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ORDER - 1

UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF WASHINGTON

AT SEATTLE

WEYERHAEUSER COMPANY, INC.,

Plaintiff,

v.

 ACCURATE RECYCLING CORP.,

Defendant.

No. C06-922 MJP

ORDER ON MOTIONS FOR

SUMMARY JUDGMENT

This matter comes before the Court on the parties’ motions for summary judgment. (Dkt.

Nos. 44, 47, 48.) After reviewing the motions, the parties’ responses (Dkt. Nos. 51, 53, 55), the

parties’ replies (Dkt. Nos. 56, 58), all documents submitted in support thereof, and after hearing oral

argument by the parties, the Court DENIES Defendant’s motions for summary judgment and DENIES

in part and GRANTS in part Plaintiff’s motion for partial summary judgment. 

Background

This case involves disputes over two contracts Plaintiff Weyerhaeuser Company, Inc.

(“Weyerhaeuser”) entered into with Defendant Accurate Recycling Corp. (“Accurate”) for the

purchase of recyclable materials (“OCC”). A contract signed in July 2005 stated that Weyerhaeuser

would purchase from Accurate all the OCC generated by Pathmark grocery stores (the “Pathmark

Contract”). (Dkt. No. 55, Ex. 1.) A contract signed in August 2005 stated that Weyerhaeuser would

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ORDER - 2

purchase from Accurate a set tonnage of OCC generated at Accurate’s Lansdowne Plant (the

“Lansdowne Contract”). (Dkt. No. 55, Ex. 2.) Both Contracts stated that Weyerhaeuser was under

no obligation to purchase OCC which did not meet certain quality specifications and included a clause

stating that the Contract could only be modified by a writing signed by both parties. 

After the closing of its Plymouth mill in November 2005, Weyerhaeuser communicated to

Accurate that it could no longer process the Pathmark and Lansdowne OCC and that it was

considering a force majeure defense to invalidate both contracts. (Dkt. No. 55, Ex. 5.) On December

29, 2005, Accurate sent a “notice of default” to Scott Engstrom stating its belief that Weyerhaeuser

was obligated to maintain both the Pathmark and Lansdownde contracts despite the mill shutdown. 

(Id.) After oral communications between the parties in January and February 2006, Weyerhaeuser

employee Scott Engstrom drafted an amendment to the Pathmark Contract which both parties signed

on February 9, 2006. (Dkt. No. 55, Ex. 7.) The amendment lowered the contract price for OCC and

reduced the Pathmark contract by one year, making it a two year contract instead of three. (Id.) The

amendment made no mention of the Lansdowne Contract. (Id.) 

On February 13, 2006, Weyerhaeuser closed its Plymouth mill. Weyerhaeuser continued to

purchase the Pathmark OCC from Accurate but instead of processing the OCC itself, Weyerhaeuser

sold the OCC to Recycled Fibers which processed the OCC in its U.S. Gypsum mill. Sometime in the

beginning of March, employees of the Gypsum mill began complaining of the quality of Pathmark’s

OCC alleging that it was contaminated with wax and could not be processed. (See Dkt. No. 55, Ex.

10.) After a series of email exchanges on the wax issue, Weyerhaeuser informed Accurate that it

needed to decrease the amount of OCC purchased from Pathmark and would no longer accept OCC

from Pathmark’s KDC and AMA distribution centers. (Dkt. No. 55, Exs. 12-18.) Weyerhaeuser

continued to receive and process OCC from Pathmark’s third distribution center, the Blair Road

location. (Dkt. No. 55, Ex. 9 at 70.) Sometime in April 2007, the Gypsum mill was no longer

reporting problems with wax. (Dkt. No. 55, Ex. 9 at 78.) 

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ORDER - 3

After Weyerhaeuser notified Accurate that it would not purchase OCC from Pathmark’s KDC

and AMA locations, Accurate began selling that OCC to Visy Paper for a price lower than that

contained in the Pathmark Contract. (Def. Mot. for Summ. J. Re: July 2005 Contract at 9.) Accurate

concluded that Weyerhaeuser had breached the Pathmark contract in refusing to purchase the AMA

and KDC OCC and sent Weyerhaeuser a notice of default on June 1, 2006. (Dkt. No. 47, Ex. 8.) 

