Staging Dimensions, Inc. v. KP Walsh Associates, Inc.Staging Dimensions, Inc. v. KP Walsh Associates, Inc.
- Reporters:
- ,
- Before:
- Carl C. Danberg
The plaintiff, Staging Dimensions, Inc., (hereinafter “Plaintiff“), filed a breach of contract action against the defendant, KP Walsh Associates, Inc., (hereinafter “Defendant“), alleging Defendant breached the contract and warranties associated with the purchase of a large piece of industrial equipment. Plaintiff is in the business of providing permanent and portable stages for different events and venues. Plaintiff contracted with Defendant – a full-service machinery distributor selling new and used wood working machinery – for the purchase of an industrial router. As late as May 2018, Plaintiff contacted Defendant to purchase a used Andi Stratos WFD 4x8 CNC Router (hereinafter “Andi Router“) for $26,500.00.
In November of 2018, Plaintiff and Defendant discussed the purchase of an additional router, specifically a used CR Onsrud 97M12 4x8 “Mate Series” CNC Router 2013 (hereinafter “Onsrud Router“). After the parties reached an agreement on a $50,000.00 purchase price with a $25,000 credit, Plaintiff never purchased the Onsrud Router.
On April 4, 2019, Plaintiff filed the instant lawsuit against Defendant. Plaintiff seeks recovery of $26,500.00, plus pre- and post-judgment interest, costs for removal or disposal of the Andi Router, costs for storing the Andi Router and attorney‘s fees. Defendant counterclaims seeking $3,400.00 in shipping costs for the Andi Router.
FACTS AND PROCEDURAL HISTORY
At trial, the rendering of events conflicted between the parties, and at times, within a given party‘s own account. Based on the testimony and evidence presented at trial, the Court finds that following facts:1
Plaintiff‘s Vice President, Kimberly Moore (“Moore“), was introduced to Defendant in May of 2018. Plaintiff needed a larger router that could operate in three dimensions and understood Defendant‘s business sold industrial wood cutting equipment. On May 23, 2018, Defendant provided Plaintiff a quote on the Andi Router. Defendant‘s Andi Router quote shows
On June 18, 2018, Defendant contacted Plaintiff to finalize the parties shipping agreement. Before finalizing the shipping arrangements, Plaintiff inquired about the location of the Andi Router.4 After conducting independent research on shipping the Andi Router, Plaintiff decided to approve Defendant‘s shipping arrangements. On June 26, 2018, Defendant told Plaintiff that they could “deal with freight and install separately.”5 On June 26, 2018, Defendant emailed Plaintiff with an invoice numbered 2464.6 Defendant‘s invoice 2464 details the two machines Plaintiff purchased and the purchase price for each machine.7 The invoice indicates payment was made by credit card and shipping was “F.O.B. CA to PA” (emphasis in original).8 On the same day, Plaintiff asked Defendant whether the “router come with a manual and/or warranty.”9 Defendant responded to Plaintiff‘s inquiry stating
I am thinking manuals with it. I can get easily if something missing. Cover all for
30 days. Depending on problem will review first 90.10
On September 4, 2018, Plaintiff received the Andi Router. Upon arrival, Moore immediately emailed Walsh that,
[t]he router was delivered . . . and has incurred damage in transit. Please let me know if there is anything else you need to get this claim started.11
Two weeks later on September 14, 2018, Moore received photographs of the damaged Andi Router from Plaintiff‘s Shop Manager, Justin Phillips (hereinafter “Phillips“). Moore sent the photographs, evidencing the damaged Andi Router, to Walsh including a list of damages and asks Walsh “what the next step is to being reimbursed for these damages.”12 In an email to Walsh, Moore explains the photographs and damages to the Andi Router as follows:
Pic 1 & 2: Are showing the frame for the shield has a crack in the corner. Looks to be from when vacuum for the table slid into the door. bending it and cracking from along with breaking plexi/Lexan.
Pic 3: With the Z sticker, the whole shielding is bent. Looking to be from strapping down.
Pic 4: The foot pedal guard is shattered.
