author: Diane Stoakes Mackey, Special Justice.

text:
    John Allen McNAIR, Jr. v. Patricia Coulter McNAIR
    93-97
    870 S.W.2d 756
    Supreme Court of Arkansas
    Opinion delivered March 7, 1994
    [Rehearing denied April 18, 1994.]

      Mashburn & Taylor, by: Lindlee Baker Norvell and Bill Put-man, Jr., for appellant.

      Pettus Law Firm, P.A., by: E. Lamar Pettus, for appellee.

      Hays and Newbern, JJ., not participating.

   Diane Stoakes Mackey, Special Justice.

Appellant/crossappellee John Allen McNair, Jr. filed a complaint in the Circuit Court on January 9, 1990, seeking to replevy a 1987 Chevy Blazer. On January 8, a Bill of Sale had been executed by his daughter whereby she transferred her interest in the Blazer to John McNair. In reality, she had none and did not supply a title. On January 9, an Affidavit for Delivery and an Order of Delivery were filed seeking immediate possession of the vehicle. Summons was issued and served on the appellee/cross appellant Patricia Coulter McNair by the Sheriff, who began to take possession of the Blazer on January 11, 1990. The court upon oral motion revoked the Order of Delivery and stayed delivery before the Blazer was removed from Mrs. McNair’s driveway.

The Answer denied that the daughter had any interest in the Blazer to convey and alleged that replevin was improper. Mrs. McNair counterclaimed for abuse of process and outrage based on a series of prior court actions relating to the same vehicle, on her own ownership of the Blazer, and on John McNair’s improper intention to abuse, coerce and harass her. The counterclaim also alleged the intentional infliction of emotional distress, forfeiture of bond, and conversion. No bond was actually issued.

At trial the court directed a verdict against John McNair on his replevin claim and against Patricia McNair on the tort of outrage. The jury found for Patricia McNair on her counterclaim and awarded her damages of $22,500 on the abuse of process claim, $8,227 on the conversion claim, and $70,000 in punitive damages.

John McNair’s motion for new trial was denied although the court reduced the amount of punitive damages to $20,000 and denied the Rule 11 sanctions requested by Mrs. McNair. On appeal, three points are raised.

I. The trial court erred in denying the appellant’s motion for a new trial as the verdict is clearly contrary to the preponderance of the evidence and is contrary to law.
II. The trial court maintained no jurisdiction to determine issues of marital property and therefore the jury’s verdict finding the appellant liable for conversion is void.
III. The trial court erred in denying the appellant a new trial as the jury’s award of both compensatory and punitive damages was excessive and influenced by passion or prejudice.
On cross appeal the issue is:
I. The trial court erred in ordering remittitur of the punitive damage awards.

The results of the decision of the trial court on issues I, II and III are correct, and the decision is affirmed. We will sustain the trial court’s decision if it is right, even though we may do so on a different basis. Morrison v. Lowe, 274 Ark. 358, 625 S.W.2d 452 (1981). We hold that the remittitur of the punitive award constituted error. Accordingly we reverse the trial court on this issue.

I.

John McNair challenges the jury’s verdict as being contrary to the preponderance of the evidence and does so by appealing from the trial court’s denial of a new trial. Review of the evidence convinces this Court that there is indeed substantial evidence in the record to support the jury verdicts relating to abuse of process, conversion and punitive damages.

The jury verdict in favor of Mrs. McNair’s counterclaim based on abuse of process is challenged as being contrary to the preponderance of the evidence and contrary to law. There is no challenge to the Court’s directed verdict on the replevin action, although Mr. McNair belatedly mentions a possible constitutional defect in the replevin statutes. This issue was not developed at trial nor was the Attorney General notified in advance, as is required, and the Court does not find that he raises a serious constitutional challenge. To do so would be anomalous, at any rate, since he proceeded under that statute. See Olmstead v. Logan, 298 Ark. 421, 768 S.W.2d (1989).

The elements of an abuse of process claim are: (1) a legal procedure set in motion in proper form even with probable .cause and even with ultimate success, (2) but, perverted to accomplish an ulterior purpose for which it is not designed, and (3) a wilful act in the use of process not proper in the regular conduct of the proceeding. Union Nat’l Bank v. Kutait, 312 Ark. 14, 846 S.W.2d 652 (1993).

Evidence submitted at trial indicates that John McNair elected to use the “short” replevin statute, rather than to comply with the added provisions passed by the Legislature in 1973. The 1973 provisions were enacted to correct any constitutional problems in Ark. Code Ann. §18-60-809, et. seq. in light of Fuentes v. Shevin, 407 U.S. 67 (1972). The Supreme Court held in Fuentes that the issuance of a writ of replevin without prior notice to the party in possession of property was a violation of due process. While the old statute was not repealed, the added notice provisions are constitutionally required. See Ark. Code Ann. §8-60-801 — 808. No prior notice was given to Patricia McNair; the deputy sheriff simply appeared at her home to take away her vehicle. Furthermore, Mr. McNair had no real title to the Blazer, a basic requirement to begin replevin. Additionally, no bond was posted. Thus, the action was not begun in proper form either under the old or newer statute.

The jury could find that Mr. McNair acted with an ulterior purpose from the testimony relating to his prior attempts to obtain the Blazer through successive chancery actions. His own testimony showed confusion, and contradictions which the jury apparently believed called into question his good faith in beginning the replevin action based only on guesses and a derivative claim of ownership. We will not, of course, substitute our judgment on any question of credibility. The jury could find that the first and second elements were sufficiently supported by the evidence.

In Cordes v. Outdoor Living Ctr.. Inc., 301 Ark. 26, 781 S.W.2d 31 (1989) the Court discussed the nature of the third element, the wilful act requirement. For the third element to be present the procedure must have been perfected to accomplish an ulterior purpose for which it was not designed. Showing that a vexatious lawsuit was filed is not enough by itself. There must be a specific abusive use of “process,” like serving an arrest warrant or, as here, obtaining an Order of Delivery and handing it to the Sheriff for execution. It is uncontradicted that Mr. McNair did exactly that.

Mrs. McNair did provide substantial evidence on each of the three required elements, and therefore is entitled to recover on her claim of abuse of process. The trial court is affirmed in denying a new trial on that claim.

II.

Appellant McNair raises a jurisdictional issue relating to Patricia McNair’s counterclaim for damages for conversion of one-half of an IRS refund resulting from the filing of a joint return covering the last year of the marriage. This issue was not preserved, but since the appellant urges lack of jurisdiction, this issue may be raised for the first time on appeal. See, Liles v. Liles, 289 Ark. 159, 711 S.W.2d 447 (1989); Hilburn v. 1st State Bank of Springdale, 259 Ark. 569, 535 S.W.2d 810 (1976).

The trial court properly instructed the jury on the elements of conversion, which was one of the grounds for damages alleged in Mrs. McNair’s Counterclaim. By doing so the jury was directed to make a determination on an action clearly cognizable in the circuit court.

To the extent that John McNair attempted to raise an ambiguity or omission in the separate Stipulation Agreement as a defense to the charge of conversion, he raised a matter of contract interpretation relating to an asset which did not exist at the time of the Agreement but which, due to the Agreement’s failure to address the issue, had arisen relating to a tax refund received after the divorce. (The Chancery Court did not retain jurisdiction concerning the Agreement.) Interpretation of an ambiguous contract term is within the jurisdiction of the circuit court for resolution by the trier of fact. Shipley v. Shipley, 305 Ark. 257, 807 S.W.2d 915 (1991).

The trial court therefore did not lack subject matter jurisdiction since both conversion and contract interpretation are encompassed within its power.

Mr. McNair further argues that submission to the jury of an instruction relating to division of marital property brought improper equity considerations to the jury in its deliberation. No party may assign as error on appeal the giving of an instruction unless he objects at trial and gives the grounds for his objection. Delta School of Commerce, Inc. v. Wood, 298 Ark. 195, 766 S.W.2d 424 (1989). This Mr. McNair failed to do; he may not now challenge the instruction.

III.

John McNair claims that both the compensatory and punitive damages were excessive and influenced by passion or prejudice. This court’s review, as set out in Morrison v. Lowe, 274 Ark. 358, 625 S.W.2d 452 (1981), is de novo, to determine whether the amount of the judgment shocks the conscience of the Court. The Court may either restore the jury verdict or even reduce it further.

Patricia McNair has also challenged on cross appeal the punitive damages award, as remitted by the trial court. Remittitur is within the inherent power of the court if an award is grossly excessive or appears to be the result of passion or prejudice. Newbern, Ark. Civil Prac. and Proc. §27-1; Holmes v. Hollingsworth, 234 Ark. 347, 352 S.W.2d 96 (1961). It may be ordered sua sponte. When a losing party files an appeal, the winning party has the right to challenge the court’s revision of the jury verdict by means of cross appeal even if it agreed to the remittitur.

A review of our cases demonstrates that a number of standards have been applied to measure the propriety of punitive or exemplary damages! The extent and enormity of the wrong, the intent of the party committing the wrong, all the circumstances, and the financial and social condition and standing of the erring party may be considered. Holmes, supra at 352. Appropriate compensation is not the test, but rather such damages are to be a penalty for conduct which is malicious or done with the deliberate intent to injure another. The penalty should be sufficient to deter others from such conduct. Ray Dodge. Inc. v. Moore, 251 Ark. 1036, 1044 479 S.W.2d 518 (1972). See also, Interstate Freeway Services, Inc. v. Houser, 310 Ark. 302, 310 835 S.W.2d 872, 876 (1992).

The jury had before it evidence of the affluence of Mr. McNair so that a large verdict could have been viewed as necessary for adequate punishment. The repetitive legal proceedings relating to the Blazer, the conversion of the IRS refund coupled with the forging of Mrs. McNair’s name, and John McNair’s failure to comply with the replevin statutes were before the jury, which could have deduced premeditated malice and the intent to harm his ex-wife from that evidence. The jury was instructed without objection that violation of the replevin statute was evidence to be considered, and the jury had heard that not only was the bond not posted, but more importantly, that no notice was given to Mrs. McNair. While the punitive award is large, this court has approved damages proportionally larger. See, e.g., Viking Insurance Company of Wisconsin v. Jester, 310 Ark. 317, 836 S.W.2d 371 (1992).

