CURTIS LUMBER CO. v. LOUISIANA PACIFIC CORP

and substitution of the United States is appropriate, the district court must assess the plaintiff's claims pursuant to the Federal Tort Claims Act. Id. If, on the other hand, the district court finds that the federal employee being sued was not acting in the scope of his or her employment and that substitution of the government was inappropriate, the district court retains jurisdiction over the case, but assesses the claims pursuant to state tort law. Id. Thus, it is when a district court is reviewing a scope-of-employment certification under the Westfall Act that the question of "[w]hether an employee was acting within the scope of his employment is a question of law, not fact, made in accordance with the law of the state where the conduct occurred." RMI, 78 F.3d at 1143; see also Singleton v. United States, 277 F.3d 864, 870 (6th Cir. 2002). Thus, the "question of law" referred to in Carpenter regarding scope of employment is pursuant to a certification and substitution issue under the Westfall Act, not the issue of whether, under the facts of a specific case, the course and scope of

employment issue is a question which should be submitted to the jury or determined by the judge as a matter of law.

The other cases cited by plaintiffs [Doc. 94, pp. 8-9] pertain to the same issue, a scope-of-employment analysis of the conduct of a federal employee for purposes of the government's certification and substitution of itself under the Westfall Act.

Upon the Court's review of relevant case law, the question of whether an employee's actions are within the course and scope of an employment relationship is a question often put to a jury. "While the principles embodied in the respondeat superior doctrine are relatively easy to articulate, they are not always easy to apply." Tennessee Farmers Mut. Ins. Co., 840 S.W.2d at 937 (citation omitted). "The doctrine does not lend itself to bright line rules . . . but rather requires the weighing and balancing of the facts and circumstances of each case." Id. (citations omitted). "Whether the employee's act is within the scope of his employment is ordinarily a question of fact for the jury, except where the departure from the master's business is of marked and decided character." Craig v. Gentry, 792 S.W.2d 77, 80 (Tenn. Ct. App. 1990) (citing Home Stores, Inc. v. Parker, 166 S.W.2d 619 (Tenn. 1942)) (emphasis added); see also Cheatwood v. Curie, No. W2007-02204-COA-R3-CV, 2008 WL 2687618, at * 4-5 (Tenn. Ct. App. July 7, 2008). Thus, the inquiry only "becomes a question of law when the facts are undisputed and cannot support conflicting conclusions." Tennessee Farmers Mut., 840 S.W.2d at 937.

The unique set of facts presented in this case did not, in the Court's view, support such a clear determination and the Court properly submitted the question of whether Ritchie was acting in the course and scope of his employment to the jury. The Court instructed the jury with instructions taken, almost verbatim, from Tennessee Farmers Mut., the leading Tennessee Court of Appeals case on the issue of course and scope of employment, along with related instructions on agency law. Thus, the jury was presented with the relevant law and the relevant factors, and their determination is reflected in the verdict form [Doc. 92].

The factors articulated in Tennessee Farmers Mut. as applicable to a course and scope of employment analysis are derived, in part, from the Restatement (Second) of Agency §§ 228, 229 (1957). The parties also had the opportunity prior to the trial of this case to submit proposed jury instructions. The Court included a number of the parties' requested instructions in its jury instructions, including instructions on issues of agency and the factors articulated in Tennessee Farmers Mut. See supra section I, part C.

Finally, after the Court's review of Ball and the other relevant cases, the Court concludes that because the issue of liability presented by this case was a novel and complex one, the Court's submission of the question of course and scope of employment to the jury was proper. The jury's determination of this issue was necessary for the Court to engage in a thorough analysis of the question of liability presented by this case and to determine whether the course and scope of employment analysis is relevant under Ball. The submission of this question also offered the parties an opportunity to brief the relevant issues and allowed the Court to make a proper determination. Accordingly, the jury's finding that Ritchie was not acting in the course and scope of his employment was an important part of the Court's analysis and it was a proper question to be submitted to the jury.

B. Course and Scope of Employment

In Anderson v. Covert, 245 S.W.2d 770 (Tenn. 1952), the Tennessee Supreme Court stated that:

[F]or the acts of the servant, within the general scope of his employment, while engaged in the master's business, and done with a view to the furtherance of that business and the master's interest, the master will be responsible, whether the act be done negligently, wantonly, or even willfully. In general terms, if the servant misconducts himself in the course of his employment, his acts are the acts of the master, who must answer for them.

Anderson, 245 S.W.2d at 771-72 (quotations and citations omitted); see also Terry v. Burford, 175 S.W. 538, 542 (Tenn. 1915). This concept of course and scope of employment, part of the doctrine of respondeat superior, renders an "employer vicariously liable for the torts of its employees while they are acting within the scope of employment." Raines v. Shoney's, Inc., 909 F. Supp. 1070, 1083 (E.D. Tenn. 1995). In Tennessee Farmers Mut., the Tennessee court of appeals outlined various agency law principles relevant to the determination of whether an employee acted in the course and scope of his employment, id. at 937-38, and noted that the doctrine "does not lend itself to bright line rules, but requires the weighing and balancing of the facts and circumstances of each case." Id. at 937 (citations and quotation omitted). A Tennessee court of appeals has applied similar principles of agency law to an employee's negligent operation of his employer's vehicle:

On the issue of agency, in order to hold an employer responsible for the acts of an employee, "it is necessary to show that the relationship of master and servant exists between the wrongdoer and the defendant (employer) at the time and in respect to the very transaction out of which the injury arose. The mere fact that the driver of the vehicle causing the injury was the defendant's servant will not make the defendant liable. It must be further shown that at the time of the accident the driver was on the master's business and acted within the scope of his employment.

Leeper Hardware Co. v. Kirk, 434 S.W.2d 620, 623-24 (Tenn. Ct. App. 1968) (quoting Midwest Dairy Products Co. v. Esso Standard Oil Co., 246 S.W. 2d 974 (Tenn. 1952)). Principles of agency law identified in Tennessee cases and the factors regarding course and scope of employment identified in Tennessee Farmers Mut. were submitted by the parties as proposed jury instructions and were included, almost verbatim, in the Court's jury instructions.

In Leeper, the Tennessee court of appeals applied a course and scope of employment analysis to an employee's conduct during an accident that occurred when the employee, who was in the process of driving his employer's truck on the way to lunch, negligently struck a boy on a motorcycle. Leeper Hardware Co., 434 S.W.2d at 555-56.

