author: Donald L. Corbin, Justice. Robert L. Brown, Justice,

text:
    Frances LANCASTER and Larry Lancaster v. John G. FITZHUGH
    92-115
    839 S.W.2d 192
    Supreme Court of Arkansas
    Opinion delivered October 12, 1992

      Matthew Horan, for appellants.

      James E. O’Hern III, for appellee.
   Donald L. Corbin, Justice.

This is an appeal from an order of the Sebastian Circuit Court finding that appellee, attorney John Fitzhugh, is entitled to 20% of any recovery by appellants, his former clients Frances and Larry Lancaster, in the setting aside of a trust. On appeal, appellants assert the circuit court erred in entering such an order because it was without subject matter jurisdiction to do so and because it awarded damages not contemplated by the parties. Appellants’ first argument concerning subject matter jurisdiction requires our construction of Ark. Code Ann. § 16-22-304(d) (Supp. 1991); our jurisdiction is therefore proper pursuant to Ark. Sup. Ct. R. 29(1)(c).

The background facts of this case are as follows. Appellant Frances Lancaster claims to be the niece and only heir of the late Grace Phillips Kingsbury. Prior to their deaths, Mrs. Kingsbury and her husband attempted to create an inter vivos charitable trust. Mrs. Kingsbury survived her husband and after her death appellants contacted appellee about attacking the will and trust. Appellants also contacted an attorney practicing in Oklahoma, O. Christopher Meyers, concerning the Kingsbury trust and estate. Appellee and appellants entered a written contract in which the parties agreed that appellee would represent appellants in challenging the will and trust and appellants would pay appellee costs incurred in addition to a legal fee of 20 % of any recovery reached as a settlement or 33 '/3% of any recovery reached at trial. Appellee began work on the case and communicated to appellants, both in writing and orally, the results of his research. Among other issues, appellee researched the possibility of attacking the trust as non-charitable and in violation of the Rule Against Perpetuities. Merchants National Bank of Fort Smith (the Bank), which served as both the trustee of the Kingsbury trust and executor of the Kingsbury estate, offered to settle with appellants for $25,000.00. Appellants refused the offer of $25,000.00, terminated appellee, and hired Mr. Meyers to represent them in the Kingsbury matter. Meyers ultimately initiated an action in federal district court to attack the trust. The Western District of Arkansas held that the trust was not a charitable trust, violated the Rule Against Perpetuities, and ordered that the resulting trust become part of Mrs. Kingsbury’s estate. That decision is currently in the midst of federal appellate procedure.

Shortly after appellants terminated appellee, he filed a complaint against appellants in Sebastian Circuit Court. Appellee’s original complaint was based on the written contract and sought recovery of the reasonable value of services rendered in the Kingsbury matter, $5,000.00, and expenses actually incurred, $185.00. Appellee amended his complaint three times so that ultimately, in addition to the $5,185.00, he sought a declaration of his rights in any recovery of appellants from the Kingsbury estate or trust and asserted an attorney’s lien of 20 % of any such recovery. After a bench trial, the Sebastian Circuit Court held that appellee was entitled to 20% of any recovery by the appellants as a result of the setting aside of the Kingsbury trust. This appeal followed.

Appellants’ first argument is that, pursuant to our Attorneys Lien Law, specifically Ark. Code Ann. § 16-22-304(d) (Supp. 1991), the circuit court was without subject matter jurisdiction to hear the case. In order to understand this issue it is necessary to discuss the status of the Attorneys Lien Law in some detail.

Our Attorneys Lien Law, Ark. Code Ann. §§ 16-22-301 to -308 (1987 &Supp. 1991), has been amended by 1989 Ark. Acts 293. These amendments were a direct response to Henry, Walden & Davis v. Goodman, 294 Ark. 25, 741 S.W.2d 233 (1987), which held that the previous Attorneys Lien Law did not mandate that attorneys who were discharged before suit was filed recover the full contingent fee stated in their contracts. The Goodman case went on to state that the only common law remedy available to attorneys suing on their contingent fee contracts was quantum meruit. Act 293 of 1989 expressed a clear legislative intent that attorneys be allowed to rely on the contracts they make with their clients, regardless of whether the contract is for a contingent fee or otherwise. We have interpreted the 1989 amendments to the Attorneys Lien Law as allowing an attorney who has initiated action on his client’s behalf and then been discharged, to rely on his contract and recover a contingent fee from not only the client, but third persons as well. Lockley v. Easley, 302 Ark. 13, 786 S.W.2d 573 (1990).

With respect to the status of our Attorneys Lien Law, we note that neither party has asked us to overrule our analysis in Goodman, 294 Ark. 25, 741 S.W.2d 233, of the common law remedies available to an attorney suing on his attorney-client contract. While we may be inclined to reconsider our analysis in Goodman, 294 Ark. 25, 741 S.W.2d 233, public policy dictates that we refrain from doing so in the absence of at least one of the parties’ requests. See Otter Creek Dev. Co. v. Friesenhahn, 295 Ark. 318, 748 S.W.2d 344 (1988); Walt Bennett Ford, Inc. v. Pulaski County Special Sch. Dist., 21A Ark. 208, 624 S.W.2d 426 (1981); Starr Farms, Inc. v. Southwestern Elec. Power Co., 271 Ark. 137, 607 S.W.2d 391 (1980). Thus, our application of the law to the facts of this case will be consistent with the statement of the common law in Goodman, 294 Ark. 25, 741 S.W.2d 233.

When the current suit began, it was an action at law based on a written contract. Originally then, the circuit court had proper subject matter jurisdiction. Springdale Sch. Dist. v. Jameson, 274 Ark. 78, 621 S.W.2d 860 (1981). After the suit was amended to include a request for declaratory relief, the suit was still properly before the circuit court as Ark. Code Ann. §§16-111-103 and -104 (1987), permit courts of record within their respective jurisdictions to declare relief in cases involving the interpretation of contracts. However, appellants do not challenge the circuit court’s jurisdiction to enter a declaratory judgment, they challenge the court’s jurisdiction to award appellee an attorneys lien pursuant to section 16-22-304(d). Section 16-22-304(d), provides as follows:

The court or commission before which an action was instituted, or in which an action may be pending at the time of settlement, compromise, or verdict, or in any chancery court of proper venue, upon the petition of the client or attorney at law, shall determine and enforce the lien created by this section.

Appellants’ argument is that the federal district court, not the circuit court, is the court in which appellee should have sought the determination and enforcement of his lien because the federal district court is the court “before which an action was instituted” on their behalf against the Kingsbury trust. Appellee responds with the argument that the circuit court is the proper court to determine and enforce his lien because it is the court in which his suit on the contract was instituted.

It is significant to note that despite the language in which both parties present their arguments to this court, the circuit court’s order did not specifically grant appellee a lien. The order declared appellee’s rights under the contingent fee contract. We previously determined that the circuit court could do just that — declare the parties’ rights under the attorney-client contract. However, the circuit court erred in making the particular declaration allowing appellee a 20 % interest in appellants’ potential recovery against the Kingsbury trust and estate. Instead of making such a declaration, the circuit court should have considered a declaration of whether or not appellee was entitled to a fee based on quantum meruit as is required by the application of Goodman, 294 Ark. 25, 741 S.W.2d 233, and section 16-22-304(d) to the facts of this case. Our reasoning in determining the circuit court’s error follows.

Goodman, 294 Ark. 25, 741 S.W.2d 233, limited a discharged attorney suing on his contingent fee contract to a quantum meruit recovery. That was so even though the language to the effect that the contract governs was a part of the Attorneys Lien Law at the time the Goodman case was decided. See Ark. Code Ann. § 16-22-301 (1987) and Ark. Code Ann. § 16-22-302 (Supp. 1991). We need only state parenthetically that, if the lien law was the basis of the decision in the case now before us, it was handled in the wrong court. Here the trial court simply entered declaratory judgment that the lawyer was entitled to the amount contracted for. No mention is made in the court’s order of the lien statute. It was apparently just a declaration of the discharged attorney’s common law remedy. The declaration conflicts with our determination in the Goodman case that the discharged attorney’s recovery is limited to quantum meruit. The General Assembly, by repeating its statement in the lien law that an attorney-client contract governs the attorney’s right to a fee, has not altered the common law. The circuit court’s judgment of declaration is therefore reversed and remanded.

Because we reverse on the first issue, it is not necessary to address appellants’ second argument that the circuit court erred in awarding damages not contemplated by the parties. See UHS of Arkansas v. Charter Hospital, 297 Ark. 8, 759 S.W.2d 204 (1988).

Reversed and remanded.

Holt, C.J., Hays and Brown, JJ., dissent.

Robert L. Brown, Justice,

dissenting. The majority concludes that the common law affecting contracts for attorney fees was established by Henry, Walden & Davis v. Goodman, 294 Ark. 25, 741 S.W.2d 233 (1987). The Goodman case, however, was an attorney’s lien case brought specifically under Ark. Stat. Ann. § 25-301, et seq. (Repl. 1962), now codified as Ark. Code Ann. § 16-22-301 to 308 (1987 &Supp. 1991). That case did not purport to establish the common law relative to the reasonableness of attorney’s fees but rather dealt with the reasonableness of an attorney’s fee when that attorney had been dismissed without cause and was seeking to enforce a lien for a contingent fee. We said that the dismissed attorney was limited to a lien for quantum meruit damages under those circumstances, because the newly hired attorney also had a contingent fee contract with the plaintiff. In sum, Goodman involved two contingent fee contracts and the enforcement of an attorney’s lien. Neither circumstance is involved in the present case.

