ARKANSAS COURT OF APPEALS
NOT DESIGNATED FOR PUBLICATION
DIVISION III

RICHARD HENLEY AND

AMANDA HENLEY

V. E2000-657

LEON BRITTON AND

RUTH BRITTON HONORABLE CHARLES E. CLAWSON JR.,

Andree Layton Roaf, Judge

Appellants, Richard and Amanda Henley, appeal, for the second time,1 the trial court's grant of rescission in favor of appellees, Leon and Ruth Britton, based on breach of the implied warranty of habitability. The Henleys raise five issues on appeal, namely: the chancellor erred in (1) granting rescission of the contract; (2) failing to impose joint and several liability against co-defendants, Robert and Debra Jones; (3) denying the Henleys' counterclaim seeking foreclosure of the property; (4) denying the Henleys' new trial motion; and, (5) denying the Henleys' motion to reconsider. We affirm.

In October 1996, Leon and Ruth Britton contracted with Richard Henley for the purchase of a new home that was constructed by Henley's brother in law. The contract price was $99,500. The Brittons signed a mortgage in favor of National Bank of Arkansas (NBA)2 for $79,600. They also paid Richard Henley a $5,000 down payment and signed a note, secured by a second mortgage in favor of the Henleys, for $14,900.

Shortly after moving into the new home, the Brittons discovered several problems with the house, including structural and electrical problems. The major problem, however, involved a failed septic system and water retention. At trial, the Brittons introduced pictures of their home showing standing water and sewage in the front and back yards. They also experience flooding within their home due to improper elevation. Leon Britton testified that he asked Richard Henley several times to fix the problems. Mr. and Mrs. Britton were successful at getting repairs for some of the problems; however, the septic system and drainage problems were not corrected. The Brittons then sought to repair the problems themselves. In 1998, the Brittons had the septic pump replaced. This replacement, however, did not resolve the problem. One witness, Jerry Nabholtz, an excavation expert, testified that he declined an offer to repair the Brittons' water retention problem because it could not be repaired. He testified that the home was basically a "retention pond," because there was insufficient drainage around the house. Leon Britton also sought assistance from the Arkansas Department of Health, which inspected the property and later declared it uninhabitable because of the raw sewage leakage. In fact, Mr. Britton testified that his family was forced to vacate their home because of the sewage problem. Several other witnesses testified on the Brittons' behalf and for the most part agreed that the water retention problem could not be resolved.

Sometime in 1999, Robert Jones built a house next door to the Brittons. There was testimony that the construction of the Jones home contributed to Brittons' water drainage problem. Evidence showed that the Jones's house contributed to surface water buildup, but there was no evidence proving how much the Jones home contributed to Brittons' damage.

On January 6, 1999, the Brittons filed an action in Faulkner County Circuit Court alleging breach of the implied warranty of uninhabitability and seeking to rescind the real estate contract.3 They amended their complaint on April 12, 2000, alleging that the construction of a home by their neighbors, Robert and Deborah Jones, contributed to their water retention and drainage problem. The Joneses did not answer and a default judgment was entered against them. The Henleys counterclaimed and sought foreclosure of the property. The parties' claims were heard at a bench trial on November 12, 2002. The trial judge issued a letter opinion, finding that the water drainage and sewer problems rendered the Brittons' home uninhabitable. As a result, the judge ordered rescission of the contract for "substantial failure of consideration." In addition to rescinding the contract, the judge awarded the Brittons restitutionary damages for repairs made to the home; ordered Henley to return the $5,000 down payment; and denied the Henleys' counterclaim seeking foreclosure. No damages were assessed against Robert and Deborah Jones. From that decision the Henleys bring this appeal.

The Henleys' first point on appeal challenges the lower court's award of rescission to the Brittons. The Henleys first argue that rescission is not an appropriate remedy because there can be no restoration. Restoration, the Henleys argue, cannot exist because they cannot be placedback in their original position because there is a mortgage in favor of NBA on the home and NBA is not a party to this law suit. The Henleys rely on Herrick v. Robinson, 287 Ark. 586, 595 S.W.2d 637 (1980), for the proposition that restoration must be possible if rescission is the sought after remedy.

During the trial the following colloquy took place:

Brittons' Counsel: Essentially, we're going to be talking about warranty of fitness for habitability of a home. . . [a]nd asking for rescission. Additionally, on [the Henleys'] foreclosure complaint, the first mortgagee [NBA] I don't believe is a party to the action, so I don't think the foreclosure could proceed. I guess that could be considered for a set-off, but I don't think without that party here, you could actually enter a foreclosure decree.

