The Arkansas Lawyer - Fall 2008
The Arkansas Lawyer magazine is the flagship publication of the Arkansas Bar Association. The quarterly publication communicates the news of the Arkansas Bar Association and provides brief and in-depth articles on many aspects of the legal profession. The magazine is distributed to the approximately 5,000 members of the Association as well as to other state and local bar associations and law libraries across the country.
A publication of the Lawyer Arkansas Bar Association Vol. 43, No.4, Fall 2008 online at www.arkbar.com The Arkansas Inside: Unjust Enrichment Mediation Arbitration Publisher Arkansas Bar Association Phone: (501) 375-4606 Fax: (501) 375-4901 Homepage: www.arkbar.com E-Mail: firstname.lastname@example.org editor Anna Hubbard executive director Karen K. Hutchins editorial board Philip E. Kaplan, Chair Judge Wiley A. Branton, Jr. Michelle H. Cauley Milton Fine, II William D. Haught Jim L. Julian Mary Beth Matthews Gordon S. Rather, Jr. Drake Mann David H. Williams Teresa M. Wineland oFFicers President rosalind M. Mouser Board of Governors Chair steven W. Quattlebaum President-Elect donna c. Pettus Immediate Past President richard l. ramsay Secretary-Treasurer William a. Martin Parliamentarian J. leon Johnson Young Lawyers Section Chair Gwendolyn l. rucker board oF GoverNors Thomas M. Carpenter Richard C. Downing Causley Edwards Robert R. Estes, Jr. David M. Fuqua Charles L. Harwell L. Kyle Heffley Anthony A. Hilliard Colette D. Honorable Sean T. Keith Roy Beth Kelley Harry A. Light Chalk S. Mitchell Danny M. Rasmussen Charles D. Roscopf, Jr. Brian M. Rosenthal Todd M. Turner John T. Vines Eddie H. Walker, Jr. Tom D. Womack Dennis Zolper liaisoN MeMbers Zane A. Chrisman Brian H. Ratcliff Jack A. McNulty Karen K. Hutchins Judge Michael E. Irwin Carolyn B. Witherspoon Judge John Dan Kemp, Jr. features Lawyer Vol. 43, No. 4 The Arkansas 7 Justice for a Soldier's Son: A Pro Bono Story Chad Owens and Vince Morris 10 Unjust Enrichment: A Suggested Approach for Instructing Juries in Claims at Law John C. Calhoun, Jr. and William A. Waddell, Jr. 14 Arbitration in Arkansas: A Legal Primer Stanley A. Leasure and Wayne L. Anderson 18 Ruminations on Mediation Sid McCollum 22 Practice Tip: Federal Court Mediation Judge Beth Deere 24 Supreme Court Justice Lafayatte Gregg L. Scott Stafford 25 Book Review: There When We Needed Him: Wiley Austin Branton, Civil Rights Warrior Phillip H. McMath 34 The Arkansas Real Estate Review: A New Tool For Real Estate Practitioners J. Cliff McKinney Contents Continued on Page 2 The Arkansas Lawyer (USPS 546-040) is published quarterly by the Arkansas Bar Association. Periodicals postage paid at Little Rock, Arkansas. PostMaster: send address changes to The Arkansas Lawyer, 2224 Cottondale Lane, Little Rock, Arkansas 72202. Subscription price to non-members of the Arkansas Bar Association $35.00 per year. Any opinion expressed herein is that of the author, and not necessarily that of the Arkansas Bar Association or The Arkansas Lawyer. Contributions to The Arkansas Lawyer are welcome and should be sent to Anna Hubbard, Editor, email@example.com. All inquiries regarding advertising should be sent to Editor, The Arkansas Lawyer, at the above address. Copyright 2008, Arkansas Bar Association. All rights reserved. in this issue CLE Calendar Judicial Advisory Opinions Lawyer Disciplinary Actions In Memoriam Arkansas Bar Foundation Memorials and Honoraria Classified Advertising Lawyer Vol. 43, No.4 The Arkansas 27 28 29 45 47 48 columns President's Report Rosalind M. Mouser 5 9 Young Lawyers Section Report Gwendolyn Rucker Arkansas Bar Association 2224 Cottondale Lane Little Rock, Arkansas 72202 HOUSE OF DELEGATES Delegate District 1-SE: Robert F. Thompson III Delegate District 2-SE: Jerrie Grady Delegate District 3-SE: Mark A. Mayfield, Brant Perkins, Teresa M. Franklin Delegate District 4-SE: Kathie A. Kimbrell Delegate District 5-SE: A. Jan Thomas, Jr. Delegate District 6-SE: Marshall Wright Delegate District 7-SE: Winston B. Collier Delegate District 8-SE: William N. Reed Delegate District 9-SE: Brian S. Miller Delegate District 10-SE: Brandon C. Robinson, Paul T. Bennett Delegate District 11-SE: C.C. Gibson III Delegate District 12-SE: Timothy R. Leonard Delegate District 13-SE: Matthew J. Shepherd, James E. McMenis Delegate District 14-SE: Amy Freedman, John C. Finley III Delegate District 15-SE: F. Thomas Curry, Cecilia Ashcraft Delegate District 16-SE: Jonathan D. Jones, Jacob M. Hargraves Delegate District 17-SE: Sam E. Gibson Delegate District 1-NW: Jason B. Kelley, Stephen A. Geigle, Vicki S. Vasser, Anthony W. Juneau Delegate District 2-NW: Brock Showalter, Earl Buddy Chadick, Charles L. Harwell, Tim Tarvin, Debby Thetford Nye, Paul D. Reynolds, W. Marshall Prettyman, Jr., Robert R. Estes, Jr., Charles M. Duell, Troy L. Whitlow Delegate District 3-NW: Stephen C. Smith, Kimberly J. Frazier, Rita Howard, Farrah L. Fielder, C. Michael Daily, Jeffrey D. Rickard Delegate District 4-NW: Patrick C. McDaniel Delegate District 5-NW: Brent Capehart Delegate District 6-NW: Roy Beth Kelley, John C. Riedel Delegate District 7-NW: Stephan M. Hawks, Charles E. Clawson, III Delegate District 8-NW: Jerry D. Patterson Delegate District 1-C: Gwendolyn L. Rucker, Mitchell L. Berry, M. Stephen Bingham, Brian A. Vandiver, Mark T. McCarty, Jay T. Taylor, Judge Beth M. Deere, J. Leon Johnson, Rebecca J. Denison, Michelle H. Cauley, David P. Glover, Jay L. Shue, Jr., Elizabeth Thomas Smith, Joel M. DiPippa, Khayyam Eddings, Christian Harris, Ka Tina R. Hodge, Jeffrey Dale Wood, Gill A. Rogers, Mark W. Hodge, Brett D. Watson, Patrick L. Spivey, Danyelle J. Walker, Alan G. Bryan, Tim J. Cullen, JaNan A. Davis, Jennifer W. Flinn, Anne Hughes White, Brendan T. Monaghan, Tasha Sossamon Taylor, Harry A. Light Law Student Representatives: Sloane Morgan, University of Arkansas School of Law; Amber Elbert, UALR William H. Bowen School of Law 2 The Arkansas Lawyer www.arkbar.com GROW YOUR 401(k) WISELY Six things you won't hear from other 401(k) providers... 1. 2. 3. 4. 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Box 5142 � Boston, MA 02206-5142 � firstname.lastname@example.org. Be sure to read the Prospectus carefully before you invest or send money. The Program is available through the Arkansas Bar Association as a member benefit. However, this does not constitute, and is in no way a recommendation with respect to any security that is available through the Program. 11/2007 4 The Arkansas Lawyer www.arkbar.com President's Report by Rosalind M. Mouser Your Bar at Work Rosalind Mouser's "President's Report" portrays photos of recent Association Activities Cliff McKinney at the "Huddle Up" program held for Association Committee and Section Chairs at the Arkansas Bar Center in September Rosalind, Jacque Harvey and Cindy and Scott Strauss at the Pulaski County Bar Meeting in September where Rosalind presented Scott with the Lawyer Community Legacy Award Annual Meeting Chair Harry Light leads Association members "brainstorming" for the 2009 Annual Meeting in October Rosalind learning from a Bar Leader Giant (Bill Martin) at the August Board of Governors meeting at the Winthrop Rockefeller Institute Harry Light, Tom Womack, Sean Keith and Chalk Mitchell at the August Board of Governors Meeting at the Winthrop Rockefeller Institute Rick Ramsay, Rosalind, Lamar and Donna Pettus at the Texas State Bar reception at the American Bar Association Annual Meeting in New York in August David Sterling, Donna and Lamar Pettus and Rosalind at the Tennessee State Bar reception at the American Bar Association Annual Meeting in New York in August Tasha Sossamon Taylor, Andy Taylor, Rosalind and Honorable Ray Thorton at orientation for first year students at the UALR William H. Bowen School of Law in August The Arkansas Bar Association was well represented at the Southern Conference of Bar Presidents in Annapolis, Maryland, in September Vol. 43 No. 4/Fall 2008 The Arkansas Lawyer 5 Arkansas Bar Association Member Benefits The Arkansas Bar Center Space available for: n Meetings n Receptions n Mediations n Arbitrations n Depositions n Visiting attorneys n To reserve call Michele Glasgow at 501.375.4606 or 800.609.5668 photo courtesy of Cindy Momchilov Powerful Practice Tools Discounts on Arkansas Bar Association Practice Handbooks including the recently updated: n Arkansas Domestic Relations Handbook n Handling Appeals in Arkansas n Revocable Trusts for the Arkansas Practitioner Weekly Case Summaries Summaries of the significant Arkansas Supreme Court and Arkansas Court of Appeals cases n Available online each week n Decisions updated every Monday n Available on Arkansas VersusLaw & www.arkbar.com Arkansas VersusLaw n Free Access to this online legal research library n go to www.arkbar.com n click on Arkansas VersusLaw and login n select a library to begin searching n Search Arkansas and national legal materials n Developed specifically for members n Searchable Weekly Case Summaries n Free technical support and training arkansasfindalawyer n The Web site to help potential clients find you n Register to get your name publicized on the Internet n Searchable by practice area and location n Only $75 per year n List up to 7 practice areas n Call 501.375.4606 or 800.609.5668 to register Discounts on Professional Services n Rebsamen Professional Liability Program n ABA Retirement Funds n LexisNexis n UPS n Travel with Go Next Stay in Touch n Online Member Directory n Legislative Advocacy n CLE Seminars - Reduced tuition for members n Ethics Advisory Opinions n Publications For a complete listing go to www.arkbar.com & click on Member Benefits 6 The Arkansas Lawyer www.arkbar.com Justice for a Soldier's Son: A Pro Bono Story By: Chad Owens and Vince Morris "I feel that Brenden's going to suffer for losing his dad," Sandra said, "but his dad is still taking care of Brenden. There was no way that Brenden could have gotten his benefits without legal aid. There was no way that I could afford an attorney." "It's the duty of my profession to provide legal services to those people who don't have access to them. That's one of the things that we're charged with doing as attorneys." - Craig Campbell When his father died in Iraq in 2005, three-year-old Brenden didn't just lose his dad; he also lost all of his father's financial support. Brenden didn't get any survivor's benefits from the military because his mom and dad were never married. "The support was no longer there," said Brenden's mother, Sandra. "I was confused about what I was going to do, who was going to help. I just called around and got prices for attorneys, and I found out that they were pretty expensive, especially for the work we needed. They weren't only dealing with us; they were dealing with the military also. And come to find out, there weren't a lot of attorneys who were experienced with guardianship and military benefits." And that's when attorney Craig Campbell rushed to Sandra and Brenden's rescue. Campbell, of Rogers, Arkansas, is a specialist in banking, finance and estates. He is also a pro bono attorney for the Arkansas Pro Bono Partnership. "Guardianship can be a simple process," Campbell said, "but in her case, it was not. Sandra didn't understand what the requirement was. She didn't understand the red tape that the government was laying out there in front of her in order to get these benefits paid." But within just a few months, Campbell won the Order of Guardianship. Brenden was awarded $50,000 that was put into the Guardianship Estate. Additionally, Brenden now receives a monthly survivor's benefit of almost $1,100. "I feel that Brenden's going to suffer for losing his dad," Sandra said, "but his dad is still taking care of Brenden. There was no way that Brenden could have gotten his benefits without legal aid. There was no way that I could afford an attorney." Campbell says it's all part of his job. "It's the duty of my profession to provide legal services to those people who don't have access to them. That's one of the things that we're charged with doing as attorneys." Rosalind Mouser, the president of the Arkansas Bar Association, agrees. "Attorneys should always remember the legal profession is a `service' profession," Mouser said. "The rendering of legal services to men, women and children who are the poorest and neediest in our society not only fulfills a professional obligation but also fulfills the greatest obligation of all -- service to humanity. Craig Campbell is one of 1,500 pro bono attorneys in the state of Arkansas who work to meet this challenge every day. On behalf of the over 5,000 members of the Arkansas Bar Association, I salute Craig and all of the other attorneys who work to fulfill the duty of legal services to the poor and needy." If you'd like to help families like Sandra and Brenden, please visit the Pro Bono Web site at www.arlegalservices.org. There you can register online for the pro bono organization in your area or find out more about the benefits of becoming a volunteer attorney. Once you are registered you receive access to the Online Legal Library with nearly 1,000 document resources including hundreds of legal forms, fact sheets, automated documents, videos, and the Poverty Law Practice Manual. You can select the exact case you would like either through the monthly Pro Bono Case Alerts e-newsletter or by the online case selection tool. Other resources include malpractice insurance and free CLE courses. Cases are available throughout the state. Please volunteer or donate today. Vol. 43 No. 4/Fall 2008 The Arkansas Lawyer 7 "After stuffing all I can into a UPS Express Envelope, there's room for one more thing. My discount." SM Only Brown, lets you stuff to your heart's content. No matter how many pages you put into a UPS Express Envelope, the price is the same. And Brown gives you the widest range of Express delivery options across the U.S. or to any of over 215 countries and territories served internationally. So go ahead. You can pack a lot into a UPS Express Envelope -- including your association discount. For details, call 1-800-325-7000. Special UPS Savings for Members of the Arkansas Bar Association $1.50 off UPS Next Day Air � letters 10% off UPS Next Day Air packages UPS 2nd Day Air A.M.� letters UPS 2nd Day Air A.M. packages 20% off UPS Worldwide ExpressSM letters or packages (U.S. origin only) To take advantage of these valuable discounts, call 1-800-325-7000. � Copyright 2003 United Parcel Service of America, Inc. WHAT CAN BROWN DO FOR YOU? SM 8 The Arkansas Lawyer www.arkbar.com Young Lawyers Section Report by Gwendolyn L. Rucker Heartfelt Giving What we have done for ourselves alone dies with us; what we have done for others and the world remains and is immortal. - Albert Pike On September 29, 2008, my otherwise healthy forty-two year old brother James underwent open-heart surgery for the insertion of a left ventricular assist device (LVAD). My brother is in desperate need of a new heart, and the LVAD is necessary to sustain his life until a donor heart becomes available. As you can imagine, the stress on my parents and the rest of my family is enormous, given that I unexpectedly lost a brother on October 12, 2007. As my family discussed my brother's need for a heart, it was never far from our minds that, in order for him to live, another person has to die. How could we pray for that? In preparation for the impending surgery, we quickly had to educate ourselves on heart transplantation and the process by which a donor organ is acquired. Transplants happen because of donors who unselfishly act to touch the lives of others. The Arkansas Regional Organ Recovery Agency (ARORA) published a pamphlet on organ donation that included a beautiful poem by Robert Test entitled, "To Remember Me." In it, Test talks not about an organ donor's deathbed but about a life-bed, where one's body is used to help others lead fuller lives, including sight to the man who has never seen a sunrise and a heart to a person whose own heart has pain. After reading this material, we were okay with praying for a new heart because the donor whose heart gives my brother a second chance at life will have done so out of an appreciation for life and selfless service to a fellow man. Our work in the Young Lawyers Section is no different. We are already off to a great year of service. Thanks to all of you who participated in the food drive and the volunteer night at the Arkansas Rice Depot (ARD) warehouse. We are very grateful to Amber Elbert and the numerous law students who came out between their classes to volunteer their time. If you missed out on these volunteer opportunities, we will host at least two more volunteer events with the ARD, and we will notify you of those dates. Likewise, thanks to all of you who have volunteered your services and talents to the Section. We appreciate and value your interests, and we have been able to appoint several of you to leadership positions within the Section. Each year, the elected Executive Council selflessly gives of itself for the betterment of the Association and the Section. This year, the Council held its annual retreat in beautiful Greers Ferry to develop and plan events for the 2008-2009 bar year. I would like to take this opportunity to introduce you to the Council. The Council officers are ChairElect Tony Juneau, Immediate Past-Chair Amy Freedman, and Secretary-Treasurer Courtney Crouch. Representatives for the North and West Districts are Vicki Vasser, Farrah Fielder, and Matt Davis. Council members for the South and East Districts include Paul Bennett, John Houseal, and Eddy Doman. Representing the Central District are Courtney Crouch, Brendan Monaghan, and Brandon Moffitt. Aaron Taylor and Cliff McKinney are the At-Large representatives, and Amber Elbert (UALR) and Sloane Morgan (UA) are our law student representatives. Please contact any Council member if you are interested in being more involved. Let me share with you some of our plans for the rest of 2008. tailgating � ole Miss and lsu games. In association with the UALR and UA law students, the Section plans to co-sponsor two tailgating events. We are fine-tuning the plans for these events so please stay tuned for further updates. If you are not on the Section listserv, we encourage you to contact Rando Hicks (rhicks@arkbar. com) to join. This is the best way for you to receive notification of YLS activities. receptions. We have three receptions scheduled for the remainder of the year. First, Java with the Judges will present the opportunity for new lawyers to mix and mingle with members of the judiciary. This event will be held at the Little Rock Embassy Suites prior to registration at the Supreme Court Practicum on Wednesday, November 4. Second, we will host a reception in the Dean's Gallery at the Bowen School of Law immediately following the Thursday CLE programming at Bridging the Gap on November 5. Please pass the word, mark your calendars, and make plans to attend these events. Third, the Council will sponsor an after-work mixer this fall. Drinks and hors d'oeuvres will be provided. At the mixer, we will discuss volunteer opportunities and allow you to sign up for specific projects in which you are interested. You will receive an invitation to this event at a later date. We all lead busy lives, filled with obligations to our families and jobs, and we recognize that service to the association is voluntary. Nonetheless, so many of you still make the time to give selflessly of yourselves for the greater good. As we enter into this holiday season, consider giving more of yourself, whether you volunteer in the association or give to your community in some other way. Undoubtedly, your actions will positively affect the lives of someone in need. 9 Vol. 43 No. 4/Fall 2008 The Arkansas Lawyer UNJUST ENRICHMENT: A SUGGESTED APPROACH FOR INSTRUCTING JURIES IN CLAIMS AT LAW By John C. Calhoun, Jr. and William A. Waddell, Jr. The dispute was submitted to the jury under a sweeping instruction which permitted a verdict for the plaintiff if the jury should find that in equity and good conscience the money ought to be repaid by the defendant. It is not surprising that the jury returned a verdict for the plaintiff, because her unhappy predicament would appeal to anyone's sense of fairness. It is surprising to me, however, that the judgment is being affirmed, for I can discover no legal theory to support the decision. Justice George Rose Smith, Dissenting.1 ury instructions in unjust enrichment cases have been an issue since the early days of Arkansas jurisprudence.2 Recent Arkansas cases have highlighted the types of unjust enrichment claims that may be presented to a jury,3 but little attention has been given to the elements of jury instructions for such claims. Because parties to a claim at law are entitled to have the jury instructed on the claims and defenses they raise, the determination of the essential elements for unjust enrichment claims is perhaps the most important part of trying such a case. This article discusses such claims and suggests an approach for instructing a jury when unjust enrichment issues are tried at law. Arkansas cases frequently make the following statements of black letter law about unjust enrichment: � Itistheprinciplethatonepersonshouldnotbepermittedunjustlytoenrichhimselfattheexpenseofanother, but should be required to make restitution of or for the property or benefits received, retained, or appropriated, where it is just and equitable that such restitution be made, and where such action involves no violation or frustration of law or opposition to public policy, either directly or indirectly.4 � Anactionbaseduponunjustenrichmentismaintainableinallcaseswhereapersonhasreceivedmoneyunder such circumstances that, in equity and good conscience, he ought not to retain it.5 � Tofindunjustenrichment,apartymusthavereceivedsomethingofvalue,towhichhewasnotentitledand which he must restore.6 � Onewhoisfreefromfaultcannotbeheldtobeunjustlyenrichedmerelybecauseonehaschosentoexercisea legal or contractual right.7 � Theremustbesomeenrichmentorbenefittothepartyagainstwhomtheclaimismade.8 � Theremustbesomeoperativeact,intent,orsituationtomaketheenrichmentunjustandcompensable.9 While these statements can all be generally appreciated in an abstract way, they are not sufficient for a jury instruction. They are not only overly simplistic, ignoring certain essential elements as discussed below, but they also essentially create a standardless instruction that would permit a jury to simply "do equity" rather than to apply objective standards of law to disputed fact issues. The dissenting opinion of Justice George Rose Smith quoted above illustrates this problem perfectly.10 "Doing equity" in a case at law is hardly the permitted province of a jury. Moreover, since there are specific issues, defenses, and remedies to be considered in the many types of unjust enrichment claims (as noted, for example, in the forthcoming Restatement (Third) of Restitution and Unjust Enrichment11 ), a jury cannot properly do its job if simple statements of unjust enrichment principles are given in the abstract and are not tied to the specific type of claim. Therefore, a closer look at unjust enrichment cases tried at law is necessary to discern the essential elements required to prove the particular claim at issue. Arkansas case law is clear that claims sounding in the common law form of action known as assumpsit may be tried at law to a jury.12 The most common claims sounding in assumpsit are claims for money had and received, quantum meruit, and quantum valebant, all of which are discussed below. While it may be possible to state a general instruction for these three claims, there are at least two problems with such an approach. 