Applied Behavioral Advancements, LLC v. Jennifer Mick

RENDERED: JULY 14, 2023; 10:00 A.M.
NOT TO BE PUBLISHED
Commonwealth of Kentucky
Court of Appeals
NO. 2022-CA-0810-MR
APPLIED BEHAVIORAL
ADVANCEMENTS, LLC AND
CHRISTOPHER GEORGE APPELLANTS
APPEAL FROM JEFFERSON CIRCUIT COURT
v. HONORABLE BRIAN C. EDWARDS, JUDGE
ACTION NO. 17-CI-006418
JENNIFER MICK APPELLEE
OPINION
AFFIRMING
** ** ** ** **
BEFORE: CALDWELL, COMBS, AND KAREM, JUDGES.
COMBS, JUDGE: Applied Behavioral Advancements, LLC, (“Applied
Behavioral”) and Christopher George, its owner and chief executive officer, bring
this appeal from the judgment of the Jefferson Circuit Court entered in favor of
Jennifer Mick on June 15, 2022. After our review, we affirm.
From August 2013 through November 2017, Jennifer Mick, a board-
certified behavior analyst, worked as an independent contractor providing services
to Medicaid participants screened by Applied Behavioral. Based upon
documentation that Mick provided to Applied Behavioral, the company billed the
federal Medicaid program for her services. Applied Behavioral typically shared
the reimbursement proceeds with Mick within two weeks of receipt. The terms of
the parties’ contract required Mick to submit a Functional Behavioral Assessment
Report before she was compensated for her preparation of a Functional Behavioral
Assessment. The contract required Mick to submit a Behavioral Support Plan
before she was compensated for her work on Behavioral Support Plan
Development.
In October 2017, according to Applied Behavioral and George, an
employee overseeing Applied Behavioral’s billing raised concerns to George about
potentially excessive time that Mick billed to work on a Behavior Support Plan and
“other suspicious practices as well.” In response, the company requested that Mick
provide a number of missing Behavior Support Plans (as required by the terms of
her contract) and other materials. Services related to these Behavior Support Plans
had already been billed and paid. When Mick failed to provide all of the material
sought, Applied Behavioral terminated her contract by email on November 20,
2017. It then reported its concerns to the Kentucky Applied Behavior Analyst
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Licensing Board; Kentucky Department of Behavioral Health, Developmental and
Intellectual Disabilities; Kentucky’s Attorney General, Office of Medicaid Fraud
& Abuse; Cabinet for Health and Family Services, Department for Medicaid
Services; and the Cabinet’s Office of the Inspector General. Applied Behavioral
did not share with Mick reimbursement received for Behavioral Support Plan
Development related to the Behavioral Support Plans that she had failed to submit.
However, a formal investigation revealed that paperwork submitted by Mick met
the requirements of pertinent administrative regulations. Ultimately, Mick was
cleared of any wrongdoing.
On December 1, 2017, Mick filed a civil action in Jefferson Circuit
Court. She alleged that George published patently false and misleading
information about her to clients, colleagues, and potential employers. She also
asserted claims premised upon tortious interference with business advantage;
tortious interference with contract; breach of contract; conversion; and intentional
infliction of emotional distress. She sought compensatory and punitive damages.
George and Applied Behavioral answered and denied the allegations.
They also asserted counterclaims alleging breach of contract, abuse of process, and
malicious prosecution. A period of pre-trial practice and discovery began.
By order entered on May 31, 2022, the Jefferson Circuit Court granted
Mick’s motion for summary judgment with respect to the claim of breach of
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contract asserted against her by George and Applied Behavioral. It granted
summary judgment in favor of George and Applied Behavioral with respect to
Mick’s claim of tortious interference with contract.
George and Applied Behavioral filed a motion to strike Mick’s
defamation claim based on an alleged violation of the court’s discovery order.
They contended that Mick failed to provide relevant metadata from her computer.
However, they were adamant that they did not want a continuance with respect to
that material. The court denied their motion to strike the claim as a sanction
against Mick.
The case was tried to a jury over the course of four days in June 2022.
At the close of Mick’s proof, Applied Behavioral moved for a directed verdict
regarding her claims of breach of contract; conversion; defamation; and tortious
interference with a business advantage. In response, the trial court dismissed the
tortious interference claim. After Applied Behavioral and George presented their
proof, Mick filed a motion for directed verdict on her conversion claim. Her
motion was denied, and Applied Behavioral and George declared that they had no
motions for the court to consider.
