Austin v. North American Forest Products
| Decision Date | 21 September 1981 |
| Docket Number | No. 80-3602,80-3602 |
| Citation | 656 F.2d 1076 |
| Parties | Jack AUSTIN, d/b/a Jack Austin & Associates, Plaintiff-Appellant Cross- Appellee, v. NORTH AMERICAN FOREST PRODUCTS, et al., Defendants-Appellees, Cross-Appellants, and GLASSOW SALES CO., Defendant-Appellee, Cross-Appellant and Cross-Appellee, v. LIFETIME DOORS, INC., Defendant-Appellee, Cross-Appellee and Cross-Appellant. . Unit A |
| Court | U.S. Court of Appeals — Fifth Circuit |
Emmett C. Sole, Lake Charles, La., for Austin.
James R. Nieset, Lake Charles, La., for North American, Glassow and U.S. Fire Ins. Co.
Michael T. Pulaski, Alexandria, La., for Lifetime.
Appeals from the United States District Court for the Western District of Louisiana.
Before REAVLEY, RANDALL and SAM D. JOHNSON, Circuit Judges.
This is a Louisiana diversity case involving the sale by North American Forest Products and Glassow Sales Company (hereinafter referred to collectively as Glassow) of door units manufactured and supplied by Lifetime Doors, Inc. to the contractor, Jack Austin (doing business as Jack Austin & Associates). In this suit, Jack Austin seeks to recover damages, penalties, and attorney's fees from the seller (Glassow), the seller's surety (United States Fire Insurance Company), and/or the manufacturer (Lifetime). Glassow seeks to recover from Austin the balance of the purchase price of the doors and, if held liable to Austin or if denied recovery on its counterclaim against Austin, seeks indemnity from Lifetime. The district court held that the doors were defective; that Austin's action against Glassow, United States Fire Insurance Company, and Lifetime had prescribed; that Austin was not liable for the balance of the purchase price of the doors; and that Lifetime was liable to Glassow for indemnification for the unpaid balance on the purchase price of the doors and for attorney's fees. We affirm.
Austin contracted with the Corps of Engineers in early 1972 for the construction of a 260-unit family housing project at Fort Polk, Louisiana. Subsequently, Austin reached an agreement with North American Forest Products, Inc., for the supply of all of the millwork necessary to construct the 260 units, including the exterior doors at issue in this suit. On June 2, 1972, Austin issued a contract for the millwork to Glassow (a joint venture consisting of North American Forest Products, Inc., and Glassow Sales Company 1). Item No. 3 of that contract required Glassow to furnish "(a)ll exterior doors as required to be supplied in pre-hung units with butts furnished and machined for lockset." The reverse side of the contract contained the following provisions:
The Seller is familiar with the Contractor's Quality Control System required by United States Government Contracts, and certifies that all materials supplied or furnished under this purchase order, to be used on Government Contracts, conform to the applicable specifications and/or drawings, and that any penalties levied against the Contractor, because of improper submittals of material, or materials not conforming to the applicable specifications and/or drawings, will be for the account of the Seller.
The seller warrants that the equipment, materials and/or supplies purchased hereunder are designed, manufactured and/or constructed so as to comply with all federal, state and local safety rules and regulations including, but not limited to, the Occupational Safety and Health Act of 1970.
The seller agrees to indemnify and hold buyer harmless for, of and from any loss, including but not limited to any fines, penalties and corrective measures, buyer may sustain by reason of seller's failure to comply with said laws, rules and regulations in connection with the design, manufacture and/or construction of such equipment, materials and/or supplies purchased hereunder.
The defendant United States Fire Insurance Company 2 became surety for Glassow for performance of its contract.
On August 17, 1972, Austin received from Lifetime Doors, Inc., 3 the manufacturer of the doors, a certification dated August 14 that the doors it proposed to furnish for use on the Fort Polk project would "be manufactured in accordance with CS (Commercial Standard) 171 Type I." Austin submitted the certification to the Corps and, in September 1972, the Corps approved the submittal upon the condition that Lifetime "furnish guarantees in compliance with Paragraph 8B-3.5 of the contract specs" 4 and "assure factory sealing is done in compliance with Paragraph 8B-3.3 of the contract specs." Paragraph 8B-3.3 provides that "(b)efore shipment of doors, top and bottom edges shall be sealed with spar varnish conforming to Federal Specification TT-V-121, or other approved water-resistant sealer." Austin advised Glassow of the Corps' conditional approval.
