Defendant Monty J. Person began working for Garage Solutions, LLC, in March 2015. Three months into his employment, Person was sent by the owner of Garage Solutions, Mark Fontenot, to Rexburg, Idaho, and Little Rock, Arkansas, to complete corporate training.
Two days before he was scheduled to leave for training, Person was presented with three contracts. One was a non-competition contract, and the remaining two were training reimbursement contracts. The reimbursement contracts stated that Person would refund the cost of the training if he left the company within one year of completing the training. While Person never signed the non-competition contract, he signed the two reimbursement contracts one month after the conclusion of his corporate training.
In August 2015, Person left Garage Solutions, and the company filed a suit seeking compensation from Person. While Person did not raise an affirmative claim of duress, the trial court determined that the contract was unenforceable because Person was indeed under duress when he signed the contracts. The plaintiffs appealed.
JUDGE EZELL The plaintiffs claim the trial court erred in finding that the contracts for reimbursement were not enforceable. They argue that Mr. Person voluntarily signed the agreements and they are enforceable.
…In the present case, the plaintiffs and Mr. Person entered into these contracts during Mr. Person’s employment. They were free to enter into these contracts during Mr. Person’s employment as long as they were not prohibited by law or public policy. After Mr. Person went to the training, he was free to agree to reimburse the plaintiffs for the expenses they incurred.
However, after reviewing the evidence and testimony, we agree with the trial court that the validity of the contracts is at issue. Mr. Person testified that at the start of his employment, Mr. Fontenot discussed with him the possibility of a noncompetition contract if Mr. Person received training. It was not until two days before the Idaho trip that Mr. Fontenot presented Mr. Person with the noncompetition agreement and the reimbursement contracts. Mr. Person testified that he eventually signed the reimbursement contracts after he returned because Mr. Fontenot would not pay him what he was owed until he signed the contracts.
“A contract is formed by the consent of the parties established through offer and acceptance.” “Consent may be vitiated by error, fraud, or duress.” “Consent is vitiated when it has been obtained by duress of such a nature as to cause a reasonable fear of unjust and considerable injury to a party’s person, property, or reputation.” “Fear of economic deprivation has been recognized as a type of duress that will vitiate consent.”
“An affirmative defense is one which raises a new matter not covered in the plaintiff’s petition and which will have the effect of defeating the plaintiff’s demand on its merits.” “The party asserting an affirmative defense has the burden of proving it by a preponderance of the evidence.” …[D]uress is an affirmative defense which must be set forth affirmatively in the pleadings.
Where, however, an affirmative defense has not been pleaded by the defendant but the plaintiff nevertheless fails to object to the introduction of evidence that bears on the affirmative defense and that is not pertinent to any issues raised in the pleadings, the pleadings have been considered to have been enlarged to include the affirmative defense, and the court can act as though the affirmative defense has been pleaded.
While Mr. Person did not specifically raise the issue of signing the contracts under duress, we find that there was sufficient testimony at trial to enlarge the pleadings which the Plaintiffs did not object to. There is no doubt that Mr. Person did not want to sign these two reimbursement contracts. When initially presented with the contracts, he refused to sign them. He continued to refuse to sign the contracts until Mr. Fontenot informed him that he was going to withhold his paycheck representing the agreed-upon hourly rate for the time Mr. Person spent at the seminars. While Mr. Fontenot testified that he did not withhold wages, he agreed that he withheld reimbursement for the time spent attending the training. However, the testimony and evidence in the record indicates that it was wages that were withheld.
Mr. Fontenot testified that the Plaintiffs paid Mr. Person his hourly rate while he was in training. Mr. Fontenot agreed that he withheld a check in the amount of \($600.00\) until Mr. Person signed the contracts. The plaintiffs’ exhibit attached to the contract for the Idaho training indicates that Mr. Person was owed \($600.00\) for “GROSS SALARY AND/OR WAGES.” The amount owed to Mr. Person before he signed the contracts represented the amount of hours he attended at training in Idaho.
We find that Mr. Person established by a preponderance of the evidence that his consent was vitiated when he signed the two reimbursement contracts because he was under duress of having money he earned withheld from him.
CRITICAL THINKING:
Do you think the outcome of the case could have been affected if Fontenot had presented the contracts earlier? Is the timing of the contracts a nonissue?
ETHICAL DECISION MAKING:
Do you think it is fair to the plaintiffs for the court to enlarge the defendant’s pleadings to include the duress claims? What ethical values does this decision support?