Chase Manhattan Bank, NA v. T & N PLC

Decision Date18 October 1995
Docket NumberNo. 87 Civ. 4436 (JGK).,87 Civ. 4436 (JGK).
Citation905 F. Supp. 107
PartiesThe CHASE MANHATTAN BANK, N.A., Plaintiff, v. T & N PLC (formerly known as Turner & Newall PLC and Turner & Newall Limited), Defendant and Third-Party Plaintiff, v. SKIDMORE, OWINGS & MERRILL and Turner Construction Company (Inc.), Third-Party Defendants.
CourtU.S. District Court — Southern District of New York

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Kent T. Stauffer, Robert R. Elliot III, Janis G. White, Michael A. O'Connor, The Chase Manhattan Bank, N.A. Litigation Division, New York City, Arthur L. Liman, Martin Flumenbaum, Eric S. Goldstein, Robert N. Kravitz, Jay K. Musoff, Adam C. Silverstein, Paul, Weiss, Rifkind, Wharton & Garrison, New York City, for plaintiff.

Paul J. Hanly, Jr., Kenneth E. Warner, Blake Perkins, Charles E. Boulbol, Jayne Conroy, Michael T. Zimmerman, Coblence & Warner, New York City, for defendant.

OPINION AND ORDER

KOELTL, District Judge:

The Chase Manhattan Bank, N.A. ("Chase") brought this action seeking to recover the costs of abatement and removal of Sprayed Limpet Asbestos ("SLA") fireproofing manufactured by the defendant T & N plc ("T & N") and installed at One Chase Manhattan Plaza ("One CMP"), a building owned by Chase. Chase asserts causes of action for breach of express and implied warranty, negligence, strict liability, fraud, restitution, indemnity, and nuisance, and claims compensatory damages in excess of $100 million, punitive damages of $100 million, costs and attorney's fees, and such other relief as the Court may deem proper. Chase commenced this action in June 1987 during the one-year period provided for commencement of otherwise time-barred claims pursuant to the Toxic Tort Revival Act, 1986 N.Y.Laws, ch. 682, § 4 (the "Revival Act"). T & N now moves for summary judgment on each and every cause of action on various grounds.

For the reasons that follow, T & N's motion is granted in part and denied in part.

I.

Summary judgment may not be granted unless "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 106 S.Ct. 2505, 2509-10, 91 L.Ed.2d 202 (1986); Gallo v. Prudential Residential Servs. Ltd. Partnership, 22 F.3d 1219, 1223 (2d Cir.1994). "The trial court's task at the summary judgment motion stage of the litigation is carefully limited to discerning whether there are any genuine issues of material fact to be tried, not to deciding them. Its duty, in short, is confined at this point to issue-finding; it does not extend to issue resolution." Gallo, 22 F.3d at 1224.

The moving party bears the initial burden of "informing the district court of the basis for its motion" and identifying the matter that "it believes demonstrates the absence of a genuine issue of material fact." Celotex, 477 U.S. at 323, 106 S.Ct. at 2552. The substantive law governing the case will identify those facts which are material and "only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment." Anderson, 477 U.S. at 248, 106 S.Ct. at 2510. In determining whether summary judgment is appropriate, a court must resolve all ambiguities, and draw all reasonable inferences against the moving party. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 1356, 89 L.Ed.2d 538 (1986) (citing United States v. Diebold, Inc., 369 U.S. 654, 655, 82 S.Ct. 993, 994, 8 L.Ed.2d 176 (1962)); see also Gallo, 22 F.3d at 1223.

If the moving party meets its burden, the burden shifts to the nonmoving party to come forward with "specific facts showing that there is a genuine issue for trial." Fed. R.Civ.P. 56(e). With respect to the issues on which summary judgment is sought, if there is any evidence in the record from any source from which a reasonable inference could be drawn in favor of the nonmoving party, summary judgment is improper. See Chambers v. TRM Centers Corp., 43 F.3d 29, 37 (2d Cir.1994).

II.

T & N moves for summary judgment on Chase's causes of action for breach of express and implied warranty. T & N argues that the breach of warranty claims are time-barred because they accrued on the date of delivery of the Sprayed Limpet Asbestos fireproofing and are not revived by the Toxic Tort Revival Act.

Under New York law, U.C.C. § 2-725 governs causes of actions for breach of warranty for the sale of goods. Heller v. U.S. Suzuki Motor Corp., 64 N.Y.2d 407, 410, 488 N.Y.S.2d 132, 133, 477 N.E.2d 434, 435 (1985). Section 2-725 provides:

(1) An action for breach of any contract for sale must be commenced within four years after the cause of action has accrued....
(2) A cause of action accrues when the breach occurs, regardless of the aggrieved party's lack of knowledge of the breach. A breach of warranty occurs when tender of delivery is made, except that where a warranty explicitly extends to future performance of the goods and discovery of the breach must await the time of such performance the cause of action accrues when the breach is or should have been discovered.

