CMT Highway, LLC v. Logan Contractors Supply, Inc.

CourtCourt of Appeals of Iowa
DecidedJune 18, 2025
Docket24-1158
StatusPublished

This text of CMT Highway, LLC v. Logan Contractors Supply, Inc. (CMT Highway, LLC v. Logan Contractors Supply, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals of Iowa primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
CMT Highway, LLC v. Logan Contractors Supply, Inc., (iowactapp 2025).

Opinion

IN THE COURT OF APPEALS OF IOWA

No. 24-1158 Filed June 18, 2025

CMT HIGHWAY, LLC, Plaintiff/Counterclaim Defendant, Appellant/Cross-Appellee,

vs.

LOGAN CONTRACTORS SUPPLY, INC., Defendant/Counterclaim Plaintiff, Appellee/Cross-Appellant. ________________________________________________________________ Appeal from the Iowa District Court for Cedar County, Jeffrey D. Bert,

Judge.

A construction-material manufacturer appeals from a ruling that it breached

its contracts with a construction-material supplier. The construction-material

supplier cross-appeals the rates of pre- and post-judgment interest on various

awards. AFFIRMED ON APPEAL; VACATED IN PART AND REMANDED WITH

INSTRUCTIONS ON CROSS-APPEAL.

Molly M. Parker (argued), Samuel E. Jones, Steven J. Pace, and Kate

Thorne of Shuttleworth & Ingersoll, Cedar Rapids, and Joseph C. Creen of Bush,

Motto, Creen, Koury & Halligan, PLC, Davenport, for appellants/cross-appellees.

Michael W. Thrall (argued) and Matthew A. McGuire of Nyemaster Goode,

P.C., Des Moines, and Roy Leaf of Nyemaster Goode, P.C., Cedar Rapids, for

appellee/cross-appellant.

Heard at oral argument by Tabor, C.J., and Ahlers and Langholz, JJ. 2

AHLERS, Judge.

Article 2 of the Uniform Commercial Code (UCC) governs this case. The

case centers on the termination of a business relationship between a construction-

material supplier, Logan Contractors Supply, Inc. (Logan Contractors), and a

construction-material manufacturer, CMT Highway, LLC (CMT).

I. Background Facts

Governmental entities intending to build, modify, or repair a public road

create plans for the project and publicly post them, seeking bids from contractors.

As a part of developing a bid, prospective general contractors seek bids from

subcontracting suppliers for materials needed to complete the project. Logan

Contractors is such a supplier. For suppliers to provide a bid to the general

contractor, the suppliers seek quotes from material manufacturers, like CMT. The

supplier will notify the manufacturer if it uses the manufacturer’s quote when

submitting its bid to the general contractor. Likewise, the general contractor will

notify the supplier if it uses its quote for its bid to the governmental entity. If the

governmental entity selects the bid from the general contractor, then the general

contractor is bound by its bid and Logan Contractors is bound by its bid to the

general contractor. According to a Logan Contractors employee, the company has

used this bid process for his entire seventeen-year career with the company, and

it is consistent throughout the road-construction industry.

Logan Contractors started doing business with CMT in 2016, and the two

companies followed the above-described process. When Logan Contractors

sought to bid for a job with a general contractor doing a road project, Logan

Contractors sought quotes from CMT. CMT would supply a quote. If Logan 3

Contractors accepted the quote, it would notify CMT that it was using CMT’s quote

in its bid. If the general contractor accepted the bid, Logan Contractors would

notify CMT, and CMT would manufacture and supply the materials at the prices

listed in the quote when it received a purchase order from Logan Contractors.

Often Logan Contractors would submit multiple purchase orders as a project

progressed through different phases of construction. The timing of those orders

and delivery dates were not necessarily strictly set because the timing or

progression of a project and materials needed at any given time was “fluid.”

By 2021, CMT had difficulty meeting its production schedule and delivery

dates for several projects. The price of steel, a raw material necessary for

producing CMT’s products, had increased, as had shipping costs. This made it

difficult for CMT to produce and deliver materials to projects for Logan Contractors

at the prices stated in their quotes. On October 27, the president of CMT sent the

following email to the president of Logan Contractors:

After studying the numbers and reviewing our notes from the conversation this morning, I have come up with the following proposals:

1. CMT will continue to quote Logan on jobs they are sent quotes for and manufacture and deliver everything they currently have orders for with the following increases: 1.5 material will be billed at $6.95 a foot delivered price 1.25 material will be billed at $5.25 a foot delivered price 1.00 material will be billed at $3.90 a foot delivered price .75 material will be billed at $2.80 a foot delivered price Basket Stakes will be at $.06 higher than current cost

These prices represent a cost that is well below current pricing but allows us to pass on the impact of our higher material cost and would pertain to all existing orders on the books as of today. We would not pass on any shipping cost as CMT will eat the cost of the freight. 4

All material currently on the backlog would be manufactured and paid for by March 31, 2022. Any new work moving forward would be billed at negotiated price at time of order. Also, any additional orders will receive a $1,000 rebate per order (minimum a truckload of material) until the difference on original price and new price is made up.

2. Logan rejects proposal 1 as written, at which time CMT Highway LLC and Logan decide to end their working relationship and go their separate ways.

Also, if you decide to move on, I want to thank you for your business over the years. I wish you continued success on the personal and business side. The ball is in your court and I will need an answer by EOB on Friday. Thanks!

When Logan Contractors sought clarification, CMT clarified that the proposed

increased pricing was its “break even numbers on materials” and would apply to

all outstanding purchase orders except for the “Offutt jobs.”

Counsel for Logan Contractors informed CMT that it believed CMT

breached its contracts by failing to deliver goods in a timely manner and attempting

to increase the agreed-upon price. Counsel further informed CMT that Logan

Contractors would find “alternative sources of supply in effort to minimize

damages” and it “intend[ed] to hold CMT responsible for payment” of all damages.

Logan Contractors then refused to pay for some of the materials CMT had already

delivered for various projects.

CMT initiated this action to recover payment for the materials it previously

delivered. Logan Contractors filed a counterclaim alleging CMT breached its

contractual obligations when it did not provide materials at the originally agreed

price and seeking damages for cover materials.

The matters were tried before the business specialty court, which

determined that CMT breached its contracts with Logan and was liable for cover 5

material costs. The court also determined that Logan Contractors could not

withhold payment for materials received from CMT. Both parties appeal.

II. Standard of Review

While we review the business court’s contract interpretation and

construction for correction of errors at law, Homeland Energy Sols., LLC v.

Retterath, 938 N.W.2d 664, 683 (Iowa 2020), the business “court’s factual findings

have the effect of a special verdict and are binding on us if supported by substantial

evidence.” Pitz v. U.S. Cellular Operating Sys., 989 N.W.2d 636, 640 (Iowa 2023)

(citation omitted).

Free access — add to your briefcase to read the full text and ask questions with AI

Related

State v. Rutledge
600 N.W.2d 324 (Supreme Court of Iowa, 1999)
Jasper v. State
477 N.W.2d 852 (Supreme Court of Iowa, 1991)
Chrysler Financial Co. v. Bergstrom
703 N.W.2d 415 (Supreme Court of Iowa, 2005)
Waterloo Savings Bank v. Austin Ex Rel. Austin
494 N.W.2d 715 (Supreme Court of Iowa, 1993)

Cite This Page — Counsel Stack

Bluebook (online)
CMT Highway, LLC v. Logan Contractors Supply, Inc., Counsel Stack Legal Research, https://law.counselstack.com/opinion/cmt-highway-llc-v-logan-contractors-supply-inc-iowactapp-2025.