Gem Jewelers, Inc. v. Dykman

• Decision Date: 05 April 1990
• Citation: 553 N.Y.S.2d 890,160 A.D.2d 1069
• Parties: , 12 UCC Rep.Serv.2d 721 GEM JEWELERS, INC., Respondent, v. Arthur DYKMAN, Doing Business as Columbia-Art Store Equipment Company, et al., Defendants, and Columbia-Art Store Equipment Company, Appellant.
• Court: New York Supreme Court — Appellate Division

Page 890

553 N.Y.S.2d 890

160 A.D.2d 1069, 12 UCC Rep.Serv.2d 721

GEM JEWELERS, INC., Respondent, v. Arthur DYKMAN, Doing Business as Columbia-Art Store Equipment Company, et al., Defendants and Columbia-Art Store Equipment Company, Appellant.

Supreme Court, Appellate Division,

Third Department.

April 5, 1990.

Hiscock & Barclay (Richard L. Weisz, of counsel), Albany, for appellant.

Edward S. Lomanto (Norbert J. Sherbunt, Amsterdam, of counsel), Gloversville, for respondent.

Before MAHONEY, P.J., and KANE, CASEY, LEVINE and MERCURE, JJ.

LEVINE, Justice.

Appeal from a judgment of the Supreme Court (Reilly, Jr., J.), entered November 9, 1988 in Fulton County, upon a verdict rendered in favor of plaintiff against defendant Columbia-Art Store Equipment Company.

In August 1984 plaintiff entered into an agreement with defendant Columbia-Art Store Equipment Company (hereinafter defendant) for the construction and installation of new, custom-designed jewelry cabinets, cases and fixtures for plaintiff's retail jewelry store in the City of Gloversville, Fulton County, for a total price of $36,000. The items were to be built in accordance with plans and specifications drawn by a California-based designer specializing in jewelry stores who had been retained to design the renovation of plaintiff's store. Cabinets, cases and fixtures were installed in the fall of 1984. After paying over $32,000 on the contract, plaintiff wrote to defendant's president in May 1986 complaining of the workmanship and of the fact that solid cherry hardwood cases were "ordered and paid * * * for", but "we received [only] veneered particle board". Defendant's president responded by denying that there were any defects and suggested that the unpaid balance was sufficient to cover any unsatisfactory items. Plaintiff subsequently brought this action for breach of contract, breach of warranty and fraud. Defendant counterclaimed for $3,000, representing the alleged unpaid balance on the contract. After dismissal of plaintiff's fraud cause of action, the case proceeded to trial, at the conclusion of which the jury found in plaintiff's favor, awarding $40,000 in damages and rejecting defendant's counterclaim. This appeal by defendant ensued.

Defendant initially contends that the jury's finding of liability was against the weight of the documentary evidence. We disagree. There was evidence adduced sufficient to support a finding that the agreement between the parties, as reflected in the final plans and specifications submitted to defendant by plaintiff's designer, called for cases and cabinets of solid cherry wood, rather than of veneered particle board, as was actually supplied. There was also testimony of the inferior quality of the items. While there was also contrary evidence on these issues, giving the jury the appropriate deference on questions of credibility we are unable to conclude that the verdict on liability cannot be supported by any fair interpretation of the evidence and, therefore, it should not be disturbed (see, Halvorsen v. Ford Motor Co., 132 A.D.2d 57, 60, 522 N.Y.S.2d 272 lv. denied 71 N.Y.2d 805, 529 N.Y.S.2d 76, 524 N.E.2d 430).

Next, defendant argues that reversal was required because Supreme Court erred in its instructions on damages. The parties had agreed that, since the contract items had been accepted by plaintiff, the damage issue was controlled by U.C.C. 2-714. Under that section of the UCC, a buyer can recover damages "for any non-conformity of tender the loss resulting * * * from the seller's breach as determined in any manner which is reasonable" (U.C.C. 2-714[1]. However, the measure of damages for breach of warranty "is the difference * * * between the value of the goods accepted and the value they would have had if they had been as warranted, unless special circumstances show proximate damages of a different amount" (U.C.C. 2-714[2]. The reference to value in U.C.C. 2-714(2) is to the fair market value of the goods (see, 4 Anderson, Uniform Commercial Code § 2-714:5, at 471 [3d ed].

In its instructions to the jury on plaintiff's breach of contract cause of action, Supreme Court charged alternative measures of damages, i.e., the "actual cost of making the goods meet the requirements of the contract", and "the difference in value between the goods as accepted and the value of the goods had they been in conformance with the contract". Charging damages for breach of warranty, the court adhered to the language of U.C.C. 2-714(2). Supreme Court then directed the jury to select a reasonable measure of damages. Defendant excepted to that portion of the charge which permitted the jury to award damages on the basis of cost to correct, and also excepted on the same ground to the court's supplemental charge on the general definition of damages, in response to the jury's request. Defendant claims that, in this case, the evidence only supported an award of damages based upon the difference between the value of the goods as accepted and their value had they been as warranted. It is asserted that Supreme Court's departure from this measure of damages in its charge was prejudicial, in that it invited the jury to compensate plaintiff on the basis of the replacement costs for solid wood cabinets and cases, an unacceptable standard under U.C.C. 2-714. Again, we disagree.

Although there is authority that where the nonconforming tender of accepted goods by the seller constitutes a breach of warranty, the proper measure of damages is that set forth in U.C.C. 2-714(2) (see, 4 Anderson, Uniform Commercial Code §...