                            ___________

                            No. 94-3666
                            No. 94-3787
                            ___________

Frederick A. Simeone,           *
                                *
     Appellee/Cross Appellant, *
                                *
     v.                         *   Appeals from the United States
                                *   District Court for the District
First Bank National             *   of Minnesota.
Association, formerly know as   *
First Natl. Bank of St. Paul;   *
                                *
     Appellant/Cross Appellee, *
                                *
Antje Angela Quante, Executrix *
of the Estate of Herman Quante; *
Leland Gohlike,                 *
                                *
     Defendants,                *
                                *
Peter Garretson,                *
                                *
     Appellant.                 *


                            ___________

                  Submitted:   June 16, 1995

                        Filed: January 3, 1996
                             ___________

Before BEAM, ROSS and MURPHY, Circuit Judges.

                            ___________

ROSS, Circuit Judge.


     Appellant, Frederick Simeone, sought damages against appellee
First Bank National Association (First Bank) and others for breach
of contract and fraud stemming from an agreement by First Bank to
sell Simeone 1920-1930 era vintage Mercedes-Benz automobiles and
parts which had been repossessed from a defaulting loan customer,
Leland Gohlike.   We affirm in part and reverse in part.


                                I.


     The vehicles in question included a one-of-a-kind 1929
Mercedes Benz SS Roadster, two 1930 era Mercedes Benz Roadsters (of
which a total of 114 were ever manufactured), and a 1928 Mercedes
Benz SSK (one of only 39 ever manufactured), which had been owned
by the son of Sir Arthur Conan-Doyle, the creator of Sherlock
Holmes.    Additionally, there were thousands of loose parts,
including shock absorbers, fenders, seat cushions and wheels, which
were   no   longer   manufactured   and   which   were   themselves
extraordinarily rare. One of the automobiles and some of the parts
repossessed from Gohlike were allegedly owned by the Estate of
Herman Quante (Quante Estate). While First Bank never acknowledged
the Estate's claim of ownership, it nonetheless agreed to pay the
Estate $50,000 for its interest, if any.


     On October 26, 1985, after receiving inquiries from several
other potential purchasers, First Bank entered into an agreement to
sell the repossessed automobiles and parts for $400,000 to Simeone,
a self-described collector of vintage automobiles. In the same
agreement, Simeone agreed to purchase the Quante Estate car and
parts for $50,000. Simeone paid 10% of the contract price as a
downpayment.


     On November 4, 1985, the date set for the conveyance of title
to Simeone, Leland Gohlike, the debtor, obtained a temporary
restraining order (TRO) to prevent the sale of the collateral.
Thereafter, First Bank refused Simeone's proffered tender of the
balance of the purchase price. Prior to obtaining the TRO, Gohlike
instituted a civil action against First Bank and its officers
claiming a violation of due process and seeking $13,000,000 in
damages.


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     Sometime on or before November 4, 1985, First Bank entered
into negotiations with Gohlike and James Torseth, Gohlike's
neighbor, to sell the automobiles and parts to Torseth in exchange
for Gohlike's dismissal of his suit against the bank and a purchase
price slightly in excess of Simeone's. Believing that it no longer
had an obligation to sell the property to Simeone because of a
condition in the agreement, First Bank subsequently sold the cars
and parts to SMB, Inc., a corporation created by Torseth for the
purchase and resale of the automobiles and parts, and Gohlike
dismissed his suit against First Bank. SMB, Inc. later sold all of
the cars and parts for $1,114,960, including $470,000 that Simeone
himself paid for the purchase of the 1929 Mercedes Benz SS
Roadster. Two experts at trial testified that, because of their
rarity, by late 1987 or early 1988 the vehicles and parts were
worth over three million dollars.


