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JANUARY 1976 VOL. 10, NO.1

~e THE OFFICIAL PUBLICATION OF THE ARKANSAS BAR ASSOCIATION

Arkansas Lawyer SPECIAL FEATURES

OFFICERS Robert C. Compton. President Herschel H. Friday. Vice-President James M. Moody, Secretary-Treasurer

EXECUTIVE COUNCIL Robert Hays Williams Thomas F. Butt G. Alan Wooten David Solomon Wayne Boyce Randall W. Ishmael John A. Davis. III LeRoy Autrey Joe D. Woodward Leonard Scott Robert D. Ross Virginia Tackett

EX-DFFICIO Robert C. Compton Herschel H. Friday James M. Moody James B. Sharp Samuel C. Highsmith Boyce Love

Cover Story - JUdge Terry L. Shell Cover Story - Justice Elsijane T. Roy Basic Considerations in Employment Discrimination Legislation Jerry D. Jackson How to Live with RESPA Michael J. Baker and Regulation X and Fred I. Feinstein Arkansas Criminal Code - an Overview Jim Guy Tucker Ethics Quiz Specialization Important "CLE" Programs

10 22 4 12 25 33 29 20

REGULAR FEATURES President's Report Robert C. Compton 2 C. R. Huie 25 Juris Dictum Legal Econom ics Fran Shellenberger 18 Law School News 34 Oyez-Oyez B. Tarkington 3 In Memoriam................................ 38 Executive Council Notes James M. Moody 24 Service Directory Inside Back Cover Aegis........................................ 36 Addenda C. E. Ransick 39

EDITOR C. E. Ransick

EDITORIAL COMMITTEE Donis B. Hamilton Samuel C. Highsmith Robert T. Dawson

Published quarterly by the Arkansas Bar Association, 400 West Markham. Little Rock, Arkansas 72201. second class postage paid at Little Rock. Arkansas. Subscription price to non-members of the Arkansas Bar Association $6.00 per year and to members $3.00 per year included in annual dues. Any opinion expressed herein is that of the author, and not necessarily that of the Arkansas Bar Association. The Arkansas Lawyer. or the Editorial Committee. Contributions to The Arkansas Lawyer are welcome and should be sent in two copies to the Arkansas Bar Center. 400 West Markham. Little Rock, Arkansas 72201.

All inquiries regarding advertising should be sent to The Arkansas Lawyer. above address.

January 1976/Arkansas Lawyer/1

PRESIDENT'S REPORT

by Robert C. Compton

Since my report in the October issue, I have traveled to Jonesboro to make a few remarks in behalf of our Bar Association at the investiture of Judge Terry Shell as our newest United States District Judge, I appeared before our Supreme Court and moved the admission of 134 new lawyers to practice, We have honored Judge Elsijane Roy with a reception at the Bar Center, Our Fall Legal Institute in Fayetteville was short on attendance but long on quality of program and an enjoyable time in the Ozarks, Following the institute we had a special meeting of our House of Deiegates. At that time we voted to present the Uniform Rules of Evidence to the next legislature as Arkansas Bar Association sponsored legislation, We also adopted and then forwarded to our entire congressional delegation resolutions opposing the enactment of federal standards for workmen's compensation and enactment of laws authorizing the Justice Department to enforce disciplinary proceedings against members of the bars of the courts of the United States, On the positive side, we adopted resolutions urging the passage of the omnibus district judgeship bill and the bill authorizing an increase in United States Circuit judgeships, including our Eighth Circuit, and urged our congressional delegates to work toward the filling of those positions as soon as possible, I have met with other state bar presidents in WaShington, D,C, in order to unify and strengthen our efforts to prevent the enactment of federal no-fault legislation, It now appears that no such legislation will be

2/Arkansas Lawyer/January 1976

enacted this year, Our bar association has conducted six regional medical evidence seminars and we have completed two of four regional workmen's compensation seminars, Margaret and I were the guests of Bob Pugh, President of the Louisiana Bar Association, when he and his wife, Joann, had as their house guests in Shreveport, Justin Stanley of Chicago, President-Elect of tha American Bar Association, and his wife, Leigh, We will be the guests of the Oklahoma Bar Association in Oklahoma City on December 3-5 and I will then attend a regional meeting of the American Bar Association in Chicago to discuss in depth the question of whether to change our canon of ethics to permit some form of advertising by lawyers, Our new Supreme Court Building will be dedicated on January 9, 1976, and I have been invited to make some remarks in behalf of our bar association, All of our members are urged to attend our mid-year meeting in Little Rock to be held on January 22-23, 1976, at which time we will have an in-depth study of our newly enacted criminal code, The House of Delegates will then meet again on Saturday, January 24, 1976, which meeting will have been preceded by a meeting of our Executive Council on Saturday, December 13, 1975, Your officers and delegates welcome any suggestions you may have for the improvement of our association,

:I.

-~

OYEZ

- OYEZ ••II

by Barbara Tarkington Membership Secretary

G.rald P. Brown, Paragould, has been appointed by Gov. Pryor as Chancellor of the 12th Chancery Circuit.

PHILIP E. DIXON, Little Rock. is heading a committee sponsored by the Pulaski County Bar Association to study ways of improving the county courthouse.

Robert D. Cabe, Little Rock, has been chosen general chairman of the 1975-76 alumni loyalty fund at Hendrix College.

Oocar Fendler has been presented an award for 40 years perfect attendance of the Blytheville Rotary Club. Boyce Da.la, Lincoln, has been appointed by Gov. Pryor to a six-year term to the state Justice Building Commission. Ben D. Rowland, Jr. has been elected President of the Pulaski Tax Counsel and Ralph Brodie was elected Vice-President; D. Derrell Da.II, Secretary-Treasurer. J. Wm. Fulbright has been made an honorary Knight Commander of the Order of the British Empire. The Federal Power Commission has appointed Jim Guy Tucker to the Executive Advisory Committee of the National Gas Survey and will also serve on the Curtailment Strategies Technical Advisory Committee. Bill Arnold, Crossett, has been named to chair a new special committee of the Na·

tional Conference of Commissioners on Uniform State Laws to draft a Uniform Act on Licensing of Health Professions.

A. W. (Dick) Horne, Little Rock; Waller Niblock, Fayetteville; and N. Galnel Norton, Jr., Little Rock, were named by Gov. Pryor to serve on the Tax Revision Commission. Sandra Harper has been named an Assistant U.S. Attorney for the Eastern District of Arkansas. Jeff Davllj Henry D. Ginger; and Kenneth Welt were recently appointed administrative law judges in the Social Security Administration Little Rock office, making a total of seven. H. William Allen attended a conference in Chicago sponsored by the ABA for young lawyers. Bill Clinton, a law professor at Fayetteville. attended a conference in California, co-sponsored by the ABA and the American Assembly of Columbia University. Dan M. Burge, Blythevi lie. has been named by the Arkansas Supreme Court to serve as the First Congressional District representative on the State Board of Law Examiners with his term expiring in 1978 and Robert W. Henry, Conway, was reappointed to the Second. Mary Currie, a 1975 graduate, has been appointed law clerk for Federal JUdge Paul X. Wllllami. The Texarkana Bar Association lawyers from Texas and Arkansas gave a dinner honoring Federal Judge Joe Fisher from the Eastern District of Texas. The Northeast Arkansas Bar Association elected new officers at their September meeting; Joe Boone, President; C. B. Nance, Jr., Vice-President; and Bill Ro••, Secretary-Treasurer.

Jamel C. Johneon has been elected President of the Baxter-Marion County Bar Association at its October meeting and Edward Cunningham was elected Vice-President; Dr_ Luttrell re-elected secretary-Treasurer. The Legal secretaries of Garland County with the Garland County Bar Association held a professional study course for legal secretaries during September and October. The Rose Law Firm is adding a third story to its building. Royce O. Griffin, Little Rock, was an instructor of an evening class in business law at the Pulaski V 0cational Technical School held in Sep-

tem ber and October. In septem ber the Arkansas School Board Association and the University of Arkansas co-sponsored a 2-day course in school law with G. ROIl Smith, Little Rock, as one of its instructors. Judge Royce Wel18nberger was guest speaker at a September meeting of the Hope Kiwanis Club and a November meeting of the Hope Rotary Club. Six 1975 graduates have been named as Deputy Prosecuting Attorneys for Pulaski County; MrI. Elizabeth Wlillami DanlellOn, George H. Bailey, Fred Hart, Jr., Rodney D. McDaniel, R. Jack Magruder III and Da.ld H. Wlillami. The law firm of Davidson, Plastiras & Horne, Ltd. has announced that Cyril Holllnglworlh has been named a principal in the firm. F. WlllOn Bynum, Jr. has become a partner of the Pine Bluff law firm which now is listed as Dickey, Drake and Bynum. Robert F. Fuaaell, previously with the U.S. Attorney's office in Little Rock, has opened a private law office in the First National Building, Suite 1742, Little Rock. Raymond E. Tyra, formerly with the ABA in Chicago. is now associated with the law firm of Schwab and Parks of Oallas.

Ronald Winningham, former Deputy Prosecuting Attorney for the Third Judicial District. is now in private practice in Newport. John Dee Lawrence, General Attorney for Southwestern Bell, has been transferred from Little Rock to the Dallas, Texas office and Philip I. McConnell, from San Antonio, has been named to represent the Little Rock office. Mary Edmlaton, N. Little Rock; Tim 808, Pine Bluff; and Ron.C. MIIII, Little Rock, have moveifto Dallas, Texas to attend SMU. Terry R. Kirkpatrick, previously with Drake University Law School, is now with the Attorney General's office in Little Rock. George O. Jernigan, Little Rock, has been appointed Interim Secretary of State by Gov. Pryor November 5. Frank J. Huckaba, Mountain Home, has been appointed by Gov. Pryor as Judge of the 11th Chancery District. Judge Guy celebrated his BOth birthday November 9th with an open house given by Barbara and Guy Amsler, Jr. !I__

Am"..

January 1976/Arkansas Lawyer/3

BASIC CONSIDERATIONS IN EMPLOYMENT DISCRIMINATION LITIGATION -By Jerry D, Jackson SOURCES OF THE LAW OF EQUAL EMPLOYMENT OPPORTUNITY

An article In the November 16, 1974, Issue of Bua/ne.. W_ magazine dealing with the Increase In the number of business lawsuits In the United Statas notes tbat the most significant Incraase has been In the civil rights flald. Data obtained from the Admlnlstrattve Office of the United States Courts reflects that the number of new civil rights cases Increased from 700 cases In 1964 to 8,443 such cases In 1974. The growth In the number of civil rights cases results primarily from the passage of the Civil Rights Act of 1964.

This laglslatlon created a cause of action for employment discrimination on the basis of race, color, sex, religion or national origin. As the result of the continuing growth In this area of the practice of law, It Is certain that Increasing numbers of lawyers who do not consider themselves to be labor law speclal/sts are likely to become Invotved In either the prosecution or defense of an employment discrimination case.

The purpose of this article Is to briefly outline the basic considerations Involved In the typical employment discrimination case Involving a private employer.

4/Arkansas Lawyer/January 1976

A. Title VII 01 the Civil Right. Act 01 1964 Most employment discrimination cas¡ es allege a violation of Title VII of the Civil Rights Act of 1964, as amended by the Equal Employment Opportunity Act of 1972 (42 U.S.C. l12000e" _.). Section 703 of the Act provides that it shall be an unlawful employment practice for an employer: (1) to fail or refuse to hire or to discharge any individual, or otherwise to discriminate against any individual with respect to his compensation, terms, conditions, or priVileges of employment, because of such individual's race, color, religion, sex or national origin; or (2) to limit, segregate, or classify his employees or applicants for employment in any way which would deprive any individual of employment opportunities or otherwise adversely affect his status as an employee, because of such individual's race, color. religion, sex or national origin.

After the 1972 amendments to the Act. coverage under Title VII was extended to all private employers of 15 or more persons, public and private educational institutions, state and local governments. labor unions and public or private employment agencies.

B. Other Leglst.tion Although Title VII is the foundation for most employment discrimination claims, other legislative enactments may be applicable in appropriate cases: (1) The Civil Rights Act of 1866 (42 U.S.C. 11981) has been held to bar discrimination in private employment on account of race or color. It has not been held to extend to discrimination on the basis of sex.

(2) The Civil Rights Act of 1871 (42 U.S.C. 11983) has been held to provide a remedy for discrimination based on sex as well as race arising under color of state law.

(3) The Civil Rights Act of 1871 142 U.S.C. 11985(3) I may provide a remedy against private persons, who, in the absence of state action, conspire and act together with the purpose of invidiously discriminating against a protected class.

(4) The Equal Pay Act of 1963 129 U.S.C. 1206(d) I outlaws pay differentials based on sex.

(5) The Age Discrimination in Employment Act of 1967 (29 U.S.C. 1621, et Mq.), prohibits discrimination against employees aged 40 to 65.

(6) The National Labor Relations Act. as amended (29 U.S.C. 1141 et I8q.), has been held to ban discrimination by an employer or a union as an unfair labor practice.

C. ExecuUve Orde..

In Addition to the above legistative enactments, some employers may also be subject to various Executive Orders dealing with equal employment opportunity: (1) Executive Order 11246 (september 24, 1965) 3 C.F.R. 339, as amended by Executive Order 11375 (October 13, 1967), 32 Fed. Reg. 14303, prohibits discrimination in employment on the basis of race, color, religion, sex and national origin by government contractors.

(2) Executive Order 11141 (February 12. 1964) 3 C.F.R. 179. is a declaration of the policy of the federal government against discrimination on basis of age by government contractors.

SUBSTANTIVE MATTERS A. WlNlt i. Prohlbltlld Dlecrlmln.Uon? The basic test for prohibited discrimination was established by the United States Supreme Court in Grigg. v.

Ouke Power Co., 401 U.S. 424 (1971 l, where the court held that an employment practice, although neutral on its face, is unlawful if it results in a disparate impact on a protected class, unless it can be shown that there is a substantial business justification for the practice. By applying this test, a number of commonly used employment selection procedures and personnel practices have been invalideted by the Courts as having a disparate Impact on a protected class.

The following is a brief summary of these decisions: (1) Teeling. The use of any employment test which has an adverse impact on women or minority group applicants is unlawful unless it is properly validated as being job related, regardless of the intent or motivation of the employer in the use of the test. Grigg. v, Ouke Power Co.,

IUp'.,

Alb.mlrle Plp.r Co. v.

Moody, _ U.S. _, 43 LW 4880, (1975).

(2) Educ.Uon.1 Requirement â&#x20AC;˘.

Requirement of a high school diploma or a college degree as a condition of

employment or promotion is unlawful where the requirement disqualifies minorities at a substantially higher rate than others and where there is no e....idence that such a requirement is a significant predictor of pertormance.

Grigg. v. Duke Power Co., supre; U.S. v. Georgia Power Co., 474 F.2d 906 (5th Cir. 1973).

(3) Nepotlom. Preferential hiring of friends or relati....es of present employees may be unlawful where the present work force contains a disproportionately low percentage of minor· ity workers. Local 53, Albe.to. Worker. v. Vogler, 407 F2d 1047 (5th Cir. 1969).

(4) Pre.....ployment Inqulrieo. Preemployment inquiries concerning race, color, religion or national origin which are recorded on an applicant's application form will be considered as evidence of discrimination in hiring or other employee selection procedures.

St.mp. v. Detroit Edloon Co., 365 F.Supp. 87 (E.D. Mich. 1973).

(5) Ane.t Record•. Refusal to hire job applicants because of their arrest records has been held to be unlawful, Green v. Mlooouri Pacilic R.R. Co., _F.2d-, 10 FEP Cases 1409 (8th Cir. 1975); Gregory v. LIlian Syotem., Inc.,472 F.2d 631 (9th Cir. 1972). However, this practice may be justified if a business necessity can be shown such as in the employment of a hotel bellman who would have access to the luggage and rooms of the hotel's Rlchardoon v. Hotel Corp. guests. of America, 468 F.2d 951, (5th Cir. 1972) aff'g 332 F.Supp. 519 (E.D. La. 1972).

see

JERRY D. JACKSON Partner In the Ullie Rock law linn 01 Spllzberg, Mllchell .. Hay.; LL.B., Unlverolty 01 Arkanoa., 1968; Member, Arkan.a. Labor Board, 1971-1973; Member, Arkan.a. Public Service Commillion, 1974-1975.

(6) Garnl.hment and Credit Rating.

Absent a showing of business necessity, an employer's policy of discharging employees for incurring excessive garnishments has been held unlawful where the evidence reflects that minorities disproportionately occupy the lower economic levels of society. Wallace v. Debron Corp., 494 F.2d 674 (8th Cir. 1974), Johnoon v.

Pika Corp. of America, 332 F.Supp.

490 (DC CenCalif. 1974). However, incon....enience and expense may be considered a business justification in garnishment cases. See Roblnoon v.

Lorillard Corp., 444 F.2d 291 (4th Cir. 1971). An employer's policy of rejecting applicants because of poor credit records has also been held to have a disparate impact upon minorities.

Gilmore v. The Green County Democratic Executive Committee, 435 F.2d 487 (5th Cir. 1970), citing Brook. v.

Belo, 366 F.2d 1 (5th Clr. 1966).

(7) Seniority Sy.lem•. Under section 703(h) of the Act, it is not unlawful for an employer to apply different standards of compensation or different terms, conditions, or privileges of employment to its employees pursuant to a "bona fide seniority or merit system". However, seemingly neutral policies may be unlawful If such policies serve to perpetuate the effects of part discrimination. Local 187, United Paperworker. v. U.S., 416 F.2d 980 (5th Cir. 1969) U.S. v. Bethlehem Steel Corp., 448 F.2d 652 (2nd Cir. 1971); Quarleo v. Phillip Morri., Inc., 279 F. Supp. 505 (E.D. Va. 1966).

B. Se. Dlocrlmlnatlon (1) Pregnancy and Malernlty B_lIt•.

In cases involving discrimination on the basis of sex, much of the litigation has Involved pregnancy and maternity benefits. In these cases, the Courts have generally followed the guidelines promulgated by the EEOC requiring that pregnancy be treated as any other temporary disability. EEOC Guideline. on Dlocrlmlnatlon Beeau.. of Se., (29 C.F.R., Part 1604); Holtheu. v.

Complon .. Sono, Inc., 514 F.2d 651, (8th Cir. 1975) Wetzel v. Liberty Mulual Inouranee Co., 511 F.2d 199, cert. granted May 27, 1975, 43 LW 3621.

However, In Geduldlg v. Aiello, 417 U.S. 484 (1974), the U.S. Supreme Court held that California's policy of not providing insurance under its disability benefit program does not violate the Equal Protection Clause of the Constitution.

(2) Slate Protective Law•. Attempting to comply with state protective laws for women proved to be a doubleedged sword for employers. The EEOC guidelines provide that state laws limiting hours women may work or other terms and conditions of em-

ployment conflict with Title VII and will not be considered a defense to a charge of unlawful discrimination based on sex. The courts have tended to support this view. Rooenlleld v•.

Southem Pecilic Co., 444 F.2d 1219 (9th Cir. 1971). Further, where state law provides that certain benefits be paid to women but not to men, the courts have resolved this apparent conflict with Title VII by holding that men should be given the same benefits rather than denying them to women. Hey. VI. Potlatch For••ta, Inc., 485 F.2d 1081 (8th Cir. 1972).

(3) Children. The cou rts have further held that women with pre-school children must be hired on the same basis as men with small children unless an employer can show that this obligation makes women significantly poorer workers than men. Phillip. v.

Martin Marietta Corp., 400 U.S. 452 (1971).

(4) Hair Length and Grooming Standerda. Sex discrim ination cases are not necessarily confined to female plaintiffs. A number of male employees have challenged their employers' grooming standards and hair length policies as constituting unlawful discrimination on the basis of sex. In such cases, the EEOC has ruled that a long hair policy applied to males is unlawful where there is no business necessity. EEOC Decision 71-1539.

May 9, 1971. However, three appeals courts have held that refusing to hire or discharging males because of hair length does not constitute sex discrimination. WIIII.mham v. Macon Telegraph Pub. Co., 507 F.2d 1084 (5th Clr. 1975); Fagan Y. Natlonel Ce.h Regloler Co., 481 F.2d 1115 (CA D.C. 1973); Baker v. California Land Title Company, _F.2dL-, 8 FEP Cases 1113, (9th Cir. 1974).

