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

text:
    Lavern MANS v. PEOPLES BANK of IMBODEN
    99-773
    10 S.W.3d 885
    Supreme Court of Arkansas
    Opinion delivered March 2, 2000

      Walmsley & Weaver, by: Tim Weaver, for appellant.

      Dick Jarboe, for appellee.
   Robert L. Brown, Justice.

The appellant, Lavern Mans, appeals the grant of a directed verdict in favor of the appellee, Peoples Bank of Imboden, on her negligence action. We hold that there was no legal duty established based on trust to support Mans’s cause of action for negligence, and we affirm the grant of the directed verdict.

The facts are that on June 21, 1993, Lavern Mans and her husband, Jimmie Mans, executed a promissory note made payable to Peoples Bank in the amount of $25,949.55. The proceeds of the note were to be used for home improvements. At the same time, the Manses took out a joint credit life insurance policy on both of their lives to cover the amount due on the promissory note. Peoples Bank acted as the agent for the credit life company, American Pioneer Life Insurance Company, and were paid part of the premium for this service. The term of both the promissory note and the credit life policy was twenty-four months. The annual premium for the credit life policy was $1,054.55. The Manses agreed to finance payment of this premium in addition to the money borrowed under the promissory note based on a ten-year amortization schedule. With the addition of the credit life premium, monthly payments on the promissory note were $351.70.

On June 21, 1995, the promissory note became due, and the Manses and the bank agreed to an extension of the note. The credit life insurance policy, however, lapsed at the end of the two-year term. After the note was extended by agreement, the monthly payments under the note remained the same.

On July 23, 1997, Jimmie Mans died, and Lavern Mans requested Peoples Bank to make a claim to the carrier under the credit life policy to pay off the home improvement loan. She was informed by Peoples Bank that the policy lapsed on June 21, 1995, and that American Pioneer Life would not pay her claim.

On July 2, 1998, Lavern Mans sued Peoples Bank for negligence in fading to notify her that the credit life policy had lapsed. Had she been notified, she alleged, the Manses would have extended the joint coverage on both of their lives. She prayed for judgment over against Peoples Bank for the amount due on the promissory note.

A jury trial ensued, and at the close of Lavern Mans’s case, Peoples Bank moved for a directed verdict on the basis that the relationship between the bank and the Manses was one of debtor-creditor and that there had been no proof of a special relationship beyond that of debtor-creditor. Peoples Bank further argued, in the alternative, that there had been no proof that the bank did not tell her husband, Jimmie Mans, that the credit life policy had lapsed at the end of the two-year period.

Lavern Mans responded to the directed-verdict motion and argued that she and her husband continued to pay the same note payment after the note was extended on June 21, 1995. She argued that because of this, she assumed the credit life insurance had been extended, even though she knew the term of the policy was only for two years. Also, she claimed that no one at Peoples Bank advised her to the contrary, and she trusted the bank to tell her if there was a lapse.

The trial court found that there was no duty owed by the bank under a negligence theory to notify Lavern Mans that the credit life policy had lapsed, and the court granted the motion for directed verdict in favor of Peoples Bank.

Lavern Mans’s sole argument on appeal is that the trial court erred in finding that Peoples Bank had no legal duty to notify her that the credit life policy had expired. She first acknowledges in her brief that the issue of duty is always one for the trial court and never one for the jury, and, thus, is decided as a matter of law. She then goes forward, in seeming contradiction, and cites us to a court of appeals case, Home Federal Sav. & Loan Ass’n v. Bass, 1 Ark. App. 146, 613 S.W.2d 604 (1981), for the proposition that a jury may decide whether a duty exists. The crucial questions in our analysis, therefore, are (1) what duty did the bank owe to her based on the relationship that existed between the parties, and (2) did the trial court err in refusing to find a duty based on trust in this negligence claim?

According to Lavern Mans’s complaint, her cause of action is solely one of negligence based on a failure to notify. During her direct examination at trial, however, this questioning took place:

Mr. Weaver ¡for Lavern Mans]: Now, during this period of time that you had been with the bank for some twenty-three years, did you trust the bank?
Mans: Yes
WEAVER: And would you ...
Mans: Completely.

At that point, counsel for Peoples Bank objected, resulting in the following sidebar conference between counsel and the trial court:

By Mr. JARBOE ¡for Peoples Bank]: I’m going to object to this line of testimony because fiduciary relationship or confidential relationship was not pled and to establish anything other than just ordinary debtor-creditor relationship, those allegations have to be pled.
By Mr. WEAVER ¡for Lavern Mans]: I don’t have, I’m not claiming that there was a fiduciary relationship. I’m just claiming what the duty was and what the bank did or did not do because there’s going to be testimony from Mr. Clark that he knows that unsophisticated customers relied upon the bank. She’s going to testify that she both trusted the bank and relied upon the bank.
By Mr. JARBOE: Still hadn’t been pled, Judge.
By THE Court: Yeah, I agree. You’re getting into something much further than negligence.
By Mr. Weaver: But the, the negligence you have to prove a duty.
By the Court: Yeah, but trusting?
By Mr. Weaver: That’s the duty. The bank, they get paid for it, Judge. The testimony’s going to be that they got thirty to forty per cent of this woman’s credit life premium and the bank had a duty, they were getting interest from this lady, they were getting thirty to forty per cent of her premium.
By THE COURT: This is an arm’s length transaction. This is not trusting and this and that and the other.
By Mr. Weaver: Sure it is.
By the Court: No, it isn’t. I don’t agree with that. If you, if you have to trust, you have a fiduciary relationship. Now you’re close on the fact that he’s an agent, but that doesn’t have anything to do with the type of insurance so, no, I don’t think this is correct.
By Mr. Weaver: But I’m not, I’m not asking about, all I’m asking her is what her relationship had been with this bank. And that course, that course of relationship...
By THE COURT: The relationship with that bank is an arm’s length, debtor-creditor relationship.
By Mr. Weaver: But it’s going to be also what, it’s going to be what it is if she testifies, “I always trusted the bank and relied upon the bank.”
By THE COURT: That’s not fair to the bank.
By Mr. Weaver: Well, I’m not...
By the Court: You’re on negligence. You’re trying to have your cake and eat it, too.
By Mr. Weaver: But there has to be a duty and we have to establish what the duty is.
By the Court: The duty is not trust. The duty is what a ordinary, reasonable person would do under the circumstances. Not trust. You’re throwing in your best ace which is your, which is your fact that she’s a widow, but it doesn’t have anything to do with fault or comparative fault in a negligence case. I agree with him on that.
By Mr. Weaver: But I, Judge, I think if they acknowledge that they know that these people rely on them, that puts them in that, that gives them the duty to at least have noticed her up.
By THE Court: It’s a debtor-creditor relationship, Tim. How do you have trust in — no, huh-uh, not under the law.
By Mr. Jarboe: I’ve got a case I’ll show the Court.
By the Court: No, you don’t need to show it.
By Mr. Weaver: Well, I’m going, I’m going to proffer that her testimony about this would be that she trusted this bank over a period of twenty three years, that she counted on the bank to do the right thing and that is tell her. The bank has testified via Preston Clark that, yes, these unsophisticated customers...
By THE COURT: There’s your problem.
By Mr. Weaver: What’s the problem?
By THE COURT: The law does not recognize sophisticated and unsophisticated in a debtor-creditor relationship on a note.
By Mr. Weaver: But it’s a fact. This is just a fact.
By the Court: I’ve ruled, let’s go. I’m not going to allow it.

We glean from this extended colloquy that counsel for Lavern Mans attempted to prove a legal duty of trust in a negligence case without first establishing a fiduciary relationship. In fact, counsel for Lavern Mans clearly stated that he was not claiming that a fiduciary relationship existed. Part of the problem in this case is an inherent conflict in Mans’s position regarding the bank’s legal duty. On the one hand, she does not claim that her relationship with the bank was fiduciary in nature. On the other hand, she contends that her relationship was one of trust based on twenty-three years of business dealings.

