Ford v Keith

Decision Date22 July 1999
Docket Number99-136
Citation996 S.W.2d 20
PartiesBill J. FORD, Bank Commissioner of Arkansas v. A.M. KEITH 99-136 ___ S.W.2d ___ Opinion delivered
CourtArkansas Supreme Court

Appeal from Pulaski Circuit Court; David B. Bogard, Judge; Arkansas Bank Commission reversed; Circuit Court affirmed.

1. Administrative law & procedure -- appellate review -- limited scope. -- In an appeal from an administrative order, the appellate court's review is directed to the agency's decision, not the circuit court's; when reviewing administrative decisions, the court will review the entire record to determine whether there is any substantial evidence to support the administrative agency's decision, whether there is arbitrary and capricious action, or whether the action is characterized by abuse of discretion; the court recognizes that administrative agencies are better equipped than courts, by specialization, insight through experience, and more flexible procedures to determine and analyze underlying legal issues affecting their agencies; this recognition accounts for the limited scope of judicial review of administrative action and the refusal of the court to substitute its judgment and discretion for that of the administrative agency.

2. Administrative law & procedure -- appellate review -- agency decision supported by substantial evidence not reversed. -- Evidence is given its strongest probative force in favor of an agency's ruling, and the appellate court will not reverse an agency decision when there is substantial evidence to support it; to determine whether a decision is supported by substantial evidence, theappellate court reviews the entire record to ascertain if it is supported by relevant evidence that a reasonable mind might accept as adequate to support a conclusion.

3. Statutes -- construction -- basic rule. -- The basic rule of statutory construction is to give effect to the intent of the legislature; where the language of a statute is plain and unambiguous, the appellate court determines legislative intent from the ordinary meaning of the language used; the first rule in considering the meaning of a statute is to construe it just as it reads, giving the words their ordinary and usually accepted meaning in common language; the statute should be construed so that no word is left void, superfluous, or insignificant; and meaning and effect must be giving to every word in the statute if possible; the construction of a state statute by an administrative agency is not overturned unless it is clearly wrong.

4. Administrative law & procedure -- agency interpretations of statutes --deference to. -- Ordinarily, agency interpretations of statutes are afforded great deference, even though they are not binding; however, although an agency's interpretation is highly persuasive, where the statute is not ambiguous, the appellate court will not interpret it to mean anything other than what it says.

5. Statutes -- presumption of constitutionality -- challenger's burden. --Statutes are presumed constitutional, and the burden of proving otherwise is on the challenger of the statute.

6. Banks & banking -- state banks -- authority to adopt plan of exchange --statute clear & unambiguous. -- Arkansas Code Annotated § 23-48-601 (Supp. 1997) is clear and unambiguous in stating that a plan of exchange may be effectuated by a vote by the stockholders to sell "all of the outstanding capital stock"; reading the plain language of the statute, the supreme court could not say that the legislature intended "all" to mean "some."

7. Statutes -- construction -- later changes should be considered only in case of obvious drafting error or omission. -- When the express language of a statute is clear, later statutory changes should only be considered if it is obvious that there has been a drafting error or omission.

8. Banks & banking -- adoption of plan of exchange -- ultra vires of Ark. Code Ann. § 23-48-601 et seq. -- It could not be said that there was a drafting error or omission in the language used by the legislature in Act 89 of 1997, specifically Ark. Code Ann. § 23-48-601 et seq., where the words used were consistent with a valid, recognized procedure, i.e., the establishment of a "phantom bank" to accomplish the "reorganization" of a state bank; merely because Act 117 of 1999 changed the language in the statute, thus changing the available procedures to allow a reorganization, did not necessarily mean that an error occurred in the drafting of the 1997 statute; thus, the supreme court held that there was no drafting error or omission in the 1997 statute and that the majority shareholder's actions in approving an Agreement and Plan of Exchange, subsequently approved by appellant Bank Commissioner, were ultra vires of the statute.

9. Administrative law & procedure -- Arkansas Administrative Procedure Act --agency actions governed by exempt from Arkansas Rules of Civil Procedure. -- Agency actions governed by the Arkansas Administrative Procedure Act are exempt from the Rules of Civil Procedure because the Administrative Procedure Act provides a different procedure for the parties to follow.

