author: Jack Holt, Jr., Chief Justice.

text:
    Leneva Judy HOSEY v. Marysue Robinson BURGESS, Executrix of the Estate of Florence R. Watkins, Deceased
    94-583
    890 S.W.2d 262
    Supreme Court of Arkansas
    Opinion delivered January 9, 1995

      Roscopf & Roscopf, P.A., by: Charles B. Roscopf, for appellant.

      David Solomon, for appellee.
   Jack Holt, Jr., Chief Justice.

This case involves an appeal from a decision by the Phillips County Chancery Court, finding that appellant Leneva Judy Hosey and her late husband, N.R. Hosey, as trustees for the late Florence R. Watkins (whose executrix was appellee Marysue Robinson Burgess), were guilty of self-dealing to the detriment of Mrs. Watkins by subleasing a farm and not giving Mrs. Watkins as the trust beneficiary the benefit of the enhanced rental, and awarding prejudgment interest and attorney’s fees. Three issues are raised for reversal: (1) whether the trial court erred in finding the trustees guilty of self-dealing; (2) whether the trial court erred in depriving the lessees of their benefits under their lease agreement; and (3) whether the trial court erred in awarding the executrix pre-judgment interest for three years (1989, 1990, and 1991) and attorney’s fees. On de novo review, we have determined that the chancellor was not clearly erroneous in his findings, and we affirm his decision.

Mrs. Burgess, as executrix, presents one issue on cross-appeal: whether the chancellor was clearly erroneous in finding that the estate was to receive only the fair rental value of the trust lands in the subleases. Due to the utter lack of authority offered to support the cross-appeal, we do not consider it.

At the outset, it should be noted that the abstract is deficient in several respects. Neither the will nor the lease appears, despite the centrality of each to the arguments on appeal. Further, the chancellor’s findings are inadequately abstracted, although the appellee, Mrs. Burgess, quotes in her brief from two letter opinions at great length in her response to Mrs. Hosey’s Point I. This court has the authority to go to the record to affirm a trial court’s decision, and we do so in this instance. Haynes v. State, 314 Ark. 354, 862 S.W.2d 275 (1993).

Facts

Julian J. Watkins, who owned a farm in Phillips County, Arkansas, married Florence Robinson on March 25, 1975, after the death of his first wife, Lonette Watkins. Several years later, he retired and, on April 10, 1980, entered into a twenty-five-year lease of his property with his daughter by Lonette Watkins, appellant Leneva Judy Hosey, and her husband N.R. Hosey, who owned a substantial farming operation. The lease, which began on January 1, 1980, provided that the property must be used “for the purpose of planting, cultivating and harvesting agricultural crops and for purposes incidental thereto and for no other uses or purposes.” Mr. and Mrs. Hosey, as lessees, agreed to make annual payments of $35 per acre for the approximately 400 acres of cultivated land. Among the conditions set forth in the lease was a requirement that the lessees “not assign or sublet said premises, or any part thereof, without the consent, in writing, of Lessor first obtained. . . .”

On March 25, 1982, Julian Watkins executed his last will and testament and a codicil. In it, he named Mr. and Mrs. Hosey his co-executors. He also created a testamentary trust consisting of his land holdings, including the 400 leased acres, to be administered by Mr. and Mrs. Hosey, as trustees, on behalf of his wife:

5.1. If my spouse, Florence R. Watkins, survives me, I give, devise, and bequeath all the balance and residue of the real property of which I die seized and possessed to my trustees herein named, in trust, to hold, manage, and invest the same, to collect the income thereon, and to pay to, or apply for the benefit of, my spouse the net income thereof in quarterly or other convenient installments, but at least annually, for and during the term of my spouse’s life.
5.2. Upon the death of my spouse, my trustees shall assign, transfer, and pay over the then principal of this trust to my then living issue, per stirpes.

Among the powers granted Mr. and Mrs. Hosey as co-executors and trustees were the following:

E. To sell, transfer, convey, or otherwise dispose of any investment or property, real or personal, for cash or on credit, to any person (including my executor, my estate, the trustee of any trust created by me during my life or pursuant to my Will, any such trust, and any beneficiary of my Will or any such trust) in such manner, and upon such terms and conditions as the executor or trustee shall deem advisable;
J. To manage and operate any real property which shall at any time constitute an asset of my estate or such trust; to make repairs, alterations, and improvements thereto; to insure such property against loss by fire or other casualty; to lease or grant options for the sale of such property, which lease or option may be for a period of time which extends beyond the life of my estate or such trust; and to take any other action or enter into any other contract respecting such property which is consistent with the best interests of the beneficiaries of my estate or such trust;
S. Generally, with respect to all cash, stocks and other securities and property, both real and personal, received or held by the executor or trustee, to exercise all the same rights and powers as are or may be lawfully exercised by persons owning cash, or stocks and other securities, or such property in their own right;
T. With respect to all of the foregoing powers, to deal with any person, including any beneficiary of my estate or such trust or with such trust, or with the trustee thereof, or with the estate of any such person, or with my estate and executor, without limitation^]
AA. To do any and all other things, not in violation of any other terms of this instrument, which, in the judgment of the executor or trustee, are necessary or appropriate for the proper management, investment, and distribution of the assets of my estate or such trust in accordance with the provisions of this instrument, and in the executor’s or trustee’s judgment are for the best interests of the trust and its beneficiaries. . . .

Julian Watkins died on May 12, 1983, and his last will and testament were admitted to probate. There was no contest, and Mrs. Watkins did not elect to take against the will.

It was determined that the total acreage suitable for cultivation in the tracts of land held in trust amounted to 353.9 acres. Florence Watkins received the net trust income through the estate for the years 1983 and 1984. From 1985 through 1991, Mr. and Mrs. Hosey annually paid $12,386.50 (at the rate of $35 per acre for 353.9 acres) to themselves as trustees and then paid Mrs. Watkins the net after taxes, accounting fees, and other expenses. According to the trust accountant, P.R. Clatworthy, the following sums were paid by the trustees to Mrs. Watkins during the period in question:

Year Amount of payment
1985 $11,460.00
1986 $11,371.37
1987 $11,371.73
1988 $11,455.66
1989 $11,437.09
1990 $11,387.98
1991 $11,366.88

In 1989, Mr. Hosey, whose health was declining, ceased active farming. He and Mrs. Hosey, as lessors, entered into a lease with Dixie Hill Farms, a partnership composed of Chris Kale and Clark Hall, as lessee. The lease, which embraced the farmlands owned by Mr. and Mrs. Hosey and involved a sublease of the 400 acres of Julian Watkins’s farm, was to run for a three-year term from January 1, 1989, to December 31, 1991. The lease did not specify any rental on a per-acre basis for the two farms, which together contained approximately 1,316.5 acres; instead, the annual rental for all of the property was set at $88,000.

N.R. Hosey died on August 14,1991, leaving his wife as the surviving trustee of the Watkins trust. In 1992, she entered into another three-year sublease of the trust land, extending through 1994, for the same rental amount.

On November 24, 1992, Mrs. Watkins died, leaving her daughter, appellee Marysue Robinson Burgess, as her sole beneficiary and executrix of her estate. Mrs. Burgess filed suit against Mrs. Hosey on March 5, 1993, seeking to recover the pro rata portion of the 1992 trust income and the difference between the rental under the twenty-five year lease and the amount received “at a rental greatly in excess of the rental paid to Florence R. Watkins” under the sublease for the years 1989, 1990, and 1991.

The chancellor found, in a memorandum opinion filed on October 15, 1993, that Mr. and Mrs. Hosey had engaged in self-dealing, which, “although innocent, is still self-dealing and is prohibited by equity, law, and general principles of trust law. The actions of the Hoseys allowed them to benefit from the trust.” In the chancellor’s view, once Mr. and Mrs. Hosey stopped farming, they could not sublease the farm. While the chancellor recognized that Mrs. Watkins received no less income than she had received during the period when Mr. and Mrs. Hosey themselves farmed the land, he concluded that “[a]ny profits realized from the leasing of the farm land should have gone to the trust and ultimately to the beneficiary.”

The chancellor found that, as trustees, Mr. and Mrs. Hosey did not apply the principles of fiduciary responsibilities in ensuring compliance with the terms of the lease and that they had “no rights under the lease once they stopped farming the land.” Further, wrote the chancellor, “the trustees .must provide for the beneficiary [Mrs. Watkins] before they provide for the remainder interest holder [Mrs. Hosey].” The chancellor then determined that Mrs. Watkins’s estate was entitled to receive $26,655.74 annually for the years 1989, 1990, and 1991 and, in addition, to receive 89.86 percent of the rent for 1992.

Subsequently, in a letter opinion filed on January 3, 1994, the chancellor revised downward the amount due the estate to $18,495.00 for the years 1989, 1990, and 1991, and $16,619.61 for 1992. Moreover, the chancellor reiterated that

While it is true that the trust created by Mr. Watkins gave broad powers to Mr. and Mrs. Hosey, as trustees, the trust cannot relieve the trustees of those very basic duties that the law imposes. The trustees, as fiduciaries, must always act in the best interest of the beneficiaries.

In its decree entered on February 14, 1994, which incorporated by reference the findings of the two letter opinions, the court awarded $4,300.00 in attorney’s fees and a total of $35,017.11 in prejudgment interest. From that decree, this appeal arises.

Self-dealing and prohibition of sublease; deprivation of trustees benefit of their lease

In her first point for reversal, Mrs. Hosey argues that the chancellor erred in finding the trustees guilty of self-dealing. Her second point, concerning the asserted deprivation of the trustees’ benefit of their lease, is so closely intertwined with the first that the two may be considered together.

Self-dealing by a trustee or any fiduciary is always suspect, and it is a universal rule of equity that a trustee shall not deal with trust property to his own advantage without the knowledge or consent of the cestui que trust. Alexander v. Alexander, 262 Ark. 612, 561 S.W.2d 59 (1978).

Mrs. Hosey cites the following exception to the general rule, stated in 76 Am. Jur.2d Trusts § 380 (1992), that a trustee, in administering a trust, is under the duty of acting exclusively and solely in the interest of the trust estate or the beneficiaries within the terms of the trust and is not to act in his or her own interest by taking part in any transaction concerning the trust where he or she has an interest adverse to that of the beneficiary:

An exception exists to the well-recognized rule that a trustee may not place himself in a position where his interest may conflict with the interest of the trust property. When the conflict of interest is contemplated, created, and expressly sanctioned by the instrument, the conflict may be permitted. Thus, there is an exception when the trust clearly evidences the settlor’s intent that there be identity between trustees and a corporation partially owned by the trust.

