Pamela F. SKOKOS v. Theodore C. SKOKOS
95-1029 ___ S.W.2d ___
Supreme Court of Arkansas
Opinion delivered April 16, 1998
1. Appeal & error -- right to appeal waived by acceptance of benefit
inconsistent with claim of right. -- An appellant waives his or her
right to an appeal by accepting a benefit that is inconsistent
with the claim of right that he or she seeks to establish by
2. Appeal & error -- no dismissal where party relies on promise that
acceptance of payment will not prejudice right to appeal. -- An appellee
may, as the appellee in this case did in part, "waive" his
right to declare a waiver of appeal on the part of an
appellant; an appeal should not be dismissed where, as here,
the appellant has acted in reliance upon the appellee's
promise that her acceptance of payment under the judgment will
not prejudice her right to appeal.
3. Appeal & error -- unambiguous agreement permitted appellant to appeal
decree despite acceptance of benefits under it. -- Considering the
agreement between the parties from its four corners, the
supreme court concluded that the terms clearly and
unambiguously stated that appellant would accept payment from
appellee subject to her right to an accounting and her right
to appeal the decree; construing the unambiguous terms
according to the plain meaning of the language employed, the
supreme court held that the agreement permitted appellant to
appeal the decree despite her acceptance of benefits under it.
4. Appeal & error -- right to appeal decree under agreement did not include
right to appeal denial of post-decree motion to vacate judgment. -- Where
the agreement between the parties allowed appellant to appeal
the "decree" but did not contemplate post-decree motions, the
supreme court held that the right to appeal the decree
conferred on appellant by the agreement did not encompass the
right to appeal an order denying her motion under Ark. R. Civ.
P. 60 to vacate the judgment; because appellant's acceptance
of more than $6 million under the judgment was inconsistent
with her argument that the judgment should be vacated under
Rule 60, the court concluded that the point was waived.
5. Deeds -- factual dispute -- chancellor's determination not reversed unless
clearly erroneous. -- Where there is a factual dispute about the
conditions surrounding the making of a deed, the determination
by the chancellor, whose job it is to assess the credibility
of the witnesses, will not be reversed unless it is clearly
erroneous or unless it is clearly against the preponderance of
the evidence, the appellate court viewing the evidence in the
light favorable to the appellee.
6. Property -- marital residences -- case remanded for reconsideration of
distribution of parties' interests in. -- The supreme court remanded
the case for reconsideration of distribution of the parties'
interests in the marital residences because the reversionary
interests that were created and acquired by the parties during
the marriage were clearly marital property under Ark. Code
Ann. 9-12-315(b) (Repl. 1993), and those reversionary
interests were erroneously not considered in the distribution
of the marital property.
7. Witnesses -- chancellor erred in finding appellant's witness had conflict
of interest that rendered his expert testimony inadmissible per se. -- The
chancellor clearly erred in determining that a witness for
appellant had a conflict of interest that rendered his expert
testimony regarding the value of the parties' shares in an
out-of-state cellular-telephone company inadmissible per se
where there was no dispute that the witness's involvement in
the case was limited to reviewing information about the
company and preparing an assessment of the parties' interest
in it; that the out-of-state company had nothing to do with
the local cellular-telephone market and did not compete with
any entity in which the witness's employer had an interest;
that the witness had no occasion to review confidential
financial records of a local cellular-telephone company in
which the parties had an interest; that the witness would not
have given an opinion concerning the value of the parties'
interest in that company; and that the witness did not know
much about litigation between his employer and appellee.
8. Witnesses -- bias does not necessarily disqualify. -- Even if
appellant's expert witness could have been considered biased,
he should not necessarily have been disqualified.
9. Evidence -- cumulative evidence -- excluded testimony did not amount to. -
- According to Ark. R. Evid. 403, relevant evidence may be
excluded if its probative value is substantially outweighed by
"considerations of undue delay, waste of time, or needless
presentation of cumulative evidence"; having compared the
testimony of both of appellant's expert witnesses, the supreme
court concluded that the witnesses were not so similar in
their credentials, opinions, and approaches to the valuation
question that the introduction of the excluded witness's
testimony would have amounted to a "needless presentation of
cumulative evidence." [Ark. R. Evid. 403.]
10. Divorce -- marital property -- recovery of interest in -- fraudulent
transfer. -- In a divorce action, a spouse may recover his or
her interest in marital property that the other spouse has
transferred if the latter made the transfer for the purpose of
defrauding the former of his or her interest in the property.
11. Appeal & error -- argument not made in trial court and ruled upon not
addressed. -- Where appellant made no request to the trial court
to impose any surcharge with respect to one of two gifts made
through trusts; where appellant's proposed findings of fact
and conclusions of law referred to only one of the two gifts;
and where, even if appellant had requested the chancellor to
impose a surcharge on any gift that the parties' children
might have received through the trust in question, the
chancellor's final decree did not address such a claim, and
the abstract did not otherwise indicate that the chancellor
made a ruling on that issue, the supreme court did not reach
the merits of appellant's claim asserting an entitlement to a
fifty percent surcharge on any gift the children might have
received through the trust; the supreme court declines to
address an argument if the abstract does not show that it was
made in the trial court and ruled upon there.
12. Trusts -- evidence supported chancellor's ruling that gift through trust
was not improperly made. -- Where there was ample evidence in the
record to support the chancellor's conclusion that the gift
through a second trust was not improperly made, such as
testimony that the parties and their children had met with
bank personnel, executed the appropriate documents, and
understood the provisions of the immediate predecessor of the
successor trust at issue, the supreme court held that the
chancellor's ruling was not clearly erroneous.
13. Divorce -- marital property -- fraudulent transfer not proved. -- Whether
or not appellant was aware of or consented to the creation of
the successor trust and the gift to her children authorized by
the trust, no authority entitles a spouse to be reimbursed in
a divorce proceeding for every nonconsensual transfer of
marital funds made by the other spouse; it was necessary for
appellant to prove that appellee had effectuated that transfer
of marital property with the specific intent to defraud
appellant of her interest in that property; proof of that sort
was clearly lacking in the record.
14. Appeal & error -- review of chancellor's decision. -- Ordinarily, the
supreme court does not reverse a chancellor where the decision
turns largely on disputed facts and witness credibility, as it
accedes to her superior position to observe the witnesses and
gauge their demeanor.
15. Divorce -- chancellor's ruling that evidence was insufficient to establish
impropriety of payments to third party not clearly erroneous. -- Noting
that the propriety or lack of propriety, other than in the
context of the relationship between appellant and appellee, of
payments to a third party was not at issue on appeal, the
supreme court emphasized its concern with whether the payments
were made to defraud appellant of her marital interest in the
funds and held that the chancellor's ruling that there was
insufficient evidence to establish any impropriety regarding
the payments was not clearly erroneous.
16. Judges -- recusal -- when proper. -- Judges must refrain from
presiding over cases in which they might be interested and
must avoid all appearance of bias.
