Opinion
NNHCV116021964S.
11-16-2012
BREAKFAST WOODWORKS, INC. v. NATIONAL CABINET & MILLWORK INSTALLATION, LLC.
UNPUBLISHED OPINION
THOMAS J. CORRADINO, Judge Trial Referee.
This is a case involving a suit by the plaintiff company, Breakfast Woodworks, Inc. (Breakfast), against National Cabinet and Millwork Installation (National). The complaint involved two separate jobs Breakfast claimed it did for National. Invoice # 1595 identified the project as the fabrication of " 509-208 DR White Oak Trim." Plaintiff's Exhibit 3 is identified as an " invoice" in fact a " final invoice." It was sent to Mr. Botass which the pretrial " Trial Conference Management Report" lists as the " president of National." It lists the scope of the job, what was included and not included. The invoice has a designation " terms" which is identified " as per contract." At the bottom of the invoice the amounts claimed to be owing are listed. Opposite " Contract Amount— Includes Labor and Material" the Figure of $3,177.81 is typed and opposite " Delivery to NCMI (i.e. National): on 2/07/11: Reference Packing List # 1465" the Figure $320 is typed for a subtotal of $3,497.81. It states there is no sales tax and there were no payments or credits on the count. In bold print the following appears: BALANCE DUE $3,497.81. The due date on the invoice is listed as 3/10/11 and the invoice is described as a bill to NCMI (National), Ray Botass.
The second claim, which was the main focus of the trial concerns Invoice # 1625. The plaintiff's post-trial brief states it " claims invoice No. 1625 (See Trial Exhibit P. 10) in the amount of $8,755.18 which is in dispute. Specifically, defendant claims plaintiff did not comply with specifications in the applicable plans, that the fabrication was not timely and there were invalid change orders. The disputed invoice relates to the fabrication of a custom desk and credenza which was completed pursuant to a written contract dated March 15, 2011 ... See Trial Exhibit P. 5."
1
The court will first discuss the plaintiff's claim under Invoice # 1595 for the amount of $3,497.81. In its July 16, 2012 post-trial brief the defendant argues that " the plaintiff failed to prove the existence of a contract or even a purchase order. No written contract was entered into evidence. Hence plaintiff failed to prove the existence of a contract, let alone present to this court specific contract terms ... Likewise, there was no admissible testimony submitted by any witnesses of the existence of the contract or its terms. The only evidence elicited concerning this court was referenced in Exhibit I wherein Derek Osborne writes ‘ we agree a balance is owed for job 509 in the amount of $3,497.81.’ This statement does not indicate if the balance is owed by National Cabinet to Breakfast Woodworkers or by Breakfast Woodworkers to National Cabinet. Further, this statement does not indicate that this balance is due or when it will become due. Without the actual terms of the written contract before this court, there is insufficient evidence upon which this court can make a finding concerning (this claim)."
Mr. Osborne testified at trial. At the time of the events in question he worked for National, although he is no longer employed there. He described the fabrication of the desk and credenza by the plaintiff for National which National in turn was to install in Calvin Klein's New York headquarters as " my account." The project manager of the project reported to Mr. Osborne. The Trial Management Conference Report, signed by both counsel says Mr. Osborne was the " Salesman/Project Supervisor."
The defendant has been consistent in its argument about the legal effect of the failure to introduce a contract into evidence; the defendant, for example, objected to the introduction of Invoice 1595 into evidence at trial because no contract had been introduced into evidence. Its position has been also well-articulated in the post-trial brief.
This claim, at least for the court, does present some complicated questions.
There are basically three types of contracts, an express contract, an implied contract which are true contracts and a so-called implied in law contract which is created by the courts to avoid unjust enrichment. In 17 Am.Jur.2d, " Contracts" at Section 12, page 48 it states: " A contract is express if its terms are stated by the parties either orally or in writing, and it is implied if its terms are not so stated. In other words, an implied contract is one in which some or all of the terms are inferred from the conduct of the parties and the circumstances of the case, though not expressed in words, " cf. Vertex, Inc. v. Waterbury, 278 Conn. 557, 571 (2006), Auto Glass Express v. Hanover Ins. Co., 293 Conn. 218, 233 (fn.7). In Janusauskas v. Fichman, 264 Conn. 796, 804 (2003), the court quoted from an earlier case and said " ‘ Whether (a) contract is styled express or implied involves no difference in legal effect, but lies merely in the mode of manifesting assent ...’ A true implied (in fact) contract can only exist (however) where there is no express one"; this reflects the general law, see 17 Am.Jur.2d " Contracts, " at Section 17, pp. 52-53; as said in Section 17 which cited Janusauskas ... " if there is an express contract, no recovery can be had on the theory of implied contract ... However, implication may be necessary and proper to determine the full and exact meaning of an express or oral contract, " id., at pp. 52-53. Janusauskas quotes an earlier case, Rahmati v. Mehri, 188 Conn. 583 (1982), where the court said: " it is not fatal to a finding of an implied contract that there were no express manifestations of mutual assent if the parties by their conduct, recognized the existence of contractual obligations, " 188 Conn. at page 587.