Following its deliberation, a unanimous jury found that George and
Applied Behavioral had made defamatory statements concerning Mick. It also
found unanimously that Applied Behavioral converted a portion of the Medicaid
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reimbursement that it received for Mick’s services and that it otherwise breached
its contract with her. The jury rejected Mick’s claim of extreme emotional distress.
The jury was instructed to determine the compensatory damages that it believed
that Mick suffered as a result of any of her claims (not to exceed $2,211,000). In
response to that instruction, the jury awarded damages of $110,000. When asked
to divide and apportion this sum among the causes of action, it awarded $25,000
from Applied Behavioral and $50,000 from George on the defamation claim. For
Applied Behavioral’s conversion of her compensation and its breach of her
contract, the jury awarded $25,000 and $10,000, respectively. Finally, the jury
found that the conduct of Applied Behavioral warranted punitive damages in the
amount of $150,000 and that George’s conduct warranted punitive damages in the
sum of $300,000. The trial court’s judgment was entered on June 15, 2022.
On July 2, 2022, George and Applied Behavioral filed an appeal. In
their notice of appeal, they designated only the trial court’s judgment of June 15,
2022, for our review.
On appeal, Applied Behavioral and George contend that this Court
should reverse the judgment as it relates to the Mick’s claims of defamation,
conversion, and breach of contract. They also challenge the damages awarded; the
summary judgment entered in favor of Mick with respect to the breach of contract
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claim they asserted against her; and the court’s order related to the alleged
discovery violation. We address these contentions as follows.
First, with respect to the judgment rendered on the defamation counts,
Applied Behavioral and George argue that the trial court erred by failing to instruct
the jury concerning absolute privilege. They contend that the issue is preserved for
our review by language included in the proposed jury instructions that they
tendered to the court. Included in the proposed instruction related to Applied
Behavioral is the following statement:
Under the law, truth is a total and complete defense to the
claim of defamation and any statement made in a Court
proceeding is privileged as to the claim of defamation.
Further, if [Applied Behavioral] had a statutory duty to
report an expected (sic) act of fraud, it is privileged
under the law, which is a total and complete defense.
You may find [Applied Behavioral] liable on this claim
only if you believe from the evidence that:
(a) Applied Behavioral] in the presence of another
person or persons, made a statement that was
reasonably understood by such other person or
persons to mean that [Mick] committed fraud;
(b) The statements made would tend to expose
[Mick] to public hatred, contempt, ridicule, or
disgrace, or induce an evil opinion of her in the
community;
(c) [Applied Behavioral’s] statements were not
true;
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(d) [Applied Behavioral] did not exercise ordinary
care to determine whether the statements were
true; and
(e) As a direct result of such statements, [Mick’s]
reputation was damaged, and she suffered
economic loss.
Proceed to Interrogatory No. ____
(Emphasis added.) The relevant proposed interrogatory asked, “[d]o you believe
from the evidence that [Applied Behavioral] made defamatory statements as
regards [Mick?]” In part, it directed, “If you answered ‘Yes,’ you must find for
[Mick], on Verdict Form ___.” The relevant proposed verdict form read, in part,
as follows: “[w]e the jury find for [Mick] on her claim of defamation against
[Applied Behavioral].” Finally, it provided, as follows:
We the jury award [Mick]:
(a) Damage to reputation; (not to exceed $ .00)
(b) Embarrassment, humiliation, and mental anguish
(including any suffering that [Mick] is reasonably
certain to endure in the future). (not to exceed $
.00)[.]
The same series of proposed instruction, interrogatory, and verdict form was
tendered with respect to the defamation claim asserted against George.
According to George and Applied Behavioral, Mick’s counsel
explained to the jury during closing arguments that there were “many examples” of
defamatory statements and specifically referenced George’s report to government
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agencies and his conversation with the executive director of a competing
behavioral support provider. The trial court’s instructions to the jury omitted any
reference to absolute privilege as a complete defense to Mick’s defamation claims.
George and Applied Behavioral argue that the reports to government
agencies were absolutely privileged because they were made “pursuant to a duty to
report suspected fraud.” For the broad proposition that reports to government
agencies are absolutely privileged, George and Applied Behavioral cite to the
decision of the Supreme Court of Kentucky in Hill v. Kentuckyy Lottery
Corporation, 327 S.W.3d 412 (Ky. 2010). In Hill, the Court agreed with the
policy embodied in the Restatement (Second) of Torts, § 592A (1977) that “[o]ne
who is required by law to publish defamatory matters is absolutely privileged to
publish it.” Hill, 327 S.W.3d at 424-25.
