ALC-Claims Review/Litigation Reports Oversight
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Good afternoon, members. We'll start today's meeting with the litigation oversight portion of the agenda, and then we'll proceed with claims review. Before we start, I want to remind the agencies presenting multiple reports to present each report separately, and then to pause to allow the subcommittee to take action before moving on to the next report. So we're going to start with Litigation B1, report submitted by the Public Service Commission.
Will someone from the agency please come to the table, introduce yourself, and then present
Speaker 4
0:51
the report. Good afternoon. Danny Hofer, Chief of Staff. Yeah, sorry about that. These aren't quite as sensitive as the ones upstairs. Danny Hofer, Chief of Staff.
Speaker 8
1:03
So the case that we have reported on, First Electric Cooperative Corporation versus the Arkansas Public Service Commission, arises out of the APSC's adjudicatory capacity rather than its rate-making capacity. The APSC hears complaints brought before it against utility companies by any number of individuals. In this case, the utility is First Electric.
The APSC acted as the adjudicator and made a finding, and at this time, the utility has appealed that finding to the Court of Appeals. Whether the Court of Appeals upholds the APSC's finding in this case or not does not create any liability for the agency because, like I said, we were just acting as the adjudicator.
So it's not so much that the appeal is against the APS-C, just a finding that was issued on a claim that arises between two different parties, two separate parties that aren't the APS-C. Are
Senator Gary Stubblefield
Unverified
2:34
there any questions? What was
Speaker 8
2:37
the finding against First Electric? So the finding came from our order number 10 in this docket, which was a motion to compel.
The initial complaint filed has to do with information that the utility and a net metering customer disagree on whether or not it should be made available. And so the APS-C made a finding initially that it should be made available. That actually went through the appellate process previously. And when the APS-C's decision or order in that case was upheld by the higher level,
the ALJ overseeing this then ended up issuing a well she ended up granting a motion to compel so essentially asking that First Electric turn over certain information and that is what is on appeal now at this time. So this
Senator Gary Stubblefield
Unverified
3:47
did go through the appellate process? This
Speaker 8
3:51
has this same case has previously or the same docket so we call them dockets at the APSC their cases. The same docket has previously gone through the appellate process on a different order
and this is now a new order that the utility is appealing. Was the old order thrown out? No,
Senator Gary Stubblefield
Unverified
4:18
it was appellate. Oh, it was appellate. Yes. Thank
you, Mr. Chairman. Are there any other questions? Seeing no other. Yes, Representative Gasway, you're recognized. Okay,
Representative Jimmy Gazaway
Unverified
4:30
and I apologize, but I'm really just trying to figure out what's going on here. It looks like you mentioned a motion to compel or an order to compel.
Correct. Was that against First Electric? Yes. So the Arkansas Public Service Commission had to get a motion to compel, or an order to compel, based on a motion against Arkansas First Electric, or First Electric, because you guys wouldn't produce information that you should have
Speaker 28
5:01
produced. Is that right? I'm not sure I understand your question, but
Speaker 8
5:06
I think I can answer it nonetheless, just without a yes or a no. So the net metering customer filed the motion to compel against First Electric for information that was not produced.
The information in question had gone through the appellate process previously in terms of the APSC said, yes, this should be issued. And the utility appealed that. The appellate court upheld the APSC's finding in that. So then the net metering customer came back,
filed a motion to compel, which was granted by the APSC. So the order under appeal now is the order granting the motion to compel. I see. Okay.
Representative Jimmy Gazaway
Unverified
6:07
so this is still pending? Correct. All right. I mean, it is
a little concerning that the Public Service Commission granted an order to compel. Is there, were there like legitimate objections as to why certain things weren't disclosed?
Speaker 8
6:27
In terms of legitimate, I guess, so while the APSC has issued an order, I will, I guess, give the asterisk that it is an ALJ-level decision. So this is something that still could come before the full commission to either be upheld or struck down.
So I am hesitant to, just on your characterization of legitimate, not that it's not legitimate, I do not want to bind the commission in either way in their finding. That being said, the ALJ certainly thought so because that's why she issued the order. Okay. So
Representative Jimmy Gazaway
Unverified
7:17
it's the ALJ that issued the order to compel. Yes. You guys have appealed
Speaker 8
7:24
it to whom? We have not appealed to anyone. The Utility First Electric has appealed this.
Representative Jimmy Gazaway
Unverified
7:31
Okay. I see. All right. You're here with the Public Service Commission? Correct. Okay. All right. Thanks. Is
there somebody here from that electric company? that can answer his question? Hmm. All right. Any other questions? Seeing no other questions, do I have a motion
to review? I have a motion. Do I have a second? All in favor,
or is there any discussion? All in favor say aye. Aye. Opposed, no. Motion carries. on to b2 now we'll move on to a gentleman item b2 which is a report submitted by the department of finance administration pursuant the act 557 of 2023 regarding certain state tax litigation resolved during the period no yeah prior calendar year will someone
from the agency please come to the table introduce yourself and present the report
Speaker 38
8:34
Paul Goering, Assistant Revenue Commissioner, DFA. Alicia
Speaker 41
8:43
Austin Smith, Chief Counsel for the Revenue Division of DFA. This is actually a new report that we're in front of you right now. Act 557 of 2023 was new legislation that required us to present a report of any state tax litigation that met a certain threshold that was resolved in the prior year. So in January of this year, we submitted the report of all of the state tax litigation that was resolved in 2023.
You can read we provided a short summary of each of those cases. There were six matters, but the first three are noteworthy because they were actually settlements that were brought to ALC and approved by ALC. The next two were actually dismissed by the taxpayer. And then the final one, DFA filed a motion for summary judgment, which the court granted. so we're happy to answer any questions but those are the six cases that were resolved that met this particular threshold for 2023 does
anyone have any questions seeing no questions this report
will be filed thank you for being here thank you thank you the next item on the agenda is b3 which contains four litigation reports submitted by the department of labor and licensing will someone from the agency please come to
the table introduce yourself and present the reports Please present each report and then pause and allow us to take action. Thank you, sir. I'd be happy to.
Dan Parker
Unverified
10:08
My name is Dan Parker. I'm the Chief Legal Counsel for the Department of Labor and Licensing.
Good afternoon, everybody. The very first one, and I'm going to try and leave the names out of this because some of these, these are all lawsuits by the department to collect money owed to the department. The department's not being sued in any of these cases. These are actions that we have brought, either in our capacity to litigate wage claims on behalf of wage claimants, or the second one is a wage and hour claim, and the other two are from our licensing duties to collect a fine.
So they're all collection cases, and none of them are in active litigation anymore. The very first item was a wage claim case that resulted in a default judgment. So at this point in time, the department has a judgment, and we're just looking for means to collect it on behalf of the wage claimant. Are there
any questions? Seeing no questions, do I have a motion?
Second? I've got a second. Is there any discussion? All in favor say aye. Opposed no. Motion carries. You can continue.
Dan Parker
Unverified
11:28
Thank you. The second item was a much larger wage and hour case that we were able to successfully collect all of our, the amount, the claim amount, which is about $42,000 from the sale of a parcel of real estate.
so that money came in and we dismissed that case are there any questions
seeing no questions do i have a
motion motion second second all in favor say aye opposed no motion carries you may continue the third case
Dan Parker
Unverified
12:10
listed is based on a licensing a fine that was levied against one of our licensees. We agreed to a settlement amount
of $1,500, which has been paid in full, and upon receipt of that payment, the
case has been dismissed. Are there any questions? Seeing no
questions, do I have a motion to review? Motion, second. Is there any discussion? All in favor say aye. Opposed, no.
Dan Parker
Unverified
12:43
Motion carries. You may continue. Thank you. The final item, 3D, was also a collection case for a licensing fine that was levied.
The defendant did not respond, so that resulted in a default judgment, and that is now in the collection phase. Are there any questions?
Seeing no questions, do I have a motion to review? I've got a motion. Do I have a second? Second. Is there any discussion? All in favor say aye. Aye. Opposed, no. Motion carries. Thank you for being here today. Thank you. Next on the agenda is C1, which contains two proposed settlements submitted by the Department of Finance and Administration.
Will someone from the agency please come to the table, introduce yourself, and present the reports?
Please do one and pause and then let us. Thank you.
Speaker 38
13:41
Thank you, Madam Chair. Paul Gehring, Department of Finance and Administration, Assistant Revenue
Speaker 40
13:47
Commissioner. Alicia Austin-Smith, Chief Counsel for the
Speaker 38
13:52
Revenue Division. Thank you, Madam Chair. The first item for consideration by the subcommittee is a tax
litigation matter. It is ECAS House Industries Incorporated versus Jim Hudson, Secretary of DFA. This action was filed in the Cross County Circuit Court in 2023. It is an appeal of an administrative determination of the department sustaining an assessment of sales tax. As a part of the assessment, the taxpayer was assessed and had in contention $38,168.07 in sales tax.
The department and the taxpayer entered into a negotiated proposed settlement of this matter, wherein the taxpayer would pay the full amount of the remaining tax that was in controversy, which was the $38,000 figure, and the department would agree to waive $16,525.17 in accrued interest, pending approval of this subcommittee and ALC. DFA would be happy to field any questions if the subcommittee has any. Does anyone have
any questions? Seeing no questions, do I have a motion? Got a motion,
a second? Second. Is there any discussion? All in favor say aye. Opposed, no. Motion carries. You may proceed. Thank you, Madam
Speaker 38
15:15
Chair. The second item is another litigation matter that was an appeal from an administrative determination. This matter is regards corporate income tax. The taxpayer is Intergy Corporation and its subsidiaries. It was filed in the Pulaski County Circuit Court in 2022. As a part of our assessment in this case, it applied to tax years
2014 through 2018. The department assessed corporate income tax in the sum of $19,748,505 in additional tax, $1,961,098.60 in penalties, and $9,838,290.42 in interest. As a part of the ongoing negotiations in this matter, the taxpayer and the department
prepared a negotiated settlement that's in your packet, wherein Intergy agreed to the tax due amount for the 2014 through 2018 period would be adjusted to $7,864,531. There were several items that were in controversy in the matter wherein the department conceded a few issues, as well as the taxpayer conceded another issue as well. The taxpayer had a prior
credit on their corporation income tax account of $12 million, so that the tax due of $7.8 million would be applied to that $12 million previous credit, and the remaining balance could be carried forward by the taxpayer to any future tax years, 2019 and following. We'd be happy to answer any questions about the proposed settlement. Are there any questions?
Seeing no questions, do I have a motion to review? motion i've got a second is there any discussion all in favor say aye
opposed no motion carries thank you for being here thank you
we're moving on to d miss orby will you come to the table and introduce yourself we'll move on to the claims review portion of the agenda for this part of the agenda. Ms. Johnson will read a brief summary for each claim followed by any discussion and questions from each member and then the committee will take action on the item. Items in part D of the agenda are
reassurances of lost or expired warrants, unpaid bills where the agency admitted liability and salary corrections. Introduce yourself for the record and then you may begin. Yes, ma'am.
Catherine Irby
Unverified
18:09
My name is Catherine Irby. I'm the
Speaker 67
18:17
director of the Claims Commission. Madam Chair, the first item on the claims review agenda is D1. This is claim number 221173, Biomat USA Incorporated versus
Arkansas Department of Finance and Administration. The claimant requested reissuance of an outdated warrant in the amount of $15,649 payable from the Arkansas Department of Finance and Administration. The warrant is still outstanding and no duplicate has been issued. The Claims Commission allowed the claim and referred it for review and placement on an appropriation bill. Ms. Arby, does the Commission
Speaker 70
18:57
have anything to add? No, ma'am, but I'm happy to take any questions.
Are there any questions? Seeing no questions, do I have a motion to review? Motion
and a second. Is there any discussion? All
Speaker 67
19:22
in favor say aye. Aye. Opposed, no. Motion carries. Ms. Johnson. Item D2 is claim number 221517, Verizon Selco versus Arkansas Department of Agriculture. Claimant requested reissuance of an outdated warrant in the amount of $17,720.16 payable
from the Arkansas Department of Agriculture. The Claims Commission allowed the claim and referred it for review
and placement on an appropriation bill. Would you like to add anything, Ms. Erb? No, but I'm happy to take any questions. Are there any questions? Seeing no
questions, do we have a motion to review? A second? is there any discussion on the motion oh got a question i think it's senator johnson you're recognized
Senator Mark Johnson
Unverified
20:06
so we're gonna allow you to reissue a warrant against one of our departments
this warrant was issued to verizon communications okay and so that that would be the payee on the reissued check.
Okay. Thank you. Is there any other questions? Seeing no other questions now, do I have a motion to review? I've got a motion and
a second. Any discussion on the motion? All in favor say aye. Aye. Opposed, no. Motion carries.
Speaker 67
20:42
Ms. Johnson. Item D3 is claim number 240653,
Hewlett-Packard Enterprise Company versus Arkansas Department of Finance and Administration. The claimant requested reissuance of an outdated warrant in the amount of $71,947.47 payable from the Arkansas Department of Finance and Administration. The warrant is still outstanding and no duplicate has been issued. The Claims Commission allowed the claim and referred it for review and placement on an appropriation bill. Ms.
Arby, would you like to add anything? No, ma'am. Happy to take questions, though.
Are there any questions? Seeing no questions, we have a motion to review.
Motion and a second. Is there any discussion on the motion? All in favor say aye. Opposed, no. Motion carries.
Speaker 67
21:28
Ms. Johnson. Item D-4 is claim number 240914, Southwestern Bell Telephone Company versus Arkansas Department of Finance and Administration. Claimant requested reissue of an outdated warrant in the amount of $6,024,594 payable from the Arkansas Department of Finance and Administration. The warrant is still outstanding.
no duplicate has been issued. The Claims Commission allowed the claim and referred it for review and placement on an appropriation bill. Ms.
