author: W.H. “Dub” Arnold, Chief Justice. Annabelle Clinton Imber, Justice, W.H. “Dub” Arnold, Chief Justice. Tom Glaze, Justice,

text:
    Tim D. WILLIAMS v. Kelly Lasley MARTIN and James R. Gill, III
    97-1228
    980 S.W.2d 248
    Supreme Court of Arkansas
    Opinion delivered November 19, 1998
    [Supplemental opinion on denial of rehearing delivered January 28, 1999.]

      Rose Law Firm, by: David L. Williams, for appellant.

      Brazil, Adlong, Murphy & Osment, PLC, by: Michael L. Murphy, for appellee Kelly Lasley Martin.

      Mitchell, Blackstock, Barnes, Wagoner & Ivers, by: Jack Wagoner III, for appellee James R. Gill III.

       Glaze, Imber, and Smith, JJ., dissent.

   W.H. “Dub” Arnold, Chief Justice.

This is the fifth appeal involving these parties, stemming from a lawsuit originally filed in 1990. This appeal is from an award of $23,336.00 in monetary sanctions under Ark. R. Civ. P. 11 entered by the Faulkner County Circuit Court against appellant, Tim D. Williams, who represented appellee James R. Gill, III, as the defendant in the original action involving the fraudulent sale of a used car. Appellee Kelly Lasley Martin was the plaintiff in the original action in which judgment was entered on October 5, 1993, in her favor, for $3,100.00 plus costs.

Although Mr. Gill had knowledge of the original appeal of the original judgment and had given his authorization for same, Mr. Gill was never informed by Mr. Williams that that appeal was eventually dismissed by the Arkansas Court of Appeals for Mr. Williams’s failure to perfect the appeal. Subsequently, various motions were filed by Ms. Martin, as the plaintiff, in an attempt to execute on the judgment. Each time, Mr. Williams, purportedly on Mr. Gill’s behalf, would either move to quash those motions or appeal adverse rulings on the motions; however, those appeals were never perfected and each was ultimately dismissed by the Court of Appeals. Other than the original appeal of the original judgment, Mr. Williams filed three subsequent appeals without his client’s knowledge or authorization, on various issues, yet never perfected any of those appeals. The Court of Appeals dismissed each appeal for appellant’s failure to file a brief. The fourth time the Court of Appeals dismissed an appeal, it forwarded a copy of the proceedings to the Committee on Professional Conduct.

A hearing was held on April 10, 1997, on Ms. Martin’s Petition for Sanctions and Attorney’s Fees, which had been filed on October 23, 1996. Although being properly served with notice of this hearing, Mr. Williams did not attend. At the hearing, Mr. Gill testified that he had not been informed by Mr. Williams of the status of the proceedings in the case, including that the Court of Appeals had dismissed the appeal of the original judgment as untimely. Mr. Gill further testified that he had never authorized Mr. Williams to file a response to the original postjudgment motion to compel or to undertake or file any notices of appeal of the subsequent postjudgment proceedings. By amended order dated May 8, 1997, the Faulkner County Circuit Court ordered Mr. Williams to pay sanctions to Ms. Martin, pursuant to Rule 11, in the amount of $4,513.00, plus $10,000.00 in punitive damages, plus interest. Mr. Williams was further ordered to pay Mr. Gill, his former client, $8,823.00, plus a separate award of $10,000.00. Mr. Williams filed a motion to reconsider and vacate the order of May 8, 1997. The Honorable Judge David Reynolds then recused. The Honorable Judge Lawrence Dawson was assigned as special circuit judge to determine the pending motion to reconsider. A hearing was held on June 17, 1997, at which time Mr. Williams testified in support of his motion and also disputed portions of Mr. Gill’s prior testimony.

At the conclusion of the hearing, Judge Dawson agreed with Judge Reynold’s prior findings of fact, except he reduced the amount of punitive damages from $20,000.00 to $10,000.00, with $5,000.00 being payable each to Ms. Martin and Mr. Gill. Specifically, Judge Dawson found that the trial court had the authority, pursuant to Ark. R. Civ. P. 11, to impose punitive sanctions against Mr. Williams because he had filed two appeals to the Arkansas Court of Appeals, regarding the trial court’s postjudgment orders, and subsequently admitted that he never intended to follow through with those appeals. Further, he found that two notices were filed improperly, solely for the purpose of delay, and that the appeals were pursued without the authority or knowledge of Mr. Williams’s client. Additionally, he found that Mr. Williams violated Ark. R. Civ. P. 11 by certifying on pleadings that opposing counsel had been served when, in fact, no such service was made. Finally, Judge Dawson found that Mr. Williams engaged in a continuing course of misrepresentation to the court, the parties, and opposing counsel, subsequent to his failure to perfect an appeal of the original October 5, 1993, judgment, and that these misrepresentations were intended to conceal from his client the fact that the Arkansas Court of Appeals dismissed that appeal because Mr. Williams’s failed to timely file the notice of appeal. Judge Dawson also made specific findings from the bench at the close of testimony and incorporated those by reference in his order of June 18, 1997. It is from that order that Mr. Williams now appeals.

Appellant asserts four points on appeal: (1) that the circuit court erred and abused its discretion in imposing Rule 11 sanctions for conduct that did not involve the signing of a pleading or document that must be filed; (2) that the circuit court abused its discretion in awarding Rule 11 sanctions to Mr. Gill, who was appellant’s former client; (3) that the circuit court abused its discretion in both the amount of sanctions and the imposition of “additional punitive damages”; and (4) that the circuit judge (Judge Reynolds) abused his discretion by declining to set aside the sanctions order in his order of recusal.

It is important to note that the appellees contend that the appellant’s abstract is flagrantly deficient and therefore the trial court’s judgment should be affirmed pursuant to Rule 4-2(b)(2) of the Arkansas Rules of the Supreme Court. While this Court agrees that appellant’s abstract was somewhat lacking, we find that it was not so deficient as to warrant blanket affirmation pursuant to Rule 4-2(b)(2). Therefore, based upon the merits of the case and for the reasons set forth below, we affirm the trial court’s decision in part and reverse in part.

I. Whether the circuit court erred and abused its discretion in imposing Rule 11 sanctions for conduct that did not involve the signing of a pleading or document that must be filed.

The imposition of sanctions is a serious matter to be handled with circumspection, and the trial court’s decision is due substantial deference. Jenkins v. Goldsby, 307 Ark. 558, 822 S.W.2d 842 (1992). The Supreme Court reviews a trial court’s determination of whether a violation of this rule occurred under an abuse-of-discretion standard. Ward v. Dapper Dan Cleaners & Laundry, Inc., 309 Ark. 192, 828 S.W.2d 833 (1992). In deciding an appropriate sanction, trial courts have broad discretion not only in determining whether sanctionable conduct has occurred, but also what an appropriate sanction should be. Crockett & Brown v. Wilson, 321 Ark. 150, 901 S.W.2d 826 (1995).

Arkansas Rule of Civil Procedure 11 applies to “every pleading, motion, and other paper of a party represented by an attorney.” (Emphasis added.) Appellant asserts that the sanctioned conduct involved oral statements before the trial court, rather than pleadings, motions, or papers that must be filed pursuant to Rule 5 and motions filed before the Court of Appeals beyond the trial court’s jurisdiction. Appellant does admit, however, that he filed, in the trial court, several notices of appeal which were never perfected with the Court of Appeals and many postjudgment motions and pleadings while plaintiff was attempting to execute on the judgment for which appellant had no authorization from his client, Mr. Gill, to file. Appellant’s signature was on the notices of appeal and postjudgment motions and pleadings and would certainly be considered “papers” at the very least under Rule 11. Further, it is undisputed that appellant never served the notices of appeal on the original plaintiff, Ms. Martin, or her attorney and has failed to even abstract some of them for this Court’s benefit.

Appellant fails to offer any authority whatsoever that a notice of appeal is not such a pleading or “paper.” Appellant’s failure to cite authority or make a convincing argument is sufficient reason for affirmance of the trial court’s ruling on this point. Williams v. State, 329 Ark. 8, 946 S.W.2d 678 (1997). It is certainly not apparent without further research that appellant’s argument is well-taken. Roberts v. State, 324 Ark. 68, 919 S.W.2d 192 (1996).

We have held in Crockett & Brown, P.A. v. Wilson, 321 Ark. 150, 901 S.W.2d 826 (1995), that under Ark. R. Civ. P. 11, an attorney signing a pleading, motion, or other paper on behalf of a party constitutes a certificate that (1) the attorney made a reasonable inquiry into the facts supporting the document or pleading, (2) he or she made a reasonable inquiry into the law supporting that document to ensure that it is warranted by existing law or a good faith argument for the extension, modification, or reversal of existing law, and (3) the attorney did not interpose the document for any improper purpose, such as to harass or cause unnecessary delay or needless increase in the cost of litigation. (Emphasis added.) When a violation of Rule 11 occurs, the Rule makes sanctions mandatory. Id. at 154.

Clearly, the trial court determined, in its discretion, that appellant was engaging in a course of conduct that was prejudicial to the administration of justice by knowingly filing notices of appeal and other meritless postjudgment motions and pleadings with the trial court for the purposes of delay, when he knew that he had neither obtained the authorization of his client to do so, nor had he served said notices of appeal upon the plaintiff. In short, appellant used the trial court as a vehicle, compounding one misrepresentation after another, all at the expense of the parties involved, including his own client.

Therefore, the trial court will be affirmed on this point.