There are certain blackletter principles that bear mention in connection with Mans’s argument. First, this court has recognized that a policyholder has a duty to educate herself concerning her insurance. See Scott-Huff Ins. Agency v. Sandusky, 318 Ark. 613, 887 S.W.2d 516 (1994); Continental Cos. Co. v. Didier, 301 Ark. 159, 783 S.W.2d 29 (1990); Howell v. Bullock, 297 Ark. 552, 764 S.W.2d 422 (1989); Stokes v. Harrell, 289 Ark. 179, 711 S.W.2d 755 (1986). In those cases where an established relationship between the insured and the insurance agent has developed over a period of time with the agent being actively involved in the insured’s business affairs and in the maintenance of her insurance coverage, a special relationship may be found to exist. See Stokes v. Harrell, supra. In such cases, some jurisdictions have found that a duty to keep the insured informed exists on the part of the agent. Id. In Stokes, this court concluded that there was only minor contact between the insurance agent and the insured regarding the initial fire insurance on his business and when he increased the amount of insurance three years later. Under those circumstances, we held that the trial court was correct in granting a directed verdict in favor of the carrier.

The question of the duty owed to the plaintiff alleging negligence is always one of law and never one for the jury. D.B. Griffen Warehouse, Inc. v. Sanders, 336 Ark. 456, 986 S.W.2d 836 (1999); DeHart v. Wal-Mart Stores, 328 Ark. 579, 946 S.W.2d 647 (1997); Lawhon Farm Supply, Inc. v. Hayes, 316 Ark. 69, 870 S.W.2d 729 (1994); Catlett v. Stewart, 304 Ark. 637, 804 S.W.2d 699 (1991); Keck v. American Employment Agency, Inc., 279 Ark. 294, 652 S.W.2d 2 (1983). If the court finds that no duty of care is owed, the negligence count is decided as a matter of law. D.B. Griffen Warehouse, Inc. v. Sanders, supra; Dunn v. Westbrook, 334 Ark. 83, 971 S.W.2d 252 (1998); Smith v. Hansen, 323 Ark. 188, 914 S.W.2d 285 (1996) . Duty is a concept which arises out of the recognition that relations between individuals may impose upon one a legal obligation for another. Shannon v. Wilson, 329 Ark. 143, 947 S.W.2d 349 (1997) , citing W. PROSSER, Handbook on the Law of Torts, § 42 at 244 (1971).

For a fiduciary relationship to exist, this court has emphasized the necessity of factual underpinnings to establish a relationship of trust between a bank and its customers, which is more than a debtor-creditor relationship. See Country Corner Food & Drug, Inc. v. First State Bank, 332 Ark. 645, 966 S.W.2d 894 (1998); Milam v. Bank of Cabot, 327 Ark. 256, 937 S.W.2d 653 (1997); J. W. Reynolds Lumber Co. v. Smackover State Bank 310 Ark. 342, 836 S.W.2d 853 (1992). In Country Corner Food & Drug, Inc., for example, we affirmed a summary judgment in favor of the bank on the basis that lack of sophistication of the customer and the bank’s alleged advice not to seek independent counsel did not create a fiduciary relationship. In J.W Reynolds Lumber Co., we said:

Here there were no facts to indicate that Reynolds and the Bank had any relationship beyond that of debtor/creditor. That being so, there was no fiduciary relationship and the chancellor did not err in dismissing the claim based on implied trust.

310 Ark. at 347, 836 S.W.2d at 855.

In assessing Lavern Mans’s legal arguments, both before the trial court and on appeal, we conclude that the whole thrust of her case is that a relationship had developed with the bank beyond that of debtor-creditor and that she was entitled to rely on the bank to keep her informed. What she is claiming, without saying so, is that a special relationship had evolved leading to this reliance or trust that the bank would advise her on matters such as insurance lapses. Yet, she does not describe this relationship as one that was fiduciary in nature. She is content to argue that the bank owed her a legal duty based on her trust that the bank would tell her if her credit life insurance had lapsed. She admits that this is an issue of first impression for this court and then relies on the court of appeals decision, Home Federal Sav. & Loan v. Bass, supra, which concerned the failure of a savings and loan association to procure credit life insurance after the customers requested that it do so. Failure to procure insurance upon request is categorically different from what we have before us in the instant case.

We conclude that Lavern Mans is off the mark in arguing that the bank owed her a legal duty to keep her advised of insurance matters simply because she trusted the bank. Ordinarily, the relationship between a bank and its customer is one of debtor and creditor. See J. W. Reynolds Lumber Co. v. Smackover State Bank, supra. And the duty owed for simple negligence is one of ordinary care. For the relationship to be more than one of debtor and creditor, factual underpinnings for that special relationship must be proved by the customer. Id. In the instant case, Mans makes no effort to prove a fiduciary relationship, and her counsel specifically stated to the trial court that he would not do so. Without any effort to establish such a relationship, which would justify a fiduciary duty, we are unable to agree that the trial court erred in determining that no legal duty based on her trust was owed by the bank.

Even were we to treat Mans’s argument as one of implied trust grounded on a fiduciary relationship or a special relationship based on course of dealing, her proof falls short of substantial evidence, which is necessary to ward off a directed verdict. See Barnes, Quinn, Flake & Anderson v. Rankins, 312 Ark. 240, 848 S.W.2d 924 (1993). Substantial evidence must be sufficient to compel a conclusion one way or the other and must go beyond suspicion or conjecture. Id. First, Lavern Mans’s counsel sought to prove a trusting relationship merely by showing that his client was unsophisticated and had done business with the bank with her husband for twenty-three years. The trial court recognized that lack of sophistication does not equate to a fiduciary relationship, even if one had been asserted. See Country Corner Food & Drug, Inc. v. First State Bank, supra. Moreover, there was no proof that the bank, as insurance agent, was intimately involved in the Manses’ business affairs so as to give rise to any obligation on the bank’s part. See Stokes v. Harrell, supra. In fact, the proof showed to the contrary in that it was the Manses who decided when to take out credit life insurance. Sometimes they took out coverage on their loans and sometimes they did not. Because of their age, they decided to do so on the home improvement loan in question. But no proof was offered that this was at the bank’s direction or based on the bank’s advice.

The Peoples Bank’s CEO, Preston Clark, did testify to an unwritten bank policy of informing customers when their credit life coverage expired. Yet, Lavern Mans did not testify that she knew about this policy. Thus, she could not have relied on it. She did testify that she knew the term of her credit life policy was only for two years. She simply assumed the coverage continued beyond that date because her note payment remained the same. She made this assumption even though she knew the credit life premium payments were being amortized over ten years. Furthermore, she did not testify to any course of dealing with the bank where notice of insurance lapses was given to her or to her husband. It was made clear at the trial that Jimmie Mans took the lead in banking affairs for the family and had the bulk of the contacts with the bank. He was the one who went to the bank to extend the loan beyond June 21, 1995. We have no way of knowing what he knew about the status of the credit life policy after that date.

Our caselaw supports the notion that more must be shown to establish a fiduciary relationship and give rise to a fiduciary duty than was done in this case. See County Corner Food & Drug, Inc. v. First State Bank, supra; Milam v. Bank of Cabot, supra; J. W. Reynolds Lumber Co. v. Smackover State Bank, supra. Had this been a case where the bank had previously advised the Manses of when a credit fife policy lapsed, or where the Manses were unaware of the duration of the policy’s term and the amortization schedule for paying the policy’s premium, or where the Manses were aware of the bank’s policy to inform about lapses, this would be a different matter. See Lowery v. Guaranty Bank & Trust Co., 592 S.2d 79 (Miss. 1991). But those facts are not before us.

In sum, this case seems analogous to the facts in Country Corner Food & Drug, Inc. v. First State Bank, supra, where we affirmed a summary judgment in favor of the bank even though the bank customer was unsophisticated and even though the bank, allegedly, had misled its customer about whether to seek independent advice. Here, the appellant would have us impose an obligation of implied trust based solely on a twenty-three year banking relationship and what she assumed, even though she knew the term of her credit life policy was only two years. This disregards our caselaw that an insured has some obligation to educate herself, if she had some question about the amount of the note payment and continuation of the insurance. Without substantial evidence that the banking relationship was fiduciary in nature or that the course of dealing warranted her repose of trust regarding notification, we are unable to conclude that the trial court erred in directing the verdict.

Affirmed.

Glaze, J., dissents.

Tom Glaze, Justice,

dissenting. I dissent. Arkansas law is clear that once one undertakes a duty, “even though gratuitously, [he] may thereby become subject to the duty of acting carefully, if he acts at all.” Haralson v. Jones Truck Lines, 223 Ark. 813, 270 S.W.2d 892 (1954) (citing Glanzer v. Shepard, 233 N.Y. 236, 135 N.E. 275 (1922)).