10 The Arkansas Lawyer www.arkbar.com J First, there is no Arkansas Supreme Court opinion that delineates the elements of any of the claims, and, therefore, any statement of the essential elements of those claims is arguably nothing more than one's opinion. The authors acknowledge that the sample instructions presented below represent their opinion as well, and they do not presume to state the final word on claims involving unjust enrichment at law. Rather, the intent is to highlight the underlying concepts and to begin a discussion that will promote the reasoned development of the claims in Arkansas. Such an approach is preferable to the ad hoc development of unjust enrichment claims as attorneys and trial courts attempt to instruct juries on a case by case basis. Second, general instructions assume that any case involving, for example, a claim for money had and received will always contain the same essential elements stated in the same way. That assumption is not valid, as evidenced by a number of cases decided in different contexts. Those who favor the generic approach may point to general instructions in other states, but the decision of another state not to address the issues raised in this article is not a reason to settle for inadequate treatment of this important issue. unjust enrichment claims in common law assumpsit The Arkansas Supreme Court's opinion in First Nat'l Bank of DeWitt v. Cruthis cor- rectly noted that unjust enrichment claims tried at law are those sounding in assumpsit, a common law form of action which is rarely discussed today. As Professor Dan Dobbs has noted, "[t]he connection to assumpsit is obscure to modern minds."13 Professor Dobbs' treatise provides an excellent discussion of how the assumpsit cause of action developed into different counts such as quantum meruit and money had and received.14 However, he is quick to point out that the old terms are not susceptible of practical application today: Lawyers and judges today refer to restitution in these strange terms for convenience. But the incidents of assumpsit no longer control either the theory or the procedures for recovery of restitution, so words like assumpsit and quantum meruit should be used as reference only and not to suggest that restitution is limited by ghosts of ideas that were never more than fictions to begin with.15 While courts and practitioners have heeded Professor Dobbs' admonition and have not limited unjust enrichment claims to the concept of assumpsit or its subsidiary counts, there is a danger that courts may race past a critical analytical stage in the development of such claims. That lack of analysis and, in the case of jury instructions, the failure to identify essential elements for the jury to consider, can result in a restitution claim being decided on nothing more than a particular jury panel's view of what is "unjust" or what it views as "equity and good conscience." Thus, the need to define the essential elements of an unjust enrichment claim at law is critical to the fair determination of claims for both plaintiffs and defendants. The failure to analyze a claim for unjust enrichment can result in the waste of resources and reversal on appeal. In Dickey v. Royal Banks of Missouri, Judge Morris Sheppard Arnold noted the lack of certainty of claims for money had and received under Missouri law: The action for money had and received is "a very broad and flexible action," and "the tendency of the courts is to widen rather than restrict its scope." [citations omitted] ... John C. Calhoun, Jr. is a partner with the law firm of Hilburn, Calhoon, Harper, Pruniski, & Calhoun, Ltd. William A. Waddell, Jr. is a partner with the law firm of Friday, Eldrege & Clark. Vol. 43 No. 4/Fall 2008 The Arkansas Lawyer 11 Nevertheless, although it is broad and appeals to a court's sense of equity and common right, an action for money had and received must, to be successful, fall within limits that have over the years become reasonably well demarcated. An action for money had and received will lie when the defendant received money from or for the plaintiff that belongs in good conscience to the plaintiff. For instance, if the plaintiff paid money to the defendant by mistake, [citations omitted], or under duress, [citations omitted], or by reason of fraud, [citations omitted], a claim for money had and received is made out. [citations omitted] Such an action also lies if it appears "that the money in question belonged to [the] plaintiff, [and] that it was secured by [the] defendant without [the] plaintiff's consent, and without giving any consideration." [citations omitted] One reading of these cases is that a court will force a defendant to disgorge a windfall if it is equitable to do so. [citations omitted] The difficulties in fitting this theory of relief to the facts of this case are so numerous, we believe, as to have made the legal theory upon which relief was sought and granted practically incoherent. The trial court instructed the jury that a case for money had and received would be made out if the "plaintiff's intended purpose in assigning the aforesaid insurance policy and annuity differed from the purpose for which defendant ... accepted and applied the policy and annuity," and if "in accepting and applying the proceeds of the aforesaid insurance policy and annuity, defendant ... knew facts upon which a reasonable person would suspect that the intended purpose of plaintiff in assigning the insurance policy and annuity ... was different from the purpose for which defendant ... applied the proceeds." With respect, we fail to understand how these facts, if proved, could give rise to a claim for money had and received in Missouri or, indeed, anywhere else.16 The learned comments of Judge Arnold illustrate the frustration that practicing attorneys will experience when called upon to prosecute or defend a claim for unjust enrichment through a jury trial with no stated elements. With the foregoing in mind, the following are suggested considerations for properly identifying and stating the essential elements of unjust enrichment claims. does the claim Fall Within one of the recognized Groups of unjust enrichment cases? 12 The Arkansas Lawyer www.arkbar.com Professor Dobbs has noted that unjust enrichment claims often fall into one of four categories: (1) cases in which title remains in the plaintiff but the defendant benefits by conduct such as taking the plaintiff's property; (2) cases in which title passes to the defendant through misconduct; (3) cases in which the defendant is unjustly enriched as a result of a breach of contract; and (4) cases in which the defendant unjustly receives a benefit by mistake or other circumstance, regardless of his wrongdoing.17 It is in this last category that courts and attorneys have the most difficult task in creating jury instructions. That difficulty must be balanced with recognized limits on unjust enrichment, which Professor Dobbs generally categorizes as follows: (1) protection of autonomy under volunteer rules (e.g., the plaintiff performing an unsolicited service such as house painting and attempting to force payment by an unjust enrichment claim); (2) protection of innocent purchasers; (3) protection of persons who have changed their positions after the enrichment; and (4) protection of public policy.18 Finally, consideration must be given to the interrelationship of the substantive claim for unjust enrichment, the benefit received, and the requested remedy.19 A simple instruction that merely repeats traditional and generic statements about unjust enrichment does not adequately address these issues. is the claim a Pure common law claim of unjust enrichment or does it also involve considerations of other law? As courts have focused on unjust enrichment claims at law, attention has been given to the interplay of statutory claims and claims for unjust enrichment. For example, in Ninth Dist. Prod. Credit Ass'n v. Ed Duggan, Inc., the court noted the effect of the Uniform Commercial Code on a claim for unjust enrichment.20 Other cases reviewing that case have held that the UCC's priority system cannot be avoided by an unjust enrichment claim unless there is a showing of fraud by a secured creditor.21 Thus, cases involving the UCC or a similar statutory framework of priorities will have to consider whether the statutory scheme can be altered by the application of the doctrine of unjust enrichment. is there "enrichment"? Enrichment itself is subject to varying considerations. The first is whether there is any enrichment: "Yet, it is clear from our decisions that in order for the legal theory of unjust enrichment to pertain, there must be some enrichment or benefit to the party against whom the claim is made."22 In addition, as noted in the current draft of the Restatement (Third), enrichment may involve third parties.23 Enrichment appears to contemplate both a detriment to the plaintiff and a benefit to the defendant. As phrased in Frigillana v. Frigillana, the complete concept of enrichment is captured by this question: "Did he, to the detriment of someone else, obtain something of value to which he was not entitled?"24 The conclusion that detriment to the plaintiff is an important consideration and likely an essential element of an unjust enrichment claim is reinforced by Duckworth v. Poland in which the Arkansas Court of Appeals made the following statement: "Under the circumstances of this case, we cannot agree that any detriment sustained by appellee was sufficient, in and of itself, to justify a determination of unjust enrichment."25 is the retention of the benefit by the defendant "unjust"? Enrichment by itself does not create a cause of action. There must be "unjust" enrichment or, stated another way, the enrichment must be "unjustified." Scholars have debated this issue for a long time without reaching a consensus. In his article, "When Is Enrichment Unjust? Restitution Visits An Onyx Bathroom,"26 Professor Doug Rendleman discusses this issue in detail and first notes that there is a difference between unjust enrichment claims made after a breach of either a tort or a contract duty, where this claim is made as an alternative remedy, and claims for "freestanding restitution" in which there is no breach of a "non-restitution substantive standard."27 He notes that it is much easier to identify the standard for "unjust" retention of a benefit when there is a breach of a legal duty.28 In contrast, he asks rhetorically what the standards are for "freestanding restitution"?29 While it may be easy to identify types of conduct which are clearly within the realm of "freestanding restitution," (e.g., mistake, duress, undue influence, lack of capacity, unenforceable contract), Professor Rendleman notes that there are more difficult areas.30 He then makes the statement: "Whether a restitution plaintiff may recover freestanding restitution will often depend on which of two competing approaches to Unjust Enrichment continued on page 36 Vol. 43 No. 4/Fall 2008 The Arkansas Lawyer 13 arbitration in arkansas: a legal Primer by Stanley A. Leasure and Wayne L. Anderson i. IntroductIon Arbitration is becoming more common in Arkansas as a means of resolving matters of all kinds, ranging from disputes over consumer check cashing to complex commercial transactions. An increasing number of contracts contain pre-dispute arbitration clauses by which the contracting parties agree to submit future disputes to binding arbitration. Arkansas lawyers, regardless of their area of practice, are exposed to arbitration and the myriad legal issues surrounding it. The goal of this article is to provide an overview of this area of law for those who do not routinely encounter it. For purposes of this article, "arbitration" is defined as a method of dispute resolution by which the parties agree to submit a dispute to one or more neutral third parties for binding resolution.1 Arbitration has been recognized as having a number of advantages including confidentiality, control over the timeline and process, reduced cost, and increased potential for preserving the relationship between the disputing parties.2 The arbitration agreement, which can come either in the form of a pre-dispute arbitration agreement incorporated into a contract prior to the emergence of a dispute or an agreement entered into after a dispute has arisen, governs the manner in which the arbitration will be conducted, as well the arbitrator's scope of authority. A central issue to be addressed in the agreement is the selection of the arbitrator. Many arbitral agreements call for the employment of one of the many arbitration service providers such as the American Arbitration Association, the National Arbitration Forum or Judicial Arbitration and Mediation Services. These companies make available standardized rules for adoption by the parties covering the procedural and substantive issues involved in arbitration, including the selection of the arbitrator from a roster affiliated with the provider. Arbitration service providers typically charge fees based upon the amount in controversy.3 These fees do not include the arbitrator's services which vary widely, but can range from $200 to $600 per hour.4 While the arbitration hearing is adversarial, the procedural and evidentiary rules are based on the agreement of the parties and are usually quite relaxed compared to the rigidity and complexity of the 14 The Arkansas Lawyer www.arkbar.com processes that are the hallmark of the American litigation system.5 It is widely accepted that the most expensive and time-consuming phase of litigation is discovery. One of the perceived advantages of arbitration is the limitation frequently placed on the extent of discovery. Limitations are often placed on the number of witnesses and the number of depositions which may be taken, yielding greater efficiency and lower cost.6 Subsequent to the hearing, the arbitrator renders an award, deciding the substantive issues. The parties usually elect to treat the award as binding. ii. Federal law Passed by Congress in 1925 to compel the previously reluctant judiciary to enforce arbitration clauses in contracts, the Federal Arbitration Act (FAA) is the principal federal statute dealing with arbitration.7 It was the genesis of a new national policy establishing arbitration as a favored method of dispute resolution.8 The FAA mandates enforcement of arbitration agreements in maritime transactions or transactions "involving commerce" as follows: A written provision in any maritime transaction or a contract evidencing a transaction involving commerce to settle by arbitration a controversy . . . shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.9 Congress created enforcement mechanisms to give teeth to its declaration that arbitration clauses within the ambit of the FAA are to be enforced. Courts in which litigation is instituted with respect to a matter covered by a valid arbitration clause are authorized to stay that litigation pending completion of the required arbitration.10 A party to an arbitration agreement encountering intransigence from the other side with respect to participation in arbitration may obtain an order compelling arbitration.11 Under the FAA, if the parties have so agreed, judgment may be entered on an arbitral award, giving the prevailing party access to the collection remedies available to judgment creditors.12 Given that efficiency is one of the primary aims of the FAA, the "Arbitration has been recognized as having a number of advantages including confidentiality, control over the timeline and process, reduced cost, and increased potential for preserving the relationship between the disputing parties.2" review of arbitral awards is quite limited. In fact, the FAA provides only four grounds for vacatur: 1. procurement of the award by corruption, fraud, or undue means; 2. evident partiality or corruption on the part of the arbitrators; 3. procedural misconduct on the part of the arbitrators in refusing to postpone the hearing or in refusing to hear pertinent evidence or misbehavior prejudicing the rights of a party; 4. the arbitrators exceeded or imperfectly executed their powers.13 These statutory grounds are interpreted on an exceedingly narrow basis and very few challenges are successful.14 It is axiomatic that mistakes of law or fact by the arbitrators provide no grounds for vacatur of the arbitral award.15 In addition to the statutory grounds for vacatur, some courts recognize a limited number of judicially created bases on which awards may be set aside. These include circumstances in which the arbitral award is "in manifest disregard of the law," "contrary to public policy," "irrational" or "arbitrary and capricious."16 There has been an ever increasing volume of litigation seeking to set aside arbitration awards. The attempts have been founded either on the few enumerated bases under the FAA (or one of its state counterparts) or under one of the judicially created bases. Recently, a number of courts have expressed concern about the ever increasing volume of cases in which losers at arbitration seek judicial relief. In 2007 the Eleventh Circuit Court of Appeals, in B.L. Harbert International, LLC v. Hercules Steel Co., issued a stern warning threatening sanctions to parties and their lawyers who challenge arbitration awards without a "substantial basis."17 Harbert has garnered the attention of courts and legal scholars across the country and it is likely -- for better or for worse -- that those who deign to challenge an arbitral award and fail, risk significant monetary sanctions. iii. arkansas law Most states, including Arkansas, have passed some version of the Uniform Arbitration Act. The Arkansas Uniform Arbitration Act (AUAA) was passed in 1969.18 In most respects, the Arkansas General Assembly followed the outline of the Uniform Arbitration Act. However it did elect to exclude "personal injury or tort matters, employer-employee disputes [and matters involving] any insured or beneficiary under any insurance policy or annuity contract" from the scope of the AUAA.19 The enforcement20 and vacatur21 provisions of the AUAA, with some modifications, are similar to those found in the FAA. As noted above, the courts have recognized certain judicially created grounds on which arbitration awards may be set aside. In Arkansas manifest disregard for the law22 and violation of public policy have been recognized as non-statutory grounds for vacatur.23 Establishing "manifest disregard for the law" in Arkansas, as in most states, is a high hurdle requiring a showing "that the arbitrator knew the law and expressly disregarded it."24 Procedurally, the AUAA provides for court appointment of arbitrators in the event the parties fail to agree to an appointment mechanism in their arbitration clause or that clause otherwise fails.25 The AUAA also provides a time and method for Stanley A. Leasure is an Assistant Professor of Business Law at Missouri State University. Wayne Anderson is a Professor of Business Law at Missouri State University. Vol. 43 No. 4/Fall 2008 The Arkansas Lawyer 15 "To the uninitiated, arbitration law can seem like a jurisprudential labyrinth. Its boundaries are statutorily defined at both federal and state levels with a significant overlay of common law; again both federal and state. The task is to recognize that the seminal question is whether it is the Federal Arbitration Act or Arkansas law that applies." notice of the arbitral hearing and mandates the entitlement to be heard, present evidence and confront adverse witnesses.26 Arbitrators are authorized to issue subpoenas, enforceable in court, to compel the attendance of witnesses and production of documentary evidence.27 A written award is required, signed by the arbitrators joining in the award and delivered to the parties within the time frame specified in the agreement or, if no time is specified, within the time specified by court order upon application.28 Finally, the AUAA provides that the court has the power to modify or correct an award within 90 days in the event it contains an evident miscalculation, a matter not submitted to the arbitrators has been the subject of an award, or the award is imperfect in form.29 Disputes concerning the arbitrability of claims have frequently arisen in Arkansas. The outcome usually depends on the interpretation given the arbitration agreement by the court. Giving effect to the intent of the parties is the overarching principle.30 In deference to the favored status of arbitration, doubts and ambiguities regarding arbitrability are resolved in favor of arbitration. 