Kohlenberger, Inc. v. Tyson's Foods, Inc.

CONLEY Byrd, Justice, dissenting. I must disagree with the majority opinion in so far as it holds that Kohlenberger, Inc., can prove its contractual limitation of damages and modification of remedy.

Our decisions consistently hold that in the absence of a plea of payment, proof thereof is inadmissible. See Arkansas Power & Light Company v. Liebe, Admix., 201 Ark. 292 , 144 S.W. 2d 29 (1940). It is pointed out in 61 Am. Jur. 2d PLEADING § 156 that affirmative defenses — that is matters constituting a confession and an avoidance such as payment and contractual limitations on the time within which suit may be brought, must be affirmatively pleaded before evidence can be introduced thereon. The Federal Rules of Civil Procedure [Rule 8(c)] are quoted as being to the same effect. We follow the general rule. See Chiles v. Mann & Mann, 240 Ark. 527 , 400 S.W. 2d 667 (1966), where, upon a general denial, we upheld the trial court's ruling that appellant could not show that he signed the note in issue in his capacity as president of a corporation instead of his individual capacity. In so holding we said:

“There are several reasons why the Court was correct in this ruling. The first relates to the rules of pleading: i.e.., under a general denial testimony of confession and avoidance cannot be heard such as here: the defendant confesses his act of signing the note but seeks to avoid the effect by claiming he signed, as an officer of a corporation. Some of our cases showing the limited evidence that may be offered under a general denial are: Grier v. Yutterman, 102 Ark. 433 , 145 S.W. 194 ; and Shirk v. Williamson, 50 Ark. 562 , 9 S.W. 562 . Our cases are in accord with the general rules as regards pleadings. In 41 Am. Jur. 396 , ‘Pleadings' § 149, the text reads: ‘Like the general issue, the general denial operates as a denial of every material allegation of the complaint as fully as if it had been specifically and separately denied. . . .It covers defenses which go to destroy the plaintiff’s cause of action, but not those which are grounded on new matter or matters in avoidance or other defense that must he specially pleaded.’’ (emphasis supplied.) And in § 155 of the same text the general holdings are summariz.ed: 'Since the plaintiff must apprise the defendant in the beginning as to what he relies upon for a recovery, it is only right that the defendant should be required also to inform the plaintiff of any special or affirmative defense he expects to make by pleading the facts constituting such defenses. ’ ”

Furthermore, in St. Paul Ins. Co. v. Gray, 240 Ark. 66 , 398 S.W. 2d 506 (1966), where we had before us an alleged contractual limitation of liability, we there said:

“A jury trial resulted in a verdict in favor of appellee for $2,575.85, from which appellant prosecutes this appeal, assigning seven separate points for a reversal.

1. In appellant’s answer it admitted owing appellee $190.88 for damage to the tractor, and now contends that is the only amount supported by the evidence. This contention by appellant is based on the assertion that appellee did not offer in evidence the policy provisions relied on to ‘establish the amount ol his loss.’ There is no merit in this contention because appellant, in its answer, admitted issuing the insurance, policy covering the tractor and admitted the tractor was damaged while the policy was in effect. Therefore, if there was any provision in the policy which limited the amount of coverage it was the duty of appellant to plead it affirmatively. Stucker v. Hartford Accident and Indemnity Company, 220 Ark. 475 , 248 S.W. 2d 383 and Bankers Insurance Company v. Hemby, 217 Ark. 749 , 233 S.W. 2d 637 .”

By the default to the complaint of Tyson’s Foods, Inc., Kohlenberger, Inc., admitted that it breached an express warranty, an implied warranty of merchantability and an implied warranty of fitness. Yet, as I understand the majority opinion, it is permitting Kohlenberger, Inc., who defaulted, to prove in mitigation of damages not only that it contractually excluded any implied warranties of merchantability or fitness but also that it limited its liability for breach of the warranty including an exclusion of all consequential or incidental damages. To me these are either new matters or matters by way of confession and avoidance, and when we place a defaulting defendant in a better position on proof of damages than we would one who had filed a general denial, we are placing an undue burden upon both the plaintiff and the trial court. Under the majority view the plaintiff, just to prove his damages, would have to anticipate every conceivable affirmative defense and have the witnesses available in court to make the necessary proof to overcome the defaulting defendant's evidence.

Since I consider payment, exclusion of implied warranties of merchantability or fitness and a contractual limitation of liability as matters that must be specifically pleaded, it follows that 1 find that the trial court was correct in allowing “(b) $48,969.89, as consequential damages resulting from defendant's breach of warranty as the result of ice purchased by plaintiff [Tyson’s Foods, Inc.| to perform its operations during times said machinery was either partially or totally inoperative." Under those circumstances it would appear that Tyson's Foods. Inc., upon the entering of a remittitur for all amounts in excess of $48,969.89 would be entitled to an affir-mance as modified.

For the reasons herein stated I respectfully dissent.