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CYBERCHRON CORP. v. CALLDATA SYS. DEV.

August 30, 1993

CYBERCHRON CORPORATION, Plaintiff,
v.
CALLDATA SYSTEMS DEVELOPMENT, INC., Defendant.



The opinion of the court was delivered by: ARTHUR D. SPATT

 SPATT, District Judge.

 In this case involving the manufacture of "ruggedized" computer equipment, two crucial issues are presented. First, was there a valid contract entered into between the parties, and, if so, was there a breach by one or both of the parties, and, if so, what damages were incurred? Second, if no valid agreement was consummated, is the plaintiff entitled to recover under either the doctrine of quantum meruit or promissory estoppel?

 BACKGROUND

 The plaintiff Cyberchron Corporation ("Cyberchron" or the "plaintiff"), a New York corporation, is engaged in the business of providing customized computer hardware for military and civilian use. The defendant Calldata Systems Development Inc. ("Calldata") is a Florida corporation and a subsidiary of Grumman Data Systems Corp. ("Grumman"). In this decision, except where otherwise indicated, the Court shall refer to the defendant Calldata as "Calldata," "Grumman," or "the defendant". Grumman had a contract with the United States Marine Corps to build a combat command control system, which included providing containers for high-tech computers. The equipment at issue is a "rugged computer work station" designed to operate under rough military and combat conditions in a command center. This equipment consisted of three units, a video processor a work station and a color monitor. (See Plaintiff's Exh. 42 - photographs of the equipment). This "ruggedized" computer equipment was to be used by Grumman in a Marine Corps defense program known as the Advanced Tactical Air Command Central ("ATACC"). The ATACC was designed to be a "lightweight compact easily deployed advanced version of the U.S. Marine Corps Tactical Air Command" (Plaintiff's Exh. 1, p.103431).

 During the years 1989 and 1990, the parties were involved in extended negotiations as a result of which Cyberchron attempted to produce this "ruggedized" computer equipment. It is undisputed that although some equipment was produced by the plaintiff, no such equipment was actually delivered to Calldata or Grumman, nor was any payment made to the plaintiff. As a result, this lawsuit evolved.

 THE PLEADINGS

 The first amended complaint sets forth three counts or causes of action requesting monetary damages, based on the following grounds: (1) breach of contract, (2) quantum meruit and (3) promissory estoppel.

 In addition to denials and nine affirmative defenses, the answer of the defendants interposes a counterclaim for breach of contract, for which Grumman seeks money damages.

 THE TRIAL AND FINDINGS OF FACT

 This opinion and order includes the Court's findings of fact and conclusions of law as required by Fed. R. Civ. P. 52(a) (see also Colonial Exchange Ltd. partnership v. Continental Casualty, 923 F.2d 257 [2d Cir. 1991]).

 During this discussion, the Court will make findings of fact which will be supplemented by additional findings later in the opinion.

 As a result of a contract between Grumman and the United States Marine Corps involving ATACC, Grumman sought to obtain "ruggedized" or "toughened up" computer equipment. This computer equipment was to be modified to enable it to withstand rough battlefield conditions. Cyberchron was a firm in the business of "ruggedizing" computer equipment. At the center of the controversy between the parties was the continuing dispute over the weight of the three pieces of computer equipment which formed the "rugged computer work station," namely: (1) a video processor, (2) a work station, and (3) a color monitor.

 The long and tortuous paper trail in this case starts on November 7, 1989 with the issuance by Grumman of an "Invitation to Quote -- Not an Order" ("ITQ") (Plaintiff's Exh. 1) to Cyberchron and four other companies. The ITQ requested "a firm-fixed-price proposal for 55 units of the ruggedized hardware components." The Court notes that of the twelve Performance ...


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