author: Annabelle Clinton Imber, Justice. Jim Hannah, Justice,

text:
    Gregory SHORT v. STATE of Arkansas
    CR 01-1269
    79 S.W.3d 313
    Supreme Court of Arkansas
    Opinion delivered June 27, 2002

      James Dunham, for appellant.

      Mark Pryor, Att’y Gen., by: Clayton K. Hodges, Ass’t Att’y Gen., for appellee.
   Annabelle Clinton Imber, Justice.

Appellant Gregory Short was convicted of first-degree sexual abuse in violation of Ark. Code Ann. § 5-14-108(a)(4) (Repl. 1997) (repealed). He raises two points on appeal: (1) The trial court erred in ruling that first-degree sexual abuse is a strict-liability crime; and (2) the trial court erred by excluding proffered testimony regarding the victim’s sexual conduct. We disagree and affirm.

This appeal raises the issue of whether the State has the burden of proving a culpable mental state in connection with a charge of first-degree sexual abuse involving a victim under the age of fourteen. As the sufficiency of the evidence to support the conviction has not been challenged, we recite the facts only as they relate to the issues on appeal. Mr. Short was originally charged with raping a child less than fourteen years of age in violation of Ark. Code Ann. § 5-14-103(a)(4) (Repl. 1997) (superseded by Ark. Code Ann. § 5-14-103(a)(1)(C)(i) (Supp. 2001)). After the State agreed to reduce the charge to first-degree sexual abuse in violation of Ark. Code Ann. § 5-14-108(a)(4), Mr. Short waived his right to a trial by jury.

At the outset and before the State amended its original charge, Mr. Short moved, in limine, to allow testimony about the victim’s alleged sexual conduct on the day of the offense in order to prove that he was reasonable in concluding that the youthful victim, A.L., was at least fourteen years old. Mr. Short was twenty-six years old on August 7, 2000, when he and a friend, Melvin Willfond, gave A.L. (age thirteen) and her friend, R.H. (age fifteen), a ride to register for the next school year. Mr. Short stated that he thought A.L. was fourteen or fifteen years old, and he denied having any sexual contact with her. A.L. testified that she was thirteen years old in August 2000 and that she told Mr. Short she wanted to have sex with him and, in fact, did have sexual contact with him. The trial court denied Mr. Short’s motion in limine and excluded the proffered testimony about A.L.’s sexual conduct.

At trial, after the close of the State’s case-in-chief, Mr. Short moved for a directed verdict alleging that the State failed to meet its burden of proof. Specifically, he argued that the State failed to prove the element of mental culpability as required by Ark. Code Ann. § 5-2-203 (Repl. 1997). The trial court ruled that first-degree sexual abuse is a strict-liability offense and denied his directed-verdict motion. At the close of all the evidence, Mr. Short renewed his motion for directed verdict, which was again denied. The trial court found Mr. Short guilty of first-degree sexual abuse and sentenced him to 60 months probation conditioned upon serving 120 days in the Pope County Detention Center. Following the entry of judgment, Mr. Short filed a timely notice of appeal.

I. First-Degree Sexual Abuse

The' first point on appeal involves an issue of statutory interpretation. We construe criminal statutes strictly, resolving any doubts in favor of the defendant. Hagar v. State, 341 Ark. 633 19 S.W.3d 16 (2000). We also adhere to the basic rule of statutory construction, which is to give effect to the intent of the legislature. Id. We construe the statute just as it reads, giving the words their ordinary and usually accepted meaning in common language, and if the language of the statute is plain and unambiguous, and conveys a clear and definite meaning, there is no occasion to resort to rules of statutory interpretation. Id. Additionally, in construing any statute, we place it beside other statutes relevant to the subject matter in question and ascribe meaning and effect to be derived from the whole. Id.

Mr. Short was convicted of sexual abuse in the first degree in violation of section 5-14-108(a)(4) of the Arkansas Criminal Code. At the time the offense was committed, the statute provided that “[a] person commits sexual abuse in the first degree if . . . [b]eing eighteen (18) years old or older, he engages in sexual contact with a person not his spouse who is less than fourteen (14) years old.” Ark. Code Ann. § 5-14-108(a)(4) (Repl. 1997) (repealed). As to offenses where the criminality of the conduct depends on the victim being less than fourteen, the chapter of the Arkansas Criminal Code that defines sexual offenses also provides as follows: “When the criminality of conduct depends on a child being below the age of fourteen (14) years, it is no defense that the actor did not know the age of the child, or reasonably believed the child to be fourteen (14) years of age or older.” Ark. Code Ann. § 5-14-102(b) (Repl. 1997).

While this court has not specifically addressed the issue of whether first-degree sexual abuse in violation of section 5-14-108(a)(4) is a strict-liability offense, we have considered the mens rea requirement for the offense of statutory rape; that is, rape committed by engaging in sexual intercourse or deviate sexual activity with a person less than fourteen years of age. Clay v. State, 318 Ark. 550, 886 S.W.2d 608 (1994) (construing Ark. Code Ann. § 5-14-103(a)(3) (Supp. 1993), later recodified at Ark. Code Ann. § 5-14-103(a)(4) (Repl. 1997) (superseded)). The language used in the statutory rape provision and in section 5-14-108(a)(4) is similar, and both offenses are subject to the defense restriction set forth in section 5 — 14—102(b) . Once again, we construe statutes relating to the same subject together and in harmony if possible. Hogar v. State, supra. The 1988 Supplemental Commentary to Ark. Code Ann. § 5-14-103 (Repl. 1995) notes that the rape statute “now imposes strict liability where the victim is less than 14 years of age.” A strict-liability offense is “[a] crime that does not require a mens rea element . . . .” Black’s Law Dictionary 378 (7th ed. 1999).

In Clay v. State, where the issue was whether joinder was proper for multiple counts of rape by force and statutory rape, we analyzed the different mens rea requirements for these crimes and concluded that the offense of statutory rape is a strict-liability crime:

In two of the cases the charge was rape, and the proof in those cases showed that the appellant had sexual intercourse by force. The intent necessary for conviction in these cases was that the appellant “purposely” forced the victims to have sex with him. Ark. Code Ann. §§ 5-2-202 & 5-14-103 (Repl. 1993). However, three of the charges were quite different as they involved rape by deviate sexual activity with persons less than fourteen years of age. These are “strict liability” crimes. See Ark. Code Ann. Commentaries § 5-14-103(a)(3) (1989). In these cases the State does not have to prove that the accused “purposely” had sex with a person under fourteen years of age. A person who has sexual intercourse or deviate sexual activity with one less than fourteen years of age is guilty of the crime, regardless of how old he or she thought the victim was, and regardless of whether there was consent. There are affirmative defenses, but it is up to the defendant to prove them. The point is that because the definitions of the different crimes require different culpable mental states, joinder in the case at bar did not show an overall proof of intent.

Clay v. State, 318 Ark. at 558-59, 886 S.W.2d at 613. Two more recent cases, while not directly addressing the issue of strict liability, have reaffirmed that knowledge of the victim’s age is not an element of statutory rape. In connection with our statutory interpretation of the knowledge requirement for the offense of second-degree battery, this court explained: “The language of the statute is clear and unmistakable and differs significantly from statutes such as the rape statute which merely provide that the victim be a certain age and not that the defendant know what that age is.” Sansevero v. State, 345 Ark. 307, 312, 45 S.W.3d 840, 843 (2001). Likewise, another recent decision involving a rape charge under section 5-14-103(a)(4) reiterated that:

[i]t was no defense that Ridling did not know Kimberly’s age, or that he reasonably believed Kimberly to be fourteen years of age or older. . . . Certainly, even if he had been apprised that she told the other men that she was over the age of fourteen, such knowledge would be of no benefit to his defense in light of § 5-14-102(b).

Ridling v. State, 348 Ark. 213, 221, 72 S.W.3d 466 (2002). In Miller v. State, we explained the underlying policy: “Our public policy, as fixed by the General Assembly, is manifest that victims younger than age 14 are beneath the age of consent and cannot be willing accomplices to sexual intercourse.” 318 Ark. 673, 677, 887 S.W.2d 280, 282 (1994).

Notwithstanding the precedent established by our decisions in Clay, Sansevero, and Ridling, Mr. Short contends that first-degree sexual abuse is not a strict-liability offense because sections 5-2-203 and 5-2-204 require a culpable mental state — purposely, ■knowingly, or recklessly — if the statute does not prescribe one. “Except as provided in § 5-2-204(2), if the statute defining an offense does not prescribe a culpable mental state, culpability is nonetheless required and is established only if a person acts purposely, knowingly, or recklessly.” Ark. Code Ann. § 5-2-203(b) (Repl. 1997). Section 5-2-204 provides in pertinent part:

(b) A person does not commit an offense unless he acts with a culpable mental state with respect to each element of the offense that requires a culpable mental state.
(c) However, a culpable mental state is not required if:
(2) An offense defined by a statute not a part of this code clearly indicates a legislative intent to dispense with any culpable mental state requirement for the offense or for any element thereof.

Ark. Code Ann. § 5-2-204(b) & (c)(2) (Repl. 1997).

This court has applied section 5-2-203 (b) on three occasions to require a culpable mental state, or mens rea, where the statute did not specifically prescribe one. In 1990, section 5-2-203(b) was used to engraft a mens rea requirement onto Ark. Code Ann. § 5-73-104(a) (1987), a statute that criminalizes the possession of metal knuckles. State v. Setzer, 302 Ark. 593, 791 S.W.2d 365 (1990). Six years later, this court reaffirmed that section 5-73-104(a) was not a strict-liability crime, and that section 5-2-203(b) mandated a culpable mental state. Yocum v. State, 325 Ark. 180, 925 S.W.2d 385 (1996). In that same year, we held that a statute criminalizing the operation of a gambling house, Ark. Code Ann. § 5-66-103 (Repl. 1993), was not unconstitutional as overbroad merely because it failed to specify a mens rea. McDougal v. State, 324 Ark. 354, 922 S.W.2d 323 (1996). In so holding, the McDougal court stated that “even though § 5-66-103 itself imposes no requirement that the offender have a culpable mental state, Ark. Code Ann. § 5-2-203 (b) (Repl. 1993) grafts such a requirement onto the statute . . . .” Id. at 360, 922 S.W.2d at 326.

