Opinion ID: 465055
Heading Depth: 2
Heading Rank: 1

Heading: The Charge for Paper

Text: 12 The District Court found that it was customary in the printing industry for the printer to make a profit on paper purchased from outside sources. It also found that a reasonable markup on outside services was 5-10%. There was ample evidence to support both findings. The cost of paper to Printers was undisputed: $167,152.96. The controversy involves identifying the amount of Printers' charge to Professionals for paper so that the propriety of the markup component may be assessed. 13 On both January 17, 1984, invoices, the paper charge is reflected as $212,551.99, which includes an apparent markup of 27.2%. On the April 3, 1984, invoice, the paper charge appears as $197,924.37, or 18.4% above Printers' cost. Professionals argues that both of these markups are substantially in excess of the upper limit of the range that the District Court found was reasonable. Printers responds that the April 3 invoice reflects the correct paper charge and that this invoice includes a handling charge of $12,955.83. Using the April 3 invoice and separating the handling charge from the paper charge leaves a markup of only 10.7% on the paper. 14 Thus, the issues are whether the District Court's choice of the April 3 invoice was justified and whether the District Court properly believed that the handling charge had been included in the charge for paper. As noted, once adjustments are made for new developments, the second January 17 invoice and the April 3 invoice contain the same total charge to Professionals. Some individual items are increased on the April 3 invoice, while others are decreased. Given the informal nature of Printers' arrangement with Professionals, it may be that Printers first calculated the total bill and later refined the breakdown among individual cost categories. Therefore, although the record presents no explanation for the reduced paper charge on the April 3 invoice, the District Court was justified in using this invoice to determine the cost of individual items. Moreover, there was evidence, which the District Court was entitled to credit, that it was customary in the trade for a printer to include a handling charge with respect to paper purchased from outside sources. Since the April 3 invoice does not include any item labeled handling charge, it was reasonable for the District Court to believe that the handling charge was included in the paper charge. Therefore, there was support in the record for a finding that the real markup on the paper was only 10.7%. Since this percentage barely exceeded the 5-10% range properly found reasonable by the District Court, we cannot say that the District Court's finding on the reasonableness of the markup on the paper was clearly erroneous. 5 15 Moreover, there is no reason to believe that individual cost items on the April 3 invoice were juggled to disguise an excessive charge for paper. If that were so, Professionals should be able to identify some increased item as an excessive charge. Yet it has not done so. Nor can Professionals claim that the total charge was unreasonable. The total charge of $436,371.99 was 14.7% above Printers' total cost of $380,320.68. There was evidence from which the District Court could have concluded that a 10-15% markup was reasonable on services performed by the printer itself. Taking this in conjunction with the 5-10% markup found as reasonable on services performed by the printer itself. Taking this in conjunction with the 5-10% markup found as reasonable on outside services, we cannot say that 14.7% is unreasonable as a total markup. Moreover, the total markup on the first and second issues of the Guide, to which Professionals did not object, was 22% and 25%, respectively.