But even with respect to its holding under the Attorney Lien Law, Goodman has now been expressly emasculated by act of the General Assembly:

It is hereby found and determined by the General Assembly of the State of Arkansas that the Supreme Court, in H0enry, and Davis v. Goodman, 295 Ark. 25 (1987), limited the existing Attorney’s Lien Law by allowing only a quantum meruit recovery in a case in which the attorney was dismissed by the client; that the Supreme Court’s interpretation of the Attorney Lien Law is contrary to what was intended by the enactment of Acts 59 and 306 of 1941, the Attorney Lien Law; that an attorney should have the right to rely on his contract with his client; and that the Attorney’s Lien Law should be reenacted to protect the contractual rights of attorneys. Therefore, it is the intent of §§ 16-22-302 — 16-22-304 to allow an attorney to obtain a lien for services based on his or her agreement with his or her client and to provide for compensation in case of a settlement or compromise without the consent of the attorney. (Emphasis added.)

Ark. Code Ann. § 16-22-301, as amended by Act 293 of 1989. To hold now that Goodman, which did not concern itself with attorney’s fees outside of the lien context and which now has been expressly overturned by the act of the General Assembly, still lives and metamorphosizes into the common law relative to declaratory judgments for attorney’s fees is incorrect. The holding in Goodman was limited to its facts and dealt exclusively with Arkansas’ Attorney Lien law and two contingent fee contracts.

Common law suits for damages by an attorney for breach of an employment contract have been acknowledged and approved by this court in previous cases and have not been limited to quantum meruit recovery. See, e.g., Berry v. Nichols, 227 Ark. 297, 298 S.W.2d 40 (1957). In Berry, we said:

The authorities generally are not in agreement as to the measure or basis of recovery by an attorney employed under a contingent fee contract who is discharged without fault on his part. In some jurisdictions the discharge of an attorney employed on a contingent fee basis is regarded as putting an end to the contract, so that any recovery of compensation must be exclusively upon quantum meriut. However, in perhaps a majority of jurisdictions, including Arkansas, it has been held that an attorney employed under a contingent fee contract and discharged without fault on his part may recover damages as for breach of contract. Under these cases the measure of recovery usually is the contract price abated by such sum as would in the natural course of things have been incurred if the services had been continued. (Citing authority.)

227 Ark. at 302-303, 298 S.W.2d at 43.

To use Goodman to overturn this authority, which it was never intended to do, is difficult to explain or to justify.

I respectfully dissent.

Holt, C.J., and Hays, J., join.


source: Caselaw Access Project

author: Robert L. Brown, Justice.

license: Public Domain

text:
    CUPPLES FARMS PARTNERSHIP v. FORREST CITY PRODUCTION CREDIT ASSOCIATION, et al.
    92-150
    839 S.W.2d 187
    Supreme Court of Arkansas
    Opinion delivered October 12, 1992

      The R.S. Irving Law Firm, by: Robert S. Irving, for appellant.

      Wright, Lindsey & Jennings, for appellee Cargill, Inc.

      Friday, Eldredge & Clark, for appellee Forrest City Production Credit Association.
   Robert L. Brown, Justice.

Cupples Farms, a partnership, appeals from an order denying its motion to intervene in ongoing litigation as a matter of right and its petition to be subrogated to the cross-claim of Forrest City Production Credit Association against Cargill, Inc. We agree with Farms that the circuit court’s order was a final order which determined the rights of Farms in the litigation. Farms, however, failed to establish a right to subrogation; nor was its motion to intervene timely. For these reasons, we affirm the circuit court’s decision.

In 1979, a separate partnership, Cupples Brothers, was farming in several Arkansas counties and had bumper soybean crops. The principal partners in Brothers were Horace Cupples and Jacob Cupples. As a result of the record crop, Brothers decided to store 11,778 bushels with Blanton Grain Company in Hughes; 7,267 bushels with a storage concern in Memphis, Tennessee; and 50,000 bushels at its farm headquarters in Crittenden County. In February 1980, Brothers borrowed $407,587 from Forrest City PCA to finance the crop that year. An additional $25,000 was borrowed from PCA in July 1980. Both loans were secured by the previously stored soybeans and future proceeds.

The year 1980, however, proved to be disastrous for soybeans due to hot weather, and in order to pay off the PCA loans, Brothers decided to sell the soybeans in storage. Unbeknownst to Brothers, during the summer of 1980, Hubert Blanton, Jr., sold the 11,778 bushels stored at his company to Cargill, Inc., of Memphis, Tennessee and converted the proceeds of that sale to his own use. Blanton then persuaded Brothers to sell the remaining soybeans to Cargill. Brothers agreed, and Blanton did so, but when he was paid by Cargill, he again converted the proceeds. As a result of Blanton’s actions, Brothers and PCA received none of the proceeds from these sales. PCA then demanded payment from Brothers on the 1980 loans.

In April 1981, Horace Cupples and Jacob Cupples formed a new partnership called Cupples Farms. When PCA made demand on Brothers, Farms negotiated a loan with Farmers Home Administration in the total amount of $851,690. The loan involved three promissory notes, all signed by Horace Cupples and Jacob Cupples as partners in Farms. The notes were secured by farmland owned by Farms. In May 1981, Farms used part of the loan proceeds to pay off the 1980 debt owed by Brothers to PCA.

Brothers and Horace Cupples filed suit against PCA, Car-gill, and Hubert Lee Blanton, Jr. and Hubert Lee Blanton, Sr. on August 1, 1983, for negligence and various intentional torts resulting in the loss of the soybeans. Thereafter, PCA cross-claimed against Cargill for negligence in not observing reasonable commercial standards in determining ownership of the soybeans and PCA’s lien and counterclaimed against Brothers and Horace Cupples. In an amended counterclaim in 1984, PCA referred to Farms as “the surviving entity” of Brothers. Horace Cupples on behalf of Brothers answered the counterclaim in part by stating that the assets and debts of Brothers and Farms were not the same.

In 1990, Farms filed for bankruptcy protection under Chapter 12. That same year Jacob Cupples died leaving Horace Cupples as sole partner of both Brothers and Farms. On March 6, 1991, Farms sought to intervene as a matter of right under Ark. R. Civ. P. 24(a) in the original lawsuit filed by Brothers and Horace Cupples and to assert subrogation rights to PCA’s cross-claim against Cargill. A hearing was set on the motion to intervene and petition for subrogation on July 29, 1991, but before the hearing, PCA and Cargill informed the circuit court that they had settled the cross-claim. The hearing proceeded in any event, at which time Horace Cupples testified that Brothers ceased to exist in early 1980 and Farms began winding up its affairs in 1990 after Jacob Cupples’ death.

On September 17, 1991, the circuit court denied Farm’s motion noting that “Horace Cupples still has his original and amended action pending against PCA and Cargill.” The court found the motion to intervene to be untimely as a matter of law. It further found that Farms and Brothers were distinct entities and that Farms had no legal obligation to pay off Brothers’ debt, thus rendering subrogation unavailable to Farms. On January 22, 1992, the circuit court dismissed the cross-claim of PCA against Cargill at PCA’s request.

I. APPEALABILITY OF ORDER DENYING INTERVENTION AS A MATTER OF RIGHT

PCA argues that Farms’ appeal is from an interlocutory order that did not resolve all of the issues among all of the parties. While issues involving the parties remain to be decided in this case, the circuit court’s order denying intervention to Farms as a matter of right precludes any other avenue for a Farms appeal.

Farms moved to intervene under Ark. R. Civ. P. 24(a):

Intervention of Right. Upon timely application anyone shall be permitted to intervene in an action: (1) when a statute of this state confers an unconditional right to intervene; or (2) when the applicant claims an interest relating to the property or transaction which is the subject of the action and he is so situated that the disposition of the action may as a practical matter impair or impede his ability to protect that interest, unless the applicant’s interest is adequately represented by existing parties.

Farms now urges that intervention is the only practical and effective means for it to protect its claimed interest in the litigation. This view was espoused in a recent Pennsylvania case. See Van Den Heuval v. Wallace, 555 A.2d 162 (Pa. Super. 1989), where an insurance company petitioned to intervene in a workers compensation case and to be subrogated to the employee’s tort claim against a third party. The trial court denied intervention. The Superior Court held that the order was appealable and reversed on the basis that there was no other way for the denied petitioner to appeal from that order. The court stated:

It is unrealistic to suggest that [the carrier’s] interest can be protected by a subsequent action against [the employee] . If the third party action is settled without notice to [the carrier], its subrogation claim is at the mercy of the employee who, having received payment, can dispose of the settlement proceeds as he chooses. The order of the trial court which denied intervention, therefore, has the practical effect of denying relief to [the carrier], which cannot fully protect its subrogation interests in any other way.

555 A.2d at 163. Other jurisdictions agree that an order denying intervention as a matter of right is appealable. See, e.g., Hines v. D’Artois, 531 F.2d 726 (5th Cir. 1976); New York Public Interest Research Group v. Regents, 516 F.2d 350 (2d Cir. 1975); Ashland Public Library Board v. Scott, 610 S.W.2d 895 (Ky. 1981); but see United States v. United States Steel Corp, 548 F.2d 1232 (5th Cir. 1977) (denial order not appealable when intervention petition filed after judgment).

We are aware that this view on the appealability of an intervention-of-right order is not unanimous. An alternative view maintains that the potential intervenor should have a legal right in fact to intervene as opposed to claiming a legal right to intervene. See, e.g., Brotherhood of RR Trainmen v. B & O R.R. Co., 331 U.S. 519 (1947). But that requires a merits determination, and our rule is clear in stating that the movant need only claim a legitimate interest to warrant review. Additionally, it appears somewhat self-defeating to grant review conditioned on whether the movant has an actual claim and then undertake a full-blown analysis of whether the claim is valid in order to determine appealability. This same point was made in the Editorial Comment to an ALR annotation:

As a matter of procedural economy, it seems incongruous to condition the permissibility of an appeal upon the same facts upon which its merits depend. Since in any event the court has to examine the two fundamental questions above stated [whether intervention is a mater of law or whether denial is an abuse of discretion], it is believed the better view [is] to hold that orders denying the right of intervention are appealable.

