Jones v. John B. Dozier Land Trust , 2017 Ark. App. LEXIS 30 ( 2017 )

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ARKANSAS COURT OF APPEALS
DIVISION IV
No. CV-16-378
BARRY J. JONES D/B/A BORDERLINE Opinion Delivered: January 18, 2017
FARMS
APPELLANT APPEAL FROM THE LEE COUNTY
CIRCUIT COURT [NO. 39CV-12-56]
V.
HONORABLE RICHARD LEE
PROCTOR, JUDGE
JOHN B. DOZIER LAND TRUST,
JOHN B. DOZIER, TRUSTEE
APPELLEE REVERSED AND REMANDED
KENNETH S. HIXSON, Judge
Appellant Barry Jones (Jones) d/b/a Borderline Farms appeals from the Lee County
Circuit Court’s judgment awarding appellee, the John B. Dozier Land Trust (the Dozier
Trust), John B. Dozier (Dozier), Trustee, damages for breach of contract. On appeal,
appellant contends that (1) the repair estimate was inadmissible hearsay; (2) the allegation
that appellant caused the oil spill was based on speculation and conjecture; and (3) another
entity, Dozier Farms, Inc. (Dozier Farms), was a necessary party. We reverse and remand.
Dozier was married to Cathy Dozier. Cathy has a son from a previous marriage,
Jones. Hence, Jones was Dozier’s stepson. The Dozier Trust owned approximately 1100
acres of farmland in Lee County. Dozier was the sole trustee of the trust. Dozier, as trustee,
leased a portion of the farmland to his stepson, Jones, beginning in 2007. 1 The leased
1
The Dozier Trust and Jones had a written lease agreement for 2007, 2008, and 2009.
It was disputed whether the parties entered into a written lease agreement for 2010. The
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premises contained a shop building. In January 2011, Dozier and Cathy Dozier separated
in contemplation of divorce. At some point, Dozier decided that he did not want to
continue the farming arrangement with his soon-to-be ex-stepson, Jones. On January 24,
2011, Dozier’s attorney sent Jones a letter terminating Jones’s lease of the farmland after the
2011 crop season. The letter advised Jones that he could harvest the current crop but
warned Jones not to plant any crops in the fall of 2011.
A few months after Jones had vacated the property,2 Dozier inspected it and
discovered, among other things, alleged damage to the irrigation system and the shop-
building door, and a significant oil spill on the ground just outside the shop building. The
Dozier Trust filed an action for breach of contract, negligence, intentional tort, and unjust
enrichment against Jones. Generally, the Dozier Trust alleged that Jones was responsible
for damages for failing to pay 20 percent of the proceeds from a separate lawsuit, failing to
properly maintain irrigation equipment, failing to keep the shop clean by permitting an oil
spill, failing to cut the cotton stalks at the end of the harvest, causing damage to an overhead
door on the shop, and causing damage to the irrigation system.3 Jones answered and denied
the allegations and alternatively alleged that he was entitled to a setoff in the amount of
parties agreed there was not a written lease for 2011. However, Jones did farm the trust
land during 2010 and 2011.
2
The record does not contain evidence of the date Jones surrendered the leased
premises.
3
The only issue on appeal is the damages relating to the oil spill. We therefore do
not include a discussion of the other elements of the alleged damages.
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$7,214.79 for amounts that he had paid to Woodruff Electric Cooperative that benefited
the trust.
At trial, Dozier testified that he had rented the farmland to his stepson, Jones, and
that there were written leases for every year except 2011, which he referred to as Jones’s
“carryover year.” Although he could not locate the signed copy of the 2010 lease, an
unsigned copy of the 2010 lease was admitted into evidence without objection. Dozier
additionally explained that all of the leases were essentially the same except for specifying
alternating fields that Jones could use for planting. Dozier explained that he allowed Jones
to continue to farm and harvest his crops in 2011 because Dozier did not think that he had
given Jones enough notice to procure land somewhere else in a timely manner. Therefore,
Dozier agreed that Jones had a “holdover lease” in 2011.
One of the lease provisions required Jones to keep the shop clean and organized to
the best of his ability. After Jones had vacated the property, Dozier observed burnt motor
oil poured or spilled all over the ground around the shop. Photographs of the area around
the shop containing the oil spill were admitted into evidence.
