## Facts

- QHG of Springdale, Inc. (QHG) employed Ernest Archer, M.D., an OB/GYN, under a detailed five-year written employment agreement executed in October 2002 after the parties rescinded an earlier 2000 agreement.
- The 2002 contract contemplated rotating call coverage so Archer would not be on call 24 hours a day, seven days a week, but it did not specify the amount of rotation required, the value of on-call services, or QHG’s responsibility if it failed to arrange rotation.
- QHG’s internal policy stated that no physician should be on call 24 hours a day, seven days a week.
- Archer claimed QHG failed to arrange any meaningful call rotation; except for a few weeks here and there, Archer was on call 24/7 for more than two years.
- Archer repeatedly complained to QHG about the nonstop call burden and also asserted that QHG denied time-off requests and failed to provide adequate personnel and equipment.
- In January 2004, QHG exercised the contract’s without-cause termination option and gave 180 days’ notice, making the termination effective in July 2004.
- In May 2004, before the July effective date, Archer resigned his medical staff privileges because he believed he could not operate safely due to problems with his hands.
- The next day, QHG terminated Archer’s employment for cause, relying on contract language tied to loss of staff privileges.
- Archer sued QHG, asserting breach of the 2002 employment agreement and unjust enrichment based on QHG’s receipt of nonstop call coverage.
- At trial, the circuit court granted QHG’s directed-verdict motion on unjust enrichment; the breach-of-contract claim went to the jury.
- The jury found QHG breached the 2002 agreement and awarded Archer $387,500.
- QHG appealed the breach verdict and damages. Archer filed a cross-appeal challenging the directed verdict on unjust enrichment, but stated it was conditional on QHG obtaining reversal.

## Issues

1. Whether substantial evidence supported the jury’s finding that QHG materially breached the 2002 employment contract first (primarily by failing to provide call rotation), defeating QHG’s argument that it could terminate Archer for cause when he resigned staff privileges.
2. Whether the evidence supported the jury’s $387,500 damages award as contract damages rather than an improper or speculative recovery.
3. Whether the appellate court should address Archer’s cross-appeal from the directed verdict on unjust enrichment when Archer stated the cross-appeal would be abandoned if the breach judgment was affirmed.

## Decision

- Affirmed the judgment on the jury’s breach-of-contract verdict for Archer.
- Held that substantial evidence supported the jury’s finding that QHG committed the first material breach, so QHG was not entitled to judgment as a matter of law based on its for-cause termination theory.
- Affirmed the $387,500 damages award as supported by the record and not an improper measure of damages.
- Declined to reach Archer’s unjust-enrichment cross-appeal because it was expressly conditional and was abandoned once the court affirmed on QHG’s direct appeal.

## Legal Principles

- A party that commits the first material breach of a contract generally cannot rely on the other party’s later nonperformance, or on contractual enforcement provisions, to avoid liability for its own breach.
- Appellate review of a jury verdict is limited to whether substantial evidence supports the verdict, viewing the evidence and reasonable inferences in the light most favorable to the prevailing party and leaving credibility determinations to the jury.
- When contractual performance obligations are disputed and the proof supports competing accounts of performance and breach, the jury may determine whether a breach occurred and whether it was material.
- Contract damages must have a reasonable evidentiary basis; a damages award will be upheld if supported by proof that allows the jury to estimate loss with reasonable certainty under the contract theory submitted.
- A cross-appeal presented as conditional may be treated as abandoned (and therefore not decided) when the condition is not met.

## Conclusion

The Arkansas Court of Appeals affirmed a jury verdict awarding Dr. Archer $387,500 for QHG’s breach of a five-year physician employment contract, concluding that the evidence supported the jury’s determination that QHG materially breached first by failing for more than two years to provide the call rotation contemplated by the agreement, which prevented QHG from escaping liability by later invoking a for-cause termination tied to Archer’s resignation of staff privileges; because the breach judgment was affirmed, Archer’s conditional cross-appeal challenging the directed verdict on unjust enrichment was not addressed.


QHG of Springdale, Inc. v. Archer, 2009 Ark. App. 692 (2009)