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A Report from the 2019 National Conference of Commissioners 22 The Merger of Law and Equity: 20 Years After Amendment 80 By Jim L. Julian and Rachel Hildebrand
A REPORT FROM THE 2019 NATIONAL CONFERENCE OF COMMISSIONERS ON UNFORM STATE LAWS
By J. Cliff McKinney II
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The Uniform Law Commission (ULC) held its 128th annual National Conference in Anchorage, Alaska, on July 11-18, 2019. Arkansas was represented by its commissioners, David Nixon, John Thomas Shepherd, and Cliff McKinney. Earlier in the year, Arkansas adopted two new uniform acts: the Uniform Protected Series Act (now Act 1611) and the Uniform Directed Trust Act (Act 1021).
The ULC’s rules for approving proposed uniform acts typically require consideration at two consecutive annual meetings. Following is a brief description of the acts that were approved on final reading this year.
Uniform Automated Operation of Vehicles Act
The Uniform Automated Operation of Vehicles Act regulates important aspects of the operation of automated vehicles. This act covers the deployment of automated vehicles on roads held open to the public by reconciling automated driving with a typical state motor vehicle code. Many of the act’s sections—including definitions, driver licensing, vehicle registration, equipment, and rules of the road—correspond to, refer to, and can be incorporated into existing sections of a typical vehicle code. This act also introduces the concept of automated driving providers (ADPs) as a legal entity that must declare itself to the state and designate the automated vehicles for which it will act as the legal driver when the vehicle is in automated operation. The ADP might be an automated driving system developer, a vehicle manufacturer, a fleet operator, or another kind of market participant that has yet to emerge. Only an automated vehicle that is associated with an ADP may be registered. In this way, the Automated Operation of Vehicles Act uses the motor vehicle registration framework that already exists in states—and that applies to both conventional and automated vehicles—to incentivize selfidentification by ADPs. By harnessing an existing framework, the act also seeks to respect and empower state motor vehicle agencies.
Uniform Electronic Wills Act
The Uniform Electronic Wills Act permits testators to execute an electronic will and allows probate courts to give electronic wills legal effect. Most documents that were traditionally printed on paper can now be created, transferred, signed, and recorded in electronic form. Since 2000 the Uniform Electronic Transactions Act (UETA), which Arkansas adopted in 2001, and a similar federal law, E-SIGN, have provided that a transaction is not invalid solely because the terms of the contract are in an electronic format. But UETA and E-SIGN both contain an express exception for wills, which, because the testator is deceased at the time the document must be interpreted, are subject to special execution requirements to ensure validity and must still be executed on paper in most states. Under the new Electronic Wills Act, the testator’s electronic signature must be witnessed contemporaneously (or notarized contemporaneously in states that allow notarized wills) and the document must be stored in a tamper-evident file. States will have the option to include language that allows remote witnessing. The act will also address recognition of electronic wills executed under the law of another state. For a generation that is used to banking, communicating, and transacting business online, the Uniform Electronic Wills Act will allow online estate planning while maintaining safeguards to help prevent fraud and coercion.
Uniform Registration of Canadian Money Judgments Act
The Uniform Registration of Canadian Money Judgments Act (“Registration Act”) creates an administrative procedure for the
20 The Arkansas Lawyer www.arkbar.com registration and enforcement of Canadian money judgments in an enacting state. Once the Canadian judgment is successfully registered in the state, the judgment is enforceable in the same manner as a judgment rendered in that state. The Registration Act only applies to a Canadian judgment if it (1) grants or denies recovery of a sum of money; (2) is final, conclusive, and enforceable in Canada; and (3) its recognition is sought in order to enforce the judgment. The Registration Act supplements the Uniform Foreign Country Money Judgments Recognition Act (“Recognition Act”), which Arkansas has not yet adopted, by providing an alternative method to seeking recognition and enforcement of a foreign judgment. If a state has not enacted the Recognition Act, it may enact this Act at the same time it adopts the Recognition Act as a companion Act. The Registration Act offers an efficient alternative to filing a lawsuit to recognize and enforce a Canadian money judgment in the United States.
