author: George Rose Smith, Justice. P. A. Hollingsworth, Justice,

text:
    Charles MILAM, II v. MIDLAND CORPORATION and THEIS REALTY, INC.
    83-232
    665 S.W.2d 284
    Supreme Court of Arkansas
    Opinion delivered March 12, 1984

      The McMath Law Firm, by: Sandy S. McMath, for appellant.

      Anderson ¿r Kilpatrick, by: Overton S. Anderson, for appellees.
   George Rose Smith, Justice.

This is a suit by Charles Milam, II, for personal injuries sustained when his motorcycle was struck almost head-on by a car being driven by the principal defendant, Fred Borchert. The accident occurred on a curve in Mulberry Street, a residential street in Pine Bluff. The appellees, two real estate companies, were joined as defendants upon an allegation that they owned and managed the abutting land and had allowed visibility along the street to be obstructed by the growth of weeds next to the pavement. When it was found that the city was responsible for the weeds, the complaint was amended to assert that the real estate companies, in developing the subdivision, had made Mulberry Street too narrow and the curve in question too sharp. Recovery was sought on the theory that the defendants were strictly liable for having supplied a defective product and also were liable for their negligence in constructing a dangerous street.

These appellees filed a motion for summary judgment, which was submitted on various depositions. In appealing from a summary judgment for the appellees, the appellant argues the same theories asserted below: strict liability and negligence. Neither argument is supported by the law.

First, strict liability. Four years before this accident Mulberry Street was designed with the city’s approval, constructed and dedicated by the appellees, and accepted by the public authorities. Under our statute strict liability may be imposed upon “a supplier of a product” if the supplier “is engaged in the business of manufacturing, assembling, selling, leasing or otherwise distributing such product.” Ark. Stat. Ann. § 85-2-318.2 (Supp. 1983).

The appellant relies upon Blagg v. Fred Hunt Co., 272 Ark. 185, 612 S.W.2d 321 (1981), where we adhered to our view that the builder-vendor of a house impliedly warrants its habitability and went on to hold that he is also the supplier of a product and therefore strictly liable for a defective carpet in the house. The language of the statute, however, cannot conceivably be stretched to encompass a street as a product. The developer of a residential subdivision is obviously not engaged in the business of manufacturing, assembling, selling, leasing, or distributing streets.

Second, negligence. There are two fatal flaws in the appellant’s theory of common-law liability. In the first place, a highway contractor who constructs a street is not ordinarily liable after its acceptance by the public authorities. The appellant, however, relies upon an exception that is recognized when the construction is “imminently dangerous.” Reynolds v. Manley, 223 Ark. 314, 265 S.W.2d 714 (1954). “Imminent” is commonly defined as threatening to occur immediately, likely to happen at any moment. It cannot fairly be said that a four-year-old residential street, similar to thousands of others in Arkansas, is so imminently dangerous to the traveling public that its builder should be liable in a case like this one.

The other defect in the appellant’s argument is the absence of proximate cause. The pavement on Mulberry is 31 feet wide, nine feet more than the required minimum of 22 feet. A plaintiff’s expert witness thought it should be at least 35 feet wide, to include two 11-foot lanes and a parking lane. The sharpness of the curve is not explained, except that it did not conform to the city’s minimum 7,160-foot radii for curves.

At 8:30 a.m. Borchert was driving home on Mulberry, as he had done for months. He crossed the center line to get around a parked car and had not gotten back into his lane when the collision occurred. He “just didn’t see” Milam approaching on his motorcycle, which “barely caught the left front fender of my vehicle. ’’ Milam was on his side of the street, about ten feet from the curb. Borchert’s testimony is not disputed, as Milam’s version of the matter was not submitted.

Proximate cause is “a cause which, in a natural and continuous sequence, produces damage and without which the damage would not have occurred.” AMI Civil 2d, 501 (1974). The collision could, on the proof, have been avoided by either man if he had been attentive. The collision cannot reasonably be said to have followed in a natural and continuous sequence from the construction of the street four years earlier. Moreover, a proximate cause is one without which the damage would not otherwise have occurred. Since Milam’s motorcycle barely caught the fender of the oncoming car when he had ten feet of clearance to his right, it would be pure speculation for a jury to say the accident would not have happened had the street been four feet wider. Such collisions occur daily on streets that are straight and wide.

Affirmed.

Purtle and Hollingsworth, JJ., dissent.

P. A. Hollingsworth, Justice,

dissenting. I disagree with the majority on the negligence issue in this case.

Mulberry Street was built by Midland and dedicated to the public on November 14,1977. The subdivision in which the street was located was incorporated into the city of Pine Bluff on January 11, 1979. Prior to the incorporation, the Pine Bluff City Council had adopted recommendations that the pavement width of two-lane collector streets, such as Mulberry, be forty-eight feet and that the minimum curve radii of such streets be 7160 feet. Other city ordinances required clearing and grading of street rights-of-way. It is undisputed that Mulberry Street is thirty-one feet wide, and the radius of the curve is substantially less than the standard adopted by the city council.

The appellant asserts that the trial court erred in granting summary judgment on the issue of negligence. I agree. To prove negligence, the injured party must prove a negligent act; that the act was the proximate cause of the plaintiff’s damages; and that the damages were foreseeable. St. Mary’s Hospital, Inc. v. Bynum, 246 Ark. 691, 573 S.W.2d 914 (1978). The appellees argue that they owed no legal duty to the appellant and that without a duty, there can be no negligent act. The appellees also argue that Midland could be viewed as a contractor in relation to the city and that the general rule in Arkansas provides that upon acceptance by a proprietor of its contractor’s work, the liability of the contractor as to third persons ceases. Southwestern Bell Co. v. Travelers Indemnity Co., 252 Ark. 400, 479 S.W.2d 232 (1972). There are, however, exceptions to this general rule under which a contractor may be held liable after acceptance and approval of the completed job. One of the exceptions “is where the job is ‘turned over by the contractor in a manner so negligently defective as to be imminently dangerous to third persons’.” Reynolds v. Manley, 223 Ark. 314, 265 S.W.2d 714 (1954). Reynolds involved a suit against a contractor for negligently, constructing a road! In holding that the condition was not so imminently dangerous as to subject the contractor to liability, the court pointed out that there was no contention that the hole in the road existed when the job was completed and that the State selected and approved all materials used. These facts make Reynolds distinguishable from the case at bar, in that here the contention is that the road was defective at the time the job was completed. The defect concerns the dimensions of the road, and since the city did not supervise the project, there can be no claim that the city controlled the manner and specifications for construction. Therefore, I would find that the question of negligence should not have been resolved upon a motion for summary judgment. I would remand to the trial court to allow the parties to develop fully the questions of causation and defective conditions on the iosue of negligence.

Purtle, J., joins in this dissent.


source: Caselaw Access Project

author: George Rose Smith, Justice. Darrell Hickman, Justice,

license: Public Domain

text:
    John F. WELLS et al v. Bill CLINTON, Governor et al
    83-259
    666 S.W.2d 684
    Supreme Court of Arkansas
    Opinion delivered March 12, 1984
    [Rehearing denied April 30, 1984.]

      James F. Lane, for appellants.

      Steve Clark, Atty. Gen., by: R. B. Friedlander and Randel Miller, for appellees.
   George Rose Smith, Justice.

This is a taxpayers’ suit against the Governor and other State officers for a declaratory j udgment declaring the Public Facilities Finance Act of 1983 to be unconstitutional as an unlawful delegation of legislative authority. Act 458 of 1983; Ark. Stat. Ann., Title 13, Ch. 26 (Supp. 1983). Essentially the plaintiffs contend that the legislature cannot authorize the construction of any public building without specifically describing the building and specifying exactly where it is to be built. We consider that point of view to be too narrow a restriction upon the General Assembly’s discretion and hold the statute to be valid.

Preliminarily, common sense and ordinary experience tell us that the legislature cannot suddenly command the construction of a particular building without much study and planning on someone’s part. The need of a given state agency for a new building must first be determined. Someone must select, and underwrite the cost of, architects, who in turn must consult with the agency and eventually prepare plans to meet its requirements. Estimates of construction costs must be made, limited by the availability of funds for the project. After months or years of preparation, involving substantial expense, a site is finally selected, contracts are let, and construction begins.

