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RETURN REGISTRAnON FORM AND MAKE CHECK PA YABLE TO: I AlCLE, 400 West Markham. Sui'e 700, Little Rock, AR 72201. Phone: I 375-3957, Or use your credit card number and register by FAX: 375-4901. JI

LETTER

fROM

THE

EDITOR

You Donlt Call, You Donlt Write

• • •

By Paige MarXman

Letter from the Editor? Yes, this is new. If you take time to look through the magazine, you'll find some other new items as well. Besides, I thought if I wrote, some of you might write back. I know you must have opinions about The Arka ..sas Lawyer, so let's hear them. As my father says when I call -"Paige who? You don't call, you don't write ..."

Traditionally, the turn of a new year marks a time for us to look ahead in anticipation of fresh starts, needed improvements and coming events. At the same time, we tend to reflect on the year past with a gamut of emotions and recall both good times and bad. This year is an especially important one for The Arkamas Lawyer. From the cover you can see you are holding the 25th Anniversary issue. Anniversaries seem to be in abundance this year -- it's also the SOOth anniversary of Columbus discovering America, the 200th anniversary of the Bill of Rights (actually, that was December 15, 1991), the 10th anniversary of MTV (Music Television) and the 10th anniversary of Worki..g Woman Magazine. Although all of these don't really relate to our publication, I found it interesting to look at the developments of each and draw some parallels. Who would have thought people would today be questioning whether Columbus really discovered America, or that the Bill of Rights would be attacked daily in courts across the country? Who would have thought a television station that allows women like Madonna to spit and belch for millions of viewers would survive 10 years? And who would have guessed we would witness the 10th anniversary of a magazine strictly for women who work at real jobs and have real careers? Some of these things are good, some are not SO good -- that's for each individual to decide. The basic idea is that everything needs constant criticism and improvement in order to prevail.

The 25th anniversary of this magazine should signal us to do some assessing. In this issue, we have the long awailed results of the women's portion of the Women & Minorities Study. Read them. They're important. Things don't look SO greal for female attorneys tight now. I've heard people say that recenl events like the Clarence Thomas confirmation hearings and the William Kennedy Smith rape trial have forced women's rights back a few sleps. This may be so, and women may have a problem in the legal profession, but let's not just admit the problem -- let's solve it, or at least take definite steps in that direction. Bill Martin's column on the subjecl is excellent -- read il.

In this issue, Arkansas lawyers speculate on the effect of a Bill Clinton presidency on the legal community. I was told, by one of my Republican lawyer friends, that I was dancing on the edge with this one. If I fall off -- WRITE and tell me. I hope you will also take a minute to read the book reviews. They might surprise you. We're trying out legal-related books for critique, fiction novels that feature a lawyer or legal casc. If you like or hate them -- WRlTE and tell me. Finally, my dog is pictured in the center spread enjoying The Arka..sas Lawyer's birthday cake -- even I thought this was dancing on the edge, bllt he looked so darned cute! Again if you like it or hate it - WRlTE and tell me.

The point is YOU DON'T CALL, YOU DON'T WRITE... and you should. This is your magazine. Part of your dues go toward its publication. We want 10 know what you want to read, what you hate, find mildly distasteful or boring and certainly what you think is worth reading. Putting Ihe magazine together IS a collaboratIve effort of lawyers from across the state researching and writing (and, by the way, now earning a few CLE hours for their trouble), the Association staff editing and coordinating and the printer domg hIS Job. Just as Importantly, it takes your input telling us if we're doing it right. So WRlTE 400 W. Markham, LR, AR 72201! CALL ANYTIME 375-4605 or 800-482-9406' On this 25th anniversary you can even FAX 375-4901' And if you don't want another letter from the editor -_ I won't write one!_ 4 ARKANSAS LAWYER

JANUARY 1992

VOLUME 26, NUMBER 1 PUBLISHER

Arkamas Bar Association EDITOR & ART D1REcrOR Paig~ &avm Markman Dir~ctor ofPRlMarkning

ARKANSAS BAR ASSOCIATION 400 W. Markham Little Rock, Arkansas 7220 I OFFICERS James H. McKenzie President

John P. Gm PrcsKlent-EJcct Rodney E. Slater Secretary -Trea.surer John C. Everett

Executive: Council Chair William A- Marrin Executive Director

Judith Groy AsSLst2.nt Executive Director

In This Issue: 4

Letter from the Editor

7

Reading Reviews: SOUTHERN LEGAL HISTORY, PRIVILEGED INFORMATION & THE FIRM

8

14 President's Message

CarolynJ. acgg Boyce R. Davis John N. Fogicman Stephcn A. Gciglc I kc Allcn Law., J..

Robert Lynn Lowery E. Lamar Patus Jerry

Where's My Percentage of the Recovery?

Problems in Collecting a Contingent Legal Fee in Arkansas

By L. Scott Stafford

24 Young Lawyers' Section Column

J. Thomas Roy

EX-OFFICIO James H. McKenzie

John P. Gill Charles B. Roscopf Rodney E. Slater John C. Everett Lynn Williams

26 ON THE COVER: The Arkansas Lawyer Celebrates its 25th

29 Significant Developments in

Arkansu uwyer,4OO West Markham. UtUe Rock.

Arkansas 72201. Subscription price to nonmembers of the Arkansas Bar As.socUtion $15.00 per year ard to members $10.00 per year included in annu.J1 dues. Any opinion ~ herein is that of the author. and not necrssarily that of the ArkansOlS Bar Association or The Arkanus lawyer. Contributions to The ArkanYS uwyer are wekome and should be sent in two copies to EOnuR, Arkam.s Lawyer. 400 West Markham, Little Rock. Arkansas 72201. All inquiries regarding advertising should be sent to The Arka.nsu uwyer at the above address.

The Editorial Staff

Probate & Trusts

in the Past 25 Years

By Richard F. Hatfield

35 Law, Literature & Laughter

By Victor A. Fleming

36 Postcards from the Edge? ~

Arkansas Lawyers Speculate on a Clinton Presidency

37 Executive Director's Report The A.rlu.nus uwyer CUSPS 546-040) is published qUlJ"terly by the Arbns.u Bar Association.. Second class po5hlge paid at Little Rode., Arkansas.

POSTMASTER: send address changes to The

By Lynn Williams

25 In Memoriam

c. Post

Eddie H. Walker, Jr. Robert E. Young

By James H. McKenzie

16 General Practitioners Primer:

EXECUTIVE COUNCIL Sanford Bcshcar William Clay Bruil Thomas M. Carpenter Daniel R. Cartcr

Disciplinary Actions

By William A. Martin

39 The Women & Minorities Study: The Results Are In!

By William A. Martin & Dr. M.D. Buffalo

47 In House News 49 Law Office Managment: Professionalism and Management

50 AICLE Calendar

By Jerry Schwartz

Georgia Legal History Foundation Reviewed by Richard A. Williams Southern history and southern legal history have overlapped extensively during the past century and a half as a result of slavery, Reconstruction, post-Reconstruction, jim Crow laws and the civil rights movement. It is timely, therefore, that a new publication, Southern Legal History, "part scholarly journal/part readable magazine," seeks to make the legal history of states which once comprised the Confederacy accessible to academics, lawyers and laymen alike.

The first issue of Sou them Legal History, published biannually by the Georgia Legal History Foundation, begins with an article on the adoption of the Fourteenth Amendment and ends 279 pages later with anecdotes told by Georgia and North Carolina lawyers about law practice in the early days of the twentieth century.

Lovers of legal history may subscribe for only $35 per year. The address is Georgia Legal History Foundation, P.O. Box 174j, Athens, Georgia 30603. _

Tom Alibrandi & Frank H. Armani Harper Paperbacks, $4.95, 318 pages.

Reviewed by the Editor Sitting in the airport recently, I found this book and couldn't resist.

I'm glad I bought it. Privileged Information is one of those novels that really makes those of us who deal with the legal field think -- kind of like a Socratic Dialogue contained in 318 pages.

The novel is the true story of Frank H. Armani, an attorney in New York State who is appointed to defend a crazed killer who has brutally murdered at least seven people. The twist is that Armani and his cocounsel are told by their client where two bodies are hidden that the police are still looking for. What to do? The two decide to try to use the information in plea-bargaining. When the prosecutors are approached, they are horrified and make the "deal" public.

Obviously, the public is outraged and Armani is confronted by the parents of the girls.

The novel explores Armani's struggle with his feelings, those of his family, friends and peers. It is interesting and very thought provoking, well worth the read. _

john Grisham Reviewed by the Editor You know how you hear about a book or a movie over and over again, about how wonderful it is, "the best I've read/seen in years," then you read/see it, and it just doesn't live up to your expectations, sometimes you even end up scratching your head, wondering how you ended up with this friend who obviously has no

taste in Ii terature. The Firm is one of those rare exceptions to the rule -- IT WAS GREAT! A MUST for any lawyer, even those who don't enjoy reading about the profession on off hours. john Grisham, a native of Oxford, Mississippi, enthralls with the story of Mitch McDeere, a recent Law graduate who takes "a too good to be true" job with an old Memphis law firm. (Any attorney recently starting out should remember after hearing Mitch's salary and perks that this is FICTION) He quickly sees that something isn't quite right and becomes determined to find the truth. I won't tell any more -- its worth finding out yourself.

Although written for the layman, those in the legal field will have a better understanding of the processes and innuendos throughout the novel.

Grisham, a lawyer himself, has a good grasp of the long hours, tedium of work and high expectations of the beginning lawyer.

The book is written tightly, very little wasted prose, and all of the characters are well developed and interesting. The reader is drawn in from the first page and kept under Grisham's spell until the last page is turned with regret. I haven't found anyone yet who has read the book and not loved every minute of it! _ Obviousty we've decided to include reviews of "noll-sclwlarly" books. If you've read a good book lat<ly, scholarty or not, ptease send in a review -- Editor, Arkansas Lawyer Magazine,

400 W. Marklwm, Little Rock, AR 72201.

DISCIPLINARY PAUL K. LANCASTER Paul K. "Pete" Lancaster of Benton was issued a letter of caution for violation of Model Rules 1.2(a), 1.3, 1.4, 8.4(c) and 8.4(d) as a result of a complaint filed by Sandy Manning.

Ms. Manning engaged the legal services of Mr. Lancaster in December 1986 to probate the estate of her deceased father. Following the initial consultation Ms. Manning experienced considerable difficulty in making contact with the

lawyer and it took approximately five months for the petition for appointment of an administratrix to be filed. An insurance company providing hospitalization coverage for Ms. Manning's father refused to pay claims associated with his last illness. After an extended period without a favorable res pense from the insurance carrier; Mr. Lancaster petitioned and obtained a court order permitting suit to be filed on behalf of the estate. The order was entered on May 18,1989. The complainant stated that she contacted the attorney several times after entry of the order and was informed

by Mr. Lancaster that he had heard nothing further regarding the matter. The lawyer wrote Ms. Manning on September 11,1989, and advised her that he could no longer continue representation because of his appointment to a judicial office. The letter also recited that Mr. Lancaster had referred the legal matter to another attorney, who would contact Ms. Manning, and that the lawsuit had been filed. The client was not consulted in regard to the transfer of her legal matters to another attorney. After approximately nine months without receiving any information concerning the status of her case, Ms. Manning went to the probate clerk's office where she discovered that suit had not been filed against the insurance company. The lawyer to whom the case had been transferred was contacted and he advised that he had been unable to work on the case. The complainant then consulted with new legal counsel Mr. Lancaster's response acknowledged representation of Ms. Manning.

Mr. Lancaster stated that he did not intentionally avoid or ignore the client but encountered some delays in pursuing the case because of his unusual schedule and the nature of his law practice. During

B ARKANSAS LAWYER

JANUARY 1992

ACTIONS

the pendency of Ms. Manning's legal matters Mr. Lancaster was variously serving as a munici pal judge and a juvenile court referee. After obtaining leave of the court to bring suit on behalf of the estate, Mr. Lancaster learned of his potential appointment to a newly created judgeship. He contacted another attorney to review the file and consider assumption of the casco After his judicial appointment on August 1, 1989, Mr. Lancaster was advised of the other attorney's acceptance of Ms. Manning's case.

It was Mr. Lancaster's understanding that he other attorney would contact the client and, with her consent, pursue the legal representation.

From a conversation with the successor attorney in early September, Mr. Lancaster was led to believe that suit had been filed although Ms. Manning had not yet been contacted by the attorney. Based on that understanding of the case status, Mr. Lancaster wrote the letter of September 11, 1989. He was unaware that Ms. Manning's legal actions were not being actively pursued until he received her affidavit of complaint.

ROBERT R. CORTINEZ Robert R. Cortinez of Little Rock was issued a letter of reprimand for violation of Model Rules 1.4(a), 1.15, 8.4(c) and 8.4(d) as a result of complaint filed by Linda Cail McMoran McCi11.

In her affidavit, Linda Cail McMoran McGill, stated she was injured. in an auto accident in December 1984. She and Mr. McMoran, her husband at the time, chose Mr. Cortinez for legal representation because of her husband's prior association with him. Mr. Cortinez was associated with the Haskins Law Firm and primarily involved with workers' compensation claims. Another member of the firm assumed responsibility for the accident case. Mr. Cortinez later left the Haskins Firm. The Haskins Firm subsequently negotiated an 518,000 settlement. Ms. McMoran, feeling the offer was too low, contacted Mr. Cortinez and he agreed to represent them if they retrieved their file from Haskins. They did so and Mr. Cortinez undertook representation for a 52,000 fee if successful in a recovery. Within a year he negotiated a settlement for 525,000. The

McMorans went to Mr. Corti nez's office where they endorsed a draft from the insurance company made payable to them, the attorney and the Haskins Law Firm. At that time Mr. McMoran received 51,500 and Ms. McMoran received $8,500, both checks drawn on their lawyer's trust account. The McMorans, at that time and previously, advised Mr. Cortinez that the outstanding medical bills were to be paid first. He told them then, as he had previously, that he would take care of it.

The clients continued to receive medical bills and, when contacted, Mr. Cortinez would tell them it was being taken care of. The McMorans were refused a bank loan because of the outstanding bills and lawsuits. Per their request, Mr. Cortinez wrote the bank stating that funds were being held in trust to pay the indebtedness but were not being disbursed because of a dispute. The dispute involved the Haskins Firm's claim for a fee. Although the contingent fee contract with Haskins called for one-third of the proceeds, Ms. McMoran felt that was too much. Their attorney advised the McMorans that Haskins wasn't entitled. to anything. Later, without first consulting the McMorans, Mr. Cortinez informed them that Haskins had been paid S6,OOO. No other monies were disbursed to the McMorans. According to the complainant, Haskins received 56,000, Mr. Cortinez was to be paid 52,000, and the McMorans received 510,000, for a total of 518,000, and leaving 57,000 unaccounted for. The complainant retained other counsel and sued Mr. Cortinez.

In his response, the lawyer acknowledged representation of the McMoran family over a period of years but denied any non-law related employment or social relationship with the parties. Mr. Cortinez was contacted regarding Ms. McMoran's accident claim, and the case was taken on by the Haskins Firm. After leaVing the Haskins Firm, Mr. Cortinez was consulted by the McMorans concerning a proposed settlement. He advised the complainant that, if dissatisfied with the offer and the attorney's fec, she should discuss the matter with the Haskins Firm. Mr. Cortinez was disinclined to undertake representation because of the fee claim but agreed to take the case if Haskins were relieved. The complainant did not want the Haskins Firm to receive any

DISCIPLINARY money and employed Mr. Cortinez. He agreed to do so for a contingency fee of one-third. From February 1986 through October 1989, he represented the McMorans on several legal matters in addition to the accident casco In early 1986, Mr. Cortinez filed answers to two lawsuits by medical providers against the complainant. In September 1986, he negotiated a 525,000 settlement for Ms. McMoran's accident claim. She still insisted that Haskins receive no fee, so her attorney filed suit against Haskin$ to void the contingency fee. Mr. Cortinez acknowledged writing a letter to the bank on behalf of the McMorans but failed to include a statement that the clients would pay the bills if the litigation against Haskins were successful. Ms. McMoran didn't have funds to pay for the other legal work being performed. but instructed Mr. Cortincz to take attorney's fees from the money being held for her.

Depositions were scheduled in the Haskins fee dispute, and the lawyer spoke with Ms. McMoran about the expense and the merits of the case. She decided not to pursue it. On January 26, 1989, a settlement of 56,000 was reached with Haskins. Mr. Cortinez continued to represent Ms. MeMo ran through the conclusion of her second divorce on October 19, 1989. She and her former husband, Mr. McMoran, filed suit against Mr. Cortinez on October 23, 1989, for failure to pay the medical bills in connection with the recovery in the 1984 accident case. The attorney denied that the complainant ever instructed him or his office to pay the medical bills.

HARRELL A. SIMPSON JR. Harrell A. Simpson, Jr. of Pocahontas was suspended from the practice of law for a period of one year for violation of Model Rules 1.3, 1.4(a), 1.4(b), 3.2 and 8.4(d) as a result of a complaint by Nancy Patterson.

In her affidavit of complaint, Ms. Patterson stated that following the accidental death of her husband in October 1985, she retained counsel for probate of the decedent's estate and to pursue legal claims on behalf of the estate. Subsequently, she decided to change lawyers and entered into a contract of employment with Mr.

ACTIONS

Simpson on December 15, 1988. At that time, Ms. Patterson received his assurance that she would be kept informed of any settlement offers, court dates and the case status in general. Over the next twenty months or so Ms. Patterson made intermittent visits to Mr. Simpson's law offices and was periodically informed that the lawsuit had not gone to trial because the defendant's counsel was holding up the proceedings. On one occasion the attorney discussed a proposed settlement offer to be made to the defendants and told Ms. Patterson she would be sent a copy of the proposal prior to submitting it. She said that she never received such a copy. In late 1990, Ms. Patterson learned from an acquaintance working at the courthouse that the lawsuit had been dismissed. She went to the courthouse and obtained a copy of the court's file.

She discovered that several notices of trial settings had been issued but all had been continued to later dates and some of the postponements apparently were secured at Mr Simpson's request. Ms. Patterson also learned that a settlement offer had been presented by the defendant prior to Mr. Simpson's mention of making a settlement proposal. She was never informed of the defendant's offer. The court's records reflected that Mr. Simpson had been served with various discovery motions, and failing to respond in the required time, had路been ordered by the court to answer the interrogatories by a date certain. Upon his failure to comply with the court's order, the lawsuit was dismissed on the dcfendant's motion. The client was never a ware of the outstanding interrogatories. Ms. Patterson retained other counsel and he wrote Mr. Simpson on December 4, 1990, requesting transfer of the case file to him. That was n.... "":one in a prompt manner and it was only some weeks later when Ms. Patterson and her father had a chance meeting with Mr. Simpson that she was able to go to his office and retrieve her file. The lawsuit was subsequently refiled but only after Ms. Patterson was compelled to pay $500 to opposing counsel for their costs in the previously dismissed action.