     First Bank returned Simeone's downpayment with interest and
Simeone filed suit alleging breach of contract and fraud.      The
district court granted summary judgment in favor of First Bank,
finding that because a condition precedent was not satisfied, the
sellers were not obligated by the contract. The Eighth Circuit
subsequently vacated the summary judgment ruling, concluding that
First Bank and the Estate had breached the contract by failing to
convey the property to Simeone. Simeone v. First Bank Nat'l Ass'n,
971 F.2d 103, 106-07 (8th Cir. 1992). This court remanded the case
to the district court for rulings on the other claims raised by
Simeone, as well as an assessment of damages. Id. at 108.


     Prior to trial on remand, Simeone agreed to dismiss the Quante
Estate from the case with prejudice. The trial was conducted from
February 28, 1994, through March 8, 1994.     At the close of the
breach of contract phase of the trial, the district court ruled as
a matter of law that the Bank's conduct did not constitute fraud.
However, the court permitted the fraud claim to be tried to the
jury to forestall the necessity for a later trial in the event the

                               -3-
fraud dismissal was reversed on appeal. The jury awarded Simeone
$2,405,000 for breach of contract, including $585,000 in
compensatory damages, $225,000 in incidental damages, and
$1,595,000 in consequential damages, plus prejudgment interest.1
The jury also awarded $1.00 on the court-dismissed fraud claim.
The district court denied First Bank's motion for a new trial or,
in the alternative, amendment of the judgment or remittitur
pursuant to Fed. R. Civ. P. 59.


                               II.


     In its challenge to the compensatory damages award, First Bank
argues the district court erroneously allowed Simeone's experts to
rely on the collector automobile market as the relevant market in
appraising the fair market value of the vehicles and parts at the
time of the breach.    Instead, First Bank contends the relevant
market was the market of "repossessed goods in bank foreclosure
sales."


     Minn. Stat. § 336.2-713(1) provides the proper measure of
damages for a seller's breach of contract:


     [T]he difference between the market price at the time
     when the buyer learned of the breach and the contract
     price together with any incidental and consequential
     damages. . . .


"Market price" "is the price for goods of the same kind and in the
same branch of trade." Minn. Stat. § 336.2-713, U.C.C. Comment 2.
According to First Bank, the "branch of trade" in this case was the
resale market of repossessed goods, not a collector automobile
market.   The Uniform Commercial Code, as adopted in Minnesota,

     1
      In its special verdict form the jury set the market price
of Gohlike's cars and parts at the time of the breach at $885,000
and the market price of the Quante Estate car and parts at the
time of the breach at $150,000.

                               -4-
permits opinion evidence as to the value of the goods in question:


     Where the unavailability of a market price is caused by
     a scarcity of goods of the type involved . . . [s]uch
     scarcity conditions . . . indicate that the price has
     risen and under the section providing for liberal
     administration of remedies, opinion evidence as to the
     value of the goods would be admissible in the absence of
     a market price and a liberal construction of allowable
     consequential damages should also result.


Minn. Stat. § 336.2-713, U.C.C. Comment 3 (emphasis added).


     At trial, the evidence showed that the vehicles were rare, and
in some cases unique, classic automobiles of historic significance.
The disassembled parts, as well, were scarce commodities. At trial
an expert in vintage automobiles valued the cars and parts at
$1,355,000 at the time of the breach.       Based on the evidence
presented at trial, the jury concluded that, at the time of the
breach, the value of the property owned by First Bank was $885,000
and the value of the property owned by the Quante Estate was
$150,000, or a total market value of $1,035,000. The difference
between this fair market value and the $450,000 contract price is
$585,000, the amount of compensatory damages awarded.


     The district court did not abuse its discretion in permitting
the valuation of the automobiles and parts based on a collector's
market. The evidence clearly supports the jury's determination and
the award of compensatory damages is affirmed.


                               III.


     First Bank next raises several challenges to the consequential
damages assessed against it.      The jury awarded $1,595,000 in
consequential damages, which was derived from expert testimony as
to what the automobiles and parts were worth in late 1987, two
years after the breach of contract, minus the market price of the

                               -5-
property at the time of the breach.     First Bank now argues the
evidence   is  insufficient   to   establish  the   foreseeability
requirement to support the $1,595,000 consequential damages award.