The decisions in Setzer, Yocum, and McDougal are nonetheless inapposite to the case now before us. The statutes at issue in those cases did not eliminate a culpable mental state as a defense; whereas, the statutory rape provision and section 5-14-108(a)(4) are subject to a specific statute that eliminates knowledge, or even a reasonable belief, of the victim’s age as a defense. Ark. Code Ann. § 5-14-102(b). If this court were to accept Mr. Short’s argument and hold that the State must introduce evidence of a defendant’s knowledge of the victim’s age in a prosecution for first-degree sexual abuse, such a holding would effectively circumvent section 5-14-102(b). Moreover, it would simply be absurd to graft a mens rea element of “purposeful” or “knowing” onto the statutory rape provision or section 5-14-108(a)(4) when a defendant’s knowledge of the victim’s age cannot be a defense. Under such an interpretation of the statutes, the State would introduce evidence of a defendant’s knowledge of the victim’s age; whereas, the defendant would not be allowed to defend or rebut the State’s proof because “it is no defense that the actor did not know the age of the child.” Ark. Code Ann. § 5-14-102(b). In short, how can a culpable mental state be relevant for the prosecution, but irrelevant for the defense? Likewise, it would be inconsistent to graft a “reckless” mens rea onto the statutes, where even if a defendant “reasonably believed” that the victim was fourteen, such a belief would still not be a defense to the crime. Adding any of the three culpable mental states onto section 5-14-108(a)(4) of the first-degree sexual abuse statute would lead to an absurd result. That we will not do. Citizens to Establish a Reform Party in Arkansas v. Priest, 325 Ark. 257, 926 S.W.2d 432 (1996). Accordingly, we hold that the trial court did not err in ruling that the State was not required to prove Mr. Short’s knowledge of the victim’s age in a prosecution for first-degree sexual abuse under Ark. Code Ann. § 5-14-108(a)(4) (Repl. 1997) (repealed).

II. Exclusion of Testimony Regarding the Victim’s Sexual Behavior

For his second point on appeal, Mr. Short argues that the trial court erred in excluding evidence of A.L.’s sexual behavior and statements that occurred on the day of the offense. He claims first that the proffered evidence was not “prior” sexual conduct and, therefore, was not barred by the rape-shield statute. Ark. Code Ann. § 16-42-101(b) (Repl. 1999). This argument is without merit. The phrase “prior sexual conduct” does not have the narrow meaning suggested by Mr. Short. For purposes of the rape-shield statute, we have interpreted the phrase broadly enough to encompass sexual conduct that occurs prior to the trial. Laughlin v. State, 316 Ark. 489, 972 S.W.2d 848 (1994); Flurry v. State, 290 Ark. 417, 720 S.W.2d 699 (1986); Kemp v. State, 270 Ark. 835 (1980).

In a related argument, Mr. Short also suggests that the rape-shield statute should only apply to jury trials. We disagree. The purpose of the rape-shield statute is to shield victims of sexual offenses from the danger of public humiliation. See Graydon v. State, 329 Ark. 596, 953 S.W.2d 45 (1997). Even a bench trial is open to the public and is a matter of public record.

Finally, Mr. Short claims the proffered evidence was relevant to support his “reasonable” belief that the victim was fourteen years of age or older. We reject this proposition for the reasons already stated under the first point.

Affirmed.

Jim Hannah, Justice,

concurring. I concur with the majority’s holding that first-degree sexual abuse under these conditions is a strict-liability crime, but I write to address the trial court’s exclusion of the evidence of A.L.’s suggestive behavior and statements from the day of the crime. Two points should be made on this issue. First, according to the trial court’s order issued April 12, 2001, the trial court excluded this evidence because it was “not relevant and, therefore, not admissible.” Although the trial court issued this order after Mr. Short filed a motion pursuant to the rape-shield statute’s procedural requirements for admission of certain evidence, this order is unclear as to whether the evidence was excluded based on the protection of the rape-shield statute, or whether it was excluded under Ark. R. Evid. 401 merely because it was irrelevant to the issue of A.L.’s age. The majority opinion addresses this issue by applying the rape-shield statute. However, it is not at all clear that the trial court ruled on this issue based on the rape-shield statute, and to assume as much is not warranted by the trial court’s order.

Second, I do not believe that the rape-shield statute’s exclusion of evidence of “prior sexual conduct” applies to this type of evidence. Mr. Short requested that the trial court allow him to present evidence of A.L.’s sexually suggestive comments and actions on the day of and leading up to the incident to show that Mr. Short reasonably believed that A.L. was at least fourteen years old. The majority opinion implies that “prior sexual conduct” is equivalent to sexually suggestive behavior and statements other than those defined by the statutes because the opinion, and the parties themselves, speak of these behaviors as “prior sexual conduct.” Arkansas’s Rape-Shield Statute, contained in Ark. Code Ann. § 16-42-101 (Repl. 1999), makes inadmissible

opinion evidence, reputation evidence, or evidence of specific instances of the victim’s prior sexual conduct with the defendant or any other person, evidence of a victim’s prior allegations of sexual conduct with the defendant or any other person, which allegations the victim asserts to be true, or evidence offered by the defendant concerning prior allegations of sexual conduct by the victim with the defendant or any other person if the victim denies making the allegation. . . .

Ark. Code Ann. § 16-42-101 (b). The rape-shield statute defines “sexual conduct” as “deviate sexual activity, sexual contact, or sexual intercourse, as those terms are defined by § 5-14-101.” Under Ark. Code Ann. § 5-14-101, these terms include some form of physical action and are defined as:

(1) “Deviate sexual activity” means any act of sexual gratification involving:
(A) The penetration, however slight, of the anus or mouth of one person by the penis of another person; or
(B) The penetration, however slight, of the labia majora Or anus of one person by any body member or foreign instrument manipulated by another person;
* * *
(8) “Sexual contact” means any act of sexual gratification involving the touching, directly or through clothing, of the sex organs, or buttocks, or anus of a person or the breast of a female;
(9) “Sexual intercourse” means penetration, however slight, of the labia majora by a penis;. . .

In this case, Mr. Short attempted to introduce evidence from the day in question that A.L. had made several comments to Mr. Short and Mr. Willfond about wanting to “lose her virginity” and wanting to have sex with either or both of them. The question then becomes whether this evidence involves “evidence of the victim’s prior sexual conduct” as defined by the statutes, or whether it involves some other type of behavior. The majority attaches the term “sexual conduct” to A.L.’s actions here, but again, “sexual conduct” under the rape-shield statute involves some form of physical touching as defined in Ark. Code Ann. § 5-14-101. As such, statements made by a person regarding wanting to engage in these types of conduct are not the same as actually engaging in the conduct itself.

This discussion is purely academic in this case, however, because I agree with the trial court’s exclusion of this evidence on grounds of relevancy. A.L., due to her age, could not consent to engage in sexual relations with Mr. Short, and whether she spoke of her interest in doing so is of no import because this was a strict-liability crime. However, my concern with the majority opinion is prospective regarding how this case will be applied to other rape or sexual misconduct cases involving victims who are not minors. A possible application of this decision will be that an alleged victim’s sexually suggestive comments and behavior, other than those defined as “sexual conduct” in the rape-shield and related statutes, will be excluded improperly under the rape-shield statute as “sexual conduct.” Whether this type of evidence could be excluded under another term in the statute or on grounds of relevancy is a separate question, and one not at issue here. However, this behavior is not “sexual conduct” as it is defined under our statutes, and it should not be addressed under the rape-shield statute as such.

       This section was repealed by 2001 Ark. Acts 1738. The present law addressing this type of criminal conduct appears in Ark. Code Ann. §§ 5-14-124 to 5-14-127 (Supp. 2001). The corresponding offense would be the class B felony of second degree sexual assault. “A person commits sexual assault in the second degree if the person . . . [b]eing eighteen (18) years of age or older, engages in sexual contact with the sex organs of another person, not the person’s spouse, who is less than fourteen (14) years of age[.]” Ark. Code Ann. § 5-14-125(a)(3) (Supp. 2001).

       The rape statute in effect at the time of the crime provided in part: “A person commits rape if he engages in sexual intercourse or deviate sexual activity with another person . . . Who is less than fourteen (14) years of age. It is an affirmative defense to prosecution under this subdivision (a)(4) that the actor was not more than two (2) years older than the victim[.]” Ark. Code Ann. § 5-14-103(a)(4) (Repl. 1997) (superseded).

       The concurring opinion also raises the question of whether the proffered evidence is “sexual conduct” as that term is defined under the rape-shield statute. This point was not advanced by Mr. Short, so we are precluded from addressing the issue.


source: Caselaw Access Project

author: Annabelle Clinton Imber, Justice.

license: Public Domain

text:
    THE/FRE, INC., d/b/a Pay-Less Check Advance, Reap, Inc., d/b/a Pay-Less Check Advance, and Fred Pearson, Individually and d/b/a Pay-Less Check Advance v. Sheila MARTIN, Rick Ingram, and Jimmie Sue Spencer, Individually and o/b/o A Class of Similarly Situated Persons
    01-1371
    78 S.W.3d 722
    Supreme Court of Arkansas
    Opinion delivered June 27, 2002

      Mixon Parker & Hurst, PLC, by: Donald L. Parker, II, and Harry S. Hurst, Jr.; and Wright, Lindsey & Jennings, LLP, by: Claire Shows Hancock, for appellants.

      Morgan & Turner, by: Todd Turner; and Orr, Scholtens, Willhite & Averitt, PLC, by: Chris Averitt, for appellees.
   Annabelle Clinton Imber, Justice.

. This is one of a number of similar cases to come before this court involving check-cashing businesses. Sheila Martin, Rick Ingram, and Jimmie Sue Spencer are representatives of a class of customers that utilized the deferred-presentment check-cashing services of THE/FRE, Inc., d/b/a Pay-Less Check Advance, Reap, Inc., d/b/a Pay-Less Check Advance, and Fred Pearson, individually and d/b/a Pay-Less Check Advance (hereinafter referred to jointly as “THE/FRE”). On August 17, 2001, the trial court denied THE/FRE’s motion to compel arbitration. THE/FPE raises two points on appeal. First, THE/FPE contends that the trial court erred in determining that the arbitration provision was unenforceable for lack of mutuality. Second, THE/FRE asserts that the trial court erred in ruling that the arbitration provision was unconscionable. We hold that the arbitration provision is unenforceable for lack of mutuality and affirm.