Pursuant to the Procedures of the Arkansas Supreme Court Regulating Professional Conduct of Attorneys at Law, the formal complaint was sent to Mr. Simpson's address of record by

certified, restricted delivery mail on April 9, 1991. On May 2, 1991, the mailing was returned "Unclaimed". On june 5, 1991, the Committee's letter of suspension was sent to Mr. Simpson by certified. mail and was received on june 19, 1991. Mr. Simpson filed a written request for a hearing before the Committee which subsequently was scheduled for September 21, 1991. On September 20, 1991, Mr. Simpson requested., and was granted, postponement of the hearing for purposes relating to his reconsideration of the request for a hearing and his anticipated acceptance of the sanction imposed by the Committee.

By facsimile letter of November 7, 1991, he notified the Committee of his desire to decline a hearing in this matter.

JOE F. ATKINSON joe F. Atkinson of Fort Smith was issued a letter of reprimand for violation of Model Rules 1.1 and 8.4(d) as a result of the Arkansas Supreme Court's Per Curiam granting a motion to supplement the abstract on appeal. Mr. Atkinson, appointed to represent Herbert Wilson on appeal from the denial of an application of post-conviction relief, filed a brief which did not contain an abstract of the criminal information, the judgment and commitment order, the Rule 37 petition, or the trial court's order denying the petition. Those deficiencies were noted in appellee's brief, whereupon Mr. Atkinson filed a motion to supplement. The Court, in granting the motion, found the initial abstract to be flagrantly deficient. Mr. Atkinson did not rcspond to the complaint before the Committee.

CHARLES A. POTTER Charles A. Pottcr of Texarkana was suspended from the practice of law for a period of one year for violation of Model Rule 8.4(c) as a result of complaint by Jerry A. Rochelle.

The affidavit of Jerry A. Rochelle renected that he was the President of the Texarkana Bar Association. In the early part of 1989 Mr. Potter was appointed

continued on page 12

The business and legal affairs reporting of George Wells and Pamela Strickland These two veteran legal reporters, formerly with the Arkansas Gazette, bring our readers more than just the facts with daily thought provoking analytical essay found nowhere else.

In every daily issue, Wells and Strickland report the affairs of law, commerce and real estate from our professional audiences' point of view.

Every Friday, if you're a member of The Pulaski County Bar Association, you already receive the official weekly membership bulletin published inside The Daily Record. Discover what your missing the rest of the week with a 'ree trial subscription.

Daily Courthouse filings The Daily Record is the attorney's source for complete legal information.

Read what happens at the Pulaski County and Federal courthouses, including Circuit and Chancery Court. Review "published-firsf' public record information of foreclosures and notice of suits, satisfactions and all statewide bankruptcy and new corporation filings.

Get knowledgeable and quick reporting of specific Arkansas Supreme Court and Court of Appeals decisions and Attorney General's Opinions.

Agreat free trial offer for attorneys We're offering Arkansas Lawyer readers a special daily offer. We'll start sending you The Daily Record, everyday, for one month, FREE. After 30 days we'll send you an invoice for an annual subscription. If you choose not to subscribe, just return the invoice marked "NOT TAKEN." An annual subscription cost is only $95. Out of county, $135. (Pulaski County Bar Association members pay only $76. $108, out of county) Call 374-5103, FAX 374-1909 or write: The Daily Record, P. O. Box 1106 Little Rock, AR 72203.

George Wells

Pamela Strickland

DISCIPLINARY continuedfrom page 9 Chairman of the Miller County Law Library Committee. Monies derived from court costs were used to establish and maintain a Miller County Law Library Fund. During the time relevant to the

ACTIONS

In early December of 1990, Judge Goodson requested Mr. Rochelle to investigate what appeared to be some questionable expenditures and irregularities with regard to the library funds. Mr. Rochelle's inspection revealed that a check stub indicated that a check in

subsequently deposited into Mr. Potter's account at The Texarkana National Bank.

Check number 1650, drawn on the Miller County Law Library account, dated September 18, 1990, in the amount of 5399.99, payable to Charles A. Potter, was negotiated for "Reimbursement for binding machine". During a discussion

complaint, the office of Circuit Judge John Goodson exercised general superin.

the amount of 52,500, payable to Charles Potter, was drawn on the library fund

with Mr. Rochelle in December 1990, Mr.

tending authority over the library fund.

The checkbooks, bank statements and associated financial documents relating to library fund accounts at the State First National Bank of Texarkana were maintained for record keeping purposes in Judge Goodson's office. The funds were maintained in a checking account and a money market account with Mr. Potter as Committee Chairman, being the sole signatory on the accounts.

checking account on June 28, 1990, for the

Potter indicated a book binding machine had been purchased and was located at his office. The attorney was later requested to deliver the machine to the

purpose of acquiring a certificate of deposit. The corresponding canceled

check was dated September 5, 1990. and made payable to State First National Bank. The associated bank records revealed that the check was utilized on

September 5, 1990, to purchase a money

market account on June 28,1990. A money

the sum of 52,500, payable to Charles

order in a like amount, payable to Mr. Potter, was purchased with the funds from the money market withdrawal on the same date. It was deposited into his account at Texarkana National Bank on

Potter.

The

money

order

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STRIEGEL

PRf.5ENTATION GRAPHIcs

716 SOlJlli MAIN BROKEN ARROW, OK 74012 (918) 258-3536 FAX (918) 258-9353 ARKANSAS LAWYER

JANUARY 1992

Mr. Potter made a withdrawal in the amount of $5,000 from the library money

order from State First National Bank in

Color Your Courtroom.

12

law library and he did so.

Available bank records reflected that

was

June 29, 1990. On November 5, 1990, an 5800 withdrawal was made (rom the money market account, converted into a

bank money order, payable to Mr. Potter and was deposited the same date into his account at the Texarkana National Bank.

By letter of December 28, 1990, Mr. Rochelle, acting on behalf of the Texarkana Bar Association, notified the

attorney of the findings of the inspection of the library funds and requested any monies improperly withdrawn from the library funds be restored immediately. On

or about January 8, 1991, Mr. POller caused a cashier's check in the amount of

58,490.66 to be delivered to Mr. Rochelle.

The check, drawn on Thc Texarkana National Bank, showed both the remitter

and the payee as "Miller County Law Library", and that the funds were generated by closing a money market account. The Miller County Law Library Committee did not maintain such an account at The Texarkana ational Bank at thc time of this.

Mr. Pottcr's responsc, recited that, in

early 1989, he noticed the Miller County Law Library facility was poorly maintained and in considerable disorder. Upon making inquiry regarding the library's condition and after consultation with

Judge Goodson, he offered his services in reorganizing and maintaining the library.

Accordingly, a new Miller County Law Library Committee was named and Mr.

Potter was appointed Chairman. He expended considerable time and energy

DISCIPLINARY cleaning the physical facility and evaluating the condition and the sufficiency of the legal reference materials. He concluded that the library was deficient in available shelving for books and that additional legal reference material relating to Texas law was needed. The law library fund had accumulated a considerable surplus due, in part, to Mr. Potter's accepted suggestion to increase the fee levied as court costs, exemption of sales taxes, some recurring expenses for periodical materials, and other procedures implemented by him. On or about June 28,1990, he reviewed the fund's bank records and ascertained that an unnecessary amount of money was being maintained in the account and in a low interest savings account. He took a check from the checkbook and told the custodian of the checkbook that he was going to purchase a certificate of deposit.

At that same time Mr. Potter had planned a business trip to Houston and, in conjunction with that trip, had developed a few good leads for purchases of some used reference books and book shelves. If he were successful in arranging purchase of those items, he did not think the seller or sellers would accept a personal check on the Miller County Law Library.

Additionally, he could not acquire a cashier's check because the amount and the name of the payee were yet unascertained. Therefore, Mr. Potter withdrew $5,000 in the form of a cashier's check from the account referred to as the "savings account". Mr. Potter indicated that the proceeds were deposited into his escrow account with instructions to his secretary to wire transfer money through the bank for the anticipated purchases upon receiving his specific directions by telephone. He was unable to locate items suitable to the library's needs and, consequently, returned from Houston without making the purchases.

On September 5, 1990, Mr. Potter discovered in his jacket pocket the blank check with had been removed from the fund's checkbook on June 28, 1990, for the purchase of a certificate of deposit. He stated he knew that the Texarkana National Bank would not issue a certificate of deposit on a personal check so he made the check payable to State First National Bank for $2,500. Mr. Potter obtained a money order in that sum showing the remitter to be the county law

ACTIONS

library and himself as payee. He asserted that the money order was made out specifically in that manner for two reasons. Firstly, while State First National Bank personnel knew of his authority on behalf of the law library, none of the employees of Texarkana National Bank knew of that circumstance. Secondly, by designating himself as payee, there would be no question of what happened to the money or who was accountable. Intending to use the $2,SOO money order and the $5,000 previously deposited into his escrow account, he went to Texarkana National Bank on September 5, 1990, to purchase a certificate of deposit in the name of the Miller County Law Library.

The bank officer informed him that a federal 10 number would be required before issuance of a certificate to the law library. The attorney attempted to call Ms. Erwin, the judge's secretary and custodian of the library fund's financial records, to determine if the library had such an ID number, but he was unable to reach her. The bank offered to use Mr. Potter's social security number, but he declined because didn't want the library's money involved in his personal business.

Later that day, Mr. Potter had his secretary deposit the 52,500 money order into his trust account since he had already endorsed the money order. Mr. Potter did not have occasion to discuss this matter with Ms. Erwin until sometime later. He determined that additional surplus funds would be available shortly and he, apparently, decided to wait a while longer so that a 510,000 certificate could be purchased instead of one for $7,500.

Concerning the withdrawal of S800 on November 5, 1990, Mr. Potter stated that he had discovered some oak, glass-front, stack bookcases which could be purchased from a person who dealt in used furniture. Cash payment was required for the bookcases which would be delivered later to the library. He withdrew the money in the form of a cashier's check made payable to himself.

The instrument also showed Mr. Potter as the remitter, which was not his instruction to the bank. Mr. Potter endorsed the check and the person picking it up said he couldn't negotiate it because he didn't have a driver's license. Mr. Potter went to his bank, The Texarkana National Bank, cashed the check, paid the $800 to the vendor and received a written receipt.

Due to weather conditions and lack of

appropriate transportation the bookcases were not delivered.. Mr. Potter stated that he was so busy during November and December 1990, that he failed to notice the absence of the bookcases.

The attorney stated that a binding machine had indeed. been purchased for local lawyers' use in punching and binding briefs. When asked about the machine.by Mr. Rochelle, he explained that he had been appointed counsel for an indigent appellant and the machine was in use at his office for binding that brief, and would be delivered to the library.

Subsequent to his communications with Mr. Rochelle, he delivered a cashier's check in the amount of $8,490.66 to the Secretary /Treasurer of the Texarkana Bar Association. While Mr. Potter's response admitted cavalier handling of the funds and recognized possible negligence, he asserted that he had not violated the Model Rules of Professional Conduct.

The Committee on Professional Conduct noted that the response failed to provide copies of documents pertaining to certain of the bank transactions to which Mr. Potter had access. He did attach a copy of the check written to reimburse the fund and a copy of a receipt for book shelves. Inclusion of those other pertinent records would have greatly assisted the Committee in its consideration and adjudication of this matter. The Committee's Executive Director suggested to Mr. Potter that he supplement the response by prOViding copies of the relevant bank documents, but he declined to do so on the grounds of attorney Idient privilege.•

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PRESIDENT'S MESSAGE

Professional and Judicial Support

By James H. McKenzie

Visiting many county, regional and special interest bar associations has been a distinct privilege or me during the first half of the 91-92 year of the Arkansas Bar Association.

These meetings have shown me that the strongest fibers in the rope of jurisprudence are the lawyers and the judges. The deficiencies are in the lack of support for professionalism and the judicial branch of state government.

Before discussing the demands in these two areas, l must acknowledge how gracious the state and federal courts have been to me as your president. Two judges immediately come to mind as exemplifying this recognition of the Association.

Judge Elizabeth Danielson, in her investiture to the Court of Appeals, and U. S. District Judge Elsijane Roy, in the hanging of her portrait in the courtroom where she and her father have presided, included the Association in their ceremonies.

Chief Justice jack Holt and Chief Judge G. Thomas Eisele have provided the Bar Association with an open door policy to discuss the issues of our profession. Fruitful benefits are being reaped from this congeniality as exemplified by the judicial support for the Death 14

ARKANSAS LAWYER

JANUARY 1992

Penalty Resource Center. This was parlayed into gaining the consideration of Governor Bill Ointon who approved $50,000 of state matching funds for the Center to back a federal grant application for $310,000.

Professionalism starts with tradition. Bob Lindsey, Albert Graves, Governor Sid McMath, Harold Flowers, Chief justice john Fogleman and their counterparts throughout Arkansas continue to provide us with a rich heritage. The next ingredient is the acceptance of responsibility. The Arkansas legal profession has uniquely stepped forward to accept responsibility. In the communities of Arkansas, lawyers serve on boards, commissions and councils for cities, counties, educational institutions, libraries, hospitals, etc., largely without compensation. Attorneys in this state donate innumerable hours to the service of the impoverished.

A significant portion of our citizens still see the legal profession as more concerned wHh self interest than with public good. These people are not evil. They simply view us from their personal perspective.

Lawyers, like any other group, are judged by the action of some individuals in the group, and this

becomes a generalized evaluation.

When one lawyer violates the high standards of accountability, all lawyers are seen as dishonest and lacking in morals.

It is inherent that attorneys engender hostility. Trials are not games played for excitement that generate applause or compliments from the opponents. A losing litigant is certain to be provoked.

There is no expectancy that the adverse party will admire you as the lawyer for your client. A lawyer should not be so preoccupied with his "image" that his client's interest is sacrificed. However, practitioners of the law should not profit from means that are dishonest and immoral. We dare not use positions of power, authority and influence in ways that oppress or persecute others. The ethical practice of law is there public's order of the day. It is our responsibility to bring this into practice, an the point of beginning is strong discipline.

There are approximately 5,000 attorneys in Arkansas with 70% in private practice. Discipline of this large number is by the Supreme Court Committee on Professional Conduct that serves voluntarily and without compensation. The Comm-

ittee's staff is composed of only an Executive Director and a secretary.

This demonstrates that there is not the appropriate priority being placed on our professional discipline.

Therefore, the Association's Committee on Professional Ethics and Grievances, chaired by Bill Allen, has been asked to intensely study attorney discipline procedures and make recommendations to the House of Delegates. Hopefully, the Association, through its deliberate decision making process, will reach a consensus and authorize petitioning the Supreme Court for a disciplinary procedure that will instill more affirmative professionalism.

The Arkansas judicial branch needs more support. When the trial court filings are categorized as criminal, civil, chancery, probate and juvenile, there were approximately 6,000 less civil cases filed in the statistical year 1989-90 than in 198788, bu t the total filings increased from 127,000 to 140,000. The most dramatic increases were in chancery court where the increase was by 13,000 cases. The support for the trial judges of this state charged to adjudicate these cases is not on a parity. The judges in some districts have full staff to include secretary, case coordinator and law clerks. In other districts trial judges have no staff other than a court reporter. The inequality also exists in office technology and library availability.

At the Court of Appeals, a crisis is readily recognized. The appeals to this court in 1989-90 numbered 1,096, for an increase of 22% in two years.

On an average each judge wrote 105 opinions in 1989-90, but still the number of cases carried over to the next term was 710 or 13% increase from 1988-89. If 1% of the 1400,000 trial court filings are appealed to the Court of Appeals, the cases load at the appellant level will increase another 28%. The result of this botUeneck at the appellant level will be delayed disposition of cases which brings to life the cliche that justice delayed is justice denied.

The Arkansas Bar Association has

for years been active in the legislative process for law reform and the administration of justice, and well it should be. The Association is in a position to identify when and where changes are needed. It is a forum to exchange informa tion and ideas on the needs of jurisprudence.

It has the capacity to analyze proposed legislation and provide technical advice. This must be done now in preparation for the next session of the Arkansas General Assembly.

The Association's responsibility is to become a prominent innovator for increased support for our judiciary and enhancing professionalism.

Without reservation, I urge all of the members of the Association to devote the thought and energy necessary for the Association to become a prominent innovator for enhancing professionalism and support for the judiciary in Arkansas.•

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enter into a contingent fee contract for collection of payments which are due pursuant to such decree or

More than 130 years ago the Arkansas Supreme Court rejected common law precedent and held that an Arkansas attorney could charge a legal fee contingent on the results of litigation. Lytle v. State, 17 Ar~. 608 (1857). The court's current posItion IS set out in Rule of Professional Conduct 1.8(j), which bars an attorney from acquiring "a proprietary interest in the cause of action or the subject matter of litigation the lawyer is conducting for a client" but permits an attorney to "contract with a client for a reasonable contingent fee in a civil case." Despite this longstanding judicial endorsement of contingent legal fees, charging and collecting a contingent fee can still present problems for the Arkansas lawyer.

Charging a Contingent Fee in a Domestic Relations Matter Contingent fees are not permitted in all cases. Arkansas Rule of Professional Cond uct 1.5(d)(l) prohibits charging a fee in a domestic relations matter contingent upon securing a divorce or upon the amount of alimony, support, or property settlement recovered for the client. This ban was JusllfJed In McDearmon v. Gordon & Gremillion, 247 Ark. 318,445 S.w.2d 488 (1969), on the grounds that public policy favors reconciliation of the parties, and an attorney whose fee is contingent on results may discourage a reconciliation. The court also cited a California decision for the proposition that "the usual justification for contingent fee contracts, that they assure legal 16

ARKANSAS lAWYER

JANUARY 1992

order."

representation which otherwise would not be available, does not apply to divorce causes, where the party without funds can be awarded attorney's fees by the court." 247 Ark. at 328, 445 S.W.2d at 494, quoting from Krieger et al. v. Bulpitt, 40 Cal.2d 97,251 P.2d 673 (1953).

