Prendergast v. Craft

• Decision Date: 14 May 2008
• Docket Number: No. CA 06-1282.,CA 06-1282.
• Citation: 102 Ark. App. 237,284 S.W.3d 104
• Parties: Alan PRENDERGAST, Appellant, v. Leo CRAFT, et al., Appellees.
• Court: Arkansas Court of Appeals

284 S.W.3d 104

102 Ark. App. 237

Alan PRENDERGAST, Appellant, v. Leo CRAFT, et al., Appellees.

No. CA 06-1282.

Court of Appeals of Arkansas.

May 14, 2008.

Penix and Taylor: by Stephen L. Taylor, Springdale, for appellant.

Hixson & Daniels, PLLC: by Kenneth S. Hixson, Fayetteville, for appellees Leo and Kathleen Craft and Gayle Lyn Rutledge.

The Newman Law Firm: by Sue Ann V. Newman, for appellee Missouri Walnut, LLC.

Taylor Law Firm: by W.H. Taylor, for appellee Wyatt Williams d/b/a Long Valley Timber.

JOHN B. ROBBINS, Judge.

Appellant Alan Prendergast devised a scheme to cut and sell timber from lands owned by his sisters, appellees Kathleen Craft and Gayle Rutledge.¹ However, he did not have permission to do so. Prendergast contracted with appellee Wyatt Williams, d/b/a Long Valley Timber, to cut the timber. Williams, in turn, contracted to sell the harvested logs to appellee Missouri Walnut, LLC. Once the scheme was exposed, two suits, including cross-claims and counterclaims, were filed and later consolidated. A Benton County jury found Prendergast liable to each of the appellees and ordered him to pay $43,276.45 in compensatory damages and $85,000 in punitive damages to Missouri Walnut; $48,276.45 to the Crafts; and $15,000 in compensatory damages and $35,000 in punitive damages to Williams. The damages awarded to the Crafts were trebled pursuant to Ark.Code Ann. § 18-60-102 (Repl.2003). Prendergast raises three points on appeal, challenging the jury instructions on the measure of the Crafts' damages, the punitive damages awards to both Missouri Walnut and Williams, as well as the compensatory award to Williams. We affirm.

I. Facts and Proceedings in Circuit Court

Alan Prendergast entered into an agreement with Wyatt Williams under the terms of which Williams was to harvest certain walnut trees from property Prendergast represented was owned by him. Pursuant to this agreement, Prendergast signed a timber deed to Williams on January 21, 2005. This property was actually owned by the Crafts, and Prendergast later testified that he did not have the authority to sign the timber deed. Williams cut and harvested the walnut logs pursuant to their agreement. On January 26, 2005, Williams entered into a contract for Missouri Walnut to purchase the 808 walnut logs that had already been cut, set out, and identified. The purchase price was $43,276.45. Missouri Walnut paid for the logs on January 26, 2005. One check was payable to Williams in the amount of $18,310.58. The second payment was made to Prendergast in the amount of $24,965.87. Missouri Walnut did not have any direct contact with Prendergast, relying on communications from Williams concerning Prendergast's sale of the logs.

Subsequent to Missouri Walnut's payment for the logs, the Crafts informed Missouri Walnut that Prendergast did not have any ownership interest in the property and did not have their consent to the cutting or sale of the logs. The Crafts intended to sell the logs to other timber companies for approximately $40,000.

Neither Missouri Walnut nor Williams researched the Benton County real estate records to determine the ownership of the real estate prior to issuing the two checks to Prendergast and Williams. However, there was testimony from Williams and others in the timber industry that industry standards did not require such a title search.

On March 2, 2005, Missouri Walnut filed a complaint in replevin against the Crafts asserting that it was a "good faith purchaser" who had acquired good title to the 808 logs and was seeking to recover possession of the logs Williams had cut. Missouri Walnut later amended its complaint to seek, in the alternative, damages for the value of the logs. The Crafts filed an answer and counterclaim in which they generally denied the allegations of the complaint and sought treble damages for the injury to their land.

On March 11, 2005, Missouri Walnut filed a companion suit against Prendergast and Williams, asserting breach-of-contract claims against each and a fraud claim against Prendergast. The complaint sought damages in the amount of $43,276.45 (the amount Missouri Walnut paid for the logs) against each defendant. Missouri Walnut also asserted that Prendergast should be liable for punitive damages for the fraud claim. Williams and Prendergast each denied the material allegations of the complaint. In addition, Williams filed a cross-claim against Prendergast, seeking judgment for any amounts Williams might be ordered to pay Missouri Walnut, together with punitive damages. On May 8, 2006, Prendergast filed a cross-complaint against Williams, alleging that Williams was negligent in not waiting until Prendergast had obtained his sisters' permission before cutting the timber. The cross-complaint sought judgment for any amount Prendergast might be ordered to pay. The circuit court consolidated both cases for trial.

On July 8, 2005, the Crafts filed a cross-claim against Williams and Prendergast, alleging that Prendergast and Williams had trespassed across their lands and destroyed timber without permission. The cross-complaint sought damages of $43,276.45 for the value of the timber, together with the $5,000 cost of restoring the land.

