Rodriguez vs. Learjet, Inc.

946 P.2d 1010 (Kan. Ct. App. 1997)

Principals

Diaz Rodriguez – D (B’s agent)

Burillo – B (D’s supervisor at Televisa)

CastaÔeda – C (Learjet Rep)

Facts

21 August 1992 – D executed contract to purchase jet from Learjet

placed $250,000 as deposit, $750,000 to be paid on 18 September 1992, $1 million to be paid 180 days before delivery date 30 July 1993, balance due on delivery

September 1992 - B informed D that he no longer desired the plane, B informed Learjet

30 September 1992 – C requested payment as provided by the contract

6 October 1992 – C requested payment by 9 October or would retain payments made to

date as liquidated damages, as provided for in the contract

20 October 1992- C informed D the company considered the contract terminated and

would retain payments to date as liquidated damages

After the breach Learjet sold the plane to Circus Circus. Circus Circus requested $1300.00 in modifications. Learjet profited approximately $1.9 million, which was greater than if Learjet had sold the plane to D.

Questions

Who qualifies as a lost volume seller? (3 Factor Test Below)

Was the liquidated damages clause reasonable? (Yes)

Holding

Lost Volume Seller (a jury question)

1. Seller possessed capacity to make an additional sale
2. It would have been profitable for seller to make an additional sale
3. Seller would have probably made an additional sale absent the buyer’s breach

• Items being sold must be like/similar in nature
• Whether seller is a lost volume seller or not is a question of fact
• Resale does NOT reduce a lost volume seller’s damages
• Whether seller qualifies or not is relevant when evaluating reasonableness of liquidated damages clause

Reason: Absent buyer’s breach, seller would have profited twice instead of just once

because he would have made two sales instead of one.