Arguably the complaint, which was never subjected to a request to revise, uses general language applying to the claims made under both invoices referred to previously. It says the plaintiff and defendant entered into an agreement whereby the plaintiff " agreed to sell and deliver goods and merchandise" to the defendant National— the first aspect of the " agreement claim" purportedly was the delivery of white oak trim, there is arguably a separate " agreement, " also covered by the general agreement language in the contract, for the fabrication of a custom desk and credenza. Paragraph 4 makes a monetary claim that as the evidence indicated purports to cover both of these separate jobs. That paragraph also makes a claim for interest and all costs of collection, including reasonable attorney fees pursuant to the aforementioned agreement." Clearly an express oral or written agreement is being sued upon.
The answer is somewhat confusing on the issue before the court. The complaint by the amount claimed seems to refer to monies owed under two job orders based, as indicated, on an alleged agreement between the parties. Paragraph 1 of the answer admits the corresponding paragraph of the complaint which states both parties entered " into an agreement" (note the singular, not suggestive of two separate and unrelated job orders). Paragraph 2 of the answer seems to support this view as do the special defenses because they assert the received goods " were not built in compliance with shop drawings that were part of the Agreement " (emphasis by court.) There was no such claim as to the white oak trim job. But interestingly in the defendant's post-trial brief, the defendant characterized the one-count complaint as lying in two counts. Count two being a claim for the alleged unpaid balance on the white oak trim (Invoice # 1595) and count two the claim for the unpaid balance on the desk and credenza (Invoice # 1625).
At trial the defendant did object to the viability of this claim for the white oak trim (Invoice # 1595) and argued there was no basis for it on the evidence presented or perhaps better put based on the fact that certain evidence was not presented— the contract for the work— which would have to be the predicate for the court to consider the plaintiff's demand under the invoice for the balance owing for the white oak trim job.
The testimony is somewhat confusing as to whether any agreement between the parties at the white oak trimming evidenced by Invoice 1595 was oral or written. At page 9 of the transcript plaintiff's counsel argued he could make a claim based on an invoice " whether or not I submit a written contract or an oral contract." But then he argued " My witness the plaintiff's president (Mr. Mackall) is certainly allowed for me to put invoices in front of him and say we delivered these materials whether or not I produce a written contract or not."
Assuming a written contract was the basis of the claim the defendant objected on the basis of the best evidence rule. Our evidence code provides in Section 10-1 that " To prove the content of a writing ... the original writing ... must be admitted in evidence except as otherwise provided by the code." Tait's Handbook of Connecticut Evidence, Tait and Prescott states in § 10 .1.2 that the purpose of the rule is to secure the most accurate rendition of the terms and wording of a document Town of Brookfield v. Candlewood Shores Estates, Inc., 201 Conn. at 10-11 and to guard against ‘ Fraud and imposition, ’ Witter v. Latham at page 399" (Page 640). But at page 649 Tait notes " Admissions of an opponent are considered primary evidence and do not run afoul of the Best Evidence Rule even though they relate to the contents of a writing, Morey v. Hoyt, 62 Conn. 542, 556-57, 26A 127, Davis v.. Kingsley, 13 Conn. 285, 293 (1839)." This is a necessary limitation on the ambit of the Best Evidence Rule if " fraud or imposition" of another kind is not to be effected. In Vol. 2 of McCormick On Evidence at § 242 McCormick questions this position saying relying on a witness's perception and memory seems to square poorly with the policy favoring obtaining accurate contents of a writing.
Here McCormick's concern does not appear to be a problem. The invoice referred to was sent to National's president " as per contract" and goes into some detail about the " scope" of the job and states there is a balance owing of $3,497.81— not about this, or about that, maybe a little less but an exact amount." In a letter of July 11, 2011 Osborne referring to Job 509 which is listed on this Invoice 1595 for the white oak trim mentions a collection notice dated 6/21/11 from the plaintiff asking for payment of $12,432.99 and then says " 1. We agree a balance is owed for job 509 in the amount of $3,497.81. The rest of the letter is an attempt to compromise the desk-credenza collection demand.
