source: Caselaw Access Project

author: Robert H. Dudley, Justice.

license: Public Domain

text:
    Larry LANDRUM v. STATE of Arkansas
    CR 96-494
    936 S.W.2d 505
    Supreme Court of Arkansas
    Opinion delivered December 23, 1996

      Booth & Honeycutt, P.L.C., by: J. Marvin Honeycutt, for appellant.

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

Larry Landrum was convicted of the murder of Lucille Hassler and sentenced to life imprisonment. He does not question the sufficiency of the evidence, so we need not recite the details of the crime. Landrum’s sole argument is that the trial court erred in refusing to suppress his confession because there was an unreasonable delay in his arraignment. The argument is without merit, and we affirm the judgment of conviction.

Landrum, a habitual criminal, was arrested on the afternoon of December 12, 1994, on an unrelated series of crimes involving the attempted rape and aggravated assault of Kristie Anderson and the theft of her property. Shordy after his arrest, he was given a Miranda warning and gave an exculpatory statement. He was taken to jail and scheduled to be arraigned on these charges at 8:30 a.m., December 14.

On the next afternoon, December 13, at about 4:30, Landrum was again given a Miranda warning and questioned about a second unrelated murder, the murder of Melissa Witt. After approximately thirty minutes of questioning about the Witt murder, the officers again informed Landrum of his Miranda rights and asked him some questions about this case, the murder of Lucille Hassler. Landrum made no admissions about the Hassler murder, but his body language raised the officers’ suspicions.

Investigator Pittman, one of the officers who was questioning Landrum, asked Landrum if he wanted to take a polygraph examination, and he responded affirmatively. The polygraph examiner, Investigator Brett Pritchard, arrived between 7:30 and 8:00 that same night, December 13, and again gave appellant a Miranda warning. After Landrum completed the examination, he was told that the results were bad. Landrum told the examiner that he wanted to speak privately with Officer Dale Best. Best, a State Police Lieutenant, was contacted, and he went to the jail and talked to appellant from 10:25 to 11:45 that night. Landrum told Best that he would discuss the details of the Hassler murder if he knew what to expect from the prosecuting attorney. Officer Best asked Landrum if he wanted him to contact the prosecuting attorney that night or wait until the next morning. Landrum answered that he was tired and wanted to wait until the next morning.

Officer Best contacted the prosecuting attorney’s office and, at 7:50 on the morning of the 14th, returned to the jail to talk to Landrum. Landrum admitted to Best that he had killed Ms. Hassler. A deputy prosecutor arrived and went over the charges that would be filed in the Hassler murder, agreed not to seek the death penalty, and agreed the sentences could be run concurrently with others Landrum was to receive. At 8:35 Landrum was again informed of his Miranda rights, and he gave a taped statement in which he confessed to the Hassler murder. The statement was concluded at 9:14 that morning.

Landrum was making a confession in this case, the Hassler murder, at 8:30 on the morning of the 13th, and therefore was not taken to his scheduled arraignment on the Anderson charges. In the appeal of this case Landrum contends that the trial court erred in admitting his confession in the Hassler murder because if he had been taken before a judicial officer in the Anderson case at 8:30 on the morning of the 13th, as scheduled, an attorney would have been appointed for him in the Anderson case and the attorney would have advised him not to make a confession in the Hassler case.

Landrum’s argument is without merit. There is no connection between the delay in the arraignment in the Anderson case and the resulting appointment of counsel for that case, and Landrum giving his statement confessing to the murder in this case. The purpose of the exclusionary rule is to deter police misconduct, and there was no police misconduct.

Rule 8.1 of the Arkansas Rules of Criminal Procedure provides: “An arrested person who is not released by citation or by other lawful manner shall be taken before a judicial officer without unnecessary delay.” In Duncan v. State, 291 Ark. 521, 726 S.W.2d 653 (1987), we explained the reasons for Rule 8.1:

It has been recognized that in addition to the purpose of guarding against the coercive influence of custodial interrogation, the rule insures that the accused is placed in early contact with a judicial officer so that protections covered by preliminary arraignment are afforded without delay, that the right to counsel may be clearly explained and implemented upon the accused’s request and that the accused is protected from being held incommunicado for protracted periods of time.

Id. at 528, 726 S.W.2d at 656 (citations omitted). In Bolden v. State, 262 Ark. 718, 561 S.W.2d 281 (1978), we stated that Rule 8.1 is designed to “afford an arrestee protection against unfounded invasion of liberty and privacy.” Id. at 724, 561 S.W.2d at 284. If an unnecessary delay in arraignment occurs, statements given by the accused are not automatically excluded; rather, the court considers whether the statement is prejudicial and whether it is reasonably related to the delay. Duncan, 291 Ark. at 529, 726 S.W.2d at 657.

In the present case, there was no unnecessary delay in arraigning Landrum on the Hassler charge. The officers first questioned him about the Hassler murder at 5:00 on the afternoon of December 13, 1994. He had been informed of his Miranda rights three times when the officers questioned him about the Hassler murder. He was again informed of his Miranda rights before he took the polygraph examination on the evening of December 13. After doing poorly on the polygraph examination, he asked to speak with Officer Best alone, and his request was honored. Landrum told Officer Best that he would talk about Ms. Hassler’s disappearance if he could talk with the prosecuting attorney’s office first so that he would know what to expect. He specifically asked that Officer Best wait until the morning of December 14, 1994, to contact the prosecuting attorney’s office. Officer Best complied with Landrum’s request, concluding the interview at that time and not contacting Landrum again until the morning of December 14. On the morning of December 14, 1994, less than twenty-four hours after the officers first questioned him regarding the disappearance and death of Ms. Hassler, Landrum confessed to the crime. There was no unnecessary delay between the time the officers first questioned Landrum about the Hassler murder and the time he confessed. Most important, no police misconduct occurred during the incarceration of Landrum, and therefore, there is no policy reason for us to apply the exclusionary rule to Landrum’s statement.

The purpose of the exclusionary rule is to deter police misconduct. In Scherrer v. State, 294 Ark. 287, 742 S.W.2d 884 (1988), we quoted Beed v. State, 271 Ark. 526, 609 S.W.2d 898 (1980), in explaining that the purpose of Miranda and its progeny was to inhibit police misconduct, not the making of incriminating statements. Id. at 291, 742 S.W.2d at 886. Similarly, in Whitmore v. State, 296 Ark. 308, 756 S.W.2d 890 (1988), we affirmed the trial court’s ruling denying the defendant’s motion to suppress his statements, stating in part, “Since the police did not violate the Miranda procedural rules, and were not guilty of any police misconduct, the trial court correcdy refused to apply the exclusionary rule on the basis of Miranda.” Id. at 312, 756 S.W.2d at 892. In Weger v. State, 315 Ark. 555, 869 S.W.2d 688 (1994), we affirmed the admission of the defendant’s confession. In doing so, we discussed the case of Colorado v. Connelly, 479 U.S. 157 (1986), stating that the United States Supreme Court held that “coercive police activity is a necessary predicate to finding a confession involuntary within the meaning of the Due Process Clause of the Fourteenth Amendment.” Id. at 558, 869 S.W.2d at 689.

We have also explained the purpose of the exclusionary rule in the context of the Fourth Amendment. In Allen v. State, 277 Ark. 380, 641 S.W.2d 710 (1982), we reversed the judgment on an unrelated ground while agreeing with the trial court that the defendant’s confession was admissible. The defendant argued that the warrant for his arrest was technically illegal, and thus his arrest was illegal, and that his confession should have been suppressed as fruit of the poisonous tree. We rejected the argument and wrote that Brown v. U.S. 422 U.S. 590 (1975), “mandates an evaluation of each case in the light of the policy served by the exclusionary rule, that is, deterring lawless conduct by officers by removing the incentive to disregard those laws” in determining whether statements made after an illegal arrest should be suppressed. Id. at 386, 641 S.W.2d at 714. We did not determine whether the warrant was illegal because a warrant was not constitutionally required to arrest the defendant. We wrote:

The illegality of the warrant here served no quality of purposefulness. There was no misuse of power to gain the confession. The police gained no advantage by use of the invalid warrant. The police should not be penalized for attempting to afford an unnecessary procedural safeguard to appellant. Therefore there is no policy reason to apply the exclusionary rule under the Fourth Amendment.

Id. at 386, 641 S.W.2d at 714. See also Collins v. State, 304 Ark. 587, 804 S.W.2d 680 (1991); Moore v. State, 303 Ark. 514, 798 S.W.2d 87 (1990).

In the present case, the police repeatedly advised Landrum of his rights and honored his various requests. Landrum gave his confession at the time that he was scheduled to be arraigned on the Anderson charges because he requested that Officer Best wait until the morning of the 14th to have the prosecuting attorney’s office talk to him. Since there is no evidence of police misconduct, there is no reason to exclude appellant’s statement.

The fact that Landrum would have been appointed an attorney in the Anderson matter had he been arraigned on December 14, 1994, is not reason to exclude his statement in the present case. In McNeil v. Wisconsin, 501 U.S. 171 (1991), the United States Supreme Court addressed whether an accused’s request for counsel at a first appearance on a charged offense constituted an invocation of his Fifth Amendment right to counsel on unrelated and uncharged offenses, thus precluding police-initiated interrogation on the unrelated matters. In explaining that the Sixth Amendment right to counsel is offense specific, the opinion provides:

The Sixth Amendment right, however, is offense specific. It cannot be invoked once for all future prosecutions, for it does not attach until a prosecution is commenced, that is, “ ‘at or after the initiation of adversary judicial criminal proceedings — whether by way of formal charge, preliminary hearing, indictment, information, or arraignment.’ ” United States v. Gouveia, 467 U.S. 180, 188 (1984) (quoting Kirby v. Illinois, 406 U.S. 682, 689 (1972) (plurality opinion)). And just as the right is offense specific, so also its Michigan v. Jackson effect of invalidating subsequent waivers in police-initiated interviews is offense specific.
“The police have an interest ... in investigating new or additional crimes [after an individual is formally charged with one crime.] ... [T]o exclude evidence pertaining to charges as to which the Sixth Amendment right to counsel had not attached at the time the evidence was obtained, simply because other charges were pending at that time, would unnecessarily frustrate the public’s interest in the investigation of criminal activities. . . .” Maine v. Moulton, 474 U.S. 159, 179-180 (1985).
“Incriminating statements pertaining to other crimes, as to which the Sixth Amendment right has not yet attached, are, of course, admissible at a trial of those offenses.” Id. at 180, n. 16.