17. Judges -- review of refusal to recuse. -- The supreme court will not
reverse a judgment on the basis of a trial judge's decision
not to disqualify unless the judge has abused her discretion;
to decide whether there was an abuse of discretion, the court
reviews the record to determine if any prejudice or bias was
18. Judges -- presumption of impartiality -- burden of showing bias on party
seeking disqualification. -- The question of bias is usually
confined to the conscience of the judge; judges are presumed
to be impartial, and the party seeking disqualification has
the burden of showing otherwise.
19. Judges -- bias -- rulings did not exhibit sort requiring recusal. -- Bias
will not ordinarily be evidenced in the fact of adverse
rulings such as the evidentiary rulings complained of in this
case; although it was error to have refused the testimony of
appellant's expert witness and may have been error to have
limited the cross-examination of appellee's expert witness,
the supreme court could not say that those rulings exhibited
the sort of personal bias toward appellant's case that would
have required recusal.
20. Judges -- record did not demonstrate bias resulting from appearance and
withdrawal of attorney with firm representing chancellor in unrelated
matter -- recusal not required. -- Where the supreme court could not
tell from the record the extent, if any, of the participation
in the case of an attorney with a law firm representing the
chancellor in an unrelated matter beyond his having been
consulted and listed as an expert witness for appellee; where
the chancellor remarked that she did not know the attorney who
had appeared in the courtroom and that he had, to her
knowledge, not appeared before her previously; where the
record did not demonstrate any bias resulting from the
incident, and, given the withdrawal of the attorney, the
supreme court could not say that any appearance of bias was
such as to require recusal.
21. Judges -- discretionary decision not to recuse upheld. -- The supreme
court declined to reverse the chancellor's decision not to
recuse on the basis of a communication made by the
chancellor's court reporter to a chancellor in another
judicial district regarding one of appellant's lawyers; the
decision was a discretionary one, and the court could not say
that the record demonstrated that the chancellor was biased
toward appellant or her counsel.
Appeal from Pulaski Chancery Court; Alice S. Gray, Chancellor;
Jim R. Hannah, Chancellor On Assignment; affirmed in part; reversed
and remanded in part.
Henry Hodges; and Robinson, Staley & Marshall, by: Robert L.
Robinson Jr., for appellant.
Dover & Dixon, P.A., by: Philip E. Dixon; and Dodds, Kidd,
Ryan & Moore, by: Judson C. Kidd, for appellee.
David Newbern, Justice.
Pamela F. Skokos, the appellant, filed a complaint for divorce
against Theodore C. Skokos, the appellee, on June 1, 1993. Custody
and property issues were litigated before Chancellor Alice Gray in
hearings that were protracted and acrimonious. The final decree,
entered on March 30, 1995, granted a divorce to Ms. Skokos, awarded
custody of the parties' minor child to Mr. Skokos, and divided
property. Prior to the entry of the decree, while the case was
pending in the Chancery Court, the parties brought matters before
this Court for resolution. See Skokos v. Gray, 318 Ark. 571, 886 S.W.2d 618 (1994)(denying Ms. Skokos's petition for writ of
certiorari to disqualify Chancellor Gray, Mr. Skokos's attorney,
and attorney ad litem); Hodges v. Gray, 321 Ark. 7, 901 S.W.2d 1
(1995)(affirming in part and reversing in part on Ms. Skokos's
counsel's interlocutory appeal from contempt citations).
Following entry of the final decree, Ms. Skokos filed on
August 14, 1995, a motion to vacate the judgment under Ark. R. Civ.
P. 60. Ms. Skokos was unable to obtain a hearing and ruling on the
Rule 60 motion, and she appealed to this Court and asked that the
case be remanded for the adjudication of that motion. We granted
her request in Skokos v. Skokos, 322 Ark. 563, 909 S.W.2d 653
(1995). Ms. Skokos again moved that we disqualify Chancellor Gray,
who, in her response to Ms. Skokos's motion, announced her decision
to recuse. We accepted Chancellor Gray's recusal and assigned
Chancellor Jim Hannah to preside on remand. Chancellor Hannah held
a hearing on Ms. Skokos's Rule 60 motion and denied it in an order
filed on July 17, 1996.
Ms. Skokos now appeals from the final decree entered by
Chancellor Gray and the order entered by Chancellor Hannah denying
her motion to set aside the decree.
In seeking reversal of the decree, Ms. Skokos first argues
that the Chancellor erroneously determined that the Skokoses had
made an effective gift of three of their residences, held as
tenancies by the entirety, to "qualified personal residence trusts"
and that the residences were owned by the trusts, rather than the
Skokoses, and thus were not subject to division under Ark. Code
Ann. 9-12-315 and 9-12-317 (Repl. 1993 and Supp. 1997). Second,
she argues that the Chancellor undervalued the Skokoses' shares in
two cellular-telephone companies as a result of erroneous
evidentiary rulings excluding expert testimony offered by Ms.
Skokos and limiting her cross-examination of Mr. Skokos's expert
witness. Third, Ms. Skokos argues that the Chancellor erred in
rejecting her claim of entitlement to a "surcharge" or
"reimbursement" for allegedly "improper" payments made by Mr.
Skokos with marital funds. Fourth, she argues that Chancellor Gray
erred by refusing to recuse.
Ms. Skokos further asserts that the judgment should have been
vacated or set aside under Ark. R. Civ. P. 60(c)(4) on account of
what she views as "extrinsic fraud" practiced upon the Chancery
Court by one of Mr. Skokos's trial counsel and the attorney ad
litem appointed to represent the minor child. Ms. Skokos does not
seek reversal of Chancellor Gray's custody ruling or maintain that
she is entitled under Rule 60 to relief from that part of the
judgment granting her a divorce and vesting Mr. Skokos with custody
of the minor child.
Mr. Skokos urges an affirmance on these points but maintains
as a preliminary matter that Ms. Skokos waived her right to bring
this appeal when she accepted over $6 million in cash or other
assets that Mr. Skokos conveyed to her in accordance with the
property division prescribed by Chancellor Gray's decree.
We conclude that some, but not all, of Ms. Skokos's arguments
have merit. Thus, we affirm the decree in part and reverse it in
part and remand the case for further proceedings consistent with
1. Waiver of appeal
As to Mr. Skokos's assertion that Ms. Skokos waived her right
to appeal when she accepted over $6 million in cash and other
assets provided in the decree, we hold that he waived his right to
contend the appeal is barred. We do conclude that Ms. Skokos is
barred from appealing from the ruling made on her request that the
decree be set aside pursuant to Rule 60, as that was not included
in the waiver.
An appellant "waives his right to an appeal by accepting a
benefit which is inconsistent with the claim of right he seeks to
establish by the appeal." Shepherd v. State Auto Property & Cas.
