Carrick Trucking, Inc. v. Nietert et al

Filing 62

MEMORANDUM OPINION: Signed by Honorable Jimm Larry Hendren on April 30, 2010. (sh)

IN THE UNITED STATES DISTRICT COURT W E S T E R N DISTRICT OF ARKANSAS F O R T SMITH DIVISION C A R R I C K TRUCKING, INC. d / b / a OUTLANDER GRAVEL v. R O D N E Y T. HOLDINGS, SERVICES, a n d JAMES GRAVEL C i v i l No. 09-2053

PLAINTIFF

NIETERT; SAMARITAN INC.; OUTLANDER TREE INC.; JERRY DON HATTABAUGH; STEVEN BLACK d/b/a JSB DEFENDANTS M E M O R A N D U M OPINION

O n the 2nd day of April, 2010, the captioned matter came on f o r hearing. All parties appeared in person or by their authorized The

r e p r e s e n t a t i v e s , and all parties were represented by counsel.

m a t t e r had previously been scheduled for trial by jury, but all p a r t i e s waived this right, and agreed to trial of the matter to the Court. Testimony was heard and exhibits received on April 2 and

April 5, 2010, and the Court now makes the following findings of f a c t and conclusions of law. F I N D I N G S OF FACT 1. T h i s case arose out of the operation of a gravel pit (the In 2008, when the events in

" P i t " ) located near Waldron, Arkansas.

s u i t began, the Pit was owned by defendant Jerry Don Hattabaugh ( " H a t t a b a u g h " ) , subject to a mortgage held by Community National B a n k in Waldron. 2. Hattabaugh entered into a Contract of Sale (the

" H a t t a b a u g h / O u t l a n d e r Contract"), selling the Pit to defendant, O u t l a n d e r Tree Services, Inc. ("Outlander"), a corporation formed

by defendants Rodney Taylor Nietert ("Nietert") and Tim Johnson ("Johnson"). The Hattabaugh/Outlander Contract -- signed on June 4, 2008 -p r o v i d e d that Hattabaugh would execute a Warranty Deed to the Pit, a n d Outlander would execute a Quitclaim Deed to the Pit, both to be h e l d in escrow 1 until either * O u t l a n d e r paid in full, whereupon the escrow agent would

d e l i v e r the Warranty Deed to Outlander, or * O u t l a n d e r defaulted, whereupon the escrow agent would

d e l i v e r the Quitclaim Deed to Hattabaugh. 3. O u t l a n d e r commenced operations at the Pit, but quickly It was not able to conduct operations

r a n into difficulties.

e f f i c i e n t l y enough to keep up with the demand for its main product, a type of gravel known as SB2. 4. N i e t e r t learned of the existence of a Michigan company,

p l a i n t i f f Carrick Trucking, Inc. ("Carrick Trucking"), which had e x p e r i e n c e in running a crushing operation, and contacted them for help. Nietert, acting ostensibly as Outlander, agreed with Carrick Trucking that the latter would move its equipment into the Pit and c o n d u c t crushing operations for Outlander. On July 27, 2008, the two companies entered into a written c o n t r a c t (the "Crushing Contract") which provided as follows:

1 Incomprehensibly, Brian Mueller, who drafted the Contract of Sale, provided that Hattabaugh, the seller, would be the escrow agent.

*

t h a t Outlander would be responsible for blasting rock to

b e crushed into gravel, and for sales of gravel; * that Carrick Trucking would provide all necessary

e q u i p m e n t to crush the gravel and be responsible for all costs i n c u r r e d in processing it; * t h a t Outlander would pay Carrick Trucking 70% of the

g r o s s income received by Outlander for sale of the gravel; * that processed material would be carried in Carrick

T r u c k i n g ' s inventory until paid for by Outlander; * t h a t Carrick Trucking would have the crushing work for

a l l materials at the Pit for the life of the Pit; and * t h a t if Outlander sold the Pit, Carrick Trucking would

h a v e the first option of crushing for the new buyers or would be " c o m p e n s a t e d " by Outlander. 2 5. Carrick Trucking brought equipment from Michigan to

A r k a n s a s , at a cost of about $40,000.00, and commenced crushing o p e r a t i o n s on August 2, 2008. As gravel was crushed, it passed over a belt scale which w e i g h e d the product, allowing Carrick Trucking to maintain accurate r e c o r d s of the tonnage it had processed. 6. of I n mid-November, 2008, Gail and Dean Carrick, principals Trucking, arrived unannounced at the Pit, being

Carrick

c o n c e r n e d about delinquent accounts.

