Court Opinion

ID: 9579424
Source: CourtListenerOpinion
Date Created: 2023-08-21 21:55:02.213613+00
Date Added: 2024-06-11T13:35:30.315790
License: Public Domain

HANSEN, Presiding Judge,
dissenting:
I dissent. Simpson brought this action to recover interest money from Oexco for rock and gravel materials furnished by Simpson for Oexco’s construction of oil and gas well surface locations. The trial court determined there was no express contract between the parties, that the transactions between the parties amounted to an “open account” and that interest on the account was implied by law. The majority appears not to disagree with these findings. The question is whether there is evidence reasonably supporting the trial court’s determination of an implied contract to pay interest on that account. In my view, there is not.
An agreement, in this case to pay interest, which is implied in fact is one whose existence and terms are manifested by conduct. 15 O.S.1991, § 133. The existence of an implied agreement is a matter of law. Mead Bros. v. State Industrial Commission, 144 Okl. 279, 291 P. 571 (1930). Implied contracts exist where the intention of the parties is not expressed, but the agreement creating the obligation is implied or presumed from their acts, where there are circumstances that show a mutual intent to contract. Jones v. University of Central Oklahoma, 910 P.2d 987 (Okla.1995). In Ray F. Fischer Co. v. Loeffler-Green Supply Co., 289 P.2d 139 (Okla.1955), an implied-in-faet contract case, the Supreme Court noted that the nature of express and implied contracts are the same in that both express contracts and contracts implied in fact are founded on the mutual agreement of the parties. Here there was no such mutual agreement to pay interest on the account.
The majority concludes it is reasonable to infer from Oexco’s conduct that Oexco agreed to pay a finance charge on past-due invoices based on the principles underlying 12A O.S. 1991, § 2-207 and note 5 to said section. I disagree. Section 2-207 was not raised to the trial court and the majority acknowledges this. Further, Simpson mentions § 2-207 only once in its appellate brief in support of its contention the assessment of finance charges on accounts is a common practice in our society. Although the majority states it does not premise its decision on § 2-207 and it need not determine whether such section of law technically applies, that is precisely what it does.
Section 2-207 is intended to deal with two situations: one is the written confirmation, where an agreement has been reached either orally or by informal correspondence between the parties and is followed by one or both of the parties sending formal memoran-da which contain the terms of the agreement and adding terms not discussed, and two, is an offer and acceptance, in which a wire or letter expressed and intended as an accep*860tance or the closing of an agreement adds farther minor suggestions or proposals. See Comment 1 to this Section. Section 2-207 provides the additional terms are to be construed as proposals for addition to the contract and in fact become a part of the contract unless under subsection (c), notification of objection to them has already been given or is given within a reasonable time after notice of them is received.
Section 2-207 thus applies to a situation where a contract already exists or where an acceptance .of an offer contains additional terms. However, the trial court determined “[tjhere were no express contracts between the parties and the transactions between the parties amounted to an open account”.
The majority opinion suggests the parties’ relationship is contractual. Footnote 4 of the majority opinion provides in part: “However, in light of the fact that both of the parties to this contract were actively engaged in oil and gas related businesses and might be said to be ‘merchants’, the principles underlying § 2-207 may be indicative of what might reasonably be inferred from the parties’ conduct.” Apparently, the majority has concluded that the invoices, price lists and/or periodic statements were written confirmations of existing contracts and that the finance charge was a term added by Simpson to which Oexco should have objected. Because Oexeo continued to use Simpson’s services after being sent numerous invoices which contained the finance charge language, the majority decides it is not unreasonable to infer that Oexco agreed to pay the finance charge.
I question the applicability of § 2-207 to the facts of this case. Even assuming for the sake of argument that § 2-207 of the Uniform Commercial Code applies and that it could be implied that finance charges became a part of the parties’ agreement, under the facts of this case, Simpson waived, by its silence, any right it had to collect the finance charge from Oexeo.
If this Court intends to apply the principles of the Uniform Commercial Code to this case, even if not raised below, it should look to other sections of the U.C.C. for guidance as well. Under the Uniform Commercial Code, an “agreement” means “the bargain of the parties in fact as found in their language or by implication from other circumstances including course of dealing or usage of trade or course, of performance as provided for in the Uniform Commercial Code (Sections 1-205 and 2-208 of this title).” 12A O.S.1991, § 1-201(3). 12A O.S.1991, § 2-208 provides:
(1) Where the contract for sale involves repeated occasions for performance by either party with knowledge of the nature of the performance and opportunity for objection to it by the other, any course of performance accepted or acquiesced in without objection shall be relevant to determine the meaning of the agreement.
(2) The express terms of the agreement and any such course of performance, as well as any course of dealing and usage of trade, shall be construed whenever reasonable as consistent with each other; but when such construction is unreasonable, express terms shall control course of performance and course of performance shall control both course of dealing and usage of trade (Section 1-205).
(3) Subject to the provisions of the next section on modification and waiver, such course of'performance shall be relevant to show a waiver or modification of any term inconsistent with such course of performance.
(Emphasis supplied).
As noted in Comment 1 to § 2-208, the parties themselves know best what they have meant by their words of agreement and their action under that agreement is the best indication of what that meaning was. Unlike the defendant in Fischer, supra, Oexeo has uneontrovertedly never paid any interest to Simpson. Over the eight-year period of the parties’ business relationship, Oexco made payments to Simpson generally from 90 to 120 days after invoice. On its checks, Oexco noted the invoice numbers to which the payment corresponded and the payments never included any interest. Simpson cashed these payments and credited them to Simpson’s account, never objecting to Oexco’s failure to pay interest. Even though Simpson’s invoices and statements contained language *861which provided for the assessment of interest after 1985, the evidence shows Simpson never once demanded interest from Oexco during the seven years from September, 1985 to July, 1992, and continued to accept checks from Oexco which only covered the invoiced amounts.
The majority considers only the evidence of Oexco’s failure to object to the finance charge terms and ignores the evidence of Simpson’s seven-year failure to insist upon performance. The plaintiff has the burden to present evidence to establish an implied-in-faet contract, which as noted, rests on the parties’ mutual agreement. Jones v. University of Central Oklahoma, 910 P.2d 987, 991 (Okla.1995). Under § 2-208 of the U.C.C., a certain course of performance can result in the waiver of an express term in an agreement. National Livestock Credit Corporation v. Schultz, 653 P.2d 1243 (Okla.App.1982). Simpson did not meet its burden of proof to present evidence to establish an implied in fact contract. The evidence in this case clearly shows a course of performance by Simpson wherein it has waived any right it may have had, to insist upon performance by Oexco of the interest provision contained in the invoices. I would reverse the trial court’s judgment. Accordingly, I dissent.