Davis Law Firm

Constance Clark

Child’s Severe Burns From Space Heater Do Not Result In Landlord Liability For Failed Heating System.

A landlord had a duty to provide heat to his tenant’s residence and knew that the furnace was broken. Yet, the landlord was held to have no liability when his tenant’s nine-year old granddaughter suffered extensive burns after her dress came in contact with a space heater being used to heat the home. Why? It was not reasonably foreseeable that the landlord’s breach of his duty to provide heat would result in burn injuries from a space heater.

The outcome in Robinson v. Willis, 2018 Ark. App. 542 (November 7, 2018) may seem harsh. Nonetheless, it is consistent with principles of tort law which have been in place in the State of Arkansas for many years. In the Robinson case, Brandy Robinson was staying with her grandmother, Barbara Robinson, on December 23, 2011 in a residence Ms. Robinson leased from landlords James Willis and Marion Starks. The heating system on the property did not work and Ms. Robinson was using space heaters to heat the home. Brandy’s dress caught fire when it came in contact with one of the space heaters, causing her to suffer extensive burns. Brandy’s mother filed suit against the landlords (as well as against the manufacturer and seller of the space heater). She claimed that the landlords breached their duty to provide heat by not fixing the broken furnace, causing the need to purchase space heaters, which then resulted in Brandy’s dress catching fire and causing serious burns.

The trial court granted a summary judgment in favor of the landlords and the Arkansas Court of Appeals affirmed. The case turned on the concept of foreseeability. Even though the landlords admitted that they had a duty to repair the heating system, and even though they acknowledged that it was foreseeable that their tenant might buy a space heater when the heating system did not work, the court stated, “It does not follow, however, that it was also foreseeable Barbara’s grandchild would suffer burn injuries from the use of such space heaters.” The Court emphasized that a defendant is under no duty to guard against risks it cannot reasonably foresee, saying “Harm that is merely possible is not necessarily reasonably foreseeable.” The Court explained that when the voluntary acts of human beings intervene between the defendant’s act and the plaintiff’s injury, the question is always: Was the third person’s conduct sufficiently foreseeable to make the defendant’s act a negligent one?” In this case, the court concluded that reasonable minds could not foresee that Brandy would suffer burn injuries from the use of a space heater.

Interestingly, although Arkansas cases often state that foreseeability is a question for the jury, not the court, to decide, the Robinson court did not allow the issue of foreseeability to go to a jury and instead decided the case as a matter of law. Thus, this case may now make it easier for defendants to have foreseeability issues determined by courts in summary judgment proceedings. You might wonder, “How was it not foreseeable that if the heat failed, the tenants would have to use alternative, inapt, and perhaps dangerous methods to avoid freezing to death?” But, that was the final decision of the Court and it stands as precedent for future decisions.

 

No Noise Ordinance In Your Community? Fire Away!

Owners of land surrounding a shooting range constructed by an American Legion Post on a 40 acre tract in rural Arkansas County filed suit to stop the operation of the range, arguing that noise from the range constituted a nuisance. In a 4-3 decision, the Arkansas Supreme Court sided with the shooting range because no local noise ordinance was in effect. The dissenting justices would have ruled differently, but for the same reason – because no local noise ordinance was in effect.

 

Noise generated from a shooting range constructed by an American Legion Post in southeast Arkansas prompted neighboring landowners on three sides, including two businesses, to file a lawsuit claiming that noise from the range interfered with the use and enjoyment of their land so as to constitute a legal nuisance. The case required an interpretation of Ark. Code Ann. §16-105-502, a statute which states that a person operating a sport shooting range will not be subject to civil or criminal liability for noise or noise pollution resulting from the operation of the range if the range “is in compliance with noise control ordinances of local units of government that applied to the sport shooting range and its operation at the time the sport shooting range was constructed and began operation.” It was undisputed that there was no noise control ordinance if effect when the Legion’s range began operation. The circuit court found that because there was no local noise ordinance in existence, the range was entitled to immunity from suit under the statute.

The landowners appealed to the Arkansas Supreme Court and lost. In 3 Rivers Logistics, Inc. v. Brown-Wright Post No. 158, 2018 Ark. 91 (March 15, 2018), a four-justice majority of the Court concluded that because no local noise control existed at the time the shooting range began operation, “the Legion was in compliance with local noise control ordinances” and the circuit court was correct in finding that the Legion was entitled to immunity. Interestingly, it was for precisely the same reason – because no local noise ordinance existed – that three justices dissented. Their interpretation of the statute was that a local noise ordinance controlling how much noise is acceptable must be in place in order for a shooting range to enjoy the immunity granted by the statute. The dissenting justices stated that if the legislature intended for the statute to immunize a shooting range even when there is no noise ordinance that would apply, it would have simply said so.

