United States District Court, Southern District of New York
May 30, 1990
H. SAND & CO., INC., PLAINTIFF,
AIRTEMP CORPORATION, DEFENDANT.
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.
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,
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
The Port Authority/Carlin Atlas renovation project fell far
behind schedule and the installation and start up of the chillers
was significantly delayed as a result.*fn2 As early
as April 1978 Sand began to complain to Carlin Atlas about the
delays and the resulting costs. The delays continued and Sand
continued to protest in writing to Carlin Atlas. The original
projected completion date for the machines was between July and
October 1978; however, the delays continued and the chillers were
not actually started up until 1980.
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 [sic] of this
agreement shall be ineffective unless in writing and signed by
both Purchaser and Seller.
The reverse side of the purchase order contains plaintiff's
pre-printed "general conditions and instructions," including its
warranty which states:
All material and/or equipment furnished under this order shall
be guaranteed by the Seller against defects and Seller agrees
to replace without charge to Purchaser said material and
equipment, or remedy any defects, latent or patent, not
due to ordinary wear and tear, or not due to improper use or
maintenance, which defects may develop within one year from
date of acceptance by Owner, or within the guarantee period
set forth in applicable plans and specifications, whichever
period is longer.
The terms and conditions also set forth that ". . . Seller
shall pay to Purchaser all consequential loss or damage resulting
therefrom." (Id.). Additionally, "The material or apparatus to be
supplied against this Purchase Order shall, at Purchaser's
option, be subjected to inspection and test at the maker's
works[,]" and "All material and equipment furnished hereunder
shall be in strict accordance with plans specifications and
general conditions applicable to the contract of Purchaser with
the Owner . . ., and Seller shall be bound thereby in the furnishing of
material and equipment under this Purchase Order." (Id.).
Airtemp submitted a sample photocopy of its standard terms and
conditions of sale to the court which it claims is located on the
reverse side of all Airtemp order acknowledgement forms and
automatically mailed to each prospective customer. Defendant,
however, has not submitted a sample of the front side, i.e., an
actual order acknowledgement, for this or any transaction.
Defendant's terms and conditions differ substantially from
those of plaintiff. Specifically, the warranty reads as follows:
"Airtemp warrants to direct purchasers from it the Applied
Machinery & Systems air conditioning products manufactured by
it to be free of defects in workmanship and material under
normal use service and for a period of 12 months from start-up
or 18 months from date of original shipment, whichever occurs
first. Airtemp's obligation under this warranty is limited
solely to repairing or replacing, f.o.b., which in its
judgment are so defective and are returned prepaid to its
plant or other designated point. . . . No claim under this
warranty will be honored if the equipment covered has been
misused, neglected, damaged in transit or tampered with or
changed in any way and in no event shall Airtemp be liable
for special or consequential damages. THIS WARRANTY IS THE ONLY
WARRANTY APPLICABLE TO APPLIED MACHINERY AND SYSTEMS EQUIPMENT
MANUFACTURED OR SOLD BY AIRTEMP AND IS MADE EXPRESSLY IN LIEU
OF ANY WARRANTIES OTHERWISE IMPLIED BY LAW, INCLUDING, BUT NOT
LIMITED TO IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS
FOR ANY PARTICULAR PURPOSE. THE REMEDIES UNDER THIS WARRANTY
SHALL BE THE ONLY REMEDIES AVAILABLE TO THE PURCHASER OF THE
EQUIPMENT OR ANY OTHER PERSON AND NEITHER AIRTEMP NOR THE
AUTHORIZED MANUFACTURERS' REPRESENTATIVE ASSUMES ANY OTHER
OBLIGATION OR RESPONSIBILITY WITH RESPECT TO THE CONDITION OF
THE EQUIPMENT AND NEITHER ASSUMES NOR AUTHORIZES ANYONE TO
ASSUME FOR ANY OF THEM ANY ADDITIONAL LIABILITY."
(Sherman Affidavit Ex. E).
Perhaps the most glaring difference between the two warranties
is differing time periods each covers. Plaintiff's warranty runs
"one year from date of acceptance by Owner, or within the
guarantee period set forth in applicable plans and specifications
[not provided to the court], whichever period is longer."
