The Corner, Inc. v. Pinnacle, Inc.

The Corner, Inc. (defendant) operated a lounge that provided on-site entertainment for its guests. On September 9, 1993, The Corner signed a lease agreement with Pinnacle, Inc. (plaintiff) for the lease of coin-operated equipment, to include a pool table, a dart board, a jukebox, and two vending machines. The term of the lease was for three years. With regards to the pool table, the agreement provided that The Corner would make a down payment of $400 and pay $250 for 12 months, after which it had the option to purchase the pool table for $1 and pay Pinnacle $75 per month for the remainder of the term. On September 13, 1993, The Corner repudiated the agreement. Pinnacle was able to lease the dartboard to another business but was unable to do so for any of the other equipment. Pinnacle returned the pool table and jukebox to their suppliers, but it incurred a $650 restocking fee. Pinnacle sued for breach of contract and to recover damages. At trial, The Corner admitted to breaching the contract, and the only contested matter was the measure of damages. The trial court awarded damages to Pinnacle calculating the contract price and then deducting the estimated depreciation for the various pieces of equipment. For the pool table, the trial court calculated damages as though The Corner had exercised the purchase option after 12 months and then paid for the service fee for two more years. The Corner appealed.