author: Steele Hays, Justice.

text:
    The ARKANSAS DEPARTMENT OF HUMAN SERVICES v. Shirley Palmer SPEARS
    92-626
    841 S.W.2d 624
    Supreme Court of Arkansas
    Opinion delivered November 16, 1992

      Tami Harlan, for appellant Department of Human Services.

      Jeanette Whatley, Central Arkansas Legal Services, for appellee.
   Steele Hays, Justice.

The Arkansas Department of Human Services (DHS) sought reimbursement from Shirley Palmer Spears for the purported overpayment of food stamps issued to Dorletha Berry. The trial court dismissed DHS’s claim with prejudice and determined that Ms. Spears was not liable for the debt because she did not eat at least fifty percent (50 %) of her meals in Ms. Berry’s house. On appeal, DHS contends that the trial court’s determination that Ms. Spears was required to have fifty percent of her meals in the Berry household to be considered a household member was clearly erroneous. We find no merit in appellant’s argument and affirm.

The Dorletha Berry household received food stamps during 1985 and 1986. It was later learned that Ms. Berry had incorrectly reported her household composition on her application. As a result, $1,498.00 in excess food stamp benefits were paid. Ms. Berry made no payments on this account before her death on March 25, 1988.

Shirley Palmer Spears, appellee, was an adult daughter of Ms. Berry who temporarily lived with her mother during some of the period of time when the overissuance occurred. On December 11, 1989, Ms. Spears informed DHS of Ms. Berry’s death. DHS later determined that Ms. Spears was also a member of the Berry household and, as such, was jointly and severally liable for the repayment of the debt as provided in7 C.F.R. § 273.18(a) (1992).

When DHS determined that Ms. Spears was only a household member from November 1985 through January 1986 and September and October 1986, the claim was reduced to $708.00. Ms. Spears refused to reimburse DHS.

DHS filed a complaint in the Municipal Court of North Little Rock. A trial was held and judgment was entered in favor of Ms. Spears. DHS then appealed to the Circuit Court of Pulaski County. Following a trial, the court determined that Ms. Spears was not liable for the debt because the evidence did not show that she had eaten fifty percent of her meals in her mother’s house. DHS’s claim was dismissed with prejudice. It is from this order that DHS brings this appeal.

The sole argument on appeal is that Ms. Spears qualifies as an adult household member and is responsible for her mother’s indebtedness. DHS contends it is entitled to judgment against Ms. Spears even if she did not eat fifty percent of her meals in the Berry household.

This case involves the interpretation of several provisions of the Food Stamp Act of 1964 as amended, 7 U.S.C.S. §§ 2011-2030 (1985 & Supp. 1992). Under the food stamp program, eligibility is determined and benefits are allocated per household rather than per individual. A household is defined in 7 C.F.R. § 273.1 (iii)( 1992) as “a group of individuals who live together and customarily purchase and prepare meals for home consumption.” 7 U.S.C.S. § 2012 (i)(3), provides that “parents and children, or siblings, who live together shall be treated as a group of individuals who customarily purchase and prepare meals together for home consumption even if they do not do so.”

The Food Stamp Certification Manual, promulgated by the Food and Nutrition Service and issued to each state agency, describes in greater detail the criteria for determining household composition. Food Stamp Certification Manual, § 1600, reads as follows:

A food stamp household is normally composed of an individual living alone or a group of individuals who live together and who customarily purchase food and prepare meals together. To “customarily purchase and prepare together” means that the household purchases food and prepares meals for home consumption as one unit more than 50% of the time. [Emphasis in original.]

Food Stamp Certification Manual, § 1630, states:

This includes individuals whose work schedules allow them to be in the home only for short periods of time but who consider the home their primary residence and who are responsible household members. A responsible household member is a member such as a spouse who helps the household meet part or all of its expenses. Traveling salesmen, truck drivers, railroad employees, and offshore oil workers meet this criteria if these workers do not return to the home each night or even on a regular weekly or biweekly basis. Even though such individuals may be out of the home a majority of the time, they are considered household members. The work schedule and not the profession will establish these individuals as household members.

Under the food stamp program, benefits which exceed the household entitlement must be repaid by the household members. 7 C.F.R. § 273.18(a) states, “All adult household members shall be jointly and severally liable for the value of any overissuance of benefits to the household.”

DHS cites Robinson v. Black, 869 F.2d 202 (1989) for the proposition that there is a presumption that Ms. Spears was a household member. However, Robinson is inapplicable because it involved criteria for eligibility for food stamp benefits, which is not at issue in this case. Also, the Court held that all the circumstances surrounding living situations can be considered.

When a case is tried by a circuit court sitting without a jury, our inquiry on appeal is not whether there is substantial evidence to support the factual findings of the court, but whether the findings are clearly erroneous. City of Pocahontas v. Huddleston, 309 Ark. 353, 831 S.W.2d 138 (1992). Under the circumstances of this case, the trial court’s decision was not clearly erroneous.

Specifically, we do not believe the evidence established that Ms. Spears qualifies as an adult household member. She testified she moved in temporarily during a divorce and when she was recuperating from surgery for approximately a five month period. During this time, she had income of her own which she used to buy her own food and pay her own bills. She also testified that she ate less than fifty percent of her meals in her mother’s home because she was a railroad employee and was frequently gone overnight. In addition, Ms. Spears testified the Berry household was not her primary residence.

Because Ms. Spears was not a member of the household, she is not liable for the debt of Dorletha Berry. Ms. Spears testified she was not aware that her mother ever listed her as a household member. Also, there was no evidence that Ms.Spears participated in the fraudulent acts of her mother or benefitted in any way from the overissuance of food stamps. Therefore, the trial court was not incorrect in refusing to hold her responsible for the collection of the debt owed by Dorletha Berry, and we affirm its decision.


source: Caselaw Access Project

author: David Newbern, Justice.

license: Public Domain

text:
    IN THE MATTER OF THE GUARDIANSHIP OF Lois LaRue POWERS, An Incapacitated Person Helen LaRue Roberts v. George H. Powers
    92-615
    841 S.W.2d 626
    Supreme Court of Arkansas
    Opinion delivered November 16, 1992

      Evans, Farrar, Reis & Associates, by: Bryan J. Reis, for appellant.

      Callahan, Bachelor, Newell & Oliver, P.A., by: G. Latta Bachelor III, for appellee.
   David Newbern, Justice.

The Garland County Probate Court dismissed the petition in this guardianship case due to lack of jurisdiction. We reverse and hold that the Court had jurisdiction of the matter.

Helen LaRue Roberts, the appellant, petitioned to become guardian of the person and the estate of her sister, Lois LaRue Powers. Mrs. Powers’ husband, George H. Powers, the appellee, contested the petition. Mrs. Powers owns substantial real and personal property in Oklahoma where she lived with Mr. Powers prior to being brought to Hot Springs by Ms. Roberts. Mr. Powers opposed the move, and considerable bitterness has developed over whether he or Ms. Roberts should be the guardian of Mrs. Powers whose mental condition unquestionably requires a guardianship.

The Probate Court’s opinion stated that Mrs. Powers had resided in Oklahoma 68 years and the bulk of her property was there. The decision to dismiss Ms. Roberts’ petition was based on the Court’s finding that when Ms. Roberts brought Mrs. Powers to Hot Springs, Mrs. Powers lacked the capacity to change her residence or domicile from Oklahoma to Arkansas. The issue before us is squarely that of whether a prospective ward must be a resident or domiciliary of Arkansas for an Arkansas probate court to have jurisdiction to establish a guardianship for the ward’s person and estate.

Neither residence nor domicile is addressed in Ark. Code Ann. § 28-65-201 (1987) which provides simply, “(a) A guardian of the estate may be appointed for any incapacitated person, (b) A guardian of the person may be appointed for any incapacitated person except a married minor who is incapacitated solely by reason of his minority.” The parties cite and argue portions of the venue provisions in Chapter 65 entitled “Guardians Generally.” Those arguments are not very helpful because venue and jurisdiction are separate concepts. Ozark Supply Co. v. Glass, 261 Ark. 750, 552 S.W.2d 1 (1977).

It is our view that Mrs. Powers’ mere physical presence in Garland County is a proper basis of jurisdiction of her person and estate. Jurisdiction to be exercised by a state through its courts of a person or property is established by mere presence. That was part of the scheme of jurisdiction established in Pennoyer v. Neff, 95 U.S. 714 (1878). We have followed it as to persons since our decision in Moores v. Winter, 67 Ark. 189, 53 S.W. 1057 (1899), although problems with the concept may exist in some contexts. See Oden Optical Co., Inc. v. Optique Du Mond, Ltd., 268 Ark. 1105, 598 S.W.2d 456 (Ark. App. 1980). Nor is there any doubt that an Arkansas court may have jurisdiction of whatever property may belong to Mrs. Powers in Arkansas. Arndt v. Griggs, 134 U.S. 316 (1890); Ingram v. Luther, 244 Ark. 260, 424 S.W.2d 546 (1968).

That the General Assembly has not restricted guardianship jurisdiction to the domicile of the prospective ward makes sense. If an incapacitated person is in this State and in need of the protection of guardianship proceedings our courts should not have to decline jurisdiction due to the fact that the person in need is domiciled elsewhere.

The Garland County Probate Court established temporary guardianships of the person and estate of Mrs. Powers, naming Ms. Roberts guardian in each instance. Thereafter, an Oklahoma court entered a permanent order, naming Mr. Powers guardian of Mrs. Powers’ estate. The temporary guardianships established by the Garland County Probate Court were vacated when the Court decided it lacked jurisdiction. While there may be remaining questions of comity or full faith and credit to be resolved in view of the actions of the two courts, the Probate Court has not yet dealt with them, and the record is not such that we can settle them without remand. Our holding is simply that the Probate Court erred in holding that it lacked jurisdiction to establish guardian-ships of the person and estate of Mrs. Powers.

Reversed and remanded.


author: Tom Glaze, Justice.

text:
    HALL’S CLEANERS, et al. v. Gwendolyn WORTHAM
    92-559
    842 S.W.2d 7
    Supreme Court of Arkansas
    Opinion delivered November 16, 1992
    [Rehearing denied December 14, 1992.]

      Bailey, Trimble, Capps, Lowe, Sellars & Thomas, by: Chester C. Lowe, for appellants.

      Lee A. Biggs, III, for appellee.
   Tom Glaze, Justice.

The Arkansas Court of Appeals affirmed the Worker’s Compensation Commission’s affirmance of the administrative law judge’s ruling that appellee’s claim for initial benefits was filed within the two year statute of limitations mandated by Ark. Code Ann. § 1 l-9-702(a)(l) (1987). Hall’s Cleaners v. Wortham, 38 Ark. App. 86, 829 S.W.2d 424 (1992). We agree that appellee’s claim was timely, and affirm.