Will shooting ranges that become operational when where there in no local noise control ordinance in effect be forever immune from nuisance suits, as the dissenting opinion suggests? Time will tell. For now, though, it is clear that range owners and their customers need not worry about a neighbor’s noise complaints if no local noise ordinance was in effect when the range opened for business.

 

Powers of Attorney: They Mean What They Say.

Powers of attorney are documents used to designate a person (the attorney-in-fact) who is authorized to act for the signer under particular circumstances (a limited power of attorney), or generally (a general power of attorney), and may be drafted to allow the attorney-in-fact to act even after the signer becomes incompetent (a durable power of attorney). In one recent case, a durable power of attorney giving the attorney-in-fact the power to sell real property on any terms he deemed appropriate was interpreted to allow the sale of a home for $10.00.

The Arkansas Court of Appeals’ decision in Shriners Hospital for Children v. First United Methodist Church of Ozark, 2018 Ark. App. 216 (March 28, 2018) provides a cautionary tale for those who draft, and sign, powers of attorney. In that case, L.G. Foster made a will in 2008 that designated Shriners Hospital as the residuary beneficiary of his estate. In 2012, Foster signed a codicil to his will directing his executor, Frederick Romo, to sell Foster’s residence and contents and distribute the proceeds to Shriners if Foster still owned the residence at his death.

In March of 2013, Foster signed a durable power of attorney, naming Romo as his attorney-in-fact. Importantly, the power of attorney did not give Romo the power to make a gift. It did, however, give him the authority to sell Foster’s real property “at such times, in such places, and upon such terms and conditions” as the attorney-in-fact deemed “appropriate”. In April of 2013, Romo sold Foster’s residence to the First United Methodist Church of Ozark for $10.00. Foster died in May of 2013. In 2014, Shriners filed suit against the Church, contending that the residence should have been included as part of Foster’s estate and should have passed to Shriners under Foster’s will. (Although the opinion does not state the value of the home, it is a reasonable assumption that it was worth enough to justify the cost of a legal challenge.)

The circuit court ruled against Shriners and in favor of the Church and, on Shriners’ appeal, the Court of Appeals affirmed the lower court. Shriners argued that the sale of the residence to the Church for only $10.00 was in essence a gift and that Romo had no authority under the power of attorney to make a gift. The appellate court disagreed with Shriners, noting that if there was no fraud or deception, the question of consideration – the amount of money paid in exchange for the property – is immaterial. The court found that there was no fraud or deception in this case, relying on the affidavit of Romo stating that Foster had decided he wanted the Church, and not Shriners, to receive his residence; that Foster desired to transfer the residence to the Church before his death to avoid having to execute a new will; and that because the power of attorney did not authorize the making of a gift, Foster was fine with selling the residence to the church for $10.00. According to the Court of Appeals, because a donation was not possible under the terms of the power of attorney, “[n]ot only was this sale within the letter of Romo’s authority under the power of attorney to convey Foster’s real property upon such terms as he deemed appropriate, it was also within the spirit of the power of attorney.”

There is a lesson to be learned from this case: be very careful with the wording of any power of attorney you draft or sign, and think through its potential consequences, because that document will likely be interpreted as meaning exactly what it says.

Emotional Distress Without Physical Injury = No Lawsuit.

At 2 a.m., a drunk driver crashes through your house while you sleep. You aren’t physically injured, but the incident dredges up memories of a past accident which claimed the life of your mother and daughter and now you have nightmares and trouble concentrating. Do you have a claim against that driver? Arkansas courts say “No.”

In Holman v. Flores, 2018 Ark. App. 298 (May 9, 2018), the Arkansas Court of Appeals was asked to recognize the tort of negligent infliction of emotional distress as a viable claim under Arkansas law. Rick Holman, his wife, Joy, four of their children, and a friend of their daughter’s were asleep in the Holman home at 2:40 a.m. when Anna Marie Flores, believed to be intoxicated, drove a vehicle into the home, causing damage. Rick suffered no physical injuries as a result of the incident. However, he claimed emotional distress because he said that it rekindled memories of a 1999 wreck in which he drove up on the burning remains of an accident in which his mother, his 18-month old daughter, and his nephew were burned to death and his oldest daughter remained in a coma for 30 days. Rick said that he now saw his mother’s vehicle every night in his dreams, his mind would race at night, and not a day went by when he did not think about the 1999 accident.

