author: Annabelle Clinton Imber, Justice. Tom Glaze, Justice, Robert L. Brown, Justice,

text:
    ARKANSAS DEPARTMENT OF HUMAN SERVICES v. R.P.
    97-767
    970 S.W.2d 225
    Supreme Court of Arkansas
    Opinion delivered June 11, 1998
    [Petition for rehearing denied July 9, 1998.]

      Winston Bryant, Att’y Gen., by: Kelly K. Hill, Deputy Att’y Gen., for intervernor.
   Annabelle Clinton Imber, Justice.

In this case, the juvenile court ordered the Department of Human Services to provide adequate housing, including electric and water utilities, to a family adjudicated in need of services. Following a period of time during which the utilities were not turned back on, the trial court held DHS, as well as a DHS employee, Sandi Doherty, in willful contempt of its order. On appeal, DHS argues for various reasons that the trial court lacked the authority to order it to restore the utilities. Additionally, both DHS and Doherty contend that the trial court erred in holding them in contempt of court. We affirm as modified.

The underlying matter began as a probation-revocation proceeding on a juvenile, R.P. At a hearing in the matter on August 5, 1996, Therese P., R.P.’s mother, explained that all utilities in the family home had been shut off. The prosecutor expressed an interest in converting the matter to a family-in-need-of-services petition, as did R.P.’s guardian ad litem. The trial court opined that the revocation petition needed to be dismissed, and that a family-in-need-of-services petition should be filed. The court also stated that DHS would be ordered to provide supportive services and to do a needs assessment for the family. R.P. was released into the custody of her mother. On August 13, 1996, an order was entered dismissing R.P.’s delinquency petition with the notation that “FINS case to be opened with supportive services offered by DHS.” On August 15, a FINS petition was filed by the prosecutor.

At a hearing on September 5, the prosecutor explained that the P. family had gone without water or electricity. R.P. had already missed four-and-a-half days of school, in the prosecutor’s opinion, due to “dire circumstances” including the lack of transportation, electricity, and water. Therese P. testified that they had no electricity or water. She had applied for disability and food stamps. Heather Harper, a DCFS caseworker, stated that DHS could not pay the full amount of the water or utilities, “It’s outrageous.” “We were willing to help, but we can’t pay the full amount.” She had advised Therese P. where she could go for help other than DHS. The trial court concluded the hearing by finding that the P. family was a family in need of services.

At a hearing on September 30, Pam Cooper, Harper’s supervisor, explained that they had tried to help the family, and had provided transportation. They had also tried to put money together on the utilities from community providers, but the bills were several hundred dollars. She stated that it was her understanding that “Judge Reynolds expected us to pay their bills for them. And, I have no way to accomplish that. I’ve talked with my area manager about it, on two different occasions, and there’s just —■ we don’t have the budget to do that. So, we’ve done what we can.”

According to Therese P., the light company would turn her lights back on if she paid half, $268. R.P. told the trial court that the lack of electricity was a problem because the wind-up clock she had did not work well and she was late for school. Harper stated that they had made an arrangement with the medicaid office for transportation, as well as a number of referrals and contacts regarding the utility problems. According to Harper, the water bill was $550, which had been reduced by the water company from $660. Apparently, the home had a leak, leading to high water bills. The guardian ad litem asked R.P. whether she would rather be in a foster home or in her current home without heat and running water, and R.P. expressed that she would rather stay in her current home.

The trial court ultimately stated that it was going to order DHS to pay for having the water and electricity turned back on, explaining that the only alternative was to place R.P. in the custody of DHS. Brian Rogers, a DHS attorney, stated that if DHS was directly ordered to pay something, “I should raise the issue of possible sovereign immunity in ordering a state agency to directly to pay for something, when we’re not actually a party to a case. So, I’ve raised that issue now.” The trial court responded: “Sovereign immunity? Well, perhaps I should clarify the order, somewhat, and direct that [DHS] provide adequate housing for this family, including facilities with water and electricity.” An order entered on September 30 reflects a full review of the FINS matter, and sets a date for the next review. Within “Additional orders” is a handwritten notation providing “[DHS] is to provide adequate housing for the [P. family] — including water and electricity.”

On October 10, DHS filed a motion to set aside this order pursuant to Ark. R. Civ. P. 60(c) and 59(a)(6). In its motion, DHS asserted sovereign immunity, and that “The State, or its agencies, may not be compelled to expend funds not appropriated by the General Assembly of the State of Arkansas.”

At a hearing on October 17, the guardian ad litem raised the issue that court-ordered services had not been provided. Rogers responded that DHS had provided some services. Harper stated that she had made phone calls trying to get funds, and recited what she had done in order to obtain adequate housing. According to Harper it was going to take $400 to get the water turned back on. Therese P. stated that it would take $268 to get the electricity turned back on, but Harper remembered $550. Harper said that $3000 was appropriated to Faulkner County for “prevention of foster care, which is what this would come under.” Freda Cruse-Phiflips, a DHS area supervisor, said that the P. family did not meet the criterion for that money, because the child was not at risk of removal from the home.

The trial court asked Harper what she had done to carry out the September 30 order. She said that she told her supervisor (at the time Pam Cooper), who in turn called the area manager for approval. She got an e-mail back from the area manager, Sandi Doherty, saying not to pay it. Phillips explained that the decision to go outside the boundaries of the “policy” that governs expenditures of state and federal money is left to “Ms. Jones, or to Tom Dalton, or perhaps even the governor,” and one of the primary considerations is whether the child was at risk. From everything she could see, the child was not at risk of removal. The trial court asked whether approval was sought from Dalton, to which Phillips answered no. Phillips later said that if it was $600 or $800, DHS could pay that, but if the bills were $1700, it could not. Harper stated that the bills were over $1300.

The trial court announced that it would issue a show cause order for Doherty for failure to abide by the court’s order. The court asked Rogers if he could accept service. Rogers stated that he would like a copy and he would provide it to Doherty, but he would also like for her to be personally served. The trial court responded “all right[,]” and then stated that “where we need to go from here” is for $668 to get paid to get the utilities turned back on.

The trial court then asked Phillips if there was any reason that DHS was not going to pay the $660 immediately. She responded that it exceeds what she or a county supervisor would be allowed to approve, so it would require Doherty’s approval. Phillips further testified that “her communication that she has by E-mail from — to — to Pam Cooper, as of September the 26th, was that there was no reason to pay this bill. So I’m not sure that it is a matter of amount to her. I will have to get with her and discuss what the Court’s ruling is today and see what we can do.”

The record reflects a show-cause order dated October 30, and filed on November 12, directing Doherty to appear and show cause “on the 21st day of November, 1996, at 2:00 p.m. to show cause why she should not be held in contempt of court and punished accordingly [.]” On November 21, the trial court held a hearing in the matter. Harper testified that she had called numerous agencies regarding the P. family, and had obtained $347 for the AP&L bill: $200 from CAPCA, $71.50 from Red Cross, $21.50 from St. Joe, and $50 from St. Peters. She stated that AP&L would probably turn it back on Monday, pending more proof of disability. Harper testified that they had provided transportation and counseling to R.P. She had taken them an AFDC application, and they were receiving $162 in AFDC and food stamps. R.P. went to a friend’s house for the bathroom. There was no guarantee that Dick Longing, the mortgagee of the P. family home, would not foreclose on the house.

Phillips testified that DHS had not paid the P. family’s rent, nor the water or utility bills, but had provided case work and services to find community providers who could assist. When asked why DHS went “begging and pleading” to community providers for funds, she answered that “[R.P.] did not meet the immediate criteria for any programs that we had to offer her any other kind of assistance.” She did not believe that the court intended for DHS to pay directly, “but to insure that it was paid. And, we’ve made every effort to insure that it would be paid.”

Following this testimony, the trial court denied DHS’s motion to set aside, and then took up a review of the case and the contempt matter. Kay Forrest, from DHS’s office of chief counsel, explained that although Doherty was personally served with the show cause order on “Friday, the 15th,” Tom Dalton, as DHS’s director, should have been served rather than Doherty. The prosecutor stated that “these errors” in service “will be made proper in the next two days, and we can set this case for the hearing that it deserves.” The contempt matter was then continued to December 5. The parties again discussed the issue of whether the utilities were going to be turned back on. The trial court stated that “the previous orders of the Court are in effect. And, for the purpose of clarification, if any is needed, the Department is to provide cash assistance to the family for the purposes of establishing electricity and water to the home in which they are currently living or providing other adequate housing.”

On December 4, the trial court entered an order denying DHS’s motion to set aside, and the record shows that the same day show-cause orders were issued for Doherty, Tom Dalton, Beverly Jones, and Boyd Ward. This show-cause order provided that on September 30, DHS and its agents were ordered to pay cash assistance for electricity and water for R.P. in the home in which she was living or provide other housing. “That to date [DHS] has failed and refused to pay said amounts.” The order directs DHS and its agents, Tom Dalton, Beverly Jones, Boyd Ward, and Sandy Doherty to appear on December 11 to show cause. Although Dalton, Jones, and Ward were personally served with the order (as well as Doherty by telephone), only Ward appeared at the December 11 hearing.