Appealability of Order Granting or Denying Right of Intervention, 15 A.L.R.2d § 2, pp. 342-343. Moreover, this court and the Arkansas Court of Appeals, while not confronting the issue of appealability directly, have entertained an appeal in several cases from the denial of a motion to intervene. See, e.g., Polnac-Hartman & Assoc v. First National Bank in Albuquerque, 292 Ark. 501, 731 S.W.2d 202 (1987); Billabong Products, Inc. v. Orange City Bank, 206 Ark. 278, 644 S.W.2d 594 (1983); Bank of Quitman v. Phillips, 270 Ark. 53, 603 S.W.2d 450 (1980).

The Third Circuit Court of Appeals is of like mind. That court held in a suit interpreting intervention of right under Federal Rule 24(a), which is identical to our rule, that an order denying intervention of right is final and appealable. Pennsylvania v. Rizzo, 530 F.2d 501 (3dCir. 1976). In so holding, the Third Circuit rejected the older rule that hinged appealability on whether the intervenor, in fact, did have a right to intervene and stated: “It is sufficient that intervention of right was sought and denied to render the denial appealable.” 530 F.2d at 504.

We agree. The fact that Farms claimed an interest in the litigation which was found wanting by the circuit court does not undercut appealability. We hold that the denial of an intervention of right based on a claimed interest in the litigation which may be unprotected, such as we have here, constitutes an appealable order under Ark. R. App. P. 2(a)(2).

II. TIMELINESS OF MOTION TO INTERVENE

The circuit court found as a matter of law that Farms failed to assert whatever rights it may have had in PCA’s cross-claim in due time under Ark. R. Civ. P. 24(a). Farms argues, however, that over the seven-year period it believed PCA was protecting its interest in the cross-claim against Cargill and only recently concluded that it was not.

Timeliness under Rule 24(a) is a matter lying within the discretion of the trial court and will not be subject to reversal absent abuse of that discretion. Polnac-Hartman & Assoc v. First National Bank, supra; see also, NAACP v. New York, 413 U.S. 345, 365-366 (1973), where the Court stated that the trial court in exercising its sound discretion “must first be satisfied as to timeliness” and that “timeliness is to be determined from all the circumstances.” The issue then left to be resolved is whether the circuit court abused its discretion. We hold that it did not.

Factors to consider in a decision on timeliness are: 1) how far the proceedings have progressed; 2) any prejudice to other parties caused by the delay; and 3) the reason for the delay. Leach v. Standard Register Co., 94 F.R.D. 192 (W.D. Ark. 1982). Delay in asserting a right is obviously a critical factor. For example, a federal district court in Pennsylvania denied intervention as untimely specifically because the intervenor chose to remain inactive for two-and-a-half years. Dodson v. Salvitti, 11 F.R.D. 674 (E.D. Pa. 1977).

Farms could have asserted its rights as early as 1981 when it paid the debt Brothers owed to PCA, but it declined to do so. We give little credence to its proffered explanation that it believed PCA was protecting its interest and only discovered late in the game that it was not. PCA had been sued by Brothers in l983 and had counterclaimed against Brothers and sought to foreclose property owned by Farms in 1984. To contend that the arrangement between Farms and PCA was “friendly” and that PCA was prosecuting its cross-claim against Cargill on Farms’ behalf are improbable assertions in light of the litigation. We certainly perceive no duty on the part of PCA to protect the interest of Farms. See Dodson v. Salvitti, supra.

Not protecting a claimed interest in over four hundred thousand dollars for either seven or ten years shows a profound dilatoriness in pursuing that claim. We cannot say that this failure on Farms’ part has not prejudiced those remaining parties whose position is antithetical to that taken by Farms. Clearly, PCA and Cargill have sought to settle their differences. Moreover, the reason given for the delay does not withstand scrutiny. We hold that the circuit court’s ruling on untimeliness was correct.

III. RIGHT TO SUBROGATION

We further hold that the circuit court was correct in deciding that Farms had no legal right to be subrogated to PCA’s cross-claim against Cargill.

The 1980 promissory notes made payable to PCA were signed by Horace Cupples and Jacob Cupples on behalf of Brothers and individually as well. The debt was paid off, however, by Farms. Only Farms sought to intervene in 1991 — not Horace Cupples or Jacob Cupples as individuals. The circuit court found that Farms was a separate and distinct entity from Brothers and had no legal obligation to pay Brothers’ debt. The court then dismissed Farms’ theory that it felt compelled to pay Brothers’ debt because, otherwise, PCA would have ceased lending Farms money. The court stated that there was no convincing evidence to support it.

We agree with the circuit court and observe no legal interest of Farms in'the action and can discern no legal obligation requiring Farms to pay Brothers’ debt in 1980. With no legal interest to protect, Farms was little more than a volunteer and intermeddler which renders subrogation unavailable as a remedy. Moon Realty Co. v. Arkansas Real Estate Co., 262 Ark. 703, 560 S.W.2d 800 (1978); see also Baker v. Leigh, 238 Ark. 918, 385 S.W.2d 790 (1965) (one having interest in real property who pays off debt is entitled to subrogation and is not a volunteer). Accordingly, subrogation is not appropriate. See Blackford v. Dickey, 302 Ark. 261, 789 S.W.2d 445 (1990).

There is one final point. Horace Cupples and Jacob Cupples were principal partners of both Brothers and Farms from 1979 until Jacob Cupples’ death in 1990. If Brothers and Farms were found to be identical entities due to the commonality of partners or had ceased to exist, as Horace Cupples maintained at the hearing, then subrogation would not lie because the partners of the supposed subrogee, Farms, in effect, would be satisfying their own debt owed as the partners for Brothers. Subrogation is only available when one, not primarily responsible for the obligation, pays it off. Blackford v. Dickey, supra; Whitley v. Irwin, 250 Ark. 543, 465 S.W.2d 906 (1971). Here, arguably at least, Horace Cupples and Jacob Cupples satisfied their own debt using Farms as a vehicle for that purpose.

In sum, Farms claimed an interest in the litigation but does not qualify as a subrogee under these facts. Moreover, the motion to intervene was untimely. The circuit court, therefore, was correct in its decision, and there was no abuse of discretion. Because we affirm the circuit court on the twin grounds of untimeliness and the absence of a subrogation right, there is no need to address the remaining issues raised in this appeal.

Affirmed.

Glaze, J., concurs.


author: Robert H. Dudley, Justice. David Newbern, Justice,

text:
    INSURANCE FROM CNA d/b/a National Fire Insurance Company of Hartford v. The KEENE CORPORATION; Genlyte Group, Inc.; and Ben Chatham d/b/a Red Barn Store
    92-121
    839 S.W.2d 199
    Supreme Court of Arkansas
    Opinion delivered October 19, 1992

      Wright, Lindsey and Jennings, by; James M. Moody, Jr., for appellant.

      Ramsay, Bridgforth, Harrelson & Starling, for appellee.
   Robert H. Dudley, Justice.

Dorothy Kossman filed suit against the appellees and, eight years later, the trial court dismissed the suit. Appellant, Insurance from CNA d/b/a National Fire Insurance Co. of Hartford (“CNA”), appeals as the real party in interest. The case was certified to this court by the court of appeals. We affirm the dismissal of the complaint, but modify it to be without prejudice.

On February 9, 1982, more than ten years ago, Dorothy Kossman’s house and its contents were partially destroyed by fire. On December 21, 1983, she filed a complaint against the Keene Corporation, Keystone Transformer Company, Vernon Riley d/ b/a Riley Electric Company, and Ben Chatham d/b/a Red Barn Store. She alleged that a fire originated in a florescent light fixture in her kitchen and that the various defendants manufactured, distributed, and installed- the light fixture and its components. She alleged that she had suffered damages in the amount of $61,574.65.

Over three years later, on April 7, 1986, Kossman amended her complaint to add Genlyte Group, Inc. as a defendant. The amended complaint alleged the same amount of damages as had been specified in the original complaint, and the prayer for relief was also for the same amount. Later, in her deposition, Dorothy Kossman testified that CNA had paid her $61,574.65, the exact amount she had alleged as damages in both her complaint and amended complaint. Defendant-appellee Keene Corporation then filed a motion for judgment on the pleadings, or alternatively, for summary judgment. It contended that it was entitled to such relief because Kossman had been fully reimbursed for the damages she had suffered and therefore was not the real party in interest.

About a year and a half later, on October 8, 1987, Kossman filed a second amended complaint which again stated that Kossman had suffered damages in the amount of $61,574.65, but the prayer was increased to $61,674.65. The amended complaint did not set out any fact to justify the additional $100.00 asked in the prayer.

Shortly after the filing of the second amended complaint, on October 23, 1987, over five years after the fire, defendantsappellees Keene Corporation and Genlyte filed a motion to dismiss the second amended complaint, or in the alternative, to strike the second amended complaint. They alleged that any new claim on behalf of Kossman personally, as possibly was represented by the $100.00 increase in the amount of relief asked, was barred by the statute of limitations. Appellee Keene also alleged that CNA was the real party in interest, and any claims it might have were also barred by the statute of limitations.

Two years later, seven years after the fire, on October 16, 1989, the trial court ruled that the original action was a subrogation action by CNA since the amount of damages alleged by Kossman was the exact amount paid to her by CNA as a result of the fire. There is no appeal from that ruling. The trial court also ruled that if Kossman’s amendment to the complaint, simply adding $100.00 to the prayer, was an attempt to make her a real party in interest, such a new action was barred by the statute of limitations. The court additionally ruled that under Rule 17 of the Arkansas Rules of Civil Procedure, CNA was allowed a reasonable time to substitute itself as the plaintiff. The trial court set ten days as a reasonable time for the amendment. The order, signed and entered, on October 16, 1989, dismisses the Kossman claim and provides, “[T]he real party in interest is granted ten (10) days to amend its complaint to substitute its name as plaintiff.”

