LOHMAN v
Subject:SociologyPrice: Bought3
LOHMAN v. WAGNER 862 A.2D 1042 (2004)
Court of Special Appeals of Maryland
Facts
In approximately December 1997, the Appellant met with the Appellee numerous times with the intent of joining a network of pork producers and buyers that the Appellee was putting together. The Appellant began selling weaner pigs to the Appellee in May/June 1998. In July 1998, the Appellant requested a weaner pig purchase agreement from the Appellee to obtain bank financing for facility upgrades. The Appellee put together a sample agreement and faxed a copy to the Appellant which the Appellee had signed on the signature line. The agreement had several blank lines including the weekly quantity of weaner pigs to be produced The Appellant filled in the weekly quantity of weaner pigs to be produced at 300, signed the weaner pig purchase agreement as Producer, and utilized the document to obtain his financing. The Appellant did not dispute that he had no further discussions with the Appellee about the agreement and his changes and that he never sent the Appellee a copy of the agreement with his alterations.
The Appellant continued to sell weaner pigs exclusively to the Appellee at $28 per head consistent with the price per head from the weaner pig purchase agreement until October 1998 when the Appellee reduced the price he would pay to $18 per head citing a heavy drop in the market price for pork. The Appellant continued to sell weaner pigs to the Appellee at $18 per head until March 1999 when he ceased operation of his pig raising business. The Appellant acknowledged that he never informed the Appellee that he believed the Appellee had breached their agreement prior to filing suit.
The Appellant filed a one-count complaint against the Appellee, alleging breach of contract and seeking damages. The court issued a judgement for the defendant. The Appellant appealed to the Court of Special Appeals of Maryland contending:
· “The trial court erred in concluding the Maryland Uniform Commercial Code applies to the weaner pig purchase agreement”;
· “The trial court erred in concluding a quantity term was required to be stated in the weaner pig purchase agreement in order for that agreement to be enforceable under Commercial Law Article § 2-201”;
· “The trial court erred in concluding the weaner pig purchase agreement did not contain a quantity term and therefore was not enforceable under Commercial Law Article § 2-201”.
Issues
· Is an agreement that encompasses services as part of the production effort still a contract for the sale of goods and subject to the Uniform Commercial Code?
· Must an agreement contain a quantity term in order to be enforceable under § 2-201 of the UCC?
· Is a quantity term of a sale of goods contract enforceable under UCC § 2-201 where the parties to the contract have not agreed on that term?
Decision
The Court of Special Appeals of Maryland affirmed the judgement of the trial court. The court determined that the weaner pigs are goods under § 2-105(1) which specifically includes young animals in the definition of goods. The court cited DeGroft v. Lancaster Silo Co. Inc ., 72 Md.App. 154, 164, 527 A.2d 1316 (1987) in affirming that the UCC applies to “transactions in goods” as a broader classification of transactions than the sale of goods. The court also cited numerous other cases where contracts for the sale of pigs are treated as the sale of goods and subject to the UCC including Purina Mills, L.L.C. v. Less , 295 F.Supp. 2d 1017, 1031 (N.D.Iowa 2003) which specifically affirmed that weanling pigs are goods.
The court found that although the weaner pig purchase agreement involves providing services, the trial court was correct in determining that the UCC does apply to contracts where goods and services are both provided where the predominant purpose of the agreement is supplying goods. The court cited Burton v Artery Co. Inc ., 279 Md. 94, 367 A.2d 935 (1977) where the court had applied the "Bonebrake test" from Bonebrake v. Cox , 499 F.2d 951 (8th Cir. 1974) to determine whether the UCC governed mixed contracts of goods and services. The Bonebrake test involves examination of the contract to determine whether the sale of goods is the primary purpose of the contract or incidental to the performance of a service. The court sited three additional cases where the Bonebrake test was applied when analyzing contracts comprising both goods and services including DeGroft v. Lancaster Silo Co. Inc., 72 Md.App. 154, 164, 527 A.2d 1316 (1987) where the court asserted that the analysis of the agreement and circumstances of making will determine the principal intent of the contract. Through application of the Bonebrake test, the court upheld that the primary intent of the Weaner Pig Purchase Agreement is the sale of weaner pigs with incidental services provided therefore is considered a sale of goods under the UCC.
The court cited Cavalier Mobile Homes, Inc. v. Liberty Homes, Inc ., 53 Md.App. 379, 454 A.2d 367 (1983) and Thomas J. Kline, Inc. v. Lorillard, Inc ., 878 F.2d 791 (4th Cir.1989) both of which affirmed that a contract for the sale of goods must include a quantity term in order to be enforceable under UCC § 2-201 in upholding the trial court decision. The court rejected the alternate contention that the Weaner Pig Purchase Agreement is an output agreement enforceable under UCC § 2-306 citing insufficient evidence of agreement by the Appellee to a 300 per week level of Appellant’s output.
Finally, the court agreed with the trial court that the Weaner Pig Purchase Agreement did not contain a quantity term. The Appellant contended that the Appellee implicitly gave the Appellant authority to fill in the blanks of the agreement by faxing a signed agreement. The court cited Romani v. Harris , 255 Md. 389, 396, 258 A.2d 187 (1969) which indicates that a party to an agreement may not act as agent for the other party for satisfaction of the Statute of Frauds. Since there was no evidence of agreement to the quantity term, the court agreed that the weaner pig purchase agreement was not enforceable against the Appellee.
