Beehive Brick Co. v. Robinson Brick Co.

780 P.2d 827, 116 Utah Adv. Rep. 36, 11 U.C.C. Rep. Serv. 2d (West) 803, 1989 Utah App. LEXIS 146, 1989 WL 102805
CourtCourt of Appeals of Utah
DecidedSeptember 1, 1989
Docket870548-CA
StatusPublished
Cited by11 cases

This text of 780 P.2d 827 (Beehive Brick Co. v. Robinson Brick Co.) is published on Counsel Stack Legal Research, covering Court of Appeals of Utah primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Beehive Brick Co. v. Robinson Brick Co., 780 P.2d 827, 116 Utah Adv. Rep. 36, 11 U.C.C. Rep. Serv. 2d (West) 803, 1989 Utah App. LEXIS 146, 1989 WL 102805 (Utah Ct. App. 1989).

Opinions

OPINION

GARFF, Judge:

Plaintiff and appellant, Beehive Brick, Inc. (Beehive), seeks reversal of the trial court’s summary judgment dismissing its breach of contract action against defendant and respondent, Robinson Brick Co. (Rob-co). Robco requests an order affirming the judgment and granting it and attorney fees incurred in responding to this appeal.

From 1983 to early 1985, in response to rumors that Robco’s previous distributor was going out of business, Beehive repeatedly contacted Robco in hopes of becoming the exclusive Salt Lake distributor of its products. On February 20, 1985, Robco’s sales manager, Monte Jones, orally granted Beehive a temporary distributorship until he could appoint a permanent Utah distributor. Under this arrangement, Beehive bought goods on account from Robco and then resold them to its Utah customers.

Robco had a policy of having only one distributor in a given geographical area. Jones told Beehive that Robco was considering one of Beehive’s competitors, Interstate Brick (Interstate), asa distributor, and that Beehive was at a disadvantage in becoming the permanent Utah distributor because of Robco’s previous bad experience with smaller firms like Beehive. Beehive representatives, however, stated that Jones told them that Beehive’s temporary distributorship would become permanent if it outperformed Interstate Brick in promoting Rob-co products. Beehive claims that on several occasions Jones congratulated Beehive, noting it was substantially outperforming Interstate Brick in promoting Robco products.

From April to July of 1985, Robco sold bricks on account to Beehive in response to Beehive’s written purchase orders. On July 15, 1985, Jones notified Beehive by telephone that Robco had terminated Beehive’s distributorship and had appointed Interstate Brick to be its exclusive Utah distributor. To allow Beehive a transition period, Jones allowed Beehive to continue placing new orders until October 15, 1985. Robco confirmed this decision in a letter to Beehive, dated July 22, 1985.

On October 14, 1985, Beehive’s sales manager, Dee Young, placed a telephone order with Robco for one million bricks on behalf of his customer, Emerson Larkin. These bricks were to be delivered over a period of twelve to fourteen months, and were to be specially manufactured because Larkin wanted a particular color and texture yhich Robco had previously manufactured but did not currently carry in stock. Beehive representatives claim that they subsequently sent Robco a written purchase order for the million bricks, which Robcc denies receiving.

Jonss testified that a distributor would normally place an order of this size over the telephone, but the fact that a distributor hád called in such an order did not necessarily mean that Robco had accepted the order. He stated that an agreement was never reached as to whether Robco could fill the million brick order.

In the fall of 1985, Young and Larkin visited Robco’s plant for the purpose of [829]*829discussing the special manufacture of the million brick order. Young testified that Robco personnel indicated they could produce the special color of brick. He noted that Larkin was very impressed with another of Robco’s products, its Dover Gray brick, and stated that Larkin would have accepted Dover Gray if the special color he requested could not be manufactured.

Between October 1985 and February 1986, Robco attempted to manufacture the special color of brick three times. In all, Robco filled approximately one quarter of the million brick order with these test batches. Young asserted that Larkin accepted and used both the 50,000 brick first batch and the 150,000 brick second batch in their entirety. Jones, on the other hand, asserted that Larkin rejected all the test batches because he was disappointed in the color. He indicated that Robco had agreed to try again after the first batch. After the second batch, Robco explained to Beehive that it would be unable to produce the special color because manufacture required use of radioactive materials which were not available. Nevertheless, Robco tried a third time. Jones then stated that Larkin rejected the 200,000 brick third batch because the color was “bland.” However, Beehive was able to sell 26,000 bricks from that batch on consignment.

Beehive representatives testified that between March 30 and April 15, 1986, Jones encouraged Beehive to get ready to start placing orders because he would probably be able to give Beehive a split distributorship. Browning, president of Beehive, stated that, at the time Beehive’s distributorship had been phased out, Jones had told him “if we continued to perform there might be a possibility of a split distributorship.” In February, Jones told him that management had given him authority to give Beehive a split distributorship, and in March, Jones told him that he was going to visit Interstate and tell them they would have to share the distributorship with Beehive. Young testified that Jones, at the end of March, encouraged him to “quietly get orders ready to go so that we could kind of be hitting on all eight cylinders when we were back in with them.” Beehive did not receive any written confirmation of this new split distributorship, but got at least two orders in anticipation of it, which Robco ultimately refused to fill.

On April 15, 1986, Jones visited Interstate and Beehive. On this visit, Jones awarded an exclusive distributorship to Interstate and terminated Robco’s relationship with Beehive. Jones’s account of this meeting is as follows: He told Beehive that he could not justify “cancelling out Interstate” or awarding it only a split distributorship, and then suggested a date when Robco would stop supplying brick to Beehive. Young suggested a later date, May 16, 1986, and Jones agreed. Young asked about the million brick order. Jones told him that Robco could not produce the brick to Beehive’s satisfaction, that Robco was willing to substitute other colors for the special color, and there had to be an end sometime, therefore, all brick, including the million brick order, would have to be picked up by May 16, 1986. Young did not suggest a date later than May 16.

Browning, on the other hand, states that this was not what was agreed to in the meeting because it was impossible for Beehive to complete its orders, including the million brick order, in the allotted thirty days because of the number of trucks required to ship the brick, the limited capacity of Beehive’s yard, Beehive’s $15,000 credit limitation with Robco, and his prior understanding that Beehive would have a year to complete the million brick order. Browning admitted that he did not object to the May 16 date set by Jones with respect to Beehive's other remaining orders.

On April 17, 1986, Jones sent Beehive a letter confirming Robco’s termination of Beehive’s distributorship. This letter stated that Robco was unable to produce the special color brick for Larkin, that Beehive was required to take delivery on all outstanding orders by May 16, 1986, and that Larkin could substitute other colors of brick to fill the million brick order. Beehive did not attempt to fill the remainder of the million brick order with the proffered substitute bricks.

[830]*830Browning testified that Larkin was very disappointed in this development, and that, on April 18, 1986, Interstate Brick contacted Larkin in an attempt to get his million brick order.

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Beehive Brick Co. v. Robinson Brick Co.
780 P.2d 827 (Court of Appeals of Utah, 1989)

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Bluebook (online)
780 P.2d 827, 116 Utah Adv. Rep. 36, 11 U.C.C. Rep. Serv. 2d (West) 803, 1989 Utah App. LEXIS 146, 1989 WL 102805, Counsel Stack Legal Research, https://law.counselstack.com/opinion/beehive-brick-co-v-robinson-brick-co-utahctapp-1989.