Gil Landers et al. v. Ken Jameson

NOT DESIGNATED FOR PUBLICATION

ARKANSAS COURT OF APPEALS

JUDGE KAREN R. BAKER

DIVISION IV

CA01-269

APRIL 3, 2002

GIL LANDERS, et al. AN APPEAL FROM PULASKI COUNTY

APPELLANTS CIRCUIT COURT

NO. CIV99-1411

V.

HONORABLE WILLARD PROCTOR,

KEN JAMESON CIRCUIT JUDGE

APPELLEE

REVERSED and REMANDED

Gil Landers, d/b/a Big Daddy's Pawn Shop, and Linda Stewart have appealed from a decision of the Pulaski County Circuit Court upon remand from our May 24, 2000, decision in appeal number CA99-1273. This dispute began when appellee Ken Jameson's wife noticed that a ring and two of her bracelets were missing in June 1998, shortly after Ms. Stewart had cleaned their house. In July 1998, the Jamesons reported the property as missing to the police. The police located two similar bracelets at Big Daddy's Pawn Shop and placed a hold on them. The Jamesons identified the jewelry as Ms. Jameson's and filed an affidavit of possession with Mr. Landers. After Mr. Landers refused to return the property to the Jamesons, Mr. Jameson filed an action in municipal court against Mr. Landers and Ms. Stewart. In his complaint, Mr. Jameson stated a claim of conversion against Ms. Stewart and based his claim against Mr. Landers on Ark. Code Ann. § 18-27-202 (1987). In their affidavit of possession and ownership filed in municipal court, Mr. and Mrs. Jameson stated that, in accordance with Ark. Code Ann. § 18-27-202, the two bracelets in the possession of Big Daddy's Pawn Shop that had been pawned by Ms. Stewart belonged to them and were illegally converted from their possession.

Arkansas Code Annotated section 18-27-202 provides:

When any pawnbroker in this state shall, in good faith or otherwise, acquire, by purchase, pawn, gift, or otherwise, any article of personal property which has been stolen from the owner thereof, the pawnbroker shall return the personal property to the true owner thereof upon his request and the execution of his affidavit of possession.

Arkansas Code Annotated section 18-27-203 (1987) provides for a pawnbroker's liability upon his failure to return such property to its owner:

(a) If any pawnbroker shall fail or refuse to return any property to the true owner thereof when requested to do so by him as provided in § 18-27-202, it shall be necessary for the true owner to resort to legal action to recovery the property.

(b) In the event that the true owner is successful in a legal action, the defendant pawnbroker shall be required to pay all reasonable expenses incurred by the owner in recovering the property, including court costs and attorneys' fees, and any damages suffered by the true owner as a result of the pawnbroker failing or refusing to return the property to the true owner when so requested by him.

On February 5, 1999, the municipal judge entered judgment for Mr. Jameson, finding that Ms. Stewart had taken the items from his house without his permission and had pawned them at Big Daddy's Pawn Shop. The municipal judge ordered the jewelry returned to Mr. Jameson after the police hold was released and assessed the costs jointly against both defendants.

Mr. Landers and Ms. Stewart then appealed the municipal court's decision to circuit court. Citing Ark. Code Ann. §§ 18-27-202 and 203, Mr. Jameson filed a demand for attorney's fees and costs in circuit court. In his pretrial brief, Mr. Landers stated: "Ken Jameson would not be entitled to attorney fees and costs from Gil Landers as Gil Landers never refused to give him the bracelets but rather awaited the court's determination as to whom the rightful owner was and to punish him for that would be a denial of Gil Lander's constitutional right of due process...." Mr. Landers also stated that "to punish him for [claiming the right to have a pre-deprivation hearing] would be denying his right to due process." Without addressing the due process issue, the circuit judge entered a decision finding that Mr. Jameson had not met his burden of proving by a preponderance of the evidence that the jewelry was his property. From that decision, Mr. Jameson filed an appeal to this court.