Ins. Co., 312 Ark. 502, 509, 850 S.W.2d 324, 327 (1993), quoting
Bolen v. Cumby, 53 Ark. 514, 515, 14 S.W. 926, 927 (1890). See
also Jones v. Rogers, 222 Ark. 523, 525, 261 S.W.2d 649, 650 (1953)
(stating "when an appellant accepts a portion of a challenged order
inconsistent with his appeal, he thereby waives his appeal"). No
doubt Ms. Skokos's acceptance of benefits from some portions of the
decree would bar her appeal but for the agreement entered between
her and Mr. Skokos to the contrary.
The agreement at issue here was signed by Henry Hodges,
counsel for Ms. Skokos, and Judson C. Kidd, counsel for Mr. Skokos.
The agreement is contained in the following letter, dated April 13,
1995, from Mr. Hodges to Mr. Kidd:
This will confirm our various discussions concerning
your delivery of checks, stock certificates, and other
property pursuant to the Court's Decree entered March 30,
1995. It is understood and agreed that Pam is accepting
these funds and these properties subject to a
reconciliation of the accounting ordered to be furnished
by Mr. Skokos and, of course, subject to her right to
appeal the Decree. In other words, it is understood
there is no prejudice to Pam's right to appeal and Pam's
right to be furnished an accounting that is acceptable
according to the terms of the Decree.
The following appears below Mr. Hodges's signature:
ACCEPTED AND AGREED TO:
/s/ Judson C. Kidd
Judson C. Kidd
Although we are aware of no case on point, we can conceive of
no reason to reject the position that an appellee may, as Mr.
Skokos has done in part, "waive" his right to declare a waiver of
appeal on the part of an appellant. Thus, an appeal should not be
dismissed where, as here, the appellant has acted in reliance upon
the appellee's promise that her acceptance of payment under the
judgment will not prejudice her right to appeal.
Mr. Skokos contends, however, that the agreement merely
conferred on Ms. Skokos the right to question a forthcoming
accounting of Mr. Skokos's expenditure of marital funds during the
pendency of the divorce action and did not confer the right to
appeal the decree. Mr. Skokos asserts, in the alternative, that
the agreement is ambiguous and, in accordance with Don Gilstrap
Builders v. Jackson, 269 Ark. 876, 601 S.W.2d 270 (Ark. App. 1980),
should be construed against Ms. Skokos, the drafter. Mr. Skokos
claims that he would not have made any payment to Ms. Skokos under
the decree "if he had thought [Ms. Skokos] was reserving a right to
appeal to force him to make even more payments."
As we read the agreement "and consider it from its four
corners, as we must, its terms appear clear and unambiguous."
Barton v. Sturgis, 224 Ark. 924, 927-28, 278 S.W.2d 114, 117
(1955). The agreement clearly and unambiguously states that Ms.
Skokos would accept payment from Mr. Skokos subject to her right to
an accounting and her right to appeal the decree. It is our duty
to construe these unambiguous terms "according to the plain meaning
of the language employed," Roth v. Prewitt, 225 Ark. 466, 469, 283 S.W.2d 155, 157 (1955); see Unigard Security Ins. Co. v. Murphy Oil
USA, Inc., 331 Ark. 211, 221, ___ S.W.2d ___, ___ (1998), and thus
we hold that the agreement permits Ms. Skokos to appeal the decree
in spite of her acceptance of benefits under it. Mr. Skokos's
assertion that the agreement means anything else is, at best,
Whether the agreement permits Ms. Skokos to appeal from
Chancellor Hannah's order denying relief under Rule 60 is a
different matter. The agreement was signed on April 13, 1995, well
before the filing of the Rule 60 motion on August 14, 1995, and the
filing of Chancellor Hannah's order on July 17, 1996. By its
terms, the agreement allows Ms. Skokos to appeal only the "decree."
The agreement does not contemplate post-decree motions. Nothing in
the text of the agreement expressly discusses, let alone permits,
an appeal from a ruling on any type of post-decree motion. The
parties could have included language permitting such an appeal had
they chosen to do so.
Accordingly, we hold that the "right to appeal the decree"
conferred on Ms. Skokos by the agreement does not encompass the
right to appeal the order denying her motion under Rule 60 to
vacate the judgment. As Ms. Skokos's acceptance of over $6 million
under the judgment is inconsistent with her argument that the
judgment should be vacated under Rule 60, we conclude the point is
2. Personal residences
The Skokoses acquired three personal residences during their
marriage -- #10 Edgehill Road in Little Rock, and 131 Hosta Bay and
1519 Long Point Lane in Hot Springs. Each was held by them as
tenants by the entireties. The Chancellor found that they were not
marital property at the time of the divorce because the Skokoses
had conveyed them to qualified personal residence trusts ("QPRTs")
after agreeing between themselves to do so. The QPRTs were created
apparently for the purpose of avoiding taxation (i.e., estate
planning) but to maintain family control of the residences.
Joe Gelzine, an attorney who drafted the QPRT documents,
testified that the device creates three interests in the property
thus conveyed: (1) a reversionary interest in the grantor, (2) a
possessory interest in the grantor, and (3) a contingent remainder
interest in beneficiaries of the trust. The grantor to a QPRT can
end the trust, forfeiting the tax benefits, and thus obtain his or
her reversionary interest.
The evidence was conflicting as to whether Mr. or Ms. Skokos
was the prime mover in setting up the QPRTs. We do know, however,
that while Mr. Skokos was away, participating in the Desert Storm
operation in 1991, Ms. Skokos, with Mr. Gelzine's help, quitclaimed
her interest in the Edgehill residence to the Skokos family trust
of which Mr. Skokos was trustee. As Mr. Skokos's attorney in fact,
she likewise quitclaimed his interest to the family trust. By
special warranty deed, Mr. Skokos thereafter conveyed the Edgehill
property to himself, individually, and then he conveyed the
property to the QPRT by special warranty deed, also signed by Ms.
Skokos. A similar transaction occurred with respect to the Hosta
Bay property. The Skokoses' two children were the contingent
remaindermen named in these trusts.
Mr. and Ms. Skokos conveyed the Long Point Lane property by
quitclaim deed to Ms. Skokos, individually, and she then conveyed
it by special warranty deed to herself as trustee of a QPRT. The
contingent remainderman was Dr. Kemp Skokos, Theodore Skokos's
brother. Ms. Skokos's deposition testimony indicated that the gift
to Kemp Skokos was made in gratitude for assistance (presumably
financial) he had given as the Skokoses entered the cellular-
Pursuant to these arrangements, Mr. Skokos, as grantor,
retained a 25-year possessory interest in the Edgehill and Hosta
Bay properties, and Ms. Skokos retained a 15-year possessory
interest in the Long Point Lane property. Ms. Skokos lost her
possessory interests in the Edgehill and Hosta Bay residences and
was compensated for them in the divorce decree. The parties,
however, were not required to account for the value of the
reversionary interests they retained in those properties.
