ÿWPCµ …4Vj 0(y¡w@© 0lé 0DU 0J™ 0Tã 0^7 0h• 0rý 0|o 0†ë 0q 1u 0dv UBÚ % U6" U>X B)– DC¿ AM BOU*l–œ° D3Lv~vÓý 0@Ð AOÆ_ 0D% D/i B˜Úƒç"ÔøÔô3|xm($¡¡ NEOPEQR-eSDTUÕabÓ€((3úÝ$¤¤Ý ƒ!ÝÝ  Ýà  àòòÚ  Ú0Ú  Úóó(#Ã$òòÚ  Ú0Ú  Úóó2 ÿÿ0Indent1Ô2ÔÔ3  Ô2" ÿÿ0Indent2à0 àÔ2ÔÔ3  Ô2, ÿÿ0Indent3à0 àà0 àÔ2ÔÔ3  Ô26 ÿÿ0Indent4à0 àà0 àà0 àÔ2ÔÔ3  Ô2@ ÿÿ0Indent5à0 àà0 àà0 àà0 àÔ2ÔÔ3  Ô2J ÿÿ0Indent6à0 àà0 àà0 àà0 àà0 àÔ2ÔÔ3  Ô2T ÿÿ0Indent7à0 àà0 àà0 àà0 àà0 àà0 àÔ2ÔÔ3  Ô2^ ÿÿ0Indent8à0 àà0 àà0 àà0 àà0 àà0 àà0 àÔ2ÔÔ3  Ô ÿÿ?AGMSYaioIndent0I.A.1.a.(1)(a)i)a)P ÿÿ8Mac DefaultMac DefaultÓ ` °šXÓ<þ6X9`(*Courier 12pt10cpiX< Œ 9p`(Courier New< Œ 9p`(&Times New Roman% Line 7 d####7Border 1dd€-$Cþÿ << Gÿÿ d< Œ 9p`(Arial Ý ƒ!ÝÑ  ÑÑ#€d#ÑÔ€!ÔÝ  ÝÔ€'ÔÔ€'ÔÓ  ÓÔ YYY ÔFILEDÔ€'XÔÌÌò òDecember€9,€1997ÌÌCecil€Crowson,€Jr.ÌÔ€'ôÔAppellate€Court€Clerkó ó ’Ý ƒ!ÝÑ#€d#ÑÔ€!ÔÝ  ÝÝ ƒ$Ýà àòòÚ  ÚÚ  ÚóóÝ  ÝÔ€!&ÔÔ€"ÔThe€original€agreement€provided:ÌÌà0 àà0 à16)€This€Agreement€constitutes€the€entire€agreement€between€Company€andÏDistributor,€and€it€may€be€altered€or€amended€only€by€written€agreement€of€bothÏparties.Ì&&&&'ÿÿdxdPtPtHHÚ(ÿáÿâùFG(üHHØ(d'`Styl{WP}01•ÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃà Ãà Ãà Ãà Ãà ÃÃÃÃÃÃÃÃÃÃÃÐ ÐÐHHÐÐ  ÐÐ2ÐÐÿÿ¸æ$ÿÐÐHHÐÐÐÐÐÐÐÐ  ÐÐ ÐÐ ÐÑÑÑGenevaÑÑ ÑÑ € ÑÑ<Px–ÈÑÒÒÒ443!#4ÒÒ$ *$ÒÒ$*$ÒÒ ÿKK ÒÒ  Geneva ÒÒ  Geneva ÒÓ.,ÓÓÓÓ6ÓÓ ÓßßßßßßßßßßßßßßßßßßÑGenevaÑÑ ÑÒ  ion-F Geneva ÒÒ  ion-F Geneva Ò("ÿÿ$££Ò  ÒÒ  Ò€-‚ƒCþÿ<< CÿÿƒLevel 1Level 2Level 3Level 4Level 5($$””ò òÚ  Ú1Ú  Úó ó„„'÷ÿ dxdüÿP PdÝ ƒ!ÝÔ . ÔÔ€!ÔÝ  ÝÒ Ü ÒÒ ° ÒÑ ý ÑÑ  ÑÑ\R AØ'\Ñ›Ñ7€zXXdÈdÈ7ÑÔ€"ÔÔ€"ŠÔœÙ€€ÙßR€%($A1-j|` Å `€€@ÿRß›Þ ÞÌ€€€€à@ àò òIN€THE€COURT€OF€APPEALS€OF€TENNESSEEÌÌà@ àEASTERN€SECTIONÌó óÌÌSUPER€GRIP€CORPORATION,à àà à)€C/A€NO.€03A01„9707„CV„00257Ìà àà àà àà àà àà à)Ìà àPlaintiff„Appellee,à àà àà à)€SULLIVAN€LAWÌà àà àà àà àà àà à)Ìv.à àà àà àà àà àà à)€HON.€R.€JERRY€BECK,Ìà àà àà àà àà àà à)€JUDGEÌB€&€D€SUPER€GRIP,€INC.,à àà à)Ìà àà àà àà àà àà à)€AFFIRMED€AND€Ìà àDefendant„Appellant.à àà à)€REMANDEDÌÌÌÌÌÌARTHUR€M.€FOWLER,€McKinnon,€Fowler,€Fox€&€Taylor,€Johnson€City,€forÏPlaintiff„Appellee.ÌÌPAUL€RAYMOND€WOHLFORD,€Bristol,€for€Defendant„Appellant.ÌÌÌÌÌà@ àò òòòO€P€I€N€I€O€Nóóó óÌÌÌà àà àà àà àà àà àà àà àFranks,€J.ÌÌÌÓÓà àà àIn€this€contract€action,€the€Trial€Judge€entered€judgment€for€plaintiffÏagainst€defendant€in€the€amount€of€$50,431.29,€and€dismissed€defendantððs€counter„claim€which€had€sought€damages€for€plaintiffððs€alleged€breach€of€the€distributorshipÏagreement.Ìà àà àDefendant€has€appealed€to€this€Court€and€presents€these€issues:ÌÓÓà0 àà0 à1.