Whitesell Precision Components Inc. v. Autoform Tool & Manufacturing LLC and Hitachi Automotive Systems Inc.

Summary

The Indiana Court of Appeals held that Autoform, having committed the first material breach of the parties’ contract, could not recover damages for Whitesell’s subsequent breaches. The court reversed the judgment in Autoform’s favor on its breach-of-contract counterclaim, affirmed the denial of Autoform’s attorney-fee request, and remanded for recalculation of the net damages award.

Holdings

1. A party first guilty of a material breach may not maintain an action against the other party or seek to enforce the contract against that party after the other party subsequently breaches. The court rejected the trial court's reliance on Watson Water Company as recognizing an exception based on continued performance and held that Autoform could not recover damages on its breach of contract counterclaim.
2. Autoform was not a prevailing party entitled to additional attorneys' fees under Indiana Code section 34-52-1-1 because the court reversed the judgment in Autoform's favor on its breach of contract counterclaim and Autoform did not receive a favorable judgment.

Questions Presented

1. Whether a party that committed the first material breach of a contract may nevertheless recover damages for the other party's later breaches when the parties continued performing under the contract.
2. Whether Autoform was a prevailing party entitled to additional attorneys' fees under Indiana Code section 34-52-1-1 after its breach of contract counterclaim was awarded damages but those damages were offset against Whitesell's larger award.

Disposition

reversed_and_remanded