Court Opinion

ID: 9652494
Source: CourtListenerOpinion
Date Created: 2023-08-23 17:24:45.410576+00
Date Added: 2024-06-11T18:12:51.893758
License: Public Domain

R AY THORNTON, Justice, dissenting. Today’s decision by .the majority court allows recovery for the breach of an oral promise allegedly made in 1994, more than five years before this litigation was filed and nearly four years after Davis signed a written contract for a one-year agreement that specifically stated, “This contract supersedes prior agreements between the parties hereto whether oral or written.” Davis admits that he had knowledge that the October 19, 1995 contract did not provide for a long-term commitment, which he contended had been fraudulently promised by Tyson. However, he chose to disregard the express language of the October, 1995 agreement and to rely on the oral agreement that he believed he had made with Tyson’s employee, Tom Johnson. He testified: Yes that’s the contract I signed on October 19, 1995. Yes this is another three grow-out one year contract. Yes I’ll agree there’s no language in here that says Tysorl is obligated to place anymore pigs with me after the end of the three grow-outs that’s talked about in here. ... I saw it, the contract that I signed before I borrowed the money. Yes I saw it and signed it. I knew I had a three batch deal when I signed the contract that’s what our agreement says when I signed the note. That’s [what] the contract said, but the verbal agreement, too, I had with Tom Johnson was the one I went by. The majority reasons that the recovery was correctly allowed because the matter is not governed by principles of contract law, but because the jury found that an act of fraud occurred in a fraudulent representation by Johnson that a series of one-year contracts would continue for twenty years “or until death do us part.” Based upon this allegedly false promise made in 1994, Davis borrowed a substantial sum of money from the bank and modified his turkey houses to raise pigs. After completing these modifications, he entered into an initial one-year contract that he did not read, and commenced pig operations. During this contract year, Davis was told by Tyson that the arrangement was short-term. However, the majority reasons that our three-year statute of limitations for allegations of fraud and promissory estoppel did not commence running when a Tyson employee specifically advised Davis that there was no long-term agreement. This encounter with Tyson caused Davis to believe that Tom Johnson “had bed” about the long-term nature of the promise of a lifetime supply of hogs. Davis testified that in May, 1995, he was given notice that the promise of a long-term commitment was false. He testified: Yes I overheard one of the Tyson guys say that the dry bed farms were going to be a short term deal. ... I couldn’t believe what I was hearing so I confronted this guy and said I was told it was a long term deal. That’s what he was referring to he looked me in the eye and said well it’s a short term deal just until we get something else going somewhere else. The next thing I did was call Tom Johnson. I called Tom Johnson cause I thought Tom had bed to me and I wanted to confront him. That’s right Tom Johnson said nothing has changed ...[.] Not only was Davis told in May, 1995 that there was no long-term deal, he read and signed a written contract on October 19, 1995 expressing clearly that there was no long-term commitment. As previously stated, this contract was for three grow-out periods, aggregating approximately one year. The written contract specifically stated that it superseded prior agreements between the parties “whether oral or written.” Davis stated that he read and understood this contract, but relied on his verbal agreement with Johnson. Until this case, the law in Arkansas has been clear. The statute of limitations for an action based on fraud is three years. Ark. Code Ann. § 16-56-105 (1987); Hampton v. Taylor, 318 Ark. 771, 887 S.W.2d 535 (1994). The limitation period begins to run, in the absence of concealment of the wrong, when the wrong occurs, not when it is discovered. Hampton, supra. Accordingly, the running of the statute of limitations commenced when Johnson made the oral promise that Davis could have hogs as long as he lived, but. was tolled during the time Davis had not discovered that it was false. The running of the statute of limitations was suspended only until Davis discovered fraud or “should have discovered it by the exercise of reasonable diligence.” Talbot v. Jansen, 294 Ark. 537, 744 S.W.2d 723 (1998). A concealed fraud suspends the running of the statute of limitations, and the suspension remains in effect until the party having the cause of action discovers the fraud or should have discovered it by the exercise of reasonable diligence. SEECO v. Hales, 341 Ark. 972, 22 S.W.3d 157 (2000). No mere ignorance on the part of the plaintiff of his rights, nor the mere silence of one who is under no obligation to speak, will prevent the statute bar. Chalmers v. Toyota Motor Sales, USA, Inc., 326 Ark. 895, 935 S.W.2d 258 (1996). There must be some positive act of fraud, something so furtively planned and secretly executed as to keep the plaintiffs cause of action concealed or perpetrated in such a way that it conceals itself. Id. If the plaintiff, by reasonable diligence, might have detected the fraud he is presumed to have had reasonable knowledge of it. Id.; Smothers v. Clouette, 326 Ark. 1017, 934 S.W.2d 923 (1996). In the circumstances of this case, it is clear that Tyson did not conceal from Davis that the arrangement was short-term, but in fact specifically advised him that it was short-term, and then prepared and executed with Davis a short-term agreement. It is difficult to imagine a more open and complete disclosure that the arrangement was short-term in nature and that any representation that there was a long-term commitment was false. Upon his learning that the representation of long-term commitments was false, the statute of limitations commenced running, and Davis had the duty to file an action complaining of fraud within three years of his discovery of the misrepresentation. In fact, the evidence indicates that Davis considered filing such a complaint in 1996. Davis had suffered damages by borrowing money from the bank and in improving his turkey houses to accept pigs in rebanee upon a false long-term commitment. There was no evidence of any further act so furtively planned and secretly executed as to keep Davis’s cause