author: Tom Glaze, Justice.

text:
    Cloris Jean ESPINOSA v. STATE of Arkansas
    CR 93-1060
    876 S.W.2d 569
    Supreme Court of Arkansas
    Opinion delivered May 31, 1994

      Austin & Osborne, by: Brenda Horn Austin, for appellant.

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

Cloris Jean Espinosa was charged and convicted of five counts of delivery of a controlled substance, and received consecutive sentences of ten years on each count. Espinosa’s two points for appeal in this case stem from a prior mistrial she previously obtained on these same charges.

At Espinosa’s first trial, the state offered four witnesses. In sum, the state offered testimony that, with the employment of a confidential informant, and an undercover police officer, five drug buys had been made involving Ms. Espinosa. Espinosa’s defense at trial was based upon her contention that the state had no independent corroborative evidence to prove that any of the alleged drug buys occurred. In fact, Espinosa’s counsel stated in opening argument that the state had no fingerprints, drugs, recordings or “marked money” to prove its charges. In making his argument, counsel had relied in part on the fact that the state had provided no such evidence in response to Espinosa’s pretrial discovery. The state’s first witness, Lieutenant Mike Jones, testified to having participated with other officers and an informant in surveilling Espinosa; he said that no body mike, video surveillance or fingerprints were used or obtained in their investigation of Espinosa. Jones was then asked on cross-examination, “But you don’t have anything solid out of those investigations other than drugs and testimony of undercover agents, right?” And Jones responded as follows:

“That’s not correct. I have a one hundred dollar bill that was used in one of the drug purchases that was recovered from a business where drugs had been purchased from Ms. Espinosa.
Defense counsel: It’s not reflected in any of your reports is it?
Lt. Jones: Yes, sir.
Defense counsel: I never saw it.”

Another officer, Detective Frankie Hart, also testified that a “marked” one hundred dollar bill had been found in a safe in the business where drug purchases had occurred, and using a police report to refresh his memory, he further recalled that marked bill had been used in the officers’ investigation of Espinosa, and had been provided to undercover officer Jim Wilkins.

Following Flart’s testimony, Espinosa moved for a mistrial. At a hearing in chambers, the trial judge and respective counsel discussed thoroughly the failure of the state to furnish prior to trial the marked bill and police report testified to by Officers Jones and Hart. Espinosa’s counsel ultimately convinced the judge that Espinosa had been prejudiced by the officers’ testimonies, since counsel had in opening statement told the jury no marked bills would be introduced by the state.

Although the trial judge granted Espinosa a mistrial and rescheduled another which resulted in her convictions and this appeal, she claims the state was barred from prosecuting her again. Espinosa cites the case of Oregon v. Kennedy, 456 U.S. 667 (1981) for the proposition that a defendant’s retrial is barred under the Double Jeopardy Clause where governmental trial conduct was intended to provoke the defendant into moving for a mistrial. In sum, Espinosa argues that, in her original trial, the state intentionally withheld pretrial discovery information, revealed it for the first time at trial and provoked her into moving for a mistrial. We cannot agree.

First, we point out that the trial judge, who presided at the first trial, conducted a searching inquiry into why the state had failed to provide Espinosa the marked money and police report. The prosecuting attorney responded that the information had been in a police file and had not been given to him until the day of trial and after Officer Jones testified. The judge pointed out that the prosecutor had not offered the disputed evidence, but instead, it was first revealed when the defense cross-examined Jones. The judge announced that he was convinced the state was surprised that the evidence existed, and considering the nature of it, believed the state would have used the evidence in its casein-chief, if the state had known the evidence was available.

Later, in ruling on Espinosa’s motion to bar a retrial, the trial court announced that it had read the record of the first trial, the judge’s findings at that trial and reaffirmed that the state had not intentionally withheld the disputed evidence. It further found that all trial strategy concerns of defense counsel at the first trial

had been satisfied by the granting of the mistrial. In the Kennedy decision relied on by Espinosa, the Supreme Court held that only where the governmental conduct in question is intended to “goad” the defendant into moving for a mistrial may a defendant raise the bar of double jeopardy to a second trial after having succeeded in aborting the first on his own motion. Id. at p. 676. Espinosa fails to show the trial judges erred in finding and deciding the state did not intentionally or in bad faith violate the discovery rules or intend to goad her into requesting a mistrial.

For her second point for reversal, Espinosa contends her right under the Confrontation Clause was violated when the testimony given by an Officer Jim Wilkins at the first trial was allowed to be introduced and read at the second trial. Wilkins died after the mistrial and before Espinosa’s second trial. Espinosa claims she was not afforded the opportunity and similar motive to develop Wilkins’ testimony by direct, cross, or redirect examination as permitted under Ark. R. Evid. 804(b)(1) which provides as follows:

(b) Hearsay Exceptions. The following are not excluded by the hearsay rule if the declarant is unavailable as a witness:
(1) Former testimony. Testimony given as a witness at another hearing of the same or a different proceeding, or in a deposition taken in compliance with law in the course of the same or another proceeding, if the party against whom the testimony is now offered, or in a civil action or proceeding a predecessor in interest, had an opportunity and similar motive to develop the testimony by direct, cross, or redirect examination.

Ms. Espinosa contends that because of the mistrial, she did not have the opportunity to develop Wilkins’ testimony after Espinosa learned of the state’s so-called new evidence revealed by Jones and Hart. Ms. Espinosa reiterates that, at the first trial, the marked one hundred dollar bill was first mentioned during the cross-examination of Lieutenant Jones and then by Hart on direct examination. Hart had testified that Wilkins had been provided the marked bill to purchase drugs from Espinosa. She submits that she declined to question these witnesses further because (1) her trial counsel assumed that Jones was “wrong” when stating “marked money” had been recovered and (2) her counsel was reluctant to ask questions concerning “an area that [he] was not provided any information on.”

Ms. Espinosa now argues that, at the second trial, she had derived a new or other motive to develop alternative explanations as to how the marked money got into the safe where the officers had found it. After Officer Jones mentioned the marked money, Espinosa had sufficient reason and motive to cross-examine Wilkins, who also testified about the marked money and police reports before a mistrial was declared. In this connection, we recount that the trial court, after Officers Jones, Wilkins and Hart testified and before a mistrial was declared, called a recess for the express purpose of allowing Espinosa to question any relevant witness about the report and the marked money. In fact, Espinosa’s trial counsel conceded that, during the called recess, he was given an opportunity to question Wilkins about everything.

In addition, Ms. Espinosa can show no prejudice flowing from her inability to cross-examine Officer Wilkins at her second trial. First of all, Officer Lance King, who was the officer who prepared the disputed police report, was also available for cross-examination during the second trial. Officers King, Jones and Hart were available to answer any questions regarding the making of the report or the circumstances under which the money was found. It is fundamental that we do not reverse for trial error absent a demonstration of prejudice. Sheridan v. State, 313 Ark. 23, 852 S.W.2d 772 (1993).


source: Caselaw Access Project

author: Donald L. Corbin, Justice.

license: Public Domain

text:
    Terrance Cantrell BULLOCK v. STATE of Arkansas
    CR 93-1147
    876 S.W.2d 579
    Supreme Court of Arkansas
    Opinion delivered May 31, 1994

      John Wesley Hall, Jr., for appellant.

      Winston Bryant, Att’y Gen., by: Kent G. Holt, Asst. Att’y Gen., for appellee.
   Donald L. Corbin, Justice.

Appellant, Terrance Cantrell Bullock, appeals a judgment of the Pulaski Circuit Court convicting him of aggravated robbery and theft of property and sentencing him as a habitual offender to thirty-two years and ten years respectively in the Arkansas Department of Correction. His sole argument for reversal is that the trial court erred in denying his motion for mistrial made during the state’s closing argument. He claims the prosecutor made remarks that violated his Fifth Amendment rights by making references to his failure to produce evidence and his failure to testify. This claim is without merit, and we affirm.

At trial, appellant took the stand and, in addition to claiming mistaken identity, offered an alibi as his defense to the two crimes charged. Regarding the alibi, appellant testified that he was at Dot Boe’s house helping her move at the time the crimes occurred. Appellant testified that he remembered helping Ms. Boe move on the day in question, that she got a check around 12:30 or 1:00 o’clock that day, and that she paid him, presumably for helping her move. On cross-examination, appellant stated that he did not have a copy of the check because it was not his check.

During closing argument, the prosecutor stated: “Mr. Bullock tells you that he was over at Dot Boe’s house moving. He said he got a check. They don’t have that check here today.” Appellant immediately asked for a bench conference, where he moved for a mistrial based on the fact that the prosecutor referred to evidence the defense was not required to prove. The trial court instructed the prosecutor not to refer to anything that had not been put into evidence and then reminded the jury of the instruction given previously concerning closing arguments of counsel not being evidence. That reminder was given to the jury on the court’s own motion. Appellant did not object to the reminder, nor did he request that any other admonition be given.

A mistrial is an extreme remedy that should only be granted when justice cannot be served by continuing the trial. Cook v. State, 316 Ark. 384, 872 S.W.2d 72 (1994). We repeated the same principle in Williams v. State, 316 Ark. 694, 874 S.W.2d 369 (1994), when we said that a mistrial will only be granted where any possible prejudice cannot be removed by admonishing the jury or some other curative relief. See Cook, 316 Ark. 384, 872 S.W.2d 72. A trial court has broad discretion in deciding whether to grant or deny a mistrial, and we do not reverse the trial court’s decision in this regard absent abuse of that discretion or manifest prejudice to the complaining party. Id. The trial court also has broad discretion to control closing argument and, having observed the argument firsthand, is in a better position than this court to determine the possibility of prejudice. Cook, 316 Ark. 384, 872 S.W.2d 72.

The trial court did not abuse its discretion in denying appellant’s request for a mistrial. The prosecutor’s remarks were not a comment on appellant’s failure to testify or to produce evidence, but an attempt to reiterate the attack on the credibility of appellant’s testimony. See Cook, 316 Ark. 384, 872 S.W.2d 72. Such a review of the evidence is not prohibited given that appellant took the stand and offered the alibi testimony. Appellant cannot testify on his own behalf and then expect the Fifth Amendment to prohibit the state from questioning the credibility of his testimony or from calling the lack of credibility to the jury’s attention during closing argument.

At most, the prosecutor’s comments were a mischaracterization of the evidence. No objection was made on that basis, nor was any request for an admonition made. The trial court, however, sua sponte, instructed the jury that the prosecutor’s comments were not to be considered evidence. Such an admonition was appropriate in this particular case and removed any possible prejudice. Moreover, immediately after the trial court’s admonition, the prosecutor told the jury that appellant was not required to prove his innocence and that it was their job to assess his credibility. The trial court did not err in this case.