Id. at 175-76.

The Court in McNeil explained that under Edwards v. Arizona, 451 U.S. 477 (1981), “Once a suspect invokes the Miranda right to counsel for interrogation regarding one offense, he may not be reapproached regarding any offense unless counsel is present.” 501 U.S. at 177 (emphasis in the original). The Court then stated that the defendant in McNeil sought to prevail by combining his right to counsel under the Fifth Amendment and under the Sixth Amendment. The defendant contended that even though he expressly waived his Miranda right to counsel every time he was interrogated, the waivers were invalid “because his prior invocation of the offense-specific Sixth Amendment right with regard to the [unrelated crime] was also an invocation of the nonoffense-specific Miranda-Edwards right.” Id. The Supreme Court stated, “We think that it is false as a matter of fact and inadvisable (if even permissible) as a contrary-to-fact presumption of policy.” Id. The Court rejected the possibility that it should adopt the policy that the assertion of the Sixth Amendment right to counsel implies an assertion of the Miranda Fifth Amendment right, stating:

If a suspect does not wish to communicate with the police except through an attorney, he can simply tell them that when they give him the Miranda warnings. There is not the remotest chance that he will feel “badgered” by their asking to talk to him without counsel present, since the subject will not be the charge on which he has already requested counsel’s assistance (for in that event Jackson would preclude initiation of the interview) and he will not have rejected uncoun-seled interrogation on any subject before (for in that event Edwards would preclude initiation of the interview). The proposed rule would, however, seriously impede effective law enforcement. The Sixth Amendment right to counsel attaches at the first formal proceeding against an accused, and in most States, at least with respect to serious offenses, free counsel is made available at that time and ordinarily requested. Thus, if we were to adopt petitioner’s rule, most persons in pretrial custody for serious offenses would be unapproachable by police officers suspecting them of involvement in other crimes, even though they have never expressed any unwillingness to be questioned. Since the ready ability to obtain uncoerced confessions is not an evil but an unmitigated good, society would be the loser. Admissions of guilt resulting from valid Miranda waivers “are more than merely ‘desirable’; they are essential to society’s compelling interest in finding, convicting, and punishing those who violate the law.” Moran, 475 U.S., at 426 (citation omitted).

501 U.S. at 180-81 (emphasis in the original).

Applying McNeil to the present case, even if Landrum had been arraigned on the Anderson charges on the morning of December 14, 1994, as scheduled, and an attorney had been appointed for that case, he still could have been questioned regarding the murder of Ms. Hassler. Landrum was repeatedly given his Miranda warnings and repeatedly gave valid waivers. There was simply no police misconduct and no connection between appellant’s missing his scheduled arraignment in the Anderson matter and giving the confession in the present case. Therefore, the trial court properly refused to suppress the confession.

In accordance with Rule 4-3 (h) of the Rules of the Supreme Court, the record has been reviewed for rulings adverse to appellant, but not argued on appeal, and no reversible errors were found.

Affirmed.


author: Tom Glaze, Justice.

text:
    Sharilyn PATTERSON v. STATE of Arkansas
    CR 96-1001
    935 S.W.2d 266
    Supreme Court of Arkansas
    Opinion delivered December 23, 1996

      William R. Simpson, Jr., Public Defender, by: C. Joseph Cordi, Jr., for appellant.

      Winston Bryant, Att’y Gen., by: J. Brent Standridge, Asst. Att’y Gen., for appellee.
   Tom Glaze, Justice.

The court of appeals certified this case as one involving statutory interpretation of Ark. Code Ann. § 5-37-207 (Repl. 1993). Appellant Sharilyn Patterson was charged under § 5-37-207 with using Val Hansen’s credit card to obtain property exceeding $100.00 in value with knowledge the card was stolen. Following a bench trial, Patterson was found guilty and sentenced as a habitual offender to three years’ imprisonment. Patterson’s sole issue on appeal is that the evidence was insufficient to support her conviction because the State failed to show Hansen’s credit card was stolen.

We first point out the State’s information charged Patterson under § 5-37-207, and Patterson has never questioned the information as being deficient. Cf. State v. Johnson, 326 Ark. 189, 931 S.W.2d 760 (1996). Section 5-37-207 sets out the criminal offense of fraudulent use of a credit card as follows:

(a) A person commits the offense of fraudulent use of a credit card if, with purpose to defraud, he uses a credit card to obtain property or services with knowledge that:
(1) The card is stolen; or
(2) The card has been revoked or cancelled; or
(3) The card is forged; or
(4) For any other reason his use of the card is unauthorized by either the issuer or the person to whom the credit card is issued.
(b) Fraudulent use of a credit card is a Class C felony if the value of money, goods, or services obtained during any six-month period exceeds one hundred dollars ($100). Otherwise, it is a Class A misdemeanor.

As is pertinent in the present case and facts discussed more fully hereinafter, a person’s fraudulent use of a credit card to obtain property is not limited only to situations where a card is stolen, but as is provided in subsection (a)(4), it includes a person’s acts when his or her use of the card is unauthorized by either the issuer or the person to whom the credit card is issued. In general, under the provisions of § 5-37-207, it is the use of a stolen, revoked or cancelled, forged, or unauthorized credit card that results in a criminal violation. Specifically, it is the use of the account numbers on a credit card which gives the plastic card any credit value.

We turn now to consider that evidence that is most favorable to the appellee-State, as we are required to do. See Robinson v. State, 317 Ark. 17, 875 S.W.2d 837 (1994); Brenk v. State, 311 Ark. 579, 847 S.W.2d 1 (1993). On June 29, 1995, an unknown male called the Dillard’s store located at the Little Rock Park Plaza Mall. Salesperson, Michael Morris, answered the phone, and took an order from the caller for men’s clothing valued at $165.36. The caller identified himself as Val Hansen and gave Morris Hansen’s Visa-card number and driver’s license number, and said his wife, “Terry,” would pick up the merchandise. Morris became suspicious of the caller’s phone order, and notified a policeman working as a security guard in Dillard’s. Sergeant Phil Wilson contacted the real Val Hansen, who denied having made any purchases by phone and denied having a wife named Terry. Approximately thirty minutes after the phone call to Morris, Patterson entered Dillard’s, and told Morris that she was “Terry” and was there to pick up the merchandise. Upon receipt of the goods, Patterson started to walk out of Morris’s department when she was arrested by Wilson.

While Patterson argues the State failed to show that Hansen’s credit card was stolen, the State, as required by § 5-37-207, presented substantial, albeit circumstantial, evidence that Patterson, without authorization, utilized Hansen’s credit card account number to obtain merchandise from the Dillard store. In addition to establishing the facts oudined above in its case-in-chief, the State further offered Hansen’s testimony that he did not know Patterson. Further evidence showed that when Officer Wilson stopped Patterson from exiting the store with the merchandise, she falsely identified herself as “Terry,” and refused to give the name of the person she claimed had asked her to pick up the goods.

Patterson testified at trial, proclaimed her innocence, and told a story which varied substantially from that presented by the State. Of course, the trial court did not have to believe Patterson’s version of what occurred. In fact, when testifying, she admitted to two prior felony convictions, theft by receiving and forgery in the second degree, and the trial court alluded to Patterson’s criminal record when it rejected her story as implausible and found her guilty. As this court has held repeatedly, credibility of the witness is a matter for the trier of fact and such determinations will not be disturbed on appeal when there is substantial evidence to support the factfinder’s conclusion. Brenk, 311 Ark. 579, 847 S.W.2d 1. Here, the State’s evidence was more than sufficient to show Patterson used Hansen’s credit card account number without his authorization to obtain merchandise from Dillard’s. Therefore, we affirm.


author: DONALD L. Corbin, Justice. ROBERT H. DUDLEY, Justice, Andree Layton Roaf, Justice,

text:
    LITTLE ROCK CLEANING SYSTEMS, INC., d/b/a Rainbow Sales & Service v. Richard WEISS, Director, Arkansas Department of Finance and Administration
    96-463
    935 S.W.2d 268
    Supreme Court of Arkansas
    Opinion delivered December 23, 1996

      Jack, Lyon & Jones, P.A., by: Eugene G. Sayre, for appellant.

      Nina Orsini, for appellee.
   DONALD L. Corbin, Justice.

Appellant, Little Rock Cleaning Systems, Inc., d/b/a/ Rainbow Sales & Service, appeals the order of the Pulaski County Chancery Court dismissing with prejudice its complaint for a refund of gross-receipts taxes it paid under protest. Upon the motion of Appellee, Richard Weiss, Director of the Arkansas Department of Finance and Administration, the chancellor dismissed the complaint pursuant to the provisions of ARCP Rule 12(b)(6). This appeal presents a question that requires interpretation of our statutes on gross-receipts tax; jurisdiction is in this court pursuant to Ark. Sup. Ct. R. l-2(a)(3). Appellant makes three arguments for reversal. We find merit to the first argument and therefore reverse the order and remand for further proceedings. Accordingly, we need not address Appellant’s other two arguments.

Appellant is an authorized distributor and wholesaler of Rainbow vacuum cleaners, which Appellant alleges have a unique water filtration system that is superior to a regular vacuum cleaner and bag. Appellant sells Rainbow vacuum cleaners through outside sales personnel who demonstrate the vacuums in customers’ homes. During the audit period at issue in this case, the retail list price of the Rainbow vacuum cleaner ranged from $1,031.00 to $1,191.00. If the customer paid cash, he received a $50.00 cash discount. Usually, however, customers purchased under an installment sales contract. If these customers allowed the salesperson to dispose of their old vacuum cleaners, Appellant offered them a “special discount,” which ranged from $100.00 to $150.00 over the audit period. It is this special discount that is at issue in this appeal.

According to Appellant’s complaint, the special discount was offered as a marketing strategy that was designed to achieve three objectives from the unavailability of the old vacuum: (1) to prevent repossession of a Rainbow vacuum cleaner sold on an installment basis; (2) to put the customer in the position of using the Rainbow vacuum cleaner to its full potential; and (3) to ensure the customer’s achievement of Appellant’s claims of the Rainbow vacuum cleaner’s performance. Appellant offered the same special discount regardless of whether the customer’s vacuum was new, old, or even a nonelectric sweeper. Appellant disposed of the used vacuums by selling them in lots on an “as is” basis to the highest bid from various used vacuum cleaner shops. Generally, appellant received an approximate average of $10.00 for each vacuum it sold to the used vacuum cleaner shops.

