author: Jim Hannah, Justice.

text:
    Eugene M. PFEIFER, III; Citizens Fidelity Insurance Company; and Pulaski County, Arkansas v. CITY of LITTLE ROCK
    01-302
    57 S.W.3d 714
    Supreme Court of Arkansas
    Opinion delivered November 1, 2001

      Eichenbaum, Lile & Hester, PA., by: Christopher O. Parker, for appellant.

      Thomas M. Carpenter, Office of the City Attorney, for appellee.
   Jim Hannah, Justice.

Appellant Eugene M. Pfeifer, III, appeals the Pulaski County Chancery Court’s grant of summary judgment to Appellee City of Little Rock (“the City”) in this eminent domain proceeding taking approximately 2.9 acres of Pfeifer’s property for a fair market value of $400,000 for part of the park grounds for the Clinton Presidential Library, Complex, and Park District. The crux of Pfeifer’s argument on appeal is that the City did not need all of his property for the library and complex grounds and, that even if all of the property was needed, the creation of the library and complex is not a proper statutory purpose for taking the property. We affirm.

The idea for the creation of the library and complex began soon after President William J. Clinton was elected to the presidency in 1992. At that time, a group of his supporters began work to find property in Arkansas to establish the Clinton Presidential Center to house the presidential letters and archives from his administration. This Clinton Presidential Library Study Commission (the Commission) suggested approximately thirty sites in Little Rock and North Little Rock as possible locations for the complex and surrounding park areas, and ultimately decided on a location along the river front in downtown Little Rock east of Interstate 30. In relation to this proposal, the City began considering this location for a park area to be used in conjunction with the presidential library complex.

Ultimately, the City issued 10.5 million dollars in bonds to acquire the proposed property and prepare the property as “site ready” for building in anticipation that the William J. Clinton Presidential Library Foundation (the Foundation), the private funding arm of the library and complex project, would properly bid to lease a portion of the park area on which to build the library and complex buildings. The site encompasses approximately 26.6 acres of land. According to Little Rock Mayor Jim Dailey’s deposition testimony, while the Foundation and the City had not made a “commitment” to the project, it was anticipated that this would be the project that would anchor the proposed park grounds. This was further reflected in a letter from James L. “Skip” Rutherford, President of the Foundation, who wrote the City on April 21, 1998, confirming that the library would be located in Little Rock and outlining tentative plans for the lease of the property by the Foundation and the federal government. The letter indicated that the Foundation would lease a portion of the property from the City for ninety-nine years at the rate of $1.00 per year, and that federal government could use the property in perpetuity without transfer of title. However, Dailey also indicated that the City itself was not preparing any plans for a library complex nor consulting with any of the Foundation’s planners as Dailey indicated that the City’s sole purpose was acquiring the property for the park, with additional plans to follow later.

During 1997, 1998, and 1999, the City passed several resolutions affecting the river front property included in the proposed park areas. In Resolution 10,125 passed on November 7, 1997, the City declared a moratorium for a period of six months to stop the issuance of building permits or acceptance of rezoning applications for “the area of the Clinton Presidential Library” and for other purposes. The description of “The Clinton Presidential Park District” described the following general area as shown in the attached Exhibit B to that Resolution:

South of the Arkansas River, east of Interstate 30, north of the mid-line between 6th Street and Capitol Avenue west of Pepper Street and north of Capitol Avenue east of Pepper Street, and west of Pepper Street south of Capitol Avenue and west of Bond Street north of Capitol Avenue.

The larger map in Exhibit B contains the described property in the resolution. Two other maps were also included with the resolution, including the map in Exhibit A entitled “Proposed Clinton Presidential Library” making up a portion of the total 26 acres proposed to be taken by the City. Resolution 10,374, passed on October 6, 1998, continued the moratorium established in Resolution 10,125 with the same property description but lacking the larger map detailing that property description attached as Exhibit B in the 1997 moratorium resolution. Finally, on April 6, 1999, the City again continued the moratorium in Resolution 10,518, but amended the boundaries as “South of the Arkansas River, east of Interstate 30, north of East 4th Street and west of John Street” as indicated in that resolution’s Exhibit B. This amended description minimized the moratorium area; however, in all of these resolutions, the moratorium area continually included all of Pfeifer’s property.

The City began acquiring property in 1998 and 1999. On December 15, 1998, the City passed Resolution 10,441 providing authorization to begin eminent domain proceedings. This resolution named three parcels of property, one of which was listed as “115 East Second Street, Eugene M. Pfeifer, III.” Several months later after unsuccessfully negotiating with Pfeifer for the sale of his entire tract of property, the City filed a Complaint in Eminent Domain on July 30, 1999, claiming condemnation power over Pfeifer’s property totaling 2.944 acres along the southeast border of the proposed library complex site. In its complaint, the City indicated that it was acquiring the property for “the purpose of construction and operation of a public park and other lawful and permitted purposes.” Attached to the complaint was a description of Pfeifer’s property titled “(The former) MAY SUPPLY COMPANY PROPERTY, 115 East Second Street.” The description of the property includes two tracts. The first tract contained 29,109 square feet or .668 acres more or less, and the second tract contained 99,138 square feet or 2.276 acres more or less. This constituted all of Pfeifer’s property, and the old May Supply Company Building still exists on the entire piece of property. Pfeifer answered on August 17, 1999, disputing the purpose for which the City asserted for taking the property. Pfeifer did concede, however, that the $400,000 deposited with the court constituted the fair market value of the property.

Per Pfeifer’s request, the action was transferred from circuit to chancery court on September 22, 1999, for a determination of whether the Arkansas Legislature delegated to the City the power to condemn private property for the purpose of providing a site for the construction of a private facility. On December 22, 1999, Pfeifer filed a motion for summary judgment arguing that the true purpose of the condemnation proceeding was for the City to acquire property for a “building ready” site for the complex, and that this purpose is not one which the Arkansas Legislature delegated to the City for purposes of eminent domain. Pfeifer argued that, from the beginning, the acquisition of property was not for a city park, but rather only for the complex as indicated by the City’s complete lack of planning for the use of the property outside of the plans for the complex. On February 4, 2000, the City filed a cross-motion for summary judgment, arguing that the purpose for which the City wanted the land is a proper public purpose in that the City may take property to establish a park and for other proper purposes. Further, the City argued that Pfeifer’s issues are not ripe for review because no final determination had been made about any issues related to the complex or its location. The trial court issued its decision on May 4, 2000, denying both motions for summary judgment. The court determined that while the City claimed that' the property would be used for a public park, the City issued bonds to finance the property to be “site ready” for the complex although the City also represented that it would lease the property in an open-bid process despite the Rutherford’s proposal that the Foundation would lease the property. As such, the court found that because these facts were contradictory and because the City had provided no plans for its intended use of the park, the court could not determine whether the City would, in fact, use the land for a public park, although the concept of a public park might incorporate such structures and purposes as those proposed in the complex and surrounding grounds. Furthermore, the court also indicated that the parties missed the point as to whether the taking was for “other lawful purposes” as allowed under Ark. Code Ann. § 18-15-301(a) (Supp. 2001).

Given this ruling by the court, the City amended its complaint on May 12, 2000, indicating that the statutory grant of power of eminent domain to the City encompassed such an act of condemning property to create a park, to be known as the William Jefferson Clinton Presidential Park, which is intended to include the library and museum as well as other structures and recreational and educational facilities. The City more fully declared its intentions to the property including that it intended to maintain ownership while leasing portions to selected entities. The City once again attached the description of all of Pfeifer’s property as an exhibit to the complaint. Pfeifer answered on May 31, 2000, and denied that the proposed purpose is proper, that all of his property is necessary to accomplish the proposed purpose, that use of the property as a residence is a public purpose, and that the cited statutes allow the City to condemn his property for such proposed purposes. Pfeifer once again conceded that $400,000 was the fair-market value of the property.

On September 15, 2000, the City filed a renewed motion for summary judgment arguing that Ark. Code Ann. § 18-15-301 allows the City to take Pfeifer’s property for the purpose of constructing the park which will include the library and musuem and other educational and recreational facilities. Pfeifer did not file a cross-motion but instead filed a response arguing that there are questions of fact as to the true purpose behind the condemnation proceedings, and that such power of condemnation for these purposes has not been conferred to the City.

A hearing' was held on the City’s motion on November 3, 2000. Following the hearing, the court issued its decision granting the City’s motion for summary judgment on November 13, 2000, finding that the true intent of the taking of the 26.6 acres is for the purpose of creating a park which will include approximately 4 acres of buildings and other structures. The court specifically found that the evidence supported a finding that a “park” can include such a proposal, and that other Little Rock parks include structures such as War Memorial Stadium, MacArthur Park’s buildings, the zoo, and the tyiver Market addition. The court found that such a park and complex serve a public purpose, enhance the quality of urban life, and create an educational and cultural center for the citizens of the city and of the state. As such, the burden shifted to Pfeifer to show that there has been fraud, bad faith, or a gross abuse of discretion by the City, and that Pfeifer failed to do that. The court determined that the City does have the authority to lease the park property to a private entity under Ark. Code Ann. § 22-4-503 (Repl. 1996) where the proper statutory process is followed by the City. Finally, the court determined that the appraisal made of Pfeifer’s property included all parcels, including the south one-third of the property, and that this property was contained in the fair-market value assessment of $400,000 as agreed upon by Pfeifer.

