# Opposition Brief — Stoltz v. First Pyramid Life Insurance Co. of America

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Opposition Brief
- **Published:** January 1, 1993
- **Citation:** 510 U.S. 908

## Text

ya Finn wv
AUG 2 5 1993

a Pre mes

No. 93-128

IN THE

Supreme Court of the Gnited States

OCTOBER TERM, 1993

J. MICHAEL StTo.ttz, AS SPECIAL ADMINISTRATOR OF
THE ESTATE OF J.P. Sto_tTz, DECEASED.

Petitioner.

FIRST PYRAMID LIFE INSURANCE COMPANY
Or AMERICA, et al.,

Re spondent.

On Petition For A Writ Of Certiorari
To The Arkansas Supreme Court

RESPONDENT’S BRIEF IN OPPOSITION

*JoHN E. TUL III
PETER G. KUMPE

J. LEON HOLMES
WILLIAMS & ANDERSON
Twenty-Second Floor
111 Center Street
Little Rock, AR 72201
(501) 372-0800

Attorneys for Respondent

*Counsel of Record

PRESS OF BYRON S. ADAMS, WASHINGTON, D.C. (202) 347-8203

BEST AVAILABLE COPY

—— ee —

QUESTIONS PRESENTED

Petitioner represents certain disgruntled family
members who sued an insurance company for breach
of contract because it paid $2,000,000 in life insurance
proceeds to their brother rather than the estate. Pay-
ment was made January 19, 1978, and their action
was filed on April 20, 1989, more than 11 years after
payment. A jury returned a verdict for $2,000,000 in
compensatory damages plus $1,000,000 in punitive
damages, but the Arkansas Supreme Court unani-
mously reversed the case on the ground that it was
barred by the statute of limitations. Following the
reversal, petitioner claimed that the Chief Justice of
the Arkansas Supreme Court (and the author of the
opinion) was biased because he had gone quail hunting
with Herschel Friday of the Friday, Eldredge & Clark
law firm (“Friday Firm’’). Petitioner claimed the Fri-
day Firm had an interest in the outcome even though
they were not a party to the lawsuit. In this context,
the petitioner raises the following questions:

1. Whether petitioner’s due process rights were vi-
olated because the Chief Justice of the Arkansas
Supreme Court purportedly went quail hunting with
a member of a law firm whose lawyers were witnesses
in the law suit.

2. Whether petitioner’s due process rights were vi-
olated because the Arkansas Supreme Court noted
that two family members represented by petitioner
had also received notice that the estate of J.P. Stoltz
was initially named as beneficiary of his life insurance
policies.

ii

TABLE OF CONTENTS

Page

QUESIOON PRMUEIEES sccsisenisctsmanmne i
TAR GP COREE ES scsessesinarivtsscinmenaen ll
TABiae GF ALTERS EIED stesncnisimmanamanes ill
SRARMEURIEINE GE EER GAIN desecesssiccnscoesncceteasnanenens 1
Bi. TREO. sinniiccrincicinisdeaene 1
BD. PROCORG BOW esciccicinciimeaae 1
SURREAL OF ARAAUMEING cccescsscccensvssenssnusmescnecssss 8
REASONS FOR DENYING THE PETITION ............. 9

A. Petitioner’s Due Process Rights Were Not
Violated Because Any Insignificant Social
Relationship Between The Honorable Chief
Justice of the Arkansas Supreme Court And
A Nonparty Did Not Constitute Grounds for
aan ontnsideinuhiibiesiineneumuanateaeeiaiaiaiaaeae 9

1. The issues presented do not concern con-
stitutional and statutory questions that are
likely to have widespread general
SIEE. .ssinscssnicgnacmmmcamena dean ainbaatae 9

2. Petitioner’s claim that the Chief Justice
of the Arkansas Supreme Court had a
longstanding social relationship with an
interested party is baseless. .................6.. 11

B. The State of Arkansas Did Not Violate
Petitioner’s Right To Due Process And Tulsa
Professional Collection Services, Inc. v. Pope,

485 U.S. 478 (1988) Is Inapplicable. ............ 18

CUBFRAIEOET scovsncsscnneseynetesianseeisiien elie eeaeaie 20
FADE ERRTEIGAL. oinsscassnensnevenencerseanvenseniiibeeie ee la

iil

TABLE OF AUTHORITIES

CASES: Page
Aetna Life Ins. Co. v. Lavoie, 106 S.Ct. 1680

atti scdiahinnhscsensunecsenabarcurcecsesceensoqense 916,17
Arkansas Indus. Dev. Comm’n v. FABCO, 312 Ark.

25, 847 S.W.2d 13 (1993) ...........cccccccccrceserseeee 15
City of Jacksonville v. Venhaus, 302 Ark. 204, 788

IE EE BID cccnccacssncccscscnccassonsenssscosssssoses 17

Committee For Utility Training, Inc. v. Hamilton,
290 Ark. 283, 286, 718 S.W.2d 933 (1986) .... 13

Farr v. Newman, 14 N.Y.2d 183, 199 N.E.2d 369

(N.Y. App. 1964) ...............ccccccsscssscrccssssssssccees 19
Ford’s, Inc. v. Russell Brown & Co., 299 Ark. 426,
SE WP CE IOD cosncccvcncsnssonsnnrecssonsesocccanee 19
Ingram v. Luther, 244 Ark. 260, 424 S.W.2d 546
IIT Lin tilitscpaskarsesessisscsenstessssonseseassonerccesesesoees 19
Johnson v. Sturdivant, 295 Ark. 622, 758 S.W.2d
Ie carichitsdictensyebsanasnnessvccsesveatsassosonseseosses 16
Korokov v. Korokov, 33 Ark. App. 194, 197, 803
EE WD CRUE) secesccevesscseccccscsscesencccccsssscenees 20
Lilejeberg v. Health Services Acquisition Corp., 486
SME SETIED cnnsesesnsccesesescsessnssiossccossosvsesensess 17
Matthews v. Rogers, 279 Ark. 328, 333-4, 651
EE ME BEOEGD sesssscnsescsscsssansnessecessnnessvecesers 13
Moore v. Missouri Pacific R.R., 299 Ark. 232, 773
S.W.2d 28, 6 A.L.R. 5th 1188 (1989) ............ 16
Patterson v. R.T., 301 Ark. 400, 784 S.W.2d 777
IIT ic dui dassnersaseliosonsanessaszovesdassssesovesnnssocarceses 17
Pope County v. Friday, Eldredge & Clark, 313 Ark.
BB, 862 S.W.2d 114 (1990S) .........cccccccccccccrrresees 14
Porter v. McCuen, 310 Ark. 562, 839 S.W.2d 512
IIIS) shi usacedustepnsadenksuscccnvsienntarsvosnosevennesaceseseses 15

Potlatch Corp. v. Arkansas City School Dist., 311
Ark. 145, 842 S.W.2d 32 (1992) ...........cccees 15

iV

Table of Authorities Continued

Page
Register v. Oaklawn Jockey Club, Inc., 306 Ark.
318, 811 S.W.2d 315, opinion on reh’g, 306
Ark. 321, 821 S.W.2d 475 (1991) .............cc00. 16
Southwestern Bell Tel. Co. v. Blastech, Inc., 313
Ark. 202, 852 S.W.2d 813 (1993) ................... 15
Tulsa Professional Collection Services, Inc. v. Pope,
i Pe HI wa chasis pandensirancgckaduasianie iakound 18,19

Younts v. Baldor Electric Co., 310 Ark. 86, 832
ee cassens 15

STATEMENT OF THE CASE

A. Introduction

The Arkansas Supreme Court in a unanimous de-
cision reversed a jury award in favor of petitioner
because the lawsuit was filed more than 11 years
after the act in question and the statute of limitations
had run. The Arkansas Supreme Court also noted that
the record was devoid of any evidence of fraudulent
concealment necessary to toll the running of the stat-
ute of limitations. Following the reversal, petitioner
asserted for the first time that a “reliable source”’
had informed him that the Chief Justice of the Ar-
kansas Supreme Court and Herschel Friday had gone
quail hunting together on several occasions. Subse-
quently, ‘petitioner instructed his attorneys to inves-
tigate” the matter and in short shrift a motion for
rehearing and vacatur was presented to the Arkansas
Supreme Court. Both were denied.

Even were the underlying facts true, the issues
presented are not novel and there is no reason for
this court to grant certiorari. The first and second
questions presented by the petition are the same and
do not need to be considered separately.

B. Proceedings Below

On December 18, 1975, J.P. Stoltz applied to First
Pyramid for life insurance totalling $2,000,000. The
application designated the proposed insured’s estate
as beneficiary. Later, for tax reasons the application
was revised to seek two policies: one in the amount
of $50,000 and another for $1,950,000. After the ap-
plications were accepted, J.P. Stoltz completed and
delivered to First Pyramid beneficiary agreements
naming his oldest son, Steve Stoltz, as beneficiary.

That change was accepted in writing by First Pyra-
mid without the countersignature on behalf of the
Oklahoma trustee that acted as “‘legal’’ owner of the
policy. To generate greater tax savings, First Pyra-
mid designated these policies to be issued in Okla-
homa because that State’s law authorized higher group
policy limits than did Arkansas law. J.P. Stoltz also
completed and delivered a change of ownership form
to First Pyramid naming his son owner of the larger
($1,950,000) policy to avoid paying estate tax on the
policy proceeds.

J.P. Stoltz died on December 18, 1977. Only his
son Steve Stoltz claimed the policy proceeds. Before
paying the claim, First Pyramid sought the advice of
its attorney, Allan W. (‘‘Dick’’) Horne. Mr. Horne
concluded in a memorandum (‘‘Horne memorandum’’)
that Steve Stoltz was the legal beneficiary, but rec-
ommended that the proceeds be interpleaded because
of uncertainties in file documentation including the
lack of the Oklahoma trustee’s signature on the ben-
eficiary agreement. Mr. Horne’s advice was summa-
rized in a memo:

SUMMARY: There is a substantial risk
whether payment is made to the son or to
the estate.

(a) There appears less risk if payment is
made to the son since those involved seem
sure he was the intended beneficiary.

(b) There appears more risk if payment is
made to the estate because of the insured’s
apparent intent to benefit the son.

(c) In either event, exposure could be re-
duced by requiring an indemnity agreement
from either the son or the estate.

(d) An interpleader action is probably the
safest course. However, the company could
be exposed to a suit from the loser, i.e., the
son or the estate. Therefore, this alternative
is not a complete solution either. [emphasis
added]. (App. 1.)

At a later meeting with officers of First Pyramid,
and after further consideration, Mr. Horne concurred
that paying the son without interpleader was ‘‘the
best course.’’ On January 19, 1978, respondent First
Pyramid Life Insurance Company of America (“First
Pyramid”) paid James Stephen Stoltz (“Steve Stoltz’’)
$2,000,000.

During separate litigation commenced on May 4,
1984, by the Internal Revenue Service to collect un-
paid taxes, an attorney at Friday, Eldredge & Clark
(“Friday Firm’’) acting as counsel for J.P. Stoltz’s
estate discovered and reviewed the Horne memoran-
dum. The estate counsel considered the irregularities
in the file and concluded that Steve Stoltz was the
legal beneficiary, but did not report the discovery to
any estate beneficiaries except Steve Stoltz, who was
also executor of the estate. On September 3, 1987,
over nine years after the policies had been paid, cer-
tain beneficiaries of the Stoltz estate commenced an
action in Faulkner County Probate Court to challenge
the management of the estate. Discovery in the pro-
bate action again produced the Horne memorandum.
On April 20, 1989, those dissatisfied estate members
commenced this action.

This case was brought originally as a negligence
and breach of contract action coupled with a claim
of bad faith. Because of the 11-year delay in bringing
the claim, petitioner also alleged fraudulent conceal-
ment in an attempt to overcome the limitations de-
fense. The original trial judge was the Honorable
Perry V. Whitmore. Judge Whitmore overruled a mo-
tion for summary judgment on the limitations issue
after hearing argument on two separate occasions,
concluding:

To avoid the loss of those causes of action,
the plaintiff must prove either the defendant
insurance company by its overt acts caused
the legal right to be hidden and thereby be-
come time barred; or there existed a specific
legal relationship between the parties that in
and of itself obligated an overt disclosure of
the existence of those claims. An insurer/ben-
eficiary relationship does not seem to create
that legal obligation; however, on the claim
of a factual coverup, the plaintiff should have
its day in court.

At this point, the case remained a negligence and
contract case with a claim of bad faith. The trial court
recognized that the tolling of the statute under the
doctrine of fraudulent concealment depended on proof
that First Pyramid acted to conceal the claim.

Following Judge Whitmore’s retirement, the limi-
tations issue was again presented to the trial court.
This time it was coupled with a motion for summary
judgment which claimed that Steve Stoltz was the
contract beneficiary as a matter of law. During the
course of the argument, petitioner’s counsel asserted

that the Friday Firm was implicated in a conspiracy
to conceal a fraud from the estate while that firm
was the estate’s attorney. On the limitations issue,
The Honorable Chris Piazza concluded that fraudulent
concealment was an issue for the jury, but unlike
Judge Whitmore who focused on conduct by First
Pyramid, Judge Piazza emphasized petitioner’s con-
spiracy allegation as creating a jury issue:

Then you have this allegation, you know, that
there was some type of fraud there that the
association [by First Pyramid through the
Friday Firm lawyer-Buddy Sutton] with the
bank, with the loan that was paid off, the
liabilities of the corporation the son paid off,
how it was interconnected.