The statute of limitations issue was submitted to the Commission on the basis of a stipulated record, which essentially reflected that over a period of twelve years appellee developed a swan neck deformity in her left thumb. The deformity was caused by appellee’s continuous operation of a pressing machine while employed by appellant, Hall’s Cleaners. Some three years before she filed the claim at issue, appellee experienced pain and sought and paid for treatment from her family physician, Dr. Jim Citty. Dr. Citty informed appellee that appellee’s thumb deformity was job-related and irreversible. Appellee reported Dr. Citty’s opinion to appellant in September of 1987 and was thereafter removed from the position of press operator and reassigned to a less strenuous position at the front counter. The reassignment did not affect appellee’s wages.

Appellee’s pain increased, yet Dr. Citty maintained his position that the condition could not be remedied. However, he did recommend that appellee seek a second opinion and directed her to a Dr. Green. Dr. Green, after investigation, told appellee the deformity could be repaired by fusing the joints back together. •

Relying on this information, appellee left her employ at Hall’s Cleaners and consented to the surgery recommended by Dr. Green. The surgery took place on August 31,1989. Appellee returned to work a little over a month after the operation. Appellee then filed her claim for benefits on October 12, 1989.

The administrative law judge ruled the injury to be a “gradual on-set injury” which did not accrue until August 31, 1989, when appellee first lost time from work, thus, her claim, having been filed on October 12, 1989, was well within the two year statute of limitations. Appellee was awarded temporary total disability from August 31, 1989, through October 9, 1989. She also received a permanent impairment rating of 25 % to the left hand.

The Commission, in a 2-1 decision, affirmed, holding that, (1) appellee’s injury was not a latent injury and (2) that the substantial character of her injury was known more than two years prior to the filing of her claim but that the claim was not barred by the statute of limitations because her injury did not cause an incapacity to earn wages until August 31,1989, and that the statute did not begin to run until that date. The Court of Appeals affirmed the decision, and we granted review.

The issue presented to the Court of Appeals was whether there was substantial evidence to support the Commission’s decision that appellee’s claim for benefits was not barred by the statute of limitations. On appeal the evidence must be viewed in the light most favorable to the Commission’s decision and its decision must be upheld if it is supported by substantial evidence. St. Michael Hospital v. Wright, 250 Ark. 539, 465 S.W.2d 904 (1971). Thus, before the appellate court may reverse a decision by the Commission, it must be convinced that fair-minded persons with the same facts before them could not have reached the conclusion arrived at by the Commission. International Paper Co. v. Tuberville, 301 Ark. 22, 786 S.W.2d 830 (1990).

The statute under consideration is Ark. Code Ann. § 11-9-702(a)(1) (1987) which provides:

TIME FOR FILING. (1) A claim for compensation for disability on account of injury, other than a occupational disability and occupational infection, shall be barred unless filed with the commission within two (2) years from the date of’the injury.

The issue on appeal is when did appellee’s condition first rise to the level of an “injury” for purposes of commencing the statute of limitation. The decisions of this Court, and those of the Court of Appeals, consistently proclaim Arkansas to be an “injury state,” that is, the statute of limitations begins to run at the time of the injury as opposed to the time of the accident. Donaldson v. Calvert-McBride Printing Co., 217 Ark. 625, 232 S.W.2d 651 (1950); Cornish Welding Shop v. Galbraith, 278 Ark. 185, 644 S.W.2d 926 (1983); Calion Lumber Co. v. Goff, 14 Ark. App. 18, 684 S.W.2d 272 (1985). However, review of the case law on this subject demonstrates that labelling Arkansas merely as an “injury state” is somewhat misleading.

In Donaldson, this court held that, for purposes of commencing the statute of limitations under § 11-9-702(a)( 1), the word “injury” is to be construed as “compensable injury,” and that an injury does not become “compensable” until (1) the injury develops or becomes apparent and (2) claimant suffers a loss in earnings on account of the injury. Donaldson, 217 Ark. at 629-631, 232 S.W.2d at 654. Thus, the statute of limitations does not begin to run until both elements of the rule are met. Therefore, Arkansas is technically a “compensable injury” state. (For a review of cases in which our decision in Donaldson was applied see, Shepherd v. Easterling Const. Co., 7 Ark. App. 192, 195, 646 S.W.2d 37 (1983) and Arkansas Louisiana Gas Co. v. Grooms, 10 Ark. App. 92, 98-99, 661 S.W.2d 433 (1983)).

The following provision, Ark. Code Ann. § 11-9-501 (a) (1987) determines at what point an injured worker first becomes entitled to benefits:

Compensation to the injured employee shall not be allowed for the first seven (7) days disability resulting from injury, excluding the day of injury. If a disability extends beyond that period, compensation shall commence with the ninth day of disability. If a disability extends for a period of two (2) weeks, compensation shall be allowed beginning the first day of disability, excluding the day of injury.

Although appellee’s injury had been apparent for some three years, it is undisputed that she was never absent from the job until she reported to the hospital for reconstructive surgery on August 31, 1989. Thus, it was not until that time, when she missed a month of work, that she became entitled to benefits under the Workers’ Compensation Law. Therefore, we hold that it was not until she underwent surgery that the limitations period of Ark. Code Ann. § ll-9-702(a)(l) commenced to run. The Court of Appeals was correct in affirming the Commission’s specific finding that appellee’s claim was not barred by the statute of limitations.

On appeal, appellants contend that appellee’s claim is barred by the statute of limitations and premises this point upon our decision in Cornish Welding Shop v. Galbraith, 278 Ark. 185, 644 S.W.2d 926 (1983). They argue the statute commenced to run on the date Dr. Citty informed appellee that her deformity was both job related and irreversible. Appellant’s reliance on Cornish Welding Shops is misplaced and the distinction between Cornish Welding Shops and the case at bar is rudimentary.

It is clear that the issue at bar today is, “what is a compensable injury for purposes of commencing the statute of limitations contained within §1 l-9-702(a)(l),” which applies to a claimant’s right to recover benefits for an initial “compensable injury.” However, in Cornish Welding Shops, this court was confronted with the issue, “when does the statute of limitations contained within § 1 l-9-702(b) commence to run?” That provision, in pertinent part, reads as follows:

TIME FOR FILING FOR ADDITIONAL COMPENSATION. In cases where compensation for disability has been paid on account of injury, a claim for additional compensation shall be barred unless filed with the commission within one year one (1) year from the date of the last payment of compensation, or two (2) years from the date of the injury, whichever is greater.

Therefore, § ll-9-702(b) and Cornish Welding Shops govern only the time in which a claimant, suffering a recurrence of an earlier fully compensated “compensable injury,” must file a. claim for “additional compensation.” It is clear from a reading of both Donaldson and Cornish Welding Shops that the former is a “compensable injury” case under § 1 l-9-702(a)(l) and the latter a “recurrent injury” case under § 1 l-9-702(b). Likewise, the case at bar is a “compensable injury” case and thus, the Commission and the Court of Appeals were correct in ruling that Donaldson is controlling.

We therefore affirm the Court of Appeals.

Holt, C.J., not participating.


author: Donald L. Corbin, Justice.

text:
    Ron FULLER v. Jerry L. RUSSELL
    92-15
    842 S.W.2d 12
    Supreme Court of Arkansas
    Opinion delivered November 16, 1992

      Eichenbaum, Scott, Miller, Liles & Heister, P.A., by: Christopher O. Parker, for appellant.

      Jerry L. Russell, Pro Se.
   Donald L. Corbin, Justice.

This appeal is from a libel action filed by appellee, Jerry L. Russell, against appellant, Ron Fuller. Appellee is a political consultant. In the 1990 Republican Primary, he was hired as a consultant to the campaign of Daryl Coker in Coker’s race against appellant for a seat in the Arkansas General Assembly. As part of his consultation to the Coker campaign, appellee prepared and distributed a postcard comparing the two candidates in areas such as the decision to run for various legislative positions, community leadership, business management, and views on taxes. In response to this comparison postcard, Fuller prepared and distributed to approximately 500 voters the following written message which states in pertinent part:

NEGATIVE CAMPAIGN ALERT
With less than one week remaining, my opponent, Daryl Coker has chosen to DISTORT my good record in a comparison mail piece. He and his hired Political Consultant “MR. NEGATIVE” Jerry Russell blatantly misrepresented the facts regarding my service to your community and my voting record. THE ONLY THING THEY GOT RIGHT WAS MY NAME!
HELP ME SEND NEGATIVE CAMPAIGNERS A MESSAGE!
I am not using a HIRED POLITICAL CONSULTANT, especially a NEGATIVE TACTICIAN such as Jerry Russell. Jerry is a Democratic Political Consultant and in this election cycle has (26 Democratic) candidates and (1 Republican), my opponent. Daryl has been mislead [sic] because DISTORTION and NEGATIVE campaigns are all Jerry Russell understands.
Let’s show Mr. Negative, Jerry Russell and my opponent that the people of Western Pulaski County will not be fooled by distortions and negative campaign tactics. VOTE FOR RON FULLER ON MAY 29TH.

Appellee later filed suit against appellant, alleging appellant had libeled him as a result of the Negative Campaign Alert. Appellee claimed $10,000.00 in compensatory damages and $ 100,000.00 in punitive damages. Appellee tried his libel suit to a jury and received a verdict of $5,000.00 compensatory damages and $1,000.00 punitive damages. Judgment was entered according to the verdict. Appellant’s motions for directed verdict and judgment notwithstanding the verdict were denied. This appeal followed.

For reversal of the judgment, appellant asserts three points of error. First, appellant claims his statements are ones of opinion rather than of provably false facts and are therefore protected speech. Second, appellant claims there is no substantial evidence from which the jury could have found actual malice. Third, appellant asserts there is no substantial evidence with reasonable certainty of damages to future income. We find merit to appellant’s second argument and therefore reverse and dismiss the judgment; we need not address appellant’s remaining two assignments of error.

The trial court found that appellee was a limited public figure. Neither party challenges that finding on appeal. Both parties agree that under Milkovich v. Lorain Journal Co., 497 U.S. 1 (1990), because the alleged defamatory statements are a matter of public concern, appellee had the burdens of proving the alleged defamatory statements false and, by clear and convincing evidence, that appellant made them with actual malice. Thus, the posture of the case presented to us is one involving a limited public figure plaintiff against a non-media defendant in a matter of public concern, a local political race.

Appellant maintains that his statements such as “Mr. Negative, Jerry Russell,” “negative tactician,” and “distortion and negative campaigns are all Jerry Russell understands” are expressions of opinion made within the context of a political campaign or matter of public concern and are not provable as false. In other words, appellant claims these statements are “opinions” of the kind protected in Milkovich, 497 U.S. 1. Appellant asserts there is only one statement in his “Negative Campaign Alert” that is not absolutely protected from the libel claim by the First Amendment:

He [Daryl Coker] and his hired Political Consultant “MR. NEGATIVE” Jerry Russell blatantly misrepresented the facts regarding my service to your community and my voting record.