Appellant’s salespeople computed and collected the gross-receipts tax on each sale of a Rainbow vacuum cleaner. They calculated the tax based on the retad list price less any cash discount or special discount taken by the customer. Appellant’s monthly gross-receipts tax reports reflected this calculation of the tax.

Appellee’s office audited Appellant’s reports for the period of July 1, 1988, through May 31, 1991, and assessed additional taxes and interest of $10,279.12 against Appellant on the basis that Appellant failed to charge and collect tax on the amount shown on its invoices as a special discount that was deducted from the retail list price. The audit did not result in an additional assessment of tax against the $50.00 cash discount.

Appellant protested the additional assessment following the audit, and the administrative law judge upheld the assessment. The commissioner of revenues refused Appellant’s request pursuant to Ark. Code Ann. § 26-18-405 (Supp. 1995) to revise the administrative law judge’s decision. Appellant therefore paid under protest the additional assessment of $10,279.12 and filed this suit for refund in chancery court pursuant to Ark. Code Ann. § 26-18-406 (Repl. 1992). Appellant took a voluntary non-suit and then refiled the suit for refund.

In Appellee’s Rule 12(b)(6) motion, he contended that gross receipts includes the value of any property taken in lieu of or in addition to money as consideration for a sale. Appellee also contended that Appellant purported to reduce the retail price of its vacuums by the agreed value of the trade-in vacuums, which is the amount of the special discount. Appellee then argued that Appellant’s reduction of its profit margin did not change the tax consequences of the transaction. Appellee argued further that Appellant’s complaint was devoid of any authority requiring Appellee to look beyond Appellant’s invoices to determine the actual value of trade-in merchandise rather than accepting Appellant’s determination of that value as stated in the invoices. The chancellor considered Appellee’s motion and brief in support and granted the dismissal with prejudice pursuant to the provisions of ARCP Rule 12(b)(6). This appeal followed.

Appellant’s first argument for reversal is that the trial court erred in granting the Rule 12(b)(6) dismissal because the complaint does indeed state facts upon which relief can be granted. We agree that the complaint states facts sufficient to survive a Rule 12(b)(6) motion and reverse and remand for further proceedings.

In support of the additional assessment, Appellee relies on the definition of “gross proceeds” or “gross receipts” in Ark. Code Ann. § 26-52-103(a)(4) (Supp. 1995), which includes the total amount of consideration for the sale of tangible personal property, “whether the consideration is in money or otherwise” and the Arkansas Department of Finance and Administration’s Gross Receipts Tax Regulation GR-3.C.(3), which provides that gross receipts or gross proceeds “includes the value of any property taken in lieu of or in addition to money as consideration for a sale.” In defense of this appeal, Appellee argues that the chancellor properly determined that Appellee was correct in its interpretations of Section 26-52-103(a)(4) and the corresponding regulations and was therefore correct in granting the dismissal as a matter of law. Appel-lee’s argument completely overlooks the fact that this was a dismissal under Rule 12(b)(6) and not a judgment on the pleadings or summary judgment. Appellee, after all, is the one who moved for the dismissal based on Rule 12(b)(6). ■

Rule 12(b)(6) provides that a motion to dismiss a complaint may be made for the complaint’s “failure to state facts upon which relief can be granted[.]” When considering a Rule 12(b)(6) motion to dismiss, the trial court treats the facts alleged in the complaint as true and views them in the light most favorable to the party who filed the complaint. Neal v. Wilson, 316 Ark. 588, 873 S.W.2d 552 (1994). In deciding such motions, the trial court must look only to the allegations contained in the complaint. Id. However, Rule 12(b) provides that:

If, on a motion asserting the defense numbered (6) to dismiss for failure of the pleading to state a claim upon which relief can be granted, matters outside the pleading are presented to and not excluded by the court, the motion shall be treated as one for summary judgment and disposed of as provided in Rule 56, and all parties shall be given reasonable opportunity to present all material made pertinent to such a motion by Rule 56.

Thus, it is improper for the trial court to look beyond the complaint to decide a Rule 12(b)(6) motion unless it treats the motion as one for summary judgment. Deitsch v. Tillery, 309 Ark. 401, 833 S.W.2d 760 (1992). Here, we are confident the chancellor did not treat this motion as one for summary judgment because the express terms of the chancellor’s order clearly state that she considered only the motion for dismissal and brief in support. In addition, the record before us contains only the complaint, the motion to dismiss based on Rule 12(b)(6), and an answer.

Rule 12(b)(6) must be read in conjunction with Rule 8, which sets out the requirements for a complaint. Spires v. Members of the Election Comm’n, 302 Ark. 407, 790 S.W.2d 167 (1990). A complaint that merely alleges conclusions without alleging facts does not state facts upon which relief can be granted and may therefore be subject to a Rule 12(b)(6) dismissal. Hollingsworth v. First Nat’l Bank & Trust Co., 311 Ark. 637, 846 S.W.2d 176 (1993). In testing the sufficiency of the complaint on a motion to dismiss, the complaint is to be liberally construed as provided in ARCP Rule 8(f). Id.

The complaint before us alleges that Appellee’s assessment of additional gross-receipts tax was in violation of the gross-receipts tax laws and regulations because the amount of the special discount Appellant granted to its customers was not the value of the used vacuum that the customer traded in. Alternatively, the complaint alleges that if the used vacuum cleaners did constitute part of the gross receipts of the sale, then Appellee’s determination that the value of the used vacuums was equal to the amount of the special discount was erroneously overstated. In support of these allegations, the complaint alleged the following facts: Appellant offered the same special discount of $100.00 or $150.00 regardless of whether the customer’s vacuum was new, old, or even a nonelectric sweeper; Appellant disposed of the used vacuums by selling them in lots on an “as is” basis to the highest bid from various used vacuum cleaner shops; generally, Appellant received an approximate average of $10.00 for each vacuum it sold to the used vacuum cleaner shops.

We conclude that the aforementioned facts are sufficient to survive a motion to dismiss for failure to state facts upon which relief can be granted. The complaint does more than state mere allegations; it supports those allegations with facts. The chancellor therefore erred in dismissing this complaint pursuant to Appellee’s Rule 12(b)(6) motion because, by alleging that the discount was not based on the value of the vacuum cleaners received by Appellant, facts alleging a claim for relief have been pleaded. We reverse and remand for further proceedings.

We note that both dissents confuse resolution of a question of law with entering judgment as a matter of law. Here, although we have said the complaint is sufficient to survive a Rule 12(b)(6) dismissal, unlike the dissenting opinions, we express no view as to whether the proof presented on the claim will entitle Appellant to the relief it seeks.

Reversed and remanded.

Dudley, Glaze, and Roaf, JJ., dissent.

ROBERT H. DUDLEY, Justice,

dissenting. The facts, taken from the complaint as being true, are that the taxpayer was in the business of selling vacuum cleaners at suggested retail prices ranging from $1,031.00 to $1,191.00 per unit; if the customer paid cash, the customer received a $50.00 cash discount; if the customer traded in a used vacuum cleaner the customer received a trade-in allowance or “special discount” of $100 to $150. The “special discount” given for the trade-in vacuum cleaners was not included by the taxpayer as part of the total consideration when the sales tax was calculated on the sale, even though there is no dispute that the trade-in vacuum cleaner had value. The taxpayer did not collect, nor did it remit, sales tax on the amount of the “special discount.” The issue on appeal is whether sales tax is due on the amount of the “special discount.” The chancellor dismissed the taxpayer’s suit for a refund because its complaint did not state a cause of action.

The majority opinion reverses the riding of the chancellor and holds that the taxpayer’s complaint states a cause of action because “the discount was not based on the value of the vacuum cleaners received by” the taxpayer. I dissent from that holding.

As a matter of law, unless expressly exempted, gross proceeds or gross receipts includes not only the cash consideration, but also the value of any property traded in and accepted as partial consideration in the purchase of new property. Section 26-52-301 of the Arkansas Code Annotated provides:

There is levied an excise tax of three percent (3%) upon the gross proceeds or gross receipts derived from all sales to any person of the following:
(1) Tangible personal property ....

Section 26-52-103 provides:

(a) The following words and phrases, except where the context clearly indicates a different meaning, when used in this act shall have the following meanings:
(4) “Gross receipts” or “gross proceeds” means the total amount of consideration for the sale of tangible personal property and such services are herein specifically provided for, whether the consideration is in money or otherwise, mthout any deduction on account of the cost of the properties sold, labor service performed, interest paid, losses, or any expenses whatsoever.

Ark. Code Ann. § 26-52-103 (Supp. 1996) (emphasis added).

The Department’s Gross Receipts Tax Regulations define “Gross receipts or gross proceeds” as:

(1) [T]he total amount of consideration for the sale of tangible personal property and such services as are herein provided for, whether the consideration is in money or otherwise, without any deduction ... [for] ... losses or any expenses whatsoever.
(3) The term “Gross Receipts” or “Gross Proceeds” includes the value of any property taken in lieu of or in addition to money as consideration for a sale.

Arkansas Department of Finance and Administration Gross Receipts Tax Regulation GR-3.C.(1) & (3) (emphasis added).

The “total amount of consideration of the sale[,] ... whether the consideration is in money or otherwise,” means the agreed value of the sale. It can mean nothing else. The amount the customer is told that he or she is paying for the vacuum cleaner is the agreed value.

Indeed, the gross-receipts tax by its very nature is a tax on the purchaser, not on the seller, and that renders any value that the seller may later get by reselling the trade-in irrelevant. The majority opinion states that the taxpayer stated a cause of action because the discount was not based on the value of the vacuum cleaners received by the seller. The majority opinion fails to understand that the value ultimately received by the seller is immaterial. Under both the statute and the regulation it is the agreed value that determines the amount of tax.

The Department has always construed the statute and its regulations to mean that agreed value is the proper valuation for trade-in property. We have frequently held that the interpretation placed on a statute or regulation by an agency or department charged with its administration is entitled to great deference and should not be overturned unless clearly wrong. Douglass v. Dynamic Enters., Inc., 315 Ark. 575, 869 S.W.2d 14 (1994).

