Polar Trading, Inc. v. Amboy Closeouts, Inc.

899 S.W.2d 577, 29 U.C.C. Rep. Serv. 2d (West) 472, 1995 Mo. App. LEXIS 1048, 1995 WL 331461
CourtMissouri Court of Appeals
DecidedJune 6, 1995
DocketNo. WD 49710
StatusPublished

This text of 899 S.W.2d 577 (Polar Trading, Inc. v. Amboy Closeouts, Inc.) is published on Counsel Stack Legal Research, covering Missouri Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Polar Trading, Inc. v. Amboy Closeouts, Inc., 899 S.W.2d 577, 29 U.C.C. Rep. Serv. 2d (West) 472, 1995 Mo. App. LEXIS 1048, 1995 WL 331461 (Mo. Ct. App. 1995).

Opinion

HANNA, Presiding Judge.

Plaintiff appeals the trial court’s judgment in favor of the defendant. The plaintiff, Polar Trading, Inc. (Polar Trading), is a California corporation engaged in the business of manufacturing gift wrapping and accessories. The defendant, Amboy Closeouts, Inc. (Am-boy), is a Missouri corporation which specializes in liquidation sales — buying manufacturers’ inventory and closeouts for resale.

In October 1993, William Sayre, an independent sales representative of Polar Trading and Donald Alcorn, president of Amboy, negotiated a deal at a trade show in Chicago. Amboy agreed to purchase between 25,000 and 30,000 Christmas ornaments from Polar Trading at $.50 per ornament plus shipping. On November 3,1993, Polar Trading shipped 14 cases of the ornaments (976 ornaments) to Amboy as samples. Amboy received the samples on November 11, and determined that they were in satisfactory condition. Polar Trading sent an invoice in the amount of $696.50 for the goods and shipping costs. Amboy never paid the bill.

Based on the good condition of the samples, Mr. Alcorn contacted Polar Trading on November 11, to arrange for shipment of the rest of the ornaments. He spoke to Ms. Vinie Chang, director of marketing for Polar Trading. Ms. Chang told Mr. Alcorn that since Polar Trading had never before done business with Amboy, it would require a $2000 deposit prior to shipping the goods. Due to the fact that Christmas was approaching and Amboy wanted the ornaments shipped immediately, Ms. Chang agreed to accept a fax of the deposit check, the original of which Mr. Alcorn agreed to put in the mail that day. Upon receipt of the faxed check, Ms. Chang confirmed the arrangement in a letter which she faxed to Mr. Alcorn. Mr. Alcorn testified at trial that, later that same day, he left a message on Ms. Chang’s answering machine advising that he would not [579]*579be sending the check. Ms. Chang denies ever receiving that message. The following day, Polar Trading shipped 328 cases of ornaments to Amboy. Three days later, Polar Trading shipped the remaining 10 cases. A total of 352 cases (26,347 pieces) were shipped to Amboy.

On November 30, 1993, Mr. Alcorn left a message for Ms. Chang that the ornaments were defective. On December 6, he sent a letter which stated that the glue was not holding the ornaments together and asked that Polar Trading retrieve the goods. On December 28, Polar Trading arranged for Yellow Freight to pick up the goods. The parties agree that not all of the ornaments were picked up, although there is some discrepancy as to how many cases were actually retrieved.1 At trial, Amboy admitted that it sold 1200-1500 pieces of merchandise and that some remained in the warehouse. Polar Trading maintained that Amboy had not accounted for 70 cases (6799 pieces). Polar Trading was eventually able to resell the returned ornaments for $1746.

Polar Trading filed suit against Amboy, asserting claims for fraudulent misrepresentation and breach of contract. The ease was tried to the court on May 24,1994. The only two witnesses called were Ms. Chang and Mr. Alcorn. The trial court entered judgment in favor of Amboy. Polar Trading appeals, arguing that the trial court erred in concluding as to the fraudulent misrepresentation claim: that Polar Trading did not rely on Mr. Alcorn’s November 11 representation that he would send the deposit check; and that Polar Trading’s damages were not caused by Amboy’s misrepresentation. Polar Trading further argues that, as to the breach of contract claim, the trial court erred in entering judgment in favor of Amboy because Mr. Alcorn admitted at trial that Am-boy had sold some of the goods and would owe Polar Trading for at least those ornaments retained and sold.