Arby, would you like to add anything? No, happy
Representative Matthew J. Shepherd
Unverified
22:02
to take questions. Is there any questions? Speaker Shepard, you're recognized. So with regard to all of the reissuance of these various warrants, one question is, is there a point in time where the Claims Commission is no longer able to approve the issuance of a new warrant. And then secondly,
you know, the next several are some pretty sizable warrants. I guess it would be helpful. Is there some explanation as to why it came to the point of needing to reissue the warrant? So that's
Senator Mark Johnson
Unverified
22:36
a good question. As to this two Southwestern Bell ones, the two highest dollar amount ones on this agenda. I would note that those reissuances were initiated when the agency requested that the warrants be reissued. That's what started the process. So we will get requests
from agencies saying we have this uncashed check on our books. We need to get it reissued. And at that point, the commission staff will send a claim form to the payee and ask them to fill it out, sign it, have it notarized, and send it back. And if they do, then the process starts. To date, in my eight years of the commission, I've never seen a contested reissuance. I suppose at some point an agency might contest the reissuance of a warrant, but I've not seen it, and I don't
believe that there's any specific statute that speaks to the time period for the reissuance of a check. Okay. Thank you. Are
there any other questions? Senator Johnson, you're recognized. If they hadn't cashed
Senator Mark Johnson
Unverified
23:39
a check and you've issued a check, why
Speaker 76
23:43
in the world would you say, well, let's write another check if they need it? Well, that may be
Speaker 90
23:50
a good question, but that may be a better question for the agencies involved here.
Senator Mark Johnson
Unverified
23:58
But when the commission receives a request for reissuance, if it's uncontested, we push it through.
Speaker 90
24:06
You'll never get that from me. Oh, if anybody wants to give me
a check, I promise I will walk it straight to the bank. Are there any other questions? Seeing
no questions, do I have a motion to review? Motion. Do I have a second? Got a second. All in favor, say aye. Opposed, no. Motion carries. Ms. Johnson.
Speaker 67
24:29
Item D5 is claim number 240915. This is Southwestern Bell Telephone Company versus Arkansas Department of Finance and Administration. The claimant requested reissuance of an outdated warrant in the amount of $2,106,556.61 payable from the Arkansas Department of Finance and Administration. The warrant is still outstanding and no duplicate has been issued. The Claims Commission allowed the claim and referred it for review and placement on an appropriation bill. Ms. Arby, would you like
to add? No, but I'm happy
to answer any questions. Are there any questions? Representative Gasway, you're recognized. Thank
Representative Jimmy Gazaway
Unverified
25:08
you, Madam Chair. So the last order that we
just approved was on a $6 million check. This is on a $2 million check. How long
Speaker 90
25:19
ago were these checks written? So in the one that we're talking about right now, that check was
Senator Mark Johnson
Unverified
25:25
issued in April of 2019. And on the check we just finished talking about. That one was issued in February of 21.
Representative Jimmy Gazaway
Unverified
25:36
Okay. Has Southwestern Bell been calling, wondering where their $6 million is and where their $2 million is? They haven't
been calling me. No, sir. It's no. I just wondered how long ago it
had been, so it's very interesting. are there are there any other questions okay representative coz art if i remember correctly
Representative Bruce Cozart
Unverified
26:08
once they're issued those checks and they don't cash them at a certain time
they go out and then they're have to ask for reissuance is that correct yes
Speaker 63
26:16
they're out of date i want to say 180 days
Representative Bruce Cozart
Unverified
26:19
180 days so that's the problem that most of these are occurring with out-of-date checks. So they're asking for reissues. Thank you. Speaker Shepard, you're
Representative Matthew J. Shepherd
Unverified
26:27
recognized. I would like, I'd like to hear from, from someone at DF&A specifically to the, to the issue of, of a warrant that was what, five years, at least five years old, I think. April of 2019 for this one.
Please state your name again, sir, for the record. Thank you, Madam Chair. Paul
Speaker 112
26:45
Goering, DFA. My question is, it's almost five
Representative Matthew J. Shepherd
Unverified
26:49
years at least on one of these. One is three years old. Apparently, these were initiated by the department, which I'm all for the department getting the money to who it needs to go to. I'm just wondering, is there a time frame at which point the department would say, I mean, we're not going to do this anymore. I mean, it seems like
we're either by the fact that this warrant has not been deposited, it's creating work for the department, for the claims commission, and then to come back to the legislature and, you know, out in the private sector at some point after the passage of time, there would be no liability any further to have to honor the payment. And so I would be curious as to the justification,
and there may be very good justification, but I'd just like to understand more about how we handle these, particularly when there have been a
Speaker 38
27:58
number of years that have passed. Yes, sir, Mr. Speaker. So certainly these loss warrants pertain to refunds of corporation income tax. So when a taxpayer is in a position where they have filed a return, where they they are due a refund of an overpayment of tax, we certainly want to get that refund back to the taxpayer as the refund is approved during our processes so that the taxpayer can receive
those funds and deposit them in the account. The taxpayer does have the ability to get a refund, and most taxpayers do receive their refund electronically so that it can be deposited into their bank account without the need for a check being issued and then being placed in the mail and then having another physical person open that document and deposit it into their bank account. But certainly we understand that some organizations can be very large organizations.
They might be receiving tens of thousands, hundreds of thousands, or even more different checks through their accounting departments on an annual basis. And certainly a check for $6 million and $2 million would be something that they certainly would want to be looking for making sure that they had received and processed. But as Ms. Irby had stated, there is not a specific deadline in Arkansas law that requires an application for a loss warrant to be reproduced.
Certainly, I understand five years, that is a long time. We have no objection whatsoever to having the warrants reissued as to these two particular loss warrants or any of the others that are on this agenda for today, but certainly we do understand the practicalities of that if a warrant was lost and uncashed past the 180-day period that exists in law and several decades had passed and an application for a lost warrant was made with us, we certainly
at some point we're not going to be able to really do the research based upon the information that we have on the claims that are on the agenda today, we can certainly do the research and make sure that warrant has not been cashed. But we're just abiding by the ability of a taxpayer under Arkansas law that's owed a refund. We've issued the payment, but it has not gone through the system to be cashed. The warrant became stale and uncashable after a 180-day period, and the taxpayer's following the appropriate process
to get their tax refund.
Representative Matthew J. Shepherd
Unverified
30:31
Could I have a follow-up? Yes, sir. And perhaps, given that it's a refund, it's a different situation than if it were a warrant that was issued as payment for contracting services. And again, particularly when it comes to refunds, I want to make sure that money gets out to taxpayers. With a refund, if those funds are never actually deposited by an entity or an individual,
eventually would that then go over to the treasurer's office to handle an unclaimed property? Or what happens to those refund amounts if they're never actually deposited? The refund would then have to
Speaker 38
31:16
go through this current process in order to get for the taxpayer to make a claim to receive their
Speaker 121
31:22
money it would not go over to the treasurer for purposes of lost property
Representative Matthew J. Shepherd
Unverified
31:28
what does dfna continue to maintain
i mean it seems to me as the passage of time that that we have eight these two claims in particular eight million dollars is is that something that ever ever rolls off the books i mean my understanding is this was initiated by the department is that correct that the department noted this and maybe this is maybe this is the process that the department is trying to clean up the books so to speak I guess I'm just wondering about what that process looks like if if these warrants are not
deposited what happens is are you going to continue to maintain eight million dollars that's just sitting in the state Treasury that at some point you're going to go through this
Speaker 38
32:16
process again. Well, and quite often what occurs for practical purposes is that the taxpayer or in circumstance of a vendor, they are expecting the payment. We're showing that the payment has been sent and we have the warrant information that the payment's been sent. And then after that passage
of time of the 180 days that the warrant has become stale, the only process that's available is to seek by filing a claim with the Claims Commission in order to get the warrant reissued. But the process is not initiated by the department per se, but there are conversations that occur between department personnel and the taxpayer or the particular vendor where we are trying to find a way to make sure that the taxpayer gets or the vendor gets the money that they're
owed, but for because a warrant was issued, not cashed, placed in the mail, possibly lost in the mail, possibly lost at the recipient's place of business, possibly misdirected. But we have to have a good faith conversation with whoever's owed the money, and then we point them in the right direction so that they can file a claim with the Claims Commission and have the lost warrant reissued. Now, I would have to get some more information as to the number of lost warrants
or uncash warrants. I'd be happy to provide that information to the committee to see if we can have some type of report prepared that we can share, but I wouldn't be able to speak to that right
Representative Matthew J. Shepherd
Unverified
33:52
now. I just don't have that information in front of me. I would like that. I would like if the department, if you're telling me that monies that are to be refunded that ultimately are not either directly deposited or are maybe they're issued by way of warrant that are never actually cashed. I would like a report as to how much is outstanding and maybe if you could do it
on an aging basis. I mean, clearly things that are within the last several years, we expect that those will be resolved. But in this instance, we have what, two or three years, three years, I guess, 2021. We have another one that's at least five years old. I can only imagine that there are others, but from what you're telling me, those funds are never transferred over to unclaimed property. They're just held by the department, and so I'm just curious what that looks like and what the aging basis is for those accounts or for those funds that are payable.
Yes, sir. I don't have an issue with really any of these, just more of a question about kind of the protocol, because these are two, these are fairly more sizable than what we normally see in this process. Yes, sir. We
Speaker 126
34:57
will work to get that information prepared and provided to the subcommittee. Mr. Gehring, will you please just get that information to Ms.
Lacey and she'll get it out to, I mean, sorry, Ms. Johnson, Ms. Johnson, and then she'll get
it all out to us. Certainly will. Thank you, Madam Chair. Representative Gasway, you recognized.
Representative Jimmy Gazaway
Unverified
35:19
Thank you, Madam Chair. I asked this earlier, but, and I mean this sincerely, were they calling about their $8 million for the last five years or for the last three years since
Speaker 38
35:36
2021? Southwestern Bell? The taxpayer did reach out to the corporate income tax section, and the corporate income tax section, in their conversations, directed the taxpayer to pursue this process by filing a claim with the Claims Commission.
But I just don't have a diary of the information other than what's provided in the subcommittee's packet. I appreciate that. I
Representative Jimmy Gazaway
Unverified
35:56
mean, I think it's one thing if they just didn't care if they got their $6 million check and their $2 million check and just forgot about it. It's another thing if they're calling for it, because if you're holding $6 million of somebody else's money, that's a lot of interest over five years. $2 million would amount to a lot of interest over three years if they wanted it and couldn't get it.
So it's another thing if they just really didn't care and didn't even know they were missing $8 million. So I'm just kind of interested to know what the facts might be surrounding that. But I suppose that's all not really the issue today because I'm certainly in favor of giving them their
money back. But I do find it interesting that it's taken that long to get them
Speaker 38
36:47
$6 million and $2 million respectively. And I certainly agree, Representative, that, you know, especially with amounts that are $6 million and $2 million in a refund, that typically, ordinarily, in our experience, would get a lot of attention rather quickly.
So when they're, you know, we're aware, we certainly want to direct the taxpayer to filing the claim to make sure that they can get their request for refund process by the claims commission and then submit it over to this subcommittee so that it can be reviewed and approved and then to get their money as quickly as possible. But certainly, I can certainly see, I don't know all the individual circumstances regarding this taxpayer and the work that went on trying to track down this money by the company. But I certainly can see that this is, I would say
that this is a longer period of time to request and go through the process than we ordinarily would see.
Senator Gary Stubblefield
Unverified
37:49
Senator Stubberfield, you're recognized. Thank you, Madam Chair. Mr. Gensway, that's more money than you owe me.
You know that. Do we still have what I remember when I was growing up as a statute of limitations? Do we still practice that?
Speaker 38
38:06
It's great. As per the previous discussions that we don't have a statute in Arkansas that says that for a loss warrant, that's a tax warrant that you're unable to go through this process after a certain period of time. Right. We do not have an existing statute at all for a lost warrant for an income tax or other tax refund. What is that period of time? We don't have one. We don't even have one. That's right. That's correct.
interesting. Yeah. Huh? Yeah. Yeah. I need one. Thank you, Madam Chair. Are there any other questions? Seeing no other questions, do I have a motion to review?
Motion and a second. Is there any discussion? Seeing no discussion, everyone in favor
Speaker 67
39:05
say aye. Opposed, no. Motion carries. Ms. Johnson. Item D6 is claim number 240919, GNC Theraldson Dynasty Trust 2,
for benefit of Bobby Joe Theraldson versus Arkansas Department of Finance and Administration. The claimant requested reissuance of an outdated warrant in the amount of $19,204.34, payable from the Arkansas Department of Finance and Administration. The warrant is still outstanding. No duplicate has been issued. The Claims Commission allowed the claim and referred it for review and placement on an appropriation bill. Ms. Murphy, would you like to add anything? No, ma'am. Happy to take any questions.
Are there any questions? Seeing no questions, is there a motion to review?
Motion and a second. Any discussion? All in favor say aye. Aye. Opposed, no.
Motion carries. Now we'll move on to... Oh, no, there's another one. I'm sorry. Ms. Johnson. Item
Speaker 67
40:00
D7 is a salary correction. This is claim number 241437, Alyssa Christine Burns versus University of Arkansas for Medical Sciences. The claimant filed requesting salary due in the amount of $20,030.05.
sense. Respondent filed an answer admitting liability in full. The Claims Commission allowed the claim and referred it for review and placement on an appropriation bill.
Ms. Arby would you like to add anything? No happy to take questions. Are there any questions? Seeing no questions do I have a motion to review? A
motion second? Got a second. Is there any discussion? All in favor say aye. Aye. Opposed, no. Motion
carries. Now we'll move on to E, which is one awarded claims that was
appealed by the claimant. Ms. Johnson, please give us a brief
Speaker 67
40:54
description of the claim. Claim E1 is claim number 220317, Davey Rhine doing business as Davey's Auto Body and Sales versus prosecuting attorney for the 14th Judicial District. The claimant sought $85,616.01 plus additional storage fees in damages relating to towing and storage services he provided for four vehicles seized pending a forfeiture proceeding.
Three of the vehicles were eventually released to their owners while the fourth was forfeited to the respondent and remained at the claimant's facility. Claimant alleged that he was due payment from the asset forfeiture fund for expenses of seizure and maintenance of custody pendant to a proceeding for forfeiture and sale. Alternatively, claimant alleged unjust enrichment. Respondent denied liability and moved to dismiss the claim. Following a hearing, the Claims Commission found that respondent was negligent in failing to retrieve the forfeited vehicle from claimant's facility
and it awarded claimant $7,000 representing the value of that vehicle. The Commission denied claimant's claim as it related to the other three vehicles, stating it was claimant's responsibility to determine what the vehicle's owners owed him at the time of pickup and that claimant's failure to collect payment from the owners did not shift liability to respondent. Claimant appeals. Ms. Erby, would you like to add? No, but
Does anyone have any questions? Representative, or Speaker Shepard So this
Representative Matthew J. Shepherd
Unverified
42:34
is an appeal by the claimant of the Claims Commission's award? Yes Is the claimant here? Yes, sir Okay, I assume
Speaker 158
42:40
he would have an opportunity to Would the claimant please
come to the table and introduce yourself for the record?
