Superior Boiler Works, Inc. v. R.J. Sanders, Inc.

• Decision Date: 29 April 1998
• Docket Number: No. 96-414-A,96-414-A
• Citation: 711 A.2d 628
• Parties: 36 UCC Rep.Serv.2d 1031 SUPERIOR BOILER WORKS, INC. v. R.J. SANDERS, INC. ppeal.
• Court: Rhode Island Supreme Court

Page 628

711 A.2d 628

36 UCC Rep.Serv.2d 1031

SUPERIOR BOILER WORKS, INC. v. R.J. SANDERS, INC.

No. 96-414-Appeal.

Supreme Court of Rhode Island.

April 29, 1998.

Elizabeth McDonough Noonan, William Mark Russo, Providence, for Plaintiff.

William Kenneth O'Donnell, Providence, for Defendant.

Before WEISBERGER, C.J., and LEDERBERG, FLANDERS and GOLDBERG, JJ.

OPINION

FLANDERS, Justice.

In this case we consider the enforceability of a seller's original estimated time for it to ship its manufactured product to a commercial buyer. More specifically, the dispositive issue is whether the seller's original estimate of a four-week shipping period should be deemed binding upon the seller (1) when the buyer's ultimate order for the goods was not released until later in the seller's season, (2) when the seller's shipment conditions materially changed in the interim, (3) when the seller's final acceptance of the buyer's order specified a longer shipping date, and (4) when the buyer failed to come forward with evidence indicating that this longer shipping date was commercially unreasonable. For the reasons discussed below, we hold that the earlier estimate did not become a part of the ultimate sales contract in this case and, therefore, it was unenforceable against the seller.

The buyer, defendant R.J. Sanders, Inc. (Sanders), appeals from a Superior Court motion justice's entry of summary judgment in favor of the seller, plaintiff Superior Boiler Works, Inc. (Superior). Superior sued Sanders for breach of contract and, alternatively, for quantum meruit in connection with Superior's delivery of three boiler units to Sanders for a purchase price of $145,827. Sanders contends that it was error to grant summary judgment to Superior. However, in opposing Superior's summary-judgment motion, Sanders failed to adduce competent evidence showing that the longer shipping date was commercially unreasonable. As a result we affirm the Superior Court's judgment and deny this appeal.

Facts and Travel

The following facts appear from the materials submitted in support of and in opposition to Superior's motion for summary judgment. Sanders was a Rhode Island corporation engaged in the installation of large heating systems. Superior was a Kansas corporation in the business of manufacturing and selling commercial boilers. In 1990 Sanders was working on the construction of a federal prison camp in West Virginia. On March 27, 1990, in response to specifications provided by Sanders, Superior issued a proposal setting out specifications for a so-called Seminole boiler and indicating an estimated delivery time of four weeks. Language printed on the proposal stated that "[t]he specified time of delivery is approximate * * *. The indicated date of shipment is our present best estimate of the approximate date when the material should be ready for shipment, and necessarily is subject to cause or delay outside of our own management or control." The proposal also stated that any resulting contract would be governed by Kansas law. On June 5, 1990, the seller's agent, Atkinson & Lawrence, Inc. (Atkinson), wrote to Sanders, stating, "In discussing the importance of quick delivery with Superior, they indicate that they will be able to ship in four weeks and possibly three. We will review our pricing and give you our best numbers within the next couple days."

Two days later Superior issued another proposal (second proposal) for the sale of its Seminole boilers, setting a price of approximately $156,000 for three units. This second proposal again indicated a four-week estimated shipping timeframe but retained the earlier caveat that "[t]he specified time of delivery is approximate." In addition the second proposal stated, "This proposal must be accepted within thirty (30) days from the date hereof, otherwise this proposal is withdrawn." (Emphasis added.) Kansas law was again to govern any ensuing agreement.

Eleven days after the second proposal, Sanders issued a purchase order (purchase order) for three Seminole boilers signed by one John Burde and dated June 18, 1990. The purchase order was date-stamped June 20, 1990, contains the price $145,000 (some $11,000 less than the second proposal), and adds the condition "All as per plans and specifications (section 15557), pending government approval." This purchase order, however, said nothing about what jurisdiction's law should govern any later dispute arising between the parties.

