Tiffany Inc. v. W. M. K. Transit Mix, Inc.

• Decision Date: 09 February 1972
• Docket Number: CA-CIV,No. 1,1
• Citation: 493 P.2d 1220,16 Ariz.App. 415
• Parties: , 56 A.L.R.3d 1028, 10 UCC Rep.Serv. 393 TIFFANY INCORPORATED, an Arizona corporation, Appellant, v. W.M.K. TRANSIT MIX, INC., a corporation, Appellee. 1595.
• Court: Arizona Court of Appeals

Page 1220

493 P.2d 1220

16 Ariz.App. 415, 56 A.L.R.3d 1028, 10 UCC Rep.Serv. 393

TIFFANY INCORPORATED, an Arizona corporation, Appellant, v. W.M.K. TRANSIT MIX, INC., a corporation, Appellee.

No. 1 CA-CIV 1595.

Court of Appeals of Arizona, Division 1, Department A.

Feb. 9, 1972.

Rehearing Denied March 6, 1972.

Review Denied April 18, 1972.

Cunningham, Goodson, Tiffany & Weltsch, Ltd., by Michael E. Tiffany, Phoenix, for appellant.

Ryley, Carlock & Ralston, by Joseph P. Ralston and James D. O'Neil, Phoenix, for appellee.

DONOFRIO, Judge.

This is an appeal from a summary judgment entered in favor of appellee, W.M.K. Transit Mix, Inc. (herein referred to as defendant) and against appellant, Tiffany Incorporated (herein referred to as plaintiff).

The following are the facts viewed in a light most favorable to plaintiff, the party opposing the summary judgment. Rule 56(c), Rules of Civil Procedure, 16 A.R.S.; Sarti v. Udall, 91 Ariz. 24, 369 P.2d 92 (1962); Lawless v. Ennis, 3 Ariz.App. 451, 415 P.2d 465 (1966).

On June 14, 1968, plaintiff submitted a bid proposal to the Arizona State Highway Commission to furnish all necessary labor and materials to perform and complete the work on the Davis Dam-Kingman Highway project. This project called for a reconditioning process, consisting of an asphaltic solution application applied to the existing roadway and chips imbedded thereon, providing a new wearing surface for the roadway. On June 17, 1968, the State Highway Commission accepted plaintiff's bid, and on June 24, 1968, plaintiff entered into a contract with the State, through the State engineer, to perform the work on the project.

Prior to submitting its bid plaintiff requested a quote from defendant for the price defendant would supply the chips for the project. This request was made by telephone to defendant's Kingman plant. The price given over the telephone was $3.50 per ton f.o.b. the Kingman plant. After plaintiff received the bid for the project it notified defendant by letter that plaintiff was the successful bidder and ordered 3100 tons of type C sealcoat chips. Thereafter plaintiff received a letter from defendant stating that there had been a 'mix-up' on the quote given over the telephone by the office girl as she had no way of knowing what the Arizona Highway Department specifications were, and that her quote was for 3/8 pea gravel, not type C sealcoat chips. The letter further stated that defendant could not supply type C sealcoat chips which, according to Arizona Highway Department specifications, must have a certain percentage of fractured faces on each chip produced by crushing, as it had no rolls for its crusher.

When defendant failed to supply the sealcoat chips, plaintiff was required to purchase the material from another supplier at a higher price. In addition, this supplier had a low production of sealcoat chips, and as a consequence plaintiff did not complete the work on time and was required to pay a penalty to the Arizona Highway Department as specified in its contract.

Plaintiff subsequently brought this suit, which was captioned in its complaint as 'contract-estoppel'. Defendant alleged as its defense that the oral contract was unenforceable because of the Statute of Frauds and filed a motion for summary judgment which was granted by the trial court.

Plaintiff alleges on appeal that the trial court erred in granting defendant's motion for summary judgment as there were disputed issues of fact which could, if true, affect the final judgment. Plaintiff's allegations are based mainly on two theories: (1) that the Statute of Frauds was satisfied, and (2) if the Statute of Frauds was not satisfied, the theory of estoppel, which plaintiff relied on, establishes a defense to the Statute of Frauds.

We recognize that the law in Arizona is that it is improper to grant a motion for summary judgment if on an examination of the entire record it is found that any disputed fact issue exists which could, if true, affect the final judgment. Elson Development Co. v. Arizona Savings & L. Ass'n, 99 Ariz. 217, 407 P.2d 930 (1965); Arizona Coffee Shops v. Phoenix Downtown Park. Ass'n, 95 Ariz. 98, 387 P.2d 801 (1963); Sarti v. Udall, supra. With this pronouncement in mind, we will review the theories raised by plaintiff which we find determinative of this appeal.

