Obermeyer Hydro Accessories, Inc. v. CSI Calendering, Inc.
2017 U.S. App. LEXIS 5519
| 10th Cir. | 2017Background
- Obermeyer (Colorado) bought fabric sheets from CSI (Texas) and had CSI calender (embed rubber) into sheets; calendering doubles weight.
- Prior practice: CSI quoted and invoiced fabric at untreated weight ($3.74/lb in Oct 2012) and calendering at treated weight ($2.23/lb quoted Dec 3, 2012); invoices were typically separate and Obermeyer often paid late.
- January 10–11, 2013: parties exchanged purchase orders and CSI sent a January 11 quote listing ‘‘Polyester Tire Cord Only’’ $3.74 and ‘‘Calendering, Compound & Poly Only’’ $2.23, with a combined line that CSI treated as $5.97 per pound of calendered product (treated pricing). Obermeyer read it as unchanged separate prices (untreated pricing).
- CSI shipped 21 calendered shipments (402,365 lbs) from Jan–June 2013 and sent invoices reflecting $5.97 treated pricing; Obermeyer paid ~21 invoices Feb–Oct 2013 (~$2M) but later contested the increased cost and stopped payment.
- Obermeyer sued for breach of contract and related claims; district court granted summary judgment for CSI. The Tenth Circuit reversed and remanded, finding disputed facts precluded summary judgment.
Issues
| Issue | Obermeyer’s Argument | CSI’s Argument | Held |
|---|---|---|---|
| Whether a contract existed before Jan 11 | Parties had agreed to $3.74/lb (untreated) for fabric and $2.23/lb (treated) for calendering via Oct–Dec quotes and Dec/Jan POs | No final contract until Jan 11 quote; earlier quotes were separate offers | Jury question; reasonable evidence supports a pre-Jan 11 contract at prior rates |
| Whether Jan 11 quote modified price to $5.97 treated pricing | Jan 11 did not clearly notify a price change; quote restated prior line items and used unfamiliar term “turnkey” without explanation | Jan 11 quote unambiguously switched to treated pricing and created new contract | Modification requires mutual consent; factual dispute exists — for jury |
| Whether Obermeyer accepted new pricing by paying invoices | Payments were made in good faith under belief pricing unchanged; no clear notice of increase | Acceptance via course of performance: repeated invoice submissions + payments = assent | Whether Obermeyer had knowledge or should have known is a jury question |
| Whether CSI’s intended meaning should control (negligent assent) | Obermeyer lacked notice; CSI didn’t explain change; objective and subjective good faith required under Texas law | CSI invokes Restatement negligent-assent/should-have-known to impose its meaning | Applicability depends on whether Obermeyer had reason to know; disputed fact for jury |
Key Cases Cited
- Higby Crane Serv., LLC v. Nat’l Helium, LLC, 751 F.3d 1157 (10th Cir.) (summary-judgment review standard)
- Bird v. West Valley City, 832 F.3d 1188 (10th Cir.) (definition of genuine dispute and material fact at summary judgment)
- Carolina Cas. Ins. Co. v. Nanodetex Corp., 733 F.3d 1018 (10th Cir.) (applying governing law chosen by parties)
- Preston Farm & Ranch Supply, Inc. v. Bio-Zyme Enters., 625 S.W.2d 295 (Tex.) (buyer’s knowledge/should-have-known test for pricing disputes)
- Arthur J. Gallagher & Co. v. Dieterich, 270 S.W.3d 695 (Tex. App.) (contract modification is fact question requiring mutual consent)
- Ghidoni v. Stone Oak, Inc., 966 S.W.2d 573 (Tex. App.) (modification requires notice and acceptance)
- Copeland v. Alsobrook, 3 S.W.3d 598 (Tex. App.) (meeting of the minds judged by objective standard)