Another Post-Judgment Motion Cautionary Tale: Evangelical Lutheran Good Samaritan Society v. Kolesar

January 2, 2014 ~ Andy Taylor ~ 1 Comment

We have discussed the dangers of post-trial motions in a previous blog post. In fact, in a CLE we presented to the Arkansas Trial Lawyers Association in 2011, we listed the filing of a post-trial motion as one of the “Top Five Ways to Wreck Your Next Appeal.” Fellow blogger Tim Cullen recently discussed the same problem in a blog post discussing Virgil v. Morgan, 2013 Ark. App. 675, and also recommended avoiding post-trial motions unless absolutely necessary. Now, Evangelical Lutheran Good Samaritan Society v. Kolesar, 2013 Ark. App. 723, gives us yet another reason to avoid post-trial motions.

Kolesar is a nursing home negligence case. The plaintiff, who had been a resident of the nursing home for approximately eight months in 2009, filed suit against the nursing home on December 2, 2010. On January 3, 2011, the nursing home removed the case to federal court and filed an answer that, among other things, reserved the right to enforce any applicable arbitration agreement. On April 15, 2011, the federal court remanded the case back to state court.

After the case was remanded back to state court, the nursing home filed a motion to compel arbitration, based on its allegation that the resident’s husband had signed an arbitration agreement on the resident’s behalf. The trial court held an evidentiary hearing on the motion (there was a dispute as to whether the husband had actually signed the agreement, and as to whether he was acting as her agent at the time), and at the conclusion of the hearing, the trial court took the matter under advisement.

On May 21, 2012, the trial court entered an order denying the motion to compel arbitration, with the order stating that the decision had been announced in open court. Eight days later (May 29, 2012), the nursing home filed a motion seeking specific findings of fact and conclusions of law. Because the trial court never ruled on the motion, the motion was deemed denied on June 28, 2012, and the nursing home filed its Notice of Appeal on July 20, 2012. The Arkansas Court of Appeals raised, sua sponte, the issue of timeliness of the Notice of Appeal, and dismissed the appeal.

Rule 4(b) of the Arkansas Rules of Appellate Procedure–Civil governs when a post-trial motion extends the time to file a Notice of Appeal. Under that rule, the following motions extend the period during which to file a notice of appeal:

a motion for judgment notwithstanding the verdict under Rule 50(b) of the Arkansas Rules of Civil Procedure, a motion to amend the court’s findings of fact or to make additional findings under Rule 52(b), a motion for a new trial under Rule 59(a), or any other motion to vacate, alter, or amend the judgment made no later than 10 days after entry of judgment . . . .

The question, then, was whether the nursing home’s motion fit into one of these categories and, more specifically, whether it qualified as “a motion to amend the court’s findings of fact or to make additional findings under Rule 52(b).” Based on the language of Rule 52(b), the Court of Appeals held that the motion in this case did not fall into this category, holding instead that the nursing home’s motion was a Rule 52(a) motion.

Rule 52(a) of the Arkansas Rules of Civil Procedure provides as follows:

If requested by a party at any time prior to entry of judgment in all contested actions tried upon the facts without a jury, the court shall find the facts specially and state separately its conclusions of law thereon, and judgment shall be entered pursuant to Rule 58 . . . . Requests for findings are not necessary for purposes of review . . . . If an opinion memorandum of decision is filed, it will be sufficient if the findings of fact and conclusions of law appear therein.

Rule 52(b) of the Arkansas Rules of Civil Procedure provides as follows:

Upon motion of a party made not later than 10 days after entry of judgment, the court may amend its findings of fact or make additional findings and may amend the judgment accordingly…. If the court neither grants nor denies the motion within 30 days of the date on which it is filed or treated as filed, it shall be deemed denied as of the 30th day.

Relying in part on Ark. Dep’t of Human Servs. v. Dix, 94 Ark. App. 139, 227 S.W.3d 456 (2006), the Court of Appeals pointed out the differences between the two types of motions. A Rule 52(a) motion must be filed before a judgment is entered, while a Rule 52(b) motion may be filed up to ten days after a judgment is entered. A Rule 52(a) motion is mandatory on the trial court, while a Rule 52(b) motion is not. The Court of Appeals also noted that Rule 52(a) anticipates that a trial court would state its facts and conclusions of law, while Rule 52(b) anticipates that a trial court would amend its findings of fact or make additional findings of fact.

The Court of Appeals held that the motion in Kolesar was a Rule 52(a) motion, in spite of the fact that the nursing home cited Rule 52(b) in its motion, and in spite of the fact that it was filed 10 days after the entry of the order denying the motion to compel arbitration. The Court of Appeals noted that there had been no findings of fact by the trial court, so there were no findings to amend under Rule 52(b). In addition, the nursing home’s motion sought “specific findings of fact and conclusions of law,” language that is found in Rule 52(a), but not Rule 52(b).

Because the Court of Appeals held that this was a Rule 52(a) motion, the deadline for the nursing home to file a Notice of Appeal was not extended, meaning that the Notice of Appeal would have been due 30 days after May 21, 2012.

The opinion in Kolesar was written by Judge Gladwin and joined by Judge Walmsley, and a concurring opinion was written by Judge Gruber. In her concurrence, Judge Gruber acknowledged that the decision is correct, but she expressed concern about the outcome. She indicated that in this case, the outcome was not too harsh because it simply meant that the case would go to trial rather than be arbitrated. She expressed concern, however, that there could be “a harsh result under slightly different circumstances,” and suggested that the Arkansas Supreme Court revisit Rule 52.

This case is yet another example of why, generally speaking, a post-trial motion simply is not worth the risk. There is not much upside (trial courts often don’t rule on them anyway, causing them to be deemed denied, and when they do rule on them, they often “bullet-proof” their earlier order), but there is a lot of downside. Therefore, our general recommendation is to avoid post-trial motions unless absolutely necessary.

Toward a More Practical Approach to Preservation: Hardin v. Bishop

October 15, 2013March 25, 2014 ~ Andy Taylor ~ 1 Comment

In a December 2012 blog post, we questioned whether Bayer Cropscience LP v. Schafer, 2011 Ark. 518, represented a “possible departure from Arkansas’s strict preservation rules.” See Procedural Lessons from a $48 Million Dollar Appeal. As readers of this blog will likely recall, the Arkansas Supreme Court in Schafer addressed whether the punitive damages cap, enacted by the legislature as part of the Civil Justice Reform Act of 2003, was constitutional. The trial court had ruled from the bench that the cap was unconstitutional, and in its written order had implicitly held that the cap was unconstitutional (by upholding a jury verdict in excess of the cap). However, the trial court had not addressed the constitutional argument in its written ruling, and in its ruling from the bench, the trial court had not stated which of two arguments it accepted in holding that the cap was unconstitutional.

