Melford Olson Honey, Inc. (Mel-O), a Minnesota honey wholesaler, sued Richard Adee (Richard) doing business as Adee Honey Farms (Adee Honey), a South Dakota honey farmer, in Minnesota state court for breach of contract and specific performance, alleging Adee Honey failed to provide the requisite quantity of honey set forth in a June 2002 contract. Adee Honey removed the case to federal court on diversity jurisdiction and counterclaimed for money owed under the same contract. The district court
1
denied both parties’ motions for partial summary judg
I
Adee Honey, formed by Richard in 1957, operates honey farms in California, Nebraska, Mississippi, and South Dakota. Adee Honey’s principal place of business is in South Dakota. Mel-0 is owned by William Sill, and Curt and Darcy Riess. They bought the company in 1997 and were referred to Richard by Mel-O’s prior owners.
In March 2002, Adee Honey and Mel-0 entered into an oral agreement for the sale of honey. At the time, Adee Honey possessed a sufficient inventory of honey and agreed to sell approximately thirty loads, or 1.5 million pounds, 2 to Mel-0 for 82$ per pound. Shortly thereafter, Mel-0 sent a purchase order to Adee Honey memorializing the sale of 1.5 million pounds of honey for 82$ per pound. The purchase order noted it was a contract with a “Good Thru” date of April 11, 2002. It was sent to Adee Honey’s South Dakota office although Mel-0 allegedly knew Richard was working at the Mississippi facility until mid-June.
At approximately the same time, Adee Honey called Mel-0 to discuss the possibility of selling up to twelve loads of its inventoried honey to a competitor. According to Adee Honey, Mel-0 agreed, thereby altering the quantity term of the March 2002 contract. According to Mel-O, it permitted Adee Honey to sell twelve loads of inventoried honey to another distributor, provided the terms of the March 2002 contract were fulfilled with other honey. Between the months of May and September 2002, Adee Honey sent Mel-0 eighteen loads of honey at 82$ per pound.
In May 2002, honey prices began to rise due to a contamination in major Chinese honey supplies. In June 2002, Mel-0 contacted Adee Honey about purchasing an additional 3.2 million pounds, and the parties agreed on a $1.00 per pound purchase price for the additional quantity. Mel-0 sent a contract to Adee Honey detailing the new arrangement, and Richard added a handwritten force majeure clause, specifically excusing performance in the event of “an act of God such as a drought or flood.”
Later in the summer of 2002, South Dakota was experiencing drought-like conditions, and Adee Honey unilaterally stopped performing its obligations under the June contract. According to Mel-O, Richard contacted it to discuss the possibility of increasing the price of honey by 10$ per pound to cover losses Adee Honey would suffer due to the production shortage. By the time Mel-0 grudgingly decided to accept the terms, Adee Honey instead stated the new price would be $1.55 per pound instead of $1.00 to $1.10 per pound.
In the early fall of 2002, Adee Honey began delivering honey to Mel-0 at an invoice price of $1.55 per pound. Mel-O, however, refused to pay for this honey. By November 2002, its account was roughly $1.7 million in. arrears. In November and December, Mel-0 paid Adee Honey 82$ per pound for approximately 575,000 pounds received,
3
claiming this honey ful
II
Mel-0 initiated this lawsuit claiming a breach of the June 2002 agreement, 6 requesting specific ' performance and damages. Adee Honey counterclaimed for the balance due on Mel-O’s account. Both parties unsuccessfully moved for summary judgment, and the case proceeded to a jury trial. At trial, Mel-0 submitted the following evidence of damages owed: 1) its owner Curt Reiss stated it would cost an average of $1.34 per pound to replace the honey; 2) a former Mel-0 employee, James Jackson, computed diminished profits based on a comparison of yearly sales figures and the increased price of honey; and 3) Jackson testified as to potential accounts lost by Mel-0 due to the $1.55-per-pound price insisted upon by Adee Honey.
