Stanfill v. TAT (U.S.A.) Corp.

• Decision Date: 10 January 1986
• Citation: 709 P.2d 717,76 Or.App. 332
• Parties: , 42 UCC Rep.Serv. 446 Virginia A. STANFILL, individually and as personal representative of the Estate of Edwin J. Stanfill, deceased, Respondent, v. TAT (U.S.A.) CORP., a Washington corporation, Appellant, Clyde Davis, Thomas Wagner, and Good Earth, Inc., a Washington corporation, Respondents, Orville Pack, Defendant. 82-4-383; CA A31133.
• Court: Oregon Court of Appeals

Page 717

709 P.2d 717

76 Or.App. 332, 42 UCC Rep.Serv. 446

Virginia A. STANFILL, individually and as personal representative of the Estate of Edwin J. Stanfill deceased, Respondent, v. TAT (U.S.A.) CORP., a Washington corporation, Appellant Clyde Davis, Thomas Wagner, and Good Earth, Inc., a Washington corporation, Respondents Orville Pack, Defendant.

82-4-383; CA A31133.

Court of Appeals of Oregon.

Argued and Submitted May 17, 1985.

Decided Nov. 14, 1985.

Reconsideration Denied Jan. 10, 1986.

W. Eugene Hallman, Pendleton, argued the cause for appellant. With him on briefs were Mautz & Hallman, Pendleton, and James F. McAteer, and Lenihan, Ivers & McAteer, Seattle, Washington.

Jas. Jeffrey Adams, Portland, argued the cause for respondents Stanfill, Davis and Good Earth, Inc. On brief were Michael A. Lehner and Mitchell, Lang & Smith, Portland.

Harold A. Fabre, Pendleton, argued the cause and filed brief for respondent Wagner.

Before RICHARDSON, P.J., and WARREN and YOUNG, JJ.

WARREN, Judge.

This appeal by defendant TAT (U.S.A.) Corporation (TAT), presents issues of contract damages, admission of evidence and which party prevailed at trial. Plaintiff, seller, brought this action against TAT for breach of a contractual obligation to purchase export quality logs. TAT counterclaimed, alleging mistake, misrepresentation and breach of contract. TAT also alleged that defendants Davis and Wagner were plaintiff's partners in the logging operation.

In a special verdict, the jury accepted plaintiff's claim, rejected each of TAT's claims and also rejected TAT's partnership allegations. The jury also found plaintiff's damages to be $204,915.69. However, because TAT had advanced plaintiff $350,000 under the contract, and because plaintiff had conceded that the advance was due TAT regardless of the outcome of this action, a net judgment of restitution was entered for TAT. Nevertheless, the court concluded that plaintiff was the prevailing party and awarded her attorney fees under the contract.

TAT first contends that plaintiff was not entitled to recover lost profits under ORS 72.7080(2). ¹ Lost profits may be recovered if the market price-contract price measure of damages in ORS 72.7080(1) would not put the aggrieved seller in as good a position as performance would have done. Thus, beneficiaries of the lost profits measure are typically lost volume sellers, jobbers and manufacturers of uncompleted goods. White and Summers, Handbook of the Uniform Commercial Code, §§ 7-10 (2d ed 1980). However, a seller may also recover lost profits when there is no existing market in which the seller could mitigate damages. Such a market is equivalent to no market. Timber Access Ind. v. U.S. Plywood, 263 Or. 509, 525, 503 P.2d 482 (1972). ²

TAT argues that a market existed for export timber at the time and place of tender; it notes that even plaintiff's counsel provided detail on the market price for export timber. However, the evidence supports the conclusion that, although there may have been a market for export timber at the time and place of tender, it was not well established and was rapidly failing and vanishing. On that evidence, it was a question of fact whether there was a market against which to measure damages. The evidence would justify an award of damages under either ORS 72.7080(1) or (2), and there was no error in submitting both measures to the jury. ³

TAT next maintains that plaintiff's lost profits calculation was erroneous, because it failed to credit proceeds from the resale of some of the export quality logs. ORS 72.7080(2) requires, in the lost profits calculation, "due credit for payments or proceeds of resale."

The evidence established that plaintiff received approximately $14,000 from the resale. It does not follow, however, that defendant is automatically entitled to a credit against the lost profits calculation for the proceeds of the resale under the facts of this case. We will assume that, in the absence of other facts, all of the proceeds of the resale were required to be credited against lost profits, unless there was a showing that some part was not "due." The jury was provided with evidence of the proceeds of resale, evidence of the cost of producing the logs resold and evidence that the proceeds went into an escrow account and were distributed to the parties pursuant to the escrow instructions. The parties do not contend that the proceeds were not distributed properly under those instructions. On this record, we cannot say that any proceeds were due the buyer after distribution pursuant to the escrow instructions. Moreover, the trial court instructed the jury to credit against lost profits any proceeds from the resale that it found were due. No exception was taken to the jury instructions, and from the verdict it appears that the jury found nothing due. TAT points to nothing in the record which would permit us to hold that that was an impermissible findings.

TAT's third argument is that the court erred in denying its motion to limit damages to $66,272.00. As noted above, TAT contracted with plaintiff to purchase logs of export quality. Because different parts of the same tree will generally produce logs of export and domestic quality, the parties anticipated simultaneous logging and marketing of the export and domestic quality timber. It was also fully understood that, although the export quality logs would be sold to TAT for a profit, the domestic logs would necessarily be sold to third parties at a loss.

The damage award reflected lost profits on the export quality timber. TAT does not dispute that profits were lost because of its breach. Nevertheless, TAT contends that the court erred in not requiring plaintiff to take into account losses it did not suffer because, as a result of the breach, it did not sell the domestic logs. TAT's contention is grounded in the principle that all contractual remedies provided for by the Uniform Commercial Code seek the end that the aggrieved party be put in as good a position as if the other party had fully performed, but no better. ORS 71.1060(1). However, the contract between plaintiff and TAT was for export quality timber only. Other than a fifty dollar per thousand stumpage credit about which there is no dispute, TAT had no legitimate interest with respect to plaintiff's disposition of the domestic quality timber, whether at a profit or a loss. Thus, the court did not err in denying TAT's motion to limit damages. ⁴

The next issue is whether the trial court erred in allowing the introduction of documentary and testimonial evidence which suggested that TAT's actions had caused plaintiff's husband to die during the pendency of this litigation. TAT argues that the introduction of that evidence enabled plaintiff to turn an action for breach of contract into an action for wrongful death. Defendant objected to the document on the grounds that it contained irrelevant and prejudicial matter. However, because the document also contained relevant and non-prejudicial evidence, and the objection was to the document as a whole, it was not error to overrule the objection. Meislahn v. Demorest, 48 Or.App. 631, 617 P.2d 322 (1980). Further, because the document was properly admitted, no separate claim of error can be made that it was read to the jury.

TAT finally contends the trial court erred in concluding that plaintiff was the prevailing party and awarding her attorney fees as...