In Schafer, the Arkansas Supreme Court held that the oral ruling from the bench was adequate. The Court also held that the lack of an explanation for the trial court’s decision in its written opinion did not prevent the Arkansas Supreme Court from addressing the merits of the constitutional argument. In our blog post from 2012, we noted that “[i]t will be interesting to see whether the Schafer preservation rule is followed by the Court in decisions to come.” Last week, in Hardin v. Bishop, 2013 Ark. 395, the Arkansas Supreme Court fully embraced the ruling in Schafer, and overruled a handful of cases in the process.

The Facts

Although the more interesting part of the Hardin opinion (at least for appellate attorneys) is procedural in nature, a simplified summary of the facts is provided for context. Hardin involved a brush fire that got out of control, damaging a tire shop and some electrical equipment owned by Entergy. The fire had been started by Mr. Randy Wardlaw, who was burning brush on property that belonged to Ms. India Bishop. The owner of the tire shop, along with Entergy, sued Mr. Wardlaw and Ms. Bishop (on the theory that Mr. Wardlaw was acting as Ms. Bishop’s agent). In addition to compensatory damages, the plaintiffs sought to recover double damages under a fire prevention statute, Ark. Code Ann. § 20-22-304.

Ms. Bishop filed a motion for summary judgment, arguing that there was no question of material fact that Mr. Wardlaw had caused the damage, and further arguing that Mr. Wardlaw was not acting as her agent when he started the fire. She also argued, in the alternative, that the fire prevention statute (which allowed the recovery of double damages) did not apply to her. After a hearing, the trial court granted Ms. Bishop’s motion for summary judgment, but did not state a specific basis for the ruling. The plaintiffs appealed to the Arkansas Court of Appeals, and the Arkansas Supreme Court accepted certification of the case to address the question of whether the plaintiffs’ arguments had been preserved for appeal, given that the trial court had not offered a specific basis for its ruling.

The Opinion: Hardin v. Bishop

In its opinion (written by Justice Courtney Hudson Goodson, who also wrote the majority opinion in Schafer), the Arkansas Supreme Court acknowledged that “the circuit court generally granted Bishop’s motion for summary judgment without ruling specifically on the arguments presented in the parties’ motions, briefs, and oral arguments.” The Supreme Court pointed out, however, that the “primary argument” made by Ms. Bishop in her motion for summary judgment was that Mr. Wardlaw was not acting as her agent, and the plaintiffs’ primary argument was that there was a genuine issue of material fact with respect to whether he was acting as her agent.

The Arkansas Supreme Court next looked at the text of two rules. First, the Court examined Rule 56(c)(2) of the Arkansas Rules of Civil Procedure, which provides that summary judgment is appropriate if the pleadings show that there is no genuine issue of material fact and that “the moving party is entitled to judgment as a matter of law on the issues specifically set forth in the motion.” Second, the Court examined Rule 52(a) of the Arkansas Rules of Civil Procedure, which provides that “[f]indings of fact and conclusions of law are unnecessary on decisions of motions under these rules.” (The Court also relied on this rule in reaching the merits of the case in Schafer.) The Supreme Court appears to have drawn a distinction here between preservation when motions are involved and preservation in other types of cases, holding that “when a case does not involve a motion, we typically adhere to our well-established principle that the failure to obtain a ruling on an issue at the trial court level precludes a review of the issue on appeal.”

Based on these rules, the Supreme Court held that the agency issue was adequately preserved for appeal. The agency issue had been raised by the parties in their motions and in their oral arguments before the trial court. The trial court’s order stated that it was “[b]ased upon the adopted pleadings and argument of counsel,” and so the trial court’s order “encompassed the sole issue of agency presented to it . . . .” Therefore, the agency issue was preserved.

Before moving to the merits of the plaintiffs’ argument regarding agency, the Arkansas Supreme Court acknowledged a line of cases in which the trial court had granted a motion for summary judgment and the Supreme Court had held that, in the absence of specific rulings on numerous claims, that the issue was not preserved for appeal. In Hardin, the Arkansas Supreme Court held that “[t]o the extent that those cases and their progeny are inconsistent with the holding in the present case, we overrule them.”

The Takeaway: Appellate Practice Tips

This decision definitely relaxes the court’s prior strict preservation rules, and seems to adopt a more common-sense approach to preservation than perhaps has been used in the past. In Hardin, the trial court had clearly based its decision on the agency issue. In fact, the agency issue was the only issue raised in the briefs, other than Ms. Bishop’s argument that the statute allowing for double damages did not apply to her. Because the trial court completely dismissed Ms. Bishop from the case (rather than simply limiting the amount of damages that could be awarded against her), it was clear that the trial court based its decision on Ms. Bishop’s agency argument.

This practical approach to preservation is certain to be welcomed by both trial counsel and appellate counsel. Nevertheless, a word of caution is in order. The Court in Hardin was examining a motion for summary judgment that examined only one issue. In fact, the Arkansas Supreme Court noted two different times that the issue of agency was the “sole” issue raised in the motion for summary judgment, while noting that in the previous decisions that were inconsistent with Hardin, the motions involved “numerous claims.” In addition, the Supreme Court noted that Hardin involved a motion, and seemed to draw a distinction with cases that do not involve a motion. Therefore, the safest route still is to obtain a written ruling (along with a basis for the ruling, when the trial court will accommodate such a request) on any important argument that needs to be preserved for appellate review.

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—Andy Taylor

New Arkansas Appellate Court Rules Effective August 1, 2013

August 1, 2013August 24, 2013 ~ Tasha C. Taylor ~ 1 Comment

Arkansas attorneys filing briefs and motions in the Arkansas Supreme Court or Arkansas Court of Appeals should be aware that two new rules go into effect beginning today (August 1, 2013) that change the procedure for filing briefs and pleadings in Arkansas’s appellate courts. Arkansas Supreme Court Rule 3-7 requires that a cover sheet now be included with case initiating documents (the initial record or pleading) and Rule 1-8 requires that briefs and pleadings now be submitted electronically in addition to the paper copies also required by the Court’s rules. The following is a summary of the two new rules. Of course, we advise that you review these rules in full prior to filing anything in Arkansas’s appellate courts.