Unfortunately, CNA did not amend the complaint within ten days to substitute itself as plaintiff. Instead, on October 26, 1989, within the ten-day time limit, CNA filed a motion to amend the complaint. In this appeal, CNA does not contend that the motion to amend was itself a timely amendment. It was not until November 14, 1989, or twenty-eight days after the order, that CNA, by a third amended complaint, attempted to substitute itself as the real party in interest. After that, the defendantsappellees filed a motion to strike CNA’s third amended complaint and filed a motion to dismiss since CNA had not amended its complaint within the ten days allowed by the court.

A hearing was held on April 8,1991, on appellees’ motion to strike CNA’s third amended complaint and on the motion to dismiss. The trial court ruled that it had directed CNA to substitute itself as the real party in interest within ten days of the order, and, since CNA had not substituted itself within that period, the case should be dismissed. A corresponding order was entered, and CNA appeals.

Appellant CNA argues that, under the Arkansas Rules of Civil Procedure, it should have been allowed to amend the complaint to substitute itself as a real party in interest. Rule 17 provides in part:

(a) Real Party in Interest. Every action shall be prosecuted in the name of the real party in interest.... No action shall be dismissed on the ground that it is not prosecuted in the name of the real party in interest until a reasonable time has been allowed after objection for ratification of commencement of the action by, or joinder or substitution of, the real party in interest; and such ratification, joinder or substitution shall have the same effect as if the action had been commenced in the name of the real party in interest.

The first issue is whether the ten days the trial court allowed appellant CNA to substitute itself as the plaintiff was a “reasonable time.” “What constitutes a reasonable time [under Rule 17] is a matter of judicial discretion and will depend upon the facts of each case.” 6A Wright, Miller, & Kane, Federal Practice and Procedure § 1555 (1990). The proposed amendment was a simple one. Appellant CNA knew all of the facts surrounding the proposed amendment and had known of them for two years. The case was over six years old and needed to be moved along toward trial. Under these facts, we cannot say that the trial judge abused his discretion by setting a ten-day period for the substitution of the real party in interest. Accord, Lucas v. Durabond Prods. Co., 510 F. Supp. 999 (W.D. Penn. 1981).

Rule 15 of the Arkansas Rules of Civil Procedure governs the general amendment of pleadings. The Arkansas Rule is liberal in allowing parties to amend pleadings at any stage in the proceedings without leave of court. However, under Rule 15, a court may strike an amended pleading if, upon objection by the opposing party, the court determines that prejudice would result. Appellant argues that the trial judge erred in dismissing its complaint without first establishing that appellees had been prejudiced. The argument would be valid if the amendment had been timely filed, see Schmidt v. McIlroy Bank & Trust, 306 Ark. 28, 811 S.W.2d 281 (1991), but the appellant’s problem here is that the amendment was not filed within the ten days clearly ordered by the court.

Rule 41(b) of the Arkansas Rules of Civil Procedure gives the trial court the authority to dismiss cases in which the “plaintiff has failed to comply . . . with any order of the court.” In previously construing this rule we have held that a trial court did not abuse its discretion in dismissing a plaintiffs complaint when the plaintiff twice disregarded the court’s order to prepare a necessary instruction. Superior Seeds, Inc. v. Crain, 280 Ark. 142, 655 S.W.2d 415 (1983). Again, our standard of review is whether the trial court abused its discretion. In this case the claim arose in 1982, the plaintiff filed her complaint in 1983, there were various amendments, and finally in 1989, the trial court gave CNA ten days to amend the complaint to show that it was the real party in interest. The same attorneys represented both Kossman and CNA. Under such circumstances, the trial court’s dismissal for failure to comply with a ten-day time limitation was not arbitrary or an abuse of discretion. If we were to hold otherwise, we would deny the trial court’s ability to effectively control its docket. However, such dismissals are to be without prejudice. See A.R.C.P. Rule 41(b). Accordingly, we modify the dismissal to be without prejudice.

Appellant CNA next attempts to argue that the trial court erred in refusing to grant plaintiff Kossman leave to amend her complaint to reflect her $100.00 deductible and then to relate the amendment back to the time of the original complaint. We do not reach the issue.

The Kossman amended complaint was dismissed on October 16, 1989. At that time CNA was granted ten days to substitute itself as the real party in interest. The CNA amended complaint was dismissed on May 14, 1991, seventeen months later. The notice of appeal designates that the appeal is from the “order of dismissal entered on May 14, 1991,” that is, the order dismissing CNA’s action and not the one dismissing Kossman’s. The notice of appeal designates CNA as the appellant. While the notice of appeal might have been amended, see Little Rock Traction & Electric Co. v. Hicks, 78 Ark. 597, 94 S.W. 711 (1906), such an amendment was not sought, and CNA stands as the only designated appellant. The Kossman interest and the CNA interest are not common; their points of appeal are different. CNA does not offer any reason it has standing to argue a point of appeal for Dorothy Kossman, and we know of none. In Hurley v. Bevens, 57 Ark. 547, 549, 22 S.W. 172, 172 (1893), we said, “ ‘Judgments, though erroneous as to parties who do not appeal, will not be reversed upon the appeal of a party as to whom there is no error.’ ” [Quoting Mann v. State, 37 Ark. 405 (1881); Harris v. Harris, 43 Ark. 542 (1884); Mansfield’s Digest, sec. 1303.] Accordingly, we hold that appellant CNA does not have standing to argue a separate point of appeal for Dorothy Kossman, and we therefore do not reach the issue.

Affirmed as modified.

Newbern, J., concurs.

Brown, J., not participating.

David Newbern, Justice,

concurring. The majority opinion is correct. I agree with all of it, and I write only to make clear that the problem here was caused by the erroneous determination that Ms. Kossman was not the real party in interest.

The real party in interest is the one who can discharge the claim. Gladden v. Bucy, 299 Ark. 523, 722 S.W.2d 612 (1989); House v. Long, 244 Ark. 718, 426 S.W.2d 814 (1968). That was Ms. Kossman. Summerhill v. Shannon, 235 Ark. 617, 361 S.W.2d 271 (1962).


author: David Newbern, Justice. Dudley, J.,

text:
    DELTA SCHOOL OF COMMERCE, INC., Delta School of Commerce Alexandria, Inc. d/b/a Delta Career College v. Lula HARRIS, Veronica Hicks, Joanne Holloway, Nawania Williams, Carolyn Harris, and Donna Smith
    91-245
    839 S.W.2d 203
    Supreme Court of Arkansas
    Opinion delivered October 19, 1992

      Rose Law Firm, by: Tim Boe and Mark Alan Peoples, for appellants.

      Everett O. Martindale, by: Melinda Gilbert, P.A., for appellees.
   David Newbern, Justice.

This is a fraud case. Lula Harris, Veronica Hicks, Joanne Holloway, Nawania Williams, Carolyn Harris, and Donna Smith (the students) are the appellees. They claimed that admissions representatives of Delta School of Commerce, Inc. (Delta), the appellant, knowingly made false statements about Delta’s medical office assistant program, thereby inducing them to enroll. The jury awarded the students compensatory and punitive damages.

Delta alleges error in the Trial Court’s (1) failure to grant their motion for severance and motion for directed verdict on punitive damages, and (2) failure to grant their motion to dismiss because the students did not exhaust an administrative remedy provided through the United States Department of Education before filing suit. We find no error and affirm.

The students’ complaint alleged that, as a result of Delta’s fraudulent misrepresentations, each sustained actual and consequential damages of $13,650. The complaint also sought $50,000 punitive damages per student. Prior to trial, Delta moved to sever the separate claims. Delta asserted a consolidated trial of several claims requesting punitive damages would result in substantial prejudice. Relying on Missouri Pac. R. R. Co. v. Arkansas Sheriff's Boys’ Ranch, 280 Ark. 53, 655 S.W.2d 389 (1983), Delta argued a consolidated trial would unduly emphasize the need to penalize the tortfeasor. No ruling was obtained on the motion for severance.

In the motion, Delta also argued that punitive damages had previously been assessed against it based on the same conduct as involved in the present case, and imposing punitive damages again would constitute a multiple award arising from a single course of conduct. Delta argued its right to due process of law would thus be violated, as would the prohibition against double jeopardy, and the prohibition against excessive fines.

Delta moved to dismiss the complaint due to failure to exhaust an administrative remedy available under regulations promulgated by the Secretary of Education. The motion to dismiss based on exhaustion of administrative remedies was later renewed as a motion for directed verdict at the close of the students’ case. The motion was denied.

The consolidated claims proceeded to trial. The students testified they learned of Delta’s medical office assistant program through television and newspaper ads. They became interested as the ads said a Delta student would be “job ready” in seven months, and financial aid and job placement were available.

The students visited the campus where they spoke with Delta admissions representatives. Victoria Hicks testified an admissions representative told her a medical office assistant position would be waiting for her after graduation from the program. Others were told they would be guaranteed jobs as medical office assistants upon graduation.

There was evidence that Delta did not help any of the students find employment as medical office assistants. An employment manager at Baptist Medical Systems stated there was no position in the Baptist system called “medical office assistant.” Contrary to the promises made by the admissions representatives, none of the students received jobs as medical office assistants.

After the students presented their cases, Delta moved for a directed verdict with respect to the punitive damages claims. Delta again argued that the consolidated trial of several claims requesting punitive damages placed undue influence on the need to punish, and therefore was prejudicial. The Court recognized the problem but refused to grant a directed verdict. Hoping to alleviate any possible prejudice, the Court gave a single punitive damages instruction instead of six. The punitive damages award, if any, would be shared among the plaintiffs.

As part of its motion for directed verdict, Delta reiterated the argument that the cumulative effect of multiple punitive damages awards arising from a single course of conduct violated the United States and Arkansas Constitutions. The jury awarded varying amounts of compensatory damages to the students, totaling approximately $20,000, and $30,000 punitive damages.