Ms. Skokos contends the conveyances to the QPRTs should be set
aside because she was overreached by a "dominant spouse" in
creating them. See Shipp v. Bell, 256 Ark. 89, 505 S.W.2d 509
(1974). There was evidence that Ms. Skokos is a college-educated
person who sold real estate for a time and was thus at least
somewhat familiar with property transactions, having been a
"million dollar club" salesperson. The Skokoses' son, who was a
law student when the QPRTs were created, recalled his mother
discussing the trusts and acknowledging their effects with some
concern over what might happen should she and Mr. Skokos ever
divorce. Mr. Skokos is an attorney, and thus perhaps obviously
more knowledgeable about such transactions than Ms. Skokos, but he
contends that he had not heard of the QPRT idea before he left the
country, that he was gone in 1991 when Ms. Skokos began the
process, and that it was her idea to do so.
It is enough to say that, where there is a factual dispute
about the conditions surrounding the making of a deed, the
determination by the Chancellor, whose job it is to assess the
credibility of the witnesses, Lawson v. Lawson, 226 Ark. 643, 291 S.W.2d 518 (1956), will not be reversed unless it is clearly
erroneous, Calvin v. Calvin, 308 Ark. 109, 823 S.W.2d 843 (1992),
or unless it is clearly against the preponderance of the evidence,
Weber v. Weber, 256 Ark. 549, 508 S.W.2d 725 (1974), viewing the
evidence in the light favorable to the appellee. Dennis v. Dennis,
239 Ark. 384, 389 S.W.2d 631 (1965). We must remand the case,
however, for reconsideration of distribution of the partiesþ
interests in the marital residences, not for any further
consideration of the validity or effectiveness of the QPRT
instruments and preceding conveyances, but because the reversionary
interests that were created and acquired by the parties during the
marriage were clearly marital property, see Ark. Code Ann. 9-12-
315(b) (Repl. 1993), and those reversionary interests were
erroneously not considered in the distribution of the marital
3. Shares in cellular-telephone companies
Ms. Skokos asserts that the Chancellor's determination of the
fair market value of the parties' shares in two cellular-telephone
companies should be reversed on account of erroneous evidentiary
rulings concerning the testimony of expert valuation witnesses. We
agree that at least one of the rulings at issue constituted an
abuse of discretion, requiring reversal.
Toward the end of their marriage, Mr. and Ms. Skokos acquired
minority interests in two cellular-telephone companies. Using
marital funds, they acquired a 49.99-percent interest in the
Atlantic Cellular/New Hampshire RSA One, Limited Partnership ("the
New Hampshire company"), and a 10.35-percent interest in the Little
Rock Cellular Partnership ("the Little Rock company"). The Little
Rock company apparently does business under the name of "Little
Rock Cellular One." Title to the two blocks of shares was held by
other companies owned solely by Mr. Skokos, but the parties agree
that the shares at issue are marital property.
Mr. and Ms. Skokos agreed that the Chancellor should determine
the fair market value of the shares and that Mr. Skokos would pay
Ms. Skokos one half of the determined value and retain sole
ownership of the shares.
Ms. Skokos first presented expert testimony from Steven
Schroeder regarding the value of the shares in both the New
Hampshire company and the Little Rock company. Mr. Schroeder
opined that the parties' shares in the New Hampshire company were
worth $9 million, after applying a 20-percent "minority discount,"
and that their shares in the Little Rock company were worth $7.4
million, after applying a 30-percent "minority discount." Mr.
Schroeder's written appraisal was admitted into evidence.
Ms. Skokos then sought to introduce expert testimony from
Matthew Fox on the value of the parties' shares in the New
Hampshire company. Mr. Fox was prepared to testify that those
shares were worth between $8.6 million and $11.6 million and that
the value of the shares should not be subjected to a "minority
discount." Mr. Fox also would have challenged some of the views
expressed by Thomas Buono, Mr. Skokos's expert witness, in his
appraisal. Chancellor Gray, however, prohibited Ms. Skokos from
introducing Mr. Fox's testimony and his written appraisal.
Mr. Skokos presented expert testimony from Mr. Buono and
introduced his written appraisal into evidence. Mr. Buono
testified that the value of the parties' 49.99-percent interest in
the New Hampshire company was $7.58 million before consideration of
any "discounts." Mr. Buono then applied a 55-percent "lack of
marketability" discount, and a 15-percent "lack of control"
discount, to arrive at an assessment of $2.9 million for the value
of the parties' shares in the New Hampshire company.
Mr. Buono testified that the "pre-discount" value of the
parties' shares in the Little Rock company was $6.076 million. He
then applied a 45-percent "lack of marketability" discount, and a
20-percent "lack of control" discount, to arrive at an assessment
of approximately $2.67 million for the value of the parties' shares
in the Little Rock company.
Mr. Buono testified that the values he assigned to each block
of shares might be subject to further "capital call" adjustments.
Counsel for Ms. Skokos cross-examined Mr. Buono for some
period of time, but his examination was terminated when Chancellor
Gray interrupted it and allowed Mr. Buono to leave the courtroom in
order to board an airline flight. Thereafter, Ms. Skokos recalled
Mr. Schroeder and presented his testimony in rebuttal to Mr.
In her final decree, Chancellor Gray indicated that she found
Mr. Buono's "analyses and conclusions" to be "entitled to more
weight and credibility" than those of Mr. Schroeder. The
Chancellor accepted Mr. Buono's assessment of $2.9 million for the
value of the parties' 49.99-percent interest in the New Hampshire
company but subtracted $199,000, which represented the "outstanding
capital call." The final value of these shares, according to the
Chancellor, was approximately $2.7 million, and she ordered Mr.
Skokos to pay half of that amount, or $1,350,500, to Ms. Skokos.
The Chancellor also accepted Mr. Buono's assessment of $2,673,440
for the value of the parties' 10.35-percent interest in the Little
Rock company. The Chancellor made no "capital call" adjustments to
this figure, and she ordered Mr. Skokos to pay half of the above
amount, or $1,336,720, to Ms. Skokos. Thus, the Chancellor
determined that Ms. Skokos's interest in the shares of both
companies was worth $2,687,220, and Ms. Skokos accepted payment in
this amount from Mr. Skokos following entry of the final decree.
Ms. Skokos now maintains that the Chancellor abused her
discretion when she prohibited Mr. Fox from testifying and later
terminated Ms. Skokos's counsel's cross-examination of Mr. Buono.
We agree with Ms. Skokos with respect to the exclusion of Mr. Fox's
testimony. A closer question is presented with respect to the
cross-examination of Mr. Buono, but we need not address it in view
of our holding that the exclusion of Mr. Fox's evidence will
require a new hearing on this point.
Chancellor Gray declined to allow Mr. Fox to testify as an
expert because she believed he had a "conflict of interest." The
conflict, according to the Chancellor, was based upon his
employment as a vice president at Stephens, Inc., which owns a
substantial amount of stock in the Alltel company, a competitor of
Little Rock Cellular One. The Chancellor indicated that, on
account of these factors, she "would have reason to question [Mr.
Fox's] impartiality." Counsel for Ms. Skokos further suggested at
trial that Mr. Fox should be prohibited from testifying on account
of a separate "conflict" based on an unrelated lawsuit filed by Mr.