     Under   Minnesota   law,   recoverable   consequential   damages
include:


     [A]ny loss resulting from general or particular
     requirements and needs of which the seller at the time of
     contracting had reason to know and which could not
     reasonably be prevented by cover or otherwise.


Minn. Stat. § 336.2-715(2)(a). Under this section, consequential
damages are not available in every case, but instead are only
proper if the seller had reason to foresee the particular
requirements of the buyer, and even then only if such loss could
not be prevented. The focus is on what the seller had reason to
know. Minn. Stat. § 336.2-715; U.C.C. Comment 3.


     According to First Bank, Simeone repeatedly stated prior to
contract formation that he was not in the business of selling
automobiles and parts and therefore First Bank neither knew nor had
reason to know that Simeone intended to trade or resell the
automobiles and parts at any profit, let alone a profit of
$1,595,000. First Bank contends the award of consequential damages
erroneously treats the agreement as one for the purchase of goods
for resale when that was clearly not the case.


     The question of whether the buyer's consequential damages were
foreseeable by the seller is one of fact to be determined by the
trier of fact. Franklin Mfg. Co. v. Union Pacific R.R., 248 N.W.2d
324, 326 (Minn. 1976). First Bank asks that this court conclude as
a matter of law that the consequential damages were not
foreseeable. We decline to so hold. Mr. Garretson, commercial
banking officer of First Bank and acting on behalf of the Bank
during the relevant negotiations with Simeone, testified that he

                                 -6-
was aware that collectors may trade vehicles in order to enhance
their collection. Further, Simeone testified he told First Bank's
broker that he intended to use the cars and parts for trading or
possible resale to obtain additional cars.        Finally, Simeone
contracted to purchase hundreds of automotive parts that the jury
would reasonably presume would have to be either resold or
assembled into something of increased value.            The jury's
determination that it was foreseeable that Simeone would seek to
further his collection by engaging in sale or trade was not clearly
erroneous.


     Also with respect to consequential damages, First Bank argues
the court erred in failing to adequately apply the doctrine of
cover or mitigation of damages. First Bank claims that even if
sufficient evidence existed to support an award of consequential
damages under Minn. Stat. § 336.2-715(2)(a), such damages are only
allowed to the extent that they "could not reasonably be prevented
by cover or otherwise." This provision incorporates the common law
policy that an aggrieved party has a duty to mitigate damages. See
Barry & Sewall Indus. Supply Co. v. Metal-Prep of Houston, Inc.,
912 F.2d 252, 259 (8th Cir. 1990).


     "The test of proper cover is whether at the time and place the
buyer acted in good faith and in a reasonable manner, and it is
immaterial that hindsight may later prove that the method of cover
used was not the cheapest or most effective." Minn. Stat. § 336.2-
712; U.C.C. Comment 2. The burden of proof rests with the seller
to establish that the buyer acted unreasonably in failing to
prevent his own loss. See Bemidji Sales Barn, Inc. v. Chatfield,
250 N.W.2d 185, 189 (Minn. 1977). Further, the duty to cover "does
not require an injured party to take measures which are
unreasonable or impractical or which require expenditures
disproportionate to the loss sought to be avoided or which are
beyond his financial means." Gerwin v. Southeastern Calif. Ass'n
of Seventh Day Adventists, 92 Cal. Rptr. 111, 117 (Cal. Ct. App.

                               -7-
1971).