Rule 1.5(d)(l), as originally adopted by the Arkansas Supreme Court in 1985, did not contaIn a property-pursuit exception. Once the marital relationship has been dissolved, the public interest in a reconciliation no longer precludes a fee contingent on collecting the property or support awarded to a party in the divorce decree. The court's 1990 amendments to Rule 1.5(d)(1) recognized this by adding the proviso that "after a final order or decr i n r an m rna

Charging a Contingent Fee in a Criminal Cases Contingent fees are also barred in criminal cases. Arkansas Rule of Professional Conduct 1.5(d). DR 2106(C) of the Arkansas Code of Professional Responsibility, which governed Arkansas attorneys from 1969 to 1985, expressed a similar prohibition.

A variety of reasons, most of them unconvincing, have been advanced for prohibiting contingent fees in criminal cases. According to EC 2-20 of the Arkansas Code of Professional Responsibility, "Public policy properly condemns contingent fee arrangements in criminal cases, largely on the ground that legal services in criminal cases do not produce a res with which to pay the fee." This argument ignores the fact that a client is certainly better able to pay his attorney if he is free and working. The res argument also loses much of its force in prosecutIOns under Criminal Enterprise Statute (21 U.s.c. 848), the Racketeer Influenced and Corrupt Organization Act (18 U.S.c. 1961-1968), in which a convicted defendant loses not only his freedom but also any property derived from his criminal activities.

If the client who is acquitted gets to keep property, then there is a res from which a contingent fee can be paid.

A second justification often cited for the ban on contingent fees in

criminal cases is the "danger of corrupting justice" that exists when an attorney is paid only if he secures an acquittal or a reduced sentence.

This was the holding of Peyton v.

Margiotti, 398 Pa. 86, 156 A.2d 865 (1959), which was cited with approval in note 90 of DR 2-109(C) of the Arkansas Code of Professional Responsibility. The proponents of this justification have never satisfactorily explained why criminal defense attorneys are more corruptible than their civil counterparts. Charles W. Wolfram, Modern Legal Ethics 9.4.3 (1986).

The most persuasive explanation for the ban on contingent fees in criminal cases is that most criminal defense attorneys probably prefer a system where fees must be paid in advance and lawyers cannot compete by advertising contingent fees. So long as the ban is supported by the attorneys most directly affected by the ban, the organized bar is unlikely to push for its abolition. Thomas D. Morgan, The Evolving Concept of Professional Responsibility, 90 Harv. L. Rev. 702, 734 (1977); Restatement of the Law Governing Lawyers 47, comment c (Tentative Draft No.4, 1991).

Collecting under an Oral Contingent Fee Agreement An attorney may be denied a share of his client's recovery if he fails to secure the client's written agreement to paying a contingent fee. Although Arkansas law permits oral fee agreements in most situations, Equifax, Inc. v. Luster, 463 F.5upp. 352 (E.D.Ark. 1978), aff'd, Arkansas Louisiana Gas Co. v. Luster, 604 F.2d 31 (8th Cir. 1979), cert. den., 445 U.5. 916 (1980), Arkansas Rule of Professional Conduct 1.5(c) requires a contingent fee agreement to be in writing.

Because the writing requirement has only been in effect for five years, the consequences of failing to obtain a written fee agreement are unclear.

The most likely sanction for violation of Rule 1.5(c) is indicated by two reported cases in which the supreme court invalidated contingent fee agreements. The attorneys were denied a contingent fee but were awarded compensation based on the

value of services actually performed.

McDearmon v. Gordon & Gremillion, 247 Ark. 318, 445 S.W.2d 488 (1969); Johnson v. Rolf, 208 Ark. 554, 187 SW.2d 877 (1945).

According to Rule 1.5(c) the written fee agreement must: (S)tate the method by which the fee is to be determined, including the percentage

or percentages that shall accrue to the lawyer in the event of settlement, trial or

appeal, litigation and other expenses to be deducted from the recovery, and whether such expenses are to be deducted before or after the contingent fee is calculated.

Any ambiguities in the written agreement about the treatment of expenses will likely be resolved against the attorney. Vaughn v.

Humphreys, 153 Ark. 140,239 S.W. 730 (1922) illustrates the collection problems that can arise if the fee agreement fails to spell out how the contingent fee is to be calculated.

There, the client agreed to pay his attorney 40 percent of the amount recovered from a life insurance company. The client was awarded the face amount of the policy, accrued interest, statutory penalty, and an attorney's fee. In a later dispute between the attorney and his client, the attorney argued that he was entitled to all of the attorney's fee plus 40 percent of the other items of recovery. The supreme court disagreed and limited the fee to 40 percent of the entire amount recovered for the client. Similarly, in Sanders v. Cotton, 136 Ark. 212, 206 SW. 313 (1918), the contract provided for a fee of one-half the recovery.

After recovering an amount for his

client plus his own travel expenses, the attorney argued that he was entitled to half the amount recovened for the client plus his own travel expenses. The court determined that the fee was one-half of an amount that included the travel expenses.

Both disputes could have been avoided if the fee agreement had indicated that the contingent fee was in addition to any legal fees or expenses recovered by the attorney.

Collecting a Contingent Interest in Real or Personal Property Whose Ownership is an Issue before the Court Does Arkansas Rule of Professional

Conduct 1.8(j)'s admonition that a "lawyer shall not acquire a proprietary interest in the cause of action or subject matter of litigation the lawyer is conducting" mean that an attorney hired to obtain or defend title to real or personal property cannot take an interest in the property to payor secure the payment of his fee? A client's agreement te convey an interest in property to his attorney upon the successful conclusion of an action to recover or defend title to the property is probably indistinguishable from a contingent fee arrangement in a suit seeking money damages. Several supreme court opinions involve such agreements, and the court's failure to condemn the agreements suggests that the practice is permitted by the contingent fee exception to Rule 1.8(p. Brown v.

Kennedy Well Works, Inc., 302 Ark. 213, 788 SW.2d 948 (1990); Jarboe v. Hicks, 281 Ark. 21, 660 S.W.2d 930 (1983); Turner v. Wiederkehr Village, 261 Ark. 72,546 S.W.2d 717 (1977); Baxter Land Co. v. Gibson, 236 Ark. 664, 367 SW.2d 741 (1963).

On the other hand, accepting legal title to property prior to and during litigation involving that property probably does violate Rule 1.8(jl. An attorney who owns a present interest in property whose title is an issue before the court may be a necessary party under Arkansas Rules of Civil Procedure 19. The practice also confuses the role of attorney and client because as an owner of the property, the lawyer has a basis for controlling the litigation in his own right and not merely as the legal representative of the owner. Restatement of the Law Governing Lawyers 47, comment (Tentative Draft No.4, 1991).

Collecting a Contingent Fee when Third Party Shares in Recovery.

An attorney may encounter problems collecting a contingent fee when a third person shares in the recovery. For example, in Consolidated Underwriters of South Carolina Ins. Co. v. Bradshaw, 136 F.Supp. 395 (W.D.Ark. 1955), the attorney was retained on a contingent fee basis by the owner of mortgaged property to recover insurance proceeds for fire

loss to the property. The mortgagee of the property, to whom a portion of the proceeds were paid under the loss payee clause of the policy, was not required to contribute to the atlorney's fee. Fortunately for the attorney, the court based the fee owed by the client on entire amount recovered from insurance company, because the client obviously benefited from the discharge of the mortgage.

Brewer v. Lacefield, 301 Ark. 358, 784 S.W.2d 156 (1990), illustrates the potential fee collection problems in a wrongful death action. There, the widow of the decedent, in her capacity as personal representative of the decedent's estate, retained an attorney to pursue a wrongful death action and agreed to pay the attorney one-third of all money and property collected in the action. Two children of the decedent by a former marriage retained a different attorney to protect their interests in the wrongful death action and agreed to pay him one-third of their recovery. Both attorneys actively participated in the trial of the action which resulted in a

net recovery of some $115,000. The widow proposed to pay her attorney one-third of the total recovery and then split the remaining recovery onethird to herself and two-thirds to the two children. The children naturally argued that the total recovery should first be split one-third to the widow and two-thirds to the children, and that each atlorney should then be compensated out of the share going to his client. The supreme court sided with the widow (or rather with the widow's attorney) based on the language of the Arkansas wrongful death statute, which makes it the duty of the personal representative, not the beneficiaries, to choose an atlorney to pursue a wrongful death claim. Ark. Code Ann. 16-62-102(b) (1987). The beneficiaries were free to hire their own counsel to protect their interests, but the beneficiaries' atlomey was not entitled to fees on that portion of the total wrongful death award attributable to the beneficiaries.

Although not decided by the court, the beneficiaries' attorney was presumably entitled to one-third of

•

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the net amount flowing to the beneficiaries after deduction of the amounts due the widow and her attorney.

There have been a number of Arkansas cases in which an attorney has recovered an amount for personal or property injury suffered by his client only to have an insurance carrier with subrogation rights claim a share of the recovery free and clear of any contingent fee. Ark. Code Ann 11-9-410 (1987) recognizes the right of an employee who has recovered worker's compensation for job-related injuries to pursue claims against a third-party tort-feasor. However, the statute subrogates the employer and lhe employer's carrier to the extent of two-thirds of the employee's net recovery "after payment of the reasonable costs of collection" for the repayment of any worker's compensation benefits paid to the employee. The courts have frequently grappled with whether reasonable costs of collection include the contingent fee paid to the employee's attorney to pursue the third party claim.

If the employer or the employer's carrier hires an attorney who actively participates in the action against the third party, the courts have limited the employee's attorney to a fee based on his client's one-third share of the recovery. In Orintas v. Meadows, 17 Ark. App. 214, 706 SW.2d 199(986), the employee's attorney and the employer's attorney together settled a claim against a third party tortfeasor for $50,000. The court ruled that the employee's attorney was entitled to a contingent fee based on $16,667 (the one-third of $50,000 recovered by the employee), not the entire $50,000 recovery.

On the other hand, if the employer or carrier accepts "the benefits of the services of the employee's attorney without any necessity for the employment of an attorney by it or (chooses) to depend on the efforts of the employee'S attorney without taking part in the proceedings whatever", Burt v. Hartford Ace. & Ind. Co., 252 Ark. 1236,483 S.W.2d 218 (1972), the employee'S attorney is

entitled to a contingent fee based on the total recovery including the share going to the employer or carrier.

Special problems arise when the same insurance carrier provides worker's compensation coverage to the employer and liability coverage to the third party tortfeasor because the carrier is seeking to recover from itself, as liability insurer of the tortfeasor, for benefits paid by it, as worker's compensation carrier. In Winfrlt!f & Carlisle v. Nickles, 223 Ark. 894,270 S.W.2d 923 (1954), the carrier hired one law firm to resist the employee'S claim against the tortfeasor and a second taw firm to assert its subrogation rights in any proceeds recovered from the tortfeasor. Following a successful recovery from the tortfeasor (which was paid by the carrier) a dispute arose over whether the contingent fee of the employee'S attorney should be based on the entire recovery or only the one third of the recovery paid to the employee. Reasoning that the carrier's heart was really on the side of the tortfeasor and tha t the carrier's second law firm could not have been of much assistance to the employee's attorney, the court based the contingent fee of the employee'S attorney on the total recovery, not just the portion allocated to the employee.

The opposite result was reached in Burt v. Hartford Ace. & Ind. Co., 252 Ark. 1236,483 S.W.2d 218 (1972).

There the employee denied that the employer's carrier had any claim to the proceeds of the third party action and objected to the carrier's attempt to intervene in the third party action to protect its subrogation rights.

Because the carrier was forced to employ its own counsel to protect its interest, it was not required to pay the employee'S attorney a contingent fee on its portion of the recovery.

Subrogation problems also arise when an insurance carrier compensates its own insured for injury suffered through the negligence of a third party tort-feasor, and the insured then hires an attorney on a contingent fee basis who recovers damages for the same injury from the tort-feasor. When it makes payments

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acquires subrogation right to the extent of the payments. Whether the insured's attorney is entitled to a contingent fee on that portion of the recovery going to the carrier turns on the language of the agreement or statute conferring subrogation rights.

In Washington Fire & Marine Ins. Co. v. Hammett, 237 Ark. 954, 377 SW.2d 811 (1964), the subrogation agreement did not preclude the insured from filing suit against the tort-feasor and did not require the insured to notify the carrier if he did file suit. Because the carrier had benefited from the work done by the insured's attorney, it was required to bear its share of his contingent fee. The court noted, however, that if the carrier had employed its own attorney and actively participated in the action against the tortfeasor, it could not have been compelled to contribute to the fee due the insured's attorney.

A similar result was reached in Commercial Standard Ins. Co. v. Combs, 249 Ark. 533, 460 SW.2d 770 (1970), where the carrier was subrogated

only to the extent of the property damage sustained by the insured. The carrier refused to cooperate in the insured's lawsuit against the tortfeasor, but after the insured recovered damages for both personal and property injury, the carrier asserted its subrogation rights in the property damage award free of the contingent fee due the insured's attorney. The supreme court awarded

a contingent fee based on the total award, in effect requiring the carrier to share with the insured a proportionate portion of the contingent fee.

In Courtney v. Birdsong, 246 Ark. 162, 437 S.W.2d 238 (1969), the insurance' company was not required to bear a share of the contingent fee paid the insured's attorney, but at the expense of the insured, not the attorney. There the insurance company advanced the insured $1,797.90 "as a loan," and the insured agreed to repay the advance "to the extent of any net recovery" from other persons. The insured's attorney, who was unaware of the advance or

the subrogation agreement, settled his client's claims against the tortfeasor for $5,000 and received a 50 percent contingency fee of $2.soo. The insured argued that his liability to the insurance company under the subrogation agreement was $1,797.90 less a 50 percent attorney fee, but the court found that he had agreed to reimburse the company the entire $1,797.90 advance out of his "net recovery" of $2.soo.

Since the enactment of no-fault insurance in 1973 automobile liability poEcies issued in Arkansas have been required to provide medical, income disability, and accidental death benefits to the named insured, his family members, and passengers in the insured vehicle. Ark. Code Ann 23-89-202 (1991 Supp.). If the recipient of medical or income disability benefits under 23-89-202 recovers in tort from a third party, the insurance carrier is entitled to be reimbursed for such benefits out of the tort recovery, but "all costs of collection thereof shall be assessed against the insurer and insured in the proportion each

benefits from the recovery." Ark. Code Ann. 23-89-207 (1987). Cases interpreting this language have uniformly held that the insurance company must bear its proportional share of any contingent fee due the insured's attorney. Northwestern Nat. Ins. Co. v. American Stiltes Ins. Co., 266 Ark. 432, 585 SW.2d 925 (1979); Baker v. State Farm Fire & Cas. Co., 34 Ark. App. 59, 805 S.W.2d 665 (1991); National Investors Fire & Cas. Ins. Co. v.

Edwards, 5 Ark. App. 42, 633 S.W.2d 41 (1982). In Daves v. Hartford Ace. & Indem. Co., 302 Ark. 242, 788 S.W.2d 733 (1990>, the court felt constrained to follow the statute even though the insured did not notify the carrier so that it could intervene in the third party action and forced the carrier to sue to enforce its right to reimbursement. If the insurance carrier does intervene and actively participate in the prosecution of the insured's claim against the third party, the language of the statute seems to require each party to bear its share of collection costs, which means that any contingent fee due the

insured's attorney is based on his client's share of the recovery.

Collecting a Contingent Fee When Client Discharges Attorney and Retains New Attorney A recurring question concerns the appropriate fee due an attorney who is retained on a contingent fee arrangement and then discharged by the client. Because a discharged attorney usually invokes the Arkansas Attorney Lien Law, Ark. Code. Ann. 16-22301-304 (1991 Supp.), the language of that statute has strongly inOuenced the law in this area.

Early cases treated breach of a contingent fee contract like a breach of any other contract. The attorney who was wrongfully discharged was entitled to recover damages equal to the agreed fee (i.e., the agreed percentage times the amount ultimately recovered by the client) less any expenses the fired attorney would have incurred had he continued to represent the client.

Berry v. Nichols, 227 Ark. 297, 298

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S.W.2d 40 (1957); Bockman v. Rorex, 212 Ark. 948, 208 S.w.2d 991 (1948); Brodie v. Watkins, 33 Ark. 545 (1878).

These cases were overruled by Henry, Walden and Davis v Goodman, 294 Ark. 25, 741 S.W.2d 233 (1987), which held that the discharged law firm was entitled to be compensated on a quantum meruit basis, determined by taking into account the amount of time and labor involved, the skill and ability of the attorney, and the nature and extent of the litigation. The court concluded that the discharge of an attorney was not a typical breach of contract because a client has the right to discharge his lawyer at any time, with or without causc. Comment to Arkansas Rule of Professional Conduct 1.16.

The 1989 General Assembly responded by reenacting the Attorney Lien Law and coupling with it an unusual declaration that the holding in Henry, Walden, & Davis v. Goodman was contrary to the law. Act 293 of 1989 Arkansas General Assembly, codified as Ark. Code. Ann. sec. 1622-301-304 (1991 Supp.). Act 293 specifically provides that an attorney has a right to rely on his contract with a client and to obtain a lien based on that contract.

Although the legislation is arguably an unconstitutional infringement on the power of the supreme court to regulate the conduct of attorneys, the court recognized the validity of the legislation in Lockley v. Easley, 302 Ark. 13,786 S.W.2d 573 (1990). There the client agreed to pay an attorney a one-third contingent fee to recover amounts due under a divorce decree from the client's former husband.

After the attorney filed a petition to show cause, the husband offered $6,000 in settlement. The client then instructed the attorney to dismiss the petition. The attorney dismissed the petition and billed the client $297.50 to cover his time and expenses. After learning that the client had accepted a $6,000 settlement from her exhusband, the attorney sued and recovered judgment of $1,702.50 (a onc-third contingent fee of $2,000.00 less the $297.50 previously paid by the client). The court upheld the

judgment noting that its holding in Henry Walden, & Davis v. Goodman had been overturned by Act 293.

An attorney who is discharged by a client cannot claim a contingent fee if he agrees at the time of discharge to be compensated on some other basis.

In Haskins Law Firm v. American Nat. Property and Casualty Co., 304 Ark. 684, 804 S.W.2d 714 (1991), the discharged attorney initially agreed to a contingent fee of one third of all sums recovered, but accepted an offer from the second attorney of $4,000 to cover his time and expenses prior to discharge. The client's claim was settled for $50,000, and when the second attorney refused to pay the $4,000, the first attorney sued the client, the second attorney, and the other party's insurance carrier for $16,667, or one third of the $50,000 recovery. The supreme court limited the first attorney's fee to $4,000, ruling that he had waived his right to a contingent fee in exchange for a liquidated amount. The court distinguished Lockley, which did not involve a substitution of counselor an agreement to accept an amount different from a contingent fee.

