Trammell v. Hooks

Citation: 2013 Ark. App. 576Docket: CV-12-685

Court: Court of Appeals of Arkansas; October 9, 2013; Arkansas; State Appellate Court

Original Court Document: View Document

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Lawrence Trammell initiated a breach-of-contract lawsuit against Willis Hooks regarding a $400,000 real estate and business sale agreement in Paragould, which Trammell claimed Hooks failed to honor. Hooks countered that he had paid Trammell $240,000 in cash on January 3, 2011, as an accord and satisfaction of the contract, a claim that Trammell disputed. The Greene County jury sided with Hooks, leading to the trial court awarding him attorney fees. Trammell's appeal focused on the sufficiency of evidence for the accord and satisfaction defense. The court affirmed the jury's decision, noting that accord and satisfaction requires evidence of a disputed amount and consent to accept a lesser amount as settlement. The court emphasized that the elements of accord and satisfaction mirror those of a contract: offer, acceptance, and consideration. Additionally, a good faith dispute over the debt suffices to establish the defense, and there must be an objective indicator that the payment discharges the debt. Hooks and Trammell had three written agreements, including a December 14, 2010, Mortgage Contract for $400,000, which lacked specific payment terms but was signed and notarized. A Warranty Deed was also executed on the same day but not delivered to Hooks.

On January 3, 2011, Trammell requested an amortization schedule from his accountant, which outlined a twenty-year repayment plan at an eight percent interest rate, with monthly payments of approximately $3,346, totaling over $802,000 by the end of the period, more than half attributed to interest. Trammell showed this schedule to Hooks, who expressed concern over the high interest and indicated he did not intend to pay it all. That same day, Hooks provided Trammell with $240,000 in cash to settle the Mortgage Contract, delivering the cash in a parking lot, unobserved by others. Hooks asked for a receipt, and Trammell made a handwritten note on the Mortgage Contract indicating the payment and marked it with an "X." Trammell then provided Hooks with an executed Warranty Deed, which Hooks filed on January 6, 2011. A notary later notarized the document but did not witness the cash transaction.

Additionally, there was a liquor-inventory contract where Trammell sold liquor inventory to Hooks for $6,000, with Hooks paying $2,000 in cash and owing a $4,000 balance. Hooks later made another $2,000 payment, and this remaining amount was held in court and released to Trammell. Hooks requested a jury instruction on accord and satisfaction, which was granted despite Trammell’s objections. Trammell's request for an instruction on contract modification was denied, as the trial court deemed the accord-and-satisfaction instruction sufficient. Trammell argued that there was insufficient evidence to justify the accord-and-satisfaction instruction, asserting that jury instructions must be based on correct legal statements and supported by evidence.

The trial court provided a jury instruction regarding the burden of proof for an accord and satisfaction claim made by Willis Hooks. The instruction outlined three essential elements that Hooks needed to prove: (1) mutual agreement between the parties for a different performance to satisfy the original contract, (2) understanding that the original contract's rights and obligations were canceled by this agreement, and (3) actual performance of the substituted obligation. The court found sufficient evidence of a dispute over the debt, as Trammell increased the price by adding interest, which Hooks contested, and there was an indication of a mutual agreement for a $240,000 payment as full settlement of the Mortgage Contract. Evidence included Hooks’ cash delivery and Trammell’s acknowledgment of a handwritten note indicating satisfaction of the contract. The jury was tasked with determining if the payment occurred.

The court affirmed the accord-and-satisfaction instruction and rejected Trammell's argument that Hooks' subsequent $2,000 payment for a separate liquor agreement negated the full payment claim concerning the Mortgage Contract. The trial court also declined to provide a contract-modification instruction, as the accord-and-satisfaction instruction sufficed and was consistent with Hooks' defense. Trammell's appeal for reversal of attorney fees was denied since he did not establish reversible error. The award of attorney fees was affirmed. Judges Gruber and Wood concurred.