|, Acker Construction, LLC, appeals from a judgment entered by the Scott County Circuit Court in favor of appellee, Hanh Billy Tran, in the amount of $68,307 for the cost of repairing seven chicken houses that appellant built for appellee and for appellee’s lost profits resulting from appellant’s delay in performance. On appeal, appellant raises four points: (1) the trial court erred in permitting appellee to introduce the testimony of an expert witness that appellant had hired to inspect the allegedly defective chicken houses before trial; (2) appellee’s proof of lost-profit damages was legally insufficient; (3) the trial court abused its discretion in denying appellant’s motion for a new trial because the jury’s verdict for the cost-of-repair damages was not supported by the evidence; and (4) the trial court erred in refusing to permit appellant to introduce evidence of settlement negotiations. We affirm on all points.
In September 2005, appellant entered into a transaction set forth in two written contracts to build seven chicken houses for Sharon Wadkins and her husband in Wal-dron, |2Arkansas. One contract provided for the construction of four chicken houses for $390,340. The contract set forth the amounts that appellant could draw upon the completion of various stages of construction, with a final payment of $39,032 due upon completion. The other contract was for the completion of three chicken houses for $292,755 and also provided for draws and a final payment of $29,275 upon completion. Both contracts stated that appellant would not be liable for any consequential damages as a result of any defect in products or workmanship.
In November 2005, Sharon and Rory Wadkins assigned their interest in the contracts to appellee, who purchased the real estate upon which the chicken houses were
Appellant engaged an expert as a consultant. In the fall of 2008, its representatives and attorney met with the expert, Clinton Holland of H & H Construction, with appellee at the farm so that Holland could review what appellee perceived to be the defects in the broiler houses. His estimate of the cost to make the repairs requested by appellee was $34,716.15. Later, appellant informed appellee that it had decided not to call Holland as a witness at trial. After appellee issued a subpoena for Holland to appear at trial, Holland called appellee’s attorney and informed him that he did not want to attend and suggested that, instead, he send a copy of his estimate of repairs by facsimile. Holland sent this information but did not otherwise discuss his testimony with appellee’s attorney.
Appellant filed a motion in limine to exclude testimony about appellee’s lost profits on the ground that they were speculative and were consequential damages, for which it had not agreed to be liable. Appellee responded that the lost profits he sought were not consequential damages, but were the natural, proximate result of appellant’s breach of contract. He stated that Sharon Wadkins would testify that she had informed Henry Quinn, appellant’s salesman, that she would only enter into a contract with appellant if it would agree to build four chicken houses first so that she could have birds in place and be drawing income while the other three chicken houses were being completed. He also stated that he and Wadkins would testify about the calculation of lost-profit damages with sufficient 14 specificity to take the claim out of the realm of speculation. Appellant filed a second motion in limine to exclude the testimony of Clinton Holland on the ground that his opinion was privileged under Arkansas Rule of Civil Procedure 26(b)(4)(B). In response, appellee asserted that Rule 26 did not apply to this situation because Holland’s identity as an individual with knowledge of the facts was already known to appellee.
On the first day of trial, the parties argued about the motions in limine, as well as the evidence (consisting of two letters from appellee to appellant) that appellant sought to introduce about settlement negotiations. The trial court denied the motions in limine and refused to admit the evidence of settlement negotiations. Henry Quinn; Randy Acker, appellant’s owner; Buddy Bean, whose company sold the
The jury returned a verdict for appellant of $0. On another form, the jury returned the following verdict:
15We, the jury find by a preponderance of the evidence in favor of Hanh Billy Tran and award him damages against Acker Construction, LLC in the amount below for the following element of damage.
COST OF REPAIR: $ $34,716.00
LOST PROFITS: $33591.00
Awarded to Tran
Lien released?
M. Tran in turn pays Acker the $68,307 he owes. Lien to be released. NINE OF TWELVE JURORS WHO AGREE TO THE ABOVE:
Mr. Tran to pay the 68307 upon release of the lien.
