DBTC Law Firm

Recent decisions

Putting Lipstick on a Pig: Recess Versus Physical-Activity Periods

In 2012, when the Pulaski County Special School District (“PCSSD”) replaced paid monitors, who had been supervising the students’ recess, with certified teachers, some teachers vehemently protested the change. They argued that the school district’s actions violated existing Arkansas law that had been enacted to protect teachers from being burdened with wide-ranging duties that extend beyond their primary roles as instructors.

Under Arkansas law, school districts are prohibited from assigning teachers more than 60 minutes a week of “noninstructional duties.” Ark. Code Ann. §6-17-117. Pursuant to the statute, such “noninstructional duties” specifically include the supervision of students before and after the instructional day begins or ends for students. It also includes the general supervision of students during breakfast, lunch, scheduled breaks and recess. A separate Arkansas law, which was passed in 2007, mandates 90 minutes of physical activity per week for children in kindergarten through sixth grade. The 90-minute period can include recess in addition to “physical education instruction” by a certified teacher. Ark. Code Ann. §6-16-132.

Prior to the Fall of 2012, PCSSD utilized paid monitors to supervise students’ recess periods throughout the school day. However, in a purported effort to incorporate “physical education instruction” into the school day to comply with Ark. Code Ann. §6-16-132, PCSSD subsequently issued a new policy that reclassified recess periods as “physical-activity periods” and assigned certified teachers to supervise the periods instead of paid monitors. Despite the reclassification, PCSSD did not make any substantive changes to the activities that occurred during these periods and the teachers did not provide any formal instruction to the students. The only difference between recess periods and physical-activity periods was the presence of a certified teacher.

Teachers objected to this new assignment, arguing that it violated Ark. Code Ann. §6-17-117 and prevented them from utilizing that time to “grade papers, call parents, and plan and prepare for the next class.” In an effort to challenge the new policy, some of the teachers brought suit against PCSSD, asserting that the physical-activity periods, which required no actual instruction, constituted extra “noninstructional duties” that resulted in the teachers being improperly forced to exceed the 60-minute noninstructional duty limitation of Ark. Code Ann. §6-17-117. After evaluating the nature of the activities, the trial court concluded that the policy change violated Ark. Code Ann. §6-17-117. Upholding the trial court’s ruling, the Arkansas Court of Appeals noted that the activity “periods still met the common meaning and practice of the definition of ‘recess’ and hence were ‘noninstructional duties’ under section 6-17-117(b).” Pulaski County Special School District v. Lewis, 2017 Ark. App. 264 (2017).

In other words, recess is recess regardless of the label you put on it. Accordingly, in Arkansas a school district cannot alter its obligations to teachers and avoid statutory requirements by means of semantic gymnastics.

Paying The Very Expensive Price Of Not Believing All Politics Are Local.

A much disputed election of officers in the Crittenden County, Arkansas, branch of the NAACP occurred in 2010. All of the incumbents were defeated and replaced. The National NAACP organization, backing the local incumbents, claimed in several written and spoken public declarations over many months that the election was void, refused to acknowledge the new officers, and denied the Chapter participation in the state convention — all to the prejudice of the local, disarrayed chapter. The Arkansas Court of Appeals recently upheld the Circuit Court’s decision which confirmed the elections and held the National NAACP organization in contempt of court, fining it $100,000 and charging it $20,000 in attorneys’ fees. Interesting points resulted about the effect of court injunctions on non-parties.

The continuing and significant efforts of the National NAACP organization in refusing to acknowledge the newly-elected officers and challenging the validity of the Chapter were brought into Circuit Court by the new officers. Initially, the National NAACP organization was not a party to the action and during that interim period, several orders, including injunctions, were issued confirming the validity of the newly-elected officers.

