Owens v. Patent Scaffolding Co.--Division of Harsco

• Court: United States State Supreme Court (New York)
• Writing for the Court: JOHN A. MONTELEONE
• Citation: 354 N.Y.S.2d 778,77 Misc.2d 992
• Parties: , 14 UCC Rep.Serv. 610 Walter OWENS and Catherine Owens v. PATENT SCAFFOLDING CO.--DIVISION OF HARSCO, etc.
• Decision Date: 08 March 1974

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354 N.Y.S.2d 778 77 Misc.2d 992, 14 UCC Rep.Serv. 610 Walter OWENS and Catherine Owens
v.
PATENT SCAFFOLDING CO.--DIVISION OF HARSCO, etc. Supreme Court, Special Term, Kings County, Part I. March 8, 1974.

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Levy & Levy, New York City, for plaintiffs by Allen Levy.

Townley, Updike, Carter & Rodgers, New York City, for defendants by Richard J. Codding, New York City.

JOHN A. MONTELEONE, Justice.

In these personal injury and loss of service actions, arising out of breach of warranties of fitness for use and merchantability, defendant moves to dismiss the complaint (CPLR 3211) on the ground that they are time barred.

Plaintiff Walter Owens was allegedly injured on July 1, 1969 by a fall from malfunctioning scaffolding equipment (owned by defendant and leased to plaintiffs' employer), delivered to the construction site on June 20, 1969 under a rental agreement. The summons and complaint were served on June 27, 1973--4 years and 7 days after delivery of the equipment.

Uniform Commercial Code (Sec. 2--725(1)) limits actions for breach of contract to four years. The cause accrues when the breach

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occurs (2--725(2) UCC) regardless of the [77 Misc.2d 993] aggrieved party's lack of knowledge of the breach. A breach of warranty occurs when tender of delivery is made. However, where a warranty explicitly extends to future performance of the goods, and discovery must await performance, the cause accrues when the breach is, or should have been, discovered.

Plaintiffs reject the contention that their causes are subject to the four year limitation, asserting that in any event if they are, the warranty 'explicitly extends to future performance of the goods and discovery of the breach must await the time of such performance' and therefore the cause accrued on July 1, 1969, date of the accident, when the breach was discovered.

Two issues are presented: (1) Are the causes subject to the four year time limitation of Sec. 2--725(1) UCC and if they are, (2) did they accrue on June 20, 1969 when tender of delivery of the goods was made or at the time of the accident on July 1, 1969, when the breach was discovered (Sec. 2--725(2) UCC).

Both parties agree that the scaffolding transaction involves an equipment lease, not a sale. But they disagree as to the effect of that fact, plaintiffs contending tht therefore Article 2 (Sec. 2--725 UCC) does not apply because that Article and its sections deal only with sales transactions, while defendant argues that chattel lease transactions are also covered.

'Unless the context otherwise requires, this Article (2) applies to transactions in goods' (Sec. 2--102 UCC). May we properly regard the scaffold equipment lease as 'transaction(s) in goods' without doing violation to the context. Sec. 1--102 tells us to liberally construe the Code 'to promote its underlying purposes . . . to simplify, clarify and modernize the law governing commercial transactions . . . permit continued expansion of commercial practices through custom, usage . . . (and) make uniform the law among the various jurisdictions.'

Extension of UCC's implied warranties to chattel leases is facilitated by pre-code decisions imputing such warranties to lessors (Murray, analogy of Article 2 of the Uniform Commercial Code, 39 Fordham Law Review, pp. 447, 449). The warranty sections of Article 2 in no way disturb those lines of case law growth which recognize that warranties need not be confined to sales contracts. They may arise in other circumstances also (Sec. 2--313 UCC, official comment 2).

[77 Misc.2d 994] In Hertz v. Transportation Credit, 59 Misc.2d 226, 298 N.Y.S.2d 392, reversed on other grounds, 64 Misc.2d 910, 316 N.Y.S.2d 585, an action for breach of warranty of equipment leases, the court determined that those leases come under Article 2. It said: 'It would be anomalous if this large body of commercial transactions (equipment leases) (was)

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subject to different rules of law than other commercial transactions which tend to the identical economic result' (p. 229, 298 N.Y.S.2d p. 395). In reaching that conclusion the court reasons that the term 'transactions' encompasses wider activities than 'sales' and was not carelessly chosen in making Article 2 applicable to 'transactions in goods.' (2--102 UCC) The 1955 Report of the Law Revision Commission (p. 363) reveals that 'property' or 'title' concepts are of negligible importance under Article 2. The Code considers the duties, rights and remedies arising from transactions as of primary importance relegating 'title' concept to lesser status than under common law and the Uniform Sales Act. The use in some sections, of the words 'contract for sale', and in others of the word 'contract' may mean that the scope of Article 2 is not limited solely to 'sales' transactions with 'title' and 'property' as their symbols. (Hertz v. Transportation, Supra.)

Citing Hertz, the court, in United States Leasing v. Franklin, 65 Misc.2d 1082, 319 N.Y.S.2d 531, an action on a chattel lease, applied the provisions of 2--302 UCC, (permitting the court to refuse to enforce an unconscionable contract) to the lease by denying plaintiffs' motion for summary judgment and calling for a trial so that the parties 'shall be afforded a reasonable opportunity to present evidence as to (contract's) commercial setting, purpose and effect to aid the court in facilitating a determination.'

In Sawyer v. Pioneer Leasing, 244 Ark. 943, 428 S.W.2d 46 (1968), an action on an ice machine lease, the court held that 2--316 UCC (requiring exclusion of implied warranty of merchantability to be mentioned in language and if in writing to be conspicuous) is applicable to the lease agreement.

Those cases applied...