ARKANSAS COURT OF APPEALS
NOT DESIGNATED FOR PUBLICATION
DIVISION I

CA02-1034

December 10, 2003

RICHARD ANGELL AN APPEAL FROM MILLER

APPELLANT COUNTY CIRCUIT COURT

[CIV00-81-2]

V. HON. JIM HUDSON, JUDGE

COOPER TIRE & RUBBER CO.

APPELLEE AFFIRMED IN PART;

REMANDED IN PART

Wendell L. Griffen, Judge

Following a bench trial, appellant Richard Angell was ordered to repay certain retirement benefits that he received from appellee Cooper Tire & Rubber Company. He appeals from that order and from the subsequent denial of his motion for a new trial. Appellant argues that the trial court should have granted his motion for a new trial because the court committed several evidentiary errors. Alternatively, he argues that the trial court erred in assessing damages. We agree that appellant is obligated to repay the benefits that he received. However, we remand for the trial court to reconsider the award of damages.

Factual and Procedural History

Appellant worked for appellee from 1972 until November 1995. Appellee offered three types of employment benefits that are relevant in this case: short-term accident and sickness benefits (A & S benefits), long-term supplemental disability benefits, and supplemental disability benefits (supplemental benefits). The supplemental benefits were authorized by a letter agreement between appellee and appellant's union, Local No. 752 of the United Steelworkers of America. Under this agreement, a permanently disabled employee who established entitlement to a disability pension under appellee's long-term disability plan could also receive supplemental benefits. However, any employee receiving supplemental benefits would be required to reimburse appellee if the employee received social security disability benefits for the same period in which he received supplemental benefits.

Appellant was injured at work in 1992. In November 1995, he ceased working due to his injuries. In April 1996, appellant filed for long-term supplemental disability benefits with appellee. As part of this application process, appellee required appellant to apply for social security disability benefits. In connection with his application for long-term supplemental disability benefits, appellant signed a form entitled, "Disability Pension Information Form" which contained the following language in paragraph 3:

If my initial claim for a Disability Insurance Benefit under the Federal Social Security Act is denied, I will receive an additional amount of pension from the Company. Should my disability later be recognized as payable by the Social Security Administration for any period of time during which I received additional pension benefits, I will refund to the Company, all additional pension benefits for such period.

This form further stated at the bottom, "I have received a copy of this form." The form was signed by appellant and Ricky Norton, appellee's local benefits manager.

Although appellant was not entitled to receive A & S benefits because he had applied for long-term disability benefits through appellee, his union representative, David Boone, successfully negotiated with appellee to allow appellant to receive A & S benefits. While awaiting determination of his entitlement to long-term disability benefits through appellee and determination of his entitlement to social security disability benefits through the federal government, appellant received $6,690.43 in A & S benefit from appellee. Although the Social Security Administration initially rejected appellant's application for social security disability benefits, in February 1998, appellee accepted appellant's request for long-term disability benefits. Beginning in March 1998, appellant received both long-term disability benefits and supplemental benefits from appellee.

The retroactive amount of supplemental benefits were paid to appellant in a lump sum on March 3, 1998. Because appellee was not entitled to receive both short-term A & S benefits and long-term disability benefits during the same time period, appellee deducted from the lump sum the $6,690.43 in A & S benefits it had previously paid. Appellant received a check dated March 1998, for $13,022.21, representing supplemental benefits retroactive from May 1996 through February 1998. This check was introduced at the hearing as Plaintiff's Exhibit 4. The notation line on the check states: "5/96 - 2/98 Retro Disability Supplement less $6990.43 net A & S payback." After this lump sum payment, appellee began prospectively paying appellant $955.12 per month in supplemental benefits, in addition to his long-term disability benefits.

Meanwhile, appellant appealed the denial of his entitlement to social security disability benefits, and ultimately was approved to receive social security disability benefits retroactive (coincidentally) to May 1, 1996. Appellee, unaware that appellant had begun receiving social security benefits, continued to pay appellant's supplemental benefits.

Appellee discovered in September 1999 that appellant had been approved for social security benefits. Appellee notified appellant by a letter from Norton, dated September 16, 1999, that it would discontinue sending supplemental benefits, and stated that "once we have received your reimbursement, [we] will begin the Special Medicare Supplement Benefit."1 Appellee demanded in the letter that appellant repay a total of $39,159.92, representing forty-one payments of $955.12. Appellant refused to reimburse appellee, and appellee thereafter sued appellant for breach of contract, again demanding $39,159.92 in damages for payments for supplemental benefits received from May 1998 onward.