C. Course and Scope of Employment and Willful and Wanton Conduct

Ball, the case relied on by plaintiffs, does not contain a discussion of whether the employee was acting within the course and scope of his employment with his employer at the time of the accident that gave rise to the plaintiff's claim. In Ball, the plaintiff had brought an action for personal injuries against the employer, the owner of a transfer company, and against the driver, an employee of the owner. Ball, 342 S.W.2d at 680-81. The plaintiff, with the "knowledge, acquiescence and implied permission" of the employee-driver, boarded a vehicle being driven by the employee-driver as he hauled cargo for the employer. Id. at 681. The employer had given the employee-driver explicit instructions not

to permit another person to ride on the vehicle, instructions the employee-driver was aware of and understood. Id. While the plaintiff was aboard the vehicle, the employee-driver negligently turned the vehicle, causing the plaintiff to be thrown off the vehicle and injured. Id. The trial court directed a verdict in favor of the employer. Id. Following the plaintiff's appeal, the Tennessee court of appeals affirmed the holding of the trial court stating that:

Where an employee, the driver of a truck, contrary to instructions from his employer, permits others to ride on the truck or a trailer, the status of the rider is not that of guest or invitee but of trespasser with respect to the employer. So, when such a rider is injured, the employer is liable only for such injuries as are caused by the wanton or wilful [sic] acts of the driver.

Id. at 681-82 (citing Home Stores, Inc. v. Parker, 166 S.W.2d 619 (Tenn. 1942)). Accordingly the court of appeals found, "[t]here being no proof that the acts of the driver . . . were wanton or wilful [sic], therefore there was no question of fact to submit to the jury. . . ." Id. at 682. Thus, despite stating the proposition that an employer may be liable for the willful and wanton conduct of an employee, the court of appeals found that the employee-driver's conduct was not willful and wanton and thus, the court did not engage in further analysis.

The other case cited in Ball is Reynolds v. Knowles, 206 S.W.2d 375 (Tenn. 1947). The analysis of the facts and law in Reynolds are not applicable to this case as the issue in Reynolds was whether the employer's actions, not the actions of the employee, constituted wanton, willful, or reckless negligence. Reynolds, 206 S.W.2d at 338-39.

Home Stores, Inc. v. Parker is one of the two cases cited in Ball from which the Tennessee court of appeals deduced the statement of an employer's liability for an employee's willful and wanton conduct. Homes Stores, 166 S.W.2d 619. In Homes Stores, the plaintiff, a minor, was injured when he was thrown against the front of a truck being driven by a driver, an employee of the owner. Id. at 620. The employer had explicitly instructed the employee-driver not to allow anyone to ride on the truck. Id. at 621. The plaintiff, by his next friend, brought suit against the employer, alleging first that the employee-driver was negligent and second, that the employee-driver was grossly or wantonly negligent. Id. at 620. The court granted the employer a directed verdict on the issue of whether the employee-driver acted with gross or wanton negligence, but refused to grant a directed verdict on the issue of whether the employee-driver acted with simple negligence. Id. The jury returned a verdict for the plaintiff on the allegation of simple negligence, and the employer moved for a new trial, arguing that the trial court erred in not also directing a verdict on the plaintiff's allegation of simple negligence. Id. The employer argued that because the employee-driver lacked authority to invite other persons to ride on the truck, by inviting the plaintiff to ride, the employer was acting outside the scope of his employment and the plaintiff was therefore a trespasser, "to whom the defendant [the employer] owed no duty except to see that he [the plaintiff] was not willfully and wantonly injured." Id.

In deciding the employer's request for a new trial, the Tennessee Supreme Court recited the same proposition stated in Ball, that the plaintiff was the guest of the employee-driver and that the employee-driver had no authority to permit passengers in the vehicle and therefore the plaintiff was a trespasser as to the employer "and [the employer] was liable to him only for injuries caused by the wanton, willful, or reckless negligence of [the employee driver]." Home Store, 166 S.W.2d at 621. The Tennessee Supreme Court then discussed three cases from which it arrived at this statement of liability: Lipscomb v. News Star World Pub. Corp., 5 So.2d 41 (La. App. 1941); Foster-Herbert Cut Stone Co. ("Stone") v. Pugh, 91 S.W. 199 (Tenn. 1906); and Liggett Myers Tobacco Co. v. DeParcq, 66 F.2d 678 (8th Cir. 1933). According to the Home Store court, these cases, taken together, state that a passenger who rides in an employer's vehicle pursuant to an invitation by the employee is a trespasser to the employer when the employee had no implied or apparent authority to issue the invitation and, "short of wantonness," the employer will not be liable for any injury caused by the negligence of the employee. See Home Store, 166 S.W.2d at 621 (quoting Liggett, 66 F.2d 678 and Vartanian, on The Law of Automobiles in Tennessee, p. 412, § 121).

After noting the preceding authorities, the Tennessee Supreme Court found that the trial error erred in not also granting the directed verdict in favor of the employer as to the plaintiff's allegation of simple negligence. Home Store, 166 S.W.2d at 622. Although the court in Home Store referred to the course and scope of employment issue, similar to Ball, the Home Store court did not explicitly discuss whether the employee-driver was acting within the course and scope of his employment.

Indeed, the Home Store court noted that, although the employer "correctly stated the law" regarding the trial court's refusal "to charge its special requests as to the [employee-driver]'s want of authority to let the boys ride in the truck in violation of instructions[,]" because of the court's determination that the trial court erred in not granting the directed verdict as to the first count, the court designated these issues immaterial. Home Store, 166 S.W.2d at 622.

In Lipscomb, the parents of the decedent sued an employer, alleging that the negligent actions of the employer's agent, a driver of a truck, caused the decedent's death while the agent-driver was performing duties within the scope of his employment for the employer. Lipscomb, 5 So.2d at 42. While on a trip for the company, the agent-driver picked up the decedent as a passenger. Id. The trip was uneventful until the agent-driver attempted to cross a railroad, at which time the truck was struck and both the agent-driver and the decedent were killed instantly. Id. The plaintiffs argued that the agent-driver regularly invited persons to accompany him on trips made in the discharge of his duties with the employer and the employer impliedly consented to and acquiesced in this conduct. Id. Alternatively, the plaintiffs asserted, even if the employer did not have knowledge of the agent-driver's habit of inviting persons to ride with him, the employer should be liable on grounds that the agent-driver acted willfully and wantonly. Id. at 42-43. The employer denied any knowledge that the agent-driver had a habit of inviting persons to ride with him and asserted that the agent-driver was acting in violation of the employer's rules and beyond the scope of his employment. Id. at 43.

The Lipscomb court found that the record was well substantiated that the agent-driver frequently allowed persons to ride in the truck, but that the record was also clear that the employer made a consistent effort to enforce its rule that no unauthorized persons were allowed in its trucks. Id. Thus, the court concluded, the agent-driver did not have any apparent authority to invite the decedent to ride in the truck and therefore, the decedent was

a trespasser as to the employer. Id. at 44. The Lipscomb court then quoted what it designated the "majority rule":

[I]t is well settled by the weight of judicial decisions that, if after the unauthorized act of the servant and the violation of his duty to his master, and when acting in the general scope of his authority, he becomes guilty of wanton, willful or reckless negligence in the operation of the machine or vehicle in his charge and injuries result therefrom to his invitee or licensee, the master is liable therefor, such operation being regarded as done within the general scope of his authority.

