Waste Management of Ark v. Roll off Service

• Decision Date: 01 December 2004
• Docket Number: No. CA 04-174.,CA 04-174.
• Citation: 199 S.W.3d 91
• Parties: WASTE MANAGEMENT OF ARKANSAS, INC., Appellant v. ROLL OFF SERVICE, INC., and Tom Smith, Appellees.
• Court: Arkansas Court of Appeals

199 S.W.3d 91

WASTE MANAGEMENT OF ARKANSAS, INC., Appellant v. ROLL OFF SERVICE, INC., and Tom Smith, Appellees.

No. CA 04-174.

Court of Appeals of Arkansas, Division II.

December 1, 2004.

Quattlebaum, Grooms, Tull & Burrow PLLC, by: John E. Tull III, E.B. Chiles IV, and Brandon B. Cate, Little Rock, for appellant.

Debby Winters, Lowell, for appellees.

JOSEPHINE LINKER HART, Judge.

Appellant sued appellees for intentional interference with contractual relations, violation of the Deceptive Trade Practices Act, and conversion. The jury found for appellant on all counts and awarded $350,000 in punitive damages but no compensatory damages. Thereafter, appellant asked the trial court to correct the verdict based on a juror's statement that the jury intended to award appellant both compensatory and punitive damages. The trial court refused to correct the verdict and denied appellant's alternative motion for a new trial or nominal damages. In a later order, the court denied appellant's request for attorney fees pursuant to Ark.Code Ann. § 4-88-113(f) (Repl.2001), which is part of the Deceptive Trade Practices Act. Appellant now appeals from those rulings and argues that the trial court erred in: 1) refusing to correct the verdict; 2) refusing to grant a new trial; 3) failing to award nominal damages; 4) denying appellant's request for attorney fees. We conclude that the trial court was correct in refusing to amend the verdict but that the trial court erred in denying appellant a new trial. We therefore reverse and remand on that ground without reaching appellant's last two arguments.¹

Since 1998, appellant has provided trash-hauling and disposal services in northwest Arkansas. It has the exclusive franchise for refuse disposal in the cities of Rogers, Lowell, and Elkins, and has private trash removal contracts with various commercial enterprises both inside and outside those cities. The written contracts entered into by appellant and its customers are for specified durations, usually thirty-six to sixty months, and most contain a liquidated-damages clause, effective in the event of early cancellation.

In 2000, appellee Roll Off Service, whose owner is appellee Tom Smith, began providing trash-hauling services in the same areas of northwest Arkansas served by appellant. Appellees immediately began pursuing customers who had contracts with appellant, including customers within the cities of Rogers, Lowell, and Elkins. When some of those customers informed appellees that they had contracts with appellant, appellees provided the customers with a cancellation letter to send to appellant. If appellant billed the customer for liquidated damages, appellees provided the customer with free service for a number of months to offset the damages.

After losing a significant number of customers to appellees, appellant filed suit in Washington County Circuit Court, seeking compensatory and punitive damages for: 1) intentional interference with contractual relations based on allegations that appellees purposely induced appellant's customers both inside and outside the exclusive franchise areas to breach their contracts with appellant; 2) violation of the Deceptive Trade Practices Act (DTPA) based on allegations of false and misleading representations made to customers about the validity of the city franchises and the nature of the services that were covered by the franchises; 3) conversion based on allegations that appellees emptied appellant's containers.² A trial was held on these allegations from July 15-18, 2003, wherein the jury heard the testimony of over thirty witnesses and viewed hundreds of exhibits. Among the witnesses was appellant's economic expert, Dr. Charles Venus, who testified that, as the result of contracts that were prematurely terminated by over thirty of appellant's customers and as the result of appellees' servicing of more than 130 of appellant's customers in Rogers and Lowell, appellant suffered lost profits of $536,901.

After closing arguments, the jury retired for deliberations. They had been provided with twenty-four verdict forms asking them to make findings on each of appellant's claims against each appellee and to make findings regarding compensatory and punitive damages. At 1:33 a.m., the jury returned with its verdict. The verdict forms revealed that the jury had found in appellant's favor on all counts — intentional interference with contractual relations, violation of the DTPA, and conversion. However, the verdict forms pertaining to damages reflected a compensatory award of "-0-" and punitive damage awards of $150,000 against Roll Off Service and $200,000 against Tom Smith. After the jury verdict was read, the trial judge asked if either side wished to poll the jury; both sides declined.

