Allsopp Sand & Gravel, Inc. v. Lincoln Sand & Gravel Co.

525 N.E.2d 1185, 171 Ill. App. 3d 532, 121 Ill. Dec. 878, 7 U.C.C. Rep. Serv. 2d (West) 1106, 1988 Ill. App. LEXIS 939
CourtAppellate Court of Illinois
DecidedJune 30, 1988
Docket4-87-0731
StatusPublished
Cited by2 cases

This text of 525 N.E.2d 1185 (Allsopp Sand & Gravel, Inc. v. Lincoln Sand & Gravel Co.) is published on Counsel Stack Legal Research, covering Appellate Court of Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Allsopp Sand & Gravel, Inc. v. Lincoln Sand & Gravel Co., 525 N.E.2d 1185, 171 Ill. App. 3d 532, 121 Ill. Dec. 878, 7 U.C.C. Rep. Serv. 2d (West) 1106, 1988 Ill. App. LEXIS 939 (Ill. Ct. App. 1988).

Opinion

JUSTICE KNECHT

delivered the opinion of the court;

Plaintiff Allsopp Sand and Gravel, Inc. (Allsopp), filed suit in the circuit court of Logan County alleging defendant, Lincoln Sand and Gravel Company (Lincoln), failed to pay for the balance of sand due under an existing contract. The trial court rendered a verdict for All-sopp and entered judgment against Lincoln in the amount of $45,240.36. Lincoln appeals and we reverse.

The two parties in this action are competitors in the sand and gravel business. John and Jay Owensby, father and son, own and operate Allsopp. In the spring of 1986, when Lincoln’s dredge became inoperable, one of Lincoln’s owners, Paul Robert Orr (Orr), approached the Owensbys and offered to purchase sand from Allsopp so Lincoln could meet its customers’ needs for the upcoming construction season.

The parties entered into a contract in March of 1986 wherein All-sopp agreed to supply and Lincoln agreed to purchase 50,000 tons of FA — 1 specification sand for $1.20 per ton. The contract stipulated the volume requirement would be waived if the sand was not of FA — 1 quality. Lincoln agreed to pay the balance due under the contract by December 31, 1986, and to take delivery of the remaining tonnage of sand by the spring of 1987. The sand was to be loaded out to Lincoln’s trucks during Allsopp’s regular business hours (7:30 a.m. to 3:30 p.m., Monday through Friday) and during the regular operating season (March through November). Loading out at other times was to be by “special arrangements.”

During March and April of 1986, Lincoln took delivery and paid $14,759.64 for 12,299.7 tons of Allsopp sand. The balance due under the agreement, $45,240.36, was not paid by December 31, 1986. On February 19, 1987, Allsopp filed its complaint in the circuit court of Logan County for breach of contract and asked for judgment against Lincoln in the amount of the contract balance.

Lincoln filed an answer containing general denials and affirmative defenses. Lincoln alleged Allsopp (1) did not supply sand of the quality specified in the contract and (2) wrongfully refused to make “special arrangements” to load out sand at the original contract price before the contract expired, but at a time outside Allsopp’s regular operating season.

The evidence presented at the bench trial was as follows.

Lincoln returned six loads of sand to Allsopp on March 31, 1986, because the sand contained mud. Allsopp gave Lincoln credit for the loads and paid for the cost of the return trucking. Lincoln continued to take deliveries from April 1 through April 18, 1986, without complaint. Allsopp’s sandpit closed for the season on November 26,1986.

Jay Owensby testified that Orr contacted him the second week in December of 1986 and requested to load out the remaining sand due under the contract. Jay told him the pit was closed and he did not have the manpower to load out at that time. Jay said Lincoln would have to pay 25 to 30 cents more per ton to load the sand in December.

Orr then called the elder partner, John Owensby, and the two attempted to negotiate a special arrangement. John testified he told Orr they would have to charge Lincoln extra for a load out in December because Allsopp would have to recall employees and pay them at union wage. Orr offered to pay five cents more per ton and to supply one of Lincoln’s employees to facilitate the loading process. The Owensbys refused the offer. During a subsequent conversation in the latter part of January 1987, Orr told Owensby Lincoln did not intend to pay for the balance of the sand due under the contract.

Allsopp’s expert, Loren Bloome, from the Illinois Highway Department, testified he tested Allsopp’s sand on 47 different occasions during 1986. Each test result showed the sand met FA — 1 specifications.

The trial court found Allsopp had acted in a commercially reasonable manner and had performed all conditions required of it under the contract. Lincoln was found to have waived rejection of the parties’ agreement when it took delivery of Allsopp’s sand after discovering certain loads were contaminated. The court held the evidence sufficiently established Allsopp had supplied FA — 1 specification sand and that Lincoln’s request to load out sand in December, outside Allsopp’s regular operating season, was commercially unreasonable. Allsopp’s damages were computed at $45,240.36.

It is a question of fact whether a contract has been performed according to its terms, and the trial court’s determination will not be disturbed unless it is against the manifest weight of the evidence. (Ralph v. Karr Manufacturing Co. (1974), 20 Ill. App. 3d 450, 314 N.E.2d 219.) From the record and oral argument before us, we find not only did the trial court miscalculate the damages, but its entire judgment in favor of Allsopp was against the manifest weight of the evidence.

We first address the issue of damages. Section 2 — 708 of the Uniform Commercial Code contains the formula to compute a seller’s damages caused by a buyer’s nonacceptance or repudiation. Section 2 — 708(1) provides:

“(1) *** [T]he measure of damages for non-acceptance or repudiation by the buyer is the difference between the market price at the time and place for tender and the unpaid contract price together with any incidental damages ***, but less expenses saved in consequence of the buyer’s breach.” (Emphasis added.) 111. Rev. Stat. 1985, ch. 26, par. 2 — 708(1).

The statute clearly directs that the trial court, when it computed damages, should have subtracted from the unpaid contract price the amount Allsopp saved in loading expenses as a result of the severed agreement. Failure to utilize the above formula put Allsopp in a better position than it would have occupied had there been no breach of contract. Central Information Financial Services, Ltd. v. First National Bank (1984), 128 Ill. App. 3d 1052, 471 N.E.2d 992.

In addition, we are unable to determine from the record the market price of the sand. We are also unable to determine whether the trial court’s order contemplates that Allsopp not only recovers damages but also retains the sand. The trial court’s order appears to require Lincoln to pay damages based on the contract price for the sand, but gives no credit for any expenses saved by Allsopp or for Allsopp’s ability to sell the sand to another buyer at market price.

A party suing for breach of contract must prove he substantially complied with the material terms of the agreement attributable to him. (George F. Mueller & Sons, Inc. v. Northern Illinois Gas Co. (1975), 32 Ill. App. 3d 249, 336 N.E.2d 185.) After careful consideration of the contract language and the contents of the record, we conclude Allsopp was the breaching party in this case and is not entitled to any damages.

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525 N.E.2d 1185, 171 Ill. App. 3d 532, 121 Ill. Dec. 878, 7 U.C.C. Rep. Serv. 2d (West) 1106, 1988 Ill. App. LEXIS 939, Counsel Stack Legal Research, https://law.counselstack.com/opinion/allsopp-sand-gravel-inc-v-lincoln-sand-gravel-co-illappct-1988.