There was no suggestion at trial that some written contract would indicate that there was a verifiable dispute about the scope of the job and the work to be performed. If in fact the white oak trim was not delivered to National why on earth would Osborne send a letter agreeing to the exact amount set forth in the invoice sent to National's president and why would he put a statement like this in the July 11th letter meant to resolve the plaintiff's demand request by saying $3,497.81 is part of the money demand actually owed to Breakfast Wood? To ask the question provides the answer. To do the defendant a favor?— doubtful since the July 2011 letter wanted to compromise down the desk and credenza claim by several thousand dollars. At trial Osborne admitted that he was familiar with the invoice in question for $3,497.81, he was familiar with the job number and further admitted Breakfast Woodworking is owed that invoice.
The fact that the July 2011 letter is an offer of compromise or settlement does not prevent its consideration. As said in Tait and Prescott at Section 4.25.2, page 185.
" Offers of compromise of a disputed claim are not admissible for a combination of reasons, namely, low probative value and the public policy favoring the settlement of disputes. Stranahan v. Town of East Haddam, 11 Conn. 507, 512-19 (1836); see Tomasso Bros., Inc. v. October Twenty-Four, Inc., 221 Conn. 194, 198, 602 A.2d 1011 (1992). To fall within the exclusion, the claim must be " disputed" as to validity or amount. See C.C.E. Commentary § 4-8(a)."
Section 4-8 of the Code offers an exception to the rule against admission into evidence of offers of compromise. Subsection (b) says " the rule does not require the exclusion of ... (b) statements of fact or admissions of liability made by a party, " see Tomasso Bros., Inv. v. October 24, Inc., 221 Conn. 194, 198 (1992).
There were two separate claims for two separate jobs. The admission as to the white oak trim is contained in one sentence, there is nothing hypothetical about it or any indication that it has any relation to the dispute regarding the credenza which contains over a page of single space commentary offering detailed reasons why the plaintiff's demand is not supportable in full.
Clearly under these circumstances there was an agreement between the parties as to the white oak trim job and this is true whether the express agreement was oral or written— the invoice laid out the specifics of the job, an invoice implies contract completion and delivery, and the invoice itself uses the expression " as per contract."
The court concludes the plaintiff is owed $3,497.81 for this job with no cost of collection such as attorneys fees as such costs were not presented as part of any agreement oral or written.
2
(a)
The plaintiff also claims an amount of $8,755.18 as reflected in Invoice # 1625 pursuant to a contract to build a mahogany veneer desk and credenza. The purchase order for these items is dated March 7, 2011 and referenced a completion date of March 25, 2011. A written contract was entered into on March 15, 2011 which referenced detailed plans and specifications for building these two items. There was an original contract price of $15,135.48 on which National paid a deposit of $6,127.00. The parties dispute whether certain matters should be treated as change orders credit reducing the amount of the plaintiff's claim.
After referencing the change order disputes the defendant argues the plaintiff did breach the contract and judgment should enter in any event in its favor on any claim by the plaintiff for the desk and credenza. The court will now try to discuss this argument.
(b)
The purchase order for the desk and credenza states " when to ship 3/25/11." In fact the items were not ready for pick up until April 5, 2011 and they were picked up by the defendant on that date.
Although the purchase order refers to a March 25th delivery date the actual March 15, 2011 contract makes no reference to the purchase order. It mentions no date for delivery and in fact at paragraph 8 it says " Required delivery date shall be provided to Breakfast Woods, Inc. in writing."
The general rule is that " completion of a contract within a reasonable time is sufficient if no time is stipulated, " 17 Am.Jur.2d, " Contracts" at § 467, page 443. In Lavelle v. Ecoair Corp., 74 Conn.App. 710, 725-26 (2003) the court quoted from other cases to the effect that " ‘ When the terms of a contract's time of performance are indefinite ... the result generally reached is that the time is neither unlimited nor discretionary ... The promised performance must be rendered within a reasonable time." Beyond this even if a time for performance is set forth in the contract " where the agreement does not specifically state that time is of the essence, it is presumed not to be unless the parties have expressed a contrary intent, " see Kalikak v. Berardo, 184 Conn. 386, 392-93, 439 A.2d 1016 (1981), see 17 Am.Jur.2d supra at § 472 pages 447-48, see also Grenier v. Comnratt Construction Co., 189 Conn. 144, 151 (1983).
The defendant would be hard pressed to defend against the breach of contract claim based on the fact that the desk and credenza were not ready for pick up within a reasonable time. It directed Mr. Lairs, an employee, to pick up the items on April 5th which he did. National ordered the desk and credenza for the purpose of selling and installing them for a customer in New York. In an email dated March 31, 2011 from Mr. Osborne to the plaintiff's president, Mr. Mackall, Osborne, referring to its customer said " they really weren't ready this week for the desk but are chaffing at the bit for Monday, so all's well that ends well." March 31, 2011 fell on a Thursday. The defendant's employee was apparently instructed to and did pick up the desk and credenza on April 5, 2011 which was a Tuesday.
