Adams v. TDC General Contractors LLC

1
IN THE UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF ARKANSAS
TEXARKANA DIVISION
REUBEN L. ADAMS 	PLAINTIFF
v. 	Civil No. 4:22-cv-04110
TDC GENERAL CONTRACTORS LLC 	DEFENDANT
REPORT AND RECOMMENDATION
OF THE UNITED STATES MAGISTRATE JUDGE
Before the Court is TDC General Contractors LLC’s (“TDC”) Motion for Partial Summary
Judgment concerning the Arkansas Deceptive Trade Practices Act (“ADTPA”). 	ECF No. 54.
Plaintiff Rueben L. Adams’ (“Adams”) has responded to the Motion. ECF No. 65. 	TDC has also
filed a Reply. 	ECF No. 68. 	Pursuant to the provisions of 28 U.S.C. § 636(b)(1)(A) and Local
Rule 72.1, the Honorable Susan O. Hickey referred this Motion to the undersigned. ECF No. 72.
A hearing was conducted on September 25, 2024, on the instant motion and it is now ripe for
consideration.1
1. 	Background
On April 10, 2019, Adams engaged TDC to provide general contractor services for the
construction and related work of a multiunit residential apartment complex (“the Contract”)
located at 911 Pecorella Street in Texarkana, Arkansas (the “Apartment Complex”). ECF No. 2.
On November 9, 2022, Plaintiff filed this diversity suit alleging TDC failed to perform in a
workmanlike manner in the construction of the Apartment Complex within 180 days of the
contract execution date. In addition to the breach of contract claim, Plaintiff asserts claims based
on negligence, unjust enrichment, promissory estoppel, violation of the ADTPA, and negligent
1 During the September 25, 2024, hearing, the parties submitted arguments addressing the following motions: Motion
for Summary Judgment filed by Adams (ECF No. 48); Motion for Partial Summary Judgment (Damages) filed by
TDC (ECF No. 51); Motion for Summary Judgment (ADTPA) filed by TDC (ECF No. 54); and Motion for Summary
Judgment (Defects) filed by TDC (ECF No. 58). Each of these motions will be addressed with a separate Report and
Recommendation.
Case 4:22-cv-04110-SOH Document 119 Filed 12/06/24 Page 1 of 9 PageID #:
<pageID>

2
hiring, retention, and supervision. Id. On January 6, 2023, TDC filed its Answer to Adams’
Complaint admitting it entered a contract with Adams to construct the Apartment Complex in a
workmanlike manner. ECF No. 5. However, TDC denied all the other allegations made by Adams.
Id.
On June 18, 2024, TDC filed the instant motion arguing it is entitled to judgment as a
matter of law on Adams’ claim regarding any violation of the ADTPA because: 1) Adams has not
sufficiently pled a claim for violation of the ADPTA; 2) the safe-harbor provision of the ADTPA
applies and bars Adams’ claim; and 3) Adams cannot establish any causal connection between the
alleged violation of the ADTPA and the alleged injuries. ECF Nos. 54, p. 1, 55. TDC attached the
following exhibits to the motion: Permits issued by the City of Texarkana, Arkansas, including
Electrical, Mechanical, Plumbing and Multi-Unit Construction (ECF No 54-1); Inspections and a
Certificate of Occupancy (ECF No. 54-2); and TDC’s Expert Report of Jason Bodart (ECF No.
54-3).
TDC’s statement of undisputed facts states in relevant part:
3. The city of Texarkana, Arkansas is the regulatory body empowered to
promulgate rules and regulations governing application, approval, and construction
of commercial buildings in Texarkana, Arkansas.
4. Commercial construction is regulated by the City of Texarkana, Arkansas.
5. The plans, specifications, and construction of the building at issue in this case
were 	specifically 	approved 	via 	permits 	issued 	by 	the 	City 	of 	Texarkana,
Arkansas…
6. The City of Texarkana, Arkansas provided a plumbing permit dated June 4,
2019…
7. The City of Texarkana, Arkansas provided an electrical and mechanical permit
dated May 31, 2019…
8. The City of Texarkana, Arkansas provided a building permit dated May 6, 2019...
9. The City of Texarkana, Arkansas provided Water and Sever [sic] Availability
from Texarkana Water Utilities Division dated May 2, 2019…
10. The City of Texarkana, Arkansas provided a Temporary Utility Agreement
dated May 2, 2019…
11. The City of Texarkana, Arkansas provided periodic building inspections during
construction dated June 4, 2019 – April 27, 2020…
12. The ongoing inspections by the City of Texarkana, Arkansas indicated that
Defendant was in accordance with required codes and ordinances…
Case 4:22-cv-04110-SOH Document 119 Filed 12/06/24 Page 2 of 9 PageID #:
<pageID>

