Hardy Constr. Co., Inc. v. Arkansas State Highway and Transp. Dep't

HARDY CONSTRUCTION COMPANY, Inc. v. ARKANSAS
STATE HIGHWAY AND TRANSPORTATION DEPARTMENT

96-67                                              ___ S.W.2d ___

                    Supreme Court of Arkansas
                 Opinion delivered May 28, 1996


1.   Courts -- subject-matter jurisdiction cannot be conferred by
     agreement -- parties may agree on court if subject-matter
     jurisdiction is appropriate. -- While it is true that the
     parties may by agreement consent to personal jurisdiction in
     a given court, subject-matter jurisdiction cannot be conferred
     merely by agreement of the parties; if subject-matter
     jurisdiction is appropriate, the parties may agree on the
     appropriate court in which to resolve disputes.

2.   Equity -- specific performance is equitable remedy. --
     Specific performance is an equitable remedy cognizable only in
     equity.

3.   Courts -- chancery court had subject-matter jurisdiction to
     enforce contracts under Uniform Arbitration Act. -- The
     supreme court held that the chancery court had jurisdiction to
     enforce the construction contracts in the present case
     pursuant to the Uniform Arbitration Act.

4.   Appeal & error -- arguments raised for first time on appeal
     not considered -- order affirmed because of lack of sufficient
     information in appellant's abstract. -- Nothing in appellant's
     abstract indicated that Ark. Code Ann.  16-108-203 (1987),
     which authorizes a party to petition the court to appoint one
     or more arbitrators if the agreed method fails or for any
     reason cannot be followed, was argued to the chancery court or
     that a ruling was obtained with respect to that argument;
     appellant's response to the motion to dismiss was not
     abstracted, and there was nothing in the chancery court's
     order otherwise reflecting that  16-108-203 was considered by
     the chancery court; the supreme court has been adamant in
     refusing to consider an argument raised for the first time on
     appeal where that argument has not been first presented to the
     trial court for resolution; while the issue or argument may be
     contained in a pleading or brief in the record, the supreme
     court has stated many times that there are seven justices and
     one record, and the court will not be placed in the position
     of having seven justices scour one record for pertinent
     information; accordingly, the supreme court affirmed the
     chancery court's order because of lack of sufficient
     information in the appellant's abstract to enable it to decide
     the point.

5.   Appeal & error -- showing in abstract that argument has been
     raised and considered below -- absolute prerequisite to
     review. -- Showing the appellate court in the appellant's
     abstract that an argument has been raised and considered by
     the trial court is an absolute prerequisite to review on
     appeal; because the abstract was deficient in that regard, the
     supreme court affirmed the chancery court's order.


     Appeal from Pulaski Chancery Court; Robin L. Mays, Chancellor;
affirmed.
     Rose Law Firm, by: John A. Davis III, for appellant.
     Robert L. Wilson, Chief Counsel, Mark J. Whitmore, and
Lawrence W. Jackson, for appellee.

     Robert L. Brown, Justice.Associate Justice Robert L. Brown
May 28, 1996   *ADVREP*SC7*






HARDY CONSTRUCTION COMPANY,
INC.,
                    APPELLANT,

V.

ARKANSAS STATE HIGHWAY AND
TRANSPORTATION DEPARTMENT,
                     APPELLEE,

96-67




APPEAL FROM THE PULASKI COUNTY
CHANCERY COURT,
NO. 95-4780,
HON. ROBIN L. MAYS, JUDGE,




AFFIRMED.






