Trakru v. Mathews
2014 Ark. App. 154
| Ark. Ct. App. | 2014Background
- A Stone County jury awarded Mathews $570,000 in compensatory and $500,000 in punitive damages against Trakru for breach of contract, breach of fiduciary duty, and fraud.
- Trakru sought reversal claiming error on directed verdicts, attorney fees, cross-examination, and fraud instruction; the appellate court affirmed.
- Mathews, former owner of Stone County Ironworks, engaged in a 2003 plan with Trakru to form Metal Arts, Inc. to acquire Ironworks’ assets and assets negotiations included a handwritten stock-option agreement.
- After Ironworks assets closed July 9, 2003, Trakru bought assets and later sold Metal Arts; Mathews learned of related arrangements and sued in January 2004 for fraud, breach, and fiduciary duty.
- The circuit court entered judgment for Mathews; on appeal, Trakru challenged directed verdicts, damages, and evidentiary rulings, all of which were affirmed; fees and punitive damages were upheld.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Directed verdict on contract | Mathews argues substantial evidence supported contract claim. | Trakru argues lack of definite terms/consideration. | Denial of directed verdict affirmed; substantial evidence supported contract claim. |
| Fraud verdict sufficiency | Mathews contends misrepresentations were material and intentional. | Trakru contends representations were promissory and non-actionable. | Fraud verdict affirmed; substantial evidence supported intentional misrepresentation. |
| Limitation of cross-examination | Mathews argues cross-exam should have probed Bernstein’s knowledge. | Trakru asserts discretion to limit cross-exam to prevent prejudice. | No manifest abuse; cross-examination limitation affirmed. |
| Fraud jury instruction | Mathews contends instruction properly stated deceit standard. | Trakru claims instruction misstates law. | Issue not preserved; instruction not reviewed on merits. |
| Attorney fees and punitive damages | Mathews argues fee award proper; punitive damages tied to fraud. | Trakru challenges certain remedies but not amounts. | affirmed; attorney fees and punitive damages upheld. |
Key Cases Cited
- Jenkins v. APS Ins., LLC, 431 S.W.3d 356 (Ark. App. 2013) (directed verdict review requires substantial evidence)
- Roetzel v. Coleman, 374 S.W.3d 166 (Ark. App. 2010) (definite terms for option contracts)
- Essential Accounting Sys., Inc. v. Dewberry, 428 S.W.3d 613 (Ark. App. 2013) (mutuality in unilateral contracts not required)
- Simmons v. Simmons, 249 S.W.3d 843 (Ark. App. 2007) (contemporaneous consideration rule)
- Stine v. Sanders, 987 S.W.2d 289 (Ark. App. 1999) (promissory misrepresentation exception exists)
- P.A.M. Transp., Inc. v. Ark. Blue Cross & Blue Shield, 868 S.W.2d 33 (Ark. 1993) (promissory representations requiring intent to deceive)
- Lindsey v. Watts, 621 S.W.2d 679 (Ark. 1981) (jury resolves conflicts in evidence)