C. Religion or Natlonel Origin There has not been much litigation involving discrimination based on religion or national origin. The courts have held that an employer must make "reason~ able accommodation" to the religious needs of his employees, where such accommodations can be made without causing an undue hardship on the employer. Riley v. Bendl" Corp., 464 F.2d 1113 (5th Cir. 1972); Reid v. Memphla Pub. Co., 468 F.2d 346 (6th Cir. 1972). In the area of discrimination based upon national origin, most of the cases have dealt with discrimination against Spanish surnamed Americans where such persons are alleged to have suffered disparate treatment because of characteristics peculiar to their heritage, e.g.• minimum height requirements, requiring that employers be able 10 spaak English, etc. The United States Supreme continued on page 6 January 1976/Arkansas Lawyar/5

Beale Conllderellon., continued from page 5 Court has held, however, that discrimination against aliens because of lack of U.S. citizenship does not violate Tille VII, Espinoza v. Farah Mfg. Co. 414 U.S. 66 (1973).

O. Excepllon. Under TItle VII There are certain exceptions to the prohibitions contained in Title VII. (1) Bona Fide Occupational Quallftcation. Section 703(e)(1) of the Act provides that it shall not be an unlawful employment practice for an employer to hire and employ employees on the basis of his religion, sex, or national origin, in those certain instances where religion. sex, or national origin is a bona fide occupational qualification reasonably necessary to the normal operation of that particular business or enterprise.

This so-called "BFOQ" exception has been narrowly construed by the courts. See Phillip. v. Martin Marlatta Corp., supra; W..... v. Southern Bell Tel•• Tel. Co., 408 F.2d 228 (5th Cir. 1969); Bowe v. Colgate-Palmollve Co., 416 F.2d 711 (7th Cir. 1969). The test for the application of the exception has been held to be one of business necessity, not business convenience.

Olaz v. Pan American World AJrway., 442 F.2d 385, 388 (5th Cir. 1971). The BFOQ qualification is not applicable to justify discrimination based on race or color.

(2) Bona Fide Seniority or Merit Sy.tern. Section 703(h) of the Act provides that it shall not be an unlawful employment practice for an employer to apply different standards of compensation, or different terms, conditions, or privileges of employment pursuant to a bonafide seniority or merit system, or a system which measures earnings by quantity or quality of production or to employees who work in different locations, provided that such differences are not the result of an intention to discriminate because of race. color, religion, sex or national origin.

(3) Profealllonally Developed Ability Te.t•. Section 703(h) provides, further, that it shall not be an unlawful employment practice for an employer to give and to act upon the results of any professionally developed ability test provided that such test, its administration or action upon the results is not designed, intended, or used to discriminate because of race, color, religion, sex or national origin.

(4) Bull..... Nec:ea.lly. In addition to the above exceptions, business necessity can be alleged as a justification for a practice which may be shown to have a disparate effect on a protected class.

6/Arkansas Lawyer/January 1976

(5) Good Fallh. The Supreme Court recently made it clear that good faith is not a defense since the prohibitions contained in Title VII are concerned with the consequences of the employment practice and not the motivation.

Albarmarle Paper Co. v. Moody, 43 LW 4880.

PROCEDURAL MAnERS Having briefly touched upon the substantive provisions in Title VII, brief con· sideration should also be given to the procedural questions involved in an employment discrimination case.

A. EEOC Proceeding.

A case under Title VII is commenced by filing a written charge of discrimination by or on behalf of an aggrieved person with the Equal Employment Opportunity Commission. This charge must be filed within 180 days after the occurrence of an alleged unlawful employment practice unless a continuing violation is alleged. Notice of filing of the charge must be served upon the employer by the EEOC within 10 days after filing. The EEOC conducts an investigation of the charge to determine whether reasonable cause exists to believe a violation of the act has occurred, and, if the charge is found to have merit, the EEOC will attempt to arrive at a conciliation agreement between the parties. Due to the huge backlog in the charges being investigated by the EEOC (estimated at from 80,000 to 100,000 cases), it is not unusual for the EEOC to take 12 to 18 months to process a charge. If a charging party does not desire to wait that long tor the EEOC to act, under Section 706(1) of the Act, he may request a "right to sue" letter after 180 days have passed since the filing of the charge. even though the EEOC has not made a determination on the merits of the charge. In such event, a "right to sue" letter will be issued and the EEOC will not process the charge further.

B. Judicial Proceeding.

Assuming that the charge has been processed, reasonable cause has been found, and no settlement obtained, the EEOC, or the individual charging party, may bring suit against the respondent (1) Jurledlctlonal Prerequillt... Jurisdiction of claims under Title VII is vested in the Federal District Courts in the state where the alleged unlawful employment practice was committed.

Two basic jurisdictional prerequisites to a suit under Title VII were recognized in McDonnell Dougla. Corp. v.

Green, 411 U.S. 792 (1973), where the United States Supreme Court held that (1) the timely filing of the charge with the EEOC and (2) the receipt of a "right to sue" letter from the EEOC

were jurisdictional prerequisites to a suit under Title VII. (2) Prior Arbllratlon Proceeding•. In those cases where the employee has recourse under a contractual grievance and arbitration procedure. the Supreme Court has held that prior consideration and rejection of the plaintiff's claim by an arbitrator does not bar action under Title VII. Alexander v. Gardner-Denver Co., 415 U.S. 36 (1974). However, the opinion and award of an arbitrator may be received into the record for consideration by the trial court. See Drlpp. v•• United Parcel Service, 381 F.Supp.

421 (w.o. Pa. 1974).

(3) TIme Limitation•. With re9ard to the time limitations under Title VII, an individual plaintiff is required to bring suit within 90 days of receipt of the "right to sue" letter from the EEOC. See Tult v. McDonnell Dougla. Corp., _F.2d_, 10 FEP Cases 929, (8th Cir. 1973). At least in the 8th Circuit it has been held that presentation to the court cieri< of the notice of the right to sue and a request for appointment of counsel within the 90 day period is sufficient. HUlton VI. General Motor.

Corp., 477 F.2d 1003 (8th Cir. 1973).

However, it should be noted that in cases brought under 42 U.S.C. §1981, the Federal District Courts apply the appropriate statute of limitations of the state applicable to a similar state action.

(4) Cia.. Action•. Most discrimination cases are brought as class actions on behalf of the named plaintiff and all other persons similarly situated as employees of the defendant or as applicants for such employment. In order for class action status to be certified, the plaintiff must meet the requirements contained in Rule 23 of the Federal Rules of Civil Procedure with regard to numerosity, commonality, etc. The courts have been liberal in determining class action status, finding that civil rights actions are by nature class actions, merely because the alleged discrimination is based on a common denominator - race, color. sex, religion or national origin. Carr Y. Conoco Plaallc., Inc., 295 F.Supp.

1281, aff'd, 423 F.2d 57 (5th Cir. 1970), cert. denied, 400 U.S. 951 (1970). See JUdge Ross' analysis of the commonality requirement in Mosley va. General Motor. Corp., 497 F.2d 1330 (8th Cir. 1974). Although the named plaintiff must secure a right to sue letter from the EEOC, it has been generally held that each member of the class need not file a charge with EEOC. Pettaway v. American Ca.t Iron Pipe CO.,494 F.2d 211 (5th Cir.1974); Bowe v.. Colgate-Palmollve Co., supra.

However, only those parties named as

respondents in the charge filed with the EEOC may be named as defendants in an action under Title VII. Mickel v. South Employment Service, 377 F.2d 239 (4th Cir. 1967).

(5) Trial De Novo. Judicial proceedings are clearly tried de novo, and an EEOC finding of no reasonable cause does not bar a lawsuit filed under Title VII. However, the investigative report and finding of probable cause by the EEOC has been held to be relevant and highly probative evidence in a related Title VII suit. Smith v. Universal Servlcel, Inc., 454 F.2d 154 (5th Cir. 1972).

(6) Scope 01 the Complaint. It is not uncommon for an individual to file a charge with the EEOC without the assistance of a lawyer, and many times the charge will relate only to a specific or particular incident involv ing the individuaL When a lawyer is retained for the purpose of filing suit on the charge, it is also not uncommon for the lawyer to desire to raise additional issues in the complaint which were not included in the original charge. In such cases, the courts have held that the complaint can encompass any type of discrimination "like or reasonably related to the allegation of the charge and growing out of such allegation during the pendency of the case before the Commission". Sanchez v. Standard Brandl, Inc., 431 F.2d 455 (5th Cir. 1970). See also Parham v. Southwaltern Bell Telephone Co. 433 F.2d 421 (8th Cir. 1970).

(7) Sultl by the EEOC. Prior to the 1972 amendments, the EEOC was confined to informal methods of conference, conciliation and persuasion.

Under the 1972 amendments, the EEOC was empowered to bring an action directly against the respondent in the same manner as the charging party. In cases against state or local governments, only the Attorney General, and not the EEOC, has the authority to file suit to enforce the previsions of the Act. At least in the 8th Circuit, neither the EEOC nor the charging party may file a separate suit after an action is commenced by the other party. EEOC v. MllIOurl Pacific R.R. Co., 493 F.2d 871 (8th Cir. 1974).

However, the remaining party may be allowed to intervene. The 5th Circuit has held that where the charging party dismisses his suit, the EEOC may file its own action so long as the action would not be banned by res judicata.

EEOC v. Huttig Salh & Door, 511 F.2d 453 (1975). With regard to the time limitations on a suit by the EEOC, it has been held by two circuits that the EEOC's right to sue is not subject to any time limit. EEOC v. Cleveland 4

crimination by showing that (1) he was black, (2) he applied for a vacant job for which he was qualified, (3) he was rejected, and (4) the employer continued to seek applicants. Once a prima facie case of discrimination is demonstrated, the burden shifts to the employer to show some legitimate non-discriminatory reason for the rejection. If the employer does so, the applicant should have the right to show that the reason advanced was, in fact, a pretext by showing that the presumptively valid reasons for his rejection were in fact a "cover up" for a racontinued on page 8

Millo Co., 502 F.2d 153 (4th Clr. 1974) and EEOC v. LoullVllle and Nalhvllle Raitroad Co., 505 F.2d 610 (5th Cir. 1974). After an unreasonable delay, however, the defense of laches might be appropriate.

(8) Burden 01 Proof. The burden of proof in a discrimination case is. of course, on the plaintiff to ultimately prove the alleged violations. However, it is relatively easy for the plaintiff to establish the prima facie case. In McDonnell Dougla.. Corp. v Green, IUpra, the Supreme Court held that a minority applicant for employment made a prima facie case of dis-

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Baalc Conald.ratlon., continued from page 7 cially discriminatory motive. Accordingly, the applicant could show (1) evidence that others similarly situated had not been refused employment. (2) evidence of the employer's treatment of the employee during previous employment, and (3) the employer's general policy and practice with respect to minority employment.

(9) Stall.llc•. Statistical evidence has been used extensively to prove both the existence and non-existence of discrimination. The 8th Circuit has held that statistics alone may establish a violation of Title VII. Parhem v.

Southw..tern B.n T.lephon. Co., 433 F.2d 421 (8th Cir. 1970). See also Reed v. ArIngton Hotel Co., 476 F.2d 721 (8th Cir. 1973); and United St.t.. v.

N. L. Industrl.., Inc., 479 F.2d 354 (8th Cir. 1973). However, in McDonn.1I Dougl•• Corp. Y. Green, aupr., although the Supreme Court said that statistics as to the employer's policies and practices may be helpful to a determination of whether the employer's refusal to rehire the plaintiff conformed to a general pettern of discrimination against Blacks, it also cautioned against placing too much importance on statistical evidence.

See H.st.r v. Southern Ry. Co., 497 F.2d 1374 (5th Cir. 1974).

(10) R.medl... Where discrimination Is found to exist. section 706(g) of Title VII authorizes the courts to order such affirmative action as may be appropriate. which may include, but is not limited to, reinstatement or hiring of employees, with or without back pay. or any other equitable relief as the court deems appropriate. The relief available normally includes injunctive relief and back pay. (a) Back Pay Award•. Although the courts have said that an award of back pay is not automatic. SCheeller v. San Diego Yallow C.b., Inc., 462 F.2d 1002, 1006 (5th Cir. 1972), in its recent decision in Alberm.rl.

Paper Co. v. Moody, supra, the Supreme Court held that "ordinarily" a plaintiff who successfully obtains injunctive relief under Title VII should be awarded back pay as well and that absence of bad faith on the part of defendant is not sufficient reason for denying back pay. Title VII specifically provides that a back pay award may not accrue from a date earlier than two years prior to filing of the charge with the EEOC. Furthermore, a back pay award may be reduced by interim earnings.

Thornton v. Ea.t T.... Motor Fr.lght,497 F.2d 416 (6th Clr. 1973). (b) Damag••. Generally. compensatory and punitive damages are not 8/Arkansas Lawyer/January 1976

available under Title VII. However. compensatory and punitive damages may be available in actions under 42 U.S.C. 11981. See Johnson v.

Railway Expr... Agency, supra.

Furthermore. awards of back pey in a 11981 case would not be subject to the two-year limitation period applicable to Title VII claims. (c) Allom.ye' F.... Attorneys' fees are recoverable by plaintiffs in actions brought under Title VII. 42 U.S.C. f2000e-5(k). However. attorneys' fees may not be recoverable in cases brought under 42 U.S.C. 11981. See Alyeaka Pipeline Service Co. v WIId.m... Society, 419 U.S. 823 (1975); Sabala v. Weatern Gtllalle, Inc., 516 F.2d 1251 (5th Clr. 1975). Attorneys' fees have also been awarded by Federal District Courts to an employer thai prevailed

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in a Title VII action brought by the EEOC. EEOC v. Weat.rn Electric Co., _F.Supp._, 10 FEP Cases 1275 (W.O. Md. 1975). There k" also authority for an award of attorneys' fees to a prevailing defendant employer in a case brought by an individual plaintiff where the plaintiffs claim was "petently groundless".

See Maldonado v. Yellow Freight Sy.t.m, _F.Supp._, 10 FEP Cases 1296 (D.C. Calif. 1975).

(11) Jury Trial. A jury trial Is not available under Title VII since the relief afforded is equitable in nature. However, a jury trial may be available in cases under 42 U.S.C. 11981 where legal relief, including compensatory or punitive damages, is sought by the plaintiff. See Johnson v. Railway Expr...

Agency, supra. J __"

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WRITE: Director of Admis.,ion" Reid Hall-Room 23C Lake Forest Academy-Ferry Hall Lake Forest, Illinois 60045

West Announces Second Bicentennial/Centennial Art Competition For Lawyers A second Bicentennial/Centennial Lawyers Art Competition which offers $15,000 in cash prizes and is open to all members of the bar and to students at any accredited law school has been announced

by West Publishing Company, Eligible entrants from throughout the country are urged to submit their original artistic efforts, which may include paintings, drawings, photography, or other forms of two-dimensional art to vie for a $5,000 first prize, $2,500 second prize, $1,500 third prize and twelve certificate of merit awards for $500 each.

Theme of the competition is "M i1estones of Law." Contestants are invited to depict any legal milestone or combination of milestones or events from any time in the nation's 200 years since independence from England. The competition is being held in conjunction with the U,S, Bicentennial and West's own 100th Anniversary in 1976, as a law book publisher. The firm sponsored a similar contest a year ago, and its success prompted the decision to hold a second competition. This year the contest has been expanded to include law school students.

Deadline for entries is March 15, 1976. Entries should be sent to Lawyers' Art Competition, West Publishing Company, 50 West Kellogg Boulevard, St. Paul, Minnesota 55102. Judging will be by an independent panel of art experts. Com plete ru les for the contest may be obtained by writing to West. 1--.

Why does a lawyer specializing in

Bankruptcy use Words and Phrases everyday?

For the same reason a lawyer handling Trusts Family Law or Criminal Law does. ' Words and Phrases works for these lawyers by providing direct access to case law fast. Here's how you use it: In handling bankruptcy proceedings, the question of preferential transfer often arises. Example: Company A deposits $75,000 to the account of Company B, alleged bankrupt. Subsequently, Company A receives the proceeds from the sales of $75,000 worth of tools, which had constituted a part of Company 8's inventory. Is this a preferential transfer?

Look 'Jp .preferential transfer in Words and Phrases. (It's alphabetically arranged Without rndexes or tabies.) Under those two words you find all the state and federal judicial interpretations: 35 citations plus a cross reference to fraudulent transfers for further research if need be.

Whatever your practice, Words and Phrases gives you direct access to case law. That's why so many lawyers use it every day. Your West representative will show you how Words and Phrases will work for you.

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WORDS AND PHRASES You'll fmd yourseff using it every day

Season's Greetings

~

From The OFFICERS AND STAFF OF THE ARKANSAS BAR ASSOCIATION AND THE ARKANSAS BAR FOUNDATION January 1976/Arkansas Lawyer!9

Cover StorY

JUDGE SHELL "A Judge must be clear from the spirit of party, independent of all favor, well inclined to the popular institutions of his country; firm in applying the rule, merciful in making the exception; patient, guarded in his spesch, gentle and courteous to all. Add his learning, his labour, his experience, his probity, his practiced and acute faculties, and this man is the light of the world, who adorns human life and gives sscurity to that life which he adorns."

-Sydney Smith, 1824

Terry Lee Shell became U.S. District Judge tor the Eastern District ot Arkansas at investiture ceremonies on September 26, 1975 at the Federal District Courthouse in Jonesboro.

The court was called into session

by U.S. Marshall Len Blaylock and convened by U.S. District Judge G. Thomas Eisele. The invocation was given by Rev. Emil Williams, pastor of the First Baptist Church of Jonesboro. U.S. District Judge Oren Harris read Judge Shell's commission, signed by President Ford and U.S. Attorney General Edward H. Levi.

Judge J. Smith Henley, recently elevated to the U.S. Eighth Circuit Court of Appeals, administered the oath of office as Judge Shell stood with his right hand raised, his left on the Bible held by his wife Sara.

After Judge Shell received his judicial robes from Miss Lenita Stack, his veteran court reporter, he received a gavel from President Joe C. Boone, Jr. of the Craighead Cou nty Bar Association on behalt ot the lawyers in the county.

U.S. Senator John L. McClellan, Chiet Justice Carleton Harris ot the Arkansas Supreme Court, Arkansas' Congressmen Bill Alexander and Ray Thornton, President Robert C. Compton ot the Arkansas Bar Association, and Edward L. Wright, Past President ot the Arkansas and American Bar Associations spoke during the ceremony, praising Judge Shell's contributions to the Bench and Bar. Congratulatory telegrams from U.S. Senator Dale Bumpers, Arkansas Governor David Pryor and Congressman John Paul Hammerschmidt were read at the ceremony.

10/Arkansas LawyeriJanuary 1976

Following his investiture, Judge Shell held a reception in chambers for the many guests in attendance.

More than 200 persons attended the luncheon honoring Judge Shell in the ballroom ot the Cari R. Reng Center at Arkansas State University.

Terry Lee Shell is a native Arkansas born in Franklin, Arkansas, on April 22, 1922, one of two sons and a daughter born to the late Elmer G. Shell and Roxie Shell. Judge Shell's brother, the late Lt. John Russell Shell, was killed in action in North Africa in World War II. His sister, Mrs. Charles Wiles, resides In Jonesboro, as does his mother.

The Shell family moved to Jonesboro in Judge Shell's youth. He attended Jonesboro Public Schools and graduated trom Jonesboro High School in 1939. He attended Arkansas State College (now Arkansas State University) until 1942, when he volunteered for the Army ASTP program. Judge Shell served during World War II with the 99th Infantry Division serving in Europe. During the "Battle of the Bulge" Judge Shell was captured by German troops.

Following discharge from the service in November of 1945, Judge Shell re-enrolled at Arkansas State College, receiving a BSE Degree in 1946. He then attended the University of Texas School of Law from 1946 through 1948 and graduated from the University of Arkansas School of Law in 1949, receiving LL.B. and JD Degrees from the University of Arkansas School of Law. After graduation from law school, Judge Shell entered the private practice of law in Jonesboro, being

associated with the late Edward L. Westbrook from 1949 through 1960.