     Appellant Hardy Construction Company, Inc., appeals the
chancery court's dismissal of its petition for the appointment of
an arbitrator and raises four points for reversal: (1) the chancery
court was required by statute to appoint an arbitrator; (2) the
arbitrators decide procedural matters, not the courts; (3) the
chancery court has jurisdiction to enforce the arbitration clauses
at issue; and (4) sovereign immunity is no defense to the petition
by Hardy Construction.  We agree with Hardy Construction that the
chancery court had subject-matter jurisdiction, but we affirm the
decision of that court because of the insufficiency of the
abstract.
     In 1987, Hardy Construction entered into a contract with
appellee Arkansas State Highway and Transportation Department to
construct a project designated as Missouri Street overpass in West
Memphis.  In 1989, the same parties contracted for Hardy
Construction to construct a second project, also in West Memphis,
designated as the West Memphis Interchange at Interstate Highway
55.  Both contracts provided that any disputes would be settled by
arbitration.
     The two contracts provided with respect to arbitration that
each party would appoint a member to serve on the arbitration
panel.  Those two arbitrators would then select a third member. 
The provision further states:
          If such arbitrators are unable to agree upon the
     third member of the Board of Arbitration within ten (10)
     calendar days after their appointment, application may be
     made by either party to the Chancery Court of Pulaski
     County within ten (10) calendar days for such purpose,
     and the court shall, on or before ten (10) calendar days
     thereafter[,] appoint a disinterested party to serve as
     the third member of said Board of Arbitration.
The contracts further provided that prefatory to arbitration any
disputes must be submitted to the resident engineer and, if
unsuccessful, then appealed to the Chief Engineer of the Highway
Department for final decision.  Within 20 days of an unfavorable
decision, a party could request arbitration.  Thus, according to
the contracts, the party requesting arbitration first had to
exhaust all remedies within the Highway Department.
     Disputes arose over the final estimates of compensation due
Hardy Construction on both projects.  On June 21, 1995, Hardy
Construction gave notice of arbitration and designated its
arbitrator for the arbitration process.  On August 4, 1995, Hardy
Construction filed its Petition for Appointment of Arbitrator.  In
that petition, Hardy Construction asserted that the Highway
Department had refused to select its arbitrator and was frustrating
the arbitration process under both contracts.  Hardy Construction
further prayed that the chancery court appoint the third arbitrator
in accordance with the contracts so as to move the process along.
     On August 28, 1995, the Highway Department moved to dismiss
the petition in separate motions for each job.  (Both motions are
substantially the same and are treated as one for purposes of this
opinion.)  The Department urged in its motion that the petition
failed to show that the chancery court had jurisdiction over the
subject matter and further that Hardy Construction had failed to
allege that it had exhausted administrative remedies under the
contracts by submitting the dispute to the Department's engineers. 
Finally, the Department cited sovereign immunity as grounds for
dismissal.  On September 5, 1995, Hardy Construction amended its
petition to add a paragraph to state "that all conditions precedent
have been performed ...."  On October 16, 1995, the chancery court
concluded in part:
     Plaintiff has appointed an arbitrator; however, the
     defendant has not appointed an arbitrator, because it
     contends plaintiff has not followed the administrative
     procedures under the contract.  Therefore, there is no
     situation where the two arbitrators appointed by the
     parties are unable to agree on a third arbitrator, and,
     under the terms of the contract, that is the only
     provision for court intervention.
          Plaintiff amended its petition on September 5, 1995;
     however, it still does not request any relief in this
     court that is cognizable in equity.  It is simply trying
     to get this court to appoint a third arbitrator, and the
     provisions for that contingency have not occurred.  Since
     plaintiff is asking this court to perform a duty that is
     not provided for in the contract, it is attempting to
     modify the terms of the arbitration provisions.  At the
     hearing, plaintiff contended that it was asking for
     specific performance; however, its pleadings have not
     been amended, nor have any additional parties been named. 
     It is axiomatic that the State cannot "be made a
     defendant in any of her courts."  Article 5, Section 20,
     Constitution of Arkansas.
The chancery court ordered that the petition be dismissed under
Ark. R. Civ. P. 12(b)(6).

