author: Jack Holt, Jr., Chief Justice. Robert H. Dudley, Justice, Tom Glaze, Justice, Steele Hays, Justice, Robert L. Brown,

text:
    NATIONAL BANK OF COMMERCE (of El Dorado, Arkansas), as Conservator of the Estate (Only) of Jerry Wayne Yancey and Janice Yancey, His Wife v. The McNEILL TRUCKING COMPANY, Inc., et al.
    91-215
    828 S.W.2d 584
    Supreme Court of Arkansas
    Opinion delivered April 6, 1992

      Bob Davidson, for appellant.

      Walter A. Murray, for appellee.
   Jack Holt, Jr., Chief Justice.

The issues in this case revolve around the adequacy of damages awarded by the trial court on behalf of Jerry Yancey, who was injured in an automobile accident caused by the appellee, The McNeill Trucking Company, Inc. (McNeill).

On September 29,1989, the van driven by Mr. Yancey was hit from behind by a semi-truck driven by a McNeill employee. At the scene of the accident, a McNeill representative assumed full corporate responsibility for the accident to the investigating police officers. The appellant, National Bank of Commerce (Bank), filed suit against McNeill for damages and then requested a non-suit without prejudice as to the liability insurance carrier. Ultimately, the trial court declared a mistrial as a result of Mr. Yancey’s counsel’s actions before the jury; the parties stipulated, however, to a bench trial in order to continue the trial.

On March 7,1991, the trial court filed its findings of fact and conclusions of law; it found that liability for the accident was admitted by McNeill and awarded the Bank $5,558.61 for medical expenses, $5,335.20 for lost wages, and $2,000.00 for pain and suffering. No award was made for loss of consortium or for punitive damages, and all other claims were dismissed.

The Bank filed a motion for review or for a new trial, which was denied by the trial court. The Bank now asserts three points of error on appeal: 1) the trial court erred in disallowing any damages for the heart, 2) the trial court erred in disregarding undisputed testimony, as well as the McNeill’s own admissions, and utilizing surveillance video tapes to attempt to justify arbitrary and unsupported rulings as to damages, and 3) the trial court erred in disallowing punitive damages.

The Bank’s first argument relating to the disallowance of any damages for the heart is persuasive, and we reverse and remand the judgment of the trial court.

Under A.R.C.P. 59(a), the inadequacy of the recovery is a ground for a new trial even in the absence of other error. In Smith v. Pettit, 300 Ark. 245, 778 S.W.2d 616 (1989) (citing Warner v. Liebhaver, 281 Ark. 118, 661 S.W.2d 399 (1983)), we reiterated that when the primary issue is the alleged inadequacy of the award, rather than a question of liability, we will sustain the trial court’s denial of a new trial unless there is a clear and manifest abuse of discretion. An important consideration in this review is whether a fair-minded jury might reasonably have fixed the award at the challenged amount. Also, in reviewing a finding of fact by a trial court, we consider the evidence and all reasonable inferences therefrom in a light most favorable to the appellee. Jernigan v. Cash, 298 Ark. 347, 767 S.W.2d 517 (1989).

In this case, the trial court held in its findings of fact and conclusions of law that “. . . on September 29, 1989, Jerry Yancey sustained a back strain, proximately caused by the accident, for which he was caused to incur medical bills, lose wages and suffer pain for a period of no more than six months, and not later than March 29,1990. . . . Expenses beyond March 29, 1990, are disallowed, as are those relating to the heart.” The Bank initially asserts that the trial court erred in disallowing any damages for the heart.

The accident occurred on September 29,1989, at which time Mr. Yancey was treated at the University of Arkansas Medical Center (UAMS) emergency room for musculoskeletal pain; Mr. Yancey then went to Dr. Joe Buford, a family practitioner, the next day complaining of soreness in his lower abdomen and back. Yancey returned to Dr. Buford on October 2 and 4 with the same complaint; at no time did Mr. Yancey complain of chest pain or heart trouble. Apparently, Mr. Yancey went to the UAMS on October 10, where an EKG was performed on him; the results indicated that the pain was muscular/pectoral in nature and not related to the heart muscle.

On October 11, Mr. Yancey went to see Dr. Austin Grimes, an orthopedic surgeon, at the request of his attorney. At that time, Dr. Grimes noted Mr. Yancey’s complaint as being lumbar related and began treatment for his back. When Mr. Yancey returned to Dr. Grimes’s office on November 10, he told Dr. Grimes that he had chest pain on both sides. As Mr. Yancey was not responding to the therapy he had prescribed, Dr. Grimes wanted to treat Mr. Yancey with a transcutaneous electrical nerve stimulator (T.E.N.S.) unit, but did not want to prescribe the unit until Mr. Yancey had been checked out by a cardiologist because the unit could aggravate a heart condition.

Dr. Grimes referred Mr. Yancey to the UAMS Center in Little Rock, where he was treated by a trauma specialist, Dr. John Cone. Based on Mr. Yancey’s statements and history, Dr. Cone performed a physical exam on him and determined that “there is a greater than fifty percent chance that he has costochondritis [an inflammatory process that involves the cartilages that adjoin the ribs and the breast bone].” Dr. Cone then referred him to the cardiology department for further evaluation. Mr. Yancey was hospitalized from January 2 to January 4, 1990, by Dr. Joe Bissett, a cardiologist, for an echocardiogram and a coronary angiogram, the test results of which were normal.

The Bank essentially argues 1) that the trial court was adversely affected after reviewing McNeill’s surveillance tapes of Mr. Yancey that depicted him performing a variety of physical activity inconsistent with his claim of permanent and total disability, 2) that the heart-related expenses were within the trial court’s six month cut-off period, and 3) that Mr. Yancey was referred for treatment and testing for his heart by his treating physicians.

McNeill presented surveillance video tapes into evidence that showed Mr. Yancey engaging in physical activities that he claimed he was incapable of performing, i.e., overhead arm extension, lifting heavy objects, bending, stooping, and twisting. McNeill also presented evidence that Mr. Yancey had a prior condition of heart pain; in fact, the notation in his medical records reflected “a long history of dyspeptic symptoms including heartburn, epigastric pain. All relieved by antacid and milk.” Dr. Winston Wilson, a clinical psychologist, testified that Mr. Yancey was a hypochondriac prone to exaggeration of his symptoms, upon the recitation of which his treating physicians relied. McNeill also points out that Mr. Yancey did not see a specialist for his chest pains until forty-five days after the accident.

The evidence in the record shows that Mr. Yancey complained of chest pains at his October 11 orthopedic examination with Dr. Grimes. The record is very clear that Dr. Grimes’s decision to place him on theT.E.N.S. unit, which might help cure Mr. Yancey’s back, not his heart, was the motivation for the referral to a cardiologist. Dr. Grimes is an orthopedic surgeon who knew that the T.E.N.S. unit could aggravate a preexisting heart condition. Mr. Yancey’s medical records showed a long history of dyspeptic symptoms and, whether real or hypochondriacal, the documented possibility of a heart condition had to be explored in order to treat the conditions caused by the accident.

There is no challenge to the propriety of Dr. Grimes prescribing the use of the T.E.N.S. unit as treatment for the back pain that was attributed to this accident. In fact, Dr. Grimes’s treatment, including that administered during the six-month recovery period as limited by the trial court, was used as a basis for the award of all other damages. While it is true that Dr. Cone, the trauma specialist, first listened to Mr. Yancey and later reviewed his history to conclude that there was a possibility of costochondritis, the initial referral was triggered by Dr. Grimes’s determination that the T.E.N.S. unit was warranted. Even if hypochondriasis led to an exaggeration of symptoms in the history provided to Dr. Cone by Mr. Yancey, it is clear that Mr. Yancey did not seek out treatment related to a heart condition but rather was referred by the orthopedist to ensure that the preferred treatment for the injuries sustained in the accident would not aggravate another condition. The subsequent referral to the cardiologist must also be attributed to Dr. Grimes and his desire to place Mr. Yancey on the T.E.N.S. unit.

Consequently, after viewing the facts in the light most favorable to McNeill, we find that the record supports only the conclusion that the charges incurred as a result of Dr. Grimes’s decision to utilize the T.E.N.S. unit resulted from the accident. Accordingly, the trial court erred in disallowing as damages the medical expenses attributable to Mr. Yancey’s heart examinations. Compare Warner v. Liebhaber, supra. (The parties were involved in an automobile accident; the injured party incurred medical expenses of $ 12,285.00, and sought recovery of $ 100,000 for personal injuries and $1,500 for property damages. The defendants admitted liability, but the jury only awarded the injured party $2,500. The plaintiff appealed from the trial court’s denial of her motion for a new trial on the single issue of the inadequacy of the verdict. We affirmed the adequacy of the award on two bases: 1) the jury could have found that the plaintiff was not seriously injured in the collision, and 2) the jury could have found that the plaintiffs principal items of damage — medical expenses — were not fairly attributable to whatever back pain she may have suffered.)