3
13. No violations were cited by the City of Texarkana, Arkansas at any point during
or after the completed construction…
ECF No. 56. 2
Adams filed his Response on July 2, 2024, stating TDC’s motion must be denied because:
1) he has adequately pled a claim for violation of the ADTPA; 2) TDC’s assertion that the safe
harbor provision of the ADTPA bars his claim is without merit; and 3) there is a causal connection
between TDC’s violation of the ADTPA and the damages he sustained. ECF No. 65. Adams
attached the following exhibits to his Response: Duncan Affidavit ECF No. 65-1, Vaughn
Affidavit ECF No. 65-2, Powell Affidavit ECF No. 65-3, Plaintiff’s Expert Report ECF No. 65-4,
Supplement Plaintiff Response Defendant’s Annex ECF No. 65-5, and Sealy Deposition ECF No.
65-6.
Adams’ response to TDC’s statement of undisputed facts is found in ECF No. 65-5 and
states:
1. 	Defendant’s assertion that “the City of Texarkana, Arkansas is the regulatory
body empowered to promulgate rules and regulations governing application,
approval, and construction of commercial buildings in Texarkana, Arkansas” is
not material because, according to the City, residential, not commercial,
construction is at issue…
2. 	Defendant’s assertion regarding plans submitted to the City … should read as
follows: The floor and foundation plans, elevation drawing and construction of
the building at issue in this case were specifically approved via permits issued
by the City of Texarkana, Arkansas…
3. 	Undisputable is the material fact that Defendant failed to obtain and employ
engineer approved plans providing specifications for building plumbing,
electrical, framing, HVAC, retaining wall and drainage…
4. 	Undisputable is the material fact that the plumbing permit, electrical permit,
and building permit issued by the City of Texarkana were not based on
engineered approved plans/blue prints for plumbing, electrical or building…
5. 	Notwithstanding 	Defendant’s 	assertion 	to 	the 	contrary…the 	City 	of
Texarkana’s April 21, 2020 inspection of the heating and ventilation component
of the building construction found a violation of applicable code.
2 The Court notes a review of TDC’s inspection exhibits reveals on April 21, 2020, the City of Texarkana, Arkansas
rejected the heat and air systems stating in “Apt A, B, C, D, F Need a dry switch or secondary condensate drain for
each unit”. ECF No 54-2.
Case 4:22-cv-04110-SOH Document 119 Filed 12/06/24 Page 3 of 9 PageID #:
<pageID>

4
6. 	Plaintiff challenges any and all of Defendant’s assertion of undisputed material
fact that conflicts with Plaintiff’s undisputed material fact identified in
Plaintiff’s summary judgment annex (Doc. # 48-2) attached hereto and
incorporated herein by this reference.
ECF No. 65-5.
TDC filed a Reply to TDC’s Response on July 9, 2024. ECF No. 68. TDC states:
Plaintiff’s pleading is insufficient under applicable pleading standards…Nowhere,
in Plaintiff’s 9-page Complaint, does the Plaintiff set forth a specific advertisement,
misrepresentation, deceptive statement, or misleading advertisement. Rather, the
closest the Complaint comes to setting forth a specific misrepresentation is that the
Defendant “Contractor’s deceptive, immoral, unscrupulous, and unethical conduct
manifesting as refusal to provide promised workman like general contractor
services damaged Plaintiff”.
ECF No. 68, pp. 2-3.
In addition, TDC argues it is protected by the safe harbor provision of the ADTPA and
therefore precludes any claim because:
The 	various 	building 	permits 	demonstrate 	that 	numerous 	inspections 	were
performed during construction of the townhouses and indicated that the City of
Texarkana considered the plans sufficient to obtain the permits and construct the
property 	at 	differing 	stage 	through 	completion. 	Furthermore, 	the 	ongoing
inspection by the City indicated that TDC included the City during construction
ensure the construction was in accordance with required codes ordinances…the
transaction at issue – the construction of the townhouses – is protected against any
claim by Plaintiff under the safe-harbor provision. At this stage in the litigation,
Plaintiff may not merely state that Defendant misrepresented his competence as a
contractor. Defendant has shown that the complex at issue was constructed in
accordance with all applicable laws, statutes and codes and that the City of
Texarkana heavily regulated its construction.
ECF No. 68, p. 4
2. 	Applicable Law
Federal courts sitting in diversity generally apply the substantive law of the forum state.
See Holbein v. TAW Enterprises, Inc., 983 F.3d 1049, 1061 (8th Cir. 2020) (citation omitted).
Arkansas substantive law applies here because Arkansas is the forum state, Plaintiff’s claims are
pursuant to Arkansas law, and the parties’ arguments presume the application of Arkansas law.
Case 4:22-cv-04110-SOH Document 119 Filed 12/06/24 Page 4 of 9 PageID #:
<pageID>

