City of Crossett v. Pacific Buildings, Inc.

Tom Glaze, Justice. This is an appeal from the chancellor’s ruling ordering the City of Crossett to accept, maintain and operate the sewer system installed in the Woodlawn Subdivision. The city appeals, alleging seven points of error. We find no error and therefore affirm. The Woodlawn Subdivision was the product of a joint venture between Southeast Properties and Real Estate and Pacific Buildings, Incorporated. These two companies used the name Woodlawn Development Company (Woodlawn) for their joint venture.1 Woodlawn employed the engineering firm of Marion Crist and Associates, which assisted in designing a plan for a 150 house subdivision. The Woodlawn developers met with the Crossett Sewer Commission, and on August 21, 1972, the Commission and its chairman introduced a proposal for the Woodlawn Subdivision to tie into the city’s sewer system. Woodlawn was to install the system, and the city was to maintain it. The Crossett City Council approved the proposal. After the city’s approval, Woodlawn obtained financing and hired Byron Jones to install the system. As the developers constructed and completed houses in the subdivision, they connected and tied the houses into the city’s water and sewer systems. On March 18,1974, the city council changed its position and voted that Woodlawn must both install and maintain the sewer system. Robert Kennedy, a partner in Southeast Properties, testified that he was unaware of this change or the council’s meeting. It is conceded, however, that Woodlawn had been operating and maintaining the system since it was installed. Nonetheless, according to Kennedy, he first became aware of the city’s refusal to maintain the sewer system only when he received a complaint from the State Health Department in January of 1979. After learning of the city’s decision to require Woodlawn to maintain the system, Woodlawn met with the Crossett City Council on February 26, 1979. As a result of that meeting, the council passed a motion that it would accept the obligation to maintain and operate the sewer system if the city was furnished with written certification from Marion Crist and Associates that (1) the system was constructed according to the construction standards of the city or (2) the system now meets the construction standards of the city for a sanitary sewer system. After two inspections by Robert Yeatman, an employee of Marion Crist, and the completion of recommended repair work, Yeatman, in a letter to the city dated October 20,1986, certified that Woodlawn’s sewer system was now in compliance with the city’s standards for sanitary sewerage facilities. However, on May 18,1987, the Crossett City Council still voted not to accept the system. Woodlawn (Pacific Buildings, Inc.) filed suit against the city asking for specific performance and mandatory relief requiring the city to accept, maintain and operate the sewer system. The city responded by denying Woodlawn’s claims and by raising the affirmative defenses of the statute of limitations, laches, waiver and estoppel. The city also claimed the chancery court had no jurisdiction to award the relief requested by Woodlawn. The trial court rejected all of the city’s claims and defenses and ordered the city to accept, maintain and operate Woodlawn’s system effective October 20,1986, the date Marion Crist certified the system. We first dispose of the city’s jurisdiction argument when it claims the relief requested by Woodlawn is actually one of mandamus, which is not cognizable in chancery court. Although the city attempts to turn Woodlawn’s action into one of mandamus, we point out that from the very inception of this litigation, Woodlawn has sought to compel the city to specifically perform its agreement or commitment to accept and maintain Wood-lawn’s water and sewer system in accordance with the parties’ original agreement in 1972, and the more recent one, which resulted from their meeting on February 26, 1979. Specific performance is an equitable remedy which compels the performance of an agreement or contract on the precise terms agreed upon. McCoy Farms, Inc. v. J & M McKee, 263 Ark. 20, 563 S.W.2d 409 (1978). The chancery court in this cause clearly had the power to award the relief requested by Woodlawn. We also find no merit in the city’s arguments that the trial court erred in holding the city’s defenses of statute of limitations, laches, waiver and estoppel did not bar Woodlawn’s action. The city argues eight years elapsed between the time it conditionally agreed to maintain Woodlawn’s system in February 1979, and when Woodlawn filed suit on August 12, 1987. The record, however, reflects the parties’ agreement never specified a time within which the conditions in the parties’ 1979 agreement were to be completed. While the law provides for the implication of a reasonable time for the condition to be performed, the evidence reveals that both parties worked together and with others in order to resolve the problems surrounding Woodlawn’s systems.2 The city council apparently remained dissatisfied but did not refuse the system until May 18, 1987 — after Woodlawn furnished the city the certification it requested. Woodlawn filed suit three months later. We believe the evidence clearly supports the chancellor’s decision that Woodlawn’s action was timely and did not prejudice the city’s position in this cause. Although the city also argues waiver and estoppel, we believe much of the evidence already noted above runs contrary to those defenses, as well. The city argues Woodlawn waived its claim that the city should maintain and operate the system because Woodlawn had maintained it over long periods of times. Further, the city says Woodlawn should be estopped to assert its claim because Woodlawn failed to construct the system as designed or to city standards, and it failed to construct the number of houses originally specified. It also asserts Woodlawn knew the sewer system did not work from the time it was built until sometime, in 1984. Again, Woodlawn presented proof that it, the city and others were working towards the city assuming its obligation to maintain the subdivision’s sewer system — as the city first promised in 1972. While the record reflects this matter was