In Haralson, a truck driver named Fulfer gave a truck traveling behind him a signal that it was safe to pass. The following truck, acting on Fulfer’s signal, pulled out into the left-hand lane in order to pass, but in passing, ran over Carl Charles, who was walking down the left side of the road with his back to the trucks. The question presented was that of Fulfer’s negligence in giving the signal. This court noted that, although Fulfer’s truck did not itself come into contact with Charles, Fulfer signaled the trailing vehicle to pass him. It was the fact of that signal — even though Fulfer was under no legal duty to signal at all — that gave rise to Fulfer’s duty to act with ordinary care. Haralson, 223 Ark. at 816-17, 270 S.W.2d at 894-95.

Although there remains a gulf between cases involving misfeasance and those in which the defendant is guilty of nonfeasance (or failing to act when one owes a duty to do so), Prosser and Keeton note that liability for nonfeasance has been increasingly recognized over the last century, finding such liability

[i]n . . . relationships [in which] the plaintiff is typically in some respect particularly vulnerable and dependent upon the defendant who, correspondingly, holds considerable power over the plaintiff’s welfare. In addition, such relations have often involved some existing or potential economic advantage to the defendant. Fairness in such cases thus may require the defendant to use his power to help the plaintiff, based upon the plaintiff’s expectation of protection, which itself may be based upon the defendant’s expectation of financial gain.

W. Page Keeton et al., Prosser and Keeton on the Law of Torts, § 56, at 374 (5th ed. 1984).

In the instant case, the bank acted as an agent of the insurance company which offered the credit life policy, receiving thirty percent to forty percent of the premiums paid to American Pioneer Life. Although the bank would ordinarily owe no duty to its customers to inform that their insurance policies were about to lapse, it nonetheless assumed such a duty when it adopted its policy of conveying such information to its customers. The establishment of this policy may have been a gratuitous assumption of a duty, but it was a duty nonetheless, and it carries with it the responsibility of acting with care.

In addition, the majority says that Ms. Mans’s lack of knowledge of the bank’s policy of informing customers prevents her reliance on that policy. However, her lack of knowledge is irrelevant. The plaintiff in Haralson, with his back to the traffic, was unaware that one truck driver had just signaled another that it was safe to pass, yet this court found a duty existed. Thus, in the circumstances now before us, it did not matter that Ms. Mans may have had no knowledge of the bank’s policy.

Because I am of the opinion that the bank undertook a duty toward Ms. Mans, I would reverse the trial court’s granting of a directed verdict and remand for a new trial.


source: Caselaw Access Project

author: Annabelle Clinton Imber, Justice.

license: Public Domain

text:
    Michael Wayne HINKSTON v. STATE of Arkansas
    CR 99-565
    10 S.W.3d 906
    Supreme Court of Arkansas
    Opinion delivered March 2, 2000

      Robert C. Marquette, for appellant.

      Mark Pryor, Att’y Gen., by: Kelly S. Terry, Ass’t Att’y Gen., for appellee.
   Annabelle Clinton Imber, Justice.

Appellant Michael Hinkston was convicted of capital murder and theft of property and sentenced to life imprisonment without parole and twenty years’ imprisonment, respectively. He raises four points for reversal. We find no error and affirm.

Mr. Hinkston’s conviction arose out of certain events that occurred on June 24, 1997. At trial and in a custodial statement given to police, Mr. Hinkston claimed he went with Tony Ray to the home of the victim, Lisa Lewis, because Mr. Ray had told him that Ms. Lewis was his aunt and that she had given him permission to borrow her car. Once they arrived at the victim’s home, Mr. Ray broke into the house while Mr. Hinkston waited in some nearby woods. Mr. Hinkston subsequently joined Mr. Ray inside the house, and the two men stayed there until Ms. Lewis returned home several hours later. Mr. Hinkston testified that shortly after the victim entered the house, Mr. Ray forced him to hold her at gunpoint in the back bedroom. Mr. Ray then told him to leave the bedroom and go to the living room. According to Mr. Hinkston, he was in the living room “staring at the wall,” when he heard screaming and begging coming from the back bedroom, followed by three shots. Soon afterward, Mr. Ray came running out of the bedroom, assured Mr. Hinkston that he had not shot Ms. Lewis, and both men fled from the scene in Ms. Lewis’s car. Meanwhile, Ms. Lewis managed to place a 911 call and told the dispatcher that she had been shot. Van Burén police officers and paramedics responded to the call and, upon arriving at the scene, found Ms. Lewis in the living room dying of gunshot wounds. She told a police officer that two white men had shot her. As a result of the 911 call, Mr. Hinkston and Mr. Ray were apprehended and arrested within a short time after they left the scene. Ms. Lewis was transported to the hospital where she died later that same day. An autopsy revealed that Ms. Lewis died of gunshot wounds to the hand, neck, and abdomen.

I. Admissibility of Expert Testimony

For his first point on appeal, Mr. Hinkston argues that the trial court erred when it granted the State’s motion in limine to exclude the testimony of Dr. Patricia Walz, a clinical psychologist who examined Mr. Hinkston prior to the trial. Mr. Hinkston asserts that the trial court’s ruling violated his right under the Sixth Amendment to the United States Constitution and the Arkansas Constitution to call witnesses on his behalf at trial. We have reiterated many times that arguments not raised at trial will not be addressed for the first time on appeal. Harris v. State, 320 Ark. 677, 899 S.W.2d 459 (1995). Furthermore, parties cannot change the grounds for an objection on appeal, but are bound on appeal by the scope and nature of their objections as presented at trial. Id. At trial, Mr. Hinkston never made an argument that the exclusion of Dr. Walz’s testimony would violate any of his constitutional rights, much less his constitutional right under the Sixth Amendment and the Arkansas Constitution to call witnesses on his behalf. We do not consider arguments, even constitutional ones, raised for the first time on appeal. Moore v. State, 323 Ark. 529, 915 S.W.2d 284 (1996); Martin v. State, 316 Ark. 715, 875 S.W.2d 81 (1994); Hamm v. State, 301 Ark. 154, 782 S.W.2d 577 (1990). Because Mr. Hinkston’s Sixth Amendment argument is not preserved for appellate review, we are precluded from addressing that issue on appeal.

Mr. Hinkston also makes a nonconstitutional argument that the exclusion of Dr. Walz’s testimony violated the rules of evidence. That argument was raised below and is, therefore, preserved for appellate review. Specifically, Mr. Hinkston contends that this court’s decision in Stewart v. State, 316 Ark. 153, 870 S.W.2d 752 (1994), does not prevent an expert, such as Dr. Walz, from giving testimony concerning a defendant’s inability to conform his conduct to the requirements of the law due to mental disease or defect or from giving an explanation of the defendant’s mental disease or defect and how it affected his statement to law enforcement officers.

In Stewart v. State, we held that expert testimony on the ability of a defendant to form specific intent to murder is not admissible. Stewart v. State, supra. In so holding, we drew a distinction between psychiatric testimony concerning whether a defendant has the ability to conform his conduct to the requirements of law at the time of the killing as part of an insanity defense and testimony on whether the defendant had or did not have the required specific intent to commit murder at a precise time:

A general inability to conform one’s conduct to the requirements of the law due to mental defect or illness is the gauge for insanity. It is different from whether the defendant had the specific intent to kill another individual at a particular time. Whether Stewart was insane certainly is a matter for expert opinion. Whether he had the required intent to murder Ragland at that particular time was for the jury to decide.... While expert testimony on whether a defendant lacked the capacity to form intent is probative, we question whether opinion evidence on whether the defendant actually formed the necessary intent at the time of the murder is.

State v. Stewart, 316 Ark at 159, 870 S.W.2d at 755. (Citations omitted.) We reiterated again in DeGracia v. State, 321 Ark. 530, 906 S.W.2d 278 (1995), that:

The basis of our holding [in Stewart v. State\ was that Rule 704 requires that expert opinion of the sort that “embraces an ultimate issue” must be “otherwise admissible.” To be otherwise admissible the evidence, according to Ark. R. Evid. 403, must be helpful to the jury and not tend to be confusing. We said in the Stewart case that the testimony in question was potentially misleading and confusing to the jury.

Id. at 532, 906 S.W.2d at 279.