In order to bolster their proposition that Applied Behavioral had a
statutory duty to report suspected fraud, George and Applied Behavioral cite to
provisions of Kentucky Revised Statutes (“KRS”) 319C.100(2) and KRS
319C.110(2). KRS 319C.100(2) provides that an employer of a licensee shall
report to the Kentucky Applied Behavior Analysis Licensing Board a behavior
analyst who is “suspected of . . . negligently performing actions that justify action
against a [behavior analyst’s license] as identified in KRS 319C.110(2).” The
provisions of KRS 319C.110(2) identify the acts of a licensee that may be
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considered cause for disciplinary action, including “engaging in fraud or material
deception in the delivery of professional services, including reimbursement . . . .”
However, neither George nor Applied Behavioral was an employer of a licensee.
Consequently, these provisions are inapplicable, and neither was under a legal
compulsion to report. Moreover, the existence of an absolute privilege is a
question of law to be determined by a trial judge -- not by a jury. Rogers v.
Luttrell, 144 S.W.3d 841 (Ky. App. 2004). The trial court did not err by failing to
include an explanation of absolute privilege in its instructions to the jury.
Next, George and Applied Behavioral argue that the trial court erred
by failing to instruct the jury on the elements of defamation. We disagree.
With the exception of omitting the explanation of absolute privilege,
the trial court’s instructions to the jury and its verdict form were nearly identical to
the proposed instructions and verdict forms tendered by George and Applied
Behavioral. In separate instructions, the trial court instructed the jury to find for
Mick if satisfied by the evidence that:
(a) In the presence of another person or persons,
[Applied Behavioral] [George] made a
statement that was reasonably understood by
such other person or persons to mean that
Jennifer Mick had committed fraud;
(b) The statement made would tend to expose
Jennifer Mick to public hatred, contempt,
ridicule, or disgrace; or induce an evil opinion
of her in the community;
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(c) The statement was not true;
(d) [Applied Behavioral] did not exercise ordinary
care to determine whether the statement was
true or false;
(e) As a direct result of said statement, Jennifer
Mick’s reputation was damaged, and she
suffered economic loss.
The separate verdict forms asked: “Do you believe from the evidence that
[Applied Behavioral] [George] made defamatory statements as regards Jennifer
Mick?” The court outlined the elements of defamation in precisely the manner
requested by the appellants’ counsel. Thus, there can be no reversible error.
Next, Applied Behavioral and George contend that the court erred by
permitting the jury to assess different and separate damages against George and
Applied Behavioral based upon identical allegations of wrongdoing. They argue
that “Mick attempted to impose defamation liability upon both [Applied
Behavioral] and George as a result of George’s statements, which as a matter of
law did not permit an award of separate damage amounts against each.”
We are persuaded that George and Applied Behavioral invited the
alleged error through the instructions, interrogatories, and verdict forms that they
themselves tendered to the trial court. Moreover, they are not entitled to review
under the plain error standard. While a properly preserved challenge to the
contents of a court’s instruction is subject to our de novo review, where a party
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fails properly to preserve a challenge to jury instructions, the challenge is not
entitled to appellate review. Norton Healthcare, Inc. v. Disselkamp, 600 S.W.3d
696 (Ky. 2020). We decline to address the alleged error further.
Next, Applied Behavioral argues that the judgment should be reversed
with respect to the conversion and breach of contract claims. It contends that it
was entitled to directed verdicts on both counts. In the alternative, it argues that
the trial court’s instructions were erroneous and that an award of damages for both
conversion and breach of contract constitutes plain error.
Applied Behavioral states in its brief that it preserved its argument
that the trial court erred by failing to direct a verdict in its favor. However, in
contravention of the Rules of Appellate Procedure, it fails to identify in what
manner the argument was preserved. Kentucky Rules of Appellate Procedure
(RAP) 32. As summarized above, Applied Behavioral specifically declined to
renew its motion for directed verdict following the close of all proof. Upon this
basis, we conclude that Applied Behavioral insufficiently preserved the alleged
error for review. Bryan v. CorrectCare-Integrated Health, Inc., 420 S.W.3d 520(Ky. App. 2013); see also Ray v. Commonwealth, 611 S.W.3d 250 (Ky. 2020).
We also reject the alternative contention that the trial court erred in its
instructions to the jury with respect to the claim of conversion. Applied
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Behavioral argues that the court’s instructions were erroneous because the jury was
not required to find that Mick established legal title to the converted sums.
