Posted by: Andy Taylor | November 21, 2014

Were Your Arguments Made in Chambers Preserved for Appeal?

Arkansas Realtors Association v. Real Forms, LLC

Any attorney who has spent much time practicing in court knows that many arguments and rulings are made in chambers (and off the record).  The question, then, is how to preserve arguments made in chambers.  The Arkansas Supreme Court’s recent decision in Arkansas Realtors Association v. Real Forms, LLC provides some guidance. 2014 Ark. 385.  Although the opinion does not include a definitive method to preserve such arguments, the takeaway is that attorneys must find a way to make the argument on the record.

The facts of Arkansas Realtors Association are a bit complicated and have been simplified for purposes of this blog post.  In sum, the Arkansas Realtors Association (“ARA”) had been in a long-term contract with Robert Bodily to create desktop software that allowed ARA members to draft contracts electronically.  The ARA later entered into a contract with Real Forms, LLC (technically, it was a predecessor company) to create an online version of the software.  The two programs were apparently not compatible, so the ARA ultimately entered into a contract with Real Forms, LLC (“Real Forms”) to create both a desktop version and an online version of the software.

A number of disputes arose between the ARA and Real Forms, including disputes about the time of delivery, whether the software met the ARA’s needs, and regarding the fact that Real Forms had not obtained errors & omissions (E & O) insurance as required by the contract.  The ARA ultimately sent a notice of termination to Real Forms.  Real Forms sued the ARA, and the ARA filed a counterclaim.  The jury ultimately returned a verdict in favor of Real Forms for $150,000.

The ARA raised several points in its appeal, but for purposes of this blog post, the relevant point that was raised related to the ARA’s motions in limine.  Prior to trial, Real Forms filed two motions in limine (one to exclude lay-witness opinion testimony regarding whether the software was flawed, and another to exclude evidence of insurance), and the ARA filed three motions in limine (one to exclude evidence of Bodily’s contract with the ARA, one to exclude the interpretation of contract terms by a software development expert witness, and one to exclude evidence of the number of hours worked by the owners of Real Form.

On the first day of trial, the court held an off-the-record hearing in chambers regarding the motions in limine.  After returning from chambers, the court ruled on-the-record regarding the insurance motion in limine, but did not make any reference to any of the four remaining motions in limine at that time.

On appeal, the ARA argued that the circuit court had erred by not making a record prior to trial regarding the motions in limine.  The ARA relied on Administrative Order No. 4, which provides that, “[u]nless waived on the record by the parties, it shall be the duty of any circuit court to require that a verbatim record be made of all proceedings . . . pertaining to any contested matter before the court or the jury.”  The Arkansas Supreme Court has previously held that this rule is “mandatory,” and that a party’s silence on this issue does not constitute an implied waiver of this requirement. Thompson v. Guthrie, 373 Ark. 443, 447, 284 S.W.3d 455, 457 (2008)George v. State, 356 Ark. 345, 151 S.W.3d 770 (2004).  The Arkansas Supreme Court has also held, however, that the burden of bringing up a record sufficient to demonstrate error rests with the appellant. Hankins v. Dep’t of Fin. & Admin., 330 Ark. 492, 954 S.W.2d 259 (1997).

In this case, the Arkansas Supreme Court rejected the ARA’s argument that the case should be remanded to complete the record, holding that the ARA had not been prejudiced by the off-the-record discussion.  In reaching its conclusion, the Arkansas Supreme Court looked at each of the ARA’s three motions in limine individually.  With respect to the first motion in limine (to exclude evidence of Bodily’s contract with the ARA), there had been a sidebar (apparently on the record) regarding the Bodily contract and what counsel could and could not ask during testimony regarding that contract.  With respect to the second motion in limine (to exclude testimony from the software expert regarding contract terms), the circuit court had actually sustained the ARA’s objection to such testimony during that expert’s testimony.  With respect to the third motion in limine (to exclude the number of hours worked by the owners of the company), the ARA had never objected during trial when testimony was given on this point.

Based on this sequence of events, the Arkansas Supreme Court held that “given these specific circumstances, we adhere to our rule that Appellant was required to bring a record sufficient to demonstrate error, and we cannot say that Appellant was prejudiced by the circuit court’s failure to follow Administrative Order No. 4.”