The facts of this case are not in controversy. The class members utilized THE/FRE’s deferred-presentment check-cashing services and paid fees, which if deemed to be interest would include annual interest rates of 300% to over 700%. Two types of agreements were used with customers — one had an arbitration clause and the other did not. Only the agreements with ah arbitration clause are at issue in the instant appeal.

The points THE/FRE raises on appeal are identical to those raised and rejected by this court in the companion case of The Money Place, LLC v. Barnes, 349 Ark. 411, 78 S.W.3d 714 (2002). The same arbitration provisions are included in both the THE/FRE and The Money Place Deferred Presentment Agreements. The trial court reviewed both agreements, considered identical motions to compel arbitration, heard similar arguments, and issued virtually identical orders — only the names of the parties differed. Accordingly, we deem it unnecessary to reiterate in the instant case what has been said in the companion case bearing upon these points, and we adopt and incorporate herein by reference the reasoning set forth in The Money Place, LLC v. Barnes, supra. See Loghry v. Rogers Group, Inc., 348 Ark. 369, 72 S.W.3d 499 (2002). The trial court did not err in denying THE/FRE’s motion to compel arbitration. Because we hold the arbitration provision unenforceable based upon a lack of mutuality, we need not reach the issue of unconscionability.

Affirmed.

Glaze, J., not participating.


author: Ray Thornton, Justice.

text:
    F&G FINANCIAL SERVICES, INC. d/b/a Cash Advance Now, and Cash Advance of Jonesboro, LLC, d/b/a Cash Advance Now v. Dorothy BARNES and Jimmie Sue Spencer, Individually and o/b/o A Class of Similarly Situated Persons
    01-1356
    78 S.W.3d 720
    Supreme Court of Arkansas
    Opinion delivered June 27, 2002

      Mixon, Parker, & Hurst, PLC, by: Donald L. Parker, II and Harry S. Hurst, Jr.; Wright, Lindsey & Jennings, LLP, by: Claire Shows Hancock, for appellants.

      Orr, Scholtens, Willhite, & Averitt, PLC, by: Chris A. Averitt; Morgan & Turner, by: Todd Turner, for appellees.
   Ray Thornton, Justice.

This caseis one of several similar cases involving check-cashing businesses using agreements containing an arbitration clause and the denial of their motions to compel arbitration. See THE/FRE, Inc. v. Martin, 349 Ark. 503, 78 S.W.3d 722 (2002); Tay-Tay, Inc. v. Young, 349 Ark. 369, 78 S.W.3d 721 (2002); The Money Place, LLC v. Barnes, 349 Ark. 411, 78 S.W.3d 714 (2002).

Appellees, Dorothy Barnes and Jimmie Sue Spencer, representatives of a class of similarly situated individuals, filed this action in February 2001, alleging that the check cashing transactions in which they engaged with appellants were actually loans and that the fees charged by appellants were usurious interest, in violation of Article 19, section 13, of the Arkansas Constitution.

All these cases involve a similar fact pattern. Appellees used the services of check-cashing businesses whose contracts contained arbitration clauses. We note that the issues presented in these cases involve substantially the same arbitration clause and basic contract, and the analysis of the issues and applicable principles of law lead us to the same conclusion and holding.

Appellant check-cashers sought by motion to compel arbitration and to stay the proceedings in the trial court. The trial court denied the motion, finding a lack of mutuality in the arbitration agreement under the reasoning of Showmethemoney Check Cashers, Inc. v. Williams, 342 Ark. 112, 27 S.W.3d 261 (2000). The trial court further found that the arbitration agreement was unenforceable on the basis of unconscionability. The order was entered on August 17, 2001, and it is from that order that appellants appeal.

Appellants argue two points on appeal. First, appellants argue that the trial court erred in determining that the arbitration agreement was unenforceable for its lack of mutuality. Second, appellants argue that the trial court erred in determining that the arbitration clause was unconscionable. We affirm the trial court, holding that the trial court did not err in determining that the arbitration agreement was unenforceable for lack of mutuality. Having affirmed the trial court’s decision that the arbitration clause was unenforceable, we need not address other issues such as the unconscionability of the arbitration clause.

The two points on appeal in The Money Place, supra, are identical to the issues raised in instant case, both at the trial court level and now. Because the agreements contained the same arbitration clause, and because the issues are the same, we adopt and incorporate by reference the reasoning set forth in The Money Place, supra.

Accordingly, we affirm.

Glaze, J., not participating.


text:
    THE/FRE, INC., d/b/a Pay-Less Check Advance, Reap, Inc., and Fred Pearson, Individually and d/b/a Pay-Less Check Advance v. Sheila MARTIN, Rick Ingram, and Jimmie Sue Spencer, Individually and o/b/o A Class of Similarly Situated Persons
    01-1373
    78 S.W.3d 723
    Supreme Court of Arkansas
    Opinion delivered June 27, 2002

      Mixpn, Parker, & Hurst, PLC, by: Donald L. Parker, II and Harry S. Hurst, Jr.; Wright, Lindsey & Jennings, LLP, by: Claire Shows Hancock, for appellants.

      Orr, Scholtens, Willhite, & Averitt, PLC, by: Chris A. Averitt, Jay Scholtens, and Kevin J. Orr; Morgan & Turner, by: Todd Turner, for appellees.
   Ray Thornton, Justice.

This isan interlocutory action. We have jurisdiction pursuant to Ark. R. App. P. — Civ. 2(a)(9). We conclude that, in accordance with recent cases establishing criteria for class certifications, the trial court did not abuse its discretion in certifying the class, and we affirm the trial court’s order.

On June 27, 2000, appellee, Sheila Martin, filed her complaint in this action. That complaint was amended on September 25, 2000, to include appellee, Rick Ingram, and again on January 12, 2001, to include appellee, Jimmie Sue Spencer. Appellees filed their action individually and on behalf of a class of similarly situated persons who have done business with appellants, THE/ FRE, Inc., d/b/a Pay-Less Check Advance (“Pay-Less”), Reap, Inc., Fred Pearson, individually, and d/b/a Pay-Less Check Advance, who engage in the check-cashing business in accordance with the Arkansas Check-Cashers Act, codified at Ark. Code Ann. § 23-52-104(b) (Repl. 2000). In their complaint, appellees alleged that the service fees charged in connection with check-cashing transactions are loans, and further alleged that such service fees are usurious, in violation of Article 19, section 13, of the Arkansas Constitution.

Appellee Martin engaged in business with the Pay-Less branch office located in Jonesboro. In her affidavit, Martin states that in December 1998, she gave Pay-Less a check in the amount of $230.00, which Pay-Less promised not to cash for two weeks. The amount financed was $200.00 with a finance charge of $30.00. In exchange, Pay-Less loaned her $200.00. ' Two weeks later, she was told by Pay-Less that she could pay off the check or pay an additional $30.00 to renew the loan. She opted to pay an additional $30.00. She further states that from December 1998 to June 1999, she renewed her loan with Pay-Less every two weeks. In June of 1999, Pay-Less required her to pay $33.33 instead of $30..00. She would pay $233.33 in cash to Pay-Less and write Pay-Less a check in the amount of $233.33. Pay-Less would then give her $200.00 and hold the check for two weeks. Martin continued renewing these payments until June of 2000. She states that by June, 2000, she made more than $1,100.00 in payments for the $200.00 loan, and she still owed $233.33 to Pay-Less. Her checking account included the name of appellee Ingram, and Ingram was the one who actually went to Pay-Less to renew the loan.

Appellee Ingram states similar facts in his affidavit.

Appellee Spencer engaged in transactions from the Pay-Less branch office in Jonesboro. In her affidavit, appellee Spencer states that in the fall of 1999, she gave Pay-Less a check in the amount of $233.33, which Pay-Less promised not to cash for two weeks. The amount financed was $200.00 with a finance charge of $33.33 at 434.480% interest. In exchange, Pay-Less loaned her $200.00 in cash. Two weeks later, Pay-Less increased her loan to $250.00 in exchange for a check in the amount of $288.89. Two weeks later, Pay-Less increased her loan to $300.00 cash in exchange for a check in the amount of $344.44. She further states that, when she returned to Pay-Less two weeks later, she was told that she could pay off the check or pay an additional $44.44 cash to renew the loan. She paid $344.44 in cash to Pay-Less and wrote Pay-Less a check in the amount of $344.44. Pay-Less then returned to her $300.00 in cash and agreed to hold the new check for $344.44 for two additional weeks. She continued making renewal payments until July of 2000.

On June 23, 2000, appellee Spencer signed a deferred presentment agreement with appellant that contained arbitration provisions. These arbitration provisions provide that all disputes between the parties shall be resolved by binding arbitration, except that both parties reserve the right to seek adjudication in a small claims tribunal for disputes within the scope of such tribunal’s jurisdiction. The agreement also provides that a customer waives his or her right to serve as a representative to participate as a member of a class of claimants in any lawsuit filed against appellants. Appellants moved to compel arbitration in this action and to stay the trial court proceedings, but the trial court denied the motion. The denial of that motion is the subject of a separate appeal before this court.

On October 23, 2000, appellees filed a motion to certify the class, alleging that the check-cashing transactions constitute loans, and the fees charged in connection with those loans are usurious and violative of Article 13, section 13 of the Arkansas Constitution. On August 17, 2001, the trial court granted appellees’ motion to certify the class. In its order, the trial court states:

The Court hereby defines, subject to subsequent modification and/or establishment of sub-classes, the class as follows: any and all persons who have engaged in deferred presentment transactions with the defendant check casher(s), anywhere in the State of Arkansas.

(Emphasis added.)

The trial court further found:

3. Plaintiffs experience with the defendant check casher(s) and the transaction alleged are typical of ah “check cashing” customers of defendants and transactions between such customers and defendants.
4. The class of persons... is so numerous that joinder of ah members is impracticable.
5. The claims of plaintiffs and asserted defenses are typical of the claims of the class.
6. Questions of law or fact common to the members of the class predominate over any questions affecting only individual members and that a class action is superior to other available methods for the fair and efficient adjudication of this matter.
7. Plaintiffs are adequate persons to serve as class representatives and should be appointed as representatives of the class.
8. Plaintiffs’ counsel have demonstrated their competency to serve as class counsel and possess the resources and expertise necessary to adequately represent the class and should be approved as class counsel.

On August 17, 2001, the trial court’s order was entered, and on September 17, 2001, appellants timely filed their notice of appeal. Appellants bring their appeal from this trial court’s order granting the certification of the class. • We review class certification under an abuse of discretion standard. Cheqnet Sys. v. Montgomery, 322 Ark. 742, 911 S.W.2d 956 (1995).