In this case, Mr. Hinkston conceded at trial that he was not asserting the insanity defense. In light of his decision not to raise that defense, any testimony that Dr. Walz could have given about Mr. Hinkston’s inability to conform his conduct to the requirements of the law because of mental disease or defect was not relevant. See Ark. R. Evid. 402 (1999); Daniels v. State, 277 Ark. 23, 638 S.W.2d 676 (1982).

Likewise, there is no merit to Mr. Hinkston’s contention that Dr. Walz’s testimony was admissible to explain the inconsistencies in his statement to police officers. Mr. Hinkston testified at trial in his own defense. The State then cross-examined him extensively concerning inconsistencies in his statement to police officers. Mr. Hinkston’s attorney sought to bolster his client’s credibility by attempting to call Dr. Walz as a witness to show that the inconsistencies were attributable to Mr. Hinkston’s mental deficits. Where the introduction of expert testimony would invade the function of the jury or where it does not help the jury, it is not admissible. Utley v. State, 308 Ark. 622, 826 S.W.2d 268 (1992). One of the functions of the jury is to determine the credibility of witnesses. Johninson v. State, 317 Ark. 431, 878 S.W.2d 727 (1994). Expert testimony on the credibility of witnesses is an invasion of the jury’s province. Id. The trial court properly found that Dr. Walz’s testimony would have invaded the province of the jury.

The standard of review for a trial court’s ruling on the admissibility of expert testimony is abuse of discretion. Utley v. State, supra. In light of the purposes for which Mr. Hinkston offered Dr. Walz’s testimony, we conclude that the trial court did not abuse its discretion when it granted the State’s motion in limine to exclude the expert testimony. We affirm the trial court’s ruling on this point.

II. Discovery Violation

For his second point on appeal Mr. Hinkston contends that the trial court erred in when it denied his motion to strike the testimony of Officer Perry or, alternatively, when it overruled his motion for mistrial. On March 17, 1998, Mr. Hinkston filed a motion for discovery and requested that the prosecutor disclose and permit the inspection and copying of “any police reports made in connection with this case that relate to potential testimony of any police officers or other witnesses.” The prosecutor filed a response to that motion on August 3, 1998, which stated that he intended to call Officer Daniel Perry of the Van Burén Police Department as a witness, and that he would permit the inspection and copying of any relevant material, including police reports, made in connection with the case.

Officer Perry was the first officer to arrive at the victim’s home. He was called by the State to testify at trial about his investigation at the crime scene. During his testimony, Officer Perry referred to a police report that he had written on the day of the crime. Following an inquiry by Mr. Hinkston’s attorney about the nature of the document, the trial court ruled that it would allow the witness to use the report to refresh his memory. Officer Perry proceeded to testify that the victim was still alive when he found her at the crime scene and that she told him that two white men had shot her. Mr. Hinkston’s attorney immediately interposed a hearsay objection that was promptly overruled by the trial court based upon the excited utterance exception to the hearsay rule. During cross-examination, Mr. Hinkston’s attorney asked to see Officer Perry’s report and questioned him about it and the victim’s statement. Following Officer Perry’s testimony, two other witnesses, Brian Perez and Mark Spellman, testified on behalf of the State. Just as the State was about to call its next witness, George Cabinass, Mr. Hinkston’s attorney claimed for the first time that the State had failed to provide a copy of Officer Perry’s police report to the defense in its response to the defendant’s discovery motion. Based on that claim, defense counsel requested that Officer Perry’s testimony be stricken because the defense had no idea that the officer would testify about the victim telling him that two people shot her. Defense counsel further alleged that the State had committed prosecutorial misconduct by failing to provide the police report during discovery. The trial court denied the defendant’s motion to strike Officer Perry’s testimony. Later, following Mr. Cabinass’s testimony, Mr. Hinkston’s attorney made a motion for mistrial based on the State’s failure to provide Officer Perry’s police report, which motion was also denied by the trial court. Finally, Mr. Hinkston’s attorney renewed the motion to strike Officer Perry’s testimony at the conclusion of the State’s case-in-chief, and the trial court once again denied the motion.

On appeal, Mr. Hinkston asserts that the trial court erred when it denied his motion to strike Officer Perry’s testimony and his motion for mistrial. A party who does not object to the introduction of evidence at the first opportunity waives such an argument on appeal. Marts v. State, 322 Ark. 628, 968 S.W.2d 41 (1998). Similarly, objections to discovery violations must be made at the first opportunity in order to preserve them for appeal. Id. In Clark v. State, 323 Ark. 211, 913 S.W.2d 297 (1996), the appellant argued that a witness should not have been allowed to testify because the State failed to include her name on its witness list, in violation of its discovery obligations. The appellant, however, did not object to the testimony until the witness had already taken the stand and answered twenty-four questions. Id. We held that the issue was not preserved for appellate review because the appellant did not object at the earliest opportunity. Id. During Officer Perry’s testimony, Mr. Hinkston’s counsel objected solely on the basis of hearsay. At no time during the officer’s testimony did defense counsel assert that a discovery violation had occurred. In fact, defense counsel did not object to Officer Perry’s testimony on the basis of an alleged discovery violation until after Officer Perry had left the stand and two other witnesses had testified. The motion for mistrial was made even later, after yet a third witness had testified. On this record, we are constrained to conclude that Mr. Hinkston’s objection to the alleged discovery violation is not preserved for appellate review because it was not made at the first opportunity.

III. Batson Challenge

For his third point on appeal, Mr. Hinkston argues that the trial court erred in allowing the State to use a peremptory challenge to strike the only African-American member of the jury panel in violation of Batson v. Kentucky, 476 U.S. 79 (1986). We have delineated a three-step process to be used in the case of Batson challenges. MacKintrush v. State, 334 Ark. 390, 978 S.W.2d 293 (1998). First, the strike’s opponent must present facts to raise an inference of purposeful discrimination; that is, the opponent must present a prima facie case of racial discrimination. Id. Second, once the strike’s opponent has made a prima facie case, the burden shifts to the proponent of the strike to present a race-neutral explanation for the strike. Id. If a race-neutral explanation is given, the inquiry-proceeds to the third step, wherein the trial court must decide whether the strike’s opponent has proven purposeful discrimination. Id. Here, the strike’s opponent must persuade the trial court that the expressed motive of the striking party is not genuine but, rather, is the product of discriminatory intent. Id.

During voir dire, the State exercised a peremptory strike against Patrick Releford, the only African-American member on the jury panel, and Mr. Hinkston challenged the use of the strike. After the challenge was made, the trial judge asked the proponent of the strike for a race-neutral explanation, and the prosecutor gave the following explanation:

Your Honor, I have personal knowledge of that potential juror from about five years ago, an experience with him with possibility of methamphetamine problems.... And I also talked with Alan Calard, and he’s also aware of the problems and also officers of the Van Burén Police Office are aware of the problems with the potential methamphetamine with that potential juror.... No formal charges were ever filed against him. He’s been looked into, he’s been ... a potential suspect and investigated.... That’s why he was excluded, Your Honor.

The trial judge then stated that he thought that was a “good reason” and denied Mr. Hinkston’s challenge to the strike. At the end of voir dire, Mr. Hinkston renewed his Batson challenge, and the trial judge responded that he had already ruled on the issue and he believed that “the State has a good cause for striking him other than race, and that’s why the Court is overruling your motion.”

We will reverse a trial court’s ruling on a Batson challenge only when its findings are clearly against the preponderance of the evidence. Williams v. State, 338 Ark. 97, 991 S.W.2d 565 (1999). Also, we accord some measure of deference to the trial court in that it is in a superior position to make these determinations because it has the opportunity to observe the parties and determine their credibility. Id. After Mr. Hinkston made his prima facie case of discrimination, the prosecutor explained his reason for the strike, indicating that Mr. Releford had been struck because he had been investigated for problems with methamphetamine. In light of the United States Supreme Court’s decision in Purkett v. Elem, 514 U.S. 765 (1995), we have held that the State’s explanation must be more than a mere denial of racial discrimination, but need not be persuasive or even plausible, and, indeed, may even be silly or superstitious. MacKintrush v. State, supra. We have previously concluded that explanations similar to those given here were racially neutral. For example, in Jackson v. State, 330 Ark. 126, 954 S.W.2d 894 (1997), we held that the State had provided a race-neutral explanation for striking two jurors, one of whom had been in the prosecutor’s office “in connection with serious crimes” and had an ex-husband who had been charged with past crimes by the same prosecutor. Similar explanations have been upheld as being race neutral by the federal courts. See United States v. James, 113 F.3d 721 (7th Cir. 1997) (finding peremptory strikes to be racially neutral based on information that potential jurors had relatives who had been involved with drugs); United States v. Johnson, 54 F.3d 1150 (4th Cir. 1997) (holding the peremptory strike to be racially neutral based on the fact that the potential juror’s husband had been involved in criminal activity); United States v. Lewis, 40 F.3d 1325 (1st Cir. 1994) (upholding as race neutral a peremptory strike based on the fact that the potential juror’s employer was under investigation by the federal government for possible firearms offenses). Thus, the reasons articulated by the State for exercising a peremptory challenge against Mr. Releford were racially neutral.

