author: ROBERT H. Dudley, Justice. ROBERT L. Brown, Justice,

text:
    Timothy J. LEATHERS, Commissioner, Arkansas Department of Finance and Administration v. JACUZZI, INC.
    96-136
    935 S.W.2d 252
    Supreme Court of Arkansas
    Opinion delivered December 16, 1996

      Joyce Kinkead, for appellant.

      Friday, Eldredge & Clark, by: James M. Saxton and Barry E. Coplin, for appellee.
   ROBERT H. Dudley, Justice.

The sole issue in this case is whether Jacuzzi, Inc., and Jacdisc, Inc., its domestic international sales corporation, are entided to file combined income-tax returns. The Arkansas Department of Finance and Administration policy does not permit combined returns, and the Department did not authorize the corporations to file combined returns. The administrative law judge upheld the Department’s actions and ruled that the two corporations could not file combined returns. The chancellor reversed on the ground that combined returns would give a “clear reflection of income and expenses” of the two corporations. We reverse.

Jacuzzi, Inc., has multistate and multinational sales and operations. It formed Jacdisc, Inc., as a wholly owned subsidiary domestic international sales corporation, or DISC, to take advantage of federal tax provisions. In conformity with the federal tax provisions, Jacdisc received “bookkeeping” commissions on international sales of products that were purchased from Jacuzzi. Both corporations have the same management, personnel, facilities, and accounting operations.

In 1980 and 1981 Jacuzzi and Jacdisc each filed separate Arkansas income-tax returns. In 1982 and 1983 the two corporations filed combined returns and, at the same time, filed amended returns for the years 1980 and 1981. The amended returns were filed as combined returns. Neither corporation had requested or received permission from the Commissioner to file combined returns. The Department disallowed the four combined returns on the ground that Arkansas corporate income-tax law does not specifically require or allow combined reporting and sent Jacuzzi a notice of proposed assessment. Jacuzzi countered with a claim for a refund and pursued and exhausted its administrative remedies. In an administrative hearing that combined the assessment and claim for refund, the administrative law judge ruled that the applicable Arkansas income-tax statutes do not authorize combined reporting, but that the Uniform Division of Income for Tax Purposes Act (UDITPA) permits the Department to accept combined reporting. The administrative judge concluded that, although the Department could accept combined reporting under UDITPA, the Department policy was not to accept such returns; therefore, Jacuzzi was not entitled to relief.

Jacuzzi filed this suit in chancery court and asked that the court order the Department to accept its income-tax returns on a combined basis with Jacdisc and to decree that it was entitled to the refunds. The chancellor ruled that a combined return was mandated in order to achieve a clear reflection of income and expenses of the corporations and granted relief to Jacuzzi. The Department appeals.

The Department’s primary point of appeal is that the chancellor erred in ruling that Arkansas law does not prohibit, but rather requires, the filing of combined returns in order to achieve a clear reflection of income. Included within the primary point of appeal are a number of subpoints.

In the first of its subpoints the Department contends that the chancellor erred in finding that its 1982 instruction booklet provided for filing of combined returns. The argument is well taken. The instruction booklet states that “DISC corporations are treated as regular business corporations” and “Business corporations, financial institutions, domestic insurance companies and DISC corporations should use Ark. Form 1100 CT.” The booklet thus indicates that the two corporations should each file a separate return.

In its second subpoint, the Department contends that the chancellor erred in finding that the Department refused to allow the four combined returns on the ground that the corporations “had in effect filed ‘consolidated’ returns.” This argument is also well taken. In refusing to allow the corporations to file the amended combined returns, the Commissioner wrote that Arkansas statutes authorize consolidated returns, but, “Arkansas Corporate Income Tax Law does not specifically require or allow combined reporting. Therefore, the Revenue Division will not utilize unitary combined reporting to tax multistate or multinational corporations. Also, the Revenue Division will not accept returns filed on a unitary combined report basis.”

Consolidated reporting is based on the principle that a group of corporations is taxed on their consolidated taxable income, “representing principally the results of its dealings with the outside world after the elimination of intercompany profit and loss.” 3 Boris I. Bittker & Lawrence Lokken, Federal Taxation of Income, Estates, and Gifts ¶ 90.5 at 90 (2d ed. 1988). Combined reporting is distinguished from consolidated reporting as follows:

In a combined report ... the combined income of the affiliated group is not computed for the purpose of taxing such income, but rather as a basis for determining the portion of income from the entire unitary business attributable to sources within the state which is derived by members of the group subject to the state’s jurisdiction.

Chesapeake Indus. v. Comptroller, 59 Md. App. 370, 376, 475 A.2d 1224, 1227 (1984) (quoting J. Buresh and M. Weinstein, Combined Reporting: The Approach and Its Problems, 1 Jnl. of State Taxation 5 (1982)). Or, as stated by the Oregon Supreme Court:

A combined report is an accounting method whereby each member of a group carrying on a unitary business computes its individual taxable income by taking a portion of the combined net income of the group. A consolidated return is a taxing method whereby two corporations are treated as one taxpayer.

Caterpillar Tractor Co. v. Department of Revenue, 289 Or. 895, 896, 618 P.2d 1261, 1262-63 (1980) (emphasis in the original).

The chancellor ruled that combined returns are “mandated under the present facts so as to achieve a clear reflection of income and expenses ofjacdisc and Jacuzzi pursuant to Ark. Code Ann. § 26-51-805 (1987).” In its third subpoint the Department notes that the cited statute involves consolidated corporate income tax returns; consequendy, it does not support the chancellor’s ruling that the statute “mandates” the filing of a combined return. This argument is also well taken as the statute does not “mandate” the filing of a combined return or the filing of any specific type of return. The Department additionally notes that, contrary to the statute supporting the filing of combined returns, the chancellor found that “[t]he parties are in agreement that Ark. Code Ann. § 26-51-805 prohibits a DISC from filing ‘consolidated’ income tax returns with its parent corporation because the statute refers to federal law relating to qualifications to file consolidated returns for federal purposes.”

In its next subpoint, the Department argues that the chancellor erred in ruling that Jacuzzi’s filing of combined returns was not prohibited by Uniform Division of Income for Tax Purposes Act because Jacuzzi did not petition the Department for permission to utilize the combined reporting method. Before discussing the details of this subpoint, it might be helpful to state that there is no express provision in UDITPA, Ark. Code Ann. §§ 26-51-701— 723, that requires or allows combined reporting. However, there is a discretionary provision in UDITPA upon which combined reporting can be allowed and, in fact, is allowed by a number of states. That provision is section eighteen of the Uniform Act, and the Arkansas Code carries forward the last two figures of the numbering system, so that it is section 26-51-718. The section is as follows:

If the allocation and apportionment provisions of this sub-chapter do not fairly represent the extent of the taxpayer’s business activity in this state, the taxpayer may pétition for or the Director of the Department of Finance and Administration may require, in respect to all or any part of the taxpayer’s business activity, if reasonable:
(a) Separate accounting;
(b) The exclusion of any one (1) or more of the factors;
(c) The inclusion of one (1) or more additional factors which will fairly represent the taxpayer’s business activity in this state; or
(d) The employment of any other method to effectuate an equitable allocation and apportionment of the taxpayer’s income.

There is a split of authority among the states that have adopted the UDITPA; some have not allowed the combined reporting, while others have found that the discretionary provisions within section eighteen of the UDITPA allow such reporting. Jerome R. Hellerstein, State Taxation ¶ 8.12[1] at 8-102 (1993). The administrative law judge found that the foregoing statute was “permissive in terms of allowing a state to accept ‘combined reporting.’ ” We have never specifically addressed this issue, but our holdings are consistent with the finding of the administrative law judge. See Pledger v. Illinois Tool Works, 306 Ark. 134, 812 S.W.2d 101 (1991) and Land O’Frost v. Pledger, 308 Ark. 208, 823 S.W.2d 887 (1992).

In Caterpillar Tractor Co. v. Lenckos, 84 Ill. 2d 102, 417 N.E.2d 1343 (1981), the Illinois Supreme Court held:

Considering whether UDITPA authorizes the use of unitary apportionment, we first observe that UDITPA does not make any reference to unitary apportionment or combined reporting. The absence of specific reference to the unitary method is not, however, critical, for in a number of jurisdictions that adopted UDITPA and in some of them, the MTC as well, courts have held that unitary apportionment or combined reporting was authorized though the particular income tax statute made no reference to this method of reporting. In Coca Cola Co. v. Department of Revenue (1975), 271 Or. 517, 533 P.2d 788, the Oregon Department of Revenue applied a unitary or combined apportionment method of accounting to the income tax returns of the plaintiff corporation and its wholly owned subsidiaries, which had filed separate returns using Oregon’s three-factor apportionment formula, which is similar to that set out in the Illinois statute. The Department argued that the combined method, though not specifically provided for in the tax statutes into which UDITPA had been incorporated, would more accurately reflect the income of what it contended was a unitary business operation. Concluding that the company’s syrup and bottling operations were so inextricably connected as to constitute a unitary business, the court stated: “The combined method of apportionment reporting is wholly consistent with, and a natural extension of, the apportionment method.” (271 Or. 517, 528, 533 P.2d 788, 793.) The court held that the plaintiff and its subsidiaries “are all part of the same unitary operation and were required to use the combined method of reporting for the tax years in question.” 271 Or. 517, 529, 533 P.2d 788, 794. See also American Smelting & Refining Co. v. Idaho State Tax Com. (1979), 99 Idaho 924, 592 P.2d 39; Montana Department of Revenue v. American Smelting & Refining Co. (1977), 173 Mont. 316, 567 P.2d 901.
The Supreme Court has also held that the absence of any statutory reference to the unitary method of reporting does not forbid its use. In Butler Brothers v. McColgan (1942), 315 U.S. 501, 62 S. Ct. 701, 86 L. Ed. 991, the plaintiff, an Illinois corporation conducting a wholesale goods and general merchandise business, was licensed to conduct business in California. The company had wholesale distributing divisions located in seven states, including California, each serving a district area and each controlling its own sales force, accounting procedures, sales operations and credit and financing procedures as well. Though the California tax statute did not specifically authorize the combined method of reporting or make any references to unitary operations, the court upheld the State’s decision to apply the unitary method to the combined income derived from the operations of the seven divisions. In its holding the court stated that “this court has recognized that unity of the use and management of a business which is scattered through several states may be considered when a State attempts to impose a tax on an apportionment basis. As stated in Hans Rees’ Sons, Inc. v. North Carolina [(1931), 283 U.S. 123, 133, 51 S. Ct. 385, 389, 75 L. Ed. 879, 905], ‘the enterprise of a corporation which manufactures and sells its manufactured product is ordinarily a unitary business, and all the factors in that enterprise are essential to the realization of profits.’ ” 315 U.S. 501, 508, 62 S. Ct. 701, 704-05, 86 L. Ed. 991, 996.
In a later case, Northwestern States Portland Cement Co. v. Minnesota (1959), 358 U.S. 450, 79 S. Ct. 357, 3 L. Ed. 421, the court addressed a similar challenge to the use of a unitary apportionment method, and in citing Hans Rees’ and other apportionment decisions (e.g., Bass, Ratcliff & Gretton, Ltd. v. State Tax Com. (1924), 266 U.S. 271, 45 S. Ct. 82, 69 L. Ed. 282; Underwood Typewriter Co. v. Chamberlain (1920), 254 U.S. 113, 41 S. Ct. 45, 65 L. Ed. 165) the court upheld the use declaring: “These cases stand for the doctrine that the entire income of a corporation, generated by interstate as well as intrastate activities, may be fairly apportioned among the States for tax purposes by formulas utilizing in-state aspects of interstate affairs.” 358 U.S. 450, 460, 79 S. Ct. 357, 363, 3 L. Ed. 421, 428. See also Exxon Corp. v. Wisconsin Department of Revenue (1980), 447 U.S. 207, 100 S. Ct. 2109, 65 L. Ed. 2d 66; Mobil Oil Corp. v. Commissioner of Taxes (1980), 445 U.S. 425, 100 S. Ct. 1223, 63 L. Ed. 2d 510.