The Takeaway

There are a few points worth making in light of this opinion.  First, off-the-record discussions are quite commonplace, so the question is how to preserve the issue.  In light of this opinion, it appears that even if a motion in limine has been filed and denied, counsel must object on-the-record once the evidence sought to be excluded is admitted.  Although there would appear to be instances in which the Arkansas Supreme Court might remand a case to require the record to be completed in similar circumstances (the Arkansas Supreme Court appears to have limited the holding in this case to “these specific circumstances”), if the issue is important enough, an on-the-record objection is vital to preserving the issue.  That leads to the second point, which is that this decision to object has to be balanced against the negatives of objecting (namely, irritating the jury).  In this case, it appears that counsel did not consider the testimony in question to be vital to the case (this particular point was the fourth of four points on appeal in the ARA’s brief, and took up about 2 of the brief’s 30 pages).  Therefore, the decision not to object was quite possibly a strategic decision in this five-day jury trial.  If, however, a ruling in chambers is more important to a case, counsel should make every effort to make an objection on the record and to obtain a ruling on the record.

In Bank of the Ozarks v. Cossey, 2014 Ark. App. 581, the Arkansas Court of Appeals addressed the question of whether an order that appears to be a non-final order is still appealable under Ark. R. App. P. (2)(a)(12), which permits an appeal from almost all orders entered in probate cases.

Only a brief summary of the facts of this case is necessary.  In sum, there was a dispute about who was the trustee of the Hamilton Family Trust.  One of the beneficiaries of the trust, Ms. Cossey, filed a petition claiming that Bank of the Ozarks was the trustee and demanding an accounting from Bank of the Ozarks.  Bank of the Ozarks claimed it was not the trustee of the trust.  The circuit court held that Bank of the Ozarks had acted as trustee, and ordered Bank of the Ozarks to perform an accounting within 30 days.  Bank of the Ozarks appealed from this order, along with a separate order awarding attorney’s fees and costs to Ms. Cossey.

On appeal, the Court of Appeals first addressed the question of whether the order requiring an accounting was a final order.  The court held that “[a]n order that contemplates further action by a party or the court is not a final, appealable order.”  Because this order required Bank of the Ozarks to perform an accounting, and because there would likely be additional oversight and rulings by the circuit court, the Court of Appeals held that this was not a final order.

The Court of Appeals then turned its attention to Ark. R. App. P. (2)(a)(12) and Ark. Code Ann. § 28-1-116, which together permit appeals from almost all orders in probate cases.  In fact, the Court of Appeals held that “[w]e have interpreted section 28-1-116(a) to allow an immediate appeal from almost any probate order.”  However, the issue in this case related to who should be the trustee of the Hamilton Family Trust, a question governed by Ark. Code Ann. § 28-73-701.  The question, then, is whether this statute is part of the probate code.  Based on the notes to Ark. Code Ann. § 28-1-101, which lists the statutes that make up the probate code, the Arkansas Court of Appeals held that the statute applicable to this case (which was not included in the list) was not part of the Arkansas Probate Code.  The Court of Appeals also examined Ark. Code Ann. § 28-1-104, which lists the types of cases that are considered to be probate cases.  Although this statute was originally designed to set the jurisdictional guidelines when there were separate circuit, chancery, and probate courts, the Court of Appeals held that the statute is still applicable when determining appellate jurisdiction.  Because trust matters are not included in the list of matters considered to be probate matters, the Court of Appeals held that the issues in Bank of the Ozarks were not probate matters.

Having concluded that the trust dispute in Bank of the Ozarks was not a probate matter, a final order was required.  Because there was no final order, the Court of Appeals dismissed the appeal.  The Court did, however, give some guidance to the parties as to how to proceed.  The Court suggested in its opinion that a Rule 54(b) certificate (pursuant to which the parties may appeal from a non-final order) might allow the order to become appealable, although the Court of Appeals was very careful not to “comment[] on the propriety of a Rule 54(b) certificate . . .”  Nevertheless, it’s probably a safe bet that this case will soon be before the Court of Appeals again—this time with a Rule 54(b) certificate.

The Arkansas Supreme Court began its fall 2014 term with two decisions rendering arbitration clauses unenforceable in Arkansas state courts where such clauses contain no mutuality of obligation.

