text:
    OZARKS ELECTRIC COOPERATIVE CORP. v. Vernon HARRELSON and Norma Mae Harrelson
    89-266
    782 S.W.2d 570
    Supreme Court of Arkansas
    Opinion delivered January 16, 1990

      Burke & Eldridge, P.A., by: John R. Eldridge III, for appellant.

      Arthur H. Stuenkel, Arkansas Public Service Commission, for amicus curiae Ark. Pub. Serv. Comm’n.
    No brief filed for appellee.
   Steele Hays, Justice.

Vernon and Norma Mae Harrelson, appellees, reside in Washington County and have received electrical service from Ozarks Electric Cooperative Corporation, appellant, since 1973. In February, 1988 Ozarks’s computer indicated significant change in the Harrelsons’ electrical usage and in May the appellant tested their meter and discovered it was defective. The appellant reviewed the Harrelsons’ usage pattern and determined that no kilowatt hours had been registering on the meter since July, 1987. During the eleven month period the Harrelsons received minimum electricity bills and admitted noticing a marked decrease from previous bills. (Minimum bills amounted to $7.87 per month, while prior bills ranged from $70-$80.) The appellant reconstructed the charges for this eleven month period in accordance with the Arkansas Public Service Commission’s General Service Rule 10 C (3)(a), estimating electrical usage costing $790.29.

The Harrelsons refused to pay the revised bill and after giving notice, the appellant discontinued electrical service. The Harrelsons filed an action in Circuit Court, seeking a temporary restraining order and service was reconnected. The case was transferred to chancery and the chancellor held that the chancery court maintained jurisdiction of the dispute based upon equitable principles and that the Harrelsons owed for estimated usage only after February, 1988, less any amounts previously paid. On appeal, Ozarks asserts that the chancellor erred in denying its motion to dismiss for lack of subject matter jurisdiction. We sustain the argument.

The decisional process in this case necessarily begins with Ozarks Electrical Cooperative Corporations. Turner, 277 Ark. 209, 640 S.W.2d 438 (1982), where similar issues were presented. Ozarks had discovered that the electric meter of its consumer, Turner, showed evidence of tampering and was not recording correctly. Ozarks gave the information to the prosecuting attorney and Turner was charged with theft of electrical services. Ozarks also demanded payment of $ 1,500, the amount it estimated to be due. Turner paid under protest and, when acquitted of the criminal charges, sued Ozarks for malicious prosecution and for the return of the $1,500. The circuit judge directed a verdict on the claim of malicious prosecution, but submitted the $1,500 claim to the jury, which awarded a verdict to Turner of $1,250. Ozarks appealed, contending that subject matter jurisdiction of the dispute belonged, not to circuit court, but to the Public Service Commission pursuant to Ark. Code Ann. § 23-3-119(a)(2) (1987). In resolving the jurisdictional argument, we examined the holding of Southwestern Electric Power Company v. Coxsey, 257 Ark. 534, 518 S.W.2d 485 (1975), which recognized the distinction between the legislative function, which can be properly carried out by an administrative agency, and the judicial function, which cannot. The Coxsey opinion quoted remarks of Justice Holmes:

A judicial inquiry investigates, declares, and enforces liabilities as they stand on present or past facts and under laws supposed already to exist. That is its purpose and end. Legislation, on the other hand, looks to the future and changes existing conditions by making a new rule, to be applied thereafter to all or some part of those subject to its power. [Prentis v. Atlantic Coastline, 211 U.S. 210 (1908).]

Rejecting the argument that jurisdiction of the dispute between Ozarks and Turner belonged to the Public Service Commission, we said:

Were the APSC to hear this case, it would not be looking to the future and making a new rule or standard affecting the public or a group generally. Rather, it would be determining issues of fact from past actions involving a particular individual within existing law and deciding the liabilities involved. [Emphasis supplied.]

With relative promptness after Turner, the Arkansas General Assembly passed Act 758 of 1985 [codified as Ark. Code Ann. § 23-3-119 (1987)]. Several provisions of the act, including the emergency clause, make it clear that Act 758 was intended to reflect the legislature’s disapproval of the holding in the Turner case and to place primary jurisdiction over such disputes in the Public Service Commission. Section 1 reads in part:

It is the specific intent of [this enactment] to vest in the Arkansas Public Service Commission the authority to adjudicate individual disputes between consumers and the public utilities which serve them, when those disputes involve public rights which the Commission is charged by law to administer. Public rights which the Commission may adjudicate are those arising from the public utility statutes enacted by the General Assembly, and the lawful rules, regulations, and orders entered by the Commission in the execution of the statutes. [Our emphasis.]

The act contains other language as well which could only have been directed to our holding in Turner. Section 2(d) provides that the Commission shall have the authority:

... to conduct investigations and public hearings and to mandate monetary refunds, billing credits, or order appropriate prospective relief as authorized or required by law, rule, regulation or order. The jurisdiction of the Commission in such disputes is primary, and shall be exhausted before a court of law or equity may assume jurisdiction.

Section 1 also provides that the quasi-judicial jurisdiction of the Commission “to adjudicate public rights and claims in individual cases is in addition to the Commission’s traditional legislative authority to act generally, and prospectively, in the interest of the public.” [Our emphasis.] Powers of the Commission enumerated in the code include:

Ascertain and fix adequate and reasonable standards for the measurement of quantity, quality, pressure, initial voltage, or other conditions pertaining to the supply of all products, commodities, or services furnished or rendered by any and all public utilities; prescribe reasonable regulations for the examination and testing of such production, commodity, or service, and for the measurement thereof, establish or approve reasonable rules, regulations, specification, and standards to secure the accuracy of all meters or appliances for measurement; and provide for the examination and testing of any and all appliances used for the measurement of any product, commodity, or service of any public utility. [Ark. Code Ann. § 23-2-304(3) (1987).]

We conclude that the rights at issue in this case, involving a specific regulation of the Commission, and affecting the delivery, measurement and cost of electrical power supplied to a consumer, fall within the primary jurisdiction of the Public Service Commission. Accordingly, we reverse and dismiss the suit.

Turner, J., not participating.

       This rule requires the billing correction to be based upon the customer’s metered consumption for the previous six months if the date the meter first malfunctioned cannot be definitely ascertained. The rates effective during this period are then applied to the adjusted consumption and the difference between the amount so obtained and the actual billing are refunded or charged to the customer.


source: Caselaw Access Project

author: Steele Hays, Justice.

license: Public Domain

text:
    Tina WINTERS v. STATE of Arkansas
    CR 89-156
    782 S.W.2d 566
    Supreme Court of Arkansas
    Opinion delivered January 16, 1990

      Lesly W. Mattingly, for appellant.

      Steve Clark, Att’y Gen., by: Clint Miller, Asst. Att’y Gen., for appellee.
   Steele Hays, Justice.

This appeal from a criminal conviction questions whether the trial court correctly denied a motion to suppress evidence, and challenges the constitutionality of the statutes under which the appellant was convicted.

Appellant, Tina Winters, is the owner of Miss Buckando, a registered quarter horse acquired in 1975. On April 5, 1987, appellant separated from her husband, Gene Winters, and returned to her home in McRae, Arkansas, while Winters remained at his farm in Cabot. Appellant left her horses at Cabot with the understanding that she would remove them as soon as possible.

On April 24, 1987, without appellant’s knowledge, Gene Winters took Miss Buckando, along with some of his own horses, to a veterinarian for testing for equine infectious anemia (EIA). See Ark. Code Ann. § § 2-40-801 — 805 (1987). Under our code, if a horse tests positive, it must be branded and quarantined or sold for slaughter. When a voluntary test is given the state requires that a consent form be signed by the owner or the owner’s agent. Winters signed the consent for his horses as well as for appellant’s horse. The test was administered by Dr. Mann, who had previously furnished veterinary services to both parties. After obtaining the consent form from Gene Winters, Dr. Mann drew blood on all the horses and sent the samples to the Arkansas Livestock and Poultry Commission for testing. The test on appellant’s horse was positive. When she was contacted by an ALPC agent about compliance with the state regulations for a “reactor” animal, appellant refused to have the horse branded and quarantined.

Under Ark. Code Ann. § 2-40-802 (1987), a failure or refusal to comply with the EIA provisions under the code is a misdemeanor. Appellant was tried in Searcy Municipal Court and found guilty. She appealed to the Circuit Court of White County and moved to suppress evidence of the test results and challenged the constitutionality of the statutes under which she was being charged. The motions were denied and after a trial on the merits, appellant was again found guilty for refusing to brand a reactor horse and fined $750. From that decision, appellant brings this appeal.

Appellant first argues that the trial court erred in denying appellant’s motion to suppress the EIA test results. Appellant’s argument is based entirely on agency theories, contending that Gene Winters had no authority as her agent to consent to the test.

There are inherent flaws in appellant’s argument. First, the exclusionary rule is not applicable to this case because the actions complained of were not taken by the state, but by private individuals. Second, even if we were to reach the consent question, a consent to a Fourth Amendment search is not judged by traditional rules of agency, but by case law developed in criminal law on consent as that law relates to searches.