1. Multiple claims of punitive damages

In support of the argument that the Trial Court should have directed a verdict on the issue of punitive damages, Delta relies on Missouri Pac. R. R. Co. v. Arkansas Sheriff's Boys’ Ranch, supra. There, sixteen plaintiffs filed four separate complaints requesting compensatory and punitive damages against the Railroad. The actions were consolidated over the Railroad’s objection. The jury returned a punitive damages award of $800,000. The Railroad argued the Trial Court erred by consolidating the cases, and we agreed stating “[t]he consolidation of four cases placed undue emphasis on the need to penalize the tortfeasor.” The MoPac holding was premised upon the prejudice which can result when several claims requesting punitive damages are consolidated in one trial.

One of the purposes of imposing punitive damages is to punish the wrongdoer. Viking Ins. Co. v. Jester, 310 Ark. 317, 836 S.W.2d 371 (1992); Alpha Zeta Chapter of PI Kappa Alpha Fraternity v. Sullivan, 293 Ark. 576, 740 S.W.2d 127 (1987). Unfair prejudice, in this context, will occur if a defendant is punished more than once for the same act or conduct. When several plaintiffs requesting punitive damages are joined in one lawsuit, a defendant runs the risk that he or she will be multiply punished for the same act or conduct. This is especially true in light of the fact that for several plaintiffs to be joined in one lawsuit, they must,

[a]ssert any right to relief jointly, severally or in the alternative in respect of or arising out of the same transaction, occurrence, or series of transactions or occurrences and if any question of law or fact common to all these persons will arise in the action. Ark. R. Civ. P. 20(a) (1992).

We cannot determine from the MoPac opinion whether the Railroad was being multiply punished, through the imposition of punitive damages, for one course of conduct. We do know, however, that Delta was not being punished for a single wrongful act. The testimony indicates Delta engaged in several distinct acts of misrepresentation perpetrated upon different plaintiffs. In these circumstances, we cannot see how Delta has been unfairly prejudiced.

2. Due process

Delta asserts imposing punitive damages in this case constitutes a multiple award of punitive damages arising from a single course of conduct and violates its right to due process of law. Other than very general citations having to do with due process of law and punitive damages, Delta has cited In re Northern District of California Dalkon Shield IUD Products Liability Litigation, 526 F. Supp. 887 (N.D. Cal. 1981), vacated and remanded, 693 F.2d 847 (9th Cir. 1982), cert. denied, 459 U.S. 1171 (1983). The decision of the District Court, which was vacated and remanded by the United States Court of Appeals for the Ninth Circuit, recognized a defendant has a due process right to be protected against unlimited multiple punishment for the same act. (emphasis added). The only other more direct citation is to a dissenting opinion by Judge Heaney in In re Federal Skywalk Cases, 680 F.2d 1175, 1188 (8th Cir.) (Heaney J., dissenting), cert. denied, Stover v. Rau, 459 U.S. 988 (1982). The dissenting opinion expressed essentially the same rationale as the vacated decision. It does not apply here. Delta was not punished more than once for the “same act or conduct.” The evidence supports the conclusion that Delta engaged in separate acts of misrepresentation.

3. Double jeopardy

Delta next contends the punitive damages award violates the double jeopardy clause of the United States Constitution. U.S. Const. amend. 5. The double jeopardy clause does not apply to civil actions. Reed v. Alcoholic Beverage Control Div., 295 Ark. 9, 746 S.W.2d 368 (1988); see also Baggett v. State, 15 Ark. App. 113, 690 S.W.2d 362 (1985). The United States Supreme Court has held double jeopardy encompasses only the risk inherent in proceedings that are essentially criminal. Breed v. Jones, 421 U.S. 519 (1975). A claim for punitive damages is based upon a private wrong and is clearly distinguishable from a criminal prosecution brought on behalf of the public. Accordingly, a civil action for punitive damages cannot infringe on a party’s constitutional right to be free from double jeopardy. E.F. Hutton & Co., Inc. v. Anderson, 42 Colo. App. 497, 596 P.2d 413 (1979); Tuttle v. Raymond, 494 A.2d 1353 (Me. 1985);Svejcara v. Whitman, 82 N.M. 739, 487 P.2d 167 (1971).

4. Excessive fines

Delta argues the punitive damages award violates the excessive fines prohibition found in Ark. Const. art. 2, § 9. The full text of Article 2, § 9, states, “[e]xcessive bail shall not be required, nor shall excessive fines be imposed; nor shall cruel or unusual punishment be inflicted; nor witnesses be unreasonably detained.” The prohibition has been applied to penalties levied by the State. See, e.g., Walton v. Scott, Comm’r, 247 Ark. 268, 445 S.W.2d 97 (1969) (penalty for failure to pay cigarette tax held not excessive); Baker v. State, 199 Ark. 1005, 137 S.W.2d 938 (1940) (fine imposed for crime of libel held not excessive); Payne v. White, 1 Ark. App. 271, 614 S.W.2d 684 (1981) (fineimposed for contempt held not excessive). We know of no case where it has been applied to a civil remedy.

The United States Supreme Court, in Browning-Ferris Indus. v. Kelco Disposal, Inc., 492 U.S. 257 (1989), held the excessive fines clause of the Eighth Amendment inapplicable to a civil award of punitive damages. The Court relied on the precise language of the Amendment, which is virtually identical to the language of our Article 2, § 9, and the legislative history surrounding its adoption. The Court stated:

Given that the Amendment is addressed to bail, fines, and punishment, our cases long have understood it to apply primarily, and perhaps exclusively, to criminal prosecutions and punishment.
* * *
Simply put, the primary focus of the Eighth Amendment was the potential for governmental abuse of its “prosecutorial” power, not concern with the extent or purposes of civil damages.

The Browning-Ferris case presents persuasive reasoning in support of our conclusion that a civil punitive damages award does not fall within the constitutional prohibition against excessive fines in Article 2, § 9.

5. Exhaustion of remedies

Delta’s last argument is that the Trial Court erred by not dismissing the students’ claims because they failed to exhaust a federal administrative remedy provided by the Secretary of Education. It was undisputed that the students received federal loans or grants which enabled them to enroll in the Delta program.

In 1965 Congress passed the Higher Education Assistance Act with the purpose of assisting eligible students in post-secondary education in paying tuition. 20 U.S.C. § 1070 (1989). The federal assistance comes in the form of loans and grants to students. Congress has explicitly delegated to the Secretary of Education the authority to carry out all the programs of the Act. 20 U.S.C. § 1070(b) (1989).

Pursuant to this grant of authority, the Secretary promulgated several general regulations applicable to institutions participating in a federal student financial assistance program. 34 C.F.R. § 668.1 (1991). Subpart F of the regulations establishes standards and rules by which the Secretary may initiate a proceeding against an otherwise eligible institution for any substantial misrepresentation made by that institution regarding the nature of its educational program, its financial charges, or the employability ofits graduates. § 668.71(a). Misrepresentation by an institution regarding the employability of its graduates in-eludes “false or misleading statements that the institution maintains a placement service or will secure or assist its graduates to obtain employment, unless it provides the student with a clear and accurate description of the extent and nature of the service or assistance.” § 668.74(b).

A student having a misrepresentation claim against an institution may file a complaint with the Secretary. If the official finds the complaint alleges a substantial misrepresentation, he or she may initiate action either to fine the institution, or limit, suspend, or terminate the institution’s eligibility to participate in the federal programs. § 668.75(c)(1). The official may also “take other appropriate action” against the institution. § 668.75(c)(2).

The Secretary may impose a fine of up to $25,000 per violation of the regulations. § 668.84(2). After a final decision by an administrative law judge, the Secretary may require an offending institution to pay any improperly received funds to the Secretary or designated recipients. § 668.95(b).

The doctrine of exhaustion of administrative remedies provides that no one is entitled to judicial relief for a supposed or threatened injury until the prescribed administrative remedy has been exhausted. Myers v. Bethlehem Shipbuilding Corp., 303 U.S. 41 (1938). The doctrine is subject to numerous exceptions, e.g., exhaustion is not required if no genuine opportunity for adequate relief exists. Barr v. Arkansas Blue Cross & Blue Shield, Inc., 297 Ark. 262, 761 S.W.2d 174 (1988). Inadequate administrative remedies need not be exhausted. Coit Independence Joint Venture v. Federal Sav. and Loan Ins. Corp., 489 U.S. 561 (1989).

Under the regulations, the plaintiffs could have filed a misrepresentation claim against Delta with the Secretary. If the Secretary determined the complaint alleged a substantial misrepresentation, he or she could “take appropriate action,” including fining Delta or suspending Delta’s eligibility to participate in the federal programs.

While the regulations may give the Secretary authority to order a school like Delta to refund to students or to the government monies paid in tuition, the administrative remedy remains inadequate. The students claimed entitlement to consequential damages, including lost wages and out-of-pocket expenses, for which there is no provision under the regulations.

Affirmed.

Dudley, J.,

dissents on the basis of Missouri Pac. R. R. Co. v. Arkansas Sheriff’s Boys’ Ranch, 280 Ark. 53, 655 S.W.2d 389 (1983).


author: Tom Glaze, Justice.

text:
    Leon CAWOOD and Jack B. Hollingshead, et al. v. Maurice SMITH, Director, Arkansas State Highway & Transportation Department, et al.
    91-246
    839 S.W.2d 208
    Supreme Court of Arkansas
    Opinion delivered October 19, 1992
    [Rehearing denied November 23, 1992.]

      Jack, Lyon & Jones, P.A., by: Eugene Sayre, for appellant.

