Prudential Ins. Co. of America v. Stratton

• Court: Arkansas Court of Appeals
• Writing for the Court: MAYFIELD
• Citation: Prudential Ins. Co. of America v. Stratton, 685 S.W.2d 818, 14 Ark.App. 145 (Ark. App. 1985)
• Decision Date: 13 March 1985
• Docket Number: No. CA,CA
• Parties: PRUDENTIAL INSURANCE COMPANY OF AMERICA, Appellant, v. Gary STRATTON, Jr. and Bill Stratton, Appellees. 84-230.

Page 818

685 S.W.2d 818

14 Ark.App. 145

PRUDENTIAL INSURANCE COMPANY OF AMERICA, Appellant, v. Gary STRATTON, Jr. and Bill Stratton, Appellees.

No. CA 84-230.

Court of Appeals of Arkansas Division II.

March 13, 1985.

David Solomon, Helena, for appellant.

Garland Q. Ridenour, Helena, for appellees.

MAYFIELD, Judge.

The appellees filed suit against the appellant seeking to recover on a written contract under which they were to clear approximately 160 acres of land owned by appellant. Appellees, a father and son partnership, were to be paid $250.00 per acre to "cut, pile and burn all trees, brush and other vegetation either standing or fallen" on the land. The contract was signed on September 10, 1981. Work was to commence "immediately" and be completed "no later" than November 25, 1981.

The appellant contends that on November 24, 1981, the appellees were advised that it was obvious they were not going to be able to finish the job by the next day and, therefore, other alternatives would be found to get the land cleared. However, the appellees contend that they were "fired" and told to stop work immediately and remove their equipment from the land. In either event, the appellees did no more work after the "message" was delivered, but subsequently filed suit alleging they were entitled to judgment for the "loss of profits" sustained by the "breach" of their contract. The appellant denied these allegations and filed a cross-claim based on the contention that appellees' failure to complete the work on time caused appellant loss of profits as the land was not ready for the planting of crops in the fall of 1981 or the spring of 1982. The jury found for the appellees and against the appellant and fixed appellees' recovery at $24,000.00, plus interest. We reverse and remand for a new trial.

Appellant's first argument on appeal is that its motion for directed verdict should have been granted. This argument is based in part upon the proposition that the appellees admit it would have taken them five days after November 25 to have completed the job. Since appellees had already been paid $24,000.00 for the work they had done, it is appellant's position that appellees' inability to complete the contract by the November 25 deadline means they are not entitled to be paid any additional amount.

Appellees point to their testimony that on November 24 they had already completed more than 80% of the work to be done under the contract; that they were "fired" before noon on the 24th and, therefore, had a day and a half left on their contract; that appellant granted them the right to sell the timber, but had also granted that right to a third party, and appellees were delayed in their work for three weeks while appellant was resolving this matter; and that there were three weeks of rain and inclement weather during the contract period in which their heavy equipment could not work. They contend this evidence made a breach of contract issue for the jury to decide.

We consider the appellant's argument that it was entitled to a directed verdict together with its argument that the court erred in one of the instructions given to the jury over appellant's objections. The instruction involved told the jury that if appellant breached the contract, the appellees were entitled to recover the unpaid balance of the contract price less any costs they would have incurred in completing the work required by the contract. The appellant says this instruction is wrong because the undisputed evidence shows the appellees could not have completed the contract by November 25; thus, the appellant did not breach the contract and, furthermore, the correct measure of any damage to which the appellees could have been entitled would be on a quantum meruit basis.

We think the court's instruction was erroneous for the reasons stated by appellant. In the first place, the evidence that the appellees lost three weeks of working time as a result of the timber rights dispute should not have been considered by the jury. The appellant filed a motion in limine alleging that such testimony would violate the parol evidence rule and should not be admitted into evidence. The court ruled that under the cases of Lane v. Pfeifer, 264 Ark. 162, 568 S.W.2d 212 (1978) and Sterling v. Landis, 9 Ark.App. 290, 658 S.W.2d 429 (1983), the evidence as to the timber rights dispute would not be admissible to vary the terms of the contract between the appellant and the appellees but would be admissible as proof of consequential damages sustained by the appellees who claimed they had the right to sell the timber cut from appellant's land. ¹ When this evidence was offered during the trial, the appellant again objected to its admissibility and the court again made the ruling it had made on the motion in limine.

As we view the matter, the effect of the court's ruling was to hold that the evidence was not admissible on the breach of contract issue because it would violate the parol evidence rule. To that extent, we think that ruling was correct. Sterling and Lane both recognize that parol evidence is not admissible to vary the terms of a written instrument, but Lane held the oral evidence there pertained to a collateral fact about which the written agreement was silent, and Sterling held the oral agreement there was made subsequent to the written agreement and did not violate the parol evidence rule for that reason. In the instant case, however, Mr. Bill Stratton testified that there was a discussion about who owned the timber rights prior to the signing of the written contract. Appellant's representative testified to the same effect. Mr. Gary Stratton testified that he at no time discussed the matter with appellant's representative but admitted that his father, Mr. Bill Stratton, did. Moreover, the written contract itself specifically provides that the appellees will "cut, pile and burn all trees, brush and other vegetation either standing or fallen" on the land. Thus, the right, claimed by the appellees, to sell this timber would not be a collateral right about which the written agreement is silent.

We think it clear that evidence by the appellees that they lost three weeks of working time as a result of appellant's dispute as to the ownership of the timber on the land could not be considered by the jury on the issue of whether the appellant breached the contract with the appellees. That testimony violated the parol evidence rule and the court on two occasions held it inadmissible because of that reason.

Nor do we find any other evidence in the record from which the jury could find that the appellant breached the contract with appellees. The contract dated September 10 clearly provided that work would start immediately and be completed by November 25. It is admitted that this eleven- week period was sufficient but for the three weeks lost over the dispute about the timber rights and the three weeks lost due to inclement weather. Appellees cite no authority to support their contention about the weather. We have found a case, however, involving the construction of a golf course, that held substantial erosion from a torrential rainfall was insufficient to grant relief under the doctrine of "commercial frustration," Pete Smith Company v. City of El Dorado, 258 Ark. 862, 529 S.W.2d 147 (1975); and a case holding that freezing temperatures in Missouri during January, February, and March were to be expected and did not afford relief from failure to perform on a contract, Missouri Pacific Railroad Co. v. Terrell, 410 S.W.2d 356 (Mo.App.1966). Since neither the evidence about the three weeks they claimed to have lost as a result of the dispute over title to the timber nor the evidence about the three weeks they claimed to have lost due to the weather would permit a finding that appellees' time for performance was extended, the trial court erred in giving the instruction that allowed the jury to find that the appellant breached the contract.

We also think the instruction was incorrect in regard to the manner in which it submitted the damage issue to the jury. Although there was no evidence of breach of the contract by it, the appellant was not entitled to a directed verdict because there was evidence that the appellees had substantially performed their part of the contract. We discussed this matter in the case of Pickens v. Stroud, 9 Ark.App. 96, 653 S.W.2d 146 (1983). In that case we cited D. Dobbs, Handbook on the Law of Remedies, § 12.24 at 918-19 (1973), as stating that the doctrine of...