First, plaintiff contends that the alleged oral contract was removed from the defense of the Statute of Frauds by A.R.S. § 44--2308, subsec. B.

A.R.S. § 44--2308, subsec. A provides:

'Except as otherwise provided in this section, a contract for the sale of goods for the price of five hundred dollars or more is not enforceable by way of action or defense unless there is some writing sufficient to indicate that a contract for sale has been made between the parties and signed by the party against whom enforcement is sought or by his authorized agent or broker. A writing is not insufficient because it omits or incorrectly states a term agreed upon but the contract is not enforceable under this subsection beyond the quantity of goods shown on such writing.'

Plaintiff does not allege that there is any 'writing sufficient to indicate that a contract for sale has been made' and relies on A.R.S. § 44--2308, subsec. B. That section provides:

'Between merchants if within a reasonable time a writing in confirmation of the contract and sufficient against the sender is received and the party receiving it has reason to know its contents, it satisfies the requirements of subsection A against such party unless written notice of objection to its contents is given within ten days after it is received.'

This statute was recently discussed in the Arizona Law Review. The article stated:

'The Code solves a problem which often arose under prior law when an honest business man would confirm, by letter, an oral contract made by telephone. The Uniform Sales Act precluded the signer of such a letter of confirmation from invoking the Statute of Frauds but not the recipient who could sit back and watch the market conditions and declare the contract enforceable or unenforceable as he wished. Under subsection (2) (44--2308B), when a letter of confirmation is employed Between merchants, the recipient must give Written notice of objection within ten days after receipt or he is precluded from setting up the Statute of Frauds. Thus, before incurring expense in performance of what may be an unenforceable agreement, either party may forward a conformatory memorandum to the other party which, if not objected to in writing, is sufficient to satisfy the Statute of Frauds. Buyers and sellers should confirm all oral contracts by letter and should reply immediately (accepting or rejecting) upon receipt of such memoranda from the other party.' (Emphasis theirs.) Staff, An Introduction to the Uniform Commercial Code, 9 Ariz.L.Rev. 216, at 221 (1967).

The written confirmation was sent to defendant by plaintiff on July 11, 1968, and received by defendant on July 15, 1968. Defendant sent its response, rejecting the confirmation on July 25, 1968, and the plaintiff received it on July 29, 1968. To determine whether defendant's objection was timely it is necessary to analyze A.R.S. § 44--2308, subsec. B. The statute says written notice of objection must be given within ten days after it is received. A.R.S. § 44--2208, subsec. 26 states:

'A person 'notifies' or 'gives' a notice or notification to another by taking such steps as may be reasonably required to inform the other in ordinary course whether or not such other actually comes to know of it. A person 'receives' a notice or notification when:

(a) It comes to his attention; or

(b) It is duly delivered at the place of business through which the contract was made or at any other place held out by him as the place for receipt of such communications.'

Further, Official Comment No. 26 to U.S.C. § 1--201, which is A.R.S. § 44--2208, states:

"Notifies.' New. This is a word used when the essential fact is the proper dispatch of the notice, not its receipt. Compare 'send.' When the essential fact is the other party's receipt of the notice, that is stated. The second sentence states when a notification is received.'

Thus, the defendant gave its written notice of objection upon mailing its letter July 25, 1968. It is necessary to compute the time between when defendant received the confirmation on July 15, 1968, and the time defendant sent the objection on July 25, 1968. If July 15, 1968, the day defendant received the confirmation, is counted in computing the ten-day requirement, the rejection was not timely. If July 15, 1968, is not counted, the rejection was timely. A.R.S. § 44--2308 is silent as to the computation of time specified in this statute. A.R.S. § 1--243, which is in Article 3, Effect of Statutes, states:

'The time in which an act is required to be done shall be computed by excluding the first day and including the last day, unless the last day is a holiday, and then it is also excluded.'

Defendant's objection was thus timely, having been mailed on the tenth day.

Plaintiff's second theory to be asserted as a basis for the reversal of the summary judgment granted by the trial court is the theory of promissory and equitable estoppel. Defendant argues that the only theory of estoppel plaintiff relied on in the trial court was the theory of equitable estoppel; that there is a difference between equitable and promissory estoppel; and that plaintiff is precluded from raising the theory of promissory estoppel on appeal as it was not first raised in the trial court. After reviewing the record we find that plaintiff captioned his amended complaint as a contract-estoppel action, and affirmatively plead estoppel. The rule is generally that estoppel, whether the basis of a claim or a defense, must be specially plead. Conolly v. Great Basin Insurance Company, 6 Ariz.App. 280, 431 P.2d 921 (1967); Munger v. Boardman, 53 Ariz. 271,...