Here, Judge Piazza initially and correctly notified
petitioner he would be required to present evidence
of a fraudulent conspiracy between First Pyramid and
the Friday Firm to escape the operation of the statute
of limitations.

During the trial from August 5-10, 1991, petitioner
abandoned the allegation of a conspiracy between the
Friday Firm and First Pyramid and failed to present
any evidence of such a conspiracy. The trial court
submitted the case over the objection of First Pyr-
amid on a general verdict under a contract theory
coupled with instructions characterized as “‘fraud due
to nondisclosure.’”’ Petitioner tendered no bad faith
instruction and withdrew his negligence instruction
immediately prior to the reading of the instructions.
The jury returned a general verdict and Judge Piazza
directed a verdict for compensatory damages of
$2,000,000. The jury also awarded punitive damages

of $1,000,000. After considering several post-trial mo-
tions concerning trial errors and objection to the pro-
posed form of judgment, the trial court entered
judgment as assessed by the jury and awarded
attorneys’ fees and interest. First Pyramid filed a
timely notice of appeal from the judgment to the Ar-
kansas Supreme Court. Petitioner cross-appealed and
sought additional interest and penalties on the jury
verdict.

On December 21, 1992, the Arkansas Supreme
Court unanimously reversed the lower court. With
respect to the limitations issue, the Arkansas Supreme
Court characterized petitioner’s position in its opinion
of December 21, 1992, as follows: ‘‘Representatives
of the estate contend that the statute of limitations
in this action was tolled by First Pyramid’s allegedly
fraudulent concealment of the controversy.’ On that
issue, the dispositive sentence in the Court’s opinion
is: “There is simply no evidence of record that First
Pyramid attempted to fraudulently conceal, ‘coverup’
or misrepresent to the estate the problem with de-
termining the proper beneficiary of J.P. Stoltz’s in-
surance policy.”

Subsequently, on January 19, 1993, petitioner filed
a Motion for Vacatur, to Disqualify and, in the Al-
ternative, to Appoint a Special Master and Motion
for Extension of Time to File Petition for Rehearing.
In this pleading, petitioner alleged that the author of
the opinion of the Arkansas Supreme Court, The Hon-
orable Chief Justice Jack Holt, Jr., had favored First
Pyramid because of a substantial social relationship
between Chief Justice Jack Holt, Jr. and Herschel
Friday of the Friday law firm. In the motion for

vacatur, petitioner’s counsel relied upon a letter pur-
portedly authored by his client. [App. 2]

On January 22, 1993, petitioner filed a petition and
brief for rehearing in the Arkansas Supreme Court
alleging, inter alia, that the Court’s opinion holds
that knowledge ‘‘obtained by a distant heir and a
potential stranger to the estate, somehow constitutes
notice to the estate, and its minor children, the rights
and obligations, thereby violating the Fourteenth
Amendment to the U.S. Constitution.”’ [App. 3]
Petitioner raised no other due process rights.

On February 15, 1993, the Honorable Chief Justice
Jack Holt,Jr. filed an opinion declining to disqualify.
[App. 4] On February 18, 1993, petitioner filed a Mo-
tion for Reconsideration of the decision not to dis-
qualify. [App. 5] On February 22, 1993, the Arkansas
Supreme Court denied the Petition for Rehearing,
Motion for Stay and Motion for Reconsideration of
Motion for Vacatur, to Disqualify and, in the Alter-
native, to Appoint a Special Master. The case was
remanded to the trial court on March 15, 1993.
Petitioner has now filed his Petition for Writ of
Certiorari before this Court.

The Friday Firm is the state’s largest law firm and
is held in the highest regard. Mr. Herschel Friday is
consistently recognized as one of the finest lawyers
in Arkansas and the country and his integrity is be-
yond reproach. The client list of the Friday Firm
includes many banks and leading businesses but nei-
ther the firm nor its clients have ever received ‘‘spe-
cial”” consideration from Chief Justice Holt since he
was sworn in as the Chief Justice of the Arkansas
Supreme Court in 1985.

The Friday Firm was not an interested party in
this litigation. The Estate of J.P. Stoltz was repre-
sented by the firm and although petitioner continually
made allegations of the existence of a conspiracy be-
tween the firm and First Pyramid, he dropped the
allegations at trial and failed to present any evidence
in support thereof. Mr. William H. “Buddy” Sutton-
a leading Friday Firm lawyer-was not a member of
the board of First Pyramid at the pertinent time.

The unsatisfied family members who bring this ac-
tion continue to seek monetary relief and have re-
cently filed an action against the Friday Firm. These
family members have also settled their claim against
their brother-Steve Stoltz-who served as executor of
his father’s estate.

SUMMARY OF ARGUMENT

The Petition for Writ of Certiorari is not filed in
good faith. Essentially, petitioner claims that because
he has “reliable information’ that the Chief Justice
of the Arkansas Supreme Court went quail hunting
with a member of the Friday Firm, a law firm that
was not a party to the proceeding and a firm that
has now been sued by the petitioner, his due process
rights were violated by the failure of the Arkansas
Supreme Court to recuse itself. There are no cases
in the United States where such an insignificant social
relationship has resulted in the relief sought by
petitioner. Indeed, if the Supreme Court found that
this type of social interaction constituted grounds for
recusal, virtually every trial and appellate judge in
rural areas throughout the country would be forced
to recuse.

ee

REASONS FOR DENYING THE PETITION

A. Petitioner’s Due Process Rights Were Not Violated
Because Any Insignificant Social Relationship Be-
tween The Honorable Chief Justice of the Arkansas
Supreme Court And A Nonparty Did Not Constitute
Grounds for Recusal.

1. The issues presented do not concern constitu-
tional and statutory questions that are likely to
have widespread general impact.

The first two questions presented in the petition
are whether and under what circumstances a party’s
due process rights are violated when an appellate
judge refuses to recuse himself. This Court has al-
ready decided this question in Aetna Life Ins. Co. v.
Lavoie, 106 S.Ct. 1680 (1986). As will be discussed
later, Aetna is not in tension with this case, rather
it simply is factually distinguishable because there was
no reason for the Arkansas appellate judge to recuse.
Thus, the question is settled and there is no reason
fx: the Supreme Court to reconsider the clear impact
of Aetna. In fact, this petition is nothing more than
petitioner’s last gasp to revive the case.

The discovery proceedings and trial of this matter
are best described as acrimonious. The petitioner rep-
resents certain family members who have sued other
family members over the estate of their deceased
father. The respondent life insurance company, whose
predecessor provided life insurance policies on their
father, was caught in the middle. After a hard-fought
trial, the Arkansas Supreme Court unanimously re-
versed the substantial jury award in its entirety be-
cause the applicable statute of limitations barred the
action. Following that reversal, petitioner has as-

10

serted scandalous and libelous claims regarding the
Chief Justice of the Arkansas Supreme Court and one
of the most respected law firms in the State of Ar-
kansas. It was only after the reversal that the
petitioner and his counsel made these baseless charges
of a “long standing social relationship with an inter-
ested party.”

Somewhere along the way, courts must stand up
and put a stop to petitioner’s tactic of trial by ter-
rorism, insinuation and innuendo. Petitioner’s irre-
sponsible and irrational demands that the Chief Justice
and the entire Court should vacate the Court’s opinion
and step aside from the case cannot be sanctioned.
If the Arkansas Supreme Court had recused or if this
Court gave credence to the personal attack on the
Chief Justice and the Friday Firm, seven new judges
would be appointed by Governor Jim Guy Tucker. If
those seven judges decided against petitioner, he
would no doubt allege that Governor Tucker was
somehow involved in the conspiracy that the petitioner
continues to allege in the absence of any evidence.
Moreover, petitioner’s position, if given credence by
this Court, would require reopening dozens of cases
involving the Friday Firm which have been decided
by the Arkansas Supreme Court since January 1,
1985, the date upon which Jack Holt, Jr. was sworn
in as Chief Justice. If the Chief Justice or any other
member of the appellate court was required to recuse
from this case, the same could be expected in every
future case in which the Friday Firm is involved.
Moreover, the door will be open for every party who
loses an appeal to search for some casual, social con-
nection between a member of the Arkansas Supreme
Court and someone involved, even tangentially, in the

1]

matter. Likewise, every trial judge who hears a case
involving a lawyer with whom he has had some social
connection will be forced to recuse. Pandora’s box
would be opened, and its evils loosed, never to be
captured again.

2. Petitioner’s claim that the Chief Justice of the Arkansas

Supreme Court had a longstanding social relationship
with an interested party is baseless.

The petitioner’s claim that a “substantial long
standing social relationship’ exists between the Hon-
orable Chief Justice Holt and Mr. Herschel Friday is
without support. Petitioner submits his own pleadings,
self-serving affidavits and a copy of his complaint filed
with the Arkansas Judicial Discipline and Disability
Commission in “support’’ of his wild accusations.
Petitioner attempts to hide behind a letter purport-
edly written by him and advice purportedly given by
other, unnamed, lawyers and other unidentified per-
sons. In his statement of the case, petitioner asserts
that he instructed his attorneys to investigate whether
a long standing and close friendship existed between
the Chief Justice and the Friday firm. This ‘“‘instruc-
tion’”’ was given in the form of a letter from petitioner
to his lawyers.

No lawyer should have caved in to a demand from
a client that a Motion for Vacatur or Petition for
Writ of Certiorari be filed, even if the client de-
manded it (the letter asked only for an investigation
and advice) and even if the demand came from the
client in a bona fide manner. It should be noted that
the petitioner’s letter giving rise to the Motion for
Vacatur and the Petition for Writ of Certiorari has
the same typeset as the Motion for Vacatur and brief
in support thereof signed by the attorney. Further,

iil

12

Counsel’s affidavit in support of the motion for va-
catur states that Mike Stoltz ‘‘contacted me around
Christmas, 1992 ... and informed me that he had
heard of quail hunting trips taken to Herschel Fri-
day’s farm by Jack Holt, Jr. ... and trips to leased
land in the State of Texas.’’ [App. 6] The letter, which
is dated January 12, 1998, and stamped as received
on January 13, 1993, says “I am writing to inform
you of some very upsetting rumors I have heard in
the last couple of weeks.’’ Thus, the letter indicates
that its purpose is ‘‘to inform’’ counsel of something
that counsel’s affidavit says had been discussed three
weeks prior to the letter. The letter asked that counsel
“investigate these rumors immediately and notify me
of my legal options.’”’ However, the letter declined to
identify the source of the information, citing only a
“reliable source,” which is an extremely odd way for
a client to ask his lawyer to carry out an investi-
gation. By January 19, 1993, six days after the letter
is stamped as received by counsel, the investigation
had been completed, a course of action had been de-
termined, legal research had been completed, a
lengthy brief had been written, and the motion for
vacatur had been filed.

Petitioner’s lawyer should have informed his client
that casual, social contact, such as a quail hunting
expedition, is no grounds for disqualification and does
not give rise to an appearance of impropriety.
Petitioner’s lawyer should have informed his client

‘For purposes of this portion of the brief, respondent will
give credence to the claim that a quail hunting expedition had
occurred, but in fact there is absolutely no evidence that Chief
Justice Holt has ever been quail hunting with Herschel Friday
or anyone else from the Friday law firm.

oo EEEO——e—__

13

that there are no cases in the United States where
a judge has been disqualified because he had been
quail hunting with some lawyer who might or might
not stand to benefit from a decision of the court. The
applicable law is stated in Matthews v. Rogers, 279
Ark. 328, 333-4, 651 S.W.2d 453 (1983), where the
Arkansas Supreme Court stated:

In this State trial judges often know most,
if not all, of the attorneys who practice be-
fore them. They may have attended the same
schools, churches, or belong to the same civic
clubs. Most are members of the same bar
association. ... Those friendships within the
bench and bar do not, of themselves, cause
prejudice. The public and the clients are
aware of their mutual friendships and ac-
quaintances.

“Friendship with a member of the bar is not a ground
for recusal.’’ Committee For Utility Training, Inc. v.
Hamilton, 290 Ark. 283, 286, 718 S.W.2d 933 (1986).
There is no allegation here that Mr. Friday and Chief
Justice Holt belong to the same church, belong to the
Same civic organizations or visit in one another’s
homes. The Arkansas Supreme Court correctly de-
duced that if it gave in to petitioner’s demands it
would destroy the possibility of finding local judges
to hear cases in most, if not all, of the judicial dis-
tricts in Arkansas, where the bar is small and judges
and lawyers unavoidably have social acquaintances
which are often much closer relationships than that
alleged to exist between Mr. Friday and Chief Justice
Holt.

The assertion that the Friday Firm stood to benefit
from a reversal in this case is, like so many other

——eWVcVnV—_e_eEerereeee ee

14

allegations made by the petitioner, a distortion of the
truth. If the Arkansas Supreme Court wanted to pro-
tect the Friday Firm, the best way to do that would
have been to affirm the judgment. By reversing, the
door was opened for petitioner to make a claim
against the Friday Firm.? Had the judgment been
affirmed, petitioner would not have had a claim
against that firm. Moreover, as petitioner well knows,
respondent filed a third-party complaint before the
trial against four other parties, and the Friday Firm
was not among them. Indeed, it is hard to fathom
what respondent could have alleged against the Fri-
day Firm. Is it petitioner’s suggestion that First Pyr-
amid could have sued the Friday Firm for not advising
the Estate of J.P. Stoltz to sue First Pyramid?

