The company that once paid state Sen. Jeremy Hutchinson of Little Rock $9,000 a month in lawyer fees filed suit Friday.
Friday's civil suit by Preferred Family Healthcare, a behavioral-health service provider, seeks to recover at least $383,805, an amount awarded to an ex-employee who sued one of the company's subsidiaries in 2014.
Hutchinson represented the subsidiary but failed to show up for hearings or respond to court motions in the dispute, the suit said. The earlier suit involved is David Coleman v. Health and Human Resources of Arkansas. Health Resources is a Batesville subsidiary of Preferred Family Healthcare.
The new suit said Hutchinson failed to notify the company of missed deadlines and court appearances in the previous case in Independence County. The company "learned of the judgment for the first time from its banking institutions, who were processing the garnishments" in the Coleman case. The order of garnishment went out Feb. 21, 2017, according to the new lawsuit.
The new suit, filed Friday in Independence County Circuit Court, also wants to reserve the right to seek recovery of retainer fees and gifts Preferred Family Healthcare paid, a sum estimated at $500,000 in a federal criminal case involving the lobbyist responsible for Hutchinson's hiring.
Lobbyist Milton R. "Rusty" Cranford of Bentonville pleaded guilty June 7 to helping executives within Preferred Family Healthcare embezzle $3.5 million, much of it going to illegal campaign contributions and bribes to lawmakers.
Nonprofit companies such as Preferred Family Healthcare that receive Medicaid reimbursements are barred by law from lobbying for additional taxpayer dollars.
Cranford said in his plea that an Arkansas lawmaker identified as "Senator A" in court documents was paid a retainer as a form of a bribe along with receiving cash and other gifts either from the company, Cranford or other Cranford lobbying clients. Total value of the gifts and retainers is estimated at $500,000 in the plea.
Hutchinson is "Senator A," his attorney has acknowledged. Hutchinson has denied the allegations through his attorney. Hutchinson, 44, hasn't been charged in the federal investigation.
He is a Republican who has served in the Arkansas Senate since 2011, representing parts of Pulaski and Saline counties. Before he joined the state Senate, he was a member of the state House of Representatives from 2000-07.
Hutchinson's father is Tim Hutchinson, a former U.S. representative and former U.S. senator from Arkansas, and his uncle is Arkansas' governor, Asa Hutchinson.
Jeremy Hutchinson is a partner with the law firm of Steel, Wright, Gray & Hutchinson.
Preferred Family Healthcare's suit seeks to leave the door open for further recovery and asks for a jury trial, the suit says.
"Mr. Hutchinson may have caused additional and material financial injury to [Preferred Family and Health Resources] through additional acts and omissions, as suggested by his invoicing and receiving monthly payments of [totaling] $108,000 in 2016 and $271,000 in 2013-2015 without corresponding evidence of any legal work," the lawsuit says.
Tim Dudley, an attorney from Little Rock representing Jeremy Hutchinson, said the company is trying to argue that Hutchinson was the company's lawyer and not the company's lawyer at the same time.
Dudley said Friday that his client cannot reasonably be acknowledged to be Preferred Family's lawyer, as stated in Friday's suit, and be the recipient of a bribe only disguised as a lawyer fee at the same time.
"They attach a letter as an exhibit in this lawsuit in which they say they are raising his retainer fee because of the good job he's doing," Dudley said.
Preferred Family Healthcare has either dismissed or suspended at least four members of its top management team since November after being briefed on the investigation in October, the company said.
"Today's Preferred Family Healthcare is a different organization than the one led by the executives who came from Alternative Opportunities before the merger of AO into PFH in 2015," the company said Friday. "After the merger, as we became aware of significant wrongdoing by certain executives and consultants, we removed those who put personal gain over the PFH mission."
Dismissed executives included the chief executive officer, Marilyn Nolan; the chief operating officer, Bontiea Goss; and the chief financial officer, Tom Goss. They are all of Springfield, Mo.
Preferred Family Healthcare has 47 locations in Arkansas and other operations in Missouri, Oklahoma, Kansas and Illinois.
In Arkansas, the company's finances are now subject to monthly review along with unannounced inspections of facilities by the state Department of Human Services, the agency and the governor's office have confirmed.
Preferred Family Healthcare is cooperating with federal investigators, the company's statement said.
"As part of that investigation, PFH [Preferred Family Healthcare] reviewed its relationship with Jeremy Hutchinson and based on that review, today filed a civil lawsuit against Hutchinson and the law firm of Steel, Wright, Gray & Hutchinson," the statement said. "The lawsuit alleges significant malpractice on Hutchinson's part in his representation, or lack thereof, of PFH."
Hutchinson's law firm disavowed any role in the matter in a statement Friday.
"As a professional association, the firm's partners manage their own clients and caseloads, with few exceptions," the law firm's statement said. "In this matter, no other members of the firm performed any legal work or received any fees from this client.
"We are reviewing the complaint, but as for the allegations contained in it, we would refer all questions to Mr. Hutchinson or his attorney."
Hutchinson's 2012 campaign contribution and expenditure report shows a $2,000 contribution from the Cranford Coalition, Rusty Cranford's lobbying firm. The Cranford Coalition also donated $2,000 in 2013, reports show.
Additional 2013 contributions include $2,000 each from Cranford, his wife Karen Sue Cranford and son Chase Cranford. Nolan contributed $500. Pro 1 of Springfield, a thermostat manufacturing and import company with Tom and Bontiea Goss on its board, gave $2,000.
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A Section on 06/16/2018