Contract Freighters, v. J.B. Hunt Transport, 00-1225

• Court: United States Courts of Appeals. United States Court of Appeals (8th Circuit)
• Writing for the Court: Before McMILLIAN, Richard S. Arnold, and Bye; McMILLIAN
• Citation: 245 F.3d 660
• Parties: (8th Cir. 2001) CONTRACT FREIGHTERS, INC., APPELLEE, v. J.B. HUNT TRANSPORT, INC., APPELLANT. Submitted:
• Docket Number: No. 00-1225,00-1225
• Decision Date: 13 November 2000

Page 660

245 F.3d 660 (8th Cir. 2001) CONTRACT FREIGHTERS, INC., APPELLEE,
v.
J.B. HUNT TRANSPORT, INC., APPELLANT. No. 00-1225 UNITED STATES COURT OF APPEALS FOR THE EIGHTH CIRCUIT Submitted: November 13, 2000
Filed: April 3, 2001

Appeal from the United States District Court for the Western District of Missouri

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Before McMILLIAN, Richard S. Arnold, and Bye, Circuit Judges.

McMILLIAN, Circuit Judge.

J.B. Hunt Transport, Inc. (Hunt), appeals from a final judgment ¹ entered in the United States District Court for the Western District of Missouri in favor of Contract Freighters, Inc. (CFI). For reversal, Hunt argues the district court erred in granting summary judgment as to liability and erred in its calculation of damages. We affirm.

The district court had jurisdiction over this diversity action under 28 U.S.C. 1332. This court has appellate jurisdiction under 28 U.S.C. 1291.

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BACKGROUND

CFI, a Missouri corporation, and Hunt, a Georgia corporation, are trucking companies. On March 5, 1997, they executed a written contract in which Hunt agreed to purchase CFI's Kansas City, Missouri, terminal facility for $2,625,000.00. Paragraph 6 of the contract entitled Hunt to conduct an environmental audit and provided:

[i]f the Environmental Audit reveals any matters which would be in violation of [CFI's environmental] representations contained in this Paragraph 6, then at [CFI's] sole option: (a) [CFI] shall remedy such items in accordance with applicable federal, state and local governmental directives, and the Closing Date shall be adjusted accordingly, or (b) [CFI] may elect to terminate this Agreement and [CFI] shall completely refund any portion of the Purchase Price previously paid to [CFI].

(Emphasis added.) Paragraph 5(C) of the contract provided, in part, that Hunt's obligation to purchase the property was conditioned upon CFI's "pre-Closing remedial action, if any pursuant to Paragraph 6." Paragraph 11 of the contract provided for a closing date of June 1, 1997, which was extended by agreement of the parties to September 30, 1997.

After an environmental audit revealed the presence of diesel fuel constituents at the site, Hunt wrote CFI that it was only interested in proceeding if CFI took steps to remedy the situation. In June 1997, CFI reported the matter to the Missouri Department of Natural Resources (MDNR) for investigation and submitted an application for review by the MDNR's voluntary cleanup program. In a letter dated September 11, 1997, MDNR stated that, based on resampling of the soil, no further action was warranted, noting it would issue a "No Further Action" letter." CFI forwarded the September 11 letter to Hunt. On September 29, 1997, Hunt informed CFI that it would not close the sale because CFI had refused to clean up the contamination or take other alleviative action, such as providing an environmental insurance policy. On October 27, 1997, MDNR issued a "Certificate of Completion, Hazardous Substance Environment Remediation." The letter stated that "[s]oil sampling at the site indicated that contamination with diesel fuel . . . was below the cleanup objective for the site" and certified that "no remedial action [wa]s needed at the site." On November 1, 1997, CFI put the property back on the market. In May 1998, CFI executed a sale contract with Crete Carrier Corp. (Crete) for $2.2 million, which closed on August 24, 1998.

CFI then brought this action against Hunt for breach of contract. The district court granted CFI's motion for summary judgment as to liability. The district court rejected Hunt's argument that CFI had failed to meet a condition precedent by failing to remedy the contamination. The court reasoned that paragraph 6 unambiguously provided that CFI's obligation was to remedy an environmental contamination "in accordance with applicable federal, state and local governmental directives" and found that CFI had done so by obtaining the "no further action" letter from MDNR.

Because there were disputed issues of fact as to the property's fair market value as of September 30, 1997, the contract's closing date, the district court denied summary judgment as to damages and ordered a trial. ² At the trial, in addition to presenting evidence of the $2.2 million sale

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price to Crete, CFI presented the testimony of Glen Brown, its CEO and president. Brown testified that, based on his knowledge and experience and on offers received for the property, the fair market value was between $1.7 and $2.2 million. The district court found that the fair market value of the property was the $2.2 million sale price to Crete and awarded CFI the difference between that amount and the $2,625,000.00 contract price and expenses for the upkeep of the property. In addition, to compensate CFI for the loss of investment income, the district court awarded prejudgment interest on the unpaid contract price from November 1, 1997, the date the property was put back on the market, to August 24, 1998, the date the Crete sale closed. After deducting certain credits and offsets, the district court found that, as of August 24, 1998, CFI's "shortfall" was $570,871.00. After awarding prejudgment interest on that amount, the district court entered judgment for CFI in the amount of $626,431.00, plus...