Chase Resorts, Inc. v. Johns-Manville Corp.

• Decision Date: 29 June 1979
• Docket Number: No. 77-1115C(1).,77-1115C(1).
• Citation: 476 F. Supp. 633
• Parties: CHASE RESORTS, INC., and Four Seasons Lakesites, Inc., Plaintiffs, v. JOHNS-MANVILLE CORPORATION, a New York Corporation and Johns-Manville Sales Corporation, a Delaware Corporation, Defendants.
• Court: U.S. District Court — Eastern District of Missouri

476 F. Supp. 633

CHASE RESORTS, INC., and Four Seasons Lakesites, Inc., Plaintiffs, v. JOHNS-MANVILLE CORPORATION, a New York Corporation and Johns-Manville Sales Corporation, a Delaware Corporation, Defendants.

No. 77-1115C(1).

United States District Court, E. D. Missouri, E. D.

June 29, 1979.

Dempster K. Holland, Thomas, Busse, Goodwin, Cullen, Clooney & Gibbons, St. Louis, Mo., for plaintiffs.

Eugene K. Buckley, Evans & Dixon, St. Louis, Mo., for defendants.

MEMORANDUM

WANGELIN, District Judge.

This case arose out of the sale of an automatic watering system (hereafter "Binar System") for an 18 hole golf course owned by plaintiff Four Seasons Lakesites, Inc. and operated by plaintiff Chase Resorts, Inc. Defendant Johns-Manville Sales Corporation is the successor corporation of the company which originally sold plaintiffs the Binar System. Defendant Johns-Manville Corporation is the parent corporation of Johns-Manville Sales Corporation.

Plaintiffs' cause of action is for breach of express and implied warranties allegedly made in connection with the sale of the Binar System and for fraud.

The operation of the Binar System can briefly be described as follows. An indoor central programming unit sends DC electrical impulses along underground wires to decoders located at the various watering locations. The decoder decodes the pulse signal from the central programming unit and contains a relay, which, according to the signal received, can either activate the solenoid within the decoder and which in turn activates the valve allowing water to escape, and/or the relay can pass the electrical impulse further down the line if the impulse was not coded for operation of the subject decoder.

The case was tried to the Court on September 18 through 21, 1978. After consideration of the testimony adduced at trial, the exhibits introduced in evidence, the briefs of the parties and the applicable law, the Court hereby makes and enters the following findings of fact and conclusions of law. Any finding of fact equally applicable as a conclusion of law is hereby adopted as such and conversely any conclusion of law applicable as a finding of fact is adopted as such.

Findings of Fact

1. Plaintiffs are both Missouri corporations with principal offices in the State of Missouri.

2. Johns-Manville Corporation is a New York corporation with its principal office in the State of Colorado.

3. Johns-Manville Sales Corporation is a Delaware corporation with its principal office in the State of Colorado.

4. In the early 1970's plaintiffs planned a golf course in Camden County, Missouri, and had the golf course designed by Robert Trent Jones, Inc., who was selected because of his national reputation. The designer specified an automatic irrigation system for the golf course and solicited bids from contractors for installation and supply of the system.

5. After soliciting and receiving bids from contractors the plaintiffs' President, Harold Koplar, decided to serve as his own general contractor. Plaintiffs purchased the materials for the automatic irrigation system directly from a Kansas supplier and hired a local water system installer to install the system.

6. The plaintiffs purchased some materials for the automatic irrigation system from Kuhn-Neuschafer, Inc. of Salina, Kansas, which in 1974 changed its name to the Landsco Corporation. These materials were for an automatic golf course watering system known as the Buchnar Binar Sprinkler System ("Binar System") which was manufactured during the period from August, 1970 to December 31, 1973 by Johns-Manville Irrigation Corporation.

7. Defendant Johns-Manville Corporation had nothing to do with the manufacture or sale or supply of this sprinkler system.