On August 4, 1972, Glassow issued Purchase Orders 1076 and 1077 to Lifetime for 916 13/4 inch solid core Lauan doors conforming to CS 171, Type I (fully waterproof). Glassow did not require that the doors be sealed at the factory by Lifetime. During the week of October 21, 1972, Lifetime shipped the doors that it had manufactured in Hearne, Texas, to Seminole Wood Products 5 in Mobile, Alabama. Austin received the first shipment of doors at Fort Polk on December 13, 1972. 6
Austin completed work at Fort Polk and left there in April 1974. On September 11, 1974, Austin was informed by the Corps that the exterior doors on the Fort Polk housing units were delaminating. This triggered a flurry of correspondence between Austin, Glassow, Lifetime, and the Corps. Austin notified Glassow by telephone and by letter of the delamination of the doors the same day that the Corps informed Austin of the problem. Alfred J. Glassow, Jr., President of Glassow Sales Company, notified Ed Cervi of North American Forest Products, Inc. and Wayne Lees, General Sales Manager for Lifetime, of the problem that had arisen with respect to the doors. Lees, in turn, informed Donald Huber, Vice President of Lifetime, of the delamination of the doors and, beginning with a September 26, 1974 letter, Huber wrote Glassow a number of letters in which he contended that the delamination was caused by an "architectural deficiency" in the housing units and that Lifetime was not responsible for the problem. Between September 1974 and May 1975, the Corps made repeated demands upon Austin to take some action with respect to the doors; Austin, in turn, continually demanded that Glassow take action on the problem; Glassow regularly attempted to involve Lifetime in the situation; and Lifetime steadfastly denied all responsibility.
Several letters are particularly pertinent to the claims made by the parties in this case. On September 30, 1974, Alfred Glassow wrote Austin a letter stating:
(Donald Huber's) unwillingness to send an inspector or take any other action is to me very unrealistic. It would seem under the circumstances that they aren't about to admit that they could have made a mistake. Accordingly, we shall and will take whatever action is necessary and request the aid of both of you and the Corps of Engineers.
Thereafter, in November 1974, Glassow contacted the Pittsburgh Testing Laboratory to request the testing of several doors from the Fort Polk project. The doors were received by the Laboratory in February 1975, and the Laboratory's March 24, 1975 report concluded that "all the tested samples failed to meet the specification requirement (for Type I doors) due to excessive delamination."
A March 31, 1975 letter from Alfred Glassow to Donald Huber of Lifetime stated:
We presume that you now have your copy of the report from the Pittsburgh Testing Laboratory which should explain your companies (sic) involvement. Our present train of thought runs along the line that we are not planning to be particularly vindictive in this matter as long as we can be compensated for our costs involved in trying to get this mess resolved as quickly as possible. We are hopeful that we shall have your cooperation in this endeavor. If you have some comments and ideas as to how we should proceed, we would be pleased to hear from you.
On April 21, 1975, Alfred Glassow wrote Austin a letter that stated:
It would appear that at the present time, this situation has become pretty complicated with no one willing to assume any responsibility for the problem at hand, and with Glassow Sales Co. caught right in the middle. The writer cannot understand how Glassow Sales Co. can be held responsible for a problem over which they have absolutely no control. Consequently, we are turning this entire file over to our attorney for his consideration and advice. As soon as he has had a chance to evaluate things, we will let you know what our next move will be.
On June 2, 1975, Alfred Glassow wrote Donald Huber a letter stating:
The main purpose of this letter is to notify you that we are going to hold Lifetime Doors, Inc. responsible for all costs involved in the resolution of this problem and will also ask for reasonable damages due to negligence on the part of Lifetime Doors, Inc. by their refusal to discuss, inspect damage, or express any concern in the gravity of the situation.
In June 1975, Glassow requested that the Laboratory test four additional doors. A June 13, 1975 letter from Alfred Glassow to Austin stated in part:
As you will note, we have asked the Corps for enough time to have the new tests completed and are hopeful such will be the case. When the time comes, we will be happy to cooperate and assist in any way we can. At the present time, the problem of replacement seems to be yours although we realize it will eventually revert to us and then finally to Lifetime Doors, Inc. In the meantime, we feel we have done all that we can at the present time. We still believe that we are not at fault in any way, as we clearly bought exterior doors conforming to CS 171-58; the manufacturer invoiced us as exterior doors Type 1; and...
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