Collecting a Contingent Fee When Client Settles Claim Without Attorney's Consent If he has properly perfected a lien under the Arkansas Attorney Lien Law, an attorney whose client settles without his consent can proceed against the client, against the other party who settled with the client, or against the other party's attorney.

Ark. Code Ann. 16-22-303 (1991 Supp.) The measure of recovery is different in a suit against the client versus a suit against the other party or the other party's attorney.

In Cato v. Arkansas Mun. League Mun. Health Benefit Plan, 285 Ark. 419, 688 S.W.2d 720 (1985), the clients retained an attorney on a 40 percent contingent fee basis to recover hospi tal expenses of $26,206 from a health insurance carrier. After the attorney filed suit, the insurance carrier settled directly with the hospital for $13,103, or 50 cents on the dollar. The clients amended their

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(901) 685-2120. action to allege that the carrier owed them attorney fees equal to 40 percent of the original $26,206 claim, and the trial court agreed. On appeal the supreme court distinguished a suit against a client who settles without notice to the attorney from a suit against the other party litigant who settles without notice to the attorney.

In a suit against the client, or against the client and a third party, the attorney can recover a fee based on the contingent fee agreement with the client. But if the attorney proceeds only against the other party, he is entitled to a "reasonable fee" which is not necessarily limited by the amount of the settlement. Ark. Code Ann. 1622303(bXl). The Court then remanded the case and directed the trial court to set a reasonable fee on quantum meruit basis.

The holding of Cato was apparently not changed by Act 293 of 1989. Act 293 purports to overrule only Henry, Walden. & Davis v. Goodman, which involved a suit against a client who had discharged his attorney. In addition, the Cato holding is based on statutory language which was reenacted bv Act 293. See Ark. Code

Ann. 16-22-303(b)(1) (1991 5upp.)

In many cases in which the attorney proceeded against the other party, rather than the dient, the rule allowing the attorney to recover a "reasonable fee" rather than a contingent fee appears to have been advantageous to the attorney.

The attorney was required only to show the work he actually performed for the client. He was not required to shoulder

all sums collected); Slayton v. Russ, 205 Ark. 474, 169 5.W.2d 571 (1943)(authorized fee of $318, when settlement was for SSO and contingent fcc arrangement provided for 50 percent of all sums collected). In a few cases a "reasonable fee" turned out to be less than a contingent fee. Whetstone v. Travis, 223 Ark. 856, 269 5.W.2d 320 (1954) (authorized fee of $175, when settlement

the more onerous burden of showing how

was

much he might have recovered for the client, and he was not limited by the amount actually recovered by the client, which was probably less than the attorney might have obtained. See, e.g., Jarboe v.

Hicks, 281 Ark. 21, 660 S.W.2d 930 (1983)(authorized fee of 5700, when settlement was for $1,000 and contingent fcc agreement provided for 40 percent of recovery); St. Louis Southwestern R. Co. v.

Poe, 201 Ark. 93, 143 5. W.2d 879 (1940)(authorized fee of $1,500, when settlement was for $1,000 and contingent fcc agreement provided for SO percent of recovery); St. Louis-San Francisco R. Co. v.

Hurst, 198 Ark. 546, 129 5.W.2d 970 (1939)(authorized fcc of $500, when settlement was for $100 and contingent fee agreement provided for SO rcent of

arrangement provided for 50 percent of recovery); Holland v. Harley, 206 Ark. 244, 174 S.W.2d 567 (1943)(authorized fee of $150 where suit sought $1,185).

The attorney's remedies are uncertain when the client releases his claim against a third party without receiving any consideration in return. In Missouri Pac. Transp. Co. v. Guerin, 200 Ark. 755, 140 5.W.2d 691 (1940), a passenger allegedly injured by the railroad agreed to pay an attorney one-half of any amount recovered. After suit was filed, the railroad obtained an affidavit from the client stating that he was injured in a tavern brawl and that he wanted to dismiss the action. The supreme court denied the attorney a fcc because the client received no consideration for

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dismissing the action. Shortly after the decision in Guerin, the 1941 General Assembly liberalized the Lien Law by adding language, now codified as Ark. Code Ann. 16-22-303(a) (1991 5upp.), which authorizes a fcc in the event of: Any agreement. contract, or arrangement between litigants or any conduct of the one seeking afHnnative relief ... which deprives the litigant of his asserted right against his adversary.

This language suggests that an attorney is entitled to recover a fee even if the client decides to dismiss the case without any recovery. In Myers v. Muuss, 281 Ark. 188, 662 S.W.2d 805 (1984), however, the supreme court concluded that the 1941 legislation did not overturn the result in Guerin and denied an attorney a lien based on his time and expenses because the attorney was unable to show any recovery to which his lien might attach.

It is not clear from these cases whether the attorney could have proceeded against his client on a simple contract theory. In both cases the attorney was seeking to enforce his rights under the Attorney's Lien Law. The court in Myers v. Muuss acknowledged that the attorney might be entitled to a fcc on a contract theory but declined to rule on the issue because the attorney failed to assert it. Compare, Martin v. Pope, 226 Ark. 522, 290 5.W.2d 849 (1956); Hamm v. Howard, 216 Ark. 326, 22S 5.W.2d 333 (1949).• L. Scott Stafford is a Professor at the

University of Arkansas at Little Rock School of LAw. This artide was made possible through a grant from the Arkansas Bar Foundation.

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ARKANSAS LAWYER

JANUARY 1992

Postcards from the Edge?

Presidential hopeful Governor Bill Clinton gets a little help from his friends.

Inquiring minds want to know. .. So we asked some of you around the state what effect you thought a Clinton presidency would have on the legal system in Arkansas.

Here's a sampling of the answers we received: 'I Ihink the nation's voters will do a great day's work if they elect Bill Clinton President. I think the legal system will get a shot in Ihe arm .

-- certainly the quality of federal judicial: appointments will rise. Clinlon will have a . much higher caliber of appointmenls. He has a more compassionate stance loward Ihe effect of the law on the people -- his appointments will reflect fhis."

Wendeft L. Griffen

'I think it would be great for Ihe legal, profession in Arkansas, because hall of Ihe , allorneys would head to Washinglon seeking . appointments and leave us Republicans here 10 . do business."

Asa Hutchinson

'Bill Clinton has an appreciation of the right 10 trial by jury and may be a real champion of the seventh amendment."

Winslow Drummond

'The criminal justice syslem? I don't Ihink 'Gol'llrnor Clinton has been supportive of the Death Penalty Resource Cenfer. This reflects his he knows what it is." sensitivily to a criminal juslice system that calls Preferring to Remain Anonymous for afair trial and appeal. This will result in less ; lime and money being consumed in the final ' disposition of acriminal case."

Jim McKenzie 'President Bill Clinton would have the opportunity to implant his judicial philosophy "Firsl of alt. I Ihink it would be literally in our legal syslem by his appointments 10 the impossible to imagine Bill Clinton being elected federal bench. Voters too often give the President, but if, in fact, he were, Ilhink we enormous importance of these appointments would see a drastic shift from conservalive to shorl shrift in a presidential campaign. liberal on the federal bench, and I don't think Presidents come and go, but Iheir judicial Ihat would be good for the country." appoinlees profoundly affect society for Sheffield Nelson decades."

Justice Robert L. Brown , I Ihink Mr. Clinton is well aware of the problems Ihat are present in our judicial system and of the means that will be necessary 10 resoll'll them. I would hal'll complete confidence Editor's NoIe: No, we're nol Pd}'ing specidl affenlion in him as President and in his ability to appoint to Governor Clinton If any other Arkansas lawyer the right persons to the federal bench. I beliel'll shoold run for Presidenl, we'll run something on her if he were President, we would hal'll a period of or him with great expediency. None of Ihe comments above in any way represent the thoughts time where judges of the highest caliber would , or opinions of the editorial staff of The Arkansas be appointed to Ihe bench." . uwye' or the Arkansas Bar AsSOCiation.

Dr. Robert A. Letlar

YOUNG

LAWYERS'

SECTION

COLUMN

Lawyer Professionalism on the Decline?

By Lynn Williams

One of the perks of my office is the opportunity to travel to conferences of young lawyers across the country.

In the last ten months, I have been to Seattle, Phoenix, Atlanta, Richmond and Houston. The one issue that is predominate is the perception that lawyer professionalism is on the decline.

I tend to concur with the perception. In my past eight years of practice, I have noticed a decline in collegiality between members of the bar. Increasingly, I receive notices of hearings or depositions without the courtesy of a phone call to select a date suitable to all concerned. I have seen positions taken by members of the bar that I accord with sufficient intelligence that the only reason to take such a position is for lucre and not the administration of justice.

Lawyer advertisements become more distasteful every day.

We must recognize this problem.

The public has. Despite your political inclinations, the most discussed speech regarding lawyers is Vice President Quayle's speech to the American Bar Association's annual meeting in August in Atlanta.

Politicians certainly have the ability to read polls and push hot bottom 24

ARKANSAS LAWYER

JANUARY 1992

issues. Vice President Quayle is no different.

Also in Atlanta, I was introduced to a new group called HALT (Help Abolish Lawyers Tyranny). They came to protest lawyers. They fail to see the need for us. If they cannot get rid of us, they intend to end our days of self regulation. Our counterparts from Texas are scared to death of these people. Recently HALT sponsored legislation to require 20 hours of mandatory pro bono work by every lawyer in Texas or a check for $2,500.00 to pay for someone else to do it. Fortunately, it failed.

In California, their legislature just defeated legislation to allow paralegals to do "simple divorces and other simple legal matters." Missouri and Virginia now require professionalism and ethics training for new admittees of their bars. Other states are pondering similar actions.

Private industry is taking note. I have heard from in house corporate counsel from Ford Motor Company and Reynolds Aluminum. They intend to expand their own in house legal departments, including litigation to avoid outside counsel.

Additionally they intend to scrutinize billing. They do not intend to pay 50

cents per page for copies. They intend to budget the number of hours involved in a case and control who, (partner or associate) works on their cases more.

Lawyers are not totally at fault. I recently attended an insurance seminar here in Arkansas. I heard the senior adjuster for one of this state's largest insurance carriers say that they hired a certain lawyer not because he was the nicest or the most professional lawyer, but because he was the exact opposite. He further explained that such a characteristic was more important in the selection of an attorney than talent and ability.

I have had clients tell me after a trial in which they received everything they prayed for that they we dissatisfied with the representation because I "didn't bloody up the other side. "

We must act to change this perception. It is not a problem of the young bar versus the senior bar; big firm versus solo practitioners; plaintiff versus defendant bars; It is all of our problem. If we don't the public will. I do not think we will like the result. _

IN

ROBERT S. LINDSEY Robert Sours Lindsey, 87, a partner in the Little Rock law firm of Wright, Lindsey & Jennings, died in December, 1991. Lindsey was a member of many professional and civic organizations, including the American Bar Association, American Judicature Society, American Counsel Association and the Pulaski County Bar Association. He was a Past President of the Arkansas Bar Association, Chainnan of Executive Committee and Executive Council and a former member of the Board of Ferncliff Inc., the Salvation Army, the Arkansas Mental Health Association and the Pulaski County Cancer Society. He was a member of Second Presbyterian Church.

Lindsey had received the Outstanding La wyer Awa rd a nd La wyer-Ci tizen Award of the Arkansas Bar Association and the Lawyer Award of the Pulaski County Bar Association. He served as Chairman on the Arkansas Merit System Council and as Trustee for the University of Arkansas Law School, Austin Presbyterian Theological Seminary and Doctors Hospital.

Survivors are his wife, Grace Edith Grimme Lindsey, a son and a daughter._

MEMORIAM

of Appeals, died in September, 1991. She was a partner, along with her husband, in the Jonesboro law firm of Penix, Penix & Lusby. Penix had served as U.S. Magistrate for the Jonesboro Division of the U.S. District Court for about 30 years,.

She also served on Court of Appeals.

She was a member of First United Methodist Church and a leader in the Jonesboro Junior Auxiliary.

Penix is survived by her husband, a son and two daughters. _

JAMES CHERRY James Wesley Cherry, 75, of Little Rock, died in September, 1991. He was a retired adjudication officer with the Veterans Administration in Shreveport, La., Houston, Texas, and Little Rock for 43 years. Cherry was a Marine veteran of World War II, a founding member of the Texas Bar Association, a member of the Arkansas Bar Association, the American Bar Association, Trinity United Metho-

MARIAN F. PENIX Marian F. Penix, 67, of Jonesboro, the first woman to sit on the Arkansas Court

MILTON G. ROBINSON Milton Guinne "Buster" Robinson, 79, of Stuttgart, a retired lawyer and municipal judge, died in September, 1991. He was a Navy veteran of World War II, a member of the Arkansas Bar Association and was licensed to practice before the U.S. Supreme Court in 1975.

He was elected a municipal judge for the city of Stuttgart in 1952 and served through 1964.

Robinson was a member of Euclid Lodge No. 130 and Disabled American Veterans. He was a Scottish Rites Mason, a Shriner and a former member of the Stuttgart Lions Club. He was a member of Grand Avenue Methodist Church.

Survivors include his wife, Maylene Robinson, a daughter and a brother. â&#x20AC;˘

You can1t get closer to the isues than this.

At Lawyers Cooperative Publishing, we knOW' our analytical legal research system is not complete without one vital link - our field representatives. They know what's available, what's affordable, and what resources will be of the greatest value to your practice, given your needs and market

J. GAYLE WINDSOR, JR. J. Gayle Windsor, Jr., 71, of Little Rock, died in September, 1991. Windsor, a la wyer, served 20 years in the Arkansas House of Representatives and helped sponsor legislation that enabled construction of the Statehouse Convention Center and the 1979 Uniform Child Custody Act. Windsor served on the legislative committee of the Employment Security Advisory Council and represented. the Arkansas State Chamber of Commerce and Associated Industries of Arkansas.

He was President of the Windsor Audit Co.. He was an Army bomber pilot and flight instructor during World War II. He is survived by his wife, Betty Kraft Windsor, two daughters and a son. _

dist Church and a volunteer in tax assistance for the elderly.

Survivors include a son, two daughters and two bothers.

Right now, your local representative is ready to help you get the most from our integrated Iibrary for Arkansas practice - from ALR lo Am jur or U5CS to US LEd. If you want to be in charge, talk to a representative who's in touch with your needs. Contact your local representative directly, or call 1-800-527-0430.

.,

~ ,

Gary Ingle

Kent

(SOl) 663..04731

Md:1~n

(502) 55<1-8651

1111

uwyers Cooperative Publishing In depth. On point. In perspective.

Donald Nasser, Jr. {3l817-46.374-4

Twenty.five years ago, the leadership of the Arkansas Bar Association had a true desire to communicate with the membership more effectively.

They wanted to give the members something extra, something special.

Their vision was realized with the creation of Th~ ArkansaJ Lawyer Magazine. As you can all see on the cover of this Special 25th Anniversary Issue, the magazine started with a low budget, a little creativity, and a great deal of work by 1967 President Maurice Cathey, Executive Director LeRoy Gaston and those members of the Association who were called upon to write for the magazine. Since its inception, the magazine has seen 25 Presidents, three Executive Directors and three Editors.

With each Executive Director, Editor and actually with each President, the magazine has changed and been enriched. The change in focus has been

..

,.,

/

.;.

-

especially apparent with the changing of editots. The first Editor, who also served as Executive Director was Colonel C. E. Ransick. Col. Ransick felt strongly about doing in-house stories. i.e., those about Association activities

- ..

and members. The magazine served as a vehide for publicizing events and

,

.â&#x20AC;˘

progress in the Association. Colonel Ransick left the Bar Association in October 1984 making way fot Colonel William A. Martin. Director of Communications Ruth Williams approached Marrin about taking over the magazine and he agreed. Williams edited the magazine for over five years, bringing it into the computer age with fresh and innovative design ideas and a journalist

JANUARY 1992

â&#x20AC;˘

eye for great stories. Paige Beavers Markman was

Magazine. After being pasted up, the "boards" are

named Director of Communications in May of

delivered to the printer. Printers then "burn plates"

1989. Since that time, the magazine has been

and put them on presses that are sometimes as long

redesigned and focus issues have become a regular

as a football stadium and as many as three stories

feature.

high. All of this means that a job that used to take

Each editor has changed the face of the

magazine in one way or another. Each Executive Director has added excellent commentary on issues

several weeks or months even, now takes no more than a couple of weeks.

All of the efforts that have gone into the

that face the Association and the legal profession. magazine have been for the purpose of providing And each President has set the tone for the bar year, brought up issues that need to be studied and resolved.

T he

interesting, helpful and informative issues for the reading pleasure of Arkansas attorneys. As we begin our 26th year of publication we will continue to

magazine also serves as a mirror for the

strive for improvement -- better articles, better

changes in publishing Since 1967, advances have

design. But we also take pride in looking back, some

been made in the computer industry that have

excellent work has been done. We hope you've

forever changed the face of The Arkamas Lawyer and

enjoyed it and continue to read with us.

all publication we take for granted daily. We no longer type the articles in the magazine. They are

Milurice CIlthey hard

given to us in computer typed form and then

to be EstllblisheJ

scanned in to be edited in a word processing program. A great deal of the art and graphics used on the cover and throughour the magazine are drawn in-house on the computer or scanned in and revised for our use.

The page layout for the magazine is

designed in-house on a desktop publishing program.

After the pages are designed, the text is "imported" from the word processing program and the art is imported from the" draw" programs. Color can be added or altered on our computer, pictures can be scanned in to their proper positions. The magazine is then taken to another computer by disk and printed out at a higher "dot-per-inch" ratio to give it the quality look to rival the ABA journal or Time 28

ARKANSAS LAWYER

JANUARY 1992

lJIIri", the Mill-Y_ Mud", oftin AnU."., &r ARoeUItiD", the M_rie, Ctthey A1JNmJfor o.~", CA"trilnltiDru 10 The Ari",,"., l_ryer M",tali_ will be IItINII'tletlfDr the jim time. I" ob_ne, oftin 25th """iPe1'tATJ of the """tali-. it ujim", tINu _ honor thU ""'" offFUI rMUns. The ittINIrtl u nt4blisbell to rÂŤopiu bU fJYitt foJWifbt atllo e%prnt .ptnWiittiD"for bU o"I#IIJUIin, eo"trilnltiDru. M-""e Ctthey will be pottInnruJtuly 7UI7Itetl the first rwip"", ofthU.wtnYI. I" the fti",rw, tin _1IWl will be tit- for extrllM'tlinilry atl npijie.", eontrihtiDru 10 the _ ,_ _. I' U irtteruletllo lWtIf"iu eontribtltiDru whieb ",lntatill/ly erJNme, the fruJity ofthe """tali", i" Jl "'PÂŤ" IIjfeai", the oflmlll lIppMIof the ptlbliutitn. to m rwulen. I, will "., rteeellllriJ} be tit- -...u". btl, lit ",eri, u 1WtIf"iutl.