Id. See also Bogert, The Law of Trusts and Trustees, § 543(U) (Repl. 1993): “In some cases where the settlor knew when his trust was drawn that the trustee whom he proposed to name was then in a position which, after acceptance of the trust, would expose him to a conflict between personal and representative interests, it has been held that there was an implied exemption from the duty of loyalty in so far as that transaction was concerned.”

In support of her position, Mrs. Hosey quotes the following language dealing with the exception from Gregory v. Moose, 266 Ark. 926, 933-34, 590 S.W.2d 665, 670 (Ark. App. 1979):

There is no question but that self-dealing is a breach of trust and the law will not permit a trustee to deal with trust property to his own advantage and to the detriment of the beneficiaries. But that is not the case in the matter before us. . . . Mr. Bruce gained, obviously, from the sale. But that eventuality was plainly contemplated by the provisions of the Howard will and Mrs. Howard could not have been unmindful of that when her will was made. Mr. Bruce was both a trustee and a beneficiary by design of the settlor, and that duality does not invalidate the sale. It is perfectly permissible for a trustee to also be a beneficiary of the trust, even though a certain conflict of interest undeniably results. Restatement of Trusts, § 99.

See also Clement v. Larkey, 314 Ark. 489, 863 S.W.2d 580 (1993), where this court held that the fact of a coincidental benefit to a trustee is not alone sufficient'to establish a breach of fiduciary duty on the part of the trustee.

Here, Mrs. Hosey was simultaneously trustee of the Watkins trust and remainder beneficiary under the testamentary trust established in the Watkins will. While the duality of identity is certainly not enough, in itself, to establish a violation of fiduciary duty, the circumstances of this case placed the trustee outside the bounds of fiduciary responsibility. The benefit to Mrs. Hosey was not merely coincidental but was, in fact, a breach of an explicitly defined duty to pay proceeds from the trust property to Mrs. Burgess.

Granted, the powers given Mrs. Hosey as trustee were exceedingly broad, as the sections quoted in the recitation of facts indicate. She was, for instance, empowered to “dispose of any . . . property, real or personal,... to any person ... in such manner, and upon such terms and conditions as the executor or trustee shall deem advisable....” Yet this general language was subject to the specific, overriding terms of § 5.1 in Mr. Watkins’s will, quoted earlier, in which the testator clearly set forth the extent of the duties of the trustees of the testamentary trust: “to hold, manage, and invest the same [real property], to collect the income thereon, and to pay to, or apply for the benefit of, my spouse the net income thereof ...” (Emphasis added.)

This court held, in Hardy v. Hardy, 222 Ark. 932, 940, 263 S.W.2d 690, 694 (1954), that:

A trustee is at all times disabled from obtaining any personal benefit, advantage, gain, or profit out of his administration of the trust. . . . Any benefit or profit obtained by the trustee inures to the trust estate, even though no injury was intended and none was in fact done to the trust estate[.]

In the present case, Mrs. Hosey and her late husband, however innocently, failed to adhere to the creating instrument’s express directive that they apply the entire net income of the subject property to the benefit of Mrs. Watkins for her life. By the terms of the will, they were prohibited from deriving any personal monetary benefit from the 400 acres.

In Riegler v. Riegler, 262 Ark. 70, 553 S.W.2d 37 (1977), we upheld a decree ordering the removal of a trustee who had violated his duty. The removal was premised on the trustee having exceeded the bounds of his authority in trust matters: “Without any authority from the trust instrument and without seeking approval from chancery court, appellee, as trustee, used trust funds to purchase unproductive vacant land of no value to the trust but in which he was personally interested.” 262 Ark. at 75-6, 553 S.W.2d at 40. Here, whatever latitude was allowed in the area of management and investment by the will’s grant of general powers to the trustees, the authority to dispose of income from the property was strictly limited.

Moreover, the 1980 lease contained an absolute prohibition against using the subject property for any other purpose than “planting, cultivating and harvesting agricultural crops” or “purposes incidental thereto.” It also forbade subletting in the absence of written permission from Mr. Watkins. As the chancellor pointed out in his October 1993 letter opinion, once Mr. and Mrs. Hosey ceased farming the leased land, the lease was effectively terminated. According to the default provisions of the lease, in the event of failure on the part of the lessees “to do or perform any other of the covenants ... herein contained, or shall violate in any particular any of the conditions hereof,” the lessor had the right to terminate the lease and take possession of the property. Hence, the lease was subject to invalidation by the failure of the lessees to continue the farming operation, and, having stepped into the lessor’s shoes by virtue of his death, Mr. and Mrs. Hosey had the duty to terminate the lease. Having sublet the property, however, the Hoseys, as the chancellor recognized, were under a fiduciary obligation as set forth in § 5.1 of the Watkins will to apply all proceeds from the sublease to the trust for the benefit of Mrs. Watkins.

We hold that the chancellor’s findings that Mrs. Hosey and her husband engaged in self-dealing, albeit innocent and unintentional, were not clearly erroneous.

Attorney’s fees and prejudgment interest

Under Liles v. Liles, 289 Ark. 159, 711 S.W.2d 447 (1986), attorney’s fees may be awarded for a trustee’s breach of trust. As the findings of the chancellor have been affirmed, the award of attorney’s fees was appropriate. Moreover, the present case meets the test for prejudgment interest set forth in Kutait v. O’Roark, 305 Ark. 538, 809 S.W.2d 371 (1991) — a method exists for fixing the exact value on the cause of action at the time of the occurrence giving rise to the cause of action.

Cross-appeal:

Fair rental value

Mrs. Burgess cites absolutely no authority in her point on cross-appeal. She contends that the chancellor erred in finding that she was to receive only the fair rental value of the trust lands in the subleases. This resulted from the chancellor’s correction in his second letter opinion of the drafting error contained in his first. Mathematical calculations on Mrs. Burgess’s part do not supply the place of legal authority. We do not consider the issue.

Affirmed.


source: Caselaw Access Project

author: Donald L. Corbin, Justice.

license: Public Domain

text:
    Mary Ellen CLARK v. Harvey Alden CLARK
    94-613
    890 S.W.2d 267
    Supreme Court of Arkansas
    Opinion delivered January 9, 1995

      Wilson, Engstrom, Corum, Dudley & Coulter, by: Timothy O. Dudley, for appellant.

      Robert D. Ridgeway, for appellee.
   Donald L. Corbin, Justice.

Appellant, Mary Ellen Clark, appeals the order of the Garland County Chancery Court denying her motion to disqualify Robert D. Ridgeway, Jr. as legal counsel for appellee, Harvey Alden Clark, in this post-divorce proceeding. This case was originally filed as a divorce action by appellant in 1989. Appellant and appellee were divorced in 1990 and, as a part of the marital dissolution, entered into a property settlement agreement which included the grant of a lien to appellant to secure appellee’s performance of certain obligations under the agreement. In 1992, appellee filed a motion to terminate that lien alleging all his debts under the agreement were paid. In 1993, appellant filed her motion to disqualify Ridgeway as appellee’s legal counsel. On December 6, 1993, a hearing on the motion ensued. The court’s written order denying the disqualification motion was entered on February 16, 1994, and this appeal was taken therefrom. Because we can ascertain no basis for jurisdiction of the appeal of this interlocutory order, we dismiss it without considering its merits.

In his brief, appellee raises the argument that the order here appealed is not a final appealable order as contemplated by ARCP Rule 54 and Ark. R. App. P. 2, citing no authority for this point other than the rules themselves. In the absence of a permitted exception under statute or court rule, an appealable order must be final, meaning it must “dismiss the parties from the court, discharge them from the action, or conclude their rights to the subject matter in controversy.” Arkansas Dept. of Human Servs. v. Lopez, 302 Ark. 154, 155, 787 S.W.2d 686, 687 (1990).

Turning first to appellee’s argument with respect to Rule 2, we find the issue is one of first impression in this state. Among other states’ courts which have considered the issue, we find a split of authority exists among the reported cases. D.B. Harrison, Annotation, Appealability of State Court’s Order Granting or Denying Motion to Disqualify Attorney, 5 A.L.R.4th 1251, §§ 3-4 (1981). In the federal arena, this issue has been addressed and decided by the United States Supreme Court in its decision reported as Firestone Tire & Rubber Co. v. Risjord, 449 U.S. 368 (1981), where the Court held a federal district court’s order denying a motion to disqualify the opposing party’s counsel in a civil case is not an appealable final decision under 28 U.S.C. § 1291. Section 1291 provides in relevant part: “The courts of appeals are vested with ‘jurisdiction of appeals from all final decisions of the district courts . . . except where a direct review may be had in the Supreme Court.’ ” Id. at 373. A “final decision” within the meaning of section 1291 has been construed by the Court to mean “a decision by the District Court that ‘ends the litigation on the merits and leaves nothing for the court to do but execute the judgment.’” Id. at 373 (citing Coopers & Lybrand v. Livesay, 437 U.S. 463, 467 (1978), quoting Catlin v. United States, 324 U.S. 229, 233 (1945)). The Firestone Tire & Rubber Court emphasized that the purpose underlying section 1291 is to emphasize the deference owed by appellate courts to trial judges, to avoid piecemeal appeals that would undermine the independence and special role of the trial judge, and to promote efficient judicial administration. In its disposition of the issue and the case, the Court stated:

An order refusing to disqualify counsel plainly falls within the large class of orders that are indeed reviewable on appeal after final judgment, and not within the much smaller class of those that are not. The propriety of the district court’s denial of a disqualification motion will often be difficult to assess until its impact on the underlying litigation may be evaluated, which is normally only after final judgment. The decision whether to disqualify an attorney ordinarily turns on the peculiar factual situation of the case then at hand, and the order embodying such a decision will rarely, if ever, represent a final rejection of a claim of fundamental right that cannot effectively be reviewed following judgment on the merits. In the case before us, petitioner has made no showing that its opportunity for meaningful review will perish unless immediate appeal is permitted. On the contrary, should the Court of Appeals conclude after the trial has ended that permitting continuing representation was prejudicial error, it would retain its usual authority to vacate the judgment appealed from and order a new trial. That remedy seems plainly adequate should petitioner’s concerns of possible injury ultimately prove well founded.

Id. at 377-78.

