Allstate Ins. Co. v. Dodson

• Decision Date: 27 January 2011
• Docket Number: No. 10–257.,10–257.
• Citation: 2011 Ark. 19,376 S.W.3d 414
• Parties: ALLSTATE INSURANCE COMPANY, Appellant v. Jon H. DODSON, M.D., Appellee.
• Court: Arkansas Supreme Court

2011 Ark. 19

376 S.W.3d 414

ALLSTATE INSURANCE COMPANY, Appellant

v.Jon H. DODSON, M.D., Appellee.

No. 10–257.

Supreme Court of Arkansas.

Jan. 27, 2011.

Luce, Forward, Hamilton & Scripps, LLP, by: Ronald D. Getchey, and Williams & Anderson PLC, Little Rock, by: Philip E. Kaplan, JoAnn C. Maxey, and Jamie K. Fugitt, for appellant.

David M. Hargis, Little Rock, for appellees.

ROBERT L. BROWN, Justice.

Appellee and cross-appellant, Dr. Jon H. Dodson (Dodson), is a radiologist who built his medical practice in Little Rock and in Pine Bluff in the early 1980s. Dodson's clinics provided, among other services, physical therapy. Around 1993, Dodson began receiving complaints from Allstate Insurance Company (Allstate) that he did not employ licensed physical therapists in his physical-therapy department. Allstate began refusing to pay for claims based on physical therapy performed at Dodson's clinics by unlicensed personnel and, allegedly, made statements about Dodson's “illegal” use of these physical therapists. These statements, as well as others, became the basis for the ultimate litigation filed by Dodson against Allstate.

On September 3, 1997, Dodson filed a complaint against Allstate and two of its agents in Arkansas, Bobbie Waddell and John Runkle, alleging that these employees, at Allstate's behest, defamed Dodson by representing to insureds and claimants that Dodson provided unqualified physical-therapy treatment at his office and that this amounted to fraud. Dodson also complained that Allstate represented that he overcharged for this therapy treatment, and that his medical practice was illegal. Dodson further alleged that these defamatory statements were made with an intent to damage his professional reputation. Dodson also included a cause of action for tortious interference with a business expectancy.

Allstate, Waddell, and Runkle answered and denied Dodson's allegations. They also filed a counterclaim in which they alleged that Dodson had engaged in numerousdeceitful, fraudulent, and illegal acts, which included Dodson's failure to employ state-licensed physical therapy assistants and misrepresentations to Allstate regarding the treatment he provided to patients. Before this case first went to trial in September 1999, Allstate dismissed its counterclaim. At the close of the first trial, prior to instructing the jury, Dodson dismissed his claims against Runkle and Waddell and proceeded only against Allstate. A Pulaski County jury found in favor of Allstate on Dodson's claims of defamation and tortious interference with a business expectancy. Dodson filed his first appeal, raising seven points for reversal.¹

In that first appeal, this court rejected most of Dodson's arguments but reversed and remanded on Dodson's argument that the trial court had erred in ruling that Allstate's withdrawn counterclaim could not be used at trial as evidence that Allstate defamed or interfered with Dodson's contractual relationships with his patients. See Dodson v. Allstate Ins.Co., 345 Ark. 430, 47 S.W.3d 866 (2001) (Dodson I ). This court held that the withdrawn counterclaim constituted proper impeachment evidence because Dodson was attempting to rebut Allstate's claims that it had never defamed Dodson. This court concluded that the trial court “abused its discretion and committed error in not allowing the defendants' withdrawn counterclaim to be used as impeachment evidence.” Id. at 451, 47 S.W.3d at 880.

After remand, the case was scheduled for trial on January 12, 2004. The retrial began, but after two days of trial, the trial court granted a mistrial for the reason that, during the course of the trial, one of the jurors communicated her opinion of the case to other jurors. About seven months later, Allstate moved for summary judgment on the basis that a jury could not reasonably find that Dodson's alleged damages were caused by Allstate. The trial court initially denied Allstate's motion, but on March 16, 2005, the court vacated its earlier order and entered its order granting Allstate's motion. Dodson filed his second timely notice of appeal and raised four points for reversal.

In the second appeal, Dodson v. Allstate Ins. Co., 365 Ark. 458, 231 S.W.3d 711 (2006) (Dodson II ), this court concluded that genuine issues of material fact remained regarding Allstate's intent with respect to its allegedly defamatory statements about how Dodson ran his medical practice. Accordingly, we held that summary judgment was not appropriate, and we reversed and remanded for further proceedings.