Id. at 118-20, 417 N.E.2d at 1352-53. Similarly, we hold that Ark. Code Ann. § 26-51-718 (1987) grants the Commissioner the discretionary power to require or permit the apportionment on a combined basis of the income of a taxpayer that is part of a unitary business.

Even so, Jacuzzi is not entitled to the relief granted by the chancellor because it did not apply to the Commissioner to be permitted to use this method of accounting in accordance with section 26-51-718. This evidence was clearly before the chancellor. The cross-examination of Charles Bellott, assistant manager of the corporation income-tax section of the Department, and a nineteen-year employee, is abstracted as follows:

I believe the Director can take into consideration various factors in related companies in order to arrive at a clear reflection of income. A clear reflection of income has a relationship to the activities within the state. Ark. Code Ann. § 26-51-718 states something to the effect that the inclusion of one or more additional factors will fairly represent the business activity in this State. It says the Director or the Department may consider those factors in the application of the taxpayer. It is the Department’s goal to arrive at a clear reflection of income.

On redirect, he testified as follows:

Ark. Code Ann. § 26-51-718 deals with the allocation and apportionment provisions of the UDITPA section. A taxpayer who wishes to deviate from the standard formulary apportionment has to petition for a change. Jacuzzi has not petitioned for a change. The Director never authorized the deviation before the filing of the returns. Jacuzzi deviated without the Director’s permission from the formulary apportionment by filing these returns. That’s an additional basis for rejecting the returns. A taxpayer cannot petition by filing a return. From my review of the returns, a petition to utilize combined unitary reporting is not contained in any of the returns.

Jacuzzi counters that “[e]ven were such a petition required, Jacuzzi’s filing for refund using the combined method and filing returns using the combined method certainly constitutes a ‘petition’ to employ the combined reporting method. Any additional procedure would be superfluous.” Jacuzzi’s response is not well taken, as it would violate the separation of powers doctrine.

The Department of Finance and Administration is a part of the executive branch. In a judicial review of the action of an administrative agency of the executive department, a trial court cannot, on appeal, substitute its judgment for that of the executive department, but is restricted to considering whether, as a matter of law, the agency acted fraudulently, arbitrarily, or capriciously; whether the administrative action was substantially supported by substantial evidence; and whether the agency’s actions were within the scope of its authority. Here, the judicial branch attempted to exercise the power of the executive branch.

Reversed and remanded for proceedings consistent with this opinion.

BROWN, J., concurring.

ROBERT L. Brown, Justice,

concurring. I concur with the conclusion in the majority opinion that the Department of Finance and Administration must first address the issue of combined reporting as it relates to Jacuzzi, Inc., and Jacdisc, Inc., and this has not been done. See Ark. Code Ann. § 26-51-718 (Repl. 1992).

What concerns me is the following exchange that occurred between justices of this court and counsel for the Department at oral argument:

COUNSEL FOR DEPARTMENT: One final issue I’d like to address with the few seconds I have left is the issue of discretion. That is the key to this case. The director is vested with the discretion to use an alternative method should a taxpayer request an alternative method.
JUSTICE BROWN: What factors would the director look to in determining whether combined reporting was appropriate or not?
COUNSEL FOR DEPARTMENT: At this point, I do not believe that the director will allow combined reporting under any circumstances.
JUSTICE BROWN: Well then discretion goes out—
COUNSEL FOR DEPARTMENT: It is discretionary and he cannot be forced to exercise that discretion by a taxpayer.
JUSTICE BROWN: But as far as if he is, if there has been a petition filed and he is in the process of determining whether combined reporting is appropriate or not, what factors would the director look to?
COUNSEL FOR DEPARTMENT: Uh, whether or not it would equitably or more equitably allocate or apportion the income of the taxpayer. But like I said earlier, the director does not allow combined reporting at present, and that is a discretionary matter with him.
JUSTICE BROWN: So I mean, he’s exercised his discretion by saying we’re just not going to allow combined reporting under any circumstances.
COUNSEL FOR DEPARTMENT: Correct, your honor. And with that, it gets back to the discretion, that it’s within his discretion as to—
JUSTICE GLAZE: Well that’s no discretion at all, is it?
COUNSEL FOR DEPARTMENT: Well, that is the exercise of discretion not to allow that. It does come back to the same issue should someone, who wants, because they’re asking for a refund here. Of course they’re gonna say this more accurately or equitably reflects their income. They get a refund. If it were on the — if the tables were turned and they owed taxes, it would be a different matter. They wouldn’t be here asking to file a combined return. It would be a non-issue. So, the same holds true with individual income tax. They could possibly find another way to apportion their income when they have in-state and out-of-state income. Individuals must report that out-of-state income—
JUSTICE BROWN: Well, if we sent this back for an appropriate petition to be filed for combined reporting, and for a hearing to be held, you’re telling me that under no circumstances would the director authorize combined reporting?
COUNSEL FOR DEPARTMENT: It is my understanding at this point that is correct, your honor. For combined reporting, it would not be allowed.

The only conclusion that can be reached from this colloquy is that if Jacuzzi filed a petition for combined reporting, it would be a vain and useless act. We do not mandate exercises in futility.

Our statutes provide that a taxpayer may petition the Department for a more equitable allocation and apportionment of the taxpayer’s income related to the extent of the taxpayer’s business activity in this state, and that the Director of the Department will consider the reasonableness of the request. Ark. Code Ann. § 26-51-718 (Repl. 1992). Thus, the Department cannot simply dismiss all petitions for combined reporting out of hand. It must consider the relevant factors and exercise its discretion. To do otherwise violates § 26-51-718 and would constitute arbitrariness in my judgment.

I concur in the majority opinion only because I conclude that Department counsel is not the final word on the subject and because I agree that the chancery court is limited to reviewing actions taken by the Department. In this case, the chancery court made the initial decision to permit combined reporting and in doing so exceeded the scope of its review.


source: Caselaw Access Project

author: David NEWBERN, Justice.

license: Public Domain

text:
    Debra BAYLESS v. STATE of Arkansas
    CR 96-920
    935 S.W.2d 534
    Supreme Court of Arkansas
    Opinion delivered December 16, 1996

      Dennis R. Molock, Public Defender, for appellant.

      Winston Bryant, Att’y Gen., by: Vada Berger, Asst. Att’y Gen., for appellee.
   David NEWBERN, Justice.

Debra Bayless, the appellant, was charged as an habitual offender in the Arkansas County Circuit Court with five counts of theft of property. Ark. Code Ann. §§ 5-36-103(a)(2); 5-4-501 (Repl. 1993). At the conclusion of the State’s case-in-chief, the Trial Court dismissed one of the counts upon Ms. Bayless’s motion for directed verdict. The jury returned guilty verdicts on the remaining counts, and Ms. Bayless was sentenced to a prison term of sixty years and a fine of $8,000. On appeal, Ms. Bayless contends that her conviction should be reversed because (1) the State was permitted to introduce the testimony of her former husband, Ricky Bayless, in violation of Ark. R. Evid. 615; and (2) the State was permitted to introduce the testimony of Mr. Bayless and a bank employee, as well as a subpoenaed bank statement, despite the State’s failure to disclose the evidence in response to a request made pursuant to Ark. R. Crim. P. 17.1. We affirm the conviction because Ms. Bayless’s arguments are either meritless or barred on procedural grounds.

The abstract reveals that Ricky and Debra Bayless were employed by the Lone Tree Cemetery in Stuttgart shortly after their marriage in November 1993. Mr. Bayless served as a caretaker, and Ms. Bayless worked in an office on the grounds. Although the Baylesses soon separated, they continued to operate a business at the cemetery known as D & R Monument, which sold cemetery monuments and grave stones. Ms. Bayless ran the business out of the cemetery office. She would receive orders and payments from interested customers and forward the orders to a manufacturer in Georgia known as the Worley Monument Company.

Ms. Bayless was charged with theft after a number of her customers complained to the local prosecutor that they had given checks to Ms. Bayless payable to D & R Monument for monuments they did not receive. The State attempted to show at trial that Ms. Bayless had taken her customers’ checks by deceit, with the purpose of depriving her customers of their money, and with no intention of providing them with the monuments they ordered. The testimony given by the complaining witnesses during the State’s casein-chief established that, from January to April 1995, Ms. Bayless received the customers’ monument orders and checks in amounts ranging from $218 to $1,430; that Ms. Bayless endorsed the checks and cashed or deposited them, typically on the day the checks were written; that the customers received neither monuments nor refunds; and that they attempted to inquire with Ms. Bayless and had difficulty locating her. In addition, the State introduced the complaining witnesses’ receipts and cancelled checks. This was the extent of the State’s case-in-chief.

Ms. Bayless’s case-in-chief consisted of her testimony and the exhibits she introduced. Although Ms. Bayless acknowledged receiving monument orders from the complaining customers and admitted to taking their checks, she denied taking the checks with the intent to deceive. She maintained that she forwarded the orders to the Worley Monument Company in Georgia but explained that the monuments were not delivered because D & R Monument had not made sufficient payments on the invoices. According to Ms. Bayless, it was Mr. Bayless’s responsibility to pay the business’s bills, and she testified that she had made the customers’ checks available for that purpose by depositing them in D & R Monument’s account at Farmers and Merchants Bank or by cashing the checks and giving the cash to Mr. Bayless. Ms. Bayless acknowledged that she was authorized to write checks on D & R Monument’s account, but she insisted that she could not pay any bills, including those owed to the Worley Monument Company, with D & R Monument funds unless she obtained Mr. Bayless’s permission.

