Wynne-Ark., Inc., D/B/A Kelley's Restaurant v. Asphalt Producers, LLC; And Richard Baughn Construction, Inc.

Cite as 2025 Ark. App. 540
ARKANSAS COURT OF APPEALS
DIVISION IV
No. CV-24-145

WYNNE-ARK., INC., D/B/A KELLEY’S Opinion Delivered November 12, 2025
RESTAURANT
APPELLANT APPEAL FROM THE CROSS COUNTY
CIRCUIT COURT
[NO. 19CV-14-46]
V.

HONORABLE CHRISTOPHER W.
ASPHALT PRODUCERS, LLC; AND MORLEDGE, JUDGE
RICHARD BAUGHN
CONSTRUCTION, INC. REVERSED AND REMANDED
APPELLEES

BART F. VIRDEN, Judge

This appeal stems from the Cross County Circuit Court’s decision granting Richard

Baughn Construction’s (RBC’s) directed-verdict motion and dismissing with prejudice the

negligence claim and claim for damages filed by Wynne-Ark., Inc., d/b/a Kelley’s Restaurant

(Kelley’s). We reverse and remand.

I. Relevant Facts

In June 2014, Kelley’s filed a complaint in the circuit court seeking damages against

Asphalt Producers, LLC (API), and its subcontractor, RBC, related to an Arkansas Highway

Transportation Department (AHTD) construction project on Highway 1 and Highway 64.

In the complaint, Kelley’s alleged the restaurant suffered monetary damages arising from the

defendants’ negligent performance of the contract.
This is the third time some aspect of this case has been before this court. In 2017,

RBC moved to compel the disclosure of the confidential settlement agreement between API

and Kelley’s.1 The circuit court granted the motion, and Kelley’s appealed the decision. We

reversed and remanded the case to the circuit court. See Wynne-Ark., Inc. v. Richard Baughn

Constr., 2017 Ark. App. 685, 545 S.W.3d 771. On remand, following a hearing, the court

ordered disclosure of the confidential settlement agreement. Kelley’s appealed, and this court

reversed the circuit court’s decision. See Wynne-Ark., Inc. v. Richard Baughn Constr., 2020 Ark.

App. 140, 597 S.W.3d 114.

A trial was held on November 28, 2023. Kelley’s manager, Shannon Kelley, testified

first. He explained that Kelley’s was a buffet-style and a la carte restaurant serving breakfast,

lunch, and dinner. Through his testimony, the “Kelley’s Restaurant Summary Reports” from

September 2011 to December 2014, the period of construction, were introduced to

evidence.2 Shannon explained that the summary reports are a compilation of the “daily

workup sheets” that represent restaurant sales by number of meals sold. Shannon explained

that it was important to measure by plates sold because food costs fluctuated, and this

method accurately showed whether Kelley’s was gaining or losing business. From 2007 to

2010, prior to construction, 14,530 breakfast meals; 12,264 lunch meals; and 12,994 dinner

meals were purchased. Shannon testified that the 2011 summary report shows that the meal

1
API was dismissed from the lawsuit pursuant to the settlement.
2
The exact date the construction began is disputed by the parties. RBC asserts that
construction began in May 2012.

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count decreased by 1,040 for breakfast and increased 541 meals for lunch and 502 meals for

dinner. In 2012, the summary report showed a larger decrease. Breakfast sales fell by 2,811;

lunch by 18,879; and dinner by 16,839. In 2013, breakfast sales were down 3,954; lunch by

24,769; and dinner by 22,613. In 2014, breakfast sales decreased by 8,807 meals; lunch by

25,401; and dinner 17,816. Shannon testified that overall, from 2011 to 2014, revenue from

sales decreased by $886,905. A graph was introduced, which provided a visual reference for

the above testimony. Shannon recalled that in 2002, a tornado damaged the restaurant, and

Kelley’s closed for reconstruction; however, other than that, Kelley’s had never suffered an

interruption of business. Shannon explained that since he became the manager in 1988,

there had been an increase in sales nearly every year until highway construction began. He

testified that before construction, there may have been a small gain one year or maybe even

a little loss, but “we would always keep growing in sales.” Shannon stated that Kelley’s had

owned the restaurant building without debt, but after the highway-construction project

began, due to business loss, then owner Stan Kelley had to borrow $350,000 from the bank

to keep the restaurant going and offered the building as collateral, which Stan repaid.

