text:
    GUARANTY NATIONAL INSURANCE Company, et al. v. DENVER ROLLER, INCORPORATED and Citizens Fidelity Insurance Company
    92-1143
    854 S.W.2d 312
    Supreme Court of Arkansas
    Opinion delivered May 10, 1993

      Davidson, Horne, & Hollingsworth, by: Chet Roberts and Allen W. Horne, for appellants.

      Catlett & Stubblefield, by: S. Graham Catlett and John T. Root, Jr., for appellees.
   Tom Glaze, Justice.

This appeal comes to the court from a declaratory judgment action and action for damages instituted by the appellees, Denver-Roller (Roller) and Citizens Fidelity Insurance Company (Citizens), against the appellants, a group of affiliated business organizations which are competitors of Roller. The parties are either funeral service providers or affiliated insurers. A dispute has arisen because Roller’s contracts for funeral benefits make payment in “services and merchandise only,” while the contracts issued by appellants provide for payment in cash, as well as services and merchandise.

A little background information on the funeral service industry, its standards and customs, is necessary for a complete understanding of the posture of this case. It is a common practice for a funeral home itself, or an affiliated insurance company or burial association, to sell contracts which provide for funeral services at the consumer’s death. These contracts most often take one of three forms: (1) Burial Association Certificates, issued pursuant to Ark. Code Ann. § 23-78-101 — 23-78-125 (Repl. 1992), which are certificates issued by a burial association and are often reinsured by an insurance company so that the company assumes the obligation of providing benefits to the beneficiary (member) of the Burial Policy; (2) Insurance Policies, which are issued by a life insurance company (benefits are payable in “cash,” or “services and merchandise only,” or both); and (3) “Pre-Need” Contracts, issued pursuant to Ark. Code Ann. § 23-40-101 — 23-40-118 (1987), which allow a consumer to pre-select the casket, vault, and other merchandise to be utilized at his or her funeral. Although the general purpose behind each of the three types of contracts is identical, the parties’ contentions are focused on the “pre-need contracts” and their terms.

If the services are provided and performed by the funeral home with which the consumer had contracted, no problem arises. In addition, even if the survivors of the consumer decide to have the funeral at an unauthorized funeral home, the facts show that the survivors still do not suffer any financial harm because the industry uniformly provides .100% of the services and merchandise provided under the competitor’s contract. In short, this reflects a business decision made for the benefit of the unauthorized competing home, even though no funeral home is required, by law or contract, to accept the terms of any other funeral home’s contract. It is widely acknowledged that the second funeral home could either send the survivors back to the funeral home with which the consumer contracted or, could accept and credit the policy, thus, providing the services at the customary charge. The situation largely becomes problematic when the second funeral home which provided the funeral attempts to redeem the policy or contract at the funeral home with which the consumer originally contracted.

In this action, Citizens (affiliated with Roller) sold both “cash” policies and “service and merchandise-only” policies. Currently, Citizens has approximately 200,000 policy holders of “service and merchandise-only” policies. It should be noted that with each premium notice sent to policy holders, Roller included a banner-trimmed statement notifying the consumer that his or her “services and merchandise-only” policy could be converted into a cash policy. An unincorporated division of Roller, Assured Peace Funeral Plan (Assured), sold and issued Pre-Need Contracts performable at any Roller funeral home. On the other hand, appellant Madden Enterprises, Inc., (Madden) is a funeral service company in direct competition with Roller, and Madden’s subsidiaries include Wilson Funeral Home and North Arkansas Funeral Home. Madden’s affiliated insurers are Guaranty National Insurance Company and North Arkansas Burial Association, and these affiliates do not sell “service and merchandise-only” contracts, but rather, have issued contracts providing benefits payable in cash.

The undisputed facts show that the survivors of four separate individuals, who had contracted with either Citizens or Assured for funeral benefits, presented Madden’s affiliates with “service and merchandise-only” contracts. In each instance, Madden accepted assignment of the contract and notified Roller. In turn, Roller agreed to perform the contracts as written, that is, to provide the contracted-for merchandise and services to the assignee funeral home. Madden refused Roller’s offers, and instead, demanded the cash equivalency value of the policy. Roller refused to pay the benefits in cash. In retaliation, Madden refused to uphold its clear contractual obligation to provide the cash equivalent of numerous policies issued by it which were assigned to Roller funeral homes. Roller then brought this action.

Roller brought the two following actions: (1) for damages, seeking to have Madden and its affiliates found to be in breach for failure to pay benefits in cash, as required by its own policy; and (2) for declaratory judgment, to have its “services and merchandise-only” contracts adjudged legal and enforceable. Madden counterclaimed for declaratory relief, contending the contract restrictions were invalid because they were (1) in unlawful restraint of trade, (2) resulted in a forfeiture of accrued benefits, (3) resulted in Roller’s unjust enrichment, and (4) violated public policy. Notably, prior to trial, Madden conceded it was obligated to pay cash to Roller as required by its contracts, and thus, that portion of the dispute was resolved and has not been appealed.

A hearing was held and evidence was submitted to Chancellor Robin Mays. Judge Mays entered her findings of fact and conclusions of law on April 20, 1992, holding that the evidence presented was insufficient to establish any of the various grounds for invalidating Roller’s “service and merchandise-only” contracts. Judge Mays also refused to comply with Madden’s plea to reform the contract executed between the deceased and Roller, and dismissed Madden’s counterclaim. On June 30, 1992, the trial court entered its decree from which Madden appeals. We affirm.

I. Unlawful Restraint of Trade

Appellants first contend the trial judge erred in failing to invalidate “services and merchandise-only” contracts as Unlawful Restraints of Trade. After hearing testimony, Judge Mays made the following ruling:

The evidence was insufficient to show that the effect of these contracts results in unfair competition and restraint of trade. The evidence showed that there is strong competition among funeral homes in the same locality and that it is possible for new funeral homes to compete with existing funeral homes.

On appeal, appellants contend the chancellor erred twice; first, by failing to credit all of the evidence showing actual anti-competitive effect, and second, by focusing exclusively on the effect of appellees’ anti-competitive contracts, and not considering whether anti-competitive intent is itself a sufficient basis for invalidating the contracts.

Appellants’ first contention is without merit. Considering the evidence in the light most favorable to the appellee, the appellate court tries chancery cases de novo on the record, and does not reverse a finding of fact by the chancellor unless it is clearly erroneous. McGuire v. Bell, 297 Ark. 282, 761 S.W.2d 904 (1988). The chancellor here heard the testimony of Bill Booker, an employee of Roller, who stated that the Roller corporation was forced to sell its Osceola operation to a new competitor, appellant Wilson Funeral Home, because of Rollers’ increasing loss of market share in the area. Further, Booker testified that in the towns of Helena-West Helena and Marianna, Roller-controlled funeral homes had been consistently losing market share since a competitor opened its doors in 1989. Therefore, seeing that competition in this line of business has remained strong throughout the period in which these contracts have been enforced, we hold that the chancellor’s finding of no anti-competitive effect is not clearly erroneous.

Moreover, we find no merit in the contention that the chancellor failed to credit the testimony of Harry Legget, who stated that enforcement of “service and merchandise-only” contracts did indeed injure competition. It is well settled that questions raised regarding the weight or credibility of an expert witness’ testimony go to the weight or credibility of his testimony, and any argument regarding the weight of that opinion is a matter to be decided by the chancellor. C.R.T., Inc. v. Brown, 269 Ark. 114, 602 S.W.2d 409 (1980). Also, the chancellor is in a superior position to evaluate the credibility of witnesses and is not bound to accept the testimony of a witness as true where a reasonable inference contrary to his testimony could have been drawn from the facts stated or from other facts and circumstances shown by the evidence unfavorable to his conclusion. Roe v. Dietrich, 310 Ark. 54, 835 S.W.2d 289 (1992).

We next confront appellants’ alternative contention for finding an unlawful restraint of trade. In their brief, appellants argue that “in focusing exclusively on the effect” of the contracts, the chancellor “failed to consider whether anti-competitive intent is itself a sufficient basis under Arkansas law for invalidating the challenged contracts.” In addition, the arguments raised in this portion of appellants’ brief unquestionably center around “a proper construction of the law,” which appellants contend support a cause of action based solely upon an improper purpose. It is clear from the foregoing that appellants are arguing, or more appropriately conceding, that the chancellor never rendered a determination as to whether or not, under the law of Arkansas, a restraint of trade cause of action will lie upon the “intent” theory.