Ms. Bayless testified that most of the debt owed by D & R Monument to the Worley company remains unpaid. She indicated, however, that she made a $500 payment "with a cashier’s check that she claimed to have purchased with her own money on April 13, 1995. On cross-examination, Ms. Bayless admitted that this was the same date on which she cashed a check for approximately $700 written by Nellie Mayfield, one of the complaining customers. Ms. Bayless insisted, however, that she gave the cash to Mr. Bayless.

Upon further cross-examination, Ms. Bayless denied depositing any of her customers’ checks in her personal account. The prosecutor specifically asked Ms. Bayless whether, on January 30, 1995, she deposited into the savings account she shared with her boyfriend, Jeffrey Rose, any portion of the $1,430 check that was payable to D & R Monument and written on January 30 by Ida Mae Gaither, one of the complaining customers. Ms. Bayless answered in the negative and asserted that the Gaither check was deposited into the D & R Monument business account on January 30, 1995.

The prosecutor then showed Ms. Bayless the cancelled check written by Ms. Gaither, as well as a bank statement on the Bayless-Rose savings account. After examining the documents, Ms. Bayless acknowledged that the bank statement revealed a large deposit in the account on January 30, 1995, and that the Bayless-Rose account number — not the D & R Monument account number — appeared on the back of Ms. Gaither’s cancelled check. Ms. Bayless’s explanation for the account activity on January 30 was that Mr. Rose had deposited his pay check. Ms. Bayless further suggested that the appearance of the Bayless-Rose account number on the back of the Gaither check was due to an error on the part of the bank. Defense counsel did not object to the prosecutor’s use of the bank statement in the course of cross-examining Ms. Bayless.

The State then offered what it asserted was rebuttal evidence. The State first called Mary Shelton, an employee of the Farmers and Merchants Bank. Defense counsel objected to Ms. Shelton because the State had not disclosed her name as required by Rule 17.1. The State responded that Ms. Shelton was a rebuttal witness and that it had no obligation to furnish the names of rebuttal witnesses in discovery. Defense counsel did not challenge that assertion, and the Trial Court permitted Ms. Shelton to testify.

The prosecutor showed Ms. Shelton the bank statement on the Bayless-Rose savings account. Defense counsel requested a sidebar conference, and the prosecutor revealed that he had obtained the bank statement on the morning of trial but that he had subpoenaed the statement four or five days prior to trial. Defense counsel objected to the prosecutor using the statement because it had not been furnished. The prosecutor again claimed that he had no obligation to disclose the bank statement because it was rebuttal evidence. Defense counsel maintained that the bank statement was not genuine rebuttal evidence because it had been subpoenaed well before trial and because the prosecutor, by his own admission, anticipated using it at trial. The Trial Court allowed the prosecutor to use the bank statement in the course of questioning Ms. Shelton and to introduce the statement into evidence over defense counsel’s objection.

Ms. Shelton examined the bank statement on the stand and testified that a deposit of $1200 was made in the Bayless-Rose savings account on January 30, 1995. Ms. Shelton also examined the cancelled check for $1,430 written by Ms. Gaither and testified that the account number stamped on the back of the check was the number of the Bayless-Rose savings account. Ms. Shelton concluded that the $1,200 deposit was made with funds from the Gaither check, but she conceded that she did not know who made the deposit.

The State then called Mr. Bayless as its final rebuttal witness. Defense counsel initially objected to Mr. Bayless because his name had not been disclosed by the State. The prosecutor argued that Mr. Bayless was a true rebuttal witness because he would respond to Ms. Bayless’s allegations that he had received some of the money paid by the customers. It is not clear from the abstract if defense counsel obtained a ruling on this particular objection.

Defense counsel raised a second objection to Mr. Bayless based on Ark. R. Evid. 615. Defense counsel conducted a voir dire examination of Mr. Bayless and elicited the following testimony as abstracted:

I was notified to come up here and testify a litde bit ago. I was notified by David Cowart, a Stuttgart police officer, within the last hour and a half. I have not really been made aware of any of the evidence or of what any of the evidence has been so far. I figured, my speculation is that my former wife probably turned it around where it’s all my fault. No one has discussed it clearly with me anyway. It was just stated that possibly it was looking like she was trying to blame it all on me. I am being called upon to testify basically to defend my word. I had been told that she, not really that she had blamed, just basically it looked like it was all my fault. ... She has said that I’m the reason that ... [t]he bills haven’t been paid ... and the monuments haven’t been ordered.

Mr. Bayless indicated that he had arrived at the courthouse around 2:00 p.m. that day, that he had not talked with the prosecutor before his arrival, and that the prosecutor had not told him what to say.

On the basis of this voir dire testimony, defense counsel objected to Mr. Bayless’s testimony and asked the Trial Court to declare Mr. Bayless “unavailable” as a witness because he had learned the content of Ms. Bayless’s testimony in violation of Ark. R. Evid. 615. The prosecutor argued that he had not prepared Mr. Bayless and that he had merely explained to Mr. Bayless that his testimony was necessary in order to refute Ms. Bayless’s claim that she had given Mr. Bayless the customers’ money. The Trial Court overruled the objection and permitted Mr. Bayless to testify.

Mr. Bayless testified that Ms. Bayless handled the day-to-day business of D & R Monument and was responsible for paying the business’s bills. Mr. Bayless said that his activities around the cemetery were limited to caring for the grounds and that he had little to do with the business’s affairs. Mr. Bayless specifically denied receiving any cash from Ms. Bayless derived from the checks paid by customers for grave markers or monuments, but he acknowledged that Ms. Bayless had given him checks that he deposited in the D & R Monument account.

Í. The witness-sequestration rule

We first address Ms. Bayless’s argument that the Trial Court received Mr. Bayless’s testimony in violation of the “witness-sequestration rule” set forth at Ark. R. Evid. 615. That rule provides as follows:

At the request of a party the court shall order witnesses excluded so that they cannot hear the testimony of other witnesses, and it may make the order of its own motion. This rule does not authorize exclusion of (1) a party who is a natural person, or (2) an officer or employee of a party that is not a natural person designated as its representative by its attorney, or (3) a person whose presence is shown by a party to be essential to the presentation of his cause.

Although Ms. Bayless has failed to abstract the “invocation of the rule,” we reach the merits of her argument because other portions of the abstract make clear that the parties indeed requested the exclusion of witnesses in accordance with Rule 615.

Ms. Bayless contends that the Trial Court erred in permitting Mr. Bayless to testify because he had ascertained the nature of her testimony through communications with the prosecutor before taking the stand. Ms. Bayless apparently bases her argument on Mr. Bayless’s testimony that he was informed that Ms. Bayless had “blamed” him for the non-delivery of the customers’ monuments and on the prosecutor’s statement that he told Mr. Bayless that his testimony was necessary to refute some of Ms. Bayless’s statements.

The thrust of Ms. Bayless’s argument is that Rule 615 prohibits an attorney, in the course of preparing his or her witness, from describing in any way what another witness has said on the stand. We are not aware of any case law from this jurisdiction that stands for such a broad proposition, and we reject Ms. Bayless’s interpretation of Rule 615 because it would unduly restrict an attorney’s ability to consult with witnesses before examining them at trial.

Like other courts, we believe that “[attorneys, including the district attorney and his assistants, are entitled to talk with witnesses before placing them upon the witness stand.” State v. Carswell, 253 S.E.2d 635, 637 (N.C. Ct.App. 1979). It is not impermissible for “the prosecutor to discuss with a witness the testimony he would give from the witness stand,” State v. Brock, 633 P.2d 805, 814 (Or.App. 1981), and we agree that a prosecuting attorney “has a right to interview his witnesses before they testify, and any sequestration order could not prohibit such.” United States v. Klinginsmith, 25 F.3d 1507, 1511 (10th Cir. 1994). We simply are not aware of any rule of evidence that “prohibits counsel for either side in interviewing witnesses singly or in groups preparatory to trial from reviewing with them the version of every witness as to the facts.” Porter v. State, 564 So.2d 31, 34 (Miss. 1990). See Lutz v. State, 536 N.E.2d 526, 529-30 (Ind.App. 1 Dist. 1989); State v. Allison, 147 N.W.2d 910, 912 (Iowa 1967), cert. denied 391 U.S. 906. See also Moffett v. State, 540 So.2d 1313, 1317 (Miss. 1989)(“The purpose of the rule is not, and never has been, to prevent attorneys from consulting with their clients’ witnesses.”)

We are well aware of Rule 615’s necessity in trial practice. As we have stated, the rule is a valuable tool for “discouraging and exposing fabrication, inaccuracy, and collusion.” King v. State, 322 Ark. 51, 55, 907 S.W.2d 127 (1995) (citations and internal quotations omitted). See also Moffett, 540 So.2d at 1317 (stating sequestration is “a means of insuring that a witness’ testimony would not be influenced by the testimony of other witnesses”). With today’s opinion, we simply recognize that Rule 615 imposes no per se bar on an attorney’s ability to prepare a witness through proper methods.

We caution, however, that there is a “line that exists between perfectly acceptable witness preparation on the one hand, and impermissible influencing of the witness on the other hand.” State v. Earp, 571 A.2d 1227, 1235 (Md. 1990). That line “may sometimes be fine and difficult to discern.” Id. We agree with the Mississippi Supreme Court that trial lawyers, in the course of preparing their witnesses, “must be careful not to indicate specifically what other witnesses have testified about.” Douglas v. State, 525 So.2d 1312, 1319 (Miss. 1988) (emphasis added), and “[w]e admonish trial judges to be aware of the possibility that the sequestration rule may be circumvented in the guise of attorneys ‘prepping’ their witnesses.” Id. Whether an attorney violates Rule 615 in the course of preparing a witness must be determined on a case-by-case basis.

On this record, we cannot say that the communication between Mr. Bayless and the prosecutor amounted to an “indirect method of hearing testimony of another witness” in violation of Rule 615. Doby v. State, 532 So.2d 584, 589 (Miss. 1988). Mr. Bayless testified that “[n]o one has discussed [Ms. Bayless’s testimony] clearly with me anyway,” and there is no indication that Mr. Bayless fabricated or tailored his testimony in violation of the rule. Moreover, the record does not suggest that the prosecutor told Mr. Bayless what to say on the stand or revealed to him the specifics of Ms. Bayless’s testimony. At most, we conclude the prosecutor told Mr. Bayless why he had been called to testify and in so doing indicated the general nature of Ms. Bayless’s testimony. We find that the prosecutor made this disclosure consistently with Rule 615 and affirm the Trial Court on this point.

2. Discovery and rebuttal evidence

We now turn to Ms. Bayless’s assertion that the Trial Court should have excluded the Bayless-Rose bank statement and the testimony of Ms. Shelton and Mr. Bayless on account of the prosecutor’s failure to disclose his intention to use this evidence in discovery. We affirm on these points because they are not preserved for appellate review.

