author: R OBERT L. BROWN, Justice.

text:
    WAL-MART STORES, INC., A Delaware Corporation d/b/a Sam’s Club v. The P.O. MARKET, INC., A Texas Corporation; Joseph O’Banion, Leonard Hoffman, and Michael McNew
    00-1223
    66 S.W.3d 620
    Supreme Court of Arkansas
    Opinion delivered February 14, 2002
    [Petition for rehearing denied March 21, 2002.]

      Williams & Anderson LLP, by: Peter G. Kumpe and Stephen B. Niswanger, for appellant.

      Hardin, Jesson & Terry, by: Bradley D.Jesson and Rex Terry; Dover & Dixon, P.A., by: Thomas S. Stone and Michael Johns; McKool Smith, PC., by: Lewis T. LeClair, Robert Goodfriend, and Garret W Chambers; and Patton, Haltom, Roberts, McWilliams & Greer, by: James C. Wyly, for appellees.
   R OBERT L. BROWN, Justice.

This is a trade-secrets case. .The appellant is Wal-Mart Stores, Inc., doing business as Sam’s Club. The appellee is P.O. Market, Inc., a Texas corporation, as well as three individuals: Joseph O’Banion, Leonard Hoffman, and Michael McNew, all of whom are principals in P.O. Market. Following a ten-day jury trial, P.O. Market was awarded $31.7 million in compensatory damages for misappropriation of a trade secret. The trial court also awarded attorneys’ fees of $5 million. Wal-Mart now appeals the jury’s verdict and raises four points: (1) a trade secret was not involved; (2) there was no competent evidence of misappropriation; (3) the trial court erred in various evidentiary rulings and in instructing the jury; and (4) the judgment improperly permits double recovery of damages. We reverse the judgment on the first point and dismiss the case.

P.O. Market was a Texas corporation which was incorporated by Joe O’Banion on December 4, 1992. O’Banion’s brother-in-law, Dallas attorney Leonard Hoffman, prepared the incorporation documents. P.O. Market was capitalized at $1,500 and never received any additional capital. It never filed income tax returns. P.O. Market’s three shareholders (O’Banion, Hoffman, and McNew), however, did conduct regular business meetings. In 1992 and 1993, the corporation was in good standing in Texas and qualified to do business in Arkansas.

Before the creation of P.O. Market, O’Banion and McNew were owners of Southwest Factors, a Little Rock factoring business. Southwest Factors offered credit to subcontractors by purchasing their accounts receivable and then collecting those accounts.

Sam’s Club is a division of Wal-Mart Stores and is headquartered in Bentonville. It is a wholesale warehouse club. Members of Sam’s Club are able to buy goods in bulk at wholesale prices. The Export Division of Sam’s Club handles bulk transactions for large-scale purchasers. These bulk purchasers typically buy in large quantities by the truckload or in shipping containers. Most of these export purchasers are domestic companies, despite the name of the department. These large-scale bulk sales are effected via direct shipment from a manufacturer, vendor, or a Sam’s distribution center to the customer and do not involve any individual Sam’s Club store.

Prior to November 1993, there was not a system in place at Sam’s Club for purchasers of large quantities of goods to finance their purchases. Specifically, Sam’s Club customers could not submit a purchase order from their company that was payable at a later time because Sam’s Club operated on a “cash and carry” basis, with the sole exception of Discover credit card purchases.

In August of 1992, O’Banion first learned of this cash-and-carry feature of Sam’s Club. At that time, he was approached by Dan DeLaughter, who was a representative of a corporation called The Service Department in Little Rock. The Service Department bought goods wholesale from Sam’s Club and then resold them to its customers at a markup. DeLaughter approached O’Banion at Southwest Factors about financing a bulk purchase of computers for The Service Department, to be resold to the University of Arkansas at Little Rock. Southwest Factors declined to do the financing due to the credit risk. Through these negotiations, O’Banion met the manager of the Sam’s Club store in Little Rock, Mike Flampson. According to O’Banion’s trial testimony, Hampson told him that bulk credit purchases were a huge untapped market for Sam’s Club.

Following that conversation, O’Banion contacted Hampson with a proposal that Sam’s Club buy his idea for a way to execute bulk credit transactions. Subsequently, Hampson put O’Banion in touch with a Sam’s Club executive named Sharon Austin. Austin was a member of the Export Division of Sam’s Club, and her title was Export Business Developer. For part of the time relevant to this litigation, she reported directly to Colin Washburn, who was then Sam’s Club General Merchandise Manager. Washburn, in turn, reported to the CEO of Sam’s Club. At other times, Austin reported to another member of the Export Division, manager Scott Burford. In September 1992, O’Banion and Austin arranged to meet in Bentonville to discuss the P.O. Market proposal. O’Banion testified at trial that Austin agreed during this telephone conversation to keep O’Banion’s proposal confidential.

On October 7, 1992, O’Banion sent Austin a letter confirming the meeting and requesting that all information disclosed thus far be kept confidential. O’Banion’s proposal to Sharon Austin was outlined in his letter. The salient points were these: After a purchaser submitted a purchase order to Sam’s Club, P.O. Market would buy the named goods from Sam’s Club. P.O. Market would receive the most favorable pricing from Sam’s Club, which the letter described as “favored nation” pricing. It would be a same-day setdement. P.O. Market would take title to the goods, would mark up the price of the goods, and sell them on a credit basis to the purchaser. Between the “favored” pricing of the goods and the mark-up to the end customer, O’Banion estimated that P.O. Market would realize a profit of between 8% and 12% of gross sales. O’Banion further proposed that P.O. Market be granted a nonexclusive license to use Sam’s Club logos and trademarks in order to boost bulk purchaser confidence in its operation. He proposed that P.O. Market have a regional sales force, in addition to advertising, to market the bulk credit purchase service to Fortune 500 companies and other large purchasers. These purchasers would be preapproved by P.O. Market’s financing institution, which O’Banion contemplated would manage the credit risk as well as the same-day settlement of Sam’s sales transactions. The lender would also track the purchasers’ orders and accounts.

Under O’Banion’s proposal, Sam’s Club would guarantee the quality of their products just as in any regular sales transaction made directly between a customer and Sam’s Club. He also proposed setting up direct computer communications to allow a purchaser to place an order with P.O. Market, and that same day for the order to be transmitted to Sam’s Club for the goods to be pulled and “dock ready” for delivery the next business day. The letter proposed a five-year exclusive arrangement between P.O. Market and Sam’s Club. Though O’Banion’s proposal later changed in certain respects, for ease of convenience we will refer to it as the O’Banion concept.

O’Banion testified that his concept allowed the bulk purchaser to get the benefit of a credit transaction for a wide variety of products. A business’s entire procurement needs could be satisfied with one purchase order. This could be accomplished under his plan without exposing Sam’s Club to any credit risk, because P.O. Market took title to the goods and thereby assumed the risk of nonpayment. Further, Sam’s Club would receive same-day setdement of sales transactions, which O’Banion understood to be critical to Sam’s Club. According to O’Banion, Sam’s Club also got the benefit, if P.O. Market expanded Sam’s Club’s market share, of gaining deeper discounts from vendors as its own purchases got bigger. P.O. Market got the benefit of the price mark up, although it bore the credit risk. O’Banion testified at trial that he was not very concerned about credit risk because he contemplated doing business only with large corporate and government purchasers. Moreover, potential purchasers would have to qualify with P.O. Market’s financial institution as a low credit risk to participate in the program. The October 7, 1992 letter contained a paragraph requesting Austin to keep the proposal confidential.

In early October 1992, O’Banion, Leonard Hoffinan, and Michael Hill, who was also interested in the O’Banion concept, met with Sharon Austin and another Export Division employee named Ralph Bane at the Sam’s Club headquarters in Bentonville. According to O’Banion’s trial testimony, Austin and Bane told him that Sam’s Club was not discussing a similar credit arrangement with any other potential partner. O’Banion further testified that Austin told him that she would communicate his proposal to her Sam’s Club superiors and to the Wal-Mart legal department. If they were not interested, she said she would contact him within 24-hours. In her trial testimony, Austin stated that she only remembered giving the proposal to her boss, Export Division manager Scott Burford.

At the October meeting, Hoffman stressed to all parties the need to maintain confidentiality. He produced a confidentiality agreement that he had prepared for the meeting.- According to O’Banion’s trial testimony, Austin told him to put his agreement away because it would not be needed. She preferred to give her word that the matters discussed at the meeting would be kept confidential.

After Austin and O’Banion’s initial meeting, a second meeting was held on November 9. At this meeting, O’Banion, Hoffman, and Hill met with Sharon Austin in her office in Bentonville. O’Banion took a draft license and sales agreement with him, but he did not show her the document because there were some changes that Hoffman wanted to make to the draft. After the second meeting, O’Banion and Hoffman mailed Austin the revised license and sales agreement. O’Banion testified at trial that based on the mood at the second meeting, he expected to close the deal and get the revised license and sales agreement signed in the near future. Austin, however, requested that O’Banion send another letter to her describing the P.O. Market proposal in simpler language than was used in the license and sales agreement. In a letter dated November 18, 1992, O’Banion did so.

There were several changes in the O’Banion concept in the November 18 letter. First, a distinction was made between orders of 5,000 items or more in that these bulk purchases of 5,000 items or more would be shipped directly from the vendor to the purchaser without any Sam’s Club store involvement. Also, the term of the prospective agreement was shortened to three years. The November 18 letter further proposed a five-state region in which to begin the bulk credit purchase program rather than nationwide. P.O. Market would thus begin by servicing only a portion of the 268 Sam’s Club stores.