Shannon described the conditions that led to the loss of business, explaining that prior to

construction, there were six entrances to the parking lot. When construction began, the

asphalt and concrete entrances were either shut down or moved and replaced with gravel

and dirt that became “mud holes” when it rained. He explained that the driveways leading

into the parking lot were torn up for three out of the four years of construction, and there

were cones and barrels blocking the entrances. He recalled that “we literally had one lady

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drag her bumper off of her car coming into the parking lot, getting stuck in the—in the dirt,

and I guess gravel, debris, whatever you want to call it—mud that was out there trying to turn

into these driveways as far as that goes.” Customers complained “constantly” about the

condition of the driveways. Shannon testified that “[a]nybody with a camper trailer or

gooseneck . . . could not access the parking lot without running into cones or barrels or

“tearing up a bunch of stuff.” The restaurant heavily relied on people stopping to eat as they

went to and from the nearby auction house and recreational areas, and without an accessible

driveway, those customers stopped coming to Kelley’s. Shannon testified that the traffic was

frequently severely backed up , which also hurt business. Shannon explained that about

once a week, he complained to the AHTD employees on the site and contended that there

were more complaints than the three that the AHTD’s record showed. Shannon testified

that RBC parked construction equipment in Kelley’s parking lot without permission, and

the construction project took much longer than the projected 170 days. Additionally, RBC

had permission to dump “good field dirt” containing only a small amount of construction

materials on the acreage behind the restaurant; however, RBC dumped a large amount of

busted concrete and rebar from the bridge reconstruction, which cost $10,000 to have

removed. In hauling these materials, RBC’s trucks damaged Kelley’s parking lot, causing

holes and other wear-and-tear damage. Shannon explained there was another way onto the

acreage that did not involve driving across the parking lot, but RBC cut across the parking

lot anyway. He testified that “virtually the whole west side of the parking lot” had to be

repaired or replaced for around $6,500 to $8,500.

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Richard Baughn, the co-owner of RBC, testified next. He stated that his contract with

the AHTD involved doing the excavation; dirt work; underground drainage; soil and cement

stabilization; “grubbing” of trees; removing and disposing of curb and gutter, concrete, and

approach slabs; and disposal of box culverts and headwalls. They also did a portion of the

maintenance of traffic, removing the bridge, and some concrete work. Baughn testified that

according to his contract, RBC had a duty to maintain access for all the businesses along the

construction route, and to fail to do that would constitute negligence. Baughn addressed the

driveway access to Kelley’s, explaining that closing off one access point to a business was not

negligent if there was more than one driveway. Baughn recalled meeting with the AHTD

regarding a change to a driveway that Shannon had requested, but he did not recall Shannon

ever complaining. He also denied that the traffic was as bad as Shannon had described.

Baughn testified that RBC had a “waste pit agreement” with Kelley’s that allowed RBC to

dump dirt and construction waste onto his property. Baughn explained that Shannon

wanted the materials dumped on the property and never asked RBC to stop.

Don Pagan, Kelley’s CPA, testified that he reviewed Kelley’s tax returns and monthly

statements for the construction period from 2011 through 2014. Pagan explained that in

2008, 2009, and 2010, Kelley’s served 152,000, 152,000 and 149,000 meals, respectively. By

2013, Kelley’s sales had declined 33 percent to 98,000 meals. Pagan testified that from

September 2011 to May 2014, Kelley’s lost $680,666 in revenue, with a gross-profit loss of

$380,000. Pagan explained that because the restaurant business involves other expenses like

building repairs and equipment repairs, utilities, and insurance, the plate count is the best

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method to determine economic loss or gain. On cross-examination, Pagan admitted that

there was a substantial mathematical error in his calculation of the average annual income

from 2007 to 2011. He testified that he initially miscalculated that the restaurant’s average

net income for the preconstruction period was $81,423; however, he testified that after the

mistake was corrected, on average, Kelley’s lost $3,983 a year before construction began. On

redirect, Pagan stood by his opinion that the decline in sales led to gross lost profits.

Matt Emberton was the AHTD construction division resident engineer for the second

half of the construction project. Emberton testified that allowing access to businesses is one

of the standard specifications of any AHTD project. He explained that contractors were

obligated to minimize difficulty and inconvenience accessing the businesses but were not

required to eliminate it. He recalled meeting with either Shannon or Stan to discuss a

problem with access, and that “wings” were added to the driveway to make it easier to turn

into the parking lot. Terry Evans, a civil engineer who worked on the construction project,

testified that he was at the construction site every day, and Shannon never complained to

him about access to Kelley’s.