Appellants’ sole allegation of error is that the trial court erred in granting appellees’ motion for class certification. They argue that the requirements of Rule 23 of the Arkansas Rules of Civil Procedure are not met and that class certification should have been denied.

Rule 23 of the Arkansas Rules of Civil Procedure states:

(a) Prerequisites to Class Action. One or more members of a class may sue or be sued as representative parties on behalf of all only if (1) the class is so numerous that joinder of all members is impracticable, (2) there are questions of law or fact common to the class, (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class, and (4) the representative parties will fairly and adequately protect the interests of the class.
(b) Class Actions Maintainable. An action may be maintained as a class action if the prerequisites of subdivision (a) are satisfied, and the court finds that the questions of law or fact common to the members of the class predominate over any questions affecting only individual members, and that a class action is superior to other available methods for the fair and efficient adjudication of the controversy. As soon as practicable after the commencement of an action brought as a class action, the court shall determine by order whether it is to be so maintained. An order under this section may be conditional and it may be altered or amended before the decision on the merits.

Id. The law is well-settled that the six criteria for class certification, set out in Ark. R. Civ. P. 23(a) and (b) are: (1) numerosity, (2) commonality, (3) typicality, (4) adequacy, (5) predominance; and (6) superiority. USA Check Cashers of Little Rock, Inc. v. Island, 349 Ark. 71, 76 S.W.3d 243 (2002).

We have departed from the standard applied in federal rules by our decision in Mega Life & Health Ins. Co. v. Jacola, 330 Ark. 261, 954 S.W.2d 898 (1997), and its progeny where we have held that a rigorous analysis is not required for certification of a class in Arkansas. Id.

Flere, appellants challenge the adequacy of representation, typicality, predominance, and superiority requirements under Rule 23. The Rule 23 requirements of numerosity and commonality are not raised in this appeal.

I. Adequacy

First, appellants challenge the requirement of adequacy, which states that the “representative parties will fairly and adequately protect the interests of the class.” Ark. R. Civ. P. 23(a)(4). We have interpreted Rule 23(a)(4) to include three elements:

(1) the representative counsel must be qualified, experienced and generally able to conduct the litigation; (2) that there be no evidence of collusion or conflicting interest between the representative and the class; and (3) the representative must display some minimal level of interest in the action, familiarity with the practices challenged, and ability to assist in decision making as to the conduct of the litigation.

USA Check Cashers, supra (citing Mega Life & Health Ins. Co. v. Jacola, 330 Ark. 261, 954 S.W.2d 898 (1997)).

In their affidavits, appellees state that they are willing to serve as class representatives and that they can adequately and fairly protect the interests of the absent class members who have also engaged in similar transactions with Pay-Less. Appellees also state that their attorneys would fairly and competently represent the class. The attorneys also present affidavits in which they outline their credentials as having the ability to fairly and competently represent the class of absent class members. Absent a showing to the contrary, we may presume that the representative’s attorney will vigorously and competently pursue the litigation. Mega Life, supra (citing Herbert B. Newberg, Newberg on Class Actions, §§ 3.24, 3.42 (3d. ed. 1992)). Additionally, there is no evidence before us that appellees have a conflict of interest with other members of the class. Similar to our holding in USA Check Cashers, supra, the fact that appellee Spencer signed an agreement with an arbitration clause, while appellees Martin and Ingram had not, fails to show a conflict of interest with other class members. Therefore, the trial court did not err in finding that the first two criteria are met.

With regard to the third criterion regarding adequacy, we have held that the standard of adequacy is met if the representative displays a minimal level of interest in the action, familiarity with the challenged practices, and the ability to assist in litigation decisions. USA Check Cashers, supra. Here, the trial court found that appellees were adequate persons to serve as class representatives and that appellees’ counsel could adequately represent the class. Appellees state in their affidavits that their attorneys have discussed the duties of being a class representative, are willing to comply with those duties, have reviewed the pleadings in the case, have been informed of the case history, and that they are pleased with their attorneys’ representation. They have demonstrated that they have at least a minimal level of interest in the cause of action, under USA Check Cashers, supra. Therefore, we conclude that the trial court did not abuse its discretion in finding that appellees have fulfilled the adequacy requirement.

Appellants’ argument regarding appellant Pearson’s action of piercing the corporate veil is inappropriate for the present appeal. That is an issue to be resolved at a trial on the merits. The subject of this appeal strictly deals with whether a class was properly certified. We have repeatedly held that we will not delve into the merits of a case when reviewing an order denying or granting class certification. USA Check Casher, supra.

II. Typicality

Secondly, appellants argue that the trial court erred in finding that appellees do not meet the typicality requirement of Rule 23. Specifically, appellants argue that because appellants engaged in the check-cashing business prior to the enactment of the Arkansas Check Casher’s Act, codified at Ark. Code Ann. § 23-52-101 et seq. (Repl. 2000), appellees who did business with appellants after the act became effective are not typical of those members of the class who engaged in check-cashing transactions prior to the act.

Arkansas Rule of Civil Procedure 23(a)(3) requires that “the claims or defenses of the representative parties are typical of the claims or defenses of the class.” Id. Our case law is clear that the essence of the typicality requirement is the conduct of the defendants and not the varying fact patterns and degree of injury or damage to individual class members. BNL Equity Corp. v. Pearson, 340 Ark. 351, 10 S.W.3d 838 (2000). We have said that a representative’s claim is typical of the class members’ claim under Rule 23(a)(3) if the representative’s claim arises from the same wrong allegedly committed against the class. BPS Inc. v. Richardson, 341 Ark. 834, 20 S.W.3d 403 (2000); see also Cheqnet v. Montgomery, supra (holding that the typicality requirement was met when the class representative’s injuries and damages arose from the collection or attempt to collect for dishonored checks in violation of Arkansas statutory law).

In the present case, the common issue is whether these check-cashing transactions are considered loans and whether the fees charged in connection with those transactions are usurious in nature and violative of the Arkansas Constitution. Thus, each of these claims arises from appellants’ business practices. The fact that the transactional amounts may vary among class members does not make this action fail the typicality requirement. See Cheqnet, supra.

Because each of these common claims arose from the “same wrong,” allegedly committed by appellants, we hold that the trial court did not abuse its discretion in finding that appellees’ claims and asserted defenses are typical of the claims of the class.

III. Rule 23(b): superiority and predominance

For their last allegation of error, appellants argue that the trial court erred because the trial court certified a class consisting of all persons in Arkansas who have engaged in similar transactions with appellants. Specifically, appellants argue that resolving individual questions for each transaction will “overwhelm the court,” causing individual questions of fact to predominate over the common legal questions.

Arkansas Rule of Civil Procedure 23(b) includes the requirements of predominance and superiority. In USA Check Cashers, supra, we said:

This court has held with respect to superiority that the requirement is satisfied if class certification is the more “efficient” way of handling the case and if it is fair to both sides. Real efficiency can be had if common, predominating questions of law or fact are first decided, with cases then splintering for the trial of individual issues, if necessary.

Id. (citations omitted).

With regard to the superiority requirement, we also said in USA Check Cashers, supra, that the issues presented concern a fee in exchange for an agreement to defer presentment of the customer’s check for payment and whether that fee is usurious. Id. The same is true in the present case. Because of the pervasiveness of this issue in the transactions of all potential class members, it would be inefficient for “any and all persons who have engaged in deferred presentment transactions with [appellants]” to file individual suits. Further, we have held that a trial court can decertify a class should the action become too unwieldy. USA Check Cashers, supra. Therefore, the trial court did not abuse its discretion in finding that a class action is the superior method for adjudicating the class members’ claims.

With regard to the predominance requirement, we have said that common claims must predominate over any questions affecting only the individual members as required by Rule 23(b). USA Check Casher, supra. Appellees contend that “it is not necessary to determine when each transaction occurred, the terms of each transaction, the disclosures made to each customer, etc.” We agree. Appellants’ exhibits, including copies of Pay-Less’s deferred presentment agreements, reflect the disclosures, including the interest rate charged by appellants. The fact that individual issues and defenses may be raised by appellants regarding the recovery of individual members cannot defeat class certification. Therefore, we hold that the trial court did not abuse its discretion in finding that common issues predominate in this case, and that these common questions predominate over individual questions.

Based upon the recent precedent in our decisions, which allows a less-than-rigorous analysis for establishing class actions, and based upon our well-established standard of review, we affirm the trial court’s grant of class certification.

Affirmed.

Glaze, J., not participating.


author: Jim Hannah, Justice.

text:
    THE MONEY PLACE, LLC v. Dorothy BARNES
    01-1374
    78 S.W.3d 730
    Supreme Court of Arkansas
    Opinion delivered June 27, 2002

      Mixon, Parker, & Hurst, PLC, by: Donald L. Parker, II and Harry S. Hurst, Jr.; Wright, Lindsey & Jennings, LLP, by: Claire Shows Hancock, for appellant.

      Orr, Scholtens, Willhite, & Averitt, PLC, by: Chris A. Averitt, Jay Scholtens, and Kevin J. Orr; Morgan & Turner, by: Todd Turner, for appellee.
   Jim Hannah, Justice.

Appellant The Money Place, LLC, appeals the Craighead County Circuit Court’s certification of a class of plaintiffs, including Appellee Class Representative Dorothy Barnes, in this class-action lawsuit. In the fall of 2000, Barnes began using the services of The Money Place by presenting them a check in the amount of $344.44, for which she received $300 in cash in return. The interest or fee of $44.44 allowed her to keep the $300 for two weeks, at which time she had to pay $344.44. She then commenced anew, again presenting a check for $344.44, which they again agreed to hold for two weeks. Barnes continued to present new checks until January 2001. She alleges that the interest rate on the loans provided by The Money Place vary between 300 percent to 730 percent per annum.

On January 26, 2001, Barnes filed a class-action lawsuit against The Money Place alleging the loans by The Money Place violated the usury laws as provided in Article 19, Section 13 of the Arkansas Constitution and Ark. Code Ann. §§ 4-57-101 — 4-57-108 (Repl. 2001). On March 20, 2001, The Money Place filed a Motion to Compel Arbitration and Stay Proceedings based upon alleged valid and binding arbitration clauses in the Deferred Presentment Agreement. Barnes countered arguing that the agreement was void and that the arbitration clause was void and unconscionable. The trial court agreed with Barnes, and The Money Place appealed that decision. The trial court’s order in that appeal was affirmed by the court in The Money Place, LLC v. Dorothy Barnes, Individually and o/b/o a Class of Similarly Situated Persons, 349 Ark. 411, 78 S.W.3d 714 (2002) (“The Money Place I”).

