29 Conn. App. 865 | Conn. App. Ct. | 1993
The defendant appeals from the trial court’s judgment in favor of the plaintiff on the defendant’s counterclaim for incidental damages. The defendant asks that we reverse the judgment of the trial court because (1) the trial court incorrectly determined that certain contractual terms added by the plaintiff to the backs of its invoices were incorporated into the contract between the parties by virtue of the Uniform Commercial Code (UCC), and (2) the trial court incorrectly ruled that the added terms barred the defendant from recovering incidental damages. Because the added terms of the contract did not, as a matter of law, bar the defendant from seeking incidental damages, we need not reach the merits of the defendant’s first claim. We reverse the judgment of the trial court and remand the case for a new trial on the issue of incidental damages.
The trial court found the following facts. The plaintiff, a Connecticut corporation that manufactures electromagnetic switches, and the defendant, who makes heated handlebar grips for snowmobiles, began a business relationship in 1986, when the plaintiff agreed to supply the defendant with a large quantity of switches in 1987. Thereafter, agreements were reached for supplying switches to the defendant for 1988 and 1989 as well.
In July, 1989, the defendant discovered a defect that caused a large number of the switches to jam and therefore to become unusable in its product. After being notified of the problem and inspecting the switches, the plaintiff requested that the defendant return all of the switches in its inventory. Between August and November of 1989, the defendant packed up and shipped 29,000 switches back to the plaintiff. Meanwhile, the plaintiff supplied the defendant with 6000 higher quality switches, and endeavored to repair and replace the returned switches in order to fill the remainder of the defendant’s order.
We note that the defendant reiterated at oral argument, in response to questions from the court, that he was seeking only incidental damages on appeal, and, although consequential damages were alleged at trial, there was no attempt to prove them.
The trial court determined that the contract terms on the back of the plaintiffs invoices, barring recovery for consequential damages, did constitute part of the contract between the parties. The defendant argues on appeal that these terms are not part of the contract, and therefore do not limit his remedies. We need not determine whether the trial court correctly ruled that the invoice terms were part of the contract because, even if we assume that the trial court ruled correctly, those terms do not bar the incidental damages that the defendant seeks.
The contractual terms written on the reverse side of the plaintiffs invoices, by their plain language, do not bar the recovery of incidental damages, and in fact allow for their recovery. The section of the invoice entitled “Limitation of Liability,” reads: “The liability of the Seller to the Buyer arising out of the manufacture, sale, delivery, use or resale of the goods, whether based on warranty, contract, negligence or otherwise, shall not exceed the cost of correcting defects in the goods as herein provided. Upon the expiration of the warranty period, all such liability shall terminate. The Seller shall not be liable to the Buyer or ultimate users of the equipment into which the goods are incorporated for loss of anticipated profits, loss by reason of plant shutdown or service interruption, nonoperation or
The UCC makes a clear distinction between incidental and consequential damages. General Statutes § 42a-2-715,
Paragraph six begins by listing several forms of consequential damage: loss of anticipated profits, loss by reason of plant shutdown or service interruption, nonoperation or increased expense of operation of other equipment, loss of use of revenue, and cost of capital. This list is followed by the words “or other consequential loss or damage of any nature . . . .’’Therefore, reading the sentence as a whole, it is clear that it refers to consequential damages, the damages listed and consequential loss or damage of any kind. The drafter would have excluded incidental damages specifically if that was the purpose of the paragraph in question. The author also would not have bothered to exclude consequential damages specifically if both consequential and incidental damages could be limited by the mere phrase “damage of any nature.”
The plaintiff asks us to read the contract in such a way as to ignore common rules of grammar. The adjective “consequential,” as used in the phrase “other consequential loss or damage of any nature arising from any cause whatsoever,” modifies the nouns “loss” and “damage.” The phrase at issue means that the seller is not liable for any consequential loss or consequential damage.