On October 29, 2010, the circuit court entered the following judgment:
II.
The jury herein entered an award of damages in favor of Billy Tran against Acker Construction in the amount of $136,614.00 and further directed that out of this $136,614.00, Mr. Tran was to pay Acker Construction $68,307.00 as an offset for the release of the lien filed by Acker Construction against Mr. Tran’s property. The jury further specifically found that of the remaining $68,307.00 of said judgment, $34,716.00 was attributable to the cost of repairs and $33,591.00 was attributable to lost profits. Attached hereto as Exhibit “A” is a copy of the verdict form rendered in favor of Hanh Billy Tran in this matter. Attached as Exhibit “B” is a verdict form awarding $0.00 in damages to Acker Construction, LLC.
III.
The net result of this verdict is a judgment in favor of Hanh Billy Tran against Acker Construction in the amount of $68,307.00 consisting of $34,716.00 for the costs of repairs and $33,591.00 in lost profits. This judgment shall bear interest at the rate of 6% per annum until paid. Interest shall accrue from the date of the entry of this Judgment herein and continue until said judgment is paid.
IV.
The lien filed herein by Acker Construction against Hanh Billy Tran is hereby declared void and set aside, the same being attached hereto and incorporated herein as Exhibit “C”.
| ¡Appellant then filed a motion for judgment notwithstanding the verdict (JNOV) and for new trial, which the trial court denied. Appellant filed a timely notice of appeal from the judgment and from the order denying the posttrial motion.
In its first point, appellant argues that the trial court erred in permitting appellee to call Holland as a witness. It asserts that in doing so, appellee made an “end run” around the privilege existing
The trial court ruled correctly on this issue because Rule 26, which is a rule of discovery, does not apply to this situation; appellant voluntarily disclosed Holland to appellee and brought him to inspect appellee’s chicken houses in appel-lee’s presence. Further, appellant’s voluntary disclosure that Holland was an expert in this subject and that he had an opinion about the repairs, based upon his personal inspection, amounted to a waiver of any possible privilege under this discovery rule. Waiver is the intentional relinquishment of a known right, done with the intent to forever be deprived of its benefits. Spann v. Lovett & Co.,
Even if Rule 26(b)(4)(B) had applied, appellee’s use of Holland as an expert was within the exception to that rule, which permits discovery upon a showing of' exceptional circumstances under which it is impractical for the party seeking discovery to obtain facts or opinions on the same subject by other means. Appellee’s attorney informed the trial court that he was unable to obtain another expert to testify about the repairs. Appellee testified that he had called at least ten different contractors that built chicken houses to give him an estimate of the cost of repairs and that they had all turned him down after he told them about appellant’s involvement. Additionally, the trial court made sure that the jury was not informed that appellant had procured Holland’s opinion as a consulting witness and had chosen not to call him as a witness. See Ark. State Highway Comm’n v. Johnson,
In its second point on appeal, appellant argues that the trial court erred in permitting appellee to present evidence of lost profits, which it contends are consequential damages that | smay only be awarded if they were within the reasonable contemplation of the parties (the “tacit-agreement” test). Appellant contends that there was no breach and that lost profits were not within the reasonable contemplation of the parties in this case because they did not agree on a date of completion; therefore, the trial court should have granted its motion for directed verdict or JNOV. Appellant further contends that ap-pellee’s proof of lost-profit damages was legally insufficient because the calculations
A directed-verdict motion is a challenge to the sufficiency of the evidence, and when reviewing the denial of a motion for a directed verdict, we determine whether the jury’s verdict is supported by substantial evidence. Spann, supra. The same rule applies to motions for JNOV. Gassman v. McAnulty,
The evidence supported appellee’s position that the parties agreed that four houses would be completed first. Questions of fact relating to the formation of contracts are for the trier of fact to determine, Ingersoll-Rand Co. v. El Dorado Chem. Co.,
Sharon Wadkins testified that she insisted to Henry Quinn that she would accept appellant’s bid only if it would agree to build four houses to completion before building the remaining three houses, so she could have the birds from Tyson in place in the first four houses and be drawing income; this schedule would generate a quicker stream of income and reduce the amount of interest on the loan. Wadkins also stated that, in her twenty-five years as a banker, she had seen this type of transaction handled this way in the past.