Their review of the books

Nietert explained that he understood this to mean that Carrick Trucking could negotiate with any new owner of the Pit or that he would "compensate them for going back home."

2

showed that some $10,000.00 in cash receipts had been marked "paid" b u t had not been accounted for to Carrick Trucking. Gail Carrick called Johnson, who initially avoided her call a n d then was evasive on the phone. Carrick Trucking failed to give The clerical employee hired by satisfactory answers to Gail

C a r r i c k ' s questions and abruptly quit.

Johnson disappeared too,

a l o n g with some of Outlander's equipment used at the Pit. Nietert finally paid Carrick Trucking the missing money, and a g r e e d to allow Carrick Trucking to handle the receivables from t h a t point forward. There was no evidence that the 70/30 split of

g r o s s profits was altered as a result of this change. 7. T h e incident of the missing money was the end point for

a n y involvement by Johnson in the business of the Pit, and also c a u s e d Nietert to abandon Outlander as a vehicle for his business dealings. Nietert then incorporated defendant, Samaritan Holdings, Inc. ( " S a m a r i t a n " ) , to take the place of Outlander. Nietert testified that he did not have a corporate minute book f o r Outlander; that he did not know what offices he held in that c o r p o r a t i o n ; that Outlander never held meetings, issued stock, or p a s s e d resolutions; and that it existed in name only. N i e t e r t also testified that Outlander's corporate charter had b e e n revoked, and that Samaritan was not in good standing with the S t a t e of Arkansas. The foregoing facts support the Court's conclusion of law -h e r e i n a f t e r expressed -- that both corporations were essentially

sham corporations serving as alter egos to Nietert, rather than b o n a fide business organizations. 8. A t the end of January, 2009, the Carricks returned to They came back to Arkansas

M i c h i g a n due to a death in the family.

in mid-March, at which time it was necessary to conduct a blast to p r o d u c e rock to be crushed. When Nietert informed the Carricks that he could not afford to p a y for the blast, as he was in financial difficulties, Carrick T r u c k i n g agreed to work with him in funding the blast, fronting the m o n e y needed to the extent the cost was not covered by funds then p a y a b l e to Nietert. 9. O n April 14, 2009 -- before the blast was conducted --

N i e t e r t , Hattabaugh, and Gail Carrick went to Community National B a n k to try to work out a plan to address Nietert's financial s i t u a t i o n and its impact on the Hattabaugh mortgage. Nietert was broke and had failed to make his March payment on t h e Pit. Carrick Trucking was interested in buying the Pit, but no firm a g r e e m e n t had been reached, and the Carricks wanted to know what w a s owed against the property. At this April 14, 2009, meeting, Hattabaugh agreed to extend t h e overdue payment in reliance on Nietert's statement that he had s o m e money coming. A handwritten agreement was signed by Nietert a n d Hattabaugh, stating as follows: D u e to the potential sale of the land and business I, J e r r y Don Hattabaugh, agree to extend one payment payable

by Outlander Tree Service Inc. concerning the contract o f sale. Next payment due date is April 16th, 2009. 10. the Relying on Nietert's payment extension thus acquired, went ahead with the blast, using $9,300.00 that

Carricks

C a r r i c k Trucking owed to Nietert and paying the remainder of the cost. On April 23, 2009, Carrick Trucking paid Harrison

C o n s t r u c t i o n Company, Inc. ("Harrison") $17,996.72 to conduct the blast. 11. F r o m the April 23 blast, Carrick Trucking processed an

i n v e n t o r y of products including SB2 red, SB2, crushed shale, septic r o c k , crusher dust, oversize rock, rip rap, and fill dirt. The

v a l u e of this inventory (with an SB2 discount based on testimony of S c o t t County Judge James Forbes that due to quality problems it was w o r t h only $5.50/ton) was $165,550.00. 12. T h e proposed sale of the Pit to Carrick Trucking did not

o c c u r , and on April 28, 2009, Nietert contacted defendant James Steven Black ("Black"), an acquaintance who worked insulating

c h i c k e n houses but was looking to get into a different line of work. 13. Black had no experience in the gravel business, but

