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Peterbilt of Fargo, Inc. v. Red River Trucking, LLC

Supreme Court of North Dakota

June 1, 2015

Peterbilt of Fargo, Inc., Plaintiff and Appellee
v.
Red River Trucking, LLC, State Bank of Hawley, Defendants Red River Trucking, LLC, Appellant

Page 277

Appeal from the District Court of Cass County, East Central Judicial District, the Honorable Steven E. McCullough, Judge.

Caren L. Wanner Stanley, P.O. Box 1389, Fargo, N.D. 58107-1389, for plaintiff and appellee.

Stephen P. Welle (argued) and Sean T. Foss (on brief), P.O. Box 2105, Fargo, N.D. 58103, for appellant.

Dale V. Sandstrom, Daniel J. Crothers, Lisa Fair McEvers, Gary H. Lee, D.J., Gerald W. VandeWalle, C.J. Opinion of the Court by Sandstrom, Justice. The Honorable Gary H. Lee, D.J., sitting in place of Kapsner, J., disqualified.

OPINION

Page 278

Dale V. Sandstrom, Justice.

[¶1] Red River Trucking, LLC, appeals from an amended judgment determining Peterbilt of Fargo, Inc., had a valid repairman's lien for completed repairs to a truck owned by Red River Trucking, Peterbilt breached a contract with Red River Trucking to repair the truck, and Red River Trucking was entitled to $390.66 in damages for Peterbilt's breach of the repair contract. We conclude Red River Trucking's appeal from the amended judgment is timely and issues about damages for breach of the repair contract are not moot because of the subsequent sheriff's sale of the truck. We also conclude the district court did not clearly err in finding Red River Trucking failed to mitigate its damages and in awarding Red River Trucking $390.66 in damages for Peterbilt's breach of the repair contract. We affirm.

I

[¶2] Patrick Larkin formed Red River Trucking in 1996 to engage in the commercial hauling of gravel and aggregate, and he owned three trucks for his business, the PT 2, the PT 3, and the PT 4. In November 2010, the PT 2 (" the truck" ) sustained considerable damage in an accident and was taken to Peterbilt for repairs. At the time of the accident, the truck was worth about $22,500. Red River Trucking's insurance company determined the damage to the truck exceeded its value and paid Red River Trucking and a bank lienholder $22,500 for the truck in February 2011. Red River Trucking decided to keep the truck with a salvaged title and to have it repaired. Red River Trucking and Peterbilt executed a " repair order worksheet" in January 2011 in which Peterbilt agreed to repair the truck for an estimated cost of $37,505.65 and Red River Trucking agreed to pay Peterbilt " cash" for the repairs. The parties agree the contract required the repairs to be completed by May 1, 2011, and the term " cash" meant payment was due after the repairs were completed.

[¶3] According to Peterbilt, it became concerned about Red River Trucking's ability to pay for the repairs because of the relative value of the truck to the total cost of the repairs and because Red River Trucking had failed to pay Allstate Peterbilt Group, a business affiliated with Peterbilt, for a rented replacement truck. Peterbilt

Page 279

stopped repair work on the truck on March 23, 2011, after making repairs valued at $31,346.65. According to Steve Mikkelson, Peterbilt's body shop manager, he advised Larkin in March 2011 that Peterbilt would not continue repairs on the truck until Red River Trucking paid for half of the estimated repairs to the truck. In June 2011, Larkin inquired about the status of the truck, and Peterbilt offered to release the truck to Red River Trucking upon payment for the repairs completed to that date. Peterbilt alternatively offered to complete repairs on the truck on the condition that Red River Trucking then pay for about half of the repairs and pay the balance upon completion. Red River Trucking declined to pursue either alterative, and Peterbilt retained possession of the truck without making any further repairs.

[¶4] Peterbilt sued Red River Trucking, claiming a repairman's lien in the amount of $31,346.65 for the completed repairs. Red River Trucking answered, denying Peterbilt had a valid repairman's lien. Red River Trucking also counterclaimed, alleging Peterbilt breached the repair contract by not completing the repairs by May 1, 2011, and seeking damages for lost profits after that date. Peterbilt replied to the counterclaim, alleging Red River Trucking failed to mitigate its damages.

[¶5] After a bench trial, the district court ruled Peterbilt had a valid repairman's lien for the completed repairs on the truck and was entitled to $31,346.65 for the reasonable value of those repairs. The court ruled Peterbilt was entitled to foreclose its repairman's lien by selling the truck and applying proceeds of the sale to offset the value of the repairs. The court also concluded Peterbilt breached the parties' repair contract when the truck was not repaired by May 1, 2011, and Red River Trucking thereafter failed to mitigate its damages for the breach. The court said Larkin decided not to take the truck to another repair shop because he was " fed up" and he acknowledged he did nothing to mitigate his damages because he expected the truck to be fixed. The court explained Larkin additionally chose not to spend $6,000 to have another truck, the PT 3 (" other truck" ), repaired and made a business decision to let that truck sit idle until February 2013. The court said that by not using available proceeds from a July 2011 sale of equipment to repair either truck, Red River Trucking failed to mitigate its damages in July 2011. The court rejected Red River Trucking's claim for $201,564 in lost profits from 2011 through 2013 and awarded Red River Trucking $390.66 for two months of lost profits resulting from Peterbilt's breach of contract.

[¶6] Red River Trucking moved to amend the district court's decision, arguing the court erroneously determined Red River Trucking failed to mitigate its damages and incorrectly calculated damages at $390.66 instead of $39,042.63. The court denied Red River Trucking's motion to amend, and a notice of entry of judgment was served on Red River Trucking on April 30, 2014. That judgment awarded Peterbilt $31,346.65 for its repairman's lien and awarded Red River Trucking $390.66 as an offset against the amount awarded to Peterbilt.

[¶7] On May 9, 2014, Peterbilt submitted a proposed amended judgment stating it had completed repairs on the truck and the final cost to repair the truck was $34,128.97. On May 13, 2014, the district court entered an amended judgment including the cost to complete the repairs on the truck and increasing the amount of Peterbilt's total judgment, plus costs, against Red River Trucking to $34,842.21.

Page 280

A notice of entry of the amended judgment was served on Red River Trucking on May 14, 2014. Red River Trucking appealed from the amended judgment on July 7, 2014. The truck ...


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