Tyson Foods, Inc. v. Davis

• Decision Date: 07 February 2002
• Docket Number: No. 01-165.,01-165.
• Citation: 66 S.W.3d 568,347 Ark. 566
• Parties: TYSON FOODS, INC. v. Don DAVIS.
• Court: Arkansas Supreme Court

66 S.W.3d 568

347 Ark. 566

TYSON FOODS, INC. v. Don DAVIS.

No. 01-165.

Supreme Court of Arkansas.

February 7, 2002.

Dover & Dixon, P.A., by Michael R. Johns, Thomas S. Stone, and Patrick E. Hollingsworth, Little Rock, for appellant.

Lingle & Fulcher, PLLC, by H. Clay Fulcher and James G. Lingle, Rogers; Lonnie Turner, Ozark; and Mainard & McCain, by James Mainard, Rogers, for appellee.

JIM HANNAH, Justice.

Tyson Foods, Inc., appeals a judgment entered on a jury verdict in Franklin County Circuit Court finding Tyson liable to Don Davis for $891,660 in damages. The trial judge gave instructions to the jury on fraud, promissory estoppel, and negligence, and the matter was submitted to the jury on these issues on a general jury verdict form. Tyson alleges the fraud and promissory estoppel causes of action were precluded by the statute of limitations and should not have been submitted to the jury. Tyson also alleges that Don Davis knew or should have known of alleged misrepresentations by Tyson when he signed a contract that did not reflect what he alleges he was told. Tyson further argues that by signing the contract, Davis waived any claim of misrepresentations because the contract contained the full agreement between the parties. Tyson additionally asserts that Davis failed to present substantial evidence of justifiable reliance on the alleged misrepresentations of Tyson, that there was also a lack of substantial evidence of damages, that the jury was incorrectly instructed on damages, and finally that the amount of the verdict is not supported by substantial evidence. We disagree.

We hold Davis's claims were not precluded by the statute of limitations, that the issues submitted to the jury were supported by substantial evidence, that the directed verdict motions were properly denied, and that the case was properly submitted to the jury.

Facts

This case arises from a decision by Tyson to seek hog growers in Arkansas to raise hogs in a bedded-floor program.¹ Tyson argues that the bedded-floor program was never represented to be anything other than a stop-gap program that would only last a year or so until more traditional finishing units with concrete-slatted floors were built in Missouri to handle the feeder pigs coming off Tyson's sow operations in Oklahoma. Davis argues that Tyson was desperate for growers because of the delays with the completion of the Missouri finishing units, that Tyson did not have enough capacity to handle their feeder pigs, and that Tyson represented to him the bedded-floor program was here for the long term just as the bedded-floor program is in Tyson's poultry business. He alleges that Tyson encouraged him to enter into the business, and that he was induced to assume substantial debt and invest substantial sums that Tyson knew he could never recoup in a year or two of operations. The equipment required by Tyson had a ten year expected life.

The facts put before the jury are as follows. Tom Johnson was Tyson's regional manager for the central region in 1994. He testified that Tyson decided to expand its hog operation in late 1990 or early 1991. They found the opportunities to expand in Oklahoma and Missouri to be the most attractive and commenced construction of sow units in Oklahoma and finishing units in Missouri. Johnson testified that the pigs are born at the sow units and raised to a weight of about forty pounds over a period of five-and-a-half to seven weeks. Then the feeder pigs are transferred to the finishing units where they reach a market weight of 240 to 280 pounds.

According to Johnson, problems arose in completing the finishing units in Missouri when another producer there got into pollution problems, and the State of Missouri stopped issuing permits to operate waste lagoon systems. Johnson testified that the finishing units in Missouri were built on slatted concrete floors with the waste flushed out into lagoons. The lack of environmental permits kept the finishing units from coming on line when expected and meant more feeder pigs were being produced in the Oklahoma sow units than Tyson had room for in Missouri. It appears that although the feeder pigs could have been sold, the market in finishing out the hogs was very attractive at that time. Tyson therefore set out to try and accommodate the feeder pigs elsewhere.

