text:
    Magdalena KEMPNER v. Stephen William SCHULTE and Landscape Design and Construction
    93-1165
    885 S.W.2d 892
    Supreme Court of Arkansas
    Opinion delivered October 31, 1994

      Gene O’Daniel, for appellant.

      Laser, Sharp, Mayes, Wilson, Bufford & Watts, P.A., by: Brian Allen Brown and Jacob Sharp, for appellees.
   Steele Hays, Justice.

This is an action for personal injuries arising from a rear end collision. A jury verdict awarded $750 to the plaintiff, Mrs. Magdalena Kempner. On appeal Mrs. Kempner assigns error to the trial court’s refusal to order a new trial for inadequacy in the amount of the verdict. We affirm the trial court.

On July 31, 1990, Mrs. Kempner was driving in an unfamiliar area of Little Rock searching for the house of a friend. She had slowed or stopped a time or two looking for a street when she was struck from behind by appellee Stephen Schulte, driving a large pickup truck of appellee Landscape Design and Construction. Liability was not admitted, but not seriously disputed. Mrs. Kempner brought this action for personal injuries for $124,000, alleging medical expenses of $3,000 incurred and $20,000 in the future. The jury awarded Mrs. Kempner $750 and she appeals from the trial judge’s denial of her motion for a new trial.

Error in the assessment of the amount of recovery, whether too large or too small, is a ground for new trial even in the absence of other trial error. ARCP Rule 59(a)(5); Younts v. Baldor Elec. Co., 310 Ark. 86, 832 S.W.2d 832 (1992). When a motion for new trial has been denied and the primary issue is the alleged inadequacy of the award, the Court will sustain the denial unless there is a clear and manifest abuse of discretion. Rathbun v. Ward, 315 Ark. 264, 866 S.W.2d 403 (1993); Younts, supra.

In Warner v. Liebhaber, 281 Ark. 118, 661 S.W.2d 399 (1983), we engaged the issue of inadequacy of the award. We wrote:

Under ARCP Rule 59(a)(5), the inadequacy of the recovery is a ground for a new trial even in the absence of other error. We sustain the trial judge’s denial of a new trial when the verdict is supported by substantial evidence and when, as is the ususal case, the primary issue is that of liability. Ferrell v. Whittington, 271 Ark. 750, 610 S.W.2d 572 (1981). But when the primary issue is whether the award is adequate the test of substantial evidence is hardly appropriate, for even a very small award would ordinarily have at least some basis in substantial evidence. Consequently, when the only argument on appeal is the inadequacy of the award, we think our rule should be to sustain the trial judge’s denial of a new trial absent a clear and manifest abuse of discretion, a standard of review similar to that we follow when the primary issue is liability and the trial judge has granted a new trial. See Landis v. Hastings, 276 Ark. 135, 633 S.W.2d 26 (1982).

Mrs. Kempner testified she visited Dr. David Lay on August 7, 1990. Dr. Lay stated in his deposition that Mrs. Kempner had no specific complaints when she visited his office. She informed him she had recovered “fairly well” from the accident. Mrs. Kempner reported that a day or so after the accident she developed some neck and back pain, stiffness and soreness, which he considered common after an automobile accident. Dr. Lay did not anticipate any permanent problems.

In early October, Mrs. Kempner visited Europe for two weeks. She testified her neck bothered her and she was sore all the time during her trip. She visited Dr. Warren Boop, a professor of neurosurgery at the University of Arkansas Medical Center, on October 30, 1990, and December 4, 1990. He found she had a flexion extension injury of her cervical spine and prescribed physical therapy. However, other than her statement, he had no way of relating her problem to the automobile accident. Ms. Kempner visited Dr. Boop for a follow-up examination in January of 1992, incurring expenses of $187.15 in relation to these visits. In November of 1990, Mrs. Kempner received physical therapy treatments from Baptist Rehabilitation Institution, incurring $1,338.50 in expenses.

On July 2, 1991, Mrs. Kempner consulted Dr. Douglas Stevens, a clinical psychologist. He found Mrs. Kempner was having stiffness in her neck as a result of a phobic anxiety concerning driving. Mrs. Kempner had a total of five one hour sessions, with the last session taking place in September of 1991, incurring a total charge of $450. Dr. David Lay stated that Mrs. Kempner had some very obvious anxiety and panicky behavior when he observed her driving during the summer of 1992.

Mrs. Kempner maintains she proved $2,159.65 in medical expenses. In addition, Mrs. Kempner sought damages for pain and suffering and future medical expenses. There was no proof as to the amount of property damage to Mrs. Kempner’s vehicle.

In review of a trial court’s discretion in denying a new trial because of alleged inadequacy, an important consideration is whether a fair-minded jury might reasonably have fixed the award at the challenged amount. Smith v. Petit, 300 Ark. 245, 778 S.W.2d 616 (1989). Further, the jury is the sole judge of the credibility of the witnesses and of the weight and value of their evidence. It may believe or disbelieve the testimony of any one or all of the witnesses, though such evidence is uncontradicted and unimpeached. Olmstead v. Moody, 311 Ark. 163, 842 S.W.2d 26 (1992).

Viewing the facts in the light most advantageous to the appellee, there was evidence from which a fair-minded jury might reasonably have concluded that the amount of medical bills incurred prior to her trip to Europe was the only damage suffered by Mrs. Kempner. She made only one visit to a physician during the two month period between the accident and her trip to Europe, and there was no proof as to the expense of the visit. Further, the jury may well have decided it was neither reasonable nor necessary for her to visit the clinical psychologist or neurosurgeon nearly three months after the accident. See generally Fields v. Stovall, 297 Ark. 402, 762 S.W.2d 783 (1989).

In Warner v. Liebhaber, mentioned above, we said the jury’s verdict was understandable and defensible, affirming the denial of a motion for new trial. There the jury could have found that Mrs. Warner was not seriously injured in the collision. There was no apparent damage to her vehicle and no issue of property damage was submitted to the jury. Second, we said the jury could have found that Mrs. Warner’s principal items of damage, i.e., medical expenses, were not attributable to whatever pain she may have suffered. She had undergone surgery for a ruptured disc three months prior to the accident, and one of her doctors testified her problems were psychological. This court noted the jury was instructed to consider the possible aggravation of pre-existing conditions; however, the jury did not see fit to attribute all her medical expenses to whatever injury she may have sustained in the collision.

In this case, it is clear the jury did not see fit to attribute all her medical expenses and pain and suffering to whatever injury she may have sustained in the collision. See Gilbert v. Diversified Graphics, 286 Ark. 261, 691 S.W.2d 162 (1985). The fact that medical expenses have been incurred by a plaintiff and the fact that liability is disputed does not mandate an award equal to those expenses. Kratzke v. Nestle-Beich, Inc., 307 Ark. 158, 817 S.W.2d 889 (1991). The reasonableness and necessity of medical expenses are questions of fact to be decided by the jury. Roy v. Atkins, 276 Ark. 586, 637 S.W.2d 598 (1982).

Mrs. Kempner contends counsel for the appellee engaged in an improper closing argument. Counsel suggested to the jury that since Mrs. Kempner had little or no complaint for some two months after the accident leading up to her trip to Europe in October, that something may well have happened during the trip. He argued, on that supposition, that Mrs. Kempner had a “five hundred dollar case” for the clinic visit to Dr. Lay and the two or three days that she had problems prior to her trip to Europe. The appellant, however, made no objection at trial. Thus, the issue is not preserved for appeal. Haynes v. State, 314 Ark. 354, 862 S.W.2d 275 (1993). The appellant contends the remarks constitute plain error; however, we do not recognize the doctrine of plain error. Security Pac. Housing Servs. v. Friddle, 315 Ark. 178, 866 S.W.2d 375 (1993).

Under the circumstances, we cannot say the trial court clearly and manifestly abused its discretion in denying a new trial. The judgment is affirmed.

Glaze, J., not participating.


source: Caselaw Access Project

author: David Newbern, Justice. Robert L. Brown, Justice,

license: Public Domain

text:
    AMERICAN HEALTH CARE PROVIDERS, INC. v. Michael U. O’BRIEN and Carla O’Brien
    93-1406
    886 S.W.2d 588
    Supreme Court of Arkansas
    Opinion delivered October 31, 1994

      Sam Sexton, Jr., for appellant.

      David Hodges and Jefferson Faught, for appellees.
   David Newbern, Justice.

Michael U. O’Brien and Carla O’Brien, who are husband and wife, sued American Health Care Providers, Inc., (AHCP), claiming breach of contract and the tort of bad faith. The O’Briens claimed that AHCP, a health maintenance organization, had breached its agreement to pay health care benefits incurred by the O’Briens and their three children.

The Trial Court directed a verdict in favor of AHCP on the bad faith claim but allowed the breach of contract claim to be decided by a jury which awarded $10,427.98 to Carla O’Brien. Judgment was entered for that amount plus fees of $5000 and $1250, respectively, to the two attorneys representing the O’Briens. AHCP appeals from the judgment in favor of Ms. O’Brien and from the refusal of the Trial Court to grant a new trial. The O’Briens cross-appeal from the directed verdict on their bad faith claim. In its appeal, AHCP states a number of points, one of which has merit. We must reverse the judgment due to insufficient evidence in support of it. In view of our reversal of the damages award, we also reverse the attorney’s fee award. Brookside Village Mobile Homes v. Meyers, 301 Ark. 139, 782 S.W.2d 385 (1990). On the cross-appeal, we affirm.

On April 1, 1987, Maxicare Arkansas, Inc., contracted with the City of Ozark to provide HMO health care protection to the employees of the City of Ozark on a year to year basis. On October 1, 1988, AHCP acquired the assets and liabilities of Maxi-care and continued to provide HMO health care protection.

