Court Opinion

ID: 9656859
Source: CourtListenerOpinion
Date Created: 2023-08-23 20:04:28.316818+00
Date Added: 2024-06-11T18:13:37.030172
License: Public Domain

D.p. Marshall Jr., Judge, dissenting. This case should be retried, and I therefore respectfully dissent from the court’s decision. 1. New or Used? The court is mistaken on this point, while Bull Motor is partly correct and partly mistaken. The parties’ contract reflects that Murphy bought a “N” — for new — pick-up truck. He did. Arkansas has a comprehensive statutory scheme regulating motor vehicle dealers for the benefit of consumers and our state’s economy. Ark. Code Ann. §§ 23-112-102 et seq., and 23-112-601 et seq. Part of our code defines new motor vehicles and used motor vehicles. Ark. Code Ann. §§ 23-112-103(22) and (31)(A) and 23-112-602(10)(A). This truck was new — as a matter of iaw — because no entity had ever transferred the title to an ultimate purchaser. Ark. Code Ann. § 23-112-103(22). The new/used issue was a question of law for the circuit court to answer against the background of this existing law, not a question of fact for the jury. The court cites the governing precedent but does not follow it. “The laws which are in force at the time when, and the place where, a contract is made and to be performed, enter into and form a part of it. This is only another mode of saying that parties are conclusively presumed to contract with reference to the existing law.” Robarás v. Brown, 40 Ark. 423, 427 (1883). Our Supreme Court has applied this unremarkable holding as recently as Woodend v. Southland Racing Corp., 337 Ark. 380, 384, 989 S.W.2d 505, 507 (1999). This legal principle has work to do, as the court says, in cases implicating the Contract Clause where the law has changed since the parties struck their bargain. E.g., Ellison v. Tubb, 295 Ark. 312, 316(17, 749 S.W.2d 650, 652-53 (1988). But contrary to the court’s suggestion, this principle applies in other contexts too. For example, Cook Grains, Inc. v. Fallis, 239 Ark. 962, 963-65, 395 S.W.2d 555, 556-57 (1965), was a breach-of-contract action brought by a grain dealer against a farmer. The case turned on whether the farmer was a “merchant” under the U.C.C. The point is that our statutes embody our State’s public policy. State Farm Mut. Auto. Ins. Co. v. Henderson, 356 Ark. 335, 342-43, 150 S.W.3d 276, 280 (2004). Where, as here, the contract arises in an area regulated by existing State law, the applicable statutes must be applied when deciding what the parties’ chosen words mean. Woodend, supra (a betting contract); Cook Grains, Inc., supra (a commercial contract); Union Indemnity Co. v. Forgey & Hanson, 174 Ark. 1110, 1112, 298 S.W. 1032, 1033 (1927) (a bond). None of these cases involve the Contract Clause. “In other words, a statutory provision relating to the subject-matter of a contract, by operation of law enters into and becomes part of the contract.” Union Indemnity Co., 174 Ark. at 1112, 298 S.W. at 1033. We must therefore conclusively presume that the parties contracted with reference to the Arkansas Motor Vehicle Commission Act, and in particular to the definitions in the statute. Ellison, 295 Ark. at 316-17, 749 S.W.2d at 652-53. If the terms of this Act are not part of every contract for the sale of motor vehicles in this state, then the purpose of this important regulatory scheme will be defeated. It cannot be the law in Arkansas today that the subjective intentions of buyers and sellers determine whether vehicles are new or used. A dealer and a buyer cannot contract around the statute by agreeing that a titled vehicle is “new” or that a never-titled vehicle is “used.” The Greiner Motor case makes this point as a matter of history. 244 Ark. 736, 737, 427 S.W.2d 8, 9 (1968). The court relies on Justice George Rose Smith’s 1968 opinion for the proposition that “ [t]he generally prevailing meaning of a ‘new’ vehicle does not include vehicles that have been stolen.” In that case, the court held that the new/used issue was for the jury. 244 Ark. at 737, 427 S.W.2d at 9. The supreme court did so, however, against a different background of existing law. The General Assembly did not adopt the motor vehicle statutes now in place until 1975, seven years after Greiner Motor was decided. Act 388 of 1975. Forty years ago, the definition of a vehicle as new or used was left to the seller and the buyer — and then to the jury if a dispute arose. Not any more. The circuit court erred by not deciding the new/used issue for Bull Motor. Whether a contract is ambiguous is always a question of law for the court. Western World Ins. Co. v. Branch, 332 Ark. 427, 430, 965 S.W. 2d 760, 761 (1998). And the meaning of any ambiguous term is likewise always a question of law for the court, unless that meaning must be decided based on disputed extrinsic evidence. Smith v. Prudential Property and Casualty Ins. Co., 340 Ark. 335, 341, 10 S.W.3d 846, 850 (2000). Here, the parties’ description of this truck as new was not ambiguous. The statute fixed the meaning of this term. Even if some ambiguity is assumed, resolving the term’s meaning did not turn on disputed extrinsic evidence. All the material facts — the theft, the salesman’s lack of knowledge, Murphy’s lack of knowledge '— were undisputed. The statute’s words are also clear. As Murphy candidly acknowledged during the arguments about a directed verdict, “[i]f you want to consider this a new vehicle under the Arkansas code as defined, we will stipulate to anybody that wants to read it, it was a new vehicle under the code.” Therefore, the circuit court made a reversible error by leaving the new/used issue