Court Opinion

ID: 9793118
Source: CourtListenerOpinion
Date Created: 2023-08-31 02:42:51.280384+00
Date Added: 2024-06-11T08:01:13.153368
License: Public Domain

Justice SCHROEDER,
dissenting.
I respectfully dissent from the opinion of the Court affirming the district court’s determination that the market price was the reasonable price for the rejectable potatoes. It is contrary to the purpose of the contract and commercially unreasonable to award Lickley more for rejectable potatoes than he would have received had he delivered conforming potatoes. The district court recognized this in its initial decision which was amended without explanation. Finding of Fact No. 32 in the first decision stated the following: “The ‘open price term’ is found by the court to be $5.05 per cwt., as reflected in Defendant’s Exhibit F; the court rejects the use of the $7.50 per cwt.” The district court explained its rationale in Conclusion of Law No. 17:
17. The reasonable price for the “rejectable” potatoes delivered by the plaintiff to the defendant in October, 1995, is $5.05 per cwt., based upon this court’s determination in Finding of Fact No. 32. An award greater than $5.05 per cwt. would be unreasonable under all of the facts and circumstances of this case, as well as in consideration of the purpose of the parties’ entering into this contract. Additionally, any award of a higher price for the plaintiffs “rejectable” potatoes than the contract price for conforming potatoes would not fall within reasonable commercial standards of fair dealing in the trade. Idaho Code, Section 28-2-103(b). This conclusion of law also hereby incorporates Findings of Fact Nos. 32 and 33. Palmer v. Idaho Peterbilt, Inc., 102 Idaho 800, 802-03, 641 P.2d 346, 348-49 (Ct.App.1982).
The reason buyers and sellers enter contracts such as this is to lock into a predictable price. The potato grower wants to ensure his costs are covered in case of a poor market, and the buyer wants to ensure a supply at a predictable and affordable cost in ease of high demand. By entering pre-season contracts the grower takes the risk that the market price will exceed the contract price. Similarly, the buyer takes the risk that the contract price will exceed the crop’s value at the time for delivery. In this case the contract provides a formula to calculate the price for non-rejectable potatoes. Lickley could not reasonably have expected to be paid more for rejectable potatoes than he was for the potatoes meeting the contract’s minimum standards, and Herbold could not have expected to pay more for rejectable potatoes than for conforming potatoes. As an illustration, Herbold could have rightfully rejected the potatoes, and if Lickley could not fulfill his obligations, Herbold would have been able to recover the difference between the market price and the contract price for conforming potatoes. See I.C. § 28-2-713. The reasonable price of reject-able potatoes at the time for delivery must be determined with regard to the contract price for acceptable potatoes. If a third person reading this contract had asked, “Does this mean Lickley can make more money by delivering rejectable potatoes than by delivering conforming potatoes?,” the answer surely would have been “no” from both parties. The purpose of the contract is defeated by such an interpretation. In the amended decision the district judge found that $7.55 cwt. was a reasonable price at the time for delivery, an amount higher than the contract price for conforming potatoes. In *215light of the parties’ intentions as reflected in the contract, this Court should conclude that the district court erred in finding the market price to be a reasonable price under the contract. The parties’ agreed to a specific pricing structure for conforming potatoes. Their intention as to what constitutes a reasonable price for rejectable potatoes can be inferred from that pricing structure. As the quality of the potatoes decreased, so did Lickley’s expected return.
This Court should vacate the decision of the district court and remand the case for a determination that reflects the purpose of the contract and the clear intent of the parties. Affirming the district court gives Lickley a benefit he could not have contemplated under the contract.