Thus, the insinuation that the Arkansas Supreme
Court favored the Friday Firm by reversing the judg-
ment in this case is, to put it charitably, a flight of
the imagination. Further, a review of the record of
the Arkansas Supreme Court clearly reveals that the
Friday Firm does not receive special treatment from
the Arkansas Supreme Court. A simple review of re-
cent advance sheets reveals a number of cases in the
past few months in which the Arkansas Supreme
Court ruled against the Friday Firm’s interest. Re-
cently, the Arkansas Supreme Court ruled against the
Friday Firm itself in Pope County v. Friday, Eldredge
& Clark, 313 Ark. 83, 852 S.W.2d 114 (1998). In Pope
County, the Arkansas Supreme Court decided that an
action against the Friday Firm for legal malpractice

2In fact, on May 3, 1993, petitioner filed a complaint in Pu-
laski County Circuit Court against the Friday Firm styled J.
Michael Stoltz v. Herschel H. Friday d/b/a the Law Firm of
Friday, Eldredge & Clark, et al., No. 93-2813. )

es

15

was not barred by the statute of limitations. In an-
other recent case, Arkansas Indus. Dev. Comm’n v.
FABCO, 312 Ark. 25, 847 S.W.2d 18 (1993), in which
Mr. Friday was representative counsel, the Arkansas
Supreme Court denied the Friday Firm’s client an
award of reasonable attorneys’ fees but awarded
attorneys’ fees to the opposing party. See also South-
western Bell Tel. Co. v. Blastech, Inc., 313 Ark. 202,
852 S.W.2d 813 (1993); Potlatch Corp. v. Arkansas
City School Dist., 311 Ark. 145, 842 S.W.2d 32 (1992);
Porter v. McCuen, 310 Ark. 562, 839 S.W.2d 512
(1992); Younts v. Baldor Electric Co., 310 Ark. 86,
832 S.W.2d 832 (1992).°

Petitioner’s wild accusation that Chief Justice Holt
is somehow biased in favor of the Friday Firm is
equally ludicrous. Once again a review of the public
record is compelling. Chief Justice Holt has authored
several majority opinions in cases involving the Friday
Firm, and in the preponderance of cases wrote an
opinion adverse to the interests of that firm. In fact,
a computer search‘ identified eighteen majority opin-
ions authored by Chief Justice Holt in which the Fri-
day Firm represented a party—only seven of those

* Ironically, the day petitioner filed the Motion for Vacatur in
the Arkansas Supreme Court, that court issued an opinion in a
major case deciding by a 4-3 vote against the interest of the
Friday Firm. Hasha, et al. v. City of Fayetteville, et al., No. 92-
578 (Jan. 19, 1993). Chief Justice Holt joined the majority opin-
ion.

‘Chief Justice Holt took the bench in 1985. A computer search
using Case Base, a research database with Arkansas cases on
CD-ROM, was conducted for all cases since 1985 authored by
“Holt” in which “Friday” occurred in the “Attorneys on Appeal”
segment of the official report. Each case was then verified in-
dividually and the outcome recorded.

16

opinions favored the Friday Firm. Thus, in nearly
two-thirds of the cases Chief Justice Holt rendered
an opinion adverse to the Friday Firm. A table listing
all eighteen cases and the outcome of each is attached
hereto as Appendix 7.

The opinions by Chief Justice Holt adverse to the
Friday Firm include one 4-3 decision in a case of first
impression that easily could have gone the other way.
Mr. Friday was a signatory to the brief in that case.
Moore v. Missouri Pacific R.R., 299 Ark. 232, 773
S.W.2d 28, 6 A.L.R. 5th 1188 (1989). In another case,
Chief Justice Holt wrote the majority opinion against
the Friday Firm and then dissented when rehearing
was granted and the Court ruled in favor of the Fri-
day Firm. Register v. Oaklawn Jockey Club, Inc., 306
Ark. 318, 811 S.W.2d 315, opinion on reh’g, 306 Ark.
321, 821 S.W.2d 475 (1991).

Further, petitioner misstated several Arkansas and
United States Supreme Court decisions in support of
his assertion that the Arkansas Supreme Court was
required to recuse itself in this matter. In Johnson
v. Sturdiwant, 295 Ark. 622, 758 S.W.2d 415 (1988),
Justice John Purtle authored an opinion by the di-
vided Arkansas Supreme Court in which a $5,000,000
plaintiff's award was affirmed. The critical issue in
the underlying case was whether the driver of a log
truck involved in an accident was an independent con-
tractor so as to insulate other defendants. At the
time, Justice Purtle had a claim against one of the
insurance companies representing a defendant and
that claim related to an issue of an independent con-
tract which, as noted, was the main issue in Stur-
divant. In recognizing the need for recusal, the
Arkansas Supreme Court relied upon Aetna Life Ins.

17

Co. v. Lavoie, 106 S.Ct. 1680 (1986) and particularly
noted that in the Aetna case “‘it was suggested that
Justice Embry had written an opinion deciding his
own lawsuits.”’ In light of Aetna and Lilejeberg
v.Health Services Acquisition Corp., 486 U.S. 847
(1988), the Arkansas Supreme Court recused. Neither
Johnson v. Sturdivant or Aetna Life Ins. Co. v. Lavoie
have any precedential value for this case. Justice Holt
did not have any personal interest in the case nor
did he have a personal involvement with any of the
parties.

Petitioner also cites City of Jacksonville v. Venhaus,
302 Ark. 204, 788 S.W.2d 478 (1990) and Patterson
v. R.T., 301 Ark. 400, 784 S.W.2d 777 (1990) in sup-
port of his contention that his due process rights have
been violated. However, in Venhaus, the record clearly
reflected that the chancellor exhibited bias and had
a personal interest in the matter exhibited by order-
ing that $700,000 of taxpayers funds be given to as-
sorted charities to which she was connected. Likewise,
in Patterson v. R.T., the same chancellor exhibited
her bias when questioning witnesses on the record.
Conversely, in the instant action Justice Holt exhib-
ited no bias and, in fact, had no relationship or in-
terest with any of the parties to the litigation.

Much of petitioner’s brief in support of Petition for
Certiorari is devoted to rearguing the underlying
case.’ However, the only real issue determined by the

’ Included as a part of petitioner’s effort to reargue the case
is Appendix Ex. A to the Brief, which purports to be ‘“‘an excerpt
from the testimony of witnesses and exhibits at trial.”’ In fact,
it is a tendentious, argumentative, and selective abstract of tes-
timony that takes much out of context and actually fabricates

18

Arkansas Supreme Court was whether there was sub-
stantial evidence that First Pyramid engaged in
fraudulent concealment of petitioner’s claim. There
was and is no evidence, much less substantial evi-
dence, of fraudulent concealment. The fraudulent con-
cealment issue was argued extensively in briefs filed
before the Arkansas Supreme Court and at oral ar-
gument. Simply put, there is no evidence of an im-
propriety by the Arkansas Supreme Court and there
is no need to reargue the limitations issue.

B. The State of Arkansas Did Not Violate Petitioner’s
Right To Due Process And Tulsa Professional Col-
lection Services, Inc. v. Pope, 485 U.S. 478 (1988)
Is Inapplicable.

Petitioner suggests that the opinion of the Arkan-
sas Supreme Court is contrary to Tulsa Professional
Collection Services, Inc. v. Pope, supra. That asser-
tion, like so much of petitioner’s counsel’s argument
is misplaced. The issue in Pope was whether the in-
volvement of the Oklahoma probate court in executing
the non-claim provision of the. probate code consti-
tutes state action under the Fourteenth Amendment.
485 U.S. at 486. Nothing in the Arkansas Supreme
Court’s opinion in this case even remotely addresses
that issue. The opinion in Pope is crystal clear that
a private party may invoke a statute of limitations
without implicating due process. Jd. Therefore, the

part. See the addendum to this brief. Petitioner did not complain
about respondent’s abstract of these matters before the decision
on the merits (Cf. Rule 9(eX1)), but now he has re-abstracted
the evidence to suit his purposes, a clear violation of Rule 9(d).
Among other things, this new, partial argumentative abstract
violates the requirement that the abstract be ‘‘without empha-
sis.”’

i

EEO

19

Pope opinion and the opinion in this case of the Ar-
kansas Supreme Court of December 21, 1992, are
entirely consistent.

It should also be noted that this section of the
Petition for Writ of Certiorari reveals the inconsist-
encies in petitioner’s positions, and the desperation
of petitioner’s counsel to attempt to resurrect his mul-
timillion dollar verdict. Petitioner twists and turns the
law to suit his purpose. On the one hand, the
petitioner has repeatedly argued that the estate was
unaware of its potential claim until ‘‘8/8/88’’ because
the only person with notice was the executor, Steve
Stoltz, who had a conflict of interest with the other
beneficiaries. Therefore, petitioner argues the statute
of limitations was tolled until the estate received no-
tice independent of the executor.

At trial, however, it was revealed that a sister of
J.P. Stoltz and a brother-in-law (both of whom are
estate beneficiaries represented by petitioner) had ac-
tual notice that J.P. Stoltz had at one time named
his estate as the beneficiary of the life insurance pol-
icy. The opinion of the Arkansas Supreme Court noted
this fact and now petitioner cries foul and asserts
that the estate cannot be held accountable for knowl-
edge possessed by other beneficiaries. Petitioner, thus,
apparently concedes that notice to the executor and
the attorneys for the estate was the only notice that
could, and did, bind the estate. See e.g. Ford’s, Inc.
v. Russell Brown & Co., 299 Ark. 426, 773 S.W.2d
90 (1989); Ingram v. Luther, 244 Ark. 260, 424
S.W.2d 546 (1968); Farr v. Newman, 14 N.Y.2d 183,
199 N.E.2d 369 (N.Y. App. 1964). Since the executor,
the estate attorneys and independent beneficiaries all
received notice of the potential claim, petitioner is

20

forced to take inconsistent positions in an attempt to
have his cake and eat it too.

In summary, this Court has previously held that a
private person’s assertion of an applicable statute of
limitation does not constitute state action. Thus, there
was no due process violation and, further, notice was
proper and binding on the estate.

CONCLUSION

The petition filed in this matter, like other plead-
ings filed by petitioner, does nothing but repeat ar-
guments already made, considered and rejected.
Further, the petitioner makes the irresponsible and
scandalous assertion that the Arkansas Supreme Court
issued a fraudulent opinion based on nothing more
than an unfounded rumor that the Chief Justice al-
legedly went quail hunting and participated in other
social activities with Herschel Friday of the Friday,
Eldredge & Clark law firm. “Judges are presumed
to be impartial and the party seeking disqualification
bears a substantial burden proving otherwise.’’ Ko-
rokov v. Korokov, 33 Ark. App. 194, 197, 803 S.W.2d
948 (1991). Petitioner is light years away from meet-
ing this burden. Neither First Pyramid nor the ju-
dicial system should be held hostage to the kind of
tactic that has been the pattern in this case. It is the
duty of the Court to stand up and say, enough is
enough. Giving in to petitioner’s tactics would be like
giving in to terrorists who threaten destruction or
murder unless ransom money is paid. It only en-
courages the same kind of behavior in the future.

a

21

August 25, 1993 Respectfully submitted,

*JoHN E. Tu. III
PETER G. KUMPE
LEON HOLMES
WILLIAMS & ANDERSON
111 Center Street
Twenty-second Floor
Little Rock, AR 72201
(501) 372-0800

Attorneys for Respondent

*Counsel of Record

APPENDIX

la

APPENDIX 1
MEMORANDUM

RE: First Pyramid Policy Issued to James Patrick
Stoltz, Deceased
DATE: January 18, 1978

SITUATION: James Patrick Stoltz died December 18, 1977
while covered by four policies issued by First Pyramid.
Two of these policies were connected with the Flex 70
Trust totalling $2,000,000.

Jim Duran requested that we review the policies prior to
payment, to make sure proper payment is being made. In
doing so, certain discrepancies were noted concerning the
$1,950,000 term policy. The $50,000 whole life policy may
have similar problems and should be reviewed. The purpose
of this Memorandum is to highlight the sequence of events
concerning the problem and the possible positions and
courses of action which may be available.

I. Sequence of Events:

1. $1,950,000 Policy was issued to “‘The Insured” dated
February 26, 1976 and named “The Estate of the Insured”
as beneficiary.

(Line 29 in the application where “owner” designated
is garbled) (Dated 12/18/75) (Applicant shown as Flex 70
Trust however).

2. Transfer of Ownership and Beneficiary Agreement
signed by the Insured as ‘“‘Policyholder” on May 1, 1976,
naming James Stephen Stoltz (son) as owner and primary
beneficiary.

The Agreement was filed and record made by Company
on March 22, 1976 Title page on policy changed to strike
“Insured”’ and show James Stephen Stoltz, son, as owner,

2a

but beneficiary left as “The Estate of the Insured” on
face of policy. File copy has notation that beneficiary was
changed by rider and the same may have been inserted
in the policy.

3. Ron Mason memo to Paul Dixon on August 9, 1976
that changes in ownership are ineffective without Trustee’s
signature. Requested new change forms be completed if
Mr. Stoltz still wants change, or return of policy for re-
moval of previous change of ownership otherwise. (Bene-
ficiary not referred to)

4. Worksheet prepared by A. Gray on 8/18/76 directing
that new policy be typed showing ownership as “Flex 79
Trustee” and directing removal of 3/1/76 ownership trans-
fer from policy. No written direction or consent by insured
or son present found in file. Acknowledged 8/31/76.

5. New (substitute) policy issued 8/76 showing as owner
“The Insured and Flex 70 Trust” dated February 26, 1976
and naming as beneficiary ‘The Estate of the Insured.”
Any prior beneficiary rider which may have been included
was apparently removed.

6. Immediately prior to death, J. Moses responding to
inquiry by agent stated that son is owner and beneficiary
which agent responds is proper. Agent requested copies
of March, 1976 ownership and beneficiary changes, which
are supplied.