The Bank also claims that the trial court erred in disregarding undisputed testimony, as well as McNeill’s own admissions, and utilizing the surveillance video tapes to attempt to justify arbitrary and unsupported rulings as to damages. Again, this argument is governed by the same standard of review as the Bank’s first point of error. The Bank presented testimony of Mr. Yancey’s treating physicians and physical therapist as to the extent of his injuries. McNeill presented three surveillance videos that belied this testimony and showed Mr. Yancey performing physical activities supposedly beyond his capabilities, i.e., heavy bending, stooping, lifting, and twisting. Consequently, the Bank’s testimony was hardly undisputed.

The Bank’s reference in its brief to “McNeill’s own admissions” in this point of error misinterprets the content and context of the proceedings in the record with regard to this claim. The Bank attempts to characterize the dialogue among counsel and the court as one relating to the issue of malingering, when in fact the point related to an objection as to the cumulative use of hypothetical questions. This argument is of no consequence since McNeill’s focus was that Mr. Yancey suffered from hypochondriasis and exaggerated his complaints.

Additionally, Dr. Grimes stated that one could expect to recover from an injury such as Mr. Yancey’s in four to six months. Therefore, the six month cut-off period is justified by the Bank’s own witness, and a fair-minded jury could easily have disbelieved all, or portions, of the testimony presented by the Bank and found that all of Mr. Yancey’s medical costs were not attributable to the accident with McNeill’s vehicle. In sum, the trial court’s assessment of damages other than medical bills relating to the examination of Mr. Yancey’s heart was not a manifest abuse of discretion. See Gilbert v. Diversified Graphics, 286 Ark. 261, 691 S.W.2d 169 (1985).

For purposes of remand, we will also discuss the Bank’s assertion that the trial court erred in disallowing punitive damages. In Missouri Pac. R.R. v. Mackey, 297 Ark. 137, 760 S.W.2d 59 (1988), we stated that punitive damages are only justified when the defendant acts wantonly or with such conscious indifference to the consequences of his acts that malice may be inferred; negligence, however gross, will not justify an award of punitive damages.

The Bank unsuccessfully attempted to introduce evidence that McNeill’s maintenance employees had used drugs at some point during their employment, and there was no direct evidence that they had used drugs on the job.

The Bank’s tandem assertion that McNeill knew that it was dangerous to allow a bobtail semi-truck to operate on the highway was not preserved for appeal, and we decline to address it. After examination of the record, we find that this argument was not pled and, although alluded to by the Bank in its brief, the trial court was not apprised of this argument as a basis for the Bank’s claim of punitive damages. Pearrow v. Feagin, 300 Ark. 274, 778, S.W.2d 941 (1989).

In sum, there was simply no evidence that McNeill knew of the alleged drug use, or recklessly disregarded the consequences from which malice could be inferred to support a claim of punitive damages.

The judgment of the trial court is reversed and remanded for retrial on the issue of compensatory damages.

Dudley and Glaze, JJ., concur.

Hays and Brown, JJ., dissent.

Robert H. Dudley, Justice,

concurring. I concur in the result reached by the majority opinion and write separately to set out two procedural issues involving punitive damages that I hope someday will be brought before us in an adversarial manner.

The appellant, plaintiff below, argues that he should have been awarded punitive damages because the appellee, the defendant trucking company, operated its tractor without a trailer, and a tractor without a trailer cannot be stopped within a safe distance. The appellant contends that the trucking company knew of this danger and yet, in order to profit, operated the tractor without a trailer and, as a direct result, the driver was unable to stop the tractor, and it struck and injured the appellant. The argument was not preserved for appeal and lends itself to this opinion since we do not decide it on the merits.

Our common law authorizes the assessment of punitive, or punishment, damages against a wrongdoer as a way of furthering our governmental interests of deterring willful and wanton tortious conduct. These damages for punishment are awarded directly to the private plaintiff, rather than to the government, as are fines when the criminal law is used to advance similar governmental interests.

This court traditionally has been very cautious, perhaps overly so, about affirming punitive damages in vehicle accident cases. We have held that there was the requisite substantial evidence of willful and wanton misconduct in only two classes of vehicle accident cases; (1) when the defendant driver was drinking, or drunk, or using drugs, see, e.g., Honeycutt v. Walden, 294 Ark. 440, 743 S.W.2d 809 (1988), and (2) when the defendant was racing, see, e.g., Turner v. Rosewarren, 250 Ark. 119, 464 S.W.2d 569 (1971). On the other hand, we have held that driving 65 to 70 miles per hour on loose gravel was not sufficient evidence of willful and wanton conduct. Edwards v. Jeffers, 204 Ark. 400, 162 S.W.2d 472 (1942). We have held that punitive damages may not be assessed against an individual who is involved in a hit and run accident. Freeman v. Anderson, 279 Ark. 282, 651 S.W.2d 450 (1983). We have said that evidence that a defendant was driving between 55 and 70 miles per hour in a 45 miles per hour zone on a wet street was not sufficient evidence of willful and wanton misconduct. Lawrence v. Meux, 282 Ark. 512, 669 S.W.2d 464 (1984). We affirmed a directed verdict for a defendant in a wrongful death case when a father allowed his fifteen-year-old daughter to drive his car, and the child drove only 559 feet from a parked position, but reached a speed of approximately 50 miles per hour, entered an intersection, and killed the plaintiff. Steward v. Thomas, 222 Ark. 849, 262 S.W.2d 901 (19 5 3). More recently, we declined to award punitive damages in a case that involved an overloaded truck that was being driven at an excessive speed even though its brakes had not been properly maintained. National By-Products, Inc. v. Searcy House Moving Co., Inc., 292 Ark. 491, 731 S.W.2d 194 (1987). As a last example, we reversed an award of punitive damages in a case where a truck was parked on the highway right-of-way so that the passengers could relieve themselves. Alpha Zeta Chapter of Pi Kappa Alpha Fraternity v. Sullivan, 293 Ark. 576, 740 S.W.2d 127 (1987). We have said that the cases involving drinking or drugs or racing exemplify “willful and wanton” conduct, but all others demonstrate only “gross negligence.” In summary, we have drawn a clear line defining those types of automobile accident cases in which punitive damages will be affirmed. I assume that every trial judge and every trial lawyer in the State is familiar with this line.

The reader of this opinion might pause at this point and ask what the result would have been in this Case, even if the appellant had been able to prove that a tractor without a trailer could not be stopped within a safe distance, and that the defendant trucking company was aware of such fact, and that the defendant trucking company, in order to profit, directed one of its employees to drive the tractor without a trailer to some destination and enroute the accident occurred, and the plaintiff was injured solely because the tractor could not be stopped. The answer is obvious, and it raises the significant issue which I hope we will be asked to address: Does such a result adequately accommodate and advance the governmental interests involved? It is a difficult proposition and, before exploring it, and perhaps in defense of our opinions, the reader should keep in mind that the interests the parties have at stake in a punitive damages case are not equal. The purpose of punitive damages is to vindicate the public interests; not to award the plaintiff a windfall. The windfall to the plaintiff is only a secondary result. On the other side, a defendant is punished by punitive damages. The word “punitive” denotes punishment for wrongdoing. Our opinions have used the words “exemplary damages” which means to make an example of the wrongdoer. If punitive damages are improperly awarded, the defendant suffers far more than a plaintiff does if the jury incorrectly fails to give him a windfall.

Our cases have drawn a clear line that is meritorious for the goal of judicial consistency, but meretricious for advancing the governmental interests of preventing willful and deliberate tortious conduct. We have drawn it, in part, according to the nature of the tort and not solely on the nature of the tortious wrongdoer’s conduct. Punitive damages and the affirmance of those damages ought to be based solely on the nature of the tortfeasor’s conduct. See AMI 2217. We have said, “[T]he boundary between gross negligence and conduct that can be characterized as willful and wanton is indistinct. . . .” Alpha Zeta Chapter of Pi Kappa Alpha Fraternity v. Sullivan, 293 Ark. 576, 585, 740 S.W.2d 127, 132 (1987), but, if today we were to change the nature of our review and begin to look solely at the wrongdoer’s conduct, there is the worrisome prospect that, without something more, many of the routine automobile accident cases might become subject to the uncontrolled award of punitive damages, and the worthwhile governmental purposes of punitive damages would be undermined.

Punitive damages in Arkansas serve the desirable and proper governmental interests of deterrence and retribution, Thomas Auto Co., Inc. v. Craft, 297 Ark. 492, 763 S.W.2d 651 (1989), and if they are only occasionally awarded they are not effective. McClellan v. Brown, 276 Ark. 28, 632 S.W.2d 406 (1982). In fact, we reversed an award of punitive damages in McClellan v. Brown, supra,, in part, because they were not regularly awarded in that type of case and, as a result, we did not think they would have a deterrent effect. Punitive damages are designed to make a person or corporation internalize the cost of willful and tortious conduct and act accordingly. However, if a fact finder were to make an award of punitive damages based upon sympathy or prejudice, without being subject to meaningful review, there would be a danger of excessive deterrence, a public conception of automobile accident cases as damage lotteries, and the governmental interests would be undermined. Without doubt, uncontrolled awards of punitive damages in automobile accident cases would not serve the governmental interests. Likewise, the governmental interests would not be well served if punitive damages were seldom awarded and, if awarded, almost never affirmed. In such a situation there would be too little deterrence, and I suspect that is our plight. In sum, the governmental interests are best served by allowing punitive awards that correctly balance the competing risks in order to adequately deter willful and wanton tortious conduct.