8. Plaintiffs did not purchase wire for the system from Kuhn-Neuschafer, Inc., but, obtained it directly from another source. The wire which plaintiffs obtained was two wire cable, 14/2 U.F. The 14/2 wire used by plaintiffs was not the type of wire called for in defendants' specifications, U.F. 14 gauge if the distance of the run with within 10,000 feet. 14/2 U.F. wire has insulation around both wires and a 1/32 inch PVC jacket. 14 U.F. wire is an insulated single conductor wire with a PVC jacket of a minimum thickness of 3/64ths of an inch. Because many of the decoders are buried underground, the wire used has a direct relationship upon the ability of the splice to withhold and resist the formation of moisture within the decoder assembly itself. 14/2 U.F. is not rated for underground burial where the outer jacket has to be taken off for a distance as it must be in making a connection from 14/2 U.F. wire to the decoding units.

9. Although Johns-Manville Sales Corporation supplied some installation instructions it did not supervise or control the installation of the system which is the subject of this lawsuit as such supervision was carried out by the contractor hired and selected by the plaintiffs.

10. Prior to installation defendant Johns-Manville Sales Corporation told plaintiffs that the wire was improper and that defendant could not approve it. After consulting with an employee of the architect selected by plaintiffs, plaintiffs decided to use the two wire cable.

11. Defendants' catalog contained an express warranty that equipment manufactured by Johns-Manville Sales Corporation was free from defects and materials and workmanship and limiting the liability of Johns-Manville Sales Corporation for failure to meet that warranty or any other warranty, express or implied, to replacement or repair of defective equipment. That warranty expressly stated that Johns-Manville Sales Corporation did not offer any warranty, express or implied, as to the length of service life of its equipment and specified that Johns-Manville Sales Corporation would not be liable for incidental or consequential damages. Plaintiffs had actual knowledge of this limitation of warranty in February of 1973, prior to the time the equipment manufactured by Johns-Manville Sales Corporation was shipped to plaintiffs.

12. Tender of delivery of the materials supplied by Johns-Manville Sales Corporation's predecessor was made on various occasions from March, 1973 through September, 1973.

13. The golf course went into operation in 1974. The plaintiffs thereafter experienced some problems with the system, particularly as a result of lightning, and Johns-Manville Sales Corporation supplied some replacement parts, without charge, in compliance with its limited warranty, in an effort to correct the problem.

14. Plaintiffs also complained of moisture in the decoders. This was due to the installation of the system rather than the manufacture or design of the decoders. The installation was faulty due to the use of two wire cable, which was not in compliance with defendants' specifications. The use of this two wire cable created a problem with splicing, and permitted moisture to get into the decoders. In addition, many of the splices made by plaintiffs' employees or plaintiffs' installer were made with a wire nut and were not waterproofed, thus permitting water to get into the system resulting in erratic operation.

15. Some valve diaphragms in the system also failed but this was due to the fact that the system was installed with excessive water pressure and was very likely contributed to by the existence of foreign objects in the system caused by breakage.

16. Other problems with the system were due to the fact that a control wire had been cut by unknown persons thus preventing power from reaching an end of the control zone; by the failure of plaintiffs to replace capacitors that were not working properly with others supplied by Johns-Manville Sales Corporation; and by the fact that plaintiffs' maintenance crew was using an improper pulse voltage to control the decoders.

17. The materials supplied by Johns-Manville Sales Corporation and his predecessors were merchantable and fit for the ordinary purposes for which such goods are used.

18. The materials supplied by defendant Johns-Manville Sales Corporation and its predecessors were not defective.

19. The problems experienced by the plaintiffs with the Binar were caused by the acts, conduct or omission of the plaintiffs or the installation contractor as outlined above.

20. Johns-Manville Sales Corporation did not expressly warrant that the system would not require maintenance and repairs and did not expressly warrant that lightning and water could not interfere with the operation of the system. The representation that the Binar was "water and lightning protected" did not warrant that the Binar was waterproof and lightning proof but it did warrant that defendant had taken steps to reduce the possibility that lightning and water would not interfere with the operation of the system, and the statement that the Binar would provide "years of trouble free performance" did not expressly warrant that no repairs or maintenance of the system would be required. The Binar System contains a lightning protector for the input power to the central programmers, an inductor or coil for additional lightning protection with a solid state device to back the inductor up. The lightning protection contained within this system originally sold plaintiffs utilized a spark gap...