      Friday, Eldredge & Clark, by: John Dewey Watson, Robert

      S. Shafer, and Jerry L. Malone, for appellee.
   Tom Glaze, Justice.

The American Trucking Association, Inc. (ATA) initiated this action in May of 1983 to challenge the constitutionality of Act 685 of 1983. The Act imposed a Highway Use Equalization (HUE) tax on all trucks that operate on Arkansas highways at maximum weights between 73,281 and 80,000. ATA pursued this case as a class action against the Arkansas Highway & Transportation Department (AHTD) and other state officials, alleging the HUE tax violated the commerce clause, the privileges and immunities clause, and the equal protection clause of the fourteenth amendment to the United States Constitution. In October of 1984, the trial court upheld Act 685’s constitutionality, and this court affirmed that decision in American Trucking Ass’n v. Gray, 288 Ark. 488, 707 S.W.2d 759 (1986). Important to this appeal, we note that the Arkansas General Assembly enacted Act 721 of 1985 before this court’s 1986 decision, and under that 1985 Act, AHTD was authorized to reimburse Arkansas truck owners for retaliatory HUE taxes imposed on them by sister states. The funds for these reimbursements were to come from the HUE taxes collected by AHTD under Act 685. Before Act 721’s passage, the truckers were divided into two subclasses, non-Arkansas-based truck owners and Arkansas-based truck owners. At this stage the Arkansas-based truckers had yet to initiate an action for reimbursement under Act 721 either by separate suit against AHTD or by amending its claim in this ongoing case. Both subclasses were merely seeking refunds of HUE taxes paid under Act 685.

Both classes of truck owners appealed this court’s 1986 decision to the United Supreme Court, which remanded the case for us to reconsider our holding in light of that court’s decision in ATA, Inc. et al. v. Scheiner, 483 U.S. 266 (1987), handed down on June 23, 1987. Upon remand, the two subclasses obtained separate counsel, and Leon Cawood, d/b/a Leon Cawood Trucking, became identified as a representative of the subclass of Arkansas truck owners. The Arkansas Poultry Federation also was allowed to intervene at this point. Even though the Arkansas General Assembly had already repealed Act 685 by enacting Act 3 on October 9, 1987, this court on March 14, 1988, proceeded to hold Act 685 unconstitutional, and remanded this cause to the trial court for an accounting and determination of the amount of HUE taxes to be refunded to the first subclass, the non-Arkansas-based truck owners. The court’s opinion also stated that the Arkansas Poultry Federation intervenors had intervened on behalf of all Arkansas truck owners and that those owners sought no refund of HUE taxes.

The non-Arkansas truck owners petitioned for rehearing seeking refunds for a broader period than this court allowed, and the Cawood truckers sought clarification concerning this court’s statement that all Arkansas truck owners sought no refunds. The Cawood truckers further requested they be permitted to assert their entitlement to reimbursement under Act 721 of 1985, when the case was on remand to the trial court. On April 25, 1988, we denied the non-Arkansas truckers’ rehearing petition, but no mention was made of Cawood’s clarification petition. Perhaps, no mention was made because Cawood had filed no briefs at this particular stage of the proceedings, relying instead upon the other parties. Another reason Cawood’s petition was not addressed could have been that the reimbursement remedy under Act 721 had never been a part of this case until its mention in Cawood’s April 25th petition for clarification. Regardless, Cawood obtained no ruling on its clarification petition, and from the record, it appears he was not entitled to one.

After this court denied the non-Arkansas truckers’ rehearing petition, those truckers petitioned the Supreme Court for the relief they asked from us and obtained it. In a split decision on June 4, 1990, the Supreme Court again remanded this case to us for further proceedings. ATA, Inc., et al. v. Smith, 496 U.S. 167 (1990). On July 16, 1990, we again remanded this case to the trial court for an accounting of the refund amounts and award of attorneys’ fees.

While this case was on remand to the trial court, negotiations commenced in January of 1991 between the parties, excepting the Arkansas truckers represented by Cawood, and the parties reached a settlement agreement which generally provided that the approximate amount of $60 million HUE taxes held in escrow would be divided $35 million to AHTD (and Arkansas’ cities and counties) and $25 million to the truck owners.

On April 16, 1991, the Cawood truckers filed a response with the trial court requesting the settlement agreement submitted for court approval be modified to provide for payment of the reimbursement remedy to which the Arkansas truckers claimed they were entitled under Act 721. They proposed such payments be made from the $35 million AHTD would receive under the settlement. In support of their request, the Cawood truckers asked they be allowed to supplement their pleadings to specifically raise their reimbursement remedy provided under Act 721. The trial court denied the Cawood truckers’ request on May 2, 1991, and on May 29, 1991, approved the settlement as proposed by the other parties. The Cawood truckers bring this appeal solely on the issue that the trial court erred in denying them the right to assert their reimbursement remedy under Act 721. We cannot agree.

This action was commenced in 1983, and while the reimbursement remedy for retaliatory taxes did not exist until Act 721 was enacted in 1985, neither the Cawood truckers nor other Arkansas truckers instituted a separate suit for the reimbursement of such taxes. Nor did they properly interject such a claim before the trial court in this case until April 16, 1991 — immediately before the trial court approved the settlement which had already been reached between the other parties in this lawsuit. It also should not go unnoticed that, by the time the Cawood truckers had filed their motion to amend the settlement of their complaint, the General Assembly had already enacted Act 219 of 1991, which among other things repealed Act 721 and its reimbursement remedy, which the Cawood truckers now wish to assert.

Generally, a party is allowed to amend its pleadings where there is no determination of undue delay or prejudice. ARCP Rule 15(a). The trial court is vested with broad discretion in allowing or denying amendments. Kay v. Economy Fire & Casualty Co., 284 Ark. 11, 678 S.W.2d 365 (1984). Here, we cannot say the trial court abused its discretion in denying the Cawood truckers’ request to amend its original pleading. Cawood and the Arkansas-based truckers waited six years before they attempted to raise the reimbursement remedy issue. The other parties to this litigation had already resolved their differences, and Act 721 had been repealed. We believe the circumstances in this case support the conclusion that undue delay occurred and that the other parties’ rights would be prejudiced by the raising of this new issue that likely would result in further litigation and an appeal. Cawood and other Arkansas truckers had ample opportunity to assert its reimbursement remedy in the trial court when mandates issued from this court to that court after our decisions in both 1986 and 1988. No stay or recall of mandate was requested after either of these decisions. As alluded to earlier, neither did the Arkansas-based truckers pursue their reimbursement right in a separate action after Act 721’s passage in 1985. If they had done so, they would then have been in a position at least to request a consolidation of such an action with this case for settlement purposes.

For the reasons set out above, we affirm the trial court’s ruling to deny the Cawood truckers’ belated motion to raise the reimbursement issue. We need not address the law of the case argument raised by the parties below and here on appeal and relied on by the chancellor in her ruling. Even if we were to agree that the chancellor erred in finding that the appellants’ motion was barred by the law of the case, we uphold the decision of the trial court if it reached the right result, even if it did not enunciate the right reason. Speer v. Speer, 298 Ark. 294, 766 S.W. 297 (1989).

       By this time, the non-Arkansas truckers had filed a second class action against AHTD, challenging the constitutionality of Act 3 which not only had repealed Act 685, but also established a weight-distance tax. This second suit was consolidated with this continuing case for settlement purposes. Also, as a part of the settlement, Act 3 was repealed by Act 219 of 1991.


text:
    WHITE RIVER RURAL WATER DISTRICT v. Frankie MOON and Brenda Moon
    92-335
    839 S.W.2d 211
    Supreme Court of Arkansas
    Opinion delivered October 19, 1992

      Davis & Associates, by: Charles E. Davis, for appellant.

      Don Lloyd Cook, for appellees.
   Tom Glaze, Justice.

This is a tort case in which appellees sued appellant, alleging appellant negligently failed to locate and repair a leak in its water line which had been routed underneath appellees’ property. Appellees asserted the leak caused water to stand around their post oak tree that they used for shade. They claimed appellant’s negligent delay in correcting its faulty line resulted in the eventual loss of their tree. A jury agreed and awarded appellees $9,000 in damages. Appellant argues on appeal that the evidence was insufficient to support the jury’s findings of negligence, proximate cause or its assessment of damages.

Regarding appellant’s argument bearing on negligence, appellees showed that they contacted appellant as soon as the standing water was discovered. The water filled a low area around the tree, and reached a depth causing it to flow off appellees’ property onto a dirt road and into a pasture owned by a neighbor, Mr. James Noland. Appellant insisted its water line was not involved and made repeated suggestions that appellees check specific other underground lines routed on their property. Appellees acted on each suggestion, but found none of the other lines leaked. Mr. Noland previously owned appellees’ property, and he and his wife on separate occasions informed appellant that they recalled appellant’s water line was buried near the oak tree some twenty years ago. Appellant chose to disbelieve the Nolands, and continued to suggest that the appellees look elsewhere for the leak. After appellees unearthed their main water line (replacing it with new pipe) and re-routed their gray water tank line, with no success in finding the water leak, Mr. Noland volunteered to try to locate appellant’s line by digging near appellees’ oak tree. He uncovered the line exactly where he and his wife had previously told appellant it was. Appellant then repaired the line, and the water subsequently disappeared.

Negligence is the failure to do something which a reasonably careful person would do. AMI (Civil 3rd) 301. And a negligent act arises from a situation where an ordinarily prudent person in the same situation would foresee such an appreciable risk of harm to others that he would not act or at least would act in a more careful manner. Id.; Scully v. Middleton, 295 Ark. 603, 751 S.W.2d 5 (198 8). The standard of review on appeal ofajury’s verdict is whether the verdict is supported by substantial evidence, giving the verdict the benefit of all reasonable inferences permissible under the proof. Ferrell v. Whittington, 271 Ark. 750, 610 S.W.2d 572 (1981).