Skokos against Stephens, Inc., and other parties. In her ruling
excluding Mr. Fox's testimony, however, the Chancellor did not
mention that argument.
The Chancellor clearly erred in determining that Mr. Fox had
a "conflict of interest" that rendered his expert testimony
inadmissible per se. There is no dispute that Mr. Fox's
involvement in this case was limited to reviewing information about
the New Hampshire company and preparing an assessment of the
Skokoses' 49.99-percent interest in that company. It is undisputed
that the New Hampshire company has nothing to do with the Little
Rock cellular-telephone market and does not compete with Alltel or
any other entity in which Mr. Fox's employer, Stephens, Inc., has
an interest. It also is undisputed that Mr. Fox had no occasion to
review confidential financial records of the Little Rock company
and that Mr. Fox would not have given an opinion as to the value of
the parties' 10.35-percent interest in that company. Mr. Fox's
testimony that he did not know much about the litigation between
Mr. Skokos and Stephens, Inc., and had only read about the matter
in the newspaper, was likewise unrefuted.
There is nothing in the record to suggest Mr. Fox had a
conflict of interest that prevented him from giving an expert
opinion on the value of the Skokoses' shares in the New Hampshire
company. Nor do we agree that, if indeed he could have been
considered biased, he should necessarily have been disqualified.
See DF&R Corp. v. American Intern. Pacific Industries Corp., 830 F. Supp. 500, 504-05 (D. Minn. 1993) (holding that evidence of "a
conflict of interest or bias" was insufficient to warrant exclusion
of expert witness's affidavit). See, e.g., Senff v. Estate of
Levi, 515 N.E.2d 556, 559 (Ind.App. 1987)(stating "a bias or
sentiment is not sufficient to cause a witness to be incompetent");
Satterthwaite v. Estate of Satterthwaite, 420 N.E.2d 287, 290
(Ind.App. 1981), citing 97 C.J.S. Witnesses 168; Sumter County v.
Pritchett, 186 S.E.2d 798, 802 (Ga.App. 1971)("A mere personal
interest or bias does not render the witness incompetent to
testify."); Crier v. Marquette Cas. Co., 159 So. 2d 26, 29 (La. App.
1964)("Interested persons are competent witnesses . . . .").
We also disagree with the contention that Mr. Fox's testimony
might properly have been excluded as "cumulative" under Ark. R.
Evid. 403. The Chancellor suggested that Ms. Skokos "would not be
prejudiced" by her ruling excluding Mr. Fox's testimony as to the
value of the Skokoses' shares in the New Hampshire company because
Ms. Skokos had already presented Mr. Schroeder's testimony on that
issue. Chancellor Gray appeared skeptical of Ms. Skokos's claim
that she needed "two experts to testify to the value of the same
According to Ark. R. Evid. 403, relevant evidence may be
excluded if its probative value is substantially outweighed by
"considerations of undue delay, waste of time, or needless
presentation of cumulative evidence." We have compared the
testimony of both witnesses, and it does not appear the witnesses
were so similar in their credentials, opinions, and approaches to
the valuation question that the introduction of Mr. Fox's testimony
would have amounted to a "needless presentation of cumulative
evidence." Rule 403 (emphasis added).
Ms. Skokos asserted at trial that she was entitled to be
reimbursed for one half of the allegedly "improper" payments made
by Mr. Skokos with marital funds both before and after Ms. Skokos
filed her complaint for divorce. The Chancellor determined the
payments at issue were not improper and denied Ms. Skokos's request
for a "surcharge" or reimbursement. Ms. Skokos argues on appeal
that this determination was clearly erroneous and should be
reversed. We affirm on this point.
In a divorce action, a spouse may recover his or her interest
in marital property that the other spouse has transferred if the
latter made the transfer for the purpose of defrauding the former
of his or her interest in the property. Pierson v. Barkley, 253
Ark. 131, 133, 484 S.W.2d 872, 873 (1972); Dowell v. Dowell, 207
Ark. 578, 182 S.W.2d 344 (1944).
In Ramsey v. Ramsey, 259 Ark. 16, 531 S.W.2d 28 (1975), the
wife was granted a divorce but appealed the Chancellor's division
of property. We reversed and remanded, in part, because the
Chancellor had failed to make an award to the wife for personal
property that her husband had fraudulently transferred. We said
there was a preponderance of the evidence to show that
there was a wrongful disposition of personal property by
appellee to defeat appellant's marital interest and that
it was error for the court to refuse to consider or make
any order concerning items removed by appellee. An
extensive enumeration of these items was made by
appellant and it was not substantially contradicted. See
Carr v. Carr, 226 Ark. 355, 289 S.W.2d 899. See also,
Austin v. Austin, 143 Ark. 222, 220 S.W. 46; Wilson v.
Wilson, 163 Ark. 294, 259 S.W. 742.
Ramsey v. Ramsey, 259 Ark. at 23, 531 S.W.2d at 33. See also Hardy
v. Hardy, 228 Ark. 991, 995, 311 S.W.2d 761, 763-64 (1958)("A
husband has the right to make a transfer of his property, either
with or without consideration, even though he strips himself of all
means of supporting his wife, and leaves her without the means of
subsistence, provided that he does so in good faith and without
intention of defrauding her of her just claims upon him and his
On appeal, Ms. Skokos argues that she is entitled to be
reimbursed for one half of each of three particular transfers that,
in her view, were improperly made by Mr. Skokos. She claims she is
entitled to a 50-percent "surcharge" against: (1) a gift of
$60,000 made to the Skokoses' three children through the Theodore
C. Skokos Irrevocable Trust No. 3; (2) another $60,000 gift to the
children allegedly made through the Theodore C. Skokos Irrevocable
Trust No. 4; and (3) a $645,000 payment made by Mr. Skokos to
Sheffield Nelson. Thus, Ms. Skokos seeks a reimbursement or
surcharge for one half of $765,000, or $382,500. We hold that Ms.
Skokos is not entitled to this sum.
a. Gifts to children
Ms. Skokos maintains that Mr. Skokos improperly funnelled
$120,000 in gifts to their three children through two successive
trusts established at a Texas bank after Ms. Skokos had filed for
divorce. Ms. Skokos testified at trial that she believed some
portion of these gifts should be "charged back" against Mr. Skokos
but that she did not expect for her children to "pay [her] back."
Ms. Skokos seeks a 50-percent "surcharge" with respect to the total
$120,000 because she believes the gifts were made "without her
knowledge and consent."
Two trusts are at issue here. The first trust -- the Theodore
C. Skokos Irrevocable Trust No. 3 -- was created on October 1,
1993, after Ms. Skokos's complaint for divorce had been filed. The
corpus of Trust No. 3 was stock that Mr. Skokos, as grantor,
conveyed to the Texas bank serving as trustee. The trust
terminated on January 17, 1994, at which time gifts of $20,000 were
made to each of the three Skokos children, for a total gift of
$60,000. The second trust -- the Theodore C. Skokos Irrevocable
Trust No. 4 -- was created on October 20, 1994, also after the
filing of Ms. Skokos's complaint for divorce. The terms of Trust
No. 4 provided that the trust would terminate on January 16, 1995,
at which time gifts of $20,000 would again be made to each of the
three Skokos children. Trusts Nos. 3 and 4 were successors to a
trust initially created by Mr. Skokos in 1992. The provisions of
Trusts Nos. 3 and 4 were apparently the same as those established
in connection with the 1992 trust.
