                     United States Court of Appeals
                           FOR THE EIGHTH CIRCUIT
                                    ___________

                                 Nos. 04-2405/2464
                                   ___________

Jet Asphalt & Rock Co., Inc.,          *
                                       *
      Cross-Appellant/Appellee,        *
                                       * Appeals from the United States
      v.                               * District Court for the
                                       * Western District of Arkansas.
Angelo Iafrate Construction, LLC;      *
National Fire Insurance Company        *
of Hartford,                           *
                                       *
      Appellants/Cross-Appellees.      *
                                  ___________

                              Submitted: April 11, 2005
                                 Filed: December 9, 2005
                                  ___________

Before COLLOTON, McMILLIAN, and BENTON, Circuit Judges.
                         ___________

COLLOTON, Circuit Judge.

      A jury found Angelo Iafrate Construction, LLC, and National Fire Insurance
Company of Hartford (together, “Angelo Iafrate”) liable for breach of contract,
awarding damages in the amount of $192,511.50 to Jet Asphalt & Rock Co., Inc. (“Jet
Asphalt”). Angelo Iafrate appeals, contending that the district court1 should have
granted its motions for judgment as a matter of law on Jet Asphalt’s breach of contract

      1
        The Honorable Harry F. Barnes, United States District Judge for the Western
District of Arkansas.
claim and on Angelo Iafrate’s counterclaim for breach of contract. Jet Asphalt
defends the district court’s judgment, but also cross-appeals, arguing in the alternative
that if the jury’s verdict is set aside, then the district court’s judgment as a matter of
law in favor of Angelo Iafrate on Jet Asphalt’s claim of common law fraud also
should be reversed. We conclude that the district court correctly determined that the
resolution of this dispute turned on issues of fact that were properly submitted to a
jury, and we therefore affirm the judgment.

                                            I.

       In 2000, Angelo Iafrate and Jet Asphalt were competing bidders for a contract
with the State of Arkansas for work on a State Highway Commission (“Commission”)
project known as the Bearden Bypass. Angelo Iafrate won the contract with a bid of
approximately $6.4 million. Because the project was funded partially by the federal
government, Angelo Iafrate was required to subcontract 10% of the work to
disadvantaged business enterprises (“DBEs”). DBEs are “for profit small business
concern[s] . . . at least 51 percent owned by one or more individuals who are both
socially and economically disadvantaged” and managed by “one or more of the
socially and economically disadvantaged individuals who own it.” (Appellant’s App.
at 127).

       Along with its bid, Angelo Iafrate submitted forms proposing the type and
amount of work that would go to DBEs (“DBE forms”). In its DBE forms, Angelo
Iafrate proposed apportioning a total of $641,268.05 of work among several DBE
businesses. One of the DBEs named in Angelo Iafrate’s DBE forms was NKP
Trucking (“NKP”), which was to perform hauling services valued at $361,727.00.
According to the form, NKP was to haul construction materials, namely compacted
embankment and mineral aggregate, at various stages of the project. The State
approved Angelo Iafrate’s DBE forms, and Angelo Iafrate commenced work on the
project.

                                           -2-
       In April 2001, Angelo Iafrate subcontracted a substantial portion of the Bearden
Bypass work – about $2.6 million – to Jet Asphalt. The subcontract between Jet
Asphalt and Angelo Iafrate incorporated by reference “all documents of the Prime
Contract (including, but not limited to General, Supplementary, and Other
Conditions).” (Id. at 192). It also stipulated that Jet Asphalt “hereby affirms that [it]
has examined all Contract Documents, and agrees that [it] will not plead unfamiliarity
with any of said Documents in connection with any dispute which may arise
hereunder or in connection with any claim for extra compensation.” (Id.). The
subcontract provided that Jet Asphalt “shall be bound to the same extent that [Angelo
Iafrate] is bound by each and every covenant, obligation, and provision of the Prime
Contract insofar as the same is applicable to the work” of Jet Asphalt. (Id.).

        Two provisions of the subcontract addressed Jet Asphalt’s use of DBEs. In the
sixth of a series of “Special Provisions” attached to the subcontract (“special provision
six”), Jet Asphalt promised to “provide a minimum of $300,00[0]2 dollars of minority
business enterprise participation from certified companies.” (Id. at 203).
Additionally, section 103.08(b)(4) provided as follows:

      No work shall be performed by the Contractor or any subcontractor on
      items originally committed to or included in a subcontract (including
      purchase orders or other written agreements) with a DBE without prior
      written approval by the Department. Payments to the Contractor will be
      withheld or previous payments recovered by the Department in amounts
      equivalent to that portion of the subcontract with a DBE in which . . .
      [t]he Contractor or any subcontractor performs any portion of the work
      to be accomplished by a DBE without prior written approval by the
      Department.

(Id. at 126-27).


      2
      The parties agree that the provision was intended to read “$300,000,” not
“$300,00,” and that the discrepancy was due to a typographical error.