31 However, when the parties have clearly expressed their intention, Arkansas courts have consistently construed the agreement in accordance with its plain meaning.32 In recent years, the Arkansas appellate courts have had a surprising number of opportunities to address the issue of mutuality of obligation -- or lack thereof -- in arbitral agreements.33 The Arkansas Supreme Court has taught that arbitral agreements, like all contracts, have five essential elements: (1) competent parties, (2) subject matter, (3) legal consideration, (4) mutual agreement and (5) mutual obligation.34 The principal issue in arbitration cases has been the fifth element, mutuality of obligation. The Arkansas 16 The Arkansas Lawyer www.arkbar.com Supreme Court has interpreted mutuality of obligation to require that "an obligation must rest on each party to do or permit to be done something in consideration of the act or promise of the other" and unless both parties are bound, neither is bound.35 With respect to arbitration agreements, the court has ruled mutuality of obligation absent (and the arbitral agreement void) when one party to an arbitration agreement is required to arbitrate while the other retains the right to pursue legal or equitable remedies.36 The Arkansas Supreme Court has consistently ruled that one party to arbitration is precluded from limiting the other to arbitration as an exclusive remedy, while reserving unto itself the ability to pursue judicial remedies. In the recent case of Enderlin v. XM Satellite Radio Holdings, Inc., the United States District Court for the Eastern District of Arkansas ruled that the FAA preempts Arkansas's mutuality requirement as violative of section 2 of the FAA.37 In this case, the plaintiff filed a class action, claiming violations of the Arkansas Deceptive Trade Practices Act. In response, the defendants filed a motion to compel arbitration based upon an arbitral agreement contained in the parties' contract.38 The plaintiff resisted this motion contending, inter alia, the arbitration agreement to be unenforceable on the grounds that it lacked mutuality as required by Arkansas common law.39 The contract of the parties called for the arbitration agreement to be governed by the FAA.40 The court recognized Arkansas common law as requiring mutuality of obligation in arbitration clauses.41 The court saw the mutuality issue to be "whether the Court may require mutuality within an arbitration provision of the contract, but not as to each other provisions separately" without violating the provisions of section 2 of the FAA.42 According to the court, the answer to this question depends on whether the provisions of the FAA preempt Arkansas common law. The court concluded that the FAA does, in fact, preempt the Arkansas common law mutuality requirement "because it places the arbitration clause on unequal footing with other contract terms that do not each have to be mutual."43 iv. choice of law The question of the application of the FAA or one of its state counterparts (such as the AUAA) is another frequently litigated issue. The terms of the FAA often differ significantly from numerous state arbitration statutes. For example, in Arkansas, tort claims are excluded from the AUAA's coverage.44 They are covered by the FAA.45 In Oklahoma, arbitral provisions in nursing home contracts are prohibited. They are allowed under the FAA.46 With such differences, it is not surprising that choice of law questions arise.47 The linchpin of most of these disputes is the question of whether the transaction at issue falls within the United States Supreme Court's interstate commerce rubric. The Supreme Court has construed the FAA to be broadly applicable to contracts "affecting" interstate commerce. The outer limits of the reach of the FAA have been determined by the United States Supreme Court in a number of cases, two of which are particularly significant.48 The Supreme Court has concluded the use by Congress of the "involving commerce" language in 9 U.S.C.A. � 2 to be a signal of its intent to exercise Commerce Clause power to the broadest extent possible, making that language the functional equivalent of "affecting commerce."49 The court confirmed the Arbitration continued on page 43 The Arkansas Bar Association receives many calls from the public every day asking for the name of an attorney to help them. Our staff refers the caller to: www.arkansasfindalawyer.com Just $75/year List up to 7 practice areas Potential clients can search for you by practice area and location Help potential clients find you Call Barbara Tarkington at 501-375-4606 to register here W you? are Vol. 43 No. 4/Fall 2008 The Arkansas Lawyer 17 Ruminations on Mediation by Sid McCollum would be doing. At that time, perhaps less than twelve people in Arkansas actually had training in legal mediation. The few people who knew something about it were generally associating it with helping individuals or groups get together over some dispute that was done usually by therapists or counselors. They had not put it together with legal disputes or lawsuits. Some people looked on it as a touchy feely tree hugging type procedure where everyone held hands and sang kum-ba-yah. I even had some people ask me if mediation was some procedure where everyone set around in a circle with their legs crossed and placed their hands on their knees, with palms up and chanted OOMMM. I patiently explained that that was meditation, not mediation, and they were nothing alike. (At a much later time I secretly wished that some of the people in my mediations had spent more in the meditation state before coming to mediation.) Since this was a new concept, at least to Arkansas, it was normal and to be expected that there would be many questions about the process and how it worked and what a mediator did and what were the parties supposed to do, as well as what was the role of the lawyer. I and several other persons who were interested in getting involved in the mediation field spent hours going to various Bar Association meetings, Kiwanis meetings, Rotary meetings, and garden club meetings, as well as talking to anyone who would sit down and listen to us about how mediation worked and what its goals were and what the roles of the different parties participating in the mediation were. I feel we were able to bring home to them that mediation is not a lesser form of dispute resolution. It is not less legal, not less legitimate, and not less effective, not less binding or final, if completed successfully. It is a business like sensible and thoughtful process that settles disputes. About this time the Arkansas Dispute Resolution Commission had been created by the legislature and the members were appointed and they began meeting every quarter to primarily promote the use of and provide guidelines and outlines for mediation throughout the state of Arkansas. The primary role of the Commission was to assist the courts, but it was also to promote use of alternative dispute resolution all through the state, including governmental entities, private projects, educational entities, etc. As various lawyers tried the procedure to reach resolution in cases they had pending in court, they began to realize that it indeed would work and did work. They could see how the parties could come to a resolution and find a way to settle the case without all the expense, time, effort, strain and stress that is usually associated with a jury trial or even a non-jury trial in court. They, of course, passed the word along to other attorneys and the uses of mediation begin to grow. Courses were developed and training sessions were held so that we slowly began to get more and more trained mediators in the state. The Commission, after a three and a half year study, developed a certification program and at the same time developed courses and training sessions that allowed people to become certified. This does not mean that you must be certified to become a mediator; it just simply means that you must be certified and included on the Commission's list of certified mediators to be appointed by the court to mediate. By approximately January or February of 1997, most of the people involved in alternative dispute resolution felt that the process was about to catch on and things would be blossoming soon. We have continued to feel that way every year up until this year, as a matter of fact. Certainly the use of alternative dispute resolution processes has greatly increased. It's a new world as far as the difference in where we are today and where we were back in 1995 and 1996. However, we are still waiting for the big boom, if there is any, or at least the general acceptance of this type of procedure to help the citizens of Arkansas reach resolution in cases in the most efficient, economical, and satisfying way. 18 The Arkansas Lawyer www.arkbar.com T hirteen years ago when I stepped down from the bench to found ADR, Inc., very few people in Arkansas knew much about mediation. When I told them I was leaving my circuit court position to do mediation, they had no idea what the process was or what it was I As I stated before there have been quite a few changes and exceptional growth in the mediation field in the last ten years. Looking at all the mediation programs that are listed in the latest Resource Compendium compiled by the Arkansas ADR Commission gives you an idea of the programs that are available in Arkansas now which use mediation, provide mediation, and teach mediation, throughout the state. This Compendium shows fifteen or sixteen either countywide or statewide programs wherein mediation is used and mediators are getting experience and training. For instance: 1) the access and visitation Mediation Program, wherein parties from all over the state who are involved in a divorce in which the custody of children is at stake can get a free mediation to help them explore resolutions to the access, visitation, custody and child support issues involved in their case. 2) there are five district courts mediation programs in existence in five different counties of the state. These programs make mediation available to all persons filing a case within the district court, usually the small claims court. These court-sponsored programs exist in Craighead County, Crawford County, Lonoke County, Pulaski County, and Searcy District Court Mediation Program, which is in White County. Most of these programs were begun with a grant from the Arkansas ADR Commission, who has been given funds by the Legislature to help promote mediation and to help get new programs started throughout the state. 3a) the arkansas Farm Mediation act of 1989 set up an Arkansas Farmer Creditor Mediation Program that has been in existence probably longer then any other mediation program in the state. 3b) the arkansas state Government uniform Grievance Procedure Program allows mediation as one of the choices that a person filing a grievance may follow. 3c) the arkansas Workers compensation commission, legal advisor division also conducts mediations for injured workers and their insurance carrier or the workers employer who have differences or disputes over Workers Compensation benefits. 3d) the arkansas insurance department has set up a program known as EAGLE mediation programs, standing for Ending Arguments Gently Legally and Economical. It's a voluntary program designed to assist insurance consumers and insurers with conflict resolution in hopes of shortening the procedures and ending litigation. 3e) the arkansas community dispute resolution centers, inc., which is a corporation set up to provide for community dispute resolution and to promote peaceful and cooperative conflict resolutions, in neighborhood disputes as well as disputes with government entities. This is the first of what probably will be several dispute resolution centers that will be set up across the state in years to come. 3f ) the baxter county Juvenile services Mediation/conflict resolution training is a program that helps students learn to be mediators and resolve their own disputes without resorting to anger or violence, etc., and of course is directly connected to education as well as the Juvenile problems in a county. There is also a Saline County juvenile Court Mediation Center, a Union County Court Mediation Program and two programs at the UALR William H. Bowen School of Law, one for Dependency Neglect Mediation problems and the other for youth mediation. The Youth Mediation Project deals primarily with resolution of juvenile delinquencies and families in need of services cases. 3g) Beginning in September of 2008, a brand new program just being started is the arkansas appellate Mediation Pilot Program. This is a voluntary program that was authorized by Per Curium Order of the Arkansas Supreme Court, wherein cases on appeal can be subjected to mediation in order to try and get the matter resolved without having to resort to filing all the briefs and paperwork and the expense involved in bringing a case to appeal. The programs listed above are just a portion of all the programs that are in existence around the state wherein parties can take advantage in Alternative Dispute Resolution and save money, time and stress. Most of these are provided free for the disputants, but some involve some fees. These programs help not only the disputants find resolution to their problems, but they also provide opportunities for mediators to volunteer to do these mediations free or do them at a reduced fee in order to get experience and hone their skills. So they serve many purposes that are beneficial to the citizens of the state. Sid McCollum is a former circuit judge who is the founder and the president of ADR, Inc. He is chair of the Arkansas Alternative Dispute Resolution Commission. Vol. 43 No. 4/Fall 2008 The Arkansas Lawyer 19 "Mediation may be able to bring them to a conclusion in a day or two, or at least cut the issues down so that the trials that normally would last weeks and weeks may just last days." There are now slightly over one hundred and thirty certified mediators in the state. This is a far cry from the ten or twelve that were available back in 1995 when I first became involved in doing active mediations. That means there is a pool of mediators available to assist with the civil, juvenile, probate, family law and all other types of cases that might have come before a court, or governmental agency. They can be diverted to mediation to save all the parties that time, effort and money and still bring them to a resolution. They have had an opportunity to participate in a process that lets them decide the outcome, rather than having some government agency or court tell them what is going to happen to their lives or their case. As a natural consequence of all this growth and availability of these services, many more people are mediating and understand mediation than ever before. Nevertheless, it is always surprising to me when I check into the statistics and realize that as of September 2008, there are still thousands of lawyers licensed to practice in the state of Arkansas who have never participated in a mediation. You would think with all these mediators available and all these programs available and all the successes that have been accomplished in mediation in the last thirteen years that almost any lawyer would have at least tried it by this time. Some say transactional lawyers who don't go to court often probably don't have as much interest in mediation as trial lawyers. People who specialize in bankruptcy, or people primarily involved in probate matters, or tax planning, would not be as interested in mediation as perhaps others would be. But when one looks at the history of mediation, you can see that it has been used successfully in practically every area of the law one could name. It is not only for disputes that lead to litigation, but is helpful in bringing people to resolutions in family disputes that would never go to court, or neighborhood disputes that are not large enough to spend the money required to get a case tried. Even disagreements between brothers and sisters about what dad 20 The Arkansas Lawyer www.arkbar.com said about the farm; disputes over what schools are best for the children to attend; or whether this product is best suited to be produced by the second shift or the third shift; whether the reason Ms. Jones discharge had to do with her personality conflict with her manager, or her inability to get along with her fellow workers, or was it because she is a woman, can be resolved in the process. Almost all of these subjects have been mediated and mostly to a successful conclusion or resolution, though they may not have ever gone to court or might not have even been thought about as a "court case." By listing some of the examples set out above, I did not mean to imply that small disputes are the mainstay of mediation. As the use of mediation has grown in the state of Arkansas and more and more mediators are gaining expertise, more and more multimillion dollar cases are being brought to mediation. Multi-party products liability cases, malpractice cases in all kinds of professions such as medical, legal, dental, accounting, financial advisors and others, are brought to mediation on a regular basis. Some of that may be because of the confidential nature of mediation, but I think most of the increase in this field is brought on because these cases tend to take weeks and weeks in trial, and some of them months and months. Mediation may be able to bring them to a conclusion in a day or two, or at least cut the issues down so that the trials that normally would last weeks and weeks may just last days. Just as I was surprised to see that so many lawyers have not tried mediation, I am equally surprised, from time to time, with questions that lawyers who have been mediating for quite sometime will ask me about the process or the skills involved in being a good lawyer in mediation. By that I mean representing your client well in the negotiations and information gathering that takes place within mediation. The conversation generally goes something like this: "Judge, is there any way that we can just skip the opening session for this mediation? We've been litigating this case for about two years now and we have all done our discovery and we all know what our positions are and we agree to disagree about what the facts are. So can we just go to our separate breakout rooms and begin slinging numbers back and forth?" My first response to this question is generally as follows: "Yes, I guess you could do that and maybe you could even get your case settled in the next week or so. But you wouldn't be mediating." To leave out the opening session, wherein the parties meet each other across the table face to face to explain their positions in their case and to highlight