II. Whether the circuit court abused its discretion in awarding Rule II sanctions to Mr. Gill, who was Mr. Williams’s former client.

Again, in deciding an appropriate sanction, trial courts have broad discretion not only in determining whether sanctionable conduct has occurred, but also what an appropriate sanction should be, and that court’s determination will not be overturned by this Court absent an abuse of that discretion. In the present case, the trial court determined that both the opposing party and appellant’s former client, Mr. Gill, should receive the monetary awards of Rule 11 sanctions imposed against the appellant. Rule 11, however, states that if a paper is filed in violation of that rule, the court “shall impose ... an appropriate sanction, which may include an order to pay to the other party or parties the amount of the reasonable expenses incurred because of the filing of the pleading, motion, or other paper, including a reasonable attorney’s fees.” (Emphasis added.)

Neither the language of Rule 11 nor any reported decision of this Court supports an award of Rule 11 sanctions in favor of a party against his own attorney. The specific reference to “the other party or parties” demonstrates that sanctions are payable to adversaries, not to one’s own client by the sanctioned attorney. The purpose of Rule 11 is to deter abuses of the litigation process that have the potential for harming the interests of the opponent, not to discipline attorneys for alleged breaches of duties owed to their own clients. Certainly, their clients would maintain the right to file a malpractice lawsuit against their attorney for the breach of any duty owed by that attorney to his client.

Further, neither Mr. Gill nor his new attorney filed any motion for Rule 11 sanctions or provided any other notice to appellant that Mr. Gill would seek Rule 11 sanctions against appellant. Mr. Gill simply orally joined in Ms. Martin’s petition for sanctions, previously filed on October 23, 1996, at the hearing of the matter on April 10, 1997. Pursuant to the 1997 amendments to Rule 11, which became effective on March 1, 1997, a motion for sanctions “must be served but shall not be filed until the party is given 21 days after service of the motion to withdraw the challenged filing.” The purpose of the amendment is to provide a “safe harbor” against Rule 11 motions so that a party is not subject to sanctions unless, after receiving the motion, the party refuses to withdraw the position. Ark. R. Civ. P. 11, Reporter’s Notes to 1997 Amendment. The “safe harbor” provision would, therefore, apply to Mr. Gill’s April 10, 1997, oral petition for sanctions and would have left appellant with no notice of Mr. Gill’s intention to seek such sanctions.

Therefore, because Mr. Gill was appellant’s former client and not an “other party,” as described in Rule 11, and because of the “safe harbor” amendment to Rule 11, the award of sanctions against appellant in favor of his former client, Mr. Gill, was an abuse of discretion by the trial court and will hereby be reversed. We hold, however, that Ms. Martin is an “other party,” as described in Rule 11; furthermore, we hold that the “safe harbor” amendment was not in effect at the time of her filing of a petition for sanctions and attorney’s fees and therefore would not apply to her petition.

III. Whether the circuit court abused its discretion in both the amount of sanctions and the imposition of “additional punitive damages.”

As stated above, in deciding an appropriate sanction, trial courts have broad discretion not only in determining whether sanctionable conduct has occurred, but also what an appropriate sanction should be and that court’s determination will not be overturned by this Court absent an abuse of that discretion. Upon finding a violation of Rule 11, the trial court must impose an appropriate sanction. Apparently, in this case, the trial judge felt that a monetary award to both the opposing party and appellant’s former client was the “appropriate sanction.”

The Crockett & Brown case, supra, requires that when a monetary award is issued, the trial court should explain the basis of the sanction so a reviewing court may have a basis to determine whether the chosen sanction is appropriate. The trial court should consider (1) the reasonableness of the opposing party’s attorney’s fees, (2) the minimum to deter, (3) the ability to pay, and (4) factors relating to the severity of the Rule 11 violation.

In the instant case, Judge Dawson, who was appointed after Judge Reynolds had recused, specifically addressed each of the above-enumerated considerations in his findings and, after addressing them, determined that Judge Reynolds’s sanctions were, indeed, appropriate with the exception of the amount of punitive, or as Judge Dawson called them, “exemplary” damages that were awarded; Judge Dawson felt that $20,000.00 total in “exemplary” damages was excessive and reduced that amount to $10,000.00 ($5,000.00 payable to each Ms. Martin and Mr. Gill).

Judge Dawson specifically addressed in his findings the appropriateness of the imposition of punitive or “exemplary” damages under Rule 11. Judge Dawson found that while Rule 11 does not specifically address the use of punitive damages, the primary purpose of Rule 11 is to deter future litigation abuse. Judge Dawson found that when taking all of the conduct into account in the instant case, “exemplary” damages were appropriate.

Again, pursuant to the abuse-of-discretion standard, the trial court will be affirmed in regard to the appropriateness of the award and amount of monetary sanctions to Ms. Martin, but reversed as to the award of any monetary sanctions in favor of Mr. Gill, as he was appellant’s former client.

IV. Whether the circuit judge (Judge Reynolds) abused his discretion by declining to set aside the sanctions order in his recusal.

After appellant filed his motion to reconsider the entry of Rule 11 sanctions on May 19, 1997, Circuit Judge David Reynolds recused and requested that a special judge be assigned to hear the case. No party had requested that Judge Reynolds recuse; he did so sua sponte.

By motion, appellant requested that due to the recusal, the circuit judge should also vacate the order and judgment of May 8, 1997, in order to permit the new trial judge assigned to determine the underlying amended petition for sanctions and attorney’s fees without being restricted to reconsidering the court’s previous order. The court declined to grant that motion.

Appellant contends that the failure of the circuit court to vacate its opinion placed the appellant and the successor judge in a “difficult, untenable position” and was a denial of due process. Appellant’s point on appeal, however, is somewhat misleading, in that it ignores the fact that the special circuit judge (Judge Dawson) entered his own order after hearing the testimony of appellant in a separate hearing.

Judge Dawson noted in his findings:

The court has spent many hours last week preparing for this hearing because a lot is involved, and even though the case started out being a $3,000.00 plus judgment for the plaintiff, it has snowballed into two thick volumes of pleadings, motions, orders, notices of appeal, and what-have-you.

Certainly, appellant does not dispute that Judge Dawson was well prepared and had carefully reviewed the record prior to hearing his testimony. There is simply nothing to support appellant’s contention that the successor judge was in a “difficult, untenable position,” as appellant described him in his brief.

In support of his argument, appellant cites the cases of Johnson Timber Corp. v. Sturdivant, 295 Ark. 663-B, 758 S.W.2d 415 (1988) and Parham v. Church Mutual Insurance Company, 53 Ark. App. 194, 922 S.W.2d 724 (1996), involving the setting aside of prior orders where all the justices were on the same panel as the judge who recused. Clearly, these cases do not involve similar fact situations as the case at bar and will not be relied upon as either controlling or persuasive authority in this case. Here, the special trial judge independently reviewed the record, held a separate hearing, and issued a separate order with specific additional findings.

Even assuming there was some error in the procedure by which this matter came on for hearing before the special circuit judge, a separate hearing was held, and, therefore, appellant was not prejudiced. Any alleged error was, therefore, harmless. We hereby affirm the trial court on this point, as well.

Based on the foregoing, we affirm the trial court’s decision in part and reverse in part.

Glaze and Imber, JJ., concur.

Annabelle Clinton Imber, Justice,

concurring. I concur with the majority but write to further expand on the majority’s analysis of Mr. Williams’s first argument that the trial court abused its discretion in imposing sanctions for conduct that did not involve signing of a pleading or document that must be filed.

At the time Ms. Martin filed her Petition for Sanctions and Attorney’s Fees on October 23, 1996, three of the appeals filed by Mr. Williams had been dismissed by the Court of Appeals. However, a fourth appeal filed by Mr. Williams was still pending. It is clear that the trial court retained jurisdiction to rule on Ms. Martin’s Petition for Sanctions and Attorney’s Fees while an appeal was pending, because motions requesting sanctions under Rule 11 of the Arkansas Rules of Civil Procedure are collateral to the merits of the underlying action. Crockett & Brown, P.A. v. Wilson, 321 Ark. 150, 901 S.W.2d 826 (1995); Spring Creek Living Ctr. v. Sarrett, 318 Ark. 173, 883 S.W.2d 820 (1994).

With regard to Mr. Williams’s claim that the trial court had no jurisdiction to award Rule 11 sanctions based upon documents signed by an attorney that are filed in the Court of Appeals or the Supreme Court, we have held that the Rules of Civil Procedure govern only the conduct of the parties and attorneys in trial courts. Wright v. Eddinger, 320 Ark. 151, 894 S.W.2d 937 (1995); Crockett & Brown, P.A. v. Wilson, 314 Ark. 578, 864 S.W.2d 244 (1993). Thus, the Supreme Court and the Court of Appeals will not consider motions for Rule 11 sanctions regarding papers filed in trial courts. Wright, supra. Such motions must be filed with and addressed by the trial court, which can impose sanctions under Rule 11. Jones v. Jones, 329 Ark. 320, 947 S.W.2d 6 (1997).

