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Keywords

contractdamagesattorneymotionbankruptcyexpress contract

damagesattorneytrialbankruptcyobjection

Related Cases

In re Fried Group, Inc., 218 B.R. 247, 36 UCC Rep.Serv.2d 709

Facts

Holden Machinery, a company based in England, sold used farm equipment to Sundance Tractor & Mower, a U.S. company, which later filed for bankruptcy. Sundance claimed that Holden's equipment had defects and sought to offset Holden's claim by the repair costs incurred. The Bankruptcy Court determined the total contract price, repair costs, and other credits, resulting in a net claim against Sundance's bankruptcy estate.

Holden, a company based in England, and Sundance, a company based in the United States, had a business relationship where Holden would sell used farm equipment to Sundance which would resell the equipment to consumers in the United States. As a result of financial difficulties, Sundance filed this bankruptcy case.

Issue

The main legal issues were whether the evidence of repair costs was sufficient to support damages for breach of warranty and whether attorney fees could be awarded as consequential damages.

Holden questions the sufficiency of the evidence presented at trial on the issue of damages for breach of warranty.

Rule

Under O.C.G.A. § 11–2–714(2), the measure of damages for breach of warranty is the difference between the value of the goods accepted and the value they would have had if they had been as warranted. Attorney fees are generally not recoverable unless there is an express contractual provision or statutory mandate.

In Georgia, '[t]he measure of damages for breach of warranty is the difference at the time and place of acceptance between the value of the goods accepted and the value they would have had if they had been as warranted, unless special circumstances show proximate damages of a different amount.' O.C.G.A. § 11–2–714(2).

Analysis

The court found that the evidence of reasonable repair costs was relevant and persuasive in determining the damages for breach of warranty. It concluded that the repair costs provided sufficient proof of the difference in value as required by Georgia law. However, the court also determined that the award of attorney fees was erroneous, as there was no contractual provision or statutory basis for such an award in this context.

In its ruling, the Court determined that evidence regarding the cost of repairs was relevant and persuasive on the question of the difference 'between the value of the goods accepted and the value they would have had if they had been as warranted.'

Conclusion

The court denied Holden's motion for reconsideration regarding the sufficiency of repair costs but vacated the award of attorney fees, resulting in an increase in Holden's claim against Sundance's bankruptcy estate.

Upon reconsideration, the Court holds that this award was erroneous.

Who won?

Sundance prevailed in the case regarding the sufficiency of repair costs as evidence for damages, as the court upheld the damages award. However, Holden prevailed in having the attorney fees vacated.

Sundance contends that Holden waived its objections to Sundance's evidence regarding damages and right to recover attorney's fees under the Uniform Commercial Code by failing to assert these objections at trial.

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