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Pleasant v. McDaniel

Court of Appeals of Arkansas, Division I

April 18, 2018

ROGER D. PLEASANT, INFORMATION AND DISCOVERY INC., PSG AND INVESTIGATION, LLC, PHYSICIAN FIRST MARKETING GROUP, LLC, AND NETWORK COLLISION GROUP, LLC. APPELLANTS
v.
DUSTIN MCDANIEL, ATTORNEY GENERAL OF THE STATE OF ARKANSAS APPELLEE

          APPEAL FROM THE PULASKI COUNTY CIRCUIT COURT, SIXTH DIVISION [NO. 60CV-14-2400] HONORABLE TIMOTHY DAVIS FOX, JUDGE

          Naporsha M. Valentine, for appellant.

          Leslie Rutledge, Att'y Gen., by: Shawn J. Johnson, Sr. Ass't Att'y Gen., for appellee.

          BART F. VIRDEN, JUDGE.

         Roger D. Pleasant appeals the decision of the Pulaski County Circuit Court denying his motion to dismiss and denying his request to submit non-AMI verdict forms to the jury. We affirm.

         On June 23, 2014, the State filed a complaint against Roger D. Pleasant; Information and Discovery, Inc.; PSG and Investigation, LLC; Accident Claim Service, LLC; Physician 1st Marketing Group, LLC; Network Collision Group, LLC; Rogerick Pleasant; James Hinton; and Brian Hinton.[1] In its complaint, the State alleged that the defendants violated the Arkansas Deceptive Trade Practices Act (ADTPA), specifically, Arkansas Code Annotated sections 4-88-107(a)(1) (knowingly making false representations), and 4-88-107(a)(10) (any other unconscionable, false or deceptive act), and 4-88-108(2) (concealment, suppression, or omission of any material fact). The State asserted that Pleasant and his associates used false identities and falsely claimed association with insurance companies to solicit auto-accident victims on behalf of chiropractors. The State alleged that the defendants assured consumers that they would help obtain settlements and benefits in exchange for a percentage of the claim paid to the chiropractor. The State explained that the defendants harassed and deceived auto-accident victims, and their actions sometimes led to unnecessary medical treatment that resulted in a medical lien. The defendants failed to inform consumers of important information, including that a medical lien would result from chiropractic treatment. According to the State, consumers were also wrongly steered toward a chiropractor rather than a medical doctor, which in some cases led to further injury. The State requested an injunction against the defendants, and it requested that the court impose civil penalties pursuant to the ADTPA.

         Appellants filed an Arkansas Rule of Civil Procedure 12(b)(6) motion to dismiss in which they argued that the State failed to plead facts sufficient to support a claim of fraud because the complaint did not name the victims or the chiropractors, and it did not specify the date of appellants' deceptive conduct. In a second motion to dismiss, appellants claimed that the "safe harbor" provision of the ADTPA bars the State's claims and that the State failed to join indispensable parties, namely the chiropractors for whom they procured clients. Appellants also adopted the motion to dismiss separately filed by defendants James and Brian Hinton in which they argued that the State's ADTPA claim amounted to a fraud claim and that the State failed to state its claim with particularity as required by Arkansas Rule of Civil Procedure 9(b).

         The circuit court denied the motions to dismiss. After a three-day trial, the jury was presented with eleven general-verdict forms. The forms directed the jury to determine whether that defendant violated the ADTPA, and if so, how many violations had occurred. The jury found that Roger Pleasant had violated the ADTPA eight times, that James Hinton had violated the ADTPA three times, and that Brian Hinton and Accident Claim Service, LLC, were each liable for one violation of the ADTPA. The jury found that, pursuant to Arkansas Code Annotated section 4-88-113(d)(1), Pleasant was vicariously liable for all thirteen violations because he directly or indirectly controlled the other defendants. The circuit court assessed civil penalties of $2000 per violation against Pleasant. Appellants filed a timely notice of appeal.

         I. The Safe-Harbor Provision

         On appeal, appellants raise several points that are based on their assertion that as of August 16, 2013, the Arkansas State Board of Chiropractic Examiners (the "Board") has regulated and overseen procurers who help obtain clients for chiropractic practitioners. Appellants contend that because their conduct as procurers is regulated by the Board, the safe-harbor provision of the ADTPA excludes them from liability under the statute. Appellants' premise that procurers are regulated by a state agency and that their deceptive conduct is authorized by the Board is incorrect; thus, none of the related points on appeal have merit.

         It is helpful to begin our analysis by reviewing the safe-harbor provision of the ADTPA. The ADTPA prohibits a variety of listed practices, including "knowingly making false representations, " and "any other unconscionable, false, or deceptive act or practice in business, commerce, or trade." Ark. Code Ann. § 4-88-107(a)(1) & (a)(10) (Repl. 2011). Arkansas Code Annotated section 4-88-108(2) also prohibits "concealment, suppression, or omission of any material fact"; however, an exception to the ADTPA is the "safe harbor" provision, which provides that the ADTPA does not apply to actions or transactions specifically permitted under laws administered by a regulatory body or officer acting under statutory authority. Ark. Code Ann. § 4-88-101(3). Appellants contend that pursuant to Arkansas Code Annotated section 17-81-107(a)(1)(A) (Suppl. 2017) (effective August 16, 2013), procurers are regulated by the Arkansas State Board of Chiropractic Examiners and their conduct is specifically permitted under the laws administered by the Board; thus, they are protected by the safe-harbor provision from the claims brought by the State.

         Appellants misconstrue the plain language of Arkansas Code Annotated section 17-81-107(a)(1)(A), entitled "Use of a Procurer, " which defines "procurer" as "a person or entity who for pecuniary benefit procures or attempts to procure a client, patient, or customer by directly contacting the client, patient, or customer in person, by telephone, or by electronic means at the direction of, request of, employment of, or in cooperation with a chiropractic physician." Appellants argue that this definition of procurer amounts to authorization of a procurer's actions, when in fact the statutory language authorizes chiropractic physicians to employ procurers. Stated another way, chiropractors, and not procurers, are the entities whose actions are regulated. Furthermore, the appellants' deceptive conduct set forth by the State in its complaint is not described by the definition of procurer, and that deceptive conduct is not authorized anywhere in the statute. The only conduct authorized here is the chiropractor's use of a procurer.

         Appellants similarly misconstrue subsection (b) of the statute and argue that procurers are required by the Board to enter into a written contract with the chiropractor and to register with the Board. In fact, Arkansas Code Annotated section ...


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