Id. at 44 (quoting 5 Blashfield'S Cyclopedia of Automobile Law and Practice, Perm. Ed. §§ 3016, 3017, pages 144-51). The Lipscomb court concluded that it was "disposed to follow the majority rule" stated above and thus, it would need to inquire into whether the decedent's death was due to the willful and wanton negligence of the agent-driver, ultimately concluding that the agent-driver's actions were not willful and wanton. Id. at 44-45. In so holding, the Lipscomb court did not explicitly discuss whether the agent-driver was acting within the course and scope of his employment.

In Stone, a young boy was invited by a employee to ride on a wagon driven by the employee and owned by the employee's employer. Stone, 91 S.W. at 199. After riding a short distance on the wagon, the boy jumped off, fell to the ground, and the wagon ran over him, causing fatal injuries. Id. at 199-200. Suit was brought against the employer, alleging that the boy's injuries were a result of the employee's negligence in permitting the boy to ride the wagon. Id. at 200. The jury returned a verdict against the employer and the employer appealed. Id. The Tennessee Supreme Court reversed, finding that

The case made out is one where a skillful driver is placed in charge of his master's wagon. . . . It is not claimed that the driver was either expressly or by implication authorized by his master to extend the invitation to the children to get upon the wagon, or that this act of the servant was in any sense or degree within the scope of his employment or in furtherance of his master's business. Under these facts we think [it] is [sic] well settled that the master cannot be called upon to respond in damages for the injury resulting from such unauthorized act.

Id. Once again, the court in Stone did not explicitly discuss course and scope of employment and it appears that the type of negligence alleged was that of simple negligence, not willful and wanton.

The Stone case also discusses and bases its holding, in part, on the tort doctrine of attractive nuisance, addressing the plaintiff's argument that the wagon was "so dangerously attractive to young children that the duty devolved upon the owner to exercise corresponding diligence to see that no injury resulted to them therefrom, and, failing to do so in the present case, it is liable." Stone, 91 S.W. at 200. The Stone court was also careful to note that "[t]he authority of this case must be confined within the narrow limits of its own facts and will not be extended to support a judgment resting on facts like those presented in this record." Id. at 201.

In Liggett, the plaintiff was riding as a passenger in a car being driven by an employee who was using the car on the business of his employer. Liggett, 66 F.2d at 680. An accident occurred and the plaintiff sued the employer asserting that the actions of the employee were negligent and that such negligence caused the plaintiff's injuries. Id. The court then reviewed various principles of agency law, noting that, generally, "[a]n employee in possession of his employer's automobile has no implied or apparent authority to invite others to ride with him, and, if a passenger is injured by the negligence of an employee while riding in the employer's automobile pursuant to an invitation of the employee, the employer is not liable. . . ." Id. at 685. The court then acknowledged that "the authorities generally make

an exception in the case of willful and wanton negligence of the employee." Id. The court ultimately concluded, however, that under the facts of that case, there was "no claim of such wanton or willful negligence" and thus, "that exception need not be considered." Id.

The more recent case of Lucas v. Schneider Nat. Carriers, Inc., 953 F.2d 644, 1992 WL 9027 (6th Cir. Jan 22, 1992) (Table) is also helpful to the Court's analysis. In Lucas, the plaintiff, a wife of a truck driver, was traveling with her husband in a truck owned by the defendant, the husband's employer. Lucas, 1992 WL 9027 at *1. The plaintiff's husband was driving the truck when, for reasons unknown, the truck left the roadway and overturned. Id. The plaintiff's husband, the driver, was killed, and the plaintiff was severely injured. Id. The plaintiff brought suit against the defendant, relying on the doctrine of res ipsa loquitur and alleging that the negligent driving of her deceased husband was the cause of her injuries and such negligence could be imputed to the defendant on theories of respondeat superior or apparent authority and agency. Id. Although the employer permitted spouses of drivers to ride as passengers under some circumstances, the defendant argued that these circumstances were not present and it was therefore against the defendant's policy for the husband to have had his wife as a passenger in the truck. Id. at *3.

The trial court agreed and concluded that the husband's "lack of actual authority [was] overwhelming" and the plaintiff was a trespasser under Tennessee law. Lucas, 1992 WL 9027 at *3-*4. The court then stated the now familiar proposition from Ball, that "[w]here an employee . . . contrary to instructions from his employer, permits others to ride on the truck . . . the status of the rider is not that of a guest or invitee but of trespasser with respect to the employer. So, when such a rider is injured, the employer is liable only for such injuries as are caused by the wanton or willful acts of the driver." Id. at *4. The Lucas court ultimately concluded that the plaintiff's claim must fail because her theory of res ipsa loquitur liability could not be used to show willful and wanton negligence. Id.

D. The Facts of this Case

The cases referenced and analyzed above do not explicitly discuss whether each employee was acting within the course and scope of his employment with the employer. However, each case discusses facts important to the course and scope of employment inquiry and principles of agency law: the scope of the employee's authority to perform the general act he was performing for the employer when the complained of accident occurred; the apparent, actual, or ostensible authority each employee had to do the act complained of; whether that particular act was disallowed by the employer; the employer's knowledge or lack of knowledge regarding the employee's wrongful acts; and the passenger's status in relation to the employer. For instance, in each of the cases, the courts made a point of noting whether the employee had the general authority to do what the employer was doing — i.e., drive the vehicle for the employer. The courts also noted whether the employee had the implied, apparent, or ostensible authority to do the disallowed act — i.e., invite a passenger to ride on the employer's vehicle. Finally, the courts discussed the status of passengers vis-a-vis the employers — i.e., a passenger in an employer's vehicle riding under an unauthorized invitation by the employee is a trespasser as to the employer. In all these cases, the injury to the plaintiff occurred when the employee was engaged in conduct that he had the general

authority to do for his employer — drive the employer's vehicle. In all these cases, the employee did not have the authority to invite another person into the vehicle. Moreover, the courts in these cases did not have to decide the precise issue that is before this Court: whether an employer could be held liable for the willful and wanton conduct of an employee when that employee not only invites a passenger into the employer's vehicle, but allows the unauthorized passenger to operate the vehicle.