Representative Jeremy Wooldridge
Unverified
42:58
Aaron Martin, attorney for the claimant. Dave, you're
on. Do you have a prepared statement? It's our position that under statute, so basically my client was directed
by law enforcement to tow and store four vehicles. These vehicles were under forfeiture and sat on his lot for over a year. The statute in our position clearly states that the respondent is liable to pay for the towing and storage fees.
That amounts to about $85,000. And just so the committee knows that he's referring to statute 564-505. Are there questions? Senator King, you're recognized. So you've
Senator Bryan King
Unverified
43:58
stored these vehicles for a year? Is that what you're saying? I mean, is this in line
with what other vehicles you would be storing that you would charge? I mean, it seems like a lot
Representative Jeremy Wooldridge
Unverified
44:11
of money. These are posted charges. They were on hold for a year because the respondent, these were these were vehicles that were seized in a drug sale, okay? And so they left and they remained on the lot for over a year the respondent was trying to seek forfeiture of these four vehicles so they were on hold you couldn't do anything with them for over a year until they were finally released but the charge and the amount was the posted charge the same amount he would charge
Senator Bryan King
Unverified
44:36
anybody else so what's your response that he was just charging what uh he would anybody else what and then you only awarded seven thousand so where's the discrepancy if he's if he
Speaker 175
44:53
is in fact doing that? So the Commission found that as to three of the vehicles, the 2010 truck, the Honda ATV and the Pioneer, the Commission found that it could not award damages for those and it for the reasons stated in paragraph 92 of its
order and including that the 2010 truck and the Honda ATV were released to their owner for $300.63, and the commission found that it was incumbent upon the claimant to know or to learn what, if anything, the owners of those vehicles were required to pay for storage when picking up the vehicle. And so the fact, to the extent that those owners were liable for storage fees, the commission found that claimant's failure to collect those amounts from those owners did not
Senator Mark Johnson
Unverified
45:45
shift the liability to respondent to pay. And as to the 2009 truck, the commission found that claimant could have mitigated his damages, but that respondent was negligent in failing to collect the 2009 truck, that it
Speaker 175
46:02
could have collected it sooner than what it did. And alternatively found that respondent was unjustly enriched in the amount of $7,000 based on claimant storage of the vehicle. So that's how the commission arrived at its amount was the what was its
determination of the reasonable value of the vehicle.
Senator Bryan King
Unverified
46:24
So three of these people didn't take care of their responsibilities vehicles my understanding this right is in only
Speaker 175
46:29
one of the vehicles was forfeited to the state and the other three vehicles were released to their owners. Okay and
Senator Bryan King
Unverified
46:36
they they were paid an amount that was reasonable is that what you're saying I mean the lawyer part that was handled in accordance it would for somebody else out here for
Speaker 179
46:51
those three just to clarify so there are four vehicles and the respondent did forfeit and seize one of the
Representative Jeremy Wooldridge
Unverified
46:58
vehicles the other vehicles one of them was actually owned by somebody else and then the other two vehicles were released back to the owner however it's our position that the fact that the claimant did release these vehicles to the owner as directed it does not release the respondent
from their obligation under the statute to pay for these costs for the towing and storage. So you're disagreeing on the statute and
Senator Bryan King
Unverified
47:20
how to interpret it? Is that right? No, I think the statute's very clear. Okay.
Representative Jeremy Wooldridge
Unverified
47:33
So reading into the record 564-505 says that monies in the asset forfeiture fund shall be distributed, subsection 2, for the payment for the proper expenses of seizure and maintenance of custody. And that's our position. So is there any other fairer amount that you
Senator Bryan King
Unverified
47:53
feel like would be settled in the $7,000? You got $7,000, right? Yes, sir. They awarded $7,000. Okay.
I mean, there seems like it would be a big difference from not knowing the whole story. And what year did this start in?
Representative Jeremy Wooldridge
Unverified
48:15
I mean, this started several years ago, right? Long time ago. So this began in 2017, and the
vehicles were finally released under the forfeiture in 2019. Okay. And, in fact, the 2009 truck that was forfeited to the respondent is still on his lot. Okay. Now,
Senator Bryan King
Unverified
48:32
what's his recourse? I'm not up on this.
It's been a while since I sat on transportation. What's his recourse with
Representative Jeremy Wooldridge
Unverified
48:42
that remaining vehicle? the ownership is under dispute the respondents submitted a letter saying that they had given that vehicle to sheriff wheeler at the hearing mr wheeler sheriff wheeler had no idea that he had been given ownership for this vehicle so there's a question about who actually owns this vehicle that's still sitting on his lot and so
Senator Bryan King
Unverified
49:03
this happened if i remember it happened with the
previous sheriff? I think sheriff, probably Slape. Sheriff Slape was in when this
originally happened. Okay. Senator Dotson, you're recognized. Thank you,
Madam Chair. Forgive me for not knowing exactly what happens when a vehicle's abandoned on a lot, but what's the normal course if someone doesn't show up, pick up their vehicle after, I don't know, a period of time. What's the period of time? Is it
90 days, 180 days, two years, five years? And is it considered abandoned at that time and then you just sell it for scrap or whatever you want? Is the ownership transferred to the lot owner at that time typically? Yes, sir. I'll let my
Representative Jeremy Wooldridge
Unverified
50:01
client answer the rest of that question. But it's our position. So
So these four vehicles, it wasn't an unusual situation where they were just abandoned and he towed the vehicles. These were four vehicles that law enforcement directed him to tow and store at his storage facility.
And they sat waiting forfeiture for over a year. But under a different circumstance, Mr. Ryan can explain how that
Speaker 199
50:25
usually happens. Under a different circumstance, typically we would hold it 45 days. um sending notice to the owner twice uh during that process after 45 days if it's not planned then we would uh sell the vehicle this case is different because the vehicles had a whole obviously a law enforcement hold on so
Speaker 201
50:48
we could not we did the notification process but however
we could not dispose of the property because of the uh the other side of the case so
Speaker 202
50:57
since there There was a whole lot of, I can't sell it, I can't do nothing with it. I've just
been storing it and paying insurance on it all these
years. So typically after a 45-day period, so if at the end of the forfeiture, at that point in time, that 45 days theoretically would have started on those three vehicles that were released back to their owners, if they hadn't come and picked those up you could have disposed to those at that time for
Speaker 199
51:35
that the other vehicles were also had the law enforcement hold as well and the and when they finished their case they just had awarded them other vehicles back to the the person
Speaker 201
51:46
that they seized them from and so they're not that that person was liable for the tow charges, but obviously was not liable for the storage charges. So we collected the tow charges from the suspect or whatever you want to call it, from the person that they
took from, but we did not collect the storage charges because they're not the ones liable as the statute
Representative Jeremy Wooldridge
Unverified
52:10
reads. And I think your question, your question is once we determine ownership of these vehicles, then we start the time frame to then sell it. And yes, I
would agree with that. Okay. Thank you. Senator McKee,
Chair
Unverified
52:30
you're recognized. Senator Johnson. So you said it was
Senator Matt McKee
Unverified
52:34
on hold. Is that right? Yes, sir. So when did you know
Representative Jimmy Gazaway
Unverified
52:42
that was on hold? Just as soon as we picked
Speaker 212
52:46
up the vehicles, they were on hold for the court process. Okay. When did you send your first bill to the
Speaker 201
52:57
sheriff's department? Not for some time. We don't typically, we did not. This is an unusual situation because usually they forfeited vehicles we don't store. So we didn't
send them a bill until uh sometime into this case has been going for many years so i don't remember um i'd have to look back
Speaker 208
53:20
i don't remember the date that they received the first bill
Representative Jeremy Wooldridge
Unverified
53:24
to help answer that question so they filed a complaint which is exhibit a this was december 14th of 2017 so this is about two months after these vehicles were stored respondent filed a lawsuit to acquire these four vehicles. And that was not resolved until January 17th of 2019, when the respondent
and the property owner entered into an agreed order on which property you
received. So he filed the claim before he ever sent the bill? Oh,
no, sir. Different people. So the respondent, the prosecuting attorney's office, filed a complaint December 14th of 2017, seeking ownership of these four vehicles. So at that point, my client could not sell these vehicles because the prosecuting attorney was looking to obtain and then sell these vehicles later.
That issue on who owned these and if these vehicles were going to be forfeited wasn't resolved until over a year later on January 17th of 2019. After that, my client sent his first invoice March. March of 2019, March 12th of 2019. So two months after they finally resolved who would be owning these vehicles.
Senator Mark Johnson
Unverified
54:49
So approximately 60 days, the prosecuting attorney
Speaker 76
54:52
filed a claim trying to get ownership. of the property 60 days which typically the 40 45 days he can do what he wants to with the property except it was on hold and the prosecuting attorneys after 60
Senator Mark Johnson
Unverified
55:12
days tried to try to get ownership of the property correct so yes October is
Speaker 208
55:22
when the vehicles were seized and then December is when they filed an official complaint to seek ownership of those vehicles. Okay. Are you
good, Senator? Senator King, you're recognized. So
Senator Bryan King
Unverified
55:40
it's fair to say because of the court case, and I mean, this is unusual, but
that it went this long. Did it take that long to try the case and plead and for that to go
through the process you had to wait until you knew what that process was first
basically yes sir yeah so does these funds come out of the 14th judicial district or are they from the state so this is basically between you
Representative Jeremy Wooldridge
Unverified
56:09
and the 14th judicial district is what yes sir so the prosecuting attorney again has the authority to seize
these vehicles and then if they get them through forfeiture they can then sell these at auction i don't know if you guys ever seen those auctions where we can go and look and stuff. The proceeds from those sales go into the prosecuting attorney's separate asset forfeiture fund.
That's what we are directing payment to come from, as directed by the statute. How
Senator Bryan King
Unverified
56:35
long have you been in business up there doing this? 32 years. Have you run across this case kind of thing, situation before? No, sir. This is the first time, hopefully the last. So it'd almost make you not want to do this
Speaker 198
56:52
process again? I very much support law enforcement, and I was definitely happy to tell them, but I no way
Speaker 201
56:57
in the world would want to store them and be liable for them and responsible for them.
And again, I would tell them for them to their facility, but not to mine. Does the
Senator Bryan King
Unverified
57:09
claims, I mean, I was sitting on claims, it's been a few years since I, Have we seen a case like this before and seen a discrepancy of what in the time period, or have you seen these things before in this situation? I've been at the
Catherine Irby
Unverified
57:20
commission eight years, and I'm not aware of anything else that's similar to this. Certainly not in my eight years, but I'm not aware of anything else prior that is previous to that was filed with the claims commission. This is an unusual one for sure.
Senator Bryan King
Unverified
57:34
And it's just the amount that he is requesting versus that you have a hang-up on? You feel like, obviously, an union awarded something, but this is just too much of an amount. It's basically the amount
Catherine Irby
Unverified
57:46
that you're... Well, and I'm just a spokesperson for
Senator Mark Johnson
Unverified
57:49
the commission. I did not make this decision. But the commission disagreed that the full amount of the $85,000 sought by, well, I don't think that was the total amount, but they did not agree that the full amount was what the claimant was entitled to and instead felt that the reasonable value of the vehicle
Senator Bryan King
Unverified
58:08
was a better measure of damages in this case. So basically kind of the same process it would go through
Senator Mark Johnson
Unverified
58:20
if they weren't paying their storage fee. Is that what you're saying? They elected not to utilize the measure of damages being the amount of time, the per day storage fee, and focused instead on the reasonable value of the vehicle. Now, I will say that prior to the claim hearing,
or immediately following the claim hearing, the commission asked the parties to get together and discuss saying that this was an unusual, difficult case and that it was unlikely that either party was going to be fully satisfied by the commission's decision. And it asked the parties to visit and try to work out a resolution to this matter. And I think the parties did attempt to do that, but were unable to come to an agreed amount. And so it went to the commission for decision and the $7,000 in damages
Speaker 175
59:08
is what the commission ultimately decided based on negligence and
alternatively on an unjust enrichment theory. Do you
Senator Bryan King
Unverified
59:17
have any, 32 years, do you have vehicles on your lot or anything that you've had this long? Have you had to store vehicles for any reason at
Speaker 201
59:31
this amount of time? Okay. No, sir. I've never had a vehicle stored this long. And again, there's just
Speaker 199
59:39
some issues here with storing something this long, you know, and being liable
for it. This has never happened in the past at
Speaker 201
59:46
all. It's very unusual. And if you store
Senator Bryan King
Unverified
59:49
a vehicle for two years, and let's say we've had storm damage come through a limb or a tree fall on these vehicles, then the next thing you know, that's on
Speaker 201
59:57
you, right? Yes, sir. That's correct. The way insurance, our insurance works is we would, we had to turn claim into our insurance.
Speaker 199
1:00:04
We would be responsible for the first thousand dollars and then the insurance company would pick up the balance. Senator King, can I cut you off? Yes, you
can. I've got five in and you can go back.
Representative Matthew J. Shepherd
Unverified
1:00:18
Speaker Shepard, you're recognized. Is there anyone from the Attorney General's office that's hear, I mean,
Speaker 243
1:00:28
I'd like to hear their response. Jay
Speaker 244
1:00:31
Gerard on the counsel for the respondent matter. So,
Representative Matthew J. Shepherd
Unverified
1:00:37
I guess I have just generally kind of a question as I look through the summary the Claims Commission provided and look through the order from the Claims Commission.
So, this originated with the seizure of vehicles back in 2017. There were four vehicles seized. They were towed and then stored at the claimant's facility. In 2019, three of the vehicles were ultimately released. I guess there was some determination or agreement that they were not subject to forfeiture, but that left one. It appears the commission's decision in part, well, let me back up. The claim sought is for $152,000.
It was $85,616 plus additional storage fees, and based on what the commission had provided, that totaled $152,000. And so these three vehicles, it appears the commission's decision was that for the three that were released, they believed that the claimant should have gotten payment from the owners of those vehicles at the point in time that they picked up the vehicles. On the 4th, that was still subject to the forfeiture, and there was some question about ownership, ultimately they awarded $7,000 for the unjust enrichment, which was apparently what they believed the charge should be between the 2019 order and the 2000, apparently in 21 is when there was this transfer of ownership,
supposed transfer of ownership between the prosecutor's office and the sheriff's office. So is that the position of the respondent as well? I mean, I saw the respondent move to dismiss. Obviously, that was not successful, but overall, I mean, the award was only $7,000. So is there anything that the respondent would add to this that you feel like the committee needs to hear? Before you answer, we need you to say
your name and who you're with with the microphone on.