In our decision reported as Herron v. Jones, 276 Ark. 493, 637 S.W.2d 569 (1982), an appeal was taken from an interlocutory order granting a disqualification motion. The appellee in that case moved to dismiss the appeal because the order was not a final order under Rule 2. The appellant there argued that an exception to the finality rule should be made and the order appealed should be treated as a collateral order after the manner of federal procedural law, and, on that basis, held appealable. See Firestone Tire & Rubber, 449 U.S. at 375 (quoting Coopers & Lybrand, 437 U.S. at 468) (enunciating three requirements for appealability of a collateral order). In deciding that case, we stated that this court is not willing to embrace the federal collateral order exception to the finality requirement for appealability for the reason that the exception “has been a prolific source of uncertainty[.]” Herron, 276 Ark. at 496, 637 S.W.2d at 571. But, after examining the conclusions of federal courts on the issue, we cited section 1291 and observed: “We are fortunate, however, in not being bound, as the federal courts are, by a statute restricting appellate review to final orders,” and elected the simpler course of amending Rule 2 to render appealable the order granting the disqualification motion. Id. at 496, 637 S.W.2d at 570; In Re Amendment of Rule 2 of the Rules of Appellate Procedure, 276 Ark. 605 (1982) (per curiam).

Unlike Herron, appellant in the instant case does not ask this court to amend Rule 2 to render the order appealed appealable. Appellant, indeed, proffers no argument or other reply to appellee’s assertion, quite correctly made, that the order appealed is not appealable. See Firestone Tire & Rubber, 449 U.S. 368; see also Brenk v. State, 316 Ark. 249, 871 S.W.2d 372 (1994) (dismissing interlocutory appeal taken from order removing one of two court appointed attorneys for lack of appealable order). We hold that an order denying a motion to disqualify adversary’s counsel in a civil proceeding is not an appealable final order. Since this is not an appeal of a final order as required by our rules and does not fall within any other exception provided, this appeal is dismissed.

       For example, this court is vested with jurisdiction over interlocutory appeals which are permitted by statute or our court rules. Ark. Sup. Ct. R. l-2(a)(12).


text:
    W. Hunter WILLIAMS, Jr. v. Kayoko ASHLEY
    94-543
    890 S.W.2d 260
    Supreme Court of Arkansas
    Opinion delivered January 9, 1995

      Janet Moore-Hart, for appellant.

      Charles C. Gardner, for appellee.
   Donald L. Corbin, Justice.

Appellant, W. Hunter Williams, Jr., an attorney, appeals the order of the Mississippi County, Chickasawba District, Chancery Court determining the final amount owed to him by his former client, appellee, Kayoko Ashley, as compensation for legal services rendered. Jurisdiction of this appeal is properly in this court pursuant to Ark. Sup. Ct. R. 1-2(a)(3). We affirm the trial court’s judgment.

The facts of this dispute commenced on March 10, 1993 when appellant and appellee entered into a written contract pursuant to which appellant agreed to act as legal counsel to appellee in connection with her proposed divorce action. In return, appellee agreed to pay appellant’s out-of-pocket expenses in addition to a fee for his legal services of $400.00 for preparation of the initial pleading and certain other specified documents if the divorce was uncontested, or $75.00 per hour for his time expended if the divorce was contested. Appellant commenced appellee’s divorce action in the Mississippi County, Chickasawba District, Chancery Court by filing her initial pleading, and rendered certain other legal services to appellee as her legal counsel in connection with the divorce during the next six months. The divorce was contested.

During this time, appellant billed appellee periodically for his time and advanced expenses, and payments were made on the account. On September 30, 1993, appellee fired appellant. Thereafter, the parties were unable to agree on the final payment due appellant. Appellant filed a “Motion To Withdraw As Attorney Per Client’s Termination of Attorney’s Services, Motion For Court To Interpret Contractual Lien For Attorney’s Fees and Expenses, and Motion For Court To Determine Fees And Expenses Due Attorney” in the trial court which resulted in an extensive hearing on January 7, 1994. On January 26, 1994, the court entered its order which consisted of a three-page document entitled “order” and incorporated by reference the chancellor’s separate three-page letter ruling dated January 10, 1994. From this order, the instant appeal is made.

The order decreed as follows: appellant was entitled to withdraw as appellee’s counsel pursuant to appellee’s termination of appellant’s services; the March 10, 1993 letter agreement entitied appellant to “his hourly time” once appellee’s husband retained counsel and the divorce was contested; an attorney is entitled to assert a lien pursuant to Ark. Code Ann. § 16-22-301 et seq. which is applicable to all attorney-client contractual arrangements and such a contractual relationship existed between appellant and appellee; appellant was entitled to a reasonable fee for his services rendered to the date of his termination in the amount of $1,250.00, and to his expenses in the amount of $197.55; appellee was entitled to credits for sums which had been paid on the fee in the amount of $900.00, and for sums which had been paid on the expenses in the amount of $104.75; and appellant was entitled to a lien for the total net balance of $442.80.

Appellant’s first argument is that the chancellor, after finding the parties had a contract and that appellant was entitled to his hourly rate under that contract, protected under Ark. Code Ann. § 16-22-301 et seq., then erred by failing to follow “the existing attorney lien law” by awarding a “reasonable fee” rather than a fee based upon the parties’ contract rate. In support of his contention, appellant argues the trial court in the instant case made no finding that appellant was discharged for cause. Appellant then cites this court to our decision reported as Crockett & Brown, P.A. v. Courson, 312 Ark. 363, 377-A, 849 S.W.2d 938, 946 (1993), a case in which we clarified, by supplemental opinion denying rehearing, that the attorney’s lien statutes, Ark. Code Ann. § 16-22-301 to -304 (“attorney’s lien statutes”), do not apply to cases in which an attorney is terminated for cause. See Crockett & Brown, P.A. v. Wilson, 314 Ark. 578, 864 S.W.2d 244 (1993).

Initially we note appellant raises no argument challenging either the trial court’s out-of-pocket expenses award, or its allowance of credits for prior payments on appellee’s account, or its order that appellant is entitled to assert an attorney’s lien for the net award balance of $442.80. Instead, appellant’s argument is directed solely to the standard by which the trial court measured its award of the attorney’s fee. Accordingly, this court’s opinion on this point of appeal is confined to that issue.

Appellant relies in error on the attorney’s lien statutes to support his argument that the appropriate standard for the trial court’s measure of the fee award is the parties’ contract. As noted above, the attorney’s lien statutes are not applicable where the discharged attorney was dismissed for cause. Courson, 312 Ark. 363, 377-A, 849 S.W.2d 938, 946; Wilson, 314 Ark. 578, 864 S.W.2d 244. In the instant case, the trial court’s findings of fact characterized the parties’ attorney-client relationship as follows:

The relationship between the attorney and his client started to break down owing to her inability to communicate with her attorney. It appears that she was referred to office staff and a number of conferences either by telephone or in person were with the attorney’s secretary rather than the attorney. This is not to blame anyone involved in the situation; rather, it is simply an explanation of how the relationship between these parties started to deteriorate. Respondent states that she did, in fact, have several conferences with her lawyer and that the hearing in the early part of April was entirely unjustified for the reason that she had already notified him the matter would be continued upon motion of her husband and he had no need to be at the courthouse. Then the hearing was finally conducted in the latter part of April and from that point forward the client was never able to communicate with petitioner. Petitioner’s time sheet . . . corroborates her statement that there was no further communication with Mr. Williams after the temporary hearing. She finally discharged him in September and retained another attorney who has undertaken to represent her in this lien hearing.

We review chancery cases de novo on the record, and will not disturb the findings of the chancellor unless clearly against a preponderance of the evidence. Norwood v. Robinson, 315 Ark. 255, 866 S.W.2d 398 (1993). Since the question of the preponderance of the evidence turns largely on the credibility of the witnesses, we defer to the superior position of the chancellor. Id. In the instant case, it is implicit in the trial court’s findings of fact that appellant was discharged by appellee for cause. Hence the attorney’s lien statutes are neither applicable nor in issue in this case, Courson, 312 Ark. 363, 377-A, 849 S.W.2d 938, 946, and appellant’s argument must fail. The chancellor’s award of a reasonable fee for appellant’s services rendered to the date of his termination is entirely harmonious with our holding in Courson which is the controlling authority in the instant case.

Appellant’s second argument is that the trial court erred in finding appellant was not entitled to charge appellee for appellant’s time based on conferences held between appellee and appellant’s legal support staff, and for appellant’s time spent in receiving interim payments made on appellee’s account. Appellant’s third and final argument is that the award of $1,250.00 was insufficient. Appellant cites no legal authority in support of these arguments; such failure alone warrants their dismissal on appeal without further consideration. McElroy v. Grisham, 306 Ark. 4, 810 S.W.2d. 933 (1991).

The trial court’s judgment is affirmed.

       in his motion to determine fees and expenses, appellant submitted for the trial court’s approval the amount of $2,274.35 for his final attorney’s fee and expenses. The portion of this sum allocable to the attorney’s fee was computed by reference to the contractual $75.00 per hour rate.


text:
    John Michael WRIGHT v. Tommy Sue KEFFER
    94-646
    890 S.W.2d 271
    Supreme Court of Arkansas
    Opinion delivered January 9, 1995

      Bonner Law Firm, P.A., by: Douglas W. Bonner, for appellant.

      Russell D. Berry, for appellee.
   Donald L. Corbin, Justice.

Appellant, John Michael Wright, appeals an order of the Arkansas County Circuit Court, denying his petition for a writ of mandamus directing appellee, Tommy Sue Keffer, as Clerk of the Arkansas County Circuit and Chancery Courts, to disclose information contained in the court’s file of Arkansas County Chancery Court Case No. 93-140, appellant’s divorce case, styled John Michael Wright v. Donna Mary Wright. Jurisdiction of this appeal is properly in this court as it is a case of mandamus directed to a county official or court. Ark. Sup. Ct. R. 1-2(a)(6). We affirm.

Appellant filed a petition for writ of mandamus requesting appellee to disclose the address of his former wife to whom he was making child support payments through the chancery court clerk’s office. The trial court denied the petition for mandamus ruling that the case was moot, that the relief sought was most likely protected by the Federal Privacy Act, that the suit was frivolous and motivated by vendetta, and that appellant had other remedies available should he become unaware of his former wife’s address in the future.

Appellant filed this appeal from the denial of his request for a writ of mandamus. Appellant raises four points in his brief. First, he argues the trial court erred in denying the writ of mandamus because the information sought is a matter of pub-lie record. Second, he contends the trial court erred in relying on the Federal Privacy Act, cited to us by the parties only as 5 U.S.C. §§ 551 et. seq. Third, appellant argues the trial court erred in ruling the case moot. Finally, aside from the merits of the underlying petition for mandamus, appellant raises the issue of an attorney’s fee awarded to appellee. We agree this case is moot and therefore do not address the first two points. This court does not address moot issues. Hempel v. Bragg, 313 Ark. 486, 856 S.W.2d 293 (1993).

