Court Opinion

ID: 9462345
Source: CourtListenerOpinion
Date Created: 2023-08-04 22:39:06.99284+00
Date Added: 2024-06-11T17:37:33.346141
License: Public Domain

SEITZ, Chief Judge
(concurring and dissenting).
I concur in the majority’s disposition of the apparent authority issue and in its conclusion that defendant WIOO’s refusal to honor the promised spots constituted an anticipatory repudiation of the contract.1 Unlike the majority, I find it unnecessary to predict whether a Pennsylvania court, confronted with the facts of this case, would overrule McCormick v. Fidelity & Casualty Co., 307 Pa. 434, 161 A. 532 (1932) and discard the requirement announced therein of a prompt acceptance of an anticipatory breach as a precondition to a right of action prior to the date of performance.
In Pennsylvania the significance of a party’s failure to accept an anticipatory repudiation is twofold: first, it results in the continuance of the obligations of the contract on both sides; and second, it enables a breaching party to retract its repudiation and complete its performance, or to take advantage of supervening circumstances which would justify its refusal to complete the contract. See, McCormick v. Fidelity & Casualty Co., supra; Clavan v. Herman, 285 Pa. 120, 131 A. 705 (1926); Zuck v. Henry & McClure, 98 Pa. 541 (1881). Neither consequence is evident in this case. The injured plaintiff had already fulfilled its contractual duties prior to the breach, or shortly thereafter, by providing all the radio jingles and promotional material' specified in the contract, and the defendant at no time has sought to retract its repudiation and complete its promised performance.
Assuming, however, that a Pennsylvania court would nevertheless require a prompt acceptance of an anticipatory repudiation under these circumstances, I believe that the plaintiff satisfactorily fulfilled this requirement by bringing suit before the defendant prejudicially; changed its position. Professor Corbin, while critical of the acceptance requirement as the majority points out, notes that in jurisdictions which adhere to this rule, the filing of suit is a sufficient manifestation of acceptance. 4 A. Cor-bin, Contracts § 981 at 940 (1951); Accord, 11 S. Williston, Contracts § 1321 at 127 (3d ed. 1968). I therefore conclude that plaintiff accepted the defendant’s anticipatory repudiation on March 13, 1972 with its commencement of this action. Since the delay between the repudiation2 and acceptance thereof was attributable, at least in part, to plaintiff’s understandable efforts to achieve a settlement through negotiations with the defendant, and since the defendant, having received the full benefit of the plaintiff’s performance under the contract, was not prejudiced by this lapse of time, I further believe that the acceptance was sufficiently prompt within the meaning of the Pennsylvania case law.
With respect to the issue of damages, I disagree that the plaintiff failed to prove with “reasonable certainty” the loss it sustained by the defendant’s re*274fusal to provide the promised spots. The majority holds that the spots had value to the plaintiff only insofar as they could be resold to advertisers, and that the sole harm suffered by plaintiff as a result of the defendant’s breach was the loss of future profits from the sale of the spots.
I believe the majority’s view too narrowly restricts plaintiffs recoverable damages. Additionally, it ignores the language of the contract which states that the spots are “considered partial payment for service(s) rendered . .” (emphasis added). As a payment term under the contract, plaintiff was clearly entitled to recover their reasonable value since it established that it had completed its contractual duties and had received only partial compensation in return. Unlike the majority, I believe that the spots had value aside from their potential yield on resale. For example, they could have been donated to a charity and used as a tax deduction or possibly could have been used by plaintiff itself, in the event that plaintiff elected not to resell them. In either of these situations, damages for the loss of spots would be measured by the cost of purchasing or replacing them.
I believe that plaintiff was entitled, at a minimum, to recover compensation for this loss and that the evidence of the price at which WIOO sold the spots furnished an appropriate basis for estimating their cost.3
Lost profits would have been a figure over and above this loss which could have been recovered if properly proved. The majority concludes that plaintiff failed in its effort to prove loss of profits, reasoning that evidence of the price at which the defendant could have sold spots, although relevant, was insufficient to satisfy plaintiff’s burden of proving the profits it could have derived from their resale.
It is true that plaintiff offered no evidence as to whether it could have sold the spots to advertisers and as to the price which it could have obtained. This was in part a result of defendant’s asserted refusal to honor the spots. To have required plaintiff to actively seek bids from prospective customers following the defendant’s repudiation, would have been senseless.
Nor do I view plaintiff’s failure to request spots before the breach as necessarily fatal to its claim for damages. There was testimony that the resale of spots was an increasingly significant aspect of plaintiff’s business (Tr. 115-116), but that it was a “feast or famine type thing.” (Tr. 365). Since the contract stipulated that the spots were to be “valid until used,” I do not feel that plaintiff’s failure to request any spots prior to the breach should constitute a total bar to recovery.4
The difficulty of accurately forecasting damages for lost profits in this case is thus readily apparent. The precise profits which the plaintiff could have attained through a resale of the spots are incapable of ascertainment because the defendant’s breach thwarted any attempts to consummate a sale. The defendant, however, should not be exonerated from liability merely because its own misconduct has made the calculation of damages more difficult.
