author: W.H. “Dub” Arnold, Chief Justice.

text:
    Dr. Chris CULPEPPER v. The ARKANSAS BOARD of CHIROPRACTIC EXAMINERS
    00-177
    36 S.W.3d 335
    Supreme Court of Arkansas
    Opinion delivered February 1, 2001

      Perroni & James, by: Patrick R. James and Janan Arnold Davis, for appellant.

      Mark Pryor, Att’y Gen., by: Ainsley H. Lang and Brian G. Brooks, Ass’t Att’ys Gen., for appellee.
   W.H. “Dub” Arnold, Chief Justice.

This appeal challenges a decision by the Arkansas Board of Chiropractic Examiners (the Board) holding the appellant, Dr. Chris Culpepper, in violation of a Board regulation prohibiting certain contact with prospective patients when Dr. Culpepper utilized the services of a telemarketing firm for purposes of building his clientele. At issue in this case is whether Dr. Culpepper violated a Board regulation proscribing in-person solicitation of potential clients, and, if so, whether the regulation itself violated the federal Constitution or federal antitrust law. This appeal was filed pursuant to the Arkansas Administrative Procedure Act, Ark. Code Ann. § 25-15-201 (Supp. 1999), et seq., following a finding by the Board that Dr. Culpepper had violated the regulation. The Circuit Court of Pulaski County upheld the decision of the Board. We reverse, holding the regulation in question to be an unconstitutional infringement on commercial speech, in violation of the First Amendment.

Appellant Chris Culpepper, d/b/a Liberty Chiropractic Clinic, is a sole practitioner chiropractor licensed to practice in the State of Arkansas; his clinic is located in Little Rock. Appellant utilized, among other marketing tools, the services of Physician’s Assistance Group (“PAG”) in an effort to build his clientele. PAG is a professional telemarketing company hired by appellant to inform the public of his availability. PAG’s employees would access accident reports from the area in which Dr. Culpepper practices; they would then make telephone calls to individuals who had been involved in those accidents and attempt to entice the accident victim into scheduling an appointment with him. These calls would come the day or days following the accident. The Board reviewed three reported specific incidents where this practice occurred.

The Board found that this practice violated its regulation proscribing “unprofessional acts.” The relevant portion of the regulation defines an unprofessional act as:

Direct contact with prospective patients by in-person or live telephone communication the purpose of which being to solicit professional employment from a prospective patient with whom the chiropractic physician has no family or prior professional relationship when a significant motive of the chiropractic physician’s communication and/or contact is the chiropractic pecuniary gain.

Part Two, Rules and Regulations of the Arkansas State Board of Chiropractic Examiners, Regulation C(2)(q) (“Regulation Q”). The Board fined Dr. Culpepper $3,000.00 and placed him on a one-year probation with the condition that he cease his solicitation through an outside agent. Dr. Culpepper challenged this finding; and, as stated above, the circuit court affirmed the Board’s decision and further found that Regulation Q does not violate the First or Fourteenth Amendments to the Constitution.

On appeal, Dr. Culpepper asserts the following:

1) The regulation is in violation of the First Amendment to the United States Constitution [as an unconstitutional infringement on commercial speech];
2) The rule [regulation] is in violation of the Equal Protection Clause of the Fourteenth Amendment;
3) The Board’s decision to find Dr. Culpepper in violation of the Board’s rules was not supported by substantial evidence and was arbitrary and capricious [i.e., his actions did not violate the Regulation];
4) Regulation Q constitutes an unfair restraint of competition [trade].

Standard of Review

Decisions of the Arkansas State Board of Chiropractic Examiners are subject to the Arkansas Administrative Procedure Act (A.P.A.) Ark. Code Ann. § 25-15-201, et seq. The Arkansas A.P.A. allows this Court to review the decision of the administrative agency notwithstanding the decision rendered by the circuit court, whose review is limited in scope by Ark. Code Ann. § 25-15-212(h) (Supp. 1999). Ford v. Keith, 338 Ark. 487, 996 S.W.2d 20 (1999).

In an appeal from an administrative order, our review is directed to the agency’s decision, not the circuit court’s. Hankins v. Department of Finance and Administration, 330 Ark. 492, 954 S.W.2d 259 (1997). When reviewing administrative decisions, we will review the entire record to determine whether there is any substantial evidence to support the administrative agency’s decision, whether there is arbitrary and capricious action, or whether the action is characterized by abuse of discretion. Wright v. Arkansas State Plant Board, 311 Ark. 125, 130, 842 S.W.2d 42 (1992). We recognize that

administrative agencies are better equipped than courts, by specialization, insight through experience, and more flexible procedures to determine and analyze underlying legal issues affecting their agencies, and this recognition accounts for the limited scope of judicial review of administrative action and the refusal of the court to substitute its judgment and discretion for that of the administrative agency.

Wright, 311 Ark. at 130. As such, the administrative agency is afforded great deference.

Evidence is given its strongest probative force in favor of the agency’s ruling, and we will not reverse an agency decision when there is substantial evidence to support it. Arkansas Bank & Trust Co. v. Douglass, 318 Ark. 457, 885 S.W.2d 863 (1994). To determine whether a decision is supported by substantial evidence, we review the entire record to ascertain if it is supported by relevant evidence that a reasonable mind might accept as adequate to support a conclusion. Wright, supra (citing Livingston v. Arkansas State Medical Bd., 288 Ark. 1, 701 S.W.2d 361 (1986); Partlow v. Arkansas State Police Comm’n, 271 Ark. 351, 609 S.W.2d 23 (1980)).

First Amendment Violation

Appellant asserts that Regulation Q is an unconstitutional infringement on commercial speech in violation of the First Amendment. We agree. Commercial speech is “expression related solely to the economic interests of the speaker and its audience.” Central Hudson Gas & Elec. v. Public Serv. Comm’n, 447 U.S. 557 (1980). The United States Supreme Court has held that “the First Amendment, as applied to the States through the Fourteenth Amendment, protects commercial speech from unwarranted governmental regulation.” Id.

In Central Hudson, the Court also explained that:

[T]he First Amendment’s concern for commercial speech is based on the informational function of advertising. Consequently, there can be no constitutional objection to the suppression of commercial messages that do not accurately inform the public about lawful activity. The government may ban forms of communication more likely to deceive the public than to inform it, commercial speech related to illegal activity
If the communication is neither misleading nor related to unlawful activity, the government’s power is more circumscribed. The State must assert a substantial interest to be achieved by restrictions on commercial speech. Moreover, the regulatory technique must be in proportion to that interest. The limitation on expression must be designed carefully to achieve the States goal. Compliance with this requirement may be measured by two criteria. First, the restriction must directly advance the state interest involved; the regulation may not be sustained if it provides only ineffective or remote support for the government’s purpose. Second, if the governmental interest could be served as well by a more limited restriction on commercial speech, the excessive restrictions cannot survive.

Id. (internal citations omitted). The Supreme Court has explained that a restriction on commercial free speech must be “narrowly tailored to achieve the desired objective.” Florida Bar v. Went For It, Inc., 515 U.S. 618 (1995).

In Central Hudson, the Court outlined a four-pronged test to apply to regulations that restrict commercial speech. Specifically, it held:

In commercial speech cases, then, a four-part analysis has developed. At the outset, we must determine whether the expression is protected by the First Amendment. For commercial speech to come within that provision, it at least must concern lawful activity and not be misleading. Next, we ask whether the asserted governmental interest is substantial. If both inquiries yield positive answers, we must determine whether the regulation directly advances the governmental interest asserted, and whether it is not more extensive than is necessary to serve that interest.

Central Hudson, 447 U.S. at 566.

The Court has also noted that when evaluating a challenge to a restriction on commercial speech “[t]he party seeking to uphold a restriction on commercial speech carries the burden of justifying it. This burden is not satisfied by mere speculation or conjecture; rather, a governmental body seeking to sustain a restriction on commercial speech must demonstrate that the harms it recites are real, and that its restriction will in fact alleviate them to a material degree.” Edenfield v. Fane, 507 U.S. 761 (1993).

In the instant case, appellee, a State agency, has implemented guidelines for chiropractic physicians. Included within these regulations is Regulation Q. Both appellant and appellee agree that this regulation is a restriction on commercial speech. Additionally, both appellant and appellee agree that appellant’s solicitation of potential patients through PAG was not misleading. However, the parties disagree as to whether the regulation is a violation of appellant’s First Amendment right pursuant to the Central Hudson test. Thus, it is necessary for us to apply the four-pronged analysis in the form of “intermediate scrutiny” established by Central Hudson to the regulation now before this court.

First, the regulation must concern a lawful activity and not be misleading. See, Central Hudson supra. As was previously discussed this prong is not challenged by the parties. Next, we must determine whether the governmental interest is substantial. See Central Hudson, supra. In Cambiano v. Neal, 342 Ark. 691, 35 S.W.3d 792 (2000), we noted that, generally, states have a strong interest and a right to regulate professions within their boundaries, and they bear “a special responsibility for maintaining standards among members of the licensed professions.” Cambiano (quoting Ohratik v. Ohio State Bar Assn., 436 U.S. 447, 460 (1978). In addition, appellee has asserted the following interests: (1) protecting the tranquility and privacy of the home; (2) protecting people from overreaching and pressure at a time when their judgment may be impaired by medication and trauma form a recent accident; (3) the State’s interest in establishing standards for licensing and regulating professional practitioners of chiropractic medicine in such a way as to protect the reputation of the profession: and, (4) the State’s interest in reducing unnecessary medical treatment, reducing insurance costs and protecting citizens from possible overreaching by health care providers attempting to influence people to seek medical aid. Appellant does not challenge appellee’s articulated governmental interests.