Arkansas Rule of Criminal Procedure 17.1(a)(v) provides that the prosecuting attorney shall disclose to defense counsel, upon timely request, ... any books, papers, documents, photographs or tangible objects, which the prosecuting attorney intends to use in any hearing or at trial or which were obtained from or belong to the defendant .

As we noted above, the prosecutor first used the bank statement in the course of cross-examining Ms. Bayless. The prosecutor used the statement again, and introduced it into evidence, during the rebuttal phase. Only at this second juncture did defense counsel object to the statement on the basis that the statement had not been furnished. On appeal, Ms. Bayless argues that the Trial Court erred in permitting the prosecutor to use the bank statement, but we agree with the State’s position that this argument is proce-duraUy barred in light of defense counsel’s failure to object to the statement at the first opportunity to do so — i.e., when it was used during cross-examination. The objection was made only during the rebuttal phase of the trial, and we find that it was untimely. Turner v. State, 325 Ark. 237, 245, 926 S.W.2d 843 (1996); Johnson v. State, 325 Ark. 197, 204, 926 S.W.2d 837 (1996).

We also find that defense counsel failed to preserve his discovery-based objections to Mr. Bayless and Ms. Shelton. As we indicated, the abstract does not reveal any ruling from the Trial Court on the objection to Mr. Bayless. The failure of an appellant to obtain a ruling on her objection is fatal to her claim. Laudan v. State, 322 Ark. 58, 59, 907 S.W.2d 131 (1995). The objection to Ms. Shelton is likewise not preserved for review because defense counsel did not challenge the State’s assertion that she was a genuine rebuttal witness whose name was not required to be furnished in discovery.

Affirmed.

GLAZE, J., concurs with respect to Part One of the opinion.


author: TOM GLAZE, Justice.

text:
    Michael Ryan WEBB v. STATE of Arkansas
    CR 96-941
    935 S.W.2d 250
    Supreme Court of Arkansas
    Opinion delivered December 16, 1996

      Dover & Dixon, by: James R. Rhodes, III, and Jack T Lassiter, for appellant.

      Winston Bryant, Att’y Gen., by: David R. Raupp, Asst. Att’y Gen., for appellee.
   TOM GLAZE, Justice.

Appellant Michael Webb brings this appeal from his convictions for the first-degree murder of Jason Hatcher and first-degree battery of Timothy McGarity, and his respective sentences for each crime of forty and six years’ imprisonment. This is the third appeal this court has had involving Hatcher’s death and McGarity’s battery. See Carter v. State, 324 Ark. 249, 921 S.W.2d 583 (1996); Jones v. State, 321 Ark. 649, 907 S.W.2d 672 (1995). Webb’s points for reversal are that the trial court erred in denying his directed-verdict motions and in refusing his proffered “mere presence” instruction..

We first dispose of Webb’s directed verdict motion issue because it was not properly preserved below. At the close of the State’s case, Webb moved for a directed verdict based on insufficiency of the evidence, which the trial court denied. After the jury was instructed but before it began deliberations, Webb renewed his motion for directed verdict, stating the evidence was insufficient to prove the State’s charges and failed to show he was an accomplice. As we held in Claiborne v. State, 319 Ark. 602, 892 S.W.2d 511 (1995), a motion for directed verdict must be renewed at the end of the “close of the case,” Ark. R. Crim. P. 33.1, and an attempt to renew such motion after the jury has been charged is not timely.

We now turn to Webb’s second point which undoubtedly is the main argument on appeal. He argues that, at the beginning of the trial court’s consideration of the instructions submitted by the parties, he proffered the following “mere presence” instruction:

DEFENDANT’S REQUESTED INSTRUCTION NO. 2

Mere presence, acquiescence, silence, or knowledge that a crime is being committed, in the absence of a legal duty to act, is not sufficient to make one an accomplice. Therefore, if you find that Ryan Webb was only present while a crime was being committed and did not have a legal duty to act, then he is not an accomplice. Ford v. State, 296 Ark. 8, 753 S.W.2d 258 (1988).

The State objected to Webb’s foregoing instruction, urging it was not an AMCI 2d instruction. The State further contended that AMCI 2d 401 on accomplice liability was a correct statement of the law, and Webb’s “mere presence” instruction simply was unnecessary. The trial court agreed with the State, and denied Webb’s proffer.

On appeal, Webb argues that, although AMCI 2d does not contain a “mere presence” instruction, the rule of law contained in his proposed instruction is recognized in the comment to AMCI 2d 401, the accomplice instruction. Citing other jurisdictions, Webb asserts the “mere presence” instruction is commonly given in criminal cases when warranted. See Devitt & Blackmar, § 16.09; United States v. Avecedo, 842 F.2d 502 (1st Cir. 1988); United States v. Love, 767 F.2d 1052 (4th Cir. 1985); United States v. Keefer, 799 F.2d 1115 (6th Cir. 1986). Webb argues the record warranted the trial court’s giving a “mere presence” instruction and its failure constituted a due process violation. We cannot agree.

First, we disagree with Webb’s assertion that a “mere presence” instruction would have been warranted even if it was included in AMCI2d. Our law is well settled that there is no error in the refusal to give an instruction where there is no evidence to support the giving of that instruction. While we need not discuss all the evidence at Webb’s trial, we do relate that relevant proof necessary to decide the issue. Blaney v. State, 280 Ark. 253, 657 S.W.2d 531 (1983); Couch v. State, 274 Ark. 29, 621 S.W.2d 694 (1981).

Timothy McGarity and Clay Cochran departed McGarity’s vehicle on the Harvest Foods’ parking lot in Sherwood, and started a fight with James Gross and Stan Messer. Other vehicles, containing friends of McGarity and Cochran, had followed McGarity’s car onto the lot and those friends congregated around the fight. A blue Honda Accord carrying friends of Gross and Messer came on the lot and stopped in the vicinity of the fight. Gunshots were fired and Jason Hatcher, who had been in a vehicle following McGarity’s vehicle, was fatally wounded. McGarity was also shot and wounded in the leg. Witnesses identified Chad Jones, an occupant of the Honda as having a handgun. Another witness saw Gross shooting a gun. No one identified Webb as being present on the parking lot.

The State’s evidence connecting Webb to the shooting centered on the testimony of Monica Parker and Jessica Fleming, who testified that they were visiting at a friend’s apartment on the night Hatcher had been shot. Webb, Jones, Jason Carter, and James Gross entered the apartment and were talking about a fight they just had. They said Webb was carrying a long-barreled gun and when he sat down in a recliner he laid the gun down beside him. Parker and Fleming stated Webb said something to the effect that “I shot someone” or “I think I got one.” When Webb left with his friends, Parker and Fleming said he took the gun with him. Webb’s apartment was searched the next day by officers, who found a .30 caliber carbine. Webb concedes that expert testimony linked the .30 caliber casings found at the crime scene to Webb’s carbine.

In sum, Webb fails to point to any evidence that showed he was merely present at the crime scene when Hatcher and McGarity were shot. Instead, the only evidence presented showed he, indeed, had been present at Harvest Foods’ parking lot at the time of the shootings, but in being present, he shot someone and afterwards was overheard talking about it.

In these circumstances, we conclude Webb would not have been entitled to a “mere presence” instruction even if it had been in AMCI2d. In addition, we emphasize, too, that our law is well settled that, when a trial court determines that the jury be instructed on an issue, the model criminal instructions shall be used unless the trial court concludes it does not accurately state the law. Moore v. State, 317 Ark. 630, 882 S.W.2d 667 (1994). Here, AMCI2d 401 on accomplice liability was clearly applicable to the facts of this case, and required no further explanation of the law.

       From the record, we fail to find where Webb raised a due process issue, but that failure is insignificant since we hold the evidence is insufficient to support a “mere presence” instruction, even it it was an AMCI2d instruction.

       We note that Webb also argued that Parker’s and Fleming’s testimonies were unreliable because, on cross examination, they acknowledged they may have told an officer that Webb said, “Yeah, we shot some people.” Whether Webb had been overheard to say “I” or “we" does little to help his “mere presence” argument and only underscores he and someone else were implicated in the shootings.


author: ROBERT L. Brown, Justice.

text:
    Terry Lynn CARROLL v. STATE of Arkansas
    96-960
    934 S.W.2d 523
    Supreme Court of Arkansas
    Opinion delivered December 16, 1996

      William R. Simpson, Jr., Public Defender, by: C. Joseph Cordi, Jr., Deputy Public Defender.

      Winston Bryant, Att’y Gen., by: Brad Neuman, Asst. Att’y Gen., for appellee.
   ROBERT L. Brown, Justice.

This is a juvenile-transfer case. Appellant Terry Lynn Carroll maintains that the circuit court erred in declining to send this case to juvenile court because his chances for rehabilitation are good. We conclude that the circuit court was not clearly erroneous in its decision, and we affirm.

In the early morning hours of June 5, 1995, Marcell Young (age 17), Malak Hussian (age 10), and Mustafa Hussian (age 12) — all siblings — were shot and killed while their mother, Mary Hus-sian, wrestled with another gunman in a separate part of the house. In an information filed on July 5, 1995, the prosecutor charged Riley Dobi Noel, appellant Carroll, Curtis Lee Cochran, and Tracy Trinette Calloway with the capital murders of the three children and the attempted capital murder of Mary Hussian.

On May 13, 1996, Carroll filed a motion to transfer his case to juvenile court because he was sixteen at the time of the crime. Carroll’s date of birth is March 24, 1979. Dr. Michael J. Simon, a psychologist with the State Hospital, testified that he had evaluated Carroll and found his I.Q. level to be 74. An I.Q. of less than 70, he stated, constitutes mental retardation. On cross-examination by the deputy prosecutor, Dr. Simon admitted that a person with an I.Q. of 74 can function in society. He further agreed that Carroll could distinguish right from wrong. Gertha Hughes, Carroll’s grandmother, testified that she had raised Carroll since he was age seven or eight. She testified that she took care of Carroll because his mother, Gracie Hughes, “liked the streets” and did not have time for him. She stated that his father also had not taken responsibility for him, except to pay child support. Ms. Hughes further related to the circuit court that Carroll had not completed the eighth grade. She testified that she never had any problem with Carroll until he started associating with the wrong crowd. She believed that he could be rehabilitated.

The prosecutor’s case consisted of the testimony of two police officers from the Little Rock Police Department. Detective Ronnie Smith testified that he advised Carroll of his Miranda rights on June 5, 1995, and that Carroll gave a statement. The circuit court ruled that the statement was admissible. Officer Steve Moore testified that he investigated the Hussian triple homicide on June 5, 1995, and that the three Hussian children had been shot in the head. The mother, Mary Hussian, identified Carroll as the gunman with whom she wrestled. The murders occurred at 4:25 a.m. on June 5, 1995. Carroll was arrested 20 minutes later.