The few courts that have passed on the question agree that taxing authorities are entitled to accept agreed value in valuing trade-in property. See 68 Am. Jur. 2d Sales and Use Tax § 180 (1993); Annotation, Computation of Sales Tax where Property is turned in by Purchaser, 4 A.L.R. 2d 1059, 1063 (1949); Annotation, Computation of Sales Tax, 150 A.L.R. 1314 (1944); and see the survey of older cases contained in Hawley v. Johnson, 58 Cal. App. 2d 232, 136 P.2d 638 (1943). The majority opinion cites no authority whatsoever for its holding, and the writer of this dissenting opinion is unable to find any other case in the nation that holds as does the majority opinion.

The holding of the majority opinion is also wrong as a practical matter. It will result in inconvenience and uncertainty for both the public and the Department. A sale will no longer be valued on the date of the sale and will no longer be at the agreed sales price, but rather will be valued on the date the trade-in is ultimately resold and it will then reflect the amount of the trade-in. It follows that the amount of sales tax to be paid by the purchaser cannot be known until the trade-in is resold. The purchaser has traditionally paid the tax on the agreed amount on the date of the sale, but now the amount will not be known on the date of the sale. This plight may not cause a significant inconvenience when a vacuum cleaner is sold, but the majority opinion will necessarily govern all sales-tax collections and will apply to the sale of high price items where trade-ins are frequently accepted, such as automobiles, boats, airplanes, and diamonds. Some purchasers may be required to wait months until they know the amount of the sales tax on their purchase. Additional complications may arise when the purchasers must show that they have paid the sales tax before the property can be licensed, as is the case when a car or truck is purchased. Without doubt, the Department will have a difficult time administering sales-tax collections under these conditions. For these reasons, I dissent.

Glaze and Roaf, JJ., join in this dissent.

Andree Layton Roaf, Justice,

dissenting. I do not agree that Rainbow’s complaint is sufficient to survive a Rule 12(b)(6) motion, because based on the facts pled, Rainbow does not have a cause of action. Moreover, I agree with Justice Dudley that this decision will have adverse consequences on the assessment of sales taxes where high-priced trade-ins are involved, and the majority’s caveat that Rainbow may not be able to present proof of its rlaim does not change the import of this holding. Although Rainbow takes issue with the trial court’s interpretation of the gross receipt statute, Ark. Code Ann. § 26-52-103(a)(4) (Repl. 1994), the majority claims not to reach this argument and instead determines that the trial court erroneously dismissed the complaint pursuant to Rule 12(b)(6) because Rainbow alleged facts which constitute a claim for relief.

I do not agree that the trial court erred in granting the motion to dismiss where the sole issue to be resolved is a matter of law. Had this court previously adopted the “agreed value” approach to assessing sales tax where trade-ins are involved, the Rule 12(b)(6) dismissal would have been appropriate. It is equally appropriate for this court to adopt this “agreed-value” approach in this appeal.

Moreover, if a motion to dismiss is not a proper mechanism to resolve a legal issue, we have not drawn this distinction in the past. This court has resolved questions of law in the context of appeals from Rule 12(b)(6) dismissals on a number of occasions. See Lawhon Farm Supply Inc. v. Hayes, 316 Ark. 69, 870 S.W.2d 729 (1994) (dismissal affirmed because question of duty owed is a question of law); Brandt v. St. Vincent Infirmary, 287 Ark. 431, 701 S.W.2d 103 (1986) (dismissal affirmed because court determined that private hospitals should not be held to the Fourteenth Amendment reasonableness standard of public hospitals); Allred v. Arkansas Dep’t of Correction Sch. Dist., 322 Ark. 772, 912 S.W.2d 4 (1995) (dismissal reversed — court held that the Department of Correction School District is a public school district as a matter of law); Gordon v. Planters & Merchants Bancshares, Inc., 310 Ark. 11, 832 S.W.2d 492 (1992) (dismissal reversed where interpretation of law was in dispute — statute construed to allow cause of action by a customer against a collecting bank for charge-backs); Attwood v. Estate of Attwood, 276 Ark. 230, 633 S.W.2d 366 (1992) (dismissal reversed — court held for the first time that an unemancipated minor may sue a parent for a willful tort); Blagg v. Blagg, 272 Ark. 185, 612 S.W.2d 231 (1981) (dismissal reversed — court extended liability of builder-vendor for implied warranty of fitness of habitation to subsequent purchasers).

Two of these cases resulted in the affirmance of the trial court’s dismissal, not merely for failure to state a cause of action, but for failure to have a cause of action, as a matter of law. In Brandt, supra, this court had the option of affirming the dismissal or affirming on the basis of summary judgment, as the appellee had moved for both. Indeed, the concurring justices in Brandt took issue with the majority’s resolution of the legal question presented and instead would have affirmed on the basis of a summary judgment.

Here, in arguing that the Rule 12(b)(6) dismissal was procedurally improper, Rainbow attempts to manufacture a factual dispute, and the majority has swallowed this argument. However, the issue is which of the two values pled by Rainbow is appropriate for tax purposes; this is clearly a legal, not a factual, dispute.

Finally, Rainbow contends that the Rule 12(b)(6) dismissal was improper because DFA referred to sales tickets, invoices, and bills of sale in its brief in support of the motion to dismiss, and such documents were not attached to the pleadings before the court. Rainbow’s argument ignores the fact that all the necessary facts to support the trial court’s dismissal were contained in its lengthy and detailed complaint; the trial court did not need to refer to any other documents in reaching its decision. Accordingly, the trial court’s Rule 12(b)(6) dismissal was a proper mechanism to decide this legal question of first impression and is consistent with prior decisions of this court.

I would reach the legal question presented now; this court will eventually have to do so, as this case will likely return on an appeal from summary judgment.

I respectfully dissent.

Dudley, J., joins in this dissent.


author: DONALD L. Corbin, Justice. Robert H. Dudley, Justice,

text:
    Joe SMOTHERS v. James CLOUETTE
    96-324
    934 S.W.2d 923
    Supreme Court of Arkansas
    Opinion delivered December 23, 1996

      Kathy A. Cruz and Donald R. Roberts, for appellant.

      Appellee, pro se.
   DONALD L. Corbin, Justice.

Appellant Joe Smothers appeals the order of the Lincoln County Circuit Court dismissing with prejudice his cause of action against Appellee James Clouette for legal malpractice on the ground that the statute of limitations barred the claim. Appellant contends on appeal that the trial court erred in dismissing the action either pursuant to ARCP Rule 12(b)(6) or ARCP Rule 56. Because this appeal involves a question on the law of torts, our jurisdiction is pursuant to Ark. Sup. Ct. R. 1-2 (a) (15). We believe there were genuine issues of material fact to be resolved, and we reverse.

I. Facts and Procedural History

Appellant filed a complaint in the Lincoln County Circuit Court on October 9, 1991, alleging that Appellee was professionally negligent in his representation of Appellant on criminal charges of rape, robbery, and kidnapping filed in the Pulaski County Circuit Court. The charges were alleged to have been committed by Appellant on February 1, 1986, although Appellant did not retain Appellee to represent him on the charges until November 1, 1986. The complaint reflects that on November 4, 1986, Appellant was convicted of all three charges after a bench trial. On November 25, 1986, Appellant was sentenced to life imprisonment on the charge of rape, forty years on the charge of kidnapping, and twenty years on the charge of robbery.

The complaint reflects that in a letter dated February 12, 1987, Appellee notified Appellant that a notice of appeal had been filed on his behalf. Subsequently, Appellee notified Appellant that there had been some difficulty in lodging the trial transcript because the court reporter had been ill. Appellee later notified Appellant that the costs for the trial transcript had been paid and that the transcript would be filed within fifteen days. For whatever reason, the trial transcript was never lodged, and no motion for belated appeal was ever submitted to this court.

Appellant claimed that Appellee committed legal malpractice in faffing to perfect an appeal of the charges, and that his cause of action was not barred by the statute of limitations because the attorney-client relationship continued through February 2, 1990, and because Appellee intentionally and fraudulently concealed his negligence. Appellee responded to Appellant’s complaint by asserting that Appellant terminated the attorney-client relationship in a letter dated September 8, 1988, and that as a result, Appellant’s claim was barred by the statute of limitations as it was filed three years and one month after the attorney-client relationship was terminated. Appellee filed both a motion to dismiss pursuant to AR.CP Rule 12(b)(6) and a motion for summary judgment pursuant to ARCP Rule 56. Appellee supported both motions by arguing that Appellant’s case was barred by the statute of limitations. The trial court ultimately agreed with Appellee and dismissed the case on the ground that it was barred by the statute of limitations. This appeal resulted.

II. Summary Judgment

Appellant contends on appeal that the trial court erred in granting summary judgment because there were two issues of material fact yet to be resolved: (1) The date on which the attorney-client relationship was terminated; and (2) whether there were affirmative acts of concealment and fraud by Appellee that prevented Appellant’s discovery that Appellee had not perfected the appeal. Additionally, Appellant points out that the trial court’s order is confusing in that it does not reflect whether the court was granting Appellee’s motion to dismiss pursuant to ARCP Rule 12(b)(6) or his motion for summary judgment pursuant to ARCP Rule 56.

The trial court’s order reflects that the trial judge considered the pleadings and “all other things and matters before the Court.” It is clear from the abstract provided to us that the parties presented affidavits and other matters outside the pleadings to the trial court on the motion to dismiss. As such, we will treat the motion as one for summary judgment. See ARCP Rule 12(b)(6); Cherepski v. Walker, 323 Ark. 43, 913 S.W.2d 761 (1996); Deitsch v. Tillery, 309 Ark. 401, 833 S.W.2d 760 (1992). Summary judgment should only be granted when there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. Cherepski, 323 Ark. 43, 913 S.W.2d 761. We view the evidence in a light most favorable to the party against whom the motion was filed, resolving all doubts and inferences against the moving party. Id. Our review is limited to an examination of the evidentiary items presented below in order to determine whether the trial court correctly ruled that those items left no material factor in dispute. Id.