The members of the General Assembly are aware of all these facts and have adopted general laws to meet the situation. In 1975 the legislature created a central agency, the State Building Services, to be responsible for the state’s various capital improvements. Act 716 of 1975; Ark. Stat. Ann., Title 5, Ch. 10 (Repl. 1976). The eleven-member Building Services Council is charged with the duty of obtaining information from the various state agencies about their projected needs for space and facilities and of attending to all the administrative details that we have mentioned in broad outline. Section 5-1020. The Council is directed to make monthly reports to the Legislative Council and to the Governor. Section 5-1020 (d) (xiii).

It was with the foregoing background that the General Assembly adopted Act 458 of 1983, now challenged by the appellant taxpayers. The statute authorizes the Building Services to expend not more than $25,000,000 for the construction and maintenance of capital improvements for the Department of Correction’s prison agriculture and industry programs and for the state-supported institutions of higher education. Section 13-2604. The General Assembly finds that the proposed construction is essential to the well-being of the State, Section 13-2614, and directs the Council to employ architects and let the necessary contracts. Section 13-2616. Legislative control is retained by requiring Building Services to prepare a plan for all the proposed construction work and keep the Legislative Council, the Governor, and the Chief Fiscal Officer informed of progress. Section 13-2618.

We have no hesitancy in holding that no unlawful delegation of legislative power has been shown. The presumption of constitutionality given to all statutes requires us to assume that the legislature determined that the proposed construction is needed and can be accomplished with the funds provided. The appellants argue that the members of the General Assembly must themselves decide and specify in the statute “what will be built, where it will be built and what it will cost.” One might as well, we think, insist that in a parallel situation the members of Congress must describe and specify, for example, the thousands of new postoffices that are built every year. The administrative determination of such facts may properly be delegated to a subordinate agency. Merritt v. No Fence Dist. No. 2, 205 Ark. 1129, 172 S.W.2d 684 (1943).

The appellants’ second and third points may be disposed of quickly. Act 458 was not improperly passed merely because the Senate concurred by voice vote in the House’s amendments, for the ayes and nays need not be recorded when one branch concurs in amendments by the other branch. Ewing v. McGehee, 169 Ark. 448, 275 S.W. 766 (1925). Nor was the companion appropriation act, Act 895 of 1983, impermissibly vague in appropriating funds for “Major Maintenance,” without further definition. Almost every appropriation act for a state agency’s annual budget includes an item for maintenance, which obviously cannot be specified in detail in advance. Finally, the appellants invite the court to state that it will prospectively reconsider the state’s use of certificates of indebtedness to finance state projects, but since the issue is not presented by this case there is no occasion for us to speculate about what might be done if such a question arises.

Affirmed.

Hickman and Purtle, JJ., concur.

Darrell Hickman, Justice,

concurring. The appellants do not raise the most obvious question. That is, can the legislature, through its own bonding agency, the Arkansas State Building Services, without voter approval, issue twenty-five million dollars in bonds and place the state in debt by pledging future state revenues? Avoiding the provisions of Amendment 20 to the Arkansas Constitution has been a favorite practice of the legislature and executive branches of the government, and we have eagerly approved the practice. Amendment 20 reads:

Except for the purpose of refunding the existing outstanding indebtedness of the State and for assuming and refunding valid outstanding road improvement district bonds, the State of Arkansas shall issue no bonds or other evidence of indebtedness pledging the faith and credit of the State or any of its revenues for any purpose whatsoever, except by and with the consent of the majority of the qualified electors of the State voting on the question at a general election or at a special election called for that purpose. (Italics supplied.)

That language is fairly plain. Arkansas may not make any debts through bonds without voter approval (the so-called certificates of indebtedness in this case are nothing but “revenue” bonds). However, Amendment 20 has regularly been avoided with our approval. Holmes v. Cheney, 234 Ark. 503, 352 S.W.2d 943 (1962); Miles v. Gordon, 234 Ark. 525, 353 S.W.2d 157 (1962); McArthur v. Smallwood, 225 Ark. 328, 281 S.W.2d 428 (1955); State, ex rel Attorney General v. State Board of Education, 195 Ark. 222, 112 S.W.2d 18 (1937).

In Purvis v. Hubbell, 273 Ark. 330, 620 S.W.2d 282 (1982), the majority issued this warning:

After carefully considering our previous decisions, it appears there has been a gradual expansion of the concept of revenue producing bonds, which require no popular approval, as was authorized for instance in Snodgrass v. Pocahontas, 189 Ark. 819, 75 S.W.2d 223 (1934). However, a change should not be made retroactively, after public agencies and investors have relied on our decisions; but in other instances we have given notice that an interpretation of the Constitution may or will be changed. Clubb v. State, 230 Ark. 688, 326 S.W.2d 816 (1959); Hare v. General Contract Purchase Corp., 220 Ark. 601, 249 S.W.2d 973 (1952). Accordingly, we give notice of our intention to prospectively reconsider our cases at the next opportunity after the present opinion becomes final.

We will have to await another case to see if the majority seriously intends to limit what has become an arrogant disregard of the constitution. Until then, the legality of “certificates of indebtedness” remains questionable. Arkansas’s reputation for fiscal integrity is only part truth. The other part is fiction and that part is growing.

Purtle, J., joins in this concurrence.


author: George Rose Smith, Justice.

text:
    MFA MUTUAL INSURANCE COMPANY v. Patricia M. VAN DRIESUM, Personal Representative
    83-295
    665 S.W.2d 286
    Supreme Court of Arkansas
    Opinion delivered March 12, 1984

      Matthews & Sanders, by: Roy Gene Sanders, for appellant.

      Thompson, Paddock & Llewellyn, P.A., by: William P. Thompson, for appellee.
   George Rose Smith, Justice.

Arkansas’s no-fault insurance law requires automobile liability policies to include a $5,000 accidental death benefit for the insured and for passengers in an insured car, unless the applicant for the insurance rejects that coverage. Act 138 of 1973; Ark. Stat. Ann. §§ 66-4014 to -4021 (Repl. 1980). The question in this case is whether the estate of an insured passenger who was killed while riding in an insured car may recover the $5,000 death benefit not only from the decedent’s own insurer but also from the driver’s insurer. The trial judge, relying upon our decision in O’Bar v. MFA Mutual Ins. Co., 275 Ark. 247, 628 S.W.2d 561 (1982), held on undisputed facts that double recovery is permissible. Our jurisdiction of the appeal is under Rule 29 (1) (c).

The appellee’s decedent, Robert M. McGill, was riding as a passenger in Jimmie Jess Anthony’s car when McGill was killed. Anthony had no-fault coverage in an automobile liability policy issued by the appellant, MFA Mutual, and McGill had similar coverage in a policy issued to him by State Farm Insurance Company. State Farm paid $5,000 on the policy it had issued to McGill, but MFA Mutual refused to make a similar payment to McGill’s personal representative, who brought this action against MFA Mutual for $5,000, plus penalty and attorney’s fee.

In the O’Bar case only one policy was involved, O’Bar’s own policy. It provided that his accidental-death coverage would be reduced by any workman’s compensation benefits payable on account of O’Bar’s death. Those benefits exceeded $5,000. The insurer contended that it therefore had no liability, but we rejected that argument, saying:

There is no convincing reason that [the $5,000 accidental-death] benefit should be reduced simply because an insured also received workers’ compensation and since the General Assembly made no such provision, we hold such a clause to be in violation of public policy.

Here, however, MFA Mutual’s policy, unlike the one in O’Bar, provided not that its coverage would be reduced but that its coverage would be excess insurance if the insured had other like insurance and would apply only to the extent that the other insurance was less than $5,000. MFA Mutual accordingly argues that its policy provision is not against public policy, because McGill’s own State Farm policy had paid the full amount contemplated by the no-fault law.

The insurer’s argument must be sustained. The O’Bar opinion, as we quoted above, held that the worker’s compensation benefits could not operate in reduction of the policy’s coverage “since the General Assembly made no such provision.” Here, by contrast, Section S of the no-fault statute expressly prohibits double recovery by a passenger’s estate by providing that the insurance upon occupants of an insured vehicle “shall not be applicable, or payable, if the prescribed minimum coverages are afforded to said occupants . . . either as a named insured or additional insured under another valid and collectible automobile insurance policy.” Section 66-4016. That is the precise situation here. This provision of the statute was evidently not brought to the trial court’s attention, for it is not cited in either brief in this court, but obviously we cannot hold that a policy provision is against public policy when the statute itself embodies the identical prohibition against double recovery.