An examination of the record reflects that appellants consistently presented the chancellor with its “intent is enough” argument. However, it is even more clear from review of the findings of fact and conclusions of law that the chancellor failed to specifically rule whether an intent to injure, alone, armed appellants with a valid and recognized cause of action. As argued in appellants’ brief, the “law” is the issue under this portion of appellants’ restraint of trade argument, not the evidence, and it is clear the chancellor never ruled on the “law.” The burden to obtain a ruling on a particular theory of recovery is on the appellant. National Lbr. Co. v. Advance Development Corp., 293 Ark. 1, 732 S.W.2d 840 (1987); see also City of Springdale v. Town of Bethel Heights, 311 Ark. 497, 845 S.W.2d 1 (1993). It is well established that matters left unresolved at trial are waived and may not be relied upon on appeal. Carpetland of N.W. Ark., Inc. v. Howard, 304 Ark. 420, 803 S.W.2d 512 (1991).

Even if this court were inclined to stretch the chancellor’s finding and holding, “that the evidence presented was insufficient to establish any of the various grounds for invalidating appellees’ . . . contracts,” into a ruling on the “intent” theory of recovery, the appellants’ cause must still fall. The contracts at issue were entered and executed between vendors and vendees. John B. Frazier, Chairman of the Arkansas Burial Association Board, testified on cross-examination by appellants, that the “purpose” of providing service and merchandise-only contracts was, “to assure that the wishes of the deceased are carried out ... so somebody can’t come in there and take the money away from — for the purpose it was intended.” Counsel for appellants then asked:

Q. Okay. Does that not have the effect of tying that person, his family, to having that funeral service at Frazier Funeral Home?
A. Certainly it does, because that’s the intent.

Appellants, using the above testimony and citing American Excelsior Laundry Co. v. Derrisseaux, 204 Ark. 843, 165 S.W.2d 598 (1942), argue the primary purpose of Roller’s contracts tends to create a monopoly and the law makes such contracts unlawful. First, the Derrisseaux case is inapplicable because that case involved a covenant not to compete and involved matters not in issue here. Second, while the rule of law relied on by appellants is good law, that rule does not control here. The general rule is contracts and combinations which tend to promote business, and which only remotely, incidentally and indirectly restrain competition are not forbidden. 54 Am. Jur. 2d Monopolies, etc. § 457 (1971). Frazier’s testimony that the primary purpose of such contracts was to assure compliance with the intentions of the contracting party make it clear that there was a legitimate purpose behind inclusion of the restriction. Further, even if the contracts had the intent and effect of “tying” consumers to the contracting funeral home, the evidence shows that those homes which employed the contracts did so merely to maintain the business of their original contracting customers. Since the restrictive provisions were employed for the purpose of promoting business, and since enforcement created only an indirect and incidental effect upon competition, we decline to overturn the decision of the chancellor.

II. Forfeiture

Appellants contend that enforcement of the “service and merchandise-only” clauses results in a forfeiture of benefits. This argument is without merit. It was clearly established at trial that Arkansas funeral homes almost uniformly provide 100% credit to consumers on policies issued by competing funeral homes, regardless of whether the servicing funeral home receives the contract amount in cash from the original issuing funeral home or insurer. This is true even for “service and merchandise-only” contracts and policies, as well as those providing cash benefits.

It is well settled that “assignees can receive no better right than their assignors had.” Pacific Nat’l Bank v. Hernriech, 240 Ark. 114, 398 S.W.2d 221 (1966). Hence, the appellants were bound by the language of the contract, and thus, were only entitled to merchandise and services. Similarly, the issuer of the contract was also bound. In this case, the appellees tendered performance under the terms of the contracts by delivering up the agreed-to merchandise and services. Appellants refused to accept the contractually required tender, and instead, demanded payment of benefits in cash.

Appellants are attempting to stand in the shoes of the consumer; however, a claim of forfeiture can only be brought by the party suffering the forfeiture. In any event, the consumers here have not suffered a forfeiture due to the industry practice of giving 100% credit on competing policies and contracts. Moreover, neither have the appellants forfeited anything. They may not have exercised their contractual right to receive the benefits of the contract — merchandise and services — as payment under the policy, but failure to take hold of goods to which you are entitled, does not constitute a forfeiture.

In Greg Burial Association v. Emerson, 289 Ark. 47, 709 S.W.2d 47 (1986), we impliedly stated that restrictions even more harsh than that at bar would be enforced, so long as the language of the restriction was clear and unambiguous. The contracts at issue clearly state the issuer “does not provide cash benefits.” The intentions of the original parties to the contracts are clearly reflected in the contract, and thus, this court has no power to reform the terms. See American Alliance Ins. Co. v. Paul, 173 Ark. 960, 294 S.W.2d 74 (1927).

Further, we agree with the chancellor that the “no-assignment” clause in the Roller contracts merely precludes the consumer from assigning his or her contract to another beneficiary. That provision in no way affects the survivors’ right to present the contract to a competing funeral service provider for 100% redemption.

The chancellor’s ruling that enforcement of the restriction does not result in a forfeiture is not clearly erroneous.

III. Unjust Enrichment

Appellants next contend that appellees’ retention of the scheduled benefits results in appellees’ unjust enrichment. The chancellor found no unjust enrichment and stated the following:

Plaintiffs (Roller) have not breached the contracts and stand ready to perform by providing the merchandise called for under the contract and by providing any services desired by defendants.

Basically, to find unjust enrichment, a party must have received something of value, to which he was not entitled and which he must restore. There must also be some operative act, intent, or situation to make the enrichment unjust. Dews v. Halliburton Industries, Inc., 288 Ark. 532, 708 S.W.2d 67 (1986). It is rudimentary that “one who is free from fault cannot be held to be unjustly enriched merely because one has chosen to exercise a legal or contractual right.” Merchants & Planters Bank & Trust Co. v. Massey, 302 Ark. 421, 790 S.W.2d 889 (1990).

It is clear that the appellees are in no way at fault, and were merely performing consistent with the terms of the contract. The only reason presented as to why appellees continue to retain the accrued benefits is because the appellants would not accept such benefits. Clearly, appellees have not been unjustly enriched and the chancellor was correct in her ruling.

IV. Void as Against Public Policy

Appellants finally argue that the “service and merchandise-only” contracts are illegal and void as against public policy. Again we find no merit in appellants’ contention.

An insurer may contract with its insured upon whatever terms the parties may agree which are not contrary to statute or public policy. Aetna Ins. Co. v. Smith, 263 Ark. 849, 568 S.W.2d 11 (1978). In Huntsman v. Carroll, 177 Ark. 432, 6 S.W.2d 551 (1928), this court declared the general rule that a contract is against public policy if it is injurious to the interests of the public, or contravenes some established interest of society or some public statute, or is against good morals, or tends to interfere with the public welfare. The facts showed that the public is not harmed by enforcement of these contracts because virtually all funeral homes grant 100% credit for competing contracts.

More recently, this court has held that, “the public policy of this state is found in its constitution and statutes.” Wal-Mart Stores, Inc. v. Bay singer, 306 Ark. 239, 812 S.W.2d 463 (1991); Sterling Drug, Inc. v. Oxford, 294 Ark. 249, 743 S.W.2d 380 (1988). The General Assembly has not prohibited the inclusion of “service and merchandise-only” clauses in pre-need contracts and thus, this court is without the power to find such restrictions void as against public policy. Further, the recently enacted amendments requiring that benefits under burial certificates and insurance policies be payable in cash, changed substantive rights and thus, those amendments cannot be retroactively applied. Carmichael v. Nationwide Life Ins. Co., 305 Ark. 549, 810 S.W.2d 39 (1991). Accordingly, the public policy regarding burial certificates and insurance policies cannot be employed to invalidate pre-need contracts executed prior to those amendments.

The chancellor’s finding that “service and merchandise-only” contracts are not void as against public policy is not clearly erroneous.

Affirmed.

       Legislative and administrative amendments, enacted subsequent to execution of the contracts and policies at issue today, preclude strict enforcement of “service and merchandise-only” clauses in both burial certificates [Ark. Code Ann. § 23-78-112(b) (Repl. 1992)] and insurance policies [Rule and Regulation 30, promulgated by the Arkansas Insurance Commissioner, effective March 1, 1988; Ark. Code Ann. § 23-71-111 (1987)]. However, no legislative action as yet has been taken to amend Ark. Code Ann. § 23-40-109(d)(1) (1987), which provides that sellers of pre-need contracts may contract to provide “merchandise and services.”


source: Caselaw Access Project

author: Tom Glaze, Justice.

license: Public Domain

text:
    David D. McKINNEY, Administrator of the Estate of Mary D. McKinney v. John W. UNGER
    92-1123
    853 S.W.2d 871
    Supreme Court of Arkansas
    Opinion delivered May 10, 1993
    [Rehearing denied June 14, 1993.]

      Mary Thomason, for appellant.

      Appellee, pro se.
   Tom Glaze, Justice.