With regard to papers filed in the Supreme Court or the Court of Appeals, motions for sanctions are to be considered by the appropriate appellate court under Rule 11 of the Rules of Civil Appellate Procedure, which went into effect on March 1, 1997. Although an appeal is taken by filing a notice of appeal with the clerk of the court that entered the judgment, decree or order from which the appeal is taken, a trial court does not have authority to pass on the validity of a notice of appeal. See Ark. R. App. P.—Civ. 3(b). Rather, such authority is vested in the Supreme Court. Id.; see also Stahl v. State, 328 Ark. 106, 940 S.W.2d 880 (1997); Barnes v. State, 322 Ark. 814, 912 S.W.2d 405 (1995). Specifically, Ark. R. App. P. — Civ. 3(b) provides that:

Failure of the appellant or cross-appellant to take any further steps to secure review of the judgment or decree appealed from shall not affect the validity of the appeal or cross-appeal, but shall be ground only for such action as the Supreme Court deems appropriate, which may include dismissal of the appeal or cross-appeal.

In this case, Ms. Martin filed her Petition for Sanctions against Mr. Gill and Mr. Williams not only after several notices of appeal were filed by Mr. Williams, but also after he filed several postjudgment motions and pleadings in the circuit court. In fact, her Petition for Sanctions listed five postjudgment motions and pleadings filed by Mr. Williams and characterized those papers as follows:

[A]U of the above pleadings are virtually identical and restate what has already been previously filed. These pleadings are unnecessary pleadings and have been filed to further delay these proceedings. Further, Plaintiff has repeatedly incurred unnecessary expense in responding to these pleadings ....

The facts pertaining to Mr. Williams’s actions as set forth in Ms. Martin’s Petition for Sanctions were accepted as true by Judge Reynolds in the May 8, 1997 order. Judge Dawson also agreed with those findings in the June 18, 1997 order that is the subject of this appeal.

In view of the trial court’s findings that postjudgment pleadings and motions were filed by Mr. Williams for an improper purpose, such as to cause unnecessary delay and expense, it cannot be said that the trial court exceeded its jurisdiction to impose Rule 11 sanctions for pleadings, motions and other papers filed in the Faulkner Circuit Court by Mr. Williams. Furthermore, based upon these findings that Mr. Williams filed postjudgment pleadings and motions for an improper purpose, I must concur with the majority that the trial court did not abuse its discretion when it imposed Rule 11 sanctions.

984 S.W.2d 449

January 28, 1999

Rose Law Firm, by: David L. Williams, for appellant.

Brazil, Adlong, Murphy & Osment, PLC, by: Michael L. Murphy, for appellee Kelly Lasley Martin.

Mitchell, Blackstock, Barnes, Wagoner & Ivers, by: Jack Wagoner III, for appellee James R. Gill III.

Glaze, J., joins in this concurrence.

SUPPLEMENTAL OPINION ON DENIAL OF REHEARING

W.H. “Dub” Arnold, Chief Justice.

It is the contention of the appellant in his petition for rehearing that the majority opinion did not address the issue of whether Rule 11 of the Arkansas Rules of Civil Procedure authorizes a monetary sanction that exceeds the cost and attorney’s fee. This issue was not raised by appellant in his initial appeal; however, the Court did uphold the trial court’s assessment of $5,000.00 in sanctions. While Judge Dawson erroneously used the term “exemplary damages” in his findings, it was apparent from the record that he was applying sanctions under Rule 11. Unlike Federal Rule 11, our Rule 11 places no limit on the amount of sanctions that may be imposed.

Therefore, appellant’s petition for rehearing is denied.

Glaze, Imber, and Smith, JJ., dissent.

Tom Glaze, Justice,

dissenting. The supplemental opinion states that, unlike federal Rule 11, Arkansas’s Rule 11 places no limit on the amount of sanctions that may be imposed. However, in Crockett & Brown, P.A. v. Wilson, 321 Ark. 150, 901 S.W.2d 826 (1995), this court decided the following:

Upon finding a violation of Rule 11, the trial court must impose an appropriate sanction, which may include an order for the violating party to pay the opposing party or parties the amount of the reasonable expenses they had incurred, including an attorney’s fee. While this court has not established a standard of review in deciding whether a trial court has imposed an appropriate sanction, the Supreme Court has settled the issue for federal courts, holding that district courts have broad discretion not only in determining whether sanctionable conduct has occurred, but also what an appropriate Rule 11 sanction should be. See Cooter & Gell v. Hart Marx Corp., 496 U.S. 384 (1990). We believe the standard should be applied here.

The federal courts have held that the primary purpose of Rule 11 sanctions is to deter future litigation abuse. See Id.; In Re Kunstler, 914 F.2d 505 (4th Cir. 1990). It has also been held that the least severe sanction adequate to serve the purposes of Rule 11 should be imposed, and the award of fees is but one of the methods of achieving the various goals of Rule 11. Id.; White v. General Motors Corp., Inc., 908 F.2d 675 (10th Cir. 1990). In addition, the court in In Re Kunstler further held that, when a monetary award is issued, the trial court should explain the basis of the sanction so a reviewing court may have a basis to determine whether the chosen sanction is appropriate. The trial court should consider (1) the reasonableness of the opposing party’s attorney’s fees, (2) the minimum to deter, (3) the ability to pay and (4) factors relating to the severity of the Rule 11 violation. The Kunstler court further related the following:

Because the sanction is generally to pay the opposing party’s “reasonable expenses . . . including a reasonable attorney’s fee,” Fed. R. Civ. P. 11, incurred because of the improper behavior, determination of this amount is the usual first step. The plain language of the rule requires that the court independently analyze the reasonableness of the requested fees and expenses. The injured party has a duty to mitigate costs by not overstaffing, overresearching or overdiscovering clearly meritless claims. In evaluating the reasonableness of the fee request, the district court should consider that the very frivolousness of the claim is what justifies the sanctions. (Emphasis added.)

After setting forth the above, the Wilson court reversed the Pulaski County Chancery Court because the chancery court had failed to follow the federal Rule 11 standards this court adopted; nor did it specify in its order how the chancery court determined why the $15,000.00 sanction imposed against attorneys, Crockett & Brown, P.A., was appropriate to the circumstances. Accordingly, the Wilson court remanded the case to permit the parties and the chancery court to proceed solely on the issue of the appropriateness or amount of the sanction to be imposed, by employing the federal Rule 11 standards adopted in the Wilson decision.

In my view, this case is indistinguishable from this court’s Wilson holding, and we should return it to the trial court to apply the federal sanction standards we adopted there. If we have decided not to follow the federal Rule 11 guidelines or standards, we should say so.

Imber and Smith, JJ., join this dissent.


source: Caselaw Access Project

author: David Newbern, Justice.

license: Public Domain

text:
    Randall Mark SHOCHET v. ARKANSAS BOARD of LAW EXAMINERS
    98-369
    979 S.W.2d 888
    Supreme Court of Arkansas
    Opinion delivered November 19, 1998

      Appellant, pro se.

      W. Frank Morledge, P.A., for appellee.
   David Newbern, Justice.

This is an appeal from a decision of the Arkansas Board of Law Examiners denying the application of appellant Randall Mark Shochet for admission to the Bar of this Court. Mr. Shochet has completed the necessary educational requirements, and he passed the Arkansas Bar Examination in July 1996. The Board determined, however, that Mr. Shochet failed to establish “good moral character beyond a preponderance of the evidence,” as required by Rule XIII of the Rules Governing Admission to the Bar, and denied his application on that basis. Mr. Shochet argues on appeal that the Board’s findings and conclusions underlying its decision are clearly erroneous. We affirm the Board’s decision.

Mr. Shochet attended dental school in Florida after completing his undergraduate studies in 1981. He later moved to Missouri, where, in 1986, he obtained a license to practice dentistry. In 1990, the Missouri Dental Board filed a complaint before a state administrative agency claiming that Mr. Shochet, in 1988 and 1989, had billed an insurance company for dental services he had not rendered. The Dental Board also claimed that Mr. Shochet had provided its officials with false information during their investigation of the matter and that he had committed perjury while testifying before the Dental Board.

Mr. Shochet enrolled in the St. Louis University School of Law in August 1991. In February 1992, Mr. Shochet and the Missouri Dental Board resolved the matter described above. The Dental Board abandoned its pegury charge, and Mr. Shochet admitted he had billed an insurance company for services he had not rendered. Mr. Shochet accepted a 120-day suspension of his dentist’s license commencing April 1, 1992, and running through July 29, 1992.

In March 1992, prior to the commencement of the suspension period, Mr. Shochet entered into an agreement with Dr. Glenn D. Yowell providing for Dr. Yowell to assume Dr. Shochet’s dentistry practice. The agreement provided as follows:

Dr. Shochet agrees to furnish the dental facility located at [address given], including all equipment, instruments, and supplies to Dr. Yowell in exchange for an amount to be mutually agreed upon.
Such reimbursal will not be measured against patient fees and billings, and is not “fee splitting.” It is only based on the usage of the dental office.
Dr. Yowell is to provide his own professional liability insurance.
Our relationship may be terminated on either side by either giving the other three (3) weeks notice of their intention to terminate.

Mr. Shochet and Dr. Yowell signed a separate document — a letter dated March 9, 1992, and written by Mr. Shochet — that reflected further details of their arrangement. Mr. Shochet referred to Dr. Yowell as “an independent contractor Dentist” and indicated that Dr. Yowell was to “perform dental services on our patients at our office by appointments set by us Monday thru Friday or to be amended by mutual agreement.” The letter revealed that Mr. Shochet would pay Dr. Yowell “the sum equal to 25% of the collections made for [his] billable services.” Mr. Shochet “guaranteed” Dr. Yowell “a minimum of $3000 a month.”

