934 F.2d 450 (2nd Cir. 1991), 1099, H. Sand & Co., Inc. v. Airtemp Corp.

Docket Nº:1099, Docket 90-7879.
Citation:934 F.2d 450
Party Name:H. SAND & CO., INC., Plaintiff-Appellant, v. AIRTEMP CORPORATION, Defendant-Appellee.
Case Date:June 03, 1991
Court:United States Courts of Appeals, Court of Appeals for the Second Circuit

Page 450

934 F.2d 450 (2nd Cir. 1991)

H. SAND & CO., INC., Plaintiff-Appellant,


AIRTEMP CORPORATION, Defendant-Appellee.

No. 1099, Docket 90-7879.

United States Court of Appeals, Second Circuit

June 3, 1991

Argued Feb. 25, 1991.

Page 451

Stuart J. Moskovitz, (Berman, Paley, Goldstein & Berman, New York City, of counsel), for plaintiff-appellant.

John B. Sherman (Weisman, Celler, Spett & Modlin, New York City, of counsel), for defendant-appellee.

Before OAKES, Chief Judge, CARDAMONE and MAHONEY, Circuit Judges.

CARDAMONE, Circuit Judge:

This appeal centers on the date of delivery of four chillers used in the air conditioning system at the New York Port Authority Bus Terminal Building in Manhattan. Unlike beauty, the delivery of property is not in the eye of the beholder. That is a subjective notion, while the transfer of goods occurs when the facts of delivery are objectively established.

The appellant, H. Sand & Co., Inc. (Sand), ordered the chillers in 1977 from the appellee, Airtemp Corporation, in fulfillment of Sand's sub-contract with the general contractor, Carlin-Atlas Joint Venture, to install the heating, ventilation, and air conditioning in the reconstruction and expansion of the Bus Terminal at the corner of 8th Avenue and 40th Street in New York City. Sand appeals from a grant of summary judgment dismissing its suit for breach of warranty on the contract calling for delivery of the chillers, from an earlier ruling dismissing Count IV of its amended complaint, and from a denial of its motion for reargument.

Sand sued Airtemp late in 1982 alleging the chillers were defective and that it expended considerable funds repairing them. Sand amended its complaint to include Count IV, which asserts that Airtemp is liable not only in damages to Sand, but also

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for damages to the Port Authority arising from problems with the defective chillers because, Sand alleged, the Port Authority may hold Sand liable for those same damages. The district court dismissed Count IV sua sponte and granted summary judgment in favor of Airtemp on the other counts in Sand's complaint, holding that they were all barred by the statute of limitations. Because we think the district court overlooked a genuine issue of material fact that precludes the grant of summary judgment, we reverse and remand the case to it for further proceedings.


Sand asserts it entered into the 1977 contract with Airtemp for four motor driven hermetic centrifugal chillers, which constituted a cooling system, and that under the contract accessories and services were also to be provided. Sand sent its purchase order form--dated June 6, 1977 and marked job number 1208-AA--to Airtemp for the four chillers. The order was received by Airtemp a week later, as indicated by a stamp on its face. In reply, Airtemp sent Sand an invoice dated March 1, 1984 for one of the chillers, referencing Sand's purchase order number 1208-AA. This is the only document acknowledging Sand's order.

All four chillers were shipped by Airtemp to Sand's agent, Associated Rigging & Hauling Corp., between January and March, 1978. One of them (chiller # 4) was not tested prior to being shipped because by the time it was ready to be tested Airtemp was in the process of relocating its testing facilities from Kentucky to Edison, New Jersey. In November 1978 chiller # 4 was sent--at Airtemp's expense and direction--from Associated Rigging & Hauling to Airtemp's Edison plant for a test run. After testing the chiller, Airtemp shipped it back to Associated Rigging & Hauling in January, 1979.

The general contractor, Carlin-Atlas, did not start up any of the chillers until the middle of 1980. Sand states that shortly after being started the chillers exhibited defects. When it contacted Airtemp regarding these problems, Airtemp refused to perform any repair work without additional payment. As a result, Sand made its own repairs and withheld $10,000 of the purchase price. The Port Authority officially accepted the equipment on May 23, 1981.


On December 16, 1982 Sand sued Airtemp's parent corporation, Fedders Corp., in the Supreme Court of New York County for damages arising out of the defects in the chillers. The parties agreed to dismiss the action without prejudice to allow Sand to bring its suit in federal court, and further stipulated that the action be deemed to have been commenced on December 16, 1982 for statute of limitations purposes. After Sand brought its suit in the United States District Court for the Southern District of New York (Cooper, J.), Airtemp asserted the limitations bar and counterclaimed for the withheld $10,000.

In December 1983 the Port Authority told Carlin-Atlas it was liable for approximately $650,000 in expenses incurred as a result of the defective chillers. On December 16, 1984 Carlin-Atlas and the Port Authority signed an agreement of settlement and general release under which the Port Authority agreed to limit its claim against Carlin-Atlas for damages to the amount:

if any, finally and unappealably awarded and received by [Carlin-Atlas'] subcontractor, H. Sand & Company, in their pending lawsuit against the centrifugal chiller manufacturer for damages, but only insofar as the award is ... exclusively based upon the claim or potential claim of the Contractor for damages against H. Sand either under a theory of indemnity to the Contractor or otherwise ... minus 25% of the amount of...

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