Opinion
CV095032894S
11-09-2016
Export Development Canada v. T. Keefe and Son, LLC
UNPUBLISHED OPINION
MEMORANDUM OF DECISION
Robin L. Wilson, J.
I
STATEMENT OF CASE AND PROCEDURAL HISTORY
The plaintiff, Export Development Canada, commenced this action by way of writ, summons and complaint dated November 24, 2009, against the defendant, T. Keefe & Son, LLC. The plaintiff filed a one-count complaint sounding in breach of contract which alleges the following facts. The plaintiff is a Federal Crown Corporation of the government of Canada, doing business in Ottawa. The defendant is a limited liability company located in Connecticut. On or about January 31, 2007, and May 28, 2007, at the request of the defendant, the plaintiff's assignor, Metal Perreault, Inc. (Metal Perreault), sold and delivered goods to the defendant, the value of which was $189,500. On February 28, 2008, Metal Perreault assigned the defendant's debt of $189,500 to the plaintiff. The assignment gave the plaintiff all rights to seek full recovery of the debt from the defendant. After all offsets, credits and payments, there is now a debt due and owing from the defendant to the plaintiff by way of the assignment in the amount of $189,500. The defendant has failed, refused and neglected to pay the plaintiff this amount. As a result, the plaintiff demands money damages and costs.
The defendant filed its answer, special defenses, and a counterclaim on August 9, 2010. The defendant denied that Metal Perreault delivered goods to T. Keefe, the value of which was $189,500. As to the plaintiff's amount in demand, the defendant claimed that it was entitled to a set off; that there were mutual debts which arose from the debt claimed as due by the plaintiff; the defendant was required to contract for replacement materials and services to replace those materials manufactured by the plaintiff which were of such inferior quality and workmanship that the defendant was required to scrap the same; and the defendant's right of set off was greater than the debt claimed as due by the plaintiff. The defendant also alleged the following special defenses: accord and satisfaction; foreign corporation and lack of standing as to Metal Perreault; foreign corporation and lack of standing as to the plaintiff; and collateral source of payments. The defendant also filed a counterclaim which alleged claims under the UCC.
On September 9, 2010, the plaintiff filed a motion to strike the defendant's answer as to the plaintiff's amount in demand as well as the counterclaim. On June 2, 2011, the court (Woods, J.), granted the plaintiff's motion to strike. The defendant did not replead its counterclaim. As to the special defenses, the defendant withdrew its special defenses regarding standing as to both the plaintiff and Metal Perrault, and its claim of collateral source of payments. The remaining special defense is accord and satisfaction to which the plaintiff did not file a reply. On September 22, 2011, and July 23, 2012, the plaintiff filed motions for summary judgment, which this court denied. See Export Development Canada v. T. Keefe and Son, LLC, Superior Court, judicial district of New Haven, Docket No. CV-09-5032894-S, (February 17, 2012, Wilson, J.); Export Development Canada v. T. Keefe and Son, LLC, Superior Court, judicial district of New Haven, Docket No. CV-09-5032894-S, (December 10, 2012, Wilson, J.).
The matter was tried to the court on June 30, 2016, and July 5, 2016. The plaintiff's sole witness was Simon Harnois, a project manager of Metal Perreault and the defendant's witnesses were Jason Keefe and Thomas Keefe, members of the defendant, LLC. At the conclusion of the trial, by order of the court, the parties submitted proposed findings of fact and conclusions of law on August 5, 2016.
II
STANDARD OF REVIEW
" It is an abiding principle of our jurisprudence that [t]he sifting and weighing of evidence is peculiarly the function of the trier [of fact]. [N]othing in our law is more elementary than that the trier [of fact] is the final judge of the credibility of witnesses and of the weight to be accorded to their testimony . . . The trier has the witnesses before it and is in the position to analyze all the evidence. The trier is free to accept or reject, in whole or in part, the testimony offered by either party." (Internal quotation marks omitted.) Welsch v. Groat, 95 Conn.App. 658, 664, 897 A.2d 710 (2006).
The trier of fact must " observe the demeanor of the parties and their witnesses and to draw inferences therefrom as to the motives underlying their testimony and conduct." Christie v. Eager,, 129 Conn. 62, 64-65, 26 A.2d 352 (1942). " [T]he trier of fact's assessment of the credibility of . . . witnesses . . . is made on the basis of its firsthand observation of their conduct, demeanor and attitude . . . The weight to be given to the evidence and to the credibility of witnesses is solely within the determination of the trier of fact." (Internal quotation marks omitted.) Machado v. Statewide Grievance Committee, 93 Conn.App. 832, 839, 890 A.2d 622 (2006). " It is well established that [t]he trier of fact may accept or reject the testimony of any witness . . . The trier can, as well, decide what--all, none, or some--of a witness' testimony to accept or reject." (Citation omitted; internal quotation marks omitted.) Wilson v. Hryniewicz, 51 Conn.App. 627, 633, 724 A.2d 531, cert. denied, 248 Conn. 904, 731 A.2d 310 (1999).
III
BURDEN OF PROOF
The burden of proof is on the plaintiff to prove all of the essential allegations of its complaint and on the defendant to prove all of the essential elements of its counterclaim and affirmative defenses. Lukas v. New Haven, 184 Conn. 205, 211, 439 A.2d 949 (1981). " While the plaintiff is entitled to every favorable inference that may be legitimately drawn from the evidence, and has the same right to submit a weak case as a strong one, the plaintiff must still sustain the burden of proof on the contested issues in the complaint and the defendant need not present any evidence to contradict it . . . The general burden of proof in civil actions is on the plaintiff, who must prove all the essential allegations of the complaint [by a fair preponderance of the evidence]." (Citations omitted.) Gulycz v. Stop & Shop Cos., 29 Conn.App. 519, 523, 615 A.2d 1087, cert. denied, 224 Conn. 923, 618 A.2d 529 (1992). Failure to do so results in judgment for the defendant. Id. In Connecticut, " [a] special Defense is an affirmative defense that must be [pled and] proven by the defendant." (Internal quotation marks omitted.) Caciapoli v. Lebowitz, Superior Court, judicial district of New Haven, Docket No. CV-08-5020658-S, (March 4, 2010, Berdon, J.T.R.), aff'd, 309 Conn. 62, 68 A.3d 1150 (2013). Like the plaintiff, the defendant must plead and prove all of the essential elements of its affirmative defense and counterclaim by a fair preponderance of the evidence.
IV
FINDINGS OF FACT
The court finds the following facts to have been proven by a fair preponderance of the evidence.
The plaintiff is a Federal Crown Corporation of the Government of Canada organized and doing business in Canada. The defendant is a limited liability company organized and existing under the laws of the state of Connecticut, with an office in Guilford, Connecticut. The defendant is an ironworks company which is in the business of the installation of steelwork, that involves anything in the ironworkers trade.
" The defendant initially claimed that this court lacked subject matter jurisdiction because the plaintiff lacked standing to bring this suit because it failed to file a certificate of authority pursuant to Connecticut General Statutes § 33-920. At oral argument [on the motion for summary judgment], the defendant, based on documentation it received from the plaintiff, conceded that § 33-920 did not apply to the plaintiff, and thus, the plaintiff had standing to institute this debt collection action." Export Development v. T. Keefe & Son, LLC, Superior Court, judicial district of New Haven, Docket No. CV-09-5032894-S, (December 10, 2012, Wilson, J.).
Metal Perreault is a Canadian corporation that has been in business since 1987 as a structural and miscellaneous steel fabricator. The defendant, who is an ironworks subcontractor, secured a contract with a general contractor, Perini Building Company (Perini), to supply and erect certain metal components at a garage structure being constructed by Perini at the Foxwoods Casino in Ledyard, Connecticut. In connection with the contract, the defendant sought bids from suppliers of structural and miscellaneous metals for the metal components to be supplied and erected at the project, including a bid from Metal Perreault. At the request of the defendant, Metal Perreault submitted its written bid quotation to the defendant on or about September 15, 2006, and the defendant accepted Metal Perreault's bid quotation in a written purchase order on or about October 12, 2006. Jason Keefe, owner and member of the defendant, was the project manager on the construction project.
Metal Perreault's quotation provided a detailed breakdown by category of metal goods to be supplied with prices allocated to each category. Each category of metal goods is referred to in the quotation as a " breakdown" and numbered 1 through 10 and 15. The total agreed-upon price for all breakdowns in the quotation was $377,000. The quotation provided that the metal goods would be made in conformity with the original architect's drawings for the project, which are referenced in the quotation by drawing numbers and dates, but are not attached to the quotation. The architect's drawings referred to in the quotation were drawings showing the intended construction of the concrete garage structure that did not reflect the actual measurements of the " as built" structure after it was erected. In order for Metal Perreault to fabricate the required metal goods, it had to know the actual dimensions of the " as built" concrete structure erected by others. According to Simon Harnois, vice president and project manager for Metal Perreault, concrete structures frequently vary from the original design drawings because of normal variations that occur in concrete construction. The actual as-built measurements are determined by taking " field measurements" at the project site. The quotation provided that it was the defendant's responsibility to take field measurements of the as-built structure and to provide those measurements to Metal Perreault, which Metal Perreault relied upon and used to fabricate the steel goods. The quotation also provided that Metal Perreault was responsible for preparing shop drawings. Shop drawings showed the details of the metal goods to be fabricated. Shop drawings had to be approved by Perini before Metal Perreault could begin fabrication. Shop drawing approvals were significantly delayed by Perini, thereby delaying Metal Perreault's ability to begin fabrication.
Neither the quotation submitted by Metal Perreault nor the defendant's written purchase order contain a delivery date or time, or a date or time for performance. The quotation order states that " delivery dates to be confirmed at time of order." Pl. Ex. 1. The defendant's written purchase order accepting Metal Perreault's quotation, states: " Delivery date: To be determined." Pl. Ex. 2.
At issue in this case is breakdown #1 as listed in Metal Perreault's quotation, which is described in the quotation to include steel guardrails and hand rails for six concrete staircases in the garage structure, numbered 1 through 6. The guardrails and handrails for all six staircases were manufactured and delivered by Metal Perreault in eight separate deliveries between February 18, 2007, and May 24, 2007, as reflected in the itemized packing slips that were signed by the representative of the defendant, acknowledging receipt.
The only evidence of an agreed delivery date is a fax communication from Metal Perreault to the defendant dated February 14, 2007, confirming a voicemail left on Jason Keefe's cell phone regarding the February delivery, which states that: " Our carrier cannot leave today because of the snowstorm. We have to postpone the delivery [to] next Monday February 19th . . . at the site." Def. Ex. B. Keefe did not check his voicemail. Keefe did not check the fax machine because he went directly to the job site and not to his office on the morning the delivery was expected, which was on or about February 15, 2007. Consequently, he did not receive notice that the scheduled delivery could not be made on February 15, 2007 and, therefore, he did not cancel the rental of a crane for which he claimed the defendant incurred expenses, nor did he instruct his employees to not come to the job site on February 15, 2007. The first shipment was delivered three days later on February 18, 2007, and included guardrails for stairs number 1 and 4. The defendant signed the packing slip dated February 18, 2007, indicating that the shipment was received. In fact, the defendant stipulated during trial that all product shipped by the plaintiff for which the plaintiff claims the defendant owes $189,500, was in fact received by the defendant.