Even if the court is mistaken in concluding time was not of the essence in this contractual arrangement any such provision or contractual obligation to that effect was waived. As noted in 17A Am.Jur.2d " Contracts" at § 473, page 448: " A contract provision making time of the essence may be waived, either expressly or impliedly, " see A & K v. Lanini, 656 P.2d 367, 369 (Ct. of App., Oregon, 1982).
The section goes on to state at page 449 that " what is required for a waiver of such a clause is a course of conduct which indicates to the purchaser that the vendor is not relying on the clause, " see Smith v. Christofalas, 392 N.E.2d 756, 758-59 (App.Ct. of Ill., 1979). If this is true where a specific clause in a contract makes time of the essence, it is certainly true where such a requirement is sought to be made a contractual requirement because of a shipping date in a purchase order.
Here the desk was not ready for delivery on March 25, 2011 as per the purchase order. But the defendant, despite that, sent an employee to pick up the desk on April 5, 2011 and proceeded to work on assembling the desk. The ultimate purchaser Calvin Klein was willing to accept the desk, as will be discussed, despite certain fabrication problems, the desk was installed and the desk was ultimately rejected by the owner over two months after April 5th for reasons having nothing to do with delay in having the desk ready on March 25, 2011.
The real issue in this case, at least for the court, is the claim by the defendant that the product " was not fit for the purpose for which it was intended" and therefore the plaintiff " is not entitled to payment for any alleged remaining contract balance."
(b)
The transaction involved here involved the sale to the defendant of goods— a desk and a credenza. Because of that the law applicable to the transaction is to be found in Section 2 of the Uniform Commercial Code, see § 42a-2-102, and Stelco Industries, Inc. v. Cohen, 182 Conn. 561, 563 (1980), Swift & Co. v. Rexton, Inc., 187 Conn. 540, fn. 3 (1987).
The desk and credenza which are the subject of this aspect of the claim was referenced in a contract between the parties. It stated these items were to be fabricated pursuant to an agreed upon set of shop drawings and both items were to have a 3/16 of an inch of mahogany veneer. The shop drawings were introduced as exhibit 6 without objection.
In its post-trial brief the defendant sums up its position on why it does not have contractual liability. Generally it is stated that " the product as delivered was not reasonably fit for the purpose for which it was intended." Two factors are relied upon (1) " the furniture should have been shipped with the proper mortis joints cut for the Clamex Lamellos clips, with the Claimex fasteners (devices used to assemble the desk on site) and (2) the desk " should have had no damage to the front of the desk that was covered by a paper thin strip of veneer."
The court will try to address each one of these matters.
In the discussion the commercial setting of the transaction must be kept in mind. The plaintiff contracted for the fabrication of the desk and credenza not for its own use but for sale to and installation in the headquarters of what was described as a " high end" customer, Calvin Klein, in New York City. The CEO of that company was directly involved in the inspection of and approval of the items as delivered and during the course of their use.
(i)
The first matter the court will discuss is the not fit for use claim as it concerned with failure to prepare the desk for assembly at the customer's offices— mortis joints not cut for the above referenced clips and with the failure to supply fasteners. There was no dispute that the contract pursuant to the shop drawings required the foregoing to assemble the desk.
Before addressing the law the court will discuss the facts it has found.
It is difficult to characterize Mr. Mackall's testimony as supporting the position that the desk was " fabricated in accordance with the approved drawings." Mr. Osborne's testimony regarding this aspect of the dispute is convincing at least to the court. Mr. Mackall does not deny the materials necessary for assembly of the desk were not provided as per the shop drawings or that the mortis joints were not cut. He seemed to say these things were not done because his company was rushed to complete the job. But the defendant did not discover this failure to comply with contractual obligations until April 6, 2011 a day after the desk was picked up when National was trying to assemble the desk. The plaintiff did not tell the defendant prior to or at the time of delivery of these failures to comply with contractual obligations.
Another discussion of the facts developed at trial must be referred to before the court discusses the law it will apply to this case. At one point in the direct examination Mr. Mackall testified any deviations from contract specifications " would not be visible when the product is put together." But on another aspect of contract terms not complied with the following occurred.
Q. Okay. Would you agree that having to use hand tools in the field to install mortis cuts for the fasteners will result in less precision in terms of putting together the desk.
A. Yes.
Q. Okay. It would be best practice for those morts holed to have been put in using a CNC machine; correct?
A. Yes.
A CNC machine, some kind of drilling device was available in his shop not to a company like National trying to assemble the desk in the field.