The Court of Appeals refused to recognize the tort of negligent infliction of emotional distress, stating that the Arkansas Supreme Court has declined to recognize the cause of action and that it is bound to follow Supreme Court precedent. In Dowty v. Riggs, 2010 Ark. 465, 385 S.W.3d 117 (2010), the Arkansas Supreme Court explained that if there is no physical injury, then there can be no recovery for mental or emotional pain and anguish because such an injury is thought to be too remote, uncertain, and difficult to ascertain. On the other hand, when a physical injury is suffered, mental pain and anguish may be considered because they are so intimately connected and too difficult to separate. The Dowty court acknowledged that the majority of jurisdictions in the United States do allow recovery for the negligent infliction of emotional distress and it stated that advances in the understanding of the effects of emotional trauma might cause the court to rethink its rejection of such claims and to re-visit the issue in the future. However, the Dowty court found that the facts before it (where the plaintiff witnessed her husband being shot in the arm and was forced to grab her child and flee the scene as gunshots continued to be fired) did not warrant the creation of a new tort.

Rick Holman was hoping that his case would be the one which would cause the Court of Appeals to re-visit Dowty. Instead, the Court of Appeals concluded that Dowty remains the law in Arkansas. The dismissal of Mr. Holman’s claim was affirmed. It is a virtual certainty, however, that plaintiffs’ attorneys will continue to file lawsuits making claims of negligent infliction of emotional distress, hoping that the particular facts of their case will convince our highest courts that such claims should be recognized and their lawsuits allowed to proceed.

Did You Sign Away Your Right To A Jury Trial? Maybe Not.

“The right of trial by jury shall remain inviolate . . . .” Ark. Const. Article 2, §7. The right to a jury trial is a part of our State Constitution, but that right has always been subject to certain limitations. Now, as a result of a recent Arkansas Supreme Court decision, a long-recognized barrier to jury trials – the contractual waiver – has been removed.

In a 4-3 decision, the Arkansas Supreme Court recently held that a predispute jury waiver provision is unenforceable under the Arkansas Constitution. Tilley v. Malvern National Bank, 2017 Ark. 343, 532 S.W.3d 570 (2017). The Tilley case arose out of a foreclosure action filed by Malvern National Bank against Kenneth Tilley. Tilley entered into a loan agreement with the Bank and signed a promissory note in the amount of $221,000, secured by a mortgage on his property. The loan agreement contained a jury waiver clause. After Tilley defaulted on the loan, the Bank sued to foreclose the mortgage. Tilley answered and asked for a jury trial. He also filed a counterclaim against the Bank, alleging that the Bank breached an agreement to loan him additional funds and that the Bank’s failure to loan him the additional money caused him to default on his note.

The Bank moved to strike Tilley’s jury trial demand. The circuit court granted the motion and proceeded with a bench (non-jury) trial, following which the court ruled in favor of the Bank on its foreclosure claim and against Tilley on his counterclaim. Tilley appealed. The Bank first argued that under the “clean-up doctrine”, a court of equity may also decide any legal issues in a case. However, the Tilley court clarified that, due to the passage of Amendment 80 to the Arkansas Constitution, which merged courts of law and equity, the clean-up doctrine has been abolished in Arkansas. Now, a court must look at the remedies sought by a party to decide whether the party’s claim should be decided by a judge as an equitable matter or by a jury as a legal matter.

After deciding that Tilley’s various claims against the Bank, including breach of contract and negligence, are historically legal claims that carry the right to a jury trial, the court next examined whether Tilley waived his right to a jury trial when he signed the loan agreement with the Bank. The loan documents contained a jury waiver clause stating that each party “expressly waives any right to trial by jury of any claim . . . arising under this Agreement or . . . in any way connected with or incidental to the dealings of the parties . . . .” However, siding with Tilley, the Supreme Court held that a predispute contractual jury waiver is unenforceable under the Arkansas Constitution. Even though Article 2, §7 of the Arkansas Constitution states that “a jury trial may be waived by the parties in all cases in the manner prescribed by law”, the Supreme Court interpreted this language to mean that, unless an Arkansas statute or court rule provides otherwise (as in the case of arbitration agreements, which are governed by the Arkansas Arbitration Act), a jury trial waiver “may take place only after a jury demand has been made” and, thus “a jury trial cannot be waived before litigation begins.”

Three justices dissented from the Court’s opinion. In a dissenting opinion which was joined by Justice Womack, Justice Wood opined that the majority interpreted our Constitution too narrowly and that under the common law of this State, a prelitigation contractual jury trial waiver is permissible, as long as it is entered into knowingly and voluntarily.