Th, following "rti,k WtlS prep"red by Rich"rd F. H"tfu:/J of Link Rock. Hlltfie/J U in pri""te prllctice in LiJ:tJe Rod, spuiAJizin: ;,.

Probtlt, lInd Tnuts.

Mlljor ch"",eI hAlle «cured in the lire•• covered by thn

"nick in the PtlSt 25 y'''''. The dev,lopments through both kgis/own ."d Supreme Court / AppeAls Court tkrisioPU lire highlighted.

I. DESCENT AND DISTRIBUTION A. Inheritance. The Arkansas Inheritance Code of 1969, Act 303 of 1969, ACA §28-9-201, et seq, codified Arkansas law regarding distribution and priorities in intestate secession as well as abolishing the common law doctrines of (1) first purchaser (2) ancestral estates and new acquisitions and (3) worthier title. For discussion of Act see Wright, The New Arkansas Inheritance Laws: A Step Into the Present With an Eye to the Future. 23 Ark. L.Rev 313.

B. Legitimacy. Established were the (1) right of an illegitimate child to inherit from his father and the father to inherit from the illegitimate child, and (2) procedure for determining that the child was the child of this particular father.

Act 1015 of 1979; ACA §28-9-209(d). The 1979 Act is not retroactive. Lucas v. Handcock, 266 Ark. 142, 583 S.W.2d 491 (1979).

C. Escheat. Property escheats to the county where decedent resided at his death. This Act details how funds are distributed and duties of officers in obtaining title by county. Act 703 of 1985. ACA §2l>-13-101 et seq.; Newton County v. W..t, 293 Ark. 461,739 S.W.2d 141 (1987).

D. Disclaimer. Includes treatment of property transferred from another by will or intestacy. Act specifies means of relinquishing claim to property prior to accepting any benefits from this property. Treatment is essentially as if the person disclaiming benefits predeceased the transferor or testator.

Property subject to disclaimer and means of executing disclaimer of property are detailed. Act 348 of 1981. ACA §28-2101, et cet. Hunt v. U.s., S66 F.Supp. 356 (E.D. Ark. 1983).

II. WILLS A. Community Property of a Married Decedent. Act 660 of 1961, ACA §28-12-100, et cet., limits property of married decedent disposable by will or by intestacy. The Act applies to property acquired by married persons in jurisdiction with community property law. It is presumed that the law of the domicile at acquisition of property determines "community property."

Only one-htzlf of the property defined as community property is distributable according to decedent's will or intestate. The remaining one-htzlf of the property is that of the surviving spouse.

As to this property of the decedent, the surviving spouse has no right to elect against the will nor to take dower or curtesy. The burden is on the surviving spouse or personal representative to perfect title to property covered by the Act. A purchaser for value or lender obtaining apparent title from either the personal representative or surviving spouse takes free of claims of the other.

B. Execution of Will. Case law has interpreted execution requirements of ACA §28-25-103.

1. A liberal construction of execution requirements should be made in absence of fraud, deception or undue influence.

Faith v. Singleton, 286 Ark. 403, 692 S.w.2d 239 (1985). Testator's gesture may be the basis for acknowledgment and proper execution. Green v. Holland, 9 Ark. App 233, 657 S.W.2d 572 (1983).

2. Although no presumption of due execution rises from mere production of the instrument purporting to be a will, if it appears to have been duly executed and attestation established by the witnesses in absence of evidence to the contrary, indicating compliance with the requirements of law, execution will be presumed. Green, supra; Upton v. Upton, 26 Ark. App 78, 759 S.w.2d 811 (1988).

3. Witnesses do not need to be in each other's presence to validate execution of will. Coleman v. Walls, 241 Ark. 842, 410 S.W.2d 749 (1967).

4. Where one witness to will predeceased testator, proof is required by testimony of both testator's and deceased witness' signature to satisfy requirements of statute. Walpole v.

54 Ark. 89, 492 S.W.2d 410 (1973).

C. Testamentary Intent.

1. Document containing no words of dispositive intent was defective on its face, and extrinsic evidence not admissible to show intent. Dunn v. Means, 304 Ark. 473, 803 S.W.2d S42 (1971).

2. Where Testator's signature on holographic will was not at end, it must be shown that Testator signed his name with purpose of executing instrument as his will. Nelson v. Texarkana Historical Soc. and Museum, 257 Ark. 394, 516 S.W.2d 882 (1974).

3. Extrinsic evidence is admissible to fortify finding of testamentary intent. Chambers v. Younes, 240 Ark. 428, 399 S.W.2d 6S5 (1966).

D. Incorporation by RefeTence. Act 814 of 1979 provides means for incorporating by reference of 0) any writing in existence when will is executed, if language manifests intent to incorporate and sufficiently describes writing and (2) reference to a written statement or list of items of tangible personal property not otherwise disposed of in will other than money, evidences of indebtedness, documents of titles, securities, and property used in trade or business. The written list per (2) must be signed by testator and items described with reasonable certainty, although this document need not be in existence at time the will is executed. ACA §2l>-25-107. Gifford v. Eslate of Gifford, 305 Ark. 46,805 S.W.2d 71 (1991).

E. Revocation.

1. Where a will is only partially revoked, reattestation of the remainder of the will is not required. Removed was the requirement that two persons witness another destroying the will in testator's presence for revocation. Act 814 of 1979. ACA §28-25-I09<c).

2. Where a 1973 will was effectively revoked by execution of a 1976 will per ACA §28-25-107 and the 1976 will was destroyed, decedent died intestate. Parker v. Mobley, 264 Ark. 805, 577 S.W.2d S83 (1979.)

3. Testator's attempt to change disposition by obliterating devisee's name on typewritten will was not effective, since action was not attested to. Devisee's name was restored per original instrument. Dodson v. Walton, 268 Ark. 431, 597 SW.2d 814 (1980).

4. Husband executed will distributing property to wife and stepchildren. Husband and wife were divorced without change in will. At husband's death, his stepchildren were proper distributees under his will, since only bequest to former wife is affected by ACA 28-25-107(b). McGuire v. McGuire, 275 Ark. 432, 631 S.W.2d 12 (1982).

5. This section seems to preclude doctrine of dependent relati.... revocatilm. LArrick v. LArrick, 271 Ark. 120, 607 S.W.2d 92 (1980). ACA 28-25-109.

F. Anti-Lapse Provision. ACA ยง28-26-104 1. Except as applies to property devised to a child who predeceased testator, if the residue is devised to two or more persons, and the share of one of the residuary devisees fails for any reason.. his share passes to the other residuary devisee, or to other residuary devisees in proportion to their interest in the residue. Act 813 of 1979. ACA 28-26-104(2).

2. Extrinsic evidence not admissible to show Testators intent, since this section operates in favor of child, regardless of intent. Hare v. First Security Bank, 261 Ark. 79, 546 S.W.2d 427 (1977), Armstrong v. Butler, 262 Ark. 31, 553 S.W.2d 453 (1977).

3. Pretermitted child's action to enforce rights during administration is against estate, and after administration is closed against devisees. Parker v. Bowlan, 242 Ark. 192, 412 SW.2d 597 (1967).

4. This section is constitutional. Grandchildren of deceased child of Testator were pretermitted heirs where neither they nor their father were named in will. Holland v. Willis, 293 Ark. 518, 739 S.W.2d 529 (987).

5. The word "heir" is used in a colloquial sense, as compared to legal sense. Leatherwood v. Mersch, 297 Ark. 91, 759 SW.2d 559 (1988).

6. Testator's use of a word that describes a class of persons is sufficient in identification of a child to preclude application of ACA 28-26-104(3). Estate of Cisco v. Cisco, 288 Ark. S52, 707 SW.2d 769 (1986).

7. Whether IIdescendants" was a sufficient description of class within this section was to be determined by considering entire will and trust therein created for Testator's "decedents."

Pefly v. Chaney, 281 Ark. 72, 661 S.W.2d 373 (1983).

8. Reference to "all my heirs and other relatives" was sufficient to mention Testator's children. Young v. Young, 288 Ark. 199, 703 SW.2d 457 (1986).

G. Contracts Affecting Devise of Property. Act 658 of 1981.

ACA ยง28-24-101.

1. A contract to make will or devise, or to revoke a will or devise, or to die intestate, if executed after June 17, 1981, can be established only by: a. Provisions in will stating material provisions of the contract, b. Expressed reference in a will to a contract and extrinsic evidence proving the terms of the contract, and/or c. A writing signed by decedent evidencing the contract.

2. Execution of a reciprocal or mutual will does not create a presumption of a contract not to revoke the will. (Emphasis supplied).

H. Ante-Mortem Probate. Establishes procedure for determining validity of will of during testator's lifetime. This is essentially a declaratory judgment adion, with notice given to all heirs at law and devisees under the proposed will. Act 194 of 1979.

ACA ยง28-40-201, el seq.

I. Unifonn Principal and Income Act. I. This Act applies to and defines (a) terms relating to items and charges as to principal and income and related items,

30

ARKANSAS LAWYER

JANUARY 1992

(b) apportionment between income and principal as to trusts and estates, and (cJ duties of fiduciary (trustee and/or personal representative). Except as provided in trust or will, Act applies to transactions after July 19, 1971. Act 318 of 1971, ACA 2870101, el cel.

2. Where decedent's will provided for pecuniary bequest made to Testator's widow, after allowing property which passed to her outside the will, to maximize marital deduction, but no provision was made for distribution of income of estate during administration to be paid to widow, income was allocated to residuary beneficiaries. Hanna v. Hanna,

273 Ark. 399, 619 SW.2d 655 (1981).

J. Valuation and Distribution to Surviving Spouse-Marital Deduction. Preserves marital deduction for distribution of property under will or governing instrument to marital deduction portion. Act 209 of 1967 and Act 643 of 1987. ACA 2853-201 el cet.

K. Interest on Legacies.

1. General. Unless a contrary intent is indicated by a will, if the estate is solvent, general legacies bear interest at the rate of six percent (6%) per annum, or the then-prevailing legal rate, beginning 15 months after commencement of

administration, but not before that time. Act 620 of 1975. ACA 28-53-112(a).

2. Spedfic. Specific legacies do not bear interest other than the increase in the item given. Bransford v. Jones, 284 Ark. 121,679 S.W.2d 798 (1984).

3. Lost Will. Burden of proving a lost will is on proponent to prove execution and contents by strong, cogent

and convincing evidence. Conkle v. Walker, 294 Ark. 222, 742 SW.2d 892 (1988).

III. ADMINISTRAnON OF DECEDENT'S ESTATES A. Dower, Curtsey and Homestead.

1. Act 714 of 1981 established equal rights for men and women regarding homestead, dower, curtsey, allowances from decedent's estate, and the right of surviving spouse to take against the Trimble will, in response to decisions of the U. S. Supreme Court in Trimble v. Gordon, 430 U.s. 762 (1977) and Stokes v. Stokes, 271 Ark. 300, 613 S.W.2d 372 (1981), holding unconstitutional differences in such rights for men as compared to women. This Act basically put on equal footing male and female surviving spouses as to rights flowing from the death of their spouse. Act 714 of 1981 is substantive, and not procedural, and is not applied retroactively. Huffman v. Dawkins, 273 Ark. 520, 622 SW.2d 159 (1981).

2. Dower includes the possibility of commutation to a sum certain using actuarial tables, which amount is available for marital deduction to surviving spouse thus avoiding sale of real estate. Mauldin v. U.S., 466 F. Supp. 422 (E.D. Ark. 1979).

3. Before assigned by court, dower and curtsey are mere rights to compel assignment. After assignment, a life estate results. Bradham v. U.S., 287 F. Supp. 10 (W.o. Ark. 1968).

4. Arkansas Constitution, Article 9, Section 6, allows execution against widow's dower interest in the homestead by her surety for her role as executrix in misusing estate funds, with the limit being the reimbursement of the surety. A levy cannot be made by general creditors of the estate against her homestead.

Northwestern Nat'/. Ins. Co. v. Sulcer, 267 Ark. 31, 588 S.W.2d 442

(1979)5. Where the estate is solvent, a widow taking against will is entitled to have the balance due on a mortgage debt paid out of the general assets of decedent's estate, in addition to full dower. Bruns v. Lotz 254 Ark. 701 496 WW.2d 376 (1973). ACA

28-53B. Notice to Creditors. ACA 28-40-111

1. The U.S. Supreme Court ruling in Tulsa Professional Collection Services, Inc. v. Pope, 485 U.S. 478 (1988) established the standards for notifying creditors of an estate complying with

due process, which were defined by Act 929 of 1989, making the following three important changes: a. Personal representatives are required to

serve actual notice on unpaid estate creditors who are known or whose names and addresses are "reasonable ascertainable" by the personal representative, within one month of the first publication of notice to creditors. b. If the names and addresses of creditors are ascertained by the personal representative after the initial one month, notice must be promptly served on each creditor. The burden of proof on any issue 35 to whether names and addresses of creditors is known or reasonably ascertainable is placed on the creditor claiming entitlement to notice.

2. Other provisions comply with process under the Pope supra and decisions of the U. S. Supreme Court.

C. Claims Against Eslale. ACA 2B-50-101 el cel.

1. Act 929 of 1989 and Act 59 of the Third Executive Session of 1989 brought Code claims provisions within the constitutional requirements of Pope supra, and set times for filing claims against the estate after the first publication of notice to creditors, essentially, as follows: a. Tort claims against decedenl- Six months. b. All other claims - Three months. c. Certain tort claims against estate of decedent based totally on recovery from liability insurance or uninsured motorist insurance which will not deplete decedent's estate may be brought within the limitation provided by tort claims, not probale nonclaims statuIe. ACI 385 of 1971. ACA 2B-SO-101(0.

2. A contingent claim against the estate becoming absolute six months prior to final order of distribution must be filed within six months after becoming absolute, or it is unenforceable. Huff v. Bruce, 261 Ark. 498, 549 S.W.2d 282 (1977).

ACA 2B-50-110 (b) and (c).

3. Where husband dies and divorced wife is entitled to alimony payments until her death or remarriage, the court did not err in refusing to commute the wife's claim to its present value. Powell v. Pearson, 251 Ark. 1107, 476 S.W.2d 802 (1972).

4. The statute of nonclaim is to/led for active servicemen under the Soldier's and Sailor's Civil Relief Act, but not for them in representative capacity for those not in service. ACA 28-50101. Lopez v. Waldrum Estate, 249 Ark. 558, 460 SW.2d 61 (1970).

D. Taking Againsl the Will.

1. Act 714 of 1981 requires a surviving spouse to have been married continuously to the decedent sfX:>use for a period in excess of one year to take againsllhe will. ACA 28-39-401(a).

2. This Act is constitutional and is not applied relroactively. Huffml>n, supra.

E. Jurisdiction. ACA 28-1-104 1. Third Parties. Probate Court has no jurisdiction to determine disputes between personal representative and third parties. Hilburn v. First State Bank, 259 Ark. 569, 535 S.W.2d 810 (1976).

2. Lost Will. Normally, Chancery Court has jurisdiction to establish a losl will, but Ihe Probate Court also has the power to do so if "...incidental to the administration of the estate...," Conkle, supra.

3. Partition. Probate Court's authority to order sale does not encompass power to order a partition, and application for sale must be made only for certain purposes and by the personal representative, not by the widow. Gibson v. Gibson, 266 Ark. 622, 589 S.W.2d 1 (l979).

4. Powers. The Probate Court has the power to revive a judgment allowing claims aeainct- '"""e estate and has the same power as courts of (a) ect..... J ........ ~O) general jurisdiction to carry out its judgment, except as otherwise in set forth Ark.. Code.

Pricev. Price, 253 Ark. 1124, 491 SW.2d 793 (973).

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F. Procedure.

1. Parties. a. To be an "interested person" in a probate proceeding, a claimant must timely file his claim. Doepke v. Smith, 248 Ark. 511, 452 5.W.2d 627 (1970); ACA 28-1112. b. A party contesting the will and requesting in writing that his attorney be sent notice of any petitions or motions filed therein submits himself to jurisdiction of the probate court. Givens v.

Hancock, 267 Ark. 298,590 S.W.2d 280 (1979).

ACA 28-1-112.

2. Federal Court Precedent. Where executor chost Q federal form to litigate all claims against estate under rights conferred

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• All regulations of the Arkansas Department of Pollution

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182-189, and malters of Control and Ecology, plus selected regulations from other procedure under federal statutes were in agencies, including the State Board of Health and the conflict with provisions of 28-50-101 and 104, State Plant Board - updated as laws and regs are revised; federal statutes governed. Failure by claimants against estate to present claims to personal • Draft copies of proposed regulations; representative was not grounds for dismissal • Calendar of regulatory hearings and agenda of claims, due to federal court injunction.

Subscription costs: Parham v. Pelegrin, 468 F2d, 719 (8th Cir. Inilial sUbscription year _ new binder, all current law and 1972).

3. Probate Code vs. Arkansas Rules of regulations, and update service $385.00 Civil Procedure.

SUbsequent SUbscription year - regular update service .. $345.00 a. Arkansas Probate Code To subscribe or for additional information, contact takes prec"dent over Arkansas Rules of Civil Arkansas Legl'slat'lve DI'gest. Inc. Procedure regarding filing responses to motions. Response filed prior to hearing was 1401 West Sixth Street timely even though beyond time provision of Little Rock. AR 72201 ARCP Rule 12. /(jng v. King, 273 Ark. 55, 616 (501) 376-2843 S.w.2d 483 (1981). ACA 28-1-114.

Only when real property has become an asset in the personal b. Time to object to discharge of personal representative's hands may he maintain or defend an action for representative can be any time before final order of distribution.

Price, supra; ACA 28-53-lIQ. possession thereof, or to protect title. EstaL<: of Knott v. Jones, 14 Ark. App 271, 687 S.W.2d 529 (1985).

