The deletion of nearly 46,000 text messages was key to a Lonoke County jury awarding $14.1 million in February to a group of farmers who did business with Turner Grain Inc. of Brinkley and its trading partner K.B.X. Inc. of Little Rock.
“For me, this was the best-case scenario that we could have come out with for the farmers,” said attorney Kendel Grooms of Campbell & Grooms of Little Rock, one of the plaintiffs’ attorneys.
In 2014, about 20 farmers sued Turner Grain Inc., alleging they lost millions of dollars working with the grain broker, which ended up in Chapter 7 bankruptcy liquidation. The farmers also named other defendants, including K.B.X., alleging conversion, fraud, theft by deception and civil conspiracy. K.B.X. buys and sells rice through brokers and other entities.
The farmers argued that K.B.X. knew about Turner Grain’s poor financial condition as far back as early as 2013 but didn’t warn the farmers.
And K.B.X. continued doing business with Turner Grain when other rice buyers stopped because they were skeptical about how Turner Grain was able to offer above-market rice prices to farmers. It was estimated at the trial that Turner Grain did 70% to 90% of its rice business with K.B.X. Under Arkansas law, K.B.X. had a duty to warn the farmers, the plaintiffs said.
K.B.X. denied the allegations of wrongdoing. And earlier this month, K.B.X. asked Lonoke County Circuit Judge Sandy Huckabee for a new trial or to reconsider the jury award. K.B.X.’s motion is pending.
On Feb. 24, after more than three weeks of trial, the jury awarded the farmers about $5.9 million in compensatory damages and $6.2 million in punitive damages, which are meant to punish defendants.
Huckabee also awarded $2 million in interest, and additional interest is accruing at 10% annually.
The jury found that Turner Grain and its former owner Jason Coleman, who died in 2019, were liable for more than 90% of the judgment. The jury found that K.B.X., its owner and president, Steven Keith Sr.; Keith’s son, who worked at K.B.X., Steven Michael Keith Jr.; and employee Shay Sebree were liable for a total of 8% of the compensatory judgment and interest. For the punitive damages, only Steven Keith Sr., Coleman’s estate and Turner Grain are liable.
But Huckabee ruled that Steven Keith Sr. was jointly and severally liable for the damages, meaning the farmers can collect the full $14.1 million judgment from him even though the jury assigned most of the blame to Coleman’s estate and Turner Grain.
Steven Keith Sr. appears to be in better financial shape than Coleman’s estate and Turner Grain. He was a co-owner of the waste management company Rineco Chemical Industries of Haskell (Saline County) when Heritage Environmental Services LLC of Indianapolis bought it in 2017 for a reported $75 million.
Grooms said he thought one of the keys to winning the verdict was K.B.X.’s destruction of text messages between its employees and Turner Grain. Experts for the plaintiffs found that a total of 45,830 text messages were deleted, with 2,635 of those between K.B.X. and Turner Grain. The jury could conclude that the deleted texts contained damaging information.
“The text deletion is an example of how a jury can punish any party, either a party in the lawsuit or any future party, that thinks deleting data in their control is a good idea,” said Don Campbell, who also represented the farmers. “The juries take a poor attitude towards that kind of conduct and will not believe other things you say if they find out you’ve withheld or deleted information.”
Still, even with the deleted text information, the plaintiffs had to prove the facts of their case, which they did with dozens of depositions and hundreds of thousands of pages of documents, Grooms said. Attorney Parker Spaulding at Campbell & Grooms also worked on the case.
For their work on the suit, Grooms, Campbell and attorney Jerry Kelly of Lonoke were named last week the Arkansas Trial Lawyers Association’s 2019-20 Trial Lawyers of the Year.
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