358 P.3d 885
Mont.2015Background
- A&C Soaring Eagle, Inc. (A&C), a Montana corporation run by Clint Mullin Jr., purchased fertilizer and chemicals from Fitterer Sales Montana, Inc. on an account originally opened in the name of Clint’s son, Zach (Account No. 1577).
- Purchases occurred in May–June 2007; deliveries were often left without a customer signature (industry practice). Clint signed two delivery tickets in May 2007 and later asked the account name be changed to A&C.
- A&C accepted and used the goods and received monthly statements in May–July 2007 without disputing charges. The account became past due in June–July 2007.
- Fitterer sued A&C and Clint in 2009 for unpaid balances; after a bench trial the district court awarded Fitterer $114,398.06 (principal plus interest) and monthly prejudgment interest.
- On appeal the Supreme Court of Montana affirmed that a binding contract existed between A&C and Fitterer, upheld the award of prejudgment interest, but agreed Clint should be dismissed as an individual defendant and remanded to amend the judgment.
Issues
| Issue | Fitterer’s Argument | A&C/Clint’s Argument | Held |
|---|---|---|---|
| Existence of a binding contract for sale of goods | Conduct (orders, acceptance, use) created a UCC contract for goods | No valid contract: only Clint could bind A&C and he did not consent; Zach lacked authority | Held: UCC governs; acceptance/use and account statements created a binding contract; ostensible agency and ratification by A&C applied |
| Entitlement to prejudgment interest | Prejudgment interest allowed under §27-1-211 because debt was liquidated and vested when due | No interest: dispute over contract existence and delay in prosecution mean right did not vest | Held: Prejudgment interest proper—debt was a definite monetary obligation capable of calculation and vested when accounts became due; delay by plaintiff did not bar interest |
| Personal liability of Clint | Fitterer initially sought recovery from Clint and A&C | Clint argued no personal liability; corporate separation maintained | Held: Trial court’s finding of personal liability not sustained on appeal; Supreme Court remanded to dismiss Clint individually |
Key Cases Cited
- Conagra, Inc. v. Nierenberg, 7 P.3d 369 (Mont. 2000) (standard for reviewing findings of fact and permissive UCC contract-formation principles)
- DiMarzio v. Crazy Mountain Constr., Inc., 243 P.3d 718 (Mont. 2010) (three-part test for prejudgment interest: underlying obligation, amount determinable, right vested on a date)
- Price Bldg. Serv. v. Holms, 693 P.2d 553 (Mont. 1985) (delay in prosecution does not alone bar prejudgment interest)
- Sunset Point P’ship v. Stuc-O-Flex Int’l, Inc., 954 P.2d 1156 (Mont. 1998) (definition and requirements for ostensible agency)
- Serrania v. LPH, Inc., 347 P.3d 1237 (Mont. 2015) (authority for interest on money after it becomes due on an account stated)