Ms. Skokos argues on appeal that she is entitled to a 50-
percent surcharge against the $60,000 gift made through Trust No.
3 and the $60,000 gift made through Trust No. 4. It appears,
however, that Ms. Skokos made no request to the Trial Court to
impose any surcharge with respect to the latter gift. The summary
of "items to be surcharged to Ted Skokos" that was prepared and
submitted to the Trial Court by Ms. Skokos's accountant included
only the $60,000 gift that was made in January 1994 through Trust
No. 3 and did not refer to any gift that might have been made
through Trust No. 4. Ms. Skokos's proposed findings of fact and
conclusions of law refer to only one of the two $60,000 gifts at
issue. No reference is made to a date or the identity of a
particular trust, but we assume it refers to the gift that was made
in January 1994 through Trust No. 3. In any event, the pleading
does not refer to both gifts that are mentioned on appeal.
We are not directed to any other place in the 15-volume
abstract, and we have not located such a place, which demonstrates
that Ms. Skokos requested the Chancellor to impose a surcharge on
any gift made in connection with Trust No. 4. We are aware that
counsel for Ms. Skokos mentioned Trust No. 4 in connection with an
objection he raised in response to Mr. Skokos's testimony
concerning the creation of the initial trust in 1992. Counsel
objected that the testimony concerning the 1992 instrument was
irrelevant because Ms. Skokos was "complaining about . . . the new
trusts, Texas Trust Number Three and Four that Mr. Skokos created
without Mrs. Skokos's agreement, and we think contrary . . . to the
spirit and the terms of the Court's . . . restraining order entered
when the divorce was filed." Even here, however, counsel voiced no
request for a surcharge on any gift that might have been made
through either trust. When Mr. Skokos later testified that the
funds in Trust No. 4 had been frozen and that no gift had even been
made to the children through that trust, counsel made no request
for a surcharge and did not refute Mr. Skokos's claim. Counsel
simply responded: "Well, we would ask that those gifts be frozen,
Your Honor, and that $60,000-- if it's still there, we're very
happy that it's there." Even if Ms. Skokos had requested the
Chancellor to impose a surcharge on any gift that the children may
have received through Trust No. 4, the Chancellor's final decree
does not address such a claim. The abstract does not otherwise
indicate that the Chancellor made a ruling on that issue.
For these reasons, we do not reach the merits of Ms. Skokos's
claim asserting an entitlement to a 50-percent surcharge on any
gift the Skokos children may have received through Trust No. 4. We
decline to address an argument if the abstract does not show that
it was made in the Trial Court, Webber v. Webber, 331 Ark. 395,
400, ___ S.W.2d ___ (1998), and ruled upon there. Sanders v.
Bradley County Human Servs. Public Facility Bd., 330 Ark. 675, 683,
956 S.W.2d 187, 191 (1997).
The issue of Ms. Skokos's right to a surcharge on the gift
made through Trust No. 3, however, is preserved for our review.
Ms. Skokos clearly raised that issue with the Chancellor, and the
Chancellor's order addressed, and rejected, the argument as
The three children received $20,000 each in early
1994 from a joint trust fund. The payments were made
pursuant to a multi-year estate plan previously agreed
upon by the parties. Plaintiff wants one half of each
payment back, but wants Defendant to repay her rather
than the children. The request lacks merit.
We hold that the Chancellor's ruling is not clearly erroneous.
There is ample evidence in the record that supports the
Chancellor's conclusion that the gift through Trust No. 3 was not
The testimony showed that Trust No. 3 succeeded a trust that
Mr. Skokos created in 1992 during a trip to Texarkana, Texas. Mr.
Gelzine testified that he flew to Texarkana with Mr. and Ms. Skokos
and their children and that they met with personnel from a
Texarkana bank and executed the appropriate documents. Mr. Gelzine
testified that he recommended the provision for the $20,000 per
child gift in order to reduce the Skokoses' tax liability. Mr.
Gelzine testified that, as far as he could determine, "everyone was
clear on what the provisions of the trust [were]."
Mr. Skokos testified that he and Ms. Skokos "visited at
length" about the creation of the 1992 trust and the provision for
the gifts to the children. He testified that he and Ms. Skokos
wanted to fashion the trust so that the children would receive the
gift over a period of several years. According to Mr. Skokos, the
terms of the successor trusts did not vary from those he had
discussed with Ms. Skokos prior to the creation of the 1992 trust.
In support of her claim that the gifts to the children under
Trust No. 3 were improper, Ms. Skokos relies on Mr. Gelzine's
concessions in his testimony that: (1) he helped prepare the trust
documents but did so without seeking Ms. Skokos's input or
involving her in the process; and (2) he prepared the trust
documents at Mr. Skokos's direction and upon verifying with Mr.
Kidd that he "could go ahead and set up another Texas trust." Mr.
Gelzine added, however, that Trust No. 3 was created only for tax-
Whether or not Ms. Skokos was aware of, or consented to, the
creation of Trust No. 3 and the $60,000 gift to her children that
was authorized by the trust, we know of no authority that entitles
a spouse to be reimbursed in a divorce proceeding for every
nonconsensual transfer of marital funds made by the other spouse.
Under the rule announced in Pierson v. Barkley, supra, and Ramsey
v. Ramsey, supra, and the other cases cited above, it was necessary
for Ms. Skokos to prove that Mr. Skokos effectuated that transfer
of marital property (the $60,000) with the specific intent to
defraud Ms. Skokos of her interest in that property. Proof of that
sort is clearly lacking in the record.
b. Payments to Sheffield Nelson
Ms. Skokos also maintains that she is entitled to a 50-percent
surcharge against $645,000 that Mr. Skokos transferred to Sheffield
Nelson by payments made both before and after the filing of her
complaint for divorce. Mr. Skokos acknowledges that he paid that
amount to Mr. Nelson in three installments: $450,000 on October 2,
1991; $100,000 in April or May of 1993; and $95,000 in November of
1993. Ms. Skokos claims the payments were improper, and therefore
subject to a surcharge, because they were part of a "secret" and
"illegal" referral fee that Mr. Skokos paid to Mr. Nelson in return
for an attorney-referral to him of a shareholders' derivative case
involving Worthen Bank, a case for which Mr. Skokos received an
attorney's fee following a settlement hearing in February 1988.
