United States v. American Radiator & Stand. San. Corp.

• Decision Date: 28 September 1953
• Docket Number: Civ. No. 2387.
• Citation: 115 F. Supp. 422
• Court: U.S. District Court — District of Minnesota
• Parties: UNITED STATES v. AMERICAN RADIATOR & STANDARD SANITARY CORP. et al.

115 F. Supp. 422

UNITED STATES v. AMERICAN RADIATOR & STANDARD SANITARY CORP. et al.

Civ. No. 2387.

United States District Court D. Minnesota, Third Division.

September 28, 1953.

George E. MacKinnon, U. S. Atty., Richard W. Johnson, Sp. Asst. U. S. Atty., Clifford Janes, Asst. U. S. Atty., St. Paul, Minn., for plaintiff.

Cleon Headley and David W. Raudenbush (of Morgan, Headley, Raudenbush & Morgan), St. Paul, Minn., for defendants.

DONOVAN, District Judge.

This matter is before the Court on defendants' motion to dismiss, hearing thereon having been had on June 9, 1953.

This is a motion by the defendants, pursuant to Rule 12(b) (6) of the Federal Rules of Civil Procedure, 28 U.S. C.A., to dismiss the complaint on the ground that it fails to state a claim. On such a motion, of course, the facts pleaded in the complaint must be accepted as true, and the dismissal warranted only if the complaint makes clear that plaintiff would not be entitled to recover under any discernible circumstances.¹

Plaintiff seeks damages in the sum of $1,106,759.19 for breach of implied warranties.² Defendants now move for dismissal on the grounds that the complaint fails to allege timely notice of the purported defects and breaches of warranty³ and that from the face of the complaint it appears that the statute of limitation has run.⁴

As to timely notice, defendants contend (1) that the government has failed to state a cause of action in that the complaint does not contain any allegation of notice; (2) that even if by the most liberal construction the complaint should be construed to contain an allegation of notice, such notice can only be construed, at best, as running from the time of the assignments and that, therefore, the government cannot prevail because the claims it succeeded to were no longer alive.

In the interest of clarity we summarize the facts as outlined in the complaint (marginal note 2, supra). Sometime prior to October, 1941, the United States entered into a contract with Federal Cartridge Corporation for construction of the Twin Cities Ordnance Plant. By a series of subcontracts entered into during a period of time extending from October, 1941, through May, 1942, Anderson, Inc., a sub-subcontractor, purchased material from the present defendants. The installation of this material was completed in or about the spring of 1942 (when the first failures occurred). The installation system was condemned on August 1, 1942. On March 8, 1943, Anderson assigned its rights to the United States and on September 3, 1952, the Comptroller General of the United States issued the Certificate of Indebtedness⁵ referred to in the complaint, supra.

Defendants, in oral argument and by brief, contend that the complaint fails to state a claim in that it contains no intimation of notice or demand made at any time prior to the commencement of the present action. They argue that only from said "Certificates" can one extract any information on the subject of demand.⁶ Defendants emphasize that even though the complaint, on motion to dismiss, is entitled to the benefit of every doubt, it cannot be aided by sheer invention and that the most liberal construction to which it is susceptible would establish notice at the earliest moment it could be placed, namely, following the assignments of March 8, 1943. Defendants, therefore, contend that a claim of the sort here involved, which is dependent for its vitality upon the giving of timely notice, cannot be regarded as still alive when no notice has been given up to the time of the assignments occurring from seven months to a year after knowledge of the alleged defects was in possession of the party charged therewith.

Plaintiff, conceding that sovereignty alone does not relieve it from compliance with the notice requirement of Section 49 of the Uniform Sales Act⁷, earnestly urges adequacy of its complaint upon the ground that it "gives the opposing party fair notice of the nature and basis or grounds of the claim and a general indication of the type of litigation involved, citing as authority 2 Barron and Holtzoff, Federal Practice and Procedure, 432. While plaintiff advances four contentions why the requirement of notice in this (a) may not exist, or (b) may have been met,⁸ for all practical purposes the basic issue is whether "notice" as involved in the controlling statute, must be pleaded with particularity, or whether a mere general pleading will suffice.

In determining this question and its effect in the instant case, it should be observed that plaintiff at no time, by motion or otherwise, sought to amend its complaint, and hence the Court must view and consider the complaint as it now stands, in deciding the fundamental issue herein as to whether a claim has been stated under the governing rule.