Further, the contract’s failure to specify a completion date was not significant. The rule is well established that, where there is no provision as to the time of the performance of the contract, the law implies that it must be performed 'within a reasonable time. Id. What would be a reasonable time depends upon the intention of the parties at the time the contract Imwas made, the facts and circumstances surrounding its making, or, in general, what was contemplated by the parties at the time. Id. Both Henry Quinn and Randy Acker testified that a reasonable time frame to build a chicken house was three weeks. Sharon Wadkins stated that Quinn had told her that appellant would start on the project with a big crew and complete it quickly. Thus, the jury had before it evidence of a reasonable time frame in which the houses could have been completed.
We also hold that the evidence of lost-profit damages offered by appellee was sufficiently reliable. While lost profits will not be allowed as damages if the trier of fact is required to speculate as to the fact or amount of profits, less certainty is required to prove the amount of lost profits than is required to show that profits were lost. Spann, supra. If it is reasonably certain that profits would have resulted had the contract been carried out, then the complaining party is entitled to recover. Id. Loss may be determined in any manner that is reasonable under the circumstances. Id. The fact that a party can state the amount of damages he suffered only approximately is not a sufficient reason for disallowing damages if, from the approximate estimates, a satisfactory conclusion can be reached. Id. It has also been held that damages may be approximated, that a damage figure will be upheld if an amount approximating that figure can be ascertained from the evidence, and that a damage award need not correspond in amount to the proof adduced by either party. Id. When, from the nature of the case, the amount of damages cannot be estimated with certainty, or only a part of them can be estimated, the question should go to the jury. Id.
Sharon Wadkins, who is a senior vice president of lending (primarily commercial) with Community National Bank in Waldron, testified that she had been in that business for twenty-five years; that she had dealt with projects like the one involved in this case; and that she had personally operated chicken houses. The trial court believed that, based upon her experience as a banker and as an operator of chicken houses, while dealing with Tyson and other companies, she had acquired sufficient experience to formulate an opinion about | ^appellee’s lost profits. Wad-kins stated that the “grow-out” period with Tyson was thirty-eight days per flock of birds, at which time Tyson would pick them up and, soon after, send a check and put in a new batch of birds. Wadkins stated that, after calculating the gross income from each batch, less twenty-five percent in expenses, the profit should have been $28,714 per flock. She testified that appellant’s delay probably caused appellee to lose the income from two, possibly
In its third point, appellant argues that the trial court abused its discretion in refusing to grant its motion for new trial based on the cost of repairs under Arkansas Rule of Civil Procedure 59(a)(6), which provides that a new trial may be granted when the verdict is clearly contrary to the preponderance of the evidence. Appellant contends that it substantially performed under the contract and was, therefore, entitled to recovery of the contract price, less the cost of repairs as established by appellee.
Appellant misunderstands the jury verdict. The trial court interpreted the verdict as providing that appellant was entitled to the $68,307 due under the contract and that the jury found that appellee’s total damages were $136,614, against which the $68,307 was to be offset; thus, the remainder of $68,307 was the amount due to appellee. Of the net verdict, the Injury attributed $34,716 to the cost of repairs and $33,591 to lost profits. Therefore, it is apparent that the jury found that appellant did substantially perform and that it was entitled to $68,307; however, it
In its fourth point, appellant argues that the trial court erred in denying its request to enter into evidence appel-lee’s statements about compromise contained in two letters. In an October 7, 2006 letter to Henry Quinn (Plaintiffs Exhibit 22) appellee stated:
Regarding to our conversation over the phone earlier today, I believe someone is interfering with our goal to accomplish this insulation matter to meet the term of the two contracts rated R-19. Someone was instructing the insulation crew to blow in certain number of bags into the attic, instead of blowing in enough insulation throughout the attic rated R-19. You know, I wanted to pay Randy Acker as bad as he want his security payment. Therefore, you need to make it clear to the insulation crew that they have to do it right according to the term of the contract.
