Album Graphics, Inc. v. Beatrice Foods Co.
| Decision Date | 31 July 1980 |
| Docket Number | No. 79-1183,79-1183 |
| Citation | 87 Ill.App.3d 338,42 Ill.Dec. 332,408 N.E.2d 1041 |
| Parties | , 42 Ill.Dec. 332, 30 UCC Rep.Serv. 53 ALBUM GRAPHICS, INC., Plaintiff-Appellant, v. BEATRICE FOODS CO. d/b/a Craig Chemical and Adhesive Co., Defendant-Appellee. |
| Court | United States Appellate Court of Illinois |
Hinshaw, Culbertson, Moelmann, Hoban & Fuller, Chicago (D. Kendall Griffith, Dan L. Boho, Chicago, of counsel), for defendant-appellee.
Plaintiff, Album Graphics, Inc., brought this action in the circuit court of Cook The trial court dismissed Counts I and II as being barred by written disclaimers of the two warranties and dismissed Count III as failing to state a cause of action in negligence. The three counts were dismissed with prejudice and the trial court found there was no just reason for delaying enforcement or appeal of its order. Accordingly, plaintiff brought this appeal pursuant to Supreme Court Rule 304(a) (Ill.Rev.Stat.1977, ch. 110A, par. 304(a)). On appeal, plaintiff contends that the trial court erred in dismissing the first three counts of the complaint.
[42 Ill.Dec. 334] County against defendant, Beatrice Foods Co. doing business as Craig Chemical and Adhesive Co., seeking damages based on four separate counts set out in the complaint. Count I alleged breach of an express warranty in a contact for the sale of goods. Count II alleged breach of an implied warranty of fitness for a particular purpose. Count III was based on negligence and Count IV on fraud.
We reverse the order as far as it dismissed Counts I and II and remand for further proceedings. We affirm the order as far as it dismissed Count III.
All four counts of plaintiff's complaint alleged the same basic set of facts.
Plaintiff is an Illinois corporation in the business of designing, manufacturing, and assembling containers for cosmetics. Defendant is a Delaware corporation doing business in Illinois through its division Craig Chemical and Adhesive Co. As such, defendant manufactures and sells adhesives (glue).
In April 1977, an employee of defendant, on two separate occasions, visited plaintiff's place of business. On the first occasion he was told by plaintiff that plaintiff needed a new glue to use in the assembly of a number of newly designed cosmetic packages. Defendant's employee told plaintiff he would direct defendant to make a special glue to meet plaintiff's need and deliver the glue to plaintiff.
On the second occasion, defendant's employee came with a sample of a special glue called "Craigbond 3231-A." He told plaintiff that this glue was made specifically to meet plaintiff's need and that the glue would provide a permanent bond for the cosmetic packages. He instructed plaintiff in the use of the glue.
As a result of these two meetings, plaintiff purchased and used a quantity of the glue. Plaintiff sold a number of the new cosmetic packages to its customer. The packages fell apart and plaintiff had to recall and remake the packages with a different glue.
In Count I of plaintiff's complaint, plaintiff alleged that defendant had breached an express warranty made by its employee, which express warranty was any or all of the warranties defined in section 2-313 of the Uniform Commercial Code (U.C.C.) (Ill.Rev.Stat.1977, ch. 26, par. 2-313). In Count II, plaintiff alleged defendant had breached an implied warranty of fitness for a particular purpose as defined in section 2-315 of the U.C.C. (Ill.Rev.Stat.1977, ch. 26, par. 2-315).
Count III of plaintiff's complaint based recovery on negligence. In particular, plaintiff alleged defendant had committed the following negligent acts:
"(a) Failed to formulate correctly Craigbond 3231-A;
(b) Failed to test adequately Craigbond 3231-A;
(c) Failed to instruct adequately (plaintiff) in the proper use and application of Craigbond 3231-A."
Count IV based recovery on fraud and that count is not before us on appeal. All four counts demanded damages equalling plaintiff's losses which were over $300,000.
Defendant filed three separate motions attacking plaintiff's complaint. One was a motion to dismiss Counts I and II as being barred by express disclaimer of all warranties. Another was a motion to strike the ad damnum clauses in all four counts of the complaint and to limit damages to $534, the purchase price of the glue. The third was a motion to dismiss Counts III and IV as failing to state causes of action.
In support of its motion to dismiss Counts I and II and in support of its motion to Defendant asserted that it shipped the glue that was ordered by plaintiff in individual containers. On each container was a label which looked similar to the following:
[42 Ill.Dec. 335] strike and limit damages, defendant alleged the following facts supported by affidavit.
Defendant contended that this language became a part of the agreement and showed that there were no warranties made, express or implied, except for the warranty stated on the label, and showed that damages were limited to the purchase price of the glue.
Defendant also alleged that along with each shipment it sent an invoice stating the quantity delivered and the price due. This invoice was a half-page form, at the bottom of which was the following sentence in small print:
Defendant alleged, and plaintiff admitted, that plaintiff had paid the invoices sent and that plaintiff had not returned the glue containers unopened. Defendant contended that plaintiff had accepted this invoice term as part of the agreement because plaintiff paid the invoices and also because under the invoice term plaintiff was deemed to have accepted that term unless it returned the containers unopened. Defendant concluded that this invoice term proved that all the alleged warranties were disclaimed and that damages were limited to the purchase price of the glue. 1
In support of its motion to dismiss Counts III and IV of the complaint, defendant alleged, as far as Count III was concerned, that there is no cause of action recognized which allows a party to sue a manufacturer in negligence to recover purely economic losses resulting from a defective product.
After a hearing, the trial court dismissed Counts I and II of the complaint as being barred by the express disclaimers of warranty found on the labels and the invoices. The trial court denied the motion to dismiss Counts III and IV. Upon defendant's insistence, the trial court also ruled on the motion to strike the ad damnum clauses and to limit damages to $534. The trial court ruled that it was granted as far as it attacked Counts I and II, though the trial judge said he believed it was unnecessary to grant the motion as to Counts I and II since those counts had already been dismissed.
[42 Ill.Dec. 336] The trial court denied the motion as far as it attacked Counts III and IV.
Both parties moved the trial judge to reconsider his order. After a hearing, the trial court denied plaintiff's motion to reconsider and reaffirmed the dismissal of Counts I and II. The trial court granted defendant's motion to reconsider on Count III and dismissed Count III as failing to state a cause of action. The trial court made its order as to Counts I, II, and III final and appealable, and this appeal followed.
OPINIONPlaintiff first contends that the dismissal of Counts I and II was improper because the disclaimer clauses were not part of the agreement of the parties. Plaintiff argues that the contract between the parties was entered into before the containers of glue or the invoices were received by plaintiff. Plaintiff concludes that, at best, the labels on the containers and the term in the invoices represented defendant's attempt to modify the pre-existing contract which could not be done without express agreement of the parties.
Defendant counters plaintiff's contention with two distinct arguments. Defendant first asserts that the contract for sale was not made until delivery of the containers and invoices. Defendant seems to argue that the delivery of the containers and the invoices was an acceptance of plaintiff's offer to purchase the glue. It would appear that defendant contends that each delivery of glue and each delivery of an invoice established separate and distinct contracts. Defendant concludes that plaintiff's acceptance of delivery of the glue and payment of the invoices constituted acceptance of the disclaimer terms on the labels and the invoices. Based on this assumption, defendant makes the following argument to show that both express and implied warranties have been effectively excluded in this case.
Defendant argues that the implied warranty of fitness for a particular purpose was effectively excluded under section 2-316(2) of the...
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