Appellee John W. Unger, Jr. is the

former attorney for the appellant, the Estate of Mary D. McKinney. The Estate was opened in May of 1986 and David McKinney, one of Mary’s children, was appointed administrator, and Unger was retained as the Estate’s attorney. On January 26, 1988, Unger formally withdrew as the Estate’s attorney and attorney George W. Mason, Jr. was named Unger’s replacement. In March 1988, Unger filed a motion with the Union County Probate Court for attorney’s fees in the amount of $12,850.00. Although the Estate responded by agreeing Unger was entitled to a reasonable attorney’s fee, it denied through its new attorney that the amount requested was reasonable. One of the heirs of Mary also denied the reasonableness of Unger’s request and further asked that Unger be required to file an accounting of the estate’s assets, which the court ordered on September 12, 1988. Two weeks later, Unger surrendered his license to practice law, and on November 11, 1988, he filed a Chapter 7 bankruptcy petition.

In his bankruptcy petition, Unger did not name the Estate of Mary McKinney as a creditor, but instead named the Estate as an “account receivable.” David McKinney was listed as an individual creditor and, as such, David received notice of Unger’s bankruptcy proceedings.

On June 20, 1989, Unger received an order of discharge from the bankruptcy court. Nonetheless, the dispute between Unger and the Estate over Unger’s claim for attorney’s fees resurfaced in the state probate court on May 30, 1990. On that date, David McKinney, as administrator, asked the state probate court to require Unger to appear and show cause why he should not be held in contempt for not entering the accounting ordered on September 12, 1988.

On July 18, 1990, Unger filed an accounting listing $135,576.36 in receipts and $114,626.85 in disbursements, leaving a balance of $20,949.51. Unger claimed $19,130.36 was owed him in attorney’s fees for work done for the Estate and David McKinney, individually, and stated the balance, $1,819.15, was owed the Estate. On September 17, 1990, the probate court ordered Unger to deposit the $20,949.51 balance into the court’s registry, but Unger objected, stating the probate court’s order violated the bankruptcy court’s discharge order entered on June 20, 1989.

Administrator David McKinney, on January 22, 1992, petitioned for body attachment requesting the probate court to order Unger to comply with its accounting order dated September 17,1990. The probate court denied the Estate’s petition, and in a letter opinion, explained it was without jurisdiction to order a body attachment because David McKinney, as administrator, failed to make a timely claim in Unger’s bankruptcy proceedings; therefore any monies or debt owed the Estate by Unger had been discharged. The Estate appeals the trial court’s holding.

The Estate contends the probate court erred in holding it had no jurisdiction because 11 U.S.C. § 523(a)(4) of the Bankruptcy Code exempts from discharge any debt for fraud or defalcation which results from the debtor acting in a fiduciary capacity, an embezzlement, or a larceny. In sum, the Estate claims Unger improperly converted estate funds without any probate court order, and therefore was not released from liability to the Estate under § 523(a)(4). The Estate overlooks other pertinent provisions in § 523.

Section 523(a)(3)(B) of the Bankruptcy Code reads in relevant part as follows:

(a) A discharge under section 727, 1141, 1228(a), 1228 (b), or 1328(b) of this title does not discharge an individual debtor from any debt
* * *
(3) neither listed nor scheduled under section 521(1) of this title, with the name, if known to the debtor, of the creditor to whom such debt is owed, in time to permit — * * *
(B) if such debt is of a kind specified in paragraph (2), (4), or (6) of this subsection, timely filing of a proof of claim and timely requests for a determination of dischargeability of such debt under one of such paragraphs, unless such creditor had notice or actual knowledge of the case in time for such timely filing and request;
* * *

In addition, § 523(c)(1) is relevant to the Estate’s argument and that provision provides as follows:

(c)(1) Except as provided in subsection (a)(3)(B) of this section, the debtor shall be discharged from a debt of a kind specified in paragraph (2), (4), or (6) of subsection (a) of this section, unless, on request of the creditor to whom such debt is owed, and after notice and a hearing, the court determines such debt to be excepted from discharge under paragraph (2), (4), or (6), as the case may be, of subsection (a) of this section.

As discussed previously, the Estate argues Unger fraudulently obtained funds as a result of fraud or misconduct as a fiduciary from the McKinney Estate and these funds Unger owes the estate is a nondischarged debt under § 523 (a) (4) of the Bankruptcy Code. However, as is evident from § 523(a)(3)(B) above, a § 523(a)(4) debt can still be discharged if the creditor, the Estate here, obtained notice or actual knowledge of the filing of the debtor’s, Unger’s, bankruptcy petition in time to file a timely proof of claim. Having such knowledge, the creditor Estate was required under § 523(c)(1) to request the court to find that the § 523(a)(4) debt was to be excepted from discharge.

In reviewing the record, it is clear that David McKinney was well aware of Unger’s bankruptcy petition because, as an individual-listed creditor, he was sent notice of the proceeding. In addition, David McKinney and the Estate’s attorney, George Mason, Jr., knew Unger had filed a claim for attorney’s fees on January 29,1988 and March 4,1988, and both learned by letter dated April 1, 1988 that Unger was seeking a legal fee in the amount of $21,893.90. In that same letter, Unger related that the Estate had $134,715.58 in receipts and $110,796.29 in disbursements, leaving a balance of $23,379.29. After subtracting the amount of fees on which he claimed a lien, Unger wrote $1,485.39 would remain, and he requested instructions regarding whom he should deliver the remaining amount to. No response was made.

However, on May 19, 1988, David McKinney went to the bank where the Estate’s account was held and removed Unger’s signature from the account, replaced it with his own and took possession of the balance in the account, which was only $1,819.15.

On March 31, 1989, McKinney wrote a letter to Unger’s former law partner, Ian Vickery, acknowledging the fact that he was aware of Unger’s bankruptcy. McKinney signed the letter, “David B. McKinney, Administrator, Estate of Mary D. McKinney.” In sum, even though David McKinney had actual knowledge of Unger having filed his bankruptcy petition and knew that Unger claimed more than $21,000.00 in attorney’s fees, neither McKinney nor the Estate’s attorney filed an objection or motion with the bankruptcy court. The Estate rejoins that while McKinney may have had actual knowledge of Unger’s bankruptcy proceeding, that fact alone was insufficient to require McKinney to file a proof of claim in that proceeding. The Estate then asserts a “provable debt” must also be shown to exist before the Estate was obliged to appear in the bankruptcy action. The Estate is correct that a provable claim must exist, but “claim” in relevant part is defined in 11 U.S.C. § 101(4)(A) (1988) to mean the following:

[R] ight to payment, whether or not such right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured.

We further note that “debt” as defined under the Bankruptcy Code means liability on a claim. 11 U.S.C. § 101(11) (1988).

Here, a legal, disputed and unliquidated claim existed between Unger and the Estate, and that being so, the Estate, having knowledge of such claim and Unger’s bankruptcy petition, was required to file a proof of claim and ask any debt Unger owed the Estate to be excepted from discharge. The Estate simply failed to do so. Accordingly, we agree with the probate court’s decision that any debt Unger owed the Estate was discharged under the bankruptcy proceedings. As a consequence, the probate court was preempted from ordering Unger to place the disputed funds into the court’s registry or finding Unger in contempt for having failed to do so. See Wood v. Goodson, Judge, 258 Ark. 196, 485 S.W.2d 213 (1972).

In conclusion, we feel obliged to point out Mr. Unger’s misconduct in handling estate funds and obtaining payment of attorney’s fees in this matter. In oral argument, this court first became aware that Mr. Unger failed to place monies belonging to the Estate in the Estate’s bank account, but instead placed such funds in his trust account. Although attorney’s fees were a disputed matter, Unger paid himself those fees from Estate funds without the probate court’s approval. Although we hold the Estate failed to pursue its claim against Unger in the manner required by law, we do not by doing so condone Mr. Unger’s misconduct. Mr. Unger’s attorney’s license has already been surrendered for similar misconduct. In Re John William Unger, 303 Ark. 743, 796 S.W.2d 586 (1990).

       Unger had previously been retained by David McKinney, individually, to represent him in two separate lawsuits. At some point in time, undisclosed by the record, McKinney filed a legal malpractice action against Unger and his law partners.

       A motion was filed in Unger’s bankruptcy proceeding to set aside this discharge order, but on March 22, 1991, the bankruptcy court affirmed the June 20, 1989 order.


author: Donald L. Corbin, Justice.

text:
    Doyle REYNOLDS and Alma Lou Reynolds v. SHELTER MUTUAL INSURANCE COMPANY and Wayne Scoggins
    92-1266
    852 S.W.2d 799
    Supreme Court of Arkansas
    Opinion delivered May 10, 1993

      Jones, Hixon & Jones, by: Holly Smith and Lewis D. Jones, for appellants.

      Roy & Lambert, by: James M. Roy, Jr., for appellee Shelter Mutual Insurance and Stephen M. Schwartz, for appellee Wayne Scoggins.
   Donald L. Corbin, Justice.