Ms. Skokos claims that any payment of fees by Mr. Skokos to
Mr. Nelson for referring the Worthen Bank case would have been
"illegal" and "unethical" because Mr. Skokos, during the settlement
hearing, did not disclose that Mr. Nelson would be sharing in the
fees awarded and represented to the presiding judge that he would
not share the fees with anyone who was not disclosed. Ms. Skokos
appears to base her theory upon written correspondence not admitted
into evidence in which Mr. Skokos and Mr. Nelson, in the months
following the settlement of the Worthen Bank case, discussed the
possibility of Mr. Nelson receiving a $50,000 referral fee.
At trial, however, both Mr. Skokos and Mr. Nelson explained
that the $645,000 payment had no relationship to the Worthen Bank
case and was not a "referral fee" of any kind. According to their
testimony, the payment was made pursuant to an agreement they
reached concerning Mr. Skokos's operations in the cellular-
Mr. Skokos testified that he received a cellular-telephone
franchise through a lottery conducted by the Federal Communications
Commission. Under the terms of the license approved on May 7,
1990, Mr. Skokos was required to commence operations within 18
months or else face forfeiture of the license. Concerned that he
would not be able to obtain adequate financing within the allotted
time, Mr. Skokos turned to Mr. Nelson for assistance in June 1990.
They reached a verbal agreement whereby Mr. Skokos promised to pay
a "loan-commitment fee" to Mr. Nelson in return for Mr. Nelson's
promise to loan Mr. Skokos several million dollars if called upon
to do so.
Mr. Skokos did not call upon Mr. Nelson for a loan, as he
found other backing for his cellular-telephone venture. Although
he had secured the financing promise of Mr. Nelson, Mr. Skokos
hired the firm of Daniels and Associates to locate an investor.
That firm located Atlantic Cellular, which paid $11.5 million to
Mr. Skokos for a 50.01-percent controlling interest in the
cellular-telephone franchise. The purchase and sales agreement,
signed on February 28, 1991, by Ms. Skokos while Mr. Skokos was
overseas, included a covenant on Mr. Skokos's part that no one,
aside from Daniels and Associates, would receive a commission or
finder's fee "in connection with the transaction contemplated by
this agreement." The deal closed in April 1991, and Daniels and
Associates received a finder's fee of $250,000.
Mr. Skokos testified that he could have "walked away" from the
agreement with Mr. Nelson, as it would not have been necessary for
him to rely on the line of credit that Mr. Nelson had promised to
make available. Mr. Skokos testified that he discussed the matter
with Ms. Skokos and indicated to her that he felt he should honor
the agreement. According to Mr. Skokos, Ms. Skokos advised him to
"do whatever you think is right."
Thereafter, Mr. Skokos and Mr. Nelson agreed in writing that
Mr. Skokos would pay a negotiated fee of $650,000. The Chancellor
received into evidence a written memorandum, dated October 2, 1991,
that Mr. Nelson wrote to Mr. Skokos recounting the terms of their
agreement on "the New Hampshire Cellular matter." Mr. Skokos
promised to pay $450,000 on October 2, 1991; $100,000 in April
1993; and $100,000 in April 1994. In his memorandum, Mr. Nelson
referred to the payments as a "finder's fee/legal fee." Mr. Skokos
testified that he discussed the agreement with Ms. Skokos.
According to Mr. Skokos, "She told me to do whatever I thought was
right, and I said, I think this is right. I owe the money, and I
paid it." Ms. Skokos acknowledged in her deposition that she
viewed the obligation that Mr. Skokos had incurred as a marital
Mr. Skokos testified that he made the first two payments more
or less as scheduled but that he renegotiated the terms regarding
the third payment so that Mr. Skokos paid only $95,000 but did so
in November 1993, earlier than originally scheduled. Mr. Skokos
testified that he sought to make a reduced payment ahead of
schedule because "I wanted to get my affairs in order before my
divorce trial started." Thus, the total amount paid to Mr. Nelson
was $645,000. It appears that some, if not all, of these payments
were (1) reported by Mr. Nelson as income on his tax returns; and
(2) reported by Mr. and Ms. Skokos as business-expense deductions
on joint tax returns that each of them signed.
Mr. Skokos and Mr. Nelson acknowledged in their testimony that
they had discussed in 1988 the possibility of Mr. Nelson receiving
a $50,000 fee for having referred the Worthen Bank case. They
testified, however, that they ultimately dropped the matter when
Mr. Skokos refused to pay a referral fee and that the payment of
$645,000 bore no relationship to the Worthen Bank case. In one of
the memoranda cited by Ms. Skokos, Mr. Skokos makes clear his
intention not to pay any fee for Mr. Nelson's referral of the case.
Ms. Skokos's accountant testified that the $645,000 payment
did not pass the "smell test," noting that a reasonable fee for a
$1,000,000 line of credit would only be $100,000. Our
understanding of the testimony is, however, that Mr. Nelson was
ready to advance "several million" dollars.
The Chancellor, evidently relying on the above testimony, and
the acknowledgement by Ms. Skokos in a deposition that the
obligation to Mr. Nelson was a marital one, rejected Ms. Skokos's
contention that the payment to Mr. Nelson was subject to a
Plaintiff seeks to surcharge Defendant for funds
paid to Sheffield Nelson. Plaintiff previously
acknowledged the debt to Sheffield Nelson pursuant to an
agreement made years before the parties separated. The
debt was a marital responsibility. There is insufficient
evidence in this record to establish any impropriety
regarding the agreement and payments.
The propriety or lack of propriety, other than in the context
of the relationship between Mr. and Ms. Skokos, of the payments to
Mr. Nelson is not at issue in this appeal. Rather, as noted above,
we are concerned with whether the payments were made to defraud Ms.
Skokos of her marital interest in the funds. "Ordinarily, we do
not reverse a chancellor where the decision turns largely on
disputed facts and witness credibility, as we accede to [her]
superior position to observe the witnesses and gauge their
demeanor." Dopp v. Sugarloaf Mining Co., 288 Ark. 18, 21, 702 S.W.2d 393, 394 (1986). The ruling was not clearly erroneous.
The final argument advanced by Ms. Skokos in support of
reversing Chancellor Gray's decree is that the Chancellor erred in
declining numerous requests made by Ms. Skokos's counsel that she
recuse from the case. We affirm on this point.
In Skokos v. Gray, 318 Ark. 571, 886 S.W.2d 618 (1994), we
denied Ms. Skokos's certiorari request to disqualify Chancellor
Gray. We held that certiorari does not lie for such discretionary
matters as recusal, and we noted that the grounds asserted in
support of the judge's recusal in the petition could not be argued
later in the event of an appeal from the final decree. Id. at 575,
886 S.W.2d at 621. Ms. Skokos invites us to reconsider this point
and to consider the conduct Ms. Skokos mentioned in the petition
for the writ. We decline to do so. We only consider at this point
facts occurring subsequent to our denial of the writ that are cited
in Ms. Skokos's brief as bases for holding the Chancellor should
Ms. Skokos points to the following events. First, she says a
disqualifying bias was evident in the rulings excluding Mr. Fox's
testimony and limiting the cross-examination of Mr. Buono. Second,
she contends the Chancellor failed to make a timely disclosure of
her relationship with a law partner of Byron Eiseman, an attorney
scheduled to testify as an expert witness for Mr. Skokos. Third,
she maintains the Chancellor should have recused because her court
reporter communicated with another judge about the conduct of Ms.