For a search to be implicated under our Criminal Code, the search must constitute an “official intrusion.” See A.R.Cr.P. 10.1(a) and Commentary to Article IV. “The search and seizure clauses are restraints upon the government and its agents, not upon private individuals.” Walker v. State, 244 Ark. 1150, 429 S.W.2d 121 (1968). The general corollary to this proposition is that the exclusionary rule is not intended as a restraint upon the acts of private individuals. Such searches will not implicate the Fourth Amendment unless the search by the private party has been done at the request or direction of the government, or in some way has been a joint endeavor with the government. Houston v. State, 299 Ark. 7, 771 S.W.2d 16 (1989), citing to 1 LaFave, Criminal Procedure § 3.1(h) (1984). Where a state official has no connection with a wrongful seizure, there is no basis for exclusion. Id.

Here the search was undertaken pursuant to a request from appellant’s estranged husband and the blood was drawn by a private veterinarian. There is no contention by appellant that these two private individuals were in any way acting under the government’s direction or in a joint endeavor with state agents. The trial court was correct to deny the motion to suppress.

Secondly, appellant submits the trial court erred in upholding the constitutionality of EIA regulatory statutes, Ark. Code Ann. §§ 2-40-801 — 805 (1987). The argument suggests two grounds for a constitutional challenge — lack of substantive due process and a taking without just compensation under the Fifth Amendment.

Under substantive due process, the legislation must be rationally related to achieving a legitimate governmental objective. See, McClelland v. Paris Public Schools, 294 Ark. 292, 742 S.W.2d 907 (1988); McCammon v. Boyer, 285 Ark. 288, 686 S.W.2d 421 (1985). Appellant does not contend the state goal is not a legitimate one, but rather that the regulations are not rationally related to achieving those ends. Specifically appellant points out that of those horses testing positive, 80 to 95 % will never transmit the virus, so that of 25,000 horses tested annually, only 60 to 170 horses would transmit the virus; that there has been no decrease in transmitters since the development of this test for EIA; and that five other states have abandoned this test. We take the argument to be that the methods incorporated in the statutes are so inefficient that there is no rational relationship to the state goal of eradicating or controlling the disease.

We responded to a similar argument in McClelland, supra, that the appellant in that case had misconstrued the test when she argued that the regulation was not accomplishing any of its goals. The same is true here. The test is whether there is a conceivable basis for the rule, so that it can be said the action was not arbitrary. “The Constitution is not violated so long as a law is not premised upon a patently irrational basis. Judicial inquiry does not concern itself with the accuracy of the legislative finding, but only with the question of whether it so lacks any reasonable basis as to be arbitrary.” McClelland, supra, citing from Cook County College Teachers Union v. Taylor, 432 F. Supp. 270 (1977).

The burden of establishing this result is on the appellant, McClelland, supra, and here appellant has not made such a showing. Rather, she relies on evidence which, while indicating some inefficiency in the test, nevertheless is premised on the fact that the regulations are related to the state’s goals, and nothing appellant has presented suggests a “patently irrational basis.” Furthermore, there was other testimony from the same expert cited for appellant’s arguments, which explained away most of appellant’s objections to the program, and provided more than an adequate basis for sustaining the regulations. As stated in Bolling v. Texas Animal Health Commission, 718 S.W.2d 819 (Tex. App. 1986), which considered the constitutionality of brucellosis regulations, “The mere fact that a certain regulation is not the best possible regulation, or that the regulation can be improved, is not justification to invalidate the regulation.”

Appellant next argues that under the Fifth Amendment to the United States Constitution and art. 2 § 22 of the Arkansas Constitution, she cannot be deprived of her property without just compensation. She testified that her horse was worth $1,000 and that because she did not have enough acreage for the required quarantine area (a minimum of forty acres) she would have to have the horse slaughtered for which she would receive about $200. This, she insists, amounts to a taking and should therefore be compensated.

It has already been settled in Arkansas that a police power regulation for the health and welfare of the state which requires destruction of contaminated animals is not a taking, if the regulation is an otherwise valid exercise of the police power and if there is some residual value to the owner. Burt v. Arkansas Livestock & Poultry Comm’n, 278 Ark. 236, 644 S.W.2d 587 (1983).

Here, as already noted, the regulation is a valid exercise of the police power and there has been no total diminution of the value of appellant’s horse, but only a reduction in its value. And while there is no set formula to determine where regulation ends and taking begins, J.W. Black Lumber Co. v. Ark. Dept. of Pollution Control & Ecology, 290 Ark. 170, 717 S.W.2d 807 (1986), when comparing this to similar cases, we conclude the reduction in value does not equate to a taking. See Bolling v. Texas Animal Health Comm’n, supra; Numley v. Texas Animal Health Comm’n, 471 S.W.2d 144 (Tex. Civ. App. 1971). And see also 2 J. Sackman, Nichols on Eminent Domain, § 6.07 (1985).

Finally, appellant objects to the trial court’s admission of the state’s test results because there was insufficient authentication of those results. Appellant makes two points under this argument. The first is that the vet testified he drew the blood on April 24, but that the test form he completed for the lab was dated April 25th. Appellant objected to the introduction of the test form bearing the state’s results, because of this discrepancy, but the objection was overruled.

In the trial court’s finding of facts it made a finding on this point, noting that the vet had testified that he would regularly complete the document sometime after he drew the blood sample. And this finding is supported by the record. The vet’s records further showed that he had only drawn blood for Mr. Winters in April of 1987 on the 4th, 14th and the 24th.

The trial judge determines whether the evidence is admissible and on review, the appellate court will reverse the decision only if there is an abuse of discretion. Marx v. State, 291 Ark. 325, 724 S.W.2d 456 (1987); A.R.E. Rule 104(a). Given the facts in the record, there was more than an adequate basis for the court’s admission of the test results, as the discrepancy in the dates was easily and logically explained.

The appellant’s second point essentially contends that at some point the blood samples had been sufficiently separated from any identifying papers or labels on the samples themselves, so that there was insufficient authentication to show that the positive tests results belonged to the horse in question. However, there was no objection on this basis below. Appellant’s objection before the trial court reached only the discrepancy in the dates. Failure to make a specific argument below waives any argument on appeal. A.R.E. Rule 103(a)(1); Bonds v. State, 296 Ark. 1, 751 S.W.2d 339 (1988).

AFFIRMED.

       The animal must be isolated from other horses a distance of at least 200 yards.

       Although there are similarities, there are differences; suffice it to say that a different body of law applies to questions of consent with agency theories and Fourth Amendment searches. See A.R.Cr.P. 11.2; See also, Spears v. State, 270 Ark. 331, 605 S.W.2d 9 (1980); United States v. Butler, 495 F. Supp. 579 (E.D. Ark. 1980); Grant v. State, 267 Ark. 50, 589 S.W.2d 11 (1979).


author: Tom Glaze, Justice.

text:
    T. K. WOODS v. HOPMANN MACHINERY, INC.
    89-239
    782 S.W.2d 363
    Supreme Court of Arkansas
    Opinion delivered January 16, 1990

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

      Gill, Johnson & Gill, by: Brooks A. Gill, for appellee.
   Tom Glaze, Justice.

This case involves the appellee’s sale of a combine to the appellant. In August 1982, appellant purchased the machine for $46,500 payable over a five year period; he paid a down payment comprised of $3,000 in cash and a note in the amount of $6,500 which was secured by the combine. Soon after the sale, appellant complained that the combine failed to harvest his crops. After the parties were unable to satisfy their differences, the appellee, having repossessed the combine, filed suit on October 2, 1985, to collect the $6,500 note. Appellant answered denying liability. Appellee then moved for a summary judgment, and appellant responded, raising several defenses including the appellee breached expressed and implied warranties. Appellant raised his implied warranty defense late in the litigation by amending his counterclaim on March 29, 1988. The trial court granted appellee’s request for summary judgment, finding the appellant’s expressed warranty defense was barred by the terms of the parties’ sales contract, and it further concluded that appellant’s implied warranty claim was foreclosed by both the terms of the contract and by the statute of limitations. We reverse.

Appellant does not seriously challenge the trial court’s holding that his expressed warranty claim is barred by a specific provision contained in the parties’ contract. Instead, his primary argument is that his implied warranty claim was not barred by the statute of limitations nor should it have been resolved by summary judgment. In making his argument, appellant states that while he raised his implied warranty defense by amended counterclaim after the four year statute of limitations for such a claim had run, Ark. R. Civ. P. 15(c) operated to relate the amended claim back to the date of appellant’s original pleading (counterclaim) which had been filed well within the limitation statute. We agree.