4. Statute of Limitations. Limitations period does not 12. Failure to Revive Action. Personal injury action commence until interested parties are notified. Where estate against defendant who died prior to trial was dismissed for proceedings were kept secret from surviving spouse and failure to file copies of pleadings in probate proceeding and children, period began on date of noti"". WalL<:rs v. Uwis, 276 Ark. revive cause of action against administrator, over plaintiff's 286,634 S.w.2d 129 (1982); ACA 28-53-110. argument that same attorneys were representing plaintiff and its 5. Uniform Principal and Income Act. See Paragraph 11.1 administrator. Hettel v. Rye, 251 Ark. 868, 475 S.W2d 536 (1972). above.

13. Minor Child - Waiver of Noli"". Minor child of 14 may 6. Murder of Spouse - Murderer's Heirs Inherit. One waive notice of hearings. Act 620 of 1975. ACA §28-1113(b)(4). cannot profit from commission of a crime, but this is not 14. Authority to Continue Business. Act 1107 of 1985 applicable where husband who killed wife and then killed permits court to authorize continuation of decedent's farming himself 5toOO to gain nothing. Husband's heirs could inherit from operation in one year increments. ACA 28-49-112. his estate, since they did nothing to benefit themselves. Wife'S 15. Extension of Credit on Estate Sales. Act 658 of 1983 estate made no claim against husband's estate. Luecke v. authorized the personal representative's extension on credit on Mercanti'" Bank of Jonesboro, 286 Ark. 304, 691 S.W.2d 843 (1985). sale of estate property up to ten years from date of sale for an 7. Standing. Personal representative cannot be sued amount up to 90- of the purchase price, when secured by lien or before letters of administration are issued. Jenkins v. Means, 242 retention of title. ACA §28-51-105.

Ark. 111, 411 S.w.2d 885 (1967); ACA §28-40-102.

8. Excluded Appeals - Evidence. Since appeals from 16. Informal Pay"umt of Small Claims. Act 907 of 1987 increased the amount of claims that may be paid without formal probate court are de novo, improperly excluded evidence will presentation and allowance for reasonable funeral expenses, be considered. Pri"" v. Pri"", 258 Ark.. 363, 527 S.w.2d 322 (1975). medical and other expenses of last illness and other claims 9. Selection of Personal Representative. The court has a duty to follow the Arkansas Code in determining priorities for aggregating $3,000 where no claim exceeds S3OO. ACA §28-50105(c). personal representative in absence of sufficient cause or unusual 17. Prudent Man RutJ<. Act 658 of 1989 and Act 668 of circumstance. McEntire v. McEntire, 265 Ark. 260, 577 S.W.2d 607 (-979).

1991 expanded and authorized investments of fiduciaries. ACA §28-71-106.

10. Personal &presentative Fees - RDzI Property. Personal G. Contest of Will representative denied fees based on real estate, since there was 1. Time for contesting will is changed in accordance no evidence of "substantial services" perfonned as to real estate. with the change in the Notice to Creditors per ACA §28-SO-101.

Sloss v. Fanners Bank & Trust Co., 290 Ark. 304, 719 S.W.2d 273 (1986).

2. Act 1007 of 1985 protects the rights of persons acquiring property under a will that is later contested.

11. Action By Personal Representative - Real Property.

L...-------------------------11

32

ARKANSAS LAWYER

JANUARY 1992

possible avoidance of guardianship are covered. ACA ยง9-26-201 to 227. Act 476 or 1985.

K. Probate of Will of NonResident. Act 287 of 1967 set venue and notice for probate of will of nonresident to same as with will of resident. ACA ยง2So4D-120(d).

L. Evidence of Devise. An unprobated will is evidence of a devise when its terms have been treated as effective by decedent and devisee, and no adverse interest is claimed during this time. Act 347 of 1981. ACA ยง2s-40-104(e).

IV. TRUSTS AND TRUSTEES A. Procedure for Revocation, Modification or Termination of Trust. Act 841 of 1989 establishes a procedure to revoke, modify or terminate a trust where a court of competent jurisdiction finds that the trust purposes are not being fulfilled or are frustrated by circumstances unforeseen to settlors.

Required is written consent of the settlor or personal representative of his estate, on a finding by the court that there is a general family benefit to the living named beneficiaries and their families. A Guardian ad litem is required for unnamed, legally, incapacitated, unascertained or unborn beneficiaries, ACA 28-69-401, et cet.

Essentially, purchaser for value takes free of the rights of other interested persons in estate and incurs no personal liability to the estate or any interested person. Treatment is same as acquisition of property from distribut~ or de.visee un?er. the terms of the will for interest acquired pTlor to filmg of objectIOns to probate the will. The distribution supported by court order does not affect this protection. ACA 2s-40-11S. H. Abatement. Where Testator's Will contained no express provisions concerning administration expenses for claims, and no express or implied testamentary plan appeared to require expenses to be shared pro rata or otherwise, ~t. was proper for the Probate Court to apply the abatement proVlslOns. McDermott v. McAdams, 273 Ark. 20, 616 SW.2d 476 (1981). ACA ยง2SOS3-1 07.

I. Small Claims Estales. Distribution of property without administration permitted for amounts, in addition to homestead and allowances, was increased to $50,000. Act 133 of 1983 and 163 of 1987. ACA ยง2So41-101.

J. Unifonn Transfer 10 Minors Act. Uniform Transfer to Minor's Act permits the personal representative to make irrevocable transfer to custodian for benefit of minor as authorized in will. Standards on distributions to minors and

B. Arkansas Custodial Trust Act. This Act sets guidelines for holding proper~y for another, inclUding incompetents by reference to thIS Act, which is, in essence, a statutory trust. It is similar to Uniform Gifts to Minors Act, sets trustee's duties and obligations, and relieves third parties from liability when dealing with custodial trustee. Act 273 of 1991.

ACA 2Son-401, et cet.

C. Retirement Plans Under Sections 401 and 403. Retirement Plans Under Sections 401 and 403 of the Internal Revenue Code, 1986, as amended, containing prohibition against alienation and attachment are conclusively presumed to be spendthrift trusts under Arkansas law. Act 1021 of 1991. ACA 2869-501.

D. Inter Vivos Trust and Marital Rights. Inter vivos trust was not invalid as illusory scheme or device to defeat wife's marital rights.

Richards v. Worthen Bank and Trust Co, N.A., 261 Ark. 890,552 S.W.2d 228 (1977).

E. Revocable Inter Vivos Trost Void As To Credit'or. A revocable inter vivos Trust created by debtor was void as to creditor where debtor still had control over his property. Property was placed In trust over which debtor was not trustee, but was sole beneficiary and had absolute over trust corpus income a~d designation of beneficiaries. Halliburton Co. v. E. H. Owen Family Trust, 28 Ark. App 314, 773 S.W.2d, 453 (989).

F. Spendthrift Trust.

1. Selttor's Creditors. A spendthrift trust does not defeat claims of creditors of settlor-beneficiary. in re Hartman, 115 B.R. 171 (1990).

2. Trustee is Sale Beneficitlry - No Merger of Title.

Sole trustee's status as beneficiary of spendthrift trust did not result in merger of legal and equitable title, so the trust income was not protected by spendthrift clause. Beneficiar)' /trust~ had equitable life estate and was empowered. to appomt remainder.

Pachter, Gold & Schaffer v. Yantis, 742 F Supp. 544 (1990).

3. Termination. Where continuation of spendthrift trust is necessary to carry testator's purp?se, the beneficiary cannot compel its termination. Cotham v. First Nat. Bank of Hot Springs, 287 Ark. 167, 697 S.W.2d 101 (1985). . .

G. No Constructive Trust - Husband Murdering Wife.

Husband murdered wife, then killed himself. The court did not impose a constructive trust on assets of husband's est.a~e ~or wife's estate, based upon his wrongful conduct. BenefIclanes under husband's will Were not profiting from husband's act,

pawa:

1. Failure of Trust. When trust fails at its and wife's estate did not seek recovery from husband's estate. inception, trustees hold the property upon resulting trust for Luecke, supra. settlor or his estate. Lancoster v. Merclumts Nat. Bank of Fort Smith, H. Truste. is B.n.ficiary - No Conflict of Interest.

752 F.Supp. 886 (1990).

Trustee can be a beneficiary of the Trust even though conflict of 2. Settlor's Claim. Trustees' interest in resulting interest exists. Gregory v. Moose., 266 Ark. 926, 590 S.W.2d 665 trust property is not sufficient to allow personal creditor of (1979) trustee to satisfy his claim of trust property. First Nat. Bank of I. Trustee's Actions.

Roland v. Rush, 30 Ark. App 272, 785 S.W.2d 474 (1990).

1. Presumptions. Express trust trustee has 3. Owner. Beneficiary of resulting trust is the highest fiduciary standards under Arkansas law. Doubts are to real owner of trust property and may transfer his interest. be resolved against trustee and for beneficiary. Busby v. Worthen Carmical v. Carmical, 246 Ark. 1142,441 S.W.2d 103 (1969).

Bank and Trust Co., N.A., 484 F Supp. 647 (1979).

P. Court Action. Suit for restoration of trust property 2. Beneficiaries Favored. The law favors beneficiaries of a trust. Roaers v. Union Nat. Bank of Little Rock, from trustee seeks enforcement of the right belonging only to 240 Ark. 261, 398SW.2d 904 (1966). beneficiary. Lynch v. Porter, 446 F2d 225 (1971).• 3. Contingent Beneficiaries. Trustee owes same fiduciary duty to contingent beneficiary as one with vested interested. Alexander v. Alexander, 262 Ark. 612,561 SW.2d 59, Appeal after Remand, 275 Ark. 439, 631 S.W.2d 278 (1978).

4. Investments. Trustee has duty to invest trust For Sal.: Arkansas Digest current pocket parts. (501) 279assets in productive property. Riegler v. Rieqter, 262 Ark. 70, 553 6212.

S.W.2d 37 (1977).

5. Trust Instrument. Court will strictly construe For Sal.: Arkansas Digest, SoW. Rep. (Ark. cases) Vol. 1-551, trust instrument against trustee, professional having special ALR 3rd Vol. 1-81, AMjUR 2d, uses, AMjUR Pleading and expertise in administration of trust estates, even though trust Practice, AMjUR Trials Vol. 1-25. Good condition, bargain instrument contains exculpatory clause. Dunkley v. Peoples Bank & Trust Co., 728 F.Supp. 547 (1989). prices. 269-4024. j. Attorn.y F....

1. To Beneficiary from Trustee. Award of For Sale: Two IBM Displaywriters, with printer and sheet attorney's fee to parties' successful action against trustee for feeder. Includes all manuals and diskettes. Arkansas Code breach of trust was proper. Liles v. Liles, 289 Ark. 159, 711 S.W.2d Annotated and Arkansas Digest. Best Offer Accepted. 484447 (1986).

7016 after S:OO, or leave a message.

2. Common Fund. Beneficiary recovering substantial sum for breach of trust against trustee was entitled to For Sale: Large desk, $550. Arkansas Reports, $900. reimbursement of his attorney's fees on common fund theory.

Arkansas Digest, $250. 1947 Arkansas Statutes, make offer.

Dunkley, supra.

U.S. Code Service, make offer. Write Mrs. Fred jones, 12800 K. Lach.s. Period of laches with respect of beneficiary' 5 Kanis Rd., Little Rock, AR 72211. Or call 227-6398. action for accounting begins to run with n.:;o~tl;,;;·c;;;e";o:;;f:",;;tr:,;u;;s;:t~~~~~~~~~~~~~~~~~~~~~~~~~,,,;,':'1 repudiation. Burden of proof is on trustee to II prove such notice. McPherson v. McPherson, 258 Ark. 257, 523 S.W.2d 623 (1975).

ENVIRONMENTAL SECURITY L. Applicabl. Law. 1. Administration of a trust For the additional protection of our clients. SpilTech Services provides of real property located in Arkansas governed general and pollution liability insurance. Coverages Include the following _

by Arkansas law, even though will creating operations: the trust was probated in Tennessee and divorce judgment giving rise to claim against .Environmental Real Estate Assessments beneficiary of trust was rendered in • Hazardous Material Emergency Response Tennessee. Hartsfield v. Lescher, 721 F.Supp. .Site Remediation 1052 (1989). .Waste Management 2. The court applied Aorida .Above and Below Ground Tank Cleaning law to construction of trust as prOVided in .Underground Storage Tank Removal trust instrument, in breach of action for trust Addressing environmental concerns impacts your firm and your valued being administered in Arkansas. Dunkley, clients. SpilTech services. Inc. provides the experience and responsive supra. assistance to best protect your interests. Please contact, Ed Penick. Tom M. Capacity to Create Trust. Law Stanton. or Arne Woker. regarding mental capacity in execution of will is also applicable to execution of a deed and "SpifTech Services produced for us a thorough quality report which more creation of a trust. Maker of deed, will or than satisfled ourrequirements. Iwas similarlyImpressed wffh theirefficiency other instrument must have sufficient mental as the report was generated with only a few days notice.• capacity to retain in his memory, without prompting, extent and condition of his Wayne Stafford property and comprehend how he is Pruet Production Company disposing of it and upon what consideration.

EI Dorado. Arkansas Rose v. Dunn, 284 Ark. 42, 679 S.W.2d 180 Jackson, Mississippi (1984).

N. Trust in Lands. A part of trust Uttl, lD<k, AR 72264 6801-AW"'121h contained in deed which granted land to Fax: (501)663·1796 15011664-1145 three persons as "trustees," with the word EI Dorolla Offke: Dal1l15 Offir:e: "trustees" being the only description of the 204 Strong Highway 15851 Dallas POIkway, Su~e 820 trust, failed as an express trust because it EI 001'000, AI 71130 001... IX 15248-3361 violated the statute of frauds. Bottenfield v.

Oeon Air Cleon 'Holer Cleon Earth 12141170-1950 15011863-5494 Woods, 264 Ark. 50S, 573 S.W.2d 307 (1978).

O. R.sulting Trust.

34

ARKANSAS LAWYER

JANUARY 1992

\

LAW,

LITERATURE

&

LAUGHTER

I

From Fraudian Slips to Literal Babes

By Victor A. Fleming

Debate goes on, as does our competition: Which is the most entertaining-legal pleadings and motions, deposition and trial testimony, or, judicial opinions?

A Fraudian Slip?

U. S. Magistrate David Young (E. D. Ark.) of Little Rock remembers well a certain pre-trial conference information sheet. A property insurer defendant was denying coverage as to a house fire, alleging its customer torched the place.

Under the line item calling for a concise statement of the facts was this sentence- "The defendant has accused the plaintiff of arson, a charge which the plaintiff heatedly denies."

When you've been there, you've been there!

Jim Hamilton of North LitOe Rock remembers the deposition of a Fayetteville woman in an automobile accident case. Jim thinks someone else was the deposing attorney.

Among the alleged consequences of the injuries was an inability to get pregnant.

Q. Mrs. Jones, have you by any chance been through menopause?

A. Yes, sir.

Q. You have? When?

A. Well, we drive through there every time we go to Little Rock for a ball game.

Where there's a way...

Someone has suggested we add to our competition media quotes, on legal matters. [n the November 13, 1991, issue of the Arkansas Demoutte, a lawyer was quoted on the issue of whether the "hamburger tax" law was available for a worthy-cause group of citizens in Saline County: "I'm sure there's a way to do what they want to do, but they need to find that way before they proceed." Sound advice, in any circumstances, I think.

Sometimes you know the answer, Sometimes you don't.

W. Bruce Woody of Dallas submitted some deposition excerpts" that speak for themselves: Q. Was the document prepared by ... someone working at the bank?

A. I can't answer that, [ want to assure you, [ don't even know what I watched on television that night.

Q. Do you know why there is a difference between the two figures?

A. Well, I'm right and he's wrong, and that's all that really matters.

Let's be careful out there.

The following trial excerpt of a police officer's testimony involved Gus Fennerty of Astoria, Oregon: A. [The subject, an elderly female] was still in her car, with the motor running, and the car was off the road and straddling a large log with all four wheels off the ground and

spinning.

Q. And what about this incident led you to suspect that the defendant. was intoxicated?

A. [ climbed on the log and knocked on her window which was closed.

She rolled the window down and gave me a strange look then looked at her speedometer ... and said "How can you be keeping up with me? I'm doing 40 miles an hour!"

Out of the mouths of babes U.s. District Judge Jerry Buchmeyer scores a point for this trial exchange between a lawyer and a six year old witness: Q. Now Johnny I m going to ask you some questions and I want all of your answers to be oral okay?

A.Okay.

Q. What school do you go to?

A.Oral.

Q. What grade are you in?

A.Oral.

Score a t the end of round two: Pleadings 3; Testimony 5; Opinions 1; Media Quotes 1. Send your entries to "LLL" c/o Victor A. Fleming, 111 Center Street, Ste 1600, Little Rock, AR 72201 (or to Editor, Arkansas Lawyer, 400W. Markham, Little Rock, AR 72201. â&#x20AC;˘ "Mr. Woody actually submitted these to Judge Jerry Buchmeyer who used them in his column in the TexQ.s Bar Journal in

September 1989.

Š 1992 Victor A. Fleming

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The Filst Bank 36

ARKANSAS LAWYER

JANUARY 1992

SERIOUSADvANIAGESArFlR5rCO~~

II

EXECUTIVE

DIRECTOR'S

REPORT

AFailure of Communication

By William A. Martin

"What we have is a failure of communication," is the message the warden in the movie Cool Hand Luke was frequently speaking to the prisoner played by Paul Newman.

That we have a failure of communication among African American lawyers, women lawyers and white male lawyers is one of the messages I am getting from the study (part of which is reported in this issue and part will be in a later issue) done by Dr. Doug Buffalo of UALR in conjunction with our Committee on Opportunities for Women and Minorities and the Administrative Office of the Courts.

The questionnaire used in the study was sent to a total of 1458 attorneys and 1085 responded.

Among the questions were a number pertaining to perceptions of discrimination and observations of improper conduct or degrading or sexist language by majority members towards minorities (women or African Americans). There is such an enormous gulf between minority members and majority members (white males or whites) in their responses to questions about experiencing or observing condensing treatment of women or non-white attorneys and use of inappropriate language that I must conclude the

same words and actions are interpreted differently. -A failure of communication.

While a few attorneys may have intended to treat women or African Americans in a condescending manner, in most instances the differences in response to the questions are probably accounted for by an insensitivity to how words and actions will be perceived by minorities who have historically been excluded from participation in the legal profession. While the white response or the male response might be that African Americans or women are unduly touchy about what is said, can the majority that so long did suppress minorities justify a failure to alter its use of words that hurt and offend? Until the majority can realize the effects of what we might think of as playful or innocuous actions or language on others we will have a failure of communication.