alive. As Bull Motor correctly argues, the court erred by instructing the jury to decide this illusory ambiguity. Bull Motor, however, was not entitled to judgment as a matter of law on Murphy’s complaint. Murphy got a new truck. But it was a new truck that had been stolen. Bull Motor’s nondisclosure of this material fact was a breach of the parties’ contract. Currier v. Spencer, 299 Ark. 182, 185-86, 772 S.W.2d 309, 311-12 (1989). The nondisclosure was also a constructive fraud. Roach v. Concord Boat Corp., 317 Ark. 474, 476-77, 880 S.W.2d 305, 306-07 (1994). However the claim was pleaded, here again all the material facts — theft, nondisclosure, justifiable reliance, and purchase — were undisputed. Apart from its statutory defense, Bull Motor essentially conceded liability for the incomplete information that tainted the parties’ deal. Murphy knew that he was buying a truck with one hundred and twenty miles on it. What he did not know was that a thief had put forty of those miles on the truck. The real question for the jury was Murphy’s damages: how did the thief s forty miles affect the pick-up’s fair market value at the time Murphy bought the truck? 2. The Damages. $7,000.00 in damages for a forty-mile trip by a thief is clearly against the preponderance of the admissible evidence. Giving the credible evidence its greatest possible weight, the proof supports damages of only $1,000.00 to $1,500.00. The circuit court correctly instructed the jury that Murphy was entitled to damages representing the difference between the vehicle’s contract price and the vehicle’s market value at the time of the breach. AMI 2519-Civil (Ed. 2007). The breach occurred at the sale, when Bull Motor failed to tell Murphy about the theft. The only credible evidence on this difference in value was Bull Motor’s salesman’s admission on cross-examination that a price reduction of$l,000.00 to $1,500.00 would have been appropriate. Over Bull Motor’s objection, Murphy testified that, in his opinion, the truck’s value was reduced between $8,000.00 and $10,000.00 by being driven by the thief. Based solely on that testimony, the jury awarded him $7,000.00. Because Murphy provided no rational basis for his figures, however, the damage award should not stand. Our cases have consistently held that an owner is qualified to give an opinion about the value of his own personal property. Walt Bennett Ford, Inc. v. Brown, 283 Ark. 1, 4, 670 S.W.2d 441, 443 (1984). This rule of law is sensible and settled. But the owner’s opinion on value must be based on something more than speculation. It cannot be “plucked from the air without any fair and reasonable basis.” Ark. State Highway Comm’n v. Steen, 253 Ark. 908, 914, 489 S.W.2d 781, 784 (1973). Our law allows an owner to testify about the value of his property because he has shopped for it, paid for it, repaired it, and lived with it. This is the reason behind this rule of law. But as the maxim states, cessante ratione legis, cessat ipse lex: the reason of the law ceasing, the law itself ceases-. Had Murphy been testifying about the truck’s value in an accident case arising after he had owned the vehicle for some time, then of course he could give his opinion about the truck’s value. This testimony would be based on his experience. Cf. Minerva Enterprises, Inc. v. Howlett, 308 Ark. 291, 824 S.W.2d 377 (1992). That, however, is not what happened. The circuit court allowed Murphy to testify about the value of the truck at the time of sale as a new truck that had been stolen. But Murphy gave no testimony showing that he had any basis to speak about the truck’s actual value at that time. Murphy never had the vehicle appraised after he learned of the theft. He did no comparison shopping to see what a similar new truck that had been stolen would sell for. He did no repairs when he bought the truck — because, he acknowledged, there was nothing wrong with it then. Murphy had no foundation for his opinion about the actual value of this new but stolen truck. This would be a different case if Murphy had provided expert testimony to support his calculation of damages. Cf. Moore Ford Co. v. Smith, 270 Ark. 340, 604 S.W.2d 943 (1980). It would also be different if Murphy had taken the truck to a repairman, who could have provided a list of damaged parts and an estimate to repair them. Cf. Zahn v. Sherman, 323 Ark. 172, 913 S.W.2d 776 (1996); Walt Bennett Ford, supra. Nothing like this ever happened. Murphy simply had no fair or reasonable basis for his testimony about how much the price of the truck should have been reduced because of the theft. The record shows the basis for Murphy’s damages testimony, and that basis further undermines his speculative numbers. Murphy claimed that he was harmed by the uncertainties he felt knowing that his truck had been stolen. Murphy testified: • “If [Bull Motor had] had the track and it’d been $5,000.00 off, I wouldn’t of bought it. . . . it wouldn’t be worth it, wondering what — what’s ever going to tear up on the track, how it’d been drove.” • “When I hear a noise, that’s what I wonder, what did he do to this track.... it makes me wonder what’s going to — what’s going to go out at 37,000 [miles].” Murphy’s damage numbers were the fruit of his fears. This contract verdict rests on a buyer’s speculations about the future, not competent proof of fair market value at the time of sale. We should therefore reverse this judgment and remand for a new trial. Murphy deserves compensation based on competent evidence about the fair market value of his new but stolen truck on the day that he bought it. Griffen, J., joins. Robbins and Heffley, JJ., join part 2.