Several regular customers of Kelley’s testified that business dropped off precipitously

after the construction began. Brian Andrews owned the wrecker service business across the

street from Kelley’s and testified that some of Kelley’s driveways were blocked and recalled

that blocked entrances were a continuous problem for the landowners and business owners

that lived along the construction route. When he ate at Kelley’s during construction, he

noticed that there were fewer customers, and he no longer had to wait for a table as he did

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before the construction. Paul Hall worked at a nearby bank during construction and testified

that “all of a sudden, the number of people that you saw dining just kept dwindling and

dwindling.” A former waitress, Lynn Ward, testified that during construction, the parking

lot was “a nightmare” and that to enter the lot

[w]e had to go down to in front of the trailer place -- the trailer place and then several
businesses, and then a motel, and then us to get into the parking lot. A lot of days,
we tried to pull around and park out in the front, so customers would know that we
were open because we didn't want to park around back like we normally done because
it looked like we were closed because there was no customers. I remember sitting at
the windows just looking out thinking man, this feels like a snow day because we just
didn't have any customers at all.

Ward testified that the construction crew left the cones blocking Kelley’s driveway

even when they were not working. The motel owner next door to Kelley’s testified that the

motel entrance and Kelley’s entrance were right next to each other, and both were blocked

“most of the time.”

RBC moved for a directed verdict, asking the court to dismiss all claims with

prejudice. First, RBC contended that there was no substantial evidence of negligence.

Specifically, RBC argued that there was no evidence that RBC did not comply with the

AHTD’s plans, specifications, and instructions and that Kelley’s did not present evidence

that access to the restaurant was denied. RBC contended that there was no evidence of

damages “pertaining to the retirement and payment to the indebtedness of Kelley’s

Restaurant” and it was undisputed that the corporate entity’s $350,000 loan debt was paid

off; thus, Kelley’s did not prove that the loan repayment is cognizable as a loss. RBC also

argued that it was “entitled to acquired immunity under the authority of the Rogers case.”

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The court granted the directed verdict motion, ruling that

the problem I have in this case is causation. There has been no proof whatsoever that
Richard Baughn Construction had any causation to any events that occurred
whatsoever. They were under the direct control of the primary contractor, API, and
under the Arkansas Highway Transportation Department, which has immunity
because of its special status in the State of Arkansas. But as far as proof as to causation
of any particular fault of Defendant Richard Baughn Construction, the Court finds
there is none. The Court further finds that the damages are speculative at best.

Kelley’s asked the court to reconsider, arguing that there was evidence that RBC

violated the AHTD specifications such that the issue should have gone to a jury. Kelley’s also

argued that Stan Kelley, who was Kelley’s sole owner during construction, took out the

$350,000 loan to keep Kelley’s in business, and evidence of that loan and its repayment were

proof of damages. Last, Kelley’s contended that RBC was not entitled to acquired immunity

because it negligently executed the contract. The court denied the request.

In the dismissal order, the circuit court found there was no substantial evidence that

any act or omission of RBC proximately caused any of the damages at issue, and Kelley’s

evidence of damages was unduly speculative.

Kelley’s timely filed a notice of appeal, and this appeal followed.

II. Discussion

A. Dismissal of Kelley’s Negligence Claim

1. Causation

A motion for directed verdict should be granted only if there is no substantial

evidence to support a jury verdict. Smith v. Heather Manor Care Ctr., Inc., 2012 Ark. App. 584,

424 S.W.3d 368. Stated another way, a motion for a directed verdict should be granted only

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when the evidence viewed is so insubstantial as to require the jury’s verdict for the party to

be set aside. Id. Where the evidence is such that fair-minded persons might reach different

conclusions, then a jury question is presented, and the directed verdict should be reversed.

Id. Substantial evidence is evidence of sufficient force and character to induce the mind of

the fact-finder past speculation and conjecture. Id.