At the hearing on December 11, Kay Forrest stated that DHS funds were used to restore the P. family’s utilities on November 25. Cooper, former DCFS supervisor in Faulkner County, testified that she attended the September 30 hearing. At that time, she understood DHS was ordered to pay the past-due electric bill and the past-due water bill. After the September 30 hearing, she emailed her supervisor, Sandi Doherty, advising that the court had ordered DHS to provide adequate housing. Cooper received an e-mail back instructing her to ask Brian Rogers to file an immediate appeal, and not to pay the bills. Doherty’s e-mail asked Cooper how she and the mother interpreted adequate housing. During a face-to-face conversation with Doherty on October 1, Cooper clarified that she thought the order meant that DHS was to get the electricity and water turned on. In Cooper’s opinion, R.P. was not at risk at the time of the September 30 order.

Phillips testified that sometime on September 30 or thereafter, she became aware of a court order to provide adequate housing, including utilities and water. She told Cooper that R.P. did not meet the criteria for cash assistance and that she would have to go to Doherty to get any kind of waiver to that program. Cooper e-mailed Doherty, and she indicated that she was not to use “those funds” to pay the bills. Phillips was present at the hearing on November 21 when the trial court found that the child was at risk. “Her order” superseded “our policy,” and therefore “we didn’t have any problem accessing the cash assistance by the state and federal mandates we operate under.” Harper testified to her efforts to get third parties to help with the bills. Even prior to any court order, she knew that the policy with regard to payment of bills was to find alternate resources other than cash from DHS. This December 11 hearing concluded with the trial court issuing a body attachment for Doherty, who had not appeared.

On December 16 the trial court took up the contempt matter. Doherty testified regarding an e-mail that Cooper sent her on September 26 concerning R.P.’s case. Cooper sent her another e-mail on September 30. Cooper told her that “Court was today and Judge Baker ordered us to pay the water and electric bill and a plumber to repair the leak that had caused the water bill to be outrageous.” Because Brian Rogers had “brought up some law about ordering the state agency to pay a bill, Judge Baker amended the order to say ‘Provide the family with adequate housing.’” When asked by Cooper what she should do, Doherty responded that she should proceed with community providers and to contact an attorney to file an appeal. Doherty believed that she complied with the order, and that the judge did not mean for DHS to “write a check, to do cash assistance.” She did not tell any of her staff to disobey the order. When the trial court denied DHS’s motion to set aside on November 21, she ordered the bills paid.

Following this December 16 hearing, the trial court entered an order finding that DHS, through Sandi Doherty, willfully and intentionally violated its September 30 order. The court further found that Doherty willfully and intentionally acted with the direct purpose of disobeying the court’s September 30 order. Doherty was found to be in contempt for fifty-three days, constituting fifty-three separate acts of contempt. She was ordered to serve one day in the county prison for each act of contempt.

DHS filed a notice of appeal from the order denying its motion to set aside the September 30 order, as well as from the contempt order. Doherty also filed a belated notice of appeal from the contempt order with permission from this court. Although appellee did not file a brief, the State has intervened and filed a brief in response.

I. DHS’s appeal from the September 30, 1996 order.

A. Standing and timeliness issues.

Intervener suggests that DHS, as a non-party below, lacks the requisite standing to appeal from the September 30 order without having intervened below or initiated an original action in the trial court. Alternatively, intervenor argues that DHS’s notice of appeal from the September 30 order was untimely under the timeliness provisions of Ark. R. Civ. P. 59 and 60 and Ark. R. App. P.—Civ. 4. We reject these arguments and hold that DHS possesses the requisite standing to appeal, and that its notice of appeal was timely filed.

The matter is resolved by Arkansas Dep’t of Human Servs. v. Crunkleton, 303 Ark. 21, 791 S.W.2d 704 (1990), and Arkansas Dep’t of Human Servs. v. Bailey, 318 Ark. 374, 885 S.W.2d 677 (1994), where this court laid down the path for DHS to take when appealing matters in similar circumstances. In Crunkleton DHS attempted to appeal from a judgment awarded against it for disbursements made to it for a child-support arrearage. While we suggested that the award violated principles of sovereign immunity, we dismissed the appeal since DHS was not a party to the litigation below. We held that DHS must first attempt to obtain relief in the trial court. But see In the Matter of Allen, 304 Ark. 222, 800 S.W.2d 715 (1990) (stating that the Crunkleton court faded to follow the “long recognized exception” that a person “pecuniarily affected by a judgment” but not a party may nonetheless bring a direct appeal where the action has been taken without notice to the one complaining).

Crunkleton was followed by Bailey, where this court once again held that DHS was precluded from bringing a direct appeal from an order requiring it to pay for treatment in a FINS case that it had not initiated and was not a party to. Although DHS argued that the case was distinguishable from Crunkleton in that it had filed a Rule 60 motion to set aside, we noted that “DHS has not appealed the denial of its motion to set aside the judgment which would have been the proper procedure.” Bailey, supra.

In the present case, DHS has followed the “proper procedure” prescribed by this court in Bailey. It first sought relief from the trial court by filing a motion to set aside following the September 30 order. While intervenor suggests that this motion should have otherwise been governed by the timeliness provisions of Rule 59 and 60, the fact remains that DHS was never a “party” to the underlying action for purposes of those rules. Pursuant to Bailey, it had no final judgment to appeal from until the trial court entered an order denying its motion to set aside. Under the circumstances of this case, we conclude that DHS has standing and has filed a timely notice of appeal from the trial court’s order denying its motion to set aside the September 30 order.

B. Statutory authority.

DHS first contends that the trial court’s September 30 order did not comply with the juvenile code. It cites us to its policy “VC,” and Ark. Code Ann. § 9-27-303(17) (Repl. 1993), which provides a list of instances in which “family services” may be provided:

“Family services” means relevant services, including, but not limited to: child care; homemaker services; crisis counseling; cash assistance; transportation; family therapy; physical, psychiatric, or psychological evaluation; counseling; or treatment, provided to a juvenile or his family. Family services are provided in order to:
(A) Prevent a juvenile from being removed from a parent, guardian, or custodian;
(B) Reunite the juvenile with the parent, guardian, or custodian from whom the juvenile has been removed; or
(C) Implement a permanent plan of adoption, guardianship, or rehabilitation of the juvenile.

DHS contends that none of the three criteria for family services were met in this case.

To the contrary, at the September 30 hearing, the trial court unequivocally stated that it was ordering services to prevent R.P. from being removed from her mother. “Well, I think I’m going to order the Department to pay for having the water and electricity turned back on. The only alternative is to take R.P. into custody of the Department.” This conclusion was supported by evidence of the detrimental effect of R.P.’s living conditions. The evidence to that point established that the P. family still had no water or electricity at the house. DHS did not dispute the trial court’s finding that R.P. was a member of a family in need of services, and Cooper stated at the September 30 hearing that DHS would “certainly” put R.P. in a foster home “if [the trial court] want[ed] to put her in a foster home.” The prosecutor at one point suggested that R.P. was not able to bathe and present herself appropriately for school. In sum, the trial court’s order did not exceed the statutory criteria for family services as set forth in Ark. Code Ann. § 9-27-303(17) (Repl. 1993).

An implicit facet of DHS’s argument seems to be that the September 30 order was defective because the trial court failed to make written findings in accordance with Ark. Code Ann. § 9-27-328(a) (Repl. 1993), which requires that the court order family services appropriate to prevent removal before removing the juvenile from the custody of her parent. It is clear that the statute requires specific findings only when the court orders actual removal from a custodial parent. Thus, we decline to hold that the trial court’s order was defective under Ark. Code Ann. § 9-27-328 (Repl. 1993).

With regard to DHS’s contention that the trial court’s order did not comport with its policy, this court has previously held that the juvenile court’s orders do not have to comply with DHS policy. See Arkansas Dep’t of Human Servs. v. Clark, 304 Ark. 403, 802 S.W.2d 461 (1991) (“Clark I”) (there is nothing in the juvenile code “that even arguably requires the juvenile court to fashion its orders within the policy guidelines of DHS”). Significantly, the record does not show that DHS could not have paid the bills at the time of the September 30 order. See Clark I, supra (trial court did not order DHS to disburse a greater amount: than the maximum allowable under its policy — DHS did not claim that funds were unavailable and did not offer evidence of such). There were funds available to pay the bills, but it was DHS’s position that paying the bills would be to the detriment of other families in need of the same money. Based on these circumstances, the trial court did not exceed its statutory authority in its September 30 order.

C. Constitutionality of the September 30 order.

1. Sovereign immunity.

When DHS first moved to set aside the trial court’s September 30 order, it argued that it was entitled to assert sovereign immunity and could not be made a defendant without waiving sovereign immunity. On appeal, DHS argues that the trial court’s order coerced DHS into bearing a financial burden, which is barred by the doctrine of sovereign immunity. While intervenor suggests that this argument was not made below, our review of the record shows that the issue was sufficiently developed. Additionally, we decline to find, as intervenor suggests, that sovereign immunity has been waived simply because the prosecutor filed the FINS petition here. DHS was never the initial moving party in these proceedings. See Arkansas Dep’t of Human Servs. v. State, 312 Ark. 481, 850 S.W.2d 847 (1993).