In Ball and the related cases, the conduct of the employees occurred within the general authority given to them by their employers — the authority to operate the employer's vehicle. However, the specific conduct of the employees, allowing passengers to ride in the employer's vehicle, was prohibited. In this case, Ritchie's conduct, hauling cargo and operating a truck owned by defendant, was also within the general authority given by defendant to Ritchie. Further, per the jury's finding, in permitting Bowman to operate the truck, Ritchie was acting willfully and wantonly. Thus, the specific conduct of Ritchie that the jury found to be willful and wanton — relinquishing control of the truck to Bowman — was unauthorized and prohibited by defendant. Under Ball, a employer may be liable for an employee's conduct, even if it was "contrary to instructions from his employer," when another person suffers injuries "caused by the wanton or wilful [sic] acts of the driver." Ball, 342 S.W.2d at 680-81. Thus, the facts of this case and the findings of the jury fall almost squarely within the Ball statement of liability.

However, the Court must note that the general scope of employment within which Ritchie's conduct occurred differs from the facts of Ball and the other relevant cases. This is because Ritchie, the employee, was not operating the truck at the time of the accident. In the other cases analyzed by the Court, the employees were driving or operating the vehicles when the accidents occurred. The Court, however, does not find that any of the preceding cases limited the specific conduct that is the touchstone for the statement of liability in Ball to an employee's actual operation of a vehicle. Rather, the cases recite the proposition for an employer's liability due to willful and wanton conduct within the courts' more general references to an employee's willful and wanton "conduct," not the narrow category of an employee's willful and wanton "driving" or "operation" of a vehicle. Thus, the Court does not find that this distinguishing fact precludes plaintiff from recovery.

The courts that have followed the proposition stated in Ball, by expressly singling out and distinguishing an employee's conduct that was willful and wanton, manifested an intent to enable a potential plaintiff to recover for his or her injuries even when the employee was acting contrary to the employer's directive. For instance, in Ball, the employee's conduct was unauthorized. However, because the employee's conduct was not willful and wanton, the employer was not liable. Ball, 432 S.W.2d at 680-82. Similarly, in Lipscomb, the employee's actions were unauthorized and in violation of his duties to his employer. Lipscomb, 5 So.2d at 44. However, like in Ball, the court found that the employer was not liable because the employee's conduct was not willful and wanton. Id. at 44-45. Liggett is also similar. The Liggett court noted the general rule that an employer will not be liable for the unauthorized act of an employee inviting a passenger to ride in an employer's vehicle, but also acknowledged the "exception in the case of wanton and willful negligence of the

employee." Liggett, 66 F.2d at 685. In Stone, the court noted that the actions of the employee were not "in any sense or degree within the scope of his employment or in furtherance of his master's business." Stone, 91 S.W. at 200. Because the employee's actions were only alleged to be negligent (not, by implication, willful and wanton), "[u]nder these facts . . . the master cannot be called upon to respond in damages for the injury from such unauthorized act." Id.

The facts of this case present the situation contemplated but not presented in Ball, Lipscomb, and Liggett, unauthorized conduct by an employee that was in violation of direct orders of the employer, and conduct by the employee that was willful and wanton, not merely negligent, like in Stone. This is indeed a departure from the typical, more contemporary course and scope of employment analysis in that it does not use course and scope of employment as the test by which liability is determined, utilizing instead an inquiry into the type of conduct engaged in by the employee and the passenger's status in relation to that of his or her employer. The Court cannot conclude that the courts that distinguished willful and wanton conduct by employees intended nothing by explicitly excepting such conduct from conduct that was simply negligent. Doing so would render meaningless the willful and wanton "exception" identified by these courts. The cases discussed above do not support such a result.

Thus, for the reasons given above, the Court finds the facts of this case fall within the statement of law articulated in Ball and the other relevant cases. Accordingly, the jury's determination that the conduct of Ritchie was willful and wanton renders defendant, as Ritchie's employer, liable for plaintiff's injuries and the Court will enter judgment in favor of plaintiff and against defendant in the amount of $206,250.00.

The jury determined that plaintiff was entitled to $275,000.00 in damages and assigned 65% of the fault to Ritchie, 10% of the fault to defendant, and 25% of the fault to Bowman [Doc. 92]. Accordingly, because the fault of Ritchie is imputed to defendant for Ritchie's willful and wanton conduct, defendant's total fault is 75%. Under Tennessee law and principles of comparative fault, the total amount of damages for which defendant is liable is thus $206,250.00, or $275,000.00 × 75%.

E. Punitive Damages

Under Tennessee law, punitive damages may be awarded against a principal whose liability arises from the acts of an agent. See Medlin v. Clyde Sparks Wrecker Serv., Inc., 59 F. App'x 770, 775 n. 4 (6th Cir. 2003); see also Dodson v. Anderson, 710 S.W.2d 510, 513 (Tenn. 1986); Huckeby v. Spangler, 563 S.W.2d 555, 559 (Tenn. 1978). Accordingly, and in light of the above determination that defendant, Ritchie's employer, is liable for Ritchie's willful and wanton conduct under Ball and the other relevant cases, the jury's finding that plaintiff is entitled to punitive damages for the conduct of Ritchie, the Court's previous ruling that the estate of Ritchie cannot be liable for punitive damages, and the dismissal from this action of the estate of Ritchie, the Court finds that defendant may indeed be liable for punitive damages for the conduct of Ritchie. The Court will therefore schedule the punitive damages phase of this trial to enable the jury to determine the amount of punitive damages. Following the jury's determination of the amount of punitive damages, the Court will enter its final judgment.

III. Conclusion

For the reasons stated herein, it is hereby determined that defendant is liable to plaintiff for the willful and wanton conduct of Ritchie. Final judgment will be entered pending the Court's setting of a date certain as to the punitive damages phase of the trial at which the amount of punitive damages will be determined by the jury. Plaintiffs' Motion [Doc. 96] for new trial pursuant to Federal Rule of Civil Procedure 59 is also DENIED without prejudice.

IT IS SO ORDERED.

l.Dec. 418, 491 N.E.2d 464, 474 (1986) (internal citations omitted). Accordingly, the court held that the defendant's mere submission of the termite inspection report "evinces the requisite intent" under the ICFA because the "sole purpose for the requested report . . . was to assist plaintiffs in securing VA financing." Id. Similar persuasive evidence exists in judicial interpretations of materially indistinguishable consumer protection laws in Arizona, Delaware, Iowa, Minnesota, and Missouri. We see no basis for concluding that Arkansas courts would interpret Arkansas Code § 4-88-108(2) differently with regard to the state-of-mind requirement.

See Ariz.Rev. Stat. Ann. § 44-1522(A); Flagstaff Med. Ctr., Inc. v. Sullivan, 773 F.Supp. 1325, 1361-62 (D.Ariz. 1991), rev'd in part on other grounds, 962 F.2d 879 (9th Cir. 1992) ("It is not necessary to show specific intent to deceive; the intent to do the act involved is sufficient."); Arizona ex rel. Babbitt v. Goodyear Tire Rubber Co., 128 Ariz. 483, 626 P.2d 1115, 1118 (1981) (same).