After the first delivery of the goods, the defendant notified Metal Perreault that there was a problem with the metal parts fabricated for stair number 4. Metal Perreault received a photograph of stair number 4 from the defendant on or about the end of February 2007, depicting the problem. In response to the notification from the defendant, Metal Perreault initially looked at the shop drawings to determine if the drawings were done correctly. Metal Perreault determined that there were no problems with the drawings. Thinking that there might be a mis-fabrication, which Harnois testified is unusual, Metal Perreault refabricated a portion of the metal parts for stair number 4 as per the same drawing. They then shipped the refabricated metal parts for stair number 4 to the project site. The refabricated metal parts for stair number 4 however, again did not fit. As a result, Metal Perreault was notified again by the defendant that there was still a problem with the refabricated metal parts for stair number 4. T. Keefe did not notify Metal Perreault at this time that it was rejecting the goods.
In response, sometime in March 2007, Metal Perreault sent someone to the project site to look at the problem and to perform a field survey so they could conduct their own field measurements, although the taking of field measurements under the contract was the responsibility of the defendant. In addition, Metal Perreault looked at the rise and the run of the stairs and the location of the treads. They then put the results of the field survey into their detailing software. They then realized that there were some differences between what they surveyed and from what they built the original guardrails. Based on these field measurements, Metal Perreault refabricated the guardrails for stair number 4 which was then shipped to the defendant on or about April 6, 2007, which the defendant received on April 10, 2007.
After the delivery of the refabricated metal parts for stair number 4, there was still a problem, however, the defendant did not notify Metal Perreault that there was still a problem, nor did the defendant notify Metal Perreault that it was rejecting the goods. Notwithstanding this continuing problem with the parts for stair number 4, the defendant field modified and installed some of the refabricated metal parts. The defendant at this point did not notify Metal Perreault that the goods were still not usable or that it was rejecting the goods, but rather accepted the parts and modified some of them for its use in constructing stair number 4, and discarded, or as Jason Keefe testified, " scrapped" the remaining parts.
Metal Perreault was also notified that there were problems in a portion of the metal parts shipped for stair number 1. Harnois could not recall when Metal Perreault was notified of the problems with the metal parts for stair number 1. Metal Perreault refabricated the metal parts for stair number 1 and redelivered them on or about May 14, 2007, and on or about May 25, 2007. Metal Perreault did not receive further notice regarding stair number 1 after redelivering the refabricated metal parts. Again, the defendant did not notify Metal Perreault that it was rejecting the goods.
Metal Perreault did not receive any notice about any defects in any materials it supplied for stairs 2, 3, 5 or 6 under breakdown #1. Moreover, there is no credible evidence that the defendant rejected the metal parts for stairs 1, 2, 3, 4, 5, or 6 under breakdown #1. The evidence demonstrates, as this court will discuss, that the defendant did not effectively reject the metal materials supplied to it by Metal Perreault, but instead accepted the materials.
According to Jason Keefe, the defendant was able to complete its installation of the metal goods supplied by Metal Perreault by making field modifications. Keefe's testimony in this regard is consistent with the letter he wrote to the general contractor, Perini in which Keefe sets forth the reasons for the stop work order between the defendant and Metal Perreault. The letter states in relevant part: " 1. Predominant issue is poor craftsmanship of fabricated handrail materials for Parking Garage. Some sections of the handrail [materials] were fabricated three times and all three times failed to meet standards required for installation. Due to time constraints of the Parking Garage opening, T. Keefe and Son, LLC was forced to field modify well above and beyond normal circumstances. Due to this field modification on all stairs, T. Keefe and Son, LLC incurred large losses in time and money due to extra re-work. This required additional manpower and crane costs to dismantle the incorrect handrails and scrap the materials that were provided by Metal Perrault. If time was not an issue, T. Keefe and Son, LLC would have sent the incorrectly fabricated materials back for a third time and would have had Metal Perrault re-fabricate all materials . . ." Def. Ex. E.
According to Jason Keefe, due to its contractual obligations to the general contractor to establish two means of ingress and egress to those using the parking garage for the construction at Mashantucket, the defendant faced liquidated damages of $5,000 per day for each day that the defendant went beyond its delivery deadline to the general contractor. Consequently, faced with no other alternative, the defendant was required to use the goods and therefore hired workers to cut apart the goods and field modify the goods. The defendant cancelled the contract with Metal Perreault and contracted with Logan Steel to fabricate the same metal goods so that it could complete its obligations under its contract with the general contractor. Although the defendant characterizes the goods as having been " rejected, " the defendant failed to plead and prove, as this court will later discuss, that it rightfully rejected the goods by giving Metal Perreault proper notice in accordance with General Statutes § 42a-2-602. Instead, as just stated, the defendant accepted the goods and used some of the goods to complete the project to meet its obligations under the contract it had with Perini.
Moreover, as indicated in Jason Keefe's letter to Perini, time also became an issue. However, the timing of delivery of the metal goods became an important issue because of delays in obtaining approvals of shop drawings from Perini. Metal Perreault's bid quotation provides that it is the responsibility of the defendant to obtain approval of shop drawings within 14 days. The bid quotation states: " If shop drawings are under [Metal Perreault's] responsibility, approval time is 14 calendar days and RFI [requests for information] reply is 48 hours." Pl. Ex. 1, p. 3. Thus, according to Jason Keefe's letter to Perini, the defendant conceded that if time was not an issue, it would not have terminated the contract, but rather, would have provided Metal Perreault an opportunity to cure any defects.
In early June 2007, after the defendant had used some of the metal goods shipped to it by Metal Perreault and " scrapped" the remaining unused goods, the defendant terminated its contract with Metal Perreault and orally notified Metal Perreault to stop work on the contract. Metal Perreault made its last delivery which completed the fabrication and delivery of metal goods required under breakdown number 1 in the quotation at the end of May 2007.
Metal Perreault also fabricated and delivered structural steel to be used in roof framing, described in the quotation as " breakdown #10." There is no evidence that the defendant complained about any of the structural steel included in breakdown #10, for which the quotation set a line item price of $56,300.00. There is no evidence that the items in breakdown #10 were defective in any manner or that the defendant rejected or did not use the materials.
Metal Perreault began to prepare drawings for breakdown #6, #11 and #15, but did not complete the fabrication of those items due to the defendant's termination of the contract. Metal Perreault invoiced the defendant for the partial work on those drawings in the respective amounts of $3,400.00, $200.00 and $5,100.00. Prior to the termination of the contract, Metal Perreault invoiced the defendant for the work completed in the total amount of $189,500. The defendant has made no payments to Metal Perreault in connection with the contract. The court may find additional facts as necessary in deciding the merits.
V
DISCUSSION
" Before [the] court address[es] the merits of [the plaintiff's claims and the defendant's defenses, the court] must observe that this case has been presented with virtually total disregard of the relevant provisions of [this state's] statutes, in particular Article 2 of the Uniform Commercial Code, General Statutes § 42a-2-101 et seq." Bead Chain Mfg. Co. v. Saxton Products, Inc., 183 Conn. 266, 270, 439 A.2d 314 (1981). Such is evident in the pleadings of the parties, the presentation of evidence during trial and in the parties' post-trial briefs. The plaintiff's complaint alleges what appears to be a simple debt collection action with no reference whatsoever to the UCC, despite this being a commercial contract for the fabrication of miscellaneous and structural steel parts at a contract price of $377,000 which is well over $500. The plaintiff in its complaint simply alleges that between January 31, 2007, and May 28, 2007, the plaintiff's assignor, Metal Perreault sold and delivered goods to the defendant the value of which was $189,500 which the defendant failed to pay. The plaintiff also alleges that Metal Perreault assigned to the plaintiff a debt originally owed to Metal Perreault by the defendant which sum the defendant has failed, refused and neglected to pay.
Notwithstanding that the contract between Metal Perreault and the defendant was for the sale of goods well in excess of $500, which brings the contract within the scope of the UCC, and that the defendant claims it rejected the goods due to their nonconformity, the plaintiff fails to allege that Metal Perreault complied with all of the required provisions of the UCC in the tender and delivery of the goods, and that the defendant failed to comply with said provisions that are applicable to it as the buyer of the goods, which resulted in a breach of the contract. In addition, given that the UCC provides for various remedies available to the seller and buyer in the event of a breach by either, the plaintiff's complaint is devoid of any allegations of the statutory provisions that would cover remedies available to the assignor, Metal Perreault, under the contract, which as assignee of the contract, would be available to the plaintiff. With the exception of the use of the words " sold and delivered goods to defendant, the value of which was $189,500, " and that the defendant failed to pay, the plaintiff makes no reference in its complaint to any of the relevant provisions of the UCC.
The defendant's answer is no better. The sole special defense, after its failed attempts to plead a claim under the UCC, is accord and satisfaction. Both parties, knowing full well that this was a substantial commercial contract with an international company, presented this case as if it were a simple common-law breach of contract claim. Except for the plaintiff's passing references to the UCC in its post-trial brief, by use of terms here and there extracted from various UCC provisions, and its vague citations to certain statutory provisions, and the defendant's passing reference to certain UCC terms in its post-trial brief, such as " rejection of goods, " without any substantive legal analysis applied to the facts as adduced at trial, this court is left with resolving a relatively substantial commercial contract dispute that falls squarely within our commercial code, the application of which can be complex. This case is far from a simple debt collection action based on a simple common-law breach of contract.
A
The Assignment
" Succession by an assignee to exclusive ownership of all or part of the assignor's rights respecting the subject matter of the assignment, and a corresponding extinguishment of those rights in the assignor, is precisely the effect of a valid assignment." Bouchard v. People's Bank, 219 Conn. 465, 473, 594 A.2d 1 (1991). " In other words, an 'assignee steps in [the] shoes of [the] assignor and obtains all rights and obligations of [the] assignor . . . ' DaimlerChrysler Services North America, LLC v. Commissioner, 274 Conn. 196, 212, 875 A.2d 28 (2005) . . . Moreover, '[t]he assignee's burden of proving the existence of the assignment is met by evidence that is satisfactory in character to protect the defendant from another action by the alleged assignor, and which shows that there was a full and complete assignment of the claim from an assignor who was the real party in interest with respect to the claim.' 6A C.J.S. Assignments § 147." Cuda & Associates, LLC v. Lumpkin, Superior Court, judicial district of New Haven, Docket No. CV-09-5031901-S, (November 29, 2011, Woods, J.).
In the present case, there is no dispute that the plaintiff's assignor unequivocally assigned its rights in the debt to the plaintiff. The assignment agreement states in relevant part: " AND WHEREAS [the defendant], T. Keefe and Son, LLC (the 'Buyer'), a corporation with offices located at Guilford UNITED STATES OF AMERICA has failed to make payments due and owing to the Assignor [Metal Perreault] in an aggregate amount of U.S. $189,500 (such payments due and owing to the Assignor are hereinafter referred to as the 'Receivable'), such Receivable being due pursuant to the terms of one or more sales contracts between the Assignor and the Buyer ('Contract') . . . 1. Assignment. The [plaintiff/assignee, Export Development Canada's assignor, Metal Perreault] hereby absolutely and unconditionally assigns, transfers, conveys and sets over unto [the plaintiff] the entire unencumbered right, title, benefit and ownership interest in the Receivable and the Contract with respect to the recovery of the Receivable." This provision clearly shows a full and complete assignment of the claim from the plaintiff's assignor, Metal Perreault to the plaintiff. In addition, the assignment protects the defendant from another action by the alleged assignor because the plaintiff's assignor unequivocally assigned its rights in the debt to the plaintiff. Accordingly, the court finds that there was a valid assignment of Metal Perreault's rights in the debt and/or " receivable" and the contract with respect to the recovery of the " receivable" to the plaintiff.
