Crittenden Cnty. v. Davis

• Decision Date: 06 November 2013
• Docket Number: No. CV–12–726.,CV–12–726.
• Citation: 430 S.W.3d 172,2013 Ark. App. 655
• Parties: CRITTENDEN COUNTY, Appellant v. Barry DAVIS, Appellee.
• Court: Arkansas Court of Appeals

2013 Ark. App. 655

430 S.W.3d 172

CRITTENDEN COUNTY, Appellant

v.Barry DAVIS, Appellee.

No. CV–12–726.

Court of Appeals of Arkansas.

Nov. 6, 2013.

Fogleman, Rogers & Coe, by: Joe M. Rogers, for appellant.

Tom Donaldson; and Robert S. Tschiemer, Mayflower, for appellee.

KENNETH S. HIXSON, Judge.

This is a contract interpretation case. The contract was not ambiguous. The trial court considered post-contract course of conduct between the parties to determine the meaning of the unambiguous contract and awarded Barry Davis a judgment for breach of contract in the amount of $5,055.20 plus pre- and postjudgment interest and attorney's fees. Crittenden County appeals, and we reverse.

Richard Busby was the sheriff of Crittenden County and appellee, Barry Davis, was a deputy. In July 2002, Davis was assigned to drug-interdiction duties. Davis became involved in a scheme with other law enforcement officers where they would “skim” money off the top from drug money seized from arrests. Davis was indicted by a federal grand jury in case number CR127. Davis was suspended from employment with the Crittenden County Sheriff's Department and on July 30, 2002, Sheriff Busby sent Davis a letter that is at the heart of this appeal. The key provisions state:

This indictment and the investigation that preceded it has created a lot of negative publicity for you and the Crittenden County Sheriff's Office Drug Task Force, that in my judgment for the good of the Sheriff's Department and for the effectiveness of the other Crittenden County Officers makes it necessary for you to be relieved of your duties as a Deputy Sheriff for Crittenden County so long as you are under indictment for these charges.

I am therefore proposing that you be suspended without pay pending your trial on this indictment. You will be eligible to continue your insurance coverage (individual or family) with the county during this period conditioned upon your paying your part of the premium when it comes due. You will be allowed to draw any accrued vacation time that becomes due. In the event that you are acquitted of these charges you will receive backpay at your regular salary plus you will accrue vacation pay during the period. If you are convicted you will be discharged without any backpay or reinstatement of other benefits. (Emphasis added.)

Davis signed the agreement stating that he accepted the suspension without pay on these terms and conditions.

Within a couple of months, on September 24, 2002, the federal prosecutor moved to dismiss the indictment in case number CR127, and that indictment was dismissed on September 26, 2002. On September 25, Davis was allowed to return to work as a deputy. Davis received regular pay. He was not paid the backpay for the period of suspension during the pendency of CR127. After returning to work for three weeks, on October 16, 2002, Davis was indicted again and was charged with confiscating money from suspected interstate drug traffic and not reporting all of the money confiscated on three different occasions, as well as possession of a stolen firearm. This case was assigned case number CR181.

On October 31, 2002, Sheriff Busby prepared another letter agreement whereby Davis would be suspended without pay while under indictment and, in the event he was acquitted of the charges, he would receive backpay for the period of his suspension. However, if he was convicted, he would be discharged without backpay. This agreement was virtually identical to the July 30, 2002 agreement for the previous indictment. Davis accepted these conditions and was again suspended.

Four days later, on November 4, 2002, Davis was indicted again by the federal grand jury and charged, along with his wife and his father, with conspiring with each other to mislead investigators and the grand jury investigating whether Davis was spending sums in excess of his means as evidence of him taking money from suspected interstate drug traffickers. This case was assigned case number CR187.

A superseding indictment was issued in case number CR181 on July 2, 2003, charging Davis with three counts of illegal possession of a firearm and making false statements regarding the firearms. There were two on-going indictments pending. On July 25, 2003, Davis pleaded guilty to Count IV in case number CR187 in consideration of the government agreeing to dismiss the remaining counts in case number CR187, dismissing the charges in case number CR181, and not seeking forfeiture of his residence.

