author: Donald L. Corbin, Justice.

text:
    Connie BELL v. Robert BERSHEARS
    02-702
    92 S.W.3d 32
    Supreme Court of Arkansas
    Opinion delivered December 12, 2002

      Gary Eubanks & Associates, by: William Gary Holt and Robert S. Tschiemer, for appellant.

      McMillan, Turner, McCorkle & Curry, LLP, by: F. Thomas Curry, for appellee.
   Donald L. Corbin, Justice.

This case involves a dispute over the award of costs following a judgment entered in favor of Appellant Connie Bell against Appellee Robert Bershears. Following entry of the judgment, both parties filed motions seeking an award of costs. Ultimately, the trial court granted Appellee’s motion for costs under Ark. R. Civ. P. 68, but denied Appellant’s motion for costs under Ark. R. Civ. P. 54(d). For reversal, Appellant argues that the trial court’s order denying her costs and granting Appellee’s costs was in error. As this appeal involves an interpretation of this court’s rules, our jurisdiction is pursuant to Ark. Sup. Ct. R. l-2(b)(6). We affirm the trial court’s judgment in part, but we reverse and remand in part.

The record reflects that Appellant filed suit against Appellee, seeking recovery for personal injuries resulting from an automobile collision between the two parties. Prior to trial, Appellee filed an offer of judgment, pursuant to Rule 68, offering to pay Appellant the sum of $13,589.00, together with costs accrued to date. Appellant rejected the offer, and the matter proceeded to trial.

At trial, the jury returned a verdict in favor of Appellant in the amount of $13,200.00. Subsequently, Appellant, as the prevailing party, submitted a motion pursuant to Rule 54(d), seeking an award of costs totaling $1,161.20. This amount represented Appellant’s total costs accrued, both before and after the offer of judgment. Appellee, in turn, filed a motion pursuant to Rule 68 for costs of $1,088.05, which were accrued after the date of the offer of judgment. Appellee’s basis for seeking costs was that Appellant recovered an amount less than the offer of judgment; thus, Appellant was required to pay those costs that accrued after the offer.

A hearing on the motions was held on March 4, 2002. After considering the arguments of both parties, the trial court entered an order on March 13, and an amended order on March 26, granting Appellee’s motion for costs under Rule 68. In a separate order entered on March 26, the trial court denied Appellant’s motion for costs under Rule 54(d), “based on the Court’s ruling that Rule 68 mandates costs to the Defendant.” This appeal followed.

The central issue presented by this appeal is whether an award of costs under Rule 68 precludes the trial court from also awarding costs under Rule 54(d). Resolution of this issue necessarily requires us to interpret both rules of civil procedure. We construe court rules using the same means and canons of construction used to interpret statutes. National Front Page, LLC v. State, 350 Ark. 286, 86 S.W.3d 848 (2002); Moon v. Citty, 344 Ark. 500, 42 S.W.3d 459 (2001). The first rule in considering the meaning and effect of a statute or rule is to construe it just as it reads, giving the words their ordinary and usually accepted meaning in common language. Id. When the language is plain and unambiguous, there is no need to resort to rules of statutory construction, and the analysis need go no further. Id. We review issues of statutory construction de novo, as it is for this court to determine what a statute or rule means. Brewer v. Fergus, 348 Ark. 577, 79 S.W.3d 831 (2002); Stephens v. Arkansas Sch. for the Blind, 341 Ark. 939, 20 S.W.3d 397 (2000). We are not bound by the trial court’s decision; however, in the absence of a showing that the trial court erred in its interpretation of the law, that interpretation will be accepted as correct on appeal. Id.

Appellant first argues that because she was the prevailing party at trial, she was entitled to an award of costs under Rule 54(d). She argues further that when her total costs are added to the damages awarded by the jury, her judgment exceeds the offer made by Appellee. Thus, she contends that Appellee was not entitled to recover his post-offer costs under Rule 68. Instead, she contends that only she should have been awarded costs, under Rule 54(d).

Appellee agrees that, generally, the prevailing party is entitled to costs under Rule 54(d), but he counters that Rule 68 shifts post-offer costs to the prevailing party where a settlement offer was made and rejected, and the prevailing party received an award that was less than the offer. According to Appellee, under Rule 68 the prevailing party must pay any and all costs incurred after the offer of judgment, not just the costs of the defending party. Appellee contends further that the dictates of Rule 68 are mandatory; thus, a trial judge has no discretion in shifting post-offer costs. Finally, Appellee concedes that the costs incurred by Appellant prior to the offer of settlement are not shifted under Rule 68, but remain available for Appellant to recoup as the prevailing party under Rule 54(d). We agree with Appellee’s interpretation of these rules.

Rule 54(d) provides in part: “Costs shall be allowed to the prevailing party if the court so directs, unless a statute or rule makes an award mandatory.” In construing this rule, this court has held that it gives the trial judge discretion in awarding authorized costs. See Zhan v. Sherman, 323 Ark. 172, 913 S.W.2d 776 (1996); Darragh Poultry & Livestock Equip. Co. v. Piney Creek Sales, Inc., 294 Ark. 427, 743 S.W.2d 804 (1988).

No such discretion exists, however, under Rule 68, which requires the trial court to order an offeree to pay costs incurred after an offer of settlement is made. See Hankins v. Department of Fin. & Admin., 330 Ark. 492, 954 S.W.2d 259 (1997); Darragh, 294 Ark. 427, 743 S.W.2d 804. Rule 68 provides in pertinent part:

At any time more than 10 days before the trial begins, a party defending against a claim may serve upon the adverse party an offer to allow judgment to be taken against him for the money or property or to the effect specified in his offer, with costs then accrued. If within 10 days after the service of the offer the adverse party serves written notice that the offer is accepted, either party may then file the offer and notice of acceptance together with proof of service thereof and judgment shall be entered. An offer not accepted shall be deemed withdrawn and evidence thereof is not admissible except in a proceeding to determine costs. If the judgment exclusive of interest from the date of offer finally obtained by the offeree is not more favorable than the offer, the offeree must pay the costs incurred after the making of the offer. [Emphasis added.]

The Reporter’s Notes to this rule reflect impart that the purpose behind the rule “is to encourage the early settlement of claims and to protect the party who is willing to settle from the expense and burden of costs which subsequently accrue.” (Citation omitted.) This court has also recognized that the purpose of Rule 68 is to provide a means by which a defendant may compel the plaintiff realistically to reassess his claim and thereby, perhaps, persuade the plaintiff to settle. See Jones v. Abraham, 341 Ark.66, 15 S.W.3d 310 (2000); Darragh, 294 Ark. 427, 743 S.W.2d 804.

The question here is whether an award of post-offer costs to the defendant under Rule 68 necessarily precludes an award of pre-offer costs to the prevailing plaintiff under Rule 54(d). We hold that it does not. There is nothing in the language of Rule 68 that would indicate that its application divests the trial court of its discretion to consider an award of pre-offer costs to the prevailing plaintiff under Rule 54(d). Nor would Rule 68’s purposes be defeated by allowing the trial court to consider such an award of pre-offer costs. Under the facts of this case, these two rules may be read harmoniously.

Appellee made an offer of judgment to Appellant in an amount of $13,589.00 plus costs accrued by Appellant as of the date of the offer. Appellant rejected that offer, but she ultimately prevailed at trial. However, the jury only awarded her a judgment of $13,200.00. Accordingly, Rule 68’s cost-shifting provision was triggered, requiring Appellant to “pay the costs incurred after the making of the offer.” We interpret these costs to be all costs incurred after the offer, for both parties. As such, the trial court did not err in awarding Appellee his post-offer costs of $1,088.05, nor did the trial court err in denying Appellant’s request for post-offer costs.

However, we must reverse that part of the trial court’s order denying Appellant’s request for pre-offer costs under Rule 54(d). A review of the order in this case reveals that the trial judge apparently felt constrained to deny any award of costs to Appellant because Rule 68 required him to award post-offer costs to Appellee. The order reflects that “the Motion should be denied based on the Court’s ruling that Rule 68 mandates costs to the Defendant.” In this respect, we disagree with Appellee that the trial judge denied Appellant’s pre-offer costs after exercising his discretion under Rule 54(d).

The bottom line is that while the trial judge correctly perceived that Rule 68 required him to award post-offer costs to Appellee and, simultaneously, to deny post-offer costs to Appellant, he incorrectly concluded that he lacked the discretionary authority to consider Appellant’s motion for pre-offer costs under Rule 54(d). Accordingly, we reverse and remand this issue for the trial court to consider an award of pre-offer costs to Appellant under Rule 54(d).

For her second point on appeal, Appellant argues that her costs should be included with the amount of the judgment entered for purposes of determining whether the offer exceeded the judgment. She supports this argument by pointing out that the judgment of $13,200.00, when combined with the $1,161.20 claimed in costs, totals $14,361.20, thereby exceeding the $13,589.00 offer of judgment made by Appellee. While we agree with Appellant’s argument to the extent that pre-offer costs should be considered in determining whether the judgment exceeds the offer, we disagree that this calculation requires reversal.

This court has never specifically addressed this issue, but in Marek v. Chesney, 473 U.S. 1 (1985), the Supreme Court held that post-offer costs serve to offset the expense of continuing the litigation and should not be included in calculating whether the judgment was more favorable than the offer of judgment. The Court agreed, however, that pre-offer costs should be included in the comparison.- The Court reasoned that under Fed. R. Civ. P. 68, the drafters intended that “the offer be one that allows judgment to be taken against the defendant for both the damages caused by the challenged conduct and the costs then accrued.” Id. at 6. Thus, the Court held that regardless of whether the offer specified that it included the plaintiff s costs up to that point, it would be considered to encompass such costs. In interpreting this holding, some circuits have required that pre-offer costs be considered when determining whether the judgment obtained was more favorable than the offer of judgment. See Tunison v. Continental Airlines Corp., Inc., 162 F.3d 1187 (D.C. Cir. 1998); Marryshow v. Flynn, 986 F.2d 689 (4th Cir. 1993). See also Grosvenor v. Brienen, 801 F.2d 944 (1986). We believe that this is a well-reasoned approach.

Applying such rationale to the present case, however, does not benefit Appellant. Here, the offer made by Appellee was for $13,589.00, “together with costs accrued to date.” Appellant’s counsel’s affidavit submitted with her motion for costs demonstrates that she incurred pre-offer costs totaling $251.50. Thus, Appellee’s settlement offer totaled $13,840.50. On the other hand, combining the $251.50 in pre-offer costs with the actual .judgment results in a total judgment of $13,451.50, an amount still less favorable than the offer made by Appellee prior to trial. Accordingly, Appellant’s argument on this point fails.

