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08/31/93 COMPUTER SALES INTERNATIONAL v. FAMILY

August 31, 1993

COMPUTER SALES INTERNATIONAL, INC., PLAINTIFF-RESPONDENT,
v.
FAMILY GUARDIAN LIFE INSURANCE COMPANY, DEFENDANT-APPELLANT.



Appeal from the Circuit Court of St. Louis County. Hon. Michael F. Godfrey, Senior Judge.

Albert J. Stephan, Jr., Judge, Gaertner, Gary, C.j., Smith, Gerald, J., concur

The opinion of the court was delivered by: Stephan

This appeal involves an action initiated by Computer Sales International ("CSI") to recover damages incurred when Family Guardian Life Insurance Company ("Family Guardian") breached the contract on the sale of a mainframe computer by refusing delivery. The jury found for CSI and awarded damages of $109,200.00. Both parties stipulated that, in the event of a jury finding in favor of CSI, the court should determine CSI's right to reasonable expenses and attorney fees. The court found CSI entitled to $31,973.81 in interest and $25,257.73 in attorney fees. Family Guardian appeals the judgment awarding CSI a total of $166,431.54 in damages. We affirm.

We view the evidence in the light most favorable to the verdict, considering only that which supports it, and disregarding contrary evidence and inferences. Lane v. Cape Mutual Insurance Co., 674 S.W.2d 644, 645 (Mo. App. 1984). The evidence, viewed in this light, established that on March 16, 1990, Family Guardian contracted to purchase an Amdahl 5880 ("computer") from CSI for $229,000.00. Family Guardian made an initial downpayment on the computer of $45,800.00, with the balance to be paid after its delivery and installation on May 12, 1990. Then, shortly before the May 12 deadline, Family Guardian contacted CSI and requested that delivery of the computer be delayed. The decision to purchase the computer had been vetoed by its parent corporation, and Family Guardian needed the extended delivery date to determine its available options and work towards a resolution of the problem. CSI responded by letter dated May 14, 1990, and agreed to forestall delivery until May 25, 1990. This letter indicated further that if CSI did not receive payment or a satisfactory resolution had not been worked out by this date, then CSI would consider the contract repudiated, and would take immediate steps to resell the computer and look to Family Guardian for any deficiency. CSI sent a similar letter on May 17, 1990, reiterating CSI's intentions to resell the computer in the event Family Guardian breached the contract.

The May 25th deadline passed, and Family Guardian had still not accepted delivery of the computer, or made alternative arrangements with CSI. In fact, Family Guardian failed to initiate any contact with CSI during this period to apprise CSI of its intentions. Meanwhile, the market price of the computer began to drop, so CSI commenced efforts to resell the computer and minimize its losses. CSI told Family Guardian of these efforts in a letter dated June 1, 1990. This letter, sent via facsimile, purported to be formal notice of CSI's intentions to resell the computer within the next ten business days and to assess Family Guardian for any deficiency. The ten day period elapsed without the resale of the computer. On June 14, 1990, CSI sent another letter to Family Guardian stating it was continuing its efforts to resell the computer. Family Guardian received this letter on June 18, 1990.

On June 15, 1990, CSI sold the computer to a third party for $60,000.00. CSI credited Family Guardian's account for the resale amount, along with the initial downpayment of $45,800.00, and $14,000.00 in saved installation and transportation expenses stemming from the breach. CSI asserted the remaining balance of $109,200.00 as a deficiency against Family Guardian, and sued to recover. The jury found in favor of CSI.

On appeal Family Guardian complains that: (1) CSI did not properly plead the notice requirement, (2) CSI did not provide it with "reasonable notice" or the notice required by the sales agreement, (3) instruction No. 5 misled the jury, and (4) the court's award of interest and attorney's fees was improper. Family Guardian alleges in its first point that the trial court erred in allowing CSI to recover the difference between the sales agreement price and the amount received on the resale of the computer because CSI failed to plead that it had provided Family Guardian with the statutory notice requirement for a private sale under § 400.2-706(3), R.S.Mo. 1986. The relevant portions of this statute are as follows:

(1) ...Where the resale is made in good faith and in a commercially reasonable manner the seller may recover the difference between the resale price and the contract price....

(3) Where the resale is at private sale the seller must give the buyer reasonable notification of his intention to resell.

Family Guardian argues that Anheuser v. Oswald Refractories Co., 541 S.W.2d 706, 711 (Mo. App. 1976), stands for the proposition that in order for CSI to recover a deficiency, it must plead and prove that it provided Family Guardian with "reasonable notice" under the statute. In Anheuser, the buyer of a cabin cruiser boat brought suit against the seller to recover $5,000.00 he paid as part of the purchase price for the boat. Id. After buyer repudiated the contract, seller took possession of the boat and later sold it at a private sale. Id. At trial, the seller did not introduce any evidence indicating that he gave buyer reasonable notice of his intention to resell the boat. Id. The court found that § 400.2-706 governed this transaction and that, since seller had not pleaded or proved compliance with this section, the seller was not entitled to recover the difference between the resale price and the contract price. Anheuser, 541 S.W.2d at 711.

The present case is clearly distinguishable. At trial, CSI introduced four letters which it sent to Family Guardian. Each letter announced CSI's intentions to resell the computer and to hold Family Guardian liable for any deficiency. While Family Guardian had objected to the introduction of these letters at a pre-trial conference, it did not properly preserve for our review its complaint that the letters exceeded the scope of the pleadings. During the course of the trial, Family Guardian did not object to the admission of these letters, and, in fact, stipulated to their admission into the record. Therefore, since the letters were allowed in as evidence of notice at trial without objection, we defer to Rule 55.33(b).

Rule 55.33(b) provides that when issues not raised by the pleadings are tried by express or implied consent of the parties, the issues are treated as if they were raised in the pleadings. By not objecting to the admission of the letters at trial, Family Guardian consented to try the issue of whether the letters constituted "reasonable notice" under the statute. We deem the pleadings were amended to conform to the evidence. Thus, any deficiency in CSI's original pleadings was cured by the evidence at trial.

Moreover, the objective of pleadings is to present, define, and isolate the controverted issues to advise the trial court and the parties of the issues to be tried, and to expedite trial on the merits. Walker v. Kansas City Star Co., 406 S.W.2d 44, 54 (Mo. 1966). Certainly Family Guardian was well aware of CSI's intention to resell the computer. Family Guardian acknowledged receipt of all letters sent by CSI informing it of CSI's desire to resell the computer.

Finally, we note that Family Guardian had also pled in its answer, as an affirmative defense, that CSI had failed to plead the notice requirements of § 400.2-706. CSI was then granted leave to amend its pleadings to conform to the notice requirement of § 400.2-706. CSI's general amendment simply stated that "plaintiffs assert its remedies and damages as afforded to it under the Uniform Commercial Code, and specifically Missouri Revised Statutes § 400.2-706." The trial Judge allowed this amendment and found that "no prejudice will result" since Family Guardian was aware ...


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