After the November 18, 1992 letter, Austin and O’Banion met for a third time in early December 1992. P.O. Market was represented by O’Banion, Hoffman, and Hill. Austin and Bane were accompanied by Scott Burford and a buyer’s assistant named Debra Connell. At this meeting, Austin told O’Banion that the license and sales agreement was currently being reviewed by the legal department. She stated that the legal department had problems with two aspects of the agreement, namely, the licensure and the exclusivity. The legal department did not want to grant P.O. Market a license to use Sam’s Club logos and trademarks. In addition, she said that the legal department believed that the exclusivity clause might represent an antitrust problem. It also believed that it was impossible for WalMart to agree to the exclusivity clause because Sam’s Club already had credit arrangements utilizing the Discover card.

Regardless of these problems, O’Banion testified that he still believed that the agreement would be signed “any day.” He emphasized to Austin that he needed a signed agreement to obtain the necessary financing to enable P.O. Market to purchase the bulk goods from Sam’s Club and begin operations. In a follow-up letter of December 15, 1992, he enclosed a new version of the agreement, which had now become only a sales agreement with the licensing feature eliminated. This third version of the agreement, like the two before it, contained a confidentiality agreement.

Austin informed O’Banion that she would give the proposed sales agreement to her superiors and to the legal department. When O’Banion called her to find out about its status, he testified that she told him, “We’ve passed it up to the people who approve these. They don’t have a problem. It should be signed at some point. Any day.” The agreement was not signed, and Austin denied at trial ever having passed the documents along to the legal department.

On January 7, 1993, there was a fourth meeting between O’Banion and Hoffman and Austin, Burford, and Connell. At this meeting, according to O’Banion, the same assurances were given that the sales agreement would be signed any day.

Also raised as a topic at the January 7 meeting was the prospect of P.O. Market’s arranging bulk credit transactions for customers in Mexico. Sam’s Club customers had been buying goods in bulk in the United States and then marking the goods up for retail sale across the border in Mexico. Sam’s Club stores along the border had been accepting letters of credit from these bulk purchasers. This letter-of-credit arrangement, however, was not a Sam’s Club corporate program but rather was handled by each individual store manager. Sam’s Club’s border stores were losing money on the letter-of-credit arrangement, according to Austin. She proposed that P.O. Market set up a system of financing for these customers, which were higher-risk than those originally contemplated by O’Banion’s proposal.

O’Banion testified that he was willing to do a credit arrangement for purchases in Mexico if that would result in his getting the sales agreement signed. Hoffman drafted a proposal for the Sam’s Club border stores and the letters of credit in January 1993. Meanwhile, O’Banion was calling Austin regularly to check on the status of the sales agreement.

Sometime in January 1993, Austin stopped returning O’Banion’s telephone calls. To get Sam’s Club back to the table, Hoffman drafted a letter to Austin in which he enclosed four additional drafts of the sales agreement and repeated that financing for P.O. Market’s bulk purchases from Sam’s Club would not be forthcoming until a signed sales agreement was in place.

During November and December 1992 and January 1993, O’Banion discussed potential financing for P.O. Market’s purchase of bulk goods from Sam’s Club with approximately eight lenders. He was rejected by several of the lenders, each of whom he presented with a copy of his concept, accompanied by a confidentiality agreement. With the help of a businessman in Atlanta, Georgia, Bill McBrine, he finally settled on NationsBank, now Bank of America, to finance P.O. Market’s operation. NationsBank Executive Vice President Steve Sims was, according to O’Banion and McBrine, interested in meeting with O’Banion, Austin, and Sam’s Club executives with the authority to sign the sales agreement. In a letter dated March 11, 1993, Hoffman emphasized to Austin that Sam’s Club’s financial officers would need to attend this meeting, which was scheduled for March 22, 1993.

The meeting, however, never took place, as Austin did not respond and was still not returning O’Banion’s telephone calls at this time. Because Austin never confirmed whether Sam’s Club financial officers would attend the March 22 meeting, O’Banion canceled it. Austin, however, testified at trial that she wanted the meeting to take place because she was still hopeful that P.O. Market would take over the credit arrangements for the Sam’s Club stores along the Mexican border.

In March of 1993, O’Banion gave up hope of Sam’s Club agreeing to his proposal. He returned to his work at Southwest Factors, where he continued to engage in factoring accounts receivable for various clients in the construction industry. He had no contact with any representative of Sam’s Club between January 1993 and November 1993.

In November 1993, McBrine called O’Banion and alerted him to an article he had read in the Wall Street Journal dated November 2, 1993, entitled “Wal-Mart Sets Sights on Big Customers in Bid to Improve Warehouse-Club Unit.” The article described a new program established by Sam’s Club which allowed bulk purchasers to buy goods on credit. O’Banion later saw a similar article in the Dallas Morning News, also dated November 2, 1993, and entitled “Sam’s Club Program to Compete Against Corporate Suppliers.”

O’Banion testified that he then tried to contact Sharon Austin at her office in Bentonville but could not reach her there. He learned that she no longer worked for Sam’s Club but was instead doing consulting work. He did finally manage to contact her by telephone, and he talked to her in November 1993 and April 1994. Unbeknownst to Austin, he taped these telephone conversations. During these telephone conversations, Austin told him that there was no doubt that the idea of bulk credit purchasing was O’Banion’s idea, that he had “made it easy for them” to implement the new program, that O’Banion had educated Wal-Mart, and that Wal-Mart had “stepped on” O’Banion. Austin, in these telephone conversations, also told O’Banion that she could not be sure whether or not his proposals had ever made it into the hands of top-level Sam’s Club executives. She did say, however, that she briefly “ran it by” A1 Johnson, who was then CEO of Sam’s Club. At trial, however, she testified that she was not sure whether or not this encounter had taken place because Johnson had vacated the position of CEO prior to her first contact with O’Banion. She also told him that she had given the proposal to the legal department. O’Banion admitted that the reason why he secretly taped some of these telephone conversations was because he had decided to file suit against Wal-Mart.

During the period in November and December 1992, when O’Banion had been meeting with Sam’s Club executives about his concept, Wal-Mart executives had been meeting with representatives of General Electric Capital Corporation (GECC) about developing a credit system for bulk purchases. GECC had been interested in establishing such an arrangement with Wal-Mart for a number of years. In late 1992 and early 1993, GECC finally succeeded in getting Wal-Mart to agree to such a program for a five-year exclusive term.

Under the GECC program, which was named Sam’s Club Direct program, Sam’s Club sold bulk goods to large purchasers in credit transactions and then sold the accounts receivable to GECC for full price. GECC never took title to the goods; rather, title to the goods passed directly from Sam’s Club to the purchaser. The transaction was facilitated by either the new Sam’s Club credit card created by GECC or by a credit account number for larger purchases. GECC, having bought the accounts receivable, would handle the purchase-order tracking and the billing of the credit card accounts. GECC made a profit by charging a $100 fee to open a credit account for Sam’s purchases. The GECC program was directed toward purchases from $300 or $400 and higher. Delivery would only be available for very large purchases. Sam’s Club would use its own sales force to market its new service.

In February 1993, Wal-Mart and GECC exchanged letters of confidentiality and exclusivity. In March 1993, they signed a Master Agreement in which they agreed to implement GECC’s proposal regarding bulk credit transactions. The program became operational in November of 1993.

P.O. Market filed its first complaint against Wal-Mart for misappropriation of a trade secret in 1994 or 1995 in Pulaski County Circuit Court. It later nonsuited that action. On April 9, 1999, P.O. Market filed the complaint giving rise to this appeal in Miller County Circuit Court. At the time, O’Banion resided in Texarkana. The complaint included six causes of action: breach of implied contract, breach of a confidentiality agreement, breach of confidential relations, misappropriation of a trade secret, unjust enrichment, and negligence. What lay at the core of P.O. Market’s complaint was that Wal-Mart had stolen the O’Banion concept and implemented it with GECC as the Sam’s Club Direct program. Sam’s Club answered and filed a motion for summary judgment on grounds that no trade secret was involved. The motion was denied by the trial judge.

At the jury trial in March 2000, P.O. Market presented the testimony of Joe O’Banion, Leonard Hoffinan, and Sharon Austin, among others. As part of his testimony, O’Banion testified that P.O. Market had lost profits of between $8,651,897 and $30,057,771, due to Sam’s Club’s improper conduct. These figures were based on Sam’s Club manager Mike Hampson’s initial estimates of an additional $12 million in sales per year for each Sam’s Club store that implemented the bulk credit purchase program. O’Banion figured his damages based on two scenarios: first, a scenario in which P.O. Market serviced only a five-state start-up market (the $8 million figure), and second, a scenario in which P.O. Market serviced all 268 Sam’s Club stores then in existence (the $30 million figure).

Bill McBrine, who in 1992 was dealing in brokering short-term loans using accounts receivable as collateral for Crown USA, also testified for P.O. Market. He testified that he thought O’Banion’s idea was exciting, novel, a unique product, and worth a lot of money. He put O’Banion in touch with NationsBank as a potential financing partner. He also testified that the services proposed by O’Banion were known in the financing industry, but had not been applied to Sam’s Club before. Finally, he stated that he proposed that Crown USA get involved in some of the financing of P.O. Market’s operation, but that Crown was not interested, because it was in the process of winding down its business at that time.

