Buchholz v. Schneider's Milling, Inc.
| Decision Date | 14 May 2003 |
| Docket Number | No. 2-990/01-2054.,2-990/01-2054. |
| Parties | JAMES BUCHHOLZ, Plaintiff-Appellant, v. SCHNEIDER'S MILLING, INC., Defendant-Appellee. |
| Court | Iowa Court of Appeals |
Appeal from the Iowa District Court for Bremer County, Paul W. Riffel, Judge.
James Buchholz appeals amount of damages awarded by the district court in this breach of contract case based on the sale of pigs. AFFIRMED.
David Stamp of Ball, Kirk & Holm, P.C., Waterloo, for appellant.
Ivan Ackerman of Engelbrecht, Ackerman & Hassman, Waverly, for appellee.
Heard by Sackett, C.J., and Huitink and Zimmer, JJ.
James Buchholz appeals the amount of damages awarded by the district court in this breach of contract case based on the sale of pigs. He claims the court erred by: (1) finding the parties had orally modified the contract; and (2) failing to award sufficient damages. We affirm.
On April 15, 1997, Buchholz entered into a contract with Schneider's Milling, Inc. to provide between 500 to 590 segregated early weaned (SEW) pigs every three weeks beginning October 15, 1997. The parties agreed to a price of $36.50 per pig, if the pigs were between 53.5% to 55.5% lean. The contract was to continue for a period of forty-eight months.
Buchholz began providing pigs to Schneider's designee, Dr. Kenneth Budke, in October 1997. Schneider's purchased the pigs but passed the costs on to Budke, and in fact from October 1997 until December 1998, Budke wrote the checks to Buchholz for the pigs. Budke raised the pigs to the finished stage, when they were sent to market. Schneider's, a feed, fertilizer, and grain operation, made a profit by selling feed to Budke. Purina Company gave Budke a price support provided he fed Purina feed to the pigs.
Because Buchholz was just commencing a SEW pig program, the parties recognized that the number of pigs could vary in the first four months. Even after the first four months passed, however, Buchholz was unable to provide at least 500 pigs every three weeks. At the same time, the market price for pigs decreased significantly. In September 1998 a representative of Schneider's discussed reducing the price to $28 per pig. After some discussion, Buchholz proposed a price of $30 per pig. On October 8, 1998, the parties agreed to a price of $30 per pig and that Buchholz would produce at least 500 pigs every three weeks until April 1, 1999, or the contract would be terminated.
Buchholz had two deliveries of over 500 pigs, but the other deliveries were less than 500 pigs. In December 1998 Purina cancelled its agreement with Budke, and Budke stopped purchasing pigs from Buchholz. Schneider's then began directly paying for the pigs. In February 1999 Schneider's terminated its agreement with Buchholz. Buchholz was able to sell his pigs to other livestock producers. Buchholz sold his SEW pig business in December 2000.
Buchholz filed suit against Schneider's for breach of contract, claiming Schneider's had improperly repudiated the contract and had failed to pay the full contract price for the pigs, which was $36.50 per pig. Schneider's counterclaim asserting Buchholz breached the contract by failing to deliver the agreed upon number of pigs. It also asserted the contract had been modified in October 1998 to reduce the price to $30 per pig.
The district court determined the parties modified the written contract by an oral agreement to reduce the price from $36.50 per pig to $30 per pig. The court concluded Schneider's breached the contract by failing to perform after February 5, 1999, and that Buchholz was entitled to recover the loss incurred due to Schneider's refusal to purchase pigs from February 5, 1999, until Buchholz sold his operation in December 2000. The difference between the amount Buchholz received for the sale of his pigs, $321,023.93, and the amount he would have received from Schneider's, $322,800.14, was $1776.21, and judgment was entered for this amount. The court determined Schneider's was not entitled to recover on its counterclaim. The court denied Buchholz's motion filed pursuant to Iowa Rule of Civil Procedure 1.904(2). Buchholz now appeals.
The standard of review in this action is for the correction of errors at law. Iowa R. App. P. 6.4. The findings of fact in a law action are binding upon us if they are supported by substantial evidence. Iowa R. App. P. 6.14(6)(a). Evidence is substantial if a reasonable mind would accept it as adequate to reach the same findings. Frontier Props. Corp. v. Swanberg, 488 N.W.2d 146, 147 (Iowa 1992).
Buchholz claims the district court erred by finding the parties orally modified the written contract. He asserts there is insufficient evidence he agreed to the modification. He also asserts the modification was not supported by consideration.
The contract in this case provided, "This agreement cannot be amended, modified, or assigned by seller or buyer in any manner whatsoever without the written consent of both parties." A provision against oral modification may become inoperative because of modification, recision, waiver or estoppel, or an independent contract. Humiston Grain Co. v. Rowley Interstate Transp. Co., Inc., 483 N.W.2d 832, 834 (Iowa 1992) (citing 17A Am.Jur.2d Contracts § 537); Heatherington Letter Co. v. O. F. Paulson Constr. Co., 171 N.W.2d 264, 267 (Iowa 1969). Thus, the parties may orally agree to modify a provision against oral modification of a contract.
A modification occurs when the contracting parties agree to incur different duties and obligations from those in the original contract. Quigley v. Wilson, 474 N.W.2d 277, 280 (Iowa Ct. App. 1991). While Buchholz testified he did not agree to the modification of the contract, there is substantial evidence in the record to support the district court's finding that Buchholz had actually agreed to the modification. Jeffrey Lindell, a representative of Schneider's, testified Buchholz had agreed to a price of $30 per pig and that in fact he had proposed that figure after Schneider's had offered to pay $28 per pig. We also...
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