Uniform Athlete Agents Act Amendment
The Revised Uniform Athlete Agents Act (RUAAA) updates the 2000 version of the act for the ever-evolving sports commercial marketplace and the increasing activity between athlete agents and student athletes. Arkansas currently has the 2000 version of the act, which the General Assembly adopted in 2001. The RUAAA protects the interests of student athletes, academic institutions, and athlete agents by regulating the activities of
J. Cliff McKinney II is a Managing Member of Quattlebaum, Grooms & Tull PLLC.
athlete agents. The 2015 revision updated the definition of “athlete agent”; required reciprocal agent licensing; created a central licensing process; enhanced notice requirements to educational institutions; and revised administrative remedies arising from damages resulting from improper athlete agent conduct. An Amendment to the Uniform Athlete Agents Act, approved in 2019, applies to changes that the NCAA made to its bylaws in August of 2018 to provide student athletes playing basketball with more freedom and flexibility to explore the possibility of going professional while retaining their college eligibility. Under the new NCAA bylaws, certified sports agents can cover limited expenses of prospective or enrolled college basketball players and their family for meals, hotel and travel in connection with the agent selection process. Because the NCAA bylaw changes were in conflict with the Athlete Agents Acts, the NCAA asked the ULC to amend the two Uniform Athlete Agents Acts so they will not conflict with the bylaw changes. The Section 14 Amendment was drafted to clear up the conflict; it was also drafted so that it applies beyond the current bylaws to ensure that the ULC will not have to go to state legislatures every time the NCAA broadens its bylaws. The amendment does, however, set forth appropriate safeguards so that it only applies if the NCAA makes further changes.
Uniform Probate Code Amendments
The promulgation of the Uniform Parentage Act (2017) has necessitated amendments to the Uniform Probate Code’s intestacy and class-gift provisions. The 2019 Amendments to the Uniform Probate Code provide a more consistent formula for determining intestate shares within blended families, remove outdated terminology, and incorporate the concept of de facto parentage. The intestacy formulae will also account for the possibility that a child may have more than two parents, and therefore more than two sets of grandparents. Arkansas has not adopted the existing Uniform Probate Code or the Uniform Parentage Act.
You can find more information about each of these acts at www.uniformlaws.org. This website has a copy of each act along with supporting information. The Arkansas delegation is honored to represent our state at the Commission and is happy to assist with any questions.
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THE MERGER OF LAW AND EQUITY: 20 YEARS AFTER AMENDMENT 80
By Jim L. Julian and Rachel Hildebrand
Julian Hildebrand
Jim Julian is a former President of the Arkansas Bar Association and chaired the campaign for the passage of Amendment 80. He is Of Counsel to the Barber Law firm. Rachel Hildebrand is an associate attorney at Barber Law Firm PLLC.
22 The Arkansas Lawyer www.arkbar.com Introduction & Background
On November 7, 2000, commonly referred to as “a watershed event in the history of the Judicial Department of this state,” 1 Arkansas voters approved Amendment 80, which modernized the judicial article of the Arkansas Constitution by eliminating courts of chancery, and by establishing circuit courts as the state’s trial courts of general jurisdiction, replacing the dual system which one lawyer had previously characterized as “a cumbersome relic which still breathes.” 2 The practice of law has changed a great deal in the 20 years since, yet, due to size constraints, this brief article aims simply to address Amendment 80’s key components.
Prior to 2000, chancery courts were vested with jurisdiction over “all matters in equity,” 3 meaning such matters as domestic relations, partition actions, disputes involving trusts, and requests for equitable remedies such as specific performance. 4 A plaintiff in a chancery court was required to allege in his or her complaint that “irreparable harm” would be suffered unless equitable relief was granted. 5 In contrast, circuit courts were “courts of law,” meaning they held “original jurisdiction in all cases where jurisdiction [was] not expressly vested in another court.” 6 For example, it was “well established that an action for money damages [wa]s cognizable in law.” 7 In order to successfully attack a circuit court’s jurisdiction, a party was required to demonstrate that another court, i.e., the chancery court, was vested with exclusive jurisdiction. 8 The dual system led to frustration because parties could spend years litigating a case, only to have the appellate courts later hold that the action should have been tried in the other court. In 1992, the Arkansas Supreme Court aptly characterized the inefficiency of the dual system when it wrote, “We do not share our colleagues' view that four years of hard fought litigation must go for naught and these parties sent back to square one to begin anew.” 9 In fact, at the time Arkansas voters approved Amendment 80, only three other states (Delaware, Mississippi, and Tennessee) still maintained the archaic dual system of law and equity. 10 In these states, including Arkansas, the problem of jurisdiction was always present. For example, in Ark. State Game & Fish Comm'n v. Sledge, a circuit court granted an injunction to the plaintiff. On appeal, however, the Arkansas Supreme Court concluded that the circuit court, a court of law, “was wholly without jurisdiction to enjoin”
