## United States Court of App eals

F O R T H E E I G H T H C I R C U I T

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No. 1 0- 26 12

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Din gx i Lo ng ha i Dai ry , Ltd
., *

* Pl ai nt iff - App el la nt , *

* App eal fro m

th e Uni te d S ta te s

v. * Dis tri ct Co ur t fo r th e

* Dis tri ct of M in ne so ta

. Bec woo d Tec hn ol og y

Grou p L.L.C., *

* [PUBLISHED] Defen da nt - App el le e. *

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Su bm it te d: Feb ru ary 14 , 20 11 Fi le d: Feb ru ary 17 , 20 11

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Befo re LOKEN, MELLOY , and SHEPHERD, Circ ui t J ud ge s.

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PER CURI AM.

Din gx i Lon gh ai Dair y (“ Din gx i” ) ag reed to s h ip 61 2 m et ric to ns of In ul in
, a di et ary fib er ex tra ct , to Bec woo d Tech no lo gy Gro up (“ Bec woo d” ), a Mi nn es ot a di st rib ut or

. The co nt ract cal le d fo r fo ur sh ip m en ts fro m th e po rt of Tian jin -Xin ga ng , Ch in a, to Lon do nd erry, New Ham ps hi re. Bec woo d rece iv ed th e fir st two sh ip m en ts , pa id fo r on e, an d refu se d to pa y fo r th e se co nd be cau se of m ol d on th e ex te rio r of th e
pa ck ag in g. Din gx i reca ll ed th e th ird an d fo ur th sh ip m en ts be fo re th ey reac he d th ei r de st in at io n an d su ed Bec woo d fo r br each of co nt ract an d frau du le nt

m is rep res en ta ti on . The d is tri ct co ur t gran te d Becwo od ’s Rul e 1 2( b) (6 ) m ot io n a nd
di sm is se d Din gx i’s cl ai m s rel at in g to s h ip m en ts th ree an d fo ur

. Nearl y two y earsla te r, th e di st ric t co ur t en te red a fin al or de r gr an ti ng Din gx i s u mm ary jud gm en t on

it s br each -o f-co nt r act cl ai m fo r sh ip m en t two

. Din gx i Lon gh ai Dair y , Ltd

. v. Bec woo d Tech

. Grp
., L.L.C., 71 8 F. Su pp

. 2d 10 19
, 10 24 (D. Mi nn

. 20 10 ). Din gx i

no w ap pe al s th e earl ie r or de r di sm is si ng it s br each -o f-co nt ract cl ai m s fo r sh ip m en ts th ree a nd fou r. W e rev ers e. 1

It is un di sp ut ed th at th e co nt ract was go ve rn ed by th e Uni t e d N at io ns Co nv en ti on on Co nt ract s f o r th e In te rn at io na l Sal e of Goo ds (“ CISG” ), th e

“ in te rn at io na l an a lo gu e” to Arti cl e 2 of th e Uni fo rm Co m m erci al Co de (UCC)

. Ch ic ag o P rime Pac ke rs , I nc . v . No rth am Fo od Trad in g C o., 4 08 F.3d 89 4, 8 98 (7t h
Ci r. 20 05 ). In ap pl y in g th e Co nv en ti on , we lo ok to th e la ng ua ge of it s pr ov is io ns an d
th e “ ge ne ral pr in ci pl es on whi ch it is ba se d.” CISG Art. 7( 2)

. “ Cas el aw in te rp ret in g

an al og ou s pr ov is io ns of Arti cl e 2

. . . m ay al so in fo rm a co ur t whe re th e la ng ua ge of
th e rel ev an t CISG pr ov is io ns tra ck s th at of th e UCC.” Delc hi Carr ie r Sp A v. Ro to rex Co rp ., 71 F.3 d 10 24
, 10 28 (2 d Ci r. 19 95 ). W it h reg ard to pl ead in g req ui rem en ts , “ th e Co nv en ti on ’s st ru ct ur e co nf irms wha t co m

m on se ns e (an d th e co m

m on la w) di ct at e

as th e un iv ers al ele m en ts of [ a br each -o f-co nt ract ] act io n: fo rm at io n, perf or m an ce, br each an d da m ag es .” Mag el la n In t’l Co rp

. v. Sal zg it te r Han de l Gm bH, 76 F. Su pp

. 2d 91 9, 9 24 (N.D. Ill . 19 99 ).