Reversed and dismissed.


author: Darrell Hickman, Justice.

text:
    A. O. SMITH HARVESTORE PRODUCTS, INC. v. Thomas BURNSIDE
    83-282
    665 SW.2d 288
    Supreme Court of Arkansas
    Opinion delivered March 12, 1984

      Meadows ir Davis, by: Steven B. Davis, for appellant.

      Pickens, Boyce, McLarty ér Watson, by: James A. McLarty, for appellee.
   Darrell Hickman, Justice.

Thomas Burnside, a dairyman, obtained a default judgment for $178,000 against the appellant, A. O. Smith Harvestore Products, Inc., a non-resident corporation not authorized to do business in Arkansas. We set the judgment aside because of no proper service and for that reason need not discuss the other issues raised.

Both parties rely on the service statute, Ark. Stat. Ann. § 27-340, but it was replaced by the Uniform Interstate and International Procedure Act, §§ 27-2501—2507 (Repl. 1979), which in turn, at least in part, is identical to ARCP Rule 4 (e). See Marchant v. Peeples, 274 Ark. 233, 623 S.W.2d 523 (1981). Under either statutory provision, appellant was not properly served because the attempt to use the Secretary of State resulted in the notice being returned.

The appellant argues that actual notice was given when an agent of the appellant met with the attorney for the appellee, in Arkansas, was handed a copy of the complaint, and acknowledged in writing later that the appellant was given twenty additional days to file an answer. In that letter the agent stated that he did not believe that notice had been properly served on the appellant, and this removed any question that might remain of actual notice or of the appellant waiving the strict requirement of proper service. We do not favor default judgment and look with disfavor on substituting actual notice for proper notice. See Tucker v. Johnson, 275 Ark. 61, 628 S.W.2d 281 (1982); Edmonson v. Farris, 263 Ark. 505, 565 S.W.2d 617 (1978). Therefore, the judgment is reversed and the cause remanded.


author: Robert H. Dudley, Justice. Darrell Hickman, Justice,

text:
    EMPLOYERS EQUITABLE LIFE INSURANCE COMPANY v. J. C. WILLIAMS
    83-280
    665 S.W.2d 873
    Supreme Court of Arkansas
    Opinion delivered March 12, 1984
    [Rehearing denied April 9, 1984.]

      Davidson, Horne, Hollingsworth, Arnold ¿r Grobmyer, A Professional Association, for appellant.

      Morgan E. Welch, for appellee.

      Hickman, J., would grant rehearing.

   Robert H. Dudley, Justice.

This appeal involves the first party tort of bad faith committed by an insurance company against its insured. The jury found that the appellant, Employers Equitable Life Insurance Company, breached its contract by failing to pay benefits to appellee, J. C. Williams, in the amount of $2,050.00. The jury also found that appellant committed the first party tort of bad faith by declaring appellee’s health and accident policy had lapsed and could not be reinstated. The jury awarded $25,000 for compensatory damages and $75,000 for punitive damages. The two points of appeal address only the tort cause of action. We affirm. Jurisdiction is in this Court under Rules 29 (l)(c) and 29(l)(o).

Appellant’s first point of appeal is that the tort of bad faith against an insurance company has been pre-empted by the statute allowing penalty, interest, and attorney’s fees, Ark. Stat. Ann. § 66-3238 (Repl. 1980), and by the comprehensive statutory scheme for regulation of the insurance business, Ark. Stat. Ann. Title 66, Chapter 30 (Repl. 1980). We have rejected this express argument. Aetna Casualty and Surety Company v. Broadway Arms Corporation, 281 Ark. 128, 664 S.W.2d 463 (1984). We decline to overrule Aetna.

An insurance company may incur liability for the first party tort of bad faith when it affirmatively engages in dishonest, malicious, or oppressive conduct in order to avoid a just obligation to its insured. Aetna Casualty and Surety Company v. Broadway Arms Corporation, supra. The third party tort of bad faith is the negligent failure of an insurer to settle a third party claim within the policy limits. See Members Mutual Ins. Co. v. Blissett, 254 Ark. 211, 492 S.W.2d 429 (1973); Findley v. Time Ins. Co., 264 Ark. 647, 573 S.W.2d 908 (1978); and M.B.M. Co., Inc. v. Counce, 268 Ark. 269, 596 S.W.2d 681 (1980). The cause of action on appeal in this case is for the intentional tort of altering insurance records so that it appeared that the insurance policy on a bad risk had lapsed when, in truth, it had not. Compensatory damages for bad faith in an occasional lawsuit would not deter the wrongdoing insurance company, or others, from seeking a wrongful gain by similarly victimizing hundreds of other policyholders. Punitive damages will have a deterrent effect in a case of this type. See Ray Dodge, Inc. v. Moore, 251 Ark. 1036, 479 S.W.2d 518 (1972). The proof in this case overwhelmingly justifies the exaction of punitive damages.

Appellant, an insurance company, generated much of its business by mail. In 1980, it mailed appellee two fliers advertising its health and accident policy as well as its prompt claim service. On July 1,1980, appellee purchased a policy for a one month term, renewable monthly, with a thirty-one day grace period. The policy provided that if the premium was late, the acceptance of the late premium without a request for reapplication would result in a reinstatement of the policy, but the insurer could issue a conditional receipt and the insured could submit a reapplication for approval or rejection by the company within 45 days. If not rejected within that 45 day period the policy would be automatically reinstated.

The appellee paid the monthly premiums and on November 1, 1981, suffered a heart attack. On December 19, 1981, the appellee signed his claim for $1,708.22 in benefits. The appellant admits receiving the claim on December 30, 1981. On February 11, 1982, appellee called appellant to ask why he had not been paid. He was told it was being processed. He called again on February 12 and a third time on February 22. Both times he was again told his claim was being processed. On February 17 appellant wrote a letter to appellee stating that his claim was in the final steps of processing.

While appellee’s claim was lying on the desk of appellant’s claims underwriter the Arkansas Insurance Department began a market conduct survey of appellant for the months of February and March, 1982. The investigators discovered that appellant was not paying claims when they were calculated and due but was paying them only when the cash flow of the company would allow. The average time for paying calculated claims was 52.87 days. The investigators found that the company used a rubber stamp to show the date claims were received but that dates on the stamp were changed to correspond with dates desired by appellant and, in addition, liquid paper was used for alterations on forms. One investigator testified that as he physically took control of a large stack of claim files the company secretary tried to destroy a note from the president of appellant which read: “work this one to death. Best regards, p.s. throw this note away now.” Another claim form had a note: “wait 90 days, may lapse.” The Insurance Department found such voluminous violations of the insurance code that it took 68 paragraphs of a consent order to state them. Ultimately the appellant was fined $50,500.00, the largest insurance penalty in the history of the State. In addition, appellant’s license to operate was twice suspended. A claims underwriter for appellant testified that the president of appellant offered her a bonus if she would deny claims and that he also instructed her to refuse to pay claims in the hope that the policies would lapse.

Appellant’s underwriter admitted that people who had suffered a heart attack, like appellee, were not acceptable insurance risks because they were more likely to have another heart attack. In fact, appellee had his second attack on May 21, 1982. The appellee testified that on March 22 he finally received his benefit check along with a form from the secretary of appellant which stated: “Due to the fact that we did not receive your premiuim payment until after your 31-day grace period expired, it will be necessary for you to sign and return the enclosed form to me for our files, in order that we may continue your coverage.” Appellee signed the form and returned it to appellant. Then, on May 7, 1982, appellant wrote to appellee “Enclosed please find your check number 4269 in the amount of $52.00 and your check number 4273 in the amount of $52.00. Your application for reinstatement of the above listed policy has been declined by the underwriting department.”

At trial, the appellant claimed appellee’s insurance policy was cancelled because the February 1 premium was not paid until March 15. Appellant produced a record of monthly receipts in which payments were entered by hand. It shows no premium payments for February and March. Appellant’s claims worksheet, also maintained by hand, reflects that the policy lapsed February 1. However, the computer cards, maintained by appellant, reflect payment of the February 1 premium and reflect payment of the March 1 premium on March 15. The March 1 computer card is altered to change the “3” month to the “2” month. An employee of appellant admitted altering the payment card to “correct” it. She stated that the policy was paid only to February 1 and that is the reason she changed the “3” month to “2”.

