Mark James Chaney
Employment Law/Attorney’s Fees—Arkansas Supreme Court Holds Attorney’s Fees and Costs Available to Prevailing Parties in Wrongful-Discharge Actions Under Ark. Code Ann. § 16-22-308
Marlow v. United Systems of Arkansas, Inc., 2013 Ark. 460, 2013 WL 6047032 (Nov. 14, 2013).
[]The Arkansas Supreme Court recently held that awards of attorney’s fees and costs are available to the prevailing party in an at-will employment, wrongful-discharge suit under section 16-22-308 of the Arkansas Code (Repl. 1999) because such actions sound in contract law.
The holding arose from a series of claims brought by Les Marlow against his former employers, Glenn Petkovsek and United Systems of Arkansas, Inc. The claims included breach of contract, breach of the implied warranty of good faith and fair dealing, and wrongful termination in violation of public policy. At trial, a jury entered verdicts in favor of Petkovsek and United Systems. Both Petkovsek and United Systems then sought, and were awarded, attorney’s fees and costs by the circuit court.
Marlow appealed the circuit court’s award of fees and costs, arguing in part that section 16-22-308 does not apply to wrongful-discharge suits involving at-will employees because such employees do not have contracts. Therefore, he contended that such claims do not qualify as breach-of- contract actions for the purposes of awarding attorney’s fees under the Arkansas statute.
In affirming the circuit court’s award of fees and costs, the Arkansas Supreme Court relied on Sterling Drug, Inc. v. Oxford, 294 Ark. 239, 743 S.W.2d 380 (1988), in which Arkansas joined a minority of states by establishing that claims of wrongful discharge in []violation of public policy are actions sounding exclusively in contract law and are subject to contract remedies. Under Sterling, wrongful discharges in violation of public policy violate an implied contract term that exists in every employment relationship, even at-will relationships. Therefore, wrongful-discharge actions are breach-of-contract claims governed by section 16-22-308, which allows an award of fees and costs to prevailing parties at the circuit court’s discretion.
In Marlow’s dissent, Justice Hart, joined by Justice Baker, contended that the General Assembly never intended section 16-22-308’s breach-of-contract language to cover suits involving “the legal fictions of implied contract and quasi contract,” such as wrongful discharge in violation of public policy. Also writing in dissent, Justice Hoofman noted that attorney’s fees were not at issue in Sterling Drug, and therefore, the case was not controlling authority in Marlow’s appeal. Moreover, Justice Hoofman agreed with Justice Hart that implied-contract claims do not fall under the breach-of-contract language of section 16-22-308, citing Pettus v. McDonald, 343 Ark. 507, 36 S.W.3d 745 (2001), for the proposition that “an implied-in-law contract is not even a contract at all, but an obligation imposed by law to do justice.”
Insurance—Arkansas Supreme Court Holds Labor Not Depreciable for Purposes of Calculating “Actual Cash Value” of Covered Losses Under an Insurance Policy
Adams v. Cameron Mutual Insurance Co., 2013 Ark. 475, ___ S.W.3d ___ (Nov. 21, 2013).
[]Upon certifying a question of law by the United States District Court for the Western District of Arkansas, the Arkansas Supreme Court determined that an insurer may not depreciate labor costs when calculating “actual cash value” for a covered loss, unless the insurance policy otherwise defines “actual cash value.”
After a tornado damaged Mark and Kathy Adams’ home in Mena, Arkansas, they filed a claim on their Cameron Mutual insurance policy, which stated that Cameron Mutual would pay the covered loss based on “actual cash value” rather than replacement value. After inspecting the damage, an adjuster valued the loss at $48,647.04, which included the cost of labor-only services such as removal of damaged material. Cameron Mutual then depreciated the amount to $39,204.88 after accounting for the labor and material required for making the repairs. The company then made a payment in that amount to the Adamses.
