Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

CHASE MANHATTAN BANK, N.A. v. T&N PLC

October 18, 1995

THE CHASE MANHATTAN BANK, N.A., Plaintiff, against T&N plc (formerly known as TURNER & NEWALL PLC and TURNER & NEWALL LIMITED), Defendant and Third-Party Plaintiff, -against- SKIDMORE, OWINGS & MERRILL and TURNER CONSTRUCTION COMPANY (INC.), Third-Party Defendants.


The opinion of the court was delivered by: KOELTL

 JOHN G. KOELTL, District Judge:

 The Chase Manhattan Bank, N.A. ("Chase") brought this action seeking to recover the costs of abatement and removal of Sprayed Limpet Asbestos ("SLA") fireproofing manufactured by the defendant T&N plc ("T&N") and installed at One Chase Manhattan Plaza ("One CMP"), a building owned by Chase. Chase asserts causes of action for breach of express and implied warranty, negligence, strict liability, fraud, restitution, indemnity, and nuisance, and claims compensatory damages in excess of $ 100 million, punitive damages of $ 100 million, costs and attorney's fees, and such other relief as the Court may deem proper. Chase commenced this action in June 1987 during the one-year period provided for commencement of otherwise time-barred claims pursuant to the Toxic Tort Revival Act, 1986 N.Y. Laws, ch. 682, § 4 (the "Revival Act"). T&N now moves for summary judgment on each and every cause of action on various grounds.

 For the reasons that follow, T&N's motion is granted in part and denied in part.

 I.

 Summary judgment may not be granted unless "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(c); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986); Gallo v. Prudential Residential Servs. Ltd. Partnership, 22 F.3d 1219, 1223 (2d Cir. 1994). "The trial court's task at the summary judgment motion stage of the litigation is carefully limited to discerning whether there are any genuine issues of material fact to be tried, not to deciding them. Its duty, in short, is confined at this point to issue-finding; it does not extend to issue resolution." Gallo, 22 F.3d at 1224.

 The moving party bears the initial burden of "informing the district court of the basis for its motion" and identifying the matter that "it believes demonstrate[s] the absence of a genuine issue of material fact." Celotex, 477 U.S. at 323. The substantive law governing the case will identify those facts which are material and "only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment." Anderson, 477 U.S. at 248. In determining whether summary judgment is appropriate, a court must resolve all ambiguities, and draw all reasonable inferences against the moving party. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 89 L. Ed. 2d 538, 106 S. Ct. 1348 (1986) (citing United States v. Diebold, Inc., 369 U.S. 654, 655, 8 L. Ed. 2d 176, 82 S. Ct. 993 (1962)); see also Gallo, 22 F.3d at 1223.

 If the moving party meets its burden, the burden shifts to the nonmoving party to come forward with "specific facts showing that there is a genuine issue for trial." Fed. R. Civ. P. 56(e). With respect to the issues on which summary judgment is sought, if there is any evidence in the record from any source from which a reasonable inference could be drawn in favor of the nonmoving party, summary judgment is improper. See Chambers v. TRM Copy Centers Corp., 43 F.3d 29, 37 (2d Cir. 1994).

 II.

 T&N moves for summary judgment on Chase's causes of action for breach of express and implied warranty. T&N argues that the breach of warranty claims are time-barred because they accrued on the date of delivery of the Sprayed Limpet Asbestos fireproofing and are not revived by the Toxic Tort Revival Act.

 Under New York law, U.C.C. § 2-725 governs causes of actions for breach of warranty for the sale of goods. Heller v. U.S. Suzuki Motor Corp., 64 N.Y.2d 407, 410, 488 N.Y.S.2d 132, 133, 477 N.E.2d 434 (1985). Section 2-725 provides:

 
(1) An action for breach of any contract for sale must be commenced within four years after the cause of action has accrued. . . .
 
