Schulman Inv. Co. v. Olin Corp.
Decision Date | 26 September 1979 |
Docket Number | No. 78 Civ. 176 (CHT).,78 Civ. 176 (CHT). |
Citation | 477 F. Supp. 623 |
Parties | SCHULMAN INVESTMENT COMPANY, Plaintiff, v. OLIN CORPORATION, Defendant and Third Party Plaintiff, v. HABER & HENRY, INC., Tremco, Inc., Brisk Waterproofing Company, Inc., Thomas J. Mannino and Fraioli, Blum & Yesselman, Third Party Defendants. HABER & HENRY, INC., Fourth Party Plaintiff, v. SUPERINTENDENT OF INSURANCE OF the STATE OF NEW YORK as Rehabilitator of Empire Mutual Insurance Company and United States Fire Insurance Company, Fourth Party Defendant. |
Court | U.S. District Court — Southern District of New York |
Greenspan & Jaffe, White Plains, N. Y., for Schulman Investment Company; Leon J. Greenspan, White Plains, N. Y., of counsel.
Willkie, Farr & Gallagher, New York City, Wolf, Block, Schorr & Solis-Cohen, Philadelphia, Pa., for Olin Corporation; Howard C. Buschman III, New York City, of counsel.
This diversity action arises out of the construction of two office buildings owned by the plaintiff, Schulman Investment Company ("Schulman"). Schulman alleges that the glass curtain walls installed in the buildings by defendant Olin Corporation ("Olin") did not conform to the contract between the parties and were negligently designed and installed. Schulman charges Olin with breach of contract, breach of warranty, and negligence. In the motion before the Court, Olin moves for summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure ("Rules"). Olin contends that Schulman's claims are time-barred and that no cause of action for an implied warranty of fitness exists on the facts of this case. For the reasons discussed below, Olin's motion is denied.
In October 1971, Schulman and Olin entered into a written contract for the construction of glass curtain walls at the premises now known as "Nos. 5 and 6 Corporate Park Drive, White Plains, New York." Building No. 5 was completed in June 1973, and Building No. 6 was completed in June 1972.1 Olin performed some corrective and remedial work on both buildings in April 1973. Schulman alleges that between September 1973 and May 1974 it advised Olin of uncorrected defects. The repair and reconstruction work done by Olin was not completed until the summer of 1974. Olin received final payment on the contract in September 1974. In the spring of 1977, Schulman became aware that some of the glass in the curtain walls had shifted and cracked and had to be replaced. Schulman then hired an "expert curtain wall design consultant" who inspected the buildings and reported on the damage. According to Schulman, the defective installation of the curtain walls created latent defects in the buildings that could not be detected or cause actual damage until some time later when the glass was subjected to continuous cycles of temperature change during the year. Schulman therefore contends that the glass did not shift, and the buildings were not damaged, until the spring of 1975.
Schulman informed Olin of this damage in August 1977 and demanded that Olin perform the necessary repairs. Olin refused on the grounds that it could not be held responsible for any defects in the building about which it had not been previously notified. Schulman then arranged to have the defective curtain walls repaired and has allegedly incurred ever-increasing expenses exceeding $400,000. In January 1978 Schulman commenced this action against Olin to recover damages for breach of contract, breach of express warranty, breach of an implied warranty of fitness, and negligence. Olin has joined five third-party defendants: Haber & Henry, Inc., the glazing subcontractor; Tremco, Inc., the manufacturer of the glazing materials; Brisk Waterproofing; Thomas J. Mannino, the architect; and Fraioli, Blum & Yesselman, the structural engineers. Each of the third-party defendants has counterclaimed against Olin and cross-claimed against the others. Haber & Henry, Inc. has added its insurance carrier as a fourth-party defendant. Olin now moves for summary judgment on the grounds that (1) Schulman's contract and warranty claims are time-barred under the terms of the written agreement between the parties; (2) Schulman has no cause of action for breach of an implied warranty of fitness; and (3) Schulman's negligence claim is barred by the applicable New York statute of limitations because the cause of action accrued more than three years before the action was commenced.2
Rule 56(c) provides that summary judgment should be granted "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." The court must resolve any doubts in favor of the party opposing the summary judgment motion. SEC v. Research Automation Corp., 585 F.2d 31, 33 (2d Cir. 1978). In deciding whether to grant the motion, a district court "cannot try issues of fact; it can only determine whether there are issues to be tried." Id., citing American Mfrs. Mut. Ins. Co. v. American Broadcasting-Paramount Theatres, Inc., 388 F.2d 272, 279 (2d Cir. 1967). If summary judgment is denied, Rule 56(d) directs the court to "ascertain what material facts exist without substantial controversy and what material facts are actually and in good faith controverted."
The three claims made in defendant Olin's summary judgment motion will be discussed in turn. The disputed questions of fact surrounding particular issues cannot be resolved at this stage of the proceedings and make summary judgment inappropriate with respect to some claims. But because several "material factual issues are not in dispute, and furnish an adequate basis for the application of the proper legal principles," this Court may address some of the questions of law raised by Olin's motion. 6 Moore's Federal Practice ¶ 56.151.-0, at 56-398 (2d ed. 1976). In a contract action, such as the case at hand, where a defense is predicated upon an unambiguous and integrated written agreement, no genuine issue of fact might exist after applying the parol evidence rule. Id. at ¶ 56.1711, at 56-778 to 79. Similarly, a statute of limitations defense may turn on a question of law, not on a question of fact. Id. at ¶ 56.1758, at 56-1058. In keeping with the "policy favoring efficient resolution of disputes, which is the cornerstone of the summary judgment procedure," SEC v. Research Automation Corp., supra at 33, this Court will rule on those legal questions arising from the undisputed facts of the case.
Schulman's breach of contract claim alleges that the glass curtain walls erected by Olin failed to conform to the contract between the parties and were improperly designed and installed. Olin contends that the two contract provisions on which Schulman's suit is based contain terms limiting the time period in which Olin could be held responsible, and Schulman could sue, for damages resulting from allegedly defective work and services. Because the precise meaning of these provisions is critical to this dispute, they are quoted in full:
Affidavit of Plaintiff in Opposition to Defendant's Motion for Summary Judgment, Exhibit 2 (Schulman-Olin Contract).
Olin contends that Article III provides Schulman with an option to repair defective materials or workmanship at Olin's expense, including incidental damages; that...
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