The Adamses filed a class action in federal court against Cameron Mutual for breach of contract, alleging that Cameron Mutual underpaid on their policy by depreciating the cost of labor-only services as part of their “actual cash value” calculation. Because their policy did not define “actual cash value” or address depreciation of labor, the Adamses alleged the term “actual cash value” is ambiguous and argued that the court should construe the term in the policyholders’ favor.
In response, Cameron Mutual asserted that the policyholders knew—by purchasing the cheaper “actual cash value” policy instead of a replacement-value policy—that Cameron Mutual would reduce any recovery by the amount of depreciation. Further, Cameron Mutual argued that “actual cash value” is not ambiguous, and that only the []method of calculation was in dispute. Finally, Cameron Mutual argued that the “prevailing view” is that insurance companies apply an appropriate amount of depreciation to all costs, including labor, and if Arkansas found otherwise, insurance premiums within the state would rise as a result.
In considering the issue, the Arkansas Supreme Court followed the dissenting opinion in the Oklahoma Supreme Court’s decision, Redcorn v. State Farm Fire & Casualty Co., 55 P.3d 1017, 1022 (Okla. 2002) (Boudreau, J., dissenting), which reasoned that “[t]he very idea of depreciating the value of labor is illogical.” The Arkansas Supreme Court further quoted the Redcorn dissent, emphasizing that “[a]llowing [the insurer] to depreciate the cost of labor would leave [the insured] with a significant out-of-pocket loss, a result that is inconsistent with the principle of indemnity.” (emphasis omitted) (quoting id. at 1025). In addition to the Redcorn dissent, the Arkansas Supreme Court looked to Arkansas Insurance Department Bulletin 13A–2013, which states: “Labor of any kind related to repair, rebuild, or replacement of covered property cannot be depreciated.”
Based on such persuasive authority, the Arkansas Supreme Court deemed the term “actual cash value” ambiguous and, therefore, construed it in favor of the policyholders. Accordingly, the Adams court held that insurance companies may not depreciate the costs of labor to determine the actual cash value of a covered loss when the insurance policy does not define “actual cash value” to mean otherwise.
Concurring in the judgment, Justice Hart, joined by Justice Baker, agreed that the term “actual cash value” in the instant agreement was ambiguous and should be liberally construed in favor of the policyholder. However, Justice Hart believed that the Adams majority’s attempt to define “actual cash value” was improper because such an affirmative definition exceeded the scope of the certified question. Finally, Justice Hart did not approve of the majority’s reliance on an Oklahoma dissent to determine Arkansas law.
Criminal Law/Special Prosecutors—Arkansas Supreme Court Holds Nolle Prosequi Motion Does Not Trigger a Circuit Court’s Statutory Power to Disqualify an Elected Prosecutor
Smith v. Simes, 2013 Ark. 477, ___ S.W.3d ___ (Nov. 21, 2013).
[]The Arkansas Supreme Court recently held that a criminal prosecutor’s decision to nolle pros a criminal charge does not trigger a circuit court’s power to disqualify an elected prosecutor and replace him with a special prosecutor under subsection 16-21-112(a) of the Arkansas Code (Repl. 1999).
On April 29, 2011, Tony Smith was arrested and charged with aggravated robbery and capital murder in Phillips County. Prosecutor Fletcher Long and Deputy Prosecutor Todd Murray moved to nolle pros the charges against Smith because the State’s key eyewitness was unavailable. After a hearing, the circuit court denied the motion and found that Long’s request to nolle pros was a “‘formal announcement of [Long’s] disqualification’” from the Smith case. Invoking subsection 16-21-112(a), the circuit court then appointed Ronald L. Davis, Jr., as special prosecutor and set a date for a jury trial on the capital-murder charges against Smith.
On September 16, 2013, Smith filed an amended petition for writ of prohibition or, in the alternative, a writ of certiorari with the Arkansas Supreme Court, seeking reinstatement of Long as prosecutor for the case, a grant of the nolle prosequi motion, Smith’s release from jail, and disqualification of Circuit Court Judge L.T. Simes from the case. The Arkansas Supreme Court accepted the petition and stayed the circuit court proceedings.