Here, we have no problem in holding sufficient evidence exists to support the jury’s verdict finding negligence. Appellees, along with the Nolands, tried again and again to convince appellant that appellant’s water line was on appellees’ property and that the line leaked, causing water to stand in a pool around appellees’ tree. Appellant obviously did not know where its main water line was, but even so, made guarantees to appellees that appellant’s line was nowhere on appellees’ property. Clearly, the jury could reasonably infer that appellant was negligent in these circumstances.

Also, we hold the evidence was sufficient to support the jury’s findings that appellant’s negligence was the proximate cause of the injury to and loss of the appellees’ tree. Proximate cause means a cause which, in a natural and continuance sequence, produces damage and without which the damage would not have occurred. AMI (Civil 3rd) 501. In an action for negligence, proximate cause may be shown from circumstantial evidence, and such evidence is sufficient to show proximate cause if the facts proved are of such a nature and are so connected and related to each other that the conclusion therefrom may be fairly inferred. Northside Construction Co. v. Huffman, 287 Ark. 145, 697 S.W.2d 89 (1985).

Here, appellees and Noland testified that the appellant’s water line was the only possible source of the pool of water surrounding appellees’ oak tree. Such assertions were based upon their having eliminated all other possible sources and finding none of appellees’ lines leaked. In addition, no water appeared after appellant’s water line was repaired. Appellees’ tree stood in this water for fifteen months, and died approximately eight months after appellant repaired its line. The evidence shows the tree had been on appellees’ property for more than twenty-two years, but suddenly died shortly after appellant’s belated actions to fix its lines. Appellant points to other evidence suggesting other possible reasons for the oak tree’s loss, but we need only consider the evidence favorable to appellees. Price v. Watkins, 283 Ark. 502, 678 S.W.2d 762 (1984). Although appellees’ proof could have been more compelling with expert testimony, we believe that the jury could fairly infer from the circumstantial evidence submitted that the loss proximately resulted from appellant’s negligence. Accordingly, we again are unable to say substantial evidence was lacking in establishing proximate cause.

Appellant’s last point concerns whether substantial evidence exists to support the jury’s assessment of damages. The trial court without objection instructed the jury that it may consider the three following elements of damages when compensating the appellees:

1. The difference in fair market value of the land immediately after the occurrence;

2. the costs of cutting or removal of the dead tree; and

3. any consequential damages incurred by the [appellees] which were proximately caused by the negligence of the [appellant].

Although no objection was interposed to the foregoing instruction, we have adopted the rule that when ornamental or shade trees are injured, the use made of the land should be considered, and the owner compensated by the damages representing the cost of replacement of the trees. Revels v. Knighton, 305 Ark. 109, 805 S.W.2d 649 (1991); Worthington v. Roberts, 304 Ark. 551, 803 S.W.2d 906 (1991). We have also said that the evidence in each case will determine whether an instruction on the differences in the value of the land before and after an occurrence (AMI 2222) or one on the cost of restoration (AMI 2223) should be given. First Elec. Coop. Corp. v. Charette, 306 Ark. 105, 810 S.W.2d 500 (1991). We further said in Charette that we could envision fact situations in which recovery of the replacement cost of trees would yield a result grossly disproportionate to the fair market value of the land and would, therefore, be an inappropriate measure of damages.

Here, the trial court did not instruct the jury on the replacement cost of appellees’ tree. Even so, appellees offered a document published by the Cooperative Extension Service, University of Arkansas, U.S. Department of Agriculture and County Government Cooperative, entitled The Formula Method for Calculating Values of Shade Trees. Appellant initially objected to this document’s introduction because it was hearsay and not the “best” evidence, but when the trial court announced later that it would admit it as a self-authenticating government document, the abstract reflects no objection by the appellant. Nor was there an objection to appellees’ attorney’s handwritten calculation, reflecting the use of the foregoing formula placing the value of the appellees’ oak tree at $10,036.22.

The appellees not only presented evidence pertaining to the replacement cost of their tree, but they also offered proof that they spent $696.00 in expenses when re-routing water and drain lines and incurred costs in the amount of $795.60 for other consequential damages. Appellees’ testimony fell short in establishing before and after damages, since appellee Brenda Moon related their property was worth $25,000 before and after the tree died. Appellee Frankie Moon said that their property was worth $24,500 before and after the loss of the tree.

Because the jury returned a verdict in the amount of $9,000, it is obvious the replacement value evidence placing the tree’s value in excess of $10,000 must have been employed by the jury since consequential damages provided under the trial court’s instruction would have been limited to no more than $ 1,491.60 in view of appellees’ other evidence.

In Worthington, we explained that an instruction containing elements of both the “cost of replacement” rule and the “difference in value of the land rule” would result in double recovery. Here the replacement costs were not a part of the court’s instruction, but the instruction did not expressly or by implication forbid the jury from taking into account the evidence the appellees introduced to establish the replacement value of the tree. See Fred’s Dollar Store v. Adams, 238 Ark. 468, 382 S.W.2d 592 (1964).

As previously mentioned, appellant in this appeal limits its arguments to sufficiency of the evidence. Consistent with our recent holdings in Worthington, Revels and Charette, appellees offered ample evidence regarding the replacement cost of their shade tree. However, we cannot say with confidence which, if any, of the consequential damages the jury might have considered along with appellees’ replacement value evidence when it awarded the $9,000 verdict. Certainly, appellees’ evidence cannot be used to establish an award which would include both replacement costs and consequential damages. In the circumstances, we would remand this case for a new trial, since generally a general verdict is a complete entity which cannot be disturbed. However, when the error relates to a separable item of damages, a new trial can sometimes be avoided by the entry of a remittitur. Such a remittitur is fixed by the highest estimate of the element of damage affected by the error. Martin v. Riegler, 289 Ark. 292, 711 S.W.2d 776 (1986).

Here the land value and consequential damages were a calculable, separable item of damages. These damages at most could have been $1,491.60. If the appellees agree to remit $1,491.60 within seventeen days, the remaining part of the judgment will be affirmed. Otherwise, the cause must be remanded for a new trial.

Affirmed upon agreement of remittitur.

       Appellees presented expenses incurred for tree removal and lost wages.


author: Donald L. Corbin, Justice.

text:
    Shelly SANDERS v. STATE of Arkansas
    CR 92-1085
    839 S.W.2d 518
    Supreme Court of Arkansas
    Opinion delivered October 19, 1992

      John Joplin, for appellant.

      Winston Bryant, Att’y Gen., by: Cathy Hodges, Asst. Att’y Gen., for appellee.
   Donald L. Corbin, Justice.

Appellant, Shelly Sanders, who is deaf, made a pretrial motion to suppress statements given to law enforcement officers on March 4, 1989, on the ground that the statements were obtained in violation of Ark. Code Ann. §16-89-105(c) (Supp. 1991). The trial court overruled the motion to suppress. Appellant entered a conditional plea of guilty to the offense of driving while intoxicated pursuant to Ark. R. Crim. P. 24.3(b), which allows a defendant to “enter a conditional plea of guilty . . . , reserving in writing the right, on appeal from the judgment, to review of an adverse determination of a pretrial motion to suppress evidence” and to withdraw his plea if he prevails on appeal. This appeal followed.

Appellant originally appealed to the Court of Appeals, which transferred the case to us as presenting an issue of statutory construction. Rule 29(1)(c). Since this appeal requires our interpretation of section 16-89-105(c), our jurisdiction is proper pursuant to Rule 29(1)(c).

On March 4, 1989, appellant was at the scene of an accident involving a car which left the roadway and struck a house. Officer Kirk Redwine arrived to investigate the accident. Appellant and another individual, Mr. Holmes, were present as was Mr. Mobley, the owner of the house. At the suppression hearing, Officer Redwine testified when he arrived at the scene Mr. Mobley asked him to come in the house for a minute, which he did. Mr. Mobley told Officer Redwine the car hit the house and when he went outside to see what had happened Mr. Holmes had been trying to move the car back onto the street. Officer Redwine testified that this caused him to believe that Mr. Holmes had been driving the car. Mr. Mobley also told Officer Redwine Mr. Holmes was deaf. Officer Redwine then went outside and was trying to talk to Mr. Holmes when Ms. Sanders got Officer Redwine’s attention by touching him on the shoulder. Ms. Sanders proceeded to tell Officer Redwine that both she and Mr. Holmes were deaf and indicated she had been driving the car. It was at this time Officer Redwine smelled the odor of intoxicants on appellant’s breath. Officer Redwine further testified that he and Ms. Sanders communicated both by trying to speak and by writing notes. From these communications, Officer Redwine determined Ms. Sanders had been driving and had been trying to talk to Mr. Holmes when she lost control of the car. Officer Redwine informed Ms. Sanders that she was going to be taken to the police station and given a breath test. Ms. Sanders was taken to the police station, she was given a copy of the police department form detailing her rights and allowed to read it. She indicated she understood the form and would take the breath test. Ms. Sanders then signed the rights form. Ms. Sanders took the breath test and registered .11.

Appellant argues all the statements given to Officer Redwine were taken in violation of section 16-89-105 (c) and, therefore, are not admissible. Section 16-89-105(c) provides:

In the event a person who is deaf is arrested and taken into custody for any alleged violation of a criminal law of this state, the arresting officer and his superiors shall procure a qualified interpreter in order to properly interrogate the deaf person and to interpret the person’s statement. No statement taken from the deaf person before an interpreter is present may be admissible in court.

We have not previously interpreted this statute. It is appellant’s contention the last sentence “[n]o statement taken from the deaf person before an interpreter is present may be admissible in court” precludes the use of any statement by a deaf person taken by the police without an interpreter present. Appellant’s construction of the statute is overly broad.