On February 1, 2001, Barnes filed a Motion for Class Certification. The Money Place responded on March 7, 2001, arguing that Barnes failed to satisfy the requirements of Ark. R. Civ. P. 23 to establish the necessity for handling this matter as a class action. A hearing was held on June 22, 2001, at which counsel presented arguments to the court. The parties agreed that copies of depositions, including Barnes’s deposition, would be submitted in lieu of witness and party testimony at the hearing. Following the hearing, the trial court issued its order on August 17, 2001, certifying the class. The Money Place filed its appeal on September 17, 2001.

The question of whether the class-action elements in Ark. R. Civ. P. 23(a) and (b) have been satisfied is a matter within the broad discretion of the trial court, and we will not reverse the trial court’s decision absent an abuse of that discretion. Advance America v. Garrett, 344 Ark. 75, 40 S.W.3d 239 (2001); Mega Life & Health Ins. Co. v. Jacola, 330 Ark. 261, 954 S.W.2d 898 (1997); Direct Gen. Ins. Co. v. Lane, 328 Ark. 476, 944 S.W.2d 528 (1997); Farm Bureau Mutual Ins. Co. v. Farm Bureau Policy Holders & Members, 323 Ark. 706, 918 S.W.2d 129 (1996); Cheqnet Sys., Inc. v. Montgomery, 322 Ark. 742, 911 S.W.2d 956 (1995). However, the determination is purely a procedural question. BNL Equity Corp. v. Pearson, 340 Ark. 351, 10 S.W.3d 838 (2000). Neither the trial court nor the appellate court may delve into the merits of the underlying claim when deciding whether the requirements of Rule 23 have been met. Id.; see also Fraley v. Williams Ford Tractor & Equip. Co., 339 Ark. 322, 5 S.W.3d 423 (1999) (holding that trial court may not consider whether plaintiff will ultimately prevail); Mega Life & Health Ins. Co., supra.

I. Sufficiency of Trial Court’s Order

As an initial matter, The Money Place asserts that the trial court “failed to undertake the required rigorous analysis” in considering the class-certification request, and that the court-merely repeated the requirements in Rule 23 without discussion or analysis. The Money Place argues that the United States Supreme Court requires a “rigorous analysis” to ensure that all requirements of Rule 23 have been met. See Amchem Products, Inc. v. Windsor, 521 U.S. 591 (1997). The Money Place’s argument, however, is without merit for two reasons.

First, The Money Place’s argument that the trial court’s order is not specific enough is not preserved for appeal. As we noted in Mega Life, 330 Ark. at 267;

This issue is governed by Ark. R. Civ. P. 52(a) which states that “findings of fact and conclusions of law are unnecessary on decisions of motions under these Rules,” but that the court shall enter such specific findings and conclusions upon the request of a party. It does not appear from the abstract that Mega ever requested that the court make such specific findings in regard to the predominance and superiority requirements of Rule 23(b).
Moreover, Rule 52(b) states that upon a motion of a party made no later than ten days after the entry of judgment, the court may amend its findings of fact or make additional findings. Thus, Mega had ten days after the order of certification was entered to ask the trial court to make additional findings regarding the Rule 23(b) elements. Mega, however, failed to make such a request. Because Mega failed to request specific findings in regard to the Rule 23(b) elements either prior to or after the entry of the order of certification, we hold that it has waived this issue on appeal. See Smith v. Quality Ford, Inc., 324 Ark. 272, 920 S.W.2d 497 (1996); Brown v. Seeco, Inc., 316 Ark. 336, 871 S.W.2d 580 (1994) .

In this case, as in Mega Life, The Money Place neither requested specific findings of fact for the issues in Rule 23, nor did it file a motion pursuant to Rule 52(b) after the entry of the court’s judgment to make additional findings on the issues. Therefore, this argument is waived on appeal.

Second, we do not require that the trial court conduct a “rigorous analysis” under Rule 23 as The Money Place asserts. Again, this issue was addressed in Mega Life, supra, in which this court stated:

We also must respond to the dissent’s contention that the certification order must be reversed because the trial court failed to conduct a “rigorous analysis” of the Rule 23(b) requirements of predominance and superiority. In support of this argument, the dissent cites Arthur v. Zearley, 320 Ark. 273, 895 S.W.2d 928 (1995) . The Arthur opinion, however, is devoid of any language requiring the trial court to conduct a “rigorous analysis.” In fact, we are unable to find any Arkansas case requiring the trial court to conduct a rigorous analysis, or for that matter, any case that describes exactly what such an analysis entails. Instead, we have consistently held that we will reverse a trial court’s certification order only when the court has abused its discretion. Direct Gen. Ins. Co. v. Lane, 328 Ark. 476, 944 S.W.2d 528 (1997); Farm Bureau Mutual Ins. Co. v. Farm Bureau Policy Holders, 323 Ark. 706, 918 S.W.2d 129 (1996). In making this determination, we have consistently reviewed the evidence in the record to determine whether it supports the trial court’s ultimate conclusion regarding certification. See, e.g., Direct, supra; Arthur, supra. We have not, as argued by the dissent, previously required the court to enter into the record a detailed explanation of why it concluded that certification was proper, and we refuse to impose' such a requirement upon the trial court at this time.

Mega Life, 330 Ark. at 269. Therefore, the trial court’s order is adequate because “[i]mplicit in the trial court’s order granting class certification is the court’s ultimate conclusion that all six elements of class certification have been satisfied,” and that while The Money Place waived its right to get specific 'findings on the issue, it has not “waived its right to contest the trial court’s ultimate conclusion that all six elements have been satisfied as required by Ark. R. Civ. P. 23.” Mega Life, 330 Ark. at 268.

II. Rule 23

Ark. R. Civ. P. 23 (2001) provides that a trial court may certify a class only if the following conditions are met:

(1) the class is so numerous that joinder of all members is impracticable, (2) there are questions of law or fact common to the class, (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class, and (4) the representative parties will fairly and adequately protect the interests of the class.

Ark. R. Civ. P. 23(a) (2001). Pursuant to subsection (b), the court must also find that:

. . . the questions of law or fact common to the members of the class predominate over any questions affecting only individual members, and that a class action is superior to other available methods for the fair and efficient adjudication of the controversy.

Ark. R. Civ. P. 23(b) (2001). In this case, The Money Place challenges on appeal the elements of adequacy of the class representative and typicality under Rule 23(a) and the elements of predominance and superiority under Rule 23(b).

A. Rule 23(a)

As Barnes argues in her brief, The Money Place only challenges the issues of the adequacy of the class representative and typicality in Rule 23(a). The first of these challenges addresses the issue of adequacy under Rule 23(a)(4), and this court has previously interpreted Rule 23(a)(4) to require three elements:

(1) the representative counsel must be qualified, experienced and generally able to conduct the litigation; (2) there be no evidence of collusion or conflicting interest between the representative and the class; and (3) the representative must display some minimal level of interest in the action, familiarity with the practices challenged, and ability to assist in decision making as to the conduct of the litigation.

BPS Inc. v. Richardson, 341 Ark. 834, 844, 20 S.W.3d 403 (2000). The Money Place directs its focus in this first issue on the adequacy of the class representative and does not address the adequacy of the class counsel. This court has noted that the “adequacy of representation” element is satisfied if the representatives display a minimal level of interest in the action, familiarity with the challenged practices, and ability to assist in litigation decisions. Id. In addition, a trial court may also consider it necessary, in its analysis of this requirement for class certification, to resolve any questions of reluctancy on the part of named class representatives to comply with requirements of disclosure or participation in discovery requests during the pendency of the litigation. Id.

In this case, Barnes testified in a deposition on May 15, 2001, regarding her involvement as the proposed class representative in this case and in a case with F&G Financial Services, another check-cashing business. The Money Place points out that Barnes, a pay-roll clerk by trade, could not remember all of the check-cashing businesses with whom she had done business and that she appeared to have difficulty initially understanding some of the legal terms associated with being the class representative in this case. Plowever, Barnes’s testimony indicated that she clearly understood the process and practice of the check-cashing system, she wanted to “represent all the other people who have been there, and to stop this usury on these loans,” she spoke with her attorneys at least every two weeks, she read all documents that they sent to her, and she was able to take off work for whatever time necessary for the trials in these cases.

The trial court in its order certifying the class found that Barnes was an “adequate” person to serve as class representative, and we agree. Despite her lack of understanding of some legal terms involved in this case, Barnes clearly showed a minimal level of interest in the action in that she contacted her attorneys to pursue a claim against The Money Place, gave her deposition, reads all pleadings sent to her by her attorneys, and stays in regular contact with her attorneys regarding the progress of this and her other cases. Barnes also was able to describe the check-cashing practices that gave rise to this action, and understood the cycle of payment of “fees” or “interest” at percentages beyond the usury rate. Finally, Barnes’s ability to assist in the decision making as to the conduct of the litigation is highlighted by her testimony that she is willing to work with her attorneys to pursue all relief she and others may be due. She meets the minimal bar set by the third requirement derived from Rule 23(a)(4), as noted in BPS, Inc., supra, and in USA. Check Cashers of Little Rock, Inc. v. Island, 349 Ark. 71, 76 S.W.3d 243 (2002).

The Money Place also argues that Barnes cannot establish that there are no conflicting interests between her and other potential class members, referring to the second requirement derived from Rule 23(a)(4). The Money Place cites Barnes’s inability to remember or keep straight all of the check-cashing businesses with whom she has done business, and argues that her involvement as class representative in at least two, if not more, cases will detract from her ability to represent each class adequately. Flowever, again, Barnes testified that she is willing to take the time needed to represent the class in this and other cases, is familiar with the practices involved, and stays in contact with her attorneys. Furthermore, The Money Place’s argument that the arbitration agreement signed by Barnes creates a conflict with potential class members who did not sign such an agreement is meritless now because we affirmed the trial court’s determination that the agreement is unenforceable. See, The Money Place I, supra. Therefore, this conflict does not exist.