Appellant claims appellee never met his burden of proving the falsity of the foregoing statement or that the statement was made with actual malice. Appellee counters this argument with the assertion that he offered substantial evidence of the falsity of all the statements in the “Negative Campaign Alert” and of appellant’s actual malice. We agree with appellant that appellee did not meet his burden of proving actual malice; therefore, we do not discuss the issue concerning protected speech as analyzed in Milkovich, 497 U.S. 1.

For purposes of addressing appellant’s second argument then, our analysis is whether appellee met his burden of proving by clear and convincing evidence that the statements were made with actual malice. Ordinarily, our standard of review would be whether the jury’s verdict could be supported by substantial evidence. However, the Supreme Court has stated that when the First Amendment is involved, the appellate court is obligated to make an independent examination of the whole record to make'sure the judgment does not constitute a forbidden intrusion on the field of free expression. Bose Corp. v. Consumer’s Union, 466 U.S. 485 (1984). Because appellant’s First Amendment right to free expression is at stake, we apply the higher standard of review.

In an attempt to define the actual malice standard, the Supreme Court has stated as follows:

[T]he plaintiff in such an action must prove that the defamatory publication “was made with ‘actual malice’ — that is, with knowledge that it was false or with reckless disregard of whether it was false or not.”
These cases are clear that reckless conduct is not measured by whether a reasonably prudent man would have published, or would have investigated before publishing. There must be sufficient evidence to permit the conclusion that the defendant in fact entertained serious doubts as to the truth of his publication. Publishing with such doubts shows reckless disregard for truth or falsity and demonstrates actual malice.
The defendant in a defamation action brought by a public official cannot, however, automatically insure a favorable verdict by testifying that he published with a belief that the statements were true. The finder of fact must determine whether the publication was indeed made in good faith.

St. Amant v. Thompson, 390 U.S. 727, 728, 731, 732 (1968).

The question of whether the evidence in the record is sufficient to support a finding of actual malice is a question of law. Harte-Hanks Communications, Inc. v. Connaughton, 491 U.S. 657 (1989). Our review of the record reveals that appellant testified he believed his statements to be true. St. Amant instructs us that appellant’s testimony that he believed he published the truth is of little consequence in making the actual malice determination. However, appellee simply failed to present any evidence of appellant’s awareness of the probable falsity of the statements. Thus, we must conclude appellee failed to meet his burden of proving actual malice. The issue should never have reached the jury. We must reverse and dismiss for appellee’s failure to prove actual malice.

Appellee makes a claim for attorney’s fees and costs in his brief. He cites no authority authorizing such an award and the abstract does not indicate he presented his request for fees and costs to the trial court. Moreover, the abstract does not reveal that appellee cross-appealed from any judgment on the issue of fees and costs. Therefore, we do not address appellee’s claim for attorney’s fees and costs.

Reversed and dismissed.

Brown, J., not participating.

       Although St. Amant applies to a public official, it nevertheless discusses actual malice, a standard which was extended to apply to public figures and matters of public concern by Gertz v. Robert Welch, Inc., 418 U.S. 323 (1974).


author: Robert L. Brown, Justice. Steele Hays, Justice,

text:
    MUSKOGEE BRIDGE COMPANY, INC. v. Cheryl A. STANSELL and Samantha Stansell, by Her Next Friend, Cheryl A. Stansell, and Patricia Sunday Lawson
    92-441
    842 S.W.2d 15
    Supreme Court of Arkansas.
    Opinion delivered November 16, 1992
    [Rehearing denied December 21, 1992.]

      Davis, Cox & Wright, by: Walter B. Cox and Tim E. Howell, for appellant.

      Lingle & Corley, by: James G. Lingle, for appellees Cheryl A. Stansell and Samantha Stansell by Her Next Friend, Cheryl A. Stansell.

      Odum, Elliott & Winburn, by: Bobby Lee Odom and J. Timothy Smith and Roy & Lambert, by: Brian P. Wood, for appellee Patricia Sunday Lawson.
   Robert L. Brown, Justice.

The appellant, Muskogee Bridge Company, Inc., raises five points for reversal in this appeal from a jury verdict finding it eighty percent at fault for an automobile accident which resulted in the death of Jim Lawson, husband of appellee Patricia Lawson, and injury to Patricia Lawson’s son, Justin Lawson, and to appellees Samantha and Cheryl A. Stansell. The points raised are without merit, and we affirm.

On the morning ofMayll,1985,Jim Lawson of Springdale prepared to go to work at George’s egg plant north of town and discovered that his truck would not start. He woke his wife, Patricia Lawson, and asked her to drive him to work. She agreed, placed the couple’s two-year-old son, Justin, in a child safety seat in the right-rear passenger seat of her car, and they left for the plant. Jim Lawson was expected to report for work at 7:00 a.m.

Prior to this time, Muskogee Bridge, an Oklahoma corporation, contracted with the Arkansas State Highway Commission to embark on a bridge construction project involving two bridges on U.S. Highway 71 just north of Springdale. The work was to be done in accordance with Highway Commission plans and specifications and under supervision of Highway Department personnel. A state-approved subcontractor, McClinton-Anchor Company, was to do the paving and asphalt work, also under Highway Department supervision.

At approximately 6:45 a.m., while still in Springdale, Patricia Lawson was heading north toward Rogers on U.S. Highway 71-Business. She approached the bridge construction area where Muskogee Bridge had closed the outside lanes on the bridge and permitted traffic only in the two inside lanes. Pylon barriers narrowed the road to a single lane leading north to the bridge. No employee of Muscogee Bridge was present at the time to direct traffic. No flashing arrow board or dip or bump signs were in place to warn drivers of danger.

Patricia Lawson, who was unfamiliar with the route, was exceeding the speed limit when she approached the bridge construction. The road surface for the bridge was higher due to resurfacing. This caused a bump as you entered the construction area and a drop-off after you crossed the bridge on the north side. Estimates of her speed ranged from forty to sixty-five miles an hour in a thirty-mile-per-hour zone at the construction site. At some point in the vicinity of the bridge construction, she lost control of the vehicle. Her skid and slide marks on the pavement began fifty to sixty feet from the end of the bridge construction according to Officer Kenneth Watson of the Springdale Police Department. Her car then jumped the median, crossed into the southbound lane, and crashed into an automobile driven by Cheryl Stansell and occupied by her daughter, Samantha Stan-sell. The impact destroyed the cars, killed Jim Lawson, and injured the appellees and their children.

Cheryl and Samantha Stansell filed a complaint in the Washington County Circuit Court, charging negligence on the part of both Muskogee Bridge and Patricia Lawson. Among the allegations asserted against Muskogee Bridge were failure to provide adequate warnings and “ [1] eaving an abrupt dip or bump in the roadway which created an unreasonably dangerous condition.” Patricia Lawson counterclaimed against Cheryl Stansell and cross-complained against Muskogee Bridge, advancing the same allegations against it that the Stansells made in their original complaint.

The case was tried before a jury over two days. The jury returned a verdict finding Muskogee Bridge eighty percent at fault in causing the accident and appellee Patricia Lawson twenty percent at fault. The jury awarded Cheryl Stansell, Samantha Stansell, and Justin Lawson the amounts of $25,000, $500, and $750,000, respectively.

I. SUBSTANTIAL EVIDENCE

Muskogee Bridge first contends that the jury’s verdict in favor of the appellees was founded solely upon sheer speculation and sympathy rather than upon substantial evidence. Substantial evidence is defined as that which is of sufficient force and character to compel a conclusion one way or another; it must force or induce the mind to pass beyond suspicion or conjecture. Derrick v. Mexico Chiquito, Inc., 307 Ark. 217, 819 S.W.2d 4 (1991); Wal-Mart Stores, Inc. v. Kelton, 305 Ark. 173, 806 S.W.2d 373 (1991). We have held that we must affirm if there is substantial evidence to support the judgment below. Derrick v. Mexico Chiquito, Inc., supra; Handy Dan Improvement Center, Inc. v. Peters, 286 Ark. 102, 689 S.W.2d 551 (1985).

In testing whether the evidence is substantial on appellate review, we need only consider the evidence on behalf of the appellee and that part of the evidence that is most favorable to the appellee. Derrick v. Mexico Chiquito, Inc., supra; Love v. H. F. Construction Co., 261 Ark. 831, 552 S.W.2d 15 (1977). The appellees asserted these instances of negligence: (1) the creation of a funnelling effect into the bridge with the reduction of four lanes to two lanes in a high-traffic, no-bypass area; (2) the creation of a “speed bump” at the south end of the bridge and a drop-off of several inches at the north end which caused Patricia Lawson to lose control; (3) the decision of Muskogee Bridge not to expend funds to pay for the installation of flashing arrow boards or additional warning signs; (4) the failure of Muskogee Bridge to comply with its contractual obligation to take “needed actions” to ensure the “safety of the public.”

The following evidence presented at trial supports a finding of negligence on the part of Muskogee Bridge:

Mike Webb, secretary-treasurer of Muskogee Bridge Company, conceded that “[w]e were responsible for traffic signs, yes, sir.” He acknowledged that there were no signs in place indicating either a “bump” or a “dip.”

Leon Brewer of the Arkansas Highway Department testified that in a letter he wrote denying Muskogee Bridge’s request for a flashing arrow panel he never said that such signs were not necessary but merely that they were not required by the Highway Department’s standard drawings. He insisted that the drop-off on the north end of the bridge could only have been an inch-and-a-half according to project specifications, but he agreed that if something there created the effect of a speed bump then something “was not right.”

Don Hooten, Muskogee Bridge’s project supervisor, admitted that the drop-off, which he contended was an inch-and-a-half as set forth in the project specifications, had not been measured. He also stated that flashing signs are typically used in “high traffic areas” and conceded that no “bump” or “dip” sign had been set up.

Officer Clyde Martin of the Springdale Police Department testified that he patrolled the area on a regular basis and estimated the drop-off on the north end of the bridge to be “anywhere from four to eight inches.” He said that the drop-off was there both before and after the accident.

Officer Herschel D. Hardin of the Springdale Police Department stated that he had been on the bridge as many as a dozen times or more per eight-hour shift during the period of construction. He said regarding the drop-off: “It reminded me of a speed bump, the severity of the height of it which could cause a care to lose control going over it and maybe not being too familiar with it.” He declared the condition to be “dangerous” because of the ramp on either side of the bridge. He estimated the drop-off at four to six inches.

