Jeffrey S. Underwood v. Jody Doran, Individually and as a Shareholder and Member of Conway Precisions Products, Inc.

── Jeffrey S. Underwood v. Jody Doran, Individually and as a Shareholder and Member of Conway Precisions Products, Inc. ── Court: Court of Appeals of Arkansas Date: April 29, 2026 Category: General Cite as 2026 Ark. App. 269 ARKANSAS COURT OF APPEALS DIVISION III No. CV-24-763 Opinion Delivered April 29, 2026 JEFFREY S. UNDERWOOD APPELLANT APPEAL FROM THE FAULKNER COUNTY CIRCUIT COURT V. [NO. 23CV-18-157] JODY DORAN, INDIVIDUALLY AND AS A HONORABLE SUSAN WEAVER, SHAREHOLDER AND MEMBER OF JUDGE CONWAY PRECISIONS PRODUCTS, INC. APPELLEE AFFIRMED AS MODIFIED MIKE MURPHY, Judge Appellant Jeff Underwood appeals the order of the Faulkner County Circuit Court awarding appellee Jody Doran (formerly Jody Underwood) attorney’s fees and costs following a derivative action brought on behalf of Conway Precision Products, Inc. (CPPI). On appeal, Jeff argues that the circuit court abused its discretion in awarding fees; alternatively, he argues that a significant portion of the costs and fees that were awarded were improper. We agree with his argument concerning costs and affirm as modified. This is the second time these parties have appeared before this court. In Underwood v. Underwood, 2024 Ark. App. 51, 684 S.W.3d 896, Jody sued Jeff individually and on behalf of CPPI for breach of fiduciary duty, conversion, and collection of a shareholder loan. After trial, the jury awarded CPPI $152,614 on the derivative claims for breach of fiduciary duty and conversion and awarded Jody damages on her individual breach-of-fiduciary-duty claim, but it found in Jeff’s favor concerning the loan collection. Jody appealed, and Jeff cross- appealed. On appeal, we agreed with Jody and reversed and remanded the loan-collection claim, holding that there was no evidence that Jeff had performed the loan contract requirements. We affirmed on cross-appeal. After trial, Jody moved for attorney’s fees and costs, requesting $146,961.75 in fees and approximately $22,000 in costs. Jeff responded, arguing that no fees were recoverable because the underlying claims sounded in tort, and furthermore, Jody was not a prevailing party. Alternatively, he argued that any award should be reduced because the request included fees and costs that are not recoverable under Arkansas law: clerical and administrative work, fees attributable to unidentified billers, and costs for an expert witness. The circuit court held a hearing on the motion and took the matter under advisement. In the following order awarding Jody costs and half of the fees she requested, the court wrote: 2. “The successful plaintiff in a derivative action may be awarded attorneys’ fees against the corporation if the corporation received ‘substantial benefits’[.]” See Millsap v. Lane, 288 Ark. 439, 442, 706 S.W.2d 378, 380 (1986). 3. A Plaintiff in a derivative action can recover interest on an attorneys’ fees award. See generally, Millsap, 288 Ark. at 444, 706 S.W.2d at 380. 4. The Court finds that Conway Precision Products, Inc. did benefit from Plaintiff’s claims; therefore, Plaintiff’s request falls under the substantial benefit exception stated in the Millsap case. 5. Taking into consideration the experience of the attorneys, the hourly rate and hours billed, the results obtained, and the individual and derivative nature of the claims asserted, the Court finds that an attorney fee award against the Corporation, 2  Conway Precision Products, Inc., equal to half of the amount requested is fair given that the Plaintiff was not successful on all of her claims. 6. Accordingly, Plain