author: David Newbern, Justice. W.H. “Dub” Arnold, Chief Justice,

text:
    Evote HUMPHREY v. STATE of Arkansas
    CR 97-525
    966 S.W.2d 213
    Supreme Court of Arkansas
    Opinion delivered March 26, 1998
    [Petition for rehearing denied April 30, 1998.]

      Edwin A. Keaton, for appellant.

      Winston Bryant, Att’y Gen., by: Sandy Moll, Asst. Att’y Gen., for appellee.

       Arnold, C.J., and Glaze, J., would grant.

   David Newbern, Justice.

Evote Humphrey was convicted of capital murder for shooting Tyrone Cook. He was sentenced to Hfe imprisonment without parole. Mr. Humphrey’s sole point on appeal is that the Trial Court erred in refusing to instruct the jury on justification. We agree with Mr. Humphrey that the Trial Court’s failure to give that instruction was error; thus we reverse and remand.

Mr. Humphrey gave the following testimony. He met Tyrone Cook in 1993, and they occasionally engaged in recreational activities together in Stamps, which was their home town. In 1994, Mr. Cook had an altercation with Meiko McKenzie while others, including Mr. Humphrey, were present. Mr. Cook was shot in the thigh, and he thought that Mr. Humphrey had shot him. Shordy thereafter, Mr. Humphrey, who was with Vernis MitcheE, saw Mr. Cook, who was with Dyran Easter, using a crutch and holding a pistol. They walked past each other. Mr. Cook turned around and accused Mr. Humphrey of shooting him. Mr. Cook then began shooting at Mr. Humphrey who began running away from him down the street. Horace Lowe, Lacedra Featherston, and two others saw Mr. Humphrey and Mr. Mitchell as they ran.

Mr. Humphrey moved from Stamps to Detroit, Michigan, for a time but returned to Stamps in early April 1995. He observed Mr. Cook drive past his house. He again saw Mr. Cook approximately a week before the April 21, 1995 shooting. Mr. Humphrey and Corey Cheatam were walking down the street when they saw Mr. Cook driving his mother’s car. As they passed by the car, Mr. Cook glanced at them and then he quickly drove off and turned the corner. As Mr. Cook’s car turned the corner, the trunk opened, and Mr. Cook jumped out. Because Mr. Humphrey believed that Mr. Cook was about to retrieve a gun from the trunk and shoot him, he and Mr. Cheatam ran away. On that day, Mr. Humphrey had with him a pistol he had obtained in Detroit for his protection.

Days later, Mr. Humphrey was standing with several other people, including Dyran Easter, when Mr. Cook drove up in Mr. Cook’s mother’s car. Mr. Cook asked Mr. Easter if he had seen “him” several times and then he drove off. Mr. Humphrey assumed that Mr. Cook had seen him because he was standing near the car, and Mr. Cook looked in his direction. Mr. Humphrey also had his pistol with him that day.

On April 21, 1995, Mr. Humphrey was at his mother’s house with Patrick Stevens and Lamont Reynolds. Mr. Humphrey decided to go to the “dairy” to get something to eat. As they walked, the subject of Mr. Cook did not arise. At some point along the way, Mr. Humphrey saw Mr. Cook who was with James “Bo” Mack on the opposite side of the street. Mr. Cook was wearing a “big” coat even though it was warm outside. When Mr. Humphrey saw Mr. Cook, he became nervous and worried that Mr. Cook was going to shoot him because of the previous encounters, including the one in which Mr. Cook had shot at him. Mr. Humphrey did not see Mr. Cook with a gun, but he thought that he was armed. Mr. Humphrey did not turn around and walk away, as he was afraid to turn his back to Mr. Cook because of the incident in which Mr. Cook shot at him. As Mr. Humphrey walked past Mr. Cook, he watched him to be certain that Mr. Cook did not pull out a gun. Mr. Cook was also watching Mr. Humphrey. As they passed each other, Mr. Cook asked Mr. Humphrey if he had a problem with him.

Each turned around to face the other. Mr. Cook became angry and asked Mr. Humphrey why he was looking at him. When Mr. Cook reached for something which Mr. Humphrey believed to be a gun, Mr. Humphrey began shooting at him. Mr. Humphrey continued firing his gun, he testified, because Mr. Cook seemed to continue to come at him while reaching for something. He had fourteen rounds in the clip and one round in the chamber. Mr. Humphrey was afraid of Mr. Cook and believed that if he had not shot Mr. Cook, Mr. Cook would have shot him.

Mr. Humphrey’s testimony regarding the incidents with Mr. Cook prior to the shooting were corroborated by the testimony of several witnesses. Two witnesses testified as to the incident in which Mr. Cook shot at Mr. Humphrey. Horace Lowe testified that, in the fall of 1994, he walked outside his house and heard a gun shot. He then saw Mr. Humphrey and another young man running. He assumed that the shooter was going to shoot at them again because they were ducking and swerving as they ran. He testified that neither of the two men that ran past his house was carrying a gun.

Lacedra Featherston testified that she saw Mr. Cook, who was using crutches and carrying a pistol, and Dyran Easter walking in front of her home in 1994. Mr. Humphrey and Vernis Mitchell were walking from Mr. Humphrey’s home and were further down the street. Mr. Cook, who was standing in front of her house, asked Mr. Humphrey, who was standing down the street, why he shot him. She further testified that she could not hear Mr. Humphrey’s response, but that Mr. Cook then pointed his gun at him and said that he was going to kill him. She stated that Mr. Cook then began shooting at Mr. Humphrey, and Mr. Humphrey ran away. She testified that several shots hit a stop sign as Mr. Humphrey ran down the road, that a shot hit the side of a building when Mr. Humphrey ran behind the budding, and that Mr. Cook fired at least five or six shots. She stated that Mr. Mitchell did not run away because Mr. Cook was only shooting at Mr. Humphrey.

Corey Cheatham corroborated Mr. Humphrey’s testimony regarding the incident in which Mr. Cook allegedly opened his trunk to get what Mr. Humphrey believed was a gun. He testified that Mr. Cook shut the trunk and got back in the car when they ran away.

Zenolia Hilliard, a rebuttal witness for the State, testified that Mr. Cook was her nephew. She stated that she did not remember him getting shot in 1994 or being on crutches, and she would have known if he had gotten shot. Ms. Hilliard, who lives in Pine Bluff, also stated that if Mr. Cook had seen a doctor or stayed in the hospital, she would have been the one to pay the bill.

Several witnesses of the April 21 shooting testified for the State. There is testimony that Mr. Cook had a gun in his possession several minutes before the confrontation began between him and Mr. Humphrey. There is also testimony that Mr. Cook seemed to be reaching for a gun before Mr. Humphrey shot him and that he did not fall after Mr. Humphrey fired the first shot at him.

Monroe Moore testified that on the night of April 21, as he stopped his van at his brother-in-law’s house, he saw Mr. Cook and another person shoving each other. He did not see Mr. Cook with a gun, and Mr. Humphrey was the only person that he saw holding a gun. He did not see whether Mr. Cook reached to his pockets or his pants for a gun, and he did not see Mr. Humphrey reach for his gun. He stated that after Mr. Humphrey shot Mr. Cook one time, Mr. Cook fell to the ground and Mr. Humphrey kept shooting. After the first shot, Mr. Cook attempted to get- up and was holding his stomach but that after Mr. Humphrey shot at him four or five times, Mr. Cook stopped moving. Mr. Moore testified that Mr. Humphrey hesitated after the fourth shot and then started shooting again so that Mr. Moore believed that Mr. Humphrey was putting another clip in the gun. Mr. Moore read from an earlier statement that he gave in which he said that after the first shot, Mr. Humphrey said, “I told you mother fucker, I was not playing this time.” Mr. Moore stated that after the shooting, Mr. Humphrey ran away.

Lamont Reynolds testified that on April 21, he and Patrick Stevens were walking with Mr. Humphrey to get something to eat when they saw Mr. Cook. James “Bo” Mack and Dyran Easter were with Mr. Cook. It was a hot day, and Mr. Cook was wearing a coat. He testified that Mr. Cook asked Mr. Humphrey if he had “some beef” with him, and that they began arguing. Mr. Cook began pushing Mr. Humphrey. Mr. Cook then reached for something at his waist under his coat as if he had a gun, but he never saw anything that resembled a gun. He testified that then Mr. Humphrey shot at Mr. Cook fifteen or sixteen times from five to ten feet away, and that he did not remember Mr. Humphrey stopping shooting and then beginning again. He stated that Mr. Humphrey was the only person doing the shooting. Mr. Cook fell after about the fourth shot, and Mr. Humphrey kept shooting after Mr. Cook was lying on the pavement. He testified that Mr. Humphrey was never in close proximity to the body while he was shooting, and that he did not walk around Mr. Cook as he shot at him. After the shooting was over, he saw Mr. Mack walk up to Mr. Cook’s body, take something from the body, and put it in his pants. He left the area after the shooting.

Patrick Stevens, Mr. Humphrey’s uncle, testified that he was visiting Mr. Humphrey at his house when Mr. Reynolds came over. He stated that he told them that he was going to take a walk across the tracks, and that Mr. Humphrey and Mr. Reynolds went with him. They were walking down the street when they saw Mr. Cook, Dyran Easter, and James “Bo” Mack walking toward them on the opposite side of the street. While Mr. Cook was walking down the street in their direction, Mr. Cook’s mother stopped her car to talk to Mr. Cook. She seemed to ask him something, and he pulled his shirt up. She then drove off.

Mr. Stevens stated that about twenty to thirty seconds later, the confrontation between Mr. Cook and Mr. Humphrey began. His testimony as to the subsequent events, which is somewhat confusing, was abstracted as follows:

[Tyrone] asked Evote did he have a problem with him and Evote told him no, he reached down there and by that time there just heard some shooting going on. When I say reach down there I’m talking about Tyrone. He was like walking down the street then him and Evote he like flinched right here, (Indicating and demonstrating to the jury) he put his hands inside his pants like something like right there (Indicating) but he had on like a coat. I could see his hand his hand went inside his pants like something like something like that. You know I couldn’t you know as he was walking down the street hollering. After he said something to him Evote started shooting.

He stated that he did not see Mr. Humphrey walking around Mr. Cook as he shot at him. Once Mr. Humphrey began shooting, he did not stop and he did not change clips. He testified that after the shooting, Mr. Mack took something from the body of Mr. Cook and told him that it was a pager; however, he did not see what the item was.

Alicia Rodgers, a student nurse, testified that after the shooting, she checked Mr. Cook’s pulse and raised his shirt to see if he had a heartbeat. She stated that she did not see a pager or a gun.

James “Bo” Mack testified that on April 21, Mr. Cook gave him a gun a couple of minutes before Mr. Cook’s mother, who was driving down the street, stopped and asked him if he had a gun with him; however, Mr. Mack admitted that he told the police that he had never seen Mr. Cook with a gun. He testified that Mr. Cook opened up his jacket to show his mother that he did not have a gun. He stated that several minutes after Mr. Cook’s mother asked him about the gun, the confrontation between Mr. Cook and Mr. Humphrey occurred. He testified that Mr. Cook did not have the pistol with him at the time that he was shot.