à0 àWhether€the€Court€erred€in€finding€that€the€parties€had€agreedÏupon€a€new€contract€for€a€price€increase€in€December,€1994.ÌÌà0 àà0 à2.à0 àWhether€the€Court€erred€in€holding€that€the€freight€charges€ofÏTwo€Hundred€Dollars€($200.00)€per€shipment€became€part€of€theÏoriginal€Distribution€Contract.ÌÌà0 àà0 à3.à0 àWhether€the€Court€erred€in€finding€that€the€deduction€of€theÏfreight€charges€from€invoices€constituted€a€material€breach€of€theÏDistribution€Contract€between€the€parties.ÌÌà0 àà0 à4.à0 àWhether€the€Court€erred€in€determining€the€equities€between€theÏparties€to€be€in€favor€of€the€Appellee€and€against€the€Appellant.ÌÌÓÓà àà àPlaintiff€and€defendant€entered€into€œa›€distributorship€agreement€for€theÏsale€of€mining€and€industrial€tires€in€1987.€€The€agreement€was€drafted€by€defendant,Ïand€was€for€the€sale€of€tires€by€plaintiff€to€defendant€with€prices€set€out€as€detailed€inÏthe€agreement.€€The€Trial€Judge€heard€the€evidence€without€a€jury€and€filed€aÏcomprehensive€and€detailed€memorandum€opinion,€setting€forth€his€findings€andÏconclusions€of€law.€€The€Trial€Court€determined€that€plaintiff€was€entitled€to€recoverÏ$22,800.00€for€unpaid€freight€charges,€$3,431.00€for€unpaid€warranty€claims,€andÏ$24,200.00€for€unpaid€sales€discount,€all€as€required€under€the€terms€of€the€contract.€ÏHe€also€determined€that€withholding€the€payment€of€shipping€charges€by€theÏdefendant€constituted€a€breach€of€the€contract,€which€formed€the€basis€for€dismissingÏthe€counter„complaint.€€Ìà àà àWe€review€òòde€novo€óóupon€the€record€and€presume€the€Trial€Judge€foundÏthe€facts€correctly,€unless€the€evidence€preponderates€against€his€findings.€€T.R.A.P.ÏRule€13(d).Ìà àà àThe€first€two€issues€will€be€considered€together.€€The€evidence€showsÏthat€during€the€fall€and€summer€of€1994,€the€parties€were€in€negotiations€for€a€priceÏincrease€for€the€mining€tires.€€The€Trial€Judge,€relying€heavily€upon€a€letter€fromÍdefendantððs€attorney,€concluded€that€the€parties€had€contracted€for€a€price€increase.€ÏThe€letter,€in€pertinent€part,€stated:€ÌÓÓà0 àà0 àto€put€an€end€to€our€discussions€about€price€increases€for€the€contractÏyear€1994„95,€B€&€D€accepts€your€sliding€scale€prices€for€the€last€half€ofÏthe€contract€year.€€The€price€increase€for€the€first€half€of€the€contractÏyear€1994„95€will€be€effective€October€1,€1994,€or€commencing€withÏyour€P.O.€#T221.€€B€&€D€expects€to€be€billed€for€these€increases€shortlyÏafter€the€new€year.