Douglas v. Shelby Taylor Trucking, Inc.
2017 Ark. App. 156
| Ark. Ct. App. | 2017Background
- Michael Douglas sold timber via a written Timber Deed prepared by his agent (Derrell Taylor of Taylor Management) to Shelby Taylor Trucking for $65,837.80; Douglas received $59,254.02 and Taylor Management a 10% commission.
- The Timber Deed unambiguously required logging to be completed by December 31, 2014, and stated title to remaining timber after that date would revert to the seller; it also prohibited wet-weather logging.
- Shelby encountered unusually wet conditions in 2013–2014 and requested an extension through Douglas’s agent; Derrell emailed Douglas on Nov. 12, 2014 seeking guidance and said 10% was a common charge for extensions.
- Douglas replied to his agent on Nov. 13, 2014 but did not communicate any extension to Shelby or otherwise modify the Timber Deed; the deed expired on Dec. 31, 2014.
- Shelby sued Douglas for declaratory relief, unjust enrichment, and injunctive relief; the trial court found the deed unambiguous, that Shelby failed to prove impossibility, but nonetheless awarded Shelby $59,254.02 on an unjust-enrichment theory because Douglas failed to communicate and custom favored extensions.
- On appeal, the Arkansas Court of Appeals reversed, holding that an express, unambiguous contract covering the subject matter precludes recovery in unjust enrichment when exceptions (impossibility, rescission, fundamental mistake) do not apply.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether unjust enrichment is available despite an express, unambiguous Timber Deed | Shelby: equity should award restitution because wet weather made performance impracticable and Douglas’s failure to grant/communicate an extension made retention of money unjust | Douglas: the written deed governed; Shelby assumed the wet-weather risk and no extension was granted — therefore no quasi-contract recovery | Court: Reversed trial court — unjust enrichment unavailable because a clear express contract governed and exceptions (impossibility, rescission, mistake) were not proven |
| Whether Shelby proved impossibility/impracticability of performance | Shelby: weather made harvesting impossible/impracticable within the contract term | Douglas: evidence showed some dry periods and Shelby failed to prove impossibility by preponderance; Shelby assumed the contractual risk | Court: Trial court found Shelby failed to prove impossibility; appellate decision rested on existence of valid contract rather than reweighing impossibility |
| Whether trade custom (extensions customary) can alter unambiguous contract rights | Shelby: custom and agent communications justified relief | Douglas: customs cannot override an unambiguous written deed; no binding extension existed | Court: Customs do not defeat a clear written contract; trial court erred to rely on trade usage to impose restitution |
| Whether owner’s silence/inaction can create unjust enrichment | Shelby: Douglas’s failure to respond and retain proceeds made retention inequitable | Douglas: he exercised his contractual right; silence does not create liability when contract allows reversion of title | Court: One free from fault may exercise contractual rights; silence did not create equitable obligation absent applicable exception |
Key Cases Cited
- First Nat’l Bank of DeWitt v. Cruthis, 360 Ark. 528, 203 S.W.3d 88 (2005) (defines unjust-enrichment elements)
- Campbell v. Asbury Auto., Inc., 2011 Ark. 157, 381 S.W.3d 21 (2011) (a person free from fault cannot be held unjustly enriched for exercising a legal right)
- Deutsche Bank Nat’l Trust Co. v. Austin, 2011 Ark. App. 531, 385 S.W.3d 381 (2011) (express contract ordinarily precludes quasi-contract recovery; limited exceptions exist)
- Servewell Plumbing, LLC v. Summit Contractors, Inc., 362 Ark. 598, 210 S.W.3d 101 (2005) (valid written contract bars recovery in quasi-contract for same subject matter)
- Stokes v. Stokes, 2016 Ark. 182, 491 S.W.3d 113 (2016) (deeds treated as contracts between grantor and grantee)
- Frigillana v. Frigillana, 266 Ark. 269, 584 S.W.2d 3 (1979) (standards on impossibility/impracticability in contract contexts)