Officer Kenneth Watson of the Springdale Police Department, who also patrolled the area with considerable frequency, recalled that “ [I] t was a pretty good rise onto the bridge and then again going off of the bridge in either direction.” He described the sensation of going over the ramp as “more like a speed bump than most anything else” and a “pretty good jump.” On one occasion, when he was in pursuit of a suspect in a shooting incident at a speed of more than one hundred miles an hour, his vehicle became “airborne” after crossing the bridge.

Teresa Jo Nagles, a teacher and volunteer fire fighter who arrived on the scene after being summoned by beeper, said that the bridge construction area was “pretty bumpy.” She also remarked that “if I hit it hard enough going faster than thirty miles an hour it would jar my car.”

Loretta Feagin, an eyewitness to the accident, testified that she observed Patricia Lawson’s car in the narrowed, two-lane area “weaving back and forth from one side to the other, back and forth. She was fighting it. She couldn’t hold it straight.” Loretta Feagin estimated Patricia Lawson’s speed at forty miles an hour.

Muskogee Bridge’s contract with the Highway Commission provided in a section titled “Safety; Accident Prevention” that:

The contractor shall provide all safeguards, safety devices and protective equipment and take any other needed actions, on his own responsibility, or as the State Highway Department contracting officer may determine, reasonably necessary to protect the life and health of employees on the job and the safety of the public and to protect property in connection with the performance of the work covered by the contract.

In a special provision entitled “Traffic Control Devices for Construction Zones,” the contract stated:

It will be the responsibility of the contractor to furnish all other signs, barricades, channelization devices or temporary traffic control other than those covered above. These types of traffic control devices are those required for temporary hazard protection , i.e., . . . drop offs . . . .

The evidence outlines above was substantial and sufficient to allow a jury to conclude that the condition of the construction area with the drop-off of four to eight inches and the absence of warnings of the drop-off, though not specifically required under the Highway Commission’s plans and specifications, constituted both negligence and a proximate cause of the accident. The jury had the right to believe or disbelieve all or any part of the testimony and was in a superior position to judge the credibility of the witnesses. Boyd v. Redick, 264 Ark. 671, 573 S.W.2d 634 (1978). This was a decision in which circumstantial evidence obviously played a significant role, because Patricia Lawson was unable to recall what happened after the crash. Nevertheless, any material fact in issue may be established by circumstantial evidence. MFA Mutual Ins. Co. v. Pearrow, 245 Ark. 795, 434 S.W.2d 269(1968); see also Interstate Freeway Services, Inc. v. Houser, 310 Ark. 302, 835 S.W.2d 872 (1992). The fact that evidence is circumstantial does not render it insubstantial as the law makes no distinction between direct evidence of a fact and circumstances from which a fact can be inferred. Thomas v. Allstate Ins. Co., 27 Ark. App. 27, 766 S.W.2d 31 (1989). We hold that the evidence was sufficient to support the verdict and judgment.

II. SOVEREIGN IMMUNITY

For its second point, Muskogee Bridge argues that it may not be held liable for negligence arising out of the requirements of its contract with the Highway Commission, the reason being that it was performing work for a sovereign in accordance with the sovereign’s specifications. The circuit court instructed the jury as follows on the effect that performance under a government contract has on negligence:

A contractor who performs in accordance with the terms of this contract with a governmental agency involved and under the direct supervision of that agency is not liable for damages resulting from that performance. However, a contractor is liable for damages resulting from negligence in the performance of the contract.

Muskogee Bridge then requested the following instruction which the court refused to give:

. . . you are instructed that if Muscogee Bridge Company complied with the plans and specifications of its contract and committed no negligent acts apart from its work pursuant to the contract, then Muskogee Bridge cannot be held liable for any injuries and damages resulting from its work done in compliance with those plans and specifications.

Muskogee Bridge’s proffered instruction is confusing as far as what is meant by “negligent acts apart from its work pursuant to the contract.” Moreover, the law was correctly stated by the instruction given. Accordingly, the circuit court did not abuse its discretion in refusing to give the proffered instruction. See Wal-Mart Stores, Inc. v. Kelton, 305 Ark. 173, 806 S.W.2d 373 (1991).

III. DIRECTED VERDICT

Muskogee Bridge moved for a directed verdict based on its contentions 1) that it was entitled to immunity under the terms of its contract with the Highway Commission; 2) that the jury would have to engage in sheer speculation about whether the bump caused Patricia Lawson to lose control; 3) that all the paving work was performed by McClinton-Anchor, a state-approved subcontractor; and 4) that no evidence was adduced to show that a reasonably careful contractor would have put up any additional warning signs.

A motion for a directed verdict should be granted only if there is no substantial evidence to support the verdict. Bank of Malvern v. Dunklin, 307 Ark. 127, 817 S.W.2d 873 (1991). We have already addressed the substantial evidence and immunity points. Suffice it to say that the mere fact that a subcontractor performed the work in question does not automatically relieve the general contractor of all liability. See, e.g., Construction Advisors, Inc. v. Sherrell, 275 Ark. 183, 628 S.W.2d 309 (1982). The Highway Commission contract also addresses this point when it says that subcontracting or assignment does not “relieve the contractor of any responsibility for the fulfillment of the contract.” Under the contract Muskogee Bridge was to provide safeguards to protect the public from dangerous conditions. But apart from the agreement, Muskogee Bridge, as general contractor, had a duty to protect the public against unreasonably dangerous conditions on the job site. Furthermore, the appellees were not required to present evidence of what a reasonably careful contractor would do. The circuit court correctly refused to direct a verdict.

IV. OFFICER OPINION

At trial, Officer Clyde Martin testified that he had been trained in accident investigation and that he had investigated approximately one hundred accidents a year. He then testified on direct examination by appellee Cheryl Stansell’s attorney regarding contributing factors to the accident:

Q. Do you have contributing factors to Mrs. Lawson?
A. On Mrs. Lawson I have two contributing factors. One was the wrong side of the road as a result of crossing the median and failure to maintain control of the vehicle.

There was no objection to this testimony. Later, on cross-examination by Patricia Lawson’s attorney, Officer Martin was asked about the bridge as a contributing factor:

Q. In your opinion, Officer Martin, was the bridge a contributing factor to this accident?
MR. COX: Your Honor, I am going to object. There is no foundation and it is expression of an opinion. There is not sufficient foundation.
MR. ROBINSON: Your Honor, under Rule 702 his knowledge, experience and training help determine a fact in in issue that goes to causation and not the ultimate issue of negligence. My asking Officer Martin’s opinion does not mandate a legal conclusion.
THE COURT: I’m going to allow him to testify over your objection as to the bridge. He has testified to his memory of it. Your objection will be noted, Mr. Cox. Ask the question again.
Q. [Mr. Robinson continuing:] In your opinion, sir, was the bridge a contributing factor to this accident?
A. The bridge or the construction itself:
Q. The drop off, the rise in the bridge and the drop off areas, sir.
A. Yes, sir, I would say it was one of many contributing factors.

Under subsequent questioning by Muskogee Bridge, Officer Martin testified that he did not list the bridge construction as a contributing factor in his report and could not say what caused Mrs. Lawson to lose control of her vehicle. He added under cross examination by Lawson that the drop-off could have been a contributing factor. But on re-cross examination by Muskogee Bridge, he admitted that he could only say it was “a possible cause” of the accident.

The next day, the circuit court reconsidered its previous ruling, admitted it had erred, and admonished the jury not to consider Officer Martin’s testimony on contributing factors. The court then struck the testimony. Muskogee Bridge asked for a mistrial, but the motion was denied.

The decision to grant a mistrial lies within the discretion of the trial court. Schroeder v. Johnson, 234 Ark. 443, 352 S.W.2d 570 (1962). Here, the circuit court, on the following day, admitted that it had erred in allowing Officer Martin to testify regarding contributing factors to the accident. We agree that this was error. The burden, however, is on the appellant to demonstrate that the circuit court committed prejudicial error. Error which does not result in prejudice is not reversible. Robinson v. Abbott, 292 Ark. 630, 731 S.W.2d 782 (1987).

Muskogee Bridge has not demonstrated that it was prejudiced. Officer Martin, though initially giving an opinion on contributing factors, later hedged in his testimony and said he could not say that the bridge construction was a cause of the accident. It was only a possible factor. Furthermore, the circuit court admonished the jury not to consider his testimony on contributing factors. Had the police officer been more demonstrative in assessing blame and the court not admonished the jury, our attitude would be diiferent. But here the circuit court made the appropriate decision to admonish the jury and go forward with the trial.

V. LAY TESTIMONY

Teresa Nagles testified that she crossed the bridge three or four times a week and that she experienced a jarring bump. She also testified that she told her father, jokingly, that she would sue the City if her wheels were knocked out of line. Her testimony was relevant under A.R.E. Rule 401 because it had a tendency to make the existence of the fact of a jarring bump more probable. After an objection from Muskogee Bridge, she limited her testimony to the time frame immediately before the accident. The circuit court committed no error in admitting this testimony.

Affirmed.

Hays, J., dissents.

Steele Hays, Justice,

dissenting. Because I can find no substantial evidence in this record of a defect in the bridge construction which was the proximate cause of the collision between the Lawson and the Stansell vehicles, I would reverse the judgment entered on the verdict. It is not enough that the bump could have caused the Lawson vehicle, travelling at a high rate of speed, to swerve and lose control, the law sensibly requires causation in fact. Missouri Pacific Railroad Co. v. Remel, 185 Ark. 598, 48 S.W.2d 548 (1932). That proof is simply lacking in this case.


author: Jack Holt, Jr., Chief Justice.

text:
    Melber WRIGHT d/b/a/ A.B.C. Termite & Pest Control v. ARKANSAS STATE PLANT BOARD
    92-453
    842 S.W.2d 42
    Supreme Court of Arkansas
    Opinion delivered November 23, 1992

      Howell, Price, Trice, Basham & Hope, P.A., by: Robert J. Price, for appellant.

      Winston Bryant, Att’y Gen., by: Arnold M. Jochums, Asst. Att’y Gen., for appellee.
   Jack Holt, Jr., Chief Justice.

The primary issue in this case is whether the Arkansas State Plant Board’s administrative action refusing to renew A.B.C. Termite and Pest Control’s license was correct. We find that it was and affirm the trial court. A.B.C. also complains that the trial court erred in not making findings of fact and improperly limited its scope of review. We disagree.

