177 F.3d 114 (2nd Cir. 1999), 98-7603, Windows, Inc. v. Jordan Panel Systems Corp.

Docket Nº:Docket No. 98-7603.
Citation:177 F.3d 114
Party Name:WINDOWS, INC., Plaintiff-Third-Party-Plaintiff-Appellee, v. JORDAN PANEL SYSTEMS CORP., Defendant-Counter-Claimant-Appellant, Consolidated Freightways Corporation of Delaware, Defendant.
Case Date:April 21, 1999
Court:United States Courts of Appeals, Court of Appeals for the Second Circuit
 
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Page 114

177 F.3d 114 (2nd Cir. 1999)

WINDOWS, INC., Plaintiff-Third-Party-Plaintiff-Appellee,

v.

JORDAN PANEL SYSTEMS CORP., Defendant-Counter-Claimant-Appellant,

Consolidated Freightways Corporation of Delaware, Defendant.

Docket No. 98-7603.

United States Court of Appeals, Second Circuit

April 21, 1999

Argued Dec. 2, 1998.

Page 115

Terrence J. O'Connor, White Plains, N.Y. (Law Offices of Robert P. Pagano, White Plains, N.Y.), for Defendant-Counter-Claimant-Appellant.

Marian H. Russo, Patchogue, N.Y. (Steven Taitz, Pelletreau & Pelletreau, Patchogue, N.Y., Of Counsel), for Plaintiff-Third-Party-Plaintiff-Appellee.

Before: NEWMAN, LEVAL, and PARKER, Circuit Judges.

Judge PARKER concurs by separate opinion.

LEVAL, Circuit Judge:

This is an appeal by a buyer from a grant of summary judgment in favor of the seller dismissing the buyer's claim for incidental and consequential damages resulting from damage suffered by the goods during shipment. The district court found that any negligence that might have caused the damage was attributable to the carrier and not the seller. It therefore concluded that the buyer's claim for incidental and consequential damages was barred by N.Y.U.C.C. § 2-613, which precludes the award of such damages when the goods are damaged "without fault of either party." We affirm, but in reliance on different provisions of the Code.

Windows, Inc. ("Windows" or "the seller") is a fabricator and seller of windows, based in South Dakota. Jordan Systems, Inc. ("Jordan" or "the buyer") is a construction subcontractor, which contracted to install window wall panels at an air cargo facility at John F. Kennedy Airport in New York City. Jordan ordered custom-made windows from Windows. The purchase contract specified that the windows were to be shipped properly packaged for cross country motor freight transit and "delivered to New York City."

Windows constructed the windows according to Jordan's specifications. It arranged to have them shipped to Jordan by a common carrier, Consolidated Freightways Corp. ("Consolidated" or "the carrier"), and delivered them to Consolidated intact and properly packaged. During the course of shipment, however, the goods sustained extensive damage. Much of the glass was broken and many of the window frames were gouged and twisted. Jordan's president signed a delivery receipt noting that approximately two-thirds of the shipment was damaged due to "load shift." Jordan, seeking to stay on its contractor's schedule, directed its employees to disassemble the window frames in an effort to salvage as much of the shipment as possible.

Jordan made a claim with Consolidated for damages it had sustained as a result of the casualty, including labor costs from its salvage efforts and other costs from Jordan's inability to perform its own contractual obligations on schedule. Jordan also ordered a new shipment from Windows, which was delivered without incident.

Jordan did not pay Windows for either the first shipment of damaged windows or the second, intact shipment. Windows filed suit to recover payment from Jordan for both shipments in the Supreme Court of the State of New York, Suffolk County. Jordan counterclaimed, seeking incidental and consequential damages resulting from the damaged shipment. Windows then brought a third-party claim against Consolidated, which removed the suit to the United States District Court for the Eastern District of New York.

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Windows settled its claims against Consolidated. Windows later withdrew its claims against Jordan. The only remaining claim is Jordan's counterclaim against Windows for incidental and consequential damages.

The district court granted Windows' motion for summary judgment. It held that § 2-613 of the New York Uniform Commercial Code shields a seller from liability for such damages. That statute provides:

Where the contract requires for its performance goods identified when the contract is made, and the goods suffer casualty without fault of either party before the risk of loss passes to the buyer...

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