However, we nonetheless find that there is a waiver of sovereign immunity under the circumstances presented. This court has recognized an exception to the doctrine of sovereign immunity where an act of the legislature has created a specific waiver of immunity. See State of Arkansas Office of Child Support Enforcement v. Mitchell, 330 Ark. 338, 954 S.W.2d 907 (1997); State v. Tedder, 326 Ark. 495, 932 S.W.2d 755 (1996). Unlike the statutes at issue in Arkansas Department of Human Servs. v. State, 312 Ark. 481, 850 S.W.2d 847 (1993), or Arkansas Dep’t of Human Servs. v. Crunkleton, 303 Ark. 21, 791 S.W.2d 704 (1990), the Juvenile Code expressly empowers the court to order cash assistance in FINS cases. When a family is found to be in need of services, the court may order “family services.” Ark. Code Ann. § 9-27-332(1) (Repl. 1993). The following are included within the definition of “family services”:

“Family services” means relevant services, including, but not limited to: child care; homemaker services; crisis counseling; cash assistance; transportation; family therapy; physical, psychiatric, or psychological evaluation; counseling; or treatment, provided to a juvenile or his family. Family services are provided in order to:
(A) Prevent a juvenile from being removed from a parent, guardian, or custodian;
(B) Reunite the juvenile with the parent, guardian, or custodian from whom the juvenile has been removed; or
(C) Implement a permanent plan of adoption, guardianship, or rehabilitation of the juvenile.

Ark. Code Ann. § 9-27-303(17) (Repl. 1993) (emphasis added). A FINS petition may be initiated by any adult. Ark. Code Ann. § 9-27-310(b)(3)(A) (Repl. 1993). Before a juvenile may be removed from a parent, the court is required to order family services appropriate to prevent removal. Ark. Code Ann. § 9-27-328(a) (Repl. 1993).

Given that the trial court is empowered to order family services in FINS cases to prevent a juvenile from being removed from a parent, which by definition includes cash assistance, we conclude that the General Assembly’has specifically waived sovereign immunity as to DHS in such instances. Any other interpretation would effectively eviscerate the court’s power to order family services in FINS cases. This is especially true considering that a FINS case may be initiated by “any adult,” where DHS will not be the initial moving party. Such a consequence could not have been intended by the General Assembly in enacting the Juvenile Code.

2. Separation of powers.

DHS also argues that the September 30 order violated separation of powers, but we decline to reach the merits given that this theory was not sufficiently raised or developed below with respect to setting aside the September 30 order. See Stricklin v. Hays, 332 Ark. 270, 965 S.W.2d 103 (1998) (supp. opinion on denial of reh’g, Ark. slip op. May 7, 1998). DHS concedes that its motion to set aside “did not discuss the doctrine of separation of powers by name or at any length,” but asserts that its separation of powers issue is preserved by the language in its motion and amended motion to set aside that “both the State and its agencies may not be compelled to expend funds not appropriated by the General Assembly of the State of Arkansas.” However, our review of the record shows that DHS’s separation of powers argument on appeal was not presented to the trial court. Based on the foregoing, the trial court did not abuse its discretion in denying DHS’s motion to set aside the September 30 order.

II. DHS’s appeal from the contempt order.

A. Due Process.

DHS first argues that the trial court erred in holding it in contempt because its orders did not conform with constitutional requirements of due process. DHS essentially makes two separate arguments, the first is that the September 30 order was indefinite as to the obligations imposed upon DHS, and second that the trial court’s show-cause orders were insufficient to give it notice.

DHS primarily relies on Gatlin v. Gatlin, 306 Ark. 146, 811 S.W.2d 761 (1991), and Arkansas Dep’t of Human Servs. v. Gruber, 39 Ark. App. 112, 839 S.W.2d 543 (1992). In Gruber DHS argued that the trial court erred in holding it in contempt after one of its representatives failed to appear at a placement hearing. The court of appeals rejected DHS’s jurisdictional argument. “Even one not a party to an action, who has been served with an order, or who has notice of it, may be held in contempt of the order. [Citation omitted.] Before a person may be held in contempt for violating a court order, the order must be in definite terms as to the duties imposed upon him and the command must be expressed rather than implied.” Id. The DHS representative there was given notice in open court, as well as in writing, of the date and time to appear for the placement hearing. “One who has full knowledge of a court order and its import, as DHS did, cannot flout it with impunity.” Id. In Gatlin this court similarly reiterated that a person may not be held in contempt for violating a court order unless the order is definite in its terms as to the duties imposed upon the person and the command must be express rather than implied.

We reject DHS’s argument that the September 30 order was somehow vague as to the obligations imposed upon it. The order provided that “Dept, of Human Services is to provide adequate housing for the [P. family] — including water and electricity.” The evidence shows that DHS knew that the purpose of the order was for it to restore utilities to the P. family home. At the September 30 hearing, Cooper stated that “Judge Reynolds expected us to pay their bills for them. And, I have no way to accomplish that. I’ve talked with my area manager about it, on two different occasions, and there’s just — we don’t have the budget to do that. So, we’ve done what we can.” Cooper later testified at the December 11 hearing that it was her understanding that the court ordered DHS to pay the past-due electric bill and the past-due water bill. This was communicated to Doherty via e-mail, who responded with instructions to contact an attorney to file an appeal, and to not pay the bills. She also had a conversation with Doherty where she explained that she thought the order meant that DHS was to get the electricity and water turned on. Although the September 30 order does not mention cash assistance, DHS knew that it was to restore the utilities within a reasonable amount of time.

We also find meritless DHS’s claim that its notice of the show-cause hearing was constitutionally deficient. Arkansas Code Annotated § 16-10-108 (Repl. 1994), governing the court’s power to punish for criminal contempt, provides in part that “the party charged shall be notified of the accusation and shall have a reasonable time to make his defense.” This court has also held that the Due Process Clause, as applied in criminal proceedings, requires that an alleged contemnor be given notice of the charge of contempt pending against him and to be informed of the specific nature of the charge. Fitzhugh v. State, 296 Ark. 137, 752 S.W.2d 275 (1988). In Fitzhugh this court reversed a criminal contempt finding imposed upon an attorney where the attorney never received notice that he was charged with contempt.

While DHS makes much of the fact that it received no written notice of the first scheduled show-cause hearing on November 21, the fact remains that it was served on December 6 with the show-cause order directing it to appear for the December 11 hearing. This order provided “That on the 30th day of September, 1996, [DHS] and its agents were ordered by this court to pay cash assistance for electricity and water for R.P. in the home in which she is living or to provide other adequate housing. That to date [DHS] has failed and refused to pay said amounts.” Under these circumstances, we hold that DHS received notice comporting with due process and the requirements of Ark. Code Ann. § 16-10-108.

B. Sufficiency of the evidence.

Here DHS argues that the trial court erred in finding that its actions were willful and constituted contempt beyond a reasonable doubt. This point is in actuality a challenge to the sufficiency of the evidence on the contempt finding. In a criminal contempt proceeding, proof of contempt must exist beyond a reasonable doubt. Jolly v. Jolly, 290 Ark. 352, 719 S.W.2d 430 (1986). On appellate review, we consider the evidence in the light most favorable to the trial court’s decision concerning the contempt and affirm if there is substantial evidence to support its decision. Arkansas Dep’t of Human Servs. v. Clark, 305 Ark. 561, 810 S.W.2d 331 (1991) (“Clark II’).

Clark II is illustrative on this point. The contempt finding at issue there involved DHS’s failure to comply with an order of the trial court to provide transportation to a family and to provide the remainder of available preventative funds. With regard to the transportation issue, the evidence showed that there had been a two-month delay in obtaining bus tokens without justification. With respect to the disbursements, the evidence showed that DHS was aware that certain cash disbursements were ordered, but explained that payment of the money was not in compliance with agency policy and could result in an audit leading to a penalty of funds reduction. DHS additionally explained that it thought that its staff was under the impression that the case was on appeal and assumed a stay order had been obtained. The trial court found DHS in contempt, rejecting DHS’s argument that it did not act “willfully.” The trial court stated that “there are various degrees of willful as there are various types of being willful, and I think in an agency this big, you’re going to have some lags in time, and we understand that. What I’m concerned with is, I think the agency just deliberately did not do very much to comply with the Court’s order until pretty much the eleventh hour.” Id.

The Clark II court affirmed, observing that the trial court’s statement was not an “inapt characterization of the proof offered by DHS to explain its inaction, and while it may not have been motivated by rancor, neither was it inadvertent.” Id. There was substantial evidence to support the trial court’s finding that DHS was in willful contempt. “It was undisputed the order was not complied with and we find no basis for disagreement with the conclusion of the trial court that DHS’s failure to act constituted willful contempt.” Id.

In the present case, the substance of DHS’s argument is that there was no willful noncompliance with the trial court’s order because it made ongoing attempts at compliance, and that it never intended to disobey the court order. In particular it highlights Harper’s efforts to obtain support for the P. family from community providers. Given these “alternative methods” made until the motion to set aside was heard, it reasons that “their efforts could never be defined as willful disobedience.”

We disagree. As already discussed above, DHS understood the trial court’s order to require it to restore the utilities. Nonetheless, Doherty specifically informed Cooper not to pay the bills. The very fact that DHS immediately took the position that its own funds could not be used to pay the bills substantiates the notion that it knew it was to pay the bills with its own funds if it could not otherwise restore the utilities. While the evidence showed that Harper made efforts to obtain funds through community providers, the fact remains that the bills were not paid until the end of November.

While DHS “may not have been motivated by rancor,” neither was its failure to pay the bills “inadvertent.” Cf. Clark II, supra. Considering the evidence in the light most favorable to the trial court’s decision concerning the contempt, the trial court had substantial evidence before it with which to conclude that DHS was in willful contempt of its order.