Mr. Osborne was definite on the plaintiff's failure to do the necessary work and provide the needed items per contract to assemble the desk. He was asked if the failure to provide certain joints to assemble the desk affected the desk's appearance.
He said there were minor gaps here and there " that had to be filled and touched up. He said this caught the attention of the CEO's eye (CEO of purchaser Calvin Klein) and also the contractor and they were hemming and hawing about accepting the desk, we compromised by telling them we'd put a three-sixteenths around the perimeter edges." In the July 11, 2011 attempt at settlement letter Osborne repeated his reference to lack of mechanical joints for field joints, saying they created open gaps.
However, for reasons to be discussed, given the foregoing, the court cannot conclude that, standing alone, the plaintiff's failure to comply with the specific contract requirements could provide a basis for the defendant to reject acceptance and in fact was not the basis for any rejection of these goods.
A discussion of pre-UCC law and UCC requirements is necessary. In the 6th edition of Calamari and Perillo on Contracts, Professor Perillo at section 11.20, page 380-81 does note that " the doctrine of substantial performance that is almost universally applied does not apply to contracts for the sale of goods. Instead, sales contracts are governed by the perfect tender rule developed with respect to sales contracts in the nineteenth century. Under the rule, the buyer is free to reject the goods unless the tender conforms in every respect to the contract— not only in quantity and quality but also in details of shipment ... UCC has retained the perfect tender rule albeit with a number of significant exceptions." Section 42a-2-601 says that a buyer may reject goods " if the goods or the tender of delivery fail in any respect to conform to the contract."
A limitation on the ambit of this rule is reflected in the wording of § 42-2-606 of our statutes. That section in relevant part said:
§ 42-2-206 What constitutes acceptance of goods
(1) Acceptance of goods occurs when the buyer (a) after a reasonable opportunity to inspect the goods signifies to the seller that the goods are conforming or that he will take or retain them in spite of their nonconformity; or (b) fails to make an effective rejection as provided by subsection (1) of section 42a-2-602, but such acceptance does not occur until the buyer has had a reasonable opportunity to inspect them ...Subsection (1) of § 42a-2-602 states: " Rejection of goods must be within a reasonable time after their delivery or tender. It is ineffective unless the buyer seasonably notifies the seller."
As further noted in § 42a-2-607(2) wherein relevant part it says: " Acceptance of goods by the buyer precludes rejection of the goods accepted and if made with knowledge of a nonconformity cannot be revoked because of it unless the acceptance was on the reasonable assumption that the nonconformity would be seasonably cured but acceptance does not of itself impair any other remedy provided by this article for nonconformity."
Here any of the fabrication defects discussed in this section were apparent at the time of tender or within a day of the desk being picked up by employees of the defendant. That is so because National, on the day following the receipt of the desk, immediately tried to assemble the desk to satisfy its demanding client. It communicated with employees of the plaintiff about the difficulties presented in assembling the desk but in e-mails dated May 19 and May 26, 2011 there is no indication that the desk was being rejected because of these difficulties or because of any perceived defects in the product because of the plaintiff's failure to supply the proper clamps or drill holes with the CNC machine which was unavailable to National at the time its employers assembled the desk. In a credit memo prepared by National on March 28, 2011 but sent to the plaintiff and received by the latter on June 9, 2011 there is no reference by National requesting a deduction for work quality or failure to supply materials.
Bead Chain v. Saxton Products, Inc., 183 Conn. 266, 272 (1981) where the court said " Contrary to the defendant's assertion, Saxton's silence in the face of Bead's deliveries now precludes it from complaining about defects, such as delay in delivery, that were readily apparent at the time of tender."
There is an excellent commercial reason why National did not in fact reject the desk for the grounds being discussed. That is so because the customer per its CEO was willing to accept the desk despite the nonconformity as previously discussed in light of the fact that National was willing to put a 3/16-inch veneer around all the edges. Based on this, up until at least two months after delivery of the desk on April 5, 2011 National adopted a position which recognized its contractual obligations to pay for the items and did not deny those obligations based on a claim of nonconformity to contractual fabrication specifications which the court finds existed on the grounds discussed but in effect were waived.
Or to approach the problem from another perspective the court agrees with the defendant that Judge Levin's opinion in Dunleavey v. Paris Ceramics USA, 47 Conn.Supp. 565 (2002) is very instructive and will rely on it in its discussion concerning the other contract defect— use of the thin veneer on the front of the desk which was discovered by the customer for whom National installed the desk. But the defendant cannot have it both ways. It cannot rest on some reference to commercial realties by (1) pointing out there was no way National could compel its customers to allow it or any other party to enter its premises to cure the defect of the too thin veneer not authorized by the contract thus arguing the defect permitted a rejection of National's contractual obligations but then (2) ignore the fact that defects aside, the customer was perfectly willing to " compromise" claims about any defects regarding the failure to provide proper clamps and drill the necessary openings to assert fasteners to assemble the desk— all this for the purpose of advancing in litigation the assertion of a defect which, in effect, had no commercial importance to the closing of the deal with Calvin Klein.