The judgment of conviction is affirmed.


text:
    Robert CORTESE v. ATLANTIC RICHFIELD, et al.
    93-981
    876 S.W.2d 581
    Supreme Court of Arkansas
    Opinion delivered May 31, 1994

      Hicks Law Firm, and Edward O. Moody, P.A., for appellant.

      Wright, Lindsey & Jennings, by: N.M. Norton, Jr., Edwin L. Lowther, Jr. and Charles L. Schlumberger, for appellee AT&T, Okonite and Square D.

      Meeks & Carter, P.A., by: William Russell Meeks, III, for appellee Westinghouse Electric.

      Bridges, Young, Matthews & Drake, by: Michael J. Dennis and Stephen A. Matthews, for appellee Atlantic Richfield, Anaconda C. and Graybar Electric.

      Compton, Prewett, Thomas & Hickey, P.A., by: Floyd M. Thomas, Jr., for appellee Phelps Dodge Corp.

      McGlinchey, Stafford, Lang, by: Carolyn B. Witherspoon, for appellee Keathley-Patterson.

      Mitchell, Williams, Selig, Gates & Woodyard, by: Marcella J. Taylor, for appellee USX Corporation.

      Friday, Eldredge & Clark, by: Frederick S. Ursery, for appellee Carol Wire & Cable.

      Barber, McCaskill, Amsler, Jones & Hale, P.A., by: Tim A. Cheatham, for appellee American Insulated Wire.
   Donald L. Corbin, Justice.

Appellant, Robert Córtese, appeals an order of the Saline Circuit Court granting summary judgment in this asbestos products liability case. The summary judgment was granted on the basis that the three-year statute of limitations had expired when appellant filed his complaint. The order appealed to this court granted summary judgment to less than all the defendants without making an express determination there was no just reason for delay and directing the entry of a final judgment. Consequently, the order is not a final order according to ARCP Rule 54(b) and we must dismiss the appeal. Compliance with Rule 54(b) is a jurisdictional requirement this court is obliged to raise on its own even though the parties do not. Parks v. Hillhaven Nursing Home, 309 Ark. 106, 827 S.W.2d 148 (1992).

Appellant filed suit against approximately thirty-four defendants, all of whom appear to be electrical companies or wire and cable companies. Some of the defendant companies appear to be affiliated with other defendant companies. The order appealed to this court granted summary judgment to some fourteen of these defendants. Neither the abstract, the transcript, nor the supplements thereto reflect that the trial court took any action with respect to the remaining twenty defendants. Thus, we are unable to determine that appellant’s claims against the remaining twenty defendants have been finally determined or disposed of, and the order is therefore not a final judgment in compliance with Rule 54(b). See Reynolds v. Watts, 315 Ark. 226, 864 S.W.2d 870 (1993).

ARCP Rule 54(b) provides that a trial court may direct a final judgment as to fewer than all the parties or claims, “only upon .an express determination, supported by specific factual findings, that there is not just reason for delay.” Barnhart v. City of Fayetteville, 316 Ark. 742, 875 S.W.2d 79 (1994); Franklin v. Osca, 308 Ark. 409, 825 S.W.2d 812 (1992); Austin v. First Nat’l Bank, 305 Ark. 456, 808 S.W.2d 773 (1991). There has been no such determination in this case.

The fundamental policy of Rule 54(b) is to avoid piecemeal appeals. Franklin, 308 Ark. 409, 825 S.W.2d 812. Absent the requisite facts, findings, and certification by the trial court, we will not engage in a review of appellant’s claims against the appellees participating in this appeal when additional review of appellant’s claims against the remaining twenty defendants could possibly be required in the future.

We cannot, despite arguments to the contrary, simply rely on an attorney’s or attorneys’ recollections of what occurred in the proceedings below. Even when all counsel participating in an appeal agree as to what occurred below, that does nothing to resolve the claims against the unrepresented parties. Those parties are not privy to the agreement of the participating counsel. Thus, it is appellant’s burden to produce a record on appeal showing the jurisdictional requirements of ARCP Rule 54(b) have been met. No such record or supplemental record exists in this case and we must dismiss the appeal without prejudice.


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

text:
    Walker HAGAR, Jr. v. CITY OF FORT SMITH
    CR 93-1266
    877 S.W.2d 908
    Supreme Court of Arkansas
    Opinion delivered May 31, 1994

      Robert S. Blatt and Timothy C. Sharum, for appellant.

      Winston Bryant, Att’y Gen., by: Clint Miller, Senior Asst. Att’y Gen., for appellee.
   Donald L. Corbin, Justice.

Appellant, Walker Hagar, Jr., appeals a judgment of the Sebastian Circuit Court convicting him of Driving While Intoxicated, Second Offense. The judgment sentenced appellant to pay a $750.00 fine, costs of $321.25, and to serve a sentence of fourteen days in the city jail. The judgment also ordered that appellant’s driver’s license be suspended for one year and that appellant attend an approved alcohol education or treatment program before his license could be reinstated. The court of appeals granted appellee’s motion to certify this case to us because it requires interpretation of Ark. Code Ann. § 5-65-111(b) (Repl. 1993). Ark. Sup. Ct. R. l-2(a)(3), (d). We hold the judgment of conviction for DWI, Second Offense is barred by former jeopardy principles.

Appellant was first tried in Fort Smith Municipal Court and found guilty of DWI, First Offense. He appealed the DWI, First Offense conviction to Sebastian Circuit Court. Prior to trial in circuit court, appellant filed a motion requesting the court to order that nothing other than DWI, First Offense be tried. At a pre-trial hearing on the motion, the parties stipulated to the following facts: appellant was issued a citation for DWI, Second Offense; appellant was tried for the DWI, Second Offense in Fort Smith Municipal Court and found guilty of DWI, First Offense; during the trial in municipal court for DWI, Second Offense, there was no evidence presented of a prior conviction for DWI. Based on these stipulated facts, the trial court denied appellant’s motion, ruling that the appeal in circuit court would be a trial de novo and would therefore not violate appellant’s double jeopardy rights. We find error in this ruling.

The Sebastian Circuit Court jury found appellant guilty of DWI, Second Offense in a bifurcated trial. During the sentencing phase and over appellant’s objection, the prosecution admitted evidence that appellant had previously been convicted of DWI. Consequently, the jury recommended a sentence consistent with DWI, Second Offense. See Ark. Code Ann. § 5-65-111(b)(1) (Repl. 1993). Appellant appeals to this court arguing he has twice been placed in jeopardy on the charge of DWI, Second Offense contrary to the Fifth Amendment to the United States Constitution and to Article 2, Section 8 of the Arkansas Constitution. Specifically, appellant contends the finding of guilt of DWI, First Offense in municipal court operates as an implied acquittal on the charge of DWI, Second Offense, and therefore the trial in circuit court on the DWI, Second Offense charge was barred by former jeopardy principles.

Appellee concedes that if DWI, First Offense is a lesser included offense of DWI, Second Offense, then the implied acquittal of DWI, Second Offense in municipal court and former jeopardy considerations bar the circuit court proceedings on the DWI, Second Offense. However, appellee contends that DWI, Second Offense and DWI, First Offense do not have the relationship of greater offense and lesser included offense and asks us to overrule Peters v. State, 286 Ark. 421, 692 S.W.2d 243 (1985), which holds to the contrary. Appellee contends that the distinction between the two offenses is only one of punishment, providing for enhanced sentencing. As jeopardy considerations do not apply to non-capital punishment proceedings, the appellee contends appellant’s judgment of guilt for DWI, Second Offense in circuit court did not violate appellant’s jeopardy rights.

A determination of guilt in an inferior court on a lesser included offense operates as an implied acquittal of the greater offense barring any further proceedings on the greater offense that place the defendant’s life or liberty in jeopardy, including an appeal to circuit court for a de novo review. Strickbine v. State, 201 Ark. 1031, 148 S.W.2d 180 (1941). This principle holds true even though a defendant appeals the lesser-included offense to circuit court for a de novo review because the freedom from double jeopardy must be protected while a defendant exercises his right to appeal the conviction of the lesser included offense. See Green v. United States, 355 U.S. 184 (1957). It is also true that except for trial-like capital sentencing procedures, former jeopardy principles do not apply to criminal sentencing proceedings. See Caspari v. Bohlen,_U.S._., 114 S. Ct. 948 (1994); see also United States v. DiFranceso, 449 U.S. 117 (1980). Thus, the sole issue we must determine in this appeal is whether DWI, First Offense is a lesser included offense of DWI, Second Offense. This court has previously answered this question in the affirmative when it said that the existence of three prior convictions constitutes an element of DWI, Fourth Offense. Peters, 286 Ark. 421, 692 S.W.2d 243.

We affirm the holding in Peters and apply it to the instant case. The prosecution must prove a prior conviction for DWI as an element of the offense of DWI, Second Offense. The prior DWI conviction must be given the status of an element of a subsequent DWI offense because eventually, upon the fourth DWI conviction, the crime charged will change from a misdemeanor to a felony. As stated in Peters, the proof of the prior DWI conviction or convictions must come in the punishment phase of a bifurcated trial to protect a defendant from possible prejudice during the guilt phase. Bifurcated proceedings also ensure the protection of a defendant’s right to counsel in the prior convictions.

Appellant’s liberty was twice placed in jeopardy on the charge of DWI, Second Offense. Therefore, we must reverse and dismiss the judgment of conviction for DWI, Second Offense. This will not preclude the circuit court from reviewing the DWI, First Offense of which the appellant was convicted in municipal court.

Hays, J., dissents.

Steele Hays, Justice,

dissenting. I believe the state is correct in the contention that we erred in Peters v. State, 286 Ark. 421, 692 S.W.2d 243 (1985), in declaring that in DWI cases, prior convictions are necessary elements of subsequent convictions under Ark. Code Ann. § 5-65-111 (Repl. 1993). Certainly nothing in the wording of the statute suggests that treatment of the offenses, nor did we offer any explanation for that assertion in Peters, we simply declared it.