(Sherman Affidavit Ex. C). Defendant's warranty runs "for a
period of 12 months from start-up or 18 months from date of
original shipment, whichever occurs first." (Sherman Affidavit
The warranties also differ with respect to the extent of their
coverage. In particular, plaintiff's warranty is for repair
and/or replacement and extends to consequential damages ("In the
event the equipment does not meet the foregoing requirements
Seller shall immediately on notice replace same, or remedy any
deficiency, without expense to the Purchaser; and further, Seller
shall pay to Purchaser all consequential loss or damage resulting
Affidavit Ex. C.). While defendant's warranty is also limited to
a repair and replacement guarantee, it excludes itself from any
liability for consequential damages. (Sherman Affidavit Ex. E).
Both documents state that the sale was conditioned on the
acceptance of their respective terms and stipulate that any
changes or alterations to their agreement must be in writing.
There is no evidence that the parties altered either of these
documents. Further, there is no evidence that the Sand purchase
order was accepted by a signature on the form returned to
plaintiff (as required by its own terms) or that there was an
acceptance of the acknowledgement allegedly sent by Airtemp to
I. Statute of Limitations
Before examining the parties' claims with respect to the
conflicting warranty terms, as a threshold matter we must address
defendant's assertion that plaintiff's action is time-barred by
the statute of limitations.
The dispute before us involves the sale of goods (hermetic
centrifugal chillers); thus, U.C.C.'s Article 2 supplies the
governing limitation period. N.Y.U.C. C.Law § 2-102
(McKinney 1964). See also Uchitel v. F.R. Tripler & Co.,
107 Misc.2d 310, 312, 434 N.Y.S.2d 77, 79 (App.Term, 1st Dept.
In pertinent part, the U.C.C. provides: 1) An action for breach
of any contract for sale must be commenced within four years
after the cause of action has accrued. By the original agreement
the parties may reduce the period of limitation to not less than
one year but may not extend it.
2) A cause of action accrues when the breach occurs, regardless
of the aggrieved party's lack of knowledge of the breach. A
breach of warranty occurs when tender of delivery is made,
except that where a warranty explicitly extends to future
performance of the goods and discovery of the breach must await
the time of such performance the cause of action accrues when
the breach is or should have been discovered. . . .
N YU.C.C.Law § 2-725 (McKinney 1964).
Thus, under the U.C.C., "any action for breach of a contract
for sale, including an action based on breach of warranty, must
be brought within four years of date of delivery unless the
warranty explicitly extends to future performance." Stumler v.
Ferry-Morse Seed Co., 644 F.2d 667, 673 (7th Cir.1981).
See also City of New York v. Pullman Inc., 662 F.2d 910, 919 (2d
Cir.1981), cert. denied sub nom. Rockwell Int'l Corp. v. City of
New York, 454 U.S. 1164, 102 S.Ct. 1038, 71 L.Ed.2d 320 (1982);
Long Island Lighting Co. v. Transamerica Delaval, Inc., 646 F.
Supp. 1442, 1454 (S.D.N.Y. 1986); City of Cincinnati v.
Dorr-Oliver, Inc., 659 F. Supp. 259, 261 (D.Conn. 1986);
Holdridge v. Heyer-Schulte Corp. of Santa Barbara, 440 F.
Supp. 1088, 1101 (N.D.N.Y. 1977).
In its attempt to survive a statute of limitations dismissal,
plaintiff maintains that "tender of delivery" did not occur when
physical possession of the chillers was transferred from Airtemp
to Sand's agent, between January and March 1978, but rather
occurred, at the earliest, in January 1979-once chiller # 4
was tested and returned. Alternatively, plaintiff maintains that
the Port Authority plans and specifications required certain
testing and service of the equipment subsequent to installation
of the chillers and "until these conditions were met (and they
never were) `delivery' could not have been completed, by
definition." (Sand Memorandum in Support of Motion for Partial
Summary Judgment at 6.) Finally, plaintiff asserts that the
statute of limitations did not expire because the warranty
extends to future performance.
