Narrative Opinion Summary
In a breach of contract case, Cincinnati Milacron Marketing Company sued The Colonel's, Inc. for rejecting two specially ordered injection molding machines, invoking subject matter jurisdiction under 28 U.S.C. 1332. The U.S. District Court for the Eastern District of Michigan granted summary judgment in favor of Cincinnati, confirming The Colonel's breach under Article II of the UCC, as they did not take possession or accept the machines. The Colonel's argued for the application of Article IX, but the court found Article II applicable. Cincinnati pursued recovery of the price for Machine II under Ohio Revised Code § 1302.83, successfully demonstrating that the machine was identified to the contract and resale was impracticable. Despite attempts to resell Machine II, Cincinnati rebuilt it for another customer, disallowing reconfiguration costs to be charged to The Colonel's. The court ruled that Cincinnati could only recover the contract price without damages or lost profits due to inadequate documentation of costs. The case highlights issues related to breach of contract, seller's remedies, and the applicability of specific UCC provisions. The court deferred the decision on attorney fees and interest to a post-judgment motion.
Legal Issues Addressed
Applicability of Ohio Revised Code Articlessubscribe to see similar legal issues
Application: The court determined that Article II, not Article IX, governs the rights in collateral, as The Colonel's never possessed Machine II, a prerequisite for Article IX application.
Reasoning: The Colonel's contended that ch. 1309 should apply based on a Sale and Security Agreement, but the court disagreed, noting that The Colonel's never possessed Machine II, which is a prerequisite for ch. 1309's application.
Breach of Contract under Article II of the UCCsubscribe to see similar legal issues
Application: Cincinnati Milacron Marketing Company filed a breach of contract claim after The Colonel's rejected specially ordered machines, and the court confirmed the breach under Article II because The Colonel's did not accept or take possession of the goods.
Reasoning: The Colonel's rejected both machines on January 28, 1994, prompting Cincinnati to seek resale of Machine II, which was later advertised at an increased price of $1,618,320 but remained unsold despite nationwide efforts.
Recovery of Costs and Lost Profitssubscribe to see similar legal issues
Application: The court found Cincinnati's documentation of costs inadequate, precluding recovery of reconfiguration costs, and limited recovery to the contract price without damages or lost profits.
Reasoning: The costs incurred by Cincinnati were inadequately documented and could not be calculated using standard methods. Consequently, The Colonel's cannot be held liable for these costs.
Resale of Goods under the UCCsubscribe to see similar legal issues
Application: Cincinnati's attempt to resell Machine II failed, and it was ultimately rebuilt for another customer, failing to satisfy conditions for charging reconfiguration costs to The Colonel's.
Reasoning: Cincinnati did sell what was originally Machine II to fulfill an order from Davidson Textron but did so after completely rebuilding it to meet Davidson's specifications, thereby selling it at a significantly higher price than what The Colonel's had agreed to pay.
Seller's Remedies for Non-Acceptance under Ohio Revised Code § 1302.83subscribe to see similar legal issues
Application: Cincinnati sought to recover the price of Machine II under § 1302.83, which the court allowed by confirming that the machine was identified to the contract and resale was impracticable.
Reasoning: The court determined that Cincinnati had elected to pursue the price remedy under § 1302.83 for the wrongful breach, as indicated in its counter-complaint and a stipulation dismissing other claims.