Appellant’s last two points for reversal, that the costs awarded to Appellee are unreasonable and that Rule 68 is unconstitutional, may be summarily affirmed because Appellant failed to obtain rulings on these issues from the trial court. This court has repeatedly held that a party’s failure to obtain a ruling is a procedural bar to this court’s consideration of the issue on appeal. See, e.g., Doe v. Baum, 348 Ark. 259, 72 S.W.3d 476 (2002); E-Z Cash Advance, Inc. v. Harris, 347 Ark. 132, 60 S.W.3d 436 (2001); Barker v. Clark, 343 Ark. 8, 33 S.W.3d 476 (2000). This is true even of constitutional arguments. Doe, 348 Ark. 259, 72 S.W.3d 476. The record in this case reflects that both issues were raised in the motions filed below and were argued orally before the trial court. However, neither the abstract of the hearing nor the judgments reflect any specific rulings on these issues. Accordingly, we are precluded from reviewing them on appeal.

In sum, we affirm that part of the trial court’s judgment awarding Appellee his post-offer costs and denying Appellant her post-offer costs under Rule 68. We reverse that part of the judgment denying pre-offer costs to Appellant, as it is not apparent that the trial court exercised its discretion under Rule 54(d). Accordingly, we remand this matter to the trial court to consider whether Appellant, as the prevailing party, may recoup costs that she incurred prior to the offer of settlement. As stated above, this decision rests within the discretion of the trial court.

Affirmed in part; reversed and remanded in part.


source: Caselaw Access Project

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

license: Public Domain

text:
    Dan IVY v. The Honorable Tom J. KEITH, Judge
    02-283
    92 S.W.3d 671
    Supreme Court of Arkansas
    Opinion delivered December 12, 2002

      Doug Norwood and Susan Lusby, for petitioner.
    No response.
   Robert L. Brown, Justice.

Petitioner Dan Ivy petitions this court for a writ of certiorari that respondent, Honorable Tom J. Keith, circuit judge, has exceeded his authority in sentencing Mr. Ivy to jail for thirty-six days for contempt of court. In the alternative, Mr. Ivy appeals Judge Keith’s order that he serve this sentence for contempt. The respondent, Judge Keith, found the petitioner in contempt of court after he failed to pay Rule 11 sanctions in connection with a civil case tried in his court. Judge Keith sentenced Mr. Ivy to thirty-six days in jail. He also orally ordered a payment schedule of $1,000 a month to begin sixty days after release from jail. On March 27, 2002, this court stayed Judge Keith’s order and granted Mr. Ivy’s motion for expedited appeal. Judge Keith has requested that the Attorney General not file a brief on his behalf. We are, therefore, limited in our review to Mr. Ivy’s brief in support of the petition.

The facts leading up to the Rule 11 sanctions are taken from Judge Keith’s Order for Rule 11 Sanctions. On March 2, 2001, Mr. Ivy filed a civil lawsuit on behalf of Jerry Otis for damages arising from a car accident between Otis and Helen R. Walton. In his complaint, Mr. Ivy prayed for punitive damages on the basis that Mrs. Walton was intoxicated at the time of the accident and the Bentonville Police Department “knowingly protected her reputation.” On November 16, 2001, Judge Keith granted partial summary judgment in favor of Mrs. Walton on the punitive damages issue, finding that there was “not even a scintilla of evidence” supporting Mr. Ivy’s allegations made on behalf of Otis.

Mr. Ivy refused to retract his claim on behalf of Otis, however, and subsequently, according to Judge Keith, “compounded the seriousness of the [Rule 11] violation by restating the allegation in an amended complaint and various other pleadings filed with the Court.” On December 7, 2001, Judge Keith found that Mr. Ivy’s allegations on behalf of Otis “were not made in good faith, but rather were imposed for an improper purpose” and, thus, violated Rule 11 of the Arkansas Rules of Civil Procedure. Judge Keith’s order for Rule 11 sanctions imposed a $12,085.27 fine on Mr. Ivy which amount corresponded to opposing counsel’s attorneys’ fees and costs. The sanction was to be paid within thirty days. The Rule 11 order also stated: “The failure to pay this sanction within 30 days of the entry of this Order shall constitute contempt of court.”

On January 25, 2002, during a pretrial hearing on the Otis case, Mr. Ivy told Judge Keith that he had been served with an order for Rule 11 sanctions. Mr. Ivy questioned the judge about whether the contempt threat was standard practice in his court. The judge replied, “That’s — that’s the Court’s order, Mr. Ivy.” Mr. Ivy then asked whether, if he was unable to pay the sanction, should he submit himself to go to jail. Judge Keith responded, “If you want —• if you want to admit contempt of Court and go to jail, that’s up to you.”

On February 11, 2002, in an effort to settle with Mrs. Walton, Mr. Ivy sent a letter to Mrs. Walton’s counsel and offered to pay the Rule 11 sanctions at a rate of $500.00 per month, beginning on March 1, 2002. The next day, Mrs. Walton’s counsel alerted Judge Keith that Mr. Ivy had made no payments on his fine and of Mr. Ivy’s settlement offer, which counsel maintained he had no power to accept because it would violate the Judge’s order.

On February 20, 2002, Judge Keith issued a summons for Mr. Ivy to appear in court on March 7, 2002, and show cause why he should not be held in contempt for violating the judge’s Rule 11 order.

On March 7, 2002, Judge Keith conducted the contempt hearing, at which time Mr. Ivy told Judge Keith that the reason he had not complied with the order was he did not have enough money to pay the Rule 11 sanctions. The judge asked Mr. Ivy if he had any evidence in support of his claim of inability to pay. Mr. Ivy replied that he was under oath as an attorney to tell the truth, and then related a litany of financial problems: he stated that he owed $300,000 to the IRS as the result of a divorce, that he had lost all of his office assets to satisfy a judgment against him and that his mother had bought them at auction, and that he owned no assets beyond clothing and personal possessions. Mr. Ivy recounted previous times that he had been ordered to pay money to the other side and reminded the court that he had always paid his fines on those occasions. Mr. Ivy related that the nature of his practice was such that he had an uneven cash flow from one day to the next.

The following colloquy then occurred:

Mr. Ivy: It would be difficult for me to come up with $500 today, in fact I couldn’t, but tomorrow I could have $20,000 in my pocket. ... I have taken a vow of poverty when I became a minister —
The Court: I don’t want to hear that. I agree with that old sage who says religion and patriotism become the last refuge of scoundrels. And I don’t want to hear that. This is a civil courtroom and I don’t want to hear that.
Mr. Ivy: Then I wish to object, your Honor.
The Court: Well, I don’t care if you object.
Mr. Ivy: And I wish to proffer.
The Court: I — I don’t care. You’re — what your religious leanings or practices are is your business but it’s not a part of this proceeding.
Mr. Ivy: Then God has no place in your courtroom, Your Honor?
The Court: What your religious practices are, Mr. Ivy, do not have any part in this proceeding. Now, you may continue, but — but I don’t want — what you do in your religious practice is your business, it’s not a part of this proceeding.
Mr. Ivy: Your Honor, if —•
The Court: Did I understand you to say that you agree that — that the appropriate step for the Court to take at this time is to incarcerate you?
Mr. Ivy: Your Honor, yes, Your Honor. I see no alternative to it. I have — I have no way to pay the Court. The other side, the richest woman in the world has the money —
The Court: I don’t want — I don’t want you engaging in that kind of language in this court. I’m sick and tired of you using this inflammatory language. You’re no Robin Hood, you’re no Friar Tuck and I don’t want to — I don’t want you playing the role in this courtroom.
Mr. Ivy: Your Honor, I consider myself to be a Robin Hood.
The Court: Well, you’re no Robin Hood and you’re certainly no Friar Tuck. Anything else you wish to say?
Mr. Ivy: . . . Your honor has the right to put me in jail for whatever time, five years if you want to. Of course, at that point some — certain rights might kick in, might become criminal. But when an attorney tries to stand up for truth and justice —
The Court: That doesn’t have anything to do with this. We’ve already addressed that issue. The Court has already found that all these allegations that you’ve made were — were without foundation, were frivolous, without merit. If you want to take that up on appeal — but that argument is closed.
Mr. Ivy: It’s not closed pending new evidence I assume, Your Honor.
The Court: It’s closed until — until — until some higher court says it’s not closed. I’ve already ruled on that, we’re not going to revisit it.
Mr. Ivy: I am prepared to submit myself to the will of the Court for whatever they wish to do. I am without the funds to pay the contempt charge and that — I guess that’s all a person can say.
You know, it is difficult for me to stand here and look around this courtroom when I realize that this courtroom — well, the renovations that the courthouse was paid for by Mrs. Walton. I mean $600,000.
The Court: Mr. Mr. Ivy, I am — I’m going to remand (sic) you. You better start addressing the issues. . . .
Now you can address the issue or you can sit down but I don’t want to hear all this stuff— this Robin Hood stuff that you like to preach. That’s not the issue.
Mr. Ivy: Yes, Your Honor. The issue is I am without funds to pay it, I do not have no way (sic) to raise it. I have attempted to negotiate —
The Court: Have you got any evidence to offer in support of your position?
Mr. Ivy: No, sir, Your Honor.

After a brief recess, Judge Keith issued his ruling from the bench:

The Court: . . . The court finds that you [Mr. Ivy] have willfully disobeyed the Court’s order and orders the following: That you will be incarcerated in the Benton County Jail for a period of 36 days and that you pay the balance, what you owe, the 12,000 that the Court has ordered at the rate of $1,000 per month beginning 60 days after your release. You’ll be remanded to the custody of the sheriff.

On that same day, Judge Keith signed a County Jail Order, sentencing Ivy to thirty-six days in jail. There was no reference in the County Jail Order to payment of the $12,085.27 Rule 11 sanctions. On March 13, 2002, Mr. Ivy filed his notice of appeal from the County Jail Order. On March 25, 2002, Mr. Ivy petitioned this court for a writ of certiorari on the basis that the trial court had exceeded its authority in sentencing him to jail and moved to stay Judge Keith’s order. The motion to stay was granted by this court on March 25, 2002, and the matter was expedited.

I. Due Process

The first basis for Mr. Ivy’s certiorari petition is an asserted violation of his right to due process of law, as afforded under the Arkansas and United States Constitutions.

