Hi kgeetvCartoons,
I'm almost certain the problem is that you're using a Smart Bone Action to animate the layer stacking order for the arms, and there are probably keyframes in the lower body rotation control that conflict with or are otherwise overriding the arm layer order keyframes in the upper body rotation control. If this is what's happening, the quick fix is to check the lower body's Smart Bone Action and remove the keyframes for the layer stacking order.
I hope this solves the issue. If not, I have a few more questions. Don't worry, we'll figure it out.
That said, my preference is to avoid using a Smart Bone Action to animate layer order. A better way is to use a duplicate or reference of the limb layers, move the dupe/ref the the position you want, and then use the Smart Bone Action to toggle layer visibility instead. This avoids stacking order conflicts and it also frees me to add manual stacking order animation when I need it. (Handy when I need to move a layer to an unusual position or when I need to add a shot-specific layer on-the-fly.)
Another method is to use the Smart Bone Action to animate z-depth for the layer. This keeps the layers in the same stacking order in the Layers Window but physically moves the layer forward or backward in space. (You need to enable Sort Layers By Depth to do this.) Some users prefer this method because it requires only one copy of the limb.
Personally, I think animating depth can get messy and the visibility method is more bullet proof. For example, physically shifting the layer in z-space can potentially result in a 'pop'. This won't happen when animating visibility. FWIW, using a Smart Bone Action to control visibility is what I do for the production rigs at my work place and it always works perfectly.
Also, I prefer to keep the arms and legs layer sorting keyframes in a separate 'sorting' Smart Bone Action because when I'm animating a scene, sooner or later I'm going to want to place both arms behind or in front of the character independently of the body rotation angle. Tip: I used to create separate Smart Bone Dials for each arm but nowadays I just use a single dial that cycles through all the possibilities for both arms. Realistically, one control is enough because there are only a handful of possibilities.
In my experience, a simpler approach to rigging is easier (and more fun) to animate with, and it keeps the rig adaptable for unique situations. (There will ALWAYS be unique situations.)
Hope this helps.