A & A Mechanical Inc. v. Thermal Equipment Sales Inc.

• Decision Date: 23 July 1999
• Docket Number: 1998-CA-000807-MR
• Citation: 998 S.W.2d 505
• Parties: A & A MECHANICAL, INC., APPELLANT v. THERMAL EQUIPMENT SALES, INC., APPELLEE
• Court: Kentucky Court of Appeals

[1]	998 S.W.2d 505
[2]	A & A MECHANICAL, INC., APPELLANT; v.; THERMAL EQUIPMENT SALES, INC., APPELLEE
[3]	NO. 1998-CA-000807-MR
[4]	Kentucky Court of Appeals
[5]	APPEAL FROM FRANKLIN CIRCUIT COURT HONORABLE WILLIAM L. GRAHAM, JUDGE ACTION NO. 1994-CI-000557
[6]	July 23, 1999
[7]	Before: Buckingham, Huddleston, And Knopf, Judges.
[8]	Briefs For Appellant: H. Edwin Bornstein Ackerson, Mosley & Yann Louisville, Kentucky Oral Argument For Appellant: Robert L. Ackerson Louisville, Kentucky Brief For Appellee: Gregory P. Parsons and Anne E. Gorham Stites & Harbison Lexington, Kentucky Oral Argument For Appellee: Anne E. Gorham Lexington, Kentucky
[9]	The opinion of the court was delivered by: Knopf, Judge:
[10]	RENDERED: July 23, 1999; 2:00 p.m. TO BE PUBLISHED
[11]	OPINION AFFIRMING ** ** ** ** **
[12]	In 1992 the University of Kentucky (UK) undertook the renovation of some of the laboratory buildings on its Lexington campus. It awarded a contract for work on the laboratories' ventilation systems to A & A Mechanical, Inc. (A&A), the appellant. A&A in turn subcontracted with the appellee, Thermal Equipment Sales, Inc. (TES), which was to supply A&A with duct work and other materials. In April 1994, TES sued A&A for the alleged breach of their agreement, and by order entered March 24, 1998, *fn1 the Franklin Circuit Court awarded TES damages and attorney fees. Insisting that the trial court misconstrued, factually and legally, its agreement with TES, A&A appeals. We affirm.
[13]	In January 1993, during the bidding phase of UK's renovation project, TES sent a price list to A&A that included, among other prices, a quote of fifty-three thousand seventy-four dollars ($53,074.00) plus tax, for approximately nineteen thousand pounds (19,000 lbs.) of PVC coated duct and fittings and five hundred pounds (500 lbs.) of PVC coated "radioisotope stack and fittings." Soon thereafter, in February 1993, UK awarded the ventilation contract to A&A, and A&A in turn sent a purchase order to TES that provided in part as follows: Provide per plans, specs, addenda 1 and 2 and alternates 1 and 2 all round PVC coated ductwork and fittings including the radioisotope stack and fittings as found in but not exclusively in spec section 15810 for a total lump sum price of 53,074. [plus] Tax 3,184. [total] 56,238.
[14]	A sales representative of TES and A&A's project manager then met to discuss ordering and shipping details. They agreed that A&A would order specific sections of duct work as its needs became known, but would attempt to allow sufficient lead time for manufacturing. During the course of their Discussion, the two (2) men realized that each had based his estimate of the quantity of duct work that would be required on plans prepared by UK's engineers and that the estimates were in close agreement. Both were aware, moreover, that this was a rehabilitation project and so was certain to require some deviation from the plans in order to accommodate pipes, wiring, and other fixtures the plans did not represent.
[15]	A&A ordered duct work in May, July, and October 1993. TES passed the orders along to its manufacturer, who shipped the goods directly to A&A and billed TES. TES apparently then billed A&A. Following completion of the second order and shipment, A&A had been billed and had payed slightly less than forty thousand dollars ($40,000.00). In the course of sending A&A's third order to the manufacturer, TES realized that the order would exhaust and slightly exceed the fifty-six thousand dollar ($56,000.00) total price provided for in the purchase agreement. Concerned, TES contacted A&A to find out how near completion the project was. A&A then, in November and December 1993, prepared a fourth order listing its remaining requirements. That order, TES calculated, would add nearly nineteen thousand dollars ($19,000.00) to the estimated total cost of the duct work. TES thereupon informed A&A that it would not fill the fourth order without additional payment. In response, A&A insisted that its fourth order was contemplated by the original contract and demanded that TES supply the remaining goods. The ensuing stalemate culminated in A&A's obtaining duct work to complete the project from a third party and TES's filing suit.
[16]	Referring to both TES's bid sheet and A&A's purchase order, the trial court ruled that the agreement between TES and A&A was for a definite quantity of duct work at a definite total price. It found that, ultimately, the project required significantly more goods than had been agreed upon, and concluded that TES had fully performed and was entitled to recover the balance of the full contract amount. It further concluded that A&A's withholding payment for goods it had received justified TES's decision to cease performing. A&A takes issue with each of these propositions, but for the reasons discussed below, we are not persuaded that the trial court misconceived this agreement.
[17]	We begin our Discussion by noting that this case was tried by the circuit court sitting without a jury. It is before this Court upon the trial court's findings of fact and Conclusions of law and upon the record made in the trial court. Accordingly, appellate review of the trial court's findings of fact are governed by the rule that such findings shall not be set aside unless clearly erroneous. CR 52.01; Largent v. Largent, Ky., 643 S.W.2d 261 (1982). The trial court's Conclusions of law, however, including its interpretation of the written contract, are subject to independent appellate determination. Morganfield National Bank v. Damien Elder & Sons, Ky., 836 S.W.2d 893 (1992).
[18]	As the parties correctly observe, the supply contract at issue was a contract for the sale of goods and so is governed by Article Two of the Uniform Commercial Code (UCC), adopted in Kentucky effective as of July 1, 1960, at KRS Chapter 355.2. *fn2 To further its goal of encouraging and simplifying commercial transactions, the UCC is more liberal than was the common law in permitting open terms in a sales contract and in not requiring complete certainty or definiteness. *fn3 Under the code, even when certain terms are left open (such as those relating to price, time, and delivery), a contract for the sale of goods does not fail for indefiniteness or lack of mutuality if the parties have intended to make a contract and there is a reasonably certain basis for granting appropriate relief. KRS 355.2-204(3). The requirement that there be a basis for relief, however, necessitates that the contract provide a quantity term, for without such a term that basis is lacking. David J. Leibson and

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