Mr. McNair argues that testimony was elicited which inflamed the sympathy of the jury so as to increase the award because of passion and prejudice. A review of the record shows that the most damaging testimony was elicited by John McNair’s attorney on cross examination. Such testimony, if error, cannot now be heard to be the basis for remittitur when evoked by Mr. McNair himself. Testimony supportive of Patricia McNair which was brought out by her own attorney was not objected to and thus cannot be cited as the improper basis for the jury’s award either.

The court may not substitute its judgment for the jury’s when there is a basis in the evidence for its award and no objection to evidence tending to create passion or prejudice. Clayton v. Wagnon, 276 Ark. 123, 633 S.W.2d 19 (1982); Morrison, supra. While this Court may not have awarded the sum thought by the jury to be a proper punitive award, it, too, may not substitute its judgment for the jury’s punitive damages award which meets the standards for such awards. Ample evidence exists that such standards were met. Accordingly, the jury’s award of punitive damages should be upheld, the remittitur was improper, and the court’s judgment ordering reduction of damages is reversed because on de novo review, the award does not shock the conscience of the Court. The jury’s punitive damage award of $70,000 is therefore restored, and Mrs. McNair’s cross appeal is granted.

John McNair also challenges the award of compensatory damages as being excessive and swayed by passion or prejudice. As to the latter, the record indicates that both sides submitted evidence derogatory to the other without objection. The evidence most damaging and most likely to raise passion or prejudice was evoked by Mr. McNair’s own attorney, and he cannot now be heard to complain about that evidence.

To support his claim that the $22,500 awarded on Mrs. McNair’s counterclaim based on abuse of process is excessive, Mr. McNair points out that the actual period of time during which the replevin action was being carried out was about one hour and that the Blazer never left the driveway. The attempted execution of delivery occurred at 10:00 a.m. in the morning and the deputy sheriff was respectful. He further claims that the proceeding did no damage to Mrs. McNair’s reputation, and that she did not prove that she had to see a doctor or stay awake at night as a result of the attempted replevin.

In response, Mrs. McNair showed that she was so emotionally upset by the continuation of John McNair’s harassment that she collapsed on the sidewalk crying and shaking. Further, she had need of the support of friends. This episode took place when she was home alone caring for the youngest McNair children, and she has needed counseling. She was required to hire a lawyer to protect her interests. She testified that this was in effect, the last straw after two previous lawsuits brought against her by John McNair. The jury thus received evidence sufficient to support its award for damages based on a cause of action which is not usually susceptible of exact proof of loss. The jury chose to rely on Mrs. McNair’s evidence in assessing the award, which we will not disturb.

The Court finds, based on the foregoing, that the compensatory award of $22,500 was based on sufficient evidence, was not merely the result of passion and prejudice, and does not shock the conscience of the Court. The denial of a new trial on the issue of compensatory damages is affirmed.

The damage award of $8,227 on the conversion claim was not directly challenged by either party and need not be addressed.

IV.

Patricia McNair argues entitlement to the sum of $1,347.00 for attorney fees and costs incurred in preparation of the Supplemental Abstract. Unquestionably, some material relevant to the issues on appeal was added in the Supplemental Abstract. Some of it was repetitious and some of it was needed to support her counterclaim. It is impossible to separate the time and costs for the Supplemental Abstract portions essential only to the appeal itself. The court will not speculate by allocating those costs, and so the motion is denied.

Holt, C.J., and Glaze, Dudley, Corbin, and Brown, JJ. join in this opinion.

Special Justice Ray Baxter joins in this opinion.

Hays and Newbern, JJ., not participating.

      The trial court modified the jury’s calculation with agreement of the parties.

      he Court in no way condones the submission of an equitable instruction relating to the division of marital property to the jury in these circumstances. Nevertheless, appellant failed to object before the trial court and may not raise the issue before this Court for the first time.


source: Caselaw Access Project

author: Jack Holt, Jr., Chief Justice.

license: Public Domain

text:
    Evelyn A. RICHARDSON v. Thomas W. FLANERY and Bonnie Flanery
    93-1015
    871 S.W.2d 589
    Supreme Court of Arkansas
    Opinion delivered March 14, 1994

      Matthews, Sanders, Liles & Sayes, by: Marci Talbot Liles and Mel Sayes, for appellant.

      Thomas & Smith, by: Hoyt Thomas, for appellees.
   Jack Holt, Jr., Chief Justice.

The jury returned a verdict in this case favoring Mrs. Richardson, who was involved in an automobile accident with the Flanerys, and the trial court granted the Flanerys’ motion for new trial. Under the circumstances, we hold that the court did not abuse its discretion in setting the jury verdict aside.

On Christmas Day, 1991, the appellees, Thomas and Bonnie Flanery, and their granddaughter, were travelling south on Highway 167 outside of Batesville, Arkansas. As Mr. Flanery was driving, he noticed another car “quite a ways” away — probably some one hundred feet or so — approaching on Barnett, the feed-on-lane to the highway. According to Mr. Flanery, he did not need to slow down because he knew that the other car had a yield sign. According to appellant, Mrs. Evelyn Richardson, she did look, but when she did not see anyone coming, she proceeded forward. Mr. Flanery saw her at the last moment and went over the yellow line into the northbound turn lane to avoid her but without success. As a result, a collision occurred, and the Flanery vehicle landed in a ditch west of the highway. Mrs. Richardson’s car came to rest facing south out in the intersection in the southbound lane.

A deputy sheriff of Independence County, J. W. Wamack, who arrived at the scene of the accident soon after the wreck, stated that he thought Mrs. Richardson was heading down Barnett shortly before the accident. Deputy Wamack questioned the parties as to their injuries. Mr. Flanery was limping, and Mrs. Flanery complained of her shoulder. Deputy Wamack offered to call them an ambulance, but they said that they could drive themselves to the hospital, which they did.

The Flanerys filed suit against Mrs. Richardson, claiming that her negligence caused the automobile accident and their injuries. As a result of the accident, Mr. Flanery allegedly sustained multiple bruises, contusions and abrasions, severe strain and sprain to his neck, back, right shoulder and right elbow, a tear in his right knee, medical expenses, lost wages and disability all totalling $75,000. Mrs. Flanery claimed that Mrs. Richardson’s negligence caused her, among other injuries, cervical and lumbar sprain and strain which extended to the hip muscles, medical expenses, lost wages, and disability, resulting in damages totalling $50,000. Thereafter, Mr. Flanery amended their complaint to increase his request for damages to $110,000.

The jury returned a general verdict in favor of Mrs. Richardson. Thereafter, the Flanerys filed a motion for new trial. Citing Ark. R. Civ. R 59(a)(6), they argued that the verdict was contrary to the preponderance of the evidence that Mrs. Richardson was negligent. The trial judge agreed, explaining:

[T]he jury verdict in favor of the defendant was contrary to the testimony given at the trial by the plaintiffs and investigating officer, and while the defendant denied liability, her testimony indicated that the accident resulted from her negligence.
That while there could be differing opinions as to the amount and type of damages suffered by the plaintiffs, it was unquestioned that there was damage of a substantial amount to the plaintiffs’ vehicle that could and did corroborate the damages testified to by the plaintiffs.

Arkansas Rule of Civil Procedure 59(a)(6) provides: “A new trial may be granted to all or any of the parties on all or part of the issues on the application of the party aggrieved, for ... the verdict or decision is clearly contrary to the preponderance of the evidence or is contrary to the law.” Under this subdivision, the trial court has some discretion in the matter, but that discretion is limited, and it may not substitute its view of the evidence for the jury’s except when the verdict is clearly against the preponderance of the evidence. People’s Bank & Trust Co. v. Wallace, 290 Ark. 589, 721 S.W.2d 659 (1986); Ark. R. Civ. P. 59(a)(6).

The test we apply in reviewing the trial court’s granting of the motion is whether the judge abused his or her discretion. Razorback Cab v. Martin, 313 Ark. 445, 856 S.W.2d 2 (1993). A showing of abuse of discretion is more difficult when a new trial has been granted because the party opposing the motion will have another opportunity to prevail. Turrise v. Crane, 303 Ark. 576, 798 S.W.2d 684 (1990). Also, we must not confuse this standard with that of our review of a trial court’s granting of a judgment notwithstanding the verdict, which provides that a court may set aside the jury verdict if: (1) there is no substantial evidence to support the jury’s verdict, and (2) the moving party is entitled to a judgment as a matter of law. Dr. Pepper Bottling Co. v. Frantz, 311 Ark. 136, 842 S.W.2d 37 (1992).

Applying Ark. R. Civ. R 59(a)(6), we hold that the trial judge did not abuse his discretion in granting the Flanerys’ motion for new trial and in finding that the verdict was clearly contrary to the preponderance of the evidence because the overwhelming weight of evidence was that Mrs. Richardson had negligently caused the auto accident. The only evidence tending to disprove the allegations of negligence against Mrs. Richardson is her own testimony regarding the cause of the accident. However, it is unrefuted that the Flanerys had the right-of-way when the accident occurred. Even Mrs. Richardson offered no explanation for how the accident occurred, other than to claim that the Flanerys struck her, rather than vice versa: “Yeah, I did not see. I slowed down. I looked. I did not see him. I mean, I didn’t see their automobile, truck.”

Although Mrs. Richardson claimed that the Flanerys struck her, the Flanerys and their granddaughter testified that Mrs. Richardson had struck them. Deputy Sheriff Wamack also explained that, “[T]he yield sign is there to protect vehicles from running into vehicles coming down as Flanery was doing. You have the right-of-way coming down through here, and any vehicle that runs up here and down does not observe the yield sign and goes out and hits a vehicle there in the line of traffic has violated the law.”

