Breach of contract; Pricing; Reasonableness under the Uniform Commercial Code (UCC); Reasonable certainty as to damages

In this case arising out of a contract to supply natural gas, the court affirmed the trial court’s order awarding damages to plaintiff/counterdefendant-Dillon, a retail natural gas supplier. Defendant/counterplaintiff-New Products, an automotive supplier, argued “that the trial court clearly erred by awarding damages in Dillon’s favor because it failed to prove that New Products agreed to the price charged for natural gas during the timeframe at issue, it failed to prove that the price it charged for natural gas was reasonable under the [UCC], and it failed to prove its alleged damages with reasonable certainty.” The court disagreed in all respects. The parties’ contract “stated that Dillon agreed to sell, and New Products agreed to purchase, volumes of natural gas ‘at prices negotiated.’” Based on Dillon’s president’s “testimony, the trial court did not clearly err when it found that the parties agreed to the price charged for natural gas during the timeframe at issue. The negotiated . . . price for the supply of natural gas in [2/21] was simply the spot-market price, as contemplated by the parties’ agreement.” The court found that even “if the trial court had clearly erred when it found that the parties agreed to the price charged for natural gas during the timeframe at issue, Dillon’s invoice still reflected a reasonable price under Michigan’s [UCC].” Based on the president’s testimony, “the trial court did not clearly err when it found Dillon’s invoice reflected a reasonable price under Michigan’s [UCC]. Although the price of natural gas spiked in [2/21], New Products elected to purchase natural gas on the spot market and therefore assumed the risk of fluctuating prices. Furthermore, the trial court did not clearly err when it found that Dillon proved its alleged damages with reasonable certainty.” The court concluded that to “the extent that New Products challenges the trial court’s finding based on the credibility of Dillon’s president, the trial court found Dillon’s president to be credible, and we defer to ‘the trial court’s superior ability to judge’” the witnesses’ credibility. Thus, it held that “Dillon’s documentary evidence and supporting testimony was sufficient to establish its alleged damages with reasonable certainty.”