P.E. Systems, LLC v. CPI Corp.
289 P.3d 638
Wash.2012Background
- P.E. Systems (PES) offered to analyze CPI Corporation's card processing costs and both signed PES's standard agreement.
- CPI repudiated the contract and PES sued for breach.
- CPI attached the contract and moved for judgment on the pleadings alleging an unenforceable agreement to agree because Addendum A was blank.
- PES responded with the contract again and a PowerPoint describing PES's method; trial court dismissed on pleadings.
- Court of Appeals reversed, holding the contract enforceable and CPI breached; remanded for damages; Supreme Court granted review.
- Supreme Court held the contract is a valid contract with an open term (Historic Cost) and that attachment of the contract to pleadings makes it part of the pleadings, but the PowerPoint is extrinsic evidence and did not require conversion to summary judgment; remanded for further proceedings on damages.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether attaching the contract to pleadings makes it part of the pleadings | PES contends attachment does not render contract part of pleadings. | CPI contends attachment makes contract part of pleadings for CR 12 motions. | Attachment makes contract part of the pleadings for CR 12(b)/(c) motions. |
| Whether the PowerPoint is admissible on a CR 12(c) motion | PES argues it clarifies contract terms as admissible extrinsic evidence. | CPI argues it is extrinsic and could convert to summary judgment if admitted. | PowerPoint is extrinsic evidence; did not compel conversion since court did not consider it. |
| Whether the contract is enforceable with an open term (Historic Cost) | PES argues the open term addendum is immaterial; the fixed formula suffices. | CPI argues the missing addendum prevents definite terms. | Contract is enforceable with an open term; addendum immaterial; historic cost computable. |
| Whether dismissal on the pleadings was proper | PES contends dismissal was improper because mutual assent existed on material terms. | CPI argues no binding contract due to open term. | Dismissal improper; contract enforceable; remand for damages proceedings. |
Key Cases Cited
- Keystone Land & Dev. Co. v. Xerox Corp., 152 Wn.2d 171 (2004) (mutual assent and open terms; contract formation standards)
- Sandeman v. Sayres, 50 Wn.2d 539 (1957) (requirements for definite terms in contracts)
- Wash. Shoe Mfg. Co. v. Duke, 126 Wn.2d 510 (1923) (objective manifestation theory of contract formation)
- Rose v. Bartle, 871 F.2d 331 (3d Cir. 1989) (attachment of documents to pleadings under CR 10(c))