As the trial judge recognized, there were also problems with the evidence which arose from the Flanerys attempt to prove their damages for personal injuries. For example, Mr. Flanery testified that he sustained injuries to his right knee, perhaps by hitting the gear shift during the collision. However, on the day of the accident, he did not tell the emergency room staff that his knee was bothering him. Further, when he visited his orthopedist, Dr. Thomas, in January 1992, he denied having back, hip or leg pain. It was not until March 1992, some three months after the car accident, that he complained about problems with his knee. Dr. Thomas’ deposition was admitted into evidence, and in it, he explained that the problems with Mr. Flanery’s knee are the “result of what I would perceive as a preexisting problem. It was more degenerative wear and tear as opposed to an acute rip in his knee or tear.” He explained that other factors contributing to Mr. Flanery’s condition are his age, weight, and occupation. However, Dr. Thomas explained that he had no reason to doubt Mr. Flanery’s veracity as to the onset of his knee problems.

Likewise, Mrs. Flanery’s injuries were disputed. She complained after the accident that her shoulder blades and neck were hurting her, and the emergency room staff x-rayed her right shoulder blade. Although she claims that they did not look at her neck, the emergency room report reveals that her neck muscles were soft and supple at the time of examination, indicating that her neck was uninjured. Dr. Thomas stated that her neck sprain is associated with degenerative arthritis, but that, in his opinion, he believed her problems were related to the car accident.

Despite these disputed facts, still the preponderance of the evidence supports the conclusion that Mrs. Richardson had negligently hit the Flanerys’ vehicle causing them damages, and the judge thought that the jury had ignored this fact. Under Ark. R. Civ. P. 59(a)(6), the trial court had discretion to set aside the jury verdict and grant a new trial when it believed the verdict was clearly contrary to the preponderance of the evidence, and it exercised this discretion appropriately.

Affirmed.

Corbin, J., not participating.


author: Robert H. Dudley, Justice.

text:
    The AMERICAN INSURANCE COMPANY, NAP Financial Corporation, and Mark J. Berman v. Lee CAZORT, Jr.
    93-934
    871 S.W.2d 575
    Supreme Court of Arkansas
    Opinion delivered March 14, 1994

      Hilburn, Calhoon, Harper, Pruniski & Calhoon, Ltd,., by: Phil Campbell', and Robinson, Staler & Marshall, P.A., by: Thomas B. Staler, for appellants.

      Nichols, Wolff & Ledbetter, by: Mark W. Nichols, for appellee.
   Robert H. Dudley, Justice.

Lee Cazort, Jr., appellee, a resident of Arkansas, opened a securities brokerage account with Marc Berman, a resident of Florida who was an employee of MJB Associates, Inc., a Florida corporation. The account was opened through NAP Financial Corporation, a Texas corporation which has its principal place of business in California. Cazort signed an asset management agreement with Berman and MJB, a letter of transmittal with NAP, and an asset management agreement with First Southwest Company. Each of these documents contains clauses by which Cazort agreed to submit to arbitration all controversies between himself and NAP, Berman, and MJB. The American Insurance Company, appellant, filed a corporate bond with the Arkansas Securities Department in which it agreed to be “liable to any and all persons who may suffer loss by reason of [NAP or Berman’s] failure to comply with the law of securities transactions.”

Cazort filed this suit in the Circuit Court of Pulaski County and alleged that Berman and NAP engaged in excessive and inappropriate trading in his account. The counts of the complaint alleged that Berman and NAP (1) were not properly registered to sell securities; (2) violated Arkansas statutes by making false statements; (3) committed common law fraud; (4) breached a fiduciary duty; (5) committed common law negligence; and (6) violated the federal Securities Act of 1933. In the same complaint he alleged that appellant American issued a blanket bond “to cause no person to suffer loss” by Berman and NAP’s wrongs.

Appellant American filed a cross-complaint against NAP and Berman for indemnity in the event American should be required to make payment on their behalf.

Berman and NAP filed a motion to compel arbitration in accordance with the agreements, and alleged that “the Federal Arbitration Act requires arbitration.” Cazort moved for a voluntary nonsuit of the actions against NAP and Berman. The circuit court granted leave to Cazort to voluntarily dismiss the claims against NAP and Berman. This left appellant American as the only defendant remaining in Cazort’s suit, although NAP and Berman remained in the case on American’s cross-complaint for indemnity should it be required to make payment on their behalf.

Appellant American moved for an order to compel Cazort to submit his claim to arbitration, or in the alternative, to dismiss. Cazort pleaded that he had not signed an agreement with American to arbitrate. After a hearing, the circuit court denied American’s motion to compel arbitration and denied NAP and Berman’s motions to dismiss American’s cross-complaint. The trial court denied American’s motion to compel arbitration because the complaint alleged tort causes of action which are not subject to the Arkansas Uniform Arbitration Act. See Ark. Code Ann. § 16-108-201 (b) (Supp. 1993). American, NAP, and Berman appeal and argue that the trial court’s ruling failed to address their argument that the Federal Arbitration Act is applicable and that the better policy is to compel arbitration. The argument has merit, and we reverse and remand.

The parties appeal from the order denying a motion to compel arbitration. American’s jurisdictional statement provides that the order is appealable because Ark. Code Ann. § 16-108-219(a)(1) (1987) authorizes an appeal from an “order denying an application to compel arbitration .. .” and Rule l-2(a)(12) of the Rules of the Supreme Court provides that the supreme court shall hear “interlocutory appeals permitted by statute. . . .” The statement is partially correct. The statute provides that an appeal may be taken, but the appealability of orders is governed by Rule 2 of the Arkansas Rules of Appellate Procedure and not by Rule 1-2 of the Rules of the Supreme Court. Rule 1-2 addresses the division of appellate jurisdiction between the supreme court and the court of appeals. Under Amendment 58 to the Constitution of Arkansas, which created the court of appeals, the supreme court, by rule, decides which court will have primary jurisdiction of appeals after an appeal has been validly lodged. Rule 1-2 addresses that division of appellate jurisdiction and does not address the appealability of orders. The appealability of orders is governed by Ark. R. App. P. 2. See Chem-Ash, Inc. v. Arkansas Power & Light Co., 296 Ark. 83, 751 S.W.2d 353 (1988).

Rule 2 of the Arkansas Rules of Appellate Procedure provides, with certain exceptions, that an appeal may be taken from a judgment or decree that finally determines the outcome of an action. There is no final order in this case. Indeed, the order refusing to compel arbitration is more akin to an order refusing to transfer a case from circuit court to chancery court. Chem-Ash Inc., supra. However, Rule 2 preserved all statutory rights of appeal that were in existence at the effective date of the rules, July 1, 1979. Act 38 of 1973, which authorized the supreme court to prescribe the rules, provides that rights of appeal shall continue as authorized by law. See Ark. R. App. P. 2 (court’s notes). When we promulgated Rule 2, we did not intend to alter the statutory rights of appeal that were then in existence. Sunbelt Courier v. McCartney, 303 Ark. 522, 798 S.W.2d 92 (1990), and Whitlock v. G.P.W. Nursing Home, Inc., 283 Ark. 158, 672 S.W.2d 48 (1984). The Uniform Arbitration Act and its section on appeals, §16-108-219, were enacted in 1969 and were in existence at the time we promulgated Rule 2. Thus, appellants have a right of appeal under Ark. R. App. P. 2.

We have refused to permit attempted appeals from orders compelling arbitration. See England v. Dean Witter Reynolds, Inc., 306 Ark. 225, 811 S.W.2d 313 (1991); Chem-Ash, Inc., 296 Ark. at 85, 751 S.W.2d at 354. Unlike those cases, this is an appeal from an order denying a motion to compel arbitration, and the Uniform Arbitration Act treats the two differently. See Ark. Code Ann. §16-108-219. In summary, appellant has a right of appeal and this court has appellate jurisdiction.

American’s primary argument is that arbitration should be compelled pursuant to the Federal Arbitration Act. It contends that the federal act controls all agreements to arbitrate disputed transactions involving interstate commerce. The argument is well taken. The word “commerce” is first defined as commerce among the several states. 9 U.S.C. § 1. Section 2 then provides:

A written provision in any . . . contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction ... or an agreement in writing to submit to arbitration an existing controversy arising out of such a contract, transaction, or refusal shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.

Cazort’s transactions involved interstate commerce. See Parry v. Bache Co., 125 F.2d 493 (5th Cir. 1942); England v. Dean Witter Reynolds, 306 Ark. 225, 811 S.W.2d 313 (1991); McEntire v. Monarch Feed Mills, Inc., 276 Ark. 1, 631 S.W.2d 307 (1982). In addition, Cazort’s complaint alleged violations of the federal Securities Act of 1933. By alleging a violation of the Securities Act of 1933, Cazort made a claim that the Supreme Court has ruled arbitrable. See Rodriquez DeQuijas v. Shearson/American Express, Inc., 490 U.S. 477 (1989) (overruling its previous holding that such claims are not arbitrable).

In England v. Dean Witter Reynolds, we indicated that claims alleging fraudulent inducement, intentional misrepresentation, and outrage were arbitrable under the federal act. 306 Ark at 226-27, 811 S.W.2d at 314-15. Cases from lower federal courts and another state are in accord. A.L. Williams & Assoc., Inc. v. McMahon, 697 F. Supp. 488 (N.D. Ga. 1988); U.M.C. Petroleum Corp. v. J & J. Enters., Inc., 758 F. Supp. 1069, 1073-74 (W.D. Pa. 1991); and Paine Webber, Jackson & Curtis v. McNeal, 239 S.E. 2d 401, 403 (Ga. 1977). Claims under state securities law are arbitrable under the federal act. See Surman v. Merrill Lynch, Pierce, Fenner & Smith, 773 F.2d 59 (8th Cir. 1988); Krog v. Mait, 712 F.2d 1148 (7th Cir. 1983) cert, denied, 465 U.S. 1007 (1984).

