Alan Prendergast v. Leo Craft, et al.
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ARKANSAS COURT OF APPEALS
DIVISIONS I, III, and IV
No.
ALAN PRENDERGAST
CA 06-1282
Opinion Delivered
APPELLANT
V.
LEO CRAFT, et al.
APPELLEES
MAY 14, 2008
APPEAL FROM THE BENTON
COUNTY CIRCUIT COURT,
[NOS. CIV-05-371-4, CIV.-05-431-4]
HONORABLE JOHN R. SCOTT,
JUDGE
AFFIRMED
JOHN B. ROBBINS, Judge
Appellant Alan Prendergast devised a scheme to cut and sell timber from lands owned
by his sisters, appellees Kathleen Craft and Gayle Rutledge.1 However, he did not have
permission to do so. Prendergast contracted with appellee Wyatt Williams, d/b/a Long Valley
Timber, to cut the timber. Williams, in turn, contracted to sell the harvested logs to appellee
Missouri Walnut, LLC. Once the scheme was exposed, two suits, including cross-claims and
counterclaims, were filed and later consolidated. A Benton County jury found Prendergast
liable to each of the appellees and ordered him to pay $43,276.45 in compensatory damages
and $85,000 in punitive damages to Missouri Walnut; $48,276.45 to the Crafts; and $15,000
in compensatory damages and $35,000 in punitive damages to Williams. The damages
1
Craft’s husband, Leo Craft, is also an appellee. We will collectively refer to these
appellees as the Crafts.
awarded to the Crafts were trebled pursuant to Ark. Code Ann. § 18-60-102 (Repl. 2003).
Prendergast raises three points on appeal, challenging the jury instructions on the measure of
the Crafts’ damages, the punitive damages awards to both Missouri Walnut and Williams, as
well as the compensatory award to Williams. We affirm.
Facts and Proceedings in Circuit Court
Alan Prendergast entered into an agreement with Wyatt Williams under the terms of
which Williams was to harvest certain walnut trees from property Prendergast represented was
owned by him. Pursuant to this agreement, Prendergast signed a timber deed to Williams on
January 21, 2005. This property was actually owned by the Crafts, and Prendergast later
testified that he did not have the authority to sign the timber deed. Williams cut and
harvested the walnut logs pursuant to their agreement. On January 26, 2005, Williams
entered into a contract for Missouri Walnut to purchase the 808 walnut logs that had already
been cut, set out, and identified. The purchase price was $43,276.45. Missouri Walnut paid
for the logs on January 26, 2005. One check was payable to Williams in the amount of
$18,310.58. The second payment was made to Prendergast in the amount of $24,965.87.
Missouri Walnut did not have any direct contact with Prendergast, relying on
communications from Williams concerning Prendergast’s sale of the logs.
Subsequent to Missouri Walnut’s payment for the logs, the Crafts informed Missouri
Walnut that Prendergast did not have any ownership interest in the property and did not have
their consent to the cutting or sale of the logs. The Crafts intended to sell the logs to other
timber companies for approximately $40,000.
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Neither Missouri Walnut nor Williams researched the Benton County real estate
records to determine the ownership of the real estate prior to issuing the two checks to
Prendergast and Williams. However, there was testimony from Williams and others in the
timber industry that industry standards did not require such a title search.
On March 2, 2005, Missouri Walnut filed a complaint in replevin against the Crafts
asserting that it was a “good faith purchaser” who had acquired good title to the 808 logs and
was seeking to recover possession of the logs Williams had cut. Missouri Walnut later
amended its complaint to seek, in the alternative, damages for the value of the logs. The
Crafts filed an answer and counterclaim in which they generally denied the allegations of the
complaint and sought treble damages for the injury to their land.
On March 11, 2005, Missouri Walnut filed a companion suit against Prendergast and
Williams, asserting breach-of-contract claims against each and a fraud claim against
Prendergast. The complaint sought damages in the amount of $43,276.45 (the amount
Missouri Walnut paid for the logs) against each defendant. Missouri Walnut also asserted that
Prendergast should be liable for punitive damages for the fraud claim. Williams and
Prendergast each denied the material allegations of the complaint. In addition, Williams filed
a cross-claim against Prendergast, seeking judgment for any amounts Williams might be
ordered to pay Missouri Walnut, together with punitive damages. On May 8, 2006,
Prendergast filed a cross-complaint against Williams, alleging that Williams was negligent in
not waiting until Prendergast had obtained his sisters’ permission before cutting the timber.