N i e t e r t told him the Pit was "a good deal," and he agreed to buy it t h a t same day. Nietert arranged for himself, Black, and Hattabaugh to meet at t h e office of attorney, Brian Mueller ("Mueller"), to effect the t r a n s a c t i o n , and asked Mueller to prepare the necessary documents. Mueller prepared a Contract of Sale (the "Hattabaugh/Black

Contract"), which was similar to the Hattabaugh/Outlander Contract i n most respects. o u t building personal provided are However, instead of providing that "[s]cales and included of in this transaction the and become the

property that

Purchaser,"

Hattabaugh/Black and all materials

Contract on the

"[s]cales,

outbuilding

g r o u n d including crushed gravel are included in this transaction and become the personal property of the Purchaser." (Emphasis

added.) 14. understand N e i t h e r Black nor Hattabaugh could read well enough to the Hattabaugh/Black Contract. Both men relied on

i n f o r m a t i o n given to them about the document by Nietert. Moreover, Hattabaugh wanted to show the contract to his

a t t o r n e y before he signed it.

His attorney was not available that

d a y and he could not do so, and Hattabaugh agreed to go forward and s i g n the contract without any input from his attorney when he was o f f e r e d an additional $10,000.00 to close the deal immediately. Hattabaugh knew that Carrick Trucking's gravel inventory was i n c l u d e d in the contract and understood that he did not own the g r a v e l inventory -- but he nevertheless signed the document. 15. both him B l a c k was under the impression that Mueller represented and Nietert in the transaction -obviously not

u n d e r s t a n d i n g that this would be a conflict of interest if it were t h e fact. Although Nietert admitted arranging the meeting and telling M u e l l e r to prepare the documents, he denied that Mueller was his

attorney for this transaction and denied telling Mueller what to p u t in the documents. The Court does not find Nietert's testimony credible on this p o i n t and finds that Mueller was Nietert's attorney; that Nietert told him what provisions to include in the contract; and,

s p e c i f i c a l l y , that Nietert directed Mueller to add the language t r a n s f e r r i n g the Carrick Trucking gravel inventory to Black. 16. N i e t e r t also told Black that Carrick Trucking was not

p r o d u c i n g quality products and that Black should get someone else t o do his crushing work. This statement naturally tended to defeat the provision in the C r u s h i n g Contract pursuant to which Carrick Trucking would have the f i r s t option of crushing for any new buyer of the Pit. 17. * I n addition to the Hattabaugh/Black Contract, Mueller: p r e p a r e d a Warranty Deed for Hattabaugh to sign (to

c o n v e y the Pit from Hattabaugh to Black); * p r e p a r e d a Quitclaim deed for Black to sign (to re-convey

b a c k to Hattabaugh any interest Black might have acquired in the P i t ) ; and * p r o v i d e d in the contract that Hattabaugh would hold these

d o c u m e n t s in escrow. Finally, Mueller prepared a typewritten document (the

" E v i c t i o n Notice") which stated as follows:

To Whom It May Concern: Please be advised that pursuant to the default of O U T L A N D E R TREE SERVICES, INC., JERRY DON HATTABAUGH, has r e t a k e n possession of the real estate described in the a t t a c h e d exhibit and has entered into a Contract of Sale w i t h JAMES STEVEN BLACK, d/b/a JSB GRAVEL on April 28, 2009. I, JAMES STEVEN BLACK, hereby request that you v a c a t e my property immediately. Equipment/personal e f f e c t s should be scheduled to be gone no later than S u n d a y , May 3, 2009. I f you have any questions, do not hesitate to contact me. Please govern yourself accordingly. T h i s Eviction Notice was signed by Black, but no contact i n f o r m a t i o n for Black was given. 3 N i e t e r t was the motivating factor behind the Eviction Notice, as he testified that he had Carrick Trucking served "as my

e m p l o y e e s " and that he thought it was his responsibility to "get t h e m out." This action on the part of Nietert not only tended to

d e f e a t the provision in the Crushing Contract pursuant to which C a r r i c k Trucking would have the first option of crushing for the n e w buyers, it created a situation where it was impossible for C a r r i c k Trucking to realize any profit from the inventory of gravel i t had created. 18. A b o u t 4:00 p.m. on April 28, 2009, Nietert showed up at

t h e Pit and informed the Carricks that he had sold the Pit and that t h e y would have to leave.

