## United States Court of Appeals FOR THE EIGHTH CIRCUIT

No. 97-3979

Mann Brothers Logging, Inc. * * Appellee, *

* Appeal from the United States
v. * District Court for the * Western District of Arkansas. Potlatch Corporation, * * Appellant. *

Submitted: May 13, 1998 Filed: July 9, 1998

Before BOWMAN, Chief Judge, HEANEY and HANSEN, Circuit Judges.

HEANEY, Circuit Judge.

Potl atch Corporation (Potlatch) appeals from a jury verdict awarding Man n Brother s Logging, Inc. (Mann Brothers) $240,000 for breach of an oral contract

. Potlatch challenges the district court’s jury instructions concerning the elements o f cont ract formation and whether the contract could be for a reasonable duration; th e sufficiency of the evidence as it relates to whether there was an oral contract; and the jury’s damage award. We affirm.2 I.

At tr ial the parties presented the following evidence: On October 1, 1991 , Po tlatch’s woodlands manager for Arkansas, Dr. Bill Pope, decided to hire Man n Brot hers as an independent logging contractor. According to Pope, Potlatch wa s interes ted in developing long-term relationships with its independent contractors

. Because Mann Brothers was a relatively small operation, Pope recognized that Mann Brothers would have to make additional hir es and purchase more equipment in order to suppl y Potlatch with the logging services it required. On October 21, 1991, Man n Brothers signed a written contract with Potlatch providing that Mann Brothers would provide logging services to Potlatch until December 31, 1991. According to Pope, the purpose of the short-term contract was to establish a formal relationship with Man n Brothers and to outline Mann Brothers’ job responsibilities, including cutting, skidding and hauling logs. The contract also covered indemnification issues. According to Pope, the parties did not intend for t he written contract to dictate the ultimate length of Mann Brothers’ work. Rather, the primar y purpose of the written contract was to ensure that Mann Brothers complied with insurance requirements.

In Feb ruary 1992, Pope and Mark Mann (Mann), one of Mann Brothers ’ pa rtners, discussed Mann Brothers future relationship with Potlatch. Pope assure d Mann that if Mann Brothers invested in equipment, Potlatch and Mann Brothers would have a long-term relationship. In turn, Mann Brothers assured Potlatch that it would be
av ailable full-time and year-round. Shortly after Mann and Pope met, Mann Brothers purchased equipment, including an additional loader.

Throu ghout

1992 and 1993, Pope repeatedly assured Mann Brothers that it s equipment purchases were ju stified and reconfirmed that Potlatch would provide years of work for Mann Brothers. Mann Brothers continued to assure Potlatch that it would be avail able full-time and year-round. During the same period, Pope informe d Potlatch’s independent contractors, including Mann B rothers, that there would continue3

to be increased production and an increased need for logs. In response, Mann Brothers bought an additional skidder in the spring of 1993 to increase its production.
Potlatch opened a new logging mill in January 1994. After Potlatch again assured Mann Brothers that there was sufficient work in the future, Mann Brothers purchased more logging equipment. In May 1994, Potlatch informed Mann Brot hers that it needed to purchase an additional dozer to enhance production. After a tour of the new Potlatch logg ing mill in September 1994, Mann Brothers purchased a loader in order t o maximizeproduction. Mann testified that, when Pope confirmed that there would be years of work for Mann Brothers, he assumed Pope meant at least 4 or 5 years based on the amount and cost of the equipment Pope suggested Mann Brothers purchase.
Pop e left Potlatch in June 1994. On December 9, 1994, Potlatch terminate d Mann Brothers, effective December 31, 1994. Pope stated that if he had stayed a t Potlatch, he would have honored the oral agreement he believed Potlatch had with Mann Brothers. Pope also testified that it was customary in t he timber industry to make oral contracts and to memorialize such agreements with a hand shake. Pop e acknow ledged that the fact Potlatch terminated its relationship with Mann Brothers in the winter made it extremely difficult for Mann Brothers to find work.
Mann Brothers was forced to sell its logging equi pment from which the proceeds were applied to its outstanding bank debt. In addition, Mann Brothers’ certified public accountant, Ricky Mercer, testified that Mann B rothers had lost profits of $389,140 for the relevant time period, although the lost profits were off-set by other income earned by Mann Brot hers after Mann Brothers was terminated. Following the trial, the jury retur neda verdict in favor of Mann Brothers on its breach of contract claim an d awarded damages of $240,000. Potlatch now appeals.In Crain Industries, Inc. v. Cass , 810 S.W.2d 910 (Ark. 1991), the Arkansa s

Supreme Court rev iewed trial court instructions to determine whether a jury had been properly charged as to the elements and formation of a contract under Arkansas law. Id. at 915. In Crain , the court approved a jury instruction that said “manifestation of mut ual assent to the terms and conditions of the contract” must be demonstrated. Id. at 915-16.
4 II.

Potlatch ch allenges certain jury instructions, the sufficiency of the evidence as to w hether there was an oral contract, and the jury’s damage award. Potlatch firs t argues that the district court erred by failing to instruct the jury on the elements an d formation of a contract. We review jur y instructions for an abuse of discretion. Klisch v. MeritCare Med. Group , 134 F.3d 1356, 1358 (8th Cir. 1998) . “When reviewing jury instructio ns, this court’s review is limited to whether the instructions, viewed on th e whole, fairly and adequately represent the evidence and applicable law in light of the issues presented to the jury in a particular case.” Id. (citation omitted)

In this case, the district court instructed the jury that there “must be an offer by one side that i s accepted and agreed to by the other.” (Appellant’s App. at 493.) The distr ict court’s jury instruction is consistent with the instruction approved of in Crai n Industries, Inc. v. Cass , 810 S.W.2d 910, 915-16 (Ark. 1991). Crain counsels that a 1 proper contract instruct

ion communicates an “objective theory” of contract law. Id. at 916 (citation omitted). We believe that the district court provided an “objective theory” of contract law under Arkansas law and did not abuse use its discretion. Havin g reviewed the jury instructions, on the whole, we conclude that t hey fairly and accurately represent the evidence and applicable Arkansas law in light of the issues presented to the jury.

