S & R Metals, Inc. v. C. Itoh & Co. (America), Inc.

C. Itoh & Co. (America), Inc. (“C. Itoh”) appeals the judgment of the district court in favor of the plaintiff S & R Metals, Inc. (“S & R”). The district court held that S & R is entitled to revoke its acceptance of steel delivered under contract by C. Itoh. The court determined that S & R may return that steel to C. Itoh and C. Itoh is liable for damages, interest, and costs in the aggregate amount of $1,646,969.

PACTS

C. Itoh is a steel trading company that buys and sells steel in bulk. S & R is a steel service center that buys steel in bulk and resells it in smaller amounts to manufacturers and others. In 1984, C. Itoh contracted to sell to S & R 5,500 metric tons of steel. The steel was to be conveyed in coils of varying widths and thicknesses, and it was all to be “commercial quality SAE 1010 milled edge” hot rolled steel. The steel was delivered to S & R at Long Beach Harbor in July, 1984 in 644 coils. S & R then transported the steel to its facility at its own expense. The parties do not dispute that S & R accepted delivery of the steel.

On December 21, 1984, S & R notified C. Itoh that S & R revoked acceptance of the steel that remained in S & R’s inventory. S & R had…