3 Handwritten under Black's signature was the notation "Attorney: Brian Mueller 479675-4788." Gail Carrick testified that this was not on the Eviction Notice when she received it, and the Court finds this testimony credible, believing that if attorney Mueller had intended this information to be in a document he prepared, it would have been typewritten therein.

Nietert was followed by a Deputy Sheriff who handed Gail C a r r i c k the Eviction Notice. The Deputy Sheriff escorted the

C a r r i c k s to the main highway and shut the gate behind them. 19. Carrick Trucking did not remove its equipment or

i n v e n t o r y from the Pit. Not only was the Pit gated during the time stated in the E v i c t i o n Notice for removal, but Gail Carrick testified that it w o u l d have taken about a month to obtain the regulatory permits n e c e s s a r y to transport the crushing equipment on public roads. The equipment was eventually relocated out of the area of a c t i v e blasting and crushing operations, and the inventory was sold b y Black. In mid-June, 2009, Hattabaugh asked the Carricks not to be "in a big hurry" to move their equipment, till he could see how the new o w n e r worked out. 4 20. A f t e r Carrick Trucking ceased operations at the Pit,

N i e t e r t collected some $5,692.00 in accounts payable, and failed to pay Carrick Trucking its 70% of these monies. He also failed to

p a y Carrick Trucking that part of the cost of the April 23 blast n o t covered by money owed to him by Carrick Trucking, $8,696.72. 21. Black sold the gravel inventory crushed by Carrick

T r u c k i n g , and did not pay Carrick Trucking any portion of his r e c e i p t s -- although he acknowledged that the inventory belonged to

4 The "new owner," Black, did not work out, and at the time of trial Carrick Trucking was conducting crushing operations for yet another new owner, Terrell Pankey.

Carrick Trucking by telling the company that it could come and move t h e gravel. 22. * B l a c k attempted to blast on two occasions: t h e first time, Harrison refused to conduct the blast

b e c a u s e Black would not indemnify it for any damage that might o c c u r to Carrick Trucking's equipment; * t h e second attempt to blast was aborted when Hattabaugh

f i l e d suit in the Circuit Court of Scott County, Arkansas, to e n j o i n Black from blasting the floor of the Pit, based on alleged c o n c e r n s that it would create a water retention problem. Black lost $1,700.00 he had paid to Harrison for the second a t t e m p t e d blast, and $12,000.00 for rent on a rock crusher he was u n a b l e to use for two weeks during the life of the injunction o b t a i n e d by Hattabaugh. Black attributed these losses to Carrick Trucking -- claiming t h a t Carrick Trucking had failed to move its equipment and had paid f o r the lawsuit instituted by Hattabaugh. Black also claims that Carrick Trucking should pay him

$ 5 0 0 / m o n t h in storage fees for its equipment left at the Pit. T h e facts do not support the foregoing claims by Black. Carrick Trucking was locked out of the Pit and unable to move its e q u i p m e n t , and Hattabaugh -- not Carrick Trucking -- paid for the lawsuit. While Hattabaugh may have paid with monies obtained from

C a r r i c k Trucking for the sale of a truck, and Carrick Trucking may h a v e been relieved to see the blast put off or prevented, these

factors

do

not

make

Carrick

Trucking

the

instigator

of

the

litigation. 23. B l a c k stopped running the Pit in late August or early At the time of trial, a new owner, Terrell Pankey

S e p t e m b e r , 2009.

( " P a n k e y " ) was operating the Pit, and Carrick Trucking was doing P a n k e y ' s crushing work. C O N C L U S I O N S OF LAW 24. C a r r i c k Trucking filed suit on May 5, 2009, against

N i e t e r t , Outlander, Samaritan, Hattabaugh, and Black, making the f o l l o w i n g claims: * as against Outlander and Samaritan, Carrick Trucking

a s s e r t s a claim for breach of contract; and * a s against Nietert, Hattabaugh, and Black it asserts

c l a i m s for conversion and unjust enrichment. Nietert, Outlander, and Samaritan counterclaimed against

C a r r i c k Trucking for breach of contract, fraud, conversion, unjust e n r i c h m e n t , and intentional interference with business expectancy. B l a c k counterclaimed against Carrick Trucking for failing to r e m o v e its equipment from the property, casting this claim as one f o r intentional interference with business expectancy. Black also appears to seek a declaratory judgment that he owns a l l the blasted rock and crushed gravel that was on the ground when h e bought the gravel pit.