Johnson testified that a Tyson employee had been to Scotland and found they were finishing hogs out on bedded floors rather than the slatted concrete floors. Johnson characterized the bedded system as "pretty much" the way poultry is raised in the United States. The bedded system apparently did not require the environmental permits because in the bedded system animal waste mixes with the bedding and is periodically removed collectively as a solid waste and spread on fields. As such, no lagoon system of emulsified animal waste is involved.

Again, according to Johnson's testimony, Tyson began looking at the bedded-floor system and considered journal articles discussing it. Johnson and another Tyson employee named John Thomas then went to a Missouri farm to observe the operation of a bedded—floor operation there. The farmer in Missouri reported to them that the efficiency of the system was similar to the traditional method on slatted floors. Johnson reported this information to his superior at Tyson, Bill Moeller. In the beginning of 1994, Tyson placed its first batch of feeder pigs on a bedded-floor operation at a farm in Green Forest, Arkansas. This batch was finished successfully in May of that year. Johnson testified that they were "pleasantly surprised" at the results which were similar to that represented by the Missouri farmer, and that another batch was placed on the farm in Green Forest. At this point, according to Johnson, Tyson decided to go forward with a bedded-floor program as a "temporary stop-gap measure until we could get things built in Missouri." Tyson estimated it would be another year before the units in Missouri would be operating. It turned out to be longer.

Johnson then testified that in the summer of 1994 he traveled to the Arkansas Pork Producers meeting in Fayetteville with hog farmer Roger Hammond. On their return trip, they discussed the bedded-floor program. According to Johnson, he told Hammond it was a temporary program that would run until the concrete-floor facilities in Missouri were completed, and that Hammond expressed an interest in the program. It appears that as a consequence of this conversation, Hammond approached Davis. According to Davis's testimony, he was approached by Hammond about either letting Hammond use his empty turkey houses or going into partnership raising hogs for Tyson on bedded floors in Davis's turkey houses. Davis testified that Hammond told him the program for Tyson would only be short term, a year or two, and that he determined it was not financially feasible over such a short time. Davis testified that he nonetheless thought the bedded-floor method of finishing hogs might provide a use for his empty turkey houses. He thought there might be options other than raising hogs for Tyson. Davis went on to testify that he then called Tyson to see if he could look at one of their bedded units to understand how they were operated. According to Davis, when he called Tyson, he was connected with Johnson who then asked if he would be interested in raising hogs for Tyson. According to Johnson, Davis was the one that expressed an interest in raising hogs for Tyson.

In any event, according to both men, they later met on Davis's farm to discuss the possibility. From this point, the facts diverge significantly. Johnson testified that when they met at Davis's farm, he viewed the facilities and wrote out the changes and listed the equipment that would be required if Davis wanted to raise hogs for Tyson. The equipment Tyson required had a ten-year life. Johnson further testified that he told Davis he had authority for a one-year contract and no more, that there might be batch-to-batch contracts for less than a year thereafter, but there was no promise of such because it depended on when the Missouri finishing units could handle the feeder pigs being produced. Johnson specifically denied ever telling Davis they would provide hogs for twenty years or for his life, or that the bedded-floor program was long term, but rather he testified that he told Davis the bedded-floor program was a temporary stop-gap program that would last until the units in Missouri could handle the hogs.

Reece Hudson, a Tyson employee, was also present at this first meeting at the Davis farm in 1994. He testified consistently with Johnson that Davis was told that the program was temporary until the Missouri finishing units could take the feeder pigs. He denied the representation asserted by Davis that Tyson was in the bedded-floor program for the long term.

Davis told quite a different story in his testimony. He testified that when Johnson arrived at his farm, the first thing he asked Johnson was whether the program was short term as Hammond reported to him. Davis testified that Johnson told him that was not the case. Davis then testified further that he made it clear to Johnson that he was not interested in raising hogs short term, that it would get him in financial trouble, and that he needed twenty years or better. Davis testified that when he said this, Johnson told him "we only give year-to-year contracts to everybody we deal with. All of our operations, it's a year-to-year contract, the same as chicken growers. All they get is a year-to-year contract." Davis testified that Johnson also said at this same time, "We don't plan on going out of business. We plan on being here." Davis then went on to further testify that Johnson told him Tyson had been in business for "a bunch of years," and that "we plan on staying in the business and don't plan on going out," and "well I don't see any reason it won't last twenty years or till...