Next, we must determine whether Regulation Q directly advances the governmental interests asserted. See, Central Hudson, supra. This requirement was discussed by the Supreme Court in Went For It, supra. The United States Supreme Court explained that:

[ T]he State must demonstrate that the challenged regulation advances the Government’s interest in a direct and material way. That burden, we have explained, is not satisfied by mere speculation or conjecture; rather, a governmental body seeking to sustain a restriction on commercial speech must demonstrate that the harms it recites are real and that its restriction will in fact alleviate them to a material degree.
In Edenfield, the Court invalidated a Florida ban on in-person solicitation by certified public accountants (CPAs). We observed that the State Board of Accountancy had “presented] no studies that suggest personal solicitation of prospective business clients by CPAs creates the dangers of fraud, overreaching, or compromised independence that the Board claims to fear. ” Moreover, “[t]he record [did] not disclose any anecdotal evidence, either from Florida or another State, that validate[d] the Board’s suppositions.” Finding nothing in the record to substantiate the State’s allegations of harm, we invalidated the regulation.

Went For It, supra (internal citations omitted) (emphasis added).

Applying this language to the case now before us, we hold that Regulation Q does not withstand Central Hudson scrutiny, as appellee has failed to present specific information which details how Regulation Q furthers the articulated governmental interests. Appellee has not presented the necessary empirical evidence to support its alleged governmental interests at any stage of this case. Specifically, appellee failed to present studies or testimony of how such a restriction on in-person solicitation will advance the governmental interests in a direct and material way. While the State did present some limited anecdotal evidence to support the necessity of the regulation, anecdotal evidence was likewise presented for the opposing view. We hold, therefore, that appellee has failed to meet its burden of proof that Regulation Q will directly and materially advance the governmental interests asserted.

We further hold that Regulation Q is not sufficiently “narrowly tailored” to protect the governmental interests asserted without overly burdening appellant’s First Amendment rights. In fact, the Board obtained anecdotal evidence after Regulation Q was promulgated; therefore, that evidence could not have been used by the Board to “narrowly tailor” the regulation to advance the asserted governmental interests without burdening appellant’s First Amendment rights. We hold that it is not sufficiently tailored and is more extensive than necessary. Several other jurisdictions have addressed this issue, and we turn to them for guidance.

First, in Bailey v. Morales, 190 F.3d 320 (5th cir. 1999), the Fifth Circuit Court of Appeals reviewed a Texas regulation which restricted the commercial speech of chiropractors. The regulation prohibited “chiropractors and other professionals from soliciting employment, in person or over the telephone, from individuals who have a special need for chiropractic services arising out of a particular occurrence.” The act also prohibited “solicitation via runners or telemarketing and by distributing promotional gifts and items.” Bailey, a licensed chiropractor, sought an injunction and declaratory relief arguing that the regulation violated his First Amendment rights. The Fifth Circuit, after applying the Central Hudson test to the regulation, held:

[ W]e conclude that this section is neither reasonably tailored nor reasonably proportional to the harm the State seeks to prevent. It is not limited to in-person or telephonic solicitation of an injured or ill person; rather, this section facially applies to any advertising, including advertising via public media, that offers money or anything of value (e.g., a free adjustment) to induce a client to try chiropractic services. The section is not bounded by a time limit (such as Went For It’s 30 day moratorium) or target group (for instance, Went For It’s recent victims of accidents). And the section criminalizes commercial speech that is both unobjectionable and unquestionably protected by the first amendment (e.g., a print advertisement offering a free adjustment to anyone interested).

Bailey, supra. Because the regulation was not narrowly tailored, the court thereafter concluded that the regulation was unconstitutional. Id.

Additionally, the Louisiana Supreme Court had occasion to review a restriction on commercial speech in Gregory v. Louisiana Board of Chiropractic Examiners, 608 So. 2d 987 (1992). The regulation in Gregory stated:

A. A health care provider or person designated, contracted, or paid by the health care provider, shall not directly solicit by phone or mail, patients or potential patients who, because of their particular circumstances, are vulnerable to undue influence. Circumstances in which patients or potential patients may be considered to be vulnerable to undue influence include but are not limited to:
(1) When a person is known to the health care provider to have recently been involved in a motor vehicle accident.
(2) When a person is known to the health care provider to have recently been involved in a work-related accident.
(3) When a person is known to the health care provider to have recently been injured by another person or as a result of another person’s actions.
B. Nothing in this Section shall be construed to prohibit advertising, except that which is false, misleading, or deceptive, nor to prohibit outreach services for prenatal, postpartal, child health care, and communicable disease control.

Gregory, supra. The Louisiana court reviewed the numerous Supreme Court cases, including Central Hudson, and held that:

[ I]n the present case, abuses can-be controlled and mistakes can be prevented by less restrictive means than a blanket ban on direct mail solicitations which are targeted at recent accident victims. While the state is not required to use the least restrictive means of regulating commercial speech, the state is required to choose a reasonable means of regulation which is in proportion to the interest that is served. Written information about chiropractic services can be presented in a nondeceptive mannér, and the state may only impose restrictions reasonably necessary to prevent deception. In re R.M.J., 455 U.S. 191, 102 S.Ct. 929, 71 L.Ed.2d 64 (1982). The interference with commercial speech in the statute at issue is broader than is necessary to prevent the evil feared by the Board. Although telephone solicitation is in-person solicitation and a total ban on such solicitation may be permissible, such an extensive restriction on targeted direct mail solicitation is not.

Gregory, supra. See also, Silverman v. Walkup, 21 F. Supp. 2d 775 (E. Dist. Tenn. 1998).

We hold that Regulation Q, like the regulations in Bailey and Gregory, is not sufficiently narrowly tailored. Regulation Q is an absolute prohibition of a chiropractor’s commercial speech. If Regulation Q was enacted to battle the governmental interests articulated by appellee, it could have been more narrowly drawn. For example, the regulation could have put a time restriction upon which solicitation was prohibited or the regulation could have identified a target group, such as accident victims, which could not be solicited. However, Regulation Q virtually has no parameters, nor does it offer any exemptions from the absolute ban on direct in-person contact. The type of broad “prophylactic rule” found in Regulation Q violates an individual’s right to freedom of speech. See, Bailey, supra. Thus, we hold that Regulation Q was not narrowly tailored to achieve the articulated State interests; as such, we invalidate the regulation. Having held that Regulation Q violates appellant’s First Amendment rights and reversing the case, as a result, it becomes unnecessary to address appellant’s remaining points on appeal.

Reversed.


source: Caselaw Access Project

license: Public Domain

text:
    Brenda HEAD v. Wilbur M. GILES, M.D.; and Virginia Reciprocal Insurance Company
    00-111
    36 S.W.3d 344
    Supreme Court of Arkansas
    Opinion delivered February 1, 2001

      Gordon, Caruth & Virden, P.L.C., by: Bart F. Virden andJeannie L. Denniston, for appellant.

      Friday, Eldredge & Clark, by: Laura Hensley Smith and Jason Hendren, for appellees.
   W.H. “Dub” Arnold, Chief Justice.

Appellant, Brenda Head, raises an issue of first impression concerning the interpretation of Ark. R. Civ. P. 36 and 41 (2000). Specifically, Head questions whether a second cause of action involving the same parties and claims, filed after a previous voluntary nonsuit, is an “other proceeding” under Rule 36, and whether admissions made under Rule 36 in the nonsuited action may be used against a party in the second case. Our jurisdiction is authorized pursuant to Ark. R. Sup. Ct. l-2(d) and l-2(b)(l), and (6) (2000). Notably, we consider this same first-impression issue in a companion case, Norrell v. Giles, 343 Ark. 504, 36 S.W.3d 342 (2001).

Background

The facts are undisputed. On September 25, 1997, appellant filed a medical-negligence complaint against appellees, Dr. Wilbur M. Giles and Virginia Reciprocal Insurance Company, Baptist Medical Center’s liability-insurance carrier. Both appellees filed answers denying each of the material allegations of negligence. Subsequently, on February 3, 1998, appellees filed requests for admissions with Head. Significantly, two requests stated:

Request for Admission No. 4: Admit that these defendants were not negligent in their care and treatment of the plaintiff.
Request for Admission No. 5: Admit that any actions or inactions on the part of these defendants were not the proximate cause of any damages or injuries alleged in the Complaint.

Head neither filed a response nor an objection to the requests. As a result of her failure to respond, appellees filed a motion pursuant to Ark. R. Civ. P. 36(a) for the requests to be deemed admitted. The trial court granted the motion. Head then elected to voluntarily nonsuit her claims per Ark. R. Civ. P. 41.

Ultimately, Head refiled the action against both appellees on May 25, 1999. The second case asserted the identical claims advanced by appellant in the nonsuited action. Dr. Wilbur and Virginia Reciprocal again filed answers denying the allegations of medical negligence. Appellees also filed a motion for summary judgment. In support of the motion, appellees argued that the pending action was the same action as the first, not an “other proceeding.” Consequently, Head’s admissions carried over to the second case, despite her voluntary nonsuit. If the admissions remained effective and could be used against appellant, there remained no genuine issues of material fact. Accordingly, appellees contended that summary judgment was appropriate as a matter of law. The trial court agreed and granted appellees’ motion. From that order comes the instant appeal.

Ark. R. Civ. R 36

The sole issue on appeal challenges the trial court’s order in light of Ark. R. Civ. P. 36(b), that states, in pertinent part:

Effect of Admission. Any matter admitted under this rale is conclusively established unless the court on motion permits withdrawal or amendment of the admission. . . . Any admission made by a party under this rule is for the purpose of the pending action only and is not an admission by him for any other purpose, nor may it be used against him in any other proceeding.

(Emphasis added.) In light of our reasoning in Norrell v. Giles, 343 Ark. 504, 36 S.W.3d 342 (2001) and the plain language of Ark. R. Civ. P. 36(b), we reverse the trial court’s grant of summary judgment. Matters admitted under Rule 36 in the nonsuited action were for the purposes of the “pending action only” and were not admissions by her “for any other purpose,” nor may they be used against her in “any other proceeding.” See Ark. R. Civ. P. 36(b) (2000). Viewing the evidence in the light most favorable to appellant, resolving any doubts against appellees, and acknowledging that there remain no genuine issues of material fact, we hold that the trial court erred by finding that appellees were entitled to a judgment as a matter of law.