Dozier testified that a thousand-gallon tank was located outside the shop building for
proper disposal of any oil “because [the Environmental Protection Agency] was cracking
down on spilling oil on the ground, and we had a company that would come pump it out
and take it off.” Therefore, he explained, there should not have been any buckets of oil
near the tank or oil poured or spilled on the ground. Dozier further testified that no other
farmer used that shop and that to his knowledge “there’s absolutely no other person that
could have done this.” At the time of the trial in September 2015, Dozier stated that he
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had not had the oil spill cleaned up but had procured an estimate from The Southern
Company of North Little Rock (The Southern Company) in the amount of $28,200 for
the cleanup costs. The Dozier Trust attempted to introduce the estimate into evidence to
prove damages. However, Jones objected to the estimate being admitted into evidence on
the basis that it was hearsay. The Dozier Trust responded that the estimate met the business-
record exception and that it had attached an affidavit from the company that prepared the
estimate. At that time, the trial court stated that the document “will be received for the
limited purposes of putting it in the record, but I’ll have to make a decision on that.”
Gregory Williams testified that he had been an employee of Dozier and had been
working on the farmland for about thirty-one years. Williams had been working for Jones
until he quit in February of 2011. Williams also testified that he observed the oil spill in
October 2011 and explained that the spill had not been there when he quit in February
2011. Therefore, he explained that the oil spill had to have occurred between the time he
left in February 2011 and October of 2011. Williams further testified that no other farmer
had access to or was using the oil tank at the shop. He additionally indicated that Jones had
told him that “he was beating [Dozier] at every move.”
Jones testified and denied that he had spilled the oil and testified that he did not know
who was responsible for the oil spill. He additionally denied signing the 2010 lease
agreement but admitted that he had entered into lease agreements from 2007 through 2009.
Although Jones denied making a statement to Williams that he was beating Dozier at every
move, Jones admitted that he probably threatened Dozier in response to Dozier’s threats
toward him. Jones testified that he did keep the shop clean but also stated that Williams,
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his farm manager, was responsible for cleaning the shop when he was an employee. Jones
did not testify as to when he specifically vacated the farmland, though he maintained that
he “had [the farmland] . . . until the end of 2011.” Finally, he testified that the oil spill was
not present when he left.
At the conclusion of the trial, the trial court orally ruled from the bench, which was
subsequently memorialized in a judgment entered on November 2, 2015. The trial court
specifically found that the Dozier Trust had a valid lease with Jones and that the lease
agreement had been breached. The trial court further found that Jones was responsible for
damages and awarded the Dozier Trust $28,200 for the oil spill, $1,885 for the shop
overhead door, and $2,500 in attorney’s fees. However, the trial court found that Jones was
entitled to a setoff in the amount of $7,214.79 for payments made to Woodruff Electric
Cooperative.
After the trial court orally stated its ruling from the bench, the following colloquy
ensued:
[JONES]: Your honor, one thing we did have, and we objected to this
twenty something thousand dollar - twenty something
thousand dollar or thirty thousand dollar oil spill, and we told
him we could get it done cheaper. I mean you still win, but I
think we can get it done -
THE COURT: I didn’t see any evidence of anything cheaper. Now, here’s
what - I’ve looked at that. I have these things, with the EPA
problems that they have with something like that, I know it’s a
horribly expensive thing, and I don’t say that I agree with that,
but I received that, and we got it into evidence, and that’s what
it was, and that’s what the award -
[JONES]: Your honor, I do respect you, but we objected to it coming in.
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(Emphasis added.) Judgment was entered in favor of the Dozier Trust, and this appeal
followed by Jones.
I. Standard of Review
In order to prove a breach-of-contract claim, one must prove the existence of an
agreement, breach of the agreement, and resulting damages. Schwyhart v. J.B. Hunt, LLC,
2014 Ark. App. 324, 436 S.W.3d 173. Our standard of review following a bench trial is
whether the trial court’s findings are clearly erroneous or clearly against the preponderance
of the evidence. Bohannon v. Robinson, 2014 Ark. 458, 447 S.W.3d 585. A finding is clearly
erroneous when, although there is evidence to support it, the reviewing court on the entire
evidence is left with a definite and firm conviction that a mistake has been made. Id.