Regional Care of Jacksonville, LLC v. Henry

Arbitration Clause

On September 11, 2014, the Arkansas Supreme Court affirmed the Pulaski County Circuit Court’s decision to deny a nursing-home facility’s motion to compel arbitration due to the absence of mutuality of obligation in the nursing-home facility’s admission agreement. See Regional Care of Jacksonville, LLC v. Henry, 2014 Ark. 361.  In Regional Care of Jacksonville, LLC, the nursing-home facility’s admission agreements contained arbitration clauses that excluded from the requirement of arbitration “a dispute over billing or collecting for services.” Id. at 3.

The Arkansas Supreme Court noted that to have mutuality of contract, “an obligation must rest on each party to do or permit to be done something in consideration of the act or promise of the other; that is, neither party is bound unless both are bound.” Id. at 7.  The Court also observed that “[t]here is no mutuality of obligation where one party uses an arbitration agreement to shield itself from litigation, while reserving to itself the ability to pursue relief through the court system.” Id.

The Court found that the nursing-home facility’s arbitration clause lacked mutuality of obligation because it reserved the right to litigate billing or collection disputes, thereby excluding from arbitration the only likely claim it might have against a resident while strictly limiting the residents to arbitration.  Because the arbitration clause imposed no real obligation on the nursing-home facility to arbitrate its own claims, the Arkansas Supreme Court held that the arbitration clause could not be enforced.

 Alltel Corporation and Alltel Communications, Inc. v. Rosenow

The following week, on September 18, 2014, the Court handed down a 4-3 decision in Alltel Corp. v. Rosenow, 2014 Ark. 375.  The majority opinion in that case determined that Alltel’s arbitration agreement was not enforceable because it lacked mutuality of obligation.

The Court’s decision was not based on the language found in the arbitration clause itself, but on the language found in another provision in the same contract that read, “[I]f we do not enforce any right or remedy available under this Agreement, that failure is not a waiver.” Rosenow, 2014 Ark. 375, at  8.  According to the majority opinion, that contract provision meant that Alltel was clearly reserving for itself “the option of pursuing remedies other than arbitration, without the consequence of waiver.” Id.  The Court noted that Alltel had reserved for itself a protection that was not extended to the customer:

Succinctly put, Alltel provided itself with an “out” to the required arbitration; Alltel customers, such as Rosenow, however, were limited to pursuing relief against Alltel in the form of arbitration, while Alltel alone was provided absolution if it chose to pursue an alternate remedy.

Id.

Justice Goodson wrote the dissenting opinion, joined by Justices Baker and Hoofman.  Among other things, the dissenting Justices took issue with the basis for the majority’s ruling on the mutuality of obligation issue.  According to the dissent, “the majority affirms the circuit court’s ruling on mutuality of obligation for a reason that the parties have not developed and on which the circuit court has not ruled.” Id. at 15.  The dissenting opinion explained that Rosenow had argued that the lack of mutuality of obligation existed because of Alltel’s past actions of utilizing the services of collection agencies and filing lawsuits against customers to collect on delinquent accounts.  According to the dissenting opinion, the circuit court had determined that Alltel’s arbitration agreement “imposed no real liability on Alltel because Alltel had previously ignored it.”

The dissent claims that “the majority has reached well beyond the limited issue presented on appeal, which is based on Alltel’s conduct and not a specific provision within the contract.” Id. at 16.

The majority’s response is included in the following footnote:

While the dissent takes issue with our decision in this matter using the analysis that we do, the question presented to this court is whether the circuit court erred in finding a lack of mutuality of obligation. The issue of mutuality of obligation was raised to, and ruled on by, the circuit court. Although we have reached the same result as the circuit court in a different manner, the result, conclusion, or decision is the same—mutuality of obligation is lacking. Had we determined that any other element required for a valid contract was not present, then we would have contravened our precedent. But, to be clear, we have in no way raised an issue sua sponte, because the mutuality-of-obligation issue is squarely before us.

Id. at 9 n.5.

The Takeaway

Following these recent decisions, parties should expect any questionable arbitration clause to be contested in litigation in an Arkansas state court.  Although the Federal Arbitration Act (FAA) might be applicable, it is state contract law that ultimately decides whether an arbitration clause will be enforced in state court.  These recent decisions indicate that the Arkansas Supreme Court will be hesitant to allow an arbitration clause to be enforced where there is no mutuality of obligation.  Under Arkansas contract law, arbitration clauses either bind both parties or neither party is bound to such an agreement.  Although there was some dispute among the members of the Court as to how the Rosenow case should have been decided, it seems fairly certain that where an arbitration clause is clearly one-sided (thereby imposing no real obligation to arbitrate on one party to the agreement, as was the case in Regional Care of Jacksonville, LLC) the Court seems to be in agreement that such an arbitration clause will not be enforceable.