A writ of certiorari is appropriate when the face of the record shows that no other remedy is available to correct a plain, manifest, and gross abuse of discretion by the trial judge. E.g., Johnson v. Johnson, 343 Ark. 186, 33 S.W.3d 492 (2000). See also Arkansas Democrat-Gazette v. Zimmerman, 341 Ark. 771, 20 S.W.3d 301 (2000). Certiorari proceedings are governed by the normal appellate rules unless the normal appellate review process would be useless, such as when the contemnor has to remain in jail during the course of the appeal. See Johnson, 343 Ark. at 195-196, 33 S.W.3d at 498 (holding that when contemnors were jailed indefinitely by the trial judge, an appeal to dispute the jail sentence is useless); Bates v. McNeil, 318 Ark. 764, 888 S.W.2d 642 (1994) (holding that when contemnor had to remain in jail pending a show-cause hearing, appeal remedy was useless). The situation here is on point with Johnson and Bates, because the thirty-six day jail-time would run but for this court’s stay and expedited appeal. Mr. Ivy is correct in pursuing a writ of certiorari.

a. Contempt Generally.

In order to evaluate Mr. Ivy’s due process claims, it is initially necessary to identify precisely what action by Mr. Ivy was deemed to be contemptuous and what type of contempt Judge Keith invoked.

The Arkansas Constitution addresses the contempt power of the courts and the power of the General Assembly to regulate con-tempts not committed in front of the judge:

§ 26. Punishment of indirect contempt provided for by law.
The General Assembly shall have power to regulate the punishment of contempts not committed in the presence or hearing of the courts, or in disobedience of process.

Ark. Const, art. 7 § 26.

State law then sets out the contempt power of the courts and the appropriate penalties, with the exception of contempts committed in the immediate view and presence of the court:

(a) Every court of record shall have power to punish, as for criminal contempt, persons guilty of the following acts, and no others:
(1) Disorderly, contemptuous, or insolent behavior committed during the court’s sitting in-its immediate view and presence, and directly tending to interrupt its proceedings or to impair the respect due to its authority;
(2) Any breach of the peace, noise, or disturbance directly tending to interrupt its proceedings;
(3) Willful disobedience of any process or order lawfully issued or made by it;
(4) Resistance, willfully offered, by any person to the lawful order or process of the court; and
(5) The contumacious and unlawful refusal of any person to be sworn as a witness and, when so sworn, a similar refusal to answer any legal and proper interrogatory.
(b) (1) Punishments for contempt may be by fine or imprisonment in the jail of the county where the court may be sitting, or both, in the discretion of the court. However, the fines shall in no case exceed the sum of fifty dollars ($50.00) nor the imprisonment ten (10) days.
(2) Courts shall always have power to imprison until their adjournment.
(b) (3) When any person is committed to prison for the nonpayment of any such fine, he shall be discharged at the expiration of thirty (30) days.
(c) Contempts committed in the immediate view and presence of the court may be punished summarily. In other cases, the party charged shall be notified of the accusation and shall have a reasonable time to make his defense.
(d) (1) Whenever any person is committed for a contempt under the provisions of this section, the substance of his offense shall be set forth in the order or warrant of commitment.

Ark. Code Ann. § 16-10-108 (Repl. 1999).

Our constitution and caselaw make it clear that the courts of this state have inherent power to punish a contemnor for contempts committed in the presence of the court or in disobedience of process. Ark. Const. art. 7, § 26. See also Johnson v. Johnson, supra; Carle v. Burnett, 311 Ark. 477, 845 S.W.2d 7 (1993); Yarbrough v. Yarbrough, 295 Ark. 211, 748 S.W.2d 123 (1988). This inherent power goes beyond the statutory authority provided by § 16-10-108. There is no question that willful disobedience of a valid order of a court is contemptuous behavior. Ark. Code Ann. § 16-10-108 (a) (3) (Repl. 1999). See also Hilton Hilltop v. Riviere, 268 Ark. 532, 534, 597 S.W.2d 596, 597 (1980) (“Disobedience of any valid judgment, order, or decree of a court having jurisdiction to enter it may constitute contempt.”); Henderson v. Dudley, 264 Ark. 697, 710, 574 S.W.2d 658, 666 (1978) (“[T]he disobedience of any valid judgment, order or decree of a court having jurisdiction to enter it is such an interference with the administration of justice as to constitute contempt.”). Before a person can be held in contempt for violating a court order, the order must be definite in its terms, clear as to what duties it imposes, and express in its commands. E.g., Lilly v. Earl, 299 Ark. 103, 771 S.W.2d 277 (1989).

We have observed in the past that contempt ,is a matter between the judge and the litigant, and not between the two opposing litigants. See Hickinbotham v. Williams, 228 Ark. 46, 305 S.W.2d 841 (1957). Cf. Cooter & Gell v. Hartmarx Corp., 496 U.S. 384 (1990) (noting that contempt, Rule 11 sanctions, and award of attorneys’ fees are all actions separate and apart from the underlying proceeding and that all three actions concern the integrity of the court and judicial process, not the merits of the underlying claim).

We next examine what category of contempt is involved.

b. Criminal and Civil Contempt

Contempt is divided into criminal contempt and civil contempt. Johnson, 343 Ark. at 197, 33 S.W.3d at 499. Criminal contempt preserves the power of the court, vindicates its dignity, and punishes those who disobey its orders. Johnson, 343 Ark. at 197, 33 S.W.3d at 499. Civil contempt, on the other hand, protects the rights of private parties by compelling compliance with orders of the court made for the benefit of private parties. Id. This court has often noted that the line between civil and criminal contempt may blur at times. Id. Our Court of Appeals has given a concise description of the difference between civil and criminal contempt. See Baggett v. State, 15 Ark. App. 113, 116, 690 S.W.2d 362, 364 (1985) (“[Criminal contempt punishes while civil contempt coerces.” (emphasis in original)).

In determining whether a particular action by a judge constitutes criminal or civil contempt, the focus is on the character of relief rather than the nature of the proceeding. Fitzhugh v. State, 296 Ark. 137, 138, 752 S.W.2d 275, 276 (1988). Because civil contempt is designed to coerce compliance with the court’s order, the civil contemnor may free himself or herself by complying with the order. See Id. at 139, 752 S.W.2d at 276. This is the source of the familiar saying that civil contemnors “carry the keys of their prison in their own pockets.” Id. at 140, 752 S.W.2d at 277 (quoting Penfield Co. v. S.E.C., 330 U.S. 585, 593 (1947) (quoting In re Nevitt, 117 F. 448, 461 (8th Cir. 1902)). Criminal contempt, by contrast, carries an unconditional penalty, and the contempt cannot be purged. Fitzhugh, 296 Ark. at 139, 752 S.W.2d at 276-277.

In the instant case, Judge Keith ruled from the bench that Mr. Ivy was to serve a fixed term of thirty-six days in jail, followed by a payment of $1,000 per month to start sixty days after the jail term ended. The County Jail Order referred only to the thirty-six days to serve. By the terms of that order, Mr. Ivy could not purge himself of the jail sentence by paying the Rule 11 sanctions. We conclude that the jail sentence was intended as a punishment, not as an inducement to pay. Flence, Mr. Ivy was clearly held in criminal contempt.

c. Direct and Indirect Contempt

Both the Arkansas Constitution and the governing state statute distinguish between direct and indirect contempt. See Ark. Const., art. 7, § 26; Ark. Code Ann. § 16-10-108 (Repl. 1999). See also Allison v. DuFresne, 340 Ark. 583, 12 S.W.3d 216 (2000); Davis v. Meritt, 252 Ark. 659, 480 S.W.2d 924 (1972). Direct contempt is a contemptuous act “committed within the immediate presence of the Court ...” Meritt, 252 Ark. at 670, 480 S.W.2d at 930. Indirect contempt is contemptuous behavior committed outside the presence of the judge. An obvious example of direct contempt, besides open misconduct in the courtroom, is a party coming to court drunk. See Burradell v. State, 326 Ark. 182, 931 S.W.2d 100 (1996). Examples ofindirect contempt include an attorney’s failure to appear in court before receiving permission to withdraw as counsel (Allison v. DuFresne, supra), and failure to pay court costs (Bates v. McNeil, supra).

In a recent case, this court upheld a trial judge’s finding that two prosecutors were in direct criminal contempt when they did not comply with a scheduling order and proceed to trial on the trial date. See Johnson v. Johnson, 343 Ark. 186, 33 S.W.3d 492 (2000). After the trial judge held the two prosecutors in contempt for violating his scheduling order and remanded them to the sheriff the prosecutors petitioned this court for a writ of certiorari. In denying the writ, we said:

The issue was one of proceeding to trial which the prosecutors refused to do in direct contravention of the judge’s scheduling order. This occurred in front of the judge and under our statutes and under the judge’s inherent authority punishment could be summarily meted out.

Johnson, 343 Ark. at 202, 33 S.W.3d at 502.

The Johnson opinion uses the language associated with direct contempt. If the failure to comply with the judge’s order had been considered indirect contempt, that is, outside of the trial judge’s presence, then the prosecutors would have been entitled to the due process protections of notification of the accusation and a reasonable time to make a defense. See Ark. Code Ann. § 16-10-108(c) (Repl. 1999).

Mr. Ivy’s arguments in support of his writ all rest on the central assumption that he was held in indirect criminal contempt by Judge Keith. According to Mr. Ivy, because he was held in indirect contempt rather than direct contempt, due process rights, such as the right to have his guilt proven beyond a reasonable doubt, the right to counsel, and the right to trial by jury, attached, and the trial judge violated those rights.

We agree that Judge Keith held Mr. Ivy in indirect contempt for willfully disobeying a prior order. When that is the case, the contemnor, as just mentioned, is entitled to notice of the accusation and a reasonable time to make a defense. Ark. Code Ann. § 16-10-108(c) (Repl. 1999). Mr. Ivy did little to invoke his due process rights before the trial court. As best we can determine, he merely made the following statement: “Your honor has the right to put me in jail for whatever time, five years if you want to. Of course, at that point — some certain rights might kick in, might become criminal. . . .”

On appeal, however, he raises specific due process deprivations for the first time — shifting the burden of proof, right to counsel, and right to a jury trial. We decline to address these specific points, because it is elementary that an issue, even a constitutional issue, must first be raised before the trial court. E.g., Green v. State, 300 Ark. 458, 956 S.W.2d 849 (1997). Here, that was not done. Even where the requested relief is certiorari. for a gross abuse of the trial judge’s discretion, the trial court must first be presented with those rights the defendant contends were not afforded to him.