Sand's first contention is based upon the undisputed fact that
the four chillers were shipped to its agent Associated between
January and March 1978, yet chiller # 4 was returned to Airtemp
in November 1978 because defendant did not conduct a test run of
the chiller prior to shipping it. Chiller # 4 was shipped to Sand
in January 1979 after it was tested. Thus, plaintiff
avers, "tender of delivery" occurred in January 1979. As a
result, Sand's cause of action would be saved since it initiated
litigation in December 1982, which falls within the four year
statute of limitation imposed by the U.C.C.
Under Sand's theory, the goods were not "tendered" until all
four chillers satisfied the required testing. Although plaintiff
does not rely on any contractual language to support this
argument, we look to the only source available to the court for
which to base this claim. Plaintiff's purchase order provides
"[a]ll material subject to inspection at time of manufacture" and
"[t]he material or apparatus to be supplied against this Purchase
Order shall, at the Purchaser's option, be subjected to
inspection and test at the maker's works." (Exhibit C).
"Tender of delivery" has been defined in U.C.C. section
2-503, which states in part: "Tender of delivery requires
that the seller put and hold conforming goods at the buyer's
disposition . . ." N.Y.U.C.C.Law § 2-503 (McKinney
1964). Despite the language "conforming goods," the term has
been used to refer to goods offered in fulfillment of a contract
even if there is a defect when the goods are measured against the
specific contract obligations. Thus, even delivery of non-conforming
goods may constitute tender of delivery. Standard
Alliance Indus., Inc. v. Black Clawson Co., 587 F.2d 813, 819
(6th Cir. 1978), cert. denied, 441 U.S. 923, 99 S.Ct. 2032, 60
L.Ed.2d 396 (1979); Long Island Lighting Co., 646 F. Supp. at
1455; Ontario Hydro v. Zallea Systems, Inc., 569 F. Supp. 1261,
1267 (D.Del. 1983); Uchitel, 107 Misc.2d at 314, 434 N.Y.S.2d at
If we were to apply § 2-503 literally "until the
seller tenders conforming goods, the limitation period provided
in § 2-725 would never apply. This would circumvent the
very purpose of § 2-725, which . . . is to provide a finite
period in time when the seller knows that he is relieved from
liability for a possible breach of contract for sale or breach of
warranty." Ontario, 569 F. Supp. at 1267. "To argue that in a
breach of warranty action accrual does not occur until a proper
tender is made, would be to substitute in place of section
2-725's four year limitation period a statute of non-limitation
and allow the buyer a perpetuity in which to bring
suit. We therefore believe that a tender of non-conforming goods
starts the four year breach of warranty period running." Uchitel,
107 Misc.2d 310, 314, 434 N.Y.S.2d 77, 80.
Even when we consider the fact that chiller # 4 was tested at a
later date in the transaction than the other three, we are not
precluded from finding that tender of delivery occurred when all
four chillers were shipped to Sand's agent during January to
Plaintiff relies heavily on City of New York v. Pullman Inc.,
supra, to support its argument that tender of delivery could not
have occurred until after inspection requirements were met. In
Pullman, the City of New York contracted to buy 754 R-46
subway cars. Pursuant to the contract, a sampling of 10 subway
cars were delivered for a 30 day on-line test to determine
whether the cars conformed with the requirements of the contract.
Pullman, 662 F.2d 910. The court in Pullman found that the
delivery of the ten subway cars for testing was not "tender of
delivery", but rather a fulfillment of a contract requirement.
The court held that tender of delivery occurred after completion
of the on-line testing, when delivery of the remaining cars
began. Id. at 919.
We are ever so mindful that the Pullman holding is based upon a
rare and distinctive set of facts and thus we must be restrictive
in our application of its rulings. As the court in Ontario Hydro
v. Zallea Systems, Inc. stressed: ". . . [Pullman]
should not be applied liberally to all breach of warranty cases."
Ontario, 569 F. Supp. 1261, 1267. Moreover, we find enough
distinctions between Pullman and the case at bar to warrant
The Pullman case presented a unique factual situation in which
the parties had agreed to a 30 day on-line inspection period. The
inspection involved only a small percentage (2%) of the total
goods. Once the inspection period was over and delivery of the
goods began, the statute of limitations accrued. Pullman, 662
F.2d at 919. Hence, the clause in Pullman has been construed as a
"pre-delivery inspection" clause. Ontario, 569 F. Supp. at 1268.
