Linda Stromwall, on Behalf of Herself and All Others Similarly Situated v. Jerre Van Hoose, Individually and as Mayor of the City of Springdale; David Hinds, Individually and as Fire Chief of the City of Springdale; the City of Springdale, Arkansas; the Arkansas Municipal League; Mark Hayes, General Counsel of the Arkansas Municipal League; and Don Zimmerman, Executive Director of the Arkansas Municipal League
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SUPREME COURT OF ARKANSAS
No.
06-1111
LINDA STROMWALL, ON BEHALF OF
HERSELF AND ALL OTHERS
SIMILARLY SITUATED,
APPELLANT;
Opinion Delivered OCTOBER 11, 2007
VS.
APPEAL FROM THE WASHINGTON
C O U N T Y C IR C U IT C O U R T ,
SECOND DIVISION;
NO. CIV 02-1862-2;
HON. KIM M. SMITH, JUDGE;
JERRE VAN HOOSE, INDIVIDUALLY
AND AS MAYOR OF THE CITY OF
SPR IN GDALE; DAVID HIN DS,
INDIVIDUALLY AND AS FIRE CHIEF
OF THE CITY OF SPRINGDALE; THE
CITY OF SPRINGDALE, ARKANSAS;
THE ARKANSAS MUNICIPAL LEAGUE;
MARK HAYES, GENERAL COUNSEL
OF THE ARKANSAS MUNICIPAL
LEAGUE; AND DON ZIMMERMAN,
EXECUTIVE DIRECTOR OF THE
ARKANSAS MUNICIPAL LEAGUE,
APPELLEES;
AFFIRMED.
DONALD L. CORBIN, Associate Justice
This appeal arises from an illegal-exaction claim brought by Appellant Linda
Stromwall, on behalf of herself and all others similarly situated, against Appellees Jerre Van
Hoose, individually and as mayor of the City of Springdale; David Hinds, individually and as
fire chief of the City of Springdale; the City of Springdale, Arkansas; the Arkansas Municipal
League (AML); Don Zimmerman, executive director of the AML; and Mark Hayes, general
counsel of the AML. Appellant appeals both the Washington County Circuit Court’s order
denying her motion to proceed pursuant to Ark. R. Civ. P. 23.2 and denying in part,
granting in part her motion to proceed pursuant to Ark. Const. art. 16, § 13, as well as the
court’s order granting summary judgment in favor of Appellees and dismissing the case. On
appeal, Appellant raises five arguments for reversal: the circuit court erred in (1) dismissing the
illegal-exaction claim as to the taxpayers within 498 of the 499 municipalities participating
in the Arkansas Municipal League’s Municipal Legal Defense Program (MLDP); (2) denying
her motion to proceed against the AML, an unincorporated association, pursuant to Rule
23.2; (3) considering the merits in the certification decision; (4) granting summary judgment
when issues of fact remained to be decided; and (5) failing to make findings of fact and
conclusions of law. Because this case involves both constitutional and statutory interpretation,
as well as an issue of first impression, jurisdiction is pursuant to Ark. Sup. Ct. R. 1-2(a)(2) and
(b)(1). We affirm the circuit court’s orders.
The present suit originated from Appellant’s objection to a November 1, 2002
settlement agreement entered in the case of Bitner v. City of Springdale, United States District
Court, Western District of Arkansas, Case No. 01-5164. Appellant objected to the settlement
based upon her contention that the payment of punitive damages and the payment of the
individual defendant’s personal liability was an illegal exaction.
Appellant’s request to
intervene in the matter was denied.
Following the settlement, Appellant filed the present action alleging an illegal exaction.
Appellant’s complaint argued that (1) payment of the Bitner settlement was an illegal exaction,
and (2) all premiums paid by Arkansas municipalities since November 4, 1997, to the AML
for the MLDP are illegal exactions because the MLDP is a dry-hole contract.
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On May 5, 2005, Appellant filed a motion to approve notice and proceed pursuant to
article 16, section 13, and a motion to proceed pursuant to Rule 23.2. Following a February
21, 2006 hearing, the circuit court denied her motion to proceed pursuant to Rule 23.2 and
granted her motion to approve notice and proceed pursuant to article 16, section 13 only to
the extent that this case would proceed against Springdale, Van Hoose, Hinds, and the AML.