                         I. Jurisdiction
     The issue of subject-matter jurisdiction raised by the Highway
Department is paramount and must be addressed first.  Under the
Uniform Arbitration Act, codified at Ark. Code Ann.  16-108-201 et
seq. (1987), the following section is found:
          The term "court" means any circuit or chancery court
     of this state.  The making of an agreement described in
      16-108-201 providing for arbitration in this state
     confers jurisdiction on the court to enforce the
     agreement under this subchapter and to enter judgment on
     an award thereunder.
Ark. Code Ann.  16-108-217 (1987).  The contract provision set
forth above in this opinion alludes to jurisdiction in Pulaski
County Chancery Court.  While it is true that the parties may by
agreement consent to personal jurisdiction in a given court,
subject-matter jurisdiction cannot be conferred merely by agreement
of the parties.  See, e.g., Flemens v. Harris, 319 Ark. 659, 893 S.W.2d 783 (1995); Arkansas Dep't of Human Servs v. Estate of
Hogan, 314 Ark. 19, 858 S.W.2d 105 (1993); Nelms v. Morgan Portable
Bldg. Corp, 305 Ark. 284, 808 S.W.2d 314 (1991).  Thus, if subject
matter jurisdiction is appropriate, the parties may agree on the
appropriate court in which to resolve disputes.
     Hardy Construction argues that subject-matter jurisdiction is
appropriate in chancery court because the relief requested is akin
to a mandatory injunction to enforce the contract or,
alternatively, to specific performance of the contract provision
relating to court appointment of an arbitrator.  Specific
performance is an equitable remedy cognizable only in equity. 
Arkansas State Employees Ins. Advisory Comm. v. Estate of Manning,
316 Ark. 143, 870 S.W.2d 748 (1994).  Although there is no case in
Arkansas that specifically addresses whether the chancery court has
jurisdiction to act to enforce an arbitration agreement pursuant to
statutory authority, foreign jurisdictions have treated these
actions as ones for specific performance of a contract to
arbitrate.  See Annapolis Professional Firefighters Local 1926,
IAFF, AFL-CIO v. City of Annapolis, 100 Md. App. 714, 642 A.2d 889
(1994) (dictum); Trubowitch v. Riverbank Canning Co., 30 Cal. 2d 335, 182 P.2d 182 (1947); see also 4 Am. Jur. 2d Alternative
Dispute Resolution  113, p. 158 (1995).
     For example, in Annapolis Professional Firefighters Local
1926, IAFF, AFL-CIO, supra, the Maryland Court of Special Appeals
addressed by way of dictum the power of a court of equity to
appoint an arbitrator under the Uniform Arbitration Act when the
agreed method failed or otherwise could not be followed:
          Although this power, under the Act, is a statutory
     one, it is not foreign to or inconsistent with the
     general equitable jurisdiction of a circuit court. 
     Equity courts have long had the power, for example, when
     specifically enforcing agreements, to appoint trustees to
     carry out their decrees when a party proves recalcitrant
     or when otherwise necessary to implement the agreement.
Annapolis Firefighters, 642 A.2d  at 895.
     To support its argument that the chancery court did not have
subject-matter jurisdiction, the Highway Department directs our
attention to Bates v. Bates, 303 Ark. 89, 793 S.W.2d 788 (1990). 
In that case, this court reiterated that the General Assembly is
without authority to expand the jurisdiction of chancery courts
beyond that granted by the 1874 Arkansas Constitution.  Bates, 303
Ark. at 91, 793 S.W.2d  at 790.  In Bates, we held specifically that
the General Assembly could not expand the chancery court's
jurisdiction to include areas of criminal law.  The Bates case,
though, is distinguishable from Annapolis Firefighters and the
instant case because the latter situations add nothing to a court
of equity's traditional responsibilities to specifically enforce
agreements to arbitrate under certain circumstances.
     Though Arkansas does not have a precise case in point, an
analogous situation arose in Arkansas Cotton Growers Coop. Ass'n v.
Brown, 168 Ark. 504, 270 S.W. 946 (1925).  In Brown, we interpreted
the Cooperative Marketing Act, including a provision of the Act
which gave the Association the right to seek an injunction in
equity against a member "to prevent the further breach of the
contract and to a decree of specific performance thereof."  see
1921 Ark. Acts 116,  17, codified at Ark. Code Ann.  2-2-419
(a)(1) (Repl. 1996).  We stated in Brown:
     It is contended that the chancery court does not possess
     jurisdiction to prevent a breach by injunction and
     thereby compel specific performance of the contract.  The
     statute creating the association contains an express
     provision for such relief, but it is contended that this
     statute constitutes an attempt to enlarge the
     jurisdiction of the court, which is beyond the power of
     the lawmakers.  We do not agree to this view, for it has
     always been within the jurisdiction of courts of equity
     to grant relief where legal remedies are inadequate, and
     it is evident that, by reason of the peculiarity of the
     co-operative marketing plan, any legal remedy would be
     wholly inadequate.  The only remedy at law would be a
     suit to recover damages, but this remedy is inadequate,
     for the reason that the recovery of damages for a failure
     to deliver cotton would not repair the injury done if a
     substantial number of the members should refuse to
     deliver cotton.
168 Ark. at 521-522, 270 S.W.  at 953.
     It is clear that the chancery court had jurisdiction to
enforce the contracts in this case pursuant to the Uniform
Arbitration Act.