The Supreme Court has emphasized a strong preference for removing the parties from court and into arbitration as quickly and easily as possible, and has urged district courts to enforce these agreements as rigorously as possible. Perry v. Thomas, 482 U.S. 483, (1987); Shearson/American Express, Inc. v. McMahon, 482 U.S. 220 (1987); Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614 (1985); Dean Witter Reynolds v. Byrd, 470 U.S. 213 (1985); Moses H. Cone Memorial Hosp. v. Mercury Const. Corp., 460 U.S. 1 (1983). Even though our state act is more restrictive, cases construing Arkansas law reflected this same policy. See Dean Witter Reynolds, Inc. v. Deislinger, 289 Ark. 248, 711 S.W.2d 711 (1986); Bob Ladd, Inc. v. Adcock, 633 F. Supp. 241 (E.D. Ark. 1986); Wessell Bros. Found. Drilling Co. v. Crossett Public Sch. Dist. No. 25, 287 Ark. 415, 701 S.W.2d 99 (1985); Merrill Lynch, Pierce, Fenner & Smith v. Hovey, 726 F.2d 1286 (8th Cir. 1984). In summary, the claims asserted by Cazort are arbitrable claims under the federal act.

The next issue is whether American can compel Cazort to arbitration since Cazort did not sign an arbitration agreement with American. Generally the terms of an arbitration contract do not apply to those who are not parties to the contract. Nolde Bros., Inc. v. Local 358, Bakery and Confectioners’ Union, 430 U.S. 243 (1977). See also Morrie and Shirlee Mages Found, v. Thrifty Corp., 916 F.2d 402 (7th Cir. 1990); Lorder Indus, v. Los Angeles Printworks Corp., 803 F.2d 523 (9th Cir. 1986). However, it is also clear that nonsignatories to a contract may be deemed as parties, through ordinary contract and agency principles, for the purposes of the Federal Arbitration Act. See Merrill Lynch Commodities v. Richal Shipping Corp., 581 F. Supp. 933 (S.D.N.Y. 1984); Hartford Fin. Sys. v. Florida Software Serv., Inc., 550 F. Supp. 1079 (D. Me. 1982); Interbras Cayman Co. v. Orient Victory Shipping Co., 663 F.2d 4 (2d Cir. 1981); In re Oil Spill by the “Amoco Cadiz,” 659 F.2d 789 (7th Cir. 1981). The fact that they are not literally covered by the arbitration clause is not dispositive. See Wells Fargo Bank v. London S.S. Owners’ Mut. Ins., 408 F. Supp. 626 (S.D.N.Y. 1976); Lumbermens Mut. Casualty Co. v. Borden Co., 268 F. Supp. 303 (S.D.N.Y. 1967). Nonsignatories which have been deemed parties to such contracts include guarantors. See Merrill Lynch Commodities, 581 F. Supp. at 941; Companía Española de Petroleos v. Neureus Shipping, S.A., 527 F.2d 973 (2d Cir. 1975).

In determining whether nonsignatories should properly be deemed parties to an arbitration contract pursuant to the Federal Act, state law contract principles are invoked. Hartford Fin. Sys., 550 F. Supp. at 1086-87.

In our state law, we have recognized the distinction between a surety bond and an indemnity bond. A surety agrees to do the thing that the principal undertakes to do but fails to complete, while an indemnitor agrees to save another from a loss upon an obligation. Fausett Builders, Inc. v. Globe Indem. Co., 220 Ark. 301, 305, 247 S.W.2d 469, 471 (1952). American agreed to be “liable to any and all persons who may suffer loss by reason [of NAP’s or Berman’s] failure to comply with the law of securities transactions.” Thus, the bond at issue is an indemnity bond, and under our law Cazort has no right to pursue indemnity from American except for his losses caused by NAP and Berman. Id. at 305-06, 247 S.W.2d at 471.

Cazort’s allegation, in part, is that NAP and Berman breached their contract with him, and they are liable for that breach of contract. He relies on the contract for his breach of contract claim, but, at the same time, seeks to circumvent the arbitration provision of the same contract by dismissing his claims against the principals NAP and Berman. The indemnitor, American, had filed a cross-complaint against NAP and Berman. If this procedure were to be allowed, NAP and Berman would be denied the benefit of their arbitration agreement. Other courts, when presented with similar factual situations, have compelled arbitration.

In A.L. Williams & Associates v. McMahon, 697 F. Supp. 488 (N.D. Ga. 1988), McMahon attempted to sue the A.L. Williams company in state court upon claims arising out of his employment with A.L. Williams. 697 F. Supp. at 493. He argued that his wife and other petitioners should not be compelled to arbitrate because they were nonsignatories. Id. The district court recognized that, generally, nonsignatories cannot be forced to arbitrate, but it ruled that since Mrs. McMahon alleged “no entitlement to damages distinct from those allegedly suffered by her husband and [based] her entitlement to allegations that she was her husband’s business partner” it would not allow her to assert claims arising out of these agreements without requiring her to arbitrate them. Id. at 494. Similarly, in Hughes Masonry Co. v. Greater Clarke County School Building Corp., 659 F.2d 836 (7th Cir. 1981), the federal court of appeals held that a signatory was estopped from arguing that it should not be compelled to arbitrate with a nonsignatory. Id. at 841. It found that, since the signatory was suing the nonsignatory for breach of the contract which contained the arbitration agreement, it should not be able to turn around and deny that the nonsignatory was a party to the agreement in order to avoid arbitration. Id. at 838-39. As another court put it, “In short, [plaintiff] cannot have it both ways. It cannot rely on the contract when it works to its advantage and ignore it when it works to its disadvantage.” Tepper Realty Co. v. Mosaic Tile Co., 259 F. Supp. 688, 692 (S.D.N.Y. 1966). Still other courts have commented that it would contravene the federal act to allow one to circumvent arbitration as Cazort proposes to do. See Avila Group, Inc. v. Norma J. of California, 426 F. Supp. 537, 540 (S.D.N.Y. 1977) (opining that “[t]o allow [defendant] to claim the benefit of the contract and simultaneously avoid its burdens would . . . contravene the purposes of the Arbitration Act”) and Sam Reisfield & Son Import Co. v. Eteco, 530 F.2d 679, 681 (5th Cir. 1976) (holding that allowing circumvention would effectively thwart the federal policy in favor of arbitration).

Thus, there is a strong public policy for compelling these claims to be together submitted to arbitration.

Cazort contends that we should not compel arbitration because statutory bonds are to be construed as if the terms of the statute were written into them, and section 23-42-305 (a)(4) of the Arkansas Code Annotated of 1987 provides a direct cause of action on an indemnitor’s bond. The securities act, of which the cited statute is a part, was written in contemplation of our established law with the indemnitor and its principal on the one side and the securities purchaser on the other, and it was written in contemplation of the indemnitor’s liability being contingent on the liability of the principal to the securities purchaser. The statute does not give an investor a right of direct action against the indemnitor without regard to the principal’s liability. An indemnitor is entitled to the rights and defenses available to the principal. Troxler v. Wilson, 133 Ark. 216, 219, 202 S.W. 819 (1918). For example, if a securities purchaser were to let the statute of limitations run so that he could no longer maintain a suit against a securities dealer, he could likewise no longer maintain a suit against the securities dealer’s indemnitor. Similarly, in this case one of the principal’s rights is the right to compel arbitration, and this right inures to the benefit of the indemnitor. The statute does not give a right of direct action against an indemnitor without a determination of the amount of the principal’s liability.

Reversed and remanded for proceedings consistent with this opinion.

Corbin, J., not participating.


author: Robert H. Dudley, Justice. Steele Hays, Justice,

text:
    Henry DUPREE v. STATE of Arkansas
    CR 92-1364
    871 S.W.2d 570
    Supreme Court of Arkansas
    Opinion delivered March 14, 1994

      Robert P. Remet, for appellant.

      Winston Bryant, Att’y Gen., by: Brad Newman, Asst. Att’y Gen., for appellee.
   .

Robert H. Dudley, Justice.

This is a speedy trial case. Appellant was charged with delivery of cocaine, a felony, on March 4, 1991. The trial court had a duty to bring appellant to trial in twelve months unless there were delays that constituted excludable periods of time. A.R.Cr.R Rule 28.1(b). The trial court set appellant’s trial for March 3, 1992. On that day, March 3, 1992, appellant was granted a continuance to April 7, 1992. This continuance constituted an excludable period of thirty-five days. No action was taken on April 7, the date set for trial. On April 10, the case was continued on appellant’s motion until May 21, 1992. This continuance constituted an excludable period of forty-one days. The two continuance periods together amounted to seventy-six days of excludable time. On May 21, or one year and two days after he was charged, appellant moved to dismiss the case for lack of speedy trial. The trial court denied the motion. Appellant was tried and convicted. We reverse and dismiss.

Appellant was not tried within the time specified by the speedy trial rules. Upon motion by the Attorney General, this court remanded the case to the trial court to settle the record about what occurred to prevent the scheduled trial from taking place on April 7, 1992. The reason for the delay from April 7 to April 10 is critical. However, rather than settling the record upon the remand, the trial court dismissed the remand. Since the record reflects that appellant was not tried within the allowable time, and the trial court refused to settle the record, the Attorney General was left with no choice other than to confess error and recognize that appellant’s conviction must be reversed and dismissed. The confession of error is well taken.

Reversed and dismissed.

Corbin, J., not participating.

Hays, J., dissents.

Steele Hays, Justice,

dissenting. The appellant, having four felony convictions, was tried on May 21, 1992, for violation of Ark. Code Ann. § 5-64-401 (1987), delivery of cocaine, a Class Y felony. A jury of his peers in Arkansas County convicted appellant and sentenced him to forty years in the Department of Correction. The majority reverses the conviction and dismisses the information on nothing more than a scrivener’s error. I respectfully dissent.

This case is a classic example of a rule bound approach to the law. The appellant could have had a speedy trial. His case was set for trial within the time allowed under Ark. R. Crim. P. 28. However, that was not his wish. So he asked for, and was given, a continuance of thirty-five days. His trial was rescheduled for April 7. But again, a trial was not the goal, so again he asked for, and was given, a continuance, this time for forty-one days.