7. December, 1976, Mr. Stoltz dies.

8. December 20, 1976, Jim Duran notified David Kane
that son is beneficiary and requested claim for completion
and return of policy which is done.

II. Analysis:
The objective in determining how to properly make pay-
ment at this time is to prevent, if possible, exposure to

suit by another party at a later date claiming payment
should properly have been made to such party.

i errrrerereeeereeneemnnaaaniieiiiiiiiiiial

3a

INTENT OF PARTIES: All indications at this time are that
the intent of the parties was that the son be beneficiary
of the policy.

Judy Moses understands the purpose of the August, 1976
change was to name the son as owner and beneficiary ab
initio to avoid the possibility of the policy being pulled into
the insured’s estate and possibly avoid its seizure by taxing
authorities for income taxes allegedly due. She believes it
was erroneous to name the insured or his estate in any
fashion on the policy page prepared in August dated Feb-
ruary 26 1976.

Elizabeth Oswald understands the purpose of the August,
1976 change was to show how the policy should have orig-
inally been issued pursuant to the application (Insured and
Flex 70 Trust as owner and Estate as beneficiary) and
that the March, 1976 ownership and beneficiary changes
were intended to remain in force, (despite the fact that
this is inconsistent with the Mason memo requiring the
Flex 70 Trustee’s signature for this to occur).

She believes it was erroneous not to include the ownership
and beneficiary changes as riders at that time.

The agent in December, 1976 conversation with Judy Moses
(prior to Insured’s death) expressed satisfaction with her
statement that the son was owner and beneficiary at that
time stating this was the intent of Mr. Stoltz.

SON AS BENEFICIARY: The designation of the insured’s
son as owner and beneficiary would seem to be effective
under the following circumstances.

1. If the fact that the policy was originally issued in-
consistent with the application does not control over the
actual policy specifications; if the insured had the power
to change ownership and beneficiary in March, 1976 and
did so, and if the August, 1976 change is of no effect
since not authorized or consented to by the owner of re-
cord when accomplished. Mason’s memo would have been

4a

incorrect when written under this reasoning. The fact the
policy when actually reissued did not reflect these changes
must also be considered as having no effect.

2. The second line of reasoning leading to this result
would follow the reasoning of #1 except that the August,
1976 changes dated February, 1976 were permissible be-
cause of consent or otherwise effective ab initio, and the
March, 1976 ownership and beneficiary changes are effec-
tive because they follow the effective date of the changes.
This reasoning must disregard the Mason memo requiring
Trustee signature, by reasoning that some type of consent
is present, as well as the fact the changes were not in-
cluded as riders in the policy. (Oswald understanding)

3. As a third alternative, consider #2 except that the
policy as originally issued was inconsistent with the ap-
plication and the application controls.

4. A fourth line of reasoning would be that the August
change should have named on the policy specification page
the son as owner and beneficiary, removing any need for
new beneficiary and ownership change forms and all par-
ties were consenting to this despite fact no written record
was present. This also assumes this clerical correction may
be made at this time.

There are certain other variations but these are the
principal themes. It should be noted that none seems fully
satisfactory from a contract law standpoint since certain
terms of the contract must be ignored, proper signatures
were not obtained, or required by the Company, certain
changes must be allowed “‘ab initio” which is of question-
able validity, especially in the absence of a clear intent,
etc.

ESTATE AS BENEFICIARY: Circumstances which would
indicate that the Estate of the insured is the proper ben-
eficiary are as follows:

rea ieaenienianainetieaeiaaeinecennee el

5a

(a) If the signature of the trustee was required |
at any point and was not obtained. (Several var-
iations)

(b) If the final policy page prepared as the most
recent statement of Company ownership and ben-
eficiary records,to which the insured could have
objected if he desired to, controls.

III. Alternatives:

The principal dangers of each course of action involves
exposure to (a) contract liability to another party after
payment to a first party had been made and (b) tort lia-
bility for negligence or misrepresentation to a person other
than the person to whom payment was made. Various
procedures which could be followed to possibly cut off such
actions include use of interpleader or formation actions to
clarify the contract, obtaining indemnity or waiver agree-
ments to cover possible liability, etc.

Contract actions could conceivably arise regardless of
whom payment was made to. These could possibly be suc-
cessful if the court construed the situation contrary to the
Company’s interpretation.

A similar situation is present with tort actions if a court
found that the intent of Mr. Stoltz was to make payment
one way and, through error by the Company, or perhaps
its agent, this intent was not carried out. The information
we have at this point is that the intent was to benefit the
son. The possibility that someone else could come forward
later with contrary evidence cannot be ignored.

The estate and the son do have adverse interests in this
case. Though the son is executor of Mr. Stoltz’s will, the
will leaves the residue of the estate to First National Bank
in Little Rock as trustee of a trust for about fifteen dif-
ferent parties. If anyone had the understanding these pol-
icy funds would pass to such trust, particularly if no other

rn

6a

significant assets pass to the trust, further inquiry may
be forthcoming from the Trustee or beneficiaries of the
trust.

The advantage of interpleader or reformation actions is
that contract actions by other parties should be cut off.
However, this may have no effect om negligence actions
and would alert all parties te the probiem. John Peace is
preparing a memorandum on this aspect of the case.

If payment was made to the son, an indemnity agreement
from him could reduce exposure. The indemnity agreement
would be broadly drawn. Exposure to a negligence suit by
the estate if the intent of the insured was found to be to
leave the proceeds of the policy to the estate and trust
established in the will would still exist.

I.R.S. PROBLEM: We do not know whether more taxes
would be due if proceeds are paid to the beneficiary or
to the estate. It is possible, for example, that the I.R.S.
might take the position the proceeds were payable to the
estate if more taxes would be due than if paid to the son.
We mention this only to raise the question as an item for
consideration.

REINSURER: Since a substantial amount of the proceeds
are from reinsurance, the question arises should the sit-
uation be discussed with the reinsurer. We mention this
aspect only to make sure all important items are consid-
ered.

$50,000 POLICY: A review of the $50,000 Flex 79 whole
life policy originally issued in the same manner as the
$1,950,000 policy indicates that no ownership change form
was executed regarding it in March, 1976, a beneficiary
change only being signed, naming the son as beneficiary.
When the August 1976 changes were made, instead of a
new policy page being typed the phrase ‘‘and Flex 79
Trust” was added as “The Insured’’ in the ownership
blank, but no change was noted as to the beneficiary des-

Ta

ignation of ‘‘The Estate of the Insured.” Any beneficiary
change rider which may have been present was apparently
removed at that time.

On this basis, the analysis of the situation on this policy
would be the same as for the $1,950,000 policy.

SUMMARY: There is a substantial risk whether payment
is made to the son or to the estate.

(a) There appears less risk if payment is made to the
son since those involved seem sure he was the intended
beneficiary.

(b) There appears more risk if payment is made to the
estate because of the insured’s apparent intent to benefit
the son.

(c) In either event, exposure could be reduced by re-
quiring an indemnity agreement from either the son or
the estate.

(d) An interpleader action is probably the safest course.
However, the Company could be exposed to a suit from
the loser, i.e. the son or the estate. Therefore, this alter-
native is not a complete solution either.

8a

APPENDIX 2

January 12, 1993

Charles Phillip Boyd, Jr.
Davidson Law Firm, Ltd.
P. 0. Box 1300

Little Rock, AR 72203

Dear Charlie;

I am writing to inform you of some very upsetting rumors
I have heard in the last couple of weeks.

I was told that Chief Justice Holt has a very close personal
relationship with members of the Friday Law Firm. I heard
from a reliable source that he has been quail hunting in
Mayflower on Mr. Friday’s land and went on a hunting
excursion in Texas on Mr. Friday’s plane. Charlie, if these
rumors are true I would think this relationship could pos-
sibly affect Judge Holt’s opinion in our case. I feel this
is terribly wrong and unethical.

Charlie, as you well know I have felt very strong about
the way the Friday Firm handled my dad’s estate. I still
feel they played a major role and are at the root of many
of our problems today. Judge Holt, I would think, would
be well aware of the Friday Firm’s possible exposure in
this case if he read the transcript. Also you may recall
during your oral argument in front of the Supreme Court
that one of the judges pointed out the Friday Firm’s pos-
sible exposure.

Charlie, I’m not a lawyer but I would think that if these
rumors are true Judge Holt should have stepped down
from this case just like Judge Dudley. At the very least,
ethically he should have disclosed this conflict.

On behalf of myself and as special administrator for the
estate I want you to investigate these rumors immediately

iaiatiniieteanaiinieaialininirniea anil

9a

and see if there is any validity to them and notify me of
my legal options.

Sincerely,
/s/ Mike
Mike Stoltz

10a

APPENDIX 3
IN THE ARKANSAS SUPREME COURT

NO. 92-4

FIRST PYRAMID LIFE INSURANCE COMPANY OF
AMERICA; USABLE INSURANCE COMPANY
APPELLANTS
VS.

J. MICHAEL STOLTZ, As Special Administrator of the
Estate of J.P. Stoltz, Deceased
APPELLEE

PETITION AND BRIEF FOR REHEARING

This Court’s Opinion contradicts and/or ignores the
sworn testimony of the witnesses who testified, under oath,
before a jury, in these proceedings, the documents intro-
duced into evidence, and the law read to the jury by way
of Instructions without objection. The Court’s Opinion con-
travenes universal law by holding that knowledge (assum-
ing arguendo that same exists here) obtained by a distant
heir, and a potential stranger to the Estate, somehow
constitutes notice to the Estate, and its minor children,
of their rights and obligations, thereby violating the Four-
teenth Amendment to the U.S. Constitution. The Appel-
lee’s counsel certifies his belief that this Petition has merit,
and is not filed for the purpose of delay.

I
FACTS

First Pyramid Life Insurance Company (FPL) wrote a
policy of life insurance totalling $2 Million on the life of
J.P. Stoltz. The contractually designated beneficiary was

lla

his Estate. (R.3690) There was conflicting evidence re-
garding whether the deceased insured wanted his eldest
son, or his Estate, to be the beneficiary, but as a matter
of contract, on paper, in black and white, the Estate was
the designated beneficiary.

The Defendant insurance company saw it had a problem
when the insured died due to the manner in which it had
handled its paper work. It called in its attorneys for advice
on what it should do.

Both of its attorneys recognized the beneficiary dis-
crepancy, and advised it that interpleading the money was
the safest course of action to take, but that said action
would “alert’’ the losing party to its potential claim, and
could subject, or expose, the insurance company to a law-
suit from the loser. (R.4540-4) This ‘“‘discrepancy in the
proper beneficiary’’ was not, at any time, passed on to
the Estate by the insurance company. (R.3949, 3959-60)

On the same date it received these Memos from its
attorneys, the insurance company allegedly had a meeting,
wherein the alternative of interpleading the money, and
its concurrent exposure to a lawsuit by the loser, was
discussed. The insurance company decided to pay the son,
because he was the only one who had made a claim for the
proceeds, and was the only one who thought he had a claim
to the proceeds. (R.4354-55) The Estate was never told it
had a potential claim to the proceeds. The insurance com-
pany decided that, if it was subject to being sued by the
loser if it alerted all parties to their potential claim, it
would be better off to pay the son, who knew he had a
claim, and had made a claim, and take its chances that
the other entity with a claim to the proceeds, i.e. the
Estate, would never find out about same.

The Estate had numerous debts, and was involved in a
procedural morass that could last decades based on the
Will of the deceased. First National Bank was the Estate’s
largest creditor, and was also the Trustee of the Trust to

i

12a

which these proceeds would have passed had the Estate
been paid. Paying the money to the son, in addition to
the aforementioned motivational factor, would potentially
keep the money out of the Estate, and, if the Bank re-
quired Steve Stoltz to sign a personal guarantee insuring
a $1.62 Million debt, for which Polyvend stock was pledged,
it could assure itself of being paid. Steve Stoltz would see
this debt was paid off, because the alternative was selling
a multimillion dollar company, Polyvend, which was his if
he could run it for ten (10) years. If he sold the company
within a ten (10) year period of time from his Father’s
death, he would have to split the excess surplus with his
Brothers and Sisters. Furthermore, Herbert Thomas, the
owner of FPL and the largest stockholder of the Bank,
would have a way of ensuring that the Bank’s debt was
paid.

The Friday Law Firm represented J.P. Stoltz while alive,
Steve Stoltz as Executor of the Estate, Steve Stoltz in-
dividually, First National Bank as the largest creditor of
the Estate, First National Bank as the Trustee to which
these proceeds would: have flowed had the Estate been
paid, the Defendant insurance company itself, Polyvend
Corporation, and the insurance agency which sold the pol-
icy to the deceased, at all pertinent times. (R.3891/3907)
Herbert Thomas, who owned the insurance company, was
the largest stockholder of the Bank. Buddy Sutton, one
of the senior partners of the Friday Law Firm, was on
the Board of Directors of the insurance company. Herschel
Friday was on the Board of the Bank. (R.3947-48) In ad-
dition to the aforementioned reasons, theinsurance com-
pany, and the Friday Firm, would rather Steve Stoltz be
paid than the Estate because it is much easier to control
and manipulate one twenty-five (25) year old man to their
mutual advantage than it is an Estate comprised of nu-
merous individuals and entities (both local and national),
Banks, Trusts, Probate proceedings, litigation, etc. Within
six (6) days after paying Steve Stoltz the proceeds, he

aerial

13a

bought $3,000,000 worth of insurance from FPL, and ar-
ranged the purchase of large FPL policies for two of the
employees of Polyvend, the corporation he took over from
his Father. (R.4413-15, 4804-05)

The IRS included the $2 Million worth of insurance pro-
ceeds in the deceased’s Estate. The Estate paid the tax
on money it did not receive. The Friday Law Firm sued
the IRS for a refund on behalf of the Estate. During this
period of time, if not before, the Friday Firm saw FPL’s
files. They tendered to the IRS certain FPL files regarding
these policies, but whited out certain portions. The IRS
ultimately settled the case for almost what it claimed in
the first place, and told the Estate, through the Friday
Firm, that it had whited out certain portions of these files,
and that the Estate never did prove that it was not in
fact the proper beneficiaries of these policies. The Friday
Firm was legal counsel for the insurance company also at
this time, and had members on its board. These actions
were done to protect First Pyramid as much as to benefit
the Estate.