25.

C a r r i c k Trucking's Breach of Contract Claim:

I n order to prove a claim for breach of contract, the claiming party must show that there was a contract; that the contract

r e q u i r e d the defending party to perform or not perform a certain a c t ; that the claiming party did what was required of it under the c o n t r a c t ; and that the defending party did not do what was required o f it under the contract. When the Court AMI 2401. the breach of contract claim of

analyzes

C a r r i c k Trucking, it reaches the following conclusions: (a) Was there a contract?

T h e r e is no dispute that Carrick Trucking had a contract with O u t l a n d e r -- the Crushing Contract. Because Outlander was nothing

m o r e than a sham corporation serving as an alter ego for Nietert, t h e Court concludes that the Crushing Contract bound Nietert as w e l l as Outlander. Any rights or responsibilities assigned to

O u t l a n d e r under the Crushing Contract are also, therefore, rights a n d responsibilities of Nietert. Likewise, Samaritan was a sham corporation and alter ego of N i e t e r t , and he is bound to the extent it is bound. ( b ) Did the Crushing Contract require Outlander to perform or n o t perform certain acts? T h e Crushing Contract required Outlander to blast rock; to s e l l gravel; and to pay Carrick Trucking 70% of the gross it It also required Outlander to allow

r e c e i v e d from such sales.

C a r r i c k Trucking to crush gravel for the life of the Pit, and to

give Carrick Trucking first option to crush for any buyer of the Pit. (c) Did Carrick Trucking do what was required of it under the

C r u s h i n g Contract? Carrick Trucking was required to provide all necessary

e q u i p m e n t to crush gravel and be responsible for all costs incurred i n processing it. There is no evidence that Carrick Trucking failed to carry out t h e s e duties, and in fact the evidence showed that Carrick Trucking a s s i s t e d Outlander in fulfilling its duties under the Crushing Contract, such as marketing and blasting, so as to keep the

c r u s h i n g operation going. (d) Did Outlander do what was required of it under the

C r u s h i n g Contract? Outlander failed to do what was required of it under the C r u s h i n g Contract in the following respects: * i t failed to pay Carrick Trucking 70% of gross sales for

c r u s h e d gravel, as evidenced by the missing money incident in N o v e m b e r , 2008, and the unremitted collection of receivables after C a r r i c k Trucking was evicted; * * i t failed to fund a necessary blast in April, 2009; i t (Neitert) criticized Carrick Trucking to Black in such

a manner as to insure that Black would not retain Carrick Trucking t o do crushing at the Pit; and * i t evicted Carrick Trucking from the Pit in April, 2009.

The first two of these breaches are not, in the Court's view, actionable. continued A breach of contract may be waived or excused by under the contract. AMI 2437. Carrick

performance

T r u c k i n g continued to operate under the Crushing Contract after the i n c i d e n t of the missing money was resolved, excusing that breach. Carrick Trucking also agreed to front the money for the April, 2009, blast, thereby continuing to accept benefits under the

c o n t r a c t , which constitutes a waiver of Nietert's anticipatory breach. Stephens v. West Pontiac-GMC, Inc., 7 Ark. App. 275, 278,

6 4 7 S.W.2d 492 (Ark. App. 1983). The third and fourth incidents constitute material breaches of t h e Crushing Contract by Outlander. failure to perform an essential "A 'material breach' is a term or condition that

s u b s t a n t i a l l y defeats the purpose of the contract for the other p a r t y , " and it excuses performance and allows suit for damages by t h e other party. AMI 2327. By criticizing Carrick Trucking to