In addition, " '[t]he assignee of a chose in action takes it subject to equities and defenses which could have been set up against it in the hands of the assignor, provided they have arisen before receipt of notice of the assignment.' Bridgeport-City Trust Co. v. Niles Bement-Pond Co., 128 Conn. 4, 10, 20 A.2d 91 (1941). 'Because the contract[s] between the parties [were] contract[s] for the sale of goods, the law governing [these] transaction[s] is to be found in article 2 of the Uniform Commercial Code . . . 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.' (Citation omitted.) Stelco Industries, Inc. v. Cohen, 182 Conn. 561, 563, 438 A.2d 759 (1980)." Carrara Marble Co. of America, Inc. v. Ferazzoli Imports of New England, Inc., Superior Court, judicial district of Middlesex, Docket No. CV-11-6006230-S, (January 10, 2014, Marcus, J.).
B
UCC--Generally
" The general rule is that [c]ommon law claims are barred if a UCC provision governs the transaction . . . Article 2 applies to all contracts for the sale of goods, whether those goods be existing at the time of sale or whether they are to be specially manufactured . . . Under the UCC, 'goods' mean all things, including specially manufactured goods, which are movable at the time of identification to the contract for sale other than the money in which the price is to be paid, investment securities covered by Article 8 and things in action." (Citations omitted; internal quotation marks omitted.) Dunleavey v. Paris Ceramics U.S.A., Inc., Superior Court, judicial district of Fairfield, Docket No. CV-02-0395709-S, (April 20, 2005, Richards, J.). " While it is true that the Code incorporates, by reference, supplementary. general principles of contract law . . . such supplemental bodies of law cannot displace those provisions of the Code that are directly applicable. Article 2 applies to all contracts for the sale of goods, whether those goods be existing at the time of sale or whether, as in this case, they are to be specially manufactured." (Citations omitted.) Bead v. Saxton Products, Inc., supra, 183 Conn. 270.
Thus, to the extent that the plaintiff has alleged a common-law claim for breach of contract, it is preempted because the underlying transaction between the plaintiff's assignor, Metal Perreault, and the defendant, was for the sale of goods in excess of $500 and, therefore, governed by the UCC. The law governing this transaction is to be found in Article 2 of the Uniform Commercial Code (UCC), Connecticut General Statutes § § 42a-2-101 et seq.
C
Manner of Seller's Tender of Delivery--§ 42a-2-503
In addition to the defendant's claim during trial that the metal goods fabricated by Metal Perreault and shipped to it were nonconforming because they were defective, the defendant also claimed that Metal Perreault's tender of delivery of the goods was nonconforming because delivery of the metal goods was late, which resulted in costs it claimed it incurred as a result of the late delivery. The defendant failed, however, to allege in its answer, that Metal Perreault's tender of delivery was nonconforming because it was late. Nonetheless, the court will address this issue raised by the defendant during the trial.
Section 42a-2-503(1) provides for the manner of the seller's tender of delivery and states: " Tender of delivery requires that the seller put and hold conforming goods at the buyer's disposition and give the buyer any notification reasonably necessary to enable him to take delivery. The manner, time and place for tender are determined by the agreement and this article, and in particular (a) tender must be at a reasonable hour, and if it is of goods they must be kept available for the period reasonably necessary to enable the buyer to take possession; but (b) unless otherwise agreed the buyer must furnish facilities reasonably suited to the receipt of the goods." In the present case, the contract does not state a delivery date or time. Neither does the quotation submitted by Metal Perreault nor the defendant's written purchase order contain a delivery date or time. The quotation order states that " delivery dates to be confirmed at time of order" and the defendant's written purchase order accepting Metal Perreault's quotation, states " Delivery date: To be determined." Pl. Exs. 1 and 2.
General Statutes § 42a-2-309(1) provides for the time of delivery where the contract does not provide such and states: " The time for shipment or delivery or any other action under a contract if not provided in this article or agreed upon shall be a reasonable time." The comments to § 2-309 provide: " The reasonable time under this provision turns on the criteria as to 'reasonable time' and on good faith and commercial standards set forth in Sections 1-203, 1-204 and 2-103. It thus depends upon what constitutes acceptable commercial conduct in view of the nature, purpose and circumstances of the action to be taken."
Public Act 05-109 § 9 repealed § 1-203 which provided that " [e]very contract or duty within this title imposes an obligation of good faith in its performance and enforcement." Public Act 05-109 § 16 replaced § 1-203 with § 1-304 which contains the same language previously in § 1-203.
Public Act 05-109 § 10 repealed § 1-204 which provided " 2) What is a reasonable time for taking any action depends on the nature, purpose and circumstances of such action.
" (3) An action is taken 'seasonably' when it is taken at or within the time agreed or if no time is agreed at or within a reasonable time." Public Act 05-109 § 11 replaced § 1-204 with § 1-205 which provides: " (a) Whether a time for taking an action required by this title is reasonable depends on the nature, purpose and circumstances of the action. " (b) An action is taken seasonably if it is taken at or within the time agreed or, if no time is agreed, at or within a reasonable time."
In discussing the UCC gap filler provision on delivery terms, White, Summers and Hillman indicate that " [w]hat is reasonable will vary with the case depending on such factors as the nature of goods to be delivered, the purpose for which they are to be used, the extent of the seller's knowledge of the buyer's intentions, transportation conditions, the nature of the market, and so on." 1 J. White et al., Uniform Commercial Code, § 4:5, 281-82 (2012).
Jason Keefe's letter to Perini explaining the reason for the stop work order, indicates that " [o]f several deliveries received, none were received on time or on the agreed upon date in some cases." However, the only credible evidence of a tender of late delivery is a fax communication Metal Perreault sent to Jason Keefe, indicating that Metal Perreault's late delivery of the first shipment of goods for stairs 1 and 4, would be late due to a snow storm. The fax indicates that Metal Perreault's carrier could not leave as planned on February 14, 2007, however the delivery would be made on February 19, 2007. According to the testimony, the goods were to be delivered to the job site in Connecticut on or about February 15, 2007. Jason Keefe testified that he did not receive the fax because instead of going to his office to check the fax machine, he went directly to the job site on the date of delivery. The evidence demonstrates that the goods were in fact delivered three days later on February 18, 2007. The court finds that given there was no time or date for delivery contained in the contract, or a time set for when performance was required, and in light of the snow storm and Metal Perreault's prompt notification of its late delivery, Metal Perreault's delivery of the goods on February 18, 2007, three days later, was within a reasonable time. Moreover, as this court will discuss infra, T. Keefe failed to effectively reject the goods, and thus, accepted the goods by field modifying the metal parts to fit the stairs.
" Further the Code case law in general regard to one-shot contracts indicates that courts sometimes may invoke section 1-304 of the Revised Article 1 (former 1-203) to bar rejections by a buyer acting in bad faith . . . " The courts may also deny rejection for what they regard as insubstantial defects by manipulating the procedural requirements for rejection. That is, if the court concludes that a buyer ought to be denied his right to reject because the buyer has suffered no or only minor damage, the court might arrive at that conclusion by finding that the buyer failed to make an effective rejection (for example, because notice was not timely). " [White Summers and Hillman] conclude, and the cases decided suggest, that the Code changes and the court's manipulation have so eroded the perfect-tender rule that the law would be little changed if 2-601 gave the right to reject only upon 'substantial' nonconformity. Of the reported cases on rejection, only few actually grant rejection on what could fairly be called an insubstantial nonconformity despite the language in some case allowing such rejection." 1 J. White et al., § 9:9, 783-85. There are no Connecticut Supreme Court decisions that have addressed the perfect tender rule and whether the court will deny rejection where there has been substantial conformity or whether the strict perfect tender rule will apply, and thus allowing the buyer to reject for any nonconformity. This court's research found a Connecticut federal district court decision which concluded, based upon language cited in a footnote of a Connecticut Appellate Court decision, that, " the Connecticut Appellate Court has adopted [White, Summers and Hillman's] construction of § 2-601 as in substance a rule that does not allow rejection for insubstantial breach such as a short delay causing no damage." D.P. Technology Corp. v. Sherwood Tool, Inc., 751 F.Supp. 1038, 1042 (D.Conn. 1990). The court stated: " [i]n the one Connecticut case interpreting 2-601, Franklin Quilting Co., Inc. v. Orfaly, 1 Conn.App. 249, 251, 470 A.2d 1228, 1229 (1984), in a footnote, the Appellate Court stated that 'the perfect tender rule' requires a substantial nonconformity to the contract before a buyer may rightfully reject the goods . . ." (Emphasis in original; internal quotation marks omitted.) Id. In determining whether the " Connecticut Supreme Court would affirm the doctrine of substantial nonconformity, as stated in Orfaly . . . [the court in D.P. Technology Corp. noted that it] must look to the inferior courts of the state and to decisions of sister courts as well as federal courts. As noted, the weight of authority is that the doctrine of substantial performance does not apply to the sale of goods. However, as noted by White and Summers, in none of the cases approving of perfect rather than substantial tender was the nonconformity insubstantial, such as a short delay of time where no damage is caused to the buyer. White and Summers, Uniform Commercial Code (3rd Ed.), section 8-3 n.8. In the instant case, there is no claim that the goods failed to conform to the contract. Nor is there a claim that the buyer was injured by the 16-day delay. There is, however, a claim that the goods were specially made, which might affect the buyer's ability to resell. Thus Connecticut's interpretation of 2-601 so as to mitigate the harshness of the perfect tender rule reflects the consensus of scholars that the rule is harsh and needs to be mitigated. Indeed, Summers and White state that the rule has been so 'eroded' by the exceptions in the Code that 'relatively little is left of it; the law would be little changed if 2-601 gave the right to reject only upon 'substantial' non-conformity, ' especially since the Code requires a buyer or seller to act in good faith. R. Summers and J. White, Uniform Commercial Code (3rd Ed. 1988), 8-3, at 357. See also Alden Press, Inc. v. Block & Co., Inc., 123 Ill.Dec. 26, 30, 173 Ill.App.3d 251, 527 N.E.2d 489, 493 (1988) (notwithstanding the perfect tender rule, the reasonableness of buyer's rejection of goods and whether such rejection of goods is in good faith are ultimately matters for the trier of fact); Printing Center of Texas v. Supermind Pub. Co., Inc., 669 S.W.2d 779, 784 (Tex.App. 1984) (if the evidence establishes any nonconformity, the buyer is entitled to reject the goods as long as it is in good faith); Neumiller Farms, Inc. v. Cornett, 368 So.2d 272, 275 (Ala. 1979) (claim of dissatisfaction with delivery of goods so as to warrant their rejection must be made in good faith, rather than in an effort to escape a bad bargain). A rejection of goods that have been specially manufactured for an insubstantial delay where no damage is caused is arguably not in good faith. " Although the Connecticut Supreme Court has not yet addressed the issue of substantial nonconformity, it has stated, in a precode case, Bradford Novelty Co. v. Technomatic, 142 Conn. 166, 170, 112 A.2d 214 (1955), that although '[t]he time fixed by the parties for performance is, at law, deemed of the essence of the contract' where, as here, goods have been specially manufactured, 'the time specified for delivery is less likely to be considered the essence . . . [since] in such a situation there is a probability of delay, and the loss to the manufacturer is likely to be great if the buyer refuses to accept and pay because of noncompliance with strict performance.' " After reviewing the case law in Connecticut, this court finds that in cases where the nonconformity involves a delay in the delivery of specially manufactured goods, the law in Connecticut requires substantial nonconformity for a buyer's rejection under 2-601, and precludes a dismissal for failure to state a claim on the grounds that the perfect tender rule, codified at 2-601, demands complete performance. Rather, Connecticut law requires a determination at trial as to whether a 16-day delay under these facts constituted a substantial nonconformity." (Footnote omitted.) D.P. Technology Corp. v. Sherwood Tool, Inc., supra, 751 F.Supp. 1042-43; But see, Breakfast Woodworks, Inc. v. National Cabinet & Millworks Installation, Inc., LLC, Superior Court, judicial district of New Haven, Docket No. CV-11-6021964-S, (November 16, 2012, Corradino, J.) (The court noted: " [t]here have been only five reported cases discussing § 42a-2-601, the last case being decided in 1998. Connecticut, however, seems to take a strict view of the perfect tender rule; in Latham Associates v. William Raveis Real Estate, 218 Conn. 297, 302-03, 589 A.2d 337 (1991) it states that 'a rejecting buyer need only demonstrate that the tender of delivery fails in any respect to conform to the contract' under § 42a-2-601"). In the present case, since there was no date or time for tender of delivery stated in the contract, the perfect tender rule would not be applicable because, under § 2-309, Metal Perreault would be required to tender delivery within a reasonable time. What is reasonable, as this court previously discussed, depends on such factors as the nature of the goods to be delivered, the purpose for which they were to be used, the extent of the buyer's intentions, transportation conditions, the nature of the market, etc.; 1 J. White Summer Hillman, § 4:5, 281-82; and under the reasonableness standard, as this court previously found, the delivery was made within a reasonable time. If, however, February 15, 2007, could be construed as the agreed-upon date and time for the first delivery, which Metal Perreault acknowledged in the fax communication of February 14, 2007, would be late, the question then becomes whether Metal Perreault's failure to deliver on time constituted a nonconforming tender of delivery. Based upon the evidence submitted, and applying the principles as enunciated in White, Summers and Hillman and D.P. Technology Corp., a delivery that was three days late would constitute an insubstantial nonconformity and thus, T. Keefe would not be allowed to reject the contract based solely on the late delivery in February. The defendant might argue that based solely on the late delivery alone, it would be entitled to reject the goods under the " perfect tender rule." If the seller fails to conform perfectly to its obligation, the buyer may reject the goods. General Statutes § 42a-2-601(a) provides: " If the goods or the tender of delivery fail in any respect to conform to the contract, the buyer may (a) reject the whole; or (b) accept the whole; or (c) accept any commercial unit or units and reject the rest." (Emphasis added.) White Summers and Hillman " are skeptical of the importance of the perfect tender rule and state that even before the enactment of the Code, the perfect tender rule was in decline, and the Code erodes the rule. First, section 2-601 renders the perfect tender rule inapplicable to installment contracts, and [§ § ]2-612(2) and (3) depend respectively on substantial impairment of the value of a given installment and substantial impairment of the value of the whole contract. The seller's right to cure a defective tender in [§ ]2-508 is a further restriction upon the buyer's apparent right to reject for insubstantial defects under 2-601. Additional restrictions upon the perfect tender rule in 2-601 may be found in 2-504 (an improper shipment contract which causes a late delivery is grounds for rejection only if 'material delay or loss ensues') and in the Code's general invitations to use trade usage, course of dealing, and course of performance in interpretation of contracts. If trade usage states that 19 or 21 items are the equivalent of 20 items, a buyer who receives 19 on a contract calling for 20 has received a perfect tender--one conforming in every respect--and may not reject.