The appellee testified that he made his payments within the grace period. His check #4269 is dated February 15,1982, and was returned by appellant on May 7. Appellee produced his next serial check #4270, dated February 25, 1982, and it reflects it went through the clearing house on February 28. His check numbered 4271 is dated March 5, 1982, and went through the clearing house on March 8, 1982. His check #4272 is dated March 10, 1982, and stamped by the clearing house the same date. His next check, #4273, is to appellant and is dated March 11, 1982. Appellee’s checks, in conjunction with his testimony, amount to substantial evidence from which the jury could have found that he paid the monthly premiums even while the appellant wrongfully refused to pay the benefits it owed appellee.

In answering an interrogatory, the jury found that appellant acted in bad faith by declaring that the policy had lapsed and could not be reinstated. There was substantial evidence from which the jury could have found that, after the first heart attack, appellee was no longer an acceptable risk and, consequently, appellant did not want his policy to remain in force. There was substantial evidence from which the jury could have found that, with malevolence, appellant altered the computer card in order to falsely show that the policy had lapsed. There was substantial evidence from which the jury could have believed that the form mailed by the secretary of the company which asked appellee to acknowledge that he did not make a payment was deliberately misleading, especially while, during the entire period, appellant was holding money which belonged to appellee. It is undisputed that appellee then suffered a second heart attack and suffered the anxiety of not knowing whether he had insurance with appellant. The proof is sufficient to support the award of compensatory damages and is sufficient to authorize punitive damages for their deterrent effect.

Affirmed.

Hickman, J., dissents.

Darrell Hickman, Justice,

dissenting. Unembellished, this is a breach of contract action by an insured against his insurance company. However, since the majority has recognized a new cause of action, the so-called tort of bad faith, the nature of the suit is changed significantly because a different remedy is available: the company is liable for punitive damages in the amount of $75,000 and for compensatory damages in the amount of $25,000. This is in addition to a recovery allowed by statute for the amount of the claim, $2,050, 12% penalty on that amount and an attorney’s fee of $2,500. Ark. Stat. Ann. § 66-3238 (Repl. 1980).

So, we now have in Arkansas double recovery for breach of contract; one pursuant to statute, with appropriate penalties for failure to pay claims, for whatever reason; and another in the majority’s new remedy for bad faith. I must maintain the view I took in Aetna Casualty and Surety Company v. Broadway Arms Corp., 281 Ark. 128, 664 S.W.2d 463 (1984). The conduct of the insurance company must be outrageous as we defined that term in Givens v. Hixson, 275 Ark. 370, 631 S.W.2d 263 (1982):

Liability has been found only where the conduct has been so outrageous in character, and so extreme in degree, as to go beyond all possible bounds of decency, and to be regarded as atrocious, and utterly intolerable in a civilized community.

The posture taken by the majority in Aetna and in this case is a surprise and, in my judgment, not sound. In Robinson v. M.F.A. Mut. Ins. Co., 269 F.2d 492 (8th Cir. 1980), the court addressed the question:

Unlike nearly all states now recognizing the bad faith tort cause of action, Arkansas by statute imposes penalties on insurance companies wrongfully refusing to pay valid claims. Ark. Stat. Ann. § 66-3238 (Repl. 1980). Our research indicates that no state which has a statutorily prescribed penalty (approximately 14 states total) as Arkansas, has also permitted the bad faith tort by judicial fiat. . . . Apparently, the view is slowly spreading that states will have either the bad faith tort or the statutory penalty, but not both.

The reason or motive of the company in breaching the contract is irrelevant. McClellan v. Brown, 276 Ark. 28, 632 S.W.2d 406 (1982).

The majority is trying to regulate the insurance industry through the use of punitive damages. Regulation is best left to the legislature and there is ample legislation in that field. Ark. Stat. Ann. §§ 66-3002—66-3014 (Repl. 1980). In fact, this company was punished for its bad practices under that law, none of which related to the claim of the appellee. Yet all of this inflammatory evidence was before the jury. It is no surprise that the jury awarded punitive damages. Instead of regulating the industry, the majority is simply intimidating an industry and increasing attorneys’ fees.

I would reverse the judgment in excess of the statutory claim.


author: Robert H. Dudley, Justice.

text:
    Carol HILL et al v. CGR MEDICAL CORPORATION et al
    83-286
    665 S.W.2d 274
    Supreme Court of Arkansas
    Opinion delivered March 12, 1984

      Phillip H. McMath, for appellant.

      Steve Clark, Atty. Gen., by: David S. Mitchell, Dep. Atty. Gen., for appellee.
   Robert H. Dudley, Justice.

The Workers’ Compensation Commission held that Carol Hill and her four children, the widow and dependents of Jerry Thomas Hill, deceased, could not draw future weekly benefits from the Death and Permanent Total Disability Bank Fund. The Court of Appeals reversed. Hill v. CGR Medical Corporation, 9 Ark. App. 334, 660 S.W.2d 171. We granted certiorari. We affirm the Court of Appeals’ reversal and remand to the Workers’ Compensation Commission.

Jerry Thomas Hill suffered severe liver damage while in the employ of CGR Medical Corporation. The employer and its workers’ compensation carrier, Liberty Mutual Insurance Company, promptly accepted liability and paid all medical expenses and disability benefits due him until his death over a year later. After his death, Liberty Mutual continued paying weekly death benefits to the widow and dependents. The widow and children then filed a tort suit against a third party tortfeasor, Amco Chemical Corporation. Liberty Mutual joined in the tort suit and asserted its right to participate in any recovery to the extent of two-thirds of the net recovery. See Ark. Stat. Ann. § 81-1340 (Supp. 1976). The tort claim was settled for a little over $125,000.00 and the net recovery was $69,000.00. At that time Liberty Mutual had paid over $115,000.00 in medical expenses and $16,000.00 in weekly death benefits and was entitled to receive, as subrogee, $46,194.38 from the settlement. However, as part of the settlement Liberty Mutual agreed to waive its subrogation rights to the $46,194.38 in consideration of being absolved of having to pay future benefits to the widow and dependents.

In the order of distribution approved by the Administrative Law Judge it was stipulated that the children’s share of the settlement would be invested on behalf of the widow so that she would have an annual income for both herself and the four children in excess of the death benefits due from Liberty Mutual. In that same order the Administrative Law Judge noted that the widow took the position that “once this credit is granted to Liberty Mutual, as Workers’ Compensation carrier, for the balance owed on the $50,000.00 limitation, the widow and children would be able to draw future benefits from the Death and Permanent Total Disability Bank Fund.”

Ark. Stat. Ann. § 81-1310 (c) (1) (Repl. 1976) provides that the limitation period of 450 weeks and total compensation prescribed for disability shall not apply in cases of death. At the time this claim arose Ark. Stat. Ann. § 81-1310 (c) (2) (Repl. 1976) provided:

The first Fifty Thousand Dollars ($50,000) of weekly benefits for death or permanent total disability shall be paid by the employer or his insurance carrier in the manner provided in this Act. An employee or dependent of an employee who receives a total of Fifty Thousand Dollars ($50,000) in weekly benefits shall be eligible to continue to draw benefits at the rates prescribed in this Act but all such benefits in excess of Fifty Thousand Dollars ($50,000) shall be payable from the Death and Permanent Total Disability Bank Fund.

The issue, as precisely stated by the Court of Appeals, is “does the liability of the death and permanent Total Disability Bank Fund to continue payment of weekly benefits arise where the initial $50,000.00 obligation of the carrier had been discharged in part by payment of weekly benefits and the balance by waiving its right as subrogee to participate in a recovery from a third-party tortfeasor in consideration for not being required to pay future weekly benefits to the widow and dependents of a deceased worker.

We affirm the Court of Appeals and hold that the Bank Fund will become liable on the date the carrier’s $50,000.00 limitation would have been discharged had there been no settlement.