See Del. Code Ann. tit. 6, § 2513(a); Nash v. Hoopes, 332 A.2d 411, 413 (Del.Super.Ct. 1975) ("The only reference to `intent' in this section is that the outlawed action be done `with intent that others rely upon such concealment, suppression or omission Fraudulent intent in connection with the making of such unlawful practice is not requisite to the availability of the remedies of the statute.").

See Iowa Code § 714.16(2)(a); Iowa ex rel. Miller v. Pace, 677 N.W.2d 761, 771 (Iowa 2004) ("[I]t is not necessary . . . to prove that the violator acted with an intent to deceive, as is required for common law fraud. . . . [T]he only intent required by the statute is that the defendant act `with the intent that others rely upon his omissions.") (internal citations omitted).

See Minn. Stat. § 325F.69, subdiv. 1; McNamara v. Nomeco Bldg. Specialties, Inc., 26 F.Supp.2d 1168, 1171 (D.Minn. 1998) ("Simply stated, one making representations in the sale of consumer goods can be held liable, even though he had no specific intent to falsely mislead the consumer.").

See Mo.Rev. Stat. § 407.020, subdiv. 1; Missouri ex rel. Webster v. Areaco Inv. Co., 756 S.W.2d 633, 635 (Mo.Ct.App. 1988) ("It is the defendant's conduct, not his intent, which determines whether a violation has occurred."); Missouri ex rel. Ashcroft v. Mktg. Unlimited of Am., Inc., 613 S.W.2d 440, 445 (Mo.Ct.App. ` 1981) (same).
The Alaska Consumer Fraud Act and the West Virginia Consumer Credit and Protection Act ("WVCCPA") also contain state-of-mind standards virtually identical to Arkansas Code § 4-88-108(2). See Alaska Stat. § 45.50.471(b)(12); W. Va. Code § 46A-6-102(7)(M). However, our research reveals no cases in which a court has analyzed those statutes with regard to the state-of-mind requirement. Admittedly, the Fourth Circuit has stated that plaintiffs must satisfy the standard requirements for fraud in order to invoke the WVCCPA. Jones v. Sears Roebuck Co., 301 Fed.Appx. 276, 287 (4th Cir. 2008) (unpublished per curiam). However, that opinion neither analyzes the language of the WVCCPA nor cites any case law to support the proposition that the WVCCPA requires a fraudulent intent. As such, we respectfully find the opinion to be of little guidance in predicting how the Arkansas Supreme Court would interpret the ADTPA.

Third, the Arkansas legislature intended to proscribe more than traditional fraud when used it the term "deceptive act or practice" in the ADTPA's catch-all provision. See Ark. Code § 4-88-107(a)(10) (proscribing "any other unconscionable, false, or deceptive act or practice in business, commerce, or trade"). Because, "deceptive act or practice" is not defined in any Arkansas statute, regulation, or opinion, we look elsewhere. Arkansas is one of many states that enacted a deceptive and unfair trade practices act, or a "little FTC act," in the 1960s or 1970s. The majority of states with such laws do not require knowing or intentional deception in order to state an actionable claim under their respective acts. See Carolyn L. Carter Jonathan Sheldon, Unfair and Deceptive Acts and Practices, § 4.2.4.1, at 193-95 (7th ed. 2009) (collecting authorities); Donald M. Zupanec, Annotation, Practices Forbidden by State Deceptive Trade Practice and Consumer Protection Acts, 89 A.L.R.3d 449, at § 4 (1979); see also Wallis v. Ford Motor Co., 362 Ark. 317, 208 S.W.3d 153, 161-62 (2005) (surveying other states' consumer-protection statutes to interpret the ADTPA). Those states' interpretations of deceptive trade practices are further buttressed by many federal court opinions holding that a defendant's good faith is immaterial to whether a "deceptive act" has occurred under § 5 of the Federal Trade Commission Act because that statute does not require an intent to deceive. Along the lines of the Federal Trade Commission's definition of deception, many courts have defined trade practices as deceptive if they are likely to deceive or have a capacity to deceive a reasonable consumer. See Black's Law Dictionary 435 (8th ed. 2004) (defining "deceptive act": "As defined by the [FTC] and most state statutes, conduct that is likely to deceive a consumer acting reasonably under similar circumstances.").

See, e.g., F.T.C. v. Verity Int'l, Ltd., 443 F.3d 48, 63 (2d Cir. 2006); F.T.C. v. Bay Area Bus. Council, Inc., 423 F.3d 627, 635 (7th Cir. 2005); F.T.C. v. Freecom Commc'ns, Inc., 401 F.3d 1192, 1204 n. 7 (10th Cir. 2005); Removatron Int'l Corp. v. F.T.C, 884 F.2d 1489, 1495 (1st Cir. 1989); Orkin Exterminating Co. v. F.T.C, 849 F.2d 1354, 1368 (11th Cir. 1988); Chrysler Corp. v. F.T.C, 561 F.2d 357, 363 n. 5 (D.C. Cir. 1977); Beneficial Corp. v. F.T.C, 542 F.2d 611, 617 (3d Cir. 1976); Doherty, Clifford, Steers Shenfield, Inc. v. F.T.C, 392 F.2d 921, 925 (6th Cir. 1968); Feil v. F.T.C, 285 F.2d 879, 896 (9th Cir. 1960); see also United States v. Johnson, 541 F.2d 710, 712 (8th Cir. 1976) ("[L]iability for civil penalties [under the FTCA] arises without a need for any showing that the practices were intentional or malicious."); Benrus Watch Co. v. F.T.C, 352 F.2d 313, 318 (8th Cir. 1965) ("Whether a trade practice . . . is deceptive depends . . . on the impression which such a practice makes on the minds of the consuming public").

See, e.g., In re Pharm. Indus. Average Wholesale Price Litig., 582 F.3d 156, 185 (1st Cir. 2009) (interpreting the Massachusetts consumer protection statute); Doe v. Sex-Search.com, 551 F.3d 412, 418 (6th Cir. 2008) (Ohio); Zlotnick v. Premier Sales Group, Inc., 480 F.3d 1281, 1284 (11th Cir. 2007) (Florida); Bober v. Glaxo Wellcome PLC; 246 F.3d 934, 938-39 (7th Cir. 2001) (Illinois); cf. Doe v. Boys Clubs of Greater Dallas, Inc., 907 S.W.2d 472, 479-80 (Tex. 1995) ("Generally, an act is false, misleading, or deceptive if it has the capacity to deceive an `ignorant, unthinking, or credulous person.'") (citation omitted). But see Missouri ex rel. Nixon v. Telco Directory Pub., 863 S.W.2d 596, 601-602 n. 2 (Mo. 1993) (listing cases from twenty-one states adopting the "capacity to deceive" standard but holding that, under Missouri's act, deception is a species of fraud).