Clearly, the implications of the Tilley decision are far-reaching. Not just banks, but businesses of all kinds, from landlords to automobile dealers, typically include jury waiver provisions in their contracts. Under Tilley, those waivers are now invalid and one who wishes to try his or her legal claims to a jury, rather than to a judge, will be free to do so.

Let’s Be Civil. Joint Custody of Your Child Depends On It.

Arkansas law favors joint custody of children following a divorce. But if mom and dad cannot cooperate and communicate with each other, a joint custody arrangement will not be tolerated by our courts.

Civility, or a lack thereof – we’re used to hearing about the issue in the political arena. But, as the Arkansas Court of Appeals made clear in Hewett v. Hewett, 2018 Ark. App. 235 (April 4, 2018), it is a vitally important concept in the realm of family law, as well. In the Hewett case, Kelly and Angie Hewett were divorced in 2012, at which time custody of the couple’s five year old son was awarded to Angie. The parties had difficulty communicating after the divorce and continually argued, with each repeatedly taking the other to court. In 2016, reciting a litany of complaints about Angie’s behavior, Kelly filed a motion to modify custody. The circuit court found that there had been a material change of circumstances warranting a change of custody and found that it was in the child’s best interest to award joint custody. Under Arkansans law, joint custody means both parents individually are entitled to an approximate and reasonable equal division of time with the child. Ark. Code Ann. §9-13-101(a)(5).

Angie appealed to the Court of Appeals, which reversed the circuit court’s decision. The appellate court noted that it is a long-standing rule that the primary consideration in child custody cases is the welfare and best interest of the child. It also stated that to change custody, the court must determine that a material change in circumstances has transpired. The court then found that the only circumstances mentioned by the circuit court was the parties inability to get along or communicate civilly with each other. However, the Court of Appeals determined that nothing about the Hewetts’ “bickering and name-calling was new or had significantly worsened.” Citing its holding in Li v. Ding, 2017 Ark. App. 244 (April 19, 2017), the Court of Appeals held that while an award of joint custody is favored in Arkansas, as stated in Ark. Code Ann. §9-13-101(a)(1)(A)(iii), “the mutual ability of the parties to cooperate in reaching shared decisions in matters affecting the child’s welfare is a crucial factor bearing on the propriety of an award of joint custody, and such an award is reversible error when cooperation between the parties is lacking.” Applying this principle to the Hewetts’ case, the Court of Appeals found that the circuit court’s award of joint custody was based on the parents’ inability to cooperate and communicate and, therefore, joint custody was inappropriate. Primary custody was restored to Angie.

We could all stand to see a little more civility in this world. But for divorcing couples seeking joint custody of their children, the Arkansas Court of Appeals has made it clear that this issue could not be more important.

Don’t Like That VRBO Vacation Rental Next Door? Read Your Covenants Before You Complain!

Vacation travel isn’t just about hotel rooms anymore. VRBO.com and Airbnb.com are often the first places people look for lodging when traveling out of town. But what if it is the house next door to yours that is suddenly on the short-term rental market? Before you complain, you need to read your subdivision’s covenants.

There are probably few of us who haven’t used, or at least heard of, vacation rental websites like VRBO.com and Airbnb.com, which connect travelers to short-term rental properties in communities across the country and the world. Many folks would much prefer renting a private home rather than a block of hotel rooms for their family reunion, Razorback football weekend or bachelor party. But what do the neighbors think?

A group of neighbors in Hot Springs was unhappy enough to file a lawsuit when the owners of a 5,000 square foot house on a 6.07 acre lot near Lake Hamilton listed their property on VRBO.com. The neighbors claimed that putting the house on the rental market violated the subdivision’s bill of assurance, or covenants, which stated that none of the lots shall be used “for other than residence purposes” and, further, that none of the lots shall be used “for any commercial purpose, including motels, tourist courts, motor hotels, hotels, garage apartments, apartments, etc.” The circuit court agreed with the neighbors and granted an injunction against the owners, prohibiting the rentals. However, the Arkansas Supreme Court reversed the lower court and ruled for the homeowners, finding that the covenants did not specifically prohibit rentals. Vera Lee Angel Revocable Trust v. Jim O’Bryant & Kay O’Bryant Joint Revocable Trust, 2018 Ark. 38 (February 8, 2018).