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The cross-complaint sought judgment for any amount Prendergast might be ordered to pay.
The circuit court consolidated both cases for trial.
On July 8, 2005, the Crafts filed a cross-claim against Williams and Prendergast,
alleging that Prendergast and Williams had trespassed across their lands and destroyed timber
without permission. The cross-complaint sought damages of $43,276.45 for the value of the
timber, together with the $5,000 cost of restoring the land.
The case was tried to a jury over two days. The jury returned a verdict by answering
a series of interrogatories. The interrogatories were as follows:
INTERROGATORY NO. 1 As between Missouri Walnut, LLC and Alan
Prendergast, we find in favor of Alan Prendergast.
ANSWER: Not answered
INTERROGATORY NO. 2 As between Missouri Walnut, LLC and Alan
Prendergast, we find Alan Prendergast liable to Missouri Walnut, LLC in the amount
of $43,276.45. This interrogatory was signed by the foreman.
INTERROGATORY NO. 3 As between Missouri Walnut, LLC and Wyatt
Williams, d/b/a Long Valley Timber, we find in favor of Wyatt Williams, d/b/a Long
Valley Timber. This interrogatory was signed by the foreman.
INTERROGATORY NO. 4 As between Missouri Walnut, LLC and Wyatt
Williams, d/b/a Long Valley Timber, we find Wyatt Williams, d/b/a Long Valley
Timber, liable to Missouri Walnut, LLC in the amount of $_____________.
ANSWER: Not answered
INTERROGATORY NO. 5 As between Leo and Kathleen Craft and Gale
Lyn Rutledge and Alan Prendergast, we find in favor of Alan Prendergast. ANSWER:
Not answered
INTERROGATORY NO. 6 As between Leo and Kathleen Craft and Gale
Lyn Rutledge and Alan Prendergast, we find Alan Prendergast liable to Leo and
Kathleen Craft and Gale Lyn Rutledge in the amount of $48,276.45. This
interrogatory was signed by the foreman.
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INTERROGATORY NO. 7 As between Leo and Kathleen Craft and Gale
Lyn Rutledge and Wyatt Williams, d/b/a Long Valley Timber, we find in favor of
Wyatt Williams, d/b/a Long Valley Timber. This interrogatory was signed by nine
jurors.
INTERROGATORY NO. 8 As between Leo and Kathleen Craft and Gale
Lyn Rutledge and Wyatt Williams, d/b/a Long Valley Timber, we find Wyatt
Williams, d/b/a Long Valley Timber, liable to Leo and Kathleen Craft and Gale Lyn
Rutledge in the amount of $_________. ANSWER: Not answered
INTERROGATORY NO. 9 As between Alan Prendergast and Wyatt
Williams, d/b/a Long Valley Timber, we find in favor of Wyatt Williams, d/b/a Long
Valley Timber. This interrogatory was signed by the foreman.
INTERROGATORY NO. 10 As between Wyatt Williams, d/b/a Long
Valley Timber, and Alan Prendergast, we find Alan Prendergast liable to Wyatt
Williams, d/b/a Long Valley Timber, in the amount of $15,000.00. This interrogatory
was signed by nine jurors.
INTERROGATORY NO. 11 As between Wyatt Williams, d/b/a Long
Valley Timber, and Alan Prendergast, we find in favor of Alan Prendergast.
ANSWER: Not answered
INTERROGATORY NO. 12 As between Alan Prendergast and Wyatt
Williams, d/b/a Long Valley Timber, we find Wyatt Williams, d/b/a Long Valley
Timber, liable to Alan Prendergast in the amount of $____________. ANSWER: Not
answered
INTERROGATORY NO. 13 Do you find Wyatt Williams, d/b/a Long
Valley Timber, is entitled to recover punitive damages from Alan Prendergast?
ANSWER: Yes This interrogatory was signed by ten jurors.
