Cox v. McLaughlin

• Decision Date: 20 December 1993
• Docket Number: No. 93,93
• Citation: 315 Ark. 338,867 S.W.2d 460
• Parties: Toby James COX, Appellant, v. Harold McLAUGHLIN, Reliable Truck Brokers, Inc., d/b/a Champion Transportation Services, Inc., Appellees. 00540.
• Court: Arkansas Supreme Court

Page 460

867 S.W.2d 460

315 Ark. 338

Toby James COX, Appellant, v. Harold McLAUGHLIN, Reliable Truck Brokers, Inc., d/b/a Champion Transportation Services, Inc., Appellees.

No. 93 00540.

Supreme Court of Arkansas.

Dec. 20, 1993.

Craig Lambert, Little Rock, for appellant.

James E. Crouch, Springdale, for appellees.

DUDLEY, Justice.

Plaintiff sued defendants for breach of contract and malicious prosecution. Defendants moved for summary judgment on both counts. The trial court granted the motion. Plaintiff appeals. We reverse and remand on both counts.

In March 1990, Toby James Cox, plaintiff, was the driver of a truck that was owned by his father, Floyd Cox, and was leased to Westport Trucking Company. Harold McLaughlin, defendant, was employed by Reliable Truck Brokers, Inc., which did business as Champion Transportation Services, Inc. Defendant Champion was a brokerage company that contacted motor carriers and arranged for the transportation of cargo for various shippers. Champion contracted with Westport Trucking to haul a load of Alpo Pet Food from a factory in Crete, Nebraska to a Sam's Wholesale Club in Houston, Texas. The load was to be picked up on March 13 and delivered to Sam's on March 15 or 16. Plaintiff picked up the load in Nebraska on the date scheduled, March 13, and hauled it to Trenton, Texas, when, on March 15, he learned that a check from Westport Trucking to his father had been returned for insufficient funds. He phoned Westport Trucking and was told that the company was without funds, could not pay for hauling the load currently aboard the trailer, and could not pay other amounts that were past due to plaintiff's father. Plaintiff refused to haul the load the rest of the way to Houston without being paid. Plaintiff testified that on that same day, the 15th, he phoned Terry Lafarlette, a broker for defendant Champion, and told him of his predicament. He stated that Lafarlette told him he would have to get his money from Westport Trucking. On Friday, March 16, Champion was informed, apparently by Sam's, that the load might not have been delivered as scheduled. On Monday, the 19th, Champion confirmed the fact that the load had not been delivered to Sam's. Champion called Westport Trucking, and got a description of the tractor, trailer license number, and plaintiff's driver's license number.

Defendant McLaughlin testified that defendant Champion did not want to lose its valuable brokerage account with Alpo Pet Foods. Champion realized it owed money to Westport Trucking for other loads and that it might offset some of the money that it owed to Westport Trucking by paying plaintiff. In the meantime, plaintiff determined that Westport owed his father about $4,300 for hauling, including the load currently aboard. On the 20th, defendant McLaughlin, on behalf of defendant Champion, reached an agreement with plaintiff by which Champion would pay $4,200 to plaintiff if plaintiff would go ahead and deliver the load to Sam's. Champion paid $2,100 to plaintiff at that time. The parties disagree about when the other $2,100 was to be paid. Plaintiff says it was due when he got to Houston, and Champion says it was due when the load was delivered to Sam's. Plaintiff got to Sam's on March 22, five days after the originally scheduled date, and Sam's rejected the load. Champion then arranged for plaintiff to unload the dog food at another warehouse. Plaintiff called Champion from that warehouse and asked for the remaining $2,100. Champion refused to pay, and plaintiff refused to unload. Immediately afterwards, an employee of the warehouse told defendant McLaughlin that plaintiff had left the warehouse with the load. Defendant McLaughlin phoned the cargo theft department of the Houston Police and told a policeman that plaintiff had just left the warehouse with his customer's load. The same day, defendant McLaughlin, a resident of Washington County, contacted the office of the Prosecuting Attorney in Washington County and executed an affidavit. As a result, the plaintiff was charged with "Fraud in the acquisition of authorization to provide vehicle transportation of property." See Ark.Code Ann. § 5-37-524 (1987). Meanwhile, plaintiff hauled the load back to his home in Trenton, Texas. There is no evidence indicating that plaintiff attempted to remove any of the load from the trailer. Plaintiff was arrested in Texas on the Washington County felony charge. Ultimately, the Prosecuting Attorney was granted leave to nolle prosse the charge.