Rule 15 not only makes liberal provision for amendments to pleadings, it also states that any claim asserted in the amended pleading, which arises out of the conduct, transaction or occurrence set forth in the original pleading relates back to the date of the original pleading. Jim Halsey Co. v. Bonar, 284 Ark. 461, 683 S.W.2d 898 (1985). Since the amendment relates back, there can be no statute of limitations objection to the amendment without proof of undue delay or prejudice. Id. In the present case, in his original counterclaim, appellant alleged the appellee had expressly guaranteed that the combine would properly harvest appellant’s crop — which the machine failed to do after multiple adjustments and repairs. In his amended claim, he primarily relied upon the same allegations underlying his express warranty claim but added that the same sale or transaction, and appellee’s conduct surrounding it, breached implied warranties of merchantability and fitness for particular purpose. Because appellant’s amended claim arose out of the same transaction described in his original counterclaim, his amended counterclaim related back to his original pleading and thereby avoided the application of the statute of limitations. Furthermore, the appellee failed to argue below that the amendment of the counterclaim would cause undue delay or prejudice. Regardless, since the appellant’s claim for breach of implied warranty is so closely related to the earlier claim of breach of expressed warranty, there can be no undue delay or prejudice.

In so holding, we note the appellee’s argument that neither appellant’s original nor his amended counterclaim contained sufficient facts to support his allegations of expressed or implied warranty violations. We dismiss such arguments because they were not raised below. Appellee could have raised such arguments by filing a motion under Ark. R. Civ. P. Rule 12(b)(6), but instead it sought summary judgment relief pursuant to Ark. R. Civ. P. Rule 56.

Of course, summary judgment is only proper when a review of the pleadings, depositions or other filings reveal that there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Township Builders, Inc. v. Kraus Construction Co., 286 Ark. 487, 696 S. W.2d 308 (1985). While appellee contends otherwise, we conclude that the record reveals the appellant has shown a material factual issue exists regarding his implied warranty claim, which we found above to have been filed timely.

To recover for breach of implied warranty, the plaintiff must prove the following: (1) he sustained damages; (2) at the time of contracting, the defendant had reason to know the particular purpose for which the product was required; (3) the defendant knew the buyer was relying on the defendant’s skill or judgment to select or furnish the product; (4) the product was not fit for the purpose for which it was required; (5) the unfitness was a proximate cause of plaintiffs damages; and (6) the plaintiff was a person whom defendant would have reasonably expected to use the product. See E. I. DuPont Nemours & Co. v. Dillaha, 280 Ark. 477, 659 S.W.2d 756 (1983).

Here, the appellant’s pleadings and affidavits show he purchased a new combine from appellee after appellee assured appellant that the combine would properly harvest appellant’s crops. Appellant sustained over $20,000 in damages as a result of the combine’s failure to harvest his crops. Appellant relied upon appellee and his mechanic to correct the equipment, but to no avail. We believe the appellant’s assertions clearly support an implied warranty claim.

Finally, we consider appellee’s contention that the appellant waived his right to bring a counterclaim for breach of warranty when he signed a “reaffirmation” agreement to pay the note upon which appellee brought this action. In'sum, appellee claims it negotiated a settlement whereby it repossessed the combine, agreed not to sue for the deficiency owed by appellant and the appellant reaffirmed he would pay the $6,500 down payment note. Appellee claims the appellant does not dispute that such a settlement took place, but concedes the appellant asserts that any such settlement was the result of undue influence exercised by the appellee against the appellant. Appellee attached to his summary judgment motion a typewritten note signed by the appellant whereby he agreed to pay the $6,500 promissory note and acknowledged that the appellee’s repossession of the combine did not satisfy the promissory note.

Although appellant never denied he signed a “piece of paper” that provided he would pay the $6,500 note, appellant stated the appellee only asked him to sign that paper so appellee could show it to appellant’s wife so she would pay the $6,500 from life insurance proceeds after the appellant died. Appellant said that his doctors had told him he had terminal cancer and only a few months to live. Appellant shared this information with appellee and further revealed his wife would receive a “good bit of life insurance.” During this discussion, appellant submits he told appellee that he had no money and did not feel obligated to pay the $6,500 note but that because he and appellee were friends, appellant would ask his wife to pay the $6,500 from the life insurance proceeds after he died.

When we view the pleadings and affidavits most favorably in appellant’s behalf, as we must, we conclude a genuine issue of material fact exists concerning whether appellant ever agreed to any final settlement or resolution of the differences separating the parties. For this and the foregoing reasons, we reverse and remand this matter for further proceedings and a full development of the issues by the parties.

       As another deficiency in pleading breach of warranty, appellee argues on appeal that the appellant’s pleadings were required to, but did not, contain the factual allegation of notice. Again, this issue was not argued below, but even so, such notice requirement is no longer necessary. See Ark. R. Civ. P. Rule 9(c); Cox, Newbern, New Civil Procedure: The Court that Came in from the Code, 33 Ark. L. Rev. 1, 22 (1979).

       We note that the appellant raised two other arguments concerning the impropriety of summary judgment in this case. These arguments concerned undue influence and strict foreclosure notice requirements, however because of our holding on the first issue we need not address them.


author: Otis H. Turner, Justice.

text:
    BROOKSIDE VILLAGE MOBILE HOMES v. Gail MEYERS
    89-241
    782 S.W.2d 365
    Supreme Court of Arkansas
    Opinion delivered January 16, 1990

      Kemp, Duckett, Hopkins & Spradley, for appellant.

      Boyd Tackett, Jr., for appellee.
   Otis H. Turner, Justice.

The appellant, Brookside Village Mobile Homes, commenced this action to recover past due rental payments on a mobile home alleged to be due under a written agreement. Gail Meyers, the appellee, counterclaimed, alleging that the writing was a contract of sale and contending that she entered into the contractual arrangement as a result of Brook-side’s fraudulent conduct.

The circuit court, as trier of fact, held the contract to be one of sale entered into by Meyers as a result of Brookside’s deceit and rendered a judgment for the appellee in an amount equal to payments made to the appellant ($1,101.71), together with an attorney’s fee of $1000 pursuant to the provisions of Ark. Code Ann. § 16-22-308 (Supp. 1989). We must reverse because of a lack of any substantial evidence to support the finding of deceit.

Brookside Village Mobile Homes operates a mobile home park and rents and sells mobile homes. Gail Meyers, a prospect, was shown several mobile homes in the appellant’s park and chose a mobile home located in space 69. On January 8,1988, Meyers executed a “Lease/Rental Agreement” with the appellant for space 69 in Brookside Village Mobile Home Park and subsequently moved into the mobile home located in that space which she had selected.

On February 10, 1988, Meyers executed a “Lease With Option to Purchase,” which described a 1982 14’ x 52’ “Liberty” mobile home, serial number 7460, and paid to Brookside the sum of $500 for the purchase option. However, the home Meyers had inspected and moved into was not the unit described in the Lease With Option to Purchase,” but was, in fact, a 1984 14’ x 52’ “Champion” unit, serial number 5395, which, according to the evidence, was of the same value as the “Liberty” model.

A few months later, Meyers defaulted in her lease payments, and Brookside sued for the unpaid rentals. Meyers counterclaimed, alleging fraud and seeking compensatory and punitive damages.

The trial court found that the “Lease With Option to Purchase” was, in fact, a contract for the sale of the mobile home; that Brookside was guilty of “deceit” in the transaction; and that Meyers was entitled to a return of her $500 along with all payments made toward the “purchase.” Further, as the appellant was the prevailing party, an award of $1,000 as a reasonable attorney’s fee was granted to Meyers’ attorney. No proof was required concerning the value of the attorney’s services. From that decision, the appellant has raised this appeal.

The tort of deceit is established when each of five elements is shown: First, a false representation of a material fact; second, knowledge or belief on the part of the person making the representation that the representation is false or that there is not a sufficient basis of information to make such a representation; third, an intent to induce the other party to act or refrain from acting in reliance upon the misrepresentation; fourth, a justifiable reliance upon the representation by the other party in taking action thereon; and fifth, resulting damages. Higgins v. Hines, 289 Ark. 281, 711 S.W.2d 783 (1986); Storthz v. Commercial National Bank, 276 Ark. 10, 631 S.W.2d 613 (1982); see also, Prosser, Law of Torts (4th Ed. 1971), pp. 685-686.

It is undisputed that the mobile home described in the “Lease With Option to Purchase” was not the mobile home that Meyers selected and occupied. Standing alone, this fact would appear to satisfy the requirement of a false representation of a material fact, if it were not for the additional fact (which the record makes abundantly clear) that a simple clerical mistake occurred rather than an attempt to deceive. The mistake was at no time disputed by Brookside; moreover, Bill Meyers, the appellee’s former husband, who assisted in the rental negotiations, testified that no one employed by the appellant ever refused to correct the mistaken description.

There is no evidence that Brookside induced or intended to induce the appellee to act or refrain from acting in reliance upon a representation concerning the brand or model of the unit located in space 69. To the contrary, it was clear from the testimony of both the appellee and her former husband that she specifically chose the mobile home in space 69, without regard to a particular brand or model year. The appellee candidly admitted that she moved into the mobile home that she had chosen after looking at several others and. made no claim that she was purchasing a particular brand. Additionally, the instruments signed by the appellee provided that she was accepting the unit “as is.”