After the prosecutor gave his reason for striking Mr. Releford, Mr. Hinkston offered no evidence or argument to rebut the prosecutor’s explanation. “If the strike’s opponent chooses to present no additional argument or proof but simply to rely on the prima facie case presented, then the trial court has no alternative but to make its decision based on what has been presented to it, including an assessment of credibility.” MacKintrush v. State 334 Ark. at 399, 978 S.W.2d at 297. After voir dire ended and the trial judge had already issued his ruling, Mr. Hinkston finally came forward with an argument that the State’s expressed reason for the strike was not genuine because the only African-American member of the jury panel was struck before the State even asked him any questions. He cites no authority for the proposition that the challenged juror must furnish the information on which a party bases a strike. We have previously held to the contrary: “[I]t is accepted practice for the prosecution as well as the defense to undertake a pretrial investigation of prospective jurors.” Jackson v. State, 330 Ark. at 130, 954 S.W.2d at 896. Based on this record, we cannot say that the trial court’s ruling on the Batson challenge was against the preponderance of the evidence.

IV Custodial Statements

For his final point on appeal, Mr. Hinkston argues that the trial court erred when it allowed Deputy Glenda Westover to testify for the State regarding statements made by Mr. Hinkston while he was in custody. At trial, Deputy Westover testified that she worked at the Crawford County Detention Center where Mr. Hinkston was incarcerated prior to trial. She testified that one her duties was to monitor prisoners’ activities for security. She accomplished that task by visually checking the cells every hour and by listening to a monitor that allowed her to hear the sounds in the cell blocks. Deputy Westover became familiar with and recognized Mr. Hinkston’s voice because he did a lot of talking. She testified that she overheard Mr. Hinkston say “that he had shot her, that they didn’t have as much fun as they had intended to have...” and he “[t]alked of plans that he had of doing this again.”

On appeal, Mr. Hinkston raises three separate challenges to the admission of Deputy Westover’s testimony. First, he argues that his Fourth Amendment rights were violated when Deputy Westover listened to his jail cell conversations by means of an electronic monitor. Mr. Hinkston’s attorney briefly mentioned “electronic eavesdropping” at the pretrial hearing on his motion to suppress the testimony, but did not argue to the trial court, as he does here, that Mr. Hinkston had a reasonable expectation of privacy in his jail cell that was protected by the Fourth Amendment or that the statements overheard by Deputy Westover were inadmissible because they were the result of an illegal search. Arguments not raised below will not be addressed for the first time on appeal, and parties are bound on appeal by the scope and nature of the objections and arguments they presented below. State v. Donahue, 334 Ark. 429, 978 S.W.2d 748 (1998). We are thus precluded from reaching this argument on appeal.

Mr. Hinkston next argues that Deputy Westover’s testimony regarding his jail-cell statements should not have been admitted by the trial court because, under Ark. R. Evid. 403, the statements were so inflammatory that their probative value was substantially outweighed by the danger of unfair prejudice. Ark. R. Evid. 403 states:

Although relevant, evidence may be excluded if its probative value is substantially outweighed by the danger of unfair prejudice, confusion of the issues, or misleading the jury, or by considerations of undue delay, waste of time, or needless presentation of cumulative evidence.

Ark. R. Evid. 403. Determining the relevancy of evidence and gauging the probative value of that evidence against the danger of unfair prejudice pursuant to Rule 403 is within the trial court’s discretion, and we will not reverse the trial court on appeal absent a manifest abuse of that discretion. McLennan v. State, 337 Ark. 83, 987 S.W.2d 668 (1999). Mr. Hinkston asserts that the statements he made while incarcerated had only a nominal probative value. We disagree. In fact, those statements were highly probative because they constituted admissions of his involvement in the murder and provided evidence of the circumstances surrounding the crime and his intent to kill the victim. Furthermore, the mere fact that his statements were incriminating does not render them unfairly prejudicial under Rule 403 because “any evidence that tends to establish the guilt of the defendant is inherently prejudicial.” Baker v. State, 334 Ark. 330, 337, 974 S.W.2d 474, 478 (1998). We conclude, therefore, that the trial court did not abuse its discretion in admitting the testimony under Rule 403.

Finally, Mr. Hinkston claims that the statements should have been excluded under Ark. R. Evid. 901, which governs the authentication and identification of evidence. He contends that the circumstances under which Deputy Westover heard the statements, i.e., that she did not physically see Mr. Hinkston make the statements and that she did not memorialize them immediately, render the statements’ authenticity and integrity suspect. In essence, Mr. Hinkston questions the reliability of Deputy Westover’s testimony. In State v. Sheppard, 337 Ark. 1, 987 S.W.2d 677 (1999), we held that a witness’s competency and capacity for truthfulness in recounting a defendant’s statements are matters that may be explored during cross-examination. Here, Deputy Westover was cross-examined fully about her inability to remember the exact date on which Mr. Hinkston made the statements and about inconsistencies in her testimony regarding the statements. Furthermore, Deputy Westover properly authenticated Mr. Hinkston’s statements under Ark. R. Evid. 901(b)(5)(1999), which provides for voice identification “by opinion based upon hearing the voice at any time under circumstances connecting it with the alleged speaker.” That requirement was satisfied by Deputy Westover’s testimony that she became familiar with and was also able to recognize Mr. Hinkston’s voice because he talked a lot while incarcerated at the Detention Center. We conclude that the trial court did not abuse its discretion by admitting her testimony regarding statements made by Mr. Hinkston while he was in custody.

V. Arkansas Supreme Court Rule 4-3(h)

The transcript of the record in this case has been reviewed in accordance with our Rule 4-3 (h) which requires, in cases in which there is a sentence to life imprisonment or death, that we review all prejudicial errors in accordance with Ark. Code Ann. § 16-91-113(a). None have been found.

       Mr. Hinkston’s attorney elicited testimony from Deputy Westover on cross-examination about other statements that Mr. Hinkston had made while in his cell, such as “how he enjoyed killing the bitch,” “he was also looking forward to killing again, but next time raping the subject,” “[h]ow much fun it was to see her saying the Lord’s prayer and shooting her,” and how it “[a]ll was over too fast. Would be more fun next time.” Under the doctrine of invited error, Mr. Hinkston cannot base a claim of reversible error upon these statements which he himself chose to introduce. Kaestal v. State, 274 Ark. 550, 636 S.W.2d 940 (1982).

       Mr. Hinkston also makes a conclusory claim that the admission of his statements might have violated his Sixth Amendment right to confront witnesses. This argument is not preserved for appellate review because it was not raised below. As we have already stated, this court does not consider arguments, even constitutional ones, raised for the first time on appeal. Martin v. State, supra.


author: ANNABELLE CLINTON Imber, Justice.

text:
    Harold RIGSBY v. Brett RIGSBY
    99-1126
    11 S.W.3d 551
    Supreme Court of Arkansas
    Opinion delivered March 2, 2000

      Eddie N. Christian Law Office, by: Joe D. Byars, Jr., for appellant.

      Davis & Cox, by: James O. Cox, for appellee.
   ANNABELLE CLINTON Imber, Justice.

This case involves a motion for rule on the clerk. In support of a request that the clerk of this court be ordered to file the record in this case, appellant Harold Rigsby asserts that his notice of appeal from an amended decree was timely because the second notice of appeal should relate back to the filing date of a first notice of appeal from the original decree. Alternatively, appellant asserts that his appeal should be dismissed without prejudice for lack of a final order. Because we agree that there is neither a final order under Ark. R. App. P. — Civil 2, nor proper certification by the trial court under Ark. R. Civ. P. 54(b), we dismiss the appeal without prejudice for lack of finality.