Mr. Shochet returned to his dentistry practice at the conclusion of the suspension period. He completed a Uniform Application for Securities Industry Registration or Transfer in April 1993 and was issued a Series 7 Securities License. Mr. Shochet sold his dental practice and, in August 1993, returned to Florida, where he worked for his father’s securities business.

In November 1993, the Missouri Dental Board filed a second complaint against Mr. Shochet alleging that he had practiced dentistry during the period in which his license was suspended. The Dental Board referred to the agreement between Mr. Shochet and Dr. Yowell. It alleged that payments from patients or third parties received for work done by Dr. Yowell and a Dr. Rivera had been “deposited into a bank account which was in the name of [Mr. Shochet]”; that Dr. Yowell had been paid for his services pursuant to the agreement; and that Mr. Shochet had submitted claim forms to insurance companies and had received payment for dental work rendered during the suspended period. The Dental Board alleged that Mr. Shochet’s conduct violated regulatory provisions that prohibit a suspended dentist “from receiving any compensation from any person, group practice, partnership or corporate practice, or any dental office in this state, during the period of suspension or revocation” and from accepting “fees from any capitation or third party payment program to which he might otherwise be entitled.”

Mr. Shochet resumed his legal education at the University of Miami at Coral Gables School of Law in January 1994. In October 1994, Mr. Shochet and the Missouri Dental Board resolved the matter of his alleged practice upon a suspended license. Mr. Shochet admitted the Dental Board’s allegations and surrendered his Missouri dentistry license. In December 1995, Mr. Shochet completed law school and earned his Juris Doctor degree.

On May 31, 1996, Mr. Shochet applied for admission to the Bar of this Court. Mr. Shochet was allowed to take the July 1996 bar examination subject to a continuing character and fitness investigation in the event that he passed the examination, which he did. The chairman of the Board of Law Examiners was unable to determine Mr. Shochet’s eligibility, and Mr. Shochet appeared pro se at a hearing before three members of the Board and the Board’s executive secretary.

By a vote of 10-1, the Board determined that Mr. Shochet failed to establish by a preponderance of the evidence that he possessed “good moral character” and, for that reason, denied his application for admission. The Board based its conclusion on (1) the facts surrounding the suspension and surrender of Mr. Shochet’s Missouri dentist’s license and his explanation of that situation to the Board during the hearing; (2) Mr. Shochet’s responses to questions on both the Arkansas Bar Application Character Questionnaire and the application for the Series 7 Securities License, as well as his explanation of those responses made during the hearing; and (3) evidence that, in the Board’s view, demonstrated Mr. Shochet’s lack of “fiscal responsibility.” Mr. Shochet now seeks reversal of the Board’s decision and maintains that he “established sufficient good moral character” and should be admitted to the Bar of this Court.

“The applicant has the burden of proving eligibility and must do so by a preponderance of the evidence.” Partin v. Bar, 320 Ark. 37, 41, 894 S.W.2d 906, 908 (1995). See Rule XIII of the Rules Governing Admission to the Bar. “We review bar admission and reinstatement cases de novo, and we will not reverse the findings of fact of the Board unless they are clearly erroneous.” Partin v. Bar, supra. See In re Application of Crossley, 310 Ark. 435, 441, 839 S.W.2d 1, 3 (1992). We hold that the Board’s findings are not clearly erroneous and affirm its decision denying Mr. Shochet’s application for admission.

1. The Missouri dental license

The Board’s decision rested in part on its factual findings concerning the suspension and surrender of Mr. Shochet’s Missouri dentist’s license. As mentioned, Mr. Shochet was suspended from the practice of dentistry in Missouri based on his admission to having billed an insurance company for services not rendered. Mr. Shochet admitted his culpability as to that allegation during the hearing, and, although the Missouri Dental Board had dropped its pegury charge, Mr. Shochet further admitted in the hearing that he had indeed committed pegury before the Missouri Dental Board. The Board found that Mr. Shochet “knowingly engaged in fraud and misrepresentation by billing for services not rendered during the period of 1988-1989. Further, the applicant resorted to perjury to thwart the investigative efforts of the Missouri Dental Board.”

Mr. Shochet later surrendered his dentist’s license following his admission that he had practiced dentistry during the period in which his license was suspended. During the hearing before the Board, however, Mr. Shochet maintained that he had done “nothing wrong” with respect to the unlicensed-practice charge. He conceded that, “legally,” he had engaged in the unlicensed practice of dentistry, but he asserted that his actions were based upon the advice of counsel. Mr. Shochet testified that he chose to admit to the Missouri Dental Board’s allegations and surrender his dentist’s license only because (1) he wanted to foreclose the possibility of having his license revoked, which he perceived as a more severe sanction; (2) he lacked the financial resources to defend the charge; and (3) he saw no “purpose” in defending the charge because he was living in Florida and attending law school there, he did not intend to use his Missouri dentist’s license again, and he planned to pursue a legal and dentistry practice in Florida.

The Board found that Mr. Shochet

now denies responsibility for practicing dentistry while his license was suspended. He avers that his actions were based upon advice from his attorneys. He also suggests that his admission of culpability was a matter of expediency and convenience.
The record shows that on January 15, 1992, prior to the beginning of the suspension period, the applicant’s attorney set forth the circumstances under which the applicant could “rent” his office during the period of suspension. That letter made clear that the suspension prohibited the applicant from drawing any income from patients.
By letter of March 9, 1992, the applicant, apparently without assistance of legal counsel, entered into an agreement with Dr. Glenn D. Yowell. Through the agreement with Dr. Yowell, he (the applicant) would control appointments, billing and equipment, etc. Any sums collected which exceeded Dr. Yowell’s 25% and office expenses would flow as income to the applicant.
The applicant associated Dr. Yowell as an “independent contractor” to continue receipt of patient income, contrary to the terms of his license suspension. Further, a majority of the Board gives little weight to the applicant’s protestations that his arrangement with Dr. Yowell was based upon legal advice and that his admission of culpability was solely to avoid further litigation.

We cannot say that these findings of the Board of Law Examiners are clearly erroneous. Mr. Shochet admitted that he committed insurance fraud and peijury, and the Board properly considered this past misconduct in determining whether Mr. Shochet’s possessed “good moral character.”

It also was appropriate for the Board to take into account Mr. Shochet’s practice of dentistry on a suspended license — misconduct that Mr. Shochet acknowledged in administrative proceedings in Missouri. In the hearing before the Arkansas Board of Law Examiners, however, Mr. Shochet denied responsibility for his misconduct. He asserted that his counsel had approved his plans for the operation of his dentist’s office during the suspension period, and he suggested that his admission to the unlicensed-practice charge was motivated, in the words of the Board, only by “expediency and convenience.”

The Board obviously found Mr. Shochet’s explanation disingenuous. It determined that Mr. Shochet was unable “to accept responsibility for his actions,” and we cannot say that determination was clearly erroneous.

Nor is the Board’s finding on this point contrary to the rule established in Florida Board of Bar Examiners re G.J.G., 709 So.2d 1377 (Fla. 1998); Florida Board of Bar Examiners re M.C.A., 650 So.2d 34 (Fla. 1995); and Martin B. v. Committee of Bar Examiners, 661 P.2d 160 (Cal. 1983), which are cited by Mr. Shochet. According to those cases, an applicant should not be denied admission on account of his or her assertion of innocence regarding a charge of past misconduct where the applicant has not been found “guilty” of the charge and has consistently maintained his or her innocence with respect to it.

Those cases do not assist Mr. Shochet here. Mr. Shochet has not consistently maintained his innocence with respect to the unlicensed-practice charge. He admitted the truth of the charge in proceedings before a Missouri agency and agreed to surrender his dentist’s license. In the hearing before the Board of Law Examiners, however, Mr. Shochet changed his story, blamed his former attorneys, and essentially attempted to retract his prior admission of guilt. We find nothing in the cases cited by Mr. Shochet that precluded the Board from concluding, on the basis of Mr. Shochet’s testimony, that he failed to accept responsibility for past misconduct that he previously acknowledged and for which he was sanctioned. An applicant’s “continued denial” of an act for which he or she has been found guilty or sanctioned “does not serve the applicant well” in bar-admission proceedings and is, in fact, “unacceptable.” Florida Board of Bar Examiners re G.J.G., 709 So.2d at 1381.

2. Candor

The effect of Mr. Shochet’s unlicensed practice of dentistry upon his bar application, and perhaps the effect of his commission of insurance fraud and perjury, might have been diminished had Mr. Shochet shown that he had undergone “successful rehabilitative efforts.” Partin v. Bar, 320 Ark. at 45, 894 S.W.2d at 910. As the Supreme Court of New Jersey observed,

[a] fundamental rule in bar admission cases is that evidence of reform and rehabilitation is relevant to determine an applicant’s present fitness to practice law. If an applicant’s behavior subsequent to the disqualifying misconduct convincingly demonstrates rehabilitation, it can overcome the adverse inference of unfitness arising from past misconduct, and if persuasive, it may support a finding of present fitness.

Application of Jenkins, 94 N.J. 458, 467 A.2d 1084, 1091 (1983).

As we said in the Partin case, however, an important aspect of “rehabilitation” is an applicant’s “candor about the past.” Partin v. Bar, supra. See also Application of Jenkins, 467 A.2d at 1091 (stating that “[o]ne particularly relevant type” of evidence that is “probative of reform and rehabilitation” is “candor before the Committee”).