Whether a jury instruction misrepresents the applicable law is purely a
question of law that we review de novo. Auslander Properties, LLC v. Nalley, 558
S.W.3d 457 (Ky. 2018). Kentucky law encourages the use of bare-bones
instructions. Id. The court’s instructions must sufficiently advise the jury “what it
[had to] believe from the evidence in order to return a verdict in favor of the party
who [had] the burden of proof.” Office, Inc. v. Wilkey, 173 S.W.3d 226, 229 (Ky.
2005). In this case, the court’s instruction required the jury to find that Applied
Behavioral was paid by Medicaid for Mick’s services; that it retained the money;
and that some or all of the money that it so retained belonged to Mick. The
instructions reasonably explained the law; the court did not err by failing to require
the jury to find specifically that Mick “established legal title.”
Next, George and Applied Behavioral challenge the award of punitive
damages. They contend that the court’s instructions to the jury were erroneous
because they permitted an award of punitive damages for breach of contract.
Again, we conclude that the issue is insufficiently preserved for review.
While the appellants explain that their challenge to the punitive
damages instruction was preserved during a specific bench conference, it is clear
that this bench conference occurred only after the disputed instruction had been
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read to the jury and upon the request of Mick’s counsel concerning an entirely
different instruction. Moreover, George and Applied Behavioral indicated to the
court that the instructions had been “reviewed and agreed to” and that “if we’re
going to reopen” the instructions, then “technically” Mick cannot get punitive
damages for breach of contract. Having expressed its satisfaction with the
instructions that the trial court intended to give the jury, the issue is not now
subject to a belated challenge. See Jerome v. Commonwealth, 653 S.W.3d 81 (Ky.
2022).
Next, George and Applied Behavioral contend that the trial court
erred by granting summary judgment in favor of Mick with respect to their claim
against her for breach of contract. A litigant's notice of appeal is the procedural
mechanism by which our jurisdiction is invoked. Johnson v. Smith, 885 S.W.2d
944 (Ky. 1994). The notice must identify “the judgment, order, or part thereof
appealed from.” RAP 2(B). As noted above, the notice of appeal identified the
court’s judgment of June 15, 2022, for review; it did not reference the court’s
summary judgment of May 31, 2022. Consequently, we will not review this
allegation of error.
Finally, with respect to the parties’ discovery dispute, George and
Applied Behavioral contend that the trial court abused its discretion by failing to
sanction Mick for her failure to comply with its order of December 16, 2021. That
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discovery order required Mick to “produce the computer file listing, file meta data,
and the file itself” within thirty days. They explain that Mick’s eventual
production of 1500 pages of documents did not contain the material sought; that it
violated the trial court’s order of December 16; and that it formed the basis of their
motion either to strike her defamation claim or, in the alternative, to find
conclusively that Mick did not create the disputed documents while she worked
with George and Applied Behavioral -- but that she manufactured them only later.
The trial court’s authority to impose sanctions for failure of a party to
comply with discovery is found in Kentucky Rules of Civil Procedure (“CR”)
37.02. The rule provides a myriad of alternative sanctions. Our discovery rules are
designed to promote efficiency, order, and expediency within the judicial system,
and the sanction for their violation is within the discretion of the trial court subject
to the restriction that CR 37.02 envisions willfulness or bad faith on behalf of the
party to be sanctioned. Greathouse v. American National Bank and Trust Co., 796
S.W.2d 868 (Ky. App. 1990). The basis for the rule is that a party who
intentionally seeks to delay or thwart the judicial process should not benefit from
the defiant conduct. Baltimore & Ohio Railroad Co. v. Carrier, 426 S.W.2d 938(Ky. 1968).
The trial court was required to make findings to support its exercise of
discretion. Greathouse, supra. It did so. The trial court found specifically that
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Mick “responded timely to discovery requests and did not attempt to delay or
thwart the judicial process with her production of discovery.” It did not abuse its
broad discretion by deciding not to impose the “most severe” of sanctions against
her. Moreover, as noted above, the notice of appeal did not identify the court’s
discovery order entered May 31, 2022, as a subject of this appeal.
Finding no error, we affirm the judgment of the Jefferson Circuit
Court.
ALL CONCUR.
BRIEFS FOR APPELLANTS: BRIEF FOR APPELLEE:
R. Kenyon Meyer Thomas R. Coffey
Sarah D. Reddick Louisville, Kentucky
Louisville, Kentucky
Kevin C. Burke
Jamie K. Neal
Louisville, Kentucky
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