September 21, 2017

Archives for July 12, 2017

Tenth Circuit: Summary Judgment Not Appropriate when Questions of Fact Remain over Contract Dispute

The Tenth Circuit Court of Appeals published its opinion in Obermeyer Hydro Accessories, Inc. v. CSI Calendaring, Inc. on Thursday, March 30, 2017.

Obermeyer Hydro Accessories, Inc. purchased fabric sheets used for water control structures from CSI Calendering, Inc. beginning in 2010. The parties’ dispute arose from a January 2013 quote for the product. The quote was a 50% increase from the parties’ earlier transactions. The parties agree that they had a contract, but they disagree on when it was formed. The district court granted summary judgment to CSI and Obermeyer appealed.

Obermeyer contends that the contract was formed before the January quote. “CSI contends that the contract was not formed until the January quote and that even if the parties had a prior contract, the contract was modified (1) by the quote or (2) by Obermeyer” making numerous payments invoiced at the price from the January quote. The Tenth Circuit held that a jury could find that a contract was formed before the January quote, and questions of fact remain as to the whether the contract was modified by the January quote or Obermeyer’s subsequent payments. Therefore, summary judgment was not appropriate.

The Tenth Circuit reviewed the grant of summary judgment de novo. The court applied Texas law as the governing law of the agreement, as agreed to by the parties. The Tenth Circuit applied the six elements under Texas law “needed to form a valid and binding contract.” The court reviewed the circumstances of what the parties said and did objectively to determine whether there was a meeting of the minds. Because “there was no evidence that CSI had ever suggested before January 11 that timing of invoices would affect the price,” a jury could reasonably find that the price was offered and accepted before the January quote.

The court then addressed CSI’s arguments that even if the contract was formed before the January quote that it was modified, and therefore CSI is entitled to summary judgment. “Modification requires mutual consent, which is ordinarily a question of fact for the jury.” The party asserting modification has the burden to prove modification by establishing notice of the change and acceptance. The other party must have knowledge of the nature of the change. Further, “Texas law requires that modification of a contract for the sale of goods must be made in objective and subjective good faith.”

CSI did not meet its burden. CSI did not explicitly state that it was changing the price, nor did it explain to Obermeyer its reason for the modification as required to establish objective good faith. CSI asserted that the change in price was made clear in the January quote by the use of the term turnkey. However, “CSI never explained to Obermeyer how it was using the term turnkey and the term had never before been used in their dealings.” Additionally, Obermeyer could have made natural assumptions not indicative of a massive change in pricing. Here, the court stated that “the specifics of the purported change smack of fast dealing.” And that, “on this record a jury could reasonably reject CSI’s explanation.”

The court determined that the question of modification by performance was also a question for the jury. Under the UCC performance requires that the other party have “knowledge of the nature of the performance.” CSI argued both that Obermeyer should-have-known, and the doctrine of negligent assent to support modification. Here, questions remain as to whether Obermeyer’s payments reflected its understanding of the change in price, which is a question for the jury.

Finally, CSI contended that commercial transactions would suffer from uncertainty in a decision against it. The court responded, “commerce is not enhanced if buyers and sellers must always treat each other as adversaries, auditing every transaction as it occurs to be sure the other party is not cheating. If the jury finds that Obermeyer had been misled by an unscrupulous supplier on which it had relied in good fact, we do not think that the world of commerce will suffer.”

The court REVERSED the summary judgment and REMANDED for further proceedings.

Tenth Circuit: Sentencing Enhancement Properly Applied When Defendant Conceded to Crime of Violence

The Tenth Circuit Court of Appeals published its opinion in United States vSnyder on Tuesday, March 28, 2017.

Mr. Snyder pleaded guilty to possession of firearm in violation of 18 U.S.C. §§ 922(g)(1) and 924(a)(2) while on probation. The probation officer recommended a base offense level of 20 pursuant to United States Sentencing Guidelines (USSG) § 4B1.2(a)(2), because Mr. Snyder had a prior conviction of a crime of violence. Mr. Snyder sought a reduction to the base offense level pursuant to USSG § 2K2.1(b)(2). The district court held that Mr. Snyder’s prior conviction of voluntary manslaughter was a crime of violence and he was not entitled to a reduced sentence. Mr. Snyder appealed.

The Tenth Circuit ordered supplemental brief to determine whether the residual clause of USSG § 4B1.2(a)(2) provided a basis for Mr. Snyder’s sentencing enhancement if his prior conviction of voluntary manslaughter was a crime of violence. Mr. Snyder’s supplement brief conceded that his prior conviction was a crime of violence. Further, the Supreme Court reasoned in Beckles “the advisory Guidelines do not fix the permissible range of sentences. To the contrary, they merely guide the exercise of a court’s discretion in choosing an appropriate sentence with the statutory range.”

The court concluded that the district court properly applied the sentencing enhancement and affirmed Mr. Snyder’s sentence.

Tenth Circuit: Unpublished Opinions, 7/11/2017

On Tuesday, July 11, 2017, the Tenth Circuit Court of Appeals issued two published opinions and two unpublished opinions.

United States v. Meridyth

United States v. Magallon-Maldonado

Case summaries are not provided for unpublished opinions. However, some published opinions are summarized and provided by Legal Connection.