460 S.W.3d 308
Ark. Ct. App.2015Background
- Tycor, as general contractor, was bonded by Travelers and subcontracted with ARC for the Armed Forces Reserve Center project.
- ARC purchased a Cummins generator; Tycor later terminated ARC for poor performance.
- Cummins claimed Tycor owed $59,115.14 for the generator; Tycor did not pay.
- Cummins signed a December 13, 2011 unconditional waiver and release upon final payment, drafted by Tycor for payment of labor/services/equipment; Cummins’ CFO signed it.
- Cummins later provided further service on the generator; Cummins filed a lien claim against Tycor’s bond in March 2012.
- The circuit court found ambiguity in the release, awarding Cummins bond recovery and unjust enrichment; on appeal, the court reverses and holds the release unambiguous, and Tycor wins on waiver and unjust enrichment defenses.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Waiver ambiguity of the lien release | Cummins argues ambiguity allowed bond recovery | Tycor argues the release is unambiguous and waives bond rights | Unambiguous; release waives bond rights |
| Did Cummins waive its bond right by signing the release | Cummins did not knowingly waive due to ambiguity | Signing release constitutes waiver of bond right | Cummins waived bond right by signing the unambiguous release |
| Unilateral mistake as a defense to waiver | No fraud; unilateral mistake cannot void a clear release | N/A | Unilateral mistake does not rescind where release is clear and no fraud shown |
| Unjust enrichment given express contract | Quasi-contract recovery available due to unpaid generator | Express contract bars unjust enrichment | Express contract bars unjust enrichment; not recoverable |
Key Cases Cited
- Wal-Mart Stores, Inc. v. Coughlin, 369 Ark. 365 (2007) (contract interpretation guidance; language meaning governs when unambiguous)
- Elam v. First Unum Life Ins. Co., 346 Ark. 291 (2001) (ambiguity resolved by contract language; de novo review for legal questions)
- Machen v. Machen, 2011 Ark. App. 47 (2011 Ark. App. 47) (ambiguity question treated as question of law)
- Servewell Plumbing, LLC v. Summit Contractors, Inc., 362 Ark. 598 (2005) (existence of valid contract precludes quasi-contract recovery)
- Fitzwater v. Lambert and Barr, Inc., 539 F.Supp. 282 (1982) (unilateral mistake and release; clear, unambiguous language weighs against rescission)