Shea v. Riley

Tim A. SHEA v. Pat M. RILEY, Sr.

CA 97-496                                          ___ S.W.2d ___

                  Court of Appeals of Arkansas
                           Division IV
               Opinion delivered November 19, 1997


1.   Appeal & error -- review of chancery cases -- when reversed. -
     - In a chancery case, the standard of review is de novo, and
     the appellate court will not reverse unless the decision is
     clearly against the preponderance of the evidence. 

2.   Contracts -- "meeting of minds" discussed -- term no longer
     favored in law. -- "Meeting of the minds" is an objective
     manifestation of mutual assent for the formation of a
     contract; the phrase "meeting of the minds" is disfavored; in
     more modern terminology, the phrase means "objective
     indicators of agreement."     

3.   Contracts -- transaction never constituted binding contract --
     trial court's finding affirmed. -- Where the evidence, in the
     form of appellant's testimony as to his understanding of the
     agreement and appellee's language in his correspondence,
     supported the trial court's finding that the alleged
     transaction lacked the requisite objective indicators of
     agreement to form a contract, no contract between the parties
     ever existed; the appellate court's de novo review revealed
     that the trial court's finding was not clearly against the
     preponderance of the evidence; therefore, the finding of the
     trial court was affirmed. 

     Appeal from Pulaski Chancery Court; Vann Smith, Chancellor;
affirmed.
     Wright, Lindsey & Jennings, by:  Alston Jennings, for
appellant.
     Mitchell, Williams, Selig, Gates & Woodyard, P.L.L.C., by:  
Byron Freeland, for appellee.

     Terry Crabtree, Judge.
     Appellee, Pat M. Riley, Sr., purchased three lots near the
Country Club of Little Rock from the estate of M.L. Dick for
$660,000.  Initially, Riley planned to have the lots re-platted
into one lot and construct a new home on the site.  In the course
of his planning, Riley approached the neighbors on either side of
the purchase and suggested selling some of the frontage to each,
thereby reducing the size of his consolidated lot and increasing
the size of both neighborsþ lots.  Appellant, Tim A. Shea, is one
of the adjacent property owners.  
     Appellant Shea and appellee Riley engaged in oral discussions
about the sale from appellee to appellant of a twenty-foot strip of
land along their common boundary.  The conversations were
memorialized in a series of correspondence that was introduced at
trial and is the primary evidence in the case. 
     The first letter from Riley to Shea, dated September 29, 1995,
informs Shea of Rileyþs purchase of the property, and states: 
We are selling 20 ft. to Tim Shea on the North to be
added to his property and 20 ft. on the South to Scott
Bellingrath to be added to his property . . . . [W]e will
have to go back through the city and have it re-platted. 
At that point, we will probably ask for a waiver on the
rear property set back which has been granted often in
this neighborhood.  

The September 29th letter also included a market analysis of
Rileyþs current home in the area.
     The second letter is addressed to both adjacent neighbors,
þScott and Tim,þ and dated November 20, 1995.  This letter begins
by saying that the re-platting must be done before the parties can
þeffectively conclude our transaction.þ  Riley again mentioned the
waivers he would seek from the city.  
     A third letter from Riley to Shea, dated November 22, 1995,
informed Shea of Rileyþs plans for a house on the site and again
mentioned the necessity for a waiver on the set-back line.  No
mention of the sale is present in this correspondence, although
appellantþs counsel suggested during oral argument that an attached
site plan for the proposed house seems to illustrate the twenty-
foot transfer to Shea by a line 20 feet inward from Sheaþs existing
property line.
     The fourth correspondence is a handwritten note from Shea to
Riley dated November 28, 1995.  In its entirety, it states:
Thanks for sending me the tentative layout of your house. 
Pat before I can consider any waivers or setbacks on this
project you must sell me the 20 feet of Mrs. M.L. Dickþs
property adjoining mine at your suggested price of $244
per front foot on Beechwood or give me assurance in
writing that this transaction will take place.  
  
