“One who, as the result of gift or collateral agreement, is entitled to the contractual performance owed another,” is the definition of third-party contracts. Third party contracts can be very difficult to legislate and may often result in judicial errors. Little Rock Wastewater Utility v. Larry Moyer Trucking, Inc is a very complicated example of how thin a margin third party contracts have. In this specific case, it is unfortunate to say that the court of appeals erred in its decision.
In front of the Honorable Judge Ward, Larry Moyer of Moyer Trucking made his case. He claimed that his company was a third party beneficiary of the sewer line with relocation agreement between the Arkansas Highway Commission and Utility. This claim was based on Little Rock Wastewater Utility failure to finish the original job of removing the sewer lines before Moyer began and Southern Pavers began. Both companies agreed that Utility’s actions constituted in damages to both companies. Judge Ward agreed with Moyer’s argument and upon a trial, Moyer was awarded some sixty-two thousand dollars. Needless to say that Utility appealed followed by Moyer’s and Pavers cross-appeal. Justice Dudley presided declaring, “We affirm on direct appeal and reverse and remand on cross-appeal.” This meant the court appealed the ruling and favored Utility’s argument and remanded the case.
Utility’s appellate argument was what led Justice Dudley to his conclusion. The company argued that there was no basis for Moyer to claim they were a third party beneficiary of the contract. Moyer’s case was based mostly on evidence, however, the court of appeals found that you can not base your case on speculative damages and that was all the evidence they had. This resulted in the overturning of the ruling stating Moyer’s Trucking did not suffer any damages from the delays of the utilities. Southern Paver’s appeal was also grouped in with Moyer’s and the court remanded their cross-appeal. The Judge did not find enough evidence of damage to support the claims of the two companies; nor did he find that Utility’s job of not completing the removal of the sewer lines to be a problem. Justice Dudley sadly took the wrong stance; Utility failed to finish removing the sewer lines leaving other two companies from properly doing their construction.
Moyer’s Trucking and Southern Pavers:
Moyer’s Trucking and Southern Pavers were very close to a breach of contract all because utilities were unable to remove the sewer line in the allocated time. They won the bid for the job by saying that they could remove it all within roughly 180 days. As of August 12, 1988, the Little Rock Wastewater Utility had 30 days as of notification to start removal and according to the “Relocation Agreement” had 150 days of non-disturbed work to finish the job. In the spring of 1991 Utility had not yet finished the job; by this time the Southern Pavers entered into a separate contract with the Department and brought in Moyers Trucking for assistance. The problem was there before construction started. How was a company going to make a bigger street if the sewer lines were not all removed; how was a trucking company going to clear the wreckage from the enhancement of the street if they could destroy numerous underground sewer lines? The Utility company was causing huge delays in these companies’ jobs. They were unable to do their job effectively and it was causing the government money not to mention their own companies.
The correct result for this case was originally correct. The Little Rock Wastewater Utility group had not yet finished their job of relocation causing Southern Pavers and Moyer’s Trucking to put off the expansion of the new highway. The court of appeals should have realized that by these companies not being able to do their jobs it was causing them manpower, time, and not to mention money. No doubt workers were being wasted on this site waiting for a company that had more than ample time to remove its own sewer lines. The court should have upheld the previous ruling with one or two additions. Southern Pavers was also worthy of collecting funds and in addition to the sixty-two thousand legal fees should have been compensated.
In the court of appeals, Justice Dudley chose with the wrong side. The Little Rock Wastewater Utility’s company caused much further damage then either subcontractor did. By not getting the original removal of the sewer lines done the other work was not able to precede causing a delay on the highway and a delay for the state of Arkansas.