Officer Moore further testified that Carroll told him that the Hussian children were shot with a .45 caliber automatic pistol. Hulls from a .45 caliber pistol had been found at the scene. Carroll told Officer Moore that the three other defendants were present and that he struggled with the mother, Mary Hussian, while Riley Noel shot the children. Carroll specifically identified Noel and Curtis Cochran from photo spreads. Carroll admitted that he was armed with a Mossberg 12-gauge shotgun during the murders.

After arguments by counsel, the circuit court ruled from the bench that it had considered the relevant statutory factors and had found by clear and convincing evidence that Carroll should be tried as an adult. The circuit court’s order denying the transfer was subsequently filed.

In this appeal, Carroll contests the circuit court’s finding. The statutes provide that when deciding whether to transfer a case to juvenile court, the circuit court must consider the following factors:

(1) The seriousness of the offense, and whether violence was employed by the juvenile in the commission of the offense;
(2) Whether the offense is part of a repetitive pattern of adjudicated offenses which would lead to the determination that the juvenile is beyond rehabilitation under existing rehabilitation programs, as evidenced by past efforts to treat and rehabilitate the juvenile and the response to such efforts; and
(3) The prior history, character traits, mental maturity, and any other factor which reflects upon the juvenile’s prospects for rehabilitation.

Ark. Code Ann. § 9-27-318 (e) (Supp. 1995).

If the circuit court decides to hold the juvenile for trial as an adult, its decision must be supported by clear and convincing evidence, and the circuit court’s decision will not be overturned unless it is clearly erroneous. Ark. Code Ann. § 9-27-318(f) (Supp. 1995); Booker v. State, 324 Ark. 468, 922 S.W.2d 337 (1996); Davis v. State, 319 Ark. 613, 893 S.W.2d 768 (1995). However, in making its determination, the circuit court is not required to give equal weight to each of the statutory factors under § 9-27-318(e). Brooks v. State, 326 Ark. 201, 929 S.W.2d 160 (1996); Booker v. State, supra; Sebastian v. State, 318 Ark. 494, 497, 885 S.W.2d 882 (1994).

The serious and violent nature of an offense is sufficient by itself for trying a juvenile as an adult. Brooks v. State, supra; Holland v. State, 311 Ark. 494, 844 S.W.2d 943 (1993). Yet, there must be some showing of proof to substantiate the serious and violent charges in the information. See, e.g., Sanders v. State, 326 Ark. 415, 932 S.W.2d 315 (1996); Booker v. State, supra; Cole v. State, 323 Ark. 136, 913 S.W.2d 779 (1996). It makes no difference if the juvenile did not commit the violence himself because “his association with the use of a weapon in the course of the crimes is sufficient to satisfy the violence criterion.” Booker v. State, 324 Ark. at 474, 922 S.W.2d at 340, quoting Guy v. State, 323 Ark. 649, 916 S.W.2d 760 (1996). Moreover, this court has held that the serious and violent nature of a capital murder charge, even if the minor is an accomplice, is sufficient to uphold the denial of a motion to transfer to juvenile court. Bell v. State, 317 Ark. 289, 877 S.W.2d 579 (1994).

In the instant case, the circuit court stated that it had considered the relevant criteria under § 9-27-318(e). Carroll argues, nonetheless, that the circuit court clearly erred in refusing to transfer his case because he has good prospects for rehabilitation. As supporting evidence for this assertion, Carroll’s counsel points to the proof of his borderline intelligence range (I.Q. of 74) and to proof that he was a good kid until he began to associate with the wrong crowd, the inference being that Carroll can now be influenced by “good” just as he was once influenced by “evil.” He also underscores the fact that Carroll was not the shooter of the three children.

Carroll’s argument, though, falls far short of persuading this court that the circuit court’s finding was clearly wrong. The crime was manifestly violent. In addition, there was proof from Carroll’s statement to the police that he carried a 12-gauge shotgun into the Hussian residence and wrestled with Mary Hussian while her children were being shot. A juvenile accomplice to a violent crime is still subject to being charged as an adult. Bell v. State, supra. The charges in the information, which were corroborated by the proof at the hearing, provide a sufficient basis to uphold the trial court’s ruling.

We note, additionally, that Carroll will turn 18 on March 24, 1997, which renders his prospects for rehabilitation within the juvenile system considerably remote. See Ark. Code Ann. § 9-28-208(d) (Supp. 1995); Hansen v. State, 323 Ark. 407, 914 S.W.2d 737 (1996).

Affirmed.

ROAF, J., concurs.


author: Robert L. Brown, Justice. Tom Glaze, Justice,

text:
    STATE of Arkansas v. PULASKI COUNTY CIRCUIT COURT
    96-1286
    934 S.W.2d 915
    Supreme Court of Arkansas
    Opinion delivered December 16, 1996
    [Petition for rehearing granted February 10, 1997.]

      Winston Bryant, Att’y Gen., by: Kelly K. Hill, Deputy Att’y Gen., for petitioner.

      James, Yeatman & Carter, PLC, by: Paul J. James and Steve W. Haralson, for respondent.

       Corbin, Brown, and Thornton, JJ., would deny.

   Robert L. Brown, Justice.

On October 25, 1996, the State of Arkansas filed its petition for a writ of prohibition or, alternatively, for a writ of certiorari and prayed that this court vacate the Pulaski County Circuit Court’s order reducing bail for David Bernard Batts from $25,000 to $7,500. We deny the petition.

On July 16, 1996, Officer Charles Jones of the Sherwood Police Department arrested David Bernard Batts, age 16, for the unlawful discharge of a firearm, which is a Class B felony. See Ark. Code Ann. § 5-74-107(b)(l), (2) (Repl. 1993). Officer Jones issued a complaint against Batts for the offense by completing an Arkansas Uniform Traffic Ticket and Complaint form in which he stated that he had reasonable grounds to believe the offense was committed. Batts was booked in the Sherwood City Jail, and bail was fixed at $50,000.

The following day, Batts appeared with a deputy public defender in Sherwood Municipal Court, presumably for a reasonable-cause hearing on whether Batts committed the offense. See Ark. R. Crim. P. 4.1(e). The municipal court apparently found reasonable cause and, therefore, cause to detain Batts under Ark. R. Crim. P. 8.3(c), though the record before this court is void of any information concerning a hearing. The municipal court records do reflect that bail was set at $25,000, and the matter was bound over to Pulaski County Circuit Court. Batts was transferred to the Pulaski County Jail.

On September 17, 1996, Pulaski County Circuit Judge Marion Humphrey held a hearing on the Batts matter, after first notifying the prosecuting attorney. The catalyst for the hearing was a meeting that Judge Humphrey had with Batts’s parents the previous day where they complained to the judge that Batts should be in school and not in jail. Batts had been in jail continuously since his arrest on July 16, 1996. The prosecuting attorney had filed no formal felony charges against him.

At the September 17, 1996 hearing, the deputy prosecutor explained that the State’s case against Batts would be that he shot at another car while traveling on the Jacksonville/Sherwood highway and struck a postal truck that was following behind the car he was trying to hit. A dispute at a roller skating rink led to the shooting. The prosecutor further informed the court that his office had received the Batts file on August 19, 1996, but had not yet made a decision to file formal charges against him as an adult. The deputy prosecutor stated:

It hasn’t gone to the first attorney for a file decision. And we try and get all of our file decisions out within a month and we’re right on the outside of that right now. As the Court knows, some things [are] slowed down because of the turnover in the circuit clerk’s office.

The deputy prosecutor further advised the circuit court that Batts had been given his Miranda rights at the Sherwood Police Department and had admitted to the shooting. He further told the court that the prosecutor would be charging Batts as an adult and that “there will probably be two counts of unlawful discharge and probably one terroristic act for hitting the mail truck that was occupied by a postal worker.”

The deputy prosecutor then objected to the bond hearing because charges had not been filed in circuit court. The court admonished the prosecutor to “move these [cases] along”, and the court reduced the bail to $7,500. It is that action by the circuit court that the State seeks to vacate with its petition.

I. Prohibition

We first consider whether a petition for a writ of prohibition is the appropriate remedy. We conclude that it is not. A writ of prohibition is only appropriate when the acting court is wholly without jurisdiction. Steve Standridge Ins., Inc. v. Langston, 321 Ark. 331, 900 S.W.2d 955 (1995); Hall v. Pulaski County Circuit Court, 320 Ark. 593, 898 S.W.2d 46 (1995). Moreover, a writ of prohibition must be clearly warranted. Archer v. Benton County Circuit Court, 316 Ark. 477, 872 S.W.2d 397 (1994); Leach v. State, 303 Ark. 309, 796 S.W.2d 837 (1990). A writ of prohibition is not directed to the jurisdiction of an individual judge but to the court itself. Lee v. McNeil, 308 Ark. 114, 823 S.W.2d 837 (1992).

The Arkansas Constitution provides that the circuit courts of this state have superintending control over municipal courts. Ark. Const, art. 7, § 14. See also Ark. Code Ann. §§ 16-13-203 and 16-13-204 (Repl. 1994). The circuit courts also have exclusive jurisdiction over felony charges. Ark. Const, art. 7, § 11; State v. Pulaski County Circuit-Chancery Court, 316 Ark. 473, 872 S.W.2d 854 (1994). Our criminal rules further contemplate that a second “judicial officer” may reduce the bail bond set by an original judicial officer. Ark. R. Crim. P. 9.2(e)(i). Surely, a superintending circuit judge qualifies as a judicial officer for purposes of the rule governing bail. We hold, accordingly, that the essential prerequisite for a writ of prohibition is lacking in this matter because the Pulaski County Circuit Court does not wholly lack subject-matter jurisdiction.

II. Certiorari

We turn then to the alternative remedy requested, which is certiorari. Writs of certiorari have been labeled the appropriate vehicle for relief in bail proceedings. See, e.g., Casement v. State, 318 Ark. 225, 884 S.W.2d 593 (1994); Foreman v. State, 317 Ark. 146, 875 S.W.2d 853 (1994). We have stated:

Certiorari lies to correct proceedings erroneous on the face of the record where there is no other adequate remedy, and it is available to the appellate court in its exercise of superintending control over a lower court that is proceeding illegally where no other mode of review has been provided. Lupo v. Lineberger, 313 Ark. 315, 855 S.W.2d 293 (1993). A demonstration of plain, manifest, clear, and gross abuse of discretion is essential before this court will grant a petition for writ of certiorari. Shorey v. Thompson, 295 Ark. 664, 750 S.W.2d 955 (1988).

Foreman, 317 Ark. at 148, 875 S.W.2d at 854. Based on these standards, a writ of certiorari appears to be the correct vehicle for the relief sought by the State.