Plaintiff then filed this suit for breach of contract and malicious prosecution. The trial court granted the motion for summary judgment on the contract count on the ground that plaintiff had a pre-existing duty to deliver the load to Houston, and thus, there was a failure of consideration for the subsequent agreement with defendant Champion. The trial court alternatively held the contract was made under duress. The trial court granted summary judgement on the malicious prosecution count on the grounds that probable cause existed for the felony charge as a matter of law and alternatively on the ground that defendants McLaughlin and Champion relied on the advice of the Prosecuting Attorney.

The standard of review in these cases is well settled. Summary judgment should be granted only when it is clear that there are no genuine issues of material fact to be resolved. If there is any doubt as to whether there are issues to be tried, the motion should be denied. In this case the defendants, as the moving parties, bore the burden of showing that there were no genuine issues of material fact. Plaintiff is entitled to have all doubts and inferences resolved in his favor, and summary judgment is not proper if reasonable minds could reach different conclusions when given the facts. Tullock v. Eck, 311 Ark. 564, 845 S.W.2d 517 (1993).

Plaintiff contends the trial court erred in granting summary judgment on the breach of contract count because there is a dispute of a material fact about the failure of consideration, and there is also an issue of material fact concerning duress. We first address the failure of consideration. Defendants contend that plaintiff, as an agent, was already bound by contract with Westport Trucking to deliver the load to Sam's in Houston, and therefore, the subsequent agreement with plaintiff was without consideration. The matter is clearly in dispute. The lease contract between plaintiff's father, Floyd Cox, and Westport Trucking provides that "Lessor [Floyd Cox], his drivers, and/or helpers, are not the agents, employees, or servants of Lessee." Plaintiff was one of lessor's "drivers." Even if the plaintiff might be called Westport Trucking's agent, the law is well established that an agent is not liable to a third party for a contractual obligation made by a disclosed principal unless the agent is specifically named in the contract and there is evidence of his intent to be bound. Schulze v. Price, 213 Ark. 732, 213 S.W.2d 365 (1948).

The proof submitted showed that plaintiff could have been released from his obligation to drive the load to Houston because of a failure of consideration on the part of Westport Trucking, or it might amount to anticipatory repudiation. It is true that, as a general rule, when a party performs an obligation under a pre-existing contract, the law will regard his demand for additional benefits as void for failure of consideration. See 3 Samuel Williston, A Treatise on the Law of Contracts § 7:36 at 569 (4th ed. 1992). However, we have held that the failure of one party to perform can excuse the other from his obligation, Stocker v. Hall, 269 Ark. 468, 472, 602 S.W.2d 662, 665 (1980), and, we recognize that, when a party to a contract has, either by words or conduct, definitely manifested an intention not to perform, the other party may treat the contract as ended. Stocker, supra; Spencer Medicine Co. v. Hall, 78 Ark. 336, 93 S.W. 985 (1906). Thus, the proof submitted contains facts by which reasonable minds might conclude that plaintiff was not under a pre-existing duty to deliver the load and therefore was free to negotiate a new contract with defendants. Further, the facts are clearly in dispute as to whether the agreement was breached since plaintiff states that he was to be paid when he delivered the load to the warehouse, and defendants respond that plaintiff was to be paid only after the pet food was unloaded.

The trial court also held that the contract between plaintiff and defendants was entered under duress. Again, reasonable minds could reach different conclusions on the facts proved. In order to establish duress that will justify voiding a contract, a party must show that he involuntarily accepted the terms of the opposing party, that the circumstances permitted no other alternative, and that the circumstances resulted from coercive acts by the opposing party. W.R. Grimshaw Co. v. Nevil C. Withrow Co., 248 F.2d 896 (8th Cir.1957), cert. denied, 356 U.S. 912, 78 S.Ct. 669, 2 L.Ed.2d 585 (1958); see also Oberstein v. Oberstein, 217 Ark. 80, 228 S.W.2d 615 (1950). Economic duress is generally recognized as a valid excuse for voiding a contract. See Restatement (Second) of Contracts, Topic 2, Introductory Note at 473-74; see also § 176. However, the party alleging duress must show more than a reluctance to accept the contract and the possibility of financial embarrassment. Grimshaw, 248 F.2d at 904, see also Rodgers v. Lyon, 256 Ark. 323, 507 S.W.2d 95 (1974). He must show that the duress resulted from the other party's wrongful and oppressive conduct, and not by his own necessity. Id. In addition, he must show that the wrongful conduct deprived him of his own free will and violation. Id.

We have no case in point, but, in a case similar to the one at bar, the Supreme Court of Alaska wrote:

Economic duress does not exist, however, merely because a person has been a victim of a wrongful act; in addition the...