Reversed and remanded.


author: TOM Glaze, Justice. Annabelle Clinton Imber, Justice,

text:
    Diane M. RAYMOND v. Daniel A. RAYMOND
    00-751
    36 S.W.3d 733
    Supreme Court of Arkansas
    Opinion delivered February 1, 2001
    [Petition for rehearing denied March 1, 2001.]

      Mashburn & Taylor, by; Scott E. Smith, for appellant.

      Matthews, Campbell, Rhoads, McClure, Thompson, & Fryauf, BA., by: David R. Matthews, for appellee.
   TOM Glaze, Justice.

This appeal involves a divorce decree entered in appellee Daniel A. Raymond’s favor against his wife, Diane M. Raymond. Daniel filed a divorce complaint on December 30, 1996, but it is undisputed that Diane was never served with process, nor did Diane ever receive a copy of the complaint. Instead, both parties signed what was designated a “conditional reconciliation agreement” which was filed with the chancery clerk on April 2, 1997, 93 days after Daniel filed his complaint. The agreement provided it would “shortly” be filed as an attachment to the divorce complaint.

From the wording of the agreement, Diane agreed, among other things, not . to partake of alcoholic beverages or illegal drugs, and she would undergo counseling and treatment. The parties further agreed that, by entering into the agreement and resuming their cohabitation, they were pursuing a trial reconciliation. In consideration of Diane’s compliance with discontinuing her abuse of alcohol and drugs, during a six-month period, the agreement recited that Daniel would dismiss his divorce complaint. If Diane failed to comply, she in turn agreed to “accept a divorce, leave the house with her car, personal belongings, and $20,000.00,” and not make any claims to any real and personal properties, marital or non-marital.

The parties’ reconciliation efforts failed. They subsequendy executed a property settlement agreement, and Diane signed what was labeled a “waiver and entry of appearance”; however, this pleading did not have her waive service of process, nor did she acknowledge receipt of Daniel’s divorce complaint. Rather, the pleading simply acknowledged receipt of the parties’ property settlement agreement and reflected her waiver of the right to appear without further notice. These papers were filed along with a divorce decree on May 12, 1997, or 133 days after Daniel filed his complaint. It is undisputed that (1) Diane was not represented by counsel prior to the filing of the decree, (2) she never received a copy of the divorce complaint, and (3) she never specifically waived service of process either when the complaint was filed or before the divorce decree was entered.

Diane later obtained counsel, and on March 5, 1999, she petitioned to the court to set aside the May 12, 1997, divorce decree. While she acknowledged having signed the conditional reconciliation agreement and a property settlement agreement, Diane alleged that, during that time, she was dependent upon Daniel for guidance and advice because she suffered from alcoholism. Her paramount contention for setting aside the May 12, 1997, decree was that the chancery court granting the decree had not acquired jurisdiction to do so because Daniel had never perfected service of process on Diane, nor did he deliver to her a copy of his complaint.

In support of her contention, she largely relied on Ark. R. Civ. P. 4(a) and (i), which govern service of process. Rule 4(a) provides that “[u]pon the filling of the complaint, the clerk shall forthwith issue a summons and cause it to be delivered for service to a sheriff or to a person appointed by the court or authorized by law to serve process.” Rule 4(i) further provides the following:

If service of the summons is not made upon a defendant within 120 days after the filing of the complaint, the action shall be dismissed as to that defendant without prejudice upon motion or upon the court’s initiative. If a motion to extend is made within 120 days of the filing of the suit, the time for service may be extended by the court upon a showing of good cause. (Emphasis added.)

As alluded to above, it is uncontroverted that Daniel never perfected service of process on Diane within 120 days after filing his complaint, nor did he serve a copy of his complaint on her or have her sign an entry of appearance whereby she waived service of summons within that required 120-day period. These failures, Diane asserted, rendered the chancery court without authority to hear or decide the parties’ divorce. The chancellor disagreed, and specifically found that Diane’s signature on the parties’ so-called conditional reconciliation agreement constituted an entry of appearance, and that, by signing it, Diane submitted herself to the court’s jurisdiction. Since the reconciliation agreement had been signed and entered 93 days (or within the mandatory 120-day period) from the filing of Daniel’s complaint, the chancellor held Daniel had complied with Rule 4(i). Diane appealed the chancellor’s decision to the court of appeals, which affirmed. See Raymond v. Raymond, 70 Ark. App. 372, 19 S.W.3d 52 (2000). The court of appeals, in a 4-2 decision, agreed with the chancellor’s reasoning, and, citing cases decided prior to Rule 4(i)’s existence, the appellate court held the language in the parties’ reconciliation agreement signed by Diane amounted to a “substantial step” which constituted her waiver and entry of appearance without reserving her objection to the trial court’s lack of jurisdiction. We disagree and reverse and dismiss the chancellor’s divorce decree.

Arkansas law is long settled that service of valid process is necessary to give a court jurisdiction over a defendant. Tucker v. Johnson, 275 Ark. 61, 628 S.W.2d 281 (1982) (citing Halliman v. Stiles, 250 Ark. 249, 464 S.W.2d 573 (1972), and Southern Kansas Stage Lines Co. v. Holt, 192 Ark. 165, 90 S.W.2d 473 (1936)). Moreover, a summons is necessary to satisfy due process requirements. Thompson v. Potlatch Corp., 326 Ark. 244, 930 S.W.2d 355 (1996). It is also mandatory under Arkansas law that service of process must he made within 120 days after the filing of the complaint unless there is a motion to extend, and if service is not obtained within the 120-day period and no such motion is made, dismissal is required upon motion or upon the court’s own initiative. See Ark. R. Civ. P. 4(i); Lyons v. Forrest City Machine Works, Inc., 301 Ark. 559, 785 S.W.2d 220 (1990) (under Rule 4(i), the trial court’s dismissal of the case for failure to make service of summons was mandatory); see also Southeast Foods, Inc. v. Keener, 335 Ark. 209, 979 S.W.2d 885 (1998); Dougherty v. Sullivan, 318 Ark. 608, 887 S.W.2d 305 (1994); Lawson v. Edmondson, 302 Ark. 46, 786 S.W.2d 823 (1990).

Our case law is equally well-settled that statutory service requirements, being in derogation of common-law rights, must be strictly construed and compliance with them must be exact. Carruth v. Design Interiors, Inc., 324 Ark. 373, 921 S.W.2d 944 (1996) (citing Wilburn v. Keenan Cos., 298 Ark. 461, 768 S.W.2d 531 (1989), and Edmonson v. Farris, 263 Ark. 505, 565 S.W.2d 617 (1978)). In Carruth, this court held that the same reasoning applies to service requirements imposed by court rules, and that proceedings conducted where the attempted service was invalid renders judgments arising therefrom void ab initio. The Carruth court, quoting from Tucker v. Johnson, supra, further held that actual knowledge of a proceeding does not validate defective process. Carruth, 324 Ark. at 375. Stated in different terms, the general rule is that a judgment entered without jurisdiction of the person or the subject matter or in excess of the court’s power is void. Neal v. Wilson, 321 Ark. 70, 900 S.W.2d 177 (1995).

The foregoing established legal principles require this court to hold the chancellor’s decree awarding Daniel a divorce to be void because, as pointed out above, Diane was indisputably never served with a copy of Daniel’s complaint or summons; neither did Daniel file a motion to extend the time or obtain a waiver and entry of appearance whereby Diane waived service of summons or process. While Daniel argues Diane had been made aware that Daniel had filed a divorce, this limited actual knowledge was insufficient for the lower court to acquire jurisdiction over Diane. See Tucker, supra.

In holding as we do, we reject Daniel’s argument that Diane’s signing the parties’ reconciliation agreement, filed 93 days after Daniel’s complaint, complied with the 120-day time period required by Rule 4(i). Daniel submits that there is no specific requirement for how a party may enter their appearance and that any action of a defendant showing an intention to enter an appearance, whether by formal writing or informal parol action is a voluntary appearance binding on him. For this proposition, he relies on Robinson v. Bossinger, 195 Ark. 445, 112 S.W.2d 637 (1938), and the following language therein:

A party who answers, consents to a continuance, goes to trial, takes an appeal, or does any substantial act in a cause, although he has not been served with summons, is deemed to have entered his appearance unless he objects and preserves his protest to the jurisdiction of his person.

In addition to the Robinson case, Daniel also cites Kirk v. Bonner, 186 Ark. 1063, 57 S.W.2d 802 (1930), for the rule that a voluntary appearance in court may be by formal writing, but in Kirk, the defendant executed a proper pleading waiving the issuance of summons and entering his appearance. At the time of both Robinson and Kirk, however, the Rules of Civil Procedure had not yet been promulgated. In other words, Rule 4(i) was not in effect and therefore not argued in those cases. Likewise, this court was not faced with the due process or jurisdictional issues considered in our later cases, discussed above, where this court held that (1) a valid service of process is necessary to give a court jurisdiction over a defendant; (2) actual knowledge of a proceeding does not validate a defective process; (3) if service of summons is not made upon a defendant within 120 days after filing the complaint, the case must be dismissed; and (4) proceedings where attempted service was invalid render judgments arising therefrom void ab initio and subject to collateral attack at any time.