B l a c k , and evicting the Carricks from the Pit, Nietert defeated s u b s t a n t i a l purposes of the Crushing Contract for Carrick Trucking, i n s u r i n g that it would not benefit from the provisions that it c o u l d crush for the life of the Pit or have first option to crush f o r any new owner. 26. Contract: In determining the appropriate amount of damages for breach o f contract, the general rule is that the amount should reasonably Damages for Carrick Trucking's Claim of Breach of

and fairly compensate the prevailing party for damages sustained by t h e breach, but not put it in any better position than it would h a v e been in without the breach. AMI 2442. Applying this rule to

t h e breach of contract claim of Carrick Trucking, the Court finds t h e following damages were sustained: * C a r r i c k Trucking was entitled to 70% of the gross sales

r e c e i p t s from the inventory of crushed gravel it created at the Pit. This inventory had a value of $165,550.00, and 70% of that is

$115,885.00. * C a r r i c k Trucking was also entitled to 70% of receivables

c o l l e c t e d by Outlander in the amount of $5,692.00, or $3,984.40. T h e s e sums total $119,869.40, and the Court concludes that Carrick T r u c k i n g is entitled to judgment against Nietert, Outlander, and S a m a r i t a n -- jointly and severally -- for this amount on its breach o f contract claim. T h e Crushing Contract also provided that Carrick Trucking w o u l d be entitled to be compensated if it did not get the first o p t i o n to crush gravel for Black, and there was evidence that the p a r t i e s intended this provision in the Crushing Contract to relate t o repayment of the cost of moving the crushing equipment back to C a r r i c k Trucking's home base in Michigan. While this provision was clearly breached, the evidence showed t h a t Carrick Trucking never moved its equipment back to Michigan, a n d was at the time of trial crushing gravel at the Pit for Pankey. Under these circumstances, the Court finds no basis to award breach

of contract damages to compensate Carrick Trucking for failing to g e t the first option. 27. Samaritan: N i e t e r t , Outlander, and Samaritan assert claims for breach of c o n t r a c t against Carrick Trucking, but the Court finds no evidence w h a t s o e v e r to sustain those claims, and they will be denied and d i s m i s s e d with prejudice. 28. C a r r i c k Trucking's Claims of Conversion: Breach of Contract Claims by Nietert, Outlander and

C a r r i c k Trucking asserts claims of conversion against Nietert, H a t t a b a u g h , and Black. Conversion is established upon proof that

t h e claiming party owned or was entitled to possess property, and t h a t the defending party intentionally took or exercised dominion o v e r that property in violation of the claiming party's rights. AMI 425. The evidence establishes that Carrick Trucking owned or was e n t i t l e d to possess the inventory of gravel it processed at the Pit: * Outlander, carried in The by Crushing its Contract provides as much, vis a vis be by

provision

that

processed

material until paid

would for

Carrick

Trucking's

inventory

Outlander. * H a t t a b a u g h admitted that the gravel inventory belonged

t o Carrick Trucking.

* gravel

B l a c k offered to allow Carrick Trucking to off the property, in effect admitting that

haul

the

the

gravel

b e l o n g e d to Carrick Trucking and not to him. T h i s evidence is consistent with Arkansas law that "where m i n e r a l s are extracted under a lease, the title to the minerals v e s t s absolutely as personal property in the lessee as soon as they a r e mined and removed from their original location." Pemberton v.

A r k a n s a s State Highway Commission, 268 Ark. 929, 9323, 597 S.W.2d 6 0 5 , 608 (Ark. App. 1980). The conveyance in suit is a contract for sale rather than a l e a s e , but the admissions of Hattabaugh and Black make Pemberton analogous. Outlander had the right to mine (blast) minerals from

t h e Pit as long as it was rightfully in possession (i.e., held the P i t under the Hattabaugh/Outlander Contract), and those minerals b e c a m e the personal property of Outlander upon mining. Crushing Contract, the gravel products crushed from Under the the mined

m i n e r a l s (stone) were the inventory of Carrick Trucking until sold, a t which time Carrick Trucking was entitled to 70% of the gross proceeds. When Nietert arranged the transaction by which he returned the Pit to Hattabaugh and Hattabaugh sold it to Black, Nietert

w r o n g f u l l y caused the purported sale of the gravel inventory that b e l o n g e d to Carrick Trucking, and Hattabaugh knowingly acquiesced i n that sale. Thus, both Nietert and Hattabaugh are liable to C a r r i c k Trucking for conversion.

The Court finds Black also liable for conversion.