Rule 3-7. Cover Sheet

Rule 3-7 of the Rules of the Arkansas Supreme Court and Court of Appeals requires that a case initiating cover sheet be filed with the Clerk of the Supreme Court and Court of Appeals whenever an initial record or pleading is filed in one of Arkansas’s appellate courts. See In Re Adoption of Supreme Court and Court of Appeals Rule 3-7. Cover Sheet, 2013 Ark. 277.

The following is an image of the new appellate court cover sheet—a link to the cover sheet form on the Supreme Court’s website (as well as instructions for completing the form) can be found here.

Rule 1-8. Courtesy Electronic Copies

In an effort to move toward electronic filing in Arkansas’s appellate courts, the Arkansas Supreme Court and Court of Appeals are now requiring appellate attorneys to provide a courtesy electronic copy in PDF format of essentially all pleadings and briefs filed in those Courts. See In Re Adoption of Supreme Court and Court of Appeals Rule 1-8. Courtesy Electronic Copies, 2013 Ark. 256. Note that this is in addition to the paper copies that are required by the Courts’ rules. This new rule will apply to all motions, petitions, writs, briefs, responses, and replies. See Ark. Sup. Ct. R. 1-8(a).

Filing of the PDF document by email is not permitted under Rule 1-8. Rather, appellate attorneys will be required to submit the PDF documents on external media (CD, flash drive, etc.) and will also be required to serve a copy on the other party.

It is important to note that compliance with Administrative Order 19 is still required with the PDF versions of documents that will be filed. Furthermore, a very specific file naming convention is mandated by the rule.

Rule 1-8 also requires that appellate attorneys include in the paper version of the documents filed a Certificate of Compliance and Identification of Paper Documents not in PDF Format.

Anyone filing documents in the Arkansas Supreme Court or Arkansas Court of Appeals beginning today will need to carefully review this new rules before doing so.

PRACTICAL TIP: If you do not already have software installed on your computer that will allow you to easily convert Word documents to PDF format, there is free software available for download at the following two sites (our firm currently uses the Cute PDF software, which works great):

Foxit Reader–http://www.foxitsoftware.com/Secure_PDF_Reader/
Cute PDF–http://www.cutepdf.com/

–Tasha Taylor

Ford Motor Company v. Washington (Ford III): The Third Time Is Not the Charm (and it ain’t over yet)

June 5, 2013March 12, 2014 ~ Andy Taylor ~ 2 Comments

Introduction

We have written two previous blog posts regarding this case: The first blog post discussed Ford Motor Co. v. Washington, 2012 Ark. 325 (“Ford I“), and the second blog post discussed Ford Motor Co. v. Washington, 2012 Ark. 354 (“Ford II“). In these two opinions, the Arkansas Supreme Court held that there was not a final order because a party that was orally dismissed by the Court was never dismissed in any written order. (Ford I was the original opinion, and Ford II was an opinion denying the petitions for rehearing.) In Ford Motor Co. v. Washington, 2013 Ark. 88 (“Ford III“), the Arkansas Supreme Court again held that there was no final order, this time for a completely different reason. A brief review of the factual and procedural history of this case is in order.

**Factual & Procedural History of the Ford Case**

The facts of the case are as follows: Mr. Johnny Ray Washington and his son were travelling in a 1994 Ford Explorer when Ms. Karah Allen Williams ran a stop sign, colliding with Mr. Washington’s Explorer. Ford I, 2012 Ark. 325, at 2. The Explorer flipped twice, killing Mr. Washington (his son survived). Id. Mr. Washington’s wife, Ms. Paulette Washington, sued (individually and as administratrix of Mr. Williams’s estate) the manufacturer of the vehicle, the dealership that sold the vehicle, and the driver who ran the stop sign (Ms. Williams). Id. Ms. Washington eventually settled with the driver, and an order was entered dismissing her. Id. Ms. Washington also nonsuited her claims against the dealership, and her attorneys announced the nonsuit to the trial court, but no written order was ever entered dismissing the dealership. Id.

At the conclusion of the trial, the jury returned verdicts based on special interrogatories. Ford III, 2013 Ark. 88, at 3-4. The jury found that Ford and Ms. Williams were both proximate causes of Mr. Williams’s death, and assigned 50% of the fault to each. Id. (Although Ms. Williams had been dismissed from the lawsuit, she was included on the verdict form for apportionment purposes.) Id. at 2. The jury awarded $4,652,125 in compensatory damages and $2,500,000 in punitive damages. Id. at 3-4. The trial court incorporated the special interrogatories into its judgment, and stated: “Therefore, judgment is awarded to the respective plaintiffs as set out above.” Id.

Ford appealed, asserting that the circuit court had erred by: (1) refusing to admit evidence that the plaintiff was not wearing a seatbelt; (2) refusing to hold that some of Ms. Williams’s claims were preempted by federal law; (3) refusing to grant JNOV with respect to the plaintiff’s punitive damages claim; and (4) refusing to reduce the compensatory damages by half. Ford I, 2012 Ark. 325, at 1.

In Ford I, the Court held that the judgment was not a final order because although the dealership had been orally dismissed from the case, no written order had ever been entered dismissing the dealership. Id. at 2. Both parties filed petitions for rehearing, arguing that language in the notices of appeal and cross-appeal (in which the parties had stated that they abandoned all pending but unresolved claims) made the order a final order. Ford II, 2012 Ark. 354, at 1. In Ford II, the Arkansas Supreme Court rejected this argument, holding that that language in the notice of appeal dismissed only claims and not parties. Id. at 1-2.

After the Court’s holdings in Ford I and Ford II, the case was remanded to the trial court so that a written order could be entered dismissing the party with whom the plaintiffs had settled (the dealership). Ford III, 2013 Ark. 88, at 4-5. Ford Motor Company appealed again, raising the same four points on appeal. Id. at 1-2.