5
However, federal procedural law governs the procedural standards for diversity cases. Smith v.
Toyota Motor Corporation, 964 F.3d 725, 728 (8th Cir. 2020).
The standard for summary judgment is well established. A party may seek summary
judgment on a claim, a defense, or “part of [a] claim or defense.” Fed R. Civ. P 56(a). When a
party moves for summary judgment, “[t]he court shall grant summary judgment if the movant
shows there is no genuine dispute as to any material fact, and the movant is entitled to judgment
as a matter of law.” Fed. R. Civ. P. 56(a); Krenik v. County. of Le Sueur, 47 F.3d 953, 957 (8th Cir.
1995). This is a “threshold inquiry of … whether there is a need for trial – whether, in other words,
there are genuine factual issues that properly can be resolved only by a finder of fact because they
reasonably may be resolved in favor of either party.” Anderson v. Liberty Lobby, Inc., 477 U.S.
242 (1986). A fact is material only when its resolution affects the outcome of the case. Id. at p.
248. A dispute is genuine if the evidence is such that it could cause a reasonable jury to return a
verdict for either party. Id. at p. 252.
In deciding a motion for summary judgment, the Court must consider all the evidence and
all reasonable inferences that arise from the evidence in a light most favorable to the nonmoving
party. 	Nitsche v. CEO of Osage Valley Elec. Co-op, 446 F.3d 841, 845 (8th Cir. 2006). The moving
party bears the burden of showing that there is no genuine issue of material fact and that it is
entitled to judgment as a matter of law. See Enterprise Bank v. Magna Bank of Missouri, 92 F.3d
743, 747 (8th Cir. 1996). The nonmoving party “may not rest upon mere allegations or denials …
but must set forth specific facts showing that there is a genuine issue for trial.” Anderson, 477 U.S.
at 256.
The ADTPA makes it unlawful to, among other things, “[k]nowingly make a false
representation as to the characteristics, ingredients, uses, benefits, alterations, source, sponsorship,
approval, or certification of goods or services.” Ark. Code Ann. § 4-88-107(a)(1). The ADTPA
Case 4:22-cv-04110-SOH Document 119 Filed 12/06/24 Page 5 of 9 PageID #:
<pageID>

