Full Opinion (html_with_citations)

                                  Cite as
2022 Ark. 218
               SUPREME COURT OF ARKANSAS
                                     No.   CV-22-138

                                               Opinion Delivered   December 8, 2022

 RICKY HENDRIX, INDIVIDUALLY
 AND ON BEHALF OF ALL
 ARKANSANS SIMILARLY SITUATED                  APPEAL FROM THE POPE
                   APPELLANTS                  COUNTY CIRCUIT COURT
                                               [NO. 58CV-17-499]
 V.
                                               HONORABLE KEN D. COKER, JR.,
 MUNICIPAL HEALTH BENEFIT                      JUDGE
 FUND
                     APPELLEE
                                               AFFIRMED.


                          KAREN R. BAKER, Associate Justice

      Appellant Ricky Hendrix, individually and on behalf of all Arkansans similarly

situated, appeals the Pope County Circuit Court’s order granting summary judgment in

favor of appellee Municipal Health Benefit Fund (the “Fund”). Pursuant to Rule 1-2(a)(7)

of the Arkansas Supreme Court Rules, we have jurisdiction over the present appeal because

it is a subsequent appeal following an appeal previously decided by this court. See Mun.

Health Benefit Fund v. Hendrix,
2020 Ark. 235
,
602 S.W.3d 101
 (Hendrix I). Hendrix

presents two arguments on appeal: (1) summary judgment in favor of the Fund was error

and should be reversed; and (2) summary judgment in favor of Hendrix should have been

granted and the case should be remanded for a damages determination. We affirm.

      As set forth in Hendrix I, the Fund is a trust created by the Arkansas Municipal League

under authority of the Interlocal Cooperation Act, Arkansas Code Annotated sections 25-
20-101 through -108 (Repl. 2014 & Supp. 2021). The Fund provides benefits to employees

of its municipal members. The Fund’s Policy Booklet 1 sets forth the benefits available and

the Fund’s rights and obligations with respect to payment of those benefits. Through

Hendrix’s employment with the Russellville Police Department, he obtained Fund health-

benefits coverage. In May 2016, Hendrix’s daughter was injured in a car accident, which

required treatment from various medical providers. The Fund denied payment for portions

of Hendrix’s daughter’s medical bills based on its interpretation of the uniform, customary,

and reasonable charges (UCR) exclusion in the Policy Booklet. Hendrix filed a class-action

complaint against the Fund challenging the enforcement of the UCR term due to the Policy

Booklet’s subjective and ambiguous standards for determining the UCR rate. Hendrix

alleged that the Policy Booklet was a contract between the Fund and the class members and

that the UCR term’s ambiguity rendered it unenforceable. On June 26, 2019, the circuit

court granted Hendrix’s motion for certification of the following UCR class:

       All individuals and/or entities located and/or domiciled within the State of Arkansas
       who filed one or more claims with the Arkansas Municipal Health Benefit Fund on
       or between September 12, 2012 through the date of entry of this Class Certification
       Order and who had their claim(s) denied or reduced by the MHBF, in whole or in
       part, on the stated basis that the charges claimed exceed those that are “reasonable
       and customary.”

       In Hendrix I, the Fund appealed the circuit court’s grant of class certification. We

affirmed.2



       1
        The Booklet is at times referred to in the record as the Fund Booklet; for clarity, it
will be referred to as the Policy Booklet.
       2
        In Hendrix I, we affirmed the certification of a second class based on a separate
exclusionary term regarding automobile insurance coverage. However, after Hendrix I, this

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       On April 14, 2021, Hendrix filed a motion for summary judgment. Hendrix asserted

the two remaining questions are as follows: (1) Is the UCR exclusion drafted and employed

by the Fund subject to ambiguity or more than one reasonable interpretation, and thus

subject to be construed, strictly or otherwise, in favor of the class as unenforceable under

Arkansas law? And (2) If yes, what are the amount of damages owed by the Fund to the

UCR class for common law breach of its health coverage contract with the UCR class?3

Hendrix argued that the UCR provisions contained in the Policy Booklet are contradictory

because they are based on different standards. The first provision states,

       Usual, Customary and Reasonable Charges (UCR) To determine UCR
       charges billed by a medical provider for services and supplies, the Fund reserves the
       right to use national tables (including, but not limited to, RBRVS, ADP and MDR,
       Medispan, First Databank) and methods in accordance with health care industry
       standards.