(ii)
The court will now discuss the issue presented by the plaintiff's placing of a thinner veneer than that contracted for on the front of the desk.
There is no dispute and Mr. Mackall agreed that the contract called for a 3/16-inch veneer on the edge of the desk over the solid mahogany. Mackall also agreed that there had been a " last minute" repair in his shop which involved a need for a lamination on the edge of the desk. He also agreed that a 3/16-inch veneer is more durable than a 1/32-inch veneer and that the need to put the veneer on the front of the desk at the last minute was " because we had scarred the front edge at some point in like the last twelve hours of fabrication." Mackall agreed that he did not tell National about his use of a 1/32-inch veneer to cover up the scarring to the edge of the desk caused at his shop before the desk was picked up by National.
When the CEO of Calvin Klein called to complain about the delamination of the 1/32-inch strip, Mr. Osborne went to inspect the desk and found a fourteen-inch strip had delaminated and it was a 1/32-inch veneer. Osborne opined that a thin veneer would " more likely pop off" than a thick veneer. Mr. Osborne speculated that the thinner veneer installed by the plaintiff on the heavily used front edge of the desk popped off because of the secretary who used the desk constantly rubbing against it and it could have resulted from the juxtaposition of the 3/16-inch veneer otherwise used on the desk and the thinner 1/32-inch veneer since they were two different materials. Basically he said instead of repairing the damage caused at plaintiff's shop, which could have easily been done, plaintiff's employees covered it with a thin veneer and had it picked up by defendant's employees without telling them of the use of the thinner veneer. The court accepts Mr. Osborne's testimony as to the cause of delamination and further concludes from uncontradicted testimony that National was not told of the use of the thinner veneer even though Mr. Mackall agreed it was not as " durable" as the type of veneer National agreed upon when it entered into the contract with the plaintiff company.
In effect the court finds use of the thinner veneer created a defective product given the use contemplated for the desk and this departure from contract requirements was not disclosed to National.
As noted in the previous section the buyer under § 42a-2-601 may reject goods if they " fail in any respect to conform to the contract." In Uniform Commercial Code, 5th Ed., White and Summers at § 8.3, page 547 it states " of the reported Code cases on rejection, few actually grant rejection on what could fairly be called an unsubstantial nonconformity, despite language in some cases allowing such rejection." There have been only five reported Connecticut cases discussing § 42a-2-601, the last case being decided in 1998. Connecticut, however, seems to take a strict view of the perfect tender rule; in Latham Associates v. William Raveis Real Estate, 218 Conn. 297, 302-03 (1991) it states that " a rejecting buyer need only demonstrate that the tender of delivery fails in any respect to conform to the contract" under § 42a-2-601. In that case the trial court's decision upholding rejection of goods was held to be correct because the computers that were the subject of the sale simply did not conform with the expectations of the parties.
It would seem to the court that purchase of a high end desk along with a credenza for over $15,000 would require that a 14-inch delamination in the front of the desk shortly after the commencement of use would present a situation of substantial nonconformity. However, it is also true under the Code that acceptance of goods can occur under § 42a-2-606(1) where the buyer indicates " he take or retain them in spite of their nonconformity." Is there any indication that was the case here or that a failure to make a reasonable inspection by the defendant buyer should translate into a finding of acceptance by diktat of law? Mr. Mackall testified that to detect the fact that a 1/32-inch veneer was used in lieu of a 3/16-inch veneer " A. You'd have to look awful damn close to see it." Later he said if an experienced person looked at the veneer he only " might be able to" tell the thinner veneer was used and added " I don't know. You'd have to be good." Osborne said that he would have been able to tell if the thinner veneer was used just by looking at it but he did not inspect the entire desk and credenza to determine if the proper veneers had been used. However, Osborne was the project manager for the Calvin Klein job site and could not be expected to inspect every item coming into the site. The defendant was dealing with a demanding customer and even though there is no time of the essence clause in the contract there was some delay in completing the desk. The desk and credenza had to be delivered as soon as possible to Calvin Klein and the defendant had to assume that when it was notified the items were ready for pick up on April 5th, it assumed they were fabricated as per the contract. Commercial reality presupposes that parties can rely on the good faith of people they are dealing with. Here the plaintiff indicated it had completed the job of fabricating the desk and it could be picked up on April 5, 2011. Although the plaintiff knew its employees had damaged the front edge of the desk there was an attempt to cover up the defect with a thin veneer not authorized by the contract and the plaintiff did not see fit to tell the defendant who ordered the desk of this departure from contract requirements. As noted the veneer was applied to the front of the desk which common sense would seem to indicate would be subject to fairly heavy use and Mackall himself testified the thinner veneer applied was not as " durable" as the type of veneer contracted for by the parties.
