## Facts

- In December 1985, Rick Mueller agreed to buy a black 1985 Porsche 911 Targa from Don McGill; Don McGill, Inc.; Don McGill Imports, Inc.; and Greg Radford (collectively, “McGill, Inc.”).
- Mueller negotiated the sales price and the trade-in allowance for his Mazda RX-7 with a McGill, Inc. salesman, and the parties signed a written contract reflecting those terms.
- After Mueller signed the contract and went to the finance department to apply for financing, a McGill, Inc. employee told him for the first time that another customer already had a contract on the same Porsche and Mueller’s contract was only a “backup” agreement.
- McGill, Inc. personnel told Mueller it was unlikely the other customer would obtain financing and instructed Mueller to return the next day to pick up the vehicle.
- When Mueller contacted the dealership the next day to arrange pickup, he was told the Porsche had been sold to the other customer.
- A McGill, Inc. sales manager later agreed to try to locate a replacement Porsche for Mueller and signed a document stating McGill, Inc. would find a replacement automobile and would allow Mueller the same $8,370 trade-in allowance contained in the original contract.
- McGill, Inc. was unable to locate another 1985 Porsche 911 Targa for Mueller.
- In February 1986, a new sales manager contacted Mueller and said McGill, Inc. would not honor the prior deal, offering instead to sell him a 1986 Porsche 911 Targa at a higher price and with a lower trade-in value for the Mazda.
- Mueller attempted to find a 1985 Porsche 911 Targa at competing dealerships but could not.
- In April 1986, Mueller bought a 1986 Porsche 911 Targa from another dealership for more money and with a less favorable trade-in value for his Mazda; the 1986 model was described as almost identical to the 1985 model but more expensive.
- Mueller sued McGill, Inc. for breach of contract, seeking damages based on the difference between the contract terms (including the promised trade-in allowance) and the net cost of his substitute purchase.

## Issues

1. Whether Mueller presented more than a scintilla of evidence of damages from McGill, Inc.’s failure to deliver the contracted 1985 Porsche, including evidence that Mueller’s purchase of a 1986 Porsche was a reasonable substitute purchase (“cover”).
2. Whether the trial court erred by directing a verdict for McGill, Inc. at the close of Mueller’s evidence on the ground that Mueller failed to prove damages.

## Decision

- The court of appeals reversed the directed verdict for McGill, Inc. and remanded the case for further proceedings.
- The court held Mueller’s evidence was sufficient to raise fact questions for the jury on damages, including whether the later-model Porsche he bought was a reasonable cover purchase and what damages flowed from the breach.

## Legal Principles

- A directed verdict is proper only when the evidence raises no fact issue on a material element; in reviewing a directed verdict, the appellate court considers the evidence in the light most favorable to the nonmovant and disregards contrary evidence and inferences.
- Under Texas law governing sales of goods, a buyer may recover damages for a seller’s nondelivery, and may measure those damages by making a reasonable substitute purchase (cover) and seeking the difference between the cover price and the contract price, plus allowable incidental and consequential damages, minus expenses saved.
- The substitute goods need not be identical; whether the buyer’s substitute purchase was reasonable in light of similarity, timing, price, and market availability is ordinarily a fact question.
- Evidence of the original contract terms (including trade-in allowance) together with evidence of the buyer’s substitute transaction can supply a sufficient basis for a jury to compute damages with reasonable certainty, even if the amount is disputed.

## Conclusion

Mueller produced evidence of a signed agreement for a 1985 Porsche 911 Targa, McGill, Inc.’s failure to deliver because the car was sold to another customer, a written commitment to find a replacement while honoring the $8,370 trade-in allowance, his inability to locate the contracted model elsewhere, and his eventual purchase of an almost identical 1986 Porsche at a higher net cost. Because that proof could support a jury finding that the 1986 purchase was reasonable cover and could support a damages calculation, the trial court erred in taking the case from the jury by directed verdict, and the court of appeals reversed and remanded.


Mueller v. McGill, 870 S.W.2d 673 (1994)