Contours, Inc. v. Lee
| Citation | 874 P.2d 1100,10 Haw.App. 368 |
| Decision Date | 08 June 1994 |
| Docket Number | No. 16716,16716 |
| Parties | , 24 UCC Rep.Serv.2d 892 CONTOURS, INC., a Hawai'i corporation, Plaintiff-Appellee, v. William LEE, Defendant-Appellant. |
| Court | Court of Appeals of Hawai'i |
Syllabus by the Court
1. Under Hawai'i Revised Statutes (HRS) § 490:2-201(3)(a) (1985), a modified contract for the sale of goods for the price of $500 or more is enforceable by way of action or defense, notwithstanding the lack of a writing sufficient to indicate that a modification of the contract has been made between the parties and signed by the party against whom enforcement is sought or by his authorized
agent or broker, if the following requirements are satisfied:
(1) the goods are to be specially manufactured for the buyer;
(2) the goods are not suitable for sale to others in the ordinary course of the seller's business;
(3) the seller made either a substantial beginning of the manufacture of the goods or commitments for their procurement;
(4) the seller's beginnings or commitments occurred under circumstances which reasonably indicate the goods are for the buyer; and
(5) the seller's beginnings or commitments occurred before the seller received a notice of repudiation from the buyer.
2. As used in HRS § 490:2-201(3)(a), the term "specially manufactured" refers to the nature of the particular goods in question and not to whether the goods were made in an unusual, as opposed to the regular, business operation or manufacturing process of the seller. The crucial inquiry is whether the manufacturer could sell the goods in the ordinary course of his business to someone other than the original buyer. If with slight alterations the goods could be so sold, then they are not specially manufactured; if, however, essential changes are necessary to render the goods marketable by the seller to others, then HRS § 490:2-201(3)(a)'s "specially manufactured" exception to HRS § 490:201(1)'s statute of frauds does apply.
3. HRS § 490:2-608(1)(a) authorizes a buyer who has accepted nonconforming goods on the reasonable assumption that the nonconformity would be cured to revoke his acceptance if the nonconformity has not been seasonably cured. However, the law will not permit the buyer who is a cause of the seller's failure to seasonably cure the nonconformity to enjoy any benefit based upon the seller's failure to seasonably cure the nonconformity.
Stuart M. Cowan (Price Okamoto Himeno & Lum, of counsel, with him on the reply brief), on the briefs, Honolulu, for defendant-appellant.
Thomas L. Mui, on the brief, Honolulu, for plaintiff-appellee.
Before BURNS, C.J., HEEN, J., and SIMEON R. ACOBA, * Circuit Judge, in place of WATANABE, J., recused.
Defendant William Lee (Lee) appeals the circuit court's December 21, 1992 Judgment (Judgment) in favor of plaintiff Contours, Inc. (Contours) and against Lee in the amount of $8,500, plus interest at ten percent per annum from December 12, 1990 until paid, plus $310.90 costs and $837.50 attorney's fees. We vacate the Judgment and remand for further proceedings consistent with this opinion.
David DiGrandi (DiGrandi) is Contours' president and a furniture maker. The circuit court's November 13, 1992 Findings of Fact and Conclusions of Law (FsOF and CsOL) state in relevant part as follows:
FINDINGS OF FACT
3. Prior to November 12, 1990, [Lee] planned two (2) parties for his employees and business/social guests to be held at his recently purchased home on or about December 8 and December 15, 1990. [Lee] wanted his dining room area to be furnished appropriately for these events.
* * * * * *
5. At the November 12 meeting, DIGRANDI and [Lee] entered into an agreement for [Contours] to design, construct, and deliver certain pieces of furniture on or before December 5, 1990. The terms of the agreement were handwritten and signed by DIGRANDI....
6. [Contours] and [Lee] agreed that [Contours] would construct and deliver: two (2) "Avonite-Maple Tables"; two (2) "Maple-Fabric Arm Chairs"; twelve (12) 7. [Lee] wanted the furniture to be delivered in time to be used at his two (2) parties in December 1990. Therefore, the parties agreed that if [Contours] failed to deliver the furniture to [Lee] on or prior to December 5, 1990, [Contours] would pay [Lee] $500.00 for each day delivery was delayed....
"Maple-Fabric Side Chairs"; one (1) "Maple-Avonite-Glass Wall Unit" measuring 12 feet in length; one (1) "Maple-Avonite Dry Bar"; and one (1) "Lacquer Bookcase Unit," for a total purchase price of $18,000.00 (in cash), including a $3,000.00 [10 Haw.App. 371] deposit. [Lee] paid [Contours] the $3,000.00 deposit in cash on November 12, 1990 and made no further payments to [Contours] thereafter.
