FROM THE SEVIER COUNTY CIRCUIT COURT [NO. 67CV-12-60]
HONORABLE TOM COOPER, JUDGE
Donovan & Tilley, P.A., by: David M. Donovan and Staci
Dumas Carson, for appellant.
Arnold, Batson, Turner & Turner, PA, by: Dan Turner and
Todd Turner, for appellee.
M. GLOVER, Judge.
appeal arises out of a business contract between DeQueen
Physical Therapy and Occupational Therapy, Inc. (DeQueen),
and Brookewood, Limited Partnership (Brookewood). DeQueen is
a corporation formed by Kim and Darin Tollett, both
therapists, that provides therapy services in and around
DeQueen, Arkansas. Brookewood is a long-term-care facility in
DeQueen, Arkansas. The parties had a twenty-year contract
prescribing that DeQueen would provide therapy services to
Brookewood to the exclusion of all other long-term-care
facilities in the area. Brookewood terminated the contract
early, and the termination served as the impetus for this
litigation initiated by DeQueen. Following a jury trial, a
Sevier County jury awarded DeQueen $6 million in compensatory
and punitive damages from Brookewood.
appeals, and DeQueen cross-appeals. Counsel for both parties,
through clear and concise oral arguments, directed our focus
to the primary issues in this appeal. Those arguments are
whether (1) the circuit court erred by allowing DeQueen's
claim for damages relating to the early termination of the
contract to go to the jury; (2) the circuit court erred by
allowing DeQueen's claim for civil conspiracy to go to
the jury; (3) a remittitur of the compensatory and
punitive-damages verdicts should be ordered; and (4) the
award of attorney's fees to DeQueen was proper. We affirm
in part and reverse in part on direct appeal and grant a
remittitur of the compensatory-damages award. We reverse and
remand on cross-appeal.
2006, Stephen Marinick, the CEO of Brookewood, solicited
DeQueen to provide therapy services to Brookewood. On August
7, 2006, Brookewood and DeQueen entered into a twenty-year
contract requiring DeQueen to provide therapy services to
Brookewood to the exclusion of all other long-term-care
facilities in the area. In exchange, Brookewood agreed to
hire only DeQueen for its therapy services "provided
DeQueen is capable of fully performing such services."
the execution of this contract, DeQueen also provided therapy
services to Crystal Falls, the only other long-term-care
facility in the area. In 2010, Brookewood's owners
purchased Crystal Falls and closed it, making Brookewood the
only long-term-care facility in Sevier County.
arose between Brookewood and DeQueen. There are emails
indicating Brookewood sought to increase DeQueen's
Medicare and Medicaid billing. DeQueen contends that,
essentially, Brookewood wanted it to fraudulently bill
Medicare and Medicaid. Brookewood denies this allegation.
Another point of contention between the parties concerned
payment to DeQueen. In 2011, Brookewood ceased paying DeQueen
for its services. Brookewood claims this was because DeQueen
consistently failed to timely submit invoices.
2012, Brookewood entered into discussions for the provision
of therapy services with another company, Realization Rehab,
PLLC (Realization). During those negotiations, Brookewood
hired Sarah Bishop, who was employed by Realization, to audit
DeQueen's files. Following the audit, Brookewood notified
DeQueen that it was terminating their contract because
DeQueen was incapable of providing therapy services
comparable to other companies in its business. DeQueen
claimed its contract was terminated because it was unwilling
to engage in fraudulent billing practices with regard to
Medicaid and Medicare. One week after the contract was
terminated, Brookewood entered into a contract for therapy
services with Realization.
and its owners, the Tolletts, sued Brookewood for breach of
contract and promissory estoppel alleging Brookewood owed
them money for prematurely terminating their contract without
cause and for unpaid services rendered. DeQueen and the
Tolletts later amended their complaint, adding a
civil-conspiracy claim against Brookewood. They also added
Realization as a party, suing it for civil conspiracy and
tortious interference, and they sought punitive damages from
both Brookewood and Realization.
case eventually proceeded to a three-day jury trial. At the
trial, DeQueen presented evidence of $80, 849.66 in unpaid
invoices and $3, 833, 210.49 in lost gross revenue from the
early termination of the contract. DeQueen also presented
evidence on its claims for tortious interference and civil
conspiracy. When DeQueen rested its case-in-chief, Brookewood
moved for a directed verdict on DeQueen's claims for
early termination of the contract and civil conspiracy. These
motions were renewed at the close of trial. The circuit court
denied the motions for directed verdict.
the jury rendered a verdict awarding DeQueen $4 million in
compensatory damages and $2 million in punitive damages
against Brookewood on its breach-of-contract and
civil-conspiracy claims. The jury also awarded DeQueen $500,
000 in compensatory damages from Realization on its
tortious-interference and civil-conspiracy claims; it
declined to assess punitive damages against Realization. The
circuit court entered a final judgment, and later, an amended
and substituted final judgment. Brookewood filed motions for
JNOV, for new trial, or for remittitur. These posttrial
motions were denied, and Brookewood appealed.
the trial, DeQueen requested attorney's fees pursuant to
Arkansas Code Annotated section 16-22-308 (Repl. 1999) and
its contract with Brookewood-each of which allowed a
prevailing party to recover a reasonable attorney's fee.
DeQueen sought attorney's fees in the range of $197, 939
to $2, 145, 000. DeQueen and its counsel had a 30 percent
contingency-fee agreement, and the $2, 145, 000 figure is 30
percent of the judgment. DeQueen's motion also provided
that its attorneys expended 565.54 hours on the case, and its
attorneys requested an hourly rate of $350, which would total
an award of $197, 939. Instead, the circuit court awarded
$178, 845 in attorney's fees and costs to DeQueen in an
order entered on August 28, 2014. In making the award, the
circuit court assessed a $350 hourly rate and reduced the
amount of time spent by 10 percent to account for time not
devoted to the breach-of-contract claim. DeQueen later filed
an additional motion for attorney's fees incurred during
posttrial litigation. DeQueen argued that because the circuit
court awarded fees on an hourly basis, it was entitled to
fees incurred on posttrial matters; this request was denied.
Thereafter, DeQueen cross-appealed issues relating to the
award of attorney's fees.
court previously dismissed two related appeals for lack of a
final order. See Brookewood, Ltd. P'ship v. DeQueen
Physical Therapy & Occupational Therapy, Inc., 2016
Ark.App. 159; Brookewood, Ltd. P'ship v. DeQueen
Physical Therapy & Occupational Therapy, Inc., 2017
Ark.App. 84. Following our court's second dismissal, the
circuit court entered a final order on July 20, 2017.
Additionally, the circuit court considered DeQueen's
petition for reconsideration of the attorney's-fee award
and its petition for additional attorney's fees and costs
for time and expenses incurred in posttrial matters. The
circuit court denied DeQueen's motions relating to fees
in orders entered on August 15, 2017. Brookewood filed a
timely notice of appeal from the July 20, 2017 order and all
previous orders. DeQueen timely cross-appealed the circuit
court's August 28, 2014 order for fees and costs and the
August 15, 2017 order denying reconsideration of the August
28, 2014 ruling.