Since the case of National By-Products, Inc. v. Searcy House Moving Co., supra, I have thought about the need for a change in our clear line involving automobile accident cases. Other jurisdictions and legal writers have addressed the issue. The Supreme Court of Wisconsin has determined that the governmental interests can be best served by requiring a plaintiff to prove willful or wanton misconduct by the standard of clear and convincing evidence. Wangen v. Ford Motor Co., 294 N.W.2d 437 (1980). The University of Alabama School of Law and the Alabama Law Review sponsored a symposium on punitive damages and many of the leading writers presented articles on the subject. Symposium, Punitive Damages, 40 Ala. L. Rev. 687 (1989). An article that provides part of the basis of this opinion is M. E. Wheeler, The Constitutional Case for Reforming Punitive Damage Procedures, 69 Va. L. Rev. 269 (1983).

Given the opportunity, we should consider changing the evidentiary standard for punitive damages to the standard of clear and convincing evidence. There are a number of reasons for such a change. Jurors try to fill their obligation to decide cases according to the instructions given them, and a clear and convincing evidentiary standard would cause them to be more hesitant to impose punitive damages in inappropriate circumstances, and it might dampen any sympathy or prejudice. Punitive damages aré imposed as a form of punishment, and the higher evidentiary standard is more like the evidentiary standard used for punishment in criminal cases. After all, punitive damages are enough like criminal punishment for the Supreme Court to have considered whether punitive damages bar a subsequent criminal trial under the double jeopardy concept. Rex Trailer Co. v. United States, 350 U.S. 148 (1956). We have said that punitive damages are not a favorite of the law, Diamond Shamrock Corp. v. Phillips, 256 Ark. 886, 511 S.W.2d 160 (1974), and, since they are not a favorite, the higher standard would seem more appropriate. The clear and convincing standard would compensate for the imbalance between the risks of the parties, and, correspondingly, there is no sound reason to require a defendant to bear the greater risk of the preponderance of the evidence standard. The higher evidentiary standard would further governmental interests by avoiding excessive deterrence or erroneous punishment in the form of unjustified punitive damages.

With the clear and convincing standard, an appellate court could draw the clear line on the tortfeasor’s conduct alone, and not on the type of automobile accident. Judicial review would be accomplished with considerably more confidence. An appellate court would be more likely to hold that, if the plaintiff- established the requisite conduct on the part of the defendant, the decision whether to award punitive damages was entirely within the jury’s discretion and should be affirmed. In this way, the worthwhile purposes of punitive damages would be accommodated and advanced.

A second procedural change to be considered, and one that could easily be adapted from criminal procedure, would be the bifurcation of punitive damages trials. This procedural change would permit the trial of punitive damages issues only after the jury had rendered a verdict on liability and had awarded compensatory damages. The jury would not hear evidence on punitive damages issues, including the defendant’s wealth, until it had first found liability and awarded compensatory relief. Again, the governmental interests would be advanced. The procedure would reduce the risk that inflammatory punitive damages evidence would cause the jury to improperly resolve liability issues against the defendant and, if the higher evidentiary standard were adopted, it would eliminate the likelihood of confusion arising from applying one standard of evidence for the compensatory damages and another standard for the punitive damages. In addition, if an appellate court found error in the punitive damages phase of the trial, it could reverse only that phase for retrial. While this opinion discusses only automobile accident cases, the same procedures necessarily would be applicable to all punitive damages trials, including, for example, products liability cases against manufacturers, malpractice cases against lawyers or doctors, and defamation cases against newspapers or broadcasters.

In summary, our present clear line in automobile accident cases does not fully accommodate and adequately advance the governmental interests involved in punitive damages cases. I would hope that the possible changes discussed in this opinion might be brought before this court in an adversarial manner, with briefs on both sides, so that the court might consider balancing the risks in order to further the governmental interests. It is a matter which we have never addressed.

Tom Glaze, Justice,

concurring. I agree with the majority opinion as far as it goes, but other considerations not mentioned in the opinion also warrant the reversal of this case. No dispute exists over the fact that appellant experienced chest pains after appellee’s (McNeill Trucking Company, Inc.) semi-tractor struck appellant’s vehicle from behind. As mentioned in the lower court’s findings, the origin or cause of appellant’s chest pains was in question, and the court ultimately concluded those pains were unrelated to the accident. That finding, however, does not resolve the issue as to whether appellant is entitled to medical expenses that appellant incurred in order to insure the pains he experienced after the accident were not due to a cardiac contusion caused by his having hit the steering wheel as a result of the impact from McNeill’s semi-tractor.

Because of appellant’s complaint of chest paints, Dr. Austin Grimes, an orthopedic surgeon, refused to administer a TENS unit on him until he was checked by a cardiologist. A TENS unit could have aggravated a heart condition. Grimes was shown excerpts of the surveillance tape which the appellees took of appellant, but he still adhered to his belief that appellant had not exaggerated or faked the extent of his injuries.

Dr. Joe Bissett, a cardiologist, evaluated the appellant and stated that the appellant was justified in seeing a cardiologist regarding his chest pain and that a cardiac contusion could occur during an accident like the one in which appellant was involved where the steering wheel hit him in the chest. Dr. John Cone, a trauma specialist, related that the paramedics, who had taken appellant to the emergency room after the accident, noted the steering wheel of appellant’s vehicle had been damaged. Cone, after evaluating appellant, suggested appellant see Dr. Bissett to rule out any cardiac injury.

Whether appellant is or is not a hypochondriac, as appellees assert, is not determinative of appellant’s entitlement to medical expenses incurred as the result of advice given him by his treating doctors. Appellees offered no medical evidence to refute the doctors’ testimonies that indicated further evaluation was needed to assure appellant’s chest pains were not due to a heart condition. Appellees did present Dr. Winston Wilson, a clinical psychologist, who testified the appellant suffered from hypochondriasis. But Wilson further added that he could not testify as to appellant’s physical condition.

The appellees admitted liability in this case, and the court awarded appellant $5,558.61 for medical expenses, $5,335.20 for lost wages and $2,000.00 for pain and suffering. Clearly, by awarding these damages, the trial court acknowledged the appellant was injured as a result of appellees’ negligence even, though appellees attempted to show otherwise by the surveillance tapes taken of appellant after the accident.

Once the trial court decided the appellant’s injuries resulted from appellees’ negligence, the appellant was then entitled to all reasonable expenses for any necessary medical treatment. Here, appellees offered absolutely no evidence to show appellant’s cardiology treatment was unnecessary. To the contrary, all medical evidence showed such treatment was required.

While the trial court found appellant’s chest pains were unrelated to the accident, appellees, as tortfeasors, must take their victim as they find him. Clawson v. Rye, 281 Ark. 8, 661 S.W.2d 354 (1983). The physical and medical evidence reflect appellant experienced chest pains both before and after the accident, and before Dr. Grimes dared treat appellant’s orthopedic needs, Grimes opined that he had to rule out any possible heart problems the appellant might have. Dr. Bissett related such evaluations were justified under these circumstances. None of these factors indicating a medical need for the evaluation of appellant’s heart is in any material way offset or negated by appellees’ surveillance tapes.

For the above reasons, I agree the case should be reversed and remanded.

Steele Hays, Justice,

dissenting. I respectfully submit the majority reverses this judgment for a new trial on a mistaken assumption that because testimony of some medical experts was undisputed, it was incumbent on the trial judge, as fact-finder, to accept such evidence. That is not the law. The testimony of medical experts, like that of other experts, is not binding on the fact-finder, however reliable such evidence might seem. The fact-finder may accept or reject all or any part of the testimony of expert witnesses. The Western Union Telegraph Co. v. Byrd, Adm’x., 197 Ark. 152, 122 S.W.2d 569 (1938). “Even when several competent experts concur in their opinions and no opposing expert evidence is offered, the jury is still bound to decide the issue upon its own fair judgment.” Western Union Telegraph Company v. Turner, 190 Ark. 97, 77 S.W.2d 633 (1935).

It is clear the trial judge in this case did not accept the medical opinion that the expenses incurred in connection with Mr. Yancey’s cardiac complaints were attributable to the initial trauma or to the subsequent treatment of other injuries. The judgment should be affirmed.

Brown, J., joins in this dissent.

Robert L. Brown,

Justice, dissenting. The majority’s decision overturns a line of cases that extends back to 1983. See Kratzke v. Nestle-Beich, Inc., 307 Ark. 158, 817 S.W.2d 889 (1991); Hacker v. Hall, 296 Ark. 571, 759 S.W.2d 32 (1988); Thigpen v. Polite, 289 Ark. 514, 712 S.W.2d 910 (1986); Warner v. Liebhaver, 281 Ark. 118, 661 S.W.2d 399 (1983). By doing so, the decision opens up an issue that had previously been decided and subjects the matter once again to resolution on a case-by-case basis.