Appellant is asking us to read something into this statute that is not there. The basic rule of statutory construction is to give effect to the intent of the legislature, making use of common sense. State v. Joshua, 307 Ark. 79, 818 S.W.2d 249 (1991). Section (c) of the statute must be read as a whole. When read as a whole, it is clear the last sentence refers to the first and the intent is to preclude statements made by a deaf person after arrest and while in custody for any alleged violation of a criminal law of the State of Arkansas without the assistance of an interpreter. A deaf person is not entitled to an interpreter under the statute until after he is arrested and taken into custody. Common sense indicates the reference to an interpreter in the last sentence of section (c) is referring to the first sentence and, therefore, the last sentence applies only when the deaf person has become entitled to an interpreter pursuant to the first sentence. For statements made prior to arrest and being taken into custody, the legislature apparently intended the trier of fact to determine the accuracy of the officer’s interpretation of the deaf person’s communications.

Appellant has not at any time alleged she was arrested and in custody for an alleged violation of a criminal law of the State of Arkansas when the statements at issue were made by her. Therefore, the trial judge was correct in ruling the statements were admissible.

Affirmed.


text:
    Mary Douglas ANDERSON v. Tiffany DOUGLAS and Arkansas Department of Human Services
    92-401
    839 S.W.2d 196
    Supreme Court of Arkansas
    Opinion delivered October 19, 1992

      Johnson, Sanders and Morgan, by: Roger L. Morgan, for appellant.

      Christopher Carter, for appellee Tiffany Douglas.

      John C. Wisner, III, Department of Human Services, for appellee.
   Robert L. Brown, Justice.

The appellant, Mary Douglas Anderson, is twenty years of age and the mother of a three-year-old daughter, appellee Tiffany Douglas. She appeals a chancery court order terminating her parental rights in her daughter and urges that the court’s findings were clearly erroneous. She also asserts that the operative statute, Ark. Code Ann. § 9-27-341 (1987), is vague on its face and violative of due process. Her arguments are without merit, and we affirm.

On May 14, 1990, ten-month-old Tiffany Douglas Anderson, was admitted to Baxter County Regional Hospital with severe bruises on her face and legs. The injuries apparently occurred while Tiffany was in the custody of her stepfather, John Bradley Anderson. Bradley Anderson subsequently pled guilty to physical abuse in September 1990 and was sentenced to prison. At the time, the appellant was in Baxter County Hospital due to complications with her pregnancy.

The appellee Arkansas Department of Human Services filed a petition in chancery court on May 15, 1990, for emergency custody of Tiffany. The petition stated that Tiffany was a dependant and neglected juvenile. An emergency custody order finding her dependent and neglected was subsequently entered that same month, and DHS gained temporary custody of Tiffany. She was then placed in foster care.

A hearing was held on June 12, 1990, which resulted in an adjudication consent order which, among other things, ordered Tiffany to continue in foster care for six months, after which time the court would review the case. DHS then prepared a case plan which outlined the following objectives Anderson needed to achieve to regain custody of her daughter: (1) become financially independent; (2) improve her emotional well-being and parenting skills; (3) obtain adequate housing; (4) have supervised weekly visitation with Tiffany at the DHS offices; and (5) eliminate contact between the stepfather and Tiffany. On September 18, 1990, the appellant read and signed the case plan. Two days later, Shirley Spitzer, a case worker for DHS, submitted a report stating that Tiffany had been placed in foster care and that the consent order had been complied with.

The chancery court reviewed the matter on October 30, 1990, and found that Anderson was complying with the case plan but that Tiffany’s return to the appellant was not in her best interests. A case report submitted four months later was substantially different. On February 19, 1991, Shirley Spitzer reported that the appellant had not complied with the case plan, and she outlined Anderson’s lack of progress since October 30, 1990. The appellant had discontinued counseling and parenting classes, was unemployed and living in Missouri, and had only seen Tiffany twice in the preceding two months. Spitzer recommended that Tiffany remain in the custody of DHS and that appellant continue counseling.

The following month, on March 25, 1991, the chancery court reviewed the case again and found that Anderson had not complied with the case plan; that efforts to rehabilitate and reunify the family had not been successful; that Anderson had discontinued counseling and parenting classes and had failed to visit Tiffany regularly; and that return of Tiffany to the appellant was not in Tiffany’s best interests. The court ordered Tiffany to remain with DHS and in foster care until June 3, 1991.

On May 31, 1991, DHS filed a petition to terminate Anderson’s parental rights. Anderson first agreed to the termination but later reneged prior to trial. The matter was tried on September 23, 1991, and the chancery court terminated Anderson’s parental rights in Tiffany, finding that there was clear and convincing evidence that the allegations in DHS’s petition were correct. It did so on the basis that Tiffany had not lived with Anderson for a year, that Anderson had not remedied her home environment, and that Anderson had willfully failed to provide significant material support or have meaningful contact with Tiffany. DHS was given the power to consent to an adoption.

On appeal, Anderson contends that the chancery court clearly erred in its findings and conclusions. She points to the' statute which provides that an order terminating parental rights must be based on a finding of clear and convincing evidence on one of several grounds, including:

(1) That a juvenile has been adjudicated by the court to be dependent-neglected and has continued out of the home for one (1) year and despite a meaningful effort by the Department of Human Services to rehabilitate the home and correct the conditions which caused removal, those conditions have not been remedied by the parent.
(2) The juvenile has lived outside the home of the parent for a period of one (1) year and the parent has willfully failed to provide significant material support in accordance with the parent’s means or to maintain meaningful contact with the juvenile. To find willful failure to maintain meaningful contact, it must be shown that the parent was not prevented from visiting or having contact with the juvenile by the juvenile’s custodian or any other person, taking into consideration the distance of the juvenile’s placement from the parent’s home. Material support consists of either financial contributions or food, shelter, clothing, or other necessities where such contribution has been requested by the juvenile’s custodian or ordered by a court of competent jurisdiction.

Ark. Code Ann. § 9-27-341 (b)(1) & (2) (Repl. 1991). The chancery court held that Anderson had violated both subsections of the statute.

The appellant is correct in asserting that when the burden of proving a disputed fact in chancery is by clear and convincing evidence, the question that we must answer on appeal is whether the chancery court’s finding that the disputed fact was proven by clear and convincing evidence is clearly erroneous. See Beeson v. Arkansas Dept. of Human Services, 37 Ark. App. 12, 823 S.W.2d 912 (1992); Ark. R. Civ. P. 52(a). Clear and convincing evidence is that degree of proof which will produce in the factfinder a firm conviction as to the allegation sought to be established. Cobbins v. State, 306 Ark. 447, 816 S.W.2d 161 (1991). In resolving the clearly erroneous question, we must give due regard to the opportunity of the trial court to judge the credibility of the witnesses. Ark. R. Civ. P. 52(a); see also Union Nat’l Bank v. Barnhart, 308 Ark. 190, 823 S.W.2d 878 (1992).

When the issue is one of terminating parental rights, we have referred to the “heavy burden” upon the party seeking to terminate the relationship. Bush v. Dietz, 284 Ark. 191, 680 S.W.2d 704 (1984); Harper v. Caskin, 265 Ark. 558, 580 S.W.2d 176 (1979).We elaborated on the reason for this in Bush v. Dietz:

Adoption proceedings are in derogation of the natural rights of parents, and statutes permitting such are to be construed in a light favoring continuation of the rights of natural parents.

284 Ark. at 195, 680 S.W.2d at 706; citing Harper v. Caskin, supra.

We turn to the statute, previously quoted, which outlines the critical factors in termination cases. Section 9-27-341 provides that termination results either 1) from a dependent-neglected child who has lived outside the home for a year and, despite the efforts of DHS to rehabilitate the home, the parent has not remedied it; or 2) from a dependent-neglected child who has lived outside the home for a year and where the parent has failed to provide significant material support for, or meaningful contact with, the child.

Here, DHS argues that it prepared a case plan which Anderson read and expressed no reservations about. She signed the plan in September 1990, but she failed to comply with it. Her visits with Tiffany were sporadic. In fact, for four months between November 1990 and March 1991, while she was living in Missouri, she did not visit Tiffany at all. Her visits briefly resumed but then, after May 21, 1991, they ceased altogether. The appellant’s response at trial was that she had no driver’s license and no transportation. DHS, however, rejoined that it had offered arrangements for meeting Tiffany at its offices. DHS further showed the court that Anderson was able to arrange transportation to visit Bradley Anderson five or six times at Tucker Penitentiary some five hours away, and that during part of this time, she was living with a man who had a truck.

The appellees also submitted evidence that the appellant was unable to keep a job for more than a brief period of time, that she had stopped counseling costing $5.00 a week, that she had failed to obtain her GED, and that she had failed to establish a permanent residence. In fact, she had moved eight or nine times within a relatively short period of time, after moving to Missouri. Of additional importance, according to DHS, was the fact that she did not attend a DHS staff meeting on June 25, 1991, though she knew the subject of the meeting was the petition to terminate her parental rights.

The appellant countered at trial that the case plan was mere boiler plate and that her economic circumstances liad forced her to move and seek better employment and that she simply could not afford counseling or support for Tiffany. She offered essentially her age, immaturity, financial circumstances, and inexperience as excuses for her treatment of Tiffany.

Our case law is clear that termination of parental rights is an extreme remedy and, as noted in Bush v. Dietz, supra, in derogation of the natural rights of the parents. Yet when the circumstances reveal a studied indifference to the child, termination must result. In this case the proof showed exactly that. We further emphasize the chancery court’s ability to assess the credibility of the witnesses at trial. That is essential in cases like this and undoubtedly played a part in the chancery court’s decision. We hold that the findings of fact of the chancery court were not clearly erroneous and that the decision to terminate the appellant’s parental rights is supported by clear and convincing evidence.

For her second point, Anderson contends that § 9-27-341 is vague and that her due process rights have been violated. We cannot find where the appellant raised this issue before the chancery court. Failure to raise the constitutional challenge below is fatal to our consideration at this level. We have held that even constitutional issues will not be considered when raised for the first time on appeal. Ussery v. State, 308 Ark. 67, 822 S.W.2d 848 (1992). We will, therefore, not consider the vagueness argument.

Affirmed.