Judges must refrain from presiding over cases in
which they might be interested and must avoid all
appearance of bias. Reel v. State, 318 Ark. 565, 886 S.W.2d 615 (1994). However, we will not reverse a
judgment on the basis of a trial judge's decision not to
disqualify unless the judge has abused her discretion.
Id. To decide whether there was an abuse of discretion,
we review the record to determine if any prejudice or
bias was exhibited. Id. The question of bias is usually
confined to the conscience of the judge. Noland v.
Noland, 326 Ark. 617, 932 S.W.2d 341 (1996). Judges are
presumed to be impartial, and the party seeking
disqualification has the burden of showing otherwise.
Turner v. State, 325 Ark. 237, 926 S.W.2d 843 (1996).
Dolphin v. Wilson, 328 Ark. 1, 4, 942 S.W.2d 815, 817 (1997).
a. Evidentiary rulings
Bias will not ordinarily be evidenced in the fact of adverse
rulings such as the evidentiary rulings complained of in this case.
See Trimble v. State, 316 Ark. 161, 172, 871 S.W.2d 562, 567
(1994); Roe v. Dietrich, 310 Ark. 54, 59, 835 S.W.2d 289, 292
(1992). Although we have determined it was error to have refused
Mr. Fox's testimony and may have been error to have limited the
cross-examination of Mr. Buono, we cannot say that those rulings
exhibited the sort of personal bias toward Ms. Skokos's case that
would have required recusal.
b. Byron Eiseman
Henry Hodges, one of Ms. Skokos's lawyers, filed a complaint
against the Chancellor with the Judicial Discipline and Disability
Commission on a matter not related to this case. In that
proceeding, the Chancellor was represented by a member of the law
firm of Friday, Eldredge, and Clark. During the phase of the trial
concerned with the QPRTs, Byron Eiseman, a member of that firm,
appeared in the courtroom. The Chancellor noted the fact that
persons she did not know were in the courtroom. Later, she
realized that Mr. Eiseman was a member of the Friday firm. She
announced it was her practice to recuse in matters in which the
Friday firm served as counsel, and she invited motions.
Counsel for Ms. Skokos moved that the Chancellor recuse. The
contention was that Mr. Eiseman's name had been on Mr. Skokos's
witness list and that the Chancellor thus should have known of his
connection with Mr. Skokos much earlier. In addition, Mr.
Eiseman's name and his potential testimony, although not the name
of his law firm, had been mentioned orally several times in the
proceedings. After the Chancellor made her announcement, counsel
for Mr. Skokos withdrew Mr. Eiseman as an expert witness. Mr.
Eiseman left the courtroom and did not testify. The Chancellor
took the motion under advisement and later announced she would not
Ms. Skokos asserts that recusal was necessary, in spite of the
fact that Mr. Eiseman was withdrawn as a witness and never
testified, because of Mr. Eiseman's "improper participation" in the
case, consisting of sitting at counsel's table and being "de facto,
if not de jure, co-counsel to [Mr. Skokos] in the trial."
The Chancellor's explanation in response to the motion
included the fact that she had not read the witness list and that
she did not realize a member of the Friday firm was in the
courtroom until she recalled seeing Mr. Eiseman's name on
correspondence, apparently from her attorney.
We cannot tell from the record before us the extent, if any,
of Mr. Eiseman's participation in this case beyond having been
consulted and listed as an expert witness for Mr. Skokos. We note
the Chancellor's remarks that she did not know him and that he had,
to her knowledge, not appeared before her previously. The record
does not demonstrate any bias resulting from the incident, and,
given the withdrawal of Mr. Eiseman, we cannot say any appearance
of bias was such as to require recusal.
c. Marjorie Gachot and Judge John Harkey
The final basis asserted by Ms. Skokos for Chancellor Gray's
recusal is a communication made by the Chancellor's court reporter,
Marjorie Gachot, to the Honorable John Harkey, of Batesville, a
chancellor in a separate judicial district. Ms. Skokos's counsel
alleged the communication demonstrated that the Chancellor was
conducting an "investigation" of Bob Robinson, one of her lawyers,
and that bias against her and her counsel was thus apparent. A
motion for recusal was filed on February 6, 1995, attaching an
affidavit from Judge Harkey. We affirm on this point.
There was considerable skirmishing over the holding of a
hearing on the motion. Ms. Skokos's counsel wanted the hearing to
be held with Judge Harkey's testimony being taken by telephone.
Counsel for Mr. Skokos insisted on having Judge Harkey present in
the courtroom for cross-examination. Counsel for Ms. Skokos sought
a continuance, which was not granted, for that purpose. He also
attempted to have Chancellor Gray testify under oath.
A hearing was held during which Mr. Robinson read from Judge
Harkey's affidavit to the effect that Chancellor Gray's court
reporter, Marjorie Gachot, had called to speak with Judge Harkey's
court reporter and, upon learning that she was unavailable, spoke
with Judge Harkey. Ms. Gachot allegedly asked about Mr. Robinson's
conduct in Judge Harkey's court, suggesting that Mr. Robinson's
conduct had been a problem.
Ms. Gachot testified at the hearing that she had been a court
reporter since 1967 and had worked with Chancellor Gray for two
years. She said she had indeed called to speak with Judge Harkey's
court reporter and that her conversation with Judge Harkey had
lasted less than a minute. She said she asked only if Mr. Robinson
had been in Judge Harkey's court. She insisted she did not tell
Judge Harkey about rumors she had heard about Mr. Robinson's
conduct before him. She said Chancellor Gray had been made aware
she was going to call and that she had made the call out of
curiosity because she had been concerned about Mr. Robinson's
behavior before Chancellor Gray and thought she might help solve
the problem. She insisted that the affidavit of Judge Harkey was
"not correct" in its statement that she impugned the conduct of Mr.
The Chancellor again refused to recuse, and in her order she
declared that Mr. Robinson was not being "investigated" by her or
by her staff. She pointed out that, even if she had personally
called Judge Harkey to discuss the matter of conduct of counsel,
that would have been permissible in accordance with the Code of
Judicial Conduct, Canon 3, 7(c).
We decline to reverse the Chancellor's decision not to
recuse. The decision was, again, a discretionary one, and we
cannot say the record demonstrates that the Chancellor was biased
toward Ms. Skokos or her counsel.
In closing, we note that, after Chancellor Gray's recusal,
Chancellor Jim R. Hannah was assigned to the case. Chancellor
Hannah's assignment to this case will continue upon remand.
Affirmed in part; reversed in part, and remanded.
Special Justices Jim Burnett, Ted N. Drake, Searcy W. Harrell, Jr.,
and Lynn Williams join in this opinion.
Glaze, Corbin, Brown, and Imber, JJ., not participating.