ARKANSAS COURT OF APPEALS

NOT DESIGNATED FOR PUBLICATION

JOHN MAUZY PITTMAN, JUDGE

DIVISION III

DAVE CAPLE

APPELLANT

V.

JENNIFER WILLINGHAM

APPELLEE

CA01-1180

September 18, 2002

APPEAL FROM THE SALINE COUNTY CIRCUIT COURT

[NO. CIV00-540-2]

HON. GARY M. ARNOLD,

JUDGE

AFFIRMED

The parties lived together in appellant's house for several years without getting married. There was evidence that appellee invested substantial sums in improvements to the property during that time. When their relationship foundered, appellant executed a deed of trust note in the amount of $14,490 in September 1998. The note was to be payable to appellee upon closing following the sale of appellant's house. In March 1999, appellant's attorney extended a formal, written offer to appellee to sell the home to appellee. The letter contained the following clause:

3. An alleged debt, evidenced by a note and Deed of Trust dated on or about September 10, 1998, in the amount of $14,490, is forgiven in full.

The offer also contained a provision detailing what would occur if appellee did not purchase the property. It provides, in pertinent part, that:

[Appellant] assumes all future mortgage payments until sale, agrees to list and enable marketing of the property, agrees not to resume occupancy of the premises, and pays [appellee] at closing per No. 3....

Appellee accepted the offer in writing. Appellee was unable to obtain financing to purchase the home. In contravention of the above-quoted provision, appellant resumed occupancy of the premises and refused to pay appellee the $14,490 referenced in clause number 3 of the agreement. Appellee sued on a theory of contract and recovered the sum she sought, offset by the amount of various items of personal property belonging to appellant that she retained. This appeal followed.

For reversal, appellant argues that the trial court erred in denying his motion to dismiss appellee's third amended complaint because it failed to state grounds for relief; that the trial court erred in refusing to exclude evidence to show that the March 1999 letter was a contract because that letter was not specifically alleged to constitute a contract in the original complaint; that the trial court erred in finding that the note was supported by consideration; and that the trial court erred in declaring the deed of trust note to be a demand note. We find no error, and we affirm.

For the sake of clarity, we will address appellant's first two arguments together because they are interrelated. Appellant asserts in these arguments that the trial court erred in denying his motion to dismiss appellee's third amended complaint because it failed to state grounds for relief, and that the trial court erred in refusing to exclude evidence to show that the March 1999 letter was a contract because that letter was not specifically alleged to constitute a contract in the original complaint.

Appellant argued in his motion to dismiss that appellee failed to state grounds for relief because the note never matured because appellant's house was not sold, and asserted before trial that appellee should not be allowed to assert that the March 1999 letter was a contract. We do not agree that the trial judge erred in denying these motions. Appellee's cause of action was not simply to collect on the note, but was also based on contract; she alleged breach in her amended complaint and attached documents sufficient to show that a contract had been entered into by the parties. Furthermore, as will be discussed infra, there was abundant evidence of both consideration and mutuality of obligation.

There is no requirement that a contract must be encompassed in a single writing. See, e.g., Harper v. Thurlow, 168 Ark. 491, 270 S.W. 607 (1925). Appellee alleged that a contract existed and attached the deed of trust, note, and disputed letter to her complaint. The March 1999 letter clearly formed a portion of the contract between the parties. Even assuming that an amendment to the pleadings was required because of appellant's objection on the morning of trial to introduction of evidence showing that the March 1999 letter was a contract, appellant cannot show undue delay because he did not request a continuance, norcan appellant show surprise or prejudice because he was provided with the letter as an attachment to the complaint. Under these circumstances, the trial court was well within its discretion in permitting any amendment that might have been necessary. See Ark. R. Civ. P. 15(a); Turner v. Stewart, 330 Ark. 134, 952 S.W.2d 156 (1997); Milne v. Milne, 266 Ark. 900, 587 S.W.2d 299 (Ark. App. 1979).

Nor do we agree that the contract between the parties was not supported by consideration. The essence of this lawsuit, as tried, was not the note. It was, instead, a dispute about (a) whether appellant owed appellee a debt for her financial contributions to improvements to his property, and (b) if so, the amount of that debt. Appellant's argument that appellee was fully recompensed by being allowed to live in his house during their cohabitation goes not to the existence of consideration but instead to the amount of the debt, and was a question for the fact-finder to consider in light of other factors, such as her labor invested in the upkeep and improvements to the house. The note and the letter show that there was an extant dispute over these issues, and that the parties reached an agreement regarding them. Although not specifically titled as such, the deed of trust was in the nature of an accord and satisfaction of an existing dispute. Contemporaneous consideration was provided by both parties by their surrender of any legal claims to a greater amount. See generally Inge v. Walker, 70 Ark. App. 114, 15 S.W.3d 348 (2000). Furthermore, the offer extended by appellant's attorney and signed by appellee (which also acknowledged that it was in settlement of a current dispute in lieu of legal action) was in its nature in part an accord and satisfaction of that current dispute, and in part novation, i.e., the substitution ofa new debt or obligation for an existing one, which is thereby extinguished. See McIllwain v. Bank of Harrisburg, 18 Ark. App. 213, 713 S.W.2d 469 (1986); Metropolitan Trust Co. v. Wolf, 8 Ark. App. 1, 648 S.W.2d 494 (1983). We hold that this agreement was supported by consideration and mutuality of obligation and, in light of the evidence that appellant breached the latter agreement by resuming occupancy of the house and failing to sell it as he agreed to do, the trial court did not err in entering judgment for the appellee.

Finally, appellant contends that the trial court erred in declaring the deed of trust note to be a demand note. We do not agree, because it is clear that the trial court did not so hold. Although he found that there was an agreement between the parties set out in the deed of trust, it is clear from the record that his judgment was in fact based on the agreement formed when appellee accepted the offer set out in the letter of March 1999.

Affirmed.

Roaf, J., agrees.

Griffen, J., concurs.