There was evidence before the trial court that appellant had indeed obtained the information requested in the petition for writ of mandamus. Appellant’s attorney took appellant’s child support payment to appellee’s office and was given a receipt bearing the address of the recipient, appellant’s former wife. The evidence indicated this information may have been released inadvertently by appellee’s staff. Nevertheless, as appellant had obtained the information he sought through the petition for writ of mandamus, the trial court ruled the case moot. We agree this case is moot.

An exception is made to the mootness doctrine for cases that are capable of repetition yet evading review, being cases in which the justiciable controversy will necessarily expire or terminate prior to adjudication. Examples of such cases are abortion law challenges, election procedure cases, and cases involving various court procedures. See e.g., Roe v. Wade, 410 U.S. 113 (1973) (challenge to abortion law considered although pregnancy concluded); Nathaniel v. Forrest City School Dist. No. 7, 300 Ark. 513, 780 S.W.2d 539 (1989) (challenge to election procedure considered although election would be completed before review could be had); Robinson v. Shock, 282 Ark. 262, 667 S.W.2d 956 (1984) (writ of habeas corpus considered although petitioner released); Arkansas Television Co. v. Tedder, 281 Ark. 152, 662 S.W.2d 174 (1983) (writ of mandamus for media access to courtroom considered although trial concluded).

Appellant argues we should apply this exception because the address of his former wife may change in the future, hence the case could recur but evade review. Indeed the possibility exists that this case may recur, but it is only a possibility and this court does not anticipate future litigation and does not issue advisory opinions. Walker v. McCuen, 318 Ark. 508, 886 S.W.2d 577 (1994). Moreover, this case, should it recur, will not necessarily evade review, hence the exception urged does not apply.

In addition to those cases that evade review, this court has recognized other exceptions to the mootness doctrine, see Arkansas Intercollegiate Conference v. Parnham, 309 Ark. 170, 828 S.W.2d 828 (1992) (and cases cited therein), but none of those exceptions require us to decide the present case.

Appellant contends the trial court’s award of an attorney’s fee was inappropriate under either ARCP Rule 11 or Ark. Code Ann. § 16-22-309. The-trial court stated in its order, “Respondent will be awarded attorney’s fees upon furnishing a statement of time and costs.” There is nothing in the record indicating appellee ever submitted a statement of time and costs. Moreover, there is nothing in the record indicating the trial court ever actually awarded an attorney’s fee in this case. The ruling in the order appealed from clearly states that a fee “will be awarded” upon a specified condition. The condition never occurred and neither did the award. We observe, however, that appellant is not precluded from raising the ARCP Rule 11 issue in the future. Spring Creek Living Center v. Sarrett, 318 Ark. 173, 883 S.W.2d 820 (1994) (per curiam).

The judgment is affirmed.


author: Robert L. Brown, Justice.

text:
    Sheridan Farrell BROWNING v. Dwain Jackson BROWNING
    94-669
    890 S.W.2d 273
    Supreme Court of Arkansas
    Opinion delivered January 9, 1995

      Wilson, Engstrom, Corum, Dudley & Coulter, by: Timothy O. Dudley, for appellant.

      Anderson & Kilpatrick, by: A. Gene Williams, for appellee.
   Robert L. Brown, Justice.

This appeal concerns a suit for negligence brought by appellant Sheridan Browning against his brother, appellee Dwain Browning. The alleged negligence centered on an allegation that Dwain had supplied a rotten and defective rope to Sheridan and failed to warn him of that condition which caused Sheridan to fall from a tree while performing tree services for Dwain. The trial court granted Dwain’s motion for summary judgment due to the absence of a genuine issue of material fact. We affirm the trial court’s order.

The facts in this case are assembled from the depositions of Dwain and Sheridan. In February 1992, Dwain asked Sheridan to cut down a tree in his yard which had been struck by lightning and had subsequently died. There is no mention in the record of whether Dwain offered Sheridan any pay for this v/ork. Sheridan and Dwain had both previously worked as groundsmen and tree trimmers for Apple Tree Service where they climbed trees utilizing ropes and cut limbs. Because a privacy fence was positioned beside the tree on Dwain’s property, Dwain requested Sheridan to use a rope to direct the tree away from the fence when it fell. Dwain told Sheridan that he could use a rope which he kept under his mobile home.

On the morning of February 29, 1992, Sheridan located the rope under Dwain’s mobile home and inspected it. Dwain was not present. The rope appeared to Sheridan to be dry, and it had a tannish color. It was about three-eighths or seven-sixteenths of an inch thick, according to Sheridan. When he worked at Apple Tree Service, he usually used ropes which were thicker. He did not notice any nicks in the rope and stated that he would not have used it had it appeared to be unsafe. After inspecting the rope, Sheridan hooked it to one of his belt loops, climbed the tree, and tied it to a “good solid” limb. The rope gave way while he was climbing back down the tree, resulting in injuries to his feet and ankles. He stated that the only explanation he could think of for the rope’s breaking was that it was rotten, but that as far as he could tell, the rope looked “okay” before his fall. He did admit that even a new rope would break if it was overloaded.

When asked about his claims that Dwain was negligent, the following colloquy took place:

DEFENSE COUNSEL: Now, you’re saying that your brother here was negligent. He did something or he failed to do something to let you know that that rope was rotten or unsound. What is it that he did or didn’t do?
SHERIDAN: He — he didn’t know enough about his rope. He didn’t — he supplied me with a bad rope.
DEFENSE COUNSEL: Do you know when he had last seen that rope or looked at it?
SHERIDAN: I don’t know.
DEFENSE COUNSEL: If he had seen that rope let’s say the same day the accident happened, looked at it, handed it to you, said, “Use this rope,” and you looked at it and saw there was a problem with it, you wouldn’t have used it, would you?
SHERIDAN: No.
DEFENSE COUNSEL: You were going to be the one climbing that tree and you’d want to satisfy yourself that that rope was okay, wouldn’t you?
SHERIDAN: I wouldn’t have used it if I’d seen it — any major defects.
DEFENSE COUNSEL: What should your brother have done to know that there might be a problem with the rope?
SHERIDAN: He should have looked at it before he gave it to me.
DEFENSE COUNSEL: If he had looked at it, and it looked the same as it looked to you, how would he know that there was any problem with the rope?
SHERIDAN: I don’t know. He should have tested it or — he shouldn’t have given me a bad rope. I don’t know what he should have done.

Dwain testified in his deposition that the rope probably came with the mobile home purchased four years previously and that it was stored with other “junk” under the structure. He stated that one winter a water pipe froze and burst, drenching the area under the mobile home. When asked about the condition of the rope at deposition, this discussion occurred:

PLAINTIFF’S COUNSEL: Did you have any idea there was anything wrong with the rope?
DWAIN: No, sir.
. PLAINTIFF’S COUNSEL: At the time that you told Sheridan where the rope was, did it occur to you that it had been wet under there with that rope under there?
DWAIN: I didn’t think about it.
PLAINTIFF’S COUNSEL: From your experience with Apple Tree,, if a rope stays damp for some period of time, will that weaken the rope?
DWAIN: I didn’t think about it because, you know, .we’ve worked in the rain before and gotten the ropes wet. And I just didn’t think about it.

Dwain stated that following the accident, he threw the rope away after the insurance adjuster examined the site and took photographs of the tree and the rope.

.On- appeal from the trial court’s order granting Dwain summary judgment, Sheridan argues that genuine issues of material fact concerning the condition of the rope and Dwain’s knowledge of it remain to be resolved. We agree with Sheridan that the Arkansas Rules of Civil Procedure and our caselaw make it clear that summary judgment is only appropriate when no genuine issue of material fact exists and when the movant is entitled to judgment as a matter of law. Ark. R. Civ. P. 56 (c); Dodds v. Hanover Ins Co., 317 Ark. 563, 880 S.W.2d 311 (1994); Young v. Paxton, 316 Ark. 655, 873 S.W.2d 546 (1994); Bellanca v. Arkansas Power & Light Co., 316 Ark. 80, 870 S.W.2d 735 (1994); Wyatt v. St. Paul Fire & Marine Ins. Co., 315 Ark. 547, 868 S.W.2d 505 (1994). The moving party bears the burden of showing that there are no genuine issues of material fact. Young v. Paxton, supra; Cox v. McLaughlin, 315 Ark. 338, 867 S.W.2d 460 (1993). In considering a motion for summary judgment, all doubts and inferences must be resolved in favor of the non-moving party, and summary judgment is not proper if reasonable minds could reach different conclusions when given the facts. Cox v. McLaughlin, supra; Tullock v. Eck, 311 Ark. 564, 845 S.W.2d 517 (1993).

Sheridan in his brief argues that he was on his brother’s premises as an invitee and that a duty of ordinary care was owed to him. Young v. Paxton, supra; Derrick v. Mexico Chiquito, Inc., 307 Ark. 217, 819 S.W.2d 4 (1991). He further contends that Dwain’s duty embraced a duty to warn him of the rope’s defective condition, which was a circumstance that Dwain knew about or should have known about. Thus, before deciding the issue of Sheridan’s status on the premises, we must first determine whether any proof exists that the rope was rotten and that Dwain knew of this or should have known of it which would then give rise to the duty to warn. See Schichtl v. Slack, 293 Ark. 281, 737 S.W.2d 628 (1987), citing Prosser and Keaton on Torts, p. 235 (5th Ed. 1984). We conclude that the requisite proof of a defective rope and Dwain’s knowledge of its condition was lacking.

We have made it clear in Arkansas that the failure to guard against an occurrence that is not reasonable to anticipate is not negligence. Benson v. Shuler Drilling Co., 316 Ark. 101, 871 S.W.2d 552 (1994); First Electric Cooperative Corp. v. Pinson, 277 Ark. 424, 642 S.W.2d 301 (1982); North Little Rock Transp. Co. v. Finkbeiner, 243 Ark. 596, 420 S.W.2d 874 (1967). Along that line, we recently discussed the knowledge of an owner of a defective product and the failure to warn as a result. See Gann v. Parker, 315 Ark. 107, 865 S.W.2d 282 (1993). In Gann, a repairman for hire entered the owners’ home to repair a gas leak. While performing this function, he came in contact with an overhead electrical ventilator and received a severe electrical shock which caused injuries. The repairman sued the owners, and the trial court granted summary judgment in their favor. In the process of affirming the order, we first noted that there was no showing that a reasonably prudent owner would have discovered the electrical defect inside the ventilator. We held that the defect inside the appliance was not apparent to the owners, and as a result there was no genuine issue of material fact concerning the owners’ alleged negligence.