the facts they think are important to their side of the case, is the very guts of mediation. This is the chance of the parties to truly communicate with each other. It is not generally allowed in any other portion of the ritual we go through in trying lawsuits. In fact, this may be the one and only time that you as a lawyer will be able to talk directly to the parties on the other side and that your clients will be able to talk directly to the lawyers and the parties on the other side. This is the very heart of the communication that is the "magic" of mediation. It is in these sessions that the parties get to see that there is another intelligent, prepared lawyer who has looked at the facts of the case and has come up with a completely different outcome from the one their attorney has talked to them about. Or if not completely different, at least different enough that they might understand that the jury or other trier of fact might reach a separate conclusion than the one they envisioned. It also lets the parties know that they have a right to have an opinion about how the resolution of the case should occur and what should be included in the Settlement Agreement. It is the next best thing to having their "day in Court." To skip the opening session also does not allow the mediator to establish the trust between the parties and the mediator that must be done if progress is to be made later on during the course of the mediation. Also it does not allow the mediator to observe the parties as they present their case or the lawyers as they present the facts or the law connected with their case, to see just which issues are most important to the parties and which problems will be the main ones to be overcome during the course of the mediation. The mediator is learning and planning and observing the parties so as to know how to deal with them at a later time, in caucus or Mediation continued on page 42 best result the sometimes to get different tool Haveyouconsideredmediation? Remember to consider the alternatives. you need a At Jaynes Mediation we proudly support the civil trial system, but trial is not the only tool with which to settle disputed matters. Contact us today to discuss the benefits of mediation or to schedule a mediation session. Fees and charges are available upon request, as are references. Certified by the Arkansas Alternative Dispute Resolution Commission in the areas of Civil and Probate mediation. No animals were injured in the creation of this advertisement. JAYNES MEDIATION jaynesmediation.com (501) 920 4420 Providing an alternative2008 The Arkansas Lawyer 21 Vol. 43 No. 4/Fall in alternative dispute resolution Practice Tip Federal Court Mediation By Judge Beth Deere Federal Magistrate Judges are available to mediate any civil case pending in federal court, at no cost to the parties. As when trying cases, good lawyers who mediate prepare scrupulously and know what to expect. i. strike when�but only when�the iron is hot. At least ninety-five percent of civil cases in Arkansas federal courts settle, so why not mediate sooner rather than later? Resolving a case early has the obvious advantage of saving time and money for both sides. The Defendant has more room to negotiate before incurring the sometimes staggering expense of discovery, particularly since discovery is now "front-loaded" in federal court. However, early mediation is not always practical. It is best suited to cases where damages can be calculated without extensive discovery, i.e., breach of contract claims or tort cases where liability is the main sticking point. When damages are contested, it makes sense to wait to schedule mediation until the parties have conducted at least some discovery. In any case, Plaintiff's counsel should come to mediation ready to articulate why Plaintiff's demand is reasonable. This means bringing a detailed breakdown of each element of damages claimed. ii. stick to facts Once designated as the mediator, the Magistrate Judge is barred from presiding over your case and, consequently, has no power to decide it. That said, don't waste time making jury arguments in mediation. Instead, identify specific facts and exhibits that support your claim or defense, as well as those that expose your opponent's Achilles heel. iii. Prepare your client Spend time with your client explaining mediation. Mediation is not winner-take-all. Each side relinquishes its optimum outcome in exchange for finality, certainty, and the elimination of risk. To the extent you are able, talk frankly with your client before mediation about the weaknesses in your case. If you represent the Defendant, shield your client from sticker shock by explaining that "nuisance value" is now 22 The Arkansas Lawyer www.arkbar.com "Settlement through mediation empowers litigants by allowing them to control the outcome of their lawsuit. It is not appropriate in all cases, but is a valuable tool for litigators in the right case. " considerable. In fact, drop the term "nuisance value" altogether. It is meaningless, at best, and impedes settlement by irritating the aggrieved Plaintiff and misleading the Defendant. If you represent the Plaintiff, lower expectations for damages. Plaintiffs sometimes fail to appreciate the legal and practical limits on damages. The value of hurt feelings is pretty much zero. Furthermore, it is the rare corporation whose officers rush to pay big money to avoid trial. The prospect of unflattering revelations rarely looms as a Damoclean sword. Adjust expectations accordingly. Listen to your client, however, to discover whether there are remedies other than money damages that can make up part of the settlement. Defendants welcome non-monetary demands. Both parties should explore creative ways to maximize Plaintiff's benefits while minimizing Defendant's cash outlay. For example, in an employment case, consider contributions to Plaintiff's retirement plan as all or part of the settlement. iv. Prepare your case Take pains to prepare your ex parte, pre-mediation submission. Be forthright when describing the weaknesses, as well as the strengths, of your case. Include a realistic settlement range. Ex parte submissions and statements made in mediation are strictly confidential. Magistrate Judges are prohibited from "sharing" information gleaned in mediation with anyone � including the trial judge � beyond whether the case settled. This frees counsel to be candid with the Magistrate Judge, without fear of damaging the chances of winning at trial. Clients tend to remember only your encouraging words and optimistic assessments � often made before you discovered the warts on the case. As a disinterested sounding board, the mediator can administer a vital, if bitter, dose of reality to your client. v. Know what to expect on mediation day. It helps jump-start the process if there has been a demand and offer prior to mediation. By the way, it is poor form to increase your demand or lower your offer from that made prior to mediation. Moreover, it is irksome and makes it appear that you are not operating in good faith. Avoid the temptation to open mediation with a ridiculously low (from Defendant) or high (from Plaintiff) number. Normally, mediation is conducted through "shuttle diplomacy," with Plaintiff and counsel in one room and Defendant and counsel in another. The mediator ferries back and forth delivering offers and counteroffers, making suggestions and, possibly, a valuation. Mediation is a process that takes time. Even so, avoid the tedious nickel-and-dime approach. Make noticeable counter offers to avoid unnecessarily dragging out the process. As you approach your client's choke point, however, let the mediator know. All Magistrate Judges require that you bring to mediation someone with authority to settle the case. For Defendant, this means someone who could authorize paying Plaintiff's last pre-mediation demand. For Plaintiff, it means someone who has the power to accept Defendant's last pre-mediation offer. Telephone access to the person with authority to settle is a poor substitute for in-person participation, and some mediators will not permit it. Once settlement is reached, the Magistrate Judge will read the settlement terms into the record. Listen carefully to assure that all terms are correctly recited because, at that point, the settlement becomes binding. Settlement through mediation empowers litigants by allowing them to control the outcome of their lawsuit. It is not appropriate in all cases, but is a valuable tool for litigators in the right case. Mediation should be a positive experience for litigants and lawyers, but its success depends on thoughtful preparation. 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Journey to the landing beaches of Normandy, visit the Champagne Country, known for it sparkling beverage or take a train to the Loire Valley with its beautiful castles. All in all, a captivating holiday! SENSATIONAL SPAIN April (10 days/8 nights) *$1,799 PLUS AIRFARE Spain is a land of fiery excitement and wild, untamed beauty, steeped in romance, tradition and culture. Widely known for the flamenco, bullfights and fantastic beaches, Spain also offers cultural cities filled with art and history, steep mountain ranges, breathtaking countryside, and whitewashed villages. Stay in Madrid, Spain's' exciting capital, and lively Barcelona, perched on the Mediterranean coast. Visit historic Toledo, the ancient Castilian capital; and mystical Montserrat, one of the most sacred places in all of Catalonia. Spain will leave you with memories to last a lifetime. Special Airfare Program is available! *Prices are for the LAND PROGRAM and DO NOT include round-trip airfare. Prices are per person, double occupancy (plus taxes). The Land Program includes first-class hotel accommodations, daily breakfast, Go Next welcome gathering and much more! DATES & PRICES ARE TENTATIVE AND SUBJECT TO CHANGE. For additional information contact: (952) 918-8950 � Toll Free 1-800-842-9023 � www.GoNext.com Vol. 43 No. 4/Fall 2008 The Arkansas Lawyer 23 Arkansas Supreme Court Historical Society supreme court Justice lafayette Gregg by l. scott stafford After the war ended Unionist Governor Isaac Murphy appointed Gregg as chancellor of the state's sole chancery court, but the General Assembly, which contained a number of former supporters of the Confederacy, refused to confirm Gregg's appointment. When in 1867 the United States Congress passed a series of Reconstruction Acts that forced Arkansas and other southern states to adopt new constitutions, Gregg joined the newly formed Republican Party of Arkansas and was elected to one of the four associate justice positions on the Supreme Court organized under the Constitution of 1868. [The fifth member of the court was the chief justice, who was appointed by the governor.] The public perception of Gregg's service on the court was summed up by the Arkansas Gazette in his obituary: "[W]ith fairness and impartiality he served [the court] when the prejudices of [the state's] citizens was at fever heat." In 1871, while on the court, Gregg worked with Washington County leaders to persuade the legislature to locate a proposed state university in Fayetteville, and Gregg donated some of the land for the construction of the new school. Reconstruction in Arkansas ended in 1874 in the aftermath of the Brooks Baxter War. Four of the five members of the Supreme Court supported Brooks in his attempt to oust Baxter as governor of the state, and after Brooks' effort failed, the General Assembly impeached those four justices. Gregg, who managed to remain above the Brooks-Baxter fray, escaped impeachment, but his tenure on the Supreme Court was cut short later in the year by the adoption of the Constitution of 1874. The same 1874 special session of the legislature that had impeached his four colleagues named Gregg to the Board of Trustees of new State Industrial University in Fayetteville. After leaving the high court in the fall of 1874, Gregg returned to Fayetteville and the practice of law, but he found time to supervise the construction of Old Main, one of the first permanent buildings on the new Fayetteville campus. He remained a member of the Republican Party and twice ran for statewide office. In 1886 he was the Republican nominee for governor but received only about one third of the votes cast. When the 1889 Arkansas General Assembly added two associate justice positions to the Supreme Court, Gregg was the unsuccessful Republican nominee for one of the two seats. He became president of the Bank of Fayetteville in 1889 and later chaired a committee that organized the Arkansas Bankers Association. He died at his home in Fayetteville on November 1, 1891. additional reading: "Lafayette Gregg," Arkansas Gazette, November 8, 1891, page 2, column 5. "Lafayette Gregg," The Encyclopedia of Arkansas History and Culture, www.encyclopediaofarkansas.net (September 16, 2008) This article is provided by the Arkansas Supreme Court Historical Society, Inc. For more information on the Society contact Rod Miller, Arkansas Supreme Court Historical Society, Justice Building, Suite 1500, 625 Marshall Street, Little Rock, Arkansas 72201; Email: email@example.com; Phone: 501-682-6879. Lafayette Gregg, circa 1864 Photo by William Brown University of Arkansas Special Collections (Gregg Family Collection, MC 1000) Lafayette Gregg is remembered today for the prominent role he played in the early history of the University of Arkansas at Fayetteville. Less well known is his service as an associate justice of the Arkansas Supreme Court during the tumultuous years following the Civil War. Gregg was born in Alabama in 1825. His family came to northwest Arkansas when he was ten years old, and Gregg moved to Fayetteville in 1849. He read law in the office of Fayetteville attorney W.D. Reagan and was admitted to the bar. He represented Washington County for one term in the lower house of the 1855 General Assembly before being elected prosecuting attorney of the Fourth Judicial District, a post he held until the start of the Civil War. Throughout the war he remained a staunch supporter of the Union cause, and in the final years of the conflict, he recruited and eventually commanded a cavalry regiment that fought with Union forces in Arkansas. 24 The Arkansas Lawyer www.arkbar.com Book Review There When We Needed Him: Wiley Austin Branton, Civil Rights Warrior Book Review by Phillip H. McMath Anyone with the slightest interest in Arkansas history in general, and the Civil Rights Movement of our state in particular, needs to read Judith Kilpatrick's wonderful biography of Wiley Austin Branton. Professor Kilpatrick of the University of Arkansas School of Law, Fayetteville, like most good biographers, tells a story much bigger than the immediate subject. One comes away from this book with a clear understanding why Wiley A. Branton, counselor to Lyndon Johnson and Martin Luther King and colleague of Thurgood Marshall, Nicholas Katzenbach, and Vernon Jordan, was one of the most important, colorful, and interesting figures of the early civil rights struggle. Born in 1923 of black, white, and Indian ancestry, Branton did not begin life in share crop or urban poverty, but rather his family was very much a part of the Pine Bluff educated black middle-class. His maternal grandfather, James A. Wiley, was successful in various endeavors and was obviously a very distinguished and courtly gentleman. And on the male side of things, his paternal grandfather and father, James and Leo Branton, owned a flourishing taxi company, among other businesses, cleverly called "Cab 98" after its telephone number. Even though it started its operations out of a barbershop and a nearby phone booth, it eventually moved into its own office and became one of the best in town, hiring young Wiley when he turned fifteen. But, to be sure, this was the segregated, race-obsessed South, and, while both the Brantons and the Wileys occupied a kind of social middle ground between the black and white communities, the mere hint of blackness was, in the end, a ticket to the back of the bus. Consequently, the two families, and others like them in the Southern black bourgeoisie, were on the sharp end of the early fight for civil rights, and James A. Wiley was a charter member of the Arkansas chapter of the NAACP. by Judith Kilpatrick (Fayetteville, Ark.: University of Arkansas Press, 2007), 230 pages. One gets the sense that Wiley A. Branton, had he wished, could have gone north and saved himself lots of trouble. Yet, after service in the U.S. Army, like a lot of World War II veterans, he chose instead to come home and fight for racial justice in Arkansas. It was not an easy battle. While his academic record was impeccable (he did pre-law at AM&N), he was nevertheless forbidden admission to the University of Arkansas solely on the basis of race. This proscription was not merely unconstitutional, it was downright ridiculous, but the segregationists saw this as the thin edge of the wedge and resisted its elimination. Professor Kilpatrick recounts this story well -- how Branton and a handful of other "Negro" students, known as the "Six Pioneers," with the help of such men as Dr. Robert A. Leflar, pushed open the law school house door between 1948 and 1950. This reviewer remembers Dr. Leflar recounting in class the infamous story of the rail barrier built to protect the white students from one of those pioneers. It didn't last -- the students tore it down. Another professor related how another pioneer was forced to listen to lectures from the safety of the hall, but the students soon invited him in. Yet it would be a mistake to think this revolution completed itself in a 24-hour news cycle. Branton graduated in 1952 and returned to Pine Bluff, where from his law office on East Barraque Street, with the help of fares from "Cab 98" and his wife, Lucille, as his secretary, he pursued a practice that continued the struggle. Ironically, some of his clients were whites who were at odds with some piece or other of the local establishment. They knew, of course, that Branton, unlike the local Bar, would not hesitate to do battle with the big boys. As any small town Southern lawyer will tell you, it's much easier to sue somebody if there is no risk of running into them at a dinner party, and since Branton was never in danger of that, he, as an advocate of obvious energy, conviction and ability, soon won a reputation as a paladin of courage for both races. Before long he was local counsel with a big city lawyer named Thurgood Marshall in an action filed in 1956 by the NAACP (Branton was a longstanding member) against the Little Rock school board, entitled Aaron v. Cooper. It was a seismic legal aftershock rolling off the pages of Brown v. Board of Education in which Marshall and Branton represented some black students who wanted nothing more or less than to go to Central High. Representing the board in opposition was a bevy of litigators from Meek, House, Barron & Nash, what Kilpatrick calls "the Who's Who of Little Rock lawyers." And, as is painfully known, the whole business, via the demagogic antics of Orval Faubus, was quickly converted from an emotionally charged but nevertheless socially and politically manageable civil rights case, into a national tragedy from which the school district, Little Rock, the state of Arkansas, the South, and the nation still struggle to recover. Kilpatrick gives this episode the attention it deserves, highlighting Branton's legal skills that pushed him from obscurity onto the national stage as a civil rights leader of substance. Alas, Arkansas could no longer hold him, and his law practice relocated to D.C., where Branton, never a self-promoter, found his m�tier as litigator for and quiet 25 Vol. 43 No. 4/Fall 2008 The Arkansas Lawyer advisor to those who spoke with louder voices. In this way, not just in his civil rights law practice, but also as the executive secretary of President Johnson's Council on Equal Opportunity, special assistant to Attorney General Nicholas Katzenbach, and special counselor to the United Planning Organization, the Alliance for Labor Action, and the NAACP, he fought the good fight on an ever grander field. But the culmination of his career was as Dean of Howard Law School where he served with distinction till he resigned over, among other things, the issue of reverse discrimination. Howard had proposed a policy of not hiring white professors if a black one was available. Branton disagreed, stating, "I just think that's wrong. You can't have your cake and eat it, too. I don't think a black school has any more right to discriminate in favor of black people than other schools have to discriminate in favor of whites." What Branton was telling us, of course, was that only in colorblindness can America ever see her way out of the labyrinth of racism. Wiley Austin Branton left us too soon, in1988. As Juan Williams, NPR correspondent, eulogized, "He was the best of the Landex Research Inc. PROBATE RESEARCH breed of civil rights workers who changed America in the `50s and `60s." And William Raspberry of the Washington Post described him as "a giant." Fittingly, his funeral was in the National Cathedral, and his body was brought home to Pine Bluff and buried with his family. Wiley Branton was not only renowned for his compassion, competence, and courage, but also for his great wit. Once when arguing a case before the United States Supreme Court, Branton made the point that his client, a Jefferson County death-row prisoner, had been forced to travel barefoot in weather too cool for going shoeless. One Justice asked about the time of year and Branton said October. Then the same justice opined gravely that that wouldn't be unusual in Arkansas, whereupon Branton retorted, "Most of us don't go barefoot as late as October, your Honor." The courtroom exploded into laughter. The world smiles with the charming and Branton rarely lost those smiles or a case. Of course, Wiley Branton, as we all now know, didn't spend all that much time going barefoot in Arkansas, but he certainly understood and championed those who did. Ar k PAC Missing and Unknown Heirs Located with No Expense to the Estate Domestic and International Service for: Courts Lawyers Trust Officers Administrators/Executors 1345 Wiley Road, Suite 121, Schaumburg, IL 60173 Telephone: 800-844-6778 Fax: 800-946-6990 www.landexresearch.com 26 The Arkansas Lawyer www.arkbar.com CLE CLE CLE CLE 2008-09 CLE Calendar November Professional Practicum November 5, 2008 Embassy Suites Little Rock bridging the Gap November 6-7, 2008 UALR Bowen School of Law Little Rock Federal Practice institute November 14, 2008 Federal Courthouse Little Rock december Federal tax institute December 4-5, 2008 Little Rock 2009 January Mid-Year Meeting January 22-23, 2009 Peabody Hotel Memphis, TN June annual Meeting June 10-13, 2009 Arlington Hotel Hot Springs best of cle June 22-26, 2009 Little Rock June 29-30, 2009 Springdale CLE CLE CLE CLE ndezvous in Re Arkansas Bar Association Mid-Year Meeting January 22-23, 2009 Peabody Hotel Memphis, TN For more information contact lynne brown or virginia hardgrave arkansas bar association 800-609-5668 or 501-375-3957 firstname.lastname@example.org or email@example.com or checK out the cle PaGe at www.arkbar.com Vol. 43 No. 4/Fall 2008 The Arkansas Lawyer 27 Judicial Advisory Opinions Judicial Advisory Opinions are written and provided by the Judicial Discipline and Disability Commission. Full text is available online at http://www.state.ar.us/jeac/ advisory opinion 2008-04 August 4, 2008 The Arkansas Judicial Ethics Advisory Committee issued an advisory opinion to Judge Stephen Tedder of DeQueen, Arkansas. Judge Tedder requested an opinion as to whether the City of DeQueen may employ him to provide legal services to the city as a part-time city attorney. The request stated that Judge Tedder would not be prosecuting any cases in District Court. His role would be to serve as legal advisor to the city council, city officials, city boards and commissions, to draft ordinances and resolutions, and to perform similar tasks. Further that, Judge Tedder would be required to recuse in any instance regarding the validity or enforcement of an ordinance. The Committee concludes that the Code of Judicial Conduct does not prohibit Judge Tedder and the city from entering into an agreement for legal services. But Canon 3(A) states that "the judicial duties of a judge take precedence over all the judge's other activities." The Committee believes an agreement that would result in excessive recusal would therefore be inappropriate. advisory opinion 2008-05 August 25, 2008 The Arkansas Judicial Ethics Advisory Committee issued an advisory opinion to Judge John N. Fogleman of Marion, Arkansas. Judge Fogleman requested an opinion to address procedures outlined in the Code of Judicial Conduct as it relates to campaigns. The Judicial Ethics Advisory Committee addressed his concerns in the enclosed advisory opinion. advisory opinion 2008-07 August 25, 2008 The Arkansas Judicial Ethics Advisory Committee issued an advisory opinion to Judge Charles E. Clawson, Jr., of Conway, Arkansas. Judge Clawson requested an opinion regarding the employment of his son Charles E. Clawson, III ,as Deputy Prosecuting Attorney to his same district. He stated that his son would not be assigned to represent the State on any matters that will appear before him and that he would not have any association with the criminal load in the Third Division. Judge Clawson and the other circuit judges in his district have requested the counsel of this Committee. The Judicial Ethics Advisory Committee stated that Canon 3(E)(1) of the Arkansas Code of Judicial Conduct states that a judge shall disqualify himself or herself in a proceeding in which the judge's impartiality might reasonably be questioned. The Committee concludes that the judge is required to recuse whenever his son appears in front of him, or by written materials, if his impartiality might reasonably be questioned. Schedule the time to relax and play... It could make you a better judge or lawyer. Our lives are busy. That's true for many professionals but it has become the norm for those who practice law. Competition, constant stress, long hours, and high expectations can wear down the most competent and energetic lawyer. Lawyers tell us they struggle to maintain balance between their personal and professional lives. Demanding schedules, deadlines, preparation for trials, and the relentless interruption of phones and email can become overwhelming, leaving little time and energy for friends, family and the leisure parts of life. Since 2000, Arkansas Judges and Lawyers Assistance Program has been providing support to legal professionals with confidentiality guaranteed by the Arkansas Supreme Court. Arkansas JLAP has from its inception been comprehensive, not limited to alcohol and drug issues. JLAP addresses any personal issue that interferes with the professional and personal life of a judge or lawyer. Our professional staff can help � whether you need assistance in scheduling your life or whether you face more serious mental health, substance abuse, physical disability or aging issues. Let us help you take the first step in turning a problem into an opportunity for positive change. Create the time for relaxation and play. The improvement in your work life may surprise you. Confidential � 501.907.2529 Website � www.arjlap.org Email � firstname.lastname@example.org 28 The Arkansas Lawyer www.arkbar.com Lawyer Disciplinary Actions Final actions from July 1, 2008, through September 30, 2008, by the Committee on Professional Conduct. Summaries prepared by the Office of Professional Conduct. Full text documents are available on-line at http://courts.arkansas.gov and by entering the attorney's name in the attorney locater feature under the "Attorney" link on the home page. [Note: "Model" Rules refers to the Rules of Professional Conduct as they existed in Arkansas prior to May 1, 2005. "Arkansas" Rules refers to the Rules as they exist in Arkansas from May 1, 2005.] SURRENDER: ERIC DEAN ARCHER, Bar No. 2001190, formerly of Rogers, Arkansas, and currently in federal prison, petitioned the Court to accept the surrender of his law license after his plea of guilty and conviction filed April 30, 2008 in Case No. 07-CR-50075 in the United States District Court, Western District of Arkansas, of the felony offense of interstate transportation of stolen funds. In his plea, Archer acknowledged conversion of funds from nine clients totaling approximately $93,000. The Court accepted his surrender on September 11, 2008, in Case No. 08944, barring him hereafter from practicing law on his Arkansas license. LARRY GENE DUNKLIN, Bar No. 81051, of Little Rock, petitioned the Court to accept the surrender of his law license based on his acknowledged serious misconduct involving at least two instances where his attorney trust account failed to contain funds due to his clients. After early 2006, Dunklin's trust account failed to contain $8,333.33 in settlement funds which he was to pay to either his client McBride or a firm, Ingenix, that had paid her medical bills in that amount following her accident. This sum remains unpaid and unaccounted-for. After March 2007, his trust account failed to contain approximately $10,000 he was to distribute to his Rodgers clients from their settlement. In late June 2007, he was able to obtain sufficient funds from a friend to pay these clients. Formal disciplinary complaints had been filed against Dunklin arising from each of these situations. Rather than resist these charges, he offered his surrender. The Court accepted his surrender on September 18, 2008, in Case No. 08-1055, barring him hereafter from practicing law on his Arkansas license. FRANK B. WHITBECK, Bar No. 76010, of Little Rock, while awaiting sentencing, petitioned the Court to accept the surrender of his law license after his plea and adjudication of guilt on May 8, 2008, in Case No. 07-CR-010 in the United States District Court, Eastern District of Arkansas, to a felony offense involving his submission of false financial reports for 2001-20022003 to the Arkansas Insurance Department for Signature Life Insurance Company of America, which was owned and controlled by Whitbeck. The Court accepted his surrender on September 4, 2008, in Case No. 08-980, barring him hereafter from practicing law on his Arkansas license. SUSPENSION: GAIL L. ANDERSON, Bar No. 95224, of Little Rock, Arkansas, had her Arkansas law license suspended for two (2) months, effective August 19, 2008, and was ordered to pay $604.42 in restitution on a complaint filed by Christine Scott in Case No. CPC 2006-152 in the Findings and Order filed August 19, 2008, for violation of Rules 1.1, 1.3, 1.4, 1.16(d), and 8.4(d). Anderson was employed to represent Scott in a divorce action. Anderson failed to enter an appearance on behalf of her client; did nothing to assist her client in the legal matter; failed to communicate with her client; and, failed to return any unearned fee following termination of the employment. For failing to file a timely response to the Committee's Complaint, Anderson was also cautioned and fined $250. ALVIN D. CLAY, Bar No. 96075, of Little Rock, Arkansas, was placed on Interim Suspension by Committee Order filed August 7, 2008, in Case No. 2008-060. Clay was found guilty by a jury in the United States District Court, Eastern District of Arkansas, in Case No. 04-CR-274, styled USA v. Alvin Clay, on June 4, 2008, of five felony criminal offenses, conspiracy to commit wire fraud business valuation Forensic accounting economic loss divorce accounting, tracing, appraisal commercial damages, agricultural damages Certified Public Accountant Certified Fraud Examiner Accredited Senior Appraisers Court-Appointed Expert Testimony Fair Pricing Schwartz & Associates LLC 11510 Fairview Road, Suite 100 Little Rock, AR 72212-2445 501-221-9900 / 501-221-9292 fax Steven F. Schroeder JD, MCBA, ASA Steve@SchwartzandAssociatesLLC.com Richard L. Schwartz CPA, MCBA, ASA, ABV, CFE Dick@SchwartzandAssociatesLLC.com Vol. 43 No. 4/Fall 2008 The Arkansas Lawyer 29 Lawyer Disciplinary Actions (Count 1) and four Counts of engaging in a monetary transaction in property derived from wire fraud (Counts 2-5). Any felony is a "serious crime" as defined in Procedures. Clay is awaiting sentencing. By Order entered June 10, 2008, Chief United States District Judge Leon Holmes suspended Clay's right to practice in the federal courts of Arkansas. ALICE WARD GREENE, Bar No. 95197, of Little Rock, Arkansas, was suspended for twelve (12) months and ordered to pay $975.00 in restitution. She was also reprimanded and fined $500.00 for her failure to respond to the Complaint by Committee Findings & Order filed July 9, 2008, on a Complaint filed by Larry McCarty in Case No. 2008-20, for violation of Rules 1.3, 1.4(a)(3), 1.4(a)(4), 1.4(b), 3.4(c), 8.4(c) and 8.4(d). McCarty hired Greene in February 2007 to represent him in a divorce proceeding. Greene's license to practice law was suspended for CLE Deficiency at the time of hire. Greene's license also became suspended for failure to pay annual license fee in March 2007, but she continued to represent McCarty. Greene failed to return telephone calls or keep McCarty informed about the status of his divorce proceeding. Greene appeared in Court on two occasions when her license to practice law was suspended. Greene never told her client, opposing counsel or the Court that she was suspended. Greene continued to accept fees at all times when her license to practice law in Arkansas was suspended. TERRY LYNN SMITH, Bar No. 92035, formerly of Texarkana and now of Umpire, Arkansas, had his Arkansas law license suspended for thirty-six (36) months, by Committee Consent Findings and Order filed and effective September 18, 2008, on a complaint filed by Wannell Bradshaw in Case No. CPC 2008-044, for violation of Rules 1.1, 1.3, 1.4(a)(3), 1.4(a)(4), 1.5(c), 1.8(a), 1.8(b), 1.15(a)(4), 8.4(c), and 8.4(d). In November 1999, Wannell and Bob Bradshaw recovered a $4,000,000 settlement against Ford Motor Company, resulting from an August 18, 1996, farm accident in Lockesburg, Arkansas, that left Mr. Bradshaw completely paralyzed. After legal fees, expenses, and liens, the Bradshaws netted $1,943,373.75. In 2000, the Bradshaws put their settlement in certificates of deposit. At renewal time, they decided to seek financial advice. In March 2001, the Bradshaws went 30 The Arkansas Lawyer www.arkbar.com Business Valuations for For consultation contact: Dan Wojcik, AVA to Smith, a C.P.A., for his assistance with tax prepared wills, and established a family preparation, estate planning, and investment trust. The parties agreed that the Bradshaws management advice. The Bradshaws went would receive $2,000 per month from the to Smith because he was both an attorney investments handled by Smith unless a and certified public accountant who came request for more was made. In July 2001, highly recommended by Bob Bradshaw's Mr. Bradshaw was diagnosed with cancer. co-worker. The Bradshaws gave Smith During this time, the Bradshaws gave Smith $394,016.44 to invest. Thereconsultation contact: another $200,000 to invest. They did not For was no contract of employment; however, Dan Wojcik, AVA ask for, nor did they receive, accountings. the oral agreement was that Smith would receive one percent of Mr. Bradshaw died in July 2002. Mrs. the income from the Bradshaw investments Bradshaw admits that her husband was the for his handling of their legal work. Smith Business Valuationstook care of their financial one who mainly for prepared and filed the Bradshaw tax returns, business, especially with Smith. Mrs. ELECTRICAL ACCIDENTS Paul D. Mixon, Ph.D., P.E. Engineering Consultant P.O. Box 3338 State University, AR 72467 (870) 972-2088 (870) 972-3948 FAX email@example.com firstname.lastname@example.org � � � � � � � � AccidentInvestigationandAnalysis ContactCasesandElectrocutions ElectricalInjuries PropertyandEquipmentDamage ElectricalFires SafetyCodeCompliance ExpertWitness DisputesSettled Lawyer Disciplinary Actions Bradshaw continued to receive the monthly allowance checks from Smith following her husband's death. For most of 2003, she received $4,000 per month from Smith, and at one point, she purchased land for over $400,000 based on Smith's statement to her 89671 Handshake Ad:Layout 1 7/10/08 that she had over $400,000. In 2003, Smith borrowed $100,000 from Mrs. Bradshaw to build a home for his mother. Mrs. Bradshaw made the loan using a certificate of deposit as collateral. Her interest rate for the loan to Smith was one percent over the interest 9:55 AM Page 1 Put the Strength of Arkansas' Most Respected Mediators & Arbitrators to Work for Your Clients Jack Bell Jack Davis Frank Hamlin Bob Hornberger John Jennings Richard Lusby Sid McCollum Mary Schneider John Stroud, Jr ADR I N C Alternative Dispute Resolution 1501 N. University Ave., Prospect Bldg, Ste. 420, Little Rock, AR 72207 (501) 376-2121 1116 South Walton Blvd.,Suite 111, P.O. Box 1826, Bentonville, AR 72712 (479) 271-2237 404 North Seventh Street, P.O. Box 8064, Fort Smith, AR 72902 (479) 783-1776 405 Walnut, Texarkana, AR 71854 (870) 772-0718 301 W. Washington, Jonesboro, AR 72403 (870) 932-0900 80 Monroe Avenue, Brinkley Plaza, Suite G1, Memphis, TN 38103 (901) 743-1055 www.mediateadr.com rate she received for the certificate of deposit, but Smith agreed to pay Mrs. Bradshaw two percent over the certificate of deposit interest rate. To date, Smith has paid only $800.00 on that loan. In November 2003, Smith requested that Mrs. Bradshaw meet with him. During that meeting, Mr. Smith read Mrs. Bradshaw a letter that outlined that all of her money was gone, primarily due to poor stock market performance. He offered to repay that money, and Mrs. Bradshaw accepted that offer. Smith forwarded to Mrs. Bradshaw two promissory notes, one for the $100,000 loan and one for $429,454.44. The latter number was the amount Smith arrived at after deducting the monthly draws, the income tax paid, his fees, and stock losses from the funds entrusted to him for investment. To date, Smith has paid nothing toward these promissory notes. Mrs. Bradshaw requested that Smith provide her with any documents he could produce to evidence that he ever invested the money given to him. Smith never produced such documents. In 2007, Mrs. Bradshaw hired an attorney and sued Smith. She has obtained a $554,130.55 default judgment against him, plus interest, and $50,000 for attorney fees, in Sevier County Circuit Court Case No. CV-07001-1, Wannell Bradshaw v. Terry Smith. Nothing has been paid on this obligation. A search of the Secretary of State's website by the Office of Professional Conduct indicates that Smith owned TLS Investment Advisory Services, Inc., a for-profit corporation filed on May 30, 2001. Mr. Smith and his wife were the officers of this corporation which has since been dissolved. A search of the Arkansas Board of Public Accountants website shows that Mr. Smith is a certified public accountant as well. As a condition of any future reinstatement, Smith is ordered to show a good faith effort toward satisfying a default judgment of $554,130.55, plus interest, against him and in favor of Bradshaw. The Arkansas Supreme Court approved the consent disposition, with Justices Glaze and Danielson dissenting. Justice Glaze filed a written dissent, stating Smith should be disbarred for his conduct. JAMES F. VALLEY, Bar No. 96052, of Helena-West Helena, Arkansas, was suspended for a period of thirty (30) days by Committee Findings & Order filed July 31, 2008, on a Complaint filed by Zederick Jackson in Case No. 2007-120, for violation Vol. 43 No. 4/Fall 2008 The Arkansas Lawyer 31 Lawyer Disciplinary Actions of Rules 1.3, 1.4(a)(3), and 1.4(a)(4). Valley was employed to represent Jackson in a child support collection matter. Valley failed to file anything on Jackson's behalf from October 1999, to November 2000; failed to inform Jackson about the status of the legal matter; and failed to respond to requests about the status of the matter from Jackson and the Office of Professional Conduct. REPRIMAND: GAIL L. ANDERSON, Bar No. 95224, of Little Rock, Arkansas, was reprimanded and ordered to pay $608.47 in restitution on a complaint filed by Felicia Delph in Committee Case No. CPC 2006-140 in the Findings and Order filed August 19, 2008, for violation of Rules 1.3, 1.4(a)(3), 5.3(b), 5.5(a), 8.4(c), and 8.4(d). Anderson was employed to represent Delph in a divorce action. Anderson failed to pursue any legal action on Delph's behalf; failed to respond to requests for information from Delph; employed a nonlawyer who engaged in the unauthorized practice of law; allowed a nonlawyer complete access to the law office without supervision; allowed a nonlawyer to draft legal documents and to misrepresent who prepared the documents; and failed to properly supervise the nonlawyer, creating unnecessary delays in the divorce matter. For failing to file a timely response to the Committee's Complaint, Anderson was also cautioned and fined $250. J. F. ATKINSON, JR., Bar No. 76003, of Fort Smith, Arkansas, was reprimanded by Committee Consent Findings and Order filed September 19, 2008, on a complaint filed by Linda Cooper in Case No. CPC 2008-058, for violation of Rules 1.1, 1.2(a), 1.3, 1.4(a)(3), and 1.4(a)(4). Atkinson was hired by Cooper during September 2007 to represent her in a bankruptcy. Cooper's husband had passed away in June 2007 and she was having difficulty making all the bill payments. Atkinson was paid $1,099 for fees and costs. $299 of the total payment was for the filing fee for the bankruptcy. Cooper had great difficulty in contacting Atkinson and having him communicate with her. No bankruptcy petition was filed for Cooper prior to the time she terminated his services. He simply took no action to handle the matter for which he was hired. At the time Cooper signed her Affidavit for this complaint, Atkinson had not refunded any of the funds paid to him. Prior to entry of the Consent