Under these circumstances I do not believe that the district court erred in utilizing the published rates at which the defendant sold spots to determine the plaintiff’s damages. Williston states that profits made by others may afford a reasonable inference of an injured *275plaintiff’s loss. 11 S. Williston, Contracts § 1346A at 249 (3d ed. 1968).
It is also significant to note that the rate selected by the district court was the lowest rate at which the defendant sold one-minute spots. Spots were sold both individually and in various quantities, with the lowest price applicable to purchases in excess of 500 one-minute spots. This bulk rate corresponds roughly to a wholesale price and as such is the likely contract price which the plaintiff paid. It would have been advantageous for plaintiff to obtain spots at their “wholesale” cost and then resell them at the higher price charged by defendant for purchases of smaller quantities or at a price slightly below what the defendant would have charged. Plaintiff’s profits, as in any other contract case, would have been the difference between the resale price and the contract price.
Accordingly, plaintiff argued at trial that its loss for each unsupplied spot could be estimated by averaging the lowest price at which spots could be obtained from the defendant with the highest price for which they were sold. Recognizing that there was no evidence to support plaintiff’s claim that it could have resold the spots at a price in excess of the so-called wholesale price, the district court properly limited plaintiff’s recovery to the lowest published value for which they could be sold.
Applying these principles, the lower court calculated the damage award as follows:
“The value of the spots claimed by the plaintiff is based on the SRDS rate table for WIOO as of the date of breach (February 23, 1971). The testimony shows that the rate was $10.00 per one-minute spot which was reduced to $7.50 when purchased in excess of 500 spots.”
The court then multiplied the $7.50 rate by the 1560 spots specified in the contract and determined the value of the spots to be $11,700.
There exists a division in authority as to the date governing the calculation of damages where an anticipatory breach has occurred. While the general rule is that damages are to be assessed on the basis of profit factors in existence at the time of performance fixed by the contract, McJunkin Corp. v. North Carolina Gas Corp., 300 F.2d 794 (4th Cir. 1961), there is also authority for fixing damages as of the date of the anticipatory breach. See, Placid Oil Co. v. Humphrey, 244 F.2d 184 (5th Cir. 1957). This latter rule is especially appropriate in cases, such as the present, where the date of performance is indefinite. Since neither party expresses dissatisfaction with the valuation date selected by the district court, I accept that court’s assumption that the spots should be valued on the basis of rates in effect on the date of breach. Contrary to the findings of the district court, however, I believe that the evidence indicated the effective rates on this date were $8.50 for single purchases of one-minute spots and $4.25 for purchases in excess of 500 spots. (Tr. 134). The rates upon which the district court based its calculation did not become effective until August 30, 1971. (Tr. 129-130). I therefore conclude that the district court should have computed the value of the spots by reference to the $4.25 price rather than the $7.50 quotation.
One final question remains for consideration. The defendant argues that since plaintiff’s obligations under the contract spanned a period of 20 months, its own duty to provide spots should correspondingly be limited to 20 months. Since the breach occurred after 17 of the 20 months had elapsed and since no requests had been made during this time, defendant contends it should receive credit for 17/2o’s of the total number of spots that it would otherwise have been obligated to provide.
Despite the broad language of the contract which states that the spots are “valid until used”, the district court determined that plaintiff could not unreasonably delay the enforcement of the contract. The court, while acknowledg*276ing that purchases and credits for radio time are almost universally restricted to one year in advance, failed to determine the reasonable duration of the defendant’s obligation to provide spots. Since the district court made no specific finding on this issue and since it further made no determination as to whether it would have been reasonable for the plaintiff to request the station to run all 1560 spots during the remainder of the period following the breach, I would remand the case for further findings on the issue of whether a credit should be applied for the time during which no spots were requested.

. In addition to its refusal to provide the spots of air time, the defendant had previously ceased the monthly cash payments specified as partial compensation in the contract. Plaintiff does not suggest, however, that this initial noncompliance may have resulted in a breach of the entire contract, affording a right of immediate action for damages, regardless of whether or not the breach was promptly accepted.

. The majority and the district court both agree that the anticipatory repudiation occurred on February 23, 1971, during the telephone conversation in which WIOO announced that it would not run any of the Tanner spots, even if sent.

. Of course, an award based on this figure may include an unwarranted element of profit in the event the contract price was actually less than the published rates at which WIOO sold spots. I am unable to say, however, that this evidence failed to establish with “reasonable certainty” the cost of the spots.

. The possibility exists, however, that the spots should be pro-rated over the remaining life of the contract.