602 S.W.3d 142
Ark. Ct. App.2020Background
- In Dec. 2008 Johnson negotiated to buy a low‑hour 2008 John Deere 8330 from Barton (later Greenway); Barton’s salesperson Ward repeatedly told him the tractor would have about 500–550 hours. Johnson placed a $28,500 deposit.
- When the tractor arrived in Feb. 2009 it showed 886 hours; Johnson rejected delivery, negotiations failed, and he could not obtain a comparable tractor in time to plant optimally.
- Johnson planted 230 irrigated acres late (reduced yield) and left 75 acres unplanted; he sued Greenway in Feb. 2012 for breach of contract and breach of express warranty seeking lost profits and other damages.
- After a bench trial the circuit court found Ward’s statements created an express warranty, awarded $96,600 (lost profits on 230 acres), denied other damages and denied Greenway’s requested tax‑savings credit.
- Both parties appealed; this opinion affirms the trial court on the direct appeal and affirms (rejects) Johnson’s cross‑appeal on procedural grounds.
Issues
| Issue | Plaintiff's Argument (Johnson) | Defendant's Argument (Greenway) | Held |
|---|---|---|---|
| Whether Ward’s statements created an express warranty about hours | Ward’s repeated assurances that the tractor would be low‑hour (≈500–550) formed an express warranty and were a basis of the bargain | Statements were estimates/sales talk because tractor wasn’t on lot and exact hours were unknown | Affirmed: statements were an affirmation of fact forming an express warranty under UCC § 2‑313 when viewed in context and based on credibility findings |
| Whether Johnson failed to mitigate damages | Johnson reasonably searched (dealers/farmers) and rented when available; mitigation efforts were reasonable | Johnson could have purchased, rented earlier, or bought from other dealers and thus failed to mitigate | Affirmed: trial court found mitigation reasonable; burden on breaching party to show otherwise |
| Whether lost‑profit award was speculative | Lost profits on 230 acres are provable using Johnson’s yield history and crop‑insurance data; damages are reasonably certain | Weather, market, and many variables make yield and price projections speculative | Affirmed: court rejected damages for 75 unplanted acres but awarded $96,600 for diminished yield on 230 acres based on historical data and was not clearly erroneous |
| Whether award should be reduced by tax savings from depreciation | (Johnson) tax treatment is a separate IRS issue and Greenway offered no expert proof tying tax savings to damage offset | (Greenway) award must be reduced by expenses saved (tax deduction) received by Johnson | Affirmed: court did not reduce award—no expert proof and tax deduction is a tax/IRS issue |
| Admissibility of settlement letter as prior inconsistent statement | Johnson’s $11/bu settlement letter was impeachment evidence of inconsistent prior statement | Letter was part of settlement negotiations and barred by Ark. R. Evid. 408 | Affirmed: exclusion under Rule 408 was proper; no abuse of discretion |
| Cross‑appeal procedural compliance | Johnson sought review of denied additional damages and prejudgment interest | Greenway urged dismissal of cross‑appeal deficiencies | Affirmed procedural dismissal: Johnson failed to file a proper cross‑appellant brief and required statements, so merits not reached |
Key Cases Cited
- Little Rock Sch. Dist. v. Celotex Corp., 264 Ark. 757 (Ark. 1978) (mixed fact/law question; when evidence is unconflicted, issue becomes one of law)
- Ciba‑Geigy Corp. v. Alter, 309 Ark. 426 (Ark. 1992) (express‑warranty principles under Arkansas law)
- Interstate Oil & Supply Co. v. Troutman Oil Co., 334 Ark. 1 (Ark. 1998) (standard for proving lost profits—not speculative and must be reasonably certain)
- Dawson v. Temps Plus, Inc., 337 Ark. 247 (Ark. 1999) (damages to put injured party in position as if contract performed)
- McKenzie v. Tom Gibson Ford, Inc., 295 Ark. 326 (Ark. 1988) (scope and limits of Rule 408 evidence of compromise)
- Hall v. Freeman, 327 Ark. 720 (Ark. 1997) (cross‑appeal requires a separately presented argument and proper briefing)
- Bill C. Harris Constr. Co. v. Powers, 262 Ark. 96 (Ark. 1977) (doctrine of avoidable consequences / mitigation placed burden on breaching party)