Moreover, it is important to note that the Second Circuit's
holding in Pullman was based upon its finding that "[t]he
contract specifications provided that the [subway car] design
would be required to pass a 30 day on-line inspection before it
would `conform' to the contract requirements." Pullman, 662 F.2d 910,
919. The court stressed:
"Until that inspection occurred, therefore, there could be no
tender of `conforming goods' within the meaning of § 2-503
(1). Moreover, under the contract [the buyer was] . . . not
obliged to take any steps until [the seller] conformed to the
specifications by delivering cars which had completed the 30
day test, since the contract specifically provided that any
cars built before the 30 day test was completed were constructed
at the seller's risk."
Id. (emphasis added). That is, ". . . the [Pullman] inspection
test was to be conducted not only before the vast balance of the
goods were delivered but it was designed to determine whether the
balance of the goods should in fact be delivered." City of
Cincinnati, 659 F. Supp. 259, 264. In contrast, in the case at
bar the contract does not provide for a finite period of
inspection nor does it spell out specific testing measures. The
inspection clause is unclear and ambiguous as to whether the
parties agreed that inspection or testing at time of manufacture
constituted a condition precedent to the delivery of the chillers.*fn5
Our finding that the inspection provision contained
in Sand's purchase order does not postpone tender of delivery
(unlike the finding in Pullman) is further supported by several
cases in which courts have also found Pullman distinguishable. In
our opinion, the facts of these cases are far more similar to
Pullman than the facts of the instant case, thus strengthening
the basis for our conclusion.
In City of Cincinnati v. Dorr-Oliver, supra, the parties
signed a sales contract requiring extensive testing of goods
before and after the buyer obtained possession of them. In fact,
they provided for three levels of testing for the equipment:
"There was to be, first, a shop test for each of the 16
centrifuges to be delivered. The completely assembled
centrifuge was to be tested at the defendant's manufacturing
plant and was to be witnessed by a Registered Professional
Engineer. . . . No centrifuge was to be shipped to the
plaintiff until the witnessing engineer had approved the
shop test reports. The second test was to be a simulated
performance test. . . . at a wastewater treatment plant of the
defendant's choice. . . . The test was to be conducted on only
one centrifuge. . . . If the equipment failed initially, the
test could be performed again. If the equipment failed a third
time, the plaintiff had the option of cancelling the contract,
with no costs being charged to it, or the plaintiff could
accept the equipment contingent upon the results of the third
level of testing. . . . Unlike the first two test, [this] was
performed both after all the equipment was installed and
operating at . . . [plaintiffs plant] for at least four
weeks and after the parties mutually agreed that the equipment
was in suitable condition for continuous operation. Each
centrifuge was to be tested to determine compliance with the
specification requirements and guaranteed performance. . . ."
Id. at 260 (emphasis added).
Despite the many explicit testing requirements spelled out in
their contract, the City of Cincinnati court found tender of
delivery occurred when the centrifuges were physically delivered
to plaintiff. "`[T]ender of delivery' as contemplated by [Section
2-725] . . . is not contingent upon inspection, testing, or
acceptance." Id. at 262. The court distinguished the case from
Pullman and found that the contract contemplated a post-delivery
inspection which required the installation of the equipment, and
"to trigger the statute of limitations at the date of the
post-delivery inspection would circumvent the purpose of §
2-725." Id. at 263.
In Long Island Lighting Co. v. Transamerica Delaval, supra,
plaintiff LILCO issued a purchase order to defendant TDI,
awarding it the contract to manufacture three emergency diesel
generators to be used in the construction of a nuclear power
plant. The diesels were delivered to plaintiff in 1976, but were
not installed until 1981.*fn6 In August 1983, the crankshaft of one
of the diesels broke during pre-operational testing; cracks were
found in the other two diesels as well. The plaintiff in Long
Island Lighting Co. relied on Pullman, contending that tender of
delivery was not made when the diesels were shipped, but rather,
when they were installed. Id. at 1442.
The court found the Pullman case inapposite:
Unlike the defendant in Pullman, TDI delivered the entire order
of three diesels in 1976. Moreover, the TDI/LILCO contract
contained no provision that the goods be tested to assure
conformance with the contract before delivery was complete.