     Two days later Riley responded to Shea correcting the proposed
price, which was $4,400 per foot instead of $244, and holding firm
on the issue of waivers in stating:  
     The price cleared up, be assured Tim that you will know
     Iþll be committed on the sale at the time that you go
     along with our submission to the City.  The only waiver
     you would look at is that we will be a little closer to
     the back line than is normal . . . .

     The next correspondence in the record is dated December 3,
1995, from Shea to Riley.  In his letter, Shea agreed that he had
been mistaken on the proposed price.  He stated further, þHowever,
no mention was ever made of waivers and I canþt look kindly to the
sale of this aforementioned property being held hostage to my
position on any so called waivers.þ
     A final letter, dated February 5, 1996, from Riley to Shea 
summarized the facts from Rileyþs perspective as follows:
     As you know, we have held discussions reference the
potential of my selling you some of the vacant lot I own
next door to you on Beechwood.

     I sought to make you an offer, under certain
conditions, whereby we could reach agreement.

     After this occurred, I met with you in your home on
the morning of December 15, 1995.

     At this time you bluntly stated you would not agree
with any of the conditions.  In fact, you stated you
wanted to place other unreasonable restrictions on plans
I was developing to develop the property.

     It is clear you rejected my offer.  It was therefore
then and is now, withdrawn. 

     Two days later, on February 7, 1996, appellant sued, claiming
the initial correspondence amounted to a contract for the sale of
the twenty feet and requested specific performance.  The trial
court dismissed the complaint, holding that it failed to satisfy
the statute of frauds and stating that the parties never achieved
a meeting of the minds.  For his appeal, appellant urges this court
to reverse the trial court and find that the series of letters
includes all the necessary terms to satisfy the statute of frauds
and bind the seller.  However, we need not reach the issue due to
our holding that the parties never manifested the objective
indicators of mutual agreement necessary to form a contract. 
     In a chancery case, the standard of review is de novo, and we
will not reverse unless the decision is clearly against the
preponderance of the evidence.  Belue v. Belue, 38 Ark. App. 81,
828 S.W.2d 855 (1992). 
     Appellee quotes the trial courtþs remarks at the conclusion of
the hearing: þThere was not a meeting of the minds as to all
critical terms of the contract.þ  Appellee uses this language to
argue that the parties never reached the agreement necessary to
constitute a binding contract.  From the evidence adduced at the
hearing, we agree with the substance of the chancellorþs finding
but not his choice of metaphor, and therefore affirm.
     þMeeting of the mindsþ is described as þobjective
manifestations of mutual assent for the formation of a contract.þ 
Thurman v. Thurman, 50 Ark. App. 93, 97, 900 S.W.2d 221, 223 (1995)
(citing Dziga v. Muradian Business Brokers, Inc., 28 Ark. App. 241,
773 S.W.2d 106 (1989)).  
     The phrase þmeeting of the mindsþ is disfavored.  
As Professor Farnsworth points out, "Discussions of this
topic would be improved if this much abused metaphor
['meeting of the minds'] were abandoned.  (Citation
omitted).  Although this Court used the metaphor as late
as last year, we were careful to point out that we meant,
in more modern terminology, "objective indicator[s] of
agreement." Fort Smith Service Fin. Corp. v. Parrish, 302
Ark. 299, 789 S.W.2d 723 (1990).

Crain Industries, Inc. v. Cass, 305 Ark. 566, 576, 810 S.W.2d 910,
916 (1991).  However, the evidence, in the form of appellantþs
testimony as to his understanding of the agreement and appelleeþs
language in his correspondence, supports the trial courtþs finding
that the alleged transaction lacked the requisite objective
indicators of agreement.  In each of his five letters, appellee
mentioned steps that must be taken before the sale could be
consummated, including the re-platting of the lots and the approval
of set-back waivers.  At oral argument appellant contended that
such conditions were solely under the control of appellee and that
he should not escape his contractual obligation because of his
failure to follow through on the zoning issues.  However, this
analysis assumes a contract existed where none did.  Absent
agreement on these conditions, appellee did not intend to be bound
by his ongoing negotiations with appellant, and therefore no
contract between the parties ever existed.
     Our de novo review reveals that the trial courtþs finding was
not clearly against the preponderance of the evidence; therefore,
we affirm.
     Arey and Roaf, JJ., agree.