Scott Anderson Trucking Inc. v. Nielson Constr.

• Decision Date: 19 March 2020
• Docket Number: No. 20180274-CA,20180274-CA
• Citation: 462 P.3d 822
• Parties: SCOTT ANDERSON TRUCKING INC., Appellee, v. NIELSON CONSTRUCTION, Appellant.
• Court: Utah Court of Appeals

462 P.3d 822

SCOTT ANDERSON TRUCKING INC., Appellee,

v.NIELSON CONSTRUCTION, Appellant.

No. 20180274-CA

Court of Appeals of Utah.

Filed March 19, 2020

Joseph C. Rust, Salt Lake City, Attorney for Appellant

Stevan R. Baxter, Michael D. Lichfield, and Chase Ames, Salt Lake City, Attorneys for Appellee

Judge Jill M. Pohlman authored this Opinion, in which Judges Gregory K. Orme and David N. Mortensen concurred.

Opinion

POHLMAN, Judge:

¶1 Nielson Construction (Buyer) appeals the district court's summary judgment in favor of Scott Anderson Trucking Inc. (Seller) on Seller's breach of contract claim. After Seller told Buyer that it would sell a product for $25 per ton and that it had 12,000 to 15,000 tons available, Buyer emailed Seller, saying that Buyer "will need 12000 tons of [the product] at 20% for the project [and] will pay [Seller] $25.00 a ton." Buyer contends that the district court erred in determining that Buyer and Seller had an enforceable contract, that Buyer had not repudiated the contract, and that the contract was not a requirements contract. We affirm.

BACKGROUND¹

¶2 Buyer is a road builder that was hired to perform paving work on Gooseberry Road (the Gooseberry Project). For this project, Buyer required rotomill, which is recycled asphalt that can be combined with new asphalt for paving.

¶3 Seller is a trucking company that hauls and sometimes supplies construction materials like rotomill. Around the same time that Buyer needed rotomill for the Gooseberry Project, Seller had a pile of rotomill on its property that had been removed from Buyer's previous project site.

¶4 In 2013, Buyer's representative and paving manager, Bobby Peirce, spoke with Seller's principal, Scott Anderson, about acquiring rotomill for the Gooseberry Project (the First Conversation). During the First Conversation, Peirce asked Anderson if Seller was interested in selling Buyer the pile of rotomill. Peirce also asked how much rotomill was available. Anderson explained that Seller "had somewhere between 12,000 and 15,000 tons remaining in the pile" and that it would sell the rotomill to Buyer for $25 per ton. In response, Peirce said that he "would have to review that price ... with [Buyer's] management."

¶5 In December 2013, Peirce and Anderson spoke again (the Second Conversation). During the Second Conversation, Peirce told Anderson that "the price of $25 a ton was acceptable to [Buyer]." On December 31, 2013, Peirce emailed Anderson (the Email), stating,

Scott

There is 60000 tons of Asphalt on the Gooseberry Project we will need 12000 tons of Rotomill at 20% for the project will pay you $25.00 a ton. If there is more than that we may back haul some to Huntington thanks Bob.

The Email did not contain any conditions on the purchase related to the quality of rotomill, and Peirce did not subsequently communicate to Seller any different terms.

¶6 Buyer knew the location of Seller's pile of rotomill, knew that it came from Buyer's previous project, and had ample opportunity to inspect it. Yet Buyer did not view the rotomill until, at the earliest, the spring of 2015—at least sixteen months after the Email.

¶7 On September 12, 2015, Buyer started laying asphalt on the Gooseberry Project using rotomill from another source. Around that time, Peirce called Anderson to state that Buyer was rejecting Seller's rotomill because it was "faded or bleached and it's got lumps in it." Peirce had viewed Seller's stockpile of rotomill from his car and used that inspection as the basis for Buyer's rejection. After Buyer rejected Seller's rotomill, there was no market for it in the area.

¶8 Seller then sued Buyer for breach of contract. Both sides moved for summary judgment. In its motion, Buyer contended that the alleged contract between Buyer and Seller was indefinite and "too vague to enforce" and that Buyer was entitled to judgment as a matter of law. Seller opposed Buyer's motion, arguing that the "amount of rotomill and purchase price of the rotomill are clear, definite, and enforceable contract terms." In arguing that summary judgment instead should be granted in its favor, Seller further asserted that the undisputed facts showed that Buyer "breached a clear, definite, and enforceable contract for the sale of rotomill, damaging [Seller]" in the amount of $300,000. Buyer opposed Seller's motion by arguing, in part, that even if a contract existed, Buyer rightfully terminated the contract when Peirce rejected the rotomill.