Mr. Mack testified that he and Mr. Cook met Mr. Humphrey and his friends on the street. He stated that Dyran Easter was not with him and Mr. Cook, but that he was standing nearby. He heard the first gunshot before he saw anyone with a gun, and that he then saw Mr. Humphrey as he was shooting at Mr. Cook. He stated that he saw Mr. Humphrey shooting Mr. Cook after he fell to the ground. He stated that the shots were fired quickly and that he was not certain if the shots stopped before fourteen rounds had been discharged. He testified that they did not say anything to each other or push each other prior to the shooting. Mr. Mack testified that after the shooting, he went to his sister’s house, and then he came back to the scene. He testified that he removed the pager from the side of Mr. Cook’s jeans pocket after the shooting because it was his. He offered contradicting testimony as to whether he took the pager from Mr. Cook’s body before or after he went to his sister’s house. He stated that he did not take a gun from Mr. Cook’s body after the shooting. He stated that after the shooting, Dyran Easter asked him for the gun that Mr. Cook had given him prior to the shooting, and that he gave it to Mr. Easter.

Several police officers also testified. There was some evidence that Mr. Humphrey may have walked around Mr. Cook’s body as he fired some of the shots. There was also some evidence that at least three shots were fired at close range which can be from one foot to ten feet. There was evidence that Mr. Cook was shot five times in the head and neck from above while he was lying in the street. One police officer testified that fourteen nine millimeter spent cartridges were found at the scene.

Peter Briggs, Chief Deputy and Criminal Investigator in Lafayette County, testified that Mr. Humphrey took investigators to a location where they found the nine-millimeter Smith and Wesson pistol that was used in the shooting. He stated that Mr. Humphrey told the investigators that he used the gun in the shooting. There was a fifteen round clip in the weapon and one five round in the barrel. He also stated that none of the evidence supports Mr. Moore’s statement that there was a second clip.

Deputy Briggs testified that when he interviewed Lamont Reynolds and Patrick Stevens on either April 21 or 22, 1995, neither of them said that Mr. Cook tried to reach in his waist band for a weapon, and only one of them said that it looked as if Mr. Cook were reaching for something. He also testified, however, that several people told him that it looked as if Tyrone Cook had a gun. He also testified that the witnesses did not see anything that resembled a gun, and that nothing had surfaced in the investigation that led him to believe that Tyrone Cook had a gun in his possession at the time of the shooting.

Gary Lawrence, an employee at the State Crime Lab in the trace evidence section, testified as an expert on gunshot residue. Based on testing of Mr. Cook’s hands, Mr. Lawrence testified that Mr. Cook either fired a gun or his hands were in close proximity of the firearm. He stated that, based on the extraordinary high levels of gunshot residue on the hands, he concluded that the residues were more consistent with the hands being in front of the muzzle end of the firearm than from having discharged a firearm. He also stated that Mr. Cook’s hands had to be exposed to have that level of residue.

Dr. Frank Peretti, a forensic pathologist and medical examiner for the State of Arkansas, did an autopsy on the body of Tyrone Cook. He testified that Mr. Cook sustained fourteen gunshot wounds. Seven gunshot wounds were to the right side of the head, and two gunshot wounds were to the right side of the neck. He stated that any one of the seven gunshot wounds to the head would have been fatal, and any one of the two gunshot wounds to the neck would have been fatal. There were two gunshot wounds to the chest, one of which was situated on top of the right shoulder. The shoulder wound was superficial, but the other chest wound would have been fatal. There was a gunshot wound to the abdomen on the left lower quadrant which only involved fatty tissue. There was also a fatal gunshot wound on the left side of the abdomen. There was a wound in the right buttock that would not have been fatal. He testified that, all wounds, even the superficial ones, contributed to death by blood loss. Mr. Cook died of the injuries to the skull and brain and the left side of the chest. He also stated that Mr. Cook bled to death in his chest and abdominal cavities. The only entrance wound to the back of Mr. Cook’s body was the wound on his right buttock. He stated that it is very difficult to determine a sequence of shots in a case like this, and that he was unable to determine where a person receiving such wounds was shot first. The superficial wounds are not incapacitating, and one could probably get up and move around. The head wounds could result in some twitching and jerking of the extremities, but the recipient could not get up and walk around. The neck wound resulted in incapacity, but not immediately. The chest wound would cause rapid bleeding so that “you wouldn’t be able to do much with that injury either.” He stated that Mr. Cook might have been able to get up and walk around with the abdominal injury alone.

This extensive recitation of the testimony given in this case shows that the primary, if not the only, issue addressed by both the defendant’s and the State’s evidence was whether Mr. Humphrey shot Mr. Cook with justification. At the close of the evidence, defense counsel proffered a written instruction on justification to be given to the jury. The Trial Court refused to give the instruction.

Arkansas Code Ann. § 5-2-607 (Repl. 1997) provides, in part, as follows:

(a) A person is justified in using deadly physical force upon another person if he reasonably believes that the other person is:
(1) Committing or about to commit a felony involving force or violence;
(2) Using or about to use unlawful deadly physical force; or
(3) [Added in 1997, and thus not included here.] . . .
(b) A person may not use deadly physical force in self-defense if he knows that he can avoid the necessity of using that force with complete safety:
(1) By retreating, except that a person is not required to retreat if he is in his dwelling and was not the original aggressor, or if he is a law enforcement officer or a person assisting at the direction of a law enforcement officer; or
(2) By surrendering possession of property to a person claiming a lawful right thereto. [Emphasis supplied.]

We have held that a condition precedent to a plea of self-defense is an assault upon the defendant “of such a character that it is with murderous intent, or places the defendant in fear of his life, or great bodily harm.” Heinze v. State, 309 Ark. 162, 827 S.W.2d 658 (1992) (citing Girtman v. State, 285 Ark. 13, 684 S.W.2d 806 (1985)). A critical issue is the reasonableness of the appellant’s apprehension that he was in danger of losing his life or receiving great bodily injury. Turner v. State, 258 Ark. 425, 527 S.W.2d 580 (1975). To justify the assault, it must have appeared that the circumstances were such as to excite the fears of a reasonable person. Id. A person is not entitled to act upon his belief that he was in danger, unless it is an honest belief, arrived at without fault or carelessness, and acted upon with due circumspection. Id.

Because justification is not an affirmative defense, the State has the burden of negating the defense once it is put in issue. Peals v. State, 266 Ark. 410, 584 S.W.2d 1 (1979). The defense of justification is a matter of intent and a question of fact for the jury. Johnison v. State, 317 Ark. 431, 878 S.W.2d 727 (1994). One who claims self-defense must show not only that the person killed was the aggressor, but that the accused used all reasonable means within his power and consistent with his safety to avoid the killing. Ricketts v. State, 292 Ark. 256, 729 S.W.2d 400 (1987). Evidence of specific acts of violence that were directed at an accused or were within his knowledge are probative of what the accused reasonably believed at the time and thus relevant to his plea of self-defense. Simpkins v. State, 48 Ark. App. 14, 889 S.W.2d 37 (1994).

The law is clear that a party is entitled to an instruction on a defense if there is sufficient evidence to raise a question of fact or if there is any supporting evidence for the instruction. Yocum v. State, 325 Ark. 180, 925 S.W.2d 385 (1996). Where the defendant has offered sufficient evidence to raise a question of fact concerning a defense, the instructions must fully and fairly declare the law applicable to that defense; however, there is no error in refusing to give a jury instruction where there is no basis in evidence to support the giving of the instruction. Id. See Doles v. State, 275 Ark. 448, 631 S.W.2d 281 (1982) (“Justification is not an affirmative defense which must be pled, but becomes a defense when any evidence tending to support its existence is offered to support it. [Emphasis supplied.]”).

The dissent’s description of Mr. Cook as an “unarmed man” is a factual determination that must be made by a jury. That description, as well as the dissent’s reference to evidence that Mr. Cook was not reaching for his gun and that Mr. Humphrey did not use all reasonable means within his power and consistent with bis safety to avoid killing Mr. Cook, strongly suggests that the dissenters have overlooked the standard for determining when a justification instruction must be given. Our role is not to weigh the evidence to determine if the justification instruction should have been given. Instead, the standard requires that we limit our consideration to whether there is any evidence tending to support the existence of a defense. If there is such evidence, then the justification instruction must be submitted to the jury so that it can make a factual determination as to whether the charged conduct was committed in self-defense.

Based on the testimony of Mr. Humphrey as well as the testimony of eyewitnesses, there is clearly some evidence that Mr. Humphrey reasonably believed that Mr. Cook was about to shoot him when he fired at Mr. Cook. There is evidence to support a finding that Mr. Cook shot at Mr. Humphrey on a prior occasion and had acted menacingly toward him on other occasions. There is also evidence that Mr. Cook had a gun in his possession minutes before he encountered Mr. Humphrey. Mr. Cook was wearing a large, black coat on a warm day. Mr. Humphrey as well as other witnesses testified that prior to the shooting, Mr. Cook looked as if he were reaching for a gun in his waistband. Additionally, the investigator testified that other witnesses to the charged crime told him that Mr. Cook looked as if he were reaching for a gun. We recognize that a gun was not found on Mr. Cook’s body after the shooting. It is, however, undisputed that Mr. Mack removed something from Mr. Cook’s waistband after the shooting and that he was in possession of Mr. Cook’s gun after the shooting. Mr. Mack testified that Mr. Cook gave him the gun prior to the shooting and that the item that he retrieved from Mr. Cook’s body was a beeper; however, Mr. Mack initially told police that he had never seen Mr. Cook with a gun, and other witnesses testified that they did not see what the retrieved item was. Therefore, there is at least some evidence that Mr. Cook was reaching for a gun in his waistband when Mr. Humphrey shot him, and that Mr. Mack retrieved the gun from Mr. Cook’s body after the shooting.

The State argues that the Trial Court correcdy withheld the instruction because Mr. Humphrey did not use all reasonable means within his power and consistent with his safety to avoid killing Mr. Cook because Mr. Humphrey could have turned around when he saw Mr. Cook walking down the street toward him. To the contrary, Mr. Humphrey testified that he was afraid to turn his back to Mr. Cook and walk away because he believed that Mr. Cook would have shot him if he had done so based on the prior incident in which Mr. Cook fired at Mr. Humphrey as he ran from Mr. Cook. There clearly was evidence tending to show that, after the confrontation began, Mr. Humphrey did not know that he could retreat with complete safety because he believed that Mr. Cook was reaching for his gun and was going to shoot at him as he had done in the past. The reasonableness of Mr. Humphrey’s belief is supported by the testimony of eyewitnesses who stated that it looked as if Mr. Cook were reaching for a gun as well as the testimony of Mr. Cook’s friend, James Mack, that several minutes before the confrontation began, Mr. Cook was in possession of a gun.