The burden of proving fraud requires not only a showing that the purchaser was without knowledge of the facts, but also that the ascertainment of the undisclosed fact was not within the reach of the purchaser’s diligent attention or observation. Vaught v. Satterfield, 260 Ark. 544, 542 S.W.2d 502 (1976). Clearly, the appellee had ample opportunity to inspect the trailer and did, in fact, make such an inspection. Further, Bill Meyers pointed out that the brand name “Champion” was visible on the front of the mobile home. The trademark also appeared on a plaque inside the unit.

The appellee failed to meet her burden of showing knowledge or belief on the part of the appellant that the description in the option to purchase was false. She was unable, as well, to prove that the appellant acted with an intention to induce her to act or refrain from acting in reliance upon a misrepresentation or to establish her justifiable reliance upon a material representation. This cause, therefore, is reversed and remanded.

Arkansas Code Annotated Section 16-22-308 (Supp. 1989), the statute relied upon by the court in authorizing the award of attorney’s fees, provides for such an award to the prevailing party. Since the judgment in favor of the prevailing party is reversed, the award of attorney’s fees is also reversed.

Reversed and remanded.


author: Per Curiam.

text:
    Willie B. GILMER v. JEFFERSON COUNTY CIRCUIT COURT
    RC 89-69
    782 S.W.2d 368
    Supreme Court of Arkansas
    Opinion delivered January 16, 1990

      Petitioner, Pro Se.

      Steve Clark, Att’y Gen., by: Oían W. Reeves, Asst. Att’y Gen., for respondent.
   Per Curiam.

Willie B. Gilmer has tendered a petition to this court for a writ of mandamus to the Circuit Court of Jefferson County, Arkansas. Our clerk has refused to file the petition because it was not accompanied by a certified record from the Circuit Court of Jefferson County, to whom the writ would be addressed. Petitioner contends that under Rule 16 of the Rules of the Supreme Court and the Court of Appeals petitions for mandamus, among others, with their exhibits, “are treated as the record,” requiring only the original typewritten copy. Even so, petitioner has not included the judgment of commitment, nor has he provided us with a certified copy of the proceedings in the Jefferson Circuit Court. Without these matters, properly certified, we cannot determine the merits of his allegations.

Accordingly, the motion for a rule on the clerk is denied.


author: Jack Holt, Jr., Chief Justice.

text:
    Anna Lee DRAYER v. William G. WRIGHT, et al.
    89-243
    782 S.W.2d 572
    Supreme Court of Arkansas
    Opinion delivered January 22, 1990

      Anna Lee Drayer, pro se.

      McMillan, Turner & McCorkle, by: F. Thomas Curry, for appellee William G. Wright.
   Jack Holt, Jr., Chief Justice.

The issue in this appeal is whether the chancellor erred in holding that the appellant, Anna Lee Drayer, was precluded by the doctrine of res judicata from litigating certain issues and claims against the appellee, William G. Wright, in regard to the testamentary trust provisions contained in John J. Hardin’s will.

John J. Hardin died testate on January 27,1933, and his will was admitted to probate. The will created two trusts; however, this case only concerns the interpretation of the first trust, known as the John and Errett Hardin Trust (Trust), the corpus of which consists of approximately 1640 acres.

The successor trustee, William G. Wright, initiated a petition for instruction as to the meaning of the Trust and requested an order directing the distribution of all annual proceeds of the Trust, as well as final distribution of the corpus upon expiration of the Trust. Drayer counterclaimed on the basis that the Rule in Shelley’s case and the Statute of Uses applied to the Trust provisions.

The chancery court has previously interpreted John J. Hardin’s will on December 7, 1955, and April 20, 1973. In this case, the chancellor held that a determination of the membership of the class of beneficiaries was barred by the doctrine of res judicata, and stated that:

. . .the Trustee continue to hold legal title to the corpus of the Trust until the date eighteen years after the death of the last surviving of the above listed measuring lives upon the terms and conditions set out in the Will of John J. Hardin; that annual distribution of trust income be made on a per capita basis to a class of beneficiaries to be determined each year at the time of annual distribution and consisting of those lawful descendants of John and Errett Hardin whose lineal ancestor through whom he or she descends from John or Errett Hardin has died; that upon the expiration of the trust the fee to the Trust property shall vest in the beneficiaries so defined alive at the date of the termination of the Trust with such beneficiaries taking per capita.

From that decree, Drayer appeals on the basis of two points of error: 1) that the trial court erred in ruling that the doctrine of res judicata applied to prevent the application of the Rule in Shelley’s case and the Statute of Uses, and 2) that the trial court erred in ruling that the Rule in Shelley’s case was not applicable. We find that the doctrine of res judicata is applicable and affirm the judgment of the trial court.

Drayer contends that there were no issues before the court relating to the termination of the trust or the proper disposition of the corpus upon its termination when the court entered its 1955 decree. On this basis, Drayer argues that any ruling of the court in regard to these matters was dicta and not binding on the parties. See generally Shall v. Biscoe, 18 Ark. 142 (1856); Connor v. Blackwood, 176 Ark. 139, 2 S.W.2d 44 (1928); Sovereign Camp, W.O.W. v. Gillespie, 87 F.2d 944 (8th Cir. 1937), cert. denied 301 U.S. 698 (1937).

However, Drayer concedes that the court, in 195 5, examined the validity of a purported contract undertaken by John and Errett Hardin, and their respective wives and children, to divide the lands of the first trust and defeat the final remainder interest. The agreement stated that, “ [i] t is further agreed by all parties to this contract that the division made in this contract of all lands described herein is final and lasting and forever binding on all parties concerned.”

The court found that the agreement was “in direct contravention of, and in derogation of, the clear provisions and intent of the will of J.J. Hardin,” and declared the contract null and void from its inception. Necessarily, the court had to determine the circumstances surrounding the termination of the trust, and the proper disposition of the corpus upon its termination, in order to assess the validity of the contract at issue.

The court stated in its 1955 decree:

The court further finds and interprets the will to mean that upon the expiration of the life of the first trust, the lands comprising said trust shall be owned in fee simple by the survivor or survivors of the legal descendant or descendants of testator’s sons, John and Errett, who are living at the time of the expiration of the trust, and if there then shall be more than one surviving legal descendant of John and Errett as that term is defined herein, then the lands of the first trust shall be divided among them each share and share alike in the same manner and with a like share going to each as would be the case if such descendants were the only child or children of such one person, and if such one person had died intestate at the time of the trust. . . .

We have held that under the doctrine of res judicata, or claim preclusion, a valid and final judgment rendered on the merits by a court of competent jurisdiction bars another action by the plaintiff or his privies against the defendant or his privies on the same claim or cause of action; furthermore, res judicata bars not only the relitigation of claims which were actually litigated in the first suit, but also those which could have been litigated. Toran v. Provident Life & Accident Ins. Co., 297 Ark. 415, 764 S.W.2d 40 (1989).

Unlike Connor, supra, which stated that a question that was considered, but which was not before the court and was unnecessary to the decision of the case, was not binding as authority, the chancellor’s 1955 decree squarely faced the issue of the validity of a contract that purported to divide the lands contained in the Trust. Although not specifically addressed in the 195 5 decree, the Rule in Shelley’s case and the Statute of Uses were imbedded within a determination of the contract issue and, if not in actuality, could have been litigated at that time.

Drayer does not dispute that she was represented in the 1955 proceeding by a guardian ad litem and is bound by those proceedings. Therefore, we decline to relitigate her claim.

Drayer also argues that the trial court erred in ruling that the Rule in Shelley’s case was not applicable. Since Drayer’s second point of error relies on this court finding that her claim is not precluded under the doctrine of res judicata, we need not address the argument.

Affirmed.

Turner, J., not participating.


author: Darrell Hickman, Justice. Tom Glaze, Justice,

text:
    Carolyn KING, Guardian and Next Friend of Katrina King v. LITTLE ROCK SCHOOL DISTRICT, et al.
    89-262
    782 S.W.2d 574
    Supreme Court of Arkansas
    Opinion delivered January 22, 1990

      Nussbaum, Newcomb & Hendrix, by: Robert A. Newcomb, for appellant.

      Friday, Eldredge & Clark, by: Scott J. Lancaster, for appellee Little Rock School District.
   Darrell Hickman, Justice.

The main question in this case is whether a school district must insure a bus chartered for a one day field trip, when the bus is not owned by the school district nor driven by a district employee. The answer is no.

Katrina King was a student at Horace Mann Junior High School in Little Rock. On May 9, 1986, she participated in a school field trip that took students to the Nuclear One power plant in Russellville and to Petit Jean Mountain. To transport the students on the trip, the school district hired two buses owned by the Trinity Evangelistic Association (TEA). Katrina was on the bus driven by Irvin Dennis, a volunteer with TEA. While coming down Petit Jean Mountain, the bus ran off the road and Katrina sustained injuries. Katrina’s mother, as guardian and next friend, filed suit against TEA, Irvin Dennis, and the Little Rock School District. The case was tried to the judge. The judge found TEA liable and awarded the appellant $3,000 in damages. On appeal it is argued that the judge erred in dismissing appellant’s case against the Little Rock School District and Irvin Dennis. We agree that the dismissals were proper and affirm the judgment.