The court denied Appellant’s motion as to her claim against all other municipalities in
Arkansas and denied the putative defendant class representing the AML. This ruling was
entered into record on February 24, 2006.1 On March 9, 2006, Appellant made a request
for findings of fact and conclusions of law pursuant to Ark. R. Civ. P. 52. The circuit court
never acted on this motion.
On March 30, 2006, Appellees filed a motion for summary judgment arguing, in part,
that no genuine issues of material fact existed because the MLDP is an authorized association
of municipalities under Arkansas law, appropriations by Arkansas municipalities to the MLDP
are not contrary to law, and the Bitner settlement agreement was not in violation of the law.
Appellant responded that material issues of fact existed and submitted an affidavit to support
her answer.
A hearing was held on June 19, 2006. At the close of the hearing, the circuit court
announced that it would grant summary judgment. This ruling was entered into the record
on July 10, 2006. That same day, Appellant filed an amended and supplemental notice of
appeal from the circuit court’s April 25 and July 10 orders.
1
This order was modified by the circuit court on April 25, 2006, to include a Ark. R. Civ. P. 54(b)
certification. Appellant filed a timely notice of appeal of this order on May 4, 2006.
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I. Illegal Exaction and Arkansas Rule of Civil Procedure 23.2
Appellant’s first two arguments for reversal are: the circuit court erred in (1) dismissing
the illegal-exaction claim as to taxpayers within 498 of the 499 municipalities participating
in the MLDP; and (2) denying her motion to proceed against the AML, an unincorporated
association, pursuant to Rule 23.2. These arguments are intrinsically intertwined, and as such,
they are best discussed in conjunction with one another.
In dealing with issues of constitutional interpretation, this court performs a de novo
review because it is for this court to determine what a constitutional provision means. See
Weiss v. Maples, 369 Ark. 282, ___ S.W.3d ___ (2007). Similarly, our review of a circuit
court’s interpretation of rules and regulations is de novo. See Price v. Thomas Built Buses, Inc.,
___ Ark. ___, ___ S.W.3d ___ (June 28, 2007). In the absence of showing that the circuit
court erred in its interpretation of the law, the interpretation will be accepted as correct on
appeal. See id.; Weiss, 369 Ark. 282, ___ S.W.3d ___.
Appellant first argues that the circuit court erred in dismissing her illegal-exaction claim
based upon its finding that she was inadequate to represent all taxpayers throughout the state.
Article 16, section 13 states:
Any citizen of any county, city or town may institute suit, in behalf of
himself and all others interests, to protect the inhabitants thereof against the
enforcement of any illegal exactions whatever.
An illegal exaction is defined as any exaction that either is not authorized by law or is contrary
to law. See Brewer v. Carter, 365 Ark. 531, ___ S.W.3d ___ (2006). An illegal-exaction suit
under article 16, section 13 is, by its nature, a class action as a matter of law. See McGhee v.
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Ark. State Bd. of Collection Agencies, 360 Ark. 363, 201 S.W.3d 375 (2005). An illegal-exaction
suit is a constitutionally created class of taxpayers, and suit is brought for the benefit of all
taxpayers. Id. Specifically, every inhabitant of the area affected by the alleged illegal exaction
is a member of the class. See Worth v. City of Rogers, 351 Ark. 183, 89 S.W.3d 875 (2002).
Lastly, it is well established that article 16, section 13 is self-executing and imposes no terms
or conditions upon the right of the citizen to file suit to prevent an illegal exaction. See
McGhee, 360 Ark. 363, 201 S.W.3d 375.
Here, Appellant pursued her illegal-exaction claim on behalf of all taxpayers of each
municipality participating in the MLDP.2 At the hearing on the issue, the circuit court
explained that Appellant could pursue her illegal-exaction case over Springdale and the AML
because she was suing them on a claim requesting that they refund to Springdale money
which was illegally paid, but ruled that there is not a class nor an action against the AML on
behalf of all other cities because of the circuit court’s ruling that Rule 23.2 requirements were
not met. Specifically, the circuit court found:
1.