INTERROGATORY NO. 14 If your answer to Interrogatory No. 13 is yes,
state the amount of punitive damages which Wyatt Williams, d/b/a Long Valley
Timber, should recover from Alan Prendergast. ANSWER: $35,000.00 This
interrogatory was signed by ten jurors.
INTERROGATORY NO. 15 Do you find that Missouri Walnut LLC is
entitled to recover punitive damages from Alan Prendergast? ANSWER: Yes This
interrogatory was signed by ten jurors.
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INTERROGATORY NO. 16 If your answer to Interrogatory No. 15 is yes,
state the amount of punitive damages which Missouri Walnut, LLC should recover
from Alan Prendergast. ANSWER: $85,000.00 This interrogatory was signed by ten
jurors.
Pursuant to agreement of the parties, the circuit court then determined that Prendergast was
guilty of willful misconduct so that the damages awarded to the Crafts should be trebled
pursuant to Ark. Code Ann. § 18-60-102. The court reduced the award to the Crafts by
$20,005, the amount a third party offered to pay for the logs. Judgment was entered
accordingly on June 1, 2006. Prendergast filed a motion for new trial and a motion for
judgment notwithstanding the verdict on June 12, 2006, alleging that he was entitled to a
new trial to reduce the excessive damages award and to adjust the jury’s error in the
assessment of damages; that the verdicts were clearly against the preponderance of the
evidence; and that the jury was improperly instructed as to the measure of damages. The
motions were deemed denied and this appeal followed.2
Arguments on appeal
I. Measure of damages
Prendergast first argues that the circuit court erred in refusing his proffered instruction
taken from this court’s decision in King v. Powell, 85 Ark. App. 212, 148 S.W.3d 792 (2004),
as to the measure of damages. It is well settled that this court will not reverse a circuit court’s
refusal to give a proffered jury instruction unless there was an abuse of discretion. Williams v.
First Unum Life Ins. Co., 358 Ark. 224, 188 S.W.3d 908 (2004). Moreover, it is not error for
2
The circuit court awarded Missouri Walnut $15,406.21 in attorney’s fees in a
subsequent order. Prendergast did not appeal from the fee award.
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the circuit court to refuse a proffered jury instruction when the stated matter is correctly
covered by other instructions. Id.
In King, the jury was instructed as follows:
If the answer to an interrogatory requires you to assess damages against
Mr. Clay King in favor of Linda Powell, you will do so in the following manner:
1. If you find that Ms. Powell’s intended use of the damaged or
destroyed trees was for ornamental or shade purposes, then you will award
damages equal to the value of the damaged or destroyed trees, if any, plus the
cost of replacing stone or soil displaced or removed, if any.
2. Otherwise, you will award damages equal to the difference in the fair
market value of Ms. Powell’s property before and after the trespass.
85 Ark. App. at 220-21, 148 S.W.3d at 797. This court held that this instruction was a correct
statement of the law. In the present case, the jury was instructed as follows:
If an interrogatory requires you to assess the damage to timber and lands
belonging to Leo Craft, Kathleen Craft, and Gale Rutledge, you must then fix the
amount of money which will reasonably and fairly compensate them for the following
elements of damage:
First, the fair market value of the timber cut.
Second, the reasonable expense of necessary repairs to any property damaged.
Prendergast objected to the instruction given by the circuit court as not being a correct
statement of the law and proffered an instruction based on King.
Prendergast’s argument fails to acknowledge that there could be other measures of
damages than that provided for in King. In Stoner v. Houston, 265 Ark. 928, 582 S.W.2d 28
(1979), the supreme court noted that there were two measures of damages in actions brought
under section 18-60-102 — the value of the timber or the damage to the market value of the
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land. Similar instructions were given in Jackson v. Pitts, 93 Ark. App. 466, 220 S.W.3d 265
(2005), and Auger Timber Co. v. Jiles, 75 Ark. App. 179, 56 S.W.3d 386 (2001), where this
court noted that the market value of the timber was one of two possible measures of damages.
Prendergast concedes that the Crafts can recover the value of the timber, regardless of
the use they make of their land, by suing for conversion. That is, in essence, what the Crafts
did because, under section 18-60-102, a party can recover either the value of the timber (not
just the value of the trees as shade trees) or the diminution in the market value of the land.
