. . .and (b) is caused in whole or in part by any negligent act or omission of CONTRACTOR, and subcontractor, any persons or organization directly or indirectly employed by any of them to perform or furnish any of the Work. . .regardless of whether or not it is caused in part by a party indemnified hereunder or arises by or is imposed by Law and Regulations regardless of the negligence of any such party.
6.31. In any and all claims against OWNER or ENGINEER. . .by any employee of CONTRACTOR. . .the indemnification obligation under paragraph 6.30 shall not be limited in any way by any limitation on the amount or type of damages, compensation or benefits payable by or for CONTRACTOR. . .under workers’ or workmen’s compensation acts, disability benefit acts or other employee benefit acts.

For his first argument on appeal, Cherry alleges that he was a third-party beneficiary to this indemnity agreement, and thus, he may sue Tanda for enforcement of this contract without running afoul of Ark. Code Ann. § 11-9-105 (Supp. 1995).

Tanda is correct that this court recognized in C & L Rural Elec. Coop. Corp. v. Kincaid, 221 Ark. 450, 256 S.W.2d 337 (1953), an exception to the exclusivity provision of the Workers’ Compensation Act for the enforcement of indemnity contracts. In C & L, a contractor entered into an express indemnity agreement with the site owner before beginning construction. Id. During the performance of the contract, one of the contractor’s employees was injured. Id. The employee received workers’ compensation benefits from the employer/contractor and then sued the site owner for damages. Id. The site owner paid the injured employee, and then sued the contractor for reimbursement under the indemnification agreement. Id. The employer asserted that Ark. Code Ann. § 11-9-105 provided the exclusive remedy for both the employee and “anyone otherwise entitled to recover damages from the employer” which in this case was the site owner. Id.

This court rejected the employer’s contention, and found that the exclusive remedy provision did not apply because “the present suit is one on an indemnity contract and not an action in tort.” Id. Flence, according to C & L, an indemnitee may enforce an express-indemnity agreement against an employer even though the employer has already paid the injured employee full workers’ compensation benefits, and such is not a violation of the exclusivity provision contained in the Workers’ Compensation Act. See also, Nabholtz Const. Co. v. Graham, 319 Ark. 396, 892 S.W.2d 456 (1995) (reaching the same result without addressing the exclusivity provision).

Likewise, this court has expanded this “indemnity exception” to situations where the employer’s indemnity obligation is implied by law, and not part of an express contract. Smith v. Paragould Light & Water Comm’n, 303 Ark. 109, 793 S.W.2d 341 (1990); Oaklawn Jockey Club, Inc. v. Pickens-Bond Const. Co., 251 Ark. 1100, 477 S.W.2d 477 (1972). In Oaklawn, this court found an implied indemnity contract existed between the site owner and the employer/contractor because the service contract implied a duty on the employer/contractor to perform the work with care and to indemnify the site owner for damages flowing from the breach of that obligation. Oaklawn, supra. Likewise, in Smith, this court held that a duty imposed on the city/employer by a statutory provision carried with it an implied promise that the city/ employer would indemnify another who might be held liable for its failure to properly discharge that duty. Smith, supra.

Because this court found the existence of impHed indemnity agreements in both Oaklawn and Smith, the indemnitees were permitted to sue the employers for reimbursement of damages they paid to the injured employees. As with express indemnity agreements, in both cases , the court found that the indemnitees were suing on the indemnity contracts, and not in tort, and thus their claims were not barred by the exclusive-remedy provision found at Ark. Code Ann. § 11-9-105 (Supp. 1995).

Recently, however, this court declined to find the existence of an impHed indemnity agreement in Mosely Mach. Co. v. Gray Supply Co., 310 Ark. 214, 833 S.W.2d 772 (1992). In Mosley, this court explained that an impHed indemnity agreement will only arise when there is “a special relationship carrying with it the obHgation to indemnify.” Id. Moreover, this court held that in a sales contract, the impHed duties or warranties do not run from the purchaser (employer) to the manufacturer, but from the manufacturer to the purchaser. Id. This court further found that in contrast to the services contract in Oaklawn, no such “special relationship” existed between parties to a mere sales contract, and thus there could be no impHed obHgation for indemnity. Id. Most importantly, because there was neither an implied nor an express indemnity agreement between the parties, the manufacturer’s action for reimbursement for damages it paid to the employer’s injured worker was a mere tort action and thus barred by the exclusivity provision of the Workers’ Compensation Act. Id. This court explained that:

[w]hen the relation between the parties involves no contract or special relation capable of carrying with it an implied obligation to indemnify, the basic exclusiveness rule generally cannot be defeated by dressing the remedy itself in contractual clothes, such as indemnity.

