Opinion ID: 465055
Heading Depth: 2
Heading Rank: 2

Heading: The Charge for Binding

Text: 16 Printers also employed an outside concern to do its binding, and Professionals challenges the binding markup as unreasonable. The parties disputed both the cost of binding to Printers and the charge for binding to Professionals. With regard to cost, a consultant to Printers identified the cost of binding as $51,992.50. Printers own computer printout states the cost of binding as $66,869.10. However, the invoices presented by the binder to Printers total $71,180.55. The District Court was entitled to find that the invoices were paid in full and that the other figures represent merely internal estimates by Printers. 17 Professionals argues that a cost of $71,180.55 is excessive. It cites estimates from other specialists ranging from $14,292.50 to $30,000.00 for a job of the general type required by Professionals. However, as noted, the binding job was complicated by the need to prepare eight variations of two versions of the Guide and by the need to affix certain materials to the Guide by hand. In view of the complicated nature of the job, the District Court was justified in finding that the fair cost of binding was the cost negotiated by Printers and its binder in an arms-length deal. 18 The charge for binding is difficult to discern from the invoices issued to Professionals. A December 15, 1983, invoice lists the binding charge as $105,797.50. This invoice lists the charge for printing as $135,872.50. The binding and printing charges are combined on the first January 17 invoice as $241,670.00. Subsequently, Printers obtained a reduction in binding cost from the outside binder in the amount of $17,991.25. However, the second January 17 invoice reflects a printing/binding reduction of $62,685.00 and a total combined charge of $178,985.00. It is unclear how much, if any, of the reduction in excess of $17,991.25 is attributable to binding. The April 3 invoice reflects a further combined reduction and a combined printing/binding charge of $160,885.63. 19 Since it is impossible to separate the printing and binding charges after the December 15 invoice, estimates must be made. If we assume, favorably to Professionals, that there was no reduction in binding on the second January 17 invoice except that attributable to the reduction obtained from the outside binder, the printing/binding breakdown would be as follows: $91,178.75 (printing) + $87,806.25 (binding) = $178,985.00. This would make binding 49.1% of the combined printing/binding charge. Multiplying this percentage by the combined April 3 charge of $160,885.63 gives $78,994.84 as the final separate charge for binding. This figure is 11.0% above Printers' cost of $71,180.55. Since 11.0% is very close to the 5-10% range the District Court found as reasonable with regard to markups on outside services, the finding of the District Court on binding charges is not clearly erroneous. 20 Moreover, the same result is reached if we consider the impressionistic evidence before the District Court. Printers' President, Robert Saum, testified that it was his policy to mark up the binding cost about 15%. In the absence of specific binding figures, the District Court was entitled to credit this testimony. It was also entitled to view 15% as sufficiently close to the 5-10% range to be a reasonable markup on binding. This is especially the case where, as noted, the total markup on all services was reasonable and below the total markups on the first two issues of the Guide.