Precision Steel Warehouse, Inc. v. Anderson-Martin MacHine Co.

854 S.W.2d 321, 313 Ark. 258, 1993 Ark. LEXIS 321
CourtSupreme Court of Arkansas
DecidedMay 24, 1993
Docket92-1012
StatusPublished
Cited by18 cases

This text of 854 S.W.2d 321 (Precision Steel Warehouse, Inc. v. Anderson-Martin MacHine Co.) 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
Precision Steel Warehouse, Inc. v. Anderson-Martin MacHine Co., 854 S.W.2d 321, 313 Ark. 258, 1993 Ark. LEXIS 321 (Ark. 1993).

Opinions

Jack Holt, Jr., Chief Justice.

Appellant is Precision Steel Warehouse, Inc. (PSW), an Illinois corporation which brokers steel between mills and manufacturers. Appellee, Anderson-Martin Machine Company (Anderson-Martin), is an Arkansas company engaged primarily in machining metal parts. In May and September 1990, respectively, Anderson-Martin placed two orders with PSW for a certain type of steel to be utilized in the making of a parachute part for its customer, U.S. Forgecraft (Forgecraft), who held contracts with the U.S. Department of Defense (DOD). Anderson-Martin bought the steel from PSW and in turn made pieces for sale to Forgecraft. The precise wording on the purchase orders sent to PSW was “CR carbon steel strips, half hard #2 temper, dull finish, sheared edges, flat, shear across the grain as we form this material. Certify to QQ-S-698 and send certs.” This second phrase required that the steel comply with federal specification QQ-S-698 and that PSW send Anderson-Martin the steel mill certifications which showed the chemical makeup of the steel. There was no reference in the purchase order as to the particular chemical makeup of the steel.

Anderson-Martin received the first shipment of steel from PSW on August 1, 1990 without accompanying certification, processed it and sent some of its product to Forgecraft. On August 9, after several requests, PSW forwarded the steel shipment’s certifications to Anderson-Martin. That same day, Anderson-Martin electronically sent the certifications to Forgecraft. The quality control manager at Forgecraft called Anderson-Martin that afternoon and informed Anderson-Martin that its product was unacceptable because it contained too much phosphorus and was outside the allowable phosphorus range for steel under specification QQ-S-698.

Anderson-Martin called PSW to verify the chemical composition of the steel shipment since the phosphorus level was unusually high. Some three and one-half months later, on November 19, 1990, PSW sent Anderson-Martin the original steel mill certifications PSW received from its supplier, LTV Steel Company, with the chemical analysis. Anderson-Martin then compared the certifications it had first received from PSW with these original steel mill certifications from LTV and found that the phosphorous level of the steel shipment was indeed nonconforming. The certifications specified that the steel sent to Forgecraft had a phosphorus level of .128 percent while the maximum level allowed by government specification was .04 percent. Forgecraft rejected all the parts they had received from Anderson-Martin and were refunded their purchase money.

As a result, Anderson-Martin sued PSW for breach of warranty, breach of contract, and negligence in Sebastian County Circuit Court to recover $12,517.98, together with interest from the time on which damages were determinable and statutory attorneys’ fees. The jury, by general verdict, awarded Anderson-Martin the sum of $12,517.67. The trial judge additionally awarded attorneys’ fees in the amount of $2,500 to Anderson-Martin and costs. This appeal followed.

MOTION FOR DIRECTED VERDICT

PSW first argues that the trial court should have granted its motion for a directed verdict made at the close of Anderson-Martin’s evidence and again at the close of all the evidence because the only issue in this case was a question of law in that it involved the interpretation of the DOD specification, QQ-S-698, which is “federal law,” and since Ark. R. Civ. P. 44.1 requires the court and not the jury to determine an issue concerning the law of any jurisdiction or governmental unit outside the state, the court erred in presenting this question to the jury when it was a question of law.

A motion for a directed verdict should be granted only if there is no substantial evidence to support the verdict. Muskogee Bridge Co. v. Stansell, 311 Ark. 113, 842 S.W.2d 15 (1992); Bank of Malvern v. Dunklin, 307 Ark. 127, 817 S.W.2d 873 (1991). Substantial evidence is defined as that which is of sufficient force and character to compel a conclusion one way or another; it must force or induce the mind to pass beyond suspicion or conjecture. Loewer v. National Bank of Ark., 311 Ark. 354, 844 S.W.2d 329 (1992).

We recently summarized our standard of review for the denial of a directed verdict:

[I] n addressing the issue of whether a directed verdict should have been granted, we must view the evidence in the light most favorable to the party against whom the verdict is sought and give it its highest probative value, taking into account all reasonable inferences deducible from it. Where the evidence is such that fair-minded people might have different conclusions, then a jury question is presented, and the directed verdict should be reversed.

Lytle v. Wal-Mart Stores, Inc., 309 Ark. 139, 143, 827 S.W.2d 652, 654 (1992)(citing Howard v. Hicks, 304 Ark. 112, 113, 800 S.W.2d 706, 707 (1990)). See Wingate Taylor-Maid Transp. Inc. v. Baker, 310 Ark. 731, 840 S.W.2d 179 (1992); Ciba-Geigy Corp. v. Alter, 309 Ark. 426, 834 S.W.2d 136 (1992).

We cannot agree with PSW’s rationale in asking the trial court to direct a verdict in its favor as a matter of law rather than submitting this case to the jury. First, since the specifications' in question, QQ-S-698, are terms and conditions relating to certain government contracts and are not matters of “federal law,” Ark. R. Civ. P. 44.1 does not apply. Also, Ark. R. Civ. P. 44.1 does not call for the “interpretation” of law but merely provides for notice and “determination” of foreign law. Secondly, the reference to “federal law” begs the issue, since we are not dealing with a question of law which the trial court should have determined, but factual matters relating to the construction of a contractual agreement between the parties in litigation which were properly submitted to the jury.

As a practical matter, this case boils down to two primary issues. First, was the contractual language contained in Anderson-Martin’s purchase order sufficient in terms of custom and practice in the trade to provide PSW as a vendor of steel with sufficient information with which to meet the requirement of DOD’s specifications contained in the order? Second, was PSW entitled to a directed verdict as there was insufficient evidence adduced at trial to support the jury’s verdict favoring Anderson-Martin?

PSW argues that a particular, specified chemical composition was an option that Anderson-Martin should have indicated on its purchase order, and absent this indication, PSW had no duty to provide a certain composition.

PSW relied on Section 6.2 of QQ-S-698, entitled “Ordering Data,” which states:

Purchasers should exercise any desired options offered herein, and procurement documents should specify the following:
(a) Title, number, and date of this specification.
(b) Quality or temper required.
(c) Whether killed steel is required.
(d) Chemical composition.

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Precision Steel Warehouse, Inc. v. Anderson-Martin MacHine Co.
854 S.W.2d 321 (Supreme Court of Arkansas, 1993)

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Bluebook (online)
854 S.W.2d 321, 313 Ark. 258, 1993 Ark. LEXIS 321, Counsel Stack Legal Research, https://law.counselstack.com/opinion/precision-steel-warehouse-inc-v-anderson-martin-machine-co-ark-1993.