P.O. Market offered the testimony of Allyn Needham, an economist, as an expert witness. Needham prepared a chart of similarities and differences between the O’Banion concept and the Sam’s Club Direct Program. He stated that the two programs had a similar target market (schools, hospitals, governments, Fortune 1000 companies), similar benefits for customers, and similar benefits to Sam’s Club. The two programs also had differences, including credit risk exposure to Sam’s Club, the sales force to be utilized, and the actual method by which title to the goods was transferred. He testified that despite these differences, which he characterized as “semantic,” the moving force behind the two programs was the same. He stated that in his opinion, the two programs were substantially similar.

P.O. Market’s final witness was a second expert, Robert Sherwin, an expert in financial economic management. Sherwin testified to the damages suffered by P.O. Market. One calculation of damages was a royalty calculation —• how much P.O. Market would have been entitled to for the bulk credit purchase idea alone. It was based on 1.5% of the Sam’s Club Direct Program sales for the five years it had been in existence at the time of trial. This royalty calculation resulted in a figure of $6,736,761. Sherwin also testified that P.O. Market, in addition to this royalty figure, stood to make between $21 million and $72 million in profit due to its profit margin for actually carrying out the transactions.

At the end of P.O. Market’s case-in-chief, Wal-Mart moved for a directed verdict based on two arguments. Wal-Mart first argued that P.O. Market had offered no evidence that the O’Banion concept was a trade secret. Secondly, Wal-Mart contended that even if it was a trade secret, there was no evidence to show that the secret had been misappropriated. The trial court denied this motion.

Wal-Mart offered the testimony of fourteen witnesses in its case, as well as several portions of depositions that were read into the record. Its defense was that Wal-Mart had been talking to GECC since 1989 about bulk credit purchases and that GECC had implemented comparable programs with other companies. According to Wal-Mart, what O’Banion proposed to Sharon Austin was simply a larger version of what Dan DeLaughter had proposed to O’Banion in August 1992. Moreover, O’Banion’s concept was constantly evolving and changing during October, November, and December 1992, and the financing for P.O. Market’s purchase of the goods was never effected. Finally, Wal-Mart presented witnesses to the effect that the O’Banion concept and the GECC plan, which resulted in the Sam’s Club Direct Program, were markedly different. Hence, it argued that no trade secret was involved, and there was no misappropriation.

Wal-Mart renewed its motion for directed verdict at the close of all the evidence, and the jury was instructed. The jury returned a special verdict and answered two interrogatories. It first found that Wal-Mart had misappropriated a trade secret and then awarded damages of $6,736,761 for P.O. Market’s lost profits and $25 million, which represented Wal-Mart’s unjust enrichment. Several weeks after the verdict was rendered, the trial court also awarded attorneys’ fees of $5 million and costs of $1,125 to P.O. Market. Wal-Mart now appeals this judgment.

I. Standard of Review

Our analysis must begin with our standard of review. There are two standards involved in our analysis of this case. With respect to a question of a statutory interpretation, we review the matter de novo on appeal, as it is for this court to decide what a statute means. Fewell v. Pickens, 346 Ark. 246, 57 S.W.3d 144 (2001); Hodges v. Huckabee, 338 Ark. 454, 995 S.W.2d 341 (1999). Our review of a denial of a directed-verdict motion is different. A directed-verdict motion is a challenge to the sufficiency of the evidence, and when reviewing a denial of a motion for a directed verdict, this court determines whether the jury’s verdict is supported by substantial evidence. See, e.g., Pettus v. McDonald II, 343 Ark. 507, 36 S.W.3d 745 (2001); Farm Bureau Mut. Ins. Co. v. Foote, 341 Ark. 105, 14 S.W.3d 512 (2000); State Auto Property Cas. Ins. Co. v. Swaim, 338 Ark. 49, 991 S.W.2d 555 (1999). Substantial evidence is defined as 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. See State Auto Property Cas. Ins. Co. v. Swaim, supra; City of Little Rock v. Cameron, 320 Ark. 444, 897 S.W.2d 562 (1995); St. Paul Fire & Marine Ins. Co. v. Brady, 319 Ark. 301, 891 S.W.2d 351 (1995).

When determining the sufficiency of the evidence, we review the evidence and all reasonable inferences arising therefrom in the light most favorable to the party on whose behalf judgment was entered, and we give that evidence the highest probative value. See State Auto Property Cas. Ins. Co. v. Swaim, supra; Arthur v. Zearley, 337 Ark. 125, 992 S.W.2d 67 (1999); Union Pac. R.R. Co. v. Sharp, 330 Ark. 174, 952 S.W.2d 658 (1997). A motion for a directed verdict should be granted only when the evidence viewed is so insubstantial as to require the jury’s verdict for the party to be set aside. ConAgra, Inc. v. Strother, 340 Ark. 672, 13 S.W.3d 150 (2000); Wal-Mart Stores, Inc. v. Kelton, 305 Ark. 173, 806 S.W.2d 373 (1991). A motion for a directed verdict should be denied when there is a conflict in the evidence or when the evidence is such that fair-minded people might reach different conclusions. Wal-Mart Stores, Inc., v. Kelton, supra; Stalter v. Coca-Cola Bottling Co., 282 Ark. 443, 669 S.W.2d 460 (1984). Under those circumstances, a jury question is presented, and a directed verdict is inappropriate. WalMart Stores, Inc., v. Kelton, supra; Stalter v. Coca-Cola Bottling Co., supra. It is not this Court’s province to try issues of fact; we simply examine the record to determine if there is substantial evidence to support the jury verdict. Wal-Mart Stores, Inc., v. Kelton, supra; City of Caddo Valley v. George, 340 Ark. 203, 9 S.W.3d 481 (2000).

II. Trade Secret

Wal-Mart first urges that the O’Banion concept is not a trade secret and that the trial court erred in declining to direct a verdict in its favor on this point. Initially, Wal-Mart claims that the information included in the O’Banion concept meets neither the statutory definition of a trade secret (Ark. Code Ann. § 4-75-601(4) (Repl. 2001)), nor the six criteria set out in Scforo & Assocs., Inc. v. Porocel Corp., 337 Ark. 553, 991 S.W.2d 117 (1999). Wal-Mart disputes in its challenges whether the O’Banion concept was ever concretely defined and further claims that the concept was generally known and readily ascertainable.

At oral argument, Wal-Mart also claimed that placing competing economic ideas under trade-secret protection would have a chilling effect on innovations in the market place. Wal-Mart’s point appeared to be that, if P.O. Market is correct, anyone proposing a plan to a company to solve a business problem could then claim a trade secret and prevent that company from using other problem-solving ideas submitted by other persons or entities which embraced some of the same components.

The Arkansas Trade Secrets Act, Ark. Code Ann. § 4-75-601 to -607 (Repl. 2001) (ATSA), defines “trade secret” as follows:

(4) “Trade secret” means information, including a formula, pattern, compilation, program, device, method, technique, or process, that:
A) Derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use; and
(B) Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.

Ark. Code Ann. § 4-75-601(4) (Repl. 2001). In addition to this definition, the issue of whether information constitutes a trade secret under the ATSA is governed by six factors:

(1) the extent to which the information is known outside the business;
(2) the extent to which the information is known by employees and others involved in the business;
(3) the extent of measures taken by appellee to guard the secrecy of the information;
(4) the value of the information to appellee and to its competitors;
(5) the amount of effort or money expended by appellee in developing the information; and,
(6) the ease or difficulty with which the information could be properly acquired or duplicated by others.

Saforo & Assocs., Inc. v. Porocel Corp., supra (adopting the six factors from the Restatement of Torts § 757, cmt. b); see also ConAgra, Inc. v. Tyson Foods, Inc., 342 Ark. 672, 30 S.W.3d 725 (2000) (applying the Saforo factors). Information must meet both the ATSA definition and all of the six Saforo factors in order to qualify as a trade secret. ConAgra, Inc. v. Tyson Foods, Inc., supra.

a. Information

We first consider whether the O’Banion concept is “information, including a formula, pattern, compilation, program, device, method, technique, or process,” and, thus, a trade secret under the ATSA. Ark. Code Ann. § 4-75-601(4) (Repl. 2001). As already stated, to the extent that this issue involves a matter of statutory construction, we will review the issue de novo, as it is for this court to decide what a statute means. Fewell v. Pickens, supra; Hodges v. Huckabee, supra. Other jurisdictions agree that this “information” facet of the trade secret definition is a legal question. See, e.g., Weins v. Sporleder, 569 N.W 2d 16 (S.D. 1997); Uncle B’s Bakery, Inc. v. O’Rourke, 920 F. Supp. 1405 (N.D. Iowa 1996).

The first rule in considering the meaning and effect of a statute is to construe it just as it reads, giving the words their ordinary and usually accepted meaning in common language. Raley v. Wagner, 346 Ark. 234, 57 S.W.3d 683 (2001); Dunklin v. Ramsay, 328 Ark. 263, 944 S.W.2d 76 (1997). When the language of a statute is plain and unambiguous, there is no need to resort to rules of statutory construction. Stephens v. Arkansas Sch. for the Blind, 341 Ark. 939, 20 S.W.3d 397 (2000); Burcham v. City of Van Buren, 330 Ark. 451, 954 S.W.2d 266 (1997).

