Opinion ID: 783066
Heading Depth: 3
Heading Rank: 2

Heading: Diversified's Claim Under the Contract/Market Price Differential

Text: 25 The district court did not err in rejecting Diversified's claim for damages based on the $5.13 per ton difference between the Contract price and the market price. Upon remand, this Court instructed the district court to determine Diversified's damages in accordance with standard principles of contract law. Diversified mistakenly argues here that those principles entitled it to a measure of damages reflective of the contract/market price differential under the Uniform Commercial Code (UCC), specifically § 2-708(1). 8 Even assuming that the UCC applies, 9 however, Diversified was not entitled to damages under § 2-708(1). 26 Sigmon — the entity which actually owned the coal — paid Diversified a fixed commission of $.98 for each ton of coal delivered to TVA. Diversified was obligated to pay a portion of those commissions, $.22 for each ton delivered, to a third party, Billy Evans, as compensation for his assignment of the Contract to Diversified on June 19, 1980. Hence, as indicated in Diversified I, if TVA had performed the Contract fully, Diversified's maximum expectancy would have been $.76 per ton of undelivered coal. See Diversified I, 223 F.3d at 338. 27 A non-breaching party is entitled to be placed in the same position it would have enjoyed had the defendant abided by the contract, but is not entitled to more than the benefit of his bargain. See, e.g., San Carlos Irrigation & Drainage Dist. v. United States, 111 F.3d 1557, 1562-63 (Fed.Cir.1997); Rodgers v. Fisher Body Div., Gen. Motors Corp., 739 F.2d 1102, 1107 (6th Cir.1984). A damage award which fails to adhere to this principle is unreasonable as a matter of law. See Cincinnati Fluid Power, Inc. v. Rexnord, Inc., 797 F.2d 1386, 1393 (6th Cir.1986). The UCC, including § 2-708, has adopted this philosophy. See, e.g., Nobs Chem., U.S.A., Inc. v. Koppers Co., 616 F.2d 212, 215 (5th Cir.1980). 28 Diversified relies principally upon Trans World Metals, Inc. v. Southwire Co., 769 F.2d 902, 908 (2d Cir.1985) to support its argument that it is entitled to damages under § 2-708(1). That case is not applicable, however. Unlike the plaintiff in Trans World Metals, Diversified did not assume any risk that the market price of coal would increase. Rather, any such risk was assumed, if at all, 10 by Sigmon — the only authorized producer of the coal under the Contract. Therefore, Diversified was not entitled to damages based on the contract/market price differential under § 2-708(1). See Nobs Chem., 616 F.2d at 215; see also Union Carbide Corp. v. Consumers Power Co., 636 F.Supp. 1498, 1501-02 (E.D.Mich.1986). Because Diversified would have received only $.76 per ton of coal had the Contract been performed, the district court properly limited its damages to an amount based on that figure. 29