In addition, Arkansas Code § 4-88-108(1) lists both fraud and deception as unlawful acts. These terms cannot be coterminous, as that result would violate the basic principle that a statute must be construed so that every word is given meaning and effect, if possible, "so that no word is left void, superfluous or insignificant." Rose v. Ark. State Plant Bd., 363 Ark. 281, 213 S.W.3d 607, 614 (2005).

Finally, our interpretation of the ADTPA is influenced by the fact that the preamble to the ADTPA provides that the statute was enacted "to protect the interests of both the consumer public and the legitimate business community." Mosby v. Int'l Paper Co., No. 5:07CV00314-WRW, 2008 WL 2669148, at *2 (E.D.Ark. July 1, 2008) (unpublished) (quoting the ADTPA preamble). Furthermore, the Arkansas Supreme Court has recognized "the legislature's remedial purpose" in enacting the ADTPA and also that a "liberal construction of the [A]DTPA is appropriate." Arkansas ex rel Bryant v. R A Inv. Co., 336 Ark. 289, 985 S.W.2d 299, 302 (1999). Liberal construction in this context means that the ADTPA should protect consumers from trade practices beyond common law fraud.

In light of these considerations, we conclude that summary judgment was inappropriate as to Curtis Lumber's claims under §§ 4-88-107(a)(1) and 4-88-108(2). A reasonable fact-finder could conclude that LP omitted a material term from the rebate documents with the intent that retailers and customers rely on the rebate documents — and likewise that LP's rebate documents constituted a deceptive trade practice. But unlike the fraud and constructive fraud claims, the ADTPA claims are viable despite the lack of evidence regarding LP's knowledge of a false or deceptive practice or it's specific intent to deceive.

4. Promissory Estoppel

Curtis Lumber originally alleged a claim for equitable estoppel. When the district court partially granted summary judgment, it also granted Curtis Lumber leave to amend the complaint to state a claim for promissory estoppel. That leave to amend became moot when the court later found that LP included a "use" term in the rebate documents. The parties argue on appeal whether a promissory estoppel claim should survive summary judgment, and we evaluate the claim accordingly.

Under Arkansas law, promissory estoppel requires that the plaintiff clearly show four elements: "(1) the making of a promise, (2) intent by the promisor that the promise be relied upon, (3) reliance upon the promise by the promisee, and (4) injustice resulting from a refusal to enforce the promise." In re Hilyard Drilling Co., 840 F.2d 596, 602 (8th Cir. 1988); see also K.C. Props, of N.W. Ark., Inc. v. Lowell Inv. Partners, LLC, 373 Ark. 14, 280 S.W.3d 1, 14 (2008) ("[T]he party asserting estoppel must prove it strictly, there must be certainty to every intent, the facts constituting it must not be taken by argument or inference, and nothing can be supplied by intendment."). Curtis Lumber alleges that LP promised to pay rebates if customers met the qualifications on the rebate documents, LP intended retailers like Curtis Lumber and end-user customers to rely on the promise, Curtis Lumber detrimentally relied on LP's promise, and Curtis Lumber's injuries constitute an injustice. Notably, other courts have held that a plaintiff is not required to show that a defendant harbored a fraudulent intent in order to recover-under the doctrine of promissory estoppel. See Harris v. Chicago Hous. Auth, No. 97 C 6285, 1998 WL 386371, at *3 n. 2 (N.D.Ill. July 2, 1998) (unpublished) ("Defendant's contention that fraud or intent to deceive is a required element of a promissory estoppel claim is flatly incorrect").

LP contends that Curtis Lumber cannot prove the elements of promissory estoppel for two reasons. First, LP argues that it fulfilled the promises it made regarding the rebate program. However, we believe a reasonable fact-finder could disagree. LP promised to pay rebates to customers who purchased SmartSide products and, importantly, failed to state a condition to this payment that the customers use the products by a certain date or submit proof of their use to LP. See supra pp. 772-73. As such, LP's first argument fails.

LP's second argument is that relief under promissory estoppel is limited to "enforcement of the promise" between LP and the customers, and therefore Curtis Lumber cannot recover for the costs it incurred in reliance on LP's promise. The sole remedy, according to LP, is requiring LP to pay rebates to the customers. However, LP's argument is contrary to Section 90 of the Restatement (Second) of Contracts, which, in Arkansas, is the "black-letter law on promissory estoppel." K.C. Props., 280 S.W.3d at 14. Comment to § 90 expressly contemplates a variety of available remedies:

A promise binding under this section is a contract, and full-scale enforcement by normal remedies is often appropriate. But the same factors which bear on whether any relief should be granted also bear on the character and extent of the remedy. In particular, relief may sometimes be limited to restitution or to damages or specific relief measured by the extent of the promisee's reliance rather than by the terms of the promise.

Restatement (Second) of Contracts § 90, cmt. (1981) (emphasis added). Moreover, the Restatement also contemplates claims brought by third parties who determentally rely on a promise. See id. § 90(1) ("A promise which the promisor should reasonably expect to induce action or forbearance on the part of the promisee or a third person and which does induce such action or forbearance. . . .") (emphasis added); see also id. § 90 cmt. c. (reliance by third parties). LP cites two Arkansas cases, Peoples National Bank v. Linebarger Construction Co., 219 Ark. 11, 240 S.W.2d 12 (1951), and Country Corner Food Drug, Inc. v. Reiss, 22 Ark. App. 222, 737 S.W.2d 672 (1987), for the position that the remedies under promissory estoppel are limited, but neither case is apposite. Therefore, we conclude that Arkansas law permits Curtis Lumber to recover damages it incurred in reliance on LP's promise under the doctrine of promissory estoppel.

D. Damages

Curtis Lumber seeks damages for lost profits on the sales of SmartSide products, increased costs associated with carrying extra inventory, the value of rebates that Curtis Lumber paid to its customers, the value of sales it was unable to collect due to LP's acts, injuries to goodwill, attorneys' fees, and punitive damages. LP argues that several of the damages claims are barred by law, but it does not appear to challenge the damages sought for inventory costs, goodwill, or attorneys' fees.

(1) Lost Profits

Arkansas has not decided whether lost profits are recoverable under promissory estoppel. See S. Beach Beverage Co. v. Harris Brands, Inc., 355 Ark. 347, 138 S.W.3d 102, 108 (2003) (reserving this question). Lost profits are recoverable, however, under the ADTPA. See Ark. Code § 4-88-113(f) ("Any person who suffers actual damage or injury as a result of an offense or violation as defined in this [Act] has a cause of action to recover actual damages, if appropriate, and reasonable attorney's fees."); cf. Smith v. Walt Bennett Ford, Inc., 314 Ark. 591, 864 S.W.2d 817, 825 (1993) ("[L]ost profits are recoverable under the [Federal Odometer Fraud] Act as `actual damages' provided they, are proved to the requisite levels of certainty and causation.").

