Odom Antennas, Inc. v. Candy Stevens

ODOM ANTENNAS, INC. v. Candy STEVENS

CA 97-941                                          ___ S.W.2d ___

                  Court of Appeals of Arkansas
                           Division I
                 Opinion delivered April 8, 1998


1.   Contracts -- essential elements. -- The essential elements of a
     contract are (1) competent parties, (2) subject matter, (3)
     legal consideration, (4) mutual agreement, and (5) mutual
     obligations.

2.   Contracts -- mutuality of contract -- discussion of doctrine. -- A
     contract to be enforceable must impose mutual obligations on
     both of the parties; the contract is based upon the mutual
     promises made by the parties, and if the promise made by
     either does not by its terms fix a real liability upon one
     party, then the promise does not form a consideration for the
     promise of the other party; mutuality of contract means that
     an obligation must rest on each party to do or permit to be
     done something in consideration of the act or promise of the
     other; that is, neither party is bound unless both are bound;
     a contract that leaves performance of one's promise entirely
     optional with one of the parties would not be binding on the
     other.

3.   Contracts -- mutuality of contract -- satisfaction of doctrine. -- Mutual
     promises that constitute consideration for each other are the
     classic method of satisfying the doctrine of mutuality.

4.   Contracts -- mutuality of contract -- employment agreement satisfied
     doctrine. -- The employment agreement between appellant and
     appellee satisfied the doctrine of mutuality because it
     contained mutual promises that were consideration for each
     other; appellant "agree[d] to employ the full-time services of
     a professional and administrative nature" of appellee, who, in 
     turn, "agree[d] to accept employment from" appellant; stated
     another way, appellee agreed to work for appellant by
     rendering "professional and administrative services"; this was
     not an illusory promise on appellee's part; she was agreeing
     to work for appellant in a particular capacity in return for
     stated consideration.

5.   Contracts -- provisions of employment contract not ambiguous -- resort to
     rules of construction not necessary. -- The determination of whether
     a contract is ambiguous is a matter of law; where the relevant
     provisions of the employment agreement were not ambiguous,
     resort to rules of construction or to appellee's subjective
     interpretation of the employment agreement was not necessary.

6.   Damages -- punitive damages -- properly awarded where compensatory damages
     awarded on underlying cause of action. -- Punitive damages would be
     improper in the absence of an award of compensatory damages
     for the underlying cause of action; where, however,
     compensatory damages were awarded on the underlying cause of
     action under the Arkansas Civil Rights Act of 1993, punitive
     damages on that same cause of action were proper.  

7.   Damages -- punitive damages -- properly awarded where compensatory damages
     were rewarded for retaliation. -- It was of no significance that the
     trial court awarded compensatory damages on alternative
     theories; the appellate court concluded that the trial court
     actually awarded compensatory damages under the Arkansas Civil
     Rights Act; because compensatory damages were awarded for
     retaliation, an award of punitive damages for that same reason
     was proper.

8.   Damages -- punitive damages -- award sustained despite application of wrong
     statutory section. -- Although the trial court incorrectly applied
     Ark. Code Ann. section 16-123-107(c) (Supp. 1997) instead of
     section 16-123-107(b), the appellate court held that the award
     of punitive damages should still be sustained under the rule
     that a trial judge's decision will not be reversed if he
     reached the right result, even though he gave an erroneous
     reason; here, the trial court had the authority under section
     16-123-107(b) to award punitive damages; appellant did not
     contend that punitive damages were not justified at all;
     therefore, the appellate court affirmed the trial judge's
     award of punitive damages, noting that this result rendered
     appellant's argument concerning proof of its number of
     employees irrelevant on appeal because section 16-123-107(b)
     did not require such proof.


     Appeal from White Circuit Court; Bill Mills, Judge; affirmed.
     Hatfield & Lassiter, P.A., by: Richard F. Hatfield and Jeffrey
W. Hatfield, for appellant.
     Cearley Law Firm, P.A., by: Robert M. Cearley, Jr., for
appellee.