' The statutory rights under § 16-10-108 (c) of (1) notice of the accusation, and (2) a reasonable time to make a defense are a different matter. Mr. Ivy is an attorney. He knew of the contempt contingency as early as the Rule 11 order on January 8, 2002. He then questioned Judge Keith about possible contempt on January 25, 2002. He was then served with a notice of noncompliance with the Rule 11 order, which was mailed on February 12, 2002. He next received an Order of Summons for a show-cause hearing related to failure to comply with the Rule 11 order, which was filed on February 20, 2002. The show-cause hearing then took place on March 7, 2002. Clearly, Mr. Ivy was afforded ample notice of the accusation and reasonable time to make a defense. Moreover, he never argued to Judge Keith that he was prejudiced by the shortness of notice or time to prepare. We hold that Mr. Ivy was not deprived of his statutory protections.

II. Substantial Evidence

For his next argument, Mr. Ivy argues that there was insufficient evidence presented to show that his nonpayment of the Rule 11 sanction was “willful disobedience.” He argues that, to the contrary, the record indicates that he tried to resolve his financial dilemma by offering to pay at a reduced rate of $500 a month. He also maintains that he advised the judge that he could not pay. Mr. Ivy asserts that Judge Keith simply concluded that he willfully disobeyed the Rule 11 order without sufficient evidence to support this finding. He also claims that the record supports the fact that the real reason he was found in contempt had to do with the merits of the underlying case. Specifically, he contends: “the trial judge was evidently frustrated with the Petitioner because of the behavior which had triggered the trial court’s original decision to impose a sanction. However, the purpose of this contempt proceeding was to determine whether the Petitioner had willfully and inexcusably failed to comply with the sanction order — not to review the reasons for imposing the sanction in the first place.”

What was in Judge Keith’s mind, of course, is speculation on Mr. Ivy’s part. Mr. Ivy, however, is correct that criminal contempt is not appropriate as a penalty for violating Rule 11. Indeed, our research has only disclosed the use of civil contempt to coerce payment of Rule 11 sanctions. See, e.g., Verone v. Taconic Tel. Corp., 826 F. Supp. 632 (N.D. N.Y. 1993); Cannon v. Loyola University of Chicago, 676 F. Supp. 823 (E.D. Ill. 1987). The rule itself lists as “appropriate sanction[s]” reasonable expenses incurred by the litigation, including attorney’s fees. See Ark. R. Civ. P. 11. Manifestly, the trial judge should not be allowed to do indirectly with the criminal contempt power what he could not do directly under Rule 11. We hold that Judge Keith plainly, manifestly, and grossly abused his discretion in using criminal contempt as a penalty for failure to pay the Rule 11 sanctions.

Mr. Ivy also raises the specter of a party being jailed essentially for inability to pay a debt. The practice of imprisoning people for debts was abolished by the Debtor’s Act of 1869. See Black’s Law Dictionary 412 (7th Ed. 1999) (defining “Debtor’s Act of 1869”). Moreover, our own constitution provides: “No person shall be imprisoned for debt in any civil action, or mense or final process, unless in cases of fraud.” Ark. Const. art. 2, § 16. This court has said, in the civil contempt context, that “lack of ability to pay is a complete defense against enforcing payment from the defendant by imprisonment.” Griffith v. Griffith, 225 Ark. 487, 490, 283 S.W.2d 340 (1955). The Griffith court further said: “[t)he court is empowered to punish the defendant by imprisonment for willful obstinancy where it shall appear that he had the means with which to comply with the decree, but it should not imprison him where he shows that he has not the pecuniary ability to comply with the decree and is in such ill health that he cannot earn enough money to do so.” Id. at 491, 283 S.W.2d at 342.

Bearing this fundamental principle in mind, we are convinced, however, that Mr. Ivy received his day in court on his defense of inability to pay, albeit for criminal comtempt. As already noted in this opinion, he had ample notice of the show-cause hearing. Yet, he came to the hearing armed only with his contention that he could not pay the Rule 11 sanctions at that time. It is clear that Judge Keith gave Mr. Ivy every opportunity to put on evidence. At the start of the hearing on March 7, 2002, the trial court asked Mr. Ivy: “Do you have any evidence — are you prepared to offer evidence in support of your position?” Mr. Ivy responded with a long answer in which he stated “under penalty of perjury, [because] an attorney has an obligation to tell the truth in court” that (1) he had no assets except for clothes and a few personal possessions; (2) he owes the IRS about $300,000; (3) he had considered filing bankruptcy; (4) he offered, beginning March 1, to pay off the sanction at $500 a month, which he said he could afford; (5) that-he could have $20,000 to $30,000 in his pocket tomorrow because of the way his income is; (6) his mother purchased all his office assets at a sale following execution on a judgment; (7) that he understood jail is the proper remedy for nonpayment; (8) that he previously had made court ordered payments for smaller amounts; (9) that he had taken a vow of poverty when he became a minister.

During the course of the hearing, the trial judge continued to request evidence from Mr. Ivy: “Anything else you wish to say?” jnd “Now, you can address the issue. . . . “ Just before adjourning to' make his decision, the trial judge asked Mr. Ivy a final time: “Have you got any evidence to offer in support of your position?” To this, Mr. Ivy answered simply, “No, sir, Your Honor.”

According to Mr. Ivy, Judge Keith should have made inquiries into whether he was indeed indigent. Yet, we see indigency as a defense to contempt and one that should have been mounted by Mr. Ivy as part of his effort to show cause why he should not be held in contempt. It was Mr. Ivy’s obligation and responsibility to present evidence of his allegedly dire financial condition on March 7, 2002. He failed to do so.

Furthermore, Judge Keith, sitting as fact-finder, was still entitled to judge the credibility of this witness. In short, as the trial judge, he was not required to believe Mr. Ivy’s bare assertion that he could not pay. See Gatlin v. Gatlin, 306 Ark. 146, 811 S.W.2d 761 (1991) (holding that a trial judge was not required to believe a contemnor’s testimony that she was without funds to pay an IRS debt, and upholding a finding of contempt.)

Nevertheless, finding Mr. Ivy in criminal contempt for not paying the Rule 11 sanctions constituted a plain, manifest, and gross abuse of discretion, and we grant the writ of certiorari. .We void the sentence of thirty-six days in jail and remand the matter for further proceedings, which may include proceedings for civil contempt if deemed appropriate by the trial court in this case. We direct that should the trial court wish to pursue civil contempt against Mr. Ivy for failure to pay the Rule 11 sanctions that a new notice and reasonable time to make a defense be afforded him under Ark. Code Ann § 16-10-108(c). At first blush, it would appear that there is little to be gained from holding still another show-cause hearing on Mr. Ivy’s financial status in connection with civil contempt. By the same token, we can conceive of how clear notice of what type of contempt Mr. Ivy might be facing under the circumstances by not paying the sanctions and the potential sentence following a finding of contempt would be important to him in fashioning his defense of inability to pay. Of course, if Mr. Ivy is indeed unable to pay the sanctions, placing him in jail to coerce him to pay as part of civil contempt would equate to holding him in criminal contempt. Because we grant the writ of certiorari, it is unnecessary to address Mr. Ivy’s identical arguments as a direct appeal.

Petition for writ of certiorari granted.

Remanded.

Arnold, C.J., not participating.

Glaze and Imber, JJ., concurring in part and dissenting in part.

Tom Glaze, Justice,

concurring in part and dissenting in part. I agree that Judge Keith abused his discretion in using criminal contempt as a penalty for Mr. Ivy’s failure to pay Ms. Helen Walton’s attorney’s fees and costs as Rule 11 sanctions. However, the majority court is simply wrong in concluding that “Mr. Ivy received his day in court on his defense of inability to pay [the sanctions].” Ivy did have an abbreviated hearing on criminal contempt, but, as acknowledged in the majority opinion, the judge erred in this respect because criminal contempt is not an available remedy to enforce Rule 11 sanctions.

The majority opinion then directs that this case be remanded for further proceedings which may include civil contempt. If the majority opinion merely ended at this point, by remanding this case for further proceedings, I could agree with that part of this court’s ruling, too, since it would be in accord with this court’s long-established law. In other words, because this court agrees that the circuit judge erred, the general rule is to remand common law cases for a new trial unless the case has been fully litigated and should be dismissed. Hinton v. Bryant, 232 Ark. 688, 339 Ark. 621 (1960). As indicated in Hinton, owing to the error indicated, the case must be retried, and upon a new trial, any deficiency of proof must be supplied. Follett v. Jones, 252 Ark. 950, 481 S.W.2d 713 (1972).

However, I seriously disagree with the majority when it decides that it is the trial court’s duty to serve Mr. Ivy with a new notice, giving him a reasonable time to make a defense under Ark. Code Ann. § 16-10-108(c) (Repl. 1999). In making this statement, the majority agrees with Ms. Helen Walton’s position at the prior contempt hearing that, after she filed a “Notice of NonCompliance,” alleging Mr. Ivy had failed to reimburse her, Ms. Walton had no further duty or burden in this matter. In short, the majority submits that, on remand for a civil contempt hearing, it is the trial court’s obligation to “notice” Mr. Ivy, giving him reasonable time to prepare a defense.

First, it is all too clear that Ms. Walton may not merely file a pleading (notice or motion), alleging Mr. Ivy to be in civil contempt and claiming he has failed to reimburse her attorney’s fees and costs without then requiring her later to present proof to support her claims. Stated differently, it is elementary that Ms. Walton must offer proof of Mr. Ivy’s failure to pay; after doing so, Mr. Ivy must then show his inability to pay.

The majority court cites the case of Hickinbotham v. Williams, 228 Ark. 46, 305 S.W.2d 841 (1957), for the proposition that “contempt is a matter between the judge and the litigant, and not between the two opposing litigants.” The Williams court, however, made this statement merely to recognize that “third parties” who were not the original plaintiffs, had been prejudiced by the defendant’s (Hickinbotham’s) violation of the court’s injunction, and that those parties could enforce the court’s order, and not just the original plaintiffs. Even in Williams, the “third parties,” who were not the original plaintiffs, petitioned the trial court for a show cause order requiring the defendant Hickinbotham to appear and show why he should not be held in contempt; at the hearing, those moving parties then presented testimony that Hickinbotham had violated the trial court’s injunction.