We extend treatment of this point only because the dissenting opinion mentions Ark. R. Civ. P. 12(a), (b), and (h)(1), which are not argued by the parties. Rule 12(a) provides for the time in which a defendant must file his answer after the service of summons and complaint on him, and Rule 12(b) requires a defendant to raise his defenses in his responsive pleading, or for eight specified defenses, by motion. These defenses include lack of jurisdiction over the person, insufficiency of process, and insufficiency of service of process. Rule 12(b)(2), (4), and (5). The dissenting opinion submits that, under Rule 12(h)(1)(A) and (B), the defenses of lack of personal jurisdiction and insufficient service are waived if the defendant fails to object to those defenses by motion under Rule 12 or include such defenses in the defendant’s original responsive pleading. The dissent urges that, because Diane failed to file a motion raising these defenses, she waived them. The dissent is mistaken. Here, insufficient service is not the issue. Daniel obtained no service of his complaint and summons on Diane, and, in fact, she has never been furnished a copy of the complaint. Thus, Diane was in no position to file a motion to dismiss or any type of responsive pleading. Rule 12 simply does not apply to the facts or situation before us.

The dissenting opinion, similar to the argument discussed above, asserts Diane had waived any defense she had because she entered her appearance in Daniel’s divorce proceeding by signing the parties’ conditional reconciliation agreement which reflected the style of the divorce action by Daniel. The dissent, citing a number of cases, submits that a formal pleading is not necessary to effectuate an “appearance” in a proceeding. See Divilbliss v. Suchor, 311 Ark. 8, 841 S.W.2d 600 (1992); Farm Bureau Mut. Ins. Co. v. Campbell, 315 Ark. 136, 865 S.W.2d 643 (1993); Arkansas Dep’t of Human Servs. v. Farris, 309 Ark. 575, 832 S.W.2d 482 (1992); Norsworthy v. Norsworthy, 289 Ark. 479, 713 S.W.2d 451 (1986).

Of course, to accept the dissent’s proposition, one must give a liberal construction to the parties’ agreement in order to refer to it as a pleading of any kind. Unquestionably, the reconciliation agreement is what it says it is — an agreement, not a responsive pleading. Nor can the agreement be said to request any relief from the court. Again, the only question to decide on appeal is whether the agreement the parties signed was a waiver of service of process. Construing the agreement strictly, as we must, we reach the inevitable conclusion that the agreement does not amount to a lawful service of process, nor did Diane waive service by signing it.

We further point out that none of the cases cited in the dissent is supportive of its theory or position. The Divilbliss case, for example, involved Rule 55 of the Arkansas Rules of Procedure, not Rule 4(i); in fact, defendant Divilbliss had been served, but the issue there was whether the defendant took any action after service that constituted an appearance under Rule 55(b). Next, the Farm Bureau case is also not helpful to the dissent and actually undermines its position. There, defendant Farm Bureau was never served with process, but its attorney was sent a copy of the complaint. Defendant’s attorney responded by filing a timely answer, but also reserved the defendant’s objection to the court’s lack of jurisdiction and insufficient service of process. The Farm Bureau court upheld the trial court’s dismissal of the plaintiff’s complaint, and agreed with the lower court that, while the defendant filed an answer, it had properly reserved its objections and therefore had not entered its appearance. The third case cited by the dissent, Farris, is also of no value to the dissent’s theory. That decision merely discusses the earlier distinction between general and special appearances and announced the prevailing rule that, as long as a party either moves to dismiss (or objects for lack of personal jurisdiction) before pleading on the merits, or combines the objection to jurisdiction with the response on the merits, the objection is preserved and this procedure obviates the “special appearance.” And last, the dissent cites Norsworthy in support of its position. There the out-of-state defendant was evidently served, but he responded with a motion to dismiss, challenging the Arkansas chancery court’s jurisdiction. However, while the defendant questioned the chancery court’s jurisdiction, he sought affirmative relief in the form of a stay so the Texas and Arkansas courts could have direct communication in accordance with the Uniform Child Custody Jurisdiction Act. The Norsworthy court held such a request of the court for affirmative relief amounted to a general appearance. In conclusion, our study of Rule 12 and the cases cited in the dissent show they are in no way controlling of the situation now before us. '

As a final argument, Daniel asserts that laches prevents Diane from petitioning to set aside the divorce decree, at least, by the time Diane signed the decree. In support of this contention, he cites Self v. Self, 319 Ark. 632, 893 S.W.2d 775 (1995), for its statement that laches “has been applied in numerous cases where one party has obtained an invalid divorce and remarried, but the first spouse then waits too long under the facts of the particular case to assert her right to have the void judgment vacated.” Id. at 636. However, Self may be easily distinguished, in that the initial divorce decree in Self was held to be merely voidable; in the instant case, the decree was void ah initio. Certainly, when the May 12, 1997 decree was filed, the 120-day period under Rule 4(i) had passed, and as discussed in detail above, the reconciliation agreement did nothing to validate the service under the Rule. Thus, Daniel’s attempt to invoke laches as a defense is misplaced because the trial court had no jurisdiction or authority to hear the cases in the first place, see Tucker, supra, much less consider such a defense or argument. Cf. Farm Bureau Mutual Ins. Co., supra.

In conclusion, we hold that the chancellor erred in granting Daniel’s motion for summary judgment on the petition to set aside the divorce decree, and that order is hereby reversed and dismissed without prejudice.

Brown, Imber, and Thornton, JJ., dissent.

Annabelle Clinton Imber, Justice,

dissenting. The majority today holds that the Washington County Chancery Court was without jurisdiction to enter a decree of divorce in the action filed by Mr. Raymond because he failed to perfect service upon Ms. Raymond within 120 days of filing the complaint for divorce. I must dissent because the majority fails to recognize that service of process may be waived by the defendant, as Ms. Raymond did in this case.

“Service of process or a waiver of that service is necessary in order to satisfy the due process requirements of the United States Constitution.” Meeks v. Stevens, 301 Ark. 464, 466, 785 S.W.2d 18 (1990). As the majority points out, Rule 4(i) mandates that service be made within 120 days of the filing of the complaint, or the action must be dismissed as to any defendant not served. Ark. R. Civ. P. 4(i). Service of process is a jurisdictional issue, the failure of which deprives the trial court of jurisdiction over the person of the defendant. See Sides v. Kirchoff, 316 Ark. 680, 681, 874 S.W.2d 373 (1994).

The majority, however, fails to recognize that personal jurisdiction is a defense that can be waived by the defendant. Arkansas Dep’t of Human Servs. v. Farris, 309 Ark. 575, 578, 832 S.W.2d 482 (1992). Rules 12(b)(5) and 12(h)(1) clearly set forth the procedure for raising an insufficiency-of-service-of-process defense. Sublett v. Hipps, 330 Ark. 58, 63, 952 S.W.2d 140 (1997). Where a defendant believes that the trial court lacks personal jurisdiction over her because of insufficient service of process, she may take one of three actions to preserve her defense: (1) she may file a motion to dismiss the complaint against her for failure to obtain service of process; (2) she may file a responsive pleading in which she asserts the defense of insufficient service; or (3) she may simply choose not to appear or to contest jurisdiction. Hamm v. Office of Child Support Enforcement, 336 Ark. 391, 394, 985 S.W.2d 742 (1999); Arkansas DHS. v. Farris, supra; Ark. R. Civ. P. 12. If a defendant does appear without first filing a motion to dismiss for insufficient service or asserting this defense in her first responsive pleading, she waives any defense based upon the insufficiency of the service of process. Hamm v. OCSE, supra. See also Wallace v. Hale, 341 Ark. 898, 20 S.W.3d 392 (2000); Farm Bureau Mut. Ins. Co. v. Campbell, 315 Ark.. 136, 141, 865 S.W.2d 643 (1993); Ark. R. Civ. P. 12(h).

It is undisputed in this action that Mr. Raymond failed to perfect service upon Ms. Raymond within 120 days of filing the complaint for divorce. He argues, however, that Ms. Raymond waived any defense based upon insufficient service when she entered an appearance in the divorce action by signing the conditional reconciliation agreement. The majority summarily dismisses Mr. Raymond’s argument because he cited only pre-rule cases to support his argument and did not take into account due process concerns. Mr. Raymond’s argument should not be so quickly dismissed. As noted above, by entering an appearance in a case, a defendant waives her defense of insufficient service of process. Hamm v. OCSE, supra; Farm Bureau v. Campbell, supra. A waiver of service ameliorates any due process concerns. See Stevens v. Meeks, supra. The question, therefore, is whether Ms. Raymond entered an appearance in the divorce action when she entered into the conditional reconciliation agreement. I believe she did.

An overt action on the part of the defendant, other than objecting to jurisdiction, which recognizes the case as in court, is an appearance. Norsworthy v. Norsworthy, 289 Ark. 479, 487, 713 S.W.2d 451 (1986); Divilbliss v. Suchor, 311 Ark. 8, 15-16, 841 S.W.2d 600 (1992). If the defendant engages in any action that is not purely defensive prior to asserting the insufficiency of service, an appearance is entered and the defense is waived. Wallace v. Hale, supra. A purely defensive action is an action such as engaging in discovery. Farm Bureau v. Campbell, supra. However, a formal pleading is not necessary to effectuate an “appearance.” Divilbliss v. Suchor, supra. See, e.g., Farm Bureau v. Campbell, supra (a request for affirmative relief); Arkansas DHS v. Farris, supra (a motion requesting appointment of counsel and a response to a motion to intervene by a third party); Norsworthy v. Norsworthy, supra (a motion to stay proceedings).

In the instant case, Ms. Raymond signed a document entitled “Conditional Reconciliation Agreement.” This agreement was in the form of a legal document prepared for filing. At the head of the agreement is the style of the pending divorce action, containing the name of the court, the style of the case indicating the plaintiff and the defendant, and the docket number assigned to the case. The agreement itself clearly states that it is to be filed as an attachment to the complaint for divorce in the Chancery Court of Washington County, Arkansas. The agreement further provides that, if Ms. Raymond successfully completes an alcohol rehabilitation program and abstains from alcohol for a period of six months, Mr. Raymond would dismiss the pending divorce complaint in the Washington County Circuit Court.