     D. Franklin Arey, III, Judge.
     The White County Circuit Court awarded appellee Candy Stevens
compensatory and punitive damages, costs, and a reasonable
attorney's fee against appellant, Odom Antennas, Inc.  The award of
compensatory damages was based on alternative theories, breach of
contract and a claim for retaliation under the Arkansas Civil
Rights Act of 1993; the award of punitive damages was based upon a
violation of the Arkansas Civil Rights Act.  Appellant argues that
the trial court erred when it determined that the employment
agreement was valid and enforceable; that the award of punitive
damages is not supported by an award of compensatory damages; and
that there is insufficient proof as to the number of appellant's
employees, so that punitive damages could not be calculated under
the Arkansas Civil Rights Act.  We affirm.
     Bill Thornton, Odom's chief executive officer, persuaded
Stevens to come work for the company.  She moved from Washington,
D.C., to Beebe and began work on July 11, 1994, with the title of
Executive Director.  Her duties included securing financing to help
overseas customers and handling personal matters assigned by
Thornton.  Thornton testified that Stevens was a "perfect employee"
for the first couple of months of employment.
     On September 8, 1994, Stevens presented Thornton with an
employment agreement that she prepared.  He asked her a question,
they discussed it, and then they both signed the agreement.  It
provides that "Employer agrees to employ the full-time services of
a professional and administrative nature of the Employee... and the
Employee agrees to accept employment from the Employer...."  The
agreement outlines Stevens' compensation and benefits, and in
paragraph 5 states:  "In the event of termination of employment for
any reason, other than voluntary termination on the part of
Employee, the Employer agrees to separation pay equal to one (1)
year [sic] salary."  
     Stevens and Thornton agree that their relationship began to
worsen almost immediately after the agreement was signed.  Thornton
testified that Stevens began to be absent too much, and that she
was causing "chaos" with the other employees.  He alleged that he
fired her for a number of reasons, including (1) not cancelling an
advertising order, (2) telling an Arkansas Development Finance
Authority employee that Odom was not interested in any of its
programs, (3) not setting her own priorities, and (4) having a bad
attitude.
     Stevens, on the other hand, claims that she was ultimately
fired because she would not lie for Thornton in an Equal Employment
Opportunity Commission investigation.  She testified that Thornton
told her not to talk to the EEOC investigator, but she did so
anyway, giving the investigator examples of what was happening at
the office.  She also gave two or three employees articles on
sexual harassment.
     Thornton asked Stevens to leave the company on Monday,
September 19, 1994.  He said that he did not trust her; she refused
to leave, citing her contractual obligation.  The next day Thornton
gave Stevens a signed note that informed her that her employment
was terminated.  
     Stevens sued for breach of the employment agreement, and
sought to recover her salary for one year and benefits.  She
subsequently amended her complaint to add a claim for retaliation
and termination in violation of the Arkansas Civil Rights Act,
Title VII of the Federal Civil Rights Act of 1964, and common law
wrongful discharge.
     The trial court awarded Stevens a year's salary on her breach
of contract claim, with an attorney's fee and costs.  The trial
court found that Stevens stated a claim for retaliation under the
Arkansas Civil Rights Act, and that she was entitled to
compensatory damages in the same amount as awarded on the breach of
contract claim.  However, the trial court did not allow Stevens to
recover this same sum twice; rather, the trial court awarded
Stevens a year's salary in the amount of $36,400 under the
alternative theories.  The trial court awarded Stevens punitive
damages on her Arkansas Civil Rights Act claim; that amount was
limited to $50,000 under Ark. Code Ann.  16-123-107(c)(Supp.
1997), based on a perceived number of employees at Odom.
     Odom first argues that the trial court erred by determining
that the employment agreement was a valid and enforceable contract. 
Odom contends that the agreement does not obligate Stevens to do
anything; thus, her promise to perform is illusory, and there is no
valid consideration on her part supporting a contract.  
     This argument raises the issue of mutuality of obligation. 
The essential elements of a contract are (1) competent parties, (2)
subject matter, (3) legal consideration, (4) mutual agreement, and
(5) mutual obligations.  Hunt v. McIlroy Bank & Trust, 2 Ark. App.
87, 616 S.W.2d 759 (1981).  The concept of "mutual obligations" has
been explained by our supreme court as follows:
     A contract to be enforceable must impose mutual
     obligations on both of the parties thereto.  The contract
     is based upon the mutual promises made by the parties;
     and if the promise made by either does not by its terms
     fix a real liability upon one party, then such promise
     does not form a consideration for the promise of the
     other party." ...[M]utuality of contract means that an
     obligation must rest on each party to do or permit to be
     done something in consideration of the act or promise of
     the other; that is, neither party is bound unless both
     are bound."  A contract, therefore, which leaves it
     entirely optional with one of the parties as to whether
     or not he will perform his promise would not be binding
     on the other.  