Now, notwithstanding the fact that appellant had averted two speedy trials by continuances totalling seventy-six days, the majority dismisses because it charges a two day delay to the state, attributable to a gap between the April 7 trial date and the April 10 order rescheduling the trial to May 21 at the request of the appellant.

Ironically, this court has frequently defended a rigid application of the speedy trial rule by noting that its purpose in part, “perhaps above all,” is to serve the interests of the public in obtaining a speedy trial. See, e.g., Weaver v. State, 313 Ark. 55, 852 S.W.2d 130 (1993), and Chandler v. State, 284 Ark. 560, 683 S.W.2d 928 (1985). If that is so, the appellant is the only winner and the public interest is twice thwarted: first, it is denied a speedy trial because the appellant successfully outmaneuvered two trials with back-to-back continuances and, second, it is denied the sober satisfaction of seeing criminal activity punished, all because of a docket error of minuscule proportions.

Arkansas is the only state to apply this simplistic, mechanical approach to the intricacies of case management for purposes of speedy trials. The other states and the District of Columbia uniformly adopt the four criteria approved in Barker v. Wingo, 407 U.S. 514 (1972): the length of delay, the reasons for the delay, whether the defendant asserted the right to a speedy trial and whether the defendant was prejudiced by the delay. See 78 Georgetown Law Journal 853, 984-988 (1990). If those criteria, or any one of them, were used in this instance, a different result, eminently more sensible, would clearly prevail.


author: David Newbern,' Justice.

text:
    Sandra MASTIN v. Harold MASTIN
    93-1088
    871 S.W.2d 585
    Supreme Court of Arkansas
    Opinion delivered March 14, 1994
    Central Arkansas Legal Services by: Griffin J. Stockley and Lynn Pence, for appellant.
    No response.
   David Newbern,' Justice.

This appeal was brought as the result of an ex parte order transferring custody of Sandra Mastin’s daughter to Harold Mastín, who is Ms. Mastin’s ex-husband and the child’s father. Ms. Mastín sought a declaratory judgment that ex parte orders transferring custody violate the custodial parent’s due process rights. Ms. Mastín failed to present a justiciable controversy, and the case is moot. We dismiss the appeal.

Harold and Sandra Mastín were divorced in 1986. Custody of the Mastins’ daughter was awarded to Ms. Mastín. Mr. Mastín was awarded the right of visitation and ordered to pay child support. In June of 1993 while the child was in Pulaski County for her summer visit with her father, Ms. Mastin was arrested and incarcerated. On June 16, 1993, Mr. Mastin filed a motion for emergency modification of custody.

The motion alleged that Ms. Mastin was incarcerated and subject to criminal charges pending in four counties. The order requested that custody temporarily be modified until Ms. Mastin was released and able to appear at a hearing addressing a permanent change in custody. On June 29, 1993, the Chancellor entered an ex parte order granting Mr. Mastin’s request for temporary custody pending a hearing on July 6, 1993.

On June 30, 1993, Ms. Mastin’s attorney moved to set aside the ex parte order. This motion further sought a declaratory judgment that ex parte orders in matters of child custody violate the custodial parent’s due process rights by failure to require a hearing within seventy-two hours of the order, and failure to notify the parent of the right to present evidence, cross examine witnesses, and appear with counsel.

The Chancellor moved the hearing up from July 6 to July 2, 1993. Both parties appeared with counsel. Ms. Mastin testified she was no longer incarcerated and was capable of properly caring for her daughter. Mr. Mastin testified the child was in the middle of her six-week summer visitation with him. The Chancellor dissolved the ex parte order and restored Ms. Mastin’s custody. He ordered that the child stay with Mr. Mastin until a July 23, 1993 hearing on the issue of permanent custody.

On July 23, 1993, a consent order was entered in which Ms. Mastin retained custody of her daughter. The Chancellor filed an additional order on August 3, 1993, denying Ms. Mastin’s request for declaratory relief. The order noted that no specific statutory authority exists for ex parte orders changing custody but that chancery courts have broad inherent equitable powers as well as a duty to exercise these powers in emergency situations to protect the best interests of a child.

1. Mootness

Ms. Mastin concedes the case is moot. She received the hearing she requested, and custody of her daughter was restored to her. She contends, however, that ex parte orders in custody disputes are capable of repetition, yet may evade review, and are a matter of public interest. She requests that we address the issue in her appeal despite the fact it is moot.

Mootness may not determine whether we review a case which involves the public interest, or tends to become moot before litigation can run its course, or in which a decision might avert future litigation. Campbell v. State, 300 Ark. 570, 781 S.W.2d 14 (1989). Most cases become moot due to events which transpire in the course of litigation. See, e.g., Arkansas Intercollegiate Conference v. Parnham, 309 Ark. 170, 828 S.W.2d 828 (1992). In such cases, the rationale of the Campbell case may apply, given the circumstances recited in the Campbell case. When, however, mootness is the result of the complaining litigant receiving from the Trial Court the relief requested, we are not inclined to review the matter. Bynum v. Savage, 312 Ark. 137, 847 S.W.2d 705 (1993).

In the Bynum case, Ms. Bynum asked that Arkansas’s temporary guardianship law be declared unconstitutional. We noted that not only had she failed to obtain a ruling on her request for a declaratory judgment, she succeeded in having set aside an order of temporary guardianship thus retaining custody of her child.

The only difference between this case and the Bynum case is that Ms. Mastin obtained a ruling on her request for a declaratory judgment. That might have been a significant distinction if we were faced with any sort of justiciable controversy.

2. Justiciable controversy

Ms. Mastin’s motion requested a declaratory judgment that due process requires a hearing within seventy-two hours of an ex parte order changing custody. That is precisely what Ms. Mastin received. The ex parte order was entered on June 29, 1993, and a hearing was held three days later, on July 2, 1993. At the hearing, Ms. Mastin appeared with counsel, presented evidence, and cross-examined Mr. Mastin’s witnesses.

The Chancellor noted he has broad power to enter an order in emergency situations to protect the best interests of a child. While he did not cite them, emergency is referred to in both the Uniform Child Custody Jurisdiction Act, specifically Ark. Code Ann. §§ 9-13-203(a)(3)(Repl. 1993); and the Parental Kidnapping Prevention Act. See 28 U.S.C. §§ 1738(A)(c)(2)(C)(ii). The Chancellor expedited the hearing and held it within seventy-two hours as Ms. Mastín requested.

While Ark. Code Ann. § 16-111-104 (1987) recognizes a party’s right to a declaratory judgment, a justiciable controversy is required. See Arkansas Intercollegiate Conference v. Parnham, supra. There is no controversy whatever in this case. No brief has been filed in response to the one filed by Ms. Mastín. A review of the issue presented in this appeal would result in a purely advisory opinion, and we are especially disinclined to produce such an opinion in a one-brief case where the matter has not been fully argued or even contested.

Appeal dismissed.

Corbin, J., not participating.


author: David Newbern, Justice.

text:
    Bernard WHETSTONE v. William M. CHADDUCK, M.D.
    93-1094
    871 S.W.2d 583
    Supreme Court of Arkansas
    Opinion delivered March 14, 1994

      Bernard Whetstone, for appellant.

      Hilburn, Calhoon, Harper, Pruniski & Calhoon, Ltd., for appellee.
   David Newbern, Justice.

Bernard Whetstone appeals from two orders of the Trial Court. The first order granted Dr. William Chadduck’s motion for a voluntary nonsuit which resulted in the dismissal of his claim against Mr. Whetstone without prejudice. Mr. Whetstone’s contention that the dismissal should have been with prejudice is without merit due to the plaintiff’s absolute right to a voluntary nonsuit without prejudice pursuant to the express terms of Ark. R. Civ. P. 41(a). The Trial Court’s second order imposed sanctions on Dr. Chadduck pursuant to Ark. R. Civ. P. 11. Mr. Whetstone appeals on the ground that the monetary sanction against Dr. Chadduck was inadequate. We remand this issue because we conclude the Trial Court should not have considered Dr. Chad-duck’s pro se status in determining the amount of the sanction.

Dr. Chadduck initially became involved in this litigation after he was made a defendant in a malpractice lawsuit brought, in part, by Mr. Whetstone on behalf of a client. This fact was reported in the Arkansas Times newspaper. Dr. Chadduck filed a complaint seeking damages for defamation against several individuals, including Mr. Whetstone. At the hearing on Mr. Whetstone’s motion to dismiss, Dr. Chadduck moved to nonsuit his complaint pursuant to Rule 41(a). The Trial Court granted the motion and dismissed Dr. Chadduck’s complaint without prejudice.

The Trial Court retained for consideration Mr. Whetstone’s motion for Rule 11 sanctions. After argument from both sides, Dr. Chadduck was ordered to pay Mr. Whetstone and the other two defendants $1,000.

1. Dismissal without prejudice

The relevant portion of Rule 41(a) states 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.” The rule clearly allows a plaintiff to nonsuit a claim, and this Court has consistently upheld that provision. We have considered it as creating an absolute right to such a nonsuit. See, e.g., Jenkins v. Goldsby, 307 Ark. 558, 822 S.W.2d 843 (1992). The dismissal without prejudice was not in error.

2. Sanctions

Rule 11 states, in part, that “[i]f a pleading, motion or other paper is signed in violation of this rule, the court.. . shall impose upon the person who signed it... an appropriate sanction, which may include an order to pay ... the amount of the reasonable expenses incurred.”

The Trial Court has discretion in determining whether a violation occurred. See Bratton v. Gunn, 300 Ark. 140, 777 S.W.2d 219 (1989). Only if this discretion is abused will we reverse. Ward v. Dapper Dan Cleaners and Laundry, Inc., 309 Ark. 192, 828 S.W.2d 833 (1992).

If Rule 11 is violated the Trial Court “shall impose upon the person ... a represented party, or both, an appropriate sanction.” Obviously the rule contemplates some discretion on the part of the Trial Court in determining what the sanction shall be, but neither the language of the rule nor our prior holdings supports the proposition that a pro se litigant shall be subject to a lesser sanction.