C. Separation of powers.

DHS also argues that the trial court erred in finding DHS in contempt due to the doctrine of separation of powers. Its contention is that the trial court usurped the executive branch’s power of allocating and disbursing resources for family services which were appropriated by the legislative branch. We agree with intervenor that we are precluded from reaching the merits of this point as it is in substance an attack on the underlying order. In Carle v. Burnett, 311 Ark. 477, 845 S.W.2d 7 (1993), this court stated that “the law is long setded — where the failure or refusal to abide by an order of the court is the issue, we do not look behind the order to determine whether the order is valid.” Because DHS is merely attempting to challenge the underlying order here, we decline to set aside the contempt finding based on separation of powers.

D. Judicial Bias.

Finally, DHS argues that the contempt order should have been set aside due to instances of bias on the part of the trial court. In its brief it writes that the trial judge “should have recused herself from the contempt hearings on December 11 and 16, 1996, as requested in [DHS’s] motion to amend brief and judgment.”

While DHS points to a number of actions by the trial court which DHS contends reflect judicial bias and should have resulted in the trial court’s recusal, we deal only with the instance actually brought to the trial court’s attention. See Franklin v. State, 314 Ark. 329, 863 S.W.2d 329 (1993) (issue of bias may not be raised on appeal absent objection below). In its motion to amend judgment filed on February 10, 1997, DHS argued that the January 31, 1997 order should be set aside under Rule 59(a)(1) in order to prevent a miscarriage of justice. Majore Kesl, an attorney for the Office of Chief Counsel, submitted an affidavit in which she stated she was present with the trial court on December 10, 1996, when the court reporter informed the trial court during an in-chamber conference that Doherty was out of the state and would not be at the upcoming hearing. The trial court’s response was to comment that she was going to have to put Sandi Doherty in jail. DHS argued in their motion that the trial court had pre-judged the case and should have recused from the December 11 contempt hearing.

Judges must refrain from presiding over cases in which they might be interested and must avoid all appearance of bias. Reel v. State, 318 Ark. 565, 886 S.W.2d 615 (1994). To decide whether there was an abuse of discretion, we review the record to determine if any prejudice or bias was exhibited. Id. The question of bias is usually confined to the conscience of the judge. Noland v. Noland, 326 Ark. 617, 932 S.W.2d 341 (1996). Judges are presumed to be impartial, and the party seeking disqualification has the burden of showing otherwise. Turner v. State, 325 Ark. 237, 926 S.W.2d 843 (1996).

While we are inclined to hold that DHS failed to even preserve this issue due to a failure to timely object at the first opportunity, we nonetheless affirm on the merits as the alleged instance of bias is not enough to warrant the trial court’s recusal. While it certainly evinces displeasure and frustration on the part of the trial court, we cannot say that the trial court erred in denying DHS’s motion to amend judgment on grounds of judicial bias.

III. Sandi Doherty’s appeal from the contempt order.

A. Jurisdiction of the trial court.

As with DHS, Doherty also argues that the trial court erred in finding her in contempt in that the September 30 order was indefinite as to any obligations imposed upon her individually, and that she never received sufficient notice of the show-cause hearing. While it is true that Doherty is not named in the September 30 order, we have no hesitation in holding that the order was in definite terms as to the duties imposed upon Doherty, and the command was express rather than implied. See Henry v. Eberhard, 309 Ark. 336, 832 S.W.2d 467 (1992); Gruber, supra. The evidence clearly shows that Doherty had knowledge of the September 30 order, and that she specifically instructed her subordinate not to pay the bills with DHS funds. Water and electricity were not provided to the P. home until late November. One who has full knowledge of a court order and its import cannot flout it with impunity. See Gruber, supra.

Doherty also argues that the contempt finding should be reversed because she did not receive adequate notice of the show-cause hearing. She primarily chooses to emphasize the fact that she was not personally served with the show-cause order for the hearing on December 11. An affidavit from an officer with the White County Sheriff s office shows that he served a subpoena on Doherty “by telephone,” explained the subpoena to her, and told her the court date. Doherty reasons that she was never personally served, and thus the trial court never obtained personal jurisdiction over her.

Again, we reiterate that this was a criminal contempt proceeding to which the service provisions of the rules of civil procedure do not apply. We also reject Doherty’s intimation that this situation is governed by the rule governing service of a criminal summons, Ark. R. Crim. P. 6.3. Instead, the governing provision is Ark. Code Ann. § 16-10-108, which sets forth the court’s power to punish for criminal contempt and provides in part that “the party charged shall be notified of the accusation and shall have a reasonable time to make his defense.” Moreover, the Due Process Clause requires that an alleged contemnor be given notice of the charge of contempt pending against him and be informed of the specific nature of the charge. See Fitzhugh v. State, supra.

Under the particular facts of this case, we hold that Doherty had notice of the accusation that otherwise comported with the requirements of section 16-10-108 and due process of law. She was personally served with the first show-cause order for the hearing on November 21. Although this order did not describe the offense or the order that was violated, Doherty was present at that hearing where the contempt matter was discussed. Additionally, she was informed by telephone of the date of the December 11 show-cause hearing. Given these facts, Doherty obviously had actual notice of the offense and a reasonable time to prepare her defense.

B. Judicial bias.

Doherty asserts a similar argument as DHS (she apparently joined in DHS’s motion to amend judgment filed below) and alleges that bias on the part of the trial court necessitates that the contempt order be set aside. For the same reasons expressed as to DHS above, we affirm the trial court here.

IV. The contempt sentence.

Finally, we take note of Doherty’s sentence. We have recognized that the principal justification for contempt lies in the need for upholding public confidence in the majesty of the law and in the integrity of the judicial system and “when we have found these ends will be met despite a reduction or even a remission of a jail sentence for contempt it has been our practice to modify the judgment.” Carle v. Burnett, 311 Ark. 477, 845 S.W.2d 7 (1993) (quoting Garner and Rosen v. Amsler, 238 Ark. 34, 377 S.W.2d 872 (1964)); see also Page v. State, 266 Ark. 398, 583 S.W.2d 70 (1979); Dennison v. Mobley, 257 Ark. 216, 515 S.W.2d 215 (1974). Given the circumstances of this case, in which Doherty’s authority as area manager for DHS was limited to implementation of DHS policy set by senior officials at DHS, some of whom were served with the December 4 show-cause order but did not appear at the December 11 hearing, we are convinced that the ends of justice do not require that Doherty be confined to jail for the length of time imposed by the trial court. Accordingly, we remit the jail sentence to two days to reflect Doherty’s shared culpability in the matter.

Affirmed as modified.

Glaze, J., concurring.

Arnold, C.J., Brown and Thornton, JJ., concurring in part; dissenting in part.

Tom Glaze, Justice,

concurring. I agree with the majority opinion, but write to mention what it further suggests, but does not say. First, it must be emphasized that the trial court in this matter had litde other choice than to exercise its power of contempt when a person willfully refused to comply with the court’s order directing the person to comply with the law. Here, Doherty, as an area manager of DHS, countermanded the trial court’s order by telling case worker Heather Harper not to pay the family’s utilities even though DHS had sufficient funds to pay the utilities. While the trial court was within its power to use its criminal contempt authority to punish Doherty for her disobedience of the court’s order, I think it would have been more appropriate in these circumstances to have compelled Doherty’s and DHS’s compliance through the trial court’s civil contempt power — which brings me to the real point of this concurrence.

While Doherty certainly was a party to the willful disobedience of the trial court’s order, the then-DHS Director, Tom Dalton, and three other officials had been ordered to show cause why they should not be found in contempt as well. None of these officials appeared, although they were personally served. Unfortunately, by the trial court’s failure to compel these officials’ appearance, the trial court sent the mixed signal that only subordinates, and not high-ranking officials, are answerable for department

In my view, the three ranking DHS officials who were served with a show-cause order should have been made to appear and explain why they adhered to a policy that contravened the court’s directives. Because these officials appear to have shared in DHS’s willful refusal to abide by the trial court’s order, it is only fair that Doherty not be saddled with the entire brunt of the punishment. Therefore, I agree with the majority’s substantial remittance of the sentence rendered in this case.

Robert L. Brown, Justice,

concurring in part; dissenting in part. I agree with the majority opinion except for the contempt sanction imposed. The majority affirms sending a mid-level bureaucrat to jail for following DHS policy which conflicted with the trial court’s order. I cannot agree with putting Sandi Doherty in jail under these circumstances. For that reason, I dissent.

This is the first time, according to my research, that this court has jailed an agency employee who was acting under fixed agency policy which she had no authority to supersede. And while I heartily agree that court orders cannot be flouted and must be obeyed subject to sanctions, I seriously question whether the trial court and this court are punishing the right person. Indeed, this whole affair suggests that Ms. Doherty has been made the scapegoat.

DHS policy limited cash assistance paid by the department to cases of child abuse or neglect — children who were “at risk.” Initially, R.P.’s situation fell into neither category. Ms. Doherty did not adopt the policy, but she unquestionably was placed on the horns of a dilemma. Either she followed agency policy or the trial court’s directive to “provide” for the water and electricity. She testified that she believed she was complying with the court’s order by garnering charitable aid from community providers to meet R.P.’s needs. The trial court perceived this to be in direct violation of the original order, and she was sanctioned with 53 days to serve in jail.