“To establish a prima facie case of negligence, the plaintiff must demonstrate that the

defendant breached a standard of care, that damages were sustained, and that the

defendant’s actions were the proximate cause of those damages.” Barnett v. Cleghorn, 2017

Ark. App. 641, at 6, 536 S.W.3d 147, 150. “Proximate cause” is defined as “that which in a

natural and continuous sequence, unbroken by any efficient intervening cause, produces the

injury, and without which the result would not have occurred.” Id. “Proximate causation is

usually an issue for the jury to decide, and when there is evidence to establish a causal

connection between the negligence of the defendant and the damage, it is proper for the

case to go to the jury.” Id. “Proximate causation becomes a question of law only if reasonable

minds could not differ.” Id. Negligence is “the failure to do something which a reasonably

careful person would do.” Ambrus v. Russell Chevrolet Co., 327 Ark. 367, 370, 937 S.W.2d

183, 184 (1997).

Kelley’s asserts that there was substantial evidence presented at the trial that would

support a jury’s verdict that RBC breached the standards set forth in the AHTD construction

specifications, and in that breach, RBC proximately caused damage to the business.

Specifically, Kelley’s claims that RBC breached the AHTD construction project’s

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specifications, which proximately caused Kelley’s decline in sales.”3 Kelley’s presented

evidence that the truck entrances to the parking lot were closed, making it impossible for

vehicles hitched to boats or trailers to turn into the lot. The auction house a short distance

from Kelley’s and the regional recreational areas were consistent sources of customers for

Kelley’s, and the closure of the truck entrance made it impossible for those vehicles to safely

enter Kelley’s lot. There was evidence presented that the entrances were blocked by cones

making it difficult to enter the lot, and witnesses testified that to get to Kelley’s lot, they had

to enter the lot of another business down the road and drive to Kelley’s.

RBC claims that it adhered to the AHTD specification that contractors must

maintain the access points for the safe and convenient use of the adjacent property and

minimize difficulty entering the parking lot. RBC contends that Kelley’s presented no

evidence of negligence because Shannon and Pagan testified that they always had access to

the parking lot and that the key “is to minimize, not eliminate difficulty and inconvenience.”

We disagree. Because there was evidence and testimony that it was dangerous and at times

impossible to enter the driveways, a reasonable jury could find that a causal connection exists

between RBC’s negligence in adhering to the contract specifications and Kelley’s lost profit.

In other words, whether RBC complied with the contract specifications by providing safe

3
Section 603.02(d) of the AHTD Standard Specifications requires that “[t]he
contractor shall maintain access for the safe and convenient use of the adjacent property
owners/occupants.” See https://ardot.gov/wp-content/uploads/2020/10/Division-600.pdf.

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and convenient alternative driveways or failed to comply with this specification is a question

for a jury to decide.

RBC also argues that Kelley’s financial records show that the restaurant lost more

profits before and after the project than during it, and Kelley’s closed in 2017, three years

after RBC finished work; thus, there is no evidence that RBC was the cause of Kelley’s

downturn in business. RBC contends that Pagan’s testimony and report regarding Kelley’s

income statements and tax returns, his mathematical errors in calculating lost profits, and

Kelley’s pattern of profit loss show that the construction was unrelated to the damage to the

business. Contrastingly, Kelley’s asserts that the testimony that the most accurate way to

prove damages is by the decreasing plates-sold count and cites the need for the $350,000

loan to keep the restaurant open as proof of causation. It is the province of the jury to resolve

conflicting testimony. S. Constr., LLC v. Horton, 2020 Ark. App. 361, 609 S.W.3d 16. This is

also true for the conflict between Kelley’s testimony that there were more complaints than

those noted by the AHTD, and Emberton’s and Evans’s testimony that Shannon never

complained. In light of the evidence presented and our standard of review, the directed

verdict was granted in error, and the issue of damages should have been presented to the

jury.

Accordingly, we hold that Kelley’s presented substantial evidence such that a jury

could have found that RBC negligently caused damage to Kelley’s, and we reverse the circuit

court’s decision regarding proximate cause.

2. Damages

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We now turn to Kelley’s claim that the circuit court erred in finding that the evidence

of damages was speculative. We agree, and we reverse and remand. To recover damages for

lost profits, the claimant must present evidence that makes it reasonably certain that the

profits would have been realized but for the wrongful act. Greenway Equip., Inc. v. Johnson,

2020 Ark. App. 336, 602 S.W.3d 142. Arkansas law does not require exactness in proving

damages. Agracat, Inc. v. AFS-NWA, LLC, 2010 Ark. App. 458, 379 S.W.3d 64. If it is

reasonably certain that some loss occurred, damages may be stated approximately, even when

they are difficult to ascertain, as long as the evidence allows the fact-finder to reach a

satisfactory conclusion. Id. Where the evidence is such that fair-minded persons might reach

different conclusions, then a jury question is presented, and the directed verdict should be

reversed. Id.