The Appellate Court held that even though the National NAACP organization was not a party to the suit at the time the injunctions were issued, nor had it become a party by the time many of their declarations of invalidity were made, any person or entity, regardless of whether they are a formal party to the litigation or not, is bound by the terms of an injunction if duly served with it. The National NAACP organization’s intermeddling with court-approved local affairs was severely sanctioned by the Circuit Court, and its decision was approved by the Court of Appeals. 207 Ark. App. 166, March 15, 2017.

Taking the Bait: Is it justifiable to rely on a bare statement that a toolbox is worth $150,000?

The old adage, “[i]f it seems to be too good to be true, it probably is,” is well worth considering the next time you make a large purchase. That advice would have come in quite handy for a woman and her son who paid an extra $100,000 for a parcel of real estate in order to purchase various tools that were located on the property.

Prior to selling the parcel of real estate, the seller told the purchaser’s son that sale included valuable tools that were located on the property. He represented that the tools were worth $150,000, but offered to sell them along with the real property for “only” an additional $100,000. Considering the offer to be a bargain, and without actually seeing the tools, the woman and her son took the bait – hook, line, and sinker. They made the purchase without any further investigation. However, after the woman and her son eagerly purchased the real estate and accompanying tools, they almost immediately discovered that the tools were actually only worth about $8,000.

As a result of their shocking discovery, the woman and her son pursued a lawsuit against the seller and alleged various causes of action that included fraud. Although there was little doubt that the seller knowingly misrepresented material facts and that the mother and son relied upon those misrepresentations in entering into the real estate purchase agreement, in order for the fraud claim to be actionable they also had to prove that they were justified in relying upon the misrepresentations. The trial court found that the son had justifiably relied upon the seller’s misrepresentations, and it granted him a judgment against the seller in an amount equal to the difference between the $100,000 that was paid for the tools and $8,000, the actual value of the tools. The Arkansas Court of Appeals upheld the trial court’s ruling, concluding that, although the son was familiar with tools and real estate transacting, he was not an “expert.”

While the Arkansas Court of Appeals upheld the judgment against the seller, two dissenting Arkansas Court of Appeals Judges warned that the majority had effectively done away with the requirement that reliance be justifiable in proving fraud. Citing Restatement (Second) of Torts §541 (1977), a legal treatise, the Judge reminded the majority that one “cannot recover if he blindly relies upon a misrepresentation the falsity of which would be patent to him if he had utilized his opportunity to make a cursory examination or investigation.” Despite the dissenting Judges’ admonitions, the majority’s ruling resulted in the son recovering a judgment against the seller in the amount of $92,000.

Even though the plaintiffs were successful in proving fraud and obtaining a judgment, they were unable to get the contract completely rescinded and they were prevented from recovering any attorneys’ fees that were expended in their various appeals. If there is one lesson to be learned from their misfortune, it is that if a deal appears to be so fantastic that it is almost unbelievable, it might be worth doing some preliminary investigation prior to biting into that shiny hook.

Shootout on Highway 65: Are Gunfights Covered Under an Auto Insurance Policy?

While it is true that one can insure just about anything, that does not mean that everything is insured. A man in Southeast Arkansas learned that lesson the hard way, after his auto insurance claim was denied following a gunshot injury that he received while driving on a highway.

The man was driving his vehicle on U.S. Highway 65 in Mitchellville, Arkansas, when an individual in a separate vehicle pulled up beside the man’s vehicle and shot him. The man was able to drive himself to the hospital to receive medical attention. Subsequently, he filed an uninsured motorist claim with his insurance company for his personal injuries and personal property damages. The insurance company denied the claim, citing a provision in the insurance policy that excluded injuries and damages that result from an “intentional act” and arguing that there was “no causal relationship or connection between [the man’s] claimed bodily injuries and property damage and the use of a motor vehicle.” In essence, it argued that the injuries and property damage did not “arise out of” the use of the motor vehicle, as is required under the terms of the policy. The man, on the other hand, asserted that a causal connection did exist and even though the shooter intentionally shot him, the man had no way of knowing that he was going to be shot and, therefore, it was an accident from his perspective. In addition, he argued that the terms “accident,” “arising out of a motor vehicle,” and “arising out of the use of” were not defined in the insurance policy and were susceptible to multiple reasonable interpretations.