Fo r i t s br each -o f-co nt ract cl ai m , Din gx i’s co m pl ai nt al le ge d th at it ti m el y de li ve red al l fo ur sh ip m en ts “ F.O.B. to Tian jin -Xin ga ng Po rt, Ch in a,” as sp eci fie d in
th e si gn e d p u r c h a se or de r; th at Bec woo d fai le d to pa y fo r th e la st th ree sh ip m en ts ;

an d th at Din gx i was th eref or e en ti tl ed to reco ve r $1 ,41 5,0 86 “ to ge th er wit h in te res t, di sb ur se m en t, co st s, ex pe ns es an d reas on ab le at to rn ey s’ fees .” Und er th e UCC, th is

wou ld pl ai nl y be a § 2-7 09 “ Acti on for th e Pri ce” of th e go od s by th e se ll er. Und er

Din gx i di d no t ap pe al di sm is sa l of it s m is rep res en ta ti on cl ai m s. Acco rd in gl y , 1 th at po rti on of t he pa rti al di sm is sa l o rd er i s af fir m ed

.
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-th e CISG, it was a cl ai m by th e se ll er fo r br each of co nt ract su b je c t t o t h e r e m ed y
pr ov is io ns in Arti cl es 61 -6 5 a nd 74 -7 7. Se e CIS G Art. 6 1( 1)

.

Bec woo d m ov ed to di sm is s t h e cl ai m reg ard in g sh ip m en ts th ree an d fo ur on th e gr ou nd th at a se ll er who reca ll s go od s b e f or e th ey reac h th e bu y er m ay no t

“ reco ve r as da m ag es , ev en if y ou as su m e th at th ere’s a br ea c h fro m th e bu y er, th e

ve ry co nt ract pr ic e of th os e go od s th at th e se ll er ret ai ne d.” The di st ric t co ur t ag reed

. It di sm is se d th e cl ai m on th e gr ou nd th at da m ag es fo ll owi ng co nt ract av oi da nc e are
go ve rn ed by CIGS Art. 76
, an d th eref or e “ Din gx i ha s fai le d to as se rt co g ni zab le
da m ag es on sh ip m en ts 3 an d 4 .” 2

Arti cl e 7 3( 2) of t he CISG p ro vi de s: 2

If on e pa rty’ s fai lu re to pe rfo rm an y of hi s ob li ga ti on s in res pe ct of an y in st al m en t gi ve s th e ot he r pa rty go od gr ou nd s t o co nc lu de th at a fu nd am en ta l br each of co nt ract wil l oc cu r wit h res pe ct t o f u t ur e in st al lm en ts , he m ay de cl are th e co nt ract av oi de d fo r th e f ut ur e, pr ov id ed th at he do es so wit hi n a reas on ab le ti m e.

Thu s, “ av oi da nc e” of a co nt ract un de r Arti cl e 73 (2 ) is an al og ou s t o “canc el la ti on ”

un de r th e UCC. See §§ 2-1 06 (4 ); 2 -6 12 (3 ). Arti cl e 7 6( 1) pro vi de s as to rem ed ie s:

If t he co nt ract is av oi de d a nd th ere i s a c ur ren t p ric e fo r th e g oo ds , th e pa rty cl a i mi n g d a m ag es m ay , if he ha s no t m ad e a pu rch as e or res al e

un de r art ic le 75
, reco ve r th e d i f f e r en ce be twee n th e pr ic e fix ed by th e

co nt ract an d th e cu rren t pr ic e at th e t i me of av oi da nc e as well as an y fu rth er d am ag es reco ve rab le un de r art ic le 74

.

Arti cl e 74 pr ov id es th at da m ag es fo r br each of co nt ract “ co ns is t of a su m eq ua l to th e lo ss , in cl ud in g lo ss of pr of it .” Co m pa re th e se ll er’s rem ed ie s pr ov id ed in UCC §§ 2- 70 3, 2- 70 6, 2- 70 8( 1)
, an d 2- 70 8( 2)
, whi ch are “ es se nt ia ll y cu m ul at iv e in na tu re.” R.E. Dav is Ch em

. Co rp

. v. Dias on ic s, Inc., 8 26 F.2d 67 8, 6 81 -6 85 (7t h C ir. 19 87 ).

