General Dynamics Corp. v. Federal Pacific Elec. Co.
| Decision Date | 30 August 1985 |
| Citation | 20 Mass.App.Ct. 677,482 N.E.2d 824 |
| Parties | GENERAL DYNAMICS CORPORATION v. FEDERAL PACIFIC ELECTRIC COMPANY. |
| Court | Appeals Court of Massachusetts |
David R. Pierson, Boston, for plaintiff.
Timothy Q. Feeley, Boston (Robert D. Canty, Boston, with him) for defendant.
Before GREANEY, C.J., and BROWN and FINE, JJ.
In the first three months of 1973, three separate fires broke out in the main electrical switchboard of the S.S. Tillie Lykes, a Seabee class cargo vessel that had been built by the plaintiff, General Dynamics Corporation (General Dynamics), for Lykes Brothers Steamship Company, Inc. (Lykes Brothers). The main switchboard, 1 which is responsible for distributing electricity throughout the vessel, had been supplied to General Dynamics by the defendant, Federal Pacific Electric Company (Federal Pacific), pursuant to a written contract. Under the terms of the contract, Federal Pacific agreed to correct at its own expense, during the guarantee period (six months after the delivery of the vessel), any deficiency or deterioration in workmanship or material furnished by Federal Pacific under the contract, or any failure of any equipment or material to function as prescribed and intended by the technical specifications of General Dynamics' purchase order.
The first two fires, which occurred on January 3 2 and February 5, 1973, took place while the vessel, docked in the General Dynamics' shipyard in Quincy, was undergoing final preparations before delivery to Lykes Brothers. The February fire, which was the more serious of the two fires, severely damaged one of the center sections of the switchboard and knocked the switchboard out of operation for approximately ten days. When this switchboard is down, the vessel is in effect "dead in the water." Since the vessel was scheduled to be delivered to Lykes Brothers in March of 1973, General Dynamics' primary concern was to get the switchboard in operating condition as quickly as possible.
Indeed, immediately after the February 5th fire, General Dynamics called upon Robert Yundt, the local Federal Pacific sales representative who was responsible for the General Dynamics account. Yundt arrived at the Quincy shipyard that afternoon. Sometime thereafter, Paul Happel, an electrical engineer with General Dynamics who supervised the repair work on the switchboard following the February fire, asked Yundt to obtain replacement parts for the switchboard. Yundt then sought a purchase order from Eddie Gebauer, a buyer in General Dynamics' purchasing department, 3 but Gebauer did not know which parts had to be replaced. Yundt's response to Gebauer was that "the important thing is to get the ship back on schedule, so we'll replace the parts and then ... send you some billing afterwards." Moreover, Yundt testified at trial that both Happel and Gebauer told him that they would get a purchase order at a later date. 4 Apparently, no such purchase order was issued by General Dynamics following this fire. However, a General Dynamics report, dated February 8, 1973, includes the following notation: "Request vendor services [and] mat[eria]l required to repair main [switchboard]--Responsibility not determined."
On February 6, additional Federal Pacific personnel, including Douglas Ball, the engineer who designed the switchboard components for the General Dynamics' contract, arrived on the scene to investigate the cause of the blaze and to determine which switchboard components had to be replaced. Subsequently, Federal Pacific supplied General Dynamics with the necessary replacement parts and the switchboard was refurbished, cleaned, and tested by General Dynamics personnel under the supervision of two Federal Pacific field service engineers, Ted Jania and Ben Moore. On or about February 15, the switchboard was back in operation.
General Dynamics delivered the Tillie Lykes to Lykes Brothers on March 16, 1973. One week later, on March 23, a third fire broke out in the main electrical switchboard while the vessel was secured at the Todd Shipyards' dry dock in Galveston, Texas. The fire started after Lykes Brothers personnel had started the machinery for the vessel's barge elevator platform. Paul Happel arrived in Galveston the following day and conducted a complete examination of the switchboard. Various parts in section five (one of the center sections of the switchboard) were destroyed in the fire. The damage to the switchboard from the fire was very similar to the damage sustained from the February fire. In his report of this third fire, Paul Happel noted, "Advance ordering of material needed to rebuild switchboard was accomplished." In addition, Todd Shipyards' personnel were engaged to assist in the repair of the switchboard.