The district court initially held that Curtis Lumber has presented enough evidence to recover damages for lost profits. In its order granting LP's motion for reconsideration, however, the court determined that the voluntary payment rule precludes Curtis Lumber from recovering lost profits. This result is incorrect. Although Curtis Lumber's payments to customers arguably were "voluntary," Curtis Lumber's alleged lost profits were not. LP does not argue to the contrary. Accordingly, we hold that Curtis Lumber may pursue damages for lost profits on the cancelled sales.

(2) Rebates Paid by Curtis Lumber

This section concerns the rebates that Curtis Lumber paid, either in the form of a cash refund or an account credit, to seventeen of its customers after LP refused to pay the rebates. LP argues that Curtis Lumber cannot recover "any payments or account credits it gave to its customers," because Curtis Lumber voluntarily gave those payments and credits. Under Arkansas's well-established voluntary payment rule, a person cannot recover money that he or she has voluntarily paid. See Boswell v. Gillett, 226 Ark. 935, 295 S.W.2d 758, 761 (1956); see also TB of Blytheville, Inc. v. Little Rock Sign Emblem, Inc., 328 Ark. 688, 946 S.W.2d 930, 932 (1997). A payment is deemed voluntary, and thus not recoverable, "when a person without mistake of fact or fraud, duress, coercion, or extortion pays money on a demand which is not enforceable against him." Ritchie v. Bluff City Lumber Co., 86 Ark. 175, 110 S.W. 591, 592 (1908). Curtis Lumber admits that it had no enforceable obligation to pay rebates to its customers. Instead, it argues that the fraud and duress exceptions to the voluntary payment rule apply, and therefore, payment of the rebates was not voluntary.

We do not interpret LP's argument to apply to the fourteen orders that Curtis Lumber was unable to collect allegedly due to LP's acts. Curtis Lumber did not pay those customers either in the form of a cash refund or an account credit. At most, Curtis Lumber failed to pursue legal action to collect the amounts owed. Even if we consider Curtis Lumber's inaction to be a "payment," we would find that there exists a factual question as to whether it was involuntary under the duress exception. See infra pp. 783-86.

The fraud exception does not apply because, as we stated previously, Curtis Lumber has not shown a viable fraud claim. Moreover, even if Curtis Lumber could establish the requisite state of mind for fraud, it has not shown that it paid rebates to customers in reliance on LP's allegedly fraudulent statement. Stated differently, LP's alleged fraud did not induce Curtis Lumber to pay rebates. At most, Curtis Lumber has shown causation — i.e., that LP's statements caused a situation in which it felt compelled to pay rebates to the customers. That is different, however, from the situation where a payor is fraudulently induced to make a payment, in which case the law treats the payment as involuntary. See 70 C.J.S. Payment § 120.

Curtis Lumber's duress argument is more compelling. The record shows that Curtis Lumber marketed LP's products and the rebate promotion to customers representing seventy-five percent of its business. After LP's June 2007 letter to the rebate applicants, Curtis Lumber's owner, who was relatively new to the business, stated that he was compelled to pay customers the rebates "[o]ut of concern for losing their other business and as a result of having presented this program to them." Indeed, two of Curtis Lumber's customers stated that they would have considered withdrawing their business from Curtis Lumber if the rebates were not paid. The coercive pressures on Curtis Lumber are further evidenced by the email it sent to LP through counsel in July 2007 demanding the rebates be paid. Drawing all reasonable inferences in favor of Curtis Lumber, there is at minimum a factual dispute as to whether Curtis Lumber's decision to pay rebates was compelled by a threat of losing substantial business. The question, then, is whether this type of pressure was enough to render payment involuntary under the doctrine of duress.

LP argues that we should not consider these statements at the summary-judgment stage because they are inadmissable hearsay. See Fed.R.Civ.P. 56(e)(1). However, the customers' statements are offered to show the effect of the out-of-court statements on the listener (Curtis Lumber) and thus, they are not hearsay. See United States v. Cline, 570 F.2d 731, 734 (8th Cir. 1978) (statements are non-hearsay when used to show the listener's state of mind); United States v. Herrera, 600 F.2d 502, 504 (5th Cir. 1979) (statements are non-hearsay when used to show listener's duress).

See Wermers Floorcovering, Inc. v. Santanna Natural Gas Corp., 342 Ill.App.3d 222, 276 Ill.Dec. 762, 794 N.E.2d 1012, 1014 (2003) ("Protest may also serve as evidence of compulsion and an unwillingness to pay. . . ."); see also 70 C.J.S. Payment § 119 (same); Richard A. Lord, 28 Williston on Contracts § 71:18 (4th ed.) (same).

LP first argues that the pressure from customers is irrelevant because Curtis Lumber can only assert the duress exception against the party who exerted pressure over it. In other words, Curtis Lumber cannot complain about pressure from the customers and allege duress against a third party (e.g., LP). Admittedly, this rule finds some support in a 113-year old Arkansas case:

The doctrine established by the authorities is that a payment is not to be regarded as compulsory, unless made to emancipate the person or property from an actual and existing duress imposed upon it by the party to whom the money is paid. . . . It is sufficient . . . when there is some actual or threatened exercise of power possessed, or believed to be possessed, by the party exacting or receiving the payment over the person or property of another from which the latter has no other means of immediate relief than by making the payment.

Vick v. Shinn, 49 Ark. 70, 4 S.W. 60, 61 (1887) (emphasis removed and added; quotations and internal citations omitted). However, the emphasized language from Vick was dicta because the issue on appeal in that case was the sufficiency of evidence to show duress. The court found that the payment was voluntary, and it did not decide whether duress can be asserted against a person different from the payee exerting pressure. Id.

In Bishop v. Bishop, 98 Ark. App. Ill, 250 S.W.3d 570 (2007), a modern Arkansas court bypassed a clear opportunity to embrace the rigid rule that LP now proposes. In Bishop, the plaintiff sought reimbursement from his ex-wife for payments that he made to a car dealership on his ex-wife's car, and the ex-wife claimed the payments were voluntary. Id. at 572-73. The plaintiff alleged duress because he made payments to protect his credit rating — i.e., that he was under pressure from third-party creditors. Id. at 573. Bishop ultimately held that the plaintiffs payments made prior to seeking legal relief were voluntary, but payments made after-ward were involuntary because they were made under protest. Id. Although the court quoted Vick's limited formulation of duress, it did not adopt the rule that duress can only be asserted against the person exerting pressure. Id.