The next sentence reads,

       The Fund may set limits on a provider’s charges and fees at its discretion without
       giving notice to the provider.

       Hendrix took issue with these provisions because the first purported to tether

application of the UCR exclusion to some unspecified “national table(s), method(s), or

standards(s)”; and in the second provision, the Fund grants itself unfettered freedom to

unilaterally exclude any provider charges, without notice, at any time. Hendrix pointed out




claim was dismissed pursuant to the circuit court’s approval of a settlement between the
Fund and the class. Therefore, the remaining class is the UCR class.
       3
        In his motion, Hendrix asserted that the health benefits sold to the UCR class were
insurance. However, as will be addressed below, the circuit court specifically rejected this
argument. Hendrix does not challenge this finding on appeal.

                                              3
that the Policy Booklet then set forth a third standard that is equally subjective and

ambiguous:

       Covered Medical Charges include only the charges and fees described below
       that . . . (d) do not exceed the usual, customary and reasonable charges as determined
       by the Fund in accordance with health care industry standards for the area in which
       the services and supplies are furnished[.]

Hendrix argued that with this final clause, the Policy Booklet purports to limit the Fund’s

obligation to pay for otherwise covered medical charges to the extent that the Fund

“determines” that they are not UCR utilizing the health care industry standards “of the

area” where the care is provided. Hendrix argued that the class was entitled to summary

judgment on its claims because the UCR exclusion is both internally contradictory and

ambiguous and thus not enforceable under Arkansas contract law. Hendrix also argued that

the UCR exclusion violated the contractual requirement of mutuality. He asserted that the

lack of mutuality provided an independent basis for requiring entry of summary judgment

in his favor.

       On May 24, 2021, the Fund responded to Hendrix’s motion for summary judgment

and also moved for summary judgment. In support of its motion for summary judgment,

the Fund argued that it is indisputable that the Fund is a trust and that there is no cause of

action in Hendrix’s complaint that seeks to confront the Fund as a trust. Specifically, the

Fund argues that Hendrix has made no breach-of-fiduciary-duty claim, no allegation that

the Fund wrongfully calculated a claim, failed to pay the UCR amount for any out-of-

network claim or engaged in any wrongful or bad faith conduct in the coordination of

benefits.




                                              4
          To support its position, the Fund relied on the affidavit and exhibits attached thereto

of Mark Hayes, executive director of the Arkansas Municipal League. The Fund asserted

that the following material facts support its position: The Fund was established through the

execution of a declaration of trust on November 16, 1981 (the “Trust”) by member

municipalities in order to provide, among other services, “health and dental benefits

coverage for the benefit of member municipalities and their employees and officials.”

          The Fund also relied on the affidavit and exhibits attached of Katie Bodenhamer,

general manager and benefits counsel for the Fund. Bodenhamer stated that the Trust for

the Fund authorizes the trustees to promulgate rules and regulations for the operation of the

Fund. She explained that the rules and regulations promulgated by the trustees are set forth

in the Policy Booklet. Bodenhamer stated that the Fund has a fiduciary obligation to the

member municipalities and former and current employees and elected officials who

participate in the Fund. Part of this fiduciary obligation is to manage the Fund assets,

including the payment of claims, in order to keep premiums paid by municipalities low and

to allow the Fund to provide the best benefits possible to the beneficiaries. Bodenhamer

observed that billed charges received by the Fund for out-of-network claims vary widely

for the same claim by provider and are far from bearing any relation to actual market prices

for the claim. The UCR provision is a standard industry provision in health-benefits funds

and insurance policies that explains the limit of the benefit provided for out-of-network

claims.

          On June 28, 2021, Hendrix filed his consolidated reply in support of his motion for

summary judgment and response in opposition of the Fund’s countermotion for summary


                                                 5
judgment.    Hendrix argued that the Fund raised straw-man arguments involving the

interpretation of internal trust documents, how other insurers define UCR terms, and rising

trends in billed charge rates across the country. Hendrix argued that none of these arguments

bear on whether the UCR term at issue in this case is objectively ascertainable or ambiguous

and thus enforceable or unenforceable on the face of this Policy Booklet. Hendrix again

asserted that the Policy Booklet is a contract between the Fund and the class. Additionally,

Hendrix argued that the Fund’s status as a trust is irrelevant to whether the Booklet is a

contract.

