West Memphis Adolescent Residential, LLC v. Compton

374 S.W.3d 922, 2010 Ark. App. 450, 2010 Ark. App. LEXIS 480
CourtCourt of Appeals of Arkansas
DecidedMay 26, 2010
DocketNo. CA 09-167
StatusPublished
Cited by18 cases

This text of 374 S.W.3d 922 (West Memphis Adolescent Residential, LLC v. Compton) is published on Counsel Stack Legal Research, covering Court of Appeals of Arkansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
West Memphis Adolescent Residential, LLC v. Compton, 374 S.W.3d 922, 2010 Ark. App. 450, 2010 Ark. App. LEXIS 480 (Ark. Ct. App. 2010).

Opinion

JOHN B. ROBBINS, Judge.

| TWest Memphis Adolescent Residential, LLC (WMAR), brings this appeal from the Crittenden County Circuit Court’s grant of summary judgment in favor of appellees J.T. Compton; Jayco Acquisition & Holding, Inc.; Plantation Homes of Crittenden County, Inc. (Plantation); Crymes Home Health, Inc. (Crymes); Ray Boeckmann; Jeannie Boeckmann; and Dayspring Behavioral Health Services, Inc. (Dayspring), on WMAR’s breach-of-contract 12and tort claims.1 WMAR raises two main points, each with several subpoints. We affirm in part and reverse and remand in part.

J.T. Compton controlled two Arkansas residential-care facilities-Plantation, in West Memphis, and Crymes, in Forrest City. In 2002, WMAR was a start-up mental-health-services provider that had not yet received its accreditation. In February 2002, it entered into lease agreements with Plantation and Crymes to provide mental-health services at their facilities. The period of each lease was for one year, with two one-year options to renew under the same or comparable terms. Either party could terminate these leases at any time with thirty days’ notice. The leases also provided that the use and occupancy of the leased premises by WMAR was subject to the terms and conditions of the lease and to reasonable rules and regulations for the use thereof as prescribed from time to time by the lessors. WMAR began providing services at the facilities in March 2002.

In June 2002, WMAR entered into -written services contracts with Plantation and Crymes. The contracts provided that they would remain in effect until cancelled. Both agreements provided that they “may only be canceled by either party by giving thirty (30) days written notice.” The original typed number (30) in the provision was partially interlined and replaced with a numerical “60” that appeared to be initialed by Ray Boeckmann on behalf of Plantation and Crymes, and Rick Draper on behalf of WMAR.

|aAlso in June 2002, WMAR entered into an agreement with Jeannie Boeckmann to be its clinical services director at the facilities. The relationship was stated to be that of an independent contractor and was for a period of one year, unless otherwise terminated. The contract could be terminated for cause at any time. It could also be terminated without cause upon thirty days’ notice.

As part of its start-up phase, WMAR also entered into an agreement, common in the field at the time, with Dayspring for Dayspring to provide Medicaid billing services and assist WMAR in obtaining the accreditation it needed to submit bills to Medicare under its own name. This agreement included a provision that, for a period of five years after the termination or nonrenewal of the agreement, WMAR would not provide rehabilitative services in any county in which Dayspring was providing services at the time of the agreement, or in any county contiguous to those counties. The provision also stated that, during the term of the agreement, WMAR would not expand its services beyond certain listed counties. The agreement stated that it could not be terminated at any time without cause unless there was the written mutual consent of both parties. The agreement also included another termination provision that either party could terminate the agreement by providing ninety days’ written notice to the other party.

During the first half of 2002, Compton had been attempting to find a buyer for the facilities after an earlier sale fell through. Jean-Ann Boschert of Counseling Consultants, Inc. (not a party), had an interest in purchasing the facilities because of her familiarity with them when her company had been the treatment provider there before being replaced by WMAR. |4In June 2002, Ray Boeckmann, Jeannie’s husband, was hired by Compton to serve as facility administrator. Beginning in the summer of 2002, the Boeckmanns and Co-nipton discussed a purchase of the facilities by Ray Boeckmann. The Boeckmanns and Conipton entered into an agreement, dated August 7, 2002, for the sale of the real estate. The transaction closed on August 22, 2002, with possession to be delivered on September 1, 2002. Boeckmann and Dayspring later entered into a contract for Dayspring to provide mental health services to the residents.

On August 30, 2002, WMAR filed suit against appellees asserting tort and contract claims. The complaint alleged that appellees were engaged in a conspiracy to defraud WMAR and obtain benefits through fraud and tortious interference with WMAR’s contracts with the various appellees. The complaint further alleged that appellees sabotaged WMAR’s business by making false statements, depriving WMAR and its employees of access to the facilities, and by hindering performance of their own contracts with WMAR. The complaint sought a declaration of WMAR’s rights under the two leases and the two service contracts, as well as compensatory and punitive damages. The various appel-lees answered, denying the material allegations of the complaint.2

On April 5, 2005, Dayspring filed a motion for partial summary judgment on WMAR’s tort claims. On April 13, 2006, the Conipton appellees filed a motion for partial |fisummary judgment on the claims involving improper notice to WMAR. The Boeckmanns filed a motion for summary judgment.

After a hearing, the circuit court granted the various motions for summary judgment filed by appellees. The pertinent language from the court’s order is as follows:

[Appellees] had every right to improve their economic circumstances, even though it be to the detriment of [WMAR]. The existence of a contract between [WMAR] and [appellees] does nothing to alter that fact, unless the contract includes a clause that forbad them from competing with [WMAR]. The court has found no such clause, and is loath to write such a provision into the contract when the parties themselves did not do so.

The court issued a second order clarifying that it had found no support for the contention that appellees had breached the various contracts. On October 10, 2008, the court entered an order dismissing WMAR’s complaint with prejudice. This appeal followed.3

Arguments on Appeal

I. Breach of Contract

When performance of a duty under a contract is due, any nonperformance is a breach. Restatement (Second) of Contracts § 235(2) (1981). Every contract imposes upon each party a duty of good faith and fair dealing in its performance and its enforcement. Cantrell-Waind & Assocs. v. Guillaume Motorsports, Inc., 62 Ark. App. 66, 968 S.W.2d 72 (1998) (quoting Restatement (Second) of Contracts § 205). Moreover, a party has an implied obligation not to do | (¡anything that would prevent, hinder, or delay performance. See generally Community Bank of N. Ark. v. Tri-State Propane, 89 Ark.App. 272, 203 S.W.3d 124 (2005).

First, WMAR concedes in its briefs that it asserted no contract claims against either Ray Boeckmann or Jayco Acquisition & Holding. Therefore, they are entitled to summary judgment on the contract claims.

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Bluebook (online)
374 S.W.3d 922, 2010 Ark. App. 450, 2010 Ark. App. LEXIS 480, Counsel Stack Legal Research, https://law.counselstack.com/opinion/west-memphis-adolescent-residential-llc-v-compton-arkctapp-2010.