A bench trial was held on February 7, 2002. Although appellant pleaded no defenses, affirmative defenses, or counterclaims, he raised several objections and presented evidence of defenses and counter-claims.2 First, appellant objected to the introduction of the Disability Pension Information Form and the letter agreement based on the best evidence and hearsay rules. Appellant also cross-examined Norton in an effort to demonstrate that Norton had no knowledge of how many payments appellant had received. However, appellant did not object to the admission of Norton's testimony when Norton admitted that his knowledge of the payments resulted from checking with the corporate office, and that he did not make the payments or see records of the payments. Finally, appellant asserted that damages had been improperly computed. The trial court found in favor of appellee.

Appellant subsequently moved for a new trial, essentially repeating the arguments that he made at trial. First, he asserted that the assessment of forty-one payments of $955.12 for a total of $39,159.92 in supplemental benefits was in error. Because the complaint alleged reimbursement for supplemental benefits received from May 1, 1998, onward, and because there are only sixteen months between May 1, 1998, and August, 1999, when the benefits were discontinued, appellant argues that the maximum amount owed, if any, would be $15,281.92 ($955.12 x 16 months).

Appellant also asserted that the trial court erred in allowing Norton to testify and to introduce a copy of the Disability Pension Information Form, based on the best evidence and hearsay rules. Although appellant failed to object to the admission of the letter agreement between appellee and the union, he further asserted that the trial court erred in admitting the letter, also based on the best evidence and hearsay rules. Relatedly, appellant's third argument in his motion for a new trial was that the letter between appellee and the union representative could not be used to obligate appellant, because appellant did not sign the agreement, and because Boone was not authorized to enter the agreement for him.

Finally, although he had raised no objection to Norton's testimony, appellant argued in his motion for a new trial that the trial court erred in allowing Norton to testify regarding how many payments appellant received when Norton did not have any personal knowledge of the payments and did not make the payments or see records of the payments. Appellant requested a new trial, or alternatively, requested that the judgment be set aside and judgment entered in conformity with the pleadings, which would obligate him, at the most, to repay $15,281.92. The trial court denied appellant's motion for a new trial and granted appellee's motion for attorney's fees.

Appellant's motion for new trial was premised on the arguments that the judgment was clearly contrary to the preponderance of the evidence under Arkansas Rule of Civil Procedure Rule 59(a)(6) and was based on an error of law under Rule 59(a)(8) because the court erroneously admitted the Pension and Disability Information Form and the letter agreement. When a motion for a new trial is made under Rule 59 (a)(6) on the ground that the verdict is clearly contrary to the preponderance of the evidence, we affirm if the verdict is supported by substantial evidence, giving the verdict the benefit of all reasonable inferences in accordance with the proof. Bearden v. J.R. Grobmeyer Lumber Co., 331 Ark. 378, 961 S.W.2d 760 (1998). We will affirm a trial court's refusal to grant a new trial under Rule 59(a)(8) absent an abuse of discretion. Burnett v. Fowler, 315 Ark. 646, 869 S.W.2d 694 (1994).3 We hold that the trial court's findings were supported by substantial evidence and that the court committed no abuse of discretion in denying appellant's motion for a new trial.

I. Reimbursement of the Supplemental Benefits

We first examine whether the evidence supporting appellant's obligation to repay supplemental benefits was improperly admitted. The trial court found that the Disability and Pension Form and the letter agreement, combined, indicated that the parties entered into a contract requiring appellant to repay any supplemental benefits for the same period in which he received any social security benefits.

As he argued at trial, appellant now asserts that the Pension and Disability Form was admitted in error because it violated the best evidence rule and because it was hearsay. Appellant asserts that his signature only demonstrates that he received a copy of the form. Further, he notes that there was no testimony that the original was lost, destroyed or could not be produced. Finally, he argues that he did not "accept" the form because it was incomplete. Therefore, appellant maintains that the copy of the form was not the best evidence and constituted inadmissible hearsay.

The best evidence rule requires that to prove the content of a writing, the original writing must be submitted, unless otherwise provided in the rules adopted by the Arkansas Supreme Court. Ark. R. Evid. 1002. However, a duplicate is admissible to the same extent as an original, unless a question is raised as to the authenticity or continuing effectiveness of the original, or if it would be unfair to admit the duplicate. Ark. R. Evid. 1003. A hearsay statement is a statement, other than one made by the declarant while testifying at the trial or hearing, that is offered in evidence to prove the truth of the matter asserted. Ark. R. Evid. 801©). A statement that would otherwise be hearsay is admissible if the statement is offered against a party and is his own statement or is a statement of which he has manifested his adoption or belief in its truth. Ark. R. Evid. 801(d)(2).