This appeal originated as a suit by the insureds against their insurer. Appellants, Doyle and Alma Lou Reynolds, purchased farmerowners insurance for their poultry farm from appellee Wayne Scoggins, who is an agent for appellee Shelter Mutual Insurance Company. A severe winter storm caused damage to four structures and their contents on appellants’ farm. Appellants reported the damages to Shelter and Shelter refused to pay the claim stating that appellants’ policy did not include “collapse coverage” or coverage for damages caused by the weight of ice or snow. Appellants sued Shelter and Scoggins alleging, inter alia, bad faith, breach of contract, negligence, and misrepresentation. The trial court entered partial summary judgment on the claim for bad faith and punitive damages. The trial court directed a verdict for appellee Scoggins on the claim for misrepresentation. A jury rendered verdicts in favor of Shelter and Scoggins on the other claims. Appellants appeal both the granting of partial summary judgment and the judgment entered pursuant to the jury’s verdicts. We have jurisdiction of the appeal as it involves questions in the law of torts. Ark. Sup. Ct. R. 1-2(a) (16) (In Re Rules of the Arkansas Supreme Court and the Arkansas Court of Appeals, 311 Ark. App’x (Feb. 1, 1993)). Appellants assert four arguments for reversal of the judgments appealed. We find no merit to the arguments and therefore affirm.

First, appellants claim the trial court erred in granting partial summary judgment on the claim for bad faith. They claim the record before the trial court showed there were genuine issues of material fact as to whether Shelter engaged in conduct sufficient to support a claim for bad faith.

On appellate review, we need only decide if the granting of summary judgment was appropriate based on whether the evidentiary items presented by the moving party in support of the motion left a material question of fact unanswered. Harvison v. Charles E. Davis & Assoc., 310 Ark. 104, 835 S.W.2d 284 (1992). The burden of sustaining a motion for summary judgment is always the responsibility of the moving party. Id. However, once the movant makes a prima facie showing of entitlement to summary judgment, the respondent must meet that proof with proof that a genuine issue of material fact exists. Bushong v. Garman Co., 311 Ark. 228, 843 S.W.2d 807 (1992). All proof submitted must be viewed in a light most favorable to the party resisting the motion and any doubts and inferences must be resolved against the moving party. Harvison, 310 Ark. 104, 835 S.W.2d 284.

The tort of bad faith is an extension of the well-established rule by which an insurance company may be held liable for its failure to settle a claim within policy limits. Members Mut. Ins. Co. v. Blissett, 254 Ark. 211, 492 S.W.2d 429 (1973). The tort of bad faith requires affirmative misconduct, without a good faith defense; the affirmative misconduct must be dishonest, malicious, or oppressive in an attempt to avoid the insurer’s liability under an insurance policy. Findley v. Time Ins. Co., 264 Ark. 647, 753 S.W.2d 908 (1978). The mere failure to investigate a claim is not the sort of affirmative misconduct that gives rise to a cause of action in tort for bad faith. Id. In granting Shelter’s motion for summary judgment, the trial court observed that the only argument appellants made concerning bad faith was Shelter’s failure to adequately investigate their claim. The trial court concluded that such conduct did not give rise to a cause of action for bad faith according to Findley. We agree with this finding.

Appellants did respond to the motion for summary judgment with affidavits and depositions. However, none of the evidentiary items presented to the trial court — pleadings, depositions, answers to interrogatories, and affidavits — indicate that Shelter engaged in affirmative conduct that was malicious, dishonest, or oppressive in order to avoid paying appellants’ claim. Even in resolving all inferences to be drawn from the evidence in favor of appellants, the evidence shows nothing other than Shelter delayed investigating appellants’ claim for three months because the claim was initially reported as being caused by something for which appellants did not have coverage — the collapse of a roof due to the weight of accumulated ice and snow. It was only after appellants’ attorney wrote a letter to Shelter requesting an investigation and suggesting that the damage could have been caused by something other than the weight of ice and snow that Shelter investigated the claim. We agree with the trial court that such conduct in waiting to investigate a claim is not the sort of malicious affirmative misconduct that gives rise to a cause of action in tort for bad faith. Despite appellants’ claim that Shelter acted with bad faith or ill will, there is simply no evidence of any such ill will on Shelter’s part. Without any evidence of malice or ill will on the part of the insurer, the failure to investigate a claim resulting from a reasonable belief that the damages reported are not covered under the policy does not amount to the tort of bad faith. See Findley, 264 Ark. 647, 753 S.W.2d 908.

Shelter met its burden of establishing a lack of a genuine issue of material fact and entitlement to judgment as a matter of law. Appellants did not meet this proof with proof that a genuine issue of material fact exists as to the claim for bad faith. Appellants simply failed to offer any proof that appellants acted maliciously, dishonestly, or oppressively. Therefore, we cannot say the trial court erred in granting summary judgment.

We reject appellants’ argument that the rule requiring affirmative misconduct to support a claim for bad faith encourages inaction on the part or insurers. To the contrary, the rule as stated in Findley, provides yet another remedy in tort for an insured who feels his claim has not been adequately investigated by his insurer. Although an insurer’s actions, or inaction as the case may be, may not amount to a claim for bad faith, those same actions or inactions may support a claim in contract for nonperformance (breach of contract) or a claim in tort for defective performance (negligence). See Findley, 264 Ark. 647, 753 S.W.2d 908.

Second, appellants claim the trial court erred in ruling the insurance policy was not ambiguous. On appeal, appellants argue the policy’s provision for loss due to windstorm is ambiguous in two respects, and therefore should be construed strictly against the insurer. The part of the policy in question states as follows:

PERILS WE INSURE AGAINST — SECTION 1
We cover direct loss to property insured under Coverage C, Farm Personal Property and Farm Structures caused by perils 1 thru 11 unless the loss is excluded elsewhere under this policy:
1. Fire or Lightning.
2. Windstorm or Hail.
This does not include loss:
(a) property in a building, caused by rain, snow, sand, sleet or dust unless the building is first damaged by the direct force of wind or hail, creating an opening through which the rain, snow, sand, sleet or dust enters [.]

On appeal, appellants claim the foregoing windstorm provision of the policy is ambiguous because it is not clear as to coverage when wind, snow, and hail combine to create a loss and because the exclusionary clause refers only to “property in a building.” (Emphasis added.)

We do not address the merits of this argument because it is not preserved for our review. Although appellants did raise a general objection to the ambiguity of the windstorm and hail provision to the trial court, they did not raise it in either of the two specific ways argued in this court. At trial, appellants claimed that if Shelter intended to exclude from coverage damages that are clearly included under the windstorm and hail provision, it was required to express that exclusion in clear and unmistakable language. The trial court agreed that if there was an ambiguity, the policy should be construed against Shelter as the party who drafted the policy, and asked appellants exactly what language they thought was ambiguous. Appellants did not respond with a specific answer to the trial court’s question. Instead, they merely reiterated their claim that the language “windstorm and hail” would commonly mean to anyone that his property would be covered in a storm and that Shelter could have easily excluded collapse coverage just as easily as it had excluded other things.

The foregoing is the only objection raised below with respect to the ambiguity of the windstorm and hail provision of the policy. Appellants’ objection was simply not specific enough to apprise the trial court of the particular ambiguities they challenge on appeal. The abstract mentions nothing about an objection to the “property in a building” language or an objection about the effect of combined snow, sleet, and hail. Objections below must be specific enough to apprise the trial court of the particular error in question. Acme Brick Co. v. Missouri Pac. R.R., 307 Ark. 363, 821 S.W.2d 7 (1991). Moreover, we will not consider an issue when the appellant changes grounds for an argument on appeal. Warhurst v. White, 310 Ark. 546, 838 S.W.2d 350 (1992).

As their third argument for reversal, appellants challenge a jury instruction given by the trial court. Appellants claim the instruction was erroneous in three respects. The challenged instruction is Instruction No. 9 and was given as follows:

Doyle and Alma Lou Reynolds claim damages from Shelter Mutual Insurance Company and have the burden of proving by a preponderance of the evidence three essential propositions:
First, that the structures and equipment were listed on the declaration sheet of the insurance policy.
Second, that the structures and equipment were damaged by a windstorm or hail.
And third, the amount of damages that they have sustained.
While the policy contains no definition of windstorm, you are instructed that under the law, a windstorm is defined as a wind which is of sufficient violence to be capable of damaging the insured property by its own unaided action provided that the property was in a reasonable state of repair at the time of the windstorm.
Therefore, if you find that a windstorm or hail was the dominant, direct and efficient cause of the loss and damage to the plaintiffs structures and equipment insured, then your verdict will be for the plaintiffs against Shelter Mutual Insurance Company; but if on the other hand you find that any of these propositions has not been proved, then your verdict should be for Shelter Mutual Insurance Company.

Appellants’ first challenge to Instruction No. 9 is that it erroneously placed the burden of proof on them. Relying on Lynch v. Traveler’s Indemnity Co., 452 F.2d 1065 (8th Cir. 1972), and Arkansas Farm Bureau Ins. Fed’n v. Ryman, 309 Ark. 283, 831 S.W.2d 133 (1992), appellants claim Shelter was relying on an exclusionary provision of the contract and therefore had the burden of proving appellants’ damages fell within the exclusion.