There is conflicting evidence regarding whether or not
Steve Stoltz was ever told of the Estate’s potential claim
to these proceeds. A letter from James Saxton dated June
7, 1983 tells him the Estate has a potential claim, but also
tells Steve Stoltz, as Executor and individually, that he
has not reviewed the entire insurance company file. James
Saxton and Steve Stoltz both testified at trial that neither
Steve Stoltz, nor James Saxton, ever apprised the Estate
that it had a potential claim because James Saxton was
of the opinion Steve Stoltz was the proper beneficiary.
(R.4799) Unequivocably, no one else in the Estate was ever
told by FPL it had a potential claim to these proceeds.
(Regardless, FPL did not submit a single limitations In-
struction, never told the jury it had a normal five (5) year
statute of limitations, nor that notice to an attorney is,
absent a conflict, notice to the client, thus bringing about
a “‘conflict’’ instruction from the Plaintiff. So, what dif-

14a

ference should all this make? This Court addresses same
in its Opinion so it is cursorily discussed here.)

No distributions of any kind have been made in this
Estate, and said Estate is subject to numerous lawsuits
filed in the Chancery and Probate Courts of Faulkner
County. (R.4603) The First National Bank of Little Rock
would have pursued this matter on behalf of the Estate
had it been told the Estate had any potential claim to
these proceeds. (R.3950-53) The attorneys for FPL advised
it of said Trustee’s probable actions if it were apprised of
the Estate’s claim, and yet neglected to apprise the Estate
of same. Furthermore, FPL was apprised of the conflicts
of interest between the son receiving this money individ-
ually, and serving as Executor of the Estate, prior to
paying the money. (R.4548-49)The son was required to sign
an Indemnity Agreement when he received these proceeds.
The only time FPL had an individual sign an Indemnity
Agreement was when it was afraid someone else had a
claim to the policy proceeds, and wanted to reduce its
exposure. (R.4354-55, 4544-45)

Sometime around September of 1987, several members
of the Estate began to question the way the Estate was
being managed by the Friday Law Firm and Steve, whom
said firm was “advising” individually. They secured the
services of new attorneys to assist them in investigating
the Estate, and were apprised, for the first time, on Au-
gust 8, 1988, that the Estate had a potential claim to
these proceeds, or that Steve Stoltz had been paid instead
of the Estate. (R.3864-67) They were in shock, and felt
like they had been lied to. (R.4593-96) This is the first
knowledge the majority of the members of the Estate had
that the Estate was ever the beneficiary of these policies.
An elderly Aunt and Uncle testified they had been told
that the Estate was the beneficiary prior to the insured’s
death. However, they had never been told the Estate had
not been paid, and, despite reasonable diligence and vilig-
ence, were not apprised of same prior to August 8, 1988.

15a

(R.4844//859) This Aunt and Uncle thought the Friday Firm
was looking out for their best interest, and, being as no
property had passed through the Estate to the heirs and
beneficiaries, had no reason to suspect that they would
not receive whatever money they had coming, along with
the other heirs and beneficiaries, at the time the Estate’s
property was distributed.

The Last Will and Testament of the deceased indicates
that the nine-(9) Brothers and Sisters, the aforementioned
Aunt and Uncle, Hendrix College, and St. Joseph Catholic
Church were to receive the income from the property of
the Residuary Trust, i.e. these insurance proceeds, as long
as the heirs and beneficiaries lived. Upon the death of the
last heir/beneficiary, the corpus of the Trust was to pass
to St. Joseph and Hendrix College. Thus, the elderly Aunt
and Uncle were only supposed to receive a pro rata split,
along with eleven (11) or so other individuals/ entities,
during their life time. (D.’s Exh. 149) The jury inferred,
as the law allows them to do, and as anyone using common
sense would, that the income from the life insurance pol-
icies was not that big a deal. Being lied to was.

A lawsuit was filed on April 20, 1989. A Pulaski County
jury found the Estate was the contractually designated
beneficiary, and rendered a verdict on same. The record
indicates the Trial Court complimented the jury throughout
the trial on its attentiveness. The Supreme Court has the
obligation to give deference to this fact.

Regardless of how this Court views the evidence, no one
can state that the foregoing dissertation of facts is not a
reasonable conclusion by a reasonable jury, and supported
by substantial evidence. This Court may not want this to
be the result, may not want the jury to have found this
way, may not think the decision was right (although no
one who sat through the trial and viewed same in an
impartial manner could possibly hold otherwise), but,
nevertheless, unless it totally disregards the sworn testi-

16a

mony of the warm bodies who took the witness stand in
front of the jury,and the documents from FPL’s own file,
it must uphold this verdict. To hold otherwise, would make
our jury system a sham. Why not just submit Affidavits
to the Supreme Court and allow it to decide the facts, the
law, and the decision? That is strong language from the
Appellee. But, he has the transcribed record in his pos-
session to back him up, and will stand, flat footed and
entrenched, upon same. (See Abstract of testimony at-
tached to Brief in Support of Motion for Vacatur, To Dis-
qualify And, In The Alternative, To Appoint A Special
Master, And Motion For Extension Of Time To File
Petition For Rehearing, filed January 18, 1993.)

Il
APPLICABLE LAW

This Court knows the law when viewing a jury verdict
on Appeal. If there is any substantial evidence to support
the jury verdict, same is not disturbed. The evidence is
viewed in the light most favorable to the party in whose
favor said verdict rests. This Court does not weigh the
facts for the purpose of determining in whose favor the
preponderance of the evidence lies. Kratzkev Nestle v.
Beich, Inc., 307 Ark. 158, 817 S.W.2d 889 (1991); Missouri
Pacific Railroad Co. v. Clark, 246 Ark. 824, 440 S.W.2d
198 (1969). The reviewing Court cannot disturb the jury’s
conclusion as to substantiality of the evidence unless there
is no reasonable probability in favor of the Appellee’s ver-
sion, and then only after giving legitimate effect to all
presumptions in favor of the jury’s findings. The jury is
the sole judge of the credibility of the witnesses. Beard
v. Coggis, 249 Ark. 518, 459 S.W.2d 791 (1970); Bradbury
v. Gower, 247 Ark. 704, 447 S.W.2d 247 (1969).

Fraud, or fraudulent concealment that will toll the stat-
ute of limitations, is a question of fact that can be inferred
from the evidence, just as any other fact. Moore Ford Co.

a

17a

v. Smith, 270 Ark 340, 604 S.W.2d 943 (1980). Court’s
Instruction No. and 9. (R. 4875/4878) The question of
fraudulent concealment, and the concurrent tolling of the
statute of limitations, is a fact question judicially recog-
nized as such by this Court for decades. Crossett Health
Center v. Crowell, 221 Ark. 874, 256 S.W.2d 548 (1983);
Schenebeck v. Sterling Drug Co., Inc., 423 F.2d 989 (8th
Cir. 1970); Mulligan v. Lederle Laboratories, 786 F.2d 859
(8th Cir. 1986); Robinson v. White, 633 F.Supp. 954 (W.D.
Ark. 1986).

For reasons that will be gone into in greater detail later,
the Appellee is convinced no one on this Court carefully
read the entire record of these proceedings. In fact, the
attorney for the Appellee has been told by a member of
the Court that this Court generally does not read the
record itself because of the time constraints involved, and
because it is not going to overturn questions of fact unless
same are absolutely, unequivocably, unargumentatively un-
supported. The reason for same is that this Court cannot
glean the demeanor of the witnesses, their facial expres-
sion, their tone of voice, etc. from a cold transcript. The
cold hard fact is that there is no conceivable way the six
(6) members of this Court assigned to hear this matter,
and probably not the Chief Justice himself, had time to
read - one time - the entire transcript. Same is probably
not necessary if an issue of law is to be decided, and that
is what this Court is supposed to do. But, it is inconceiv-
able this Court can properly overturn a question of fact
when it was not present in the Courtroom along with the
Trial Judge, live witnesses, a jury, and numerous other
individuals. Furthermore, how can this Court, in discharg-
ing its obligations to the people of the State of Arkansas,
overturn a question of fact when it does not even read
the transcript? A reading of the Abstract, regardless of
how well it,s done, is simply insufficient.

The undersigned knows that one of the three volumes
of testimony from witnesses, including witnesses whose

18a

testimony is taken out of context by this Court, was ac-
tually misplaced. The Appellee wonders when and where
it was misplaced, and how it was found. Obviously, no one
can read a transcript that cannot be located. The Court
does follow the “inferences” advocated by the Appellant
in its Opinion. There was ample other testimony contained
in this volume to counter any such inference, were the
testimony from all witnesses read, and all inferences from
said testimony read in the light most favorable to the
Appellee.

This Court is an Appellate and is supposed to review
and decide issues of law. What is the issue of law advanced
on Appeal that merits a reversal of this jury’s verdict?
The verdict is sound unless this Court chooses to overturn
a question of fact supported by ample evidence, or chooses
to simply state, in a manner that is clearly erroneous, that
“no” such evidence exists. The record indicates the truth
is to the contrary. (See also Instructions Nos. 12 and 14,
where the jury had to find fraud and conduct warranting
punitive damages because same were awarded.) (R.4878-
80) Instruction No. 8 was given to the jury without ob-
jection. (R. 4877-78) In fact, the last sentence was added
to same by defense counsel himself! This Instruction makes
fraud, fraudulent concealment, and a concurrent tolling of
the statute of limitations, a factual issue. With no objection
to the presentation of this Instruction to the jury, the
jury’s finding becomes the “law of the case.” The jury
had to find the Estate was the beneficiary, to find for the
Plaintiff in the first place. See also Instruction No. 12.
(R.4878) Hence the insurance company had the affirmative
obligation to speak, and by its silence is guilty of fraud
and the tolling of the statute of limitations. This Court is
substituting its view of the evidence to support the decision
reached in its Opinion, in the face of compelling legal and
factual precedent that dictates otherwise. Same is im-

proper. Metropolitan Life Insurance Co. v. Williams, 197
Ark. 883, 125 S.W.2d 441 (1935).

19a

This Court quotes the Trial Court’s “Findings of Fact’
on pg. 7 of its Opinion, and states that to prove fraud,
the Plaintiff must show:

Overt acts caused the legal right to be hidden ... or
there existed a specific legal relationship between the
parties that obligated an overt disclosure .. .,

and agreed with said analysis. The aforementioned Jury
Instruction makes this a closed issue. If the Estate was
the beneficiary as the Defendant itself told the jury, the
insurance company had the affirmative obligation to seek
out the Estate, notify the skilled fiduciaries and Trustees
at First National Bank, interplead the money to alert the
Estate and the attorneys for these minor children, notify
the Probate Court of Faulkner County that said proceeds
should be payable to the Estate, ... Doing nothing is
fraud. It cannot sit back and wait on an Aunt and Uncle
to file a lawsuit. It has an affirmative obligation to speak.
We don’t have to worry about the “legal relationships
between the parties.’”’ Camp v. First Federal Savings and
Loan, 12 Ark. App. 156, 71 S.W.2d 213 (1984).

These facts, coupled with the Instructions, coupled with
the fact that the insurance company submitted no Instruc-
tion, whatsoever, even telling the jury it had a statute of
limitations defense, effectively prevents the Defendant
from raising this issue on Appeal. When a party requests,
or acquiesces in, an Instruction submitting particular issues
to the jury, that party is not entitled to thereafter com-
plain about the jury,s determination of such an issue.
Farmers Coop Assoc. v. Garrison, 248 Ark. 948, 454
S.W.2d 644 (1970); Willis v. Elledge, 242 Ark. 305, 413
S.W.2d 636 (1967). See also Rule 51 of the Arkansas Rules
of Civil Procedure. If a party does not proffer a Jury
Instruction embodying and articulating his theory and all
defenses, the failure to do so constitutes a waiver. Dodson
Creek. Inc. v. Fred Walter Realty Co., 2 Ark. App. 128,
620 S.W.2d 947, 952 (1981). The failure to object to an

20a

Instruction bars a party from raising the applicability of
the doctrine espoused in same on Appeal. Northland Alu-
minum Products, Inc. v. Creative Cookware. Inc., 678 F.2d
746 (1982); Rowe International, Inc. v. J.B. Enterprises’
Inc., 647 F.2d 830 (8th Cir. 1991). It doesn’t matter that
the party moved for a Directed Verdict, or that it wants
to hang its hat on the issue being a matter of law. It has
to object to the Instruction being given to the jury, or
said objection is waived. Absent same, the Jury Instruc-
tion, the jury’s finding, is the law of the case.

(b) NOTICE TO RITA FIELDS AND JACK SMITH

This Court mistakenly states that even if fraud is pres-
ent, same is somehow cured because two (2) elderly in-
dividuals, one an heir of the Estate, and one a possible
heir, who may have gotten l/Ilth of the income off of the
interest from these proceeds during their limited lifetime,
had knowledge the Estate was the beneficiary of these life
insurance policies, and saw financial statements indicating
same, prior to the insured’s death.