There can be no doubt that by signing the conditional reconciliation agreement, Ms. Raymond knew she was entering into an agreement within the confines of the pending divorce action in the Washington County Chancery Court. As the majority states, actual knowledge of a pending action does not validate defective process. Carruth v. Design Interiors, Inc., 324 Ark. 373, 921 s.W.2d 944 (1996). However, Ms. Raymond’s involvement in this case went beyond mere knowledge of its pendency. She committed an overt act by signing the conditional reconciliation agreement to be filed with the court. Signing this agreement was not a purely defensive action on the part of Ms. Raymond. To the contrary, by entering into the agreement, Ms. Raymond committed to a course of action in the divorce proceedings, determining the parameters under which the divorce would proceed from that point forward. By entering into this agreement, and making it a part of the divorce proceeding, Ms. Raymond entered an appearance and submitted herself to the court’s jurisdiction, thereby waiving any defense of insufficient service of process.

In summary, the majority’s interpretation of ARCP Rule 4 in this case shifts the onus of Rule 12, whereby a defense of insufficient service of process must be specifically asserted to be preserved. The majority’s opinion instead holds that insufficient service of process is preserved unless specifically waived. In so doing, it effectively abolishes our line of precedent to the contrary. For this reason, I must respectfully dissent.

Brown and Thornton, JJL, join in this dissent.


author: TOM GLAZE, Justice.

text:
    SOUTH ARKANSAS PETROLEUM COMPANY v. Dana SCHIESSER
    00-614
    36 S.W.3d 317
    Supreme Court of Arkansas
    Opinion delivered February 1, 2001

      Barber, McCaskill, Jones & Hale, P.A., for appellant.

      Ogles Law Firm, P.A., by: John Ogles, and Law Offices of Sara M. Sawyer, for appellee.
   TOM GLAZE, Justice.

This appeal is brought by South Arkansas Petroleum Co., Inc. (SAPCO), from a jury verdict which found SAPCO hable for malicious prosecution and abuse of process committed against appellee Dana Schiesser. The jury awarded Schiesser $110,000.00 in compensatory damages and $250,000.00 in punitive damages. Schiesser initiated the lawsuit against SAPCO after she successfully defended herself against felony theft charges. The charges were based upon allegations by SAPCO’s executive officers, Clint and Jim Johnson, which they had reported to the Monticello police and the Drew County prosecuting attorney. On appeal, SAPCO argues Schiesser proved neither malicious prosecution nor abuse of process.

We first address SAPCO’s arguments as they relate to malicious prosecution. To prevail on her claim of malicious prosecution, Schiesser was required to prove the following elements: (1) a proceeding instituted or continued by the defendant against the plaintiff; (2) termination of the proceeding in favor of the plaintiff; (3) absence of probable cause for the proceeding; (4) malice on the part of the defendant; and (5) damages. McLaughlin v. Cox, 324 Ark. 361, 922 S.W.2d 327 (1996). Here, SAPCO does not question elements (2) and (5), but it does question whether Schiesser proved the other three.

SAPCO first submits that there is no substantial evidence that it instituted or continued the criminal charges against Schiesser; in making this argument, it relies on comment g to the Restatement (Second) of Torts, § 653 (1977). Section 653 sets out the elements of the tort of malicious prosecution, and comment g provides in relevant part as follows:

[ A] private person who gives to a public official information of another’s supposed criminal misconduct. . . obviously causes the institution of such subsequent proceedings as the official may begin on his own initiative, but giving the information or even making an accusation of criminal misconduct does not constitute a procurement of the proceedings initiated by the officer if it is entirely to his discretion to initiate the proceedings or not.

SAPCO contends that the Monticello police obtained a warrant for Schiesser’s arrest on their own initiative, and there was no evidence that the prosecuting attorney filed charges against Schiesser upon any basis other than the prosecuting attorney’s own discretion. SAPCO cites Matthews v. Blue Cross & Blue Shield of Michigan, 572 N.W.2d 603 (Mich. 1998), because of its reliance on comment g to the Restatement. There, the Michigan court stated the settled rule that a prosecutor’s exercise of his or her independent discretion in initiating and maintaining the prosecution is a complete defense to an action for malicious prosecution. Comment g to the Restatement, however, further provides that, when a private person makes an accusation of criminal misconduct about another to an official, the person must believe the accusation or information is true. “If, however, the information is known by the giver to be false, an intelligent exercise of the officer’s discretion becomes impossible, and a prosebution based upon it is procured by the person giving the false information.” Restatement (Second) of Torts § 653 cmt. g (emphasis added). Despite SAPCO’s attempt to distinguish “the Restatement approach,” Arkansas law is consistent with comment g and the Michigan case, as well. In McLaughlin, supra, this court stated the absence of probable cause is an essential element in a claim for malicious prosecution, and it is only when the defendant makes a full, fair, and truthful disclosure of all facts known to him to competent counsel (or the prosecuting attorney) and then acts bona fide upon such advice, that this will be a good defense to a claim of malicious prosecution. See also Kellerman v. Zeno, 64 Ark. App. 79, 983 S.W.2d 136 (1998).

SAPCO’s argument that the evidence entitles it to the so-called “advice-of-counsel” defense, as related above in comment (g) and our McLaughlin decision, is futile. In short, SAPCO’s owner, Clint Johnson, gave law enforcement officials information alleging criminal misconduct on Schiesser’s part, but was not forthcoming with all the pertinent information which he had in his possession when he first reported the alleged theft to Monticello police.

Before contacting Monticello Police Investigator John Dement, Clint Johnson checked some of the store’s daily reports during a period beginning in June 1996, and ending in January 1997, and found that these reports reflected $7,809 in “overrings.” Based on that, and without looking at each day’s shift reports (which would have shown which employee did the overrings), Clint Johnson concluded Schiesser had stolen that amount of money. On June 26, 1997, Clint and Jim Johnson confronted Schiesser about the overrings; she replied that she did not take any money, but that “she would repay it not to have her name drug [sic] through the mud.” Both of the Johnsons accused Schiesser of stealing money, and told her if she did not repay the money, they would prosecute her. Schiesser subsequently decided not to pay any money because she denied having taken it.

In July 1997, Clint Johnson went to Officer Dement’s office in order to file a complaint against Schiesser; he provided Dement with paperwork which he claimed supported SAPCO’s allegations of theft. Although the daily reports Clint Johnson gave Dement showed Schiesser had entered “overrings” on them between June 1996 and January 1997, Schiesser was indisputably out of the country and out of state on a number of those days. Clint Johnson was apprised of these errors by reading the daily reports, but he never gave that information to Dement. Clint Johnson also conceded Schiesser could not be shown to have been in the store on other days that Clint Johnson had daily reports purportedly bearing Schiesser’s signature. Thus, while Clint Johnson knew Schiesser could not have signed a number of the daily reports he gave Dement, Johnson, for whatever reason, failed to give this exculpatory information to Dement. It is also worthy to mention that, on one of the days Schiesser was accused of stealing money, the amount missing was supposedly $728.00. Such amount was clearly fictitious, because the store had never sold merchandise that totaled more than $350.00 in one day. This error, too, was known by Clint Johnson, but not given to Officer Dement before charges were filed against Schiesser.

When reviewing a challenge to the sufficiency of the evidence, we examine the evidence and all reasonable inferences arising therefrom in the light most favorable to Schiesser, the appellee. See SEECO, Inc. v. Hales, 341 Ark. 673, 22 S.W.3d 157 (2000). Here, the evidence abundandy shows SAPCO was not entitled to the “advice-of-counsel” defense it sought at trial. SAPCO clearly did not make a full and fair disclosure of all facts known to it, and in fact, what SAPCO did provide misled the police and the prosecuting attorney. When asked what effect these omissions may have played in bringing theft charges against Schiesser, Dement and the prosecutor each said, “I think that would have seriously affected my decision as to whether or not to bring charges.” Morever, the prosecutor said, “[My] office should have been advised of [these matters] in order to fairly determine probable cause.” In sum, we conclude that the record soundly and convincingly supports the view that the State filed felony charges based largely on the misleading information the Johnsons gave, as well as the information they failed to give, to the police, magistrate judge, and prosecuting attorney. Based upon such information, it is fair to conclude SAPCO procured and thereby instituted the criminal charges against Schiesser, charges of which she was later acquitted for lack of evidence.

SAPCO next argues that, irrespective of the evidence, Schiesser failed to prove the third element of malicious prosecution, namely, that there was an absence of probable cause to bring the criminal charges against her. SAPCO argues it established — as a matter of law — that probable cause existed to bring the criminal proceeding against Schiesser. Its argument is premised on the fact that, at the criminal theft trial, Schiesser made a motion for directed verdict at the end of the State’s case and renewed it at the close of all the evidence, and the trial court denied both of those motions. SAPCO submits that the trial court’s denial of these motions was tantamount to a finding that there was substantial evidence to support the theft charges against Schiesser. SAPCO points out that in obtaining an arrest warrant, the lesser burden of showing probable cause is required by presenting a state of facts or credible information which would induce an ordinarily cautious person to believe that the accused is guilty of the crime. In sum, SAPCO submits the novel argument that because the State’s criminal case against Schiesser survived Schiesser’s directed verdict motions, those rulings constituted a binding determination of the existence of probable cause in a later malicious prosecution action. Citing the case of Crockett and Brown v. Wilson, 314 Ark. 578, 864 S.W.2d 244 (1993), SAPCO argues that collateral estoppel applies to the situation here, and because the issue of probable cause was decided by a directed verdict ruling in Schiesser’s criminal case, that issue cannot be relitigated in Schiesser’s subsequent malicious prosecution action against SAPCO. This argument is wholly without merit.

