Court Opinion

ID: 7827845
Source: CourtListenerOpinion
Date Created: 2022-09-07 18:14:43.11779+00
Date Added: 2024-06-11T16:30:54.993527
License: Public Domain

JIM HANNAH, Chief Justice, concurring. I concur in the majority’s decision in this case; however, I write separately because I am concerned about confusion that may arise from this opinion due to the manner in which the parties in this case pled, tried, and presented the issue of consequential damages to both the circuit court and to this court on appeal. With few exceptions, such as subject-matter jurisdiction, this court does not raise an issue on its own motion. See, e.g., State v. Boyette, 362 Ark. 27, 207 S.W.3d 488 (2005). The contract issue that concerns me is not an issue that we would typically raise on our own motion; however, for the sake of clarity in explaining why this case was decided as it was, I wish to bring my concerns to the attention of those who will read this opinion. What I wish to discuss is that the issue on equating lost profits with consequential damages presumes a valid contract between the parties when that issue was not decided below. The circuit court was presented with the argument that even if there was a valid contract, any consequential damages were waived under the contract terms, making the issue moot. The circuit court decided the issue on this basis. However, by pleading this case and trying it as the parties have, the remand on consequential damages now assumes that there is a valid contract. This arguably circumvents that decision in the circuit court entirely. The argument made below regarding the clause on consequential damages raises the question of whether the issue of a valid contract was waived. “Waiver means the intentional relinquishment of a known right.” Thompson v. Bank of Am., 356 Ark. 576, 583, 157 S.W.3d 174, 178 (2004). I am not convinced that waiver is shown on the facts that have been presented on appeal. To the contrary, the facts show that Buildings was concerned about whether it even had a contract claim, as shown by its argument below that its claims be considered as tort claims. I am not convinced that there was a valid contract. Buildings asserted in its breach-of-contract claim that Ozark breached its “duty” to “perform” and its “duty of acting with good faith” when it failed to secure title to a specific seventeen-acre piece of property so that Buildings could perform and obtain the benefit of its contract. The Standard Short Form Agreement Between Owner and Contractor is the contract between Buildings and Ozark. It contains no contractual obligation that Ozark provide a specific site for construction. Exhibit A to the Agreement is a Project Construction Summary. It includes a cost of $3,000,000 for “purchase of 17 acres of land.” There is no reference in the Agreement or the Summary to what seventeen acres are to be bought or that any specific piece of property must be purchased. The Summary does not place the obligation of acquiring the seventeen acres on any specific party; however, given Buildings has sued Ozark for its failure to secure title to the acreage at issue in this case, we can assume that, at least in Buildings’s opinion, it was not Buildings’s contractual obligation to secure title. Clearly, the Summary is not simply a description of Buildings’s obligations under the contract. Instead, it must memorialize the consensus of the parties to the project on what the costs would be. I see nothing in the Agreement or Summary that obligated Ozark to provide this specific acreage for this project, and I see nothing in the Agreement, Summary, or record in this case, that would stop the parties from fulfilling the contractual obligation on some other acreage. Perhaps there was a breach of the implied covenant of good faith and fair dealing in this case, but the breach-of-contract claim in the complaint is based on a failure to acquire a specific piece of property, and the contract does not appear to create this obligation. My concern was considered to some degree by the parties below, but the issue was not developed or decided. The circuit court in its order on the summary judgment stated the following: “In order to avoid Defendants’ privity argument, Plaintiff Buildings, Inc. argues in its Brief in Response to Motion for Summary Judgment that the breach of contract claim by Buildings, Inc., should be treated as a tort.” The circuit court then found that even assuming there were such an obligation, there was a mutual waiver of consequential damages in the contract that moots the issue. The issue is no longer moot because this court is sending the case back on the point of consequential damages. The issue of the existence of a contract should be litigated.