                                          -3-
       At the time that Angelo Iafrate subcontracted the remaining work on the
Bearden Bypass to Jet Asphalt, NKP had performed only one of the hauling tasks that
Angelo Iafrate’s DBE form had assigned to it. NKP had hauled compacted
embankment but had not hauled mineral aggregate. Jet Asphalt subcontracted with
a different trucking company, Anders Trucking (“Anders”), to haul mineral aggregate
for the project. Anders performed the hauling work, and the Bearden Bypass was
successfully completed.

        On July 30, 2002, the Highway Department issued a change order deducting
$290,367.70 from Angelo Iafrate’s compensation. The deduction was attributed to
three causes. “Failure to use NKP Trucking” accounted for a deduction of
$235,727.00; “[f]ailure to fully utilize W Trucking,” another DBE contractor,
accounted for a deduction of $50,683.19; and the lack of a purchase order agreement
or subcontract with a third DBE contractor, Camden Concrete, accounted for the
remaining $3,964.86 of the deduction. (Id. at 208). According to the change order,
all of these deductions were due either to Angelo Iafrate’s failure “to utilize DBE’s
on items originally committed to DBE’s without prior written approval,” or to its
failure to provide adequate documentation for work to be performed by a DBE. (Id.
at 207). Angelo Iafrate then withheld $295,375.04 in payment from Jet Asphalt.3

       In November 2002, Jet Asphalt brought suit against Angelo Iafrate in the
district court, alleging that the company had breached its contract with Jet Asphalt by
withholding the $295,375.04. Jet Asphalt also alleged, in the amended version of its

      3
        The $5,000 discrepancy between the amount withheld by the State in the
change order ($290,367.70) and the amount withheld from Jet Asphalt by Angelo
Iafrate ($295,375.04) was explained, at least initially, by a modification to the change
order. An earlier version of the change order had withheld $55,683.19 due to Angelo
Iafrate’s failure to fully utilize W Trucking. After Angelo Iafrate subsequently paid
W Trucking $5,007.35 for additional work, the withheld amount was reduced to
$50,675.84. Angelo Iafrate, however, still withheld the amount of the original change
order from Jet Asphalt.

                                          -4-
complaint, that Angelo Iafrate committed the torts of deceit and fraudulent
inducement. Angelo Iafrate answered and counterclaimed for breach of contract,
alleging that Jet Asphalt had breached the subcontract by failing to use an approved
DBE subcontractor, and that this breach had caused the State to withhold the
$295,375.04. These claims were tried to a jury on May 3-4, 2004. At the end of Jet
Asphalt’s case, the district court granted Angelo Iafrate’s motion for judgment as a
matter of law as to the tort claims, but denied its motion as to the breach of contract
claims. The district court similarly denied Angelo Iafrate’s renewed motion for
judgment as a matter of law. The jury returned a verdict in favor of Jet Asphalt on Jet
Asphalt’s breach of contract claim against Angelo Iafrate, and awarded damages of
$192,511.50. The district court entered judgment for Jet Asphalt, and both parties
appealed.

                                          II.

       Angelo Iafrate contends that the district court erred by submitting the breach
of contract claims to the jury. Angelo Iafrate maintains that the contract between it
and Jet Asphalt was unambiguous, and that its interpretation was therefore a question
of law to be decided by the district court. We review a district court’s denial of a
motion for judgment as a matter of law de novo, applying the same standard as the
district court. Wash Solutions, Inc. v. PDQ Mfg., Inc., 395 F.3d 888, 892 (8th Cir.
2005). Judgment as a matter of law is appropriate only when there is “no legally
sufficient evidentiary basis” on which a reasonable jury could find for the non-moving
party. Fed. R. Civ. P. 50(a)(1); Wash Solutions, 395 F.3d at 892. Under Arkansas
law, the determination whether a contract is ambiguous is a question of law. Pittman
v. Pittman, 139 S.W.3d 134, 136-37 (Ark. Ct. App. 2003). Unambiguous contracts
are construed as a matter of law, while the meanings of ambiguous contracts are
determined by the finder of fact. Id.




                                         -5-
       At trial, Angelo Iafrate argued that Jet Asphalt had failed to comply with two
contract provisions. First, it urged that Jet Asphalt had breached special provision six,
which specified that Jet Asphalt was to “provide a minimum of $300,00[0] dollars of
minority business enterprise participation from certified companies.” (Appellant’s
App. at 203). We agree with the district court that whether Jet Asphalt breached this
provision was a question of fact properly submitted to the jury. To Angelo Iafrate, the
term “certified companies” means minority or disadvantaged business enterprises
approved by the Highway Department for work on the Bearden Bypass project. But
the evidence revealed ambiguity. The Highway Department maintains a list of
companies that are “certified” as minority business enterprises, independent of any
particular project. (Tr. 58). Any of these companies then may be approved for work
on a specific project, and the Department’s witness even testified that, “I don’t believe
certified is a correct term” for this approval process. (Tr. 59). At best, therefore, it
is unclear from the plain language of the contract whether Jet Asphalt was obliged to
use companies certified from the State’s master list (which included Anders, Tr. 58),
or companies approved or “certified” specifically for the Bearden Bypass project (i.e.,
NKP).