All the burden cannot be placed on the majority either. Offense should not be taken when no offense was intended. We have come far enough in our relationships and our profession has become open enough that there should be some presumption of good will and until and unless something rebuts that presumption on an individual basis, a remark or

action that offends should be evaluated with the idea it is the product of ignorance of its effect on others and years of conditioning to use language in certain ways rather than intentional discrimination. Can we work harder at overcoming our failure of communication by speaking up and leveling with each other about what bothers us and resolving to become more sensitive to each other?

Last spring I saw a very diverse group of about eight lawyers involved with our Opportunities Committee start off a forum where we were having difficulty communicating. but by the end of two hours of talking. of voicing our frustra tions, our suspicions of each other and the groups the others represented, our hopes and dreams, our perceptions, and our questions with the attitude we wanted to understand each other better and make the profession open we found we can communicate but it takes effort. From acting as if we could trust each other we found we could.

I observed the Air Force in the early seventies make significant progress in race relations and incidently in officer-enlisted and supervisor-worker relations by setting up fairly large group discussions with

an expediter. We were provided an opportunity to communicate and many of us did in ways we never had before and we learned others' viewpoints and examined our own attitudes. Maybe something of this nature can help lawyers.

Publishing the study which points out differences and similarities between races and genders in demographics, attitudes, observations and reactions is only a waystation on our journey toward having all lawyers valued on their ability rather than on attributes which are an a circumstance of birth. This journey is not an easy one, bu t deep down we know it is worthwhile and one we must make. Honest communication and working toward a greater sensitivity to others are vehicles which will help get us to our destination.•

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ARKANSAS LAWYER

JANUARY 1992

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INIRODUCTION

By William A. Martin How do men and women attorneys differ?

How do white and African American attorneys differ?

What do these factors tell us about the opportunities each group has to achieve recognition, to succeed in the practice of law and to fully enjoy being lawyers?

To better define our similarities and differences, our Committee on Opportunities for Women & Minorities in the Legal Profession sponsored a study with extensive support from the Administrative Office of the Courts and the Sociology & Anthropology Department at the University of Arkansas at Little Rock.

The study tells us women are younger, have less time in practice, were less likely to have graduated Crom Fayetteville, less likely to have a trial practice and more likely to work for a government or legal services agency and earn less than men.

Male attorneys are more likely to be married and have children, handle a lower proportion of household duties and not as likely to have their

career affected by children.

Women attorneys are more likely to perceive their careers have been adversely affected by discrimination, that they experience condescending treatment and sexist jokes and inappropriate sexual advances. They are less likely to be satisfied with their jobs as lawyers and are less optimistic about prospects for the future.

More specific information is contained in the portion of the report pertaining to women attorneys printed in this issue. It was prepared

by Dr. M. D. Buffalo of the UALR Department of Sociology & Anthropology. The part covering African American lawyers will be published in a later issue.

Many of the numbers confirm things we knew or suspected while others may come as surprises. The results are similar to survey reports from other states. The groups responding were large enough that we can be reasonably confident that the numbers accurately represent the demographics, experiences, beliefs and perceptions of Arkansas attorneys about women in the proCession.

Now what do we do with this information?

As shown by the earnings Cigures, a "glass ceiling" for women attorneys still exists. Child care responsibilities impact unevenly. Women perceive discrimination in situations where men do not. These, and a host of other results, call Cor all of us to find ways to red uce the gender gap in the legal profession.

The Opportunities Committee, chaired by Assistant U. S. Attorney Sandra Wilson Cherry, Former Supreme Court justice P. A. Hollingsworth and judge john R. Lineberger, will be analyzing the inCormation in the study in an effort to fully understand and report its implications and then suggest actions and solutions where needed. The committee wants and needs every lawyer's help. Please write down your thoughts, reactions, ideas, recommendations and suggestions and send them to:

Opportunities Committee Arkansas Bar Association 400 West Markham Little Rock, Arkansas 72201

METHODOLOGY The questionnaire for this study was modeled after the

survey conducted by the New Hampshire Bar Association Task Force on Women in the Bar. Many of the questions came

directly from that questionnaire.

The-Process Attorneys selected for this study were drawn from the Arkansas Supreme Court records of licensed attorneys residing in Arkansas who arc subject to minimum continuing legal education obligations (less than age 70 or less than 40 years in

practice) All females (624) and African American males (85) who could be identified were sent a questionnaire. A 25

percent random sample of white males (749) was selected. A total of 1458 attorneys were surveyed.

The questionnaire was mailed three separate times in a effort

to insure a high return rate. The first mailing on October 30, 1990 resulted in a 38 percent return rate. A second mailing

overall return rate in New Hampshire was 71.6 percent while females had a 80.3 percent return rate and males a 63.1 percent return rate.

In addition to women and African Americans, other minorities including 17 African American females responded.

The small size of such a group precludes even categorical

reporting if confidentiality is to be maintained. Thus, the group is reported with other females in data that considers responses by gender. In a report to be published in a future issue, African

American women are reported as African American when African Americans arccomparcd to whites.

Also, five Hispanic, two Asian American and 12 other attorneys responded to the survey. Privacy prohibits their responses being separately reported. While everyone's attitudes and opinions are important, inclusion of this group

into the African American category would significantly change the character of both groups. Therefore, the 19 attorneys self路

with a new cover letter sent 27 days later raised the return rate to 62 percent. The final mailing was made on December 17,

classified as Hispanic, oriental and othcr arc not induded in

1990.

What Doe. 路Significanr Men? Frequently readers ask whethcr a survey research finding is significant. What is meant by significant is not always clear becausc there are two basic kinds of significance. Substantive significance is whether, for exam pic, the diffcrence found between female and male attorneys is meaningful. That is, does the difference matter? It would be substantively significant if it werc found that male attorneys are SO times as likely as female to have a job when they complete law school. It would not be substantively significant to the legal profession to discover that men are 50 times more likely than women to enjoy country music. Statistical significance has to do with the relative frequency with which a given or larger value would occur on repeated random samples from the samc population. When comparing two groups, statistical significance is often thc answer to the question: "Is the difference found between these two a chance obscrvation which is not likely to be found if we

Each of the three mailings included. the questionnaire. a

letter from Chief Justice Jack Holt, Jr. requesting cooperation and a return stamped envelope addressed to Elizabeth DoWling, Administrative Office of the Courts.

Ms. Dowling received the cnvelopc5l removed all idcntifying markings and gave the unopened rcsponscs to Dr. M. D. Buffalo, Univcrsity of Arkansas at Little Rock, where they were

opened and the data processed. All questionnaires will be destroyed when the data collection process is completed.

Since all females and all male African Americans wcre

sampled while only 25 percent of the white males were sent a questionnaire, it is clear that minorities were over路samplcd.

This type of over路sampling is common in survey research when two or more groups are to be compared and one or more of the groups has smal1 numbers. The over-sampling insures that the smaller group is adequately represented. in the results. Each sample adequately represents a subgroup (females, African Americans, white males). and may be used as long as they arc kept separate. They may be compared but the samples may not be combined to form a representative sample of all attorneys in the state of Arkansas.

Who Rnponded?

The overall return rate for the survey was 74.4 percent. Black men had a return rate of 58.8 percent (SO responses); women,

74.8 percent (467) ; and white males 74.4 percent (557). This

this report.

repeated the study, or is the difference likely to be found again?" If the difference is likely to be found again, then it is said to be statistically significant.

Where appropriate, statistical tests of significance have been computed on all the data developed from the survey.

Statistical significance is referred to when "significant" is used in the accompanying report. Whether a statistically significant finding is also substantively significant, and what to do is a decision for the legal community.

response ratc is similar to the New Hampshire Bar study. The

THE REPORT

By Dr. M. D. Buffalo Department of Sociology & Anthropology, University of Arkansas at Little Rock Age and Experience The comparatively late entry of women into the legal profession in Arkansas is reflected in Tables 13 and 14. (Page 44) Women, on the average, were admitted to the bar later; are younger; graduated from law school more recently; and have practiced 40 ARKANSAS LAWYER

JANUARY 1992

law fewer years. These indicators are statistically significant differences between men and women.

Law School Women were much more likely to have attended law school at the University of Arkansas at Little Rock (UALR) than men, and men were more likely to have attended law school at the University of Arkansas at Fayetteville. Almost two thirds of the men but only one third of the women were UAF graduates. Half of the women were UALR graduates.

Legal Specialty While there were many sma II differences in the areas of legal concentration between men and women, there were two that appear striking. Women were more likely to practice domestic relations law than men, and men were more likely to be involved in trial and general practice.

(See Table 15, page 45) Employment History There was no significant difference between men and women in their ability to secure a job after

graduation. [But see the Executive Director's Report in the July 1991 Arkansas Lawyer) Further, there does not appear to be a significant difference in the frequency of job changes after graduation. (See Table 16) Women's current employment began much more recently than men's. The reason for this, of course, is that women attorneys are, on average, significantly younger, more recent graduates, more recently admitted to the bar and have practiced a fewer number of years.

Type Employment Several significant differences were found between men and women in their current type of employment.

Women were significantly more likely to be in government employment and legal services. Men were more likely to be employed in private practice.

(See Table 17) Women were twice as likely to be employed part time than men. Over 90% of both sexes of attorneys work full time. (See Table 18) Benefits Part time employment, flextime, day care for children and maternity/ paternity leave are provided to men and women in approximately the same proportions. However, women are about 50% more likely to be employed in offices that provide formal maternity leave than are men.

(See Table 19) Salary Women are paid a significantly lower salary than men. This difference in salary cannot be explained by the differences in age and experience, already noted.

..... when men and women with similar years of experience are compared, men make higher salaries."

Tables one through five provide data comparing the salary levels of those with similar years of experience. An inspection of the data indicates that when men and women with similar years of experience are compared, men are more likely than women to make higher salaries. This is true for every experience level.

Responsibilities There were significant differences between men and women on every issue of management involvement.

Men were more likely than women to indicate involvement in 1) setting rates for legal services; 2) determining which clients to accept; 3) determining who will handle cases; and 4) making hiring decisions. (See Table 12) Men were more likely to indicate

they were involved in courtroom work. Women were more likely than men to indicate involvement in case preparation for litigation. On other issues there do not appear to be significant differences between the principal responsibilities of men and women. (See Table 21) Working Hours While there was not a significant difference between the billable hours of men and women, men reported working significantly more hours than women. Men reported a significantly higher billing rate than that charged by women. (See Table 6) Marriage There is a significant difference in the marital status of men and women attorneys. Men (82%) are more likely

Salary Levels Among All Full-Time Attorneys (0-4 Years Experience) â&#x20AC;˘

women

â&#x20AC;˘ men

60% . . . . - - - - - - - - - - - - - - - - - - - - - ,

47 40%

33

32

29 19

20%

8 10

13 6

..1 $7G-111OK Over $1l1OK

Salary Levels Among All Full-Time Attorneys (5-9 Years Experience) â&#x20AC;˘

women

60%

3837

32

40% 20 20%

21 15

2 0%

L..._"'L.._

Under$20K $2G-D $3O-4OK $4O-70K $7G-100K Over$100K

Salary Levels Among All Full-Time Attorneys (10-14 Years Experience) • women

.men

60°;'

41 44 400/, 200/, 0%

Under$20K $20-3lJ( $3O-4OK $4I}-7OK $7I}-100K Over$100K

Salary Levels Among All Full-Time Attorneys (15-19 Years Experience) • women

.men

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39

40%

29

29

20%

15

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Salary Levels Among All Full-Time Attorneys (20 Plus Years Experience) • women

.men

60%

40%

2

0%

Under$20K $20-3lJ( $3O-4OK $4I}-70K $7I}-100K Over $1 OOK 42

ARKANSAS LAWYER

JANUARY 1992

to be married while women are more likely to be divorced (15%) and never married (15%). (See Table 22) Married Arkansas attorneys report an unequal distribution of household responsibilities. Women report they are responsible for more than half of the household responsibilities. Men follow the reverse pattern, with almost 75% indicating that they are responsible for less than half of the household responsibilities.

Half of the males' spouses are employed full time while almost all (95%) of the female attorneys' spouses are employed full time. (See Table 23) Even if the spouse of an attorney is working full time, over two out of three female a ttorneys report they have more than half of the household responsibilities. (See Table 7) Children Men are more likely to be parents than women. This significant difference may be due to the fact tha t men are significantly older than women. It may also be due to delayed family patterns among female attorneys.

Among those attorneys who have children, women are more likely to have primary child rearing responsibilities than men.

Over half of the women and five percent of the men have primary child rearing responsibilities. (See Table 8) Children clearly have an impact on the careers of female attorneys.

Women were more likely than men to report that child care responsibilities affected their 1) choice of jobs; 2) choice of specialty; 3) choice of geographic location; 4) choice of cases; and 5) their hours of work. (See Table 9) Women were significantly more likely than men to indicate their family responsibilities limited their professional choices. Women were also more likely than men to indicate that they delayed their career because of children. Finally, they were more likely than men to indicate that they delayed having children because of their career. (See Table 24)

TABLE

6

necessity of down-playing satisfaction. In three areas the percent these qualities. (See Table of job satisfaction was statistically no Work Hours 10.) different between men and women 1) relations with male co-workers; 2) • women Job Satisfaction • men Men were more likely assistance from support staff; and 3) On the average, how many hours each week do you work? than women to indicate hours of work. (See Table 26) 47 hIS. Women indicated that they think satisfaction with 1) _ _ _ _ _ _ _ 50 hIS. other female attorneys in the state overall aspects wi th the fare worse than men on the issues job; 2) salary and fringe On the awrage, how ~ han'S do you bil each wee<? discussed above.

Men, on the other benefits; 3) advancement hand were more likely to to indicate opportunities; 4) chalhIS. _ _ _ _ _ _ 34 hIS. lenging responsibTABLE 8 ilities; 5) respect and What is your hoorIf bil rate? (averages) prestige; 6) job Who Has the Primary $89.83 security; and 7) Responsibility of Child-Rearing? _ _ _ _ _ _ _ _ _ $97.60 general working conditions. [n no area • women • men did women more Perceptions of Discrimination Respondent Women's perceptions of discrimina- frequently than men indicate job _ _ _ _ _ _ 58%

-----.35

tion against women were significantly different than men's perceptions of discrimination against women.

Women attorneys are more likely than men to believe that women experience discrimination in 1) initial hiring; 2) promotion; 3) attaining partnership; 4) assignment of choice cases; 5) conditions of employment; and 6) level of respect in the profession. A majority of men perceived discrimination against women in none of these areas. (See Table 25) There is a significant difference in men and women's experiences and observations regarding sexist attitudes. A majority of women, but significantly fewer men, reported observing or experiencing the use of inappropriate comments on apparel or appearance, and the use of TABLE 7 familiar names. Also women are more likely to report Household Duties by Gender Among experience with instances of Full·Time Working Spouses condescending treatment and • women • men sexist jokes. (See Table 10) Further, one in three women More than ha~ _ _ _ _ _ _ _.68% reported inappropriate verbal or physical sexual advances by .4% another attorney. Only four Equal percent of the men reported such an event. Almostlwo out 36% of three women reported Less tim hall down-playing their assertive_6% ness or femininity. Men were 60% much less likely to recognize the

"There is a significant difference in men's and women's

experiences and observations

regarding sexist attitudes."

::::::~27%

.5% Equal _ _ _ _ 39%

57% Spoose 11% _ _ _ 36%

2%

Other (fami~ etc.)

1 1%

that women fare about the same as men on the issues above. (See Table 27)

Regarding hope for the future, on the above critical job issues, men were significantly more optimistic than women. (See Table 28)

Dr. M. D. Buffalo would like to thank Kelley Carpenter, a former student in the Sociology & Anthropology Department for her help preparing this repar/.

The Committee wishes to thank justice jack Holt and the Dual, Chief Administrative Office of the Courts, who not only funded, but distributed and collected the surveys; Association Presidents Philip E. Dixon, David M. (Mac) Glover, Charles B. Roscopf and james H. McKenzie, for their continued support and encouragement; the IOLTA Foundation and Arkansas Bar Foundation for substantial financial support and Committee member Dee Davenport Ball for outstanding service to the Committee.

TABLE

TABLE

9

Observations of Sexist Attitudes Against Female Attorneys by Male Attorneys

Have Child Care Responsibilities Affected: •

• men

women

• women

.men

In the past year, have you personally observed or experienced any of

Choice 01 job

the loIlowing (in routine interactions among anorneys):

69%

Inappropriate use of familiar names like 'dear' Of 'sweetie' toward female attorneys

22% Choice 01 Specially

-===~~"'~IIIIII~

36% _8% Choice 01 geographic Iocatioo

•

27°;'

Inappropriate comments on the apparel or appearance 01 female attorneys

Do women ever have to down-play their assertiveness to avoid offending men

25%

70%

1I!!!!!!!_ _1Ii52%

55%

o=rd=er=l=o=m=ai:n~lai~n~p<~ollilesllislliiollinal.Cfllied.ibility63%

attorneys by maM! anorneys

Choice 01 cases

35%

26%

65%

23%

11%

64%

Do women ever have to down-play their femininity in appearance and manner in

20% Condescending treatmenl 01 female

35%

sexisl jokes

Hours Worked

I!I~;;::::::~~~~ 49% . . 71%

58%

In the past year have you persooally observed a

Has an attorney eve.- made any inappropriate

female anorney attempt to use her 1eminity to gain an advantage over a male attorney

.. .4%

_19% _20%

,;,;ve~rba~l"or.phiiiiiYSiilCaiiljsexual advances loward you

TABLE

34%

TABLE

11

women

12

Involvement in Management Functions

The Old Boy Network •

10

.men

• men

Are you involved in any of the lollowing tunctions?

Women were signrticanlly more likely to report that an old boy network exists than were men (96% 01 the women to 63% of the men) Among those indicating that one does exists, they were asked and answered the following:

Setting rates for legal services

"Does this old boy network help male attorneys more than temale attorneys?

Determining which clients will be accepted

•-:::::::::::~~.94% 81% _ 6% Doos this old boy networ1< help male and female an"""'lS eqwlt;?

_ _ 17%

•-========~5~5~%i. •• 76% ;======::::'~6i20~Yo ••• 78% •-:::::::::'~52io~yo. _ 68% ;====::::::~6~O~OIo~o •• Determining who will handle cases

Hiring decisions

Il.2% essthan 1%

Doos this old boy networ1< help temale anorneys more than male .-torneys?