The district court instructed the jury on the statute of frauds. The instruction stated oral contracts for the sale of goods over $500.00 are generally unenforceable. However, if the parties agree the contract exists, “Minnesota law provides that the March 2002 oral contract is enforceable, but not beyond the quantity of goods admitted by the party against whom enforcement is sought which, in this case, is Adee Honey.” Mel-0 did not object to this instruction or request any other instructions on the statute of frauds. On the Special Verdict, the jury determined Adee Honey breached the June 2002 agreement and the breach was not excused by force majeure or commercial impracticability. Because of this breach, the jury determined Mel-0 was entitled to $235,950 for expenses and $225,000 for lost profits. With respect to Adee Honey’s counterclaim, the jury determined Mel-0 breached the June contract by paying only 82$ per pound for honey invoiced at $1.55 per pound. For this breach, the jury awarded Adee Honey $75,000. 7 Additionally, the jury determined Mel-0 owed $620,206 for the 620,206 pounds of honey for which it had never paid.
Both parties unsuccessfully moved for judgment as a matter of law and new trial. In ruling on the post-trial motions, the district court found Mel-0 had waived any argument concerning the merchant’s exception to the statute of frauds by failing to request a jury instruction on it. Additionally, the court determined Mel-0 could not satisfy the statutory standard. With respect to damages, the court upheld the jury’s determinations as reasonable, de
Ill
A. The Statute of Frauds
The district court refused to grant either party’s motion for summary judgment, a directed verdict, or other post-judgment relief on the basis of the statute of frauds. We review the district court’s determination as to the applicability of the statute of frauds de novo.
Simmons Foods, Inc. v. Hill’s Pet Nutrition, Inc.,
Generally, the Minnesota statute of frauds provides oral contracts for the sale of goods for $500.00 or more are unenforceable “unless there is some writing sufficient to indicate that a contract for sale has been made between the parties and signed by the party against whom enforcement is sought.” Minn.Stat. § 336.2-201(1). The statute is applicable because the March 2002 contract for the sale of honey, goods priced over $500.00, was not reduced to writing and signed by Adee Honey, the party against whom enforcement was sought.
Adee Honey, however, admitted it contracted with Mel-0 for eighteen loads of honey, and this admission constitutes an exception to the statute. Minn.Stat. § 336.2 — 201(3)(b) (noting a contract otherwise within the statute may be enforced against a person who “admits in pleading, testimony or otherwise in court that a contract for sale was made,” but not “beyond the quantity of goods admitted”). The jury thus was entitled to determine the March 2002 contract was enforceable for up to eighteen loads of honey.
Mel-O claims the entire quantity of 1.5 million pounds noted in its purchase order should be outside of the statute of frauds pursuant to the merchant’s exception. Because Mel-0 did not object to the jury instructions regarding the statute of frauds, it has not preserved this issue for appeal.
Daggitt v. United Food & Com. Workers Int’l Union, Local 304A, 245
F.3d 981, 985 (8th Cir.2001). We therefore limit our review of this issue to determine if the district court plainly erred.
Id.
(noting reversal is only warranted in “the exceptional case” in which the error “seriously affected the fairness, integrity, or public reputation of judicial proceedings”) (quoting
Figge Auto Co. v. Taylor,
Under the merchant exception, Minnesota law provides:
(2) Between merchants if within a reasonable time a writing in confirmation of the contract and sufficient against the sender is received and the party receiving it has reason to know its, contents, it satisfies the requirements of subsection (1) [regarding the general applicability of the statute of frauds] against such party unless written notice of objection to its contents is given within ten days after it is received.
Minn.Stat. § 336.2-201(2). Whether the parties have satisfied the statute of frauds is a question of law.
Upsher-Smith Labs., Inc. v. Mylan Labs., Inc.,
No specific form is required to meet the merchant’s exception. A writing referring to a phone call between the parties and evidencing the type of products involved and their quantity will satisfy the statute.
See id.; Upsher-Smith Labs,
We hold the purchase order sent by Mel-0 to Adee satisfies the requirements of the merchant’s exception to statute of frauds. The purchase order was sent to Adee’s principal place of business in a timely manner, Adee had reason to know why it was sent, and Adee did not object to the terms set forth in the document.
See Bazak Intern. Corp.,
Once the merchant’s exception has been satisfied, the district court may submit the evidence of the contract to the jury so the jury can determine its existence and the terms.