Under subsection 16-21-112(a) of the Arkansas Code, a circuit court may disqualify an elected prosecutor if that prosecutor “neglects, or fails from sickness or any other cause, to attend any of the courts of the district for which he was elected and to prosecute as required by law.’” (quoting ARK. CODE. ANN. § 16-21-112(a) (Repl. 1999)). Further, the Arkansas Supreme Court noted that, outside this statutory []authority, circuit courts only have the power to appoint special prosecutors in “unique circumstances” where the elected prosecutor “‘is being investigated or charged with an illegal activity.’” (quoting Venhaus v. Brown, 286 Ark. 229, 232, 691 S.W.2d 141, 143 (1985)).
In response to Smith’s petition, the circuit court argued that Long’s lack of diligence in pursuing the case against Smith qualified as “neglect” of and “failure to attend” to the duties of his office under the statute. Therefore, the circuit court was acting within its discretion in disqualifying Long and appointing a special prosecutor.
In rejecting the circuit court’s interpretation of subsection 16-21-112(a), the Arkansas Supreme Court held that a prosecutor’s filing of a motion to nolle pros does not indicate a neglect of or failure to attend to the duties of his office under the language of the statute. Arkansas law grants both prosecutors and judges “great discretion” in performing their duties. Prosecutors have the discretion to request the dismissal of charges, and the court has great discretion to grant or deny that request. But the court does not have discretion to disqualify an elected prosecutor, except under a very limited set of circumstances. Finding none of those circumstances present in the record, the Arkansas Supreme Court issued a writ of certiorari ordering the Phillips County Circuit Court to rescind its orders disqualifying Long and appointing Davis. 1
However, the Arkansas Supreme Court refused to override the circuit court’s dismissal of the nolle prosequi motion. The court also refused to address Smith’s request to disqualify Judge Simes because Smith had not properly preserved the argument at the circuit court level. Instead, the court remanded the matter to Judge Simes’s court with instructions to promptly set a trial date.
Child Custody/Non-Cohabitation—Arkansas Supreme Court Holds That the State’s Public Policy Against Unmarried Romantic Cohabitation Does Not Require Courts to Include Non-Cohabitation Provisions in All Custody Orders
Moix v. Moix, 2013 Ark. 478, ___ S.W.3d ___ (Nov. 21, 2013).
[]The Arkansas Supreme Court held that state public policy against unmarried cohabitation does not mandate circuit courts to include non-cohabitation provisions in every child-custody order. Rather, courts should craft orders to serve the best interests of the child, as determined on a case- by-case basis, which may or may not necessitate a prohibition or limitation on cohabitation.
When John and Libby Moix divorced in 2004, they entered into a joint-custody agreement for their three children, which included a prohibition on overnight guests of the opposite sex. In May 2005, Libby Moix filed a petition to modify visitation and grant her full custody after John Moix began a romantic relationship with a male live-in companion, Chad Cornelius. The circuit court granted Libby Moix full custody of the youngest Moix son. However, the parties largely ignored the restriction, and John Moix continued to have regular overnight visitation with his youngest son until 2009 or 2010, when John Moix (a pharmacist by occupation) entered into an in-patient rehabilitation program to address a prescription-drug addiction. After John Moix completed treatment and Libby Moix remarried, John contended that Libby severely reduced his visitation with the youngest son despite the son’s stated desire to spend more time with his father. In May 2012, John Moix filed a petition for modification of visitation and child support, seeking overnight visitation, as well as holiday and extended summer visitation.
At the hearing on John Moix’s petition, the court heard testimony that John had recovered from his addiction and regained his pharmacist license. Moix’s partner, Cornelius, testified that he and John had been in a monogamous []relationship for seven years and had applied for a marriage license in Iowa. Several other witnesses provided testimony that the couple maintained high character and provided a loving and supportive environment for Moix and Cornelius’s respective children.
