W.G. Barr Management, LLC v. ContekPro LLC

Background

The opinion refers to the plaintiff as W.G. Barr Beverage Co., doing business as Two Pitchers Brewing Co., and uses “Two Pitchers” in discussing the dispute. Two Pitchers entered into a contract with ContekPro to manufacture and deliver a commercial kitchen unit built inside a shipping container for a taproom in Oakland. The parties initially anticipated delivery around September 1, 2020, and later agreed to March 1, 2021. Two Pitchers paid the full contract price.

The contract stated that ContekPro would construct the unit according to approved plans, obtain a California manufactured-building sticker, test its electrical, water, and gas components, and ensure that they met applicable codes. It also stated that the buyer or end user could submit a claim for the cost of correcting issues if the building was not constructed as planned.

The container was shipped unfinished from ContekPro’s facility in Oregon to the taproom site around April 6, 2021. It was not pre-inspected, never received the California manufactured-building sticker, and was not ready for final inspections when delivered. Two Pitchers hired other contractors to finish the work and obtain the required inspections. The container passed final inspections by September 1, 2021.

Claims and Motions

Two Pitchers asserted three causes of action: breach of contract, promissory estoppel, and breach of the implied duty of good faith and fair dealing. It sought $98,622.70 in damages, as well as attorneys’ fees and costs. Two Pitchers argued that ContekPro breached several promises, including promises concerning delivery of a finished and inspected container, completion after delivery, code compliance, and reimbursement for correction costs.

The parties filed cross-motions for summary judgment. Summary judgment is a decision entered without a trial when the undisputed facts show that one side is entitled to judgment under the law. ContekPro argued that the claims were barred by the contract’s one-year limitations period. Two Pitchers argued that its March 2023 request for reimbursement concerned a separate breach and made the lawsuit timely.

Choice of Law

The parties agreed that Oregon law should govern the dispute, so the Court applied Oregon law without conducting a further choice-of-law analysis. The Court also concluded that the kitchen container was a movable “good” covered by Oregon’s version of the Uniform Commercial Code.

Statute of Limitations

Oregon law generally provides a four-year period for an action involving breach of a contract for the sale of goods, but it allows the parties to shorten that period to no less than one year. The contract here required any legal action concerning a business transaction between ContekPro and the buyer or end user to begin within one year after the claim arose.

The Court found that this language was unambiguous. It reasoned that Two Pitchers’ three causes of action sought damages for costs incurred to finish the container and obtain a final inspection. Those events occurred by the time the container was completed and inspected, at least by September 9, 2021, when Two Pitchers’ counsel sent ContekPro a letter alleging that ContekPro had completely breached the agreement. Because the lawsuit was not filed until May 9, 2023, the Court held that the claims were barred by the contractual one-year period.

The Court rejected Two Pitchers’ argument that ContekPro’s failure to reimburse it after a March 2023 accounting created a new breach and restarted the limitations period. The Court stated that a later act can create a separate limitations period when it causes an independent injury, but ContekPro’s failure to respond to the March 2023 email did not cause an injury separate from the costs Two Pitchers incurred in 2021. The March 2023 demand sought reimbursement for those earlier costs.

The Court also rejected Two Pitchers’ argument that its promissory-estoppel claim was governed by a different limitations period because it was based on an oral promise. The Court explained that promissory estoppel can substitute for consideration when no traditional contract remedy is available. Here, the alleged oral promise concerned the same subject matter and damages as the written contract, and a traditional contractual remedy was available. That remedy, however, was time-barred.

Attorneys’ Fees

Two Pitchers also argued that it was entitled to attorneys’ fees under the contract regardless of which party prevailed. The Court ruled that Two Pitchers was not entitled to fees because it failed to bring the action within the contract’s one-year limitations period.

Disposition

The Court denied Two Pitchers’ motion for summary judgment and granted ContekPro’s cross-motion for summary judgment. The Court stated that it would enter a separate judgment, after which the Clerk of Court would terminate the case. Judge Thomas S. Hixson signed the order on June 5, 2024.