My only grievance with the outcome goes to the severity of the sanction under these facts. In Arkansas Dept. of Human Servs. v. Clark, 305 Ark. 561, 810 S.W.2d 331 (1991), we merely fined “DHS” $250 for the failure of a DHS employee to follow court orders regarding cash assistance for bus fares. Now, we make the quantum leap of jailing a DHS underling who implemented the offending policy and had no authority to contravene it.

In my judgment, the trial court should have followed through on its initial instincts and brought the policymakers of DHS into court, including the Director, who at the time was Tom Dalton. The trial court issued a show-cause order for senior officials on December 4, 1996, but faded to fodow up on it. Only the director and perhaps one or two others could overrule fixed policy. Ms. Doherty could not.

Here, it appears that we are jading a lieutenant for a general’s offense. The majority, no doubt, has simdar qualms, and that is why the jad time for Ms. Doherty has been remitted from 53 days to 2 days. Even with 2 days the stigma and humiliation of being jaded attaches. I think this new get-tough policy toward DHS functionaries could have been enforced just as wed by assessing a meaningful fine against her or, indeed, against DHS itself.

For these reasons, I dissent from that part of the majority opinion sentencing Ms. Doherty to jad.

Arnold, C.J., and Thornton, J., join.

       In 1997, the General Assembly substantially amended the Juvenile Code. We provide citations to the statutes in effect at the time the case was decided below.

       DHS intersperses its constitutional argument with the notion that the service of process provisions of the Rules of Civil Procedure should have applied to the show-cause order. There can be no doubt that the proceedings in the present case were for criminal contempt. The purpose of a criminal contempt proceeding is to preserve the power and vindicate the dignity of the court and to punish for disobedience of its order. Fitzhugh v. State, 296 Ark. 137, 752 S.W.2d 275 (1988). By comparison, civil contempt proceedings are instituted to preserve and enforce the rights of private parties to suits and to compel obedience to orders made for the benefit of those parties. Here the trial court was punishing DHS for disobedience of its order, and the service provisions of the Rules of Civil Procedure are simply inapplicable.

       The case worker and Doherty apparently were following department policy in declining to use budgeted cash assistance funds to pay the family’s utilities. The case worker, though, tried to obtain monies from other independent sources, but failed.

       Civil contempt would have availed Doherty the opportunity to comply with the court’s order or present evidence, if any, why she could not comply with court directives, e.g., whether she was ordered by supervisors not to pay cash assistance. The dissent incorrectly suggests Doherty was acting under fixed agency policy which she had no authority to supersede. If this were true, Doherty should have presented it in her defense. She did not, and this court is in no position to surmise on whether or not she was compelled to follow a DHS policy that contravened the trial court’s order.


source: Caselaw Access Project

author: Annabelle Clinton Imber, Justice.

license: Public Domain

text:
    Sue THOMPSON v. Florence E. ROBERTS
    97-1150
    970 S.W.2d 239
    Supreme Court of Arkansas
    Opinion delivered June 11, 1998

      Thurman, Lawrence & Heuer, P.L.C., by: Sam Heuer, for appellant.

      David C. Schoen and Thomas N. Kieklak, for appellee.
   Annabelle Clinton Imber, Justice.

This is an illegal-exaction case where appellants, various residents and taxpayers of Devalls Bluff, sought recovery of a portion of the salary paid to appellee while she acted as both the mayor and bookkeeper of Devalls Bluff The trial court found that appellants failed to meet their burden of proof. We conclude that this ruling was erroneous, and we reverse and remand for further proceedings consistent with this opinion.

On November 22, 1995, appellants, various citizens and taxpayers of Devalls Bluff, filed a complaint in Prairie County Circuit Court against the appellee, Florence Roberts. They alleged that Roberts, while serving in her capacity as Mayor of Devalls Bluff, unlawfully exacted tax monies belonging to the city while serving in a part-time job as bookkeeper for the city. Appellants attached a report from the Legislative Joint Auditing Committee which showed that Roberts obtained $22,850 in total bookkeeper’s salary during these years. The report noted that Roberts’s salary payments as both mayor and bookkeeper were in conflict with Attorney General Opinion No. 93-177. Appellants sought a judgment in that amount against Roberts.

On March 20, 1997, the trial court held a hearing in the matter. Florence Roberts testified that she served as mayor from February 1991 through February 1994. During that time, she received a $150 monthly salary for that position. She also served as bookkeeper, which “involved” bookkeeping for the water and sewer company, the “street,” and “general fund.” She was compensated separately as a bookkeeper while serving as mayor. She had served as bookkeeper as early as 1986, while her husband was mayor, including at the time of his death in January 1991. According to Roberts, the position was approved by the city council, and the council had discussed the issue of dual capacity before August 1993.

Roberts claimed she did not know that she could not serve in both capacities until the legislative audit. After August 1993, Roberts waived compensation as a bookkeeper and received only the $150 monthly salary for the mayor’s position. She still performed bookkeeping services from August 1993 to mid-1994, while she trained her replacement.

A1 Simmons was a council member at the time when Roberts was appointed mayor, and continued until the time she was defeated. He became aware that Roberts was drawing a dual salary when a citizen brought it to the attention of the council. Simmons testified that the council had several discussions concerning the matter: “We were trying to get someone to take an interest in it, someone to advise or someone to take official action and do something about it if it were illegal, that’s something we could not do. We made several attempts to do that with several officials, and also it was known to Mrs. Roberts, and we could get nothing done about it.” Up until the time that Roberts discontinued drawing two salaries, she never expressed a willingness to forego pay as a bookkeeper in a city council meeting. When asked “Was Mrs. Roberts’s pay or salary or position ever approved by the city council as bookkeeper,” he responded that “I personally do not know if it ever was. It certainly wasn’t in my presence.”

Roberts called one witness, June Gresham. She had been a councilman since 1993. At that time she was aware that Roberts was drawing salary as the mayor and as a bookkeeper. When asked whether she approved expenditures for the salary or wages for bookkeeper, she answered “It may not have been listed each month, but we knew what, or at least I did, I can’t speak for anyone else, but I did know that that’s one of the checks that she received was for bookkeeper.” She became aware that the dual capacity may have been improper “from discussion,” although “[t]hat was never brought to the floor.” When she found out, she went to the Municipal League and talked to Bill Fleming, “and he said if you approve these bills and that is part of the bills, then it’s in a second class city, there was no problem.”

Following the close of all evidence, the trial court took the matter under advisement. On April 3, 1997, the trial court entered “Findings of Fact and Conclusion[s] of Law.” The trial court found that Roberts was both mayor and bookkeeper, and was paid for both positions, from February 1991 to August 1993. After this time she waived her salary as bookkeeper. It found that the council knew or should have known that Roberts was serving in both positions and was paid for both jobs. “No wrongdoing other than performing two jobs has been alleged or proven. No complaint was made about the job the Defendant was doing in either position. The only adverse statement was that the two jobs should have been about the same and there should have only been one salary.” Once Roberts was apprised by the State Auditor that holding both positions appeared to be a conflict of interest, she gave up her salary as bookkeeper, and hired a replacement in July 1994. Roberts worked as bookkeeper but went unpaid from August 1993 to July 1994. “Plaintiffs seek to require Defendant to refund the money Defendant received as bookkeeper only because the Auditor’s letter said there appeared to be a conflict. Plaintiffs failed to carry their burden of proof. The Complaint should be dismissed.”

For reversal, appellants advance two separate theories why Roberts was prohibited from holding both positions. The first is based on Ark. Code Ann. § 14-42-107 (Repl. 1998), governing the interest of city council members in offices or contracts. The other is based on the common-law doctrine of incompatibility, as developed in our cases.

We address the common-law theory first. In Rogers v. Sangster, 180 Ark. 907, 23 S.W.2d 613 (1930), and later in Davis v. Doyle, 230 Ark. 421, 323 S.W.2d 202 (1959), this court described the common-law rule of incompatibility as follows:

At common law, and generally under statutory enactment, it is now established beyond question that a contract made by an officer of a municipality with himself, or in which he is interested, is contrary to public policy, and tainted with illegality; and this rule applies whether such officer acts alone on behalf of the municipality, or as a member of a board or council. Neither the fact that a majority of the votes of a council, or board, in favor of the contract are cast by disinterested officers, nor the fact that the officer interested did not participate in the proceedings, necessarily reheves the contract from its vice. The facts [sic] that the interest of the offending officer in the invalid contract is indirect, and is very small, is immaterial. The statutory prohibition is frequently so wide in its terms as to prohibit any officer from contracting with the municipality, whether he takes part in the making of the contract or not.