Arkansas Code Ann. § 5-2-607(b) only requires retreat if a person knows that avoidance of the use of deadly physical force can be accomplished with “complete safety.” Clearly, based on Mr. Humphrey’s experience with Mr. Cook, there is some evidence that Mr. Humphrey did not know that he could retreat with complete safety either when he initially saw Mr. Cook or when the confrontation began.

The State also argues that there was no evidence of self-defense because the force was excessive. In McCarley v. State, 257 Ark. 119, 514 S.W.2d 391 (1974), we held that the Trial Court erred in admitting evidence of specific wrongful acts allegedly done by the appellant prior to the incident for which he was tried. In determining whether the error was prejudicial we considered whether other, uncontroverted testimony proved McCarley guilty. One of the issues was self-defense.

Mr. McCarley had testified that the victim was reputed to be a bully and always armed. The State asserted that the theory of self-defense was “merely colorable” because the appellant never saw a gun during the encounter and because any defense of his own person was abandoned when, after having fired at and shot the deceased, the appellant struck him twice with the butt of a rifle and twice again fired at deceased from behind a tree at the scene. We held that we could not “say with absolute assurance, when all inferences were drawn in favor of McCarley and the situation viewed as it appeared to [him], acting as a reasonable person, his plea of self-defense was totally foreclosed as a matter of law.” McCarley v. State, 257 Ark. at 124, 514 S.W.2d at 393.

In People v. Hill, 642 N.Y.S.2d 222 (A.D. 1 Dept. 1996), the issue was whether a trial court’s refusal to instruct the jury as to justifiable homicide was manifest when the People argued that the autopsy testimony of the medical examiner noted six shots to the decedent’s head. The court, rejecting the People’s argument, stated:

This contention ignores controlling precedent that when evidence is proffered in support of the defense, “the defendant is entitled to the most favorable view of [that] evidence, a standard which was met in the record before us. Even if the jury were to find that defendant employed excessive force after gaining some control of the gun and repelling the decedent’s attack, the People still had the burden of establishing that it was the excessive portion of the force that caused the death. No such showing was made here.

People v. Hill, 642 N.Y.S.2d at 223 (citations omitted).

The State has the burden of establishing that any excessive portion of the force used by Mr. Humphrey, as opposed to the alleged initial self-defense response, caused Mr. Cook’s death. Although there is evidence that Mr. Humphrey continued to fire at Mr. Cook when arguably any danger to Mr. Humphrey had passed, there is also evidence that Mr. Cook sustained at least one fatal shot prior to the alleged use of excessive force such that any use of excessive force would not be relevant.

The State quotes Hughes v. State, 260 Ark. 399-A, 540 S.W.2d 592 (1976) in which we said: “Needless to say, one who engages in an argument with another person is not entitled to kill his adversary merely because he thinks him to have a gun.” The testimony in the Hughes case was only that the appellant, in an out-of-court statement, told witnesses that “he thought [the victim] had a gun.” There is no indication in the Hughes case that there was any testimony that the appellant believed that the victim was reaching for a weapon when he shot him. That contrasts markedly with the testimony given here by Mr. Humphrey and others that it looked like Mr. Cook was reaching for a weapon. Additionally, unlike the evidence in this case, there is no reference to a prior history of life-threatening violence on the part of the victim toward the appellant in the Hughes case.

The State also compares the facts in this case to those in Burton v. State, 254 Ark. 673, 495 S.W.2d 841 (1973). In the Burton case, this Court, affirming the voluntary manslaughter conviction, stated that if the jury believed that the appellant armed himself and went to a bar in anticipation that the victim would be there and would attack him, or by acts and demonstrations provoked an attack upon himself by the victim, with the intent of killing the victim, or that the appellant voluntarily entered into a contest or duel with the victim, the appellant would be guilty of first degree murder. Burton v. State, 254 Ark. at 678, 495 S .W.2d at 844. We said that if those were the circumstances, the homicide would not be justified in self-defense unless the appellant had done everything within his power consistent with his safety to avoid the danger and avert the necessity of the killing. Id.

The State argues that the facts in the Burton case are similar to the facts in this case because Mr. Humphrey did not report the alleged prior incidents of violence by Mr. Cook. He instead carried a loaded gun when he did not believe that anyone, other than the victim, posed a threat to him. Mr. Humphrey also testified that he was carrying the gun for his protection “against no particular person.” This case is distinguishable from the Burton case because there is no evidence that Mr. Humphrey walked down the streets of Stamps in anticipation that he would see Mr. Cook so that he could kill him. Even after having been fired upon by Mr. Cook, Mr. Humphrey had foregone several opportunities to shoot Mr. Cook prior to the ultimate confrontation.

Given the conflicting evidence on justification and the fact that the State had the burden of showing that it was the alleged excessive force, rather than the initial response, that resulted in the death of the victim, we hold it was prejudicial error to have refused the instruction on justification.

Reversed and remanded.

Arnold, C.J., and Glaze and Thornton, JJ., dissent.

W.H. “Dub” Arnold, Chief Justice,

dissenting. Evote Humphrey shot an unarmed man to death on a city street, shooting him fourteen times in the head, neck, chest, abdomen, and buttocks, and the majority believes he is entitled to a jury instruction on justification as a defense. Humphrey was charged with and convicted of the capital murder of Tyrone Cook and sentenced by a jury to life imprisonment without parole.

Most importantly, the forensic pathology and trace evidence dictate against a justification instruction. Dr. Frank Peretti, the forensic pathologist and medical examiner for the State of Arkansas, testified that Cook sustained a total of fourteen gunshot wounds: seven right-side head wounds; two right-side neck wounds; two chest wounds; one abdominal wound involving fatty tissue; one left-side abdominal wound; and one right buttock wound. Any one of the seven head wounds was fatal. Any one of the two neck wounds was fatal. One of the two chest wounds was fatal. One of the two abdominal wounds was fatal. Moreover, all the wounds, even the superficial wounds, contributed to Cook’s death by blood loss. In all, standing alone, eleven of the fourteen gunshot wounds would have been fatal.

Gary Lawrence, an employee of the State Crime Lab Trace Evidence Section, offers the most compelling testimony mandating against the justification instruction. Mr. Lawrence testified that according to the extraordinarily high levels of gunshot residue on the victim’s hands and the fact that the residues were more consistent with Cook’s hands being in front of the muzzle end of a firearm — Cook’s hands had to have been exposed to have that level of residue. Consequently, the physical evidence demonstrates that Humphrey could see Cook’s hands directly in front of him and not, as Humphrey suggests, reaching for a gun. Recall that Cook was unarmed at the time of the shooting but that Humphrey alleges that Cook was continuing to come at him while reaching for something. The forensic evidence suggests a conclusion to the contrary, that Cook’s hands were exposed and visible to Humphrey, negating the basis for a self-defense instruction.

The majority also places great weight on the prior history of Humphrey and his victim, specifically on an incident where Cook shot at Humphrey and Humphrey fled to safety. Again, on the day of the killing, the majority suggests that these two men’s paths somehow unavoidably crossed and resulted in Cook’s death. However, this meeting was not inevitable. In fact, the victim was walking on the opposite side of the city street with “Bo” Mack, while Humphrey walked with friends on the other side of the street. If the prior incident proves anything, it demonstrates Humphrey’s knowledge of the necessity of retreat.

Moreover, during a second encounter with Cook, Cook allegedly drove past Humphrey on the street, stopped his car, and Humphrey believed that Cook was going to retrieve a weapon from his trunk. Humphrey ran away in retreat. I fail to see what distinguishes the fatal incident on April 21, 1995, from either of these prior encounters where Humphrey retreated to safety. In fact, with respect to the first incident, Cook actually had a gun whereas on the day of the fatal shooting Cook was unarmed.

Although Ark. Code Ann. § 5-2-607 (a) (3) would permit Humphrey to use deadly physical force upon Cook if Humphrey reasonably believed that Cook was about to use unlawful deadly physical force, Humphrey was prohibited, pursuant to section 607(b), from using deadly physical force in self-defense if he knew that he could avoid the necessity of using that force with complete safety. Humphrey’s prior encounters with Cook only strengthen Humphrey’s awareness of the advisability and duty to retreat from another meeting.

Additionally, Humphrey was armed in anticipation of a possible conflict, and he voluntarily crossed paths with Cook, rejecting the alternative of retreating from the fatal encounter. See Burton v. State, 254 Ark. 673, 495 S.W.2d 841 (1973). Even after the two men met on the street, Humphrey’s duty to retreat did not diminish. As the majority concedes, Humphrey was bound to do everything in his power, consistent with his safety, to avoid danger and avert the' necessity of killing. Moreover, to assert a claim of self-defense, Humphrey must prove that (1) Cook was the aggressor, and (2) Humphrey used all reasonable means within his power and consistent with his safety to avoid the killing, including retreat, where retreat can safely be effected. Martin v. State, 290 Ark. 293, 718 S.W.2d 938 (1986). Further, there must be some rational basis for submitting a justification instruction to the jury. Where the use of force was avoidable with complete safety, Humphrey is not entitled to a iustification instruction. See id. at 296-97.

Moreover, the eyewitness testimony of Monroe Moore confirms that Humphrey kept shooting at Cook, even after Cook was on the ground. Humphrey shot Cook fourteen times, and no witnesses testified that they saw Cook with a gun during the shooting, and police investigation revealed no such gun. Although the medical examiner could not conclude which gunshot wound Cook first received, eyewitness testimony indicates that it may have been an abdominal wound. Monroe Moore testified that after the first shot, Cook fell to the ground, holding his stomach. In any event, Humphrey’s duty to retreat endured, even after he fired the first gunshot into Cook. Rather than retreat, Humphrey fired again, again, again, again, again, again, again, again, again, again, again, again, and again. The trial court correctly held that there was no rational basis in evidence supporting a justification instruction, and I respectfully dissent.

Glaze and Thornton, JJ., join this dissent.


source: Caselaw Access Project

author: Tom Glaze, Justice.

license: Public Domain

text:
    Russ STOCKTON and Stephanie Stockton v. SENTRY INSURANCE, a Mutual Company, and Curt L. McDuff, Jr.
    97-720
    965 S.W.2d 762
    Supreme Court of Arkansas
    Opinion delivered March 26, 1998

      Matthew Horan, for appellants.

      Cross, Gunter, Witherspoon & Gatchus, P.C., by: M. Stephen Bingham, for appellees.
   Tom Glaze, Justice.

