616 F.2d 212 (5th Cir. 1980)
Koppers Company contracted with Nobs Chemical, U.S.A., Inc. and Calmon-Hill Trading Corporation to purchase 1000 metric tons of cumene.1 The plaintiffs had arranged to purchase the cumene from a Brazilian supplier for $400 per ton plus $45 per ton for transportation costs, for a total expense of $445,000.2 Koppers agreed to pay $540,000 under the contract.3
Koppers breached the contract.4 Nobs and Calmon-Hill brought suit in the United States District Court for the Southern District of Texas, and the case was tried before the court sitting without a jury.5 The district court found that the plaintiffs were entitled to recover $95,000 as lost profits.6 It denied recovery of an additional $25 per ton that the plaintiffs claimed they were forced to pay their Brazilian supplier when their total order was reduced from 4,000 metric tons to 3,000 metric tons because of the breach.7
Nobs and Calmon-Hill appealed the measure of damages applied by the district court and, assuming it was correct, challenged the computation of those damages.8 Koppers cross-appealed, claiming that the district court's calculation of damages under the lost profits method was incorrect, including by failing to account for a commission that Calmon-Hill would have paid Nobs and by questioning the proof of the cumene's source.9
At trial, G. B. Marinelli, a part owner of Calmon-Hill who was involved in the cumene transaction, testified that Calmon-Hill had an agreement with a Brazilian supplier to furnish 4,000 metric tons of cumene, 1,000 tons of which was for Koppers, and that the entire cost per ton including insurance and freight was somewhere between $445 and $450.1011 Although counsel for Koppers attempted to impeach Marinelli on these points, he remained firm in his assertions.12
Whether the district court correctly applied the lost profits measure of damages to the plaintiffs' claim?13
Tex.Bus. & Com.Code Ann. § 2.708(a) provides the measure of damages for non-acceptance or repudiation by the buyer.14 The measure is the difference between the market price at the time and place for tender and the unpaid contract price together with any incidental damages provided in this chapter, but less expenses saved in consequence of the buyer’s breach. If the measure of damages provided in Subsection (a) is inadequate to put the seller in as good a position as performance would have done, then the measure of damages is the profit which the seller would have made from full performance by the buyer, together with any incidental damages, due allowance for costs reasonably incurred and due credit for payments or proceeds of resale.15
Yes. Because the plaintiffs Nobs and Calmon-Hill never acquired the contract goods from their Brazilian supplier after learning of Koppers' breach, they fit the description of jobbers for whom the lost profits measure applies, and the market price of cumene had dropped to between $220.40 and $264.48 a metric ton at the time of the breach so that applying subsection (a) would have overcompensated the plaintiffs.16 The code's basic philosophy under Tex.Bus. & Com.Code Ann.
§ 1.106(a) requires that the aggrieved party be put in as good a position as if the other party had fully performed but not in a better posture.17
The district court correctly applied the lost profits measure of damages under subsection (b) to the plaintiffs' claim.18
Whether the plaintiffs could recover the additional amount they allegedly paid their supplier after losing a quantity discount due to the breach?19
Under § 2.708(b), in addition to profit, the seller may recover incidental damages and due allowance for costs reasonably incurred.20 The code does not provide for the recovery of consequential damages by a seller.21 Incidental damages are defined as any commercially reasonable charges, expenses or commissions incurred in stopping delivery, in the transportation, care and custody of goods after the buyer’s breach, in connection with return or resale of the goods or otherwise resulting from the breach.22 Due allowance for costs reasonably incurred covers an amount equal to what the seller has expended for performance of the contract that will now be valueless.23
No. The lost quantity discount of $75,000 was not an expense contracted by the seller after the breach and occasioned by the need to care for or dispose of the goods in a commercially reasonable manner.24 The extra amount was simply an extra benefit the sellers did not receive from their supplier by reason of the buyer’s breach.25 It was not a cost necessary to the performance of the contract.26
The plaintiffs could not recover the additional amount they allegedly paid their supplier after losing a quantity discount due to the breach.27
Whether the district court should have included a commission between the plaintiffs in the computation of lost profits on cross-appeal?28
No. Koppers' argument assumes that Nobs is not seeking its commission from Calmon-Hill because of the breach.31 That has not been shown.32 It appears that Nobs now expects a much larger percentage of the damage award than the 3% commission originally agreed upon.33 The district court therefore properly refused to reduce the award by including the commission as a cost of performance.34
The district court should not have included a commission between the plaintiffs in the computation of lost profits on cross-appeal.35
Whether the evidence at trial sufficiently established the Brazilian source and cost of the cumene?36
On review, a court may not disturb the district court’s findings of fact unless they are clearly erroneous.37 A finding is clearly erroneous when although there is substantial evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed.38 In a suit on a contract, exactness is not required, only that there was enough evidence for the district court to estimate the amount of damages with reasonable certainty.39
Yes. Marinelli testified that Calmon-Hill had an agreement with a Brazilian supplier to furnish 4,000 metric tons of cumene, 1,000 tons of which was for Koppers. The entire cost per ton including insurance and freight was somewhere between $445 and $450. Although counsel for Koppers attempted to impeach Marinelli on these points, he remained firm in his assertion that the source of the cumene was to be a Brazilian supplier. The trial court’s finding was not clearly erroneous.40
The evidence at trial sufficiently established the Brazilian source and cost of the cumene.41