On the “candor” issue, the Board found that Mr. Shochet had given false, misleading, or incomplete answers on his May 1996 Arkansas Bar Application Character Questionnaire and on his April 1993 application for a Series 7 Securities License. As we cannot say the Board’s findings on this point are clearly erroneous, those findings not only supply an independent basis for the Board’s decision to deny Mr. Shochet’s application but also demonstrate that Mr. Shochet has not rehabilitated himself since the period of time in which he defrauded an insurance company, peijured himself before a state agency, and practiced dentistry on a suspended license.

The Board found that Mr. Shochet was asked in Question 9(c) of the Arkansas Bar Application Character Questionnaire whether he had ever been accused of fraud. Although it is undisputed that the Missouri Dental Board had accused Mr. Shochet of insurance fraud and that Mr. Shochet had admitted to that misconduct, he answered “no” to Question 9(c). Mr. Shochet testified that, in consultation with counsel, he answered “no” to Question 9(c) because he concluded that the insurance-fraud matter was addressed in his answer to Question 15(d), which inquired whether a licensing authority had ever taken any disciplinary action against Mr. Shochet. Mr. Shochet admitted, however, that it would have been “better” to have responded “yes” to Question 9(c).

The Board also found that Mr. Shochet was asked in Question 15(a) of the Arkansas Bar Application Character Questionnaire whether he had “ever applied for a license, other than as an attorney at law, the procurement of which required proof of good moral character or examination (i.e., certified public accountant, patent attorney, real estate broker, etc.).” Although Mr. Shochet had applied for, and received, a Series 7 Securities License, and although that process required proof of “good moral character,” Mr. Shochet failed to disclose the Series 7 Securities License in his answer to Question 15(a). In the hearing, Mr. Shochet acknowledged that he had failed to list the securities license, expressed regret for the omission, and said that he had “no excuse.” He then sought to justify his incomplete answer, however, by arguing that he was not really a “stockbroker.”

Finally, the Board found that, in his application for the Series 7 Securities License, Mr. Shochet was asked whether any federal or state regulatory agency or foreign financial regulatory authority had ever found him to “have made a false statement or omission or been dishonest, unfair, or unethical.” Again, although Mr. Shochet had admitted to the charge of insurance fraud filed by the Missouri Dental Board, he answered “no” to this question. He testified before the Board that his answer had resulted from “advice of counsel” and his misunderstanding of a “poorly worded question.”

The Board found that Mr. Shochet’s

responses to the various inquiries noted above [evince] a pattern of less than full disclosure to the Arkansas Board of Law Examiners and the Securities Licensing Authority. The applicant again attempts to shift responsibility either to “advice of counsel” or his misunderstanding of poorly worded questions.

The Board later concluded that Mr. Shochet

has engaged in false and deceptive practices in completing the various applications for professional licenses. The instances where the applicant either chose to mislead or failed to fully inform are numerous. The initial willful fraud arose in connection with the first proceeding brought by the Missouri Dental Board in 1990. The record shows that the applicant has continued to engage in behavior which brings into question the applicant’s ability to accept responsibility for his actions and his capacity for truthfulness and candor.

Truthfulness, honesty, and candor are “necessary characteristics for establishing a candidate’s good moral character and hence his or her fitness to practice law.” Application of Jenkins, 467 A.2d at 1088. There simply is “no place in the law for a man or woman who cannot or will not tell the truth, even when his or her own interests are involved. In the legal profession, there must be a reverence for the truth.” Id. at 1091 (quoting In re Hyra, 15 N.J. 252, 104 A.2d 609 (1954)).

An applicant must “respond fully and accurately to those questions posed in an application for admission to the bar.” In re Ascher, 81 Ill.2d 485, 411 N.E.2d 1, 7 (1980). He or she has an “unremitting duty of candor to all persons charged with investigating and passing upon” his or her qualifications. Kosseff v. Board of Bar Examiners, 475 A.2d 349, 353 (Del. 1984). “Moreover, the attributes of honesty and candor are absolute prerequisites to the admission to our Bar.” Id. (emphasis added). See also In re Green, 464 A.2d 881 (Del. 1983); In re Beasley, 243 Ga. 134, 252 S.E.2d 615 (1979); Application of Walker, 112 Ariz. 134, 539 P.2d 891 (1975); In re Willis, 215 S.E.2d 771 (N.C. 1975). See Charles W. Wolfram, Modern Legal Ethics § 15.3.2, at p. 863 (1986).

Here, the Board found that Mr. Shochet was less than candid in his responses to two questions on the Arkansas Bar Application Character Questionnaire and one question on his application for a Series 7 Securities License. We cannot say the Board’s findings are clearly erroneous. Mr. Shochet offered explanations for his answers, but we cannot say that the Board erred by finding that his explanations were not credible, as it apparently did.

The Board’s decision to deny Mr. Shochet’s application for admission was justified on the basis of Mr. Shochet’s misconduct in his dentistry practice in Missouri; his failure to accept responsibility for certain aspects of that misconduct; his failure to show that he has “rehabilitated” himself since engaging in that misconduct; and his lack of candor in answering questions on applications for professional licenses. Because we affirm the Board’s decision on the basis of these factors, it is unnecessary to discuss the Board’s additional finding that Mr. Shochet displayed a lack of “fiscal responsibility.”

Affirmed.


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

text:
    STATE of Arkansas, ex rel., Harold (Butch) Sargent v. Jack LEWIS, Municipal Judge for Clinton, Arkansas
    98-316
    979 S.W.2d 894
    Supreme Court of Arkansas
    Opinion delivered November 19, 1998

      Harold (Butch) Sargent, for appellant.

      Stephen E. James, Deputy Prosecuting Att’y, for appellee.
   David Newbern, Justice.

Appellant Harold (“Butch”) Sargent ran for Sheriff of Van Buren County in 1966 and was defeated by Mike Bridges who was seeking reelection. Mr. Sargent accused Sheriff Bridges of having committed a misdemeanor by violating an election law. Mr. Sargent presented his case to Clinton Municipal Judge Jack Lewis and asked Judge Lewis to issue a warrant or summons to Sheriff Bridges. Judge Lewis refused, and Mr. Sargent petitioned the Van Burén Circuit Court for a writ of mandamus to compel Judge Lewis to issue a warrant or summons. Mr. Sargent appeals from the denial of that petition. We agree with the Circuit Court’s conclusion that the statute pursuant to which Mr. Sargent complains does not make the act of which he complains a criminal violation; thus, we affirm the denial of the writ.

As it appeared in 1996, Ark. Code Ann. § 7-5-211(a) (Repl. 1993) provided that the county board of election commissioners was to deliver ballots and other election supplies to the sheriff. Section 7-5-211(b) stated:

(b) If the sheriff is a candidate for reelection in a contested race, it shall be the duty of the county board of election commissioners to appoint some suitable person or persons in each precinct to perform the duties of the sheriff. The sheriff and his deputies are disqualified to discharge those duties in such case.

Arkansas Code Ann. § 7-1-103(28) provides: “Any violation of this act not covered by this section and § 7-1-104 shall be considered a misdemeanor and shall be punishable as such.” Both § 7-5-21(b) and § 7-1-103(28) appeared in Act 465 of 1969.

In his mandamus petition, Mr. Sargent stated that on April 24, 1997, he filed an affidavit and complaint with attached supporting affidavits and an investigative report with Judge Lewis in which he alleged that on November 5, 1996, Sheriff Bridges, a candidate for reelection in a contested race, transported voting ballots from the printer to Union Precinct in Shirley, and to the Sheriff of Election, Glen Williams, in violation of § 7-5-211(b). Mr. Sargent stated that he attached the affidavits of Maurice Bonds Whillock, County and Circuit Clerk and Ex-Officio Recorder, and Glen Williams, polling election sheriff, to his complaint. According to Mr. Sargent, Judge Lewis stated that he would not issue a summons or warrant because he did not believe that there was probable cause to believe that Sheriff Bridges had committed a crime.

The affidavit of Glen Williams stated that on November 5, 1996, he called County Clerk Ricky Whillock from the polling place in Shirley seeking additional ballots. He also stated that, late that day, Sheriff Bridges delivered blank general election voting ballots to him.

The affidavit of Maurice Bonds Whillock stated that he received a telephone call from Glenn Williams who advised him that he was running out of ballots. Mr. Whillock stated that he called the Sheriffs Office to obtain the services of a deputy to travel to the print shop, pick up the extra ballots, and deliver them to Shirley. Mr. Whillock stated that, while he was on the telephone, Sheriff Bridges came into his office and that he asked Sheriff Bridges to deliver the ballots to Union Precinct in Shirley. He stated that Sheriff Bridges agreed to do so.

Following a hearing, the Circuit court dismissed the petition and held that the finding of probable cause by a magistrate to issue a summons or warrant is a discretionary act and that mandamus does not lie to compel a discretionary act. The Court also held that § 7-5-211(b) does not impose criminal liability but merely disqualifies a county sheriff who is running for reelection in a contested race from performing the duty of carrying ballots, and thus Ark. Code Ann. § 7-1-103(28), the statute making a “violation” of Act 465 a misdemeanor, does not apply.

The basic rule of statutory construction to which all other interpretive guides must yield is to give effect to the intent of the legislature. Tigue v. State, 319 Ark. 147, 889 S.W.2d 760 (1994). Penal statutes are stricdy construed with all doubts resolved in favor of the defendant, and nothing is taken as intended which is not clearly expressed. Id.

