Cenark Investment Group, LLC v. Larry Walther, Secretary of the Arkansas Department of Finance and Administration

2023 Ark. 30

• Court: Supreme Court of Arkansas
• Decided: March 9, 2023
• Status: Published

Opinion

Cite as 2023 Ark. 30 SUPREME COURT OF ARKANSAS No. CV-22-283

CENARK INVESTMENT GROUP, LLC Opinion Delivered: March 9, 2023 APPELLANT APPEAL FROM THE PULASKI V. COUNTY CIRCUIT COURT [NO. 60CV-21-998] LARRY WALTHER, SECRETARY OF THE ARKANSAS DEPARTMENT OF HONORABLE TIMOTHY DAVIS FOX, FINANCE AND ADMINISTRATION JUDGE APPELLEE

REVERSED AND REMANDED.

JOHN DAN KEMP, Chief Justice

Appellant Cenark Investment Group, LLC, appeals the Pulaski County Circuit

Court’s order affirming a decision of the Arkansas Department of Finance and

Administration (DFA) concerning certain adjustments in the sum of $54,820 to Cenark’s

taxable income and to its shareholders’ accounts for tax years 2016 through 2018. For

reversal, Cenark argues that the circuit court erred in affirming DFA’s decision on the basis

of its erroneous interpretation of Arkansas Code Annotated section 26-18-406 (Repl. 2020),

which provides that a suit in circuit court to contest a DFA assessment “shall be tried de

novo.” We reverse and remand.

Cenark initiated an administrative proceeding pursuant to the Arkansas Tax

Procedure Act, codified at Arkansas Code Annotated sections 26-18-101 et seq. (Repl. 2020), to protest proposed assessments by DFA. On administrative appeal, the administrative law

judge sustained DFA’s assessments.

Cenark filed a complaint and an amended complaint against appellee Larry Walther,

Secretary of DFA, seeking judicial review of DFA’s assessments under section 26-18-406.

DFA answered, and pursuant to the circuit court’s briefing order, both parties submitted

pretrial briefs. While Cenark attached several exhibits to its pretrial brief, DFA did not. In

its brief, Cenark reserved the right to present additional evidence at trial. Neither party filed

any dispositive motion, and the circuit court did not hold a hearing.

On February 22, 2022, the circuit court sua sponte entered an order affirming the

decision of DFA and ruling:

On this day came on for consideration Plaintiff’s Complaint filed on February 2, 2021. The court finds that the decision of the Arkansas Department of Finance & Administration should be and is hereby affirmed.

Cenark then filed a motion to set aside the order of dismissal and for new trial, pursuant to

Rule 52 and Rule 59 of the Arkansas Rules of Civil Procedure. Cenark contended that the

order had not been requested by either party and that it had deprived Cenark of its right to

a trial de novo, pursuant to section 26-18-406. DFA did not file a response. On March 28,

2022, the circuit court entered an order denying Cenark’s motion to set aside. Cenark timely

appealed.

This appeal is a companion case to A-1 Recovery Towing and Recovery, Inc. v. Walther,

2023 Ark. ___ (CV-22-281). Like A-1, Cenark raises the same argument that the circuit court

erred in affirming DFA’s decision without affording it a trial de novo pursuant to section

2 26-18-406. Thus, for the reasons set forth in A-1 Recovery Towing and incorporated by

reference herein, we reverse and remand to the circuit court for further proceedings.

WOMACK, J., concurs without opinion.

BAKER, WOOD, and WEBB, JJ., dissent.

KAREN R. BAKER, Justice, dissenting. I dissent for the reasons stated in my dissent

in companion case, A-1 Recovery Towing and Recovery, Inc. v. Walther, 2023 Ark. ___ (Baker,

J., dissenting).

WOOD and WEBB, JJ., join.

Stephen L. Curry; and Wingfield & Corry, P.A., by: Nicolas Corry and Petra Bailey, for

appellant.

Bradley B. Young and Caroline Calvert, Office of Revenue Legal Counel, for appellee.