Judge Shell served one term as a State Representative in the Arkansas State Legislature from 1953 through 1954. He was elected Prosecuting Attorney of the Second Judicial District and served as prosecutor from 1955 through 1960, when he was elected Chancellor of the Twelfth Chancery District. Judge Shell served as a Chancellor with distinction and honour from 1961 until his resignation on September 25, 1975, to accept appointment as U.S. District Judge.

During his ten years as Chancellor of the Twelfth Chancery District Judge Shell was an active member of the Arkansas Judicial Council, serving on the Executive Board as Vice President in 1971 and as President in 1972.

Judge Shell was one of 18 members appointed by Chief Justice Carleton Harris and then Attorney General Ray Thornton to serve on the Arkansas Criminal Code Revision Committee, which authored the new Criminal Code of Arkansas adopted as Act No. 280 of the Acts of 1975.

He is a member of the Craighead County, Northeast Arkansas, Arkansas and American Bar Associations and a member of the American Judicature Society. He is an active member of First Baptist Church of Jonesboro. Judge Shell Is married to the former Sara McCutcheon of Hooks, Texas. They are the parents of two daughters, Mrs. Larry (Suzanne) Churchill of Jonesboro and Jeannie Shell, a student at Jonesboro High School.

January 1976/Arkansas Lawyer/11

How To Live With "RESPA" And Regulation X Fred I. Feinstein and Michael J. Saker

The Real Estate Settlement Procedures Act of 1974' (RESPA) has hit as a bombshell whose blast will cease reverberating in the ears of lawyers and lenders only when the pile of required paperwork reaches that same level. The purpose of the Act, like Truth.in.Lending, is to encourage buyers and sellers of residential real estate to "shop around" for cheaper settlement services. This article will concentrate on some of the key

problems under RESPA and the regulations adopted to date that may cause difficulty and confusion in the first few months following June 20, the Act's effective date.

This article does not consider the constitutionality of the Act nor the manner in which jurisdiction over the subject mat-

lished in the May 22, 1975, Federal Register, What II Co.ered?

The Act covers loans secured by resi-

dential real property designed principally for the occupancy of from one to four families where there is a transfer of title. Home improvements are not covered, nor are "second mortgages" unless loan proceeds are used to finance the purchase of a residence. Most refinancing of existing loans is outside

the scope of RESPA except where there is a transfer of title as part of such refinancing, such as a conveyance into a land trust. 2

ter was accomplished. It reflects only the

To be covered by the Act, the lender must be (1) a lending institution, the

personal view of its authors, who pre-

deposits or accounts of which are in-

sume the Act's validity. Also, keep in mind that changes in RESPA regulations may be occuring daily. although publi-

sured by FSLlC, FDIC or any other federal agency, or (2) a lending institution which is regulated by FHLBB or any other federal agency or (3) a "creditor," as defined in section 103(0 of the Con-

cation deadlines necessitated our freez-

ing this material as of July 3, 1975. The words "settlement" and "closing" are used interchangeably in this article.

Regulation X, Form HUD-1 and lender "settlement costs" booklet were pUb-

sumer Credit Protection Act,3 who makes or made new investments in resi-

dential real estate loans aggregating more than $1,000,000 in either the calen-

EDITOR'S NOTE: This article originally appearad In tha Chicago Sar Record, 56 Chi. Sar Rec. 346 (1975). If Is raprlnted here with the permission of the Chicago Sar Association and the Chicago Sar Record. The article Is followad by an update, as of September 30, 1975. by the authors - pointing out that "RESPA" Is under fire In The Congress. Howaver. It would arr pear that tha House and the Senata ara abandoning tha drive to repeal or suspand "RESPA". H.R. 10283, favorably reportad on November 6, 1975 by Housa Sanklng Subcommittee on

12/Arkansas Lawyer/January 1976

dar year in which settlement occurs or in the prior calendar year.' FHA, VA or other government-assisted or insured loans are covered. Also covered are all

loans "ELIGIBLE" for purchase by FNMA, GNMA or FHLMC. Note that GNMA has authority to purchase mortgages under 12 U.S.C. 1720 (a) as the President shall determine to carry out the purposes of 12 U.S.C. 301(b).5 Arguably, one can conclude that the broad authority of GNMA brings nearly all oneto-four family residential mortgage transactions within the Act, including purchase money mortgages and loans from relatives. As a device to avoid coverage,

it is probably against public policy to include a provision that GNMA shall not acquire the mortgage.

Farms of 10 acres or less are covered.

Tracts of 100 acres or more are not covered. Farms of more than 10 but less than 100 acres are not covered if the value of the residence and the land it stands upon is less than the value of the remaining farm land and buildings in the tract. s Residential construction loans are covered if part of the proceeds of the loan is used to purchase the underlying real estate.7 Assumed mortgages or "subject to" mortgages are covered if

Housing, could be actad upon by tha Housa at this tima.

Senator Proxmlre's new S. 2596 Is similar to H.R. 10283. with few exceptions. Tha Senate Committee on Sanklng, Housing and Urban Affairs Is schadu/ed to take up S. 2596 at this tima.

Both H.R. 10283 and S. 2596 would revise, and not suspend or rapeal "RESPA". In view of its currant Importance. "RESPA" has been tha subject to two recent Arkensas Sar Association Sam/nars - the practicing lawyer naads to maka an especial effort to kaep current In this field.

the lender makes an "assumption approval"; Le., approval is conditioned on a change in interest rate or other terms and conditions of the note or document creating the lien, or approval is made in consideration of the payment of a fee over $SO.a Real estate installment sales contracts are not covered unless held as a security by an RESPA lender.'

Note that purchasers of real property for resale in the ordinary course of business are not covered by the Act and not entitled to advance disclosures when they purcha.. the real property. The lender should require an aflidavit and perhaps a hold harmless from the buyer, to protect against a situation where the buyer later claims he was not a purchaser in the ordinary course of business. 1o Conlllct. Between Act and Regulation.

RESPA delegates to the secretary of HUD primary responsibility for promulgating regulations for certain sections of the Act. We note that some regulations appear to be in direct conflict with the terms of the Act." RESPA sections 18(b) and 24 CFR 82.3(a) indicate that no liability shall be imposed for any act done or omitted in good-faith reliance on HUD'S regulations until such regulation is "amended, rescinded or determined by judicial or other authority to be invalid lor any reason." Assuming a valid delegation of authority by Congress and proper adoption 01 rules, apparently you may rely on the regulations where they are in conflict with the Act. What " the Loan I. Covered?

What problems does this present? In this article we will deal with RESPA's seven principal areas: (1) prescribed uniform settlement statement; (2) advance disclosure of settlement costs; (3) routine lender distribution of the HUD "settlement costs" information booklet; (4) prohibition against the lender's making commitment without the seller's disclosure of certain information to the buyer including, under certain circumstances, the previous selling price; (5) prohibition against kickbacks and fees other than for services actually per-

formed; (6) prohibition against the seller's requiring that the buyer use a specific title company and (7) limitation on lender tax and insurance escrow requirements. This article will not consider other RESPA features such as: (1) disclosure to the lender of the identity of beneficiary where the loan is to agent, trustee or fiduciary; (2) demonstration land recordation system; (3) range of settlement costs information to be distributed in certain areas as a demonstration; (4) mandate that HUD report within three to five years regarding further legislation.

"Shop-Around" Dlecloaur..

RESPA section 6 requires timely advance disclosure of settlement costs, to both seller and buyer, or the lender faces the consequence of civil liability. It would appear that public policy considerations would forbid buYer and seller to give a total waiver of advance disclo-sure and hold harmless to lender. Section 6 requires disclosure "at the time of the loan commitment, but in no case later than twelve calendar days prior to settlement .... " We believe that lenders can follow the regulations '2 which provide that they can mail or deliver the disclosure not later than seven calendar days after the date of loan commitment.

Lenders should not routinely tell borrowers verbally, "You've got the loan except for credit check and committee approval," since 24 CFR 82.2(h) turns these words into a commitment. This is another reason why lenders should routinely issue only written commitments.

Once timely disclosure has been given, settlement shall not occur sooner than 15 calendar days after mailing the disclosure or 12 calendar days after de· IIYerlng the disclosure. Where, at the date of loan commitment, settlement is anticipated to occur more than 60 days thereafter, the seven-day rule doesn't apply and the lender may mail or deliver the disclosure not later than 60 days prior to the anticipated date of settlement,13 Therefore, it would seem prudent for the lender to obtain at the date of commitment a writing that sets forth the expected closing date, if it differs

FRED I. FEINSTEIN

FRED I. FEINSTEIN, associate In the firm of McDermott. Will & Emery, received his BSC and JD from DePaul Unlvarslty. A member of the illinois State Bar Association and of the Chicago Bar Association. Mr. Feinstein serves on the CBA's Real Property Committee (Vice Chairman, Real Estate Taxation SuI>committee; Land Use SUbcommittee). His latest publication, "Suits to Qu/at Title or Partition Interests In Real Estate," Is a chapter In Real Eatete Lltlgetlon, published by the Illinois Institute for Continuing Legal Education. A frequent lecturer at IICLE seminars. Mr. Feinstein recently spoke at a seminar on RESPA.

from the contract provision. If an even later settlement is expected, the lender may postpone mailing or delivering the disclosure, so long as at least 60 days elapse from disclosure to closing. If anti· cipated closing is then changed so as to be within 67 days of the date when the lender Is advised of the change, the lender must give the disclosure not later than seven days after being advised 01 the revised date.'· A limited right to waive the 12-day "shop-around" period applies only when a closing occurs within 21 days after the date of the buyer's loan application. The settlement may not occur sooner than three days after the actual receipt of disclosure by the borrower and seller. Both buyer and seller must execute the waiver, which apparently may be signed at the closing and which must be attached to Form HUD-1. Either party may revoke the waiver at any time prior to closing - thus requiring the lender to postpone the date of closing at least nine days, since the Act mandates a 12· day period from disclosure to closing where there is no waiver. 15 Cloaing on a Date certain It appears that additional time will now be needed to process mortgage applications, and purchasers shoo Id therefore take this time-delay into account in preparing their mortgage contingency clauses. Where there is a contractual obligation to close on a date certain, the effect of a delay in the closing date caused by the requirements of RESPA and the resulting breach of contract is unclear. RESPA section 17 clearly provides that the underlying contract between buyer and seller is not affected by the terms of the Act, and, therefore, failure to close on the date set forth in the contract remains an act of default The regulations attempt to modify the liability of a lender for possibly causing such a defeult by its failure to give timely advance disclosure and the resulting loss of the sale to the buyer or seller. 1 • This regulation, apparently protecting the lender, will no doubt be tested the first time a lender fails to give timely notices and a continued on page 14

MICHAEL J. BAKER

MICHAEL J. BAKER has been Asslstanl Director of the illinois Institute for Continuing Legal Education since 1971. After his graduation from ChlcagcH(enl College of Law In 1969. Mr. Baker worked as a title axam/ner for the Chicago Title and 7rust Company. Before coming to the Institute. he practiced law In the areas of real estate, probate. Irust and federal taxation. Mr. Baker parllclpated as an author In the revision of Stephen LDve's book Ill1no1. Mechanic.' Llena, and has been editor of at least sixteen other Institute handbooks.

January 1976/Arkansas Lawyer/13

"RESPA" and Regulation X, continued f,om page 13 resultant breach of contract is declared.

To minimize this risk, provision should be inserted in the real estate sales contract agreeing to extend the closing date where necessary to complete the advance disclosure requirements of RESPA, but fixing some outside date by which closing mUI' occur. A disclosure chart showing hypothetical loan application and commitment dates and resulting required disclosure dates is furnished in the appendix to this article.

Trulh~n-Lendlng

Dloclo.ures

Pursuant to 24 CFR 82.7 (p), the Truthin-Lending disclosure must be made on the date shown in column D of the disclosure chart, unless required e.rlier under Regulation Z. The Truth-in-Lending form must be again furnished at closing.

See column F of the disclosure chart.

The Truth-in-Lending form is attached to Form HUD-1.

Statuta of Limitation. and Olher Lender Delen...

The statute of limitations for failure to make disclosure is one year and apparently begins running on the day following the dates shown in column D of the disclosure chartY Note that 24 CFR 82.7(n)(1) appears to give the lender an opportunity to "cure" his failure to make a timely disclosure. If at any time prior to closing, the lender discovers that he has failed to make the appropriate advance disclosure he may mall the disclosure and wait 15 days to close, or d.~ liver the disclosure and wait 12 days to close. We believe that lenders shouid not rely on the "cure" provision and routinely fail to give timely advance disclosure, because this may subject the lender to potential class action liability.

Every lender should have a written policy in its internal operating manuals or records providing procedures adopted to avoid errors in making RESPA se~颅 tion 6 disclosures. Section 6(b)(2) and 24 CFR 82.7 (n)(2) give the lender an "out" if he can show "that the violation was not intentional and resulted from a bona fide error nolwllhotandlng lhe malnlenance of procedures adopted 10 avoid any such .rror." Having a written procedure in the bank's internal manuals will make the proof of a "bona fide error" easier.

Form HUD-l a. Dloclooure and Closlng Statemenl If the lender is required by 24 CFR 82.4(c)(2) to make advance disclosure, Form HUD-1 must be used as the settle14/Arkansas Lawyer/January 1976

ment statement, as well as for the advance disclosures. 18 A set of instructions for completing both the disclosure and settlement portions of the form can be found in Appendix A to Regulation X. The regulations give the disclosing lender the option to make separate timely disclosures to buyer and seller, but information we consider private, such as points, interest rates, attorneys' fees, broker's commission, etc., which appear on lines 700 through 1400 of Form HUD1, muot be disclosed to both buyer and seller. 19 Aclual eo.t.

Y.

Eotlmates

The preamble to Regulation X which is not a rule, regulation or legal opinion that can be relied upon under RESPA section 18(b) - seems to permit the lender to give actual cost figures from a schedule without contacting the provider, where the lender knows the provider's schedule of fees and reasonably expects that schedule to be followed in the present case. Where no provider of that particular settlement sar路 vice has been selected, the lender may make an estimate based on general practices in the area. A more conservative view is that the lender must, in each instance, contact the provider of settlement services to ascertain actual costs, since they may vary materially from transaction to transaction based on direct negotiation between provider and user. Note that RESPA section 6(a) imposes a duly on the iender "to obtain or cause to be obtained from persons who provide or will provide services ... the amount of each charge they intend to make." This is an inconsistency between the Act and "unofficial" HUD guidelines. The authors are split on this issue and can offer no suggestion as to which way to proceed. 20 Lenders should require, as part of their loan application, that they be furnished with a copy of the contract so that they can ascertain for the purpose of disclosure what settlement services are reqUired and who is to pay for them. Lenders should be cautious in raising "points," since an argument can be made that such raise is in violation of RESPA section 12 and 24 CFR 82.10, which prohibit charging a fee for preparation of advance disclosure statement and information booklet.

Exception. to Adyance Dioclooure 24 CFR 82.7(g) requires advance disclosure, on Form HUO路1, with minor exceptions for certain items found on lines 700 through 1400. Attorneys' fees are excepted from advance disclosure if the buyer or seller independently hires and pays the attorney and the attorney does not render an opinion as to the validity of

the lender's mortgage. Lawyer's fees for services rendered to the lender and billed to the buyer or seller must be disclosed. 21 Hazard insurance independently obtained is excepted from advance disclosure22 and "inspection charges and other charges" may be excluded when they are not required by the lender and when the buyer or seller "independently elects to obtain such services and independently selects the provider of such services."23 We do not feel that the broad exclusionary language of 82.70) is meant as an exception for all services specifically referred to in items 700 to 1400 if hired directly by the user of the services. In particular, we feel that if HUO had meant an exception under 82.7(j) for real estate brokers' fees, this category - because of its importancewould have received a specific exclusion in a separate paragraph. Therefore, we feel that brokers' fees must be disclosed in all cases.

Specla' Informallon Booklet.

RESPA seclion 5 reqUires each lender to furnish a special information booklet to each borrower at the time of loan application or to deliver or mail it not later than the third business day after the application is received, but it appears that there is no direct penalty under RESPA for failing to comply. No doubt, willful failure to live within the spirit of RESPA will cause other federal agencies to take reprisal actions.

Dloclooure of Prevlou. Seiling Price of Exlotlng Reel Properly and Other Informalion Section 7 of the Act is unusual: it says that no lender may issue a commitment unless the seller - over which the lender has no control - has given certain information to the buyer prior to the time of commitment Since the typical loan contingency clause refers to the buyer's "ability" to obtain a commitment, it is therefore imperative, from a purchaser's Viewpoint, that our standard form contracts be changed so that the seller is obligated to provide such information as is required by RESPA or is necessary to allow the lender to issue its commitment and close the transaction. Without this provision, the seller may refuse to make the disclosure set forth In section 7, thus effectively denying the buyer his mortgage commitment Once again, the lender's failure to comply with the requirements of section 7 apparently can only be punished by other governmental agents acting outside the authority of RESPA, unless the lender's feailure to comply is willful,

which might then result in criminal liability.

Additional contract provisions to assure the buyer that his lender will be able to comply with RESPA would include, first, a representation that the seller is the "owner" of the property.

RESPA does not define "owner" and it would appear that, until such definition, state law would therefore control. In Illinois, the status of "land trusts" is unclear, but it would appear that disclosures by the trustee will satisfy the requirements of section 7. However, it is questionable as to how many land trustees will assume such responsibilities in light of the criminal penalties in section 7. Second, a contract provision should state that construction was completed more than 12 months prior to the date of commitment. This creates a small problem, since the date of contract when such representation will be made will precede the date of commitment. "Construction" is undefined, but it appears to mean the taking of vacant land and placing of construction upon it and does not include remodeling "construction," no matter how extensive. Third, the contract should set forth the date the seller acquired the property, since section 7 requires that certain disclosures be made based on certain dates and other factors.

RESPA does not define the "date of acquisition," and therefore it can be argued that this means either the date the seller entered into a contract to originally purchase the property since equitable conversion 24 has taken place, or the date the actual closing and transference of titie took place. The position consistent with Illinois law would be the date that equitable conversion occurred.

More controversial would be a provision in the contract stating in the alternative that (1) the seller has owned the property for at least two years from the date of the buyer's loan application, or the seller has used the property as a residence within the meaning of RESPA section 7, thus allowing the lender to issue its commitment without advance disclosure of the previous selling price (the Act does not specify when or for how long the seller shall have used it as a residence, nor does it say that the seller need have used it as his principal place of residence; the Act states "used the property as a place of residence" and does not refer necessarily to its being a residence at the time of sale); or that (2) the seller has owned the property less than two years from the date of the buyer's loan application, or has never used the property as a residence, and the purchase price of the last arm's length transfer of the property was L - , followed by a list of improvements with dates and costs. In the event that the seller is unwilling to provide any

1 1/2

No No No

price of the last arm's length transfer" could be the subject of an entire article and is not being deait with here.) Again, if a lender elects to take a business risk by not requiring the section 7 disclosure before making commitment, he should document the facts by affidavit to avoid (hopefUlly) the problem of "willful" violation.

Since RESPA section 7(c) also contains criminal penalties for anyone willfUlly providing false information, it is strongly suggested that a lawyer not act as agent for his client in furnishing any section 7 disclosure information.

2 mos.

Yes ?