Be aware that a similar argument will not fly in an Arkansas federal court. See Enderlin v. XM Satellite Radio Holdings, Inc., No. 4:06-CV-0032 GTE, 2008 WL 830262, at *10 (E.D. Ark. Mar. 25, 2008) (holding that “Arkansas law requiring mutuality within the arbitration paragraph itself is preempted by the FAA because it places the arbitration clause on unequal footing with other contract terms that do not each have to be mutual.”); see also Southeastern Stud & Components, Inc. v. American Eagle Design Build Studios, LLC, 588 F.3d 963 (8th Cir. 2009).  In Regional Care of Jacksonville, LLC, The Arkansas Supreme Court acknowledged these federal decisions and expressed its disagreement with them. 2014 Ark. 361, at 11-12 n.7.

Further Reading

If you’re interested in reading more on this topic, I recommend the following law review article:  Katherine B. Church, Arkansas and Mandatory Arbitration: Is the Feeling Really Mutual?, 65 Ark. L. Rev. 343 (2012).

Tim Cullen

We Support Tim Cullen for Supreme Court

This blog is mostly read by lawyers, but around election time, a lot of voters (who are not necessarily lawyers) visit our blog to learn about the candidates running for appellate court positions.  This year there is only one contested appellate court race. That’s the race between Tim Cullen and Robin Wynne for an open seat on the Arkansas Supreme Court.

Before this election cycle, the Arkansas Appeals Blog had never endorsed a judicial (or any) candidate.  That changed when, in February, our good friend and mentor, Tim Cullen, decided to run for a position on the Arkansas Supreme Court.  We have known Tim for the past seven years.  We know Tim to be an outstanding appellate lawyer, a zealous advocate for his clients, and a professional in every sense of the word.  Tim is also a family man who always puts his three children first.

In addition to Tim’s character and integrity, Tim has the experience necessary to be an outstanding Supreme Court Justice.  Immediately after law school, Tim went to work for for two years for the late Arkansas Court of Appeals Judge Terry Crabtree.  Once Tim entered private practice, he focused his practice heavily on appellate work.  In fact, during his 15 years in private practice, Tim has been lead counsel on approximately 150 appellate cases, before the Arkansas Court of Appeals, the Arkansas Supreme Court, the Eighth Circuit Court of Appeals, and the United States Supreme Court.  (By way of comparison, a Westlaw search reveals that Tim’s opponent had been lead counsel on only four appellate briefs during that three decades he had been a licensed attorney.)  Tim’s experience is part of the reason the readers of Soirée magazine voted Tim one of the best appellate lawyers in Arkansas.

The Attack on Tim’s Integrity by an Out-of-State PAC is Appalling 

We never doubted that we had made the right decision in choosing to endorse Tim Cullen.  Given the events of this past week, we are more confident than ever of our decision to support Tim.

In the past week, an out-of-state PAC has spent an estimated $400,000 on vicious, dishonest attack ads against Tim Cullen.  This is about twice what the two candidates will spend combined on their entire campaigns.  The PAC’s ads claim that Tim Cullen believes child pornography is a victimless crime.  If that sounds so outrageous that it couldn’t possibly be true, it’s because it’s so outrageous it couldn’t possibly be true.  The PAC knows it’s not true.  Judge Wynn knows it’s not true. However, Judge Wynne did not repudiate the ad.  Instead, he just watched and received the benefit as an honorable man had his character assassinated.

I don’t need to go through an explanation of what makes the ad so wrong on so many levels, because several other lawyers and writers have already done so: [updated 5/17/14 to include additional articles and commentary]