Pic 5: The cable tray is broken in 2 places. It‘s supposed to link back to bridge so it doesn‘t drag.13
On September 17, 2018, Walsh‘s response to Moore‘s email states that he would “connect [with Plaintiff] . . . to advise when tech will be there to review.”14 On September 26, 2018, Plaintiff contacted Defendant and asks “are you buying the parts and repairing or are we doing it and sending over the invoice.”15 That same day, Moore contacts Phillips to get an update on the status of the Andi Router repairs. In response to Moore‘s inquiry about the Andi Router repairs, Phillips explains that,
[y]es [McKee] got a list of stuff to buy that needs to be fix. My understanding is hes getting the parts and fixing it. So while he was getting parts and so forth i need to get it powered up. I got with Brandon about getting power to it. Last we spoke he was to get me a list of wire etc to buy . . . .16
On November 6, 2018, Plaintiff filed its first credit card claim with American Express disputing the purchase of the Andi Router. On November 14, 2018, Walsh emailed Moore apologizing and extending an offer for the purchase of an alternative router, specifically the Onsrud Router.19 On December 5, 2018, Moore‘s response to Walsh‘s November 14th email states “Scott [Humphrey] would like to remove the old machine from our floor and we would also like you to email specs and pricing on machines you currently have available.”20 On December 6, 2018, Walsh‘s response to Moore‘s email states,
I feel that the best solution for staging is for me to sell you the almost new Onsrud 97m and take back andi sold[.] I will lower previous prices and including the vacuum pimp, (sic) delivery of new machine and pick up of andi and install for a difference of 30[,]500.00 with a 3 month warranty[.] We can do this right away . . ..21
On December 10, 2018, Moore asks Walsh to adjust the proposal by removing the vacuum pump.22 Defendant‘s invoice for the Onsrud Router includes a $25,000.00 credit, delivery, installation and “Used ANDI machine picked up” (emphasis in original) for a total purchase price of $50,000.00.23
On December 11, 2018, Walsh asks if Plaintiff had “everything [it] need[ed] and we are good to go?”25 In response, Moore states, “[y]es, we are good to go[.]” (in an email relating to the purchase of the Onsrud Router). We will make a 25% deposit and will pay balance in full once machine is installed and operating on our floor.”26 Walsh asks whether Plaintiff “released cc claim” stating “that needs done right away[.] I can agree to 50% or 12500.00 with balance on complete install asap[.]”27
On December 12, 2018, Walsh contacted Moore regarding the status of the Onsrud Router purchase. Moore states “we are working on getting your 25% deposit over.”28 On December 13, 2018, Walsh emails Moore once again asking about the status of the Onsrud Router and whether Plaintiff released its credit card claim. On December 14, 2018, Moore indicated Plaintiff‘s “looking into purchasing a brand new router since the cost is not much more than [Defendant‘s] offer on the used router.”29 In the same email, Moore instructs Walsh to refrain from contacting the Owner of Staging Dimensions (hereinafter “Humphrey“).30
On December 17, 2018, Defendant received a letter from Plaintiff‘s attorney. On December 19, 2018, Humphrey received notice that American Express could not issue a credit on Plaintiff‘s credit card dispute. On January 3, 2019, Plaintiff filed a second American Express credit card dispute on the purchase of the Andi Router.
“[t]he [Andi Router] at this point is working but not able to run product on. The tool changer is in still need of a part or 2 to run product. We still need to get tooling for the machine because all of the tooling that did come with it is burnt up or damaged around collets.”33
On January 14, 2019, McKee sent Walsh a document detailing what issues were diagnosed on the Andi Router and what he repaired or replaced. The document reads as follows:
Staging Dimensions Anderson Stratos WFD sn 0-88016
Things to be addressed
No parts manual – received the CD
X axis Cable track mounting bracket is broken – repaired – bought new parts
Safety hood: 1- plexiglass is broken
2 ea. Plexiglass 23x21.5
2- Hood frame in cracked
3- Mounting Frame in bent
4- gas cylinders are not Working.
