Harvest Rice, Inc. v. Fritz & Mertice Lehman Elevator & Dryer, Inc.

231 S.W.3d 720, 365 Ark. 573
CourtSupreme Court of Arkansas
DecidedMarch 9, 2006
Docket05-716
StatusPublished
Cited by25 cases

This text of 231 S.W.3d 720 (Harvest Rice, Inc. v. Fritz & Mertice Lehman Elevator & Dryer, Inc.) is published on Counsel Stack Legal Research, covering Supreme Court of Arkansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Harvest Rice, Inc. v. Fritz & Mertice Lehman Elevator & Dryer, Inc., 231 S.W.3d 720, 365 Ark. 573 (Ark. 2006).

Opinion

Jim Gunter, Justice.

Appellant, Harvest Rice, Inc., appeals an order from the Desha County Circuit Court granting summary judgment in favor of appellee, Fritz and Mertice Lehman Elevator and Dryer, Inc. d/b/a Lehman Elevator. The circuit court dismissed appellant’s breach-of-contract action on the basis that its buyer report did not satisfy the merchant’s exception to the Arkansas Statute of Frauds, pursuant to Ark. Code Ann. § 4-2-201(2) (Repl. 2001). We reverse and remand the circuit court’s ruling.

Prior to April 1, 2003, Harvest, who is in the business of buying, selling, and milling rice, orally negotiated to purchase 67,500 hundredweights of rough rice from Lehman, a grain elevator in Gillett, at $5.10 per hundredweight plus shipping costs for delivery to Harvest’s place of business in McGehee by May 31, 2003. Gerald Loyd, a principal Harvest employee, negotiated with Park Eldridge, a co-owner of Lehman. On April 1, 2003, following the negotiations, Loyd faxed a buyer report to Eldridge containing the quantity, price, date of delivery, and other terms. According to Mr. Eldridge’s deposition testimony, he did not see the faxed copy of the buyer report until several days later because his fax machine was out of paper. On April 15, 2003, Mr. Eldridge faxed a letter to Harvest, objecting to the terms of the buyer report and informing Harvest that he would be unable to make the sale of rice at the desired levels. Harvest made a demand upon Lehman to perform, but Lehman did not do so. There is no signed, written contract between Harvest and Lehman.

On May 5, 2003, Harvest filed a complaint, alleging breach of contract, and prayed for damages in the amount of cost, or, in the alternative, the difference in market price at the time appellant learned of the breach. Lehman filed an answer and counterclaim on May 22, 2003, pleading the affirmative defenses of the Statute of Frauds, waiver, estoppel, set off, and a failure to mitigate damages. On January 26, 2004, Lehman filed a motion for partial summary judgment, arguing that there was never an oral contract, and if there were, it violated the Arkansas Statute of Frauds and was unenforceable as a matter of law. On February 24, 2004, Harvest filed a response and cross-motion for summary judgment, arguing that a failure to deliver the agreed-upon quantities constituted a breach rather than a repudiation of the contract. Harvest sought damages in the amount of $91,125.00 as a result of the alleged breach.

On March 6, 2005, the circuit court entered an order, granting Lehman’s motion for summary judgment and dismissing Harvest’s complaint with prejudice, ruling that the buyer report did not have clear, confirmatory language that is required to sustain the merchants’ exception under Ark. Code Ann. § 4-2-201(2). From this order, Harvest now brings its appeal.

For its sole point on appeal, Harvest argues that the circuit court erred as a matter of law in finding that the buyer report did not constitute a writing in confirmation of a contract because it lacked emblematic contractual language. Specifically, Harvest makes three allegations of error. First, there is no requirement that a writing in confirmation of a contract contain clear, confirmatory language. Second, the buyer report in this case contains language that confirms an oral contract. Finally, the seller signature line on the buyer report does not affect the document’s status as a writing in confirmation of a contract.

In response, Lehman argues that the circuit court correctly found that the buyer report was not a writing in confirmation of a contract under the merchant’s exception of Ark. Code Ann. § 4-2-201(2). Specifically, Lehman contends that the buyer’s report lacked clear, confirmatory language referencing a previous oral agreement with Harvest.

Our standard of review for summary judgment cases is well established. Ginsburg v. Ginsburg, 353 Ark. 816, 820-21, 120 S.W.3d 567, 569-70 (2003). Summary judgment should only be granted when it is clear that there are no genuine issues of material fact to be litigated, and the moving party is entitled to judgment as a matter of law. Id. The purpose of summary judgment is not to try the issues, but to determine whether there are any issues to be tried. Id. We no longer refer to summary judgment as a drastic remedy and now simply regard it as one of the tools in a trial court’s efficiency arsenal. Id. Once the moving party has established a prima facie entitlement to summary judgment, the opposing party must meet proof with proof and demonstrate the existence of a material issue of fact. Id. On appellate review, we determine if summary judgment was appropriate based on whether the evidentiary items presented by the moving party in support of the motion leave a material fact unanswered. Id. We view the evidence in a light most favorable to the party against whom the motion was filed, resolving all doubts and inferences against the moving party. Id. Our review focuses not only on the pleadings, but also on the affidavits and other documents filed by the parties. Id. Moreover, if a moving party fails to offer proof on a controverted issue, summary judgment is not appropriate, regardless of whether the nonmoving party presents the court with any countervailing evidence. Id. at 821, 120 S.W.3d at 570.

With this standard of review in mind, we turn to the present case. Under Arkansas’s Statute of Frauds, a “contract for the sale of goods for the price of five hundred dollars ($500) or more is not enforceable by way of action or defense unless there is some writing sufficient to indicate that a contract for sale has been made between the parties and signed by the party against whom enforcement is sought. . . [.]” Ark. Code Ann. § 4-2-201(1) (Repl. 2001). The merchants’ exception, found at Ark. Code Ann. § 4-2-201, provides in pertinent part:

(2) Between merchants if within a reasonable time a writing in confirmation of the contract and sufficient against the sender is received and the party receiving it has reason to know its contents, it satisfies the requirements of subsection (1) against such party unless written notice of objection to its contents is given within ten (10) days after it is received.

Id.

The question of whether a writing constitutes a confirmation of an oral agreement sufficient to satisfy the Statute of Frauds is a question of law for the court. General Trading International, Inc. v. Wal-Mart Stores, Inc., 320 F.3d 831, 835-36 (citing Vess Beverages, Inc. v. Paddington Corp., 886 F.2d 208, 214 (8th Cir. 1989)). In Wal-Mart, the Eighth Circuit said that the confirmatory writing still must satisfy the dictates of section 4-2-201(2) in that it must be “sufficient to indicate . . . the consummation of a contract, not mere negotiations.” Id. at 836. The Eighth Circuit in Wal-Mart held that an e-mail from a seasonal buyer at Wal-Mart failed “sufficiently to indicate the formation or existence of any agreement between the parties” and was devoid of “any language concerning an agreement on the issue of $200,000 for markdowns [on seasonal vine reindeer].” Id.

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Bluebook (online)
231 S.W.3d 720, 365 Ark. 573, Counsel Stack Legal Research, https://law.counselstack.com/opinion/harvest-rice-inc-v-fritz-mertice-lehman-elevator-dryer-inc-ark-2006.