Deck House, Inc. v. Link

• Decision Date: 14 February 2007
• Docket Number: No. CA 06-264.,CA 06-264.
• Citation: Deck House, Inc. v. Link, 98 Ark. App. 17, 249 S.W.3d 817 (Ark. App. 2007)
• Court: Arkansas Court of Appeals
• Parties: DECK HOUSE, INC., Appellant, v. Scott LINK, Albena Link, Charles Cooper, and Advanced Construction & Painting Co., Appellees.

249 S.W.3d 817

98 Ark. App. 17

DECK HOUSE, INC., Appellant, v.Scott LINK, Albena Link, Charles Cooper, and Advanced Construction & Painting Co., Appellees.

No. CA 06-264.

Court of Appeals of Arkansas.

February 14, 2007.

Rehearing Denied April 4, 2007.

Friday, Eldredge & Clark, LLP, by: Jeffrey H. Moore, Little Rock, AR, for appellant.

Taylor Law Firm, by: Scott E. Smith and Sonya J. Dodson, Fayetteville, AR, for appellees Scott and C. Albena Link.

WENDELL L. GRIFFEN, Judge.

Deck House, Inc., appeals from the grant of directed verdicts in favor of appellees Scott and Albena Link, Charles Cooper, and Advanced Construction & Painting Company.On appeal, appellant argues that the trial court erred in 1) directing a verdict in favor of the Links in its breach of contract claim and in improperly applying the "tacit-agreement test"; and 2) directing a verdict in favor of Cooper and Advanced Construction upon a finding that there was no evidence of intentional or improper conduct to support a verdict for tortious interference with a business expectancy.We affirm.

Appellees Scott and Albena Link planned to build a house on a lot that they own and entered into a "Pre-Contract Service Agreement" with appellant Deck House, which supplies plans and materials for post-and-beam structures, to purchase architectural drawings for $3000 from appellant.The contract provided:

The Purchaser desires to construct a Deck House incorporating building components to be manufactured and/or supplied by Deck House, Incorporated.Signing this agreement does not commit you to purchase a house package, but does authorize Deck House, Incorporated, to prepare for you the services [the architectural drawings] outlined below.

It also stated that, if the Links elected to proceed with construction of a Deck House, the $3000 fee would be applied against the amount due under a "Deck House Component Package Contract"; if not, appellant would retain the fee.The contract also stated:

4.All drawings, including those prepared by the Deck House Representative, and other materials supplied to the Purchaser will remain the sole and exclusive property of Deck House, Incorporated and under no circumstances shall the Purchaser be deemed to have acquired any rights to the same.The Purchaser agrees that such drawings and materials may not be used, in whole or in part, for any other purpose than in the construction of one Deck House utilizing a Deck House Component Package.Any other use of such drawings and materials may be treated by Deck House, Incorporated, as an unauthorized appropriation of same by Purchaser.Uses constituting an unauthorized appropriation will include, without limitation: a) the copying of any part of the drawings b) the utilization or partial utilization of the drawings for the construction of an architecturally related residence, or, c) any transfer of the drawings to another person without written authorization from Deck House, Incorporated.

Deck House contacted appelleeCharles Cooper, who owns appelleeAdvanced Construction & Painting Company, and requested that he submit a bid to the Links for construction of a Deck House, using appellant's plans and materials.After meeting in October 1999 with Cooper and Ed Fanning, appellant's project manager, about the cost of constructing a Deck House (at least $270,000), Scott Link sent a letter on December 1, 1999, to David Schmidt, a draftsman, in which he stated:

In October, after I met with Mike Cooper, I spoke with you via telephone regarding using house plans I had made using Deck House as a base to develop plans for a non-post and beam house.You estimated that the cost of developing plans should be around 60 to 70 cents per square foot.I then spoke with Mike and he was going to give you a set of plans he had used to estimate construction costs and I was to call you and we would the [sic] proceed with the house plans.

Enclosed is a set of the last house plans from Deck House.We think these are a good base for development of a house that my wife and I want to build on our property at Beaver Lake.The cost of building this home using the Deck House post and beam construction is too expensive.We want to build our home for a cost around $200,000 and would like for Mike Cooper to do the construction.

Our thoughts on changes to the plan include:

1.Make Breakfast room larger, say 9' to 10' inside dimensions.