of action concealed. See Chalmers, supra. Davis’s own testimony shows that he knew or should have known at the time of his signature on the October 19th contract that the promise of a long-term agreement was false. Davis admits to understanding that the October, 1995 agreement did not contain the long-term commitment he claimed he had been promised. Upon his discovery that Johnson’s promise was false, he knew of the fraud, and the limitations statute commenced running at or before October 19, 1995. The statute barred the filing of a complaint after more than three additional years had lapsed. Once alerted to the false representation of the long-term agreement, and thereafter signing a one-year agreement extinguishing all oral agreements, it cannot be disputed that Davis had fub knowledge that any cause of action that he had for fraud could have been filed at any time. In my view, the three-year statute of hmitations for fraud and promissory estoppel commenced running when Tyson’s employee advised Davis that there was no long-term commitment. Davis formally acknowledged this repudiation of any long-term commitment when he signed the written contract for one year in October of 1995, and testified that it did not contain his alleged long-term agreement. Nearly four years elapsed after he signed this contract, and before he filed this action. Clearly the statute of limitation had run. Flowever, the majority contends that an element of fraud, the injurious act, did not occur until 1998. I disagree. The majority is correct in stating that the tort of fraud consists of five elements that the plaintiff must prove by a preponderance of the evidence: (1) a false representation of a material fact; (2) knowledge that the representation is false or that there is insufficient evidence upon which to make the representation; (3) intent to induce action or inaction in rebanee upon the representation; (4) justifiable rebanee on the representation; and (5) damage suffered as a result of the reliance. Golden Tee, Inc. v. Venture Golf Schools, Inc., 333 Ark. 253, 969 S.W.2d 625 (1998). Here, Davis presented evidence that Tom Johnson’s statement that Davis could have hogs “until death do us part” was false, satisfying the first element. Certainly, the second prong that there was insufficient evidence upon which to make such a representation was shown. The third element, an intent to induce action in reliance upon the representations, was demonstrated when Davis’s contracted with Tyson for the production of hogs, thereby satisfying the fourth element of justifiable reliance on Johnson’s representations. The fifth element requires a showing that Davis suffered damages as a result of his reliance upon Tyson’s representation. It is clear that Davis suffered injury when he borrowed money from the bank to modify and improve his turkey houses so they could be used to grow hogs. As stated in the majority opinion, Davis contends that he was misled and enticed to enter into significant debt and investment to Tyson’s benefit based upon Tyson’s false representations. The five elements necessary to constitute an act of fraud were present when he borrowed money and invested in equipment needed .to grow hogs. The act of fraud was complete at that point in time. Subsequently, Davis was specifically told in May of 1995 that there were no long-term commitments by Tyson. Recognizing that he had been injured, Davis considered filing an action for fraud at that time. Reece Hudson testified, “Yes at that point some time after Mr. Johnson left[’,] Mr. Davis threatened to sue. I don’t know what — No this was in the latter part of 1996 this is not something that Mr. Davis just dreamed up for this lawsuit filed in ‘99.” Contrary to the majority’s observation in obiter dictum, I believe that such an action would not have been dismissed. The majority next suggests that the statute was further tolled because of a colloquy in 1996. I bebeve that the statute had commenced running not later than October 19, 1995, and the majority cites no authority for the proposition that after the discovery of a fraud starting the running of the statute in October 1995, the running of the statute could be further tobed by an oral repetition of the promise that Davis had already discovered to be false. Neither was any argument advanced by Davis that a new fraud was committed. According to Davis’s testimony, there was a renewed assurance in 1996 that Tyson was going to stay in the hog business, using bedded floors, for a long time. Davis testified as fobows: Q. Okay. What did Reece. Hudson [Tyson employee] teb you that MoeUer said about bedded floors in 1996? A. Well one day we were just having a conversation and he said he had spent all day with Bill Moeller riding around looking at hog houses and bedded floors and that Bill said that they were doing good and that they was gonna be around for years to come. Q. How did that make you feel? A. Made me feel pretty good. It is worth noting that Davis was not privy to this alleged conversation between two Tyson employees. Reece Hudson, the Tyson employee quoted by Davis, testified to the contrary. He stated: I guess when I started going out there at the end of the batches, not before then but when I started going out there at the end of the batches, yeah, Mr. Davis and me had talked about his contract. ... I would go out there and he would always say, “Well he had a promise, pigs forever, ” and I would always [say,] “Well, Mr. Davis, I never heard that, I always heard a certain length of time on your contract”; and he’d say, “Well, I wasn’t there” and I’d say, “OK” and he would say specifically that Tom was the one. Tom Johnson. Yes I did use those words [that the program was temporary] with Mr. Davis. I would say, you know, this is a temporary deal. (R. 1340) Yes. I kept notes. I didn’t record everything that was said and I didn’t record maybe every time I went out there; but I did keep notes. (Emphasis added.) The majority gives great weight to Tyson’s general statement that they were going to remain in a bedded-floor hog business for a long time. The majority then concludes that the statute did not start running until 1998 when Tyson did not sign a new contract and stopped shipping hogs. In my view, the majority is simply wrong in failing to recognize that our three-year statute of limitations had run, and that Tyson’s motion to dismiss as to the elements of fraud and promissory estoppel should have been granted. I am authorized to state that Justice Glaze joins in this dissent.