Opinion ID: 732214
Heading Depth: 2
Heading Rank: 2

Heading: Additional Operating Costs

Text: 27 The district court awarded Savage Industries $116,484.93 in damages for additional operating costs incurred as a result of American Pulverizer's failure to refurbish the double roll crusher by November 8, 1993. American Pulverizer contends the district court's award of additional operating costs was clearly erroneous because Savage Industries did not establish these costs were proximately caused by American Pulverizer's breach of the October 1993 contract. We disagree. 28  'Recovery of damages for a breach of contract is not allowed unless acceptable evidence demonstrates that the damages claimed resulted from and were caused by the breach.'  Highland Constr. Co. v. Union Pac. R.R. Co., 683 P.2d 1042, 1047 (Utah 1984) (quoting Boyajian v. United States, 423 F.2d 1231, 1235 (Ct.Cl.1970)). The costs must be tied to the fault of the defendant, id., and a plaintiff may only recover those costs directly attributable to the defendant's breach. Boyajian, 423 F.2d at 1235 (citing Saddler v. United States, 287 F.2d 411 (Ct.Cl.1961). 29 Here, the October 1993 contract called for the installation of a closed loop Zeigler System which would recirculate oversized material back through a refurbished double roll crusher until the material was reduced to the specified size. One of the main reasons the parties contracted for the Zeigler System was to eliminate the expense of having to use a front-end loader to move oversized material back into the system for crushing. The October 1993 contract required American Pulverizer to [r]efurbish the Double Roll Crusher to meet OEM standards [by] November 8, 1993. American Pulverizer explicitly represented in the contract the refurbished double roll crusher would produce 175 tons per hour of crushed product, with at least 85% of the finished crushed product being 1/4 inch or less. 30 The record in this case clearly reveals American Pulverizer breached its contract with Savage Industries by failing to refurbish the double roll crusher. At trial, in support of its claims for damages, Savage Industries presented testimony from Shawn Reddington, Savage Industries' Project Manager for the Sunnyside Cogeneration Project. According to Mr. Reddington, a mountain of oversized material continued to build-up following American Pulverizer's failure to refurbish the double roll crusher. Mr. Reddington testified Savage Industries was compelled to expend additional operating expenses in order to handle this growing stockpile of oversized material. Specifically, Savage Industries brought in additional workers, operated a second front-end loader, and operated its front-end loaders for two shifts instead of one. Mr. Reddington opined that Savage Industries would not have incurred any additional operating expenses if American Pulverizer had fulfilled its contractual obligation to bring the double roll crusher up to O.E.M. standards by November 8, 1993. 31 From Mr. Reddington's testimony, we believe the trial court reasonably could have concluded American Pulverizer's breach of contract proximately caused Savage Industries to sustain additional operating costs. If American Pulverizer had performed as required under its contract, the Zeigler System would have been installed. The Zeigler System would have produced 175 tons per hour of crushed product, and recirculated oversized material back through the system, eliminating the time and expense of using a front-end loader to haul the oversized product back into the system. However, since the Zeigler System was not installed, a mountain of oversized product accrued, and, according to Mr. Reddington, Savage Industries was forced to incur extra costs for labor and equipment to deal with this product. Clearly, Savage Industries presented sufficient evidence from which the trial judge reasonably could have concluded Savage Industries' additional operating expenses were directly attributable to American Pulverizer's breach. We therefore affirm the district court's order and judgment awarding damages to Savage Industries for additional operating expenses.