Optical Cable Corp. v. Mass. Elec. Const. Co., 97-0371-R.

• Decision Date: 01 May 1998
• Docket Number: No. 97-0371-R.,97-0371-R.
• Citation: 21 F.Supp.2d 582
• Parties: OPTICAL CABLE CORPORATION, Plaintiff, v. MASS. ELECTRIC CONSTRUCTION COMPANY, Defendant.
• Court: U.S. District Court — Western District of Virginia

21 F.Supp.2d 582

OPTICAL CABLE CORPORATION, Plaintiff, v. MASS. ELECTRIC CONSTRUCTION COMPANY, Defendant.

No. 97-0371-R.

United States District Court, W.D. Virginia, Roanoke Division.

May 1, 1998.

Claude Marshall Lauck, Glenn, Feldman, Darby & Goodlatte, Roanoke, for Optical Cable Corporation, plaintiffs.

Sara Bugbee Winn, Woods, Rogers & Hazlegrove, P.L.C., William B. Poff, Woods, Rogers & Hazlegrove, P.L.C., Mark D. Loftis, Woods, Rogers & Hazlegrove, P.L.C., Roanoke, Kieran B. Meagher, City, Hayes, Meagher & Dissette, P.C., Boston, MA, for Mass. Electric Construction Co., defendants.

MEMORANDUM OPINION

KISER, Senior District Judge.

In this declaratory judgment action, plaintiff, Optical Cable Corporation ("Optical"), seeks to establish its warranty obligations and rights in connection with goods sold to defendant, Massachusetts Electric Construction Company ("Mass.Electric"). Optical seeks a declaration that it is bound only by the warranty provision contained in its Standard Terms and Conditions, and not by the Guarantee of Work provision which Mass. Electric alleges was incorporated into the contract. Optical also seeks a declaration that it has no present or future warranty obligations to Mass. Electric. Complaint at ¶ 7.

Since 1996, Mass. Electric has claimed that it is entitled to certain warranty protections for the goods it purchased from Optical. Optical argues that the actual warranty is far more limited than Mass. Electric contends. Optical moved for summary judgment. After Optical filed this motion for Summary Judgment, Mass. Electric filed a counterclaim. In its counterclaim, Mass. Electric asserts claims for breach of contract, breach of express and implied warranties, strict liability, negligence, and indemnity.

Jurisdiction over both the claim and the counterclaim is based upon 28 U.S.C. § 1332. Mass. Electric is a Massachusetts corporation, and Optical is a Virginia Corporation. The amount in controversy exceeds $75,000.00.

Before me now is plaintiff's motion for summary judgment, defendant's motion for change of venue, and defendant's motion to strike portions of plaintiffs affidavits. The parties have fully briefed the issues involved and have presented oral argument. The motions are therefore ripe for disposition. For the reasons contained herein, plaintiff's motion for summary judgment is DENIED, defendant's motion for change of venue is DENIED, and defendant's motion to strike portions of plaintiff's affidavits is DENIED.

I. BACKGROUND

Mass. Electric, which maintains its principal place of business in Boston, Massachusetts, engages in the business of electric construction. Optical is a Virginia Corporation that manufactures and sells fiber optic cable from its facility in Roanoke, Virginia.

In the early 1990's, the Bay Area Regional Transit District ("BART") was seeking to install an automatic train control system for its subway in the San Francisco Bay Area of California. The project was known as BART 93YF-150. General Railway Signal was the general contractor on the project. In 1992, Mass. Electric began formulating a bid to be the subcontractor that would actually install the automatic train control system.

Optical apparently communicated with BART in an attempt to persuade BART to set and choose specifications for the fiber optic cable which would increase the likelihood that Optical's cable would be used by the electrical subcontractor. See Huybrechts affidavit at ¶¶ 2, 4. Mass. Electric asserts that the relationship between BART and Optical was more involved. According to Mass. Electric, Optical informed Mass. Electric officials that the BART contract had been written as a "proprietary specification" for Optical's fiber optic cable. This would mean that the cable specifications had been written in such a way as to exclude all cable manufacturers except for Optical. Breen Affidavit at ¶ 7. Optical denies this contention.¹ As noted by Optical, public contracts such as the BART project generally allow cable "of equal type." Melson deposition at 11. Thus, a competitor of Optical could have provided the cable. Id.; see also Huybrechts affidavit at ¶ 4.²

In 1992, Optical was involved in efforts to sell cable for use in various BART projects, including 93YF-150. See Huybrechts affidavit at ¶ 2. Optical, through its inside sales force and independent sales representatives, initiated contacted with Mass. Electric. Breen affidavit at ¶ 6. Silvaco was the independent sales representative involved in BART 93YF-150.