Pfeifer filed his notice of appeal from summary judgment on November 17, 2000. The court issued an additional “Judgment” on December 15, 2000, incorporating its previous summary judgment and finding that the $400,000 in deposit with the court is the proper value of the property and that the money should be released. Furthermore, the court found that the title in land should be vested with the City in fee simple absolute, and that Pfeifer should pay taxes on the property to the date of the judgment. Finally, the court dismissed with prejudice all claims and counterclaims. Pfeifer filed his supplemental notice of appeal on December 21, 2000.

As we have often stated, summary judgment is to be granted by a trial court if the pleadings, depositions, answers to interrogatories and admissions on file, together with affidavits, if any, show that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law. Ark. R. Civ. P. 56; Estate of Donley v. Pace Indus., 336 Ark. 101, 984 S.W.2d 421 (1999); Mashburn v. Meeker Sharkey Financial Group, Inc., 339 Ark. 411, 5 S.W.3d 469 (1999). Once the moving party has established a prima facie entitlement to summary judgment, the opposing party must meet proof with proof and demonstrate the existence of a material issue of fact. Id. On appellate review, this court determines if summary judgment was appropriate based on whether the evidentiary items presented by the moving party in support of the motion leave a material fact unanswered. Id. This court views the evidence in a light most favorable to the party against whom the motion was filed, resolving all doubts and inferences against the moving party. Id. Our review focuses not only on the pleadings, but also on the affidavits and other documents filed by the parties. Id.

I. Necessity of Taking All of Pfeifer’s Property

In his first point on appeal, Pfeifer argues that the City never established the need to take all of his property for the creation of the presidential park, and that this lack of proof of necessity for taking his property for a public purpose leaves open a material question of fact to defeat summary judgment. Specifically, Pfeifer argues that a material issue of fact remains as to whether the City needed the southern one-third of his property south of Third Street. He argues that all of the documents and maps attached to the City’s resolutions do not show that the presidential park extends south of Third Street into the south one-third of his property. Therefore, the City failed to show a need for the property, and whether such need exists is a material question of fact.

The City responds by noting that Resolution 10,441 authorizing the eminent domain proceedings and the complaint in eminent domain specifically listed Pfeifer’s entire property as that to be taken, and Pfeifer conceded that $400,000 was a fair-market price for his entire property. The City notes that the burden is on Pfeifer to show that the property at issue is unnecessary, and Pfeifer failed to meet proof with proof to rebut the City’s contention that it needs the property for the presidential park. The City notes that, as a general rule, Pfeifer must show that there was fraud, bad faith, or gross abuse of discretion in the City’s choice of property, and, again, Pfeifer fails to carry this burden. Rather, the City argues that although Pfeifer offers testimony from City planners that it appeared that his property would be cut in half, Resolution 10,441, the complaint, and offer of compensation indicate that the City sought to take his entire property, that prior to the condemnation lawsuit Pfeifer negotiated the sale of his entire tract of property, and that the ordinances and maps, while arguably could have been more carefully drawn, never indicated that the properties shown were the total needed for the project.

The power of eminent domain is an attribute of, and inherent in, a sovereign state. Ark. Const, art 2, § 23; City of Little Rock v. Raines, 241 Ark. 1071, 411 S.W.2d 486 (1967); Young v. City of Gurdon, 169 Ark. 399, 275 S. W. 890; City of Little Rock v. Sawyer, 228 Ark. 516, 309 S.W.2d 30. Article 2, section 22, of the Arkansas Constitution provides that “[t]he right of property is before and higher than any constitutional sanction; and private property shall not be taken, appropriated or damaged for public use, without just compensation therefor.”

Statutes that relate to the power of eminent domain should be stricdy construed in favor of the landowner, see Columbia County Rural Dev. Auth. v. Hudgens, 283 Ark. 415, 678 S.W.2d 324 (1984); Loyd v. Southwest Ark. Util. Corp., 264 Ark. 818, 580 S.W.2d 935 (1979), and no more property of a private individual, and no greater interest therein, can be condemned and set apart for public use than is absolutely necessary. See Selle v. City of Fayetteville, 207 Ark. 966, 184 S.W.2d 58 (1944). The authority for the taking of private property for public use should be clearly expressed. Sawyer, supra. Broad discretion is vested in those to whom the power of eminent domain is delegated. State Highway Comm’n v. Saline County, 205 Ark. 860, 171 S.W.2d 60 (1943). In Gray v. Ouachita Creek Watershed Dist., 234 Ark. 181, 351 S.W.2d 142 (1961), the supreme court explained:

The State, by conferring on the District the power of eminent domain, necessarily left largely to the discretion of the District the location and area of the land to be taken. And one seeking to show that the taking has been arbitrary or excessive shoulders a heavy burden of proof in the attempt to persuade the Court to overrule the District’s judgment. Buford v. Upton, 232 Ark. 456, 338 S.W.2d 929; Woolard v. State Hwy. Comm., 220 Ark. 731, 249 S.W.2d 564; State Game & Fish Comm. v. Hornaday, 219 Ark. 184, 242 S.W.2d 342; State Hwy. Comm. v. Saline County, 205 Ark. 860, 171 S.W.2d 60; and Patterson Orchard Co. v. S.W. Ark. Util. Corp., 179 Ark. 1029, 18 S.W.2d 1028.

Gray, 234 Ark. at 183-85. This court stated in State Highway Com. v. Saline County, supra, that:

A broad discretion is necessarily vested in those to whom the power of eminent domain is delegated, in determining what property is necessary for the public purpose, with respect to the particular route, line, or location of the proposed work or improvement; and the general rule is that the courts will not disturb their action in the absence of fraud, bad faith, or gross abuse of discretion. The landowner may not object merely because some other location might have been made or some other property obtained which would have been suitable for the purpose.

State Highway Com. v. Saline County, 205 Ark. at 863. In determining whether the taking of property is necessary for public use, not only the present demands of the public, but those which may be fairly anticipated in the future, may be considered. Woollard v. Ark. State Highway Comm’n, 220 Ark. 731, 249 S.W.2d 564 (1952) (citing Rindge Co. v. County of Los Angeles, 262 U.S. 700, 67 L.Ed. 1186, 43 Sup. Ct. 689 (1923)).

The entry upon another’s land is not a right to be assumed by anyone — private citizen or public agency. Robinson v. Game & Fish Comm’n, 263 Ark. 462, 565 S.W.2d 433 (1978). A public entity’s right of eminent domain is a constitutional privilege granted with limitations. Id. First, there must be established the need for taking for public use or purpose. “This is a judicial question which the owner has a right to have determined by the courts.” Arkansas State Highway Comm. v. Alcott, 260 Ark. 225, 539 S.W.2d 432 (1976). Second, the condemnation of land must be according to the law. Robinson, supra. And, in reviewing the necessity of the taking for public use, the legislative determination is subject to review in cases of fraud, bad faith, or gross abuse of discretion. Woollard, supra.

Robinson v. Arkansas Game & Fish Commission was decided in 1978 after the court decided Woollard v. State Highway Commission in 1952. In Woollard, the court noted not only that the taking of property must be for a permissible purpose, but also that the judiciary may review in cases of fraud, bad faith, and gross abuse of discretion. However, in Robinson, the court only focused on the necessity and lawfulness of the taking, seemingly in conflict with the earlier Woollard decision. These cases, however, are harmonious in light of their facts. In Robinson, the court reviewed the Game and Fish Commission’s restraining orders, which had since expired, allowing Commission employees to enter onto private property to survey for a lake. While no “taking” had yet occurred, tins court addressed the issue to avoid future litigation and found that the statutory scheme required the Commission to obtain a temporary easement, which it had not done, prior to entering onto private land. This court did not conduct a review for fraud, bad faith, or gross abuse of discretion, but instead found that because the Commission had not complied with the statutory requirements to allow its employees to enter onto private property, such a taking could not be lawful until those conditions were met. That case was quite different from Woollard wherein the State Highway Department had already begun relocation of a twelve-mile segment of highway before landowners, whose property was being condemned, sought an injunction to enjoin the State Highway Department from relocating the highway. The Woollard court not only considered the necessity for the taking but also considered whether the decision to relocate the highway was fraudulent, in bad faith, or a gross abuse of discretion. This added consideration is proper where, as here, the eminent domain proceedings have lawfully begun according to statutory requirements.

In order to prevail on this issue, Pfeifer had to meet proof with proof to show that the City did not need all of his property and that the City abused its discretion, committed fraud, or acted in bad faith in condemning his property for its anticipated purpose of creating a presidential park. Because the City is given broad discretion in deciding what property is necessary now and for the future, see Woollard, supra, we believe that the City’s proposal and supporting documentation make it clear that Pfeifer’s entire property was properly taken by the City for the presidential park.

