Opinion ID: 2333578
Heading Depth: 1
Heading Rank: 4

Heading: Federal Evidence

Text: We do take this opportunity to resolve one issue that is certain to recur on remand for a determination of damages, which is whether the circuit court may examine evidence taken in federal district court from 1997 to 2003 for purposes of deciding this case. We conclude that it can under the facts of this case. National Enterprises contends that all that occurred in federal district court for that seven-year period became void upon remand to Garland County Circuit Court and that it was as if the federal court proceedings never occurred. National Enterprises's argument is founded on the principle that after remand from federal court, a case stands as if it had never been removed from state court, and what happened in federal court has no bearing on the proceeding in state court. NCS Healthcare of Arkansas, Inc. v. W.P. Malone, Inc., 350 Ark. 520, 527, 88 S.W.3d 852, 856 (2002), accord Steve Standridge Ins., Inc. v. Langston, 321 Ark. 331, 335, 900 S.W.2d 955, 958 (1995) ([R]egardless of what took place in federal court, the state proceedings essentially `picked up where they left off,' which was just after Standridge filed its motion to dismiss.); Trinity Universal Ins. Co. v. Robinson, 227 Ark. 482, 485-86, 299 S.W.2d 833, 836 (1957) (The general rule is that when a case is removed to the Federal Court and remanded, it stands in the State Court in the same position in which it would have been had it never been removed.); Meyers Store Co. v. Armstrong, 187 Ark. 636, 61 S.W.2d 440, 441 (1933) (When a case has been remanded from federal court, it is the duty of the state court to proceed as though no removal had ever been attempted.). However, consistent with this authority, the record shows that the remanded case resumed in Garland County Circuit Court in 2003 as if the 1996 complaint had just been filed in that court. National Enterprises, though, objects to the circuit court's reliance on the federal opinions ( Kessler I , Kessler II , Kessler III , Kessler IV ) rendered in this case, and on the evidence that was developed and filed in those proceedings. Particularly, they object to the evidence that became the supplemental record in this appeal. On remand from this court to the circuit court to settle the record, the Garland County Circuit Court entered its order on October 7, 2004, and itemized the supplemental record materials, all of which derive from the federal litigation, as follows: (a) Memorandum Opinion and Order (entered September 29, 1997, by Hon. Jimm Larry Hendren), [4] (b) Exhibits to Joint Statement of Undisputed Facts, (c) Plaintiffs' First Amended and Substituted Motion for Entry of Judgment and Award of Notice of Judgment in Class Action, [5] (d) Plaintiffs' Reply to Defendants' Response to Plaintiffs' First Amended and Substituted Motion for Entry of Judgment and Approval of Notice of Judgment in Class Action, (e) Answer of Defendants, and (f) Judgment (entered September 23, 2002, by Hon. Jimm Larry Hendren). On October 21, 2004, the Owners supplemented the record on appeal by lodging these materials, as contained in four large 3-ring binders, a single volume, and a single envelope, with this court. The bulk of the supplemental record materials is contained in the four binders and consists of backup documentation to two documents  the Joint Statement of Undisputed Facts, and a document entitled Time-Share Owners Master Damages Spreadsheet as of 9/27/2001. As noted above, the Joint Statement was also an appended exhibit to the Owners' Counter-Motion for Summary Judgment in the circuit court, as was a document entitled Time-Share Owners Master Damages Spreadsheet as of 12/22/2003, which appears to be an updated version of the 2001 spreadsheet. On October 22, 2004, National Enterprises filed its Motion to Limit the Record, or, Alternatively, for Attorneys' Fees and Costs Incurred in the Preparation of the Original Opening Brief, Abstract, and Addendum, on the ground that the supplemental record materials were not part of the record below on the date of the April 19, 2004 hearing, or the entry of the May 14, 2004 order and judgment, which are now on appeal. The motion was docketed as PASSED UNTIL CASE SUBMITTED and is now considered with the appeal. We note in this regard that it is undisputed that the supplemental record materials were in the circuit court clerk's office on April 19, 2004, at the time the circuit court conducted its motion hearing. We disagree with National Enterprises that the evidence in these supplemental record materials cannot be considered by the circuit court in deciding the individual damage claims. The authority cited by National Enterprises precludes the use of federal pleadings in the remanded state-court proceeding but does not address the use of evidence that was developed in the federal action in the state-court proceeding. With respect to that evidence, we conclude that these supplemental record materials can be properly considered by the circuit court when filed in that court. It is somewhat unclear to this court whether these supplemental materials were actually identified as exhibits to the Owners' Response to Motion to Dismiss or for Summary Judgment and Counter Motion for Summary Judgment so as to be considered by the circuit court in the damage calculations in its May 14, 2004 judgment. Regardless, because we are reversing and remanding the damages portion of this case, we have no doubt that this question will be moot after a proper filing of these materials. Because we reverse the damages awarded to the class members due to a lack of notice to the class, we further reverse the circuit court's order directing National Enterprises to pay $1,995,999.67 into the registry of the court. The motion to limit the record or, alternatively, for attorney's fees and costs is denied. Affirmed in part. Reversed and remanded in part.