Other courts have dealt more sensibly with the treatment of prior convictions for purposes of increased punishment: See People v. Mellor, 5 N.W.2d 455 (S.C. Mich. 1942) (“the prior [DWI] offense is not an element of the instant offense. It merely applies to punishment after convictions.”); Ohio v. Cichy, 480 N.E.2d 90 (C.A. Ohio 1984)(“The prior [DWI] conviction, therefore, is not a necessary element of the offense with which appellant was charged.”); People v. Eason, 458 N.W.2d 17 (S.C. Mich. 1990); Beard v. State, 140 A.2d 672 (C.A. Md. 1958):

Cases in other jurisdictions agree with [Maguire v. State, 47 Md. 485] in holding that the prior offense is not an element of the current offense. See Barr v. State. 205 Ind. 481, 187 N.E. 259; Wright v. People, 116 Colo. 306, 181 P.2d 447; Elliott v. Commonwealth, 290 Ky. 502, 162 S.W.2d 633; People v. Mellor, 302 Mich. 537, 5 N.W.2d 455; State v. Domanski, 9 Wash.2d 519, 115 P.2d 729; McCarren v. United States, 7 Cir., 1925, 8 F.2d 113.

I would affirm.


text:
    Timothy J. LEATHERS, Commissioner of Revenue, Arkansas Department of Finance and Administration v. ACTIVE REALTY, INC.
    93-1359
    876 S.W.2d 583
    Supreme Court of Arkansas
    Opinion delivered May 31, 1994

      Mark Alan Mayfield, for appellant.

      Bryan J. Reiss and Charles R. Zierke, for appellee.
   Donald L. Corbin, Justice.

Appellant, the Arkansas Department of Finance and Administration, appeals a Garland Chancery Court decision which found appellee, Active Realty, Inc., exempt from the Arkansas gross receipts tax as imposed by Ark. Code Ann. § 26-52-301(3)(B) (Supp. 1993). That portion of the statute provides:

There is levied an excise tax of three percent (3%) upon the gross proceeds or gross receipts derived from all sales to any person of the following:
Service of furnishing rooms by hotels, apartment hotels, lodging houses, and tourist camps or courts to transient guests; the term “transient guests” being defined for the purpose hereof as those who rent accommodations other than their regular place of abode on less than a month-to-month basis[.]

We have jurisdiction of this appeal as it requires the interpretation of this statute. Ark. Sup. Ct. R. l-2(a)(3).

Appellee is in the business of managing rental properties and selling residential properties in Hot Springs Village, Arkansas. Appellee does not own the residential houses and townhouses it rents, though it receives a fee for handling the rentals for the owners of the dwellings. Appellee provides linens and cleaning service once per week. Renters are given a map and key to locate the unit in which they stay. In 1983, appellee was informed via an opinion letter from appellant that its rentals to transient guests for weekly or nightly stays were not taxable under the tourism gross receipts tax statute, Ark. Code Ann. § 26-52-1002 (Repl. 1992), since it was not an entity included in the statutory language. That statute states in pertinent part:

In addition to all other taxes, there is levied an excise tax of two percent (2%) on the gross proceeds or gross receipts derived from the sale or rental of the following:
(l)(A)(i) The service of furnishing condominiums to transient guests.
(ii) The service of furnishing guest rooms by hotels, motels, lodging houses, and tourist camps or courts to transient guests.
(B) The term “transient guests” being defined for the purpose of this subdivision as those who rent accommodations, other than their regular place of abode, on less than a month-to-month basis[.]

This tourism gross receipts tax includes the same entities and uses nearly the same wording as the more recent gross receipts tax to which appellee was informed to be subject, except that the tourism gross receipts tax is also placed on the service of providing condominium rentals. Appellee rents no condominiums.

Subsequently in 1990, appellant notified appellee that it would be responsible for collecting gross receipts tax as set forth in section 26-52-301(3)(B). Appellee paid these taxes under protest and appealed under the Arkansas Tax Procedure Act. The administrative ruling required appellee to pay the taxes. Appellee then appealed to the Garland Chancery Court which held in its favor, and appellant appealed to this court. We review chancery decisions de novo, but we will not reverse the findings of fact unless clearly erroneous. Leathers v. A&B Dirt Movers, Inc., 311 Ark. 320, 844 S.W.2d 314 (1992).

We first note the cardinal rule in construing tax legislation: a tax cannot be imposed except by express words indicating that purpose, and where there is ambiguity or doubt it must be resolved in favor of the taxpayer. Pledger v. The Grapevine, Inc., 302 Ark. 18, 786 S.W.2d 825 (1990). The agency claiming a right to tax has the burden of proving that the tax law applies to the item sought to be taxed. A&B Dirt Movers, 311 Ark. 320, 844 S.W.2d 314. Another rule of tax law construction is that express designation of one thing may properly be understood to exclude another. Id.

In the instant case, the chancellor noted that the “service” taxed is subject to taxation only with respect to services rendered by certain entities listed in the statute. These entities are outlined in the statute, and rental houses and townhouses fall outside those enumerated. We cannot say this finding is clearly erroneous. Appellant argues for a more expansive definition of the terms “hotels, apartment hotels, lodging houses, and tourist camps or courts” to include appellee, focusing on the function that the entities provide. We find appellant’s arguments unpersuasive for the reason that there would be no reasonable purpose behind listing entities to which this tax applies unless it is limited to those enumerated.

In further support of our holding, neither the gross receipts tax statute nor the tourism tax statute has been amended to include the type of business such as appellee’s. Had the legislature intended to impose a tax on entities such as appellee, it could have easily done so during the legislative sessions since either statute’s inception. Grapevine, 302 Ark. 18, 786 S.W.2d 825. It has not, and this necessarily means that entities not described in the statute are not included in the services taxable under section 26-52-301(3)(B). We must emphasize that our holding is limited to this specific determination of the chancellor with regard to appellee, Active Realty, Inc., in appellee’s business of renting and managing privately owned houses and townhouses for individual owners.

Appellant lastly argues that the chancellor unfairly relied on the 1983 opinion letter which stated appellee was not subject to the tax in order to find ambiguity in the statute. However, both parties agree that the statutory language, as opposed to the agency interpretation, is controlling when a tax statute is requested to be interpreted by this court. We cannot reverse the chancellor’s findings unless it was clearly erroneous to find that appellee did not fall within the listed entities. Based upon the foregoing, we cannot say the findings were clearly erroneous.

Affirmed.

Hays, L, dissents.

Steele Hays, Justice,

dissenting. Arkansas Code Ann. § 26-52-301 (Repl. 1992) levies a gross receipts tax on the service of furnishing rooms by hotels, apartment hotels, lodging houses and tourist camps or courts to transient guests (“those who rent accommodations other than their regular place of abode on less than a month to month basis”). Ark. Code Ann. § 26-52-1002 (Repl. 1992) levies an additional tax for purposes of tourism on the same enterprises, adding motels and condominiums.

I believe the taxes levied by these statutes are imposed on the services furnished by the named enterprises. The rental management of privately owned furnished condominiums in recreational and resort areas for short term usage is a familiar device. These properties are not condominiums, but it is not their legal or physical makeup that here concerns us, but the working arrangement by which revenues subject to taxation are generated. In that sense, there is not the slightest difference between the services furnished by the appellee and those provided in the rental of resort area condominiums generally.

Nor can I agree that the language used in these statutes is not intended to include this operation. Accommodations are furnished to transient guests on short term rentals of less than thirty days whose regular abode is elsewhere. They are, in short, tourists, the precise object at which this tax is aimed. This enterprise may not fit the common understanding of hotels or tourist courts, but that cannot be said of the term ‘lodging house.’ These properties are rented as a unit, fully appointed and furnished in detail, without meals. Maid service is included and the arrangements are negotiated on the basis of a specific contract. These are the defining characteristics of a lodging house as distinguished from hotels and motels. Fox v. Windemere Hotel Apartment Co., 157 P. 820 (Cal. Ct. App. 1916) (“A lodging house is nonetheless such because it contains furnished apartments that are let by the week or the month”) Huntley v. Stanchfield, 169 N.W. 276 (Wis. 1918) (“A lodging housekeeper is one who deals specifically with his customers by personal contracts for the nature of the accommodation, the duration of the stay and exercising the right to reject applicants at his pleasure”); Selvetti v. Building Inspector for Revere, 233 N.W.2d 915 (Mass. 1968) (“A house in which lodgings are let, especially a house other than an inn or motel”); Hall v. Zoning Board, 549 N.E.2d 433 (Mass. App. Ct. 1990) (“Lodging houses — where tenants enter into an agreement with others under which temporary living space is provided in exchange for compensation”); Kelly v. Excise Commissioners, 54 How. Pr. (N.Y.) 327 (1877)(“A lodging house is distinguishable from an inn or hotel in that the latter furnish meals”).


author: Robert L. Brown, Justice.

text:
    EAST POINSETT COUNTY SCHOOL DISTRICT NO. 14, Clyde Eason, Harold Tyler and Gary Weathers v. Marolyn Massey
    94-12
    876 S.W.2d 573
    Supreme Court of Arkansas
    Opinion delivered May 31, 1994

      Bill W. Bristow, for appellants.

      Richard Rhodes, for appellees.
   Robert L. Brown, Justice.

This appeal is the second to arise out of the consolidation agreement between the Lepanto and Tyronza School Districts. See East Poinsett County School District No. 14 v. Massey, 315 Ark. 163, 866 S.W.2d 369 (1993). The agreement resulted in a consolidated school district named the East Poinsett County School District. The current appeal raises the question of whether the transfer of the consolidated junior high school from Tyronza to Lepanto was effective in light of the fact that a quorum of the East Poinsett County School District, as originally constituted, was not present at the meeting when the move was approved. We affirm the chancery court’s decision that a legal quorum did not attend.

The consolidation agreement between the Lepanto and Tyronza School Districts which was entered into in 1986 provided that the Tyronza campus would accommodate school children from both districts for the junior high grades 7-9 and that the Lepanto campus would be used for the high school grades of 10-12. Under the consolidation agreement, the consolidated School District was to have a school board of six members, with three being from the former Lepanto School District and three from the former Tyronza School District. On August 10, 1992, the school board for the consolidated School District met but only the three members of the former Lepanto School District attended. Prior to that meeting on August 3, 1992, Linda Hinton, a board member representing the former Tyronza School District, resigned. Regarding the other two missing Tyronza members, one was absent due to required service in the National Guard, and the third simply did not attend.

At the August 10, 1992 school board meeting the three former Lepanto members voted to transfer the junior high school from Tyronza to Lepanto. One week later the appellee, Marolyn Massey, on behalf of a class of Tyronza residents sued the School District, its superintendent, and the three Lepanto members for violation of the consolidation agreement and prayed that the chancery court enjoin the school board and superintendent from moving the junior high school to Lepanto. After the complaint was filed, the superintendent instituted the move of the junior high school to Lepanto.