In order to bid for the installation subcontract, Mass. Electric had to take bids from prospective sub-sub-contractors, such as Optical, for the provision of the fiber optic cable to be used in the project. In addition to Optical, Mass. Electric acquired a quote for fiber optic cable from Chromatic. Optical also supplied a quote for fiber optic cable to Fischbach & Moore, a competitor of Mass. Electric that was also bidding on the installation sub-contract. On March 12, 1992, Fischbach & Moore provided Optical with the final specifications for the fiber optic cable to be used in the BART 150 project.³ See Mass. Electric Exhibit 1.

On March 23, 1992, Silvaco contacted Optical, requesting that a quotation for 125,000 feet of fiber optic cable be sent to Mass. Electric.⁴ See Mass. Electric Exhibit 2. Optical sent the quote directly to Mass. Electric that same day.⁵ See Mass. Electric Exhibit 5. The first page included the quoted price which was $1.73 per foot of 7-channel cable.⁶ The first page also included provisions that any order would be FOB Roanoke and subject to a charge for up to 10% overage.⁷ The first page also stated that Optical's "Standard Terms and Conditions" applied to any resulting order and that there were no exceptions to the Standard Terms and Conditions. The Standard Terms and Conditions were attached to the back of the May 23, 1992 fax.⁸

Optical's Standard Terms and Conditions restated that any shipment of cable would be FOB Roanoke and would be subject to a 10% overrun charge on all custom fabricated cables. Among several other provisions, the Standard Terms and Conditions included a warranty clause:

LIMITED WARRANTY: 90 days (from invoice date) against defects in materials and workmanship. [Optical]'s responsibility is limited to repair or replacement and only when returned to the [Optical] Facility under an [Optical] issued RMA number at Buyer's expense.

There is uncertainty in the evidence as to exactly what happened between March 23 and June 10, 1992. It is undisputed that at some point between those dates Mass. Electric informed Optical that it had received a lower quote for fiber optic cable from Chromatic. Optical contends that this occurred prior to March 25 and that on that day it sent Mass. Electric a revised quote of $0.97 per foot for the cable. Plaintiff's Memorandum in Support of Summary Judgment at 6; Booze affidavit at ¶ 4; Huybrechts affidavit at ¶ 7.

The evidence does not bear out that conclusion, however. The exhibits and depositions indicate that Optical did provide Mass. Electric with a revised quote on March 25, 1992. That revised quote, however, was $1.68 for 7-channel cable and $1.09 for 4-channel cable. See Mass. Electric Exhibit 8. Mass. Electric admitted in its brief that it received Optical's Standard Terms and Conditions with the March 25 fax. See Brief in Opposition to Plaintiff's Motion for Summary Judgment at 5 n.4. The evidence further indicates that Optical provided the $0.97 per foot quote for 125,000 feet of 4-channel fiber optic cable on June 10, 1992. See Mass. Electric Exhibit 16. It would seem, therefore, that Mass. Electric informed Optical about Chromatic's lower bid between March 25 and June 10.

The June 10, 1992 fax from Optical to Mass. Electric included the statement that Optical's Standard Terms and Conditions applied and the statement that there were no exceptions to these Standard Terms and Conditions. The fax also included, on the cover page, the FOB Roanoke and 10% overrun terms. The complete list of Standard Terms and Conditions, including the warranty provision, was not attached to this fax, however.

Subsequently on June 10, 1992, Mass. Electric claims to have sent a purchase order to Optical for 125,000 feet of fiber optic cable at $0.97 per foot.⁹ See Mass. Electric Exhibit 18. Mass. Electric claims that it placed a verbal hold on the order, however. Murphy affidavit at ¶ 4.¹⁰ Optical denies ever receiving a purchase order from Mass. Electric on or around June 10, 1992.

Mass. Electric's purchase order was numbered 10084-1. It listed the job name as BART Contract 93YF-150. It also stated that the cable was to be shipped FOB job site and that there was no overrun tolerance. The purchase order also stated that Optical was to furnish the fiber optic cable "complete and in strict compliance with plans and specifications. All material shall be furnished in strict accordance with contract documents, including plans and specifications and all addenda, and subject to review of approving authorities." Specifications for the fiber optic cable were attached, but the BART Contract 93YF-150 was not attached.¹¹

Mass. Electric claims that the above language incorporated the BART 93YF-150 general contract into the contract between Mass. Electric and Optical. Brief in Opposition to Plaintiff's Motion for Summary Judgment at 5-6; Murphy affidavit at ¶¶ 7-9. The BART Contract 93YF-150 contains a provision which required any legal action in this matter to be filed in the Northern District of California and resolved pursuant to California law. Murphy affidavit Exhibit C. The BART contract also contains a warranty provision which requires equipment, materials and labor to be warranted for three years after final acceptance of the project by the owner, or two years after the start of revenue service for an individual extension of train lines, whichever occurred later ("the Guaranty of Work provision")...