Steve Gentry v. Mitchell Kanna

ARKANSAS COURT OF APPEALS

NOT DESIGNATED FOR PUBLICATION

KAREN R. BAKER, JUDGE

DIVISION I

STEVE GENTRY

APPELLANT

v.

MITCHELL KANNA

APPELLEE

CA02-620

FEBRUARY 26, 2003

APPEAL FROM THE POLK COUNTY CIRCUIT COURT

[CIV2001-1A]

HONORABLE GAYLE K. FORD, CIRCUIT JUDGE

AFFIRMED

This case involves an oral agreement between appellant, Steve Gentry, and appellee, Mitchell Kanna. Following a bench trial in Polk County Circuit Court, the trial judge awarded Mr. Kanna a total of $3,258.70, including attorney's fees and costs. Appellant's sole point on appeal is that the trial court erred in awarding the judgment to Mr. Kanna. We affirm.

At trial, testimony showed that over a number of years, Gentry had done mechanic work for Kanna totaling $4,063.80. The mechanic work was done without payment to Gentry for his work. Later when Gentry needed dozer work done on his property, he and Kanna agreed that under the circumstances Kanna would do the work, and they would trade off the cost against the amount owed to Gentry for his mechanic work. The dozer work began in November 1999 and ended in January 2000. After the dozer work was completed, Kanna gave Gentry a bill for $9,372.50. At trial, neither party disputed the fact that the parties had entered into an oral agreement providing for Kanna to do the dozer work for Gentry. However, there was conflicting testimony as to whether Kanna was entitled to payment in excess of the amount he already owed Gentry for his mechanic work.

Ultimately, Gentry gave Kanna a check for $2,000 as payment over and above the $4,063.80 he was owed for mechanic work. Kanna accepted the check and deposited it into his bank account. Gentry testified that he gave Kanna the $2,000 check as a means of resolving the dispute, and he thought at that point it was settled. Kanna, on the other hand, testified that he considered the $2,000 check a "partial payment." Kanna further testified that the two agreed that he would do the dozer work, and Gentry would pay him any amount in excess of what he already owed Gentry. In contrast, Gentry testified that they were just "trading off" the work and had no agreement as to additional payment. We do not reverse on a factual issue as long as there is evidence to support the trial court's finding and the finding is not clearly against the preponderance of the evidence. Country Corner Food & Drug, Inc. v. Reiss, 22 Ark. App. 222, 737 S.W.2d 672 (1987). When the testimony is in conflict on the issue of whether the parties agreed, a fact question arises that is to be determined by the trial judge. Id. (citing Western Auto Supply Co. v. Bank of Imboden, 17 Ark. App. 4, 701 S.W.2d 394 (1985)).

In the present case, Gentry's argument is that the testimony and evidence at trial failed to establish that a contract existed, and therefore, the trial judge could have reached his decision only by applying an equitable remedy. However, there is no indication in the record or order that the trial court applied any equitable remedies. Further, the appellant did not object to the trial court's method of determining damages and did not request specific findings of fact and conclusions of law.

Notwithstanding appellant's arguments, we find sufficient evidence to support the trial court's finding that an oral contract existed and was breached by the appellant. The essential elements of a contract are (1) competent parties, (2) subject matter, (3) legal consideration, (4) mutual agreement, and (5) mutual obligations. Williamson v. Sanofi Winthrop Pharm., Inc., 347Ark. 89, 60 S.W.3d 428 (2001) (citing Foundation Telecomm. v. Moe Studio, 341 Ark. 231, 16 S.W.3d 531 (2000); Gentry v. Hanover Ins. Co., 284 F. Supp. 626 (D.C. Ark. 1968) (cited in Hunt v. McIlroy Bank & Trust, 2 Ark. App. 87, 616 S.W.2d 759 (1981)); see also Southern Surety Co. v. Phillips, 181 Ark. 14, 24 S.W.2d 870 (1930). We keep in mind two legal principles when deciding whether a valid contract was entered into: (1) a court cannot make a contract for the parties but can only construe and enforce the contract that they have made; and if there is no meeting of the minds, there is no contract; and (2) it is well settled that in order to make a contract there must be a meeting of the minds as to all terms, using objective indicators. Id. (citing Crain Indus., Inc. v. Cass, 305 Ark. 566, 810 S.W.2d 910 (1991); Hunt, supra (citing Hanna v. Johnson, 233 Ark. 409, 344 S.W.2d 846 (1961); Irvin v. Brown Paper Mills Co., 52 F. Supp. 43 (D.C. Ark. 1943), rev'd on other grounds, 146 F.2d 232 (8th Cir. 1944)).

Our supreme court has previously held that an uncertain agreement may be supplemented by subsequent acts, agreements, or declarations of the parties to make it certain and valid. Foundation Telecomm. v. Moe Studio, supra (citing Swafford Ice Cream v. Sealtest Foods, 252 Ark. 1182, 483 S.W.2d 202 (1972)). The acts of practical construction placed upon a contract by the parties are binding and may be utilized to relieve it from doubt and uncertainty. The objection of indefiniteness may be obviated by performance and acceptance of performance. Id. In the present case, there was sufficient evidence to support the trial court's finding that a contract existed between Gentry and Kanna and that Gentry breached that contract by failing to pay the amount of Kanna's invoice after giving himself credit for the mechanic work he had done previously. Both parties testified as to the nature of their agreement. Each testified that for a number of years Gentry had done mechanic work for Kanna on credit and that the two agreed that Kanna would do the dozer work for Gentry and they would "trade off." After Kanna finished the work, Gentry refused to payKanna $9,372.50 for his dozer services. Gentry testified that he had done $4,063.80 worth of mechanic work for Kanna and given him a check for $2000 for his dozer work. Kanna testified that he gave Gentry information about his hourly rate. Gentry disputed that Kanna spent as much time as he claimed on the dozer, so he paid him $2000 for his dozer work.1 Although Gentry disputes the hours worked, he did not claim the hourly rate was unreasonable. Our supreme court has said that where labor or material is furnished by a party and no price is agreed upon, the law will imply an agreement to pay what it is worth. Hawkins v. Delta Spindle of Blytheville, 245 Ark. 830, 434 S.W.2d 825 (1968) (citing Dixon v. Kittle, 109 Ohio App. 257, 164 N.E.2d 806 (1959)). If a contract makes no statement as to the price to be paid for services, the law invokes the standard of reasonableness and the fair value of the services is recoverable. Id. (citing Weber v. Billman, 13 N.E.2d 866 (1956)); see also 17 Am. Jur. 2d 782, Contracts, § 344; 58 Am. Jur. 542, Work & Labor, § 39. Based upon the testimony of the work done and the credit owed, the trial court resolved the issue by awarding Kanna $3,258.70. We find that there was sufficient evidence to support the trial court's finding that the parties had each agreed to do work for the other and that each was entitled to a credit for the reasonable and fair value of the work done.

Affirmed.

Crabtree and Roaf, JJ., agree.

1 Gentry was given credit for the $2000 that he paid Kanna, and $500 credit for some equipment that he had given to Kanna.