In April, 1990, Melber Wright, owner and operator of A.B.C. Termite and Pest Control, was sent an Order and Notice of Hearing from the Pest Control Committee of the Board advising him that an administrative hearing would be held in connection with the status of his pest control license. The Notice had four counts: (I) alleged Mr. Wright was in violation of the terms of a probation period imposed in 1988; (II) alleged he failed to correct substandard work on sixteen specified buildings which were found by the Plant Board to lack minimum requirements; (III) alleged that he failed to file required monthly reports of work done on certain property; and (IV) alleged he had not paid reporting and reinspection fees totalling $3,753.00. Mr. Wright had previously been placed on probation for two years by order of the Board dated December 9,1988 based on a finding pursuant to Ark. Code Ann. § 17-30-217(l)(1987) that he “misrepresented for the purpose of defrauding the consumers of the State of Arkansas by entering into agreements to perform termite pretreatments on [twenty-five buildings] when, in fact little or no chemical application was made by Wright or his registered agents.”

On May 24, 1990, an evidentiary hearing was held by the Pest Control Committee of the State Plant Board. The Committee made the following findings of fact and conclusions of law:

(a) Melber Wright failed to correct substandard work on 16 buildings found not to meet minimum treating requirements for Termite and Other Structural Pests, so he is guilty of violating Ark. Code Ann. § 17-30-217(9)(1987).
(b) Melber Wright did not file reports of work performed as required by law, so he is guilty of violating Ark. Code Ann. § 17-30-221(c), (1), (3). He did not pay reporting and reinspection fees in violation of Ark. Code Ann. § 17-30-217(6).

The Committee recommended to the Board that Mr. Wright’s license not be renewed unless the fees were paid and the work was brought to compliance by July 1, 1990. They also recommended that the Board sequester A.B.C.’s bond until the fees were paid. The order specifically advised Mr. Wright of his right to appeal the Committee’s action to the Full Board at its June 7, 1990, meeting by “filing a written request at the Plant Board office no later than June 2, 1990, stating his desire to appeal.” No written request was filed, nor did he or his attorney appear before the full Board meeting.

At its June 7 meeting, the Board adopted the recommendations of the committee without change. On July 6, 1990, Mr. Wright filed a petition for judicial review in Pulaski County Circuit Court pursuant to the Administrative Procedure Act, Ark. Code Ann. § 25-15-212 (1992), alleging that the Plant Board acted in violation of constitutional or statutory provisions, in excess of its statutory authority, using unlawful procedure, and abusing its discretion. Mr. Wright filed a separate motion to stay enforcement of the agency’s decision. The court found Mr. Wright would be irreparably harmed and entered an order granting his request for a stay of the nonrenewal of his license during the pendency of this proceeding.

The trial court affirmed the actions of the Board and found that the committee system used by it to review Mr. Wright’s license was lawful, that substantial evidence supported their findings of fact made, and that the action of the Board was not arbitrary. The court provided in its order that if Mr. Wright appealed, the stay previously granted would remain in effect pending appeal.

One month after the hearing was held on the merits, Wright filed a motion asking the trial court to make findings of fact and conclusions of law pursuant to Ark. R. Civ. P. 52(a), which states, “If requested by a party, in all contested actions tried upon the facts without a jury, the court shall find the facts specially and state separately its conclusions of law thereon.” A hearing was held on the motion but the court denied it and accepted an order drafted by the Plant Board pursuant to the court’s directions.

The Plant Board countered that under Ark. Code Ann. § 25-15-212(h)(l)-(6)( 1992) and Whitlock v. G.P.W. Nursing Home, Inc., 283 Ark. 158, 672 S.W.2d 48 (1984), the Arkansas Rules of Civil Procedure do not apply to civil actions brought under the Administrative Procedure Act. We held in Whitlock that the Administrative Procedure Act is an exception to the Arkansas Rules of Civil Procedure under Rule 81(a), and we have repeated this rule in more recent cases. Sunbelt Couriers v. McCartney, 303 Ark. 523, 798 S.W.2d 92 (1990); McEuen Burial Ass’n v. Arkansas Burial Ass’n Bd., 298 Ark. 572, 769 S.W.2d 415 (1989). Based on this rule, Ark. R. Civ. P. 52(a) is inapplicable tot his judicial review, and the trial court was not bound to provide Mr. Wright with a finding of fact or conclusion of law.

By contrast, the Plant Board did fulfill its requirements under the Administrative Procedure Act that a final decision be rendered that “shall include findings of fact and conclusions of law, separately stated.” Ark. Code Ann. § 25-15-210(b)(l-2)(1992). The Pest Control Committee made specific findings of fact and conclusions of law which the Board adopted. The Pest Control Act allows adjudicatory hearings to be held by the board or an authorized committee of the board. Ark. Code Ann. § 17-30-220(a)(1987). This process had been recognized by this court in Thomas v. Committee “A”, Ark. State Plant Bd., 255 Ark. 517, 501 S.W.2d 248 (1973). The findings of the Pest Control Committee were adequate and were duly adopted by the Board.

Mr. Wright next argued that the rationale the court gave for affirming the Plant Board’s decision was inadequate because the court improperly limited the scope of its review to only one of the six grounds givenat Ark. Code Ann. § 25-15-212(h) (1987), that is, that it found substantial evidence to support the action taken.

Substantial evidence is one of the six bases for judicial review given by the Administrative Procedure Act:

(h) The court may affirm the decision of the agency or remand the case for further proceedings. It may reverse or modify the decision if the substantial rights of the petitioner have been prejudiced because the administrative findings, inferences, conclusions, or decisions are:
(1) In violation of constitutional or statutory provisions;
(2) In excess of the agency’s statutory authority;
(3) Made upon unlawful procedure;
(4) Affected by other error or law;
(5) Not supported by substantial evidence of record; or
(6) Arbitrary, capricious, or characterized by abuse of discretion.

Ark. Code Ann. § 25-15-212(h)(1992)(emphasis added).

Mr. Wright argued that the other five standards of review should have been applied. However, Mr. Wright provided no authority supporting his position or any logical reasons why these other five rationale should be applied.

The trial court’s order reflected that the trial court did take three of these factors into consideration: whether supported by substantial evidence (§ 25-15-212(h)(5)), whether made upon unlawful procedure (§ 25-15-212(h)(3)), and whether there existed arbitrary and capricious procedure (§ 25-15-212(h)(6)). This was more than sufficient to satisfy the Administrative Procedure Act.

Mr. Wright’s main argument was that the trial court’s decision was clearly erroneous for a variety of reasons. “Clearly erroneous” is not the correct standard of review applicable here: when reviewing administrative decisions, we review the entire record to determine whether there is any substantial evidence to support the administrative agency’s decision, whether there is arbitrary and capricious action, or whether the action is characterized by abuse of discretion. In re Sugarloaf Mining Co., 310 Ark. 772, 840 S.W.2d 172 (1992); Singleton v. Smith, 289 Ark. 577, 715 S.W.2d 437 (1986); Green v. Carder, 282 Ark. 239, 667 S.W.2d 660 (1984); Arkansas Alcoholic Beverage Control Bd. v. King, 275 Ark. 308, 629 S.W.2d 288 (1982). We have recognized that administrative agencies are better equipped than courts, by specialization, insight through experience, and more flexible procedures to determine and analyze underlying legal issues affecting their agencies, and this recognition accounts for the limited scope of judicial review of administrative action and the refusal of the court to substitute its judgment and discretion for that of the administrative agency. First Nat’l Bank v. Arkansas State Bank Comm’r, 301 Ark. 1, 5, 781 S.W.2d 744, 746 (1989); Arkansas State Hwy. Comm’n v. White Advertising Int’l, 273 Ark. 364, 620 S.W.2d 280 (1981); Arkansas Beverage Control Bd. v. King, supra; Gordon v. Cummings, 262 Ark. 737, 561 S.W.2d 285 (1978).

To determine whether a decision is supported by substantial evidence, we review the whole record to ascertain if it is supported by relevant evidence that a reasonable mind might accept as adequate to support a conclusion. Livingston v. Arkan sas State Medical Bd., 288 Ark. 1, 701 S.W.2d 361 (1986); Partlow v. Arkansas State Police Comm’n, 271 Ark. 351, 609 S.W.2d. 23 (1980). To establish an absence of substantial evidence to support the decision the appellant must demonstrate that the proof before the administrative tribunal was so nearly undisputed that fair-minded persons could not reach its conclusions. Beverly Enters.-Ark., Inc. v. Arkansas Health Servs., 308 Ark. 221, 824 S.W.2d 363 (1992); Williams v. Scott, 278 Ark. 453, 647 S.W.2d 115 (1983). Substantial evidence is valid, legal and persuasive evidence. Independence Sav. & Loan Ass’n v. Citizens Fed. Sav. & Loan Ass’n, 265 Ark. 203, 577 S.W.2d 390 (1979).

At the Committee hearing, the procedure and rules for regulating pest control operators were outlined. These gave a standard procedure for inspection, notice, and sanctions where the Board’s rules and regulations are violated. If a Board inspector inspects a site and finds substandard pest control work, the Board sends a “Report of Substandard Termite Treatment,” or pink slip, to the pest control operator, after which the operator has fifteen days to rectify the situation. The site will be reinspected, and if the work is still not done, another pink slip may be issued. Fees are charged for notice and reinspection. Testimony at the Committee hearing revealed that the fees were based on an analysis of the overall operating cost of the Pest Control Division.

In Mr. Wright’s situation, there was ample evidence to support the agency’s action. First, there was evidence presented at the lengthy Committee hearing regarding the substandard conditions of all sixteen buildings named in the original Notice and Order. An inspector employed by the Board testified that he inspected one house four times and had caused three pink slips to be issued as well as a letter to Mr. Wright. Similar testimony as to the other buildings followed. In most instances, three pink slips, the maximum number, were sent to Mr. Wright and at least three reinspections occurred per property, although one property had only one pink slip issued.

Secondly, the terms of the 1988 order which put Mr. Wright on probation for two years were read into the record and it was clear that this previous agreement between the Board and Mr. Wright had been violated. The two terms of his probation were (1) that he violate no statute of the Professional Practice Act or the Rules and Regulations of the Arkansas State Plant Board and (2) that he rectify the customers’ complaints included in the notice. Mr. Wright failed to abide by both these terms by violating the rules and regulations as evidenced by the numerous pink slips issued and by failing to rectify one of the substandard jobs complained of 1988. In reviewing the record of the hearing before the Committee, the hearing before the Board, and the trial, it is obvious there was sufficient evidence of Mr. Wright’s misconduct to support the action of the Board.

We need not decide whether the Board’s action was arbitrary and capricious since it automatically follows that where substantial evidence is found, a decision cannot be classified as unreasonable or arbitrary. Independence Sav. & Loan Ass’n v. Citizens Fed. Sav. & Loan, 265 Ark. 203, 211, 577 S.W.2d 390, (1979).

