Title: TB of Blytheville, Inc. v. Little Rock Sign & Emblem, Inc.

State: arkansas

Issuer: Arkansas Supreme Court

Document:

TB of BLYTHEVILLE, INC. and Interested
Underwriters at Lloyd's, London, Signatory
Policy No. 1772 v. LITTLE ROCK SIGN & EMBLEM,
INC.

96-562                                             ___ S.W.2d ___

                    Supreme Court of Arkansas
                 Opinion delivered June 2, 1997


1.   Sales -- common-law voluntary-payment rule discussed -- rule
     consistent with application of UCC. -- When one pays money on
     demand that is not legally enforceable, the payment is deemed
     voluntary; absent fraud, duress, mistake of fact, coercion, or
     extortion, voluntary payments cannot be recovered; common-law
     principles of law and equity are given full effect unless
     displaced by particular provisions of the UCC; there was no
     support for the contention that the common-law voluntary-
     payment rule was inconsistent with the application of the UCC;
     therefore, the voluntary-payment rule was not displaced by the
     enactment of the UCC.

2.   Sales -- voluntary-payment rule inapplicable -- contract for
     second sign was independent contract for sale of goods. -- 
     The voluntary-payment rule was applied in error by the trial
     court where the first sign was completely destroyed and there
     was no possible way to repair that sign; appellant chose to
     mitigate its damages by procuring a second sign; the purchase
     of the second sign was an independent transaction and a second
     contract between the parties; the purchase of the second sign
     was not a subsidiary action to the first contract but a
     second, independent contract between the parties; because the
     contract for the second sign was an independent contract for
     the sale of goods, that transaction was governed by the UCC;
     therefore, upon acceptance of the second sign, appellant had
     a duty under the UCC to pay appellee pursuant to the contract;
     this legal duty to pay rendered the voluntary-payment rule
     inapplicable to the second contract; in order for the
     voluntary-payment rule to apply, appellant must not have had
     such a duty. 

3.   Jury -- interrogatory regarding voluntary-payment rule
     submitted to jury in error -- rule was inapplicable. --  
     The trial court erred in submitting an interrogatory to the
     jury regarding the voluntary-payment rule because the
     voluntary-payment rule was not applicable; additionally,
     although the interrogatory made reference to an agency
     relationship, the record did not contain any evidence
     establishing such a relationship.   

4.   Parties -- real party in interest must bring cause of action -
     - who is considered to be real party in interest. -- Rule 17
     of the Arkansas Rules of Civil Procedure provides that only a
     real party in interest may bring a cause of action; that party
     is generally considered the person who can discharge the claim
     on which suit is brought, and not necessarily the person
     ultimately entitled to the benefit of recovery.


5.   Parties -- real party in interest as between insured and
     insurance company -- insured is considered real party in
     interest when only partially reimbursed or entitled to
     deductible interest. -- Generally, where an insurance company
     has only partially reimbursed an insured for his loss, the
     insured is the real party in interest and can maintain the
     action in his own name for the complete amount of his loss;
     partial reimbursement includes instances when an insured has
     not been reimbursed for the amount of his deductible; where
     the insured has a deductible interest, he is the real party in
     interest and the action must be brought in his name for his
     own benefit; the insured stands as trustee to the insurer as
     to any amount recovered; the insurer is not a necessary party. 
     
6.   Parties -- insured appellant held deductible interest in
     litigation -- trial court erred in holding that insurer was
     real party in interest and not insured. -- The trial court's
     ruling that the insurer, not the insured business,
     was the real party in interest, was in error where it was
     undisputed that the insured held, at the very least, a
     deductible interest in the litigation; the insured was the
     real party in interest.

7.   Evidence -- relevancy of evidence within trial court's sound
     discretion -- abuse of discretion constitutes grounds for
     reversal. -- Relevancy of evidence is within the trial court's
     sound discretion, subject to reversal only if an abuse of
     discretion is demonstrated.

8.   Evidence -- abuse of discretion in excluding evidence relating
     to permanent repair of second sign -- costs expended for
     repairs to second sign were relevant to jury's determination
     of damages. -- There was an abuse of discretion by the trial
     court in excluding evidence relating to the permanent repair
     of the second sign where there were two separate contracts
     between the parties; the appellant was entitled to have a jury
     determine whether it should recover damages based upon the
     alleged defects in the first sign that fell and should have
     been allowed to submit to the jury evidence regarding whether
     the second sign was faulty; an important component of such
     evidence included the amount of claimed damages; costs
     expended to permanently repair the second sign were relevant
     to the jury's determination of damages in these issues.

9.   Interest -- prejudgment interest defined -- when it may be
     collected. -- Prejudgment interest is compensation for
     recoverable damages wrongfully withheld from the time of the
     loss until judgment; this interest must be allowed for any
     injury where, at the time of loss, damages are immediately
     ascertainable with reasonable certainty; where prejudgment
     interest may be collected at all, the injured party is always
     entitled to it as a matter of law; the test in prejudgment
     interest cases is whether there is a method of determination
     of the value of the property at the time of the injury; if
     such method exists prejudgment interest should be allowed.

10.  Interest -- amount of property damage was ascertainable --
     prejudgment interest should have been awarded. -- Where the
     amount of property damage was ascertainable from the date of
     the sign falling, prejudgment interest should have been
     awarded.