Defendants have persuasively argued and cited to the Court numerous decisions in support of their contention that "notice" must appear on the face of the complaint.⁹

First of all, it would appear that the greater weight of authority requires the pleading of "notice" under the Uniform Sales Statute here in question. Liberally construing the complaint, it may be said that it does contain a sufficient allegation of notice as of the time of the assignments. However, it is clearly evident on its face that it contains no allegation whatsoever, of any notice prior to the assignments, or on the part of Anderson, Inc. The Court is of the opinion that this point relied on by defendants (see footnote 6, supra) is well taken and that even under the most liberal interpretation of the Federal Rules of Civil Procedure, a trial court cannot infer something which has not in fact been pleaded, and it must be concluded, therefore, that the complaint, as it now stands, alleges notice only as of the time the assignments were made.¹⁰

We come thus to one of the paramount issues of the instant case, and that is whether, as a matter of law, notice given from seven months to a year after the alleged defects must have been known to plaintiff and its assignor, is so unreasonable as to preclude recovery.¹¹ While the question of due notice is usually one of fact, conditions may exist which make that question one of law.¹²

The Court is convinced that the greater weight of authority justifies the conclusion that, as a matter of law, an attempted rescission seven months to a year after knowledge of the alleged defects is unreasonable.¹³ In arriving at this conclusion the Court is aware that the plaintiff seeks to distinguish and limit the authorities cited in footnote 13 as being for the most part State Court decisions antedating the Federal Rules of Civil Procedure, but this line of argument is unimpressive and without merit.

The additional argument offered by plaintiff to the effect that the nature of the material (a sealed conduit) made any defects difficult of discovery and thus not obvious, is advanced in justification and excuse for delay in giving the required notice. Any such claim is made ineffective by the admission set forth in the plaintiff's Certificates of Indebtedness stating that leaks occurred during the spring of 1942, and that certain sections of the line were then removed by reason of such defects and repaired. Furthermore, mere uncertainty as to whether there has been a breach of warranty does not excuse the giving of prompt notice.

The remaining contention of plaintiff that M.S.A. § 512.49 does not require notice in all cases is not convincing in that the instant case, on the face of the complaint, does not appear to be an exception to the statutory requirement. The complaint, with what it lacks and contains, makes unnecessary a trial of fact issues admittedly complex and prolix.

An issue of fact is not "genuine" within the governing Federal Rule of Civil Procedure, and cannot preclude a granting of the motion herein made, unless it has legal probative force as to a controlling genuine issue of material fact.¹⁴

Whether directed at the right or the remedy, the principle is the same. Plaintiff's failure to plead timely notice suggests inability so to do. This is particularly so where the limitation is so patently disclosed (by reading between the lines) in the exhibits attached to the complaint of the instant case. The applicable statute, 30 Minnesota Statutes Annotated § 512.49, is but a restatement of the law of equity governing laches. The situation of the parties may have changed. Witnesses may have died, or evidence may have been lost in the lapse of time. To avoid such possibilities the statute requires "notice * * * within a reasonable time."

The Court, therefore, concludes that the motion for dismissal must be granted, for the reason that the complaint fails to allege timely notice and the contents thereof make obvious that timely notice was not given.

The conclusion reached makes unnecessary any discussion of the alternative contention of defendants that the six-year statute of limitation had run.

In granting this motion for dismissal, the Court is not overlooking the fact that the Court of Appeals, Eighth Circuit, has consistently reversed and set aside orders for dismissal and summary judgment unless it clearly appeared that there was no genuine issue as to a material fact. Dennis v. Village of Tonka Bay, 8 Cir., supra, 151 F.2d 411, 412; United States v. Arkansas Power & Light Co., 8 Cir., 165 F.2d 354, 357; Traylor v. Black, Sivalls, & Bryson, 8 Cir., 189 F.2d 213, 216; Durasteel Co. v. Great Lakes Steel Corp., 8 Cir., supra, 205 F.2d 438, 441.

The instant case, however, is distinguishable from the last-cited cases in this, that if the statutes in question (marginal notes 3 and 4, supra) apply to the plaintiff, the pleaded facts viewed in a light most favorable to the plaintiff make obvious that the complaint fails to state a claim, and hence there is no genuine issue as to a material fact. Manifestly, therefore, what is pleaded in the complaint, showing noncompliance with...