In the case before us, Sheridan hinges his allegation of a defective rope on the twin facts that the rope was estimated to be four years old and had presumably gotten wet when a pipe burst under Dwain’s mobile home. We consider these assertions, which are somewhat vague and indefinite, to be insufficient to create a genuine issue of material fact regarding the rope’s condition. But even assuming that the rope was defective for whatever reason, there is no proof that Dwain knew of this or even that he had reason to know of it. In fact, Dwain testified just to the contrary. The fact that the rope may have been defective never entered his mind, he stated. And Sheridan offered no proof to dispel this other than referencing the age and wetness points already discussed. We cannot say that Dwain, as the reasonably prudent owner of the rope, was aware that it could not be used to perform the assigned task or even that he should have been aware of that fact. Without that knowledge on the part of Dwain, there was no duty to warn.

Finally, as was the case with the defective ventilator in Gann v. Parker, supra, there was no showing that a defective instrumentality was the proximate cause of Sheridan’s fall. Indeed, overload for a rope that size, which admittedly was smaller than the ropes used by Sheridan at Apple Tree Service, may have been the reason. We are also mindful of the fact that Sheridan, an experienced tree climber and trimmer, examined the rope before his climb and found no indication of deficiency. He candidly admitted that he would have satisfied himself about the rope’s quality regardless of his brother’s suggestion that he use it.

In sum, we can glean no proof from the record sufficient to create a genuine issue of material fact regarding allegations (1) that the rope was defective, (2) that Dwain knew the rope was defective, or (3) as a reasonably prudent person he should have known the rope was defective. Mere age and the possibility that the rope had previously gotten wet may give rise to a theory of the case and conjecture about the rope’s condition, but they are not sufficiently probative circumstances to avoid summary judgment.

Affirmed.


text:
    John FREEMAN and Ruth Freeman v. COLONIA INSURANCE COMPANY
    94-626
    890 S.W.2d 270
    Supreme Court of Arkansas
    Opinion delivered January 9, 1995

      Barham Law Office, by: R. Kevin Barham, for appellants.

      Huckabay, Munson, Rowlett & Tilley, PA., by: John E. Moore and Jeffrey A. Weber, for appellee.
   Robert L. Brown, Justice.

The appellants, John Freeman and Ruth Freeman, appeal an order granting summary judgment in favor of appellee Colonia Insurance Company on their claim of bad faith and dismissing without prejudice their conversion claim against the same party. Because another claim against another party, Dema Saxton, which was brought by the Freemans in the same lawsuit has not been disposed of, we dismiss this appeal pursuant to Ark. R. Civ. P. 54(b).

On November 12, 1992, appellant Ruth Freeman was involved in an automobile accident with Dema Saxton. Saxton allegedly failed to stop at a red light in the City of Ozark and collided with the automobile driven by Freeman. At the time, Sax-ton carried liability insurance with appellee Colonia Insurance. Freeman and her husband, John Freeman, filed a complaint against Saxton, asserting that she was negligent and had caused the accident. The complaint also joined Colonia Insurance as a party defendant and alleged bad faith and conversion against the insurer for taking possession of Freeman’s automobile, repairing it, and then selling it without her permission.

Colonia Insurance moved for summary judgment on the issue of bad faith based on the fact that only an insured can make a claim of bad faith against an insurer and that Freeman did not occupy that status. After a hearing on the motion, the trial court entered an order granting summary judgment to Colonia Insuranee on the issue of bad faith and dismissing without prejudice the conversion claim. The trial court expressly stated in its order that it would be prejudicial to Saxton to try the remaining cause of action for conversion against Colonia Insurance at the same time that the negligence claim against Saxton was tried. No action was taken by the court concerning the Freemans’ remaining claim of negligence against Saxton. The Freemans now appeal the trial court’s order with respect to their bad faith and conversion claims.

The Freemans’ appeal is defective because the court did not dispose of all of the parties or all of the claims comprising this lawsuit. Specifically, the court did not decide the Freemans’ negligence claim against Saxton, and that claim is still pending for resolution. Ark. R. Civ. P. 54(b) provides that an order which disposes of fewer than all of the claims or all of the parties is not a final appealable order unless the court makes an express determination that there is danger of hardship or injustice which an immediate appeal would alleviate. See Guebert v. Williams, 319 Ark. 43, 889 S.W.2d 30 (1994); Wallner v. McDonald, 308 Ark. 590, 825 S.W.2d 265 (1992); Davis v. Wausau Insur. Co., 315 Ark. 330, 867 S.W.2d 444 (1993). In the case at hand, the court did not make the required 54(b) certification justifying an immediate appeal. The trial court did allude to the prejudice that would accompany a joint trial against Saxton and Colonia Insurance in its order, and because of that perceived prejudice, it dismissed the remaining claim of conversion against Colonia Insurance, in effect removing it from the Saxton lawsuit, without prejudice to the Freemans to file a separate lawsuit against the insurance company. Nevertheless, that statement by the court falls far short of the required Rule 54(b) language required to justify an immediate appeal. See Franklin v. Osca, Inc., 308 Ark. 409, 825 S.W.2d 812 (1992).

Appeal dismissed.


author: Robert L. Brown, Justice. Walter Niblock, Special Justice,

text:
    WAL-MART STORES, INC. v. AMERICAN DRUGS, INC., Tim Benton d/b/a Mayflower Family Pharmacy and Jim Hendrickson d/b/a Baker Drug
    94-235
    891 S.W.2d 30
    Supreme Court of Arkansas
    Opinion delivered January 9, 1995
    [Rehearing denied February 13, 1995.]

      Mayer, Brown & Platt, by; Andrew L. Frey; Friday, Eldredge & Clark, by: William H. Sutton; and Williams & Anderson, by: Peter G. Kumpe and J. Leon Holmes, for appellant.

      Brazil, Clawson, Adlong, Murphy & Osment, by: Matthew W. Adlong, Pamela Osment, and Michael L. Murphy, for appellees.

      Special Justices Walter R. Niblock, A. Watson Beil, and Barbara P. Bonds would grant rehearing; Dudley, Corbin, and Roaf, JJ., not participating.

   Robert L. Brown, Justice.

Appellant Wal-Mart Stores, Inc. appeals from an order of the chancery court enjoining it from engaging in below-cost sales and assessing damages against it for violation of the Arkansas Unfair Practices Act. Wal-Mart argues on appeal: (1) that the chancery court erred as a matter of law in finding that it sold products below cost for the purpose of injuring competitors and destroying competition; (2) that the chancery court erred in considering individual articles to determine cost and profit rather than the entire product lines, or “market basket;” and (3) that the chancery court’s interpretation of the Arkansas Unfair Trade Practices Act violates the Arkansas Constitution and the United States Constitution. We agree with Wal-Mart on the first point raised, and we reverse and dismiss.

This case deals with the Conway Wal-Mart store located in Faulkner County. The appellees in this case, American Drugs, Inc., Tim Benton d/b/a Mayflower Family Pharmacy, and Jim Hendrickson d/b/a Baker Drug, brought suit in circuit court against Wal-Mart for violation of the Arkansas Unfair Practices Act, codified at Ark. Code Ann. § 4-75-201, etseq. (Repl. 1991). Specifically, they contended that Wal-Mart was selling individual items below cost for the purpose of injuring competitors and destroying competition in violation of § 4-75-209(a)(l) of the Act. They sought injunctive relief and damages. The appellee drug stores moved for summary judgment, and Wal-Mart did likewise. The matter was transferred to chancery court, and that court found that a violation of the Act had occurred due to below-cost sales. It then enjoined Wal-Mart from selling articles below cost at the Conway store and further found that the appellees had been damaged in the amount of $42,407 (American Drug), $33,767 (Baker Drug), and $20,295 (Mayflower Family Pharmacy). The chancery court trebled the damages as a penalty.

In its order granting relief to the appellee drug stores, the chancery court made these findings of fact:

• that retail sales of pharmaceuticals and health and beauty aids had expanded during a period of strong commercial growth in Faulkner County and had almost doubled from 1988 to 1990 — from $5,184,000 in 1988 to $9,897,000 in 1990;
• that the number of pharmacies in Faulkner County had also increased from five in 1967 to twelve in 1981 to fourteen in 1992 and that Conway Wal-Mart began selling prescription drugs in 1987;
• that other large outlets for the same products in Faulkner County and additional competitors of the appellee drug stores were Kroger, Flarvest Foods, and Fred’s;
• that the prices for the relevant product lines at issue were slightly higher in the Little Rock Wal-Mart stores and substantially lower in the Clinton and Flippin WalMart stores;
• that Wal-Mart determined the “everyday price” for its products at its headquarters in Bentonville, that store managers could not raise the price for a product above that set price, but that store managers could lower prices after monitoring prices charged by competitors in the market area without regard to the cost to WalMart of individual items;
• that the lowered price “is frequently below Wal-Mart’s cost of acquiring some of these products in highly competitive markets,” and that this had occurred at the Conway Wal-Mart;
• that the store had advertised individual items for sale below Wal-Mart’s acquisition cost;
• that Conway Wal-Mart had displayed a “scorecard” at the front of its store comparing its prices on certain items with local retailers like the appellee drug stores;
• that Wal-Mart’s stated policy in this regard was to “meet or beat” retail prices of competitors, to maintain “low-price” leadership in the local marketplace, and to “attract a disproportionate number of customers into a store to increase traffic;”
• that by generating traffic, Wal-Mart could engender sales of other items which would offset losses from sales of below cost items; and
• that Conway Wal-Mart’s overall product line for pharmaceuticals and health and beauty aids was sold above cost, and its pharmacy was profitable.

The chancery court then stated: “[T]here is no direct evidence that the purpose of Wal-Mart’s pricing policy or Conway Wal-Mart’s implementation of the policy is to injure competitors or to destroy competition. However, such purposes may be inferred from the stated policy, the effects of the stated policy and other circumstantial evidence.” The court found that the appellee drug stores had lost sales to Conway Wal-Mart due to the below-cost policy, and that the growth in sales and profits for those drug stores had substantially decreased.

Though not included in the chancery court’s findings, there was also testimony from the owner of Baker Drug that its gross profits were $324,000 in 1988 and $341,000 in 1992. The owner of Mayflower Family Pharmacy testified that his net profits had been reduced since 1990 when the store realized $120,000 in net profits but that for the first six months of 1993, net profits for the store were about $40,000. According to certified public accountant Stephen Humphries, who testified for Wal-Mart, American Drugs showed an increase in drug sales from 1987 to 1990, then in the 1991-1992 period the sales were “flat,” but in “annualizing” the sales for. 1993, the sales increased again.