Speaker 248
1:02:49
Thank you. So I'm Assistant Attorney General Jay Girard. I'm the counsel for respondent in this matter. And my characterization, at least my interpretation of the Claims Commission's decision is that they awarded this amount because it represents the Blue Book value of the 2009 Chevy, which is a position we agree with. And as Senator King and others alluded to earlier, that is the maximum amount that Mr. Rine could receive at auction if he went through the proper channels of securing a lien or in the usual circumstance a vehicle is abandoned at his lot.
So we feel that is a proper amount. And just going back to some earlier points, yes, these vehicles were seized in October of 2017. but the first invoice was not sent until March 12th, 2019, and the very first invoice requested over $21,000 labeled as a voluntary discount, but claimant contends that the amount owed at that time was over $85,000, and that is the very first invoice received by the sheriff's office,
And I might add that we do not represent the Sheriff's Office. The claim was actually filed against the Prosecuting Attorney's Office. So they actually never received an invoice in this
Representative Matthew J. Shepherd
Unverified
1:04:25
matter. Yes, sir. You're recognized. Two quick questions. So the
prosecuting attorney's office, they defended this through the attorney general's office?
Were they actively defending this, and are they here today? And then secondly, whatever monies might be awarded in this case, who actually, where does that money come from? Is that money that, it apparently comes from this asset forfeiture fund, but is that fund maintained by the state, or is that a fund that is specific to that judicial district's prosecuting attorney's office? That's a
Speaker 248
1:05:03
great question, Speaker. Our position is actually
that they are not state funds and that there are funds accrued from within a political subdivision of the state, and that's the basis we move for motion and dismiss for lack of jurisdiction in this case. But it is correct that that is the source of the relief in
Speaker 248
1:05:30
prosecutor's office. Correct. They the funds are accrued through for example seizure and sale vehicles and other
Speaker 249
1:05:37
asset forfeiture matters and within that district that I believe
Chair
Unverified
1:05:41
tri-county area. Are you good Mr. Speaker? Representative
Representative Jimmy Gazaway
Unverified
1:05:56
Gasway you're recognized. No question. Senator Dotson. Thank you, Madam Chair.
So you raised a couple of questions on my list, just as far as how you came about with the $7,000 value. You said it was the Blue Book value. Was that the 2017, 2019, or 2024 Blue Book value of the vehicle?
Speaker 175
1:06:19
I'll go ahead. Oh, the commission used the current Blue Book, well, current as of the time of the entry of the order, current Blue Book value of that 2009 truck, a 2009 truck, and that order was entered in March of
this year. March of this year. So 2024, I don't know, values of vehicles have kind of gone down quite a bit over the course of five years' time frame. um well the cost of vehicles some of them have gone up and down but at 20 2009 and 2019 is
probably worth more than in 2024 um the other thing that i had let's see and that was just for one vehicle
right not for all four vehicles correct the commission found
Senator Mark Johnson
Unverified
1:07:11
that it would only award damages based upon the 2009 truck. It found that it could not award damages based on the 2010 truck or two of the
Speaker 63
1:07:24
Honda ATV or another ATV-type vehicle, the Pioneer.
Okay. And then just as far as, you know, costs for storage, like obviously i don't know that the normal rates that are posted rates are are what we're really talking about here as far as the that that that total 152 800 original amount there but what what was the actual cost or loss of use of your lot that you experienced for not being
able to store other vehicles because this this one was in place and then you mentioned insurance costs? What were the increased insurance costs that were actual, you know, financial losses
Speaker 201
1:08:12
to your business? Well, the insurance cost is something that our
Speaker 199
1:08:17
business pays. It's something that we do because we're charging the storage for those vehicles. The rate that this has figured out was $40 a day. Today's current rate, and has been for quite some time, is $60 a day storage,
and i think that's pretty standard across the state but
Speaker 262
1:08:33
this bill is figured at 40 a day instead of 60 because that's when this bill originated
okay 40 a day but i mean as far as did you lose business because this was on your lot taking up space yes
Speaker 240
1:08:48
i i lost i lost the use of the space that it was in you know it was
Speaker 201
1:08:54
four different pieces you know so that would have been a place to put four different cars, you know. So obviously there's
some loss. So you're at capacity and you
Speaker 201
1:09:03
had no vacancy for? There's some vacancy, but our lots change from, you know, daily. We never know how much and there's times where we are at full capacity and have to make other arrangements. Okay. Thank you.
Senator McKee, did you have a question? You're recognized.
Senator Matt McKee
Unverified
1:09:21
Thank you, Madam Chair. What is the longest period of time that you can remember other than this situation that you've stored
Speaker 201
1:09:30
a vehicle for law enforcement? That's a great question. For law enforcement, typically we don't store them. We take them to their facilities.
However, at this time, their facility was full and they requested us to store
Senator Matt McKee
Unverified
1:09:41
it at ours. So do you have any examples of other incidents where you stored vehicles at their
Speaker 201
1:09:47
request? Not. We're on a daily rotation, so we'll store um you know somebody gets a dw irs or
Speaker 199
1:09:54
an accident or something we'll tow we tow at the request and typically that's handled the normal way which would be which would be afford you know notify them twice 45 days sale date so on and so forth unless there's a law enforcement hold
Speaker 201
1:10:09
when law enforcement holds the place on the vehicle i have no legal right to do
Senator Matt McKee
Unverified
1:10:15
nothing with that vehicle does the prosecutor's office normally pay
Speaker 267
1:10:17
you for your services when you offer when you render them? Typically, we donate
Speaker 199
1:10:23
our towing services. We do not donate storage because obviously there's cost and there's risk, a lot more risk involved for a significant amount of time. I mean, it's totally different than going and towing somebody's car and having it on there for
Speaker 262
1:10:35
30, 45 minutes. We try and donate that time to give back to the community.
Senator Matt McKee
Unverified
1:10:42
Do you see yourself continuing that relationship with your
Speaker 199
1:10:48
local law enforcement? Absolutely. I have no bias. I'm very supportive of my law enforcement. I still work for them. I do a lot of work.
Speaker 201
1:11:00
Our business actually outfits police cars. We take brand new cars and we fill all the equipment in them. We're very pro-law enforcement.
Speaker 199
1:11:11
This is just an unusual situation where I've stored these four vehicles,
and I'm simply just a small business guy, and I just won't pay for what we've done. Do you expect that had
Senator Matt McKee
Unverified
1:11:24
you stored the vehicles for one or two months and presented them a bill, they would have paid it, no problems asked? Or, I mean, is this a situation where you think they didn't want to be responsible for any payment, or is it just because they messed around and left those vehicles for there so long they just don't want to pay you?
Speaker 201
1:11:49
That's a good question. I don't really know how to answer that. I don't know. I do not think they intentionally meant to make me do without, in other words. But, however, that has been the case. You know, and again, the rate's about half of what it is, almost half of what it is today, what we was asking for. We offered to settle this, you know, for about 25% of the bill at the time, and with no resolve, not even an offer.
And now we're out, you know, legal counsel to try and just recover a simple debt, and it shouldn't have gone this far. you know there should have
been some good face thank you
Representative Rick Beck
Unverified
1:12:42
representative beck you're recognized thank you madam chair uh just a quick questions so you you
talked about the insurance aspect of the cars and you're liable for them like if you had 10 cars on your lot that you were storing versus 15 cars would your insurance go higher because you had those additional five cars or
Or do you pay like a flat rate for
Speaker 201
1:13:08
the cars on your lot? That's a great question. I'm really
Speaker 199
1:13:12
unsure of the answer because we have several different insurance carriers that cover different parts of our business. And I'm not 100% clear on how the pricing structure is. I do know that it
Speaker 201
1:13:23
has to do with every year our rates change because of profit and losses and what we've done. And I do know they look at our records. But I'm unsure of what determining factors they use for that.
Representative Rick Beck
Unverified
1:13:37
Okay, thank you. Madam, another question? You're right. All right. So, and I'm just, and I'm not a lawyer. So, we had a claim in here a year or two ago that was related to, but it was related to 18-wheelers. And basically the complaint was is that 18-wheelers were being towed in and they were not being released until all the fees were paid on those vehicles. So my question is, is when these other three people, I'm guessing, came and got their vehicles,
did we ever approach that like, hey, you can't have your vehicle until you pay the storage
Speaker 201
1:14:17
on these? Yes, sir. That topic was approached, and I was told that the bill would be paid. And that one way or
Speaker 199
1:14:24
another, they'd take care of the bill to go ahead and release them. If I didn't release them, they was going to see about a court order to get them released. So we went ahead and released
Representative Rick Beck
Unverified
1:14:35
them and chose to work with them. So someone with the state, the prosecuting attorney or someone told you that they would pay the storage fees
if you released those cars to their owners? Yes.
Speaker 248
1:14:49
I may clarify here that I think Mr. Ryan would agree this is a conversation he actually had with
Speaker 284
1:15:04
the sheriff and not the prosecuting attorney's office. that
Speaker 76
1:15:11
was pretty much my question is whenever that was released
how come you didn't go after the storage just like you did with the towing i
Speaker 262
1:15:23
i have i have tried to get them in good faith to pay the storage bill the
Speaker 199
1:15:29
whole thing the reason and I didn't go after them, I was told by law enforcement that they were not responsible for the storage charges,
Speaker 201
1:15:37
that the person that they seized them from was not responsible for those charges, that they were and they would make it right.
Representative Jimmy Gazaway
Unverified
1:15:47
All right, thank you. Senator Dotson, you're recognized. um
uh thank you madam chair i forgot exactly what i was going to ask but do
do we know how many days from the time you you picked up the vehicles and i i forgot to write down what the date that was till march 12 2019 was the date that it was declared finished how many days that is
Speaker 208
1:16:21
So he said the date that it was finished. I think you're referencing the date that the parties, the respondent, and the property owner finally came to an agreement. That would have been January 17th of 2019. The first invoice sent was that March
Representative Jimmy Gazaway
Unverified
1:16:42
12th, 2019 date. So it's
Speaker 208
1:16:45
January which day? Yes, sir. So January 17th of 2019 was when the vehicles...
And they were picked up October
Representative Jimmy Gazaway
Unverified
1:16:55
17th? And they were picked up October
Speaker 208
1:16:58
17th? They were originally picked up by the claim in October 2017. Okay. So I'll try to figure out roughly
how many days that is times $40 a day. Thanks. You're recognized. Oh, yeah, I would
Speaker 248
1:17:14
like to add that, and as Mr. Ryan alluded to earlier, and it's in the record through affidavit that he normally doesn't get paid and doesn't expect to get paid for this service.
And so that is the normal course of business, yet the first time that the sheriff receives a bill, it's for over $21,000. You know, and I believe there's a question earlier, if this had been brought up sooner for a reasonable amount, I do believe that this could have been resolved much quicker. And the service that you're
talking about that he wasn't expecting to get paid for is the towing, not the storing, correct?
Speaker 248
1:17:56
That, I would have to look back at the affidavit. I believe it's under normal circumstances, and I do agree that these are unusual circumstances, Under normal circumstances, I believe there is towing and maybe a couple of days storage sometimes. To answer that, the
Representative Jeremy Wooldridge
Unverified
1:18:12
claimant testified previously. He tries to do good. He tries to help out his community, and he doesn't
Speaker 298
1:18:17
always charge people for services. And we just hope that doesn't go against him.
And it is for the tow. That's what's in the documentation is he's not expecting to get paid from the sheriff's office for the towing, but nothing was
said about the storing. Representative Gasway, you're recognized.
Representative Jimmy Gazaway
Unverified
1:18:48
Thank you, Madam Chair. So, you know, I look at this claim and it's, I mean, you're asking for over $100,000, $152,000. And I understand that $85,600 and then $152,850 all for a vehicle just sitting on your lot is basically what the claim is for.
And, you know, I understand how this works. I've seen this in instances where vehicles are towed because, you know, they're illegally parked or whatever the case may be. And then, you know, they're taken to a storage lot and they're essentially held hostage there. and then the the storage owner just you can pretty much demand whatever you want $100 a day $60 a day $40 a day whatever it may be and then you come up to these what I would call just an absolutely absurd exorbitant bill of $150,000 for a vehicle simply sitting on your lot and the
justification for that is well we had to pay insurance on it well I would guess that you have an insurance policy that covers all the vehicles that are sitting on your lot. Is that how that works? Yes, we have adequate insurance. Okay. And that's for all the vehicles on your lot.
You don't have to insure them individually. We have
adequate insurance. That's not my question. You have insurance for all the vehicles on your lot, not each individual vehicle. Yes, we have
Speaker 302
1:20:12
insurance for all the vehicles we store. Okay. And
Speaker 267
1:20:17
how big is your lot i'm i'm unsure of the exact size about uh i believe it's about 70 by 70 okay how many cars does it hold roughly roughly 20 25 okay and where is this located in harrison arkansas saw how many other storage lots are there in harrison there's nine other tow companies okay
Representative Jimmy Gazaway
Unverified
1:20:57
so how full does your lot stay on average pretty full but not not completely full then if it's pretty full then it's not completely full
Speaker 309
1:21:14
is that right uh no sometimes it's not completely full okay all right
Representative Jimmy Gazaway
Unverified
1:21:23
and so you you think that what is fair and just in this case is to bill
40 every single day you think that that is a fair amount 40 every day for a vehicle to simply sit on your lot. You think that's fair? Absolutely,
Speaker 201
1:21:42
100%. It's not even up to fair market standards of today.
Speaker 199
1:21:47
And at that time, our rates are submitted to Arkansas State Police. Arkansas State Police reviews our rates. They have to approve our rates, that our rates are fair and just. We are not by no
means trying to do anything negative or to any of our citizens of the state. This is an unused case. this could have been mediated had they chose to a lot sooner. Their delay in payment is the reason this bill is
Speaker 201
1:22:14
like this. I see. Okay. Thank you. Senator King, did you
have a question? No more questions? So when you have a
Speaker 313
1:22:27
vehicle and it's in your lot, no one shows up to pay for it,
Senator Bryan King
Unverified
1:22:32
and you have this recourse, is there any difference between if you're doing a 2022 Cadillac Escalade versus a 2002, you know, or a Pinto? I mean, I'm giving extremes, but I'm trying to say how's both of them handled and what happens, and your point? That's a great question. we
Speaker 198
1:22:57
don't know it the you can't charge people on the bias of their means you can't charge
Senator Bryan King
Unverified
1:23:04
somebody i'm talking about if they don't pay and then you you get possession of the vehicle or whatever happens after so many days what what is the
Speaker 199
1:23:13
you know the after the 45 days we put them up for public bid hoping people will be usually that's not the case and they wind up going to the crusher is usually what winds up happening with them you know
Speaker 201
1:23:24
if if vehicles have value the owners will come after them and pick them up. I
Senator Bryan King
Unverified
1:23:29
texted the chairman, I'm going to recuse because you're in my district, but I feel like advocating and trying to ask questions
because we have a session coming up that there has to be changes or the law has to be changed or some type of deal that makes maybe a fair deal both sides that can be different. I'd be happy to work with you on that. Madam Chair, I'm going to recuse because
you're in my district. Senator Dotson. Thank you, Madam Chair. So I just counted the days, and from
the time you picked up the vehicle until that January 17th date, I believe, if my math is correct, that was about 458 days.
