Pro-Comp Management v. R.K. Enterprises

• Decision Date: 24 January 2008
• Docket Number: No. 07-648.,07-648.
• Citation: 372 Ark. 190,272 S.W.3d 91
• Parties: PRO-COMP MANAGEMENT, INC., d/b/a The Right Solutions, an Arkansas Corporation, The D.L.J. Wright Industry, Inc., d/b/a The Right Solutions, an Oklahoma Corporation, and Amedistaf, LLC, d/b/a The Right Solutions, A Delaware Limited Liability Corporation, Appellants; v. R.K. ENTERPRISES, LLC, d/b/a Nationwide Nurses, A Nevada Corporation, Katherine Hefley, Mary Burks, Traca Lane, and Raymond Hefley, Appellees.
• Court: Arkansas Supreme Court

272 S.W.3d 91

372 Ark. 190

PRO-COMP MANAGEMENT, INC., d/b/a The Right Solutions, an Arkansas Corporation, The D.L.J. Wright Industry, Inc., d/b/a The Right Solutions, an Oklahoma Corporation, and Amedistaf, LLC, d/b/a The Right Solutions, A Delaware Limited Liability Corporation, Appellants; v. R.K. ENTERPRISES, LLC, d/b/a Nationwide Nurses, A Nevada Corporation, Katherine Hefley, Mary Burks, Traca Lane, and Raymond Hefley, Appellees.

No. 07-648.

Supreme Court of Arkansas.

January 24, 2008.

Gilker & Jones, A Professional Association, by: Paul Alvin Gilker, for appellants.

Mitchell, Williams, Selig, Gates & Woodyard, P.L.L.C., by: Hermann Ivester and Margaret A. Johnston, for appellees.

DONALD L. CORBIN, Justice.

Pro-Comp Management, Inc., d/b/a/ The Right Solutions, an Arkansas corporation; The D.L.J. Wright Industry, Inc., d/b/a The Right Solutions, an Oklahoma corporation, and Amedistaf, LLC, d/b/a The Right Solutions, a Delaware limited-liability corporation (collectively TRS), appeal a decision of the Washington County Circuit Court entered upon remand in favor of R.K. Enterprises, LLC, d/b/a Nationwide Nurses, a Nevada corporation (Nationwide), Katherine Hefley, Mary Burks, Traca Lane, and Raymond Hefley. The decisions on the prior appeals in this case are R.K. Enterprise, LLC v. Pro-Comp Management, Inc., 356 Ark. 565, 158 S.W.3d 685 (2004) (R.K. I), and Pro-Comp Management, Inc. v. R.K. Enterprises, LLC, 366 Ark. 463, 237 S.W.3d 20 (2006) (R.K. II). As this is a subsequent appeal, jurisdiction is pursuant to Ark. Sup.Ct. R. 1-2(a)(7). We find no error and affirm.

At the outset, we note that Nationwide has again questioned our subject-matter jurisdiction. See R.K. II, 366 Ark. 463, 237 S.W.3d 20. Nationwide also raises this issue in the companion case, R.K. Enterprises, LLC v. Pro-Comp Management, Inc., 372 Ark. 199, 272 S.W.3d 85 (Jan. 24, 2008) (R.K.III). We adopt our ruling in R.K. III that the law-of-the-case doctrine bars Nationwide from now making the same argument, which this court had previously rejected.

The underlying facts can be found in R.K. I and R.K. II. As a recap, in R.K. I, this court concluded that the Arkansas Trade Secrets Act¹ prescribed the exclusive remedy for damages for misappropriation of trade secrets and held that the circuit court's award of damages for tortious conversion and conspiracy was reversible error. 356 Ark. 565, 158 S.W.3d 685. The case was remanded for the determination of damages under the Trade Secrets Act. Id. On remand, the circuit court denied TRS damages, and TRS appealed. In R.K. II, this court affirmed the circuit court's finding that TRS failed to show actual loss, but reversed and remanded for a determination of damages under unjust enrichment.

After the second remand, the circuit court held a hearing for the determination of TRS's damages under Ark.Code Ann. § 4-75-606(b) (Repl.2001). In a March 20, 2007 order, the circuit court found "the Defendants" had been unjustly enriched by the misappropriation of TRS's trade secrets, and that the evidence presented on damages for unjust enrichment had been clearly established. It then used the fair market value of the trade secrets to measure the damages, and awarded TRS $262,303, as well as postjudgment interest.² On March 29, 2007, Nationwide filed a motion to modify judgment to specifically exclude all individual defendants, Ms. Hefley, Ms. Burks, Ms. Lane, and Mr. Hefley, from judgment. TRS then filed a motion for prejudgment interest on the judgment, as well as a motion for costs and attorneys' fees. On April 17, 2007, TRS filed a notice of appeal of the March 20 order.

