FROM THE CROSS COUNTY CIRCUIT COURT [NO. 19CV-14-46]
HONORABLE RICHARD L. PROCTOR, JUDGE
A. Hodges, for appellant.
Law Firm, PLLC, by: Michael J. Emerson, for appellee.
F. VIRDEN, JUDGE.
interlocutory appeal stems from the Cross County Circuit
Court's decision to grant Richard Baughn
Construction's (RBC) motion to compel discovery regarding
a separate agreement between plaintiff Wynne-Ark. Inc., d/b/a
Kelley's Restaurant (Kelley's) and a second
defendant, Asphalt Producers, LLC (API). We reverse.
2, 2014, Kelley's filed a complaint in the circuit court
seeking damages against RBC, a subcontractor of API. In the
complaint, Kelley's alleged damages arising from the
defendants' negligent performance of a state highway
construction contract. Kelley's asserted that during
construction the entrance to the restaurant was unnecessarily
blocked for a significant amount of time, which caused a loss
of business income. Kelley's also claimed that the
defendants failed to control the dust and debris in the
course of work and that defendants damaged the entrance. API
and RBC filed separate motions for summary judgment, which
the circuit court denied.
August 8, 2016, the circuit court ordered mediation. Both
parties attended the mediation on September 20, 2016, and
counsel for each party signed an agreement for mediation and
a confidentiality agreement.
September 21, 2016, RBC filed an amended answer and
cross-claim against API, seeking contribution and
apportionment of fault among the parties found to be
responsible for Kelley's damages, if any. On October 21,
2016, API responded that RBC had not stated facts or a legal
basis for a claim, and the cross-claim should be dismissed.
That motion was never ruled on by the circuit court. On
November 23, 2016, Kelley's filed an objection to
RBC's second set of interrogatories and a request for
production of documents.
December 2, 2016, RBC responded that Kelley's had
recently reached a settlement agreement with API, and RBC was
entitled to discovery of the document to ascertain "what
factual allegations remain pending against RBC and what
damages are attributable to same." RBC argued that it
was entitled to information regarding fault and damages
pursuant to apportionment of fault; thus, disclosure of the
document was necessary for RBC to develop a defense.
January 9, 2017, RBC filed a motion to compel discovery. In
the motion, RBC asserted that, pursuant to court-ordered
mediation, Kelley's and API had reached a confidential
settlement agreement. RBC explained that it had propounded
discovery seeking the amount and terms of the settlement and
release but that Kelley's had refused to disclose the
document. RBC argued that the terms of the settlement were
relevant and not privileged because RBC must have knowledge
of the terms to prepare for trial and evaluate RBC's
liability and damages. RBC also asserted that it is entitled
to joint-tortfeasors settlement credit under the Uniform
Contribution Among Tortfeasors Act (UCATA), codified in Ark.
Code Ann. §§ 16-61-201 et seq., and that right is
not abrogated in any way by the Civil Justice Reform Act
(CJRA). RBC argued that it is entitled to apportionment of
fault, with the greater amount of either fault or the
settlement amount being apportioned to the settling
defendant. RBC also contended that, pursuant to the CJRA, it
is entitled to have API appear on the verdict forms to aid
the jury in apportioning fault. RBC clarified that it was not
requesting that the court rule on the admissibility of the
document-only its discoverability.
January 20, 2017, Kelley's responded to the motion to
compel arguing that Ark. Code Ann. § 16-7-206 guaranteed
the confidentiality of any record or writing made during
mediation. Kelley's argued that RBC's negligent acts
and ensuing damages were separate from API's; thus, the
definition of "joint tortfeasors" has not been met,
and RBC would not be entitled to any credit of the amount
paid by API. Kelley's asserted that "for the same
reasons, Asphalt Producers should not appear on the jury form
and there should be no allocation of fault."
Kelley's also questioned the retroactive application of
Act 1116, and the right to allocation of fault that was
created by it.
January 23, 2017, Kelley's sought to dismiss without
prejudice any claims against API. Kelley's explained that
it had executed an agreement with API to resolve all claims,
and on January 26, 2017, the circuit court granted
February 7, 2017, API filed a second motion to dismiss
RBC's cross-claim. API argued that RBC could not state a
claim for contribution against API because although RBC may
have the right to introduce evidence of API's negligence,
and RBC may have the right to seek apportionment of fault,
these rights are not connected to a right of contribution
against API. API asserted that the right of contribution does
not arise until a jury finds that RBC is required to pay an
amount of damages that exceeds its pro rata share of common
liability, and because the case is pending and no finding of
liability has been made, a cause of action for contribution
does not exist. Furthermore, API argued that if RBC is found
liable, it will be entitled to a setoff that ensures that RBC
will pay only its pro rata share of fault. The court did not
rule on the motion to dismiss the cross-claim.
February 27, 2017, the circuit court entered an order
compelling discovery "with the proviso that there will
be a Protective Order with regard to the resolution between
Asphalt Producers, LLC and Plaintiff, which resolution took
place during mediation, and the parties agree that there was
a stipulation that the document resulting from the mediation
was confidential." The circuit court declined to rule on
the admissibility of the document. Citing Cooper Tire
& Rubber Co. v. Phillips County Circuit Court, 2011
Ark. 183, 381 S.W.3d 67, the circuit court noted that whether
a confidential settlement agreement is discoverable under
these facts is an issue of first impression in Arkansas, and
an interlocutory appeal is appropriate because this case