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Goldtrap v. Bold Dental Management, LLC

Court of Appeals of Arkansas, Division I

March 14, 2018

ROBERT C. GOLDTRAP, D.D.S. AND ROBERT C. GOLDTRAP, D.D.S. P.A., AN ARKANSAS DENTAL CORPORATION APPELLANTS
v.
BOLD DENTAL MANAGEMENT, LLC, A DELAWARE LIMITED LIABILITY COMPANY AND BOLD DENTAL PARTNERS, PLLC, AN ARKANSAS PROFESSIONAL LIMITED LIABILITY COMPANY APPELLEES

         APPEAL FROM THE SEBASTIAN COUNTY CIRCUIT COURT, FORT SMITH DISTRICT [NO. 66FCV-15-580] HONORABLE STEPHEN TABOR, JUDGE

          Gean, Gean & Gean, by: Roy Gean III, for appellants.

          Gill Ragon Owen, P.A., by: Dylan H. Potts and Danielle M. Whitehouse, for appellees.

          WAYMOND M. BROWN, Judge.

         Appellants Robert C. Goldtrap (Goldtrap) and Robert C. Goldtrap, D.D.S. P.A., appeal the Sebastian County Circuit Court's order denying their motion to vacate, modify, or correct an arbitration award in favor of appellees Bold Dental Management and Bold Dental Partners (Bold). Appellants also appeal the court's denial of their motion for reconsideration of the same. They argue on appeal that the court erred in refusing to vacate the arbitration award. They also argue that the court erred in reducing the time for Goldtrap to resubmit his breach-of-contract claim. We affirm.

         The parties entered into several agreements on May 1, 2014. In the "Asset Purchase and Sale Agreement, " appellant Goldtrap agreed to sell his dental practice to appellees for $30, 000 and 330, 000 shares of membership interest in Bold. In another agreement, Goldtrap was retained as an employee of Bold and entitled to a guaranteed thirty-percent payment of "actual collections attributable to and produced from services provided by Goldtrap." Goldtrap began practicing dentistry through Bold, but he was subsequently terminated on March 3, 2015.

         Appellants filed a complaint against Bold on July 15, 2015, alleging three separate counts: (1) breach of contract, (2) wrongful termination, and (3) right to accounting and production of records. Appellees filed an answer on August 10, 2015, denying the essential elements of appellants' complaint. On August 13, 2015, appellees filed a motion to compel arbitration and stay judicial proceedings. According to the motion, the parties entered into a "Joinder Agreement" in which appellants agreed to become a party/member to the "Amended and Restated Operating Agreement" of Bold and to be fully, legally bound by, and subject to, all of the covenants, terms, and conditions of the "Operating Agreement." Article XV of the "Amended and Restated Operating Agreement" provided:

Any dispute or controversy between the Members or Board of Managers arising out of or otherwise relating to the Company or this Agreement shall be settled by arbitration to be held in Springdale, Arkansas in accordance with the rules then in effect of the American Arbitration Association or its successor.

         Therefore, Bold asked the court to enter an order compelling arbitration and staying the action until the arbitration process had been concluded. Appellants filed a response on August 24, 2015, denying that they had agreed to arbitrate any dispute relating to the "Purchase Agreement, " the "Guaranteed Payment and Service Agreement, " and the "Covenant not to Compete and Confidentiality Agreement." Thus, appellants asked that appellees' motion be denied. A hearing on appellees' motion took place on September 16, 2015, and the court entered an order on September 21, 2015, granting appellees' motion as it related to counts one and two of appellants' complaint. The court stayed action on count three "pending completion of arbitration or further Order of this Court."

         The arbitration hearing took place on November 14, 2015.[1] Prior to the commencement of the hearing, appellants withdrew from consideration all claims other than the claim for wrongful termination. In the arbitration award dated January 10, 2017, the arbitrator noted that appellants' withdrawal of the claims was the equivalent of a nonsuit in state court. The award stated in pertinent part:

Goldtrap's employment contract with Bold was part of the sale of his practice to a Bold affiliate, Bold Dental Management, LLC ("Bold Management"). After the sale, Goldtrap continued to practice dentistry in the same office but as an employee under the management and direction of Bold.
While the Agreement also hires Robert C. Goldtrap, D.D.S., P.A., to perform services, it defines those services to be personal to Goldtrap, nonassignable and nondelegable. Goldtrap agreed to (a) perform his duties and carry out his responsibilities in a diligent manner, (b) devote a mutually agreed amount of time to the business and affairs of the practice, (c) use all reasonable efforts to promote the interest of his employer, Bold, and (d) be just and faithful in the performance of his duties and responsibilities. See Respondent's Ex. 3, paragraph 1.
The Agreement states that Goldtrap cannot be terminated at will or for the convenience of his employer, Bold Dental Partners, PLLC ("Bold"). There is no dispute Goldtrap was terminated, so this act must be justified under the termination provisions of paragraph 4 of the Agreement. See Respondent's Ex. 3.[2]

         Goldtrap contends he did not breach the terms of his employment agreement so was not justifiably terminated or, alternatively, was not afforded an opportunity to cure his defaults. Central to Goldtrap's problem with Bold was that he failed to adapt to his role as employee, including losing operational control of the practice he sold to Bold Management and the privileges of being his own boss. Goldtrap's termination was justified:

1. Bold hired a dental practice consultant, Carol Feliciano, who worked in Goldtrap's clinic to identify and correct deficiencies and bring Goldtrap's office and dental practice into compliance with Bold standards and policies. Goldtrap resisted Feliciano's suggestions and the insistence of Bold management that he comply with her recommendations. Goldtrap did not want Feliciano in the office and told her to leave and never return. He did ...

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