In Rogers, supra, we reasoned that “[m]unicipal officers are held by the courts to a strict accountability in their dealings with or on behalf of the municipal corporation; and in recognition of their incapacity to serve two masters, as an incident to the frailty of human nature, public policy has placed a disability to make a contract for the city where they are interested in it in any degree. The rule is so inflexible that no inquiry into their good or bad intention or to the fairness or unfairness of the contract is permitted.” The Rogers court thus struck down an ordinance which authorized the mayor and a majority of the board of alderman to “take over” the waterworks and electric light plant. Similarly, in Davis, supra, this court held that the mayor of Hoxie could not also serve as the manager of the sewer and waterworks system. This “double role” was “inconsistent and incompatible.” Davis, supra. In Tappan v. Helena Federal Savings & Loan Ass’n, 193 Ark. 1023, 104 S.W.2d 458 (1937), we explained the rule that “[t]he inconsistency, which at common law makes offices incompatible . . . lies rather in the conflict of interest, as where one is subordinate to the other, and subject in some degree to the supervisory power of its incumbent, or where the incumbent of one office has the power to remove the incumbent of the other or to audit the accounts of the other.” Byrd v. State, 240 Ark. 743, 402 S.W.2d 121 (1966), expounded on Tappan, stating that “incompatibility exists where there is a conflict of interests, which includes, inter alia, where one office is subordinate to the other.”

Based on the foregoing principles, we hold that the trial court erred in finding that appellants failed to carry their burden of proof. While the trial court found that appellants had proved no wrongdoing except “performing two jobs,” it is that very inconsistency which is the basis of the incompatibility doctrine. One commentator has explained, “Incompatibility arises, therefore, from the nature of the duties of the offices, when there is an inconsistency in the functions of the two, where the functions of the two are inherently inconsistent or repugnant, as where the antagonism would result in the attempt by one person to discharge the duties of both offices, or where the nature and duties of the two offices are such as to render it improper from considerations of public policy for one person to retain both.” Eugene McQuillin, 3 The Law of Municipal Corporations § 12.67 (3d ed. 1990). In the present case, common sense dictates that the bookkeeper for the city would to some degree be subject to the supervisory power of the mayor. See Tappan, supra. This is true despite express statutory authority providing for the supervisory power of mayors in cities of the first class, see Ark. Code Ann. § 14-43-504 (Repl. 1998), and the lack of such an express statement of power for mayors in cities of the second class such as Devalls Bluff.

Our conclusion is bolstered by reference to Ark. Code Ann. § 14-42-107. The statute provides in full:

(a) (1) No alderman or member of any council of a municipal corporation shall, during the term for which he shall have been elected or one (1) year thereafter, be appointed to any municipal office which was created or the emoluments of which shall have been increased during the time for which he shall have been elected.
(2) No alderman or council member shall be appointed to any municipal office, except in cases provided for in this subtitle, during the time for which he may have been elected.
(b) (1) No alderman or council member shall be interested, directly or indirectly, in the profits of any contract for the furnishing of supplies, equipment, or services to the municipality unless the governing body of the city shall have enacted an ordinance specifically permitting aldermen or council members to conduct business with the city and prescribing the extent of this authority.
(2) The prohibition prescribed in this subsection shall not apply to contracts for the furnishing of supplies, equipment, or services to be performed for a municipality by a corporation in which no alderman or council member holds any executive or managerial office, or by a corporation in which a controlling interest is held by stockholders who are not aldermen or council members.

Ark. Code Ann. § 14-42-107 (Repl. 1998). While the statute by its express terms applies only to council members or aldermen, we have previously held that this statute is equally applicable to mayors. See Davis v. Doyle, 230 Ark. 421, 323 S.W.2d 202 (1959). Under the plain language of the statute, it is apparent that Roberts’s position as bookkeeper may be seen as an interest in the profits of a contract for the furnishing of services. Such an interest is prohibited by section 14-42-107 (b)(1) absent an authorizing ordinance.

We also reject Roberts’s suggestion that the current statute’s omission of a reference to “jobs” is an abrogation of the common law here. See Ark. Stat. Ann. § 19-909 (“nor shall any Alderman or member be interested, directly or indirectly, in the profits of any contract or job, the work or services to be performed for the corporation . . . .”) (emphasis added), amended by Act 485 of 1981. Again, we simply note that under the plain language of the statute, a position as a city’s bookkeeper may be seen as a contract for services.

This still leaves the issue of Roberts’s quantum meruit defense, which she pleaded below. In Revis v. Harris, 219 Ark. 586, 243 S.W.2d 747 (1951) (“Revis II”), this court recognized that the payee of one holding incompatible positions may retain the quantum meruit value received for services rendered. There the court engaged in an analysis of the statutory precursor of section 14-42-107, Ark. Stat. Ann. § 19-909, and held that the mayor illegally received salary as municipal judge and as a laborer for the water and light department. However, the trial court found that “[t]o require the defendant to repay the City of Clarksville and Johnson County money received for services rendered while acting in good faith would be unjust and inequitable.” Id. On appeal, this court held that the mayor was not entitled to retain the salary paid to him as municipal judge, given the existence of “a statute denying him the right he claimed.” However, with respect to the salary received as a laborer, the Revis court recognized that those monies were not paid “for services as an officer.” While the payments were illegal, the legislature did not declare them to be null and void. Thus, the mayor was entitled to keep the quantum meruit value of the services rendered as a laborer. “There is no claim made that he received more than fair value for services as day laborer, or that the amount paid him for laying the pipe line was more than the value on the quantum meruit basis.” Revis II, supra.

In the present case, the trial court never reached the issue of this affirmative defense, given that it erroneously found that the underlying plaintiffs failed to meet their burden of proof. Therefore, on remand the trial court should determine whether the amount paid to Roberts exceeded the quantum meruit value of the services that she provided. See Revis II, supra.

Reversed and remanded.

       The court in Rogers and Davis also relied on the statutory predecessor to section 14-42-107 in reaching its holdings.


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

text:
    VILLAGE MARKET, INC. v. STATE FARM GENERAL INSURANCE COMPANY
    97-702
    970 S.W.2d 243
    Supreme Court of Arkansas
    Opinion delivered June 11, 1998

      Warner, Smith & Harris, PLC, by: G. Alan Wooten, for appellant.

      Jones, Jackson & Moll, PLC, by: Randolph C. Jackson and Jay Kutchka, for appellee.
   Annabelle Clinton Imber, Justice.

Appellant, Village Market, Inc., a grocery-store operator in Fort Smith, suffered damage to compressors in one of its freezer racks. It incurred repair and replacement expenses, and claimed a loss on a business policy issued by appellee, State Farm Insurance Companies. State Farm denied the claim, and Village Market initiated an action in circuit court to recover damages under the policy as well as the statutory penalty. State Farm moved for summary judgment, arguing that Village Market failed to comply with conditions precedent under the policy — to provide it with prompt notice of the loss and to retain the damaged property for its inspection. The trial court granted summary judgment to State Farm, and additionally awarded attorney’s fees to State Farm. Village Market appeals both rulings. We find no error and affirm.

In its complaint, Village Market alleged that on July 1,7, and 11, 1995, it suffered damage to various refrigerator compressors as a result of a power outage. Rick Srygley, Village Market’s owner, was told on July 1 that lightning may have struck the building, but thought nothing of it at the time because he received no contemporaneous reports of any problems. Approximately four weeks later he received a bill from Benso, Inc., for approximately $20,000 in repairs. The record reflects three separate Benso bills for repairs, the first dated July 1 for $12,459.17, the second dated July 7 for $917.14, and the third dated July 11 for $6,417.42. After investigating the bills, Srygley discovered that lightning had hit the building and “blown these compressors.” Paul Worley, the Benso repairman who performed the repairs, told Srygley that “it was a power surge that blew the system out.” Srygley then immediately called Randy Bittle, his State Farm agent, who later turned in the claim. Srygley did not recall the specific day that he called Bittle, although the affidavit of Terry Don Rippy, the State Farm claims representative who handled the matter, established that he received a call from Bittle about the claim on August 22, 1995.

Gene Egloff, the general manager of all three Village Market stores, received a call from Gene McAllister, the manager of the Fianna store, sometime around June or July of 1995 informing him that the refrigeration system was down at the Village Market store at Market Trace Road. Egloff was aware that repair personnel from Benso were called out to examine and repair the damaged refrigeration units.

A “recorded statement” reflected a conversation between Paul Worley and Terry Don Rippy. Worley had received a call about a refrigerator alarm at Village Market around July 1. He discovered two compressors electrically reading to ground, indicating a power surge or a power-related interruption. He recalled the store manager telling him there was lightning that night. Worley had to buy new compressors to replace the old ones — he obtained one in Springdale and the other in Tulsa. At the time that Worley was trying to locate new compressors, the damaged compressors were still at the store. After he replaced the compressors, he “traded [the damaged compressors] back in for core charge, core value.” This exchange was with the manufacturer, Superior Supply in Fort Smith. He did not know the exact date that he turned the compressors back in, or what Superior did with them. The compressors needed to be replaced quickly to protect the product being refrigerated. Worley was called back to Village Market a second time and discovered the same problem with another compressor in the same rack. He replaced a “contactor” on three compressors, explaining that the contacts were not designed to take a big power surge.

On August 23, Terry Don Rippy called Village Market, and later received a call from Beverly Smith, Srygley’s secretary. According to Rippy’s affidavit, they discussed the claim and he asked to inspect the damaged property, but Village Market never made the subject property available for inspection. Rippy also contacted Worley, who informed him that the damaged compressors had been exchanged for a “core change-out fee.” Kenneth Benso, the owner of Benso, stated by affidavit that “[w]hen replacing a refrigeration compressor, if a customer requests that the damaged compressor be left behind until which time it could be inspected, such request would be honored. If such request were made, the customer would be invoiced for the cost of the new compressor, and would be credited for the exchange value of the damaged compressor at the time such compressor was picked up and then returned to Superior Supply Company for its exchange value.” Benso had a company policy of preparing “tear-down reports” of damaged compressors when requested.