The proposed plaintiff class representative for the proposed class
of taxpayers from 499 Arkansas municipalities which participate in the [MLDP]
is inadequate to represent the proposed taxpayer class because she is only a
resident of Springdale, Arkansas.
2.
The proposed class representative may represent only the
taxpayers of the City of Springdale, Arkansas, even though all proposed
taxpayers from the 499 municipalities pay taxes used to pay into the [MLDP].
3.
The claim may be pursued only for the City of Springdale’s
payments to the [MLDP].
2
Specifically, she defined her class as: All citizens of Arkansas municipalities who contributed to the
general treasury thereof and whose municipality participated in the MLDP since November 4, 1997.
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4.
The claims of the taxpayers of the 498 remaining municipalities
may not be pursued herein under Art. 16, § 13 of the Constitution of Arkansas.
Appellant claims that this was wrong because the Arkansas Constitution’s illegalexaction provision defines the class to include all of the victims of an illegal exaction.
Moreover, she argues that the court’s ruling that she was not adequate to represent all
taxpayers was an attempt to define and limit the class, which cannot be done because a class
action under article 16, section 13 is self-executing and a class as a matter of law. Thus, it is
not the role of the trial judge to define the class. Appellant concludes that the lawsuit against
the AML is defined by article 16, section 13, and she is a proper class representative of all
taxpayers whose money was misappropriated by the MLDP, not just those taxpayers who
happen to reside in Springdale.
This court has made it clear that taxpayers who are the victims of an illegal exaction
form a class as a matter of law under article 16, section 13 because an illegal-exaction claim
is by its nature in the form of a class action. See McGhee, 360 Ark. 363, 201 S.W.3d 375.
Plainly speaking, all taxpayers who are wronged under the alleged illegal exaction are
members of the class, and the class is not subject to the rules generally governing class actions.
See Worth, 351 Ark. 183, 89 S.W.3d 875 (explaining that an illegal-exaction case is not
governed by Ark. R. Civ. P. 23). Therefore, Appellant’s adequacy of representation is not
an issue. Moreover, the plain language of article 16, section 13 is clear – any citizen may
bring suit on behalf of himself and other taxpayers to prevent enforcement of illegal exactions.
Here, it is undisputed that Appellant was a taxpayer who paid taxes used to pay into
the MLDP. Therefore, in accordance with article 16, section 13, she was capable of bringing
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this suit on behalf of all taxpayers, including those taxpayers in the other 498 municipalities
who also paid taxes used to pay into the MLDP. Thus, the circuit court erred in finding
Appellant to be an inadequate representative to pursue the illegal-exaction claim against the
remaining 498 municipalities. Specifically, Appellant’s adequacy of representation of the
plaintiff class is not an issue because this is an illegal-exaction case under article 16, section 13.
However, in this case, we are faced with a second issue. Specifically, rather than
naming all 499 municipalities as parties to the suit, Appellant sought to proceed pursuant to
Rule 23.2 in her action brought under article 16, section 13. In her motion, she explained
that the complaint was filed against an unincorporated association, the AML, comprised of
more than 499 members, and that Springdale was an adequate representative of the AML.
Moreover, Appellant explained that when an action is brought against the members of an
unincorporated association as a class, the proper method of proceeding is to name the
members as representative parties by a particular representative that will represent the interests
of the association and its members.
Although actions by and against members of unincorporated associations as a class have
long been recognized in Arkansas, nothing within our case law reveals an instance where an
appellant brought an illegal-exaction claim pursuant to article 16, section 13 against an
unincorporated association as a class under Rule 23.2. However, in illegal-exaction cases,
Rule 23 can provide guidance in how to manage the conduct of the class action. See Worth,
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351 Ark. 183, 89 S.W.3d 875. Thus, it follows that Rule 23.2 may also provide guidance in
managing the class action as it relates to a proposed defendant class.3
Arkansas Rule of Civil Procedure 23.2 states:
An action brought by or against the members of an unincorporated
association as a class by naming certain members as representative parties may
be maintained only if it appears that the representative parties will fairly and
adequately protect the interests of the association and its members. In the
conduct of the action the court may make appropriate orders corresponding
with those described in Rule 23(d), and the procedure for dismissal or
compromise of the action shall correspond with that provided in Rule 23(e).