Mr. Wright makes several arguments on appeal which we are not bound to address because they were not raised before the Board. In Alcoholic Beverage Control Div. v. Barnett, 285 Ark. 189, 685 S.W.2d 511 (1985), we said it is essential to judicial review under the Arkansas Administrative Procedure Act that issues must be raised before the administrative agency appealed from or they will not be addressed by this court:

A reviewing court usurps the agency’s function when it sets aside the administrative determination upon a ground not theretofore presented and deprives the Commission of an opportunity to consider the matter, make its ruling, and state the reasons for its action.

Alcoholic Beverage Control Div. v. Barnett, 285 Ark. 189, 192, 685 S.W.2d 511, 513 (1985)(quoting Unemployment Compensation Comm’n v. Aragon, 329 U.S. 143 (1946)). Mr. Wright was given notice of his right to appear before the full Board but declined to appear and raise these issues. See Truck Transp., Inc. v. Miller Transp., Inc., 285 Ark. 172, 685 S.W.2d 798 (1985).

Considering the deference this court gives to administrative decisions of agencies, we find that the Board’s decision to not renew Mr. Wright’s license was not arbitrary or capricious and was, in fact, supported by substantial evidence. See Edwards v. Arkansas Alcoholic Beverage Control, 307 Ark. 245, 819 S.W.2d 271 (1991).

For the foregoing reasons, we affirm.


author: Robert H. Dudley, Justice.

text:
    STATE of Arkansas, Jefferson County Child Support Enforcement Unit for: Lisa Gaye Finley v. Bruce ROBINSON
    91-334
    842 S.W.2d 47
    Supreme Court of Arkansas
    Opinion delivered November 23, 1992

      Lisa A. Kelly, for appellant.

      Winfred Trafford, for appellee.
   Robert H. Dudley, Justice.

This case began in 1989 when an unwed mother, then living in Humbolt County, California, sought assistance in obtaining child support from the father who lived in Jefferson County, Arkansas. The Family Support Division of the District Attorney’s Office in Humbolt County filed a complaint on behalf of the mother and child pursuant to the Revised Uniform Reciprocal Enforcement of Support Act. The Superior Court of Humbolt County, the initiating court, determined that the unwed mother was in need of support and certified a complaint to the County Court of Jefferson County. See Ark. Code Ann. § 9-14-314 (1991). Paternity cases in this State have been transferred by statute from county court to chancery court; thus, the case was filed in the Chancery Court of Jefferson County. The chancellor made a finding of paternity, ordered the father to pay child support, and placed custody of the child in the mother subject to the father’s right of visitation. There was no direct appeal at that time from the part of the decree involving the award of custody or visitation. Subsequently, the father filed a petition in which he alleged that he had been denied visitation, and asked that child support payments be suspended until he was allowed to visit the child. The chancellor eventually ordered that future support payments be suspended until the mother allowed the father to visit with the child. The Jefferson County Child Support Enforcement Unit, on behalf of the mother and child, appeals and argues that the receiving court, the Chancery Court of Jefferson County, did not have jurisdiction to adjudicate visitation rights, and, therefore, erred in suspending the child support payments. The argument is meritorious, and accordingly, we reverse and remand.

The purposes served by RURESA are similar to those of the Uniform Child Custody Jurisdiction Act, or UCCJA, two of which are to avoid jurisdictional competition and conflicts, and avoid the litigation of custody decisions. See Hogan v. Durgan, 11 Ark. App. 172, 668 S.W.2d 57 (1984). RURESA did not give the Jefferson County Chancery Court jurisdiction to address the issue of visitation. Under RURESA collateral matters such as visitation cannot be raised as a defense. In State v. Kerfoot, 308 Ark. 289, 291, 823 S.W.2d 895, 896 (1992), we quoted with approval from Todd v. Pochop, 365 N.W.2d 559 (S.D. 1985) as follows:

The very purpose of the URESA requires that it be procedurally and substantively streamlined. Interstate enforcement of support obligations will be impaired if matters of custody, visitation, or custodial parent’s contempt are considered by the responding court. The introduction of such collateral issues will burden the URESA mechanism. Moreover, permitting the resolution of other family matters in a URESA proceeding may deter persons from invoking URESA.

The father responds that the Jefferson County Chancery Court did not grant visitation, instead it only suspended support payments until visitation was allowed. The argument is not well taken. Generally, a court may not do indirectly that which it is directly prohibited from doing. Shackleford v. Shackleford, 194 Ark. 381, 107 S.W.2d 344 (1937). Under RURESA the Arkansas court could not directly determine visitation. Therefore, it could not indirectly determine visitation by making payment of child support dependent upon visitation. See Doody v. Sanders, 18 Ark. App. 38, 709 S.W.2d 823 (1986).

In addition, the Jefferson County Chancery Court had personal jurisdiction over the father only. It never had personal jurisdiction over either the mother or the child, and, since there was neither a marriage nor a divorce, it did not have jurisdiction over the marital res. A section of RURESA, Ark. Code Ann. § 9-14-332 (1991), provides, “Participation in any proceeding under [RURESA] does not confer jurisdiction upon any court over any of the parties thereto in any other proceeding.” The general rule in a RURESA proceeding is that support and visitation orders are not interdependent. Muller v. Muller, 515 A. 2d 1291 (N.J. Sup. Ct. 1986). Accordingly, we hold that the Chancery Court of Jefferson County erred in indirectly addressing the issue of visitation. While the original order of the Jefferson County Chancery Court purporting to award custody and visitation was not appealed, it is settled that jurisdiction is always subject to question.

Two court of appeals cases, Roark v. Roark, 34 Ark. App. 250, 809 S.W.2d 822 (1991) and Arkansas Department of Human Services v. Cameron, 36 Ark. App. 105, 818 S.W.2d 591 (1991), may be read to conflict with the holding of this opinion. To prevent any possible confusion, we note that the federal regulation quoted in those cases, 54 Fed. Reg. 15,761 (April 19, 1989), is not related to visitation or custody defenses, and to the limited extent that there may be some conflict, they are overruled.

Reversed and remanded for entry of orders consistent with this opinion.


text:
    DR. PEPPER BOTTLING CO. of Paragould v. Don FRANTZ d/b/a Frantz Distributing
    92-133
    842 S.W.2d 37
    Supreme Court of Arkansas
    Opinion delivered November 23, 1992

      Wright, Lindsey and Jennings, for appellant.

      Casey Jones, Ltd., by: Casey Jones', and McHenry & Mitchell, by: Robert McHenry, for appellee.
   Steele Hays, Justice.

Three points are raised by this appeal: whether a distributorship agreement between appellant Dr. Pepper Co. of Paragould, Inc. (Dr. Pepper) and appellee Don Frantz (Frantz) is subject to the Arkansas Franchise Practices Act; whether Dr. Pepper’s termination of the distributorship was without good cause and in violation of statutory provisions; and whether the evidence supports damages of $100,000 awarded to Frantz. Answering those questions in the affirmative, we affirm.

On November 17,1986, Frantz and Dr. Pepper entered into a contract entitled “Distributorship Agreement,” appointing Frantz to distribute exclusively throughout some eleven Arkansas counties the beverage products franchised by Dr. Pepper. Frantz agreed to carry Dr. Pepper’s entire line of products on its trucks, to refrain from selling any beverages similar to the products of Dr. Pepper, to comply with all policies of Dr. Pepper, including dress code, standards of merchandizing and the like. Frantz was to distribute beverage to retail outlets throughout the territory assigned to him at prices set by Frantz and to distribute at retail through coin-operated vending machines. No provision in the agreement obligated Frantz to maintain a particular place of business, a focal point of this dispute.

Frantz operated four trucks and two vans and rented warehouse space in Little Rock. Later, in 1989, Frantz constructed a warehouse, investing about $100,000 in the property. A representative of Dr. Pepper looked at the site and thought it “a good idea and a good investment.” Frantz maintained regular hours, keeping the doors open until six or seven p.m. Frantz distributed approximately one thousand five hundred cases of beverage each week, primarily to retail outlets but some sales were made to customers at the warehouse where products were on display.

In December 1988 Dr. Pepper wrote to Frantz stating that its products were being distributed in less than a third of the outlets of his territory, whereas he was obligated to secure and maintain regular distribution in a minimum of 65% of the outlets. Frantz was given until March 31, 1989, to correct the deficiency.

In September 1989 Frantz received a letter from Dr. Pepper informing him that because Dr. Pepper had recently acquired the 7-Up Bottling Company of Little Rock and Mountain Valley Water of Central Arkansas, “we must exercise our option to terminate your distributor agreement, effective immediately” upon thirty days notice.

Frantz brought this action against Dr. Pepper alleging the termination of the distributorship was in violation of the Arkansas Franchise Practices Act. The case was tried, Dr. Pepper moved for a directed verdict at the end of the plaintiff’s proof and again at the close. Both motions were denied and the jury returned a verdict for Frantz for $100,000. Dr. Pepper then moved for a judgment notwithstanding the verdict. That, too, was denied and this appeal followed.

I

The Circuit Court Erred In Finding That There Was A Legally Sufficient Evidentiary Basis For The Jury’s Finding That Frantz Was A Franchisee As That Term Is Defined By The Arkansas Franchise Act

A trial court may enter judgment notwithstanding the verdict only if there is no substantial evidence to support the verdict of the jury, and the moving party is entitled to judgment as a matter of law. Dedman v. Porch, 293 Ark. 571, 739 S.W.2d 685 (1987). On appeal from the denial of a motion for a judgment notwithstanding the verdict we review the evidence and all reasonable inferences arising therefrom in the light most favorable to the party on whose behalf the judgment was entered. McCuistion v. City of Siloam Springs, 268 Ark. 148, 594 S.W.2d 233 (1980).

The Arkansas Franchise Practices Act [Act 355 of 1977, Ark. Code Ann. §§ 4-72-201 — 210 (1987)] provides remedies for persons whose rights as franchisees have been terminated without good cause. A franchise is defined by the act as

a written or oral agreement for a definite or indefinite period, in which a person grants to another person a license to use a trade name, trademark, service mark, or related characteristic within an exclusive or nonexclusive territory, or to sell or distribute goods or services within an exclusive or nonexclusive territory, at wholesale, retail, by lease agreement, or otherwise.

Ark. Code Ann. § 4-72-202(1).

The act applies only to a franchise

entered into, renewed, or transferred after March 4, 1977, the performance of which contemplates or requires the franchise to establish or maintain a place of business within the State of Arkansas.

Ark. Code Ann. § 4-72-203.

“Place of business” is defined as

a fixed geographical location at which the franchisee displays for sale and sells the franchisor’s goods or offers for sale and sells the franchisor’s services.

Ark. Code Ann. § 4-72-202(6).

From the foregoing excerpts, Dr. Pepper argues that the act applies only to agreements “the performance of which contemplates or requires the franchise to establish or maintain a place of business in Arkansas,” that is to say, “a fixed geographical location at which the franchisee displays for sale and sells the franchisor’s goods.” See § 4-72-202(6).