  • FactCheck.org calls the ad “beyond the pale” because the ad “distorts the record in a blatant appeal to fear and emotion.”
  • Dan Greenberg at The Arkansas Project goes through a thorough analysis of not only why the ad is untrue, but also why the attack ad is an attack on the judiciary.  He concludes that “Wynne’s conduct makes me think he should be kept far away from the bench.
  • Max Brantley with The Arkansas Times writes that “Wynne’s failure to repudiate the secret money and the anti-American message of the ads from which he benefits raises fair questions about his fitness to serve.”
  • Jennifer Wells at hawglawblawg explains the entire campaign finance system for judicial elections in a very witty post that explains the problem with out-of-state money and the problem with the content of the ads.
  • Jennifer Flinn at Arkansas Legal Pad explains that attorneys often represent clients they don’t agree with, because that’s their job.
  • Matt Campbell of the Blue Hog Report writes that “[a]nyone who might ever find him- or herself in front of the Arkansas Supreme Court (which, honestly, could be pretty much anyone) should be outraged by the idea that a judge could have deep financial ties to the other side of your case and you would never know it.”
  • John Brummett wrote yesterday, “I know Robin Wynne a little and like him. But I’d prefer a Supreme Court justice who didn’t get his robe by passively riding the coattails of cowardly smear artists.”

Listen: When you have Dan Greenberg, Matt Campbell, and John Brummett all on the same page on a topic, you should take note.  

You’ll notice a variety of people condemning Robin Wynne for his refusal to repudiate the ad.  Instead of repudiating the ad, he released one of those overly lawyered statements that had a lot of words in it but didn’t really say anything. (He claims not to have known about the ad, but the evidence brings that claim into question.) When Tim Cullen called and asked him to repudiate the ad, Robin Wynne literally hung up on Tim.

[5/17/14 UPDATE:] Both candidates were invited to attend a rally on the steps of the Arkansas State Capitol at noon on Thursday.  The event was attended by approximately 100 lawyers, and included many prominent speakers, including former Arkansas Supreme Court Justice Annabelle Imber Tuck.  Tim Cullen accepted the invitation and gave a very forceful speech.  Judge Wynne rejected the invitation to attend and speak.  As Tim said in his speech, “only one person benefits from these ads: Judge Robin Wynne.  I stand here in utter disbelief that any judge would allow this group and their vile tactics and their complete disregard for the constitution to carry the ball for their campaign.”  We couldn’t agree more. (Click here to watch the video from the beginning, or click here to watch this particular quote.)

Join Us in Voting for Tim Cullen for Our Arkansas Supreme Court

Tim Cullen is a personal friend of ours.  He is a good, decent, honorable man.  He is the antithesis of what these groups claim he is.  I hope you’ll join us in casting a vote FOR TIM CULLEN for Arkansas Supreme Court.

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Tim Cullen for Supreme Court

Arkansas Supreme CourtLack of Final Order Prevents Arkansas Supreme Court from Issuing a Stay of Pulaski County Circuit Court’s Ruling in Same-Sex Marriage Case

The Arkansas Supreme Court handed down a decision late this afternoon dismissing without prejudice the appeal taken by the State from the Pulaski County Circuit Court’s recent decision declaring Arkansas’s ban on same-sex marriage unconstitutional.

According to the per curiam decision, the circuit court’s order was not final because it failed to adjudicate all the claims or to otherwise include a Rule 54(b) certificate, which would allow an interlocutory appeal from an otherwise non-final order.

Arkansas Supreme Court Essentially Holds That a Stay is Unnecessary Because There is No Order Striking Down Licensing Statute

The Arkansas Supreme Court also denied the State’s plea for the Court to help alleviate confusion among circuit clerks by granting a stay pursuant to the Supreme Court’s superintending authority.  The Court noted that because the circuit court had not issued a ruling with respect to Arkansas Code Annotated Section 9-11-208(b) (Repl. 2009), “License not issued to persons of the same sex,” the circuit court’s order had no effect on that statute and its prohibition against circuit and county clerks issuing same-sex marriage licenses.

Although the Pulaski County Circuit Court’s decision struck down as unconstitutional two state statutes that ban marriages by people of the same sex (Arkansas Code Annotated Sections 9-11-107, “Validity of foreign marriages” and 9-11-109, “Same sex marriage void”), it failed to rule on Arkansas Code Annotated Section 9-11-208(a)(1)(B), which provides, “A license shall not be issued to a person to marry another person of the same sex, and no same-sex marriage shall be recognized as entitled to the benefits of marriage.”  It appears that this means that that statute is still in effect, so the practical effect of this ruling appears to be that circuit clerks are prohibited from issuing licenses to same-sex couples until the circuit court clarifies its ruling.

The Court’s full decision is available here: Arkansas Supreme Court Same-Sex Marriage Decision.

