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Kilgore v. Mullenax

Court of Appeals of Arkansas, Division I

March 2, 2016

JOSHUA KILGORE, APPELLANT
v.
ROBERT MULLENAX AND SENIOR DENTAL CARE, LLC, APPELLEES

          APPEAL FROM THE PULASKI COUNTY CIRCUIT COURT, SECOND DIVISION. NO. 60CV-15-469. HONORABLE CHRISTOPHER CHARLES PIAZZA, JUDGE.

         For APPELLANT: MATTHEW T S HORAN.

         For APPELLEE: DYLAN HUGH POTTS.

         DAVID M. GLOVER, Judge. ABRAMSON and HARRISON, JJ., agree.

          OPINION

Page 706

          DAVID M. GLOVER, Judge

         Joshua Kilgore appeals from the trial court's May 28, 2015 order confirming the arbitrator's award (combined interim and final awards) in favor of Robert Mullenax and Senior Dental Care, LLC. He contends the trial court erred in doing so because 1) Arkansas public policy forbids an arbitrator from entering an award against a party who communicates information about fraudulent insurance acts to the Arkansas Insurance Department where the speaker reasonably believes the information to be true, and 2) the arbitrator lacked jurisdiction under the Federal Arbitration Act (FAA). We affirm.

         Undisputed Facts

         In its interim award, the arbitrator set forth the basic facts of this case, which are not in dispute. We will further condense them here. Robert Mullenax, an insurance agent and business owner, formed Senior Dental Care, LLC (SDC) with Dr. Chad Matone, an Arkansas dentist. SDC operates a dental-management company, which administers dental practices that provide dental care to residents of skilled nursing facilities.

         Joshua Kilgore, a businessman and licensed nursing-home administrator, approached Mullenax in late 2010 or early 2011 concerning the acquisition of an interest in SDC. Kilgore was familiar with the SDC program through his work as an administrator. On January 1, 2012, Kilgore, Mullenax, Matone, and SDC executed a purchase-and-sale agreement by which Kilgore was able to purchase membership units in SDC. Section 7 of the purchase-and-sale agreement provided in part:

Page 707

a. In further consideration of the transfer to Buyer [Kilgore], buyer agrees that he will not Directly or Indirectly, at any time during which he has an ownership interest in the Company [SDC] and for two (2) years thereafter
i. form or be employed by, act as an agent for, or otherwise participate in any sole proprietorship, venture, corporation, partnership, or other entity that is in the business of providing dental care to residents of skilled nursing facilities or assisted living facilities within the state of Arkansas;
ii. solicit work from or provide such dental services to a Customer of the Company or seek to cause any Customer to refrain, in any respect, from acquiring services from or through the Company[.]

         Although Matone subsequently left SDC, an addendum to the purchase-and-sale agreement was executed, leaving the noncompete provisions of the agreement in full force and effect between the remaining owners, Mullenax and Kilgore.

         A conflict subsequently developed between Mullenax and Kilgore, resulting in the May 2013 execution of a confidential-settlement agreement and full release (settlement agreement). The parties thereby agreed that they had continuing obligations under the purchase-and-sale agreement and that those continuing obligations included the noncompete provisions. They further agreed that the ...


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