In our May 24, 2000, decision, we reviewed the evidence and concluded that the circuit judge had clearly erred in failing to find that Mr. Jameson had established ownership of the jewelry. Quoting Ark. Code Ann. §§ 18-27-202 and 203, we held that, "[a]s Mr. Jameson has now successfully pursued legal action against Mr. Landers, Mr. Landers shall be required to return the items and pay Mr. Jameson's costs of recovery and attorney's fees." We also held that, if the items could not be returned, Mr. Landers should be ordered to pay, in addition to the costs and attorney's fees, the damages caused by his failure to return them. We found Ms. Stewart jointly and severally liable for an amount equal to the value of the property at the time of its conversion. We then reversed and remanded the case for the entry of a judgment consistent with that opinion.

On June 9, 2000, Mr. Landers and Ms. Stewart filed a petition for rehearing, arguing that we had erred in basing our decision on Ark. Code Ann. §§ 18-27-202 and 203. They argued that, although Mr. Landers had raised the attorney's fees and constitutionality arguments before the trial court, those issues had not been ruled upon and were not at issue on appeal. They also asserted that, because the constitutionality of the two statutes was an issue of first impression, pursuant to Supreme Court Rule 1-2, only the supreme court could decide it. On June 28, 2000, we denied the petition for rehearing without comment.

On May 30, 2000, Mr. Jameson filed a confirmation of attorney's fees and costs pursuant to Ark. Code Ann. § 18-27-203 in circuit court. In response, Mr. Landers argued that appellee's request for attorney's fees was grossly unreasonable and that his attorneys had failed to itemize their billable hours. On July 14, 2000, a hearing was held before the circuit court. Mr. Landers's attorney stated that the issues to be resolved at that hearing were the attorney's fees and the constitutionality of the statutes. He argued that the fees requested were unreasonable and that Ark. Code Ann. § 18-27-203 did not provide for attorney's fees incurred on appeal. He also argued that Mr. Jameson should not recover his attorney's fees incurred from the original circuit court action, because he had not been successful there. Further, he argued that, under the statute, Mr. Landers should not be responsible for Mr. Jameson's attorney's fees if there was no finding of wrongdoing on Mr. Landers's part. He stated:

Your Honor, we also have the issue of the constitutionality of the statute. We have - from the start it's been our position that the statute itself is unconstitutional as it applies to Mr. Landers; we have argued that. There has never been a decision made on the constitutionality of the statute itself. We would ask that this Court - the Court of Appeals bypassed that, it was brought up in the trial here, but was not addressedbecause when Judge Thompson found that he had not reached his burden of proving ownership, the statute didn't come into play. Had he found that he reached his burden, then it would've come into play.

So, it's our position that the ... Court of Appeals reversed Judge Thompson as to that issue. The other issue never came in until now.

In response, Mr. Jameson's attorney stated that this argument had been raised and resolved and was res judicata. The circuit judge found that, because we had denied the petition for rehearing without opinion, we had found the statutes constitutional.

The circuit judge entered a judgment for Mr. Jameson stating that Mr. Landers had tendered the bracelets to the court and that, upon Mr. Jameson's examination and acceptance of the items, that portion of this court's decision would be satisfied. He also stated that, if the items are not accepted, or found in the same condition as when they were exhibited at trial, Mr. Landers and Ms. Stewart would be jointly and severally liable to Mr. Jameson for $2,773.87. Additionally, the circuit judge ordered Mr. Landers to pay Mr. Jameson's costs and attorney's fees under Ark. Code Ann. § 18-27-203 in the amount of $13,434.75. Although both Mr. Landers and Ms. Stewart are listed as appellants in this appeal, their brief is focused entirely on Mr. Landers's arguments.

