Category: Appellate Practice

Arkansas Supreme Court Decision Clarifies Rule Regarding Termination of Consensual Guardianship, but Some Questions Remain

~ Andy Taylor ~ 1 Comment

In re Guardianship of S.H., 2012 Ark. 245, 409 S.W.3d 307 (“S.H. I“) and In re Guardianship of S.H., 2015 Ark. 75 (“S.H. II“) both address the rule that applies when a parent who originally consents to a guardianship later seeks to terminate the guardianship.  In S.H. I (decided in 2012), the Arkansas Supreme Court set forth a two-step burden shifting analysis for determining whether to terminate a guardianship in such situations.  In S.H. II (which was the second appeal of the same case, decided in February 2015), the Arkansas Supreme Court clarified the burdens of proof that apply to each step in the analysis.  S.H. II was a split opinion, however, and for reasons that will be discussed in more detail below, there is some question as to which rule will apply in the future.  Therefore, this blog post analyzes the rule from both the majority opinion (which technically appears to be a plurality opinion) and the concurring opinion, along with a note regarding which rule might apply in the future.

I. Legal Background

SH II addresses situations where a parent consents to another person (typically a family member) serving as the guardian of his or her child, and then later that parent seeks to terminate that guardianship.  This can arise in a number of circumstances, such as when a parent must leave the country to serve in the military (Witham v. Beck, 2013 Ark. App. 351) or when a parent is overcoming a drug problem (Crenshaw v. Crenshaw, 2012 Ark. App. 695).

A. Abolition of the Material Change in Circumstances Standard

For many years, appellate courts in Arkansas had “equate[d] a petition to terminate a guardianship to a change of child custody among natural parents.” Smith v. Thomas, 373 Ark. 427, 432, 284 S.W.3d 476, 479 (2008).  As a result, in order for a parent to terminate a guardianship, the parent was required to prove that there had been a material change in circumstances. Graham v. Matheny, 2009 Ark. 481, 6, 346 S.W.3d 273, 277 (2009).  In Graham, the Arkansas Supreme Court recognized that “there is confusion regarding the standard to be used in termination-of-guardianship cases.” Id. at 14, 346 S.W.3d at 280-81.  Therefore, the Arkansas Supreme Court took the opportunity to set forth five principles that apply in termination of guardianship cases.  Perhaps the most significant of those principles was that “a change-of-custody analysis using the material-change-of-circumstances standard should not be done in termination-of-guardianship cases.” Id. at 15, 346 S.W.3d at 281.

The Court in Graham noted that the guardianship statute, which provides that “[a] guardianship may be terminated by court order . . . [if] the guardianship is no longer necessary or for the best interest of the ward,” is a disjunctive test. See Ark. Code Ann. § 28-65-401(b)(3).  Nevertheless, the Arkansas Supreme Court still held that even if there is evidence that a guardianship is no longer necessary, the best interests of the child must still be examined.  The concurrence in Graham, written by Justice Hannah, joined by Justice Danielson, made the point that the statute is a disjunctive statate and argued that “[u]pon remand, the circuit court should be ordered to determine whether if for any reason, the guardianship is no longer necessary or for some other reason it is no longer in the best interest of [the ward] that the guardianship continue.” Graham, 2009 Ark. 481, at 19, 346 S.W.3d at 283 (Hannah, C.J., concurring).

The concurrence, in a footnote, made one other point: That the parties had not raised the question of whether the guardianship statute as written violated parents’ constitutional rights to the custody and control of children. Id. at 18, 346 S.W.3d at 282 (Hannah, C.J., concurring).  Specifically, the concurrence made reference to Troxel v. Granville, 530 U.S. 57, 120 Sup. Ct. 2054 (2000), in which the Arkansas Supreme Court had held in a grandparent visitation case that “there is a presumption that fit parents act in the best interests of their children.”  The Arkansas Supreme Court had also recognized this principle in a grandparent visitation case, holding that “a fit parent is given a presumption that he or she is acting in a child’s best interests.” Linder v. Linder, 348 Ark. 322, 72 S.W.3d 841 (2002).

Less than three years after the decision in Graham v. Metheny was handed down, the Arkansas Supreme Court would address head-on the issue of parental rights in the context of a termination of a consensual guardianship.

Continue reading “Arkansas Supreme Court Decision Clarifies Rule Regarding Termination of Consensual Guardianship, but Some Questions Remain” →

Temporary Custody Orders Not Appealable (And a Note of Caution)

~ Andy Taylor

Strother v. Strother

In Strother v. Strother, 2015 Ark. App. 196, the Arkansas Court of Appeals recently held that a decree that “does not contain a final award of custody” is not an appealable order.  A review of Strother, along with several other cases on this topic, reveals that the line between a final custody order and a temporary custody order is not always clear, so attorneys should be cautious before choosing not to appeal from what might appear to be a temporary custody order.

In Strother, the dad and mom had married in 2001, and the mom had filed for divorce in 2013.  In her complaint for divorce, the mom sought joint legal custody, with her having primary physical custody.  The court appointed an attorney ad litem, and eventually held a hearing “on the divorce and custody issues.”  The court then issued a letter opinion in which it granted the couple joint legal custody, and granted the mom primary physical custody.

With respect to custody issues, the circuit court’s order stated as follows:

[T]his court finds that the aforesaid orders of this court in regards [to] custody and other issues concerning the aforesaid two (2) minor children are temporary in nature; that an attorney ad litem will be appointed to represent the aforesaid two (2) minor children; that Defendant shall be solely responsible for payment of all attorney fees and expenses which will [be] owed to the attorney ad litem; and that issues concerning permanent orders in regard [to] custody and other issues concerning the aforesaid two (2) minor children will be determined in the future by agreement of the parties or by order of the court.