As employees of the City of Ozark, Carla and Michael O’Brien began coverage under the group contract in 1989. They were each issued a member identification card to be presented to the health care providers when medical services were received. On each card there was a membership identification number.

In May 1989 Carla was diagnosed as having breast cancer. Medical services covered by the contract were provided to her and paid for by AHCP. On April 30, 1991, AHCP terminated the group contract with the City because there were fewer than 10 employees in the covered group. Michael O’Brien applied to AHCP to convert his membership from the AHCP City of Ozark Plan to an AHCP individual HMO membership which would provide health care to him and members of his family. His application was accepted by AHCP, and the family thus remained in an AHCP HMO although under terms different from the city plan.

After cancellation of the city group contract as of April 30, 1991, and the conversion to the individual contract, the O’Briens were assigned a new AHCP identification number. There is conflicting evidence as to whether the O’Briens received a new membership card with their new identification number.

The O’Briens experienced difficulty in getting various medical bills paid by AHCP. Pharmacy bills, which had been covered under the group plan but which were not covered under the individual plan, were submitted but not paid. The O’Briens received notice that some other claims were not being paid by AHCP because their coverage had ceased April 30, 1991, the date the group coverage was terminated. Other notices were received to the effect that claims were not being honored because the O’Briens had not received a referral from their primary care physician as required by AHCP.

In April 1992 the O’Briens brought the action which underlies this appeal and cross-appeal. AHCP moved to dismiss the bad faith claim on the basis that HMOs are not insurance companies and are not subject to the tort of bad faith. The motion was denied. AHCP moved for summary judgment supported by an affidavit and company records showing that it had paid all claims covered by the agreement. That motion was also denied, and the case proceeded to trial.

1. Bad faith

We are confronted at the outset with AHCP’s contention that an HMO is not the same as an insurer and is thus not capable of the tort of bad faith. We have thus far limited the tort of bad faith to insurers, Quinn Cos. v. Herring Marathon Group, Inc., 299 Ark. 431, 773 S.W.2d 94 (1989); Aetna Cas. & Sur. Co. v. Broadway Arms Corp., 281 Ark. 128, 664 S.W.2d 463 (1983), and we have said that an HMO is different from an insurer, at least to the extent that HMOs are not governed by the general provisions of the Arkansas Insurance Code. HMO Arkansas, Inc. v. Dunn, 310 Ark. 762, 840 S.W.2d 804 (1992).

But whether an HMO should be subjected to liability for bad faith refusal to pay claims, as insurers are, is a question we need not answer in this case because the Trial Court properly found there was no evidence of bad faith as we have described the tort. In Aetna Cas. & Sur. Co. v. Broadway Arms Corp., 281 Ark. 128, 664 S.W.2d 463 (1983), we summarized some previous cases recognizing the tort of bad faith and described it as follows:

[A] liability insurance company can be held accountable in tort for failure to settle a claim within the policy limits. . . . [A] claim based on the tort of bad faith must include affirmative misconduct by the insurance company, without a good faith defense, and that the misconduct must be dishonest, malicious, or oppressive in an attempt to avoid its liability under an insurance policy. Such a claim cannot be based upon good faith denial, offers to compromise a claim or for other honest errors of judgment by the insurer. Neither can this type claim be based upon negligence or bad judgment so long as the insurer is acting in good faith. . . . [I]n an action of this type for tort, actual malice is that state of mind under which a person’s conduct is characterized by hatred, ill will or a spirit of revenge. Actual malice may be inferred from conduct and surrounding circumstances.

Although the O’Briens list 63 instances of alleged wrongdoing on the part of AHCP, which we will not repeat because to do so would unduly lengthen this opinion, none of them rises to the level of bad faith. The most serious of the allegations, in our view, is that AHCP treated Carla O’Brien well when she was healthy but gave the O’Briens trouble in paying their claims after she was diagnosed as having cancer. The evidence was, however, that AHCP paid many of her medical expenses after Carla O’Brien had been diagnosed as having cancer. While it seems strange that it took a long time to straighten it out, the evidence shows that many, if not most, of the problems were the result of the changed identification number.

Other allegations include statements that AHCP improperly refused payment for an emergency room visit on the ground that there had been no true “emergency,” failure to provide the O’Briens with a copy of the “policy” covering them, failure to honor claims because of lack of proper referral by a primary health care physician, and “dumping” Carla O’Brien on Medicare when she became eligible for that program.

We have no doubt that the O’Briens were subjected to a nightmarish red tape experience at a time when their family’s financial and emotional resources were heavily taxed by Mrs. O’Brien’s serious illness. We cannot say, however, that the conduct of AHCP amounted to “bad faith” as we have defined it. There was obvious confusion caused by the change in identification numbers. Equally obvious was confusion on the part of the O’Briens and AHCP over the referral process, given the need for involvement of doctors of various specialties after Mrs. O’Brien underwent mastectomies. As far as we can tell, however, the closest an AHCP employee came to demonstrating any malice was when, after numerous inquiries, an employee told Carla O’Brien that the company required higher premiums from them after the cancellation of the group plan and that was “just the way it was,” and if the O’Briens were not happy about it they could obtain insurance elsewhere.

None of the items listed demonstrated misconduct in circumstances of such a nature as to show malice. We cannot say the Trial Court erred in directing a verdict on the bad faith claim. As there was insufficient evidence to go to the jury on that claim had it been lodged against an insurance company, we need not decide whether it was proper for the Trial Court to refuse to dismiss the claim with respect to an HMO pursuant to Ark. R. Civ. P. 12(b)(6).

2. Breach of contract

We are precluded from reviewing the Trial Court’s denial of AHCP’s motion for a directed verdict on the breach of contract claim because AHCP’s abstract does not demonstrate that the motion was renewed at the close of the evidence and the question is thus waived. Ark. R. Civ. P. 50(e); Willson Safety Prods. v. Eschenbrenner, 302 Ark. 228, 788 S.W.2d 729 (1990). Nor will we consider the argument that the Trial Court improperly denied AHCP’s motion for summary judgment, as that is not an appealable matter. Rick’s Pro Dive ‘N Ski Shop, Inc. v. Jennings-Lemon, 304 Ark. 671, 803 S.W.2d 934 (1991). We do consider, however, the Trial Court’s refusal to grant a new trial.

When a trial court denies a motion for a new trial on the ground that the verdict was not clearly contrary to the preponderance of the evidence, the test on appeal is whether there is substantial evidence to support the jury verdict. We must view the evidence in the light most favorable to the party against whom the motion was made and must affirm if there was any substantial evidence to support the verdict. Substantial evidence is that evidence which is of sufficient force and character to compel a conclusion one way or another. It must force the mind to pass beyond suspicion and conjecture. First Marine Ins. Co. v. Booth, 317 Ark. 91, 876 S.W.2d 255 (1994).

The damages claimed for breach of contract arose from four major bills Mr. O’Brien alleged were not paid by AHCP. Those bills are from Fort Smith Service Finance, a collection agency, for $1,108.78, Sparks Hospital for $1,282.62, Holt-Krock Clinic for $3,172.00, and Home Oxygen Medical for $3,752.22. The bills were not offered into evidence, and Mr. O’Brien admitted on cross-examination that he did not know whether they had or had not been paid by AHCP, and he admitted on cross-examination that some of them had dates showing they were incurred after coverage had terminated due to failure to pay the premium. All we have in support of the damages based on those bills is the testimony of Mr. O’Brien. On direct examination he testified that the four major bills were outstanding and should have been paid by AHCP. On cross-examination, he said he did not know if they had been paid and he admitted clearly that some of them were for services rendered after coverage ceased. In these circumstances, his testimony is not sufficient to constitute substantial evidence that the bills were outstanding and to be paid by AHCP pursuant to their HMO agreement.

Mr. O’Brien was allowed to testify with respect to a number of smaller bills which he paid and which he contends should have been paid by AHCP. Copies of those bills were introduced into evidence along with an adding machine tape showing a total of $1,112.36. Upon examination of the supporting bills, it is apparent that some of them were for charges which were incurred after the termination of coverage, some were for pharmacy charges which were admittedly not covered, and at least one was clearly for a co-payment for which the O’Briens, rather than AHCP, were responsible.

There is simply no evidence from which a reasonable conclusion could be reached that the O’Briens were entitled to the verdict awarded in this case, thus the motion for a new trial should have been granted.

This case presents a somewhat peculiar procedural situation. The failure to present sufficient evidence on the bad faith claim results in affirmance of a directed verdict. The failure to present sufficient evidence on damages with respect to the contract claim results in reversal of the Trial Court’s overruling of a new trial motion. That is so because of the posture of the case as presented by the AHCP. Its complaint about the contract damages took the form of a motion for new trial in accordance with Ark. R. Civ. P. 59(a)(5), and that resulted in its point on appeal requesting a new trial because of error in the assessment of damages.

Had this case been decided entirely by jury verdict, we would remand it for a new trial on all issues because we do not divide a jury verdict. Smith v. Walt Bennett Ford, Inc., 314 Ark. 591, 864 S.W.2d 817 (1993); Manzo v. Boulet, 220 Ark. 106, 246 S.W.2d 126 (1952). We may remand only one of two claims for a new trial when doing so does not divide a jury verdict. Westinghouse Credit Corp. v. First Nat’l Bank of Green Forest, 241 Ark. 287, 407 S.W.2d 388 (1966). As we are affirming the directed verdict on the bad faith claim due to lack of substantial evidence in support of it, we remand only the contract claim for a new trial. As the bad faith claim may not be retried, the evidence relevant to bad faith, which AHCP claimed to have affected the contract damages award, will not be before the jury.