We hold there was no error in admitting the Disability and Pension Rights Form because the form was admitted as a party admission. Further, the best evidence rule does not bar its admission, because there is no genuine question as to its authenticity and it is not unfair to admit it. Norton testified that he personally explained the contents of the form to appellant and saw appellant sign the form. More significantly, appellant admitted during the hearing that he had signed the form and conceded in his requests for admission, which were introduced into the record, that he executed a Disability and Pension Rights Form, dated April 25, 1996, of which a true and correct copy was attached to the requests for admission as Exhibit A. This Exhibit A is an identical copy of the Disability Pension Information Form that appellee sought to admit at the trial. Further, in his responses to requests for admission, appellant agreed that if the Social Security Administration provided benefits for any period of time during which he received additional pension benefits, he would refund to appellee all additional benefits received for that period.

Thus, the Disability and Pension Rights Form was offered against appellant, who clearly manifested his adoption or belief in its truth by his signature on the form and by his admission that he agreed to repay additional benefits. See Haynes v. Director of Labor, 19 Ark. App. 71, 719 S.W.2d 437 (1986)(holding that statements signed by an employee and furnished to the employment security agency in the course of applying for unemployment compensation were party admissions). Further, appellant's admissions that he signed the form and that he agreed to the specific language quoted from that form indicating that he would repay the benefits vitiates his assertions that the best evidence rule compelled admission of the original. On the facts, there is no genuine question as to authenticity of the form and there is no evidence to support that it would be unfair to admit it. Therefore, we hold that the Disability and Pension Rights Form was not hearsay because it was properly admitted as a party admission and we further hold that the best evidence rule did not bar its admission.

Similarly, we hold that the letter agreement between appellee's employment relations manager, Gary Roberts, and the union's president, Charles Starks, was properly admitted. The letter, dated March 6, 1993, states:

Reference is made to the monthly amount of Disability Pension payable under Paragraph 5.3 of the 1993 Agreement on Employee Benefit Programs.

In the administration of such Paragraph 5.3, it is hereby agreed that:

An employee upon his application for a Disability Pension, shall also make application for a Disability Insurance Benefit under the Federal Social Security Act, and shall take all reasonable and necessary action, including a request for reconsideration of an initial denial, in order to assure proper consideration of such application. The Company shall render assistance to an employee in his request for a reconsideration of an initial denial of an award for a Disability Insurance Benefit under the Federal Social Security Act.

If the employee has made an application as described in this letter for a disability Insurance Benefit under the Federal Social Security Act and such application has been denied, such employee until he attains his Normal Retirement Date, or, if earlier, until he becomes eligible for an unreduced primary old age insurance benefit or unreduced disability benefit under the Federal Social Security Act from time to time in effect, shall be entitled to receive an additional amount equal to his pension payable under Paragraph 5.3. The monthly benefit payable under this letter shall be payable retroactively to the date of the Employee's retirement.

Any amount payable under this letter will be paid directly the Company as a supplementary payment.

Appellant argues that the trial court erred in finding that the letter agreement obligated him because he did not sign the agreement and because the union president was not authorized to enter into the agreement for him. However, appellant concedes that he did not object to this letter when it was admitted. Nor did he object when the court indicated that it relied on this letter in finding that appellee was obligated to repay the additional benefits. Therefore, appellant has waived any objection that he has to the letter agreement. See Collins v. Keller, 333 Ark. 238,969 S.W.2d 621 (1998). Even if the letter agreement was admitted in error, the error was harmless, given appellant's admission that he signed the Disability Pension Information Form and that he agreed to repay to appellee any additional benefits that appellee furnished to him, if he was approved for social security disability benefits.

Accordingly, we hold that the trial court did not err in admitting the Disability and Pension Form and the letter agreement. In addition, we hold that substantial evidence supports the trial court's finding that appellant was liable to repay the supplemental benefits that he received. Therefore, we hold that the trial court did not err in denying appellant's motion for a new trial.

II. Norton's Testimony Concerning Payments

Appellant further argues that the court improperly allowed Norton to testify that appellant had received forty-one supplemental disability payments, at the monthly rate of $955.12, even though Norton had no personal knowledge of the payments, did not write the checks, and did not see a record of the payments.

Norton testified at length regarding the computation of appellant's benefits. His testimony included the following exchange, upon which appellant bases his argument on appeal:

Question: And you have no personal knowledge of how many checks he received. You just know how many months between when you wrote that letter. You don't even know whether he was receiving those checks during that period of time, do you?