Libby Moix opposed the petition, claiming that John Moix and Cornelius’s relationship would negatively impact the youngest Moix son and that Cornelius had a threatening and controlling presence. Libby also claimed to have found illegal steroids and needles while cleaning John Moix’s home in 2009 and expressed concern that John would relapse. In rebuttal, John Moix denied ever using intravenous drugs.
The circuit court granted John Moix’s petition for expanded visitation, including overnight visitation, as being in the best interests of the child. However, the order included a non-cohabitation provision, which prohibited Cornelius from being present during the child’s overnight visits. Although the circuit court found that Cornelius posed “no threat to the health, safety, or welfare” of the child, it believed Arkansas’s public policy against unmarried, romantic cohabitation warranted such a provision.
On appeal, John Moix argued: (1) that the non- cohabitation provision violated his right to privacy and equal protection under both the state and federal constitutions; and (2) that the circuit court erred in finding Arkansas law requires non-cohabitation provisions within custody orders.
In reversing and remanding the circuit court’s custody order, the Arkansas Supreme Court avoided the constitutional arguments, relying instead on Arkansas cases holding that courts in domestic-relations proceedings must focus on the welfare and best interests of the child on a case- by-case basis.
In particular, the court relied on Taylor v. Taylor (Rexayne Taylor), 353 Ark. 69, 110 S.W.3d 731 (2003), which reversed a court that modified a custody order based solely on the alleged fact that the custodial parent now resided with a lesbian woman. Rexayne Taylor supports the proposition that courts must find “concrete proof of likely harm to the children from the parent’s living arrangement” before such an arrangement can provide the basis for modification of a custody order. (citing id.). Such proof of harm must be []governed by “evidence-based factors . . . rather than stereotypical presumptions of future harm.” (internal quotation mark omitted) (quoting id. at 83, 110 S.W.3d at 739). Therefore, Arkansas’s “long-standing public policy” disfavoring a parent’s extramarital cohabitation in the presence of children cannot override the court’s duty to craft orders in the best interests of a child.
Although courts may consider cohabitation arrangements as part of their inquiries of the child’s interest, a court’s examination must be fact-specific and focus on the “promot[ion] of a stable environment” for the child. (citing Hamilton v. Barrett, 337 Ark. 460, 989 S.W.2d 520 (1999)). The mere existence of an unmarried, romantic cohabitation cannot be a deciding factor in the court’s decision, and non- cohabitation provisions are not required for every custody order.
In dicta, the Moix court cited to the recently established precedent of Ark. Department of Human Services v. Cole, 2011 Ark. 145, 380 S.W.3d 429, which struck down an Arkansas statute prohibiting unmarried, romantically cohabitating individuals from adopting or fostering a child. The Moix court indicates that any “blanket ban” on unmarried, romantic cohabitation for custody orders— without a fact-based consideration of the impact of the relationship on the child—would also run afoul of the Arkansas Constitution and Cole.
In dissent, Justice Goodson, joined by Justice Hart, contended that the majority abandoned controlling Arkansas precedent that would affirm the blanket use of non-cohabitation provisions as always in the best interest of the child. As support, Justice Goodson noted Taylor v. Taylor (Linda Taylor), 345 Ark. 300, 47 S.W.3d 222 (2001), which upheld a circuit court’s requirement that a mother’s female sexual companion move out of the home as a condition of the mother retaining custody—despite the court failing to find a specific harm or threat of harm presented by the companion. Justice Goodson quoted Linda Taylor as holding that non-cohabitation provisions “reduce the possibilities (or opportunities) where children may be present and subjected to a single parent’s sexual encounters, whether they be homosexual or heterosexual.” (quoting id. at []304-05, 47 S.W.3d at 225).