(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.Y.U.C.C. § 2-725. Where there is no allegation that any warranty of future performance has been made, accrual based on discovery of the breach is inapplicable, see Nassau Roofing & Sheet Metal Co., Inc. v. Celotex Corp., 74 A.D.2d 679, 681, 424 N.Y.S.2d 786, 788 (3d Dep't 1980); see also Long Island Lighting Co. v. IMO Indus. Inc., 6 F.3d 876, 888 (2d Cir. 1993) ("Section 2-725(2) provides that unless a warranty explicitly extends to future performance of the goods and discovery of the breach must await the time of such performance, a breach of the warranty occurs when tender of delivery of the goods is made."); Rosen v. Spanierman, 894 F.2d 28, 31-32 (2d Cir. 1990), and a cause of action for breach of warranty must be commenced within four years of delivery of the goods. Heller, 64 N.Y.2d at 410, 488 N.Y.S.2d at 133; Tavares v. Hobart Waste Compactor, Inc., 151 A.D.2d 251, 252, 542 N.Y.S.2d 170, 171 (1st Dep't 1989) ("A cause of action against a manufacturer or distributor accrues on the date that the party charged tenders delivery of the product.").

 New York applies § 2-725 to cases involving claims of breach of warranty against manufacturers of asbestos-containing products. In 888 7 th Ave. Assoc. Ltd. Partnership v. AAER Sprayed Insulators, Inc., 199 A.D.2d 50, 51, 605 N.Y.S.2d 25, 25 (1st Dep't 1993), the Appellate Division affirmed the dismissal of warranty causes of action under § 2-725 where delivery was made no later than 1970 and the suit was commenced in 1990. See id.; 888 7th Ave. Assoc. Ltd. Partnership v. AAER Sprayed Insulators, Inc., N.Y. L.J., Mar. 10, 1992, at 24 (Sup. Ct. N.Y. Co. Mar. 7, 1992). See also Farm Credit Bank of Louisville v. U.S. Mineral Prods. Co., 864 F. Supp. 643, 647 (W.D. Ky. 1994) (dismissing asbestos fireproofing property damage claims for breach of warranty, citing cases in accord).

 In Port Authority of New York and New Jersey v. Allied Corp., 91 Civ. 0310 (S.D.N.Y. Mar. 29, 1995), Judge Brieant applied New York law and dismissed breach of warranty claims for asbestos abatement and removal costs as time-barred under § 2-725. In Port Authority it was undisputed that there were no deliveries of any asbestos-containing products after June 1983, and because the action was commenced in June 1987, all of the breach of warranty claims had accrued over four years before and were therefore time-barred. See id.

 In the present case, Chase alleges that the SLA was installed in One CMP beginning in or about 1959. (See Am. Compl. P 27.) Chase disputes that all delivery of SLA was completed in 1959, asserting that delivery "continued into the 1960's." (Pl.'s 3(g) Stmt. PP 13, 22.) Even assuming that the term "1960's" includes the entire decade, the breach of warranty claims would have accrued no later than December 31, 1969. *fn1" Because the four-year statute of limitations would have run by 1975, the breach of warranty claims are time-barred.

 Chase argues that the Toxic Tort Revival Act applies to the breach of warranty claims and revives them in spite of the running of the limitations period. The Toxic Tort Revival Act revives "every action for personal injury, injury to property or death caused by the latent effects of exposure to . . . asbestos . . . within property which is barred as of [July 1, 1986] . . . ." 1986 N.Y. Laws, ch. 682, § 4. Such actions were revived for one year and it is undisputed that, if these claims were revived by the Toxic Tort Revival Act, they were timely filed in this action which was commenced in June 1987. There is no express provision in the Revival Act, however, that includes claims for breach of warranty or breach of contract. Because the warranty claims are neither personal injury claims nor claims for death, for Chase to prevail, a breach of warranty claim must be included within the term "injury to property."

 There are no reported decisions by a New York State court indicating whether the Toxic Tort Revival Act revives breach of warranty claims. The issue was not reached by Judge Sklar in 888 7th Ave. because the suit there was commenced in 1990 and was not a Revival Act suit.