The basis of the holding is that Liberty Mutual gave up its right to the subrogation funds as a credit against future payments of compensation. The Workers’ Compensation Act provides for credits which may be given to an employer or carrier. Ark. Stat. Ann. § 81-1319 (m) (Repl. 1976) provides: “Credit for compensation of wages paid. — If the employer has made advance payments of compensation he shall be entitled to be reimbursed out of any unpaid installment or installments of compensation due.”

Under the order of distribution the net settlement is invested so that the widow will have an annual income for both herself and the four children in excess of the benefits she would receive under the Workers’ Compensation Act. Ark. Stat. Ann. § 81-1310 (c) (2) provides that the liability of the Bank Fund arises only after the first $50,000.00 of weekly benefits has been paid by the carrier and received by the dependents in the manner provided by the act. This prevents acceleration of the date of liability for the Bank Fund because the credit for payments of compensation in advance can only be allowed in the weekly amounts as they fall due.

Appellee Bank Fund contends that each dependent must draw $50,000.00 in weekly funds before becoming eligible to draw from the Bank Fund. We do not construe the statute in that manner. The applicable statute, Ark. Stat. Ann. § 81-1310 (c) (2), quoted above, provides that the first $50,000.00 of benefits shall be paid by the employer or his insurance carrier and that all benefits in excess of $50,000.00 shall be payable from the Bank Fund. The language and intent of the statute are apparent. Had the General Assembly intended that each dependent must draw $50,000.00 in weekly funds before becoming eligible to draw from the Bank Fund the act would have so stated and would not have provided that the employer or its carrier pay the first $50,000.00 and would not have provided that all benefits in excess of $50,000.00 are payable from the bank fund.

Affirmed.


author: Steele Hays, Justice.

text:
    Kermit TUCK v. ARKANSAS STATE POLICE COMMISSION et al
    83-252
    665 S.W.2d 276
    Supreme Court of Arkansas
    Opinion delivered March 12, 1984

      Robert A. Newcomb, for appellant.

      Steve Clark, Atty. Gen., by: James W. Cullum, Asst. Atty. Gen., for appellee.
   Steele Hays, Justice.

Kermit Tuck, an Arkansas State Policeman, was charged with violations of department policy by receiving compensation from the submission of a false invoice, installing unauthorized equipment on his patrol car and abusing his position by asking troopers under his command to “fix” tickets. As a result of these charges, the Acting Director demoted Tuck from the rank of Sergeant to trooper, and transferred him from Pine Bluff to Brinkley. Tuck sought review from the Arkansas State Police Commission which found the evidence supporting the charges sufficient. The Commission disapproved the disciplinary action taken by the Director and recommended instead that Tuck be dismissed from employment. Tuck then attempted to appeal to the Pulaski Circuit Court which held that it lacked jurisdiction because of inadequacies in prerequisite administrative procedures. The Director again considered the facts of the case, and a peer review committee’s recommendation to demote and transfer, the Commission’s original recommendation and made a decision to terminate Tuck. A second hearing was held before the Commission which voted to affirm its previous recommendation and to approve the Director’s action to dismiss. Tuck appealed to the Circuit Court which found there was substantial evidence to support the finding of the Commission and that the recommendations of termination and subsequent approval of termination by the Director were within its authority. Tuck argues on appeal that 1) the Commission exceeded its authority by “directing” that he be dismissed and that 2) if we do find the Commission acted within its authority, we nevertheless reduce the punishment as being too severe. Neither argument is sustained.

Appellant relies primarily on Ark. Stat. Ann. § 42-403.2 which provides:

.... The Arkansas State Police Commission is hereby directed to hear appeals and approve, or disapprove, any disciplinary action taken against an employee by the Director that results in transfer or loss of rank, pay or seniority.

Appellant argues that the statute limits the Commission’s authority to approve or disapprove the Director’s actions, and that in this case the Commission “ordered” the Director to change the punishment from demotion and transfer, to dismissal. Appellant contends this action was in excess of the authority granted by the legislature, and the Commission has no power to order an increase in punishment.

The appellant’s argument fails for two reasons. First, there was no “order” by the Commission to the Director to terminate Tuck. The Commission acted within the bounds of its statutory authority and disapproved the Director’s disciplinary actions and then made only a recommendation for termination. The Director, after further proceedings and consideration, made a decision to follow the recommendation of the Commission. He might have chosen to punish Tuck more severely, for example, by suspending him for a certain period of time, in addition to the demotion and transfer; however, his decision was to terminate. The Commission’s action did not leave the Director with no alternative but termination, and that question' is not before us. Additionally, while the Commission’s actions on review may effectively enhance a punishment ordered by the Director (as the trial court found occurred in this case) such action is within the bounds of the statutory authority on facts such as these. Inherent in the authority to disapprove disciplinary action is the obvious effect of enhancing or diminishing the action taken by the Director. Such is the purpose of the Commission’s authority.

The court specifically held in this case that the Commission by “. . . recommending termination of employment, effectively enhanced the disciplinary action taken against the petitioner ...” However, the appellant does not really address the issue of authority to recommend, rather his argument rests on the premise that the Commission ordered or directed the punishment received and implicit in that argument, the idea that there was no discretion left to the Director, and as we stated earlier, we are not dealing with that situation here. As to the court’s finding on the recommendation, we must read that within the context of the case. A recommendation is the method by which the Commission can communicate the reason for its action, and has no force of its own. Any force such recommendation carries is supplied solely from the fact that a recommendation is used in conjunction with the Commission’s statutorily designated power of approval or disapproval of disciplinary action, and here, the Commission exercised its authority within those limits.

We find no merit in the appellant’s request for a reduction in his punishment. Although appellant does not concede any wrongdoing, there was no dispute among the fact finders that the evidence substantiated the charges-offenses akin to criminal conduct by one charged with the duty of enforcing the law. As did the trial court, we find no reason to disturb the decision of the Commission as to the appropriate punishment to impose in this case, for violations of departmental rules.


author: P. A. Hollingsworth, Justice. Robert H. Dudley, Justice, P. A. Hollingsworth, Justice.

text:
    Charles D. RAGLAND, Commissioner of Revenues, Department of Finance and Administration, State of Arkansas v. William V. FORSYTHE
    83-261
    666 S.W.2d 680
    Supreme Court of Arkansas
    Opinion delivered March 12, 1984
    [Supplemental Opinion on Denial of Rehearing April 30, 1984.]

      Joe Morphew, for appellant.

      Friday, Eldredge & Clark, by: James M. Saxton, for appellee.

      Smith, Dudley and Hays, JJ., would grant rehearing.

   P. A. Hollingsworth, Justice.

The appellee, William V. Forsythe, a Tennessee resident, was denied a music machine operator’s permit because he did not meet the residency requirements of Ark. Stat.. Ann. § 84-2634 (b) (Repl. 1980). He filed suit against the Department of Finance & Administration claiming that the statute was unconstitutional as applied to nonresidents. The trial court found that the statutory requirement of a one year Arkansas residency is unconstitutional. On appeal we affirm.

Ark. Stat. Ann. § 84-2633 (Repl. 1980) provides that:

The business of owning, operating or leasing coin operated amusement devices ... is hereby declared to be a privilege, and it is further declared that the owners, operators and lessor of such machines shall pay a fee for such a privilege . . .
(a) “Amusement devices” means any machine, device or apparatus which provides amusement, diversion or entertainment which is coin operated and includes ... [m]usic vending phonographs, jukeboxes, and other similar musical devices for entertainment. . .
Section 84-2634 provides:
No license as required in Section 1 [§ 84-2633] above shall be issued unless:
(a) The applicant is above the age of twenty-one (21) years.
(b) The applicant is a resident of the State of Arkansas and has been such for at least one (1) year prior to the date of his application.
(c) At least one-half (1/2) of any partnership or corporation applicant is owned by a resident of Arkansas who has been such for at least one (1) year prior to application.

The parties stipulated to the fact that the sole basis upon which the Department of Finance & Administration denied the requested permit was the plaintiff’s failure to meet the necessary residency requirements. The plaintiff has complied in full with all other requirements necessary in order to receive a Music Machine Operator’s Permit.