Disputed facts and determinations of the credibility of witnesses are within the province of
the fact-finder. Id. Furthermore, in a bench trial, a party who does not challenge the
sufficiency of the evidence at trial does not waive the right to do so on appeal. Id.
II. The Repair Estimate
Appellant first argues on appeal that the repair estimate was inadmissible hearsay and
should have been excluded. Appellant argues that appellee failed to present testimony
establishing that the seven requirements under the business-record exception to hearsay had
been met and that the document was trustworthy. He further argues that because the repair
estimate was the only basis for the amount of the trial court’s award of damages, which
should have been excluded, the trial court’s judgment should be reversed as to the damages
relating to the oil spill cleanup. We agree.
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Before turning to the merits, appellee alleges that this point on appeal is not preserved
for our review. We disagree. Appellant timely objected at trial to the introduction of the
repair estimate from The Southern Company on the basis of hearsay. Appellee offered an
affidavit from The Southern Company in an attempt to qualify the estimate as a business-
record exception to the hearsay rule. The trial court stated that, at the time that the exhibit
was introduced, it was received for the limited purpose of putting it in the record. However,
the trial court later stated that it “received that” and “got it into evidence.” While it is
unclear what the trial court meant when it previously stated that it received the estimate
“for the limited purpose of putting it in the record,” it is clear that the trial court considered
the repair estimate as substantive evidence of damages because it awarded damages in
precisely the same amount as the estimate for the oil spill cleanup. Thus, appellant obtained
a ruling that the exhibit was admitted into evidence over his hearsay objection, and the issue
was preserved for our review.
Turning to the merits of the admissibility of the estimate, we note that the trial court
has wide discretion in determining the qualification of witnesses and the admissibility of
evidence. Beard v. Ford Motor Credit Co., 41 Ark. App. 174, 850 S.W.2d 23 (1993). One
who offers evidence has the burden of showing its admissibility, and we will not reverse the
trial court’s decision to permit introduction of the evidence absent an abuse of the trial
court’s discretion. Paine v. Walker, 76 Ark. App. 217, 61 S.W.3d 925 (2001). “Hearsay” is
a statement, other than one made by the declarant while testifying at the trial or hearing,
offered in evidence to prove the truth of the matter asserted. Ark. R. Evid. 801. Clearly,
the repair estimate from The Southern Company was hearsay. The appellee introduced the
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estimate to prove the truth of the matter asserted therein, namely, the $28,200 in
remediation costs. Hence, it was incumbent on the appellee to prove the existence of an
appropriate exception to the hearsay rule.
Arkansas Rule of Evidence 803(6) provides that records of a regularly conducted
business activity are not excluded from evidence by the hearsay rule. To be admissible
under the business-record exception, the offering party must meet seven requirements.
Beard, supra. The evidence must be (1) a record or other compilation, (2) of acts or events,
(3) made at or near the time the act or event occurred, (4) by a person with knowledge, or
from information transmitted by a person with knowledge, (5) kept in the course of a
regularly conducted business, (6) which has a regular practice of recording such information,
(7) as shown by the testimony of the custodian or other qualified witness. Id. Although
there is no prohibition against one company integrating records made by another into its
own business records, the party offering the record must still establish by a competent
witness that its content is worthy of belief. Marshall Trucking Co. v. State, 23 Ark. App. 110,
743 S.W.2d 16 (1988). The mere fact that a document is retained in appellant’s files does
not supply the required foundation for admission. Id. Only those documents meeting the
seven requirements and which are also found to be trustworthy are admissible under Rule
803(6). Id.
Here, appellee failed to present any admissible testimony whatsoever from the
custodian or other qualified witness of the record as to whether the business-record
requirements were met. Among other things, there was no admissible evidence that the
estimate was made at or near the time of the occurrence, that it was made by a person with
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knowledge, and whether it was, in fact, a document kept in the regular course of The
Southern Company’s business. The record is completely void of the safeguards required by
the business-record-exception rules. Although appellee attached an affidavit from an
employee of the company that made the repair estimate, the affidavit itself was inadmissible
hearsay.4 See Greenlee v. State, 318 Ark. 191, 884 S.W.2d 947 (1994). Therefore, because
appellee failed to establish that the repair estimate met the seven requirements and that it
was trustworthy to be admissible under Rule 803(6), we must conclude that the trial court
abused its discretion in admitting the repair estimate into evidence.