In its second challenge under Rule 23(a), The Money Place asserts that Barnes’s claims are not typical of the claims of the class because Barnes signed an arbitration agreement requiring her to settle her dispute by arbitration, and she also agreed that she would not act as a class representative in a class action against The Money Place. However, again, the arbitration agreement is unenforceable as we decided in the recent appeal on that issue in this case. Furthermore, Barnes’s claims are typical, if not identical except for the amount of damages, to the claims of each class member. Basically, each class member is asserting a claim of usury dependent on this court resolving the questions of whether these transactions are “loans” with “interest” and, if so, whether the interest charged is usurious. We stated in USA Check Cashers, supra:

Class members, of course, may opt out of the class if they are not satisfied with the complaint or remedies asserted. See, e.g., Luebbers v. Advance Am. Cash Advance Ctrs. of Arkansas, Inc., 348 Ark. 567, 74 S.W.3d 608 (2002); Haberman v. Lisle, 317 Ark. 600, 884 S.W.2d 262 (1994). Although we held in BPS Inc. v. Richardson, supra, that class certification is not appropriate when a putative class representative is subject to unique defenses that threaten to become the focus of the litigations, that is not the case in the matter before us. The general defenses asserted against Island and Carter such as estoppel, waiver, and statute of limitations may be just as applicable to other members of the class and may warrant the establishment of subclasses. They are not unique to the appellees.

Id., 349 Ark. at 81. While this discussion in USA Check Cashers stemmed from the appellant’s challenge to the appellees’ adequacy as class representatives, the reasoning is equally applicable in a discussion on typicality of claims or defenses of the class. Each class member in this lawsuit will be asserting the same claim of usury against The Money Place. The Money Place’s individual defenses or claims against particular class members or subsets of class members does not defeat the initial usury inquiry. Therefore, we affirm the trial court’s decision that Barnes’s claims are typical of the class’s claims.

B. Rule 23(b)

In its final point, The Money Place argues that Barnes failed to satisfy the requirements of Rule 23(b) that “questions of law or fact common to the members of the class predominate over any questions affecting only individual members, and that a class action is superior to other available methods for the fair and efficient adjudication of the controversy.” Specifically, The Money Place argues that the trial court will “be faced with literally hundreds of individual questions of fact” if the class is certified, and resolving these questions will overwhelm the trial court and predominate over the one question common to all class members ■ — ■ whether the fees charged are interest under Arkansas law. Barnes responds that this one question is the reason this case is proper for class certification in that whether these fees constitute interest affects every class member because the fees would be usurious by law.

This court has already addressed the issues of superiority and predominance in a check-cashing case in USA Check Cashers, supra, and our holding in that case applies here. With regard to superiority, this court stated in USA Check Cashers:

This court has held with respect to superiority that the requirement is satisfied if class certification is the more “efficient” way of handling the case and if it is fair to both sides. See BPS, Inc. v. Richardson, supra. Real efficiency can be had if common, predominating questions of law or fact are first decided, with cases then splintering for the trial of individual issues, if necessary. See SEECO, Inc. v. Hales, supra; Lemarco, Inc. v. Wood, 305 Ark. 1, 804 S.W.2d 724 (1991).
Here, the circuit court ruled that because the potential recovery to each member of the class was expected to be relatively small and would not justify contingency fee cases nor cases in which attorneys charge on an hourly basis, a class action was the superior method for adjudicating these claims. The overarching issue in this case concerns USA Check Cashers’ uniform practice of requiring a fee in exchange for an agreement to defer presentment of the customer’s check for payment and whether that fee is usurious interest. Because of the pervasiveness of this issue in the transactions of all potential class members, it would be economically and judicially inefficient to require all putative class member, of which there could be as many as 2,680, to file individual suits in a small claims court.
To be sure, USA Check Cashers may have defenses available to it as to various individual members or even subclasses, but this is no reason to deny certification. To the contrary, this court has held that the class-action procedure is judicially efficient in resolving not only common claims but also common defenses. See, e.g., SEECO, Inc. v. Hales, supra; Mega Life & Health Ins. Co. v. Jacola, supra. The Proposed Trial Management Plan submitted to the court by Island and Carter certainly contemplates resolving common defenses in Phase I, as evidenced by the language of the proposal: “The Court may also determine in Phase I of the trial any common defenses asserted by the defendant, e.g., whether class members who entered into a transaction after the filing of this lawsuit are estopped from asserting a claim.” Finally, as to manageability, this court has made it abundantly clear that a circuit court can always decertify a class should the action become too unwieldy. See BNL Equity Corp. v. Pearson, supra; Fraley v. Williams Ford Tractor & Equip. Co., supra.
We conclude that a class action is the superior method for adjudicating the class members’ claims.

USA Check Cashers, 349 Ark. at 82-83. The court went on to address the issue of predominance, stating:

For its final point, USA Check Cashers argues that the claims of individual claimants depend on each claimant’s particular interaction with the company. Additionally, the company asserts that because individual defenses would become the focus of the litigation, class certification is inappropriate.
We have already addressed this point in large part. USA Check Cashers appears to be challenging the predominance requirement, and the starting point for our analysis is whether a common wrong has been alleged against USA Check Cashers respecting all class members. See BPS, Inc. v. Richardson, supra. Again, as already underscored in this opinion, there are overarching common questions present in this case as the circuit court outlined in its order. Those questions include: whether USA Check Cashers’ transactions were loans with interest accruing and whether those transactions violated the Arkansas Constitution. We conclude that these common questions predominate over individual questions. The mere fact that individual issues and defenses may be raised by the company regarding the recovery of individual members cannot defeat class certification where there are common questions concerning the defendant’s alleged wrongdoing which must be resolved for all class members. New-berg on Class Actions speaks direcdy to this point:
Challenges based on the statutes of limitations, fraudulent concealment, releases, causation, or reliance have usually been rejected and will not bar predominance satisfaction because these issues go to the right of a class member to recover, in contrast to underlying common issues of the defendant’s liability.
SEECO, Inc. v. Hales, 330 Ark. at 413, 954 S.W.2d at 240 (quoting 1 Herbert B. Newberg, Newberg on Class Actions § 4.26, at 4-104 (3d ed. 1992)).
Again, common issues, as far as alleged wrongdoing and defenses, predominate in this case, and we affirm the trial court on this point.

USA Check Cashers, 349 Ark. at 83-84. Clearly, this court has already addressed the general issues of superiority and predominance in a check-cashing case, and The Money Place, raises no new issues for consideration, nor does it raise any new arguments as to why these elements cannot be met here. As such, the reasoning this court employed in USA Check Cashers addressing the provisions of Rule 23(b) applies equally to this case. Therefore, we affirm the trial court’s certification of the class.

Glaze and Imber, JJ., not participating.

       By motion granted January 10, 2001, the record in this appeal was consolidated with the record on appeal in 01-1361, The Money Place L

       Barnes asserts that The Money Place actually challenges three of the Rule 23(a) elements: adequacy of the class representative, typicality, and commonality. However, neither The Money Place’s nor Barnes’s brief discuss the element of commonality, nor has The Money Place challenged the elements of numerosity or adequacy of class counsel under Rule 23(a). As such, we will not address those elements here.


author: Per Curiam.

text:
    STATE of Arkansas v. Belynda Faye GOFF
    CR 01-1051
    79 S.W.3d 320
    Supreme Court of Arkansas
    Opinion delivered June 27, 2002

      Mark Pryor, Att’y Gen., by: Vada Berger, Ass’t Att’y Gen., for appellant.

      Hatfield & Lassiter, by: Jack T. Lassiter, for appellee.
   Per Curiam.

Appellee was convicted in the Circuit Court of Carroll County of first-degree murder for the death of her husband, Stephen Goff, and sentenced to life imprisonment. This court affirmed the determination of appellee’s guilt but reversed her sentence on appeal. Goff v. State, 329 Ark. 513, 953 S.W.2d 38 (1997). On remand for resentencing, a second jury sentenced appellee to life imprisonment, and this court affirmed on appeal. Goff v. State, 341 Ark. 567, 19 S.W.3d 579 (2000).

Appellee subsequently filed a timely petition for post-conviction relief pursuant to Ark. R. Crim. P. 37. In her petition, appellee claimed that one of her trial attorneys, Charles Davis, rendered ineffective assistance of counsel by preparing an affidavit in support of appellee’s application for her husband’s life insurance proceeds, which asserted that her husband “appeared to have been severely beaten somewhere in Carroll County and returned home and left in the doorway.” According to appellee, Davis should have known “that there existed no evidence that [Goff] was killed outside the apartment.” Appellee further alleged that Davis compounded his ineffectiveness when, after the affidavit was introduced into evidence by the prosecution, he failed to withdraw as counsel and testify in support of appellee’s testimony that the language of the affidavit was counsel’s creation.

A hearing was held, and at its conclusion, appellee moved to amend her petition to include a claim that Davis was ineffective for failing to adequately proffer the testimony of her brother, Chris Lindley, or to call him to testify. According to the amended petition, Goff had tried to involve Lindley in an arson scheme. It was alleged that a few days before the murder, Lindley refused to participate in the scheme, at which time, Goff expressed fear for his life if he did not do the job. Appellee also alleged that following Goffs death, Lindley received a threatening telephone call, during which the caller stated that Lindley would end up like Goff if he told anyone about the arson scheme. The circuit court allowed the amendment and conducted a second hearing on the petition. The petition was granted, and the State filed a notice of appeal.

The Supreme Court enunciated the standard for assessing the effectiveness of counsel in Strickland v. Washington, 466 U.S. 668, 687 (1984):

A convicted defendant’s claim that counsel’s assistance was so defective as to require reversal of a conviction or death sentence has two components. First, the defendant must show that counsel’s performance was deficient. This requires showing that counsel made errors so serious that counsel was not functioning as the “counsel” guaranteed the defendant by the Sixth Amendment. Se'cond, the defendant must show that the deficient performance prejudiced the defense. This requires a showing that counsel’s errors were so serious as to deprive the defendant of a fair trial, a trial whose result is reliable. Unless a defendant makes both showings, it cannot be said that the conviction or death sentence resulted from a breakdown in the adversary process that renders the result unreliable.

Thus, a defendant must first show that counsel’s performance “fell below an objective standard of reasonableness,” id. at 688, and second, that the errors “actually had an adverse effect on the defense.” Id. at 693.