In the first place, it has been the rule of law in Arkansas
for more than a century that any claim on behalf of the
Estate must be brought by the Executor of Administrator
of the Estate. Whelan v. Edwards, 31 Ark. 723 (1877).
The Defendant itself moved for Summary Judgment be-
cause the heirs of the Estate were attempting to bring a
cause of action to recover these insurance proceeds instead
of the Executor. J. Michael Stoltz had to be appointed
Special Executor to proceed forward in this lawsuit. Isn’t
there a clique, somewhere that states what’s good for the
goose is good for the gander?

The Estate is an entity in and of itself. Only the Ex-
ecutor, or one appointed Special Executor, can receive
“Notice” that can bind the Estate. A.C.A. # 28-1-112. The
United States Supreme Court has held that any creditor
of the Estate must be given specific and actual notice if

2la

their identity is ‘reasonably ascertainable,” and that to
take one,s property without providing same violates the
due process clause of the Fourteenth Amendment of the
United States Constitution. Tulsa Professional Collection
Services, Inc. v. Polk, 485 U.S. 478, 108 S.Ct. 1340, 99
L.Ed. 2d 565 (1988); citing Mellane v. Central Hanover
Bank & Trust Co., 339 U.S. 306, 70 Sup.Ct. 652, 94 L.Ed.
865 (1950) and Menonite Board of Missouri v. Adams, 462
U.S. 791, 103 Sup.Ct. 2706, 77 L.Ed.2d 180 (1983).

Taking this one step further, and assuming for purposes
of argument that the Aunt and Uncle had notice, which
is debatable, and that the Uncle by marriage even had a
claim, which is unlikely, no one, not this Court’s law clerks
nor opposing counsel, will find a case that holds that notice
to an elderly Aunt and Uncle under these circumstances
will bind the other children, especially minor children, that
make up the Estate. They testified in rebuttal only to
counter the Defendant’s contention that the deceased's in-
tention was to designate the son as beneficiary and alleged
comments by him verifying same prior to death. This evi-
dence was not even presented, as the Opinion would read,
in the Defendant’s case in chief. Perhaps the Aunt and
Uncle cannot receive their share of the income, but that
issue should be determined in Probate Court after a thor-
ough trial.

This Court has mistakenly cited an untenable basis for
erasing a potential $10 Million Judgment, without citing
any case law, precedent, statutory authority, etc. The lead-
ing treatise on Estates, Page on Wills, 2639, 2642, cites
Arkansas cases and states the following when dealing with
probate law and an Estate:

Notice must be served upon the persons who are spec-
ified in the statute which regulate notice. The con-
tents of the citation or notice must conform to the
requirements of the statute. Without express author-
ity, the entrance of appearance by one heir does not

22a

enter an appearance for another heir. Jd., pgs. 87,
88, and 92.

The Arkansas case of Sowell v. Housman, 207 Ark. 929,
183 S.W.2d 511 (1944) is cited as being in conformance
with the aforementioned, horn book rules of law. See also
Matter of Lacy’s Estate, 126 Cal. Rptr 432, 54 Cal.App.
3rd 172 (1975) and Hesthagen v. Harby, 78 Wash.2d 934,
481 P.2d 438 (1971). These cases are not exactly on point,
but the analogy is clear. The Estate is an entity that can
only be bound by notice, in the statutorily described man-
ner, to the Executor or Administrator.

Furthermore, the Defendant offered no proof on the age
of these minor children at all pertinent times, much less
whether they were incapacitated or incompetent for some
other reason. It had the burden of proof on the issue of
limitations; said burden does not shift to the Plaintiff be-
cause it is obvious from the record we are dealing with
minor children. Notice to a minor, by statute, must go
through a Guardian. See A.C.A. § 28-65-101, et seq.

Finally, Lewis Mathis, the attorney for the Friday Firm,
berated and ridiculed the balance sheets in question in his
testimony as bogus, and said that everyone knew the de-
ceased put what he thought his bankers wanted to see on
said documents.

In sum and substance, whether or not Rita Fields and
Jack Smith used due diligence is a question of fact, ju-
dicially recognized as such, for the jury. This Court’s fall
back position is simply untenable.

This Court’s Opinion is directly contrary to long estab-
lished rules of law pertaining to insurance companies and
their obligations to those they deal with. For that reason,
same must be gone into in this pleading.

23a

Ill
GENERAL RULES OF LAW

The law is clear, in every jurisdiction, that in every
contract, including a policy of insurance, there is an im-
plied covenant of good faith and fair dealing that neither
party will do anything which will injure the right of the
other party to receive the benefits of the agreement. Mer-
ritt v. J.A. Stafford Co., 440 P.2d 927 (1968); Couch on
Insurance 2d, § 15:25. Insurance policies are contracts of
the utmost good faith and must be administered and per-
formed as such by the insurer. A relationship of trust and
confidence between the insurer and insured, as distin-
guished from the existence of a formal trust, is recognized
by Courts and is used by Courts to prohibit the insurance
company from practicing fraud or a misrepresentation. Jd.
at § 23:12.

The law is equally clear, and recognized in all jurisdic-
tions, that where fraud is involved the time period within
which a beneficiary must sue commences to run only from
the date of the discovery of the fraud, or when “‘the fraud’’
might with reasonable diligence have been discovered, Jd.
at 75:107. If the person injured:

remains ignorant for a time, the applicable stat-
ute of limitations commences to run only from
discovery or the date when, with reasonable dil-
igence, there ought to have been a discovery of
the facts constituting the fraud... Id.

As a matter of simple contract law, the Defendant has
failed to discharge its contractual obligations. When the
insurer makes payment of the proceeds of insurance to
the rightful beneficiary, such payment is a discharge of
the liability of the insurer. Jd., 27:176. However,

the payment of the proceeds of insurance to the
wrong person by an insurer does not relieve it
of its liability to the proper beneficiary, whether

24a

the payment is improper because made to a sub-
stituted beneficiary where there was no legally
effective change of beneficiary, or because made
to the original beneficiary where there had been
an effective change of beneficiary. Jd. at § 27:177.

If the insurer knows of potential adverse claims to the
insurance proceeds, and chooses to pay any one of the
claimants, it acts under the risk that the recipient selected
by it is the one who is lawfully entitled thereto. Jd. at
§ 27:178. The rightful beneficiary can sue the wrongful
recipient, but this does not relieve the insurer of its lia-
bility to the correct beneficiary. Jd. at § 27:179. Appleman
on Insurance, 1098, echoes these principles and cites the
Arkansas Supreme Court case of Sovereign Camp. Wood-
men of the World v. Israel, 117 Ark. 121, 173 S.W.2d 855
(1915) in support of same.

If the insured does not know of the existence of the
insurance contract, or know that he is a named beneficiary
under same, he will not be barred by limitations for failing
to pursue a claim within the standard statutory time frame.
Couch on Insurance 2d. § 75:175. Thompson v. Equitable
Life Assurance Society, 298 A.2d 422 (1974).

The fact that fraud and fraudulent concealment will toll
the applicable statute of limitations on a beneficiary bring-
ing a cause of action on their life insurance policy is spelled
out in greater detail at § 75:210.

Fraud of an insured tolls the limitation on a right of
action whether statutory or contractual, and the lim-
itation becomes effective only from discovery or from
the date when, with reasonable diligence, there ought
to have been discovery. (emphasis added) citing Fire-
men’s Insurance Co. v. Jones, 245 Ark 179, 431
S.W.2d 728 (1968).

If by any act of concealment or deceit the wrongdoer
hides from the innocent party the facts which would

25a

put him upon inquiry, the contractual limitation or
statute does not begin to run.

Fraudulent concealment constitutes an implied excep-
tion to the statute of limitations, and a party who
wrongfully conceals material facts, and thereby pre-
vents a discovery of his wrong and the fact that a
cause of action has accrued against him, is not allowed
to take advantage of his own wrong by pleading the
statute, the purpose of which is to prevent wrong and
fraud.

Perhaps the Arkansas Supreme Court case of Metro-
politan Life Insurance Co. v. Williams, 197 Ark. 883, 125
S.W.2d 441 (1935) provides us with the best synopsis of
Arkansas law in regard to deciding the issues at hand.
The fact situation of Williams is extremely complicated
and convoluted, but suffice it to say that in September of
1923 an insured under a life insurance policy disappeared.
The Plaintiff and beneficiaries in Williams did not file her
lawsuit until September 28, 1931. The insurance company
pled limitations as a complete bar, and the Plaintiff alleged
fraud and fraudulent concealment against the insurance
company to defeat same. The Arkansas Supreme Court
stated;

It is a general rule that where one has deceived an-
other or where, through active wrong or NEGLI-
GENCE, misleads another and causes him not to file
suit, the statute is tolled or suspended until it is dis-
covered that the representations were false. If a
Defendant intentionally or NEGLIGENTLY misleads a
Plaintiff by his representations and causes him to de-
lay until the statutory bar has fallen, the Defendant
will be estopped from pleading the statute of limita-
tions. (emphasis added) Jd. at 448.

Cases too numerous to cite stand for the proposition
that an insurance policy is governed by contract law. The

vd

a

“i r

26a

Court of Appeals in Rice v. McKinley, 267 Ark. 659, 590
S.W.2d 305 (1979) provides us with further insight on ex-
ceptions to a strict enforcement of a statute of limitations
to bar a Plaintiff,s Complaint. In Rice, a contract was
entered into between the parties in February of 1968. A
suit was filed by the Plaintiff on January 28, 1976, and
the Defendant raised the statute of limitations and laches
as a defense. The Court of Appeals held:

The error of Appellant’s position is that the period
of limitations runs from the point at which the cause
of action accrues rather from the date of the agree-
ment...

Where the parties have entered into an agreement
which requires a series of mutual acts, some unilat-
eral, some bilateral in character and have left the time
of those acts open ended, and where one contrives to
receive the benefits of the agreement .. .the cause of
action does not accrue until one party has by word
or conduct indicated to the other a repudiation of the
agreement... ..

If a right of action depends upon some contingency
or a condition precedent, the cause of action does not
accrue and the statute of limitations does not begin
to run until that contingency occurs or the condition
precent is complied with. Jd. at 307-308.

The recent case of Chadwell v. E.T. Pannell, 27 Ark
App. 590, 776 S.W.2d 38 (1989) echoes these principles
and cites Rice, supra, as pursuasive authority. The Court
in Chadwell furthermore stated that the statute of limi-
tations is not favored by the law. Under circumstances
similar to those that existed in Rice. the Court held that:

Under these circumstances, the date the limitations
began to run is a question of fact. Where a question
of fact remains to be solved, the granting of summary

ee

27a |

judgment is inappropriate... Jd. at 41. (emphasis
added)

In Bowler v. Fidelity & Casualty Company of New York,
250 A.2d 580 (N.J. 1969), the Supreme Court of New
Jersey reversed a lower Court’s ruling that a Claimant’s
right to pursue insurance benefits was barred by the ap-
plicable statute of limitations. The insurance company had
failed to make payments due the insured under a policy
of insurance, and, through its silence. had induced the in-
sured not to file a lawsuit within the applicable statute of
limitations. The quoted pertinent parts of the Court,s de-
cision read as follows:

[An insurance company’s] position requires the as-
sumption of a stern obligation toward people who pur-
chase their contracts. Simply described the obligations
is that of fair dealing. . Insurance policies are con-
tracts of the utmost good faith and must be admin-
istered and performed as such by the insurer. Good
faith demands that the insurer deal with laymen as
laymen and not as experts in the subtleties of law
and underwriting ... There is an implied covenant of
good faith and fair dealing that the insurer will not
do anything to injure the right of its policy holder to
receive the benefits of its contract. This covenant goes
deeper than the mere surface of the writing. When
a loss occurs which because of its expertise the insurer
knows or should know is within the coverage, and the
dealings between the parties reasonably put the com-
pany on notice that the insured relies upon its integ-
rity, fairness and honesty of purpose, and expects his
right to payment to be considered, the obligation to
deal with him takes on the highest burden of good
faith. (cases cited)

In situations where ... the uninformed insured might
be inclined to be quiescent about the disregard of non-
payment of his claim and not to press it in timely

28a

fashion, the company cannot ignore its obligation. It
cannot hide behind the insured’s ignorance of the law;
it cannot conceal its liability. In these circumstances
it has the duty to speak and disclose, and to act in
accordance with its contractual undertaking. The
slightest evidence of deception or overreaching will bar
reliance upon time limitations for prosecution of the
claim. (emphasis added)

More specifically, in a situation such as that present
here, if all or part of the benefits provided by the
policy clearly 1s due, the insurer must make the pay-
ment. If it fails to do so. and the statute of limitations
or a policy limitation intervenes before suit is started,
it will be estopped to plead the limitation in avoidance
of a trial on the merits of the claim. Further, if the
insurer has factual information in its possession sub-
stantially supporting the policyholder’s right to ben-
efits, but it has a reasonable doubt as to whether the
evidence is sufficient to require payment, the obliga-
tron to exercise good faith, upon which it knows or
should know the insured is relying, cannot be satisfied
by silence or in action. It must notify the insured of
its decision not to pay his claim. But mere naked
rejection would not be sufficient. The giving of such
notice should be accompanied by a full and fair state-
ment of the reasons for its decision not to pay the
benefits, and by a clear statement that if the insured
wishes to enforce his claim it will be necessary for
him to obtain the services of an attorney and institute
a court action within the appropriate time. The ‘‘ap-
propriate time’’ means the time remaining under the
policy or the applicable statute of limitations within
which the suit must be brought. Failure on the insur-
er’s part to follow such a course. will bar reliance on
the statute of limitations or a time restriction on court
action expressed in the policy.