       On November 10, 2021, the circuit court issued a letter order granting the Fund’s

motion for summary judgment, denying Hendrix’s motion for summary judgment, and

dismissing Hendrix’s complaint. The circuit court found that there were no genuine issues

of material fact and that the health benefits offered by the Fund and purchased by Hendrix

are not an insurance policy. The circuit court found that while it is uncontroverted that the

Fund is a trust, the existence of the trust relationship did not preclude the Fund and Hendrix

from entering into contracts with one another. The circuit court then found that the Policy

Booklet at issue is a contract between the UCR class members and the Fund. Further, the

circuit court rejected Hendrix’s claim that the terms of the Policy Booklet contract are

ambiguous and contradictory regarding the definition of the UCR term. The circuit court

found that it is permissible for a contract term to leave a decision to the discretion of one

party, and when that occurs, that decision is virtually unreviewable unless the decision is

made in bad faith. The circuit court found that there were no allegations of bad faith in this




                                              6
case. The circuit court granted the Fund’s motion for summary judgment and denied

Hendrix’s motion for summary judgment.

       On November 30, 2021, the circuit court entered its final order. The order came

to the same conclusions as the letter order but also concluded that there is sufficient

consideration from the Fund in the contract between the parties. Therefore, Hendrix

received valid consideration from the Fund such that mutuality of obligation was not

essential. Hendrix appealed.

                                     Standard of Review

       Summary judgment is appropriate when the pleadings, depositions, answers to

interrogatories and admissions on file, together with any affidavits, show that there is no

genuine issue as to any material fact and that the moving party is entitled to judgment as a

matter of law. Ark. R. Civ. P. 56(c). Ordinarily, on appeal from a summary-judgment

disposition, the evidence is viewed in the light most favorable to the party resisting the

motion, and any doubts and inferences are resolved against the moving party. Abraham v.

Beck,
2015 Ark. 80
,
456 S.W.3d 744
. However, when the parties agree on the facts, we

simply determine whether the appellee was entitled to judgment as a matter of law.
Id.

When parties file cross-motions for summary judgment, as was done in this case on this

point, they essentially agree that there are no material facts remaining, and summary

judgment is an appropriate means of resolving the case.
Id.
 As to issues of law presented, our

review is de novo.
Id.




                                              7
                                      Law and Analysis

       On appeal, Hendrix argues that the circuit court erred in granting summary judgment

in favor of the Fund. The crux of Hendrix’s claim is that while the Fund is a trust, it may

enter into contracts, such as the Policy Booklet at issue. The Fund responds that while the

circuit court correctly granted summary judgment in its favor, the circuit court did so for

the wrong reasons. The Fund takes issue with the circuit court’s finding that “the existence

of the trust relationship does not in any way preclude the [Fund] and the Class Members

from entering into contracts with one-another.” The Fund claims that such a dismissal of

a trust relationship has no support in the law, and that relationship must be recognized and

given effect. Hendrix counters that the Fund is prohibited from making this argument

because it did not file a cross-appeal on this issue. We disagree. We have said as follows:

               Our case law is well settled that when an appellee seeks something more than
       he or she received in the lower court, a notice of cross appeal is necessary to give us
       jurisdiction of the cross appeal. Ark. R. App. P.-Civ. 3(d) (2004); Boothe v. Boothe,
341 Ark. 381
,
17 S.W.3d 464
 (2000); Brown v. Minor,
305 Ark. 556
,
810 S.W.2d 334
 (1991). In other words, a notice of cross appeal is required when the appellee
       seeks affirmative relief that was not obtained in the lower court. See City of Marion v.
       Baioni,
312 Ark. 423
,
850 S.W.2d 1
 (1993); Edwards v. Neuse,
312 Ark. 302
,
849 S.W.2d 479
 (1993); Pledger v. Illinois Tool Works, Inc.,
306 Ark. 134
,
812 S.W.2d 101
       (1991); Egg City of Arkansas, Inc. v. Rushing,
304 Ark. 562
,
803 S.W.2d 920
 (1991);
       Elcare, Inc. v. Gocio,
267 Ark. 605
,
593 S.W.2d 159
 (1980); Moose v. Gregory,
267 Ark. 86
,
590 S.W.2d 662
 (1979).