The trial that is the subject of this third appeal commenced on May 26, 2009, in Pulaski County Circuit Court. The trial continued for six days, and the jury returned a verdict in favor of Dodson in the amount of $6 million in compensatory damages and $15 million in punitive damages. Allstate moved for a judgment notwithstanding the verdict, a new trial, and requested a remittitur. The trial court remitted punitive damages to the sum of $6 million, to match those awarded as compensatory damages. Allstate filed a notice of appeal, and Dodson filed a notice of cross-appeal on the remittitur issue.

I. Binding Instructions

For its first point on appeal, Allstate claims that the trial court gave two binding instructions to the jury that in effect directedthe jury to rule in Dodson's favor. The two instructions at issue were not Arkansas Model Instructions but were proffered by Dodson. The first special instruction ² given by the court read:

You are instructed and under the law of the state of Arkansas, and throughout the entire time period involved in this case, plaintiff Jon H. Dodson, MD, and his medical practice have been subject to the provision requirements of the Arkansas Medical Practices Act, and not the Arkansas Physical Therapy Act. In other words, the Arkansas Medical Board and not the Arkansas Physical Therapy Board, had regulatory authority over Jon H. Dodson, MD, and his medical practice, throughout the entire time period involved in this case.

The trial court next instructed the jury:

You are also instructed that there is a physical therapy act which exists in the state which provides in relevant part, nothing in this chapter shall be deemed to prohibit any person licensed under any other act in this state from engaging in the practice for which he is licensed. Therefore, you are instructed as a matter of law, that Jon H. Dodson, MD, and all other physicians are specifically excepted from the Arkansas Physical Therapy Act to the extent stated.

Specifically, Allstate claims that these instructions, which it identifies as Special Instruction No. 1 and Special Instruction No. 2, respectively, were given in error because in giving these instructions, the trial court commented on the evidence and impermissibly adopted Dodson's theory of the case. Furthermore, Allstate asserts that the given instructions were incorrect statements of the law. Dodson counters that Allstate failed to object specifically to these instructions and therefore waived the right to mount its objections to these instructions on appeal.

A party is entitled to a jury instruction when it is a correct statement of the law and there is some basis in the evidence to support giving the instruction. See Dodson I, 345 Ark. at 459, 47 S.W.3d at 885;see also Coca–Cola Bottling Co. v. Priddy, 328 Ark. 666, 945 S.W.2d 355 (1997). This court will not reverse a trial court's refusal to give a proffered instruction unless there was an abuse of discretion. Barnes v. Everett, 351 Ark. 479, 492, 95 S.W.3d 740, 748 (2003). When instructions are requested that do not conform to AMI instructions, they should be given only when the trial judge finds that the AMI instructions do not contain an essential instruction or do not accurately state the law applicable to the case. Id. (citing Tyson Foods, Inc. v. Davis, 347 Ark. 566, 66 S.W.3d 568 (2002)).

We have said that AMI instructions are to be used as a rule, and non-AMI instructions should only be used when an AMI instruction does not exist or cannot be modified. Id. It is error for the trial court to fail to instruct the jury on a statute applicable to the case; however, it is also error for the trial court to instruct the jury on an inapplicable statute. Hunter v. McDaniel Constr. Co., Inc., 274 Ark. 178, 181, 623 S.W.2d 196, 200 (1981). Portions of a statute not applicable to the facts of the case must be deleted. Id.

Specific objections to instructions are necessary to preserve the issue for appeal. Ark. R. Civ. P. 51. Arkansas Rule of Civil Procedure Rule 51 states in part:

No party may assign as error the giving or the failure to give an instruction unless he objects thereto before or at the time the instruction is given, stating distinctly the matter to which he objects and the grounds of his objection, and no party may assign as error the failure to instruct on any issue unless a party has submitted a proposed instruction on that issue.

Rule 51 further reads that a “general objection shall not be sufficient to obtain appellate review of the court's action relating to instructions to the jury except as to an instruction directing a verdict or the court's action in declining to do so.” Ark. R. Civ. P. 51. This court has interpreted this rule to require specific objections in order to alert the trial court as to why the instruction is wrong. See Precision Steel Warehouse, Inc. v. Anderson–Martin Mach. Co., 313 Ark. 258, 270, 854 S.W.2d 321, 327 (1993) (citing Chandler & Ramsey v. Kirkpatrick, 270 Ark. 74, 603 S.W.2d 406 (1980)).

A general objection to a jury instruction is permissible only if the instruction is inherently erroneous, meaning the instruction could not be correct under any circumstance, and is binding in nature. See Koch v. Missouri Pac. R.R. Co., 248 Ark. 1251, 1252, 455 S.W.2d 858, 859 (1970); see also Advocat, Inc. v. Sauer, 353 Ark. 29, 65, 111 S.W.3d 346, 367 (2003). This court has held that an...