The authority adduced above, beginning with Warner v. Liebhaver, stands for the proposition that the trier of fact may choose to disbelieve the testimony of any witness and award damages accordingly. That is what the trial judge as the trier of fact did in the case before us. The majority, however, takes this precedent and casts it to the four winds. It then usurps the factfinder’s role by proceeding to weigh the testimony and decide the legitimacy of Yancey’s cardiac expenses.

There is a firm basis for the trial judge’s decision to reject these expenses. As the majority admits, Dr. Grimes did not refer Yancey to a cardiologist until six weeks after the accident and only then because of Yancey’s statements about chest paints and as a safety measure prefatory to back treatment by a transcutaneous electrical nerve stimulator. The trial judge could well have chosen to disbelieve the authenticity of Yancey’s complaint, and it was that complaint that was the catalyst for Dr. Grimes’s referral to a cardiologist. As it turned out, there was no injury to the heart. Yancey had a history of heartburn, was a hypochondriac, and was prone to exaggeration. The mere fact that Dr. Grimes referred him to a cardiologist out of an abundance of caution is not sufficient reason to reverse the decision by the trier of fact.

The Warner v. Liebhaver case involved a woman who sought $100,000 for personal injuries and $1,500 for property damage resulting from an automobile accident. She had $12,285 in medical expenses. The jury awarded her total damages of $2,500, and the trial judge denied her motion for a new trial. Analyzing the record, we held that the jury could reasonably have found that Mrs. Warner was not seriously injured and that her medical expenses were not fairly attributable to whatever back pain she may have suffered. One of her doctors testified that, although she had undergone surgery three months before the accident, her problem was primarily psychological. A treating psychiatrist indicated that the accident had become the focus for her existing emotional conflicts. Under the circumstances, we held that there was no abuse of discretion.

In Smith v. Pettit, supra, the appellant claimed damages for permanent injuries to his neck and back, loss of earnings and earning capacity, past and future pain and suffering, and past and future medical expenses, which he asserted, were the consequences of an automobile wreck. The jury awarded him only $1,711.64, the amount of his medical bills. Reviewing the evidence, we observed that Smith has missed no work because of the accident; he had been involved in three other automobile collisions; he had previously fallen off a telephone pole; he suffered from stress associated with a new employment situation; and his condition continued to improve. On the basis of these and other factors, we held that there was no abuse of discretion in the trial court’s denial of a new trial.

In Kratzke v. Nestle-Beich, Inc., supra, a 1991 case, medical expenses of $47,060.12 were claimed, and the jury’s verdict was $2,000. Citing Warner, we concluded that the jury could have decided that medical expenses were attributable to preexisting causes and not to an automobile accident. We said: “The mere fact that medical expenses have been incurred by the appellant and the additional fact that the appellee has admitted liability do not automatically translate into a damage award equivalent to those expenses.” 307 Ark. at 160, 817 S.W.2d at 890.

In the present case, the trial judge sitting as the trier of fact was the sole judge of the credibility of the witnesses and of the weight to give their testimony. See Takeya v. Didion, 294 Ark. 611, 745 S.W.2d 614 (1988). The majority, by its decision, has insinuated itself into that role for the purpose of obtaining a desired result. The consequence of this decision is to lend instability to an area of the law that cries for stability.

I would pay heed to our past decisions and affirm the judgment of the trial judge.

Hays, J., joins.


source: Caselaw Access Project

author: Jack Holt, Jr., Chief Justice.

license: Public Domain

text:
    Henry NIEMEYER v. Beverly Eugene GRIFFIN and Joann Griffin
    91-311
    826 S.W.2d 821
    Supreme Court of Arkansas
    Opinion delivered April 6, 1992

      Wetzel, Jones, Pruniski & Moore, P.A., by: John E. Moore, Jr., for appellant.

      Wallace & Hamner, by: Michael A. LeBoeuf, for appellee.
   Jack Holt, Jr., Chief Justice.

The primary issue presented is whether the chancellor erred in finding that the language in a deed creating an easement was ambiguous and consequently erred in going beyond the terms of the easement to determine the extent of the easement granted. We find that the chancellor erred in restricting the easement to 21 feet and hold that the easement, by its express language, contemplates a 30 foot wide easement.

On October 25, 1985, the appellees, Beverly Eugene and Joann Griffin, purchased property subject to the following easement created in 1957 by a predecessor in title:

This conveyance is subject to additional right-of-way easement of five (5) feet along the East line of lands herein conveyed in order that Crystal Valley Road have a total r/ w of Sixty (60) feet; also subject to easement for public roadway across the west 30 feet of lands herein conveyed, providing ingress and egress across Plots 20 and 21 from Whipporwill Lane to the NW¡4 SE’f Section 25, Township 1 North, Range 14 West, Pulaski County, Arkansas.

(Emphasis added.)

On October 8, 1990, after discussions with the appellant, Henry Niemeyer, regarding his proposed improvements to the area described in the easement, the Griffins filed a complaint in the Pulaski County Chancery Court seeking an injunction to prohibit Mr. Niemeyer from proceeding with his plans. Mr. Niemeyer answered and counterclaimed by seeking an injunction against the Griffins to prohibit them from obstructing his ingress and egress over the area described in the easement.

The chancellor determined on May 9, 1991, that the emphasized language in the easement was ambiguous and held that 21 feet was an adequate quantity of land so as to allow reasonable use by both parties.

Mr. Niemeyer filed a motion for reconsideration, amendment of judgment, or new trial, which was denied by the chancellor, and he now appeals. We find that the chancellor erred and reverse.

It is a well-settled principle of law that where an instrument is unambiguous on its face, extrinsic evidence is inadmissible to contradict or vary its terms. Brown Properties, Inc. v. Looper, 293 Ark. 133, 732 S.W.2d 471 (1987)(citing Lane v. Pfeifer, 264 Ark. 162, 568 S.W.2d 212 (1978)). In this case, the chancellor specifically found that the word “ ‘across’ is not a definitive, geometric, or spacial designation of width. It is an action. It is going from one point to another, getting there. And within that ‘across,’ the issue the Court is to decide is what is reasonable under the circumstances at this point for ingress and egress.”

The word “across” is defined as “from one side to the opposite side of,” Webster’s Third New International Dictionary (1961), and “[f]rom side to side. Transverse to the length of.” Black’s Law Dictionary (5th ed. 1979). Interposing these definitions in place of the word “across” in the express easement, the language reads as follows:

. . . also subject to easement of public roadway [from one side to the opposite side of] the west 30 feet of lands herein conveyed, providing ingress and egress [transversing the length of] Plots 20 and 21 ... .

In viewing the plot plan furnished to the trial court as Exhibit 3 and reproduced below,

it can easily be seen that the language provides that the parameters of the easement on the west side of the conveyed property are 30 feet wide and the length of Plots 20 and 21. Consequently, as the terms are definite and unambiguous, it was error for the chancellor to admit extrinsic evidence to contradict its terms.

The chancellor’s reliance on Aladdin Petroleum Corp. v. Gold Crown Properties, 561 P.2d 818 (Kan. 1977), and Hyland v. Fonda, 129 A.2d 899 (N.J. 1957) is misplaced. In Aladdin Petroleum Corp., the court construed the words “along and across approximately the west 60 feet of said property” as a description of the general area and location of an easement. The easement is not qualified by the word “approximately” in this case.

In Hyland, the New Jersey court found ambiguity in the following language: “right of ingress and egress for roadway purposes along a strip 25 feet in width.” In looking to the surrounding circumstances, the court found that the reservation was “not to be construed as having necessarily withheld for the benefit of the occupants of the rear property a continuous right to the absolute use at all times of a roadway actually 25 feet wide, whether or not so much was reasonably necessary for ingress and egress.” The court did not interpret the word “across,” but instead made its determination on the use of the word “along” in that case.

Accordingly, we reverse the chancellor’s finding of fact that the terms of the easement were ambiguous, and her resulting decision that the reasonable use of the easement was 21 feet, and hold that Mr. Niemeyer’s easement encompasses the full 30 foot width expressly enumerated in the provision of the easement.

Reversed.

Hays, J., dissents.


text:
    Zenas Lyn SMITH v. NATIONAL CASHFLOW SYSTEMS, INC.
    91-313
    827 S.W.2d 146
    Supreme Court of Arkansas
    Opinion delivered April 6, 1992

      Young & Finley, by: Dale W. Finley, for appellant.

      Peel & Eddy, by James S. Dunham, for appellee.
   Jack Holt, Jr., Chief Justice.

In this case, we are requested to determine whether a licensed collection agency can obtain assignments of debts and then bring an action on the debts in its own name, as “the real party in interest,” pursuant to Ark. R. Civ. P. 17(a).

The appellee, National CashFlow Systems, Inc. (CashFlow) is a duly licensed collection agency in the state of Arkansas. Under a written assignment form, which recited a payment of $10, CashFlow purchased assignments of two separate debts, totalling $196.84 and which were owed by appellant, Zenas Lyn Smith, to the Millard-Henry Clinic and the Peoples Bank and Trust Company. The debts are not in dispute.