When the plaintiff became aware of the defect in the switches, it requested that the defendant ship the 29,000 switches back to Gaynor. Since the plaintiff could not repair the switches until they were shipped to its plant, it was incumbent on the defendants to send them. Therefore, the shipping and attendant repacking were clearly part of the “costs of correcting the defect.”
As the plaintiff correctly points out, the UCC, in § 2-719 (1) (General Statutes § 42a-2-719 [1])
“ ‘In interpreting contract items, we have repeatedly stated that the intent of the parties is to be ascertained by a fair and reasonable construction of the written words and that the language used must be accorded its common, natural, and ordinary meaning and usage where it can be sensibly applied to the subject matter of the contract.’ ” Barnard v. Barnard, 214 Conn. 99, 110, 570 A.2d 690 (1990). Normally, a determination of what the parties intended by contractual commitments is “a question of fact, reversible only if the trier of fact could not reasonably have arrived at the conclusion it had reached”; Thompson & Peck, Inc. v. Harbor Marine Contracting Corporation, 203 Conn. 123, 130, 523 A.2d 1266 (1987), affirming 5 Conn. App. 366, 497 A.2d 1049 (1985); but “[wjhere there is definitive contract language, the determination of what the parties intended by their contractual commitments is a question of law.” Id., 131. “Terms cannot be added to a contract by interpretation.” Con
The judgment is reversed in part and the case is remanded with direction to render judgment on the counterclaim for the defendant to recover such incidental damages as he may prove on a new trial limited to the issue of incidental damages.
In this opinion the other judges concurred.
The following colloquy occurred during oral argument:
“The Court: You are saying that all the counts in the counterclaim allege damages which would be incidental damages as opposed to consequential?
“Mr. Fitzgerald (counsel to the defendant): Everything . . . which we are claiming on appeal falls into that category.
“The Court: Not everything that was in the complaint originally?
“Mr. Fitzgerald: We had a claim under CUTPA, we claimed punitive damages, we claimed . . .
“The Court: Well, putting aside punitive damages, maybe you could just look at the complaint with me and tell me which is which and which falls into what category . . . let’s get to paragraph fourteen, the record page eighteen.”
Mr. Fitzgerald called out the letters of the categories from the counterclaim that he deemed were claims for incidental damages, and noted that categories F (loss of sales) and G (loss of good will) were claims for consequential damages. The colloquy continued:
“The Court: F and G have nothing to do with incidental damages?
“Mr. Fitzgerald: No. Nor was . . . there any proof or claim at trial as opposed to in the counterclaim.”
General Statutes § 42a-2-715 provides: “(1) Incidental damages resulting from the seller’s breach include expenses reasonably incurred in inspection, receipt, transportation and care and custody of goods rightfully rejected, any commercially reasonable charges, expenses or commissions in connection with effecting cover and any other reasonable expense incident to the delay or other breach.
“(2) Consequential damages resulting from seller’s breach include (a) any loss resulting from general or particular requirements and needs of which the seller at the time of contracting had reason to know and which could not reasonably be prevented by cover or otherwise; and (b) injury to person or property proximately resulting from any breach of warranty.”
General Statutes § 42a-2-719 (1) provides: “Subject to the provisions of subsections (2) and (3) of this section and of the preceding section on liquidation and limitation of damages, (a) the agreement may provide for remedies in addition to or in substitution for those provided in this article and may limit or alter the measure of damages recoverable under this article, as by limiting the buyer’s remedies to return of the goods and repayment of the price or to repair and replacement of nonconforming goods or parts; and (b) resort to a remedy as provided is optional unless the remedy is expressly agreed to be exclusive, in which case it is the sole remedy.”
UCC comment 2 to General Statutes § 42a-2-719 states: “Subsection (1) (b) creates a presumption that clauses prescribing remedies are cumulative rather than exclusive. If the parties intend the term to describe the sole remedy under the contract, this must be clearly expressed.”