Dorsett v. Buffington
429 S.W.3d 225
Ark.2013Background
- Dispute among owners of an oil-drilling rig: Buffington (majority owner, 62.5%) and Dorsett (through Diamond, 37.5%) after Williamson assigned his interest to Buffington.
- Multiple prior suits and a 2008 written Compromise Agreement setting a declining sale-price formula and allocation of sale proceeds.
- Louisiana proceedings (a summary Rule to Enforce Compromise) resulted in a judgment finding the Compromise agreement remains in effect and expressly reserving parties’ rights to make future claims upon sufficient proof.
- Buffington sued in Arkansas for breach of contract and conversion, alleging Dorsett failed to provide a required rig inventory, preventing timely sale and causing lost profits.
- Jury found Dorsett liable for breach of contract and awarded $335,000 in lost-profits; also found for conversion (no damages awarded for conversion). Trial court awarded $335,000 actual damages, $99,630 attorney’s fees, and $100,591.77 prejudgment interest (total $535,221.77).
- Dorsett appealed, arguing res judicata, insufficiency/speculation of lost-profits damages, error in awarding prejudgment interest, and failure to prove conversion damages.
Issues
| Issue | Plaintiff's Argument (Buffington) | Defendant's Argument (Dorsett) | Held |
|---|---|---|---|
| Res judicata bar from Louisiana judgment | Louisiana judgment did not resolve damages; summary proceeding precluded recovery of damages there and expressly reserved future claims | Louisiana judgment precludes relitigation in Arkansas | Not barred: summary proceedings in LA cannot award damages and LA judgment expressly reserved rights, so res judicata does not apply |
| Sufficiency of lost-profits damages | Lost profits provable with reasonable certainty via testimony (broker/Williamson) and Compromise timeline; breach (no inventory) prevented obtaining offers | Award is speculative, based on potential not actual/imminent sale | Affirmed: substantial evidence supports the $335,000 lost-profits award under Louisiana law; testimony and circumstances sufficient |
| Prejudgment interest award | Prejudgment interest compensates withheld damages from loss to judgment | Damages were not definitely ascertainable in time/amount, so prejudgment interest improper | Reversed: prejudgment interest improper because jury awarded $335,000 not tied to an exact step-down date or amount per contract formula; time/amount not definitely ascertainable |
| Conversion judgment without damages | Conversion is established by unlawful interference with movables; actual damages need not be established for liability | Conversion requires proof of damages; absence of damages invalidates conversion recovery | Affirmed in part: conversion verdict stands despite zero damages because jury instruction (LA law) did not require damages as an essential element |
Key Cases Cited
- Cater v. Cater, 311 Ark. 627 (res judicata/issue preclusion principles)
- Miles v. Teague, 251 Ark. 1059 (effect of express reservation of rights in judgment)
- Clay v. Clay, 389 So. 2d 31 (La. 1979) (scope and purpose of Louisiana summary proceedings)
- Banque De Depots v. Bozel Mineracao E Ferroligas, 728 So. 2d 533 (La. Ct. App. 1999) (motions to enforce settlements characterized as summary proceedings)
- Major v. Hall, 263 So. 2d 22 (La. 1972) (summary proceedings do not provide for recovery of damages)
- Scenicland Constr. Co. v. St. Francis Med. Ctr., Inc., 936 So. 2d 247 (La. Ct. App. 2006) (lost profits recoverable if provable with reasonable certainty)
- Breechen v. News Group, L.P., 105 So. 3d 1011 (La. Ct. App. 2012) (proof of lost profits need not be mathematically precise)
- Ed Bulliard Co. v. Foretich-Zimmer Constr. Co., 451 So. 2d 29 (La. Ct. App. 1984) (absence of independent corroboration affects weight, not necessarily admissibility, of lost-profit evidence)
- Ozarks Unlimited Resources Co-op., Inc. v. Daniels, 333 Ark. 214 (prejudgment interest as compensation for wrongfully withheld recoverable damages)
- Woodline Motor Freight, Inc. v. Troutman Oil Co., 327 Ark. 448 (prejudgment interest requires ascertainable damages)
- Mitcham v. First State Bank of Crossett, 333 Ark. 598 (damages must be definite in time and amount for prejudgment interest)
- Kutait v. O’Roark, 305 Ark. 538 (certainty requirement for prejudgment interest)
- Dual Drilling Co. v. Mills Equip. Inv., Inc., 721 So. 2d 853 (La. 1998) (elements of conversion under Louisiana law)