Revels v. Knighton, 305 Ark. 109, 805 S.W.2d 649 (1991); Stoner, supra. As noted above, it is
not error for a circuit court to refuse to give a proffered jury instruction where the stated
matter is correctly covered by other instructions. The circuit court’s instruction as to the fair
market value of the timber as being a measure of the Crafts’ damages was a correct statement
of the law. It also covered the area sought to be covered by the proffered instruction.
Therefore, we cannot say that the circuit court abused its discretion in not giving
Prendergast’s instruction based on King v. Powell.
II. Punitive damages
Prendergast argues that the punitive-damages awards to Missouri Walnut and to Wyatt
Williams should be reversed because there is insufficient evidence to support the awards and
because they are the result of passion or prejudice by the jury.
Prendergast is procedurally barred from raising the first argument. He made no
directed verdict motion to dismiss either Missouri Walnut’s or Williams’s claim for punitive
damages, nor did he object to the jury being instructed on punitive damages. The failure to
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preserve the issue at one of these stages precludes Prendergast from now raising the issue on
appeal. Superior Fed. Bank v. Mackey, 84 Ark. App. 1, 129 S.W.3d 324 (2003). The first
objection appeared in his posttrial motion.
However, the same does not hold true for Prendergast’s argument that the
punitive-damages awards were excessive, even though that argument was also made for the
first time in the posttrial motion. Obviously, a party is unaware of the excessive nature of a
verdict until that verdict is rendered. We therefore consider the merits of this argument.
When the argument on appeal is that the damages are excessive as a matter of state law,
we review the proof and all reasonable inferences in the light most favorable to the appellees,
and we determine whether the verdict is so great as to shock the conscience of this court or
to demonstrate passion or prejudice on the part of the trier of fact. Calvary Christian Sch., Inc.
v. Huffstuttler, 367 Ark. 117, 238 S.W.3d 58 (2006). When reviewing an award of punitive
damages, we consider the extent and enormity of the wrong, the intent of the party
committing the wrong, all the circumstances, and the financial and social condition and
standing of the erring party. Id.
Here, the awards do not shock the conscience of the court. Prendergast engaged in
a fraudulent scheme to sell timber that he did not own from property owned by his sisters.
This involved lying to Williams about the ownership of the timber, and doing so with
knowledge that Williams would be selling the logs on to a mill. Prendergast testified that he
knew that he did not own the land or the timber. Also, when confronted by Missouri
Walnut, Prendergast refused the request to refund the money paid to him. Instead, he
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deposited the funds into his account and used them for gambling and to take a trip to Hawaii.
Prendergast does not identify the evidence that he claims demonstrates that the punitive
damages are the result of passion or prejudice. This court may not substitute its judgment for
the jury’s when there is a basis in the evidence for the award and when there is no evidence,
appropriately objected to, which tends to create passion or prejudice. Wal-Mart Stores, Inc. v.
Tucker, 353 Ark. 730, 120 S.W.3d 61 (2003).
Prendergast sets out some of the elements required for a due process challenge to the
punitive-damages awards; however, neither in the trial court nor in his appeal before us does
he specifically make a constitutional argument. Therefore, we need not address the
constitutional factors.
Compensatory damages to Williams
Prendergast argues that the circuit court erred in failing to direct a verdict on
Williams’s claim against him. A directed-verdict motion is a challenge to the sufficiency of
the evidence, and when reviewing the denial of a motion for a directed verdict, this court
determines whether the jury’s verdict is supported by substantial evidence. Ken’s Discount
Bldg. Materials, Inc. v. Meeks, 95 Ark. App. 37, 233 S.W.3d 176 (2006). Substantial evidence
is evidence that is of sufficient force and character that it will, with reasonable certainty,
compel a conclusion one way or the other, without having to resort to speculation or
conjecture. Id. When determining the sufficiency of the evidence, this court reviews the
evidence and all reasonable inferences arising therefrom in the light most favorable to the
party on whose behalf judgment was entered. Id.
