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Harley v. Dempster

Court of Appeals of Arkansas, Divisions II, III, IV

December 7, 2016




          Ballard & Ballard, P.A., by: Andrew D. Ballard, for appellant.

          Hicks & Associates, P.A., by: Carrol Ann Hicks, for appellee.

          DAVID M. GLOVER, Judge

         Chelsea Harley and Wyndham Dempster are the parents of two children, L.D. and W.D. The Office of Child Support Enforcement (OCSE) pursued an action against Dempster to enforce his obligation to support the children. On January 31, 2008, the trial court entered a default judgment of support, ordering Dempster to pay designated amounts to meet his child-support obligation. On March 19, 2015, OCSE filed a motion to modify support and for past-due child support. Following a hearing, the trial court entered an order of modification on July 16, 2015. The order increased Dempster's child-support obligation to $160 a week and ordered him to pay $7, 079 in child-support arrearage, after crediting him $9, 464 for the period of time the parties lived together and $6, 000 for payments made to the children's school by his parents.

         This appeal followed. It was filed by Chelsea as appellant, not OCSE. Chelsea contends 1) the trial court erred in allowing Dempster to claim the affirmative defense of set-off for the first time at trial because he had failed to raise it in a pleading; 2) the trial court abused its discretion in allowing an offset because its decision did not conform to Arkansas Code Annotated section 9-14-236; and 3) the trial court's determination that the children's grandparents' payment of their school tuition constituted support was clearly erroneous. We are unable to determine that Chelsea has standing to bring this appeal. For this reason, we cannot address the merits of her arguments and must dismiss the appeal. We do not dismiss appeals lightly; this appeal has generated a vigorous debate among nine judges on our court. A majority of the nine judges has concluded we have no choice but to dismiss this appeal because it is not apparent from the record before us that Chelsea has standing to bring it.

         The authors of Arkansas Civil Practice & Procedure explain in part:

As a threshold matter, the appellant must have standing to appeal. This is not a problem in most cases. If the appellant was a party to the action in the trial court and aggrieved by the judgment, the standing requirement is satisfied. . . . .
A person who was not a party to the action below generally lacks standing to appeal. However, a person whose pecuniary interests are affected by the judgment has standing to seek appellate review even though he or she was never made a party.

         David Newbern, John Watkins & D.P. Marshall, Jr., Arkansas Civil Practice and Procedure § 40:1 (5th ed. 2010). In Phillipy v. O'Reilly, 95 Ark.App. 264, 266-67, 236 S.W.3d 548, 550-51 (2006), our court explained,

Guidance on standing is provided by three recent cases from our supreme court that cite In re $3, 166, 199, 337 Ark. 74, 987 S.W.2d 663 (1999). In that case, the supreme court reiterated the general rule regarding standing, "that an appellate court cannot act upon an appeal taken by one not a party to the action below." Id. at 79, 987 S.W.2d at 666. Under our rules of civil procedure, party status is generally obtained by initiating an action through filing a complaint or responding to a complaint by answer. Id.; see also Cogburn v. Wolfenbarger, 85 Ark.App. 206, 148 S.W.3d 787 (2004) (finding standing where an individual was served with notice of a hearing, filed an answer, and appeared at both the temporary and permanent hearings to contest the guardianship). It is also possible to become a party by intervention under Ark. R. Civ. P. 24 (2005), or by joinder under Ark. R. Civ. P. 19 (2005). In re $3, 166, 199, supra.; see also Beebe v. Fountain Lake School Dist., 365 Ark. 536, 231 S.W.3d 628 (2006) (finding standing based on collective basis related to prior party status, intervention, and constitutionality of a statute). In this case, none of these situations apply to appellant; therefore, he does not have standing as a party to the action to bring this appeal.
Arkansas appellate courts have recognized two other circumstances in which a nonparty may gain standing to pursue appellate review of a trial court's orders. The first occurs when a nonparty seeks relief under Ark. R. Civ. P. 60(k) (2005), which provides that an independent action may be filed to relieve a person from judgment who was not actually served with process. In re $3, 166, 199, supra. Appellant is not seeking this type of relief, as nothing was required of him pursuant to the trial court's order, so this exception is likewise inapplicable.
The final possible scenario would apply in the unique set of facts where any appella nt, though not a party, has a pecuniary interest affected by the court's disposition of the matter below. In Swindle v. Benton County Circuit Court, 363 Ark. 118, 211 S.W.3d 522 (2005), our supreme court determined that an appellant had standing based upon this "pecuniary interest" exception where he was ordered by the circuit court to reimburse the public defender's office $150 for interpreting services that were provided to his Spanish-speaking client. The trial court had stated that the appellant was privately retained by his client and that it was his responsibility to make sure that the fee was paid. The supreme court addressed the standing issue, although it was not raised by the appellee, and found that because the costs were assessed against the appellant personally, he had standing as a nonparty to request appellate review. Additionally, in Springdale School Dist. No. 50 v. The Evans Law Firm, P.A., 360 Ark. 279, 200 S.W.3d 917 (2005), the supreme court determined that an attorney had standing to bring an appeal related to the circuit court's disposition of his attorney's fee in a case. The supreme court first pointed out that the attorney had specifically intervened with respect to the attorney's fee issues, and that would likely have been sufficient; however, the supreme court also addressed the fact that his direct pecuniary interest gave him standing to bring the appeal with respect to the attorney's fee issue.