N.Y.U.C.C. § 2-725. Where there is no allegation that any warranty of future performance has been made, accrual based on discovery of the breach is inapplicable, see Nassau Roofing & Sheet Metal Co., Inc. v. Celotex Corp., 74 A.D.2d 679, 681, 424 N.Y.S.2d 786, 788 (3d Dep't 1980); see also Long Island Lighting Co. v. IMO Indus. Inc., 6 F.3d 876, 888 (2d Cir.1993) ("Section 2-725(2) provides that unless a warranty explicitly extends to future performance of the goods and discovery of the breach must await the time of such performance, a breach of the warranty occurs when tender of delivery of the goods is made."); Rosen v. Spanierman, 894 F.2d 28, 31-32 (2d Cir.1990), and a cause of action for breach of warranty must be commenced within four years of delivery of the goods. Heller, 64 N.Y.2d at 410, 488 N.Y.S.2d at 133, 477 N.E.2d at 435; Tavares v. Hobart Waste Compactor, Inc., 151 A.D.2d 251, 252, 542 N.Y.S.2d 170, 171 (1st Dep't 1989) ("A cause of action against a manufacturer or distributor accrues on the date that the party charged tenders delivery of the product.").

New York applies § 2-725 to cases involving claims of breach of warranty against manufacturers of asbestos-containing products. In 888 7th Ave. Assoc. Ltd. Partnership v. AAER Sprayed Insulations, Inc., 199 A.D.2d 50, 51, 605 N.Y.S.2d 25, 25 (1st Dep't 1993), the Appellate Division affirmed the dismissal of warranty causes of action under § 2-725 where delivery was made no later than 1970 and the suit was commenced in 1990. See id.; 888 7th Ave. Assoc. Ltd. Partnership v. AAER Sprayed Insulators, Inc., N.Y.L.J., Mar. 10, 1992, at 24 (Sup.Ct. N.Y.Co. Mar. 7, 1992). See also Farm Credit Bank of Louisville v. U.S. Mineral Prods. Co., 864 F.Supp. 643, 647 (W.D.Ky.1994) (dismissing asbestos fireproofing property damage claims for breach of warranty, citing cases in accord).

In Port Authority of New York and New Jersey v. Allied Corp., 91 Civ. 0310, 1995 WL 771399 (S.D.N.Y. Mar. 29, 1995), Judge Brieant applied New York law and dismissed breach of warranty claims for asbestos abatement and removal costs as time-barred under § 2-725. In Port Authority it was undisputed that there were no deliveries of any asbestos-containing products after June 1983, and because the action was commenced in June 1987, all of the breach of warranty claims had accrued over four years before and were therefore time-barred. See id.

In the present case, Chase alleges that the SLA was installed in One CMP beginning in or about 1959. (See Am.Compl. ¶ 27.) Chase disputes that all delivery of SLA was completed in 1959, asserting that delivery "continued into the 1960's." (Pl.'s 3(g) Stmt. ¶¶ 13, 22.) Even assuming that the term "1960's" includes the entire decade, the breach of warranty claims would have accrued no later than December 31, 1969.1 Because the four-year statute of limitations would have run by 1975, the breach of warranty claims are time-barred.

Chase argues that the Toxic Tort Revival Act applies to the breach of warranty claims and revives them in spite of the running of the limitations period. The Toxic Tort Revival Act revives "every action for personal injury, injury to property or death caused by the latent effects of exposure to ... asbestos ... within property which is barred as of July 1, 1986...." 1986 N.Y.Laws, ch. 682, § 4. Such actions were revived for one year and it is undisputed that, if these claims were revived by the Toxic Tort Revival Act, they were timely filed in this action which was commenced in June 1987. There is no express provision in the Revival Act, however, that includes claims for breach of warranty or breach of contract. Because the warranty claims are neither personal injury claims nor claims for death, for Chase to prevail, a breach of warranty claim must be included within the term "injury to property."

There are no reported decisions by a New York State court indicating whether the Toxic Tort Revival Act revives breach of warranty claims. The issue was not reached by Judge Sklar in 888 7th Ave. because the suit there was commenced in 1990 and was not a Revival Act suit.

A federal court sitting in diversity must look to the decisional law of the forum state and the state constitution and statues. Erie R.R. Co. v. Tompkins, 304 U.S. 64, 78, 58 S.Ct. 817, 822, 82 L.Ed. 1188 (1938); Travelers Ins. Co. v. 633 Third Assoc., 14 F.3d 114, 119 (2d Cir.1994). Where the substantive law of the forum is ambiguous or uncertain, the federal court must strive to predict how the...

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