## Facts

- Sunrise Foods International Inc. (Sunrise), a Canadian company that sells certified organic corn, contracted with Ryan Hinton Inc. (Hinton), an Idaho corporation, for the sale of 6,000 short tons of certified organic corn.
- The contract price was $415 per ton, for a total contract price of about $2.49 million, and contemplated that Hinton would send trucks to pick up approximately 500 tons per month from ports in the Pacific Northwest.
- Sunrise delivered an initial portion of the corn, and Hinton paid $138,610 for 334 tons.
- During performance, Sunrise notified Hinton that some corn at a Longview, Washington pickup location contained vomitoxin, with precise levels initially unknown.
- Testing later showed that the corn available for delivery largely met applicable limits for certified organic livestock feed, and Sunrise offered options for Hinton to obtain compliant corn from available storage.
- Hinton nevertheless refused to accept further deliveries and refused to pay the remaining contract balance, asserting nonconformity based on vomitoxin concerns.
- After Hinton stopped performing, the market price of corn dropped. Sunrise resold the remaining corn to other customers for $2,237,584, which was $113,806 less than the amount Hinton was required to pay under the contract.
- Sunrise sued Hinton for breach of contract in an action governed by the Convention on Contracts for the International Sale of Goods (CISG), seeking the contract–resale difference and additional damages, including claimed lost profits and “lost-volume seller” profits based on an asserted $30-per-ton margin.
- Sunrise moved for summary judgment. Hinton did not respond, and after Hinton failed to appear through replacement counsel, the clerk entered default under Federal Rule of Civil Procedure 55(a).

## Issues

1. Did the CISG govern the parties’ international corn sales contract?
2. Did Hinton breach the contract by refusing to continue taking delivery and paying, despite Sunrise’s showing of available conforming corn and proposed solutions to address vomitoxin concerns?
3. What damages could Sunrise recover under CISG Articles 74–76 after reselling the goods, and could Sunrise also recover additional “lost-volume” profits on top of the contract–resale differential?

## Decision

- The court held the CISG governed because the contract was for the international sale of goods between parties with places of business in different CISG Contracting States, and there was no effective exclusion.
- The court granted Sunrise’s unopposed motion for summary judgment on liability, finding Hinton breached by refusing to accept and pay for the remaining corn.
- Based on Sunrise’s documented resale, the court awarded damages equal to the difference between the contract price and the resale price ($113,806), along with certain proven incidental amounts such as storage and handling charges.
- The court declined to award additional “lost-volume seller” damages or extra profits beyond the contract–resale differential, concluding Sunrise did not meet its burden to justify cumulative recovery for the same tonnage.

## Legal Principles

- The CISG applies to contracts for the sale of goods between parties in different Contracting States unless the parties validly exclude it.
- Under Federal Rule of Civil Procedure 56, when a summary-judgment motion is supported by evidence and is unopposed, the court may treat supported facts as undisputed and decide whether the movant is entitled to judgment as a matter of law.
- Under CISG Articles 53 and 62, a buyer must pay the price and take delivery as required by the contract; refusal to continue performance without a valid CISG remedy constitutes breach.
- Under CISG Articles 74 and 75, when a seller resells goods after the buyer’s breach (and the resale functions as a substitute transaction), the seller may recover the difference between the contract price and the resale price, plus foreseeable losses proven with reasonable certainty, including appropriate incidental expenses.
- Claims for additional profit beyond the contract–resale differential (including a lost-volume theory) require proof that such recovery is necessary to place the seller in the same position it would have been in had the contract been performed, and that the requested amount does not result in overcompensation.

## Conclusion

In Sunrise Foods International Inc. v. Ryan Hinton Inc., the District of Idaho applied the CISG to a Canadian seller’s contract to supply organic corn to an Idaho buyer and held the buyer breached by stopping payment and refusing further performance after raising vomitoxin concerns. The court awarded Sunrise the contract–resale price difference of $113,806 and certain documented incidentals, but rejected Sunrise’s request for additional lost-volume or extra profit damages beyond the resale differential.


Sunrise Foods International Inc. v. Ryan Hinton Inc., 2019 WL 3755499 (2019)