John Butler, a Superior Supply employee, also submitted an affidavit. He stated that in July of 1995, Superior Supply gave Benso “full core exchange value” for three individual compressors. Superior Supply would give the “full core exchange value” for compressors which are received within two weeks of being replaced. “It is Superior Supply Company’s policy that customers may request a tear down record before the damaged compressors are sent back to the Copeland Corporation, and Superior Supply Company will order such tear down record from Copeland Corporation. No tear down request will be made from Superior Supply Company to the Copeland Corporation unless Superior Supply Company is notified that such tear down request should be made.” A “tear down record” evinced the disassembly of a compressor and the examination of the core, and was useful in determining the cause of damage to a compressor.

On September 29, 1995, Rippy sent Srygley a letter denying the claim. Following the instigation of Village Market’s lawsuit against State Farm, State Farm moved for summary judgment arguing that Village Market violated its contractual duty to provide it with prompt notice in the event of a loss, and that it failed to give State Farm an opportunity to inspect the allegedly damaged property, both conditions precedent to recovery. The trial court entered an order granting State Farm summary judgment, finding that “ [t]hat no genuine issue as to any material fact exists and that [State Farm] is entitled to judgment as a matter of law.” The trial court later entered an order awarding State Farm costs and a $5000 attorney’s fee. Village Market appeals from both orders.

I. Summary judgment.

On appeal, Village Market argues that at the very least, fact questions exist as to whether it breached any of its duties to provide State Farm prompt notice or to retain the damaged property for inspection. Summary judgment is to be granted only when it is clear that there are no genuine issues of material fact to be litigated, and the party is entitled to judgment as a matter of law. Wallace v. Broyles, 331 Ark. 58, 961 S.W.2d 712 (1998), supp. opinion on denial of reh’g, 332 Ark. 189, 961 S.W.2d 712 (1998) (per curiam). Once the moving party has established a prima facie entitlement to summary judgment, the opposing party must meet proof with proof and demonstrate the existence of a material issue of fact. Id. On appellate review, this court determines if summary judgment was appropriate based on whether the evidentiary items presented by the moving party in support of the motion leave a material fact unanswered. Id. This court views the evidence in a light most favorable to the party against whom the motion was filed, resolving all doubts and inferences against the moving party. Id.

We need not reach the notice issue, as we hold that the trial court was correct in granting summary judgment to State Farm due to Village Market’s failure to retain the damaged property for inspection. The policy at issue provided that Village Market had, among other things, the following duties in the event of a loss:

3. Duties in the Event of Loss. You [the insured] must see that the following are done in the event of loss to covered property:
* * *
d. take all reasonable steps to protect the covered property from further damage by an insured loss. If feasible, set the damaged property aside and in the best possible order for examination. Also keep a record of your emergency and temporary repair expenses for consideration in the settlement of the claim. This will not increase the limit of insurance;
* * *
f. permit us to inspect the property and records proving the loss;
* * *
j. Resume all or part of your business activities at the described premises as quickly as possible.

Another condition of the policy was that Village Market could not bring a “legal action” against State Farm “under this insurance” unless “there has been full compliance with all of the terms of this insurance[.]”

For reversal, Village Market engages in a comparison of various provisions of the policy, in particular subsection “j” requiring the insured to resume its business as quickly as possible, which it argues is inconsistent with the provision requiring it to set aside the damaged property. We disagree. The policy only requires Village Market to set aside the damaged property if “feasible.” When viewing the evidence in the light most favorable to Village Market, the evidence still shows that Village Market could have set aside the damaged compressors. Benso would have honored a request to leave the damaged compressor behind for inspection. Superior Supply would have given full exchange value on the damaged compressors for up to two weeks following replacement. Exchanging the damaged compressors for their core value was not a prerequisite to obtaining the new ones. When Worley went to Springdale and Tulsa to purchase the new compressors, the old ones were still in place. It was not until after the compressors were replaced that he traded the old ones back in for core value. We also note that Village Market did not request a tear-down report for the damaged compressors, which it could have requested from either Benso or Superior Supply. Based on these facts, we hold that State Farm was entitled to summary judgment as a matter of law due to Village Market’s failure to comply with its duty under the policy to set aside the damaged property and to make it available for State Farm’s inspection.

II. Attorney’s fee.

Village Market next argues that the trial court erred in awarding State Farm attorney’s fees under the general statute authorizing attorney’s fees in breach-of-contract claims, Ark. Code Ann. § 16-22-308 (Repl. 1994):

In any civil action to recover on an open account, statement of account, account stated, promissory note, bill, negotiable instrument, or contract relating to the purchase or sale of goods, wares, or merchandise, or for labor or services, or breach of contract, unless otherwise provided by law or the contract which is the subject matter of the action, the prevailing party may be allowed a reasonable attorney fee to be assessed by the court and collected as costs.

Village Market argues that the attorney’s fee matter should have been resolved using Ark. Code Ann. § 23-79-208 (Repl. 1992), which provides in full:

(a) In all cases where loss occurs and the cargo, fire, marine, casualty, fidelity, surety, cyclone, tornado, life, health, accident, medical, hospital, or surgical benefit insurance company and fraternal benefit society or farmers’ mutual aid association liable therefor shall fail to pay the losses within the time specified in the policy, after demand made therefor, the person, firm, corporation, or association shall be hable to pay the holder of the policy or his assigns, in addition to the amount of the loss, twelve percent (12%) damages upon the amount of the loss, together with all reasonable attorneys’ fees for the prosecution and collection of the loss.
(b) The attorney’s fee shah be taxed by the court where the same is heard on original action, by appeal or otherwise, and shah be taxed up as a part of the costs therein and collected as other costs are or may be by law collected.
(c) Writs of attachment or garnishment filed or issued after proof of loss or death has been received by the company shah not defeat the provisions of this section, provided the company or association desiring to pay the amount of the claim as shown in the proof of loss or death may pay the amount into the registry of the court, after issuance of writs of attachment and garnishment in which event there shall be no further liability on the part of the company.
(d) Recovery of less than the amount demanded by the person entitled to recover under the policy shall not defeat the right to the twelve percent (12%) damages and attorneys’ fees provided for in this section if the amount recovered for the loss is within twenty percent (20%) of the amount demanded or which is sought in the suit.

Village Market in turn directs us to cases where this court has rejected an application of section 16-22-308 to justify an award of attorney’s fees. See Stein v. Lukas, 308 Ark. 74, 823 S.W.2d 832 (1992) (tort action of deceit); Construction Mach. v. Roberts, 307 Ark. 252, 819 S.W.2d 268 (1991) (interpleader actions); Transportation Properties, Inc. v. Central Glass & Mirror, 38 Ark. App. 60, 827 S.W.2d 667 (1992) (materialmen’s lien under Ark. Code Ann. § 18-44-101). These cases are simply inapposite here. Village Market reads into section 23-79-208 a prohibition against the recovery of attorney’s fees by insurers that is simply not there. In fact, the statute is utterly silent as to what an insurer may or may not recover should it prevail in a claim brought by the insured for failure to pay the loss. We decline to interpret this silence as legislative intent to prohibit such a recovery. An action by an insured to recover against an insurer for failure to pay a loss is no doubt contractual in nature. It is a civil action to recover damages due to breach of contract. As such, the insurer, as the prevailing party in such an action, is entided to an attorney’s fee under the plain language of section 16-22-308. We therefore affirm the attorney’s fee award in the present case.

Affirmed.

Arnold, C.J., Glaze and Thornton, JJ., dissenting in part.

Tom Glaze, Justice,

dissenting in part. I disagree only with that part of the majority opinion awarding attorney’s fees to State Farm General Insurance Company. The trial court awarded State Farm attorney’s fees pursuant to Ark. Code Ann. § 16-22-308 (Repl. 1994), which I am of the opinion does not apply.

Section 16-22-308 is a general statute that was enacted in 1989 and provides for the recovery of attorney’s fees in actions for breach of contract. In 1959, Ark. Code Ann. § 23-79-208 (Repl. 1992) was enacted, and specifically provides that, under certain circumstances, an insured may be awarded attorney’s fees when his loss claim covered by the policy is wrongfully denied or delayed by the insurance company. (Emphasis added.) Very clearly, § 23-79-208 is compiled under our laws regarding insurance policies and a Code subchapter designated “suits against insurers” • — ■ which is exactly what this court now has before it.

Section 23-79-208 does not authorize attorney’s fees to insurers and such fees may only be awarded insureds when the insureds meet certain requirements described by the insurance statute. Arkansas’s general statute § 16-22-308 (enacted after § 23-79-208) makes no mention of insurance policies so as to indicate that the General Assembly intended § 16-22-308 to cover insureds’ suits against insurers.

In interpreting statutes, the rule is well settled that a general statute must yield when there is a specific statute involving the particular matter. See Board of Trustees v. Stodola, 328 Ark. 194, 942 S.W.2d 258 (1997). We are also guided by the controlling principle that attorney’s fees incurred in the pursuit of civil actions are not awarded unless expressly provided for by statute or rule. McQuillan v. Mercedes-Benz Credit Corp., 331 Ark. 242, 961 S.W.2d 729 (1998). Here, § 16-22-308 does not expressly allow an insurer attorney’s fees when an insured loses his or her claim against the insurer, and I submit the General Assembly never intended an insurer should obtain attorney’s fees in such circumstances.

