Koviack Irrigation and Farm Services v. Maple Row Farms LLC
331327
| Mich. Ct. App. | Sep 21, 2017Background
- Koviack sold irrigation components (pump and control panel) to Maple Row and assisted with system design/installation; pump arrived late and was stored until spring.
- In spring, Koviack refused further installation assistance until Maple Row paid; Maple Row refused to pay until equipment proved to work and hired another specialist to install it.
- The independent specialist concluded the pump was incompatible with Maple Row’s retention pond; Maple Row bought a different pump and did not pay Koviack for the original pump/panel.
- Koviack sued for breach of contract, account stated, and unjust enrichment; Maple Row counterclaimed that the supplied equipment was improper and not corrected by Koviack.
- At a two-day bench trial the court found Maple Row properly rejected the pump and panel under the UCC, ordered Maple Row to return the equipment to Koviack at Maple Row’s expense, and awarded Maple Row case-evaluation sanctions of $11,362.50; Koviack appeals.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Maple Row timely rejected the goods under the UCC | Rejection was untimely because pump was delivered earlier and plaintiff waited too long | Delivery late in season and pump remained boxed; reasonable to wait until installation to test conformity | Timely — rejection in spring was reasonable under the circumstances |
| Whether Maple Row gave seasonable notice of rejection | No formal written notice was given so rejection was ineffective | Plaintiff had actual notice (refusal to install absent payment; discussions with salesman) and ceased communications | Held effective — plaintiff had notice and plaintiff’s conduct put it on notice of potential rejection |
| Whether the case-evaluation award (return of pump) improperly granted equitable relief | Awarding return of pump was equitable relief barred by MCR 2.403(K)(3) | Return of goods under the UCC is a legal/statutory remedy, not equitable relief | Not equitable — UCC remedy is legal; award did not violate MCR 2.403(K)(3) |
| Whether defendant was entitled to case-evaluation sanctions and whether amount was reasonable | Koviack contends trial verdict was more favorable than evaluation and challenges fee/hours billed | Maple Row argues verdict was not more favorable and fees/hours (including expert time) were reasonable | Sanctions affirmed: verdict not more favorable than evaluation; trial court did not abuse discretion in awarding $11,362.50 |
Key Cases Cited
- Trahey v. City of Inkster, 311 Mich. App. 582 (discusses standard of review for bench-trial factual findings)
- Kelynack v. Yamaha Motor Corp., U.S.A., 152 Mich. App. 105 (reasonableness of time to reject complex goods depends on nature and circumstances)
- Capitol Dodge Sales, Inc. v. Northern Concrete Pipe, Inc., 131 Mich. App. 149 (buyer may test complex goods before determining conformity)
- Fargo Machine & Tool Co. v. Kearney & Trecker Corp., 428 F. Supp. 364 (reasonableness of informal notice in UCC contexts)
- Forest City Enterprises, Inc. v. Leemon Oil Co., 228 Mich. App. 57 (distinguishing equitable issues from equitable relief under case evaluation rules)
- Davis v. Forest River, Inc., 278 Mich. App. 76 (UCC remedies are statutory and distinguishable from traditional equitable rescission)
- Henderson v. Chrysler Corp., 191 Mich. App. 337 (UCC remedies classified as actions at law)
- Van Elslander v. Thomas Sebold & Assoc., Inc., 297 Mich. App. 204 (standard of review and principles for case-evaluation sanctions)
- Smith v. Khouri, 481 Mich. 519 (guidelines for determining reasonable attorney fees)
- Wood v. Detroit Auto Inter-Ins Exch., 413 Mich. 573 (factors for fee adjustments)
- AFT Michigan v. Michigan, 303 Mich. App. 651 (unjust enrichment is an equitable theory)