Posted by: Andy Taylor | May 14, 2014

Arkansas Supreme Court Releases Election Decisions

Two big decisions from the Arkansas Supreme Court today (actually several, but four of them are about the same issue).  We will update the blog with more information later, but summaries of the decisions follow.  We’re getting these out quickly, so please let us know if you read the opinions and have a different understanding.

Supreme Court Holds Candidates for Judicial Office not Disqualified for Delinquency in Paying Dues

The Supreme Court held that (1) a suspension for failure to pay dues is not the same as not having a license; and (2) that suspending an attorney without notice is a violation of Due Process.  Justice Hart wrote separately, concurring in part and dissenting in part.  She agreed with point 1, which she argued made point 2 moot.  Justice Corbin dissented on both points, and would have held that a delinquency makes a candidate ineligible.

Here are PDFs of the opinions:

CV-14-367 Fox

CV-14-358 Bailey

CV-14-370 Byrd

CV-14-369 Foster

Supreme Court Allows Voter ID Law to Remain in Place (For Now); Strikes Down Rules Relating to Absentee Voters

On what appear to be procedural grounds, the Arkansas Supreme Court struck down a circuit court opinion holding that Arkansas’s voter ID law was unconstitutional.  The Court held that the constitutionality of the statute was not properly before the Circuit Court.  Presumably, this leaves open the question of whether the law could be attacked in the future.  The Arkansas Supreme Court also held that the Arkansas State Board of Election Commissioners had acted outside the scope of its authority when it promulgated rules allowing for provisional ballots for absentee ballots, where the statute did not expressly allow for such a rule.

Here is a PDF of the opinion:

CV-14-371 Voter ID

 

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Posted by: Andy Taylor | March 25, 2014

Future Obligations and Finality Problems: Nix v. Nix

Nix v. Nix

The Arkansas Court of Appeals recently handed down its decision in Nix v. Nix, 2014 Ark. App. 162.   Nix was a divorce case in which the husband appealed, arguing that the trial court had erred: (1) in finding that a car was his wife’s nonmarital property; and (2) in failing to equitably divide his pension payments.  The Arkansas Court of Appeals was not able to reach the merits of the husband’s arguments, however, because of a finality problem with the order.

In Nix, the Arkansas Court of Appeals found two paragraphs in the divorce decree to be problematic.  The first problematic paragraph stated as follows:

The Court further finds that the parties owned certain real estate which constitutes the marital home. This property should be listed for sale immediately with an agreed upon realtor and listing price. The parties shall be equally responsible for the major repairs pending a sale however Ms. Nix will be responsible for any ordinary wear and tear and utilities. . . .

The second problematic paragraph stated as follows:

The Court finds that all of the property including but not limited to the Montana Fifth Wheel, the 2012 Arctic Cat, Ranger Boat motor and trailer all of which are on Schedule C are marital property. The parties shall have thirty days to reach an agreement regarding the division of marital personal property listed in Schedule C, otherwise the property shall be sold at private auction.

In holding that the divorce decree was not a final order, the Arkansas Court of Appeals held that “[s]everal matters have been left undecided between the parties.”  In particular, the Court of Appeals highlighted the following unresolved questions:

  • whether the husband and wife will agree on a realtor and listing price;
  • whether the husband and wife will agree on what constitutes a major repair and what constitutes ordinary wear and tear;
  • whether the husband and wife will reach an agreement regarding the remaining personal property; and
  • whether the husband and wife will agree on a date, place, and terms of sale for a private auction.

In reaching its conclusion that the divorce decree in Nix was not a final order, the Court of Appeals relied on Wadley v. Wadley, 2010 Ark. App. 733.  In Wadley, the divorce decree had provided as follows:

Unless otherwise specified herein, the parties shall have sixty (60) days from entry of this DECREE OF DIVORCE to agree upon a disposition of the remaining items of marital property. Any property division not agreed upon within the sixty (60) days shall be sold by public auction, with the parties responsible for hiring an auctioneer and advertising said sale. Any and all proceeds from the sale of the property, after the costs of the auctioneer and advertising shall be equally divided between the parties.

As in Nix, the court in Wadley had determined that there were simply too many unresolved questions left open by the order.  Therefore, the Court of Appeals had held that the order in Wadley was not a final order.