The Little Rock School District was dismissed from the case before trial. The judge ruled that, since the district did not own the bus, it was not required to carry motor vehicle liability insurance on the bus. Therefore, the district remained immune from tort liability. We agree that the district was not required to insure the bus.

School districts are among the political subdivisions that are generally immune from tort liability. See Ark. Code Ann. § 21-9-301 (1987). However, in order that persons injured by the subdivisions’ vehicles may have redress for negligence, Arkansas law requires political subdivisions to carry liability insurance on their motor vehicles. Ark. Code Ann. § 21-9-303 (1987) reads as follows:

All political subdivisions shall carry liability insurance on all their motor vehicles in the minimum amounts prescribed in the Motor Vehicle Safety Responsibility Act, § 27-19-201 et seq.

If a subdivision fails to carry liability insurance on its motor vehicle it becomes, in effect, a self-insurer and may be held liable for an amount not to exceed the minimum amounts of coverage prescribed by the Motor Vehicle Safety Responsibility Act. Sturdivant v. City of Farmington, 255 Ark. 415, 500 S.W.2d 769 (1973). That is what the appellant contends has happened in this case. She claims that the school district was required to insure the bus and, by failing to do so, forfeited its statutory grant of immunity. The question we must answer is, did the legislature, by requiring political subdivisions to carry liability insurance on “their” motor vehicles, intend for that requirement to apply to a situation like this one?

The trial judge held that the word “their” means vehicles which are owned by the political subdivisions. The appellant argues the judge’s interpretation is too restrictive, citing Ark. Code Ann. § 6-19-102 (1987). That law provides that school districts may hire or purchase school buses or make other arrangements as they deem best, affording safe and convenient transportation to pupils. Therefore, the appellants claim, the legislature has recognized that students may be transported in vehicles other than those actually owned by the school district. We disagree with the appellant’s argument that § 6-19-102 is relevant here. It applies to the transportation of pupils to and from school. That is not the situation we have here.

The appellant also argues that the trial judge’s ruling would allow school districts to evade the insurance requirement by leasing their buses rather than buying them. We will not decide in this case if the legislature intended the statute to be applied strictly to vehicles owned by the political subdivision. But we can say with confidence that the legislature did not intend for a school district to insure a bus which was owned by an independent entity, operated by a driver who was not employed or hired by the district, and chartered for a one day field trip. That is the extent of our holding. The purpose of the law is to insure that a person injured by a subdivision vehicle will have some redress. In this case, there is redress against the driver and the owner of the bus.

The second point for reversal involves the dismissal of the bus driver, Irvin Dennis, from the lawsuit. Dennis was dismissed at the close of the appellant’s case. The judge determined that the appellant had not presented sufficient evidence to show that Dennis was negligent, and we agree.

Since this was a nonjury case, Dennis properly challenged the sufficiency of the evidence by moving to dismiss the appellant’s claim against him. See ARCP Rule 50(a). In addressing the issue of whether it was proper for the trial court to dismiss the case, we must consider whether the plaintiffs evidence, given its strongest probative force, presents a prima facie case. Noland v. Thomas, 228 Ark. 572, 309 S.W.2d 727 (1958); McCullough v. Ogan, 268 Ark. 881, 596 S.W.2d 356 (Ark. App. 1980). In this case, the appellant did not make a prima facie case that Irvin Dennis was negligent in his operation of the bus.

The appellant’s case consisted of the testimony of Carolyn and Katrina King and that of Irvin Dennis. Dennis testified that he was driving the bus down Petit Jean Mountain in second gear, going about twenty miles per hour. When he began to apply his brakes, he said the air pressure began to drop. He tried to slow the bus but it wouldn’t stop. He was unable to negotiate a curve on the hill, and the bus ran off the road. He said he had not driven before on mountains as steep as Petit Jean. He did testify that if he had been in first gear, the bus would have been going seven miles per hour rather than twenty miles per hour. But he said he probably would have still run off the road because of the lack of brakes and the weight of the bus.

The judge found that the appellant simply failed to show what the driver did wrong. She presented evidence of the driver’s conduct; but she presented no evidence to show that his conduct was negligent or was the cause of the accident. Later, after Dennis had been dismissed from the case, the testimony of a mechanic was presented as part of TEA’s case to show that first gear only should have been used in driving down the mountain. But by that time, the appellant had presented her case and Dennis had been dismissed. The judge ultimately found that Dennis’ negligence was the cause of the accident and imputed that negligence to his principal, TEA. But at the time Dennis made the motion for dismissal, he was entitled to it.

We note that certain statutes which provide immunity for volunteers and for members of non-profit organizations were not yet in existence at the time the accident in this case occurred. See Ark. Code Ann. §§ 16-120-101 and -102 (Supp. 1989) and Ark. Code Ann. § 16-6-105 (Supp. 1989).

Affirmed.

Turner, J., not participating.

Holt, C.J., and Glaze, J., dissent.

Tom Glaze, Justice,

dissenting. I dissent because I disagree that the driver, Irvin Dennis, was properly dismissed from this case at the end of appellant’s proof. I quickly add that this court fully realizes that after this cause was fully tried, the trial court found that Dennis was at fault because he “took the curve too fast” or “he was in second gear when he should have been in first or something.”

In reviewing the correctness of the trial court’s ruling dismissing Dennis as a party, we must look at the evidence as it appeared when the appellant rested her case. In doing so, we give the proof its strongest probative force. Grendell v. Kiehl, 291 Ark. 228, 723 S.W.2d 830 (1987). In my view, this court, while recognizing this important tenet, fails to apply it.

Substantial evidence in this cause was offered by Mr. Dennis’s own testimony, which was presented as a part of appellant’s case. Dennis testified that, at the time of the accident, he was driving a Silver Eagle bus, like those operated by Greyhound or Trailways, down Petit Jean Mountain. The only experience Dennis had in driving a bus was that he had gained while driving for Trinity Evangelistic Association. He said that he had driven a bus to Hot Springs, but he had been on no mountains as steep as Petit Jean. When going down Petit Jean, he placed the bus in second gear. Dennis explained that the bus ran about twenty miles an hour in second gear but only about seven miles an hour in first gear.

Dennis further testified that when the brakes stopped working, he was going too fast to turn the corner; the bus was loaded heavy and the road was real steep. He concluded that if he had been going seven miles an hour, he “didn’t know if [he] could have made the curve.”

Giving the foregoing evidence it strongest probative value, I believe it is fair to say that Dennis was an inexperienced driver and that he had never experienced driving in mountains, much less, one as steep as Petit Jean. His bus was loaded heavily with children when going down a steep grade. Dennis had placed the bus in second gear. Going twenty miles per hour, he did not know if the bus could have made the curve but a clear inference was left that it could have.

After the appellant’s case, the only additional evidence related to negligence on Dennis’s part was given by Mr. Harry Anderson, who custom builds and services buses. He testified that if he was going to supervise someone on driving down Petit Jean Mountain, he would tell them to drive in first gear only — the bus would not have gone down the mountain safely in any other gear. In my view, Dennis’s earlier testimony, given its reasonable inferences, showed that he should have had the bus in first gear when going down Petit Jean Mountain and that it was unsafe and he could have made the curve if he had been driving in first gear. Anderson’s testimony, in opinion form, merely confirmed Dennis’s story. The trial court, in my opinion, was premature in dismissing Dennis from the suit, and I believe this court is wrong in upholding that decision.

Holt, C.J., joins this dissent.

       Dennis’s statement suggests he may or may not have made the curve if he had been driving at this reduced speed. If it is possible to derive conflicting inferences from even uncontradicted evidence, it is error to direct a verdict. See 5 A James Wm. Moore, Moore's Federal Practice ¶ 50.2[1] (2d ed. 1987).


author: Robert H. Dudley, Justice. Otis H. Turner, Justice,

text:
    Carl David HAMM v. STATE of Arkansas
    CR 89-108
    782 S.W.2d 577
    Supreme Court of Arkansas
    Opinion delivered January 22, 1990
    [Rehearing denied February 12, 1990.]

      John Wesley Hall, Jr., P.C., by: Craig Lambert, for appellant.

      Steve Clark, Att’y Gen., by: Joseph V. Svoboda, Asst. Att’y Gen., for appellee.

      Hays, J., not participating.

   Robert H. Dudley, Justice.

James Pace, a convicted felon on parole with a history of drug abuse, told his parole officer that he was once again using cocaine. He further stated that appellant, Carl Hamm, was supplying him with the cocaine, and the only way he could break his habit was to get appellant off the streets. Pace agreed to make a controlled purchase of cocaine from appellant. His body was searched, his clothes were searched, he was equipped with a body microphone, and he was given $ 1,500 in cash. His car was searched for drugs and money. Followed by the police, he drove his car to appellant’s residence. Appellant and four (4) other people were in the house. Monitored electronically, Pace went into the house and purchased an ounce of cocaine for the $1,500. Pace was kept under observation until he returned to the police department where he handed the ounce of cocaine to the police. The appellant was charged with, and convicted of, delivery of cocaine and sentenced as an habitual offender to life imprisonment. We affirm the conviction.