While the Arkansas Court of Appeals agreed with the insurance company that the shooting was “an intentional act, not an accident as contemplated in the policy,” the case primarily turned on the interpretation of the term “arising out of” in the insurance policy. As a general rule, in Arkansas, “[i]f the language of an insurance policy is unambiguous, [courts] give effect to the policy’s plain language . . .” Williams v. Allstate Prop. and Cas. Ins. Co., 2017 Ark. App. 45, *5 (Ark. App. 2017). However, “if the language is ambiguous, [courts] construe the policy liberally in favor of the [person holding the insurance policy] and strictly against the [insurance company].” Id. In Williams, the Arkansas Court of Appeals relied upon Arkansas Supreme Court precedent in holding that in the context of an uninsured motorist provision, the term “arising out of” means something that is “causally connected with” the subject of the provision. Based upon this interpretation, the Court of Appeals determined that the term “arising out of” was clear and unambiguous and had been appropriately applied in prior insurance cases.

The prior insurance cases included an Arkansas Supreme Court case in which the appellate court found that an accidental shooting involving two kids who discharged a gun they found stored in a vehicle did not arise out of the ownership, maintenance or use of the vehicle. There was also an Arkansas Court of Appeals case in which the appellate court held that uninsured motorist coverage was inapplicable in a case in which a driver was shot by his passenger after the driver pulled the vehicle to the side of the road due to his intoxicated passenger becoming ill.

Based upon the factual and legal analysis found in these two prior cases and an additional case involving a volunteer firefighter who was injured by an inadvertently slammed van door while at the scene of an automobile accident, the Arkansas Court of Appeals found the injuries that occurred as a result of the shooting on the highway “could have just as easily taken place outside of the vehicles.” Accordingly, the Arkansas Court of Appeals held that there was no causal connection between the vehicle’s use and the shooting and, therefore, it was appropriate for the insurance company to deny the man’s uninsured motorist claim.

In light of these decisions, one should not rely upon a standard auto insurance policy to cover unusual injuries, such as gunshot wounds. It is a safe bet that such injuries will not be covered by a standard auto insurance policy. If one has questions regarding what is and is not covered under a particular insurance policy, he or she should seek out professional guidance.

The Unexpected Serendipities From Not Cleaning Up the “Loose Ends” In A Divorce

Divorces are designed by law and intended by the parties to conclusively end their relationship with each other and separate their property so that each can go forward with their assets untethered from the marriage. Sometimes, the parties, their lawyers, and/or the law leaves some “money on the table” for the other spouse. This is, thus, a problem that could be cured by the legislature, the parties, and/or their lawyers – but probably will continue to happen to the unwary.

Our previous blog article (9/25/13’s “Too smart for their own good: unintentionally leaving everything to the just-divorced spouse“) discussed what can happen if the parties, while married, use the increasingly popular “revocable trust” in their estate planning and fail to revise both that trust, and their wills, upon divorce.  The Arkansas Court of Appeals, in Hudspeth v. Hudspeth, 2017 Ark. App. 30, has decided that the same can happen with life insurance. In that case, the husband had $60,000 of life insurance provided by his employer. The parties divorced, and the Separation Agreement gave to each party the “cash value” of their respective life insurance policies, and each of their own “basic benefit plans, special retirement supplements, and thrift savings plans,” and any right to claim “any survivor benefits under the other’s benefit plan as a surviving spouse.”

During their marriage, the husband had named the wife as the beneficiary of his life insurance. He did not change that upon divorce. Upon his death, his ex-wife made claim for it, and while the trial court found that the various general provisions recited above somehow removed the ex-wife as the death beneficiary, upon appeal, the Court of Appeals found that none of the above provisions specifically addressed the death benefit of life insurance.  The Court of Appeals confirmed that when insurance policies are not addressed in a divorce decree or property settlement, the rights of the designated beneficiary are determined in accordance with contract law without regard to the effect of a divorce between the insured and the beneficiary.  An ex-spouse named as a beneficiary in such a life insurance policy will be able to collect it.