CashFlow, through its attorneys, Peel and Eddy, filed a complaint in the Pope County Municipal Court requesting judgment in the amount of the total debt owed to both creditors, prejudgment interest of $15.67, and for interest on the judgment at the rate of 10% annum. CashFlow also requested attorney’s fees and costs. In his answer, Mr. Smith averred that CashFlow was not the real party in interest as required by Ark. R. Civ. P. 17(a) and that CashFlow’s actions constituted the unauthorized practice of law. He requested dismissal of the complaint. The municipal court awarded CashFlow $212.51, with interest at 10% annum, and $100 in attorney’s fees, following which CashFlow appealed to the Pope County Circuit Court.

After an evidentiary hearing and the submission of briefs, the circuit court found that an assignee for collection of an account is the real party in interest and that the actions of CashFlow did not constitute the unauthorized practice of law. The court awarded the agency the amount of the debt with interest, minus what had already been collected through writs of garnishment, and attorney’s fees.

The issues in this case are so intertwined that we discuss them together.

Lisa Teaf, head of CashFlow’s legal services department, testified at trial that it was CashFlow’s practice to send out an assignment form to the client creditor in which the creditor verifies, by affidavit, the name of the debtor and the amount owed. The assignment recites that “for ten dollars and other good and valuable consideration,” the undersigned assigns its claim against the debtor to CashFlow and grants CashFlow “full power to collect, sue for, or settle said claim, and endorse remittances, as CashFlow Collections; to retain interest if collected.” Ms. Teaf testified that when the affidavit and assignment is returned, the department “works up” a complaint and summons which are signed by Mr. Peel, with the private law firm of Peel and Eddy. If collection efforts are successful, CashFlow pays its legal expenses and them remits 50% of the remainder to the client. Ms. Teaf stated once the client assigns the account, it belongs solely to CashFlow to handle as it chooses.

Mr. Smith argues the assignment of the accounts from his creditors to CashFlow was a mere “subterfuge to gain admission to the courts.” He points to the fact that the recited ten dollar payment in the assignment form was never actually paid to CashFlow’s clients and to CashFlow’s practice of reimbursing the creditors for half of any monies collected. In essence, Mr. Smith argues the assignment is a sham transaction which should preclude CashFlow from bringing an action on the debts, thereby warranting dismissal of the lawsuit.

Rule 17(a) provides “every action shall be prosecuted in the name of the real party in interest.” The real party in interest is generally considered to be the person or corporation who can discharge the claim upon which the allegation is based and is not necessarily the person ultimately entitled to the benefit of any recovery. Gladden v. Bucy, 299 Ark. 523, 772 S.W.2d 612 (1989); Childs v. Philpot, 253 Ark. 589, 487 S.W.2d 637 (1972).

Ark. Code Ann. § 4-58-105(a) (1987) states, in relevant part, that “every written assignment made in good faith. . .on account receivable or any moneys due or to become due on an open account. . .shall be valid and complete at the time of the making of the assignment. . . .” Furthermore, although Ms. Teaf s testimony was unclear as to whether CashFlow ever actually paid the $10 purchase fee, Ark. Code Ann. § 4-58-103 (1987) provides that “it shall not be necessary for any assignee to set forth the consideration of any of the assignments on any such assigned paper.”

In Higginbotham v. Ritter, Executrix, 200 Ark. 376, 139 S.W.2d 27 (1940), this court held that the assignment of a promissory note, which simply recited “good and sufficient consideration,” was properly executed and passed good title to the assignee, thus making him the real party in interest and entitling him to proceed in the action as the sole plaintiff. The court cited what is now Ark. Code Ann. § 4-58-109 (1987), which provides that an assignee bringing suit on any assigned paper is not required to prove the assignment unless the defendant alleges the assignment was forged. No such allegation was made in Higginbotham, or here.

Since CashFlow, as the assignee of a properly assigned account, is the entity who can discharge the claim, it is the real party in interest and, as such, is entitled to bring this action.

As to Mr. Smith’s complaint that CashFlow was engaged in the unauthorized practice of law, we note that as a litigant in the action, Mr. Smith has standing to raise the issue as a defense. However, even if we were to find that CashFlow was engaged in the unauthorized practice of law, it would not extinguish or invalidate a just debt. See Davis v. University of Arkansas Medical Center and Collection Serv. Inc., 262 Ark. 587, 559 S.W.2d 159 (1977).

In Pope County Bar Ass’n v. Suggs, 274 Ark. 250, 624 S.W.2d 828 (1981), we recognized that what constitutes the practice of law is extremely elusive. This is confirmed when we look at the scant facts before us. From the facts presented, there is no evidence CashFlow furnished, or agreed to furnish legal services or advice to the creditors which, along with the preparation of certain legal documents, is usually of concern in determining whether a party is illegally practicing law. See Pope County Bar Ass’n, supra; Gaylor v. Gaylor, 224 Ark. 644, 275 S.W.2d 644 (1955); Arkansas Bar Ass’n v. Union National Bank, 224 Ark. 48, 273 S.W.2d 408 (1954). As to the preparation of documents, at best, we have Ms. Teaf s testimony that when the affidavits and assignments are returned, the legal services department “works up” a complaint and summons to be signed by its privately retained attorney. We do not know whether or not “works up” a complaint means drafting, preparing, or filling in the blanks on forms furnished by counsel. In short, based on the meager facts in the record, we cannot reach the question of whether CashFlow was engaged in the unauthorized practice of law.

Lastly, we think it significant to note that by accepting responsibility for the complaint under Ark. R. Civ. P. 11, Mr. Peel was the attorney involved, not CashFlow.

For the foregoing reasons, we affirm.


author: Robert H. Dudley, Justice.

text:
    Lloyd PARKS, Individually and as Administrator of the Estate of Mary Parks, the Deceased v. HILLHAVEN NURSING HOME of Little Rock, Dr. John Wolverton and Little Rock Nursing Center of Little Rock, Arkansas
    91-314
    827 S.W.2d 148
    Supreme Court of Arkansas
    Opinion delivered April 6, 1992

      William Proctor, Jr., for appellants.

      Friday, Eldredge & Clark, by: Guy Alton Wade, for appellees.
   Robert H. Dudley, Justice.

Appellant filed multiple claims against multiple parties for the alleged wrongful death of his wife. The trial court granted summary judgment in favor of all of the defendants on all of the claims. We reversed. Parks v. Hillhaven Nursing Home, 303 Ark. 557, 798 S.W.2d 106 (1990). Upon remand, two of the three defendants again filed motions for summary judgment. The trial court granted partial summary judgment in favor of the two defendants on the counts of medical malpractice, negligence, and wrongful death, but held that issues of material fact existed on the other counts against those two defendants. In summary, the trial court entered a partial summary judgment on some of the claims for some of the parties, but did not enter a judgment on all of the claims against all of the parties. The appellant again seeks to appeal. We dismiss the appeal for lack of a final order.

Under A.R.C.P. Rule 54(b), the trial court may enter a final judgment or order in a case involving multiple claims or multiple parties by making an express determination that there is no reason to delay an appeal. See Franklin v. Osca, Inc., 308 Ark. 409, 825 S.W.2d 812 (1992). The failure to obtain such a finding of fact or judgment or order presents a jurisdictional issue which we will raise on our own, and absent compliance, we dismiss the appeal for lack of a final order. Middletown v. Stilwell, 301 Ark. 110, 782 S.W.2d 44 (1990). There was no final order in this case and accordingly, we dismiss the appeal.


author: Steele Hays, Justice. Donald L. Corbin, Justice,

text:
    Lera CLAMPIT and Lila Mae Montgomery as Administrators of the Estates of the Deceaseds, James Clampit, Jo Carolyn Clampit, and Jamie Jo Clampit v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY
    91-285
    828 S.W.2d 593
    Supreme Court of Arkansas
    Opinion delivered April 6, 1992
    [Rehearing denied May 4, 1992.]

      Gibson & Hashem, by: C.C. Gibson III, for appellant.

      Huckabay, Munson, Rowlett & Tilley, P.A., by: Beverly A. Rowlett, for appellee.
   Steele Hays, Justice.

This dispute over insurance coverage arises from a motor vehicle collision between members of the Clampit family and an underinsured motorist. The question is whether a provision of the Clampits’ insurance policy excluding a vehicle owned by the Clampits but not insured under that policy violates either Ark. Code Ann. § 23-89-209 (1987) or the public policy of this state. The trial court held the exclusion valid and unambiguous. We affirm.

James Clampit and Jo Carolyn Clampit, his wife, owned two motor vehicles — a 1989 Pontiac automobile and a 1989 Dodge truck. Both vehicles were insured under separate insurance policies issued by State Farm Mutual Automobile Insurance Company. In August 1990 the Clampits and their daughter, Jamie Jo, were killed in a collision involving their 1989 Pontiac. The other motorist was underinsured.

The two Clampit policies provided underinsured motorist coverage and each policy had an “owned-but-not-insured” exclusion which precluded recovery under the respective policy for accidents in a vehicle owned by the named insured but not insured under that particular policy.

