Malone v. Carl Kisabeth Co., Inc.

726 S.W.2d 188, 4 U.C.C. Rep. Serv. 2d (West) 1075, 1987 Tex. App. LEXIS 6888
CourtCourt of Appeals of Texas
DecidedJanuary 28, 1987
Docket2-85-118-CV
StatusPublished
Cited by15 cases

This text of 726 S.W.2d 188 (Malone v. Carl Kisabeth Co., Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Malone v. Carl Kisabeth Co., Inc., 726 S.W.2d 188, 4 U.C.C. Rep. Serv. 2d (West) 1075, 1987 Tex. App. LEXIS 6888 (Tex. Ct. App. 1987).

Opinions

OPINION

HILL, Justice.

Bobby Malone and Pat Calloway appeal from a judgment against them and two other defendants, all jointly and severally, in favor of Carl Kisabeth Company, Inc., in the amount of $35,199.25 damages, with prejudgment interest of $12,874.35, plus attorney’s fees through trial of $16,350.00, as well as additional attorney’s fees in the event of appeals. The suit was a breach of contract action brought as a result of the undisputed refusal of appellants to accept delivery of a portion of a group of chairs which they had purchased from Kisabeth. The damages awarded included $26,048.89 for lost profit on the sale of 454 chairs and $9,150.36 for storage of chairs subsequent to the breach.

We reverse and render judgment that Kisabeth take nothing by its suit.

Appellants contend in point of error number five that the trial court erred in rendering judgment based on the jury’s finding of lost profit damages, because the jury’s answer to the special issue on lost profits included profits on a portion of the chairs which were accepted and paid for by them, resulting in a double recovery for Kisabeth.

Appellants contracted to purchase 454 chairs from Kisabeth at a contract price of $105.24 per chair. They breached the contract by only accepting 171 of the chairs. They have paid to Kisabeth a sum greater than the contract price for the chairs which they accepted. Kisabeth’s evidence established that the total contract price for all 454 chairs was $47,778.96, and that the cost of manufacturing all the chairs was $21,-730.07. The jury, in response to a special issue, found that the difference between those two, $26,048.89, was the profit on the sale of all 454 chairs.

In this factual situation, the measure of damages is determined from TEX.BUS. & COM.CODE ANN. sec. 2.708(b) (Tex.UCC) (Vernon Supp.1987), which provides that the measure of damages is the profit (including reasonable overhead) which the seller would have made from full performance by the buyer, together with any incidental damages provided in section 2.710 of the Code, due allowance for costs reasonably incurred, and due credit for payments or proceeds of resale.

Although appellants had accepted and paid for a portion of the chairs, the trial court awarded Kisabeth a judgment which included the profit for the sale of all the chairs contracted for, without allowing the appellants any credit for the payments made by them for the chairs which they had accepted and paid for. Kisabeth there[190]*190fore enjoyed a double recovery, since the profits on those chairs which had been accepted and paid for by appellants was included in the payment which the appellants had made to Kisabeth. We sustain point of error number five.

In point of error number two, appellants contend that the trial court erred in rendering judgment for Kisabeth because there is no jury finding that Kisabeth was a lost volume seller.

It has been held in other jurisdictions that the “due credit for payments or proceeds of resale” language of section 2.708(b) of the Code does not result in a credit for the defaulting buyer from the proceeds of resale if the seller is a “lost volume seller.” Teradyne, Inc. v. Teledyne Industries, Inc., 676 F.2d 865 (1st Cir.1982).

A seller is a lost volume seller if the purchaser at resale would have been solicited by the seller had there been no breach, the solicitation would have been successful, and the seller could have performed the additional contract. Schlosser, Damages for the Lost-Volume Seller: Does an Efficient Formula Already Exist?, 17 U.C.C. L.J. 238, 245 (1985) citing Harris, A Radical Restatement of the Law of Seller’s Damages: Sales Act and Commercial Code Results Compared, 18 STAN.L.REV. 66, 82 (1965). The reason for the rule is based on the idea that the lost volume seller would have received two profits, not just one, if the buyer had not breached, so that a recovery of both profits is necessary to put the seller in as good a position as if there had been no breach. Comeq, Inc. v. Mitternight Boiler Works, 456 So.2d 264, 268-69 (Ala.1984).

The trial court did not give appellants in this case any credit for the proceeds of the resale of the chairs, thus impliedly holding Kisabeth was a lost volume seller.

In five special issues, the trial court required the jury to find the difference between the market price of the chairs and the contract price of the chairs as of the date of the breach; to find the commercially reasonable and necessary charges and expenses incurred by Kisabeth for the storage of the chairs following appellants’ refusal to accept them; to find the expenses Kisabeth saved because of the breach; to find whether or not the recovery by Kisa-beth of the difference between the market price of the chairs not paid for and the contract price, together with the storage charge, less the expenses saved would place Kisabeth in as good a position as though the appellants had fully performed; and to find the lost profit due to appellants’ failure to accept and pay for all of the chairs.

There were no special issues asking the jury to find whether the purchaser at resale would have been solicited by the seller had there been no breach; whether the solicitation would have been successful; or whether Kisabeth could have performed the additional contract.

TEX.R.CIV.P. 279 provides in part:
Upon appeal all independent grounds of recovery or of defense not conclusively established under the evidence and upon which no issue is given or requested shall be deemed as waived; but where such ground of recovery or of defense consists of more than one issue, if one or more of the issues necessary to sustain such ground of recovery or of defense, and necessarily referable thereto, are submitted to and answered by the jury, and one or more of such issues are omitted, without such request, or objection, and there is evidence to support a finding thereon, the trial court, at the request of either party, may after notice and hearing and at any time before the judgment is rendered, make and file written findings on such omitted issue or issues in support of the judgment, but if no such written findings are made, such omitted issue or issues shall be deemed as found by the court in such manner as to support the judgment.

Id.

In this case, no issue was submitted with respect to any element of Kisabeth’s ground of recovery, that of being a lost volume seller, and none of the issues submitted was necessarily referrable to Kisa-beth’s ground of recovery on the basis of it [191]*191being a lost volume seller, in the sense that none of the issues would have given notice to appellants that Kisabeth had not waived its ground of recovery based on being a lost volume seller. Consequently, we deem Kisabeth’s ground of recovery as a lost volume seller as having been waived. In the absence of the submission of any element of the ground of recovery or any issue necessarily referable thereto, we decline to deem any such issue to have been found in support of the judgment.

Kisabeth contends that it was unnecessary to submit such an issue because the fact that Kisabeth was a lost volume seller was undisputed.

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

Related

Cite This Page — Counsel Stack

Bluebook (online)
726 S.W.2d 188, 4 U.C.C. Rep. Serv. 2d (West) 1075, 1987 Tex. App. LEXIS 6888, Counsel Stack Legal Research, https://law.counselstack.com/opinion/malone-v-carl-kisabeth-co-inc-texapp-1987.