So if you started your clock at 45 days from then, that would take you out times $40 a day, a rough number. I guess my question for you is you were awarded $7,000, but you appealed that, And so this is kind of like, you know, you risk not getting anything by appealing it or maybe getting more or just that award amount. What was the number that you had in your brain thinking that, hey, I won't appeal it if we get this much awarded?
Speaker 199
1:24:47
I just want what's fair and just. I just want a fair
Speaker 201
1:24:51
amount. I won't, you know, I won't pay for the days they were there for storage that I held them on behalf of the state of Arkansas. I just
Speaker 199
1:25:00
won't pay for the days the vehicle was there. That's all I'm asking for. And it's at a $40 a day rate. And we've got to keep in mind that I know it's a large amount, but there was four, there was, you know, they was there for a long time. And I'm still holding one right now that they have refused to come
Representative Jimmy Gazaway
Unverified
1:25:20
get. Well, based off of the fact that this
claim, I guess the Claims Commission couldn't really consider the other three vehicles, or at least that's what they said in here, going off of the price of one vehicle. Madam Chair, the number that I came up with was right at 20 grand, so I would make a motion that we award $20,000. Can you hold that motion? Speaker Shepard is
lit up to ask a question. I'll defer. Speaker Shepard, you're recognized. Thank you,
Representative Matthew J. Shepherd
Unverified
1:25:53
Madam Chair. And it looked like that part of
the Claims Commission's ruling that they referenced the failure to mitigate or that there could have been an opportunity to mitigate. Is there anything that prohibits you from delivering the vehicle to the sheriff's office or to the prosecuting attorney's office and saying you're not paying for it it's not not going to sit here anymore um is there anything that prohibits you from doing that i would like to hear from both both sides is there anything
Speaker 208
1:26:28
that prohibits that from happening so again december 14th of 2017 the respondent files a
Speaker 298
1:26:33
complaint, seeking ownership of those four vehicles. So I guess your question is, why didn't Mr. Ryan go to the law enforcement and ask about the vehicles, why they were still on his lot? Well, I'm just
Representative Matthew J. Shepherd
Unverified
1:26:47
saying this has gone on for seven years now. I'm just asking, is there anything that prohibited him from, I mean, he's in the business of towing and moving things, from taking it, taking the vehicle, and putting it in the parking lot of the sheriff's office and
saying, or the prosecutor's office, whoever is ultimately responsible, I'm not storing it anymore. It's y'all's. At any time, that's the answer.
Speaker 248
1:27:13
And you're exactly right. This could have been mitigated several times over. And notice could have been given, or he could have informed anybody that he was going to expect charges from this. but he waits until the amount gets to $85,000 and then says $21,000 is a voluntary discount. Now, had anybody known that to expect charges, this would be a whole different case,
and you could argue that respondent side might have unclean hands, but for the first time to demand damages in the amount of $21,000 is unreasonable. That's our position. But yes, to answer your question, this, I mean, and there was testimony at the hearing that there has been space available in the county lot maintained by law enforcement where Mr. Ryan could have brought that vehicle sitting on his lot and put it back on public property.
Representative Matthew J. Shepherd
Unverified
1:28:08
But I'm not even saying if they had space. I'm talking about just literally deliver it to the prosecutor's office or the sheriff's office and leave it. Was there anything that, in your mind, precluded you from being able to do that? The chain of custody of
Speaker 201
1:28:25
the vehicle, well, you know, we was responsible for it. They brought it to us. We were responsible for it. It isn't our chain of custody.
Speaker 199
1:28:33
Until they do something to change that, you know, I didn't feel I had the right to do anything like that.
Representative Jeremy Wooldridge
Unverified
1:28:39
And I think to answer your question further, yes, if Mr. Ryan was informed in 2017 that he was going to have to hold four vehicles on his lot for a year and not get paid, I'm sure he would have taken them to their front office and dropped off the vehicle. Absolutely. Are
you satisfied, Mr. Speaker? Are there any
other questions? Seeing no questions. Oh, Representative Gasway, you're recognized. So most of
Representative Jimmy Gazaway
Unverified
1:29:07
the vehicles that come onto your lot, I take it,
if someone hasn't paid for them within a certain period of time, maybe it's 45 days what the law provides, and you can auction the vehicle and you get your storage fees as part of that, I guess, out of the payment. Is that right? Yes, for vehicles
Speaker 298
1:29:24
that are not on a legal hold. It would be for the owner. We would have to notify the owner that we have your vehicle, come get it, we're going
Representative Jimmy Gazaway
Unverified
1:29:31
to sell it. And then a lot of the vehicles that you'll see on a lot, such as this, would be vehicles that have been in a wreck and you have an insurance company that's maybe paying the rate. Does that sound right?
Thank you. Are there any other questions? Seeing no other questions, Senator Johnson, you are recognized for a motion. I
move that we award $20,000. We have
a motion to award $20,000. Is there any discussion on the motion? Oh, sorry, I need a second. Sorry. I've got
a second. Now do we have any discussion on the motion?
Representative Jimmy Gazaway
Unverified
1:30:13
Representative Gasway, you're recognized. Thank you. I have to speak as
opposed to this motion for a couple of reasons. One, I think there's a legitimate question as to whether or not these funds could even be paid. There is a jurisdictional question about the use of county funds and the use of related to the drug task force money and the county and all of that, whether or not we should even be awarding this money. So first of all, I think there's a jurisdictional objection.
But more than that, I think that the idea that we would pay this amount of money for a vehicle simply sitting on a lot I think is outrageous. I think the idea that the charge of $60 a day or $40 a day is actually justified is outrageous. Why they do that is because if the vehicle's not on a legal hold, they auction them off and they get paid out of the money from the auction. So they try to get that money as high as they can. this, how the storage business works. Or they're holding wrecked cars for insurance companies and
they submit the bill to the insurance company, which pays it promptly. But the idea that we're going to ask the taxpayers to pay this on a case where these vehicles were seized by a drug task force in a law enforcement investigation, I don't think that that's a fair amount of money. I think the Claims Commission was right to award about $7,000. I understand that there are some costs associated with this and having to maintain insurance. That's fair. But as the testimony was here today, the lot is not always full. It's pretty full. There were spaces that were available
there. The other thing is, is this owner had the duty to mitigate his damages. As Mr. Speaker pointed out, at some point to mitigate your damages, take those vehicles over to the Sheriff's Department, take them to the Prosecuting Attorney's Office and drop them off. But none of that was done. I do not believe $20,000 is a fair amount. I think the Claims Commission got it right at about $7,000. I think that's fair. And so I'm opposed to the motion. Thank you. Is there any other discussion on the motion?
Representative Cozart, you're recognized. I don't
Representative Bruce Cozart
Unverified
1:32:28
totally disagree with Representative Gathaway, but I do know this man's trying to make
a living. This is one of the ways he makes a living. And when you're taking space in his living space, $40 is normal, even more so now. I think there was a lot of miscommunication between the prosecutor's office and the sheriff's office, and maybe even Mr. Is it Ryan? I think coordination, communication could have been a lot
better, but that's been done and said. I think $20,000 is
Senator Gary Stubblefield
Unverified
1:33:07
a fair amount. Senator Stubblefield, you recognized? I'll take that substitute. Substitute
motion is $10,000. Substitute motion for $10,000. Is
there any discussion? I need a second for the 10. I've got
a second for the motion of $10,000. Any discussion on the motion?
Seeing no other discussion, all in favor
of the substitute motion, say aye. Aye. Opposed, no. No. Substitute motion passes. Thank you
all for being here. Thank you. Please reflect in the notes that Senator King recused from the vote due to it being someone from his district.
Now we'll move to F, which is award claims that has been appealed by the respondent. Ms. Johnson, please
Speaker 67
1:34:40
give a brief description of the claim. Item F1 is claim number 16-0497-CC, Regions Bank Trust Department as Special Administrator
of the Estate of Jinglei Yi Deceased versus Arkansas Department of Emergency Management. The claimant sought $5 million in damages related to indemnification of a wrongful death claim. Claimant alleged that Ms. Jinglei Yi's death was approximately caused by the negligence of the City of Little Rock and the Arkansas Department of Emergency Management when a City 911 dispatcher failed to send police and fire units to the scene of a vehicular submergence in which Ms. Yee died as a result and her five-year-old son, Le Young, suffered
an anoxic brain injury and died two years later. Respondent moved to dismiss the claim for failure to state facts upon which relief could be granted, arguing that it cannot be liable for independent acts of individuals or entities who are not officers or employees of the state of Arkansas, and that the complaint failed to state the amount sought. The claims commission placed the claim in abeyance pending the conclusion of underlying litigation. A companion claim regarding Lei Yong's death was filed and eventually denied and dismissed by the claims commission. The claimant in that case appealed to the claims subcommittee of the Joint Budget
Committee, which declined to uphold the claims commission's order and instead awarded $100,000. This claim remained in abeyance status until 2023 when the Pulaski County Circuit Court entered summary judgment in the underlying litigation against all defendants except the 911 dispatcher and entered a default judgment against the 911 dispatcher for $5 million. After a hearing, the Claims Commission awarded $15,000, basing its decision on the Claims Subcommittee's decision in the companion claim.
Respondent filed a motion for reconsideration, which the commission denied as it failed to set forth new or additional evidence not previously available. Respondent now appeals. Ms. Irby,
would you like to add anything? No, ma'am. Happy to take any questions, though. Are there any
Representative Matthew J. Shepherd
Unverified
1:36:48
questions? Speaker Shepard. Just to be clear, the respondent that is appealing this is the Department of Emergency Management. Is that correct?
Speaker 101
1:36:55
Yes, they are represented by the AG's
Representative Matthew J. Shepherd
Unverified
1:36:58
office in this matter. Okay, and the claimant has not lodged any appeal of the decision, of the award.
That is correct. Okay, thank you. Are there any other questions? Seeing no other questions, do I have a
motion to review? I've got a motion and a second. All in favor say aye. Aye. Opposed, no.
Speaker 156
1:37:19
Motion carries. Ms. Irby. Madam. Ms. Johnson. Madam Chair. Part G, okay. Yes, ma'am. Question
Senator Mark Johnson
Unverified
1:37:27
of clarification, just to make sure I'm, was that, was the Claims Commission's decision affirmed in that situation? You said motion to review. I just want to make sure I
understand. Yes, ma'am. Okay, thank you. Sorry,
I used the wrong word. No. I didn't mean to confuse you. Part G of the agenda
Representative Matthew J. Shepherd
Unverified
1:37:52
contains... I've got a question. Speaker Shepard. So, just to be clear, and I may have been kind of reading between the lines and also having looked at the material previously, my understanding, the department was challenging, was appealing it based upon a, basically, I think it was a claim the state had no liability.
The Claims Commission stated that they had awarded this amount. They wouldn't have awarded any money, but they awarded this amount because of the actions that took place during, I guess, the physical session when Budget Claims Committee awarded $100,000 in a companion case. And that was ultimately passed, that claim was ultimately passed by the General Assembly. I see, I believe the claimant's attorney is here today, but I just, that was the basis of my motion, is that understanding the claimant was not appealing, the respondent, the department was appealing, their appeal was based not about the amount, but about the propriety of the ward in the first place.
And my motion was similar to, I guess to explain my motion, was similar to the Claims Commission's decision, which was given what happened in the other case, there had been an award of funds. And similarly, that's what was the basis of my motion. So I guess I wanted to go on the record with that because I know we moved into that pretty quickly. and the statute involved has been subsequent to this incident has been amended to hopefully
clarify some of the issues that
you. I appreciate the clarification. Are we clear? Yes, ma'am. Okay. Part G of the agenda contains two claims which were denied
and dismissed by the Claims Commission. The claimant in each case has appealed the decision. Ms.
Speaker 67
1:39:56
Johnson, please give us a brief description. Item G1 is claim number 231626, Clementine Bass versus Arkansas Department of Transportation.
Claimant sought $837.04 in damages, alleging that her tire was damaged when she hit a hole or a rut on the side of the highway. RDOT denied liability and moved to dismiss the claim. the Claims Commission dismissed the claim, finding that claimant did not allege any facts regarding RDOT and noting that claimant did not file a response. Claimant filed an affidavit motion for reconsideration, which the Claims Commission denied, noting that at the hearing, claimant stated she did not believe RDOT knew about the pothole that damaged her vehicle before
she hit the pothole. Claimant now appeals. Would you like to add anything, Ms. Irby? No, ma'am. Happy to take
questions, though. Are there any questions? Is the claimant here? I do not see the claimant. Yes. Do I have a motion to affirm? Oh, wait. I have a motion.
Do I have a second? Second. We have a second. All in favor, say aye. Aye. Opposed, no. Motion carries.
Speaker 67
1:41:12
Ms. Johnson. Item G2 is claim number 240613, Letitia Sanders v. State of Arkansas. Claimant sought $10 million in damages, alleging that the state of Arkansas allowed Governor Sarah Huckabee Sanders to violate Article 6, Section 5 of the Arkansas Constitution when it permitted her to take office. Claimant alleged that Governor Sanders was ineligible to hold the office of governor until July 31, 2024, and, in addition to the requested $10 million in damages, requested the governor's immediate resignation.
Respondent moved to dismiss the claim, arguing that claimant failed to present any factual allegations and that her requested injunctive relief fell outside of the Claims Commission's jurisdiction. The Claims Commission granted the motion to dismiss, citing lack of jurisdiction over claimant's post-election attempt to challenge the governor's eligibility. Claimant filed a motion for reconsideration, which the commission denied, finding it did not set forth new or additional evidence not previously available, and claimant now appeals. Ms. Herbie, would you like to add anything?