Appellants, as personal representatives of the Clampits, brought this action for wrongful deaths against the underinsured motorist and joined State Farm as a defendant, seeking to recover the limits of the underinsured motorist benefits under both State Farm policies. State Farm paid its limits under the policy issued on the Pontiac, but refused to pay any sum under the other policy covering the Dodge truck, citing the owned-but-not-insured exclusion.

State Farm moved for summary judgment based on its policy exclusion. Appellants responded asserting the exclusion was contrary to the underinsured motorist statute, Ark. Code Ann. § 23-89-209 (1987), and contrary to public policy. The trial court upheld the exclusion and granted summary judgment to State Farm. Subsequently, appellants reached a settlement with the tortfeasor and the trial court entered a final order in the case. Appellants appeal from the summary judgment.

The exclusion at issue reads as follows:

Exclusions for Underinsured
Motor Vehicle Coverage:
There is no coverage for bodily injury to an insured while occupying a motor vehicle owned by you, your spouse or any relative if it is not insured for this coverage under this policy.

In Crawford v. Emasco Ins. Co., 294 Ark. 569, 745 S.W.2d 132 (1988), we upheld a similar exclusion in uninsured motorist coverage. Only one policy was involved in Crawford and the exclusion resulted in no coverage for the insureds. We acknowledge that our holding in Crawford was a minority position, but we cited an earlier decision validating this exclusion, Holcomb v. Farmers Insurance Exchange, 254 Ark. 514, 495 S.W.2d 155 (1973), and a subsequent refusal to reconsider that view in Lucky v. Equity Mutual Insurance Co., 259 Ark. 846, 537 S.W.2d 160 (1976). We noted that the appellants in Crawford had advanced the same arguments rejected in Holcomb, and that the minority rule had gained wider acceptance following Holcomb. We thought our position sound, citing the reasoning in Dullenty v. Rocky Mountain Fire & Casualty Co., 111 Idaho 98, 721 P.2d 198 (1986), overruled on other grounds, Colonial Penn Franklin Insurance Co. v. Welch, 811 P.2d 838 (Idaho 1991):

If an insurer is required to insure against a risk of an undesignated but owned vehicle, or a different and more dangerous vehicle of which it has no knowledge, it is thereby required to insure against risks of which it is unaware, unable to underwrite and unable to charge a premium therefor.

■ Appellants in this case suggest alternative reasons why we should change our position in Crawford: first, the exclusion is for underi nsured coverage rather than ««insured coverage and, second, the minority position has lost ground since Crawford was decided. We find these arguments unpersuasive.

We concede the distinction between ««insured and underinsured coverage. Uninsured motorist coverage applies when a tortfeasor either has no insurance or has less than the amount required by law. Coverage is designed to guarantee a minimum recovery equal to that amount. Underi nsured coverage applies when the tortfeasor has at least the amount of insurance required by law, but not enough to fully compensate the victim. This coverage is designed to provide compensation to the extent of the injury, subject to the policy limit. See Kluiter v. State Farm Mutual Automobile Insurance, 417 N.W.2d 74 (Iowa 1987).

Conceiveably, there are situations where the difference between uninsured and underinsured motorist coverage could affect recovery, but we fail to see how the distinction would change the result in Crawford, nor does appellant suggest how it would. The reasoning in Crawford was not concerned with the amount or extent of coverage, but with whether any coverage existed under the facts and the express exclusion in that case. See .discussion on this point, infra.

In Kluiter v. State, supra, the Iowa Supreme Court addressed the question of underinsurance in a case factually similar to the case at bar. The insured had four policies with the defendant insurance company, each policy covering a different vehicle owned by the insured, and each policy containing an owned-but-not insured clause. None of the four vehicles were covered under any but its own policy. The insured collided with an underinsured driver and the insurance company paid the insured the policy limits for the vehicle involved in the collision. Claims by the insured under the other policies were refused because the other policies expressly excluded other vehicles owned by the insured and the vehicle involved in the collision was not covered under the other policies. The court in Kluiter held the exclusions valid, relying on earlier cases interpreting uninsured exclusions, and drawing no distinction between uninsured and underinsured motorist coverage.

The dissenting opinion characterizes the Kluiter case as upholding the exclusionary clause “on the sole basis of an Iowa statute. . . .” We believe that is a misconception of the opinion. While Iowa does have a statute which authorizes such exclusions, that was not the basis for the decision. The statutory authorization was merely a threshold observation and not part of the court’s analysis. Rather, the Kluiter court looked at whether the exclusion was within that authorization, and then to whether it was violative of it or the public policy it reflected. In fact, the opinion points out previous Iowa cases where other exclusions were considered but found to be invalid because they were violative of the statute and public policy.

As to the appellant’s argument that the minority view has waned, the reasoning of the Idaho court in Dullenty, supra, is pertinent:

Sheer numbers of decisions of other jurisdictions one way or the other on any given question are of course not controlling on this Court, and the decisions are persuasive only as they contain analysis and reasoning which recommends itself to this Court.
Unfortunately, few of the opinions of other courts which have addressed the issue, regardless of the result reached, contain what we perceive as any in-depth analysis or reasoning. Most of the opinions which hold that exclusionary clauses to otherwise uninsured motorist coverage are void as against a statutory public policy, merely state that as a fact, i.e., “everyone knows” that the legislature in enacting uninsured motorist statutes intended that an insured is covered when injured by an uninsured motorist in all circumstances, whether the insured be riding in the named vehicle, in an unnamed but owned vehicle, while occupying a vehicle not owned by the household, while a pedestrian, while sitting on his front porch, while riding a camel or horse, or while bounding on a pogo stick.
On the other hand, opinions holding such exclusionary clauses to be valid most often refer to the inequity of allowing a person who insures one vehicle with an insuranee carrier to obtain a “free ride” by thereby obtaining coverage by that same carrier on one, two, or a fleet of vehicles upon which he has paid no premium to the carrier. Some courts upholding the validity of such exclusionary clauses opine that rewarding a plaintiff who himself is operating an uninsured vehicle is contrary to legislative policy.

In Dullenty there were separate carriers, whereas here both vehicles were insured by the same carrier. But that is not controlling, as explained in Dullenty.

. . .a person is more likely to be occupying an owned vehicle than he is to be occupying a vehicle owned by someone else. Hence, an insurance carrier may be willing to assume risks which it perceives as relatively slight, i.e., being damaged by an uninsured motorist while occupying a non-owned vehicle, without an increase in premium. It might be unwilling to insure against a risk it perceives as substantial without an increase in premium. If an insurer is required to insure against a risk of an undesignated but owned vehicle. . .it is thereby required to insure against risks of which it is unaware, unable to underwrite, and unable to charge a premium therefor.

The Dullenty court reasoned further that if appropriate exclusions are not upheld, the substantially increased risk of an owned-but-not insured vehicle becomes a “free ride” by the insured because the insurer would be paying benefits on the second vehicle for which it received no premiums. The insurance company would in effect provide coverage up to the specified policy limits for two vehicles at a premium calculated for one vehicle.

The identical problem arises when the same insurance company issues both policies, only here the exposure by the insurance company is slightly different. The insurer receives a premium for two cars, but in an amount only calculated to cover the risk and policy limits for each individual car, not for the combined coverage for two cars on each policy. Consequently, the insured still benefits from a “free-ride” in the form of double coverage for each vehicle at a premium priced on single coverage.

To the same effect, see 8C J. Appleman, Insurance Law and Practice § 5078.35 and § 5106 (1981) and (Supp. 1991). The author supports the reasoning underlying Dullenty and our previous holdings on exclusions and criticizes the position taken in other jurisdictions. Appleman characterizes the former as “correct” and sound from a common sense and actuarial standpoint, and finds it preferable from a policy standpoint. The premium can be computed on known risks and be appropriately charged to the insured requesting the increased risk. Thus, the cost and choice is that of the insured “and that construction seems to be more than fair.” J. Appleman § 5078.35 at 204.

Recently the Iowa Supreme Court cited Kluiter with approval and discussed its holding as follows:

When an “owned-but-not-insured” clause comes into play, the insured has control of the vehicle and the coverage on it. If a person decides to buy a small amount of underinsured motorist coverage for it, Kluiter holds that the insured must live with that choice.

See also Chaffin v. Kentucky Farm Bureau Insurance Co., 789 S.W.2d 754 (Ky. 1990); and Veach v. Farmers Ins. Co., 460 N.W.2d 845 (Iowa 1990) (dissenting opinion). The dissent notes that Chaffin overrules an earlier case on which we relied in Crawford, supra. However, it must be noted that Chaffin came from a sharply divided court and the three dissenting justices take the majority to task in that the only reason for the reversal was a change in court personnel, stressing that “the insureds paid separate premiums and were entitled to, and could reasonably expect, separate coverage, not double coverage.’’'’ (Our emphasis.) If we were to disallow the exclusions in question, the insurance companies would have to spread the increased (and unknown) risk among all insureds, regardless of the risk or circumstances of each case, the end result being that multi-car owners would be acquiring insurance at rates subsidized by single-car owners — a result we deem neither desirable nor compatible with public policy.