Ineffective assistance of counsel cannot be established by a mere showing of error by counsel. Thomas v. State, 330 Ark. 442, 448, 954 S.W.2d 255, 258 (1997) (citing Huls v. State, 301 Ark. 572, 785 S.W.2d 467 (1990)). In reviewing counsel’s performance, we must indulge in a strong presumption that counsel’s conduct falls within the range of reasonable professional assistance. Noel v. State, 342 Ark. 35, 38, 26 S.W.3d 123, 125 (2000). To rebut this presumption, one must show that there is a reasonable probability that, but for counsel’s errors, the factfinder would have had a reasonable doubt respecting guilt in that the decision reached would have been different absent the errors. Id. A reasonable probability is one that is sufficient to undermine confidence in the outcome of the trial. Id. In making this determination, we must consider the totality of the evidence before the factfinder, and we will not reverse the denial of postconviction relief unless the lower court’s findings are clearly against the preponderance of the evidence. Id. Applying these standards, it is clear that the circuit court erred in granting appellee postconviction relief; therefore, the decision must be reversed.

As mentioned, appellee’s first claim was that Davis was ineffective for allowing appellee to make certain statements in an insurance affidavit. Appellee testified at the Rule 37 hearing that before she was charged with murder, Davis suggested that she file an application for accidental death benefits, because a jury would consider it suspicious if she did not do so. According to appellee, she filled out the affidavit using language provided by Davis. However, Davis testified that he had nothing to do with the preparation of the affidavit and saw it for the first time at trial. According to Davis, he referred appellee to Jeff Watson, his law partner, to handle her insurance claims, and Watson agreed to do so. A letter was submitted with appellee’s application for insurance benefits, signed by Watson. According to Davis, he never spoke to Watson about the affidavit nor did he know whether Watson helped appellee prepare the affidavit.

The prosecution questioned appellee about the affidavit and relied on it in' closing argument in the guilt phase of the original trial. Appellee claims that Davis was ineffective because the language in the affidavit conflicted with physical evidence suggesting that Goff was killed inside the apartment, and in turn, was used against her. According to appellee, Davis should have withdrawn as counsel and testified at trial that the language was his, not that of the appellee. The language in the affidavit, that Goff was beaten outside of the apartment and returned there, was consistent with appellee’s defense of general denial. Davis testified at the Rule 37 hearing that he had no knowledge of the preparation of the affidavit, including whether his co-counsel, Watson, prepared it. Even if it is assumed that Davis was responsible for the language, his determination that the affidavit was not harmful because it was consistent with appellee’s version of the crime and thus, need only be addressed by her testimony, was a strategic decision. Matters of trial tactics and strategy are not grounds for a finding of ineffective assistance of counsel. Lee v. State, 343 Ark. 702, 715, 38 S.W.3d 334, 343 (2001). Although a strategy may be poor or mistaken, that does not make it deficient for purposes of an ineffective-assistance claim. Johnson v. State, 321 Ark. 117, 131, 900 S.W.2d 940, 948 (1995). '

In addition, appellee failed to prove that either Davis or Watson would have corroborated her testimony concerning the affidavit. As mentioned, Davis testified that he had no knowledge of the preparation of the affidavit; therefore, he would not have corroborated appellee’s version at trial. Moreover, appellee did not call Watson to testify at the Rule 37 hearing, despite having the burden of proof on this point. See Mitchael v. State, 309 Ark. 151, 157, 828 S.W.2d 351, 355 (1992). Appellee has not proven that either attorney would have corroborated her version of events; therefore, the circuit court erred in granting relief on the basis that either of the attorneys was ineffective for failing to offer such testimony. The circuit court also erred by concluding, alternatively, that Davis was ineffective because he could have amended the affidavit when he learned that it would be used against appellee. However, the court found that Davis never saw the affidavit before trial. And, even if he could have amended it, this would not have prevented the original affidavit from being used against appellee as well as the amendment, which would have shown that appellee changed her story.

Appellee also fails to show how she was prejudiced by Davis’s alleged deficient performance. Appellee chooses to ignore the significant amount of evidence presented at trial establishing that Goff was murdered inside the apartment he shared with appellee, which points to appellee as the killer, as she was the only one in the house capable of committing the crime.

At trial, evidence was presented that appellee and Goff had marital problems and that she had been quoted as saying that she would “bash his head in” if she suspected future infidelity. At 1:57 a.m., the morning of the murder, appellee’s neighbors heard three knocks on her door followed by it being opened. Minutes later, the neighbors heard banging, as though someone was banging on a wall or on the ceiling. The associate medical examiner opined that the condition of GofFs body at 6:00 a.m. was consistent with his having died at 2:00 a.m. According to appellee, she got up about nine minutes after her alarm went off, perhaps as early as 4:23 a.m., and found her husband’s body shortly thereafter; however, the operator reported receiving her call for an ambulance at 4:22 a.m. Upon their arrival, the EMT had to forcibly push the door open in order for appellee and her son to get out of the apartment because GofFs body was on the floor in the corner, leaning against the door. Goffs head was slightly elevated with massive amounts of blood underneath. Blood spatters on the wall behind GofFs head went up to the ceding and onto the door. The blood splatters indicate that the attacker was right-handed, and appellee is right-handed. Officers noticed brain matter on the floor and skull fragments in other areas of the living room. Except for the areas surrounding GofFs body, nothing in the apartment appeared to be amiss or showed signs of struggle. The apartment windows, the only exits other than the front door, were closed, with their screens on, drapes closed, and potted plants on their sills. There was also blood found on the inside of the door and its doorknob but not on the outside of the door.

The EMT noticed that appellee’s hair did not appear “messed up” upon their arrival, and she did not appear groggy or sleepy, although her three-year-old son did appear sleepy. Officers noticed that the bathtub, shower curtain, and toilet plunger were all wet. A drop of blood was found on the rail in the bathtub, and blood was also found in the bathtub drain. The DNA profile of the blood in the drain was consistent with Goffs DNA profile. A pile of fourteen towels and one washcloth were found hidden under clothes in the master bedroom underneath a pile of dry, dirty clothes. Four of the towels and the washcloth were extremely wet, while the rest were damp. One towel had blood on it. The associate medical examiner testified that the injuries Goff sustained to the back of his head were caused by something with a circular or oval hard surface, which was consistent with one of two hammers found in a box in the apartment kitchen.

All evidence points to Goff being beaten and later dying in the apartment he shared with appellee. Given the position of the body in front of the door, the undisturbed blood spot on the inside doorknob, and the undisturbed windows, it appears the killer did not leave the apartment. Appellee and her three-year-old son were the only people alive in the apartment when Goffs body was found.

Appellee attributes far more importance to the affidavit than it deserves. Although the affidavit was used against her, it cannot be argued successfully that it was the deciding factor in appellee’s conviction. As noted above, the affidavit was only one of several pieces of evidence that pointed to appellee’s guilt. Appellee cannot prove that but for Davis’s alleged errors concerning the affidavit, there is a reasonable probability that appellee would have been acquitted; therefore, the circuit court’s decision should be reversed.

Next, appellee claims that Davis was ineffective for failing to call Chris Lindley, appellee’s brother, to testify as a witness for the defense. According to appellee, Lindley received an anonymous telephone call in which the caller stated that Lindley would end up like Goff if he told anyone about the arson scheme. Anticipating such testimony, the prosecution filed a motion in limine at appellee’s trial to exclude Lindley’s testimony, arguing that it was inadmissible on relevancy and hearsay grounds. Appellee’s counsel countered, and the trial court deferred ruling on the motion until the evidence developed at trial. Lindley was subpoenaed and mentioned as a witness at voir dire; however, he did not testify at trial and his proposed testimony was not discussed again.

In her petition, appellee argued that Davis was ineffective for failing to proffer Lindley’s testimony for the trial court’s or appellate court’s consideration or to call him as a witness at trial. The circuit court agreed, holding that counsel was ineffective for failing to call Lindley because there exists a reasonable probability that but for counsel’s failure to call Lindley and adequately proffer his testimony, the result of appellee’s trial would have been different.

According to Davis, he did investigate Lindley’s proposed testimony, and that testimony was the subject of a motion in limine by the prosecution. The trial court actually granted several motions in limine to exclude other evidence of third-party guilt proposed by appellee on the ground that it was irrelevant. Davis made the decision .not to call Lindley to testify or proffer his testimony based upon the following: Lindley’s testimony was hearsay, and therefore, inadmissable; similar evidence had previously been excluded by the trial court; and Lindley was appellee’s brother and the jury could perceive his testimony as biased in favor of the defendant.

We have held:

The decision of whether or not to call a witness is generally a matter of trial strategy that is outside the purview of Rule 37. State v. Dillard, 338 Ark. 571, 998 S.W.2d 750 (1999); Helton v. State, 325 Ark. 140, 924 S.W.2d 239 (1996). Trial counsel must use his or her best judgment to determine which witnesses will be beneficial to his client. Johnson v. State, 325 Ark. 44, 924 S.W.2d 233 (1996). When assessing an attorney’s decision not to call a particular witness, it must be taken into account that the decision is largely a matter of professional judgment that experienced advocates could endlessly debate, and the fact that there was a witness or witnesses who could have offered testimony beneficial to the defense is not in itself proof of counsel’s ineffectiveness. Id. Nonetheless, such strategic decisions must still be supported by reasonable professional judgment pursuant to the standards set forth in Strickland. State v. Dillard, supra.

Nelson v. State, 344 Ark. 407, 412, 39 S.W.3d 791, 795 (2001). Because counsel’s decision was a matter of trial strategy that did not fall beyond the scope of what a competent attorney would recommend; we reverse the circuit court’s finding that counsel was ineffective on this point.

. Appellee makes no showing of ineffectiveness under the standard set forth in Strickland. Counsel’s actions were matters of strategy, and appellee suffered no prejudice as a result of his decisions. Accordingly, the circuit court erred in granting appeEee’s petition.

Reversed.


text:
    George L. MALLORY, III v. HARTSFIELD, ALMAND & GRISHAM, LLP, and Larry J. Hartsfield
    01-1407
    79 S.W.3d 359
    Supreme Court of Arkansas
    Opinion delivered June 27, 2002

      Stanley Rauls, for appeEant.

      Michael W. Mitchell, for appeEees.
   Per Curiam.

Appellant George L. Mallory,- III,appeals of the appellees and from a motion, which was deemed denied, made by the appellant, requesting the trial judge to recuse upon reconsideration of the granting of summary judgment.

We took this case under submission on June 27, 2002. For one point on appeal, appellant asserts that the trial court erred in granting summary judgment in favor of the appellees. Upon reviewing the materials for this point on appeal included in appellant’s abstract" and addendum, it is apparent that his filing was deficient in that several relevant pleadings and documents essential to the understanding of the issues were not contained in appellant’s abstract or addendum. We are deferring action on this appeal until appellant fully complies with the provisions of Supreme Court Rule 4-2.

