Stelco Industries, Inc. v. Cohen

• Decision Date: 23 December 1980
• Citation: 182 Conn. 561,438 A.2d 759
• Court: Connecticut Supreme Court
• Parties: , 31 UCC Rep.Serv. 86 STELCO INDUSTRIES, INC. v. Sherman COHEN.

Page 759

438 A.2d 759

182 Conn. 561, 31 UCC Rep.Serv. 86

STELCO INDUSTRIES, INC. v. Sherman COHEN.

Supreme Court of Connecticut.

Argued Nov. 13, 1980.

Decided Dec. 23, 1980.

Daniel Green, Bridgeport, for appellant (plaintiff).

William B. Lewis, Riverside, for appellee (defendant).

Before COTTER, C.J., and SPEZIALE, PETERS, HEALEY and PARSKEY, JJ.

PETERS, Associate Justice.

This appeal arises out of a sale of building materials and supplies. The plaintiff seller, Stelco Industries, Inc., sued the defendant buyer, Sherman Cohen, to recover the unpaid balance of the purchase price of goods delivered to and accepted by the defendant. The defendant, by his answer, special defenses and counterclaim, put into issue the conformity of the goods and sought to recover damages incurred in their repair. The trial court found the issues for the seller on its complaint in the amount of $5934.99 plus interest, and for the buyer on its counterclaim in the amount of $4000. It therefore rendered a judgment in favor of the plaintiff for $1934.99 plus interest. The plaintiff has appealed.

Despite the brevity of the trial court's memorandum of decision, the basic facts about the underlying contract between the plaintiff and the defendant are reasonably clear. The buyer built a costly home in Greenwich for which the seller supplied much of the building materials. Before the present litigation, the buyer had already paid the seller some $63,000. The goods presently in dispute were properly billed in the amount of $5934.99. What was centrally in dispute was not the delivery of the goods, their acceptance or their price, but rather whether the goods were conforming goods or were defective.

The plaintiff raises four issues on this appeal. Did the trial court err: (1) in finding that the goods delivered by the plaintiff were defective? (2) in finding that the plaintiff had been notified that the goods were defective? (3) in finding that the defendant incurred reasonable repair costs of $4000? (4) in failing to award attorney's fees to the plaintiff?

Because the contract between the parties was a contract for the sale of goods, the law governing this transaction is to be found in article 2 of the Uniform Commercial Code. General Statutes § 42a-2-102. Under article 2, the rights and liabilities of the parties are determined, at least in part, by the extent to which the contract has been executed. The buyer's acceptance of goods, despite their alleged nonconformity, is a watershed. After acceptance, the buyer must pay for the goods at the contract rate; General Statutes § 42a-2-607 (1); and bears the burden of establishing their nonconformity. General Statutes § 42a-2-607 (4). Acceptance, even with knowledge of the nonconformity of the goods, does not, however, constitute an election to waive all claims with respect to the accepted goods. General Statutes § 42a-2-607 (2). The buyer who elects to keep nonconforming goods has a remedy in damages, § 42a-2-714, provided that he has given timely notice of breach to the seller, § 42a-2-607 (3)(a), and he may exercise that remedy by deducting all or any part of his claimed damages from any part of the unpaid contract price otherwise due to the seller under the same contract. General Statutes § 42a-2-717. See White & Summers, Uniform Commercial Code (2d Ed. 1980) § 8-2.

These legal principles furnish the background against which the plaintiff's claims on this appeal must be tested. The plaintiff does not challenge the trial court's conclusions of law concerning their applicability. Instead, the plaintiff's first three assignments of error contest the trial court's factual findings of defect, notice and repair costs. Our review of such claims is limited to a determination of whether the decision of the trier was clearly erroneous in light of the evidence and the pleadings in the whole record. Practice Book, 1978, § 3060D; Pandolphe's Auto Parts, Inc. v. Manchester, 181 Conn. 217, 222, 435 A.2d 24 (1980).

With regard to the finding of defects challenged by the plaintiff's first claim of error, there was testimony which the trier might have found credible that doors became warped and delaminated, that lumber was excessively knotty, and that other lumber shrank so as to cause mitered joints on specially constructed beams to come apart. This evidence was sufficient to support the finding that the seller had delivered goods which were, at least in part, nonconforming. It is important to note, in this connection, that a buyer of goods is entitled to recover damages for goods which, in breach of warranty, are not of merchantable quality; General Statutes §§ 42a-2-314 and 42a-2-714(2); by showing that they fail to conform to the contract "in any respect"; General Statutes § 42a-2-601. He does not have to meet the higher standard of showing that the nonconformity of the goods "substantially impairs (their) value to him," which is the statutory standard governing revocation of acceptance. General Statutes § 42a-2-608(1); see White & Summers, Uniform Commercial Code (2d Ed. 1980) § 8-3. We find no error in the trial court's determination that the defendant had sustained his burden of proof that the goods were not fully conforming and that the plaintiff was therefore in breach. See General Statutes § 42a-2-607(4).

With regard to the trial court's finding of notice, challenged by the plaintiff's second claim of error, there was similarly enough evidence to support that finding. There was testimony of complaints to John Sandor, the plaintiff's mill estimator, and to Paul Devon, the plaintiff's mill superintendent. They themselves acknowledged that they had received complaints, both from the defendant's workmen and from the defendant himself. The standard by which notice is measured for the purposes of § 42a-2-607(4) is not as rigorous a standard as that which governs notice of rejection under §§ 42a-2-602 and 42a-2-605. As the official comment to § 2-607 points out, and the cases have held, the reason that notification is required to preserve the buyer's remedy of damages for accepted goods is to alert the seller that the transaction is still troublesome rather than to particularize the buyer's entitlement to damages. See, e.g., Alafoss h. f. v. Premium Corp. of America, Inc., 599 F.2d 232, 235 (8th Cir.1979); Standard Alliance Industries, Inc. v. Black Clawson Co., 587 F.2d 813, 825-27 (6th Cir.1978); Automated Controls, Inc. v. MIC Enterprises, unpub'd memorandum, Civ. No. 76-0-389, 27 U.C.C. Rep. 661, 673-74 (D.Neb. July 31, 1978), aff'd per curiam, 599 F.2d 288 (8th Cir.1979); Carlson v. Rysavy, S.D., 262 N.W.2d 27, 29-30 (1978); Vintage Homes, Inc. v. Coldiron, 585 S.W.2d 886, 889 (Tex.Civ.App.1979); White & Summers, Uniform Commercial Code (2d Ed. 1980) § 11-10. Although...