We have, either directly or by inference, passed on whether certain information qualified as “information, including a formula, pattern, compilation, program, device, method, technique, or process,” under § 4-75-601(4), in three cases during the past decade. See Saforo & Assocs., Inc. v. Porocel Corp., supra; Cardinal Freight Carriers v. J.B. Hunt Transp. Service, 336 Ark. 143, 987 S.W.2d 642 (1999); Allen v.Johar, Inc., 308 Ark. 45, 823 S.W.2d 824 (1992). The case of Allen v. fohar, supra, dealt with whether a customer list was a trade secret. We held that it was, because it took almost twenty years to compile the list, and the list included personal details about the customers such as hobbies and individual preferences. We con-' eluded that the customer list at issue was clearly a “compilation” under the ATSA’s definition. In Cardinal Freight Carriers v. J.B. Hunt Transp. Serv., supra, there were five pieces of economic data at issue: (1) profits made from particular customers; (2) general profit margins and pricing models; (3) customers’ long-term buying habits; (4) general business operating tools such as software; and (5) future plans including marketing strategies. This was “information” as defined by the ATSA and specifically fell into the category of methods, processes, or compilations. Finally, in Saforo & Assocs. Inc. v. Porocel Corp., supra, the equipment at issue was a way of partially processing a raw material which was an alumina residue called Bayer Scale through a wash water system. Though the wash water system was a combination of known components, it was unique and qualified as a “process.”

Those three cases stand in stark contrast to a case from South Dakota in which the South Dakota Supreme Court held that the plaintiffs could not precisely identify exaedy what information they were trying to protect as a trade secret. See Weins v. Sporleder, supra. In Weins, the issue was whether a livestock feed supplement had been misappropriated. The various competing feed supplements involved the mixing of similar ingredients such as flour, cane molasses, proteins, vitamins, iodine, and the like. The South Dakota Supreme Court, in wrestling with the issue of whether “information” under the trade secret statute was involved, observed:

Throughout the proceedings, however, there was never a clear assertion as to what exactly was claimed to be the trade secret. Weins’ complaint initially refers to the “feed product, and its use and application” as the trade secret. Later in the complaint, Weins states that the “selling and developing of the feed product” is the trade secret. In Weins’ amended complaint, there is reference to an “idea,” an “invention,” a “tub feed product containing a combination of ingredients to be fed free choice,” and “selling and developing the feed product” as the trade secret. The second amended complaint refers to the trade secret as a “feeding system.” During the trial, Meyer testified the trade secret was the formula alone, while Weins testified the trade secret was not the formula, but the idea of combining ingredients into a tub. In addition, Weins’ briefs submitted to this Court fail to assert what exactly constitutes the trade secret.

Weins, 569 N.W.2d at 18.

Other jurisdictions have wrestled with the issue of whether the information sought to be protected was sufficiently specific so as to qualify as trade-secret information. In Coenco, Inc. v. Coenco Sales, Inc., 940 F.2d 1176 (8th Cir. 1991), the Eighth Circuit Court of Appeals affirmed a judgment notwithstanding the verdict where the issue was whether a new version of a machine to control the environment in chicken houses violated Coenco, Inc.’s trade secret. Some of the same producers and suppliers were used to operate the competing machines. The Eighth Circuit noted that it was confused as to what specific trade secret was at issue. Similarly, in Electro-Craft Corp. v. Controlled Motion, Inc., supra, the Minnesota Supreme Court held that the dimensions of a design of a brushless electric motor were unclear and lacked specificity and, thus, were unsuitable for trade-secret protection.

We must confess to some of the same concerns in the case at hand. What precisely comprised the O’Banion concept appears to have been subject to change and in flux throughout discussions with Sam’s Club representatives. For example, the licensure feature to use Sam’s Club logos and trademarks was discarded after the initial meeting in October 1992, as was the exclusivity provision, and the term of the agreement changed. Over time, the geographic market to be served was also reduced down to five states and at one point appeared to focus on the Sam’s Club stores bordering Mexico. Even though we have concerns about the definiteness of the O’Banion concept and whether it is a protectable “method” for bulk credit sales under § 4-75-601(4), we do not decide this case on that basis.

b. Generally known and readily ascertainable

We next focus on whether there was substantial evidence that the O’Banion concept derived economic benefit from not being generally known to, and readily ascertainable by, other persons by proper means under § 4-75-601 (4)(A). Our standard of review on this factual issue is whether substantial evidence exists to support the verdict. We conclude that the evidence supporting the jury’s verdict on this point was insufficient.

There appears to be a dearth of authority on whether an economic plan or idea for structuring a business qualifies as a trade secret. P.O. Market, using our case of Saforo & Assocs., Inc. v. Porocel Corp., supra, contends that the O’Banion concept took known economic principles and molded them into a unique combination that is entitled to trade-secret protection. As already mentioned in part, in Saforo, this court upheld a finding of misappropriation of a trade secret where one company used another company’s specialized process for constructing a piece of equipment to wash alumina residue. Although each step of the washing process was known in the industry, we held that the unique combination of the known elements into a particularized piece of equipment created a trade secret. In so holding, we were in agreement with other jurisdictions that have considered whether a unique combination of known components constitutes a trade secret. See, e.g., Integrated Cash Mgmt. Serv., Inc. v. Digital Transactions, Inc., 920 F.2d 171 (2d Cir. 1990); Weston v. Buckley, 677 N.E.2d 1089 (Ind. App. 1997); Electro-Craft Corp. v. Controlled Motion, Inc., 332 N.W.2d 890 (Minn. 1983); Lee v. Cercoa, Inc., 433 So. 2d 1, 2 (Fla. App. 1983).

The testimony of Joseph O’Banion on cross examination illustrates the fact that he essentially assembled known economic principles in fashioning his concept, which, he contended, was unique:

COUNSEL: Now, Mr. O’Banion, each of these items listed as part of your proposal, each of these are arrangements or activities that were customarily done in business prior to November 18, 1992, weren’t they, sir?
O’Banion: Yes, sir. I would agree with that.
COUNSEL: You’d agree with that. And these activities were well known. I mean, there was nothing secret about these activities, were they?
O’BANION: Uh, individually, there was nothing secret about them. But we, we, you and I have talked about that a lot. So.
COUNSEL: And so, it’s your contention that when you combined these activities, that that turned it into something secret?
O’Banion: It turned it into, it was a problem solving situation, Mr. Kumpe, that I had to resolve problems for each and every level of this chart back here or it was not gonna work.
COUNSEL: And each of these various points are part of the solution?
O’Banion: That is correct.
Counsel: And each of these activities were known in the businesses world prior to 1992?
O’BANION: Outside of this program, I would agree with that.
COUNSEL: Well, when you combined them together that did not all of a sudden shroud them in secrecy did they, sir?
O’Banion: I don’t know of anybody so far that did a, a, to my knowledge, of doing a transfer of risk with minimum cost. I wasn’t aware of that situation. Apparently, Wal-Mart wasn’t either, because they would have already been doing it, frankly.

The question then that confronts this court is whether the O’Banion concept is indeed unique information or whether it is, at its core, a variation of other economic models already in the public domain and readily ascertainable. See Jostens, Inc. v. National Computer Systems, Inc., 318 N.W.2d 691 (Minn. 1982). Again, we turn to other jurisdictions.

In Computer Care v. Service Systems Enterprises, Inc., 982 F.2d 1063 (7th Cir. 1992), a methodology for triggering notice to customers to bring cars in for repairs was at issue. The Seventh Circuit Court of Appeals reversed a preliminary injunction by the federal district court and noted that that court had granted trade-secret protection to the “mere idea of using more than one trigger” for car repairs. 982 F.2d at 1073. The Seventh Circuit underscored that this information of “multiple triggers” was generally available in the industry and the fact that Computer Care was first to use it did not, in and of itself, transform otherwise general knowledge into a trade secret. The Seventh Circuit further concluded that the methodology could readily be duplicated.

In TGC Corp. v. HTM Sports, B.V., 896 F. Supp. 751 (E.D. Tenn. 1995), the federal district court entered a judgment notwithstanding a jury verdict and found that the idea of a seamless palm in a sports glove could not qualify as a trade secret, because this idea was public knowledge. As was the case in Computer Care v. Service Systems Enterprises, Inc., supra, the district court focused on the point that simply being first to employ an idea did not, by itself, transform general knowledge into a trade secret. As P.O. Market contends in the instant case, TGC Corp. argued that the combination of known factors that went into making the sports glove entitled it to protection “like the recipe for baking a cake.” 896 F. Supp. at 760. The district court disagreed that the combination qualified as a trade secret because its components were already generally known.

And, again, in Weins v. Sporleder, supra, the South Dakota Supreme Court concluded that the combination of ingredients that resulted in the feed supplement could not be considered a trade secret because all of the ingredients were public knowledge and being the first to combine them was not enough to warrant protection. In short, the feed supplement in question was easily duplicable. Other courts have reached similar conclusions. See, e.g.,Jostens, Inc. v. National Computer Systems, Inc., supra (computer software for designing class rings not a trade secret when the system was no different in concept from other systems in public domain and the combination of known data was not so particularized to achieve trade-secret status); Microbiological Research Corp. v. Muna, 625 P.2d 690, 699 (Utah 1981) (medical diagnostic kits were not unique combination where defendant had “utilized basic chemistry for a basic process consisting of a series of well known, published steps”).