Further, Justice Goodson argued that the majority misconstrued Rexayne Taylor, quoting the court’s opinion in that case as stating: “‘[A] parent’s unmarried cohabitation with a romantic partner, or a parent’s promiscuous conduct or lifestyle, in the presence of a child cannot be abided.’” 2 (quoting Rexayne Taylor, 353 Ark. 69, 80, 110 S.W.3d 731, 737 (2003)). Finally, Justice Goodson distinguished Moix from Cole. According to Justice Goodson’s reading, Cole only addressed blanket prohibitions on romantic cohabitation as a condition for gaining custody of a child; it did not reach subsequent prohibitions on romantic cohabitation once a parent gains custody of a child.
Writing separately in dissent, Justice Baker, also joined by Justice Hart, contended that the court should never have reached John Moix’s arguments on appeal because no material change in circumstances occurred for the circuit court to hear his initial petition for modification. Justice Baker added that even if John Moix’s arguments had been properly before the Arkansas Supreme Court, the circuit court’s decision should have been upheld because it was the result of an expressed, reasonable finding that the non- cohabitation provision was in the best interests of the child.
Employment Law—Arkansas Supreme Court Holds Retaliation Claims Under Arkansas Civil Rights Act Subject to Three-Year Statute of Limitations Period in Ark. Code Ann. § 16-56-105
Smith v. Conagra Foods, Inc., 2013 Ark. 502, ___ S.W.3d ___ (Dec. 5, 2013).
[]The Arkansas Supreme Court held that employment-based retaliation claims brought under the Arkansas Civil Rights Act (ACRA) are subject to the three-year statute of limitations for statutorily created liabilities. (citing ARK. CODE ANN. § 16-56-105 (Supp. 2011)).
Tanya Smith filed her ACRA retaliation claim against Conagra Foods, Inc., on May 7, 2012, over facts surrounding the termination of her employment in March 2010. After removing the case to the District Court for the Eastern District of Arkansas, Conagra filed a motion to dismiss the claim as barred by the one-year statute of limitations provided by subsection 16-123-107(c) of the Arkansas Code (Supp. 2011). Smith responded by arguing that the statute of limitations for retaliation was governed by the five-year “catch-all” period created by section 16-56-115, or alternatively, the three-year period established by section 16-56-105. The Eastern District certified the question to the Arkansas Supreme Court to interpret the correct applicable limitations period under Arkansas law.
In arguments to the Arkansas Supreme Court, Conagra contended the one-year limitation period created by subsection 16-123-107(c) of the ACRA for employment- based-discrimination claims should also apply to employment-based-retaliation claims created by a different section of the same statute. According to Conagra, the Arkansas General Assembly would not have intended the various employment-based claims created by the ACRA to have different limitation periods.
In rejecting Conagra’s argument, the Arkansas Supreme Court held that a plain reading of the ACRA creates two distinct claims in employment-based discrimination and employment-based retaliation, each with []different remedies and procedures. (citing Calaway v. Practice Mgmt. Servs, Inc., 2010 Ark. 432, at 4, 2010 WL 4524659, at *4). Therefore, the court maintained that no support existed for concluding that the discrimination statute of limitations period applies to retaliation claims.
Responding to Smith’s argument for application of the five-year “catch-all” period, the Arkansas Supreme Court adopted the opinion issued by the Arkansas Court of Appeals in Crites v. Cowan, 2011 Ark. App. 11, at 2, 2011 WL 51464, at *2, which held the five-year period created by section 16-56-115 does not apply to liabilities existing only by statute, such as the ACRA retaliation claim. Therefore, the Arkansas Supreme Court held the applicable limitations statute was the three-year period created by section 16-56- 105 for statutorily created liabilities where a more specific period is not available, such as ACRA employment-based retaliation.
Insurance/Mortgage—Arkansas Supreme Court Holds Insurance Policies Containing Standard Mortgage Clauses Create Separate Contracts Between Insurer and Mortgagee, Which Action of Individual Homeowner Cannot Invalidate
Nationwide Mutual Fire Insurance Co. v. Citizens Bank & Trust Co., 2014 Ark. 20, ___ S.W.3d ___ (Jan. 23, 2014).