              In contrast, a notice of cross appeal is not necessary when the appellee is not
       seeking affirmative relief on appeal. Hasha v. City of Fayetteville,
311 Ark. 460
,
845 S.W.2d 500
 (1993). For example, despite the absence of a notice of cross appeal, we
       will address the appellee’s additional points on appeal that explain why the lower
       court erred in its reasoning but reached the right result. Independence Federal Savings
       & Loan Ass’n v. Davis,
278 Ark. 387
,
646 S.W.2d 336
 (1983) (supplemental opinion
       denying rehearing).




                                              8
Hoffman v. Gregory,
361 Ark. 73
, 80–81,
204 S.W.3d 541, 547
 (2005), overruled on other

grounds by Poff v. Peedin,
2010 Ark. 136
,
366 S.W.3d 347
.4

       Having determined that the Fund may make this argument on appeal, we now turn

to the specific arguments on appeal. Hendrix admits that the Fund is a trust, but he alleged

a breach-of-contract claim based on his position that the Policy Booklet is a separate contract

into which the parties entered. Hendrix notes that the Policy Booklet refers to itself as a

contract. In contrast, the Fund’s position is that Hendrix failed to challenge the trust or any

duty under the trust and that the dismissal of his claims must therefore be affirmed because

of the uncontroverted existence of the trust relationship. Further, the Fund contends that

Hendrix offered no evidence that would allow a fiduciary relationship to transform into a

contractual relationship. We agree with the Fund, and while the circuit court correctly



       4
         Hendrix acknowledges the long line of cases stating that a cross-appeal is not
necessary when the appellee is not seeking affirmative relief on appeal. However, Hendrix
argues that we did just the opposite in Reed v. Arvis Harper Bail Bonds, Inc.,
2010 Ark. 338
,
368 S.W.3d 69
. We find Reed distinguishable. In Reed, the Arkansas Professional Bail Bond
Licensing Board suspended Arvis Harper’s license. Arvis Harper filed a complaint for
judicial review in the circuit court. Although the circuit court found that the Board’s
findings were consistent with its rules and regulations, were not based on unlawful
procedure, and were supported by substantial evidence, the circuit court reversed the
decision of the Board finding that the statute establishing the Board violated the separation-
of-powers doctrine. On appeal, we explained that Arvis Harper’s constitutional challenge
was not appropriately brought by a direct action. It was presented as an argument in an
appeal to a decision by the Board, which is governed by the Administrative Procedure Act.
We noted that Arvis Harper challenged the Board’s decision on other grounds that the
circuit court did not find––such as unlawful procedure, violation of substantive due process,
violation of equal protection, and lack of substantial evidence. We declined to address these
arguments due to Arvis Harper’s failure to file a cross-appeal, explaining that Arvis Harper
was seeking affirmative relief that was not granted in the circuit court. Further, because
Reed involved the unique procedural posture of an appeal of an agency decision, we do not
find it applicable to the present case. Instead, we apply the principle set forth in the cases
above, and despite the absence of a cross-appeal, we will address the Fund’s trust argument.

                                              9
granted summary judgment in favor of the Fund, we hold that it did so for the wrong

reasons.

        Under the Declaration of Trust, Hendrix is clearly a beneficiary of the Trust as the

Trust was created for the purpose of providing health-benefits coverage to member

employees. While Hendrix attempts to bring a breach-of-contract claim based on the Policy

Booklet, a close review of the Declaration of Trust and Policy Booklet leads us to conclude

that Hendrix’s claim is a challenge to the actions of the trustees.

        To support its position, the Fund relies on Restatement (Second) of Trusts, which

we have followed when reviewing trust cases in Arkansas. Wisener v. Burns,
345 Ark. 84, 89
,
44 S.W.3d 289, 292
 (2001) (citing McPherson v. McPherson,
258 Ark. 257
,
523 S.W.2d 623
 (1975)). The Restatement provides:

        b. Breach of contract. A trustee who fails to perform his duties as trustee is not liable
        to the beneficiary for breach of contract in the common-law actions of special
        assumpsit or covenant or in a similar action at law in States in which the common-
        law forms of action have been abolished. The creation of a trust is conceived of as a
        conveyance of the beneficial interest in the trust property rather than as a contract.
        Moreover, questions of the administration of trusts have always been regarded as of
        a kind which can adequately be dealt with in a suit in equity rather than in an action
        at law, where questions of fact would be determined by a jury and not by the court.
        The mere fact that there may happen to be a promise in words by the trustee to
        perform the trust does not give the common-law courts concurrent jurisdiction over
        the administration of the trust.

