to its federal court consent decree with the EPA.
This court finds and concludes that no reasonable juror could find that MEG, which cleaned up material from Number 6 fuel oil and waste water areas, and which had no independent duty to categorically second guess the originator's assessment of the materials, breached a duty of reasonable care under the circumstances.
Aside from the implausible argument that a jury might impose a duty which the government in a heavily-regulated industry did not and vague assertions about possible questioning of Con Edison workers about the 'real' composition of materials presented to MEG as waste water and Number 6 fuel oil, BCF has presented no facts suggesting that MEG could have breached a duty of reasonable care.
4. Proximate Cause.
MEG argues that even if a duty to BCF is found, there can be no liability for MEG because, as a matter of law, BCF's own failure to adequately test the shipment was a superseding cause, thus eliminating the need for a foreseeability inquiry. See Miller Env. Group, Inc.'s Mot. for Summ. J., 15. However, the court does not reach this question because it holds, as a matter of law, that no reasonable jury could find that MEG breached its duty of reasonable care under the circumstances.
BCF's complaint alleges that MEG breached express and implied warranties. BCF argues that express warranties were created in two ways: first, BCF, itself, caused an unloading ticket to be prepared in connection with deliveries by MEG which was signed by MEG's agent. The statement signed by MEG's agent read, inter alia, "I certify that the contents of the product represented by this document does not knowingly contain PCB's." (Emphasis added.) Second, MEG also provided its own 'manifest' which stated that, "I hereby certify that the above waste description is complete and accurate, and that no component exist [sic] in the wastes which render it hazardous."
BCF has also urged the judicial imposition of an implied warranty of fitness due to MEG's knowledge of the purpose for which BCF was to use the waste oil products. BCF argues that it relied on both warranties to accept the goods.
MEG rejoins that not only was the transaction between BCF and MEG one of service provision (and, therefore, not subject to warranty analysis) but, also, that BCF could not have relied on the warranty precisely because BCF personnel drew a sample of the liquid from the April 6 shipment, examined its composition (although BCF did not, contrary to its usual practice, test the sample for PCBs), and accepted the shipment before BCF's unloading ticket was prepared.
As an initial matter, the court notes that under New York law "all transactions where service predominates" are indeed immune from express and implied warranty analysis. Stafford v. Int'l Harvester Co., 668 F.2d 142, 146 (2d Cir. 1981); see also Milau Assoc., Inc. v. North Ave. Dev. Corp., 42 N.Y.2d 482, 486, 398 N.Y.S.2d 882, 368 N.E.2d 1247 (Ct. App. 1977) ("The express warranty section [of the U.C.C.] would therefore be no more applicable to a service contract than the code's implied warranty provisions."). In the present matter, MEG performed the service of delivering waste oil and waste water from various sites to BCF. BCF would either charge or credit Con Edison's account, depending on whether the shipment was wastewater (which BCF had to dispose of) or waste oil (which BCF could reprocess for a profit). MEG was a deliverer, not a seller, of waste oil and waste water. The court holds, however, that even if the transactions between MEG and BCF could be characterized as sales of goods, BCF's express and implied warranty claims must fail for want of reliance on MEG's affirmations.
1. Express Warranty.
An express warranty is an "affirmation of fact or promise made by the seller to the buyer which relates to the goods and becomes part of the basis of the bargain." N.Y.U.C.C. Law § 2-313 (McKinney 1997). Since BCF's unloading ticket and MEG's manifest attests to the nonhazardous nature of the goods delivered, the issue raised is not whether there was an affirmation, but rather whether MEG intended the statements to induce the acceptance of the goods and whether BCF could have relied on them. See CBS, Inc. v. Ziff-Davis Publ'g, 75 N.Y.2d 496, 554 N.Y.S.2d 449, 451, 553 N.E.2d 997 (Ct. App. 1990) (discussing the "reliance requirement in actions for breach of express warranties" and finding reliance when the term forms part of the basis of the bargain). According to BCF:
MEG seeks to make much of the claimed fact that the BCF unloading ticket was not prepared and executed until after Dr. Khurana had apparently analyzed the sample and accepted the April 6 Load . . . . This argument, however, misperceives the value of the certification to BCF. BCF did not require the signature on the Unloading ticket as some sort of demonstration of the actual non-hazardousness of the load . . . The certification was  an additional assurance of the acceptability of the product, bottomed on the notion that transporters have an independent obligation to make sure that their shipments do in fact come within the regulatory parameters imposed on them by the DEC pursuant to their own Part 364 permits. P. BCF's Mem. in Opp. to Def. MEG's Mot. for Summ. J., 19.
The above argument demonstrates the weakness of BCF's warranty arguments. BCF notes that it did not rely on MEG to demonstrate the actual composition of the load. Indeed, such reliance would be misplaced given that it is Con Edison and BCF, and not the transporter company MEG, which have duties to test the composition of shipments. And, insofar as BCF relies on whatever information can be gleaned from MEG's compliance with its own statutory duties, this reliance is not meaningful because MEG's part 364 permit did not require it to test the materials. Finally, BCF's chemist had a "regular practice" of testing materials which came into BCF's facility in order to ensure compliance with statutes and regulations prohibiting BCF from accepting hazardous material.
It is undisputed, however, that BCF's chemist failed to administer the test on the April 6 load from MEG, although BCF personnel did draw a sample of the delivered material and examine it to see if it was waste oil or waste water. BCF's own decision not to test the material does not serve to create a reliance on a transporter company with no obligation of its own to test the material. Thus, BCF's express warranty claim fails on the question of reliance because neither the manifest of MEG (which carried no underlying obligation to test) nor the BCF unloading ticket (which was signed after BCF accepted the shipment and which merely certified that shipments did not "knowingly" contain PCBs) could as a matter of law have formed the basis of BCF's decision to accept the April 6, 1994 delivery.
2. Implied Warranty of Fitness for a particular Use.
Implied warranty of fitness will not be judicially imposed unless the buyer establishes that the "seller knows or has reason to know the particular purpose for which a buyer requires goods, and also knows or should know that the buyer is relying on his special knowledge." Abraham v. Volkswagen of America, Inc., 795 F.2d 238, 249 (2d Cir. 1986). The reasons that support the need for reliance in the express warranty claim apply with even greater force to the implied warranty claim. In this transaction, it was BCF and not MEG which had the special knowledge of the nature of the liquid waste because it was BCF and not MEG which had the duty to ascertain the nature of the liquid waste. No reasonable juror could find that MEG knew or should have known that BCF was relying on MEG for information about the chemical composition of the liquid waste. As to its claim for breach of implied warranty, BCF could not have relied, as a matter of law, and it certainly could not have justifiably relied as a matter of law, on MEG's affirmations.
For the reasons set forth above, defendant Miller Environmental Group, Inc.'s (MEG's) motion for summary judgment is GRANTED.
Dated: November 10, 1997
New York, New York
Constance Baker Motley
United States District Judge