author: Steele Hays, Justice. Robert H. Dudley, Justice,

text:
    Lelia Boyd CUNDIFF v. Carol CRIDER, Ann Majure, Bob Clark, Dawn Cook, Melanie Brown, Terrie Weaver, and Penny Guenther
    90-108
    792 S.W.2d 604
    Supreme Court of Arkansas
    Opinion delivered July 16, 1990

      John Logan Burrow, for appellant.

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

Marisa Lee Cundiff, age thirteen, is severely retarded and autistic. She resides at the Human Development Center at Conway, Arkansas. Marisa’s mother is Lelia Boyd Cundiff, the plaintiff-appellant in this action. Appellees are employees of the Human Development Center.

During a visit between Mrs. Cundiff and Marisa at the Center Mrs. Cundiff was observed by some of the appellees to kiss and embrace her daughter and to lick, kiss and smell Marisa’s fingers. The appellees suspected sexual abuse and reported their observations to other appellees, resulting in an investigation by the Division of Children and Family Services of the Department of Human Services. The investigative unit determined that credible evidence of abuse and neglect existed. Mrs. Cundiff requested administrative review and the determination of abuse and neglect was reversed and Mrs. Cundiff was absolved of any criminal activity.

Mrs. Cundiff filed a libel suit against the appellees, who responded with a motion to dismiss pursuant to ARCP Rule 12(b)(6), for failure to state a claim for which relief could be granted because defendants are immune from suit pursuant to Ark. Code Ann. § 19-10-305 (1987), and because there was no publication.

The trial court treated the motion to dismiss as a motion for summary judgment. It determined that the complaint contained no allegation that the appellees had not acted in good faith, that there had been no publication of the alleged defamation and that appellees were protected by the doctrine of qualified privilege. Mrs. Cundiff appeals.

Arkansas Code Annotated § 12-12-504(a) (1987) provides that when any physician, surgeon, coroner, dentist, osteopath, resident intern, social service worker, day care center worker, or any other child or foster care worker, mental health professional or law enforcement official has reasonable cause to suspect that a child has been subjected to abuse or sexual abuse or neglect, they shall immediately report to the Department of Human Services. Subsection (c) provides that “any other person” may report such suspected cases.

The original act of which § 12-12-504 is a part, and several amendments, contain emergency clauses noting the prevalence of cases of child abuse and the need for prompt and effective response to suspected instances of abuse. The broad inclusion of health professional and law enforcement personnel specified in the act and the use of the mandatory shall attests to the urgency with which the legislature viewed the problem. In short, we construe § 12-12-504 as imposing a compelling duty on the classes of persons named therein to act when they have “reasonable cause to suspect” sexual abuse, defined elsewhere in the act as including “sexual activity” and any deviate sexual activity.

That provision alone would, we believe, create a qualified privilege under the law for the protection of those acting in furtherance of the duty imposed by § 12-12-504. See W. Prosser and W. Keeton, Prosser and Keeton on Torts, § 115, 5th ed. (1984); Ikani v. Bennett, 284 Ark. 409, 682 S.W.2d 747 (1985). However, the legislature did not leave it with that, as §12-12-510 (1987) makes specific provision for immunity from liability for reports made in good faith:

Good faith report — Immunity from liability.
(a) Any person, official, or institution participating in good faith in the making of a report, the taking of photographs, or the removal of a child pursuant to this subchapter shall have immunity from any civil or criminal liability that otherwise might result by reason of such actions. For the purpose of any civil or criminal proceedings, the good faith of any person required to report cases of child abuse, sexual abuse, or neglect shall be presumed.
(b) (1) Any person, official, or institution willfully making a false report of suspected abuse, neglect, or sexual abuse, knowing these allegations to be false, or with reckless disregard as to the truthfulness disregard as to the truthfulness of the allegations, shall, upon conviction therefore, be subject to a fine of one hundred dollars ($100) and up to five (5) days in jail.
(2) The department or prosecuting attorney is empowered to file petitions in the appropriate court seeking imposition of penalties for violation of this section.

We think the appellees are correct in the contention, as the trial court found, that the complaint failed to state facts sufficient to overcome the protection provided under the law to those individuals who are constrained by the mandate of § 12-12-504 to report suspected abuse to the Department. Nothing in the complaint alleges or even suggests that the appellees acted spitefully or in bad faith in reporting their observations and we think it would be wholly inconsistent with the letter and the spirit of the Child Abuse Reporting Act to hold that immunity and privilege cannot prevail against a complaint which alleges essentially that the defendants were negligent or careless in their assumptions or that their accusations were unfounded.

While we think the appropriate treatment of the appellee’s motion to dismiss was pursuant to ARCP Rule 12(b)(6), we agree with the trial court’s order of dismissal and accordingly we affirm as modified.

Dudley, Newbern, and Price, JJ., dissent.

Robert H. Dudley, Justice,

dissenting. In my opinion the majority opinion is in error in holding that the appellees are immune from suit as long as they acted in good faith. They are immune from liability, not suit, and there is a vast difference.

The majority opinion states that there may be a common law qualified immunity for performing the duty imposed by law in this case. That statement is, at best, difficult to understand since the legislature has specified the kind of immunity which is applicable to this case. The statute, Ark. Code Ann. § 12-12-510 (Supp. 1989), is correctly quoted in the majority opinion as providing, “immunity from any civil or criminal liability [for making reports].” (Emphasis added.) We have expressly held that this statute “provides only an immunity from liability if good faith is shown as opposed to an immunity from suit.” (Emphasis in original.) Jaggers v. Zolliecoffer, 290 Ark. 250, 718 S.W.2d 441 (1986).

There is another statute which is clearly applicable but not mentioned in the majority opinion. It is Ark. Code Ann. § 19-10-305(a) (Supp. 1989), which provides that “Officers and employees of the State of Arkansas are immune from civil liability for acts . . . other than malicious acts . . . occurring within the course and scope of their employment.” (Emphasis supplied.) As set out in the majority opinion, all of the appellees are state employees, and they were acting in the scope of their employment. Thus, the appellees are immune from liability, not suit, under the two quoted statutes.

An example of immunity from suit is found in Ark. Code Ann. § 16-10-406 (Supp. 1989), which provides: “Members of the commission, referees, commission counsel and staff shall be absolutely immune from suit . . . .”

We have recognized the distinction between immunity from liability and immunity from suit in three cases, Bly v. Young, 293 Ark. 36, 732 S.W.2d 157 (1987);Beaulieuw. Gray, 288 Ark. 395, 705 S.W.2d 880 (1986); and Carter v. Bush, 283 Ark. 16, 677 S.W.2d 837 (1984) (substituted opinion on denial of rehearing). In each of these “immunity from liability” cases we wrote that suit could lie against the state employee but that employee would not be personally liable. However, if the employee had liability insurance which covered the wrongful act, the insurance company would be liable. In addition, as noted in Beaulieu v. Gray, supra, if a plaintiff obtains a judgment against a state employee, the State Claims Commission might pay the judgment, even if the employee is not personally liable. See also, Bly v. Young, Beaulieu v. Gray, and Carter v. Bush: The Arkansas State Employee Immunity Trilogy, 41 Ark. L. Rev. 893 (1988).

The majority opinion is in error in holding that the appellees are immune from suit, rather than immune from liability and, accordingly, I dissent.

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


source: Caselaw Access Project

author: Steele Hays, Justice. Steele Hays, Justice.

license: Public Domain

text:
    Virginia T. HALL v. SUPERIOR FEDERAL BANK, et al.
    90-24
    794 S.W.2d 611
    Supreme Court of Arkansas
    Opinion delivered July 16, 1990
    [Supplemental Opinion on Denial of Rehearing September 17, 1990.]

      Homer Tanner, for appellant.

      Hardin, Jesson & Dawson, by: J. Leslie Evitts III, for appellee Superior Federal Bank.

      Hilburn, Calhoon, Harper, Pruniski & Cahoun, Ltd., by: Scott E. Daniel, for appellee Merrill Lynch, Pierce, Fenner & Smith, Inc.

      Hurley, Whitwell, Shepherd & Welch, by: Stephen E. Whitwell, for appellee F.A. Russ, Executor of the Estate of Dorothy Edwards, Deceased.