Order, Atkinson made full restitution to Cooper. MICHAEL WILLIAM FREY, Bar No. 96022, of Camden, Arkansas, was reprimanded, fined $1,500.00, and ordered to pay restitution in the amount of $1,150.00. For his failure to respond to the Formal Complaint, he was cautioned and fined $500.00 by Committee Findings & Order filed July 29, 2008, on a Complaint filed by Travis E. Johnson in Case No. 2008-032, for violation of Rules 1.1, 1.3, 8.4(d). Frey was employed to represent Johnson in a bankruptcy matter in 2007. Frey filed the bankruptcy petition on behalf of Johnson when he knew or should have known that the filing was prohibited under the current bankruptcy code as Johnson had previously filed for bankruptcy in 2000. Once the petition was filed, Frey failed to file all required supporting documents for his client. The failure to file the required documents and the prohibition against filing subsequent bankruptcy petitions within a set period of time resulted in the bankruptcy petition being dismissed. THOMAS LEWIS TRAVIS, Bar No. 95029, of Little Rock, Arkansas, was reprimanded and fined $1,000.00 following a public hearing by Committee Findings & Order filed July 29, 2008, on a Complaint filed by Matilde Martinez & Misty W. Borkowski, Esq., in Case No. 2008-004, for violation of Rule 1.16(d). (A Notice of Appeal to the Supreme Court of Arkansas has been filed by Travis in the matter.) Travis was retained to represent Matilde Martinez in March 2001. He was hired to assist with immigration matters and other general legal matters. Travis no longer represents Martinez. Martinez and his new counsel, Borkowski, requested on numerous occasions that Travis provide Borkowski with the Martinez files. Travis did not do so. He maintained throughout the proceedings that the files are his and not his former client's. CAUTION: DONALD W. COLSON, Bar No. 2005166, of Benton, Arkansas, was cautioned by Committee Consent Findings & Order filed September 23, 2008, on a complaint Bart F. Virden 14 Years on the Arkansas Supreme Court Committee on Professional Conduct. Now representing lawyers. Your mother told you there were places where you should not go alone 501.354.0125 32 The Arkansas Lawyer www.arkbar.com Listen to your mother email@example.com 105 So. Moose St. Morrilton, AR 72110 Lawyer Disciplinary Actions filed by Jeffrey Ouellette in Case No. CPC 2008-055, for violation of Rules 1.1, 1.2(a), 1.3, 1.4(a)(1), 1.4(a)(3), and 1.4(a)(4). Colson was hired and paid $500.00 during October 2006, to investigate a legal matter for Ouellette. Colson advised Ouellette that he had little or no experience in the type of matter about which Oullette contacted him, but he would contact someone to check into the matter and perform an investigation as requested. Colson then contacted two individuals to perform the investigation. Neither was able to do so. The second of the two individuals advised Colson in December 2006 that he would not be able to assist. Colson did not contact anyone else to assist from then until he responded to a letter from the Office of Professional Conduct in March 2008. Colson did not contact Ouellette either to report any of this information. After being contacted by the Office of Professional Conduct, Colson still did not contact Ouellette by the date of the signing of the Affidavit in the disciplinary proceeding. After being served with the formal disciplinary complaint, Colson made full restitution to Ouellette and agreed to continue to look into the matter for him. STEPHEN FISHER, Bar No. 91073, of Little Rock, Arkansas, was cautioned and ordered to pay $300 in restitution on a complaint filed by Yolanda Amaya in Committee Case No. CPC 2008-048 in the Findings and Order filed August 15, 2008, for violation of Rules 1.1, 1.3 and 1.4(a)(3). Amaya hired Fisher in 2005 and paid him $1,000.00 to represent her in a divorce Professional investigation - Certified Fraud Examiner and Certified Legal Investigator. Former federal, state and local investigator. Expert in evaluating law enforcement agencies and investigative practices. Computer search & forensic examination. Former instructor at DOJ � National Advocacy Center. arkansas investigations provides a variety of quality services for attorneys throughout Arkansas. Licensed and insured. Defense clients welcome. Available 24/7. 501-605-0360 www.arkansas-investigations.com AR Lic. A20040061 proceeding. Fisher represented Amaya through entry of the Decree of Divorce. Thereafter, she experienced problems with her ex-husband because of his failure to comply with the terms of the Decree. Fisher agreed to represent Amaya in the post-Decree matters. Amaya paid Fisher a $300.00 retainer for the post-Decree matters. Fisher was not diligent in his representation of Amaya in her post-Decree matters. He delayed in filing pleadings after they were signed and verified by Amaya. Fisher also failed to obtain service of process and failed to obtain timely Orders extending the time for service of process. Fisher failed to keep Amaya informed of the status of her legal matter and failed to respond to her requests for information about her legal matter. Need labels? www.arkbar.com Your Association maintains the largest and most accurate database of Arkansas attorneys. To purchase mailing labels at a reduced rate to members, contact Barbara Tarkington at firstname.lastname@example.org or 501-375-4606. TSCHIEMER LEGAL BRIEFING QUALITY, CONSISTENCY AND REASONABLE PRICES: HANDLING ALL YOUR BRIEFING NEEDS ___________ Robert S. Tschiemer, Esq., Ark. Bar 84148 43001 Hwy. 89 N. Mayflower, AR 72106 (501) 951-3303, (fax) (501) 325-1235 email@example.com www.tschiemerlegalbriefing.com Vol. 43 No. 4/Fall 2008 The Arkansas Lawyer 33 The Arkansas Real Estate Review: A New Tool For Real Estate Practitioners By: J. Cliff McKinney In April 2008, the Arkansas Real Estate Review (the "ARER") debuted as a new tool for real estate practitioners. The ARER is a product of the Association's Real Estate Law Section and will be published semiannually to alert section members to new developments that affect the practice of real estate law. Professor Lynn Foster serves as the Editor in Chief. Cliff McKinney, Professor Lindsey Gustafson, Chris Barrier, Tim Grooms, Steve Giles, Mark Hodge and Wes Lasseigne serve as editors. The ARER keeps section members informed by incorporating a mix of short practice-relevant articles and reviews of controlling case law. The first issue of the ARER had articles examining the 2007 legislative session, the Arkansas Residential Landlord-Tenant Act of 2007 and the 2007 revisions to Arkansas's quiet title statutes. However, the heart of the ARER is the unique case law reviews. Each of the thirtytwo cases reviewed in the first edition were prepared by students at the UALR William H. Bowen School of Law. The case reviews were then edited by the ARER's editorial board. For many cases, the editors added commentary. The commentary ranged from ways that the parties could have avoided the dispute to the possible impact that the case may have on the practice of real estate in Arkansas. The case of Riddle v. Udouj, 371 Ark. 452 (2007), is a good example of the cases covered in the ARER and the tips that the editors provide to help practitioners better protect their clients. The Riddle case involved the sale of a residential home to Beth Marie Riddle ("Riddle") by the Olivia K. Udouj Trust ("Udouj"). While offering the property for sale, Udouj signed a form property disclosure statement stating that there were no property features shared in common with adjoining landowners, and no easements or encroachments that would affect title to the property. In fact, her lot had a fence constructed in the 1950s that was somewhat offset from the true property line. Eventually, the Riddles had a fight with a neighbor over the fence location and lost. The Riddles then sued Udouj for breach of warranty of title, breach of warranty of quiet 34 The Arkansas Lawyer www.arkbar.com Members of the Arkansas Bar Association may join any section at any time by paying the annual dues, which range from $10-$35. For a list of sections and more information go to: www.arkbar.com or contact Barbara Tarkington at 501-375-4606 or firstname.lastname@example.org enjoyment, breach of warranty to defend title and constructive fraud on account of the representations made in the property disclosure statement. Udouj ultimately won the case without reaching the merits of the claims because Riddle let the statute of limitations expire before bringing suit. However, the case raised significant issues because so few sellers of residential property do really think about the connection between their fence line and the legal description of their property. The ARER editors considered the issues presented by this case and provided advice to possibly avoid this same problem in the future, including possible modifications to the deed and to the disclosure statement. Specifically, the editors suggested that the deed could have been modified to include the language, "subject to equitable variations in the boundaries of the property resulting from the placement of fences, landscaping or other boundary markers." Also, the property disclosure could have been modified to have a statement such as, "Seller affirmatively discloses that fences, landscaping, etc. ... may not be located exactly on the property's borders and adjoining landowners may have claims related thereto." The ARER will continue to provide this type of analysis as it provides Section members with a summary of case law impacting their practice. If you are interested in learning more about the ARER and seeing the content, the second edition will be available to all Association members when it is released in late October or November. Future editions will be available to all members of the Real Estate Law Section. The ARER is published on-line to reduce its environmental impact. Section members will receive an email through the Section listserv notifying them when a new edition is available and inviting them to download a copy from the Association webpage. J. Cliff McKinney practices real estate law with Quattlebaum, Grooms, Tull & Burrow PLLC in Little Rock. He is the present Chair of the Association's Real Estate Section. Your Name in Print 2008 ring , Sp .com No.2 arkbar 43, w. ww Vol. e at onlin Ark blica tion of th e ansa s Ba rA ia ssoc tion A pu s nsa rka in A on ets: rmati Secr Info ery de: de a ss : cov Insi nd Tra usine ith tion -Dis B n nW o ete of E Bey cting atio rd R te nce form Pro orta Reco ide d In Imp and s Coll Store About? The ll very orld ically it A n isco o W ro at is E-D n Tw h e Elect Wh rving old - W H se Pre ation g Liti For information about submitting articles for publication in The Arkansas Lawyer, please contact Anna Hubbard at (501) 375-4606, or email@example.com Uncommon Resources6 = Outstanding Results With a dedicated, seasoned team of six valuation and economics professionals, and backed by the staff of one of America's Top Twenty-Five Accounting Firms, Moore Stephens Frost is your premier resource for financial expert services. Whether it's quantifying or defending damages in a complex commercial case, or a forensic accounting or business valuation assignment, we have the resources to deliver product on time, every time. And we guarantee you will not find a more energetic, creative, or tough minded group on this planet. Call Cheryl Shuffield, Director of Litigation Support Services at 501.975.0100 for more information. Before Opposing Counsel beats you to it. Cheryl Shuffield Ted Duncan Sarah Ellis Angie Hopkins Chris Bedwell Rachel Kremer Four of the Twelve CPA's in Arkansas Accredited in Business Valuations by the AICPA. Vol. 43 No. 4/Fall 2008 The Arkansas Lawyer 35 msfrost.com or 501.376.9241 Unjust Enrichment continued from page 12 unjustness the court chooses," which he identifies as "broad restitution" and "narrow restitution."31 The article raises two pertinent issues for Arkansas courts and the lawyers who litigate claims for unjust enrichment. First, is Arkansas a "broad restitution" jurisdiction or a "narrow restitution" jurisdiction? Second, if leading scholars cannot decide on the proper approach to ascertain what is "unjust" in "freestanding restitution," how can trial courts and attorneys be expected to make that decision? Recognizing that a standard of "broad restitution" could create inconsistency, the American Law Institute's discussion draft of the Restatement (Third) attempts to bring more certainty to many of the fundamental theories of unjust enrichment. This raises two other significant questions. First, given the willingness of Arkansas courts to view the Restatements favorably in general, will Arkansas courts take a position that is consistent with the future official draft of the Restatement (Third)? Second, assuming Arkansas will follow the future official draft, how should trial courts instruct juries in the interim? The authors suggest a cautious approach until more guidance is given. Such an approach will require not only consideration of previous Arkansas precedent but also more focus on the type of unjust enrichment claim presented by the facts, as discussed below. Because the most common unjust enrichment claims are for money had and received, quantum meruit, and quantum valebant, a brief analysis of each of those claims is discussed below with the suggestion that those traditional terms be abandoned going forward, focusing instead on the elements and defenses applicable to specific types of modern unjust enrichment claims as organized and articulated in the drafts of the Restatement (Third). is the claim one For Money had and received? Professor Dobbs describes a claim for money had and received as follows: When the defendant himself received money that belonged in good conscience to the plaintiff, for instance, if the plaintiff paid money to the defendant by mistake, or under duress, or by reason of fraud, the plaintiff was entitled to restitution of the money, which is said to have been received by the defendant for the use of the plaintiff. The count includes money paid by a third person, so long as the money in good conscience belongs to the plaintiff.32 Tom M. Ferstl, MAI, SRA, J.D. J.T. Ferstl, MAI, J.D. 621 E. Capitol Ave. Little Rock, AR 72201 Phone: 501-375-1439 or 501-376-1439 Fax: 501-375-8317 Arkansas cases are consistent with that description of the claim.33 As illustrated by the Restatement (Third), this claim has been defined in a number of situations that carry specific rules (i.e., elements) and defenses. When one reviews the Restatement (Third), it is clear that unjust enrichment claims have been carefully considered and organized into categories that are easy to understand and practical to use. These categories are not burdened by the starting point of the common law principles of unjust enrichment that could burden Arkansas case law. Rather, the Restatement (Third) is organized into clearly defined areas of unjust enrichment that focus on the underlying conduct and the context in which the conduct occurred. For example, if the conduct which entitles the plaintiff to seek restitution is based upon mistake, the Restatement (Third) offers a series of scenarios grouped together in one chapter that deal with that issue and that also point to other applicable issues and defenses.34 There are also sections that deal with other common claims in unjust enrichment, such as fraud, duress, undue influence, incapacity, and the various issues arising under the general concept of unjust retention of a benefit.35 These are much more practical to both plaintiffs and defendants than the types of generalized instructions quoted in footnote 10 at the outset of this article. They are preferable to plaintiffs because they eliminate concern that a favorable verdict will be overturned on appeal due to an instruction that was too general and vague. They are preferable to defendants because they require the jury to find the facts in light of specific legal elements as opposed to a general admonition to determine whether a benefit was retained unjustly, viz: to "do right." is the claim one For Quantum Meruit or Quantum valebant? A claim for quantum meruit or quantum valebant is classified as a "value count."36 These claims permit recovery for unjust enrichment by one who has "in good faith rendered a service, not illegal or contrary to public policy" to another "party [who] has accepted and used the service[.]"37 Arkansas case law supports this concept and has acknowledged the basis of claims for quantum valebant and quantum meruit in the common law cause of action for assumpsit since some of Arkansas's earliest cases.38 While these two unjust enrichment claims are familiar to many Arkansas practitioners, as Professor Dobbs notes, they are really expert Witness testimony real estate related Matters �Tax Appeals �Court Testimony �Condemnation �Divorce 40 Years experience see Web site for references www.arkansasappraisers.com email: firstname.lastname@example.org 36 The Arkansas Lawyer www.arkbar.com "This is an important time in the development of the principles that must be considered when claims for unjust enrichment are presented to juries. This article is intended to initiate a discussion that will lead to the delineation of elements of particular claims which juries will be instructed to decide. Without such specification, the jury will not be provided sufficient direction and the system will not be adequately served." short-hand ways of referring simply to common fact patterns.39 Therefore, care should be taken not to view them solely through an historical lens, because they too may be modified by the modern principles of restitution. the Measure of unjust enrichment As with other issues, the measure of unjust enrichment is also subject to a number of considerations. For example, in Woodhaven Homes, Inc. v. Kennedy Sheet Metal Co., the Arkansas Supreme Court held it was not error to base an award of restitution on a contract price or the amount already paid pursuant to a contract when the party against whom unjust enrichment was asserted did not prove that the value of the benefit received was less than the contract payment.40 Similarly, in City of Damascus v. Bivens, the Court held that "the award is measured by the value of the benefit conferred upon the party unjustly enriched."41 Thus, the evidence presented as to the amount and type of the benefit may well control the articulation of the jury instruction for the measure of unjust enrichment. As noted in draft sections 49-53 of the Restatement (Third),42 the measure of unjust enrichment depends upon the type of recipient, whether the recipient is innocent or a wrongdoer, and whether the enrichment is primary or secondary. There may be disagreements as to the value of a benefit alleged to constitute unjust enrichment. For example, in one case for recovery under the theory of quantum valebant, even a seemingly simple determination of the fair and reasonable value of parts and labor furnished by the plaintiff was strongly disputed because the defendant contended the repairs exceeded the value of the bulldozer being repaired.43 Evidence of the cost of similar repairs as well as the industry standard was cited by the Arkansas Supreme Court in its discussion of reasonableness.44 sample instructions Using the approach of the Restatement (Third) as a template, the following are examples of the types of instructions that might be prepared: uNJust eNrichMeNt Mistake - Payment of Money Not due Plaintiff claims damages from defendant for payment by mistake of money not due and has the burden of proving each of five essential propositions: First, that plaintiff has suffered a detriment; Second, that defendant has received a benefit; Third, that plaintiff paid money to defendant [but defendant was not the intended recipient][when no payment was intended]; Fourth, that retention of the benefit by the defendant would be unjust under the circumstances; and Fifth, the value of the benefit received by the defendant. SOURCE: Section 6 of the Restatement (Third) of Restitution & Unjust Enrichment (Tentative Draft No. 1, 2001). uNJust eNrichMeNt Mistake - Performance or discharge of another's obligation Plaintiff claims damages from defendant for [performance][discharge] of Defendant's obligation by mistake and has the burden of proving each of five essential propositions: First, that plaintiff has suffered a detriment; Second, that defendant has received a benefit; Third, that plaintiff [mistakenly performed defendant's obligation][mistaken- ly discharged (defendant's obligation)(the security for defendant's obligation)]; Fourth, that retention of the benefit by the defendant would be unjust under the circumstances; and Fifth, the value of the benefit received by the defendant. SOURCE: Section 7 of the Restatement (Third) of Restitution & Unjust Enrichment (Tentative Draft No. 1, 2001). coMMeNt: If the benefit conferred by mistake is other than money, an instruction should be prepared consistent with draft