This court has consistently recognized that the three-year statute of limitations applies to actions against an attorney for negligence. See Stoltz v. Friday, 325 Ark. 399, 926 S.W.2d 438 (1996); Smith v. Elder, 312 Ark. 384, 849 S.W.2d 513 (1993); Goldsby v. Fairley, 309 Ark. 380, 831 S.W.2d 142 (1992); Chapman v. Alexander, 307 Ark. 87, 817 S.W.2d 425 (1991); Ark. Code Ann. § 16-56-105 (1987). The statute of limitations in such actions begins to run, in the absence of concealment of the wrong, when the negligence occurs, not when the negligence is discovered. Stoltz, 325 Ark. 399, 926 S.W.2d 438; Goldsby, 309 Ark. 380, 831 S.W.2d 142. Where affirmative acts of concealment by the person charged with fraud prevent the discovery of that person’s misrepresentations, the statute of limitations will be tolled until the fraud is discovered or should have been discovered with the exercise of reasonable diligence. Wilson v. General Elec. Capital Auto Lease, Inc., 311 Ark. 84, 841 S.W.2d 619 (1992). This court has previously held that “[although the question of fraudulent concealment is normally a question of fact that is not suited for summary judgment, when the evidence leaves no room for a reasonable difference of opinion, a trial court may resolve fact issues as a matter of law.” Alexander v. Flake, 322 Ark. 239, 241, 910 S.W.2d 190, 191 (1995).

We conclude that the evidence submitted below, primarily in the form of Appellant’s affidavit, did leave room for a reasonable difference of opinion, and that there was a fact question as to whether the statute of limitations was tolled by any affirmative acts of fraud or concealment on the part of Appellee. Furthermore, we conclude that there was a fact question as to when the negligent act occurred, and consequendy, as to when the statute of limitations began to run. We thus reverse the decision of the trial court and remand the case so that these questions of fact may be resolved.

We note that because we treat the trial court’s ruling as one of summary judgment, which was limited to the statute of limitations issue, we are not addressing the Rule 12(b)(6) issue pertaining to any defects in the pleadings. On remand, the parties are not barred from raising this issue in the trial court.

Reversed and remanded.

Dudley and Glaze, JJ., dissent.

JESSON, C.J., not participating.

Robert H. Dudley, Justice,

dissenting. Joe Smothers employed James Clouette to represent him on three criminal charges. Smothers was convicted on each charge and subsequently filed this legal malpractice suit against Clouette. Smothers alleged that Clouette was negligent in representing him because he failed to timely perfect an appeal and then failed to seek a belated appeal. Smothers asked for $750,000 in damages for mental anguish as a result of being incarcerated. However, Smothers did not plead alleging that, but for the failure to perfect the appeal, the result in the underlying criminal charges would have been different.

In response to Smothers’s complaint, Clouette filed a motion to dismiss for failure to state a cause of action, see Ark. R. Civ. P. 12(b)(6), and a motion for summary judgment because the statute of limitations had run. The trial court granted the motion to dismiss without specifying whether it was based on 12(b)(6) or on summary judgment.

The majority opinion holds that the granting of summary judgment was in error, and I agree. However, I would not reverse and remand, because the trial court could have correctly granted the motion based on Rule 12(b)(6).

We have often held that we will affirm a trial court if the trial court reached the right result, even though the trial court may have given the wrong reason. Marine Servs. Unlimited, Inc. v. Rake, 323 Ark. 757, 918 S.W.2d 132 (1996). Here, the trial court reached the right result, because the case should have been dismissed for failure to state a cause of action.

In order to state a cause of action for legal malpractice, the plaintiff must show that but for the alleged negligence, the result in the underlying action would have been different. Schmidt v. Pearson, Evans & Chadwick, 326 Ark. 499, 931 S.W.2d 774 (1996); Tyson Foods, Inc. v. Adams, 326 Ark. 300, 930 S.W.2d 374 (1996); Anthony v. Kaplan, 324 Ark. 52, 918 S.W.2d 174 (1996); Callahan v. Clark, 321 Ark. 376, 901 S.W.2d 842 (1995). Smothers did not plead any facts showing that, if the appeal had been perfected, the underlying results would have been different. Thus, the trial court should have granted the motion to dismiss, but should have based the dismissal on Smothers’s failure to state a cause of action.

The trial court granted a dismissal, but it should have granted a dismissal without prejudice for failure to state a cause of action. We should affirm, but modify the dismissal to one without prejudice. The case of Ratliff v. Moss, 284 Ark. 16, 678 S.W.2d 369 (1984), is squarely on point.

GLAZE, J., joins in this dissent.


author: DONALD L. Corbin, Justice.

text:
    SOUTHERN FARM BUREAU CASUALTY INSURANCE COMPANY v. Elisha ALLEN
    96-122
    934 S.W.2d 527
    Supreme Court of Arkansas
    Opinion delivered December 23, 1996

      Laser, Wilson, Bufford & Watts, P.A., by: Sam Laser and Brian Allen Broum, for appellant.

      Gibson Law Office, by: C.S. “Chuck” Gibson, II, for appellee.
   DONALD L. Corbin, Justice.

Appellant, Southern Farm Bureau Casualty Insurance Company, appeals the judgment of the Desha County Circuit Court awarding its insured, Appellee Elisha Allen, $10,000.00 in compensatory damages pursuant to directed verdicts and $75,000.00 in punitive damages pursuant to a jury verdict. Appellant also appeals from a subsequent order awarding prejudgment and postjudgment interest, costs, penalty, and attorney’s fees. For reversal, Appellant argues the trial court erred in submitting to the jury the tort claims of first-party bad faith and outrage. This appeal involves questions about the law of torts, and our jurisdiction is pursuant to Ark. Sup. Ct. R. 1-2 (a) (15). We find no merit to Appellant’s arguments and affirm.

Facts and Procedural History

The complaint alleges the following facts. Appellee is Appellant’s insured. Appellee’s son, Anthony Dewayne Allen, was living with Appellee when he was killed in a motor vehicle accident on February 29, 1992. Appellee’s son, Eddie Allen, visited Appellant’s local office and informed the agent that the family had incurred funeral expenses for Anthony Allen’s funeral and that Anthony Allen was living at Appellee’s home. The local agent, Joe Herron, then informed Eddie Allen that there was no coverage for Anthony Allen. In May 1993, Appellant determined there was coverage available for Anthony Allen and paid Leroy Hill, the driver of the other vehicle involved in the accident on February 29, 1992, $26,000.00 for personal and property damages.

Based on the aforementioned facts, the complaint alleges two causes of action — breach of contract and the tort of first-party bad faith. As to the claim for breach of contract, the complaint states that Appellee’s policy included coverage for Anthony Allen’s funeral expenses under “COVERAGE C. MEDICAL PAYMENTS” and that Appellant breached its obligation pursuant to Ark. Code Ann. § 23-89-202 (Repl. 1992) to provide no-fault death-indemnity benefits. As to the tort claim for first-party bad faith, the complaint alleges among other things, that Appellant’s acts of bad faith included failure to pay the funeral expenses under the medical-payments coverage and failure to pay benefits to Appellee after acknowledging coverage and paying benefits to Leroy Hill.

The case was tried to a Desha County jury. At the close of Appellee’s case as plaintiff and with agreement from Appellant, the trial court directed a $5,000.00 verdict for Appellee on the medical-payments coverage. Citing section 23-89-202, and Ark. Code Ann. § 23-89-203 (Repl. 1992), and American Nat’l Property & Casualty Co. v. Ellis, 315 Ark. 524, 868 S.W.2d 469 (1994), and over Appellant’s protest, the trial court also directed a $5,000.00 verdict for Appellee on the death-benefits coverage on the basis that Elisha Allen’s rejection of that coverage in 1980 was no longer effective because he had purchased and insured vehicles since the 1980 rejection without signing subsequent rejections. Appellant does not challenge the direction of these verdicts on this appeal.

The trial court denied Appellant’s motion for directed verdict on the tort of bad faith and instructed the jury that the issues of medical-payments coverage and death-benefits coverage had already been decided, thus the only issue that would be presented to them was the issue of punitive damages. The jury returned a general verdict for Appellee and fixed punitive damages of $75,000.00. The trial court entered an order consistent with the directed verdicts of $10,000.00 in compensatory damages and the jury verdict of $75,000.00 in punitive damages. This appeal followed.

Claim for Bad Faith

At the close of Appellee’s case as plaintiff, Appellant moved for a directed verdict on Appellee’s tort claim for bad faith on the basis that Appellee had not presented any evidence of affirmative wrongful acts by Appellant. Appellant admitted breaching its contract with Appellee, but contended the breach was from oversight rather than from hatred, ill will, or dishonesty. The trial court ruled that Her-ron’s testimony presented a jury question as to bad faith and denied Appellant’s motion.

Appellant then presented its case, which consisted of a single witness, Appellant’s employee Steve Murray, and three exhibits: (1) no-fault endorsements for medical benefits, accidental-death benefits, and income-disability benefits; (2) Appellee’s application for insurance dated January 4, 1980, where he rejected uninsured-motorist coverage and no-fault coverage; and (3) Appellee’s 1980 declaration sheet. Murray testified that he and Scott St. John, a claims representative for Appellant, determined that Anthony Allen was a resident of Appellee’s household and therefore coverage existed. Murray stated that based on that determination, Appellant paid $27,500.00 to Hill and Hill’s passenger. Appellant then rested and “renew[ed] its motion for a directed verdict for the reasons stated before.” Again, the court denied the motion, ruling there were issues to be decided by the jury.

As its first point for reversal of this ruling, Appellant contends there was no evidence from which a reasonable person could conclude Appellant committed the tort of bad faith, therefore the trial court erred in submitting this issue to the jury. Specifically, Appellant contends there is no substantial evidence of affirmative acts to support a claim of bad faith. Rather, in Appellant’s view, there is only evidence that Appellant failed to recognke that Appellee had medical-payments coverage. In essence, Appellant contends its actions were negligent but not malicious and relies heavily on our prior decisions that negligence, gross ignorance, or a complete failure to investigate a claim are not sufficient to establish a claim for the tort of bad faith. First Marine Ins. Co. v. Booth, 317 Ark. 91, 876 S.W.2d 255 (1994); Reynolds v. Shelter Mut. Ins. Co., 313 Ark. 145, 852 S.W.2d 799 (1993).

We recently summarized our law on the tort of bad faith:

The components of the tort of bad faith are affirmative misconduct by an insurer, without a good-faith defense, which is dishonest, malicious, or oppressive in an attempt to avoid liability under a policy. Aetna Casualty and Surety Co. v. Broadway Arms Corp., 281 Ark. 128, 664 S.W.2d 463 (1983).

R.J. Jones Excavating Contractor, Inc. v. Firemen’s Ins. Co., 324 Ark. 282, 289, 920 S.W.2d 483, 487 (1996). This court has also said that a claim for bad faith

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.