The Takeaway

There have been a number of cases lately dealing with finality, and although lack of a final order means that there is still the opportunity to appeal (once the final order is entered), there are still significant costs involved in having to rebrief a case. Therefore, the best option when attempting to pursue an appeal is to try to make certain that the trial court enters a final order.

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Arkansas Rule of Civil Procedure 54(b)As we have discussed previously, Rule 54(b) of the Arkansas Rules of Civil Procedure allows a court to issue a final judgment as to certain claims or parties (when multiple claims or parties are involved).  By doing so, the trial court makes it possible for the court’s rulings as to the specific claims or parties to be appealed before the other claims are heard.  This option is available “only upon an express determination, supported by specific factual findings, that there is no just reason for delay.” Ark. R. Civ. P. 54(b).

Billingsley v. Benton NWA Properties, LLC

In the recent case of Billingsley v. Benton NWA Properties, LLC, 2014 Ark. 65, the Arkansas Supreme Court examined a Rule 54(b) certificate and held that it was not sufficient.  In that case, the plaintiffs owned a piece of property that flooded, which the plaintiffs alleged caused approximately $3,500,000 in damages (including loss of value to the property).  The plaintiffs sued “many defendants” for the damage caused by the flood, and ultimately reached a settlement agreement with Benton NWA Properties, LLC.  Prior to trial on the remaining claims against the remaining parties, a dispute arose between the plaintiffs and Benton NWA Properties, LLC regarding the terms of the settlement agreement.  Therefore, the plaintiffs and Benton NWA filed competing motions to enforce the settlement agreement, and the trial court granted Benton NWA’s motion to enforce.  The plaintiffs sought to appeal, and the trial court agreed to enter a judgment along with a Rule 54(b) certificate.

The Arkansas Supreme Court raised, sua sponte, the issue of the sufficiency of the Rule 54(b) certificate, noting that the sufficiency of such a certificate is jurisdictional.  The Court looked at Holbrook v. Healthport, Inc, 2013 Ark. 87, in which the court had held that a one-sentence explanation in the Rule 54(b) certificate was insufficient.  In Billingsley, the trial court had written a substantial certificate (it was over 5 paragraphs long, most with more than one sentence).  Nevertheless, the court held that the 54(b) certificate “fail[ed] to even include a one-sentence factual finding” regarding any danger of hardship or injustice that could be alleviated by an immediate appeal.  Therefore, the Arkansas Supreme Court dismissed the appeal without prejudice.

The Takeaway

Based on Holbrook and now Billingsley, the key to an effective Rule 54(b) certificate appears to be to explicitly state the hardship or injustice that will result if an immediate appeal is not allowed.  Simply laying out the procedural history is not enough, even if the implication from the history is that it would be inefficient to allow the trial to proceed without having the appeal heard first.  So, make sure that any Rule 54(b) certificate not only lays out the history of the case, but also the specific problems that will occur in the future if the appeal is not immediately heard.

Related Posts:

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Posted by: Tasha C. Taylor | March 4, 2014

History Made with Arkansas’s First Majority-Female Supreme Court

Judge Rhonda WoodJudge Rhonda Wood’s Unopposed Election Leads to First Female-Majority Arkansas Supreme Court

With the filing period officially closed and all judicial candidates announced, the Arkansas Supreme Court will, for the first time in history, be made up of a majority of female justices.  Court of Appeals Judge Rhonda Wood is running unopposed for Position 7 on the Arkansas Supreme Court, the seat being vacated by Justice Cliff HoofmanJustice Hoofman was appointed in 2012 by Governor Mike Beebe to fill the seat being vacated at that time by retiring Justice Robert L. Brown.  As an appointee, Justice Hoofman cannot run for that seat.

We reached out to Judge Rhonda Wood on Monday concerning her thoughts about her place in this historic moment for the Arkansas Supreme Court:

“It was during my first year of law school that Arkansas elected the first female justice—Justice Imber Tuck. I remember my female classmates feeling excited that we broke that glass ceiling. I never dreamed that I would be part of the election cycle to break the next glass ceiling of having a majority female court. My gender doesn’t change how I follow the law, but rather changes little girls’ dreams from possibilities to probabilities.” 

The 2014 judicial elections in Arkansas will take place on May 20, 2014, during the primary elections.  Justice Karen R. Baker is running unopposed for Position 6, the seat she currently holds.  The only other open seat on the Arkansas Supreme Court is Position 2, which is being vacated by retiring Justice Donald L. Corbin.  Two candidates have filed for that position: Little Rock attorney Tim Cullen and Court of Appeals Judge Robin F. Wynne.  Regardless of the outcome of that race, the Arkansas Supreme Court will be soon be comprised of four women and three men.

