Court Opinion

ID: 7821463
Source: CourtListenerOpinion
Date Created: 2022-09-07 17:56:01.169192+00
Date Added: 2024-06-11T16:30:44.954090
License: Public Domain

Marian F. Pendí, Judge, dissenting. I would affirm the trial court decision with respect to contractual liability but order a remittitur with regard to damages. I believe the majority, in reversing this jury verdict, has mistakenly applied the parol evidence rule to this contract. While I readily admit parole evidence could not be introduced to alter or vary the terms of the written agreement, I find the evidence to be of an oral agreement supplementing the standard industry or adhesion contract signed by the parties. The Majority, in accepting APCO’s position the agreements were meged into the subsequent written contracts and that parol evidence is inadmissible to contradict, vary, or add to the terms of a valid and unambiguous written contract, has failed to recognize and apply the collateral agreement rule. Stephens testified an agent of APCO, Ben Harrison, as an inducement to encourage Stephens to locate his business in the APCO station, agreed APCO would repurchase Stephens’ inventory. This was in the event APCO should sell its property while Stephens occupied it. Stephens testified an additional inducement was the continued successful operation of an agreement with Jefferson Bus Lines. There was nothing in the written agreements about repurchase of inventory nor mention of the bus station operation. A subsequent written contract supercedes previous agreements and expressions which directly relate to the same subject matter as the writing. However, promises which are collateral to an agreement, that is promises which are auxiliary to the main agreement are not merged into the written agreement. Stephens contends, and the jury so found, there were two sets of promises or transactions between him and APCO — one set oral, the other written. The determination whether the final writing is designed to supplant the oral agreement or to merely supplement it is a finding for the fact finder to make only after comparing the two. John Lane d/b/a Fortune Cattle Co. v. Pfeifer, 262 Ark. 162, 568 S.W. 2d 212 (1978) held parol evidence to be admissible when offered to prove an independent collateral act about which a written contract is silent. See also, Lonoke Production Credit Association v. Pfeifer Milling Co. 268 Ark. 639, 595 S.W. 2d 223 (Ark. App. 1980). Stephens testified that he and APCO’s agent agreed APCO would repurchase Stephens’ inventory, stock and equipment; that Stephens would maintain the bus franchise, and that APCO induced Stephens to make improvements when APCO knew the sale of the property was imminent. The written agreement was silent as to whether APCO would repurchase inventory, stock, and equipment. Also it was silent as to the continued operation of the bus line. The written contract was a standard printed form prepared by APCO. Nothing in the oral agreements contradicted the terms of the written agreements. I believe there was evidence from which the jury could have concluded there was a collateral agreement. Hence, I would affirm the trial court’s allowance of the testimony regarding the collateral agreement. While I would affirm the jury’s finding as to the collateral agreement, I do believe Stephens has not met his burden of proving damages. The question not only was whether there was an oral agreement to repurchase Stephens’ stock, inventory, fixtures or equipment, but whether Stephens had in fact suffered any damages resulting from the breach of the oral agreement. Stephens testified the stock which APCO refused to purchase was worth $4,525.00. Stephens introduced into evidence a detailed list of the stock and value of these items. The jury obviously believed there to be a collateral agreement:. This agreement required APCO to repurchase the stock from Stephens. The failure of APCO to repurchase the stock was a breach of contract. Stephens testified as to the value of the stock. This is evidence of the value or the damages sustained by the breach. An owner is permitted to testify as to value. This evidence can be accepted or rejected by the trier of fact. Arkansas State Highway Commission v. Fowler, 240 Ark. 595, 401 S.W. 2d 1 (1966). APCO argues the figure given by Stephens does not reflect the salvage value of the stock. Since Stephens has failed to mitigate his damages, he can recover nothing. I might be inclined to agree with this position had APCO produced any evidence tending to show this. The Restatement, Contracts, § 336 states: (1) “Damages are not recoverable for harm that the plaintiff should have foreseen and could have avoided by reasonable effort without undue risk, expense, or humiliation.” It is not infrequently said that it is the “duty” of the injured party to mitigate his damages so far as that can be done by reasonable effort on his part. Since there is no judicial penalty, however, for his failure to make this effort, it is not desireable to say that he is under a “duty”. His recovery against the defendant will be exactly the same whether he makes the effort and mitigates his loss, or not; but if he fails to make the reasonable effort, with the result that his injury is greater than it would otherwise have been, he cannot recover judgment for the amount of this avoidable and unnecessary increase. The law does not penalize his inaction; it merely does nothing to compensate him for the loss that he helped to cause by not avoiding it. 5 Corbin on Contracts, § 1039, p. 242-243. Perhaps Stephens could have avoided some of his loss on the value of the