Id. See also, Elk Corp. v. Builders Transport Inc., 862 F.2d 663 (8th Cir. 1988) and Dubin v. Circle F. Industries, Inc., 558 F.2d 457 (8th Cir. 1979) (refusing to find the existence of an implied indemnity agreement, thus the exclusivity provision of the Workers’ Compensation Act precluded the shipper or manufacturer from seeking indemnity from the injured employee’s employer); W.M. Bashlin Co. v. Smith, 277 Ark. 406, 643 S.W.2d 526 (1982) (refusing to hold an employer liable to a manufacturer or supplier upon a joint tortfeasor theory).

Regardless of whether the indemnity contract is express or implied, the common thread among these cases is that the indemnitee sued the employer/indemnitor for enforcement of the indemnity agreement. Cherry’s argument is unique in that it asks this court to expand the “indemnity exception” to the exclusivity provision by allowing the injured employee, and not the indemnitee, to sue the employer for enforcement of the indemnity contract. Cherry alleges that he may do so as a third-party beneficiary to the express indemnity agreement between Tanda and the City.

Under Arkansas law, there is a presumption that parties contract only for themselves, and a contract will not be construed as having been made for the benefit of third parties unless it clearly appears that such was the intention of the parties. Little Rock Wastewater Util. v. Larry Moyer Trucking, 321 Ark. 303, 902 S.W.2d 760 (1995). Flowever, a contract is actionable by a third party when there is substantial evidence of a clear intention to benefit that third party. Id. It is not necessary that the person be named in the contract if he is a member of a class of persons sufficiently described or designated in the contract. Id.

Cherry asserts that he is a third-party beneficiary to the indemnity contract between Tanda and the City because the language clearly contemplates the payment of damages for injuries to the contractor’s employees, such as himself. Whether there may be a third-party beneficiary to an indemnity contract is a matter of first impression for this court. As a general proposition, an indemnitor’s obligation to reimburse against loss does not become due until after the indemnitee has paid damages to a third party. Larson Machine v. Wallace, 268 Ark. 192, 600 S.W.2d 1 (1980). In other words:

A mere promise to indemnify against damages must also be distinguished. Here the promisor’s liability does not arise until the promisee has suffered loss or expense. Until then the promisee has no right of action, and consequently one claiming damages can assert no derivative right against the promisor, much less a direct right. Nor can the promisee sue for the benefit of the persons claiming damages.

2 Samuel WilHston & Walter H. E. Jager, A Treatise on the Law of Contracts § 403 (3d ed. 1961). See also 4 Arthur Linton Corbin, Corbin on Contracts § 821 (1951).

Tanda’s liability under its indemnity contract with the City does not arise until the city sustains a loss or expense. Because a condition precedent to any action by the City against Tanda for recovery under the indemnity contract is the City’s payment of damages to a third-party claimant, such as Cherry, it follows that the City’s payment of damages would also result in satisfaction of the claim by the third party. Under these circumstances, we hold that Cherry is merely an incidental, and not intended, third-party beneficiary to the indemnity contract. Therefore, as in Mosley, Bashlin, Dubin, and Elk, Cherry is suing Tanda in tort, and not on the indemnity contract, and accordingly the exclusivity provision bars his action. Clearly, as in Elk, supra, Cherry has attempted to dress his tort claim in “contractual clothes” such that he may circumvent the immunity provided to the employer by the exclusivity provision, Ark. Code Ann. § 11-9-105 (Supp. 1995). Thus, we must reaffirm as stated in C S' L, that:

The employer should not be held Hable indirectly in an amount that could not be recovered direcdy, for this would run counter to one of the fundamental purposes of the compensation law.

C & L, supra (citing Baltimore Transit Co. v. Maryland, 39 A.2d 858 (1944)).

B. Direct action against Tanda as the City’s insurer.

Next, Cherry attempts to avoid the exclusive remedy provision found at Ark. Code Ann. § 11-9-105 by claiming that Tanda was in fact the City’s insurer such that he may maintain a direct action against Tanda as the insurer of an otherwise immune municipality.

According to Ark. Code Ann. § 21-9-301 (Repl. 1996), cities, such as Fort Smith, and other political subdivisions of the state are immune from “suit for damages except to the extent that they may be covered by liability insurance.” Although an immune entity is not required to carry insurance, if it does so then an injured party may sue the insurance carrier directly for the extent of the coverage. Ark. Code Ann. § 23-79-210 (Repl. 1992).