The Times They Are A-Changin’: A Sing-Along with the Chief Justice of the Arkansas Supreme Court

On the heels of the United States Supreme Court’s decision in the Obergefell v. Hodges, 576 U.S. , 135 S. Ct. 2584 (2015), which effectively abolished prohibitions against same-sex marriage in the United States, state supreme courts around the country have been grappling with the legal implications of that ruling on state statutes that are not explicitly related to same-sex marriage, but for which one can argue an indirect impact on the “statutory benefits” received by married couples. In Smith v. Pavan, 2016 Ark. 437 (2016), the Arkansas Supreme Court recently resolved one such issue, but not without an unconventional dissent penned by the Honorable Howard W. Brill, then the Chief Justice of the Arkansas Supreme Court, in which he quotes Bob Dylan’s well known protest anthem, “The Times They Are A-Changin’” and advocates for a broader application of the Obergefell opinion in testing the constitutionality of Arkansas statutes.

In the Pavan case, three same-sex couples challenged the Director of the Arkansas Department of Health’s compliance with various Arkansas statutes limiting the individuals that can be included on a child’s birth certificate to the biological parents, with some specific statutory exceptions. In an attempt to apply the Obergefell opinion to Pavan, the trial court concluded that one of the birth certificate statutes was unconstitutional and creatively interpreted the other in such a manner as to avoid constitutional scrutiny. In the same ruling, the trial court held that a prior circuit court case had previously granted injunctive relief regarding birth certificates and, therefore, the doctrine of res judicata prevented the Director from refusing to issue amended birth certificates to the plaintiffs in the Pavan lawsuit.

The Arkansas Supreme Court found that res judicata was inapplicable in the Pavan case, because the orders issued in the prior court case did not address the specific birth certificate issues contested in the Pavan case. In addition, the Arkansas Supreme Court held that the United States Supreme Court’s Obergefell opinion “does not impact [the Arkansas statutes] governing the issuance of birth certificates and that these statutes pass constitutional muster.” Pavan, 2016 Ark. at *10. In explaining the constitutionality of the statutes, the Arkansas Supreme Court concluded that the statutes primarily relate to the relationship of the biological mother and biological father to the child, rather than the marital relationship of the husband and wife, and that it is this information that is required to be truthfully recorded on the child’s birth certificate. Id. at *12-14. Likewise, the Arkansas Supreme Court determined that the Arkansas Department of Heath has an important governmental objective in ensuring the accuracy of the information included on birth certificates – tracing public-health trends and providing critial assistance to an individual’s identification of personal health issues and genetic conditions.” Id. at *15-18.

After considering the arguments of the parties, the Arkansas Supreme Court held that “[it could not] say that naming the nonbiological spouse on the birth certificate of the child is an interest of the person so fundamental that the State must accord the interest its respect under either statute.” Id. at *17. Moreover, the Arkansas Supreme Court found there was no equal protection violations, noting that:

In the situation involving the female spouse of a biological mother, the female spouse does not have the same biological nexus to the child as the biological mother or the biological father has. It does not violate equal protection to acknowledge basic biological truths.Id. Based upon these findings, the Arkansas Supreme Court reversed the trial court’s ruling and dismissed the case against the Director of the Arkansas Department of Heath.

Due to the fact that he strongly disagreed with the Arkansas Supreme Court’s refusal to apply Obergefell in the Pavan case, Chief Justice Brill issued a spirited dissent. Chief Justice Brill is a respected educator, author and jurist. In addition to his reputation for well-reasoned legal analysis, he has a nearly legendary reputation in the Arkansas legal community for incorporating cultural references within his presentation of legal thought. He struck again in the Pavan case, beginning his dissent with the immortal words of the folk icon and recent Nobel laureate, Bob Dylan:

Come gather ’round peopleWherever you roam

And admit that the waters

Around you have grown

And accept it that soon

You’ll be drenched to the bone

If your time to you is worth savin’

Then you better start swimmin’ or you’ll sink like a stone

For the times they are a-changin’

. . . .

