Quality Petroleum, Inc. v. Windward Petroleum, Inc.
2011 Ark. App. 116
| Ark. Ct. App. | 2011Background
- Quality Petroleum entered a five-year contract with Kwik Kar Lube in 2006 to supply 106,572 units at $0.37, with a quarterly minimum of 5,329 units and a working-capital advance of $1,394.03 per quarter.
- The contract provides that Kwik Kar’s default terminates Quality’s obligations and requires Kwik Kar to refund a calculated amount upon default.
- After June 30, 2008, Kwik Kar reportedly failed to meet minimum quarterly purchases; Windward began delivering to Kwik Kar and discussed paying off the balance to terminate the contract with Kwik Kar.
- Quality sent a January 20, 2009 demand letter to Windward warning that Windward’s interference would be tortious; Quality later sued Windward for tortious interference (April 20, 2009) alleging Windward induced or caused a breach/termination by Kwik Kar and damages from lost profits.
- In July 2009 Kwik Kar terminated the contract and paid $14,645.99 per paragraph six; the check stated it was a payment for release from the contract dated 4/4/06.
- The trial court granted summary judgment in Windward’s favor, holding that accord and satisfaction extinguished Quality’s tort claim; the appellate court reversed, holding that accord and satisfaction did not defeat the tort claim and that material facts remained as to breach and damages.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does accord and satisfaction bar the tortious-interference claim? | Quality contends accord and satisfaction does not foreclose a separate tort claim. | Windward argues the settlement with Kwik Kar extinguishes Quality’s claim for interference. | No; accord and satisfaction does not necessarily extinguish the tort claim. |
| Was there a breach by Kwik Kar and damages beyond the refund? | Quality presented evidence Kwik Kar breached and caused damages beyond the refund. | Windward asserts undisputed facts show settlement foreclosed contract damages. | There are genuine issues of material fact on Kwik Kar’s breach and on damages beyond the refund. |
| Is Windward liable for damages for tortious interference beyond contract damages? | Quality may recover tort damages including damages beyond the contract and potential injunctive/punitive relief. | Windward contends no further damages beyond contract are recoverable or proven. | Yes; tort damages beyond the contract may be recoverable where supported by evidence. |
Key Cases Cited
- Pledger v. Carrick, 362 Ark. 182 (2005) (summary judgment standard; movant must show no genuine issues)
- West Memphis Adolescent Residential, LLC v. Compton, 2010 Ark.App. 450 (Ark. App. 2010) (elements of tortious interference; improper conduct requirement)
- Vowell v. Fairfield Bay Cmty. Club, Inc., 346 Ark. 270 (2001) (elements of tortious interference and improper conduct)
- Glover v. Woodhaven Homes, Inc., 346 Ark. 397 (2001) (accord and satisfaction elements and impact on liability)
- El Paso Prod. Co. v. Blanchard, 371 Ark. 634 (2007) (summary-judgment considerations; breach requirement for interference)
- Waste Mgmt. of Ark., Inc. v. Roll Off Serv., Inc., 88 Ark. App. 343 (2004) (damages available for torts beyond contract; Restatement reference)