The evidence clearly demonstrates, and the court finds, that there were initial problems with the metal goods for stairs 1 and 4, and that upon discovering the problems, T. Keefe notified Metal Perreault and Metal Perreault attempted to cure by refabricating the metal parts for stair number 4 three times and stair number 1 two times. At no time, however, did T. Keefe notify Metal Perreault that it was rejecting the metal parts, or that after the refabrication, the goods were still nonconforming. Indeed, after refabricating the metal parts for stairs 1 and 4, Metal Perreault redelivered the goods to T. Keefe. After redelivery, T. Keefe accepted and used some of the metal parts by field modifying the parts to fit the stairs. Moreover, T. Keefe failed to notify Metal Perreault of any problems with the metal parts for stairs 2, 3, 5, and 6 or that it had rejected the metal parts. Likewise, T. Keefe neither complained of problems with the structural steel Metal Perreault fabricated for the roof framing as described in breakdown #10, nor did it notify Metal Perreault that it had rejected the structural steel for the roof framing.
D
Nonconforming Goods
Buyer's Rights on Improper Delivery--§ 42a-2-601
Buyer's Right of Rejection--§ 42a-2-602
Seller's Right to Cure--§ 42a-2-508
General Statutes § 42a-2-508, which corresponds to § 2-508 of the Uniform Commercial Code provides: " (1) Where any tender or delivery by the seller is rejected because nonconforming and the time for performance has not yet expired, the seller may seasonably notify the buyer of his intention to cure and may then within the contract time make a conforming delivery. (2) Where the buyer rejects a nonconforming tender which the seller had reasonable grounds to believe would be acceptable with or without money allowance the seller may if he seasonably notifies the buyer have a further reasonable time to substitute a conforming tender."
" When the seller has the right to make a curative tender and the buyer improperly refuses to accept the tender, the buyer is not entitled to damages for breach of contract or breach of warranty with respect to the goods tendered. Travelers Indemnity Co. v. MAHO Machine Tool Corp., supra, 952 F.2d at 30; cf. Plateq Corp. v. Machlett Laboratories, Inc., 189 Conn. 433, 442-43, 456 A.2d 786 (1983); 3A R. Anderson, supra, § § 2-508:28, 2-508:29.
" However, '[t]he seller's right to cure, as provided in [§ 2-508], is in terms limited to the situation where nonconforming goods have been rejected by the buyer.' Bonebrake v. Cox, 499 F.2d 951, 957 (8th Cir. 1974); Jensen v. Seigel Mobile Homes Group, 105 Idaho 189, 193, 668 P.2d 65 (1983); accord Berning v. Drumwright, 122 Idaho 203, 208, 832 P.2d 1138 (1992); Coyle Chevrolet Co. v. Carrier, 397 N.E.2d 1283, 1289 (Ind.App. 1979); Fleet Maintenance, Inc. v. Burke Energy Midwest Corp., 11 Kan.App.2d 523, 524-25, 728 P.2d 408 (1986); Linscott v. Smith, 3 Kan.App.2d 1, 4, 587 P.2d 1271 (1978); Johannsen v. Minnesota Valley Ford Tractor Co., Inc., 304 N.W.2d 654, 657 (Minn. 1981); 3A R. Anderson, supra, § 2-508:6. There is no right to cure after goods have been accepted. Jensen v. Seigel Mobile Homes Group, supra, at 193, 668 P.2d 65; Berning v. Drumwright, supra, at 208-09, 832 P.2d 1138." (Emphasis added.) Dunleavey v. Paris Ceramics, U.S.A. Inc., 47 Conn.Supp. 565, 571-72, 819 A.2d 945 (2002), aff'd 97 Conn.App. 579, 905 A.2d 703 (2006).
The defendant in its post-trial brief characterizes the metal goods shipped by Metal Perreault as having been rejected by it. The court disagrees. The defendant failed to plead any facts in its answer to establish that it had rightfully rejected the goods and gave Metal Perreault notice of the rejection pursuant to § 42a-2-602. Nor did the defendant prove that it had rightfully rejected the goods.
" The 'elements for a common law breach of contract action are the formation of an agreement, performance by one party, breach of the agreement by the other party and damages.' (Internal quotation marks omitted.) Rosato v. Mascardo, 82 Conn.App. 396, 411, 844 A.2d 893 (2004). Breach of contract actions involving the sale of goods, however, are governed by Article II of the UCC and require the parties to plead and prove additional facts. See Bead & Chain Mfg. Co. v. Saxton Products, Inc., 183 Conn. 266, 270, 439 A.2d 314 (1981). Under the UCC, [if the goods or the tender of delivery fail in any respect to conform to the contract], the buyer may '(a) reject the whole; or (b) accept the whole; or (c) accept the commercial unit or units and reject the rest.' General Statutes § 42a-2-601. Yet, '[r]ejection of goods must be within a reasonable time after the delivery or tender' and 'is ineffective unless the buyer seasonably notifies the seller.' General Statutes § 42a-2-602(1). Additionally, 'if the buyer has before rejection taken physical possession of goods in which he does not have a security interest . . . he is under a duty after rejection to hold them with reasonable care at the seller's disposition for a time sufficient to permit the seller to remove them.' General Statutes § 42a-2-602(2)(b). Additionally, 'if the seller gives no instructions within a reasonable time after notification of rejection, the buyer may store the rejected goods for the seller's account or re-ship them to him.' General Statutes § 42a-2-604." Kelly Container, Inc. v. Wellington Best Foods, Inc., Superior Court, judicial district of Hartford, Docket No. CV05 4015964, (January 3, 2007, J.T.R., Hale) .
T. Keefe's counterclaim in which it attempted to plead that it rejected the goods because the goods were nonconforming, was stricken by the court and T. Keefe did not replead or attempt to amend its answer prior to trial. Furthermore, the evidence does not support a finding that T. Keefe rightfully rejected the goods since it failed to seasonably notify Metal Perreault that it was rejecting the goods because it accepted the goods by field modifying and using the goods and discarding the remainder of the goods that it did not use. There is no evidence that T. Keefe had a security interest in the metal goods. Thus, since T. Keefe had physically taken possession of the metal goods, in addition to notifying Metal Perreault of rejection, it was " under a duty to hold the goods with reasonable care at Metal Perreault's disposition for a time to permit Metal Perreault to remove the goods." General Statutes § 42a-2-602(2). Instead, T. Keefe accepted the goods, used some of the goods and scrapped the remainder of the goods it did not use.
With respect to the procedural requirements for rejection of nonconforming goods, White, Summers and Hillman state: " [The] Code imposes two procedural requirements for rejections. Under 2-602 [which is the same as § 42a-2-602], a rejection must be 'within a reasonable time' after delivery or tender of the goods, and it is 'ineffective unless the buyer seasonably notifies the seller . . .' Although the Code does not require written notice, buyers who have depended on non-written notice, or on equivocal notice, have not fared well in the courts. [White Summers and Hillman] counsel that notice be written, unequivocal, and sufficiently detailed." 1 J. White et al., supra 9:11, 791, 792.
" In Genesis Health Clubs, Inc. v. LED Solar & Light Co., 83 U.C.C. Rep. Serv.2d 293 (D.Kan. 2014), cert. denied, 2014 WL 3025441 (D.Kan. 2014), a buyer of lights did not make an effective rejection of the goods because the buyer 'cited no evidence that it gave any notice to the defendant seller that it was rejecting the goods' as required by § 2-601(1). In fact, the buyer's argument that it gave notice of breach under § 2-607(3) supported the conclusion that the buyer had accepted the lights, 'as that subsection addresses notice of breach after acceptance.' The buyer provided evidence that he contacted the seller about alleged defects with the lights, however there was no evidence of communication that the contract was canceled or that acceptance of the lights was being rejected. Moreover, the buyer used some of the lights, 'and such use without compensation . . . is inconsistent with ownership of the lights' by the seller under § 2-601(1). Therefore, the buyer was not entitled to cancel the parties' contract and recover the purchase price under § 2-711(2). Here, the court concluded that the buyer did not reject or revoke acceptance of the goods." (Emphasis added.) See 1 J. White et al., § 9:11, p. 141, Supplement (2015); see also, Parkwood Lumber, Inc. v. Rivisco, Inc., United States Court of Appeals, Docket No. 99-7331, (2d Cir. January 14, 2000) (" 'Rejection of goods must be within a reasonable time after their delivery or tender. It is ineffective unless the buyer seasonably notifies the seller.' UCC § 2-602(1); see also Import Traders, Inc. v. Frederick Manufacturing Corp., 117 Misc.2d 305, 307, 457 N.Y.S.2d. 742, 743 (N.Y.Civ.Ct. 1983) (buyer's rejection was not seasonable when he complained of nonconformity five months after tender). The evidence amply supported the court's finding that Rivisco had a reasonable opportunity to inspect the lumber tendered by Parkwood, that Rivisco failed to reject the lumber within a reasonable time, and that Rivisco hence had accepted the lumber"). See also, Maggio Importato, Inc. v. Cimitron, Inc., 189 A.D.2d 654, 592 N.Y.S.2d 325, (1st Dep't 1993) appeal denied, 82 N.Y.2d 652, 619 N.E.2d 660, 601 N.Y.S.2d 582 (1993) (mere complaint does not constitute unequivocal rejection); Performance Motors, Inc. v. Allen, 280 N.C. 385, 396-97, 186 S.E.2d 161, (1972) (statement that mobile home " not right" did not meet notice requirements); Oda Nursery, Inc. v. Garcia Tree & Lawn, Inc., 1985- NMSC 098, 103 N.M. 438, 440-41, 708 P.2d 1039 (1985) (telephone call that goods did not look " up to snuff" not notice of rejection).