P o tlatch next argues that the district court erred when it provided the following jury instruction:5 Where a contra ct contains no express agreement as to how long it will last , a reasonable duration may be implied by the nature of th e contract or from the surrounding circumstances. The law does say no t spe cifically how long would be reasonable. That’s for you to decide

. When a contract fixes no time for its durati on, and none can be implied by the nature of the contract and surrounding circumst ances, the contract may be terminated at the will of either party.

(Appellant’s App. at 495.) Specifically, Potlatch argues that the district court erred by instructing the jury that it could infer a reasonable duration to the oral contract. Potlatch cit es several cases holding that a contract of indefinite duration may be terminated a t will. See , e.g. , Union Nat’l Bank v. Federal Nat’l Mortgage Ass’n , 860 F.2d 847, 853 (8th Cir. 1988) (holding that traditional commercial contract provided for termination at wi ll under Arkansas law); Gary Braswell & Assocs. v. Piedmont Indust., Inc. , 773 F.2d987, 989 (8th Cir. 1985) (under Arkansas law, only a contract of an indefinit e duration may be terminated at will); Griffin v. Erickson , 642 S.W.2d 308, 310 (Ark

. 1982) (holding that an employment contract of an indefinite duration is terminable at will) ; Delony v. Rucker , 302 S.W.2d 287, 290 (Ark. 1957) (holding that a contract of an indefinite duration is terminable at will).
Although Mann Brothers agrees with the district court’s i nstruction that contracts of an ind efinite duration are terminable at will, it cites Jefferson Smurfit Corp. v

. Hopkins , 894 S.W.2d 9 51 (Ark. App. 1995), for the proposition that where there is an issue of fa ct as to whether an oral agreement contains a reasonable duration, it i s inappropriate for the court to find as a matter of law that a contract is terminable at will. Id. at 952. We agree. Thus, when i t is unclear from the record that a contract is for an indefinite duratio n, “[w]hether justification exists for termination of the contract under the facts and circumstances of a particular case is usually a question of fact.” Joshua v. McBride , 716 S.W.2 d 215, 218 (Ark. App. 1986) (citation omitted). See also Gary B r aswell , 773 F.2d at 989 (holding that where an oral contract was removed from the statute of frauds by clear and convincing evidence, under Arkansas law, the defendant6

could not “termi nate the contract at its will. Only a contract of indefinite duration may be so terminated”) (citing Griffin v. Erickson , 642 S.W.2d 308, 310 (Ark. 1982)).

In this ca se, Potlatch made several representations to Mann Brothers that i t wanted to enter into a long-term relationship and promised that there were y ears of work available. Based on Potlatch’s representation s, Mann Brothers believed 4 or 5 years of work was available and it made several equipment purchases so that it would b e available to Potlatch full-time and year-round. Unlike the traditional a t-will employment relati onship, the record in this case reveals that there was a fact issue as to how lon g Potlatch and Mann Brothers would continue a working relationship. Therefore, we hold that the district court did not abuse its discretion in offering the challenged jury instruction.
Potlatch next argues that, based on the evidence presented at trial, the district court erred by denying Potlatch’s motion for judgment as a matter of law (JAML) as to whether Po tlatch and Mann Brothers entered into an oral agreement. We review d e novo a denial of a JAML motion based on the sufficiency of the evidence, applying the
same standard as the district court. Triton Corp. v. Hardrives, Inc. , 85 F.3d 343, 345 (8th Cir. 1996) (citation omitted). Under t his standard, we resolve all conflicts in favor of Mann Brothers and will reverse only if no reasonable jury could have found for Mann Brothers. Id. We do not evaluate, consider or weigh the credibility of the evidence and we will not set aside a jury’s verdict lightly. Id. (citation omitted).

Under the Arkansas statute of frauds, contracts that are not to be performe d within one year from the contract’s making must be in writing in order to b e enforceable. Ark. Code Ann. § 4-59-101(a)(6). “[T]o take an oral contract out of the statu te of frauds, both the making of the oral contract and its performance must b e proven by clear and convincing evidence.” Dolphin v. Wilson , 942 S.W.2d 815, 818 (Ark. 1997).7

Pope testified that it was common in the log ging industry for business to be done with a hand shake and he did not believe that he needed to memorialize hi s conversations with Mann Brothers in a written contract. He also testified that h e honored his word and had intended to enter into a long-term agreement with Man n Brothers by promising years of work. Mann Brothers also inten ded to enter into a longterm relationship with Potlatch and had agree d to be available year-round and on a fullti mebasis. Moreover, based on Pope’s representations, Mann Brothers mad e significant equipment purchases that would enable Mann Brothers to perform the years of work expected by Potlatch. Based on the leve l and cost of the equipment purchases, Mann Brothers believed that at least 4 or 5 years of work was expected by Potlatch

. In our view, sufficient evidence supports the jury’s finding of an oral contract an d sufficient performance to take it out of the statute of frauds.
Finally, Potlatch challenges the jury award of $240,000 in lost profits to Mann Bro thers. Having carefully reviewed the record and the parties’ submissions, w e conclude that there is no reason to disturb the jury’s damage award.

III.
For the reasons stated above, we affirm.
A true copy.

Attest.
CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.