Our decisions interpreting the rule are sparse. The only case cited by the Trial Court on the point of sanctions against a pro se litigant is Thomas v. Evans, 880 F.2d 1235 (11th Cir. 1989), a case in which the question was whether such a litigant should be found in violation of the rule rather than the nature of the sanction to be imposed once a violation had been shown. We know of no precedent which allows a trial court to consider the fact that a party is proceeding pro se when determining the degree of the sanction.

Before the Trial Court was evidence that the amount of the fee and expenses to be paid by Mr. Whetstone to his attorney for defending Dr. Chadduck’s claim was at least $3,733.89. Rule 11 provides that the Trial Court may award “the amount of the reasonable expenses incurred ... including a reasonable attorney’s fee.” While the Trial Court’s otherwise thorough order mentioned his awareness of the defendants’ expenses in defending Dr. Chadduck’s action against them, no explanation is provided as to why the consideration of those expenses should in any way be lessened because Dr. Chadduck was proceeding pro se. In these circumstances we deem it appropriate to remand the case to the Trial Court for reconsideration of the sanction imposed with respect to Mr. Whetstone’s motion for relief pursuant to Rule 11.

Reversed and Remanded.

Corbin, J., not participating.


author: Tom Glaze, Justice.

text:
    Joe NEWTON & Randal Newton v. Danny CHAMBLISS
    93-1054
    871 S.W.2d 587
    Supreme Court of Arkansas
    Opinion delivered March 14, 1994

      Crumpler, O’Connor & Wynne, by: Williams J. Wynne, for appellants.

      Odell C. Carter, for appellee.
   Tom Glaze, Justice.

The appellant Joe Newton purchased a used 1986 Nissan 200SX for his son, co-appellant Randal Newton, and Randal had a custom sound system installed in the vehicle. After the vehicle developed transmission problems, it was taken to appellee Danny Chambliss who was in the business of performing such repairs. After the initial repair, subsequent problems arose which were still under warranty, and the vehicle was returned to Chambliss. While the vehicle was in the possession of Chambliss for the third repair, the vehicle was broken into, vandalized, and components of the sound system were stolen. The vehicle was in Chambliss’s custody from November 3 or 10 until repairs were performed on January 4. The break-in occurred either on December 26 or 27. The Newtons filed suit against Chambliss, as a bailee for hire, alleging Chambliss was negligent and requesting he pay damages that resulted to the Newtons’ vehicle.

At trial, the undisputed testimony showed that Chambliss’s auto repair shop is located about four and three-fourths miles from Star City, Arkansas, and is a one-stall garage positioned between Chambliss’s motor home and his mother’s house. Chambliss testified that the garage was approximately 50 yards from both his motor home and his mother’s house, and that there are two night watcher lights — one on the front of the shop and one on a pole near his mother’s house. In addition, Chambliss has three yard dogs. Chambliss testified that the Newtons’ vehicle was broken into either during the night of December 26 or the early morning of December 27, it was raining during this time, he did not hear anyone break into the vehicle, and the dogs did not bark. The jury returned a defendant’s verdict in favor of Chambliss.

On appeal, the Newtons raise four points, three of which challenge certain jury instructions and one questions the trial court’s rejection of a proffered instruction. However, we are unable to reach the merits of their appeal because the abstract of record is deficient.

The record as abstracted contains three instructions and one proffered instruction, but it fails to reflect the Newtons’ objections to the instructions, much less the reasons for these objections. Nor does the abstract show any objection to the Newtons’ preferred instruction or reason for its exclusion.

No party may assign as error the giving or failure to give an instruction unless he objects thereto before or at the time the instruction is given, stating distinctly the matter to which he objects and the grounds of his objection. ARCP Rule 51. In addition, Sup. Ct. R. 4-2(a)(6) requires an abstract to contain those material parts of the record which are necessary for an understanding of the questions put before this court. Here, no objections to the instructions in issue have been abstracted and, therefore, we are unable to reach the issues raised in this appeal. This court has stated numerous times that it will not go to the single record to determine whether reversible error has occurred. First Nat’l Bank of Brinkley v. Frey, 282 Ark. 339, 668 S.W.2d 533 (1984).

Finally, the abstract is bereft of any rulings made by the court on any objections to the instructions given or the one proffered. This alone is fatal to the Newtons’ appeal since failure to obtain a ruling on an issue below results in waiver of that issue on appeal. Morgan v. Neuse, 314 Ark. 4, 857 S.W.2d 826 (1993). Therefore, we affirm.

Corbin, J., not participating.


author: Robert L. Brown, Justice.

text:
    Juliet B. BROWN and Larry Brown, Husband and Wife v. SEECO, INC. an Arkansas Corporation
    93-890
    871 S.W.2d 580
    Supreme Court of Arkansas
    Opinion delivered March 14, 1994
    [Rehearing denied April 18, 1994.]

      Sexton Law Firm, P.A., by: Sam Sexton, Jr., for appellants.

      Everett, Mars & Stills, by: Thomas A. Mars, for appellee.
   Robert L. Brown, Justice.

This case involves an oil and gas lease entered into in 1961 between Julius and Mary Flegel, the parents of appellant Juliet Brown, and Arkansas Western Gas Company, the parent company of appellee SEECO, Inc. The lease covered the NE 1/4 SE 1/4 and SE 1/4 NE 1/4 of Section 2, Township 9 North, Range 26 West in Franklin County and was for a primary term of two years and “as long thereafter as oil liquid hydrocarbons, gas or their respective constituent products, or any of them is produced from said land.”

Arkansas Western Gas drilled and completed a well in Section 2 in 1961 on lands owned by Elizabeth Post and designated the well as #1 Elizabeth Post (Post well). The Oil and Gas Commission designated all of Section 2 as a single drilling and production unit.

The leased property was subsequently conveyed to Juliet B. Brown, the daughter of the Flegels, who later conveyed an interest in the property to her husband, Larry Brown. Arkansas Western Gas then assigned its lease to appellee SEECO, its sister company. SEECO agreed to sell any gas it produced to Arkansas Western Gas.

In October of 1985, SEECO began attempts to purchase the mineral interests underlying the leased property from Juliet Brown. SEECO also made an offer to purchase the Browns’ royalty interest. The Browns refused.

On December 18, 1990, the Browns sued SEECO to cancel the SEECO lease agreement for failure to produce natural gas in allowable or paying quantities, for failure to commence further development, and for underpaying royalties. They prayed for damages and costs. On June 11, 1993, SEECO filed a Petition for Preliminary Injunction stating that the Browns had denied the company access to the land to allow it to drill a second well and praying that they be enjoined from interfering. SEECO alleged that the Browns would not be harmed by drilling a second well but that SEECO’s inability to drill disrupted its program and adversely affected its royalty owners in the unit. On June 30, 1993, the Browns moved for summary judgment on their complaint. A hearing was then held before the chancellor on the petition for preliminary injunction and the motion for summary judgment.

The Chancellor issued his letter opinion on July 19, 1993, denied the motion for summary judgment, and granted the preliminary injunction. With respect to the preliminary injunction, the chancellor wrote: “As for the Petition for Preliminary Injunction, I find that it should be granted and that a bond of twenty thousand dollars ($20,000) should be posted prior to the defendant entering upon the property of the plaintiffs.”

On July 28, 1993, the Chancellor filed an order granting the preliminary injunction. In the order, the chancellor stated:

Both parties offered testimony at the hearing and made arguments in support of and in opposition to the petition for preliminary injunction. Upon the basis of the testimony introduced at the hearing, the briefs submitted by counsel, and the arguments of counsel made at the hearing, the Court concludes that the petition for preliminary injunction should be, and hereby is, granted conditioned upon SEECO, Inc. posting a bond with the Clerk of the Court in the amount of $20,000.

The Browns’ counsel approved the order of injunction as to form. On August 11, 1993, the Browns filed in this court a motion to stay or dissolve the temporary injunction pending appeal. They contended in this motion, as they now do on appeal, that the injunction was defective due to no finding of irrevocable harm and noncompliance with Ark. R. Civ. R 65(e). We denied the motion without prejudice to raise the same issues on appeal.

The Browns first contend that there was no showing of irreparable harm or lack of an adequate remedy at law. Embraced in this argument is an alleged failure by SEECO to establish a likelihood of success on the merits. They point out, in addition, that the chancellor made no finding on these points. The record, however, does not reflect that the Browns requested additional findings of fact pursuant to Ark. R. Civ. R 52(b), after the temporary injunction was granted.

We review chancery matters, including the grant of an injunction, de novo on appeal. Southeast Ark. Landfill, Inc. v. State, 313 Ark. 669, 858 S.W.2d 665 (1993); Knowles v. Anderson, 307 Ark. 393, 821 S.W.2d 466 (1991). The grant of an injunction rests within the sound discretion of the chancellor. Southeast Ark. Landfill, Inc. v. State, supra; American Trucking Ass’n v. Gray, 280 Ark. 258, 657 S.W.2d 207 (1983). Where the record supports a finding of irreparable harm or likelihood of success on the merits, we have been unable to say that the chancery court abused its discretion. See, e.g., W.E. Long Co. v. Holsum Baking Co., 307 Ark. 345, 820 S.W.2d 440 (1991).

We begin by examining the evidence presented by SEECO in support of its claim of irreparable harm. In its petition for preliminary injunction, SEECO asserted that it would suffer harm if it was not allowed to drill the well because its developmental drilling program would be disrupted in Section 2. Bill Winkelmann, the Senior Exploration Geologist for Southwestern Energy, SEECO’s parent company, testified that the development project had been “in full swing” for at least two years following a geological study spanning several years. He also stated that the company had planned to drill in the area of the Post well for “probably two years.” Winkelmann stated that he believed that a new well would relieve the drainage caused by off-setting wells in adjoining units drilled by other companies; specifically, a Mueller well in Section 1 drilled in 1992. He stated that drilling an additional well on the Browns’ property would minimize the drainage loss and that the well could be drilled within two weeks, were an injunction to be granted. Without a second well, he testified that SEECO and the unit royalty owners in Section 2 would continue to be harmed.