Appellant first argues that the trial court erred in refusing to give the jury a written copy of the instructions. Our law is clear that, in a criminal case, upon request by counsel for any party, or by a juror, the trial judge must supply a written copy of the instructions to the jury. A.R.Cr.P. Rule 33.3 and Oliver v. State, 286 Ark. 198, 691 S.W.2d 842 (1985). Here, after oral instructions were completed, the appellant’s counsel asked the question, “Would you give the instructions to the jury?” and the trial court responded, “If they ask for them.” It is not clear that this question was a request that the written instructions be given to the jury, but even if it did constitute such a request, the trial judge did not clearly rule that he would not give the written instructions to the jury. If counsel’s question constituted a request that the written instructions be given to the jury, the judge’s response should have caused him to pursue the matter. There was no clear ruling that the instructions would not be given to the jury upon the defendant’s request. It is up to the movant to obtain a clear ruling in order to preserve an issue for appeal. Dildine v. Clark Equipment Co., 285 Ark. 325, 686 S.W.2d 791 (1985).

The appellant next argues that the trial court abused its discretion in denying appellant’s motion in limine to exclude the recording of the purchase of cocaine. As previously set out, Pace wore a body microphone into appellant’s residence, and the transaction was monitored and recorded. The recording is inaudible for periods, apparently when Pace’s clothing was rubbing against the body microphone, and it is not intelligible at other times because more than one person was talking, but it is understandable the remainder of the time. The conversation about the ounce of cocaine and counting out the $1,500 are understandable, as is a conversation about a pistol.

The general rule is that a recording such as the one at issue is admissible unless the inaudible portions are so substantial as to render the recording as a whole untrustworthy. Harvey v. State, 292 Ark. 267, 729 S.W.2d 406 (1987). Further, the introduction of recordings is a matter within the trial court’s discretion, and the trial court’s decision will not be reversed absent an abuse of that discretion. Harvey v. State, supra. Here, the main parts of the transaction can be understood, and the inaudible parts, or gaps, are not so substantial as to render the recording untrustworthy. The trial court did not abuse its discretion in admitting the recording.

Appellant additionally makes a number of arguments concerning evidentiary rulings. There is no merit in any of the arguments. In cross-examining Pace, the parolee who made the purchase, appellant asked several questions regarding whether Pace had previously falsely implicated someone in a crime. The questions went to Pace’s character for truthfulness or untruthfulness. Pace denied any false swearing. Appellant’s attorney then sought to introduce an opinion of this court which contains a reference to Pace falsely implicating someone else in another case. The trial court refused to admit the opinion into evidence. The ruling was correct. Impeachment related to character for truthfulness or untruthfulness is limited to cross-examination of the witness. A.R.E. Rule 608(b) makes it clear that no extrinsic evidence of prior misconduct is admissible.

The appellant also complains that the trial court refused to allow him to question Pace about an earlier jail escape for which Pace was not convicted. An escape is not probative of truthfulness or untruthfulness, and thus, the inquiry was not admissible under A.R.E. Rule 608(b). Since there was no conviction, it could not come in under A.R.E. Rule 609.

Appellant further argues that the trial court’s above-set-out rulings on his cross-examination of Pace violate appellant’s Sixth Amendment right of confrontation. The short answer to the argument is since the rulings concerning cross-examination of Pace were correct, the appellant was not prohibited from engaging in appropriate cross-examination.

The appellant next contends that the trial court erred in refusing to allow him to ask Pace’s parole officer on direct examination if he were aware that appellant had remained in jail since his arrest. Appellant contends the matter is relevant and argues that since Pace had admitted he purchased drugs during the period appellant was in jail, it meant that some other person sold those drugs to Pace. Pace had already testified that he knew others who were trafficking in drugs, and the fact that he obtained drugs from someone else subsequent to appellant’s arrest is not relevant.

Appellant’s final point of appeal involves a witness and the Fifth Amendment testimonial privilege. The witness had earlier told the prosecutor and appellant’s attorney that he had never sold drugs to Pace. Even so, the appellant wanted to put the witness on the stand and ask him if he had ever sold drugs to Pace. Both parties had been told that the witness would take the Fifth Amendment in response. Such an occurrence would imply to the jury the witness had in fact sold drugs to Pace. The trial judge ruled that he would not allow appellant to flagrantly build his defense out of the use of the testimonial privilege. See Foster v. State, 285 Ark. 363, 687 S.W.2d 829 (1985). The appellant now argues the ruling violated his Sixth Amendment right of confrontation. Such an argument was not presented below, and we will not consider it for the first time on appeal. Dean v. State, 293 Ark. 75,732 S.W.2d 855 (1987). Further, neither the prosecution nor the defense is permitted to call a witness knowing that the witness will claim his testimonial privilege. See United States v. Crawford, 707 F.2d 447 (10th Cir. 1983); Kiefer v. State, 297 Ark. 464, 762 S.W.2d 800 (1989).

Pursuant to Rule 11 (f) of the Rules of the Supreme Court and the Court of Appeals, an examination has been made of all other rulings adverse to appellant, and none of them constitute prejudicial error.

Affirmed.

Hickman and Turner, JJ., concur.

Otis H. Turner, Justice,

concurring. I concur in the result but express my disagreement with that part of A.R.Cr.P. Rule 33.3 providing that upon request of counsel, a copy of the instructions shall be given to the jury. In my view, this is superfluous. The instructions have been read to the jury, and I see no useful purpose to be served by this requirement unless and until the jury so requests.

Hickman, J., joins this concurrence.


author: David Newbern, Justice.

text:
    CONTINENTAL CASUALTY COMPANY, a Division of CNA Insurance Company v. Keri DIDIER, Don Didier, Paul Hogan, and Johnnie F. Hogan
    89-339
    783 S.W.2d 29
    Supreme Court of Arkansas
    Opinion delivered January 22, 1990
    [Rehearing denied February 20, 1990.]

      Jones, Gilbreath, Jackson & Moll, by: Robert L. Jones, Jr., and Charles R. Garner, for appellant.

      Kirkpatrick and Horan, by: Matthew Horan; and Stephen Sharum, for appellees.
   David Newbern, Justice.

This appeal questions whether there was a sufficient factual basis to support the chancellor’s decision to reform an instrument evidencing an insurance contract. Also at issue is the insurer’s claim for a declaratory judgment to the effect that the policy, due to an exclusionary clause, did not cover liability which might arise because of the unlawful sale of alcoholic beverages. The chancellor granted reformation on the ground of unilateral mistake of the insured coupled with inequitable conduct on the part of the insurer. The effect of the reformation was to remove the clause excluding liability for liquor sales. We hold the reformation was improper because there was insufficient evidence of mistake. We also hold the insurer was entitled to a declaratory judgment to the effect that the policy did not cover the liability asserted. The decree is reversed and remanded.

Keri Didier, a minor, was seriously injured in an automobile accident on November 5,1981. The car was driven by Paula Kay Baty, also a minor, who was driving while intoxicated. Keri and his father, Don Didier, sued Paul Hogan and his wife, Johnnie F. Hogan, the owners of Cheers Fort Smith, a liquor store. It was alleged that Baty and other minors had purchased beer and wine at Cheers on the day of the accident without having to show identification to establish their ages.

The actions was removed to federal court. The insurer, appellant Continental Casualty Company, a division of CNA Insurance Company (CNA), declined to defend the suit on the basis that the policy it had issued covering Cheers contained a clause excluding coverage for “personal injury” or “property damage” resulting, “[b]y reason of the selling, serving or giving of any alcoholic beverage to a minor or to a person under the influence of alcohol or which causes or contributes to the intoxication of any person.”

The Didiers and the Hogans entered an agreement by which the Hogans stipulated their liability and agreed to cooperate with the Didiers in pursuing their claim against any third party including insurers. In return, the Didiers agreed not to pursue any judgment they might get against the Hogans. Based on a stipulation, the federal court entered judgment in favor of the Didiers and against the Hogans for $351,546.73.

The Didiers and the Hogans then brought an action in Sebastian County Circuit Court against CNA and Brown-HillerClark, the insurance agency which had sold the Hogans the policy in question. One of the counts sought reformation of the policy. That count was transferred to chancery court. CNA counterclaimed for a declaratory judgment to the effect that the policy did not cover the asserted liability.

The chancellor found that Paul Hogan was mistaken in thinking that he had an “all risk” insurance policy and that his mistake had been induced by inequitable conduct on the part of CNA. The chancellor granted reformation of the policy. The decree provided that, “[i]n the event the policy cannot be reformed,” CNA’s claim for declaratory judgment should be denied because the policy could be interpreted as providing coverage. As its reason for the alternative holding denying CNA’s declaratory judgment claim, the decree stated that the policy attempted to exclude “personal injuries” as opposed to “bodily injuries” resulting from liquor sales, thus permitting the conclusion that a narrower class of injuries was excluded. The decree mentioned other issues to be determined in the action remaining in circuit court but stated, presumably to comply with Ark. R. Civ. P. 54(b), that there was no just reason for delay in entering the chancery decree. CNA has appealed.