         Thus, in the context of this discussion, the term "party" has distinct and consequential meanings. Here, it is undisputed that Chelsea, as "OCSE Assignor, " assigned to OCSE her rights regarding the child-support arrearage. The July 16, 2015 order she is attempting to appeal provides, in part,

2. The State of Arkansas, Office of Child Support Enforcement, is involved in the establishment and enforcement of a support obligation order herein pursuant to its rights and responsibilities under Ark. Code Ann. § 9-14-210(d) under which CHELSEA S. HARLEY is the recipient of services under Title IV-D of the Social Security Act or has signed a contract for services. . . . .

Arkansas Code Annotated section 9-14-210(d) (Repl. 2015), explains

(d) The State of Arkansas is the real party in interest for purposes of establishing paternity and securing repayment of benefits paid and assigned past-due support, future support, and costs in actions brought to establish, modify, or enforce an order of support in any of the following circumstances:
(1) Whenever public assistance under the transitional employment assistance program, i.e., Temporary Assistance for Needy Families Program, or § 20-77-109 or § 20-77-307 is provided to a dependent child or when child support services continue to be provided under 45 C.F.R. 302.33 as it existed on January 1, 2001;
(2) Whenever a contract and assignment for child support services have been entered into for the establishment or enforcement of a child support obligation for which an automatic assignment under § 9-14-109 is not in effect;
(3) Whenever duties are imposed on the state in Title IV-D cases pursuant to the Uniform Interstate Family Support Act, § 9-17-101 et seq.; or
(4) When a child is placed in the custody of the Department of Human Services and rights have been assigned under § 9-14-109.

Section 9-14-210(e) provides in part that in any action brought to enforce a child-support obligation, the Department of Human Services or the office, or both, or their contractors, may employ attorneys, and that an attorney so employed shall represent the interests of the Department of Human Services or the office and "does not represent the assignor of an interest set out in subsection (d) of this section." Moreover, "[r]epresentation by the employed attorney shall not be construed as creating an attorney-client relationship between the attorney and the assignor of an interest set forth in subsection (d) [.]" Finally, section 9-14-210(f)(2) provides that "for the benefit of the court clerk, in any action brought by the Department of Human Services or the office, or both, or their contractors, pursuant to subsection (d) of this section, the name of the physical custodian shall be set out in the body of any petition filed and order entered in the matter."

         Chelsea is the physical custodian for the children and was clearly an interested person regarding this lawsuit, but she had assigned to OCSE her rights to the child-support arrearage. The State of Arkansas, via OCSE, was the real party in interest pursuant to section 9-14-210(d), and initiated the lawsuit, as plaintiff, against Dempster, as defendant. In the caption of every document filed in the trial court, the State (OCSE) is shown as the plaintiff, Wyndham Dempster is shown as the defendant, and Chelsea Harley is shown as "OCSE Assignor." Chelsea was never a party to the action, and we have been unable to find legal authority to support the notion that an assignor is somehow automatically elevated to party status in order to bring an appeal.

         The record before us also does not reveal how Chelsea's pecuniary interests have been affected by the trial court's decision. The July 16, 2015 order does not grant the child-support-arrearage judgment to Chelsea. Instead, it very specifically grants the judgment to OCSE:

5. . . . Therefore, the OCSE is granted Judgment in the amount of $7, 079.00 in past due child support as of June 26, 2015. WYNDHAM S. DEMPSTER, SR. is ordered to pay the sum of $32.00 weekly in addition to current support previously ordered to be applied to said judgment.

(Emphasis added.) Accordingly, the judgment was awarded to OCSE, with no indication that any Title IV funds Chelsea might receive are reduced by the trial court's decision, or that OCSE turns over to her the $32 Dempster has been ordered to pay OCSE weekly, which understandably would have been a larger amount if payment of the entire arrearage had been ordered. In other words, on this record, OCSE's pecuniary interests suffered, but we have no basis for concluding that Chelsea's did. While the dissenting judges may have personal knowledge and experience leading them to the conclusion that Chelsea's pecuniary interests have suffered as a result of the trial court's decision, this information is not apparent from the record before us or from our research of the law.

         Neither is Rule 17 of the Arkansas Rules of Civil Procedure applicable to the situation presented by this appeal. It provides in part that

(a) Real Party in Interest. Every action shall be prosecuted in the name of the real party in interest. An executor, administrator, guardian (conservator), bailee, trustee of an express trust, a party with whom or in whose name a contract has been made for the benefit of another, or the State or any officer thereof or any person authorized by statute to do so may sue in his own name without joining with him the party for whose benefit the action is being brought. No action shall be dismissed on the ground that it is not prosecuted in the name of the real party in interest until a reasonable time has been allowed after objection for ratification of commencement of the action by, or joinder or substitution of, the real party in interest; and such ratification, joinder or substitution shall have the same effect as if the action had been commenced in the name of the real party in interest.

         In the instant case, the real parties in interest were represented at trial-OCSE as plaintiff and Dempster as defendant. Therefore, Rule 17 was never brought into play.

         Thus, we are concerned with Chelsea's standing to appeal in light of the fact that she was not the plaintiff below, OCSE was; the child-support-arrearage judgment was not granted to her, it was granted to OCSE; and the record does not demonstrate in any way that her pecuniary interests have suffered as a result of the trial court's decision. We conclude, on the record before us, Chelsea does not have standing to bring this appeal; consequently, we dismiss the appeal.


          Gruber, Whiteaker, Vaught, and Hoofman, JJ., agree.

          Gladwin, C.J., and Virden, Hixson, ...

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