A discussion of the current status of owned-but-not-insured exclusions in other jurisdictions is found in Nationwide Mutual Insurance Co. v. Hampton, 935 F.2d 578 (3rd Cir. 1991). In upholding an exclusion, the Hampton court points out the motor vehicle responsibility and insurance act under consideration was designed not only to insure compensation for all victims, but to address the rising consumer cost of automobile insurance “created in part by the substantialnumber of uninsured motorists who contributed nothing to the pool of insurance funds from which claims were paid. ... We discern no legislative intent to prohibit insurance companies from furthering this purpose by placing reasonable restrictions in their own policies.” (Our emphasis.) In Herrick v. Liberty Mutual Fire Insurance Co., 274 N.W.2d 147, 202 Neb. 116 (1979), the court stated there was not an overriding public policy discernible in uninsured motorist statutes that would protect an individual with “unreasonable expectations” of his insurance coverage. In Perrell v. Columbia, 306 U.S. 533 (1991), the court noted in an analogous setting that public policy would protect an innocent third party where it would not protect an insured.

Here, we conclude that the exclusion in this case is reasonable. It excludes a material, unassumed risk for which the insurance company could be expected to charge a higher premium, and it would be unfair to ask other insureds to share the cost of the increased exposure. We believe this rationale to be sound and we find no basis to change a position that has been in place since Holcomb v. Farmers Insurance Exchange, supra, was decided almost twenty years ago. The legislature has met several times since then and twice since our more recent holding in Crawford and has taken no action to overturn or modify the rule established in those cases. Further, when the legislature passed the underinsured motorist provision in Ark. Code Ann. § 23-89-209 (1987), (the counterpart to our earlier uninsured statute) it made no change in the basic law, nor gave any indication of other than full agreement with this court’s interpretation of those statutes.

As to the law in other jurisdictions, we find it to be in a transitional stage and the jurisdictions in the minority have not diminished. We find a number of cases aligned to the position we have taken: Nationwide Mutual v. Hampton, supra; Union Insurance Co. v. Stanage, 454 N.W.2d 736 (S.D. 1990); Williams-Diehl v. State Farm; 793 P.2d 587 (Colo.App. 1989); Deel v. Sweeny, 383 S.E.2d 92 (W.Va.1989); Kluiter v. State, supra; Clark v. State Farm, 743 P.2d 1227 (Utah 1987); Dullenty v. Rocky Mountain Insurance, supra; New Hampshire Insurance Group v. Harbach, 439 So.2d 327 (Fla. 1983); Equitable Insurance Co. v. Williams, 620 S.W.2d 608 (Tex. Ct. App. 1981); Arguello v. State Farm Mutual, 599 P.2d 587 (Colo. App. 1989); Herrick v. Liberty Mutual Fire Insurance, supra; Hill v. Nationwide Mutual, 535 S.W.2d 327 (Tenn. 1976). As noted in Nationwide, supra, some courts have adopted the majority position only to have the legislatures enact statutes explicitly permitting these exclusion clauses.

As a final point, appellants insist the trial court erred in holding the exclusion was not ambiguous. We do not find that to be the case and note that almost identical language was held clear and unambiguous in Williams-Diehl v. State Farm, supra.

For the reasons stated, the judgment is affirmed.

Corbin, J., dissents.

Donald L. Corbin, Justice,

dissenting. The majority extends the discredited reasoning of Holcomb v. Farmers Ins. Exch., 254 Ark. 514, 495 S.W.2d 155 (1973), to deny full compensation to Arkansans who have paid multiple insurance premiums in consideration for coverage under multiple underinsured motorist provisions. More appalling is the majority’s extensive reliance on Dullenty v. Rocky Mountain Fire and Casualty Co., 111 Idaho 98, 721 P.2d 198 (1986), a case in which the Idaho Supreme Court specifically reserved the stacking issue presented in this case:

We do not speak to and specifically reserve the question in a circumstance . . . where an insured under two or more motor vehicle liability policies, each issued by the same carrier, and each of which insures a separate vehicle, and in each of which policies issued by the same carrier the insured has elected to and paid a premium for uninsured motorist coverage.

Id. at 106-7, 721 P.2d at 206-7. The issue answered affirmatively in Dullenty was whether an insurance carrier could exclude coverage under an “owned but not insured” clause when the insured elected to pursue coverage from that carrier for an incident that occurred in another owned vehicle, despite the vehicle’s coverage by a separate carrier under a policy that likewise provided uninsured motorist coverage. Neither Dullenty nor Holcomb and its progeny addressed the concerns that arise when an insured or her representative seeks recovery on two policies with underinsured motorist coverage, both of which were purchased from the same carrier.

While I disagree with the results in both Dullenty and the Holcomb line of cases, two distinguishing factors in this case militate even more strongly in favor of mandating coverage. First, the Clampits paid an additional premium to obtain additional underinsured motorist coverage. This additional paid consideration eliminates any supposed prejudice to State Farm under the “free ride” theory advanced by the Dullenty opinion and relied upon by the majority of this court. Rather, the “stacking” rule is entirely consistent with the economics of a contractual relationship. Justice Stevens pointed this out in his concurring opinion in Allstate Ins. Co. v. Hague, 449 U.S. 302 (1981), a choice-of-law arising out of an attempt by an insured’s spouse to “stack” the uninsured motorist coverage on three automobiles. “[T]he [stacking] rule is consistent with the economics of a contractual relationship in which the policyholder paid three separate premiums for insurance coverage for three automobiles, including a separate premium for each uninsured motorist coverage.” Id. at 328 (Stevens, J., concurring).

When underinsured motorist coverage is at stake, the second distinguishing feature in this case, it seems particularly unfair to uphold “owned but not insured” exclusionary clauses. Underinsured motorist coverage is specifically designed to fully compensate the insured when the tortfeasor’s coverage meets the minimum amount required by law but does not provide sufficient compensation to the insured victim. The majority concedes the distinction in underinsured and uninsured coverage, yet chooses to rely on this court’s reaffirmance of Holcomb, supra, in Crawford v. Emcasco Ins. Co., 294 Ark. 569, 745 S.W.2d 132 (1988). The majority’s reasoning seems circular since the Crawford court also relied on Dullenty, supra, and upheld the exclusionary clause because the insurance company did not even have knowledge of the vehicle involved in the incident. The present case is distinguishable, as pointed out above, because State Farm received premiums for the very coverage it now declines to pay. As a result, “the coverage bought, paid for and reasonably expected is illusory.” Chaffin v. Kentucky Farm Bureau Ins. Co., 789 S.W.2d 754 (Ky. 1990), (overruling Safeco Ins. Co. of America v. Hubbard, 578 S.W.2d 49 (Ky. 1979), relied on by this court in Crawford, supra).

The majority also relies on Kluiter v. State Farm Mut. Auto. Ins., 417 N.W.2d 74 (Iowa 1987). However, the Iowa Supreme Court upheld the exclusionary clause in Kluiter on the sole basis of an Iowa statute that.expressly permitted insurance companies to avoid duplicate coverage. The Arkansas Legislature has not been so generous to the insurance industry, and I object to the majority’s usurpation of the legislature’s prerogative. See Calvert v. Farmers Ins. Co. of Arizona, 144 Ariz. 291, 296, 697 P. 2d 684, 689 (1985) (“Any gaps in uninsured motorist protection dependent on location of the insured should be sanctioned by the Legislature and not by this Court”); State Farm Mut. Auto. Ins. Co. v. Hinkel, 87 Nev. 478, 483, 488 P.2d 1151, 1154 (1971) (“[s]uch an amendment would be the prerogative and responsibility of the legislature and not the function of this court”).

In sum, I believe “anti-stacking” exclusionary clauses on underinsured motorist coverage deny Arkansans policyholders their reasonable expectations of full compensation. By so denying, these exclusions violate the public policy of this state. Accordingly, I dissent.

       Our underinsured motorist statute, Ark. Code Ann. § 23-89-209 (1987), provides:
      (a) Every insurer writing automobile liability insurance covering liability arising out of the ownership, maintenance, or use of any motor vehicles in this state shall provide underinsured motorist coverage to the named insured unless rejected in writing by the insured. The coverage shall enable the insured or the insured’s legal representative to recover from the insurer the amount of damages for bodily injury or death to which the insured is legally entitled from the owner or operator of another motor vehicle. Underinsured motorist coverage shall be at lease equal to the limits prescribed for bodily injury or death under § 27-19-605. Coverage of the insured pursuant to the underinsured motorist coverage shall not be reduced by the tortfeasor’s insurance coverage except to the extent that the injured party would receive compensation in excess of his damages.
      (b) For purposes of this section, private passenger automobile liability insurance shall be defined pursuant to § 23-89-301.


author: Steele Hays, Justice.

text:
    Thomas MILLER v. STATE of Arkansas
    CR 91-271
    827 S.W.2d 149
    Supreme Court of Arkansas
    Opinion delivered April 6, 1992

      Honey & Honey, P.A., by: Charles L. Honey, for appellant.

      Winston Bryant, Att’y Gen., by: Teena L. White, Asst. Att’y Gen., for appellee.
   Steele Hays, Justice.

