430 S.W.3d 172
Ark. Ct. App.2013Background
- This is a contract interpretation case where the circuit court found an ambiguity in the July 30, 2002 agreement and awarded backpay to Davis.
- Davis, a deputy, was suspended without pay pending two federal indictments (CR127 and CR181/CR187) and signed two letter agreements governing consequences of indictment and backpay.
- CR127 was dismissed without prejudice; Davis returned to work and was later indicted again, leading to a second suspension under a nearly identical October 31, 2002 letter.
- Davis sued Crittenden County seeking backpay plus interest and fees; the County denied liability, asserting no backpay was due under the agreements.
- The trial court found two separate agreements and awarded backpay, prejudgment/postjudgment interest, and fees; the County appealed.
- The majority reversed, holding the July 30, 2002 agreement was unambiguous and did not require backpay when an indictment was dismissed.
- Dissent argued the agreement was silent about dismissal and parol evidence should be admissible to show the parties’ intent from subsequent conduct.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether backpay is owed when an indictment is dismissed | Davis entitled to backpay under July 30, 2002 agreement if dismissal occurred. | Dismissal does not trigger backpay; only acquittal triggers backpay per the agreement. | Backpay not owed; dismissal not equivalent to acquittal under the contract. |
| Whether the two letters should be read together to deny backpay | Combined conduct shows entitlement to backpay under the first agreement despite later events. | Treats July 30 and October 31 agreements as a single comprehensive contract denying backpay if convicted. | July 30, 2002 agreement stands alone; no auto-denial of backpay on dismissal or other charges. |
| Whether the circuit court erred in awarding attorney’s fees | Prevailing status and basis for fees should support Davis’s fee award. | Davis not prevailing on backpay; no basis for fees. | Fees reversed; no prevailing party on damages. |
| Whether prejudgment and postjudgment interest were properly awarded | Interest should accrue as damages on backpay. | Since backpay is not due, interest awards fail. | Interest awards reversed. |
Key Cases Cited
- Wal-Mart Stores, Inc. v. Coughlin, 369 Ark. 365 (Ark. 2007) (contract interpretation—plain language governs when unambiguous)
- Tri-Eagle Enters. v. Regions Bank, 373 S.W.3d 399 (Ark. App. 2010) (ambiguous contracts; interpretation framework)
- Roberts Contracting Co. v. Valentine-Wooten Rd. Pub. Facility Bd., 320 S.W.3d 1 (Ark. App. 2009) (ambiguous terms—resolution by ordinary meaning)
- Foundation Telecommunications, Inc. v. Moe Studio, Inc., 16 S.W.3d 531 (Ark. 2000) (parol evidence to explain ambiguity; conduct can supplement writing)
- Rainey v. Travis, 850 S.W.2d 839 (Ark. 1993) (independent collateral facts; parol evidence limited)
- Reaves v. City of Little Rock, 751 S.W.2d 18 (Ark. App. 1988) (acquittal versus other dispositions in double jeopardy context)