Henleys' Counsel: As to the foreclosure, we stand ready and willing, and always know we're going to have to pay off the first [mortgagee], and we are ready to proceed to do that if we need to pay off . . . and understand that we would probably do that.

The Henleys did not attempt to join NBA in the current action, and it is clear from the above exchange that they consented to moving forward without joining NBA as a party. The Henleys did not raise their objection to the lower court and cannot be heard to complain on appeal. This court will not consider arguments that are raised for the first time on appeal. Dodson Creek, Inc. v. Fred Walton Realty Co., 2 Ark. App. 128, 620 S.W.2d 947 (1981). Moreover, the Henleys may not complain on appeal of an action of the trial judge when they consented to that action. Neel v. Citizens First State Bank, 28 Ark. App. 116, 771 S.W.2d 303 (1989).

Next, the Henleys assert that grounds supporting rescission were not established, and therefore, rescission was not an appropriate remedy. In Cox v. Bishop, 28 Ark. App. 210, 772 S.W.2d 358 (1989), this court held that the parties were entitled to rescission where there had beena failure of consideration. The Cox court also stated that rescission will not be denied merely because the defendant cannot be completely restored to his original position. Id. The injured party is the primary focus and it is not necessary that the parties be restored exactly to their pre-contract positions. See id.

In Wawak v. Stewart, 247 Ark. 1093, 449 S.W.2d 922 (1970), the Arkansas Supreme Court held that it would recognize the implied warranty of habitability in a contract for a new house. The trial court found that there was a breach of the implied warranty of habitability where there was evidence that heavy rains caused water to seep through the floor causing damage to the appellee's house, and the supreme court affirmed. Id.

In this case, the Brittons sought rescission of the contract based on the implied warranty of habitability. The trial court found that "as a result of the water and sewer problems there has been a substantial failure of consideration in this transaction and that the contract should be rescinded." There was evidence that the Brittons sought to repair the problems and that they were beyond repair. The property was characterized as a retention pond because of its inability to properly drain water. The witness from the Health Department also testified that the septic pump simply did not work. Leon Britton testified that his family was forced to leave their home due to raw sewage buildup. There was water both in and out of the house. It is clear that the Brittons did not receive what they bargained for-a habitable home. In light of these facts it cannot be said that the trial judge's findings were clearly against the preponderance of the evidence.

The Henleys' challenge to the rescission also includes a waiver argument. They state that the implied warranty of habitability was waived by the "as is" language in the contract. An "as is" provision may operate to exclude implied warranties. O'Mara v. Dykema, 328 Ark. 310, 942 S.W.2d 854 (1997); Morris v. Rush, 77 Ark. App. 11, 69 S.W.3d 876 (2002). This argument must fail for several reasons. First, the Henleys failed to make this argument to the lower court and it will not be considered on appeal. Cox, supra. In fact when questioned about the one year builder's warranty, Richard Henley testified that, "my understanding is with new construction for a 12-month period-the homeowner can probably expect to find a few things that are wrong with the house and for a 12-month period has the right to have those things taken care of." Continuing, Richard Henley testified that, "[e]very builder that I've ever worked with understands that for 12 months they have to take care of any problem that come [sic] up with the house." These admissions seem to contradict the Henleys' contention on appeal that the property was sold "as is." Moreover, the "as is" clause in the parties' contract specifically excludes problems with the septic system. Thus, we cannot say the trial court erred in granting rescission based on the existence of the implied warranty of habitability.

The Henleys next argue that the trial court erred in failing to impose damages against their co-defendant, Robert Jones. They assert that it was error for the court to fail to assign joint and several liability among the two defendants. First, it should be noted that co-defendant Robert Jones is not properly before this court in this appeal because the Henleys failed to file a cross-complaint against Robert Jones in the trial court.

Notwithstanding the procedural bar, the Henleys' argument lacks merit. When two or more individuals are responsible for injury to another person, they can be held jointly and severally liable for the resulting damage. The party requesting damages has the burden of proving damages. Milligan v. General Oil Co., Inc., 293 Ark. 401, 738 S.W.2d 404 (1987). Proof of damages must not be speculative. Id. A party asserting damages must prove them even when a default judgment has been entered and liability is not an issue. Ferri v. Braun, 236 Ark. 29, 366 S.W.2d 286 (1963).