ÌÌÓÓà àà àDefendant€argues€that€its€acceptance€of€the€price€increase€for€the€firstÏhalf€of€the€year€was€conditional€upon€plaintiff€developing€new€tires€and€resolvingÏthe€freight€charges€in€dispute.€€The€Trial€Judge,€in€addressing€this€issue,€said:ÌÓÓà0 àà0 àIt€seems€clear€that€the€letter€of€December€20,€1994€went€beyondÏpreliminary€negotiations,€and€constituted€a€manifestation€of€willingnessÏto€enter€into€a€bargain€that€only€required€Super€Grip€to€bill€or€invoice€BÏ&€D€for€the€retroactive€price€increase.€ÌÌà0 àà0 à.€.€.ÌÌà0 àà0 àWhen€Super€Grip€billed€B€&€D€for€the€retroactive€price€increase,€asÏrequested€by€B€&€D,€the€contract€was€effective,€and€B€&€Dððs€laterÏattempt€to€withhold€west€coast€shipping€charges€constituted€a€breachÏby€B€&€D.ÌÌÓÓà àà àWe€agree€with€the€Trial€Judge€that€the€foregoing€constituted€a€contractÏbetween€the€parties.€€The€record€shows€that€in€February€of€1988,€defendant€agreedÏto€pay€an€additional€$200.00€in€freight€charges€to€have€containers€of€tires€deliveredÏfrom€a€west€coast€port€overland,€in€order€to€speed€up€delivery€of€the€containers.€€ThisÏadditional€freight€charge€was€added€to€each€container€of€mining€tires€ordered€fromÏ1988€through€August€of€1994,€for€a€total€of€114€containers,€but€it€was€agreed€by€theÏparties€in€August€of€1994,€such€charge€would€no€longer€be€added€to€the€invoices.€€InÏJanuary€of€1995,€plaintiff€billed€defendant€for€monies€owing.€€Defendant€sentÍpayment€of€only€$13,221.45€of€the€invoiced€amount,€thereby€deducting€the€sum€ofÏ$22,800.00€from€the€amount€billed.€The€Trial€Judge€found€that€defendantsðð€refusal€toÏpay€the€full€bill€constituted€a€breach€of€the€contract€by€defendant.€€Defendant€insistsÏthat€the€deduction€of€$22,800.00€was€not€a€breach€of€any€contract€or€agreement€ofÏthe€parties,€i.e.,€the€original€distribution€agreement€of€1987€does€not€provide€for€theÏadditional€freight€charges.Ìà àà àThe€Trial€Judgeððs€conclusion€was€based€upon€the€fact€that€for€over€aÏperiod€of€eight€years,€the€$200.00€in€freight€charges€had€been€added€to€the€bill€forÏeach€container€of€tires,€and€defendantððs€acquiescence€constituted€an€enforceableÏagreement.€€Additionally,€the€Trial€Judge€concluded€that€ð ðan€attempted€retractionÏafter€five€years€to€obtain€monies€already€paid€for€west€coast€shipping€would€beÏunjust,ðð€and€defendant€by€reason€of€T.C.A.€ðð47„2„209(5)€ð ðwould€be€estopped€by€itsÏwaiver€of€paragraph€16œ× ƒ) ××  ×›€from€resorting€to€self„help€to€regain€the€1988„1994€westÏcoast€shipping€chargesðð.€€The€parties,€by€their€actions€and€inactions€over€the€periodÏof€years€and€the€payments€made,€established€the€basis€for€the€contract€as€found€byÏthe€Trial€Judge.