In a first amended complaint, Massey further alleged that a quorum of school board members was not present on August 10, 1992, to take official action and that at a subsequent board meeting on October 12, 1992, the action taken by the board was invalid because a board member had not been duly sworn in as a member. In a second amended complaint, Massey joined Linda Hinton, the former board member from Tyronza, as a party plaintiff. Hinton made the additional allegation in support of the injunction that the three Lepanto school board members had promised her that the Tyronza members should not fear missing a board meeting because the Lepanto members would not vote to move the junior high school without all of the Tyronza members present. Massey’s prayer for relief in her first complaint was for an injunction against moving the junior high school to Lepanto. In her first amended complaint she prayed for an injunction ordering a return of the junior high school to Tyronza. That was also the prayer for relief in the second amended complaint.

Trial of the matter commenced on July 19, 1993. Counsel for the School District noted that the time for responding to the second amended complaint had not yet expired, and that the issue of promissory estoppel raised in that complaint should, as a result, not be tried. The chancery court agreed. At the trial, testimony was taken from school board members, the superintendent, and principals and teachers on the advantages and disadvantages of moving the junior high school to Lepanto.

Following the trial, the chancery court issued an order wherein it discussed and dismissed as not dispositive several legal theories for relief propounded by Massey in her various complaints. The court found that a legal quorum of the board was not present at the August 10, 1992 meeting and, thus, concluded that the board action taken in moving the junior high school to Lepanto was void. The court granted the injunction to return the junior high school to Tyronza, effective July 1, 1994, and stated that the court’s intent was for the order to be treated as final and that an appeal be taken “with all deliberate Speed.” As agreed, the court did not consider or discuss the issue of promissory estoppel raised by Linda Hinton. The School District together with the three board members from Lepanto now appeal on the basis that a legal quorum was present at the August meeting.

I. APPEAL FROM INJUNCTION

We first consider whether the chancery court’s failure to include a Rule 54(b) certification in its order dealing with Lin,da Hinton’s issue of promissory estoppel runs afoul of the rule and our caselaw. See Davis v. Wausau Ins. Co., 315 Ark. 330, 867 S.W.2d 444 (1993); Franklin v. Osca, Inc., 308 Ark. 409, 825 S.W.2d 812 (1992). Linda Hinton’s theory in support of the injunction clearly was treated as separate from the other issues raised and held in abeyance by the chancery court for development at a later time. Since this issue supporting injunctive relief made by a new party in the second amended complaint was not disposed of, the chancery court’s order did not conclude the rights of all of the parties and was not final.

Nevertheless, the appeal before us is one from an injunction, and our Rules of Appellate procedure provide for an appeal from:

6. An interlocutory order by which an injunction is granted, continued, modified, refused, or dissolved, or by which an application to dissolve or modify an injunction is refused.

Ark. R. App. P. 2(a)(6). In our cases, we have stated that a mandatory injunction is appealable under Rule 2(a)(6). Tate v. Sharpe, 300 Ark. 126, 111 S.W.2d 215 (1989). Rule 2(a)(6) is a distinct basis for appeal from the rule providing for appeals from a “final judgment or decree.” Ark. R. App. P. 2(a)(1) & (6); see also Tate v. Sharpe, supra.

We, therefore, have before us an order which is not final with regard to all of the parties but which is appealable under a specific provision of our Appellate Rules dealing with injunctions. The question then is whether 2(a)(6) providing for appeals from injunctions represents an exception to Ark. R. Civ. P. 54(b), which requires that all claims relating to all parties be disposed of prefatory to appeal.

In an analogous case involving an appeal from an answer which had been stricken under Ark. R. App. P. 2(a)(4), we upheld the appeal and considered the case on the merits. See Arnold Fireworks Display, Inc. v. Schmidt, 307 Ark. 316, 820 S.W.2d 444 (1991). In Arnold Fireworks, we held that even though the order striking the answer was not final, the specific provision authorizing an appeal under those circumstances controlled over the general provisions in Ark. R. App. P. 2(a)(1) and Ark. R. Civ. P. 54(b). The same holds true in the case before us. The specific authority for an appeal from an injunction should control over the absence of finality in the court’s order. We will proceed, therefore, to address the merits of this case.

II. LEGAL QUORUM

The appellants, including the School District, urge on appeal that a legal quorum was present on August 10, 1992, and successfully effected the transfer of the junior high school to Lepante. They point out that because one board member had resigned on August 3, 1992, there were only five active board members at the time of the meeting in question.

The chancery court looked in part to statutory law regarding votes of boards of directors for school districts to resolve this question: “(4) For the purposes of this section, a quorum shall be a majority of the membership of the board.” Ark. Code Ann. § 6-13-619(4) (1987). This statute, unhappily, does not resolve the issue raised in that it can be read to mean a quorum of the board as originally constituted or a quorum of the board comprised of remaining active members. Nor do we believe, as appellants contend, that the statute requiring a majority of the remaining school board members to fill a vacancy controls this situation. See Ark. Code Ann. § 6-13-611(a) (1987).

The pivotal issue in this case is whether the resignation of a board member reduces board membership and likewise reduces the number of members required to constitute a quorum. The authorities vary in their findings on this issue. What appears to be the prevailing view is best expressed by Corpus Juris Secundum:

Where such vacancies occur in the membership of a board as to reduce its number below that of a quorum of the board as originally constituted, the board is without power to take any action; but the mere existence of a vacancy or vacancies does not prevent the board from acting as such, as long as a quorum remains.

73 C.J.S., Schools and School Districts § 123 (1952); see also Clark v. North Bay Village, 54 So.2d 240 (Fla. 1951).

The position of the appellants that a quorum pertaining to a five-member board is all that was required after Linda Hinton’s resignation does not withstand scrutiny. Such a liberal interpretation would mean that two members of a three-member quorum would be a majority of a six-member school board and could effect board business. This argument may have some surface appeal because of the necessity of continuing school business even in the face of a resignation. However, the requirement of a quorum is a protection against totally unrepresentative action in the name of the full body by a rump section of the membership. See Robert’s Rules of Order 20 (Sarah Corbin Robert et al. eds., 1990). The appellants’ interpretation is at odds, in our judgment, with the concept behind the quorum mandate, and we agree with the chancery court that a quorum of the original board, that is, four members, was required to be present to conduct the business of the board on August 10, 1992. Thus, the action taken by three members of the board was a nullity.

III. MANDATORY INJUNCTION

The School District next claims that the chancery court erred in issuing a mandatory injunction ordering the return of the junior high school to Tyronza, effective July 1, 1994. This court does not reverse the granting of an injunction absent a manifest abuse of discretion by the chancery court. Ark. State Board of Pharmacy v. Troilett, 249 Ark. 1102, 463 S.W.2d 383 (1971). Moreover, a court may not interfere with a school board in the exercise of its discretion unless there is clear and convincing evidence of abuse by that board. Leola School District v. McMahan, 289 Ark. 496, 712 S.W.2d 903 (1986); Lee v. Big Flat Public Schools, 280 Ark. 377, 658 S.W.2d 389 (1983). On the other hand, a court may substitute its judgment for that of a school board when the board has acted arbitrarily, capriciously, or contrary to law. Springdale Bd. of Educ. v. Bowman, 294 Ark. 66, 740 S.W.2d 909 (1987).

Because we have concluded that a quorum of the school board did not exist at the August 10, 1992 meeting, its actions on that date were contrary to law. Ark. Code Ann. § 6-13-619(c) (1987). As the vote of the school board transferring the junior high school to Lepanto was a nullity, the subsequent action of the superintendent to effect that decision was also invalid. Though we do not consider the question of whether it is in the best interest of the School District for the junior high school to remain in Lepanto, there is clearly evidence of record that a Lepanto junior high school irreparably harms Tyronza residents and that they have no adequate remedy at law. Under these facts it was entirely proper for the chancery court to order the return of the junior high school to Tyronza.

Affirmed.


text:
    STATE of Arkansas v. Jeffery JOHNSON
    CR 93-1398
    876 S.W.2d 577
    Supreme Court of Arkansas
    Opinion delivered May 31, 1994

      Winston Bryant, Att’y Gen., by: Clint Miller, Senior Asst. Att’y Gen., for appellant.

      Wallace & Hamner, by: Dale E. Adams, for appellee.
   Robert L. Brown, Justice.

This appeal by the State raises the issue of whether the appellee, Jeffery Johnson, was entitled to be told the results of his blood alcohol test before deciding if he wanted to have a second chemical test performed. The circuit court determined that Johnson could not make an informed decision about a second test, to which he had a statutory right, without knowing the results of the original test. The court found him not guilty of DWI, first offense, and dismissed the charge. The State urges that we declare that the circuit court erred in its reading of the statute.

The facts are undisputed. At approximately 1:00 a.m. on December 18, 1992, Johnson was driving his pickup truck in Little Rock and was involved in an accident with two other vehicles. Little Rock Police Patrolman Doug King arrived at the scene and later testified that Johnson, who had a broken leg as a result of the accident, had smelled strongly of alcoholic beverages. Johnson was transported to Baptist Medical Center, and Little Rock Police Patrolman Everett Hopper, who is a certified DWI specialist, interviewed him there. Officer Hopper stated at trial that Johnson consented to having his blood drawn, and blood was drawn by a registered nurse. Hopper then told him that he could have a second test administered. Johnson declined the second test. The blood sample was later transported to the State Health Department where it was tested eleven days later on December 29, 1992. The results showed .11 percent blood alcohol content which is above the legal limit for intoxication. Ark. Code Ann. § 5-65-103 (1987).

Johnson was cited for DWI, first offense, and for reckless driving. He was tried in Little Rock Municipal Court, found guilty, and sentenced to one-day in jail, license suspension of ninety days, and alcohol treatment and education and fined $300 plus costs. He appealed that judgment of conviction to circuit court for a trial de novo. At the conclusion of all evidence, defense counsel moved for a directed verdict, though it was a bench trial, and the circuit court raised its concern about how Johnson could know if he wanted a second blood alcohol test without knowing the results of the first. The prosecutor pointed out that all the statute requires is that if a person consents to the first test, that person has a right to a second test. The circuit court then stated that Johnson was not afforded his rights under Act 106 of 1969, now codified as Ark. Code Ann. § 5-65-204(e)(1987), and found him not guilty.

The sole point urged by the State is that the circuit court erred as a matter of law in its interpretation of § 5-65-204(e). In addressing an appeal by the State, we first must determine whether the correct and uniform administration of the criminal law requires our review. Ark. R. Crim. P. 36.10(c); see also State v. Barter, 310 Ark. 94, 833 S.W.2d 372 (1992). We conclude that it does. If the circuit court of Pulaski County interprets the second-test statute in one fashion and the circuit courts in other counties are at odds with that interpretation, uniformity throughout the state is lacking. We, therefore, will consider the merits of this matter.

