First Financial Bank v. Mazzio's Corp. , 2 F. App'x 674 ( 2001 )

United States Court of Appeals
FOR THE EIGHTH CIRCUIT
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No. 00-2211
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First Financial Bank, *
*
Appellee, *
* Appeal from the United States
v. * District Court for the Western
* District of Arkansas
Mazzio's Corporation, *
* [UNPUBLISHED]
Appellant. *
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Submitted: February 12, 2001
Filed: March 7, 2001
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Before LOKEN, HEANEY, BYE, Circuit Judges.
PER CURIAM.
Mazzio's Corporation appeals from the partial summary judgment and trial
judgment entered against it in favor of First Financial in the District Court1 for the
Western District of Arkansas. We affirm.
1
The Honorable H. Franklin Waters, United States District Judge for the Western
District of Arkansas.
I.
The appellee, First Financial, owned a five-acre lot of commercial property in
Springdale, Arkansas. First Financial built its headquarters on the southern three acres,
and left open the northern two acres for future development. In early 1997, First
Financial was approached by a representative for Mazzio's, which was interested in
buying the lot in order to open an Italian restaurant on the northern site.
At the time, First Financial's President Jerry Bullard had owned the property for
approximately seven years. He had estimated it to be worth between $300,000 and
$320,000. Bullard based his estimate on a recent appraisal, his knowledge of the
property's past sales price, and real estate prices in the local area.
Mazzio's extended a written offer to First Financial for $450,000. Mazzio's
original offer contained a 90-day "look-see" period. First Financial rejected the offer,
seeking a higher price and a limitation on the "look-see" provision. After a period of
negotiations, Mazzio's and First Financial reached a purchase price of $517,500, with
a closing date of August 15, 1997. The contract was signed by Mazzio's vice-president
of finance, who had the authority to bind Mazzio's.
On August 1, 1997, Mazzio's wrote a letter to First Financial seeking to
terminate the contract. Mazzio's stated that the property "is not suitable for our needs
due to the amount of site work and preparation . . . ." Mazzio's also contended that the
"private club" provision in the city was "overly burdensome." First Financial refused
to terminate the contract, and filed a civil action for breach of contract under Arkansas
law.
After Mazzio's termination, First Financial attempted to sell the property.
Eventually, it found a buyer for $320,000 for the property. On July 21, 1999, First
Financial filed a civil action for breach of contract.
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The district court granted partial summary judgment in favor of First Financial
on one of Mazzio's affirmative defenses, and the case went to a bench trial. At trial,
the district court made various findings. It rejected the impossibility defense asserted
by Mazzio's, because Mazzio's never met its affirmative duty of applying for a permit.
The district court considered and rejected Mazzio's interpretation of the "customary"
language in the contract. It held Mazzio's liable for breach of contract.
On the issue of damages, the district court allowed testimony from the land
owner, First Financial's president, on the value of the land at the time of the sale and
of Mazzio's breach. Mazzio's offered no rebuttal evidence. The district court awarded
damages for $197,500 by subtracting the fair market value assessed at the time of
breach of $320,000 minus the sale price of $517,5000. The district court also awarded
First Financial attorney's fees and costs. Mazzio's appeals.
II.
A. Partial Summary Judgment
Prior to the bench trial, the district court granted partial summary judgment to
First Financial on one of the affirmative defenses asserted by Mazzio's. Specifically,
Mazzio's sought to argue First Financial was untimely in delivering the survey and title.
First Financial argued Mazzio's waived this defense by its own actions.
In granting First Financial's motion, the district court noted that Mazzio's never
asserted any untimeliness by First Financial until after it filed its civil action. The
district court also noted the parties exchanged volumes of paperwork on the closing
date, without mentioning any alleged untimeliness. In addition, Mazzio's continued to
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demonstrate an intent to close on the contract well after the alleged delivery date.
Indeed, Mazzio's repeatedly confirmed that no extensions would be necessary.
In holding that Mazzio's waived its untimeliness defense, the district court cited
a decision that has since been reversed by the Arkansas Supreme Court. Bharodia v.
Pledger, 990 S.W.2d 581 (Ark Ct. App. 1999), rev'd by 11 S.W.3d 540 (2000).
However, we believe First Financial demonstrated Mazzio's waiver beyond any genuine
dispute, and in accordance with the Arkansas Supreme Court's more rigorous opinion
in Bharodia v. Pledger, 11 S.W.3d 540 (2000). Therefore, we affirm the district court's
order granting partial summary judgment.2
B. Mazzio's Liability Under the Contract
Mazzio's appeals the district court's decision holding it liable under the contract,
and rejecting its defense of impossibility. We review under the clearly erroneous
standard. See Sherman v. Runyon, 253 F.3d 406, 408 (8th Cir. 2000). The district
court conducted a thorough bench trial. It considered testimony on the meaning of the
"customary" language in the contract, in light of the license and permit requirements of
Springdale, and the premium Mazzio's paid for the property.
Mazzio's argued that it didn't believe it could obtain the building and liquor
permits it would need to operate its restaurant. In addition, Mazzio's chose not to apply
for the licenses because of newfound expenses. However, under Arkansas law, mere
inconvenience or cost of compliance does not excuse a contractual obligation.
Crookham & Vessels, inc. v. Larry Moyer Trucking, Inc., 699 S.W.2d 414, 416-17
2
In addition, we find no abuse of discretion in declining Mazzio's untimely
motion to amend its complaint. See Bell v. Allstate Life Insurance Co., 160 F.3d 452,
453 (8th Cir. 1998).
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(Ark. Ct. App. 1985). Mazzio's failed to meet its burden of proving the impossibility
defense, and it has not shown the district court was clearly erroneous in its findings.
C. Damages Evidence and Award
Mazzio's also appeals the district court's evidentiary ruling and damages award
in regard to the value of the land. Mazzio's first quibbles with the district court's
decision allowing First Financial's president to testify as to the value of the land.
However, Arkansas law grants broad authority for land owners to testify as to the value
of their land. See Ark. State Highway Comm'n v. Mullens, 502 S.W.2d 626, 627 (Ark.
1973). Some of the testimony by the president of First Financial was based on hearsay;
however, in light of the president's other sources of information, we perceive no abuse
of discretion in admitting this testimony. See Ogden v. Wax Works, Inc., 214 F.3d
999, 1010 (8th Cir. 2000).
As for the damages award itself, we believe the district court accurately applied
Arkansas law on First Financial's expectations damages. See Green v. Ferguson, 567
S.W.2d 89, 92 (Ark. 1978). The district court was in the best position to make
credibility determinations as to First Financial's president; moreover, Mazzio's
presented no testimony on the value of the land. Accordingly, the district court's
findings were not clearly erroneous.
D. Award of Attorney's Fees
Finally, Mazzio's appeals the attorney's fees the district court awarded to First
Financial. Mazzio's objects to this award, arguing it doesn't comply with Arkansas
Code § 16-22-308. However, Mazzio's ignores the fact that the attorney's fees were
awarded based on a contractual provision, not a statutory provision. Paragraph Nine
of the contract clearly states: "In the event of any court action or proceeding to enforce
any provision hereof, the prevailing party shall be entitled to receive from the
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other party all reasonable costs of the action, including attorney's fees." First Financial
indisputably is the prevailing party in this case, and Mazzio's hasn't disputed the
accuracy of the calculation of fees. Accordingly, the district court properly enforced
the fees provision according to its plain language.
III.
For the reasons explained in this opinion, we affirm the district court's judgment
for damages and award of attorney's fees in favor of First Financial.
A true copy.
Attest:
CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.
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