Douglas Ball and other Federal Pacific engineers arrived in Galveston on March 27 after being notified of the fire by General Dynamics. Ball recommended that certain other switchboard components be replaced. 5 The necessary replacement parts for the switchboard were supplied by Federal Pacific. Repair work was carried out by Todd Shipyards' personnel under the direction of Happel and Federal Pacific engineers. Final inspection of the switchboard was completed on April 12, 1973, and, four days later, the vessel departed for New Orleans.
Following the fires, there were various tests, discussions, and reports by the parties as to the cause of the Tillie Lykes's fires, but no agreement was reached. In particular, the parties met in Quincy on December 19, 1973, to discuss the cause of the fires. General Dynamics contended that there were design deficiencies in the switchboard, specifically in relation to the indicating light system. In contrast, Federal Pacific took the position, based on a report by Douglas Ball, dated November 21, 1973, that the fires were caused by contamination (dirt and other foreign material) in the switchboard. Subsequently, Federal Pacific refined its theory and claimed that contamination together with an overvoltage condition had caused the fires.
On January 10, 1974, Federal Pacific wrote to General Dynamics, summarizing its position on the Tillie Lykes's fires and enclosing two invoices for material and field service work furnished by Federal Pacific after the February and March fires. The invoices simply list various parts and their cost, and the cost for the services of its engineers. In the space provided for the purchase order number there is marked the word "verbal." By a letter dated January 23, General Dynamics acknowledged receipt of Federal Pacific's January 10 letter. On May 21, 1974, and August 27, 1974, Federal Pacific requested that General Dynamics approve and pay the two invoices. General Dynamics also timely notified and submitted invoices to Federal Pacific for Lykes Brothers' backcharge of General Dynamics as a result of the March fire. General Dynamics did not make payment on the invoices. Federal Pacific denied any responsibility for the backcharge.
On March 10, 1977, General Dynamics filed a complaint against Federal Pacific, seeking damages, based upon theories of breach of warranty and common law indemnity, for the costs it had incurred following the March fire. Federal Pacific answered and counterclaimed, seeking the price of the materials and services provided to General Dynamics after the February and March fires.
At the close of Federal Pacific's evidence and at the close of all the evidence, General Dynamics filed a motion for a directed verdict on Federal Pacific's counterclaim, which was denied. The case was submitted to the jury by way of general verdict slips. The jury found for Federal Pacific in the case-in-chief. On the counterclaim, the jury also returned a verdict for Federal Pacific in the amount of $63,170.39, the total amount of the two Federal Pacific invoices. On December 21, 1983, judgment was entered for Federal Pacific in the case-in-chief, and on its counterclaim in the amount mentioned with interest computed from May 2, 1977, the date Federal Pacific's answer and counterclaim were originally filed. General Dynamics' motion for judgment notwithstanding the verdict (on Federal Pacific's counterclaim) was denied. In addition, Federal Pacific, by motions to amend the judgment, asserted that the interest on its award should run from January 10, 1974, the date upon which it forwarded the invoices to General Dynamics. The motions were denied.
On appeal, General Dynamics asserts (1) that there was insufficient evidence of Federal Pacific's alleged damages to allow the jury to find in Federal Pacific's favor on the counterclaim and, hence, General Dynamics' motions for a directed verdict and for judgment notwithstanding the verdict should have been allowed and (2) that the judge erred in refusing to incorporate in his charge two requested jury instructions concerning Federal Pacific's burden of proof on its counterclaim. Federal Pacific has also appealed, claiming error in the denial of its postjudgment motions to correct the interest award.
General Dynamics' motions for a directed verdict and for judgment n.o.v. were properly denied. The jury could have found or fairly inferred from the evidence most favorable to Federal Pacific (a) that Federal Pacific had agreed to supply materials and services to General Dynamics upon the latter's request following the February and March fires, (b) that Federal Pacific reasonably expected payment for the same, and (c) that General Dynamics had or should have had reason to know that payment was expected. See LaChance v. Rigoli, 325 Mass. 425, 427, 91 N.E.2d 204 (1950); Douillette v. Parmenter, 335 Mass. 305, 307, 139 N.E.2d 526 (1957); Mazeikis v. Sidlauskas, 346 Mass. 539, 543-544, 194 N.E.2d 409 (1963); LiDonni, Inc. v. Hart, 355 Mass. 580, 583 246 N.E.2d 446 (1969); Anisgard v. Bray, 11 Mass.App. 726, 729, 419 N.E.2d 315 (1981); Robert Trent...
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