No, ma'am. Happy to take questions. Speaker Shepard. Is the claimant here? Yes, this is here. Please state your name for the
Leticia Sanders
Unverified
1:42:47
record, and then... And then you may begin. Hello, my name is Leticia Sanders.
I appealed this case because they
Speaker 358
1:42:52
failed to show what she was dormitical in. There was no proof of where her children went to school here for seven years. There was no proof to where her husband was employed at for seven years. There was no proof where Governor Sanders actually paid her taxes to have her dormitile in the state of Arkansas. And that's part of the law that you have to be here seven years prior to running to be on the ballot.
Representative Matthew J. Shepherd
Unverified
1:43:22
Speaker, Shepard, you're recognized. And Ms. Irby can correct me if I'm wrong. The commission dismissed this case finding that the commission does not have jurisdiction over a post-election challenge to the governor's eligibility. And that's, Ms. Irby, am I correct about that? That appears to be what the decision was based on. That is correct. The
Speaker 90
1:43:45
commission found that this claim was outside
Representative Matthew J. Shepherd
Unverified
1:43:47
its jurisdiction. Okay. So I guess, Ms. Sanders, do you have anything to add as to or to respond to that particular point?
because that ultimately was the basis of the commission's
Speaker 358
1:43:59
decision. From what I read, that wasn't the base. It was saying that it wasn't clear of what I was claiming. It's what I made the reconsideration on and that they stated in their response that she was dormitical. Are there any
other questions? Seeing no other questions, thank you for being here, ma'am. Do I have a motion to affirm the ruling of the Claims Commission as I've got a motion and a second?
Is there any discussion? All in favor say aye. Aye. Opposed no. Motion carries. Moving along, we have Part H of the agenda contains five correction claims which were awarded by
the Claims Commission. The respondent in each case has appealed the decision. Ms. Johnson, please give us a brief
Speaker 67
1:44:59
description of the claim. Item H1 is claim number 180886, Barry Turner v. Arkansas Division of Correction.
The claimant sought $850 in damages for a lost property claim, alleging that his personal property was stolen from his cell during an incident due to ADC's failure to properly secure his property in the unit property room when his 48-hour relief ended. ADC denied liability and moved to dismiss the claim. Following a hearing, the commission found that claimant's property was lost as a result of ADC's negligence and awarded claimant $595, representing claimant's actual damages while taking into consideration depreciation of claimant's lost property.
ADC filed a motion for reconsideration, which the commission denied, on the grounds that it did not set forth new or additional evidence not previously available. ADC now appeals. Ms. Irby, would you like to add anything? No, ma'am. Happy to take questions, though.
Do we have any questions? Seeing no questions. Oh, Speaker Shepard. What's the basis of the agency's appeal? I know the agency is here. Yeah, I just...
Speaker 155
1:45:58
Please state your name for the record and who you're with. Thank you. Thomas Burns.
Speaker 367
1:46:11
Thomas Burns. I'm actually with the Board of Corrections. I was the general counsel for the Division of Corrections. I did these cases. The basis on this one is that Mr. Turner admitted that there was a riot going on. There was an incident and the warden declared an emergency. The policy is, and he admitted also in the policy, anything that's taken, destroyed, or damaged, the ADC is not liable for if the warden declares an emergency. This was a time where some inmates overtook a section of the MACS area
and got the keys off one of our officers going around opening doors and all kinds of stuff. So he lost his property, unfortunately, but policy is pretty clear, and he even admitted there was a policy and an emergency was awarded, and therefore we believe that we shouldn't be liable for any
of it. Is there anybody here that represents the claimant?
No. Are there any other questions? Oh, Representative
Representative Jimmy Gazaway
Unverified
1:47:23
Gassway. What was the $2,600 and some odd dollars worth of property that he claims was stolen that was y'all's fault?
Speaker 371
1:47:30
If I remember right, it was magazines, mainly magazines and books, if I remember correctly. Okay. I think it was also his headphones and his MP4 device. That's
Speaker 90
1:47:42
right. It was an MP4. But that there were a number of books.
Speaker 367
1:47:50
Right. Okay. He's not allowed to have any of those things while he's in isolation. That's why they
Representative Jimmy Gazaway
Unverified
1:47:57
were in storage. And so somebody determined the value of that property to be $500 and some odd dollars, is that right?
Senator Mark Johnson
Unverified
1:48:08
That's correct. And then you guys... Ms. Herbie, do you have the basis? Well, in paragraph 7 of the commission's order, it included an MP4 player, a keyboard, magazine, and assorted books. And the claimant estimated the value of the lost property at $850. and that he specified the other amount
that he was seeking in the claim was for his punitive segregation claim and the claims commission denied and dismissed that claim. So the only issue here is the $850 that he estimated his property was worth and the unrefuted, well what the commission found to be unrefuted testimony about the value of the property and the commission awarded him $595 dollars, taking into consideration the depreciation of the lost property. Okay. Got
Representative Matthew J. Shepherd
Unverified
1:48:54
to get that depreciation on there. Very good. All right.
So I know Ms. Irby in here, it talks about, I think this is more to maybe the first part of the question. It says it would likely have remained secure. The reason that y'all awarded, Can you give the reason why it was
Senator Mark Johnson
Unverified
1:49:18
awarded? Yes, I am. That's what I need to ask. I'm sorry. No, there are a number of orders that were entered in this particular one. Let me get to the correct. Well, the commission found that the claimant's testimony as to his lost property was credible and that it was unrefuted,
and that the claimant established that his property was lost as a result of respondent's negligence. And I know that part of his testimony was that in this case that respondent did not follow the policy with regard to property and that that was what respondent had done wrong that formed the basis of the negligence claim. So even though it occurred during a riot, that there were still violations of policy by respondent that the commission felt warranted an award in this matter.
Senator Blake Johnson you're recognized
Speaker 76
1:50:15
happened during a riot and also he was in isolation is that correct yes sir what where is the storage facility for these items if he's in isolation. They're down the hall
Speaker 367
1:50:35
in another locked property room. But when this unit was taken over by some inmates, they took three of our officers hostage during that time. They got the keys off one of our officers and went around and opened all the doors and got everything so they could barricade and do other
Speaker 76
1:50:52
things. It was in this area that that happened? Yes, sir. Down the hall. Yes, sir. Are you good, Senator? I have a motion at the proper time.
Just one second. Senator Doxing, you're recognized. Thank you,
Madam Chair. So was he in isolation with the property in
your possession, at yours being ADC at the time that the loss of property occurred? Yes, sir. Not in his
Speaker 367
1:51:27
cell, but in a property room. Yeah, so it wasn't
in his possession during the time of the riots. I don't know why the riot has
anything to do with this at all. This is, I mean, if you're not following your proper procedures and keeping property secure for someone. Why did you appeal
Speaker 367
1:51:55
for him. They took over the unit. They took keys off an officer, opened doors. They got in that locked door where we keep it.
Those keys were on an officer. But it was the department's responsibility to maintain the security of the property,
not the inmate who was in... Is it the claimant? What do we call the inmate? The claimant was, he was locked away somewhere else, not defending his own property because he was in isolation. Yes, sir. Okay. I don't know that
you have a leg to stand on here.
Senator Gary Stubblefield
Unverified
1:52:30
Senator Stubblefield, you're recognized. Thank you, Madam Chair. I just want to make sure this is not Supermax. No, was it Varner Supermax? Well, there seemed to be somebody leaning toward, this was not Supermax.
No, sir. And there are a list of items that they are not allowed to have called contraband. Yes, sir. And he was in possession. Or the contraband was out of his possession? I don't think any of his property was
Speaker 395
1:52:57
contraband, sir. But it was in a separate property room. Right. Not in his possession in his cell. Right. But as those inmates took over,
Speaker 367
1:53:08
they opened all the cells and opened all the doors. and just cut you out of the door kind of thing.
The claimant testified that if the respondent had done its job properly by storing his property, when he went into isolation in the unit storage, it would have been 75 yards from where the disturbance occurred and the inmates that took over isolation would not have had access to his property. Claimant testified that his property was stolen because respondent allowed it to be where it could be stolen. I just wanted to make sure that everybody heard that.
Representative Cozart, you're recognized. Thank you,
Representative Bruce Cozart
Unverified
1:53:51
Madam Chair. Quick question. So do you keep an inventory of everything they have stored in that locker? Is there a
certain amount per, say, capital that they could keep there, or is it
Speaker 367
1:54:04
just unlimited? It's not. it's limited to an extent they're only allowed books, they're allowed 10 books to sweatshirts only so many flex pens so it is a limited amount and there is a form a property form
Representative Bruce Cozart
Unverified
1:54:19
Would it ever be $5,000 like his original claim? No it should not be I've seen that was amended and amended and then back down so just curious I would never think that they would even
have $3,000 worth of stuff that they would have in prison with them. So thank you. Thank you, Madam
Speaker 347
1:54:36
Chair. Ms. Harvey, did you want to add? I was just going to specify that the amount he was seeking
Senator Mark Johnson
Unverified
1:54:42
originally was for two bases. One was for the lost property, and the second was for his claim about punitive segregation. So it was a the entire amount sought was not for the pro not his estimation of the value of the property.
All right, do we have any other questions? Speaker Shepard, you're
Representative Matthew J. Shepherd
Unverified
1:54:58
recognized. for the this is uh for the department or the division so his property was his property where it was supposed to be secured where i mean was that the the location where uh inmates uh property who are in i guess solitary where it is stored yes sir and the claimant suggested that that was not the proper place but you're but you're you're saying today that that is that is where you store
it. Because of the riot, folks were able to access that property. And the department or division's policy is you're not responsible for property loss caused by a riot or other outburst. Yes, exactly. All right. Thank you. But
in his cell and not stored stored properly. Am I correct? He claimed there was,
Senator Mark Johnson
Unverified
1:55:54
and I would note that the only witness at
this hearing was claimant. His testimony was the only testimony that came in and he testified that the property was not where it should have been stored. And he also testified that the respondent did not do an inventory form on his property as should have been done. And there was no testimony presented to contradict or to refute that. Are there any other questions? Representative Gasway.
So I take it, number one, the property
Representative Jimmy Gazaway
Unverified
1:56:22
was never found. I believe so, yes, sir. Is that right?
Representative Frances Cavenaugh
Unverified
1:56:29
Property was never found. It was either not found or totally
Representative Jimmy Gazaway
Unverified
1:56:32
destroyed. And I guess part of his argument would be, could have been another prisoner in the
right, could have been Department of Corrections staff. We
Speaker 367
1:56:44
don't know who took it. I can probably with 100% certainty tell you it wasn't in the Department of Corrections staff because those guys were tied up and held hostage during that
Representative Jimmy Gazaway
Unverified
1:56:55
time. I agree with you. I mean, I wouldn't assume that that was likely the case.
But the point is, we don't know who took
it. Someone took it, and it wasn't where it was supposed to be. wasn't logged in and into the into the
proper place where it would have been otherwise is that correct no it was logged in where it should have
Speaker 367
1:57:18
been where it should have been it was in the locked property room in the isolation area where all the other properties at oh okay that's where it was
Representative Jimmy Gazaway
Unverified
1:57:28
at so he claimed something else sir he claimed something other than that he claimed it
wasn't where it was supposed to be that
Speaker 367
1:57:34
was what i understood he he says it was in a room 75 yards away from where the riot happened wasn't 75
Speaker 413
1:57:40
yards away but he's correct it was in another room locked up in the property storage area
where it's supposed to be i need to correct something that you just said because he said if it would have been where it was supposed to have been it would have been 75
yards to 100 yards from where the riot was at not not the other way around sir okay
Speaker 367
1:58:02
but it was where the storage area was supposed to be that's where he had his property That's where all the inmates in that isolation area, that's where all their property was stored. When they're in isolation, every 30 days they get a 48-hour relief period, so they get their property back during that 48-hour relief period. So they go, they take their property out, they get to have it, then they've got to take it back at the end of that 48-hour relief. And that's where this stuff was stored.
Okay. Senator Johnson, are there any other questions? Seeing none, Senator Johnson, you were recognized.
Senator Mark Johnson
Unverified
1:58:46
So, I mean, I had a question.
Speaker 76
1:58:53
Go ahead. And a motion. Yes, sir. So, it's not like there's an availability of a lot of people. was everybody else searched for this property every other inmate that after everything settled
down did you go through everybody's stuff that was in that block and in that situation to see if you could find this mp4 or whatever that thing is and to see if there was one misplaced No, sir. I don't know. The SR
Speaker 367
1:59:29
team and state police sort of went in there and took it out. That's the reason why we have the policy that if there's an emergency situation that's declared by the warden or one of the other leadership in that situation, that's why the ADC is not liable for any property, because things are going to get tore up in those situations.
Speaker 76
1:59:54
Okay. Now, do you have a motion, sir? I make a motion to accept the policy of the Department of Corrections in that emergency situation and award nothing. Do I have
Speaker 165
2:00:10
a second? Second. All in favor say aye. Aye. Oh, wait, sorry. Motion already voted.
Representative Bruce Cozart
Unverified
2:00:40
We're working on it. There's a motion. I had my speaker deal on
Speaker 426
2:00:45
it. It put it in there. Stubbs seconded it.
Speaker 428
2:00:57
because i didn't complete the necessary procedure
Speaker 429
2:01:04
by asking for discussion on the motion
We have a motion. I have a second, but I have
a substitute motion, and I'll allow it.
Thank you, Madam Chair. I don't know if this is going to go anywhere, but I move to affirm the
we have a second? Hearing no second, that motion fails. Senator Johnson has a motion to affirm the correction. the arkansas division of corrections correct sir and we have a second now we have discussion on this motion speaker shepherd just just to be clear it's it's not
Representative Matthew J. Shepherd
Unverified
2:02:05
it's not to affirm it's a he was his reference was to affirm the department or the division's position, it actually is a motion to award nothing, which is different than what the Claims Commission decision was. I just want to make sure
everybody's clear on that. So we're making a motion to amend the decision of the Claims Commission to zero.
Is that correct, Senator? Yes, ma'am. All right. Now do I have a second on that? I've got a second. Is there any discussion on that motion? Seeing
Representative Matthew J. Shepherd
Unverified
2:02:52
no discussion. Yep. Speaker Shepard. I guess this is a
procedural question. The amending the decision, is that to zero, is that in essence the same as determining there was no basis for the, there is no legal basis to award the claim.