Arkansas Code Ann. § 7-5-211(a), as it appeared in 1996, was an administrative provision stating the manner in which election supplies were to be delivered by election commissioners to the sheriff, presumably for further delivery to the officials presiding at the various precincts in the counties. The language of § 7-5-211(b) requires election commissioners to appoint suitable persons to perform those duties and then states the reason, noting that the sheriff running for reelection in a contested election is “disqualified” from carrying out duties that would otherwise be assigned pursuant to § 7-5-211(a). It does not specifically prohibit any act on the part of the sheriff.

Because we agree that the language in § 7-5-21 (b) does not demonstrate an intent on the part of the General Assembly to criminalize the conduct alleged, and thus the issuance of a summons or warrant by Judge Lewis based on that conduct would have been fiuidess if not improper, we affirm the Circuit Court’s refusal to issue a writ of mandamus to Judge Lewis.

Affirmed.

Brown, J., concurs.

Glaze, J., dissents.

Robert L. Brown, Justice,

concurring. I agree with Justice Glaze’s analysis in his dissent that a violation of Ark. Code Ann. § 7-5-211 (Supp. 1997) may constitute a misdemeanor. I would affirm, however, for the reason that a municipal judge must be satisfied that there are reasonable grounds for arrest. Ark. R. Crim. P. 7.1(b); Ark. Code Ann. § 16-81-104(a)(2) (1987). Here, the municipal judge was not so satisfied. Mandamus does not lie to control judgment calls by a magistrate such as we have in this case. For that reason, I concur in the result.

Tom Glaze, Justice,

dissenting. The court is clearly wrong when it concludes a violation of Ark. Code Ann. § 7-5-211(b) of the Arkansas Election Code is not a misdemeanor. Ark. Code provision § 7-l-103(a) (Supp. 1997) fists twenty-three specific examples of the more serious misdemeanors that could arise during the preparation for and conduct of an election. Then § 7-l-103(b)(l) of the same section provides further as follows:

Any violation of “this act” not covered by this section . . . shall be considered a Class A misdemeanor .... (Emphasis added.)

The phrase “this act” refers to Act 465 of 1969, and specifically includes codified sections 7-1-103 and 7-5-211. See Arkansas Code Revision Commission Notes at § 7-1-101 (Repl. 1993) and (Supp. 1997); § 7-4-108 and § 7-5-210 (Repl. 1993).

The foregoing is all there is to this case. If a sheriff has a contested race for reelection and knowingly violates § 7-5-211, he is subject to being found a misdemeanant. Providing for such a misdemeanor violation is to avoid the possibility that an incumbent sheriff would influence voters at the polling precinct. Obviously, an incumbent sheriffs opponent and his or her supporters are helpless to stop such an illegal practice on the day of the election unless there is a criminal sanction to which that person may resort. Certainly, the opposing candidate has no civil remedy on election day to correct such a law violation. Even mandamus and declaratory judgment relief cannot be obtained in time to remedy such election violations.

The majority court’s decision gives a mischievous incumbent candidate or election official the “green fight” to violate election procedures, and no meaningful remedy is available to a voter, opposing candidate, or supporter to stop it unless it happens to be a violation that is specifically fisted under § 7-1-103. Section 7-1-103(b)(1) was enacted to assure some sanction is available to guard against those few officials who willfully choose to ignore their responsibilities under the general election code laws.

       The compiler sets out approximately 152 other sections containing election duties candidates or election officials must perform during an election as included in the definition of “this act.”


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

text:
    Anthony Easton MOYA v. STATE of Arkansas
    CR 98-529
    981 S.W.2d 521
    Supreme Court of Arkansas
    Opinion delivered November 19, 1998

      John Wesley Hall, Jr., for appellant.

      Winston Bryant, Att’y Gen., by: C. Joseph Cordi, Jr., Ass’t Att’y Gen., for appellee.
   Donald L. Corbin, Justice.

This case involves the validity of a search warrant. Appellant Anthony Easton Moya appeals the judgment of the Miller County Circuit Court denying his motion to suppress evidence obtained with the search warrant. Appellant argues on appeal that the trial court erred in denying his motion to suppress, because the affidavit and warrant did not describe with particularity the place to be searched. He also argues that the State is barred from raising a good-faith defense to the search warrant on appeal, because it failed to give notice of such defense to Appellant during the proceedings below. This appeal was certified to us from the Arkansas Court of Appeals, as it presents issues requiring further development of the law and this court’s rules of criminal procedure. Our jurisdiction is thus pursuant to Ark. Sup. Ct. R. l-2(d). We affirm.

The record reveals that on September 26, 1995, a United Parcel Service (UPS) package was shipped from Bakersfield, California, to Apartment 50 at the Smith-Keys Apartments in Texarkana. Prior to that date, UPS personnel in California noticed that the package was leaking, and they opened it. Inside the package was cocaine and a gun. This information was reported to the Bakersfield Police Department, who, in turn, reported to the Bi-State Narcotics Task Force in Texarkana. The task force then decided to make a controlled delivery of the package to the Smith-Keys Apartments, Apartment 50, with an undercover officer posing as the UPS deliveryman. The delivery occurred at approximately 11:30 a.m. The task force also decided to prepare a search warrant and supporting affidavit for Apartment 50 ahead of time so that it could be served simultaneously with the delivery of the package. Officers were positioned around the apartment complex to observe the delivery. Investigator Rick Hawkins of the Texarkana Police Department was the officer responsible for obtaining the search warrant.

Investigator Hawkins presented Circuit Judge Jim Hudson with the affidavit for the search warrant. Hawkins swore to the truth of the facts in the affidavit before Judge Hudson. The delivery of the package to Apartment 50 occurred at the same time that Hawkins was obtaining the search warrant for Apartment 50. After Judge Hudson signed the warrant, as Hawkins was leaving the judge’s office, a surveillance officer informed Hawkins via radio that the package had been moved to Apartment 51. According to Hawkins, he returned to Judge Hudson’s office and explained to him that the package had been moved to Apartment 51. After hearing Hawkins’s explanation, either Judge Hudson or Hawkins changed all but one of the references to Apartment “50“ in the search warrant and affidavit to Apartment “51.” Both Hawkins and Judge Hudson initialed the changes. No recorded testimony was taken from Hawkins, nor was any additional information written on the affidavit noting the change in circumstances. Hawkins then radioed to the officers on the scene that the warrant had been signed, thus authorizing a search of Apartment 51. The officers then searched Apartment 51, seizing the narcotics and the gun and arresting Appellant and another person.

Appellant filed a motion to suppress the evidence seized during the search of Apartment 51, and a hearing was held on February 2, 1998. The trial court denied the motion. Appellant then entered a conditional plea of guilty, pursuant to A.R.Cr.P. Rule 24.3, to the charge of possession of cocaine with intent to deliver and was sentenced to ten years in the Arkansas Department of Correction. He appeals the trial court’s ruling on the suppression motion. When we review a trial court’s denial of a motion to suppress evidence, we make an independent determination based on the totality of the circumstances, viewing the evidence in the light most favorable to the State, and reverse only if the trial court’s ruling was clearly against the preponderance of the evidence. Fultz v. State, 333 Ark. 586, 972 S.W.2d 222 (1998); Tabor v. State, 333 Ark. 429, 971 S.W.2d 227 (1998).

I. Validity of the Affidavit and Search Warrant

Appellant first argues that by changing the apartment numbers in the affidavit and warrant, the State thereby made the affidavit untrue and nullified the probable cause shown therein, in violation of the Fourth Amendment to the United States Constitution. He submits that the affidavit was originally written to reflect the correct information that the controlled delivery of the package would occur at Apartment 50, and that Ingrid Brown resided at Apartment 50. He contends that when the package was moved from Apartment 50 to 51, and the number “50” in the affidavit and warrant was changed to “51,” this created a false statement that the controlled delivery occurred at Apartment 51 and that Ingrid Brown was the resident of Apartment 51. He contends further that the failure to make a written record of the reasons for making the changes in the affidavit and warrant constituted a substantial violation of A.R.Cr.P. Rule 13.1(c), and that, as such, the trial court should not have permitted any testimony during the suppression hearing about the change in circumstances.

The State contends that the search is valid because the executing officers acted with an objective good-faith reliance upon Judge Hudson’s having issued the warrant, pursuant to the holding in United States v. Leon, 468 U.S. 897 (1984). Appellant argues that the officers’ actions cannot be upheld under the Leon good-faith standard, and that, in any event, the State is procedurally barred from benefitting from this defense, as the prosecutor failed to give Appellant prior notice that the State would rely on that defense.

Appellant is correct in his assertion that Rule 13.1(c) requires the recordation of oral, sworn testimony given in support of an affidavit for search warrant. In Jackson v. State, 291 Ark. 98, 722 S.W.2d 831 (1987), this court was faced with a situation wherein a confidential informant gave sworn, recorded testimony to the magistrate in support of a search warrant, but the State refused to disclose the testimony because the prosecutor did not want to reveal the informant’s identity. Holding that the sufficiency of the application for search warrant must be decided solely on the information contained in the written affidavit, this court explained:

A.R.Cr.P. Rule 13.1(c) requires recordation of such oral testimony. The purposes of such a rule are to facilitate subsequent review for the existence of probable cause and to avoid the possibility of justification for a search becoming based upon facts or evidence discovered in the course of execution of the warrant, and, in the event the probable cause is based upon hearsay, explaining the reliability of the informant. These considerations are particularly appropriate for the review of ex parte proceedings involving the valued right of privacy. They also serve to minimize the necessity of calling issuing magistrates to prove what can easily be documented. State v. Russell, 293 Or. 469, 650 P.2d 79 (1982); 2 W. LaFave, Search and Seizure 4.3(b) (1978). Because the state refused to disclose the recorded oral testimony, the very purposes of the rule were defeated, and we will not consider that testimony in deciding this case.