The controlling statute, § 5-65-204(e), reads as follows:

(e) The person tested may have a physician or a qualified technician, registered nurse, or other qualified person of his own choice administer a complete chemical test in addition to any test administered at the direction of a law enforcement officer.
(1) The law enforcement officer shall advise the person of this right.
(2) The refusal or failure of a law enforcement officer to advise such person of this right and to permit and assist the person to obtain such test shall preclude the admission of evidence relating to the test taken at the direction of a law enforcement officer.

The beginning point in interpreting this statute, as.with all statutes, is to construe the words just as they read and to give them their ordinary and accepted meaning. Farnsworth v. White County, 312 Ark. 574, 851 S.W.2d 451 (1993); Brimer v. Arkansas Contractors Licensing Bd., 312 Ark. 401, 849 S.W.2d 948 (1993); Kyle v. State, 312 Ark. 274, 849 S.W.2d 935 (1993). In addition, this court adheres to the basic rule of statutory construction which is to give effect to the intent of the legislature, making use of common sense. Kyle v. State, supra. When the language of the statute is plain and unambiguous, there is no need to resort to rules of statutory construction. Arkansas Dep’t of Human Serv. v. State, 312 Ark. 481, 850 S.W.2d 847 (1993).

In reading the statute in question, it is clear that there is no requirement that the results of the first blood alcohol test be furnished so that the person tested can decide whether to request a second test. Moreover, the statute as currently drafted makes good common sense. Even without knowing the results of the first test, the person whose blood is examined may well want to have a second test performed immediately to assure the validity and accuracy of the testing procedures. We conclude that the circuit court did exactly as the State contends and added an element to the statute which the General Assembly did not include.

We further note that under the circuit court’s interpretation, testing would have to occur promptly for the person to learn the results and have an opportunity for a valid second test. The reason for this is that blood alcohol content dissipates over a period of time. David v. State, 286 Ark. 205, 691 S.W.2d 133 (1985); Elam v. State, 286 Ark. 174, 690 S.W.2d 352 (1985).A requirement for testing with instant test results could well work a hardship when the equipment and expertise for determining those results is not available.

We hold that the circuit court erred in its interpretation as a matter of law.


author: Per Curiam.

text:
    Dewayne MAXIE v. Mike GAINES, Leroy Brownlee, Carol Bohannon, Jim Handly, Board of Parole Members
    94-313
    876 S.W.2d 572
    Supreme Court of Arkansas
    Opinion delivered May 31, 1994

      Appellant, pro se.
    No response.
   Per Curiam.

The appellant Dewayne Maxie filed a pro se petition for writ of mandamus and declaratory judgment against the members of the Arkansas Board of Pardons and Parole, alleging that the parole board was wrong to require that he should serve his term of parole under a plan whereby he would live outside Arkansas. The petition was denied, and appellant has lodged the record in this court on appeal. He tendered a brief and now asks that the Office of the Attorney General be compelled to duplicate the brief at public expense.

A petition challenging a condition of parole is a civil action. See Virgin v. Lockhart, 288 Ark. 92, 702 S.W.2d 9 (1986). There is no right under our rules or any constitutional provision to have a brief in a civil case duplicated at public expense. Nevertheless, in those cases where the indigent appellant is able to make a substantial showing on proper motion that he is entitled to relief and that he cannot provide this court with a sufficient number of copies of the appellant’s brief, we will request the Attorney General to duplicate the brief tendered by the appellant. As with indigent appellants in criminal cases under our Rule 4-3 (i), the appellant must submit one double-spaced typewritten copy of the brief to the Attorney General and one to the Clerk of this court not later than the due date of the brief. In such instances, the time for the filing of the Attorney’s General’s brief will be extended by five days.

The instant motion is denied because the appellant states only that the Department of Correction has declined to allow incarcerated persons access to a copying machine. He makes no statement in the motion as to the merit of the appeal and thus has failed to make the substantial showing of merit required before this court will request that the Attorney General duplicate the brief.

Motion denied.


text:
    Allen Bruce WOODS v. STATE of Arkansas
    CR 94-311
    876 S.W.2d 577
    Supreme Court of Arkansas
    Opinion delivered May 31, 1994

      Paul Johnson, for appellant.
    No response.
   Per Curiam.

Allen Bruce Woods, by his attorney, has filed a motion for a rule on the clerk.

His attorney, Paul Johnson, admits by motion and brief that the record was tendered late due to a mistake on his part.

We find that such an error, admittedly made by the attorney for a criminal defendant, is good cause to grant the motion. See our Per Curiam opinion In Re: Belated Appeals in Criminal Cases, 265 Ark. 964 (1979).

The motion is, therefore, granted. A copy of this opinion will be forwarded to the Committee on Professional Conduct.


author: Robert H. Dudley, Justice.

text:
    Earl MARVEL and Linda Marvel Mathis, the Administratrix of the estate of Cora Marvel, Deceased v. Don PARKER and Shirley Parker
    94-129
    878 S.W.2d 364
    Supreme Court of Arkansas
    Opinion delivered June 6, 1994

      Hixson & Cleveland, by: Herschel Cleveland, for appellants.

      Terry R. Ballard, for appellee.
   Robert H. Dudley, Justice.

Cora Marvel and Shirley Parker were involved in an altercation. Later, their husbands, Earl Marvel and Don Parker, were involved in a second altercation. Earl Marvel and Cora Marvel, by the administrator of Cora Marvel’s estate, filed this tort suit for assault and battery against Don Parker and Shirley Parker. Appellants alleged that both incidents were unprovoked attacks by the Parkers, while the Parkers pleaded the affirmative defense of self-defense. A jury returned a defendant’s verdict. Appellants assign five rulings as error. None have merit, and we affirm.

One of appellants’ points of appeal is that the verdict “was contrary to the facts of the case and the weight of evidence.” The argument in appellants’ brief reveals that appellants are asking this court to reweigh the evidence. Determining the weight of the evidence is for the jury and not an appellate court. See Gilbert v. Shine, 314 Ark. 486, 863 S.W.2d 314 (1993). We need not set out the evidence because appellants did not make a motion for a directed verdict at the close of all the evidence of the affirmative defense or at the close of all of the evidence, nor did they make a motion for a judgment notwithstanding the verdict. Neither the instructions nor the verdict are included in the abstract. The jury may have found that both appellants failed to meet their burdens of proof, that appellees proved their affirmative defenses, or a combination of the two. We do not know which finding the jury might have made, but, certainly, we cannot reweigh the sufficiency of the evidence for the first time on appeal. See Mikel v. Hubbard, 317 Ark. 125, 876 S.W.2d 558 (1994).

An appeal asking for a new trial under Rule 59 of the Arkansas Rules of Civil Procedure does not require a motion in the trial court testing whether a verdict was clearly against the preponderance of the evidence. See ARCP Rule 59(f); Yeager v. Roberts, 288 Ark. 156, 702 S.W.2d 793 (1986). But, even if appellants’ argument might be intended as one for a new trial, and even if we ignored the fact the verdict might have been because the jury determined that plaintiffs failed to meet their burden or because the defendants proved their affirmative defense or a combination of the two, the argument would fail because the evidence amounted to a swearing match over which parties were the aggressors and which were at fault. In other words, the verdict was not “clearly contrary to the preponderance of the evidence” for each of the possible findings. See ARCP Rule 59 (a)(1).

Appellants also assign as error the trial court’s ruling involving the use of medical records by Dr. Munir Zufari. The argument comes about as follows. Cora Marvel went to Dr. Rebecca Johnson after her fight with Shirley Parker. Dr. Johnson died, and Dr. Munir Zufari began to treat Mrs. Marvel. Dr. Zufari reviewed Dr. Johnson’s medical records. At trial Dr. Zufari testified at length concerning the contents of Dr. Johnson’s medical records. However, when he started testifying from his own medical records, appellees objected because Dr. Zufari’s medical records had not been supplied to them as requested in discovery. Appellants answered that they had only received the records the previous day and that Dr. Zufari had been on their witness list for a good while. After a lengthy bench conference, the trial judge ruled that Dr. Zufari would not be allowed to rely on his medical records when testifying. The trial court allowed Dr. Zufari to continue testifying and offered appellants a recess for the doctor to review the records. Appellants declined. Dr. Zufari then testified concerning his treatment of Earl Marvel.

Appellants cannot demonstrate that they suffered prejudice by the trial judge’s ruling. Dr. Zufari was allowed to testify concerning the information in the records and obviously had no problem remembering the treatment. Nowhere in his testimony did Dr. Zufari fail to answer a question because he could not remember something, and nowhere did he indicate a need to review the medical records. Further, appellants did not request that the witness be allowed to use his records while testifying. They merely requested a recess for the witness to review the records. Because of this, appellants received all the relief they requested and cannot now complain. See Odum v. State, 311 Ark. 576, 845 S.W.2d 524 (1993).

Appellants point to Rule 612 of the Arkansas Rules of Evidence, which indicates that when a witness uses a writing to refresh memory, the adverse party is entitled to a copy of such writing at the time the writing is used. Appellants argue that they complied with this Rule. That is true. However, the judge denied the witness the use of the records because the records were requested in discovery, but were not provided by appellants. A trial judge’s ruling regarding sanctions for discovery violations will not be reversed unless it involves an abuse of discretion. Rodgers v. McRaven’s Cherry Pickers, Inc., 302 Ark. 140, 788 S.W.2d 227 (1990).

Appellants next argue that the trial court erred in allowing the hearsay testimony of a defense witness, Tom Hanson. He testified that immediately after the fight between Don Parker and Earl Marvel, Parker told him that Marvel attacked him. Appellant objected on the basis of hearsay. Hanson continued testifying and stated the substance of the conversation before the trial judge could quiet him. The judge evidently wanted to determine if the statement by Parker was an excited utterance because the judge asked Hanson when the conversation occurred. See A.R.E. Rule 803 (2). Appellees’ counsel asked Hanson whether Parker related the event just after it occurred. The trial court stated that a better foundation needed to be laid. Appellees’ counsel resumed questioning of the witness, and the trial court said nothing more. Appellants failed to renew their hearsay objection or make any other objection to Hanson’s testimony. The failure to renew an objection constitutes a waiver of the matter. In addition, the trial judge never ruled on the objection, and appellants had the burden of obtaining a ruling. Firstbank of Arkansas v. Keeling, 312 Ark. 441, 850 S.W.2d 310 (1993).