The crux of the court’s order follows:

The Court finds that purpose to injure competitors and destroy competition cannot be inferred from below cost advertising and sales alone. There must be other proof of intent or purpose. A person’s purpose or intent, being a state of mind, ordinarily cannot be proven by direct evidence, but may be inferred from other circumstances. Alford v. State, 34 Ark. App. 113, 806 S.W.2d 29 (1991).
The Court finds from the following circumstances that Conway Wal-Mart advertised and sold pharmaceutical and health and beauty products below cost for the purpose of injuring competitors and destroying competition:
1. The number and frequency of below cost sales.
2. The extent of below costs sales.
3. Wal-Mart’s stated pricing policy — “meet or beat the competition without regard to cost.”
4. Wal-Mart’s stated purpose of below cost sales — to attract a disproportionate number of customers to WalMart.
5. The in-store price comparison of products sold by competitors, including Plaintiffs.
6. The disparity in prices between Faulkner County prices of the relevant product-lines and other markets with more and less competition.

The chancery court then granted the injunction against below-cost sales. The chancellor also assessed treble damages as a penalty as described above. See M.L. Sigmon Forest Products, Inc. v. Scroggins, 250 Ark. 385, 465 S.W.2d 673 (1971).

All parties agree that this case turns on the interpretation of § 4-75-209(a)(l) of the Arkansas Unfair Practices Act, which reads in part:

It shall be unlawful for any . . . corporation . . . engaged in business within this state, to sell, offer for sale, or advertise for sale any article or product ... at less than cost thereof to the vendor ... for the purpose of injuring competitors and destroying competition.

As the chancery court correctly pointed out, this statute is penal in nature and must be strictly construed in favor of those upon whom the burden of the penalty is sought to be imposed, in this case Wal-Mart. See Beam Bros. Contractors v. Monsanto Co., Inc., 259 Ark. 253, 532 S.W.2d 175 (1976); Davis v. Fowler, 230 Ark. 39, 320 S.W.2d 938 (1959). The chancery court also was correct in stating that for a violation to occur under § 4-75-209(a)(l), below-cost sales must be made for the purpose of destroying competition. The court found an inference of this purpose predicated on the aforementioned six circumstances.

In analyzing the six factors which led to the chancery court’s inference of specific intent, the first four circumstances relate to below-cost sales. However, § 4-75-209(a)(l) is clear that mere proof of below-cost sales is not sufficient to prove a violation of the Act. The chancery court agreed with this but found an intent to destroy competition based on the extent, frequency, and number of those sales. Despite this finding, the court fails to present details of Wal-Mart’s practice regarding specific articles which led to a violation of § 4-75-209(a)(l). The individual items sold below cost, the frequency of those sales, the duration of those sales, and the extent of such sales are not revealed in the chancery court’s opinion. And that is a critical point in this case.

We do know from the testimony of Michael .Bess, the pharmacist at Conway Wal-Mart, that he did not consider the appellee drug stores to be competitors for prescription drugs and pharmaceuticals. Bess, who was called as a principal witness by the appellee drug stores, testified that the appellees were not the competition but that Fred’s, Kroger, and Aleo were because those were the chain stores. Bess was responsible for 2,500 items in the pharmacy. Of those items, he routinely determined the 100 most popular articles, checked Fred’s and Kroger and Aleo to ascertain their prices on the maintenance drugs, which were the repeat prescriptions, and then tried to beat those prices. Included within the 100 items would generally be 30 to 40 maintenance drags like Dilantin or Tagamet, which were placed on a competition list. When asked how many drugs on the competition list were sold below cost, he answered: “Very few. It depends on the competition price.” He did add that on one day — March 24, 1990 — the items on the competition list represented 29 percent of his business and that on that day there was a loss in total sales of those items. He concluded, however, that this could have been attributable to multiple sales of one or two below-cost items. The chancery court did find that the pharmacy at Conway Wal-Mart was profitable as a whole.

We discern no proof in the record of this case that Wal-Mart specifically intended to destroy competition with regard to any one article like Crest Toothpaste or Bayer Aspirin or Dilantin by selling below cost for a sustained period of time. What is evidenced is that Wal-Mart regularly would sell varying items below cost as loss leaders to entice people into its store and increase traffic. The loss-leader items would change on a regular basis. That strategy of selling below the competitors’ price and even below Wal-Mart’s own cost, which Wal-Mart admits to, is markedly different from a sustained effort to destroy competition in one article by selling below cost over a prolonged period of time. Our statute — § 4-75-209(a)(l) — does not make loss leaders illegal, and for that reason the chancery court erred in inferring a purpose to destroy competition from a loss-leader strategy.

We observe further that if the chancery court’s statutory interpretation was correct, any business using the loss-leader approach to attract customers on a regular basis would be in violation of the Act. That kind of expansive interpretation runs directly counter to our oft-stated policy of strict construction of penal statutes in favor of those upon whom the burden will fall. See Beam Bros. Contractors v. Monsanto Co., Inc., supra. Our statute plainly does not contemplate a prima facie case of predation based on loss-leader sales, and we are not willing to invalidate, and indeed render illegal, the technique of using loss-leader products or services without a clear directive from the General Assembly that that is now the public policy of the State of Arkansas.

The chancery court also referenced two additional circumstances which it determined contributed to an inference of purposeful intent:

1. The in-store price comparison of products sold by competitors, including Plaintiffs.
2. The disparity in prices between Faulkner County prices of the relevant product-lines and other markets with more and less competition.

There is certainly no fault in comparative pricing. On the contrary, that tactic appears to foster, and encourage competition which is one of the purposes of the Arkansas Unfair Practices Act. See Ark. Code Ann. § 4-75-202 (Repl. 1991). Nor is the fact that Wal-Mart stores in other localities varied the prices of their products in response to local competition sufficient to prove that Conway Wal-Mart intended to destroy competition in Faulkner County.

Admittedly, there is a point where competitive pricing ends and predatory pricing begins. The Eighth Circuit Court of Appeals has discussed the difficulty in distinguishing the two in the context of the Sherman Act:

The difficulty, of course, is distinguishing highly competitive pricing from predatory pricing. A firm that cuts its prices or substantially reduces its profit margin is not necessarily engaging in predatory pricing. It may simply be responding to new competition, or to a downturn in market demand. Indeed, there is a real danger in mislabeling such practices as predatory, because consumers generally benefit from the low prices resulting from aggressive price competition. See e.g., Barry Wright Corp. v. ITT Grinnell Corp., 724 F.2d 227, 231 (1st Cir. 1983).

Morgan v. Ponder, 892 F.2d 1355, 1358-1359 (8th Cir. 1989).

There is also a distinct danger in inferring, first, specific predatory intent and, secondly, purposeful destruction of competition from sales below cost. That involves a double inference, as the Eighth Circuit Court of Appeals has recognized. See Henry v. Chloride, 809 F.2d 1334, 1344 (8th Cir. 1987). There is no question that double inferences stretch a circumstantial case to its limits. But the Idaho Supreme Court has also recognized additional problems with too heavy a reliance on inferences to determine specific intent in an antitrust case:

Nevertheless, a finding that a defendant has engaged in a particular predatory or illegal act, such as selling below cost, is not the equivalent of finding specific intent, but is merely a basis from which such intent may be inferred. Isolated or occasional instances of selling below cost, while predatory or illegal in nature, do not necessarily indicate a specific intent to monopolize. To hold otherwise would render the requirement of specific intent a nullity. As one court has stated in the same context, “Too heavy a reliance on circumstantial evidence incurs the risk of reducing almost to the point of extinction the existence of the requirement.” William Inglis & Sons Baking Co. v. I.T.T. Continental Baking Co., 668 F.2d at 1027. The existence of specific intent must, therefore, be determined by weighing all of the circumstances in the particular case, including the nature of the conduct, its consistency and duration, the conditions of the market, and characteristics of the defendant. William Inglis & Sons Baking Co. v. I.T.T. Continental Baking Co., supra.

Pope v. Intermountain Gas Co., 646 P.2d 988, 997 (Idaho 1982).

In the case before us, the loss-leader strategy employed by Conway Wal-Mart is readily justifiable as a tool to foster competition and to gain a competitive edge as opposed to simply being viewed as a stratagem to eliminate rivals altogether. We are further sensitive to the ultimate purpose of the Arkansas Unfair Practices Act — to foster competition and to protect the public against the destruction of competition and the creation and perpetuation of monopolies. Ark. Code Ann. § 4-75-202 (Repl. 1991). Certainly legitimate competition in the market place can, and often does, result in economic injury to competitors. A competitor that has been injured by legitimate competitive pricing, though, should not be permitted to use the Arkansas Act as a fountain for recouping its losses. See Henry v. Chloride, supra, 809 F.2d at 1341 (dictum). In short, the circumstances of this case are not sufficiently egregious to prove that Conway WalMart crossed the line with regard to predatory prices and purposeful destruction of competition.

There are two other points that militate against the chancery court’s construction and application of the Act. The appellee drug stores are far from destroyed. They all continued into 1993 making a profit. Though the Act renders a specific intent to destroy competition as the violation and does not mandate either the actual destruction of competition or even the likelihood of that happening as elements of the unfair practice, it seems only logical that the continued profitability of appellee drug stores and the existence of robust competition in Faulkner County have some bearing on the matter. There is no serious suggestion that the appellees have stopped selling any article as a result of Wal-Mart’s practices or that one or more of the appellees is even considering doing so. There is simply enhanced competition in the area, and the appellees are not making the profits they once did. Other large drug outlets in the vicinity have entered the competitive fray, including Fred’s, Kroger, and Harvest Foods. Faulkner County appears far from a dire situation where no competition exists in pharmaceuticals; indeed, competition there appears to be thriving.

Secondly, we are mindful of the factors during the Depression that were the catalyst for the enactment of Act 253 of 1937, now codified as § 4-75-209(a)(l) of the Arkansas Unfair Practices Act. Those factors are expressed in the Act’s Emergency Clause:

This act is hereby declared to be an emergency measure necessary for the immediate preservation of the public peace, health and safety, within the meaning of section 1 of Article V of the Constitution, and shall therefore go into immediate effect. The facts constituting the necessity are as follows:
, The sale at less than cost of goods obtained at forced, bankrupted, close out, and other sales outside of the ordinary channels of trade is destroying healthy competition and thereby forestalling recovery. If such practices are not immediately stopped many more businesses will be forced into bankruptcy, this (sic) increasing the prevailing condition of depression. In order to prevent such occurrences it is necessary that this act go into effect immediately.

Those forced sales “outside of the ordinary channels of trade” gave rise to the Act — not loss-leader programs using varying articles with the admitted purpose to abet competition and “beat out” competitors. That is far different from a sustained below-cost effort over a substantial period of time directed at either a single article for sale or at multiple articles for sale for the purpose of gaining a monopoly in particular products. While the original intent of the Act does not decide this matter, it is certainly a factor to be considered in the overall mix.