This court has explained that suits brought against members of an unincorporated association
may be maintained as class actions by naming certain members as representatives of the class
if it appears that the representative parties will fairly and adequately protect the interests of the
association and its members. See Fausett & Co., Inc. v. Bogard, 285 Ark. 124, 685 S.W.2d 153
(1985). Furthermore, it is clear from Rule 23.2 that the party wishing to proceed under Rule
23.2 bears the burden of showing that the representative parties will fairly and adequately
protect the interests of the association and its members.
As already stated, Appellant’s adequacy of representation is not an issue in an illegalexaction proceeding under article 16, section 13. However, in regards to the defendant class,
under Rule 23.2, Appellant had the burden of showing that Springdale was an adequate
representative of the AML and its members. In the present case, during the hearing on the
issue, the court explained that there was no evidence that Springdale had been representative
3
It should be noted that Rule 23.2 is a separate rule from Rule 23. See Arkansas County Farm Bureau
v. McKinney, 334 Ark. 582, 976 S.W.2d 945 (1998). Nevertheless, for the issue now before this court, it
would be illogical not to follow this court’s prior analysis of illegal-exaction class actions as it relates to our
rules of civil procedure.
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of the AML or that it had ferociously defended all members of that association. Thus, the
circuit court concluded that Appellant failed to meet her burden to establish her right to
proceed under Rule 23.2. Specifically, the court found that, although Springdale is a member
of the AML and participates in the MLDP, Springdale would not adequately represent the
defendant class, the members of the AML who also participate in the MLDP.
Now, on appeal, Appellant asserts that Springdale’s situation is exactly that of the other
498 municipal members with regard to the common issues of liability of the association for
the illegal exaction such that Springdale’s stake in the outcome is the same as the other
association members, thus demonstrating that there would not be a superior choice of
representative.4 Moreover, she argues that Springdale presented no evidence that it would not
be adequate, but merely denied that it would fairly and adequately represent the members and
the association. Appellant claims that if this flat denial of adequacy is sufficient then there
would never be a representative party through whom one may sue an association under Rule
23.2.
Appellant’s argument has a fatal flaw – she had the burden to show adequacy of
representation. The circuit court found that she failed to meet this burden. Specifically, the
court explained:
4
Appellant also argues that the circuit court may be correct in its ruling that she could not proceed
under Rule 23.2 because Ark. Code Ann. § 4-28-507 (Repl. 2001) gives nonprofit associations such as the
AML the legal capacity to sue or be sued in their own names, and therefore Appellant could proceed with
her individual action against the AML. Upon review, this argument was not made before the circuit court
and as such cannot be addressed on appeal. See McCoy v. Montgomery, ___ Ark. ___, ___ S.W.3d ___ (June
21, 2007).
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there has not been any evidence that the City of Springdale has been a
representative of the Arkansas Municipal League and has ferociously defended
all of the members of that association. Simply because the City of Springdale
defends itself is a far cry from saying, well, we’re going to defend all of these
other cities out there, and we’re going to take the lead, and we’re going to look
out for their interests and we’re going to make sure that their interests are
protected. That has not been shown to this court.
The court did not err in reaching this conclusion, as the little evidence that was presented by
Appellant related to Springdale’s strong defense in a previous suit.
Because Appellant failed to meet her burden of showing that Springdale was an
adequate representative of the AML, the circuit court did not err in denying her motion to
proceed pursuant to Rule 23.2. Therefore, despite its erroneous finding that Appellant was
an inadequate representative, the circuit court did not err in dismissing the illegal-exaction
claim as to taxpayers within 498 of the 499 municipalities participating in the MLDP because
those municipalities could not be made parties to the suit through Rule 23.2. Specifically,
because Appellant did not name any of the other municipalities and because the circuit court
properly denied her request to proceed under Rule 23.2, they were not parties to this action,
and thus those municipalities’ taxpayers are also not proper parties in this illegal-exaction
claim. Thus, the circuit court was correct in concluding that Appellant could only represent
herself and Springdale taxpayers in her illegal-exaction claim against Springdale, Van Hoose,
Hinds, and the AML. See Thomas v. Avant, ___ Ark. ___, ___ S.W.3d ___ (June 28, 2007)
(holding that it is axiomatic that this court can affirm a circuit court if the right result is
reached even if for a different reason).