Harm normally is only considered irreparable when it cannot be adequately compensated by money damages or redressed in a court of law. Compute-A-Call, Inc. v. Tolleson and Jones, 285 Ark. 355, 687 S.W.2d 129 (1985); Kreutzer v. Clark, 271 Ark. 243, 607 S.W.2d 670 (1980). We are not prepared to say, based on what is before us, that the loss occasioned by the disruption of SEECO’s development program and its detrimental impact on royalty owners could be recouped by an award of damages. Moreover, we are not persuaded that the Browns are likely to prevail on the merits. Certainly there is enough in the record to support these conclusions. Accordingly, the chancellor did not abuse his discretion in issuing the order of injunction.

We turn next to the form of the injunction order and the Browns’ argument that it failed to conform with the requirements of Ark. R. Civ. P. 65(e). Prior to the submission of this appeal, the Browns filed before this court a motion to stay or dissolve the temporary injunction in which they asserted that the order of injunction, on its face, violated the requirements of Rule 65(e). This court denied the motion without prejudice to raise it for consideration as part of their appeal. In their brief, the Browns raise the identical argument challenging the form and substance of the order as deficient under Rule 65(e).

Though the order of injunction does appear to be deficient on its face under Rule 65(e) due to vagueness, the Browns failed to raise this issue to the chancellor. Indeed, counsel for the Browns approved the order of injunction as to form. Ordinarily, such an approval would have no bearing on an appeal concerning the substance of the order. Spencer v. Spencer, 275 Ark. 112, 627 S.W.2d 550 (1982). But that approval is distinctly at odds with the Browns’ contention that the order is defective in its form due to lack of specificity. In any case, we refuse to consider this issue because we have made it clear that in order to preserve an issue for appeal, the issue must be presented to the trial court for resolution. See, e.g., Stewart Title Guaranty Co. v. Treat, 306 Ark. 289, 810 S.W.2d 953 (1991); Crowder v. Crowder, 303 Ark. 562, 798 S.W.2d 425 (1990). That was never done in this case.

We are aware that in its Statement of the Case SEECO states that it has already drilled a second well on the Browns’ property. If in fact this has occurred and the order of injunction only applies to that well recently drilled, then the issue is moot. We do not consider moot issues on appeal with certain limited exceptions. Enviroclean, Inc. v. Arkansas Pollution Control, 314 Ark. 98, 858 S.W.2d 116 (1993). Because the issue of mootness is unclear and not a matter evidenced in the record or argued by counsel, we have proceeded to address the merits of this appeal.

The order of the chancellor is affirmed.


text:
    Carthel FULLER, Sr. v. STATE of Arkansas
    CR 93-166
    872 S.W.2d 54
    Supreme Court of Arkansas
    Opinion delivered March 14, 1994
    [Rehearing denied April 18, 1994.]

      Hubert W. Alexander, for appellant.

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

      Corbin, L, not participating.

   Robert L. Brown, Justice.

Appellant Carthel Fuller, Sr., appeals his conviction for second-degree assault arising out of a confrontation with Charles Davidson in Kensett. On the morning of July 9, 1991, Fuller pulled out of a lumber yard in his truck and almost ran into the vehicle of Charles Davidson, who was traveling with a passenger, Marlene Holt. Davidson and Holt continued on towards Kensett, on Highway 36, at which time Fuller came up behind them in his truck and forced them off the road, according to their testimony. Davidson and Holt waited a few moments and then drove into Kensett. As they passed Fuller’s truck, they alleged that they saw him standing by the tailgate and pointing a pistol at them. They immediately went to find the Kensett Chief of Police, Ralph Jordan. They located Jordan in town and related what had happened, whereupon Fuller drove up, got out of his truck, walked over to the police car, and began beating on the top of it, cursing Davidson and saying that Davidson was going to die and that he was going to shoot him.

Fuller was charged with first degree assault and terroristic threatening in the second degree, both misdemeanors, in Searcy Municipal Court. He was found guilty of assault in the first degree, sentenced to six months in jail with five months suspended, and fined $1,000 with $600 suspended. He was found not guilty of terroristic threatening.

Fuller appealed his judgment of conviction for first degree assault to circuit court. The matter was tried de novo, after which the circuit judge concluded that Fuller was guilty of second degree assault. He sentenced Fuller to seven days in jail, all of which was suspended, and a fine of $500. He specifically stated in his letter opinion dated August 4, 1992, that he was foreclosed under the Double Jeopardy Clauses of the U.S. and State Constitutions from retrying Fuller for terroristic threatening, regardless of any evidence which might be presented to support that charge, because the municipal court had found him innocent of that charge.

On August 7, 1992, the circuit judge’s judgment was entered. On August 27, 1992, Fuller filed a motion for reconsideration, praying that the circuit judge reconsider his decision and find him not guilty. His stated reason for the motion was that he had been convicted of assault in municipal court for pointing the gun but was found innocent of making threats. In circuit court, he contended, the judge used his threats against Davidson to find him guilty of second degree assault, placing him in double jeopardy because he had been acquitted of that charge.

On September 2, 1992, Fuller filed a notice of appeal. The circuit judge denied his motion for reconsideration on September 15, 1992. No subsequent notice of appeal was filed.

We are first confronted with the issue of jurisdiction. The State points out that this court may be without jurisdiction over this case because of Ark. R. App. P. 4(c). Fuller filed the notice of appeal before 30 days had passed from the date of his motion. If Rule 4(c) applies, the premature filing would render the notice of appeal void and divest this court of any jurisdiction over the case. Rule 4(c), by its terms, is applicable to specific civil motions including a motion for judgment notwithstanding the verdict under Ark. R. Civ. R 50(b), a motion to amend findings of fact or to make additional findings of fact under Ark. R. Civ. R 52(b), and a motion for a new trial under Ark. R. Civ. R 59(b). We have applied Rule 4(c) to criminal matters, however, where the motion made following the judgment of conviction was analogous to a civil motion made under Rule 50(b), Rule 52(b), or Rule 59(b). See Enos v. State, 313 Ark. 683, 858 S.W.2d 72 (1993); Taylor v. State, 296 Ark. 541, 757 S.W.2d 959 (1988); Terrell v. State, 294 Ark. 583, 745 S.W.2d 135 (1988).

We conclude that Fuller’s post-judgment motion is not analogous to a motion under Rule 50(b), Rule 52(b), or Rule 59(b). We have said that we will look to see what a motion actually is in. determining Rule 4 questions such as the one before us. See Jackson v. Arkansas Power & Light Co., 309 Ark. 572, 832 S.W.2d 224 (1992) (per curiam). It is clear, however, that Fuller’s motion is not a request for amended or additional findings or for a new trial. Nor does it qualify as a request for a judgment NOV, which contemplates a jury verdict. Moreover, all three motions under Rules 50(b), 52(b), and 59(b) must be filed within ten days of entry of judgment. Fuller’s motion was filed 20 days after the judgment was entered. Accordingly, the motion is not controlled by Rule 4, and the fact that Fuller’s notice of appeal was filed when it was does not divest this court of jurisdiction. See Enos v. State, supra.

We turn then to the sole issue raised by Fuller in this appeal, which is the Double Jeopardy argument. Fuller, however, did not argue this point before the circuit judge at trial. He did raise it by motion for reconsideration, but we hold that this was not timely.

An issue must be presented to the trial court at the earliest opportunity in order to preserve it for appeal. Chism v. State, 312 Ark. 559, 853 S.W.2d 255 (1993); Henry v. Eberhard, 309 Ark. 336, 832 S.W.2d 467 (1992); Lewis v. State, 307 Ark. 260, 819 S.W.2d 689 (1991). Even a constitutional issue must be raised at trial in order to preserve the issue for appeal. Smith v. City of Little Rock, 305 Ark. 168, 806 S.W.2d 371 (1991); Kittler v. State, 304 Ark. 344, 802 S.W.2d 925 (1991).

The Double Jeopardy argument was not raised by Fuller until 20 days after judgment was entered. A defendant may not wait until the outcome of a case to bring an error to the trial court’s attention. Chism v. State, supra. Furthermore, if Fuller was not aware that the circuit judge was going to decide the case the way he did until judgment, he could have filed a motion analogous to one of the Ark. R. App. P. 4(b) motions within ten days of judgment and followed the procedure outlined under Ark. R. App. P. 4(c). This he failed to do. Or, he could have obtained a ruling on his motion for reconsideration prior to filing his notice of appeal within 30 days of judgment. He also failed to do this. The Double Jeopardy issue is simply not preserved for our review.

Affirmed.

Hays, J., concurs.

Corbin, J., not participating.


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

text:
    STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY v. Steve THOMAS and Carol Thomas, as Parents and Natural Guardians of Lindsay Thomas
    93-994
    871 S.W.2d 571
    Supreme Court of Arkansas
    Opinion delivered March 14, 1994

      Boswell, Tucker & Brewster, by: Clark S. Brewster, for appellant.

      Lovell & Nalley, by: John Doyle Nalley, for appellees.
   Robert L. Brown, Justice.

This is the second appeal taken in this case. See State Farm Mut. Auto. Ins. Co. v. Thomas, 312 Ark. 429, 850 S.W.2d 4 (1993). We dismissed the first appeal for failure to comply with Ark. R. Civ. P. 54(b). Appellant State Farm Mutual Automobile Insurance Company appeals once more and raises the issue of whether the trial court erred in applying the penalty statute (Ark. Code Ann. § 23-79-208 (Supp. 1991) for failure to pay underinsurance benefits upon demand in this case. We conclude that the trial court did err in assessing statutory penalties and attorney’s fees, and we reverse and remand.

Steve and Carol Thomas, husband and wife, and their two daughters, Jennifer and Lindsay, were involved in a three-car accident with John Laughlin, deceased, and David Spears on March 29, 1991. Laughlin had carried liability coverage of $100,000 per person with Farmer’s Insurance Company. Spears had liability coverage of $25,000 per person with Farm Bureau Insurance Company.