Section 9 of the Restatement (Third). uNJust eNrichMeNt Mistake - inter vivos Gift Greater or different than intended Plaintiff claims damages from defendant for making a gift to defendant [greater][different] than intended by mistake and has the burden of proving each of six essential propositions: First, that plaintiff has suffered a detriment; Second, that defendant has received a benefit; Third, that plaintiff intended to make a gift of (specify gift) to defendant; Fourth, that plaintiff actually transferred something [greater in value than][different from] the property intended to be transferred as a gift; Fifth, that it would be unjust for defendant to retain the benefit under the circumstances; and Sixth, the difference between the value of the gift made and the gift intended. SOURCE: Section 11(1) of the Restatement 37 Vol. 43 No. 4/Fall 2008 The Arkansas Lawyer (Third) of Restitution & Unjust Enrichment (Tentative Draft No. 1, 2001). uNJust eNrichMeNt Mistake - donor's death in belief that inter vivos Gift has been Perfected Plaintiff claims damages from defendant for defendant's unintended receipt of a gift made by mistake of [name of the donor] and has the burden of proving each of six essential propositions: First, that plaintiff was the intended [donee][beneficiary] of a gift from (specify name of donor); Second, that defendant has received a benefit by reason of the gift intended for plaintiff; Third, that (specify name of donor) died with the belief that the gift to plaintiff was completed; Fourth, that, as a result of mistake, the gift [was (wholly)(partially) ineffective][transferred something other than the property (specify name of donor) intended to transfer][transferred property to defendant who was not the intended donee]; Fifth, that it would be unjust for defendant to retain the [property][benefit] under the circumstances; and Sixth, the value of the [property][benefit]. SOURCE: Section 11(3) of the Restatement (Third) of Restitution & Unjust Enrichment (Tentative Draft No. 1, 2001). uNJust eNrichMeNt transfer by agent, trustee, or other Fiduciary Without authority Plaintiff claims damages from defendant for receipt of a transfer made by plaintiff's [agent][trustee][specify other type of fiduciary] without authority and has the burden of proving each of six essential propositions: First, that plaintiff has suffered a detriment; Second, that defendant has received a benefit; Third, that (name of agent, trustee, or other fiduciary) was the [agent][trustee] [specify other type of fiduciary] of plaintiff; Fourth, that (name of agent, trustee, or other fiduciary) transferred property of plaintiff [outside the scope of his authority] [in breach of his duty to plaintiff]; Fifth, that it would be unjust for defendant to retain the benefit under the circumstances of the transfer; and 38 The Arkansas Lawyer www.arkbar.com Sixth, the value of the benefit. SOURCE: Section 17 of the Restatement (Third) of Restitution & Unjust Enrichment (Tentative Draft No. 2, 2002). uNJust eNrichMeNt Protection of another's Property or economic interest Plaintiff claims damages from defendant for protection of defendant's [property][or] [economic interest] and has the burden of proving each of seven essential propositions: First, that plaintiff has suffered a detriment; Second, that defendant has received a benefit; Third, that plaintiff took effective action to protect [the property][or][the economic interest] of defendant; Fourth, that the circumstances justified plaintiff's decision to intervene without a prior agreement for payment or reimbursement; Fifth, that it was reasonable for plaintiff to assume defendant would pay for the action performed by plaintiff; Sixth, that retention of the benefit by defendant without payment would be unjust under the circumstances; and Seventh, the value of the benefit. SOURCE: Section 21 of the Restatement (Third) of Restitution & Unjust Enrichment (Tentative Draft No. 2, 2002). uNJust eNrichMeNt Performance of another's duty Plaintiff claims damages from defendant for performance of defendant's duty and has the burden of proving each of seven essential propositions: First, that plaintiff has suffered a detriment; Second, that defendant has received a benefit; [Third, that plaintiff paid the debt of defendant for necessaries;] [Third, that plaintiff (performed)(obtained performance of) defendant's duty to supply necessaries to a third person;] [Third, that plaintiff (performed)(obtained performance of) defendant's duty to the public;] Fourth, that the circumstances justified plaintiff's decision to intervene without a prior agreement for payment or reimbursement; Fifth, that [there is no prejudice to defendant in substituting a liability to plaintiff for the original obligation][the performance was urgently required for the health or welfare of the third person][the performance was urgently required for the protection of public health, safety, or general welfare]; Sixth, that retention of the benefit by defendant without payment would be unjust under the circumstances; and Seventh, the value of the benefit. SOURCE: Section 22 of the Restatement (Third) of Restitution & Unjust Enrichment (Tentative Draft No. 2, 2002). Each of these sample instructions should be evaluated for accuracy under existing Arkansas cases on the same issues. However, they illustrate that a single generic instruction is neither sufficient nor appropriate for all jury cases involving claims of unjust enrichment. conclusion This is an important time in the development of the principles that must be considered when claims for unjust enrichment are presented to juries. This article is intended to initiate a discussion that will lead to the delineation of elements of particular claims which juries will be instructed to decide. Without such specification, the jury will not be provided sufficient direction and the system will not be adequately served. endnotes: 1. Fite v. Fite, 233 Ark. 469, 476-77, 345 S.W.2d 362, 367 (1961) (Smith, J., dissenting). 2. Hutchinson v. Phillips, 11 Ark. 270, 27879 (1850). 3. See, e.g., First Nat'l Bank of DeWitt v. Cruthis, 360 Ark. 528, 535, 203 S.W.3d 88, 93 (2005); DeWitt Bank & Trust Co. v. Simpson, 2006 Ark. App. LEXIS 572, at *1415, No. CA06-102 (September 20, 2006). 4. Servewell Plumbing, LLC v. Summit Contractors, Inc., 362 Ark. 598, 612, 210 S.W.3d 101, 112 (2005); Adkinson v. Kilgore, 62 Ark. App. 247, 254, 970 S.W.2d 327, 330-31 (1998). 5. Hatchell v. Wren, 363 Ark. 107, 117, 211 S.W.3d 516, 522 (2005); Merchants & Planters Bank v. Massey, 302 Ark. 421, 424, 790 S.W.2d 889, 891 (1990); Frigillana v. Frigillana, 266 Ark. 296, 307, 584 S.W.2d 30, 35 (1979); Patton v. Brown-Moore Lumber Co., 173 Ark. 128, 133, Unjust Enrichment continued on page 40 Is giving through a community foundation right for your clients? Seven questions for estate and financial advisors. 1. Do I have clients who care deeply about their local community? 2. Do they give to more than one charitable cause? 3. Are they interested in creating a personal or family legacy in their community? 4. Are they considering the creation of a private foundation, but concerned about cost and administrative complexity? 5. Would they like to stay personally involved in the use of their gift dollars? 6. Do they want to receive maximum tax benefit for their charitable contributions under federal law? 7. Do they place a priority on sound financial management of their contributions? If you answered yes to any of these questions, your clients will benefit from knowing more about Arkansas Community Foundation. ARCF can help your clients secure the maximum tax deduction, involve family members, focus on grantmaking and obtain visibility or anonymity, as desired. The Foundation preserves and protects individual and corporate investments and charitable intentions forever through the power of endowments. For more information on partnering with Arkansas Community Foundation, contact Melissa Stiles at 501-372-1116 or visit arcf.org. "The Foundation staff has a wealth of knowledge about what charities are doing the best work in different areas of Arkansas and are very helpful through their satellite offices in providing broad-based information on charities by location and field of interest." � Jim Harris, Friday Eldredge & Clark, Little Rock � 2006 COF & CFA Union Station � 1400 West Markham, Suite 206 � Little Rock, AR 72201 501-372-1116 � 888-220-2723 � arcf.org www.arkbar.com 39 The Arkansas Lawyer Vol. 43 No. 4/Fall 2008 The Arkansas Lawyer 39 Unjust enrichment continued from page 38 292 S.W. 383, 385 (1927). 6. Hatchell, 363 Ark. at 117, 211 S.W.3d at 522; Rigsby v. Rigsby, 356 Ark. 311, 317-18, 149 S.W.3d 318, 323 (2004); Guaranty Nat'l Ins. Co. v. Denver Roller, Inc., 313 Ark. 128, 138, 854 S.W.2d 312, 317 (1993); Dews v. Halliburton Indus., Inc., 288 Ark. 532, 536, 708 S.W.2d 67, 69 (1986). 7. Hatchell, 363 Ark. at 117, 211 S.W.3d at 522; Rigsby, 356 Ark. at 318, 149 S.W.3d at 323; Guaranty Nat'l Ins. Co., 313 Ark. at 138, 854 S.W.2d at 317. 8. Sanders v. Bradley County Human Servs. Pub. Facilities Bd., 330 Ark. 675, 683, 956 S.W.2d 187, 191 (1997). 9. Guaranty Nat'l Ins. Co., 313 Ark. at 138, 854 S.W.2d at 317; Dews, 288 Ark. at 536, 708 S.W.2d at 69. 10. The problem is also illustrated by the following jury instruction given by the trial court in Cruthis: First National Bank of DeWitt claims actual damages ... for restitution, and has the burden of proving each of the following: First, that [defendants] obtained something of value to which they were not entitled, and in doing so unjustly enriched themselves at the expense of First National Bank of DeWitt. There must also be some operative act, intent or situation to make enrichment unjust and compensable. Second, First National Bank of DeWitt suffered a loss or damage because it did not receive the property or proceeds to which it was entitled. One who is free from fault cannot be unjustly enriched merely because he has chosen to exercise a legal or contract right. Trial Record at 1483-84, Cruthis, 360 Ark. 528 (2005) (No. 04-448). See also the instruction quoted in the recent case of DeWitt Bank & Trust Co.: [The Bank has the burden of proving that Simpson] obtained something of value to which [she was] not entitled, and in doing so unjustly enriched [herself] at the expense of [the Bank]. There must also be some operative act, intent or situation ... to make the enrichment unjust and compensable. 2006 Ark. App. LEXIS 572, at *14. This case also discussed an instruction given for the separate restitution claim of officious benefit. Id. 11. Restatement (thiRd) of Restitution and unjust enRichment (Tentative Drafts Nos. 1-6, 2000-2008) ("Restatement (Third)"). Drafts of the Restatement (Third) can be obtained from the American Law Institute at http://www.ali.org/index. cfm?fuseaction=publications.ppage&node_ id=46. For a discussion of unjust enrichment that includes a conceptual analysis of the Restatement (Third), see Chaim Saiman, Restating Restitution: A Case of Contemporary Common Law Conceptualism, 52 Vill l. ReV. 487 (2007). 12. Cruthis, 360 Ark. at 537, 203 S.W.3d at 94. 13. dan B. doBBs, law of Remedies � 4.2(1), at 383 (2d Ed. 1993). 14. Id. � 4.2(3), at 390-91. 15. Id. � 4.2(1), at 384. 16. 111 F.3d 580, 583-84 (8th Cir. 1997). 17. doBBs, supra note 13, � 4.1(2), at 372-74. Plastiras Law Firm Better planning for a better futureTM ESTATE PLANNING ELDER LAW BUSINESS PLANNING Serving Arkansas since 1961 1010 West Third St. Little Rock, AR 72201 Ph: 501-376-7410 Fax: 501-376-0933 www.plastiraslawfirm.com 18. Id. � 4.1(3), at 376-77. 19. Id. � 4.1(4), at 381-82. 20. 821 P.2d 788, 795 (Colo. 1991). 21. Commerce Bank, N.A. v. Tifton Aluminum Co., Inc., 217 B.R. 798, 802 (W.D. Mo. 1997). 22. Sanders v. Bradley County Human Servs. Pub. Facilities Bd., 330 Ark. 675, 683, 956 S.W.2d 187, 191 (1997). 23. Restatement (thiRd), � 46A-48 (Tentative Draft No. 5, 2007). 24. 266 Ark. at 306, 584 S.W.2d at 34. 25. 30 Ark. App. 281, 284, 785 S.W.2d 472, 474 (1990). The Court of Appeals went on to state: "That detriment was not brought on under any circumstances that would authorize him to entertain a reasonable expectation that the work for which he contracted with Hamelin would be paid for by the appellant." Id. This statement suggests that the concept of detriment also has nuances that should be considered and may require a separate jury instruction if warranted by the circumstances. See Van Zanen v. Qwest Wireless, L.L.C., 522 F.3d 1127, 1130 (10th Cir. 2008) for the statement of the detriment element under Colorado law. 26. 36 loy L.A. L. ReV. 991 (Winter 2003). 27. Id. at 993. 28. Id. 29. Id. 30. Id. at 993-94. 31. Id. at 994. 32. doBBs, supra note 13, � 4.2(3), at 387. 33. See, e.g., Import Motors, Inc. v. Luker, 268 Ark. 1045, 1052-53, 599 S.W.2d 398, 401-02 (1980); Arkansas Nat'l Bank of Hot Springs v. Martin, 110 Ark. 578, 585, 163 S.W. 795, 797 (1914); Hutchinson, 11 Ark. at 276-77. 34. See Restatement (thiRd), � 5-12 (Tentative Draft No. 1, 2001). 35. See id., � 13-17. 36. doBBs, supra note 13, � 4.2(3), at 388. 37. Dews, 288 Ark. at 537, 708 S.W.2d at 69. 38. See, e.g., Ball v. Fulton County, 31 Ark. 379, 382 (1876); Guthrie v. Morris, 22 Ark. 411, 412 (1860); Bertrand v. Byrd, 5 Ark. 651, 658 (1844); Fagan v. Faulkner, 5 Ark. 161, 166 (1843). 39. doBBs, supra note 13, � 4.2(3), at 388. 40. 304 Ark. 415, 419-420, 803 S.W.2d 508, 511 (1991). 41. 291 Ark. 600, 603, 726 S.W.2d 677, 679 (1987). 42. (Tentative Draft No. 5, 2007). 43. Leonards, 321 Ark. at 247-48, 900 S.W.2d at 551-52. 44. Id. at 248, 900 S.W.2d at 552. Compare Hawkins v. Delta Spindle of Blytheville, Inc., 245 Ark. 830, 835, 434 S.W.2d 825, 828 (1968)(a case cited in Leonards in which the Arkansas Supreme Court ruled there was insufficient evidence that charges were fair, just and reasonable for the work done). www.arkbar.com 40 The Arkansas Lawyer www.arkbar.com Vol. 43 No. 4/Fall 2008 The Arkansas Lawyer 41 Mediation continued from page 20 at a later meeting. All of these things are lost if you don't allow the process to proceed in its normal course. There is a very definite reason why we conduct mediations the way we do and go step by step in the process without jumping ahead. Step two builds on one, and three builds on the first two, etc. This is done purposely and the primary reason is we know that this method works. Another way that this has been brought to my attention is for counsel to say to me, "I never like to say very much during the opening because I don't want to lay out all these facts that are going to make the other side mad and upset them before we get into our negotiation." First, I doubt very seriously if that is actually correct. But if it is true that you have graduated from high school, made your way through college, somehow gotten your professional degree as an attorney and you still don't know how to lay out the facts of a case in a conversational tone without using expletives and without pointing fingers and still have everyone understand you, then shame on you. You should have paid attention in class. Of course you don't want to make the other side mad when you're beginning a negotiation. If you are the plaintiff, you're actually trying to convince the people on the other side to give you money or to make some other kind of concession in your favor. If you're on the defense side you want them to understand that there is another way to look at this fact situation and that the dispute may not be exactly as they have been looking at it through their own eyes and through the eyes of their lawyer. Of course you don't want to make them mad, but it is not necessary that you have to be that forceful while laying out the facts of your case and what your client's position is in connection with those facts. You don't have to say, "We don't believe that your back was hurt because of this particular wreck and that you've just been faking it." However, you can point out as follows: "In researching this case we found evidence in your doctors' records where you have been treated for the same low back pain on several occasions prior to the accident and we think that would be relevant information that a jury might be interested in hearing, that might affect their evaluation of the case." This could be said very calmly directly to the defendant, or if you're afraid that your manner might in some way cause resistance or offend them, then simply talk to the mediator. You can very simply lay this out to the mediator and the parties on the other side 42 The Arkansas Lawyer www.arkbar.com will get the same message because they will be hearing it at the same time. As a plaintiff you don't have to say, "Because of your negligence and inattention, my client's mother incurred terrible bed sores because you left her unattended and didn't turn her as you should have and didn't apply appropriate medication. That is pure negligence." The same thing can be very simply pointed out in a way that is not offensive and does not call people names or point fingers or place blame. For example: "We have found that there are certain standards and requirements that must be met by nursing home personnel that are statewide guidelines as well as national guidelines for the treatment of patients in a nursing home which require turning at least a certain number of times within a twelve hour period. The records that we have obtained from when our client was in the nursing home indicate that those procedures were not met, and we feel that falls below the standard of care that is necessary in this type of case." You've made your same points, you've laid out your same position, you've shown them how their actions were not looked upon with favor, and you haven't hurt anybody's feelings. Surely professionals can perform in this matter at mediation and thereby get the facts on the table in a face-to-face meeting, without being "in your face." Of course, there are those situations where it may be most appropriate to confront the other party with the facts, as everyone needs to see them. Sometimes it's just necessary to tell the defendant, "I think that backing down the wrong side of the interstate at 65 miles per hour with a point nine alcohol breath reading, is something that almost any juror would find negligent." These are simply matters of judgment that I am sure you all have with no coaching from anyone. The number one answer to questions on how to be a better attorney in mediation is preparation, preparation, and preparation. You need to know what it is your party or client needs the most and what their true interests are, as opposed to just simply getting more money. You need to know what the facts of the case are and have them at your fingertips as opposed to having to look around to be sure what happened when and what operation came at what time. You need to know if your client thinks remaining in a partnership or relationship with the other party is more important than getting that extra money on this particular transaction or dividing a particular asset between the parties. You need to know whether your client would rather have a smooth relationship with an ex-spouse rather than have that extra day of visitation if it's going to cause trouble and hardship between the parties. And most of all you need to know whether or not you have that rare individual who happens along sometimes in mediation where it is actually true that "it truly is not the money." In other words, it's important to spend time with your client before mediation and prepare them for what to expect and prepare yourself for which person is going to say what at the mediation and then what your goals are and how you want to go about reaching them. This article was not meant to become a top ten tips on mediation advocacy and it's time for me to bring it to a close. I hope I have at least presented to you some things to consider about mediation, and hopefully if you have not tried it, convinced you to put that extra arrow in your quiver or ammunition in your arsenal of lawyering to the best interest of your client. As I've said, I know there will be upcoming seminars and training that may answer some of your questions, but if you do have some, I'm sure any mediator in the state would be more that happy to talk with you. I know I certainly would. Medical Malpractice Record Review Providing services for the attorney client in the area of medical malpractice record review at more affordable prices. Analysis completed in 7-10 days. For fees, resume and work product sample contact: Terry R. Smith 501-590-0762 P.O. Box 1, Avon, OH 44011 or visit www.terrysmith.com Arbirtration continued from page 16 expansive nature of this provision in Citizens Bank v. Alafabco, Inc., concluding that the provisions of the FAA may be invoked notwithstanding the fact that the transaction at issue does not substantially affect interstate commerce, as long as transactions of like kind, in the aggregate, amount to "a general practice . . . subject to federal control."50 The effect of conflicts between the FAA and contrary state arbitral provisions has also been resolved by the United States Supreme Court. In Prima Paint Corp. v. Flood & Conklin Mfg. Co. the court took the first step, concluding that federal courts sitting in diversity are bound by the FAA rather than state law.51 In Moses H. Cone Memorial Hospital v. Mercury Construction Corp., the court went farther, holding that the FAA amounted to substantive federal law and, accordingly, governed in both state and federal courts.52 Subsequently, in Southland Corporation v. Keating, the court found a California statute void under the Supremacy Clause on the grounds that it conflicted with the FAA by limiting the enforcement of agreements to arbitrate.53 It is important to note that parties to an arbitration agreement do have the option to designate in the arbitration agreement itself whether the FAA or state law is to apply and the courts are bound to enforce that choice. As the Arkansas Court of Appeals has noted: [T]he parties specifically agreed that the FAA would apply. Where the parties designate in the arbitration agreement which arbitration statute they wish to have control, the court should apply their choice. v. conclusion As noted at the outset of this article, given the increasing popularity of arbitration as a method of dispute resolution, it is likely that Arkansas lawyers will be called upon more frequently to give advice and counsel in this rapidly developing area of law. To the uninitiated, arbitration law can seem like a jurisprudential labyrinth. Its boundaries are statutorily defined at both federal and state levels with a significant overlay of common law; again both federal and state. The task is to recognize that the seminal question is whether it is the Federal Arbitration Act or Arkansas law that applies. Answers to all other questions will likely depend on the answer to that one. This determination hinges on whether the transaction in question falls within the broadened umbrella of "interstate commerce" as defined by the United States Supreme Court in this context or, alternatively, whether the parties have designated the law they want to be applied in the arbitration agreement itself. Once this determination has been made, most of the remaining questions will deal with arbitrability, enforcement or vacatur. Hopefully, for those unaccustomed to dealing with arbitration, this article provides a useful introduction and overview. endnotes: 1. Black's law dictionaRy (8th ed. 2004). 