[]The Arkansas Supreme Court held that where an insurance policy names a mortgagee as an additional insured party for a mortgaged home through a standard mortgage clause, the rescission of the policy due to acts by the homeowner will not affect the mortgagee’s ability to make a claim on the policy.
Danny and Tracy Ludwick purchased a Nationwide Insurance policy to cover their home in Van Buren, Arkansas. In that policy, the Ludwicks named Citizens Bank, the holder of their home mortgage, as “First Mortgagee” under a standard mortgage clause. A short time later, a fire destroyed the home. During the investigation, Nationwide learned that the Ludwicks had sustained three previous home fire losses that they had not disclosed on their insurance application. After learning of this material misrepresentation on the application, Nationwide voided the Ludwicks’ policy back to its inception and refunded the Ludwicks’ premiums.
As the holder of the mortgage at the time of the fire, Citizens Bank submitted a claim for losses under the policy. Nationwide denied the claim, contending that the Ludwicks’ misrepresentation made the policy void ab initio as to all beneficiaries, as if the policy had never existed. Citizens Bank brought suit in circuit court to collect on its interest in the policy as mortgagee. The circuit court granted summary judgment in favor of Citizens Bank. Nationwide appealed.
On appeal, Nationwide reasserted that once it properly rescinded the policy, the policy was void ab initio. Therefore, Nationwide contended Citizens Bank could not collect based on the mortgage clause of a policy that, under the law, never []existed or was null and void from the beginning. A mortgage clause, according to Nationwide, only protects a mortgagee when a claim is denied or a policy is cancelled or not renewed—scenarios that all rely on the one-time existence of a valid policy contract.
Although the Arkansas Supreme Court acknowledged that proper rescission voids an insurance policy, the court noted that under Farmers Home Mut. Fire Ins. Co. v. Bank of Pocahontas, 355 Ark. 19, 129 S.W.3d 832 (2003), a standard mortgage clause in an insurance policy acts as an independent contract between the mortgagee and the insurance company. Therefore, any rescission of the Ludwicks’ policy based on their actions could not affect the independent contract between Nationwide and Citizens Bank.
The Arkansas Supreme Court affirmed the circuit court’s grant of summary judgment, finding that Nationwide wrongfully denied Citizens Bank’s claim for losses on the Ludwicks’ home under the standard mortgage clause of the insurance policy.
Rules of Civil Procedure—Arkansas Supreme Court Issued Interim Report of Special Task Force on Practice and Procedure in Civil Cases Regarding Possible Changes to the Arkansas Rules of Civil Procedure Because of the Invalidation of Civil Justice Reform Act
[]The Arkansas General Assembly passed the Civil Justice Reform Act (CJRA) in 2003 (codified at ARK. CODE ANN. § 16-55-201 to -220 (Repl. 2005)), which changed a number of rules on procedure, evidence, and remedies for tort claims under Arkansas law. Over time, the Arkansas Supreme Court struck down several sections of the CJRA on separation-of-powers grounds, holding that they violated the exclusive authority granted to the Arkansas Supreme Court to set the rules for the judiciary.
On August 2, 2013, the Arkansas Supreme Court appointed a Special Task Force on Practice and Procedure in Civil Cases to consider the issues raised by the invalidated provisions of the CJRA concerning liability and damages in civil litigation, particularly regarding negligence and medical malpractice.
On December 31, 2013, the Task Force submitted to Chief Justice Hannah a report outlining its proposed changes to the Arkansas Rules of Civil Procedure and the Arkansas Rules of Appellate Procedure. The proposed changes concerned the allocation of nonparty fault, filing and sanction requirements for medical-malpractice cases, the Collateral Source Rule, and the use of government surveys or inspection reports in medical-malpractice cases. A month later, on January 30, 2014, the Arkansas Supreme Court published an additional section of the Task Force report, addressing proposed changes to Rule 702 of the Arkansas Rules of Evidence regarding the “same specialty” requirement for expert witnesses in medical-malpractice cases. The Task Force’s proposed rule changes and report were open for comment until March 14, 2014.