Dr. Pepper relies on Bridgman v. Cornwell Quality Tools Co., 831 F.2d 174 (8th Cir. 1987), George R. Darche Associates v. Beatrice Foods Co., 538 F. Supp. (D.N.J.), affirmed 676 F.2d 685 (3rd Cir. 1981) and Carlo C. Celardi v. Miller Brewing Co., 421 F. Supp. 233 (D.N.J. 1976). But those cases are neither controlling nor persuasive, given material differences. Bridgman operated entirely from a van and made no pretense of selling from a fixed location where Cornwell’s products were displayed. The trial court found that neither Bridgman’s van nor his home constituted a place of business and the appeals court deferred to those factual findings.

The Darche case has marked differences from the case before us. Darche maintained no inventory and had no authority to set prices, whereas Frantz determined the price. Darche was, in effect, simply a soliciting agent and all orders were considered simply “an .offer to purchase until accepted by [Beatrice].” Products were delivered directly to the purchaser by the manufacturer and not by the soliciting agent. Darche undertook no duty to promote sales.

The Celardi case involved a dispute between a New Jersey beer distributor, Celardi, and Miller Brewing Company. Celardi sued Miller alleging a breach of its distributorship in violation of New Jersey’s Franchise Practices Act. This act, like ours, applies only to franchises the performance of which contemplates or requires the franchisee to establish or maintain a place of business with the State of New Jersey. But, unlike our act, the New Jersey act requires a minimum level of gross sales attributable to the goods of the franchisor. More important, § 56:10 -3(f) of that act specifically excludes “a warehouse, a place of storage, a residence or a vehicle” from the definition of “place of business.” Miller argued the exclusion of warehouses, etc., was indicative of a legislative intent to exclude alcoholic beverages from the coverage of the franchise act. The court rejected the contention that § 56:10 -3(f) was intended to exclude particular industries or substantial operations like Celari’s from the protection of the act in these terms:

This is especially so when one considers the strong public policy in favor of protection expressed by the act. See Shell Oil Co. v. Marinello, 63 N.J. 402, 409, 307 A.2d 598, 602 (1973), cert. denied, 415 U.S. 920 (1974).

Nor do we read the Celardi case as the appellant does to support the view that the issue of what is contemplated in terms of performance is resolved “solely by reference to the contract.” Whether that is implicit in the opinion is at best debatable; it is not, however, explicit, and if the opinion seems to focus largely on the provisions of the agreement, that is doubtless influenced by the fact that the question before the court was whether a preliminary injunction should issue anticipatory to a trial.

Thus, Dr. Pepper posits the issue to be decided as not whether Frantz actually established a place of business in Arkansas where products of Dr. Pepper were displayed and sold-a premise not easily sustainable in view of the testimony and the verdict- but whether the agreement required that Frantz would display and sell Dr. Pepper products from a fixed location, or contemplated that he would do so.

We readily concede the agreement contains no specific provision relative to a fixed location, but that hardly ends the matter. The words “contemplates or requires” are modifiers of the word “performance” and they introduce a wider scope to our inquiry. Since they are paired in the disjunctive, and “contemplates” is the more encompassing of the two, that connotes greater latitude in how duties might be interpreted under the agreement. Nothing in the agreement prohibits Frantz from selling at a fixed location and, indeed, one might ask how he could be expected to supply a minimum of 65 % of the retail outlets in eleven counties, including Pulaski and Jefferson, with a fleet of six vehicles handling 1,500 cases per week, without maintaining a facility of some kind. True, the agreement makes no mention of such and certainly does not require a place where goods are displayed and sold, but neither does it prohibit such a place. Frantz testified to the presence of both and we find nothing in the record suggesting that what he evidently contemplated in the performance of the agreement was ever challenged by Dr. Pepper, the author of the agreement.

In resolving to affirm, we are influenced not only by the language in our statutes, but by the fact that the legislature designed the act for the protection of the public and aired its purpose in the emergency clause:

. . .that some franchisors have, without good cause and to the great prejudice and harm of the citizens of the State of Arkansas, cancelled existing franchise agreements and that other such cancellations are threatened; and that only by the immediate passage of this Act can this situation be remedied and it is therefore necessary in the public interest to define the relationship and responsibilities of franchisors and franchisees in connection with franchise agreements.

One abuse the act was intended to remedy is wrongful terminations. See 62B Am. Jur. 2d Private Franchise Contracts § 292 (1990). Such contracts should be liberally construed to carry out the legislative goal. Id. § 304. In Bush v. National School Studios, Inc., 407 N.W.2d 883 (Wisc. 1987), the Supreme Court of Wisconsin gave a liberal construction to its newly adopted franchise act:

In determining whether a dealership exists within the scope of a state franchise regulation, courts should not focus solely on identifying the tell-tale trappings of the traditional franchise; rather, courts should consider the overriding principle of whether the business’ status is dependent upon the relationship with the grantor for its economic livelihood. If such dependency does exist, the business would be extremely vulnerable if terminated without good cause and adequate notice.

We conclude that the trial court did not err in denying the motion for judgment notwithstanding the verdict.

II

The Circuit Court Erred In Finding That There Was A Legally Sufficient Evidentiary Basis For The Jury’s Finding That Frantz Sustained Damages In the Amount of $100,000

Dr. Pepper contends that recovery of damages may not rest on speculation or conjecture, Duncan v. Foster, 271 Ark. 591, 609 S.W.2d 62 (1980), and must be proven with reasonable certainty, Traylor v. Huntsmen, 253 Ark. 704, 488 S.W.2d 30 (1972). Frantz’s proof of damages was provided by Dr. Ralph Scott, an economist, who placed a value of between $89,000 and $164,000 on the franchise Frantz assertedly held in central Arkansas. Dr. Pepper faults that testimony on the ground that Frantz still has the capacity to generate income and was in fact still operating; and moreover that, Frantz’s losses were overstated inasmuch as Dr. Scott included in his calculations moneys generated from products being sold by Frantz not supplied by Dr. Pepper. Finally Dr. Pepper points out that Dr. Scott valued the enterprise as of the end of 1988, when more than 90% of Frantz’s sales were attributable to Dr. Pepper, which testimony ignored the operation for the three quarters of 1989 leading up to termination. Dr. Pepper urges that this analysis was too remote to support the award.

Appellee’s response to the omission of Frantz’s experience in 1989 is that such inclusion would have increased the amount of damages sustained, and further that testimony by Frantz was he had invested $100,000 in the acquisition of a warehouse and was damaged well in excess of $100,000 by the breach. We note, too, that Scott did some downward revision in his estimates in view of Frantz’s testimony that a portion of his sales were from products other than Dr. Pepper.

We cannot say the appellant has shown us that the proof of damages was too speculative to go to the jury. The jury instructions are not abstracted, which limits our understanding of the issue and increases our dependence on the trial court. Moreover, we have recognized some latitude in this area and have not insisted on exactness of proof. Lancaster v. Schilling Motors, Inc. 299 Ark. 365, 772 S.W.2d 349 (1989). If it is reasonably certain that some loss has occurred it is enough they can be stated only proximately. Jim Halsey Co. v. Bonar, 284 Ark. 461, 683 S.W.2d 898 (1985).

Ill

The Circuit Court Erred In Finding That There’Was A Legally Sufficient Evidentiary Basis For The Jury’s Finding That Frantz Was Terminated Without Good Cause, Without Statutory Notice, And Without An Opportunity To Cure His Deficiencies

Dr. Pepper contends there is no substantial evidence that Dr. Pepper terminated Frantz without good cause. “Good cause” is defined under the Franchise Act as including the failure by the franchisee to comply substantially with the requirements imposed under the agreement. Dr. Pepper submits it produced overwhelming evidence of good cause to terminate. But that issue was clearly one for the jury, considering there was evidence from which the jury could readily find that termination was attributable to Dr. Pepper having acquired 7-Up Bottling Company rather than from the actions of Dr. Frantz.

For the reasons stated, the judgment is affirmed.

       Whether the construction of the agreement and applicability of the statutes should have been decided by the trial court, have not been raised by either party. See Duvall v. Massachusetts Indemnity & Life Insurance Co., 295 Ark. 413, 748 S.W.2d 650 (1988).


text:
    POTLATCH CORPORATION v. ARKANSAS CITY SCHOOL DISTRICT, Ronald Anderson, Curtis Gilbert and V. T. Mosby, Jr.
    92-195
    842 S.W.2d 32
    Supreme Court of Arkansas
    Opinion delivered November 23, 1992

      Friday, Eldredge and Clark, by: James M. Saxton and Robert S. Shafer, for appellant.

      Gibson & Gibson, P.A., by: Bynum Gibson, for appellees.
   David Newbern, Justice.

This is an appeal from the Circuit Court’s review of the 1988 and 1989 ad valorem tax assessments on specialized industrial equipment used in a papermill. The mill is owned and operated by the appellant, Potlatch Corporation (Potlatch), at Cypress Bend in Desha County. The case has a complicated procedural history.

The appellee, the Arkansas City School District (School District), claimed that Potlatch was not properly reporting or assessing the value of the equipment located in its plant. The School District, as permitted by Ark. Code Ann § 26-27-317 (Repl. 1992), petitioned the Desha County Equalization Board (Board) to adjust the Potlatch valuation for the 1988 tax year. The County Assessor, Joyce Tanner had accepted Potlatch’s 1988 assessment rendition document in which Potlatch stated the value of its personal property for assessment purposes at $10,557,600. That figure was based on a method of evaluation approved by Marvin Russell, a former director of the Arkansas Public Service Commission (PSC) Assessment Coordination Division (ACD). When the School District raised the issue, Ms. Tanner felt unqualified to assess the Potlatch property, and she called upon the ACD for assistance.

The Board’s response to the School District’s petition challenging the 1988 Potlatch assessment was to uphold the valuation rendered by Potlatch. On the date of that decision the Board was notified by the ACD that the formula utilized by Potlatch to obtain the assessment figure was too arbitrary to establish fair market value for assessment purposes. The School District filed a complaint with the PSC sitting as the State Equalization Board seeking an independent appraisal of Potlatch’s personal property. The PSC dismissed the proceeding, finding that there was an adequate remedy afforded by the appellate process, but ordered the ACD to investigate assessment practices with respect to property used in manufacturing throughout the State.

The School District then appealed the Board’s decision concerning the 1988 valuation to the County Court which affirmed the decision upholding the Potlatch valuation. An appeal to the Circuit Court was then filed and docketed as CIV 88-99-2AC.

For the 1989 tax year Potlatch engaged a professional appraiser, Gerald Searle, to assist with preparation of its rendition. Ms. Tanner requested the assistance of the ACD in assessing the property. The figures in the rendition recommended by the ACD were accepted by Ms. Tanner resulting in an increase in the valuation and assessment for Potlatch from its valuation of $52,051,585 to $61,487,104.