**The Ford III Decision**

On appeal in Ford III, the Arkansas Supreme Court raised, sua sponte, the issue of finality. Id. at 5. The Court held that in order for a judgment to be final, “the amount of the judgment must be computed, as near as may be, in dollars and cents and . . . the judgment must specify clearly the relief granted or other determination of the action.” Id. (citing Thomas v. McElroy, 243 Ark. 465, 420 S.W.2d 530 (1967); Ark.Code Ann. § 16–65–103). The Court held that the problem with the judgment that had been entered by the circuit court was that it did not set forth a specific dollar amount owed by Ford. Id. at 6. The Court held that “[i]nstead, the circuit court merely reproduced the jury’s answers to the interrogatories and gave no further guidance.” Id. In support of its holding, the Arkansas Supreme Court noted that in Ford’s brief, Ford had requested that the Arkansas Supreme Court clarify the amount of money that it owed. Id. Because the Court held that the judgment did not constitute a final order, the Court dismissed the appeal without prejudice. Id.

The Ford III Dissent

This opinion is notable not just for its holding, but also for a rather vigorous dissent, written by Justice Hart. Id. at 7-8 (Hart, J., dissenting). The dissent seems to be based on two considerations. First, Justice Hart noted that the record in the case was “huge,” consisting of a 2,208-page abstract and a 1,201-page addendum. Id. at 7. She then noted that the Supreme Court had previously reviewed the same judgment, and had remanded the case for lack of a final order (for failure to dismiss a party by written order), but had not raised this particular finality issue until the case had been remanded and was back up on appeal. Id.

Second, the dissent argues that the judgment was, in fact, a final order. Id. at 7-8. The dissent noted that the jury interrogatories (and the judgment) set forth the exact amount of compensatory and punitive damages, and that the interrogatories then apportioned fault, with 50% of the fault attributed to the manufacturer, and 50% of the fault attributed to the driver. Id. at 7. The dissent then argues that “[i]t is simply not defensible to assert that this judgment is not final because this court does not deign to perform a simple arithmetical operation that is routinely taught in the second grade—division by two.” Id. at 7.

Practical Impact of Ford III

The practical impact of this decision is that an order or judgment involving money must state the exact amount owed, in dollars and cents. There can be no ambiguity. Although the judgment in Ford III did not specifically set forth a formula (it was implied that the compensatory damage award would be reduced by half because the jury had determined that Ford was only 50% responsible, but that was not explicitly stated in the judgment), the opinion in Ford III seems to imply that even a formula would not have been sufficient. Therefore, the safest route to obtain a final judgment is to ensure that any money judgment sets forth an exact amount owed, down to the penny.

Related Posts:

Andy Taylor

Oral Order Dismissing a Party Not Sufficient to Create Final Order (Ford I)

September 18, 2012March 12, 2014 ~ Andy Taylor ~ 3 Comments

The first round of decisions from the Arkansas Supreme Court for its 2012-13 term included a holding on a familiar issue concerning the finality of decisions. In Ford Motor Company v. Washington, 2012 Ark. 325, the Arkansas Supreme Court again reiterated that a written order is required in order for the voluntary nonsuiting of a party to be effective.

The case involved an automobile accident that involved a Ford Explorer and a Nissan Sentra. The driver of the Explorer was killed, and the passenger (the driver’s son) was injured. The plaintiff (the driver’s wife) sued individually, and on behalf of her son and her husband’s estate. The plaintiff filed claims against the manufacturer of the vehicle (Ford Motor Company) and the dealership that sold the vehicle (Freeway Ford Lincoln Mercury, Inc.) for negligence, strict liability, failure to warn, and breach of warranties. The plaintiff also filed a negligence claim against the driver of the Sentra (Karah Allen Williams).

The plaintiff eventually settled the claim against Ms. Williams. Then, at trial, the plaintiff moved to nonsuit her claims against Freeway. The trial court granted the motion orally, but the dismissal was never reduced to a written order.

At trial, the plaintiff prevailed on her claims against Ford and was awarded compensatory and punitive damages. Ford appealed, arguing that certain evidence had been improperly excluded, that certain claims were preempted by federal law, that the punitive damages award should be reversed, and that the compensatory damages should be reduced.

The Arkansas Supreme Court held that the order in the case was not a final order. Quoting from Arkansas Rule of Civil Procedure 41(a), the Court held that “[a] voluntary nonsuit is ‘effective only upon entry of a court order dismissing the action.'” Ford Motor Co., 2012 Ark. 325, at 2. Because there was no written order dismissing Freeway, the order in the case did not adjudicate all claims against all parties. Therefore, the order was not a final order, and the Arkansas Supreme Court dismissed the appeal without prejudice.

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–Andy Taylor

Procedural Lessons from a $48 Million Dollar Appeal

December 14, 2011August 24, 2013 ~ Tasha C. Taylor ~ 1 Comment

On December 8, 2011, the Arkansas Supreme Court handed down its decision in Bayer Cropscience LP v. Schafer, 2011 Ark. 518. The Court’s decision is significant for a number of reasons, not the least of which are a couple of procedural issues that might be easily overlooked upon first glance in light of the Court’s holding overruling Arkansas’s punitive damages caps.

Punitive Damages Cap Declared Unconstitutional

“We hold that section 16-55-208 is unconstitutional under article 5, section 32 as it limits the amount of recovery outside the employment relationship.”

In a decision that affirmed a $48 million dollar judgment in favor of Arkansas rice farmers, the Arkansas Supreme Court ruled that the punitive damage limitations contained in Arkansas Code Annotated section 16-55-208 are unconstitutional. Schafer, 2011 Ark. 518, at 12.

That statute, passed by the Arkansas General Assembly as part of the Civil Justice Reform Act of 2003, provided for each plaintiff a cap on punitive damages in the amount of $250,000 or three times the amount of compensatory damages (not to exceed $1,000,000). See Ark. Code Ann. § 16-55-208.

In its opinion, the Arkansas Supreme Court observed that the Arkansas Constitution gives the Arkansas General Assembly the power to limit the amount of recovery “only in matters arising between employer and employee.” Schafer, 2011 Ark. 518, at 12. Article 5, section 32 of the Arkansas Constitution, as amended by amended 26, provides the following:

The General Assembly shall have the power to enact laws prescribing the amount of compensation to be paid by employers for injuries to or death of employees, and to whom said payment shall be made. It shall have power to provide the means, methods, and forum for adjudicating claims arising under said laws, and for securing payment of the same. Provided that otherwise no law shall be enacted limiting the amount to be recovered for injuries resulting in death or for injuries to persons or property; and in case of death from such injuries the right of action shall survive, and the General Assembly shall prescribe for whose benefit such action shall be prosecuted.