      Newbern, J., not participating.

   Steele Hays, Justice.

This is a dispute over the ownership of funds held in the names of Mrs. Dorothy Edwards and Mrs. Virginia Hall, as joint tenants, at Superior Federal Bank and Merrill Lynch, Pierce, Fenner & Smith, Inc. Virginia Hall, the appellant and surviving joint tenant, appeals from the order of Pulaski Chancery Court finding that funds in both accounts should pass into the estate of Dorothy Edwards.

On May 8, 1984, Dorothy Edwards, now deceased, opened savings account No. 26-60145810 with Superior Federal Bank in Little Rock. The signature card contained the names of Mrs. Dorothy Edwards and Mrs. Virginia T. Hall “as joint tenants with right of survivorship and not as tenants in common, and not as tenants by the entirety. . .” Mrs. Edwards also maintained joint account No. 56334270 with Merrill Lynch, Pierce, Fenner & Smith, Inc., opened on May 4, 1973, bearing the names of Dorothy Edwards and Virginia T. Hall as joint tenants with right of survivorship. The Merrill Lynch joint account agreement stated that the account was a joint account with right of survivorship, and, “upon the death of either, of us, all securities, funds, and property, in the account shall be the sole property of the survivor.” After Mrs. Edwards died on January 25, 1988, Virginia T. Hall attempted to collect the funds in these accounts as the surviving joint tenant.

On March 2, 1988, Mrs. Hall demanded payment of the funds held in the joint account at Superior Federal Bank. After inspecting a certified copy of Mrs. Edwards’ death certificate and, an affidavit signed by Virginia Hall stating that the certificate of deposit had been lost or destroyed, Superior issued a check to her for $50,722.31 constituting the principal amount in the savings account plus unpaid and accrued interest. Later that day Superior discovered that the Pulaski Probate Court had issued an injunction and restraining order on February 5,1988, prohibiting Superior from making any disbursement of the funds in the account. Superior contacted Mrs. Hall to inform her that because of the injunction the check would not be honored. The following day Mrs. Hall presented the check at Union National Bank for payment and the check was dishonored.

When Mrs. Hall attempted to collect funds in the Merrill Lynch account, Merrill Lynch refused to release the assets in the joint account bearing the names of Dorothy Edwards and Virginia Hall, relying on the probate court order.

Mrs. Hall filed suit in the Circuit Court of Pulaski County alleging that Superior Federal Bank wrongfully withheld the payment of funds belonging to her as the surviving joint tenant. She sought judgment for $50,722.31 plus accrued interest and attorneys fees. Superior answered and filed a counterclaim and third party complaint for interpleader designating the estate of Dorothy Edwards as a party defendant.

Mrs. Hall also filed an action in the Circuit Court of Pulaski County seeking judgment against Merrill Lynch in the amount held in the name of Dorothy Edwards and Virginia Hall, and for interest, costs and attorneys’ fees. Merrill Lynch answered with a counterclaim and third party complaint for interpleader and declaratory relief. The cases were consolidated and transferred to the Chancery Court of Pulaski County.

After a trial on the merits, the trial court found that a confidential relationship existed between Mrs. Hall and Dorothy Edwards and that it was never the intent of Dorothy Edwards that the funds in the joint accounts were to pass to Mrs. Hall. The trial court imposed a constructive trust and determined that the funds in both accounts should pass into the estate of Dorothy Edwards. From this judgment, the appellant brings this appeal.

I.

THE PROBATE COURT HAD THE AUTHORITY TO ISSUE THE INJUNCTION.

The appellant contends that the Pulaski Probate Court exceeded its jurisdiction by issuing injunctions to Superior Federal Bank and to Merrill Lynch. The injunctions were issued to preserve the assets of the estate and to prohibit withdrawals from the accounts. The probate court order did not determine entitlement to the two accounts, but simply prevented the dissipation of the money.

Generally, assets held as “joint tenancy with right of survivorship” pass outside of probate.

Property that was held by the decedent in joint tenancy with right of survivorship (or tenancy by the entireties) with a person who survives him is also not administered, [in probate court] but passes directly to the surviving joint owner. However, the personal representative must, before deciding not to claim such property, be certain that the property in fact was so held. [Emphasis added.]

E. Brantley & W. Haught, Arkansas Probate, § 6-5 (1984). Here, the executor of the estate of Dorothy Edwards, appellee F. A. Russ, requested an injunction from the probate court to preserve the estate while he proved that Mrs. Dorothy Edwards intended only for Mrs. Virginia Hall to act as conduit by which the funds would pass upon her death.

The appellant argues that the probate courts are courts of special and limited jurisdiction, and if our Constitution or statutes do not specifically grant probate courts the power to issue injunctions, no such power exists. The probate courts only possess such jurisdiction and power as are conferred by the Constitution or by statute, or are necessarily incidental to the exercise of jurisdiction and powers specifically granted. Eddleman v. Estate of Farmer, 294 Ark. 9, 740 S.W.2d 141 (1987). Ark. Code Ann. § 28-1-104 (1987) provides that the probate court shall have jurisdiction over the administration, settlement and distribution of estates of decedents. Appellees, on the other hand, maintain that the exclusive power over decedents estates requires that probate courts have the authority to prevent dissipation of potential assets of the estate while a determination in a chancery court decides if the assets belong to the estate. Arguably, such power to preserve questionable assets of the estate is incidental to the exercise of the power over distribution, settlement and administration of decedents’ estates, but we do not now settle that question, as we agree with appellees’ alternative argument — that the issue becomes moot when, as here, the disputed ownership of the assets has been decided on the merits. Vandergriff v. State, 239 Ark. 1119, 396 S.W.2d 818 (1965). We see no reason to distinguish that case, because the temporary injunction and subsequent trial were both in the same rather than in separate courts.

II.

APPELLANT OWNS THE FUNDS IN THE SUPERIOR FEDERAL ACCOUNT BY VIRTUE OF BEING THE SURVIVING JOINT TENANT: APPELLANT DOES NOT OWN THE FUNDS IN THE MERRILL LYNCH ACCOUNT.

Appellant contends that she is the owner of both the Superior Federal and Merrill Lynch accounts by virtue of being the surviving joint tenant. Appellant relies on the statutory language of Ark. Code Ann. § 23-32-1005 (1987) and argues that “the last amendment of the applicable statute removes all doubts as to the ownership to the funds under consideration.” Ark. Code Ann. § 23-32-1005 (1987) provides:

Checking accounts and savings accounts may be opened and certificates of deposit may be issued by any banking institution, or federally or state-chartered savings and loan association, in the names of two (2) or more persons, either minor or adult, or a combination of minor and adult. Checking accounts, savings accounts, and certificates of deposit shall be held and payable as follows:
(2) (A) If the person opening the account or purchasing the certificate of deposit designates in writing to the banking institution or federally or state-chartered savings and loan association that the account or the certificate of deposit is to be held in “joint tenancy” or in “joint tenancy with right of survivorship,” or that the account or certificate of deposit shall be payable to the survivor or survivors of the persons named in the account or certificate of deposit, then the account or certificate of deposit and all additions thereto shall be the property of those persons as joint tenants with right of survivorship.
(C) The opening of the account or the purchase of the certificate of deposit in this form shall be conclusive evidence in any action or proceeding to which either the banking institution or federally or state-chartered savings and loan association or the surviving party is a party of the intention of all of the parties to the account or certificate of deposit to vest title to the account or certificate of deposit, and the additions thereto, in such survivor.

Dorothy Edwards established the Merrill Lynch account on May 4,1973, in the names of “Mrs. Dorothy Edwards and Mrs. Virginia Hall as joint tenants with right of survivorship.” The signature card also included language providing “upon the death of either of us, all securities, funds, and property in the account shall be the sole property of the survivor.” Ark. Code Ann. § 23-32-1005 (1987) applies to checking accounts, savings accounts, and certificates of deposit issued by any banking institution, or any state chartered savings and loan association.