The Statutes' Constitutionality

Mr. Landers argues that Ark. Code Ann. §§ 18-27-202 and 203 unconstitutionally deprive him of his property interest in pawned property without due process of law, because they provide for his relinquishment of his interest in a pawned item without a pre-deprivation hearing to determine its ownership. In his brief, Mr. Landers has cited several cases holding that a pawnbroker has a constitutionally-protected interest in pledged goods even if they turnout to be stolen and asks us to strike down Ark. Code Ann. §§ 18-27-202 and 203 as unconstitutional. In response, Mr. Jameson states that he has asserted his rights under Ark. Code Ann. §§ 18-27-202 and 203 at all levels of this proceeding and that Mr. Landers had ignored that argument during the previous appeal at his own peril. Therefore, Mr. Jameson argues that the trial judge was correct in finding that the constitutionality of those statutes was implicitly decided by our May 24, 2000, opinion and is now the law of the case. We disagree.

In the first decision, the trial judge simply found that Mr. Jameson had not met his burden of proving that the jewelry was his property. He did not address the question of the statutes' constitutionality, nor was he required to do so. Given his finding that Mr. Jameson failed to meet his burden of proof, it was not necessary that the trial judge determine whether the statutes deprived Mr. Landers of due process. Also, that question was not at issue in the first appeal to this court, and we did not expressly or implicitly address it. Therefore, the circuit judge's finding on remand that we had implicitly held the statutes to be constitutional is clearly erroneous. However, in light of our earlier decision holding that the circuit judge had clearly erred in failing to find that Mr. Jameson had established ownership of the jewelry, the question of the statutes' constitutionality must now be addressed. Accordingly, we reverse and remand so that the circuit judge can issue a ruling on that question.1

The Court of Appeals's Jurisdiction

In his second point on appeal, Mr. Landers argues that we did not specifically rule that these statutes are constitutional; however, if we did implicitly rule on that issue, we acted outside our jurisdiction according to Supreme Court Rule 1-2. As discussed above, we did not specifically or implicitly address the constitutionality of these statutes. However, if we had chosen to address that subject, we would have had jurisdiction to do so. Supreme Court Rule 1-2(a) does not provide exclusive jurisdiction with the supreme court for cases involving the interpretation or construction of an act of the general assembly. Under subsection (b) of that Rule, cases of first impression or those involving substantial questions of law concerning the validity, construction, or interpretation of an act of the general assembly may be reassigned by the supreme court.

Mr. Landers also argues that our earlier finding that he refused to return the jewelry was dictum. We hold that our statement was not dictum, because it was that refusal that triggered the application of Ark. Code Ann. § 18-27-203.

Whether Mr. Landers Violated Ark. Code Ann. § 18-27-203

In his third point on appeal, Mr. Landers argues that we should reverse the award of attorney's fees, costs, and interest because Mr. Jameson did not plead that Mr. Landers had failed to return the jewelry in violation of Ark. Code Ann. § 18-27-203. According to Mr. Landers, this was simply a replevin action. We disagree. Mr. Jameson clearly stated in his pleadings before the municipal court and the circuit court that he brought this action against Mr. Landers on the basis of Ark. Code Ann. §§ 18-27-202 and 203.

The Reasonableness of the Attorney's Fees

In his fourth point on appeal, Mr. Landers argues that the trial judge erred in the amount of attorney's fees awarded to Mr. Jameson. We need not decide that issue because its determination will depend upon the outcome of the appellants' attack on the constitutionality of the statutes that provide for such fees.

Reversed and remanded.

Hart and Robbins, JJ., agree.

1 Mr. Jameson points out that Mr. Landers has not notified the Arkansas Attorney General of his constitutional challenge to the statutes as required by Ark. Code Ann. § 16-111-106 (1987). See Brumley v. Naples, 320 Ark. 310, 896 S.W.2d 860 (1995). Because appellant's constitutionality arguments were not ruled on at the trial level, we express no opinion at this point as to the effect of his failure to do so.