Procedural Posture

Procedural Posture

Defendant buyers appealed from the Superior Court of Los Angeles County (California), which entered judgment in favor of plaintiff seller in a breach of contract action. The buyers and the seller had entered contracts for the purchase of flour, but the seller terminated the contracts and filed suit after the buyers refused further deliveries.

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Overview

Buyers and a seller entered into contracts for the purchase of flour. After the buyers refused to accept further deliveries, the seller terminated the contracts and brought suit for breach of contract. The trial court entered judgment in favor of the seller. On appeal, the court affirmed with a modification. Specifically, the court overturned the trial court’s allowance of interest from the date of the breach, reiterating that prejudgment interest was not allowable where the damages depended upon no fixed standard and could not be made certain except by accord, verdict, or decree. Moreover, the court found that neither the seller nor the buyers introduced evidence of established or reasonably ascertainable market values. Accordingly, the court concluded that the trial court’s computation of prejudgment interest under Cal. Civ. Code § 3287 had not based on an established market price, as required judicial precedence, but rather on a value that the trial court had been compelled to select from conflicting evidence relating to cost, carrying charges, and profit.

Outcome

The court affirmed the trial court’s judgment in favor of the seller, with one modification. In particular, the court overturned the trial court’s award of prejudgment interest because it had been based on conflicting evidence relating to cost, carrying charges, and profit, as opposed to an established market price.

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