a party due to the separation of law and equity. 11 Only courts of equity, or chancery courts, held the power to provide injunctive relief. 12 Therefore, the Arkansas Supreme Court had no choice but to reverse and dismiss the case. 13 Similarly, in another case, when the plaintiff sued in chancery court for specific performance of a contract, the chancery court could not award damages. 14 The so-called “cleanup doctrine,” however, did provide some relief. Once a chancery court assumed jurisdiction over an action in equity, any ancillary legal matter could be disposed of under the “cleanup doctrine.” 15 For example, in Towell v. Shepherd, the plaintiffs sought primarily injunctive relief, but nevertheless the chancery court was empowered to “decide all issues involved in the subject matter of the dispute,” as long as “the legal questions [were] incidental or essential to the determination of the equitable questions.” 16 There was, however, no right to a jury trial under the cleanup doctrine, because the constitutional right to a jury trial did not extend to an equity case, 17 and likewise there was no right to punitive damages in an equity case, even under the cleanup doctrine. 18 In Stolz v. Franklin, the Arkansas Supreme Court held, “Certainly, one who appeals to a court of equity for relief waives the award of punitive damages as a matter of right.” 19 Punitive damages resembled penalties, and equity did not enforce penalties. 20 Furthermore, a defendant held a constitutional right to a jury trial on the issue of punitive damages, but a plaintiff in a court of equity had no right to a jury trial. 21 Thus, the separation of law and equity sometimes led to peculiar results.
By contrast, today, a party before a circuit court may make “as many claims, legal or equitable, as the party may have against an opposing party….” 22 Accordingly, one of the fundamental purposes of Amendment 80 was to eliminate “[j]urisdictional lines that previously forced cases to be divided artificially and litigated separately in different courts.” 23
Post-Merger Considerations
Prior to the passage of Amendment 80 in 2000, similar efforts had been attempted, but defeated, in 1970, 1980, 1991, and 1995. 24 Yet, even though success finally came in 2000, the passage of Amendment 80 came with “a whole host of issues, both theoretical and practical, concerning the form and structure of our court system.” 25
Jury Trials
One issue which soon arose was the question of the jury trial. In Arkansas, the right to a jury trial is constitutionally preserved for all matters at law. 26 Thus, prior to Amendment 80, the right existed only in circuit courts (courts of law), not in chancery courts (courts of equity). 27 Yet, Amendment 80’s merger of legal and equitable actions led to the question of whether mixed cases of law and equity would be presented to juries.
The Arkansas Supreme Court first addressed this topic in First Nat'l Bank of Dewitt v. Cruthis, where it held, “Amendment 80 did not alter the jurisdiction of law and equity. It only consolidated jurisdiction in the circuit courts. Therefore, matters that could be submitted to a jury for decision and matters that must be decided by the court remain unaltered.” 28 Accordingly, the Cruthis court held that it was error to submit equitable issues to the jury. 29
A few years later, the Arkansas Supreme Court again addressed the issue in National Bank of Arkansas v. River Crossing Partners, LLC. 30 There, the circuit court submitted the following issues to a jury: (1) the amount due on the promissory note secured by mortgages and the security agreement; (2) whether bonds secured the notes and mortgages; and (3) whether the mortgagee fraudulently transferred real property. 31 Historically, all of these claims were traditionally submitted to a judge in equitable proceedings. Emphasizing the importance of the historical analysis, the appellate court held, “In cases like the one before us, a circuit court must review the historical nature of the claims to determine whether they should be submitted to a judge as equitable matters or to a jury as legal matters. See Cruthis, supra. To that end, these equitable claims should have been tried before the circuit court instead of the jury.” 32 Accordingly, as both Cruthis and River Crossing demonstrate, in cases with mixed law and equity issues, the appropriate procedure is for the jury to decide the legal issues, and for the court to subsequently decide the equitable issues.