When Section 7 Dloclosur. Mu.t

of this information in the contract, so long as he is contractually obligated to provide the information following the date of contract by a writing to the buyer, the lender's requirements as set forth in section 7 will be satisfied. A chart summarizing the effects of section 7(a)(3) follows: Years Property Owned 5 5 1 1/2 1 1/2 1 1/2

Years Used as Residence 5

o o

Sales Price Disclosure Required

B. Mad. Brokers might consider amending their listing agreements so they will have all of section 7 information in their file, along with authority to deliver this to the purchaser only after the execution of the contract. The seller's lawyer might also consider obtaining such a writing for his file, to be used in the same manner. If the property has been acquired by foreclosure sale, this wou Id appear to be the "last arm's length transaction," and unless the foreclosing party holds on to the property for two years or uses it as its residence, disclosure appears necessary. The same would appear true for the holder of tax deeds. The Act does not consider sales by estates, and the more conservative approach for the lender would be to require that disclosures be made. It is unclear what the last purchase price would be, but it appears logical, however inconsistent with the Act, that the value used for estate tax purposes should be disclosed, since it would be a current market value figure, Many lenders may elect to ignore this conservative approach and will assume a business risk by issuing commitments without section 7 disclosure where it appears that the disclosure might kill the deal and that the seller is obviously outside the intent of section 7, which is to deal with speCUlators making mere cosmetic repairs and turning property over at a quick profit. Where the iender assumes this business risk, it should obtain from buyer and seller detailed affidavits regarding the facts as to why they believe the transaction is outside section 7, such as the executor's decedent having used the property as a residence thus possibly negating the "willful" aspect of failing to comply with the Act. The lender is faced with a unique problem in dealing with condominiums or other developments where the builder, converter or developer has not sold his Inventory within 12 months of completion of construction and where he has not "owned" the property two years prior to the buyer's loan application. (The question of determining the "purchase

The Act does not obligate the seller to provide information, nor does it specify when the seller must furnish the section 7 disclosure except that it apparently must be before the lender's commitment. It seems that disclosure is meaningless to effectuate congressional intent unless it comes prior to the execution of the contract. This result is not carried out by the Act. RESPA section 17 specifically provides that the validity of the contract is not affected by the Act. Therefore, if the purchaser does not like the section 7 disclosures, he is still bound by the contract unless he can convince the seller to renegotiate.

Kickback. and Fee Splitting RESPA section B provides many litigation opportunities, since there are both civil and criminal penalties involved.

Neither remedy requires "willful" violations. Therefore, you might be cited for civil or criminal action if you unknowingly participate in a fee split or kickback which is specifically prohibited by the Act. It might be prudent for the parties (buyer, seller, lender, lawyer, broker, etc.) to join in an affidavit at closing, stating that there have been no fee splits or kickbacks and that all payments made in the transaction have been for services actually performed. With respect to lawyer fee splitting, see Kravl. v. Smith Marina, Inc.'s and Illinois Code of Professional Responsibility Disciplinary Rule 2-107(A).

Regarding real estate broker fee splitting, it appears that HUD intends to take a strict approach based on congressional intent. 28 The term "actual services rendered" appears to be quite specific, and members of mUltiple listing services and national broker groups will no doubt be called upon to defend their positions: that each party receiving compensation is performing an actual service and that the amount to be paid is commensurate with the services rendered. It is also uncontinued on page 16 January 1976/Arkansas Lawyer/15

"RESPA" and Ragulallon X, continued from page 15

clear whether title companies will continue to be able to entertain at cocktail parties or supply attorneys with suggested contract forms free of charge.

E.crow" Tax Reserves and Title Insurance For lenders. we note that the provisions dealing with tax and insurance escrows do not appear to require a material variance from the actual procedures now in effect in metropolitan Chicago. Subject to other governmental regulations, lenders may still establish initial tax and insurance reserves at the time of closing, based on the last ascertainable bills. However, a conservative reading of RESPA indicates that if the property was last assessed as unimproved, lenders should calculate their initial reserves based on vacant land but for future months may demand that their borrower deposit sums based on reasonable estimates of actual taxes. The Act provides that lenders may demand that their borrowers deposit any deficiency between the amounts retained in the reserve and the actual bills.27 Section 9 of RESPA provides that a seller shall not directly or indirectly require that a buyer use a particular title insurance company. In Illinois, purchasers normally select the title company through a provision in the contract requiring that the seller procure title insurance, in many instances naming the title insurance company. Some suggest that the word "indirectly" in RESPA section 9 leads to the conclusion that the seller cannot accept an offer with the specific title company named. To avoid this argu-

The following bills have been introduced which would repeal RESPA outright: H.R. 5352, H.R. 8923, H.R. 9227, H.R. 9331, H.R. 9333, H.R. 9389. Three bills have been introduced which would amend RESPA in several material aspects; H.R. 8341, S. 2327, S. 2349. The Senate Banking and Housing Committee has already concluded its hearings on the Senate bills while the House Banking, Currency and Housing Committee has yet to start its hearings.

With respect to the amendatory bills, H.R. 8341 would exempt lenders from complying with RESPA sections 4 and 6 if total settlement charges in a deal are $100 or less and S. 2327 would suspend RESPA sections 4, 6 and 7. S. 2349 introduced by Senator Proxm ire is a bit more complicated. It would permit HUD to exempt lenders in a particular state from RESPA section 6 advance disclosure reQuirements if settlement charges in that 16/Arkansas Lawyer/January 1976

ment, we suggest that all printed forms delete names of title insurance companies and, instead, leave a blank where a name can be inserted by the purchaser, thus evidencing his free choice of title companies. II would appear that the Torrens system is outside the scope of section 9, since the Act specifically refers to title companies.

Conclulion Although many lawyers and lenders are unhappy with RESPA, the Act is probably going to be around for a while.

Some of the legislative alternatives were far worse. We should seek to deal efficiently with the increased papelWork and to protect our clients and ourselves from the new and complex liabilities created by the Act. Because of the added uncertainties and additional paperwork, we believe that the ultimate result will be increased settlement costs to buyers and sellers. Hopefully, this article has alerted you to some of the more salient probiems and posed some guidance and solutions.

Footnot..

1. P. L. 93-533; 12 U.S.C. 2601 81 oeq.

2. RESPA §3; 24 CFR 82.4.

3. 15 U.s.C. 1602(f).

4. RESPA §3; 24 CFR 82.2(d).

5.24 CFR 82.2(eX4).

6. 24 CFR 82.4(bX2),(3). F_rol June 24, 1975, page 26509.

7. 24 CFR 82.2(eX2).

8.24 CFR 82.2(aXeXl).

9. 24 CFR 82.2(d) and S06 Chamita, inc. v.

F. T.C., 479 F.2d 684 (3rd Cir. 1973), which Involves 8 Truth-In-Lending violation.

Ouestlon: where an illinois land trustee (typically an FDIC bank) oxocutes a real estMe Installment sales contract on behalf of the holder of the beneficial interest, and

Rag"'.,

"RESPA" UPDATE RESPA Laglalatlon In the Congreulonal Mill state are "not excessive," i.e. the average settlement cost in that state is less than 80% of the national average. In making this 80% determination, HUO is not to include brokers' commissions, interest from closing to first monthly payment, mortgage and hazard insurance premiums, tax escrows and recording and transfer charges. In states which don't qualify under the 80% rule, the lender can be exempt from advance disclosure if he pays all settlement charges except for owner's title insurance and those charges I have listed in the previous sentence. The lender may charge a "loan origination fee" not in excess of one percent of the loan and still qualify.

The lender may not charge the buyer or the seller for the settlement charges paid by the lender but may charge a higher annual interest rate to recover his costs.

In so doing, the lender would be exempted from state usury laws. This provision

the contract Is construed as a security Interest (regardless of the passive, mere title-holding nature of an Illinois land trustee) under Charrlita, does that bring the transaction under RESPA? 10. 24 CFR 82.4(b).

11. For example, compare RESPA §6(a) wffh the preamble to RegUlation X and 24 CFR 82.7(f) and (9); compare RESPA § 6(b) wffh 24 CFR 82.7 (b), (c), (h), (I) and (j); compara RESPA §3 with 24 CFR 82.2(eX2), which on Its taco apparantly exempts financing where the security is not real estate but a pledge of the beneficial Interest (personal property in illinois) In 8 land trust. The intent of Congress was probably to include beneficial Inter8Sts in land trusts, since the uftlmate security for the Joan is the right to pos.... real estate.

12. 24 CFR 82.7(b), (c) and (d).

13. 24 CFR 82.7(c).

14. \d.

15. 24 CFR 82.7(d).

16. 24 CFR 82.7(n) (4).

17. RESPA §§6(b) and 16.

18. 24 CFR 82.4(c) (3).

19.24 CFR 82.7(g), 82.8(b).

20. See 24 CFR 82.7(f) lor tho only guidance found In the regulMlons.

21. 24 CFR 82.7(i).

22. 24 CFR 82.7(h).

23. 24 CFR 82.7(j).

24. For a definition of "equitable conversion" and "owner," see Wendt v. Meyers, 59 /II. 2d 246, 3f9 N.E. 2d m (1974); KaUer v.

Schobert, 58 III. 2d 137, 317 N.E. 2d 510 (1974); Anderson v. Cosmopolitan National Bank of Chicago, 54 III. 2d 504, 301 N.E. 296 (1973); Shay V. Panrose, 25 III. 2d 447, 185 N.E.2d 218 (1962); Rahbeln V. Norane, 2 III. 2d 363, 370.;]71, 118 N.E. 2d 287 (1954); Brandt V. Phipps, 389 III. 296, m, 75 N.E. 2d 757 (1947).

25.325 N.E. 2d 417 (III. Sup. Ct. Co. 47476 flied 1I3Ofl5).

26. senate Report No. 93-866; House Report No. 933-1177 27. RESPA § 10(2).

will still not appeal to lenders who would rather receive the money "out front" than amortize it over 20 or 30 years.

Something Wor.- Than RESPA? On September 22, the Federal Reserve Board finally pUblished for comment at page 43516 of the Federal Register proposed regulations under section 409 of P.L. 93-495. This section, enacted prior to RESPA on October 28, 1974, amends the Truth in Lending Act and RegUlation Z to require advance disclosure of closing costs in transactions in which a security interest in real property is or will be retained or acquired by the creditor.

Section 409 does not apply to any transaction to which the advance disclosure requirements of RESPA or RegUlation X are applicable. The advance disclosures under RegUlation Z would have to be given at the time of loan commitment in a "deed and mortgage" deal or prior to

APPENDIX DISCLOSURE CHART

At Date of Com· mitmen.'.\Clos;ng Is ~ to Occur Dal2 or Less. in 24 CFR 2.7(b)

A

B

C

D

E

F

Loan Application Date

Commitment Date (Note that disclosure may be made prior to loan com· mitment.)

Maximum Days Which May Elapse from Commitment to Disclosure

Latest Date Can Furnish Disclosure

Minimum Days Which Must Elapse from. Disclosure to Closing

Earliest Pennitted Closing Date (Assuming disclnsure on date shown in column D)

Note That Lender Must Deliver nr Mail Information Booklet at Later Than 3rd Business Day Aher Receiving Application.

7/10

7

7/17

15 (if mailed)

7/10

7

7/17

12 (if deli\'ered)

8/1

7/29

24 CFR 82.5(a) Expected Closing Date 7/1

At Date of Commitme~Closing Is Expect to Occur in More Than 60 Days.

24 CFR 82.7(c)

Same Real Estate Deal

On 8/1 Expected Closing Changed to 1l/15.

On 9/1 Expected Closing Changed to 1111 (which is within 67 days from 9/1).

(7-day rule applicable)

7 (!rom 9/1)

Closing Must Occur Not Later Than 21 Days After This Date.

Waiver of 12-Day "Shop-Around" Period.

24 CFR 82.7(d)

7/1

making a downpayment in a credit sale (contract purchase) situation. What this means is that home improvement loans and contracts for deed which are now outside the advance disclosure requirements of RESPA would be brought in under this new amendment to Truth in lending. In fact, if RESPA were repealed tomorrow, this new amendment to RegUlation Z would require even broader advance disclosure of closing costs than that which RESPA now requires.

The proposed regs amending Regulation Z contain no exemptions from or exceptions to disclosure as in RESPA. Although the Congressional enactment allows the Federal Reserve Board to provide regUlations permitting estimates of closing costs, the proposed regs do not, in fact, provide for estimates of closing costs.

HUD 80m_hat Ciarill•• RESPA section 7

RESPA section 7(a)(3) requires that no lender shall issue a commitment on a residence on which construction has been compleled more than 12 months unless the seller furnishes the buyer a writing disclosing the date and purchase price of the last arm's length transfer.

The seller is exempted from such disclo-

nnt

8/14

60

10/15

9114

60

11/15

9/8

12

II/I

Latest Date for Actual Receipt of Disclosure

-

7

7/19

sure If he "owned" the property at least 2 years at the time of the buyer's loan application or used it as a residence.

HUe has deait with some of the thorny problems posed by RESPA section 7(a)(3). RESPA legal Opinion NO.1 published at page JJ48() in the July 21 Federal Register provides that: (1) in the case of property acquired at foreclosure sale, the "previous purchase price" is the foreclosure sale price; (2) in the case of property acquired by a deed in lieu of foreclosure, the "previous purchase price" is the amount of debt cancelled plus any additional compensation paid to obtain the deed; and (3) in the case of property acquired pursuant to mortgage insurance or guaranty, it is the amount paid to acquire the property pursuant to the insurance or guaranty or the amount of the unpaid principal balance of the loan at the time the property was acquired.

RESPA legal Opinion NO.2 was published on page 44129 of the September 25 Federal Register. It provides that a seller may estimate the costs of improvements subsequent to his purchase if he cannot ascertain precise figures. It further provides that a buyer may, in eHect, waive section 7 by furnishing the lender with an aHidavit that the seller has fa lied or refused to furnish disclosure and that,

Latest Date Closiog Can Occur

3

7/22

nevertheless, the seHer wishes to consummate the purchase. The legal opinion exempts from section 7 all situations involving loan assumptions and sales subject to existing mortgages unless the lender advances additional funds. It also exempts loans for the purpose of purchasing property at public foreclosure sale, tax sale, bankruptcy sale, sale to enforce a judgment lien or court-approved sale. Where an estate is involved. the legal representative or testamentary trustee is deemed to have "owned" two years if the decedent acquired ownership at least two years prior to the date of the present buyer's loan application and decedent owned the property to the time of his death. The legal representative wi II be deemed to have used the property "as a place of residence" (and thus exempt from section 7(a)(3) disclosure) if the decedent used it as a residence during his ownership.

RESPA legal Opinion No. 2 exempts from section 7 disclosure loans made to one joint tenant, tenant in common or tenant by the entirety to buyout the interest of the other. Section 7(a)(3) is interpreted as not to cover newly constructed housing as to which there has not been a preVious E!rm's length trans· continued on page 19

January 1976/Arkansas lawyer/17

LEGAL ECONOMICS

by Fran Shellenberger

FILE, FILE, WHO'S GOT THE FILE? Audrey, secretary to Anthony Advocate, partner in a law firm with Lawrence Lawyer and A. Young Lyon, arrived at the office right on time as usual. As she placed the day's mail upon her desk, she noticed a note saying, "Audrey, please see me right away - A. A," "Oh, oh," she said to Louise, her coworker, "I wonder what's wrong now." "I don't know," said Louise, "but he's been out here opening file drawers for 15 minutes so he must be looking for something," "Oh boy, I hope we haven't misplaced another file," said Audrey, apprehensively approaching Anthony's office.

"Mr. Advocate, I saw your note.

Do you need something?"

"Yes, Audrey. Mrs. Lyall is coming in this morning to sign that Agreement. Will you bring me her files please?" "All right, sir, I'll get them right away," said Audrey, returning to her office.

Back at her office Audrey opened the proper file drawer and reached in for the files. "Darn," she murmured under her breath, "they're not here," Audrey began checking the drawer again from the beginning just in case the files had been misfiled. A little panicky now, she turned to Louise, "Have you by any chance had Mrs. Lyall's files recently? They're not here in the cabinet," "I remember doing an Agreement for Mrs. Lyall earlier this week. Her files should be there somewhere," Lou ise replied.

Just then Anthony, appearing in his office doorway, said "Audrey, if you're ready with Mrs. Lyall's files, I'll take them now," 1B/Arkansas Lawyer/January 1976

"I haven't located them yet, Mr, Advocate, but they have to be here somewhere. I'll keep looking," "Well, check with Mr. Lyon, will you?," said Anthony impatiently. H~ was working on them at one time.

Audrey hurried to Mr. Lyon's office, only to find that he was expected in the office later than usual that day. She checked his office carefUlly for Mrs. Lyall's files. Unsuccessful she returned to Anthony's office.

"Mr. Advocate, do you suppose Mrs. Lyall's files might be found in your office? I just don't know where else to look; I've already checked Mr. Lyon's office," . .

Anthony, a little weanly, replied, "I've looked in my office, Audrey, but perhaps you should look again.

Remember, you can eliminate everything but blue files from the search.

That new color coding system should help you."

Just then Mr. Lyon appeared in Anthony's doorway, briefcase in hand. Opening it, he pulled out several blue file folders and handed them to Anthony, saying, "Sorry I couldn't return these earlier this morning, but I had a meeting and couldn't get away until now," "Hmmmmmmm, yes, well thanks, Lyon, thanks. I appreciate your bringing them, Audrey and I have been look ing for these."

After Lyon was safely out of earshot, arms flailing, hair flying, Audrey fairly flipped!

"File, file,

Who's got the file?

Look here, look there Over and under and everywhere.

Over there and anywhere, Just find it, SOMEWHERE!" "A lot of good our color coded files are doing us! They might as well be invisible!"

"Now, now, Audrey, you're over-

reacting. Lyon only had the file out a day or two at most," said Anthony.

"A day or two! That means Mrs. Lyall's Agreement probably isn't even in the file. Louise just finished typing it in the last day or two," said Audrey, more upset than ever. "She can't file the Agreement in Mrs. Lyall's file if Mrs. Lyall's file is~'t even here. The Agreement IS probably in our filing basket," Over her shoulder, she called, "I hope you'll say something to Mr. Lyon about removing files," Audrey's file basket was a sensitive SUbject with Anthony. He knew from past experience that Mrs. Lyall's agreement would probably be buried there. Audrey defended her filing, or lack thereof, however, saying she couldn't file if she couldn't find a file in which to file, and when she couldn't find a file she put her filing back in the filing basket so that if Anthony couldn't find what he needed in a file, he had only to check her filing basket to find what he needed for his file! It seemed logical enough to Audrey, and after considering this morning's version of "Who's Got the File"? he could see that perhaps Audrey was not entirely to blame for her filing piling higher and higher.

After Mrs. Lyall had gone, Anthony called Audrey to his office.

"Perhaps there is a real problem with our filing system, Audrey. We lost about a half hour this morning looking for files. If you compute your time and my time and then multiply that by the number of times we play "Who's Got the File?" in this office you come up with an impressive amount of unproductive time. Let's think about this between now and the end of the week. In the meantime, you ask the other lawyers and

staff for their complaints about our filing methods and ask them also to be ready with ideas and suggestions for improving the system. Ask Lawrence to check with his friends at the law firm of Organize, Economize and Oollarwise. I'm sure they'll share their methods with us, I'll look at some of the ABA Economics section's publications we've ordered recently; perhaps there'll be an article on filing methods included in one of them. Ask those interested to meet with me on Friday morning for a few minutes and perhaps together we can come up with enough ideas to improve our system."

That Friday as planned, Anthony met with his partners and staff to discuss the firm's filing failures.

"Well, Lyon, let's hear your complaints first," he said.

"Everything I do is reviewed either by you or by Lawrence before it leaves the office. Consequently, my files can be and usually are scattered all over the office at any given time," said Lyon. "Any suggestions?"

"Let me answer that one, Anthony," said Lawrence. "My friends at Organize, Economize and Oollarwise had the same problems, complicated by much more space and more people handling files. Their lawyers'and staff use an 'Out File,' a bright red file folder with a card stapled to the front. A supply of 'Out Files' is placed at the end of each drawer and there's a reminder on the file cabinet itself saying, "Please Use Out Files.' They fill in the name of the file, their initials and the date on the card. You can quickly tell when a file is out because the red folder is easi Iy visible. Also, the 'Out File' serves as a guide to those replacing files because it is in place of the real file."

"In place?" asked Audrey. "You mean right in the same place the file would be in if it were 'in place?' " "Yes, Audrey, why do you ask?" said Lawrence.

"The reason I can't keep up with my filing is because the files I need are often not 'in place.' If an Out File were 'in place' of the file, my filing could be put in the Out File 'in place' of the real file!"

"Audrey, you may have something there," said Anthony.

"Please go on."

"Well, take the recent incident of Mrs. Lyall's file. If an Out File had been in its place, we'd have known Mr. Lyon had the file, and the agreement you needed that morning would have been right 'in place' even though the file was not."

"I think I understand, Audrey. The Out File becomes a substitute file and stays in place while the file is out. But how and when will we get the things in the substitute file into the real file?"