Appellants argue that the trial judge erred in allowing a witness to testify even though the witness was not on the list of witnesses supplied to appellants during the course of discovery. The applicable rule of civil procedure provides that “[p]arties may obtain discovery regarding any matter, not privileged, which is relevant to the issues on the pending actions, ... including the ... identity and location of persons who ... will or may be called as a witness at the trial....” ARCP Rule 26(b)(1). The name of the witness was not supplied. The trial judge conducted an in-chambers hearing and determined that the purpose of the testimony was to rebut appellants’ case-in-chief and that there had not been a knowing concealment of the name of the witness. See Dunlap v. Buchanan, 293 Ark. 179, 735 S.W.2d 705 (1987). The test on appeal is whether the trial judge abused his discretion in the ruling. Banks v. Jackson, 312 Ark. 232, 848 S.W.2d 408 (1993). We cannot say the trial judge abused his discretion in the ruling on the matter.

The final assignment of error involves the relevancy of testimony by a former deputy sheriff. He testified that three days after the altercation between Cora Marvel and Shirley Parker, he went to the Marvel home to serve some civil papers and that Cora Marvel appeared to be moving about without difficulty. Appellants contend the admission of this evidence was in error because the evidence was not relevant, but even if it had relevance, any relevance was substantially outweighed by the danger of unfair prejudice. See A.R.E. Rules 401 & 403. The fact that evidence is prejudicial to a party is not, in itself, reason to exclude evidence. The danger of unfair prejudice must substantially outweigh the probative value of the evidence. In the present case the evidence was relevant to Cora Marvel’s condition shortly after the incident with appellee Shirley Parker, and the trial judge did not abuse his discretion in ruling that the mention of service of civil papers as part of the deputy sheriff’s testimony did not cause such unfair prejudice as to outweigh the relevance of the testimony. See Peters v. Pierce, 314 Ark. 8, 858 S.W.2d 680 (1993).

Affirmed.


author: David Newbern, Justice. Tom Glaze, Justice,

text:
    ARKANSAS BEST CORPORATION v. GENERAL ELECTRIC CAPITAL CORPORATION, Riverside Furniture Corporation, Riverside Holdings Inc., M. R. Realty Associates, L.P., McKane Robbins & Co., David McKane, Individually, and Peter Robbins, Individually
    93-399
    878 S.W.2d 708
    Supreme Court of Arkansas
    Opinion delivered June 6, 1994

      Jones, Gilbreath, Jackson & Moll, by: Robert L. Jones, Jr. and Randolph Jackson’, and Hughes & Luce, L.C.P., by: Clifton T. Hutchinson, Bobby M. Rubarts, and Holly A. Schymik, for appellant.

      Daily, West, Core, Coffman & Canfield, by: Ben Core and Robert Bishop’, and Latham & Watkins, by: James E. Brandt and Louise Zeitzew for appellees.
   David Newbern, Justice.

Arkansas Best Corporation (ABC) appeals from the order of a Chancellor refusing to unseal a settlement agreement and resulting judgment. The agreement was entered by the parties to a lawsuit before the Chancellor and sealed at their request. In the order sealing the agreement, the Chancellor stated conditions upon which the settlement could be unsealed, in which case it would be incorporated as the findings of fact in an agreed judgment signed by the Chancellor. It was error to permit the document to be sealed, thus we reverse and remand.

In 1989, ABC entered an agreement to sell the stock of its subsidiary, Riverside Corporation (Riverside), to M. R. Realty, a company formed by David McKane and Peter Robbins. To finance the purchase, McKane and Robbins obtained a loan from General Electric Capital Corporation (GECC). McKane and Robbins contend that after the purchase they discovered the amount of money needed annually to fund Riverside’s employee pension plan had been understated during negotiations for the sale. McKane and Robbins believed the need would be $150,000 to $200,000; however, the requirement was approximately $750,000. In August 1990 McKane and Robbins sued ABC in a United States District Court in New York alleging, among other things, fraud and breach of contract.

In April 1991 GECC filed suit against McKane and Robbins in Sebastian Chancery Court alleging they had breached loan covenants by diverting $2.4 million dollars from Riverside’s cash accounts for personal use. On October 1, 1991, the Chancellor entered an agreed judgment. The judgment stated the parties had entered a settlement agreement which the Court had examined in camera. The settlement agreement was in conjunction with an “other judgment” which provided for payment of a specified sum of money. The agreed judgment also stated the settlement agreement contained admitted facts that formed the basis of liability in the agreed judgment and the “other judgment.”

The agreed judgment also provided the settlement agreement would be sealed with the court clerk’s file and could only be unsealed after a hearing on a motion of a party to the suit, or by filing of bankruptcy by McKane or Robbins individually or by their company. The agreed judgment also contained the following two paragraphs:

(5) In the event that the Settlement Agreement is unsealed under the terms set forth above, the admitted facts contained in the Settlement Agreement will become a part of this Agreed Judgment and the Other Judgment as findings of fact by this Court;
(6) This Agreed Judgment and the Other Judgment are being entered simultaneously and together constitute the final agreed judgment of the parties.

In 1992 ABC moved the United States District Court in New York to compel discovery of the settlement agreement between McKane and Robbins and GECC. ABC says it needs the information because the money McKane and Robbins may have been found liable for diverting to personal use could be shown to be that which should have been put in the pension fund. In June 1992 a United States Magistrate declined to compel discovery but instructed ABC to apply to the Chancellor to unseal the document.

ABC filed its application to unseal in the Sebastian Chancery Court, and a hearing was held. On December 10, 1992, the Chancellor denied ABC’s request.

1. Procedure

a. Standing and timeliness

ABC was not a party to the litigation in which it filed the motion to unseal the settlement agreement. As the Alabama Supreme Court held in Holland v. Eads, 614 So.2d 1012 (Ala. 1993), a motion to intervene is the proper means of asserting the public’s right to open court records. No motion to intervene was made in this case.

The parties have not raised any question about ABC’s standing in the matter.

Despite these lapses, we have no hesitancy in treating this as a case in which there was a post-judgment motion to intervene for the purpose of unsealing the records. Arkansas R. Civ. P. 24 permits “timely” intervention. No time limit is stated. The timeliness of intervention is within the discretion of the Trial Court, and permitting intervention will not be considered error due to untimeliness unless there has been an abuse of discretion. See Bank of Quitman v. Phillips, 270 Ark. 53, 603 S.W.2d 450 (Ark. App. 1980). When there are “unusual and compelling” circumstances, we permit intervention even after a final judgment has been entered. UHS of Arkansas, Inc. v. City of Sherwood, 296 Ark. 97, 752 S.W.2d 36 (1988). Cf. Beckman Industries, Inc. v. International Ins. Co., 966 F.2d 470 (9th Cir. 1992), in which the “compelling need” and “extraordinary circumstances” tests were rejected in favor of allowing post-judgment intervention to seek modification of a protective discovery order “to meet the reasonable needs of other parties in other litigation.”

The circumstances in this case are indeed “unusual and compelling.” ABC sought to discover information about the litigation between McKane and Robbins in a federal court which in turn referred them to the Sebastian Chancery Court. In ordinary or “usual” circumstances, the information would be a matter of public record. That, coupled with the public’s interest in open judicial proceedings, which we regard as “compelling,” causes us to conclude the attempt to intervene was not untimely.

b.Final order

Again, neither party has challenged the finality of the order being considered, but when we have doubts we raise the issue as it is jurisdictional. Widmer v. Tuohey, 297 Ark. 85, 759 S.W.2d 562 (1988); Roy v. International Multifoods Corp., 268 Ark. 958, 597 S.W.2d 129 (1980). If the ruling on the motion to unseal the settlement agreement were merely a motion in the course of litigation not yet final, we would dismiss the appeal. Here, however, the litigation is final. A judgment has been entered. Although the ruling on the motion we treat as one to intervene came after the final judgment, it is a part of the litigation which resulted in that final determination and is a part of the judgment, thus we consider it final and appealable pursuant to Ark. R. App. P. 2(a) 1.

c.Discovery

This problem began with a discovery request in the federal court in New York, but the issue before us is not a discovery issue. The federal magistrate declined to order Me Kane and Robbins to produce the sealed settlement agreement but deferred to the Chancellor. The parties’ briefs frequently refer to Ark. R. Civ. P. 26(c) which deals with protective orders restricting discovery requests. The rule does not address the issue presented. The settlement agreement was sealed pursuant to a judgment. The order sealing the settlement agreement does not refer to Rule 26(c), nor was the agreement subject to a discovery request at the time it was sealed. Instead, the Chancellor’s action requires us to determine under what authority, if any, a trial court may seal a settlement agreement which is apparently part of, or the basis of, an “other judgment” which also lies hidden from the public view.

d.Burden of persuasion

GECC and McKane and Robbins suggest that ABC bears a greater burden in convincing a court that the record should be unsealed than they were required to sustain in convincing the Chancellor to seal the records. We disagree. Although the decision we review is that of declining to unseal the records, the issue is whether the records should have been sealed in the first place. It was treated thus in Holland v. Eads, supra, and in Zuckerman v. Piper Pools, 607 A.2d 1027 (N.J. Super., A.D., 1992). The latter case was one in which an unsealing order was sought, and the New Jersey Superior Court, Appellate Division, considered only the question whether the record should have been sealed. Considering the motion to unseal, the Court said, and we agree, “One who seeks to overcome the expectation of access bears the burden of establishing the requisite important state interest.” 607 A.2d at 1029.

2. The right of access

In Nixon v. Warner Communications, Inc., 435 U.S. 589 (1978), the Supreme Court addressed the common law right of access to court proceedings and records. While it is not an absolute right, the Court stated, “It is clear the courts of this country recognize a general right to inspect and copy public records and documents, including judicial records and documents.” 435 U.S. at 597. The Court conceded, however, “It is difficult to distill from the relatively few judicial decisions a comprehensive definition of what is referred to as the common-law right of access or to identify all factors to be weighed in determining whether access is appropriate.” Id., at 599.