stock, but who has the burden of proving he did not mitigate his damages? Once Stephens introduced his evidence with regard to damages, the burden shifted to APCO to prove the figure given did not reflect his true loss or what his loss might have been. ... If, on the other hand, the action is where a recovery of nominal damages may be had, even though no actual damage is recovered (as in trespass or breach of contract), then, if the defendant eliminates all the plaintiffs claims for actual damages by showing that the plaintiff by reasonable care could have avoided them, this does not go to the destruction of the cause of action nor prevent a recovery of nominal damages. . . . the doctrine of avoidable consequences is not considered a defense at all, but merely a rule of damages by which certain particular items of loss may be excluded from consideration. Being thus a matter in “mitigation,” it need not be specifically pleaded at all by the defendant. Nevertheless, though by the better view the defendant need not plead it, he does have the burden of proof. He must bring forward evidence the plaintiff could reasonably have reduced his loss or avoided injurious consequences, and he must finally convince the jury of this in order to succeed on this issue. McCormick, Damages, § 34, p. 129-130 (1930). The “duty” to reduce or minimize damages goes only to the amount of recovery. It is not an absolute defense to the injury. The burden is on plaintiff to establish the elements measuring the amount of recovery. . . . The burden is on the defendant to establish his plea of recoupment or set-off or matters in reduction of damages. 17A C.J.S., Contracts, § 591, p. 1149-1150. In accordance with the general rule, as to avoidable consequences, in case of breach of contract, defendant in an action for breach of contract is entitled to show any matters which go to reduce the amount of loss actually suffered by plaintiff. 25 C.J.S., Damages § 96, O. 1003. APCO produced no evidence to dispute the damages figure given by Stephens. They did not even cross-examine him as to the figure or ask if he had attempted to mitigate the loss. We could not speculate as to the salvage value of the stock. Many of the stock items listed an APCO brand product. We could not automatically say this has a salvage value. There is simply no evidence the figure of $4,525.00 could have been reduced by reasonable effort by Stephens. Therefore, I would not say there was no substantial evidence from which the jury could have found the damages to be that stated by Stephens. I might at this time point out that the majority makes much of the fact that Ben Harrison was in the courtroom and was never called to testify by the plaintiff. Ben Harrison, who was under subpoena, did not arrive at the hearing, until after the plaintiff had rested. Plaintiff had called all his other witnesses and rested subject to calling Mr. Harrison when he arrived. APCO agreed to proceed with its case and did so. After APCO rested its cases, the plaintiff made a decision not to call Harrison. The plaintiff evidently believed, as does this opinion writer, that he had adequately proven his case. At no time did APCO request they be allowed to reopen their case and call Mr. Harrison. It might be noted he was in the courtroom subject to being called to the witness stand by either party. One might infer APCO knew Harrison’s testimony would not supports its contentions. I do find error, however, in the court’s submission to the jury on the issue of Stephens’ loss of the bus station and the answering service, and the issue of whether Stephens relied upon APCO’s agents’ statement he would work out arrangements for Stephens to have more time to find another location. The question is not whether APCO had the right to terminate the written agreements with Stephens. This is apparent from the written contract. Rather, the question is did APCO, or its agent, verbally withdraw the notice to terminate or make statements which encouraged Stephens not to remove his property or to relocate his business thereby resulting in his losing the bus franchise and answering service business. From the record, I find Stephens called APCO’s agent Hammett and told him he had to have more time to look for another place to locate the bus station. Hammett asked Stephens how much time he needed and told him he would send two men to talk to Stephens about the problem. I find this to be a far cry from establishing liability in APCO in causing any damages resulting from the loss of the bus franchise. I find the evidence was insufficient to go to the jury and the Court erred in not directing a verdict for APCO. St. Louis I. M. & S. Ry. Co. v. Coleman, 97 Ark. 438, 135 S.W. 338 (1911). I do not believe Stephens proved to what extent he was damaged by APCO. The only evidence I find as to the cause of Stephens’ loss of the bus franchise and the answering service was the locking of the pumps by Kerr-McGee representatives — not by APCO. I find no evidence going to show that agents of APCO caused the loss of the bus franchise. There is no evidence establishing APCO’s liability in this matter. I believe the Court erred in submitting this matter to the jury. Finding there to be error with regard to the bus franchise and the answering service, I would reverse the denial of the directed verdict in favor of APCO with regard to these elements of damage. The only element of damage remaining is the repurchase of the stock. I would affirm the finding of liability on the condition Stephens accept a remittitur to $4,-525.00. For the reasons stated above, I respectfully dissent.