With respect to the Merrill Lynch account, § 23-32-1005 purports to regulate only banking institutions and federally and state chartered savings and loan associations. Hence, under the wording of the statute the opening of the Merrill Lynch account by Mrs. Hall and Mrs. Edwards as joint tenants with right of survivorship is not deemed conclusive evidence of intent and the trial court did not err by admitting evidence of Dorothy Edwards’s intent in placing Mrs. Virginia Hall’s name on the Merrill Lynch account. The trial court admitted as evidence a typed letter from Virginia Hall addressed to “Hazel & Pete” (Mr. and Mrs. F.A. Russ), making reference to the Merrill Lynch account and the savings account. In this letter Mrs. Hall asked “have you got her Merrill Lynch or the savings yet. My name is or was on all those things so I could get it out for you.” Additionally, Mrs. Virginia Hall testified that her name was on the Merrill Lynch account to help Mrs. Edwards manage her money and to distribute this money on her death as provided for in her will. It is clear from the testimony that Mrs. Hall made no contributions to the Merrill Lynch account.

We review chancery cases de novo, reversing the chancellor only if her findings and conclusions are clearly against the preponderance of the evidence. Mabry v. McAfee, 301 Ark. 268, 783 S.W.2d 356 (1990). Here, the trial court determined that a confidential relationship existed between Dorothy Edwards and Virginia Hall. Furthermore, the trial court found that it was not Mrs. Edwards’s intention that funds from the Merrill Lynch and Superior Federal accounts pass to the appellant. As Ark. Code Ann. § 23-32-1005(2)(C) does not govern, we find the admission of extrinsic evidence evincing Mrs. Edwards’s intent appropriate, and we do not find that the trial court’s findings were clearly against the preponderance of the evidence. However, as to the admission of extrinsic evidence of intent as to the Superior Federal account, we must reverse the trial court’s ruling.

Dorothy Edwards established an account at Superior Federal Bank on May 8,1984, well after the enactment of Ark Code Ann. § 23-32-1005 (1987). The signature card for the savings account contained the names of “Mrs. Dorothy Edwards or Mrs. Virginia Hall as joint tenants with the right of survivorship and not as tenants in common and not as tenants by the entirety.” This account represented a savings account, later transformed into a certificate of deposit. Ark. Code Ann. § 23-32-1005(2)(C) (1987) governs, as Superior Federal is a banking institution issuing a certificate of deposit.

We have not previously addressed the underlying question of whether in the absence of fraud, extrinsic evidence will be allowed to reflect the intent of the parties in establishing joint accounts with right of survivorship. In Hayse v. Hayse, 4 Ark. App. 160, 630 S.W.2d 48 (1982), the Court of Appeals interpreted Ark. Stat. Ann. § 67-552(a) (1980) and Ark. Stat. Ann. § 67-552(b) (1980), predecessor to Ark. Code Ann. § 23-32-1005 (1987). In Hayse the appellee purchased a certificate of deposit in her name and in the appellant’s name, causing the certificate to be issued in joint names. In claiming the proceeds of the certificate, the appellant relied on the language of Ark. Stat. Ann. § 67-552 (1987) which provided when a person purchased a certificate of deposit and designated it as being held in joint tenancy, the opening of the account in this manner shall be conclusive evidence of the intention of all the parties. (Arguably, simply purchasing the certificate in joint names did not suffice to designate that the account was held in joint tenancy.) The Court of Appeals held that the mere issuance of the certificate of deposit in the names of both parties without other manifestations of intent did not create any interest in the appellant. The Court, quoting from Black v. Black, 199 Ark. 609, 135 S.W.2d 837 (1940), reasoned that this statute protected banks and failed to vest title in depositors.

We find that the language of Ark. Code Ann. § 23-32-1005(2) (A) and (C) is clear; the opening of the account in the name of two or more persons designated as joint tenants or as joint tenants with right of survivorship “shall be conclusive evidence in any action or proceeding to which. . .the surviving party is a party of the intention of all of the parties to the account. . .to vest title to the account. . .in such survivor.” (Our emphasis.) The first rule to be applied in statutory construction is to give the words in the statute their usual and ordinary meaning. If there is no ambiguity we give a statute effect just as it reads. Pledger v. Ethyl Corp., 299 Ark. 100, 771 S.W.2d 24 (1989).

The statute declares that the establishment of the account as joint tenants provides conclusive evidence of the intention of all parties. The signature card for the Superior Federal account provided that Dorothy Edwards and Virginia Hall held the account as joint tenants with right of survivorship. Moreover, the signature card suffices to provide written designation to the bank that the account is held in joint tenancy. Therefore, the trial court erred in considering extrinsic evidence as to Dorothy Edwards’ intent, and the funds in this account belong to the appellant as surviving joint tenant.

III.

THE CHANCERY COURT PROPERLY EXERCISED JURISDICTION.

Appellant contends the chancery court lacked the authority to “create” or “establish” a constructive trust. A constructive trust is an implied trust and unlike an express trust it is not created but arises by the operation of law when equity so demands. While a confidential or fiduciary relationship does not in itself give rise to a constructive trust, an abuse of confidence rendering the acquisition or retention of property by one person unconscionable against the other suffices generally to ground equitable relief in the form of the declaration and enforcement of a constructive trust. 76 Am. Jur. 2d Trusts § 228 (1975). Here, the trial court determined that a confidential relationship existed between Dorothy Edwards and Virginia Hall. An abuse of such relationship by Virginia Hall resulted in the trial court finding that a constructive trust existed. Ark. Code Ann. § 16-13-304(a) (Supp. 1989) states that “chancery court shall have original jurisdiction in all matters in equity. . . .’’Asa constructive trust is an equitable remedy, the chancery court properly maintained jurisdiction.

IV.

THE CHANCERY COURT PROPERLY EXERCISED JURISDICTION OVER THE PARTIES.

The appellant argues that F.A. Russ, executor of the estate of Dorothy Edwards, is not the proper party to prosecute the claims of the alleged beneficiaries. She maintains that the death of Dorothy Edwards automatically terminated her interest in the two accounts. Therefore, the appellant characterizes the claims of the alleged beneficiaries as claims against the trust, and not claims against the estate of Dorothy Edwards. The appellant states that “those parties, who might be in a position to contend that there was a trust, are the beneficiaries themselves. F.A. Russ, Executor, can claim only the right which the decedent, Dorothy Edwards, could have complained of and under no circumstances could her estate receive property which did not survive her death.” Appellant’s argument misconstrues the nature of a constructive trust. As noted above, a constructive trust is an implied trust; it arises by operation of law to satisfy the demands of justice. As stated in Grissom v. Bunch, 227 Ark. 696, 301 S.W.2d 462 (1957):

“[W]henever the legal title to property, real or personal, has been obtained through actual fraud, misrepresentations, concealments, or through undue influence, duress, taking advantage of one’s weakness or necessities, or through any other similar means or under any other similar circumstances which render it unconscientious for the holder of the legal title to retain and enjoy the beneficial interest, equity impresses a constructive trust on the property thus acquired in favor of the one who is truly and equitably entitled the same. . . .”

F. A. Russ, Executor of the Estate of Dorothy Edwards, became a party to this action when Superior Federal Bank named him in its amended counterclaim and third party complaint for interpleader. Additionally, Russ filed a counterclaim against Superior Federal and a cross-complaint against the appellant in an attempt to recover the assets of the estate of Dorothy Edwards. As executor, Russ was under a duty to discover and to administer all assets of the decedent. See Ark. Code Ann. § 28-49-103 (1987). Additionally, it was Russ’s duty to decide whether to claim property held by the decedent in joint tenancy with right of survivorship. Finding no error, we affirm.

V.

THE TRIAL COURT PROPERLY ADMITTED PAROL EVIDENCE AS TO THE DECEDENT’S INTENT REGARDING THE MERRILL LYNCH ACCOUNT.

Appellant contends the signature cards for the respective accounts represented a written contract between the parties and the bank. Thus, she maintains the trial court erred in admitting parol evidence to alter the terms of the written contract, i.e., joint tenancy. Strictly speaking, the trial court did not admit parol evidence to alter the signature cards. The extrinsic evidence admitted by the court proved facts sufficient for her to find that a constructive trust existed, concluding therefrom that Mrs. Edwards never intended for appellant to receive her money. A constructive trust is not within the statute of frauds and may be proved by parol evidence. Grissom v. Bunch, 227 Ark. 696, 301 S.W.2d 463 (1957). Thus, the trial court properly admitted extrinsic evidence as to the Merrill Lynch account. As discussed under point II, we believe it was error for the trial court to admit extrinsic evidence as to Mrs. Edwards’ intent in establishing the Superior Federal account.