Of course, in this case, no third parties or other litigants are involved. Instead, it is only Ms. Walton who charged that Mr. Ivy had not reimbursed her attorney’s fees and costs as previously ordered, and it is her initial burden to prove this charge. In a proceeding for indirect contempt, like the one here, it is not proper for the trial judge to initiate his own investigation, or act on the presumption that a party (Ivy) has violated a court order and then notify the party to appear to show cause why he should not be held in civil contempt. To condone such a procedure would be nothing short of adopting an inquisitorial system whereby the judge conducts the trial, determines what questions to ask, and defines the scope and the extent of the inquiry. That is not our system.

Because this case is civil in nature and the action is brought to assure Ms. Walton’s attorney’s fees and costs are reimbursed, she clearly has the burden to show that she has not been paid. Once Ms. Walton offers this proof and is subject to cross examination on this issue, Mr. Ivy must show his inability to pay. The proof required in a civil action for contempt is a preponderance of the evidence. See Henry v. Eberhard, 309 Ark. 336, 832 S.W.2d 467 (1992); Dennison v. Mobley, 257 Ark. 216, 515 S.W.2d 215 (1974).

In conclusion, I believe it is necessary to point out that some of Mr. Ivy’s remarks at the scheduled hearing on March 7, 2002, bordered on contempt when he and the trial judge entered into an exchange of comments, some of which are set out in the majority opinion. If the trial judge had found Mr. Ivy in direct contempt based on disrespectful or insolent behavior, I likely would have affirmed such a finding. By the same token, it appears that some of the unfortunate and unnecessary colloquy between the court and Mr. Ivy could have been avoided if the court had held a formal hearing by swearing in the witnesses, taking testimony, and allowing the litigants to make their arguments. Here, no witnesses were sworn, nor did they testify. Instead, the hearing was reduced to unfounded and witty remarks which resulted in a test of wills between the judge and Mr. Ivy. While this court remands this case for further proceedings, hopefully, the rules of procedure, evidence, and the law will govern and bring needed structure to a very serious matter.

For the above reasons, I concur in part and dissent in part.

Imber, J., joins this opinion.

Arnold, C.J., not participating.

       Mr. Ivy’s brief shows “State of Arkansas, Benton County Circuit Court — Div. Í, and Benton County Sheriff Andy Lee” as respondents. We conclude that Hon. Tom J. Keith, as shown on the record of this case, is the more appropriate party for a certiorari petition.

       In response to the concurrence in part and dissent in part, it is undisputed from the record that at the time of appeal, Mr. Ivy had not paid the Rule 11 sanctions in violation of Judge Keith’s order. Under these circumstances, it is proper for Judge Keith to proceed with a show-cause order for civil contempt, should he choose to do so. If Mr. Ivy has now paid the sanctions, he can so advise Judge Keith. If not, he must show cause why he should not be held in contempt.

       In response to my opinion, the majority has added a footnote suggesting it is undisputed from the record that, at the time of the appeal, Mr. Ivy had not paid Rule 11 sanctions. Of course, no formal hearing was conducted to establish this fact, but even if such fact was true, this case on remand involves civil contempt, which is a different proceeding, and, at this time, no one knows or has alleged that Mr. Ivy has not paid any or part of Ms. Walton’s attorneys fee’s and costs. Again, it is not the judge’s role or burden to sua sponte issue orders alleging noncompliance and to assume the role of a party litigant in these matters.


author: Annabelle Clinton Imber, Justice.

text:
    ARKANSAS SOIL and WATER CONSERVATION COMMISSION, Appellant v. CITY of BENTONVILLE, Appellee; City of Centerton, Intervenor

    02-658
    92 S.W.3d 47
    Supreme Court of Arkansas
    Opinion delivered December 12, 2002

      Mark Pryor, Att’y Gen., by: Edward C. Swaim, Ass’t Att’y Gen., and Warren T. Readnour, Ass’t Att’y Gen., for appellant.

      Camille Steadman Thompson, Staff Att’y, for appellee City of Bentonville.

      Howard L. Slinkard, P.A., by: Howard L. Slinkard and Pat Moran, for intervenor City of Centerton.
   Annabelle Clinton Imber, Justice.

This case arises from a decision by the Arkansas Soil and Water Conservation Commission (ASWCC) to approve a water project submitted by the City of Centerton that included a portion of the City of Bentonville’s five-mile extraterritorial planning area. ASWCC argues on appeal that it acted within its statutory authority in approving Centerton’s water project. We agree and uphold ASWCC’s decision. Accordingly, we reverse the circuit court’s order and remand with directions to reinstate ASWCC’s decision.

In early 2000, the Centerton Water and Sewer Commission submitted its water distribution project to ASWCC for approval. The proposed project included areas surrounding Centerton to the north, south, and west, a portion of which lies within Benton-ville’s five-mile extraterritorial planning area. ASWCC held public hearings on Centerton’s water project application. Several residents in the proposed service area testified in favor of the project, and letters of endorsement were made a part of the record. Jerry Martin, an engineer with Engineering Services, Inc., testified on behalf of Centerton that the proposed water project would cost customers an additional $4.30 per month and would benefit existing customers by eliminating dead-end areas. He estimated the construction costs at $2.2 million, including a 10% contingency fee and miscellaneous costs, and explained that the costs were based on similar projects. The project would take about a year-and-a-half to two years to complete. On cross-examination, he confirmed that the Preliminary Engineering Report (PER) was prepared without a survey of the residents of the area, which is not unusual. The potential customer base was determined by doing a “house count” in the proposed project’s service area. Britt Vance, public works director for Bentonville, testified that he believed the project was substantially underbid and would actually cost over $3.2 million. Mr. Martin responded by testifying that Mr. Vance’s estimates were very high and out of line with bids he had recently received on a similar project. A resident in the area testified that he and 300 other residents did not want to pay for the water service. An analysis submitted by Centerton estimated that the proposed project would improve the water flow available for fire fighting.

In July 2000, the director of ASWCC approved Centerton’s proposed water project, albeit with certain exceptions that allowed Bentonville to serve customers within 300 feet of its existing lines. In April 2001, the full commission adopted the director’s order but excluded any areas that Bentonville annexed prior to March 15, 2001, and clarified that water would be supplied by the Benton/Washington County Water Association (Two-Ton) regional water system. Bentonville then appealed to the Benton County Circuit Court. During a hearing before the circuit court, ASWCC pointed out that Bentonville had not submitted a water project for the area, and that ASWCC ruled on the only project before it. The circuit court adopted ASWCC’s findings of fact, conclusions of law, and order except the court ruled that ASWCC exceeded its statutory authority by extending Centerton’s water service area into Bentonville’s extraterritorial planning area. ASWCC filed this appeal challenging the circuit court’s decision. Our jurisdiction is pursuant to Ark. Sup. Ct. R. 1-2(b)(6) (2002). ASWCC maintains it did not exceed its statutory authority by approving Centerton’s water project and that its order is supported by substantial evidence and is not arbitrary, capricious, or characterized by an abuse of discretion. On the other hand, Bentonville claims ASWCC exceeded the scope of its statutory authority. Bentonville also suggests that the decision by ASWCC should not be upheld because: (1) it is based on a faulty procedure whereby ASWCC modified Centerton’s water project; (2) the decision is arbitrary; and (3) the decision is not supported by substantial evidence.

Standard of Review

On appeal from a circuit court’s review of a state agency’s decision, our review is limited in scope and is directed not to the decision of the circuit court but to whether the decision of the administrative agency is supported by substantial evidence. Arkansas Professional Bail Bondsman v. Oudin, 348 Ark. 48, 69 S.W.3d 855 (2002;) Arkansas Contr. Lic. Bd. v. Pegasus Renovation Co., 347 Ark. 320, 64 S.W.3d 241 (2001); Tomerlin v. Nickolich, 342 Ark. 325, 27 S.W.3d 746 (2000). We review the entire record in making that determination. Arkansas Professional Bail Bondsman v. Oudin, supra; Arkansas Alcoholic Beverage Control v. Muncrief 308 Ark. 373, 825 S.W.2d 816 (1992). We have recognized that “administrative agencies are better equipped than courts, by specialization, insight through experience, and more flexible procedures to determine and analyze underlying legal issues affecting their agencies, and this recognition accounts for the limited scope of judicial review of administrative action and the refusal of the court to substitute its judgment and discretion for that of the administrative agency.” Arkansas Professional Bail Bondsman v. Oudin, 348 Ark. at 53, 69 S.W.3d at 858.

Arkansas Code Annotated § 25-15-212(h) provides that this court may reverse or modify the Board’s decision

if the substantial rights of the petitioner have been prejudiced because the administrative findings, inferences, conclusions, or decisions are:
(1) In violation of constitutional or statutory provisions;
(2) In excess of the agency’s statutory authority;
(3) Made upon unlawful procedure;
(4) Affected by other error or law;
(5) Not supported by substantial evidence of record; or
(6) Arbitrary, capricious, or characterized by abuse of discretion.

Ark. Code Ann. § 25-15-212(h) (Supp. 2001). In making this determination, we review the entire record and give the evidence its strongest probative force in favor of the agency’s ruling. Arkansas Professional Bail Bondsman v. Oudin, supra. “[B]etween two fairly conflicting views, even if the reviewing court might have made a different choice, the board’s choice must not be displaced.” Arkansas Contr. Lic. Bd. v. Pegasus Renovation Co., 347 Ark. at 327, 64 S.W.3d at 245; Jackson v. Arkansas Racing Comm’n, 343 Ark. 307, 34 S.W.3d 740 (2001). These standards have been applied to ASWCC decisions. City of Benton v. Arkansas Soil & Water Conservation Commission, 345 Ark. 249, 45 S.W.3d 805 (2001).

I. ASWCC’s Statutory Authority

Resolution of the conflict between Bentonville and ASWCC requires this court to construe two statutes, one granting municipalities exclusive planning jurisdiction over a five-mile area surrounding the city and the other statute empowering ASWCC to approve all water projects. We first note that municipal corporations are creatures of the legislature and as such have only the power bestowed upon them by statute or the Arkansas Constitution. Stilley v. Henson, 342 Ark. 346, 28 S.W.3d 274 (2000). ASWCC is also a creature of the legislature, and its power and authority is limited to that which the legislature confers upon it. Arkansas County v. Desha County, 342 Ark. 135, 27 S.W.3d 379 (2000). The basic rule of statutory construction is to give effect to the intent of the legislature by giving words their usual and ordinary meaning. Id. Where the statutes are unambiguous, we construe them by looking to all laws on the subject, viewing them as a single system, and giving effect to the general purpose of the system. Id. We also recognize that “the manner in which a law has been interpreted by executive and administrative officers is to be given consideration and will not be disregarded unless it is clearly wrong.” Cave City Nursing Home, Inc. v. Arkansas Dept. of Human Services, 351 Ark. 13, 22, 89 S.W.3d 884.