often an on-again, off-again project, Woodlawn never abandoned its actions to get the city to maintain the system, and as is evidenced by the city’s actions in February 1979, the city continued to work with Woodlawn towards this end. The construction of the houses was to be performed in phases, and obviously their construction would in part be dependent upon the resolution of the differences between the city and Woodlawn over the sewer system. The appellant next contends that the chancellor erred in finding that the Woodlawn sewer system met the city’s construction standards for sanitary sewer systems. We cannot agree. This court will reverse a chancellor’s finding only if it is clearly erroneous. ARCP Rule 52. At the trial, Byron Jones, the contractor of the Woodlawn sewer system, testified that one four inch line ran from the main sewer line to a “Y” connector, which allowed lines from two houses to be attached. After hearing this testimony, Robert Yeatman testified on cross-examination that at the time he wrote the letter certifying that the sewer system met the city’s standards, he was unaware that the system had only one service connection for every two lots. Yeatman further stated that the system’s one four inch line to two houses did not meet the city standards and was not in accordance to the plans prepared by Marion Crist and Associates. The city also produced testimony by Dean Ray, the city building official, that Woodlawn’s sewer system did not meet the city’s standards. In response to the foregoing testimony, Woodlawn had Ray explain that he could not show where the city standards required one line per house. In fact, Ray testified that the city had adopted the State Plumbing Code, which does not require one line per house. Ray conceded that he could not point to anything showing that the city had ever amended the code so as to require one service line to one house. Ray also testified that “there were some areas in Crossett that had two sewers tied into one line.” In reviewing all of Ray’s testimony, one could fairly state that parts of it may be cited to support either the city’s or Woodlawn’s position ás to whether the Woodlawn system now meets the construction standards of the city. Because the record is unclear on what construction standards the city required, we simply are unable to say that the chancellor’s finding was clearly erroneous on this issue. We next consider the city’s argument regarding whether the chancellor erred in allowing expert witnesses, Robert Yeatman and Jimmy Knight, to remain in the courtroom. The city had invoked “the rule” to have all witnesses not currently testifying removed from the courtroom. The chancellor granted the city’s request, but allowed Woodlawn to have two expert witnesses remain in the courtroom. We find no error in the trial judge’s actions. Upon request of a party, the court shall order witnesses to be excluded so that they cannot hear the testimony of the other witnesses. A.R.E. Rule 615. The standard of discretion given to the trial judge by this part of the rule is that of no discretion. Blaylock v. Strecker, 291 Ark. 340, 724 S.W.2d 470 (1987). However, the rest of Rule 615 exempts certain persons from the operation of this rule, and the applicable provision here exempts a person whose presence is shown by a party to be essential to the presentation of his or her cause. When dealing with the exemptions from “the rule” provided in the Rule 615, this court has said that the trial judge has average discretion. Id. When reviewing the testimony of Yeatman and Knight, on hindsight, we agree that their testimony was based more on their independent knowledge of the sewer system than on any knowledge they may have obtained by hearing other testimony in the courtroom. At the end of Yeatman’s and Knight’s testimony, the city objected that it had not been shown that their opinion testimony was based on other witnesses’ testimony. Although the chancellor appeared to agree with the city, he overruled the objections because he found that the city had not been prejudiced. We agree. Violation of the witness-exclusion rule goes primarily to witness credibility. See Martin v. State, 22 Ark. App. 126, 736 S.W.2d 287 (1987). Here, the city was free to challenge the credibility of the witnesses’ testimony on the basis that they had heard testimony from prior witnesses. The city has failed to show that it was prejudiced by Yeatman and Knight remaining in the courtroom. In fact, the city, in much of its argument on appeal, relies heavily on Yeatman’s opinion testimony, elicited during the city’s cross-examination, which was based upon Byron Jones’s testimony at trial. Finally, the city argues that the chancellor erred in making its order retroactive to October 20, 1986, the date Yeatman certified by letter that Woodlawn’s sewer system met the city’s standards. The city’s argument here is similar to its jurisdictional argument in that it claims Woodlawn’s action is for preventive or injunctive relief, which is not relief which addresses wrongs already committed. Here, the chancellor granted specific performance and stated further that it would enter orders of mandatory injunction as are necessary to insure that the city complies with the orders of the court. In granting such relief, the court merely took into account that the city had voted to accept the Woodlawn sewer system when it received the required letter of certification from Marion Crist and Associates. Accordingly, the condition to which the parties agreed was met on October 20, 1986, and the chancellor was correct to grant relief under the remedy of specific performance beginning with that date. For the reasons stated above, we affirm. Holt, C.J., dissents. Footnotes [1] Pacific Buildings, Inc. has since purchased Southeast Properties’ interest in the subdivision and is now the only company involved in this litigation. For opinion writing purposes, Pacific Buildings, Inc. and Woodlawn will be considered as one and the same. [2] There was evidence to show that during this time Southeast Properties was having financial trouble which later led to Pacific Buildings purchasing its interest. During some of this time, the repair work on the sewer system was undertaken by a part-time service man.