Sanchelima International, Inc. v. Walker Stainless Equipment Co.

Dist. Ct. did not err in awarding plaintiff $778,306.70 in lost profits arising out of defendant’s breach of distribution contract that restricted defendant from making direct sales of its silos to customers in area covered by agreement. Although defendant argued that plaintiff could not recover any lost profits due to provision in agreement that precluded plaintiff from obtaining recovery of any lost profits arising out of breach of instant agreement, Dist. Ct. could properly find under Wisconsin case law that plaintiff could recover lost profits, where instant limitation of remedies clause violated Wisconsin statute (section 402.719), since: (1) said clause failed of its essential purpose because said clause provided plaintiff with no remedy for instant breach of agreement; and (2) under section 402.719, Dist. Ct. could therefore consider all UCC remedies, including lost profits as damages arising out of instant breach of parties’ agreement. Moreover, defendant’s request to certify instant damages question to Wisconsin Supreme Ct. is inappropriate, since: (1) said court has previously found that limitation of consequential damages provision is per se unconscionable where, as here, it fails of its essential purpose; and (2) certification of issue is proper only if state supreme court had not resolved said issue. Fact that other state courts had taken different approach to instant limited remedy clause, or that defendant argued that Wisconsin Supreme Ct. would reconsider its stance in view of said state-court rulings did not require different result.