If the policy of this State is to render illegal the loss-leader tactic or to recognize a prima facie case of purposeful intent to destroy competition by below-cost sales in disparate articles that are changed on a regular basis, that policy should be clearly announced by the General Assembly in appropriate legislation. We hold that the Arkansas Unfair Practices Act, and specifically § 4-75-209(a)(l), does not provide a sufficient statutory basis for the chancery court’s inference of a specific intent to destroy competition based on the facts before us. We further hold that the chancery court erred as a matter of law in concluding that purposeful intent to destroy could be inferred under these facts. Because we decide this matter on the first point, there is no need to address the other points raised by this appeal.

Reversed and dismissed.

Dudley and Corbin, JJ., not participating.

Special Justices Walter Niblock, A. Watson Bell, and Barbara P. Bonds, dissent.

Walter Niblock, Special Justice,

dissenting.

INTRODUCTION

I respectfully dissent to the opinion of the majority on all counts. Further, I am authorized to state that Special Justices Bell and Bonds join in this dissent. I would affirm the decision of Judge Reynolds, as it is my belief that the majority did not give due deference to the findings of fact of the trial court, and as a result reached a decision that I cannot subscribe to; therefore, based upon the analysis which follows I would affirm the trial court’s decision.

This case presents an issue of first impression — the interpretation of the Arkansas Unfair Practices Act, codified at Ark. Code Ann. § 4-75-201 et seq. In interpreting a statute and attempting to construe legislative intent, the appellate court looks to the language of the statute, the subject matter, the remedy provided, legislative history, and other appropriate means that throw light on the subject. McCoy v. Walker, 317 Ark. 86, 89, 876 S.W.2d 252, 254 (1994) (quoting Gritts v. State, 315 Ark. 1, 864 S.W.2d 859 (1993)).

The Arkansas Unfair Practices Act (hereinafter Arkansas Act) was enacted in 1937, during the Great Depression, as a companion to the Robinson-Patman amendments to the Clayton Act. This Court has stated that “the purpose of this act is to safeguard the public against the creation or perpetuation of monopolies and to foster and encourage competition, by prohibiting unfair and discriminatory practices by which fair and honest competition is destroyed or prevented. This act shall be literally construed that its beneficial purposes may be subserved.” Beam v. Monsanto Co.. Inc., 259 Ark. 253, 532 S.W.2d 175 (1976).

I. PROCEDURAL HISTORY.

The Appellees, American Drugs, Inc., Tim Benton d/b/a/ Mayflower Family Pharmacy and Jim Hendrickson d/b/a/ Baker Drug, filed a complaint on December 17, 1991, in the Circuit Court of Faulkner County, alleging that the defendant, Wal-Mart Stores, Inc., advertised, offered for sale, and sold merchandise at retail for less than the cost of the merchandise to the retailer, in violation of the Arkansas Act. Appellees requested damages and an injunction against Appellant to cease and desist violating the Arkansas Act. As a result of the remedies requested, this case was transferred to the Chancery Court of Faulkner County.

After a full hearing of the testimony and evaluation of the evidence, Judge David Reynolds entered an order on October 14, 1993, finding Wal-Mart in violation of the Arkansas Act. The trial court specifically found that Wal-Mart had made sales to the public at a price below the cost of the merchandise. Citing a lack of direct evidence, the trial court found the prohibitive intent, intent to injure competitors and destroy competition, from the effects of its stated policy on the plaintiffs, and six enumerated factors.

The six factors were: (1) the number and frequency of below cost sales; (2) the extent of below cost sales; (3) Wal-Mart’s stated pricing policy — “meet or beat the competition without regard to cost;” (4) Wal-Mart’s stated purpose of below cost sales — to attract a disproportionate number of customers to WalMart; (5) the in-store price comparison of products sold by competitors, including Plaintiffs; and (6) the disparity in prices between Faulkner County prices of the relevant product-lines and other markets with more and less competition.

On October 21, 1993, Appellant Wal-Mart requested Judge Reynolds to make additional findings of fact concerning the constitutionality of the Arkansas Act as it is written and as it was applied in this case. Judge Reynolds found that the Arkansas Unfair Practices Act was constitutional on its face and in its application and did not violate either the Arkansas or the United States Constitution.

It is from this decision that the Appellant appeals.

II. STANDARD OF REVIEW.

We review chancery cases de novo and will not reverse a finding of fact unless if is clearly erroneous. Smith v. Paul, 317 Ark. 182, 876 S.W.2d 266 (1994) (quoting Conway Corp. v. Construction Eng’rs, Inc., 300 Ark. 225, 782 S.W.2d 36 (1986)); Leathers v. Active Realty, Inc., 317 Ark. 214, 876 S.W.2d 583 (1994); ARCP 52(a); Roach v. Concord Boat Corp., 317 Ark. 474, 880 S.W.2d 305 (1994); Brasel v. Brasel, 313 Ark. 337, 854 S.W.2d 346 (1993); Milligan v. General Oil Co., 293 Ark. 401, 738 S.W.2d 404 (1987). We affirm if we find the result reached by the chancellor was correct for any reason. Pryor v. Raper, 46 Ark. App. 150, 877 S.W.2d 952 (1994); American Investors Life Insurance Co. v. TCB Transportation, 312 Ark. 343, 345, 849 S.W.2d 509, 511 (1993).

We consider the evidence in the light most favorable to the appellee. Leathers v. W.S. Compton, Co., 316 Ark. 10, 14, 870 S.W.2d 710, 712 (1994); Guaranty Nat’l Ins. v. Denver Roller Inc., 313 Ark. 128, 854 S.W.2d 312 (1993). The burden is upon the appellant to show that the findings are erroneous. Leathers v. W.S. Compton, Co., 316 Ark. at 14, 870 S.W.2d at 712; Burson v. Day, 284 Ark. 515, 683 S.W.2d 917 (1985).

III. ISSUES ON APPEAL.

A. CHANCELLOR’S RULING IS LEGALLY ERRONEOUS; DOES NOT SUPPORT AN INFERENCE OF INTENT TO DESTROY COMPETITION; AN INFERENCE IS CONTRARY TO LEGISLATIVE INTENT.

For its first point of error, Appellant argues that the Chancellor used an improper legal standard to find the inference of intent to destroy competition. The analysis advanced by Appellant requires Appellees to establish two factors: (a) conduct inconsistent with a lawful purpose; and (b) knowing conduct that creates a dangerous probability of achieving a monopoly. Appellant states the Appellees did not establish these two factors, and any inference of unlawful purpose by the Trial Court is, therefore, improper and legally erroneous.

Appellees responded to this argument by stating that the Chancellor not only used the proper standard but evaluated the evidence and reached the only permissible conclusion. The evidence showed that up to thirty percent (30%) of Wal-Mart’s pharmaceutical sales were below cost (R. 1808-1810); that Wal-Mart posted negative profit margins on their most competitive items in over one-half of the period under examination; and that many of the prices were below invoice or replacement cost without consideration of the additional factors mandated by Ark. Code Ann. § 4-75-209(b)(2).

Appellant’s contention is unpersuasive on two points. First, Appellant fails to identify the legal standard used and how the legal standard was improperly applied. Appellant also failed to articulate the alleged “proper legal standard” for this Court to use when interpreting the Arkansas Act. Second, Appellant provides this Court with a potential framework for analysis but provides no authority or source for this framework. If Appellant does not like the statute as it is written, its remedy is in the legislature not the courts. “However this question ... is not a matter to be addressed by the court but is within the province of the legislature.... [T]his is a matter which must be left to the sound discretion of the General Assembly.” State v. Ruiz & Van Denton, 269 Ark. 331, 602 S.W.2d 625, 626 (1980).

Appellant’s second argument concerns the inference of intent to destroy competition and that the enumerated factors identified by the Chancellor could not possibly support an unlawful inference. The burden is upon the appellant to show that the findings are erroneous. Leathers v. W.S. Compton, Co., 316 Ark. at 14, 870 S.W.2d at 712; Burson v. Day, 284 Ark. 515, 683 S.W.2d 917 (1985). Despite their analysis of each factor, Appellants fail to articulate a legal basis to reverse the findings and conclusions of the Chancellor.

Appellant argues that the interpretation of the Arkansas Act given by the Chancellor is inconsistent with legislative intent. They cite the Unfair Cigarette Sales Act, Ark. Code Ann. § 4-75-708(b) (Michie 1991), in which the legislature inserted a provision that below cost sales were “prima facie evidence of intent to injure competitors and destroy or substantially lessen competition.” Because the legislature failed to insert a comparable provision in the Arkansas Act, Appellant argues that non-inclusion of a similar phrase “establishes that the General Assembly did not intend for unlawful intent to be inferred from below-cost sales.”

The proper source of legislative intent is the language of the statute. The legislative intent of the Arkansas Act is expressed in Ark. Code Ann. § 4-75-202:

The General Assembly declares that the purpose of this subchapter is to safeguard the public against the creation or perpetuation of monopolies and to foster and encourage competition by prohibiting unfair and discriminatory practices by which fair and honest competition is destroyed or prevented.

The basic rule of statutory construction, to which all other interpretations must yield, is to give effect to the intent of the General Assembly. Pugh v. St. Paul Fire & Marine Ins. Co., 317 Ark. 304, 877 S.W. 577, 578 (1994) (quoting Roy v. Farmers & Merchants Ins. Co., 307 Ark. 213, 819 S.W.2d 2 (1991)). This Court should give effect to the expressed General Assembly intent, and in doing so, should reject the argument advanced by the Appellant. This Court adopted this language in Beam v. Monsanto Co.. Inc., 259 Ark. 253, 532 S.W.2d 175 (1976), and should continue to construe the Arkansas Act consistent with the intent of the legislature as expressed in the statute.

The Court should decline to engage in speculation and conjecture to unearth a possible legislative intent, and should reject Appellant’s contention that the legislature’s failure to include a statement similar to the one found in the Unfair Cigarette Sales Act necessitates a conclusion that the interpretation of the Arkansas Act is inconsistent with legislative intent. Unlike the Arkansas Act which addresses the creation and maintenance of monopolies and discriminatory practices, the Unfair Cigarette Sales Act was enacted to address unfair and deceptive business practices. See Preamble to Unfair Cigarette Sales Act, Title 4, Chapter 75, Subchapter 7 (Michie 1991).

