## Facts

- Robert Egerer owned a 10-acre parcel in Skagit County intended for commercial development and required substantial structural fill.
- In 1995, he purchased some suitable shoulder-excavation fill at $1.10 per cubic yard, but still needed roughly 17,000 cubic yards.
- In May 1997, Egerer contracted with CSR West, LLC (a contractor excavating highway shoulder material under a state project) for CSR to deliver all excavated shoulder material from an Interstate 5 project to Egerer at $0.50 per cubic yard.
- CSR delivered fill only on July 9 and 10, 1997.
- After a state change order allowed CSR to reuse excavated shoulder material on the state project, CSR diverted nearly all excavated material (about 16,750 cubic yards) away from Egerer.
- Egerer did not obtain replacement fill during summer 1997, citing cost concerns and a seasonal June–September window for placing fill before rainy conditions.
- In early 1998, Egerer obtained quotes for substitute pit-run type fill at $8.25 to $9.00 per cubic yard; this material was somewhat superior to shoulder material, and shoulder material was difficult to locate.
- About two years after the breach, Egerer purchased other fill (from a landslide source) at $6.39 per cubic yard, plus hauling and spreading.
- Egerer sued for breach of contract in November 2000.

## Issues

1. Whether damages for nondelivery under the U.C.C. could be calculated using a later price quote for commercially suitable substitute fill (“hypothetical cover”) rather than actual cover or the market price for identical goods at the time and place for tender.
2. Whether prejudgment interest was proper where the principal damages turned on selecting a measure of damages rather than performing a discretionary computation.
3. Whether Egerer proved consequential damages (lost rental income from delayed development) with sufficient certainty and causation.
4. Whether sales tax should be added to the nondelivery damages award.

## Decision

- The Court of Appeals affirmed the judgment in all respects.
- The court upheld damages calculated as the per-yard differential between the $0.50 contract price and an $8.25 per-yard substitute-fill quote obtained about six months after the breach, multiplied by the undelivered quantity.
- The court affirmed the award of prejudgment interest because the damages were determinable from fixed data once the quantity and price differential were established.
- The court affirmed denial of consequential damages for lost rents due to insufficient proof of certainty and causation.
- The court affirmed denial of adding sales tax to the damages award.

## Legal Principles

- Under U.C.C. Article 2, nondelivery damages generally measure the difference between the contract price and the market or substitute price, plus allowable incidental and consequential damages, less expenses saved.
- A court may use commercially reasonable evidence of substitute pricing to approximate the buyer’s replacement cost even if the buyer did not promptly cover or the evidence is not tied to identical goods or the precise breach date, so long as it reasonably reflects the cost of functional replacement.
- Prejudgment interest is available when the amount due is liquidated or readily determinable by computation from fixed data, even if the parties dispute the proper legal measure that yields those figures.
- Consequential damages such as lost rents require proof of foreseeability and reasonable certainty, including a sufficient showing of causation between the breach and the claimed loss.
- Add-ons to nondelivery damages (such as sales tax) require an adequate factual and legal basis and are not automatic where the chosen price-differential measure already captures the economic loss.

## Conclusion

The court affirmed a flexible U.C.C. remedy for nondelivery that permitted “hypothetical cover” based on a reasonable substitute-price quote, treated the resulting amount as sufficiently definite to support prejudgment interest, and required strict proof for consequential damages and any additional tax component.


Egerer v. CSR West, LLC, 116 Wash. App. 645, 67 P.3d 1128 (Wash. Ct. App. 2003)