"I don't think we'd have any problem there," said Louise. "You gentlemen can place files on the shelves next to the cabinets. Audrey and I will place items in the sub-

stitute files in the real files as we replace them in the drawer."

"Well, Lawrence and Lyon, how do you feel about this? Are you willing to try it?" asked Anthony.

"I know I am," said Lyon. "I'd rather go to the cabinet and find a substitute file than search Audrey's file basket."

"I like the idea," said Lawrence, "but we'll have to find another game to tease Audrey about if all her filing finally gets filed."

Next Issue: "It's Got to be In Here Somewhere!" Readers are invited to share ideas for organizing the contents of files within a file with the author. All replies strictly confidential. :I,

"RESPA" and Regulation X, continued from page 17 fer to a person for occupancy. In other words. home builders have received an

exemption from section 7(a)(3) cost disclosure for newly constructed units in in-

ventory which just happen to be unsold one year after construction but where

the builder has not "owned" the unit at least 2 years at the time of the buyer's loan application. A sale by the builder to a speCUlator would not count since it was not a transfer for occupancy. For condominium conversions, the seller of

a condo unit (previously a rental apartment with no prior history of arm's length

transfer) may apply one of several formulas to allocate a part of the overall project cost to the particular unit being

sold.

As yet unanswered is whether a contract purchaser who is an "owner" under real estate law which recognizes equitable conversion is an "owner" under

RESPA section 7(a)(3). HUD states informally that they don't recognize equitable conversion and that they measure ownership from the acquisition of title by

deed. The next question is whether the period of ownership under deed begins running from the date on the deed or from the date of the closing inasmuch as the deed will frequently be fictitiously predated ahead of the mortgage to keep the mortgage in the chain of title.

Possibly, HUD will resolve these and other questions prior to RESPA's (hopefUl) repeal. ~

January 1976/Ar1<ansas Lawyer/19

1976 MIDYEAR MEETING

ARKANSAS BAR ASSOCIATION

JANUARY 22-24, 1976 CAMELOT INN LITTLE ROCK, ARKANSAS covering

In 1969, then Chairman Richard A. Williams of the Legal Education Council of the Arkansas Bar Association announced the adoption of the official seal for the "CLE" program of the Association. Since then, the seal has graced various brochures for the Association's seminars and institutes.

THE ARKANSAS CRIMINAL CODE -€ffective January 1, 1976-

THE RULES OF CRIMINAL PROCEDURE

Read in Juris Dictum at page 25 Arkansas Attorney General Jim Guy Tucker's overview of the new Arkansas Criminal Code.

with The "CLE" seal is a circle with "CONTINUING LEGAL EDUCATION •••• ARKANSAS BAR ASSOCIATION" around the circumference and bound by three concentric circles - representing the Association, the Legal Education Committee, and the Legal Education Fund. The field has the letters "CLE" in the rounded format (like the sun) at the bottom with rays radiating upward from the "CLE" to the Latin expression "Hinc Lucem".

This expression, loosely interpreted, means "From this source, we receive light". The phrase, it is believed, most clearly expresses the purpose of the "CLE" program. The stars in the border add to the space concept, which in total indicates the modern age.

Mr. Justice Tom Clark 2O/Arkansas Lawyer/January 1976

15th ANNUAL NATURAL RESOURCES LAW INSTITUTE (Formerly Oil & Gas Institute)

'AWARENESS WORKSHOP" -TAX INSTITUTE FOR NON-TAX ORIENTED LAWYER~

FEBRUARY 25-28, 1976

MARCH 8-9, 1976

ARLINGTON HOTEL HOT SPRINGS, ARKANSAS

CAMELOT INN LITTLE ROCK

FOREWORD Consistent with the change in name from the Mineral Law Section to the Natural Resources Law Section of the Arkansas Bar Association is a change in the scope of the activities of the Section.

Accordingly, it seems appropriate that each succeeding Institute should increasingly diversify its offerings to the participants so that in the nottoo-distant future a balanced program involving petroleum, coal, water, forests, environmental and similar subjects will be available.

While the primary emphasis of this 15th Annual Institute remains on energy, it does seek to take an additional step in striving for the goal of diversification and accordingly the program is designed to afford an opportunity to those attending to be exposed to matters which most of us do not presently encounter in our day-to-day activities but which for a certainty we will encounter in the future.

We have been fortunate to line up as our speakers, five experts from other States, one from England, and two from Arkansas.

A bonus to all those who attend these annual Institutes is the opportunity to enjoy the many attractions of Hot Springs National Park and vicinity, with the highlight being the thoroughbred horse races held each afternoon at beautiful Oaklawn Jockey Club.

H.Y. Rowe Chairman Natural Resources Law Section

The Taxation, Trust and Estate Planning Section recently surveyed the Bar concerning the desirability of an "Awareness Workshop" aimed at inform ing the non-tax oriented practitioners on certain problem areas and additionally offering constructive drafting and/or planning techniques as to related issues. The survey results indicated an overwhelming need for such a tax institute.

Under the direction of Section Chairman Harvey L. Bell, a two-day seminar will cover TAXATION and DIVORCE, and REAL ESTATE TAXATION. 17 experts on tax law will participate as speakers and panelists.

p~oG

fl~tA

NUTSS BOLTS

INSTITUTE'â&#x20AC;˘

January 1976/Arkansas Lawyer/21

Cover StQrY- ...

ARKANSAS' SUNG HEROINEELSIJANE TRIMBLE ROY Arkansas has many unsung heroes and heroines in the legal profession, but this is certainly not the case with the newly appointed Associate Justice of the Arkansas Supreme Court, Elsijane Trimble Roy. At one time or another she has made the headlines of most Arkansas newspapers, many out-of-state and foreign newspapers, many magazines, and other publications.

Her attainments are so numerous that they fit every letter of the alphabet from A to Z, with some being overcrowded.

A-ASSOCIATE JUSTICE OF THE ARKANSAS SUPREME COURT, This is the most recent honor she has received, and another one of her firsts, She is the first woman to serve on the Arkansas Supreme Court, and the sixth to serve on any state supreme court bench.

ASSISTANT ATTORNEY GENERAL. Served under Attorney General Joe Purcell.

ALUMNI ASSOCIATION OF THE UNIVERSITY OF ARKANSAS. Served on the Board of Directors.

ASSOCIATED STUDENT GOVERNMENT, UNIVERSITY OF ARKANSAS. Served as Treasurer.

AM'ERICAN ASSOCIATION OF UNIVERSITY WOMEN. Served as President of the Blytheville Branch.

B--BAPTIST. Sunday school teacher and member in excellent standing.

BLACKFRIARS. (Dramatic organization, University of Arkansas.) Served as Treasurer.

BOARD OF PUBLICATIONS. Organization at the University of Arkansas responsible for publications such as the TRAVELLER (campus newspaper), and the RAZORBACK (year book). The organization was composed of faculty members and two students with Elsijane serving as one of the two students.

BLYTHEVILLE JUNIOR SERVICE AUXILIARY. Organizer and past Vice President.

BAR ASSOCIATIONS. Member of the Arkansas Bar Association, Blytheville Bar Association (past Secretary), Little Rock Association of Women Lawyers, now Arkansas Association of Women Lawyers, (past President), and the National Association of Women Lawyers.

C-CIRCUIT JUDGE. Sixth Judicial District (Pulaski and Perry Counties). Appointed by Governor Faubus to fill the vacancy created when Justice Guy Amsler was named to the Arkansas Supreme Court. First woman circuit judge in Arkansas.'; CONSTITUTIONAL REVISION COMMISSION. Member.

22/Arkansas Lawyer/January 1976

\

CHI OMEGA SORORITY. Past Vice-President and Treasurer. Received the Award of Merit as the most outstanding member in 1938.

COMMITTEEWOMAN. Democratic Party for the 16th Judicial District.

D-DEMOCRATIC STATE COMMITTEE. Vice Chairman for four years.

DELTA THETA PHI LAW FRATERNITY. First woman to become an honorary member of the John L. McClellan Senate.

DAUGHTER. Elsijane is the daughter of Judge and Mrs. Thomas C. Trimble. Her late father was U.S. District Judge for the Eastern District of Arkansas from 1937 to 1956, and Chief Judge from 1948. Her Mother still lives in Lonoke.

E-ELSIJANE TRIMBLE ROY INCORPORATED. She is an institution all by herself.

F-FEMALE. She is a fine representative of the female sex - one who does not always feel compelled. in the women's lib manner, to constantly assert quality.

FIRSTS. This is a repeat, but to collect her outstanding firsts in one place: First woman to serve as Circuit Judge in Arkansas. First woman to be an honorary member of the John L. McClellan Senate of Delta Theta Phi Law Fraternity. First woman to serve as an Associate Justice of the Arkansas Supreme Court.

G-GRANDDAUGHTER. Elsijane is the granddaughter of state Circuit Court Judge Thomas C. Trimble, who prior to serving as judge, was the senior member of the finm of Trimble & Robinson (Senator Joe T.) in Lonoke.

GRANDMOTHER. On March 1, 1975 she became the prOUd grandmother of Allyson Jane (after Elsijane) Roy.

r

Ark.n... Chief Julllice C.rleIon H.rr1. admlnl8lar. the oath

H-HIGH SCHOOL BASKETBALL. Captain for two years of Lonoke's championship girl's team. ~INDUSTRIOUS and full of INITIATIVE. J---.J.D. DEGREE. University of Arkansas School of Law 1939.

JUNIOR FEDERATED CLUB WOMEN. Past State President.

K-KUDOS COLLECTOR. (From the Greek word for glory, renown, praise, approval.) She is a member of the Kudos Collectors, having collected the praises and approval of many as evidenced by the numerous citations, certificates and mementos she has received recognizing her abilities and expressing appreciation for her services.

L-LAW CLERK. Has served as Law Clerk to Justices Frank Holt and Lyle Brown of the Arkansas Supreme Court, and Senior Law Clerk to Judges Gordon Young and Paul X. Williams of the Federal District Courts.

LONOKE NATIVE. Born in Lonoke, Arkansas on April 2, 1916, the daughter of Mr. and Mrs. Thomas C. Trimble.

LITTLE ROCK ASSOCIATION OF WOMEN LAWYERS. Served as President.

M-MOTHER. Elsijane is the mother of one son, James M. Roy, Jr., of whom she is justly proud. He received his B.S.B.A. in 1968 and his J.D. in 1971 from the University of Arkansas, is a CPA, and is now in private practice with the firm of Couch, Blair, Cypert and Waters in Springdale. He is married to Bertha Dean Dorman and they have one daughter, Allyson Jane Roy. MEDICAL ADVISORY COMMITTEE FOR THE UNIVERSITY OF ARKANSAS MEDICAL CENTER. Past member.

MORTAR BOARD. An honor society for senior women based on student leadership, scholarship and service.

N-NATIONAL ASSOCIATION OF WOMEN LAWYERS. Member.

O-OFFICE OF PRICE ADMINISTRATION. Chief Price Attorney.

P-PEO. Cultural, educational and service organization, Past President, Chapter 0, Blytheville, Arkansas.

PRIVATE PRACTICE. Practicing attorney in Lonoke, Little Rock, and Blytheville.

1939---Law firm of W. W. McCrary, Jr., Lonoke, successors to the earlier firm of Trimble, Robinson & Trimble.

1940-Became associated with the firm of Rose, Loughborough, Dobyns & House, Little Rock.

1945-Associate Attorney with Reid, Evrard & Roy, Blytheville.

1954-Roy & Roy, Blytheville.

Q-QUALIFIED. You bet.

R-REVENUE DEPARTMENT. Was Director of IncomeInheritance Tax Division of the State Revenue Department. ~SISTER. Of Walls Trimble of the firm of Bailey, Trimble & Holt; and the late Thomas C. Trimble, Jr. of the firm of House, Holmes & Jewell. Both of her brothers graduated from the University of Arkansas School of Law and took great pride in their older sister's legal accomplishments. She is also a sister of Susan T. Measel (Mrs. Marshall) of Birmingham, Alabama who until recently was a practicing architect; and Mollie T. Verser (Mrs. Earl) of Eudora, Arkansas.

T-TENNIS CHAMPION. Both singles and mixed doubles in college.

U-UNIVERSITY OF ARKANSAS. Received her A.B. and J.D. degrees. Was the only woman in the law school class of 1939 and the third woman to receive a law degree from the University of Arkansas. continued on paga 24

A_II L. _ . , III, pr.ld.nt, S....8I1.n County B.r A..ocl.llon, look. on •• Ju.lle. Roy trl•• on her robe - the gltt ot the SCBA. January 1976/Arkansas Lawyer/23

I

EXECUTIVE COUNCIL NOTES

by James M. Moody Secretary-Treasurer

At its regularly scheduled meeting in Little Rock on September 13.

1975, the Executive Council was primarily involved with hearing committee reports and acting on specific requests by committee chairmen.

President Compton appointed Joe Woodward, Robert Hays Williams, Randall Ishmael and Robert Ross to contact delinquent bar members in their respective districts.

A petition was filed with the Arkansas Supreme Court requesting adoption of the "Chicago Amendments" to the code of professionai responsibility. The amendments had been approved by the Executive Council at an earlier meeting.

The "Chicago Amendments", among other things, permit participation in a plan for prepaid legal serviees. Dick Hatfield is chairman of an Association committee which is studying the feasibility of such a plan and will present a detailed r& port to the Association at the House of Delegates meeting in June, 1976.

Jack Deacon reported on the progress of the Uniform Eminent

Domain Code and, on his recommendation, a special committee will be appointed to study the proposed Code and make specific recommendations to the House of Delegates and to the legislature.

The president appointed a committee of four representing the Bar Foundation, the law school, the Library Comm ission and the Executive Council to consider changing the name of the Arkansas Bar Center to Arkansas Law Center to better identify the law school as part of the complex.

Another committee consisting of Robert Hays Williams, Jack Davis and Boyce Love was appointed to establish house ru les for the center.

Col. Ransick reported on the transition from a county to a statewide lawyer referral service and the favorable reaction which it is receiving.

The Council authorized the use of a yellow page advertisement for the service and authorized municipal judges and prosecuting attorneys to participate.

Cover Story .. . Juotlce Roy,

continued from page 23

V-VICTORIOUS. In many endeavors over the obstacles which beset the pathway of one determined to succeed.

W-WHO'S WHO IN AMERICAN UNIVERSITY WOMEN. 1938 and 1939. WHO'S WHO IN AMERICAN WOMEN. X-X indicates one's choice on a ballot, and Elsijane is many folks' choice on any ballot.

X indicates the treasure - Elsijane is one who is prized highly.

X is the unknown quality. Elsijane has always been willing to face the shadowy ghosts of doubt and indecision with strong determination and a confident heart.

Y-YOUNG DEMOCRATS. Active for many years in the Young Democrats organization.

YOYO CHAMPION. Even as a youngster Elsijane 24/Arkansas Lawyer/January 1976

The Young Lawyer's Section has implemented a plan for furnishing legal assistance to Vietnam refugees in residence at Camp Chaffee. This program, in three phases, consists of: (a) an orientation program; (b) a lawyer referral system and; (c) legal education to assist those who already have some legal background.

The Council approved an excursion sponsored by INTRAV to the South Pacific beginning March 17 and a trip to Central Europe next summer.

The House of Delegates met in Fayetteville on October 18 with the principal item of business being approval of the Uniform Rules of Evidence for consideration by the legislature.

The next meeting of the Executive Council has been scheduled for Little Rock on December 13.

Membership of the Association continues to increase with member-

ship of 1,868 on September 11, 1975 compared to 1,676 on September 11, 1974. J-....

was establishing herself as a champion. When the local drugstore had a contest to determine the outstanding boy champion at performing with the yoyo, Elsijane won first prize for the girls which was $5.00 worth of ice cream cones. She didn't eat them all at once, but she tried.

Z-ZENITH WORKER, ZENITH ACCOMPLISHER. It takes a lot of hard work, in addition to ability, to get to the top, and Elsijane has put in more than her share of hard work, which combined with her great ability, has resulted in her many accomplishments.

It is notable that she is the first woman to sit on the Arkansas Supreme Court bench, but with her background, and outstanding ability, it is almost irrelevant that she is a woman. She is an accomplished jurist and will grace the bench with dignity and wisdom.

She will be a Justice for all (not just for women), and one equal to the burdens she will be called upon to bear.

Arkansas is indeed fortunate to have such a first on its Supreme Court. !I--

----

JURIS DICTUM

by C. R. Huie Executive Secretary, Judicial Department

\1

The State-Federal JudicIal Council of Arkansas, one of many councils created by order of the Supreme Courts of the various states at the request of Chief Justice Warren Burger of the United States Supreme Court, exists for the purpose of establishing lines of communications and rapport between the Federal and State Judiciaries. In Arkansas It Is composed of the resident Judge of the U.S. Circuit Court of Appeals, and the Chief Judges of the U.S. District Courts.

Chairman Is the Chief Justice of the Arkansas Supreme Court and other state members are two Supreme Court Justices, the Attorney General, and 5 CircuIt Judges.

At Its meeting on Friday October 17, 1975, the program consisted of an address by Attorney General Jim Guy Tucker on the new substantive Criminal Code enacted as Act 280 of 1975 and which becomes effective on January 1, 1976. At the close of his address the speaker conducted a question and answer period In which he was assisted by his Deputy, Frank Newell, who had also acted as staff director of the Criminal Code Revision Commission.

The address was so well received by the members of the Council that its Inclusion in this column Is considered worthy of circulation to the Bar generally. In view of the coverage of the Arkansas Bar AssociatIon's Midyear Meeting, January 22-24. 1976, Mr. Tucker's talk Is most appropriate for publicatIon at this time. Attorney General Tucker's address follows: THE ARKANSAS CRIMINAL CODE I'm here today more to renew an old acquaintance between the judiciary and

the Ar1<ansas Criminal Code than to introduce you to this document. since the judiciary played a significant role in de路 veloping the concept of criminal code

revision and the making the concept a reality.

As I'm sure most of you are aware, the

story of the Code begins in 1971 when a twenty-member Criminal Code Revision Commission was formed under the joint

sponsorship of Chief Justice Harris and

then Attorney General Ray Thornton.

Let me describe very briefly the formation of this Commission and how it went about its work. The composition of

the Commission was carefUlly considered by the Chief Justice and the Attorney General in order to insure proper representation of all groups, professions, institutions and geographical areas.

Commission members included an Associate Justice of the State Supreme Court, a Sheritt, a Municipal JUdge, two Circuit Judges, a Chancellor, three former Prosecuting Attorneys, a State Senator, a State Representative, two law professors and several attorneys skilled in the practice of criminal law. The Commission was divided into two committees, one assigned the task of revisi ng the procedu ral law, and the other charged with the dUty of revising and recodifying the substantive law. After proposed official drafts had been completed, each committee switched sides. so to speak, to review the work of the other group.

Although no one thought the job was going to be an easy one, I don't think anyone involved really foresaw the magnitude of the job undertaken, and I look back now with amazement at how much was accomplished. It would be difficult for me to overestimate the amount of time and energy that went into the drafting of the Code, much less the sacrifices made by commission members and the staff. Our best approximation indicates that twenty thousand manhours were spent in the process of researching, drafting, reviewing, redrafting with the view to giving this state the most effective set of criminal laws in the country. Although the General Assembly and the federal law enforcement Assistance administration were generous in providing funding to defer expenses for travel and lodging, I'd like to emphasize that the twenty thousand man hours were donaled, At the outset, I should make it clear that it is the Substantive Criminal Code, enacted as Act 280 of 1975 about which I'll be talking today. As you know, the Comm ission has also completed work on a revision of the procedural law. The

proposed new rules of Criminal Procedure have been submitted to the Arkansas Supreme Court for promulgation.

The proposed new rules treat subjects such as (1) arrest, citation, summons, and pre-trial release procedures; (2) Discovery; (3) Joinder and Severance; (4) pleas of guilty and Nolo Contendere; (5) Speedy Trial; (6) Trial by Jury; and (7) Appellate procedure. Of these rules, I think it appropriate to say now only that their formulation proceeded according to the same policy guidelines I will mention in connection with the Criminal Code.

