Crown Custom Homes Inc v. Buchanan Serv. Inc

• Court: Arkansas Court of Appeals
• Writing for the Court: KAREN R. BAKER
• Citation: Crown Custom Homes, Inc. v. Buchanan Serv., Inc., 2009 Ark. App. 442, 319 S.W.3d 285 (Ark. App. 2009)
• Decision Date: 27 May 2009
• Docket Number: No. CA 09-20.,CA 09-20.
• Parties: CROWN CUSTOM HOMES, INC., Appellant,v.BUCHANAN SERVICES, INC., Appellee.

2009 Ark. App. 442

319 S.W.3d 285

CROWN CUSTOM HOMES, INC., Appellant,v.BUCHANAN SERVICES, INC., Appellee.

No. CA 09-20.

Court of Appeals of Arkansas.

May 27, 2009.

COPYRIGHT MATERIAL OMITTED

Nolan, Caddell & Reynolds, P.A., Rogers, by: Bill G. Horton, Fort Smith, for appellant.

The Mulkey Attorney's Group, P.A., by: Bruce L. Mulkey; Rogers, and The Kester Law Firm, by: Charles M. Kester and Dawn C. Egan, Fayetteville, for appellee.

KAREN R. BAKER, Judge.

Appellant, Crown Custom Homes, Inc., appeals from a decision by the Benton County Circuit Court in favor of appellee, Buchanan Services, Inc., in the amount of $2,100, plus attorney's fees of $2,000 and costs. Appellant asserts on appeal that the trial court erred in two respects: first, finding that appellant breached a contract, and second, in awarding attorney's fees. Appellant further asserted that there was no enforceable contract between the two parties and that there was no basis for a quasi-contract or promissory estoppel. We affirm the trial court's decision.

Appellant, Crown Custom Homes, Inc. (Crown), is a homebuilder. Appellee, Buchanan Services, Inc., provides soil analysis and surveys for builders, real estate companies, and others in the construction industry in Northwest Arkansas. Buchanan and Crown had an ongoing business relationship. Testimony showed that until the transaction at issue, Crown had done in excess of $100,000 worth of business with Buchanan.

Crown also participated in construction projects with other home builders. Particularly, Crown was participating in a construction project with Hollis Cunningham of Cunningham Contractors, LLC. During this particular construction project, Jerry Hawkins of Crown introduced Mr. Cunningham to Mr. Buchanan in a meeting that took place at Buchanan's office. Representatives of all three business entities were present at the meeting.

Following the meeting, a work order was issued and was faxed from Crown's place of business to Buchanan. Upon receipt, Buchanan began and completed the services pursuant to the work order. Testimony showed that the “original invoices were made to Jerry Hawkins care of Crown Custom Homes,” and the bill for the services was sent to Crown. Crown did not remit payment for the services rendered by Buchanan. In September 2006, Hawkins directed Buchanan's bookkeeper, Kimberly Snyder, to send the invoice directly to Cunningham. She did, but despite Cunningham's statement that he had “relayed payment” of $2,000 and that he would send the balance in January 2007, Buchanan never received payment from Cunningham. In March or April 2007, Buchanan sued Cunningham in Missouri for failure to pay. Due to a failure to obtain proper service, the suit was unsuccessful.

Ms. Snyder testified that when a survey was requested, she was typically only aware of the person requesting the survey and not necessarily informed of the name of the person who owned the lots. She first learned of the request for services at issue here when she received the fax from Crown. She testified as to the customary course of dealing between Crown and Buchanan. For example, during the years of doing business with Crown, she had received other orders from Crown via facsimile. She explained that it was customary for Buchanan to begin the work upon receipt of the faxed request. It was also customary to bill Crown for the services when completed.

She testified that Jerry Hawkins specifically told her that he was not going to pay for the surveys because Cunningham owed him money and he “was not paying any more money for Cunningham lots.” This was the first instance where Crown had not paid an invoice. She based her belief that Crown was responsible for the invoices on the fact that she received a fax from Crown for the job and “that was how every other job had been billed, and [Crown] paid on every other job.” On redirect, Kimberly testified that when the surveys at issue were completed, she called Jerry Hawkins; she did not send the surveys to Cunningham.

Bobby Buchanan of Buchanan Services, Inc., testified that generally, when he has a new customer he has them fill out an order form. From that point on, the transactions were much more casual “by telephone, fax or whatever.” He stated that Jerry Hawkins had always promptly paid his invoices, until the last transaction. Even when Crown did not actually own the lots, when Buchanan received an order from Crown, he completed the work. Like Ms. Snyder, he generally did not know who owned the lots on which he was performing the surveys. On redirect, Buchanan testified that as of the day he met Mr. Cunningham, he did not know enough about him to take an order from him, and “Hollis did not make an order.”