Non-Partisan, Elected Judiciary
The adoption of Amendment 80 formally changed Arkansas’ judicial selection method from partisan to nonpartisan elections. 33 Although the current trend among states appears to be a movement toward the “Missouri Plan,” 34 or a system under which a group of experts recommend potential judges to the governor, who then appoints one of the nominees, Amendment 80 retained the elected judiciary process, which continues to be the method by which Arkansas’ judges take the bench. 35
Division of Cases
After Amendment 80, the circuit courts consisted of five divisions: criminal, civil, juvenile, probate, and domestic relations. 36 Each circuit judge, however, was vested with the power to hear all five types of cases. 37 The Arkansas Supreme Court preference is that cases be distributed by a “random selection of unrelated cases.” 38 In the smaller and less populous judicial circuits, the trial judges hear all five categories of cases, and the cases are assigned entirely on a random basis. 39 In the larger circuits, however, the Arkansas Supreme Court has permitted judges to divide the work on a basis that is not entirely random. 40 For example, one judge may have a docket consisting of 80% criminal and 20% civil cases; a second may have 20% criminal, 60% civil, and 20% juvenile cases; the third may have 20% civil, 20% divorce, 20% probate, and 40% juvenile cases. 41 Importantly, though, these divisions have nothing to do with subject matter jurisdiction. As stated above, unlike the system before merger, a circuit judge now has authority to hear all types of cases and to grant all types of relief. In other words, a circuit court may exercise any act of jurisdiction that either a court of law or equity could have exercised prior to Amendment 80, and “the designation of an action as a specific type of action does not prevent a circuit court from hearing any matter within the court’s jurisdiction that is properly raised to the court.” 42
Conclusion
As one Arkansas Bar Association leader argued in promoting the successful campaign for Amendment 80, the amendment “kind of brings the courts into the 20th century” 43 by “eliminating the artificial distinctions regarding a circuit court's jurisdiction.” 44 The previous system, based on antiquated principles dating back to the Norman conquest of England, 45 was “ill-suited to modern litigation,” 46 and, thus, the enactment of Amendment 80 in 2000, and the subsequent unification of law and equity, does, indeed, represent “a watershed event in the history of the Judicial Department of this state.” 47
Endnotes 1. In Re Implem. of Amend. 80, 345 Ark. App’x 664, 2001 Ark. LEXIS 706 (2001); First Nat’l Bank of DeWitt v. Cruthis, 360 Ark. 528, 203 S.W.3d 88 (2005). 2. Dalrymple v. Simmons First Nat’l Bank of Pine Bluff, 296 Ark. 534, 537, 758 S.W.2d 5, 6 (1988) (quoting the appellant’s argument); see also Ark. Const. amend. 80 § 6(A) (“Circuit Courts are established as the trial courts of original jurisdiction of all justiciable matters not otherwise assigned pursuant to this Constitution.”). Amendment 80 also established courts of limited jurisdiction, known as district courts, as of January 1, 2005, and permitted the continuation of city courts. Id. §§ 7, 19(B)(2). 3. Ark. Code Ann. § 16-13-304 (repealed). 4. Howard Brill, Chancery Courts Before the Merger of Law and Equity, Ark. Law of Damages, § 2:2 (Nov. 2018). 5. John J. Watkins, Law and Equity in Arkansas—Or, Why to Support the Proposed Judicial Article, 53 Ark. L. Rev. 401, 409 (2000). 6. Vanderpool v. Fid. & Cas. Ins. Co., 327 Ark. 407, 418, 939 S.W.2d 280, 286 (1997). 7. Daves v. Hartford Acci. & Indem. Co., 302 Ark. 242, 246, 788 S.W.2d 733, 735 (1990). 8. Id. 9. J.W. Reynolds Lumber Co. v. Smackover State Bank, 310 Ark. 342, 352, 836 S.W.2d 853, 858 (1992). 10. Morton Gitelman, The Separation of Law and Equity and the Arkansas Chancery Courts: Historical Anomalies and Political Realities, 17 U. Ark. Little Rock L.J. 215, 244 (1995). 11. 344 Ark. 505, 512, 42 S.W.3d 427, 431 (2001). 12. Id. at 512-513. 13. Id. 14. Arkansas State Highway Commission v. Rice, 259 Ark. 190, 532 S.W.2d 727 (1976). 15. “Mixed” cases, 2 Arkansas Civil Prac. & Proc. § 29:3 (5th ed.). 16. Towell v. Shepherd, 286 Ark. 143, 145, 689 S.W.2d 564, 565 (1985) (internal citations omitted). 17. Mitchell v. House, 71 Ark. App. 19, 26 S.W.3d 586 (2000) (pre-Amendment 80). 