Id. at 99-100, 722 S.W.2d at 832. Similarly, in Hall v. State, 302 Ark. 341, 789 S.W.2d 456 (1990), this court held that because Rule 13.1(c) requires the recordation of oral testimony, this court does not consider unrecorded testimony.

In Lunsford v. State, 262 Ark. 1, 552 S.W.2d 646 (1977), this court held that it was the State’s burden to establish that a search warrant relied upon by its officers was issued in compliance with the law by producing the required written evidence relied upon by the issuing magistrate as establishing probable cause. See also Davis v. State, 293 Ark. 472, 739 S.W.2d 150 (1987). This court went on to state:

Since the state did not produce sufficient evidence to show that there was probable cause for the issuance of the warrant, the motion to suppress should have been granted. We consider the failure to record the testimony on which a search warrant is issued to be a substantial violation of proper safeguards in procedures for obtaining a search warrant.

Lunsford, 262 Ark. at 3, 552 S.W.2d at 647 (emphasis added). See also State v. Anderson, 286 Ark. 58, 688 S.W.2d 947 (1985), overruled on other grounds, Jackson, 291 Ark. 98, 722 S.W.2d 831. Appellant relies on this language from Lunsford in support of his argument that the failure to record Hawkins’s oral testimony, given after the warrant had been signed by Judge Hudson, is a substantial violation of our rules of criminal procedure as provided in A.R.Cr.P. Rule 16.2(e), and requires suppression of the evidence obtained in the search. Appellant’s assertion does not, however, resolve the issue on appeal regarding the officers’ good-faith reliance on the search warrant.

In Jackson, 291 Ark. 98, 722 S.W.2d 831, this court concluded that the written affidavit was deficient in that it did not provide the issuing magistrate any particular facts bearing on the informant’s reliability pursuant to Rule 13.1(b). Having already concluded that the sworn, oral testimony given by the informant to the magistrate was not to be considered, this court nonetheless upheld the search on the basis that the officers had acted with an objective good-faith reliance on the validity of the search warrant. This court held that because there was a written affidavit in support of the search warrant, the good-faith exception to the exclusionary rule established in Leon, 468 U.S. 897, was applicable, as the officer who executed the warrant had acted in good faith. The Jackson court distinguished the situation there from that presented in Anderson, 286 Ark. 58, 688 S.W.2d 947, where this court re&sed to apply the Leon good-faith exception because there was no written affidavit in support of the search warrant — only ««recorded oral testimony.

Recently, in Sims v. State, 333 Ark. 405, 969 S.W.2d 657 (1998), we expanded upon the reasoning employed in Jackson, 291 Ark. 98, 722 S.W.2d 831. In Sims, we were presented with a similar factual situation. There, California authorities intercepted a Federal Express package addressed to the residence of the appellant Sims. The Arkansas officers then planned to do a controlled delivery of the package to Sims’s residence. As part of the planned controlled delivery, Officer Clemmons prepared an affidavit for a search warrant and presented it to the municipal judge. In the affidavit, Clemmons inaccurately stated that the package was delivered to Sims, when in reality the package had not yet been delivered. In affirming the trial court’s denial of Sims’s motion to suppress the evidence, we pointed out that the municipal judge was aware that the package had not been delivered at the time he signed the warrant, as the Federal Express package was sitting on the judge’s desk when he reviewed the paperwork. Sims argued that because Clemmons’s statements regarding the delivery of the package were untrue, no accurate showing of probable cause was shown to exist upon which the judge could issue a warrant. We held:

Unquestionably, the affidavit and search warrant presented to Judge O’Bryan contained untrue statements since no delivery had been made at the time Officer Clemmons requested a warrant from the judge. Obviously, if probable cause and the issuance of a warrant were dependent on information showing that contraband had previously been delivered to Sims’s residence, the judge’s issuance of the warrant and the execution of the warrant were invalid. However, even if the warrant is defective, as argued by Sims, we conclude the contraband evidence was still admissible because the officers executing the warrant did so in good faith.

Id. at 409, 969 S.W.2d at 659 (emphasis added) (citing Leon, 468 U.S. 897, and United States v. Livesay, 983 F.2d 135 (8th Cir. 1993)).

In Sims, we applied the Supreme Court’s holding in Leon that the Fourth Amendment exclusionary rule should not be applied to bar the use of the prosecution’s evidence obtained by officers acting in reasonable reliance on a search warrant issued by a detached and neutral magistrate, but ultimately found to be invalid. We acknowledged, however, that suppression remains an appropriate remedy if the magistrate or judge issuing the warrant was misled by information in an affidavit that the affiant knew was false or would have known was false except for his or her reckless disregard of the truth. Id. (citing Leon, 468 U.S. 897; Franks v. Delaware, 438 U.S. 154 (1978)). We then concluded:

Although we may not look to facts outside of an affidavit to determine probable cause, when assessing good faith, we can and must look to the totality of the circumstances, including what the affiant knew, but did not include in his affidavit.

Id. at 410, 969 S.W.2d at 660 (emphasis added) (citing United States v. Martin, 833 F.2d 752 (8th Cir. 1987), cert. denied, 494 U.S. 1070 (1990)). See also United States v. Chambers, 987 F.2d 1331 (8th Cir. 1993) (holding that when viewing the totality of the circumstances to assess an officer’s good faith, it is appropriate to consider information that the officer knew, but did not include in his or her affidavit).

In Martin, 833 F.2d 752, the Eighth Circuit relied in part on the Supreme Court’s holding in Anderson v. Creighton, 483 U.S. 635 (1987), wherein the Court observed that “the determination whether it was objectively legally reasonable to conclude that a given search was supported by probable cause or exigent circumstances will often require examination of the information possessed by the searching officials.” 833 F.2d at 756 (quoting Anderson, 483 U.S. at 641). This holding is consistent with the Court’s holding in Leon, 468 U.S. 897, that “all the circumstances” may be considered in determining “the objectively ascertainable question whether a reasonably well trained officer would have known that the search was illegal despite the magistrate’s authorization.” 468 U.S. at 922-23, n. 23. See also United States v. Bowling, 900 F.2d 926 (6th Cir.), cert. denied, 498 U.S. 837 (1990).

Similarly, in United States v. Curry, 911 F.2d 72, 78 (8th Cir. 1990), cert. denied, 498 U.S. 1094 (1991), the court held that “in assessing whether reliance on a search warrant was objectively reasonable under the totality of the circumstances, it is appropriate to take into account the knowledge that an officer in the searching officer’s position would have possessed.” Moreover, in United States v. Simpkins, 914 F.2d 1054 (8th Cir. 1990), cert. denied, 498 U.S. 1101 (1991), the court indicated that in assessing the officers’ good faith, it was appropriate to consider information known to the officers, even if that information was not presented to the issuing judge. See also United States v. Johnson, 78 F.3d 1258 (8th Cir. 1996).

The foregoing cases demonstrate that unrecorded oral testimony may not be considered, by the trial court or appellate courts, when determining whether there was sufficient probable cause to issue a search warrant. Where there is neither a written affidavit nor sworn, recorded testimony in support of a search warrant, this court will not apply the good-faith exception to uphold the search warrant. Where, however, there is a written affidavit in support of the search warrant that later is ruled deficient, this court will go beyond the four corners of the affidavit and consider unrecorded oral testimony to determine whether the officers executing the search warrant did so in objective good-faith reliance on the judge’s having found probable cause to issue the search warrant. Moreover, this court may also consider information known to the executing officers that may or may not have been communicated to the issuing judge.

Here, several witnesses testified to the antecedent circumstances involving the removal of the package from Apartment 50, where it had been delivered, to Apartment 51. Investigator Hawkins testified that after Judge Hudson signed the warrant, just as he was leaving the judge’s office, he received a radio communication from Captain Sharp informing him that there had been a change in circumstances. He stated that the lookout officer had advised that just as the UPS driver was leaving, Appellant and another person had picked up the package from Apartment 50 and immediately took it upstairs to Apartment 51. He stated that he again approached Judge Hudson and explained the situation to him, and that the two of them amended the search warrant, marking through the references to Apartment 50 and inserting the number 51 in their places. Hawkins’s testimony was supported by Officer Coy Murray of the Texarkana Police Department.

Officer Murray testified that he was present at the Smith-Keys Apartments on September 26, 1995, and that it was his job to watch the building where Apartment 50 was located. He stated that he observed the delivery of the package to Apartment 50, and that he saw a female go to the door of Apartment 50, and that Appellant was standing on the steps leading to the apartments on the upper level of the building. The female brought the package out of Apartment 50 and set it at Appellant’s feet. Appellant looked at the package and picked it up while he and the female looked at it, sort of investigating the package. Appellant and the female then went upstairs to Apartment 51. Murray stated that when he saw them take the package to Apartment 51, he notified the other officers that the package had moved from Apartment 50 to Apartment 51. Murray stated that he notified Captain Sharp of this development.

