Stalloy Metals, Inc. v. Kennametal, Inc.
2014 Ohio 4134
Ohio Ct. App.2014Background
- Stalloy contracted to sell Kennametal 120,000 lbs of scrap carbide at $12.25/lb; Kennametal later rejected the shipment after shipment in 2,000-lb drums instead of the 1,000-lb limit.
- Stalloy's president testified Kennametal’s buyer (Burns) orally approved shipping in 2,000-lb drums and e‑mails confirmed the sale; Kennametal later asserted the written terms barred oral modification.
- Trial court originally held the parol-evidence/no-oral-modification clause barred the oral waiver; this court reversed in part and remanded to consider waiver by Kennametal.
- On remand the trial court found Kennametal had waived the 1,000-lb requirement (based on Burns’s representation), so Kennametal wrongfully rejected the goods; the court then required briefing on damages.
- Stalloy resold most of the scrap in private sales at an average of $7.12/lb (~$854,880). Stalloy sought contract damages equal to the contract price minus resale proceeds (~$615,120).
- The trial court denied resale-based damages because Stalloy did not give required buyer notice under Pennsylvania UCC § 2‑706 for private resale; Stalloy also failed to prove market value under UCC § 2‑708. Judgment for Kennametal was affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Kennametal waived its written 1,000‑lb container requirement | Burns orally approved 2,000‑lb drums; Stalloy relied on that and Kennametal waived the writing requirement | Parol evidence / no-oral-modification clause bars reliance on oral modification | Court previously remanded and on remand found waiver proved and breach established |
| Whether Stalloy may recover resale-difference damages after private resale without notice (UCC § 2‑706) | Stalloy sought contract minus resale proceeds despite no notice | Failure to give buyer reasonable notice of private resale bars recovery under § 2‑706 | Stalloy did not give notice; cannot recover under § 2‑706 |
| Whether Stalloy may recover market-value damages under § 2‑708 without having pleaded or proved market value | Stalloy argued alternatively entitlement to contract minus market value under § 2‑708 | Kennametal argued Stalloy never proved market value at time/place for tender | Court held Stalloy failed to present credible evidence of market value; cannot recover under § 2‑708 |
| Whether Stalloy is entitled to prejudgment interest | If damages owed, prejudgment interest should follow | No prejudgment interest because no damages established | No prejudgment interest because no damages awarded |
Key Cases Cited
- Wilson v. Transport Ins. Co., 889 A.2d 563 (Pa. Super. 2005) (statutory interpretation is reviewed de novo and plain language controls)
- Cimino v. Valley Family Medicine, 912 A.2d 851 (Pa. Super. 2006) (statutory construction principles and effect to all provisions)
- Buhl Foundation v. Bd. of Prop. Assessment, Appeals & Review, 180 A.2d 900 (Pa. 1962) (definition of market value)
- Highway Sales, Inc. v. Blue Bird Corp., 504 F. Supp. 2d 630 (D. Minn. 2007) (failure to comply with § 2‑706 notice precludes resale-difference recovery and relegates seller to § 2‑708 market‑value measure)
- Fijalkovich v. W. Bishop Co., 123 Ohio App.3d 38 (Ohio App. 1997) (appellate courts will not consider issues not raised in the trial court)
- Stores Realty Co. v. Cleveland, 41 Ohio St.2d 41 (Ohio 1975) (preservation of issues for appellate review)
- Cresci Constr. Servs. v. Martin, 64 A.3d 254 (Pa. Super. 2013) (prejudgment interest on contract claims reviewed de novo)