General Matters, Inc. v. Paramount Canning Co.

• Decision Date: 09 April 1980
• Docket Number: No. 79-588,79-588
• Citation: 382 So.2d 1262,28 U.C.C.Rep. 1031
• Parties: 28 UCC Rep.Serv. 1031 GENERAL MATTERS, INC., d/b/a York Associates, Appellant, v. PARAMOUNT CANNING COMPANY, Garden Gold Foods, Inc., and Suncoast Canning Corporation, Appellees.
• Court: Florida District Court of Appeals

Page 1262

382 So.2d 1262

28 UCC Rep.Serv. 1031

GENERAL MATTERS, INC., d/b/a York Associates, Appellant, v. PARAMOUNT CANNING COMPANY, Garden Gold Foods, Inc., and Suncoast Canning Corporation, Appellees.

No. 79-588.

District Court of Appeal of Florida, Second District.

April 9, 1980.

Charlie Luckie, Jr. and John W. Campbell of Macfarlane, Ferguson, Allison & Kelly, Tampa, for appellant.

John W. Frost, II, and Charles W. Dodson of Holland & Knight, Bartow, for appellees.

SCHEB, Judge.

A grocery retailer destroyed a shipment of allegedly defective canned grapefruit sections which it had purchased from York Associates, a food broker. The grapefruit had been canned by Suncoast Cannery Corporation and distributed by Paramount Canning Company. Neither York nor the retailer gave Suncoast or Paramount any notice that the goods were defective prior to their destruction. York agreed to indemnify the retailer for its losses and then sued Paramount and obtained a judgment for damages.

Despite its failure to notify Paramount prior to destruction of the goods, can York recover damages from Paramount for breach of implied warranty of merchantability? We hold that York's failure to notify Paramount bars it from any remedy. We reverse the judgment for York entered by the trial court.

During 1974 Suncoast canned and stored 3500 cases of the grapefruit sections. In April 1976 Paramount's agent, Dingfelder, looking for canned grapefruit, contacted Suncoast. Suncoast's agent told Dingfelder of the grapefruit canned in 1974 explaining, however, that it was nearing two years old. Paramount purchased the lot and sold it to York shortly thereafter. York, in turn, sold the goods to Country Club Markets, a grocery retailer in Minnesota, without informing Country Club of the age of the goods.

After Country Club had sold 1,675 cases of the canned grapefruit in its supermarkets, some of the cans developed swells. After several customer complaints, the Minnesota Department of Agriculture determined that "the product should not be sold for human food." ¹ At this point, Country Club, without notifying either Paramount or Suncoast, destroyed the remaining 1,825 cases. Country Club, the retailer, then billed York for its cost of the destroyed merchandise plus the cost of destruction. In response, York agreed to discount future purchases by Country Club until it had absorbed Country Club's losses.

York sued Paramount seeking damages for breach of implied warranty of merchantability alleging that the goods did not have a reasonable shelf life. Paramount filed a third-party complaint against Suncoast. Prior to trial Suncoast agreed to defend and indemnify Paramount in the action by York. Paramount, through Suncoast, answered and asserted that York was barred from recovery because neither it nor its purchaser, Country Club, notified Paramount of the alleged breach prior to destruction of the goods.

Following a nonjury trial the court entered judgment for York. It found that Paramount had breached its implied warranty to York as to those cans which were swollen at the time they were destroyed. Nevertheless, it limited York's recovery to the amount that York had actually given as a credit to Country Club at the time of trial because York had not joined Country Club as an indispensable party. The court further reduced that recovery since York had failed to notify Country Club of the age of the product, and because a percentage of the product was still marketable when Country Club destroyed it without notice.

On appeal York contends that the judgment should have compensated it for the full amount of its assumed obligation to Country Club. Paramount cross-appeals and argues that because neither Country Club nor York gave notice of the alleged breach until after destruction of the goods, York is barred from any remedy under Section 672.607(3)(a), Florida Statutes (1979) (U.C.C. § 2-607(3) (a) (1972 version)).

We address the cross-appeal first because our disposition of it obviates discussion of the merits of York's appeal. Section 672.607(3)(a), Florida Statutes (1979), provides that "(t)he buyer must within a reasonable time after he discovers or should have discovered any breach notify the seller of breach or be barred from any remedy." This notice requirement is a valid precondition of imposing liability on a seller of goods. ² Eastern Airlines, Inc. v. McDonnell Douglas Corp., 532 F.2d 957 (5th Cir. 1976); see Dunham-Bush, Inc. v. Thermo-Air Service, Inc., 351 So.2d 351 (Fla. 4th DCA 1977); Redman Industries v. Binkey, 49 Ala.App. 595, 274 So.2d 621 (1973); L. A. Green Seed Co. of Arkansas v. Williams, 246 Ark. 463, 438 S.W.2d 717 (1969). Further, the burden is on the plaintiff to show that he gave the required notice within a reasonable time. Standard Alliance Industries, Inc. v. Black Clawson Co., 587 F.2d 813 (6th Cir. 1978), cert. denied, 441 U.S. 923, 99 S.Ct. 2032, 60 L.Ed.2d 396 (1979); L. A. Green Seed Co. of Arkansas v. Williams, 246 Ark. 463, 438 S.W.2d 717 (1964). Here, the evidence disclosed that Country Club voluntarily destroyed the canned grapefruit in the latter part of July 1977. The first notice of the alleged breach to either Paramount or Suncoast was an August 1 letter from the president of York to Dingfelder of Paramount.

There are several important reasons for the notice requirement of Section 672.607(3)(a). The notice enables "the seller to make adjustments or replacements or to suggest opportunities for cure to the end of minimizing the buyer's loss and reducing the sellers' own liability to the buyer." The notice requirement also protects the seller's right to inspect the goods. J. White & R. Summers, Uniform Commercial Code § 11-9 at 344 (1972); see Note, Notice of Breach and the Uniform Commercial Code, 25 U.Fla.L.Rev. 520 (1973)....