Opinion ID: 857463
Heading Depth: 3
Heading Rank: 4

Heading: Sunfresh’s Counterclaim: Invoice #17204

Text: Sunfresh counterclaimed for $7,020,6 stemming from its sale of 54 cantaloupe bins to Six L’s. Six L’s replied that Sunfresh breached the terms of the contract by delivering faulty produce—over the 15% checksum. Though Sunfresh does not deny its produce exceeded the defect limits, it argues Six L’s accepted the lot, foreclosing rejection. The district court, finding that Six L’s received the order under protest and resold the produce at a loss to cover Sunfresh’s breach, concluded that Six L’s owed Sunfresh nothing. The record amply supports the district court’s conclusion. Rather than accept the produce on arrival, Six L’s customer—unlike GPI—clearly marked the driver’s bill of lading “Rec[eive]d under protest,” and even gave the reason for rejection: “crushed bins.” A party performing under an “explicit reservation of rights . . . does not thereby prejudice the rights reserved.” Tenn. Code. Ann. § 47-1-308(a). “Such words as ‘without prejudice’, ‘under protest’, and the like are sufficient. Id.; see also id. cmt 1 (echoing key language “under protest” as sufficiently reserving a party’s rights pending resolution of a dispute). Thus, a party may “go[] ahead with delivery, acceptance, or payment” without foregoing any rights retained by the qualifying language. Id. cmt 1. Thus, contrary to Sunfresh’s assertions, Six L’s receipt of the produce does not preclude its rejection upon inspection. 6 Alternatively, Sunfresh claimed Six L’s owed the $5,400 price listed in the invoice for the cantaloupes. - 13 - No. 12-5659 Six L’s v. JR Beale, et al. The USDA inspection confirmed that 50 out of the 54 bins exhibited 17% defects, which, even accounting for the four uninspected bins, exceeded the USDA threshold. JE Beale’s email to Six L’s salesman, Adam Homan, also supports this conclusion. Having preserved the right to reject the nonconforming goods, Six L’s customer resold the produce on Sunfresh’s account. Tenn. Code Ann. § 47-2-603(1) (noting that, absent instructions from seller, a buyer “is under a duty after rejection of goods in his possession . . . to make reasonable efforts to sell them for the seller’s account if they are perishable”). Six L’s expended $2,300 shipping the defective cantaloupes to its resale customer, which was $200 more than the resale value of the produce. Sunfresh fails to present evidence creating a genuine issue of fact regarding Six L’s rejection or resale prices.