The circuit court found that the sole purpose of the Slot and Vending Machines Act (Ark. Stat. Ann. § 84-2601, et seq.) (of which this statute is a part) is to impose a license tax on the business of owning, operating or leasing automatic slot and vending machines. He further found that there is no valid relationship between the State’s interest in the public health, safety, and welfare, and the residency requirement found in § 84-2634. In a letter opinion, Judge Bogard stated:

I. . . must find that the Supreme Court’s reasoning in Wometco Services v. Gaddy, 272 Ark. 452, 616 S.W.2d 466 (1981) control. It is interesting to note that in the Wometco decision it was held that “the State may regulate businesses which affect public health, safety, and welfare but it may not deprive an individual of his right to condust [sic] lawful business unless it can be shown that such deprivation is reasonably related to the State’s interest sought to be protected. . . there is no relationship between the required residency and a valid government interest.” In the case at bar the Court can find no valid reason from excluding nonresidents from holding permits for the sale of the equipment covered by Ark. Stat. Ann. § 84-2634 (b) (Repl. 1980). I thus can find no valid reason for having residency as a requirement for issuing the permit covered by the statute and must declare the statute in question to be unconstitutional for the reasons outlined in Mr. Gibbs’ brief.

Wometco dealt with an application for a permit to sell cigarettes through vending machines. That application was denied to the appellant, a South Carolina corporation licensed to do business in Arkansas. The appellant raised three constitutional arguments: commerce clause, equal protection clause, and the privileges and immunities clause, the same allegations in the case at bar. As Judge Bogard did in this case, we found in Wometco that the sole purpose of the act is to provide a system for the collection of taxes.

We have also held that the legislation in question must bear a reasonable relation to the achievement of the public objective. Jacks v. State, 219 Ark. 392, 242 S.W.2d 704 (1951). This requirement means that the law must accomplish the declared public end and not impose a burden upon someone not reasonably connected with the cause of the evil.

The appellant cites our decision in Brown v. Cheney, Commissioner, 233 Ark. 920, 350 S.W.2d 184(1961) in which we upheld the constitutionality of the residence requirement in the same statute at issue here. In Brown, we stated that the owning and operation of a “juke box” is a privilege and that:

On first impression it might appear that a “juke box” is harmless, and that its owner should be allowed to play it as a common right, but there are other things to be considered. It is common knowledge that coin operated “juke boxes” are not usually placed in the home, but are frequently used in dance halls, drinking places, and amusement spots. . . . The legislature, in regulating “juke boxes” had a right to take all these things into consideration.

Brown v. Cheney, supra, at 922.

There is nothing in the record to show that this evil is present in the instant case. In Wometco we said “the State may regulate business which affects public health, safety, and welfare, but it may not deprive an individual of his right to conduct lawful business unless it can be shown that such deprivation is reasonably related to the State interests sought to be protected.” Before we can deprive an individual of his right to conduct business, the deprivation must be reasonably related to the legitimate state interest. Here, there is no relationship between the required one year residency and a valid governmental interest.

The Privilege and Immunities Clause of the U.S. Const, art IV, § 2, cl. 1, provides: “The citizens of each State shall be entitled to all Privileges and Immunities of Citizens in the Several States.” It is a general rule that license legislation that discriminates against nonresidents of a state by refusing to grant them licenses where not required under the police power of the state for the protection of local citizens is void as violating the privileges and immunities and equal protection clauses of the U.S. Constitution. 51 Am. Jur. 2d Licenses and Permits § 31 p. 41; 61 A.L.R. 337, 338. The U.S. Supreme Court in Austin v. New Hampshire, 420 U.S. 656, 662 (1975) held “the Privileges and Immunities Clause, by making noncitizenship or nonresidence an improper basis for locating a special burden, implicates not only the individual’s right to nondiscriminatory treatment but also, perhaps more so, the structural balance essential to the concept of federalism.”

Therefore, we find that § 84-2634 (b) and (c) are unconstitutional as to the residency requirement contained therein and violate the equal protection and privileges and immunities clauses of the U.S. Constitution. We leave the rest of the provisions of that Statute untouched by this decision.

Affirmed.

Smith, George Rose, Dudley, and Hays, JJ., dissent.

Robert H. Dudley, Justice,

dissenting. The majority holds that Ark. Stat. Ann. § 84-2634(b) and (c) (Repl. 1980) violate the Equal Protection and the Privileges and Immunities Clauses of the Fourteenth Amendment to the Federal Constitution. I dissent from the majority and respectfully suggest that they are in error procedurally as well as substantively.

Procedurally, the majority is mistaken in declaring § 84-2634(c) unconstitutional. That statute was not at issue before the trial court, is not at issue before this Court, and should not be declared unconstitutional in an advisory manner. See McCuen v. Harris, 271 Ark. 863, 611 S.W.2d 503 (1981).

Substantively, two statutes are properly at issue before us. Both are a part of the Slot and Vending Machines Act. One imposes a privilege fee on coin operated amusement devices. Ark. Stat. Ann. § 84-2633. The other requires a one year residence before an individual can obtain a permit to own or lease coin operated amusement devices. Ark. Stat. Ann. § 84-2634(b). In Brown v. Cheney, 233 Ark. 920, 350 S.W.2d 184 (1961), cert. denied 369 U. S. 796 (1962), we considered the same statutory provisions. In Brown we held the provisions were constitutionally valid while in this case the majority holds the same provisions constitutionally invalid. In Brown we discussed the relationship between the state’s interest in the public health, welfare and safety and the residence requirement. Here, without discussion, the majority holds that no valid relationship exists. Whether a valid relationship exists between the state’s interest sought to be protected and the residency requirement is the crucial issue, the very crux of the case.

The correct rule of law falls into place only after the validity of the relationship is decided. The applicable rules of law are easily stated. The Privileges and Immunities Clause does not curtail the power of the state to reasonably discriminate between residents and non-residents if a legitimate state interest is being protected. Wilmington Star Mining Co. v. Fulton, 205 U.S. 60 (1907). Similarly, the Equal Protection Clause will not be held to interfere with the protection of a legitimate state interest unless there is an invidious discrimination. City of New Orleans v. Dukes, 427 U.S. 297 (1976). Again, the correct rule of law simply cannot be properly applied until there is a determination of whether a valid relationship exists between the state’s interest sought to be protected and the residency requirement.

A valid relationship does exist between the state’s interest sought to be protected and the residency requirement. The Slot and Vending Machines Act, in the section at issue, provides that it is a privilege to own, operate or lease coin operated amusement machines and these machines include, but are not limited to, “such games as Radio, Rifles, Miniature Football, Golf, Baseball, Hockey, Bumper, Tennis, Shooting Galleries, Pool Tables, Bowling, Shuffleboard, Pinball Tables, Marble Tables, Music vending phonographs, jukeboxes, and other similar musical devices for entertainment...” Ark. Stat. Ann. § 84-2633. In Brown we expressly took notice of a rational connection between coin operated amusement machines and places of entertainment. There we wrote:

On first impression it might appear that a “juke box” is harmless, and that its owner should be allowed to play it as a common right, but there are other things to be considered. It is common knowledge that coin operated “juke boxes” are not usually placed in the home, but are frequently used in dance halls, drinking places, and amusement spots. Pinball machines, the operation of which is conceded to be a privilege and so declared by statute and this Court, can also be used and operated in a perfectly harmless way, but by association and abuse they often lead to unwholesome results. The legislature, in regulating “juke boxes” had a right to take all these things into consideration.

Since 1915, we have had statutes regulating dance halls, roadhouses or similar places of entertainment where coin operated amusement devices could lead to unwholesome conditions. See Ark. Stat. Ann. § 34-101 (Repl. 1962), and Hood v. State, 206 Ark. 900, 175 S.W.2d 205 (1943). In the 1937 amendment to § 34-101, the emergency clause expressly referred to the public peace, health and safety. Similarly, in the 1958 amendment the emergency clause expressly referred to public morals as well as the public peace, health and safety.

One of the purposes of the coin operated amusement device act is to regulate closely the licensing of persons who own or operate amusement devices. Such a purpose is reasonably related to the state interests of the public health, safety and welfare. Therefore, the act violates neither the Privileges and Immunities Clause nor the Equal Protection Clause.