The Court of Appeals in this case examined whether this was an appealable order.  Rule 2(d) of the Arkansas Rules of Appellate Procedure–Civil provides that “[a]ll final orders awarding custody are final appealable orders.”  In other words, even if an order granting divorce isn’t otherwise considered a final order, if the order is final with respect to custody, then it will be final for purposes of appealing the custody determination.

In Strother, the Court of Appeals held that the order was not a “final order[] awarding custody.”  The Court of Appeals noted that “the order specifically states that issues of custody ‘are temporary in nature’ and that ‘issues concerning permanent orders in regard [to] custody . . . will be determined in the future.'”  Therefore, the Court of Appeals dismissed the appeal until a final custody award is entered.

In its opinion in Strother, the Court of Appeals cited to an Arkansas Supreme Court case, Gilbert v. Moore, 364 Ark. 127, 216 S.W.3d 583 (2005).  In that case, the trial court had entered an emergency ex parte order granting temporary custody of the couple’s child to the father.  Four days later, the trial court held a short hearing and ordered the custody of the child remain with the father, and that the mother was to receive weekend visitation.  The trial court stated from the bench:

I signed an Ex Parte Order a few days ago which placed the temporary custody in the Plaintiff, the father. I really don’t know where this child is better off long term. I guess that’s something that is going to have to be resolved at a later date. I presume both of these parties want long term custody of this child. I may or may not be right about that. In the meantime I’m going to leave the Ex Parte Order in effect; however, the child shall spend each weekend with his mother beginning 6:00 p.m. on Friday and ending on 6:00 p.m. on Sunday. And when counsel and the parties are ready for this case to be heard in its entirety on its merits thoroughly by myself or somebody, probably somebody else, and hopefully make the right decision on where this child should grow up, then that’s what will happen.

The trial court went on to state from the bench that the order would be “on a temporary basis the child should stay with the father during the week and the mother during the weekends until this case can be resolved on its merits.”  The order itself was not quite as specific as to the temporary nature of the order, but did state that custody would remain with the father “at this time.”

In Gilbert, the Arkansas Supreme Court held that the custody order was a temporary order and therefore not appealable.  This, however, is where the note of caution comes in.  The Arkansas Supreme Court held that “[w]hether a custody order is final or temporary is not dependent upon the style of the order,” and that “custody orders styled as temporary may be nonetheless final for purposes of appeal if the issue of custody was decided on the merits and the parties have completed their proof.”  In Gilbert, the basis of the holding appears to have been that “the issue of custody ha[d] yet to be determined on its merits and . . . the parties ha[d] not completed their proof on the issue.”

This seems to be consistent with previous cases cited by the Arkansas Supreme Court in Gilbert.  Although those cases predate the addition of “final orders awarding custody” to the list of appealable orders (that amendment was adopted in 1999), the holdings are still informative.  In those three cases, the key issue seems to whether there has been a final hearing on the merits.  In Sandlin v. Sandlin, for example, the Arkansas Supreme Court held that the order in that case was not appealable because “the main issue, that of custody,” had not been decided. 290 Ark. 366, 719 S.W.2d 433 (1986).  The Arkansas Supreme Court noted that it had previously held that “there can be no appeal . . . until the proof has been completed and the order entered.” Similarly, in Jones v. Jones, the Arkansas Court of Appeals held that a custody order “is final for purposes of appeal if the the issue of custody was decided on the merits and the parties have completed their proof.” 41 Ark. App. 146, 852 S.W.2d 325 (1993).

In Chancellor v. Chancellor, 282 Ark. 227, 667 S.W.2d 950 (1984), the Arkansas Supreme Court held, based on the following, that the custody order was not final:

The record reflects that appellant has not yet completed her proof. The order in the present case did not terminate any cause or right, dismiss any party from the action or conclude their rights. By its very terms it is a temporary order. The court ordered an investigation of the respective homes and ordered that a report be made to the court. It is obvious the court did not intend to take final action on this matter based solely upon the fact that the mother may be living in adultery.

This brings us back to Strother.  In that case, it appears that there had, in fact, been a hearing on the merits.  The order, however, appears to have left custody open until an attorney ad litem could be appointed and could report back to the court.  In that sense, the issue of custody was still open.

The Takeaway

Based on these cases, attorneys should never assume that a custody order is temporary based solely on the fact that the order is styled as a “temporary” order. These cases make clear that there’s more to the analysis than simply what the order is styled.  Sometimes, it might not be entirely clear to counsel whether or not a custody order constitutes a “final order[] awarding custody.”  In those situations, the best course of action is probably to file a notice of appeal as a precaution.  Otherwise, the attorney risks allowing what appears to be a temporary order become a permanent, nonappealable order.

Were Your Arguments Made in Chambers Preserved for Appeal?

~ Andy Taylor

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.

Proceedings Under Trust Code (Rather than Probate Code) Not Appealable Unless Final

~ Andy Taylor

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.

Arkansas Supreme Court’s Procedural Ruling Has Practical Effect of Temporarily Stopping Same-Sex Marriages in Arkansas

~ Tasha C. Taylor

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.

Future Obligations and Finality Problems: Nix v. Nix

~ Andy Taylor

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.

— 

The Rule 54(b) Certificate Requirement of “Specific Factual Findings”: Billingsley v. Benton NWA Properties, LLC

~ Andy Taylor

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:

— 

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

~ 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

~ 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.

Related Posts:

—

New Arkansas Appellate Court Rules Effective August 1, 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.

Appellate Court Cover Sheet

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):