29a

Failure to make this payment constitutes conduct in-
compatible with the insurer,s obligation to exercise
good faith in dealing with its insured, and of ztself
creates an equitable estoppel against the plea of the
statute of limitations. (emphasis the Court’s) .

We regard the company,s cessation of payments and
its unexplained avoidance of its contractual obligation
as so inequitable and unconscionable as to bar reliance
upon the statutory limitation on the institution of suit
on the policy. Such conduct cannot be permitted to
support a technical defense which would avoid a de-
cision on the merits. enforce a forfeiture and bestow
on the carrier a shockingly unfair advantage. (cases
cited)

When claims are honestly made care should be taken
to prevent technical forfeitures such as would ensue
from an unreasonable enforcement of a rule of pro-
cedure unrelated to the merits. Under the circumstan-
ces it would be a perversion of the policy of the statute
of limitation to deny a trial on the merits.

There is no need to make fine distinctions as to the
persons who owe a duty to disclose. It is likewise un-
necessary to dwell upon the contention that the in-
surer’s duty of good faith to its insured arises at the
time of contracting and persists throughout the period
when premiums are paid and no return is sought, but
that when a loss occurs and the insured seeks to
obtain the compensation provided in the contract, the
parties deal at arm,s length. It is sufficient to hold
that the equitable considerations that justify relief in
this ¢ase are applicable whether defendant violated a
legal duty in failing to disclose its intention to set up
this technical defense, or whether it is now merely
seeking the aid of a court in sustaining a plea that
would enable it to obtain an unconscionable advantage
and enforce a forfeiture. (emphasis added)

30a

Although none of the cases cited immediately above
involved precisely the issue presented here, in our
view all of them point in the direction of the result
we consider just. It would be a reproach to the law
if there were no means of avoiding the unjust result
the company seeks to impose upon the insured. /d.
at 587-90.

Courts have gone to extraordinary lengths to prevent
a party from preventing the trial of a cause on the merits
by invoking the statute of limitations, when the party seek-
ing to invoke the defense had a superior means of ac-
quiring knowledge relative to the contract, and the
mechanics behind which said contract was to be enforced.
W.V. Pangborn v. N.J. Dot, 552 A.2d 222 (N.J. 1989).

The case of Davis v. Blue Cross of Northern California,
600 P.2d 1060 (1979) is discussed at length in Sarchett v.
Blue Shield of California, 729 P.2d 267 (1987) and provides
a useful precedent for the Court in the case at bar:

The insurer’s implied duty of good faith and fair deal-
ing includes a responsibility to inform its insureds of
their rights under the policies. . .Failure to inform its
insureds of the policies . .. provisions amounted to an
implied misrepresentation. (emphasis the Court’s)

Blue Cross ignores the special nature of the insurer-
insured relationship and the resultant duties which an
insurer owes to its insureds. (cases cited) Among those
duties, we stated, is the duty of each contracting party
to refrain from doing anything to injure the right of
the other to receive the benefits of the agreement.
Thus, [the insurer] ... must give at least as much
consideration to the [insured’s] interest as it does to
its own. One important facet of the insurer’s obli-
gation to give the insured’s interest as much consid-
eration .. .as it does. . .its own is the duty reasonably
to inform an insured of the insured’s rights and ob-
ligations under the insurance policy. In particular, in

3la

situations in which an insured’s lack of knowledge
may potentially result in a loss of benefits or a for-
feiture of rights, an insurer has been required to bring
to the insured’ attention relevant information so as to
enable the insured to take action to secure rights af-
forded by the policy.

The duty of good faith does not permit the insurer
passively to assume that its insured is aware of his
rights under the policy. The insurer must instead take
affirmative steps to make sure that the insured 1s in-
formed of his remedial rights. (emphasis added) Jd. at
276-77.

Arkansas recognizes the first party tort of bad faith,
Aetna Casualty & Surety Co. v. Broadway Arms, 281 Ark.
128, 664 S.W.2d 463 (1984). However, even jurisdictions
which do not hold that an insured has a cause of action
for bad faith recognize that there is an ‘‘implied covenant
of good faith” in every insurance contract that is ‘‘the
essence of what the insured has bargained and paid for,
and the insurer has the obligation to perform them. Beck
v. Farmers Insurance Exchange, 701 P.2d 795, 801 (Ut.
1985). Whether or not an insurance company has fulfilled
this duty and obligation is a question of fact for a jury.
Id.

The Supreme Court of the State of Tennessee has held
that an insurance company’s obligation under the contract
to deal ‘‘fairly and in good faith’ goes beyond only those
duties “‘specifically spelled out in the contract drawn by
the insurer.”” MFA Mutual Insurance Company v. Flint,
574.S.W.2d 718, 720 (Tn. 1978).

Federal Courts interpreting Arkansas law have held that
an insurance company must exercise “reasonable care’’
when determining whether to pay a claim, to whom, and
for what amount. Whether reasonable care was exercised
is always a question of fact for the jury. McChristian v.

32a

State Farm Mutual Automobile Ins. Co., 304 F. Supp. 748
(W.D. Ark. 1969)

Thus, as this Court can see, insurance companies do
have a duty to pay the proceeds to the proper party, and
to apprise any beneficiary of their potential rights, and
offer an explanation to said beneficiary when the insurance
company is unsure whether it owes an obligation or not
and faiis to pay said obligation. The case at bar is not the
first time the situation has arisen, and Courts have uni-
formly held that the insurance company cannot rely upon
a procedural defense to bar a trial on the merits, when
the potential Plaintiff failed to pursue a cause of action
within the applicable statute of limitations period because
of the insurance company’s silence.

Ill

ERRONEOUS STATEMENTS CONTAINED IN THE
SUPREME COURT’S OPINION

Finally, the following specifics are advanced in further
support of the Appellee’s view the record in these pro-
ceedings was not read carefully.

Supreme Court Opinion: Mr. Horn con-
cluded. . .that Steve Stoltz was the ‘legal’ bene-
ficiary and [concluded in an] executive meeting
with FPL approximately one week later. . .that
paying the son ‘without interpleader’ was ‘the
best course.’ (See Opinion pg. 3)

Facts: Mr. Horn told the insurance company to interplead
the money, that this was the safest course to take, that
this would alert the Estate to its potential claim, that the
Estate had a potential claim, and that interpleading the
money would expose the insurance company to a suit from
the loser. The “executive meeting” to which this Court
refers occurred the SAME DAY (not a week later) as the
Memo from Mr. Horn telling his client to interplead the

33a

money. The words “legal beneficiary’ and “the best
course’ are contained in Defendant’s Exh. 20, or the hand-
written Memorandum dated the same day and directly con-
tradictory to Mr. Horn’s Memo, from an individual in the
Claims Department of the Defendant. The fact that the
Memo from Mr. Horn, and this bogus Memo from the
insurance company are dated the same day, and also con-
tradictory, was adequately pressed at the trial of this mat-
ter and show the subtleties from which fraud may be
inferred. All third parties testified that had they known
that neither the Estate nor Steve Stoltz knew of the dis-
crepancies in the beneficiary, they would have notified him
of this because that was “the only honest thing to do.”

The Court’s Opinion: This dispute with the IRS
arose because of a [gift tax] provision, if a gift
is made within three (3) years of the decedent’s
death. (See Opinion pg. 3)

Facts: The IRS agent investigating this matter told the
Friday Firm that, although the money was paid to the
son, there was and is a valid issue regarding whether or
not the Estate is the proper beneficiary, and noted the
fact that the Estate,s attorneys, who were also represent-
ing the insurance company itself at that time, whited out
portions of the file and sent it to the IRS.

The Court’s Opinion: In 1983, the attorneys who rep-
resented both the Estate and Steve Stoltz requested
[the files and they were readily turned over.] ’In all
probability’ these files would have been turned over
to the Estate upon like inquiry. (See Court’s Opinion
pg. 8)

Facts: The attorneys representing the Estate got the files
in 1983, when they were also representing the Defendant
insurance company itself. Surely, it does not seem ironic
to this Court that the attorneys representing the insurance
company would have open access to its client’s own files,
and said attorneys would protect its client. In contrast,

34a

the attorneys representing the undersigned’s clients filed
discovery, and had to have a Court Order to compel the
Defendant and the Friday Firm to turn over the material
from the insurance company’s files to him. On top of spec-
ulating to supply facts to support its opinion if the true
interaction could not be ascertained, we have an example
in the record that shows this Court’s supposition is wrong.

The Court’s Opinion: In response, First Pyramid den-
ies concealment and asserts the Estate knew or should
have known of the change in beneficiaries on the pol-
icies. (See Court’s Opinion pg. 5)

Query: The undersigned cannot ascertain what this Court
means by this statement, as same, except for ‘‘denies con-
cealment,”” has no connection to any position raised by
either party on Appeal.

Finally, this Court cites Atlanta Exploration, Inc. v.
Ethyl Corporation, 301 Ark. 331, 784 S.W.2d 150 (1991)
as one of the few cases in its ruling to support its opinion
that you must have affirmative and fraudulent acts of
concealment. A reading of this case makes it clear that
this Court found that said finding is a question of fact for

the jury.
CONCLUSION

Writing this Brief is a sad day for the undersigned. It
is sad because he has to address this Honorable Court in
this manner. He has held this Court in the highest esteem,
and took an oath before this Court that he takes very
seriously. The first thing some people do when they lose
is manufacture excuses and shout ‘“‘sour grapes.” Such is
not the case here. The undersigned is not a radical or a
renegade. He wakes up each morning with both feet on
the ground, and has lost cases before he thought he should
have won when there were legitimate issues present. Such
is not the case here either.

35a

The Appellee won this case before the jury. Every ‘“‘issue
of fact” this Court chooses to change or ignore was pre-
sented to the jury. The jury was properly instructed, or,
in the alternative, no objections were raised which merit
any discussion in this Petition and Brief. The undersigned
beat the Appellant at every turn; here buffed every ar-
gument, legitimately, factually, and according to the law.

There is substantial evidence to support fraud. It was
made a jury question by the Defendant. It is the law of
the case. This Court cannot read the Abstract of the Tes-
timony provided as Exh. A to the Brief in Support of
Motion For Vacatur, To Disqualify And, In The Alter-
native, To Appoint A Special Master, And Motion For
Extension Of Time To File Petition For Rehearing, and
state otherwise.

According to this Court’s decision, an insurance com-
pany within this State can pay whomever it chooses, or
pay no one at all, take no affirmative action whatsoever
to alert the rightful beneficiary, wait five years, and be
home free. We must all check the obituaries for the pre-
ceding five years, and stay ‘‘up to date” on deaths from
this day forward, in order to make sure we send inquiries
to all insurance companies who have paid benefits asking
if those benefits really belonged to us. Is that what this
Court wants to tell the People of Arkansas? The Appellee,
and those he stands for, feel like the families of the victims
wronged by the individuals recently set free by acting
Governor Jerry Jewell, who acted in spite of the decisions
of those respective juries.

The Appellee is asking this Court to have the courage
to admit they made a mistake and right the wrong. We
have lived by the jury system in this country for years,
and this Court’s verdict simply states that the decisions
of a jury within this State carry no weight whatsoever.

In sum and substance, while the Appellee could see how
an adversary, who carries the torch for his client, could

36a

argue in good faith that a factual question for the jury is
present on the issues pertinent to these proceedings, there
is absolutely no way anyone can read the record, view
same in the light most favorable to the Appellee, and state
the evidence at trial is so one-sided the jury,s verdict, and
concurrent findings of fact, can be overturned.

Respectfully submitted,
DAVIDSON LAW FIRM, LTD.
P.O. Box 1300

Little Rock, Arkansas 72203-1300
(501) 374-9977

By: s/s Charles Phillip Boyd, Jr.
Charles Phillip Boyd, Jr.
Bar No. 82023

CERTIFICATE OF SERVICE

I, Charles Phillip Boyd, Jr., do hereby certify that the
above and foregoing has been mailed by ordinary mail with
sufficient postage affixed thereon, on this the 22nd day
of January, 1993, to:

Peter G. Kumpe
Williams & Anderson
400 Rogers Building
111 Center Street
Little Rock, AR 72201

s/s Charles Phillip Boyd, Jr.

Charles Phillip Boyd, Jr.

37a

APPENDIX 4
SUPREME COURT OF ARKANSAS

No. 92-4

FIRST PYRAMID LIFE INSURANCE COMPANY OF AMER-
ICA,

APPELLANT
V.

J. MICHAEL STOLTZ, AS SPECIAL ADMINISTRATOR OF
THE ESTATE OF J.P. STOLTZ, DECEASED,
APPELLEE

Opinion Delivered FEB 15 1993

APPEAL FROM THE PULASKI COUNTY CIRCUIT
COURT, NO. 89-2464.
HON. CHRIS PIAZZA, JUDGE

CONCURRING OPINION.

JACK HOLT, JR., Chief Justice

The appellee, Estate of J.P. Stoltz (hereafter “the Es-
tate’’), has filed a petition for rehearing requesting that
this court vacate its decision of December 21, 1992, re-
versing a jury verdict in the Estate’s favor. In addition,
the appellee has filed a separate motion for ‘“vacatur”
- praying that all members of this court who participated
in this case disqualify themselves from rendering any fur-
ther decision on the merits of this case and that seven
special justices be appointed. The court treated this motion
as a Letter of Suggestion of Disqualification, Ark. Sup.
Ct. R. 27, since our rules do not provide for a motion for
vacatur.