With these standards in mind, we turn to the statute empowering ASWCC to approve water projects. Arkansas Code Annotated § 15-22-503 (Repl. 2000) sets out the broad powers granted to ASWCC by the General Assembly:

15-22-503. Arkansas Water Plan.
(a) Under such rules and regulations as it may adopt, the Arkansas Soil and Water Conservation Commission is charged with the duty of preparing, developing, formulating, and engaging in a comprehensive program for the orderly development and management of the state’s water and related land resources, to be referred to as the Arkansas Water Plan.
(b) The commission shall be governed in its preparation of the plan by a regard for the public interest of the entire state. It shall direct its efforts to protect the water resources of the state, including boundary waters, against unwarranted encroachments by other states and the United States upon its sovereignty with respect thereto. Any attempt to transport or export any of such waters against the best interests of the State of Arkansas and its inhabitants shall be strongly opposed.
(c) The plan shall give due consideration to existing water rights of the state and its inhabitants and shall take into account modes and procedures for the equitable adjustment of individual water rights affected by the implementation of the plan. The Arkansas Water Plan shall be the state policy for the development of water and related land resources in this state and shah, from time to time, be altered, amended, or repealed to the extent necessary for the proper administration of the state’s water resources.
(d) All state agencies, commissions, and political subdivisions shall take the Arkansas Water Plan into consideration in all matters pertaining to the discharge of their respective duties and responsibilities as they may affect the comprehensive Arkansas Water Plan, but nothing in the Arkansas Water Plan shall be construed as to impair any water right existing under the laws of this state.
(e) No political subdivision or agenq> of the state shall spend any state funds on or engage in any water development project, excluding any project in which game protection funds or federal or state outdoor recreation assistance grant funds are to be spent provided such project will not diminish the benefits of any existing water development project, until a preliminary survey and report therefor, which sets forth the purpose of the project, the benefits to be expected, the general nature of the works of improvement, the necessity, feasibility, and the estimated cost thereof, is filed with the commission and is approved by the commission to be in compliance with the Arkansas Water Plan. Upon approval of the report, no political subdivision nor agency board or commission thereof filing the report, or designated by the commission as having responsibility for constructing, operating, managing, and maintaining the improvement, shall be dissolved, merged, abolished, or otherwise changed during the life of the water development project without prior approval of the commission.

Ark. Code Ann. § 15-22-503 (Repl. 2000) (emphasis added).

Municipalities are generally required to submit their water development proposals to ASWCC for approval as being in compliance with the Arkansas Water Plan. See, e.g., City of Benton v. Arkansas Soil & Water Conservation Comm’n, 345 Ark. 249, 45 S.W.3d 805 (2001). Municipalities may be included within the boundaries of Regional Water Distribution Districts. City of Fort Smith v. River Valley Regional Water Dist., 344 Ark. 57, 37 S.W.3d 631 (2001); Ark. Code Ann. § 14-116-107 (Repl. 1998). Regional Water Districts are required to submit project proposals to ASWCC in order to assure compliance with the Arkansas Water Plan. Ark. Code Ann. § 14-116-402(b) (Supp. 2001). ASWCC is charged with the responsibility of developing the water plan that “shall be the state policy for the development of water and related land resources in this state. . . .” Ark. Code Ann. § 15-22-503(c). Section 15-22-504 even requires that the plan be made generally available “to ensure that the provisions of this subchapter are complied with concerning water and resource planning and development.” Ark. Code Ann. § 15-22-504(b) (Repl. 2000).

Bentonville contends that section 14-56-413 grants it exclusive jurisdiction over the five-mile extraterritorial area surrounding the city limits. “The territorial jurisdiction of the legislative body of the city having a planning commission, for the purpose of this subchapter, shall be exclusive and shall include all land lying within five (5) miles of the corporate limits.” Ark. Code Ann. §14 — 56—413(a)(1)(A) (Repl. 1998). Bentonville also claims that this exclusive planning jurisdiction trumps ASWCC’s authority under section 15-22-503 such that the city has been granted the exclusive right to provide utilities to residents in its five-mile extraterritorial planning area.

Bentonville overstates the power granted to them by section 14-56-413. First, section 15-22-503(e) clearly grants ASWCC power over other political subdivisions, such as municipalities, to approve any water development project for compliance with the state water plan. Ark. Code Ann. § 15-22-503(e). Our case law provides that a Regional Water District, whose water projects also require ASWCC approval, can include municipalities. City of Fort Smith v. River Valley Regional Water Dist., supra. Moreover, cities cannot spend state funds on or engage in any water development project until the project is approved by ASWCC. Ark. Code Ann. § 15-22-503(e); City of Benton v. ASWCC, supra. A municipality clearly does not have absolute power to control water projects within its own boundaries, much less within its five-mile extraterritorial planning area.

Statutes relating to the same subject are said to be in pari materia and should be read in a harmonious manner, if possible. R.N. v. J.M., 347 Ark. 203, 61 S.W.3d 149 (2001); Minnesota Mining & Mfg. v. Baker, 337 Ark. 94, 989 S.W.2d 151 (1999). Here, we have no difficulty in reading the two statutes at issue in harmony. While a municipality may prepare plans for lands lying within five miles of the city limits, Ark. Code Ann. § 14-56-413, all water development projects must still comply with the Arkansas Water Plan. Ark. Code Ann. § 15-22-503.

In the instant case, Bentonville did not provide ASWCC with any plan to annex or otherwise provide water services to the residents who live within its five-mile extraterritorial planning area. The decision by ASWCC did not, as characterized by Bentonville, deny Bentonville any powers to provide city services to its citizens; instead, ASWCC approved Centerton’s project to provide water to residents in the area surrounding Centerton, a portion of which lies within Bentonville’s five-mile extraterritorial planning area. If this court were to adopt the statutory interpretation advanced by Bentonville, the residents of the disputed area would be denied potable water until such time, if ever, Bentonville decides to provide water — even then, a water project would still have to be approved by ASWCC. We therefore hold that ASWCC acted within its statutory authority when it approved Centerton’s water distribution project.

II. Substantial Evidence

Even if ASWCC acted within its statutory authority, Bentonville suggests that ASWCC’s decision is arbitrary and not supported by substantial evidence.

Substantial evidence is defined as “valid, legal, and persuasive evidence that a reasonable mind might accept as adequate to support a conclusion, and force the mind to pass beyond conjeeture.” Tomerlin v. Nickolich, 342 Ark. at 333, 27 S.W.3d at 751 (quoting Arkansas State Police Comm’n v. Smith, 338 Ark. 354, 362, 994 S.W.2d 456, 461 (1999)). The challenging party has the burden of proving an absence of substantial evidence. Id. To establish an absence of substantial evidence, the challenging party must demonstrate that the proof before the administrative tribunal was so nearly undisputed that fair-minded persons could not reach its conclusion. Id. “The question is not whether the testimony would have supported a contrary finding but whether it supports the finding that was made.” Id.

Arkansas Professional Bail Bondsman v. Oudin, 348 Ark. at 55, 69 S.W.3d at 860. Bentonville posits three reasons why ASWCC’s decision should not be upheld. First, it claims that the decision is fatally flawed because ASWCC modified the water project application filed by Centerton; as such, the project as approved is not the project Centerton submitted for approval. Next, Bentonville argues the decision is arbitrary. Finally, Bentonville contends that the decision is not supported by substantial evidence.

A. ASWCC’s Modification of Centerton’s Proposed Water Project

Bentonville asserts that ASWCC modified Center-ton’s water project application, and therefore its approval was without authority. Bentonville contends that ASWCC modified Centerton’s project in two material respects: (1) certain areas were excluded from the project; and (2) water would be supplied by the Two-Ton regional water system. First, ASWCC excluded from the project any areas annexed by Bentonville prior to March 15, 2001. The record does not indicate that Bentonville annexed any of the disputed area between February 14, 2000, when Centerton filed its water project application, and March 15, 2001. As a result, granting Bentonville the opportunity to provide water service to its residents did not materially alter the scope of Centerton’s water project.

As to the second assertion that ASWCC materially altered the project by specifying water would be provided by the Two-Ton regional water system, Bentonville concludes it would be “required to purchase wholesale water from Two-Ton to serve areas in its city limits.” Such an argument is premised on the assumption that Bentonville will at some future time annex portions of the area serviced by the Centerton water project. Once again, this is nothing more than speculation. The Two-Ton regional water system was specified in the original PER and does not represent any change, much less a material change, in the water project.

B. Whether the Decision Is Arbitrary

Next, Bentonville argues that the decision is arbitrary because ASWCC altered Centerton’s project without the knowledge or consent of anyone, the selection of the Two-Ton regional water system to provide the water is arbitrary, and permanently limiting Bentonville to serving only its currently existing customers is arbitrary.

Administrative action may be regarded as arbitrary and capricious where it is not supportable on any rational basis. To have an administrative action set aside as arbitrary and capricious, the party challenging the action must prove that it was willful and unreasoning action, without consideration and with a disregard of the facts or circumstances of the case. We have stated that the requirement that administrative action not be arbitrary and capricious is less demanding than the requirement that it be supported by substantial evidence. . . . [OJnce substantial evidence is found, it automatically follows that a decision cannot be classified as unreasonable or arbitrary.

Arkansas Professional Bail Bondsman v. Oudin, 348 Ark. at 55, 69 S.W.3d at 860 (quoting Arkansas Cont. Lic. Bd. v. Pegasus Renovation Co., 347 Ark. 320, 64 S.W.3d 241 (2001)).

As we have already concluded, ASWCC did not materially alter the project by excluding any area annexed by Bentonville prior to March 15, 2001. Furthermore, the selection of the Two-Ton regional water system, as specified in the original PER, is not an arbitrary decision of the Commission. In fact, ASWCC’s order does not prohibit the use of water from other sources so long as the variance is approved by ASWCC. Moreover, the ASWCC order does not limit Bentonville to serving only its current customers; rather, the decision permits the Centerton water project to service customers located in an area that Benton-ville may or may not at some future time annex or include in a future water project application. ASWCC rules anticipate that water projects may overlap. See ASWCC Rule 601.1 (G) (defining “project” to include “[projects that would serve areas that are being served by other entities or projects that would serve areas on which other projects have, or have applied for, water plan certification”). In any event, the ASWCC order specifically provides that Bentonville and Centerton, with ASWCC approval, may negotiate a modification in the responsibility to provide service to residents in the area or share water lines where the two cities determine it to be economical and beneficial. We conclude that Bentonville’s arguments on this point are without merit.