77%

-

TABLES 13·29 Female (F)Male (M)

T.J.ble13 In what yeuwere you

Before 1960 1960·1969

44

~mitted to

F 1'-

1970 - 1974

3"

1975 - 1979

1980 -1984

20" 32"

1985 - 1991 Average

,.83

ARKANSAS LAWYER

the Ark.lnSAS bu7 M S'Jo 14..

20"

22..

20"

44"

,."

1976 ·Usstl,,;m 1%

JANUARY 1992

-

Tilble 14 In whilt yeilt were you bom1 (Yeilt bom converted to ilge by reseilrcher.)

F M 17'Jj, 8% Under 30 31 - 34 1'7% 13'J'o 35-3.

29'lI 23..

40- 44 22-,0 24'J'o 10-,0 14% 45- 4.

3% SO -54 7-,0 55 -59 2'" 5-,0 1% 5-,0 60-64 2..

65+ Average age 40 44 - Less lhan 1 %

TablelS Wh.1lI is (orwhilt W&S more rteenUy) your are.1l of .ped.Jty? PtTCt1lt mmlilming tIIdt ilmt /IS one of lOp thr« F M Commerdal 31lJ', 38lJ', Real Estate 8lJ', 13lJ', Domestic Relations ,J4lJ', 15lJ',; Criminal 15lJt 16lJt Trial and General Practice 2OlJ',; 33lJ',; Constitutional and Civil Rights 2lJ',; 3lJ',; Personallnjury and Insurance 11~ 15~ Estate Planning and Probate ~ 8~ Research and Appellate 4'-'" 1'-'" Health Care and Medical 3'Ao I 'Ao Agrirulture and Environment 5~ 4~ Worker's Comp and Labor ll'Ao Il~ Government and Courts 6'Ao 6'-'" Utility and Reg, 5'Ao 4~ Legal Services 4'Ao 3~ Administrative and M.JInas;ement 4~ 2~ Other 7~ 4'Ao Will not tldd 10 l~

Table 16 How long did you search for work as an attomey before you were hired In your first job?

Have you had more than one job since graduating from l.1Iw school1 F

M

I-lired before graduation 52'-'" More than 1 job since gndWition 367Will not add to lOO'Jt

58"

Table 20 Which of the folloWing f.1ldors h.1ld the most innuenoe on your decision to x.crpt yourcu.rrent employment?

.. ranking frtdOT '1 Interest in duties Need for job

Se<:wity Work for self Flexibility of hours Salary Potential for advancement People work with Othe>"

F

M

26" 20" 6"

15"

17" 13"

33" 6"

8" II" 16" 19"

14"

6"

5"

1011 2Ol!o 1~

Tab-Ie 21 What thrft: .1Id:iviUes comprise your princip.al responsibilities?

Pac;mt mD'IIionin8 Mdt ittm /IS OJ'I~ oflup lhr« F M Business practice 42'-'" 4O'Ji Courtroom work 56'-'" 67f1r.

Case preparation for litigation S5~ 32" Oient contact ~'-'" 32l1i.

Management and administration 37~ 38" All others 35'Ao 38" Will ~ add 10 lOO11t

Table 22 Muit.tol st.totus

Inactive Aad~c

Government Corporate Judge Legal Services/PO Private Practices

F

M

7'-'" 3'-'" 2774~

572711 ~ 5'-'"

3~

5~

6~

3'-'" 667-

42'Ao

Will not add 10 lOO'Jt

Married Divorced Separated Widowed Never married

F 67"

15" I" 2"

F

Part-time Full-time

M

~

4'Ao 96'-'"

91'"

Table 19 Does your office provide any of the following for .1Ittomers?

Part-time employment Aexible schedule D.1Iy care for children Maternity leave FomuI Informal None Paternity le.1lve Fonnal lnfonnal None

F

M

23"

27" 58"

51" 3"

-

3"

25"

3 3" 28"

33"

'0" 6"

6"

84"

42" 11" 83"

M

98" 63" 77"

5~

78"91'-'" SO,-", 61"-

84" 73'-'" 78~ ~

93" 83"

mr.

90" 88" 85" 87"

• Uss IMn 1"

Full-time Put-time Not employed

F

F

83"

Will not tIdJI «0 It:lOft

15"

Table 23 If m.1ll'ried, Is your spouse ernployed7

Table 18 Are you hired to work "put·t!me" or "fulJ.tlme"?

T.1Ible26 Please indk..1lte whether or not you ue satisfied wilh the fonowlng aspeets of your job:

Ov",," Salary md fringe benefits Hours Relations with male co-workers Assistance from support staff Advancement opportunities Challenging responsibilities Respect md prestige Job security General working condibons

40"

Table 17 Which one of the foUowing best describes your practice in Arkansu?

Table 25 Pttedved dlsaiminalion between fe.male ud m. .tomers PerCDIf belimin8 {mtille Qtlorneys apt,rioJa discriminQlion in QrI'A F M Female attorneys have more difficulty being hired than male attorneys SOlI 31" Female attorneys h.tove more difficulty being promoted than male attorneys 601< 28" Male attorneys attain partnership status or advancement faster than female attorneys 32" 63" Male attorneys are more likely to be assigned choice cases than female .1Ittomeys 53" 25" Female attorneys often have more favonble terms and conditions of employment than male attorneys 97.

21" Male attorneys tend to attain more respect/status than female attorneys 41" 65" Will nol add to l(}(}%

95" 2"

3"

M

1 6"

34"

Table 24 Efled of chlldrm on areer.a..nd areeron children: F M Do you believe that family responsibility limited the choices referred to above in Table 91 73'-'" 32" Did you delay starting your professional career or law school because of responsibilities to take are of your children?

3373" Did you delay h.toving children., or put off having children alt~er. in order to establish yourself in your professional career?

21" 34"

Table 27 Now, .1Iparl from your.ituatlon, ple.ue Indlode how well in gener.1ll do you think fem.1l1e .1Itlomeys in Arkansu fare In the .torU. described In question 43 CT.1Ible 26) in comp.uison with their male colle.agues In

Anrn.s..

Bette>" Worse About the same • Less

F

M

6~

5" 28"

32"

68"

t,luln

1'-'"

Table 18 In looking tow.ud the next five ye.1ll1i,.1Ire you optimistic or peulmistk .JIbout slgniHcanUy improving yoursllu.1ltion In the arns described In question 43 crable 26)?

Optimistic Pessimistic

F

M

77'1.

24"

83" 17"

T.1Ible29 Do you hne a mentor In your pl.1Ice of work or ~hft'll! who

gives you advice ud furthers your

QUO,?

F

Yes 0

Have had in the past Do not need a mentor

M

44" 33"

mr.

2Ol!o

24"

3"

3"

44"

GIves Meaning to the Numbers

Attorneys knOW the law, accountants knOW their numbers, and when a case in litigation involves complex accounting, tax and financial isSues, you bring in a CPA to "make sense of the numbers:' That's where BKD can help your case. 'lake a recent business dissOlution case. for example. We objectively determined the value of the business in question, then testified about the tax consequences, the company's fair value and the independence of the parties involved. call us for more information about hoW our tax and financial exPertise can help your case in business splits, business continuations or structuring noncompete agreements.

Little Rock 372-1040

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IN UNIVERSITY OF ARKANSAS AT UlTLE ROCK SCHOOL OF LAW

By Howard B. Eisenberg Dean and Professor of Law New building plans. Moving day is quickly approaching. Absent unforeseen circumstances, we shall begin our move to our new building in MacArthur Park on july 31st. We hope to be fully up and running in the new building by August 10th, in time for the fall semester. We have planned a "sneak preview" tour of the new Law School building for immediately following the House of Delegates Meetings of the Arkansas Bar at noon on Saturday, january 18th, during the mid-year Bar meeting. Transportation will be provided from the Camelot Hotel, although the parking lot at the new building should be available. We hope everyone will join us for brunch and a tour of the building.

HOUSE

NEWS

Faculty activities. Our faculty has been busy this semester: Dent Gi tchel participated in the UAMS medical school's Introduction to the Medical Profession class. He also talked on "Bankruptcy Evidence" at the Arkansas Bar Association's Fall Legal Institute in Fayetteville in October.

The pocket part to Dent's book, Admissibility of Evidence: A Manual for Arkansas Trial LawYers, is now available from the Harrison Company, 800-241-3561.

Professor Arthur G. Murphey attended the ALII ABA workshop on the "New Uniform Commercial Code" in Philadelphia and then presented a program on "UCC: The Code you Love to Hate" at the fall judicial Conference in Little Rock.

Clinic Attorney Teresa Napper spoke on "Post Divorce Modification of Child Custody" as part of AICLE's program on Post Divorce

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Modification and Enforcement in early November.

Professor Philip D. Oliver attended the Federalist Society annual meeting in Washington in September.

Assistant Professor Dennis Hansen attended the annual meeting of the American Society for Legal History in October. Ranko Shiraki Oliver attended the Annual Conference on Immigration Law in San Antonio in October.

Professor Andrew McClurg, who is visiting at the Golden Gate Law School in San Francisco this year, had his article "Handguns as Products Unreasonably Dangerous Per Se" published in the last issue of the UALR Law Review. Professor Phil Oliver will respond, in part, to Professor McClurg in the next issue of the Law Review with his article "Rejecting the 'Whipping Boy' Approach to Tort LAw: Well-Made Handguns are Not Defective Products."

Law Library Director, Professor Lynn Foster, will join the library directors from Los Angeles and Cook County Law Libraries to speak on "Hub Law Libraries" at the annual meeting of the Association of American Law Schools in january in San Antonio.

I presented a workshop at the Adult Protective Services Conference sponsored by the Kentucky Department for Social Services on "Exploitation Issues Surrounding Elder Abuse" in Lexington, Kentucky in October. I was also Luncheon Speaker at the Community Housing Resource Board training conference sponsored by HUD on October 17th.

I discussed the Fair Housing Amendments Act of 1988 and fair housing issues that are now being litigated in federal courts. On December 3, I spoke at the UAMS Medical School on 'The Implications of an Aging Population for the Legal Profession."

Student Activities. The UALR Student Bar Association was awarded the Governor's Trophy at

the 10th Circuit Fall Meeting of the Law Student Division of the American Bar Association held in Lawrence, Kansas in October. The Governor's Trophy is awarded to the outstanding Student Bar Association chapter among law schools in Arkansas, Kansas, and Oklahoma.

The award is based on the S.B.A.'s activities.

Our students interested in international law have formed the Foundation for International Legal Affairs. Professor Art Murphey in their advisor. On November 13th Professor john jackson from the University of Michigan Law School spoke to the group. Professor jackson gave the Ben j. Altheimer Lecture later that day.

UALR has been invited to participate in the criminal trial ad vocacy program sponsored by the American Bar Association Criminal justice Section and the john Marshall Law School. The competition will be held in Chicago in March. Professor Tom Sullivan is the faculty advisor. _ UNIVERSITY OF ARKANSAS AT FAYETTEVILLE SCHOOL OF LAW

by Dean Leonard Strickman The University of Arkansas School of Law hosted a Courtyard Bar-b-que for alumni before the Homecoming football game on October 12, 1991.

The Arkansas Bar Association House of Delegates met that morning in the courtroom on campus. We expect that the House of Delegates will return next October. Also, in late September, the Law School played host to our alumni who were involved in the ceremonies surrounding the rededication of Old Main for a Continental Breakfast at the Law School. I was pleased to have the opportunity to meet so many of our alumni before this special event in the history of the University.

Chairman of the United States Postal Rate Commission and Washington attorney, George Haley, was awarded the 1991 Distinguished Alumnus Citation from the University of Arkansas Alumni Association during Old Main Weekend. Mr. Haley, a 1952 graduate, was 48

ARKANSAS LAWYER

JANUARY 1992

recognized for his long career in private and public service.

Professor john Watkins served as a moderator for a panel on "working relationships between judges and the news media," at the Arkansas judicial Council's fall conference. He also gave a presentation on the Arkansas FOI Act at the Statewide Arkansas Legal Services Conference in October.

Professor Robert Laurence was invited to testify before the Senate Select Committee on Indian Affairs on November 20, 1991. The committee is studying a proposed extension of the Indian Civil Rights Act, 25. U.S.c. 1301-03, an extension that is very controversial because it amounts to a further limitation of Indian Tribal sovereignty.

Professor Robert B. LeOar will be at Tokyo University for the first half of 1992, working on an article about developments in japanese health law.

His research is funded by the japan Foundation of New York and Tokyo.

Distinguished Professor Mort Gitelman's black and white photograph was awarded First Prize in the Ft. Smith Art Center's 15th Annual Photography Competition.

The Hastings Constitutional Law Quarterly will publish an article by Professor Donald judges entitled "Bayonets for the Wounded: Constitutional Paradigms and Disadvantaged Neighborhoods" in its spring issue.

Professor john Copeland, Director of the Na tional Cen ter for Agricultural Law has recently had two articles published in the ational Hog Farmer, Employer-Employee Relations: Liability Pitfalls and Product Liilbility: If The Product Is Wrong - That

Are Your Rights. Director Copeland also has had an article recently in the Indiana Law Review entitled Analysis Of The Farmer's Comprehensive Liilbility Policy.

Rachel B. Kearney, a 1978 graduate of the New York University School of Law, has joined the Law School as the Director of Career Services and Continuing Legal Education. Ms. Kearney will be providing career planning services to law students and alumni.

Little, Brown and Company has published its 1991 Supplement to its treatise on Employment Discrimination co-authored by Professor Richard F. Richards. Professor Richards recently spoke to the Fayetteville Business and Professional Women's organization on sexual harassment.

Professor john S. Harbison of the National Center for Agricultural Law has had published to law review articles: Waist Deep in theBigMuddy: Property Rights, Public Value, and Instream Waters, 26 Land and Water Law Review 535 (1991) and Hard Times in the Softwoods: Contract Terms, Performance and Relational Tnterest in National Forest Timber Sales, 21 Northwestern School of Law of Lewis and Clark College Law Review 863 (1991).

Professor Martha Noble of the National Center for Agricultural Law has recently co-authored a book entitled Environmental Law and Policy in India, Cases, Materials, and Statutes published by Tripathi in India. _

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Professionalism and Management

By Jerry Schwartz

One might wonder what these two words, PROFESSIO ALISM AND MANAGEMENT, have in common. William T. Braithwaite, an associate professor at Loyola University School of Law, described the chief elements of professionalism as - upright character, proper working habits and genuine good manners. Management cannot shape the character of an individual nor can it teach the practice of good manners, these elements are beyond the scope of management. However, proper working habits although mostly shaped by the time the lawyer begins his practice, can be developed by adopting good management practices.

The focus on management and the l>usiness side of the practice has been generally frowned upon by lawyers.

Perhaps this feeling developed from an interpretation of Canon 12 of the 1908 Canons of Professional Ethics which enjoined: "It should never be forgotten that the profession is a branch of the administration of justice and not a mere money-getting trade". The Canon prioritized the focus that a lawyer should have in the practice of law, but it did not prohibit the lawyer from providing for his family and making a decent living. The fact that the word "administration" of justice is used indicates a basic need for an ability to manage and to organize to provide a

client with legal services.

Any service must provide a reasonable profit in order to continue in existence. The lack of a reasonable profit endangers the administration of justice. Even the learned and noble must have shelter and sustenance to exist. The percentage of lawyers that practice the profession as "a moneygetting trade" is small compared to the percentage of lawyers who work extremely hard, under great stress with a true love of the law to serve their clients. The hard working lawyers and their clients need the benefits of good management so proper working habits can be developed to deliver the "administration of justice".

Management will help the lawyer and law office to provide quality service to clients. Len Berry, a Professor at Texas A & M University, has concluded that the following five dimensions are evaluated by people judging the quality of service: 1. Reliability - The ability to provide what was promised, dependably and accurately; Responsiveness The 2. willingness to help clients and provide prompt service; 3. Assurance - The knowledge and courtesy of employees and there ability to convey trust and confidence; 4. Empathy - The degree of caring

and individual attention provided to clients;

5. Tangibles - The physical facilities and equipment and the appearance of personnel.

Management also includes the administration of the financial side of the practice.

1. Proper billing and collection practices - The client should be aware of the cost of services and the billing schedu Ie for those services; 2. Management reports - The law office should have information available to insure that services are being performed at the most efficient levels; 3. Financial reports - The financial condition of the law office should be reviewed monthly to insure the continued profitability and existence of the practice; 4. Trust account reporting to lawyers - The fiduciary responsibility of lawyers handling client funds should be monitored on a regular basis.

Management and good business practices are a small but necessary component of the system of the Nadministration of justice." Law

offices which do not operate the business side of the practice in a proper manner show a lack of professionalism which affects the entire profession, not just their practice. _

FINANCIAL INSTITUTIONS LAW CLE Credit: 6.00 Hours Date: March 13, 1992 Place: Park Hilton, Hot Springs Fee:TBD Program Planner: TBD

1992 MID-YEAR MEETING CLE·Credit: 6.00 Hours Date: January 17, 1992 Place: Camelot Hotel, Little Rock Fee: $125/$150 Program Planner: John P. Gill FlFrH DISTRICT TRIAL PRACTICE SEMINAR

CLE Credit: 5.50 Hours Date: January 31, 1992 Place: University of Arkansas at Monticello Fee:TBD Program Planner: Cathi Compton

ENVIRONMENTAL LAW CLE Credit: 6.00 Hours Date: April 3, 1992 Place: Best Western, Little Rock Fee:TBD Program Planner: Terry Hickam LABOR LAW CLE Credit: 9.00 Hours Date: April 9-10, 1992 Place: Lake Hamilton Resort, Hot Springs Fee: $165 Program Planner: Silas H. Brewster, Jr.

TOP VERDICTS CLE Credit: 6.00 Hours Date: February 21, 1992 Place:TBD Fee: TBD Program Planner: TBD

UPCOMING SEMINARS April 24, 1992 Health Law, Little Rock April 28, 1992 Legal Writing, Little Rock May 1,1992 Tax Awareness, Little Rock

ELDERLY LAW CLE Credit: 6.00 Hours Date: March 6, 1992 Place: Holiday Inn City Center, Little Rock Fee:TBD Program Planner: H. T. Moore

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For more information or to request a brochure on these or seminars, call 375-3957; or fax 375-4901; or Write to: AICLE, 400 W. Markham, STE 700, LR, AR 72201-1426

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Together, the member companies of CNA have over $9 billion in revenue, over $30 billion in assets, $4.5 billion in stockholders' equity and have continued to receive consistently high ratings~ The complete Arkansas Bar Association sponsored professional liability insurance program also offers an experienced ~ netoork to defend you against professional liability claims and loss control seminars designed to help you manage risks.

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