38a

The Estate’s Motion for Vacatur is premised upon al-
legations that I have a social relationship with Mr. Her-
schel Friday of the Law Firm of Friday, Eldredge & Clark
that renders my decision making in this case impaired
because of this relationship, that all members of this court
should disqualify.The determinative issue in this case is
whether the appellee, Estate of J.P. Stoltz, has proven
fraudulent concealment on the part of First Pyramid Life
Insurance Company in order to toll the statute of limi-
tations on the Estate’s claim. In an unanimous decision,
the other justices were in agreement that the Estate had
not proven fraudulent concealment and that the Estate
was not entitled to a judgment in its favor. Neither Mr.
Friday nor members of the Friday, Eldredge and Clark
firm were parties or counsel to the litigation in question,
nor served as attorneys at trial or during this appeal.

No one outside of this court has discussed this case with
me during its pendency on appeal. My relationship with
Mr. Friday is of no moment. It does not impair my decision
making processes in this case. For these reasons, I decline
the appellee’s suggestion that I disqualify.

39a

APPENDIX 5
IN THE ARKANSAS SUPREME COURT

NO. 92-4

FIRST PYRAMID LIFE INSURANCE COMPANY OF AMER-
ICA; USABLE INSURANCE COMPANY
APPELLANTS
VS.

J. MICHAEL STOLTZ, As Special Administrator of the Es-
tate of J.P. Stoltz, Deceased
APPELLEE

MOTION FOR RECONSIDERATION

Comes J. Michael Stoltz, As Special Administrator of
the Estate of J.P. Stoltz, Deceased, and for his Motion
does state as follows:

1. This Court rendered an Opinion on February 15, 1993
denying the Estate’s Motion for Vacatur, To Disqualify
And, In The Alternative, To Appoint A Special Master.
If the Court refused to disqualify itself, the Estate re-
quested the appointment of a Special Master to investigate
the extent of what is believed to be a close personal friend-
ship between Chief Justice Jack Holt, Jr. and Herschel
Friday of the Friday Law Firm, exemplified by Judge Holt
being the personal and specific guest of Mr. Friday’s on
numerous occasions through the years at social outings
and functions, including the period of time this matter was
pending on Appeal.

2. The Court’s Opinion erroneously states that the fact
that Judge Holt and Mr. Friday have a “social relation-
ship” is the only basis for his disqualification, and the
disqualification of the other members of this Court. The

ee

40a

basis for the Motion to Disqualify is not simply that a
“social relationship’”’ exists between Mr. Friday and Judge
Holt. It is believed that Judge Holt is a regular guest of
Mr. Friday’s on his farm, which is in essence a private
hunting resort, in Mayflower, Arkansas, and that other
hunting excursions between these individuals transpired
while this matter was on Appeal. The Friday Law Firm
had a substantial interest in this Court’s overturning the
jury verdict that had been rendered in these proceedings.
By analogy and example, Judge Holt being a regular guest
of Mr. Friday on his farm, where pen raised quail are
hunted, complete with a hunting lodge that is said to be
elaborate and eloquent, is no different than Judge Holt
being a routine and regular guest of Mr. Friday’s at a ski
resort owned by Mr. Friday in Boulder, Colorado, and then
Judge Holt writing an Opinion that the Friday Law Firm
believes helps exonerate it from further exposure to the
Estate in future litigation that is imminent.

3. The Supreme Court’s Concurring Opinion does not
discuss, much less distinguish, Johnson v. Sturdivant, 295
Ark. 622, S.W.2d 415 (1988), nor tell the attorneys and
people of the State of Arkansas why the standards laid
down by that case applied to Judge John Purtle, but not
to Judge Holt.

4. This Court’s “Concurring Opinion” states as a basis
for the refusal to disqualify that “neither Mr. Friday nor
members of the Friday, Eldredge & Clark firm are parties
or counsel to the litigation in question, nor served as
~-attorneys at trial or during this Appeal.’’ Said statement
ignores, and is directly contrary to, the specific law laid
down by the U.S. Supreme Court which states in une-
quivocable fashion that recusal due to a conflict is not
limited to the parties named in the suit, or the attorneys
representing said parties. Lilejeberg v. Health Services Ac-
quisition Corporation, 486 U.S. 847, 108 S.Ct. 2194, 100
L.Ed.2d 855 (1988) and Preston v. U.S., 923 F.2d 731 (9th
Cir. 1991).

4la

4. The “Concurring Opinion’”’ states that the crux of the
issue on Appeal is whether or not fraudulent concealment
tolling the statute of limitations had been proven by the
Estate is the dispositive issue. This statement indicates to
the Estate that this Court has again refused to look at
the true issues inherent in this Appeal, or matters raised
in the post-Opinion pleadings unequivocably indicating that
the “law of this case,” as codified in Jury Instruction No.
8 (R.4877-78), given without objection, is that First Pyr-
amid is guilty of fraud which tolled the statute of limi-
tations because the Estate was determined to be the proper
beneficiary of the life insurance policies and First Pyramid
failed to apprise the Estate of its claim. While the entire
record, if reviewed, would indicate that numerous other
facts and factors representing fraud are present, no such
inquiry is necessary.

5. Judge Holt’s statement that no one outside the Court
has specifically discussed this matter with him during its
pendency on Appeal ignores the legal standard required
for recusal. There need be no allegations, or proof, that
this case was actually and specifically discussed by other
members, specifically Mr. Friday, with Judge Holt. The
fact that not only do they have a close personal friendship,
but that Judge Holt is a guest at Mr. Friday’s private
hunting resort, and on hunting excursions outside the State
of Arkansas, and will undoubtedly continue to be a guest
on a regular but intermittent basis in the future, is enough
to cause a reasonable man to question Judge Holt’s im-
partiality. That is the standard, not whether or not specific
discussions of this case took place. 415 (1988) dictates that
the remaining members of this Court disqualify, and that
seven (7) special Justices be appointed to hear this matter
on its merits.

6. The failure of this Court to appoint a Special Master
to investigate the full extent of the personal friendship
between Judge Holt and Mr. Friday, and the number of
times Judge Holt has been the personal quest of Mr. Fri-

42a

day’s on his private land, or on out of state leases, to
partake in an important recreational activity, amounts to
Judge Holt sitting in judgment on himself with no denial
that such is the true situation, much less an explanation
for why same is not grounds for disqualification. This sit-
uation inherently raises the issue which mandated the en-
tire Court’s recusal, and articulated in Johnson v.
Sturdivant, 295 Ark. 622, 758 S.W.2d 415, 416 (1988) as
follows: ‘It is not easy to sit in Judgment of one’s self.”
These events amount to a violation of the 14th Amendment
to the United States Constitution, a denial of due process
for the Estate, and causes one to seriously question the
Estate’s ability to receive a fair hearing in these pro-
ceedings.

7. Attached hereto as Exh. A is an Affidavit in ac-
cordance with Rule 3 of the Rules of the Supreme Court.

WHEREFORE, the Estate respectfully prays that this
Court reconsider its “Concurring Opinion,” and its refusal
to disqualify itself, that this Court not render any addi-
tional Opinions pending the outcome of a judicial inquiry
by the Arkansas Judicial Discipline & Disability Commis-
sion, and for all other relief to which it is justifiably en-
titled. i

Respectfully submi

DAVIDSON LAW
P.O. Box 1300
Little Rock, Arkansas 72203-1300
Telephone (501) 374-9977

By: s/s Charles Phillip Boyd, Jr.
Charles Phillip Boyd, Jr.
Bar No. 82023

[, LTD.

CERTIFICATE OF SERVICE

I, Charles Phillip Boyd, Jr., do hereby certify that the
above and foregoing has been mailed by ordinary mail with

43a

sufficient postage affixed thereon, on this the 18th day of
February, 1993, to:

Peter G. Kumpe
Williams & Anderson
400 Rogers Building
111 Center Street
Little Rock, AR 72201

s/s Charles Phillip Boyd, Jr.
Charles Phillip Boyd, Jr.

44a

APPENDIX 6
AFFIDAVIT

Comes the undersigned and does hereby solemnly state
under oath the following facts and information are true
and correct to the best of my knowledge and belief:

1. I am one of the attorneys of record for the Appellee
in these proceedings.

2. I represent six (6) heirs and/or beneficiaries of the
Estate of James Patrick Stoltz. My contact client, Mike
Stoltz, contacted me around Christmas, 1992, after this
opinion was delivered, and informed me that he had heard
of quail hunting trips taken to Herschel Friday’s farm by
Jack Holt, Jr., Chief Justice of the Arkansas Supreme
Court, and trips to leased land in the State of Texas. These
trips supposedly occurred intermittently, but on a repeti-
tive basis, through the years.

3. The last paragraph of the letter form Mike Stoltz
requested, in no uncertain terms, that I “‘investigate these
rumors immediately and see if there is any validity to them

notify [him] of [his] legal options.

4. I have investigated this matter by various means,
including, but not limited to, a direct conversation with
Mr. Herschel Friday, and have been apprised that Chief
Justice Jack Holt, Jr. and Herschel Friday have “‘kept up
with each other through the years,” and have hunted to-
gether in Texas on leased lands, and on Herschel Friday’s
farm in Mayflower, Arkansas. I have furthermore been
apprised that the Honorable Chief Justice Jack Holt, Jr.
has hunted in Mayflower with Mr. Friday’s son. These
quail hunting excursions have been intermittent, but re-
petitive, through the years and include at least one oc-
casion during the ‘‘quail’’ season of 1992-93.

5. I have been apprised through my dealings with mem-
bers of the Friday Law Firm that they believe, although

45a

I disagree with same, that the Opinion in this Court helps
insulate them from any further exposure in these pro-
ceedings based on the statute of limitations. I make no
assertions, or insinuations, that the decision of this Court
and the opinion of the Friday Firm in this regard are
anything other than circumstantial; I am merely stating
under oath what has been related to me to show the Friday
Firm has made statements that it believes it is an inter-

ested party.

6. I have counseled with other attorneys whom I hold
in the highest esteem, and have been told that, based on
my client’s letter alone, I have no choice but to bring this
matter to this Court’s attention.

s/s Charles Phillip Boyd, Jr.
CHARLES PHILLIP BOYD, JR.

VERIFICATION

I, Charles Phillip Boyd, Jr., the undersigned, do hereby
state under oath that the statements set forth hereinabove
are true and correct to the best of my information, knowl-
edge and belief.

s/s Charles Phillip Boyd, Jr.
CHARLES PHILLIP BOYD, JR.

SUBSCRIBED AND SWORN TO before me a Notary Pub-
lic, on this the 19th day of January 1993.

s/s Edwina K. Bell
NOTARY PUBLIC

My Commission Expires:
12-1-95

46a

APPENDIX 7
Party
Repre-
sented

Case Firm Outcome Firm

Rich Mountain Elec. Coop. v.
Revels, 311 Ark. 1, 841 S.W.2d
151 (1992) Appellant Affd -

Union National Bank v.
Barnhart, 308 Ark. 190, 823

S.W.2d 878 (1992) Appellant Affd -
Ross v. Patterson, 307 Ark. Rev’d/ +
68, 817 S.W.2d 418 (1991) Appellant Dism’d
Travis v. Houk, 307 Ark. Rev'd) -
84, 817 S.W.2d 207 (1991) Appellee Rem
Register v. Oaklawn Jockey

Club, Inc., 306 Ark. 491, Rev’d/

811 S.W.2d 315 (1991) Appellee Rem -

Blankenship v. Burnett, 304
Ark. 469, 803 S.W.2d 539
(1991) Appellee Aff d +

Barnett v. Arkansas Transport
Co., 303 Ark. 491, 798 S.W.2d

79 (1990) Appellee Aff d +
Allstate Ins. Co. v. Redman

Homes, Inc., 302 Ark. 335, Rev’d/

789 S.W.2d 454 (1990) Appellee Rem -

CDI Contractors, Inc. v. Goff
Steel Erectors, Inc., 301 Ark.
311, 783 S.W.2d 846 (1990) Appellant Affd -

McCollough v. Lessenberry, 300
Ark. 426, 780 S.W.2d 9 Rev’d/

(1989) Appellant Rem .

47a

Moore v. Missourn Pacific R.R.,
299 Ark. 232, 773
S.W.2d 78 (1989)

Ragland v. General Tire &
Rubber Co., 297 Ark. 394,
763 S.W.2d 70 (1989)

Carton v. Missourt Pac.
R.R., 295 Ark. 126, 747
S.W.2d 93 (1988) (reh’g
denied, April 25, 1988)

Gipson v. Brown, 295 Ark.
371, 749 S.W.2d 297 (1988)

Butler Mfg. Co. v. Hughes, 292
Ark. 198, 729 S.W.2d 142
(1987), supplemental opinion
reh’g denied, 292 Ark. 206-A,
731 S.W.2d 214 (1987)

Howard v. Wood Mfg. Co.,
291 Ark 1, 722 S.W.2d 265
(1987)

First State Bank v. Twin
City Bank, 290 Ark. 399,
720 S.W.2d 295 (1986)

Gipson v. Brown, 288 Ark. 422,
706 S.W.2d 369 (1986)

Appellee

Appellee

Appellee

Appellant

Appellant

Appellee

Appellee

Appellant

Rev’d/
Rem

Rev’d/
Rem

Rev’d/
Rem

Case
Dism’d

Aff'd

Appeal ~
’ Dism’d

Rev’d/
Rem

Rem

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386019_1195%3A2. Public record. Not legal advice.