On June 25, 1990, Atkinson wrote to Superior, conveying that Sanders had contacted him and now wanted to substitute Industrial Combustion (IC) burners for use in the boilers instead of the Gordan-Piatt burners originally specified. Two days later Atkinson again communicated with Superior, stating that Superior should "quote a price for the boilers less burners." On June 29 Sanders issued a second purchase order (amended purchase order) requesting that Superior amend Sanders' previous purchase order by adding $867 to the purchase price to reflect the change of burner units from Gordan-Piatt to IC. This purchase-order amendment carried the notation "Date Required: 4 Weeks" but was unsigned. On July 19, over three weeks after the amended purchase order was initially issued, Atkinson returned this document for Sanders' signature. On that very same day and while acting as an agent for Superior, Atkinson submitted specifications for the boilers to the prison project's government engineers for their approval. Atkinson's communication to the government engineers contained the notation "We have received your comments on the boiler submittal. These will be acted upon."

The next day Atkinson wrote to Sanders, stating that the specifications had been submitted to the government engineers and added, "We have received your fax forwarding preliminary approval on the boilers. We will ask the factory to respond to the relocation of the control panel * * *. The system should have modulating feedwater controls and motorized valves. This change is easily made now." On July 20, the following day, the government engineers gave their final oral approval of the specifications, and Sanders released the purchase order.

Finally, on August 6, 1990, Superior issued a sales order for the three Seminole boilers (now with IC burners) for a price matching the amended purchase-order price of $145,827. However, instead of a four-week delivery schedule, Superior's August sales order indicated a shipping date of October 1, 1990. In support of its summary-judgment motion Superior submitted an affidavit of its national sales manager, Gregory Call (Call). His affidavit alleged that the longer delivery timeframe was necessary and reasonable because Superior had received a seasonal influx of other boiler orders while Sanders was changing various specifications and other details of its order during June and July. As a result, he claimed, Superior's previous estimate of a four-week delivery window was no longer feasible after Sanders released its ultimate purchase order following the government's July 20 approval of the specifications. Call also insinuated that Superior had been unable to begin manufacturing the boilers until it had received final approval from the government engineers for the various specification changes requested by Sanders. According to Call, Superior did not receive that approval until July 20, 1990.

At some point following the issuance of Superior's August 6 sales order, Sanders apparently telephoned Superior with regard to the October 1 shipping date. However, because Sanders submitted no documents, affidavits, or other competent evidence memorializing that communication, the record does not reflect when or how this communication occurred or what was said by the participants. The record does suggest, however, that some sort of communication occurred because on September 6, 1990, Atkinson forwarded the following response to Sanders:

"John, I'm sorry to say that we cannot improve shipment on any of the boilers for the above job. Scheduled shipment remains week of 9/24. During the time that there was indecision about burner selection and other details, Superior received a large influx of orders and therefore could not meet original commitment. Delays in releasing orders this time of year carry that risk."

At this point Sanders apparently contacted the Federal Bureau of Prisons to inform it of a potential delay in the installation of the boilers. But a government-contract specialist responded to Sanders on August 28, 1990 and indicated that the Bureau of Prisons was unmoved by Sanders' problem in obtaining an earlier delivery of the boilers: "The Government's original position remains unchanged regarding the significance of a completion date. This contract was awarded to R.J. Sanders in good faith and your compliance with its terms is imperative. Corrective action on your behalf is required to comply with the projects [sic] final completion date of October 5, 1990."

Superior ultimately shipped the boilers on or about October 1 and they arrived at the West Virginia site on October 5. However, having anticipated that the boilers would not be completely installed by the government's mandated completion date of October 5, Sanders had already arranged for temporary rental boilers to be trucked to the site and hooked up to supply heat in the interim. After the arrival and installation of Superior's boilers, Sanders tendered the contract price of $145,827 in substantial part, ¹ less $45,315.85 in "backcharges." Sanders claims these charges were the reasonable costs it incurred as a result of Superior's failure to meet its original contractual commitment to a four-week shipment period.

Superior thereafter filed this lawsuit, seeking the unpaid balance of the contract price and relying upon breach of contract and quantum meruit theories. In due course Superior filed a motion for summary judgment, and both sides submitted memoranda attaching the...