Here, not only did T. Keefe fail to plead the requisite facts to demonstrate that it rejected the goods, it also failed to prove that it rejected the goods in accordance with § 42a-2-601(1). The evidence elicited at trial demonstrates that although T. Keefe complained of defects contained in the metal parts for stairs 1 and 4, it never notified Metal Perreault either in writing or orally that it was rejecting the goods. Although T. Keefe allowed Metal Perreault to refabricate the metal parts for stairs 1 and 4, it failed to effectively reject the parts. T. Keefe used some of the metal parts and discarded the remainder. Likewise, with respect to stairs 2, 3, 5 and 6, and the structural steel for breakdown number 10, T. Keefe neither complained about the metal parts nor rejected them.
The evidence demonstrates that T. Keefe accepted the goods, and thus, once T. Keefe accepted the goods, it did not effectively reject them. Therefore, once T. Keefe accepted the goods, there was no right to cure. Moreover, " [a]lthough rejection is not comprehensively defined in the Uniform Commercial Code; Ramirez v. Autosport, 88 N.J. 277, 288, 440 A.2d 1345 (1982); it is inconsistent with acceptance. See Dunleavey v. Paris Ceramics, U.S.A., Inc., supra, 47 Conn.Supp. 572. Here, the evidence clearly demonstrates that T. Keefe failed to rightfully reject the goods, and therefore it accepted them.
E
Acceptance of Goods--§ 42a-2-606 and § 42a-2-607
" Acceptance of goods occurs when the buyer (a) after a reasonable opportunity to inspect the goods signifies to the seller that the goods are conforming or that he will take or retain them in spite of their nonconformity; or (b) fails to make an effective rejection as provided by subsection (1) of section 42a-2-602, but such acceptance does not occur until the buyer has had a reasonable opportunity to inspect them; or (c) does any act inconsistent with the seller's ownership; but if such act is wrongful as against the seller it is an acceptance only if ratified by him." General Statutes § 42a-2-606. " Acceptance of goods by the buyer precludes rejection of the goods accepted . . ." General Statutes § 42a-2-607(2).
Here, T. Keefe accepted the goods. T. Keefe notified Metal Perreault of the problems it had with the metal parts for stairs 1 and 4, and allowed Metal Perreault to refabricate the parts. T. Keefe, however, never effectively rejected the goods by providing Metal Perreault with notice of rejection. With respect to the metal parts for stairs 2, 3, 5, and 6, and the structural steel for the roof framing, T. Keefe neither complained to Metal Perreault about problems it was experiencing with these parts, nor notified Metal Perreault that it was rejecting the parts. In early June 2007, after T. Keefe had accepted the goods and used them, did it notify Metal Perreault that it was canceling the contract.
T. Keefe accepted the goods, did not notify Metal Perreault that it was rejecting them, and used some of the goods to fit the stairs. Although use of tendered goods for a short time is not necessarily acceptance; see generally Latham & Associates, Inc. v. William Raveis Real Estate, Inc., 218 Conn. 297, 589 A.2d 337 (1991); see also Contoura Business Products, Inc. v. TLD, Inc., 1 Conn.App. 690, 691, 474 A.2d 1265 (1984); here, the totality of circumstances clearly evidences acceptance. See Quiet Automatic Burner Corp. v. Wetstone, 143 Conn. 276, 279, 121 A.2d 635 (1956) (buyer's conduct, after delivery of goods, in ordering carrier to deliver goods to third party was inconsistent with seller's ownership and justified finding of acceptance to buyer); Urbansky v. Kutinsky, 86 Conn. 22, 27, 84 A. 317 (1912). T. Keefe's failure to notify Metal Perreault that it was rejecting the goods, as well as its use of the goods was inconsistent with Metal Perreault's ownership, and is evidence of acceptance. Accordingly, this court finds that T. Keefe accepted the goods.
F
Revocation of Acceptance--§ 42a-2-608
This court must again point out that the defendant did not plead revocation in its answer. As previously noted, the court (Woods, J.) struck the defendant's counterclaim which attempted to allege various claims under the UCC. The defendant failed to re-plead, and further, did not seek an amendment of its answer prior to trial. " Under the code, a buyer's revocation of acceptance is a distinct cause of action, not to be confused with rescission by mutual consent; . . . nor is it an alternative remedy for breach of warranty . . ." Conte v. Dwan Lincoln-Mercury, Inc., 172 Conn. 112, 119, 374 A.2d 144 (1976). Here, the defendant failed to plead a cause of action for revocation of acceptance under § 42a-2-608. However, even if the defendant had pled a cause of action under § 42a-2-608, the claim would fail since there is no evidence that T. Keefe revoked its acceptance of the goods.
General Statutes § 42a-2-608 provides: " (1) The buyer may revoke his acceptance of a lot or commercial unit whose nonconformity substantially impairs its value to him if he has accepted it (a) on the reasonable assumption that its nonconformity would be cured and it has not been seasonably cured; or (b) without discovery of such nonconformity if his acceptance was reasonably induced either by the difficulty of discovery before acceptance or by the seller's assurances. (2) Revocation of acceptance must occur within a reasonable time after the buyer discovers or should have discovered the ground for it and before any substantial change in condition of the goods which is not caused by their own defects. It is not effective until the buyer notifies the seller of it. (3) A buyer who so revokes has the same rights and duties with regard to the goods involved as if he had rejected them." " Whether goods are substantially impaired by nonconformity and whether revocation of acceptance is given within a reasonable time are questions of fact subject to the [trier of fact's] determination . . ." (Citations omitted.) Conte v. Dwan Lincoln-Mercury, Inc. supra, 172 Conn. 121.
(i)
Substantial Impairment--§ 42a-2-608(1)
The court must first determine substantial impairment as a factual matter. " The test for substantial impairment is both subjective and objective: it focuses first, on the needs and circumstances of the particular buyer seeking to revoke, and then considers whether, from an objective standpoint, the value of the goods to the buyer has in fact been impaired." Web Press Services, Corp. v. New London Motors, Inc., 203 Conn. 342, 346-47, 525 A.2d 57 (1987). " Each case must be examined on its own merits to determine what is a 'substantial impairment of value' to the particular buyer." Conte v. Dwan Lincoln-Mercury, Inc., supra, 172 Conn. 121. " The subjective component of the test takes into consideration the particular buyer's needs and expectations. The objective element focuses on the actual defects, which must not be trivial or insubstantial." Kesner v. Lancaster, 180 W.Va. 607, 612, 378 S.E.2d 649 (1989).
First, with respect to the metal parts for stairs 2, 3, 5 and 6, and the structural parts for the roof framing in breakdown number 10, there is simply not enough evidence from which the court can conclude that there was any nonconformity in the goods that substantially impaired the value of the entire shipment of goods to T. Keefe. There is no evidence to show that, after these parts were delivered, T. Keefe notified Metal Perreault of any defects or problems. The evidence demonstrates that after the parts were delivered, T. Keefe accepted the parts and used them. T. Keefe failed to demonstrate that there was any nonconformity in the metal goods for stairs 2, 3, 5, and 6 or in the structural metal for the roof framing in breakdown number 10, upon which it could base a revocation of acceptance of those goods. Furthermore, T. Keefe did not return the goods to Metal Perreault, but rather accepted the goods and used them which is inconsistent with Metal Perreault's ownership, and which undermines any claim that the value of the goods to T. Keefe was substantially impaired.
With respect to the metal parts for stairs 1 and 4, when the parts were initially delivered, T. Keefe notified Metal Perreault of problems with the parts. Metal Perreault refabricated the parts and redelivered the refabricated parts to T. Keefe. T. Keefe accepted the refabricated parts, used them and did not notify Metal Perreault of any further problems. The court cannot conclude from this evidence that the metal parts for stairs 1 and 4 substantially impaired the value of the goods shipped to T. Keefe because after Metal Perreault refabricated the parts, T. Keefe accepted the goods, used them, did not return them, and did not notify Metal Perreault of any further problems.
T. Keefe did not substantiate any measurable losses it sustained as a result of any nonconformity. Although T. Keefe submitted a spread sheet containing expenses it claims it incurred as a result of the claimed defective metal parts, as this court will discuss in its discussion of damages, T. Keefe did not present any evidence of payment of the outstanding amounts. Additionally, T. Keefe's invoices submitted as proof of expenses it claims it incurred for replacing defective steel were overstated by $104,185.79 which puts into doubt the credibility of all of the losses it claims it incurred as a result of the claimed defective parts. Thus, the court cannot conclude on the evidence before it, that there was any nonconformity that substantially impaired the value of the metal parts for stairs 1, 2, 3, 4, 5 and 6 and the structural steel for the roof framing for breakdown number 10 to T. Keefe.
Even if T. Keefe had proven that there was a nonconformity that substantially impaired the value of the goods to it, there is no evidence that the goods were accepted on the reasonable assumption that Metal Perreault would cure the nonconformity and that the nonconformity was not seasonably cured. See General Statutes § 42a-2-608(1)(a). With respect to the metal parts for stairs 2, 3, 5, and 6 and the structural metal for the roof framing, the only evidence before this court is that T. Keefe accepted the goods and failed to notify Metal Perreault of any problems with those parts.
With respect to stairs 1 and 4, Metal Perreault refabricated the parts, after which T. Keefe accepted and used the parts and did not notify Metal Perreault of any further problems. Thus, there is no evidence that after Metal Perreault refabricated the metal parts for stairs 1 and 4, that T. Keefe accepted the refabricated parts under the reasonable assumption that Metal Perreault would further cure. See General Statutes § 42a-2-608(1)(a). In addition, T. Keefe was aware of the problems it was having with the metal parts for stairs 1 and 4, and there is no evidence that its acceptance of those metal parts after it discovered the problems, was induced by any assurances made by Metal Perreault to further cure and that Metal Perreault failed to do so. General Statutes § 42a-2-608(1)(b). Indeed, the evidence demonstrates that T. Keefe accepted the goods and used them because it was under a time constraint to complete its obligations under the contract it had with Perini. See Def. Ex. E. In its letter to Perini explaining the reasons for the stop work order with Metal Perreault, T. Keefe concedes that it did not notify Metal Perreault of further problems. The letter states: " [s]ome sections of the handrail were fabricated three times and all three times fail to meet standards required for installation . . . If time was not an issue, T. Keefe and Son, LLC would have sent the incorrectly fabricated materials back for a third time and would have had Metal Perreault refabricate all materials." Def. Ex. E. Clearly T. Keefe did not accept the nonconforming goods under the reasonable assumption that Metal Perreault would further cure, or based upon any assurances made by Metal Perreault that it would further cure. T. Keefe accepted and used the goods without notifying Metal Perreault of further problems because " time was an issue." Id.