On April 9, 1991, the Thomases filed suit against Laughlin and Spears. On November 1, 1991, the Thomases made demand on State Farm, their carrier, to pay underinsured benefits and sent the carrier a description of partial medical expenses incurred by Lindsay Thomas. According to the demand, Lindsay Thomas, who was five years old at the time of the accident, had sustained' head injuries, including skull fractures, and a broken leg. The payment of underinsured benefits was not forthcoming by State Farm. On February 3, 1992, the Thomases filed a second amended complaint naming State Farm as a party defendant and praying for the $25,000 in benefits, for attorney’s fees, and for a 12 percent penalty for failure to pay benefits on demand. In the complaint the Thomases alleged that Lindsay Thomas’s damages exceeded all liability coverage and that payment under the under-insured coverage was warranted.

On June 10, 1992, the day before trial, Farmer’s Insurance Company paid the policy limits — $100,000 — to the Thomases on behalf of its insured, John Laughlin, deceased. Within an hour on that same day, State Farm tendered the $25,000 in underinsured benefits to the Thomases. Though this is somewhat unclear in the record, it appears that no payment of liability benefits had been made at that time by Farm Bureau Insurance Company, the liability carrier for David Spears.

On July 8, 1992, the trial court entered judgment against State Farm in the amount of $5,000 in attorney’s fees and a 12 percent penalty to be applied against the $25,000 paid. All other parties to this action have now been dismissed.

We begin by observing once again that our statute, Ark. Code Ann. § 23-79-208, being penal in nature, is strictly construed. Shepherd v. State Auto Prop. & Cas. Ins. Co., 312 Ark. 502, 850 S.W.2d 324 (1993); Miller’s Mutual Ins. Co. v. Keith Smith Co., 284 Ark. 124, 680 S.W.2d 102 (1984). The penalty nature of the statute is directed against unwarranted delaying tactics of insurers. Simmons First National Bank v. Liberty Mutual Ins. Co., 282 Ark. 194, 667 S.W.2d 648 (1984).

State Farm contends that the language of its policy with the Thomases controls:

THERE IS NO COVERAGE UNTIL THE LIMITS OF LIABILITY OF ALL BODILY INJURY LIABILITY INSURANCE POLICIES OR BONDS THAT APPLY TO THE INSURED’S BODILY INJURY HAVE BEEN USED UP BY PAYMENT OF JUDGMENT OR SETTLEMENTS.

This language is highlighted in the policy in capital letters. We agree with State Farm’s position.

Clearly, all liability benefits had not been “used up by payment of judgment or settlements” prior to June 10, 1992;. State Farm paid immediately after one liability carrier — Farmer’s Insurance Company — paid its policy limits. Indeed, State Farm paid its maximum benefit even before it knew what the liability carrier for the other alleged tortfeasor, Farm Bureau Insurance Company, would pay. If anything, State Farm paid before all liability benefits had been amassed. Because the penalty statute, § 23-79-208, only requires payment “within the time specified in the policy,’’.State Farm’s payment of benefits was timely.

The fact that the bold exclusion in State Farm’s policy is not repeated a second time in the policy under the general heading for other exclusions is not fatal and does not create an ambiguity, as the Thomases contend. The exclusion appears on the front page of the policy endorsement providing underinsured coverage and is clear and precise in its meaning.

Nor do we read a public policy into either our common law or the underinsured motorist statute (Ark. Code Ann. § 23-89-209 (Supp. 1991)) which militates against this decision. It is practical and pure common sense that underinsurance should not pertain until it is determined whether the insured is in fact underinsured. That means, under the policy language in this case, waiting until all liability benefits have been made available in order to trigger payment of this supplemental coverage.

The Thomases urge that the injuries to Lindsay clearly showed that underinsured coverage would come into play and that State Farm should have evaluated her claim in that light and made payment. The Thomases add that this is precisely what State Farm did with regard to its payment of underinsured benefits to Steve Thomas before all liability benefits had been paid on his behalf. We do not agree that the underinsured motorist coverage statute, § 23-89-209, places this obligation on the carrier.

The underinsured motorist statute contemplates payment by the tortfeasor’s insurance company. It also contemplates a determination of the injured party’s damages. There is no directive under the statute that the underinsured carrier must investigate and evaluate a claim prior to the payment of liability coverage by the tortfeasor’s insurance company. Also, in this case the State Farm policy is clear and precise in stating that there is no under-insured coverage until liability insurance is “used up.” Of course, should the liability carriers be dilatory in their payments or operate in bad faith, the insured party has remedies.

The order of the trial court assessing a penalty and attorney’s fees under § 23-79-208 against State Farm is reversed, and this cause is remanded for an appropriate order to be entered.

Reversed and remanded.

Newbern, J., dissents.

Corbin, J., not participating.

David Newbern, Justice,

dissenting. State Farm Mutual Insurance Company, (State Farm), appeals from a judgment which awarded Lindsay Thomas, the insured, attorneys’ fees and a 12% penalty pursuant to Ark. Code Ann. § 23-79-208(a)(Repl. 1992) for failure to pay Ms. Thomas’s claim under a provision for under-insured motorist coverage within a reasonable time. State Farm argues the penalty and fees should not have been awarded as State Farm paid on the underinsured motorist policy immediately after a primary liability insurer tendered its limit to Ms. Thomas in settlement of her claim against one of two motorists allegedly responsible for her injuries. I would affirm the Trial Court’s decision.

Ms. Thomas was injured in an automobile accident on March 29, 1991. In effect at the time of the accident was an underinsured motor vehicle policy issued by State Farm. Ms. Thomas made demand for payment of the benefits due under the policy on November 1, 1991, having determined that her medical expenses would exceed primary liability coverage of the persons she alleged to be at fault.

State Farm did not pay, and suit was filed against State Farm on February 3, 1992. State Farm participated in the discovery process, apparently contesting the claim that Ms. Thomas’s injuries would require compensation in excess of amounts payable by other insurers which had written primary liability coverage for John Laughlin and David Spears who were the other motorists involved in the accident in which she was injured.

The day before the trial was to begin, Farmer’s Insurance Co. tendered to the Thomases $100,000, which was its liability limit on behalf of its insured, John Laughlin. State Farm then paid the $25,000 underinsured motorist benefits despite the fact that Farm Bureau Insurance Co. which insured David Spears for $25,000 against liability had not yet tendered payment. The Trial Court ruled that Ms. Thomas was entitled to the statutory penalty and attorneys’ fees under §23-79-208(a).

Section 23-79-208(a) imposes the penalty and fee requirement on an insurer which fails to pay a claim “within the time specified in the policy.” The policy provides, “[t]here is no coverage until the limits of liability of all bodily injury liability insurance policies or bonds that apply to the insured’s bodily injury have been used up by payment of judgments or settlements.” According to State Farm, the “time specified in the policy” was the time after primary liability coverage was exhausted. No explanation is given for the payment by State Farm while the additional $25,000 liability coverage of David Spears had not been tendered and was thus not exhausted.

The underinsured motorist coverage law was enacted to supplement benefits recovered from a tortfeasor’s liability carrier. See Shepherd v. State Auto Property & Cas. Ins. Co., 312 Ark. 502, 850 S.W.2d 324 (1993). The purpose of underinsured motorist coverage is to provide compensation to the extent of the injury, subject to the policy limit. See Clampit v. State Farm Mutual Auto. Ins. Co., 309 Ark. 107, 828 S.W.2d 593 (1992).

The penal nature of §23-79-208 is directed against the unwarranted delaying tactics of insurers. Shepherd v. State Auto Property and Cas. Co., supra. The penalty attaches to a claim against an insurance company if suit is filed even though judgment is confessed before trial. See Federal Life and Casualty Company v. Weyer, 239 Ark. 663, 391 S.W.2d 22 (1965). The nature of the goal to be achieved by this punitive law remains constant and is not dependent upon the type insurance to which the statute applies.

While § 23-79-208(a), as the majority opinion states, “only requires payment ‘within the time specified in the policy,”’ the question we must face is whether an insurance company should be allowed to provide a policy which permits it to delay and con- ' test payment of a claim which it could have ascertained to be payable long before the insured was forced to file suit. The majority opinion cites no case law in support of its decision, but relies on the statute and the language of the policy. I question that reliance in view of the cases we have decided in other insurance contexts. We should not allow an insurer to circumvent the intent of the statute.

The majority also states, “that it is pure common sense that underinsurance should not pertain until it is determined whether the insured is in fact underinsured.” I question that approach. It suggests that an insurer can write a policy which requires payment only upon final judgment which requires it. Indeed, if we followed State Farm’s argument and allowed it to delay for the duration provided in its policy it would not have to pay until not only a judgment had been rendered against the person or persons liable for the injury but could delay until there has been “payment” by the liable parties, and that cannot be the law.

We rejected argument of that type in Farm Bureau Mut. Ins. Co. Inc. v. Mitchell, supra. There the insurance company denied coverage of an uninsured motorist. After the insured received a favorable jury verdict and judgment, the Trial Court awarded a penalty and attorneys’ fee. On appeal the insurer argued the award was erroneous as its responsibility to the insured did not become fixed or definite until the jury returned its verdict.

We held that after the insured was injured and asserted a claim, the insurer was entitled to a reasonable time to investigate, but when the insurance company elected to defend the suit brought by its insured, its decision carried with it the risk of having to pay the penalty.

There is no reason an insurer writing an underinsured motorist policy should not be subject to the same requirement of investigation and payment as the issuer of an uninsured motorist policy to investigate the amount of its liability. In both instances, the insurer should be expected to exercise good faith while dealing with its insured and should be penalized for delaying tactics.

The statutory penalty attaches when a demand for payment is made and, with knowledge of the State’s clear public policy, the insurer refuses. Shepherd v. State Auto Property and Cas. Co., supra. While the rule has not been applied to an underinsured motorist insurer, the public policy involved is the same as has been applied in other cases. An insurer should not be allowed to write a policy in violation of it and thus be permitted to avoid its duty to investigate its responsibility and delay payment on the basis of what other insurers may or may not do when its investigation would have revealed implication of the underinsured motorist coverage of its insured.

I respectfully dissent.