Townsend v. Standard Indus., Inc., 235 Ark. 951, 954, 363 S.W.2d 535, 537 (1963)(quoting El Dorado Ice & Planing Mill Co. v. Kinard,
96 Ark. 184, 131 S.W. 460 (1910)) (citations omitted).  Mutual
promises that constitute consideration for each other are the
classic method of satisfying the doctrine of mutuality.  J.L.
McEntire & Sons, Inc. v. Hart Cotton Co., 256 Ark. 937, 511 S.W.2d 179 (1974).
     The employment agreement satisfies the doctrine of mutuality
because it contains mutual promises that are consideration for each
other.  Odom "agrees to employ the full-time services of a
professional and administrative nature" of Stevens.  In turn,
Stevens "agrees to accept employment from" Odom.  Stated another
way, Stevens agreed to work for Odom, by rendering "professional
and administrative services."  This is not an illusory promise on
Stevens' part; she is agreeing to work for Odom, in a particular
capacity, in return for stated consideration.  Cf.  Keith v. City
of Cave Springs, 233 Ark. 363, 344 S.W.2d 591 (1961)(a promise to
supply all of the services that a promisee may thereafter order is
not an illusory promise; instead, it is a very definite promise
that creates a large power in the promisee).
     Odom insists that it is necessary to construe the employment
agreement against Stevens in order to resolve this issue.  We
disagree.  If there is no ambiguity in the language of the
employment agreement, then there is no need to resort to rules of
construction.  See Koppers Co. v. Missouri Pac. R.R. Co., 34 Ark.
App. 273, 809 S.W.2d 830 (1991).  The determination of whether a
contract is ambiguous is a matter of law.  Arkansas Burial Assoc.
v. Dixon Funeral Home, Inc., 25 Ark. App. 18, 751 S.W.2d 356
(1988).  The quoted provisions of the employment agreement are not
ambiguous; therefore, resort to rules of construction or to
Stevens' subjective interpretation of the employment agreement is
not necessary.
     Odom argues that the trial court's award of punitive damages
was not proper, because the trial court did not award compensatory
damages under the Arkansas Civil Rights Act.  The trial court's
Amended Findings of Fact and Law state:  
          Under ACA 16-123-101... Stevens is entitled to
     compensatory damages in the sum of the total salary and
     all perks of the contract between the parties.  However,
     the Court interprets the contract to the figure of one's
     salary regardless of the reason for termination.  The
     amount awarded under ACA 16-123-107 is the same amount
     awarded under the contract action.  [Stevens] cannot
     collect both amounts.  

     ...

          Plaintiff is entitled to punitive damages, attorney
     fees and costs for violation of ACA 16-123-101 et seq. 

Thus, the trial court awarded compensatory damages under
alternative theories:  breach of contract and Stevens' Arkansas
Civil Rights Act retaliation claim.
     Because the trial court did award compensatory damages under
the Arkansas Civil Rights Act, its award of punitive damages on
that same cause of action was proper.  Punitive damages would be
improper in the absence of an award of compensatory damages for the
underlying cause of action.  See Bell v. McManus, 294 Ark. 275, 742 S.W.2d 559 (1988).  Here, there is an award for damages on the
underlying cause of action; compensatory damages were awarded under
the Arkansas Civil Rights Act.  Thus, punitive damages on that same
cause of action are proper.  
     It is of no significance that the trial court awarded
compensatory damages on alternative theories.  We read the trial
court's Amended Findings of Fact and Law as actually awarding
compensatory damages under the Arkansas Civil Rights Act; it goes
on to prohibit a "double recovery" of the same sum.  Since
compensatory damages were awarded for retaliation, an award of
punitives for that same reason is proper.  See Bell, supra.
     The trial court awarded punitive damages under Ark. Code Ann.
 16-123-107(c).  Odom argues that there was no proof as to the
number of its employees, which is necessary to calculate punitive
damages under  16-123-107(c).  Therefore, Odom argues that the
award of punitive damages was in error.
     Stevens' claim for retaliation was based on Ark. Code Ann. 
16-123-108(a).  See Theresa M. Beiner, An Overview of the Arkansas
Civil Rights Act of 1993, 50 Ark. L. Rev. 165, 191 (1997).  If a
cause of action for retaliation is proven,  16-123-108(c) provides
that the "remedies and procedures available in  16-123-107(b)
shall be available...."  See Beiner, supra, at 195.  Section 16-
123-107(b) allows a recovery of "compensatory and punitive damages,
and, in the discretion of the court, [recovery of] the cost of
litigation and a reasonable attorney's fee."  Section 16-123-107(c)
is not applicable.
     Although the trial court incorrectly applied 16-123-107(c),
instead of 16-123-107(b), the award of punitive damages should
still be sustained.  "It has long been the rule in Arkansas that a
trial judge's decision will not be reversed if he reached the right
result, even though he gave an erroneous reason."  Moose v.
Gregory, 267 Ark. 86, 90-91, 590 S.W.2d 662, 665 (1979).  Here, the
trial court had the authority under  16-123-107(b) to award
punitive damages; Odom does not contend that punitive damages were
not justified at all.  Therefore, we affirm the trial judge's award
of punitive damages.  This result renders Odom's argument
concerning proof of its number of employees irrelevant on appeal,
since  16-123-107(b) does not require this proof.
     Affirmed.
     Stroud and Roaf, JJ., agree.