Reversed and remanded.

Brown, L, dissents.

Robert L. Brown, Justice,

dissenting. American Health Care moved to dismiss the bad faith claim on the basis that such claims cannot be brought against HMO’s. The trial court denied the motion, and the O’Briens were allowed to present their bad faith claim at trial. After proof of bad faith was presented, the trial court granted American Health Care’s motion for a directed verdict on that claim. The majority holds that this rendered moot any error that might have accompanied the original denial of the motion to dismiss. I do not agree.

The trial court’s denial of the motion to dismiss allowed bad faith evidence to be presented to the jury in addition to proof of breach of contract. If American Health Care is right and there can be no claim for bad faith against an HMO, the company was prejudiced by the bad faith evidence which should not have been presented at the trial of the contract claim. Evidence of mental anguish and the like undoubtedly had some spillover effect on the jury and on its assessment of the contract claim. This is so even though the trial court ultimately decided that the proof submitted was not sufficient to support a claim of bad faith.

This court should decide whether a bad faith claim may be appropriately lodged against an HMO, and I would do so in this case. If a bad faith claim can be presented, no prejudice resulted to American Health Care at trial. But if a bad faith claim does not lie against an HMO, American Health Care was prejudiced, and the case should be remanded for a new trial on that basis.

Because I do not believe that this case can be decided without reaching the bad faith/HMO issue, I respectfully dissent.


author: David Newbern, Justice.

text:
    Darrell Lee McFARLAND v. Judy Carol McFARLAND
    94-288
    885 S.W.2d 897
    Supreme Court of Arkansas
    Opinion delivered October 31, 1994

      Shock, Harp, & Associates, by: J. Randolph Shock, for appellant.

      Bethel & Cromwell, by: Jan Cromwell, for appellee.
   David Newbern, Justice.

Darrell Lee McFarland, the appellant, and Judy Carol McFarland, the appellee, are divorced from each other. They have two children. When one of the children reached age 18 Mr. McFarland petitioned the Court which had rendered the divorce to terminate his support obligation for that child. He also asked that the divorce decree be modified to state that his obligation to support a younger child would terminate upon that child reaching age 18. Ms. McFarland resisted the modification, contending that the younger child had been held back in school, would not graduate from high school until about a year after reaching age 18, and would need support until that time.

The Chancellor declined to modify the decree in the way Mr. McFarland asked. Mr. McFarland argues here, as he did to the Chancellor, that a statute which permits a court to require child support past majority while the child remains a high school student is unconstitutional. We agree with the Chancellor’s conclusion that the statute is not unconstitutional, and thus we affirm his decision.

In Matthews v. Matthews, 245 Ark. 1, 430 S.W.2d 864 (1968), a noncustodial father sought to have his support obligation terminated when his daughter turned 18, rather than when she finished high school six months later. We said that if the Chancellor terminated support when the child reached 18 it could be assumed she would be forced to drop out of high school to support herself, “there being no obligation on the part of either parent for her continued maintenance.” We said it was proper to require the father to continue support payments until his daughter finished high school because “a high school diploma is of almost inestimable value to a young person who seeks to make his or her own living.”

The holding in the Matthews case was apparently codified in Ark. Code Ann.§ 9-12-312(a)(5)(A) (Repl. 1993) as follows:

The court may provide for the payment of support beyond the eighteenth birthday of the child to address the educational needs of a child whose eighteenth birthday falls prior to graduation from high school so long as such support is conditional on the child remaining in school.

Mr. McFarland contends the statute violates the due process and equal protection clauses of the United States and Arkansas Constitutions. He argues that his right to direct the care and upbringing of his child is a fundamental right, therefore warranting analysis under the “strict scrutiny” standard. In the alternative, he claims the classification made between divorced noncustodial parents and married and custodial parents is not rationally related to a legitimate government purpose. His argument is that, if the State’s interest in educating children is to be enforced against a divorced, noncustodial parent, it should be enforced against married and custodial parents as well.

1. Strict scrutiny

Mr. McFarland argues that a parent has a fundamental liberty interest in the care and upbringing of his or her child. He cites several cases that have declared parental rights protected by both the due process and equal protection clauses. The cases involve matters where a parent has been deprived of custody of a child, or where the child’s name has been changed without notice to the parent. See Bynum v. Savage, 312 Ark. 137, 847 S.W.2d 705 (1993); Davis v. Smith, 266 Ark. 112, 583 S.W.2d 37 (1979); Carroll v. Johnson, 263 Ark. 281, 565 S.W.2d 280 (1978).

In the Davis case we said, “Certainly there remains no lingering doubt about the fact that the rights of parents to the care, custody, and upbringing of their children are the subject of constitutional protection on both due process and equal protection standards.” The opinion also stated that “Parental rights are not, however, beyond limitation in the public interest. The State’s constitutional interest extends to the welfare of the child. Parental rights are not immune from interference by the State in its role of parens patriae.”

The cases on which Mr. McFarland relies are ones in which a parent has sought to exercise the parental role rather than to terminate, curtail, or forsake it. Even if it can be said that § 9-12-312(a)(5)(A) interferes somewhat with Mr. McFarland’s ability to make decisions regarding his son’s support, the interference clearly is not as great as in situations where a parent is deprived custody of a child by an action of the State. If we are to balance the interests involved in applying the due process standard, minimal interference with the parental “right” to stop supporting a child is warranted by the State’s interest in seeing that the child obtains at least a high school education.

Other jurisdictions have decided cases involving a noncustodial parent’s obligation to pay support beyond a child’s majority, in order to meet various college expenses. In dealing with equal protection challenges in this context, none of these cases have found there was a fundamental right that warranted analysis under the strict scrutiny standard. See In re Marriage of Vrban, 293 N.W.2d 198 (Iowa 1980); Birchfield v. Birchfield, 417 N.W.2d 891 (S.D. 1988).

2. Rational basis

The alternative argument urges us to find that there is no rational basis for the State’s imposition of a duty to support adult children on noncustodial parents when no such duty is placed upon married and custodial parents. Mr. McFarland does not question the State’s interest in providing a high school education for its citizens.

Mr. McFarland’s position is that the statute requires him to support his adult child but leaves the matter of support in similar circumstances to the consciences of married parents or custodial divorced parents. The use of the word “custodial” with respect to a divorced parent of a child who has reached age 18 implies that parent continues to support the child into majority. Mr. McFarland does not demonstrate or argue that Ms. McFarland is not continuing to support the younger child or that she might not be required to do so until the child finishes high school. Neither party addresses the question whether § 9-12-312(a)(5)(A) might require a “custodial” parent of an adult child to render support until the child finishes high school. That question remains to be resolved another day. That leaves for determination whether there is a rational basis for the distinction drawn by the statute between a divorced parent and married parents.

The Iowa Supreme Court in In re Marriage of Vbran, supra, faced the question whether there was a rational basis for a statute requiring a divorced, noncustodial parent to support an adult offspring attending college. The Iowa Statute, Section 598.1(2), provided the court could require support for a child between the ages of 18 and 22 “who is ... in good faith, a full-time student in a college, university, or area school. . . .” The noncustodial father argued there was no statute requiring a married, custodial parent to do likewise and there was no rational basis for such a classification. Here is what the Iowa Court said:

Clearly higher education is a matter of legitimate state interest.
However, this alone does not settle the issue raised. The further —■ and determinative — question is this: Does section 598.1(2) bear a rational relationship to this state interest and, if so, is the distinction drawn between the classes arbitrary or unreasonable?
The respondent argues that divorced parents are arbitrarily ordered to support their adult children in order to accomplish this stated purpose while no similar requirement is imposed upon married parents. However, this does not necessarily make the classification arbitrary or unreasonable. The statute was designed to meet a specific and limited problem, one which the legislature could reasonably find exists only when a home is split by divorce. Childers v. Childers, 89 Wash.2d 592, 600-602, 575 P.2d 201, 207 (1978); R. Washburn, Post-Majority Support: Oh Dad, Poor Dad, 44 Temple L.Q. 319, 329 n.55 (1971).
The legislature could find, too, that most parents who remain married to each other support their children through college years. Making It: A Guide to Student Finances 23 (A. Johnson ed. 1973); R. Freeman, Crisis in College Finance? Time for New Solutions 100 (1965); S. Harris, A Statistical Portrait of Higher Education 100, 114-23 (1972). On the other hand, even well-intentioned parents, when deprived of the custody of their children, sometimes react by refusing to support them as they would if the family unit had been preserved. Childers v. Childers, 89 Wash.2d 592, 602-604, 575 P.2d 201, 208 (1978).
The legislature could consider these facts and decide there is no necessity to statutorily require married parents to support their children while attending college but that such a requirement is necessary to further the state interest in the education of children of divorced parents. The differences in the circumstances between married and divorced parents establishes the necessity to discriminate between the classes. The statute is neither arbitrary nor unreasonable. See Redmond v. Carter, 247 N.W.2d 268, 271 (Iowa 1976).

We agree with the Iowa Court’s statement. We presume the statutes passed by the General Assembly are not unconstitutional, Citizens Bank v. Estate of PettyJohn, 282 Ark. 222, 667 S.W.2d 657 (1984), and we will uphold a classification in the face of an equal protection allegation if there is any basis for the classification. Hamilton v. Hamilton, 317 Ark. 572, 879 S.W.2d 416 (1994). The State’s interest in education of its citizens and the likelihood that a child of divorced parents may have a more difficult time obtaining support in the process of obtaining an education provides a sufficient basis for the classification between divorced, noncustodial parents and married, custodial parents.