Come senators, congressmen

Please heed the call

Don’t stand in the doorway

Don’t block up the hall

For he that gets hurt

Will be he who has stalled

There’s a battle outside and it is ragin’

In his dissent, the Chief Justice argues that “[t]he logical extension of Obergefell, mandated by the Due Process Clause and the Equal Protection Clause, is that a same-sex married couple is entitled to a birth certificate on the same basis as an oppositesex [sic] married couple.” Pavan, 2016 Ark. at *23 (declaring the right to a birth certificate is a “corollary to the right to a marriage license”). He also explains that “[r]egardless of personal values and regardless of a belief that the United States Supreme Court may have wrongfully decided a legal issue, all are bound by the law of the land.” Finally, the Chief Justice admonishes all three branches of Arkansas’ government “to heed the call,” in adapting to same-sex marriage, because “[t]he times are indeed a-changin’.”

While his dissent is unusual in its form and not binding as precedent, it certainly is memorable.

Katy bar the door! Union officials are prohibited from protesting in Walmart stores, but they are welcome to shop.

It is well known that there has been a “cold war” for decades between Walmart and labor unions. Walmart and the labor unions have engaged in both symbolic battles as well as legal battles to support their respective positions. This conflict has risen to the point of pop culture status, as Walmart opponents and celebrities have taken to the Internet to disparage Walmart and its customers. Walmart has won the most recent battle in this protracted legal war by prevailing in a civil trespass lawsuit that resulted in a permanent injunction against certain disruptive labor activities in Walmart stores and on other Walmart properties, including efforts to employ “flash mobs” as a form of protest.

Walmart has long adopted the position that unions are unnecessary in the context of Walmart’s company culture and that such unions would not serve the best interests of its associates and the company. The labor unions, on the other hand, have argued that it is in the best interests of those associates to collectively bargain with Walmart to seek improved pay and working conditions. Many of these arguments have played out under the guidance of the National Labor Relations Board, pursuant to the requirements of the National Labor Relations Act. However, in United Food and Commercial Workers International Union v. Walmart Stores, Inc., 2016 Ark. 397 (2016), the Arkansas Supreme Court recently found the National Labor Relations Act to be inapplicable in a trespassing case that Walmart brought in Benton County Circuit Court. In that case, the Arkansas Supreme Court upheld Walmart’s prohibition against labor union groups engaging in demonstrations and protests in Walmart stores and on other Walmart properties. While labor union groups are allowed to enter Walmart stores to shop or for other non-disruptive purposes, if such groups engage in the prohibited activities they may be held liable for trespassing. Generally, state laws that relate to labor and alleged unfair labor practices are preempted by the National Labor Relations Act. Despite this general rule, in United Food and Commercial Workers International Union, the Arkansas’s Supreme Court joined the ranks of various other state supreme courts by holding that the National Labor Relations Act does not preempt common law tort actions such as trespassing.

This Arkansas Supreme Court case arose from a 2013 injunction that a trial court issued to prevent the labor union groups from entering on Walmart properties to engage in any “non-shopping activities.” The trial court issued the injunction after a union group organized multiple confrontational protests at various Walmart store locations in Arkansas. While the Arkansas Supreme Court found the injunction’s limitation of all “non-shopping activities” to be too broad, the Court upheld Walmart’s right to prohibit the labor union related groups from entering onto Walmart properties to engage in activities “such as picketing, patrolling, parading, demonstrations, ‘flash mobs,’ handbilling, solicitation, and manager confrontations.” United Food and Commercial Workers International Union, 2016 Ark. at *11. As a result of the Arkansas Supreme Court’s ruling, if labor union groups want to enter Walmart stores in Arkansas, they might have to exchange their protest signs for shopping carts.

