Columbia Cascade Co. v. City of Fernandina Beach

• Decision Date: 12 July 2017
• Docket Number: A158696
• Citation: 400 P.3d 1001,286 Or.App. 729
• Parties: COLUMBIA CASCADE COMPANY, an Oregon corporation, Plaintiff-Appellant, v. CITY OF FERNANDINA BEACH, a city in the State of Florida, Defendant-Respondent, and Todd B. Krohn, an individual; and Site Creations, LLC, a dissolved Florida limited liability company, Defendants.
• Court: Oregon Court of Appeals

286 Or.App. 729
400 P.3d 1001

COLUMBIA CASCADE COMPANY, an Oregon corporation, Plaintiff-Appellant,
v.
CITY OF FERNANDINA BEACH, a city in the State of Florida, Defendant-Respondent,
and
Todd B. Krohn, an individual; and Site Creations, LLC, a dissolved Florida limited liability company, Defendants.

A158696

Court of Appeals of Oregon.

Argued and submitted March 1, 2016.
July 12, 2017

John M. Berman, Tigard, argued the cause and filed the briefs for appellant.

Candice R. Broock argued the cause for respondent. With her on the brief were James P. Laurick and Kilmer, Voorhees & Laurick, P.C.

Before Tookey, Presiding Judge, and DeHoog, Judge, and Sercombe, Senior Judge.

SERCOMBE, S.J.

In this breach of contract case, plaintiff Columbia Cascade Company (Columbia) appeals a general judgment in favor of defendant City of Fernandina Beach (the city) that dismissed Columbia's claim against the city with prejudice and awarded the city attorney fees, costs, and disbursements. The case arose after both Columbia and Columbia's sales representative, Site Creations, LLC, sent the city invoices for the same playground equipment that Columbia had manufactured for and delivered to the city. Instead of paying the invoice from Columbia, the city paid Site Creations' invoice. Columbia never received payment for the equipment and, ultimately, brought an action against the city for breach of contract.¹ The parties filed cross-motions for summary judgment. The trial court concluded that Site Creations had actual or apparent authority to receive payment on Columbia's behalf. Accordingly, it granted the city's motion for summary judgment and denied Columbia's motion. On appeal, Columbia assigns error to the trial

400 P.3d 1004

court's summary judgment ruling. As explained below, we conclude that there are issues of fact with respect to apparent authority and, therefore, the trial court properly denied Columbia's motion for summary judgment and erred in granting the city's motion. Accordingly, we reverse and remand.

"In appeals involving cross-motions for summary judgment, we review the record for each motion in the light most favorable to the party opposing it." Johnson v. State Board of Higher Education , 272 Or.App. 710, 712, 358 P.3d 307, rev. den. , 358 Or. 527, 366 P.3d 1168 (2015). In this case, on summary judgment, the following facts are undisputed.

Columbia manufactures and sells playground equipment, including a line of equipment called TimberForm; TimberForm is a registered trademark of Columbia. Columbia sells its products through independent sales representatives and, at the time of the events giving rise to this

action, Site Creations was Columbia's exclusive sales representative in northern Florida.

Columbia and Site Creations entered into a Sales Representative Agreement (SRA) that set forth the terms of the relationship. The services Site Creations was to provide were defined as follows:

"2.3 Scope of Services.

"a. REPRESENTATIVE represents to COLUMBIA that it has and will establish significant contacts in the fields of landscape architecture, architecture, engineering, recreation, education, government, and construction in the territory described in 2.1.c. COLUMBIA authorizes REPRESENTATIVE to solicit orders for COLUMBIA products as defined in this Agreement within REPRESENTATIVE territory. Because COLUMBIA has exclusive arrangements in other territories, REPRESENTATIVE is not authorized to quote or sell COLUMBIA products for delivery or installation outside REPRESENTATIVE territory without the prior written authorization of COLUMBIA.

"b. COLUMBIA authorizes REPRESENTATIVE to solicit specifications, inquiries, and orders for submission to COLUMBIA for review, approval, quotation, and final order confirmation. COLUMBIA will be responsible for the preparation of the necessary documentation in connection with sales orders.

"c. It is understood that REPRESENTATIVE does not have any authority to contract on behalf of COLUMBIA."