Ark. Const art. 5, § 32.

On appeal, Bayer argued that article 5, section 32 of the Arkansas Constitution referred only to compensatory damages and not to punitive damages. The Arkansas Supreme Court, however, disagreed: “Although compensatory and punitive damages serve differing purposes, an award of punitive damages is nonetheless an integrant part of ‘the amount recovered for injuries resulting in death or for injuries to persons or property.’” Schafer, 2011 Ark. 518, at 12 (quoting Ark. Const art. 5, § 32). Accordingly, the Arkansas Supreme Court held that section 16-55-208 is unconstitutional under the Arkansas Constitution because it limits the amount of recover outside the employment relationship, which is expressly prohibited by article 5, section 32.

Possible Departure from Arkansas’s Strict Preservation Rules?

The ruling on the punitive damages caps is monumental in and of itself, but what makes it even more interesting is the Court’s analysis of how it was able to reach the merits of that decision, which was an issue that split the Court 6-1.

In her concurring opinion, Justice Karen Baker explained that while she agrees with the outcome reached by the majority, she would not have reached the merits of the constitutionality of Arkansas Code Annotated section 16-55-208 because she did not believe that issue was preserved for appellate review. Schafer, 2011 Ark. 518, at 24–25 (Baker, J., Concurring). Justice Baker argued that because the circuit court ruled on the constitutionality of that statute from the bench and entered no written opinion concerning that issue, it was not preserved for appellate review. Id. In support of her opinion, Justice Baker cited to a number of cases in which the Arkansas Supreme Court has previously declined to rule on constitutional issues that had been ruled on from the bench only and that had not been included in the written orders. See, e.g., Boellner v. Clinical Study Ctrs., LLP, 2011 Ark. 83, at 23, ___ S.W.3d ___, ___ (holding that the constitutional issue presented in that case was not preserved for appellate review because “[a]lthough the circuit court ruled on this issue from the bench, the final, written order did not address this issue.”).

In footnote 5, Justice Courtney Hudson Goodson, writing for the majority, responded to Justice Baker’s concurring opinion concerning the issue of the constitutionality of the punitive damages cap: “Despite the concurring justice’s protestations to the contrary, it is without question that the issue concerning the constitutionality of the statutory cap on punitive damages is preserved for appeal.” Schafer, 2011 Ark. 518, at 14 n.5. In this case, the constitutional issue was raised in a pretrial motion and discussed in a hearing, at which time the circuit court orally declared from the bench that the statute in question was unconstitutional. According to the Arkansas Supreme Court, its preservation rules “require nothing more.” Id.

The majority went on to explain that “[a]lthough considered the better practice for a circuit court to explain its decision, findings of fact and conclusions of law are not necessary with regard to decisions on motions.” (emphasis added). Id. In footnote 5, the majority further explained that if the concurrence was correct in its view, then the Court would also have been precluded from reaching the merits of the circuit court’s decisions in a couple of other issues regarding motions in this appeal, as the circuit court also disposed of those other motions by ruling from the bench. Id. The Court’s conclusion is that “the circuit court’s failure to specify the ground upon which it found the statute unconstitutional does not deter us from performing our duty to review the circuit court’s decision.” Id.

Although couched as a decision rooted in precedent, Justice Baker seemed to view the Arkansas Supreme Court’s decision to reach the merits of the constitutional issue in this case as a departure from the Court’s strict preservation rules. It will be interesting to see whether the Schafer preservation rule is followed by the Court in decisions to come. Regardless of whether it is cited in future decisions, there can be no doubt that it will be cited in numerous appellant’s briefs in the months and years to come.

Perfecting the Notice of Appeal in Light of Posttrial Motions

“A notice of appeal must be judged by what it recites and not what it was intended to recite.”

Among other arguments on appeal, Bayer also challenged the $42,000,000 punitive damages award as excessive under the U.S. Constitution. The Arkansas Supreme Court refused to reach this issue because it held that it was not preserved for appellate review. Schafer, 2011 Ark. 518, at 23.

Bayer made its arguments to the circuit court concerning the excessiveness of the damages award in its posttrial motion for new trial and remittitur. Id. Because the circuit court did not take action on the posttrial motion within the 30-day window allowed pursuant to Rule 4(b)(1) of the Arkansas Rules of Appellate Procedure—Civil, that motion was deemed denied at the expiration of the 30-day period. Id. at 23–24. When the Bayer defendants filed their notices of appeal (all of which were identical), they failed to state in the notices of appeal that the appeal was being sought from both the judgment that was entered as well as the denial of the motion for new trial and remittitur. Id. The Arkansas Supreme Court held that it is necessary to file a notice of appeal from the denial of the posttrial motion in order to appeal from the issues raised therein. Id. at 24. According to the Court, unless the notice of appeal references both the final judgment and the deemed-denied ruling, the only appealable matter will be the original order. Id.

The following is a timeline of the post-trial procedural events that occurred in this case:

May 5—Judgment Entered
May 19—Bayer timely filed motions for judgment notwithstanding the verdict, new trial, and remittitur.
June 18—Motions deemed denied.
July 19—Each Bayer defendant filed separate and timely notices of appeal from the judgment entered on May 5, 2010.

See Schafer, 2011 Ark. 518, at 8.

To have preserved this issue for appeal, each of the Bayer defendants could have explained in their notices of appeal that they were appealing from both the May 5th judgment and the lower court’s denial of its motion for new trial and remittitur in the notice of appeal it filed on July 19th. Another option would have been to file a notice of appeal within 30 days of the date the judgment was entered in this matter. Then, following the deemed-denied date of June 18th, Bayer could have filed an amended notice of appeal within 30 days of June 18th that indicated that it was appealing from both the May 5th judgment and the denial of its motion for new trial and remittitur.