Brett Rigsby filed a complaint in the Chancery Court of Logan County on October 27, 1997, against his father, Harold Rigsby, which alleged that he was entitled to an equitable one-half interest in certain real property owned by Harold Rigsby. Specifically, the complaint stated that Brett Rigsby had jointly entered into a debt on the property, thereafter making all payments due on the debt, and that he had constructed substantial improvements on the property which increased its value. Brett Rigsby asserted that he had thereby acquired a one-half interest in the property. His complaint also requested an order directing partition of the real property and a division of proceeds between the plaintiff and defendant, inasmuch as the property could not be divided in kind. Brett Rigsby further prayed that a constructive trust be placed on one-half of the proceeds from any sale of the property by Harold Rigsby, and asked for one-half of the proceeds from the sale of catde belonging to Harold Rigsby. Appellant Harold Rigsby filed an answer denying the allegations contained in Brett Rigsby’s complaint, and also filed a counterclaim for ejectment that sought an award of a judgment in favor of Harold Rigsby for sole possession of the property and dismissal of Brett Rigsby’s claims against him.

On April 28, 1999, the trial court entered a decree finding that the real property was the property of the partnership between Brett and Harold Rigsby. The trial court also found that Harold Rigsby was entitled to a credit in the amount of $12,606.25 “should the property ever be sold” to compensate him for his down payment on the property and the reduction in principal on an earlier note prior to its satisfaction. The trial court awarded the proceeds from the sale of the cattle exclusively to Harold Rigsby in paragraph nine (9) of the decree, but in the final paragraph of the decree ordered that the proceeds from the sale of the cattle be divided equally between Brett and Harold Rigsby. In an amended decree filed on May 11, 1999, the final paragraph was changed to award the proceeds of the sale of the cattle to Harold Rigsby.

Harold Rigsby appealed the trial court’s April 28, 1999 decree by a notice of appeal filed on June 10, 1999. This first notice of appeal was untimely with regard to the April 28, 1999 decree. However, Harold Rigsby filed a second notice of appeal on July 28, 1999, in which he asserted that he was appealing from the May 11, 1999 amended decree rather than the April 28, 1999 decree, and that his first notice of appeal was intended to reflect the same. Because the June 10, 1999 notice of appeal would have been timely as to the May 11, 1999 amended decree if that decree had been designated in the first notice of appeal, Harold Rigsby argues that his second notice of appeal should relate back to the filing date of the first notice of appeal. When the Supreme Court Clerk refused to accept the record in this case, Mr. Rigsby filed a motion for rule on the clerk. That motion was submitted as a case in order for this court to decide whether the later notice of appeal from the amended decree could relate back to the filing date of the first notice of appeal that erroneously designated the original decree. On further review, we agree with Mr. Rigsby’s alternative argument that his appeal should be dismissed -without prejudice because no final judgment has been entered in this case.

A final judgment is one that dismisses the parties, discharges them from the action, or concludes their rights to the subject matter in controversy. Ark. R. App. P. — Civil 2(a); Looney v. Looney, 336 Ark. 542, 986 S.W.2d 858 (1999); Haase v. Starnes, 337 Ark. 193, 987 S.W.2d 704 (1999). In the instant case, the trial court’s order awarded Brett Rigsby an equitable interest in the property, but failed to grant or deny the requested relief of partition. We have consistently concluded that a failure to comply with the statutory requirements for partition deprives an order of finality, and precludes this court from properly reviewing the case on appeal. Ark. Code Ann. §§ 18-60-412 et seq. (1987); Looney v. Looney, supra; see also Bell v. Wilson, 298 Ark. 415, 768 S.W.2d 23 (1989); Dorazio v. Davis, 283 Ark. 65, 671 S.W.2d 173 (1984) (declaring that an initial order of partition is not a final order from which an appeal may be taken). Further, there was no attempt to comply with Ark. R. Civ. P. 54(b), which allows entry of a final judgment as to one or more of the parties or claims but fewer than all of them and permits an appeal upon a determination by the trial court that there is no just reason for delay. The failure to comply with this rule, or to adjudicate all of the claims against all of the parties, is jurisdictional and renders the matter not final for purposes of appeal. Corbit v. State, 334 Ark. 592, 976 S.W.2d 927 (1998). Because there has been no final determination on the propriety of partition, we cannot proceed to decide the current appeal.

Appeal dismissed without prejudice.


author: RAY THORNTON, Justice. TOM GLAZE, Justice,

text:
    Tulsi BHARODIA and Amratben Patel v. Norman and Linda PLEDGER
    99-681
    11 S.W.3d 540
    Supreme Court of Arkansas
    Opinion delivered March 2, 2000
    [Petition for rehearing denied April 20, 2000.  ]

      Hilburn, Calhoon, Harper, Pruniski & Calhoon, Ltd., by: Susan Gordon Gunter, for appellants.

      Morgan Welch & Associates, for appellees.

       Glaze and Imber, JJ., would grant. CORBIN, J., not participating.

   RAY THORNTON, Justice.

Appellants, Tulsi Bharodia and Amratben Patel (the buyers), and appellees, Norman and Linda Pledger (the sellers) entered into a contract for the purchase of appellees’ home. Eleven days later, the buyers sought to terminate the contract. Although the buyers had several grounds for termination, including inability to obtain financing and the failure of the sellers to provide a “sellers’ disclosure statement” as required by the contract, the buyers gave notice of the existence of a number of defects including structural problems, and, rather than requesting repairs, sought to terminate the contract. When the sellers did not return the escrow account, the buyers formally notified the sellers of the breach, by letter, declaring the contract null and void based on the sellers’ failure to provide the required disclosure statement, inability to obtain financing, and structural defects. Seven months later the sellers filed suit seeking specific performance of the contract and thereafter the trial court granted the sellers’ request, finding that by giving the sellers notice of structural defects the buyers had waived their other grounds for terminating the contract. The court of appeals affirmed the trial court by a three-to-three decision, and we granted review of the case. We review the decision of the trial court and conclude that the trial court erred and must be reversed.

On August 3, 1994, the McKay Realty Company showed the buyers the home belonging to the sellers. On that same day the buyers executed an offer of $425,000 for the purchase of the home. This offer was made using a form provided by McKay and contained numerous conditions which the parties were to perform to fulfill the terms of the agreement. Pursuant to the terms of the contract, the buyers also gave the sellers’ agent, Real Estate Central, $5000 in earnest money.

On August 4, 1994, the sellers accepted the buyers’ offer. The following day, the buyers sought financing from Worthen Bank for the purchase. On August 9, 1994, the buyers had the sellers’ home inspected. On August 12, 1994, the buyers received their inspection report. The report noted many defects in the home including structural problems.

On August 15, 1994, the buyers went to the McKay Company and executed two documents. The first document was titled “addendum to offer and acceptance,” and after noting the results of the inspection report, stated that “as a result of this report and minor and structural repairs needed, buyer requests to be released from the offer and acceptance.” The second document was titled “termination of contract-handling of earnest money”and requested that the buyers’ earnest money be returned. This was timely notice under the terms of the offer and acceptance provision that such notice be given “within ten business days after acceptance of the contract.”

On August 17, 1994, the sellers had an engineer inspect the home and prepare a report of defects. No disclosure statement by the sellers was provided to the buyers as required by the contract. On September 9, 1994, the buyers, through their attorney, wrote a letter to the sellers’ agent stating that the contract was null and void for three reasons: (1) failure to receive financing; (2) damages to the home of more than $2000; and (3) the sellers’ failure to deliver a “sellers’ disclosure statement.” The buyers further requested that their earnest money be returned.

On December 2, 1994, Real Estate Central interpled the buyers’ earnest money into the registry of the Sherwood Municipal Court and the court transferred the matter to the Pulaski Country Chancery Court. On April 13, 1995, the sellers filed a suit in chancery court for specific performance of the contract. On May 5, 1995, the buyers filed an amended answer to the sellers’ complaint and a counterclaim. In their counter claim, the buyers argued that the contract was null and void because of the inability to obtain financing, the defects in the structure, and the sellers’ failure to provide a disclosure statement. For those reasons the buyers once again argued that specific performance was not warranted and requested the return of their earnest money.