On the merits of whether a writ of certiorari is warranted under these facts, we conclude that it is not for the same reasons that have already been discussed. Probable cause for detention had been found by the Sherwood Municipal Court, and the case had been bound over to circuit court. We have held that before the prosecutor files a proper charging instrument, the circuit court has no authority to proceed with the matter. Whitehead v. State, 316 Ark. 563, 873 S.W.2d 800 (1994). Here, however, the appropriate amount of bail following a probable-cause hearing for a felony arrest falls within the superintending power of the circuit courts over municipal courts. If a municipal court has the authority to set bail for arrested felons but no power to proceed with the resolution of felony matters, certainly the superintending circuit courts would have comparable authority. We hold, as a result, that the action of the circuit judge in reducing the bail amount was not erroneous on its face.

The State bases its contention that the circuit court was without authority to effect a change in the bail amount on two cases — Gober v. Daniels, 295 Ark. 199, 748 S.W.2d 29 (1988), and Municipal Court of Huntsville v. Casoli, 294 Ark. 37, 740 S.W.2d 614 (1987). In Casoli, the municipal court appealed after the circuit court entered a mandamus order directing the refund of an appearance bond to the defendant in a misdemeanor case. A $5,000 appearance bond was set in a third-offense DWI case (a misdemeanor, at that time), after Casoli had previously forfeited a $1,500 bond. The circuit court found that the $5,000 bond was excessive and ordered the municipal court to return the bond and “reinstate” the DWI charge. After reviewing the circuit court’s superintending authority over municipal courts, we held that the amount of bail rests in the sound discretion of the municipal court and that the circuit court was without authority to issue a writ of mandamus or prohibition to control that discretion.

Likewise in Gober, the defendant was convicted of DWI (a misdemeanor), and he appealed to the circuit court. The circuit court then entered an order of mandamus to the municipal court to reduce the bond by the amount of the fines which were suspended. Citing Casoli, we held again that the circuit court erred in issuing a writ of mandamus to control the discretion of the municipal court.

The Gober and Casoli cases, however, are distinguishable from the case at hand. First, in both earlier cases the circuit court directed the municipal court to reduce the bail. Here, the circuit court reduced the bail amount itself. Secondly, the municipal court in Gober and Casoli had jurisdiction to bring about convictions of the misdemeanor offenses, which would result in an appeal to the circuit court in the normal course of events. In the instant case, the municipal court had no authority to proceed with trying a felony offense and was limited to a determination of whether reasonable cause existed that Batts committed the offense and whether he should be detained pending further proceedings. See Ark. Const, art. 7, § 43; Ark. R. Crim. P. 4.1(e), 8.3(c). See also Ark. Code Ann. § 16-85-207 (1987); Bailey v. State, 284 Ark. 379, 682 S.W.2d 734 (1985).

What is most troublesome about Batts’s situation is the judicial limbo into which he was cast for an extended period of time without a formal felony charge being lodged against him. The decision to file a felony information generally rests entirely in the prosecutor’s discretion. See Miller v. State, 269 Ark. 341, 605 S.W.2d 430 (1980), quoting Borkenkircher v. Hayes, 434 U.S. 357 (1978). However, the deputy prosecutor offered no explanation at the September 17, 1996 hearing as to why no filing decision had been made by his office two months after Batts’s arrest and detention. If no valid reason existed for the delay, a petition for writ of habeas corpus by Batts to the circuit court might well have been appropriate. See Ark. Code Ann. § 16-112-122 (1987). But regardless of the existence of an additional remedy, a two-month delay in filing charges without good reason is unacceptable.

Petition denied.

Glaze, J., dissents.

Tom Glaze, Justice,

dissenting. To my knowledge, this court has never upheld a trial court’s taking jurisdiction to hear a case when no complaint has been filed or action has been commenced. Here, the State repeatedly objected to the trial court taking jurisdiction in this case without something first having been filed with the court. To permit the trial court’s actions and decision in this matter eviscerates the basic requirements of this court’s rules of procedure. Therefore, I dissent.

This rather unusual case began on July 16, 1996, when David Batts allegedly was in a vehicle when he shot at another car and struck a postal truck. On the same date, Batts was arrested, and the municipal court held a reasonable cause hearing. Upon conclusion of the hearing, the municipal judge found Batts’s charge involved a felony offense, the discharge of a firearm from a vehicle, Ark. Code Ann. § 5-74-107 (Repl. 1993). The judge then set Batts’s bond at $50,000, but reduced it to $25,000 the next day. No further action is shown to have been requested or taken in the municipal court.

The next set of events began on September 16, 1996, when Batts’s parents showed up at the Pulaski County Courthouse, and for some reason, went direcdy to Pulaski County Circuit Court Judge Marion H. Humphrey. In other words, the parents filed no pleadings in the clerk’s office, and they had no attorney. Nonetheless, the parents asked Judge Humphrey to help them find some information concerning David Batts’s case, and complained that their son should be in school, but instead was in jail. The judge accommodated the parents by contacting the prosecuting attorney’s office and requesting that office to appear in his court the next day. The judge also asked the prosecutor’s office to check to see if Batts had a prior record.

On September 17, 1996, Judge Humphrey, over the State’s objection, conducted a hearing concerning Batts’s case even though no complaint had been filed, and no attorney was present to represent Batts or the parents. The deputy prosecutor informed the court he could not, as yet, determine if Batts had a prior record, but related that Batts had given a statement, admitting to the July 16 shooting incident for which he was arrested. The deputy prosecutor further related his office had received the municipal court file on Batts on August 19, 1996, and while the State tries to file such felony cases in circuit court within thirty days of a municipal court proceeding, it had not yet done so in the Batts case. The deputy prosecutor said that his office would likely charge Batts with the unlawful discharge of a firearm count and terroristic threatening, since Batts’s shot had hit the postal truck when the truck was occupied.

Judge Humphrey voiced concern over Batts being only sixteen years old, his not being in school, and his sitting in jail when no charge had been filed in circuit court. The judge asked Batts’s parents if they were able to make any kind of bond, and subsequently he reduced Batts’s bond to $7,500. At the hearing’s end, the deputy prosecutor again objected because nothing had ever been filed giving the trial court jurisdiction.

The State filed its original action in our court requesting this court issue a writ of prohibition vacating the circuit judge’s order reducing Batts’s bond. The State continues its objection, stating Batts had never filed a complaint with the circuit court, therefore, the circuit judge had no authority or jurisdiction to enter an order.

Rule 3 of this court’s rules of civil procedure establishes that a civil action is commenced by filing a complaint with the clerk of the proper court who shall note thereon the date and precise time of filing. Upon filing of the complaint, the clerk issues a summons forthwith, and that summons is to be served on the defendant under ARCP Rule 4. If the defendant is not served within 120 days, the action is dismissed unless the time for service is extended. These fundamental rules were altogether ignored in this case. In sum, no action has ever been filed or summons served so as to commence this matter in Judge Humphrey’s court. Therefore, the judge had no authority to conduct proceedings concerning Batts’s case.

This court’s willingness to permit the circuit court to ignore this court’s rules of civil procedure has caused it to err in its review of the trial court’s order. For example, the majority court states the Pulaski County Circuit Court does not wholly lack subject-matter jurisdiction, yet this court’s settled rule is that jurisdiction is tested on the pleadings. Springdale Sch. Dist. v. Jameson, Judge, 274 Ark. 78, 621 S.W.2d 860 (1981). In the present case, no pleadings have been filed, so how is this appellate court to decide the jurisdictional issue? If pleadings had been filed below, the parties would have been required to establish the factual and legal issues regarding the municipal court’s and circuit court’s jurisdiction involving reasonable cause hearings and bond issues. The State was never afforded the opportunity to respond to Batts’s complaint because none was filed.

Batts’s counsel on appeal complains the State should have filed its charges earlier in circuit court, but if that was Batts’s complaint, he could have properly filed a complaint asking a writ of mandamus issue against the State compelling it to exercise its discretion and file charges against Batts. Or, Batts could have requested the municipal court to give him another reduction, since that court willingly gave him one earlier.

At the very least, Batts was required to file his complaint, setting out his allegations and grievances, in the circuit court clerk’s office, so the clerk could properly assign the case to a circuit judge for immediate action, if requested. By its decision today, this court authorizes a procedure which allows parties to circumvent our court rules and permits them to select a judge they think might afford them relief. Such forum shopping should be forbidden by this court, not encouraged.

       We do not address the issue of Batts’s juvenile status. Neither party disputes the fact that the prosecuting attorney intended to charge Batts as an adult with one or more felony counts.


author:
ANDREE LAYTON Roaf, Justice.
      ROBERT L. Brown, Justice,

text:
    Hugh CHALMERS, et al. v. TOYOTA MOTOR SALES, USA, INC., et al.
    95-891
    935 S.W.2d 285
    Supreme Court of Arkansas
    Opinion delivered December 16, 1996
    [Petition for rehearing denied February 10, 1997.]

      Hargis, Wood, & Lockhart, by: David M. Hargis, for appellants.

      The Rose Law Firm, A Professional Association, by: David L. Williams and Vinson & Elkins, L.L.P., by: Max Hendrick, III, for appellee.

       H. Oscar Hirby, Sp. J., and Corbin and Brown, JJ., would grant. Glaze and Thornton, JJ., not participating.

   ANDREE LAYTON Roaf, Justice.

The appellants filed suit against the appellees for breach of contract, breach of implied contractual covenants of good faith and fair dealing, fraud, interference of contract, violation of the Arkansas Unfair Practices Act, and violation of the Arkansas Franchise Practices Act. The trial court granted summary judgment for the appellees, holding that the Unfair Practices Act did not apply to interstate price discrimination and that the remaining claims were barred by the applicable statutes of limitations. On appeal, the appellants argue that the trial court erred in applying the statutes of limitations because fraudulent concealment and the Continuing Tort doctrine served to toll the running of the statutes. The appellants further contend that the trial court erred in finding that the Arkansas Unfair Practices Act did not apply to their claims. We find no error and affirm.

Appellee Toyota Motor Sales, USA, Inc. (“TMS”) is the exclusive importer for Toyota vehicles in the continental United States. TMS uses a system of twelve multi-state distribution regions, and sells imported and domestically produced vehicles to these regional distributors. The vehicles are in turn sold by the twelve distributors to Toyota dealers in their regions.

Appellee Gulf States Toyota (“GST”) is a privately owned corporation and is the regional distributor for the states of Texas, Oklahoma, Mississippi, Louisiana, and Arkansas. Only GST and one other regional distributor are not owned by TMS. Appellee Steve Woods is a former GST employee who served as its district sales manager responsible for the state of Arkansas during 1989-1993. Appellee Toyota Motor Distributors (“TMD”) is a wholly owned subsidiary of TMS and is the regional distributor for Tennessee and several other states.