In reaching its decision, the Supreme Court began by noting that Arkansas law does not favor restrictions on land and, thus, any restrictive covenants against limitations on the free use of land must be strictly construed. The court found that renting the property did not change the essential character of the house as a “residence.” As for whether the short-term rental of the property violated the restriction against using the property for commercial purposes, the court said that the examples of commercial uses set out in the bill of assurances were different from the use of the property as a single-family dwelling and that the receipt of rental income did not “transform the character” of the surrounding subdivision. Relying on case law from Virginia, Maryland and Alabama, the Arkansas Supreme Court found that while the covenants prohibit the property from being used for any “commercial purposes”, they are silent with regard to rental of the property. Therefore, consistent with the principle that such covenants must be strictly construed in favor of the unfettered use of property, the court concluded that the lack of a specific restriction against rentals of the property compelled a ruling in favor of the landowners.

So, whether you are considering buying a house or thinking about putting your house on the vacation rental market, be sure, first, to read very carefully any applicable subdivision covenants. As for developers and attorneys tasked with drafting such covenants, remember that any use which is not specifically prohibited in the covenants will, in all likelihood, be allowed.

What’s In A Name?

Charities often attract gifts from wealthy donors by agreeing that a building, facility or program will carry the donor’s name. What happens, however, if that donor’s name subsequently becomes tarnished and the charity wishes to remove it? Vanderbilt University was required to repay an 83-year-old donation of $50,000 in present day dollars – to the tune of $1.2 million – in order to remove the word “Confederate” from the name of a building on its campus. The lesson: granting naming rights should be carefully scrutinized and the retention of “un-naming” rights under the gift agreement should be considered.

The issue of naming rights may become a concern if a major donor is accused or convicted of a crime, declares bankruptcy, or is engaged in nefarious activities with which a charity does not wish to be associated. However, unless “un-naming” rights are preserved, the removal of a donor’s name may not be as easy as removing letters from a building facade. The donor may be able to insist that the name cannot be changed or, if it is, that the contribution be returned.

Vanderbilt University learned this when a Tennessee appeals court ruled that the University could change the name of a building known as “Confederate Memorial Hall” only if it returned to the donor the value – as adjusted by the consumer price index – of the original contribution. In 1933, the United Daughters of the Confederacy (“UDC”) had contributed $50,000 to the George Peabody College for Teachers for the construction of a building. The contract required the building be named “Confederate Memorial Hall.” Peabody College merged into Vanderbilt in 1979, and Vanderbilt assumed all of Peabody’s obligations. The building’s name, etched in stone above its entrance, became controversial over the ensuing years, and Vanderbilt expressed its intent to remove the name. The UDC filed suit, alleging that renaming the building would be a breach of contract. The court ruled in favor of the UDC, holding that the obligation to retain the name continues for as long as the building stands and that if Vanderbilt desired to rename the building, it would be obligated to repay the UDC the value of the original gift in today’s dollars. Tennessee Division of the United Daughters of the Confederacy v. Vanderbilt University, 174 S.W.3d 98 (Tenn. App. 2005).

Ten years after the Tennessee court’s decision was handed down, Vanderbilt decided that would repay the donation – now valued at $1.2 million – and rename the building. The University’s chancellor said that the name was “a symbol that is, for many people, deeply offensive and painful.” The UDC, though disappointed with Vanderbilt’s decision, said that it had no legal choice except to accept the $1.2 million.

There are other examples of institutions attempting to walk-back naming rights. At Villanova University, for example, the “John E. DuPont Pavilion” was re-named the “Pavilion” after DuPont (the great, great grandson of the original E. I. DuPont de Nemours) was convicted of murdering former Olympic wrestler David Schultz. After the namesake of its recreation center was sent to federal prison for bankruptcy fraud and money laundering, Seton Hall’s Board of Regents adopted a new naming policy which allows for the removal of names from facilities. The Houston Astros baseball club had to pay bankrupt Enron Corporation $2.1 million to remove the Enron name from its stadium, which is now known as Minute Maid Park. The Baltimore Ravens and the Tennessee Titans have also gone to court to reclaim naming rights to their stadiums after their donors went bankrupt.

The University of Arkansas and other institutions around this state have proudly named buildings and facilities after their donors – Reynolds Razorback Stadium, Bud Walton Arena, the Walton Arts Center, and the Verizon Arena come readily to mind. If, in the future, a wayward heir or a financial collapse were to sully one of those donor’s names or businesses, could the name be removed? Perhaps not, unless “un-naming” rights were reserved in the contract. Donors and donees, take note and draft accordingly!

* Source material for this post gathered from Robert L. Fox’s article “Vanderbilt University Pays $1.2 Million to Donor to Rename ‘Confederate Memorial Hall’” published by the Planned Giving Design Center on its website, www.pgdc.com.