In Arkansas Dep’t of Human Services v. Hardy, 316 Ark. 119, 871 S.W.2d 352 (1994), we addressed the public’s right of access to a court’s final order. The Department of Human Services brought a paternity suit. After a hearing, the Chancellor filed a final order containing his ruling and then filed a second order stating the first order was sealed. We found the Chancellor erred in sealing the order, stating:

The foregoing issue came about because the chancellor sealed the final order, and, contrary to the arguments of both parties, we know of no authority for the sealing of a final order. One of the basic principles of a democracy is the people have a right to know what is done in their courts. Correlative of this principle is the vital function of the press to subject the judicial process to extensive public scrutiny and comment. See Arkansas Television Co. v. Tedder, 281 Ark. 152, 662 S.W.2d 174 (1983). Secret final orders could defeat this synergy of the peoples’ right and the press’s function, especially in cases in which the State is a party, as in this case. In Sheppard v. Maxwell, 384 U.S. 333 (1966), the Supreme Court wrote that when public court business is conducted in private, it becomes impossible to expose corruption, incompetence, inefficiency, prejudice, and favoritism. For this reason traditional Anglo-American jurisprudence distrusts secrecy in judicial proceedings and favors a policy of maximum public access to proceedings and records of judicial tribunals. We have no hesitancy in holding the final order in this case should not have been sealed.

It is difficult to distinguish the Hardy case from this one. The pronouncements we made in the Hardy case with respect to the right of access are based on cases from other jurisdictions which had declared and emphasized the common law right of the public to access to court proceedings, and they are relevant to this decision. The “other judgment” lurking in the same shadows as the settlement agreement is apparently a significant decision by the Trial Court. While it may not be a “final order” like the one sealed in the Hardy case, the same rationale applies.

A review of cases from other jurisdictions indicates support for a strong presumption in favor of the right of access. See Nixon v. Warner Communications, Inc., supra; Bank of America Nat. Trust and Sav. Assn. v. Hotel Rittenhouse Associates, 800 F.2d 339 (3rd Cir. 1986); Palmieri v. State of N.Y., 779 F.2d 861 (2nd Cir. 1985); Holland v. Eads, supra; R.W. v. Hampe, M.D., 626 A.2d 1218 (Pa. Super. 1993); In re Marriage of Johnson, 598 N.E. 406 (Ill. App. 4 Dist. 1992); Zuckerman v. Piper Pools, supra. Each of these cases, however, also states the presumption is not absolute. In the Hardy case we too recognized “the inherent authority of a trial court to issue appropriate protective orders to control court records, and, thus, the right to inspect public records is not absolute.”

The Supreme Court’s opinion in the Nixon case held the right of access was a matter subject to the Trial Court’s discretion based on the facts and circumstances. Other courts have not expressed the same degree of deference. See, e.g., Bank of America Nat. Trust and Sav. Assn. v. Hotel Rittenhouse Associates, supra,; United States v. Criden, 648 F.2d 814 (3rd Cir. 1981).

A trial court’s discretion to invoke inherent authority denying access to judicial documents must be balanced against the strong presumption in favor of access, but in our view, entrance to a trial court’s discretion to secret its actions must lie beyond a formidable threshold.

In the Hardy case we noted several statutes which provide for closing judicial proceedings under certain circumstances. See, e.g., Ark. Code Ann. § 4-75-605 (Repl. 1991)(suits involving trade secrets); Ark. Code Ann. § 9-9-217 (Repl. 1993)(adoption proceedings records shall be closed, only to be open as provided by law or for good cause); Ark. Code Ann. § 9-27-325 (Repl. 1993)(juvenile proceedings); Ark. Code Ann. § 16-13-318 (1987)(domestic relation cases). In addition, Ark. R. Sup. Ct. 6-3 allows for anonymity in certain appellate proceedings, and as discussed above, Ark. R. Civ. P. 26(c) allows a trial court to enter protective orders related to discovery requests. These statutes and rules provide a range of subjects in which a trial court can seal judicial documents or proceedings. The range is similar to the limitations of access to judicial proceedings in other jurisdictions.

In Holland v. Eads, supra, the Alabama Supreme Court, noting an absence of similar rules and statutes in that State, created a guideline for sealing court records. It held that a trial court can only seal court records upon a written finding that clear and convincing evidence indicates the document sought to be sealed (1) contains a trade secret, (2) is a matter of national security, (3) promotes scandal or defamation, (4) pertains wholly to private family matters, such as divorce, (5) poses a serious threat of harassment, exploitation or other harm to the parties to the actions, or (6) poses the potential for harm to third persons not parties to the litigation.

A less structured approach was taken in In re Marriage of Johnson, supra, in which the Illinois appellate court stated, “Once documents are subject to the right of access, only a compelling reason, accompanied by specific factual findings, can justify keeping them from public view.” 598 N.E.2d at 411. We are persuaded to adopt an approach similar to that taken in R. W. v. Hampe, M.D., supra, in which a Pennsylvania Superior Court refused a plaintiff’s request to seal court records containing her name in a malpractice suit against her psychiatrist. The Court agreed the information which would be produced in a trial of the plaintiff’s complaint would indeed be embarrassing to her.

The Court reviewed Pennsylvania’s statutes and court rules that provided for sealing court records and concluded that the issue presented was clearly distinguishable from the limited circumstances in which a trial court could seal court records. We agree with the sense of the opinion that, beyond the instances described in the statutes or rules, the “inherent” authority of a trial court to seal court records must be very limited in view of the strong common law right of access.

ABC argues the information contained in the settlement between GECC and McKane and Robbins is relevant and necessary to the New York litigation. We regard that argument as unnecessary. The right of access belongs to the public, not just the parties to a lawsuit. More important, we are not persuaded by the counter-argument that GECC and McKane and Robbins have relied on the sealing order in reaching their settlement agreement. We agree with the statement of the United States Court of Appeals for the Third Circuit in Bank of America Nat. Trust and Sav. Assn. v. Hotel Rittenhouse Associates, supra, that mere encouragement of settlement is not a sufficient basis to overcome the public’s right of access.

If the parties to a law suit wish to enter an agreement and keep it secret, they may do so. All they need do is file a motion to dismiss litigation between them once the settlement of it is agreed upon. It remains their private business. If, however, they wish to make the settlement a court record and seek the imprimatur of a court, as was done in this case, it becomes the public’s business.

We do not close the door to the possibility of sealing court records in instances other than those provided by statute or rule of court. We do, however, suggest that we will look long and hard at any other sealing, and we require a trial court entering such an order to spell out in some detail the reasons for sealing the record.

During oral argument of this case the question of remand for a redetermination by the Chancellor was raised, the reason being that the Chancellor did not have the advantage of our opinion in the Hardy case when deciding to seal the documents. Neither party has asked for such a remand, and neither responded favorably to the suggestion during the oral argument. As shown in the citations to the Nixon and other cases cited above, there is nothing new about the strong right of public access to court records. Nor have we been cited to any reason in support of the sealing which we would have found acceptable had it been stated by the Chancellor. We therefore decline to remand the case other than for an order consistent with this opinion.

Reversed and remanded.

Glaze, J., dissents.

Tom Glaze, Justice,

dissenting. My primary reason for dissenting is that Arkansas Best Corporation has no standing in this lawsuit. ABC failed to file a required motion to intervene in this cause, and while the trial court did not reject ABC the relief it asked based upon ABC’s lack of standing, this court will sustain a trial court’s ruling if it reached the right result, even though it announced the wrong reason. Smackover State Bank v. Oswalt, 307 Ark. 432, 821 S.W.2d 757 (1991). In addition, we have said that on appeal we review a chancery case de novo, and if a chancellor’s decision can be sustained on other grounds, it will be done. O’Neal v. Ellison, 266 Ark. 702, 587 S.W.2d 580 (1979); Morgan v. Downs, 245 Ark. 328, 432 S.W.2d 454 (1968).

Arkansas Best was never a party to this litigation, and the parties to this cause of action settled their dispute and, by consent protective order of the Sebastian County Chancery Court, a judgment along with the parties’ settlement agreement was sealed until further order by the court. This occurred on October 1, 1991. Although Arkansas Best was well aware of this lawsuit as early as May 16, 1991, it made no attempt to intervene in it until December 10, 1992, after the parties settled this dispute. In this respect, ABC by letter dated May 16, 1991 to the United States District Court in the New York lawsuit notified that court of this Arkansas litigation and its relevance to ABC’s then pending motion to transfer or dismiss the New York litigation. Even so, for whatever reason, ABC chose neither to intervene in nor to monitor this Arkansas lawsuit.

While the majority court reads ARCP Rule 24 so as to allow Arkansas Best to intervene in this matter, I fail to see how that rule could possibly permit such an intervention fourteen months after judgment has been entered. See also ARCP Rule 60. As pointed out above, ABC had previously expressed to the New York court that its interests in the lawsuit could be affected by this Arkansas litigation, and accordingly, it had ample opportunity to intervene in this cause long before entry of the parties’ Arkansas judgment. At the least, Arkansas Best should have monitored this Arkansas litigation so as to exercise its rights in a timely manner.

This court has held repeatedly that timeliness of intervention is a matter within the discretion of the trial court and is subject to reversal only where that discretion has been abused; such Arkansas rule is buttressed, as well, by authority developed in the federal courts’ interpretation of Fed. R. Civ. P. 24. Polnac-Hartman & Associates v. First National Bank, 292 Ark. 501, 731 S.W.2d 202 (1987); see also 3B Moore’s Federal Practice, 24.3 (2d ed. 1987). Predictably, this court on review has also repeatedly affirmed trial court rulings bearing on Rule 24 intervention issues. Id., Carton v. Missouri Pac. R.R., 315 Ark. 5, 865 S.W.2d 635 (1993); Employers Nat’l Insurance Co. v. Grantors, 313 Ark. 645, 855 S.W.2d 937 (1993); Cupples Farms Partnership v. Forrest City Prod. Credit Ass’n, 310 Ark. 597, 839 S.W.2d 187 (1992); Looper v. Madison Guaranty Savings & Loan Ass’n, 292 Ark. 225, 729 S.W.2d 156 (1987); Bank of Quitman v. Phillips, 270 Ark. 53, 603 S.W.2d 450 (1980). In Bank of Quitman, the court noted the considerable reluctance of courts to allow intervention after the action has gone to judgment, absent extraordinary and unusual circumstances. 270 Ark. at 56, 603 S.W.2d at 452; see also Polnac-Hartman & Associates, 292 Ark. 503, 731 S.W.2d 202. Stated differently, this court noted a post-judgment intervention will be allowed only upon a strong showing of entitlement or a demonstration of unusual and compelling circumstances. UHS of Ark. Inc. v. City of Sherwood, 296 Ark. 94, 752 S.W.2d 36 (1988) (where filing and entering of judgment had been expedited [judgment was entered only twenty-two days after the city filed its complaint] this court determined that the intervenor, which filed its motion on the twenty-third day, demonstrated as a matter of right it was entitled to intervene to protect its interests).