The proof provided by the City in its motion for summary judgment clearly shows that it needed all of Pfeifer’s property for the park. While Pfeifer is correct in noting that some of the maps attached to various resolutions passed by the City do not appear to include the south one-third of his property south of Third Street as part of the general park outline, the City’s additional documentation more than establishes that the City anticipated the need for all of Pfeifer’s property in the park project. In looking at all of the maps provided with each resolution passed by the City, and in the other schematics provided by the parties, it appears that the City and the architects for the Foundation anticipated that this one-third portion of Pfeifer’s property would be part of the park grounds. First, Pfeifer cites in his brief that the maps provided -with Resolutions 10,125, 10,374, and 10,518 never show that proposed land condemnation would go further south than Third Street. However, in looking at the maps attached to these Resolutions, the City did two things. First, the City created the Clinton Presidential Park District in Resolution 10,125 described by certain boundaries as:

South of the Arkansas River, east of Interstate 30, north of the mid-line between 6th Street and Capitol Avenue west of Pepper Street and north of Capitol Avenue east of Pepper Street, and west of Pepper Street south of Capitol Avenue and west of Bond Street north of Capitol Avenue.

This map clearly encompasses Pfeifer’s property in the building moratorium area. In the two later resolutions, the City continued the building moratorium in the district, and ultimately condensed the district area in Resolution 10,518 to the following area “generally described” as:

South of the Arkansas River, east of Interstate 30, north of East 4th Street and west of John Street.

While the “district” area definitely encompasses Pfeifer’s property, the actual park area is not as clear. The City apparendy mapped out a “general” boundary for the presidential park, which, as Pfeifer notes, appears not to extend south of Third Street. However, none of the resolutions state that this “park” area is set in stone, and, in fact, the resolutions clearly indicate that the area is a general area. In addition, in looking at the drawing created by the architects hired by the Foundation, all of Pfeifer’s property is included in the park area. Because the City was clearly acquiring the property in hopes that the Foundation would lease the land, this drawing is particularly important in establishing what land is necessary to meet the Foundation’s needs.

In addition to the maps detailing the general area of the presidential park, the City passed Resolution 10,441 in which the City approved the commencement of eminent domain proceedings to acquire, among others, Pfeifer’s property located at 115 East Second Street. While Pfeifer argued that this address only covered the north two-thirds of the property, his attorney admitted at oral arguments in this case that the May Supply Company building at that address rests not only on the north two-thirds of the property, but also on the south one-third of the property, making it difficult to “split” acquisition of the property into two parcels. In fact, this particular piece of information seriously undermines Pfeifer’s contention that the City did not need all of his property because dividing the property according to Pfeifer’s theory would cause the building to be split in half. Furthermore, Pfeifer negotiated with the City for sale of the entire tract of land prior to the City’s filing of the complaint in eminent domain, which included all of the property for acquisition. Pfeifer also admitted in his answer and amended answer, and does not dispute now, that $400,000 is the fair-market value for the entire tract of land.

Clearly, the City has consistently stated a need for Pfeifer’s property. Whether Pfeifer thinks the property was necessary is not the issue. Rather, whether the City believes that the property is necessary to accomplish the purposes of creating a park area, which it may do, is the issue. Given the broad discretion provided to the City, Pfeifer failed to meet proof with proof that the City wrongfully condemned his property under eminent domain proceedings.

II. Legislative Grant of Authority to the City to Take Pfeifer’s Property

In his second point on appeal, Pfeifer argues that the City did not have the authority to condemn his property under the guise of creating a city park only to then lease portions of the property to a private entity and the federal government for a library and meeting complex. Despite Pfeifer’s contention, the real question is whether the City’s assertion that this land will be a park encompasses the idea that the presidential library and complex can also sit on this site as part of the city park.

A municipality’s ability to act is derived only from those powers directly granted it by the state legislature or through the state constitution. This court stated in Raines, supra:

Cities are creatures of the state to aid it in the regulation and administration of local affairs. Woods v. Haas, 229 Ark. 1007, 320 S.W.2d 655; Portis v. Board of Public Utilities of Lepanto, 213 Ark. 201, 209 S.W.2d 864; City of Hot Springs v. Gray, 215 Ark. 243, 219 S.W.2d 930. They have no inherent powers and can exercise only (1) those expressly given them by the state through the constitution or by legislative grant, (2) those necessarily implied for the purposes of, or incident to, these express powers and (3) those indispensable (not merely convenient) to their objects and purposes. City of Piggott v. Eblen, 236 Ark. 390, 366 S.W.2d 192; McClendon v. City of Hope, 217 Ark. 367, 230 S.W.2d 57; Bain v. Ft. Smith Light & Traction. Co., 116 Ark. 125, 172 S.W. 843, LRA 1915 D 1021; Laprairie v. City of Hot Springs, 124 Ark. 346, 187 S.W 442; City of Argenta v. Keath, 130 Ark. 334, 197 S.W. 686, LRA 1918 B 888; Cumnock v. City of Little Rock, 154 Ark. 471, 243 S.W. 57, 25 ALR 608; Arkansas Utilities Co. v. City of Paragould, 200 Ark. 1051, 143 S.W.2d 11; Williams v. Dent, 207 Ark. 440, 181 S.W.2d 29; Deaderick v. Parker, 211 Ark. 394, 450, 200 S.W.2d 787.
Cities may act legally only within the powers derived from or delegated by the constitution and statutes. Neal v. City of Morrilton, 192 Ark. 450, 92 S.W.2d 208. The validity of their ordinances depends on the authority granted by the constitution or by the legislature. Incorporated Town of Paris v. Hall 131 Ark. 104, 198 S.W. 705; Nesler v. City of Paragould, 187 Ark. 177, 58 S.W.2d 677; Bennett v. City of Hope, 204 Ark. 147, 161 S.W.2d 186; City of Stuttgart v. Strait, 212 Ark. 126, 205 S.W.2d 35.

Raines, 241 Ark. at 1078. Because cities only have such power as given them by the legislature or by the constitution, we turn to the applicable statutes to determine whether the City’s actions here in taking Pfeifer’s property was a proper exercise of eminent domain. Ark. Code Ann. § 18-15-301, “Municipal corporations Power to condemn generally,” confers upon a municipality the ability to condemn private property through eminent domain proceedings for the creation of a park, and states in pertinent part:

(a) The right and power of eminent domain is conferred upon municipal corporations to enter upon, take, and condemn private property for the construction of wharves, levees, parks, squares, market places, or other lawful purposes. . . .

Once the property is acquired through eminent domain to create a park or other municipal work, Ark. Code Ann. § 22-4-501 (Repl. 1996) and Ark. Code Ann. § 14-269-103 (Repl. 1998) allow a municipality to manage the property for the stated purpose in a number of different ways. Arkansas Code Annotated § 22-4-501, '“Disposition of property authorized,” states in pertinent part:

(b) (1) Any municipality in this state shall have the authority to lease to any individual, firm, or corporation municipal property comprising parks, playgrounds, golf courses, swimming pools, or other property which have been dedicated to a public use for recreational or park purposes, on such terms and conditions as may be desirable or necessary.
(2) Any municipality is also authorized to lease municipally-owned lands and facilities to a community college board to be used for educational purposes.
(3) Any lease under this subsection shall be for a period not to exceed ninety-nine (99) years.

Arkansas Code Annotated § 14-269-103, “General authority Agreements with federal agencies -— Condemnation Proceedings,” states:

(a) Any municipality in this state is authorized to own, acquire, construct, reconstruct, extend, equip, improve, operate, maintain, sell, lease, contract concerning, or otherwise deal in or dispose of any land, buildings, improvements, or facilities of any and every nature whatever necessary or desirable for the developing and providing of public parks and facilities within or near the municipality including, without limitation, recreation areas, stadiums, auditoriums, arts and crafts centers, folklore centers, interpretative centers, camping areas, and other facilities so as to provide for the recreation and cultural needs of its inhabitants and to stimulate and encourage the economic growth of the municipality and its inhabitants; each such undertaking by a municipality shall sometimes be referred to in this subchapter as a “project”.
(b) (1) Any municipality in this state shall have the authority to lease to any individual, firm, or corporation municipal property comprising parks, playgrounds, golf courses, swimming pools, or other property which has been dedicated to a public use for recreational or park purposes, on such terms and conditions as may be desirable or necessary.
(2) Any municipality is also authorized to lease municipally owned lands and facilities to a community college board to be used for educational purposes.
(3) Any lease under this subsection shall be for a period not to exceed ninety-nine (99) years.
(c) Municipalities are authorized to enter into and carry out appropriate agreements with any agency of the Government of the United States of America, hereinafter referred to as “government,” pertaining to the accomplishment of the purposes authorized by this subchapter including, without limitation, loan agreements with the government for the borrowing of money and agreements pertaining to grants from the government.

Perhaps the greatest authority for condemning Pfeifer’s property in this case is an additional provision in this statute, which states:

(d)(1) In the event that necessary lands needed for the accomplishment of the purposes authorized by this subchapter cannot be acquired by negotiation, any municipality is authorized to acquire the needed lands by condemnation proceedings under the power of eminent domain.

Pfeifer argues that the court may look beyond the stated purpose of the condemnation — here, to create a park — to determine whether the City actually means to accomplish that goal or instead plans to fulfill some other unstated purpose. However, the chancery court posed the question best by asking whether the City can condemn property to create a park in which the Foundation, the federal government, the University of Arkansas system, or any other non-City entity can lease some of the property to accomplish their plans of a presidential library, park, and complex. And, considering the language of the above-cited statutes, the chancery court correcdy found that the City can create a “park” in which the presidential complex, or any other public complex (assuming another entity is the successful bidder) exists.