C. Substantial Evidence

To support its claim of a lack of substantial evidence, Benton-ville quotes its own public works director who testified that Bentonville could provide service to the area residents as quickly as Centerton, and that some of Centerton’s residents do not want to pay for the project. Bentonville goes on to conclude that the project is not needed and that “[opposition to this project clearly outweighs the support.” The argument as framed, however, misapprehends the substantial-evidence standard of review. As quoted above, “[t]he question is not whether the testimony would have supported a contrary finding but whether it supports the finding that was made.” Arkansas Professional Bail Bondsman v. Oudin, 348 Ark. at 55, 69 S.W.3d at 861.

Substantial evidence supports ASWCC’s decision. Centerton filed a PER that detailed the water project’s purpose, expected benefits, necessity, feasibility, and estimated cost. ASWCC conducted public hearings on April 4, 2000, and on May 9, 2000, accepted written comments and evidence, and took testimony from all interested parties, including Centerton, Bentonville, and residents of the proposed project’s service area. An engineer from the firm that prepared the PER testified concerning the need for the project, its beneficial impact on both current and proposed water customers, and its estimated cost. Many of the residents in the area confirmed that their well water is contaminated or of poor quality. Consequently, they are forced to spend substantial sums to secure potable water for their homes and businesses. Existing customers would also benefit from additional quantities of water being available during high flow periods, such as fire fighting. The project could assist Centerton in lowering its ISO rating, thereby reducing fire insurance premiums for the city’s customers. While there was opposition to the project, ASWCC concluded that “(a) the project complies with and implements the goals and objectives of the Arkansas Water Plan; and (b) the project adequately coordinates the use of water resources within the region in which the "project is located, and within the state as a whole.” ASWCC Rule 604.5. Based on our review of the record in this matter, we conclude that ASWCC’s order approving Centerton’s water project is supported by substantial evidence.

Because ASWCC acted within its statutory auchority, which is not preempted by a municipality’s planning authority in a five-mile area surrounding the city limits, and because ASWCC’s decision is supported by substantial evidence, we affirm its order approving Centerton’s water development project, as amended, for water plan compliance certification.

Reversed and remanded with instructions to reinstate the decision by the Arkansas Soil and Water Conservation Commission.

       The rules promulgated by ASWCC provide that “[t]he Referee may approve all or part of an application.” ASWCC Rule 604.7.

       The circuit court apparently found substantial evidence to support ASWCC’s decision because it adopted the findings of fact, conclusions of law, and order of the commission except where the water project extended into Bentonville’s five-mile extraterritorial planning area.


author: Ray Thornton, Justice. Tom Glaze, Justice.

text:
    Barbara SPEARS and Jerel Saeler v. CITY OF FORDYCE, Joseph Watson, Arkansas Public Risk Management Association, and Southern Farm Bureau Casualty Insurance Company
    01-220
    92 S.W.3d 38
    Supreme Court of Arkansas
    Opinion delivered December 12, 2002

      Jewell, Moser, Fletcher & Holleman,by: John T. Holleman, IV and Paul Pfeifer, for appellants.

      Batchelor & Newell, by: Angela R. Echols; and Ralph C. Ohm, for appellees City of Fordyce, Joseph Watson, and Arkansas Public Risk Management Association.

      Wright, Chaney, Berry, Daniel, Hughes & Moore, P.A., By: Rodney P. Moore, for appellee Southern Farm Bureau Casualty Insurance Company.
   Ray Thornton, Justice.

On May 8, 1997, appellant, Barbara Spears, was driving a car owned by appellant, Jerel Saeler, when a Coyote C-26 front-end loader, which was owned by appellee, the City of Fordyce, and operated by appellee, Joseph Watson, collided with the car. When the accident occurred, Mr. Watson was driving the front-end loader on the highway through a school zone to an area in Fordyce where he intended to “clip shoulders.”

On April 26, 2000, appellants filed a complaint against the City of Fordyce, Joseph Watson, and the Arkansas Public Entities Risk Management Association. The complaint alleged that appellants suffered physical injuries and property damages as a result of the City of Fordyce and Joseph Watson’s negligence.

On May 24, 2000, appellants filed their first amended and substituted complaint. In this complaint, appellants realleged all claims and allegations against the City of Fordyce, Joseph Watson, and the Arkansas Public Entities Risk Management Association. Additionally, appellants claimed that they were entitled to receive benefits from appellee, Southern Farm Bureau Casualty Insurance Company, based on an underinsured motorist policy.

On May 26, 2000, the City of Fordyce, Joseph Watson, and the Arkansas Public Entities Risk Management Association filed a motion for summary judgment. The appellees argued that because the City of Fordyce is a governmental entity, it is entitled to immunity from tort liability. The appehees further contended that Mr. Watson was entitled to immunity because the accident occurred while he was performing his duties as a government employee. Finally, citing Cousins v. Dennis, 298 Ark. 310, 767 S.W.2d 296 (1989), the appeEees argued that the City was not required to carry liability insurance on the front-end loader because it was not a motor vehicle.

On June 29, 2000, appellants filed a second amended and substituted complaint once again re-alleging previous claims. In this complaint, appellants claimed that they were entitled to recover the entire policy limits from an uninsured motorist policy if the trial court determined that the City of Fordyce, Joseph Watson, and the Arkansas Public Entities Risk Management Association were immune from suit.

On August 4, 2000, a hearing was held on the motion for summary judgment. On November 2, 2000, the trial court granted the motion. The trial court, relying on Ark. Code Ann. § 21-9-301 (Repl. 2001), determined that the City of Fordyce was immune from liability except to the extent of coverage by liability insurance. The trial court further found that insurance coverage was not required for the front-end loader because it was “special mobile equipment” pursuant to Ark. Code Ann. 27-14-211 (Repl. 1994), and as such was not subject to registration with the State pursuant to Ark. Code Ann. § 27-14-703 (Repl. 1994). Based on these findings, the trial court concluded that there was no material issue of fact for determination by a jury.

On November 10, 2000, appellee Southern Farm Bureau Casualty Insurance Company filed a motion for summary judgment. Farm Bureau argued that appellants’ claims for benefits from their uninsured motorist policy were improper because the front-end loader was not an “auto” as defined in the policy.

On November 20, 2000, a hearing was held on Farm Bureau’s motion. On November 29, 2000, the trial court entered an order granting Farm Bureau’s motion. The trial court concluded that a front-end loader was special mobile equipment and was not a vehicle that was designed primarily to be used on public roads. Based on this finding, the trial court concluded that appellants could not recover from their uninsured motorist policy.

It is from these orders that appellants appeal. They raise two points for our review. We reverse the trial court’s order, and remand the matter for development of unresolved questions of fact.

In their first point on appeal, appellants contend that the trial court erred when it granted the motion for summary judgment filed by the City of Fordyce, Joseph Watson, and the Arkansas Public Entities Risk Management Association. 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 party is entided to judgment as a matter of law. Baldridge v. Cordes, 350 Ark. 114, 85 S.W.3d 511 (2002). Once the moving party has established a prima facie entitlement to summary judgment, the opposing party must meet proof with proof and demonstrate the existence of a material issue of fact. Id. On appellate review, we determine if summary judgment was appropriate based on whether the evidentiary items presented by the moving party in support of the motion leave a material fact unanswered. Id. We view the evidence in a light most favorable to the party against whom the motion was filed, resolving all doubts and inferences against the moving party. Id.

Appellants challenge several of the findings upon which the trial court relied in granting the motion for summary judgment. First, appellants argue that the trial court erred in concluding that the City was entitled to tort immunity. Next, appellants contend that the trial court erred when it determined that the City was not required to maintain insurance on the front-end loader. Finally, appellants argue that the trial court erred when it determined that the front-end loader was not a motor vehicle.

In addressing appellants’ contention, we must start with the basic principle that:

all counties, municipal corporations, school districts, special improvement districts, and all other political subdivisions of the state and any of their boards, commissions, agencies, authorities, or other governing bodies shall be immune from liability and from suit for damages except to the extent that they may be covered by liability insurance. No tort action shall lie against any such political subdivision because of the acts of its agents and employees.

Ark. Code Ann. § 21-9-301. Pursuant to the statute, the City enjoys immunity from liability and from suits for damages except to the extent that it is covered by liability insurance, or acts as a self insured for certain amounts as provided by statute.

With this basic principle in mind, we then look to Ark. Code Ann. § 21-9-303 (Repl. 1996) for guidance on maintaining liability insurance. The statute provides:

(a) All political subdivisions shall carry liability insurance on their motor vehicles or shall become self-insurers, individually or collectively, for their vehicles, or both, in the minimum amounts prescribed in the Motor Vehicle Safety Responsibility Act, § 27-19-101 et seq.
* * *
(c) Any person who suffers injury -or damage to person or property caused by a motor vehicle operated by an employee, agent, or volunteer of a local government covered by this section shall have a direct cause of action against the insurer if insured, or the governmental entity if uninsured, or the trustee or chief administrative officer of any self-insured or self-insurance pool. Any judgment against a trustee or administrator of a self-insurance pool shall be paid from pool assets up to the maximum limit of liability as herein provided.

Ark. Code Ann. § 21-9-303. Pursuant to the statute, the City must carry liability insurance on its motor vehicles, or assume statutory responsibility as a self-insured.

Based on this language, we consider whether the City’s front-end loader, which collided with Mr. Saeler’s car, was a “motor vehicle” as that term is used in the statute. Arkansas Code Annotated § 27-19-206 (Repl. 1994) defines a “motor vehicle” as “every vehicle which is self-propelled and every vehicle which is propelled by electric power obtained from overhead trolley wires but not operated upon rails.” Id. This definition is a broad declaration that every self-propelled vehicle that does not operate on rails is a “motor vehicle.” However, our analysis does not end with this broad definition. In Cousins v. Dennis, 298 Ark. 310, 77 S.W.2d 296 (1989), a case somewhat similar to the one now on review, we articulated a test that accompanies the statutory definition, and which may be used to determine whether the front-end loader is a motor vehicle.