Answer: Yes. I confirmed with our Findley office that he received those checks before I wrote my letter.

Appellant maintains that Norton's testimony regarding the number of payments that had been received was hearsay, in that it was based upon what someone else told him, and was asserted for the truth of the matter. Further, he argues that Norton's testimony does not fall under any exception to the hearsay rule, because he was not the custodian of the business records and had no personal knowledge of the records.

Again, appellant's argument must fail. First, while appellant cross-examined Norton at length, he did not object to the admission of his testimony. Therefore, appellant has waived his objection to Norton's testimony in this regard. See Collins v. Keller, supra.

Second, the circuit court could have properly admitted the testimony under the business-records-hearsay exception. This exception allows a witness to testify as to records of regularly conducted business activity. Ark. R. Evid. 803(6). Appellant does not challenge that the payment records were records of regularly conducted business activity, only that Norton was not the custodian of the records and had no personal knowledge of how many payments appellant had received. However, Rule 803(6) does not require that the witness testifying about the records be the custodian of the records or have personal knowledge of the actual creation of the documents in question. Wildwood Contractors v. Thompson-Holloway Real Estate Agency, 17 Ark. App. 169, 705 S.W.2d 897 (1986). Whether the witness has personal knowledge of the document merely goes to the weight of the evidence, rather than its admissibility. Id.

Finally, even if the admission of Norton's testimony was in error, it was harmless error, because appellant admitted during the trial, that he received benefits from March 1998 through September 1999. Therefore, we hold that the trial court did not err in admitting Norton's testimony regarding the number of supplemental benefit payments that appellant received.

III. Reimbursement of Accident and Sickness Benefits

Appellant further argues that the court erred in allowing appellee to recover $6,990.42 for A & S benefits, based on the agreement between Norton and David Boone, the vice-president of appellant's union. Appellant maintains that Boone was not authorized to represent him on non-union related matters and that there was no proof that he approved of the agreement that Boone made with Norton.

Nonetheless, even if the agreement was unauthorized, appellant clearly ratified the agreement by accepting the A & S benefits. The check appellant received in March 1998specifically indicated that it was reduced by $6,690.43 for A & S benefits paid from May 1996 through March 1998. Even if appellant did not authorize the agreement and had no advance notice of it, he was clearly placed on notice that he had received A & S benefits when he received and cashed the check. It is well-settled in Arkansas that, when the principal has knowledge of the unauthorized acts of his agent, and remains silent when he should speak, or accepts the benefit of such acts, he cannot thereafter be heard to deny the agency but will be held to have ratified the unauthorized acts. Hot Stuff, Inc. v. Kinko's Graphic Corp., Inc., 50 Ark. App. 56, 901 S.W.2d 854 (1995). Therefore, we agree that appellant is also obligated to repay the A & S benefits that he received.

IV. Damages

Although we agree that appellant is obligated to repay the supplemental benefits received from May 1996, when he became eligible for social security disability benefits, and the A & S benefits received from May 1996 through March 1998,4 we are unable to affirm the award of damages because we cannot ascertain whether the award was correctly computed. The trial court awarded $38,159.92, which is $1,000 less than the amount requested by appellee. Appellee asserted that its request of $39,159.92 represents forty-one payments of $955.12, which appellant received from March 1998 (retroactive to May 1996) through October 1999.5

In an appeal from bench trial, where we are unable to determine the basis for the trial court's award of damages, we may remand for the limited purposes of clarifying the method used to determine damages and to correct any erroneous calculations. See Glover v. Woodhaven Homes, Inc., 346 Ark. 397, 57 S.W.2d 211 (2001) (noting that the Arkansas Court of Appeal's prior decision purporting to reverse and remand a judgment did not actually reverse or vacate the original judgment where the court of appeals ordered the trial court to clarify the method used to determine damages and to correct any erroneous calculations). Moreover, in a bench trial, the appellate courts may remand for reconsideration of an award where the trial judge's order does not explain the basis for denial of an award. Little Rock Wastewater Util. v. Larry Moyer Trucking Inc., 321 Ark. 303, 902 S.W.2d 760 (1995) (reversing and remanding where the trial court's action did not explain the basis for denial of an award of attorney's fees); see also Vereen v. Hardgrove, 80 Ark. App. 385, 96 S.W.3d 762 (2003)(affirming the trial court's refusal to declare a foreclosure but remanding on cross-appeal where the trial court's order did not explain the basis for the denial of an award of attorney's fees).

