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County Asphalt Inc. v. Lewis Welding & Engineering Corp.

decided: June 11, 1971.

COUNTY ASPHALT, INC., PLAINTIFF-APPELLANT,
v.
THE LEWIS WELDING & ENGINEERING CORPORATION, DEFENDANT-APPELLEE



Hays and Feinberg, Circuit Judges, and Blumenfeld, District Judge.*fn*

Author: Blumenfeld

BLUMENFELD, District Judge:

This is a diversity action claiming damages for negligence, breach of contract and breach of warranties arising out of the defendant's performance of agreements to furnish and erect two asphalt plants for the plaintiff. The defendant answered with a general denial and counterclaimed for the unpaid balance of the contract price, damages for conversion of the plants, and for the rental value of an old plant which the plaintiff had traded in as partial consideration for the new ones. After a trial to a jury, it returned a general verdict for the defendant on its first counter-claim accompanied by answers to special interrogatories. The trial judge entered judgment on the verdict and later amended it to include prejudgment interest, 323 F. Supp. 1300. We find no error and affirm the judgment.

I.

To consider what the plaintiff urges as error committed by the District Court in interpreting the jury's answers to the interrogatories, it is necessary to set out a brief over-view of the facts.

In December of 1964, the plaintiff, which had several asphalt plants, decided to replace two of them, one at Tarrytown and another at West Nyack, New York, with new equipment so as to be able to comply with newly adopted New York State specifications for base and finish materials used for road building.*fn1 After direct negotiations between the parties, it was agreed that the defendant would furnish and erect two asphalt plants at West Nyack and Tarrytown for $460,000 in cash and the two old plants which the defendant accepted as trade-ins. A separate written contract for the purchase of each plant was executed, each containing identical terms insofar as the issues raised here are concerned.

At the outset, the defendant was faced with the problem of obtaining unionized workers at West Nyack and Tarrytown. To meet that difficulty, the parties entered into an oral supplemental agreement under which the plaintiff would act as the nominal employer of such workers as the defendant requested, and backcharge the defendant for the expenditures for labor and materials which it incurred on its behalf. The principal factual issues at trial were whether the defendant had substantially performed its contracts and whether it was guilty of breaches of warranties, with respect to the quality and performance capabilities of the plant equipment. Not in dispute was the fact that the plaintiff owed a balance of $385,229.25 on the purchase price before set-off of the back-charges for labor and materials.

The defendant counterclaimed for this unpaid balance of the purchase price and for the rental value of one plant which the plaintiff had continued to use after it had transferred it to the defendant as part of the purchase price. In addition, the defendant sought damages for the plaintiff's conversion of the two new plants brought about by its making and filing a financing agreement pledging the two plants as security for loans from a New York bank in the amount of $600,000 in violation of the contract provision that title was to remain in the defendant until final payment was made.

At the close of a nineteen day trial, the court charged the jury clearly and succinctly on all of the issues in the case. The plaintiff does not assert error in the charge. Its contention that it was error to deny it a jury trial on the question of consequential damages will be considered later.

II.

At the completion of his charge, the judge submitted to the jury appropriate forms for a general verdict with special interrogatories and directed them to answer the interrogatories and render a general verdict. The jury returned a general verdict for the defendant in the amount of $226,000. Contending that there was an irreconcilable conflict between the jury's answers to the special interrogatories and the general verdict, the plaintiff moved to reduce the judgment to $66,000 or for a new trial. Judge Croake concluded that the general verdict and the replies to the special interrogatories were entirely consistent and harmonious. We agree. The denial of the plaintiff's motion to amend the judgment or for a new trial was correct.

The plaintiff's principal contention on this appeal is that the jury's answers to the interrogatories mandated a reduction of the general verdict for the defendant to the amount of $66,000. The form submitted to the jury, and as answered by them, is shown to the extent that is relevant here:

"Please Read All Questions Before Proceeding to Answer Any of Them.

"General Verdicts With Special Interrogatories

"I -- Questions in the nature of a general verdict.

"1. Is the plaintiff (County Asphalt) indebted to the defendant (Lewis Welding) for any amount not offset by the total of backcharges and damages, if any, found by you in your answers to the special interrogatories below?

"Answer (yes or no) Yes

"1a. If your answer to Question 1 is 'yes,' state the amount in dollars. $226,000

"2. If the answer to Question No. 1 is 'No,' is the defendant (Lewis Welding) indebted to the plaintiff (County Asphalt) for any amount the latter expended over and ...


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