It is apparent to this court that any person reasonably well versed in the economics of wholesaling and credit purchasing could have put together the O’Banion concept. Indeed, the O’Banion concept was essentially wholesaling in the sense that it contemplated buying goods in bulk at a favorable price and selling them at a markup to preordained customers. Even though we look to the combination of the components and not to their individual qualities, the O’Banion concept was hardly unique. We are hard pressed to conclude that P.O. Market can claim what is essentially a wholesaling model to resolve a problem as its own proprietary information. In short, there was nothing about this business plan that was not generally known in the industry or readily ascertainable. For this reason, we distinguish our decision in Saforo & Assocs., Inc. v. Porocel Corp., supra, where what was involved was a highly specialized process for washing alumina residue and where this court concluded that the equipment built to do that was unique.

Joseph O’Banion himself testified that the genesis for his concept was a plan proposed to him by Dan DeLaughter of The Service Department in August 1992 to provide computers to the University of Arkansas at Little Rock. O’Banion was approached to provide financing to The Service Department, which would take title to the bulk sale of computers from Sam’s Club and then sell the computers to the university at a markup. This was the essence of the O’Banion concept which was submitted to Sharon Austin on a much greater scale. It, too, is evidence of the fact that a first cousin of the O’Banion concept was already known and being used in business circles.

We give little credence to the testimony of O’Banion and Leonard Hoffman regarding the uniqueness of their proposal. Both men were interested parties, who alleged in their complaint that the O’Banion concept was “a novel business concept not previously tried or considered by Sam’s Club or Wal-Mart,” and, therefore, was a trade secret. The fact that they testified similarly at trial was simply self-serving and a restatement of their theory of the case. This court has reversed jury verdicts for lack of substantial evidence even when the plaintiffs testified at trial on their own behalf. See, e.g., State Auto Property & Cas. Ins. Co. v. Swaim, supra; St. Joseph’s Regional Health Center v. Munos, 326 Ark. 605, 934 S.W.2d 192 (1996); Thompson Newspaper Publishing, Inc. v. Coody, 320 Ark. 455, 896 S.W.2d 897 (1995). Even Bill McBrine, who testified that the concept was “novel” was directly involved in promoting the plan by attempting to arrange financing at NationsBank. McBrine also admitted that the basics of the O’Banion concept were known in the industry but had not been applied to Sam’s Club. Hence, we conclude that the testimony of these three men does not rise to the level of evidence of such sufficient force and character to compel a conclusion on this point with reasonable certainty. See State Auto Property Cas. Co. v. Swaim, supra. Nor do we agree that the mere statements by them that a unique or novel idea was involved transforms the matter into a trade secret and raises a reasonable inference for protection purposes.

We, again, voice our concern over whether the O’Banion concept ever reached that point of definiteness so as to qualify as protected “information” for trade secret purposes. Nevertheless, we hold that the basic economic components of the O’Banion concept were generally known in the business world and that the combination of the components into the O’Banion concept was not unique but rather was readily ascertainable. Thus, the O’Banion concept does not meet the test for a trade secret. Because we hold that the O’Banion concept did not qualify as a trade secret under either the ATSA, and specifically § 4-75-601(4)(A), or the corresponding Saforo factors due to the fact that it was generally known or readily ascertainable, we need not address the remaining points raised on appeal concerning misappropriation, the trial proceedings, or damages.

Reversed and dismissed.

Glaze and Corbin, JJ., not participating.

Special Justice NOYL HOUSTON joins.

       Although the corporation was not formed until December 4, 1992, after the occurrence of some of the events that gave rise to this litigation, it will be referred to as being in existence before that time for convenience.

       P.O. Market alleged in its complaint, and Sam’s Club admitted in its answer, that Wal-Mart founder Sam Walton had a “philosophical aversion” to consumer credit. Hence, Wal-Mart and its divisions were slow to adopt credit programs such as the one at issue in this case.

       This license was considered by O’Banion to be critical in obtaining financing for P.O. Market to be able to make the kinds of bulk purchases contemplated.

       GECC later began charging a 1.37% charge to Sam’s Club for each transaction that it financed.


source: Caselaw Access Project

author: A NNABELLE CLINTON IMBER, Justice.

license: Public Domain

text:
    Joe Louis DANSBY v. STATE of Arkansas
    CR 00-1363
    66 S.W.3d 585
    Supreme Court of Arkansas
    Opinion delivered February 14, 2002

      William A. McLean, for appellant.

      Mark Pryor, Att’y Gen., by: David R. Raupp, Sr. Ass’t Att’y Gen., and Valerie L. Kelly, Ass’t Att’y Gen., for appellee.
   A NNABELLE CLINTON IMBER, Justice.

A jury found Joe Louis .Dansby guilty of two counts of capital murder and sentenced him to death on April 24, 1997. On direct appeal, we affirmed the capital-murder convictions and death sentence in Dansby v. State, 338 Ark. 697, 1 S.W.3d 403 (1999) (Dansby I). Pursuant to Ark. R. Crim. P. 37.5 (2001), Mr. Dansby filed a petition for postconviction relief in which he raised only one claim for relief: that his trial counsel were ineffective in permitting him to testify because doing so led to the State’s use of rebuttal testimony from his wife that he confessed his crimes to her. The circuit court found that the decision to testify was a strategical and tactical decision made jointly by Mr. Dansby and his attorneys and denied his petition for postconviction relief. Mr. Dansby filed a notice of appeal from the denial of postconviction relief. He also filed a petition for writ of error coram nobis that this court denied. Dansby v. State, 343 Ark. 635, 37 S.W.3d 599 (2001) (per curiam). Mr. Dansby’s appeal from the denial of postconviction relief is now before this court, and we affirm the circuit court’s decision.

The facts of this case were explained in detail in Dansby I, and need not be repeated here except as they relate to the Rule 37.5 hearing. Eugene D. Bramblett, one of Mr. Dansby’s trial attorneys, was the only witness at the Rule 37.5 hearing. Mr. Bramblett testified on direct examination that, of all the evidence offered during the three-week trial, the testimony of Joe Dansby’s wife was the most damaging to their case. Mrs. Dansby first testified during the State’s case-in-chief. However, because Mr. Dansby’s attorneys had prevailed on a motion to invoke the marital privilege, Mrs. Dansby was prohibited from testifying concerning a confession by her husband. After Mrs. Dansby’s initial testimony, Jackie Cooper testified that, while he and Mr. Dansby were being held at the Nevada County jail, Mr. Dansby told him that he committed the murders. Mr. Cooper also admitted to a history of criminal activities, including “seven different stretches” in the penitentiary over the past twenty years. Other evidence introduced by the State included expert testimony matching (1) .22 shell casings found at the crime scenes with a shell casing found at Mr. Dansby’s house; (2) the metal in the bullets used to kill the couple with the metal in the bullets found in Mr. Dansby’s .22 rifle; and (3) the DNA from Mr. Dansby’s blood sample with the DNA in semen recovered from the body of the murdered woman.

After the State rested its case-in-chief, Mr. Dansby testified in his own behalf. His attorneys examined him “with great care to make sure that none of the questions that we asked Mr. Dansby would . . . open the door to a waiver of the marital privilege.” Before the State cross-examined him, the trial court ruled that the confession to Mr. Cooper constituted a waiver of the marital privilege and allowed the State to question Mr. Dansby concerning the alleged confession to his wife, which he denied. The State then recalled Mrs. Dansby as a rebuttal witness, and she testified that her husband had confessed to her that he “killed the kids,” referring to the murdered young couple. Mr. Dansby’s attorneys then called other defense witnesses in an unsuccessful attempt to show that another man was a suspect and could have murdered the couple.

I. Standard of Review.

The standard for review of a denial of a petition for postconviction relief has been often recited and was recently summarized in Andrews v. State, 344 Ark. 606, 42 S.W.3d 485 (2001):

The criteria for assessing the effectiveness of counsel were enunciated by the Supreme Court in Strickland v. Washington, 466 U.S. 668, 104 S.Ct. 2052, 80 L.Ed.2d 674 (1984). Strickland provides that when a convicted defendant complains of ineffective assistance of counsel, he must show that counsel’s representation fell below an objective standard of reasonableness and that counsel’s deficient performance prejudiced his defense. Judicial review of counsel’s performance must be highly deferential, and a fair assessment of counsel’s performance under Strickland requires that every effort be made to eliminate the distorting effects of hindsight, to reconstruct the circumstances of counsel’s conduct, and to evaluate the conduct from counsel’s perspective at the time. Missildine v. State, 314 Ark. 500, 863 S.W.2d 813 (1993). A reviewing court must indulge a strong presumption that the conduct falls within the wide range of reasonable professional assistance. Id.
To prevail on any claim of ineffective assistance of counsel, the petitioner must show first that counsel’s performance was deficient. Thomas v. State, 322 Ark. 670, 911 S.W.2d 259 (1995). This requires a showing that counsel made errors so serious that counsel was not functioning as the “counsel” guaranteed the petitioner by the Sixth Amendment. Id. Secondly, the petitioner must show that the deficient performance prejudiced the defense, which requires a showing that counsel’s errors were so serious as to deprive the petitioner of a fair trial. Id. Unless a petitioner makes both showings, it cannot be said that the conviction resulted from a breakdown in the adversarial process that renders the result unreliable. Id. The petitioner must show that there is a reasonable probability that, but for counsel’s errors, the factfinder would have had a reasonable doubt respecting guilt in that the decision reached would have been different absent the errors. Id.; Huls v. State, 301 Ark. 572, 785 S.W.2d 467 (1990). A reasonable probability is a probability sufficient to undermine confidence in the outcome of the trial. Strickland, 466 U.S. 668, 104 S.Ct. 2052, 80 L.Ed.2d 674; Thomas, 322 Ark. 670, 911 S.W.2d 259.