Id. at 1455 (emphasis added).
Finally, in Ontario Hydro v. Zallea Systems, supra, plaintiff
entered into two contracts (represented by purchase orders) with
defendant whereby defendant agreed to manufacture and deliver
forty expansion joints for use in construction of a heavy water
plant for a nuclear generating complex. Plaintiff argued there
was never a proper tender of delivery and the statute of
limitations could not begin to run until plaintiff had inspected
the goods and had determined whether they in fact conformed to
the contract. In support of its position, plaintiff pointed to
the terms of the contract which apparently provided for the
inspection of the goods prior to acceptance. Id. at 1261.
The Ontario court differentiated its facts from Pullman noting:
In the present case, there was no finite period of inspection.
Moreover, the inspection clause was not directed to the tender
of delivery aspect but rather to [plaintiff's] right to reject
the goods once they were delivered, for the clause focuses
not on delivery but on the preservation of [plaintiff's] right
to reject after full delivery. . . . Therefore, the Court
finds, as a matter of law, that the tender of delivery occurred
when, in accordance with the purchase orders, the expansion
joints were delivered to the job site. . . .
Id. at 1268 (emphasis added).
As to plaintiff's alternative position that "tender of
delivery" cannot and has not occurred since the Port Authority
plans and specifications required testing which could only be
achieved upon installation and start-up of the equipment, Sand
cites no legal authority supporting its position that "by
definition" delivery was not completed until the specifications
were met. Nevertheless, we conclude that the Port Authority plans
and specifications testing
and capability requirements do not postpone the commencement of
the statute of limitations.
The contract in the City of Cincinnati case,
supra, contained many testing requirements,
including tests after installation and operation, yet
the court found tender of delivery occurred when the
centrifuges were physically delivered to plaintiff, emphasizing
that tender of delivery is not contingent upon inspection,
testing, or acceptance. City of Cincinnati, 659
F. Supp. at 262.
"Whether or not the buyer at that time `accepts' the goods .
. . or, on the other hand, withholds acceptance until he or she
has had an opportunity to fully inspect for defects, does not
affect when the buyer must institute suit for breach of
warranty. This is so even if the defect does not appear until
after the limitations period has run. Once the seller tenders
the goods, the limitations period begins to run. . . ."
Raymond-Dravo-Langenfelder v. Microdot, Inc.,
425 F. Supp. 614, 617 (D.Del. 1977) (footnotes omitted). This is
fundamental to the principle of § 2-725 in that a breach of
warranty occurs regardless of the aggrieved party's lack of
knowledge of the breach.*fn7
In Raymond-Dravo-Langenfelder v. Microdot, supra,
defendant agreed to sell to plaintiff pier forms meeting
certain detailed specifications which were to be used in the
construction of a bridge. In an attempt to avoid the statute of
limitation time bar, plaintiff argued that it "accepted the
pier forms for towing only and that it reserved the right to
conduct later inspections and to reject the goods if they did
not conform to the specifications of the contract."
Id. The court held, "[w]hile this may be so, it is
irrelevant to the statute of limitations question. The code
clearly states that a cause of action for breach of warranty
accrues when tender of delivery is made." Id.
Notwithstanding the foregoing, notably, neither party
submitted as evidence the Port Authority plans and
specifications. Fed.R.Civ.P. 56 requires a party seeking
summary judgment (as well as partial summary judgment) to
support its motion with proof:
Sworn or certified copies of all papers or parts
thereof referred to in an affidavit [supporting or
opposing a motion for summary judgment] shall be
attached thereto or served therewith. . . . When a
motion for summary judgment is made . . . an
adverse party may not rest upon the mere
allegations or denials of the adverse party's
pleading, but the adverse party's response, by
affidavits or as otherwise provided in this rule,
must set forth specific facts showing that there
is a genuine issue for trial. If the adverse party
does not so respond, summary judgment, if
appropriate, shall be entered against the adverse
Fed.R.Civ.P. 56(e). See Walling v. Fairmont Creamery Co., 139 F.2d 318, 322
(8th Cir. 1942). ("When written documents are relied on, they must be
exhibited in full. The statement of the substance of written instruments or
affiant's interpretation of them or of mere conclusions of law or
restatements of allegations of the pleadings are not sufficient."), Petroleo
Brasileiro, S.A., Petrobras v. Ameropan Oil Corp., 372 F. Supp. 503, 506
(E.D.N.Y. 1974), (quoting Donnelly v. Guion, 467 F.2d 290, 293 (2d Cir.