Affirmed.


text:
    Hilda WILLIAMS, Special Administratrix v. NUCOR-YAMATO STEEL COMPANY et al.
    93-1365
    886 S.W.2d 586
    Supreme Court of Arkansas
    Opinion delivered October 31, 1994

      Daniel G. Ritchey, for appellant.

      Reid, Burge, Prevallet & Coleman, by: Robert L. Coleman, for appellee.
   David Newbern, Justice.

In this wrongful death case, a summary judgment was entered in favor of the defendant, now appellee, Nucor-Yamato Steel Company (Nucor). The decedent, Dearl Dean Williams, was an employee of Cache Valley Electric Company (Cache). Cache had been hired to do electrical work in the construction of a Nucor mill. Mr. Williams died from electrocution as he was attempting, with other Cache employees, to ground a fence surrounding an electrical substation at the mill. A copper wire held by Mr. Williams accidentally touched a feeder lug energized with 34,500 volts.

Hilda Williams, the appellant, brought the wrongful death action as Mr. Williams’s personal representative, making a number of specific allegations which may be summarized to say that Nucor failed in its duty to supervise, warn of danger, implement safety precautions, and use ordinary care. Based on an affidavit and discovery responses, the Trial Court concluded summary judgment should be granted in Nucor’s favor because, in its contract with Cache, Nucor retained no control over the work or authority to supervise the employees doing it. We affirm the judgment.

The contract between Nucor and Cache obligated Cache to construct the electrical substation. It provided that Cache was to provide “all of the labor, equipment, and supervision necessary to perform all the work required,” and that Cache would be responsible for “qualified supervision and necessary craftsmen.” Cache was to take “all reasonable precautions for the safety of all employees on the work.” It gave Nucor the right to establish priorities for the work and stated that Cache would “commence work so as to complete the individual phases of the project” as outlined by Nucor.

An affidavit of Nucor’s construction manager stated he depended on Cache to perform the work and see that safety measures were followed without supervision or interference from Nucor and that Nucor did not have any supervisory responsibility for the details of the work nor did it exercise or attempt to exercise any such control.

Depositions of Mr. Williams’s fellow journeyman electricians were to the effect that they were supervised by Cache supervisors and that they had been warned that the substation had been energized and to be very careful while working around it on the day Mr. Williams died. One worker said, in his deposition, that Nucor personnel were present at the site, there was a great deal of pressure being put on Cache by Nucor to hurry the project, and the pressure was passed on to the workers by Cache supervisors. He did not say, however, that Nucor personnel supervised or controlled the work. He said the supervision came from Cache personnel.

When an owner or general contractor has hired an independent contractor to perform work, as in this case, the rule is that the general contractor or owner has

a duty to exercise ordinary care and to warn in the event there are any unusually hazardous conditions existing which might affect the welfare of the employees. The recognized exception occurs if the prime contractor [or owner] has undertaken to perform certain duties or activities and negligently fails to perform them thereafter or performs them in a negligent manner. Aluminum Ore Co. v. George, 208 Ark. 419, 186 S.W.2d 656 [(1945)].

Gordon v. Matson, 246 Ark. 533, 439 S.W.2d 627 (1969).

When, as in this case, there is no demonstration of an exercise of actual control or violation of the duty to warn by the one engaging an independent contractor to perform work, we have turned to the contract to see if the prime contractor or owner retained the right of control or supervision and thus assumed an additional duty or care toward employees doing the work. When there is no such right retained in the contract, we affirm a summary judgment entered in favor of the owner or prime contractor. Davis v. Lingle Corp., 277 Ark. 303, 641 S.W.2d 27 (1982); Gordon v. Matson, supra.

The primary citation offered by Ms. Williams is our recent decision in Elkins v. Arkla, Inc., 312 Ark. 280, 849 S.W.2d 489 (1993). Arkla hired Daniel Utility Construction Co. (Daniel) to lay pipe. A Daniel employee was asphyxiated when a trench in which he was working caved in. We reversed a summary judgment the Trial Court had awarded in Arkla’s favor because we found the contract between Arkla and Daniel left a genuine issue of material fact concerning the degree to which Arkla had retained the right of supervision of Daniel employees working on the project.

In the Elkins case we quoted general authority from Restatement (Second) of Torts § 414 (1965), which is consistent with the cases cited above, to the effect that the entrusting of work to an independent contractor does not remove the duty of reasonable care from one who retains control of any part of the work. We noted particularly Comment c.

In order for the rule stated in this Section to apply, the employer must have retained at least some degree of control over the manner in which the work is done. It is not enough that he has merely a general right to order the work stopped or resumed, to inspect its progress or to receive reports, to make suggestions or recommendations which need not necessarily be followed, or to prescribe alterations and deviations. Such a general right is usually reserved to employers, but it does not mean that the contractor is controlled as to his methods of work, or as to operative detail. There must be such a retention of a right of supervision that the contractor is not entirely free to do the work in his own way.

We pointed out several sections in the contract between Arkla and Daniel which indicated some control was retained by Arkla including a rather direct statement in the contract that Arkla’s engineer or inspector was to “have general supervision and direction of the work.” There are no such provisions in the contract between Nucor and Cache. Rather, the contract appears to have been drafted carefully to assure that all control and supervision other than priorities of projects remained with Cache and not with Nucor.

Although we review summary judgment awards considering all proof in the light most favorable to the non-moving party, we do not reverse if there appears to be no remaining genuine issue of fact and if the moving party is entitled to judgment as a matter of law. Ark. R. Civ. R 56(c); Green v. National Health Laboratories, Inc., 316 Ark. 5, 870 S.W.2d 707 (1994). In this case, the summary judgment was proper.

Affirmed.


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

text:
    ARKANSAS BANK & TRUST COMPANY v. Lee DOUGLASS, Insurance Commissioner of the State of Arkansas, Arkansas State Association of Life Underwriters
    93-1242
    885 S.W.2d 863
    Supreme Court of Arkansas
    Opinion delivered October 31, 1994

      John Dewey Watson, Paul B. Benham III, and Robert S. Shafer, for appellant.

      Jean Langford for appellees.

      Michael G. Smith for Intervenors-Appellees, Independent Ins. Agents of Arkansas.

      Candace Franks for amicus curiae, Arkansas State Bank Dep’t.

      Robert M. Clearly, Jr., John Gill, and Michael F. Crotty, for amici curiae, American Bankers Ass’n and Arkansas Bankers Ass’n.
   Tom Glaze, Justice.

The appellant Arkansas Bank & Trust Company (ABT) is a state-chartered bank located in Hot Springs. Since its incorporation in 1907, ABT has been in the business of banking and the selling of full-line insurance policies through ABT Insurance Agency, a division of ABT. Because of a change in insurance law, ABT had to apply for a corporate-agency license which was issued by the appellee insurance commissioner in 1970. ABT was grandfathered under the new statutes prohibiting banks from engaging in full-line insurance business. While the individual employees who sold insurance policies on behalf of ABT were licensed prior to 1970, the insurance department did not issue licenses to corporate-agents prior to 1970.

In 1980, the stockholders of ABT formed ABT Bancshares, a one bank holding company, and transferred all their stock in ABT to Bancshares. As part of the bank, ABT insurance agency became a wholly-owned subsidiary of Bancshares. In 1983, First Commercial Corporation (FCC), a multi-bank holding company, became incorporated. On May 30, 1990, FCC acquired Bancshares by exchanging 1,090,836 of FCC common shares for all of the ABT shares held by Bancshares. As part of FCC, the ABT insurance agency became a part of the multi-bank group.

In 1992, FCC received a notice of hearing from the insurance department, advising ABT that the'purpose of the hearing was to determine if the corporate-insurance license issued in 1970 to ABT should be revoked. Appellee Arkansas State Association of Life Underwriters (ASALU) intervened in the administrative proceeding, arguing that ABT’s grandfathered license should be revoked as a result of the acquisition of Bancshares by FCC. Following a hearing, the commissioner issued an order permanently revoking ABT’s license. ABT appealed to the circuit court of Garland County which affirmed the commissioner without comment. Having obtained a stay of the commissioner’s order, ABT brings this appeal. The Arkansas State Bank Department, and the American Bankers and Arkansas Bankers associations have filed amici curiae briefs in favor of ABT.

Review of administrative agency decisions by both the circuit court and this court is limited in scope. The appellate court’s review is directed, not toward the circuit court, but toward the decision of the agency, and the construction of a statute by an administrative agency is not overturned unless it is clearly wrong. Douglass v. Dynamic Enterprises, Inc., 315 Ark. 575, 869 S.W.2d 14 (1994). However, where the statute is plain and unambiguous, this court will interpret the statute to mean only what it says. Junction City Sch. Dist. v. Alphin, 313 Ark. 456, 855 S.W.2d 316 (1993). In addition, this court will not substitute its judgment for that of the agency unless the agency’s decision is arbitrary and capricious. Dynamic Enterprises, Inc., at 575. Finally, the evidence is given its strongest probative force in favor of the agency’s ruling, and this court may not reverse the agency’s decision if there is any substantial evidence to support its decision. Id.; Brimer v. Ark. Contractors Licensing Board, 312 Ark. 401, 849 S.W.2d 948 (1993).

In its appeal of the commissioner’s decision, ABT relies on the following three points: (1) the statute which the commissioner relied on to revoke ABT’s insurance agency license is restrictive of ABT’s grandfather rights, penal in nature, in derogation of the common law, and must be strictly construed; (2) ABT has “great grandfather” rights under the statute and may maintain its insurance agency license, notwithstanding the acquisition of ABT Bancshares by FCC; and (3) the statute permits an exempt agency which is also a bank to be acquired by a bank holding company without losing its insurance agency license.