Kelley’s contends that a fair-minded jury could find that the construction caused

nonspeculative damages. Kelley’s cites the evidence that the number of plates sold dropped

significantly during construction, and witnesses testified that there were dramatically fewer

customers during the period of construction. There was testimony that the owner of Kelley’s

at the time had to take out a $350,000 loan to keep the business afloat, and though Pagan

admitted to significant math errors, he stood by his testimony that Kelley’s lost profits during

the construction.

RBC disagrees, claiming that the evidence shows that Kelley’s lost more profits in the

years before and after construction than it did during construction. RBC contends that

Pagan’s calculations were “riddled with basic math and accounting errors,” and he could not

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explain or tie Kelley’s lost profits to RBC. RBC contends that the issue in this case is not

whether Kelley’s sustained losses but whether the losses were proximately caused by RBC’s

negligence or noncompliance.

In Jim Halsey Co. v. Bonar, 284 Ark. 461, 467, 683 S.W.2d 898, 903 (1985), the

supreme court affirmed the circuit court’s decision that the damages award was not based

on speculation. In Halsey, celebrity Rick Nelson’s booking agent realized that the

singer/actor would not be performing at a benefit concert in Fort Smith that he was

scheduled to attend, and the agent did not tell the local concert promoter. In part, the

promoter asserted that damage to his reputation caused him to lose business and profits, and

concert sponsors testified that they would not hire the promoter after this incident. Our

supreme court recounted that the promoter testified that

a promoter can expect to put on at least one concert a year. He then figured a
reasonable income from that concert based on a formula which included the number
of seats at the local stadium, a typical ticket price, and reasonable ticket sales based
on an average vacancy rate. He subtracted concert expenses and arrived at a net yearly
income for the promoter of $31,880.00.

284 Ark. at 467, 683 S.W.2d at 903.

Our supreme court held that the promoter offered sufficient proof that he would

have realized a profit, and the amount of income the promoter would lose as a result of

damage to his reputation, though stated approximately, was not based on speculation. The

instant case is similar in that there was evidence of lost sales correlating to the time of

construction, witnesses testified that there were drastically fewer customers, and there was

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testimony that the owner had to take out a loan for $350,000 to try and keep the business

open.

We hold that from the evidence presented, a reasonable jury could find that some

loss occurred, and profits would have been realized during the period of construction had it

not been for RBC’s negligence. Accordingly, we reverse the decision granting the directed

verdict and remand to the circuit court for a trial on the merits.

B. Writ of Mandamus

Kelley’s requests that our court issue a writ of mandamus directing the circuit court

to “appropriately record all proceedings such that the record of those proceedings would be

preserved for appeal.” Arkansas Supreme Court Rule 1-2(a)(3) provides that petitions for

writ of mandamus directed to the circuit court shall be filed with the Supreme Court; thus,

we do not have jurisdiction to address this point on appeal.

C. Acquired Immunity

RBC asserts that the circuit court’s decision granting the directed-verdict motion

should be affirmed by application of the acquired-immunity doctrine, even though the court

did not find acquired immunity applied in this case. RBC contends that in addition to

moving for a directed verdict on this basis, it “also filed a motion for summary judgment on

the issue, which was denied in 2015, and by Amended Answer.” RBC urges this court to

affirm the circuit court’s directed verdict under the “right result wrong reason” doctrine,

which allows the appellate court to address an argument or rationale on which the circuit

court never ruled. See Cauffiel v. Progressive Eldercare Servs.-Saline, Inc., 2021 Ark. App. 314, at

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9, 635 S.W.3d 1, 7. RBC contends that the instant case is an example of acquired immunity

because the doctrine “provides that a contractor who performs work in accordance with the

terms of a contract it has with a governmental agency and does so under the supervision of

the governmental agency is not liable for damage resulting from that performance.” We

disagree. As we discussed above, whether RBC performed in accordance with the

specifications of the contract is a question for the jury, and the issue of acquired immunity

is not cognizable here.

Reversed and remanded.

ABRAMSON and TUCKER, JJ., agree.

David A. Hodges, for appellant.

Barber Law Firm PLLC, by: Michael J. Emerson and Lauren A. Spencer, for separate

appellee Richard Baughn Construction, Inc.

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