Andrews v. State, 344 Ark. at 611-12, 42 S.W.3d at 487-88. On appeal, a trial court’s denial of postconviction relief will not be reversed unless the ruling was clearly erroneous. Peebles v. State, 331 Ark. 188, 958 S.W.2d 533 (1998).

II. Deficient Performance of Counsel.

Mr. Dansby claims that if he had not testified, the State could not have asked him whether he confessed to his wife and then called his wife as a rebuttal witness to his denial of the confession. He argues that because his counsel failed to adequately research and comprehend the law of waiver of marital privilege, they failed to grasp the risks of allowing him to testify. Thus, he asserts that his counsel were ineffective in allowing him to testify.

The first prong of the Strickland test is whether counsel’s performance was deficient because Mr. Dansby testified in his own behalf. We have consistently held that whether or not a defendant testifies is not a basis for postconviction relief. “The accused has the right to choose whether to testify in his own behalf. Counsel may only advise the accused in making the decision. The decision to testify is purely one of strategy.” Chenowith v. State, 341 Ark. 722, 734, 19 S.W.3d 612, 618 (2000) (citations omitted); Pogue v. State, 316 Ark. 428, 433, 872 S.W.2d 387, 389 (1994) (“This dispute over Pogue’s taking the stand appears to be more a debate over trial strategy than evidence of ineffectiveness of counsel. Such matters do not form the basis of post-conviction relief.”); Wainwright v. State, 307 Ark. 569, 580, 823 S.W.2d 449, 454-55 (1992) (“[T]he decision to advise a defendant not to take the stand, even if it proves improvident, is a tactical decision within the realm of counsel’s professional judgment, and matters of trial tactics and strategy are not grounds for post-conviction relief.”); Scott v. State, 303 Ark. 197, 201, 795 S.W.2d 353, 355 (1990) (“We might agree with Scott’s argument that he had a right to testify in his own defense, but he has shown nothing to indicate the decision was other than a tactical one.”); Isom v. State, 284 Ark. 426, 430, 682 S.W.2d 755, 758 (1985) (“[T]he decision to advise a client not to take the stand is a tactical one within the realm of counsel’s professional judgment, and matters of trial tactics and strategy are not grounds for postconviction relief. Neither mere error on the part of counsel nor bad advice is tantamount to a denial of a fair trial.”); McDaniel v. State, 282 Ark. 170, 174, 666 S.W.2d 400, 403 (1984) (“Even if petitioner would have been better off not taking the stand, mere mistakes on counsel’s part do not establish the denial of a fair trial.”); Watson v. State, 282 Ark. 246, 248, 667 S.W.2d 953, 955 (1984) (“Even if counsel’s advice caused petitioner to take the stand, there is nothing to indicate that she compelled him to testify The decision to advise a client to testify is a tactical decision within the realm of counsel’s professional judgment. Even if a decision proves unwise, matters of trial tactics and strategy are not grounds for postconviction relief.”).

From the line of cases cited above, it is clear that an attorney’s advice to a defendant on whether or not to testify and the defendant’s decision to take or not take the stand are not grounds for postconviction relief predicated on ineffective assistance of counsel. Mr. Dansby, nonetheless, contends it was counsels’ failure “to adequately research and comprehend the law of waiver of the marital privilege” that kept them from appreciating the risk of allowing him to take the stand and testify in his own behalf.

During the Rule 37.5 hearing, Mr. Bramblett testified that he and his partner, Jamie Pratt, had obtained a favorable ruling granting Mr. Dansby’s motion to invoke marital privilege, thereby preventing Mrs. Dansby from testifying concerning the confession during the State’s case-in-chief. The attorneys were familiar with Perry v. State, 280 Ark. 36, 635 S.W.2d 380 (1983), where the defendant waived his priest-penitent privilege by disclosing his confession to third parties. However, the disclosures in Perry were made to several people and were undisputed; whereas, in this case, the disclosure involved only one other person, and Mr. Dansby denied making the confession to Mr. Cooper. Mr. Dansby’s attorneys had researched the issue, and Mr. Bramblett testified as follows at the postconviction hearing: “We were convinced that merely by taking the witness stand Mr. Dansby would not by that fact alone open the door to a waiver of the marital privilege.” Mr. Bramblett further testified that Mr. Dansby wanted to testify in his own behalf and had always maintained his innocence.

During Mr. Dansby’s testimony on direct examination, his attorneys made sure that none of their questions would open the door to a waiver of the marital privilege. It was only after direct examination and before cross-examination that the trial judge ruled that the marital privilege had been waived by Mr. Dansby’s alleged confession to Mr. Cooper. In fact, the question of whether a single alleged and disputed disclosure to a third party constituted waiver of privilege was not settled until this court’s ruling in Dansby I. We held that the waiver of privilege by disclosure to a third party does not depend upon the disclosure being heard by a number of people or upon the third party’s testimony being disputed. Dansby I, 338 Ark. at 720, 1 S.W.3d at 416. Contrary to Mr. Dansby’s allegations, his attorneys simply were not deficient just because they lost at trial and on appeal on an unsettled question of law. See Gunn v. State, 291 Ark. 548, 726 S.W.2d 278 (1987); Brents v. State, 285 Ark. 199, 686 S.W.2d 395 (1985).

Viewed from counsel’s perspective at the time, we hold that the performance of Mr. Dansby’s counsel was not deficient. His counsel prevailed in asserting his marital privilege in a pretrial motion, and prevented Mrs. Dansby from testifying about the confession during the State’s case-in-chief. At the time Mr. Dansby took the stand, the State had rested without the confession being admitted into evidence. It was not until Mr. Dansby’s attorneys had concluded their direct examination that the trial court ruled, over defense counsels’ objection, that the confession to Mr. Cooper constituted a waiver of the marital privilege. As a result, the State was permitted to raise the issue of Mr. Dansby’s confession to his wife on cross-examination and to call Mrs. Dansby as a rebuttal witness. Even if in hindsight it appears that Mr. Dansby’s decision to testify in his own behalf was improvident, that decision was a matter of trial strategy and tactics. As we explained in Noel v. State: “Matters of trial strategy and tactics, even if arguably improvident, fall within the realm of counsel’s professional judgment and are not grounds for a finding of ineffective assistance of counsel.” 342 Ark. 35, 41-42, 26 S.W.3d 123, 127 (2000). Accordingly, the trial court’s ruling on this point was not clearly erroneous. In view of our holding that the performance of Mr. Dansby’s counsel was not deficient, we need not address the prejudice requirement under Strickland v. Washington, supra.

Affirmed.

       Mr. Dansby did not testify at the Rule 37.5 hearing.


author: R AY THORNTON, Justice.

text:
    Robert A. NORMAN v. Josephine L. NORMAN
    01-734
    66 S.W.3d 635
    Supreme Court of Arkansas
    Opinion delivered February 14, 2002
    [Petition for rehearing denied March 21, 2002.]

      T.B. Patterson, Jr, P.A., for appellant.

      James A. McLarty, III, for appellee.
   R AY THORNTON, Justice.

This action stems from an earlier appeal. Norman v. Norman, 334 Ark. 225, 970 S.W.2d 270 (1998) (Norman I). In that case, we were asked to determine whether C. Burt Newell, an attorney with Bachelor, Newell & Oliver, had a conflict of interest that would require him to disqualify from representing appellee, Josephine Norman, in an action seeking to enforce an alimony provision contained in a 1978 divorce decree dissolving the marriage between herself and appellant, Robert Norman. The alleged conflict of interest resulted from the fact that Latt Bachelor, a partner along with Mr. Newell in the Bachelor, Newell & Oliver law firm, was a former associate of George Callahan and Mr. Callahan had represented appellant in the 1978 divorce action. We held that Mr. Newell should have disqualified from representing appellee and remanded the case.

Our mandate was entered on July 17, 1998, and on September 1, 1998, appellant filed a motion seeking a judgment from appellee, Mrs. Norman, and from Mr. Newell, and Bachelor, Newell & Oliver for attorney’s fees, costs, and other personal expenses incurred in defending the case brought by Mrs. Norman, using Mr. Newell as her attorney. Appellant alleged that he had incurred expenses in excess of $20,000. On September 11, 1998, Mr. Newell filed a response to appellant’s motion stating that he was not hable to appellant for costs or attorney’s fees. Bachelor, Newell & Oliver did not respond to the motion. Neither Mr. Newell nor Bachelor, Newell & Oliver were joined as parties to the on-going litigation between appellant and appellee.

On September 17, 1998, appellee filed a motion requesting a voluntary dismissal of her suit against appellant. On September 10, 1999, the chancellor entered an order finding that there was no cause of action between appellant and Bachelor, Newell & Oliver. The trial court also noted that there was no showing that the firm had ever been named as a party or properly served. Additionally, the chancellor found that this court had previously ruled on the issue of whether appellant was entitled to costs and attorney’s fees, and therefore found that our ruling was the law of the case. The trial court further found that the motion sought damages, not fees, and that appellant did not have standing to seek to have the fees charged by Mr. Newell to his client, Mrs. Norman, “disgorged.” Finally, with respect to the claim against Mr. Newell, the chancellor found that there was constitutionally deficient notice to Mr. Newell and that Mr. Newell had a right to know the nature of the claim asserted against him by appellant. Appellant appealed this order.