 A federal court sitting in diversity must look to the decisional law of the forum state and the state constitution and statutes. Erie R.R. Co. v. Tompkins, 304 U.S. 64, 78, 82 L. Ed. 1188, 58 S. Ct. 817 (1938); Travelers Ins. Co. v. 633 Third Assoc., 14 F.3d 114, 119 (2d Cir. 1994). Where the substantive law of the forum is ambiguous or uncertain, the federal court must strive to predict how the highest court of the forum state would resolve the issue. Travelers, 14 F.3d at 119; In re Eastern and Southern Districts Asbestos Litig., 772 F. Supp. 1380, 1388-91 (E. & S.D.N.Y. 1991) (Weinstein, J.), rev'd on other grounds sub nom. In re Brooklyn Navy Yard Asbestos Litig., 971 F.2d 831 (2d Cir. 1992). Decisions of the Appellate Division "are entitled to persuasive, if not decisive consideration." Sphere Drake Ins. Co. v. P.B.L. Entertainment, Inc., 30 F.3d 21, 23 (2d Cir. 1994), vacated on other grounds, 52 F.3d 22 (2d Cir. 1995) (citation omitted). As Judge Weinstein explained:

 
[A] federal district court will consider, just as a well-advised state court would, the statutory language, pertinent legislative history, the statutory scheme set in historical context, how the statute can be woven into the state law with the least distortion of the total fabric, state decisional law, federal cases which construe the state statute, scholarly works and any other reliable data tending to indicate how the New York Court of Appeals would resolve the questions presented.

 In re Eastern and Southern District Asbestos Litig., 772 F. Supp. at 1391.

 Judge Brieant in the Port Authority case concluded that the Toxic Tort Revival Act did not revive breach of warranty claims in an asbestos removal action:

 
Plaintiff's reliance on the Toxic Tort Revival Act is also misplaced. That statute revived for one year from July 30, 1986 actions for personal injury, injury to property, or wrongful death occurring as the result of exposure to certain toxic substances, including asbestos. As previously noted, plaintiff's action was commenced in June 1987. Damage actions for breach of warranty are not actions for personal injury, injury to property or wrongful death, within the meaning of the Toxic Tort Revival Act. The term "injury to property" is defined in General Construction Law § 25-b, a prior statute, as "an actionable act, whereby the estate of another is lessened, other than a personal injury, or the breach of a contract. " (Emphasis added). Warranty claims are based on breach of contract, and not tort. Accordingly, the Toxic Tort Revival Statute is not a basis to resurrect plaintiffs' contractual warranty claims.

 Port Authority, No. 91 Civ. 0310, at 5-6. The opinion of another Judge of this Court is persuasive, and an independent review of the terms of the Toxic Tort Revival Act and New York decisional law with respect to the phrase "injury to property" leads this Court to agree with Judge Brieant.

 The question at the outset is whether a claim for breach of warranty alleging consequential damages to property falls within the term "injury to property" as used in the Revival Act. The term "injury to property" is itself defined under New York law as "an actionable act, whereby the estate of another is lessened, other than a personal injury, or the breach of a contract." N.Y. Gen. Constr. L. § 25-b ("GCL § 25-b") (emphasis added). Therefore, if a breach of warranty claim for property damages is to be included within the meaning of the phrase "injury to property" and thereby be eligible for revival under the Revival Act, such a claim must not be an action for either personal injury or breach of a contract. Because the warranty claim asserted by Chase is not an action for personal injuries, the crucial question is whether it is a breach of contract action within the meaning of § 25-b. New York courts have interpreted claims for breach of warranty as breach of contract actions within the meaning of GCL § 25-b. Therefore, New York courts would find that a breach of warranty action is not an action for injury to property and would not be revived by the Toxic Tort Revival Act.

 In Blessington v. McCrory Stores Corp., 305 N.Y. 140, 111 N.E.2d 421 (1953), the New York Court of Appeals held that an action for breach of warranty was a contract action, and therefore governed by the statute of limitations for contract actions. The court explained that:

 
While an action for breach of a statutorily implied warranty of fitness may involve, incidentally, some showing of negligence, the contract breached is not merely one to use due care, but is a separate (implied) contract of guaranty that the goods are fit for the purpose for which they are bought and sold.

 Indeed, the decision in Buyers included a detailed analysis of the legislative history of GCL § 25-b, concluding that, while "injury to property" did not include pure contract actions, breach of warranty claims where consequential damages were claimed were not pure contract actions. Buyers, 199 Misc. at 770-76, 99 N.Y.S.2d at 720-25. This is precisely the argument Chase proposes now. But the Court of Appeals in Blessington disapproved Buyers. That rejection is buttressed by the decision in Western Elec. Co. v. Brenner, 41 N.Y.2d 291, 392 N.Y.S.2d 409, 360 ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.