Based on these two statutes, Cherry argues that the City of Fort Smith obtained “insurance” by executing the agreement whereby Tanda agreed to indemnify the City and obtain insurance to cover this indemnity responsibility. The basic flaw in Cherry’s argument is that the Arkansas Insurance Code specifically defines an insurer as “every person engaged as indemnitor, surety, or contractor in the business of entering into contracts of insurance.” Ark. Code Ann. § 23-60-101 (Repl. 1994) (emphasis added).

Tanda is “in the business” of construction, not insurance, and the indemnification agreement was a mere incidental obligation of its contractual relationship with the City as a contractor. In other words, Tanda is not “in the business of entering into contracts of insurance” as required by the statute, and thus, Cherry cannot maintain a direct action under Ark. Code Ann. § 23-79-210 against Tanda as an insurer of an immune entity.

Moreover, the indemnity agreement was not an “insurance” agreement as provided by the statute which defines “insurance” as:

any agreement, contract or other transaction whereby one party, the “insurer,” is obligated to confer benefit of pecuniary value upon another party, the “insured” of “beneficiary,” dependent upon the happening of a fortuitous event in which the insured or beneficiary has, or is expected to have at the time of such happening, a material interest which will be adversely affected by the happening of such event.

Ark. Code Ann. § 23-60-102 (Repl. 1994). In deciding whether a particular agreement fits this definition, this court has focused on the following three factors: 1) whether the plan is mandatory; 2) whether a profit motive exists in offering the plan; and 3) whether the plan is intended to be actuarially sound. Douglass v. Dynamic Enter. Inc., 315 Ark. 575, 869 S.W.2d 14 (1994); Waire v. Joseph, 308 Ark. 528, 825 S.W.2d. 594 (1992).

In this case, Tanda was not receiving money in exchange for its promise to indemnify nor was the plan actuarially sound. In fact, the indemnity plan was a liability, not an asset to Tanda. Finally, in the construction contract, the City agrees to obtain its own liability and property insurance. Hence, it is clear that the parties never intended Tanda to be the “insurer” of the City. Under these circumstances, we decline to construe the indemnity agreement as an insurance contract, and thus Cherry is not entitled to maintain a direct action against Tanda as an “insurer” of the City.

C. Breach of a Contractual Duty of Care.

Next, Cherry asserts that it is suing Tanda for its implied contractual duty to supply a safe place to work. Specifically, Cherry alleges that several provisions of Tanda’s construction contract with the City required that Tanda follow the relevant safety regulations and maintain appropriate safeguards. Thus, Cherry argues, it is entitled to sue Tanda for the alleged breach of these contractual obligations.

This argument is clearly contrary to the plain meaning of the exclusive-remedy provision, which unequivocally states that

The rights and remedies granted to an employee subject to the provisions of this chapter, on account of injury or death, shall be exclusive of all other rights and remedies of the employee. . . .

Ark. Code Ann. § ll-9-105(a) (Supp. 1995) (emphasis added). Whether Cherry couches his complaint against Tanda in terms of contract, or tort, his action is barred under the exclusive-remedy provision. See Gullett v. Brown, 307 Ark. 385, 820 S.W.2d 457 (1991) (holding that the exclusive-remedy provision barred the employee’s suit against his employer for enforcement of an under-insured-motorist insurance contract).

4. Waiver of the Exclusive Remedy Protection

For his final argument for reversal of the trial court’s dismissal of his lawsuit against Tanda, Cherry argues that Tanda waived the protection of the exclusive-remedy provision when it agreed to the following clause contained in the construction contract:

6.31 . . .the indemnification obligation under paragraph 6.30 shall not be limited in any way by any limitation on the amount or type of damages, compensation or benefits payable by or for CONTRACTOR or any such Subcontractor or other person or organization under workers’ or workmen’s compensation acts, disability benefit acts or other employee benefit acts.

Cherry’s argument here is erroneous because it simply misconstrues the common sense meaning of the contract. Clearly by this provision, Tanda agreed to indemnify the City beyond what it was required to pay an injured employee under the Workers’ Compensation Act. In other words, this clause related to the amount of liability to the City, and not to an employee. In no way does this provision relate to or affect Tanda’s obligations to its employees. Hence, this argument also has no merit. Accordingly, we affirm the trial court’s dismissal of Cherry’s lawsuit against Tanda.