In an opinion handed down by this court on October 26, 2000, we determined that appellant was appealing from an order that was not final. Norman v. Norman, 342 Ark. 493, 30 S.W.3d 83 (2000). Specifically, we determined that because the chancellor had not granted appellee’s motion to voluntarily dismiss her action, there was still an action pending in the chancery court and that pursuant to Rule 54(b) of the Arkansas Rules of Civil Procedure we were precluded from considering an appeal from an order that was not final.

On March 6, 2001, the chancellor granted Mrs. Norman’s motion for voluntary dismissal. On April 4, 2001, appellant filed a notice of appeal seeking to appeal the chancellor’s orders entered September 10, 1999, and March 6, 2001. We affirm the chancellor.

We review chancery cases de novo on the record, but we do not reverse a finding of fact by the chancellor unless it is clearly erroneous. Crawford & Lewis v. Boatmen’s Trust Co. of Arkansas, Inc., 338 Ark. 679, 1 S.W.3d 417 (1999). We will affirm the trial court when it has reached the right result, even though it may have announced the wrong reason. Madden v. Aldrich, 346 Ark. 405, 58 S.W.3d 342 (2001).

We first address the issue of whether either Mr. Newell or Bachelor, Newell & Oliver were parties to the on-going litigation between appellant and appellee. There is no showing in the record to support a contention that either Mr. Newell or his law firm were joined as parties to the litigation between Mr. and Mrs. Norman. We have held that the rules of civil procedure govern the conduct of parties to a legal action. See Reynolds v. Guardianship of Sears, 327 Ark. 770, 940 S.W.2d 483 (1997) (holding that the rules of civil procedure inherently apply to parties to an action). According to Black’s Law Dictionary, a “party” is:

[A] person concerned or having or taking part in any affair, matter, transaction, or proceeding, considered individually. A “party” to an action is a person whose name is designed on record as plaintiff or defendant. [The] term, in general, means one having right to control proceedings, to make defense, to adduce, and cross-examine witnesses, and to appeal from a judgment.
“Party” is a technical word having a precise meaning in legal parlance; it refers to those by or against whom a legal suit is brought, whether in law or equity, the party plaintiff or defendant, whether composed of one or more individuals and whether natural or legal persons; all others who may be affected by the suit, indirectly or consequently are persons interested but not parties.

Black’s Law Dictionary 1122 (6th ed. 1990); see also Reynolds, supra.

We hold that neither Mr. Newell nor his law firm was a party to the Norman’s divorce action. We further conclude that because Mr. Newell and his law firm were not parties to the divorce action, they should not have been served with appellant’s motions; they were not required to respond to appellant’s motions; and they were not required to offer a defense to appellant’s motion. Accordingly, we affirm the chancellor.

We are not persuaded by appellant’s argument that he had a valid action against Mr. Newell and his law firm based on our holding in Liles v. Liles, 289 Ark. 159, 711 S.W.2d 447 (1986). In Liles, we affirmed the decision of the trial court in assessing damages including attorney’s fees and costs against an attorney for his tortious actions. While gathering information to use against Barbara Liles in a pending divorce action, the attorney, Dave Harrod, entered into a conspiracy with Tommy Liles to defraud Barbara of her marital assets. Barbara understood Harrod to be representing her and spent all day in his office preparing for a divorce action. Harrod told her that he was her attorney. He prepared an addendum to a trust, a property settlement agreement, and an entry of appearance on Barbara’s behalf. The trust addendum named Harrod as trustee. At the end of the day, Harrod advised Barbara that he would no longer be representing her but that he would be representing Tommy. Harrod then filed Tommy’s divorce petition. Id. It is clear that Harrod not only established privity with Barbara by representing himself to be her attorney, but he also became a party to a conspiracy to defraud her of her property.

The facts in this case are inapposite to those in Liles, and the holding in Liles is not controlling on the outcome of this case. Here, our decision that Mr. Newell should be disqualified from representing Mrs. Norman was not based upon a showing of tortious actions or fraudulent behavior. Mr. Newell was not a party to the divorce action and his failure to disqualify from representation of appellee in accordance with our code of ethics did not create a cause of action against him in favor of appellant. Accordingly, we have no hesitancy in holding that a tort action against a non-party attorney cannot be sustained under the facts in this case.

Having reached the conclusion that neither Mr. Newell nor his law firm were ever made parties to the underlying divorce action, we need not specifically address the other arguments in appellant’s brief asserting claims against Mr. Newell or Bachelor, Newell & Oliver.

We next turn to the question whether appellant’s September 1, 1998, motion seeking attorney’s fees and costs from appellee, Mrs. Norman, was properly denied by the chancellor. Appellant contends that the chancellor erred when he determined that the issue of recovering attorney’s fees from appellee was barred by the doctrine of law of the case. Appellant further argues that appellee should be required to pay his “attorney’s fees, costs, through this appeal and subsequent proceedings, together with any other expenses he incurred as a result of the wrongful pursuit of the claim of defendant by Mr. Newell.”

On this issue, the chancellor found “the award of fees and costs is a matter within the jurisdiction of the Arkansas Supreme Court which has ruled making that issue the rule of the case.” In our mandate issued July 17, 1998, we awarded appellant $100.00 for filing fee, $500.00 for preparation of his brief, and $1,460.65 for preparation of the record. We did not award attorney’s fees to appellant.

We cannot agree with the chancellor’s finding that the law of the case doctrine controls this issue. As appellant points out in his brief, this issue was not ripe for consideration until we determined in Norman I that Mr. Newell’s conflict of interest precluded his representation of appellee.

Notwithstanding our conclusion that the chancellor erroneously applied the doctrine of the law of the case as the basis for his denial of appellant’s request for attorney’s fees from appellee, we hold that the chancellor reached the right result. Specifically, we hold that appellant was not entitled to attorney’s fees from appellee because he failed to properly request that he be reimbursed for such fees. Rule 54 of the Arkansas Rules of Civil Procedure governs requests for attorney’s fees. The rule provides:

(e)(1) Attorneys’ Fees. Claims for attorneys’ fees and related nontaxable expenses shall be made by motion unless the substantive law-governing the action provides for the recovery of such fees as an element of damages to be proved at trial.
(2) Unless otherwise provided by statute or order of the court, the motion must be filed and served no later than Í4 days after entry of judgment; must specify the judgment and the statute or rule entitling the moving party to the award; and must state the amount or provide a fair estimate of the amount sought. If directed by the court, the motion, shall also disclose the terms of any agreement with respect to fees to be paid for the services for which the claim is made.

Id. (emphasis added).

The entry of judgment triggering the application of Rule 54 was our mandate issued on July 17, 1998. Under Rule 54 a motion for attorney’s fees must be filed no later than fourteen days from the entry of the order of the court. Here, the motion was filed on September 1, 1998, approximately forty-six days after the entry of our mandate. We also note that appellant’s untimely motion did not provide the chancellor or this court the specific statute or rule that would entide him to such fees. Because appellant failed to comply with Rule 54(e) of the rules of civil procedure, we hold that appellant is not entitled to receive attorney’s fees or other expenses from appellee, Mrs. Norman.

In appellant’s last point on appeal, he argues that the chancellor erred on several rulings. First, appellant argues that the chancellor erred in failing to strike the pleadings filed by Mr. Newell on behalf of appellee. Appellant did not receive a ruling from the chancellor on this issue. We have held that the failure to obtain a ruling from the trial court is a procedural bar to our consideration of the issue on appeal. Madden, supra. Because appellant fafied to obtain a ruling from the chancellor on this issue, we are precluded from considering this issue on appeal.

Next, appellant argues that the chancellor erred in granting appellee’s motion for nonsuit. Appellant does not support this contention with a convincing argument or citation to authority. Where no citation to authority or convincing argument is offered, we decline to address the issue on appeal. See City of Van Buren v. Smith, 345 Ark. 313, 46 S.W.3d 527 (2001) (holding that this court does not consider arguments that are unsupported by convincing argument or sufficient citation to legal authority).

Affirmed.

        See also Ark. Code Ann. § 16-22-310 (Repl. 1999).

       We note that appellant also argues that Mr. Newell and Bachelor, Newell & Oliver should be jointly and severally liable with appellee for these costs. Because we have already determined that neither Mr. Newell nor his firm was a party to the Norman’s litigation, we decline to address this argument.


text:
    STATE of Arkansas v. Eric G. HOLMES
    CR 01-729
    66 S.W.3d 640
    Supreme Court of Arkansas
    Opinion delivered February 14, 2002

      Mark Pryor, Att’y Gen., by: Clayton K. Hodges, Ass’t Att’y Gen., for appellant.
    No response.
   R AY THORNTON, Justice.

Appellant, State of Arkansas, .brings this appeal, pursuant to Ark. R. App. P.—Crim. 3 (2001), from an order entered by Pulaski County Circuit Court granting a posttrial motion to set aside the verdict in favor of appellee, Eric G. Holmes. On appeal, the State first argues that the trial court erred in granting the posttrial motion because appellant had waived any question pertaining to the sufficiency of the evidence by failing to comply with Ark. R. Crim. P. 33.1(b) (2001), and as a result, was barred from challenging the sufficiency of the evidence supporting his conviction in a posttrial motion. For its second point, the State contends the trial court erred by not having a hearing on a posttrial motion when requested by the State. We agree with the State’s argument on the first point, and reverse and remand.

