The opinion of the court was delivered by: Irving Ben Cooper, District Judge.
Defendant Airtemp Corporation ("Airtemp") moves for summary
judgment pursuant to Fed.R.Civ.P. 56(b) dismissing the amended
complaint of plaintiff H. Sand & Co. Inc. (Sand) on the grounds
that: (a) plaintiff Sand did not initiate litigation until more
than four years after tender of delivery of the goods and thus,
under New York Uniform Commercial Code (U.C.C.) § 2-725
this action is time-barred; (b) Sand expressly assented to
Airtemp's warranty terms in writing which expired long before
Sand made any claim for service thereunder; or (c) since Sand's
and Airtemp's terms and conditions of sale are conflicting
regarding the sale of the goods, under U.C.C. § 2-207,
neither parties' terms apply; instead, the implied warranties of
U.C.C. §§ 2-314 and 2-315 are imposed by operation
of law. Defendant also contends that even if Sand's warranty is
applicable, it had expired by the time plaintiff requested
service from Airtemp because service was requested more than "one
year from acceptance by owner" (the terms contained within Sand's
Plaintiff opposes defendant's motion for summary judgment and
moves for partial summary judgment pursuant to Fed.R.Civ.P. 56
(a), maintaining that plaintiff's terms and conditions of sale,
which contain its warranty, are the only terms and conditions
which have been exchanged between the parties in this sale, and
"no applicable limitation of liability exists which would
restrict recovery to the terms of defendant's alleged `standard
warranty'." (Plaintiff's Notice of Motion, filed August 24,
1988). Alternatively, even if there are conflicting terms and
conditions of sale between the parties and a "battle of the
forms" situation exists, the limitations imposed by defendant's
warranty would not apply.
As part of a series of major improvements to its facilities in
the metropolitan area, the Port Authority of New York and New
Jersey ("Port Authority") undertook the renovation of its main
Bus Terminal located at 8th Avenue and 40th Street in Manhattan,
New York. Carlin Atlas was retained by Port Authority as the
general contractor for the renovation project and in turn hired
plaintiff Sand, a heating, ventilation and air conditioning
subcontractor. On or about June 6, 1977, Sand ordered from
defendant Airtemp, an air conditioning manufacturer, four motor
driven hermetic centrifugal chillers, including accessories, for
installation in the Port Authority Bus Terminal. Sand submitted a
purchase order containing its terms and conditions of sale
through Airtemp's sales representative, Charles J. Duwe Sales,
receipt of the purchase order on June 13, 1977 is indicated by
stamp on its face.
Customary to its policy and practice, Airtemp claims to have
forwarded its terms and conditions of sale to Sand by way of an
order acknowledgment form. Despite Airtemp's claim, Sand denies
ever receiving the order confirmation form containing said terms
and conditions. Strikingly, no physical record of an order
acknowledgment form with regard to this particular sale exists.
The only evidence before this court regarding the alleged
procedure is a sworn affidavit of Fred Hagee, president of
Airtemp at the time of the sale; the deposition of an employee,
E. Duane Lynn, and the claimed reverse side of an acknowledgment
form containing Airtemp's terms and conditions of sale.
The Hagee affidavit merely states "[I]t was Airtemp's policy
and procedure to automatically send to each prospective customer
a printed form containing Airtemp's terms and conditions of
sale." (Hagee Affidavit, sworn to August 11, 1988). E. Duane
Lynn, Director of Service at Airtemp at the time of this
transaction, testified as follows:
"Q. . . . Can you state that under oath, that that was in fact
what occurred in 1977 as a matter of course?
A. To my knowledge, all orders received were placed into a
computer, and the computer generated a packet of papers
which contained various amounts of information,. . . . One of those
packets was an acknowledgement, one portion of that packet
was an order acknowledgement, which on the reverse side of
that acknowledgement carried all the terms and conditions
You can go through the files and you will see all the other
papers that were part of that packet, orders in the files —
Q. Have you ever seen that in the files, maybe not on this job,
but on other jobs for 1977?
A. Not the order acknowledgement portion of it, because that
would be sent to the customer —
Q. So you never have seen —. . . .
A. But the other papers are in the files that belong in the
files, otherwise there may be nine or ten sheets. One may be
an order acknowledgement, one may be going to production, one
may go to inventory control, et cetera. They would be there.
But the order acknowledgment would not be there, because that
would be forwarded to the customer. . . ."
(Lynn Deposition, sworn to March 1, 1984 at p. 20).
Manufacture and Delivery of the Chillers
The four chillers were manufactured by Airtemp at its plant in
Bowling Green, Kentucky. Chillers # 1, # 2 and # 3 were tested
during the week of January 3, 1978. Chiller # 4 was not tested at
Airtemp's Bowling Green plant because the company was in the
process of relocating its plant to Edison, New Jersey, and the
fourth unit was finished after the Bowling Green test stand had
been disconnected. All four chillers were shipped to Sand's
agent, Associated Rigging and Hauling Corporation ("Associated")
between January 31 and March 31, 1978.*fn1
In November 1978, once the Edison test stand was assembled,
arrangements were made to ship chiller # 4 from Associated to
Airtemp's Edison plant; the fourth chiller was tested there in
December 1978 with Port Authority witnesses and returned in
Project Delays and Notice of Defect
Plaintiff claims that upon start up, in May 1980, it discovered
for the first time that the chillers did not function properly
and immediately notified defendant.*fn3 Defendant refused to
perform any work on the chillers without additional payment.
Hence, plaintiff performed the necessary repairs on its own and
now seeks over one million dollars in damages as a result of
defendant's refusal to honor the alleged governing warranty.
In support of its claims, plaintiff alleges that plans and
specifications for the manufacture of the chillers were forwarded
to defendant by Port Authority. According to plaintiff, this
"required Airtemp to provide the chillers with certain
performance capabilities, including 1800 GPM capacity for chilled
water, 2620 GPM capacity for condenser water as well as numerous
other requirements which could only be determined after
installation (Joint Pre-Trial Order, at 5). In addition, Airtemp
was required to provide "trained representatives for a period of
three days per machine to assist in the start up of each of the
chillers[,]" (Id. at 6) and "certain testing [was] to be
performed by Airtemp subsequent to installation of the chillers."
(Id. at 5-6). The Port Authority plans and specifications
have not been submitted to this court.
Originally, Sand brought an action against Airtemp's then
parent, Fedders Corporation, on December 16, 1982. The parties
stipulated that Sand would discontinue that action and, for
statute of limitation purposes, any action by Sand against
Airtemp would be deemed to have been started on the date the
Fedders lawsuit was filed.
The Conflicting Warranties
The purchase order Sand submitted to Airtemp contains
information particular to this sale. It reads in pertinent part:
"You are to furnish four (4) Chrysler Air Temp Motor Drives,
Hermetic centrifugal chillers including all accessories service
complete all as per plans and specifications for the above
job. . . . All material subject to inspection at the time of
manufacture. Notify . . . the Port Authority of New York & New
Jersey . . . when and where shipment is made . . ."
(Sherman Affidavit Ex. C).
Pre-printed on the bottom left portion of the form is standard
language applicable to all Sand purchases:
This order shall not be binding until acceptance and return,
within five days, of the signed acknowledgement copy specifying
the shipping date. Such acceptance is subject to the TERMS AND
CONDITIONS STATED ON THE FACE AND REVERSE SIDE OF ORIGINAL
AND ACKNOWLEDGEMENT COPIES HEREOF, which seller agrees shall
constitute the final and complete agreement between Purchaser
and Seller. Any modification or recission ...