Appellants Russ and Stephanie Stockton filed suit against appellee Sentry Insurance and its agent, Curt L. McDuff, Jr. The Stocktons alleged that Sentry had recruited Russ to be a franchisee to sell and distribute Sentry’s insurance services in Benton County, and in return, he was to receive an income of $50,000.00, an office, a company car, a sales coordinator, and a telephone service. The Stocktons further charged that McDuff had intimidated and harassed them during a three-year period and had reneged on Sentry’s promise of an office, forcing Stephanie Stockton to serve as Russ’s unpaid secretary. Russ Stockton also asserted that Sentry’s and McDuffs actions forced him to resign, and although he had prearranged with Sentry to have his dental work done, Sentry called the dentist’s office and improperly withheld its approval when Russ was actually in the dental chair having his teeth drilled. In their complaint, the Stocktons alleged the following seven separate causes of action against Sentry and McDuff:

(1) fraud in the offer of a franchise to Russ Stockton;

(2) tort of outrage towards both Russ and Stephanie Stockton;

(3) violation of the wage and hour laws as related to Stephanie;

(4) negligence against Russ Stockton;

(5) breach of Russ Stockton’s contract;

(6) tortious interference with Russ Stockton’s contract;

(7) battery in Russ Stockton’s favor as a result of Sentry’s acts in cancelling his dental insurance in “mid-procedure.”

Sentry and McDuff moved to dismiss the Stocktons’ complaint under Ark. R. Civ. P. 12(b)(6), stating the complaint failed to state facts upon which relief could be granted. The Stocktons responded, stating their complaint was sufficient, and the motion to dismiss should be denied. After the respective parties submitted briefs, the trial court entered its order dismissing all of the Stocktons’ complaint, except Stephanie Stockton’s claim for unpaid wages.

After the trial court’s order, dismissing most of the Stocktons’ claims, was entered on January 30, 1997, Sentry and McDuff, a week later, filed an answer and counterclaim. In their answer, Sentry and McDuff primarily denied Stephanie’s remaining claim, but their counterclaim asserted entidement to contribution and indemnity against Russ Stockton, if they were adjudged hable to Stephanie. The Stocktons then moved for the trial court to reconsider its granting of Sentry’s and McDuffs summary-judgment motion. When the trial court faded to rule on their motion, the Stocktons filed their reply to Sentry’s and McDuffs counterclaim, and then filed what they captioned as a “Notice of Dismissal.” No further action was taken by the trial court, Sentry or McDuff, and the Stocktons filed their notice of appeal from the trial court’s January 30, 1997 order. Sentry and McDuff countered, arguing that, because the Stocktons had not complied with Ark. R. Civ. P. 54(b), no final order had been entered from which the Stocktons can appeal. In addition, they submit that, even if there was a final order, the Stocktons’ appeal was filed untimely.

The Stocktons’ appeal is obviously premature, and must be dismissed, since they failed to comply with Rule 54(b). We have repeatedly held that, to be appealable, an order must be final, Ark. R. App. P. — Civil 2, and the finality of a trial court’s order is governed by Rule 54(b), which provides that a trial court may direct entry of a final order or judgment as to fewer than all the parties to a multiparty suit, as long as the court expressly determines, with factual findings, that there is no just reason to delay the appeal. See Dean v. Tallman, 331 Ark. 127, 959 S.W.2d 41 (1998). In the absence of this determination and findings, an order is not final when it adjudicates fewer than all the claims or the rights and liabilities of fewer than all the parties. Id. The underlying policy of this rule is to avoid piecemeal appeals. Id.

In this case, the trial court’s order never mentioned Sentry’s and McDuff's counterclaim, see Williamson v. Misemer, 316 Ark. 192, 871 S.W.2d 396 (1994), but most significant, the Stockton's never properly dismissed Stephanie Stockton’s remaining wage-loss claim, which is still pending. As we previously mentioned, Stephanie Stockton filed a “notice of dismissal,” which she now argues dismissed her remaining claim. However, we have held that a court order is necessary to grant a nonsuit and that the order (judgment or decree) must be entered to be effective. Blaylock v. Shearson Lehman Bros., Inc., 330 Ark. 620, 954 S.W.2d 939 (1997). Here, the record reflects the Stocktons never filed an actual motion to dismiss Stephanie’s claim, nor did they request the trial court to rule on their dismissal request.

In sum, Stephanie Stockton’s wage-loss claim remains pending below, as does the counterclaim of Sentry and McDuff. Because the Stocktons failed to comply with the directives of Rule 54(b) before filing their notice of appeal, we must dismiss without prejudice on jurisdictional grounds.

         A number of additional pleadings were filed related to this cause being temporarily removed to a federal district court, but we need not reference them, since they are not relevant to our decision.

       The trial court granted Sentry and McDuff summary judgment in dismissing six of the Stocktons’ claims, and in doing so relied on several exhibits contained in Sentry’s brief. While the Stocktons offer convincing argument that such exhibits should not have been used by the trial court, we do not reach the merits of the issue, since the case is dismissed because of a lack of jurisdiction.


author: Donald L. Corbin, Justice.

text:
    CITY OF WEST MEMPHIS and Lindsey Fairley, Nolan Dawson, and Tom Graham, In Their Official Capacities as the Crittenden County Board of Election Commissioners v. CITY OF MARION
    97-742
    965 S.W.2d 776
    Supreme Court of Arkansas
    Opinion delivered March 26, 1998

      David C. Peeples, for appellant.

      James C. Hale, III; and Timothy Davis Fox, for appellee/crossappellant.
   Donald L. Corbin, Justice.

Appellant City of West Memphis raises three issues in this appeal arising out of the Crittenden County Circuit Court against Appellee City of Marion. Our jurisdiction of this appeal is pursuant to Ark. Sup. Ct. R. 1-2(a)(6), as it concerns an election and election procedures involving both a voluntary annexation as set forth in Ark. Code Ann. §§ 14-40-601 — 606 (1987), and an involuntary annexation pursuant to Ark. Code Ann. §§ 14-40-301 — 304 (1987). Marion raises one issue on cross-appeal. Due to a flagrantly deficient abstract, we summarily affirm the direct appeal. We further affirm the cross-appeal.

The facts culminating in this appeal began on December 23, 1996, when West Memphis passed Ordinance No. 1760, providing for a special election on February 24, 1997. The purpose of the election was to vote for annexation of 5,700 acres to West Memphis. On December 30, 1996, seven property owners of 2,340 acres within the same 5,700 acres, petitioned the Crittenden County Court for voluntary annexation to Marion. The Crittenden County Court granted the petition for annexation to Marion in an order entered on February 4, 1997. On February 11, 1997, Marion passed Ordinance No. 328, accepting the 2,340 acres. Ordinance No. 328 contained an emergency clause which rendered the Marion annexation effective immediately.

On February 18, 1997, Marion filed a complaint in the Crittenden County Circuit Court, seeking a writ of mandamus against West Memphis and the Crittenden County Board of Election Commissioners to remove the 2,340 acres from the legal description on the special-election ballot. The complaint further sought a declaratory judgment and an injunction to restrain the February 24, 1997 special election. The circuit court conducted a hearing on February 20, 1997, and ultimately denied the writ of mandamus and injunction. The circuit court, however, issued a declaratory judgment, in an order entered on February 20, 1997, and filed on March 14, 1997. Specifically, the circuit court found that the 2,340 acres belonged to Marion, as Ordinance No. 328 became effective on the date it was passed. The circuit court also ruled that the order could only be challenged by an interested party filing a complaint in the circuit court to prevent the annexation. The circuit court determined that the ballots for the February 24, 1997 special election had been printed, and seven voters had already voted. The circuit court further determined that should the election result in a favorable vote for annexation of the 5,700 acres, the 2,340 acres annexed to Marion would not become part of West Memphis. The trial court relied on section 14-40-301, which provides that “[t]he provisions of this sub-chapter shall not be construed to give any municipality the authority to annex any portion of another city or incorporated town.” West Memphis then filed notice of this appeal on April 9, 1997. Marion filed notice of cross-appeal on April 21, 1997.

The standard of review for annexation cases is substantial evidence. Lewis v. City of Bryant, 291 Ark. 566, 726 S.W.2d 672 (1987). Our sole responsibility is to decide whether the circuit court’s findings of fact are clearly erroneous. Id. (citing Holmes v. City of Little Rock, 285 Ark. 296, 686 S.W.2d 425 (1985)). When the appellate court has a firm and definite belief that the trial court made a mistake, it will hold the trial court’s finding as clearly erroneous even if there is evidence to support it. Henry, Walden & Davis v. Goodman, 294 Ark. 25, 741 S.W.2d 233 (1987).

West Memphis raises three points for reversal: (1) the trial court erred in ruling on the action for declaratory judgment after denying the writ of mandamus and injunction; (2) the trial court erred in ruling that the 2,340 acres were annexed to Marion and that West Memphis thus had no authority to annex that property upon approval of the voters; and (3) the trial court erred in determining that the emergency clause to Ordinance No. 328 made the ordinance effective on February 11, 1997, the date of its passage. We do not reach the merits of any of these arguments, as Appellants’ abstract, consisting of only six pages, is flagrantly deficient.

We addressed a similar abstract deficiency in Porter v. Porter, 329 Ark. 42, 945 S.W.2d 376 (1997), commenting:

It is well established that the abstract is the record for purposes of appeal. Allen v. Routon, 57 Ark. App. 137, 943 S.W.2d 605 (1997). We have recently held that section [4-2](a)(6) of the Arkansas Supreme Court Rules is violated when there are no references to the pages of an abstract and only transcript citations were supplied to the court. Sanders v. State, 317 Ark. 328, 878 S.W.2d 391 (1994). A transcript will not be examined to reverse a lower court. Oliver v. Washington County Arkansas, 328 Ark. 61, 940 S.W.2d 884 (1997). The burden is clearly placed on the appealing party to provide both a record and an abstract sufficient for appellate review. Cosgrove v. City of West Memphis, 327 Ark. 324, 938 S.W.2d 827 (1997); Lee v. Villines, 328 Ark. 189, 942 S.W.2d 844 (1997) .... This court will not entertain an argument when it cannot be determined from the abstract what arguments were made to the lower court. Cosgrove, 327 Ark. at 328, 938 S.W.2d at 830. When previously confronted with an extensive record and numerous volumes, and where the abstract was nine pages and left out relevant information and was hard to understand, this court has refused review. Jewell v. Miller Co. Elec. Comm., 327 Ark. 153, 936 S.W.2d 754 (1997).
Rule 4-2(a)(6) of the Arkansas Supreme Court clearly requires that the abstract should contain “pleadings, proceedings, facts, documents, and other matters in the record as are necessary to an understanding of all questions presented to the Court for decision.” The purpose of an abstract is to give us an understanding of the issues on appeal. McAdams v. Automotive Rentals, Inc., 325 Ark. 332, 924 S.W.2d 464 (1996). We may affirm for noncompliance with the Rule when there is a flagrantly deficient abstract.

Id. at 44-45, 945 S.W.2d at 377. The inherent logic of this rule is that there are seven justices on our court, but only one record. Cosgrove, 327 Ark. 324, 938 S.W.2d 827. Mere references to the transcript scattered in the brief are insufficient. Adams v. State, 276 Ark. 18, 631 S.W.2d 828 (1982).

