Smith v. Skone & Connors Produce, Inc.

26 P.3d 981
Court of Appeals of Washington·Decided July 12, 2001·No. 19581-3-III·Published·Cited by 7 cases

Opinion

26 P.3d 981 (2001)
107 Wash.App. 199

James SMITH d/b/a Smith Farms, Appellant,
v.
SKONE & CONNORS PRODUCE, INC., Respondent.

No. 19581-3-III.

Court of Appeals of Washington, Division 3, Panel Two.

July 12, 2001.

*982 John G. Schultz, George E. Telquist, Leavy, Schultz, Davis & Fearing, Kennewick, for Appellant.

Brian H. Miller, Dano, Miller, Ries, Othello, Christopher F. Ries, Moses Lake, for Respondent.

SCHULTHEIS, J.

Commission merchants must post an itemized list of their charges and may not vary those charges except by written contract with individual consignors. RCW 20.01.080. James Smith, a potato farmer, had a verbal agreement with Skone & Connors Produce, Inc., a commission merchant that cleaned, packed, and sold Mr. Smith's potatoes. After Mr. Smith's 1995 crop had been harvested, Skone & Connors sent him a statement with packing charges substantially higher than the charges posted in 1988 pursuant to the statute. Mr. Smith sued for the overpayment and for other discrepancies in his account. After a bench trial, the court granted judgment for Skone & Connors on the packing charge issue.

*983 On appeal, Mr. Smith contends he is only required to pay the 1988 posted packing charge because that charge was not altered by written contract. Because we find that the parties executed a written contract, and additionally find that a violation of RCW 20.01.080 does not affect the validity of an express contract term, we affirm.

FACTS

Skone & Connors (S & C) is a licensed commission merchant incorporated in 1972. Mr. Smith has been farming potatoes since 1983. In 1993, S & C packed and sold Mr. Smith's fresh market potatoes pursuant to a written agreement signed by Mr. Smith and his business partner. This agreement included the following description of "pack-out" charges:

Skone & Connors will make every attempt to obtain the best possible price for your crop. We will furnish you an accounting of the potato pack-out within 24 hours after potatoes have been packed. The final settlement for the potatoes will be available 60 days after the last day of shipment.... We will charge $65.00 per ton scale weight for packing and marketing this crop.

Defendant's Ex. 1. In the fall of 1993, Mr. Smith (who no longer had a partner) decided to have S & C pack and sell his 1994 crop. The parties entered into a verbal agreement regarding acreage, harvest dates, and the packing charge of $65 per ton. A letter from S & C confirming this agreement was never signed by Mr. Smith. The 1994 crop was harvested and sold by S & C and Mr. Smith accepted the settlement, labeled "final payment," without objection. Report of Proceedings (RP) at 102-03.

In December 1994 or January 1995, Mr. Smith again agreed to grow potatoes for S & C. The parties entered into an oral agreement similar to the ones they had made in 1993 and 1994. S & C asserts that it told Mr. Smith the packing charge for 1995 would have to be raised $5 per ton due to the increased price for corrugated boxes. Stephen Connors of S & C later testified that Mr. Smith accepted the new charge of $70 per ton. Mr. Smith contends he was not informed of the new packing charge until he received statements for the 1995 harvest in November 1995. Mr. Connors met with Mr. Smith in November 1995 and January 1996 to settle the account. The parties went over the records each time and Mr. Smith raised no objection to the charges, which included the clearly marked packing charge of $70 per ton. He accepted a settlement check in January 1996 and cashed it.

Mr. Smith contacted a lawyer in November 1995 because he noticed discrepancies in S & C's charges and in the percentages of culled potatoes from one day to another. His lawyer contacted the Department of Agriculture and discovered that S & C's packing charges had not been amended since they were posted with the State in 1988. The 1988 posted charges were much lower than S & C's current charges. Mr. Smith filed a complaint with the Department of Agriculture, which declined to pursue the matter. Then, in February 1996, he wrote a letter to S & C complaining of digging overcharges from 1994, inaccurate records of culled potatoes one day in 1994, and 1995 packing charges in excess of the posted 1988 charges. He warned that his settlement payment would have to be adjusted or he would take legal action.

Mr. Smith filed suit against S & C in December 1996. He claimed that the difference between the 1988 posted packing charge and the amount he paid for packing in 1995 was $87,985.65. He also claimed an overcharge for digging in 1994 and improper accounting. After hearing testimony, the trial court found that the agreement between S & C and Mr. Smith was a transaction in goods governed by Article 2, Title 62A RCW. Recognizing that RCW 20.01.080 prohibits deviations from the commission merchant's posted charges except by written contract, the court found that S & C's detailed accounting and the settlement payment cashed by Mr. Smith constituted a written agreement for the purposes of RCW 62A.2-201(1) and (2), and RCW 20.01.080. Accordingly, the trial court concluded that the posted packing charge had been properly changed by the 1995 agreement, and the court granted judgment for S & C on that *984 issue. On the other issues, the court awarded Mr. Smith $5,479 for the digging overcharges and denied recovery for the improper accounting claim. Mr. Smith appeals only the decision regarding the 1995 packing charge.

DISCUSSION

Mr. Smith agrees that he and S & C had an agreement for the digging, cleaning, packing, and selling of Mr. Smith's potatoes. He does not wish to invalidate that agreement or to challenge any of its terms other than the $70 packing fee. He raises two alternative arguments: (1) that S & C's 1995 packing fee violated the clear provisions of RCW 20.01.080 because the 1995 charge was a change from the 1988 posted charge and the 1995 charge was not contained in a written contract; and (2) the two-year prior course of dealing established a packing fee of $65.

I. Violation of statute. RCW 20.01.080 provides that when a commission merchant applies for a license, he or she must include an itemized listing of all charges to be rendered to a consignor. The commissions and charges on this list "shall not be changed or varied for the license period except by written contract between the consignor or his or her agent and the licensee" or by written notice to the agriculture department chairman. RCW 20.01.080. Any commission merchant that violates this provision has committed a civil infraction.

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Smith v. Skone & Connors Produce, Inc., 26 P.3d 981 (Wash. Ct. App. 2001).

26 P.3d 981 (Smith v. Skone & Connors Produce, Inc.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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