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In this case, the jury was instructed that Williams had brought a claim for deceit against
Prendergast and the elements of that claim. The only objection Prendergast made was to
request a jury instruction on constructive notice that the circuit court rejected. Williams
presented evidence that he suffered a loss of business related to Prendergast’s action. In the
year prior to the transaction with Prendergast, Williams had approximately $300,000 in sales
of walnut logs but, since that transaction, he had only $130,000 to $150,000 in sales. He
attributed the decline in sales to the adverse publicity caused by Prendergast. By not objecting
to this testimony, Prendergast implicitly consented to the issue being tried. See Neste Polyester,
Inc. v. Burnett, 92 Ark. App. 413, 214 S.W.3d 882 (2005). The fact that Williams did not have
tax returns or other evidence to corroborate his testimony does not make his testimony that
he suffered a loss any less substantial because the lack of corroboration goes to the weight to
be given to the testimony, a matter within the sole province of the jury. See JAG Consulting
v. Eubanks, 77 Ark. App. 232, 72 S.W.3d 549 (2002).
Affirmed.
PITTMAN, C.J., BIRD, GLOVER, and HEFFLEY, JJ., agree.
GRIFFEN, J., concurs.
HART and BAKER, JJ. dissent.
GRIFFEN, J., concurring. Because appellant failed to challenge the submission of
punitive damages to the jury in his motions for directed verdict below, I reluctantly vote to
affirm the punitive damage awards in favor of Wyatt Williams and Missouri Walnut. I share
Judge Hart’s chagrin that the jury awarded punitive damages to Williams and Missouri
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Walnut, as they were, at the very least, enablers of Prendergast. Had the punitive damages
claim been properly challenged at trial, I would have voted to reverse it.
I believe that punitive damage awards serve a legitimate purpose in the law and
recognize that a vote to reverse the awards to Williams and Missouri Walnut could be viewed
as injecting the unpled issue of comparative fault into the case. Nevertheless, I think that if
Williams and Missouri Walnut were somehow victimized, their plight resulted from having
disregarded the responsibility to verify that Prendergast was authorized to give permission for
cutting the walnut timber and selling the logs. After all, Missouri Walnut was not a bona fide
purchaser, and Williams made no effort to perform a record search in order to determine if
Prendergast owned the timber that he purported to permit to be logged. I do not understand
why the jury awarded them punitive damages in light of evidence that they failed to
determine whether Prendergast owned what he purported to sell.
However, I do not share Judge Hart’s view that somehow places economic injuries
below bodily injuries for purposes of punitive damages awards. Punitive damages are not
awarded to make an injured party whole; that is the function of compensatory damages. See
Dunaway v. Troutt, 232 Ark. 615, 339 S.W.2d 613 (1960), overruled on other grounds by United
Ins. Co. of America v. Murphy, 331 Ark. 364, 961 S.W.2d 752 (1998). Rather, punitive
damages are awarded to punish an actor for intentional or reckless conduct that society seeks
to deter, and to (implicitly) encourage persons injured by that conduct to serve societal
interests by prosecuting the actor. See, e.g., D’Arbonne Constr. Co., Inc. v. Foster, 354 Ark. 304,
308, 123 S.W.3d 894, 898 (2003) (noting that punitive damages are justified “only where the
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evidence indicates that the defendant acted wantonly in causing the injury or with such a
conscious indifference to the consequences that malice may be inferred”); see also Jim Ray, Inc.
v. Williams, 99 Ark. App. 315, ___ S.W.3d. ___ (2007). In that sense, I see no legitimate
difference between awarding punitive damages for intentional or reckless conduct that results
in economic loss and doing so in cases of personal injury. I do not find the ratio of damages
in this case excessive; rather, I disagree with the premise that punitive damages were
appropriate on claims by Missouri Walnut and Williams.
I only vote to affirm, quite reluctantly, because it appears that appellant’s directed
verdict motions against Missouri Walnut and Williams did not address punitive damages. As
we do not consider on appeal allegations of error that were not presented below, see, e.g.,
Hackelton v. Malloy, 364 Ark. 469, 221 S.W.3d 353 (2006), I join the majority’s decision to
affirm the punitive damages awarded to Missouri Walnut and Williams. I do not like doing
so, and would prefer to vote to reverse the awards. However, appellant’s failure to challenge
the submission of punitive damages to the jury precludes appellate review of the awards.