1. Reformation

Upon purchasing a building in Fort Smith in which to locate his liquor store, Paul Hogan called Larry Clark, an insurance agent with whom he had previously done business. He told Clark he needed a binder right away to give to the bank which was to be his mortgagee. Clark had brochures from CNA describing a “Business Account Policy” which was available in two forms, basic coverage and “broad form.” Clark testified that he wanted to get a “deluxe policy” for Hogan, and the literature had not made him aware of the liquor sales exclusion. He wrote a binder for the broad form.

An advertisement sent by CNA to agents was introduced as an exhibit. It described the business coverage policy and stated, “everything you need to present, rate, quote and bind coverage is now in your hands.” It listed types of businesses for which the policy would not be available, and liquor stores were not listed. It noted “liquor and wine” as a category of business for which the policy was available but stated that category would be eligible for basic coverage only.

The cover of another brochure was also introduced. It described the policies and noted that “The Broad Plan offers protection for all perils except the ones excluded in the policy.”

Clark had not sold this type of CNA policy previously. He wrote the binder for Hogan on the basis of the literature without seeing the policy. He testified that when the policy was received later he delivered it to Hogan or the manager on the premises at the liquor store. Hogan testified he could not remember receiving a copy of the policy.

Upon receiving the policy Clark became aware of the exclusion for liability based on liquor sales. He tried to get CNA to waive the exclusion. He tried to place the liquor sales coverage with other companies, including specialty companies, without success. He finally induced AETNA to agree to issue the coverage upon the date the policy would have been renewed with CNA, but by then the accident had occurred, and the Hogans had sold the business.

The basis stated in the chancellor’s decree for his finding of inequitable conduct on the part of CNA is the CNA literature describing the coverage as “all risk” and the failure of the company to inform Hogan, either directly or indirectly, of the exclusion. The decree states that Hogan was mistaken about the coverage afforded. The basis for that finding apparently was that Hogan expected coverage for liability resulting from illegal liquor sales.

There is no evidence to support the finding that Hogan was under a mistaken impression about the insurance he was buying. He had once sold insurance for Allstate for over two years and was familiar with the insurance business. The strongest statement in his testimony is that he “wanted liability coverage and property insurance, whatever you need to cover your liability from whatever standpoint.” He did not state that he thought he had been insured against any risk resulting from illegal liquor sales.

A written instrument may be reformed if there has been a mistake of one party accompanied by fraud or other inequitable conduct of the other or remaining parties. Turney v. Roberts, 255 Ark. 503, 501 S.W.2d 601 (1973). See also Arnett v. Lillard, 245 Ark. 939, 436 S.W.2d 106 (1969). The evidence must be clear and convincing. Hervey v. College of the Ozarks, 196 Ark. 481, 118 S.W.2d 576 (1938). See also Turney v. Roberts, supra. A mistake is a state of mind not in accordance with the facts. Restatement of Restitution, § 6 (1937); D. Dobbs, Remedies, § 11.2 (1973). In Arkansas there is no civil liability resulting from the illegal sale of liquor. Rone v. H.R. Hospitality, Inc., 297 Ark. 107, 759 S.W.2d 548 (1988); Carr v. Turner, 238 Ark. 889, 385 S.W.2d 656 (1965). A policy holder has a duty to educate himself concerning his insurance. Howell v. Bullock, 297 Ark. 552, 764 S.W.2d 422 (1989). Given Hogan’s experience as an insurance agent, to say nothing of his duty to investigate his coverage, it is most unlikely that he even contemplated such liability, much less that he assumed his policy covered it. His testimony that he “wanted” liability coverage from every standpoint is clearly insufficient to show his state of mind was inconsistent with the facts.

We need not discuss whether CNA’s conduct can be considered to have been inequitable because we find the chancellor’s conclusion that Hogan was mistaken to be clearly against the preponderance of the evidence. See Ark. R. Civ. P. 52(a).

2. Declaratory judgment

Given our reversal of the reformation portion of the decree, CNA was entitled to a declaration that the policy did not cover the liability asserted here.

The general liability section of the policy provides coverage for injury to a third party for personal injury caused by an “occurrence.” The policy defines “occurrence” as, “an accident . . . which result [s] in bodily injury. . .or. . .personal injury.” “Bodily injury” is defined in part as, “bodily injury, sickness or disease sustained by any person which occurs during the policy term. . . .” “Personal injury” is defined as follows:

PERSONAL INJURY means bodily injury and other injury arising out of any of the following acts if first committed during the policy term:
1. False arrest, detention, imprisonment, or malicious prosecution.
2. Wrongful entry or eviction or other invasion of the right of private occupancy of an occupant.
3. A publication or utterance
(a) of a libel or slander or of other defamatory or disparaging material.
(b) in violation of an individual’s right to privacy.

4. Piracy, infringement of copyright, title or slogan in the course of Your advertising activities.

The exclusionary language of the policy was:

We will not pay for any of the following Personal Injury or Property Damage to or resulting from.

5. Damages resulting from Your operation or the operation of someone else from whom You have assumed liability and may be held liable:

a. As a person or organization engaged in the business of manufacturing, distributing, selling or serving of alcoholic beverages, or
b. If not so engaged, as an owner or lessor of premises used for such purposes, if such liability is imposed:
(1) Because of violation of any statute, ordinance or regulation regarding the sale, gift, distribution or use of alcoholic beverages.
(2) By reason of the selling, serving or giving of any alcoholic beverage to a minor or to a person under the influence of alcohol or which causes or contributes to the intoxication of any person.

In his decree the chancellor stated that CNA’s petition for declaratory judgment should be denied because the policy could be interpreted as granting coverage. He noted further, “CNA’s attempt to exclude ‘personal injuries’ as opposed to ‘bodily injuries’ permits the conclusion that a narrower class of injuries were excluded.” Because “bodily injury” is specifically included in the policy’s definition of “personal injury,” we cannot agree with the chancellor’s conclusion.

There is ambiguity in the policy definition of “personal injury” when it is viewed out of context. It could mean “bodily injury” limited to that arising from the “following acts” listed in the definition. On the other hand it could mean “bodily injury,” as separately defined in the policy, and, in addition, “other injury arising out of the [listed] following acts.” However, in the context of the clause excluding liquor sales liability, we have no doubt the term “personal injury” includes “bodily injury” as defined in the policy. That is so because it is so unlikely that “bodily injury,” if it were limited to that arising from false arrest, wrongful entry, publications, etc., could have anything to do with the sale of liquor. The kind of liability likely to arise from liquor sales is precisely the kind which might have arisen in this case had Arkansas law provided it, which it did not.

We do not quarrel with the cases cited by the Didiers and the Hogans to the effect that an ambiguous insurance policy is interpreted in favor of the insured; however, we will not indulge in a forced construction outside tjie intent of either party. Mercury Ins. Co. v. McClellan, 216 Ark. 410, 225 S.W.2d 931 (1950); Habaz v. Employers Fire Ins. Co., 243 F.2d 784 (8th Cir. 1957). We consider the whole policy to determine the meaning of the clause in question. Continental Casualty Co. v. Davidson, 250 Ark. 35, 463 S.W.2d 652 (1971); Fowler v. Unionaid Life Ins. Co., 180 Ark. 140, 20 S.W.2d 611 (1929). Given the separate definition of “bodily injury,” the inclusion of that term in the policy’s definition of “personal injury,” and the fact that “bodily injury” is unlikely to occur in the categories of “other injury” listed in the exclusionary clause, we conclude the intent of the policy was to exclude liability for “bodily injury” resulting from liquor sales.

Reversed and remanded.

Glaze, J., concurring.


text:
    Everett O. MARTINDALE v. Jeffrey RICHMOND
    89-244
    782 S.W.2d 582
    Supreme Court of Arkansas
    Opinion delivered January 22, 1990

      Everett O. Martindale, for appellant.
    No brief filed.
   Tom Glaze, Justice.

The appellant appeals from a letter of caution issued by the Arkansas Supreme Court Committee on Professional Conduct after the Committee found he violated Rule 1.9 of the Model Rules of Professional Conduct. After our de novo review of the record, we affirm. See Sexton v. Arkansas Supreme Court Committee on Professional Conduct, 299 Ark. 439, 774 S.W.2d 114 (1989).

Jeffrey Richmond initiated this proceeding by filing a complaint with the Committee alleging that, in June 1982, he hired the appellant to file a divorce suit against Richmond’s wife, Adele. The Richmonds reconciled, and in August 1982, appellant had the suit dismissed.