Black could

o n l y acquire what Hattabaugh had a right to sell, and thus he did n o t acquire the inventory which he later sold. Although Black was

n o t aware of all relevant facts about the sale of the Pit, he was n o t a bona fide purchaser because he was on notice of facts that w o u l d have caused a reasonable purchaser to make further inquiry, a n d which would have led him to discover that Carrick Trucking o w n e d the gravel inventory. "Whatever is notice enough to excite

a t t e n t i o n , put a party on guard and call for inquiry is notice of e v e r y t h i n g to which the inquiry might lead, and whenever one has s u f f i c i e n t information to lead him to a fact he shall be deemed c o n v e r s a n t with it." Woods v. Wright, 254 Ark. 297, 302, 493

S . W . 2 d 129, 131 (Ark. 1973). Here, the haste with which the transaction was put together is a fact which should have led to further inquiry. Black agreed to

b u y property valued at almost half a million dollars without even m a k i n g a site visit -- which would have shown the equipment of the C a r r i c k s in situ and would have shown that it was not such as could b e removed on short notice. Black also agreed to the deal without

b e i n g able to read and understand the documents he was signing. Hattabaugh obviously wanted to consult his attorney about the

t r a n s a c t i o n , but was persuaded to go forward immediately rather t h a n wait till he could see the attorney when offered an additional $10,000.00. would have These aspects of the transaction, known to Black, put a person of ordinary prudence on notice that

something was not right about the deal.

A simple inquiry posed to

t h e Carricks would undoubtedly have revealed their claim to the g r a v e l inventory. Since Nietert, Hattabaugh and Black each sold the gravel

i n v e n t o r y , each exercised dominion over the gravel inventory in v i o l a t i o n of the rights of Carrick Trucking, for which Carrick T r u c k i n g is entitled to judgment. amount to 70% of the The damages for this conversion value of the inventory

discounted

( $ 1 6 5 , 5 5 0 . 0 0 ) , or $115,885.00, which should be awarded jointly and s e v e r a l l y , given that it was the interrelated actions of Nietert, H a t t a b a u g h , and Black that jointly deprived Carrick Trucking of its r i g h t s to the gravel inventory. These damages are duplicative of t h e damages sustained by Carrick Trucking for breach of contract on t h e part of Nietert and Outlander, for which Carrick Trucking can h a v e but one recovery. 29. Claims of Conversion Against Carrick Trucking:

N i e t e r t , Hattabaugh, and Black alleged conversion on the part o f Carrick Trucking, but no evidence supports these claims and they w i l l be denied and dismissed with prejudice. 30. C a r r i c k Trucking's Claims of Unjust Enrichment:

C a r r i c k Trucking also asserts claims of unjust enrichment a g a i n s t Nietert, Hattabaugh, and Black. An action based on unjust

e n r i c h m e n t "is maintainable where a person has received money or i t s equivalent under such circumstances that, in equity and good c o n s c i e n c e , he or she ought not to retain [it]." DePriest v.

AstraZeneca Pharmaceuticals, L.P., 2009 Ark. 547, --- S.W.3d ---, 2 0 0 9 WL 3681868 (2009). The same facts and circumstances that prove a claim of

c o n v e r s i o n against Nietert, Hattabaugh, and Black, prove a claim of unjust enrichment on behalf of Carrick Trucking against these Thus,

d e f e n d a n t s , and the damages are the same for both claims.

C a r r i c k Trucking is entitled to judgment, jointly and severally, a g a i n s t Nietert, Hattabaugh, and Black, on its claim of unjust enrichment. Damages will be awarded in the sum of $115,885.00.

These damages are duplicative of the damages sustained by C a r r i c k Trucking for breach of contract on the part of Nietert and O u t l a n d e r , and for conversion on the part of Nietert, Hattabaugh, a n d Black, and Carrick Trucking can recover them only once. I n addition, the Court finds that Nietert, Outlander, and S a m a r i t a n were unjustly enriched at the expense of Carrick Trucking w h e n Carrick Trucking advanced the sum of $8,696.72 for the April, 2008, blast that was the financial responsibility of Nietert,

O u t l a n d e r , and Samaritan.