And I guess that's my understanding of, and it may be six one way, half a dozen the other, but to be clear, and Senator Johnson, correct me if I'm wrong, his motion is based upon the fact that the department, the division had a policy that they were not responsible for damage during a riot. And so while the claims commission determined there was liability, this motion
is not just to take it to zero and to say that the division was liable, but we find no damage awarded. The motion is actually to indicate that the division had no liability to begin with because of the policy
is that correct okay and we're having that put into the motion
we have a second all in favor say aye opposed no motion carries miss johnson madam chair i'm
Speaker 433
2:04:13
sorry oh yes may i ask a question yes
Senator Mark Johnson
Unverified
2:04:17
ma'am does the subcommittee authorize me to send a letter
to the claimant notifying him of this change because otherwise he won't, the
Speaker 90
2:04:24
ADC is going to send him a letter. Is that what you
Speaker 347
2:04:32
would normally do, ma'am? We have little cards that
Speaker 90
2:04:35
do that. We haven't had a situation like this
Speaker 367
2:04:37
come up in a while, so we don't have a set process. We have little postcard-like things, ma'am, that we send to inmates after
Speaker 371
2:04:44
every one of these meetings. If it's upheld or overturned,
either one. The chair gives you permission to send notification to him.
Thank you, Madam Chairwoman. To you, ma'am. Got it. To
Speaker 108
2:05:09
you. Thank you. To you, ma'am. Thank you. Thank you.
Speaker 67
2:05:15
Okay. So now, moving along, Ms. Johnson. item h2 is claim number 200909 quasi mckinney versus arkansas division of correction the
claimant sought five thousand dollars in damages for a lost property claim alleging that adc failed to inventory his property when he was placed in isolation and failed to return all of his property when he was released from isolation adc denied liability and moved to dismiss the claim following Following a hearing, the Commission found sufficient evidence of negligence on the part of ADC to warrant an award in claimant's favor and set a second hearing to determine damages. At the second hearing, claimant claimed $13,155.29 in damages, including $3,155.29 for lost
property. The Commission awarded $3,155.29. ADC filed a motion for reconsideration, which the Commission denied on the grounds that that it did not set forth new or additional evidence not previously available. ADC now appeals. Ms. Irby, would you like to
add anything? I can take any questions. Are there
Speaker 76
2:06:26
any questions? Senator Johnson. From the department, what's your stance on this situation?
Speaker 367
2:06:36
Excuse me, sir. Let me get there. This is Quasi McKinney. So Mr. McKinney, Mr. McKinney claimed to have several thousand dollars worth of books and a trial transcript that he claimed he paid for. Mr. McKinney never provided us with any documentation of any price of anything he had. He couldn't provide any receipts of anything. He just said what it cost.
he said there were items he had he said his trial transcript was about three thousand dollars i think it was and um then told the claims commission that those receipts should be in our offender management electronic management system or called eomis so the burden was put back on us to prove what what his things were but we didn't have that at that time after the claims commission made a ruling in my motion for reconsideration i put in his inmate banking and there's at no time that he ever spent anything I want to say maybe even
more than $50 ever so there's no way he paid for a trial transcript of $3,000 it was really it was very clear in in those receipts from his inmate banking that he didn't pay for
Speaker 76
2:08:03
he didn't pay for anything. So can he have in his possession anything that was not bought through inmate banking? He can. Like a trial transcript,
Speaker 367
2:08:14
he could absolutely have. But he didn't have
a receipt for a trial transcript. And when he said that, when he said he didn't have receipt he said well that's an eomis well we don't hold receipts eomis isn't for hold receipts we can get to inmate banking through there and see where he's
Speaker 416
2:08:32
spending money in the commissary but as for any any big thing like
Speaker 76
2:08:38
that he he would have to have that so at any time does the department inventory, what each inmate has property-wise?
Speaker 367
2:08:50
Yes, sir. There are several different times where inmates' property is inventory. If they move, if they're sent to administrative segregation, if they're transferred out maybe to go to court and come back, every time their property is inventoried and is put on what's called a form 841. And it'll have all their, it'll list all their property on there. Officer
Speaker 76
2:09:13
signs it and inmate signs it. So when was the closest time frame that
Speaker 384
2:09:17
this individual's property was inventoried? There was one pretty
Speaker 367
2:09:22
close. And he had, at one time, he had this property. He had
a trial transcript. He had several books. And it just says books. I don't know. He said there were law books that he had purchased. Now, the law books he said he had
Speaker 412
2:09:38
purchased, he had all that stuff. But the question was, was the price. And I'm not going to say, I'm not going to say we don't lose things. It happens. But he couldn't prove or show any proof of what those things cost.
Speaker 367
2:09:58
Only his test, only he said, and I believe he said during the hearing, well, I believe that book was $165 or I believe and then that's when he that's when he said that he almost had it so when I took out when I looked at the um when I looked at the inmate banking he had never bought any books or anything like that I don't think he ever spent anything more than $50 this is an
Chair
Unverified
2:10:26
indigent inmate so he only gets $10 a month.
Representative Frances Cavenaugh
Unverified
2:10:28
Thank you. Representative Kavanaugh recognized. Thank you Madam Chair. In his um response he had said that
you failed to inventory it and that that was your responsibility. Are you saying
that you had inventory and you know for a fact that he did have these
Speaker 367
2:10:41
things? Oh, I've seen the inventory and I know for a fact that he had that at a point in time. And I'm not saying not afterwards. I don't know about after the claim, but I had seen his inventory sheets where he had a trial transcript
Representative Frances Cavenaugh
Unverified
2:10:54
and he had books. Okay. And you're saying that you are disputing the
cost of it because he didn't provide it? Yes, ma'am. Okay. Could it not easily been looked up because a law book or something
is very easy to look up and see what the cost of it is? If someone doesn't have the receipt, is that not something that can be very easily looked up? Because from somebody that's bought law
books, I mean, it's pretty easy to find out a cost of
Speaker 367
2:11:19
a law book. I agree that that is, but I don't think the burden's not shifted to the ADC to make that point. The burden's on him to make his proof and to show his proof of damages. He
Representative Frances Cavenaugh
Unverified
2:11:28
didn't show any proof of damages. Isn't it the burden of proof of the department to keep the stuff secure? Isn't that the burden? We do keep
Speaker 367
2:11:37
their property. Inmates, the burden is on an inmate if they're in population to keep their stuff secure. In isolation, we would keep it secure. But is that
not where he was in isolation? No, ma'am. I think he was in population. Okay. All right. Thank you. Representative Cavanaugh, the commission found claimant's testimony credible and unrefuted and stated that his testimony as to the cost of the transcripts, specific book prices, was not speculative, just for the record.
Representative Dotson, you're recognized. Thank you, Madam Chair.
um so on this you're not disputing that you lost the the property you're just disputing the cost of that property that he didn't actually say how much he had paid for it so the department was negligent in keeping hold of proper storage of his his property
Speaker 414
2:12:34
i believe we probably did lose his property
yes sir i believe you're correct whose responsibility is it to keep hold of that or replace like-kind things. If
I'm holding on to something for somebody
that's not mine and I lose it, then I replace it for them. I'd go buy
them a new one or replace them with, if it's a law book, did you guys go buy them a new one?
Speaker 445
2:13:01
We did not. And we do replace with like-kind if we have it. We do replace it. but
Speaker 367
2:13:11
you didn't do that in this case. I do not believe we did that at all. Ms. Herbie. I don't remember what the... I'm sorry.
I don't remember what the grievance said in there, what the warden said in his grievance
Speaker 90
2:13:28
answer as to that. Ms. Herbie would like to add
Senator Mark Johnson
Unverified
2:13:34
something. Yes. So the commission held what was essentially a trial on this matter, and at that trial, the only witness was the claimant. So the only testimony that came in for the commission to consider and make a decision on was the claimant's testimony. And there was not an ADC witness that was presented, which is certainly ADC's choice.
But in this case, the commission heard the claimant's testimony, and I know he can't be here today to answer questions or respond. but they heard his testimony and found it to be credible, found it to be unrefuted, and found that his estimation of the value of that property was not speculative. That's a specific finding by the commission in paragraph 10. And there was nothing that was submitted that contradicted that in the form of testimony. And because there was no witness that came in,
there was no documentation that ADC was able to present in to refute what the claimant's testimony was. So that's, that was the basis of the commission's decision here. In a different situation, the commission might have, if there had been testimony to refute what the claimant was saying, that could be a different, a different outcome. But in this case, that's not what the commission had before it. And that's all it can consider when it is making the decision. So
why did the department not show up? They showed up.
Speaker 257
2:15:02
I didn't mean to suggest they didn't show up.
Why did they not testify or dispute it at that hearing? Why did you wait until here today to appeal? I did dispute it. I
Speaker 367
2:15:10
disputed it during the hearing. I disputed it during... Actually, if I remember right, this was in two parts. We had a hearing on it, and then we had a hearing on damages later. There were multiple orders. let me i know we did this with quasi several times i
Speaker 457
2:15:27
know he's had so many of them um but
Speaker 367
2:15:31
we didn't i i don't i don't have a witness to saying that he missed his property or he lost
his property and i i just know when i was when i was doing this case i saw his f4 8 41 that transcript of stuff wasn't there on the next time so i mean i'm sure it got lost it got
Speaker 414
2:15:50
damaged it got thrown away, stolen. I think you may have
had a witness that didn't show up. So what do you believe the value
Speaker 407
2:16:00
of this should have been? I'm sorry. I'm sorry, sir. I did have a witness. She didn't
Speaker 413
2:16:04
show up. Angela Jenkins. She didn't show up.
That was the property officer. And do you know what she was going to say
Speaker 412
2:16:17
or would have said? I know. I feel like I'm just trying to work. I think she was going to say that he had some of that property. He didn't have all of it,
Speaker 432
2:16:32
but she was the property officer. Speaker Shepard, you're recognized. I guess I don't know that I can state this in the form of a question. This would just be a matter, a point of information.
Representative Matthew J. Shepherd
Unverified
2:16:41
I think that the department, and I can understand there are instances where you don't put on witnesses, maybe you don't offer any evidence because the legal burden is on the claimant and those things, maybe they can't chin the bar on that. I think the challenge that probably the committee has on some of these where there is no evidence or no testimony that's offered, and I understand in this case you had somebody intending to show up, so this is a little different, but that leads to, I guess, challenges for the committee and I guess for the commission as a whole because of the fact that you only have really evidence from one side.
Is there anything else? Am I missing something there from the division? I mean, basically, there may be questions of law, but as far as the facts go, the only testimony or evidence presented came from the claimant. Yes, sir.
Okay. Are there any other questions? Seeing no other questions, do I have a motion to affirm the ruling of the Claims Commission as to the claim? I have a motion and a second. Discussion on the motion?
Seeing none, all in favor say aye. Aye. Opposed, no. Motion carries.
Speaker 67
2:18:07
Ms. Johnson. Item H3 is claim number 201177, Leandra Davis v. Arkansas Division of Correction. Claimant sought $2,344.60 in damages for a lost property claim, alleging that while he was at school call, an ADC officer directed his roommate to move his property
and that certain items went missing. ADC denied liability and moved to dismiss the case. Following a hearing, the Claims Commission found that claimant's property was lost as a result of ADC's negligence and awarded $241 representing claimant's actual damages taking into consideration depreciation of claimant's lost property. ADC filed a motion for reconsideration, which the commission denied, on the grounds that it did not set forth new or additional evidence not previously available. ADC appeals.
Are there any questions? Seeing no questions, do I have a motion to affirm the ruling of the Claims Commission? Motion. Second. Got a second. Is there any discussion on the motion? Seeing none. All in favor say aye.
Speaker 67
2:19:21
Opposed, no. Motion carries. Ms. Johnson. Item H4 is claim number 220838, Daryl Williams versus Arkansas Division of Correction. Claimant sought $25,000 in damages after he was stabbed by another inmate
alleging that ADC employees failed to follow ADC policy regarding searches of inmates prior to shower call. ADC denied liability and moved to dismiss the case. Following a hearing, the claims commission found that ADC was negligent, stating that the undisputed testimony at the hearing showed the perpetrator ran about 60 feet to reach claimant and stabbed him six times before officers intervened, and that one officer involved testified he was unaware of the strip search policy and that sometimes officers circumvented policies in order to expedite showers. The commission
awarded claimant $12,500. ADC filed a motion for reconsideration, which the commission denied on the grounds that it did not set forth new or additional evidence not previously available. ADC appeals.
Ms. Irby, would you like to add anything? No, but I'm happy to take questions. Representative, or Speaker
Representative Matthew J. Shepherd
Unverified
2:20:24
Shepard. Just a question for ADC as to their position and what they're seeking on this appeal.
Speaker 367
2:20:32
So this one, in my motion for consideration, I asked it either be overturned or this gentleman
be awarded nominal damages. We did request for admissions in this case, and in this case, he admitted that he did not pay for any medical care, and he also admitted he didn't have any damages. So, you know, this case is tragic, and these things happen. He was going to shower call. Another inmate broke out and stabbed him. He did receive superficial wounds. These weren't life-threatening wounds. we had i had two there were there were two witnesses two officers in this case one was a
was a brand new officer who once this happened he he left our employment and he's the one that testified um at the at the uh at the hearing the other i couldn't find i didn't find him till later i did include an affidavit in my bullish free consideration on him he was severely injured in this matter protecting this inmate, and he left our employment too after that. So while the inmate was hurt, he admitted he had no damages.
He admitted that he didn't pay any medical care, and I would just ask that this amount be reduced. I mean, I feel he probably should be awarded something, but I don't think it would be $12,500. It should be a
Speaker 463
2:22:01
nominal amount. That's a follow-up. Yes, sir. So
Representative Matthew J. Shepherd
Unverified
2:22:04
I guess the question related to the request for admissions, and I guess the request was admit or deny that you had damage, damages. Is that essentially the nature of it?
Yes, sir. I mean, if he were stabbed, I mean, he had some damage. I mean, irrespective of what he responded and who knows if he might have understood what the consequence of that. But, I mean, am I wrong that clearly he had some damage? No, I believe you're exactly correct, and that's
Speaker 367
2:22:35
what I'm saying. I don't believe it rises to the level of 12.5. I think it should be some nominal damages lower than that.
Okay. Thank you. Speaker Shepard, I will note that the respondent denied that he didn't,
the claimant denied that he didn't have any damages. He said, I suffered
several damages, including, but not limited to, lacerations and punctured wounds to my upper torso due to the staph, not following policy, and I suffered extreme pain.
