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Humboldt Specialty Manufacturing Co. v. Vanderheiden

Court of Appeals of Nebraska

July 30, 2013

Humboldt Specialty Manufacturing Company, a Nebraska corporation, appellee and cross-appellant,
v.
James A. Vanderheiden, appellee and cross-appellee, and Marketing Management & Associates, Inc., a Nebraska corporation, appellant and cross-appellee.

NOT DESIGNATED FOR PERMANENT PUBLICATION

Appeal from the District Court for Douglas County: J. Michael Coffey, Judge.

Stephen R.W. Twiss, of Sampson, Curry & Twiss, P.C., for appellant and for appellee James A. Vanderheiden.

Allan A. Armbruster, Jr., of Armbruster Law Office, for appellee Humboldt Specialty Manufacturing Company.

Pirtle and Riedmann, Judges, and Mullen, District Judge, Retired.

MEMORANDUM OPINION AND JUDGMENT ON APPEAL

Pirtle, Judge.

INTRODUCTION

In this breach of contract case, the district court for Douglas County previously granted summary judgment in favor of Humboldt Specialty Manufacturing Company (Humboldt) and James A. Vanderheiden. Marketing Management & Associates, Inc. (MMA), filed a motion to alter or amend judgment, which was overruled. MMA now appeals the court's ruling in favor of Humboldt. Humboldt cross-appeals the summary judgment in favor of Vanderheiden and requests additional damages for storage costs and prejudgment interest.

For the reasons that follow, we affirm the district court's summary judgment in favor of Vanderheiden, reverse the grant of summary judgment in favor of Humboldt, and remand the cause for further proceedings consistent with this opinion.

BACKGROUND

In February 2007, James H. Keene III, the president of Humboldt, and Vanderheiden, the president of MMA, met to discuss an agreement under which Humboldt would manufacture products for MMA. The memorandum of understanding (MOU) was drafted by Keene on February 26 and executed by Vanderheiden on March 2. Humboldt was to sell finished product and raw materials to MMA. MMA agreed to purchase raw materials from Humboldt if its purchase orders did not use up the supply of raw materials Humboldt purchased for the manufacture of MMA's finished product. MMA issued purchase orders for finished product until July 7, 2010. MMA sent purchase orders for raw materials on multiple occasions through March 9, 2011, and such orders were filled by Humboldt.

On March 30, 2011, Humboldt sent "Invoice No. 30823" to MMA in the amount of $31, 031.67 for all of the raw materials that had been purchased for the manufacture of the finished product and had not been used at that point. The raw materials were stored by Humboldt, and Humboldt incurred a monthly cost for such storage. MMA did not pay Humboldt the amount listed in "Invoice No. 30823" and did not receive the raw materials listed in the invoice.

On May 18, 2011, Vanderheiden met with Keene and said that he was making his own finished products, buying raw materials from Humboldt's supplier, and that he would buy Humboldt's raw materials as needed. Keene sent a letter requesting shipping instructions and payment.

The purchasing manager for Humboldt authorized MMA to purchase raw materials from Humboldt on June 13, 2011. The letter stated that if the item requested was listed on the invoice sent to MMA, MMA could order it for the price listed on the invoice. On June 13, 14, and 15, MMA issued three separate purchase orders for raw materials which Humboldt refused. Humboldt terminated the MOU on June 15.

Humboldt filed a complaint seeking damages arising from an alleged breach of contract, stating that MMA failed to perform its contractual obligation to buy the remaining, customer-specific, raw materials at the time it stopped using Humboldt as a manufacturer of finished product. Humboldt's complaint requested monetary damages in the ...


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