Arkansas Code Annotated section 22-4-101 (Repl. 1996) defines a “park” as “any area within the state which by reason of location, natural features, scenic beauty, or historical interest possesses distinctive physical, aesthetic, intellectual, creative, and social values.” While Pfeifer contends that the definition of a park cannot encompass a presidential library, archives, or complex, he again failed to meet proof with proof that the City’s proposal for such a complex could not meet the definition of a “park.” Rather, the City offered the affidavit of Bryan Day, Director of the Little Rock Parks Department, who indicated that the concept of a “park” can encompass many different ideas. Day, who is the President of the Arkansas Recreation Parks Association and on the Board of Trustees of the National Recreation and Parks Association, indicated that in Arkansas and other states, park properties include a variety of facilities and structures to serve a wide range of public needs and purposes. These include everything from football stadiums, such as War Memorial Field, to museums, planetariums, and theaters in parks such as San Diego, California’s Balboa Park, and St. Louis, Missouri’s Forest Park. Day also noted that should the proposed Presidential Library and Musuem buildings are ever abandoned, they will revert to the City. Day also indicated that even if the Commission decided not to locate -the Presidential Library and Complex at this site, the City would still create a park on this property.

Pfeifer particularly cites two cases, Hampton v. Arkansas State Game & Fish Commission, 218 Ark. 757, 238 S.W.2d 950 (1951), and Arkansas Game & Fish Commission v. Gill, 260 Ark. 140, 538 S.W.2d 32 (1976), for the propositions that 1) the City cannot state one purpose for the condemnation and then attempt to accomplish some other purpose, and 2) that the City cannot take property and then immediately resell it to a private entity.

In these two cases, the Game and Fish Commission claimed that it was attempting to improve or expand its conservation grounds in the Bayou Meto Wildlife Management area, a purpose allowed by statute, where, in reality, the Commission was really attempting to expand its hunting grounds, a purpose not allowed by statute. These cases, however, can be easily distinguished from the present case. First, the purpose proposed by the City to create a park and possibly lease some of the land to the Commission, the National Archives, or any other successful bidder is a purpose specifically anticipated under the controlling statutes. Second, from the start the City has proposed the park in anticipation that the presidential library and complex would be located on the grounds, assuming the Commission properly bids on the lease. This approach is unlike that in Hampton and Gill wherein the Game and Fish Commission stated one purpose for the condemnation but anticipated using the grounds for another purpose.

Pfeifer also argues that the City cannot take property that it later intends to resell to a private entity for a profit. In the case of Selle v. City of Fayetteville, 207 Ark. 966, 184 S.W.2d 58 (1944), this court noted that it becomes a claim of bad faith against a city if the landowner contends that the municipality intends to resell at a profit land it is attempting to condemn for the creation of an airport, a valid municipal work. The court in Selle did not reach the merits of that claim because the landowner did not raise the issue below to have it transferred to chancery court for those questions to be answered. However, the proposition remains that a municipality cannot claim one purpose for the use of the property and attempt to accomplish a different purpose, particularly when the hidden purpose is to condemn land and then resell it to a private entity.

By citing these cases, Pfeifer contends that the City’s purpose to create a park to house the presidential library and complex cannot be accomplished because the City would have to sell the property to the National Archives and Records Administration (NARA). He cites NARA’s proposed regulations which appear to require that, in order for the archives to be housed at any particular site, the property must be sold to the government or leased in perpetuity. Pfeifer, however, concedes that these regulations have not been adopted yet. Furthermore, because the bid process has not yet taken place, this issue currendy is not before this court. Overall, this court presumes that public officials will act lawfully and sincerely in good faith in carrying out their duties, and that they will not engage in subterfuge to accomplish their goals. Cotten v. Fooks, 346 Ark. 130, 55 S.W.3d 290 (2001); Commercial Printing Co. v. Rush, 261 Ark. 468, 549 S.W.2d 790 (1977). The record does not reflect that the City has begun the bidding process to determine how and by whom the park property will be leased. Assuming it is the Foundation and the National Archives, the City will continue to remain under the obvious duty to follow the law and act in good faith in leasing the property to these entities or to any other successful bidder. Failure to do so only subjects the City to further litigation.

IMBER, J., not participating.


source: Caselaw Access Project

author: Per Curiam.

license: Public Domain

text:
    Billy Kale FARMER v. STATE of Arkansas
    CR 01-1104
    57 S.W.3d 216
    Supreme Court of Arkansas
    Opinion delivered November 1, 2001

      Miller Law Firm, by: Leslie Borgognoni, for appellant.
    No response.
   Per Curiam.

Appellant, Billy Kale Farmer, by his attorney, Leslie Borgognoni, has filed a motion for rule on the clerk. On June 15, 2001, the Benton County Circuit Court entered an order denying appellant’s motion for relief from an illegal sentence. Farmer timely filed a notice of appeal on July 13, 2001, and ultimately tendered the appellate record on October 12, 2001. However, due to a miscalculation in the due date, the record was lodged one day outside the applicable time limit.

Ms. Borgognoni admits in the instant motion that the record was tendered late due to a mistake on her part. We find that such an error, admittedly made by the attorney for a criminal defendant, is good cause to grant the motion. See In Re: Belated Appeals in Criminal Cases, 265 Ark. 964 (1979) (per curiam). Accordingly, we grant the motion for rule on the clerk. A copy of this opinion will be forwarded to the Committee on Professional Conduct. Id.


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

text:
    BANK OF ARKANSAS, N.A. v. MANA CORPORATION and First Union National Bank
    01-276
    58 S.W.3d 366
    Supreme Court of Arkansas
    Opinion delivered November 8, 2001

      Everett Law Firm, by: Jason H. Wales, for appellant.

      Hilburn, Calhoon, Harper, Pruniski & Calhoon, Ltd., by: Scott T. Vaughn, for appellee.
   W.H. “Dub” Arnold, Chief Justice.

Appellant Bank of Arkansas, N.A., appeals the Benton County Circuit Court’s award of summary judgment to appellee First Union National Bank (First Union) and dismissal with prejudice of First Union from the case. We affirm.

The parties in this lawsuit include Bank of Arkansas, First Union, and MANA Corporation (MANA). Bank of Arkansas contends that the events leading up to this lawsuit began on October 10, 1997, when First Union credited MANA’s account at Bank of Arkansas in the amount of $150,000 as payment by MCI WorldCom under a contract between it and MANA. However, on October 14, 1997, First Union reversed the deposit at the direction of its client, MCI WorldCom, within five days pursuant to National Automated Clearing House Association (NACHA) Rule 2.5.1 which states:

An Originator may initiate an entry to correct an erroneous credit or debit entry previously initiated to a Receiver’s account. The reversing entry must be transmitted to the Receiving ACH Operator in such a time as to be transmitted or made available to the RDFI by midnight of the fifth banking day following the setdement date of the erroneous entry. For this section 2.5 only, an erroneous entry is defined as an entry that (1) is a duplicate of an entry previously initiated by the Originator or ODFI; (2) orders payment to or from a Receiver not intended to be credited or debited by the Originator; or (3) order payment in a dollar amount different than was intended by the Originator.

In short, First Union only had five days to reverse the credit to MANA’s account at Bank of Arkansas, which it did, and the reversal had to be for one of the three reasons: a duplicate entry, payment not intended to be credited or debited by MCI WorldCom, or an erroneous entry of an unintended dollar amount. Bank of Arkansas notified MANA of this entry reversal on October 17, 1997. Until this lawsuit arose, MANA did not complain about the entry reversal or attempt to change that reversal; further, MANA never sued MCI WorldCom on the underlying contract it had with MCI nor sought to implead MCI WorldCom into the case. In other words, no problem with this reversal of funds was ever asserted until this lawsuit, and MCI WorldCom has never been made a party to the case.

About seven months later, MANA’s Bank of Arkansas account showed a balance of $3,700.72 on April 2, 1998. On April 6, 1998, at the direction of MCI WorldCom, First Union deposited $175,169 in MANA’s Bank of Arkansas account, and on that same day MANA directed Bank of Arkansas to transfer the total amount to MANA’s account at the Bank of Bentonville. Bank of Arkansas completed this transfer but faded to debit MANA’s account. On April 27, 1998, First Union deposited another $39,300 in MANA’s Bank of Arkansas account, and MANA then directed Bank of Arkansas on that same day to transfer $214,585.61 into MANA’s Bank of Bentonville account, which Bank of Arkansas did.

At the end of that day, Bank of Arkansas apparently realized its error of failing to debit the April 6, 1998, transfer from MANA’s Bank of Arkansas account to MANA’s Bank of Bentonville account. Flowever, Bank of Arkansas again waited until May 20, 1998, to debit MANA’s Bank of Arkansas account of the $175,169 which should have been subtracted on April 6, 1998. This resulted in MANA being overdrawn in the amount of $171,669.

Bank of Arkansas demanded payment by MANA of the $171,669. MANA first agreed that it would repay the entire amount, but then later tendered only $21,669, leaving $150,000 unpaid. Although MANA had never previously complained about the wire reversal, MANA contended that the entry reversal six months prior on October 14, 1997, of $150,000 was the cause of the overdraft and that First Union’s failure to comply with NACHA Rule 2.5.1 caused the overdraft.