8. ... It was the understanding of the parties that DIGRANDI would be responsible for the design of the furniture in consultation with [Lee]. DIGRANDI sketched drawings of the wall unit and chairs ..., however, [Lee] directed DIGRANDI as to the design of the dining room tables.
9. About one (1) week after the November 12, 1990 meeting, the parties agreed on the design of the furniture.
10. About two (2) weeks after the November 12, 1990 meeting, [Lee] orally canceled his order for the dry bar and bookcase, which would have cost about $3,000.00. [Contours] did not construct or deliver the canceled items.
11. During the construction period, [Lee] requested changes to the dining room tables and chairs, and [Contours] complied with [Lee's] request.
12. During the construction period, DIGRANDI suggested, and [Lee] agreed, to reduce the length of the wall unit.
* * * * * *
14. [Contours] did not meet the December 5, 1990 delivery deadline.
15. The dining room tables, chairs, and part of the wall unit were delivered to [Lee] on December 12, 1990, and the remaining part of the wall unit was delivered to [Lee] on or about December 14, 1990.
16. Although the finishing work on the dining room tables was not completed on December 12, 1990, the tables were delivered to [Lee] at his request with the understanding [Contours] would pick up the tables later to take them back to [Contour's] shop for finishing.
17. On one (1) occasion [Contours] tried to pick up the furniture to do further finishing work. On another occasion [Contours] tried to take back the furniture by sending a commercial delivery service to pick up the furniture. On both occasions [Lee] refused to surrender the furniture.
18. Since the delivery of the furniture to [Lee], [Lee] has retained the furniture and has not permitted [Contours] to take the furniture back or complete the finishing work.
19. Except for about a seven (7) month period during which the furniture remained in a home owned by [Lee] (which was not [Lee's] residence), since December 1990 the furniture has been stored on [Lee's] partially covered patio, which was exposed to weather conditions.
* * * * * *
4. About two (2) weeks after November 12, 1990, [Lee] canceled his order for two (2) items (i.e. the dry bar and bookcase) thereby reducing the purchase price by $3,000, and agreed to reduce the length of the wall unit.
5. [Contours] has substantially performed its obligations under the agreement, as modified by agreement of the parties, except insofar as [Contours] did not meet the delivery deadline.
6. [Lee] received, accepted, and retained the goods, and has not permitted [Contours] to take back the goods or to complete finishing work on the goods. [Lee] has not complied with his obligation under the agreement to pay the purchase price for the goods received.
7. [Contours] is entitled to recover the sum of $12,000.00, which is the difference between the purchase price of $18,000.00 and $6,000.00 (the sum of the price for the 8. [Lee] is entitled to recover the sum of $3,500.00 for [Contour's] delay in delivering the goods ($500.00 per day from December 6, 1990 through December 12, 1990).
cancelled items, ($3,000.00) and the deposit paid by [Lee] ($3,000.00)).
9. Judgment shall be entered in favor of [Contours] and against [Lee] for the amount of $12,000.00, and judgment shall be entered in favor of [Lee] and against [Contours] for the amount of $3,500.00.
* * * * * *
Lee raises various points on appeal. We will discuss only those that merit discussion.
Lee's version of the facts was that: he did not orally modify the contract; Contours breached the contract by not delivering some of the goods and delivering the balance of the goods nonconforming and late; Lee did not accept the delivered goods; Lee told Contours' employees to depart his residence and to take the goods with them; after Contours' employees departed without taking the goods, Lee held the goods as security for the refund of his $3,000 down payment; and the goods were not damaged while Lee held them. Consequently, Lee disputes FsOF 10, 11, 12, 15, 16, 17, 18, and 19, and CsOL 4, 5, 6, 7, 8, and 9.
The trial judge, however, did not believe Lee. The first issue on appeal is whether any of the challenged FsOF are clearly erroneous. See Shoemaker v. Takai, 57 Haw. 599, 561 P.2d 1286 (1977). Upon a review of the record, we conclude that none of the challenged FsOF are clearly erroneous because (1) each is supported by substantial evidence in the record and (2) we do not have a definite and firm conviction that a mistake has been made.
The original contract was in writing. The subsequent oral modification of the contract canceling the order of some goods and changing the order for the remaining goods cannot be enforced against Lee absent an exception to the relevant statute of frauds. Thus, the question is whether the circuit court was right when it implicitly concluded that the oral modifications of the written contract (FsOF 10, 11, and 12) were enforceable. In the absence of an essential finding of fact, we cannot answer this question.
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