¶9 The district court agreed with Seller. It first determined "as a matter of law that there was, in fact, a contract between the parties pursuant to which [Buyer] agreed to purchase 12,000 tons of rotomill from [Seller] at $25 per ton." The court next determined that the contract did not fail for indefiniteness because the contract "specifically states the quantity requested, the parties knew, at all relevant times, where the product was and where it came from, and [Buyer] agreed to pay $25 per ton for 12,000 tons." The court further ruled that the contract lacked conditions about the quality of Seller's rotomill and that Buyer had not included "any condition precedent ... or reserved any conditions."

¶10 On the question of whether Buyer rightfully terminated the contract, the district court concluded that Buyer "took too long as a matter of law to repudiate the contract." The court reasoned that the Uniform Commercial Code, as adopted by Utah, required Buyer to "inspect the goods sooner than 16–18 months after agreeing to purchase the rotomill." It explained that Buyer's "first indication" to Seller in the spring of 2015 that Buyer was not "abiding by the terms of the contract" came too late, especially when Buyer "could have looked at the pile before and after the contract was formed but failed to do so." As a result, the court determined that Buyer "did not reject or repudiate the contract for rotomill within a reasonable time" and that any alleged rejection of rotomill by Buyer was "ineffective."

¶11 The court then ruled that Buyer's breach of contract was "evident on September 12, 2015 when it moved forward on the Gooseberry Project without the rotomill" from Seller. The court thus granted summary judgment to Seller. And because Buyer was contractually obligated to pay a principal amount of $300,000 under the contract, the court awarded Seller $300,000, plus interest.

¶12 After the court announced its oral ruling but before it entered its written ruling, Buyer delivered a letter and a $300,000 check to Seller. Buyer's December 18, 2017 letter stated,

Enclosed with this letter is a check made payable to [Seller] in the amount of $300,000, reflecting the amount of the principal sum found owing by [Buyer] to [Seller]. We are making this payment while awaiting a final judgment for the purpose of abating interest. In making this partial payment , [Buyer ] fully and completely reserves its right of appeal and specifically relies on Utah Res. Int'l Inc. v. Mark Techs. Corp. , 2014 UT 59, ¶ 33, 342 P.3d 761. As soon as there is a final judgment, it is the intention of our client to pay whatever sum is found remaining owing by the court and to also remove the 12,000 tons of the [rotomill] in question. Once again, this will all be done to avoid any further monetary obligations to [Seller] during the pendency of the appeal we will file as soon as there is a final judgment entered by the court.

(Emphasis added.) Seller responded with a letter acknowledging that it understood that Buyer "desires to both satisfy any judgment entered against it and maintain its appeal rights." But Seller's letter warned Buyer that it could not do both: "[Buyer] may either satisfy the judgment in full, as it has represented it will, and waive its appeal rights pursuant to Utah law, or appeal." Seller cashed the check.

¶13 In a subsequent order, the district court ruled that Buyer's $300,000 payment "[was] properly applied first to the amount of prejudgment interest owing as of the date paid with the remaining balance then applied to the principal." In so ruling, the court acknowledged the December 18, 2017 letter, in which Buyer "asserted that the payment was not a waiver of [its] appellate rights."²

¶14 The district court then entered its written judgment in favor of Seller. At that point, Buyer still owed $68,137.05. Buyer filed a notice of appeal.

¶15 Days later, on April 10, 2018, Buyer tendered $68,137.05 to Seller. In a letter, Buyer stated, "We tender that amount to avoid further interest running during the pendency of the appeal [Buyer] has now filed. In making such a partial payment, [Buyer] fully and completely reserves its right of appeal ...." Seller responded that "this acceptance of tender does not waive [Seller's] right ... to object to the appeal." Seller eventually filed a satisfaction of judgment with the district court. Buyer did not object to that filing.

ISSUES AND STANDARDS OF REVIEW

¶16 On appeal, Buyer contends that the district court erred in granting summary judgment in favor of Seller on its breach of contract claim. Buyer raises several arguments in support. First, Buyer argues that no binding contract was created. Second, Buyer argues that to the extent a binding contract existed, it was mutually rescinded or properly repudiated by Buyer. Third, and in the alternative, Buyer argues that even if there was a binding contract, the district court erred in determining that Buyer agreed to purchase 12,000 tons of rotomill instead of only the amount actually required for the Gooseberry Project.

¶17 Summary judgment is appropriate when there is "no genuine dispute as to any material fact and the moving party is entitled to judgment as a matter of law." Utah R. Civ. P. 56(a). "We review a district court's grant of summary judgment for correctness, giving no deference to its conclusions of law." Flowell Elec. Ass'n v. Rhodes Pump, LLC , 2015 UT 87, ¶ 8, 361 P.3d 91. "Whether a contract exists between parties is ordinarily a question of law,...