       In addition, Jet Asphalt argued that even if “certified companies” in this prime
contract meant only NKP Trucking, which had been approved by the State, then Jet
Asphalt’s obligation to use NKP had been excused by Angelo Iafrate’s failure to
obtain approval from the Department to substitute Anders for NKP. Special provision
six did not expressly contemplate substitute DBEs, and the subcontract did not
allocate to either party responsibility for obtaining approval of a substitute DBE.
There was testimony at trial that the prime contractor is generally responsible for such
tasks. There was also testimony that Jet Asphalt informed Angelo Iafrate of its
intention to use Anders to satisfy its DBE requirement.

      Noting the contract’s silence on the subject of which party was responsible for
obtaining approval for Anders, the district court concluded that “there is a fact

                                          -6-
question based on . . . whose responsibility it was to get Anders approved by the
state.” (Id. at 287). The court characterized this question as a possible “latent
ambiguity.” (Id. at 284). A latent ambiguity “arises from undisclosed facts or
uncertainties of the written instrument,” Coble v. Sexton, 27 S.W.3d 759, 761 (Ark.
Ct. App. 2000), and parol evidence is admissible under Arkansas law to “bring out [a]
latent ambiguity” in a contract. Countryside Cas. Co. v. Grant, 601 S.W.2d 875, 877
(Ark. 1980). In light of the testimony at trial regarding industry practice and the
circumstances surrounding the signing of the subcontract, we agree with the district
court that the responsibility for obtaining this approval may have resided with Angelo
Iafrate, and that Angelo Iafrate’s failure to do so might have excused Jet Asphalt’s
performance under special provision six. Whether Jet Asphalt’s alleged non-
compliance with special provision six constituted a breach of contract, therefore, was
a question for the jury.

       Second, Angelo Iafrate argued that Jet Asphalt breached section 103.08(b)(4)
of the prime contract, which instructs in relevant part that “[n]o work shall be
performed by the Contractor or any subcontractor on items originally committed to
or included in a subcontract (including purchase orders or other written agreements)
with a DBE without prior written approval by the Department.” (Appellant’s App. at
126). Insofar as this provision applied to the work of Jet Asphalt under the
subcontract, Jet Asphalt was bound by its requirements. Angelo Iafrate urges that by
using Anders to haul mineral aggregate, Jet Asphalt performed work on an item
“originally committed to . . . a DBE” (in this case NKP), without prior written
approval by the Department, and thus breached the contract.

      The district court concluded that although the literal terms of the contract were
unambiguous, the agreement did not address issues surrounding the use of a DBE that
was not approved in the prime contract. The court observed there was “no question”
that “Angelo knew that Jet was going to use Anders,” and that a jury should decide
“who was responsible under the contract to begin the process to qualify Anders.” (Tr.

                                         -7-
283-84). We take this to be an invocation of the rule, long recognized in Arkansas,
that a party may waive a breach of a condition set forth in a written contract by
permitting the other party to proceed with performance of the contract after
discovering the apparent breach. Grayson-McLeod Lumber Co. v. Slack-Kress Tie &
Stave Co., 143 S.W. 581, 583 (Ark. 1912). The rule, as stated by the Supreme Court
of Arkansas, is that “one party to a contract who, with knowledge of a breach by the
other party, continues to accept benefits under the contract, and suffers the other party
to continue in performance thereof, waives the right to insist on the breach.” Southern
Pipe Coating Inc. v. Spear & Wood Mfg. Co., 363 S.W.2d 912, 914 (Ark. 1963); see
also Stephens v. West Pontiac-GMC, Inc., 647 S.W.2d 492, 493 (Ark. Ct. App. 1983);
Fielding & Shepley, Inc. v. Dow, 163 P.2d 908, 909 (Cal. Dist. Ct. App. 1945); E.
Allan Farnsworth, Farnsworth on Contracts § 8.5 (2d ed. 1998).

       There was testimony in this case from Jet Asphalt’s president that when the
subcontract was negotiated, he informed the president of Angelo Iafrate that Jet
Asphalt intended to use Anders Trucking as a DBE contractor, and that Angelo
Iafrate’s president raised no objection. (Tr. 218-19). As the district court remarked,
this evidence supported a finding that Angelo Iafrate knew throughout the project that
Jet Asphalt was making use of Anders, rather than NKP, for the disputed hauling
work. This evidence was received along with other testimony showing that the prime
contractor, in this case Angelo Iafrate, typically bore responsibility for gaining
approval of DBE contractors from the Highway Department. Under these
circumstances, a jury reasonably could conclude not only that Jet Asphalt informed
Angelo Iafrate about the use of Anders Trucking, but that Angelo Iafrate led Jet
Asphalt to believe that use of Anders was agreeable, and that Angelo Iafrate was in
the best position to resolve any approval requirements with the State. We thus find
no error in the district court’s decision to submit to the jury the question whether Jet
Asphalt’s compliance with section 103.08(b)(4) was excused by events subsequent to
the formation of the contract.



                                          -8-
For the foregoing reasons, the judgment of the district court is affirmed.
                ______________________________




                                  -9-