I only checked House Number 3, 4, 5, 6, within five feet from the corner the insulation is about 3 to 4 inches thick. I have asked them to go back to blow in more insulation to 5 thick, instead they call Steve and Steve called you to B.S. a deception method. The insulation crew has until Wednesday October 11, 2006. Also, since the lien had been filed, I need a copy of filed release of lien than I will release the security payment.
On December 4, 2006, appellee sent the following letter (Plaintiffs Exhibit 23) to appellant’s attorney:
In regarding to your imprudent “as is” letter, your client’s scatterbrained that created the problem to begin with, don’t tell me about breach of contract. Your client blew in additional 843 bags of insulation in the attics; still your client did not full fill the terms of the contracts. In every house, about one to two feet from the corners the insulation is about 3 inches thick.
Iifil am a man of honor, I told Henry Quinn that upon receiving an original certified Release of Lien and I will release the full and final payments of $29,275.00 and $39,032.00. I am sure that Arvest Bank wanted a copy also.
The trial court permitted Plaintiffs Exhibit 22 to be entered into evidence in a redacted form and excluded Plaintiffs Exhibit 23. Appellant contends that it is entitled to a JNOV or a new trial because of this error.
Arkansas Rule of Evidence 408 (2011) provides:
Evidence of (1) furnishing, offering, or promising to furnish, or (2) accepting, offering, or promising to accept, a valuable consideration in compromising or attempting to compromise a claim which was disputed as to either validity or amount, is not admissible to prove liability for, invalidity of, or amount of the claim or any other claim. Evidence of conduct or statements made in compromise negotiations is likewise not admissible. This rule does not require exclusion if the evidence is offered for another purpose, such as proving bias or prejudice of a witness, negativing a contention of undue delay, or proving an effort to obstruct a criminal investigation or prosecution.
Appellant argues that it should have been able to introduce this evidence because appellee was able to state before the jury that it had filed a “false lien” against his property. It also argues that it had
Evidence of conduct or statements made in compromise negotiations are not admissible on the issue of liability. Baugh v. Johnson,
The purpose of Rule 408 is to promote complete candor between the parties to the settlement negotiations but not to protect false representations. Thus, when a party has made a statement at trial which is inconsistent with a statement made during settlement negotiations, the inference is that one of the statements is knowingly false.
Missouri Pac. R.R. Co. v. Ark. Sheriffs Boy’s Ranch,
We believe that the statements that ap-pellee made in these letters were not demonstrably inconsistent with his testimony at trial and that their introduction would have served little purpose other than to demonstrate appellee’s willingness to settle the claims; therefore, they were properly excluded under Rule 408. Because the trial court did not abuse its discretion in this ruling, we affirm it. See Swindle v. Lumbermens Mut. Cas. Co.,
Affirmed.
Notes
. When a contractor is in default by having failed to complete the contract, he can recover in spite of his breach if his performance was sufficiently substantial. Roberts Contracting Co. v. Valentine-Wooten Rd. Pub. Facility Bd„
The issue of substantial performance is a question of fact. Id.
In determining whether performance is substantial, the following considerations are significant: (1) the extent to which the injured party will be deprived of the benefit which he reasonably expected; (2) the extent to which the injured party can be adequately compensated for the part of that benefit of which he will be deprived; (3) the extent to which the party failing to perform or to offer to perform will suffer forfeiture; (4) the likelihood that the party failing to perform or offer to perform will cure his failure, taking account of all the circumstances, including any reasonable assurances; and (5) the extent to which the behavior of the party failing to perform or to offer to perform comports with standards of good faith and fair dealing. Id.