Upsher-Smith Labs.,
B. Force Majeure
Adee Honey next argues the district court erred in not granting its motions for
The June 2002 contract contains a handwritten force majeure clause. Next to the 3.2 million-pound quantity, Richard added: “provided production of said pounds is NOT impeded by an Act of God such as by drought or flood.” Neither party disputes whether the clause is enforceable or whether drought conditions occurred in the summer of 2002, potentially triggering the clause. Instead, the parties dispute the legal effect of the clause and the parties’ continuing obligations under the contract.
The effect of a
force majeure
clause is to excuse performance in the event an unforseen circumstance occurs.
See Suburban Newspapers of Greater St. Louis, Inc. v. Kroger Co.,
The district court determined the contract language was ambiguous because questions existed as to the severity of the drought, Adee Honey’s ability to meet its contractual obligations, and Adee Honey’s right to request additional money for honey under the June contract. Because the force majeure clause does not include language explicitly resolving any of these issues, the district court did not err in submitting these issues to the jury. The jury determined Adee Honey was not excused from performing the June 2002 contract, and we do not disturb these factual findings supported by the record. 9
C. Commercial Impracticability
Adee Honey alternatively argues the district court should have granted its summary judgment and post-verdict motions on the grounds of commercial impracticability. We review de novo,
Top of Iowa Co-op.,
The Minnesota Supreme Court recognized the “Uniform Commercial Code provision governing excuse of performance has replaced the common-law requirement of impossibility of performance by a less stringent standard of commercial impracticability.”
Barbarossa & Sons, Inc. v. Iten
Except so far as a seller may have assumed a greater obligation and subject to the preceding section on substituted performance:
(a) Delay in delivery or nondelivery in whole or in part by a seller who complies with paragraphs (b) and (c) is not a breach of duty under a contract for sale if performance as agreed has been made impracticable by the occurrence of a contingency the nonoccurrence of which was a basic assumption on which the contract was made or by compliance in good faith with any applicable foreign or domestic governmental regulation or order whether or not it later proves to be invalid.
(b) Where the causes mentioned in paragraph (a) affect only a part of the seller’s capacity to perform, the seller must allocate production and deliveries among the seller’s customers but may include regular customers not then under contract as well as the seller’s own requirements for further manufacture. The seller may so allocate in any manner which is fair and reasonable.
(c) The seller must notify the buyer seasonably that there will be delay or nondelivery and, when allocation is required under paragraph (b), of the estimated quota thus made available for the buyer.
Minn.Stat. § 336.2-615. Under this doctrine, commercial impracticability excuses performance of both parties to the contract.
Barbarossa & Sons,
Although the availability of the commercial impracticability defense is a legal issue, a jury must determine whether the facts involved in the case sufficiently support such a defense.
See Selland Pontiac-GMC, Inc. v. King,
D. Anticipatory Repudiation
Adee Honey next argues its performance was excused as a matter of law because Mel-0 committed either an anticipatory repudiation of the contract or breached the contract without cure. These issues, raised in its motions for summary judgment and post-trial relief are reviewed de novo,
Top of Iowa Co-op.,
Adee Honey claims Mel-0 breached, anticipatorily or otherwise, by not paying money owed on its accounts, and this breach was established when Mel-
Further, it is claimed Mel-0 breached the June 2002 contract by not paying for the honey, and this breach constituted an uncured, material breach excusing Adee Honey’s remaining performance under the contract.
See Home Ins. Co. v. Nat’l Union Fire Ins. of Pittsburgh,
E. Jury Instructions
Adee Honey also challenges the jury instructions given and the wording of the Special Verdict. District courts have great discretion in fashioning jury instructions, and we will not reverse a jury determination if the instructions “viewed on the whole, fairly and adequately represent the evidence and applicable law in light of the issues presented to the jury.”
Smith v. Tenet Healthsystem, SL, Inc.,
Adee Honey claims the district court erred in the wording of Special Verdict question “2.”: “Did the
force majeure
clause in the June 2002 contract, or commercial impracticability, excuse Adee Honey from delivering all of the honey specified in the June 2002 contract, and at the price of $1.00 per pound?” According to Adee Honey, this created a “nearly insur
Adee Honey also claims error in the court’s decision to not include an instruction or Special Verdict entry regarding anticipatory repudiation. This claim is waived because it failed to request a jury instruction on the issue as required by Federal Rule of Civil Procedure 51.
