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A legal victory.

Lawyers Win A Big One In 1991; Supreme Court Decision Dubbed One Of State's Biggest

The most important legal battle last year in Arkansas was won by the lawyers.

On July 15, the Arkansas Supreme Court abolished fee caps in court-appointed cases for indigents.

It was a ruling one attorney called "the most important decision by the Supreme Court in this century."

The decision will accomplish two things: it will extend the protections of the court to all citizens and it will help attorneys pay their bills.

Prior to the decision, an Arkansas statute had provided for a fee cap of $350 on most felonies and a $1,000 fee cap for serious felonies, such as a rape, a murder or a major drug offense.

"It's worth noting that on the 200th anniversary of the Bill of Rights, an indigent has a better shot at a level playing field with this decision," says Little Rock attorney Morgan "Chip" Welch, who praises the ruling.

Blair Arnold of the Batesville law firm Murphy Post Thompson Arnold & Skinner spearheaded the action.

"That decision will have a tremendous impact," Arnold says. "It will help indigents and trial lawyers. Some of the cases have literally bankrupted lawyers.

"If you spend 500 hours on a murder case that you're not paid anything for, that's one-third of your income flying out the window."

Arnold estimates that an attorney will spend between 300 to 500 hours working on a serious felony case. In addition to preparing the case, many times an outside investigator must be hired.

That runs $20 an hour at the minimum.

Unless an attorney charges about $2 an hour, he will surpass the $1,000 fee cap quickly. He must eat the rest to do an adequate job, Arnold says.

With the recent decision of the Supreme Court, attorneys now must receive a just fee for their time. The trial court will set the fee, depending on the complexities of the case.

"In effect, we will be paid a fair market price for our services," Arnold says.

Currently, attorneys' fees are paid from county funds.

Arnold says the ultimate economic solution would be to erect a statewide public defender system.

Some expected Gov. Bill Clinton to call a special session on this issue after the landmark decision in July. They're still waiting.

Hit List

Welch, the president of the Arkansas Trial Lawyers Association, says the latest chapter in the on-again, off-again school desegregation case in Little Rock made his Top 10 List of important legal happenings in the state.

The case was transferred in 1991 to U.S. District Judge Susan Wright after years with U.S. District Judge Henry Woods.

"She appeared to have put an end to the long-running case, if not to everyone's satisfaction, at least to resolution," Welch says. "But the case was re-opened. It is the legal equivalent to John Belushi's 'thing that wouldn't leave' character on 'Saturday Night Live.'"

One issue that was resolved in 1991 was the case involving Walloch Home Center and General Electric Credit Corp.

Last December, Walloch filed a voluntary Chapter 11 petition in the midst of the $5-million legal feud with GE Credit.

GE Credit countersued for $1.05 million in damages.

The fight had really begun when GE Credit cut off a $10-million line of credit in February 1989.

The move almost shut Walloch down after 40 years of business and cost the store dearly.

Business fell drastically. Annual sales fell from $5 million to $2 million.

The credit problems also had a trickle-down effect on customers. When GE cut him off, Walloch was unable to arrange financing for many of his customers.

Freddy Walloch fought back -- and won big.

On Aug. 26, he received a large, undisclosed settlement.

He had proved he was overbilled some $2.63 million during one four-month period alone.

During the trial, Walloch showed that GE Credit had overcharged other clients as well.

"We opened this overbilling up for everyone to sue their ass," Walloch later told Arkansas Business. "I could have gotten more money out of GE |in addition~ to punitive damages if I hadn't settled. But they would have dragged this thing out for years.

"I can probably make that back in the next five years. Plus, I've got peace of mind."

Sounds like one happy man.

Now that the important stuff has been reviewed, on to the juicy goings-on.

High-profile divorces were big news in 1991, although not many made the news.

Divorce proceedings of the rich and famous were closed for public consumption more often than not last year.

No Peeking

Big money-men Jack Stephens and Melvyn Bell avoided the spotlight when they parted ways with their spouses.

Stephens filed for divorce from his wife, Mary Anne, in January. Mary Anne countersued in February.

The divorce was granted in June.

In between, Pulaski County Chancellor Lee Munson sealed all "pleadings, exhibits, depositions and trial testimony" to protect confidential financial records and trade secrets.

Munson said the divorce was a private matter with "no overriding public issue or interest."

Pulaski County Chancellor Annabelle Clinton Imber came to a similar conclusion involving Melvyn Bell's divorce from his wife, Darlene.

Other private divorces were Don Pennington, former CEO of Harvest Foods Inc., and his wife Betty; and former Little Rock mayor J.W. "Buddy" Benafield and his wife Deena.

Attorney Philip E. Dixon of the Little Rock law firm Dover & Dixon represented both Darlene Bell and Mary Anne Stephens.

He says the language of an Arkansas statute places the decision of whether to close divorce files in the hands of the chancellors.

More juicy stuff: Attorney General Winston Bryant was flying high on good press and pats on the backs for his take-the-bull-by-the-horns demeanor in his new job.

But Bryant slipped up when it was revealed that he purchased new office furniture for those in his department.

The tab?

About $100,000.

Despite that bit of bad publicity, Bryant has not backed off. The number of lawsuits his office has filed -- including an unheard-of suit against the state Department of Pollution Control and Ecology -- multiplies monthly.

Bryant said that during his first eight months as attorney general he had taken more legal action than predecessor Steve Clark had during his tenure. Bryant ended 1991 by filing a lawsuit against several bingo parlors in the state.

Speaking of Mr. Credit Card, Clark has opened up practice again in Jonesboro.
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Article Details
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Title Annotation:The Year in Review: Law; Supreme Court ruling favors lawyers
Author:Webb, Kane
Publication:Arkansas Business
Article Type:Industry Overview
Date:Dec 30, 1991
Previous Article:Banking on borrowers: state's largest banks continue to grow while S&Ls continue to go.
Next Article:Stunted growth: growth of Arkansas' small businesses falls 54.2 percent due to economic recession.

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