                          II. Abstract
     We turn then to a consideration of the abstract presented by
Hardy Construction and whether it presents us with enough
information to enable us to decide the points raised on appeal.  We
conclude that it does not.
     Hardy Construction's first point is that the Uniform
Arbitration Act, as codified in part at  16-108-203, authorizes a
party to petition the court to appoint one or more arbitrators "if
the agreed method fails or for any reason cannot be followed." 
Here, according to Hardy Construction, that is exactly what
transpired because the agreed method has failed.  Our problem with
this argument is that there is nothing in the abstract to indicate
 16-108-203 was argued to the chancery court or that a ruling was
obtained with respect to that argument.  See Edwards v. Neuse, 312
Ark. 302, 849 S.W.2d 479 (1993).  The response by Hardy
Construction to the motion to dismiss is not abstracted, and there
is nothing in the chancery court's order otherwise reflecting that
 16-108-203 was considered by the chancery court.
     This court has been adamant in refusing to consider arguments
raised for the first time on appeal, where that argument has not
been first presented to the trial court for resolution.  See, e.g.,
Stacks v. Jones, 323 Ark. 643, 916 S.W.2d 120 (1996); Thompson v.
Perkins, 322 Ark. 720, 911 S.W.2d 582 (1995).  While the issue or
argument may be contained in a pleading or brief in the record, we
have said many times that there are seven justices of the Supreme
Court and one record, and we will not be placed in the position of
having seven justices scour one record for pertinent information. 
Kearney v. Committee on Prof. Conduct, 320 Ark. 581, 897 S.W.2d 573
(1995); Stroud Crop, Inc. v. Hagler, 317 Ark. 139, 875 S.W.2d 851
(1994).  We, accordingly, affirm due to lack of sufficient
information in the appellant's abstract to enable us to decide this
point.  See Ark. Sup. Ct. R. 4-2(b)(2).
     The same holds true for the remaining points raised by Hardy
Construction. Its abstract does not reveal that the issue of
procedural arbitrability and whether that is a matter for the
arbitration panel to decide or the courts was ever brought to the
chancery court's attention.  Nor does the abstract reveal whether
Hardy Construction's arguments in opposition to the doctrine of
sovereign immunity were brought to the attention of the chancery
court.  The chancery court did proclaim in its order that the State
cannot "be made a defendant in any of her courts," but the court's
order, as abstracted, does not evidence that Hardy Construction
raised the same arguments in opposition to the sovereign immunity
doctrine at the trial court level that it now makes on appeal. 
What is clear from the chancery court's order is that it made its
decision based on the failure of the two contracts to contemplate
an appointment of a third arbitrator by the chancery court under
the circumstances presented by Hardy Construction.  The chancery
court further appears to have decided that the Highway Department
cannot be estopped from raising a sovereign immunity defense when
it did not agree to a judicial appointment of an arbitrator under
these conditions.  Cf. Foote's Dixie Dandy v. McHenry, 270 Ark.
816, 607 S.W.2d 623 (1980).
     Hardy Construction contends that there was no need to abstract
the hearing before the chancery court or its response to the
Highway Department's motion to dismiss because the arguments it
made are merely duplicative of those made in its brief on appeal. 
But showing this court in the appellant's abstract that an argument
has been raised and considered by the trial court is an absolute
prerequisite to our review on appeal.  Because the abstract is
deficient in that regard, we affirm the chancery court's order. 
See Ark. Sup. Ct. R. 4-2(b)(2).
     Affirmed.
     Dudley, J., not participating.
     Glaze, J., concurs.*ADVREP*SC7-A*






HARDY CONSTRUCTION COMPANY,
INC.,
                    APPELLANT,

V.

ARKANSAS STATE HIGHWAY AND
TRANSPORTATION DEPARTMENT,
                    APPELLEE.



96-67

Opinion Delivered:  5-28-96









CONCURRING OPINION





                  TOM GLAZE, Associate Justice

     I concur.  While I agree to affirm, I disagree with the
majority court's assertion that appellant's abstract is so
deficient the court cannot decide whether the chancery court erred
in failing to appoint an arbitrator as required under Ark. Code
Ann.   16-108-201--224 (1987 and Supp. 1995).  The majority
opinion states that there is nothing in the abstract to indicate 
16-108-203 was argued to the chancery court or that a ruling was
obtained with respect to that argument.  Not true.
     I first point out that the chancellor's order, as abstracted,
dismissed the appellant's action and set out findings reflecting
the appellant had filed suit asking the court to appoint an
arbitrator as provided under the terms of the parties' contract. 
The chancellor further found the appellant was relying on  16-108-
201, et seq.  She stated in her order that appellant's action was
to enforce the parties' contract which provided for arbitration,
but that certain contingencies had to occur before the court
appointed a third arbitrator.  She ruled those contingencies had
not occurred.
     The abstract further reflects that the appellee contended
below that, under the parties' agreement, the party (appellant)
seeking arbitration must first exhaust all administrative remedies
by first submitting the parties' dispute for resolution to
appellee's Resident Engineer, and if not resolved by that engineer,
to appellee's Chief Engineer.  Because appellant failed to exhaust
its administrative remedies, appellee refused to choose an
arbitrator.  The chancellor agreed that, under the terms of the
parties' contract, she could not intervene to appoint a third
arbitrator because the contingencies or conditions of the contract
had not been met.  
     In sum, appellant's abstracting of its petition with exhibits,
appellee's motion to dismiss, and the court's order presents the
essential parts of the record to determine if the chancellor was
correct in refusing to appoint an arbitrator under the terms of the
parties' arbitration agreement.  From the abstracted record, the
chancellor was correct because appellant had not exhausted its
remedies, and therefore, under contract terms appellee was not
required to appoint an arbitrator.  Consequently, because these
contractual prerequisites had not been met, the trial court
correctly decided it could not intervene to appoint a third
arbitrator.  The trial court should be affirmed, but only after
reaching the merits of all issues presented on appeal.