Before I go on to discuss the plan and scope of the code, as well as a number of its specific provisions, let me here make some comments of a general nature with respect to the effect of the new code on present statutory and decisional authority and in addition, acquaint you with certain policy guidelines and objectives adopted by the Commission. The code does not supplant all existing criminal law or prescribe for all time what constitutes criminal conduct. The Code will, of course, supersede a great number of existing criminal statutes.

However, it has been very carefu lIy framed so as to permit it to co-exist with continued on page 26

JIm Our TueI<<< January 1976/Arkansas Lawyer!25

Jurla Dictum, continued from paga 25 prior law and subsequently enacted statutes aimed at special problems that are not the proper subject of a Code coming to grips only with broad general concerns. In short. the only existing criminal statutes that will be repealed are (1) those inconsistent with the Code; (2) those rendered unnecessary by the Code; and (3) those which are outdated and should be repealed even in the absence of conflicting code provisions.

In approaching its task, the Commission established a number of objectives, the most important of which were (1) clarifIcation and simplification of the fundamental principles of having to do with the mental states required as a basis for criminal liability; (2) codification in statutory form of legal principles now provided solely or chiefly by case law - for example, justification as a defense to a criminal charge; and imposition of criminal liability for attempts to commit crimes; (3) coherent organization of provisions defining crimes; (4) elimination of overlapping and prolix definitions of offenses; (5) replacement of antiquated, ambiguous language with clearly defined contemporary terminology; and (6) development of a rational, equitable plan for grading offenses, and of fair, effective sentencing procedures.

A primary concern of the Commission was simplification of the law and, in the process, making everyone's job a little easier while adding certainty to the administration of criminal justice. To the extent the Commission succeeded, the judge's job is made easier, especially insofar as the guidance provided by clear statutory language is less likely to produce erroneous rulings and jury instructions than that afforded by the inevitable ambiguities of case law.

I will elaborate on these objectives and have more to say about how some of them were implemented later on. Now, however, I would like to turn to a discussion of the plan and scope of the Code. First let me point out that the mere fact that I speak of organization is indicative of one of the Code's most important achievements - a rational system of structuring. Presently the organization of Title 41 of the Arkansas Statutes Annotated defies rational explanation. Crimes are arranged alphabetically regardless of whether they happen to be related in any way. This almost inevitably generates confusion, redundancy, and inconsistency, not to mention inefficiency and inconvenience on the part of jUdge or lawyer. The Code, on the other hand, arranges offenses in a logical sequence that groups together those crimes treating the same general subject. For example, Article V deals with offenses against the person: mur26/Arkansas Lawyer/January 1976

der, manslaughter, assault, battery, kidnapping, and rape. Article VI deals with offenses against property: arson, burglary, theft, forgery and other fraud offenses. The organization of the chapters within each article is likewise analytical, not alphabetical.

The Code Is divided Into three main parts, Articles I and II comprise the first part, which contains provisions having across the board applicability, if you will. They deal with the fundamental general principles governing criminal liability and apply irrespective of the particular crime involved. Among the concepts treated are those of territorial applicability; limitations; former jeopardy, definitions of the different kinds of offenses (felonies, misdemenaors, and violations); the mental elements of cupability; causality; complicity; criminal liability of corporations and other organization; defenses that negate mens Rea or the moral basis for Iiabilityj justification for otherwise criminal conduct; and the exCUlpatory effects of mental illness or defect, or youth. Additionally, these introductory articles exhaustively treat the concept of liability for inchoate crimes.

You will remember that when I described policy objectives, I first mentioned the Commission's goal of clearly defining the mental states used In defining crimes. This need is apparent from even the most cursory examination of present law, which is, to say the least, chaotic in this regard. Existing statutes use a perplexing variety of terms to describe the mental states necessary to establish commission of an offense.

Examples of such terms are "willful", "wanton", "cruel", "maliciOUSly", "contemptUOUSly", and "fraudUlently". The confusion is further aggravated by the fact that only one of these terms is statutorily defined. As a consequence, the cases seem to indicate that the meanings of the terms vary from case to case.

Accordingly, following the lead of the model penal code and recent revision efforts in other states, the new Code opts for simplicity and certainty by reducing the number of culpable mental states to four, all of which are clearly defined.

You will also recall that in discussing the Commission's policy objectives, I referred to the goal of codification of common law principles. The Commission's research disclosed that many important areas of the criminal law were treated inadequately or not at all by statutory authority. For example, it is now extremely difficult to prosecute the person who tries but fails, to commit an offense.

There is no statute punishing attempts.

Statutes creating liability for assaults offer a partial solution to this problem, but one that is unsatisfactory since this ap-

proach will not work to get at attempts to commit offenses which are not themselves assaultive. For instance, one may successfUlly punish attempted murders by defining, as an offense, assault with intent to kill and prosecuting persons who attempt unsuccessful homicides under this statute. However, this approach manifestly cannot be stretched to reach offenses such as bribery or forgery, which do not involve physical violence. Likewise, there is no criminal solicitation statute, and the existing conspiracy statute is archaic and unworkable. As I mentioned before, statutory coverage is fragmentary as to defense of justification - in particular the degree of physical force an individual may use to defend himself and his property. The Code solves - or at least deals - with all these problems devoting a chapter to each.

The second major part of the Code Is Article III, which provides for disposition of olfenders, Article III covers punishment for Code offenses, existing crimes defined by statutes outside the Code, and offenses to be enacted by future legislatures. Article III is a mixture of the old and the new, retaining time-proven disposition alternatives while providing the Courts with new alternatives and precise guidelines for dealing with persons found guilty of crimes.

Initially, in conjunction with Article I, It grades offenses. This systematic classification of offenses was recommended by the American Law Institute and the American Bar Association Project on Minimum Standards for Criminal Justice, and is. I feel, one of the major accomplishments of the Code. Adoption of the classification scheme represents a significant departure from the traditional legislative technique of prescribing a penalty in the statute defining the offense. Existing statutes contain penal provisions adopted at different times by different legislatures, often without considering the penalties for related offenses. The practice of settIng a dIfferent penalty for each offense has resulted in many instances in comparable criminal conduct being punished quite differently. By limiting the punishment for commission of a felony to four possible ranges, while at the same time reviewing existing punishment provisions, the Commission hopefully has created a more thorough, simple, and consistent body of criminal law.

This Article - and particularly those provisions as to probation and suspension of sentence - should be of particular interest to the judges, since many of its provisions will influence the day-today operation of your courts. As under present law, under the Code where a

,

case proceeds to trial the jury will both determine guilt or innocence and im· pose sentence, although there is a provision that allows the jUdge to impose sentence after trial if all parties have agreed to this beforehand.

As is presently the case, where a guilty plea is entered, the trial court can impose fines or sentences to imprisonment under Chapters 11 and 9 respectively. Additionally, the Court may place an individual on probation or suspension under Chapter 12 under which these modes of disposition are available to all except habitual offenders or capital felons. Although the familiar term "probation" and "suspension" are used, they are given new meanings by the Code. "Suspension" or to "suspend imposition of sentence" means a procedure whereby a defendant who pleads or is found guilty of an offense is released by the Court without pronouncement if sentence and without supervision. "Probation" or "to place on probation" means a procedure whereby a defendant who pleads or is found guilty is released by the Court without pronouncement of sentence but sUbject to the supervision of a probation officer.

Under Gode suspension and probation procedures, the Court does not, as is commonly the case now, first enter a judgment of conviction and impose sentence, and then suspend execution of sentence. Under the Code where the Court determines that suspension or probation is appropriate, no judgment of conviction is entered of record and no pronouncement of sentence is required, unless the Court feels that the defendant deserves a criminal record. In the latter case the Court can (1) fine the defendant and suspend imposition of the sentence of imprisonment, or (2) sentence the defendant to a term of imprisonment and suspend imposition of sentence to an additional term. Thus, a defendant is branded with a permanent criminal rec· ord only where the judge actually fines or incarcerates him. In all other cases, where the Court feels that a guilty individual deserves a break, the Court merely enters an Order suspending sentence or, if supervision is desired, probating the defendant. If the defendant complies with the conditions of suspen· sion or probation, the Court discharges him and dismisses all proceedings against him. The advantage of this approach is that it gives the defendant who deserves a second chance a bonafide opportunity to redeem himself, since it rewards successful completion of a sus· pension or probationary period with dismissal of all charges and a clean record.

Although the Code does define the term "probation officer" and is drafted so as to be consistent with current law governing the appointment and salaries

of probation officers as well as their duties, because of financial and other reasons many districts within the state are able to conduct only a marginal probational program if any at all. What results is often this. A person charged with a crime appears before a judge and enters a plea of guilty. After sternly admonishing the defendant for his past conduct and impressing upon him the necessity of good conduct in the future, the Court sentences the defendant to a term of imprisonment but suspends the execution of the sentence and places the defendant on probation. However, because of lack of probationary personnel or because probation officers are overworked, all the defendant is really given is the opportunity to return to the environment that contributed to his first criminal episode. So, after a brief amount of time, it is not unlikely that the Court will find the same defendant before him again on the same charge or a similar one. At this point. assuming the defendant is convicted of the second charge, it is very likely that the Court will not only impose a prison sentence for the second charge. but will also revoke the suspended sentence given to the defendant the first time around and stack the sentences. And, of course, the real hook in this revocation and additional procedure is that the defendant can't appeal from the Imposition of imprisonment resulting from his revoked suspended sentence, since time for appeal has long passed. As a result, many suspended sentences and probationary periods far from being chances for a new start in life, are in fact, traps for the unwary. I wish I could tell you that the Code has provided answers to the problem I've just outlined. Unfortunately, however, the only real solution to this problem is adequate financial support of probationary procedures established by existing law and imprOVed upon by the Code.

Before passing to a discussion of the third major part of the Code, let me point out that the Code comes to the assistance of the trial judge as no existing statutory authority does by establishing detailed criteria for using the probation and suspension system. In addition, the Code not only seeks to assist the Court in determining when suspension or probation Is appropriate, but it goes on to provide specific conditions that the trial judge can require the defendant to submit to. As a result, a judge need no longer have lingering doubts about the propriety either of placing a convicted defendant on probation in the first place or about whether a condition of suspension or probation Is lawful. Other innovativa features of Chapter 12 permit judges to impose split periods of confinement - e.g., incarceration over weekends, in

a local detention facility as part of the suspension or probation process. Additionally, the Chapter allows persons convicted of felonies to be incarcerated for short periods of time in local facilities rather than the state penitentiary in order to carry out a split-time plan.

The third part 01 the Code, and pa'hapl Itl heart, II 01 cou,.., the part that dalln.. c,lm...

As I indicated before, these are arranged analytically rather than alphabetically or otherwise haphazardly, I will not attempt an exhaustive discussion of each provision of fNery provision of every Article, but I would like to proceed through the Articles pointing out such things of interest as where present law has been changed.

The first of the Articles defining crimes is Article V having to do with offenses against persons. At the outset it is important to note that the crime of Capital murder - homicide for which the death penalty may be inflicted - has been retained virtually as passed by the 1973 General Assembly. This is in keeping with the Revision Commission's policy that, absent compelling reasons for change, deference should be given to the most recent enactments of the legislature. The somewhat elaborate sentencing procedures suggested by the United States Supreme Court decision in Fur· man v. Georgia have likewise been In· corporated into the Code.

In the area of sexual offenses, several changes have been made. First, the old offense of carnal abuse has been revived and refined by the Code into a crime having three degrees. These offenses, in conjunction with the newly created offenses of sexual abuse in the first and second degree, comprehensively cover conduct either falling short of rape or of a sexual nature but not Intended to culminate in rape.

Second, in order to avoid even the possibility of equal protection problems, rape and other sexual offenses have been defined SO as to contain no reference as to the sex of the victim or the perpetrator. Consequently, a female might be the proper subject of a rape prosecution under extraordinary circumstances. I might point out here that a woman has been Imprisoned in Arkansas for rape before. She was, I believe, convicted as an accom plice to rape for an offense committed by her boyfriend upon her daughter. The minimum penalty for rape has been reduced from 30 to 5 years. This is not to discount the seriousness of the crime. Instead it re· f1ects recognition that the old 30 years minimum sentence presented a formldcontinued on page 28 January 1976/Arkansas Lawyer/27

Juri. Dictum,

continued from page 'ZT able - and sometimes insuperable obstacle to prosecution.

Article VI takes up offenses against property. Chapter 19 - arson and related offenses defines several new offenses. For example, In 41-1906 and 1907 (criminal mischief in the first and second degrees) Arkansas finally has statutory authority that can be brought to bear against destructive conduct that can now be prosecuted only as common law malicious mischief.

The crime of robbery has been completely revamped along lines suggested by almost all new Codes. Danger to the victim, not the taking of property, is the gist of the new offense. Accordingly, the offense is defined in terms of employing or threatening to immediately employ physical force for the purpose of committing theft. Whether or not the thief succeeds in extracting peoperty from his victim is immaterial. Present law also fails to distinguish between the pursesnatcher and one who robs a liquor store with a machine gun or sawed-off shotgun. The Code remedies this by making armed robbery a Class A felony, punishable on the same level as rape or first degree murder.

Chapter 22 - Thell- contain. some of the major reform. of the Code.

Nowhere did the Commission have more success with its efforts to replace numerous, overlapping crimes with single offenses of comprehensive scope than in Chapter 22, where some 40 separate sections aimed at thefts of every conceivable variety have been re· placed by 8 provisions covering the whole field. The Chapter consolidates all theft offenses by merging all crimes in· volving wrongful acquisition of property or service into a single all-inclusive offense called simply "theft". An important' procedural consequence flows from this consolidation. Under the Code, an information need only charge a defendant with theft and go on to specify sufficient information to apprise the defendant of the criminal conduct alleged. In other words, the state need not commit itself at the outset to a single theory as to which of several types of theft offenses has been committed, for example, whether larceny or embezzlement has been committed. Likewise a defendant cannot escape conviction of one offense by proving that he is actually guilty of committing another.

Article VIII - offenses against public administration - begins with Chapter 26 having to do with offenses relating to jUdicial proceedings. The first sections on perjury slightly alter the thrust of the offense by prohibiting only false m8'.rI81 28/Arkansas Lawyer/January 1976

statements. Convictions based on inconsistent statements are made easier by abolishing the present requirement that at least one of the inconsistent statements be proved false. Additionally, the Code adds an entirely new provision to encourage recantation of false testimony. Called "retraction", it permits one who has committed perjury to avoid liability by retracting his untrue testimony before the trier of fact has been influenced by it. Other provisions of Chapter 26 prohibit bribery or intimidation of jurors, witnesses or judges.

Other Chapter.

The next Chapter in Article VIII is entitled Corrupt Influence. This chapter defines such offenses as Trading in Public Office, Public servant Bribery, and Soliciting Unlawful Compensation. Of particular note is the lalter section which punishes not only the public servant who accepts a prohibited benefiL but also one who solicits or agrees to accept such a benefit. Under present law, Art<. Stat. Ann. 541-901 (Rep!. 1964), a public servant must actually receive a prohibited benefit before liability accrues.

The last of the three chapters comprising Article VIII is Chapter 28, Obstructing Governmental Operations. Among other things, this chapter provides Arkansas with a statute explicitly defining the offense of resisting arrest and, additionally, contains a number of new offenses such as Hindering Apprehension or Prosecution, Aiding Consumation of Offense, and Compounding. Perhaps the most noteworthy aspect of this Chapter is its treatment of escapes. The crime is graded in three degrees according to (1) whether force is used, (2) whether the escape is from a correctional facility, and (3) the seriousness of the offense that led to confinement In the first instance.

Article IX, entitled Offenses Against Public Order, is the last of the Code articles and contains three chapters. The first, Chapter 29, deals with Riot and related offenses involving disorderly conduct. Chapter 30, punishing Prostitution and related behavior, for the most part carries forward present law but does SO in a form characterized by clarity and more rational treatment of offenders.

Like the preceding chapter, Chapter 31 (Firearms. Weapons and Related Offenses) carries forward existing law to a great extent. There are some innovative features of the chapter, however. Among these are a statute prohibiting the possession of any instrument of crime; a statute prohibiting the possession of a firearm by a felon, mental defective, or a person who has been committed to a mental institution: and provisions pro-

hibiting defacing a firearm or possessing a defaced firearm. Additionally, there is a section allowing law enforcement officers to disarm, without arresting, minors or mentally defective persons found to be in possession of deadly weapons.

A. a co-sponsor of the Comml..lon

for over two year., let me again e.pre•• my gratitude to the Comml••lon member•.

Their devotion to the task of improving the Arkansas criminal justice system really surpassed anything that could reasonably have been expected. I am of course also enormously gratified by the reception given the Code by the 1975 General Assembly - not to mention the invaluable financial support provided by the Legislature in 1973 - and, in particular, by the support and encouragement of a number of individual legislators who after stUdying the lengthy bill went to bat for it In closing, I would like to repeat an oftquoted portion of an article by Professor Wechsler, Chief Reporter for the Model Penal Code: "Whatever views one holds about the penal law, no one will question its importance in society. This is the law on which men place their ultimate reliance for protection against all the deepest injuries that human conduct can inflict on individuals and institutions. By the same token, penal law governs the strongest force that we permit official agencies to bring to bear on individuals. Its promise as an instrument of safety is matched only by its power to destroy. If penal law is weak or ineffective, basic human interests are in jeopardy. If it is harsh or arbitrary in its impact, it works a gross injustice on those caught within its toils.

The law that carries such responsibilities should surely be as rational and just as law can be. Nowhere in the entire legal field is more at Slake for the community or for the individual."

I feel that the Gode has struck the required balance, and I look forward to observing its beneficial effects on the administration of criminal justice in Arkansas in the years to come. ~

,

LmERHEADS

,

I \

RECOGNITION AND REGULATION FOR SPECIALIZATION IN ARKANSAS INTROOUCTION

The "Specialization StUdy Committee" of the Arkansas Bar Association was reestablished in 1975 concluding an inactive status of approximately four years. This revitalization was prompted by the growing interest in this facet of the legal profession and particu larly with reference to those Arkansas attorneys who practice adjacent to the ArkansasTexas border since the latter state has formally adopted a specialization plan.

It is the goal of our committee to at>tain and familiarize ourselves with all as-

pects of the concept of specialization, disseminate this information to and receive responses from the practicing Bar, selected Bar Association committees and to make a recommendation at the

annual meeting to be held in June, 1976.

Specialization is here! There are and

have been members of the Bar who specialize in particu lar areas of the law

specialization plan whereby a practicing lawyer may designate that he is in the "registered general practice" and three of certain selected specialties. This plan was approved by the Florida Supreme Court in June of 1975. A coordinating committee is appointed by the President of the Florida Bar Association to administer the plan. The basic requirement under the plan is that a lawyer must have been engaged in practice for at least three years and in those three years have had substantial experience in each area of practice for which he desires a

specialization category. Specialized post graduate education may be sut>stituted for the practice requirement Another interesting proposal in the area of specialization is that now being considered by the Court of Appeals for the Second Circuit whereby on a prospective basis an applicant for a license to practice before a United States District Court and a Court of Appeals will

such as taxation, family, criminal, labor,

be required to submit an application in-

etc. Law firms are increasingly dividing various specialty domains of the law practice among members of the firm.

dicating, among other things, that he has successfully completed a course of stUdy in Evidence, Civil Procedure, including federai jurisdiction, practice and

Continued movement in this direction is inevitable.

Therefore, the real question is whether specialization in Arkansas should be recognized formally, and, if so, what regUlations, if any, should be estat>lished or imposed. It is the purpose of this article to briefly describe what other state bar associations have done and are presently doing, what issues are in-

volVed, existing regUlated and recognized plans and arguments for and against specialization.

Each member at the committee has contributed to this article and we would challenge you to read and discuss the issues and arguments with your fellow lawyers and endeavor to reach your own conclusions as to where Arkansas

should stand on the recognition or regulation of specialization.

WHAT OTHER STATE BAR ASSOCIATIONS HAVE DONE AND ARE PRESENTLY DOING AND THE ISSUES INVOLVED

At the current time, there are approximately 40 states with committees considering the question of specialization for lawyers. The majority of these committees are Bar Association endea-

vors. In another portion of this article, the rules regarding specialization that are now in effect in New Mexico and California are discussed in depth.

