Steele Hays

In this case, plaintiff Roland L. Morgan, acting as an officer, director, and member of the Elna M. Smith Foundation, filed a derivative action under Arkansas Rule of Civil Procedure 23.1 against other directors alleging misfeasance and nonfeasance that violated the organization's bylaws and harmed its interests. The defendants moved to strike the Foundation as a party plaintiff, arguing it had not authorized the suit and that the plaintiff was no longer a member or officer. The trial court granted the motion, finding the Foundation was not the real party in interest and that the action was not properly certifiable as a derivative suit. On interlocutory appeal, the court affirmed the striking of the Foundation as a plaintiff, holding that in derivative actions the corporation is a necessary party and the real party in interest but must be aligned as a defendant rather than a plaintiff, while disagreeing with the lower court's conclusion that the Foundation was not the real party in interest and remanding to permit amendment of the complaint.

business & regulatoryprocedure

In Brown v. Aquilino, appellee Brenda Aquilino sued appellant James Edwin Brown for defaulting on payments due under a promissory note issued as part of a stock sale transaction. Brown raised multiple defenses, including that an alleged oral employment agreement between the parties supplied part of the consideration for the note and related stock sale contract. The trial court granted Aquilino's motion for summary judgment after reviewing the evidence. On appeal, the Arkansas Court of Appeals affirmed, holding that the parol evidence rule barred introduction of the oral agreement because the written note and stock sale contract were complete and unambiguous on their face regarding consideration, and the alleged oral terms would contradict those writings. The court also rejected Brown's claim that the stock return provision in the contract created an exclusive remedy upon default.

business & regulatoryprocedure

This case involved the interpretation of two homeowner’s insurance policies to determine coverage for bodily injury to Sandra Arrowood caused by her former husband James Arrowood at their former home. The insurance companies sought a declaratory judgment that the policies did not apply because the injury was intentionally inflicted, which was excluded, and that one policy did not cover the specific home. The trial court ruled that the companies failed to prove the exclusions applied. On appeal, the court reversed, holding that the evidence showed the injury was intentional based on the couple’s history of domestic violence by James toward Sandra, the circumstances of the shooting, and James’s lack of memory, which was inconsistent with an accidental act.

torts & liabilitybusiness & regulatory

In Harris v. State, the defendant was charged with theft of property, waived a jury trial, and received deferred proceedings with one year of probation under Ark. Stat. § 43-1232. The State later petitioned to revoke probation after marijuana was found in the defendant's apartment, leading the trial court to revoke probation, convict him of the original theft charge, and impose a four-year prison sentence, which it refused to reduce. On appeal, the court held that revocation requires only a preponderance of the evidence rather than proof beyond a reasonable doubt, that the marijuana discovery met this standard despite arguments about lack of direct linkage to the defendant, and that the exclusionary rule does not apply to probation revocation hearings to suppress evidence from a search warrant. The court also rejected claims that written probation conditions must explicitly warn of potential increased sentencing upon revocation. It affirmed the trial court's judgment in full.

criminal lawprocedure

This workers' compensation case involved claimant Geneva Lee Baldwin, who injured her right arm, shoulder, and back while employed as a packer and performing heavy lifting at Club Products Company. The Administrative Law Judge and full commission denied benefits after finding she had knowingly made false statements on her employment application about prior injuries and claims, satisfying the three-part Larson test adopted in Shippers Transport of Georgia v. Stepp. The Arkansas Court of Appeals reversed, holding there was no substantial evidence of a causal connection between her 1969 left-arm injury and the 1977 right-side injury, as required by the test, and distinguishing the facts from cases where such a link was proven by medical testimony or obvious circumstances. The court noted the employer's reliance on the misrepresentation but concluded the third factor was not met, remanding implicitly for further proceedings including on the change-of-physician request.

