U.S. Nonwovens Corp. v. Pack Line Corp.
48 Misc. 3d 211
N.Y. Sup. Ct.2015Background
- U.S. Nonwovens contracted in 2009 with Pack Line and Nuspark for a custom Auto Tubber machine; Nuspark designed/manufactured the conveyor and agreed to install and commission the integrated machine for $150,000.
- Plaintiff alleges delivery, setup, installation and testing occurred between Dec. 2009 and Aug. 2010 and that the machine was immediately defective.
- Complaint (May 2014) asserts breach of contract, breach of express and implied warranties, breach of the implied covenant of good faith, and unjust enrichment against both defendants.
- Nuspark moved to dismiss under CPLR 3211, arguing (1) CISG preempts state-law claims, (2) plaintiff failed to give required CISG notice of nonconformity, and (3) claims are time-barred by the statute of limitations.
- Plaintiff conceded the CISG applies but argued its pleading satisfies CISG substantive requirements, that it adequately pleaded notice (numerous complaints to Nuspark upon delivery), and that accrual occurred at completion of installation (alleged Aug. 2010), so the action (filed May 2014) is timely.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does the CISG preempt state-law contract/warranty claims? | CISG applies but plaintiff says its pleaded claims meet CISG substantive standards so dismissal is not required | CISG preempts state-law claims so plaintiff’s state claims should be dismissed | CISG preempts state law; but plaintiff’s claims sufficiently plead causes of action under CISG/UCC standards, so breach and warranty claims survive dismissal. |
| Did plaintiff plead required CISG notice of nonconformity? | Alleged numerous complaints to Nuspark immediately upon delivery, which suffices as notice | Nuspark contends plaintiff failed to plead compliance with CISG article 39 notice requirement | Court found the verified complaint sufficiently alleges notice; dismissal on this ground denied. |
| Are the contract/warranty claims time-barred under the four-year limitations period? | Accrual occurred when installation/commissioning completed (Aug. 2010), so suit filed within four years | Accrual occurred at delivery (Dec. 2009), making the suit untimely | Because Nuspark contractually promised installation/commissioning, accrual is when installation completed; accepting plaintiff’s allegation of Aug. 2010, Nuspark failed to show claims are time-barred at this stage. |
| Are unjust enrichment and implied covenant of good faith viable given an express contract and CISG preemption? | Plaintiff pleaded both as separate claims | Nuspark argued they are preempted/duplicative | Court dismissed unjust enrichment (preempted by CISG where express contract exists) and dismissed implied covenant claim as duplicative of breach of contract. |
Key Cases Cited
- Forestal Guarani S.A. v. Daros Int’l, Inc., 613 F.3d 395 (3d Cir.) (CISG applies to sales between parties in different Contracting States)
- Medellin v. Texas, 552 U.S. 491 (U.S. Const. Art. VI; treaties can preempt conflicting state law)
- Caterpillar Inc. v. Usinor Industeel, 393 F. Supp. 2d 659 (N.D. Ill.) (state law governs outside CISG scope)
- Magellan Int’l Corp. v. Salzgitter Handel GmbH, 76 F. Supp. 2d 919 (N.D. Ill.) (elements of breach of contract under CISG mirror UCC/common law elements)
- Symbol Tech., Inc. v. Deloitte & Touche, LLP, 69 A.D.3d 191 (App. Div. 2d Dep’t) (CPLR 3211(a)(7) pleading standard)
- Loiodice v. BMW of N. Am., LLC, 125 A.D.3d 723 (App. Div. 2d Dep’t) (defendant’s burden on statute-of-limitations CPLR 3211(a)(5) motion)
- Swift v. New York Med. Coll., 25 A.D.3d 686 (App. Div.) (defendant must show when cause of action accrued to meet prima facie statute-of-limitations defense)
- Franklin Nursing Home v. Power Cooling, 227 A.D.2d 374 (App. Div.) (accrual occurs upon completion of the defendant’s contracted performance when contract requires installation/commissioning)