American Health Care Providers, Inc. v. O’Brien, 318 Ark. 438, 441-42, 886 S.W.2d 588, 590 (1994) (quoting Aetna Casualty & Surety Co. v. Broadway Arms Corp., 281 Ark. 128, 664 S.W.2d 463 (1983)).

Our standard of review of the denial of a motion for directed verdict is whether the jury’s verdict is supported by substantial evidence, which is evidence that goes beyond suspicion or conjecture and is sufficient to compel a conclusion one way or the other. Barnes, Quinn, Flake & Anderson, Inc. v. Rankins 312 Ark. 240, 848 S.W.2d 924 (1993). It is not our province to try issues of fact, we simply review the record for substantial evidence to support the jury’s verdict. John Cheeseman Trucking, Inc. v. Dougan, 313 Ark. 229, 853 S.W.2d 278 (1993). In determining whether there is substantial evidence, we view the evidence in the light most favorable to the party against whom the verdict is sought and give the evidence its strongest probative force. Integon Indem. Corp. v. Bull, 311 Ark. 61, 842 S.W.2d 1 (1992).

After reviewing the evidence in this case, we find two instances of alleged wrongdoing on Appellant’s part sufficient to ere-ate a jury question as to Appellant’s bad faith. Those instances are the two conversations that occurred between Eddie Allen and Her-ron in Herron’s office shortly after the fatal accident and then about one year later.

The central issue of the first conversation was Anthony Allen’s residence. It is undisputed that, as a resident of Appellee’s household, Anthony Allen would be an omnibus insured under Appel-lee’s policy. Eddie Allen testified that he and Herron discussed that Anthony Allen’s insurance policy had lapsed. He stated the two of them then began discussing coverage under Appellee’s policy. Eddie Allen testified that Herron asked him where Anthony Allen lived at the time of the accident and that he told Herron Anthony Allen had been living with their father. Eddie Allen testified further that Herron informed him there was no coverage for Anthony Allen under Appellee’s policy.

Appellant relies on Herron’s testimony as to this conversation. Herron stated that he never asked Eddie Allen any questions about coverage for Anthony. According to Herron’s testimony, he recalled that Eddie Allen inquired about coverage for Anthony Allen and that he only checked for coverage under Anthony Allen’s policy. Herron admitted knowing that people commonly insure their children on their policies, but expressly denied checking to see if Anthony Allen was covered under Appellee’s policy.

The central issue of the second conversation between Herron and Eddie Allen, which occurred about one year after the first conversation, was the dispute between the parties to this lawsuit. Eddie Allen testified that Herron asked him if St. John had been out to talk to his father or had offered his father a setdement and if St. John and his father had been able to reach any kind of agreement. Eddie Allen stated that he told Herron he did not think they had reached an agreement and that Herron responded that the matter would probably end up in court. At trial, Herron denied ever asking Eddie Allen whether St. John and his father had talked or reached an agreement.

Viewing this conflicting testimony in the light most favorable to Appellee as we are required to do, it is evidence from which a jury could have concluded that Herron lied about coverage available under Appellee’s policy and that Appellant actively concealed this coverage from Appellee. Any conflicts in the testimony were for the jury to resolve. Medlock v. Burden, 321 Ark. 269, 900 S.W.2d 552 (1995). Likewise, it was for the jury to determine the credibility of these two witnesses and the remainder of the evidence. Id. On appeal, we simply determine if there is substantial evidence to support the jury’s verdict. We conclude that Eddie Allen’s testimony that Herron asked about Anthony Allen’s residence, said he would check Appellee’s policy for coverage, and then told him there was no coverage provides substantial evidence of an affirmative act made in a dishonest attempt to avoid liability under a policy. We also conclude that Appellant’s dishonesty and active concealment of available coverage are substantiated further by Eddie Allen’s testimony as to the second conversation between Herron and him. Accordingly, we cannot say the trial court erred in submitting this issue to the jury and denying Appellant’s motion for a directed verdict.

Claim for Outrage

Appellant’s second point on appeal is that the trial court erred in submitting the issue of the tort of outrage to the jury based on insufficient evidence. We are procedurally barred from reaching the merits of this argument.

Our review on appeal is limited to the record as abstracted in the briefs. Lakeview Country Club, Inc. v. Superior Prods., 325 Ark. 218, 926 S.W.2d 428 (1996). Here, the abstract does not reveal that the complaint alleged a cause of action for the tort of outrage. The abstract does state that, at the close of Appellee’s case as plaintiff, in addition to moving for a directed verdict on the claim for bad faith Appellant also moved for a directed verdict on a claim for intentional infliction of emotional distress based on a lack of substantial evidence that Elisha Allen suffered severe emotional distress that a reasonable person could not be expected to endure. However, the abstract does not reveal that the trial court ever ruled on this particular motion. It was Appellant’s burden to obtain a ruling on the motion, and the absence of the ruling constitutes a waiver of this issue on appeal. Haase v. Starnes, 323 Ark. 263, 915 S.W.2d 675 (1996). Given the absence of a ruling at this stage, Appellant’s renewal at the close of all the evidence of his previous motion for directed verdict has no effect on preserving this issue for appellate review.

Appellant waived this issue further because, although the abstract reveals that the jury was instructed on the definition of extreme and outrageous conduct, there is no indication in the abstract that Appellant objected to such an instruction. The absence of an objection to the outrage instruction distinguishes this case from Dillard Dep’t Stores, Inc. v. Adams, 315 Ark. 303, 867 S.W.2d 442 (1993), where we stated that when an erroneous instruction has been given and a jury has rendered a general verdict from which prejudice due to the error cannot be ascertained, we must reverse unless some additional factor renders the erroneous instruction harmless.

On this record, we find no merit to Appellant’s arguments. The judgment is affirmed.

Special Justices Noyl Houston and Eldon F. Coffman, join in this opinion.

Jesson, C.J., and Glaze, J., not participating.


author: ROBERT L. Brown, Justice.

text:
    Kacy HIGGINS v. STATE of Arkansas
    CR 96-62
    936 S.W.2d 740
    Supreme Court of Arkansas
    Opinion delivered December 23, 1996
    [Petition for rehearing denied January 27, 1997.]

      John Wesley Hall, Jr., for appellant.

      Winston Bryant, Att’y Gen., by: Kent G. Holt, Asst. Att’y Gen., for appellee.
   ROBERT L. Brown, Justice.

The appellant, Kacy L. Higgins, was convicted of the crime of theft of property, a Class B felony, in that he exercised unauthorized control over timber owned by other persons and valued in excess of $2,500. The charge arose after Higgins, pursuant to a contract with Calvin Sprinkle, accepted $8,750 from Sprinkle for the removal of timber located on and adjacent to property known as “5803 West Barraque Street” in Pine Bluff. Higgins’s defense was that he was entided to sell the timber because he and his fiance, Barbara Shepherd, had entered into a contract to purchase the house and land located at that address, and that he was the equitable owner of the property. Higgins ultimately received a sentence of five years’ probation and a $3,000 suspended fine contingent upon his compliance with the conditions of probation. We affirm the judgment.

On November 12, 1994, Higgins and Shepherd entered into an offer and acceptance for the purchase of land located at 5803 West Barraque Street in Pine Bluff, with Rick Pierce and Betty Schrantz signing as the designated sellers. The agreement called for a purchase price of $22,000 and was contingent upon three occurrences: (1) the buyers’ obtaining suitable financing; (2) the land having an appraised value equal to or greater than $22,000; and (3) a survey reflecting that the land was three acres or more in size. The offer and acceptance called for possession to be transferred upon closing but allowed the buyers access to the property to make repairs to the house in advance of closing to facilitate financing. The house was in a state of disrepair and had been unoccupied for a period of time.

It developed at trial that the property located at 5803 West Barraque Street contained a parcel of land with 2.76 acres. Immediately adjacent to and west of that property was a strip of land containing 1.1 acres held in the name of a partnership known as “SS&P Partnership.” Rick Pierce testified that the partnership was composed of himself, his wife, and her two brothers. A central issue at trial was whether the 1.1 acres of land was included within the agreement to purchase and convey 5803 West Barraque Street. The information charging Higgins with theft stated only that Higgins exercised unauthorized control over timber owned by Rick Pierce. It did not differentiate between timber located on the 2.76 acre tract and timber located on the 1.1 acre tract.

Carroll Austin, the real estate agent who negotiated the sale, testified that he knew the offer and acceptance was based on 3 acres and later assumed that the 1.1 acre tract was included in the sale of the Barraque Street property. But he added that Rick Pierce never represented to him that this was the case. He testified that he told Higgins in person on the morning of February 3, 1995, that the 1.1 acre tract was not part of the 5803 West Barraque Street land sale. Calvin Sprinkle also testified for the prosecution. He explained that he was in the timber business and that he was contacted by Higgins on the night of February 3, 1995, about purchasing some timber. He struck an agreement with Higgins and testified that he cut approximately one acre of timber located on and around Higgins’s yard on February 6, 1995. He further related to the jury that on the written contract, Higgins marked out the February 6, 1995 date and back-dated the contract to January 20, 1995. He stated that he could not remember Higgins’s explanation for doing this. Sprinkle testified that later that day, Higgins requested immediate payment because he needed to have an operation on his head. Higgins was paid $8,750 for the timber by Sprinkle’s company.

Rick Pierce testified that timber had been taken from both the 2.76 acre tract and the 1.1 acre tract. He added that he gave no one the authority to cut the timber. He also testified as to the amount of acreage involved in the sale of 5803 West Barraque Street. He explained that his instructions to Carroll Austin were to sell the house and the land associated with it. He stated that he never intended to sell the 1.1 acre tract, and he confirmed that the two tracts, in fact, had separate owners.

Barbara Shepherd testified for the defense. She stated that when she and Higgins entered into the contract to purchase 5803 West Barraque Street, they were not told that the 1.1 acre tract was excluded. She testified at length as to the expenditures of time and money made by herself and Higgins in renovating the dilapidated property on the 2.76 acre parcel. She also testified about the events leading up to the removal of timber. She stated that on February 3, 1995, Higgins called her at work to tell her that he had learned that the 1.1 acre tract was not included within the sale of the property. She testified that as of that date, a survey had recently been done, reflecting the land to be 3.86 acres in size, thus including both tracts. She stated that it was her belief that a second survey, reflecting only the 2.76 acre tract, was performed after the timber was cut.