“Good condition” is not a reliable warranty; “right to return for purchase price” is.

One would think when purchasing anything from an automobile to an appliance to equipment, that the assurances of the seller that the item is in “good and reliable” condition would be an effective warranty protecting the buyer. It is not. Make sure you get a written promise to return it for your purchase price if not satisfied.

The Arkansas Court of Appeals decided on November 9, 2016, the case of Epley vs. Gibson Auto Sales, 2016 Ark. App. 540. In that case, Ms. Epley bought a car from a used car dealer, Mr. Gibson. Mr. Gibson admitted that he told her the car was in good condition. After trying to drive it and dealing with multiple problems and repairs for over a year, she returned the car, claiming a breach of its warranty that it was in good condition. Testifying in her behalf was the person who had traded the car to the dealership, who said he had advised Mr. Gibson that in the car’s 110,000 miles, it had a long history of repairs and damage and, in the owner’s opinion, the car should be scrapped and used for parts. None of this, of course, was shared with Ms. Epley who instead was told by the dealer that the car was in “good condition.”

The Court found the assurance that the car was in “good” condition was a subjective term subject to interpretation by individuals as to exactly what that meant, and thus not a firm warranty. It was in the realm of permissible “puffing,” rather than an objective guarantee. In so ruling, it is now the law in Arkansas that any assurance that something is in “good” condition is for all legal and practical purposes, a legally worthless assurance.

Fortunately, the Court found that an oral promise had also been made that the car could be returned for the purchase price if the buyer was dissatisfied, so the disappointed new owner was afforded relief. It is always a dangerous thing to rely on an oral promise; though oral promises are usually “legal,” they can be very difficult to prove with certainty. The moral of this story is, ignore any assurances that some used property you are buying is in “good” condition, and get the written assurance of the seller that if you are not satisfied for any reason, you can return it for your purchase price.

Marijuana, and Casinos, and Tort Reform! Oh, my!

To add to the drama of this unprecedented election season, a side battle has been raging in Arkansas Courts with respect to three proposed amendments to the Arkansas Constitution. This battle involves attempts, through constitutional amendment, to legalize medical marijuana, legalize additional casinos and gambling, and authorize the Arkansas General Assembly to enact a specific type of medical tort reform that limits certain types of damages and limits attorney contingency fees.

Unlike many states, in Arkansas, our Constitution (Amendment 7) allows for a streamlined method for citizens to amend that Constitution by popular vote. The purpose of this process is to give “power to the people.” Citizens petition their legislators to propose amendments, citizens obtain signatures for the proposed amendments, and the Arkansas Attorney General must approve any ballot names and ballot titles prior to the proposed amendments being put to the vote of the citizenry. However, it is not a free for all. There are some limits on any attempt to amend the Arkansas Constitution by popular vote. Arkansas Chief Justice Howard Brill recently stated that “[t]he spirit of Amendment 7, which gives power to the people, requires [the Arkansas Supreme Court] to give appropriate guidance to those constituencies.” Wilson v. Martin, 2016 Ark. 334 (2016) (concurring opinion).

Which brings us back to the battle of the proposed constitutional amendments. Each proposed amendment – the medical marijuana amendment, the casino/gambling amendment, and the medical tort reform amendment – have fervent advocates as well as stiff opposition. The medical marijuana amendment drew the ire of the state Chamber of Commerce, many businesses, doctors, and even the Governor (former head of the federal Drug Enforcement Administration). Similarly, the proposed medical tort reform amendment has been aggressively challenged by the Arkansas Bar Association, the American Trial Lawyers Association, and various medical malpractice plaintiffs’ attorneys. There was also opposition to the proposed casino amendment, which created some strange bedfellows, uniting religious groups and Arkansas’s existing casinos (Oaklawn Park and Southland Gaming) in opposition to an out-of-state push to allow for expanded gambling in Arkansas.