Appointed Female Members of the Arkansas Supreme Court

Elsijane Trimble Roy was the first female to serve as an Arkansas Supreme Court Justice.  She was appointed to Position 2 on the Arkansas Supreme Court in 1975 by Governor David Pryor.  In 1995, Andree Layton Roaf became the first African-American female to serve on the Arkansas Supreme Court after being appointed to that position by Governor Jim Guy Tucker.  Betty Dickey was appointed by Governor Mike Huckabee to become the first female Chief Justice on the Arkansas Supreme Court in 2004.  In 2008, Governor Mike Beebe appointed Elana Cunningham Wills to serve in Position 3 on the Arkansas Supreme Court.

Elected Female Members of the Arkansas Supreme Court

In 1997, Justice Annabelle Imber Tuck made history by becoming the first female to be elected to the Arkansas Supreme Court.  Since Justice Tuck’s retirement from the Arkansas Supreme Court in 2009, three other female Justices have been elected to serve on the Arkansas Supreme Court, all of whom are current members of that Court: Justice Karen R. Baker, Justice Courtney Hudson Goodson, and Justice Josephine L. Hart.

With the addition of Judge Rhonda Wood in 2015, Arkansas will join the ranks of only nine other majority-female state high courts in the country: California, Maryland, New York, North Carolina, Ohio, Texas (Court of Criminal Appeals), TennesseeWashington, and Wisconsin.

Although only nine state courts of last resort currently have a majority-female membership, sixteen state high courts are now led by female Chief Justices: Alaska, ArizonaCalifornia, Maryland, Minnesota, Missouri, New Mexico, North Carolina, Ohio, South Carolina, Texas (Court of Criminal Appeals), Virginia, Washington, West Virginia, Wisconsin, and Wyoming.

* Hat tip to Tim Cullen at ReportedDecisions.com for the suggestion to research this topic.

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Little Rock Attorney Tim Cullen

*Andy and I are excited to report that our good friend and mentor, Tim Cullen, has announced his candidacy for Arkansas Supreme Court.  

I have known Tim for the past seven years, more than three of which were spent working with him and learning from him as an Associate Attorney at Cullen & Co., PLLC.  Andy also spent a year working with Tim at his firm.  Tim is an excellent attorney and advocate for his clients, and his years practicing primarily as an appellate attorney give him the experience needed to serve on the Arkansas Supreme Court.

The press release follows.

Little Rock attorney Tim Cullen announced today his bid for the Arkansas Supreme Court to fill the seat being vacated by Justice Donald Corbin.  Cullen practices law in Little Rock and has been lead counsel on appeal in more than 150 cases before appellate courts including the U.S. Supreme Court, Arkansas Supreme Court, U.S. Court of Appeals for the Eighth Circuit, and the Arkansas Court of Appeals.

“I have a strong work ethic and a reputation for detail and efficiency, having recently been recognized by my peers as one of the best lawyers in Arkansas in the unique area of appeals,” he said.  “I have broad experience in handling all of the different types of appeals that the Arkansas Supreme Court decides.”

“I believe as a lawyer, people trust you with their lives, and attorneys have a moral responsibility to them,” Cullen added.

His firm has taken on some of the largest appeals in the state.

“I believe a voter needs to know I have a deep and personal respect of the virtues of hard work, very high personal standards for the judiciary, and strong view that we must enforce the rule of law to everybody, equally,” he added.

Cullen also serves on a task force appointed by the Arkansas Supreme Court to implement electronic filing of appeal records and appeal briefs, which he believes can reduce costs of producing appeals and could save money by reducing the infrastructure required to store thousands of appeal records and briefs every year.

He served as an adjunct instructor in the University of Arkansas at Little Rock, and he received the Golden Gavel Award from the Arkansas Bar Association.

A native of Little Rock, Cullen graduated from the University of Arkansas where he served as student body president and also graduated law school from Fayetteville.  He worked with the late Judge Terry Crabtree at the Arkansas Court of Appeals and later opened his private law practice representing clients in appellate matters.

He lives in Maumelle with his wife Sarah and three children. The nonpartisan judicial election will take place May 20, 2014.

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