10. Administrative law & procedure -- majority shareholder & reorganized bank not required to be listed as parties -- notice of proceedings served. --Under the Arkansas Administrative Procedure Act, the majority shareholder and the reorganized bank did not have to be listed as parties but simply had to be served with notice of the proceedings, which was done; although Ark. Code Ann. § 25-15-212(b) (Repl. 1996) allows an interested party to intervene at the discretion of the Bank Commissioner, the majority shareholder and the reorganized bank did not move to intervene, although they were served with the pleadings and appeared at every hearing on the matter, and the Commissioner did not require them to become parties.

11. Banks & banking -- appellant did not challenge remand to Bank Commissioner for further proceedings -- circuit court affirmed. -- Where appellant did not challenge the circuit court's ruling remanding the case to appellant Bank Commissioner for further proceedings based on the court's view that appellee had not been provided "an acceptable opportunity to present evidence or testimony for a fair price for their shares," the supreme court affirmed the ruling of the circuit court reversing appellant Commissioner.

Mark Pryor, Att'y Gen., by: Annamary Dougherty, Ass't Att'y Gen., for appellant.

Williams & Anderson LLP, by: James E. Hathaway III, Timothy W. Grooms, and Patrick Burrow, for amicus curiae Arkansas Bankers Association and Arkansas Community Bankers Association, in support of appellant.

Eichenbaum, Liles & Heister, P.A., by: James H. Penick III and Christopher O. Parker, for appellee.

Lavenski R. Smith, Justice.

Appellant Bill J. Ford ("Ford"), Bank Commissioner of Arkansas, appeals an adverse decision from the Pulaski County Circuit Court in which the court determined that the Bank Commissioner's decision to uphold a bank reorganization was ultra vires of the governing statute, Ark. Code Ann. §23-48-601 et seq. (Supp. 1997), entitled "Reorganization Through Plan of Exchange." The trial court reversed and remanded the matter to the Commissioner for further consideration. On appeal, Ford argues that the Commissioner's decision was not ultra vires of the statute and that the banks should have been made parties to this action. In response, Appellee A.M. Keith ("Keith") argues that the circuit court did not err in finding that the plan of exchange was ultra vires of the statute, that the banks were not required to be made parties to the action pursuant to Ark. R. Civ. Pro. 81(a) and the Administrative Procedure Act, and that Ford's failure to rebut the circuit court's order for remand now renders that decision res judicata and this court cannot change that decision. We reverse the Commissioner.

Facts

This case arises out of the conversion and merger of a state savings and loan into a state bank, and the ultimate freeze-out of the minority stockholders in the bank. For many years, the Benton Savings and Loan Association operated out of Benton, Arkansas, as a state savings and loan association operating under authority of the Arkansas Savings and Loan Board. Keith, a minority shareholder, maintained 66,001 shares out of658,912 shares issued by the savings and loan, or approximately 10.02% of the shares. Union Bancshares of Benton, Inc. ("Bancshares"), an Arkansas holding company, owned 567,575 of the shares, or approximately 87% of the shares. The other shares were owned by various minority stockholders.

In April, 1997, Benton Savings and Loan filed an application with the Savings and Loan Board to move the home office of the Savings and Loan from Benton to Bryant, Arkansas. Mac Dodson, Arkansas Savings and Loan Supervisor, approved this move on May 13, 1997. Shortly thereafter, on July 15, 1997, Benton Savings and Loan's board of directors passed a resolution to convert the Savings and Loan from a state-chartered savings and loan to a state-chartered bank. On July 28, 1997, a majority of the shareholders voted to pass this resolution for conversion, and the Arkansas Bank Commission and State Banking Board approved it on October 16, 1997. The new name of the bank was The Union Bank of Bryant ("Union Bank").

Approximately one month later, Union Bank's board of directors notified all of the shareholders that the directors had adopted an Agreement and Plan of Exchange proposing a cash payment of $18.50 per share by Bancshares for all of the minority stock in the bank, with the goal being that the bank would be wholly owned by Bancshares. Notice of the adopted Agreement also included notice that a special meeting of the shareholders would be held on December 16, 1997. The purpose of the special meeting would be to vote on the Agreement and, if approved by a majority of the shareholders, a hearing would be held the same day with the Arkansas Bank...

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