this warranty. Without even exploring this "beneficiary" theory, I must dismiss this express warranty claim because there is no express warranty contained in the KMRC-Plaza contract.
The KMRC-Plaza contract was in the form of a Telex, the substance of which merely confirms the purchase price and amount of oil sold. There is no express warranty on the face of Telex to Plaza, nor is there any reference made whatsoever to such a warranty.
U.C.C. § 2-313(1) states that in order for an effective express warranty to be made, the seller must: a) make a promise or affirmation which becomes the basis for the bargain with the buyer; or b) describe the quality of the goods to be sold so that description becomes the basis for the bargain; or c) present a sample of the goods to be sold so that the whole of the goods must conform to the sample. No such representations are present here. Plaintiff does not point to any clause in the contract or any other facts which support its assertion that KMRC made an express warranty to any of the parties involved. Therefore, summary judgment is properly granted as to this claim.
As for the implied warranty claims, it is well settled in New York that a claim against a seller for economic loss for breach of implied warranty of merchantability and/or implied warranty of fitness can be maintained only by those parties with whom the seller is in privity. See Jaffee Assoc. v. Bilsco, 58 N.Y.2d 993, 461 N.Y.S.2d 1007, 448 N.E.2d 792 (1983); Lexow & Jenkins v. Hertz Commercial Leasing Corp., 122 A.D.2d 25, 504 N.Y.S.2d 192 (2d Dep't. 1986); Hole v. General Motors Corp. 83 A.D.2d 715, 442 N.Y.S.2d 638 (3rd Dep't. 1981); County of Suffolk v. LILCO 728 F.2d 52, 63 (2d Cir. 1984); County of Westchester v. General Motors, 555 F. Supp. 290 (S.D.N.Y. 1983). If there is no seller-buyer relationship or sales contract between the parties and the plaintiff does not sustain personal injuries, a cause of action based on breach of implied warranty will not lie. Hole, 83 A.D.2d at 716.
Clearly, ADC was not in direct privity with KMRC. ADC argues, however, that Plaza was ADC's agent, and therefore ADC was in privity (through Plaza) with KMRC. In order for an agency relationship to exist, it must be shown that the principal exercised control over the agent, that the agent acted on behalf of the principal, and that the principal consented to the agency. See Smirlock Realty Corp. v. Title Guarantee Co., 70 A.D.2d 455, 421 N.Y.S.2d 232 (2d Dep't. 1979); Facilities Development Corp. v. Oosterbaan, 132 Misc. 2d 923, 505 N.Y.S.2d 976 (1986). Merely because one is a broker does not necessarily mean that there exists an agency relationship sufficient to impute privity as between the seller and the ultimate consumer. See Lexow & Jenkins, 504 N.Y.S.2d at 194. And, I can find no basis in the record from which a jury might infer that Plaza was an agent of ADC for present purposes.
ADC and Plaza had one contract in which ADC was the buyer and Plaza the seller. In a separate transaction, KMRC contracted with Plaza. There are two separate sales instruments, one showing ADC to be the buyer and Plaza the seller; the other showing KMRC to be the seller and Plaza the buyer. Furthermore, the delivery and price terms were different in each transaction. The Telex between ADC and Plaza indicates that the sale was made on thirty-day payment terms at a fee of .6120 per gallon and delivery was "F.O.B. Dredges' Dlvd Via Barge." KMRC's sale to Plaza, however, was made on a "prepay" basis, at a fee of .5225 per gallon was charged and delivery was "F.O.B. Royal Sewaren, New Jersey." Simply put, there is no basis upon which a jury could conclude that Plaza was anything but an independent broker.
Essentially, Plaza purchased the oil on its own terms for its own account. Because no basis for a finding of privity exists, the implied warrant claims must fail.
Plaintiff also mistakenly cites U.C.C. § 2-318 for the proposition that third party beneficiaries need not be in privity with manufacturers to recover losses. U.C.C. § 2-318 is applicable only to losses relating to personal injury which is not the case here. The 1975 amendment to U.C.C. § 2-318 states:
A seller's warranty whether express or implied extends to any natural person if it is reasonable to expect that such a person may use, consume or be affected by the goods and who is injured in person by breach of the warranty.
Plaintiff's reliance on § 2-318 is thus misplaced.
To summarize, because plaintiff seeks economic damages only, its claims in negligence must fail. Also, no express warranties were ever made by KMRC to any party, and so, this claim, too, must be dismissed. Finally, absence of privity precludes recovery under an implied warranty theory as well.
Based on the foregoing, Plaza's motion for summary judgment is granted in all respects. Likewise, KMRC's summary judgment is also granted in its entirety.
Sterling Johnson, Jr.
UNITED STATES DISTRICT JUDGE
Dated: Brooklyn, New York
March 16, 1992