On July 21, 1998, Bank of Arkansas filed suit against MANA for breach of contract, and over one year later, on August 4, 1999, Bank of Arkansas amended its complaint to include a claim against First Union under NACFIA Rule 2.5.2 which states:

Each ODFI [Originating Depository Financial Institution] shall indemnify every RDFI [Receiving Depository Financial Institution], ACH Operator, and Association from and against any and all claim, demand, loss, liability, or expense, including attorney’s fees and costs, that result directly or indirectly from the crediting or debiting of a reversing entry initiated by an Originator through the ODFI.

In November 1999, MANA filed Chapter 11 bankruptcy, triggering an automatic stay. However, the trial court severed Bank of Arkansas’s action against First Union, and both parties subsequently filed cross-motions for summary judgment on the issue of indemnification. The trial court conducted hearings on these motions on April 19, 2000, and June 9, -2000, and took the motions under advisement. On June 26, 2000, the trial court granted summary judgment for First Union and dismissed Bank of Arkansas’s claims against First Union with prejudice. Bank of Arkansas appealed to the Arkansas Supreme Court, and First Union moved to dismiss arguing that its summary judgment was not a final appealable order because Bank of Arkansas’s claims were still pending against MANA. We agreed and remanded to the trial court for further proceedings.

Upon remand, the trial court once again granted summary judgment to First Union, denied Bank of Arkansas’s summary judgment, entered summary judgment for Bank of Arkansas against MANA, and dismissed with prejudice Bank of Arkansas’s claims against First Union. Bank of Arkansas appealed. As its only point on appeal, Bank of Arkansas asserts that the trial court erred'by granting judgment as a matter of law to First Union.

I. Standard of Review

We have ceased referring to summary judgment as “drastic” remedy. We now regard it simply as one of the tools in a trial court’s efficiency arsenal; however, we only approve the granting of the motion when the state of the evidence as portrayed by the pleadings, affidavits, discovery responses, and admissions on file is such that the nonmoving party is not entided to a day in court, i.e., when there is not any genuine remaining issue of material fact and the moving party is entitled to judgment as a matter of law. Wallace v. Broyles, 332 Ark. 189, 961 S.W.2d 712 (1998). The burden of proving that there is no genuine issue of material fact is upon the movant, and all proof submitted must be viewed favorably to the party resisting the motion. Ford v. St. Paul Fire & Marine Ins. Co., 339 Ark. 434, 5 S.W.3d 460 (1999). On appellate review, we determine if summary judgment was proper based on whether the evidence presented by the movant left a material question of fact unanswered. City of Dover v. A. G. Barton, 342 Ark. 521, 29 S.W.3d 698 (2000).

II. Merits

First Union presented in support of its motion for summary judgment affidavits submitted by Bank of Arkansas employees. That fact in and of itself is compelling proof that there were no material facts left unanswered in this case. The affidavits of Craig Shy and Larry Kupp, employees and officers of Bank of Arkansas, as well as the affidavit of Carol Sanders, an employee of an affiliate of Bank of Arkansas, the deposition of Craig Shy, and Bank of Arkansas’s own internal documents overwhelmingly support First Union’s position that summary judgment was properly granted.

Bank of Arkansas contends that its loss is due to First Union’s reversal of a wire transfer from MCI WorldCom in October 1997 and that under NACHA’s operating rules, First Union is required to indemnify Bank of Arkansas for its loss. First Union’s response is that the wire reversal in October 1997 is too remote in time to be considered the source of Bank of Arkansas’s loss. The trial court agreed with First Union by granting summary judgment in First Union’s favor. We agree and hold that there is no connection, either directly or indirectly, between the wire reversal, which occurred some seven months prior to Bank of Arkansas’s loss and to which no party had previously objected, and appellant’s loss.

Any loss suffered by Bank of Arkansas was obviously directly and solely due to Bank of Arkansas’s own mistakes in mishandling MANA’s. checking account when Bank of Arkansas failed to debit the transfer out of MANA’s Bank of Arkansas account to the Bank of Bentonville. We find the discussion of whether the wire reversal by First Union was right or wrong to be irrelevant to Bank of Arkansas’s loss. Bank of Arkansas and MANA are clearly the real parties in interest in this case. Further, Bank of Arkansas holds a judgment against MANA; therefore, it has a remedy. We hold that First Union is not hable for Bank of Arkansas’s negligence in this case; as such, summary judgment was properly entered in First Union’s favor.

Affirmed.

CORBIN, J., not participating.

       The bankruptcy stay had since dissolved.


author: Robert L. Brown, Justice.

text:
    Gene MCWHORTER v. Bernice MCWHORTER
    01-76
    58 S.W.3d 840
    Supreme Court of Arkansas
    Opinion delivered November 8, 2001

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

      Appellee, pro se.
   Robert L. Brown, Justice.

Appellant Gene McWhorter (Gene) appeals from an Amended and Supplemental Order by the chancery court, which determined his average net monthly income based on averaging income for the years 1995, 1996, and 1997 and assessed an arrearage for retroactive child support for February 1997 through May 31, 1998. Gene raises five points on appeal: (1) gambling winnings are not income for child-support purposes; (2) if gambling winnings are properly included for child-support purposes, these winnings should be reduced by gambling losses; (3) the chancery court’s calculations of his income are flawed for child-support purposes; (4) the chancery court’s averaging of income over three years was clearly erroneous; and (5) the chancery court’s retroactive award of child support from February 19, 1997, was also clearly erroneous. We affirm in part and reverse and remand in part.

In 1993, Gene McWhorter and appellee, Bernice McWhorter (Bernice), were divorced. Gene was a self-employed trucker with one plywood client which he serviced out of West Helena. Two children had been born of the marriage — Warren Jeffrey, who was born on February 22, 1980, and Kimberly Jean, who was born on August 26, 1983. Under their divorce decree, custody was awarded to Bernice, and Gene was ordered to pay child support. In 1995, the chancery court modified its order for child support and ordered Gene to pay child support in the amount of $465.00 per month.

On February 15, 1996, appellee filed a Motion for Increase in Child Support. Two years later, a trial was held in April 1998, and on August 18, 1998, the chancery court issued a letter opinion. After including gambling winnings but not his gambling losses, the chancellor found Gene’s yearly and monthly income for 1995, 1996, and 1997 to be as follows:

Year Yearly Income Monthly Income

1995 $ 34,306.76 $ 2,858.83

1996 $ 82,737.00 $ 6,894.00

1997 $ 58,000.00 $ 4,833.00

The court also determined that Gene’s average monthly income for the three-year period was $4,862. Based on this averaging, the court increased Gene’s monthly child-support payments to $1,017.00 per month. The court further ruled that Gene’s payment of child support to Bernice would begin in February 1997, and it allowed credit for payments actually made. The court then awarded Bernice a judgment for the difference.

Following the issuance of the chancery court’s letter opinion, but prior to judgment, Gene filed a motion for reconsideration and motion for findings pursuant to Ark. R. Civ. P. 52(a) and requested that the court revisit and enumerate the calculations- it used in determining his annual income for the three-year period. The chancery court did not rule on Gene’s motion, but instead issued its order, and he appealed to the Arkansas Court of Appeals. In that appeal, Gene made the following arguments: (1) the chancery court erred in refusing to make findings of fact under Rule 52(a) as requested; (2) the chancery court erred in considering gambling profits as income; (3) the court erred in averaging income over three years; (4) the court was clearly erroneous in arriving at his income for child-support purposes; and (5) the court erred in ordering child support to be awarded retroactively. The court of appeals held that the chancery court had failed to comply with Ark. R. Civ. P. 52(a) and reversed and remanded the case for compliance with that rule. See McWhorter v. McWhorter, 70 Ark. App. 41, 14 S.W.3d 528 (2000).

On remand, the chancery court issued a letter opinion followed by a supplemental order. In its letter opinion, the court found the following:

1) No mileage on Defendant’s personal truck was allowed as a business credit.
2) Gambling winnings were counted as spendable income[.] Defendant’s gambling losses were not considered as a deduction for child support purposes.
3) Depreciation expenses were allowed as a legitimate business expenses [sic], as adjusted by Ms. Shirley Miles, C.P.A. See Gray v. Gray, 67 Ark. App. 202 (1999).

The chancery court then found Gene’s income to be $34,306.76 for 1995, $85,914.00 for 1996, and $53,317.66 for 1997. In its Amended and Supplemental Order, the court found that Gene’s average net monthly income was $4,820.47 and that based on that calculation, retroactive child support for the period February 1997 through May 31, 1998, should be $1,011.00 per month. The court further found that commencing on June 1, 1998, for one child, child support should be $699.00, and that Gene’s child-support arrearages for the period February 1997 through May 1998 should be $8,736.00.

1. Gambling Winnings

Gene first claims in his appeal that gambling winnings are not income for child-support purposes under the definition in Arkansas Supreme Court Administrative Order No. 10. The policy reason for this is simple, he claims — gambling income is so uncertain and noncontinuous that it cannot be considered as a dependable basis for establishing child support. He contends that there is a dearth of caselaw on the issue and urges that we be guided by the definition in Administrative Order No. 10, which, he asserts, limits what constitutes income to certain defined categories.