Related Posts:

–Tasha Taylor

Rule 54(b)(5) and the Rule of Unintended Consequences: Yet Another Rule 54(b) Trap

June 15, 2011March 12, 2014 ~ Andy Taylor ~ 4 Comments

In 2008, Rule 54(b) of the Arkansas Rules of Civil Procedure was amended in an effort to resolve a finality problem that kept reoccurring. See Ark. R. Civ. P. 54(b), Addition to Reporter’s Notes, 2008 Amendments. The problem was that defendants (often “John Doe” defendants) would be added to a complaint, but then those defendants would never be served. See id. An order would be entered that would be considered by everyone to be final, and one party would then appeal. See id. However, because there were unserved defendants, the order would not be binding on those parties, and the Supreme Court or Court of Appeals would be forced to dismiss the appeal for lack of a final order. The purpose of Rule 54(b)(5) was to deal with this situation by providing that once a final order is entered, any claims against named but unserved defendants (including John Doe defendants) are dismissed. See Ark. R. Civ. P. 54(b)(5).

In Global Economic Resources, Inc. v. Swaminathan, 2011 Ark. App. 249, the Arkansas Court of Appeals introduced an interesting twist to the new rule. The case has a rather lengthy history, as is outlined below.

Trial Court

The case began as a breach of contract action by Global against Susindran Swaminathan and Venkataraman Melpakkam (referred to in the remainder of this blog post as the “Individuals”), doing business as Sabare SCM Solution, Inc. Id. at 1-2. After the answer was filed, Global filed an amended complaint dismissing the Individuals without prejudice, and adding Sabare SCM Solution, Inc., a Georgia corporation, as a separate defendant. Id. at 2. The trial court dismissed Sabare SCM with prejudice, holding that the court did not have personal jurisdiction. Id. Global appealed this order. Id.

First Appeal

Although the trial court had entered an order dismissing Sabara SCM, it had not entered an order in response to Global’s motion to dismiss the Individuals. Id. Therefore, the Court of Appeals dismissed the appeal for lack of a final order. Id.

Back to the Trial Court

After the dismissal of the first appeal, Global filed another amended complaint. Id. at 2-3. This complaint included as defendants the Individuals and Sabare SCM, and also added Ganesh Kumar and Sabare USA, Inc., as defendants. Id. On the same day, Global filed a motion to withdraw its earlier motion to dismiss the Individuals. Id. at 3. Sabare SCM and the Individuals again raised personal jurisdiction as a defense. Id. On March 11, 2010, the trial court entered an order dismissing Sabare SCM and Sabare USA for lack of personal jurisdiction. Id. In the same order, the trial court stated that it was granting Global’s earlier motion to dismiss the Individuals. Id.

After this order was entered, Global claimed to have served Sabare USA. Id. at 4. Sabare USA moved to quash, arguing that the court did not have personal jurisdiction. Id. In its response, Global asked that the motion to quash be denied, and also argued that the order dismissing the Individuals was improper because there was no motion to dismiss pending at the time (because Global had withdrawn its motion to dismiss). Id.

On September 30, 2010, the trial court entered an amended order reaffirming the conclusions in its March 11, 2010 order. Id. at 4-5. Six days later, on October 6, 2010, the trial court entered an “amended amended order,” correcting an error not relevant to the subject matter of this blog post. Id. at 5. On October 25, 2010, Global filed a notice of appeal.

The Second Appeal

On appeal, the Court of Appeals dismissed the appeal, holding that the notice of appeal was not timely filed. Id. at 5-7. The problem was that after the trial court dismissed the Individuals and Sabare SCM on March 11, 2010, only Sabare USA and Gamesh Kumar remained as parties. Id. Even though Sabare USA was served approximately two weeks after the March 11 order was entered, it had not been served prior to entry of that order (presumably Gamesh Kumar was never served). Id. at 4, 6. Therefore, these two parties were “named but unserved defendant[s]” pursuant to Rule 54(b)(5), meaning that any claims against them were dismissed at the time the claims against the served parties were dismissed. Id. at 6. As a result, the March 11, 2010 order was considered the final order for purposes of the notice of appeal, meaning that the October 25, 2010 notice of appeal was not timely filed. Id.

Conclusion

As mentioned above, the intent of Rule 54(b)(5) was to correct previous outcomes that “waste[d] litigants’ time and money and scarce judicial resources.” Ark. R. Civ. P. 54 Addition to Reporter’s Notes, 2008 Amendments. The rule was meant to resolve the problem created when “a forgotten defendant[s] . . . presence destroys the finality of the judgment being appealed.” Id. In this case, however, the unserved defendant actually created finality when none was intended, and the result was that the appeal was dismissed with the merits of the case never being addressed by the appellate court.

–Andy Taylor

Ten Tips to Remember When Filing Your Next Notice of Appeal

May 19, 2011August 24, 2013 ~ Tasha C. Taylor ~ 3 Comments

Appellate attorneys suggest that you start thinking about the appeal of your client’s case from the moment you file the initial pleading. The reality is that a lot of lawyers don’t start thinking about the appeal until they are drafting the notice of appeal. If that’s you, then these ten tips are meant to help when you’re preparing your next notice of appeal. Although not an exhaustive list of the steps necessary to properly file a notice of appeal, these ten tips will help you jump-start your review of some of the relevant rules.

The notice of appeal must be filed within 30 days of the date the judgment from which you are appealing is entered, and not the date from which it was signed. See Ark. R. App. P.–Civil 4(a).
If the notice of appeal is filed after the circuit court announces its decision, but prior to the entry of the final judgment, your notice of appeal will be treated as though it was filed on the day after the judgment is entered. See Ark. R. App. P.–Civil 4(a).
Effective July 1, 2010, the notice of appeal is required to state, among other things, that “the appealing party abandons any pending but unresolved claim.” Ark. R. App. P.–Civil 3(e)(vi); see also Ark. R. Civ. P. 54(b); see also The Rule 54(b) Trap: Dealing with Non-final Orders in Cases with Multiple Claims or Multiple Parties.
The notice of appeal must designate the specific judgment or judgments from which the appealing party is appealing. See Ark. R. App. P.–Civil 3(e)(ii); see also, e.g., Hall v. Arkansas Dept. of Human Services, 101 Ark. App. 417, 278 S.W.3d 609 (2008) (holding that orders not mentioned in the notice of appeal are not properly before the appellate court).
You must contact the Court Reporter to make financial arrangements to pay for the transcript prior to stating that you have done so in the notice of appeal—and, it’s a good idea to follow up with a letter or email acknowledging that you have done so. See Ark. R. App. P–Civil 3(e)(iv).
The notice of appeal can state that you are appealing directly to the Arkansas Supreme Court, but only in appropriate cases. See Ark. R. App. P–Civil 3(e)(v); see also Ark. Sup. Ct. R. 1-2(a).
You are required to serve a copy of the notice of appeal or notice of cross-appeal upon counsel for all other parties by a form of mail that requires a signed receipt (and not by regular first class mail). Don’t forget to change your certificate of service to indicate that you have complied with this rule. See Ark. R. App. P.–Civil 3(f).
If the appellant does not designate the entire record and all the proceedings and evidence in his case, then, in addition to the notice of appeal and designation of record, he is required to also serve a concise statement of the points on which he intends to rely on the appeal. See Ark. R. App. P.–Civil 3(g).
The timely filing of a notice of appeal is jurisdictional; thus, the appellate court is required to raise the issue of subject-matter jurisdiction on its own motion. See, e.g., Stacks v. Marks, 354 Ark. 594, 127 S.W.3d 483 (2003) (appeal dismissed where the Court determined on its own motion that the notice of appeal was untimely).
Notices of appeal in the context of post-judgment motions can be tricky, tricky, tricky. There is no one rule or tip to summarize the variety of problems that can arise when trying to properly file a notice of appeal in the context of post-judgment motions. If you plan to file any post-judgment motions in your client’s case, don’t do so before you carefully study the rules and case law with respect to how those motions can affect the deadlines for properly filing the notice of appeal.