VI.

F.A. RUSS, EXECUTOR, SUSTAINED THE BURDEN OF PROOF IN ESTABLISHING THAT A CONSTRUCTIVE TRUST SHOULD BE IMPOSED UPON THE FUNDS IN THE MERRILL LYNCH ACCOUNT.

Appellant contends that the appellees’ failed to sustain the burden of proof to support the imposition of a constructive trust. As discussed above, we modify the trial court’s decree, by ordering a constructive trust impressed only as to those funds in the Merrill Lynch account. Appellant argues that Ark. Code Ann. § 23-32-1005 (1987) governs and eliminates any dispute as to the intent of parties establishing joint accounts. We agree that Ark. Code Ann. § 23-32-1005 (1987) is applicable to the Superior Federal account and thus do not impose a constructive trust on these funds. However, the statute does not govern the Merrill Lynch account and we find the testimony, in addition to the letter written by the appellant to Hazel and Pete Russ, is clear and convincing evidence to support the imposition of a constructive trust based upon a confidential relationship. Bramlett v. Selman, 268 Ark. 457, 597 S.W.2d 80 (1980).

We affirm in part and reverse in part. We reverse the trial court in finding that a constructive trust should be imposed on the funds in the Superior Federal Bank account, therefore, the funds in this account pass to the appellant. We affirm the trial court in imposing a constructive trust on the funds in the Merrill Lynch account and the money in this account passes to the estate of Dorothy Edwards.

We order that Superior Federal Bank pay to the appellant $52,474.22, plus interest; we order Merrill Lynch to pay the estate of Dorothy Edwards $33,212.48, plus interest. Superior Federal Bank, and Merrill Lynch, Pierce Fenner & Smith, Inc. will not be assessed attorneys’ fees or a penalty for nonpayment as they acted only in obedience to the orders of the probate court.

Newbern, J., not participating.

SUPPLEMENTAL OPINION ON DENIAL OF REHEARING

SEPTEMBER 17, 1990

794 S.W.2d 611

Petition for Rehearing; granted to the extent earlier opinion is modified.

Homer Tanner, for appellant.

Hilburn, Calhoon, Harper, Pruniski & Calhoun, Ltd., by: Scott E. Daniel, for appellee Merrill Lynch, Pierce, Fenner & Smith, Inc.

Hardin, Lesson & Dawson, by: L. Leslie Evitts III, for appellee Superior Federal Bank.

Steele Hays, Justice.

By petition for rehearing appellee, Merrill Lynch, Pierce, Fenner & Smith, Inc. (Merrill Lynch) points out that our opinion of July 16,1990, orders Merrill Lynch to pay $33,212.48, plus interest, to the estate of Dorothy Edwards; that while $33,212.48 represented the original investment in 1973, its current balance is less than that due to subsequent withdrawals — a fact the Chancellor recognized in her final order of November 15,1989, by virtue of the following provision:

That the decree of this court rendered on August 30, 1989, incorrectly ascertains the amount in controversy on deposit at MERRILL LYNCH, PIERCE, FENNER & SMITH to be the sum of Thirty Three Thousand Two Hundred Twelve and 48/ioo ($33,212.48) Dollars and that this error shall be corrected at a later date to reflect the actual amount now on deposit at MERRILL LYNCH, PIERCE, FENNER & SMITH, which includes undistributed dividends subsequent to the date of death of DOROTHY EDWARDS, deceased.

Merrill Lynch further asserts that all parties to this litigation have recognized the fluctuating value of the Merrill Lynch account and that it would be necessary to liquidate the fund on the open market with attendant fees and expenses before a final balance could be determined. Appellant concurs in the petition of Merrill Lynch.

The petition for rehearing is granted to the extent that our original opinion is modified accordingly and the case is remanded to the trial court for such further orders as may be necessary to determine the correct amount due the appellant from appellee, Merrill Lynch.

Newbern, J., not participating.


author: Tom Glaze, Justice. Dale Price, Justice,

text:
    Paul COZAD v. STATE of Arkansas
    CR 90-21
    792 S.W.2d 606
    Supreme Court of Arkansas
    Opinion delivered July 16, 1990
    [Rehearing denied September 10, 1990.]

      Jeff Rosenzweig, for appellant.

      Steve Clark, Att’y Gen., by: John D. Harris, Asst. Att’y Gen., for appellee.
   Tom Glaze, Justice.

Appellant was charged under the rape statute, Ark. Code Ann. § 5-14-103 (1987), with engaging in deviate sexual activity with a person under fourteen years of age. The victim is the daughter of Cathy Lewellyn, who held herself out to be Cozad’s wife at the time of the crime. Appellant was convicted of rape and sentenced as a habitual offender to forty years imprisonment.

In his appeal, the appellant argues that the trial court erred in overruling his asserted privilege under Ark. Code Ann. § 17-39-107 (1987) involving a conversation he had with a certified licensed social worker. The trial court ruled that, pursuant to Ark. Code Ann. § 12-12-511 (Supp. 1989), the social worker could testify about her conversation with the appellant. In addition, the appellant argues that the trial court erred in not ruling that A.R.Cr.P. Rule 36.4 is unconstitutional. We find no error and therefore affirm.

Since the appellant does not challenge the sufficiency of the evidence, only the following information is needed in resolving the privilege issue he argues on appeal. On the evening of Friday, August 19,1988, Cathy Lewellyn said that she came home early from work and discovered that a sexual movie was being played on the television and her thirteen-year-old daughter was performing oral sex on the appellant. Mrs. Lewellyn testified that, shortly after she discovered the appellant with her daughter; the appellant called someone on the phone, and told that person that “he needed help, that that wasn’t what normal people do.”

The following Monday, the appellant and Mrs. Lewellyn went to see Gwyn Price-Pickard, a social worker at Professional Counseling Associates. At trial, Ms. Price-Pickard testified that the appellant told her that he was in a stupor or unconscious condition that Friday evening and that prior to, and at, the time his wife walked in, he was not aware of what was taking place. This testimony was admitted into evidence over appellant’s strenuous objections that it was a privileged communication. The appellant’s defense at the trial was that he was in Oklahoma working at the time the crime was alleged to have been committed. The appellant conceded that on the following Monday, he did take Mrs. Lewellyn to “her” appointment with Ms. PricePickard, but when asked, he told the social worker that he had no knowledge of the episode Mrs. Lewellyn claimed occurred on the prior Friday.

In the appellant’s first issue, we are asked to address the conflict, if any, between Ark. Code Ann. §§ 12-12-511 and 17-39-107. Below and on appeal, the appellant argues that, under the terms of § 17-39-107, his conversation with the social worker is privileged. This privilege is contained in the Social Work Licensing Act, Act 791 of 1981, and provides the following:

No licensed certified social worker, licensed master social worker, or licensed social worker or his secretary, stenographer, or clerk may disclose any information he may have acquired from persons consulting him in his professional capacity to those persons. . . . (Emphasis supplied.)

The foregoing provision continues to list four exceptions where the information would not be privileged, but none are applicable here.

The state argued successfully below that § 12-12-511 was in existence when § 17-39-107 was enacted, and specifically provides that no privilege exists “at any proceeding” involving the sexual abuse of children. Section 12-12-511 is part of the Child Abuse Reporting Act, Act 397 of 1975, and provides as follows:

Any provision of the Arkansas Uniform Rules of Evidence notwithstanding, any privilege between husband and wife or between any professional person, except lawyer and client including, but not limited to, physicians, ministers, counselors, hospitals, clinics, day care centers, and schools and their clients shall not constitute grounds for excluding evidence at any proceeding regarding child abuse, sexual abuse, or neglect of child or the cause thereof (Emphasis supplied.)

The appellant argues that §12-12-511 was intended to apply only to civil, and not criminal proceedings. We disagree.