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II. Consideration of Merits
Appellant’s next argument is that the circuit court erred in considering the merits in
the certification decision. Specifically, she claims that the dismissal of the claims against the
498 remaining municipalities at the class-certification hearing required a determination of the
merits of those claims, which is error at the certification stage of the proceedings. Appellant
does not cite to any legal authority for this proposition. As such, this argument cannot be
addressed on appeal. See Ormond Enters., Inc. v. Point Remove Wetlands Reclamation & Irr. Dist.,
369 Ark. 250, ___ S.W.3d ___ (2007) (holding that this court refuses to consider arguments
not supported by convincing argument or citation to legal authority).
III. Summary Judgment
Appellant also argues that the circuit court erred in granting summary judgment when
issues of fact remained to be decided. In granting summary judgment on the allegations
contained in both the second and third amended complaints,5 the circuit court found:
1.
There are no material facts in dispute, and Defendants’ Motion
for Summary Judgment is ripe for ruling by this Court.
2.
Plaintiff alleges that this is a public funds illegal exaction case.
Specifically, that the expenditure of monies by Springdale to join the [MLDP]
is and was an illegal exaction. Further, that the expenditure of monies by
Springdale and the [MLDP] to settle the Bitner v. City of Springdale, et al suit
was an illegal action.
3.
A.C.A. § 14-54-101 permits Arkansas cities and towns to create
and join the [MLDP].
5
The only difference between the second and third amended complaints was the addition of
Zimmerman and Hayes as named defendants.
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4.
The expenditure of monies outlined in paragraph [2] above is and
was lawful and is not an illegal exaction.
Furthermore, during the summary judgment hearing, the circuit court stated that it did not
“find that these appropriations to the defense fund are contrary to law and that they have a
right to set up this association” under Ark. Code Ann. § 14-54-101 (Repl. 1998).
Now, on appeal, Appellant contends that (1) she stated a case for an illegal use of
public funds; (2) issues of fact exist as to the amount of illegal payment of punitive damages;
(3) the MLDP is a dry-hole contract and therefore an illegal exaction; and (4) all necessary
parties are before the court.
The law is well settled that summary judgment is to be granted by a circuit court only
when it is clear that there are no genuine issues of material fact to be litigated, and the party
is entitled to judgment as a matter of law. See, e.g., Gallas v. Alexander, ___ Ark. ___, ___
S.W.3d ___ (Sept. 27, 2007).
Once the moving party has established a prima facie
entitlement to summary judgment, the opposing party must meet proof with proof and
demonstrate the existence of a material issue of fact. See id. On appellate review, we
determine if summary judgment was appropriate based on whether the evidentiary items
presented by the moving party in support of the motion leave a material fact unanswered. See
id. We view the evidence in a light most favorable to the party against whom the motion was
filed, resolving all doubts and inferences against the moving party. See id. Our review focuses
not only on the pleadings, but also on the affidavits and documents filed by the parties. See
id.
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a. Illegal Use of Public Funds
First, Appellant argues that she stated a case for an illegal use of public funds because
her claim is that the cities have misused public funds in connection with the MLDP.
Specifically, she asserts that if, as the AML claims, there is no contractual obligation or
obligation otherwise to provide a defense in exchange for revenue paid over to the MLDP,
then the payment is illegal since it is the misapplication of public funds without any assurance
that the taxpayers will reap any benefit from the expenditure of these funds.
In response to this argument, Appellees argue that the MLDP is a lawful association
of Arkansas cities and towns, authorized under section 14-54-101. They further contend that
because there exists statutory authorization to associate through the MLDP for the promotion
of their general welfare and to join for the purchase of services, including legal services, the
circuit court correctly found that appropriations to the MLDP are not an illegal exaction.