In the context of a malicious prosecution action, the existence of probable cause is to be determined by the facts and circumstances surrounding the commencement and continuation of the legal proceedings. Cordes v. Outdoor Living Center, Inc., 301 Ark. 26, 781 S.W.2d 31 (1989). Probable cause for prosecution must be based upon the existence of facts or credible information that would induce a person of ordinary caution to believe the accused person to be guilty of the crime for which she is charged. Id.; see also Wal-Mart Stores, Inc. v. Binns, 341 Ark. 157, 15 S.W.3d 320 (2000). Ordinary caution is a standard of reasonableness, which presents an issue for the jury when the proof is in dispute or subject to different interpretations. Cordes, 301 Ark. at 31; Binns, 341 Ark. at 163.

Thus, only when the facts relied upon to establish probable cause are undisputed does the question of the existence of probable cause become a question of law for the courts. See Binns, 341 Ark. at 163 (quoting from Keebey v. Stifft, 145 Ark. 8, 224 S.W. 396 (1920)); Wal-Mart Stores, Inc. v. Williams, 71 Ark. App. 211, 29 S.W.3d 754 (2000). In the present case, the trial judge in the criminal action against Schiesser viewed only the evidence in favor of the State when ruling on Schiesser’s directed-verdict motions, and merely found sufficient evidence to submit the case to a jury. As already discussed above, whether Schiesser stole SAPCO’s money was clearly in dispute, thus making it a factual question for the jury. Given these circumstances, SAPCO is simply wrong in its contention that such probable cause issue was fully and finally decided and, as a matter of law, could not later be litigated in a civil malicious prosecution action.

In SAPCO’s third point, it asserts that Schiesser’s evidence fell short of showing SAPCO possessed malice — the fourth element of malicious prosecution — when it caused officials to initiate criminal charges against Schiesser. SAPCO largely relies on Officer Dement’s testimony that relates that officer’s impressions of Clint Johnson when Johnson initially accused Schiesser of stealing SAPCO’s money. Dement said that Clint Johnson seemed to be truthful and did not appear to be acting out of hatred, ill will, or vindictiveness.

Once again, we are left to point out that when Clint Johnson first accused Schiesser of stealing money, he withheld considerable information that tended to show she never took SAPCO’s money. Johnson conceded this fact, but offered no sound reason for his failure to disclose this exculpatory information to either Dement or the prosecuting attorney. In addition, SAPCO’s other owner, Jim Johnson, admitted he did not know that Schiesser stole the money, but met with her to tell her that, as manager, she was responsible for the money, and if she repaid the money, his son (Clint) would not bring criminal charges against her. From this testimony, the jury could have inferred ill will on the Johnsons’ part due to their failure to make a fair disclosure of the information favorable to Schiesser. The jury could also have inferred and attributed malice from the Johnsons’ threat to bring criminal charges against Schiesser in order to compel her payment of any missing money, irrespective of her culpability. At this point, we hasten to add that Schiesser denied having anything to do with SAPCO’s loss. Moreover, while SAPCO claims more than $7,800.00 was stolen, it never clearly showed that amount of money was illicitly taken or that the over-rings were anything more than mistakes.

We conclude on this point by stating the settled rule that malice may be inferred from a lack of probable cause. See Cordes v. Outdoor Living Center, Inc., 301 Ark. 26, 781 S.W.2d 31 (1989). Probable cause, as noted above, is determined by the facts and circumstances surrounding the commencement and continuation of the legal action. Id. Here, malice may be inferred from the lack of probable cause, for the reasons already discussed, but especially because Clint Johnson was shown to have deliberately failed to inform the police that Schiesser was out of the country and state on several occasions when money was “stolen.” Also, as just discussed, Jim Johnson made it clear that his purpose was to get the money repaid, even though he had no proof that Schiesser had stolen it. In addition, Linda Kay Reed, another SAPCO employee, testified that she was unaware of any policy that a manager was responsible for the repayment of missing funds. Finally, Schiesser herself testified that while on her cruise in the Bahamas, she made an unflattering comment about Clint Johnson; that comment somehow made its way back to Johnson, and he treated her differently after she returned from the cruise. From these facts, as presented to the jury, there was sufficient evidence regarding the lack of probable cause and Johnson’s improper motive for instituting the suit from which the jury could conclude that SAPCO acted maliciously.

SAPCO’s last point for reversal is that Schiesser’s evidence was insufficient to support the jury’s finding of abuse of process. Again, we disagree. In order to prevail on an abuse of process claim, a plaintiff must show the following: (1) a legal procedure set in motion in proper form, even with probable cause and ultimate success; (2) the procedure is perverted to accomplish an ulterior purpose for which it was not designed; and (3) a willful act is perpetrated in the use of process which is not proper in the regular conduct of the proceeding. Routh Wrecker Serv., Inc. v. Washington, 335 Ark. 232, 980 S.W.2d 240 (1998). This court has stated that the test of abuse of process is whether a judicial process is used to extort or coerce. Id., 335 Ark. at 238. The key to the tort is the improper use of process after its issuance in order to accomplish a purpose for which the process was not designed. Id; see also Harmon v. Carco Carriage Corp., 320 Ark. 322, 895 S.W.2d 938 (1995). Thus, it is the purpose for which the process is used, once issued, that is important in reaching a conclusion. Id.

In Routh Wrecker Serv., Inc. v. Washington, supra,, this court held that there was sufficient evidence to support a jury’s finding of abuse of process when the defendant, Routh Wrecker, had Washington arrested, apparently for theft, when Washington stopped payment on a check he had written for a car being sold at auction by Routh. Washington had stopped payment because when he went to pick up the car, its battery, spare tires, and some tools were missing. Despite the fact that Washington never took the car from Routh’s lot, Routh swore out an affidavit that Washington had not returned the car to the lot. In addition, when Washington’s father contacted Ronald Routh about the charges, Routh replied that “all he wanted was his money and that he would drop the charges if he was paid.” Routh Wrecker, 335 Ark. at 236. At trial, Routh testified that even though he knew the car was on the lot, he still did not ask to drop the charges. Id. at 239.

In affirming the trial court’s judgment in Washington’s favor, this court stated that “we note[ ] a potential abuse of process in the defendant’s failure to do anything to prevent the issuance of the arrest warrant or the trial itself. We further observe] [ that the use of criminal prosecution to extort payment of money or recovery of property is a classic example of the tort of abuse of process.” Routh Wrecker, 335 Ark. at 239 (citing Harmon, supra). This court held that, because Routh allowed the case to proceed for the coercive purpose of collecting Washington’s money, there was sufficient evidence to survive Routh’s motion for directed verdict on abuse of process. Id. at 240.

The facts of the instant case present a similar situation. As noted above, Clint Johnson testified that his intention was to get his money back. Although Johnson knew that Schiesser could not have stolen the money on several occasions for which she was accused, and although he had no direct proof that she had taken any of the money, he contacted the police department in order to procure an arrest warrant. In ruling on SAPCO’s motion for directed verdict, the trial judge found that Johnson “gave testimony before [the magistrate judge] at the probable cause hearing that Schiesser had taken all this money when, in fact, the documents show that other people completed the reports. He did not reveal that. [Instead] he continued to pursue criminal process at that point in time, for unwarranted and perverted purposes.” Viewing this evidence and giving all inferences in the light most favorable to Schiesser, we hold there was substantial evidence from which the jury could conclude that SAPCO used the criminal process, after its issuance, to accomplish an ulterior purpose for which the process was not designed.

In affirming the verdict and judgment entered below, we need only address one of the three issues Schiesser raises on cross appeal. That point has to do with SAPCO’s failure to produce a fair and accurate abstract. Although a cursory review of the transcript and abstract reveals possible deficiencies, Schiesser makes no attempt to call our attention to the particular deficiencies of which she complains, not does she submit a statement showing the cost of the supplemental abstract or a certificate showing the amount of time devoted to the preparation of the supplemental abstract. Instead, counsel makes a summary request for an attorney’s fee based upon ten hours of attorney’s time for supplementing SAPCO’s abstract. See Ark. Sup. Ct. R. 4-2(b)(1) and (2). While the court has discretion under Rule 4-2 (b)(2) to consider deficiencies when the appellee fails to call them to our attention, we refuse to do so in these circumstances when the case has been submitted and it would take considerable time on the court’s part to determine the exact deficiencies with which Schiesser takes exception. Thus, we deny Schiesser’s motion for costs and attorney’s fees.

For the reasons above, we affirm.

       Apparently Schiesser had sustained an injury on the job, and June 1997 was when she returned to work.

       Although SAPCO cites cases from Georgia and Oklahoma in support of its argument, we find Arkansas case law controlling. See Haupt v. Dillard, 17 F.3d 285 (9th Cir. 1994); Monroe v. Sigler, 353 S.E.2d 23 (Ga. 1987); see also Adamson v. Dayton Hudson Corp., 774 P.2d 478 (Okla. Civ. App. 1989). Nonetheless, our reading of those cases suggests they are consistent with Arkansas law and do not support the argument SAPCO advances in this appeal. For example, citing the Monroe case, the Georgia Court of Appeals stated that it has long been the rule in Georgia that committal of a defendant by a magistrate is prima facie, although not conclusive, evidence of probable cause for such prosecution. Garmon v. Warehouse Groceries Food Center, Inc., 427 S.E.2d 308 (Ga. App. 1993). The Garmon court further held that this type of prima facie establishment of probable cause “may be overcome by the accused, as plaintiff in the subsequent action for malicious prosecution, through producing evidence that, if believed, would show want of probable cause.”

       AMI Civil 4th (1999) describes malice as having “acted out of hatred, ill will, or a spirit of revenge.”

       In oral argument, SAPCO seemed to deny Jim Johnson’s testimony, but his testimony is clearly set out at pages 454 and 455 of the transcript.


author: DONALD L. Corbin, Justice.

text:
    Jerry NORRELL v. Wilbur GILES, M.D., and Virginia Reciprocal Insurance Company
    00-117
    36 S.W.3d 342
    Supreme Court of Arkansas
    Opinion delivered February 1, 2001

      Gordon, Caruth & Virden, P.L.C., by: Bart F. Virden and Jeannie L. Denniston, for appellant.