Weyerhaeuser responded with its own notice of default on June 13, 2006 alleging that Accurate had

breached the Contract by failing to meet the quality standards and minimum required tonnage set out

in the Contract. (Dkt. 47, Ex. 9.) 

After Weyerhaeuser’s Plymouth mill closed on February 13, 2006, Weyerhaeuser did not

purchase any Lansdowne OCC from Accurate; instead, Accurate sold the Lansdowne OCC to Visy

Papers. On March 14, 2006, Accurate’s President David Lasensky sent an email indicating an agreed

rescission of that Contract: “The conclusion Scott [Engstrom] and myself agreed to, was to allow

Weyerhaeuser to negate the Lansdowne contract and likewise, reduce the Pathmark contract by one

(1) year.” (Dkt. No. 59, Ex. B.) On June 1, 2006, Accurate sent Weyerhaeuser written notice that it

was in breach of the Lansdowne agreement. (Dkt. No. 59, Ex. L.) 

Weyerhaeuser filed this action alleging that Accurate breached the Pathmark Contract when it

failed to supply OCC meeting the quality standards set out in the Contract. (Dkt. No. 1.) Accurate

responded with a counter-claim alleging that Weyerhaeuser breached both the Pathmark and

Lansdowne Contracts. (Dkt. No. 17.) Both parties have filed motions for summary judgment. Rule

56(c) provides, in part, that summary judgment is appropriate if “the pleadings, depositions, answers

to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no

genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of

law.” Fed. R. Civ. P. 56(c) (2003). While “some alleged factual dispute between the parties will not

defeat” a motion for summary judgment, “disputes over facts that might affect the outcome of the suit

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ORDER - 4

. . . will properly preclude the entry of summary judgment.” Anderson v. Liberty Lobby, Inc., 477

U.S. 242, 247-48 (1986). 

I. Accurate’s Motion for Summary Judgment Regarding the Pathmark Contract

Two provisions from the Pathmark Contract are relevant to this analysis. Section Five of the

Contract requires that all delivered OCC meet certain quality specifications and states that

Weyerhaeuser is not obligated to purchase OCC which does not. (Dkt. No. 52, Ex. A at 5.) Section

Fourteen details the Contract’s Default Provision, allowing a party thirty days to cure a non-monetary

breach of the agreement after receiving written notification that it has defaulted. (Dkt. No. 52, Ex. A

at 6.) Accurate asserts that it did not breach the Pathmark Contract because it cured the problem of

wax-contaminated OCC within thirty days of notification.

There is an issue of material fact as to when Weyerhaeuser gave Accurate written notice that

the Pathmark OCC did not comply with the quality standards in the Contract. Accurate argues that

Weyerhaeuser did not provide written notice of default until June 13, 2006. Weyerhaeuser claims that

it provided written notification by email in March 2006.

The record does not clearly indicate when Accurate first received notification that the OCC

from Pathmark was contaminated with large quantities of wax. In an email dated March 7, 2006 a

Weyerhaeuser employee, Russell Spencer, notified an Accurate employee, Jenny Laut, that he and the

manager of the Gypsum mill had decided upon an approach to dealing with the wax problem. (Dkt.

No. 52, Ex. B.) This email does not introduce the problem to Ms. Laut and thereby suggests that

Accurate had been previously informed of the wax issue. 

Neither does the record clearly indicate when the problem of wax contaminated OCC was

resolved. Accurate relies on the deposition testimony of Weyerhaeuser employees Brian Heckel and

Scott Engstrom in asserting that the wax problems were cured by April 7, 2006, “one month from the

date of the first complaint.” (Def.’s Mot. Re: July 2005 Contract at 7.) The evidence is not as clear as

Accurate contends. The testimony of Mr. Heckel states only that “[w]e can certainly presume and

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ORDER - 5

assume that the wax problem ended, if not [on April 7th,] close to that time frame.” (Dkt. No. 47, Ex.

3 at 78.) Mr. Heckel’s testimony merely states that the problem was solved sometime after mid-April

2006. (Dkt. No. 47, Ex. 7 at 55.) 