6
also makes it unlawful to “[e]ngage in any other unconscionable, false, or deceptive act or practice
in business, commerce or trade.” Id. § 4-88-107(a)(10). Moreover, the ADTPA provides that, in
connection with the sale or advertisement of any goods, services, or charitable solicitation, it is
unlawful to: (1) act, use, or employ any deception, fraud, or false pretense; or (2) to conceal,
suppress, or omit any material fact with the intent that others rely on the concealment, suppression,
or omission. Ark. Code Ann. § 4-88-108.
However, the ADTPA’s safe-harbor provision precludes its application to:
Actions or transactions specifically permitted under laws administered by the
Insurance 	Commissioner, 	the 	Securities 	Commissioner, 	the 	State 	Highway
Commission, the Bank Commissioner, or other regulatory body or officer acting
under statutory authority of this state or the United States, unless a director of these
divisions specifically requests the Attorney General to implement the powers of
this chapter.
Ark. Code Ann § 4-88-101(3). The Arkansas Supreme Court unequivocally held in Air Evac EMS,
Inc. that ADTPA’s safe-harbor provision must be interpreted under the specific-conduct rule. Air
Evac EMS, Inc. v. USAble Mutual Insurance Company, 2017 Ark. 368 (2017). The “specific-
conduct” rule looks to whether state law permits or prohibits the conduct at issue and only exempts
expressly permitted conduct from ADTPA claims. Gabriele v. ConAgra Foods, Inc., No. 5:14-cv-
5183-TLB, 2015 WL 3904386, at *6 (W.D. Ark. June 25, 2015).
3. 	Discussion
The gist of Adams’ argument to support his claim under the ADTPA is that TDC
misrepresented it general contractor competence. Adams states after the City of Texarkana,
Arkansas would not issue a building permit to Adams’ first choice of a contractor:
…Plaintiff was then introduced to TDC. After consultation with TDC, reasonably
relying on TDC’s representation that it possessed the requisite general contractor
skill, Plaintiff engaged TDC as the general contractor for the Project. This reliance
proved to be a mistake to Plaintiff’s detriment…
A competent general contractor would provide workmanlike construction service.
Defendant is not competent and deceived Plaintiff with the misrepresentation that
Case 4:22-cv-04110-SOH Document 119 Filed 12/06/24 Page 6 of 9 PageID #:
<pageID>

7
it was so…This lack of competence resulted in unworkmanlike general contractor
constructions service…This establishes the requisite link between Defendant’s
incompetence, 	deceptively 	hidden 	from 	Plaintiff, 	and 	the 	unworkmanlike
performance that damaged Plaintiff.
ECF No. 65, pp. 2, 4. The issue at the core of the litigation – whether TDC performed in a workman
like manner, is certainly a factual issue which should be determined by the fact finder. However,
whether Adams has stated a claim under the ADTPA is a legal question which must be determined
as a matter of law.
TDC first argues Adams does not plead his ADTPA claim with particularity as required by
Fed. R. Civ. P. 9 (b). Rule 9(b) requires any plaintiff claiming fraud to plead with particularity the
circumstances constituting fraud. Jarrett v. Panasonic Corp. of North America, 8 F.Supp.3d 1074
(2013) citing Perez, 2013 WL 1661434, *8. Rule 9(b)’s pleading standard applies with equal force
to state consumer fraud statutes as to common law fraud claims. Id. (cittions omitted). “This
pleading standard ‘demands a higher degree of notice than that required for other claims. The claim
must identify who, what, where, when, and how.’” Id. (quoting United States ex rel. Costner v.
United States, 317 F.3d 883, 888 (8th Cir. 2003)). “The pleading must discuss ‘the time, place[,]
and contents of false representations, as well as the identity of the person making the
misrepresentation and what was obtained or given up thereby.’” McNeil v. Metropolitan Nat. Bank,
No. 4:13cv00076, 2013 WL 2099815, *2 (E.D. Ark. May 14, 2013) (quoting Schaller Tel. Co. v.
Golden Sky Sys.Inc., 298 F.3d 736, 746 (8th Cir. 2002)). “Conclusory allegations of fraud and
deception are insufficient.” Id.
In his Complaint, Adams describes his claim against TDC under the ADTPA as follows:
VIOLATION OF ARKANSAS UNFAIR PRACTICES ACT
40. 	…Contractor’s 	refusal 	to 	comply 	with 	its 	workman 	like 	performance
commitment 	immorally, 	unethically, 	unscrupulously 	denies 	Plaintiff 	his
expectation for a workman like performance. Further this refusal economically
damaged Plaintiff in the amount of the cost of curing Contractor’s performance
deficiencies.
Case 4:22-cv-04110-SOH Document 119 Filed 12/06/24 Page 7 of 9 PageID #:
<pageID>