Sometime later, the Richmonds were divorced, but appellant represented neither of them at the time. In September 1987, however, Adele contacted and hired appellant to represent her in seeking an increase in child support payments from Mr. Richmond. Appellant testified that when he agreed to represent Adele, he had no recollection of having represented Mr. Richmond in the parties’ divorce action in 1982. Apparently, in preparing for the child support hearing, the parties and their respective attorneys met in connection with discovery proceedings in appellant’s office, and neither Mr. Richmond nor his attorney raised the conflict of interest issue concerning appellant’s prior representation of Mr. Richmond. Appellant stated that he was first apprised of his prior representation of Richmond about five minutes before the scheduled hearing on Adele’s petition for increased support. He argues that such last minute tactics were used to force settlement of Adele’s claim or to obtain a delay of the hearing.

Richmond testified that in his initial visit with his attorney, he mentioned that appellant had previously represented him in a prior divorce action against Adele. Richmond’s attorney averred that he learned of this information a day or so before the support hearing, and asked his client to determine whether appellant had actually filed the divorce action in 1982. Mr. Richmond responded on the day of the child support hearing by bringing photocopies of the 1982 complaint the appellant had filed and signed on behalf of Richmond. Richmond’s attorney then confronted appellant with this document and information, but appellant refused to withdraw as Adele’s attorney. The special chancellor assigned to hear Adele’s petition disqualified appellant because of his prior representation of Richmond. Richmond subsequently lodged his complaint with the Committee on Professional Conduct.

In hearing this dispute and making its decision to issue a caution letter to the appellant, the Committee relied upon Rule 1.9(a) which provides as follows:

A lawyer who has formerly represented a client in a matter shall not thereafter:
(a) represent another person in the same or substantially related matter in which that person’s interests are materially adverse to the interests of the former client unless the former client consents after consultation;

When considering the facts before us in view of the requirements in Rule 1.9, appellant unquestionably has represented both Mr. Richmond and Adele, as opposing parties in different but related proceedings where their adverse interests were involved, viz., in representing Richmond in his divorce suit against Adele in 1982 and in representing Adele in her child support action against Richmond in 1987. In determining whether a substantially related matter exists thát warrants an attorney’s disqualification, we note the rule set out in 7A C.J.S. Attorney & Client § 160 (1980), which provides as follows:

In order for an attorney to be disqualified from representing another client, the subject matter of the prior and subsequent representation must be substantially related, or there must be a relationship between the subsequent matter and the confidential information previously acquired, or it must appear that the attorney can use, to the detriment of such client, the information and confidences acquired during the existence of their relation as attorney and client. The relationship is sufficiently close to warrant disqualification if it can reasonably be said that, in the course of the former representation, the attorney might have acquired information related to the subject of the subsequent representation.

Here, there is no evidence that appellant actually intended to damage Richmond’s defense in the present support proceeding with information or confidences he had previously acquired from Richmond during their attorney/client relationship. Nevertheless, the appearance exists that such an abuse could occur and for that reason, appellant should have declined to represent Adele when he learned that he had represented Richmond earlier.

As noted in the comment to Rule 1.9, disqualification from subsequent representation is for the protection of clients and can be waived by them. Such a waiver, however, is effective only if there is disclosure of the circumstances, including the lawyer’s intended role in behalf of the new client. In this same vein, Rule 1.9 provides that an attorney who possesses a conflict of interest as described in the Rule cannot represent the other adverse party unless the attorney consults with and obtains a consent from his former client. Resolving questions of conflict of interest is primarily the responsibility of the lawyer undertaking the representation.

Again, in reviewing the record, appellant undisputedly failed to undertake the responsibility of obtaining Richmond’s consent. While appellant argues Richmond and his attorney waived any right to object to appellant’s representation of Adele, the Committee was certainly justified in believing Richmond’s attorney that he learned only a day or so before the hearing of the possible conflict, and only received documentation of it, on the day of the hearing. Richmond explained his own delay saying he was uncertain that any conflict existed unless the appellant had actually filed a divorce complaint in 1982 — a fact Richmond says he did not know until he obtained photocopies of the complaint at his new attorney’s request. Perhaps, more importantly, the general rule, which is compatible with the consent requirement set out in Rule 1.9, is that there cannot be any waiver in the absence of advice of the existence of, and the legal implications arising from, the potential conflict of interest. See 7A C.J.S. Attorney & Client § 161 (1980). Such advice (or consultation required under Rule 1.9) was not shown to exist here.

In sum, the record reflects no clear and unequivocal waiver, see 7A C.J.S. Attorney & Client § 161 (1980), and by the same token, it clearly reveals the appellant refused to withdraw from representing Adele after having learned he had previously represented Richmond. It is equally clear that Richmond’s consent was not obtained by the appellant, and no doubt, considering Richmond’s expressed dissatisfaction with appellant’s earlier representation, his consent would have not been forthcoming if asked.

For the reasons given above, we affirm the Committee’s decision.

       Adele’s surname now is Scaife, but to avoid any confusion, we refer to her given name throughout this opinion.


text:
    Darrell BRYANT v. Hollis EIFLING
    89-247
    782 S.W.2d 580
    Supreme Court of Arkansas
    Opinion delivered January 22, 1990

      John L. Kearney, for appellant.

      Huckaby, Munson, Rowlett and Tilley, P.A., by: Beverly A. Rowlett, for appellee.
   Otis H. Turner, Justice.

This is an appeal from a jury verdict in favor of the appellee, Hollis Eifling, the defendant below.

The appellant, Darrell Bryant, began an outing with the appellee at about 6:00 p.m. on March 1, 1986. Over a period of five or six hours, according to testimony, the appellee and the appellant each drank about five or six beers in bars or while riding around in an automobile driven by the appellee. At about midnight, the appellee lost control of his car on a curve while traveling about 60 miles per hour. The car left the road and struck a utility pole. The appellant alleged that he was injured as a result of the appellee’s negligence.

The appellant argues two points for reversal: first, that the trial court erred in admitting medical records, purportedly those of the appellant, which in fact belonged to a third party; second, that the trial court erred in allowing the jury to consider comparative fault when the appellee admitted negligence. These points are without merit in light of the proceedings had at trial of this cause.

With respect to the first issue, the appellee tendered various hospital records containing proof of medical attention rendered to the appellant over an extended period of time. Counsel for the appellant requested and was granted an opportunity to examine the records. After examining them, the appellant’s attorney expressed no objection to their introduction, and the records were admitted.

On cross-examination, the appellant was questioned about an accident referred to in one of the items in the medical records; he denied having had such an accident and stated that the medical records concerning the incident belonged to another person with the same name. Counsel for the appellant then moved that the portion of the records referring to the disputed accident be stricken. The appellee’s attorney argued that the appellant’s denial that he was involved in such an accident did not go to admissibility but instead to the weight to be given that evidence. The appellant’s motion was overruled.

Subsequently the matter came up again, and the appellee’s attorney stipulated that the disputed medical records did not pertain to the appellant, and the jury was so advised. The appellant now argues that a mistrial should have been declared because of the prejudicial effect.

The appellant neither requested nor moved for a mistrial and therefore cannot now argue reversible error for the first time on appeal. Thompson v. AAA Lumber Co., 245 Ark. 518, 432 S.W.2d 873 (1968). Even if a proper motion had been made and mistrial had been denied, there is a total absence of any prejudice to the appellant as a result of the objectionable evidence. Mistrial is a drastic remedy that is appropriate only if justice cannot be served by continuation of the trial and when it is obvious that the prejudice cannot be removed by any other means. Gardner v. State, 296 Ark. 41,754 S.W.2d 518 (1988). Whatever prejudice there may have been, the defect was cured by the explicit stipulation by the attorney for the appellee that the medical records in question were not those of the appellant. The Supreme Court will not reverse a judgment unless the error was prejudicial. Martin v. Blackmon, 277 Ark. 190, 640 S.W.2d 435 (1982).

Regarding the second issue, it was not error for the trial court to submit the case to the jury on comparative fault. The fact that one party admits negligence at trial does not preempt consideration of any negligence of another party when negligence is properly alleged and supported by evidence. Further, there was no request by the appellant for a directed verdict, nor did the appellant object to any of the court’s instructions.

The Arkansas comparative fault statute, Ark. Code Ann. § 16-64-122 (1987), forms the basis for several instructions set forth in Chapter 21 of the Arkansas Model Jury Instructions (Civil), 3rd Edition. Here, AMI 2104, as adapted to this case, was given without objection by the appellant. AMI 2104 is the comparative negligence law when the issue of comparative negligence is submitted on a general verdict basis.

Another jury instruction raised the defense of assumption of risk. Again, no objection was made by the appellant. This court has held that assumption of the risk by a party will not bar recovery but will be considered when assessing fault. Simmons v. Frazier, 277 Ark. 452, 642 S.W.2d 314 (1982); J. Paul Smith Co. v. Tipton, 237 Ark. 486, 374 S.W.2d 176 (1964). Aside from the fact that the appellant did not preserve any alleged error by proper objection, there was substantial evidence from which a jury could find that the appellant’s injuries resulted from or were contributed to by his own negligence.

Affirmed.