Restatement (Second) of Trusts § 197 (1959). The Restatement goes on to state that “[t]he

trustee by accepting the trust and agreeing to perform his duties as trustee does not make a

contract to perform the trust enforceable in an action at law. The trustee may by contract

undertake other duties than those which he undertakes as trustee, and if he does so he will be liable in

an action at law for failure to perform such duties.” (Emphasis added.)


                                                  10
       The Fund also relies on American Jurisprudence, Second Edition discussing the

distinction between trusts and contracts as follows:

               Trusts are distinguishable from contracts in that the parties to a contract may
       decide to exchange promises, but a trust does not rest on an exchange of promises
       and instead merely requires a trustor to transfer a beneficial interest in property to a
       trustee who, under the trust instrument, relevant statutes, and common law, holds
       that interest for the beneficiary. The undertaking between the settlor and trustee is
       not properly characterized as contractual and does not stem from the premise of
       mutual assent to an exchange of promises. Although the trustee’s duties may derive
       from the trust instrument, they initially stem from the special nature of the relation
       between trustee and beneficiary, and thus, the trustee’s undertakings or promises in
       a trust instrument are normally not contractual. A trust is also distinguishable from a
       contract in that a trust is a fiduciary relationship with respect to property. The relation
       ordinarily created by a contract is that of promisor and promisee, obligor and obligee,
       or debtor and creditor; in most contracts of hire, a special confidence is reposed in
       each other by the parties, but more than that is required to establish a fiduciary
       relation. An essential aspect of a trust is that the putative trustee has received property
       under conditions that impose a fiduciary duty to the grantor or a third person; a mere
       contractual obligation, including a contractual promise to convey property, does not
       create a trust. One of the major distinctions between a trust and contract is that in a
       trust, there is always a divided ownership of property, the trustee having usually a
       legal title and the beneficiary an equitable one, whereas in contract, this element of
       division of property interest is entirely lacking.

76 Am. Jur. 2d Trusts § 12 (2019).

       As set forth above, a trustee’s duties to the beneficiaries are normally not contractual.

However, as explained in the Restatement, a trustee can contractually undertake duties

other than those which he undertakes as trustee, and if he does so, he will be liable in an

action at law for failure to perform such duties. That is not the case here. Pursuant to

Bodenhamer’s affidavit and the Declaration of Trust, the trustees are expressly permitted to

promulgate rules and regulations as may be proper or necessary for the sound and efficient

administration of the Trust. As Bodenhamer stated, the rules and regulations promulgated

by the trustees are set forth in the Policy Booklet. Here, the Declaration of Trust expressly


                                               11
permitted the trustees to promulgate the rules and regulations set forth in the Policy Booklet;

thus, they did not undertake other duties as contemplated by the Restatement. Stated

differently, the trustees’ duties are to provide health-benefits coverage, and these duties are

governed by rules and regulations contained in the Policy Booklet.             Therefore, the

trustee/beneficiary relationship remained intact and did not transform into a contractual

relationship. In fact, because the trustees were expressly permitted to adopt the rules and

regulations contained in the Policy Booklet, the Policy Booklet is not a separate contract

but a mere extension of the Trust.

       Because Hendrix claimed breach of contract rather than breach of trust or breach of

fiduciary duty against the trustees, we hold that he failed to state a proper claim. We have

said that if a circuit court’s grant of summary judgment was not in error, we can affirm the

judgment as reaching the right result for the wrong reason. Middleton v. Lockhart,
355 Ark. 434
,
139 S.W.3d 500
 (2003). Therefore, we hold that while it did so for the wrong reasons,

the circuit court correctly granted summary judgment in favor of the Fund. Having found

that the circuit court properly granted summary judgment in favor of the Fund, we need

not address Hendrix’s second argument on appeal.

       Affirmed.

       Streett Law Firm, P.A., by: James A. Streett; and Brian G. Brooks, Attorney at Law, PLLC,

by: Brian G. Brooks, for appellant.

       Harrington, Miller, Kieklak, Eichmann & Brown, P.A., by: R. Justin Eichmann and Thomas N.

Kieklak; and Catlett Law Firm, PLLC, by: H. Bradley Walker, for appellee.




                                               12