Originally published in the Volume 15, Issue #2 of the Arkansas Bar Association’s Young Lawyers Section newsletter, In Brief, available at the following link: http://issuu.com/arkansas_bar_association/docs/inbrief_spring11?mode=embed&layout=http%3A%2F%2Fskin.issuu.com%2Fv%2Flight%2Flayout.xml&showFlipBtn=true. Republished here with permission.

–Tasha Taylor

Judge Posner, the Blue Book, and Arkansas Citation Resources

February 22, 2011August 24, 2013 ~ Andy Taylor

Judge Richard Posner, of the U.S. Court of Appeals for the Seventh Circuit, created quite a stir lately with his law review article in the Yale Law Journal, in which he criticized the Blue Book’s citation format. Though his article criticizes many aspects of the Blue Book (its size, for example), he is particularly critical of its system of abbreviation:

An example that I have picked literally at random is “C.Ag.” What does “C.Ag.” stand for? Why, of course, the Código de Águas of Brazil. Now suppose one had occasion to cite the Código de Águas. Why would one want to abbreviate it? The abbreviation would be meaningless to someone who was not a Brazilian lawyer, and perhaps to Brazilian lawyers as well (but do they abbreviate Código de Águas “C.Ag”?). The basic rule of abbreviating, ignored by the authors of The Bluebook, is to avoid nonobvious abbreviations: don’t make the reader puzzle over an abbreviation, as The Bluebook does routinely. Consider “Temp. Envtl. L. & Tech. J.,” “ILSA J. Int’l & Comp. L.,” “Emp. Rts. & Emp. Pol’y J.,” and “AIPLA Q.J.” These are names of journals. Now try figuring out “B.T.A.M. (P-H),” “A. Ct. Crim. App.,” “A.F. Ct. Crim. App.,” “C.G. Ct. Crim. App.,” “N-M Ct. Crim. App.,” “Ne. Reg’l Parole Comm’n,” and “Cent. Ill. Pub. Serv. Co.” What is the point? It’s as if there were a heavy tax on letters, making it costly to write out Coast Guard Court of Criminal Appeals instead of abbreviating it “C.G. Ct. Crim. App.”

Judge Posner is so dissatisfied with The Bluebook that he has drafted his own citation manual, which is used by the clerks who assist him in drafting his opinions. The manual is approximately three pages long (or, in Judge Posner’s words, “one one-hundredth the length of The Bluebook”).

While Arkansas appellate attorneys might not want to rely on Judge Posner’s 3-page manual when drafting appellate briefs in Arkansas, there are resources available to Arkansas attorneys (in addition to the Blue Book) that can assist with proper citation in appellate court briefs. The website of the Arkansas Reporter of Decisions provides several of these resources:

The House Style Guide–One of the most helpful resources provided by the Reporter of Decisions is the House Style Guide, which is the style guide used by the Arkansas appellate court judges and their law clerks when drafting opinions. The House Style Guide provides information on Arkansas citations as well as punctuation, word usage, possessives, and other grammar and stylistic conventions used by Arkansas’s appellate courts.
Citations Guidelines–For a brief overview of citations to opinions of the Arkansas Supreme Court and Arkansas Court of Appeals, the Citations Guidelines page is also helpful.
Citations Page–the Citations Page provides more detailed citation examples, including examples of citations to opinions of appellate courts of all 50 states, along with various rules, law reviews, and other materials.

For more information about how use the new citation format in Arkansas pursuant to Arkansas Supreme Court Rule 5-2(d)(2), check out our previous blog post on the topic, Using Arkansas’s New Citation Format.

If you want even more information about using citations in Arkansas trial court and appellate court briefs, the UALR William H. Bowen School of Law will be hosting a free CLE on Monday, March 7 at 11:30. The CLE, entitled Citation Insights: The Bluebook, the ALWD Citation Manual, and the Arkansas Supreme Court’s Citation Rules and Practices, will be presented by Professor Coleen Barger. Attorneys who attend can receive 1 hour of CLE credit. There is no charge for the CLE, but there is a $5 charge for lunch. If you plan to attend, please email Haley Walker at hewalker@ualr.edu.

–Andy Taylor

Rule 54(b) Strikes Twice . . . in the Same Case.

February 10, 2011March 12, 2014 ~ Andy Taylor ~ 5 Comments

Case: Beverly Enterprises Inc. v. Keaton (Beverly II)

Appellate Practice Tip: Before appealing, make certain that all claims against all parties are either properly dismissed (meaning that a court order is entered) or adjudicated. Otherwise, the order from which you are appealing is a non-final order, and the Supreme Court will refuse to reach the merits of the appeal. See Ark. R. Civ. P. 54(b).

Case Explanation: The Arkansas Supreme Court’s recent decision in Beverly Enterprises Inc. v. Keaton (Beverly II) represents the second time that the same case has been dismissed without prejudice as a result of a Rule 54(b) problem. 2011 Ark. 7; see also Beverly Enterprises, Inc. v. Keaton, 2009 Ark. 431 (Beverly I).