labor & employment

This case involved the Bank of Malvern suing several defendants on a promissory note for over $77,000, with the defendants admitting they signed the note but contesting liability based on lack of consideration and bank misrepresentations. After both parties moved for directed verdicts at trial, the court removed the case from the jury and ruled for the bank. On appeal, the Arkansas Court of Appeals reversed, holding that Arkansas Rule of Civil Procedure 50(a), effective July 1, 1979, abolished the prior practice allowing the court to decide the case when both sides seek directed verdicts, thereby preserving the defendants' constitutional right to a jury trial which had been improperly denied.

procedure

This case involved a dispute over whether a settlement offer of $1,000 for an unpaid promissory note on a feed purchase had been accepted and was enforceable, after the offeror later withdrew it due to delay in payment. The trial court denied the appellants' motion to declare a settlement and dismiss the underlying debt action. On appeal, the court dismissed the case without reaching the merits of the settlement issue, holding that the denial order was not a final, appealable judgment under Rule 2 of the Arkansas Rules of Appellate Procedure because it did not conclude the parties' rights or dismiss the action. The court noted that jurisdiction requires a final order and that the question can be raised sua sponte even if the parties do not address it.

procedurebusiness & regulatory

The case involved Carl Don Smith, who was convicted by a jury of possessing merchandise stolen from Gerald Mason's grocery store and sentenced to two years in prison. Smith appealed, arguing that his motion to suppress evidence should have been granted because the items were seized during a warrantless search conducted by Mason, a private citizen allegedly acting as an agent of the police in violation of the Fourth Amendment. The court affirmed the conviction, holding that the search and seizure were the independent actions of a private citizen rather than instigated or encouraged by law enforcement. The deputy's general instruction to Mason to report any leads did not create an agency relationship, and the evidence was observed in plain view through an open car door without police involvement.

criminal lawprocedure

In Gustafson v. State, the appellant was charged with burglary and theft of property and appealed his theft conviction after the trial court denied his motion to suppress evidence obtained through a warrantless seizure. Officers had approached the appellant's apartment to inquire about stolen CB equipment, observed him carry and hide items in a wooded area behind a garden, and then retrieved and identified the equipment before arresting him. The Court of Appeals of Arkansas affirmed the denial of the suppression motion, reasoning that the wooded area constituted open land rather than protected curtilage, so the appellant had no reasonable expectation of privacy under the Fourth Amendment and the seizure was permissible. The court also addressed challenges to closing arguments and sentencing-phase testimony but upheld the trial court's rulings on those issues.

criminal lawprocedure

This case concerned a 1968 contract between Claude Rice and Georgia Black McKinley involving the exchange of specific land parcels after a survey, a five-year lease of a disputed strip with renewal option, construction of a fence, and filling of a ditch. McKinley sued for specific performance after Rice failed to complete the conveyances and other obligations. The court affirmed the decree ordering specific performance, ruling that the signed letter formed a valid contract with mutual obligations and consideration, that McKinley had demonstrated readiness to perform, and that the five-year statute of limitations and laches did not bar the 1976 suit because the cause of action accrued later, after the parties voluntarily deferred the deed exchange pending unrelated litigation and after the lease term ended in 1972.

propertyprocedure

The case concerned a dispute over a trustee's sale of 397 acres of trust farmland for $108,000 to the Gregorys after an appraisal, which beneficiaries challenged as a breach of trust due to an allegedly inadequate price, insufficient notice, and the decision to sell the land in bulk rather than separately. The chancellor ruled that the sale breached the trust and invalidated it, but the appeals court reversed, finding that the trust instrument granted the trustee broad and absolute discretion to sell any or all property, making the decision binding on beneficiaries. The court reasoned that trustees are presumed to act in good faith, the burden was on the challengers to prove a breach such as gross inadequacy of price, and no evidence showed that wider notice or a different sale method would have yielded more. It further held that the chancellor had improperly considered issues not properly before the court and remanded for a decree upholding the sale.

propertyprocedure