Trammell v. Hooks

2013 Ark. App. 576

• Court: Court of Appeals of Arkansas
• Decided: October 9, 2013
• Docket: CV-12-685
• Status: Published

Opinion

Cite as 2013 Ark. App. 576

ARKANSAS COURT OF APPEALS DIVISION IV No. CV-12-685

Opinion Delivered October 9, 2013

LAWRENCE TRAMMELL APPEAL FROM GREENE COUNTY APPELLANT CIRCUIT COURT [NO. CV-11-35] V. HONORABLE DAVID N. LASER, JUDGE WILLIS HOOKS APPELLEE AFFIRMED

KENNETH S. HIXSON, Judge

This appeal concerns litigation commenced over the sale of real estate and businesses

in Paragould between appellant Lawrence Trammell as seller and appellee Willis Hooks as

buyer. The two men agreed on a sales price of $400,000 on December 14, 2010. Trammell

filed a breach-of-contract action against Hooks in February 2011 claiming that Hooks failed

to pay in accordance with their agreement.1 Hooks denied he breached the contract and

affirmatively pleaded that he tendered $240,000.00 in cash to Trammell on January 3, 2011,

in full payment as an accord and satisfaction of the purchase contract. Trammell denied that

an accord and satisfaction took place. A jury in Greene County Circuit Court disagreed with

Trammell and found in favor of Hooks on Trammell’s breach-of-contract suit. The trial

1 Trammell alleged several other causes of action and requested a preliminary injunction to regain control of the property from Hooks. All of Trammell’s other causes of action and requests for injunctions were dismissed prior to submission of the contract claim to the jury. Cite as 2013 Ark. App. 576

court subsequently awarded Hooks attorney fees for his successful defense. Trammell appeals,

primarily asserting that Hooks did not establish sufficient evidence for the defense of accord

and satisfaction to be submitted to the jury. We disagree and affirm.

An accord and satisfaction generally involves a settlement where a creditor agrees to

accept a different consideration or less money than he is owed. Rouse v. Myers, 2013 Ark.

App. 313. There must be a disputed amount involved and consent to accept less than the

amount in settlement of the whole before acceptance of the lesser amount can be accord and

satisfaction. Id. The elements of accord and satisfaction are the same as the elements of a

contract: offer, acceptance, and consideration. Id. A party asserting accord and satisfaction

as an affirmative defense has the burden to prove these elements. Id. See also Howard W.

Brill, Arkansas Law of Damages § 17:16.

The defense of accord and satisfaction generally presents a question of fact for the jury

to decide. Mass. Mut. Life Ins. Co. v. Peoples Loan & Inv. Co., 191 Ark. 982, 88 S.W.2d 831

(1935); Pruitt v. Dickerson Excavation, Inc., 2010 Ark. App. 849. A dispute over the

indebtedness need not be well founded; it simply must be in good faith. Mass. Mut. Life Ins.

Co., supra. There must be an objective indicator that the parties agreed that the payment

tendered will discharge the debt. Quality Petroleum, Inc. v. Winward Petroleum, Inc., 2011 Ark.

App. 116, 378 S.W.3d 818 (2011); Housley v. Hensley, 100 Ark. App. 118, 265 S.W.3d 136

(2007).

Hooks and Trammell entered into three written agreements regarding Trammell’s

night-club property. The first agreement was a handwritten document dated December 13,

2 Cite as 2013 Ark. App. 576

2010, wherein Hooks agreed to purchase Trammell’s liquor inventory for $6,000. The

second agreement is the one at issue before us. It was dated December 14, 2010, and it was

a typewritten one-page Mortgage Contract signed and notarized, wherein the parties agreed

to a price of $400,000 for the night club properties. The third agreement dated January 4,

2011, was another handwritten document wherein Hooks agreed to purchase three pool tables

from Trammell for $2,700.2

The $400,000 Mortgage Contract recited that $15,000 was due in January 2011 and

monthly payments were to follow, but the contract did not set forth the due dates, amounts

of remaining payments, or an interest rate. The Mortgage Contract was signed by both men

and notarized at Express Copies in Paragould. On that same date, December 14, 2010, a

Warranty Deed conveying the real property from Trammell to Hooks was executed by

Trammell and notarized, but it was not delivered to Hooks.

On January 3, 2011, Trammell asked his accountant to prepare an amortization

schedule that spread the monthly payments over twenty years, set the interest rate at eight

percent, and set the monthly payments as due on the first day of each month (including

January 2011) in the approximate amount of $3,346. The amortization schedule indicated

that at the end of the twenty-year amortization period, the total amount that Hooks would

have paid would be just over $802,000, more than half of it interest. Trammell presented the

2 This agreement provides that the three pool tables were sold for $900 each for a total of $2,400. Obviously, this agreement contains a mathematical error, but the error is not germane to this appeal.

3 Cite as 2013 Ark. App. 576

amortization schedule to Hooks. Trammell testified that Hooks told him that this “was a lot

of interest on the amortization sheet and he had no intention of paying all of that interest.”

Hooks testified that he tendered $240,000 in cash to Trammell on January 3, 2011, to

pay off the Mortgage Contract. Hooks testified that Trammell demanded cash, that he took

$240,000 in cash from his safe, twenty-four stacks of $10,000 each, and that he delivered the

cash to Trammell in the parking lot of Express Copies. No one else witnessed this cash

transaction. Hooks testified that he requested a receipt from Trammell and that Trammell

made a handwritten notation in the right margin of the Mortgage Contract “$240,000.00 PD

off” and drew a large “x” across the body of the Mortgage Contract. Hooks stated that

Trammell then gave him the executed Warranty Deed (which was subsequently filed for

record by Hooks on January 6, 2011, in the Office of the Circuit Clerk.)