The majority fails to grasp the distinction between the facts of this case and the facts of the case of Wometco Services v. Gaddy, 272 Ark. 452, 616 S.W.2d 466 (1981). In Wometco, the state sought to limit the licensing of tobacco vendors to persons who were residents of this State. We held the statute unconstitutional, but carefully pointed out that this State has no legislation relating to the health, safety and welfare of tobacco vendors or purchasers. Thus, there was no valid state interest protected by the licensing of tobacco vendors. In the case before us there is legislation relating to the health, safety and welfare of persons in places of entertainment where coin operated machines could lead to unwholesome conditions.

delivered April 30, 1984

I would reverse.

I am authorized to state that Mr. Justice Smith and Mr. Justice Hays join in this opinion.

Supplemental Opinion on Denial of Rehearing

P. A. Hollingsworth, Justice.

Appellant’s petition for rehearing raises two points. First, appellant contends that this case is identical in fact and law to the case of Brown v. Cheney, Commissioner, 233 Ark. 920, 350 S.W.2d 184 (1961), in which we upheld the constitutionality of this same statute, and that we erred therefore in our decision since there is nothing to distinguish this case.

We agree with the appellant that this case is indistinguishable and, therefore, we overrule our decision in Brown. In affirming the constitutionality of the same statute in Brown, we stated that juke boxes are frequently used “in dance halls, drinking places, and amusement spots,” giving the legislature the right to require operators to be Arkansas residents. We now feel that this decision is archaic and is not supported by contemporary standards. We no longer agree that imposing a residency requirement on juke box operators bears a reasonable relation to the achievement of any public objective. Although it did not do so expressly, our opinion in Wometco Services v. Gaddy, 272 Ark. 452, 616 S.W.2d 466 (1981) provided the basis for our action today. In Wometco, we acknowledged the State’s ability to regulate business but we stated that the State “may not deprive an individual of his right to conduct lawful business unless . . . such deprivation is reasonably related to the State interests sought to be protected.” In Brown, we stated: “On first impression it might appear that a 'juke box’ is harmless and that its owner should be allowed to play it as a common right. ...” That is the view we adopt today.

Appellant’s second contention is that this Court found both subsections (b) and (c) of Ark. Stat. Ann. § 84-2634 (Repl. 1980) unconstitutional, even though the appeal challenged only subsection (b). Both subsections however, require the applicant for a music machine operator’s permit to have been an Arkansas resident for at least one year. Subsection (b) concerns all applicants while subsection (c) addresses partnership or corporation applicants only. If we had found subsection (b) to be unconstitutional and not subsection (c), the result would have been inconsistent. It has long been the rule in Arkansas that it is the duty of this Court to reconcile statutory provisions so as to make them “consistent, harmonious and sensible.” Shinn v. Heath, Director, 259 Ark. 577, 535 S.W.2d 57 (1976); McLeod, Commissioner v. Santa Fe Trail Transp. Co., 205 Ark. 225, 168 S.W.2d 413 (1943); and Cherry v. Leonard, 189 Ark. 869, 75 S.W.2d 401 (1934).

Rehearing denied.

George Rose Smith, Dudley and Hays, JJ., dissent.


author: P. A. Hollingsworth, Justice.

text:
    JONES TRUCK LINES, INC. et al v. CAMDEN-EL DORADO EXPRESS COMPANY
    83-272
    665 S.W.2d 867
    Supreme Court of Arkansas
    Opinion delivered March 12, 1984
    [Rehearing denied April 9, 1984.]

      Harper, Young, Smith &r Maurras, by: Don A. Smith; Henry & Duckett, by: James M. Duckett; and Kay L. Matthews, for appellants.

      Wood Law Firm, by: Craig T. Smith, for appellee.
   P. A. Hollingsworth, Justice.

The appellee filed an application with the Arkansas Transportation Commission (ATC) for a Certificate of Public Convenience and Necessity to operate as a motor common carrier to transport general commodities. Hearings were held on the application at which appellants: Jones Truck Lines Inc., Southwest Freight Distributors Inc., Superior Forwarding Co., Inc., Woodline Motor Freight Inc., and Sheridan Truck Line Inc., protested the application. The ATC granted the certificate. Appellants appealed the decision to Pulaski Circuit Court where the judge affirmed the decision of the ATC. From that order, appellants bring this appeal claiming that the lower court erred in affirming the ATC decision because the commission’s findings of fact were not supported by the evidence and because the ATC failed to follow Arkansas statutes and case law.

In its application, the appellee sought to transport general commodities excluding articles of extraordinary value, class A & B explosives, household goods and commodities in bulk, and commodities requiring special equipment. The proposed territory encompasses Union, Ouachita, and Pulaski Counties with particular emphasis on the Camden-El Dorado area. Since protests were filed by the appellants, a lengthy hearing was held by the ATC. After taking testimony, the Commission found the following in pertinent part:

In the instant case it would serve little purpose to summarize the testimony of each witness, some of which is conflicting. Supporting witnesses, appearing on behalf of applicant, who in the course of their businesses have various commodities to ship, testified at length relating incidences of damage and delay of shipments. There was also testimony that some carriers are failing to make pickups when called and are promising delivery directly to the business establishment however are requiring the consignee to pick up the shipment at a nearby larger city.
Applicant admits in its verified statement that the service to Camden and El Dorado is “in most part adequate,” however, it will need that revenue in order to be able to provide "much needed transportation services to outlying areas.”

The decision of the Commission was affirmed by the Circuit Court, and the appeal is here under our Rule 29 (1) (d). We reverse.

Ark. Stat. Ann. 73-1741 (Repl. 1979) provides that the commission’s findings “shall be in sufficient detail to enable any court in which any action of the commission is involved to determine the controverted questions presented by the proceeding.” Here, the failure of the commission’s order to detail and discuss the testimony by various witnesses hampers us on review.

We try cases of this type de novo. Boyd v. The Arkansas Motor Freight Lines, Inc., 222 Ark. 599, 262 S.W.2d 282 (1953). We review all the evidence and make such findings of fact and law as we deem just, proper and equitable, as in chancery cases. Arkansas Commerce Commission v. St. Louis Southwestern Railway Company, 247 Ark. 1032, 448 S.W.2d 950 (1970). When the evidence is evenly balanced, the views of the administrative agency must prevail. Fisher v. Branscum, 243 Ark. 516, 420 S.W.2d 882 (1967). However, we will reverse a finding by the commission if that finding is clearly against the preponderance of the evidence. Wheeling Pipe Line v. Ark. Commerce Commission, 249 Ark. 685, 460 S.W.2d 784 (1970).

In Santee v. Brady, 209 Ark. 224, 189 S.W.2d 907 (1945) we discussed the rules applicable to the grant of a certificate and stated:

The general rule is that a certificate may not be granted where there is existing service in operation over the route applied for, unless the service is inadequate, or additional service would benefit the general public, or unless the existing carrier has been given an opportunity to furnish such additional service as may be required.
The opportunity to the existing carriers is in the disjunctive sense of “or” rather than the conjunctive “and.”

As to the meaning of “public convenience and necessity” we held in Torrans v. Ark. Commerce Comm’n, 246 Ark. 930, 440 S.W.2d 558 (1969) that, “Of course, a few individuals or companies might receive some benefit from the granting of a certificate ... but the benefit that might accrue in these isolated cases is not what is meant by the term ‘public convenience and necessity’."

We recognize that the use of testimony of those people using the service is helpful for the applicant to show additional carrier services are needed. We know of no other way that the need for additional transportation services could be shown. Wheeling v. Ark. Commerce Commission, supra. Of course, often this testimony indicates a desire to have carrier service at all times the witness wanted the service just as if they were traveling in their private car. But we have recognized this is not a necessity within the meaning of the law which must be construed in its practical application to service of this kind. National Trailer Convoy v. Transit Homes, 254 Ark. 504, 494 S.W.2d 446 (1973).

Here the Commission heard the testimony of fourteen witnesses in support of the permit. Some of the testimony was specific but much of it was general and about complaints that the protesting carriers eventually resolved. Witnesses testified about the need to have a cárrier move hazardous materials; the applicant however did not file an application to transport such materials. There was testimony that because there was no service to the Chidester School District, it was necessary to pick up the material in Camden. However, the janitor of the school had made this arrangement, and other carriers were willing to serve the school. Other problems discussed were against one carrier, Jones Truck Lines, missing pickups and delaying deliveries, but the witnesses admitted they had no complaints against other companies and that service had always been reasonably adequate. Other witnesses testified they had no substantial problems with any carriers although they did not get the type of service they desired. In short, a review of the testimony does not support the findings of the Commission that the additional service would benefit the general public in the Camden-El Dorado area.

