Opinion ID: 779029
Heading Depth: 3
Heading Rank: 1

Heading: Raw Almonds and Raw Walnuts

Text: 27 HD offered no evidence regarding damages. In contrast, multiple witnesses testified in the bankruptcy court in support of SNA's damage claim. The witnesses established that there were three components to SNA's damages: (1) the contracted nut products that SNA had finished processing pursuant to HD's unique recipes and which HD failed to pull; (2) contracted nut products SNA did not finish processing because HD stopped pulling the nut products; and (3) the raw almonds and walnuts that SNA bought during the 1993 harvest to perform its obligations under the HD contracts that HD never pulled and that had declined in value by the end of the contracts in 1994. The third component is the focus of HD's next argument on appeal. 28 With respect to the third component, the bankruptcy court found that SNA had bought the raw nuts at the end of the 1993 harvest to fulfill its obligations to HD under the contracts, and between 1993 and 1994, the price of the raw nuts fell. When HD failed to pull these raw nuts, SNA was left holding them. Thus, when SNA eventually resold the raw nuts to other customers, SNA lost profits because the price of the nuts had declined. Therefore, SNA calculated its damages by determining its loss in profit per pound of raw nuts, and adding to that amount the additional costs it incurred from having to hold and store the raw materials for longer than expected. The bankruptcy court agreed with SNA's calculations, and the district court adopted the bankruptcy court's proposed finding. 29 On appeal, HD claims that the raw materials damages calculations were in error. Specifically, HD claims that SNA should not have been awarded damages for raw almonds and raw walnuts because such damages were not within HD's reasonable contemplation and because SNA failed to establish the value of the raw nuts. We, however, are inclined to recognize the considerable discretion entrusted to the district court in calculating damages, even in cases where the court has adopted the findings of the prevailing party. If the adopted findings are sufficient to permit appellate review and are not clearly erroneous, the appellate court must affirm the judgment. Hagge v. Bauer, 827 F.2d 101, 109 (7th Cir.1987). 30 First, HD contends that SNA failed to prove its damages to a reasonable certainty. The Supreme Court has stated that [c]ertainty as to the amount [of damages] goes no further than to require a basis for a reasoned conclusion. Palmer v. Connecticut Railway & Lighting Co., 311 U.S. 544, 561, 61 S.Ct. 379, 85 L.Ed. 336 (1941). When HD breached its obligations under the diced almonds and diced walnuts contracts, it left SNA with 187,029 pounds of unprocessed raw almonds and 6,411 pounds of unprocessed raw walnuts. SNA suffered a loss on those raw materials when the price fell between the fall of 1993 and the fall of 1994 because no one was willing to pay the price that HD had previously contracted to pay. In order to determine their lost profits, SNA determined the change in the value of the nuts by looking at the difference in cost to procure the raw nuts between 1993 and 1994. SNA then multiplied this difference by the amount of raw nuts it had had in its inventory for HD and added to that amount the additional storage costs it incurred. We believe that the above calculations are reasoned conclusions. 31 Further, with regard to whether such damages were within HD's reasonable contemplation, Reider, HD's purchasing director, testified that he knew that nuts were harvested once a year and that a buyer had to buy during the harvest to lock in a supply of nuts. Thus, Reider would have known that SNA bought the raw almonds and walnuts in question in the fall of 1993 to fulfill its obligations to HD in 1994. Because Reider, as purchasing director, should have known the quantity terms of its supply contracts with SNA and that the price of nuts can fluctuate, we see no reason why the lower courts could not have inferred that the amount of damages were within HD's reasonable contemplation. Thus, we find no clear error in the damages calculations for raw almonds and raw walnuts.