The case was tried to a jury over two days. The jury returned a verdict by answering a series of interrogatories. The interrogatories were as follows:

INTERROGATORY NO. 1 As between Missouri Walnut, LLC and Alan Prendergast, we find in favor of Alan Prendergast. ANSWER: Not answered

INTERROGATORY NO. 2 As between Missouri Walnut, LLC and Alan Prendergast, we find Alan Prendergast liable to Missouri Walnut, LLC in the amount of $43,276.45. This interrogatory was signed by the foreman.

INTERROGATORY NO. 3 As between Missouri Walnut, LLC and Wyatt Williams, d/b/a Long Valley Timber, we find in favor of Wyatt Williams, d/b/a Long Valley Timber. This interrogatory was signed by the foreman.

INTERROGATORY NO. 4 As between Missouri Walnut, LLC and Wyatt Williams, d/b/a Long Valley Timber, we find Wyatt Williams, d/b/a Long Valley Timber, liable to Missouri Walnut, LLC in the amount of $___. ANSWER: Not answered

INTERROGATORY NO. 5 As between Leo and Kathleen Craft and Gale Lyn Rutledge and Alan Prendergast, we find in favor of Alan Prendergast. ANSWER: Not answered

INTERROGATORY NO. 6 As between Leo and Kathleen Craft and Gale Lyn Rutledge and Alan Prendergast, we find Alan Prendergast liable to Leo and Kathleen Craft and Gale Lyn Rutledge in the amount of $48,276.45. This interrogatory was signed by the foreman.

INTERROGATORY NO. 7 As between Leo and Kathleen Craft and Gale Lyn Rutledge and Wyatt Williams, d/b/a Long Valley Timber, we find in favor of Wyatt Williams, d/b/a Long Valley Timber. This interrogatory was signed by nine jurors.

INTERROGATORY NO. 8 As between Leo and Kathleen Craft and Gale Lyn Rutledge and Wyatt Williams, d/b/a Long Valley Timber, we find Wyatt Williams, d/b/a Long Valley Timber, liable to Leo and Kathleen Craft and Gale Lyn Rutledge in the amount of $______. ANSWER: Not answered

INTERROGATORY NO. 9 As between Alan Prendergast and Wyatt Williams, d/b/a Long Valley Timber, we find in favor of Wyatt Williams, d/b/a Long Valley Timber. This interrogatory was signed by the foreman.

INTERROGATORY NO. 10 As between Wyatt Williams, d/b/a Long Valley Timber, and Alan Prendergast, we find Alan Prendergast liable to Wyatt Williams, d/b/a Long Valley Timber, in the amount of $15,000.00. This interrogatory was signed by nine jurors.

INTERROGATORY NO. 11 As between Wyatt Williams, d/b/a Long Valley Timber, and Alan Prendergast, we find in favor of Alan Prendergast. ANSWER: Not answered

INTERROGATORY NO. 12 As between Alan Prendergast and Wyatt Williams, d/b/a Long Valley Timber, we find Wyatt Williams, d/b/a Long Valley Timber, liable to Alan Prendergast in the amount of $_______. ANSWER: Not answered

INTERROGATORY NO. 13 Do you find Wyatt Williams, d/b/a Long Valley Timber, is entitled to recover punitive damages from Alan Prendergast? ANSWER: Yes This interrogatory was signed by ten jurors.

INTERROGATORY NO. 14 If your answer to Interrogatory No. 13 is yes, state the amount of punitive damages which Wyatt Williams, d/b/a Long Valley Timber, should recover from Alan Prendergast. ANSWER: $35,000.00 This interrogatory was signed by ten jurors.

INTERROGATORY NO. 15 Do you find that Missouri Walnut LLC is entitled to recover punitive damages from Alan Prendergast? ANSWER: Yes This interrogatory was signed by ten jurors.

INTERROGATORY NO. 16 If your answer to Interrogatory No. 15 is yes, state the amount of punitive damages which Missouri Walnut, LLC should recover from Alan Prendergast. ANSWER: $85,000.00 This interrogatory was signed by ten jurors.

Pursuant to agreement of the parties, the circuit court then determined that Prendergast was guilty of willful misconduct so that the damages awarded to the Crafts should be trebled pursuant to Ark.Code Ann. § 18-60-102. The court reduced the award to the Crafts by $20,005, the amount a third party offered to pay for the logs. Judgment was entered accordingly on June 1, 2006. Prendergast filed a motion for new trial and a motion for judgment notwithstanding the verdict on June 12, 2006, alleging that he was entitled to a new trial to reduce the excessive damages award and to adjust the jury's error in the assessment of damages; that the verdicts were clearly against the preponderance of the evidence; and that the jury was improperly instructed as to the measure of damages. The motions were deemed denied and this appeal followed.²

Arguments on Appeal

A. Measure of damages

Prendergast first argues that the circuit court erred in refusing his proffered instruction taken from this court's decision in King v. Powell, 85 Ark.App. 212, 148 S.W.3d 792 (2004), as to the measure of damages. It is well settled that this court will not reverse a circuit court's refusal to give a proffered jury instruction...