Items 1 2 & 3 were caused by the vacuum pump shifting during shipping and crashing into the hood
Tool changer seams to be disabled need proximity switch LS73 and 2 flow control valves – repaired
2 of the Grease line are broken on the spindle up/ down carriage –repaired
Rust pits on Y axis linear rail – cleaned up rails
Brush raise guides are missing the bearings bought new bearings and rod – repaired
Several air lines have patches in the cable track – repaired
Rexroth bearing 1622-213-10 Andi part # 40908102 – 2 ea. For Y
Cycle start switches and lights need to be replaced – done
Spindle tool change cylinder locked up – replaced
Had to replace Spindle VFD because it got fried from over voltage due to wired being incorrectly labeled34
On April 4, 2019, Plaintiff filed the instant lawsuit against Defendant. On September 17, 2019, just prior to trial, an inspection of the Andi Router took place. Trial in this matter took place on September 26, 2019. After trial, this Court reserved the matter for decision and instructed the parties to submit supplemental briefing to the Court. Briefing was complete on January 24, 2020. This is a final decision and order of the Court following post-trial briefing.
PARTIES’ CONTENTIONS
Plaintiff alleges the Andi Router was never operational. Plaintiff contends Defendant has breached its express warranty, implied warranty of merchantability and implied warranty of fitness for a particular purpose under the parties’ contract. Plaintiff alleges damages in the amount of $26,500.00.35 Plaintiff also seeks costs associated with the removal of the Andi Router, storing the Andi Router and attorney‘s fees in this matter. Plaintiff alleges Defendant, did not repair the Andi Router to operate at its intended purpose. Plaintiff asserts Defendant never invoiced Plaintiff for the shipping costs associated with the Andi Router.
Defendant claims Plaintiff is in breach of contract. Defendant claims Plaintiff is responsible for the shipping costs associated with delivering the Andi Router. Defendant further claims the Andi Router was working after it was repaired by McKee. Defendant contends it is not in breach of any express or implied warranty related to the purchase of the Andi Router.
As trier of fact, the Court is to assess the credibility of the witnesses and, where there is a conflict in the testimony, to reconcile these conflicts, “if reasonably possible[,] so as to make one harmonious story.”36 In doing so, the Court takes into consideration the demeanor of the witnesses, their apparent fairness in giving their testimony, their opportunities in hearing and knowing the facts about which they testified, and any bias or interest they may have concerning the nature of the case.37 In civil cases, “a plaintiff has the burden of proving the elements of their case by a preponderance of the evidence.38 Proof by a preponderance of the evidence means proof that something is more likely than not.”39 Therefore, “the side on which the greater weight of the evidence is found is the side on which the preponderance of the evidence exists.”40
DISCUSSION
After trial the Court must determine whether Defendant breached its express or implied warranties to Plaintiff and whether Plaintiff breached its contract with Defendant.
A. Express Warranty:
The statutory basis for a claim for damages based on breach of an express warranty arising out of a sale of goods under Delaware law is found in Delaware‘s counterpart to the Uniform Commercial Code (“UCC“).41 UCC section 2-313(1) provides that express warranties of a seller of goods are created as follows:
(a) Any affirmation of fact or promise made by the seller to the buyer which relates to the goods and becomes a basis of the bargain creates an express warranty that the good shall conform to the affirmation or promise.
(b) Any description of the goods which is made part of the basis of the bargain creates an express warranty that the goods shall conform to the description. (c) Any sample or model which is made part of the basis of the bargain creates an express warranty that the whole of the goods shall conform to the sample or model.42
According to UCC section 2-313(2), “it is not necessary to the creation of an express warranty that the seller use formal words such as ‘warrant’ or ‘guarantee,‘” to form an express warranty.
An express warranty becomes a basis of the bargain43 and provides a buyer with security in their investment. To satisfy a breach of warranty claim, “[t]he buyer must prove: (1) the existence of an express . . . warranty, (2) a breach of the defendant‘s express . . . warranty, (3) a causal connection between the defendant‘s breach and the plaintiff‘s injury or damage; and (4) the extent of loss proximately caused by the defendant‘s breach.”44 “Also, ‘the buyer must first prove compliance with any conditions precedent that the seller has imposed with respect to the warranty.‘”45
First, Plaintiff must show that a warranty exists. At trial, Defendant conceded the Andi Router had a warranty.46 Defendant communicated to Plaintiff that Defendant would “[c]over all for 30 days[.] Depending on the problem, will review first 90.”47 At trial, Defendant explained that this language was intended to provide Plaintiff with a parts and labor warranty for the Andi Router.48 Nevertheless, a warranty was provided, however ambiguous it may have been as to the scope of coverage.
