Opinion ID: 728160
Heading Depth: 2
Heading Rank: 1

Heading: Breach of Contract Issues

Text: 10 In support of its motion for summary judgment, Macpherson stated that it had returned the Model 201 in good faith before the forty-five-day trial period had elapsed and that it was therefore entitled to return of its $35,000 payment. In response to this motion, Brinecell argued that Macpherson failed to return the Model 201 within the 45-day trial period as required by the contract because the shipping invoice was mislabelled. The district court held that Brinecell had violated its duty of good faith by failing to refund Macpherson's $35,000 based on the shipping company's clerical error. 11 We agree with the district court that Brinecell's argument is without merit. Pursuant to the duty of good faith and fair dealing under Utah law, the parties to a contract constructively promise not to intentionally impair the other party's right to receive the fruits of the contract. See St. Benedict's Dev. Co. v. St. Benedict's Hosp., 811 P.2d 194, 199 (Utah 1991). Parties to a sales contract must exercise their express rights in accordance with this over-arching duty. See Utah Code Ann. § 70A-1-203. Macpherson informed Brinecell of the expected return date of the equipment, the exact way-bill number, and the number of the flight carrying the Model 201 from England. The invoice received by Brinecell lists Macpherson as the shipper, the way-bill number and the flight number. Acting in good faith, anyone in Brinecell's place would have known what was contained in the package or, at least, inquired of Macpherson. Brinecell neither accepted the shipment nor contacted Macpherson and offers no excuse for its inaction. This is such a clear breach of the duty to perform the contract in good faith that no reasonable jury could have decided the issue in Brinecell's favor. Therefore, the district court properly entered summary judgment against Brinecell. See Anderson, 477 U.S. at 248, 106 S.Ct. at 2510 (summary judgment may only be averted if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.). 12 We note that the district court could have relied also on Utah Code Ann. § 70A-2-327(1) to resolve this dispute. This section of the Uniform Commercial Code as codified in Utah provides in relevant part: Under a sale on approval unless otherwise agreed ... after due notification of election to return, the return is at the seller's risk and expense.... Utah Code Ann. § 70A-2-327(1). Brinecell does not dispute that the shipping company, not Macpherson, mislabeled the Model 201 as embroidery spare parts. Macpherson properly notified Brinecell of the return and the returned goods arrived within the agreed forty-five-day return period. Pursuant to the Utah Code, Brinecell bore the risk of any shipping errors and has no legal claim under these facts for damages that might result therefrom. 13 On appeal, Brinecell makes two additional arguments which it failed to make below in opposition to Macpherson's motion for summary judgment. Specifically, Brinecell now contends that the terms of the contract are ambiguous and that Macpherson lacked the expertise necessary to properly test the Model 201 before returning it for a refund. We will only briefly address these recently acquired theories. See Farmers Ins. Co. v. Hubbard, 869 F.2d 565, 570 (10th Cir.1989) (This court will generally not address issues that were not considered and ruled upon by the district court. The narrow exceptions to that general rule relate to issues of jurisdiction ... and questions of sovereign immunity.) (citations omitted). As for Brinecell's argument that the contract is ambiguous, Brinecell clearly stated the opposite below, conceding that it did not argue with Plaintiff's statement of facts 1-17. See Aple's Supp.App. at 87 (Opposition to Plaintiff's Motion for Partial Summary Judgment and Memorandum in Support Thereof). Facts 8, 9, and 10 in Macpherson's Memorandum in Support of Partial Summary Judgment describe the terms of the agreement. See Aple's Supp.App. at 22-23 (Memorandum in Support of Plaintiff's Motion for Partial Summary Judgment at iii-iv); see also Aple's Supp.App. at 117 (Order of the district court granting Plaintiff's Motion for Partial Summary Judgment) (The parties are agreed as to the terms of the contract and the right of the plaintiff to return the goods if unsatisfactory within 45 days.) (emphasis added). Brinecell and its counsel run the risk of being sanctioned when they make for the first time on appeal an argument that was specifically abandoned before the district court. See Fed.R.App.P. 38; 28 U.S.C. § 1927. 14 Brinecell's second new argument--that Macpherson lacked sufficient expertise to adequately test the Model 201 prior to returning it--is equally meritless. The parties clearly agreed that Macpherson could return the Model 201 if it was unsatisfied with the outcome of tests it performed during the forty-five-day trial period. No particular tests were required. Of course, Macpherson had a duty to test the Model 201 in good faith. See Utah Code Ann. § 70A-1-203. However, Brinecell conceded in the district court, see Aple's App. at 87 (Brinecell's Opposition to Plaintiff's Motion for Partial Summary Judgment and Memorandum in Support Thereof), that [b]y May 19, 1992--well within the 45 day period--Macpherson had run sufficient tests to discover that the Model 201 was unsuitable for its intended purpose, Aple's App. at 24 (Memorandum in Support of Plaintiff's Motion for Partial Summary Judgment at v). Again, Brinecell should have checked the record for its previous admissions before making such groundless arguments before this court.