A number of statutory provisions control the issues raised in this cause, the first of which is Ark. Code Ann. § 23-64-203(a) (Supp. 1991), which provides in part as follows:

For the protection of the people of this state, the commissioner shall not issue, continue, or permit to exist any agent, broker, consultant, or solicitor license as to insurance other than life and disability, except in compliance with this chapterf.]

Further, the commissioner is authorized to promulgate regulations to effectuate the purposes of the statute which are “to help maintain the separation between lending institutions and the insurance business and to minimize the possibilities of unfair competitive and deceptive practices by lending institutions or their subsidiaries or affiliates affecting agents, brokers, or the public.” Ark. Code Ann. § 23-64-204(b)(5) (Supp. 1991). These code provisions also contain a general prohibition against the issuance of an insurance license to any lending institution, any subsidiary or affiliate of a lending institution, or to any officer or employee of a lending institution in any municipality with a population exceeding five thousand according to the latest federal decennial census. Ark. Code Ann. § 23-64-203(b) (Supp. 1991). In addition to providing exceptions which are not at issue here, these code provisions contain a grandfather clause — with certain limitations mentioned — for licensed agents employed in lending institutions. That grandfather clause provision provides as follows:

(1) However, a lending institution, a subsidiary, affiliate, officer, employee, or the holder of the control of a lending institution otherwise qualified may be issued a license to:
(C) Successor agents, brokers, and solicitors, who are otherwise qualified, as successors to those agents, brokers, and solicitors who are exempt from the restrictions set out in this section and their successors in turn, for so long as the lending institution agency with which the successor agent, broker, or solicitor is appointed is continuing to function as it was constituted on March 25, 1975, and no successor agent, broker, or solicitor is permitted to be employed or controlled directly or indirectly by any lending institution agency except that agency for which he was so licensed as a successor.

§ 23-64-203(b)(l)(C) (Emphasis added). In addition, § 23-64-203(b)(2) provides a qualified grandfather clause for corporate agencies such as ABT as follows:

For the purposes hereof, the subsequent transfer of ownership or control of a lending institution agency to other subsidiaries or affiliates of that lending institution with which the agency was associated on March 25, 1975, shall not prohibit the commissioner from granting renewals of or license to successor agents, brokers, and solicitors. (Emphasis added).

And finally, § 23-64-203(b)(3) is a provision acknowledging grandfathered lending institutions doing insurance business, but also spells out events that could cause such an institution to lose its grandfather status. Section 23-64-203(b)(3) reads as follows:

Likewise, nothing in this section shall restrict the expansion by the appointment of additional agents, brokers, and solicitors, by the acquisition through purchase or the merger and consolidation of an existing lending institution agency where the agency on March 25,1975, was operated as an individual proprietorship, a partnership or, if a corporate agency its capital stock was not owned by a lending institution and no part of the profits of the agency inured directly or indirectly to the benefit of a lending institution. However, those restrictions relative to the licensing of a lending institution agency, its agents, brokers, and solicitors, shall attach upon the transfer of the agency either by the transfer of ownership or the right of participation in the profits of the agency directly or indirectly to a lending institution. (Emphasis added).

For purposes of understanding the foregoing statutory provisions, a lending institution is defined as any entity which has a place of business in this state where it accepts deposits of money from the public and lends money, including banks and savings and loan associations. § 23-64-203(b)(4)(A). In addition, control is defined as the power to exercise a deciding influence over the management of a lending institution, unless power is solely the result of an official position with the lending institution. § 23-64-203(b)(4)(E).

First, ABT argues that, because FCC is a holding company and not a lending institution, acquisition of it by FCC did not divest ABT of its corporate-agency license under § 23-64-203(a) and (b) provisions, because those provisions do not address ownership by a holding company. (But see § 23-64-203(b)(l) discussed below.) In support of its argument, ABT cites Glastonbury Co. v. Gillies, 209 Conn. 175, 550 A.2d 8 (1988), wherein the Connecticut insurance commissioner rescinded a bank subsidiary’s, Glastonbury Company’s, grandfathered status to sell insurance. Connecticut law prohibited bank subsidiaries from obtaining insurance licenses, but banks lawfully licensed to sell insurance when the law went into effect could continue in the insurance business. While Glastonbury qualified for grandfathered status, it subsequently sold its insurance business and did not seek relicensing. After ten years passed, Glastonbury was relicensed to sell insurance, but the Connecticut insurance commissioner rescinded the license, stating he had erred. The commissioner explained that Glastonbury lost its exempt status because it failed to hold its license continuously. The trial court disagreed, and the Connecticut Supreme Court upheld the trial court’s holding that the Connecticut law was not ambiguous and that the grandfather clauses did not impose a requirement of continuous licensure. In doing so, the Connecticut court held that it must apply statutory enactments according to their plain terms; it concluded that if the state’s legislature had desired a continuous licensure requirement, the legislature could have inserted it into the law.

The Glastonbury case is readily distinguishable from the present case, if for no other reason than Arkansas’s statutory provisions set out above do provide that certain conditions must continue in order for a lending institution to remain licensed to sell insurance. For example, ABT was grandfathered to continue to sell insurance so long as it continued to function as it was constituted on March 25, 1975. See § 23-64-203(b)(l)(C). Also, ABT would become subject to the license restrictions to lending institutions if its ownership was transferred or it transferred participation in its profits directly or indirectly to a lending institution. See § 23-64-203(b)( 1 )(C) and -203(b)(3). We turn now to those pertinent facts and evidence bearing on these statutory conditions required for ABT’s continued grandfather status.

The Arkansas insurance commissioner found that on May 30, 1990, FCC acquired ABT Bancshares by exchanging 1,090,836 of FCC common shares for one hundred percent (100% of 116,596) of the ABT shares. Bancshares was created solely as a one-bank holding company for ABT’s stock, and performed no other functions. Thus, one hundred percent of the ownership of ABT, including the ABT insurance agency, passed to FCC essentially as ABT existed when it was first licensed.

At the time of the transfer to FCC, FCC was a multi-holding company for other lending institutions and ABT became part of that affiliate group, which the commissioner characterized as a “multi-bank or multi-lending group.” Management and supervisory authority over the lending institutions within the group, including ABT, is vested in FCC’s “Affiliate Bank Network.” As corporate parent of the group, FCC received income from the following two sources: (1) all of its subsidiary lending institutions provided a dividend to FCC in an amount equal to one-half of their pre-tax net earnings in each of the fiscal year’s first three quarters, and an adjusted fourth quarter dividend equal to all earnings in excess of seven per cent of capital from each subsidiary, and (2) service fees charged by FCC to its subsidiaries under “service agreements” for necessary services such as loan review, audit, and data processing. In 1991, all profits from the ABT insurance agency in excess of $100,000 were paid to FCC as a dividend which was pooled with dividends paid by the other subsidiaries to benefit the group and FCC’s shareholders. Witnesses for ABT admitted that the other lending institutions within the group “indirectly” shared in the profits of the ABT insurance agency.

Finally, the commissioner’s findings suggest that FCC functions more like a bank than as a holding company. His findings recited FCC’s 1990 Annual Report to Stockholders wherein FCC stated that “[w]hile many financial institutions in other parts of the country are under siege due to severe asset quality problems and resulting strains on liquidity and capital, FCC continues to be one of the safest and soundest banking organizations in the nation.” On appeal, FCC fails to show the findings of fact by the commissioner were in error or that the law prevents the commissioner from looking beyond the form of the organization to its substance.

This court generally defined “holding company” as “a super-corporation which owns or at least controls such a dominant interest in one or more corporations that it is enabled to dictate their policies through voting power; a corporation organized to hold the stock of other corporations.” Cheney v. Stephens, 231 Ark. 541, 549, 330 S.W.2d 949 (1960) (Citation omitted). In Cheney, this court looked to the record and to the articles of incorporation in determining whether Stephens’ activities were “merely acts of holding stocks in other corporations” or whether its activities were those of a corporation actively engaged in business. Id. at 550.

Here, there is substantial evidence to support the commissioner’s finding that FCC was actively engaged in more than merely holding stock in its subsidiary lending institutions. Ray Cash, an officer with ABT since 1960, testified that FCC had “infused $6 million plus into ABT.” Further, Cash testified that the intent of the merger of FCC and ABT was to achieve “an economy of scale” by the pooling of operations, and that ABT had experienced a reduction in costs as a result. Additionally, Cash testified “we are getting better expertise on some of our loan review areas and some of the other areas, that we didn’t have before the merger.” Cecil Cupp, Jr., chairman of ABT’s board and on FCC’s board of directors, testified that even though none of the affiliate lending institutions within the group have a contractual right to obtain dividends and profits from ABT insurance agency, there is indirect participation and benefit by those affiliates through the pooling of dividends. Lynn Wright, Jr., chief financial officer for FCC, testified that the sharing of expenses through FCC’s pooled operations “inures to the benefit of each of the subsidiaries as well as the acquired company.” Bobby Scott, a CPA, testified that upon review of various documents, he determined that ABT paid a dividend to FCC of $3.4 million in 1991 which was used to pay for the expenses of maintaining the pooled services provided by FCC to its subsidiaries, and that part of the dividend paid by ABT came from profits earned by ABT’s insurance agency. Finally, Jake Olson, Vice President and Manager of ABT’s insurance agency, testified as follows:

It used to be that the individual subsidiaries of [FCC] would obtain insurance coverages in their various municipal locations. Now there is a ‘consolidation process’ ongoing whereby all of the subsidiaries’s insurance business will be placed through our ABT Insurance Agency. Just the property and liability policy and the Directors and Officers liability policy should add about $540,000 in additional premium for our agency. (Emphasis added).

