Hartness v. Nuckles, 475 S.W.3d 558

Background

Owner Ashley Hartness contracted orally with Restoration Plus (Rick Nuckles) in 2007 to restore a 1968 Pontiac Firebird; Hartness supplied parts and paid over nineteen invoices in cash.
Hartness inspected and test-drove the car during the project, retrieved the car in December 2009, later returned it once for additional repairs, then kept it and drove ~1,000 miles.
Hartness filed suit in September 2012 asserting breach of express and implied warranty, money had and received (unjust enrichment), conversion, fraud, deceit, and false representation.
The circuit court found warranty claims failed for lack of statutory UCC notice and rejected other claims for lack of proof; bench trial, findings reviewed for clear error on factual issues.
The Supreme Court affirmed: held that if warranties exist in a services contract, the UCC §4-2-607 notice requirement applies; on the facts Hartness failed to give reasonable pre-suit notice.
Court also affirmed denial of unjust enrichment (no evidence of defendant’s wrongful gain) and conversion (finder of fact credited testimony that old parts were worthless/discarded).

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether UCC notice requirement applies to breach-of-warranty claims in a services contract	Hartness: UCC notice applies only to goods, not services, so no pre-suit notice required	Nuckles: If warranties apply to services, UCC notice should apply by analogy; Hartness failed to give notice	If express or implied warranties exist for services, the UCC notice rule (Ark. Code Ann. §4-2-607) applies; Hartness failed to give reasonable notice, so warranty claims barred
Whether Hartness’s pre-suit communications constituted reasonable notice	Hartness: post-possession complaints and trial evidence suffice	Nuckles: No notice until complaint filed 33 months after pickup	Trial finding that first notice was the complaint (33 months later) was not clearly erroneous; unreasonable delay
Unjust enrichment / money had and received — entitlement and measure of recovery	Hartness: entitled to restitution; offered evidence of cost to repair to bargained-for condition	Nuckles: Plaintiff failed to show defendant’s unjustified gain; proofs were speculative	Recovery denied: unjust enrichment requires proof approximating defendant’s wrongful gain; Hartness proved repair costs (expectation), not defendant’s gain, so claim speculative
Conversion — retention/loss of old parts and damages	Hartness: Nuckles kept or destroyed parts and should pay for them	Nuckles: Old parts were damaged, labelled, and discarded as worthless	Trial court’s factual finding that parts were worthless/not improperly converted was not clearly erroneous; affirmed

Key Cases Cited

Williams v. Mozark Fire Extinguisher Co., 318 Ark. 792 (1994) (notice is condition precedent for recovery under UCC warranty provisions)
Gwin v. Daniels, 357 Ark. 623 (2004) (appellate court will not decide issues not presented to or decided by trial court)
Graham Const. Co. v. Earl, 362 Ark. 220 (2005) (UCC principles may guide contract-for-services analysis by analogy)
Haase v. Starnes, 323 Ark. 263 (1996) (UCC provides guidance on contract principles by analogy)
Cinnamon Valley Resort v. EMAC Enters., Inc., 89 Ark. App. 236 (2005) (court of appeals applied UCC-like notice requirement in construction warranty dispute)
McQuillan v. Mercedes-Benz Credit Corp., 331 Ark. 242 (1998) (elements and nature of conversion tort)
Sanders v. Bradley Cnty. Human Servs. Pub. Facilities Bd., 330 Ark. 675 (1997) (measure of restitution is defendant’s gain)
El Paso Prod. Co. v. Blanchard, 371 Ark. 634 (2007) (reversal where restitution award was speculative)