HART, J., dissenting. I agree with the majority that there is no merit to Prendergast’s
first and third points. I, however, disagree with the majority’s and the concurrence’s
conclusion that most of Prendergast’s challenge to the punitive damage award was not
preserved and that the majority’s decision that the award was proper.
First, I note that Prendergast did make a directed-verdict motion. In it, he argued that
Williams was not entitled to damages because his reliance on the deed was not reasonable.
If he argued that no damages should be awarded, why does he also have to argue that punitive
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damages are also not appropriate? In Arkansas, it is axiomatic that “in the absence of an award
for damages for the underlying cause of action, punitive damages are improper.” Bell v.
McManus, 294 Ark. 275, 277, 742 S.W.2d 559, 560 (1988).
However, even assuming that the directed-verdict motion was insufficient,
Prendergast’s motion for a new trial sufficiently preserved his argument concerning the
excessiveness of the punitive damages. My review of the case law suggests that this is a
distinction without a difference. In Advocat, Inc. v. Sauer, 353 Ark. 29, 111 S.W.3d 346
(2003), the supreme court found that the appellant had failed to renew its directed-verdict
motion, yet found that the excessiveness of the punitive damages was preserved for review
because the appellant made a post-trial motion. Significantly, in evaluating whether the
damages were excessive, the supreme court first examined the evidence to determine whether
punitive damages were appropriate. I believe we did the very same thing in Superior Federal
Bank v. Mackey, 84 Ark. App. 1, 129 S.W.3d 324 (2003). By the majority indulging in this
manner of pseudo-precision when analyzing preservation in this area of the law, this court
is filling for the bar a position equivalent to the tailor in The Emperor’s New Clothes.
Even more indefensible is the majority’s conclusion that even though “Prendergast sets
out some of the elements required for a due process challenge to the punitive-damages awards
. . . neither in the trial court nor in his appeal before us does he specifically make a
constitutional argument.” The majority reaches this remarkable conclusion even though
Prendergast makes an argument based on factors enumerated in State Farm Mutual Insurance
Co. v. Campbell, 538 U.S. 408 (2003), albeit as quoted—with proper attribution—in Superior
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Federal Bank v. Jones & Mackey Construction, 93 Ark. App. 317, 219 S.W.3d 643 (2005). It
should be obvious to every person with a law degree that Campbell, a case out of the United
States Supreme Court, involves construction of the United States Constitution. Accordingly,
by citing Campbell Prendergast is making a constitutional argument. Ordinarily, the appellate
courts of this state disdain exalting form over substance. Velek v. State (City of Little Rock), 364
Ark. 531, 222 S.W.3d 182 (2006); Romes v. State, 356 Ark. 26, 144 S.W.3d 750 (2004);
Nettles v. City of Little Rock, 96 Ark. App. 86, 238 S.W.3d 635 (2006). I lament that the
majority did not take to heart the writing of one of our learned colleagues earlier this term
when Judge Marshall stated “doctrinal labels are not controlling; the substance of the
argument made is.” Miller v. Cothran, ___ Ark. App. ___, ___ S.W.3d ___ (Mar. 19, 2008)
(quoting “We must think things not words[.]” Oliver Wendell Holmes Jr., Law in Science
and Science in Law, 12 Harv. L. Rev. 443, 460 (1899)).
By holding that Prendergast has not preserved a “constitutional” argument, the
majority has excused itself from analyzing the reprehensibility of Prendergast’s conduct in the
exact way that Prendergast argued this point to the trial court and now argues on appeal,
despite his citation of unquestionably relevant authority. This is remarkable. While I am well
familiar with the convention established by appellate courts of this state whereby we decline
to consider arguments when an appellant fails to cite authority or make convincing argument,
see, e.g., Northport Health Services, Inc. v. Owens, 82 Ark. App. 355, 107 S.W.3d 889 (2003),
this is the first time I have seen an appellant’s argument barred where he has done both! I
believe that we owe Prendergast the same effort we expended in Jim Ray, Inc. v. Williams, 99
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Ark. App. 315, ___ S.W.3d ___ (2007) (super en banc) (citing Cooper Indus. Inc. v. Leatherman
Tool Group, Inc., 532 U.S.424 (2001).
