J.O. Hooker & Sons v. Roberts Cabinet Co. (a.k.a. who wants these stupid cabinets anyway?)

J.O. Hooker & Sons v. Roberts Cabinet Co.
499 U.S. 585 (1991)

Justice P.J. Prather delivered opinion

Facts:

• 1991, Hooker served as general contractor for renovation of residence owned by Bessemer Public Housing Authority (BPHA) in Bessmer, AL
  
• BPHA had option to keep or salvage fixtures that needed to be torn out during renovation
  
• If BPHA wanted to keep, Hooker would remove cabinets and move them to location provided by BPHA
• If BPHA wanted to salvage, cabinets would become property of Hooker after he removed them
  
• Hooker subcontracted to Roberts Cabinet Co.
  
• Roberts contract required him to "furnish cabinet tops, plastic laminates on walls...per plans and specs for the price listed below" and also provided that "the price includes the cost of tear-out...old cabinets and installation of new cabinets"

• Roberts informed Hooker underestimated cost of job and demanded an addtl $23,000, which Hooker argued had no choice but to pay given time constraints of job
• Dispute arose over who was responsible to dispose of cabinets as BPHA req'd in gen. contract
• Roberts contends not obligated, Hooker argued that "as per specs and plans" language incorporated language between gen. contract (Hooker and BPHA)
• Dec. 18, 1991, Hooker faxes Roberts on advice from lawyer that their contract was null and void, offering to buy cabinets that were already constructed from Roberts
• Parties unable to reach an agreement, Roberts files suit against Hooker alleging Hooker breached subcontract agreement w/ Roberts after he'd started
• Nearly a year later (Dec. 10, 1992), trial is held to determine damages suffered by Roberts as a result of Hooker's actions
• Jury awarded $42,870 in damages to Roberts
• Jan. 1993, trial ct denied Hooker's motion for a new trial or remittitur of the jury's verdict and Hooker files an appeal
• contract in question should be interpreted in context of Article 2 of the UCC, Miss. Code Ann. §75-2-101 et seq., bec' transaction involved was for the sale of goods, namely cabinets
• sites no authority for this and Roberts does not address the issue
  
• No Mississippi cases directly on this point, ct finds case did involve sale of goods but dispute related to performance of services and delegation of duties per contract
• Roberts originally requested $51,309.29 in damages; cross-examination shows figure overestimated lost profits, damages requested lowered to $43,050.95
• Hooker disputes including storage of cabinets, administrative cost, and lost profits
• Hooker unsuccessfully argues 26% profit expected by Roberts is out of line with industry standards (sort of)
• Also some dispute over the daily manufacturing output of Roberts' factory, and what should be included in lost profits - Hooker wants 4-day shut down only but isn't really successful with this line of argument either; per ct, bids are rarely require exact proof as to what costs and profits would have been and Hooker compares his profits as a gen. contractor to those by Roberts as a manufacturer/subcontractor (implying that maybe if Hooker had brought in other figures by folks in Roberts' line of work, he might have been able to sway the ct in regards to what was reasonable for Roberts to expect for profits from the job?)
  

Issue:
1. Does Article 2 of the UCC apply to mixed transactions that include both goods and services?

2. Is Roberts able to get damages for storage of cabinets and administrative costs and lost profits?

Holding: 1. In a mixed transaction, whether or not the contract should be interpreted under UCC or general contract law depends on nature of the contract and upon whether the dispute in question primarily concerns goods furnished or the services rendered under the contract - this case doesn't concern cabinets manufactured but refusal of Roberts to assume duties which Hooker contractually obligated itself to perform

2. Roberts not able to receive damages related to storage costs, can only recover for expenses it would not have incurred but for Hooker's breach; Roberts expenses in paying Kevin Roberts were same whether or not Hooker breached contract so Roberts is entitled to damages for administrative costs

Ct's purpose re: lost profits is to put the injured party (Roberts) in as good a position as he would have been in but for the breach; jury was correct in using expectation damages to award lost profit expenses to award; this was "entirely proper" Yay!

Reasoning:

• Roberts already had space in storage, did not have to rent more space or pay more because he was using space already rented, also using said space did not create a need to rent addtl space to store items for other jobs
• allowing recovery of storage costs would place Roberts in better position that if contract was completed
• Reasonable to assume subcontractor (Roberts) included in his bid estimate the cost of salaries, which he is req'd to pay his employees
• 22 AmJur2d "Damages" §45 -
  

  Contract damages are ordinarily based on the injured party's expectation interest and are intended to give him the benefit of the bargain by awarding him a sum of money that will, to the extent possible, put him in as good a position as he would have been in had the contract been performed.

Judgment: Affirmed on condition of remittitur; if remittitur refused, reversed and remanded for a new trial on damages only