Potlatch filed a request for adjustment with the Board which adjusted the valuation to the original figure submitted by Pot-latch. The County Court affirmed that decision. An appeal to the Circuit Court was filed and docketed as CIV 89-78-2AC, and the case was consolidated with the appeal of the 1988 assessment.

The Circuit Court (1) held that the 1988 assessment was manifestly arbitrary and ordered reassessment using the method established by the ACD, (2) rejected the methodology applied by Potlatch in it’s 1989 rendition, (3) found the estimate of fair market value based on the ACD’s recommendation for 1989 was not in error, thereby upholding Ms. Tanner’s assessment, and (4) ordered the ACD to assist Ms. Tanner in all future assessments of Potlatch’s property.

Potlatch argues on appeal that the Circuit Court (1) erred in ordering its property reassessed for the 1988 tax year using the ACD method; (2) erred in rejecting the Board’s adjustment of their 1989 assessment; and (3) erred in ordering the ACD to participate in all future assessments of their property. We find no error and affirm.

1. The 1988 reassessment order

a. Waiver

The differences in the method of assessment used by Pot-latch from 1978 to 1988 and that recommended by the ACD and approved by the Circuit Court will be discussed below. To consider Potlatch’s first argument with respect to the 1988 assessment, that of waiver, we need only state that the two methods were substantially different. Potlatch contends the School District may not argue in court in favor of a method of assessment it did not present before the Board.

In support of this waiver argument Acme Brick Co. v. Missouri Pacific Railroad Co., 307 Ark. 363, 821 S.W.2d 7 (1991), an appeal from the Highway Commission, is cited. The Railroad Co. had filed a petition before the Commission to abandon a railroad spur. In the order granting the petition, the Commission stated that Ark. Code Ann. § 23-12-607 (1987) required it to hear and consider all petitions filed with it for the discontinuance of railroad spurs and that Ark. Code Ann. § 23-12-611 (1987) provided the standard of proof to be used in determining whether the spur track should be abandoned. The order also stated that City of Caraway v. Arkansas Commerce Comm’n, 248 Ark. 765, 453 S.W.2d 722 (1970), a case involving abandonment of an agency station, was persuasive and controlling in the matter before the Commission.

Upon receipt of the commission’s order, Acme Brick Co. moved for reconsideration arguing that “[t]he standard of proof relied upon by the Commission was improper because it is the standard of proof for considering an application to discontinue an agency station, rather than abandonment of a spur. The Commissions’ reliance on the standard of proof in Ark. Code Ann. 23-12-611 was legal error.” Because § 23-12-611 and the Caraway case both involved agency stations rather than spurs, Acme Brick Co. claimed the Commission erred in relying on them to determine the standard of proof applicable to the spur petition. We held Acme Brick Co. could not complain in court about the standard of review used by the Commission having failed to inform the Commission of the correct standard.

This case differs in several significant ways. First, Acme Brick Co. could have learned the proper standard of review through legal research. With respect to standards for determining value of property to be assessed, there is no single or “proper” assessment method to be presented. All concede that there are various ways of going about assessing the value of property. The School District’s point was to require use of some method based on actual value in compliance with the Ark. Const, art. 16, § 5.

Second, the ACD had not developed a single formula prior to the 1988 assessment, therefore, there was no single, acceptable method to apply to valuation to proffer.

Finally, with respect to the 1988 assessment, the School District argued Potlatch was not fully disclosing the extent of its personal property, and that the formula it was using resulted in an assessment based upon only 10% of market value. The School District asked both the Board and the County Court to require use of a formula which would arrive at a fair market value in accordance with the Constitution. That was sufficient to apprise these entities of the specific objections raised to the Potlatch valuation.

b. The Russell formula

Next, Potlatch argues that, as the method it used in computing the 1988 figures was supported by substantial evidence in the form of the testimony of Marvin Russell, the Court was required to affirm the Board rather then engage in an assessment of property. Mr. Russell had recommended a formula which permitted Potlatch in its first year of operation to take the actual cost of the property, divide that in half and declare 20 % of that figure as the taxable value, yielding a valuation equal to 10 % of actual cost. This same figure was thus declared each year subject to certain adjustments as equipment changes occurred. Russell testified that this formula would give level expenses for the company, level income for the taxing unit, and would also yield more money than alternative methods. He stated on cross-examination that the 50 % formula was based on the use value rather than market value of the equipment and was directly related to income producing potential.

Potlatch argues that no one testified that this formula produced a valuation unrelated to fair market value, but that is not so. In his deposition, Larry Crane of the ACD specifically said “any way you play it, an arbitrary fifty percent would not reflect fair market value for any but that one coincidental point in time it just happened to really be that.” He continued in his deposition to characterize the 50% formula on a brand new facility as ridiculous. Even Mr. Searles, Potlatch’s expert, testified that the “fifty percent of original cost method employed from 1978 through 1988 is not a recognized method” and the “fifty percent method does not have any acceptance in the world of appraisal.”

This defense of the 50 % valuation ties in with the argument that the Circuit Court erred in substituting the ACD formula for the 1988 tax year because, Potlatch asserts, affirmance of the judgment of the Board and County Court was required if there was any substantial evidence to support it.

Tuthill v. Arkansas County Equalization Board, 303 Ark. 387, 797 S.W.2d 439 (1990), is cited for its description of the agency and judicial roles as follows:

The Assessment Coordination Division of the Public Service Commission is given the power of supervision and control over the several county assessors and boards of equalization and review in order that assessments of property shall amount to true market value. Ark. Code Ann. 26-24-101 and 26-24-102 (1987). To this end, the Assessment Coordination Division annually publishes a manual to be used by county appraisers. That manual recommends the use of three methods to arrive at a true, or market, value. They are (1) comparable sales, (2) capitalization of income, (3) cost less depreciation. It is best that an assessor use two or more of the methods as a gauge of the market value. Board of Equalization v. Evelyn Hills Shopping Center, 251 Ark. 1055, 476 S.W.2d 211 (1972).
Because of the separation of powers doctrine, it is not within the province of state courts to assess property. Cook v. Surplus Trading Co., 182 Ark. 420, 31 S.W. 521 (1930). Courts can only review the assessments and reverse them and send them back to the executive department when they are clearly erroneous, manifestly excessive, or confiscatory. St. Louis - San Francisco Ry. Co. v. Ark. Public Serv. Comm’n, 227 Ark. 1066, 304 S.W.2d 297 (1957). We have said that we will reverse property assessments only in the “most exceptional cases.” Jim Paws Inc. v. Equalization Bd. of Garland County, 289 Ark. 113, 710 S.W.2d 197 (1986). The burden of proof is on the protestant to show that the assessment is manifestly excessive or clearly erroneous or confiscatory.

Potlatch is correct in stating that it is not the province of courts of law to make assessments. That is in the hands of the assessors, the ACD, the equalization boards and finally, the County Courts. However, the review of the Circuit Court is pursuant to Ark. Code Ann. § 16-67-207 (1987) which provides “the circuit court shall proceed to try all appeals from county courts de novo as other cases at law.” The record before the Circuit Court showed beyond debate that the 50% formula was not based on market value and was therefore violative of Ark. Const, art. 16, § 5, which states:

(a) All real and tangible personal property subject to taxation shall be taxed according to its value, that value to be ascertained in such manner as the General Assembly shall direct, making the same equal and uniform throughout the State. No one species of property for which a tax may be collected shall be taxed higher than another species of property of equal value. . . .

Clearly the formula which was the basis for the 1988 valuation was erroneous, and the Circuit Court was correct in remanding the matter for a new valuation based on application of a proper formula as recommended by the ACD.

2. The 1989 assessment

In this argument Potlatch again asserts that the Circuit Court overstepped its constitutional boundaries in rejecting the 1989 adjustment by the Board as affirmed by the County Court. Again cited is authority to the effect that the Circuit Court’s only role is to determine that the rendition is not clearly erroneous, excessive, or confiscatory in concluding that the Court’s order substitutes itself for a purely executive function.

Ms. Tanner had asked for the help of the ACD which then furnished her with a detailed proposed assessment of the Potlatch equipment in accordance with standards published in the ACD manual for assessors of October 1988. It was her duty to follow the ACD recommendation. See Ark. Code Ann. § 26-24-102 (Repl. 1992); Tuthill v. Arkansas County Board of Equalization, supra. Yet the Board and the County Court rejected Ms. Tanner’s assessment, substituting that proposed by Potlatch without comment. The Circuit Court reinstated Ms. Tanner’s assessment. While that goes beyond merely reversing the County Court and remanding for further consideration, it is not the same as assessment of the property by the Circuit Court based upon raw data produced in evidence before it. The Court did not exercise an executive function; it merely recognized and reinstated the original executive decision by determining that the judicial and quasi judicial bodies which had reviewed it were in error.

The Circuit Court had before it testimony of ACD officials explaining the age-life method recommended to Ms. Tanner and the testimony of Mr. Searles explaining the 16-year life method upon which the 1989 assessment figure submitted by Potlatch and adopted by the Board and the County Court was based. Mr. Searles testified that his method was the one being used statewide by other paper mills. On cross-examination, he admitted he had hard (written) evidence only that it was in use by one other paper mill and that his information with respect to other paper mills had been gathered by telephone from people, some of whose names he could not remember. More important, however, the propriety of the Searles method was questioned, and the Circuit Court could well have concluded not only that the ACD method used by Ms. Tanner was a more accurate assessment tool but that the Searle method was clearly erroneous in its determination of value. The Circuit Court correctly noted evidence that the Searles method was to be used only in combination with “trending,” a means of taking into account the state of the economy, a factor not being used with the 16-year life method by Mr. Searles.

Potlatch responds that the failure to include trending is irrelevant because other paper mills using the Searles 16-year life method are not using trending, thus there is uniformity. Our view is that uniformity is, of course, desirable, but it becomes irrelevant when the issue, as in this case, is not equal protection but accuracy of the assessment method to produce that which the Constitution requires, i.e., an assessment based upon the actual value of the property being assessed.

Under these circumstances, we can hardly say the Circuit Court’s determination that Potlatch had not established before the Board or the County Court that Ms. Tanner’s assessment was in error was incorrect. Nor can we say that, to the extent his decision was factual, it was clearly erroneous. Ark. R. Civ. P. 52(a).

3. Participation in future assessments

Potlatch argues the Court erred in ordering the ACD to participate in future assessments of their property. Ms. Tanner clearly indicated her inability to conduct the assessment of Potlatch, and the ACD is charged by statute with the duty to assist and supervise the assessors. The order of the Circuit Court merely states an obligation which already exists. There was no error in the decision.

Affirmed.