We have reversed the Commission’s grant of an application when, as here, “the protesting carriers offered a willingness to meet any additional needs that might arise or offered proof of their ability to provide satisfactory services.” National Trailer Convoy v. Transit Homes, supra. A clear preponderance of the evidence was to the effect that the objecting carriers owned ample equipment to haul all commodities over the highways designated in the applicant’s petition. Several of the eight witnesses testifying in opposition to the permit stated they would procure any additional equipment not presently owned by them which public necessity might require. Potashnick Local Truck System, Inc. v. Fikes, 204 Ark. 924, 165 S.W.2d 615 (1942).

The findings of the Commission in this case are clearly against the preponderance of the evidence, therefore, the judgment of the Circuit Court is reversed.

Reversed.


text:
    Charlie Lee JONES, a/k/a Larry Joe ROGERS v. STATE of Arkansas
    CR 85-117
    665 S.W.2d 876
    Supreme Court of Arkansas
    Opinion delivered March 19, 1984

      John H. Bradley, Dep. Public Defender, for appellant.

      Steve Clark, Atty. Gen., by: Marci L. Talbot, Asst. Atty. Gen., for appellee.
   George Rose Smith, Justice.

Charlie Lee Jones was convicted of first-degree battery and aggravated robbery and was sentenced to consecutive terms of 20 and 40 years. There is no merit in his twelve arguments for reversal, which we discuss in five groupings.

On the afternoon of November 13,1982, at about 2:45 or 2:50, Jones appeared at the home of Charles H. Payne, Jr., in south Blytheville. Payne testified that Jones asked for $15, drew a .22 pistol when Payne refused the request, tied Payne’s hands, and shot Payne twice when Payne resisted by kicking Jones. One shot passed through Payne’s arm, and the other entered Payne’s lip and broke several teeth. Jones stopped shooting and ran hurriedly out the door. Payne freed himself and sought help from his neighbor, who took him to a hospital. The city police broadcast a description of Jones.

Apparently within a few minutes Jones carried his suitcase to downtown Blytheville and hitchhiked a ride with Matthew Beal, asking to be taken to the bus station. Beal estimated the time as having been 3:00 o’clock. After a stop at a liquor store Jones displayed a .22 pistol and forced Beal to drive out of town. Jones ordered Beal to stop and get out of the pickup truck. Jones took Beal’s billfold, containing over $200, and took the clothes Beal had on. Jones then drove away in the truck. Beal found a piece of cardboard to wrap around himself and went to a house, whose owner called the police. Descriptions of Jones and the truck were broadcast.

An officer in Crittenden County, the next county to the south, received a description of the pickup truck at 3:45 and was called at 4:45 to assist another officer who had the truck in sight. After a chase Jones was apprehended. A .22 pistol was taken from him at the scene of his arrest, and when he was searched at the police headquarters in Marion the officers took from his person a wallet, a utility bill addressed to Matthew Beal, and a postcard addressed to Martha Beal. All four items were introduced in evidence without further identification.

I. Two arguments arise from a prospective juror’s having seen Jones a few minutes before the trial was to start, when he was wearing blue clothing supplied at the jail. The court properly denied a defense request for a mistrial. A photograph of the clothing supports the trial judge’s conclusion that it was not “prison garb,” being merely a blue denim jacket and trousers bearing no numbering or lettering that would identify Jones as a prisoner. The point was not pursued; there is no indication that the person who saw Jones actually sat on the jury.

During the hearing a deputy prosecutor testified that he saw several people in the courtroom at the time of the incident, but he did not recognize any of them as possible jurors. The court overruled defense counsel’s objection that a prosecutor trying the case should not be permitted to testify, but there was no request that he be disqualified from assisting in the trial. It is certainly true that the lawyer should not have testified in the case if he was to take part in the trial, but the court’s ruling was based on the fact that the clothing was not indicative of Jones’s status as a prisoner. The deputy’s testimony about whether prospective jurors might have seen the clothing was hardly relevant and certainly not prejudicial error.

II. Four argued points pertain to the trial court’s conclusion that the two offenses being tried were part of a single criminal episode. The proof supports that conclusion. Jones, a stranger in town with no means of transportation, had assertedly committed a serious felony by shooting Payne twice. The judge and the jury could infer that he took flight, flagged down a passing driver, and held him up at gunpoint in order to flee in the truck, leaving the driver out in the country without clothing.

It is argued that the two charges, battery and robbery, should have been tried separately. Our former statutes, which restricted the crimes that could be charged in the same information, have been superseded by A.R.Cr.P. Rule 21.1 (b), which provides that two offenses may be joined when they are based on the same conduct or “on a series of acts connected together.” Here the trial judge, in denying the motion for separate trials, could have found from the preliminary proof on the motion to sever and again from the proof at trial that the whole episode was practically continuous, that the shooting of Payne gave rise to the robbery and theft of Beal’s pickup, and that Jones’s flight continued until he was stopped within a short time by the police in an adjoining county. Jones presumably wanted the truck for flight, because he did not know the money was in the wallet when he took Beal’s clothing and drove away in the truck.

The trial judge did not clearly abuse his discretion in finding that the language of the Criminal Rules did not require separate trials of the offenses. The same reasons support the court’s action in allowing the two charges to be joined by an amendment to the information on the day of trial. Separate informations had been filed months before that; so there is no claim that the defense was surprised by the amended information.

Two other points relate to the proof of the arrest and the introduction of items seized as a result of that arrest. The testimony about the chase leading to the arrest was admissible, for the action of a suspect in fleeing from the scene of the crime is relevant to the issue of guilt, and such proof is proper even though the flight did not occur immediately after the crime. Murphy v. State, 255 Ark. 90, 498 S.W.2d 884 (1973). That Jones had a .22 pistol when he was arrested corroborated the testimony of the two victims that he had such a weapon earlier and confirms the trial court’s finding that the two offenses were based on a series of connected acts. The court was not wrong in permitting the State to introduce the wallet, utility bill, and postcard without specific identification by Beal, for the nature of the articles themselves made them relevant to the jury’s consideration of the case. The absence of specific identification went only to the weight of this circumstantial evidence, not to its admissibility.

III. By a pretrial motion Jones asked the trial Judge to rule that if Jones elected to testify he could not be cross-examined about his convictions within the preceding ten years for burglary, attempted rape, kidnapping, assault and battery, and robbery, plus three convictions for larceny. The trial judge held that such cross-examination would be permitted. Jones then chose not to testify, but he has standing to raise the issue on appeal. He met the conditions specified in Simmons v. State, 278 Ark. 305, 645 S.W.2d 680 (1983), by testifying in chambers that both the victims had made homesexual advances to him, which he resisted by shooting Payne and by fleeing in Beal’s truck.

The trial judge’s ruling was right. Uniform Evidence Rule 609 provides that certain prior convictions are admissible for impeachment if the court finds their probative value outweighs their prejudicial effect. Jones relies on our decision in Jones v. State, 274 Ark. 379, 625 S.W.2d 471 (1981), where we held that the prej udicial effect of a prior conviction for sexual abuse of a child would outweigh its probative impeachment value in a later similar case. We pointed out, however, that such a crime is particularly shameful and outrageous. The prior convictions in the present case are not in that category; so they would be admissible for impeachment. Floyd v. State, 278 Ark. 342, 645 S.W.2d 690 (1983).

IV. Two arguments pertain to instructions. The offense of first-degree battery was properly submitted to the jury by AMCI1601, for the j ury could reasonably find that shooting a person in the mouth creates a substantial risk of death. The court’s refusal to submit the lesser included offense of third-degree battery, even if error, was cured by the jury’s choice of first-degree rather than second-degree battery, which was also submitted. See Alexander v. State, 254 Ark. 998, 497 S.W.2d 279 (1973).

V. The remaining three points for reversal are not of sufficient merit to call for discussion: (1) That the trial judge, during the voir dire, in some unspecified manner committed the jury to believing the State’s witnesses; (2) that the court erred in permitting the State to withdraw an objection after it had been sustained; and (3) that the prosecutor’s reference in his closing argument, to testimony as “undisputed” called attention to Jones’s failure to testify.

Affirmed.