A primary rule in statutory construction is to ascertain and give effect to the intent of the General Assembly and this intent is obtained by considering the entire act. Henderson v. Russell, 267 Ark. 140, 589 S.W.2d 565 (1979). In determining the legislature’s intent in passing § 12-12-511, we must look at other parts of the Child Abuse Reporting Act. See State v. Brown, 283 Ark. 304, 675 S.W.2d 822 (1984). To begin with, we look at the Act’s purpose which provides the following:

It is the purpose of this subchapter, through the use of complete reporting of child abuse, to protect the best interests of the child, to prevent further harm to the child, to stabilize home environment, to preserve family life, and to encourage cooperation among the states in dealing with child abuse.

Next, we note that “sexual activity” is defined by the Act as any act of deviate sexual activity, sexual intercourse, or contact as set out and defined in the Arkansas Criminal Code and its amendments. The Act also mandates that written reports concerning instances or allegations of child abuse, sexual abuse and neglect be given to the prosecuting attorney’s office and appropriate law enforcement agency. Ark. Code Ann. § 12-12-507(c) (Supp. 1989); see also Ark. Code Ann. § 12-12-508(f) (Supp. 1989). Furthermore, § 12-12-507(d) (Supp. 1989) provides that a written report from persons or officials required by this Act shall be admissible in evidence in “any proceeding” relating to child abuse, sexual abuse or neglect.

In the same Act, §12-12-513 by its language applies to only dependency or neglect cases. That provision allows for a court ordered examination by a physician, psychologist, or psychiatrist of the parents or custodian after a finding of dependency or neglect. The information obtained from the court ordered examination is excluded from use in any subsequent criminal proceedings against the person or custodian concerning the abuse or nonaccidental injury of the child. Ark. Code Ann. § 12-12-513(c).

On the other hand, notably missing from § 12-12-511, and from 12-12-507, is language providing an exclusion of such information from use in criminal proceedings. Unlike § 12-12-513, § 12-12-511 contains no limiting language to its use in criminal proceedings, but instead uses the term, “any proceeding.” Also, it does not concern court ordered examinations. In addition, a reading of § 12-12-510, which provides that a person who in good faith makes a report of child abuse shall be immune from civil or criminal liability, shows that the legislature was contemplating criminal as well as civil proceedings.

While this court has never addressed this issue before, we have previously indicated that the Child Abuse Reporting Act applied to criminal proceedings. See Poyner v. State, 288 Ark. 402, 705 S.W.2d 882 (1986). The appellant, in Poyner, was appealing from a conviction of two counts of rape and two counts of incest involving his son and daughter. In this case, we suggested that statements made by the children to the witnesses would be admissible under A.R.E. 803(25)(A) and Ark. Code Ann. § 12-12-507(d) and 12-12-511.

Further, the rules of statutory construction applied to conflicting provisions do not mandate a different result. We have held that a general statute does not apply when there is a specific statute covering a particular subject matter. Cogburn v. State, 292 Ark. 564, 732 S.W.2d 807 (1987). Here, § 17-39-107 provides a general privilege for a person consulting with a social worker in his or her professional capacity. But, § 12-12-511 is a specific statute that applies an exception when dealing with proceedings regarding child abuse, sexual abuse or neglect of a child. In addition, we have often stated that it will be presumed that the legislature intended to use words in their usual and natural meanings. Simmons First National Bank v. Abbott, 288 Ark. 304, 705 S.W.2d 3 (1986). Thus, “any proceedings” regarding sexual abuse of a child should include a criminal prosecution for rape.

In the appellant’s second issue, he argues that the trial court erred in not ruling A.R.Cr.P. Rule 36.4 unconstitutional. Rule 36.4 was enacted after A.R.Cr.P. Rule 37 was abolished; it provides for a defendant to make his or her argument regarding ineffective assistance of counsel on direct appeal. Specifically, the appellant contends that he would be prejudiced by having this court consider his ineffective assistance of counsel claim with his arguments on the merits of his case on appeal. While the appellant had a hearing below pursuant to Rule 36.4, the appellant did not argue his case for ineffective assistance of counsel. Instead, he handed a sealed envelope to the trial judge which contained the proffered testimony of the appellant’s former attorney, rather than requesting an in camera hearing on these matters under A.R.Cr.P. Rule 19.6. Appellant presented no evidence or testimony to the court below, and we are unable to consider evidence for the first time on appeal.

We first note that the appellant has cited the court no authority to support his contention that the procedure of Rule 36.4 is unconstitutional. Dixon v. State, 260 Ark. 857, 545 S.W.2d 606 (1977). It is well settled that the party challenging the statute has the burden of proving that it is unconstitutional. Dutton v. State, 299 Ark. 503, 774 S.W.2d 830 (1989). Secondly, since the appellant did not argue his ineffective assistance claim below, we cannot address his Rule 36.4 arguments on appeal. As ve have repeatedly stated, we do not issue advisory opinions.

For the reasons stated above, we affirm.

Newbern and Price, JJ., dissent.

Dale Price, Justice,

dissenting. I respectfully dissent. The appellant argues that Ark. Code Ann. § 12-12-511 (Supp. 1989) was intended to apply only to civil proceedings, not criminal proceedings, and I agree.

The state argues that the broad privilege provided in Ark. Code Ann. § 17-39-107 (1987) is limited by the earlier enactment of § 12-12-511 and that, under § 12-12-511, no privilege exists at any proceeding when evidence involves child abuse, sexual abuse, or neglect of a child. However, when examining § 12-12-511 in light of the other provisions contained in the Child Abuse Reporting Act, it is clear that the “proceeding” to which § 12-12-511 directs itself is one for dependency or neglect, not a criminal proceeding. Section 12-12-513 (a)(1), for example, provides that the court, when it makes a finding of dependency or neglect, may order, on its own motion or one by a guardian ad litem, the examination by a physician, psychologist, or psychiatrist of any parent or other person responsible for the care of the juvenile at the time of the alleged abuse, sexual abuse or neglect. Clearly § 12-12-513, by its own terms, refers to a civil dependency/ neglect proceeding, not a criminal one. In addition, § 12-12-513(c) specifically excludes any evidence acquired from the court ordered examination from use against the parent or person in any subsequent criminal proceeding.

Other statutory provisions of the Child Abuse Reporting Act also appear to involve civil juvenile proceedings. For example, § 12-12-501 sets forth the purposes of the Act and in doing so alludes not only to the Act’s intent to prevent further harm to the child, but also to the Act’s intent to stabilize the home environment and preserve family life. The Department of Human Services, upon receiving reports of abuse, is required to initiate an investigation of any suspected child abuse or neglect, see § 12-12-507, and, where necessary, the juvenile court is required to order the parents or persons responsible for the care of the child to allow the investigating agency to enter the child’s residence for interviews, examinations, and investigations. See § 12-12-508.

Reports made under the Act, including those reports and information possessed by the Department of Human Services, are confidential and can only be disclosed for the six purposes listed under § 12-12- 515. In reading those purposes, no mention is made of criminal proceedings. To the contrary, the focus of those limited disclosures is primarily directed at the administration of plans or programs involving the child. In this regard, § 12-12-515 (a) (3) allows disclosure of child abuse or neglect reports to be used in a civil proceeding connected with the administration of a plan or program where the court determines that information is necessary for the determination of an issue before the court.

The Child Abuse Reporting Act fosters the reporting of suspected child abuse and neglect. At the same time, the Act encourages or mandates all parents or custodians of the child to participate in any required investigation and juvenile court proceeding that ensues. To achieve such participation, § 12-12-511 provides that evidence or confessions resulting from counseling between the person accused of child abuse or neglect and any professional person shall not be excluded from the proceeding. If, as the state suggests, such evidence can later be used in a criminal proceeding against the accused person, that person is unlikely to participate in any plan or program designed by the Department of Human Services or adopted by the juvenile court to protect the child, preserve the family and stabilize the home environment.

For the reasons given, I believe that, while information gathered by professional persons from parents or custodians of children can be used in a dependency or neglect proceeding before a juvenile court, the General Assembly, by its enactment of the Child Abuse Reporting Act, did not intend to, permit such information to be introduced against the parent or custodian in a criminal proceeding. Therefore, I would reverse and remand.

Newbern, J., joins in this dissent.