In re Special Task Force on Practice and Procedure in Civil Cases,
2014 Ark. 5, ___ S.W.3d ___ (Jan. 10, 2014) (per curiam). 3
[]As part of the report, the Task Force recommended amendments to Rules 3, 9, 11, 42, 49, and 52 of the Arkansas Rules of Civil Procedure. They also recommended the creation of a new rule, designated as Rule 11.1 of the Arkansas Rules of Civil Procedure. Additionally, the Task Force recommended amendments to Rule 8 of the Arkansas Rules of Appellate Procedure.
I. ALLOCATION OF NONPARTY FAULT
The Task Force’s recommendations for Rules 9(h), 49(c), and 52(a)(2) of the Arkansas Rules of Civil Procedure all concern the allocation of nonparty fault.
Under the proposed changes, Rule 9(h) would become the exclusive procedural mechanism for asserting one’s substantive right to an allocation of nonparty fault, requiring a defendant to assert a contribution claim for allocation of nonparty fault in an answer or amended answer. The Task Force believed such a change would clarify a current inconsistency that exists between the procedural section of the Uniform Contribution Among Tortfeasors Act (UCATA) (codified at ARK. CODE. ANN. § 16-61-207 (Repl. 2005)) and the current incarnations of Rules 4(h), 13, and 14. The Task Force recognized that this change would not affect a defendant’s ability to bring a third-party claim or a cross- claim against a third-party.
Additionally, the amendments to Rules 49 and 52 would require a trier of fact to apportion fault between all persons or entities for the alleged harm if: (1) the plaintiff has settled with the nonparty or the defendant has made proper notice under Rule 9(h); and (2) the defendant has carried its burden of establishing a prima facie case showing the nonparty’s fault. The Task Force intended these changes to reflect the []content of section 2 of the CJRA (codified at ARK. CODE ANN. § 16-55-202 (Repl. 2005)), which the Arkansas Supreme Court invalidated on separation-of-powers grounds in Johnson v. Rockwell Automation, Inc., 2009 Ark. 241, 308 S.W.3d 135 (2009).
The Task Force noted the argument made by United States District Judge William R. Wilson, Jr., in Billings v. Aeropres Corp., 522 F. Supp. 2d 1121 (E.D. Ark. 2007), that such a consideration of nonparty fault violates substantive due process. However, the Task Force found that appellate court decisions did not support this view.
II. MEDICAL-MALPRACTICE PLEADINGS
The Task Force recommended amending Rule 11 of the Arkansas Rules of Civil Procedure and creating Rule 11.1 to address the pleading requirements and sanctions available in medical-malpractice cases.
The proposed changes would amend Rule 11 sanctions for filing a frivolous complaint to include a non-exclusive list of seven types of sanctions that a court may apply upon a violation of the Rule. These seven types of sanctions include: (1) dismissing a claim; (2) striking a pleading or motion; (3) entering a default judgment; (4) demanding payment of fees and expenses; (5) requiring payment of a penalty to the court; (6) ordering payment of damages caused by the misconduct; and (7) referring the conduct to the Supreme Court Committee on Professional Conduct. The amended Rule would not limit sanctions only to an amount necessary to serve as a deterrent.
Additionally, the new Rule 11.1 would require attorneys filing medical-malpractice complaints to file a “certificate of expert consultation” with the complaint, stating that the plaintiff’s attorney has consulted with a qualified expert who believes the case is a good-faith action. The Task Force notes that it borrowed “certification of expert consultation” language from a Tennessee statute.
These proposed changes partially reflect the spirit of section 21 of the CJRA (codified at ARK. CODE ANN. § 16- 114-209 (Repl. 2005)), which required plaintiffs to file affidavits from expert witnesses about the merits of their complaint. Section 21 required dismissal of complaints and []imposed cost sanctions against filing attorneys who did not file such affidavits within thirty days of a complaint. The Arkansas Supreme Court previously invalidated CJRA section 21 in Summerville v. Thrower, 369 Ark. 231, 253 S.W.3d 415 (2007), where the concurrence raised concerns based on conflicts with Rule 11.