From the foregoing, it is clear that FCC is actively involved in the business of its affiliate lending institutions, and does more than merely hold their stocks or set policy through its voting power. FCC manages the pooled services, some of which are strictly services performed by a lending institution, such as loan review. Additionally, FCC dictates to the affiliates which services are to be pooled and their costs. Further, FCC determines the amount of dividends paid to it, when those dividends are to be paid, and how those are allocated back to the affiliates. Finally, the ABT insurance agency is to be used as a pool resource for the affiliates’ insurance needs under FCC’s management.

The language of § 23-64-203 (b) is clear and unambiguous, as indeed ABT concedes. With the 1990 merger, ABT changed from a corporation with its stock held by a shell corporation, Bancshares, to a subsidiary of a parent corporation actively involved in the business of its lending subsidiaries. The exchange of all of ABT’s shares for 1,090,836 common shares of FCC’s stock was a transfer of ownership and control. Further, FCC was actively involved in the business of its lending subsidiaries. Finally, the stock transfer resulted in the use of ABT insurance agency profits to benefit ABT’s affiliate lending institutions, and the right of those affiliates to participate in the profits of the agency indirectly through the pooled services and allocation of dividends controlled by FCC.

Next, in addition to its grandfather clause argument involving § 23-64-203(b) just discussed, ABT argues another provision, § 23-64-203(c), not yet mentioned, but through which it claims ABT was “great grandfathered.” Provision 203(c) provides as follows:

Notwithstanding the requirements contained in subsections (a) or (b) of this section, the commissioner may renew or continue the license of persons who, as of immediately prior to January 1, 1960, were lawfully licensed as agents or solicitors under laws then in force. All the licenses shall, however, be subject to the other applicable provisions of this code.

The commissioner held that: (1) this subsection was unavailable to ABT since it held no license prior to January 1, 1960, and no license was available to any corporate agency at that time; (2) the renewal of licenses under the subsection was discretionary and not binding on him; and (3) the subsection must be resolved within the interpretation of subsections (a) and (b) which were enacted in 1975.

The commissioner, in attempting to harmonize provisions § 203(a), (b) and (c), stated the following:

[T]he Legislature intended to prohibit the Insurance Commissioner from continuing the agent’s license of any subsidiary or affiliate of a lending institution ... with certain exceptions and caveats, including the “grandfathering” of certain agencies[.] It is equally clear when reading A.C.A. § 23-64-203 as a whole, and consistent with the purposes expressly set forth, that the Commissioner must view this entire area of banking and insurance relationships conservatively and with a leaning toward restricting rather than promoting the dangers perceived by the Legislature as being posed to the public by lending institution agencies. ... It is manifest that overall thrust of the legislation is to “freeze” the grandfathered lending institution agencies in the form that they existed on March 25, 1975.

(Emphasis in the original).

ABT’s response to the commissioner’s ruling on this point is that even if it loses its license under the other subsections of 203(a) and (b), this “great grandfather clause” under 203(c) saves it. While acknowledging it had not been granted a corporate license until 1970, ABT argues it had received a constructive license through its licensed employees in 1931 which continues through their successors to the present day. ABT argues that to interpret 203(c) any differently, and to require of it an express condition of holding an license at a time when corporate licensing was not available would deprive ABT of due process. Finally, ABT argues that the application of 203(c) to the circumstances in this case is not discretionary with the commissioner.

While distinguishable in part, this court addressed a similar issue in Simpson v. Monette State Bank, 238 Ark. 314, 381 S.W.2d 442 (1964). There, the bank commissioner instituted a declaratory action to determine whether a teller’s window operated by Monette Bank in another town could be forced to close and terminate business because a locally owned and full-service bank began doing business in the same town. At issue was a 1963 statutory provision that stated that no teller’s window “shall be continued at any place after a legally chartered bank has actually commenced business at that place.” Id. at 315. The bank argued that a grandfather clause enacted in 1961 allowed teller’s windows already in operation to continue to operate despite enactment of the 1963 statutory provision providing otherwise. Additionally, the bank argued that the grandfather clause gave it a vested right to continue the operation of its teller’s window. In rejecting the bank’s arguments, this court found a history of the legislation confirmed a consistent attitude of the legislature in encouraging organization and ownership of local banks by requiring the closure of teller’s windows when local banks were chartered. In rejecting the bank’s arguments, this court held such legislation was within the proper sphere of the state’s inherent police power. Further, because banking by corporation is only a privilege, the bank never possessed more than a conditional privilege which was constantly susceptible to immediate revocation. This view, too, is consistent with the discretionary language contained in 203(c) wherein the commissioner is instructed he “may” renew the license on persons who were licensed prior to January 1, 1960.

Like corporate banking, the business of insurance is subject to the mood of the legislature and is regulated by the Arkansas Insurance Code. But see Ark. Code Ann. §§ 23-60-103 — 104 (Repl. 1994) for exceptions. Any privilege previously granted by statute is subject to revocation by legislative amendment of the code.

Here, the commissioner found that the lending institutions within FCC have “the sort of ‘indirect’ right to participate in profits spoken of in the second sentence of § 23-64-203(b)(3) which, necessarily, means that its ‘full line’ grandfather protection must be lost.” Looking to the substance of the transactions between ABT and FCC rather than to the form and ignoring Bancshares as a corporate shell, the commissioner found that neither First Commercial Bank nor any of the other lending institutions within FCC could have directly purchased ABT without voiding ABT’s grandfather protection. Thus, the commissioner held that the indirect sharing of profits between the lending institutions within the FCC network resulted in a violation of the legislative intent to restrict ownership of full-line insurance agencies by lending institutions pursuant to § 23-64-203(b).

Next, ABT argues that based on the language of § 23-64-203(b)(3), it is exempted from the prohibition of the statute because neither Bancshares nor FCC are lending institutions within the definition provided in § 23-64-203(b)(4)(A). It argues neither Bancshares nor FCC accepts deposits of money from the public or lends money. Further, ABT argues that none of FCC’s subsidiaries have a right of participation in the profits from ABT including those of its insurance agency. ABT avers that the right to share in its profits flows up to its parent, FCC, and it is FCC which determines where those profits go and not the affiliates. Further, a dollar from ABT going to FCC cannot be traced to any other affiliate since the profits are pooled. Additionally, ABT argues the commissioner was wrong in piercing the corporate veil based strictly on public policy. Finally, ABT argues the commissioner misinterpreted § 23-64-203(b)(3) as a divestiture provision.

We previously touched upon ABT’s contention that the commission erred in piercing the corporate veil. However, it is necessary to discuss further the specific argument and authority put forth by ABT. In support of its argument, ABT cites Woodyard v. Ark. Diversified Ins. Co., 268 Ark. 94, 594 S.W.2d 13 (1980), where the subsidiary challenged piercing the corporate veil. There, the commissioner had ignored the corporate form of subsidiaries and found them essentially being used to avoid the effects of the statutes in issue by the parent corporation. In upholding the commissioner’s decision, this court stated that courts will ignore the corporate form of a subsidiary where fairness demands it. Further, this court stated that usually, this substance-over-form evaluation will occur where it is necessary to prevent wrongdoing and where the subsidiary is a mere tool of the parent. Here, ABT argues that Woodyard limits the commissioner’s ability to pierce the corporate veil to those cases in which there are specific findings that FCC and its subsidiaries have ceased functioning as separate entities or that the subsidiaries are being used to promote fraud.

First, ABT reads this court’s decision in Woodyard too narrowly. As previously noted, the Woodyard court stated that courts will ignore the corporate form where “fairness” demands it. The court added that, usually, this will be where it is necessary to prevent wrongdoing and where the subsidiary is a mere tool of the parent. Here, ABT’s own evidence showed that the form of the merger and FCC’s corporate structure resulted in the sharing of ABT insurance agency profits by other lending institutions. Thus, the corporate form allowed the subsidiaries and FCC to do indirectly what they could not do directly. No fraud was alleged on either FCC’s or ABT’s parts but none is required. In the circumstances described here, we hold the commissioner was correct in looking beyond the corporate form to the substance of the relationships between FCC and its subsidiaries.

Next, ABT challenges the commissioner’s interpretation of § 23-64-203(b)(2) wherein the commissioner held that this subsection allows “the reorganizations and continuance of the grandfather status whenever there is a transfer of the lending institution agency to any other subsidiary or affiliate of the lending institution as they were in place on March 25, 1975.” Section 23-64-203(b)(2) provides:

For the purposes hereof, the subsequent transfer of ownership or control of a lending institution agency to other subsidiaries of affiliates of the lending institution with which the agency was associated on March 25, 1975, shall not prohibit the commissioner from granting renewals of or license to successor agents, brokers, and solicitors.

Under the commissioner’s interpretation, ABT was divested of its grandfathered status when Bancshares merged with FCC in 1990, since ABT had not been associated with FCC or the affiliate lending institutions within the FCC network on March 25, 1975. Considering the plain terms of § 23-64-203(b)(2), we hold the commissioner’s interpretation of this subsection is correct.

Finally, ABT argues that, since holding companies are not mentioned in the statute, the legislature did not intend that the transfer of a lending institution agency to a holding company divests the agency of its grandfather status. Of course, our discussion concerning piercing the corporate veil answers this argument. Nonetheless we would also point out the introductory language to those provisions grandfathering or otherwise exempting certain persons or entities from being denied a license which reads as follows:

However, a lending institution, a subsidiary, affiliate, officer, employee, or the holder of the control of a lending institution otherwise qualified may be issued a license to:

(§ 23-64-203(b)(l)) (Emphasis added). While the above language is the only place in § 23-64-203 where “the holder of the control of a lending institution” is mentioned, it would seem that the commissioner’s conclusions of law are correct that holding companies merely holding controlling stock in another lending institution are contemplated as being included within the meaning of § 23-64-203.