      Friday, Eldredge & Clark, by: Laura Hensley Smith and Jason B. Hendren, for appellees.
   DONALD L. Corbin, Justice.

Appellant Jerry Norrell filed a medical-malpractice action in the Pulaski County Circuit Court against Appellees Dr. Wilbur M. Giles and the Virginia Reciprocal Insurance Company, the insurer for Baptist Medical Center. During the pendency of the lawsuit, Appellees filed requests for admission, some of which went to the ultimate issue of the lawsuit. When Appellant failed to timely answer the requests, Appellees sought an order from the trial court that the requests be deemed admitted under Ark. R. Civ. P. 36(a). The trial court granted Appellees’ motion. Appellant then took a voluntary dismissal, or nonsuit, pursuant to Ark. R. Civ. P. 41. Within one year later, Appellant reinstated his suit against Appellees. Appellees sought and were granted summary judgment on the ground that the admissions deemed made prior to the nonsuit entitled them to judgment as a matter of law. The sole issue on appeal is whether admissions made under Rule 36 in an action that ends in a nonsuit may be used against the admitting party in the event the suit is reinstated. This issue is one of first impression; hence, our jurisdiction is pursuant to Ark. Sup. Ct. R. l-2(b)(l). For the reasons stated below, we reverse the trial court’s judgment.

Rule 36 provides in part:

(a) Request for Admission. A party may serve upon any other party a written request for the admission, for purposes of the pending action, of the truth of any matters within the scope of Rule 26(b) set forth in the request that relate to statements or opinions of fact or the application of law to fact, including the genuineness of any documents described in the request....
Each matter of which an admission is requested shall be separately set forth. The matter is admitted unless, within 30 days after service of the request, the party to whom the request is directed serves upon the party requesting the admission a written answer or objection addressed to the matter, signed by the party or by his attorney.

In interpreting Rule 36, this court has consistently held that when a party fails to timely answer requests for admission, or otherwise fails to object to them, the requested matters are deemed admitted. See, e.g., Borg-Warner Acceptance Corp. v. Kesterson, 288 Ark. 611, 708 S.W.2d 606 (1986); Womack v. Horton, 283 Ark. 227, 674 S.W.2d 935 (1984); Beck v. Merritt, 280 Ark. 331, 657 S.W.2d 549 (1983); Barnett Restaurant Supply, Inc. v. Vance, 279 Ark. 222, 650 S.W.2d 568 (1983). Appellant does not deny that he failed to timely answer the requests for admission, nor does he challenge the propriety of the trial court’s determination that the matters were then deemed admitted under Rule 36. Instead, he argues that those deemed admissions lost their effectiveness upon his being granted a voluntary dismissal without prejudice, pursuant to Rule 41(a). We agree.

Rule 41(a)(1) provides in pertinent part that “an action may be dismissed without prejudice to a future action by the plaintiff before the final submission of the case to the jury, or to the court where the trial is by the court.” This court has consistently recognized that the plaintiff’s right to voluntarily nonsuit a claim before final submission is absolute. See, e.g., Beverly Enters.-Ark., Inc. v. Hillier, 341 Ark. 1, 14 S.W.3d 487 (2000); Blaylock v. Shearson Lehman Bros., Inc., 330 Ark. 620, 954 S.W.2d 939 (1997); Pugh v. Griggs, 327 Ark. 577, 940 S.W.2d 445 (1997); Whetstone v. Chadduck, 316 Ark. 330, 871 S.W.2d 583 (1994). The first dismissal is without prejudice and is not an adjudication on the merits. Beverly, 341 Ark. 1, 14 S.W.3d 487; Lemon v. Laws, 305 Ark. 143, 806 S.W.2d 1 (1991). Thus, the plaintiff has the right to file a new action within one year after the dismissal. See Ark. Code Ann. § 16-56-126 (1987); McCastlain v. Elmore, 340 Ark. 365, 10 S.W.3d 835 (2000); Blaylock, 330 Ark. 620, 954 S.W.2d 939.

Rule 36(b) provides in part: “Any admission made by a party under this rule is for the purpose of the pending action only and is not an admission by him for any other purpose, nor may it be used against him in any other proceeding.” (Emphasis added.) We view this language as a deliberate limitation on the effect of those admissions made under that rule. Significantly, the rule does not speak in terms of “any action involving the same claim” or “any action involving the same parties.” Rather, it only allows the use of such admissions for the purpose of the pending action. Thus, when Appellant was granted a voluntary dismissal without prejudice, the action in which the admissions were deemed made was no longer a “pending action” under Rule 36(b). When the claim was reinstated, it became a new action or proceeding, complete with a new docket number and court schedule. Accordingly, the matters that were deemed admitted by Appellant in the first action were of no effect in the second action. We thus reverse the order of summary judgment and remand this case to the trial court for reinstatement of Appellant’s suit.

Reversed and remanded.


text:
    Lamar PETTUS and The Pettus Law Firm v. James E. McDONALD II and Joan Reid, as the Personal Representatives of the Estate of James E. McDonald, Deceased

    00-960
    36 S.W.3d 745
    Supreme Court of Arkansas
    Opinion delivered February 1, 2001
    [Petition for rehearing denied March 1, 2001. ]

      Wright, Lindsey & Jennings, by: H. Keith Morrison, for appellants.

      Timothy O. Dudley, for appellees.

       Arnold, C.J., not participating.

   DONALD L. Corbin, Justice.

This is a second appeal from a legal-malpractice case. In McDonald v. Pettus, 337 Ark. 265, 988 S.W.2d 9 (1999), this court affirmed the trial court’s grant of summary judgment with regard to the tort claim, but reversed and remanded the dismissal of the claim of breach of contract, brought by the personal representatives on behalf of the estate of James E. McDonald. Appellants Lamar Pettus and the Pettus Law Firm now appeal the judgment awarding Appellees James E. McDonald II and Joan Reid, the personal representatives, damages in the amount of $342,907.45, plus an additional $25,000 in attorney’s fees. Our jurisdiction of this matter is pursuant to Ark. Sup. Ct. R. 1-2 (a) (7).

The pertinent facts were set out by this court in the first appeal:

James E. McDonald and his wife, Georgia McDonald, jointly owned property located in Fayetteville. In the fall of 1990, the McDonalds hired Lamar Pettus and the Pettus law firm (hereinafter collectively referred to as “Mr. Pettus”) to prepare their wills. In his will, James gave his interest in the Fayetteville property to his children of a prior marriage, James E. McDonald, II, Joan Reid, and Janis Beall (the “children”). In contrast, Georgia did not specifically mention the Fayetteville property in her will.
In October of 1991, the McDonalds sold the Fayetteville property in exchange for promissory notes that were worth approximately $250,000. The McDonalds then hired Mr. Pettus to prepare codicils to their wills, which were executed on February 25, 1994. In his codicil, James left his interest in the promissory notes to his children. Again, Georgia did not specifically mention either the Fayetteville property or the promissory notes derived therefrom in her codicil. The dispute in this case centers upon whether James and Georgia McDonald hired Mr. Pettus to also prepare an assignment whereby Georgia would convey her interest in the promissory notes to either her husband, James McDonald, or directly to James’s children.
James died on April 16, 1994, before Georgia signed any assignment of her interest in the promissory notes. After her husband’s death, Georgia refused to relinquish her interest in the promissory notes to the children
Soon thereafter, the children filed a legal-malpractice claim against Mr. Pettus. In their complaint, the children alleged that Mr. Pettus was “charged with the responsibility of preparing assignments” of the promissory notes and “overseeing the execution” of those assignments. The children contended that Mr. Pettus’s failure to discharge that responsibility was a tort and a breach of contract. The complaint was later amended to add as plaintiffs James E. McDonald, II, and Joan Reid, as personal representatives of their father’s estate, in addition to naming them as plaintiffs in their individual capacities as heirs.
The trial court dismissed, by summary judgment, the children’s individual claims against Mr. Pettus because “A.C.A 16-22-310 precludes the Defendants herein from liability for civil damages in this cause of action.” Then on April 24, 1998, the trial court entered a second order of summary judgment dismissing the remaining legal-malpractice claims asserted by the personal representatives of James McDonald’s estate. The trial court explained that summary judgment was proper because the personal representatives did not have standing to bring, on James McDonald’s behalf, a malpractice claim against Mr. Pettus, and even if they did, the facts taken as true did not “rise to the level of establishing malpractice on the part of the Defendant.”

337 Ark. at 268-70, 988 S.W.2d at 11. This court affirmed the trial court’s dismissal of all the children’s claims, as well as the personal representatives’ tort claim. We reversed and remanded, however, the trial court’s grant of summary judgment on the personal representatives’ breach-of-contract claim. Upon remand, the jury awarded judgment in favor of Appellees. Appellants’ motions for directed verdict or for judgment notwithstanding the verdict were denied. Appellees were also awarded attorney’s fees in the amount of $25,000. Appellants initially filed a separate appeal with regard to the issue of the attorney’s fees, but that appeal was subsequently consolidated with the present appeal.

I. Jury Instruction

For their first point on appeal, Appellants argue that the trial court erred in instructing the jury on a theory of implied contract. Appellees argue that such an argument may not be considered because Appellant failed to raise it below. We disagree. At the close of the evidence, Appellees proffered the following jury instruction:

A contract may be either express or implied. An express contract is proved by showing that the parties to the contract had a written or oral agreement that imposed obligations on each party. An implied contract may be inferred from the acts of the parties or from circumstances which demonstrate the intention of the parties.

Counsel for Appellants lodged the following objection to this proposed jury instruction:

Defendants object to the instruction offered by Plaintiffs that starts “A contract may be either express or implied.” As a matter of law, as we argued in our directed verdict motion, it’s our contention that the terms of this contract had to be express and there is no implied contract under the facts of this case, so we would object to it just on the matter of law on that one.