Section 241 of Restatement (2d) Contracts lists the circumstances which are significant in determining whether a breach is material. Subsection (e) sets forth one of the circumstances saying " (e) the extent to which the behavior of the party failing to perform or to offer to perform comports with standards of good faith and fair dealing." Section 618 of 17A Am.Jur.2d, " Contracts" at page 576 says: " Since the rule permitting a recovery in case of substantial performance is based on equitable considerations, it is usually stated as essential to its application that the contractor must have acted in good faith."
Under the circumstances of this case, as just discussed, even if Osborne's testimony is accepted that inspection would have discovered that an improper and too thin veneer had been used on a small portion of the desk and that inspection had not been made this should not translate into an irrevocable acceptance. In effect it would be rewarding the plaintiff for not informing the defendant of an intentional failure to meet contractual specifications and then allowing it to use a failure to inspect as a defense— such gotcha reasoning is not appropriate under the Uniform Commercial Code.
An interesting perspective on this problem is presented by an examination of § 42a-2-608, Revocation of Acceptance in Whole or in Part. If we assume there was an acceptance of the product on April 5th, subsection (1) states:
(1) The buyer may revoke his acceptance of a lot or commercial unit whose nonconformity substantially impairs its value to him if he has accepted it (a) on the reasonable assumption that its nonconformity would be cured and it has not been seasonably cured; or (2) without discovery of such nonconformity if his acceptance was reasonably induced either by the difficulty of discovery before discovery or by the seller's assurances. (Underlining by court.)
The plaintiff said, in effect that the desk was ready, come and pick it up— ready carries the unspoken assurance it had been fabricated as per contract. The underlined language emphasizes the importance of good faith dealing between parties under the Code.
But the foregoing requires the court to address another issue. As noted earlier § 42a-2-606(1) states that " (1) acceptance of goods occurs when the buyer (a) after a reasonable opportunity to make to inspect the goods signifies to the seller that the goods are conforming or that he will take or retain them in spite of their nonconformity or (b) fails to make an effective rejection as provided by subsection (1) of section 42a-2-602." That subsection in turn says " (1) Rejection of goods must be within a reasonable time after their delivery or tender. It is ineffective unless the buyer seasonably notifies the seller." Has the defendant waived its right of rejection under the Code despite the conclusions the court has previously reached?
It is difficult to conclude that in this case rejection of the goods was not made within a reasonable time after delivery. The defendant only learned of the delamination of the 14-inch strip when the CEO of Calvin Klein called to complain. From what the court can deduce from the transcript this occurred in late May or early June 2011. National sent a work order to the plaintiff on June 9, 2011 although it was issued on March 28, 2011. One would expect that if the desk had already been rejected by Calvin Klein some indication to that effect would have been made along with the June 9th transmittal. In any event the offer of settlement letter sent by Mr. Osborne to the plaintiff would appear to be the first indication Calvin Klein had rejected the desk; it is made in response to a June 21, 2011 invoice sent by the plaintiff to the defendant. The July 11th letter was thus sent a little over three months after the desk and credenza was picked up by the defendant. But the contract violation involving the use of the thinner veneer was only discovered a few weeks before the July letter was sent and the passage of three months from delivery of the items and the July letter were due in most part to the plaintiff having concealed damage its employees did to the desk by use of the 1/32-inch veneer and not informing the defendant of its use.
Despite the foregoing the plaintiff claims it was not offered the opportunity to cure any defects in the desk. This concept is set forth in § 42a-2-508 of the UCC entitled " Cure by Seller of improper tender or delivery." Replacement. Subsection (1) states:
(1) Where any tender or delivery by the seller is rejected because nonconforming and the time for performance has not yet expired, the seller may seasonably notify the buyer of his intention to cure and may then within the contract time make a conforming delivery.
Subsection (2) states:
(2) Where the buyer rejects a nonconforming tender which the seller had reasonable grounds to believe would be acceptable with or without money allowance the seller may if he seasonably notifies the buyer have a reasonable time to substitute a conforming tender.
West refers to only four Connecticut Appellate cases interpreting the UCC provision.