-3

-W e can ag ree th at it is hi gh ly un li ke ly -- th ou gh no t in co nc ei v a b le -- th at an

ag gr ie ve d sel le r in th is si tu at io n wou ld reco ve r th e fu ll co nt ract pr ic e fo r sh ip m en ts th ree an d fo ur

. Bu t Bec woo d’s Ru le 1 2 ( b ) ( 6 ) m ot io n to di sm is s th e br each -o fco nt ract cla im

was n on et he le ss il l-c on cei ve d:

The su ffi ci en cy of a pl ead in g is te st ed b y t h e R u le 8( a)(2 )
st at em en t of th e c l a i m fo r rel ie f an d th e de m an d fo r jud gm en t is no t

co ns id ered pa rt of th e cl ai m fo r th at pu rp os e, a s n u mer ou s cas es ha ve he ld

. Thu s, th e se l e c ti on of an im pr op er rem ed y in th e Ru le 8( a)(3 ) de m an d fo r rel ie f wil l no t be fat al to a pa rty’ s pl ead in g if th e st at em en t of th e cl ai m in di cat es th e pl ead er m ay be en ti tl ed to rel ie f of so m e ot he r type.

5 W rig ht & Mi ll er Fed eral Prac ti ce an d Pro ced ur e: Ci vi l 3d § 12 55 at 50 8- 09 (3 d ed

. 20 04 ); se e Bo nt ko wsk i v. Sm it h, 30 5 F.3 d 75 7, 76 2 ( 7 t h C i r

. 20 02 ); Lair d v. In te gr at ed Res ou rces , In c., 89 7 F.2 d 8 2 6
, 8 41 -4 2 (5 th Ci r. 19 90 ); Sch oo no ve r v. Sch oo no ve r, 17 2 F.2 d 52 6, 53 0 (1 0t h Ci r. 1 9 49 ). The am ou nt of da m ag es to be

reco ve red is ba se d u po n t he pro of , no t t he pl ead in gs . See Fed . R. Civ . P. 54 (c).

Und er th e Fed eral Ru le s of Ci vi l Pro ced ur e, “ a co ur t m ay di sm is s a co m pl ai nt

on ly i f it is cl ear th at no rel ie f co ul d be gr an te d un de r an y se t of fact s th at co ul d be

pr ov ed co ns is te nt wit h th e al le ga ti on s.” Swie rk ie wicz v. So rem a N.A., 53 4 U.S. 50 6,
51 4 (2 00 2 ) ( e m

ph as is ad de d; qu ot at io n om it te d)

. Here, Din gx i’s co m pl ai nt st at ed

a b r e ach -o f-co nt ract cl ai m -- pe rfo rm an ce of it s co nt ract ua l du ty to de li ve r an d th e bu y er’s refu sa l to pa y

. A fact ou ts id e th e pl ead in g be cam e pa rt of th e Ru le 12 reco rd
, ap pa ren tl y wit ho ut ob

jecti on -- th at Din gx i reca ll ed sh ip m en ts th ree an d fo ur be fo re th ey reac he d th e bu y er. Th a t f a c t wil l li ke ly pr ecl ud e reco ve ry of th e fu ll co nt ract

pr ic e. Bu t if Din gx i pr ov es th at Bec woo d br each ed th e co nt ract as to sh ip m en ts th ree

an d fo ur , it is al m os t cert ai n to be en ti tl ed to so me m on et ary rel ie f. Acco rd in gl y , th e di st ric t co ur t er red in gra nt in g B ecwo od ’s Rul e 1 2( b) (6 ) m ot io n t o d is m is s.

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-The or de r di sm is si ng Din gx i’s br each -o f-co nt ract cl ai m s rel at in g to sh ip m en ts

th ree an d fo ur is r e ve rs ed

. The cas e is rem an de d fo r fu rth er pr oc eed in gs no t in co ns is te nt wit h th is op in io n, whi ch m ay in cl ud e th e m at te r rai se d in D i ng xi ’s

m ot io n to th is co ur t fo r le av e to as k t h e d i s t ric t co ur t to m od ify it s or de r gr an ti ng

su m m ary

jud gm en t on sh ip men t t w o. As th e cas e is no w r em an de d, th at m ot io n is de ni ed as

m oo t. See In r e Mo de rn Text il e, In c., 90 0 F .2d 11 84 , 11 93 (8t h C ir. 1 99 0)

.

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