(Capitalization in original.) Site Creations was to receive a commission on its sales, but no commission was payable until Columbia had been paid in full for the equipment. The "Commission" section of the SRA also provided that, "[i]n the event that REPRESENTATIVE is delinquent in making any payments owing COLUMBIA when due and payable, COLUMBIA shall have the right to offset against commissions payable to REPRESENTATIVE for the purpose of reducing said delinquent payments." (Capitalization in original.) Site Creations was required to "forward all orders promptly to COLUMBIA and each order shall be subject to COLUMBIA acceptance." (Capitalization in original.) For its part, Columbia was to "promptly forward" to Site Creations "all product inquiries received" by Columbia from "potential

or actual customers" within the agreed upon territory for Site Creations' "attention and customer service." Section 3.6 of the SRA addresses invoices and collections:

"a. COLUMBIA shall send all invoices in connection with orders solicited by REPRESENTATIVE directly to the customer with a copy to REPRESENTATIVE. COLUMBIA is responsible for all collections and bad debts. COLUMBIA also has the right to exercise complete control over the approval of all customer credits, orders, and contracts.

"b. COLUMBIA shall not have the right to debit REPRESENTATIVE for the loss of any sum involved in any invoice from COLUMBIA to the customer, unless that customer is also the REPRESENTATIVE or REPRESENTATIVE has guaranteed payment in writing.

"c. REPRESENTATIVE shall forward promptly to COLUMBIA all payments that REPRESENTATIVE may collect from customers of COLUMBIA and shall not co-mingle such payments owed to COLUMBIA

400 P.3d 1005

with REPRESENTATIVE funds."

(Capitalization in original.)

In October 2011, Site Creations provided the city with a quote for the purchase of TimberForm playground equipment. The quote stated that the price, including freight, would be $19,896.35, and that the checks should be made payable to "TimberForm, Inc., 1300 SW Sixth Avenue, Ste 310, Portland, OR 97201-3464." Shortly thereafter, the city issued a purchase order for the equipment to Site Creations; the purchase order listed Site Creations as the vendor. Site Creations forwarded the purchase order to Columbia.

After receiving the purchase order, Columbia sent the city an order confirmation on Columbia letterhead that "confirm[ed the city's] order placed through [Columbia's] regional representative, Site Creations, LLC." The confirmation document identified Columbia as the seller, confirmed the identity of the purchaser (City of Fernandina Beach, Parks & Recreation Department), included Columbia's address, noted that Columbia made TimberForm playground equipment, and listed a number of terms of sale. In the terms of sale, the confirmation stated that all "orders may be accepted only by Columbia Cascade Company

headquarters staff located in Portland, Oregon, U.S.A. Orders may be accepted only by the sending of a written Confirmation to the purchaser. Regional representatives do not have authority to enter into contracts on behalf of the company." The city attorney made some modifications to the terms of sale, deleting an arbitration clause and modifying a section entitled "Purchase Order Terms." As modified, that section provided: "All terms and conditions of any purchase order, or other writing, issued by the buyer which are inconsistent with the terms and conditions set forth here are null and void. See City of Fernandina Beach purchase order." After being exchanged between Columbia and the city, the confirmation was eventually signed by a representative of Columbia, the city manager, and the city attorney. The city did not receive a copy of the SRA defining the relationship between Columbia and Site Creations.

On November 17, 2011, Columbia sent a "Letter of Transmittal" along with three sets of drawings, and requested that the city "have one set marked ‘approved’ and returned to [Columbia]." Later, in December 2011, Site Creations sent an email to the director of the city's Parks and Recreation Department that asked for approval of "shop drawings" of the playground. The city confirmed that the plans were "satisfactory" and, in early 2012, Columbia shipped the playground equipment to the city. Columbia sent to the city invoices for the playground equipment dated February 24, 2012; the city received those invoices. Site Creations sent the city its own invoice for the playground equipment dated February 29, 2012. The city did not respond to Columbia's invoice and, instead, sent a check, payable to Site Creations, in response to the invoice received from Site Creations. Columbia never received payment for the playground equipment it had manufactured and shipped to the city.

Columbia filed this action in which it set forth a claim for breach of contract against the city, seeking $19,896.35 for the playground equipment it had manufactured for and shipped to the city. Eventually, the parties filed cross-motions for summary judgment. Columbia, in its motion, argued that there was no genuine issue of material fact and that, as a matter of law, there was a contract

between Columbia and the city and the city breached the contract by failing to pay Columbia for the playground equipment. The city, in its motion,...