Lastly, Appellees argue that the circuit court’s finding is consistent with the Eighth Circuit’s
holding in O’Brien v. City of Greers Ferry, 873 F.2d 1115 (8th Cir. 1989), that there is statutory
authority for payment of such fees.
Section 14-54-101 permits municipalities to “[a]ssociate with other municipalities for
the promotion of their general welfare” and to “[j]oin with other municipalities in the
purchase of equipment, supplies, or services.” Ark. Code Ann. § 14-54-101(4) and (5).
Although the present issue has never been addressed by this court, this statute has been
interpreted to allow municipalities to join together in the purchase of services, such as legal
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services. O’Brien, 873 F.2d 1115.6 Thus, municipal funds can be used to pay attorney’s fees
for public officials and employees who are not charged with a criminal offense, and who are
sued in their official capacity. Id.
In the present case, Appellant’s illegal-exaction claim consisted of two parts. First, she
alleged that the expenditure of monies by Springdale to join the MLDP is and was an illegal
exaction. Second, she claimed that the expenditure of monies by Springdale and the MLDP
to settle the Bitner case was an illegal exaction. Upon review, the circuit court did not err in
finding that both of these expenditures were lawful, and that neither constituted an illegal
exaction. First, and foremost, an illegal exaction is an exaction that is either not authorized
by law or is contrary to law. See Brewer, 365 Ark. 531, ___ S.W.3d ___. That is simply not
the case here. Specifically, Springdale is authorized by section 14-54-101 to participate in an
association, such as the AML, for the promotion of the general welfare of the city and to join
with other municipalities to purchase services. The MLDP is a subset of such an association
and provides beneficial services, i.e. legal services, for the promotion of Springdale’s general
welfare. Moreover, the expenditure of monies to settle the Bitner case was not an illegal
exaction because the payment of a settlement was allowed by the MLDP’s terms and
conditions. As such, viewing the evidence in the light most favorable to Appellant, the circuit
court did not err in granting summary judgment because no material issues of fact exist as to
Appellant’s claim that there was an illegal use of public funds.
6
Although Eighth Circuit decisions are not binding on this court, see Heinemann v. Hallum, 365 Ark.
600, ___ S.W.3d ___ (2006), they may be used to provide guidance in situations, such as this, where our
court has never addressed an issue before it.
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b. Illegal Payment of Punitive Damages
Appellant’s second argument is that issues of fact exist as to the amount of illegal
payment of punitive damages. Essentially, this is a challenge to the Bitner settlement. Here,
the circuit court found that the settlement expenditure by Springdale and the MLDP was
lawful and not an illegal exaction. This finding was not in error as no genuine issues of
material fact exist as to the settlement. Specifically, and despite Appellant’s arguments to the
contrary, the settlement was not a payment of punitive damages in violation of Arkansas law.
First, Appellant does not cite to any authority besides her own speculation as support
for her argument. This court will not consider arguments that are unsupported by citation
to legal authority or convincing argument. See Ormond Enters., Inc., 369 Ark. 250, ___
S.W.3d ___. Second, as discussed above, the Bitner settlement was authorized by the MLDP’s
terms and conditions, and our public policy favors settlement of litigation. See Douglas v.
Adams Trucking Co., Inc., 345 Ark. 203, 46 S.W.3d 512 (2001) (explaining that without
question, the law favors the amicable settlement of controversies). Lastly, the language of the
settlement agreement clearly indicates that the plaintiff in Bitner released the compensatory and
punitive claims against Springdale, Van Hoose, and Hinds prior to entry of the final order and
judgment. Thus, no issues of material fact exist that would require reversal of the circuit
court’s order granting summary judgment.
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c. Dry-hole Contract
Appellant’s next argument is that the MLDP is a dry-hole contract, and therefore an
illegal exaction. Additionally, she claims that because this is a contract, the parol evidence rule
limits admission of matters not within the written agreement.7
Initially, Appellant argues that the program is a contract. In support of this, she focuses
on the use of the word “agreement” throughout the MLDP’s terms and conditions. We are
unpersuaded by Appellant’s “agreement” argument. The use of the word “agreement” does
not render something a contract; rather, the essential elements to a contract are competent
parties, subject matter, legal consideration, mutual agreement, and mutual obligations. See
Stewart v. Combs, 368 Ark. 121, ___ S.W.3d ___ (2006). Appellant has failed to show any of
these things.