Hooks went inside the Express Copies store, and a notary seal was placed by this

additional handwriting. The notary testified that he told Hooks that he would notarize only

the date this was brought to him for a second time, and he believed Hooks wrote the date on

it, “1-3-2011.” The notary did not see Trammell write on the document, nor did he see any

money change hands.

As to the liquor-inventory contract, that handwritten document recites: “12-13-10.

I, Lawrence Trammell, sold my inventory of liq[uor] to Willis Hooks total of $6,000. Willis PD me

$2,000.00 cash and owes me $4,000.00 balance. /s/ Willis Hooks [and] Lawrence Trammell.”

Hooks apparently made another $2,000 payment. The same document has an additional

handwritten note: “PD 1-12-11 2,000.00. Balance 2,000.00” The $2,000 alleged to be

4 Cite as 2013 Ark. App. 576

owed on the liquor-inventory contract was placed in the registry of the court and was

ultimately released to Trammell, in fulfillment of that separate contract.

Hooks requested Arkansas Model Jury Instruction 2431 on accord and satisfaction,

which the trial court gave over Trammell’s objection. Trammell requested, but was denied,

an instruction on “contract modification” pursuant to Arkansas Model Jury Instruction 2425,

which would require Hooks to present clear and convincing evidence of a modification.

Hooks did not want that instruction. The trial court reasoned that AMI 2431 appropriately

covered the law and evidence brought out at trial. Refusal to give a proffered instruction is

reviewed under an abuse-of-discretion standard. Nelson v. Stubblefield, 2009 Ark. 256, 308

S.W.3d 586. It is not error to refuse a proffered instruction when the stated matter is

correctly covered by other instructions. ProAssurance Indem. Co. v. Metheny, 2012 Ark. 461,

__ S.W.3d __.

Boiled down to its essence, Trammell contends that because there was no evidence

upon which to submit an accord-and-satisfaction instruction to the jury, it was error to give

it. A party is entitled to a jury instruction if it is a correct statement of the law and there is

some basis in the evidence to support giving the instruction. Boellner v. Clinical Study Ctrs.,

LLC, 2011 Ark. 83, 378 S.W.3d 745. The trial court gave a model jury instruction, so there

is no question that it was a proper statement of the law in Arkansas. The jury was instructed:

Willis Hooks contends and has the burden of proving that an accord and satisfaction occurred as to Willis Hooks’ obligation under the party’s contract. In order to establish this claim, Willis Hooks must prove each of the three essential propositions. First, that the parties agreed that one would accept from the other a different performance in full satisfaction of the performance required in their contract.

5 Cite as 2013 Ark. App. 576

Second, that both parties understood that their rights and obligations under the original contract would be cancelled by the agreement.

Third, that the party obligated to perform the substituted obligation actually performed it.

If you find from the evidence in this case that each of these propositions has been proved, then your verdict should be for Willis Hooks.

The trial court was required to determine whether there was some evidence of a

dispute over what was owed and a manifestation of consent to accept less than what was

owed, in order to support giving this instruction. We hold that the trial court did not err.

By his own testimony, Trammell substantially increased the price by adding interest to the

twenty-year payment schedule he prepared, and he testified that Hooks did not want to pay

the interest. This provided “some evidence” of a dispute over the debt upon which to submit

the issue to the jury. There were also objective indicators that the parties agreed to a tender

of $240,000 on January 3, 2011, as payment in full on the Mortgage Contract. Hooks

testified to delivering to Trammell $240,000 in cash; Trammell testified that the handwriting

that indicated “P.D. off” on the Mortgage Contract looked like his handwriting; and Hooks

testified to Trammell handing him the Warranty Deed, which he recorded three days later.

Whether the money actually changed hands was for the jury to decide. We affirm the giving

of the accord-and-satisfaction instruction.

There was evidence that Hooks made a $2,000 payment to Trammell subsequent

to the $240,000 “accord and satisfaction” payment. Trammell amplifies his accord-and-

satisfaction argument by asserting that Hooks’s subsequent payment on the liquor purchase

agreement, after the $240,000 cash payment, meant that there was not a full, final payment

6 Cite as 2013 Ark. App. 576

of accord and satisfaction on the Mortgage Contract. We do not agree. It is abundantly clear

that the $2,000 payment referred to by Trammell was a payment for the separate liquor

purchase agreement and not a payment on the Mortgage Contract.

As stated previously, the trial court did not abuse its discretion in refusing the contract-

modification instruction because the accord-and-satisfaction instruction adequately covered

the subject in line with the defense Hooks asserted. Indeed, Trammell disagreed that a

contract modification took place, undercutting his insistence that this was the appropriate

instruction.

Lastly, Trammell argues that because he is entitled to reversal, then the award of

attorney fees must be reversed. He does not contest the amount or reasonableness of the

attorney fees. Because we disagree that Trammell has demonstrated reversible error, we affirm

the award of attorney fees. See Baber v. Baber, 2011 Ark. 40, 378 S.W.3d 699.

Affirmed.

GRUBER and WOOD, JJ., agree.

Hunter J. Hanshaw and Brian G. Brooks, Attorney at Law, PLLC, by: Brian G. Brooks,

for appellant.

Wilcox & Lacy, PLC, by: Tony L. Wilcox and Dustin H. Jones, for appellee.