Alexin, LLC v. Olympic Metals, LLC
53 N.E.3d 1184
| Ind. Ct. App. | 2016Background
- Alexin (buyer) ordered 40,000 lbs of 2024 aluminum sheets from broker Olympic; purchase order specified "2024 sheets with thin paper in between."
- Olympic delivered ~40,643 lbs total: segregated pallets of 2024 sheets, 2024 extrusions, and 8,060 lbs of 2090 sheets; each pallet was stamped with alloy numbers and a handwritten delivery note identified the 2090 material. Alexin employee stamped "Received" on delivery documents.
- Alexin later melted some material; a batch was scrapped due to high lithium content traced to 2090 alloy. Alexin notified Olympic and ultimately refused to pay; Olympic demanded payment and sought collection.
- Alexin sued Olympic in federal court for breach of warranty and related claims, then voluntarily dismissed and refiled in state court. Olympic counterclaimed for attorneys’ fees under Ind. Code § 34-52-1-1(b), arguing Alexin’s suit was frivolous or was continued after becoming frivolous.
- One week before trial Alexin dismissed its complaint and paid Olympic the invoiced amount; the state trial court found Alexin’s suit frivolous, awarded Olympic its attorneys’ fees and costs, and entered judgment on the counterclaim. Alexin appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether trial court abused discretion in awarding attorney’s fees under Ind. Code § 34-52-1-1(b) | Alexin: its UCC-based warranty and damage claims were viable because seller must tender conforming goods and buyer may recover damages after accepting nonconforming goods; the nonconformity (2090) could be latent given volume and industry practice | Olympic: Alexin inspected, accepted, and comingled clearly marked and segregated 2090 material; Alexin had opportunity to and did inspect—suit was frivolous or continued after becoming frivolous | Affirmed: no abuse of discretion. Court found Alexin accepted the goods, had opportunity to inspect, comingled and used them (causing self-inflicted damages), so its damage claims lacked good-faith merit and fees were proper |
| Whether Alexin could revoke acceptance under UCC § 26-1-2-608 because discovery was difficult or seller made assurances | Alexin: large-volume purchaser reasonably relies on suppliers; discovery before acceptance was impractical and seller’s delivery documents/assurances induced acceptance | Olympic: delivery documents, stamps, segregated pallets and signed handwritten note put Alexin on notice; no latent defect; Alexin failed its own inspection procedures | Held: Revocation not justified. Acceptance was not reasonably induced by difficulty of discovery or seller assurances; defects were discoverable on delivery |
| Whether Olympic was the prevailing party for purpose of fee award | Alexin: contest (implicitly) that Olympic did not sufficiently prevail | Olympic: recovered its invoiced amount before trial and obtained judgment on counterclaim | Held: Olympic is a prevailing party; timely recovery of full counterclaim supports prevailing-party status |
| Whether appellate fees should be awarded under App. R. 66(E) | Alexin: appellate arguments challenged trial findings and preserved issues | Olympic: Alexin misstated/omitted record facts; brief was frivolous | Held: Denied. Court found Alexin’s appeal not permeated by bad faith or frivolity and required a strong showing to award appellate damages |
Key Cases Cited
- Purcell v. Old Nat’l Bank, 972 N.E.2d 835 (Ind. 2012) (standard of review for attorney-fee awards)
- Equicor Dev., Inc. v. Westfield-Washington Twp. Plan Comm’n, 758 N.E.2d 34 (Ind. 2001) (de novo review when findings based on paper record)
- Kahn v. Cundiff, 533 N.E.2d 164 (Ind. Ct. App. 1988) (definition of frivolous claim), adopted, 543 N.E.2d 627 (Ind. 1989)
- Trisler v. Carter, 996 N.E.2d 354 (Ind. Ct. App. 2013) (revocation of acceptance requires defects be difficult to discover or induced by seller assurances)
- Helmuth v. Distance Learning Sys. Ind., Inc., 837 N.E.2d 1085 (Ind. Ct. App. 2005) (standard for awarding appellate damages under App. R. 66(E))
- Scotco Inc. v. Dormeyer Indus., 402 F.2d 336 (7th Cir. 1968) (use of goods after discovery standard affects proximate-cause damages under sales law)