Our standard of review for an appeal from a child-support order has been set out in a recent opinion:

We review chancery cases de novo on the record, and we will not reverse a finding of fact by the chancery court unless it is clearly erroneous. Ark. R. Civ. P. 52(a); Myrick v. Myrick, 339 Ark. 1, 2 S.W.3d 60 (1999). In reviewing a chancery court’s findings, we give due deference to that court’s superior position to determine the credibility of the witnesses and the weight to be accorded to their testimony. Hunt v. Hunt, 341 Ark. 173, [15 S.W.3d 334]. As a rule, when the amount of child support is at issue, we will not reverse the chancellor absent an abuse of discretion. Scroggins v. Scroggins, 302 Ark. 362, 790 S.W.2d 157 (1990). However, a chancellor’s conclusion of law is given no deference on appeal. City of Lowell v. M & N Mobile Home Park Inc., 323 Ark. 332, 916 S.W.2d 95 (1996).

Kelly v. Kelly, 341 Ark. 596, 599, 19 S.W.3d 1, 3 (2000).

In order to address whether Gene’s gambling winnings should be included as income for purposes of determining his child-support obligation, this court must first look to what constitutes “income” for child-support purposes. Our Family Law Code defines the term “income” as follows:

(4) (A) “Income” means any periodic form of payment due to an individual, regardless of the source, including wages, salaries, commissions, bonuses, workers’ compensation, disability, payments pursuant to a pension or retirement program, and interest.

Ark. Code Ann. § 9-14-201 (4) (A) (Supp. 2001). Subsection (4)(B) of that section permits this court to expand the definition “from time to time in the Guidelines for Child Support Enforcementf.]” Ark. Code Ann. § 9-14-201 (4) (B) (Supp. 2001).

That is precisely what this court did with Administrative Order No. 10. In the Administrative Order, we set forth the following definition of “income”:

Income means any form of payment, periodic or otherwise, due to an individual, regardless of source, including wages, salaries, commissions, bonuses, worker’s compensation, disability, payments pursuant to a pension or retirement program, and interest less proper deductions for.
1. Federal and state income tax;
2. Withholding for Social Security (FICA), Medicare, and railroad retirement;
3. Medical insurance paid for dependant children, and
4. Presently paid support for other dependents by Court order.

Administrative Orders of the Supreme Court, No. 10, § II (emphasis added). In construing this definition, this court has said that the definition of income included in the Administrative Order “is intentionally broad and designed to encompass the widest range of sources for the support of minor children.” Davis v. Office of Child Support Enforcement, 341 Ark. 349, 358, 20 S.W.3d 273, 278 (2000).

Additional authority for this proposition can be found in the Administrative Order’s section dealing with deviation considerations. In that section, the Order sets forth the relevant factors to be considered by the court in determining the appropriate amount of child support. Those factors include: “12. Other income or assets available to support the child from whatever source.” Administrative Orders of the Supreme Court, No. 10, § V. Our court of appeals has had occasion to interpret subsection a. 12 on at least two occasions and to include as income certain funds not specifically listed in the definition of “income.” See Office of Child Support Enforcement v. Longnecker, 67 Ark. App. 215, 997 S.W.2d 445 (1999) (money received from part-time work included as income for child-support purposes); Belue v. Belue, 38 Ark. App. 81, 828 S.W.2d 855 (1992) (VA benefits included as income for child-support calculations). See also County of Contra Costa v. Lemon, 205 Cal. App. 3d 683, 252 Cal. Rptr. 455 (1988) (court interpreted “income from whatever source derived” to include lottery winnings though funds were not listed as a specific category of “income”). There is no question then that both this court and our court of appeals have interpreted the term “income” broadly for purposes of arriving at proper child support. Moreover, we are influenced by the fact that the Internal Revenue Code includes gambling winnings as part of a person’s gross income for federal income tax purposes. See 26 U.S.C.A. § 61; see also Lyszkowski v. Commissioner of Internal Revenue, 69 T.C.M. (CCH) 2751 (1995); Hall v. Commissioner of Internal Revenue, 44 T.C.M. (CCH) 256 (1982); Rev. Rul. 83-130, 1983-2 C.B. 148.

Gene urges this court to follow the maxim of expressio unius est exclusio alterius, which means that the expression of one thing implies the exclusion of another. See Black’s Law Dictionary 602 (7th ed. 1999). He raises this maxim in support of his argument that the items listed in the definition of “income” in the Administrative Order are exclusive of all others. We disagree. As already discussed in this opinion, the policy of this state is to interpret “income” broadly for the benefit of the child. Subsection a. 12 of Section V of the Administrative Order referring to other income from whatever source confirms that. We decline to limit income only to those items listed in the definition but rather consider the list of income sources as illustrative rather than exhaustive or exclusive. See, e.g., Masterson v. Stambuck, 321 Ark. 391, 902 S.W.2d 803 (1995); County of Contra Costa v. Lemon, supra.

We hold that the chancery court did not abuse its discretion in including gambling winnings as income for purposes of determining child support under the Administrative Order.

II. Gambling Losses

Gene next contends that if gambling winnings are to be included as income, then gambling losses should be credited against those winnings up to the amount of the winnings, as provided in the Internal Revenue Code. Had the chancery court permitted a credit of gambling losses against gambling winnings for purposes of determining income, Gene argues, his disposable income would have been significantly reduced.

Year Net Gain Due to Gambling

1995 Winnings: $ 15,900.00

Losses: — 14,635.00

Net Gain: $ 1,265.00

1996 Winnings: $ 57,800.00

Losses: - 45,439.00

Net Gain: $ 12,361.00

1997 Winnings: $ 20,900.00

Losses: - 20,900.00

Net Gain: $ .00

Bernice counters that the Administrative Order does not provide for that but rather limits deductions from income under § II to the following categories:

(1) federal and state income tax;
(2) withholding for Social Security, medicare, and railroad retirement;
(3) medical insurance paid for dependant children; and
(4) presently paid child support for other dependent children by court order.

Gene’s argument has merit. As was the case for determining income for child-support purposes, we do not view this list of deductions in the Administrative Order as exhaustive or exclusive. See, e.g., Masterson v. Stambuck, supra. We further observe that the Administrative Order provides as follows with regard to self-employed • persons:

For self-employed payors, support shall be calculated based on last year’s federal and state income tax returns and the quarterly estimates for the current year. Also the court shall consider the amount the payor is capable of earning or a net worth approach based on property, life-style, etc.

Administrative Orders of the Supreme Court, No. 10, § IIIc. This subsection brings into play consideration of state and federal tax returns for self-employed individuals, which would include Gene’s handling of his gambling winnings and losses in his 1040 tax returns for 1995, 1996, and 1997. In determining net gambling income for federal income tax purposes, the Internal Revenue Code provides that gambling losses can be deducted up to the amount of gambling winnings. See 26 U.S.C.A. § 165(d).

The federal income tax treatment of gambling gains and losses seems appropriate for child-support calculations in that our goal should be to decide what constitutes disposable income of the support obligor. In Stepp v. Gray, 58 Ark. App. 229, 947 S.W.2d 798 (1997), our court of appeals considered whether a depreciation deduction against income from rental properties should be denied in determining the true disposable income of the child-support payor. In doing so, the appellate court observed:

Surely, determining the “expendable income” of a child-support payor is still the ultimate task of the chancellor following the adoption of the child-support guidelines in 1989.

58 Ark. App. at 236, 947 S.W.2d at 801. We agree with the court of appeals that determining expendable income is the ultimate objective of our chancery courts. For purposes of the instant case, the true expendable or disposable income can only be arrived at by crediting gambling losses only to the extent of winnings. We reverse the chancery court on this point and remand for further proceedings to prove gambling losses for the calendar years in question. In this regard, we note that while Gene’s 1040 tax returns may be a starting point, documentary evidence must be presented to the chancery court to prove his gambling losses.

III. Income Calculations

Gene next contends that the chancery court’s income calculations for child-support purposes are flawed for several reasons. First, he contends that the court included gambling winnings without crediting gambling loses, as previously discussed in this opinion. In addition, he maintains that the chancery court erred in adopting Bernice’s accountant’s figures instead of those by his accountant and that deductions for depreciation and other truck expenses were not fully allowed. All of this, he maintains, skewed the bottom line for disposable income and falsely depicted his income as increasing substantially when, in fact, gross income from his trucking business had been declining. He further claims that by not including gambling losses in its income calculations, the chancery court deviated from the Family Support Chart and needed to explain the deviation with written findings. He cites Stepp v. Gray, supra, for this proposition.

We have previously held in this opinion that the chancery court must recompute Gene’s disposable income based on gambling losses, and we need not consider that issue again under this point. Beyond that, Gene is simply not convincing in showing how the chancery court clearly erred in calculating his expendable income so as to require additional written findings under the Administrative Order.

IV Three-Year Averaging

Gene next objects to the chancery court’s three-year averaging of annual income in determining child support. He emphasizes that Administrative Order No. 10 does not sanction this and, indeed, provides that for self-employed payors, support must be calculated “based on last year’s federal and state income tax returns and the quarterly estimates for the current year.” Administrative Orders of the Supreme Court No. 10, § IIIc. Bernice’s riposte is that we should not address this issue because it is being raised for the first time on appeal. Specifically, Bernice claims that Gene did not object to three-year averaging in 1995 when it benefitted him and he should not be permitted to object now when the calculations work to his detriment.

