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GRUMMAN FLXIBLE CORP. v. CITY OF LONG BEACH

October 30, 1980

GRUMMAN FLXIBLE CORPORATION, Plaintiff,
v.
CITY OF LONG BEACH, Defendant.



The opinion of the court was delivered by: BRAMWELL

DECISION AND ORDER

In July and August of 1977, the defendant City of Long Beach received eight new mass transit buses from the plaintiff Grumman Flxible Corporation (hereinafter referred to as "Grumman"). The plaintiff, however, had to wait over two years to collect full payment for the buses, *fn1" and has yet to receive the finance charge to which it believes it is entitled in accordance with its agreement with the defendant. To secure such a charge, the plaintiff instituted the instant breach of contract action in May of 1979. This motion seeks summary judgment in that action.

 Rule 56 of the Federal Rules of Civil Procedure permits a district court to grant summary judgment when no questions of material fact exist and when the moving party is entitled to judgment as a matter of law. The movant has "the burden of showing the absence of a genuine issue of material fact." Adickes v. S.H. Kress and Co., 398 U.S. 144, 157, 90 S. Ct. 1598, 1608, 26 L. Ed. 2d 142 (1970). See SEC v. Research Automation Corp., 585 F.2d 31 (2d Cir. 1978). The plaintiff argues that the language of the relevant agreement and the negotiation history of said agreement enables it to sustain this burden. In opposition, the defendant maintains that the parties never reached a meeting of the minds on the contractual provision upon which the plaintiff predicates this motion, and that such a provision is contrary to law. Since an assessment of these conflicting contentions necessitates a review of the history of the relevant agreement, this Court initially will undertake such a review.

 The event that spawned the relationship between the parties occurred on July 2, 1976 when the Central New York Regional Transit Authority ("CNYRTA") announced its intent to receive bids for the purchase of heavy duty transit buses (Pl. Ex. B).* In making this announcement, CNYRTA acted on behalf of sixteen "procuring agencies" (Pl. Ex. F). These agencies included the defendant City of Long Beach (Pl. Ex. G).

 With respect to the City of Long Beach, CNYRTA introduced a specific "proposal form" into the bid process (Pl. Ex. G). This form contained the following proposed terms of payment:

 
1. Total bid price is based on payment terms of net 20 days after acceptance of each bus.
 
2. Extended bid price if for payments made 21 or more days after acceptance.

 Id. In accordance with these proposed procedures, the plaintiff submitted a bid to the defendant for a "total price" of $ 545,710.32 and for an "extended price" of $ 35 per (bus) per day in excess of 20 days" (Pl. Ex. L, M; Def. Ex. A).** This bid was submitted after CNYRTA approved the plaintiff's request that acceptance, for the purpose of calculating the "extended price," be defined as operational usage of the buses (Pl. Ex. I, J).

 On December 20, 1976, the defendant sent the plaintiff a response to the plaintiff's bid, which read:

 
A formal notice is hereby given to proceed with the manufacture of eight (8) 30' diesel powered transit coaches and other related equipment, in conformance with the general conditions and specifications on which your bid dated August 16, 1976, was based.
 
As specified in your bid proposal, your company will complete delivery within 240 days after receipt of this formal notice to proceed.
 
The manufacture of these buses is pursuant to the terms and conditions of the contract entered into by and between the City of Long Beach and the Flxible Company.
 
The total contract amount for these eight (8) buses shall not exceed $ 545,710, which is based upon your unit price of $ 67,691 for ...

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