Northern Contracting Co. v. Allis-Chalmers Corp., ALLIS-CHALMERS
| Decision Date | 19 December 1977 |
| Docket Number | No. 13145,ALLIS-CHALMERS,13145 |
| Parties | NORTHERN CONTRACTING COMPANY, a Minnesota Corporation licensed to do business in Arizona, Appellant, v.CORPORATION, a Delaware Corporation licensed to do business in Arizona, and Hugh T. Coplen, Appellees. |
| Court | Arizona Supreme Court |
Hill & Savoy by Dennis J. Curran, Phoenix, for appellant.
Evans, Kitchel & Jenckes, P. C. by David L. Beaugureau, Phoenix, for appellee Allis-Chalmers. Ronald G. Cooley, Phoenix, for appellee Coplen.
Plaintiff-Appellant, Northern Contracting Company, filed suit against defendants-appellees, Allis-Chalmers and Hugh T. Coplen, in the Superior Court of Maricopa County alleging damages of $17,346.44 from the sale of faulty butterfly valves to Northern for use in a water main project for the City of Phoenix. Upon motion of the defendants, the trial court entered summary judgment for the defendants and plaintiff appealed. We took jurisdiction pursuant to Rule 47(e)(5), 17A A.R.S., Rules of the Supreme Court.
We must answer only one question on appeal: whether the evidence before the court created a conflict which required that the motion for summary judgment be denied.
In January 1973, Northern ordered eight Model 150 FR, AWWA Class 150 B butterfly valves arranged for "burial service," from Allis-Chalmers through defendant Coplen, the factory representative in Phoenix. The valves cost between $8,789.00 and $10,911 each, depending upon the size of the valve. All negotiations were conducted by Coplen on behalf of Allis-Chalmers but the contract signed by the parties was a printed form contract furnished by Allis-Chalmers. The printed contract included a warranty on the subject goods for defects and promised remedy by Allis-Chalmers. Choice of remedy, i. e., repair or replacement, was left exclusively with Allis-Chalmers. Expenses incidental to the remedy were to be borne by the purchaser, Northern. Allis-Chalmers also disclaimed any liability other than that expressly provided by the warranty.
Northern alleged, however, that the purchase was induced by misrepresentations about the quality of the valves which Coplen made during the negotiations. According to Northern, Coplen had said that the valves would not have to be inspected or tested before installation because they would have been tested in conformance with the American Water Works Association (AWWA) standards before they left the factory. It was these assurances and not the printed warranty that Northern contends induced the decision to order from Allis-Chalmers.
Between 9 May and 17 August 1973, the valves were delivered to Northern's jobsite in Phoenix and stored there. Each valve was visually inspected when it was delivered. The factory packaging permitted inspection without opening and the valves remained in the packaging until they were installed during late summer 1973.
In March 1974, Dave Sing, an engineer for the City of Phoenix, who had observed the installation of the valves, conducted the line tests necessary for city approval of Northern's work. This was the first test of the valves since their delivery by Allis-Chalmers. All but two of the valves leaked during these tests and the city withheld approval and part of the payment for the project until the leaks were corrected. Northern contacted Allis-Chalmers regarding the leaks and a field representative was dispatched to the site in conformance with the warranty. To provide access to the valves for repairs, Northern had to dewater and excavate the line. Initially, the representative attempted to stop the leaks by means of calibration. This method was sufficient to fix all but one of the leaking valves. The final valve had to be removed from the line in order to repair a slipped seat within the valve. Northern excavated, removed, and reinstalled the faulty valve. On 6 May 1974, the line successfully passed the pressure and leakage tests.
The complaint was filed on 16 October 1974. Northern claimed as damages the expenses for excavation and reinstallation of the valves for repair and interest on the delay in payment by the city. The allegations of the complaint suggested that liability could be predicated on the theories of both warranty and fraudulent misrepresentation. Both Allis-Chalmers and Coplen moved for summary judgment. For consideration of the motion, the trial court had before it interrogatories Allis-Chalmers had submitted to Northern and supplemental answers made following a court order. Allis-Chalmers also submitted affidavits of employees in the Pennsylvania plant outlining the company's testing procedure and asserting that it conformed with the AWWA standards.
Allis-Chalmers employees asserted in the affidavits their personal knowledge of the testing procedures and that the procedures conformed to the standards. Exhibits were attached to each affidavit adding more detail to the assertions of the affidavits. AWWA shop testing standards for butterfly valves were included with the exhibits. "Checklists" were attached to the affidavits. Assuming the checkmarks and other markings were entered in the ordinary course and show that the tests were in fact administered, these sheets would indicate the proper tests were made and there was no leakage at that time.
In opposition to the motion, Northern submitted the affidavits of Dave Sing, engineer for the City of Phoenix, and of Quinn Hutchinson, a registered engineer. Both asserted that their experience with valves of the kind used in the project indicated that the valves would not have leaked if they had been tested properly at the factory.
The affidavit of Dave Sing reads as follows:
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