Judge Hudson testified that Investigator Hawkins indicated to him that he had word from the police officers at the scene that the number of the apartment in the proposed affidavit was incorrect, and that it should have been Apartment 51. He stated that he was unsure whether Hawkins had actually told him that the package had moved, but that it could have happened that way. He stated that Hawkins made the changes to the affidavit and warrant in his presence and that both he and Hawkins initialed the changes. Judge Hudson stated that at the time he signed the affidavit, whether the incidents alleged in the affidavit actually applied to Apartment 50 or Apartment 51, those facts would have led him to believe that there was probable cause to search the residence. He stated that he did not at any time tell Hawkins that he did not believe there was probable cause contained in the search warrant.

The foregoing testimony establishes that the officers had prepared a valid anticipatory search warrant for Apartment 50, but before they could execute the warrant, the circumstances changed when the package containing the contraband was immediately moved to Apartment 51. This change of circumstances was communicated to the officer who had prepared the affidavit and warrant, and he, in turn, informed the issuing judge of the change. This is not a situation where false information was given to the issuing judge. To the contrary, once Investigator Hawkins, the affiant, became aware of the change in circumstances involving the removal of the package, he immediately informed Judge Hudson of this change. They then acted together to make the necessary corrections in the affidavit and warrant to reflect that Apartment 51 had become the apartment to be searched because it contained the contraband. Both Hawkins and Judge Hudson initialed the changes, and Hawkins left the judge’s office with what he reasonably perceived to be a valid search warrant.

To apply the exclusionary rule in this case would serve no useful purpose, as there is no police misconduct here to deter, nor is there any evidence that the judge was misled by false information. The fact that Hawkins immediately turned around and went back into the judge’s office and disclosed the change in circumstances demonstrates that he attempted to fully inform the judge as to the current state of events. We therefore conclude that the trial court’s denial of Appellant’s suppression motion was appropriate based on the officers’ objective good-faith reliance on the issuance of the search warrant by Judge Hudson.

We find no merit to Appellant’s argument that the State was required to notify the defense prior to the suppression hearing that it would rely on the good-faith exception established in Leon, 468 U.S. 897. The record demonstrates that the prosecutor did in fact argue the good-faith exception during the suppression hearing; however, even if that argument had not been raised below, it would not prevent this court from considering it on appeal. This court has repeatedly stated that we will affirm the trial court when it has reached the right decision, even if for the wrong reasons. See Bell v. State, 334 Ark. 285, 973 S.W.2d 806 (1998); Huggins v. State, 322 Ark. 70, 907 S.W.2d 697 (1995); Hagen v. State, 315 Ark. 20, 864 S.W.2d 856 (1993); Register v. State, 313 Ark. 426, 855 S.W.2d 320 (1993).

II. Rule 13.3(b)

Appellant lastly argues that the evidence should have been suppressed because the warrant was not present at the time of the search and because a copy of the warrant was not provided to the occupant in compliance with Rule 13.3(b). Other than Rule 13.3(b), Appellant cites no authority in support of this argument. The State first contends that because Appellant was not the lessor or even a resident of Apartment 51 (he was merely an overnight guest), he has no standing to make a challenge under Rule 13.3(b). The State also contends that any violation of Rule 13.3(b) was not substantial and did not prejudice Appellant’s case in any way. We agree.

Rule 13.3(b) provides that the executing officer shall give a copy of the warrant to the person in apparent control of the premises to be searched, before undertaking the search, except in certain circumstances not material in this case. See Baxter v. State, 262 Ark. 303, 556 S.W.2d 428 (1977). In Baxter, this court concluded that although the executing officer had not fully complied with the rule, it was clear from the record that a copy was furnished to the appellant and her attorney, and that the appellant was present when the warrant was executed and was afforded an opportunity to read the warrant. This court ultimately held that the officer’s omission to leave a copy with the appellant was not a substantial violation of the rule and thus did not constitute a ground for suppression under Rule 16.2.

Here, Appellant was present when the search was conducted, and both he and his attorney obviously received a copy of the search warrant, which permitted him to file a timely motion to suppress the evidence recovered with the warrant and to challenge the validity of the search in the trial court. As such, we conclude that the trial court’s ruling was correct, as any violation of Rule 13.3(b) was not substantial and did not warrant suppression of the evidence under Rule 16.2.

Moreover, Rule 13.3(b) provides that a copy of the warrant shall be furnished prior to undertaking the search unless the executing officer “has reasonable cause to believe that such action would endanger the successful execution of the warrant with all practicable safety, in which case he shall, as soon as is practicable, state his authority and purpose and furnish a copy of the warrant.” The testimony of the executing officers in this case demonstrates that there were exigent circumstances surrounding the search of Apartment 51 and the seizure of its occupants. Officer Chuck Wise testified that immediately upon entering the apartment, the first two officers through the door secured the first two suspects inside. Wise continued through the apartment where, upon hearing the toilet flush, he forced open the bathroom door only to discover Appellant standing or kneeling over the toilet flushing plastic bags containing the controlled substances. Investigator Hawkins testified that he served a copy of the warrant on Ingrid Brown that day, after taking her statement at the police station. Given the circumstances of the search, we conclude that the provisions of Rule 13.3(b) were complied with as soon as practicable.

Affirmed.

Newbern and Imber, JJ., dissent.

Annabelle Clinton Imber, Justice,

dissenting. I cannot subscribe to the majority’s application of the good-faith exception announced in United States v. Leon, 468 U.S. 897 (1984), to the facts in this case. Therefore, I must respectfully dissent.

This case is strikingly similar to the situation we recently addressed in Sims v. State, 333 Ark. 405, 969 S.W.2d 657 (1998). I dissented in Sims and I do so now for virtually identical reasons. In Sims, California authorities intercepted a Federal Express package addressed to Sims’s residence. The officer who prepared the affidavit for the search warrant knowingly averred in his affidavit that the package had been delivered and received by Sims, when in fact that package had not been delivered or received. Both the magistrate and the officer knew the package had not been delivered or received, yet a warrant was issued in spite of the fact that both the affidavit and warrant were patently false. The majority in Sims essentially held that an officer may knowingly present a false affidavit and obtain an invalid warrant so long as he discloses to the magistrate what will actually take place. The majority in Sims acknowledged that the officer and the magistrate knew that the affidavit and search warrant contained false statements. Nevertheless, the majority upheld the search under the good-faith exception because the officer and magistrate knew that no search would take place until after delivery. Such an outcome defied logic in Sims and it continues to defy logic in this case.

The majority opines that applying the exclusionary rule to this case would serve no useful purpose because no police misconduct occurred, and the judge was not misled by false information. The majority’s conclusion effectively ignores the fact that the amended affidavit was false. There is no doubt that the original affidavit would have established probable cause for a warrant to search Apartment 50. However, the affidavit as amended and initialed by Investigator Hawkins and Judge Hudson contained numerous misrepresentations. Specifically, Investigator Hawkins knowingly averred in the amended affidavit: 1) that Ingrid Brown resided at 3302 Washington Street, Apartment 51; 2) that the package containing the crack cocaine and a .380 caliber semiautomatic handgun had been addressed to Terry Jackson at 3302 Washington Street, Apartment 51; 3) that the package was delivered to Officer Todd Harness who kept it in his possession until he delivered it to 3302 Washington Street, Apartment 51; and 4) that the package was hand-delivered by Officer Harness to an occupant of 3302 Washington Street, Apartment 51. In fact, Investigator Hawkins knew that these averments were false because he knowingly averred in the original affidavit that Ingrid Brown resided at Apartment 50; that the package containing the crack cocaine and a .380 caliber semi-automatic handgun had been addressed to Terry Jackson at Apartment 50; that the package was delivered to Officer Harness who kept it in his possession until he delivered it to Apartment 50; and that the package was hand-delivered by Officer Harness to Apartment 50. All of Investigator Hawkins’s statements in the original affidavit were true, and, in fact, described how the events transpired up until the Appellant and another person picked up the package from Apartment 50 and took it to Apartment 51. Investigator Hawkins testified that he explained this change of circumstances to Judge Hudson. However, no affidavit or recorded testimony was given under oath to that effect, as required by Ark. R. Crim. P. 13.1(b). All we have is Investigator Hawkins’s amended affidavit which he knew was false.

Just as I did in Sims, supra, I again find the majority’s reliance on the good-faith exclusion of Leon, supra, to be misplaced. I believe we properly applied the Leon good-faith exclusion in Pyle v. State, 314 Ark. 165, 862 S.W.2d 823 (1993), where we stated that every fact in an affidavit need not necessarily be correct, but “must be truthful in the sense that the information put forth is believed or appropriately accepted by the affiant as true.” Id. (citing Franks v. Delaware, 438 U.S. 154 (1978)) (emphasis added). It simply cannot be maintained that Hawkins’s amended affidavit was truthful or that he believed it to be truthful.

Once again, under the majority’s approach, “an officer may knowingly present a false affidavit and obtain an invalid warrant, but so long as he tells the magistrate what will actually take place he has acted in good-faith when the warrant is eventually executed.” Sims, supra (Imber, J., dissenting). Such an outcome in this case is as illogical, unwise, and contrary to the law as it was in Sims. In attempting to find good faith, the majority in this case essentially reiterates the essence of the majority’s holding in Sims, supra, that a court may completely disregard a false affidavit to find a totally independent basis on which to hinge probable cause for a warrant that is wholly invalid.

For the above reasons, I must respectfully dissent.

Newberjst, J., joins in this dissent.

       The testimony of Investigator Hawkins and Judge Hudson reflects some confusion as to which one actually marked through the references to Apartment 50 and changed them to Apartment 51; however, it is clear that both initialed the changes.