       We note the state’s inference that the exception in § 17-39-107(2) would apply here. This exception applies when the communication reveals the contemplation of a crime or harmful act. There is no showing in the record that the appellant revealed plans for a future crime or harmful act to the social worker, so this exception clearly would not apply.

         This provision was later amended by Act 421 of 1989 which added an exception for the privilege between a person confessing to or being counseled by a minister except in dependent/neglect cases or child custody cases.


author: Otis H. Turner, Justice. Steele Hays, Justice, Tom Glaze, Justice,

text:
    ARKANSAS DEPARTMENT OF POLLUTION CONTROL AND ECOLOGY v. B.J. McADAMS, INC.
    89-349
    792 S.W.2d 611
    Supreme Court of Arkansas
    Opinion delivered July 16, 1990

      Laura L. Mack and Steve Weaver, for appellant.
    No brief filed.
   Otis H. Turner, Justice.

In this original suit instituted in circuit court by the appellant, the Arkansas Department of Pollution Control and Ecology, the only question on appeal is whether the trial court properly dismissed the .action on the ground that it had no jurisdiction to consider the matter prior to an administrative hearing by the department.

There is no factual dispute regarding the incidents leading up to this appeal. The appellant attempted without success to get the appellee, B.J. McAdams, Inc., to correct an ongoing pollution problem. The violation ceased, and attempts were made to set an agreed penalty for the violations. Those frustrated attempts resulted in the appellant bringing this action in circuit court pursuant to Ark. Code Ann. § 8-4-207 (Supp. 1989), alleging that the appellee “has been extremely uncooperative, hostile and recalcitrant in dealing with the Arkansas Department of Pollution Control and Ecology. Therefore, plaintiff prays that a civil penalty be assessed against the defendant in the amount of $10,000.”

At the time of the filing of the department’s complaint, the violation had ceased, the appellant was not seeking a restraining order or any other remedial measure, and the $10,000 civil penalty requested was in addition to all costs and expenses.

Arkansas Code Annotated § 8-4-103 provides:

(b) The Department of Pollution Control and Ecology is authorized to institute a civil action in any court of competent jurisdiction to restrain any violation of, and to compel compliance with, provisions of this chapter and any rules, regulations, orders, or permits issued pursuant thereto to require the taking of such remedial measures as may be necessary or appropriate to implement or effectuate the provisions and purposes of this chapter or to recover any expenses reasonably incurred by the department in removing, correcting, or terminating any adverse effects resulting therefrom. These purposes may include the cost of investigation, inspection, or survey establishing such violation or unlawful act. . . .
(c) Any person who violates any provision of this chapter or the regulations issued pursuant to this chapter, or who violates any condition of a permit issued under this chapter, may:
(1) In accordance with the regulations issued by the commission, be assessed a civil penalty by the commission. The penalty shall not exceed $5,000 for each violation and each day of a continuing violation may be deemed a separate violation for purposes of penalty assessments. However, no civil penalty may be assessed until the person charged with the violation has been given the opportunity for a hearing on the violation pursuant to sections 8-4-205, 8-4-212, and 8-4-218—8-4-221. Appeal of the commission’s decision may be taken in accordance with the appellate procedure specified in sections 8-4-222—8-4-229;
(2) In any civil action instituted by the department under this chapter, be assessed a civil penalty by the court. The penalty shall not exceed $5,000 for each violation. Each day of a continuing violation may be deemed a separate violation for purposes of penalty assessments.

The original legislative act contained only the provisions for a “civil action.” A 1983 amendment supplemented the original act by adding subsection (b), the provision against violators to be assessed by the commission.

The problem with this case is that it is neither fish nor fowl. It is an attempt on the part of the appellant to obtain assessment of a civil penalty by the circuit court without filing any civil action under Ark. Code Ann. § 8-4-103(b). There was no current violation at the time the appellant sought the penalty. The plain wording of Ark. Code Ann. § 8-4-103(b) only grants to the trial court jurisdiction to hear civil actions filed by the department “to restrain any violation of, and to compel compliance with, provisions of this chapter and any rules, regulations, orders, or permits issued pursuant thereto. . . .”

Here, the violation had ceased, and the commission, pursuant to Ark. Code Ann. § 8-4-103(c)(1) was empowered, without filing any civil action but pursuant to its regulations, to assess a penalty. This is a provision which is not authorized by the statute.

Admittedly, a clean environment is of major importance and promotes the public welfare. Yet the regulations and the procedures to be followed in the enforcement of those regulations are matters to be left to the legislative process. The legislature has spoken by the enactment of Ark. Code Ann. §8-4-103 (b) and (c). The provisions of § 8-4-103(c)(l) should have been followed, as held by the trial court, and the trial court’s dismissal is affirmed.

Affirmed.

Hays and Glaze, JJ., dissent.

Steele Hays, Justice,

dissenting. These statutes are less than crystal clear and I concede that an arguable basis exists for the construction adopted by the majority. But other things being equal, as I believe they are, there are stronger reasons to prefer the interpretation urged by the Department, reasons supported by sound policy considerations. ■

Whether we construe section (b) so that penalties are included in the remedies allowed the court “to compel compliance” or we find provision for an independent action for penalties only, under section (c)(2), I believe the Department is correct, that it was error for the trial court to dismiss the suit.

First, these statutes are remedial in nature — they seek “the correction of recognized errors and abuse in introducing some new regulation for the advancement of the public welfare.” 73 Am. Jur. IdStatutes § 278,279 (1974). “Statutes enacted for the public benefit should be interpreted most favorably to the public.” Arkansas Gazette Co. v. Pickens, 258 Ark. 69, 522 S.W.2d 350 (1975). “Such statutes should receive such construction as would effect their object, suppress the mischief, advance the remedy, and defeat al evasions for the continuance of the mischief.” 73 Am. Jur. 2d Statutes § 281 (1974). Moreover, remedial statutes are to be liberally construed. Aluminum Co. of America v. Neal, 4 Ark. App. 11, 626 S.W.2d 620 (1982). The growing indications of irreversible environmental damage are so prevalent they need no documentation. Hence, if we are to err in interpreting these statutes, it should be on the side of a broad, as opposed to a narrow, construction.

Second, agency interpretations of statutes, while not binding on this court, are afforded great deference. Arkansas Department of Human Services v. Green Acres Nursing Homes, Inc., 296 Ark. 475, 757 S.W.2d 563 (1988); Arkansas Public Service Commission v. Allied Telephone Co., 274 Ark. 478, 625 S.W.2d 515 (1981). Such deference has been granted by the federal courts in their interpretations of federal environmental statutes. 61A Am. Jur. 2d Pollution Control § 179 (1981). Here, the Department has concluded that it is given a choice between administrative proceedings and instituting civil suits, because a civil suit may be preferable to administrative proceedings where urgency is required in discharging the duties imposed on the Department.

While the rules of statutory construction favor the Department, there is also a sound basis for concluding that the legislature intended to provide the Department with an option to proceed directly with a civil suit. In matters of environmental damage time can be of the essence — to restrain pollution or to assess damages and begin any necessary clean up. The delay involved in following the route of traditional administrative remedies could contribute to greater, even irreparable, damage in some cases. Similar federal environmental statutes have been held to afford the same direct action. 2 W. Rogers, Environmental Law, § 4.40 (1986); and see e.g., United States v. Earth Sciences, Inc., 599 F.2d 368 (10th Cir. 1979).

For the foregoing reasons, I would hold the Department was authorized to institute this civil suit for penalties in the circuit court, in the first instance, and that court had jurisdiction to hear the case.

Glaze, J., joins this dissent.

Tom Glaze, Justice,

dissenting. The majority recites but fails to discuss Act 529 of 1987, codified as Ark. Code Ann. § 8-4-103(c)(2) (Supp. 1989), which authorizes a court to assess a civil penalty up to $5,000.00 for each violation of the Arkansas Water and Air Pollution Control Act. Act 529 merely gave the Department of Pollution Control and Ecology Commission the option to assess a civil penalty or to request a court to do so. In my view, that is all this case entails. Appellee had been properly notified of its infractions by the Commission, but it continued to violate the law another fourteen months before the Commission filed this action. After appellee ceased violating the law, the Commission filed suit for the court to assess penalties for the period the appellee had violated the law. The majority holds the Commission was too late because the court could only assess penalties in a proceeding brought to restrain appellee from violating the law. Such a construction of the state’s Water and Air Pollution Control Act is much too restrictive. Under such a construction, a violator could continue its unlawful acts with impunity until the Commission actually filed its suit in court or took formal administrative action.