(ii)
Notice--§ 42a-2-608(2)
Even if T. Keefe had pled or proven " substantial impairment, " it still failed to give Metal Perreault any notice of revocation of acceptance of the goods. " Not only must there be a substantial impairment of value to the buyer, but the revocation must take place 'within a reasonable time after the buyer discovers or should have discovered' the defect. General Statutes § 42a-2-608(2). 'What is a reasonable time for taking any action [under the code] depends on the nature, purpose and circumstances of such action.' [§ ]42a-1-204(2)." Conte v. Dwan Lincoln-Mercury, Inc., supra, 172 Conn. 122.
Section 42a-2-608(2) provides that a buyer's revocation of acceptance " is not effective until the buyer notifies the seller of it." " Comment 5 to this subsection states '5. The content of the notice under subsection (2) is to be determined in this case as in others by consideration of good faith, prevention of surprise, and reasonable adjustment.' At § 8-4, page 572 of Volume 1, Uniform Commercial Code, 5th ed. White and Summers cite cases to the effect that: 'One line of cases between merchants holds that the essential content of the notice of revocation must set forth " the nonconformity in the goods materially impairing their value to the buyer." The notice must inform the seller that the buyer does not wish to keep the goods . If the buyer equivocates in word or in deed, his purported revocation may be invalid. While the buyer's notice of revocation needs to be unequivocal, it need not be formal.' See HCI Chemicals, Inc. v. Henkel, 966 F.2d 1018, 1023 (C.A.5, 1992); Agrarian Grain Co. v. Meeker, 526 N.E.2d 1189, 1191 (2nd App.) (actual knowledge by seller buyer is dissatisfied with goods does not unequivocally equate with revocation even where buyer stops payment). Another case cited in White and Summers says ' . . . notice of breach of revocation of acceptance. While the latter need not be in any particular form, it must inform the seller that the buyer does not wish to keep the goods.' Allis-Chalmers Corp. v. Sygitowicz, 18 Wash.App. 658, 571 P.2d 224, 226 (Ct. of App. Wash., 1977)." (Emphasis added.) Leshine Carton Co., Inc. v. Matik of North America, Superior Court, judicial district of New London, Docket No. CV054007646S, (November 19, 2008, Corradino, J.T.R.).
It is clear that as early as February 2007, T. Keefe upon receiving the goods for stairs 1 and 4, and after reasonable inspection, discovered a problem and notified Metal Perreault. T. Keefe was aware of the problems, allowed Metal Perreault to refabricate the parts, however, even after its dissatisfaction with Metal Perreault's refabrication, T. Keefe still accepted the goods, used some of them and " scrapped" the remainder. After accepting the refabricated parts, T. Keefe never notified Metal Perreault that it was revoking its acceptance of the parts. With respect to stairs 2, 3, 5, 6 and breakdown number 10, there is no credible evidence of any complaints T. Keefe made to Metal Perreault about these parts. T. Keefe, therefore, accepted the parts and did not, after acceptance, notify Metal Perreault of any problems with the goods relating to stairs 2, 3, 5, 6 and breakdown number 10 or that it was revoking its acceptance of the goods. T. Keefe failed to notify Metal Perreault that it wished to return the goods and revoke its acceptance.
Moreover, neither does T. Keefe's June 2007 cancellation of the contract constitute reasonable notice of revocation of its acceptance of the goods. T. Keefe was well aware of the problems with the metal parts for stairs 1 and 4 in February 2007, three months prior to its cancellation, yet it neither effectively rejected the parts nor notified Metal Perreault, after the refabrication of stairs 1 and 4, that it was rejecting the goods. T. Keefe used the goods and discarded the rest. Because T. Keefe had knowledge of the problems with the steel parts as early as February 2007, its notice of cancellation to Metal Perreault in June 2007 was not seasonable and thus, it failed to revoke its acceptance of the goods.
Finally, T. Keefe's right to revoke acceptance of the goods expired when it modified and then discarded the goods. " [T]he buyer's right to revoke acceptance automatically expires under [§ 42a-]2-608(2) if the goods undergo a substantial change in condition 'which is not caused by their own defects.' According to Comment 6, a buyer should not be allowed to revoke acceptance of goods that have 'materially deteriorated in the buyer's hands except when the deterioration is attributable to original 'defects' in the goods. Examples of such 'deterioration' not attributable to original defects are buyer's cutting of a fabric, buyer's use of the goods after modifying them, buyer's cutting of goods into narrow strips in accord with specifications of sub-purchaser, and buyer's knitting defective yarn." (Emphasis added) 1 J. White et al., supra, § 9:18, pp. 816-17 (2012). Here, the evidence shows that the goods had materially deteriorated in T. Keefe's hands since they field modified the parts by cutting them to fit, and they discarded the goods that they did not use.
T. Keefe failed to notify Metal Perreault that it wished to return the goods and that it was revoking its acceptance. Accordingly, even if T. Keefe had properly pled a cause of action for revocation of acceptance pursuant to General Statutes § 42a-2-608, it failed to prove that it revoked acceptance of goods it claimed were nonconforming.
F
Remedies
(i)
Seller's Remedies--Action to Recover Price--§ 42a-2-709
As the court has determined that T. Keefe failed to effectively reject the nonconforming goods because it accepted the goods, and that it did not properly revoke its acceptance of the goods, T. Keefe is in breach of the contract for failure to pay the agreed-upon contract price of the goods.
The court must now determine the available remedies. As assignee of the contract, the plaintiff is entitled to whatever remedies were available to Metal Perreault as the seller/assignor. General Statutes § 42a-2-709 details a cause of action for a seller to recover the price of goods. Under General Statutes § 42a-2-709 (1)(a), " [w]hen the buyer fails to pay the price as it becomes due the seller may recover . . . the price of goods accepted . . ." Similarly, General Statutes § 42a-2-607 (1) provides that " [t]he buyer must pay at the contract rate for any goods accepted." " As prerequisites to recovery, therefore, a seller must establish acceptance by the buyer of goods sold and delivered, as well as the failure of the buyer to fulfill his payment obligation . . ." Swift & Company v. Rexton, Inc., 187 Conn. 540, 542, 447 A.2d 9 (1982).
Here, the court has already found, based upon the evidence submitted, that the defendant accepted the goods tendered by Metal Perreault. Additionally, there was evidence submitted establishing that the contract price of the goods accepted by the defendant is $189,500, and that the defendant has not paid any amount of this price. Thus, the plaintiff is entitled to the contract price. Although the plaintiff is entitled to the contract price, the buyer is entitled to damages, if it can demonstrate that it has been damaged by the nonconformity of the goods accepted.
(ii)
Buyer's Remedies--§ 42a-2-607(3); § 42a-2-714; § 42a-2-715
Since the court has found that T. Keefe did not effectively reject the goods because it accepted the goods, and that it failed to revoke its acceptance, it would not be able to avail itself of the buyer's remedies contained in § 42a-2-711, since that provision of the code sets forth the available remedies to a buyer who rightfully rejects or justifiably revokes its acceptance of the goods. According to the official comment to § 42a-2-711: " The remedies listed here are those available to a buyer who has not accepted the goods or who has justifiably revoked his acceptance." " Once the 'seller fails to make a delivery or repudiates or the buyer rightfully rejects or justifiably revokes acceptance . . . the buyer may resort to the remedies identified in [42a-2-711] . . . Section [42a-2-711] gives the buyer the right to cancel the contract 'with respect to any goods involved, and with respect to the whole if the breach goes to the whole contract.'" Here, there is no evidence that Metal Perreault failed to deliver the metal goods it promised to deliver to T. Keefe under the contract or that it repudiated. Furthermore, there is no evidence that T. Keefe rightfully rejected the goods or justifiably revoked acceptance of the goods. Thus, the remedies available under § 42a-2-711 are not applicable here. Likewise, the buyer's remedies set forth in § 42a-2-713 are not applicable here since those remedies apply where there is nondelivery or repudiation by the seller.
Although the plaintiff is entitled to the contract price of the goods accepted by T. Keefe, T. Keefe, as the buyer, and if properly pled and proven, is entitled to a remedy. " Acceptance does not, however, constitute a definitive election to waive all claims and defenses with respect to the accepted goods. If the buyer can demonstrate that he has been damaged by the nonconformity of the goods that he has accepted, he is entitled to recover such damages as he can prove. General Statutes § § 42a-2-607(3), 42a-2-714. Alternatively, if the buyer can demonstrate that the goods are substantially nonconforming, he is entitled, with some qualifications, to revoke his acceptance and recover the purchase price. General Statutes § 42a-2-608. Whichever route the buyer elects, he is required to give timely notice to the seller within a reasonable time after he discovers or should have discovered the seller's breach. General Statutes § § 42a-2-607(3)(a), 42a-2-608(2)." (Footnotes omitted.) Superior Wire & Paper Products, Ltd. v. Talcott Tool & Machine, Inc., 184 Conn. 10, 13-14, 441 A.2d 43 (1981); see also Sun Hill Industries, Inc. v. Kraftsman Group, Inc., 27 Conn.App. 688, 694-95, 610 A.2d 684 (1992) (same). The court has already determined that T. Keefe failed to revoke its acceptance of the goods under § 42a-2-608.
General Statutes § 42a-2-607 (" Effect of acceptance; notice of breach; burden of establishing breach after acceptance; notice of claim or litigation to person answerable over") is a general provision that sets out the circumstances after a buyer's acceptance and a buyer's options when it discovers breach after acceptance. Section 42a-2-607 provides in relevant part: " (1) The buyer must pay at the contract rate for any goods accepted. (2) Acceptance of goods by the buyer precludes rejection of the goods accepted and if made with knowledge of a nonconformity cannot be revoked because of it unless the acceptance was on the reasonable assumption that the nonconformity would be seasonably cured but acceptance does not of itself impair any other remedy provided by this article for nonconformity. (3) Where a tender has been accepted (a) the buyer must within a reasonable time after he discovers or should have discovered any breach notify the seller of breach or be barred from any remedy . . . (4) The burden is on the buyer to establish any breach with respect to the goods accepted."
" [Section 42a-2-607(3)] sets up a condition precedent to a buyer's right to recover . . . The buyer must plead and prove the giving of notice . . .' . . . [C]omplaints as to the quality of goods furnished may be found to constitute a sufficient notice of a breach . . . But that can be true only where the complaints under all the circumstances of the case are such as reasonably to apprise the seller that the buyer intends to claim damages for the breach." (Citation omitted; internal quotation marks omitted.) (Emphasis added.) Western Dermatology Consultants, P.C. v. Vital Works, Inc., 146 Conn.App. 169, 182-83, 78 A.3d 167 (2013), aff'd in part, rev'd in part on other grounds, 322 Conn. 541, 143 A.3d 564 (2016) (concluding that buyer did not notify seller in writing of breach of contract or of its intention to claim damages resulting from breach and, therefore, there was no notice of breach such that would entitle buyer to damages); see also Hinchliffe v. American Motors Corp., 184 Conn. 607, 621-22, 440 A.2d 810 (1981) (finding that buyer bringing vehicle back to seller five times to fix air conditioning system constituted sufficient notice of breach under § 42a-2-607(3)); Stelco Industries, Inc. v. Cohen, supra, 182 Conn. 565-66 (finding that oral complaints of defective goods and testimony at trial confirming receipt of complaints satisfied § 42a-2-607(3)).