Holmes was charged by felony information with two counts of theft by deception and one count of violating the real estate licensing law. In the information, the State alleged that Holmes obtained $1,300.00 from Priscilla Jones and $7,000.00 from Rose Taylor, in violation of Ark. Code Ann. § 5-36-103 (Repl. 1997), by falsely representing to each of these women that he was going to sell them a house when he knowingly intended to take their money without conveying title to the property.

At the bench trial, Priscilla Jones testified that she attempted to purchase a home from Holmes in March 1999. She testified that she entered into an agreement with Holmes in February 1999, and that Holmes was making repairs to the house before she moved in. She stated that she gave him a thirteen-hundred dollar cashier’s check as a down payment, with a promise to pay more money down after the completion of the repairs.

Jones further testified that “ [something unusual happened in Aprfi 1999.” She said Holmes told her, “Well, I don’t know if it’s a good idea that you should move in.” According to Jones, she and Holmes were to meet to discuss the alleged problem with the house, but “[n]othing ever transpired.” Holmes then told her that she could move into the house in a couple of months. Someone else moved into the house in mid-April 1999. She attempted to contact Holmes, but he would not return her calls.

Rose Taylor also testified at trial. She had been a victim of the tornado in 1998, and had lost her home on Battery Street. Shortly thereafter, she met Holmes, who called her at work one day and said that he had a home that she could buy. She said, “[W]e’ll see,” and stated that she felt pressure from Holmes to buy a home from him. Holmes showed her a home, and Taylor acquired a down payment from FEMA and a tax refund check.

Prior to moving into the home, she told Holmes that she did not want to give him any money down because she wanted to check her credit. According to Taylor, Holmes gave her the keys and told her to move in. She signed a contract and moved into the house on March 21, 1999. She testified that he wrote the contract as a purchase agreement to buy. She later gave Holmes approximately $1200 to $1300, and $3500 when Holmes worked on the loan for the house. She further testified that “I gave Eric more money at other times on this house.” She later obtained a backdated receipt in the amount of $7000 with a date of February 5, 1999. In early June 1999, Holmes told Taylor that her loan did not go through and that she had to move out of the house because he had sold it to someone else. He assured her that he would return her down-payment, but he did not.

Detective Jacqueline Brandford, a detective at Little Rock Police Department, testified that she received a complaint and a report filed by Rose Taylor. She contacted Holmes several times by phone. On September 1, 1999, after Miranda warnings were given to him, he signed a waiver form, and Brandford obtained a taped statement from him. That tape was played in its entirety at trial. In his taped interview, Holmes denied that he received the $7000 from Rose Taylor.

After the State rested, defense counsel moved for a directed verdict as to all counts, and the trial court denied the motions.

The defense then presented its case-in-chief during which Holmes testified that Taylor never gave him $7000 but that he wrote out a receipt for $7000. On cross-examination, he testified that he created a false receipt for $7000. Holmes also admitted on cross-examination that he lost his license because he was found guilty of violations by the real estate commission.

After the close of all the evidence, the State made its closing argument. The defense counsel then responded by presenting his closing arguments. At the end of his closing argument, defense counsel made the following statement:

Mr. Kearney [counsel for Holmes]: And, your Honor, for that reason and because the state has the burden and they’ve not met it, we’d ask you to dismiss each charge.

The trial court convicted Holmes of the two counts of theft of property, but granted an earlier motion to dismiss on the licensing charge. The trial court sentenced Holmes as a habitual offender to ten years’ incarceration with five years suspended conditioned upon his payment of restitution to the victims.

After he was convicted, Holmes filed a motion to set aside the verdict, or in the alternative, a motion for a new trial. In his motion, he argued that the State’s witnesses were not credible, that the State failed to prove motive, and included a stipulation in which he proposed to pay full restitution to the victims, conditioned in part on the granting of his motion. The State filed a responsive pleading and requested a hearing. The trial court, without holding a hearing, granted Holmes’s motion and set aside the convictions, accepting Holmes’s stipulation to provide his cash bond as restitution to the victims. The State filed a timely notice of appeal from the order setting aside Holmes’s conviction. From the trial court’s order granting Holmes’s motion to set aside the verdict, the State brings this appeal.

For its first allegation of error, the State argues that the trial court erred in granting Holmes’s motion because he had waived any question pertaining to the sufficiency of the evidence by faffing to comply with Ark. R. Crim. P. 33.1(b) (2001). Specifically, the State argues that, because Holmes did not make a motion for directed verdict at the close of all the evidence, the trial court lacked authority to grant his motion.

Arkansas Rule of Criminal Procedure 33.1 provides in pertinent part:

(b) In a nonjury trial, if a motion for dismissal is to be made, it shall be made at the close of all of the evidence. The motion for dismissal shall state the specific grounds therefor. If the defendant moved for dismissal at the conclusion of the prosecution’s evidence, then the motion must be renewed at the close of all of the evidence.
(c) The failure of a defendant to challenge the sufficiency of the evidence at the times and in the manner required in subsections (a) and (b) above will constitute a waiver of any question pertaining to the sufficiency of the evidence to support the verdict or judgment. A motion for directed verdict or for dismissal based on insufficiency of the evidence must specify the respect in which the evidence is deficient. A motion merely stating that the evidence is insufficient does not preserve for appeal issues relating to a specific deficiency such as insufficient proof on the elements of the offense. A renewal at the close of all of the evidence of a previous motion for directed verdict or for dismissal preserves the issue of insufficient evidence for appeal. If for any reason a motion or a renewed motion at the close of all of the evidence for directed verdict or for dismissal is not ruled upon, it is deemed denied for purposes of obtaining appellate review on the question of the sufficiency of the evidence.

Id. (emphasis added). Rule 33.1 is strictly construed. Etoch v. State, 343 Ark. 361, 37 S.W.3d 186 (2001) (citing Thomas v. State, 315 Ark. 504, 868 S.W.2d 483 (1994)).

In the present case, Holmes’s motion for directed verdict was not made at the close of all the evidence. Rather, it was included during Mr. Kearney’s closing argument, as quoted above. Under Etoch, supra, we adhere to a strict interpretation of our rules, and we hold that Holmes did not comply with Ark. R. Crim. P. 33.1(b) and (c). In order to preserve the question of the sufficiency of the evidence, Holmes should have made his motion for directed verdict at the close of all the evidence before closing arguments. Because of his failure to do so, we hold that the trial court erred in considering his motion to set aside the verdict for insufficient evidence, and we reverse and remand with instructions to reinstate Holmes’s convictions and sentence.

Because the State prevails on its first point on appeal, we decline to reach the merits of the remaining arguments.

Reversed and remanded.


author: P ER CURIAM.

text:
    Lee Charles LEWIS v. STATE of Arkansas
    CR 01-1327
    66 S.W.3d 644
    Supreme Court of Arkansas
    Opinion delivered February 14, 2002

      John F. Gibson, Jr., for appellant.
    No response.
   P ER CURIAM.

Appellant Lee Charles Lewis, by and through his attorney, John F. Gibson, Jr., has filed a motion for rule on clerk. Attorney, John F. Gibson, Jr., states in the motion that the record was tendered late due to a mistake on his part.

We find that such an error, admittedly made by an attorney for a criminal defendant, is good cause to grant the motion. See In Re Belated Appeals in Criminal Cases, 265 Ark. 964 (1979) (per curiam).

The motion is, therefore, granted. A copy of this opinion will be forwarded to the Committee on Professional Conduct.


text:
    Buckie MILLS v. STATE of Arkansas
    CR. 02-67
    66 S.W.3d 643
    Supreme Court of Arkansas
    Opinion delivered February 14, 2002

      Ben Beland, Public Defender, for appellant.
    No response.
   P ER CURIAM.

Ben Beland, a state-salaried, full-time public defender for the Twelfth Judicial District, was appointed by the trial court to represent Appellant Buckie Mills, an indigent defendant, in his rape and kidnaping case. Following a trial, Mills was sentenced to life in prison without parole. A timely notice of appeal and request for the transcribed record have been filed.

Mr. Beland now asks to be relieved as counsel for Mr. Mills in this criminal appeal as a result of this court’s decision in Rushing v. State, 340 Ark. 84, 8 S.W.3d 489 (2000). In Rushing, this court determined that state-salaried, full-time public defenders were ineligible for compensation by the court for work performed in the appeal of a matter in which the public defender represented the defendant. In Tester v. State, 341 Ark. 281, 16 S.W.3d 227 (2000), we relieved appellant’s court-appointed public defender and appointed new counsel on appeal under similar circumstances. See also, Craft v. State, 342 Ark. 57, 26 S.W.3d 584 (2000); McFerrin v. State, 342 Ark. 61, 26 S.W.3d 429 (2000); Bolton v. State, 342 Ark. 55, 26 S.W.3d 783 (2000).

Since the time of these decisions, however, the law has changed. In the most recent legislative session, the Arkansas General Assembly amended Ark. Code Ann. § 19-4-1604 through Act 1370 of 2001, which now provides that “[p]ersons employed as full-time public defenders who are not provided a state funded secretary may also seek compensation for appellate work from the Arkansas Supreme Court or the Arkansas Court of Appeals.” Mr. Beland’s motion to be relieved as counsel on appeal is denied because the motion does not contain information regarding whether he is provided a state-funded secretary. Mr. Beland may resubmit his motion, providing information about whether he is provided a state-funded secretary, in order for us to determine whether he qualifies for dismissal in fight of the amendment to Ark. Code Ann. § 19-4-1604.