It is true that if an insurer claims damages are excluded under its policy, it has the burden of so proving; however, this burden is not placed on an insurer until the insured has first made a prima facie case that the damages are covered under the policy. Southern Farm Bureau Casualty Ins. Co. v. Reed, 231 Ark. 759, 332 S.W.2d 615 (1960) (citing Life & Casualty Ins. Co. v. Barefield, 187 Ark. 676, 61 S.W.2d 698 (1933)). This burden does not become the insurer’s unless it claims the insured’s damages were excluded from coverage under the policy. Nevertheless, regardless of the fact that Shelter claims it was not relying on an exclusionary provision to deny coverage, appellants still had the burden of making a prima facie case of coverage. Jury Instruction No. 9 therefore did not state the burden of proof incorrectly.

Appellants’ second challenge to Instruction No. 9 is that it stated an improper definition of “windstorm.” Appellants made a general objection that the windstorm provision of the policy was ambiguous, but the abstract does not reveal that appellants ever objected to the definition of windstorm as contained in Instruction No. 9. Appellants raise this objection for the first time on appeal, and for that reason we do not address this argument. Union Lincoln Mercury, Inc. v. Daniel, 287 Ark. 205, 697 S.W.2d 888 (1985); ARCP Rule 51.

Appellants’ third challenge to Instruction No. 9 is its failure to include a definition of “hail.” Relying on Southall v. Farm Bureau Mut. Ins. Co., 276 Ark. 58, 632 S.W.2d 420 (1982), appellants asked the trial court to instruct the jury that “hail” was to be given the meaning ordinarily applied to that term in everyday affairs of life. In Southall, there was undisputed testimony that the term “hail” included what was commonly referred to as “sleet;” therefore, this court approved the trial court’s instructing the jury that “hail” could be given its ordinary meaning. In the present case, the trial court refused appellants’ request to instruct the jury on the definition of “hail” used in Southall because, unlike the evidence presented in that case, here there was expert testimony that “hail” and “sleet” were completely different meteorological terms and concepts. In addition, there was absolutely no evidence that any hail was involved with the storm and the damages at issue in this case. Accordingly, the trial court did not err in refusing to instruct the jury that “hail” was to be given its common meaning. To have done so would have been contrary to the evidence presented. The trial court did not err in giving Instruction No. 9.

Appellants’ fourth argument for reversal is a challenge to Jury Instruction Nos. 13 and 14, which dealt with the negligence of appellee Scoggins, the agent for Shelter. These two instructions were ordinary negligence instructions stating that appellants had the burden of proving damages proximately caused by Scoggins’ negligence and defining negligence in the “ordinary, reasonably prudent person” standard. On appeal, appellants claim that in addition to these two instructions, the trial court should also have instructed the jury that Scoggins had the duty to disclose the fact that the structures were not covered if the weight of the ice or snow caused them to collapse. However, the abstract does not reveal that appellants proffered any such instruction to the trial court.

We have quoted ARCP Rule 51 many times and find it necessary to do so again here:

No party may assign as error . . . the failure to give an instruction unless he objects thereto before or at the time the instruction is given, stating distinctly the matter to which he objects and the grounds of his objection, and no party may assign as error the failure to instruct on any issue unless such party has submitted a proposed instruction on that issue [emphasis added].

As appellants did not submit any proposed instruction regarding Scoggins’ duty to disclose non-coverage for collapse due to the weight of ice and snow, we cannot say the trial court erred in failing to so instruct the jury. ARCP Rule 51.

The order granting partial summary judgment and the judgment entered pursuant to the jury’s verdicts are affirmed.


author: Robert L. Brown, Justice. Jack Holt, Jr., Chief Justice,

text:
    Sheila DIEMER v. Dennis G. DISCHLER
    92-1253
    852 S.W.2d 793
    Supreme Court of Arkansas
    Opinion delivered May 10, 1993
    [Rehearing denied June 7, 1993.]

      Gary Eubanks & Associates, by: James Gerard Schulze and Hugh F. Spinks, for appellant.

      Wright, Lindsey & Jennings, for appellee.
   Robert L. Brown, Justice.

This case concerns a vehicular accident and a verdict in favor of the defendant/appellee, Dennis G. Dischler. Appellant Sheila Diemer urges that a new trial is warranted due to failure to give the sudden emergency instruction, AMI 614, and further because of juror misconduct occasioned by independent experiments on the highway in question conducted by two jurors and relayed to other members of the jury. We disagree that the asserted errors warrant a new trial, and we hold that there was no abuse of discretion by the trial court in either instance.

At about 4:25 p.m. on August 29, 1990, Sheila Diemer was driving her 1983 Toyota Tercel on Highway 66 West in the city of Mountain View. She negotiated a curve some distance away from the highway’s intersection with Maple Drive and saw a forklift operated by Dischler in her lane of traffic.

Dischler at the time was an employee of Dearien Builders Supply and had driven the forklift out of the company yard with the intention of crossing the highway to a lot containing warehouses. He had begun pulling the forklift out on the highway when he saw Diemer’s car at a distance of what he estimated to be about 200 or 300 feet, heading toward him at what appeared to him to be a “pretty fast” speed. A. sign posted in the vicinity showed 45 miles per hour as the speed limit.

Dischler stopped, assuming that Diemer would be able to go around him. At that point, according to a subsequent report by the investigating police officer, the body of the forklift blocked the entire westbound lane of traffic, which was Diemer’s lane, while the back end of the vehicle was still on Maple Drive. The tines of the forklift were close to or on the center line. The opposite, eastbound traffic lane was clear.

When Diemer saw the forklift in the road, she applied her brakes and veered to the right in an attempt to go around the rear of the vehicle. She was unsuccessful, and her car collided with the forklift. Dischler was thrown from the forklift but was not injured. Diemer was rendered unconscious and taken to a Memphis hospital. She subsequently filed a complaint against Dischler, charging him with negligence.

At trial almost two years later, both Dischler and Diemer called accident reconstruction experts. Dr. Larry Williams, testifying for Dischler, calculated that given normal reaction time and a speed of 45 miles per hour and the fact that Diemer could see the forklift from 343.5 feet away, she could have stopped between 150 and 160 feet short of the forklift. Even at a speed of 60 miles per hour, he opined, she still could have stopped before hitting the forklift. In Dr. William’s opinion, Diemer had been speeding.

Steve Jackson, Dischler’s reconstructionist, disagreed with Dr. Williams on the speeding issue. He distinguished “emergency” from “discriminative” reactions. In the former situation, he stated, a person has “only one option” and ordinarily three-quarters of a second in which to exercise it. In the latter case, he testified that a person perceives a hazard and has time to employ several options for evading the accident. In this instance, he opined that Diemer had time to try at least two options.

On the second day of trial, Diemer asked that AMI 614, the sudden emergency instruction, be given to the jury, but the trial court refused to give it. The case then went to the jury, and nine members of the jury returned a verdict in favor of Dischler.

Almost three weeks later, on July 15, 1992, Diemer filed a motion for a new trial under Ark. R. Civ. P. 59(a), contending that she had been deprived of a fair trial because of juror misconduct. Specifically, she asserted that Janice Keene, a juror who had not joined in the verdict, had contacted the Stone County Circuit Clerk and revealed that during jury deliberations two unnamed jurors had stated that they had viewed the scene of the accident and had performed an “experiment” in an attempt to recreate the accident. The two jurors, according to Keene, informed their colleagues that their experiment demonstrated that they were able to stop their vehicles before they reached the point of impact.

Janice Keene signed an affidavit containing this information, and on that same day, another juror who had not joined in the verdict, Shirley Barnes, signed substantially the same affidavit. The affidavits were attached to Diemer’s motion for a new trial. In his response to the motion, Dischler pointed to the fact that neither affiant was able to recall the names of the jurors involved in the asserted misconduct and that the affidavits lacked specificity. The trial court denied the motion.

I. SUDDEN EMERGENCY INSTRUCTION

Diemer first urges that the trial court erred in refusing to give the sudden emergency instruction, AMI 614. That instruction provides that:

A person who is suddenly and unexpectedly confronted with danger to herself or others not caused by her own negligence is not required to use the same judgment that is required of her in calmer and more deliberate moments. She is required to use only the care that a reasonably careful person would use in the same situation.

It should be noted at the outset that there is no evidence that Dischler suddenly pulled the forklift out in front of Diemer. The forklift was already in the highway when Diemer rounded the curve and saw it. Moreover, the testimony of Diemer’s accident reconstruction expert, Dr. Larry Williams, established that a driver’s line of vision from a residential mailbox to the point of impact was 343.5 feet. The sight-line for that distance, Dr. Williams determined, was unobstructed. Had Diemer been traveling at the posted speed of 45 miles per hour, according to the expert’s calculations, she could have reacted and stopped her car in 187 feet. Even at an excessive rate of 60 miles per hour, she could have stopped in 290 feet — 53.5 feet before reaching the forklift. Dr. Williams further testified that the unobstructed sight-line on the highway to point of impact was even longer than 343.5 feet.