Here, West Memphis failed to meet its burden of producing a sufficient abstract. West Memphis did not abstract any of the arguments made or testimony given to the trial court. The record in this case consists of two volumes, having a total of 124 pages, and includes six exhibits. The six-page abstract does not give us adequate information with which to decide the complicated issues presented in this appeal. Moreover, the only exhibit abstracted is Ordinance No. 328. The flagrantly deficient abstract bars review on appeal for failure to comply with Ark. Sup. Ct. R. 4-2(a)(6). Selected pleadings occupy most of this minimal abstract. West Memphis made little effort to comply with Rule 4-2(a)(6), which requires a reference to the record with every two pages abstracted. We note that Marion supplemented the abstract of the record in support of its cross-appeal; however, this did not cure the above-noted deficiencies. Accordingly, we summarily affirm all three issues raised on direct appeal.

Cross-Appeal

The sole issue on cross-appeal concerns whether the trial court erred by denying Marion’s requested relief of mandamus to the extent that the special election involved the disputed 2,340 acres. Marion, therefore, would have this court set aside the February 24, 1997 special election.

We recently addressed another election issue in Doty v. Bettis, 329 Ark. 120, 947 S.W.2d 743 (1997):

[I]f the appeal reaches this court after the election has occurred, the only remedy we can provide is to set aside the election results .... In other words, once the votes have been cast, we will not set aside the election unless the procedural errors rendered the result doubtful or prevented the electorate from casting free and intelligent votes.

Id. at 123, 947 S.W.2d at 744 (citations omitted).

Mandamus is properly ordered when there is an established right, and the law does not have a specific remedy with which to enforce that right. Gregg v. Hartwick, 292 Ark. 528, 731 S.W.2d 766 (1987). Although this court has frequently recognized the writ of mandamus as a remedy to remove ineligible candidates on ballot titles, see, e.g., Ivy v. Republican Party, 318 Ark. 50, 883 S.W.2d 805 (1994), we construe the issue raised on cross-appeal as an alternative argument to reversal on direct appeal. Setting the election aside now would not benefit Marion. The circuit court considered that seven voters had already cast ballots at the time of the February 20, 1997 hearing and prudently declined to issue the writ of mandamus. The declaratory judgment effectively removed the disputed 2,340 acres from the West Memphis ballot, thus Marion has already received the relief it now requests on cross-appeal. Marion does not allege that the failure to issue the writ made the result of the election doubtful or prevented the voters from free and intelligent votes.

For the reasons above, we affirm the circuit court’s judgment in its entirety.

Affirmed.


author: Annabelle Clinton Imber, Justice.

text:
    WESTERN WORLD INSURANCE COMPANY, Inc. v. Charles BRANCH and East Arkansas Youth Services, Inc.
    97-747
    965 S.W.2d 760
    Supreme Court of Arkansas
    Opinion delivered March 26, 1998

      Wright, Lindsey & Jennings, by: Patricia A. Sievers and J. Charles Dougherty, for appellant.

      Bill W. Bristow, for appellee Charles Branch.

      William P. Rainey, for appellee East Arkansas Youth Services, Inc.
   Annabelle Clinton Imber, Justice.

The issue in this case is whether a sexual attack that occurred at East Arkansas Youth Services, Incorporated (“Youth Services”), is covered by an insurance policy issued by Western World Insurance Company (“Western World”). The trial court entered a declaratory judgment in favor of Youth Services, and Western World appeals. We reverse.

Youth Services is a temporary residential facility for nonviolent adolescents. Jacqueline Branch Daves was a resident of Youth Services at their facility in Crittenden County when she was allegedly raped by another resident. Ms. Daves and her father, Charles Branch, subsequently filed a lawsuit against Youth Services and its insurance carrier, Western World, alleging that Youth Services’ negligent supervision and deficient safety measures were the proximate cause of the rape.

Youth Services filed a cross-claim asking for a declaratory judgment that Western World was obligated to provide liability coverage and to defend the negligence action pursuant to a general and professional liability insurance policy which was in effect at the time of the alleged rape. In response, Western World claimed that it was exempt from both obligations pursuant to a “Sexual Action Exclusion” provision which provided that:

It is agreed that no coverage exists (and therefore no duty to defend exists) for claims or suits brought against any insured for damages arising from sexual action. Sexual action includes, but is not limited to, any behavior with sexual connotation or purpose — whether performed for sexual gratification, discrimination, intimidation, coercion or other reason.
It is further agreed this exclusion applies even if an alleged cause of the damages was the insured’s negligent hiring, placement, training, supervision, act, error or omission.

On April 15, 1997, the trial court entered declaratory judgment in favor of Youth Services. In its order, the trial court found that the exclusion applied only to sexual acts committed by Youth Services’ employees, and not to sexual acts committed by its residents. Accordingly, the trial court declared that Western World was required to provide liability coverage and defend the negligence action filed by Daves and Branch. From this order, Western World filed a timely notice of appeal.

I. Interpretation of the Exclusion

For its first argument on appeal, Western World contends that the trial court erred when it construed the language of the sexual-action exclusion provision to exclude coverage for sexual acts committed by Youth Services’ employees, but not to exclude coverage for sexual acts committed by its residents. Our law regarding the construction of an insurance contract is well settled. In Southern Farm Bureau Cas. Ins. Co. v. Williams, 260 Ark. 659, 543 S.W.2d 467 (1976), we said that:

The terms of an insurance contract are not to be rewritten under the rule of strict construction against the company issuing it so as to bind the insurer to a risk which is plainly excluded and for which it was not paid.

Thus, if the provision is unambiguous, and only one reasonable interpretation is possible, we will give effect to the plain language of the policy without resorting to the rules of construction. See Unigard Sec. Ins. Co. v. Murphy Oil U.S.A., Inc., 331 Ark. 211, 962 S.W.2d 735 (1998); Smith v. Shelter Mut. Ins. Co., 327 Ark. 208, 937 S.W.2d 180 (1997). If, however, the policy language is ambiguous, and thus susceptible to more than one reasonable interpretation, we will construe the policy liberally in favor of the insured and strictly against the insurer. Unigard, supra; State Farm Fire & Cas. Co. v. Midgett, 319 Ark. 435, 892 S.W.2d 469 (1995); Keller v. Safeco Ins. Co., 317 Ark. 308, 877 S.W.2d 90 (1994). Finally, whether the language of the policy is ambiguous is a question of law to be resolved by the court. Unigard, supra.

We hold that the language of the sexual-action exclusion is unambiguous, and thus we must give effect to its plain meaning without resorting to the rules of construction. The definition of “sexual action” contained in the exclusion is written very broadly to include “any behavior with sexual connotation or purpose.” The exclusion then provides several examples of why this conduct may occur, but specifically says “not limited to” and refers to “other reason[s],” thus indicating that the improper sexual acts may occur for reasons other than those listed in the definition. Moreover, the last sentence broadens the exclusion by clarifying that Western World will also not be liable if Youth Services is sued in a direct action for negligence, or under a theory of imputed negligence such as respondeat superior. For these reasons, we hold that the sexual-action exclusion unambiguously excludes from coverage liability that results from sexual acts committed by Youth Services’ employees or residents. Accordingly, we reverse the trial court’s order of declaratory judgment.

In reaching this conclusion, we are not unmindful of Youth Services’ argument that the exclusion is in conflict with two provisions in the insurance policy. This argument, however, was not raised below nor was it ruled upon by the trial court. Flence, the argument is procedurally barred as it is raised for the first time on appeal. Wilson v. Rebsamen Ins., Inc., 330 Ark. 687, 957 S.W.2d 678 (1997); Slaton v. Slaton, 330 Ark. 287, 956 S.W.2d 150 (1997).

II. Public Policy

The next issue is whether the exclusion is void as a matter of public policy because the phrase “sexual action” is vague and overbroad. It is well settled that an insurer may contract with its insured upon whatever terms the parties agree so long as the terms are not contrary to a statute or public policy. Pardon v. Southern Farm Bureau Cas. Ins., 315 Ark. 537, 868 S.W.2d 468 (1994); Shelter v. Gen. Ins. Co. v. Williams, 315 Ark. 409, 867 S.W.2d 457 (1993); Guaranty Nat'l Ins. v. Denver Roller Inc., 313 Ark. 128, 854 S.W.2d 312 (1993). To determine the public policy of this state, we look to our statutes and constitution, Guaranty Nat’l Ins., supra; Sterling Drug, Inc. v. Oxford, 294 Ark. 239, 743 S.W.2d 380 (1988), because public policy is declared by the General Assembly, and not this court. Davis v. Ross Prod. Co., 322 Ark. 532, 910 S.W.2d 209 (1995); Nabholtz Const. Corp. v. Graham, 319 Ark. 396, 892 S.W.2d 456 (1995).

On appeal, Youth Services has failed to draw our attention to a single statutory or constitutional provision that establishes a public policy prohibiting sexual-action exclusion provisions. Instead, Western World has cited cases from other jurisdictions that purportedly stand for the proposition that such exclusions do not violate public policy. In Smith v. Shelter Mutual Insurance Co., 327 Ark. 208, 937 S.W.2d 180 (1997), we refused to consider cases from other jurisdictions once we concluded that the insurance provision in question did not violate the public policy of this state. Youth Services has simply failed to demonstrate how the sexual-action provision violates Arkansas public policy. Accordingly, we find no merit to this argument.

Reversed.


author: Per Curiam.

text:
    Ronita Faith BELL v. STATE of Arkansas
    CR 97-1004
    961 S.W.2d 36
    Supreme Court of Arkansas
    Opinion delivered March 26, 1998

      Steve Kirk, for appellant.
    No response.
   Per Curiam.

Appellant Ronita Faith Bell, by her attorney, Steve Kirk, has two motions pending for an extension of time to file her brief. Prior to these motions, BeE through counsel, Steve Kirk, filed a motion for an extension to file her brief on October 7, 1997, and it was granted untE November 7, 1997. She then asked for a second extension on November 6, 1997, and it was granted untE December 22, 1997. She next moved for a third extension of time and to supplement the record on December 22, 1997, and this was granted on January 15, 1998. This was described as a “final extension.” We stated that the brief would be due 14 days after the supplement to the transcript was filed. The supplement was filed on February 13, 1998, which made BeE’s brief due on February 27, 1998.

The first of the two current motions for an extension was filed on February 27, 1998, and it asked for an extension untE March 6, 1998. The second motion was filed on March 6, 1998, and requests an extension untE March 16, 1998. Each motion asks that it be deemed a “final extension.” BeE’s brief was tendered to this court on March 16, 1998. We accept the brief for filing.

We do not grant extensions as a matter of course after a final extension has been given. The final extension occurred on January 15, 1998, with the brief due on February 27, 1998.

Attorney Steve Kirk is ordered to appear at 9:00 a.m. on Thursday, AprE 9, 1998, to show cause why he should not be held in contempt for faEing to file appeEant’s brief in a timely manner.


text:
    Perry GUYNN v. STATE of Arkansas
    CR 98-278
    961 S.W.2d 35
    Supreme Court of Arkansas
    Opinion delivered March 26, 1998

      Jack R. Kearney, for appellant.
    No response.
   Per Curiam.