A reading of these sections along with the commentary to them does not, in the court's opinion, permit a right to cure. The commentary to subsection (1) states it " permits a seller who has made a non-conforming tender in any case to make a conforming delivery within the contract time upon reasonable notification to the buyer." Here the delamination occurred before July 11, 2011 and at the end of May or beginning of June— in the court's opinion probably sometime in early June. In the court's opinion this was not within the " time for performance." It agrees with the plaintiff that there is no time of the essence provision in the contract but a contract must still be performed within a reasonable time. The delamination and rejection by Calvin Klein occurred about two months after the desk was delivered and somewhat less than that after it was installed in the Calvin Klein headquarters. Osborne testified he believed he told the plaintiff the desk and credenza were to be delivered to an important client and it seems clear that due to their interaction with each other prior to April 5, 2011 it would have been apparent to the plaintiff that these items had to be assembled and installed in Calvin Klein headquarters as soon as possible and not within a two-month window for performance.
Under Subsection (2) it is even more clear that the opportunity to cure cannot be extended to the plaintiff. The commentary to this subsection states it " seeks to avoid injustice to the seller by reason of a surprise rejection by the buyer." Where is the surprise here?— the seller plaintiff knew the 1/32-inch veneer did not comply with the contract specifications and should have assumed the defendant would have rejected the desk if it had been so informed. Under subsection (2) the seller is not protected unless he had " reasonable grounds to believe" that the tender would be acceptable (see second sentence of commentary).
Perhaps even more reflective of commercial reality is the fact that the defendant procured the desk and credenza for a third party, Calvin Klein. The transcript makes clear that the CEO of that company was incensed at the delamination and it must be remembered this defect was coupled with the earlier assembly and fabrication problems which the defendant was able to " compromise with the CEO." On this point the defendant quotes from the case of Dunleavey v. Paris Ceramics USA, Inc., 47 Conn.Supp. 565, 575-76 (Levin, J., 2002).
In addition, the defendant cities authority for the proposition that a seller ought to be entitled to cure a nonconforming tender even where a buyer has not rejected the nonconforming goods. First, Connecticut appellate courts have not endorsed the view. Second, even under this liberal interpretation of U.C.C. § 2-508, which reads the word " rejection" out of the statute, the reality— the commercial reality— is that the defendant resold the goods to another party who then integrated them into his premises. The defendant does not explain adequately how the plaintiff could have mandated the McClinches to permit the defendant to affect a cure; that is, to compel the McClinches to accept and use substitute stone supplied by the defendant in the installation of another terrace. " The Uniform Commercial Code is directed toward commercial realities ..." Silieg v. National Bank of Commerce of Seattle, 509 F.2d 1009, 1012 (9th Cir.1975).
The Appellate Court affirmed Judge Levin's decision and in particular his reasoning in the quoted paragraph, see 97 Conn.App. 579 (2006) at pages 583-84.
The CEO of Calvin Klein made it clear that he wanted the desk removed from his building and did not want the defendant to have any further involvement or work done with the desk. If that is so, and no contradiction appeared in the evidence, the plaintiff, who built the desk, would certainly not have been permitted to enter the Calvin Klein building to cure any defect.
The court concludes that on its first claim under Invoice # 1595 judgment should enter for the plaintiff in the amount of $3,497.81.
As to the claim under Invoice # 1625 for the desk and credenza judgment will enter for the defendant.
(a) The desk and credenza were destroyed and discarded by the defendant after Calvin Klein's rejection of them. The reason given is that the desk was put together with epoxy and there was no way to dismantle it. The plaintiff was not given an opportunity apparently to salvage the goods pursuant to Sections 42a-2-602-2-604 of the UCC. Under subsection 121 of § 42a-2-602, for example the buyer " is under a duty after rejection to hold (the goods) with reasonable care at the seller's disposition for a time sufficient to permit the seller to remove (the goods). Assuming that the defendant buyer did not comply with this Code provision that, in the court's opinion, would not require a different result in the plaintiff's contract claim regarding the desk and credenza. It is not evidence that these items were " wrongfully rejected" since that determination is anterior to the question of whether the goods were wrongfully discarded by the defendant. Failure of the defendant to comply with this code provision might give the plaintiff seller a right to bring an action in damages but no counterclaim was brought here and no evidence of the market value of the desk or credenza was offered.
(b)
It is true that in the defense to the contract action no claim was made that the credenza failed to comply with contract requirements as to veneer or fabrication requirements after delivery.
The problem is that these items were to be installed and purchased by Calvin Klein as a unit, or as part of the same deal (to use the vernacular). The plaintiff must have been aware of this. In any event Calvin Klein could not be faulted for failure to rightfully reject the desk but be liable for not accepting the credenza so how could the defendant be obligated to the plaintiff for just the value of the credenza.
Also under the contract it is unclear what the contract price was for the credenza as opposed to the desk— it is not set forth in the contract so any damage award would be based on speculation.