What is required in order to warrant the sudden emergency instruction is that the driver be in a stressful situation that dictates a quick decision regarding possible courses of conduct. McElroy v. Benefield, 299 Ark. 112, 771 S.W.2d 274 (1989). Before a person is entitled to the instruction, that person must have been aware of the danger, have perceived the emergency, and have acted in accordance with the stress caused by the danger. Id; see also Transit Homes, Inc. v. Bellamy, 282 Ark. 453, 671 S.W.2d 153 (1984). In the McElroy case, for example, we held that there was no error in giving the instruction when the appellee testified that he saw the appellants’ vehicle sitting at the edge of the highway and eased over to avoid hitting it. When he did so, the appellants pulled out in front of him, and he slammed on his brakes and skidded 108 feet to the point of impact.

Another case involving sudden movement into the path of a vehicle is Holcomb v. Gilbraith, 257 Ark. 32, 513, S.W.2d 796 (1974). There, a teenage pedestrian, whom the appellee had seen walking along a highway, made a sudden turn into the highway when the appellee’s automobile was within 100 feet of the person. We held that the sudden emergency instruction was properly given under those circumstances. See also Johnson v. Nelson, 242 Ark. 10, 411 S.W.2d 661 (1967) (the giving of AMI 614 was appropriate where a fourteen-year-old boy either stepped or fell into a street directly in front of the appellee’s vehicle).

In the present case, there was testimony by Diemer that she saw the forklift upon rounding the curve. Furthermore, Dischler testified that Diemer was proceeding at a “pretty fast” speed, and Dr. Larry Williams, opined that Diemer could have stopped and avoided the accident with time and room to spare. Diemer’s own witness, Steve Jackson, testified that she had time to employ at least two options. In light of this testimony, the trial court had a sound basis for finding that the danger was not so sudden or unexpected as to justify the instruction.

One other point also militates in favor of the trial court’s decision. AMI 614 requires that the sudden emergency not be caused by the negligence of the party requesting the instruction. We have held in this regard that where the evidence of some negligence on the part of the requesting party is “very strong,” that party is not entitled to the instruction. Scroggins v. Southern Farmer’s Assn, 304 Ark. 426, 803 S.W.2d 515 (1991); see also Ashmore v. Ford, 267 Ark. 854, 591 S.W.2d 666 (Ark. App. 1979). Under the facts of this case, the trial court could readily have found that the evidence was sufficiently strong that Diemer was speeding and helped create the emergency.

There was no error in the trial court’s refusal to give AMI 614.

II. JUROR MISCONDUCT

For her second point, Diemer urges that the jury was tainted by extraneous information brought into the jury room by two unnamed jurors who conducted an experiment on Highway 66 West. The two affidavits are identical regarding what the jurors did:

2. During deliberations, at least two members of the jury stated that they had viewed the scene of the accident. Two members also stated that they had performed an experiment. They went to the scene of the accident and attempted to stop at the place the accident occurred. They concluded that they were able to stop before they would have hit the forklift driven by Mr. .Dischler, and they argued, therefore, that plaintiff should have been able to stop.

No further description or evidence of the averred misconduct was presented to the trial court.

When a new trial is requested because of juror misconduct under the rubric of Ark. R. Civ. P. 59(a), the moving party must show that the party’s rights have been materially affected by demonstrating that a reasonable possibility of prejudice has resulted from the misconduct. St. Louis Southwestern Ry. Co. v. White, 302 Ark. 193, 788 S.W.2d 483 (1990); Borden v. St. Louis Southwestern Ry. Co., 287 Ark. 316, 698 S.W.2d 795 (1985). We have held that prejudice, in such instances, is not presumed. St. Louis Southwestern Ry. Co. v. White, supra. Trial courts are vested with great discretion in acting on motions for new trial, and, in a case in which a new trial is requested on the ground of juror misconduct, we will not reverse the trial court’s denial unless there is a manifest abuse of that discretion. Id.

Dischler contends that the motion for the new trial and the accompanying affidavits were defective because they failed to identify the names of the jurors whose actions were the basis of the motion and, further, they failed to describe the experiment performed with specificity. As a result, Dischler contends, the trial court could only speculate about the actions of the jurors at the accident site, and such speculation would itself have been an abuse of discretion.

Three recent cases discuss the factor that we consider important in assessing juror misconduct. In B. & J. Byers Trucking, Inc. v. Robinson, 281 Ark. 442, 665 S.W.2d 258 (1984), a jury foreman visited the portion of a highway where a rear-end collision involving a car and truck had occurred and told his fellow jurors “that the truck should have stopped in time, or something to that effect.” 281 Ark. at 447, 665 S.W.2d at 262. The affiant stated that he believed that the foreman’s statement influenced some of the jurors. There was no admonishment by the trial court for jurors not to visit the scene of the accident.

We first noted that what was then Uniform Evidence Rule 606(b) provided that a juror may testify on the question of whether “extraneous prejudicial information was brought to the jury’s attention.” We followed this by stating: “When we lay aside the foreman’s expression of opinion and its possible effect as being inadmissible, all that remains is that a juror, who had not been cautioned against visiting the scene, went out to a place on the public highway that was open to inspection by everyone and with which he might have been familiar. There was no extraneous information in the sense that the juror talked to anyone else when he went to the scene.” 281 Ark. at 448, 665 S.W.2d at 262. On that basis, we affirmed the trial court’s decision.

In Borden v. St. Louis Southwestern Ry. Co., supra, which involved a truck-train collision case, we held that the trial court had not abused its discretion in granting a new trial. In Borden, the trial court admonished the jury not to make independent investigations into the facts. Nonetheless, the jury foreman and another juror took it upon themselves to go to the railroad crossing, in the words of a juror’s affidavit, “to satisfy themselves about the view.” 287 Ark. at 318, 698 S.W.2d at 796. According to one juror’s affidavit, they told the other jurors that, contrary to photographs which had been introduced into evidence, the railroad switchbox blocked a motorist’s view. 287 Ark. at 319, 698 S.W.2d at 796. In addition, the bailiff reported by way of an affidavit that the jury foreman had told him that “he watched a train approach the crossing and that it didn’t blow its whistle until it was about 200feet from the crossing and then only one time.'’'’ 287 Ark. at 318, 698 S.W.2d at 796. (Emphasis in original.) The offending jurors were named in the affidavits. We concluded that the trial court was correct in granting a new trial and that the affidavits established a reasonable possibility of prejudice.

In the most recent case-in-point, St. Louis Southwestern Ry. Co. v. White, supra, a train-and-truck collision was the basis of a tort action. After a verdict for the plaintiff truck driver, one of the jurors contacted the circuit clerk to report her concerns about the jury’s deliberations. Later, she contacted the railroad company, which filed a motion for a new trial based on the affidavits of two jurors who stated that they, the affiants, had both gone to the railroad crossing during the trial and had discussed with other jurors their observations of the view down the track. The trial court had given no instruction against going to the accident site.

The trial court denied a new trial, and we affirmed. We held that the circumstances of alleged juror misconduct fell “somewhere between the casual observation in B. & J. Byers and the more extensive investigations made in Borden.” 302 Ark. at 197, 788 S.W.2d at 485. Moreover, there was no patent disobedience of a court admonishment and no impugning of specific facts by the jurors’ observations as had been the case in Borden v. St. Louis Southwestern Ry. Co., supra.

We can glean certain factors from these three cases which are determinative of whether the trial court was correct in denying a new trial in the present case. We first have focused on whether the trial court instructed the jury not to visit the site of the accident. Secondly, we have evaluated whether the juror offender simply voiced an opinion or engaged in an experiment relating to a crucial issue. Next, there is the question of prejudice and whether the offending juror’s observations impugned a fact presented by a party. We add to these factors the question of whether the affiant describes the alleged juror misconduct with sufficient specificity which would include identifying the names of the jurors who engaged in the acts complained of.

We cannot agree that failure to grant a new trial was a manifest abuse of discretion. To be sure, the affidavits raise a serious question. But the trial court was not presented with the names of the offending jurors or the details of what went into the experiment. Without details and names, the trial court was left to speculate on whether what the jurors did amounted to little more than voicing their opinion. The mere voicing of an opinion is not juror misconduct, and we so held in B. & J. Byers Trucking, Inc. v. Robinson, supra. Moreover, the court stated that eleven of the jurors were familiar with the intersection, had admitted such during voir dire, and probably drove by it on their way to the trial.

The trial court concluded that the affidavits of the complaining jurors were simply insufficient to establish an evidentiary basis for a new trial and that a reasonable possibility of prejudice was lacking. Under these circumstances, we cannot say that the decision constituted a manifest abuse of discretion.