In conclusion, we find the commissioner’s order is thorough and his reasoning is clear. Based on the foregoing discussion and the plain language of the statute, the commissioner’s decision was not arbitrary or capricious, and substantial evidence exists to support his decision.

Affirmed.

Brown, J., dissents.

Robert L. Brown, Justice,

dissenting. No one disagrees that the public policy has now been set in this state to separate banking institutions and insurance companies. The question before us, though, is whether the statutes in effect in 1990 required that separation in the case of Arkansas Bank & Trust Company (ABT). I do not believe that they did.

The statutory language which was effective in 1990 and on which this case turns reads:

However, those restrictions relative to the licensing of a lending institution agency, its agents, brokers, and solicitors, shall attach upon the transfer of the agency either by the transfer of ownership or the right of participation in the profits of the agency directly or indirectly to a lending institution.

Ark. Code Ann. § 23-64-293(b)(3) (Supp. 1991).

In 1980, ABT, which had an insurance agency as a component, was transferred to a one-bank holding company, ABT Bancshares Corporation. In 1990, ABT Bancshares Corporation was acquired by a multi-bank holding company, First Commercial Corporation (FCC). FCC is paid dividends and service fees by its bank subsidiaries including ABT Bancshares and provides management expertise and administrative services in return. The question then is whether this acquisition by FCC constituted a transfer enabling a bank to participate directly or indirectly in the profits of the insurance agency. If so, that would require FCC to divest itself of the insurance agency.

FCC is not a lending institution. A lending institution is defined as “any entity which has a place of business in this state, at which place it accepts deposits of money from the public and lends money, including banks and savings and loan associations.” Ark. Code Ann. § 23-64-203(b)(4)(A) (1987). FCC clearly does not fit under this definition. It is a bank holding company. So the transfer of ABT Bancshares Corporation to FCC is not a transfer to a lending institution under § 23-64-293(b)(3) (Supp. 1991). That leaves the other bank subsidiaries of FCC. They are lending institutions but was a transfer made to them? Stated differently, do they participate directly or indirectly in the profits of the insurance agency because of the transfer to FCC? Surely they do not participate directly in the agency’s profits, and the Insurance Commissioner admitted this. Nor, to my way of thinking, do they participate indirectly in the agency’s profits.

The Insurance Commissioner adopted a contorted theory that the service fees paid to FCC by the subsidiary banks are subsidized by ABT Bancshares’s dividend paid to FCC which is derived in part from insurance agency profits. This amounts to a participation by those banks in the insurance agency’s profits, according to the theory. I disagree with this convoluted reasoning. Again, all subsidiary banks as well as ABT Bancshares pay a dividend to the holding company as well as service fees for managerial services such as loan review, audit, and data processing. The money is pooled. All subsidiaries benefit from the reduced service fees, but that is a far cry from indirect participation in another subsidiary’s profits under anybody’s definition.

The majority opinion goes on to say that the statute in effect at the time of the transfer of Arkansas Bancshares to FCC in 1990 embraced transfers of insurance agencies to bank holding companies. But if that were the case, why did the General Assembly find it necessary to amend this statute in 1993 in order to clarify it? By Act 592 of 1993, now codified at Ark. Code Ann. § 23-64-203(b) (Repl. 1994), the General Assembly included transfers to “affiliates” for the first time as grounds for causing the divestiture of a grandfathered insurance agency. “Affiliate” is defined under Act 592 as an entity which controls a lending institution. That means a holding company now would easily ■ qualify. The Emergency Clause attached to Act 592 says that the reason for the legislation is that the law is “in urgent need of clarification.” Furthermore, Act 592 is clearly prospective in application as it says it will apply only to transfers effected after January 1, 1993.

Act 592 would require the result reached by the majority, but that Act was not effective in 1990. In 1990, holding companies, as affiliates, were not prohibited “participants” under the statute — only lending institutions were. What the majority opinion does is disregard the bank holding company structure in effect in 1990. I would reverse the order of the circuit court.

       Section 23-64-203 was amended in 1993 and is currently found at § 23-64-203 (Repl. 1993).

       Despite the statute’s general prohibition against licensing lending institutions, the commissioner may issue a license to a lending institution to sell mortgagor’s decreasing term life insurance, mortgagor’s accident, health and sickness insurance, credit life insurance, credit accident, and credit health and accident insurance. § 23-64-203(b)( I )(A).

       The definition of bank holding company is found in Ark. Code Ann. § 23-64-1802(b) (Repl. 1994); see also 12 U.S.C. § 1841(a).


author: Tom Glaze, Justice.

text:
    Andrew PICKENS, Madelyn Pickens Ashman, & Rebecca Jane Pickens Lambi v. Freddie BLACK, Individually and as Trustee of R.A. Pickens Trust A & B, as the Executor of the R.A. Pickens Estate; Carol Pickens; Laurie Black; Lea Blackwell; Owen Blackwell, III; Luke Pickens; Madelyn Lambi; Catherine Lambi; & Daniel Pickens Lambi
    94-137
    885 S.W.2d 872
    Supreme Court of Arkansas
    Opinion delivered October 31, 1994

      The McMath Law Firm, P.A., by: Sandy S. McMath, for appellants.

      Ramsey, Bridgforth, Harrelson & Starling, by: William C. Bridgforth and David R. Bridgforth, for appellees.
   Tom Glaze, Justice.

This is the second appeal in this case. See Pickens v. Black, 316 Ark. 499, 872 S.W.2d 405 (1994).’ The facts necessary for a complete understanding of this appeal are specified below.

In 1991, R. A. Pickens died testate leaving the family homestead to his third wife, appellee Carol Pickens. Appellants, the children of R. A. and his first wife Madelyn who died in 1968, filed suit challenging their father’s will. They sought a declaratory judgment declaring they, and not Carol Pickens, are the rightful owners of the homestead and its contents. Alternatively, appellants asked for specific performance of an oral contract between R. A. and and his wife Madelyn. And finally, they claimed the appellees are barred from inheriting from R. A. because of the appellees’ criminal neglect of R. A. during the last thirty hours of his life. Besides R. A.’s widow Carol, the appellees include Freddie Black, Carol’s son-in-law, and-Laurie Black, Freddie’s wife and Carol’s daughter by a prior marriage.

The appellees filed a motion for partial summary judgment on the appellants’ allegations that Freddie, Laurie, and Carol “deprived [R. A.] or allowed him to be deprived of necessary medical treatment and permitted his physical health and condition to be materially endangered.” Following a hearing on the motion, the chancellor granted summary judgment as to Freddie Black and Laurie Black, holding there was no evidence to support the allegations that they were culpable in the death of R. A. The motion as to Carol Pickens was denied because questions of fact remained.

Following trial on the merits, the chancellor entered his findings of fact and conclusions of law, and an order dismissing the appellants’ complaint. On appeal, the appellants challenge the chancellor’s findings that they were not remaindermen of a life estate devised to their father R. A. Pickens under his father’s will, that there was no enforceable contract between R. A. and Madelyn as to the disposition of the Pickens land, and that Carol Pickens was not culpable of neglecting appellants’ father during the last hours of his life. Appellants also appeal from the order of partial summary judgment wherein the chancellor held that Freddie and Laurie Black were not culpable of neglecting R. A. during the final hours of his life.

On appeal, this court tries chancery cases de novo on the record while considering the evidence in a light most favorable to the appellee. In the Matter of F & M Building Partnership v. Farmers & Merchants Bank, 316 Ark. 60, 871 S.W.2d 338 (1994). Further, this court will not reverse a finding of fact made by the chancellor unless it is clearly erroneous. Id.

First, the major contention between the parties begins with the disposition of the family homestead and its contents by R. A.’s father, Burton Pickens, in his 1930 will. In the fourth paragraph of his will, Burton provided in pertinent part the following:

FOURTH: The following described real property lying in Desha County, Arkansas, to wit:
Lot Four (4) in and of Block One (1) of the Town of Walnut Lake;
together with the residence thereon located, being my homestead, together with all household, kitchen and dining room furniture and equipment located therein and used in connection therewith, I devise and bequeath unto my wife, Ollye Pickens, for the term of her natural life, and at her death unto my son R. A. Pickens and unto the heirs of his body in fee simple forever, provided, that if my said son R. A. Pickens should not be living and have no heirs of his body surviving him, at the time of the death of my wife Ollye Pickens, or if after the death of my said wife Ollye Pick-ens, my said son R. A. Pickens should die leaving no heirs of his body surviving him, then in either event, the remainder estate in said homestead and household goods shall become a part of the B. C. Pickens Trust hereafter created[.]

(Emphasis added). Another provision of Burton’s will established the B. C. Pickens Trust.

In reviewing the paragraph four language, the chancellor held that Burton devised a life estate in the homestead to his widow Ollye with a remainder in R. A. in fee simple. Citing Bowlin v. Vinsant, 186 Ark. 740, 55 S.W.2d 927 (1933) with approval, the chancellor held that Burton intended that the family homestead and its contents was to vest in R. A. in fee simple upon the death of Ollye, if R. A. was alive at the time of Ollye’s death. However, Ollye renounced Burton’s will and elected her dower share, thus causing R. A.’s remainder interest to vest upon the renunciation. See Union Trust Co. v. Rossi, 180 Ark. 552, 22 S.W.2d 370 (1929) (it is presumably the intention of the testator that a renunciation of the life estate shall be considered as equivalent to its termination by the death of the life tenant, and that the beneficiaries entitled in remainder shall enter into its enjoyment at once); see also Ark. Code Ann. § 28-11-405 (1987).