8
41. Contractor’s refusal to comply with its workman like performance commitment
deceived Plaintiff with respect to Contractor’s claim of general contractor status,
skill, and ability on the basis of which Plaintiff engaged Contractor and paid
Contractor for a general contractor performance Plaintiff never received.
42. 	Contractor’s 	deceptive, 	immoral, 	unscrupulous, 	and 	unethical 	conduct
manifesting as refusal to provide promised workman like general contractor
services damaged Plaintiff.
43. Consequently, Plaintiff respectfully requests and award of three times his
damages which are expected to exceed Seventy-Five Thousand Dollars ($75,000).
ECF No. 2, pp. 7-8. Adams does not specifically identify which provision of the ADTPA he
believes applies to his claim. Instead, he uses nonspecific phrases such as “deceptive, immoral,
unscrupulous, and unethical” to describe TDC’s alleged failure to provide workmanlike services.
There is no summary judgment evidence to support that TDC knowingly or intentionally
misrepresented its ability to provide workmanlike services. The record reflects TDC did not seek
out Adams to use it as a general contractor. Instead, Adams’ bank which financed the construction
of the Apartment Complex referred Adams to TDC. When the parties initially met to discuss
possible construction, it was Adams who provided the plans for the construction of the Apartment
Complex. Adams’ only allegation to support his claim under the ADPPA is that TDC must have
misrepresented his ability to perform in a workmanlike manner because, according to Adams, TDC
breached its promise to do so.
Moreover, although the affidavits submitted by Mr. Vaughn and Mr. Powell in support of
Adams’ Response conclude that TDC did not provide services in a workmanlike manner, neither
of 	these 	individuals 	speak 	to 	TDC’s 	knowledge 	or 	intent 	with 	respect 	to 	any 	alleged
misrepresentation concerning their ability to provide general contractor services. ECF Nos. 64-2,
64-3. 3 In this case, nothing in the record shows any conduct on the part of TDC meeting or
3 By considering these affidavits in the context of the instant motion for summary judgment the Court makes no
determination as to whether these witnesses will be allowed to testify at any future proceeding, including a trial in this
matter. Currently pending before United District Judge Susan O. Hickey are three motions in limine to exclude the
testimony of Powell, Vaughn, and Duncan. ECF Nos. 86, 88, 90. Because, the Court is concerned that Mr. Duncan
was never properly disclosed as a witness, the Court will not consider his affidavit in making a recommendation on
Case 4:22-cv-04110-SOH Document 119 Filed 12/06/24 Page 8 of 9 PageID #:
<pageID>

9
suggesting it entered a contract with Adams to construct the Apartment Complex in a workmanlike
manner “knowing” it would not or could not perform. It is undisputed TDC has been working in
the construction business for many years in the Texarkana, Arkansas area. It defies logic, and there
is no summary judgment evidence to suggest, that TDC’s representation that it could complete the
construction of the Apartment Complex in a workmanlike manner (even if they breached the
contract to do so) could be construed as a misrepresentation which would rise to a level of conduct
intended to be prohibited by the ADTPA. 4
Accordingly, the Court finds Adams has failed to state a claim under the ADTPA and
therefore, TDC is entitled to summary judgment on that claim.
4. 	Conclusion and Recommendation
Based upon the foregoing, the Court recommends TDC’s Motion for Summary Judgment
(ECF No. 54) be GRANTED and Plaintiff’s claim based on a violation of the ADTPA be
DISMISSED WITH PREJUDICE.
The Parties have fourteen (14) days from receipt of this Report and Recommendation
in which to file written objections pursuant to 28 U.S.C. § 636(b)(1). The failure to file timely
objections may result in waiver of the right to appeal questions of fact. 	The Parties are
reminded that objections must be both timely and specific to trigger de novo review by the
district court. See Thompson v. Nix, 897 F.2d 356, 357 (8th Cir. 1990).
DATED this 6 th day of December 2024.
/s/ 	Barry A. Bryant
HON. BARRY A. BRYANT
U.S. MAGISTRATE JUDGE
the instant motion . Again, the undersigned makes no determination as to whether Mr. Duncan will be allowed to
testify at any future proceeding, including a trial in this matter.
4 Because the Court finds Plaintiff has failed to state a claim under the ADTPA, it is not necessary to address whether
the safe harbor provision bars Adams’ claim.
Case 4:22-cv-04110-SOH Document 119 Filed 12/06/24 Page 9 of 9 PageID #:
<pageID>