III. COLLATERAL SOURCE RULE
Due to constitutional concerns, the Task Force declined to make any recommendations regarding changes to the Collateral Source Rule.
The Collateral Source Rule holds that a plaintiff’s receipt of payments or benefits from a source independent of and collateral to the defendant cannot reduce the amount of a plaintiff’s available recovery from the defendant. Subsection 15(b) of the CJRA (codified at ARK. CODE ANN. § 16-55-212(b) (Repl. 2005)), which was also struck down by the Arkansas Supreme Court in Rockwell Automation, would have abolished the Collateral Source Rule and restricted evidence of damages to only those costs of care paid directly by an injured plaintiff.
The Task Force determined that any changes to the Rules of Evidence or Procedure that reflected the General Assembly’s intent in subsection 15(b) would be unconstitutional under article 5, section 32 of the Arkansas Constitution (stating that “[n]o law shall be enacted limiting the amount to be recovered for injuries resulting in death or for injuries to persons or property”) and amendment 80 to the Arkansas Constitution (prohibiting the Arkansas Supreme Court from using its rulemaking authority to “abridge, enlarge or modify any substantive right”).
IV. SURVEYS AND INSPECTION RULES
The Task Force recognized as valid the restriction created by section 22 of the CJRA (codified at ARK. CODE ANN. §16-114-211 (Repl. 2005)) on the admissibility of government surveys and inspection records in malpractice cases.
Recognizing the Arkansas Supreme Court’s holding in Bedell v. Williams, 2012 Ark. 75, 386 S.W.3d 493 (2012), the []Task Force noted that the content of this statute is already incorporated into the Arkansas Rules of Evidence through Rules 402 and 501, which empower the Arkansas General Assembly to pass statutes creating testimonial privilege or limiting the admissibility of evidence, both of which apply to section 22.
In re Special Task Force on Practice and Procedure in Civil Cases – Final Report,
2014 Ark. 47, ___ S.W.3d ___ (Jan. 30, 2014) (per curiam). 4
Supplementing the December 31, 2013, report, the Task Force recommended an amendment to Rule 702 of the Arkansas Rules of Evidence to create a “same specialty” requirement for expert witnesses in medical-malpractice cases.
Section 18 of the CJRA amended subsection 16-114- 206(a) of the Arkansas Code, requiring medical-malpractice expert testimony to be “provided by a medical care provider of the same specialty as the defendant.” The Arkansas Supreme Court invalidated this section in Broussard v. St. Edward Mercy Health System, Inc., 2012 Ark. 14, 386 S.W.3d 385, on separation-of-powers grounds.
The Task Force recommended the amendment of Rule 702 to impose a “same specialty” requirement for experts testifying about the “applicable standard of care, compliance with that standard, and failure to act in accordance with that standard.” The requirement would apply in cases where the defendant is a health care professional in a field that commonly recognizes board-certified specializations. If the defendant health care professional does not come from a field where specialization is common, then the expert witness simply must have the same type of license, certificate, registration, or authorization as the defendant.
- After finding Long’s disqualification invalid, the Arkansas Supreme Court declined to reach the issue of whether subsection 16-21-112(a) permits the appointment of a special prosecutor to an individual case. ↩
- In her dissenting opinion, Justice Goodson emphasized the words, “in the presence of a child.” Though Justice Goodson does not elaborate, she is apparently indicating a distinction based on the fact that the mother in Rexayne Taylor only admitted to cohabitation and specifically denied that a romantic relationship existed. ↩
- Available at http://opinions.aoc.arkansas.gov/WebLink8/0/doc/319836/Electronic.aspx ↩
- Available at https://courts.arkansas.gov/sites/default/files/In%20re%20Special%20Task%20Forc e.pdf ↩