One additional factor has a bearing on our decision. Diemer did not ask the trial court to instruct the jury not to visit the accident scene and conduct experiments. As a consequence, no admonishment was given by the trial court. Flagrant disobedience by the jurors would have suggested more purposeful conduct to decide the issue outside of the courtroom than what was demonstrated here.

Affirmed.

Holt, C.J., dissents.

Jack Holt, Jr., Chief Justice,

dissenting. The trial court concluded that the affidavits of the complaining jurors concerning juror misconduct were simply insufficient to establish an evidentiary basis for a new trial and that a reasonable possibility of prejudice was lacking.

The majority holds that under these circumstances, the decision of the trial court did not constitute a manifest abuse of discretion. I disagree.

In this instance, two former jurors stated under oath by separate affidavits that two other jurors went to the accident scene, conducted experiments on what was the core issue of this litigation, then reported their findings to the panel. The trial court made its decision to deny the motion for new trial after reading the affidavits, the parties’ briefs on the issue, and after holding a short hearing on this motion. At this hearing, the two parties presented their arguments, but the court did not call in any of the jurors. This was wrong.

In Marshall v. United States, 360 U.S. 310, 79 S.Ct. 1171, 3 L.Ed.2d 1250 (1959), the trial judge was informed during the trial that the jurors had been exposed to newspapers providing information on the defendant’s prior record. In response, he summoned the jurors into his chambers one by one and inquired if they had read the articles.

In Parrott v. State, 246 Ark. 672, 439 S.W.2d 924 (1969), juror misconduct was alleged because the jurors were permitted to intermingle with witnesses and law enforcement officials during the trial lunch breaks. In affirming the trial court’s refusal to grant a new trial based upon juror misconduct, this court noted that the “trial court carefully considered the contention of jury misconduct contained in appellant’s motion for a new trial. The testimony of the jurors were taken. . .” Id. at 678.

In Langston v. Hileman, 284 Ark. 140, 680 S.W.2d 89 (1984), the appellant learned after the trial that the jury foreman was seen talking to one of the parties and also seen showing other jurors pictures as well as pointing out facts that had been revealed during the trial. Also, allegedly the foreman had been seen talking to a witness for the plaintiff during every recess. The trial court ultimately held a hearing on appellant’s motion for new trial and questioned the foreman.

Lastly, in Mitchell v. State, 299 Ark. 566, 776 S.W.2d 332 (1989), it was alleged that the victim had spoken with two jurors during a trial recess. The judge held a hearing on the motion for new trial based upon juror misconduct and listened to the testimony of a number of witnesses on this issue.

Clearly, as these cases illustrate, it is not uncommon for a trial court, when presented with a serious allegation of juror misconduct, to summon the jury into his chambers to ascertain whether the jurors are guilty of a transgression affecting the trial decision. Such action should be taken by the trial court regardless of whether it is requested by counsel. Allegations of jury experimentation during the course of a trial is of serious import. We have said that we do not permit such experiments. Borden v. St. Louis Southwestern Ry. Co., 287 Ark. 316, 698 S.W.2d 795 (1985).

Since two jurors’ affidavits attesting to experiments performed by the jurors were presented to the trial court, I feel that the trial court abused its discretion in failing to explore these allegations by at least summoning the jurors to his chambers for appropriate examination. Because of this failure to do so, I would remand to the trial court for further proceedings consistent with this dissent.


author: Robert L. Brown, Justice.

text:
    Patricia SCHELAND and Tom Scheland v. David Leslie CHILLDRES
    92-1306
    852 S.W.2d 791
    Supreme Court of Arkansas
    Opinion delivered May 10, 1993
    [Rehearing denied June 14, 1993.]

      Art Givens Law Firm, by; R. Ted Vandagriff, for appellants.

      Hale & Young, by; Milas H. Hale, for appellees.
   Robert L. Brown, Justice.

This appeal comes to us from a second order mandating that the parties and infant child undergo blood tests to establish paternity of the child. We dismiss the appeal due to the absence of an appealable order.

On December 4,1991, appellee David Leslie Chilldres filed a Complaint to Establish Paternity in Pulaski County Chancery Court. He alleged that from March 19 to mid-April, 1991, he and the defendant, appellant Patricia Scheland, were actively dating though Mrs. Scheland was married at the time, and that Mrs. Scheland had become pregnant with his child, which was estimated to be due in the January 15, 1992 time frame. Chilldres stated that Mrs. Scheland had acknowledged his paternity to several persons. Chilldres subsequently joined Mrs. Scheland’s husband of nineteen years, Tom Scheland, as a party defendant.

Chilldres sought to be declared the father of the child and requested that he be given visitation rights and allowed to support the child and pay part of the birth expenses. The child was born on January 6, 1992.

In a counterclaim filed on February 3,1992, Mrs. Scheland prayed that in the event that Chilldres’s allegations were proved, she be paid $26,109.92 for prenatal care and laying-in expenses, $5,584 in lost wages, and child support in an amount to be set by the court. She also prayed, irrespective of the paternity determination, that she be awarded $13,282.50 for psychiatric-psychological treatment and damages for future physical pain, suffering, and medical treatment resulting from Chilldres’s mental abuse as well as $100,000 in punitive damages.

Mrs. Scheland filed an answer to Chilldres’s complaint, also on February 3, 1992, denying Chilldres’s allegations and asserting that under the common law the husband of a married woman is presumed to be the father of all children of the married woman and that it would be contrary to public policy to permit Chilldres to interfere with the Schelands’ marital relationship. In an amended answer filed on June 5,1992, the Schelands objected to Chilldres’s efforts “to illegitimize their child that was conceived in wedlock and born in wedlock.”

Following a hearing, the chancellor ordered that blood tests be performed on Chilldres, the Schelands, and the infant child to assist in deciding paternity under her authority set out in Ark. Code Ann. § 16-43-901(e) (Supp. 1991). The Schelands then filed a motion to dismiss that order, contending that Chilldres’s admission that the child was conceived and born in wedlock established that the child was not illegitimate as a matter of law and that the Schelands’ constitutional right to marital privacy barred any attempt by Chilldres to illegitimize their child. In his answer, Chilldres declared that the matter had already been decided by the Court in the first order and was therefore res judicata.

In a second order, the chancellor denied the motion to dismiss and reiterated her earlier order requiring the parties and the child to submit to blood tests to assist her in determining paternity. The Schelands filed notice of an interlocutory appeal from the chancellor’s second order. No further orders have been entered by the chancellor. The issue of paternity and the counterclaim by Mrs. Scheland remain to be decided.

Supreme Court Rule 29(1 )(k) permits interlocutory appeals, and Rule 2(a) of the Appellate Rules of Procedure specifies those orders that are appealable. Though the Schelands direct us to Rule 2 and state generally that it provides for an appeal to this court in this case, they fail to premise jurisdiction on a particular subsection of Rule 2 or otherwise to tell us why an interlocutory appeal is appropriate under our rules. None of the categories for interlocutory orders from which appeals may be taken under Rule 2(a) embrace an order for blood tests such as that contemplated in this case. The fact that a significant issue may be involved is not sufficient, in itself, for this court to accept jurisdiction of an interlocutory appeal. An appeal is simply premature at this time. See Stephens v. Stephens, 306 Ark. 59, 810 S.W.2d 946 (1991). We hold that the chancellor’s order is not appealable.

Appeal dismissed.


author: Per Curiam.

text:
    Bryan HARP v. STATE of Arkansas
    CR 92-1484
    852 S.W.2d 138
    Supreme Court of Arkansas
    Opinion delivered May 10, 1993

      Faber DeWitt Jenkins, Jr., for appellant.

      Winston Bryant, Att’y Gen., by: Clint Miller, Senior Asst. Att’y Gen., for appellee.
   Per Curiam.

Appellant’s brief was due on February 9, 1993. No brief has been filed or tendered and no extension of time has been requested. On April 14, 1993, the Attorney General moved for an order dismissing the appeal for failure to prosecute. Counsel for the appellant, Mr. Faber DeWitt Jenkins, Jr., is hereby ordered to appear before this court on Monday, May 17, 1993, to show cause why he should not be held in contempt of court for failing to prosecute this appeal.


text:
    IN RE REVIEW OF HABEAS CORPUS PROCEEDINGS
    852 S.W.2d 791
    Supreme Court of Arkansas
    Opinion delivered May 10, 1993
   Per Curiam.

In Fulks v. Walker, 224 Ark. 639, 275 S.W.2d 873 (1955), we recited the history resulting in the use of certiorari as the proper means of seeking review of habeas corpus proceedings. We concluded that appeal was more appropriate than certiorari, and we directed that henceforth review of habeas corpus proceedings would be by appeal.

In City of Clinton v. Jones, 302 Ark. 109, 787 S.W.2d 242 (1990), without reference to Fulks v. Walker, we said certiorari was the proper means of review of habeas corpus proceedings. We should not have done so. Since our decision in the City of Clinton case we have permitted review by either method, and confusion has resulted.