The State of Florida has adopted a

procedure, Criminal Law and Procedure,

Professionai Responsibility and Trial Advocacy. Further, the Applicant must have assisted in the preparation and have attended at least four proceedings, either criminal or civil, in which testimony was taken on the merits of a dis-

puted issue. Two of the proceedings must have been in a Federal Court. The proposed plan would be administered by a commitlee on admissions selected by the Chief JUdge of the District Court and would include three members who are either active Judges or members of the District Court Bar. In a state with a rural economy such as Arkansas, one of the first questions to be answered is whether there is a need for specialization when a lawyer in the rural areas is expected to be competent

in any matter which is presented to him by a client. Would specialization in and of itself by denied to any lawyer in the small towns because of his inability to specialize in any particu lar area or areas

of the law? A possible solution to this problem would be the use of different standards for metropolitan and rural areas. However, this could result in practitioners from rural areas being granted

specialization privileges when they are less leamed in a particu lar area of the law than their fellow counsel who happen to practice in a metropolitan area.

Initially, the goveming bOdy of any continued on page 30 January 1976/Arkansas Lawyerl29

Specialization, continued rrom paga 29 specialization plan must determine what fields of specialization are to be permitted and the method by which an attorney would be allowed to identify his own area of specialization. One problem inherent in specialization is the selection of who is to do the evaluating of the applicant lor a speciallield 01 law, the criteria for such evaluation and the requirement for continuing specialization with possibly a recertification process at the end of some specific period of time. In other words, should the specialized attorney be required to attend seminars providing legal education on his particular specialization, which would be sufficient for him to continue as a specialist, or, should there be a reexamination from time to time.

Undoubtedly, in Arkansas there has to be a role for the general practitioner because of the rural nature of the state. In such event, a referral system must be considered for references between the general practitioner and the specialist.

Currently, a referral system is generally understood to mean that an attorney re路 ferring a matter to another attorney may be paid a referral fee usually gauged by the amount of fee received by the recipient of the referral. Obviously, this system would have to be modified since a specialist who writes a will for a referred client would expect his usual fee and may have difficulty increasing that fee in order to be able to pay some sum of money to the referring attorney. All attorneys are aware of the recent criticism 01 the Bar in general and it would appear that a referral fee system between generalist and specialist could only increase the questions in the pUblic's minds about the legal profession.

The three states with specialization plans all permit some form of advertising by the specialist. The permitted means of advertising normally include listing in the telephone directory, on business cards, on stationery and like forms of identification. The question of advertising is now a critical issue within the entire legal profession and does not necessarily relate to the specialization problem.

Specialization has generally been considered as relating only to the individual attorney, without a firm as a whole being allowed to hold itself out as being specialized in a partiCUlar area. This should not be a particular concern in Arkansas, since our law firms of necessity generally will have several attorneys who restrict their areas of practice to different subjects in order to afford a client the broadest spectrum of legal advice.

One of the most important issues involved with specialization is the standards to be adopted as between the American Bar Association and the

3O/Arkansas Lawyer/January 1976

various state bar associations. The states now have in some form or the other a method 01 reciprocity by which a lawyer may become licensed if he changes his residence. Should each state adopt the same specialization procedure so that reciprocity would grant specialization in the event a lawyer began a specialized practice in a new state.

EXISTING RECOGNIZED AND REGULATED SPECIALIZATION PLANS There are two experimental or "pilot" plans for specialization that constitute the foundation upon which all other programs are based. The California plan provides for the certification of specialists in three areas of the law: criminal law, workmen's compensation, and taxation. The plan concerns itself with qualitative and quantitative tests to determine the expertise of persons seeking certification. The end result of the certification procedures is that the California Bar Association certifies that a practicing attorney is a specialist in one of the given areas of the law. This idea of "certification" to the public is absent in the New Mexico plan of specialization, which is the other end of the pilot program spectrum. Under the New Mexico plan, the individual attorney is allowed to publicize and advertise under controlled conditions his desire to limit practice to certain fields, or to primarily limit his practice to certain fields, or to specialize in certain areas of the law. There are no qualitative tests such as written examinations, but there are quantitative conditions which must be met.

The basic characteristics of the California plan are set forth below: 1. Attorneys are not required to seek or obtain certification, but may do so on a completely voluntary basis.

2. When a client is referred by one attorney to a certified specialist, the specialist "shall not take advantage of his position to enlarge the scope of his representation." The certified specialist is also prohibited from representing the Client on other matters without first notifying the client's lawyer who made the referral.

3. Advertising of certification of specialization is limited to (a) a listing in the classified section of a telephone directory; (b) a listing in a legal directory or law list; and (c) a brief dignified notice to be circulated among lawyers only to indicate that the attorney is rendering a specialized legal service.

4. Any lawyer, alone or in association with any other lawyer, has the right to practice in any field of law, even though he may not be certified as a specialist in that area of the law. Likewise, an attorney who is certified in a particular field of law has the right to practice in all

fields of the law.

5. Attorneys may be certified in more than one field of specialization provided the individual standards are met. In reality, attorneys are limited to specialization for each 01 the three specialty areas. An attorney must maintain substantial inyolvement in the specialty field which is measured by a percentage of practice requirement. These requirements are 33 1/3% for workmen's compensation, 33 1/3% for criminal law and 50% for taxation law.

6. Certification as a specialist is an individual privilege bearing associated individual responsibilities. The certification is solely individual in nature and may not be attributed to or fulfilled by a law firm or association of attorneys.

7. The California rules of professional conduct effective January 1,1975, permit the publication in a law list or legal directory of a statement that an individual or law firm's practice is limited to one or more fields of law. This right is granted to individual lawyers whether or not they are certified as specialists in the field to which they are limiting practice.

8. The California plan includes measures for recertification of specialists at ieast every five years by either of two methods. Recertification may be obtained by passage of a written examination or by compliance with the standards requiring ten years 01 law practice, continual legal education and continuing substantial involvement in the specialty field (the quantitative percentage of practice requirement). Included in the provisions for recertification is the requirement that the certified specialist complete board-approved programs 01 study within a five-year recertification period. There arB some Intricate details of this requirement but the basic provision is that the certified specialist must complete eighty hours 01 study for criminal law, thirty hours for workmen's compensation law and eighty hours for taxation law.

9. Originaily, the annual cost of operating the entire program, including continuing education and recertification, was estimated to be $150,000.00 per year. Reasonable fees are charged for the filing 01 applications for certification.

This economic burden is a chief concern of opponents of the California plan.

Although the continuing verbal battle between opponents of the California plan and those of the New Mexico plan would lead one to believe that the plans are totally opposite, they are in many areas similar or identical. The basic distinction is that the New Mexico plan does not provide for "certification" and appropriate notices are given to the pUblic to dispel any ideas that the "specialist" is certified. The New Mexico plan simply states that attorneys

may hold themselves out as specialists and may list themselves in the yellow pages, law lists and legal directories and may indicate that they limit their practice to a particular field of law, or that they primarily limit their practice to a certain field, or that they specialize in a certain area of law. In order to have a specialty, the applicant must meet the quantitative requirement of devoting at least sixty percent of their practice to the specialty area, so that no one attorney may have more than one specialty. There are no criteria for testing, monitoring or certify· ing specialists in New Mexico. However, attorneys must have devoted sixty percent or more of their time to the particu lar specialty areas for at least each of the immediate past five years, before the specialty can be claimed. The Chairman of the New Mexico Supreme Court Spacialization Board has indicated that approximately ten percent of the total bar membership of New Mexico has utilized the Plan during the last year. It is expected that this number will quickly multiply since the "wait and see" attitude of many bar members has now been abandoned.

The New Mexico plan includes a provision for the pUblication of a notice for the general information of the public wherein this distinction in defining "specialization" is set forth to prevent the misleading of the public. The pUblication of this notice has been characterized by opponents of the New Mexico plan as being a "disclaimer" and as such, acts to destroy the whole purpose of specialization. The notice appears in the yellow pages where the attorneys' listings are located. The notice has also been included in various press releases and public information statements issued by the State Bar Association in New Mexico and by the New Mexico Specialization Board.

To simplify this distinction of specialization, we will use the example of John Doe, Attorney at Law, who is a specialist in the field of Workmen's Compensation law. In California, the listing in the yellow pages of the telephone directory would be somewhat as follows: "John Doe - Certified Specialist Workmen's Compensation - California Board of Legal Specialization". In New Mexico, John Doe might simply state that he specializes in Workmen's Compensation law. However, the New Mexico telephone directory would also include the following notice.

As other bar associations conclude the development of pilot programs and begin the implementation of specialization plans, variations on the California and New Mexico plans will develop.

However, these two plans provide a solid framework upon which other plans can develop.

NOTICE For I" _ 0 1 Informonon 01

t" pubHc

Attorneys who have devoted 60% or more of their practice lime to a eenain specified and specialized area 01 the law for at least each of the immediate pest 5 )'8anI and who continue to devote at least 60% of their practICe tllne to such area of the law are permilled. il they so desire, to state that they "specialize" In such particular branch of law.

• Such a listing means only that the attorney has had at least the required amount 01 experience in his specialty.

• It DOES NOT MEAN that anyone or any agency or Board has certified that such attorney is an "expert" in such field of law • NeIther doeS it mean that such attorney is necessarily any more expert or competent than any other attorney Attorneys may also list themselves as "Iimltlng" or "primarily limiting' their practICe to panlCular branches of the law • 'Practice limited" means that such allomeys do not take or handle any tegal mailers except In the fields 01 law specified.

• "Praeuce pnmarily limited" means such attorneys are pnmanty lnt8f'eSled In handling cases In the reterred-to fields of law. but that they also handle other types of legal matters

ALL POTENTIAL CLIENTS ARE URGED TO MAKE lHEIR OWN INDEPENOENT INVESTIGAnON AND EVALUAnON OF ANY ATIORNEY BEING CONSIDERED. This notice publilhecl by

1M State Bat of New MelJCO. Tel. 842-3:l63 1117 Sla'Ilorn. NE, Albuque1que. New M81ico 87131

ARGUMENT FOR SPECIALIZATION The legal community knows that a particular firm does litigation work, primarily in the areas of personal injury, domestic relations and criminal law. But how does the public know this? Reputation and longevity will do much towards informing the public about the abilities of a particular lawyer or firm, but this is no longer sufficient. Specialization has become a fact of the practice of law and it is time for the legal profession to inform the pUblic about specialization in a meaningful and organized manner.

The advent of organized specialization will benefit the public to a much greater extent than either the general practitioner or the specialist. The public will first find it easier to locate an attorney who can deal with his specialized problem. The specialized problem will then be handled quicker and more efficiently by a specialist, without reduction of the quality of the service. A client with a specialized problem will be more satisfied with the results achieved when it is handled by a specialist. The specialized handling of specialiZed problems will improve the overall quality of legal services to the public and reduce the overall cost to the client. The structuring of specialties within the legal profession will decrease the unauthorized

practice of law by helping the public know who, for example, handles real estate matters. This will greatly aid the public by having a knowledgeable practitioner deal with legal problems that are now being handled by non-lawyers. The organization of specialists in the practice of law will improve the overall public image of the Bar. When viewed from a client's position, the organization of specialists within the legal profession is a must.

The general practitioner should also welcome the organization of specialization. The services of a specialist would be more readily and efficiently available to the general practitioner when his clients have specialized problems. It would be easier for the general practitioner, especially smaller firms and younger lawyers, to locate specialists within the profession. The specialist will aid the general practitioner in recognizing a legal problem or a solution which he might have overlooked. The availability of a specialist for consulta· tion by the general practitioner would greatly aid the general practitioner by relieving his concern over the handling of certain problems for his clients. By relieving the general practitioners of specialized problems, they will become more proficient in solving and handling legal problems incident to the general practice. The decrease in the unau· thorized practice of law which would result from specialization would aid the general practitioner by increasing the public's use of general practitioners.

The general practitioner would become more satisfied with his practice since he would be able to take care of all of his clients' needs by his own efforts and the use of specialists. The general practitioner would be relieved of extending himself to handle a specialized problem out of his normal line of work. General practitioners would enhance relations with their own clients by efficiently handling all their clients' problems.

The organization of specialization within the legal profession would, of course, be of benefit to the currently "unlabeled" spacialist. Such a lawyer is now handling specialized problems but is hampered by the lack of an organized method of informing other lawyers and the public of his intentions and skills.

Specialization would allow a specialist to become more proficient in solving problems in his specialized field since his announced intentions would reduce or eliminate work in other areas. Specialists would become more satisfied with their practice of the law. Younger lawyers who desire to become specialists would not be as hampered by the existing problem of becoming known for a specialty. Experienced specialists continued on page 32 January 1976/Arkansas Lawyer/31

Specialization, continued from paga 31 would benefit by being able to announce publicly what their specialties are.

The benefits to be obtained from the organization of specialists within the legal profession are great and should

compel the Bar to pursue the matter of specialization with utmost diligence.

ARGUMENT AGAINST SPECIALIZATION

The General Practice Section of the American Bar Association reports that

after having studied the matter, that body feels that the adoption of any plan for the "certification of specialists" which has

been suggested up to this lime, would be contrary to the public interest and would have a detrimental effect upon the

means of satisfying the public's right to competent legal services that are both broadly available and at a cost commensurate both with the client's needs and

his ability to pay.

The first objection which has been

uniformly expressed against specialization in the field of the law has been the difficulty in developing a system of certifying and consequently advertising to the pUblic. It is rather pointedly asserted that the term "specialist" is not necessarily synonymous with expertise or special competence in any particular field of endeavor. Neither experience alone nor a test given after experience would assure the public, or fellow lawyers for that matter, that such person who might pass the test is qualified as an expert or

specialist in that field. None of the proposals so far have provided an ade-

quate method by which the competence of any particular lawyer in any particular

yers is supportive of the position that there really is only a limited demand among the public for such specialization or expert.

Next, in the event of certification in a

broad

field,

it would then become

necessary for every lawyer practicing in that field to become certified or else he runs the risk of having the public consider him incompetent. With so many of the Bar then advertised as specialists or certified experts the classification is not

meaningful to the public and wouid be harmful to the profession.

The argument has been advanced that more competent service can be rendered by specialists and at a lesser rate.

We feel that the practicalities of life as observed in other professions do not bear out this argument. In other areas specialization tends to increase the costs of the service to the public or client in that specialists seem to charge more than general practitioners do.

Consideration should also be given to the fact that specialization of this type would only have a chance to work in the larger urban centers. Very few towns un-

der 50.000 population would generate enough business to support specialists

in any of the proposed fields. In most situations a broad general practice is necessary to support a law firm.

And lastly the canons of ethics as pro-

mulgated by the American Bar Association and approved by most of the states prohibit a lawyer from advertising that he specializes in any particular field. This canon has found general acceptance among the lawyers and until there is a change in this general feeling there could be no advertising without violating these canons.

field can be weighed and such act honestly advertised to the public.

Very closely connected with the first objection is the question as to whether or not the pUblic generally does or can know what specialist would be needed to deal with a particular problem. This can quickly be illustrated by referring to the field of taxation. Being an expert in the broad field of taxation is almost the same as being an expert in the general practice and a potential client who needed counsel and advice concerning estate tax problems might select an expert who confined his practice to income tax.

Too, so many legal problems are multi-faceted that the specialist in one

field might only be able to deal with a small part of such a client's problem.

There are those, then, who urge that

there is a demand by the public for this type of specialization. Up to this time, at least, this assumed fact does not appear to have any concrete support. It would

see, to the contrary, that the lack of specialization up to this point by many law-

32/Arkansas Lawyer/January 1976

It seems, therefore, that no workable proposal for specialization which will

benefit the public generally has been presented.

CONCLUSION The American Bar Foundation is presently engaged in an in-depth study and evaluation of the New Mexico and California plans in an effort to analyze the effects and implications of those

plans. It is basically the position of the American Bar Association Committee on Specialization that states should forego actual implementation of pilot programs until all aforementioned studies and evaluations are completed.

The Arkansas Bar Association Specialization StUdy Committee unanimously feels that some form of recognition

and/or regUlation should be carefUlly considered and instituted pending assimilation of responses and comments of members of the practicing bar, appropriate bar association committees and recommendations and findings of the American Bar Association. In any event, it is obvious that in such a sensitive area, research, study, evaluation and dissemination of information to the Bar without procrastination is essential if we are to maintain an informed and en-

lightened posture toward change,

Jeff Starling, Chairman LeRoy Autrey Jerry T. Light William R. Meeks Thomas L. Overbey Robert Hays Williams

~- .....

DEDICATION

OF

Position Open As Director of the Legal Aid Bureau of Pulaski County. Responsibilities include general management of staff personnel, including lawyers; administrative management of Bureau; contact with financial sources; and some law practice. Experience in legal aid field would be helpful. Salary is open to negotiation. Send resume' to James E. Darr, Jr., Suite 600, Tower Building, Little Rock, Arkansas 72201.

if

change of our traditional roles is advantageous to all concerned.

ARKANSAS SUPREME COURT ROOM Justice Building LiÂŤle Rock 2:00 p.m.

Friday, January 9, 1976 Members of The Bar of Arkansas Welcome Arkan... Justice Building Commlliion Supreme Court Room Dedlcellon Committee

HOW FAR CAN A LAWYER GO? This is ETHICS QUIZ NUMBER 3 in our current series. We are indebted to the New York State Bar Association for permission to reprint four Ethics Quizzes, recently published to remind members of their professional responsibilities.

What are the limits of a lawyer's professional conduct in defending a client against criminal charges? Score yourself on how well you know the Code of Professional Responsibility. If you score 90% or less you need to do some homework. Answers are on page 40.

Yes

No

Don't Know

Ms. Hortense Mason, an attorney, is contacted by James Allen, who wishes her to defend him against a homicide charge.

1. Assume Allen is a fugitive at the time he contacts Ms. Mason, and that he reveals to her his whereabouts. She advises him to surrender, and he does so.

Is she later obligated to reveal, upon police questioning, Allen's location at the time he contacted her?

2. What if Allen had jumped bail, and did not surrender after talking to Mason. Is she obligated to reveal his present hiding place?

3. Allen informs Ms. Mason that the police are looking for a particular gun alleged to have been used in the crime, and that he has hidden that gun at his home. May the attorney advise Allen to destroy or bury the gun?

4. Allen informs her that he has previously appeared before a grand jury, and that he gave perjured testimony at that time. May Mason reveal this fact to the authorities?

5. Assume Allen tells her that he intends to give the same testimony at his trial, and then does so. Must Mason notify the court of this fact?

6. In the course of investigating Allen's case, Ms. Mason interviews a number of his friends and acquaintances. From one of them Mason receives unprivileged information, which she is convinced is accurate, of an unrelated crime committed by two people, one of whom was an attorney. Her client was in no way involved in the offense. Is she under any obligation to notify the police of what she has learned?

7. Mason files a motion to dismiss the indictment on the ground that it is defective. Recently another trial court in the same jurisdiction has denied a motion brought on precisely the same grounds by one of Mason's partners.

The prosecutor neglects to brief or argue this precedent in opposing Mason's motion. Is Mason under any duty to disclose this precedent to the trial jUdge deciding her motion?

8. During Allen's sentencing, the clerk informs the judge that Allen has no previous record. Allen has in confidence told Mason of prior convictions. Is she bound to disclose this fact to the judge?

9. May she disclose it?

10. What if the judge asks her a direct question on the matter?

What are the limits of a lawyer's professional conduct in defending a client against criminal charges? Score yourself on how well you know the Code of Professional Responsibility. If you score 90% or less you need to do some homework. J -,_.

â&#x20AC;˘

January 1976/Arkansas Lawyer!33

LAW SCHOOL NEWS

SCHOOL OF LAW, UNIVERSITY OF ARKANSAS AT LITTLE ROCK FACULTY

Catalogue Librarian. Ms. Slipsky holds a B.S. In L.S. from Rutgers, The State University of New Jersey and an M.S. in L.S. from the Drexel Institute.