Finally, there is an issue of material fact as to whether Accurate was responsible for curing the

breach. Accurate claims that the wax problems were cured by April 7, 2006 but Weyerhaeuser

attributes that result to its decision to discontinue the processing of OCC from the KDC and AMA

Pathmark locations. Weyerhaeuser had no obligation to purchase OCC from Accurate which did not

meet the quality specifications required by the contract. If Weyerhaeuser’s decision to reject the OCC

from Pathmark’s KDC and AMA locations resolved the wax problem, then Accurate cannot be said to

have cured its breach of the Contract.

II. Accurate’s Motion for Summary Judgment Regarding the Lansdowne Contract

Accurate asks the Court to decide as a matter of law that Weyerhaeuser is in breach of the

Lansdowne Contract. Weyerhaeuser has not purchased any Lansdowne OCC since February 13,

2006, the day Weyerhaeuser’s Plymouth mill closed. 

 Weyerhaeuser asserts that it made an oral agreement with Accurate to rescind the Lansdowne

Contract in February 2006. Section 17(h) of the Contract states that it can only be modified in a

writing signed by the parties and no such written modification exists. However, both Weyerhaeuser

and Accurate altered their performance after February 13, 2006 and ceased operating under the terms

of the Lansdowne Contract. Weyerhaeuser stopped receiving the Lansdowne OCC and Accurate

found another purchaser for it. 

 An attempt at rescission which does not satisfy a contract’s signed writing requirement may

operate as a waiver. RCW 62A.2-209(4). Washington contract law recognizes a waiver as "the

intentional and voluntary relinquishment of a known right." Jones v. Best, 134 Wn.2d 232 (Wash.

1998). There is a genuine issue of material fact as to whether such a waiver was effected because the

parties contest the substance of the oral agreement between David Lasensky and Scott Engstrom. 

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ORDER - 6

Accurate asserts that Mr. Lasensky “did have discussions with Mr. Engstrom about releasing

Weyerhaeuser from the Lansdowne Contract in exchange for a favorable negotiation of the Pathmark

Contract” but that, ultimately, Accurate never agreed to the release. Lasensky Decl. at 2 ¶ 7. 

Weyerhaeuser gives an opposite account of the facts. Until the facts are resolved, the issue cannot be

decided as a matter of law. 

III. Weyerhaeuser’s Motion for Partial Summary Judgment

Weyerhaeuser seeks summary judgment on four of Accurate’s claims for damages. 

1. Damages from Alleged Losses Related to Sears, Home Depot and K-Mart

 Accurate stipulates to forego its damages regarding K-Mart, Home Depot and Sears. (Dkt.

No. 55 at 3.)

2. Damages for the Alleged Loss of the Pathmark Relationship Beyond June 30, 2007

Weyerhaeuser asks the Court to limit Accurate’s damage claims under the Pathmark Contract

to the terms of the February amendment reducing the length of the Contract from three years to two. 

Weyerhaeuser’s motion on this point is granted. 

Accurate argues that it only agreed to the modification in an attempt to mitigate damages it

would suffer if Weyerhaeuser breached the Contract altogether. Because Weyerhaeuser was not in

breach of the Contract on February 9, 2006 when the amendment was signed, the doctrine of

mitigation of damages does not apply to Accurate’s actions. Instead, Accurate waived its right to

enforce the original Contract when it signed the February 9th amendment modifying the Pathmark

Contract. 

The written amendment comports with Section 17(h) of the Contract which requires that any

modification be contained in a writing signed by both parties. An agreement modifying a contract

does not need any consideration to be binding. RCW 62A.2-209(1). The February 9, 2006

amendment to the Pathmark Contract was properly executed and is binding on the parties, therefore 

Accurate cannot seek damages under the Pathmark Contract beyond June 30, 2007. 

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ORDER - 7

3. Damages Resulting from Weyerhaeuser’s Diversion of the KDC and AMA OCC

In March 2006, Weyerhaeuser and Accurate communicated by email about Pathmark’s waxcontaminated OCC and the Gypsum Mill’s inability to process it. (Dkt. No. 55, Ex. 12, Ex. 13, Ex.