Finally, I point out that a rather odd result occurs from the majority’s decision to apply § 16-22-308 to an insured’s lawsuit against an insurer. As previously indicated, a prevailing insured’s right to attorney’s fees (and penalty) under § 23-79-208 is limited and may be awarded only if the amount recovered for the loss by the insured is within 20% of the amount demanded or which was sought in the suit. If the insured fails to meet this requirement in § 23-79-208, the question then arises whether the insured might then request attorney’s fees under § 16-22-308? In other words, if the insured failed to prevail under the terms in § 23-79-208 when requesting attorney’s fees, may the insured obtain such fees as a prevailing party under § 16-22-308? An insurer, of course, cannot obtain attorney’s fees under § 23-79-208 because the General Assembly did not authorize such fees. However, the insurer may now obtain attorney’s fees under § 16-22-308 without any restriction like the one required of an insured in § 23-79-208. Instead, all an insurer must do under § 16-22-308 is prevail in a lawsuit brought against it by an insured.

In my view, the General Assembly never intended to award attorney’s fees to a state-regulated insurance company in cases where an insured seeks payment for a loss claim under his or her policy. In fact, § 23-79-208 restricts even an insured’s right to attorney’s fees to those limited circumstances where the insured has shown its insurer exercised unwarranted delay tactics when considering the payment of the insured’s claim. See State Farm Mut. Auto. Ins. Co. v. Thomas, 316 Ark. 345, 871 S.W.2d 571 (1994). For these reasons and the ones addressed previously, I would reverse the trial court’s award of attorney’s fees to State Farm.

Arnold, C.J., and Thornton, J., join this dissent.

       State Farm objected to this evidence on hearsay grounds under Ark. R. Evid. 804. The trial court’s order granting summary judgment provides no indication as to whether or not this evidence was in fact considered.


author: Ray Thornton, Justice.

text:
    Mary Chavers CARSON v. Richard WEISS, Director, Arkansas Department of Finance and Administration; and Jimmie Lou Fisher, Treasurer, State of Arkansas
    97-984
    972 S.W.2d 933
    Supreme Court of Arkansas
    Opinion delivered June 11, 1998

      Thomas D. Deen, for appellant.

      Beth B. Carson, Chief Counsel, Revenue Legal Counsel, for appellees.
   Ray Thornton, Justice.

This appeal from an order denying class certification is specifically permitted as an interlocutory appeal under the provisions of Ark. R. App. P.—Civil 2(a)(9). Appellant Mary Chavers Carson, a resident of Louisiana who is employed in Arkansas, brings this illegal-exaction claim, challenging a provision of a state income tax statute, the former section 26-51-301(d) (Repl. 1992) of our Code, that denied her the same exemption from taxation that was granted to residents of Arkansas. She paid her Arkansas state taxes without protest from 1991, when the exemption was first granted to Arkansas residents, until 1994, when this complaint was filed. The State repealed the challenged exemption in 1995.

Appellant seeks, under the provisions of Rule 23 of our Rules of Civil Procedure, to represent a class of similarly situated taxpayers. However, because she has not complied with statutory refund requirements, the chancellor applied the sovereign-immunity provision of the Arkansas Constitution, which provides that the State may not be made a defendant in its own courts, to deny class certification. The chancellor based this decision on this court’s decision on rehearing in State v. Staton, 325 Ark. 341, 942 S.W.2d 804 (1996), where we held that each individual taxpayer must comply with statutory requirements before sovereign immunity is waived. From the chancery court’s decision denying class certification, appellant brings this interlocutory appeal. We find error and reverse.

As an interlocutory appeal from the trial court’s denial of class certification, we review the trial court’s decision under an abuse-of-discretion standard. State v. Tedder, 326 Ark. 495, 496, 932 S.W.2d 755, 756 (1996); Cheqnet Sys. v. Montgomery, 322 Ark. 742, 748, 911 S.W.2d 956, 958 (1995). However, we also consider whether sovereign immunity has been waived because it is a jurisdictional issue that may be raised at any time or on our own motion. Newton v. Etoch, 332 Ark. 325, 331, 965 S.W.2d 96 (1998); see also Tedder, 326 Ark. at 496, 932 S.W.2d at 756.

Our constitution generally prohibits suits against the State. Ark. Const. art. 5, § 20; Jacoby v. Arkansas Dep’t of Education, 331 Ark. 508, 513, 962 S.W.2d 773 (1998). We have held that this sovereign-immunity provision fully protects the State absent a waiver or consent by the State to be sued. Id.

The chancery court found that the members of the proposed class in this case could not be certified because they had not filed a claim for refund, which the Staton court held to be required under our statute dealing with refunds for overpayments, Ark. Code Ann. § 26-18-507 (Repl. 1997). Appellant argues that section 26-18-507 does not apply to this illegal-exaction claim. This argument is well taken.

In recent cases involving tax statutes, this court has noted that our legislature has waived its sovereign immunity in enacting a refund statute, Ark. Code Ann. § 26-18-507, which permits a taxpayer to sue the State for an improperly collected sales tax after a refund has been sought and refused or the Commissioner has not acted on the request. Tedder, 326 Ark. at 496, 932 S.W.2d at 756; Staton, 325 Ark. at 344, 942 S.W.2d at 806. The statute provides, in pertinent part:

Any taxpayer who has paid any state tax to the State of Arkansas, through error of fact, computation, or mistake of law, in excess of the taxes lawfully due shall, subject to the requirement of this chapter, be refunded the overpayment of the tax determined by the director to be erroneously paid upon the filing of an amended return or a verified claim for refund.

Ark. Code Ann. § 26-18-507(a). It was under this statute that we determined in State v. Staton that the taxpayers were required to file either an amended return or a verified claim for refund prior to initiating a suit, in order to waive sovereign immunity. Staton, 325 Ark. at 347, 942 S.W.2d at 807; see also ACW, Inc. v. Weiss, 329 Ark. 302, 947 S.W.2d 770 (1997) (citing Ark. Code Ann. § 26-18-507 (e) (2) (A)).

In this case, appellant argues that section 23-51-301(d), providing an exemption from state income taxes for Arkansas residents, was unconstitutional on its face, not in its application. Therefore, she does not assert that her excessive payment was due to an “error of fact, computation, or mistake of law,” as contemplated under section 23-51-507. Instead, appellant asserts that her claim is based on the premise that the State illegally exacted this payment from her based on an unconstitutional distinction in the statute. See, e.g., Taber v. Pledger, 302 Ark. 484, 791 S.W.2d 361, cert. denied, 498 U.S. 967 (1990) (determining that a taxpayer’s suit did not fall under this section because the taxpayer paid, under protest rather than through error).

Appellant argues that the proper method of challenging this unconstitutional tax is via the Arkansas Constitution’s illegal-exaction clause, and we agree. The clause reads as follows:

Any citizen of any county, city or town may institute suit in behalf of himself and all others interested, to protect the inhabitants thereof against the enforcement of any illegal exactions whatever.

Ark. Const. art. 16, § 13.

This court has observed the inherent conflict in our constitution between our illegal-exaction clause and our sovereign-immunity provision, art. 5, § 20. Streight v. Ragland, 280 Ark. 206, 209-10 n. 7, 655 S.W.2d 459, 461 n.7 (1983). Our sovereign-immunity provision provides that the State shall not be a defendant in her own courts, and this court in Streight noted that this provision was general in nature. Id. We stated that in the face of this conflict, we would employ the well-known rule of construction holding that the more specific provision controls the general. We concluded that the more specific provision was the one that grants the taxpayer standing, the illegal-exaction clause. Id.

In City of Little Rock v. Cash, 277 Ark. 494, 510, 644 S.W.2d 229, 236 (1982), we recognized that our common law makes an illegal-exaction suit under article 16, section 13, of the Arkansas Constitution a class action as a matter of law. However, we also specifically held in Cash that Rule 23 does not conflict with the constitutional illegal-exaction provision; rather, it serves as a rule of procedure in a class-action case of this nature. Id. In this regard, we also noted that, while our illegal-exaction provision is self-executing, “the legislature may regulate the procedure so long as the Constitutional guarantee is not abridged.” Id. (quoting Garner, Sloan, and Haley, Taxpayers Suits to Prevent Illegal Exactions in Arkansas, 8 Ark. L. Rev. 129, 135 (1954)).

In the case before us, the chancellor was correct that Rule 23 cannot override the constitutional principle of sovereign immunity and that strict compliance with statutory waivers of sovereign immunity is required. However, having previously held that the provisions of this illegal-exaction clause are self-executing and that it overrides the constitutional provision for sovereign immunity, we now further conclude that it provides for a constitutionally established class of interested persons. While the formation of this class is subject to well-established common-law legal principles and is neither limited nor expanded by the provisions of Rule 23, we have determined that the procedural elements of that rule may be useful in managing the conduct of the class action.

Accordingly, we reverse the decision of the chancellor and remand the matter for further action consistent with this opinion.

       This issue was revisited in Union Nat'l Bank v. Barnhart, 308 Ark. 190, 823 S.W.2d 878 (1992), where Justice Glaze stated, in a concurring opinion, that illegal-exaction claims had historically not been governed by the restrictions imposed on class actions and that illegal-exaction claims should not be subject to Rule 23.