Appellants argue that “[t]he devise of the homestead, in providing for the succession to pass to the B. C. Pickens Trust in event of R. A. Pickens dying without bodily heirs, created a life estate in R. A. following the life estate of Ollye, with alternative contingent remainders in, first, the bodily heirs of R. A., and second, the B. C. Pickens trust.” Appellants further aver that title actually remained in grandfather Burton or his heirs, subject to the two contingencies, instead of being placed in R. A., who was a minor at the time Burton’s will was executed. Appellants rely upon the language in the will, “unto the heirs of his body”, and Arkansas law on fee tail. Appellants claim the drafters of Burton’s will were knowledgeable in the law of estates and that one of the drafters wrote the Arkansas Probate Code.

In support of their argument, appellants cite Fletcher v. Hurdle, 259 Ark. 640, 536 S.W.2d 109 (1976) and Cox v. Danehower, 211 Ark. 696, 202 S.W.2d 200 (1947). In Fletcher, this court found the testator created alternative contingent remainders. In Cox, the court described contingent remainders in the alternative as arising when “more than one estate in remainder may be limited after a single particular estate if the limitation is in the alternative so that one may take effect if the other does not.” Cox at 701 (citation omitted). These cases are distinguishable in the testamentary language used, and in fact, appellants ignore the language of both these cases wherein this court cited with approval the cases and holdings cited by appellees.

Chief among those cases cited by the appellees (and heavily relied on by the chancellor) is Bowlin v. Vinsant, 186 Ark. 740, 55 S.W.2d 927 (1933). There, the testator left the homestead to his wife “during her life, at her death, or should my said wife not survive me, unto my daughter, Gertrude Vinsant, and unto the heirs of her body.” Id. at 741. In holding that Gertrude received the homestead in fee simple, the Vinsant court stated the following:

This court has often ruled that where land is conveyed, or devised, to a person and the heirs of the body, children, or issue of such person, such conveyance or devise creates an estate in fee tail in the grantee or devisee, which, under our statute [now § 18-12-301] becomes an estate for life only in the grantee or devisee, and a fee simple absolute in the person to whom the estate tail would first pass, according to the course of the common law, by virtue of such devise, grant or conveyance.

Id. at 741 citing Pletner v. Southern Lumber Co., 173 Ark. 277, 292 S.W. 370 (1927). See also Bell v. Gentry, 141 Ark. 184, 218 S.W. 194 (1920) (the law favors the vesting of estates as early as possible).

Thus, in applying the rule of Vinsant and Pletner to Burton Pickens’ will here, Ollye received a life estate, and upon her death, R. A. received the homestead in fee simple. Further, if R. A. failed to survive Ollye, his bodily heirs would take in fee simple; but if R. A. failed to survive Ollye and left no bodily heirs, then the homestead would devise to Burton’s trust. In other words, since Burton devised a life estate to Ollye, he could not then devise another life estate to R. A., using the fee tail language.

In the interpretation of wills, the paramount principle is that the testator’s intent governs. In Re: Estate of Harp, 316 Ark. 761, 875 S.W.2d 490 (1994). The testator’s intent is to be gathered from the four corners of the instrument itself. Id. Furthermore, the intention of the testator to dispose of his entire estate will be presumed, unless the language of the will shows the contrary. Id. And while this presumption is not controlling, it must always be considered when the language is so ambiguous as to require construction. Id. However, the testator’s intent is limited by the rule of law. Union Trust Co., 180 Ark. 552, 22 S.W.2d 370. Based on Arkansas case law, the general rule that the law desires property to vest as soon as possible, and the fact Burton could have easily left R. A. a life estate if he had so intended, the chancellor was correct in his application of the law and holding that the homestead was held by R. A. in fee simple.

Next, appellants claim that their father R. A. had contracted with their mother Madelyn that, if Madelyn omitted the couple’s only son Andrew from her will, thereby disinheriting him of Madelyn’s separate family property located in Wheatly, R. A. would leave Andrew the “Pickens property” in R. A.’s will. In support of their claim, appellants urge that the fact that Madelyn devised her Wheatly property only to her two daughters is evidence showing the oral contract existed between their parents. They cite testimony from nine witnesses and R. A.’s own letters which they allege confirm the presence of the agreement.

Appellees counter stating the chancellor was correct when he found there was no clear evidence that R. A. and Madelyn entered into an enforceable oral contract. Appellees point to the testimonies of R. A.’s attorney and accountant who said they were never told of any oral contract between R. A. and Madelyn. Further, evidence showed that in 1963, both Madelyn and R. A. made wills, wherein R. A. bequeathed to Madelyn 50% of his interest in R. A. Pickens & Son, and Madelyn bequeathed that same interest to all three of the appellants, including Andrew. This evidence was offered to refute the appellants’ assertion that Madelyn disinherited Andrew in reliance on an oral agreement. The evidence also showed the appellants were aware that R. A. changed his will numerous times over the years after Madelyn’s death, and none of them challenged his authority to do so. Finally, there was no evidence that R. A. ever devised the Pickens property to Andrew in any of his wills.

In McDonald v. Petty, 254 Ark. 705, 496 S.W.2d 365 (1973), this court stated that an oral contract to make a will to devise or to make a deed to convey real estate is valid when the testimony and evidence to establish such a contract is clear, cogent, satisfactory, and convincing. Further, the evidence must be so strong as to be substantially beyond reasonable doubt. Id. Here, the chancellor found that, based on the testimony and the credibility of the witnesses, such a contract between the parents was not intended and never existed. This court cannot say that the chancellor was clearly wrong.

Next, under Ark. Code Ann. § 5-28-103(a) (Repl. 1993), the appellants alleged below that Carol Pickens was culpable in the death of R. A. by neglecting him, depriving him of medical treatment, and allowing him to overdose himself on morphine. Because of this culpability, the appellants argue that Carol is barred from benefitting under R. A.’s will.

The chancellor found that during the final three days, Carol took R. A. to his local doctor twice (once was in the hospital emergency room), called the doctor for consultation once, and called the doctor to the house twice. The evidence also showed R. A. refused to follow the recommendation of his doctor to see R. A.’s cardiologist in Little Rock. Additionally, R. A. was a strong-willed individual and did things his own way, including monitoring his own medicine. Finally, the chancellor found there was no evidence that Carol knew or should have known that R. A. had overdosed on morphine or the effect such an overdose would have on his heart. The chancellor accepted the opinion of R. A.’s cardiologist that getting well was not an option for R. A., but that keeping him comfortable was. Based on this evidence, the chancellor held Carol was free of any negligence or neglect. On appeal, the appellants have failed to show that the chancellor’s findings of fact were clearly erroneous.

Finally, appellants challenge the chancellor’s granting of partial summary judgment in holding that Laurie and Freddie Black also were not culpable in R. A.’s death. This issue is difficult to follow since most of the record containing appellees’ motion and appellants’ response with supporting documents is not abstracted. Also puzzling, we find in the record where Laurie and Freddie Black’s deposition testimonies, bearing on their culpability in R. A.’s death, were actually entered at the trial of this case; and in its judgment, the trial court said, “[T]he plaintiffs (appellants) alleged Carol Pickens, Freddie Black and Laurie Black culpably neglected the deceased (R. A.) by denying him necessary medical care. This is a fact question to be decided by the court.” (Emphasis added.) The trial court then added that whether the Blacks’ acts barred them from taking anything from R. A.’s estate was a question of law.

In sum, it would be guesswork on our part to decide any summary judgment issue based upon the record before us. Nonetheless, in reviewing the trial court’s partial summary judgment order (which is abstracted), the trial testimony and the court’s findings and final order (which are not abstracted), we cannot say the chancellor erred in deciding that no culpability existed on the Blacks’ parts. In this respect the evidence showed that Freddie visited R. A. for two to three hours on the day before he died, and that R. A. was sitting up in a chair and able to get up and shake hands, but that on Freddie’s return the next day, Freddie found R. A. to be a very sick man. Freddie testified that R. A.’s local doctor was there at the time, and R. A. sat up in bed.

The chancellor further found that the presence of Laurie during the two days before R. A.’s death was for no other reason but out of concern for R. A. He found there was no evidence to show Laurie knew R. A. had overdosed or that she knew giving him a nitroglycerin pill under his tongue would have a detrimental effect on R. A. Accepting the foregoing evidence as true, the trial court could conclude the Blacks were free of culpability.

For the reasons given above, we affirm.

       Other appellees include two more of Carol’s children by another marriage and also appellant Rebecca Lambi’s children.

       The chancellor correctly noted that a fee tail cannot exist in personal property. Festinger v. Kantor, 272 Ark. 411, 616 S.W.2d 455 (1981).

       Ark. Code Ann. § 18-12-301 (1987) provides that a devise or grant in fee tail is abolished and the devisee or grantee shall be seized of a life estate with the remainder to "pass in fee simple absolute to the person to whom the estate tail would first pass according to the course of the common law by virtue of the devise, gift, grant, or conveyance.” In other words, the statute substitutes the fee tail with a life estate in the grantee or devisee and a remainder in fee simple in his or her issue.

       This 1963 will was Madelyn’s last will. R. A. did not change his will again until 1972, after Madelyn’s death. At her death, Madelyn did not own any interest in R. A. Pickens & Son.

       Section 5-28-103(a) provides criminal penalties for any person or caregiver who abuses, neglects, or exploits any adult who cannot protect himself or herself.