Again, fatal to the defendant's claim that it is not liable to the plaintiff for the contract price, is its failure to set forth in its pleadings a claim for breach of contract under the UCC. The defendant's sole special defense is accord and satisfaction which simply alleges that " [t]he Defendant paid all sums due under the contract." If the defendant wished to claim damages for nonconforming goods that it accepted under the contract with Metal Perreault, it should have sufficiently pled facts in accordance with the notice requirements set forth in § 42a-2-607(3) to establish that claim. Moreover, as this court just noted, General Statutes § 42a-2-607(3) " sets up a condition precedent to a buyer's right to recover . . . The buyer must plead and prove the giving of notice." (Citation omitted; emphasis added.) De Lucia v. Coca-Cola Bottling Co of Conn., 139 Conn. 65, 67, 89 A.2d 749 (1952). Section 42a-2-607(3)(a) provides that " [w]here a tender has been accepted . . . the buyer must within a reasonable time after he discovers or should have discovered any breach notify the seller of breach or be barred from any remedy." A seller is deemed to have notice if he " (1) [h]as actual knowledge of it; (2) [h]as received a notice or notification of it; or (3) [f]rom all the facts and circumstances known to the person at the time in question, has reason to know that it exists." General Statutes § 42a-4-202(a). " The standard by which notice is measured for the purposes of § 42a-2-607(3)(a) is not as rigorous a standard as that which governs notice of rejection . . ." Stelco Industries, Inc. v. Cohen, supra, 182 Conn. 565.
With respect to the content of the notice, Official Comment 4 to § 42a-2-607 states, " The content of the notification need merely be sufficient to let the seller know that the transaction is still troublesome and must be watched. There is no reason to require that the notification which saves the buyer's rights under this section must include a clear statement of all the objections that will be relied on by the buyer, as under the section covering statements of defects upon rejection . . . Nor is there reason for requiring the notification to be a claim for damages or of any threatened litigation or other resort to a remedy. The notification which saves the buyer's rights under this Article need only be such as informs the seller that the transaction is claimed to involve a breach, and thus opens the way for normal settlement through negotiation." See also Stelco Industries, Inc. v. Cohen, supra, 182 Conn. at 565-66 (" 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"). " [C]omplaints as to the quality of goods furnished may be found to constitute a sufficient notice of a breach of warranty. But that can be true only where the complaints under all the circumstances of the case are such as reasonably to apprise the seller that the buyer intends to claim damages for the breach." (Emphasis added.) Truslow & Fulle, Inc. v. Diamond Bottling Corp., 112 Conn. 181, 189, 151 A. 492 (1930).
General Statutes § 42a-2-714 specifically sets out a buyer's damages with regard to accepted goods. It provides in relevant part: " (1) Where the buyer has accepted goods and given notification as provided in subsection (3) of section 42a-2-607 he may recover as damages for any nonconformity of tender the loss resulting in the ordinary course of events from the seller's breach as determined in any manner which is reasonable . . . (3) In a proper case any incidental and consequential damages under the next section [42a-2-715] may also be recovered." (Emphasis added.). " If [the buyer] want[s] to rely on the right conferred by § 42a-2-607 to sue for damages flowing from the acceptance of nonconforming goods, [the buyer] must show not only that the goods were nonconforming, but that their nonconformity has resulted in measurable damages . . . Unless the goods delivered were totally worthless, [§ § 42a-2-714 and 42a-2-715] do not authorize recovery by the buyer as damages of the purchase price previously paid to the seller . . . Rather, they contemplate that the buyer will prove an offset to the purchase price . . . although the offset may, because of consequential losses, if proven, exceed the purchase price in amount." (Citations omitted.) Superior Wire & Paper Products, Ltd. v. Talcott Tool & Machine, Inc., supra, 184 Conn. 15; see also General Statutes § 42a-2-717 (" Deduction of damages from the price").
To the extent that the buyer uses nonconforming goods, our Appellate Court has concluded that such use precludes the buyer from deducting its damages as a result of the nonconforming goods from the contract price as provided in § 42a-2-607. Sun Hill Industries, Inc. v. Kraftsman Group, Inc., supra, 27 Conn.App. 688, 698-99 (" [A]ccording to § 42a-2-607, after acceptance, the plaintiff was liable to the defendant for payment of the cartons at the contract rate. The plaintiff had to establish that the cartons were nonconforming in order to avoid liability for the contract rate of the cardboard display cartons. The testimony by the plaintiff's president that 2131 cardboard display cartons were used entitled the defendant to recover the cost of those cartons. If the plaintiff used these 2131 cardboard display cartons in its business, it would be unable to establish that they were nonconforming and unfit for their intended purpose. The defendant need not show that the plaintiff benefitted from using the cartons manufactured by the defendant. If the plaintiff accepted and used the cartons, it has to pay the defendant the contract price. The defendant was not required to establish which cartons were conforming and capable of being used by the plaintiff to be entitled to recover the contract price of those cartons. The defendant was entitled to recover on its counterclaim the cost of at least the 2131 cartons used by the plaintiff. We remand this case to the trial court for a hearing to determine how many cartons were in fact nonconforming. The plaintiff must establish which cartons were nonconforming to avoid being liable for the contract price to the defendant").
In addition, to the extent that the buyer uses nonconforming goods, as this court has previously discussed, our Appellate Court has concluded that such use constitutes acceptance in accordance with General Statutes § 42a-2-606 (" What constitutes acceptance of goods"). Id., 693-94. (" [T]here was testimony by the plaintiff's president that 2131 cartons were used by the plaintiff. The [judge trial] referee also found that the plaintiff used the cartons 'for scrap and other purposes.' General Statutes § 42a-2-606 provides that an acceptance of goods occurs when a buyer 'does any act inconsistent with the seller's ownership.' Here, the plaintiff used 2131 cartons and sought an adjustment of the amount owed to the defendant for the cartons actually used. These acts are clearly inconsistent with the defendant's ownership rights. Therefore, the plaintiff did not reject the cartons.")
Here, T. Keefe's answer and sole special defense is devoid of any allegations of a claim for breach of contract under the UCC. T. Keefe has neither pled nor proven a breach by Metal Perreault under the UCC, let alone pled or proven the notice requirements and a claim for damages under § § 42a-2-607(3) and 42a-2-714. T. Keefe, with knowledge that there were problems with the metal parts for stairs 1 and 4, and after Metal Perreault attempted to cure by refabricating the parts, accepted the goods, used some of the goods and never properly notified Metal Perreault of any breach due to any nonconformity, or that it intended to claim damages as a result thereof. Thus, pursuant to § 42a-2-607(3) T. Keefe is barred from any remedy to which it would be entitled pursuant to § 42a-2-714.
Moreover, of the metal parts used by T. Keefe in the construction of stairs 1 and 4, there is insufficient evidence before this court to determine how much of the metal parts accepted and used by T. Keefe were in fact nonconforming. The evidence shows that even after Metal Perreault attempted to cure by refabricating the metal parts for stairs 1 and 4, T. Keefe accepted and used some of those metal parts--notwithstanding any nonconformity--in the construction of stairs 1 and 4. In addition, as this court previously discussed, not only did T. Keefe accept the metal parts for stairs 2, 3, 5, 6 and breakdown number 10, it also failed to notify Metal Perreault of any nonconformity or that there were any problems relating to these metal parts. Like the plaintiff in Sun Hill Industries, the defendant here was required to establish how many metal parts were in fact nonconforming. " If the defendant, [T. Keefe] used the metal parts shipped to it by [Metal Perreault in the construction of the stairs], it would be unable to establish that they were nonconforming and unfit for their intended purpose. The [plaintiff] need not show that the defendant benefitted from using the metal parts [fabricated] by [Metal Perreault]. If the defendant accepted and used the metal parts [which the court finds that it did], it has to pay the [plaintiff] the contract price. The [plaintiff] was not required to establish which metal parts were conforming and capable of being used by the [defendant] to be entitled to recover the contract price of those metal parts." Sun Hill Industries, Inc. v. Kraftsman Group, Inc., supra, 27 Conn.App. 698. Here, because the defendant, T. Keefe failed to establish how many of the metal parts were nonconforming, it cannot avoid being liable for the contract price to the plaintiff. See id., 699. Accordingly, the defendant failed to plead and prove the procedural requirements set forth in § 42a-2-607(3) to claim damages under § 42a-2-714, where the buyer accepts nonconforming goods.
Even if T. Keefe had pled and proven notice under § 42a-2-607(3), it failed to plead and prove any measurable loss of damages pursuant to General Statutes § 42a-2-715. Section 42a-2-715 provides: " (1) Incidental damages resulting from the seller's breach include expenses reasonably incurred in inspection, receipt, transportation and care and custody of goods rightfully rejected, any commercially reasonable charges, expenses or commissions in connection with effecting cover and any other reasonable expense incident to the delay or other breach. (2) Consequential damages resulting from the seller's breach include (a) any loss resulting from general or particular requirements and needs of which the seller at the time of contracting had reason to know and which could not reasonably be prevented by cover or otherwise; and (b) injury to person or property proximately resulting from any breach of warranty." (Emphasis added.)
" The UCC makes a clear distinction between incidental and consequential damages. General Statutes § 42a-2-715, which corresponds to UCC § 2-715, provides that incidental damages include expenses incidental to the seller's breach, while consequential damages includes damages resulting from the seller's breach . . . As the official comment to § 2-715 of the UCC notes, incidental damages are intended to provide reimbursement for the buyer who incurs reasonable expenses in connection with the handling of rightfully rejected goods or goods whose acceptance may be justifiably revoked . . . Consequential damages include lost profits." (Citations omitted; emphasis added; internal quotation marks omitted.) L& L Ever-Green, Inc. v. M.S. Growers, Inc., Superior Court, judicial district of; Docket No. CV-07-5004880-S, (November. 24, 2010, Mottolese, J.T.R.). The official comment to § 2-715 of the UCC provides: " The burden of proving the extent of loss incurred by way of consequential damage is on the buyer, but the section on liberal administration of remedies rejects any doctrine of certainty which requires almost mathematical precision in the proof of loss. Loss may be determined in any manner which is reasonable under the circumstances." The effect of this comment is reflected in our statutes and case law. See e.g., General Statutes § 42a-1-103(a) (" [Title 42a] shall be liberally construed and applied to promote its underlying purposes and policies . . ."); Prishwalko v. Bob Thomas Ford, Inc., 33 Conn.App. 575, 586-87, 636 A.2d 1383 (1994) (" [T]he burden of proving damages is on the party claiming them . . . It is then the province of the trier of fact to weigh the evidence presented and to determine the credibility and effect to be given the evidence" [citation omitted; emphasis in original; internal quotation marks omitted]).
Our appellate authority is not instructive as to what constitutes incidental damages and what constitutes consequential damages. At least one case has suggested that the buyer's costs to repair defective or nonconforming goods are appropriate measures of damages under § § 42a-2-714(3) and 42a-2-715. See Stelco Industries, Inc. v. Cohen, supra, 182 Conn. 566-67. Other jurisdictions have explained the distinction between incidental damages and consequential damages more clearly in similar cases involving their states' laws that have incorporated the UCC or that parallel the UCC.