The appellants Hugh Chalmers Chevrolet-Cadillac-Toyota, Inc., and its owners, Hugh B. Chalmers, and Hugh B. Chalmers, Jr. (“the Chalmers”), are located in West Memphis, Arkansas, and became a Toyota dealership in 1976 by entering into a Toyota Dealer Agreement with GST.

On February 6, 1987, Hugh Chalmers wrote a letter to the president of GST expressing dissatisfaction with its vehicle distribution policy. Chalmers complained of an inequitable distribution of Toyotas which had increased over the past several years and asserted that TMD and GST were engaged in different marketing strategies. Chalmers complained that Toyota’s distribution boundaries resulted in an injustice to his dealership because he could not participate in the programs and promotions advertised by TMD in the Memphis area.

Chalmers later voiced his concerns to TMS. On October 4, 1989, Chalmers wrote a letter to a vice-president of TMS and stated that the Memphis dealerships had an unfair advantage because of a dual pricing policy between the two regions and that this discriminatory practice was causing him to lose both new car sales and personnel. In the ensuing years, Chalmers continued to correspond with TMS and GST regarding the difficulties created by the Arkansas-Tennessee distribution boundary.

The Chalmers filed suit against the appellees on August 27, 1993. They asserted six claims for relief: 1) frustration of contract performance, prevention and breach of contract; 2) fraud, misrepresentation and deceit; 3) interference with contract rights and expectations; 4) destruction of competition through price discrimination; 5) violation of Arkansas franchise law, and 6) punitive damages. The Chalmers allege that the appellees acted conspiratorially and as agents of one another in engaging in the unlawful actions. They allege that TMS allowed GST and Woods to force dealers within GST’s region to accept vehicles loaded with option and accessory packages not required of the Memphis dealers, and that the resulting pricing disparity destroyed their ability to compete in their economic market. The complaint further asserted that the conspiracy and pricing disparity had begun at an earlier, unknown time but that “the effects were not perceived by the Chalmers until late 1989.”

The appellees moved for partial summary judgment on the alleged violations of the Arkansas Unfair Practices Act. The trial court granted this motion, finding that the act did not apply to interstate price discrimination. Chalmers then filed an amended complaint which alleged additional violations of the Arkansas Franchise Practices Act. The appellees again moved for summary judgment, raising multiple defenses. The trial court granted the motions and dismissed all claims against the appellees, finding that the applicable statutes of limitations barred the remaining claims. The Chalmers appeal the granting of the summary judgments.

1. Statute of limitations.

The Chalmers first argue that the trial court erred in its application of the statutory limitations periods as a bar to their claims. This court has said that the standard for review of a grant of summary judgment is whether the evidentiary items presented by the moving party in support of the motion left a question of material fact unanswered and, if not, whether the moving party is entitled to judgment as a matter of law. National Bank of Commerce v. Quirk, 323 Ark. 769, 918 S.W.2d 138 (1996). The court views all proof in the light most favorable to the party opposing the motion, resolving all doubts and inferences against the moving party. Id. However, once the moving party makes a prima facie showing of entitlement, the responding party must meet proof with proof in order to demonstrate that there is remaining a genuine issue of material fact. Mount Olive Water Ass’nv. City of Fayetteville, 313 Ark 606, 856 S.W.2d 864 (1993). The response and supporting material must set forth specific facts showing that there is a genuine issue for trial. Id.

The claims asserted by the Chalmers involve two limitations periods. The statute of limitations for breach of a written contract is five years. Ark. Code Ann. § 16-56 — 111(b) (Repl. 1995). The remaining claims of the Chalmers are governed by the three-year statute of limitations found at Ark. Code Ann. § 16-56-105(3) (1987). Hampton v. Taylor, 318 Ark. 771, 887 S.W.2d 535 (1994) (fraud); Bankston v. Davis, 262 Ark. 635, 559 S.W.2d 714 (1978) (interference with contract); Winston v. Robinson, 270 Ark. 996, 606 S.W.2d 757 (1980) (liability imposed by statute). The limitations period found in Ark. Code Ann. § 16-56-105(3) begins to run when there is a complete and present cause of action, Courtney v. First Nat’l Bank, 300 Ark. 498, 780 S.W.2d 536 (1989), and, in the absence of concealment of the wrong, when the injury occurs, not when it is discovered. Hampton, supra.

The litigation in the present case was begun on August 27, 1993, therefore the applicable statutes of limitations would act to bar the Chalmers’ if they knew or reasonably should have known about their breach-of-contract claim on or before August 27, 1988, and on or before August 27, 1990, with respect to the remaining causes of action.

A. Fraudulent concealment.

Although the Chalmers had a contractual relationship with GST, on appeal, they do not argue that the five-year statute of limitations applies to their claims against GST or any of the other appellees. In their brief, the Chalmers primarily assert that the statutes of limitations on their claims should have been tolled because of fraudulent concealment (including offers of settlement and cure), and the doctrine of continuing tort. They further present extensive factual information concerning Toyota sales, investigations into Toyota’s operations in the United States, devaluation of the dollar against the yen and other matters as bearing on the issue of whether they could have reasonably discovered the alleged wrongful acts before the expiration of the limitations periods.

When the running of the statute of limitations is raised as a defense, the defendant has the burden of affirmatively pleading this defense. First Pyramid Life Ins. Co. v. Stoltz, 311 Ark. 313, 843 S.W.2d 842 (1992), cert. denied, 510 U.S. 908 (1993). However, once it is clear from the face of the complaint that the action is barred by the applicable limitations period, the burden shifts to the plaintiff to prove by a preponderance of the evidence that the statute of limitations was in fact tolled. Id.; Cleveland v. Gravel Ridge Sanitary Sewer Imp. Dist. No. 213, 274 Ark. 330, 625 S.W.2d 446 (1981).

Fraud suspends the running of the statute of limitations, and the suspension remains in effect until the party having the cause of action discovers the fraud or should have discovered it by the exercise of reasonable diligence. First Pyramid , supra. We have stated the following as the “classic language” on this subject:

No mere ignorance on the part of the plaintiff of his rights, nor the mere silence of one who is under no obligation to speak, will prevent the statute bar. There must be some positive act of fraud, something so furtively planned and secretly executed as to keep the plaintiff’s cause of action concealed or perpetrated in a way that it conceals itself. And if the plaintiff, by reasonable diligence, might have detected the fraud he is presumed to have had reasonable knowledge of it.

First Pyramid , supra. (quoting Wilson v. GECAL, 311 Ark. 84, 841 S.W.2d 619 (1992)).

In discussing when a negligent act occurs to begin the three- year statute of limitations, we have noted that “[a]t times, the beginning of the occurrence is a law question to be determined by the Court. At other times, it is a fact question for the jury to determine.” Orsini v. Larry Moyer Trucking, Inc., 310 Ark. 179, 833 S.W.2d 366 (1992). Although the question of fraudulent concealment is normally a question of fact that is not suited for summary judgment, when the evidence leaves no room for a reasonable difference of opinion, a trial court may resolve fact issues as a matter of law. Alexander v. Flake, 322 Ark. 239, 910 S.W.2d 190 (1995) (citing Miles v. A. O. Smith Harvestore Prods., Inc., 992 F.2d 813, 817 (8th Cir. 1993)).

Moreover, in Hampton v. Taylor, 318 Ark. 771, 887 S.W.2d 535 (1994), we affirmed the grant of summary judgment where the trial court had found there was no issue of material fact with respect to alleged fraudulent concealment of a cause of action. We stated that mere allegations of fraud, unsupported by evidence, were not enough to create an issue of material fact, and that the allegations of fraud made by the appellant in Hampton revealed no “furtive planning” or “secret execution of a fraudulent act,” to keep the appellant’s cause of action concealed.

In the present case, it is difficult to determine from the appellants’ brief what specific, positive acts of fraud are alleged to have occurred. The Chalmers’ complaint asserts that the conspiracy between TMS and GST occurred at various unknown times “and in the years 1987, 1988, 1989.” The Chalmers primarily single out the unequal distribution of vehicles to their dealership and various port-installed options programs established by GST as the causes for their inability to compete in their economic market.

Although GST denied that participation in the options program was mandatory, the Chalmers offered considerable evidence that dealers in GST’s region were forced to accept vehicles “loaded” with port-installed options and accessories while the Memphis dealers received lower-priced vehicles without the costly options. The Chalmers also presented strong evidence that compensation and incentives plans for GST’s district managers heavily influenced the allocation of these loaded vehicles. Nearly $86,000 of Appellee Woods’ 1992 salary of $122,690 came from commissions based on the sale to GST’s dealers of various port-installed options.

However, the issue to be resolved is when the Chalmers knew or should reasonably have discovered these alleged wrongful acts of the appellees. In the February 1987 letter to GST, appellant Hugh Chalmers, Sr., stated:

In analyzing our Toyota sales we are struck with the realization that some major inequities have developed over the past several years, which have a negative impact on our effectiveness. ... We are disadvantaged because of the distribution boundary lines and are being relegated to the status of an outlying rural dealer by Toyota. ... To further compound the problem, not only are we not included, but we are totally ignorant of Toyota’s marketing strategy for SMS A Memphis. The Cincinnati region [of TMD] has responsibility for developing Toyota’s marketing plans, sales promotions and advertising programs in Memphis, and often Cincinnati is supporting an activity different from that adopted by GST. ... [B]ecause of the sometimes differing marketing programs of GST and [TMD], we find ourselves out of cinque [sic] with what the Toyota buyer has been led to believe is available at this dealership. ... There is no doubt that this injustice is the result of Toyota’s distribution boundaries, but it would seem that Toyota would want to correct an obvious inequity, which is having a negative impact on sales. ... If this situation is left uncorrected, ... the problems will amplify.

(Emphasis added.)

In his October 1989 letter to TMS, Chalmers wrote:

The disastrous effect incurred by this dual pricing is easily seen when a comparison is made between our Toyota sales-zip code analysis and the R.L. Polk registrations over the last Jive years. It conclusively shows that the Memphis dealers have an unfair advantage over this dealership in my area of sales responsibility. So long as this discriminatory practice continues I cannot avoid continually losing both new car sales and qualified personnel, thereby having my Toyota franchise undermined.

(Emphasis added.)

These letters clearly show that the alleged wrong occurred at least six years prior to the filing of the complaint in 1993. The letters also demonstrate that the Chalmers knew or through reasonable diligence could have discovered the alleged fraud. Furthermore, Hugh Chalmers, Jr., testified in his deposition taken August 1993, that he was getting accessories on vehicles that he did not want in 1985, and that he had requested of his GST representative that the accessories not be put on. He further stated that he had been forced to take automobiles he didn’t want for the past ten years.