Appellant Thomas Miller was charged with four counts of violating the Arkansas Controlled Substance Act involving possession with intent to deliver cocaine and marijuana on March 1 and October 31, 1990. One count of possession of marijuana was dismissed by nolle proseque and the jury returned a verdict of guilty on the remaining counts, imposing consecutive sentences of fifty years in the aggregate. On appeal Thomas presents four points of error, none of which prevail.

I

The first assertion of error has to do with the denial of a motion for a mistrial prompted by remarks of counsel for the state during the opening statement. Evidently, the prosecutor referred to a drug charge pending against Thomas in Louisiana charging him with possession of cocaine on October 22, 1990. Counsel for the defendant objected on the ground that Thomas was not yet convicted and there was an extended conference with the trial judge at the bench, the outcome being that the judge sustained the objection, instructed counsel to avoid further reference to the Louisiana charge, and reserved judgment as to whether some collateral aspects of the incident might be admissible later in the trial. Defense counsel at that point moved for mistrial, which was denied.

The remarks themselves are not reported, only the discussion which followed. Whether they were proper under Ark. R. Evid. 404(b), relevant to intent, as the prosecutor argued, or improper, as appellant contends, need not concern us. The trial court sustained the objection and no further comment was made. We have frequently held that mistrial is a drastic recourse and should be ordered only when the fundamental fairness of the trial itself has been manifestly affected. Snell v. State, 290 Ark. 501, 721 S.W.2d 628 (1986). The trial judge instructed these jurors according to AMI 101 that statements of counsel were not to be treated as evidence and any such statements not supported by the evidence should be disregarded. We think that admonition was entirely adequate to the occasion.

II

A second argument concerns a segment of appellant’s testimony during cross-examination.

Q. Mr. Miller, isn’t it true that the reason that you are in this van is that you didn’t want your car to be taken from you, do you? You don’t want to lose any of your property in the cocaine business. Isn’t that right?
A: I lost my property.
Q: Up here?
A: Yes.
Q: Which property did you lose up here?
A: The ‘89 GMC.
Q: When did that happen?
A: No. No, I take that back. No, I didn’t lose any.
Q: You lost that some place else.
A: I lost that some place else.
Q: You didn’t lose the vehicle up here did you?
A: No.

Appellant argues that this testimony, coupled with the prosecutor’s reference to the Louisiana charge, is so prejudicial as to mandate a reversal. That seems debatable at best, but the problem is there was no objection at any point in the appellant’s cross-examination. New tenets are more firmly established than the rule requiring a contemporaneous objection in order to preserve a point for review on appeal. Watson v. State, 290 Ark. 484, 720 S.W.2d 310 (1986).

Ill and IV

Appellant’s final arguments are that the evidence was not sufficient to sustain the convictions on Count II (possession of cocaine on October 31,1990, with intent to deliver) and on Count III (possession of marijuana on March 1, 1990, with intent to deliver). We do not address these arguments because they are procedurally barred for lack of a motion for a directed verdict at the close of the case. Ark. R. Crim. P. 36.21(b).

Affirmed.


author: David Newbern, Justice.

text:
    Michael Steven CRAIL v. STATE of Arkansas
    CR 91-287
    827 S.W.2d 157
    Supreme Court of Arkansas
    Opinion delivered April 6, 1992

      Steven D. Oliver, for appellant.

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

The appellant, Michael Steven Crail, was convicted of possession of marijuana, fleeing, resisting arrest, and possession of drug paraphernalia. He contends the paraphernalia charge should have been dismissed due to vagueness of the law. He also argues he was illegally detained and arrested without probable cause and that evidence thus obtained should have been suppressed and his conviction of fleeing should be dismissed. We hold the drug paraphernalia law is not unconstitutionally vague. We also hold that the initial detention and subsequent arrest of Crail were not unlawful. Thus we find no error in admitting the evidence obtained as a result of the detention and arrest, and we have no reason to dismiss the fleeing charge. He does not challenge the resisting arrest conviction.

Crail was a passenger in a vehicle which was stopped at a field sobriety checkpoint in Montgomery County. As officers approached the vehicle they noticed the odor of marijuana coming from a car window. Office Black testified he observed Crail attempting to hide two hand-rolled cigarettes under his leg and ordered him from the car. As Crail got out of the car, he stuffed the contents of his hand in his mouth and swallowed.

Officer Black placed Crail under arrest and began taking him to a patrol car. Crail jerked loose and ran but was caught and subdued. Black then searched Crail for weapons and found a bag of marijuana. Crail was again searched at the Montgomery County Jail, and a small white pipe was retrieved from his right rear pocket. The pipe was sent to the State Crime Laboratory where it was found to have been used to smoke marijuana.

1. Paraphernalia

Crail moved to dismiss the paraphernalia possession charge, asserting an inconsistency between the law which characterizes possession of a small quantity of marijuana (first offense) as a misdemeanor, Ark. Code Ann. § 5-64-401(c) (Supp. 1991), and possession of an otherwise legal pipe as a felony, Ark. Code Ann. § 5-64-403(c)(l) (1987). He contended generally that the inconsistency constituted a violation of his rights to equal protection of the laws and due process of law, and more specifically that it violated the prohibition against vagueness.

He pursues his void for vagueness argument here, citing Grayned v. City of Rockford, 408 U.S. 104 (1972); Winters v. New York, 333 U.S. 507 (1948); Connally v. General Construction Co., 269 U.S. 385 (1926); and Garner v. White, 726 F.2d 1274 (8th Cir. 1984). He contends the General Assembly’s inconsistency in assessing the seriousness of these offenses has sent a mixed message to the public.

We have previously held the paraphernalia statute is not vague. In Moore v. State, 297 Ark. 296, 761 S.W.2d 894 (1988), the appellants argued that the term “paraphernalia” as used in Ark. Code Ann. § 5-64-101(12) (Supp. 1991) was vague. We explained that the detailed definitions found in the Statute give adequate notice of conduct constituting the offense.

The cases cited approach the vagueness problem by looking to the language of a challenged statute and considering whether a challenged part is subject to a variety of interpretations thus failing to give fair notice of prohibited conduct. Crail does not challenge any part of our Statute. He argues that, while he knew that possession of a small quantity of marijuana was prohibited, he also knew that the consequences for violation of that prohibition were not serious. He did not know, however, that possession of a pipe used to smoke marijuana had more serious consequences. This is the inconsistency which he asserts renders the statutory scheme vague.

Crail cites nothing in support of his conclusion that the Statutes interrelate so as to create confusion. There is no assertion that, standing alone, either Statute is vague. Each adequately describes that which is prohibited. Nor does Crail assert that Ark. Code Ann. § 5-64-403 (1987), which provides the penalties associated with violation of the prohibitions, fails to advise one of the consequences. There is no vagueness here. Crail’s failure to understand the consequences of possessing the pipe is attributable to his ignorance of the law. That is no excuse, Michalek v. Lockhart, 292 Ark. 301, 730 S.W.2d 210 (1987); Woods v. Lockhart, 292 Ark. 37, 727 S.W.2d 849 (1987), and the challenge to the statutory scheme is without merit.

2. Stop and arrest

Crail argues the search was the result of an unlawful, warrantless arrest, thus the contraband seized as a result should have been suppressed. His argument is that the smell of marijuana was not probable cause to make an arrest. In reviewing the trial court’s denial of a motion to suppress evidence, we make an independent examination based upon the totality of the circumstances and reverse only if the decision is clearly against the preponderance of the evidence. The facts are viewed in the light most favorable to the State. Ryan v. State, 303 Ark. 595, 798 S.W.2d 679 (1990).

The car in which Crail was riding was stopped at a checkpoint which had been set up to stop all vehicles to examine for intoxicated drivers. The checkpoint detention was not a constitutional violation. Michigan Department of State Police v. Sitz, 110 S.Ct. 2481 (1990). When Black asked Crail to come out of the car, and Crail would not identify the objects in his hand but ate them, Black had reasonable cause to suspect the substance was marijuana. Probable cause for a warrantless arrest exists when the facts and circumstances within an officer’s knowledge are sufficient to permit a person of reasonable caution to believe that an offense has been committed by the person to be arrested, Roderick v. State, 288 Ark. 360, 705 S.W.2d 433 (1986). There thus seems to be little merit in the assertion that there was not reasonable cause for the detention and search.

Arkansas R. Crim. P. 4.1 (a)(iii) provides “a law enforcement officer may arrest a person without a warrant if the officer has reasonable cause to believe that such person has committed any violation of the law in the officer’s presence.” Misdemeanor possession is a violation of the law, and the action took place in the presence of the officer. Rule 4.1 (c) provides “an arrest shall not be deemed to have been made on insufficient cause . . . solely on the ground that the officer ... is unable to determine the particular offense which may have been committed.” Even if the officer didn’t know exactly what Crail ate, he had reasonable cause to suspect it was a prohibited substance. There was cause for the detention, arrest, and search.

3. Fleeing

Crail argues the fleeing charge was the fruit of unlawful detention. As we have concluded the detention was not unlawful, there is no need to discuss the argument.

Affirmed.