Appellant contends in his brief on appeal that the repair estimate was the only
evidence of damages “as to the cost of the cleanup” and, therefore, the trial court’s decision
should be reversed because the trial court’s reliance on that evidence was in error. While
we agree that the trial court erred, we find that the case should be remanded instead of
dismissed. Little Rock Newspapers, Inc. v. Dodrill, 281 Ark. 25, 660 S.W.2d 933 (1983), and
its progeny discuss the issue of whether a case should be dismissed or remanded when or if
there is an insufficiency of evidence. Our supreme court in Dodrill stated the following:
[W]e find it appropriate in this situation to remand. We have followed this practice
in other situations where we have reversed because of insufficiency of the evidence.
We have stated:
. . . Our ordinary procedure in reversing judgments in law cases is to remand
for another trial, rather than dismiss the cause of action. It is only where it
clearly appears that there can be no recovery that we consider it proper to
dismiss the cause. . . . The evidence might well have been much more
developed than it was. This Court has held even where a judgment based on
4
Although Arkansas Code Annotated section 16-46-108 (Repl. 1999) permits certain
business records to be admitted based on affidavit if certain conditions are met, neither party
raised this statute as a basis for the admission before the trial court nor suggests that this
section is applicable here.
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a jury verdict is reversed for insufficiency of the evidence to support it, there
may be circumstances which justify remanding the case for new trial. Hayes
Bros. Floor. Co. v. Carter, Adm’x, 240 Ark. 522, 525, 401 S.W.2d 6 (1966).
In St. L. S.W. Ry. Co. v. Clemons, Etc., 242 Ark. 707, 415 S.W.2d 332 (1967)
we said:
The general rule is to remand common law cases for new trial. Only
exceptional reasons justify a dismissal. One of the exceptions is an affirmative
showing that there can be no recovery. Pennington v. Underwood, 56 Ark. 53,
19 S.W. 108 (1892). There it was said that when a trial record discloses ‘a
simple failure of proof, justice would demand that we remand the cause and
allow plaintiff an opportunity to supply the defect.’
See also Home Ins. Co. v. Harwell, 263 Ark. 884, 568 S.W.2d 17 (1978); Southwestern
Underwriters Ins. v. Miller, 254 Ark. 387, 493 S.W.2d 432 (1973). And we have held
this procedure applicable even when no proof was offered on an issue, and where it
was demanded by simple justice or where it was not impossible that the deficiency
in proof could be supplied. Follett v. Jones, 252 Ark. 950, 481 S.W.2d 713 (1972);
South. Farm Bur. Cas. Ins. v. Gottsponer, 245 Ark. 735, 434 S.W.2d 280 (1968).
Dodrill, 281 Ark. at 32–33, 660 S.W.2d at 937–38.
Here, although we hold that the introduction of the repair estimate was error,
appellee still provided evidence through testimony at trial and through the admission of
photographs that there was damage done by the oil spill. Thus, as in Dodrill, we cannot say
that the record affirmatively shows that there could be no recovery, and we must reverse
and remand for a new trial. Id.; Spring Creek Living Ctr. v. Sarrett, 319 Ark. 259, 890 S.W.2d
598 (1995); Womack v. First State Bank of Calico Rock, 21 Ark. App. 33, 728 S.W.2d 194
(1987). Because we remand for a new trial on other grounds, we do not address appellant’s
remaining arguments on appeal. Harp v. Sec. Credit Servs., LLC, 2013 Ark. App. 202.
Reversed and remanded.
GRUBER, C.J., and VIRDEN, J., agree.
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Taylor & Taylor Law Firm, P.A., by: Andrew C. Taylor and Tasha C. Taylor, for
appellant.
Hillburn, Calhoon, Harper Pruniski & Calhoun, Ltd., by: Sam Hillburn and Tetiana
Fayman, for appellee.
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