11.  Interest -- postjudgment interest -- when awarded. --
     Postjudgment interest is to be awarded on the total amount of
     damages, including prejudgment interest, to compensate the
     recovering party for the loss of the use of money adjudged to
     be his; the purpose of awarding interest would be frustrated
     if a party were not compensated for the loss of use of all of
     his money, both before and after judgment; the award of
     interest is necessary to fully compensate an injured party. 

12.  Interest -- prejudgment and postjudgment interest should have
     been awarded upon any jury determination of damages. -- The
     trial court erred by not granting prejudgment and postjudgment
     interest and, upon remand, the supreme court determined that
     interest should be awarded upon any jury determination of
     damages.

13.  Appeal & error -- allegation that trial court erred in denying
     motion to new trial moot -- errors warranted remand for new
     trial. -- The appellant's contention that the trial court
     erred in denying its motion for a new trial was not addressed
     because it was moot in view of the errors which warranted
     remand for a new trial.


     Appeal from Mississippi Circuit Court, Chickasawba District;
John Fogleman and Samuel Turner, Jr., Judges; reversed and
remanded.
     Reid, Burge, Prevallet & Coleman, by:  Robert L. Coleman, for
appellants.
     Rieves & Mayton, by:  Martin W. Bowen, for appellee.

     W.H."Dub" Arnold, Chief Justice.
     This appeal involves an action brought by TB of Blytheville,
Inc. (Taco Bell) seeking damages against Little Rock Sign & Emblem
(LR Sign) for two allegedly defective signs sold by LR Sign.  Taco
Bell initiated this action under the theories of negligence, breach
of warranty, and strict product liability.  A trial was held in
which a jury rendered a verdict for Taco Bell for $3,892.19.  Taco
Bell appeals asserting several trial court errors and requests a
new trial.  We agree that the trial court erred in several of its
rulings and therefore, we vacate judgment and remand this action
for a new trial.
     In October 1991, Taco Bell purchased a one-hundred-foot sign
from LR Sign that was installed on its restaurant premises.  Taco
Bell paid $28,269.36 for the sign.  On March 18, 1992, the sign
fell to the ground, and it was destroyed.  
     Taco Bell contacted its insurer Interested Underwriter's at
Lloyds, London (Lloyd's).  Lloyd's then began an investigation
which was joined by LR Sign's insurer, Travelers, to determine the
reason for the sign's falling.  Lloyd's hired an adjusting firm,
Gay & Taylor.  Lloyd's and Travelers' jointly hired a metallurgist
to determine the cause of the sign's falling.
     Approximately six weeks after the first sign falling, LR Sign
installed a second sign on the premises.  An invoice for $25,086.85
for this sign was sent to Gay & Taylor.  The invoice was
resubmitted to Edmondson Management, Inc., the financial management
firm for Taco Bell, and it was paid.  Around this time, Lloyd's
issued a check to Taco Bell as an insurance payment for the damage
of the first sign for $24,086.85, the cost of the second sign,
minus Taco Bell's $1000 deductible.    
     In March of 1993 during a wind storm, the second sign began to
lean and shake; Taco Bell hired Hinson Display & Sign Service of
Blytheville to immediately make temporary repairs so that the sign
would not fall.  These repairs cost $1,068.19.  Hinson determined
that the post of the sign was not sturdy enough to support the
sign's height, so they permanently lowered the sign to a height of
sixty feet to ensure that it would not fall.  The costs of the
permanent repairs were $5,281.35.      
     Taco Bell initiated suit against LR Sign seeking damages
sustained in the failure of both the first and second signs.  Taco
Bell sought damages which included reimbursement for the $1000 for
its deductible and for the expenditures for the temporary and
permanent repairs of the second sign, and also, for other damages
to its property caused when the first sign fell.  Additionally,
Taco Bell sought repayment of the $24,086.85 on behalf of Lloyd's
for the claim it paid arising out of the falling of the first sign.
     A jury trial was held.  The jury returned a verdict awarding
Taco Bell the sum of $3,892.19 and dismissing Lloyd's claim.  Taco
Bell and Lloyd's appeal various rulings of the trial court and
request a new trial.
     Taco Bell asserts six points of error on appeal.  First, Taco
Bell asserts that the trial court erred in ruling that the common
law voluntary-payment rule governs the transaction for the second
sign and bars recovery absent instances of fraud or duress. 
Second, Taco Bell contends that the trial court erred in submitting
an interrogatory to the jury which stated that Mr. Glenn Norwood,
an employee of the adjusting firm Gay & Taylor was an agent of
Lloyd's of London.  Third, Taco Bell asserts error in the trial
court's ruling that Lloyd's was the real party in interest. 
Fourth, Taco Bell contends that the trial court erred in excluding
evidence regarding the costs of permanent repairs to the second
sign.  Fifth, Taco Bell asserts error in the trial court's failure
to award pre- and postjudgment interest. And lastly, Taco Bell
appeals the denial of its motion for a new trial because the jury's
verdict was against the undisputed evidence.
                    I. Voluntary Payment Rule
     The trial court ruled that Taco Bell was barred from recovery
for the amount paid for the second sign because of the common-law
voluntary-payment rule.  Appellant requests that we find that the
voluntary-payment rule has been displaced by the enactment of the
Uniform Commercial Code and is not controlling in instances
involving the sale of goods.  
     In Boswell v. Gillett, 226 Ark. 935, 940,