Here, we cannot ascertain whether the trial court properly awarded damages and we cannot ascertain whether the court denied some of the relief that was requested. First, it is not clear why the court awarded appellee $1,000 less than appellee requested.6 Second, we cannottell if the circuit court awarded appellant credit for the A & S benefits that were deducted from the March 1998 check. The check that appellant received in March 1998 for retroactive benefits, clearly shows the following on the notation line: "5/96 - 2/98 Retro Disability Supplement less $6990.43 net A & S payback." Despite Norton's testimony that appellee deducted the A & S benefits, appellee maintains that the $6,990.43 remains outstanding. We cannot tell whether appellee has improperly received a double-award for these benefits.

Finally, it is not clear whether the trial court credited appellant for the amount of Medicare premiums that appellee withheld. The letter from Norton to appellant stated that appellee would begin to pay the Medicare premium when appellant repaid appellee for the benefits that he had received. Norton admitted during the hearing that appellee had not paid any Medicare premiums. Because appellant's entitlement to have appellee pay the Medicare premium is undisputed and because it is also undisputed that appellee has not paid any Medicare premiums, the trial court on remand should clarify whether the award includes an offset for the unpaid Medicare premiums.

Accordingly, we agree that appellant is obligated to repay the supplemental benefits that he received from appellee since May 1996, as well as the A & S benefits that he received. We also affirm the trial court's denial of appellant's motion for a new trial. However, because we cannot ascertain whether the trial court properly awarded damages, we remand for the trial judge to clarify the method used to determine damages and to correct any erroneous calculations.

Affirmed in part; remanded in part.

Neal and Crabtree, JJ., agree.

1 The Special Medicare Supplement Benefit paid by appellee is the Medicare insurance premium paid by those receiving social security disability benefits.

2 Although not mentioned by either party, Arkansas Rule of Civil Procedure 15(b) allows issues not raised in the pleadings to be tried as if they had been raised in the pleadings, where the issues are tried by express or complied consent of the parties. Here, appellee objected to appellant's evidence and claims on several occasions on the ground that appellant pleaded no defenses, affirmative defenses, or counterclaims. However, Rule 15(b) also provides that if evidence is objected to as outside of the pleadings, the court may still allow the pleadings to be amended, in its discretion, and may allow the objecting party a continuance. Appellee did not request a continuance, nor did the trial court grant one. It does appear, however, that the court considered the pleadings to be conformed to the evidence.

3 Appellant raises several arguments that were not raised in his motion for new trial. However, because Rule 59(f) specifically states that a motion for new trial is not required to preserve for appeal an error which could be the basis for granting a new trial, we may address those issues that were properly raised before the trial court.

4 Appellant asserts that he is only obligated to repay payments received after May 1, 1998. While it is true that is what appellee asserted in the pleadings, the evidence demonstrated that appellant agreed to repay any supplemental benefits received during the same time period in which he received social security disability benefits, which obligates appellant for payments received since May 1996. If Rule 15(b) is to inure to appellant's advantage where he did not assert any defenses, affirmative defenses or counterclaims, then it certainly should inure to appellee's benefit as well, where its complaint was simply inartfully drafted.

5 Appellee's explanation of damages is as follows:

$955.12 x 19 = $18,147.28 (19 payments from March 1998 through October 1999).

$18,147.28 + $13,022.21 (payments from May 1996, paid in March 1998) =$31,169.49.

$31,169.49 + $6,990.43 (A & S benefits) = $38,159.92 (judgment amount).

6 It could be that the court agreed with appellant that damages for the retroactive amount of supplemental benefits paid was incorrect, but we cannot say for sure. Appellee asserted that appellant received forty-one months of benefits. At the outset, it appears that number should be reduced to forty, because there is no evidence that appellant received an October 1999 payment. Appellant testified that he received supplemental benefits from March 1998 through September 1999. Further, the letter from Norton to appellant stated, "Please remit to Cooper Tire & Rubber Company Retirement Trust the sum of $39,159.92. This represents 41 monthly payments of $955.12. Your October 1999 retirement check will not have the disability supplement." In addition, Norton testified that he informed appellant in the letter that his October 1999 retirement check would not include the disability supplement.

Because appellant received eighteen payments between March 1998 and September 1999, that leaves twenty two additional payments for which he is liable, for those payments received for May 1996 through February 1998, for which appellant was paid in March 1998. Twenty-two multiplied by $955.12 equals $21,012.64. This sum, $21,012.64 minus $6,690.43, received for A & S benefits, equals $14,022.21. However, in March 1998, appellant received only $13,022.21.