Due to this active opposition, it was inevitable that challenges to the three proposed amendments would end up before the Arkansas Supreme Court. The cases, which were decided by the Arkansas Supreme Court on October 13, 2016, each challenged the adequacy of the respective “ballot titles.” Under Arkansas law, “[t]he ballot title must be an impartial summary of the proposed amendment, and it must give voters a fair understanding of the issues presented and the scope and significance of the proposed changes in the law.” Cox v. Daniels, 374 Ark. 437, 288 S.W.3d 591 (2008). It must be complete enough to convey the scope of the amendment and be “free from misleading tendencies that, whether by amplification, omission, or fallacy, thwart a fair understanding of the issue presented.” Id. After reviewing the various ballot titles, the Arkansas Supreme Court ruled the ballot titles for the proposed casino and medical tort reform amendments were insufficient because they failed to provide voters with enough information to understand the proposed amendments and their scope. Lange v. Martin, 2016 Ark. 337 (2016); Wilson v. Martin, 2016 Ark. 334 (2016); Rose v. Martin, 2016 Ark. 339 (2016). The Court came to a different conclusion with respect to the ballot title for the proposed medical marijuana amendment, which it found to be sufficient. It made this decision in spite of the fact that the ballot title fails to specifically inform voters that the amendment prevents doctors, lawyers, and other professionals from being denied a license to practice or from being disciplined for using medical marijuana.

As you head to the polls to cast your votes in this crazy election, you can be assured that at least two of your votes will not count. The Arkansas Secretary of State is prohibited from counting any of the votes related to the proposed casino and medical tort reform amendments, even though they will appear on ballot. On the other hand, your vote either in favor or against medical marijuana will count.

The “terror” of no-contest clauses

Clients, seeing or hearing of bitter and expensive legal disputes in other families over estates, concerned about their own family engaging in such disputes after their death, or both, often seek to avoid that by requesting their attorney insert “In terrorem” (Latin– “about fear”) or “non-contest” provisions in their wills or trusts. Simple in concept, these clauses rarely serve the intended purpose and, as a recent decision of the Arkansas Court of Appeals demonstrates, can cause, as well as resolve, probate litigation.

Such a clause in a will or trust may read, “any beneficiary challenging the validity or distribution of this will or trust shall be disinherited and take nothing.” Clients do not realize the various ways that estate litigation can, and sometimes should, arise: Has the executor or trustee who controls the estate after the death of the client actually stolen from or been negligent with the assets of the estate? Was grandma competent, or because of age, senility, poor judgment and ungrounded fears, actually incompetent or under substantial improper influence when she signed such a will or trust giving her entire estate to Hari Krishna? Is the language of the will or trust truly so ambiguous that how it should be distributed is completely uncertain? Families and next of kin feel strongly and morally justified to set such wrongs right, but barring the door is a “no-contest” clause!

In a recent decision, the Arkansas Court of Appeals refused the request of one son to enforce an in terrorem clause against his brother because neither son abided by their mother’s wishes or the terms of the trust. Scott v. Scott, 2016 Ark. App. 390. Our courts have also generally ruled that when a challenger of a will prevails on whatever claim they have, the no-contest clause is deemed inapplicable. So, has it really accomplished anything? One must also realize that the sanction of taking nothing from the will or trust has no validity if the purported beneficiary is given nothing in the first place: a prodigal child is given one dollar in the will, but faces the sanction of losing “everything” if he challenges the will– really what does he have to lose? To make this work against a beneficiary to whom the client may want to leave little, the client will have to leave that beneficiary enough that he risks a significant forfeit if he does challenge the will.

In summary, most if not all of the claims against a will or its administration that a “no-contest” clause may stop can nevertheless be asserted, may prevail, and perhaps should prevail. That is not to say in very carefully considered circumstances, a properly and carefully conceived and drawn no-contest clause could effectively and substantially diminish the possibility of spurious estate litigation, but such a clause is almost never the simple, “cut out the bad apple” result that clients would presume when using one.