II. Direct Action Against the Employer’s Insurance Carrier as the “Insurer” of the City.

Prior to this lawsuit, Cherry attempted to sue the City of Fort Smith for the wrongful death of David Cherry; however, the case was dismissed because the City of Fort Smith is immune from tort liability under Ark. Code Ann. § 21-9-301 (Repl. 1996). Although it is not clear from the record, it appears that the City of Fort Smith did not obtain an insurance contract, and thus Cherry could not avoid the City’s immunity by proceeding direcdy against the City’s insurance carrier as provided by Ark. Code Ann. § 23-79-210 (Repl. 1992).

Flence, Cherry sued Transcontinental, which is the insurance carrier for Tanda, not the City. As mentioned previously, the trial court dismissed this action on summary judgment. On appeal, Cherry raises two arguments as to why it may proceed directly against Transcontinental. We find no merit to either argument.

A. The City’s Immunity

First, Cherry argues that it may proceed against Transcontinental as a quasi-insurer of the City, which is clearly immune from suit under Ark. Code Ann. § 21-9-301 (Repl. 1996). More specifically, Cherry argues that by virtue of the indemnity agreement between Tanda and the City, Transcontinental agreed to pay for the City’s negligence.

This argument is clearly against the policy of the direct- action statute, and established caselaw. In Rogers v. Tudor Ins. Co., 325 Ark. 226, 925 S.W.2d 395 (1996), we recently held that in order for the direct-action statute to apply the following elements must exist:

(1) the liability insurance must be carried by a nonprofit corporation;
(2) a person must suffer injury or damage on account of negligence or wrongful conduct; and
(3) the damage or injury must be on account of the negligence or wrongful conduct of “servants, agents, or employees” of the nonprofit corporation acting within the scope of their agency or employment.

(Emphasis added.) In this case, the Transcontinental insurance contract was “carried by” Tanda, not the immune City. Thus, Cherry fails to establish the first element of the statute.

Furthermore, rejection of Cherry’s argument is consistent with a federal decision on virtually identical facts. As in this case, in Lacey v. Bekaert Steel Wire Corp., 799 F.2d 434 (8th Cir. 1986), the Bekaert Steel Wire Corp. (“Bekaert”) entered into a contract with the City of Van Burén, and pursuant to that contract Bekaert agreed to indemnify the City and to obtain an insurance contract which it subsequently obtained from CNA Insurance. Several years later, Rebecca Lacey was killed on the Bekaert property, and her estate sued the City, Bekaert, and CNA insurance. Id. The trial court found that the City was immune from liability and dismissed Lacey’s action against it. Id.

As in this case, Lacey argued that it could directly sue CNA Insurance for the City’s negligence even though the listed insured was Bekaert. Id. The Eighth Circuit rejected Lacey’s argument and held that:

the narrow purpose of the statute serves only to permit direct action against insurance carriers issuing policies to enumerated immune organizations.

(Emphasis added.) Hence, the court affirmed the district court’s dismissal of Lacey’s direct action against CNA Insurance.

As in Lacey, Cherry attempts to circumvent the immunity provision by directly suing an insurance company for acts done by an entity other than the named insured. Surely, the drafters of the Ark. Code Ann. § 23-79-210 (Repl. 1992) never intended to hold an insurance company directly liable for actions of a person or entity the insurance company never agreed to insure. Therefore, we adopt the Eighth Circuit’s holding in Lacey and reject Cherry’s argument for reversal.

B. Immunity of Tanda.

Finally, Cherry alleges that pursuant to Ark. Code Ann. § 23-79-210 (Repl. 1992), it may directly sue Transcontinental because the exclusive remedy provision found at Ark. Code Ann. § 11-9-105 (Supp. 1995) makes Tanda “immune” from tort liability. As with Cherry’s other points on appeal, this argument has no merit.

In Helms v. Southern Farm Bureau Casualty Ins., 281 Ark. 450, 664 S.W.2d 870 (1984), this court said that:

other statutes must yield to the Workers’ Compensation Act because it is in the interest of the public policy to give that act priority as an exclusive remedy.

Thus, in Helms this court held that the exclusive remedy prevented injured teachers from recovering under the school district’s automobile insurance agreement which it was required by statute to maintain as an exception to the immunity doctrine.

Moreover, in Burkett v. PPG Indus. Inc., 294 Ark. 50, 740 S.W.2d 621 (1987), this court specifically held that the exclusive-remedy provision also applied to insulate the employer’s insurance carrier from tort liability. Hence, under these two decisions, Cherry may not maintain a direct action against Transcontinental as Tanda’s insurance carrier.

Affirmed.