18. C. R. T., Inc. v. Brown, 269 Ark. 114, 118, 602 S.W.2d 409, 411 (1980). 19. 258 Ark. 999, 1009, 531 S.W.2d 1, 7 (1975) (internal citations omitted). 20. Howard Brill, Actions in Equity, Ark. Law of Damages, § 9:9 (Nov. 2018). See also Gardner v. Robinson, 42 Ark. App. 90, 854 S.W.2d 356 (1993) (plaintiff who proceeded in equity forfeited the right to seek treble damages under trespass statute). 21. Howard Brill, Actions in Equity, Ark. Law of Damages, § 9:9 (Nov. 2018). 22. Ark. R. Civ. P. 18(a). Subdivisions (a) and (b) were after the passage of Amendment 80. The new language in subdivision (a) authorized joinder of claims whether “legal or equitable,” as does the corresponding federal rule. Amendment 80’s merger of law and equity removed any barriers to the joinder of legal and equitable claims in a single action. Previously, subdivision (b) stated that a trial court could “make appropriate orders affecting severance of claims and may transfer claims between courts of law and equity on appropriate jurisdictional grounds.” This provision was deleted after Amendment 80. 23. In Re Implem. of Amend. 80, 345 Ark. App’x 664, 2001 Ark. LEXIS 706, *2 (2001); Addition to Reporter’s Notes, 2001 Amendments to Rule 18 of the Arkansas Rules of Civil Procedure. 24. Larry Brady & J.D. Gingerich, A Practitioner’s Guide to Arkansas’s New Judicial Article, 24 U. Ark. Little Rock L. Rev. 715 (2002). 25. In re Implementation of Amendment 80: Admin. Plans Pursuant to Admin. Order No. 14, 2001 Ark. LEXIS 706, *4 (June 28, 2001). 26. Ark. Const. art. II, § 7. 27. John J. Watkins, The Right to Trial by Jury in Arkansas After Merger of Law and Equity, 24 U. Ark. Little Rock L. Rev. 649 (2002); Colclasure v. Kan. City Life Ins. Co., 290 Ark. 585, 587, 720 S.W.2d 916, 917 (1986) (internal citation omitted) (“The constitutional right to a jury trial is limited to those cases which were so triable at common law.”). 28. 360 Ark. 528, 534, 203 S.W.3d 88, 92 (2005). 29. See also Reporter’s Notes to Ark. R. Civ. P. 38 (“Since Rule 18(a) permits the joinder of legal and equitable claims, problems could arise when equitable issues are resolved in circuit court; however, Rule 18(b) permits the trial court to make such orders respecting severance and transfer as may be appropriate and this should cure most potential problems. There may be instances, however, where a circuit judge might be called upon to decide equitable issues in a case where a jury is sitting. In those instances, the court should follow the federal practice of having the jury resolve
the legal issues with the court itself resolving the equitable issues. Wright & Miller, Federal Practice And Procedure, Sections 2305 and 2306.”). 30. Nat’l Bank of Arkansas v. River Crossing Partners, LLC, 2011 Ark. 475, 385 S.W.3d 754 (2011). 31. Id. at 8, 385 S.W.3d at 760. 32. Id. at 761. 33. Ark. Code Ann. § 7-10-102; Acts of 2001, Act 1789, § 2, eff. Aug. 13, 2001; Ark. Const. amend. 80, § 17. 34. Assisted Appointment (Judicial Selection), Ballotpedia (October 6, 2019, 1:38 PM), https://ballotpedia.org/Assisted_appointment_(judicial_selection); Ark. Const. amend. 80, § 17. 35. Id.; Ark. Const. amend. 80, § 17. The most common merit system employed by other states is a gubernatorial appointment chosen from a list recommended by a judicial selection committee, followed by a “retention” election. 36. Ark. Sup. Ct. Admin. Order 14 (as revised December 13, 2012). 37. Id. Circuit courts may create specialty dockets or programs, such as drug courts, mental health courts and veterans courts. 38. Id. 39. Id. 40. Howard Brill, Circuit Courts, Ark. Law of Damages, § 2:1 (Nov. 2018). 41. Id. 42. Smith v. McCracken, 96 Ark. App. 270, 275, 240 S.W.3d 621, 624 (2006). 43. Mark Waller, Combine Courts, Jurists Propose, Ark. Democrat-Gazette, March 15, 1990, at BI (quoting Sidney McCollum, co-chair of the Arkansas Bar Association’s Committee on Amendment 80). 44. Smith v. McCracken, 96 Ark. App. 270, 274, 240 S.W.3d 621, 624 (2006). 45. Morton Gitelman, The Separation of Law and Equity and the Arkansas Chancery Courts: Historical Anomalies and Political Realities, 17 U. Ark. Little Rock L.J. 215, 244 (1995). 46. John J. Watkins, Law and Equity in Arkansas—Or, Why to Support the Proposed Judicial Article, 53 Ark. L. Rev. 401, 437 (2000). 47. In re Implementation of Amendment 80: Admin. Plans Pursuant to Admin. Order No. 14, 2001 Ark. LEXIS 706, *2 (June 28, 2001).
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