In my opinion, § 8-4-103 (c)(2) clearly authorized the circuit court to assess penalties for the period appellee violated Arkansas’s Water and Air Pollution Control Act. Therefore, I would reverse and remand this cause to exercise its jurisdiction in this regard.

Hays, J., joins this dissent.


author: Otis H. Turner, Justice. Steele Hays, Justice,

text:
    Norman L. BURNETTE, d/b/a Burnette Flying Service v. Billy MORGAN
    89-351
    794 S.W.2d 145
    Supreme Court of Arkansas
    Opinion delivered July 16, 1990

      Butler, Hicky & Long, for appellant.

      Easley & Hicky, for appellee.
   Otis H. Turner, Justice.

This appeal is from a jury verdict awarding $ 109,256.60 in damages to the appellee, the holder of a leasehold interest. The damages resulted from the drifting of sodium chlorate, a chemical applied aerially to a wheat crop, onto adjacent apple orchards and a peach orchard leased by the appellee.

At the time of the occurrence, in May, 1985, the appellee had about nineteen months remaining on a five-year lease of a fifty-acre apple orchard, which was some two years old. Additionally, he had leased a mature five-acre apple orchard that was about ten years old and a fifty-acre peach orchard that was about three years old.

The appellee sought damages for a loss to the fifty-acre apple orchard from 1986 through 1989. It was, admittedly, a young, non-fruit-bearing orchard in 1985, and thus no damages occurred in that year. He also sought damages for injuries to the five-acre apple and fifty-acre peach orchard for 1985. The damages beyond the 1986 crop year arose from the appellee’s exercise of an option to renew the basic lease.

The damage issue, standing alone, warrants a reversal. However, this appeal is further complicated by a conflict-of-interest issue involving counsel for the appellant.

When the damage suit was filed in 1985, the appellant was represented by the law firm of Butler, Hicky and Routon, Ltd. (Butler-Hicky), in which Preston G. Hicky was a partner. ButlerHicky was retained to defend the claim by Crump Aviation Underwriters, appellant Burnette Flying Service’s insurance underwriter that issued the specialized liability coverage for aerial chemical spraying. Crump Aviation Underwriters was a Butler-Hicky client of long standing.

Preston Hicky had been with the Butler-Hicky law firm for fourteen years and a partner sharing proportionately in the firm’s income for about thirteen years. From November 1, 1985, the date the answer was filed by Butler-Hicky, the Butler-Hicky firm represented the appellant in defending this case. Statements for accrued legal fees and expenses were submitted by Butler-Hicky and paid prior to February 1,1987, with Preston Hicky receiving his proportionate share. During the same period, Preston Hicky made at least one appearance on behalf of the appellant at a docket call, and, though not the lead attorney in the case, he testified that quite possibly he had discussed the facts with Phil Hicky, his partner at the time and the lead attorney representing the appellant.

On January 31, 1987, Preston Hicky left the Butler-Hicky firm and on February 2,1987, became a partner with B. Michael Easley in the new firm of Easley & Hicky. Easley was at all times the attorney for the appellee in this case.

Prior to trial, the appellant moved to disqualify Easley & Hicky from representing the plaintiff. The court denied the motion. It is important to note that in another unrelated matter, the court, on a similar motion, made findings which directed Preston Hickey not to participate in any manner in the representation by Easley & Hicky in that case, where the case was being defended by Butler-Hicky. While no such findings were made here, the judge entering the order testified on the motion for a new trial that his intent was to prohibit Preston Hicky from participating in any matter where the conflict-of-interest question was material.

After the verdict and at a hearing on the motion for a new trial, Michael Easley testified that he was aware that ButlerHicky had objected to Preston Hicky’s participation in the matter. In fact, Easley had requested that Phil Hicky permit Preston Hicky to work on the case and was refused. At that time, Preston Hicky, who had an understanding of agricultural issues, was in fact working on the case for Easley & Hicky in preparation for trial.

Preston Hicky testified that he recalled a conversation with Phil Hicky at about the time he left Butler-Hicky in which the question of conflicts of interest arose. During his tenure with Butler-Hicky, Preston Hicky had participated in at least ten cases involving agricultural chemical claims similar to this case. The files he used in those cases contained confidential information, including insurance policies, coverage questions, and technical information concerning the various chemicals that might be involved.

After joining Michael Easley, Preston Hicky worked on this case, outlining questions for depositions of witnesses, preparing rough drafts of briefs, and working on exhibits for use at trial. He also testified that, in preparation for trial, he discussed with Michael Easley the various legal and factual issues and assisted in the drafting of jury instructions. Lastly, if the appellee, Billy Morgan, collects a judgment in this case, Preston Hicky admittedly expects to receive his part of the attorney’s fee as partner in the firm. Under such circumstances, he would have received a fee from both sides in this case.

For reversal, the appellant asserts six errors, four of which deal with rulings or instructions on damages. The other two points for reversal relate to the conflict-of-interest question. We deem the trial court to be in error on both issues and reverse on the issue of conflict of interest. We also address the damages issue because the same problem may surface on retrial.

Addressing first the conflict-of-interest issue, we note that the Model Rules of Professional Conduct, Rule 1.9, prohibits a lawyer who has formerly represented a client in a matter from representing “another person in the same or a substantially related matter in which that person’s interests are materially adverse to the interests of the former client unless the former client consents after consultation.” He is further prohibited from using “information relating to the representation to the disadvantage of the former client.”

Rule 1.10(b) expands the prohibition, providing that:

When a lawyer becomes associated with a firm, the firm may not knowingly represent a person in the same or a substantially related matter in which that lawyer, or a firm with which the lawyer was associated, had previously represented a client whose interests are materially adverse to that person and about whom the lawyer had acquired information protected by Rules 1.6 and 1.9(b) that is material to the mátter.

The “information protected” is any information relating to the representation, not limited to matters communicated in confidence by the client, but also to all information relating to the representation, regardless of its source. See Comment to Rule 1.6, Model Rules of Professional Conduct.

In applying these rules of conduct to a particular situation, we must do so with caution when considering disqualification of counsel. Disqualification is an absolutely necessary measure to protect and preserve the integrity of the attorney-client relationship; yet it is a drastic measure to be imposed only where clearly required by the circumstances. We must never forget that a disqualification, though aimed at protecting the soundness of the attorney-client relationship, also interferes with, or perhaps destroys, a voluntary relationship by depriving a litigant of counsel of his own choosing — oftentimes affecting associations of long standing. The role of the court is to balance the current client’s right to counsel of choice with the former client’s right to protection of confidences transmitted, or likely to have been acquired, during the prior representation.

As was so succinctly stated in Realco Services v. Holt, 479 F.Supp. 867 (E.D. Pa. 1979):

It is easier to find a doubt than to resolve difficult questions of law and ethics. The disruption and prejudice that befall a client whose counsel is disqualified are reasons to avoid a hasty conclusion in favor of disqualification, based merely on a doubt about the propriety of the representation.

The appellant contends that where a firm has previously represented a party, gaining in the process confidential information, an irrebuttable presumption arises, which, in effect, charges other members of the firm with knowledge and thus disqualifies all members in subsequent representation in the same or similar matters where such knowledge would compromise the former client’s rights. We are not willing to give such a strained application to the rules. Indeed, we believe that Rule 1.10 proscribes such representation only when the attorney involved actually has knowledge acquired during the former association. Thus, a rebuttable presumption is created. The entire question of access to confidential information is to be determined by examining the facts of the particular case under consideration.

All inferences, presumptions, and deductions should be considered in resolving the question of disqualification. When disqualification is sought, the burden of proving not only a lack of knowledge but also a lack of access to information should rest with the challenged attorney alleged to be disqualified.

Clearly, under the provisions of Rule 1.10, if it is determined that an individual associated with a law firm is disqualified from participation because of a conflict, then the entire firm must be disqualified.