Upon this plea being entered, Davis was found guilty of mail fraud, a Class C felony, and on November 17, 2003, he was sentenced to serve six months in community confinement and three-years' probation. Following his conviction, Davis was terminated as a deputy sheriff without payment of any backpay.

Almost two years later on September 9, 2005, Davis filed a civil lawsuit against Crittenden County. The complaint set forth the background leading up to the July 30, 2002 letter agreement, and alleged that Davis should have been paid backpay and other sums pursuant to that agreement. Davis sought the sum of $5,055.20, together with pre- and postjudgment interest and reasonable attorney's fees. The County answered, denying liability on the basis that it was not required to pay Davis any backpay under the parties' agreement.

Seven years later on March 5, 2012, the case proceeded to a bench trial before the circuit court. Barry Davis testified that he was indicted in July 2002 and that he and Sheriff Busby ultimately entered into the July 30, 2002 agreement. Davis testified that the agreement set forth what would happen if he were convicted or acquitted. Davis did not testify to what would happen if the indictment was dismissed. According to Davis, after the indictment was dismissed on September 24, 2002, he went back to work the next day. After dismissal of the first indictment, Davis worked for approximately three weeks before he was indicted again. Davis received his regular pay during this three-week period. Davis claimed that he was entitled to backpay for his period of the first suspension from July 30 through September 24, 2002. Davis said that he was not seeking any relief for the second suspension.

Sheriff Busby testified that he entered into the July 30, 2002 letter agreement with Davis. After the first indictment was dismissed, Davis returned to work on September 25, 2002, and Busby testified that “[i]f Mr. Davis had been convicted of something I would not have put him back to work.” The sheriff said that when Davis was indicted, his position was that Davis could not work while under indictment and he suspended Davis. Busby said that his intention was that if Davis was exonerated from all the charges, he would put Davis back to work and pay backpay. He said that Davis returned to work for a brief time before being indicted and was suspended again. Busby said that he felt that he was very fair with Davis, and he thought that he carried out their bargain. Busby said that he did not think Davis was entitled to any backpay under the July 30, 2002 agreement. There was no testimony regarding the effects of a dismissal of the federal indictment.

The circuit court ruled from the bench and found that there were two separate agreements (the July 30, 2002 agreement and the October 31, 2002 agreement) because no one could have predicted there would be a subsequent indictment. The court found that the parties, by their conduct, treated the dismissal of the first indictment as tantamount to an acquittal when Davis returned to work following dismissal of that indictment. The trial court thus found that, pursuant to the July 30, 2002 agreement, Davis should have been paid backpay for the period of suspension related to the initial indictment in case number CR127. Prior to the judgment being entered, the County filed a motion for reconsideration, which the trial court denied. On May 10, 2012, the trial court entered an order awarding the amount sued for in the complaint, and also awarded Davis attorney's fees, prejudgment interest, and postjudgment interest.

On appeal, the County argues that the circuit court erred in (1) granting Davis backpay because Davis was not acquitted on charges set forth in the original indictment; (2) not construing the two letter agreements together to find that the County and Davis had agreed that Davis would be discharged without backpay if he were convicted of any charges set forth in the indictments against him; (3) its award of attorney's fees because Davis should not have prevailed on his claim for backpay, and the court also failed to set forth the basis for its award of fees; (4) its award of postjudgment interest; and (5) its award of prejudgment interest.

The County's first two points challenge the circuit court's determination that Davis was entitled to backpay under the July 30, 2002 letter agreement. In civil bench trials, the standard of review on appeal is whether the circuit court's findings were clearly erroneous or clearly against a preponderance of the evidence. Rooke v. Spickelmier, 2009 Ark. App. 155, 314 S.W.3d 718. A finding is clearly erroneous when, although there is evidence to support it, the reviewing court, on the entire evidence, is left with a firm conviction that a mistake has been committed. Id.

This appeal also involves our review of the circuit court's construction of the terms of the letter agreement. Accordingly, our standard of review for contract interpretation is implicated as well. As explained by our supreme court in Wal–Mart Stores, Inc. v. Coughlin, 369 Ark. 365, 371, 255 S.W.3d 424, 429 (2007):

Our standard of review for contract interpretation has been stated often:

The first rule of interpretation of a contract is to give to the language employed the meaning that the parties intended. In construing any contract, we must consider the sense and meaning of the words used by the parties as they are taken and...