     SMB, Inc. ultimately sold the automobiles and parts for
$1,114,960. First Bank now contends that Simeone's consequential
damages should be limited because he could have mitigated his
damages by purchasing the vehicles and parts from SMB, Inc. at the
increased price.     The jury, however, rejected this argument.
Although the evidence at trial showed that the automobiles and
parts were for sale to the general public as soon as SMB, Inc.
purchased them from First Bank, it is unreasonable to require that
Simeone expend over $1,000,000, almost $700,000 more than the
contract obligated him to pay, to purchase the cars and parts in
order to effect cover and mitigate his loss. Indeed, First Bank
made no showing at trial that Simeone even had such resources
available to him or that it would be reasonable to require such
cover.   It is noteworthy that Simeone did, in fact, undertake
efforts to effect cover when he ultimately purchased the 1929 SS
Roadster from SMB, Inc.      The purchase price of the Roadster
exceeded that which Simeone had initially contracted to pay for all
of the vehicles and parts. The suggestion that Simeone should have
purchased the entire lot of automobiles and parts as a matter of
law is not supported by the evidence.


     Finally, First Bank contends the consequential damages award
is too speculative as a matter of law to be the basis for recovery.
Under Minnesota law, "[t]he controlling principle governing actions
for damages is that damages which are speculative, remote, or
conjectural are not recoverable." Leoni v. Bemis Co., Inc., 255
N.W.2d 824, 826 (Minn. 1977) (quotation omitted).       However, a
plaintiff's losses need not be proven with mathematical precision.
"Once the fact of loss has been shown, the difficulty of proving
its amount will not preclude recovery so long as there is proof of
a reasonable basis upon which to approximate the amount." Id.


     Here, two experts in antique and classic cars testified as to

                               -8-
the value of the vehicles and parts at the time of the breach as
well as their appreciated value two years after the breach. This
testimony was based on the expert's knowledge of the available
market, the rate at which such unique cars appreciate in value
because of their scarcity and desirability among collectors, as
well as the prices commanded by comparable vehicles.        This
testimony provides a reasonable basis upon which to support the
jury's determination of consequential damages.


                               IV.


     First Bank next claims the district court erred in refusing to
grant its motion for a new trial or in the alternative a remittitur
because the evidence does not support the jury's award of
incidental damages. Because we are reviewing state court claims,
the appropriate standard for review is that applied by Minnesota
appellate courts. Piekarski v. Home Owners Savings Bank, 956 F.2d
1484, 1488 (8th Cir. 1992) cert. denied, 113 S. Ct. 206 (1992).
Thus, this court should uphold the trial court's denial of First
Bank's new trial motion or motion for remittitur unless there has
been a clear abuse of discretion. Johnson v. Washington County,
518 N.W.2d 594, 601 (Minn. 1994).


     Under Minnesota law, incidental damages resulting from a
seller's breach are defined as:


     [E]xpenses reasonably incurred in inspection, receipt,
     transportation and care and custody of goods rightfully
     rejected, any commercially reasonable charges, expenses
     or commissions in connection with effecting cover and any
     other reasonable expense incident to the delay or other
     breach.


Minn. Stat. § 336.2-715(1). See also Mattson v. Rochester Silo,
Inc., 397 N.W.2d 909, 915 (Minn. Ct. App. 1987). In contrast to
incidental damages, Minnesota law also provides that "the buyer may


                               -9-
'cover' by making in good faith and without unreasonable delay any
reasonable purchase of . . . goods in substitution for those due
from the seller."    Minn. Stat. § 336.2-712(1).    The buyer may
recover from the seller as "cover damages" "the difference between
the cost of cover and the contract price together with any
incidental or consequential damages." Minn. Stat. § 336.2-712(2);
Barbarossa & Sons, Inc. v. Iten Chevrolet, Inc., 265 N.W.2d 655,
661 (Minn. 1978).


     Here, the jury awarded Simeone $225,000 in incidental damages.
Simeone speculates that this amount represents his cost of cover in
purchasing the 1929 SS Roadster ($470,000 purchase price minus
$250,000 contract price, plus $5,000 for dismissal of SMB, Inc.
from a civil action).     Appellee's Brief at 31.     However, the
difference between the cost of cover and the contract price is not
properly characterized as incidental damages. Rather, incidental
damages are, among other things, the "charges," "expenses" and
"commissions" incurred in effecting cover. Minn. Stat. § 336.2-
715(1).   In contrast, the award of damages for the difference
between Simeone's purchase price of the Roadster and the contract
price falls under Minn. Stat. § 336.2-712 as "cover" damages. The
jury's award of incidental damages in this case represents a double
recovery to the extent that it compensates Simeone for the
difference between the contract price and the price he actually
paid for the Roadster. Simeone was compensated for the difference
between the contract price and the purchase price through both the
compensatory and consequential damages awards. Since there is no
other evidence of incidental damages, the award of incidental
damages must be reversed.