2. Michael Scott Hall, Issue Preclusion Is No Illusion for Arbitration in Arkansas: Riverdale Development Co. v. Ruffin Building Systems, Inc., 58 aRk. l. ReV. 929, 929 (2006). 3. As an example, the current fee schedule for the American Arbitration Association reflects that for commercial claims between $75,000 and $150,000 the combined initial filing fee and case service fee is $4,000 and that for a claim in the range of $1,000,000 to $5,000,000 the initial filing and case service fees will total $11,250. American Arbitration Association, Commercial Arbitration Rules, http://www. adr.org/sp.asp?id=22440#Fees (last visited Mar. 18, 2008). 4. Kenneth A. DeVille, The Jury Is Out: Pre-Dispute Binding Arbitration Agreements For Medical Malpractice Claims, 28 J. legal med. 333, 371 (Jul-Sept, 2007). 5. Alan D. Lash, Arbitrating Commercial Healthcare Disputes: the Good, the Bad and the Unknown, 62-Jan DISP. RESOL. J. 21, 25 (2008). 6. These limitations on discovery are not universally viewed as advantages, particularly for the claimant. For example, in medical malpractice cases typified by complex medical and factual issues, some see these limitations as a significant and unfair disadvantage to the claimant who bears the burden of proof on both liability and damages in the arbitral proceeding. Kenneth A. DeVille, The Jury Is Out: Pre-Dispute Binding Arbitration Agreements For Medical Malpractice Claims, 28 J. legal med. 333, 369 (Jul-Sept, 2007). 7. 9 U.S.C. ��1 et seq. 8. Allied-Bruce Terminix Co. v. Dobson, 513 U.S. 265, 280, 115 S. Ct. 834, 130 L. Ed. 2d 753 (1995); Dobbins v. Hawk's Enters., 198 F.3d 715, 717 (8th Cir. 1999); Circuit City Stores, Inc. v. Adams, 532 U.S. 105, 111, 121 S. Ct. 1302, 149 L.Ed.2d 234 (2001); see generally Stanley A. Leasure, Arbitration of Nursing Home Claims: Oklahoma Goes Its Own Way, 60 oklahoma law ReView 737 (2007). 9. 9 U.S.C.A. � 2 10. 9 U.S.C.A. � 3. 11. 9 U.S.C.A. � 4. 12. 9 U.S.C.A. � 9. 13. 9 U.S.C.A. � 10. The United States Supreme Court, in Hall Street Associates, L.L.C. v. Mattel, Inc., 128 S. Ct. 1396 (2008), held that the FAA's grounds for expedited vacatur and modification are exclusive and cannot be Arbitration continued on page 44 is pleased to announce our newest attorneys with the firm. M. scott Jackson General Litigation, Medical Malpractice and Employment Law Barrett & Deacon, P.A. alfred F. angulo, Jr. General Litigation, Insurance Defense, Products Liability and Medical Malpractice Defense Jonesboro office 300 S. Church, 3rd Floor Jonesboro, Arkansas 72401 (870) 931-1700 Northwest arkansas office 100 W. Center Street, Suite 200 Fayetteville, Arkansas 72702 (479) 582-5353 barrett & deacon, P.a. attorneys at law www.barrettdeacon.com Vol. 43 No. 4/Fall 2008 The Arkansas Lawyer 43 Arkansas VersusLaw Search Arkansas and national legal materials Developed specifically for members Searchable Weekly Case Summaries Free technical support and training Go to www.arkbar.com Click on Arkansas VersusLaw and login Select a library and begin searching Your free online legal research tool at www.arkbar.com Arbitration continued from page 43 expanded, even by agreement of arbitral parties. See Stanley A. Leasure, Arbitration After Hall Street v. Mattel: What Happens Next? forthcoming, 31 u. aRk. little Rock l. ReV. _ (2009). 14. A.G. Edwards & Sons, Inc. v. McCullough, 967 F.2d 1401, 1403 (9th Cir. 1992) (undue means); Dogherra v. Safeway Stores, Inc., 679 F.2d 1293, 1297 (9th Cir. 1982), cert. denied 459 U.S. 990 (1982); Bell Aerospace Co. Div. of Textron, Inc. v. Local 516 Int'l Union, 500 F.2d 921, 923 (2d Cir. 1974) (arbitrator misconduct). See Stanley A. Leasure, Vacatur of Arbitration Awards: The Poor Loser Problem or Loser Pays?, 29 u. aRk. little Rock l. ReV. 489, 505-511 (2007). 15. Arkansas Dep't of Parks & Tourism v. Resort Mgrs., Inc., 294 Ark. 255, 261, 743 S.W.2d 389 (1988). 16. Lawrence R. Mills, J. Lani Bader, Thomas J. Brewer & Peggy J. Williams, Vacating Arbitration Awards, disp. Resol. mag., Summer 2005, at 23. 17. B.L. Harbert International, LLC v. Hercules Steel Co., 441 F.3d 905, 913-914 (11th Cir. 2006). 18. Ark. Code Ann. � � 16-108-201-224. 19. Ark. Code Ann. � 16-108-201(b)(2). 20. Ark. Code Ann. �16-108-202; Ark. Code Ann. �16-108-214. 21. Ark. Code Ann. � 16-108-212(a). 22. Chrobak v. Edward D. Jones & Co., 46 Ark. App. 105, 106, 878 S.W.2d 760 (1994). 23. Hart v. McChristian, 344 Ark. 656, 667, 42 S.W.3d 552 (2001). 24. Chrobak v. Edward D. Jones & Co., 46 Ark. App. 105, 112, 878 S.W.2d 760 (1994). 25. Ark. Code Ann. � 16-108-203. 26. Ark. Code Ann. �16-108-205. 27. Ark. Code Ann. �16-108-207. 44 The Arkansas Lawyer www.arkbar.com 28. Ark. Code Ann. �16-108-208. 29. Ark. Code Ann. �16-108-213 (a). 30. Hart v. McChristian, 344 Ark. 656, 662663, 42 S.W.3d 552 (2001). 31. Neosho Const. Co. v. Weaver-Bailey Contractors, 69 Ark. App. 137, 140, 10 S.W.3d 463 (2000). 32. Pest Management, Inc. v. Langer, 96 Ark. App. 220, 225, 240 S.W.3d 149 (2006); Hudson v. ConAgra Poultry Co., 484 F.3d 496, 500 (8th Cir. 2007); Cash in a Flash Check Advance of Arkansas, L.L.C. v. Spencer, 348 Ark. 459, 466, 74 S.W.3d 600 (2002). 33. See e.g. Asbury Automotive Used Car Center, L.L.C. v. Brosh, 364 Ark. 386, 220 S.W.3d 637 (2005); Tyson Foods, Inc. v. Archer, 356 Ark. 136, 147 S.W.3d 681 (2004); Cash in a Flash Check Advance of Arkansas v. Spencer, 348 Ark. 459, 74 S.W.3d 600 (2002); Showmethemoney Check Cashers, Inc. v. Williams, 342 Ark. 112, 272 S.W.3d 361 (2000). 34. Tyson Foods, Inc. v. Archer, 356 Ark. 136, 141, 147 S.W.3d 681 (2004). 35. Id. at 142, citing The Money Place, LLC v. Barnes, 349 Ark. 411, 78 S.W.3d 714 (2002); Showmethemoney Check Cashers, Inc. v. Williams, 342 Ark. 112, 27 S.W.3d 361 (2000). 36. Asbury Automotive Used Car Center, L.L.C. v. Brosh, 364 Ark. 386, 391, 220 S.W.3d 637 (2005); Tyson Foods, Inc. v. Archer, 356 Ark. 136, 146, 147 S.W.3d 681 (2004). 37. No. 4:06-CV-0032-GTE, 2008 WL 830262 (E.D. Ark. Mar. 25, 2008). 38. Id. at *1. 39. Id. at *8. The arbitration agreement in question reserved to the defendants the right to sue the plaintiff for unpaid balances. Id. at *3. 40. Id. at *8. 41. Id. at *10 citing The Money Place, LLC v. Barnes, 349 Ark. 411, 414, 78 S.W.3d 714 (2002), and Showmethemoney Check Cashers, Inc. v. Williams, 342 Ark. 112, 120-121, 27 S.W.3d 361, 366 (2000). 42. Id. 43. Enderlin v. XM Satellite Radio Holdings, Inc., No. 4:06-CV-0032-GTE, 2008 WL 830262 at *10 (E.D. Ark. Mar. 25, 2008). 44. Ark. Code Ann. 16-108-201(b)(2). 45. 9 U.S.C.A. �2. 46. 63 Okl. St. Ann. � 1-1939, 9 U.S.C.A. � 2. See Stanley A. Leasure, Arbitration of Nursing Home Claims: Oklahoma Goes Its Own Way, 60 oklahoma law ReView 737 (2007). 47. Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395, 405, 87 S. Ct. 1801, 18 L. Ed. 2d 1270 (1967) (federal courts bound by FAA under diversity jurisdiction); Moses H. Cone Memorial Hospital v. Mercury Construction Corp., 460 U.S. 1, 26, 103 S. Ct. 927, 74 L. Ed. 2d 765 (1983) (FAA applicable in both federal and state courts to disputes within its ambit); Southland Corporation v. Keating, 465 U.S. 1, 16, 104 S. Ct. 852, 79 L. Ed. 2d 1 (1984) (FAA preempts contrary state law with respect to disputes governed by the FAA). 48. Allied-Bruce Terminix Co. v. Dobson, 513 U.S. 265, 115 S. Ct. 834, 130 L. Ed. 2d 753 (1995) and Citizens Bank v. Alafabco, 539 U.S. 52, 123 S. Ct. 2037, 156 L. Ed. 2d 46 (2003). 49. Allied-Bruce Terminix Co. v. Dobson, 513 U.S. 265, 273-274, 115 U.S. 265, 115 S. Ct. 834, 130 L. Ed. 2d 753 (1995). 50. Citizens Bank v. Alafabco, 539 U.S. 52, 56-57, 123 S. Ct. 2037, 156 L. Ed. 2d 46 (2003). 51. 388 U.S. 395, 406, 87 S. Ct. 1808, 18 L. Ed. 2d 1270 (1967). 52. 460 U.S. 1, 24, 103 S. Ct. 927, 74 L. Ed. 2d 765 (1983). 53. 465 U.S. 1, 10, 104 S. Ct. 852, 79 L. Ed. 2d 1 (1984). 54. Pest Management, Inc. v. Langer, 96 Ark. App. 220, 224, 240 S.W.3d 149 (2006). In Memoriam tice for the Arkansas Supreme Court in 1977. He was a member of the Arkansas Bar Association and was a Fellow of the Arkansas Bar Foundation. He is survived by his wife, Jerry K. Snellgrove; two children, Pamela Ann Huffer and James S. Snellgrove; one sister, Dibby Wolfe; seven grandchildren; and five great-grandchildren. Nathan Green Gordon Nathan Green Gordon of Morrilton died September 8, 2008, at the age of 92. He earned an undergraduate degree from the University of Arkansas and a juris doctorate degree from the University of Arkansas School of Law. He served in the U.S. Navy in World War II earning several distinguished honors, including the Congressional Medal of Honor. Upon returning to Arkansas, he became the youngest elected Lieutenant Governor in the history of the state of Arkansas, according to an obituary in the Arkansas Democrat-Gazette. He served in that position for twenty years from 1946-1966. He also served on the Arkansas Workers' Compensation Commission. He was a member of the Arkansas Bar Association where he served on the Lawyers Assisting Military Personnel Committee, the VA Subcommittee Honoring the End of World War II, the Indigent Representation Committee and the Senior Task Force. He was also a Fellow of the Arkansas Bar Foundation. He was a founder and the first president of the Arkansas Trial Lawyer's Association. He is survived by many nieces and nephews. latter. More recently he was on the Auxiliary Board of Champagnolle Landing. He is survived by his wife of 53 years, Charlotte Walker Phillips; and two children, Suzanne B. Phillips and Maurice Norwood "Tripp" Phillips II. John Gilbert burke John Gilbert Burke of Hope died June 29, 2008, at the age of 42. He earned an undergraduate degree from Hendrix College and a juris doctorate degree from the University of Arkansas School of Law. He was in private practice in Hope at the time of his death. He was the deputy prosecutor from 1998 until May 2007 for the 8th Judicial District-North of Hempstead and Nevada Counties. He was a member of the Arkansas Bar Association. He is survived by his son Jonathon Calvin "Nate" Burke and Nate's mother Jodi; his mother Linda McLain; his father Johnny C. Burke; his step-mother Barbara Burke; two step-sisters Dana Cox and Julie Paddie; and one step-brother, Jeffrey McLain. Norwood Phillips, Jr. Norwood Phillips Jr. of El Dorado died September 1, 2008, at the age of 76. He earned an undergraduate degree from the University of Arkansas at Fayetteville and a juris doctorate from the University of Arkansas School of Law. He practiced law in El Dorado for forty years as a senior partner in the law firm of Shackleford, Phillips & Ratcliff, P.A. In 2007, he was honored by the American Bar Association and Arkansas Bar Association for fifty distinguished years in the practice of law. He wrote three books, Late Train to Little Rock, Murder in Vieux Carre and Meet Moone Boone. He served as a special justice on the Arkansas Supreme Court. He was a Sustaining Member of the Arkansas Bar Association where he served on the Workers Compensation Section, Political Action Committee, Editorial Board for Handbooks and State Trial Practice Committee. He was a Fellow of the Arkansas Bar Foundation. He was a member of the Union County and American Bar Associations, the International Association of Barristers, and the American Board of Trial Advocates, serving as president of the James William spears James Wm. Spears of Little Rock died September 7, 2008, at the age of 74. He earned an undergraduate degree from the University of Arkansas and a juris doctorate degree from the University of Arkansas School of Law. He earned a Master of Laws James Franklin snellgrove, Jr. from the University of Texas in Austin. He James Franklin Snellgrove, Jr. of Jonesboro began his law practice in Harrison in 1964 at died August 19, 2008, at the age of 87. the firm of Walker, Villines, and Spears. In He earned an undergraduate degree from 1965, he accepted a position as assistant proArkansas State College and a juris doctor- fessor at the University of Arkansas School of ate degree from the University of Arkansas Law. He transferred to the new Little Rock School of Law. He served as a pilot in the division in 1966, remained through the U.S. Air Force in World War II. He received school's transition to UALR in 1975, and the Distinguished Flying Cross and eight air retired from teaching at the beginning of medals during his military career. He entered 2003. He received the Outstanding Teacher into a law partnership in Jonesboro in 1953 Award from UALR in 1976. He was a memwith George David Walker and Charles ber of the Arkansas Bar Association where he Frierson, Jr. He practiced law for 55 years. served on the Civil Procedure Committee. He He served in the House of Representatives is survived by his wife of 21 years, Suzanne, from 1948-1954. He served as special jus- and his sister, Sue Wilson. Vol. 43 No. 4/Fall 2008 The Arkansas Lawyer 45 In Memoriam emmette Fletcher Gathright Emmette Fletcher Gathright of El Dorado died August 31, 2008, at the age of 84. He earned an undergraduate degree from the University of Arkansas and a juris doctorate degree from the University of Arkansas School of Law. His education was interrupted by World War II during which he joined the U.S. Army, where he received several distinguished honors, including the Purple Heart with Oak Leaf Cluster for wounds suffered in action. After completing his education, he served in the Arkansas Legislature, representing Union County before beginning his career as an oil and gas attorney and as an independent oil and gas producer. He was a member of the Arkansas Bar Association where he served on the Natural Resources Law Section. He is survived by his wife of 60 years, Betty Colquette Gathright; his children, Gaye G. Clark, Richard E. Gathright Sr., Lark G. Swartz, and Dana G. McDonald; seven grandchildren and three great-grandchildren. terry edwin Pence Terry Edwin Pence of Conway died September 18, 2008, at the age of 48. He earned an undergraduate degree from Arkansas State University and a juris doctorate degree from the University of Arkansas School of Law. After receiving his law degree, he worked for the Pulaski County Prosecutor's Office. He spent the last 19 years with the Arkansas Workers' Compensation Special Fund Division. He was a member of the Arkansas Bar Association. He is survived by his wife, Pam (Whaley) Pence; two sons, Wesley and Evan Pence; daughter Katey Pence; and step-son Jon Osborne. Nancy Kaye brooks Nancy Kaye Brooks of Russellville died September 25, 2008, at the age of 65. She worked for the U.S. Army Corps of Engineers and the U.S. Forest Service for a total of 30 years, beginning as a secretary and ending her career as an attorney at the Office of Counsel with the Corps of Engineers. She was a member of the Arkansas Bar Association. She is survived by a son, Joe Hurdle; two daughters, Tammy Wallman and Kimberly Luningham; and three grandchildren. photo courtesy of Cindy Momchilov arkansas Bar center contrIButIons recIeved From July 1, 2008, through septemBer 30, 2008 donor wall the arkansas bar Foundation is pleased to announce the most recent addition of the following name to the donor Wall at the arkansas bar center: John a. davIs, III Given by his family in honor of his birthday and fifty years of practice in the law the arkansas bar Foundation is pleased to announce the most recent addition of the following memorial medallion on the Memorial Wall of the arkansas bar center: memorIal wall In memory oF norwood phIllIps honored by: dennis l. shackleford brian h. ratcliff charlotte Phillips shackleford, Phillips & ratcliff, P.a. there is an ongoing opportunity to contribute to the arkansas bar center campaign. For details on financial contributions necessary for inclusion on the donor Wall or to memorialize a deceased attorney on the Memorial Wall, please contact the Foundation office. You may contact ann dixon Pyle, executive director of the arkansas bar Foundation at 501.375.4606 or 800.609.5668 or by email at email@example.com. 46 The Arkansas Lawyer www.arkbar.com Arkansas Bar Foundation Memorials and Honoraria The Arkansas Bar Foundation acknowledges with grateful appreciation the receipt of the following memorial, honorarium and scholarship contributions received during the period July 1, 2008, through September 30, 2008: In memory oF dan Becker B. Jeffery Pence In memory oF nathan gordon Judge John F. Stroud, Jr. Fred S. Ursery In memory oF Jerry hInchey Edward L. Oglesby In memory oF lucIlle JulIan Judith Ryan Gray In memory oF larry r. kIllough B. Jeffery Pence In memory oF Judge rIchard moBley Judge Lawrence E. Dawson Judith Ryan Gray Donis B. Hamilton Norwood Phillips Judge John M. Pittman Pope County Bar Association Rex M. Terry In memory oF norwood phIllIps desIgnated to the shackleFord/phIllIps scholarshIp Fund Donald and Linda Bacon Casey Castleberry Martha and Larry Chisenhall Susan, David and Marisa Ensminger Justice Jack and Jane Holt Martha Huey Gibson & Keith, P.L.L.C. Philip E. Kaplan Ledbetter, Cogbill, Arnold & Harrison, L.L.P. Virginia Mattox Pat W. Neal Quattlebaum, Grooms, Tull & Burrow, P.L.L.C. Linda Ray and Gloria Ray Dennis and Jane Shackleford Marshall Shackleford and family Laura Hensley Smith Fred S. Ursery The John Wilson Family In memory oF george m. purvIs Barbara Amsler Arkansas Bar Association Joyce Bobbitt Judge Ellen B. Brantley Thomas M. Carpenter Mr. and Mrs. Murray Claycomb Don Hollingsworth Anna Hubbard Kirby and Rosalind Mouser Hoyte and Ann Pyle Rick and Clair Ramsay Shackleford, Phillips & Ratcliff, P.A. Barbara Tarkington In memory oF roBert d. ross Judge Ellen B. Brantley Justice and Mrs. Robert L. Brown Judith Ryan Gray Don and Leslie Hollingsworth B. Jeffery Pence Fred S. Ursery In memory oF lInda shepherd Schwartz and Associates CPAs, P.A. In memory oF proFessor James w. spears Judge Ellen B. Brantley Carolyn Witherspoon In memory oF carolyn wrIght Judge James G. Mixon In memory oF edward l. wrIght John Norman and Willa Harkey, Jr. honorarIum, scholarshIp and other contrIButIons Wilson & associates ethics scholarship Wilson & Associates, P.L.L.C. in honor of James and sara baker Debtor-Creditor Bar of Central Arkansas, Inc. Given on behalf and in honor of its President, Judge James M. Mixon Designated to the Ernest Lawrence, Jr. Scholarship Fund arkansas bar Foundation Judge David F. Guthrie Vol. 43 No. 4/Fall 2008 The Arkansas Lawyer 47 Classified Advertising Medical MalPractice. Fast, easy, flat-rate referrals to thousands of doctor-experts, all board certified, all in active practice. Your satisfaction GUARANTEED or your money back! 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