Prendergast argued that in determining the appropriateness of a punitive-damage
award, we should evaluate the conduct in light of five factors enumerated in Superior Federal
Bank v. Jones & Mackey Construction, 93 Ark. App. 317, 219 S.W.3d 643 (2005). Those factors
are: 1) whether the harm caused was physical as opposed to economic; 2) whether the tortious
conduct evinced an indifference to or reckless disregard of the health or safety of others; 3)
whether the target of the conduct had financial vulnerability; 4) whether the conduct
involved repeated actions or was an isolated incident; 5) whether the harm was the result of
intentional malice, trickery, or deceit, or mere accident. Id. With regard to Missouri Walnut,
1) any harm suffered was economic and not physical; 2) any alleged tortious conduct on the
part of Prendergast did not demonstrate an indifference to or a reckless disregard of the health
or safety of others; 3) there is no evidence that Missouri Walnut was ever the specific target
of [his] conduct and there is no evidence of any financial vulnerability on Missouri Walnut’s
part; 4) the conduct was an isolated incident and not a series of repeated actions; and 5) there
was no evidence of any harm to Missouri Walnut that was the result of intentional malice,
trickery, or deceit directed specifically at Missouri Walnut. Under these facts, I believe the
inevitable conclusion is that the punitive-damage award to Missouri Walnut was excessive.
Looking next at the award to Williams, 1) the harm suffered was economic and not
physical; 2) any alleged tortious conduct on the part of Prendergast did not demonstrate an
indifference to or a reckless disregard of the health or safety of Williams or any other person;
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3) there is no evidence that of any financial vulnerability on Williams’s part, notwithstanding
his testimony that his business declined in the aftermath of his dealing with Prendergast; 4)
the conduct was an isolated incident and not a series of repeated actions; and 5) while there
was evidence of trickery and deceit, at best, Williams was willing to be deceived. It was
undisputed that Prendergast was not the landowner of record as reflected in the plat book, and
as Williams’s own testimony revealed, prior to his securing Prendergast’s signature on the
timber deed, he knew that Prendergast did not live on the property that the trees were
harvested. Again, the only logical conclusion is that the punitive-damage award to Williams
was excessive.
Finally, even assuming that the majority correctly claimed that it could
only consider what it believed was a preserved argument, i.e., whether the award of punitive
damages “shocks the conscience of the court,” I would still reverse. First, the only innocent
victims in this case were Prendergast’s sisters, and they were well-compensated for their losses
with statutorily mandated treble damages. Williams was certainly not victimized in this
episode. First, he received full compensation for cutting the timber. Moreover, and more
importantly, I cannot close my eyes to the fact that he was almost as culpable as Prendergast
in this scheme. Williams procured Prendergast’s signature on an instrument that he drafted.
Not only does this make Williams an accomplice, by drafting the timber deed, he was
practicing law without a license. I find it remarkable that we allow this wrong-doing to be
rewarded so handsomely. Cf. Preston v. University of Ark. for Med. Sciences, 354 Ark. 666, 128
S.W.3d 430 (2003).
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As for Missouri Walnut, it is a corporation that is not licensed to do business in
Arkansas.
Moreover, it deliberately chose to deal with Williams, not the individual
(Prendergast) reflected on the unrecorded timber deed, and to remain blissfully ignorant of
the identity of the true owner of the logs by ignoring the information in the plat book that
it had in its possession, not to mention Arkansas law.3 I submit that the conscience of this
court should be shocked when a jury awards a substantial amount of damages to any business
when the only reason they suffered “damages” was because they flouted the laws of the State
of Arkansas.
BAKER, J., joins.
3
Arkansas Code Annotated section 15-32-407 (Repl. 2003) states:
(b) No conveyance, lien, mortgage, or transfer shall be valid except as to the parties
thereto, until it is recorded or until it shall be filed with some deputy county
timber inspector, who shall immediately forward the instrument to the
inspector.
(c) The filing and recording of all instruments and papers shall have the same
effect as notice as the recording of deeds and mortgages in the office of the
recorder of deeds. (Emphasis added.)
-18-
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