Higgins testified in his own defense that he had a contract to purchase both tracts of land. He relied in part on the survey done for 3.86 acres of land and a newspaper advertisement that reflected the 5803 West Barraque Street property was “over 3 acres,” to reach this conclusion. He further related to the jury a conversation he had with Carroll Austin on February 3, 1995, which differed dramatically from Austin’s rendition of the same event. He stated that Austin came out to the property and was “crying and pacing the floor” and told him he had made a mistake. But according to Higgins, Austin never told him that the 1.1 acre tract was excluded.

As to back-dating the contract between Sprinkle and himself, Higgins explained that he did so because a number of people had come by the property asking to purchase the timber and that he back-dated the contract in order to avoid a conflict and to make it look as though the agreement had been previously negotiated. His reasons for cutting the timber, he said, were for security purposes. He explained that because the property was close to a prison, he feared that escaped inmates would hide in the woods by the home. He explained that he wanted immediate payment from Sprinkle because he needed the money for surgery on his eye and for the removal of air pockets from his mouth.

I. Equitable Conversion

Higgins first challenges his conviction under the doctrine of equitable conversion. At the close of the State’s case, Higgins moved for a directed verdict on grounds that he was the equitable owner of the property and that, as a matter of law, there was no showing of the requisite intent to commit the crime because of his good faith belief in his ownership of the timber in question. The motion, which was writ' , and submitted to the court, was denied. Higgins’s abstract reflects that he renewed the motion at the close of all the evidence. The State argues that Higgins never obtained a timely ruling from the trial court on his renewal motion, but the State is wrong in this respect. The abstract reflects a ruling, and the record evidences the fact that the trial court denied the renewed motion in chambers at the beginning of the conference on instructions.

The law with respect to the denial of a directed-verdict motion was restated recendy in Peeler v. State, 326 Ark. 423, 427, 932 S.W.2d 312, 314 (1996):

A motion for directed verdict is a challenge to the sufficiency of the evidence. Stewart v. State, 320 Ark. 75, 894 S.W.2d 930 (1995); Evans v. State, 317 Ark. 449, 878 S.W.2d 409 (1994). The test is whether the verdict is supported by substantial evidence, direct or circumstantial. Evans v. State, supra; Thomas v. State, 312 Ark. 158, 847 S.W.2d 695 (1993). Substantial evidence is evidence of sufficient certainty and precision to compel a conclusion one way or another. Evans v. State, supra; Coleman v. State, 314 Ark. 143, 860 S.W.2d 747[] (1993). We review the evidence in the light most favorable to the appellee. Id.

A person commits theft of property if he “[k]nowingly takes or exercises unauthorized control over, or makes an unauthorized transfer of an interest in, the property of another person, with the purpose of depriving the owner thereof.” Ark. Code Ann. § 5-36-103(a)(1) (Supp. 1995). “Property of another person,” as defined by the Arkansas Code, does not include “property in the possession of the actor in which another has only a security interest, even though legal title is in the secured party pursuant to a conditional sales contract or other security agreement.” Ark. Code Ann. § 5-36-101(7) (Repl. 1993). Higgins urged at trial, as he does now on appeal, that the State failed to prove that the timber was the “property of another person” because of the doctrine of equitable conversion.

Higgins’s argument is not persuasive. The offer and acceptance for the sale of the Barraque Street property is unclear on precisely what acreage was included. Both the State and Higgins presented proof on this point. The evidence by the State was that Higgins knew he had no ownership interest in the 1.1 acre tract where much, if not most, of the timber was cut. Carroll Austin testified that he informed Higgins on the morning of February 3, 1995, that the 1.1 acres of land was not included in the offer and acceptance. This testimony was also substantiated by Barbara Shepherd, who testified that Higgins called her at work that day to tell her that he had been told the 1.1 acres was not included. Calvin Sprinkle then revealed that he received a phone call the night of February 3, 1995, regarding the purchase of timber. He also testified that Higgins back-dated their agreement to reflect a date of January 20, 1995, a date prior to his knowledge of the status of the 1.1 acre tract. Viewing this evidence in the light most favorable to the State, as we must, we conclude that there was substantial evidence that Higgins was not operating in good faith and knew he did not own the 1.1 acres prior to his selling the timber. This being the case, we will not consider the doctrine of equitable conversion with respect to this tract.

As already stated, the record is not clear about where the timber was cut. Because ownership of the 1.1 acres was a paramount issue at trial, it is logical to assume most of the timber was cut from that acreage. Indeed, Higgins’s counsel admitted as much at oral argument. The purchase price for the timber was $8,750. Thus, it is reasonable to conclude that theft of property in excess of $2,500 would have occurred in connection with timber taken from the 1.1 acre tract.

But even assuming that the theft occurred solely on the 2.76 acre tract, the doctrine of equitable conversion has no application in the criminal context. We agree with the conclusion reached by the Supreme Court of Colorado, when the doctrine was raised as a criminal defense:

Equitable conversion, however, is a civil property law doctrine often invoked to ascertain the rights and duties of contracting parties and those claiming under them in relation to real estate as the result of a specifically enforceable contract between them. (Citing authority.) We know of no justification to extend the doctrine to this case, which involves a criminal charge of fraudulently selling land to a third party ....

People v. Alexander, 663 P.2d 1024, 1030-31 (Colo. 1983). The trial court did not err in denying the motion for directed verdict.

II. Sentencing

When the jury first returned from its sentencing-phase deliberations, it fixed a sentence of zero imprisonment and a zero fine. One year of probation was suggested. Because the range of sentencing for theft of property over $2,500 is a fine not exceeding $15,000 or imprisonment from five to twenty years [Ark. Code Ann. §§ 5-4-201 (a)(1) and 5-4-401 (a) (3) (Repl. 1993)], or both, the trial court concluded that this was not a legal sentence and sent the jury back to deliberate once more. See AMCI 2d 9103. The jury returned with a sentence of a $3,000 fine and no imprisonment, with a suggestion of five years’ probation. The trial court’s order of probation provided for the fine and probationary sentence and that the fine would be suspended conditioned on satisfactory completion of probation.

Higgins’s sole contention under this point is that the trial court should have allowed the first sentence to stand. However, Higgins has made it clear that he does not want the matter remanded for resentencing. Under our bifurcated trial procedure, the jury fixes punishment following the penalty phase of the trial. Ark. Code Ann. § 5-4-103 (Repl. 1993). It is farther clear that the jury may recommend an alternative sentence such as suspension or probation. Ark. Code Ann. § 16-97-101(4) (Supp. 1995). See Hill v. State, 318 Ark. 408, 887 S.W.2d 275 (1994); AMCI 2d 9111. The actual assessment of probation, however, is a matter that lies within the discretion of the trial court. Ark. Code Ann. § 5-4-301 (Repl. 1993); Hill v. State, supra.

The first question before us is whether an imprisonment of zero years falls within the statutory range of from five to twenty years. Ark. Code Ann. § 5-4-401 (a)(3) (Repl. 1993). The answer is that it does not, as zero imprisonment is no imprisonment at all. The next question is whether a fine of zero dollars is a fine not exceeding $15,000. Ark. Code Ann. § 5-4-201 (a)(1) (Repl. 1993). Common sense tells us that something with no quantity or magnitude is, in fact, nothing. There was no fine in this case. The jury could have given a term of imprisonment or a fine or both, but instead, it seized none of these options. The sentence was clearly improper, and the trial court did not err in sending the jury back to reconsider the matter.

The cases cited by Higgins for the proposition that it is error to require imprisonment actually stand for the principle that it would be error to require both a term of imprisonment and a fine. See Bolden v. State, 262 Ark. 718, 561 S.W.2d 281 (1978); Brown v. State, 261 Ark. 683, 250 S.W.2d 776 (1977). Those cases are simply not relevant to the facts of this case.

Again, there was no error committed by the trial court with respect to sentencing.

III. Urine Testing

The order of probation was entered nine days after trial and included as one condition of probation: “Defendant shall not abuse alcohol nor use illegal drugs while on probation and shall submit to periodic drug screen testing as directed by probation officer.” As noted by Higgins, this was the first mention of drug-screen testing in the matter. He now argues that the urine testing was imposed on him without justification and is violative of the Fourth Amendment, though this argument was not made to the trial court.

There are only four exceptions to this court’s rule that errors may not be considered for the first time on appeal: 1) when an error is made by the trial court without knowledge of the defense counsel and without opportunity to object; 2) when a trial court should intervene on its own motion to correct a serious error by admonition or mistrial; 3) when evidentiary errors affect a defendant’s substantial rights although they were not brought to the court’s attention; and 4) when prejudice is conclusively shown by the record in death penalty cases and would unquestionably require relief under Ark. R. Crim. P. 37. Marshall v. State, 316 Ark. 753, 875 S.W.2d 814 (1994); Wicks v. State, 270 Ark. 781, 606 S.W.2d 366 (1980). Higgins contends that he falls within the first exception because he had no notice of this condition and, thus, no opportunity to object to the urine testing in the probation order.

The final order in this case, which was the order of probation and which included the urine testing, was entered on September 28, 1995. The order shows a copy going to “Attorney for Defendant.” Higgins apparently met with the Adult Probation Office on September 20, 1995, which was the day after his sentencing. Notice of appeal was filed by Higgins on October 17, 1995. We find it to be somewhat incredible that Higgins did not know about a condition of his probation prior to his appeal. Moreover, Higgins and his counsel are charged with knowledge of when the final order was entered in this case, because that commences the time for appeal. See, e.g., Nance v. State, 318 Ark. 758, 891 S.W.2d 26 (1994). Indeed, Higgins appealed from that order of probation 19 days after the order was entered. It necessarily follows that they are likewise charged with knowledge of what is in that final order.

Under our criminal rules, Higgins had 30 days from the date of that order to file some motion for relief with the trial court. Ark. R. Crim. P. 33.3, formerly Ark. R. Crim. P. 36.22; Ark. R. App. P. 2(a)(1). We have held in other contexts that a matter pertaining to a final order should be raised to the trial court. See Williams v. State, 320 Ark. 498, 898 S.W.2d 38 (1995) (appellant voiced no objection to 75-year sentence at trial); Oglesby v. Baptist Medical System, 319 Ark. 280, 891 S.W.2d 48 (1995) (appellant did not raise issue of whether battery claim was included in dismissal order to trial court and, thus, waived it). The same rationale should certainly apply to a condition of probation. No motion challenging the urine testing as a condition of probation was filed. Hence, we will not consider the issue for the first time on appeal.