The MLDP is a program within the AML that provides legal services to those
municipalities who opt to join the program. Municipalities are authorized to associate for the
promotion of their general welfare, including the purchase of services such as those provided
here by the MLDP. As we stated in City of Marianna v. Arkansas Municipal League, 291 Ark.
7
Appellant also argues that O’Brien, 873 F.2d 1115, is not controlling precedent and that res judicata
and collateral estoppel do not apply. As previously discussed, O’Brien is not controlling or binding on this
court, but we may look to it for guidance. Appellant’s res judicata and collateral estoppel arguments were
actually issues brought up by Appellees in their motion for summary judgment based upon Appellant’s attempt
to intervene in the Bitner case. The record is devoid of any explicit ruling as to these issues, such that they
cannot be considered on appeal. See Beverly Enters.-Ark., Inc. v. Thomas, ___ Ark. ___, ___ S.W.3d ___ (June
21, 2007). Nevertheless, res judicata does not apply because she was not a party to the previous action and
collateral estoppel does not apply because she was denied intervention such that the issue of whether the
settlement agreement was an illegal exaction was not part of the Bitner case. See Martin v. Pierce, ___ Ark. ___,
___ S.W.3d ___ (May 17, 2007) (explaining that res judicata bars litigation if both suits involve the same
parties or their privies); Parker v. Johnson 368 Ark. 190, ___ S.W.3d ___ (2006) (explaining that the doctrine
of collateral estoppel bars the relitigation of issues of law or fact actually litigated by the parties in the first suit).
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74, 722 S.W.2d 578 (1987), municipalities have the option of joining the program and it is
not required. There, we held that the MLDP was not an insurance contract. Id. Upon our
review, it is clear to this court that the MLDP is not a contract at all. Rather, it is a program
within a constitutionally valid association. See Ark. Code Ann. § 14-54-101; O’Brien, 873
F.2d 1115.
Appellant also argues that the fact that this program is charging its members taxpayer
money in return for the possibility of services and the possibility of indemnity makes it look
like a contractual arrangement, valid, ultra vires or otherwise, such that it falls squarely within
the illegal-exaction prohibitions of Barnhart v. City of Fayetteville, 335 Ark. 57, 977 S.W.2d
225 (1998).8 Specifically, she argues that Barnhart is the controlling precedent in this case
because it deals with public contracts. She contends that in this case, as in Barnhart, there is
the possibility that services might not be received because of the agreement’s lack of
mutuality, which creates a dry hole. Specifically, she argues that the contract is illegal and
unenforceable since a dry hole is created because the MLDP has the right to unilaterally
terminate the program and no obligation to defend or pay damages.
This argument fails. Barnhart is distinguishable from the present case because there the
city’s agreement to unconditionally guarantee the obligations of another city and county was
in violation of article 16, section 1 of the Arkansas Constitution, and therefore was
unauthorized and ultra vires. In this case, Springdale had the statutory authority to join an
8
It should be noted that Appellant is actually relying upon the holding in the first Barnhart case,
Barnhart v. City of Fayetteville, 321 Ark. 197, 900 S.W.2d 539 (1995), which was summarized in Barnhart, 335
Ark. 57, 59, 977 S.W.2d 225, 226.
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association for the purposes of promoting the general welfare of the municipality and to
purchase services. See Ark. Code Ann. § 14-54-101; O’Brien, 873 F.2d 1115. Thus, the
alleged illegal exaction in this case is wholly different than the illegal exaction found to exist
in Barnhart, and the MLDP is not a dry-hole contract.
Appellant next argues that the parol evidence rule precludes this court from considering
Appellees’ allegation that the MLDP includes services not within its written contract.