2.Kitchen sink centered on counter with dishwasher to the right side.

3.Add a small sink in counter to the right of the stove.

4. 8' ceilings through out house except for living room which we would like to be cathedral between 10' & 11'.

5.Move fireplace to a corner unit, extend wall across room to approximate previous location of fireplace.

6.If cost effective reduce length of living room from 28 to 26.

• taking a foot from study & from entry? or

• reworking layout of entry, lav. & study?

7.House must be wheelchair accessible. 36 doors except the half bath.

8.Mike Cooper has suggestions for siding, window and other changes.

We hope this will give us a good starting point for discussing the development and productions of the house plans. . . .

I have meet [sic] with Mike, seen and like his work and respect his thoughts on building a home.I would like to involve Mike in the development of the plans where ever it is helpful if he is agreeable.

Albena and I look forward to working with you and developing plans for a home that we can afford to build.

Appellant later became aware of the fact that, using plans drafted by Schmidt, Cooper built a less expensive "stick-built" house for the Links that was, without dispute, similar to appellant's plans.In its May 27, 2004, amended complaint against appellees, appellant alleged that the Links had breached their contract by failing to return the architectural drawings when they decided not to proceed with the building of a Deck House; by transferring those drawings to Schmidt for alteration; and by using the drawings in the construction of a structure that did not utilize the Deck House Component Package.In its second count, appellant asserted that Cooper and Advanced Construction "acted with knowledge of the valid contractual relationship and business expectancy between Deck House and the Links."

The case proceeded to trial by jury on October 31 and November 1, 2005.At the close of appellant's case, all appellees moved for directed verdict and the trial court granted their motions.It explained its decision as to the claim against the Links as follows:

[T]he Court finds that a contract has been proven that required the plaintiff to prepare plans and drawings for the consideration of $3,000.That they did do that.That Mr. and Mrs. Link received those plans and drawings, and that they made a utilization or partial utilization of the drawings for the construction of an architecturally related residence from which a jury could conclude that to be a breach of contract, and that, in this case, the plaintiff has shown consequential damages from which they had an expectancy or reliance to make a profit.That lost profits are recognized as a type of consequential damages.

The really hard part, for me, is to determine what is fairly within the contemplation of the parties.The contract, as drawn by Deck House, does not have any language in it to reflect the contemplation of the parties.In fact, the second sentence of the agreement says, signing this agreement does not commit you to purchase a house package.

I find that the damages that were fairly within the contemplation of the parties, as presented by the evidence in this case, is the reasonable value of the architectural services provided by Deck House in — I understand that they're not in the business of providing architectural plans and drawings only, but their contract contemplates the selling of a house package, but when they also say in their agreement that signing this agreement does not commit you to purchase a house package, then I cannot find that it is within the contemplation of the parties as to what the damages would be in the event of an unauthorized appropriation, other than the actual value of drawing the architectural design of the house and the value of providing the ideas for the layout of the house, the floor plan, and that the lost profit for providing a house package was not within the contemplation of the parties in the event of a wrongful use of the drawings.

All that being said, then it is my view that, under the law, the plaintiff has failed to prove damages, and that a directed verdict should be issued in favor of Mr. and Mrs. Link. . . .

The trial court made the following findings from the bench regarding the motion for directed verdict by Cooper and Advanced Construction:

Apparently, after that contract had been fully performed by Deck House, the evidence then goes on to show that Deck House contacted Mr. Cooper and his corporation to submit a bid to the Links to construct — for using a house package provided by Deck House to construct the Deck House product.Mr Cooper and his company apparently provided a bid, and the evidence is that the Deck House package price of $138,502 combined with the bid by Mr. Cooper and his company to show a completed construction price of $270,000.

There is no evidence that Mr. Cooper's bid was inflated in any way, was not made in good faith, was more expensive that it should have been, or was, in any way, calculated to cause the Links not to accept the construction price contemplated by the Deck House Pre-contract Service Agreement or calculated to convince the Links to enter into the second phase of the process, wherein they would commit to spend money to acquire the architectural drawings, based on the evidence of the Deck House procedures in these kinds of cases.That, in fact, the Links, based on the bid estimate by Mr. Cooper and his company, determined that they were electing not...