Appellant was convicted on August 13, 1997, of possession of a controlled substance with intent to deliver, possession of drug paraphernalia, and manufacture of a controlled substance. Fie filed a notice of appeal on September 4, 1997, but the court’s judgment and commitment order was not entered until October 6, 1997. On November 11, 1997, the Pulaski County Circuit Court granted the appellant an extension to file the record on or before March 3, 1998, and the record was tendered on March 2, 1998. Obviously, because the notice of appeal was filed prematurely, any extension to file the record was improper.

The appellant has filed a motion for belated appeal to compel the clerk’s office to accept the record. In his motion, appellant states the reason the record was tendered late is that the “defendant and counsel were unaware that their notice of appeal and designation of record had preceded the filing of the judgment and commitment order.”

This court has held that we will grant a motion for belated appeal when the attorney admits that the notice of appeal was untimely filed due to an error on his part. See In Re: Belated Appeals in Criminal Cases, 265 Ark. 964 (1979) (per curiam). Here, the attorney does not admit fault on his part. We have held that a statement that it was someone else’s fault or no one’s fault will not suffice. Clark v. State, 289 Ark. 382, 711 S.W.2d 162 (1986). Therefore, appellant’s motion must be denied.

The appellant’s attorney shall file within thirty days from the date of this per curiam a motion and affidavit in this case accepting full responsibility for the untimely filing of the notice of appeal. Upon filing same, the motion will be granted and a copy of the opinion will be forwarded to the Committee on Professional Conduct.


text:
    Melvin Kent SHOEMATE v. STATE of Arkansas
    CR 97-1209
    965 S.W.2d 779
    Supreme Court of Arkansas
    Opinion delivered March 26, 1998

      James Steven Dunham, for appellant.
    No response.
   Per Curiam.

On October 9, 1997, appellant, Melvin Kent Shoemate, by his attorney, James Steven Dunham, submitted a motion to file a belated appeal from his rape conviction. Shoe-mate contends that his trial counsel, L. Gray Dellinger, failed to timely file, within thirty days of the.entry of judgment, a notice of appeal from Shoemate’s conviction. In the absence of an affidavit from Mr. Dellinger admitting negligence, we remanded the matter to the trial court for the purpose of settling the record and determining if the appellant had requested that Dellinger file a notice of appeal. On March 5, 1998, the supreme court clerk received a supplemental record on remand, and on March 12, 1998, Shoemate resubmitted his motion for a belated appeal.

After reviewing the evidence, the trial court concluded, in its order settling the record, that Shoemate did not request Dellinger to file a notice of appeal. Specifically, the trial court noted that Shoemate’s and Dellinger’s testimony indicated that they did not have the immediate opportunity to discuss the matter of filing an appeal because it was late in the evening following the jury’s verdict and court’s sentencing, and Shoemate was transported to jail and, then, to the Department of Correction within a week after his sentencing. Subsequently, Dellinger met with Mr. Larry Kissee, another attorney, and with Shoemate’s wife, and Shoemate’s mother to discuss the possibility of Mr. Kissee’s pursuing an appeal. Following that discussion, no decision was reached regarding an appeal.

During a telephone conference on May 19, 1997, Dellinger, Kissee, and the appellant discussed the potential consequences of an appeal, including the possibility of a successful appeal, which could result in a new trial, a conviction, and a possible punishment of forty years to life in prison. Mr. Kissee testified that Shoemate did not want to take the chance of being sentenced to life in prison and that he had no doubt that Shoemate did not want to appeal.

Although Shoemate disputed the testimony regarding his desire to file an appeal, the trial court found Kissee’s and Del-linger’s testimony regarding the telephone conference more credible. Additionally, the trial court acknowledged that, following the telephone conference, Shoemate failed to contact Dellinger by phone or letter prior to the appeal deadline. In light of the trial court’s findings of fact, particularly that the appellant failed to request that his attorney file a notice of appeal on his behalf, we deny the appellant’s motion for a belated appeal.


author: W.H. “Dub” Arnold, Chiefjustice. David Newbern, Justice,

text:
    Pat HAMES and Ben Robinson v. Marybeth CRAVENS
    97-687
    966 S.W.2d 244
    Supreme Court of Arkansas
    Opinion delivered April 9, 1998

      Harrill & Sutter, PLLC, by: L. O’Neal Sutter and Sherri McDonough, for appellants.

      Kemp, Duckett, Spradley & Curry, by: Stephen L. Curry, for appellee.
   W.H. “Dub” Arnold, Chiefjustice.

This is an appeal from the Pulaski County Circuit Court, Second Division, and from an order dismissing the appellants’ complaint for lack of subject-matter jurisdiction. Finding no merit in appellants’ arguments, we affirm.

Appellants, Ben Robinson and Pat Hames, are husband and wife and, respectively, own 1% and 49% of the issued and outstanding common stock of Partners in Rehab, Inc., a closely-held Arkansas corporation. Appellee Marybeth Cravens owns the remaining 50% of the Partners stock. Hames and Cravens are the sole directors of Partners. On May 16, 1996, the appellants filed suit against Cravens in the Pulaski County Circuit Court, alleging fraud and breach of fiduciary duty. Specifically, Robinson and Hames claim that, at the time of Partners’s incorporation, Cravens intended to defraud them of proprietary information they contributed to Partners. Additionally, Robinson and Hames maintain that Cravens violated her fiduciary duty by appropriating the proprietary information for the benefit of Rehab. Plus, Inc., a corporation allegedly organized by Cravens or by members of Cravens’s family and in which Cravens plays some management role. In particular, appellants allege that Cravens solicited contracts with two Partners clients who then terminated contracts with Partners shortly after the incorporation of Rehab Plus.

According to the complaint, Robinson and Hames are personal guarantors of most of Partners’s corporate debt, and Cravens’s actions have altered the value of corporate debts for which the appellants are liable. Notably, at the time of the circuit court hearing, Partners was also the subject of a dissolution proceeding pending in the Pulaski County Circuit Court, styled In re The Judicial Dissolution of Partners in Rehab, Inc., civil docket No. CV-96-6911.

On June 10, 1996, Cravens filed a motion to dismiss the appellants’ complaint pursuant to Ark. R. Civ. P. 12(b)(1) and 12(b)(6), reasoning that the case was actually a derivative action to redress harm to Partners and not to appellants, individually. After a hearing on January 28, 1997 and based upon a reading of the complaint, Judge Chris Piazza agreed that, although the appellants alleged that Cravens harmed them, either individually or through a competitive business, the facts asserted and relief requested, by their very nature, involved the question of whether Partners suffered damages. The circuit court recognized that the allegations in the complaint constituted grounds for a derivative action, which sounds in equity and must be maintained in chancery court. Concluding that the appellants lacked standing to assert their claims individually, Judge Piazza dismissed the complaint pursuant to Rule 12(b)(1) for lack of subject-matter jurisdiction.

In reviewing a trial court’s decision on a motion to dismiss, we treat the facts alleged in the complaint as true and view them in the fight most favorable to the plaintiff. Neal v. Wilson, 316 Ark. 588, 595-96, 873 S.W.2d 552 (1994) (citing Gordon v. Planters & Merchants Bancshares, Inc., 310 Ark. 11, 832 S.W.2d 492 (1992); Battle v. Harris, 298 Ark. 241, 766 S.W.2d 431 (1989)); Mid-South Beverages, Inc., 300 Ark. 204, 205, 778 S.W.2d (1989) (citing Battle, 298 Ark. 241)). Further, we note that a trial judge must look only to the allegations in the complaint to decide a motion to dismiss. Neal, 316 Ark. at 596 (citing Wiseman v. Batchelor, 315 Ark. 85, 864 S.W.2d 248 (1993); Deitsch v. Tillery, 309 Ark. 401, 833 S.W.2d 760 (1992)); Mid-South Beverages, Inc., 300 Ark. at 205 (citing Battle, 298 Ark. 241)).

On appeal, the appellants first query whether they have standing, in their individual capacities, to assert a claim for an injury suffered by Partners and its shareholders. In Arkansas, the well-settled answer is no. As a general rule, a corporation is a distinct entity from its stockholders. Wiseman v. State Bank & Trust, N.S., Inc., 313 Ark. 289, 854 S.W.2d 725 (1993). However, when a shareholder believes that the corporation has been harmed, he may be entitled to bring an action in a derivative suit, in the corporation’s name, to seek redress for that injury. See Taylor v. Terry, 279 Ark. 97, 649 S.W.2d 392 (1983); Ark. R. Civ. P. 23.1; Ark. Code Ann. § 4-26-714 (Repl. 1991). Although the shareholder also may be injured, secondarily, the primary injury is to the corporation, and the shareholder’s cause of action is derivative and not direct. Moreover, in Arkansas, a shareholder’s derivative suit is an equity action maintainable in the chancery court. See Red Bud Realty Co. v. South, 153 Ark. 380, 241 S.W.2d 21 (1922).

In an apposite case, Walker v. Hyde, 303 Ark. 615, 798 S.W.2d 435 (1990), a plaintiff-shareholder sued defendants, also shareholders, for deprivation of majority control and ownership of the corporation, and loss of good will, business enterprise, future gross receipts, and net profits. Additionally, like the case at bar, the plaintiff sought relief from corporate indebtedness that she had personally guaranteed. Upon review of the complaint, this court affirmed the trial court’s dismissal of the action. Specifically, this court reasoned that the relief sought by the plaintiff should be granted to the corporation and not to a shareholder. Any action to recover for the alleged losses was derivative in nature and an individual suit was not the proper route for relief. Walker, 303 Ark. at 618. Similarly, the trial court correctly concluded in the instant case that the appellants’ claims essentially constituted a derivative action, which could be maintained pursuant to Ark. Rule Civ. P. 23.1.

Our decision in this case is not to imply that shareholders may never bring a direct suit. For example, a shareholder may sue individually in an action to enforce that shareholder’s voting rights, to compel the payment of dividends, or to protect minority shareholders. Contrary to the case at bar, these actions contemplate a direct injury to the shareholder distinct and separate from harm caused to the corporation. See 12B Fletcher, Cyclopedia of Corporations §§ 5915, 5922 (Perm. Ed. 1984).

Significantly, plaintiffs may prefer characterizing their claims as direct rather than derivative. First, derivative actions impose more stringent procedural requirements. See Ark. R. Civ. P. 23.1. Second, any recovery in a derivative action accrues to the corporation and not to the shareholders, individually. Third, a derivative action in chancery court precludes a trial by jury. Therefore, a plaintiff may carefully plead facts in a complaint in order to proceed in a direct action. For example, by alleging a direct injury, a plaintiff can maintain a direct action even if the corporation was similarly harmed. See Brandon v. Brandon Constr. Co., 300 Ark. 44, 48, 776 S.W.2d 349 (1989) (citing 12B Fletcher, Cyclopedia of Corporations § 5911 (Perm. Ed. 1984)). Here, we simply find that the appellants failed to plead any individual harm.