The Plaintiff in Beverly filed suit both individually and in her capacity as administratrix of the estate. Beverly I, 2009 Ark. 431, at 1. In the original lawsuit, there were three defendants, all of which were business entities that were affiliated with Beverly Enterprises, Inc. (the “Beverly Defendants”). Beverly I, at 2. There were five claims alleged in the original complaint:

Violation of the duty of care under the Arkansas Medical Malpractice Act;
Violation of the general duty to provide adequate and appropriate custodial care and supervision;
Violation of the Arkansas Long Term Care Resident’s Rights Statute;
Deception in representing that they could provide proper care; and
Violation of the Arkansas Deceptive Trade Practices Act.

Id. at 2.

The plaintiff later amended her complaint to add a breach of fiduciary claim against the Beverly Defendants, and also added an additional Beverly entity and nine Beverly executives as defendants on that claim. Id. at 2. The amended complaint also added a claim for violation of the Uniform Fraudulent Transfer Act against all of the above defendants, as well as one other individual and five other entities. Id. at 2-3.

The claims and parties are somewhat complicated, so they are summarized in the table below. To add some level of clarity, the parties referred to in this blog post as the “Beverly Defendants” are indicated in orange.

Source Document	Claim	Defendants
Original Complaint	Violation of Arkansas Medical Malpractice Act	Beverly Enterprises, Inc. Beverly Health and Rehabilitation Services, Inc. Beverly Enterprises – Arkansas, Inc., d/b/a Beverly Healthcare – Camden)
Original Complaint	Violation of General Duty To Provide Adequate and Appropriate Custodial Care	Beverly Enterprises, Inc. Beverly Health and Rehabilitation Services, Inc. Beverly Enterprises – Arkansas, Inc., d/b/a Beverly Healthcare – Camden)
Original Complaint	Violation of Arkansas Long Term Care Resident’s Rights Statute	Beverly Enterprises, Inc. Beverly Health and Rehabilitation Services, Inc. Beverly Enterprises – Arkansas, Inc., d/b/a Beverly Healthcare – Camden)
Original Complaint	Deception by Representing Ability To Provide Proper Care	Beverly Enterprises, Inc. Beverly Health and Rehabilitation Services, Inc. Beverly Enterprises – Arkansas, Inc., d/b/a Beverly Healthcare – Camden)
Original Complaint	Violation of Arkansas Deceptive Trade Practices Act	Beverly Enterprises, Inc. Beverly Health and Rehabilitation Services, Inc. Beverly Enterprises – Arkansas, Inc., d/b/a Beverly Healthcare – Camden)
Amended Complaint	Breach-of-Fiduciary Claim	Beverly Enterprises, Inc. Beverly Health and Rehabilitation Services, Inc. Beverly Enterprises – Arkansas, Inc., d/b/a Beverly Healthcare – Camden) Beverly Indemnity, Ltd. William R. Floyd Douglas J. Babb David R. Devereaux Jeffrey P. Freimark Cindy H. Susienka Patrice K. Acosta James M. Griffith Patricia C. Killing Richard Skelly, Jr.
Amended Complaint	Violation of Uniform Fraudulent Transfer Act	Beverly Enterprises, Inc. Beverly Health and Rehabilitation Services, Inc. Beverly Enterprises – Arkansas, Inc., d/b/a Beverly Healthcare – Camden) Beverly Indemnity, Ltd. William R. Floyd Douglas J. Babb David R. Devereaux Jeffrey P. Freimark Cindy H. Susienka Patrice K. Acosta James M. Griffith Patricia C. Killing Richard Skelly, Jr. Rubin Schron Fillmore Capital Partners, LLC Fillmore Strategic Investors, LLC Pearl Senior Care, Inc. PSC Sub, Inc. Geary Property Holdings, LLC

At a pretrial hearing, the plaintiff’s attorney acknowledged that no wrongful death claim had ever been alleged against any defendant, and also announced to the court that an agreement had been reached under which the plaintiff would nonsuit all claims against all defendants, except for the claims against the Beverly Defendants. Beverly I, 2009 Ark. 431, at 3. On the first day of trial, an order was entered dismissing with prejudice the plaintiff’s wrongful death claim.

After a jury trial, a judgment was entered against the Beverly Defendants on the negligence claims, and a punitive damages award was entered against two of those defendants. Id. at 3. A separate judgment was entered the same day declaring the Civil Justice Reform Act’s limitation on punitive damages unconstitutional. Id. at 3. However, no order was entered adjudicating the other claims or the other defendants. Id. at 3.

The Beverly Defendants appealed, but the Arkansas Supreme Court refused to reach the merits of the case. Id. The Court quoted Arkansas Rule of Civil Procedure 41(a), which provides that a dismissal without prejudice by a plaintiff “is a matter of right, it is effective only upon entry of a court order dismissing the action.” Id. at 4. Based on this, and based on Rule 54(b), the Court held that “a judgment is not final if it has not adjudicated all the claims against all the parties.” Beverly I, 2009 Ark. 431, at 4.

In Beverly I, only the negligence claims against the Beverly Defendants had been adjudicated. Id. at 5. The other claims and other parties had been neither properly adjudicated nor dismissed. Id. at 5. In essence, all of the claims and all of the parties in the chart above remained unadjudicated and not dismissed, except for the negligence claims against the Beverly Defendants. Therefore, the Supreme Court dismissed the appeal without prejudice.

Beverly II represented the second attempt to appeal the case. After the dismissal without prejudice in Beverly I, the trial court entered an order dismissing “with prejudice all of the Plaintiff’s claims against the Defendants save and except for the Beverly Defendants.” Beverly II, 2011 Ark. 7, at 1-2. It appears that this order properly dismissed all of the claims against the defendants who were added in the amended complaint (the defendants listed in the table above in black text). However, there were still claims remaining against the Beverly Defendants that still had not been adjudicated or dismissed. Id. at 2. Therefore, the Supreme Court held that the “remaining claims against Beverly must be properly adjudicated or dismissed before this court acquires jurisdiction to hear the appeal.” Id. at 2.

Arkansas appellate attorneys should be very careful about Rule 54(b) problems, as both the Arkansas Supreme Court and Arkansas Court of Appeals are very particular about compliance with the rule. Even where a plaintiff intends to waive certain claims, and even where it is clear from the transcript that the plaintiff intended to waive the claims, it is important to review the pleadings and orders to make certain that all claims against all parties have been adjudicated or dismissed.

–Andy Taylor