                                V.


     First Bank argues it should not be held accountable for the
failure to convey the vehicle that had been claimed by the Quante
Estate, the Conan-Doyle car.    We do not agree.    The contract,

                               -10-
drafted by First Bank, specifically provides that "this Agreement
shall constitute a binding contract for the disposition of the
Conveyed Assets enforceable as between the Bank and the Purchaser
upon execution of this Agreement by the Bank and the Purchaser.
. . ." (Emphasis added). Under the express terms of the contract,
the phrase "Conveyed Assets" includes the assets claimed by the
Quante Estate. The contract, therefore, provides that the agreed
upon disposition of the Conan-Doyle car is enforceable as between
the Bank and Simeone.     Thus, under the express terms of the
contract, Simeone can enforce his claim with respect to all the
vehicles against First Bank.


     Moreover, the contract provides that the automobiles and
parts, including the Conan-Doyle car, would be conveyed to Simeone
"unless . . . the Bank determines that it is precluded from
performing." Under the express terms of the contract, the Estate
could play no role in the decision to refrain from conveying the
automobiles to Simeone.


     It was First Bank that made the decision not to accept
Simeone's wire transfer of the balance due under the contract on
November 4, 1985. Further, it was First Bank that entered into
negotiations with Gohlike and Torseth and ultimately agreed to sell
the automobiles and parts to Torseth rather than Simeone in
exchange for Gohlike's agreement to dismiss his suit against First
Bank.


     The district court properly held First Bank accountable for
the breach of contract with respect to the Conan-Doyle car.


                               VI.


     A trial court's authority to award prejudgment interest is
governed by statute.   See Minn. Stat. § 549.09.    Prejudgment
interest is an element of damages awarded to provide full

                               -11-
compensation by converting time-of-demand damages into time-of-
verdict damages. It is designed to compensate the plaintiff for
the loss of the use of the money owed. Johnson v. Kromhout, 444
N.W.2d 569, 571 (Minn. Ct. App. 1989). Prior to 1984, prejudgment
interest was allowed on an unliquidated claim only where the
damages were readily ascertainable by computation or reference to
generally recognized standards such as market value. Solid Gold
Realty, Inc. v. J.B. Mondry, 399 N.W.2d 681, 684 (Minn. Ct. App.
1987).   In 1984, however, § 549.09 was amended to provide that
"[t]he prevailing party shall receive interest on any judgment or
award."    Minn. Stat. § 549.09.      The amended statute allows
prejudgment interest "irrespective of a defendant's ability to
ascertain the amount of damages for which he might be held liable."
Lienhard v. State, 431 N.W.2d 861, 865 (Minn. 1988). Further, the
expert's valuations based on the fair market value of the vehicles
and parts, as well as First Bank's own assessment of the value of
the property in 1985, satisfies the readily ascertainable standard.
The "[m]ere difference of opinion as to the exact amount of damages
[is] not sufficient to excuse the defendant from compensating the
plaintiff for loss of the use of [his] money." Solid Gold Realty,
Inc., 399 N.W.2d at 684 (quotation omitted).


     We conclude that Simeone is entitled to prejudgment interest
on the revised damages award.


                               VII.


     Based on the foregoing, the judgment of the district court is
affirmed in part and reversed in part and remanded for further
proceedings consistent with the views expressed in this opinion.




                               -12-
A true copy.


     Attest:


          CLERK, U. S. COURT OF APPEALS, EIGHTH CIRCUIT.




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