Both parties moved for summary judgment and the chancellor denied their requests. A trial on the matter was held in April 1997. On July 14, 1997, the chancellor granted the sellers’ request for specific performance. The chancellor found that the sellers had failed to give the buyers “a sellers’ disclosure statement.” However, he also found that the buyers could not rely on the sellers’ failure to deliver this document as a support for termination of the contract because they had waived such a defense. On January 7, 1998, the chancellor awarded the sellers $5000 in attorneys’ fees pursuant to Ark. Code Ann. § 16-22-308 (Repl. 1999).

The buyers appealed this matter to the court of appeals. On May 26, 1999, in a three-to-three decision, the court affirmed the trial court. We accepted review of this case on July 15, 1999, and now reverse the trial court.

On appeal, we consider chancery cases de novo on the record, but we do not reverse a finding of fact by the chancellor unless it is clearly erroneous. A finding is clearly erroneous when, although there is evidence to support it, the reviewing court on the entire evidence is left with a definite and firm conviction that a mistake has been committed. Campbell v. Campbell, 336 Ark. 379, 985 S.W.2d 724 (1999).

In their first point on appeal, the buyers contend that the chancellor erred when he denied their motion for summary judgment. We are unable to address this point on review. We have repeatedly held that the denial of a motion for summary judgment is not subject to review or appeal. Daniels v. Colonial Ins. Co., 314 Ark. 49, 857 S.W.2d 162 (1993). See also, Hastings v. Planters & Stockmen Bank, 307 Ark. 34, 818 S.W.2d 239 (1991); McElroy v. Grisham, 306 Ark. 4, 810 S.W.2d 933 (1991).

In their second point on appeal, the buyers argue that the chancellor’s granting of specific performance was erroneous because by keeping the buyers’ earnest money, the sellers had elected to take liquidated damages instead of specific performance as their remedy. The buyers’ argument is not subject to our review. We have held that the doctrine of election of remedies is an affirmative defense and must be raised in an answer. See Southern Farmers Assoc., Inc. v. Wyatt, 234 Ark. 649, 353 S.W.2d 531 (1962). The issue of the sellers’ election of remedies was not raised in this case until the buyers filed a motion for summary judgment on January 16, 1996. Thus, because the buyers faded to raise this defense in their answer, they were precluded from arguing it at any other stage in the case as a defense to the sellers’ request for specific performance.

In their third point on appeal, the buyers urge that we should rule as a matter of law that sellers of real estate contracts are not entitled to specific performance. First, it should be noted that the buyers are asking us to deviate from our prior case law. We have held that there is a strong presumption of the validity of prior decisions. Independence Fed. Bank v. Webber, 302 Ark. 324, 789 S.W.2d 725 (1990). Although we do have the power to overrule previous decisions, it is necessary as a matter of public policy to uphold prior decisions unless great injury or injustice would result. Id. In Arkansas Office of Child Support Enfcm’t v. Mitchell, 330 Ark. 338, 954 S.W.2d 907 (1997), we explained the public policy behind such a doctrine. We stated:

[T]he policy behind stare decisis is to lend predictability and stability to the law. Paris v. Pitts, 244 Ark. 1239, 429 S.W.2d 45 (1968)(superseded by statute on other grounds). In matters of practice, “adherence by a court to its own decisions is necessary and proper for the regularity and uniformity of practice, and that litigants may know with certainty the rules by which they must be governed in the conducting of their cases.” Brickhouse v. Hill, 167 Ark. 513, 523, 268 S.W. 865, 868 (1925) (quoting 7 R.C.L. 1008 (1915)). In Parish, this court held that “[precedent governs until it gives a result so patently wrong, so manifesdy unjust, that a break becomes unavoidable.” Parish, 244 Ark. at 1252, 429 S.W.2d at 52.

Mitchell, supra.

Remaining mindful of these principles, it should also be noted that we have repeatedly held that specific performance is an appropriate remedy for sellers of real estate. In a 1939 case we held that:

[I]n the case of real estate specific performance is decreed almost as a matter of course when the contract has been properly established and is unobjectionable in any of its features which address themselves to the chancellor’s discretion. Under such circumstances the vendee is entitled to have the contract specifically enforced irrespective of his right to recover damages for its breach. In other words, where the land is the subject-matter of the agreement, the jurisdiction of equity does not depend upon the existence of special facts showing the inadequacy of a legal remedy in the particular case, but the presumption arises that damages will not constitute an adequate remedy. Damages are not regarded as the equivalent of the specific relief because the exact counterpart of any particular piece of real estate does not exist anywhere else in the world.

Dickinson v. Mckenzie, 197 Ark. 746, 126 S.W.2d 95 (1939). See also, Loveless v. Diehl, 236 Ark. 129, 364 S.W.2d 317 (1962); Dollar v. Knight, 145 Ark. 522, 224 S.W.983 (1920). Thus, because the buyers have given us no reason to overturn our previous decisions and because we have allowed both the buyers and the sellers of land to seek specific performance on real estate contracts throughout our case law we do not chose to overrule precedent.

We turn now to the two points urged by the buyers that the trial court erred in finding that the buyers waived their right to declare the contract null and void for the breach by the sellers of the provision requiring a “sellers’ disclosure statement.” There is no challenge to the chancellor’s finding that the disclosure statement was not provided as required in the contract. The buyers contend that the chancellor erred when he found that this provision was waived because they failed to specifically articulate it in their August 15, 1994, notice to the sellers. We agree with the buyers that this provision was not waived. The contract in relevant part states:

[SJeller will provide to buyer a disclosure about the condition of the property which will contain information that it is true and correct to the best of the seller’s knowledge. The disclosure will be presented to buyer within three business days of acceptance of this offer. Buyer has three business days after receipt of disclosure to accept or reject said disclosure. If seller fails to provide the disclosure in a timely manner, or if buyer finds the disclosure unacceptable within three business days after receipt, this contract may be declared null and void by the buyer, with buyer to receive a refund of the earnest money. (Emphasis added.)

The chancellor found on this issue that:

[The buyers] in terminating the contract on August 15, 1994, did not list as one of their reasons the failure to receive the sellers’ disclosure statement.... The court finds that [the sellers] have the burden of proof to show that [the buyers] received the sellers’ disclosure statement. There is no signed receipt by [the buyers] of receiving the disclosure statement and no corroborating evidence that [they] actually received the document. Since the burden of proof is on [the sellers] to prove that [the buyers] received the document, the Court finds that [the sellers] failed in their burden of proof. Therefore, the Court finds that [the buyers] did not receive the sellers’ disclosure statement.
[The buyers] terminated the contract with [the sellers] by stating that there were alleged structural defects in the home. [The buyers] did not give as one of the reasons for termination the failure to receive the disclosure statement. Even though [the buyers] had a right to terminate the contract for not receiving the disclosure statement, the Court finds [the buyers] waived their right to terminate the contract using that as a reason....

Waiver is the voluntary abandonment or surrender by a capable person of a right known by him to exist, with the intent that he shall forever be deprived of its benefits. Pearson v. Henrickson, 336 Ark. 12, 983 S.W.2d 419 (1999). It may occur when one, with full knowledge of material facts, does something which is inconsistent with the right or his intention to rely upon that right. The relinquishment of the right must be intentional. Id.

In this case, we find no showing that the buyers knowingly and intentionally waived any provisions of the contract or that they made a voluntary abandonment of a right known to them, with the intent that they would forever be deprived of its benefits. Rather than waiving their right to nullify the contract for seller’s failure to provide them with a “sellers’ disclosure statement,” the buyers continuously argued this right to terminate the contract at every stage of the litigation. On September 9, 1994, merely three weeks after the August 15, 1994, notice was sent to the sellers, and seven months prior to the filing of any litigation in the matter, the buyers’ attorney argued this breach as reason for terminating the contract in his letter to Real Estate Central. This argument was again made by the buyers in their answer and counterclaim to the sellers’ specific performance suit. Throughout the trial the buyers never abandoned their right to terminate the contract based on the sellers’ breach.

The facts in the present case can be contrasted with the facts in Grayson-McLeod Lumber Co. v. Slack Kress Tie & Stave, Co., 102 Ark. 79, 143 S.W.2d 79 (1912) where we held that the buyers had waived their right to terminate the contract based on the sellers’ breaches. Specifically, we held that appellant could not rely on the sellers’ breach when the breaches were made “a considerable length of time before appellant decided to terminate the contract” and appellant had made no objections to the breaches but instead allowed the sellers to continue with the terms of the contract. Id. We conclude that in the case now on review there was no knowing and intentional waiver of the buyers’ right to terminate the contract.