1972)) ("A party opposing a motion for summary judgment simply cannot make a
secret of his evidence until the trial, for in so doing he risks the
possibility that there will be no trial.").
If there is documentary evidence to support an assertion,
Rule 56 requires a party to come forward with it. Id. When documents are not
submitted, they "cannot . . . be relied upon to raise a genuine issue of
fact." Washington Post Co. v. Keogh, 365 F.2d 965, 971 (D.C. Cir. 1966),
cert. denied, Keogh v. Washington Post Co., 385 U.S. 1011, 87
S.Ct. 708, 17 L.Ed.2d 548
(1967). By its total failure to submit any evidence regarding
the contents or applicability of the Port Authority plans and
specifications, Sand has failed to raise any genuine issue of
material fact with respect to them. Therefore, Sand can neither
obtain partial summary judgment nor defeat defendant's motion
based upon evidence not before the court.
In an attempt to escape the narrow interpretation courts have
applied to U.C.C. § 2-275(1), plaintiff asserts that this is a situation
involving future performance and thus, under the statutory exception of §
2-275, the breach did not occur until start up of the chillers when the
breach "is or should have been discovered. . . ." N.Y.U.C.C.Law § 2-725(2)
(McKinney 1964). Sand maintains that the plans and specifications required
Airtemp to provide chillers with certain performance capabilities (i.e.,
1800 GPM capacity for chilled water and 2620 GPM capacity for condenser
water) which could only be determined when the chillers were actually put
into service. Plaintiff therefore reasons that "this in effect constitutes
`future performance' requirements." (Sand Memo in Support of Motion for
Partial Summary Judgment at 6.).
Plaintiff's argument is based upon the fact that the Port
Authority plans and specifications provide, inter alia, for testing of the
chillers after start up. We must note once again that plaintiff has failed
to submit the specifications to the court; we cannot examine the language
contained within this apparently significant document. Accordingly, pursuant
to Fed.R.Civ.P. 56, plaintiff's argument must be rejected.
Even if we were to assume that the specifications are
applicable and are as Sand describes them in its memorandum, we
hold plaintiff's "future performance" argument non-meritorious.
Section 2-725(2) provides that "[a] breach of warranty occurs
when tender of delivery is made, except that where a warranty
explicitly extends to future performance of the goods. . . ." N.Y.U.C.C.Law
§ 2-275(2) (McKinney 1964) (emphasis added). "Most courts have been very
harsh in determining whether a warranty explicitly extends to future
performance. Emphasizing the word `explicitly,' they have ruled that . . .
most express warranties cannot meet the test and no implied warranties can
since, by their very nature, they never `explicitly extend to future
performance.'" Standard Alliance, 587 F.2d 813, 820. See also Stumler,
644 F.2d at 671; Carabello v. Crown Controls Corp., 659 F. Supp. 839, 842
(D.Colo. 1987); City of Cincinnati, 659 F. Supp. at 264; Raymond, 425
F. Supp. at 618; Binkley Co. v. Teledyne Mid-America Corp.,
333 F. Supp. 1183, 1186 (E.D.Mo. 1971), aff'd,
460 F.2d 276 (8th Cir. 1972); Poppenheimer v. Bluff City Motor
Homes, Division of Bluff City Buick Co., 658 S.W.2d 106,
110-111 (Tenn. Ct. App. 1983); Centennial Ins. Co. v. General Elec. Co.,
74 Mich. App. 169, 170-171, 253 N.W.2d 696, 697 (Mich. Ct. App. 1977).
The term "explicit" has been explained as plain language
which is distinctly stated, clear and unequivocal to the point
that there is no doubt as to its meaning. Binkley, 333 F. Supp. at 1186;
Centennial, 253 N.W.2d at 697. If words are merely implied or conveyed by
implication they are not explicit. Id. As one court explained:
"The difficulty of determining conformity with a
warranty at the time of delivery is a problem
common to many situations involving warranties by
description. Such difficulties have not been
regarded as controlling, however, in the absence
of contract language explicitly warranting future
performance. The drafters of the UCC decided that
the seller's need to have some clearly defined
limit on the period of its potential liability
outweighed the buyer's interest in an extended
warranty and reserved the benefits of an extended
warranty to those who explicitly bargain for them."