Senator Bryan King
Unverified
2:23:15
Are there any other questions? Senator King, you're recognized. so on these situations like this i mean are there when we have these situations
you say they're superficial he's saying something else do you
have pictures of these things or anything that pictures i think the medical records may be in the original the the
Speaker 367
2:23:40
i believe up the medical records are in the original um file yeah i know they're they're redacted in the ones that are on
the website. Yes, we post the medical records. Inmates aren't allowed to have those medical records, so they have to go to the Claims Commission in camera. I'm not disputing your
Senator Bryan King
Unverified
2:23:56
word or their word. It's just, you know, if we had something to see or something like that, we could tell, you know.
I don't have any pictures. You don't have any pictures or any descriptions from anything that show this was superficial, but he's claiming it's not. Yeah,
Speaker 367
2:24:13
he didn't even spend the night in the hospital. He went to the emergency room and came back that night.
Speaker 131
2:24:20
Okay. I'm just wanting something to kind of clear the air, but anyway, you don't have it.
Senator Dotson, you're recognized. Thank you, Madam Chair. Just reading through this, it said that the, I guess the other inmate ran toward
him as he stood in front of his cell handcuffed and shackled. Yes, sir. So he was defenseless. He was
defenseless. He got stabbed in the back six times.
Speaker 412
2:24:50
I don't know if it was six times, but yes, he got stabbed in the back. I mean, it
could be one time or six times. It's still bad. Yeah, it's bad, but it's... Yes. I can't... I don't know how you say he didn't suffer damages if he
Speaker 413
2:25:05
got stabbed that many times. I do believe he suffered damages. And they were in isolation. That's why they're going to shower call. He's being walked by two officers. Yep. Stabbed
in the back six times. Sorry. Okay. Thank you. Representative Gasway, you're recognized.
Representative Jimmy Gazaway
Unverified
2:25:22
Thank you, Madam Chair. I don't know that I have a question so much the speaker asked my question, but I guess the point that I would have and that I will make for what it's worth is that you first said that he had no damages and that he presented no medical proof and therefore you wanted the award to be was to be zero and then in the next breath you said that it was tragic and then we've talked about how
he was stabbed six times that seems to be undisputed
and the claims commission found that the department was negligent they didn't award him any punitive damages but they did find that that the department was negligent and so i would just make the point that i understand your
assertion that he suffered no damages apparently is based on the fact that he failed to answer requests for admissions, which I'm sure he doesn't understand the rules of civil procedure very well and may not have understood the importance of answering requests for admissions.
But the point is, is that when you say that he suffered no damages and then you say that it's tragic and we all know it's undisputed, he was stabbed six times, at some point you begin to lose a little credibility. So if he was stabbed six times, obviously he suffered damages. I understand,
you know, you're maybe making a legal argument, but to me that's not very
helpful. So that's all I'll say. Thanks. Thank you,
Senator Mark Johnson
Unverified
2:26:53
sir. Senator Johnson, you're recognized. So what was the basis of the Claims Commission on the damages?
Where did the Claims Commission come up? Well,
in the finding of liability, the claims commission found Corporal Hollowell's testimony to be very persuasive when he testified that sometimes the officers would circumvent policies in order to expedite the shower process, that Corporal Hollowell wasn't aware of a certain administrative directive and that he was not aware that strip search was supposed to be done at that time. Um, the commission also found Corporal Holloway's testimony persuasive that he, he said that
he, he froze when the assailant charged at the inmate, um, and that there was undisputed testimony that the assailant ran 60 feet before he got to claim it, that there was such a distance between the assailant and when he reached claim it to inflict the stab wounds. As far as the amount goes, the commission found in paragraph 14 that $12,500 was the appropriate
compensatory damage amount, but that is the extent
Speaker 63
2:28:10
of the finding as to the amount. So, you just kind
Speaker 470
2:28:17
of pulled it out of the air? Well, he asked for $25,000, and they
Senator Mark Johnson
Unverified
2:28:26
awarded him half of what he asked for. Okay.
Do we have any other questions? Seeing no other questions, do I have a motion to affirm the ruling of the Claims
Commission to this claim? I have a motion and a second. Any
Speaker 475
2:28:55
discussion? All in favor say aye. Opposed, no. Motion carries.
Speaker 67
2:29:00
Ms. Johnson. Item H5 is claim number 221393, Michael Todd versus Arkansas Division of Correction.
Claimant sought $50,000 in damages relating to injuries he sustained after a nighttime attack by another inmate, alleging ADC negligently allowed security lights to be covered and understaffed barracks security. ADC denied liability and moved to dismiss the claim. After a hearing, the Claims Commission found that ADC was short-staffed when the incident occurred, that only one officer was assigned to five barracks and remained on the door that evening, and that the lights in the barracks had been covered prior to the incident.
The commission therefore found ADC negligent and awarded $7,503. ADC filed a motion for reconsideration, which the commission denied on the grounds that it did not set forth new or additional evidence not previously available. ADC now appeals. Ms. Herbie.
Representative Matthew J. Shepherd
Unverified
2:29:58
I'm happy to take questions. Speaker Shepard, you're recognized. So two questions. Did ADC, did anyone
testify or was any evidence offered by ADC? What was the substance of that? And then the second part would be what's ADC's position as to this appeal.
Speaker 367
2:30:16
This case, we did have the lieutenant on shift that case testified in this case. This is a strange one. This inmate was woken up and stabbed, but we had an inmate testify that an inmate had written a statement for us that we presented to the Claims Commission, that he and three other inmates were in the bathroom smoking K2 before this happened. The lieutenant testified that he was checking all the barracks
and his officer was checking all the barracks. He did say that what those inmates did was they covered a light with a blanket and then they attacked him. They attacked Inmate Todd. Um, but the basis, the appeal
Speaker 412
2:31:05
on this one is, and I know this sounds terrible, but this is a 1983
Speaker 367
2:31:10
claim. This is not a negligence claim. Um, I do not believe the claims commission had jurisdiction even here this matter.
This is a claim that should have gone to the federal court. If he, in his allegations, every one of his allegations are straight section 1983
allegations. I want speaker shepherd for the record. I just want to read something to you. It says on cross examination, claimant testified that he was not smoking synthetic marijuana the day of the accident or the incident. Claimant testified that he did not refuse to take a drug test also.
Representative Matthew J. Shepherd
Unverified
2:31:49
You're recognized. So to this 1983 question, And this may be for
Ms. Irby, but I would assume it's not necessarily uncommon to have inmates attempting to make claims at the Claims Commission that might also be the basis for a 1983 action. Is this something that was considered by the commission? And are there other cases like this that come before the commission,
and how does the commission attempt to delineate between what is properly before them and what might be more appropriate to be handled through the federal court system? Yeah, so the answer to one of your questions
Senator Mark Johnson
Unverified
2:32:35
of claims that end up being denied as outside the jurisdiction, a lot of ADC claims that end up being denied as outside the jurisdiction of the commission. If they're trying to bring a Section 1983 action, they're trying to bring a constitutional claim, something related to federal law, all of that.
In this particular case, the commission, in paragraph 18 of its order from the claim hearing, it said, the commission is not persuaded by respondent's argument that this claim should be filed in federal court. The commission finds that it has jurisdiction over this claim involving negligence related to a single event. So the commission did consider that and disagreed in this instance that the
Catherine Irby
Unverified
2:33:13
claimant was attempting to bring a 1983 action at the Claims Commission. Can I
Speaker 125
2:33:19
have a follow-up? Yes, sir. And it's been a long time since I've dealt with
Representative Matthew J. Shepherd
Unverified
2:33:24
1983 actions, but a 1983 action would be like the intentional deprivation of a constitutional right, correct? I mean, is that, does ADC, is that what it comes down to? If it's an intentional deprivation, that should be handled through a 1983 action. If it was merely, if it was mere negligence that was not with the effect of intentional acts that deprive one of a constitutional
right, then that would be properly before the Claims Commission.
Speaker 367
2:34:00
If it was negligence, yes, before the Claims Commission, aren't it? If it's a deliberately indifference, an intentional act, then it should be a 1983 claim. But the Eighth Circuit especially has said staff shortages in prisons are subject to 1983. This is his exact claim. You've got one officer watching five barracks. That's a staff shortage, a big staff shortage that would be deliberately indifference if it was true.
So all of his claims, it all stems from Section 1983 claim, the whole basis of my appeal here is that this is a Section 1983 claim. And we do get a lot of those in the Claims Commission because it's free to file in the Claims Commission, whereas an inmate has to pay if he goes to federal court. So the allure is to go to the Claims Commission first and then seek out later.
Ms. Irby, y'all disagree with that though, correct? Am I correct?
Senator Mark Johnson
Unverified
2:35:05
Well, the commission disagreed with that. They, looking to the claimant's testimony at the hearing, claimant testified that only one person was on the door, that the camera and security lights had been covered up, and that respondent's employee had not made any rounds. There was no allegation in the complaint of deliberate indifference, there are certain elements that have to be stated in order to state a 1983 claim. And in this case, the commission found that this claim sounded negligence, not under 1983. Thank you, ma'am. Senator Johnson.
So, you know, this fellow here was stabbed in the eye. How come
Speaker 76
2:35:48
y'all didn't just go with half on this one? Well,
Senator Mark Johnson
Unverified
2:35:56
in this case, he asked for $50,000. and I'm looking to see where the amount.
Okay, so they awarded him, he testified that he had to pay $3 as a medical copay and they awarded him $7,503 for pain and suffering as well as the cost of his copay. So they gave him $7,500 for pain and suffering and $3 for his copay. He got stabbed in the eye and
Speaker 479
2:36:33
the other guy got stabbed in the back. I don't
Speaker 90
2:36:37
know that we can quantify things, but one guy
Speaker 175
2:36:39
got stabbed six times. This guy got stabbed in the eye. That's not part of the commission's order, but that is how the commission ultimately ruled on damages.
Speaker 413
2:36:52
Thank God. Senator Johnson, he actually had a superficial wound above his eye. But he
Speaker 275
2:37:10
too. Just looking through there, it says, just
looking through this, it says that stab wounds to the face, stomach, arms, and head.
So that's at least three if you count face and head as one, but maybe four stabs.
So I guess I do have a question for you, for the department. You're saying not that this was filed in the wrong place, that's your basis for appeal, not that you weren't responsible for not having the proper security the lights covered and and all those things that that it's not uh that this this claim was not it shouldn't be before the claims commission it should be in federal court not that you're not responsible well i don't i
Senator Bryan King
Unverified
2:38:04
don't think we're responsible at all but i mean it happened and the allegation
Speaker 367
2:38:09
he's making are all Section 1983 allegations. So I don't think the Claims Commission had, I mean, I disagree with the Claims Commission. They had jurisdiction to even hear this claim. You
disagree about the jurisdiction, but as far as negligence on department's behalf, you didn't have the barracks staffed properly at that
time, is what you're saying. So that should have been to federal court. We were understaffed, yes,
Speaker 416
2:38:34
sir. That's right. It should have been in federal court.
Okay. Any other questions? Speaker Shepard, you're recognized. Somebody needs
Representative Matthew J. Shepherd
Unverified
2:38:54
to turn off the mic. There. If this was brought as a 1983 action, and if the claimant was successful, then who received a monetary award, how how does that does that then come through the claims commission to the legislature is that
brought to the legislature directly or is that paid some other through some
Speaker 413
2:39:18
other means i believe that's paid out of the out of
Speaker 367
2:39:22
the adc budget somehow it comes out um however the ag you know the ag defends all that and and and handles that so that has to come through some other
Speaker 413
2:39:30
means i I guess you'd have to run an appropriations bill or bring it before the legislature. If it's a certain amount. All right.
Speaker 243
2:39:37
I'd have a motion at the appropriate time, Mr. Chairman.
Are there any other questions? Seeing none, Speaker Shepard, I
Representative Matthew J. Shepherd
Unverified
2:39:47
recognize your motion. In light of this issue concerning the 1983 action, which would properly be in federal court, I am concerned about, it may be that it's properly here, it may be that it's proper that we award damage, but I'm also concerned about the potential precedent that is set. And what I would move is
that we hold this over for a month and that we ask the Bureau maybe to provide some research on the distinction between what's appropriate through the Claims Commission and what's appropriate through a 1983 action. By the same token, I don't know if the Claims Commission would have anything else to offer, but if ADC wanted to offer additional information, I think that would be appropriate. I feel like that for the benefit of the committee as a whole, it's important to
understand that because whatever we do, not that it's binding precedent, but certainly could incentivize folks proceeding in a certain manner. We may end up with a lot more of these types of cases. And so I just think it would be beneficial at this point. So that would be my motion to hold over. So
we have a motion and a second. Is there any discussion on the motion? Seeing none, all in favor say aye. Aye. Opposed, no. Motion
carries. Members, this is where we're at, right? Okay.
Members, part one of the agenda contains, oh, part I of the agenda contains a claim presented by the Treasury of the State under Arkansas Code annotated 19-5-601E, which the Claims Commission has transmitted for inclusion in its appropriation bill. Will someone from
the Treasury's office please come to the table, introduce yourself, and present the claim?
Speaker 485
2:42:03
Thank you, Madam Chair. David Scott. I'm State Treasurer's Chief Counsel. Um, what we have, um, go ahead, Rachel.
Speaker 486
2:42:16
Rachel Garrett, the local government services with the Arkansas State
Speaker 485
2:42:22
Treasurer. Thank you, Madam Chair. What we have before us is a recalculation of the actual population based upon a request from Sheridan to the U.S. Department of Commerce and the Census Bureau.
They asked regarding a boundary question, and the Census Bureau came back to Sheridan and actually changed their 24-decennial census from the Census Bureau. was changed as of April 1, 2020 for Sheridan and Arkansas to 5,011 persons, and it was originally reported at 4,920, and according to Arkansas Code 19-5601E, and I could quote
it, but we at Treasury are to recalculate the revenues due to the cities, and in this particular case, Sheridan should have received an additional $2,913.61 in additional general revenues, $10,688.33 in additional special revenues, $877.48 in additional highway severance
revenues, $5,024.95 in additional four-lane highway construction revenues, and $1,355.58 cents and additional wholesale fuel tax revenues, all based upon that recalculation, based upon a boundary calculation from census. Are there any questions? Seeing no questions, do
I have a motion
to approve inclusion of this claim on the appropriation bill? I've got a motion and a Second. Is there any discussion? Seeing no discussion, all in favor say aye. Opposed, no. Motion carries. This concludes our agenda. Seeing no further business, this
Speaker 487
2:44:43
meeting is adjourned. That's some interesting case.
Unknown speaker
2:44:59
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Agenda
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