In the absence of a knowing and intentional waiver, a party may claim a waiver by estoppel has occurred. Arthur Corbin, in his treatise on contracts, explained:

It is sometimes said that a promisor who states an insufficient reason for refusing to perform his promise can not afterwards defend by showing that another and justifying reason existed. That is not correct. If a condition of his duty to perform did not in fact exist or occur, he was privileged not to perform. That he did not refer to this condition and that he gave bad reasons is not material as long as there has been no change of position in reasonable reliance upon the promisor’s disregard of the unperformed condition. An estoppel may arise, preventing the promisor from setting up his otherwise good defense; but his mere omission to mention that defense and his statement of bad reasons are not sufficient to raise an estoppel... Mere omission to claim the defense and giving other reasons for refusal to perform are not themselves a waiver... There is no estoppel in the absence of a change of position in reasonable reliance.

3A Arthur Corbin, Corbin on Contracts; A Comprehensive Treatise on the Rules of Contract Law § 762, (1960).

Here, although the buyers did not list the sellers’ failure to deliver the “sellers’ disclosure statement” as a reason for terminating the contract in their August 15, 1994, notice, they were not estopped from raising the sellers’ breach of contract at a later time. There is no showing that the buyers encouraged the sellers to engage in any repairs to their home, nor was there any evidence showing that the buyers induced the sellers to take other actions. Specifically, on August 15, 1994, the buyers sent the sellers notice that they were terminating the contract because the structure needed minor and structural repairs. The notice did not request the sellers to take any action other than returning the money in the escrow account. However, the sellers hired an engineer to inspect the home following the buyers’ notice, but they did not complete the repairs described in the buyers’ inspection report nor did they repair the defects detailed in their engineer’s report. Under these circumstances we find no estoppel should have been imposed to prevent the buyers from exercising the right to terminate the agreement due to the sellers’ breach of the conditions of the contract requiring the delivery of a “sellers’ disclosure statement” and hold that the chancellor’s findings were clearly erroneous.

In their final point on appeal, the buyers contend that the chancellor erred when he granted the sellers’ request for attorneys’ fees. The chancellor’s order found that “plaintiffs are entitled to attorneys’ fees as authorized by Ark. Code Ann. §16-22-308 and Childs v. Adams, 322 Ark. 424, 909 S.W.2d 641 (1995).” Arkansas Code Annotated Section 16-22-308 states:

In any civil action to recover on an open account, statement of account, account stated, promissory note, bill, negotiable instrument, or contract relating to the purchase or sale of goods, wares, or merchandise, or for labor or services, or breach of contract, unless otherwise provided by law or the contract which is the subject matter of the action, the prevailing party may be allowed a reasonable attorney fee to be assessed by the court and collected as costs.

Id. The award of an attorney’s fee is a matter which is addressed to the sound discretion of the court and, in the absence of abuse, its judgment will be sustained on appeal. New Hampshire Ins. Co. v. Quilantan, 269 Ark. 359, 601 S.W.2d 836 (1980).

In the present case, the sellers requested $35,845.50 in attorneys’ fees and the chancellor awarded the sellers $5000 in attorneys’ fees. Because we have held that the chancellor erred in granting specific performance, we must also hold that the granting of the sellers’ request for attorneys’ fees was erroneous.

Reversed and remanded.

CORBIN, J., not participating.

Glaze and Imber, JJ., dissent.

TOM GLAZE, Justice,

dissenting. The parties’ “Offer and Acceptance” form contract provided the buyers several potential grounds for terminating the contract. These provisions are fully set out in the excerpts from the Offer and Acceptance, Plaintiff’s Exhibit 4, attached to this opinion.

Under paragraph 16(B) of the Offer and Acceptance, the buyers had a right to inspect the property within ten business days after acceptance of the contract. Upon inspection, if the buyers discovered items needing repair, and provided timely written notice of that fact to the sellers, the seller agreed to repair those items up to a repair limit of $2,000.00. If sellers refused to make repairs beyond the repair limit, one of the buyers’ options would be to declare the contract null and void.

Under paragraph 17(C), the sellers agreed to provide the buyers with a statement disclosing the condition of the property within three business days of acceptance of the offer. Under this provision, the buyers could declare the contract null and void, “[i]f Seller fails to provide the disclosure in a timely manner, or if Buyer finds the disclosure unacceptable within three (3) business days after receipt....” Under the above provisions, the buyers could recover their earnest money if the sellers breached either of the provisions, 16(B) or 17(C).

The buyers executed their Offer and Acceptance on August 4, 1994. The sellers accepted the offer on the same day. The court below found that the sellers failed to provide a disclosure statement. Instead of exercising their rights under paragraph 17(C), the disclosure statement provision, the buyers hired a home inspector who performed an inspection on August 9, 1994. After reviewing the resulting inspection report, on August 15, 1994, the buyers faxed two contract addenda to the sellers. The first addendum, marked Plaintiff’s Exhibit 6, is attached for the reader’s convenience.

In Plaintiff’s Exhibit 6, captioned Inspection and Repairs, the buyers expressly invoked their rights under paragraph 16(B). That paragraph reads, “Buyer chose ... to perform the inspection ... allowed in Paragraph 16(B) [of] the Offer and Acceptance and to provide ... a list of repairs needed.” Additionally, Exhibit 6 notes that the buyers have inspected the property, attached relevant portions of the inspection report, and reserved their right to reinspect the property prior to closing. Exhibit 6 further reflects that the buyers requested release from the offer and acceptance. The sellers, pursuant to the terms in 16(B), had their engineer inspect the structural integrity of the house and the engineer stated that the suggested corrections could be made. The sellers said that they would make any repairs required in order to sell the property, and in fact, the sellers commenced work to do so. The buyers, however, refused to proceed to give the sellers the opportunity to perform the contract. The buyers’ second addendum merely requested that the sellers return the buyers’ earnest money through an agreed termination of the contract. Neither addendum invoked, or even.mentioned, the buyers’ rights under paragraph 17(C), the disclosure statement provision.

By knowingly and intentionally invoking their rights to inspect the property, demand repairs and reserve their right to reinspect under 16(B), the buyers triggered a provision which allowed the sellers an opportunity to make repairs to the home consistent with the buyers’ inspection. The closing date on the contract was set for August 31, 1994. The record reveals that, by August 24, 1994, the sellers had hired a structural engineer and received his report on the needed structural repairs, which he concluded could be corrected. The sellers then expressed a willingness and in fact acted to complete all necessary repairs, as was their right under the inspection and repair provisions of paragraph 16(B) of the contract. Nevertheless, the buyers refused to close on the house.

On September 9, 1994, in a letter from the buyers’ attorney to the sellers, the buyers for the first time attempted to assert their rights under disclosure statement provision 17(C). In other words, almost a month had passed since the buyers had invoked the inspection and repair clause, causing the sellers to commence repairs to the property. The buyers breached the contract through their adamant refusal to close on the deal.

In conclusion, the most puzzling aspect of the majority opinion is its statement that, “although the buyers did not list the ‘sellers’ failure to deliver the sellers’ disclosure statement’ as a reason for terminating the contract in their August 15, 1994 notice, they were not estopped from raising the sellers’ breach of contract at a later time.” The majority merely rewrites the parties’ contract. Once again, the sellers had the right (and the buyers acknowledged that right) under Subsection 16(B) to cure any defects. The Pledgers cannot be estopped from doing what the parties’ contract authorized them to do.

Because the record supports the chancellor’s finding that the buyers chose to proceed under provision 16(B) and thereby waived their rights under provision 17(C), I cannot say the chancellor was clearly erroneous.

IMBER, J., joins this dissent.

        See Bharodia v. Pledger, 66 Ark. App. 349, 990 S.W.2d 581 (1999).

       It should be noted that the buyers were not required to act until after receipt of the “sellers’ disclosure statement.”

       The seller Bharodia denied being a sophisticated buyer of real estate, but the proof clearly established that he had purchased motels such as a Holiday Inn, a Comfort Inn, and a Ramada Inn. He also admitted to purchasing residential property and having been involved in litigation on prior occasions. In short, the buyers cannot take refuge as a new or unknowledgeable purchaser m the real estate market.