Raymond, 425 F. Supp. 614, 618 (emphasis added).
Even if we look to the actual language plaintiff alleges is
contained within the specifications, we do not find any
explicit language that can be construed as a future performance
provision. According to Sand, the Port Authority plans and
required Airtemp to provide the chillers with certain
performance capabilities, including 1800 GPM capacity for
chilled water, 2620 GPM capacity for condenser water, trained
representatives for a period of three days per machine to
assist in the start up of each of the chillers, certain testing
to be performed by Airtemp after installation of the chillers,
as well as numerous other requirements which could only be
determined after installation.
Plaintiff attempts to circumvent the omission of language
which explicitly warrants future performance by claiming that
the language is inherent in the terms of the Port Authority
document; Sand maintains that it could not determine whether
the machinery met the required capacity requirements until
actual start up of the chillers. In light of the "explicit"
language requirement mandated by the U.C.C., we hold that the
Port Authority plans and specifications cannot "in effect"
apply to future performance.
Further, an examination of the warranties contained in the
purchase order and alleged acknowledgment form of Sand and
Airtemp, respectively, reveals that neither explicitly extended
to future performance.
Plaintiff's warranty states, in pertinent part: ". . . Seller
agrees to replace without charge to Purchaser said material and
equipment, or remedy any defects, latent or patent, not due to
ordinary wear and tear . . . which defects may develop within
one year of acceptance by Owner. . . ." (Sherman Affidavit Ex.
C.) In relevant part, defendant's warranty provides: "Airtemp's
obligation under this warranty is limited solely to repairing
or replacing parts . . ." (Sherman Affidavit Ex. E). Both
warranties specifically contain provisions for the repair or
replacement of defective goods and make reference to a limited
The rule regarding a repair or replacement warranty was set
forth in Ontario, supra, and the distinction between such a warranty and one
which warrants future performance was drawn therein:
A warranty of future performance of a product
must expressly provide some form of guarantee that
the product will perform in the future as
promised. . . . On the other hand, a repair or
replacement warranty does not warrant how the
goods will perform in the future. Rather, such a
warranty simply provides that if a product fails
or becomes defective, the seller will replace or
repair within a stated period.
Thus, the key distinction between these two
kinds of warranties is that a repair or
replacement warranty merely provides a
remedy if the product becomes defective, while a
warranty for future performance guarantees the
performance of the product itself for a stated
period of time.
Ontario, 569 F. Supp. 1261, 1266 (emphasis in original). The
court in Ontario also set forth sound policy reasons for the
"narrow exception" provided by U.C.C. § 2-725(2):
. . . [I]t was designed by the drafters of the
Uniform Commercial Code to serve the important
function of providing a point of finality for
businesses after which they could destroy their
business records without the fear of a subsequent
breach of contract for sale or breach of warranty
suit arising to haunt them.
To find that the Port Authority plans and specifications or
the parties' warranties were covered by the 2-725(2) exception
"would require an entirely strained and unrealistic
interpretation of the phrase `future performance of the goods.'
Moreover, such a result would also require that we completely
ignore the code drafter's command that the warranty be
explicit." Poppenheimer, 658 S.W.2d 106, 111.
In light of the foregoing, we find that "tender of delivery"
within the meaning of U.C.C. § 2-725 occurred when the chillers were shipped
between January and March 1978. Hence, the statute of limitations began to
run at that time, expiring at the latest, March 1982. See Ontario, 569
F. Supp. at 1269, Pullman, 662 F.2d at 919. Since this action was commenced
December 16, 1982, more than four years after tender of delivery, it is
time-barred as prescribed by the U.C.C.
In accordance with our findings hereinabove, we are
constrained to and do grant defendant's motion for summary
judgment and dismiss as moot plaintiff's motion for partial