On May 1, 2007, a hearing was held on Nationwide's and TRS's postjudgment motions. The court agreed with Nationwide that the March 20 order needed to be clarified and modified to reflect the intent of the court that "the findings exclude all individual Defendants from the judgment." However, the court denied TRS's request for prejudgment interest as well as for attorneys' fees and costs. The circuit court issued an order on June 12, 2007, reflecting these rulings. TRS filed an amended notice of appeal on June 14, 2007.³

Prejudgment Interest

TRS's first argument for reversal is that the circuit court erred in failing to award prejudgment interest on the judgment entered under section 4-75-606(b). Specifically, TRS argues that the fair market value of the misappropriated trade secrets, as calculated from their labor cost to produce, was sufficiently definite to satisfy the requirements for an award of prejudgment interest from the date of the misappropriation to the date judgment was entered. To support this argument, TRS cites to the circuit court's finding that there was sufficient evidence of fair market value to support findings as to the specific value of four misappropriated items, which the court added together to arrive at the market value of the misappropriated trade secrets at the time they were taken. TRS further argues that the market value of each misappropriated item was based on reasonably precise calculations accepted into evidence.

Prejudgment interest is compensation for recoverable damages wrongfully withheld from the time of the loss until judgment. Reynolds Health Care Servs., Inc. v. HMNH, Inc., 364 Ark. 168, 217 S.W.3d 797 (2005); Ozarks Unlimited Res. Coop., Inc. v. Daniels, 333 Ark. 214, 969 S.W.2d 169 (1998). Prejudgment interest is allowable where the amount of damages is definitely ascertainable by mathematical computation, or if the evidence furnishes data that makes it possible to compute the amount without reliance on opinion or discretion. Id. This standard is met if a method exists for fixing the exact value of a cause of action at the time of the occurrence of the event that gives rise to the cause of action. Reynolds, 364 Ark. 168, 217 S.W.3d 797. Where prejudgment interest may be collected at all, the injured party is always entitled to it as a matter of law. Id.; Ozarks, 333 Ark. 214, 969 S.W.2d 169. Nevertheless, prejudgment interest is always dependent upon the initial measure of damages being determinable immediately after the loss and with reasonable certainty. See Wooten v. McClendon, 272 Ark. 61, 612 S.W.2d 105 (1981).

In finding that Nationwide was unjustly enriched by the misappropriation of TRS's trade secrets, the circuit court determined that the correct measure of damages on the issue of unjust enrichment was the fair market value of the trade secrets, representing the benefit that Nationwide received by avoiding the payment of this value in order to obtain this information. The court awarded $262,303 in damages, the fair market value calculated from TRS's development, maintenance, and labor costs. The fact that the fair market value was based upon these costs, incurred prior to the misappropriation of trade secrets, defeats any argument that TRS was entitled to prejudgment interest. It is unrefutable that the key factor in determining the appropriateness of prejudgment interest is whether the exact value of the damages at the time of the occurrence of the event which gives rise to the cause of action is definitely ascertainable, without reliance upon opinion or discretion. In this case, the fair market value, as determined by the circuit court, has no relation to the value of the trade secrets at the time of the misappropriation because it involved the cost of developing and maintaining those secrets and not their exact value at the time of misappropriation. Accordingly, we affirm the circuit court's denial of prejudgment interest.

Attorneys' Fees and Costs

Second, TRS argues that the circuit court erred in failing to award attorneys' fees under Ark.Code Ann. § 4-75-607(3) (Repl.2001), and costs under Ark. R. Civ. P. 54. Specifically, TRS asserts that the misappropriation was willfully malicious as a matter of law.⁴ In response Nationwide argues, amongst other things, that we are barred from considering this issue on appeal because the issue of attorneys' fees and costs under section 4-75-607 was raised and not preserved on the first remand such that it is barred by the principles of res judicata and law of the case.

In the present case, TRS argues that the circuit court erred in failing to award it attorneys' fees pursuant to section 4-75-607(3). This is an argument previously raised by TRS and addressed by this court following the first remand. In R.K. II, TRS claimed that the circuit court erred in failing to award attorneys' fees under section 4-75-607(3) for willful and malicious misappropriation. We held

[t]he order appealed from contains no reference to attorney's fees. TRS failed to obtain a ruling on this issue. The failure to obtain a ruling precludes appellate review because there is no order of a lower court on the issue for this court to review on appeal.

R.K. II, 366 Ark. at 469-70, 237 S.W.3d at 25 (citation omitted). Obviously, TRS is again requesting this court to consider the issue of attorneys' fees, something we cannot do. It is undisputed that the doctrines of res judicata and law of the case bar relitigation of an issue that has already been decided. See Redden v. Ark. State Bd. of Law Exam'rs, 371 Ark. 584, 269 S.W.3d 359 (2007) (explaining that a party is precluded from relitigating an issue that has already been decided); Byme, Inc. v. Ivy, 367 Ark. 451, 241 S.W.3d 229 (2006) (explaining that the doctrine of the law of the case prohibits a court from reconsidering issues of law and fact that have already been decided in a prior appeal).

Finally, TRS argues that it was entitled to costs pursuant to Rule 54(d). The June 12 order does not contain any findings by the circuit court related to costs or Rule 54(d). As such, TRS failed to obtain a ruling on this issue. The failure to obtain a ruling precludes appellate review because there is no order of a lower court on the issue for this court to review on appeal. See R.K. II, 366 Ark. 463, 237...