We again call attention to Fulks v. Walker. The proper means of review of habeas corpus proceedings is by appeal. After July 1,1993, we will permit review of habeas corpus proceedings only by appeal.


text:
    Charles PROVANCE, Scotty Hancock, and Chad Eveland v. STATE of Arkansas
    CR 93-242
    852 S.W.2d 324
    Supreme Court of Arkansas
    Opinion delivered May 10, 1993

      Appellants, pro se.
    No response.
   Per Curiam.

These petitioners, Charles Provance, Chad Eveland and Scotty Hancock, were charged and convicted in the Circuit Court of Randolph County of the crime of rape. They were represented by Mr. Cecil Kildow. The judgment of conviction was entered on October 21, 1992. No notice of appeal was filed.

On March 10, 1993, petitioners moved pro se for a belated appeal, alleging that they informed Cecil Kildow of their desire to appeal and that Mr. Kildow declared his intent to appeal in their behalf from the judgment, that the failure to appeal was purely the fault of their attorney. Petitioners further allege that Cecil Kildow has an impermissible conflict of interest in representing all three petitioners and request that new and separate counsel be appointed for them.

On March 22, 1993, a motion for a belated appeal for the petitioners was filed by Mr. Cecil Kildow, acknowledging that the failure to file Notice of Appeal was not the fault of the petitioners but of defense counsel. The motion also requests that petitioners, who are free on bond, be allowed to remain at liberty while a belated appeal is pending. The motion filed by Mr. Kildow makes no mention of a conflict in his collective representation of the petitioners.

We grant the petition for a belated appeal and direct that a copy of this order be sent to the Committee on Professional Conduct. See per curiam dated February 5,1979, In re: Belated Appeals in Criminal Cases, 265 Ark. 964. We take no action on the bond, leaving that issue to the trial court. Nor do we address, at this point, petitioners allegation that Mr. Kildow cannot represent them on appeal due to a conflict. Their allegation is wholly conclusory and counsel himself makes no such allegation.


author: Robert H. Dudley, Justice. David Newbern, Justice,

text:
    Stacy Davanoe BOYD v. STATE of Arkansas
    CR 93-12
    853 S.W.2d 263
    Supreme Court of Arkansas
    Opinion delivered May 17, 1993

      Richard Quiggle, P.A., by: Julia Mehyou, for appellant.

      Winston Bryant, Att’y Gen., by: TeenaL. White, Asst. Att’y Gen., for appellee.
   Robert H. Dudley, Justice.

Appellant was seventeen years old when he was questioned by detectives about his involvement in the burglary of a pawn shop in Little Rock. He was advised by one of the detectives of his Miranda rights, waived those rights, and gave two incriminating statements. He was charged in circuit court with the felonies of burglary and theft. He moved to suppress his statements because his mother did not consent to the waiver of his Miranda rights. The circuit court denied the motion, and appellant was convicted of both felonies. He appeals. The court of appeals certified the case to this court. We affirm the judgments of conviction.

Appellant, in his sole point of appeal, contends that the circuit court erred in refusing to suppress his custodial statements. He contends that the constitutional safeguards for juveniles set out in Edwards v. Arizona, 451 U. S. 477 (1981), have been extended by statute in this State. His two-step argument is based on the juvenile code and is as follows. First, he was seventeen years of age at the time he waived his Miranda rights, and those rights include the right to counsel. Section 9-27-303(1)(A) of the Arkansas Code Annotated of 1987 provides that anyone under eighteen years of age is a juvenile. Thus, he was a juvenile who waived his right to counsel. Second, section 9-27-317 of the Code provides that a juvenile cannot waive the right to counsel unless the court finds that the custodial parent consented in writing to the decision to waive the right to counsel. His custodial parent, his mother, did not agree in writing with the decision to abandon his rights. Thus, he concludes that he could not have waived his right to counsel and that the circuit court erred in refusing to suppress his custodial statements.

Appellant’s argument assumes that the statutory provision requiring the custodial parent to consent to the waiver applies to proceedings in circuit court. That assumption is fallacious. The juvenile code provides that when a case involves a juvenile sixteen years old or older, “and the alleged act would constitute a felony if committed by an adult, the prosecuting attorney has the discretion to file a petition in juvenile court alleging delinquency, or to file charges in circuit court and to prosecute as an adultP Ark. Code Ann. § 9-27-318(c) (Repl. 1991) (emphasis added). The language is clear. A juvenile over sixteen years of age may be prosecuted “as an adult.” When the words used in a statute have a well-defined meaning, and the wording of the statute is clear, we give those words their plain meaning. McGee v. Armorel Pub. Schs., 309 Ark. 59, 827 S.W.2d 137 (1992). The plain meaning of the words “the prosecuting attorney has the discretion to file. . . in circuit court and to prosecute as an adult” is that when the prosecutor chooses to prosecute a juvenile in circuit court as an adult, the juvenile becomes subject to the procedures and penalties prescribed for adults. The language can have no other meaning.

Equally important, the section of the juvenile code requiring parental consent to a waiver is limited to proceedings in the juvenile division of chancery court. It provides that “[w]aiver of the right to counsel shall be accepted only upon a finding by the court from clear and convincing evidence . . . that . . . the parent. . . agreed with the juvenile’s decision to waive the right to counsel.” Ark. Code Ann. § 9-27-317 (Repl. 1991). The term “court” is defined as “the Juvenile Division of Chancery Court.” Ark. Code Ann. § 9-27-303(8) (Repl. 1991). Again, the language is clear. In addition, a particular provision in a statute must be construed with reference to the statute as a whole. State v. Brown, 283 Ark. 304, 675 S.W.2d 822 (1984) (quoting 2A Sutherland, Statutory Construction § 46.05). The whole act refers only to proceedings in juvenile court. Since appellant was never prosecuted as a delinquent in the juvenile division of chancery court, the quoted provision is not applicable.

Finally, while we have no previous holding on the specific argument made in this appeal, we have addressed the admissibility of statements of juveniles who were tried as adults. In both cases decided after the Juvenile Code was adopted in 1989, we looked at the totality of the circumstances surrounding the waiver to determine whether it was voluntarily and knowingly and intelligently given. See Johnson v. State, 307 Ark. 525, 823 S.W.2d 440 (1992) and Porchia v. State, 306 Ark. 443, 815 S.W.2d 926 (1991). In Johnson, we specifically considered that the appellant was only sixteen years of age and that no adult member of his family was present when he was warned of, and waived, his Miranda rights and gave a statement. Still, under the totality of the circumstances, we held that the statement was admissible. Accordingly, the circuit court did not err in refusing to grant the motion to suppress.

Affirmed.

Newbern and Glaze, JJ., dissent.

David Newbern, Justice,

dissenting. “Waiver of the right to counsel shall be accepted only upon a finding by the court from clear and convincing evidence, after questioning the juvenile, that . . . [t]he parent, guardian, custodian, or attorney agreed with the juvenile’s decision to waive the right to counsel.” Thus provides Ark. Code Ann. § 9-27-317(a)(3) (Repl. 1991). Although that Statute is part of the Arkansas Juvenile Code of 1989 and is included among sections dealing with proceedings to be conducted by the juvenile divisions of chancery courts, it contains no limitation requiring its use only in such proceedings.

One of the goals of the Juvenile Code is,

To protect society more effectively by substituting for retributive punishment, whenever possible, methods of offender rehabilitation and rehabilitative restitution, recognizing that the application of sanctions which are consistent with the seriousness of the offense is appropriate in all cases. [Ark. Code Ann. § 9-27-302(3) (Repl. 1991).]

This decision will guarantee that the purpose of, and the flexibility envisioned by, the statutory language will not be achieved in cases like this one.

If the Court’s opinion is correct, when a juvenile like Boyd waives the right to counsel without the required guidance and confesses, the prosecutor choosing whether to charge the juvenile in a juvenile court or in a circuit court must file felony charges in a circuit court or risk suppression of the confession for noncompliance with § 9-27-317. A Statute designed to protect juveniles thus will result in their being subjected to greater punishment, and the rehabilitation goals of the Juvenile Code will be subverted.

A juvenile accused of a felony, and thus facing the possibility of being prosecuted as an adult, obviously has more need for parental guidance than one facing delinquency proceedings. Surely the General Assembly did not intend the Statute to result in curtailment of a protection the juvenile would otherwise have.

We have often rejected statutory interpretations resulting in absurdity or injustice or which defeat the plain purpose of the law. See, e.g., Campbell v. State, 311 Ark. 641, 846 S.W.2d 639 (1993); Ragland v. Allen Transformer Co., 293 Ark. 601, 740 S.W.2d 133 (1987); Ragland v. Alpha Aviation, Inc., 285 Ark. 182, 686 S.W.2d 391 (1985). We should do so in this case and hold that, although the Statute is part of the Juvenile Code, it applies at least to a juvenile who, while being interrogated and before being charged or made the subject of a delinquency proceeding, waives the right to counsel.

I respectfully dissent.