In the instant action it is undisputed that the construction of the barn was completed at least ten years before this action was commenced. The barn was completed sometime in 1983. The barn collapsed on March 3, 1994 and this action was commenced shortly thereafter. According to defendants, Hunter's Run's action is therefore barred by the six-year statute of limitations.
Hunter's Run does not dispute that, in New York, contract actions are subject to a six-year statute of limitations. However, it is the contention of Hunter's Run that the warranty clause added to the construction contract created an obligation or promise separate from the other provisions of the contract. Hunter's Run argues that breach of the warranty did not occur until the barn collapsed in 1994. Hunter's Run contends that, since this action was brought within six years of the barn's collapse, it is timely.
Resolution of this issue depends on how the warranty is characterized. If the warranty is considered to be one of "present characteristics" or is considered to be too vague to enforce, then the limitations period would run from the completion of the barn. In such a scenario, Hunter's Run's action would be time-barred. If the warranty is considered as extending to future performance, however, then Hunter's Run's analysis would prevail and, depending on the duration of the warranty, the action would not be time-barred. Thus, the validity and effect of the warranty is crucial to a determination as to whether the instant action is time-barred.
[D] Analysis of the Warranty
Hunter's Run contends that the parties intended the warranty to be prospective in nature, rather than a warranty of a "present condition." In support of its contention, Hunter's Run points to several factors, including: the language of the warranty itself that the barn "will" support and "will" withstand snow load and wind; the negotiations surrounding the term "forever" that plaintiff initially included in the warranty; and the fact that the warranty was a separate and additional provision from the standard requirement that Triple H build the barn in a good and workmanlike fashion.
Defendants, on the other hand, contend that an express warranty that does not explicitly warrant future performance is merely a warranty of present condition and performance.
I would agree with the defendants that, under the U.C.C., the guarantee is not sufficiently explicit to constitute one for future performance. The U.C.C. section concerning warranties for future performance is more strict than common law contract principles. Under the U.C.C. if the contractual provision is ambiguous, it will not be read as providing for future warranties. Courts do not go behind the agreement to ascertain the intent of the parties, as they might in a common law contract claim. See Citizens Utilities Company v. American Locomotive Co., 11 N.Y.2d 409, 230 N.Y.S.2d 194, 184 N.E.2d 171 (1962) (pre-U.C.C. case: provision that an electric generator "would be and would continue to be capable of continuous operation...for a full normal machine life of at least 30 years" was held to be merely a warranty of present condition); Holdridge v. Heyer-Schulte Corp. of Santa Barbara, 440 F. Supp. 1088 (N.D.N.Y. 1977) (express warranty that product "was safe and fit for its intended use" held not to extend to future performance); The Binkley Company v. Teledyne Mid-America Corp., 333 F. Supp. 1183 (E.D. Mo., 1971) (provision that machine must "be capable of welding at 1000' per fifty minute hour, or a gross rate of 1200' per hour" held not to constitute an explicit warranty of future performance). But see Mittasch v. Seal Lock Burial Vault, Inc., 42 A.D.2d 573, 344 N.Y.S.2d 101 (2d Dept. 1973) (express warranty that a casket and burial vault "will give satisfactory service at all times" held to explicitly extend to future performance).
However, as stated above, the U.C.C. is inapplicable to construction contracts. As such, the U.C.C. cases cited above are inapposite. Although Triple H concedes that the U.C.C. does not apply to the instant action, it argues that the U.C.C. cases dealing with warranties are instructive and should be applied to the present situation by analogy. I fail to see the basis for this contention. Triple H cites, and I have found, no case concerning a construction or service type contract in which a court applied U.C.C. warranty law.
As such, I must be guided by common law principles of contract interpretation in determining the meaning of the warranty given by Triple H and Rigidply to Hunter's Run.
[E] Common Law Principles in Contract Interpretation
Whether or not a contract term is ambiguous is a threshold issue for the court. See Walk-In Medical Centers, Inc., 818 F.2d at 263. The Second Circuit has described an ambiguous term as
one capable of more than one meaning when viewed objectively by a reasonably intelligent person who has examined the context of the entire integrated agreement and who is cognizant of the customs, practices, usages and terminology as generally understood in the particular trade or business.
Curry Road, Ltd. v. K Mart Corporation, 893 F.2d 509, 511 (2d Cir. 1990) (quoting Eskimo Pie Corp. v. Whitelawn Dairies, 284 F. Supp. 987, 994 (S.D.N.Y. 1968)). From this language it is apparent that the warranty clause at issue in the present action is ambiguous.
In the present case, Hunter's Run alleges that the warranty was intended to cover the normal life of the structure. Defendants argue that they intended no more than a warranty of present characteristics. In support of its contention, Hunter's Run points to correspondence between its attorney and a representative of Triple H indicating the importance of the warranty to the execution of the contract. Hunter's Run also places great emphasis on the negotiations surrounding the term "forever" that was first included in the warranty. Hunter's Run has submitted an affidavit from its attorney recalling a conversation with a representative from Triple H wherein the representative objected to the term "forever" as too long a time. The attorney, in his affidavit, claims that, during this conversation, it was the parties' intention that the warranty would cover the normal life of the barn.
Defendants, on the other hand, contend that the intent was never to extend their potential liability beyond the six-year statute of limitations. Further, defendants contend that, even if there is some ambiguity in the language of the warranty, the ambiguity should be construed against Hunter's Run as the drafter of the warranty. I disagree. Although Hunter's Run initially drafted the warranty, defendants had some say in the final draft as demonstrated by the deletion of the term "forever." Furthermore, "rules of construction such as the principle that in certain circumstances a contract may be construed adversely to the party that drafted it ... are principles of last resort, to be invoked when efforts to fathom the parties' intent have proved fruitless." Record Club of America, 890 F.2d 1264, 1271.
In the present case, the meaning of the warranty is ambiguous. It is precisely the intent of the parties that is disputed here. Hunter's Run claims that the parties intended the warranty to cover the normal life of a barn. Defendants claim that the parties intended the warranty to be no more than a promise that the barn would withstand snowload and wind at the time of its completion, i.e. a warranty of present condition and characteristics. As stated above, "where intent is in dispute, summary judgment is improper." Jafari v. Wally Findlay Galleries, 741 F. Supp. 64, 67 (S.D.N.Y. 1990), citing Thompson v. Gjivoje, 896 F.2d 716, 721 (2d Cir 1990). "Under traditional principles of contract law, questions as to what the parties said, what they intended, and how a statement by one party was understood by the other are questions of fact..." Ronan Associates v. Local 94-94 A-94B, 24 F.3d 447 (2d Cir. 1994).
Thus, it is for the trier of fact to decide what Hunter's Run and the defendants intended when agreeing to the warranty clause in the present case.
Furthermore, although the warranty clause is indefinite as to its duration, I cannot say at this point that the warranty is so indefinite so as to be unenforceable. In New York, "rejection of a contract for indefiniteness 'is at best a last resort' [and a] promise that can be made certain by reference to outside matters is not too indefinite." Young v. Zwack, Inc., 98 A.D.2d 913, 471 N.Y.S.2d 175, quoting Cohen & Sons v. Lurie Woolen Co., 232 N.Y. 112, 114, 133 N.E. 370.
Defendants' motions for summary judgment (Items 10 and 14) are denied. Plaintiff's cross motion to strike defendants' statute of limitations defense [Item 12] is denied.
IT IS SO ORDERED.
DAVID G. LARIMER
UNITED STATES DISTRICT COURT
Dated: Rochester, New York
September 12, 1996.
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