Fitterer v. Mullin, 2015 MT 272 (Sept. 15, 2015) (Shea, J.) (5-0, aff’d & rev’d)
Issue: (1) Whether there was a valid contract between A&C and Fitterer for the sale of fertilizer and chemicals; (2) whether Fitterer is entitled to prejudgment interest; and (3) whether Clint is personally liable for money owed under A&C’s contract with Fitterer.
Short Answer: (1) Yes, as a UCC contracts for goods; (2) yes; and (3) no.
Affirmed on issues 1 & 2, reversed on issue 3, & remanded for entry of an amended judgment
Facts: Fitterer is a North Dakota corporation licensed to do business in Montana. A&C is a Montana corporation, and Clint is the president and sole shareholder. In May 2007, A&C bought fertilizer and chemical from Fitterer on account. Fitterer employee Sara DiFonzo set up the account in the name of Clint’s son, Zach Mullin. No written agreement set forth the terms of the account.
The account became past due in June 2007 and in July 2007. A&C made four payments to Fitterer, totaling $30,000, in late 2008 ad early 2009. At the time of trial, the account balance was over $63,000.
Fitterer sued A&C and Clint personally, claiming it was owed $98,183.91 as of July 31, 2009. It alleged it was due interest of 18% per year.
Procedural Posture & Holding: After languishing for a few years, the case went to trial in December 2014, and the court issued findings, conclusions and an order in January 201 finding that A&C and Clint personally had breached the contract, and ordering them to pay Fitterer $63,149.73 in unpaid principal and $51,248.33 in interest calculated at 10% per year, plus $526.04 per month in prejudgment interest retroactive to Dec. 1, 2014. A&C and Clint appeal, and the Supreme Court affirms in part and reverses in part.
Reasoning: (1) A&C argues that only Clint had authority to bind A&C to a contract, and because he never signed for fertilizer deliveries, no valid contract exists. Fitterer argues this contract is governed by UCC chapter 2, and the Court agrees. A&C ordered, accepted, and used the fertilizer and chemicals delivered by Fitterer. This is sufficient to show agreement and create a valid contract under the UCC.
Whether intentionally or negligently, Clint rendered Zach an ostensible agent of A&C.
(2) All three elements that must be met for a party to be entitled to prejudgment interest are met here. Although A&C contends Fitterer should not benefit from its delays in the legal proceedings, Fitterer notes, and the Court agrees, that A&C could have paid its debt at any time.
(3) Fitterer concedes on appeal that Clint should be dismissed as a defendant, and only A&C should be held liable under the contract.