14.) On March 17, 2006, Mike Carey of Accurate sent a proposal to Weyerhaeuser suggesting that

Accurate would take on the responsibility for marketing the AMA and KDC OCC if Weyerhaeuser

would agree to pay Accurate $2.50 per ton until the expiration of the Pathmark Contract. (Dkt. No.

55, Ex. 15.) Weyerhaeuser did not sign the proposal. On Wednesday, March 21, 2006, Mr. Heckel

sent an email to Mike Carey of Accurate:

Per our telephone conversation today we confirm the following:

Pathmark’s KDC and AMA locations will be serviced by Accurate Recycling

effective Monday, March 27, 2006. Weyerhaeuser will no longer have any

contractual obligations to service these two locations. Weyerhaeuser will continue

to service Pathmark’s Blair Road location as per the terms of our contract with

Accurate Recycling. 

Weyerhaeuser agrees to pay Accurate the contractual pricing for material shipped

from the KDC and AMA prior to March 27th, 2006.

Please review and reply via return email your confirmation of these terms. 

(Dkt. No. 55, Ex. 17.) There is no evidence in the record that Mr. Carey ever responded directly to

this email. Instead, in a separate email string, Mr. Heckel of Weyerhaeuser sought confirmation from

Mr. Carey that “Accurate will be taking over the servicing of Pathmark’s KDC and AMA locations

effective Mon. March 27.” (Dkt. No. 55, Ex. 18.) Mr. Carey responded on March 24, 2006 and

stated that “it is my intent to start hauling the AMA and KDC locations directly with Accurate trucks

starting Monday March 27th, 2006. I am waiting for the final approval from Pathmark.” (Id.) 

Weyerhaeuser asserts that these communications constitute a written modification to the

Pathmark Contract. Accurate argues that Weyerhaeuser made a unilateral decision to divert the KDC

and AMA tonnage from Gypsum in violation of its contractual obligations and insists that it undertook

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ORDER - 8

efforts to secure an alternative contract for the KDC and AMA location only as part of its duty to

mitigate the damages caused by Weyerhaeuser’s breach. 

The Pathmark Contract states that the Contract can only be modified “in writing signed by the

parties.” (Dkt. No. 55, Ex. 1.) While there is no evidence of a signed writing releasing Weyerhaeuser

from its contractual obligation to purchase the KDC and AMA OCC, it is not clear whether the parties

came to an oral agreement on the issue. The Washington UCC states that an attempted modification

which does not satisfy a contract’s signed writing requirement may operate as a waiver. RCW 62A.2-

209(4). Both Weyerhaeuser and Accurate modified their performance after the oral and written

communications relayed above. Weyerhaeuser ceased purchasing and servicing the KDC and AMA

OCC and Accurate contracted with Visy Paper for the purchase and processing of that OCC. If it is

found that the parties did reach an oral agreement, the Contract’s signed writing provision should not

limit “the legal effect of the parties’ later conduct.” RCW 62A.2-209, Comment 4. Whether the

parties’ communications and subsequent conduct constitute Weyerhaeuser’s release from its obligation

to service Pathmark’s KDC and AMA OCC is an issue of fact and cannot be decided as a matter of

law. 

4. Damages Under the Lansdowne Contract

As stated above, there is an issue of material fact as to whether Accurate waived its rights

under the Lansdowne contract. Weyerhaeuser’s motion asking the Court to deny Accurate damages

under the Contract is denied as the issue cannot be decided on summary judgment. 

Conclusion

 The Court DENIES Defendant’s motions for summary judgment because there are issues of

fact which must be determined before the Court can make a legal finding. The Court GRANTS

Plaintiff’s motion for summary judgment on the issue of damages under the Pathmark Contract:

Accurate will be bound to the written amendment to that Contract and cannot seek damages beyond

June 30, 2007. The Court DENIES Plaintiff’s motion for summary judgment on the issues of damages

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ORDER - 9

resulting from diversion of the KDC and AMA OCC and damages under the Lansdowne Contract

because there are issues of fact unresolved. 

The Clerk is directed to send copies of this order to all counsel of record.

Dated: November 21, 2007.

AMarsha J. Pechman

U.S. District Judge

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