Affirmed.


author: Robert L. Brown, Justice.

text:
    Rick TAYLOR, Joyce Taylor and Kenny Willis v. Jackie GILL
    96-793
    934 S.W.2d 919
    Supreme Court of Arkansas
    Opinion delivered December 23, 1996

      Matthews, Sanders, & Sayes, by: Margaret M. Newton and Mel Sayes, for appellants.

      Green, Henry, & Green, by: J.W Green, Jr., for appellee.
   Robert L. Brown, Justice.

Appellants Rick Taylor and Joyce Taylor appeal from a $40,000 judgment entered against them relating to a lawnmower injury sustained by appellee Jackie Gill. The Taylors raise several arguments for reversal, one of which is the lack of an agency relationship between them and the operator of the lawnmower, Kenny Willis. We agree with the Taylors that Willis was not acting as their agent when the injury occurred, and we reverse the judgment as it pertains to them.

Kenny Willis and the Taylors lived in the same neighborhood in Stuttgart and were friends who would, on occasion, assist each other in meeting various needs. For example, Rick Taylor would help Willis with mechanical work on his truck, while Willis would mow the Taylors’ yard because the Taylors did not own a lawnmower. Other neighbors, including Jackie Gill, would do the same. No payment was made for these services, and Willis was not paid for the mowing involved in this case.

On April 16, 1994, a day when Rick Taylor was out of town, Willis began mowing the Taylors’ yard. He was neither asked nor told to do so but was merely mowing the yard as a favor to the Taylors. Both Rick and Joyce Taylor later testified at trial that they did not know Willis would be mowing their yard on that day. Although neither of the Taylors was home when Willis commenced his task, Joyce Taylor returned from work while he was cutting the grass in her yard. She noticed that Willis was doing this but did not ask him to stop, although she acknowledged at trial that she could have done so. While Willis was mowing in a ditch on the Taylors’ property, the lawnmower hit a rock or piece of gravel which shot out from the side of the lawnmower, soared some 20 feet, and struck Jackie Gill, who was standing on the other side of a pickup truck, in the eye. Gill lost partial use of his eye.

Gill filed a complaint against Kenny Willis and the Taylors and sought damages for the personal injury he sustained as a result of Willis’s alleged negligence. The complaint asserted that Willis, acting as the Taylors’ agent, operated the lawnmower unsafely in an area where gravel and rocks were located without first determining whether it could be done without causing injury to Gill.

At the ensuing trial, the Taylors moved for a directed verdict at the close of Gill’s evidence and urged, among other things, the lack of substantial evidence to support an agency relationship. The directed-verdict motion was denied. The Taylors put on no proof, and the circuit court submitted the case to the jury on interrogatories. The jury found that Willis was 80% at fault, while Gill was 20% at fault. The jury assessed Gill’s damages at $50,000 and found that an agency relationship existed between Willis and the Taylors. The court, as a result of the verdict, reduced the $50,000 award due to Gill’s measure of fault and entered a $40,000 joint and several judgment against the Taylors and Willis.

In Pledger v. Troll Book Clubs, Inc., 316 Ark. 195, 871 S.W.2d 389 (1994), we set forth the principles of agency law followed in this state:

The burden of proving an agency relationship lies with the party asserting its existence. B.J. McAdams, Inc. v. Best Refrigerated Express, Inc., 265 Ark. 519, 579 S.W.2d 608 (1979). This court has used different definitions of agency that were appropriate for the particular cases, but each of them includes the element of control by the principal. In Evans v. White, 284 Ark. 376, 682 S.W.2d 733 (1985) and Campbell v. [Bastian], 236 Ark. 205, 365 S.W.2d [249] (196[3]), we adopted the definition of agency contained in the Restatement (Second) of Agency. We said the two essential elements of an agency relationship are (1) that an agent have the authority to act for the principal and (2) that the agent act on the principal’s behalf and be subject to the principal’s control. In Hinson v. Culberson-Stowers Chevrolet, Inc., 244 Ark. 853, 427 S.W.2d 539 (1968), we examined the Restatement definition together with a quote from 2 Am. Jur. 13, Agency § 2 and concluded that the essential elements for a showing of the agency relationship were authorization and control. Id. at 855, 427 S.W.2d at 541-42.

Pledger, 316 Ark. at 200, 871 S.W.2d at 392.

Prior to the Troll Book Clubs case, this court observed that a gratuitous undertaking could fall under the umbrella of an agency arrangement:

An agency may be defined as a contract, either express or implied, upon a consideration, or a gratuitous undertaking, by which one of the parties confides to the other the management of some business to be transacted in his name or on his account, and by which that other assumes to do the business and render an account of it.

Hinson v. Culberson-Stowers Chevrolet, Inc., 244 Ark. 853, 855, 427 S.W.2d 539, 541-42 (1968) (quoting 2 Am. Jur. 2d § 2, at 13) (emphasis added). See also Campbell v. Bastian, 236 Ark. 205, 365 S.W.2d 249 (1963).

Recendy, we cited the Restatement (Second) of Agency § 221, cmt. c (1957), to the effect that it is only necessary that there be submission by the one giving the service to the direction and control of the one receiving it as to the manner of performance. See Howard v. Dallas Morning News, Inc., 324 Ark. 91, 918 S.W.2d 178 (1996). This principle of law applies not only to a master-servant arrangement but to principal-agent relationships as well.

Our standard of review in determining whether the trial court erred in denying a motion for a directed verdict is whether the verdict of the jury is supported by substantial evidence. Barnes, Quinn, Flake & Anderson, Inc. v. Rankins, 312 Ark. 240, 848 S.W.2d 924 (1993); Young v. Johnson, 311 Ark. 551, 845 S.W.2d 510 (1993). Substantial evidence is that evidence which is beyond mere suspicion or conjecture and which is of sufficient force and character that it will, with reasonable and material certainty and precision, compel a conclusion of the matter one way or another. Anslemo v. Tuck, 325 Ark. 211, 924 S.W.2d 798 (1996); Muskogee Bridge Co. v. Stansell, 311 Ark. 113, 842 S.W.2d 15 (1992). In our review, we will only consider evidence favorable to the appellee together with all its reasonable inferences. Anslemo v. Tuck, supra; Muskogee Bridge Co. v. Stansell, supra.

Thus, focusing on the evidence most favorable to Gill, it is clear that the Taylors, who did not own a lawnmower, were benefited by the services provided by Willis. Furthermore, they did not reject Willis’s work on prior occasions; nor did they do so in this case despite the fact that Joyce Taylor returned home while he was cutting the grass and had the opportunity and authority to stop the work as the homeowner. Based on these facts, and the inference that Rick Taylor and Willis were exchanging favors, Gill urges that there is substantial evidence that Willis was acting as the Taylors’ agent when the injury occurred.

The Taylors concede that under Arkansas law an agency may be implied from the conduct of the parties even absent an express agreement. See Hinson v. Culberson-Stowers Chevrolet, supra. They further concede that they were receiving a benefit from the mowing services provided by Willis. But they maintain that there was a dearth of proof on (1) mutual consent to the agency relationship, even by implication; (2) the ability of the Taylors to control the conduct of Kenny Willis; and (3) Willis’s submission to that control. We agree.

Although no evidence was presented that Willis was asked to cut the Taylors’ grass on this particular day, a jury could reasonably conclude, based on the prior conduct of the parties, that Willis had authority to do this work. However, as our Model Jury Instruction points out, an agent is “a person who, by agreement with another called the principal, acts for the principal and is subject to his control.” AMI 3d 701 (emphasis added). See also Crouch v. Twin City Transit, Inc., 245 Ark. 778, 434 S.W.2d 816 (1968); Campbell v. Bastían, supra. The only evidence tending to establish a right of control in the Taylors over the work performed by Willis comes from the following colloquy between Gill’s counsel and Joyce Taylor on direct examination:

GILL’S COUNSEL: If Mr. Willis had been doing something that you did not approve of when you drove up on April sixteenth in mowing your yard, would you have told him to do it differently?
JOYCE TAYLOR: Yes, sir.
GILL’S COUNSEL: Being your yard, you had control?
JOYCE TAYLOR: Yes, sir.

We view this colloquy in the context in which the service was performed — as an unsolicited favor to the Taylors. Giving this evidence its most probative value, it proves only that the Taylors could have prevented Willis from mowing because of their status as property owners. For example, had Joyce Taylor observed Kenny Willis mowing in an off-limits area like a flower bed, or at a time when the lawnmower’s noise was distracting, she could have stopped him. That authority, however, does not meet the requirement, as noted in Evans v. White, supra, and Campbell v. Bastian, supra, of proving an express or implied agreement between Willis and the Taylors that Willis was subjecting himself to the control of the Taylors with respect to the methods employed in mowing the yard. Moreover, apart from the fact that Willis was working on the Taylors’ property, there was no evidence presented at trial of the intent or authority of the Taylors to control the precise manner in which Willis mowed the lawn. Again, the proof presented tended to prove only that the Taylors could force Willis to refrain from certain conduct because of their status as property owners, a condition that would apply to any third party entering the land of another to perform a service.

We think the evidence presented in this case does no more than relegate Willis to a status akin to that of an independent contractor, which we distinguished from an agent in Howard v. Dallas Morning News, Inc., supra:

On the other hand, we have defined an independent contractor as one who, exercising an independent employment, contracts to do work according to his own methods and without being subject to the control of the employer, except as to the results of the work, and have held that the right to control and not the actual control determines whether one is a servant or an independent contractor. Wilson v. Davison, 197 Ark. 99, 122 S.W.2d 539 (1938).

Howard, 324 Ark. at 100, 918 S.W.2d at 183.

In sum, we see a marked difference between the authority of Joyce Taylor to stop Willis from doing the work altogether, which she most certainly could have done, and her authority to control the exact manner in which Willis went about his task. We observe no proof that the Taylors intended to micromanage, or could have micromanaged, how Willis actually accomplished his work. Nor do we glean from the record that Willis would have subjected himself to such control in performing this favor.

Because there was no substantial evidence regarding the existence of the agency relationship, the judgment of the trial court must be reversed as to the Taylors. We remand for an order consistent with this opinion.

Reversed and remanded.

      . Though the style of the case includes Kenny Willis as an appellant, he did not appeal.