Although Chalmers did not complain of “dual pricing” until the 1989 letter, and asserted in his deposition that he was not aware of the dual pricing until late 1989, it is clear from the testimony of the Chalmers’ expert, Charles Venus, that the allegation of “dual pricing” is a further reference to the port-installed accessories, which the Chalmers had known of since 1985. Dr. Venus testified in his deposition that a price difference between the Chalmers and the Memphis dealerships averaging almost $500 per vehicle existed from at least 1986 onward, and that a substantial part of the differences between what Chalmers and the Memphis dealers paid for cars was the port-installed “CPP” (consumer protection package). Hugh Chalmers also testified that GST port-installed at inflated prices floor mats, spare tires and the CPP in “almost every

car coming into West Memphis.” The evidence thus shows that the alleged wrong occurred even prior to 1987 and that the Chalmers knew or through reasonable diligence could have discovered the alleged fraud and their other causes of action as early as 1987.

B. Promise to cure.

The Chalmers allege that the appellees made promises to cure and offers of settlement which would also serve to toll the statute of limitations. This court has said that an offer of settlement is admissible as relevant to the issue of fraudulent concealment of a cause of action otherwise barred by a statute of limitations. Lake v. Wright, 186 Ark. 227, 53 S.W.2d 233 (1932). In Lake, the appellant offered to pay the appellee a specific sum to setde a claim involving partnership earnings from 1922, but demanded a receipt for full payment of all claims and refused to allow the words “for the year 1922” to be placed on the receipt. The appellee was unaware that he also had a claim against the appellant’s earnings in 1923 and 1924.

However, the evidence submitted by the Chalmers does not demonstrate such conduct by the appellees. TMS wrote Chalmers in October 1989 in response to his letter and denied that the price differences were the result of an unfair pricing policy and stated that it could not undertake an investigation as requested in his letter. Chalmers further testified in his deposition that he met with GST representatives in May 1991, in an effort to resolve his problems and that GST’s response was that they would “let the judge handle it.” Although Chalmers also testified that GST representatives told him in 1990 and 1991 that they would “support” the transfer of his dealership and “do what it took to get him moved” to the TMD region, these statements fall short of a promise to cure or an offer of setdement which would toll the statute of limitations.

C. Continuing tort.

In the alternative, the Chalmers assert that the statutes of limitations should have been tolled on a theory of continuous tort. They further allege that the appellees’ actions, at some time unknown in the past and up to the time of the litigation, constituted an ongoing civil conspiracy. In Arkansas, civil conspiracy has been defined as a combination of two or more persons to accomplish a purpose that is unlawful, or oppressive, or to accomplish some purpose, not in itself unlawful, by unlawful, oppressive, or immoral means. Williams v. Hency, 254 Ark. 685, 495 S.W.2d 875 (1973).

Although the appellees assert that civil conspiracy was not plead at the trial court level, the Chalmers’ complaint contains a number of allegations that the appellees engaged in a conspiracy. Nevertheless, the continuing-tort theory is not recognized in Arkansas. This court has adopted a “continuous treatment” theory in medical malpractice cases, where the cause of action does not accrue until ongoing treatment ends. Lane v. Lane, 295 Ark. 671, 752 S.W.2d 25 (1988). However, we have specifically rejected the continuing-tort theory of tolling the statute of limitations as inconsistent with the General Assembly’s intent in stating that limitations begin to run at “the date of the wrongful act complained of and no other time.” Tullock v. Eck, 311 Ark. 564, 845 S.W.2d 517 (1993). See also Taylor v. Phillips, 304 Ark. 285, 801 S.W.2d 303 (1990). As the evidence clearly shows, the wrongful acts which the Chalmers complain of began in the early to mid 1980s.

2. Unfair Practices Act.

The Chalmers also argue that the trial court erred in dismissing their claims of price discrimination under the Arkansas Unfair Practices Act.

The Arkansas Unfair Practices Act, codified at Ark. Code Ann. § 4-75-201, et seq. (Repl. 1996), provides in part that:

[i]t shall be unlawful for any. . . corporation doing business in the State of Arkansas and engaged in the production, manufacture, distribution, or sale of any commodity or product. . . with the intent to destroy the competition of any regular established dealer in the commodity, product... to discriminate between different sections, communities, or cities or portions thereof, or between different locations in the sections, communities, cities or portions thereof in this state, by selling or furnishing the commodity, product. . . at a lower rate in one section, community, or city . . . than in another.

Ark. Code Ann. § 4-75-207(a) (Repl. 1996) (emphasis added).

Here, the alleged dual-pricing scheme involved TMD sales of vehicles to dealerships in Tennessee. The Arkansas Unfair Practices Act, by its very terms, applies to price discrimination between one area in Arkansas and another area in Arkansas. As a general rule, statutes have no effect except within the state’s own territorial limits. Widmer v. Wood, 243 Ark. 457, 420 S.W.2d 828 (1967). The Chalmers do not allege that there was any dual pricing within Arkansas.

The Chalmers argue for an extraterritorial application of the Arkansas Unfair Practices Act, under Ark. Code Ann. § 4-75-207(b) (Repl. 1996), which provides:

The inhibition of this section against locality discrimination shall include any scheme of. . . collateral contracts, or any device of any nature whereby such discrimination is, in substance or fact, effected in violation of the spirit and intent of this subchapter.

However, we have not heretofore held that the Unfair Practices Act is to be given application beyond the borders of Arkansas. Moreover, the statute is penal in nature and must be strictly construed in favor of those upon whom the burden of the penalty is sought to be imposed. Wal-Mart Stores, Inc. v. American Drugs, Inc., 319 Ark. 214, 891 S.W.2d 30 (1995). We cannot say that the trial court erred in granting summary judgment to appellees on this claim.

3. Trial-practice issues.

The Chalmers finally argue that the trial court erred in its dismissal of the appellants’ claims subject to no bar of any statute of limitations. In this point, the Chalmers state that “this space was intended to bring certain trial-practice issues before this Court,” had space permitted. They present no legal arguments or authority, but merely cite as an example certain objections and conduct by appellees’ counsel during the taking of a deposition. Failure to argue a point on appeal constitutes a waiver. Hazen v. City of Boonville, 260 Ark. 871, 545 S.W.2d 614 (1977); Brockwell v. State, 260 Ark. 807, 545 S.W.2d 60 (1976).

Affirmed.

Special Justice Henry Kinslow joins in this opinion.

Corbin, Brown, J.J., and Special Chief Justice B.W. Sanders, dissenting.

Jesson, C.J., and Glaze, J., not participating.

ROBERT L. Brown, Justice,

dissenting. This is a complex matter involving the Chalmers Toyota dealership in West Memphis and the parent company for Toyota as well as the regional Toyota distributors. The majority affirms summary judgment against Chal-mers, and in favor of the Toyota corporations, on the ground that Chalmers’s complaint filed on August 27, 1993, was too late and violated the three-year limitations period for torts. I disagree because I believe a fact question has been created by Toyota’s actions.

Chalmers’s contention is that Toyota has discriminated against his dealerships in West Memphis compared with the Toyota dealerships in Memphis. This discrimination took the form of price disparities for vehicles shipped into the Memphis and West Memphis markets, with higher prices for the same vehicles assessed to Chalmers’s West Memphis dealership. It also took the form of vehicles loaded with accessories being made available to Chalmers which resulted in higher prices to him as compared to his Memphis counterparts. The problem arises, according to Chalmers, because West Memphis and Memphis are in different distribution regions for Toyota: West Memphis is in Gulf States Toyota region (GST) and Memphis is in Toyota Motor Distributors region (TMD).

According to the record before us. Chalmers complained bitterly about this disparate treatment but, according to Chalmers, GST gave him assurances that the matter would be rectified. In 1990 and 1991 those efforts to cure the situation centered around Chalmers being placed in the TMD region with the Memphis dealerships. That would have eliminated the disparity in treatment between the dealerships in West Memphis and Memphis. According to Chalmers, GST was amenable to the idea and misled him into believing that this solution was viable.

The chronology on this point is important:

October 4, 1989:

Chalmers wrote the parent company, Toyota Motor Sales, that the price of cars to him was more than the Memphis dealerships. He said he did not know how long the price discrimination had existed but that it should be investigated.

October 16, 1989:

Toyota Motor Sales wrote Chalmers that there were no discriminatory pricing practices and that the Gulf States Toyota president would work with him to create a situation where its dealers were competitive.

December 1, 1989:

Chalmers wrote Toyota Motor Sales and contested the division of one metropolitan area (Memphis and West Memphis) into two operating distributorships with separate pricing policies.

January 22, 1990:

Chalmers met with Gulf States Toyota representatives to discuss, among other things, his joining the TMD region with the Memphis dealerships. GST, according to Chalmers, committed to solving his problem.

March 12, 1990:

Chalmers wrote to Gulf States Toyota that his sales deficiencies were due to the discriminatory pricing between the West Memphis and Memphis markets.

July 1, 1992:

Chalmers wrote Jerry Pyle, Gulf States Toyota’s president, that GST had disregarded its commitment to rectify his situation. One solution had been his transfer into the same distribution region as Memphis. He wrote that though GST had committed to correcting his problem in January 1990, when he contacted Toyota Motor Sales in December 1990, the company was unaware of this commitment.

July 15, 1992:

Jerry Pyle, president of Gulf States Toyota, wrote Chal-mers that Gulf States Toyota was not discriminating with its pricing and that a market study had been conducted of the West Memphis market which “irrefutably demonstrated” that West Memphis should not be part of the Memphis distribution area. Pyle wrote: “TMS and GST consider this issue closed ...”
Pyle added that GST stood ready to assist him in his sales performance but then stated: “If, for any reason, you choose not to work toward the solution that I have suggested, there are other forums (both administrative and legal) where you can properly address your grievances.”

Chalmers’s argument contemplates that Toyota cajoled, manipulated, and ultimately misled him into believing the situation would be cured by placing him in the TMD region with the Memphis dealerships. This occurred until July 15, 1992. That constitutes enough positive action in my judgment under First Pyramid Life Ins. Co. v. Stoltz, 311 Ark. 313, 843 S.W.2d 842 (1992), cert. denied, 510 U.S. 908 (1993), to raise a fact question concerning a concealment of Toyota’s true intentions. Certainly, Chalmers relied on Toyota’s promise to study his unique marketing region. A market study was done, but Chalmers was not told that the issue was closed until Jerry Pyle’s letter in 1992. With that letter, negotiations broke down, and Toyota referred Chalmers to the courts.

We are not required at this juncture to determine whether substantial evidence supports Chalmers’s claim of concealment but only to decide whether a material issue of fact exists. Ark. R. Civ. P. 56. I conclude that one does. I would remand this matter so that Chalmers can further develop his case.

Corbin, J., joins.

SANDERS, B.W., Special Associate Justice, joins.