B. VALUATION OF COST AND PROFIT — MARKET-BASKET OR SINGLE PRODUCT?

Appellant’s next point of error requires this Court to examine the language of the statute and resolve the question of what price benchmark should be used to determine if the Arkansas Act has been violated. Appellant urges this Court to adopt a market basket valuation approach for the cost of goods. Under the market basket approach, a court would be required to consider other factors in addition to the invoice cost of an item allegedly for sale below cost. Appellant’s economist, Dr. Leonard White, testified that the cost of an item under the market basket approach would include the product, the atmosphere of the store, the parking lot, air conditioning, and a whole group of services that surround the purchase of the alleged below cost item.

Appellees urge this Court to adopt a single product cost comparison to determine if sales below cost have occurred. Under the individual item approach, the invoice cost of a product becomes the benchmark to determine if sales below cost have occurred.

The Arkansas Act has not been interpreted on this point. The Chancellor found Wal-Mart guilty of violating § 4-75-209(a)(1), which states:

(a)(1) It shall be unlawful for any person, partnership, firm, corporation, joint-stock company, or other association engaged in business within this state, to sell, offer for sale, or advertise for sale any article or product, or service or output of a service trade, at less than the cost thereof to the vendor, or to give, offer to give, or advertise the intent to give away any article or product, or service or output of a service trade, for the purpose of injuring competitors and destroying competition.

The first rule in considering the meaning of a statute is to construe it just as it reads, giving the words their ordinary and usually accepted meaning in common language. McCoy v. Walker, 317 Ark. 86, 876 S.W.2d 252, 254 (1994) (quoting Mountain Home School Dist. v. TMJ Builders, 313 Ark. 661, 858 S.W.2d 74 (1993)). When a statute is clear, it is given its plain meaning and we do not search for legislative intent. That intent must be gathered from the plain meaning of the language used. Pugh v. St. Paul Fire & Marine Ins. Co., 317 Ark. 304, 877 S.W. 577, 578 (1994) (quoting Hinchey v. Thomasson, 292 Ark. 1, 727 S.W.2d 836 (1987)).

A literal reading of Ark. Code Ann. § 4-75-209 supports the Trial Court’s use of a “single product” cost comparison to determine if Appellant has engaged in below cost sales in violation of the Arkansas Act. The language of § 4-75-209 refers to “any article or product” and does not include consideration of the atmosphere of the store, the parking lot, air conditioning, and a whole group of services that surround the purchase of an item. We should reject Appellant’s market basket approach for establishing the price benchmarks.

C. THE ARKANSAS ACT VIOLATES THE ARKANSAS CONSTITUTION.

Appellant argues that the Trial Court’s construction of the Arkansas Act bears no rational relation to legislative purpose and violates the Arkansas Constitution, Article 2, Section 2, which states:

All men are created equally free and independent, and have certain inherent and inalienable rights, amongst which are those of enjoying and defending life and liberty; of acquiring, possessing and protecting property and reputation, and of pursuing their own happiness. To secure these rights governments are instituted among men, deriving their just powers from the consent of the governed.

Appellant cites Union Carbide & Carbon Corp. v. White River Distrib., Inc., 224 Ark. 558, 275 S.W.2d 455 (1955) in which this Court ruled that the Arkansas Fair Trade Act was unconstitutional, as it established minimum prices. This Court said that “the right to sell is a valuable property [that] cannot be denied.” Id. at 561. Appellant also cites Noble v. Davis, 204 Ark. 156, 161 S.W.2d 189 (1942), in which a statute establishing minimum prices, commissions and hours of operations for barbers failed a constitutional challenge. Appellant states that this Court found that “statute had no rational relation to the public safety, health or welfare.” Id. at 152-63. The same result should attain here. Appellant states “[t]hat these cases establish that the Arkansas Constitution recognizes that each person has a right to sell his property and services at the price at which he chooses. That right should not be abridged except upon a compelling showing of public harm.”

We review challenges to the constitutionality of statutes under the principle that statutes are presumed to be constitutional. First National Bank v. Ark. State Bank Comm’n, 301 Ark. 1, 784 S.W.2d 744 (1989). The burden of proving a statute unconstitutional is upon the party challenging it. Urrey Ceramic Tile Co. v. Mosley, 304 Ark. 711, 805 S.W.2d 541 (1991). On appeal, if it is possible to construe a statute as to meet the test of constitutionality, we will do so. Id.; Clinton v. Bonds, 306 Ark. 554, 556, 816 S.W.2d 169. In searching for any rational basis, we ask whether the created classification has a conceivable reasonable relationship to the governmental action. Medlock v. Leathers, 311 Ark. 175, 842 S.W.2d 428, 431 (1992) (quoting Madden v. Kentucky, 309 U.S. 83, 60 S.Ct. 406, 84 L.Ed. 590 (1940)). Our task is merely to consider if any rational basis exists which demonstrates the possibility of a deliberate nexus with state objectives so that the legislation is not the product of utterly arbitrary and capricious government and void of any hint of deliberate and lawful purpose. Medlock v. Leathers, 311 Ark. 175, 842 S.W.2d 428, 431 (1992) (quoting Streight v. Ragland, 280 Ark. 206, 214-15, 655 S.W.2d 459, 464 (1983)); Arkansas Hosp. Ass’n v. Bd. of Pharmacy, 297 Ark. 454, 763 S.W.2d 73, 74 (1989).

The Arkansas Act addresses the creation of and perpetuation of monopolies. Appellees established at trial that Appellant sold goods below invoice cost and presented circumstantial evidence from which the Chancellor made a permissible inference of intent to destroy competition and harm competitors. Once a plaintiff has established that one of the enumerated conditions existed in a given market, this Court and any court under its jurisdiction must follow the dictates of the statute. Appellant merely alleges that the Arkansas Act as applied in this case is unconstitutional. It would require intellectual somersaults to declare that the Arkansas Act does not have any rational basis for its enactment by the Legislature. The task of the court “is merely to consider if any rational basis exists which demonstrates the possibility of a deliberate nexus with state objectives so that the legislation is not the product of utterly arbitrary and capricious government and void of any hint of deliberate and lawful purposes.” Medlock v. Leathers, 311 Ark. 175, 842 S.W.2d 428, 431 (1992). The court should find that the Appellant failed to establish that there was no rational basis for the Arkansas Act as applied in this case.

D. THE ARKANSAS ACT IS PREEMPTED BY FEDERAL LAW.

Appellant argues the Arkansas Act is preempted by the Robinson-Patman Amendments to the Clayton Act, which specifically addresses the weapon of predatory pricing by monopolies. United States v. National Dairy Products Corp., 372 U.S. 29, 83 S.Ct. 594, 9 L.Ed.2d 561, reh. den., 372 U.S. 961, 83 S.Ct. 1011, 10 L.Ed.2d 13. The doctrine of federal preemption is based upon the supremacy clause in Article VI, Clause 2, of the United States Constitution. CIBA-Geigy Corp. v. Alter, 309 Ark. 426, 834 S.W.2d 136 (1992). State laws that “interfere with, or are contrary to the laws of congress, made in pursuance of the constitution” are invalid. Gibbons v. Ogden 22 U.S. (9 Wheat.) 1, 211, 6 L.Ed. 23 (1824).

The preemption test of Gibbons v. Ogden was expanded in Capital Cities Cable, Inc. v. Crisp, 467 U.S. 691, 104 S.Ct. 2694, 81 L.Ed.2d 580 (1984), where the Court based preemption on four factors: whether' Congress expressed a clear intent to preempt state law; whether Congress occupies the field so as to leave no room for the states to supplement; whether compliance with both the state and federal laws is impossible; and whether the state law stands as an obstacle to Congress’ objective or purpose. Id.

This Court adopted the U.S. Supreme Court’s test of preemption in Medlock v. Leathers, 311 Ark. 175, 842 S.W.2d 428, 433 (1992). In deciding whether a state law would be preempted, [the Court] asked whether the state law stood as an obstacle to the accomplishment of Congress’s objectives or purposes. Medlock v. Leathers, 311 Ark. 175, 842 S.W.2d 428, 433 (1992). The burden is on the moving party to prove that Congress intended to preempt state law. CIBA-Geigy Corp. v. Alter, 309 Ark. 426, 834 S.W.2d 136, 142 (1992) (quoting Silkwood v. Kerr-McGee Corp., 464 U.S. 238, 104 S.Ct. 615, 78 L.Ed.2d 443 (1984)).

“The fact that the Arkansas statute is broader in scope than the Robinson-Patman Act does not invalidate the state statute, for in applying the rational basis test, the judiciary will not act as a superlegislature to question the means employed to accomplish the state objective.” Arkansas Hosp. Ass’n v. Bd of Pharmacy, 297 Ark. 454, 763 S.W.2d 73, 75 (1989) (quoting Massachusetts Board of Retirement v. Murgia, 427 U.S. 307, 316-17, 96 S.Ct. 2562, 2568-69, 49 L.Ed.2d 520 (1976)). “As long as the classificatory scheme ... rationally advances a reasonable and identifiable governmental objective, we [the judiciary] must disregard the existence of other methods of [achieving the legislative goal] that we, as individuals, perhaps would have preferred.” Arkansas Hosp. Ass’n v. Bd. of Pharmacy, 297 Ark. 454, 763 S.W.2d 73, 75 (1989) (quoting Schweiker v. Wilson, 450 U.S. 221, 235, 101 S.Ct. 1074, 1083, 67 L.Ed. 2d 186 (1981)). We find Appellant has not established that the Arkansas Act is contrary to or in opposition to any federal statute. Further, Appellant has not demonstrated that “Congress expressed a clear intent to preempt state law; Congress occupies the field so as to leave no room for the states to supplement; [that] compliance with both the state and federal laws is impossible; and [that] the state law stands as an obstacle to Congress’ objective or purpose.” Capital Cities Cable, Inc. v. Crisp, 467 U.S. 691, 104 S.Ct. 2694, 81 L.Ed.2d 580 (1984).

IV. CONCLUSION.

We would hold that the Appellant has failed to prove that the Chancellor used an improper legal standard with respect to the inference of intent to injure competitors and to destroy or substantially lessen competition. We also find that the Chancellor could have found an intent to injure competitors from the evidence in the record and particularly from the testimony of David Glass, president of Wal-Mart Stores, Inc., who used language such as “aggressive,” “do whatever it takes,” “kill the competition’s momentum,” and “war zones.” Appellant failed to establish that the Arkansas Act violates rights guaranteed by the Arkansas Constitution, Article 2, Section 2. Appellant also failed to establish that the Arkansas Act was preempted by federal law.

For the foregoing reasons, I would affirm the trial judge’s decision.

Special Justices A. Watson Bell and Barbara P. Bonds join.

       This appellee is also referred to in the record as Mayflower Family Drug Center.