A few days after the verdict was announced, appellees filed a motion for a judgment notwithstanding the verdict (JNOV) on the ground that the punitive-damage award could not stand in the absence of a compensatory award. Thereafter, the jury foreman, having read in the newspaper that no compensatory damages had been awarded in the case, filed an affidavit. In his affidavit, he averred that, given the extensive number of forms and the late hour that the jury had returned the verdict, there may have been confusion in completing the forms, but that the jury's intention was to award appellant $150,000 in compensatory damages against Roll Off Service and $200,000 in punitive damages against Tom Smith. Upon the filing of that affidavit, appellant moved to correct the judgment in accordance with the jury's intention or, in the alternative, for a new trial or an award of nominal damages. The trial court struck the juror's affidavit, ruling that consideration of it was prohibited by Ark. R. Evid. 606(b), and further ruled that appellant had waived its right to correct the verdict by not doing so before the jury was discharged. Additionally, the court denied appellant's motion for a new trial or nominal damages, choosing instead to grant appellees' motion for a JNOV.

Following entry of the JNOV, appellant asked the court for $108,543 in attorney fees based on the jury's finding that appellees violated the DTPA. The trial court denied the motion, ruling that appellant was not the "prevailing party" at trial. Appellant appeals from that order and from the order denying its post-trial motions.³

We first address appellant's argument that the trial court erred in striking the juror's affidavit and in failing to correct the verdict. The primary basis of the court's ruling was that Rule 606(b) of the Arkansas Rules of Evidence prohibited consideration of the juror's affidavit. Rule 606(b) provides:

Upon an inquiry into the validity of a verdict or indictment, a juror may not testify as to any matter or statement occurring during the course of the jury's deliberations or to the effect of anything upon his or any other juror's mind or emotions as influencing him to assent to or dissent from the verdict or indictment or concerning his mental processes in connection therewith, nor may his affidavit or evidence of any statement by him concerning a matter about which he would be precluded from testifying be received, but a juror may testify on the questions whether extraneous prejudicial information was improperly brought to the jury's attention or whether any outside influence was improperly brought upon any juror.

The rule embodies the public interest in preserving the confidentiality of jury deliberations, see National Bank of Commerce v. HCA Health Services of Midwest, Inc., 304 Ark. 55, 800 S.W.2d 694 (1990), and ensures that jury deliberations remain secret, unless it becomes clear that the jury's verdict was tainted by a showing of extraneous prejudicial information or some improper outside influence. Watkins v. Taylor Seed Farms, Inc., 295 Ark. 291, 748 S.W.2d 143 (1988).

Appellant admits that the affidavit in this case falls under neither of the rule's stated exceptions, i.e., it does not aver that the jury was subject to extraneous prejudicial information or improper outside influence. Nevertheless, appellant argues that the affidavit was admissible because it was not contrary to the overall purpose of Rule 606(b), which is to restrict inquiry into the "validity" of a verdict. According to appellant, the juror's affidavit in this case did not address the validity of the verdict but the "veracity" of the verdict, i.e., whether the jury's verdict as recorded on the verdict forms reflected the jury's decision. Appellant contends that Rule 606(b) does not prohibit a juror from testifying that the verdict inscribed on the verdict form and read in open court does not mirror what was truly agreed upon by the jury.

Appellant cites no Arkansas case in support of this proposition, and indeed there appears to be no case directly on point. However, appellant cites several cases that interpret the virtually identical Fed. R.Evid. 606(b) to say that juror testimony is permitted to show that, through inadvertence, oversight, or mistake, the verdict announced was not the verdict on which the jury agreed. See, e.g., Karl v. Burlington N. R.R. Co., 880 F.2d 68 (8th Cir.1989); Robles v. Exxon Corp., 862 F.2d 1201 (5th Cir.), cert. denied, 490 U.S. 1051, 109 S.Ct. 1967, 104 L.Ed.2d 434 (1989); Attridge v. Cencorp Div. of Dover Tech. Int'l Inc., 836 F.2d 113 (2d Cir.1987); see also Joseph McLaughlin, Weinstein's Federal Evidence § 606.04[4][b] (2d ed.2004). Additionally, many state courts have interpreted their evidentiary rules in a like fashion. See, e.g., Prendergast v. Smith Labs., Inc., 440 N.W.2d 880 (Iowa 1989); Martin v. State, 732 So.2d 847 (Miss.1998). These cases reason that Rule 606(b) is designed to prevent inquiry into the jurors' mental processes, not to prevent the correction of a clerical error in the transmission or recordation of the verdict. Their holdings appear to be the majority rule. See Annot., ...