It does not appear that this issue was presented to the chancery court for resolution before the first appeal. Following the chancery court’s letter opinion in 1998 but prior to entry of judgment, Gene moved for reconsideration and for additional findings of fact under Ark. R. Civ. P. 52(a). He failed, however, to question the court’s three-year averaging of income at that time. In the subsequent appeal to the court of appeals, he did raise averaging as an issue, in addition to the chancery court’s lapse in not making additional Rule 52(a) findings. The court of appeals reversed on the Rule 52(a) issue and remanded the matter. Only on remand did Gene raise the issue of averaging to the chancery court. At that juncture, it was simply too late to raise a new issue to the chancery court. See Collins v. Keller, 333 Ark. 238, 969 S.W.2d 621 (1998) (failure to object to the trial court’s findings waives the opportunity to raise the issue involved on appeal).

This issue was not preserved for our review.

V. Retroactive Award

For his final point, Gene contends that the retroactive award of child support back to February 1997 constituted an abuse of discretion. He acknowledges that a retroactive modification of child support may be appropriate in some cases under Grable v. Grable, 307 Ark. 410, 821 S.W.2d 16 (1991), but he urges that a chancery court may not make the retroactive period earlier than the trial date without proof of the needs of the children. Here, the trial commenced on April 2, 1998. That, according to Gene, should be the starting point for a retroactive modification.

We disagree. In Grable v. Grable, supra, this court interpreted Ark. Code Ann. § 9-14-234(b) (Repl. 1991), in light of pertinent federal rules and concluded that the statute only prohibited modifications of child support which are made retroactive prior to the filing of the modification petition. In the case at hand, the motion for increase in child support was filed on February 15, 1996, which is clearly before the starting point for the modified support ordered to begin in February 1997. Because of the delay in resolving the motion, the chancery court stated it considered February 1997 a fairer and more appropriate beginning for modified support than February 1996. We hold that the chancery court did not abuse its discretion in starting modified child support in February 1997.

We issue one caveat for purposes of remand. Though the issue of three-year averaging was not preserved for purposes of this appeal, recalculations of disposable income are mandated by this opinion. For purposes of those recalculations, under the Administrative Order, child support is determined based on the previous year’s disposable income and the quarterly estimates for the current year. See Administrative Orders of the Supreme Court No. 10, § IIIc.

Affirmed in part; reversed and remanded in part.

       This version of the definition of income was adopted by per curiam order on October 1, 1997. See In re: Administrative Order Number 10: Arkansas Child Support Guidelines, 329 Ark. 668 (1997).


author: Annabelle Clinton Imber, Justice. L. Corbin, Justice,

text:
    James EDENS v. SUPERIOR MARBLE & GLASS
    01-290
    58 S.W.3d 369
    Supreme Court of Arkansas
    Opinion delivered November 8, 2001

      Lane, Muse, Arman & Pullen, by: Shannon Muse Carroll, for appellant.

      Bridges, Young, Matthews & Drake PLC, by: R. Scott Morgan, for appellees.
   Annabelle Clinton Imber, Justice.

[1] Appellant, James Edens, appeals an adverse decision of the Arkansas Workers’ Compensation Commission. This case is before us on petition for review from the Arkansas Court of Appeals; therefore, our jurisdiction is pursuant to Ark. Sup. Ct. R. 1-2(e). When we grant review following a decision by the court of appeals, we review the case as though it had been originally filed with this court. Freeman v. Con-Agra Frozen Foods, 344 Ark. 296, 40 S.W.3d 760 (2001); Tucker v. Roberts-McNutt, Inc., 342 Ark. 511, 29 S.W.3d 706 (2000).

Mr. Edens filed a claim with the Commission alleging that he sustained a compensable injury to his back on January 19 or 20, 1999, while he was in the employ of Superior Marble & Glass. Specifically, he alleged that he was entitled to temporary total disability benefits for the period beginning January 20, 1999, and ending July 12, 1999. Superior contested Mr. Edens’s claim in its entirety, arguing that he did not sustain an injury in the course and scope of his employment on January 19 or January 20, 1999, and, furthermore, that Mr. Edens could not establish by a preponderance of the evidence that he sustained a compensable injury on January 19 or January 20, 1999.

A hearing took place on November 5, 1999, before an administrative law judge. In an opinion filed on December 8, 1999, the law judge denied Mr. Edens’s workers’ compensation claim based upon the following findings:

1. The claimant does not meet his burden of proving by a preponderance of the credible evidence of record that he sustained an injury arising out of and during the course and scope of his employment on January 17, 18, 19, or 20, 1999.
2. The Claimant is not specific about which dates he may have injured himself, nor are there any objective findings in the medical evidence presented as required by Ark. Code Ann. § 11-9-102(16).

Mr. Edens appealed the law judge’s decision to the full Commission. In an opinion filed on April 20, 2000, the Commission affirmed and adopted the law judge’s decision. Mr. Edens then appealed the Commission’s decision to the Arkansas Court of Appeals. In an unpublished opinion, the court of appeals reversed and remanded the Commission’s denial of the claim “insofar as it was based on Edens’s failure to provide an exact date of injury,” and directed the Commission “to make specific findings regarding the compensability of Edens’s claim consistent with our interpretation of section 11-9-102(5)(A)(i).” Edens v. Superior Marble & Glass, CA00-689, slip op. (Ark. App. Feb. 2001). The court of appeals also concluded that the Commission arbitrarily disregarded a physical therapist’s notation regarding muscle spasms in its finding that there are no objective findings in the medical evidence, as required by Ark. Code Ann. § 11-9-102(5)(D) and (16) (Supp. 1997), now codified at Ark. Code Ann. § 11-9-102(4)(D) and (16) (Supp. 2001). Id.

Superior petitioned this court to review the decision of the court of appeals. In its petition, Superior argues that the court of appeals did not strictly construe the statutory requirement for a compensable specific-injury incident as defined in Ark. Code Ann. § 11-9-102(4)(A)(i). We conclude that the Commission expressly relied on an erroneous statutory interpretation and an erroneous factual finding in reaching its decision. Accordingly, we must reverse the Commission’s decision and remand for findings consistent with our interpretation of sections 11-9-102(4) (A) (i) and 4(D).

The evidence presented to the law judge consisted of the testimony of Mr. Edens, his wife, and the secretary and owner of Superior, Susan Johnson and Joe Hobbs, Mr. Edens’s medical records, and the deposition testimony of orthopaedist, Dr. Michael Young. The parties stipulated that an employee/employer relationship existed and that, if the injury was deemed compensable, Mr. Edens would be entided to a compensation rate of $271 per week.

On direct examination, Mr. Edens testified that he had been working for Superior for eleven years, with eight years as shop foreman. Mr. Edens stated that on January 19, 1999, he injured his back when he and his wife, also a Superior employee, lifted a mixing pot. The pot filled with marble resin used to make marble vanity tops and showers weighed about 125 pounds. Initially, Mr. Edens testified that he first sought medical care for the injury on January 20 or 21, 1999. When his attorney pointed out that his medical records reflected a visit to Dr. Kyle Roper on the 19th, Mr. Edens suggested January 18th as a possible date of injury. Mr. Edens explained that Dr. Roper prescribed physical therapy and referred him to an orthopaedist, Dr. Michael Young, as well as the Hot Springs Mercy Pain Clinic.

On cross-examination, Mr. Edens said he did not .know the specific date of his injury, but that it occurred on January 18, 19, or 20, 1999. On redirect, he testified that during his eleven years of “slinging marble,” he had experienced pulled muscles but this pain was different because it hurt more and was still hurting. He also stated that his injury could have occurred on January 17, 1999.

Mr. Edens’s wife, testified she remembered that somewhere around January 17, 18, or 19, her husband told her he hurt his back lifting the pot of marble resin. Susan Johnson, the secretary for Superior, explained that the claim report filed by Mr. Edens on February 22, 1999, indicated the accident occurred on January 20, 1999. Ms. Johnson also testified that she had never known Mr. Edens to be dishonest with her, and she had no reason to believe he would falsify a workers’ compensation claim. Joe Hobbs, the owner of Superior, said that he had been told about Mr. Edens’s back injury, but did not recall being told that Mr. Edens sustained the injury while lifting marble. Mr. Hobbs also testified that over the years Mr. Edens has mentioned a sore back or pulled muscles, but there was no reason to believe that Mr. Edens would falsify his workers’ compensation claim.

Also introduced into evidence were the following medical records: notes of Dr. Kyle Roper, an MRI report, the deposition and office notes of orthopaedist Dr. Michael Young, physical therapy records, including a report by physical therapist Martin Milner, and notes from the Hot Springs Mercy Pain Clinic.

I. Statutory Interpretation

The first issue in this appeal is whether Mr. Edens was required to identify the exact date of the occurrence of the injury. The requirements for a compensable injury are defined in Ark. Code Ann. § 11-9-102(4) (A) (i) as follows:

(4)(A) “Compensable injury” means:

(i) An accidental injury causing internal or external physical harm to the body or accidental injury to prosthetic appliances, including eyeglasses, contact lenses, or hearing aids, arising out of and in the course of employment and which requires medical services or results in disability or death. An injury is “accidental” only if it is caused by a specific incident and is identifiable by time and place of occurrence. . . .