Supreme Court Rule 4-2(b)(3) explains the procedure that we now follow when an appellant has failed to supply this court with a sufficient brief. The rule provides:

Whether or not the appellee has called attention to deficiencies in the appellant’s abstract or addendum, the court may address the question at any time. If the court finds the abstract or addendum to be deficient such that the court cannot reach the merits of the case, or such as to cause an unreasonable or unjust delay in the disposition of the appeal, the court will notify the appellant that he or she will be afforded an opportunity to cure any deficiencies, and has fifteen days within which to file a substituted abstract, addendum, and brief, at his or her own expense, to conform to Rule 4-2(a)(5) and (7). Mere modifications of the original brief by the appellant, as by interlineation, will not be accepted by the clerk. Upon the ¡filing of such a substituted brief by the appellant, the appellee will be afforded an opportunity to revise or supplement the brief, at the expense of the appellant or the appellant’s counsel, as the court may direct. If after the opportunity to cure the deficiencies, the appellant fails to file a complying abstract, addendum, and brief within the prescribed time, the judgment or decree may be affirmed for noncompliance with the rule.

Id.

Appellant has failed to comply with Supreme Court Rule 4-2. The rule in relevant part provides:

Following the signature and certificate of service, the appellant’s brief shall contain an addendum which shall include true and legible photocopies of the order, judgment, decree, ruling, letter opinion, or Workers’ Compensation Commission opinion from which the appeal is taken, along with any other relevant pleadings, documents, or exhibits essential to an understanding of the case and the court’s jurisdiction on appeal. In the case of lengthy pleadings or documents, only relevant excerpts in context need to be included in the addendum. Depending upon the issues on appeal, the addendum may include such materials as the following: a contract, will, lease, or any other document; proffers of evidence; jury instructions or proffered jury instructions; the court’s findings and conclusions of law; orders; administrative law judge’s opinion; discovery documents; requests for admissions; and relevant pleadings or documents essential to an understanding of the court’s jurisdiction on appeal such as the notice of appeal. The addendum shall include an index of its contents and shall also be clear where any item appearing in the addendum can be found in the record. The appellee may prepare a supplemental addendum if material on which the appellee relies is not in the appellant’s addendum. Pursuant to subsection (c) below, the clerk will refuse to accept an appellant’s brief if its addendum does not contain the required order, judgment, decree, ruling, letter opinion, or administrative law judge’s opinion. The appellee’s brief shall only contain an addendum to include an item which the appellant’s addendum fails to include.

Supreme Court Rule 4-2(a)(8) (emphasis added).

In the case now before us, appellant’s portion of the abstract and addendum addressing the motion for summary judgment contains only the motion, response, and order granting same. The following information, among other items, which is essential to an understanding of this issue in this case, is missing: (1) appellees’ brief in support of the motion for summary judgment; (2) appellees’ supplemental brief in support of the motion for summary judgment and any attachment^) thereto; (3) appellant’s brief in support of his response to appellees’ motion for summary judgment; (4) appellant’s notice of appeal and designation of the record; (5) appellant’s amended notice of appeal and designation of record.

Review of the above-mentioned items is essential to our consideration of this appeal. Specifically, a review of these documents is needed for us to understand the arguments that were raised below and the arguments that the trial court considered when it granted appellees’ motion for summary judgment. Because appellant has failed to comply with Rule 4-2, we are ordering him to submit a revised or supplemental abstract and addendum that contain all relevant pleadings and documents that are essential to an understanding of the issues raised in this appeal. Appellant must file a complying abstract, addendum, and brief within fifteen days from the entry of this order. Thereafter, appellees will have five days to respond.


author: Wh. “Dub” Arnold, Chief Justice.

text:
    Teresa BALLARD, et al. v. ADVANCE AMERICA, Cash Advance Centers of Arkansas, Inc., and Phyllis Garrett
    01-1190
    79 S.W.3d 835
    Supreme Court of Arkansas
    Opinion delivered July 5, 2002
    [Petition for rehearing denied September 5, 2002.]

      The Nixon Law Firm, by: David G. Nixon and Paige E. Young, for appellants.

      Bownam & Brooke LLP, by: Robert M. Buell and Charles K. Seyfarth, and Wright, Lindsey & Jennings, LLP, by: Claire Shows Hancock, for appellees Advance America and Cash Advance Centers of Ark., Inc.

      Morgan & Turner, by: Todd Turner, for appellee Phyllis Garrett.

       Glaze, J., not participating.

   Wh. “Dub” Arnold, Chief Justice.

This appeal arises from an order of the Clark County Circuit Courtapproving a settlement of all possible claims against appellee Advance America, Cash Advance Centers of Arkansas, Inc., and all of its officers, shareholders, and sureties for cash in the amount of $750,000 and forgiveness of approximately $550,000 in checks it held that had been returned unpaid due to insufficient funds.

The case began as a class action usury suit that was filed by appellee, Phyllis Garrett, against appellee, Advance America Cash Advance Centers of Arkansas, Inc., on October 12, 1999. On April 9, 2001, a conditional settlement class was certified, and on May 2, 2001, a proposed settlement agreement was prehminarily approved, and notice was given to class members. This notice informed the members that a fairness hearing would be held on July 18, 2001, and that potential class members were given until June 30, 2001, to opt out of the class.

Appellants, Teresa Ballard, Cheryl King, and Kenisha Bryant, filed a motion seeking to intervene in the action on July 6, 2001. On July 16, 2001, a hearing was held on appellants’ motion. On July 18, 2001, the trial court found that appellants’ motion to intervene was untimely, that appellants’ interest was adequately represented, and the trial court denied the motion to intervene.

On July 18, 2001, the previously scheduled fairness hearing was held. Following the fairness hearing, the settlement was approved and appellants’ appealed from the trial court’s denial of their motion to intervene. This court affirmed the trial court in Ballard v. Garrett, 349 Ark. 371, 78 S.W.3d 73 (2002).

In that case, this court upheld the trial court’s order that appellants’ motion to intervene was filed after the litigation had progressed too far, and held that there was no abuse of discretion by the trial court. Id. We stated that appellants sat on their rights and waited until they were not satisfied with the way the litigation was progressing. Id. We concluded that the trial court did not abuse its discretion when it determined that the proceedings had advanced so far that appellants’ motion to intervene was not timely. Id. Further, we found that allowing the intervention would have delayed the entry of the proposed settlement and would have delayed the class members’ ability to collect their compensation. Id. Finally, in that case, we concluded that appellants did not have a valid reason for delaying the filing of their motion to intervene until fifteen months after the litigation had begun or two months after a proposed settlement had been reached. Id. Accordingly, we held that the trial court did not err in denying appellants’ motion.

Therefore, in Ballard v. Garrett, we held that the trial court did not abuse its discretion when it found that appellants’ motion to intervene was untimely. This court stated the trial court did not abuse its discretion because (1) appellants waited until the litigation had progressed too far before they filed their motion to intervene; (2) the granting of appellants’ untimely motion would have caused the other parties to the litigation to suffer prejudice; and (3)appellants failed to provide a valid reason for their delay in filing their motion to intervene. While Ballard v. Garrett was pending before this court, Teresa Ballard, Cheryl King, and Kenisha Bryant filed another appeal with this court, also from Clark County Circuit Court. In this appeal, appellant raised four points: (1) the trial court abused its discretion in finding that the settlement agreement was fair, reasonable, and adequate; (2) the trial court abused its discretion in naming Garrett as class representative and naming her attorneys as class counsel; (3) the trial court erred in admitting and excluding certain evidence; and (4) the trial court erred in quashing the appellants’ subpoena on Advance America, denying them the right to cross-examine witnesses and refusing to allow them to review and argue from a plaintiffs sealed exhibit.

However, because we found that appellants did not timely intervene, appellants do not have standing to bring this appeal. In Devlin v. Scardelletti et al., WL 1270617 (June 10, 2002), the United States Supreme Court determined that unnamed class members, who have objected in a timely manner to approval of a class action settlement at the fairness hearing, have the power to bring an appeal without first intervening, abrogating the lack of standing issue. However, Devlin involves facts and issues that are distinguishable from those presented by this appeal. Specifically, Devlin addresses a question of law and procedure arising under the Federal Rules of Civil Procedure, and not under Arkansas law. Arkansas Rule of Civil Procedure 23(b) differs from that of Rule 23(b) of the Federal Rules of Civil Procedure. In addition, the petitioner in Devlin did not have the ability to opt out of the settlement. Here, appellants had the ability to opt out and instead elected to object to the setdement and risk being bound by it, if approved by the court over their objections.

Accordingly, the Devlin opinion is distinguishable from this case on appeal, and this court’s opinion in Haberman v. Lisle, 317 Ark. 600, 884 S.W.2d 262 (1994), continues to be the controlling precedent in Arkansas. In Haberman, this court found that for unnamed class members to have standing to appeal a class-action settlement in state court, those class members must have intervened at the trial court level. Haberman, supra. Non-parties and unnamed members of the class who have failed to intervene are precluded from appealing a class settlement. Haberman, supra.

Throughout this litigation, appellants have conceded that Haberman is the applicable and controlling law. At a hearing before the circuit court on September 5, 2001, counsel for appellants stated “[t]he Haberman decision from the Arkansas Supreme Court makes it very clear that in order for a party to appeal a settlement agreement, they must be an intervenor. That is the law.” Appellants have now changed their position and suggest that Devlin gives them the ability to appeal the settlement approval in this case without first intervening. We disagree and continue to follow Haberman.

Unlike the petitioner in Devlin, appellants here had the ability to opt out of the settlement and avoid being bound by it. Indeed, appellants were ideally positioned to opt out of the settlement because they already had an action pending against Advance America in federal court for the same relief as sought by the class representative in this litigation. By attempting to intervene at the last minute, rather than opting out of a settlement to which they objected, appellants willingly undertook the risk that their motion to intervene might be denied for failure to meet the requirements of Rule 24(a) of the Arkansas Rules of Civil Procedure, and that they would then be bound by the settlement as approved by the circuit court. Appellants’ strategic election not to opt out of the settlement has left them without standing to pursue this appeal. Therefore, by following Haberman, appellants have no standing; thus the appeal is dismissed.

Appeal dismissed.

Glaze, J., not participating.