Student Bar officers attended the Thirteenth Circuit of the American Bar Asso-

451 of 1975). The seminars, attended by

The Library has recently joined the

ciation/Law Student Division President's

juvenile referees. probation officers, law

O.C.L.C. network through the UALR General Library. A 17,txXl volume book

Roundtable in New Orleans In mid October. The Thirteenth Circuit is composed of law schools in Texas, Ar-

Assistant Dean, Glenn E. Pasvogel, Jr. recently completed presentation of six seminars on the new juvenile code (Act

enforcement officers, and other persons involved in juvenile court work, were held in Fayetteville, Camden, Pine Bluff, Morri Iton, Arkadelphia, and Jonesboro, under the sponsorship of the Arkansas

order on microfilm has been received by

Juvenile Justice Institute.

Professor James W. Murphy spent the month of August vacationing in Australia. While there, he visited law schools in Sydney and New South Wales and delivered a guest lecture to a Criminal Law class at the James E. Cook University Law School.

Professor Robert Marquis attended a seminar on Noise Pollution in Washington, D. C. on October 14, 1975.

The seminar was sponsored by the Natural Resources Section of the American Bar Association. Professor Marquis delivered an address on the National Environmental Protection Act to the November luncheon meeting of the Pulaski County Bar Association.

LIBRARY Ms. Mary Jane Slipsky has joined the Law Library staff as the Acquisitions-

appointed as the Law Student Representative to the American Bar Association.

the Library bringing the combined Uni-

kansas. and Louisiana. The purpose of

versity-Pulaski collection to a volume now open for extended hours on week-

the Roundtable was to acquaint the SBA officers with the programs of the ABA/LSD and the funding available for

days and Sundays.

Ruth H. Brunson has been given a

them. As a result of the conference the UALA-5SA officers, in conjunction with

count exceeding 70,txXl. The Library is

new title: Professor of Law and Director of the Law Library. Assistant Librarian

Lambert G. DeCora now also holds the title Associate Professor of Law.

The officers for the two law fraternities for the Fall of 1975 are:

STUDENTS Two law students, Bob Govar and

Marjorie Kesl, are among 21 students who

have been

the LSD Representative, are planning a community oriented program to be instituted next spring.

UALR

named

to

"Who's Who in American Colleges and Universities".

The Student Bar Association

has

elected the following officers for the Fall Semester: Nancy Hofmann. President;

Wayne Lee, Vice President; Phil Graham, Secretary; and Paula Casey, Treasurer. Steve Bell and Mike Bearden were elected as Student-Faculty Representatives and Jane Knight was

The Robinson Chapter of Phi Alpha Delta - Justice, Paula Hall; Vice Justice, Tom Taylor; Clerk, Paula Casey; Treasurer, Joe Madden; and Marshall, Bill Crowe.

The McCelian Senate of Delta Theta Phi - Wayne Mooney, Dean; Margie Kesl, Vice Dean; Alice Ann Krupicki,

Master of the Rolls; Jim Smith, Clerk of the Exchequer; John Adametz, Tribune.

Both fraternities have Instituted monthly luncheon speaker programs.

SCHOOL OF LAW, UNIVERSITY OF ARKANSAS, FAYETTEVILLE Dr. Robert A. Leflar. Distinguished Professor Emeritus, recently lectured at

pleased to announce that the Board of Trustees of the University has authorized

the Appellate Judges' Educational Con-

Dr. Lellar to teach tor the 1976-77 school

ference. The conference was arranged

year. Again he will be instructing in the

by Chief Justice Howell Hellen of the Alabama Supreme Court. Seventeen appellate judges in Alabama participated

SUbjects of Torts and Conllicts.

in the conference. Or. Leflar lectured on opinion writing.

Funhermore, the School of Law is

34/Arkansas Lawyer/January 1976

Professor Charles A. Sullivan recently published an article in conjunction with Professor Michael J. Zimmer of Wayne

State University School of Law in 27 South Carolina Law Review 1. The ar-

ticle is entitled "The South Carolina Human Affairs Law: Two Steps Forward.

One Step Back?"

Ms. Peggy O'Neal, senior law student, recently chaired a discussion on children's rights at the Arkansas Conference

on Children and Youth held in Hot Springs in October.

Professor Morton Gitelman served as a panelist at the fourth annual Gover-

Aaocf.'. Pro,_,

IIy of ,. . SChool of U.W, Feyett..... PIctured Iefl to right, front row F. H. M.rtln; ........nt Pro'..IO' Ell B.... A..IIl.n' Pro'.IIO' Phillip Norv.lI; b.ck row - A..I"'"n' P,o'."o, G.o'g. Knox; AIIII'.n' P,O'.IIO' How.,d Brill; A..lllen' P'O'.IIO' Rlche,d A'klnlOn; end Alloclel. P,of..IO' Che,,," Sulllven.

TIle . - ,

nor's Environmental Congress September 10th in Linle Rock.

Professor Hillary Rodham has been appointed the Reporter to the Planning Group for the U.S. District Court, Eastern District. to implement the Speedy Trial Act. Additionally, Professor Rodham has been selected to participate as a panelist at a national conference on Children's Rights sponsored by Brigham Young University February 19th and 20th.

The School of Law's National Moot Court team: Mr. George Gearhart of Fayetteville; Mr. Steven Curlee of Elkins;

and Mr. John Bynum of Russellville; finished third in regional competition held in Dallas. Law Schools from Arkan路 sas, Texas and Oklahoma participated in the competition.

Assistant Dean J. Steven Clark attended the National Conference in Continuing Legal Education at the University of Chicago November 10, 11 and 12.

Mr. Rick O'Brien of Fayetteville was elected President of the Student Bar Association for the spring semester.

The fourth annual touch football game between the Washington County Bar

Pro_ BIll Clinton 88Cortlng Fell Legel pertlelp.nll Ihrough I " 'ecIllU...

,emod_

Association and the Law students ended in a 6 to 6 tie. The Bar objected to any sudden death effort and adjourned the festivities in favor of liquid refreshment.

Mr. Rex Terry of Tyronza has been elected Editor-in-Chief of the Arkansas Law Review for the spring semester.

Assistant Dean J. Steven C lark attended a faculty seminar on law placement problems and opportunities sponsored by the Tulsa School of Law. Mr. Richard Badger, President of the National Association of Law Placement, directed the seminar. J- ._.

Mrs. Loull Rem..y and eon Rick, 1IC0nd yeer lew Iludenl, lelklng with Glenn Parr, second yea, law student, during contlnenlel break'.I' al lew school during Fell Legel, January 1976/Arkansas Lawyerl35

â&#x20AC;˘

Editor's Comment: AEGIS is a feature of the Arkansas Bar

Association's educational program con¡ eerning docket control and other areas of high fisk experience ;n profess/onal lIability

cases.

SAFEGUARDING YOUR PROFESSIONAL FUTURE

'It Is Easy To BeWise After The Event (17th Century Proverb) the problem:

While driving on the wrong side of the road, a woman crashed into another car. She was killed and the passengers in the other vehicle were seriously Injured. They brought suit against the deceased, her estate and against her sale surviving heir. The defense of the case against the deceased was referred to a firm of attorneys by her auto insurance carner. The heir was represented by his own attorney. The heir was subsequently appointed administrator of the estate.

The case resulted In an adverse verdict against all named defendants In the amount of $91,000. The automobile liability carrier tendered its policy limits of $20,000.

Several months after the verdict, the heir notified his attorney that a Sheriff was at his premises with a Writ of Execution. The attorney immediately filed a motion for an order nunc pro tunc to remove his client's name as a defendant before the trial court.

The order was entered changing the judgement. The plaintiffs appealed the judgement and the appellate court ruled that the granting of the nunc pro tunc order was judicial error because this verdict was not subject to a nunc pro tunc proceeding. Subsequently, the Supreme Court affirmed the ruling of the appellate court.

the result:

The heir instituted a professional liability claim against hiS lawyer for failure to have his name removed from the suit prior to or subsequent to the rendering of the judgement. Because of hiS failure to act promptly, the insured attorney became liable for losses assessed against his client. Payment was made by the insurance company who provided his professional liability insurance.

advice:

When defending a personal injury suit, make certain that defendants improperly joined are dismissed from the suit. And if a client may be liable in a representative capacity, check to make sure that he isn't being sued in an individual capacity.

36/Arkansas Lawyer/January 1976

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Want more details? Call or write Arkansas Bar Association Administrator Rather, Beyer & Harper Three Hundred Spring BUilding Little Rock, Arkansas 72201 (501) 372-4117 January 1976/Arkansas Lawyer/37

In Jlemoriam

â&#x20AC;˘

Pralsa ye Ihe Lord; for il is good to sing praisas unto our Lord; for il is pleasanl and praise Is comely.

Psalms 147:1

C. V. HOLLOWAY 1889-1975 Former State Senator Claude V. Holloway, 85, of England, died October 11, 1975. He was an attorney and planter and served in the State Senate in 1935 and 1937.

He attended the University of Arkansas and received his law degree from Harvard University. He was a former president of the Missou ri, Kansas and Arkansas Kiwanis District. He was a Mason and Deacon of First Baptist Church, where he taught Sunday SChool for 40 years.

Survivors include his widow, Mrs. Roselynn McDonald Holloway; a grandson, Jack Davis, of England; and three great grandchildren.

EDWIN LEE BAXLEY Edwin Lee Baxley, aged 62, of little Rock, died. Mr. Baxley was associated with New England Mutual Life Insurance Company.

Born at Little Rock, Mr. Baxley attended Little Rock Junior College, Draughon's SChool of Business, American Institute of Banking, and received his law degree from the Arkansas Law School.

Mr. Baxley was state representative from Pulaski County from 1947 to 1950, was a member of various state and local Life Underwriters Associations, the Arkansas Estate Planning Council and the Arkansas Bar Association.

He was a member of the Administrative Board and Board of Trus38/Arkansas Lawyer/January 1976

tees of the First United Methodist Church, a member of the Executive Comm ittee of the Little Rock University Foundation and a member of the Little Rock Parking Authority.

He had been chairman of the ExecutIve Committee of the Pulaski County unit of the American Cancer Society; a Board member for the Salvation Army; on the Budget Committee of the Community Chest; and a Board member of the United Fund.

Mr. Baxley was a past president of the Optimist Club and the Young Business Men's Associalton, and a member of the Board of the Visiting Nurses Association. He served on the Board of Governors and was Chairman of the Golf Committee of the Country Club of Little Rock, and was current Secretary of the Little Rock Club.

He was a Board member of the Better Business Bureau, the Little Rock and Arkansas State Chambers of Commerce, Sons of the American ReVOlution, Pulaski County Historical Society and the American Legion.

HEARTSILL RAGON

1917-1975 Heartsill Ragon, 58, died August 28, 1975, in Fort Smith.

A native of Clarksville, he was the son of the late Federal Judge Heartsill Ragon, who was also the repre-

sentative from the old Fifty Congressional District for many years.

Mr. Ragon was graduated from Washington and Lee University at Lexington, Virginia, in 1939, and received his law degree from the University of Arkansas in 1941.

He was a former prosecuting attooney for the 12th Judicial District and served in the House of Representatives from 1943 to 1948.

Mr. Ragon practiced law in Fort Smith for many years in the firm of Warner, Warner, Ragon and Smith.

At the time of hIS death, he was administrative law judge for the state Compensation Commission.

A past president of the Sebastian County Bar Association, he was President of the Arkansas Bar Association in 1961~2, and was a member of the American Bar Association. He was a fellow of the American College of Trial Lawyers and the American Bar Foundation.

Mr. Ragon was a member of the Arkansas Bar Exam ination Committee from 1961 to 1967, and once served as a special justice of the Arkansas Supreme Court.

Mr. Ragon was a member of the State Oil and Gas Commission from 1967 to 1975.

He was a past president and director of the United Federal Savings and Loan Association in Fort Smith, a member of the Board of Directors of Hardscrabble Country Club, and the Town Club, and an elder in the Central Presbyterian Church.

WILLIAM JESSEE DUNGAN

11185-1974 William Jesse Dungan, aged 89, of Augusta, a practicing lawyer for 48 years and Augusta's first Municipal Judge, died December 18, 1974.

Mr. Dungan was bom at Searcy (White County), son of William Dungan and Nancy Smith Dungan. Before beginning his law practice, he was a teacher for eight years and Superintendent of Schools at Crawfordsville for five years.

He lived in Augusta most of his life where he served the City as Mayor and City Attorney and was an honorary member of Rotary and a member of the Methodist Church.

He was married to Frances Gordon Dungan who is still a resident of J-_.

Augusta.

ADDENDA

by C. E. Ransick !

Editor

NATIONAL CONFERENCE OF BAR PRESIDENTS Medical malpractice insurance, bar public relations, judicial selection and retention, the long range future of the organized bar and a report by the incoming president of the American Bar Association were among the highlights of the August 1975 Annual Meeting of the National Conference of Bar Presidents, In Montreal, Canada The verbatim transcript of that meeting is now available for purchase from the Conference at a cost of $10.00 per copy. The transcript, including a list of those registered at the meeting, is printed in an attractive paperbound book and contains current information about a number of topics of interest to those involved in the work of the organized bar. To order a copy of the transcript, please write to the National Conference of Bar Presidents, c/o American Bar Center, 1155 East 60th Street, Chicago, Illinois 60637. Orders must be accompanied by a check or money order made payable to the National Conference of Bar Presidents.

ABA SCIENCE AND TECHNOLOGY SECTION Ronald A. May, Little Rock attorney, has been installed as Chairman of the American Bar Association's Section of Science and Technology. May succeeded Weston Vernon, Jr., New York, at conclusion of the ABA annual meeting in Montreal August 13. The section was formed to deal with legal issues emanating from the field of science, including scientific research.

A native of Waterloo, Iowa, May received a B.A. degree in American civilization from the University of Iowa in 1950 and an LL.B. degree from Vanderbilt in 1953.

Subsequently he became a partner in the law firm of Wright, Lindsey and Jennings. May has worked with several American and Arkansas Bar Association committees. He is also a member of the National Association of Railroad Trial Counsel and the American Counsel Association.

Active in community service projects, May has served as president of the Arkansas Association for Mental Health, and Special Committee on Public Education. He is currently president of Friends of the Library and was chairmen of the Board of Trustees, Little Rock Museum of Science and Natural History in 1973. May has pUblished two books on automated law research. He has been awarded membership in Phi Beta Kappa and Order of the Coif.

ABA SECTION OF CRIMINAL JUSTICE Searcy Attorney Edwin R. Bethune has been elected Assistant Secretary of the Section for the year following the ABA's annual meeting in August 1976 in Montreal. He was the unanimous selection of the Section's nominating committee.

Bethune was the Project Director for the Arkansas Workshops in 1970-71 to compare Arkansas law with the ABA Standards for The Administration of Criminal Justice. Three workshops and legislation defining the Arkansas Supreme Court's "rule-making" 路authority laid the groundwork for the proposed Rules 01 Criminal PrOClldur. in Arkansas.

Bethune served as Chairman of the Procedural Committee of the Arkansas Criminal Code Revision Committee which developed such Rules. As Assistant secretary of the ABA Section of Criminal Justice, Bethune will now use his "Standards" expertise to persuade other States to follow the Arkansas lead.

NEW RULE On October 6, 1975, The Arkansas Supreme Court laid down a new rule that out-of-state lawyers may practice in Arkansas courts. Any circuit or chancery court, however, can adopt a rule requiring them to associate with Arkansas lawyers, upon whom notices cou ld be served and who could be held responsible for the progress of the cases. The Rule is subject to reciprocity. The out-of-state lawyers will have to sign statements submitting themselves to all disciplinary procedures applicable to Arkansas lawyers.

LEGAL CHECKLIST FOR SERVICE PERSONNEL A new pamphlet, "Legal Checklist for Arkansans Entering the Armed Forces of the United States", has been published by the Arkansas Bar Foundation and is now being distributed. Copies are available upon request.

The Standing Committee on Legal Assistance for servicemen of the American Bar Association prepared the draft for the pamphlet. It was adapted to Arkansas law by Jack Holt, Jr., Dan C. Blaney and Lt. Colonel Robert A. Perkins, Staff Judge Advocate, LRAFB. continued on page 40 January 19l6/Arkansas Lawyerl39

What is Your Ethics Rating?

60 % , 800/0, 400/0?

Answers to Ethics Quiz No.3 Continued from page :JT (Don'\ look unlll you have marked all of your answers on the quiz.)

1. No. 2. Vea. In order to answer these and the following questions, one should have a sense of the relationship between the Code and the law regarding both privilege and the suppression of evidence. In certain situations, the law of attorney-client privilege demands that a lawyer maintain particular types of confidences. The Code in no way alters such legal obligations. Similarly, in situations where the law requires disclosure, the Code calls for no different result. "A lawyer may reveal confidences or secrets when permitted under Disciplinary Rules or required by law or court order." [(DR 4-101 (C)(2))) There are situations, however, in which the law neither requires nor forbids disclosure where the Code may impose an ethical obligation upon an attorney to do one or the other.

In the first instance, it has been held that any disclosure by Allen as to his whereabouts prior to surrender would be related to criminal activity of a noncontinuing nature, and hence was privileged. Thus, Mason neither must, nor may, reveal it \0 the police. ABA Opinion 23 (1930). Bail-jumping, however, is a crime in itself. As long as Allen refuses to surrender, that crime continues, and any disclosure related to it is not privileged. See McCormick on Evidence, ยง95.

Thus, if Ms. Mason is asked to reveal

Allen's whereabouts by proper authorities. she may not refuse to do so. But Mason also has an affirmative duty in

6. Ves. Mason is under the same moral obligation to report crimes as any citi-

client's confidences. since "the facts in the attorney's possession indicate beyond reasonable doubt that a crime

(bail-jumping) will be committed." Thus

zen. This would apply to the criminal activity of the layman which Mason learns of. As to the lawyer, the Code imposes an additional ethical duty. A lawyer is

Mason would have to urge Allen to surrender, and, if he did not, then reveal

bound to report the misconduct of other lawyers to the relevant authorities. See

his location to the police. See ABA Opinion No. 155 (1936). The Code im-

DR1-103. ABA Informal Decision 1210 (1972) states: .. . .. The Code of Pro-

poses on lawyers an ethical obligation to prevent crimes in situations where a similar legal obligation may not exist for

fessional Responsibility through its Disciplinary Rules necessarily deals directly with reporting of lawyer miscon-

ordinary citizens. See DR4-101; DR7-102.

duct or misconduct of others direclly ob-

3. No. The concealment or destruction of physical evidence is, at least in most jurisdications, a crime in itself. While a

served in the legal practice or the administration of justice. It. of course, was

lawyer may defend his or her client

obligations imposed on him as a mem-

zealously, he or she must do so within

the bounds of the law. See DR7-102.

Thus Mason may not advise her client to engage in such conduct. As future criminal activity, such concealment or destruction of evidence would not be

privileged.

4. No. 5. Yes. Once again, a relevation of

past criminal activity (the grand jury perjury) is privileged. As to the future crime

of perjury, Mason should attempt to dissuade her client from this course of action. If he persists in his plan, she must withdraw from the case. Since the communication as to this future criminal activity is not privileged. Mason then

GCBA HONORED The Garland County Bar Association was twice honored in 1975 receiving the American Bar Association Award of Merit and the Arkansas Bar Association Outstanding Local Bar Association Award.

GCBA's activities were in areas of better public relations, improvement of courtroom facilities, cooperation with law-enforcement officials, voluntary public defender system. volunteer probation officer program, aid for juvenile offenders, etc. Arkansas Bar Association President Robert C. Compton is shown receiving the ABA Award of Merit to GCBA from ABA President Lawrence E. Walsh on August 10, 1975 during the ABA Annual Meeting at Montreal. /Iโ ข

4O/Arkansas Lawyer/January 1976

currence. DR7-102(B); DR4-101(C) (3).

this context. On these facts it has been held that an attorney must disclose a

Addenda, continued from page 39

.....

must take steps to prevent its occurrence or to inform the court of its oc-

not intended to strip a lawyer of the other

ber of society."

7. Yes. See DR7-106(B). The test is whether the precedent is one that the court should clearly consider in deciding

the case. ABA Opinion No. 249(1949).

8. No. 9. No. 10. No. As a privileged communication, Mason may not disclose her knowledge of Allen's record. If asked a direct question, she should first endeavor to persuade her client to tell the truth, and if the client declines she should ask the court to excuse her from answering the question and then withdraw from the

case. See ABA Opinion No. 287. <i'. '~

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