Ark. Code Ann. § 11-9-102(4)(A)(i) (Supp. 2001). (Emphasis added.) The Commission argues that a strict construction of this statute requires Mr. Edens to identify a specific date the injury occurred. Mr. Edens responds that by requiring a claimant to pinpoint a specific date, the Commission replaces the word “identifiable” with the word “identified” in the statute.

[2-4] We construe this statute just as it reads, giving the words their ordinary and usually accepted meaning in common language. Lawhon Farm Seros, v. Brown, 335 Ark. 272, 984 S.W.2d 1 (1998); Kildow v. Baldwin Piano & Organ, 333 Ark. 335, 969 S.W.2d 190 (1998). The doctrine of strict construction directs us to use the plain meaning of the language used. Lawhon Farm Seros, o. Brown, supra. The interpretation of section 11-9-102(4)(A)(i), as it applies in the instant case, turns on the ordinary and usually accepted meaning of the word “identifiable.” Webster’s Dictionary defines the word “identifiable” as “subject to identification: capable of being identified.” Webster’s Third New International Dictionary 1123 (1993). A strict construction of the statute does not require, as a prerequisite to compensabifity, that the claimant identify the precise time and numerical date upon which an accidental injury occurred. Instead, the statute only requires that the claimant prove that the occurrence of the injury is capable of being identified. The inability of the claimant to specify the date might be considered by the Commission in weighing the credibility the evidence, but the statute does not require that the exact date be identified. Therefore, we reverse the Commission’s decision to the extent that it was based on Mr. Edens’s inability to provide an exact date of the injury, and remand for the Commission to consider the compensabifity of Mr. Edens’s claim in a manner consistent with our interpretation of section 11-9-102(4)(A)(i).

II. Objective Findings

Section 11-9-102(4)(D) requires that “[a] compensable injury must be established by medical evidence supported by ‘objective findings’ as defined in subdivision (16) of this section.” Section 11-9-102(16) defines objective findings as “those findings which cannot come under the voluntary control of the patient.”

In one of its findings, the Commission states: “[N]or are there any objective findings in the medical evidence presented as required by Ark. Code Ann. § 11-9-102(16).” (Emphasis added.) This finding by the Commission ignores the April 5, 1999 notation in the medical record by physical therapist Milner that Mr. Edens exhibited “tight musculature and spasm activity in the lower back.” We have held that muscle spasms reported by a physician or physical therapist constitute objective findings under section 11-9-102(16). Continental Express, Inc. v. Freeman, 339 Ark. 142, 4 S.W.3d 124 (1999). The Commission may not arbitrarily disregard the testimony of any witness nor may the Commission arbitrarily disregard other evidence submitted in support of a claim. Freeman v. Con-Agra Frozen Foods, supra. Because the Commission has arbitrarily disregarded the physical therapist’s notation referencing muscle spasms, we must reverse on this point as well.

The dissent incorrectly states that the Commission found that Mr. Edens failed to bear his burden of proof in establishing that he suffered “a compensable injury at any time in January, 1999.” The Commission actually adopted the administrative law judge’s finding that Mr. Edens did not prove that “he sustained an injury ... on January 17, 18, 19, or 20, 1999.” This finding could be interpreted to mean that Mr. Edens failed to prove that his injury occurred on a specific date in January, or it could be interpreted to mean, as the dissent concludes, that Mr. Edens did not sustain a compensable injury at all. Considering the fact that the dissent agrees that the Commission relied upon an erroneous statutory interpretation and an erroneous factual finding in reaching its decision, the ambiguity in the Commission’s finding is best resolved by the Commission itself upon remand, not by this court on appeal.

The dissent’s conclusion that there is a substantial basis for the Commission’s denial of relief is speculation. While the Commission is free to accept or reject medical evidence and assign weight to evidence as it deems appropriate, it is not free to arbitrarily ignore objective medical findings nor is it free to reach a conclusion based on an erroneous statutory interpretation. The fact that the dissent has reached a conclusion that may be similar to the one originally reached by the Commission does not necessarily mean that the Commission would have issued the same findings had it applied a correct interpretation of the statute and had it considered all of the objective medical findings. Because we refuse to speculate on how the Commission would have ruled under a correct statutory interpretation and considering all objective findings, the only appropriate remedy is to remand.

We reverse and remand for findings consistent with our interpretation of sections 11-9-102(4)(A)(i) and 4(D).

CORBIN, J., concurring in part; dissenting in part.

L. Corbin, Justice,

concurring in part; dissenting in part. I agree with the majority that the Commission erred in its interpretation of Ark. Code Ann. § 11-9-102(4) (A) (i) (Supp. 2001). I also agree that the Commission erred in concluding that there were no objective findings in the medical evidence because, as we have clearly held, muscle spasms constitute objective findings. See Continental Express, Inc. v. Freeman, 339 Ark. 142, 4 S.W.3d 124 (1999). I disagree, however, with this court’s ultimate decision to reverse and remand this matter, because the Commission was correct in finding that Appellant failed to bear his burden of proof in establishing that he suffered a compensable injury at any time in January 1999. Specifically, Appellant failed to produce medical evidence establishing that he suffered a compensable injury; therefore, it is irrelevant that the Commission failed to credit the physical therapist’s finding of muscle spasms. Simply stated, objective findings alone are of no value to a claimant where the medical evidence fails to establish an injury.

In finding that Appellant failed to sustain his burden of proof, the Commission relied on the deposition testimony of Dr. Michael Young, Appellant’s orthopaedic doctor. In its opinion, the Commission set forth the following testimony:

Dr. Young characterized the lumbar MRI, which had been taken prior to his seeing the claimant, as unremarkable. The MRI had been performed on January 18, 1999. Dr. Young stated that the MRI showed that the claimant had multiple Schmorl’s nodes and had some minimal bulging at the L3-4 disc. Dr. Young diagnosed the claimant’s condition as lumbar sprain/strain. Dr. Young stated in his deposition that there was nothing from the claimant’s MRI that would indicate an acute injury to the claimant. Dr. Young further stated, in response to a question by claimant’s attorney as to whether a bulging disc could be caused by trauma:
A. I think that’s pretty controversial. I think, with a reading as a bulge, that most people you would talk to — be it radiologists, orthopedists, neurosurgeons — I think most people would tell you that that does not necessarily indicate an injury or trauma.
Dr. Young was also asked on follow-up if he qualified his answer as “does not necessarily,” could it be an indication of trauma, and he replied, “I’d be hard pressed. I think I would lean more the other way and say that, in a man his age, that is a pretty normal finding.”
On cross-examination, Dr. Young said, “He does not have a ruptured disc; he does not have any type of compression fracture. There’s not anything structurally that would indicate an acute injury to me.”

If the Appellant’s own doctor opined that the medical evidence did not reveal the existence of any type of acute injury, then what impact does a finding of muscle spasms have on the outcome of this case? The answer is nothing. Objective findings are simply “those findings which cannot come under the voluntary control of the patient.” See Ark. Code Ann. § 11-9-102(16)(A)(i) (Supp. 2001). Objective findings are not synonymous with medical evidence.

The court of appeals has addressed this issue in Ford v. Chemipulp Process, Inc., 63 Ark. App. 260, 977 S.W.2d 5 (1998). There, the claimant alleged that he suffered a compensable injury after he bumped his head and immediately felt a popping in his neck. The claimant did not immediately report the incident, and he did not seek medical treatment for approximately two months. A subsequent x-ray of his neck was normal, but his doctor did detect muscle spasms. The claimant was examined by a neurosurgeon who later opined that there was no indication of an acute injury. The Commission denied his claim for benefits on the basis that there was no medical evidence supported by objective findings to support his contention that he suffered an accidental injury. In affirming the Commission, the court of appeals noted that while muscle spasms were accepted as objective findings, there was no evidence that connected the muscle spasms to the head-bumping incident.

Likewise, there is no evidence here linking the muscle spasms detected by the physical therapist to a work-related incident. This fact is particularly obvious in light of Appellant’s own admission that he has suffered previous back injuries, as well as entries in the medical records that indicate Appellant has a history of muscle spasms dating back to 1989. In fact, six months prior to the January 1999, incident, Dr. Kyle Roper detected muscle spasms in Appellant when examining him for complaints of shoulder and low back pain. This court has stated that where the Commission denied benefits because the claimant failed to meet his burden of proof, we will affirm if the Commission’s decision presents a substantial basis for the denial of relief. Crudup v. Regal Ware, Inc., 341 Ark. 804, 20 S.W.3d 900 (2000). Charged with this standard of review, it is clear that the Commission’s order should be affirmed, as there is a substantial basis for the denial of relief. For this reason, I respectfully dissent.

Concurring in part; dissenting in part.

       Ark. Code Ann. § 11-9-102(5)(A)(i) (Supp. 1997) is now codified at Ark. Code Ann. § 11-9-102(4)(A)(i) (Supp. 2001).

       Other jurisdictions have also noted the difference between “identifiable” and “identified.” For example, the Superior Court of New Jersey, Appellate Division, faced this issue in relation to disability benefits under the Public Employees’ Retirement System and concluded that “identifiable” does not mean “identified.” The requirement that “a traumatic event in order to qualify must be ‘identifiable as to the time and place in which it occurred’ ... is meant only to distinguish a single, discrete event from an ongoing process. . . .” Ambrusio v. Board of Trustees, 489 A.2d 1223, 1224 (N.J. Super. 1985).