The appellee argues that no prejudice resulted from Preston Hicky’s participation and therefore no conflict existed. The rules do not require a finding of prejudice in order for a conflict to exist, and we decline to read such a requirement into Rules 1.9 and 1.10.

In thus interpreting the Rules, we are not departing from our recent holding in First American Carriers, Inc. v. Kroger Co., 302 Ark. 86, 787 S.W.2d 669 (1990). There, two members of the same law firm, unaware of each other’s actions, talked with parties with conflicting interests in the same legal matter. We held that the law firm was disqualified from any further representation of either of the parties. In so doing, we relied in part upon an “appearance of impropriety” arising from the dual representation. We recognized that the “appearance of impropriety” prohibition of Canon 9 of the American Bar Association Code of Professional Responsibility was not a part of the Model Rules of Professional Responsibility which we have adopted. Nevertheless, we there recognized and here reassert that the principle is yet alive and, though not controlling, is a rock in the foundation upon which is built the rules guiding lawyers in their moral and ethical conduct. This is a factor that should be considered in any instance where a violation of a rule of professional conduct is at issue.

Without restating the testimony produced at the hearing on the appellant’s motion for a new trial'and set forth earlier in this opinion, there was considerably more than a mere doubt concerning the propriety of the representation. Preston Hicky was so deeply implicated in both sides of this case, as well as his involvement in similar cases in the past while he was associated with Butler-Hicky, that the taint spread, of necessity, to his new partner, Michael Easley. Neither can it be said that Easley is an altogether innocent victim. He testified at the hearing that prior to filing the complaint, he sought the expertise of Phil Hicky and the Butler-Hicky firm in the nature of an association in this case. The offer was declined. Later, after Preston Hicky joined the new firm, Easley asked Phil Hicky of the Butler-Hicky firm to allow Preston Hicky to participate in the case, and Phil Hicky refused to consent. Easley also testified that he was fully aware of ButlerHicky’s allegation of conflict of interest and the firm’s opposition to Preston Hicky’s participation during the time Preston Hickey was working on the case in preparation for trial.

The conduct of Preston Hicky clearly constitutes a conflict of interest, and under these circumstances, the firm of Easley & Hicky is disqualified from representing the appellee.

Moving next to the issue of damages, the appellant asserts four points for reversal. He first contends that the trial court should have granted a motion in limine relating to damages and for partial summary judgment as to any such damages.

The appellant next contends that it was error to admit evidence of loss of future production from the young or immature fifty-acre apple orchard.

The third contention relates to the measure of damages instruction given by the court. The fourth point again alleges that the court should have granted the appellant’s motions in limine and for partial summary judgment relating to damages beyond the term of the basic lease.

These damage issues were argued and answered together in both briefs, and we agree that all are interdependent, if not repetitious. The court’s refusal to grant the motion in limine and partial summary judgment as to damages occurring beyond the basic lease period was incorrect. Further, the court’s Instruction No. 14, on the measure of damages, was an inaccurate statement of the applicable law. All other asserted errors relate to specific evidence, and because the evidence will likely be materially different at a retrial, we find it unnecessary to consider those points.

We do not reverse because of the instruction. The record reflects that though appellant made a timely objection to Instruction No. 14, no instruction was offered which correctly states the applicable law. See Williams v. First Security Bank of Searcy, 293 Ark. 388, 738 S.W.2d 99 (1987). Because this case is remanded for retrial, we choose to discuss the damages question because it was properly placed in issue by pre-trial motion and by objections during trial but was technically waived by a failure to tender a proper instruction.

The measure of damages instruction given by the court over the objection of the appellant stated:

If you decide for Billy Morgan on the question of liability, you must then fix the amount of money which will reasonably and fairly compensate him for any of the following elements of damage: (AMI 2201)
(a) For 1985 damage to his peach crop and his apple crop in the mature orchard, the difference in the fair market value between the crop that the trees would otherwise have produced and the crop that was actually produced, less the difference between what it would have cost to have harvested and marketed an undamaged crop and what it did cost to harvest and market the actual crop. (AMI 2225)
(b) For loss to the young apple orchard for 1986 and subsequent years, you may consider the loss of productivity to the trees. Lost production of the damaged trees equals the value of the apples that would have been produced had the trees not been damaged, less the value of the apples actually produced and saved harvesting expenses.

Subparagraph (b) of Instruction No. 14 is obviously a statement of law that the appellee and the court thought applicable in this instance, though no such instruction is included in Arkansas Model Jury Instructions.

It will be remembered that the appellee’s principal lease expired on December 31,1986. That lease contained an option to renew, and the court permitted the appellee to prove damages allegedly suffered by the leasehold interest for an option term beyond the expiration of the principal term.

We find no instance where this court has had an opportunity to decide the specific issue here — whether one holding a leasehold interest in lands is entitled to recover for any damages to the lands occurring beyond the primary lease term. However, in the early case of Fletcher v. Pfeifer, 103 Ark. 318, 146 S.W. 864 (1912), where the lessee of a building for a fixed term with a privilege of renewal brought an action seéking injunctive relief from interference by the owner of the fee, the Supreme Court held that “a right of action accrues to the tenant on account of the interruption of the enjoyment of his estate and the lessening of the value of the use for the term and to the landlord for the permanent injury to the freehold.” 103 Ark. at 325, 146 S.W. at 866. (Emphasis added.) Admittedly, the Fletcher case is not binding precedent but is some indication that damages to the leasehold should be limited to the term in existence at the time of the wrongdoing.

There can be little doubt that the damages recoverable by a party holding a leasehold estate are separate and distinct from those damages to which the holder of the fee would be entitled, St. Louis, I.M. & S. Ry. v. Hall, 71 Ark. 302, 74 S.W. 293 (1903), and both the lessor and the lessee have a duty to mitigate their damages. Harris Const. Co., Inc. v. Powers, 262 Ark. 96, 554 S.W.2d 332 (1977). Therefore, damages extending beyond the primary term of the leasehold interest should not be damages, recoverable by the holder of the lease through the exercise of an option to renew. This is not to imply that the lessee’s right of extension through exercise of the option is in any manner impaired. However, with knowledge of the impending damages, he should not be permitted to extend the lease period and recover those damages.

Our interpretation of the measure of damages recoverable by the holder of a lease coincides with the stated law in other jurisdictions considering the question.

The Supreme Court of Idaho, in a case involving damages caused from mistakes made in the application and labeling of herbicide resulting in damage to the lessee’s crop, held that the tenant was entitled to recover for the damage to his leasehold during the pendency of the lease. Wing v. Martin, 688 P.2d 1172 (Idaho 1984).

In the case of Binder v. Perkins, 516 P.2d 1012 (Kan. 1973), dealing with damage to crops from the effects of spraying on a neighboring field, the Kansas Supreme Court held that it was error for the trial court to admit evidence of damage beyond the period of the plaintiffs lease in existence at the date of the wrongful act. “It was impossible,” the court stated, “for defendant to injure a right of possession that was not in existence at the time of wrongdoing.” 516 P.2d at 1017.

Upon a retrial, the same proof may not develop; therefore we make no attempt to delineate or restrict any elements of damage which may be properly proved by the lessee, except to say that any damages to the lands and growing crops occurring beyond the term of the lease existing at the time of a wrongful act are not recoverable by the holder of the leasehold estate.

The appellee has filed a motion for assessment of attorney’s fees for the failure of the appellant to properly abstract pursuant to Supreme Court Rule 9(d). We find the motion to be without merit and therefore deny it.

Reversed and remanded.

Hays, J., dissents.

Steele Hays, Justice,

dissenting. I believe the majority is relying too much on appearance and adopts too strict a standard. Two circuit judges examined the ethics issue in detail and found either no impropriety or no prejudice. The majority opinion asserts that disqualification should occur “only when the attorney involved actually has knowledge acquired during the former association.” [Emphasis in the original]. I agree, but the majority points to nothing from the proof which meets that test, other than appearances, and I can find nothing on my own review of the record from which to conclude the two trial judges clearly erred.

Appellant’s brief does not contend that he and Preston Hickey had other than a general conversation or discussed anything that worked to the advantage of the appellee or to the disadvantage of the appellant. In short, I find no evidence that Preston Hickey’s overlapping affiliation with the two firms had any material impact on the case.