In its first two points, Polar Trading argues that the trial court erred in entering judgment in favor of the defendant on its claim of fraudulent misrepresentation. In particular, Polar Trading challenges two conclusions drawn by the court: (1) that Polar Trading did not rely on Alcorn’s misrepresentation; and (2) that Polar Trading’s damages did not result from Alcorn’s representation that he would send the $2000 deposit check. The second issue is determinative.

In order to prove fraudulent misrepresentation, a plaintiff must prove: (1) a representation; (2) its falsity; (3) its materiality; (4) the speaker’s knowledge of its falsity or ignorance of its truth or falsity; (5) the speaker’s intent that his representation be acted upon; (6) the hearer’s reliance on the truth of the representation; (7) the hearer’s right to rely on the representation; and (8) the hearer’s consequent and proximate injury. Heberer v. Shell Oil Co., 744 S.W.2d 441, 443 (Mo. banc 1988).

In a court-tried case, our standard of review is governed by Murphy v. Carron, 536 S.W.2d 30 (Mo. banc 1976), and we must affirm the trial court’s judgment unless there is no substantial evidence to support it, it is against the weight of the evidence, or the trial court erroneously declared or applied the law. Id. at 32. We give the prevailing party the benefit of all favorable evidence and reasonable inferences to be drawn therefrom and disregard all evidence to the contrary. Lisec v. Coy, 793 S.W.2d 173, 175-76 (Mo.App.1990).

In order to prove fraudulent misrepresentation, the plaintiff must show that its injuries were proximately caused by its reliance on the defendant’s false representation. Heberer, 744 S.W.2d at 443. The trial court found that “any damages Plaintiff allegedly suffered were not due to Defendant Alcorn’s representations, but by Plaintiff’s failure to live up to its contractual responsibilities with Defendant Amboy to deliver conforming goods.”

Polar Trading argues that it “showed substantial damage proximately caused by the misrepresentation in that it could have sold [580]*580the goods to another buyer in time for Christmas had it not sent them to Amboy and would not have incurred the substantial shipping charges it did.” Therefore, the argument continues, the court’s finding to the contrary was against the weight of the evidence and was not supported by substantial evidence.

The evidence at trial showed that a large number of the ornaments shipped by Polar Trading were defective. Many of the ornaments were not properly glued together and some were not glued at all. As a result, they fell apart and were unsuitable for use as Christmas tree ornaments. Section 400.2-601, RSMo 1994, states in part:

[I]f the goods or the tender of delivery fail in any respect to conform to the contract, the buyer may
(a) reject the whole; or
(b) accept the whole; or
(c) accept any commercial unit or units and reject the rest.

Pursuant to the Uniform Commercial Code, therefore, Amboy was entitled to reject the shipment in its entirety. Polar Trading’s argument that it could have sold the goods to another buyer is flawed in that the court could reasonably infer from the evidence that any other buyer would also have rejected the nonconforming goods pursuant to § 400.2-601.

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

Related

Health Related Services, Inc. v. Golden Plains Convalescent Center, Inc.
806 S.W.2d 102 (Missouri Court of Appeals, 1991)
Heberer v. Shell Oil Co.
744 S.W.2d 441 (Supreme Court of Missouri, 1988)
Murphy v. Carron
536 S.W.2d 30 (Supreme Court of Missouri, 1976)
Paramount Sales Co., Inc. v. Stark
690 S.W.2d 500 (Missouri Court of Appeals, 1985)
Marriage of Lisec v. Coy
793 S.W.2d 173 (Missouri Court of Appeals, 1990)

Cite This Page — Counsel Stack

Bluebook (online)
899 S.W.2d 577, 29 U.C.C. Rep. Serv. 2d (West) 472, 1995 Mo. App. LEXIS 1048, 1995 WL 331461, Counsel Stack Legal Research, https://law.counselstack.com/opinion/polar-trading-inc-v-amboy-closeouts-inc-moctapp-1995.