## Facts

- Koviack Irrigation and Farm Services, Inc. (Koviack) sold Maple Row Farms, LLC (Maple Row) component parts for an irrigation system, including a pump used to distribute water from Maple Row’s retention pond and an operating/control panel.
- Koviack designed the pumps it sold and traditionally assisted customers with installation; it also helped design and install Maple Row’s irrigation system.
- The pump was delivered late in the harvest season, and Maple Row chose to wait until the following spring to install it.
- Maple Row’s owner told Koviack he would not pay for the pump and panel until they were installed and shown to work with the retention pond and irrigation system.
- When the next season arrived, Maple Row contacted Koviack for installation help, but Koviack refused to assist because it had not been paid for the pump and panel.
- The parties had no further communication about installation or payment after Koviack declined to help.
- Maple Row hired another irrigation specialist to install the Koviack pump. The specialist advised that the pump would not work with Maple Row’s retention pond and system.
- Maple Row purchased a different pump that was compatible with the retention pond and irrigation setup.
- Koviack sued Maple Row for breach of contract, account stated, and unjust enrichment. Maple Row counterclaimed, asserting Koviack failed to provide a proper pump and refused to correct the problem.
- After a bench trial, the trial court found Maple Row properly rejected the pump and control panel, ruled that Koviack could not recover their price, and ordered Maple Row to return the equipment to Koviack at Maple Row’s expense.
- The trial court also awarded Maple Row $11,362.50 in case-evaluation sanctions. Koviack appealed both the merits judgment and the sanctions award.

## Issues

1. Did the trial court err in concluding that Maple Row properly rejected the pump and operating panel under Michigan’s Uniform Commercial Code, relieving Maple Row of liability for their price?
2. Did the trial court err in awarding Maple Row $11,362.50 in case-evaluation sanctions under the Michigan Court Rules?

## Decision

- The Michigan Court of Appeals affirmed the judgment entered after the bench trial.
- The court affirmed the trial court’s finding that Maple Row properly rejected the pump and operating panel under the UCC and therefore was not liable to pay Koviack for those items.
- The court affirmed the order requiring Maple Row to return the rejected equipment to Koviack at Maple Row’s expense.
- The court affirmed the award of $11,362.50 in case-evaluation sanctions in favor of Maple Row.

## Legal Principles

- Under Michigan’s UCC, a buyer may reject goods that fail in any respect to conform to the contract if the buyer rejects within a reasonable time after delivery or tender and seasonably notifies the seller.
- When rejection is proper, the seller generally may not recover the contract price for the rejected goods; the seller’s remedies are limited to those available when the buyer has rejected rather than accepted.
- After rejection, the buyer must hold the goods with reasonable care for a time sufficient to permit the seller to remove them, and a court may order return of the goods as part of the remedy.
- In a bench trial, an appellate court reviews factual findings for clear error and reviews legal conclusions de novo, giving weight to the trial court’s ability to judge witness credibility.
- Case-evaluation sanctions may be awarded under MCR 2.403 when a party rejects a case-evaluation award and does not obtain a more favorable result at trial; the sanctions decision is reviewed for abuse of discretion.

## Conclusion

The Court of Appeals affirmed the trial court’s determination that Maple Row’s actions amounted to a proper UCC rejection of an incompatible irrigation pump and control panel, which barred Koviack’s contract and equitable recovery for their price while requiring Maple Row to return the equipment, and it also affirmed $11,362.50 in case-evaluation sanctions awarded to Maple Row.


Koviack Irrigation and Farm Services, Inc. v. Maple Row Farms, LLC, 2017 WL 4182409 (2017)