In their motion for directed verdict made at the close of Appellees’ case, Appellants argued that there had been no evidence presented of any specific terms of a contract with Lamar Pettus or his firm to do an assignment to the estate. Clearly, Appellants wanted the case limited on an express-contract theory, rather than allowing the jury to determine that there may have been an implied contract between the parties. We believe that Appellants’ objection was sufficient to preserve his argument for appeal.

Turning now to the merits of this argument, we reject Appellants’ contention that it was improper to instruct the jury on an implied-contract theory. This court has consistently held that a party is entitled to a jury instruction when it is a correct statement of the law, and there is some basis in the evidence to support the giving of the instruction. Arthur v. Zearley, 337 Ark. 125, 992 S.W.2d 67 (1999); Edwards v. Stills, 335 Ark. 470, 984 S.W.2d 366 (1998); Coca-Cola Bottling Co. v. Priddy, 328 Ark. 666, 945 S.W.2d 355 (1997); Parker v. Holder, 315 Ark. 307, 867 S.W.2d 436 (1993). Jury instructions stating abstract legal propositions without any evidentiary basis should not be given. St. Louis S. W. Ry. Co. v. Grider, 321 Ark. 84, 900 S.W.2d 530 (1995). Only where reasonable minds will not differ that the evidence does not establish a basis for a jury instruction, is it error for the trial court to give the instruction. Skinner v. R.J. Griffin & Co., 313 Ark. 430, 855 S.W.2d 913 (1993).

First, the instruction given in the instant matter was a correct statement of the law. It simply differentiated between an express and implied contract. Appellants’ contention that the instruction made no distinction between an implied-in-law or an implied-in-fact contract is disingenuous. The jury instruction is nothing more than the definition of an implied-in-fact contract, one inferred from the acts of the parties or from circumstances demonstrating the intention of the parties. In contrast, an implied-in-law contract is not even a contract at all, but an obligation imposed by law to do justice even though no promise was ever made or intended. See Calamari & Perillo, Contracts § 1-12 (3d ed. 1987). Finally, this court has previously recognized that an attorney may be sued under the theory of breach of an implied contract. Lemon v. Laws, 313 Ark. 11, 852 S.W.2d 127 (1993).

Moreover, there was some evidence to support the instruction on an implied-contract theory. First, it was undisputed that Appellants were hired to draft the wills of James and Georgia McDonald. The evidence also demonstrates that the intent of those wills, to convey their interest in the property to James’s children, could never be effectuated without the completion of an assignment of Georgia’s interest in the property. Appellees each testified that they had previously discussed the will with their father, and that he had been very adamant that his wishes be carried out. According to their testimony, he assured them that all necessary steps had been taken to effectuate his will. Also, according to Appellees, their father never mentioned anyone, other than Appellant, who was involved with the will or the assignment. Accordingly, we believe there was some basis in the evidence to instruct the jury on a theory of implied contract. The fact that there was some evidence to support the giving of this instruction does not mean, however, that there was substantial evidence to support the jury’s verdict.

II. Substantial Evidence

Appellants moved for a directed verdict at the conclusion of Appellees’ case and also moved for a judgment notwithstanding the verdict at the conclusion of the trial. Both motions were denied, and Appellants now argue that there was insufficient evidence to support the jury’s verdict. This court has repeatedly held that when reviewing a denial of a motion for a directed verdict, we determine whether the jury’s verdict is supported by substantial evidence. Farm Bur. Mut. Ins. Co. v. Foote, 341 Ark. 105, 14 S.W.3d 512 (2000); State Auto Prop. & Cas. Ins. Co. v. Swaim, 338 Ark. 49, 991 S.W.2d 555 (1999). Substantial evidence is evidence of sufficient force and character to compel a conclusion one way or the other with reasonable certainty; it must force the mind to pass beyond mere suspicion or conjecture. Id. We review the evidence and all reasonable inferences arising therefrom in the light most favorable to the party on whose behalf judgment was entered. Id.

In originally remanding this case, this court stated:

Furthermore, we acknowledge that summary judgment was erroneous as to the personal representatives’ breach-of-contract claim because there were material factual disputes as to whether Mr. Pettus agreed to prepare any assignments and present them to Georgia McDonald for execution, and if so, whether the assignments were to provide for Georgia McDonald to assign her interest to her husband, James McDonald, or directly to the children. Likewise, whether Georgia McDonald would have executed any assignments presented to her before the decedent’s death is also a disputed factual issue. These are all relevant questions as to whether a contract to prepare the assignments existed, whether it was breached, whether Mr. McDonald suffered any injury due to the alleged breach, and whether the damages are speculative.

Pettus, 337 Ark. at 280, 988 S.W.2d at 17. After reviewing the evidence introduced at trial, we are convinced that Appellees failed to present substantial proof to resolve the material factual disputes previously identified by this court.

As to the issue whether Pettus agreed to draft and present to Georgia an assignment, Pettus denied ever agreeing to draft the assignment. Pettus testified that when the McDonalds originally approached him in the fall of 1990 about drafting their wills, he believed that Mr. McDonald was the sole owner of the Fayetteville property. He further stated that this belief was consistent with the McDonalds’ prior wills drafted by two other attorneys in 1979. According to Pettus, he did not learn until September of 1991 that the McDonalds owned the Fayetteville property jointly. He discovered their joint-ownership status when he received a deed to the property and was asked to prepare some instruments related to the sale of the property. Pettus stated that he then advised the McDonalds that it was necessary to take action if their intent was still for the children to receive the interest in the property. Pettus stated that the McDonalds said they would take care of it, but never asked him to draft anything. The assignment was again discussed in 1994, at the time that Pettus drafted the codicils for the McDonalds’ wills. He was told the notes had been assigned, and when he asked for copies, Mr. McDonald assured him that he would send him copies. Pettus testified that during these conversations, Mrs. McDonald was present and never contradicted the statements of her husband.

The only evidence introduced to contradict the testimony of Pettus was the testimony of Appellees. Both Appellees testified that their father had discussed his will with each of them, with Georgia present. They claimed that their father indicated that under his will, Appellees would be entitled to his interest in the Raw Wood notes. He also assured them that everything was in order to effectuate his will. Both Appellees denied, however, ever hearing their father use the term assignment. They also denied that their father ever told them that Appellants had drafted, or even agreed to draft, the assignment. Moreover, neither Appellee ever had any communication with Appellants regarding the drafting of the assignment, and they conceded that they had no knowledge of the terms of any agreement between Appellants and the McDonalds.

Appellees attempt to argue that there was sufficient evidence to support the verdict because Pettus’s testimony is considered disputed as a matter of law, and thus the jury was allowed to disbelieve that testimony. It is true that in Ester v. National Home Ctrs., Inc., 335 Ark. 356, 981 S.W.2d 91 (1998), this court held that the testimony of an interested party is taken as disputed as a matter of law. Appellees fail to recognize, however, that under Ester, their testimony is also disputed as a matter of law. Clearly, Appellees are interested parties in this action, because they, as heirs, stand to gain from any judgment awarded to the estate.

This court has long held that substantial evidence is not present where a factfinder is merely given a choice of possibilities that require the jury to speculate or guess as to a cause. Arkansas Kraft v. Cottrell, 313 Ark. 465, 855 S.W.2d 333 (1993); Arkansas Power & Light v. Cash, 245 Ark. 459, 432 S.W.2d 853 (1968). That is precisely what happened in the present case. The jury was allowed to choose between two competing versions of events, neither of which is corroborated by other evidence. Even viewing the evidence in a light most favorable to Appellees, it is apparent that the evidence amounted to little more than speculation, and thus, the jury’s verdict was not supported by substantial evidence.

Another material fact not proven by the evidence was who the assignment would benefit. Nothing in the record indicates whether the assignment would transfer Georgia’s interest in the Fayetteville property to her husband or to his estate. It is quite possible, as Appellants point out, that the assignment could have been drafted in a manner that assigned Georgia’s interest directly to the children, and not the estate. In fact, in the original complaint, the parties claimed that Mr. McDonald hired Pettus to obtain an assignment of the Raw Wood notes to the plaintiffs. It was not until they amended their complaint that Appellees claimed that the assignment would pass the proceeds of the notes through the estate to Appellees.

Appellees’ failure to establish who the assignee was to be is critical because this court specifically held that the only cause of action that could lie in this matter was a breach-of-contract claim between Appellants and the estate of James McDonald. We previously dismissed the claims of Mr. McDonald’s children because of a lack of privity. Absent the proof that the assignment was to benefit the estate, we cannot say that there was a breach of contract between Appellants and Mr. McDonald or his estate. Appellees failure to prove that the estate was the intended beneficiary is thus fatal to their cause of action.

III. Attorney’s Fees

Finally, Appellants’ appeal of the $25,000 award of attorney’s fees was consolidated with the present action. Having reversed the judgment in favor of Appellees, it is unnecessary for this court to address Appellants’ argument on this point. This court has consistently held that when a judgment in favor of a prevailing party is reversed, any award of attorney’s fees must also be reversed. See Burford Distrib., Inc. v. Starr, 341 Ark. 914, 20 S.W.3d 363 (2000); Bendinger v. Marshalltown Trowell Co., 338 Ark. 410, 994 S.W.2d 468 (1999).

Reversed and dismissed.

ARNOLD, C.J., not participating.

       The jury returned a verdict in favor of Appellees in the amount of $400,000, but following a concession that such an award exceeded the maximum amount sustained by the evidence, Appellees consented to a reduction of the award.

       Georgia McDonald died on January 24, 1998. Prior to her death, Mrs. McDonald executed an affidavit stating that it was never her intent to assign her interest in the Raw Wood notes to her husband or his children.

       Prior to trial, Appellants filed a motion in limine challenging the admission of certain statements made by Appellees on the ground that the statements were inadmissible hearsay. The trial court denied the motion, but Appellants do not raise this issue as a point on appeal.