Specifically, she maintains that the Hayes affidavit contains inadmissible parol evidence
because it attempts to vary the terms of the agreement. Finally, she asserts that an issue of fact
exists as to whether there is indeed any consideration in return for the money paid to the
MLDP and that issue cannot be dismissed on summary judgment.
This argument fails. Parol evidence may not be admitted to alter, vary, or contradict
the written contract, but it may be admitted to prove an independent, collateral fact about
which the written contract was silent. See Alexander v. McEwen, 367 Ark. 241, ___ S.W.3d
___ (2006). Here, the MLDP is not a contract; consequently, the parol evidence rule is not
a factor.
d. All Necessary Parties are Before the Court
Appellant’s last argument is that all necessary parties are before the court. This issue
was raised by Appellees in their motion for summary judgment. Specifically, they argued that
Appellant failed to join all the necessary parties to this action, specifically the plaintiff in Bitner
because he is the holder of the sum of money claimed to have been illegally exacted.
Therefore, according to Appellees, no relief could be accorded to the class among the named
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parties. Now, on appeal, Appellant argues that all necessary parties are before the court
because the plaintiff in Bitner had no possibility of being required to refund any of the monies
received in the settlement, and thus was not a necessary party under Ark. R. Civ. P. 19(a).
This is a moot issue as the court correctly determined that the expenditure of monies
was not an illegal exaction. As a general rule, appellate courts of this state will not review
issues that are moot. See Potter v. City of Tontitown, ___ Ark. ___, ___ S.W.3d ___ (Oct. 4,
2007); Allison v. Lee County Election Comm’n, 359 Ark. 388, 198 S.W.3d 113 (2004). To do
so would be to render advisory opinions, which this court will not do. Id. Generally, a case
becomes moot when any judgment rendered would have no practical legal effect upon a thenexisting legal controversy.
Id.
There are two recognized exceptions to the mootness
doctrine. Id. The first one involves issues that are capable of repetition, but that evade
review. And the second one concerns issues that raise considerations of substantial public
interest which, if addressed, would prevent future litigation. Id. The issue of joinder does not
fall within any of these exceptions. Consequently, because the case was properly dismissed,
it does not matter whether or not the plaintiff in Bitner should have been joined to the action.
e. Conclusion
The circuit court did not err in granting summary judgment because there are not
material facts in dispute and there was not an illegal exaction of public funds. A review of the
record reveals that Appellant simply failed to meet proof with proof and did not demonstrate
material issues of fact as to (1) an illegal use of public funds, and (2) the amount of illegal
payment of punitive damages. Additionally, Appellant’s dry-hole contract argument also fails
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since the MLDP is not a contract because it was within the purview of section 14-54-101 for
municipalities to create and join the MLDP to promote the general welfare of their respective
municipalities. Finally, Appellant’s joinder argument is moot as the circuit court properly
granted summary judgment as no issues of fact exist and it was originally Appellees’
contention that the plaintiff in Bitner should have been a named party in this case.
IV. Findings of Fact and Conclusions of Law
Appellant’s final argument is that the circuit court erred by failing to make findings of
fact and conclusions of law pursuant to Ark. R. Civ. P. 52. Specifically, Appellant, citing
BPS, Inc. v. Richardson, 341 Ark. 834, 20 S.W.3d 403 (2000), claims that once a timely
request for findings of fact and conclusions of law is filed affecting the court’s decision
whether to certify a suit as a class action, the circuit court is required to enter written findings
of fact and conclusions of law analyzing the class criteria and reasoning for the court’s decision.
She contends that she presented her motion for specific findings of fact and conclusion of law,
and the circuit court ignored this request and made no findings or conclusions as required by
Rule 52(b).
This argument is without merit. First, the cases cited in support of her proposition are
based upon Rule 23 certification. This court has made clear that Rule 23.2 is not a subset of
Rule 23. See McKinney, 334 Ark. 582, 976 S.W.2d 945. It is a completely separate rule that
incorporates provisions of Rule 23 only to the extent provided in Rule 23.2. Id. Second,
Rule 23.2 does not require class certification in order to proceed under that rule. Id. As
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such, Appellant’s request pursuant to Rule 52 was in error and the circuit court did not err
in denying her request.
Affirmed.
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