Ìà àà àNext,€defendant€asserts€that€assuming€òòarguendoóó€the€withholding€of€theÏ$22,800.00€was€a€breach€of€the€distributorship€contract,€ð ðsuch€breach€was€notÏmaterial€to€the€essence€of€the€contractðð€and€should€not€be€held€to€be€a€materialÍbreach.Ìà àà àIn€this€regard,€the€Trial€Judge€held€that€the€non„payment€defeated€theÏobject€and€purpose€of€what€he€considered€to€be€a€sales€contract,€and€the€breach€wasÏœintentional›€and€defendant€gave€as€the€reason€for€non„payment€the€fact€that€theÏprovision€for€shipping€charges€was€not€set€forth€in€the€original€contract.€€On€thisÏrecord,€the€shipping€charges€were€an€integral€part€of€the€cost€of€the€merchandise€andÏthe€contract€between€the€parties€essentially€required€supplying€tires€to€one€party€andÏthe€payment€for€these€tires€by€the€other.€€The€failure€to€pay€for€the€merchandiseÏdelivered€affords€the€seller€a€basis€to€cancel€the€contract€for€non„payment.€€òòSeeÏóóT.C.A.€ðð47„2„703(f).€€In€this€case,€defendant€was€advised€that€the€non„paymentÏwould€be€treated€as€a€breach€unless€payment€was€forthcoming,€which€defendantÏagain€refused€to€pay.€€We€agree€with€the€Trial€Judge€that€this€action€constituted€aÏmaterial€breach€of€the€contract.Ìà àà àFinally,€defendant€argues€that€as€a€matter€of€equity€it€had€ð ðperformedÏsubstantially€all€of€its€contract€with€the€exception€of€a€minimal€amount,ðð€that€is€theÏ$22,800.00€payment,€and€this€breach€should€not€form€a€basis€to€cancel€the€contract.€ÏThe€rule€of€substantial€performance€is€not€applicable€to€the€facts€of€this€case.€€ThisÏwas€an€ongoing€distribution€agreement€with€the€contractual€relationship€beingÏdependent€upon€the€timely€delivery€and€payment€for€the€merchandise.€€EachÏtransaction€under€the€agreement€was€completed€upon€delivery€and€payment€for€theÏmerchandise.€€The€refusal€of€the€defendant€to€pay€the€full€bill€for€merchandise,€asÏfound€by€the€Trial€Judge€to€be€legally€owing€to€plaintiff,€constituted€a€basis€in€theÍlaw€to€terminate€the€contract,€and€we€find€no€equitable€basis€to€treat€this€contractÏother€than€one€for€the€sale€of€merchandise,€for€which€the€defendant€failed€to€pay.€Ìà àà àFor€the€foregoing€reasons,€we€affirm€the€judgment€of€the€Trial€CourtÏand€remand€with€cost€of€the€appeal€assessed€to€appellant.ÌÓÓÌÌÌÌÌà@ àòòà àÌóóà àà àà àà àà àà à__________________________Ìà àà àà àà àà àà àHerschel€P.€Franks,€J.ÌÌÌCONCUR:ÌÌÌÌÌÌ___________________________ÌHouston€M.€Goddard,€P.J.ÌÌÌÌÌÌ___________________________ÌDon€T.€McMurray,€J.ÌÌ