Carrick Trucking will be given judgment

f o r that sum against Nietert, Outlander, and Samaritan. 31. The Unjust Enrichment Claims against Carrick Trucking: Court finds no evidence of any unjust enrichment of

C a r r i c k Trucking at the expense of Nietert, Hattabaugh, or Black, a n d their claims on that theory will be denied and dismissed with prejudice.

32.

C l a i m s for Interference With Business Expectancies: Outlander, Samaritan, and Black all claim that

Nietert,

C a r r i c k Trucking interfered with their business expectancies. This c l a i m requires proof of a valid business expectation; knowledge on t h e part of Carrick Trucking of that business expectation; action t h a t intentionally and improperly induced or caused a disruption or t e r m i n a t i o n of that business expectation; and damages proximately c a u s e d by such disruption or termination. N i etert, whatsoever Outlander, would and tend Samaritan to AMI 403. offered their no evidence of

that

establish

claims

i n t e r f e r e n c e with business expectation, and those claims will be d e n i e d and dismissed with prejudice. B l a c k ' s claim for interference was premised on evidence that h e could not conduct blasting operations at the Pit for several w e e k s because Carrick Trucking's equipment was located too close to t h e blast site. Black failed, however, to show that any conduct of Carrick Trucking improper. that prevented him from blasting was intentional or

Indeed, it appears to the Court that Nietert and Black

c a u s e d the problems which resulted in the failure to remove the equipment, by summarily evicting Carrick Trucking; not giving

i n f o r m a t i o n about how they could be reached; and allowing too short a time frame for such a complicated move. Black's claim for

i n t e r f e r e n c e with business expectancy will likewise be denied and d i s m i s s e d with prejudice.

33.

F r a u d Claims against Carrick Trucking:

N i e t e r t , Outlander, and Samaritan claim that Carrick Trucking i s liable to them on a theory of fraud. This claim requires proof

t h a t Carrick Trucking made a false representation of material fact; that Carrick Trucking either knew or believed that the

r e p r e s e n t a t i o n was false or knew or believed that it did not have s u f f i c i e n t information to make the representation; that Carrick T r u c k i n g intended Nietert, Outlander, or Samaritan to act on the r e p r e s e n t a t i o n ; that Nietert, Outlander, or Samaritan relied on the representation; and that Nietert, AMI 402. justifiably or

Outlander,

S a m a r i t a n sustained damages as a result.

N i e t e r t , Outlander, and Samaritan did not present any evidence of fraud, nor have they offered any analysis in post-trial

b r i e f i n g s as to how they think this tort might have been committed o r how they might have been damaged by it. The fraud claims of

N i e t e r t , Outlander, and Samaritan will, therefore, be denied and d i s m i s s e d with prejudice. 34. Black's Claims re Gravel Inventory:

B l a c k makes a claim against Carrick Trucking for failing to remove its equipment from the Pit, and appears to seek a

d e c l a r a t o r y judgment that he owned the gravel inventory created by C a r r i c k Trucking. For reasons already explained in this Opinion,

t h e s e claims will be denied and dismissed with prejudice.

35.

C a r r i c k Trucking's Post-Trial Motion:

B y post-trial motion, Carrick Trucking seeks to amend its p l e a d i n g s to add claims of civil conspiracy and breach of contract a s against Nietert, and to add claims for civil conspiracy and tortious interference with contract as against Black and

Hattabaugh. The reasons for these additional claims, and the analysis of h o w they relate to the evidence are not clear, and the Court finds t h a t the motion should be denied. 36. U n r e s o l v e d Evidentiary Issue:

T h e parties also submitted an evidentiary issue to the Court f o r post-trial decision. The issue is the admissibility of a

s e r i e s of e-mail communications between attorneys attempting to n e g o t i a t e the sale of the Pit between Black and Carrick Trucking. The Court finds that these communications are not admissible, a s they are evidence of a series of negotiations which, if they had b e e n successful, would have concluded this case. 37. See F.R.E. 408.

Black also indicates in his post-trial briefing that his

a r g u m e n t s are applicable to his F.R.C.P. 50 motion at the close of t h e evidence. 38. That motion is without merit, and is denied.

B y separate document, judgment will be forthwith entered

i n accordance with this Memorandum Opinion. I T IS SO ORDERED, this 30th day of April, 2010. /s/ Jimm Larry Hendren JIMM LARRY HENDREN U N I T E D STATES DISTRICT JUDGE