Jerry Hawkins testified that he introduced Hollis Cunningham and Bobby Buchanan at a meeting that took place at Buchanan's office. He testified that the lots at issue were owned not by Crown, but by Hollis Cunningham. It was “clear at the meeting that it was Hollis Cunningham's work,” and he was only there to advise Cunningham. He denied ordering any lots surveyed or authorizing any work to be done on behalf of Cunningham. He admitted that he had submitted payment for the surveys on three of Cunningham's lots; however, he stated that it was inadvertent. When he discovered the mistake, he called Ms. Snyder and directed her to credit him for the payment. He also confirmed that he requested that Ms. Snyder send the bill to Mr. Cunningham for the work. He stated that Cunningham owed him approximately $300,000.

At the conclusion of the hearing, the trial court entered a decision in favor of appellee Buchanan, awarding damages in the amount of $2,100, attorney's fees in the amount of $2,000, and costs. This appeal followed.

In bench trials, the standard of review on appeal is whether the trial court's findings were clearly erroneous or clearly against the preponderance of the evidence. Smith v. Eisen, 97 Ark.App. 130, 245 S.W.3d 160 (2006) (citing Anderson v. Stewart, 366 Ark. 203, 234 S.W.3d 295 (2006)). We give due deference to the superior position of the trial court to determine the credibility of the witnesses and the weight to be accorded their testimony. Id. Further, it is within the province of the trier of fact to resolve conflicting testimony. Id.

The issue before us is whether there was an agreement between Crown and Buchanan. The essential elements of a contract are (1) competent parties, (2) subject matter, (3) legal consideration, (4) mutual agreement, (5) mutual obligations. Hot Spring County Med. Ctr. v. Arkansas Radiology Affiliates, P.A., 103 Ark.App. 252, 288 S.W.3d 676 (2008) (citing Foundation Telecomm., Inc. v. Moe Studio, Inc., 341 Ark. 231, 16 S.W.3d 531 (2000)). The only element challenged by Crown is the element of mutual agreement.

In attempting to discern the real character of a transaction, the trial court should consider all of the written and oral evidence and focus on the intent of the parties in the light of all attendant circumstances. Smith v. Eisen, 97 Ark.App. 130, 245 S.W.3d 160 (2006) (citing Bright v. Gass, 38 Ark.App. 71, 831 S.W.2d 149 (1992)). In carrying out the true intent of the parties, the trial court properly looks beyond the mere form in which the transaction was clothed and considers all the facts and circumstances of the transaction, the conduct of the parties, and their relations to one another and to the subject matter. Id.

There can be no doubt that the parties' prior course of dealing is to be considered in determining whether a tacit but still actual contract comes into existence. Jones v. Donovan, 244 Ark. 474, 426 S.W.2d 390 (1968) (citing Corbin Contracts, § 97 (1963); Southern Pub. Ass'n v. Clements Paper Co., 139 Tenn. 429, 201 S.W. 745 (1918)). In Jones, the court stated:

Justice Holmes put his finger on the point in Hobbs v. Massasoit Whip Co., 158 Mass. 194, 33 N.E. 495 (1893). There the plaintiff, a trapper, had sent eel skins to the defendant, a manufacturing company, on four or five occasions. Although there was no contract between the two the defendant had accepted and paid for the skins. The litigation arose when the defendant received another batch of skins and kept them for some time before they were destroyed. In holding that the manufacturer was bound by contract to pay for the skins the court summarized the law in a sentence: “The proposition stands on the general principle that conduct which imports acceptance or assent is acceptance or assent, in the view of the law whatever may have been the actual state of mind of the party.”

Jones, 244 Ark. at 477, 426 S.W.2d at 392. An implied contract is proven by circumstances showing the parties intended to contract or by circumstances showing the general course of dealing between the parties. Steed v. Busby, 268 Ark. 1, 593 S.W.2d 34 (1980).

Whether there was mutual agreement between the parties was a question of fact for the trial judge to determine. Conclusions concerning the true intent of the parties primarily involve issues of fact, and the trial court's decision on such cases will not be reversed unless they are clearly erroneous. Smith v. Eisen, supra. Where the issue is one of the credibility of interested parties whose testimony is in direct conflict, we defer to the trial judge's decision. Taylor v.George, 92 Ark.App. 264, 212 S.W.3d 17 (2005) (citing Estate of Sabbs v. Cole, 57 Ark.App. 179, 944 S.W.2d 123 (1997)).

Here, the evidence established that the parties had done a significant amount of business with one another in the recent past. Testimony further showed that it was customary for the parties to send work orders via facsimile, and likewise it was customary for Buchanan to complete the work upon receipt of the fax from Crown. It was undisputed that Buchanan's office informed Crown when the work was complete and sent Crown an invoice. Moreover, Mr. Buchanan testified that he was not well acquainted with Mr. Cunningham and would not have...