State ex rel. Bryant v. McLeod

• Decision Date: 05 December 1994
• Docket Number: No. 94-394,94-394
• Citation: State ex rel. Bryant v. McLeod, 318 Ark. 781, 888 S.W.2d 639 (Ark. 1994)
• Parties: STATE of Arkansas, ex rel. Winston BRYANT, Attorney General, Appellant, v. Cortland C. McLEOD, d/b/a Medco Management Company and d/b/a Cardiovascular Testing and Lifestyle Center, and d/b/a Lifestyle and Vascular Center of Pine Bluff; Norman R. Pledger, d/b/a Cardiovascular Testing and Lifestyle Center; Francis Henderson, d/b/a F.L.O. Partnership of Pine Bluff; Oscar Demaine, Jr., d/b/a F.L.O. Partnership and d/b/a Lifestyle and Vascular Center of Pine Bluff; Leonard Dunn, d/b/a F.L.O. Partnership and d/b/a Lifestyle and Vascular Center of Pine Bluff; and Neil E. Gregory, d/b/a Medco Management Company and d/b/a Lifestyle and Vascular Center of Pine Bluff, Jointly and Severally, Appellees.
• Court: Arkansas Supreme Court

Page 639

888 S.W.2d 639

318 Ark. 781

STATE of Arkansas, ex rel. Winston BRYANT, Attorney General, Appellant, v.Cortland C. McLEOD, d/b/a Medco Management Company and d/b/a Cardiovascular Testing and Lifestyle Center, and d/b/a Lifestyle and Vascular Center of Pine Bluff; Norman R Pledger, d/b/a Cardiovascular Testing and Lifestyle CenterFrancis Henderson, d/b/a F.L.O. Partnership of Pine BluffOscar Demaine, Jr., d/b/a F.L.O. Partnership and d/b/a Lifestyle and Vascular Center of Pine Bluff; Leonard Dunn d/b/a F.L.O. Partnership and d/b/a Lifestyle and Vascular Center of Pine Bluff; and Neil E. Gregory, d/b/a Medco Management Company and d/b/a Lifestyle and Vascular Center of Pine Bluff, Jointly and Severally, Appellees.

No. 94-394.

Supreme Court of Arkansas.

Dec. 5, 1994.

Winston Bryant, Atty. Gen., James DePriest, Asst. Atty. Gen., Little Rock, for appellant.

No brief filed for appellees.

HOLT, Chief Justice.

The State of Arkansas, by and through the office of the Attorney General, successfully prosecuted a claim against the appellees, Cortland C. McLeod, and Neil E. Gregory, for committing violations of the Arkansas Deceptive Trade Practices Act ("DTPA"), codified inArk.Code Ann. § 4-88-101 et seq.; however, the trial court denied its request for attorneys' fees and for reimbursement of an expert-witness fee.The State appeals, and finding no merit in its arguments, we affirm the chancellor.

On March 11, 1992, the Attorney General brought an action against several defendants, including McLeod and Gregory, claiming fraud, deception, or false pretense, as well as a violation of the Arkansas Deceptive Trade Practices Act ("DTPA"), codified inArk.Code Ann. § 4-88-101 et seq.The complaint alleged in part that the parties had engaged in the business of providing medical diagnostic tests and lifestyle intervention services to Arkansas consumers, advertised these services through print media and telemarketing, and, through such advertising, violated the DTPA by offering consumers free tests, including cholesterol readings and blood pressure checks, while asserting that the results of such tests would indicate the future likelihood of strokes, heart attacks, and hardening of the arteries.The case was settled as to all the defendants except separate defendants McLeod and Gregory.After trial, the chancellor, in a detailed finding of fact, found that McLeod had personally instituted and supervised some of the practices which were the subject of the lawsuit, and that he was the moving force behind the creation of each of the clinics, serving as its business manager in charge of billing practices.The chancellor found that Gregory had personal knowledge of acquiescence and committed many of the acts found to be deceptive and fraudulent.As a result, she issued an injunction against McLeod and Gregory, prohibiting them from engaging in any deceptive or unlawful practice prohibited by the DTPA, and rendered judgments against them jointly and severally in the amount of $163,817.80 as restitution for the benefit of affected insurance plans and carriers.The State, in turn, filed a motion requesting $53,605.00 in attorneys' fees and $8,134.00 in costs, as well as $2,500.00 for reimbursement for monies spent on an expert witness.The chancellor, in a well-reasoned and detailed order, found that neither attorneys' fees, nor payment of an expert-witness fee were authorized by statute, and denied the state's claim except for costs.The order reads in pertinent part that:

2.The award of attorneys' fees in a Deceptive Trade Practices Act is governed by Ark.Code Ann. Section 4-88-113(b).Section 4-11-113(b) was amended by the Arkansas General Assembly in its 1993 legislative session.Prior to being amended, Ark.Code Ann. Section 4-88-113(b) stated:

(b)(1) Upon petition of the Attorney General, the court may order the suspension or forfeiture of franchise, corporate charter, or other licenses or permits or authorization to do business in this state.

(2) As compensation for his services in this behalf, the Attorney General shall be entitled to his expenses incurred in the investigation and prosecution of suits, to be paid by the defendant when judgment is rendered for the state, to be taxed as costs by the court hearing the cause.[emphasis added].

As amended Ark.Code Ann. Section 4-88-113(b) states:

(b)(1) Upon petition of the Attorney General, the court may order the suspension or forfeiture of franchises, corporate charters, or other licenses or permits or authorization to do business in this state.

(2) As compensation for his services in this behalf, the Attorney General shall be entitled to his expenses incurred in the investigation and prosecution of suits, to be paid by the defendant when judgment is rendered for the state, to be taxed as attorneys' fees and costs by the court hearing the cause.[emphasis added].

3.There is no statutory authority under the prior Ark.Code Section 4-88-113(b) for the award of attorneys' fees, only for the award of "expenses incurred in the investigation and prosecution of suits."Therefore, under the prior version of Ark.Code Ann. Section 4-88-113(b), the Plaintiff is not entitled to the award of attorneys' fees.

4.As amended, Ark.Code Ann. Section 4-88-113(b) does authorize the awarding of attorneys' fees.However, under both prior law and the law as amended, the awarding of attorneys' fees and expenses is limited to those cases where the Attorney General seeks the "suspension or forfeiture of franchises, corporate charters, or other licenses or permits or authorization to do business in this state."The Plaintiff did not seek such remedies in this case and, therefore, the Plaintiff's request for attorneys' fees and expenses should be, and is hereby, denied.

5.In the absence of a statute authorizing the Court to award fees for an expert witness, the fees of an expert witness cannot be charged against the losing party.Sutton v. Ryder Truck Rental, Inc., 305 Ark. 231, 807 S.W.2d 905(1991).There is no statute authorizing the Court to award expert witness fees to the Plaintiff and, therefore, the Plaintiff's request for expert witness fees should be, and is hereby, denied.

6.The Court has discretion to award the winning party its costs incurred in the prosecution of a case.Lewallen v. Bethune, Adm'x, 267 Ark. 976, 593 S.W.2d 64(1980).The Court finds that the Plaintiff has incurred costs in connection with this lawsuit in the total amount of $3,046.87.The Court hereby directs the Defendants, Cortland C. McLeod and Neil E. Gregory, jointly and severally, to pay into the Registry of the Court the amount of $3,046.87 no later than 20 days from the date of this Order, said amount to be applied to the costs incurred by the Plaintiff in this lawsuit.

The State takes issue claiming that it was the intent of the legislature that the State should be allowed to recover attorneys' fees and out-of-pocket costs, including witness fees from successful litigation of this nature, and specifically invites us to examine the DTPA from its creation in Act 92 of 1971, which includes the following provision for remedies in Section 11:

Upon petition of the Attorney General, the Court may order the suspension or forfeiture of franchise, corporate charter, or other licenses or permits or authorization to do business in this State, and may assess costs to be recovered by the Attorney General for the use of the State, from any person who willfully violates the provisions of this Act.

(Emphasis added.)

It interprets this provision as providing for a discretionary award of costs to the Attorney General against any person who willfully violates the provisions of the DTPA, and notes that this section was left unchanged when the DTPA was amended...