Freeman Holdings of Arkansas, LLC v. FNBC Bancorp, Inc.

          Friday, Eldredge & Clark, LLP, by: William A. Waddell, Jr. and Joshua C. Ashley, for appellants.

          Quattlebaum, Grooms & Tull PLLC, by: Joseph W. Price II and Thomas H. Wyatt, for appellee.

          APPEAL FROM THE BAXTER COUNTY CIRCUIT COURT [NO. 03CV-16-263] HONORABLE JOHN R. PUTMAN, JUDGE.

          RAYMONDR. ABRAMSON, JUDGE.

         This lawsuit arises out of an online auction to sell certain real property located at 901 South Main Street in Mountain Home, Arkansas. The overarching issue presented in this appeal is whether Freeman Holdings of Arkansas, LLC, and Francis B. Freeman, Jr., (Freeman) formed an enforceable contract with FNBC Bancorp, Inc. (FNBC), to purchase the property. The circuit court found that an enforceable contract existed between the parties and ordered specific performance. We affirm.

         I. Background

         FNBC sought to sell certain real property located at 901 South Main Street in Mountain Home, Arkansas. FNBC hired Wooley Auctioneers (Wooley) to administer an online auction to sell the property and gave Wooley the exclusive right to offer the property for sale. In the course of Wooley's representation of FNBC, Wooley drafted the documents for the online auction, and FNBC accepted those documents as its own.

         Freeman was interested in purchasing the property. Freeman authorized its agent, Raymond Mikesch, to conduct research on the auction and bid on the property. It is undisputed that Mikesch had authority to act on Freeman's behalf.

         Before the auction, Mikesch perused Wooley's website to familiarize himself with it. Then, on April 27, 2016, the date of the auction, Mikesch logged on to Wooley's website and registered to bid. Mikesch was required to accept the terms and conditions of the auction when he registered to bid on the property. Thereafter, he made thirteen separate bids to purchase the property. At the conclusion of the auction, he was informed that he had placed the highest bid-$52, 000.

         The terms and conditions agreed to by Mikesch would prove to be integral to the future litigation. They provide in part as follows:

TERMS TO PURCHASE REAL ESTATE: Successful Purchasers Will Be Required To Tender A Cashier's Check In The Amount Equal To 20% Of Contract Purchase Price To The Respective Title Company(s) Within 48 Hours After Acceptance By The Bank, Along With A Signed Copy Of The Offer & Acceptance Agreement That Will Be Emailed To You Immediately After Acceptance By The Bank. The Balance Will Be Due In Approx. 30 Day [sic] At Closing. The Purchaser Will Pay The Buyers Side Of The Closing Costs And All Taxes Will Be Prorated To The Date Of Closing.

         The terms and conditions also specify that a 10 percent buyer's premium will be added to the bid to determine the final sales price and refer to a "sample" offer-and-acceptance agreement, which is not included in the record and may not have existed at the time Mikesch placed bids on behalf of Freeman. Finally, the terms and conditions indicate that "your bid is a contract to buy" and that all property is sold "as is."

         After Mikesch learned that Freeman had placed the highest bid for the property, he called Wooley and was informed that FNBC had to accept its bid. Mikesch admitted that he was later notified that FNBC had accepted the bid. Thereafter, Wooley allegedly sent Mikesch an email that attached the auction contracts, including the offer-and-acceptance agreement. Importantly, the offer-and-acceptance agreement merely reiterated the terms and conditions to which Freeman had agreed and incorporated the exact monetary amount Freeman offered to pay. Specifically, the offer-and-acceptance agreement specified the bid price offered by Freeman-$52, 000. The document then calculated the 10 percent buyer's premium-$5200; the total purchase price-$57, 200; the down payment-$11, 440; and the balance due at closing-$45, 760. Mikesch contends that he did not receive Wooley's email. Two months passed, and Freeman never paid any of the money due according to the terms and conditions of the auction, nor did it sign the offer-and-acceptance agreement. Freeman never closed on the sale of the property.

         Freeman's refusal to close on the property was based on perceived problems with it. After the auction, Freeman inspected the property, which led it to conclude that the building's pipes had burst. Freeman declined to go forward with its purchase because it believed that the property had not ...