Arkansas has adopted a clear standard to require fact pleading. According to Ark. R. Civ. P. 8(a)(1), a pleading that sets forth a claim for relief shall contain “a statement in ordinary and concise language of facts showing . . . that the pleader is entitled to relief.” Rule 12(b)(6) provides for the dismissal of a complaint for “failure to state facts upon which relief can be granted.” This court has stated that these two rules must be read together in testing the sufficiency of the complaint; facts, not mere conclusions, must be alleged. Brown v. Tucker, 330 Ark. 435, 438, 954 S.W.2d 262 (1997) (citations omitted). In testing the sufficiency of the complaint on a motion to dismiss, all reasonable inferences must be resolved in favor of the complaint, and pleadings are to be liberally construed. Id.; Ark. R. Civ. P. 8(f).

Although the appellants’ complaint alleges that Cravens’s conduct after Partners’s incorporation caused Partners harm, it fails to plead facts demonstrating that any action prior to incorporation harmed them individually. Regarding direct harm, the appellants merely assert that Cravens “intended to deprive them of the fruits of their efforts at the time she agreed to incorporate Partners.” In another paragraph of the complaint, the appellants claim that “but for Cravens’s misrepresentation,” they would not have developed Partners, given Cravens proprietary information, or guaranteed corporate debt. However, the proprietary information allegedly misappropriated by Cravens belonged to Partners and not to the appellants, individually, at the times relevant to the claimed misconduct. Here, the trial court properly concluded that the appellants lacked standing to assert the claims arising from their allegations because, by their very nature, the claims related to harm suffered by the company.

In any event, to plead a cause of action for fraud, the appellants must prove the existence of the following elements: (1) a false representation, usually of a material fact, (2) knowledge or belief by the defendant that the representation is false, (3) intent to induce reliance on the part of the plaintiff, (4) justifiable rebanee by the plaintiff, and (5) resulting damage to the plaintiff. Wiseman v. Batchelor, 315 Ark. 85, 88-89, 864 S.W.2d 248 (1993). Moreover, to be web pleaded, fraud must be specificaby abeged. Beam Bros. Cont. v. Monsanto Co., 259 Ark. 253, 263, 532 S.W.2d 175 (1976). In Burns v. Burns, 199 Ark. 673, 135 S.W.2d 670 (1940), this court noted that the complaint must state something more than mere conclusions and must clearly set forth the facts rebed upon as constituting the fraud. Additionaby, in the very early case of McIlroy v. Buckner, 35 Ark. 55 (1880), this court said:

It is not sufficient to plead fraud generally, or merely to characterize actions as fraudulent. The facts and circumstances constituting the fraud should be set forth. There should be some concealment, misrepresentation, craft, finesse, or abuse of confidence, by which another is misled, to his detriment; and these, or some of them, must be alleged and proved. Mere epithets, or adverbs characterizing conduct, which, in itself, may be innocent, amount to nothing.

Id. at 558-59.

Even drawing all reasonable inferences in favor of the complaint, the appellants fail to plead a case of fraud, which must include some facts regarding the alleged misrepresentation and Cravens’s intent to defraud them. Where the complaint states only conclusions without facts, we will affirm the trial court’s decision to dismiss the complaint pursuant to Rule 12(b)(6). See Brown, 330 Ark. at 438.

The appellants’ second query is whether shareholders in closely held corporations should be required to bring a derivative action when the corporation is operated more as a partnership than as a corporation. Appellants urge us to decide that the answer to this question should be “no” and that a direct action is permissible. In addition to other persuasive authority from foreign jurisdictions, appellants cite Hikita v. Nichiro Gyogyo Kaisha, Ltd., 713 P.2d 1197 (Alaska 1986), to support their position urging this court to adopt the modern trend permitting a direct shareholder action. However, Hikita noted only two major exceptions to the general rule, barring individual shareholder actions for corporate injuries: (1) where the shareholder suffered an injury separate and distinct from that suffered by other shareholders, and (2) where a special duty, such as a contractual duty, exists between the shareholder and the alleged wrongdoer. Id. at 1199 (citations omitted).

Arguably, the two actions classified in Hikita as “exceptions” to the general rule are actually independent actions to redress injuries suffered primarily by the shareholder and secondarily, if at all, by the corporation. In any event, the appellants’ complaint does not plead facts to support a distinct and separate harm, nor does it allege that Cravens was bound by and breached any type of pre-incorporation agreement regarding the proprietary information, which would give rise, to a direct cause of action. Reading the allegations in the appellants’ complaint, any injury suffered by the appellants is secondary to the injury suffered by Partners, and that is the essence of a derivative action.

Viewing the facts alleged in the complaint as true and in the light most favorable to the appellants, the trial court properly dismissed the appellants’ complaint for lack of subject-matter jurisdiction. Accordingly, we affirm.

Newbern, Corbin, and Brown, JJ., dissent.

David Newbern, Justice,

dissenting. Ben Robinson and Pat Hames, husband and wife, formed Partners In Rehab., Inc., with Marybeth Cravens. Mr. Robinson and Ms. Hames alleged that they agreed to invest in and work for the corporation in exchange for Ms. Cravens’s efforts to obtain contracts with the Riley Corporation and the Catlett Corporation. They further alleged that thereafter Ms. Cravens formed Rehab. Plus, Inc., and solicited the Riley Corporation and Catlett Corporation accounts for Rehab. Plus, Inc.

The complaint, filed in Pulaski Circuit Court, was dismissed solely on the ground that it stated a stockholder’s derivative claim, Ark. R. Civ. P. 23.1, and should have been filed in a chancery court. The Circuit Judge did not have before him a specific allegation of failure to state a claim for fraud, nor did he make any ruling in that respect. The real issue in this case is whether two of three shareholders must proceed against the other for breach of her fiduciary obligation to them only in the derivative format before a chancery court.

At common law, a shareholder had no means of redress against officers and majority shareholders whose actions injured their interests in corporations; thus, equity courts began to provide relief in the nature of the derivative suit early in the 19th century. That history is recited in Ross v. Bernhard, 396 U.S. 531 (1970), in which the Supreme Court recognized that the sole reason for equity jurisdiction in the so-called equitable stockholder’s derivative action was lack of standing such plaintiffs once had in law courts. The Supreme Court held that, after the standing matter was settled, the claim on behalf of the corporation could proceed at law with the right of a jury trial guaranteed. Id. That means, of course, that in a federal court the judge decides the standing issue and then, assuming the remedy to be pursued on behalf of the corporation is a legal remedy, a jury may decide the facts and reach a verdict on the claim.

In Arkansas, our archaic division of law and equity courts leaves us with cases like this one in which the fundamental claim may be one at law, but it is thrown into an equity court, regardless of the remedy sought, because two hundred years ago the law courts were not flexible enough to allow such a case to be heard where it belonged.

There is a means to end this artificial situation when the standing question has to do with a close corporation. Mr. Robinson and Ms. Hames have presented a number of cases in their brief, from a variety of jurisdictions, in which it has been held that shareholders in a close corporation may proceed directly against others who have caused injury to their interests in the corporation. The majority has chosen to discuss only one of those cases and has ignored the others, thus giving short shrift to a meritorious argument. Some of the examples of the cases cited in support of the argument follow.

In Thomas v. Dickson, 250 Ga. 772, 301 S.E.2d 49 (1983), the Georgia Supreme Court dealt with the issue as one of first impression. Three men formed a corporation of which they became the officers and operators. One of them died. His widow, who inherited one third of the stock of the corporation, sued the other two incorporators claiming they had conspired to keep her share of the profits and dividends, had reneged on a promise to pay her a “death benefit,” and had reduced the value of her stock. In response to the argument that the plaintiff was limited to bringing a derivative suit, the Court stated:

The general rule is that a shareholder seeking to recover misappropriated corporate funds may only bring a derivative suit
Although Georgia follows the general rule, we believe that in exceptional situations this Court. . . should look at the “realistic objectives” of a given case to determine if a direct action is proper ....
In the instant case, the reasons requiring derivative suits do not exist. The reasons underlying the general rule are that 1) it prevents a multiplicity of lawsuits by shareholders; 2) it protects corporate creditors by putting the proceeds of the recovery back in the corporation; 3) it protects the interests of all shareholders by increasing the value of their shares, instead of allowing a recovery by one shareholder to prejudice the rights of others not a party to the suit; and 4) it adequately compensates the injured shareholder by increasing the value of his shares ....
We will now examine this case to see if these reasons are applicable. First, Mrs. Dickson is the only injured shareholder; consequently, there can be no multiplicity of lawsuits, and there is no concern that a recovery by her will prejudice the rights of other shareholders.
In addition, Mrs. Dickson would not be adequately compensated by a corporate recovery. For a shareholder, the potential benefit of a corporate recovery in such cases is the increase in the value of his or her shares .... There would be no such benefit to Mrs. Dickson, however, since, in a closely held corporation, there is no ready market for her shares.
The final consideration underlying the general rule, the protection of creditors, is also not present in this case .... [T]here was no outstanding or dissatisfied creditor. [Internal citations omitted.]

Thomas v. Dickson, 301 S.E.2d at 50-51. All of the reasons recited by the Georgia Court apply in the case now before us.

In Richards v. Bryan, 879 P.2d 638 (Kan.App. 1994), the Kansas Court of Appeals reached the same result with respect to allegations by minority shareholders in a close corporation of a “freeze out” by the majority. It recognized the general proposition that “[a] shareholder may only litigate as an individual if the wrong to the corporation inflicts a distinct and disproportionate injury on the shareholder, or if the action involves a contractual right of the shareholder which exists independently of any right of the corporation.” Id. at 646. Then the Court considered the close-corporation exception, recognizing that “an increasing number of courts are abandoning the distinction between a derivative and a direct action because the only interested parties are the two sets of shareholders.” Id. at 647. It recited the concern about the corporation, under the control of the alleged wrongdoers, being the beneficiary of a derivative action, citing 2 O’Neal and Thompson, O'Neal's Close Corporations, § 8.11, p. 122 (3d ed. 1992), and then the following:

In its Principles of Corporate Governance: Analysis and Recommendations § 7.01(d), p. 731 (Tentative Draft No. 11, 1991), the American Law Institute recommends allowing an independent cause of action for freeze-outs in the close corporate setting under certain circumstances:
If a corporation is closely held . . . , the court in its discretion may treat an action raising derivative claims as a direct action, exempt it from those restrictions and defenses applicable only to derivative actions, and order an individual recovery, if it finds that to do so will not (i) unfairly expose the corporation ... to a multiplicity of actions, (ii) materially prejudice the interests of creditors in the corporation, or (iii) interfere with a fair distribution of the recovery among all interested persons.
See, Schumacher v. Schumacher, 469 N.W.2d 793, 798-99 (N.D.1991).