Therefore, the question for the Court boils down to whether Defendant breached its express warranty by failing to repair the Andi Router. It is undisputed that the Andi Router sustained damage in transit. There is also no dispute that McKee spent a substantial amount of time at Plaintiff‘s facility repairing the Andi Router- a point belabored at trial.53 Defendant bought $3,500
B. Revocation:
Plaintiff argues that it timely revoked acceptance of the Andi Router. Under the UCC, revocation of acceptance requires a showing that any non-conformity has not been “seasonably cured” and notice within a “reasonable time.”56 Plaintiff indicated that in its October 18, 2018, document that it “did not want the machine anymore.” As pointed out by Defendant, there is no trial testimony to support Plaintiff‘s statement as a revocation of acceptance. In the same October 18, 2018, document where Plaintiff allegedly is revoking its acceptance of the Andi Router, Plaintiff is also asking for more information on an alternative router. Plaintiff did not provide any further evidence that as of October 18, 2018, Plaintiff revoked its acceptance of the Andi Router. Moreover, Plaintiff continued to permit Defendant to make necessary repairs to the Andi Router, undermining its claim of revocation.
Plaintiff then indicates its attempt to revoke acceptance of the Andi Router in two December 2018 correspondence with Plaintiff. In Plaintiff‘s email to Defendant on December 5,
As of December of 2018, the parties were negotiating a deal for the Onsrud Router. On December 11, 2018, Plaintiff indicated to Defendant that it was “good to go” referring to the purchase of the Onsrud Router.58 Defendant indicated that it thought the parties had reached a deal on the Onsrud Router and Defendant created an invoice for the purchase of the Onsrud Router. On December 14, 2018, Plaintiff changed course and informed Defendant it was “looking to purchase a brand new router.”59 Three days later Plaintiff‘s lawyer mailed a letter to Defendant requesting the removal of the Andi Router. These December notices cannot form the basis of the Plaintiff‘s revocation as by this time the Andi Router had been repaired. In addition, Defendant started to cure the Andi Router‘s damages within Defendant‘s express “[c]over all for 30 days” parts and repairs warranty.60 Therefore, Plaintiff did not effectively and unequivocally revoke its acceptance and the Defendant seasonably cured the damages sustained to the Andi Router.
C. Implied Warranty of Merchantability:
Under UCC section 2-314 (1), “a warranty that the goods shall be merchantable is implied in a contract for their sale if the seller is a merchant with respects to goods of that kind.”61 In order to be liable for breach of an implied warranty of merchantability, the party must be found to be a merchant within the meaning of UCC section 2-314.62 The term merchant is defined in UCC section 2-104 as:
[a] person who deals in good of the kind or otherwise by his occupation holds himself out as having knowledge or skill peculiar to the practices or goods involved
in the transaction or to whom such knowledge or skill may be attributed by his employment of an agent or broker or other intermediary who by his occupation holds himself out as having such knowledge or skill.63
In order to prevail on a claim for breach of warranty of merchantability, a Plaintiff must prove (1) that a merchant sold goods; (2) which were defective at the time of sale; (3) causing injury to the ultimate consumer; (4) the proximate cause of which were the defective nature of the goods and (5) the seller received notice of the injury.64 Under UCC section 2-314(2),
Goods to be merchantable must be at least such as
(a) Pass without objection in the trade under the contract description; and
(b) In the case of fungible goods, are of fair average quality within the description; and
(c) Are fit for the ordinary purpose for which such goods are used; and
(d) Run, within the variations permitted by the agreement, of even kind, quality and quantity within each unit and among all units involved; and
(e) Are adequately contained, packaged, and labeled as the agreement may require; and
(f) Conform to the promises or affirmations of fact made on the container or label if any.65
There is no dispute Defendant is a merchant under the UCC. Also, Plaintiff, did document and notify Defendant about the Andi Router damages.
Plaintiff must show that the Andi Router was not merchantable at the time of sale. In other words, the Andi Router “must have been capable of passing without objection in the trade under the contract description, and be fit for the ordinary purpose for which it was intended.”66 In this case, Plaintiff has failed to prove that the Andi Router was defective at the time of sale. Defendant provided photographs of the Andi Router to the Plaintiff prior to sale. Plaintiff was fully aware
D. Implied Warranty of Fitness for a Particular Purpose:
Pursuant to UCC section 2-315,
“[w]here the seller . . . has reason to know any particular purpose for which the goods are required and that the buyer is relying on the seller‘s skill or judgment to select or furnish suitable goods, there is a . . . implied warranty that the goods shall be fit for such purpose.”