In this case, the trial court specifically found that the Brittons had not met their burden of proof with respect to Robert Jones. The Brittons alleged that the construction of Robert Jones's home increased their damages, but no evidence was introduced to establish the amount of contribution. It is clear that the lower court did not impose damages against Robert Jones because the amount of damages was simply not proven.

The Henleys also argue that the trial court erred in denying their counterclaim for foreclosure and assert that foreclosure would have been a more appropriate remedy. The Henleys' argument is essentially a reiteration of their earlier argument that rescission was not an appropriate remedy. The Henleys cite no authority for this allegation. It has been stated many times over that Arkansas appellate courts will not perform research for appellants, and will affirm the trial court's decision when legal authority neither supports the appellant's argument, nor is apparent without further research. See, e.g., Dobie v. Rogers, 339 Ark. 242, 5 S.W.3d 30 (1999). As discussed supra, the trial court did not err in granting rescission of the parties' contract, and accordingly did not err in refusing to grant the Henleys' counterclaim seeking foreclosure of the property.

The Henleys' fourth argument on appeal challenges the lower court's denial of a motion for new trial. The motion for new trial was based on newly discovered evidence, namely an alleged admission by Leon Britton that the house was "a pretty good house." The Henleys also assert that the trial judge abused his discretion because he failed to give due consideration to their reply to the Brittons' response to the motion for a new trial. The Henleys state that their reply to the Brittons response to the motion for new trial was sent within the five day period allowed pursuant to Arkansas Rule of Civil Procedure 6(c), and that the judge denied the motion on the same day.

A new trial may be granted when a party discovers new material evidence which could not, with reasonable diligence, have been discovered and produced at trial. Piercy v. Wal-Mart Stores, Inc., 311 Ark. 424, 844 S.W.2d 337 (1993). A new trial based on newly discovered evidence, however, is not a favored remedy and the burden lies with the movant to show that the evidence could not with reasonable diligence be discovered and produced at trial. Id. The movant also bears the burden of showing that the new evidence is not merely impeaching or cumulative, and that it would probably have changed the result of the trial. Id. The trial court has sound discretion in determining whether or not to grant a motion for new trial, and that decision will not be reversed unless the trial court abused its discretion. Id.

The Henleys allege that after the trial, Leon Britton appeared in Richard Henley's office and admitted that the house was a pretty good house. The Henleys sought to use this "newly discovered evidence" as a basis for a new trial. However, their use of that statement would only serve to impeach Leon Britton's testimony that the house was uninhabitable. Evidence merely impeaching trial testimony is not sufficient to grant a new trial. Piercy, supra. Therefore, the trial court's denial of the motion for new trial was not an abuse of discretion.

Likewise, the trial court did not abuse its discretion by denying the Henleys' motion for new trial on the same day the reply to the Brittons' response was due. The trial court has discretion to allow a reply to a response to a motion for new trial. Adams v. HLC Hotels, Inc., 328 Ark. 108, 941 S.W.2d 424 (1997). The plain language of Arkansas Rule of Civil Procedure 59(d) states that the "court may permit reply affidavits." Ark. R. Civ. P. 59(d). The rule does not require the court to allow reply affidavits, thus "appellant's argument is unpersuasive." Adams, supra.

Finally, the Henleys failed to make a proffer, and error cannot be founded on mere allegation alone. Kail v. State, 341 Ark. 89, 14 S.W.3d 878 (2000). This court, without some showing of prejudice, cannot hold that the lower court abused its discretion. Id.

For their last point on appeal, the Henleys again argue that the absence of NBA makes it impossible to carry out the final order. The Henleys argue that the Brittons cannot return the property, as required in the order, because NBA has foreclosed on the property for nonpayment. Again, the Henleys failed to join NBA and even consented to proceeding in its absence. The Henleys cannot complain on appeal of an error that they consented to. As a final note, the order requires the Brittons to relinquish their interest in the property; they have done so.

Affirmed.

Hart and Crabtree, JJ., agree.

1 The first appeal was dismissed for lack of finality. See Henley v. Britton, 2002 WL 187084 (Ark. App. 2002).

2 National Bank of Arkansas was not made a party to this cause of action.

3 The case was transferred to Faulkner County Chancery Court on July 10, 2000.