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H. SAND & CO., v. AIRTEMP CORP.

May 30, 1990

H. SAND & CO., INC., PLAINTIFF,
v.
AIRTEMP CORPORATION, DEFENDANT.



The opinion of the court was delivered by: Irving Ben Cooper, District Judge.

OPINION

RELIEF SOUGHT

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 purchase order).

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.

STATEMENT OF FACTS

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, Inc. Airtemp's 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
  of sale.
  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 January 1979.

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 ...

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