The implied warranty for a particular purpose is narrower than the implied warranty of merchantability. The implied warranty for a particular purpose is a “gap-filler” provision of the UCC which is implied in every sale of goods unless explicitly disclaimed.68 To be successful under a claim for warranty of fitness for a particular purpose one must claim: (1) a buyer has a special purpose for certain good; (2) the seller knew or had reason to know of that purpose; (3) the seller knew or has reason to know that the buyer was relying on the seller‘s superior skill to select goods that fulfilled that purpose; and (4) the buyer in fact relied on the seller‘s superior skill.69
In this case, Defendant knew Plaintiff intended to use the Andi Router to cut product in connection with constructing stages for its custom staging business. There is no evidence to support the conclusion that the Andi Router was not suitable for 3D printing at the time of purchase. In addition, Plaintiff‘s employee, Phillips indicated that the Andi Router was working
E. Breach of Contract: Shipping Cost
It is undisputed Plaintiff and Defendant entered into a contract for the Andi Router. Under the UCC section 2-204, “[a] contract for the sale of good may be made in any manner sufficient to show agreement, including conduct by both parties which recognizes the existence of such a contract.”70 In addition, “[e]ven though one or more terms are left open a contract for sale does not fail for indefiniteness if the parties have intended to make a contract and there is a reasonably certain basis for giving an appropriate remedy.”71 Under UCC section 2-207,
A definite and seasonable expression of acceptance or a written confirmation which is sent within a reasonable time operates as an acceptance even though it stats terms additional or difference from those offered or agreed upon, unless acceptance is expressly made conditional on assent to the additional or different terms.72
Under the UCC, additional terms, between merchants will become part of the contract unless; “(a) the offer expressly limits acceptance to the terms of the offer; (b) they materially alter it; or (c) notification of objection to them has already or is given within a reasonable time after notice of them is received.”73 In addition, the UCC covers conduct between parties that forms a contract. Under UCC section 2-207(3), “[c]onduct by both parties which recognizes the existence of a contract is sufficient to establish a contract for sale although the writings of the parties do not otherwise establish a contract.”74
Under UCC section 2-319 (1)(a), “when the term is F.O.B the place of shipment, the seller must at that place ship the goods . . . and bear the expense and risk of putting them into possession of the carrier.”79 In this case, Defendant provided Plaintiff with quotes for the Andi Router‘s shipping costs. The Plaintiff looked into alternative methods of having the Andi Router shipped to Plaintiff‘s shop but ultimately decided to use Defendant‘s carrier for shipment. Defendant arranged with a carrier to have the Andi Router delivered to Plaintiff‘s place of business. There is no dispute Defendant paid to ship the Andi Router from California to Delaware. In addition, the Andi Router arrived at Plaintiff‘s business.
In this case, On June 15, 2018, Defendant sent Plaintiff a document entitled “Quotation Summation.”80 Defendant‘s document lists the shipping costs associated with the Andi Router.
Defendant informed Plaintiff in writing that the shipping costs for the Andi Router would be handled separately. Plaintiff also indicated at trial, through Moore‘s testimony, that Plaintiff agreed to and was generally responsible for the shipping costs associated with the Andi Router.82 Defendant delivered the Andi Router to the carrier and the carrier delivered the Andi Router to Plaintiff‘s business. Defendant relied on its contract for shipping costs related to the delivery of the Andi Router. Plaintiff is in breach of contract for the shipping cost of the Andi Router because Plaintiff has not yet paid Defendant for the shipping costs. Therefore, defendant is entitled to the shipping cost associated with the delivery of the Andi Router.
CONCLUSION
For the foregoing reasons, IT IS HEREBY ORDERED this 19th day of March 2020, that judgment be entered in Defendant‘s favor against Plaintiff. Judgment is also entered in favor of Defendant on Defendant‘s counterclaim in the amount of $3,400.00, plus costs, pre- and post-judgment interest at the legal rate and attorney‘s fees.
The Honorable Carl C. Danberg
Judge
cc: Patricia Thomas, Judicial Case Manager