Stephens v. West Pontiac-GMC, Inc., PONTIAC-GM

• Decision Date: 09 March 1983
• Docket Number: PONTIAC-GM,No. CA,INC,CA
• Citation: Stephens v. West Pontiac-GMC, Inc., 647 S.W.2d 492, 7 Ark.App. 275 (Ark. App. 1983)
• Parties: Hayes STEPHENS and Jimmie G. Stephens, Appellants, v. WEST, Lee West, Individually, and Woodrow Wells, Individually, Appellees. 82-297.
• Court: Arkansas Court of Appeals

Page 492

647 S.W.2d 492

7 Ark.App. 275

Hayes STEPHENS and Jimmie G. Stephens, Appellants, v.WEST PONTIAC-GMC, INC., Lee West, Individually, and Woodrow Wells, Individually, Appellees.

No. CA 82-297.

Court of Appeals of Arkansas.

March 9, 1983.

Gibson Law Office by Charles S. Gibson, Dermott, for appellants.

Holloway & Bridewell by Bill R. Holloway, Lake Village, for appellees.

GLAZE, Judge.

This contract case involves appellees' purchase of appellants' vehicle dealership which included three franchises, Pontiac, GMC trucks and AMC/Jeep.¹Because only the Pontiac and GMC franchises were delivered, appellees filed suit for breach of contract, seeking damages for appellants' failure to convey the Jeep franchise.Appellants denied any breach and affirmatively asserted that appellees refused the Jeep dealership when it was offered and that appellees otherwise waived or were estopped from alleging any breach.At trial, appellees were favored with a jury verdict in the amount of $40,740.00.On appeal, appellants argue the trial court erroneously (1) overruled their motions for summary judgment and directed verdict, (2) admitted prejudicial hearsay testimony, and (3) instructed the jury.

In testing the trial court's ruling on the sufficiency of the evidence, we view the evidence in the light most favorable to the appellees.Southern Pipe Coating, Inc. v. Spear & Wood Mfg. Co., 235 Ark. 1021, 363 S.W.2d 912(1963).In doing so, we find the trial court was correct in denying appellants' motions.

Appellants contracted to sell their business, including the three franchises, for $130,000.The parties, in their written agreement, acknowledged that the respective manufacturers must approve the transfer of each franchise.Accordingly, the parties provided for rescission of the contract in the event the manufacturers did not approve.The date for closing the sale was set "at such time as the transfer of dealership has been approved by the manufacturers."Contrary to their agreement, the parties actually consummated the sale on November 1, 1980, which was before the manufacturers formally approved the transfers of the three dealerships.Appellees testified that they closed the sale because General Motors had informally approved the transfer of its dealerships which GMAC agreed to finance.They believed the Jeep dealership would also follow once the General Motors franchise was approved.Appellees subsequently obtained the Pontiac and GMC truck dealerships, but never received the Jeep franchise.Three and one-half months after the sale closed, appellees learned that GMAC would no longer finance or floor-plan Jeep vehicles.Learning this, appellees later declined the Jeep franchise after its transfer was finally approved and offered to them.

Appellants claim that they were entitled to a summary judgment or instructed verdict because appellees were offered the Jeep franchise, but refused it because of reasons extraneous to appellants' conduct or the parties' agreement, viz., that GMAC no longer provided financing for Jeep.We cannot agree.Appellees' testimony showed that appellants refused to terminate their relationship with Jeep because of a dispute over bonus money.Until appellants released their franchise with Jeep, appellees claimed they were unable to obtain the franchise in their own names.On November 1, 1980, the parties knew that the franchises were not formally approved, and the transfers would have to occur later.When, or if, either the appellants or appellees breached their contract necessarily became a fact question for the jury to decide.The rule is that a party to a contract who, with knowledge of a breach by the other party, continues to accept benefits under the contract and suffers the other party to continue in performance thereof, waives the right to insist on the breach.Southern Pipe Coating, Inc. v. Spear & Wood Mfg. Co., supra.Whether appellants refused to do those things required, within a reasonable time, for appellees to acquire the Jeep dealership was certainly in issue; so, too, was the issue regarding whether appellees waived any breach which may have been committed by appellants.These factual issues alone were sufficient reasons for the trial court to refuse appellants' requests for summary judgment and directed verdict.

We also find no merit in appellants' argument that the trial court erred in admitting certain hearsay testimony.Appellees' bookkeeper was allowed to testify that a Jeep representative said, in essence, that appellees need not submit an application for the Jeep dealership until appellants terminated their franchise.Even if the bookkeepers' statement were inadmissible hearsay, no prejudice arose from its introduction.The appellants admitted that, as dealers, they knew they had to release Jeep before the dealership could be transferred.The bookkeeper's testimony was merely cummulative to other testimony on this same issue and consequently was not prejudicial.Nelson v. Busby, 246 Ark. 247, 437 S.W.2d 799(1969).

We finally consider appellants' argument that the trial court erred in giving jury instructions numbers 6, 7 and 8.Instructions 7 and 8 dealt with awarding damages if the jury found in appellees...