879 P.2d at 647-48.

The same result was reached by the Ohio Supreme Court in Crosby v. Beam, 548 N.E.2d 217 (1989), a case in which minority stockholders in a close corporation claimed the majority stockholders had breached the fiduciary duty owed to the minority stockholders by misappropriating corporate funds. It was pointed out that, if the minority shareholders in a close corporation were forced to sue on behalf of the corporation, then any recovery would go to the corporation that remained under the control of the majority.

Underlying these cases permitting close-corporation shareholders to sue directly, in the circumstances stated, is the fact that most such corporations are operated more like partnerships than corporations. See Johnson v. Gilbert, 127 Ariz. 410, 621 P.2d 916 (1980); Crosby v. Beam, supra. In the case now before us, it would be wrong to require Mr. Robinson and Ms. Hames to sue on behalf the corporation (assuming the petition to dissolve it has not yet been granted) so that the shares owned by Ms. Cravens could benefit by a recovery from Ms. Cravens. See Atkinson v. Marquart, 112 Ariz. 304, 541 P.2d 556 (1975). It makes sense to require the derivative format with respect to a corporation having many shareholders whose interests require protection against the wrong allegedly perpetrated against all, but not when the alleged wrongdoer is the only other shareholder and the rights of creditors and other (in this case nonexistent) shareholders are not prejudiced. Watson v. Button, 235 F.2d 235 (9th Cir. 1956).

The case of Schumacher v. Schumacher, cited above in the quotation from the Richards case, is especially interesting in the respect that it deals properly with the matter of precedence of legal and equitable issues resulting from one set of facts. The Supreme Court of North Dakota concluded that it was necessary to have a jury trial of legal issues arising from breach of a fiduciary relationship owed by one close-corporation shareholder to another prior to deciding the entitlement to equitable remedies. If the right to equitable relief were tried first, and the factual issues decided in that context by the court without a jury, then the plaintiff would, by the application of law of the case, be denied a jury trial.

Although it has been said that breach of a fiduciary duty is an equitable claim, Watson v. Buton, supra, that may well depend upon the remedy sought. We have no definitive ruling on whether breach of a fiduciary relationship must be pursued in equity, but we note that we have entertained appeals from both chancery and circuit courts where breach of a fiduciary relationship was the basis for a remedy, legal or equitable, being sought. See, e.g., Wilson v. Wilson, 327 Ark. 386, 939 S.W.2d 287 (1997) (appeal from chancery where remedy sought was an estate accounting and setting aside a deed); Alexander v. Flake, 322 Ark. 239, 910 S.W.2d 190 (1995) (appeal from circuit court where remedy sought was damages); Green v. Jones-Murphy Properties, Inc., 232 Ark. 320, 335 S.W.2d 822 (1960) (appeal from circuit court where remedy awarded was damages).

The complaint in this case, as abstracted by the appellee, makes it clear that money damages is the remedy being sought, and that remedy belongs in a circuit court. Even if, however, the matter were one to be tried by a chancellor as a direct, rather than derivative, action, the proper procedure for the Trial Court would have been to transfer the case rather than dismiss it. See Linder v. Howard, 296 Ark. 414, 757 S.W.2d 549 (1988).

I respectfully dissent.

Corbin and Brown, JJ., join in this dissent.


author: W.H. “Dub” Arnold, Chief Justice.

text:
    ROBERT D. HOLLOWAY, INC. v. PINE RIDGE ADDITION RESIDENTIAL PROPERTY OWNERS
    97-748
    966 S.W.2d 241
    Supreme Court of Arkansas
    Opinion delivered April 9, 1998

      Ellis Law Firm, by: George D. Ellis, for appellant.

      Wright & Bonds, by: Barbara P. Bonds, for appellee Pine Ridge Residential Property Owners Multi-Purpose Improvement District No. 9.

      Pike & Bliss, by: George E. Pike, Jr., for appellee Capitol Development Of Arkansas, Inc.
   W.H. “Dub” Arnold, Chief Justice.

The constitutionality of Ark. Code Ann. § 14-94-127 (Repl. 1988) is the issue before us on appeal. The instant appeal challenges an order of the Pulaski County chancery court granting a motion for summary judgment and holding section 14-94-127 unconstitutional. Finding that the statute unconstitutionally delegates to the chancery court a solely legislative function, we affirm.

Appellant, Robert D. Holloway, Inc., an engineering firm in Maumelle, Arkansas, performed professional engineering services in a total amount of $247,811.06, on behalf of appellee Pine Ridge Addition Residential Property Owners Multi-Purpose Improvement District No. 9. After the appellant submitted plats to the City of Maumelle on December 27, 1989, the City entered into an improvement district agreement with the district and the trustee, Worthen Bank & Trust Co., N.A. Appellant continued to perform engineering services for the district until November 14, 1990, when it received and tabulated construction bids. Following the City’s agreement with the district and the trustee, the project was abandoned for unknown reasons, and the district never issued bonds to finance construction of the planned improvements. To date, the appellant has not been paid for the engineering services performed for the district.

Pursuant to Ark. Code Ann. § 14-94-127, the appellant filed a complaint on February 9, 1994, seeking judgment for the balance owed, the appointment of a receiver, and the levy of a tax against the real property in the district in an amount sufficient to pay the judgment, interest, costs, and attorney’s fees. Specifically, section 14-94-127 provides:

If for any reason the improvement contemplated by any district organized under this chapter is not made, the prehminary expense shall be a first lien upon all the real property in the district and shall be paid by a levy of a tax on it. The levy shall be made by the chancery court of the county and shall be collected by a receiver to be appointed by the court.

After the district filed its answer, appellee Capitol Development of Arkansas, Inc. moved to intervene in the action, arguing that the district owned no real or personal property and, ultimately, any tax assessed pursuant to the statute would be levied solely on Capitol Development’s property because it owned all of the real property encompassed by the district. Capitol Development simultaneously moved for summary judgment, asserting that section 14-94-127 was unconstitutional because it gave the chancery court legislative discretion in determining a method to assess and levy a tax. The chancery court granted both the motion to intervene and the motion for summary judgment and held that section 14-94-127 is an unconstitutional delegation of legislative taxing power in violation of the separation of powers provisions of the Arkansas Constitution.

In reviewing summary judgment cases, this Court need only decide if the trial court’s grant of summary judgment was appropriate based on whether the evidence presented by the moving party left a material question of fact unanswered. Further, the moving party always bears the burden of sustaining a motion for summary judgment. All proof must be viewed in the light most favorable to the resisting party, and any doubts must be resolved against the moving party. The moving party is entided to summary judgment if the pleadings, depositions, answers to interrogatories and admissions on file, together with affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law. Ark. R. Civ. P. 56; McCutchen v. Huckabee, 328 Ark. 202, 943 S.W.2d 225 (1997).

Moreover, we note that acts of the General Assembly are presumed to be constitutional and will be struck down only when there is clear incompatibility between the act and the Arkansas Constitution. Here, where the trial court held section 14-94-127 unconstitutional, the appellees bear the burden of proving that the statute violated provisions of the Arkansas Constitution. McCutchen, 328 Ark. at 207; McDougal v. State, 324 Ark. 354, 922 S.W.2d 323 (1996).

Significantly, when the construction of a statute is at issue, the statute should be given that interpretation that will sustain rather than defeat it, and effect must be given, if possible, to every part of the statute. In construing a statute, we will presume that the General Assembly, in enacting it, possessed the full knowledge of the constitutional scope of its powers, full knowledge of prior legislation on the same subject, and full knowledge of judicial decisions under preexisting law. McLeod, Comm’r of Revenues v. Santa Fe Trail Transp. Co., 205 Ark. 225, 168 S.W.2d 413 (1943). We must also give effect to the legislature’s intent, making use of common sense and giving words their usual and ordinary meaning. Kyle v. State, 312 Ark. 274, 849 S.W.2d 935 (1993).

Here, however, the issue at bar involves not the interpretation of two conflicting statutory provisions but the absence of “magic language” that the appellant argues can be read into the statute to save it, and the appellees claim that the missing language defeats the statute. Specifically, the contested magic language is “upon the assessed value for county and state taxation.”

Analogous statutes, involving the payment of preliminary expenses when a planned improvement project is abandoned, have been held constitutional or would likely pass constitutional muster. See e.g., Ark. Code Ann. §§ 14-92-238, 14-317-131, 14-318-124 (1987 & Repl. 1998). These statutes permit a chancery court to assess and levy taxes to pay preliminary expenses by (i) determining the total amount of preliminary expense, and (ii) spreading a tax throughout the district, via a legislatively defined method, sufficient to pay the expense. Significantly, these statutes do not vest the chancery court with any discretion to determine the method of levying the tax. However, pursuant to section 14-94-127, the chancellor could choose to compute the tax by distributing the burden over the real property within the district in proportion to (i) the assessed value for county and state taxation, or (ii) anticipated benefits.

In Harrill v. Board of Comm’rs of Clinton Road Water Pipe Line Improvement Dist. No. 328 of Pulaski County, 282 Ark. 348, 668 S.W.2d 538 (1984), pursuant to a nearly identical statute to the one at issue, a chancellor was authorized to determine the amount of preliminary expense, but the computation of the tax was merely a matter of distributing the burden over the total assessed value of the property within the district. Notably, the statute involved in Harrill did not vest the chancellor with any discretion in selecting the method of levying the tax. The statute was upheld precisely because the legislature did not delegate discretion in the assessment of the tax levy but retained that power by defining the specific method to levy the tax. Id. at 351.

Also, in Neterer v. Dickinson & Watkins, 153 Ark. 5, 239 S.W. 722 (1922), an early case relied upon by the Harrill court, the statute at issue authorized the payment of preliminary expenses, upon abandonment of an improvement project, to be paid by a tax levy on the real property within the district in proportion to the county assessment. However, the Neterer court held that expenses were not properly payable from funds raised by taxation of “assessed benefits” because the statute prescribed the “assessed value” method. The Neterer decision also concluded that a court must find the authority, in the statute itself, to impose taxes to pay preliminary expenses of an abandoned improvement district. Id. at 10-11.

The power of taxation, whether by general taxation or by local assessment, is a legislative power that cannot be exercised in the absence of statutory authority. Quapaw Cent. Business Improvement District v. Bond-Kinman, Inc., 315 Ark. 703, 870 S.W.2d 390 (1994). Here, the absence of language in section 14-94-127 directing the chancery court to use a particular method for computing the tax levy bestows upon the judiciary a nondelegable power of the legislature in violation of the separation of powers provisions of the Arkansas Constitution. See Ark. Const. art. 4, §§ 1, 2.

The absence of the “magic language” from section 14-94-127 designating a particular method of tax computation may well have been an oversight. Unfortunately, that oversight cost the appellant $247,811.06 and failed to afford it the same privilege and protection extended to professional firms working with other types of improvement districts whose projects are abandoned. Nevertheless, the chancery court correctly held that Ark. Code Ann. § 14-94-127 is unconstitutional, and we affirm the trial court’s order granting appellee Capitol Development’s motion for summary judgment.