In Cousins, a student was injured by a bush-hog mower being pulled by a tractor. The school district did not maintain liability insurance on the tractor. The injured student argued that the tractor was a motor vehicle and that pursuant to Ark. Code Ann. § 21-9-303 the school was required to carry liability insurance on the tractor. The school district argued:

21-9-303(a) requires insurance on motor vehicles in the minimum amounts prescribed in the Motor Vehicle Safety Responsibility Act, 27-19-101 et seq. By referring to 27-19-101 et seq., the General Assembly obviously intended that the insurance coverage required of political subdivisions under 21-9-303(a) should be subject to all of the provisions of the Motor Vehicle Safety Responsibility Act.

Cousins, supra. We agreed with the school district’s contention, and looked to the Motor Vehicle Responsibility Act for guidance in our determination of whether a tractor was a motor vehicle. We explained:

Ark. Code Ann. 27-19-605 and 27-19-713 (1987) provide the minimum amounts of liability insurance coverage for a security deposit or proof of further financial responsibility required under the Act. As we noted earlier, a school district becomes a self-insurer, if found liable, in an amount not to exceed those minimum amounts. The minimum liability insurance amounts required under these statutory provisions, subject to certain exceptions, apply to the driver and owner of any vehicle of a type subject to registration under the motor vehicle laws of this state, Ark. Code Ann. 27-19-601 (1987), and to persons who have been convicted of or forfeited bail or who have failed to pay judgments upon causes of action arising out of ownership, maintenance, or use of vehicles of a type subject to registration under the laws of this state. Ark. Code Ann. 27-19-702 (1987).
We believe the General Assembly, in requiring political subdivisions to purchase motor vehicle liability insurance, never intended non-registered vehicles to be covered. In passing § 21-9-303, the legislature undoubtedly was aware of how Arkansas’s Motor Vehicle Responsibility Act and vehicle registration laws worked together in requiring security deposits and liability insurance coverage only on those vehicles which are subject to registration.

Cousins, supra, (emphasis supplied)(internal citations omitted).

Relying upon Arkansas’s motor vehicle registration laws, we determined that the tractor, which injured the student, was an “implement of husbandry” and as such was not subject to registration with the State. Id. Because the tractor was not subject to registration, we reasoned that it was not a “motor vehicle” as that term is used in Ark. Code Ann. § 21-9-303. Accordingly, we held that the school district was not required to maintain liability insurance on the tractor. Cousins, supra.

We now consider whether the trial court was correct in concluding that the City’s front-end loader was not a motor vehicle as a matter of law. As we begin our analysis, in accordance with our decision in Cousins, supra, we first consider whether the front-end loader is subject to registration under Arkansas’s motor-vehicle laws. Arkansas Code Annotated § 27-14-703 describes the vehicles that are subject to registration. The statute provides:

Every motor vehicle, trailer, semitrailer, and pole trailer when driven or moved upon a highway and every mobile home shall be subject to the provisions of this chapter except:
(1) Any vehicle driven or moved upon a highway in conformance with the provisions of this chapter relating to manufacturers, transporters, dealers, lienholders, or nonresidents or under a temporary registration permit issued by the office as authorized in 27-14-708;
(2) Any vehicle which is driven or moved upon a highway only for the purpose of crossing such highway from one (1) property to another;
(3) Any implement of husbandry whether of a type otherwise subject to registration under this chapter or not which is only incidentally operated or moved upon a highway;
(4) Any special mobile equipment as defined in 27-14-211;
(5) Any vehicle which is propelled exclusively by electric power obtained from overhead trolley wires, though not operated upon rails;
(6) No certificates of title need be obtained for any vehicle of a type subject to registration owned by the federal government.

Ark. Code Ann. § 27-14-703.

In the case now before us, the trial court determined that the City’s front-end loader was “special mobile equipment” as a matter of law, and as such fit within an exception to the vehicle registration requirement. Arkansas Code Annotated § 27-14-211 defines special mobile equipment. The statute provides:

Special mobile equipment means every vehicle not designed or used primarily for the transportation of persons or property and incidentally operated or moved over the highways, including farm tractors, road construction or maintenance machinery, ditch-digging apparatus,, well-b.oring apparatus, and concrete mixers.

Id.

In their motion for summary judgment, the City of Fordyce, Joseph Watson, and the Arkansas Public Entities Risk Management Association did not present evidence as to whether the front-end loader met the definition of special equipment. The appellees argued instead that “a tractor, such as a front-end loader involved in this case, is not a motor vehicle as that term is used under the statutes, and does not require insurance.” Additionally, the appellees discussed the rules outlined in Cousins, and argued that “for the same reasons expressed in the Cousins case, the separate defendants in the present case are immune from liability. . .[.]”

In their response to the motion for summary judgment, appellants argued that the front-end loader was not excepted from the statutory definition of a motor vehicle because it was “routinely being driven along [the] streets of Fordyce for transportation purposes.” Appellants offered the depositions of Joseph Watson in response to the motion for summary judgment. In his deposition, Mr. Watson stated that the front-end loader was frequently driven on public streets. Fie also explained that the front-end loader was used on numerous jobs around the City. Specifically, Mr. Watson explained that the front-end loader performed many duties such as clipping shoulders, cleaning ditches, loading gravel, back-dragging asphalt, and picking up brush. Appellants also offered the deposition of William Lyon, the Mayor of Fordyce. In his deposition, Mr. Lyon testified that the only way the City could transport the front-end loader was to drive it on public roads.

At the hearing on the motion, the City of Fordyce, Joseph Watson, and the Arkansas Public Entities Risk Management Association argued that the front-end loader did travel on the public roads, but that the travel was a necessary requirement of its job. In response to this contention, appellants argued that the front-end loader was not “just incidentally driven along the highway” but that “it was being driven as transportation along the highway.”

On this issue, the trial court found:

[T]he front-end loader tractor here was not used primarily for transportation but operated on the public roads incidentally due to its intended purpose in the construction or repair and maintenance of roads.

After reviewing the evidence, we conclude that a genuine issue of material fact remains to be resolved. We conclude that appellants raised a genuine issue of fact as to whether the operation of the front-end loader on public roads was frequent and regular or merely incidental. Until this disputed factual question is resolved, it is impossible to determine whether the front-end loader is excepted from the statutory definition of “motor vehicle.” Accordingly, the trial court erred when it granted the motion for summary judgment filed by the City of Fordyce, Joseph Watson, and the Arkansas Public Entities Risk Management Association, and we remand for resolution of the factual issues.

In their second point on appeal, appellants argue that the trial court erred when it granted Farm Bureau’s motion for summary judgment. We conclude that the motion for summary judgment was premature. Specifically, we conclude that the issue of whether appellants may recover from Farm Bureau is not ripe for consideration until the issue of whether the City was required to carry insurance on the front-end loader is resolved. Because we have determined that this issue is not yet resolved, any consideration by the trial court of a motion for summary judgment in favor of Farm Bureau was premature, and any review by this court of the disposition of such a motion would- also be premature. Accordingly, we decline to consider the merits of appellants’ second point on appeal.

Reversed and remanded.

Glaze, J dissents.

Tom Glaze, Justice.

I respectfully dissent. The law is well established that political subdivisions are immune from liability for damages. See Cousins v. Dennis, 298 Ark. 310, 77 S.W.2d 296 (1988); Ark. Code Ann. § 21-9-301 (1987). However, under Ark. Code Ann. § 21-9-303(a) (Repl. 1996 and Supp. 2001), a political, subdivision (like the City of Fordyce here) shall carry liability insurance on its motor vehicles in the minimum amounts prescribed in the Motor Vehicle Safety Responsibility Act, Ark. Stat. §§ 27-19-101 (1987), et seq.

In Cousins, this court held that the General Assembly, in requiring political subdivisions to purchase such liability insurance, never intended non-registered vehicles to be covered. The Cousins court further held that, in applying Arkansas’ registration laws, mowers and other vehicles not designed for transportation purposes are designated as special mobile equipment and exempted from registration. See Ark. Code Ann. §§ 27-14-703(4) and 27-14-211 (Repl. 1987). Stated in other terms, the court concluded that self-propelling mowers and other equipment not designed or intended for transportation purposes are not required to comply with the insurance provisions required under § 21-9-303(a). Accordingly, in Cousins, the court held that a school district’s bush-hog mower was not designed for transportation purposes and was exempt as special mobile equipment as defined in § 27-14-211, which exempted such equipment from the state’s vehicle registration laws.

In the present case, the majority court does not seriously suggest that the City of Fordyce’s 16,000 pound Coyote C-26 front-end loader is designed or intended for transportation purposes. However, the majority opinion does submit that a genuine issue of fact exists on whether the front-end loader is exempt from the state vehicle registration as “special mobile equipment.” Ark. Code Ann. § 27-14-211 provides as follows:

Special mobile equipment means every vehicle not designed or used primarily for the transportation of persons or property and incidentally operated or moved over the highways, including farm tractors, road construction or maintenance machinery, ditch-digging apparatus, well-boring apparatus, and concrete mixers. (Emphasis added.)

The majority bores in on the above statute and suggests the evidence is enough to raise a factual dispute as to whether the city’s front-end loader is “used primarily for transportation on public roads,” and, therefore, is not exempt from the vehicle registration laws as special motor equipment. The majority opinion premises its position on the deposition of Joseph Watson, who was driving the city equipment when it collided with plaintiff Barbara Spears’s car. Watson averred that he drove his frónt-end loader frequently on public streets, and the equipment was used on numerous jobs around the city. The Mayor of Fordyce, William Lyon, said that the only way the city could transport its front-end loader was to drive it on public roads. In short, the plaintiffs/ appellants argue that the front-end loader was not just incidentally driven along the highway, but, instead, it was driven as transportation along the highway.

The plain language of §27-14-211 exempts from vehicle registration laws any equipment not designed or used primarily for transportation of persons or property and incidentally operated or moved over the highways,” including . . . road or maintenance machinery.” It seems abundantly clear that a 16,000 pound front-end loader is neither designed nor intended to be primarily used for transportation purposes on the public roads or highways. In fact, as the majority opinion relates, Watson used the front-end loader to “clip shoulders alongside public roads, clean ditches, fix sewer and water lines, dump asphalt into holes on the street, and pick up brush.” Obviously, the equipment was designed and being primarily used to do road repair and maintenance jobs, and, here, the operator’s driving of the equipment was incidental to getting the front-end loader to where he would perform these maintenance jobs.

       Mr. Watson explained that this is a procedure whereby dirt is removed from the side of the road, and the road is smoothed over before oil and pea gravel are placed on the road.

       The Cousins court also concluded that the school district’s mower was an “implement of husbandry,” under Ark. Code Ann. § 27-14-212 (Repl. 1994), and was specifically exempted from vehicle registration laws.