Wynne-Ark., Inc. v. Richard Baughn Constr.
| Decision Date | 26 February 2020 |
| Docket Number | No. CV-18-585,CV-18-585 |
| Citation | 597 S.W.3d 114,2020 Ark. App. 140 |
| Parties | WYNNE-ARK., INC., d/b/a Kelley's Restaurant, Appellant v. RICHARD BAUGHN CONSTRUCTION, Appellee |
| Court | Arkansas Court of Appeals |
David A. Hodges, Little Rock, for appellant.
Barber Law Firm PLLC, Little Rock, by: Michael J. Emerson, for appellee.
This interlocutory appeal stems from the Cross County Circuit Court’s decision to grant Richard Baughn Construction’s (RBC’s) motion to compel discovery regarding a separate agreement between plaintiff Wynne-Ark., Inc., d/b/a Kelley’s Restaurant (Kelley’s) and a second defendant, Asphalt Producers, LLC (API). This is the second interlocutory appeal regarding this discovery dispute.1 See Wynne-Ark., Inc. v. Richard Baughn Constr. , 2017 Ark. App. 685, 545 S.W.3d 771. We reverse.
On June 2, 2014, Kelley’s filed a complaint in the circuit court seeking damages against API and its subcontractor, RBC. In the complaint, Kelley’s alleged damages arising from the defendants’ negligent performance of a state highway construction contract. The circuit court ordered all parties to attend mediation, and on September 20, 2016, the parties attended the mediation and executed confidentiality agreements. As a result of mediation, Kelley’s and API entered a confidential settlement agreement.
The next day, on September 21, RBC filed an amended answer and cross-claim against API seeking contribution and apportionment of fault among the parties found to be responsible for Kelley’s damages, if any. API responded that RBC had not stated facts or a legal basis for a claim, and the cross-claim should be dismissed. Kelley’s filed an objection to RBC’s second set of interrogatories and a request for production of documents.
On December 2, 2016, RBC responded that Kelley’s had recently reached a settlement agreement with API, and RBC was entitled to discovery of the document to ascertain "what factual allegations remain pending against RBC and what damages are attributable to same." RBC argued that it was entitled to information regarding fault and damages pursuant to apportionment of fault; thus, disclosure of the document was necessary for RBC to develop a defense.
RBC moved to compel discovery. In the motion, RBC asserted that pursuant to court-ordered mediation, Kelley’s and API had reached a confidential settlement agreement. RBC explained that it had propounded discovery seeking the amount and terms of the settlement and release but that Kelley’s had refused to disclose the document. RBC argued that the terms of the settlement were relevant and not privileged because RBC must have knowledge of the terms to "prepare for trial and evaluate RBC’s liability and damages." RBC also asserted that it was entitled to joint-tortfeasors settlement credit under the Uniform Contribution Among Tortfeasors Act (UCATA), codified at Ark. Code Ann. §§ 16-61-201 et seq. (Repl. 2005 & Supp. 2019), and that right was not abrogated in any way by the Civil Justice Reform Act of 2003 (CJRA) codified at Ark. Code Ann. §§ 16-55-201 et seq. (Repl. 2005 & Supp. 2019). RBC argued that it was entitled to apportionment of fault, with the greater amount of either fault or the settlement amount being apportioned to the settling defendant. RBC also contended that pursuant to the CJRA, it was entitled to have API appear on the verdict forms to aid the jury in apportioning fault. RBC clarified that it was not requesting that the court rule on the admissibility of the document—only its discoverability.
Kelley’s responded to the motion to compel arguing that Ark. Code Ann. § 16-7-206 (Repl. 2010) guarantees the confidentiality of any record or writing made during mediation. Kelley’s argued that RBC’s negligent acts and ensuing damages were separate from API’s; thus, the definition of "joint tortfeasors" had not been met, and RBC would not be entitled to any credit of the amount paid by API. Kelley’s asserted that "for the same reasons, Asphalt Producers should not appear on the jury form and there should be no allocation of fault." Kelley’s also questioned the retroactive application of Act 1116 and the right to allocation of fault that was created by it. On January 23, 2017, Kelley’s sought to dismiss without prejudice any claims against API. Kelley’s explained that it had executed an agreement with API to resolve all claims, and the circuit court granted Kelley’s motion.
On February 7, API filed a second motion to dismiss RBC’s cross-claim. API argued that RBC could not state a claim for contribution against API because although RBC may have the right to introduce evidence of API’s negligence, and RBC may have the right to seek apportionment of fault, these rights are not connected to a right of contribution against API. API asserted that the right of contribution does not arise until a jury finds that RBC is required to pay an amount of damages that exceeds its pro rata share of common liability, and because the case is pending and no finding of liability has been made, a cause of action for contribution does not exist. Furthermore, API argued that if RBC is found liable, API is entitled to a setoff that ensures RBC will pay only its pro rata share of fault. The court did not rule on the motion to dismiss the cross-claim.
The circuit court entered an order compelling discovery "with the proviso that there will be a Protective Order with regard to the resolution between Asphalt Producers, LLC and Plaintiff, which resolution took place during mediation, and the parties agree that there was a stipulation that the document resulting from the mediation was confidential." The circuit court declined to rule on the admissibility of the document. The circuit court found that whether a confidential settlement agreement is discoverable under these facts is an issue of first impression in Arkansas; thus, an interlocutory appeal is appropriate because this case presents an issue that is not "merely the resolution of a discovery matter, but involves another area of law that could be impacted by the resolution of the discovery matter."
Wynne-Ark., Inc. , 2017 Ark. App. 685, at 8, 545 S.W.3d at 775–76.
Following the hearing on remand, the circuit ordered disclosure of the agreement and ruled that (1) it "maintains the rulings previously made in the February 27, 2017 order"; (2) RBC was under the direction and control of API; thus, they are joint tortfeasors; (3) the document is relevant, and the right of contribution exists; (4) because RBC and API are joint tortfeasors, any damages they may have caused are indistinguishable; and (5) the right to contribution exists, though it is impossible to determine when the right of contribution attaches until evidence is presented at trial. In addition to these findings, the court specifically declined to reach the issue of admissibility of the agreement. Kelley’s filed a motion for interlocutory appeal, and our supreme court granted the motion.
The case is now before us again. After reviewing the briefs and hearing the parties’ oral argument, we disagree with the circuit court’s conclusion that the confidential settlement agreement is relevant now and discoverable before the right of contribution has attached—if it ever attaches. Also, we hold that the circuit court erred in finding at this point in the case that the defendants were joint tortfeasors.
The circuit court has wide discretion in matters pertaining to discovery, and a circuit court’s decision will not be reversed absent an abuse of discretion. Chiodini v. Lock , 2010 Ark. App. 340, 374 S.W.3d 835. An abuse of discretion occurs when discretion is applied thoughtlessly, without due consideration, or improvidently. Id. A motion for production of documents must be considered in light of the particular circumstances that give rise to it, and the need of the movant for the information requested. Shook v. Love’s Travel Stops & Country Stores, Inc. , 2017 Ark. App. 666, 536 S.W.3d 635.
Ark. R. Civ. P. 26 (b)(1) (emphasis added).
The salient question here is whether that confidential settlement agreement is reasonably calculated to lead to the discovery of admissible evidence. We disagree with the circuit court’s decision that the circumstances herein merit the immediate disclosure of the confidential settlement agreement. Kelley’s asserts that Ark. Code...
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