Daggitt,
F. Damages
Finally, the parties both dispute the amount of damages awarded. Because these issues were raised in the parties’ post-trial motions, we review the district court’s ruling de novo while resolving all factual questions in favor of the verdict reached. To the extent this case involves the application of state law, we review those determinations de novo.
Wheeling Pittsburgh Steel Corp. v. Beelman River Terminals, Inc.,
Under Minnesota law, incidental damages are recoverable and include expenses reasonably incurred “in connection with effecting cover and any other reasonable expense incident to the delay or other breach.” Minn.Stat. § 336.2-715(1). A party’s failure to cover can limit a prevailing party’s ability to receive such damages, including lost profit damages.
See Barry & Sewall Indus. Supply Co. v. Metal-Prep of Houston, Inc.,
In this case, the jury awarded Mel-0 $235,950 in damages resulting from Adee Honey’s failure to provide sufficient
With respect to lost profits, Mel-0 bears the burden of showing the profits were foreseeable at the time of contracting.
Hydra-Mac, Inc. v. Onan Corp.,
Finally, we refuse to adjust downward the finding of the jury in which Mel-O should have paid $620,206.00 on the 620,206 pounds of honey for which it did not pay. It claims this figure should be reduced to $603,904.84 due to an earlier overpayment made to Adee Honey. The damages award rendered, however, need not match any certain projected number provided the award falls within the mathematical limitations set forth by the witnesses and the trial evidence as a whole.
Children’s Broad. Corp. v. Walt Disney Co.,
IV
Accordingly, we affirm.
Notes
. The Honorable Michael J. Davis, United States District Judge for the District of Minnesota.
. One load, or truckload, contains approximately 43,000 pounds. Although thirty loads would equal closer to 1.29 million pounds of honey, the parties disputed whether the March 2002 contract was for thirty loads, 1.5 million pounds, or a different quantity.
. The Special Verdict form, however, asked the jury if Mel-0 breached the “June 2002
. According to Mel-O, it paid the invoiced amount for honey received prior to November 2002. Only after Adee Honey began invoicing the honey at $1.55 per pound did Mel-0 determine the March 2002 contract had not been fulfilled, so it paid Adee Honey 82$ per pound for approximately 575,000 pounds to satisfy the first contract.
. Mel-0 contends it made an overpayment to Adee Honey on some honey received and, therefore, does not owe the entire $602,206.
. Mel-0 did not seek enforcement of the March 2002 agreement because it paid 82$ per pound for roughly 1.5 million pounds of honey delivered. Instead, it sued Adee Honey alleging non-performance of the June 2002 contract.
. How the jury arrived at this damages calculation is unclear. If the jury believed this honey should have been invoiced at $1.00 per pound, the resulting damages would have been $99,247.32, or an additional 18$ per pound for 551,374 pounds. Instead, the damages awarded represent an underpayment of 13$ per pound.
. In its order denying post-trial relief, the district court erred in determining the purchase order was actually an offer, rather than ' a confirmation. Although some documents can be viewed as offers,
see W.H. Barber Co. v. McNamara-Vivant Contracting Co., Inc., 293
. Adee Honey claims the district court and jury's interpretation of the force majeure clause rendered the clause meaningless. We disagree. The force majeure clause would allow Adee Honey to stop performance if the jury determined a drought occurred. It would not, however, give Adee Honey the unilateral right to raise the price of honey under the contract simply because the production of honey was less than expected.
Additionally, we reject Adee Honey’s claim that the district court's interpretation of the force majeure clause transformed the June 2002 contract into an output contract. Although Adee Honey may not have produced enough honey in the summer of 2002 to satisfy all of its contractual requirements, such circumstances did not transform any of its obligations into output contracts.
. The definitions of incidental and consequential damages, Minn.Stat. § 336.2-715, however, require the buyer to make a reasonable attempt to cover to be eligible for these damages, even under the "market minus contract” damages formulation.