Furthermore, we are not aware of any case in which a court has held that duress cannot be asserted against a non-payee. Duress is often asserted against payees, but it does not necessarily follow that duress is limited to that scenario. The duress exception, in essence, recognizes that payments made under compulsion are not voluntary. We believe it makes little difference who exerts pressure and who receives the payment, so long as the duress is causally tied to the defendant and the pressure is sufficient to reasonably deem a payment involuntary. Any limitation on this doctrine based on the identity of the party exerting pressure would be artificial. In sum, we believe the duress exception is flexible. See BMG Direct Mktg. Inc. v. Peake, 178 S.W.3d 763, 776 (Tex. 2005) ("[T]he voluntary-payment rule is an equitable one and may require balancing competing interests depending upon the parties' circumstances.").

We stress that our reasoning does not obviate the basic element of causation — Curtis Lumber must still prove that LP' acts caused it to pay rebates to seventeen customers. We agree with LP that an "unrelated third party" should not be held liable for the acts of a payee who exerts pressure on a payor. See W.R. Grimshaw Co. v. Nevil C. Withrow Co., 248 F.2d 896, 904 (8th Cir. 1957) ("The assertion of duress must be proven by evidence that the duress resulted from defendant's wrongful and oppressive conduct and not by plaintiffs necessities."). But LP is not an "unrelated third party." Viewing the record as we must, LP created a situation in which it was likely that customers would demand satisfaction from Curtis Lumber. In these circumstances, a reasonable jury could find LP's acts caused Curtis Lumber's dilemma and thereby caused Curtis Lumber to pay the rebates.

Next, LP argues that the evidence is insufficient to show duress because Curtis Lumber "had the absolute right" to deny the customers' requests for payment. Surely, duress is limited to situations in which the payor had " no other means of immediate relief than by making the payment." Vick, 4 S.W. at 61. The problem with LP's argument, though, is that Curtis Lumber's alternative options, in reality, would not have afforded relief. See 25 Am.Jur.2d Duress Undue Influence § 24 ("[T]he adequacy of the remedy is to be tested by a practical standard, which takes into consideration the exigencies of the situation of the alleged victim."). Curtis Lumber presented this promotion to its customers, and the customers who ordered SmartSide products represented a substantial portion of Curtis Lumber's overall business. To put it coloquially, it would have been penny wise but pound foolish for Curtis Lumber to demand payment from the customers and to refuse to pay rebates. That is, Curtis Lumber would have fared well in the short-term with the SmartSide promotion but suffered severe repercussions in its overall revenue. As such, a reasonable fact-finder could find that Curtis Lumber had no other means of immediate relief.

Finally, LP contends that Curtis Lumber is actually alleging "business duress" (also referred to as "economic duress" or "business compulsion"), which Arkansas courts have not recognized. Curtis Lumber responds that the modern trend in a wide variety of jurisdictions is to relax the voluntary payment rule to recognize that duress can exist from business pressures just as much as threats of physical harm. See, e.g., Machinery Hauling, Inc. v. Steel of W. Va., 181 W.Va. 694, 384 S.E.2d 139, 142 (1989) (collecting authorities and summarizing: "Through the years, there has been a steady expansion of duress principle such that direct dire harm is no longer essential, the focus instead being on whether the threat overbears the exercise of free will.").

Neither party cites Cox v. McLaughlin, 315 Ark. 338, 867 S.W.2d 460 (1993), which we find informative as to how the Arkansas Supreme Court would apply the duress exception in the context of the' voluntary payment rule. In that case, a cargo transportation broker arranged for a trucking company to deliver a shipment of pet food from a factory in Nebraska to a warehouse in Texas. Id., at 461. The trucking company leased a truck and agreed to pay a driver to haul the shipment. Id., While the shipment was en route, however, the trucking company told the driver that it could not pay for the delivery. Id., The driver refused to continue on the trip unless paid. Id. The broker, who did not want to lose its valuable brokerage account with the pet food company, agreed to pay the driver roughly the amount owed by the trucking company. Id. at 462. The broker later refused to pay the full amount, and the driver sued for breach of contract. Id. The broker sought to void the agreement with the driver on the basis of duress — even though there was no express threat from the pet food company, let alone a threat of physical harm. The Arkansas Supreme Court expressly recognized "[e]conomic duress . . . as a valid excuse for voiding a contract." Id. at 463. Ultimately, the court held that questions of fact precluded summary judgment on the duress issue, e.g., whether the broker would have suffered "serious financial hardship," whether the broker was "the victim of a wrongful act," and whether "other remedies would be inadequate." Id., at 464. Although Cox dealt with a party seeking to void a contract, we believe its analysis is instructive for duress in general. In light of Cox and the persuasive circumstances of this case, we believe the Arkansas Supreme Court would hold that duress may have existed in this case. Thus, summary judgment was inappropriate to the extent it limited damages based on the voluntary payment rule.

Cox is also persuasive authority against LP's argument that duress exists only where pressure is exerted by the payee. In Cox, the economic pressure originated from the third-party pet food company, but the payee was the trucker. By remanding the case for trial, the Arkansas Supreme Court implicitly held that duress can exist where a third party exerts pressure.

(3) Punitive Damages

By statute in Arkansas, punitive damages are restricted to situations where:

(1) The defendant knew or ought to have known, in light of the surrounding circumstances, that his or her conduct would naturally and probably result in injury or damage and that he or she continued the conduct with malice or in reckless disregard of the consequences, from which malice may be inferred; or (2) The defendant intentionally pursued a course of conduct for the purpose of causing injury or damage.

Ark. Code § 16-55-206. Moreover, plaintiffs are required to satisfy the above standard by clear and convincing evidence. Id., § 16-55-207.

Curtis Lumber argues that punitive damages are particularly appropriate in cases involving fraud. That is true, see Ray Dodge, Inc. v. Moore, 251 Ark. 1036, 479 S.W.2d 518, 524 (1972), but Curtis Lumber's claims based on intentional deception fail as a matter of law. Upon careful review of the record, we believe no reasonable jury could find that LP acted with malice or an intent to harm Curtis Lumber. As such, Curtis Lumber is not entitled to pursue punitive damages.

III. Conclusion

For the foregoing reasons, we affirm the district court's judgment with regard to Curtis Lumber's claims for fraud, constructive fraud, and knowing/intentional deceptive trade practices. We reverse the judgment with regard to the claims under Arkansas Code §§ 4-88-107(a)(10) and 4-88-108(2) and promissory estoppel. As to damages, we affirm the district court's limitation on punitive damages but reverse the limitation based on the voluntary payment rule. We remand for further proceedings consistent with this opinion.