In sum, ABC failed to demonstrate unusual or compelling reasons for intervening in this case. To the contrary, ABC was remarkably fourteen months late in asserting its interests. Certainly, ABC’s tardiness was reason enough for the Arkansas trial court to refuse ABC’s intervention. For this reason, I would affirm the chancellor’s ruling denying ABC’s request to unseal the parties’ settlement agreement entered in this cause.


author: David Newbern, Justice. Donald L. Corbin, Justice, Tom Glaze, Justice,

text:
    William LOTZ and Tammy P. Lotz v. Harold CROMER and Nellie Cromer
    94-100
    878 S.W.2d 367
    Supreme Court of Arkansas
    Opinion delivered June 6, 1994

      Pilkinton, Pilkinton & Yocum, by: Tony Yocum, for appellants.

      McKenzie, Graves, McRae & Vasser, by: Albert Graves, Jr., for appellees.
   David Newbern, Justice.

William and Tammy Lotz, the appellants, prevailed on their allegation that the appellees, Harold and Nellie Cromer, had charged interest at a usurious rate on an installment note for the purchase of a home. The Chancellor held that the Lotzes were entitled to twice the amount of interest paid and to have the remaining interest cancelled in accordance with Ark. Const, art. 19, § 13. The Lotzes are dissatisfied with the decree, however, because the Chancellor limited the award to twice the interest the Lotzes paid up to the time they filed their suit, thus declining to award twice the interest which was paid after the Lotzes filed their complaint. They also contend the Chancellor erred in holding that their payments were to remain at the rate of $400 per month as provided in the note but with the full amount of each payment going to reduce the principal debt. We agree with those contentions and thus reverse and remand the case for proceedings consistent with this opinion.

The note in question was given as partial consideration for purchase of a home in the amount of $31,600 at an interest rate 9.50% which was more than 5% over the federal discount rate on the date the note was made. The complaint requested a judgment for twice the amount of interest paid, which was $2,122.85, as well as a declaratory judgment that the contract was void as to unpaid interest. The complaint requested “all remaining monthly payments under the contract be only for the amount of principal which would have been paid each month.” The complaint was later amended to add an allegation of interest paid during the pendency of this lawsuit, bringing the total amount of interest paid to $3,896.58 and asking double that amount.

1. Interest paid

Article 19, § 13, of the Arkansas Constitution states:

(a) General Loans:
(i) The maximum lawful rate of interest on any contract entered into after the effective date hereof shall not exceed five percent (5%) per annum above the Federal Reserve Discount Rate at the time of the contract.
(ii) All such contracts having a rate of interest in excess of the maximum lawful rate shall be void as to the unpaid interest. A person who has paid interest in excess of the maximum lawful rate may recover, within the time provided by law, twice the amount of interest paid. It is unlawful for any person to knowingly charge a rate of interest in excess of the maximum lawful rate in effect at the time of the contract, and any person who does so shall be subject to such punishment as may be provided by law.

That section says one who has paid usurious interest is entitled to twice the amount of all interest paid and says nothing with respect to when the interest was paid. The decree limiting the double recovery to interest paid prior to the filing of the suit is thus inconsistent with the Constitution.

In McElroy v. Grisham, 306 Ark. 4, 810 S.W.2d 933 (1991), we interpreted art. 19, § 13, strictly. Addressing the portion of the section that states, “A person who has paid interest in excess of the maximum lawful rate may recover . . . twice the amount of interest paid,” we noted the penal nature of the section and concluded the penalty is mandatory. Quoting Arkansas State Racing Comm’n v. Southland Racing Corp., 226 Ark. 995, 295 S.W.2d 617 (1956), we stated, ‘“It is of course a familiar rule of statutory construction that ‘may’ is to be construed as ‘shall’ when the context of the statute so requires.’ Constitutional provisions are construed in the same manner as statutes.”

We have not directly addressed whether “all interest paid” is limited to interest paid before the filing of the suit. We stated in the McElroy opinion, however, that “to allow trial courts to dispense with the penalty at their discretion would be to defeat this [penal] purpose.” In view of our literal and strict interpretation in favor of imposing the very penalty stated in the Constitution, we hold it was error not to award the Lotzes twice the amount of all interest which had been paid on the note.

2. Future payments

Although the Chancellor found the remaining interest on the note void, his order requires them to continue making $400 monthly payments. The Lotzes argue the Chancellor should have ordered each future monthly payment reduced by the part of the payment representing interest.

The record contains an amortization schedule the Lotzes introduced into evidence reflecting the amount of principal and interest to be attributed to each payment. There is no question that a portion of the $400 monthly payments agreed to by the parties to this note was to be composed of interest. The interest portion was to decrease progressively over the life of the note, while the remainder of each payment was composed of principal which would increase with each payment.

In fashioning a remedy, a Chancellor has broad power, limited only to the extent that the remedy must be reasonable and justified by the proof. Chambers v. Manning, 315 Ark. 369, 868 S.W.2d 64 (1993); Smith v. Eastgate Properties, Inc., 312 Ark. 355, 849 S.W.2d 504 (1993).

Article 19, § 13(a)(ii), provides that “interest in excess of the maximum . . . shall be void as to the unpaid interest.” If the payments are left at $400 per month, all to be attributed to principal, the contract will have been altered because part of each payment was to have been attributed to interest and the payments will terminate sooner than contemplated. If the decree were to provide that only the principal portion of each future payment be made, the contract would be altered as the parties contemplated $400 per month payments and the payments would be progressively less.

If the $400 payments are left intact, the payees get the benefit of the use of the Lotzes’ money earlier than if the payments are reduced. In view of the penal nature of art. 19, §13, the alternative applied by the Chancellor is less reasonable and less justified by the proof in this case than the alternative of simply reducing the payments by the amount to have been attributed to interest each month. While we do not reverse a Chancellor’s factual findings unless clearly erroneous, we are free in a de novo review to alter the result, Winn v. Chateau Cantrell Apartment Co., 304 Ark. 146, 801 S.W.2d 261 (1990), and we do so here. The case is remanded for orders consistent with this opinion.

Reversed and remanded.

Glaze and Corbin, JJ., dissent.

Donald L. Corbin, Justice,

dissenting. I dissent.

I agree with the majority’s posture in finding error in failure of the chancellor to award the Lotzes twice the amount of all interest which had been paid on the note. I agree with the chancellor’s voiding of all remaining interest. However, I disagree with the majority’s reversal of the chancellor’s order requiring the Lotzes to continue making monthly payments of $400.00 per month.

The majority reasons that if the payments of $400.00 per month are left intact, the contract will have been altered because part of each payment that would have been applied to interest would now be applied to principal, resulting in the termination of the contract sooner than contemplated. Thus, says the majority, this would give the Cromers the benefit of the use of the Lotzes’ money earlier than if the payments were reduced. In my view, the majority most certainly has altered the parties’ contract by modifying the chancellor’s order as it has today.

The Lotzes agreed to repay the loan at $400.00 per month. This is what they contracted to do and this scheme should be continued. Forgotten is the fact that the Cromers financed the purchase of real property that the Lotzes obviously wanted and are presumably now enjoying.

A chancellor may fashion any remedy that is reasonable and justified by the proof. Whitten Dev., Inc. v. Agee, 256 Ark. 968, 511 S.W.2d 466 (1974). I fail to see anything unreasonable in keeping the contracted monthly payment of $400.00 per month intact. The payment of $400.00 per month was the axiom of the overall agreement. How the $400.00 per month was to be applied to interest and principal was secondary to the agreement. I see more of a practical problem in following the majority’s approach. It will entail forcing each party to an amortization schedule in order to comply with the ordered repayment schedule. The payment will never be the same from month to month during the life of the note. Thus, we are setting in motion a contract change each month. Here, we have superimposed our judgment over that of the chancellor — why have him if we are going to be the decision-maker? The majority has confused the usual role of chancery and appellate courts. It has consistently been our rule that appellate courts defer to the superior position of the chancellor in assessing the evidence presented to him. See Hawn v. Hawn, 8 Ark. App. 69, 648 S.W.2d 819 (1983) (Cracraft, J., dissenting). I cannot in good conscience say that this chancellor was clearly erroneous in his findings of fact nor was his methodology of repayment unreasonable.

Glaze, J., joins in this dissent.

Tom Glaze, Justice,

dissenting. 1 join in Justice Corbin’s dissent. In addition, I wish to point out that, in deciding this case, the majority opinion appears to adhere to the rule that a chancellor may fashion any remedy that is reasonable and justified by the proof, Smith v. Eastgate Prop., Inc., 312 Ark. 355, 849 S.W.2d 504 (1993), Chambers v. Manning, 315 Ark. 369, 868 S.W.2d 64 (1993), Whitten Dev., Inc. v. Agee, 256 Ark. 968, 511 S.W.2d 466 (1974), but it then seems to abandon application of the rule in midstream. Here, the chancellor properly determined that the Cromers charged a usurious rate on the Lotz note. In fashioning a remedy to pay the remaining lawful amount still owed as principal, the chancellor cancelled the remaining interest due on the note, and determined the parties’ agreed monthly payments of $400 should continue to be applied only in reduction of the principal until that amount is paid in full. In sum, the chancellor believed the parties’ contractual monthly payments of $400 were fair, so long as those payments were credited solely to the principal amount still lawfully due. Such payments would continue the same monthly amount which would terminate the parties’ debtor/creditor relationship at an earlier date than previously called for under the original note. The chancellor’s decision makes sense as is adequately spelled out in Justice Corbin’s dissenting opinion.

While the majority opinion seems to acknowledge the chancellor had broad power and discretion to act in fashioning a remedy in this cause, the majority court simply takes upon itself to come up with its own solution on appeal — an approach appellate courts are generally loath to do. Candidly, the trial court’s and the majority court’s decisions both appear reasonable under the proof in this case, but it is the trial court’s superior position that this court normally recognizes in these circumstances. In my view, we should affirm the trial court’s ruling, since the result it proposes is a reasonable one in light of the facts and law in this case.

In proceeding to create its own solution, the majority court, citing Winn v. Chateau Cantrell Apartment Co., 304 Ark. 146, 801 S.W.2d 261 (1990), quotes from the rule in Ferguson v. Green, 266 Ark. 556, 587 S.W.2d 18 (1979), that, in a de novo review, this court is free to reach a different result required by law. Here, no law requires the result proposed and adopted by the majority opinion. The Ferguson rule simply is inapplicable here. Again, the chancellor very logically and reasonably ordered the legally valid $400 monthly payments be continued by the Lotzes until the remaining principal indebtedness is liquidated. Being quite reasonable under the circumstances, the court should affirm the chancellor’s decision.