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JMD Construction Services, LLC v. General Construction Solutions, Inc.

Court of Appeals of Arkansas, Division I

May 15, 2019



          Murphy, Thompson, Arnold, Skinner & Castleberry, by: Kenneth P. "Casey" Castleberry, for appellant.

          Cullen & Co., PLLC, by: Tim Cullen, for appellee.

          RAYMOND R. ABRAMSON, Judge.

         This case involves a contract dispute that ultimately led to a March 8, 2018 bench trial in the Washington County Circuit Court. The circuit court found in favor of appellee, General Construction Solutions, Inc. (GCS), on its breach-of-contract claim and entered judgment against appellant, JMD Construction Services, LLC (JMD). The circuit court specifically found that the term "sealer" as used in the parties' contract was ambiguous and, resorting to parol evidence to discern the parties' intent, found that credible evidence established that the parties did not intend for GCS to provide any work associated with curing the concrete. Alternatively, the court ruled that even if the contract was not ambiguous, it was subject to reformation based on mutual mistake. The circuit court also dismissed JMD's counterclaim with prejudice. On appeal, JMD argues that the circuit court erred in finding that labor for initial curing was excluded from the scope of work; that the circuit court erred in reforming the subcontract to remove all curing labor from GCS's scope of work; and that the circuit court's order awarding attorney's fees and costs should be reversed. For the following reasons, we affirm.

         On May 23, 2016, JMD was hired as the general contractor to build a FedEx Ground facility in Lowell, Arkansas. On September 26, 2016, JMD and GCS entered into a written agreement for GCS, as the subcontractor, to provide the labor for the concrete work to construct the building foundation and floor slab. The scope of work, attached as Exhibit "A" to the subcontract, required GCS to "Provide all Labor necessary to perform a turnkey building foundation and floor slab package as outlined in the Subcontract Documents." Division 3 of the FedEx Ground standard specifications ("specifications"), which were made part of the subcontract, provided a detailed description of the requirements for all concrete work, including, inter alia, both initial curing and final curing, which were defined and distinct processes. The following were listed as "exclusions" from GCS's scope of work: "Bonds, Materials Testing, Permanent Materials, Haul off of Spoils, Security Building, Sealer, Epoxy Crack Fill, Light Plants, Weather Protection, Modular Forms, Excavation & Grading Equipment & Operators."

         At the crux of this case is one word: "sealer." GCS contends the term "sealer" includes "curing"; therefore, it was not obligated under the parties' contract to perform any work associated with curing concrete. JMD contends the term "sealer" does not include curing; therefore, GCS was obligated under the parties' contract to perform labor associated with curing the concrete. Over the course of the contract, JMD held back 10 percent retainage pursuant to the terms of the contract, which was to be paid thirty days following completion of the scope of the work, but at the conclusion of the work, JMD failed and refused to pay the retainage, claiming GCS did not perform the curing work required by the contract.

         On August 9, 2017, GCS filed suit against JMD for breach of contract. JMD filed an answer and a counterclaim alleging that GCS owed JMD $73, 486.20 for the cost JMD incurred for labor to perform the initial curing of the concrete slab. GCS subsequently filed a second amended complaint wherein it sought reformation of the contract and declaratory judgment in addition to the breach-of-contract claims asserted in its original and first amended complaints. JMD timely answered both amended complaints.

         Following a bench trial, the circuit court found that the term "sealer" as used in the parties' contract was ambiguous, thereby opening the door to parol evidence about the contract negotiations, the correspondence after the contract was entered, and the parties' conduct and course of dealing. After resorting to parol evidence, the circuit court concluded that the exclusion of "sealer" from GCS's scope of work was intended to exclude all labor to cure the concrete, including both initial curing and final curing. The circuit court also reformed the parties' contract to exclude all labor necessary to cure the concrete on the basis of GCS's claim of mutual mistake and dismissed JMD's counterclaim. Judgment was entered in favor of GCS on March 15, 2018, for the principal amount of $73, 978.73, plus $175.63 in recoverable costs and attorney's fees in the amount of $9, 975.00, together with pre- and postjudgment interest. On April 11, 2018, JMD timely filed its notice of appeal, and this appeal is now properly before our court.

         JMD's first appellate argument is that the circuit court erred in finding that labor for initial curing was excluded from GCS's contractual scope of work. JMD and GCS agree that "sealer" is excluded from the contract. JMD further admits that "sealer" is a part of the curing process. The circuit court found that Wes Taylor, owner of GCS, credibly testified that "sealer" and "curing" are the same thing. JMD argues that curing is included in the contract because it is not specifically excluded. But JMD admits that "sealer" as part of the curing process is excluded. No independent expert witness testified at trial regarding the term "sealer" and what exactly it means.

         The standard of review of a circuit court's findings of fact after a bench trial is whether those findings are clearly erroneous. First Nat'l Bank v. Garner, 86 Ark.App. 213, 167 S.W.3d 664 (2004). A finding is clearly erroneous when, although there is evidence to support it, the reviewing court on the entire evidence is left with a definite and firm conviction that a mistake has been made. Id.

         We have long held that it is the duty of courts to enforce contracts as written and in accordance with the ordinary meaning of the language used and the overall intent and purpose of the parties. Dugal Logging, Inc. v. Ark. Pulpwood Co., 66 Ark.App. 22, 988 S.W.2d 25 (1999). Language is ambiguous if there is doubt or uncertainty as to its meaning and it is fairly susceptible to more than one equally reasonable interpretation. Ison v. S. Farm Bureau Cas. Co., 93 Ark.App. 502, 221 S.W.3d 373 (2006). However, the mere fact that a term is not defined does not automatically render a contract ambiguous. Zulpo v. Farm Bureau Mut. Ins. Co. of Ark., 98 Ark.App. 320, 255 S.W.3d 494 (2007).

         The initial determination of the existence of ambiguity in a contract rests with the court, and if ambiguity exists, parol evidence is admissible and the meaning of the term used becomes a question for the fact-finder who may consider oral testimony relating to the circumstances surrounding the execution of the contract as well as conversations had with regard to it. Blount v. McCurdy, 267 Ark. 989, 593 S.W.2d 468 (Ark. Ct. App. 1980). Here, there is obviously much dispute as to the term "sealer" and there is uncertainty as to its meaning; therefore, we hold that the circuit court was correct in finding the contract to be ambiguous and allowing parol evidence to be admitted.

         GCS argues that the circuit court properly concluded that "curing" be excluded from the contract even without resorting to parol evidence, citing First National Bank ofCrossett v. ...

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