Damages

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7^th Circuit Court of Appeals

Case Name: Rexing Quality Eggs, v. Rembrandt Enterprises, Inc.,

Case No.: 20-1726; 20-1727

Officials: RIPPLE, KANNE, and ROVNER, Circuit Judges.

Focus: Damages

On August 16, 2017, Rexing Quality Eggs and owners Joseph and Leo Rexing (collectively “Rexing”) filed a declaratory judgment action in Vanderburgh County, Indiana. They sought a ruling that Rexing was excused from its obligations to purchase eggs under a contract that it had with Rembrandt Enterprises, Inc. (“Rembrandt”). Rembrandt removed the action to federal district court, answered the complaint, and filed a counterclaim seeking damages for Rexing’s repudiation of the contract. Rembrandt requested damages, attorneys’ fees, and interest.

Following discovery, Rembrandt moved for summary judgment on Rexing’s claims as well as on its own counterclaim. The district court granted Rembrandt’s motion on liability, but concluded that there were genuine issues of triable fact as to the damages Rembrandt had suffered because of Rexing’s repudiation.

After a trial on the damages issue, a jury awarded Rembrandt $1,268,481 for losses on eggs it had resold and another $193,752 for losses on eggs that it was not able to resell. Rembrandt then requested that the court award it interest, attorneys’ fees, and costs. The district court denied the request; it determined that the interest term in the parties’ agreement was usurious, and, as a result, Rembrandt was not entitled to contractual interest or to attorneys’ fees. The district court therefore entered final judgment in the amount of $1,522,302.61. Rexing appealed the damages award in favor of Rembrandt, and Rembrandt cross-appealed the denial of contractual interest and attorneys’ fees.

We now affirm the district court’s judgment on the damages award. The district court properly concluded that the resale remedy under Iowa’s version of the Uniform Commercial Code (“UCC”), Iowa Code § 554.2706, was the appropriate mechanism for calculating Rembrandt’s damages. Moreover, Rexing waived its arguments challenging the jury’s damage award by not presenting them to the district court in a postverdict motion. As for Rembrandt’s counterclaim for interest and attorneys’ fees, Rembrandt is correct that the parties’ agreement fell within the “Business Credit Exception” to Iowa’s usury statute, Iowa Code § 535.5(2)(a)(5). We therefore reverse the district court’s denial of Rembrandt’s request for interest and fees, and we remand for further proceedings on these matters.

Affirmed in part. Reversed and remanded in part.

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Derek A Hawkins is Associate Corporate Counsel, IP at Amazon.