" In construing [the defendant's] incidental and consequential damages, we note that remedies under the Uniform Commercial Code are to be administered liberally so as to put the aggrieved party in as good a position as if the other party had fully performed. G.L.c. 106, § 1-106. Productora e Importadora de Papel, S.A. de C.V. v. Fleming, 376 Mass. 826, 838, 383 N.E.2d 1129 (1978). The consequential damages include any loss of prospective profits, Matsushita Elec. Corp. of America v. Sonus Corp., 362 Mass. 246, 264, 284 N.E.2d 880 (1972), and incidental damages permit recovery of [the defendant's] reasonable expenses incurred in handling the defective goods. G.L.c. 106, § 2-715. See Uniform Commercial Code § 2-715, comment 11A U.L.A. 446 (1976); J. White & R. Summers, Uniform Commercial Code § 10-3 (2d ed. 1980). See also Bevel-Fold, Inc. v. Bose Corp., 9 Mass.App.Ct. 576, 584, 402 N.E.2d 1104 (1980). Consequential damages are those that cannot be reasonably prevented and arise naturally from the breach, or which are reasonably contemplated by the parties. G.L.c. 106, § 2-715. See J. White & R. Summers, supra at § 10-4. Calculation of damages, however, must not overcompensate the buyer. Id. " (Footnote omitted.) Delano Growers' Co-op. Winery v. Supreme Wine Co., 393 Mass. 666, 679-80, 473 N.E.2d 1066 (1985); see also Hall v. Miller, 143 Vt. 135, 145-46, 465 A.2d 222 (1983) (holding that lost profits were appropriately awarded as damages under state law equivalent to UCC § 2-715); Robert T. Donaldson, Inc. v. Aggregate Surfacing Corp. of America, 366 N.Y.S.2d 194, 196, 47 A.D.2d 852, appeal denied 37 N.Y.2d 793, 337 N.E.2d 612, 375 N.Y.S.2d 106 (1975) (" We note that the jury was properly instructed that plaintiff was entitled, as part of its damages, to a reasonable profit on the repair work it was required to perform, through no fault of its own, as a result of the breach. If another contractor had been hired to perform the repair work it would have been entitled to a profit. [The defendant] should not benefit by depriving plaintiff of a profit on work it was required to perform only because of [the defendant's] breach of warranty").
" Distinguishing incidental damages from consequential damages can be challenging, especially due to the tendency of courts to conflate the two when awarding damages and the difficulty of determining if the damages could have been foreseeable before the breach.
" The court in Petroleo Brasileiro, S.A., Petrobras v. Ameropan Oil Corp. distinguished between incidental and consequential damages this way: 'While the distinction between the two is not an obvious one, the Code makes plain that incidental damages are normally incurred when a buyer (or seller) repudiates the contract or wrongfully rejects the goods, causing the other to incur such expenses as transporting, storing, or reselling the goods. On the other hand, consequential damages do not arise within the scope of the immediate buyer-seller transaction, but rather stem from losses incurred by the non-breaching party in its dealings, often with third parties, which were a proximate result of the breach, and which were reasonably foreseeable by the breaching party at the time of the contracting.'" 1 White, Summers et al., supra, § 7:22, p. 590.
In support of the defendant's claim for damages, it presented a spread sheet entitled " Metal Perreault Chargeback for Incorrect Materials, " dated June 5, 2008, showing an alleged total charge back of $180,881.79. Included in this document, inter alia, are the salary expenses that the defendant claimed it incurred as a result of Metal Perreault's claimed late deliveries of the goods and the need to dismantle the incorrectly fabricated metal. Jason Keefe testified that he kept logs of employee hours that formed the basis of the salary expenses claimed on the charge back spread sheet. However, none of those records were produced at trial.
The defendant also claimed that it was required to purchase steel materials from Logan Steel, Inc. (Logan Steel) to replace defective material that Metal Perreault had delivered. The charge back spread sheet shows a line item entitled, " Replacement materials for stairs Logan Steel w/15%" in the sum of $137,055.41. Upon questioning by the court, Jason Keefe admitted, however, that the invoices from Logan Steel that were originally attached to the spread sheet to support this line item included several invoices for supplies that had nothing to do with the Metal Perreault contract. The only invoices from Logan Steel that related to the Metal Perreault contract work amount to $32,868.62. Keefe further admitted that there was no rational basis for marking up the Logan Steel invoices by 15% because the defendant did not have to pay any such mark up. Thus, the net effect of the inapplicable Logan Steel invoices and the improper markup indicates that the Logan Steel line item in the spread sheet was overstated by $104,185.79. Additionally, no evidence was produced by the defendant to substantiate payment of the relevant invoices from Logan Steel. All of the invoices show unpaid balances.
There are also expenses on the charge back spread sheet for the use of a truck to pick up the replacement materials from Logan Steel in the amount of $840 and the rental of a trailer to pick up materials in the amount of $1,000. The defendant did not submit proof of payment or invoices for these expenses. Additionally, there are claimed line item expenses for consumable materials in the amount of $2,261.42, $5,402.30 and $1,000. The defendant did not provide proof of payment of these claimed expenses. The defendant's charge back spread sheet also contains a line item for " crane charges" in the sum of $1,865.38, which Jason Keefe claimed were incurred as a result of Metal Perreault's failure to make timely deliveries on the agreed-upon delivery dates. The invoice does not give the date of these claimed late deliveries. As previously discussed, the evidence shows that there was only one late delivery on February 18, 2007, three days after the delivery was due, which this court found was reasonable pursuant to § 42a-2-309. Again, the defendant did not submit evidence of proof of payment of these invoices.
Finally, the defendant's spreadsheet also shows an expense for one foreman and two journeymen with an explanation of " no rails showed up" totaling $2,256.48. The defendant submitted evidence of an invoice for the crane rental from " The Smedley Company" for the sum of $957. The spread sheet does not identify which rails did not show up nor did the defendant provide proof of payment to The Smedley Company.
According to the official comment to § 42a-2-715 " [s]ubsection (1) is intended to provide reimbursement for the buyer who incurs reasonable expenses in connection with the handling of rightfully rejected goods or goods whose acceptance may be justifiably revoked, or in connection with effecting cover where the breach of the contract lies in the nonconformity or nondelivery of goods." White, Summers and Hillman describe the types of recoverable incidental damages associated with nonconforming goods rightfully rejected by the buyer, as " the costs of inspecting the goods, as well as storage and transportation expenses." 1 White, Summers et al., supra, 7:23, p. 591. See also, Mitchell Family Development Co., Inc. v. Universal Textile Technologies, LLC, 268 Ga.App. 869, 602 S.E.2d 878, 602 S.E.2d 878 (2004) (testing expenses incurred in inspecting and covering are recoverable as incidental); Keller v. Inland Metals All Weather Conditioning, Inc., 139 Idaho 233, 240, 76 P.3d 977 (2003) (" [buyers] entitled to recover expenses reasonably incurred in inspection, receipt, transportation, care and custody of the dehumidifier and any reasonable expense incident to the delay or breach"); Latex Equipment Sales & Service, Inc. v. Apache Mills, Inc., 225 Ga.App. 516, 484 S.E.2d 274 (1997) (buyer's increased operating expenses related to labor and storage are recoverable). The defendant failed to rightfully reject the goods or justifiably revoke acceptance of the goods. T. Keefe accepted the goods and used the goods and failed to notify Metal Perreault that it was rejecting the goods, or that after accepting the goods it was revoking its acceptance of the goods. It does not appear from the spread sheet that there were costs incurred for inspection, transportation, care and custody or storing of the metal parts. As previously discussed, Jason Keefe testified that the metal parts that were not used were scrapped. There is evidence of labor costs associated with having to move stair number 4 twice due to the metal parts not being correctly fabricated. Again, T. Keefe is not entitled to these incidental costs because it failed to rightfully reject the goods, or justifiably revoke its acceptance of the goods. Likewise, those costs which could be characterized as relating to labor costs in the dismantling and/or reworking the defective metal parts to fit the stairs would not be recoverable, since, again T. Keefe failed to rightfully reject the goods or revoke acceptance of the goods. Moreover, T. Keefe failed to submit evidence of payment of the costs it claimed to have incurred as a result of the dismantling of the defective parts.
Section 42a-2-715(1) allows the buyer to recover incidental damages for " reasonable expenses in connection with effecting cover where the breach of the contract lies in nonconformity or nondelivery of the goods." Here, there was no evidence of nondelivery of the goods at issue.
T. Keefe claims that it rejected the goods because they were nonconforming. However, the evidence demonstrates that T. Keefe accepted the goods and did not effectively reject the goods, or justifiably revoke its acceptance of the goods. Further, as having accepted what it claimed as nonconforming goods, T. Keefe failed to plead or prove notice to Metal Perreault that it was accepting nonconforming goods pursuant to § 42a-2-607(3) in order to claim damages under § 42a-2-714, which allows for incidental and consequential damages. Because T. Keefe accepted the metal goods with knowledge of the problems it was having with the metal goods, and failed to notify Metal Perreault of the nonconformity in accordance with § 42a-2-607(3), it would be barred from claiming any remedy. However, even if T. Keefe had properly pled and proven notice under § 42a-2-607(3), it did not plead or prove any cover damages as incidental damages under § 42a-2-715(1).
The expenses submitted by T. Keefe which might arguably be claimed as incidental damages for costs it incurred to cover, under § 42a-2-715(1), are the invoices T. Keefe submitted into evidence which show the cost for steel parts it claimed it purchased from Logan Steel to replace the alleged defective parts it received from Metal Perreault.
General Statutes § 42a-2-712 provides: " (1) After a breach within the preceding section the buyer may 'cover' by making in good faith and without unreasonable delay any reasonable purchase of or contract to purchase goods in substitution for those due from the seller. (2) The buyer may recover from the seller as damages the difference between the cost to cover and the contract price together with any incidental or consequential damages as defined in section 42a-2-715, but less expenses saved in consequence of the seller's breach. (3) Failure of the buyer to effect cover within this section does not bar him from any other remedy."
Again, as this court has repeatedly stated, fatal to T. Keefe's claim is its failure to plead and prove a breach of contract by Metal Perreault under the UCC or any damages to which it might be entitled as the buyer who has accepted nonconforming goods. This would include any cover damages under § 42a-2-715(1) to which it would be entitled as incidental damages as a result of the nonconforming goods. T. Keefe accepted the metal parts for stairs 1 and 4 after the refabrication without notifying Metal Perreault of any continuing problems it was having with the metal parts, and accepted the parts for stairs 2, 3, 5, and 6 and breakdown number 10 and did not notify Metal Perreault that there were any problems with those metal parts. Moreover, the court cannot discern from the invoices submitted, which metal parts that T. Keefe received from Metal Perreault were replaced by the metal parts it purchased from Logan Steel. Finally, the invoices from Logan Steel that T. Keefe submitted in support of its claim for damages include invoices that are totally unrelated to the contract T. Keefe had with Metal Perreault and overstate T. Keefe's claim by $104,185.79. In addition, there is no evidence that the invoices that are related to the purchase of replacement steel related to the Metal Perreault contract were in fact paid. Accordingly, even if T. Keefe had properly pled and proven a breach of contract under the UCC it failed to prove any cover damages to which it might be entitled under § 42a-2-715(1).
There is a claim on the spread sheet that T. Keefe incurred expenses as a result of a nondelivery of metal goods. According to the spread sheet submitted in support of its claimed damages, T. Keefe claims it incurred labor expenses for wages it paid to its foreman and two journeymen because " no rails showed up." The dates provided are for " 2/12-2/18/2008 and 2/12-2/18/2008." The first delivery of metal goods was made on February 18, 2007, and the last delivery before T. Keefe cancelled the contract was made on or about May 25, 2007, and T. Keefe cancelled the contract in June 2007. Thus, the dates on which T. Keefe claims it incurred labor expenses are after the contract ended. Moreover, this court previously addressed the late delivery of goods delivered on February 18, 2007, in section V.C of this memorandum and determined that because the contract did not state a date and time for delivery or a date and time for performance, under § 42a-2-309, Metal Perreault's first delivery of goods on February 18, 2007 was reasonable in light of all of the circumstances. There was no other evidence produced by T. Keefe of specific dates of late deliveries or nondeliveries. Indeed, T. Keefe stipulated that it received all of the goods for which the plaintiff seeks payment.
Regarding consequential damages as set forth in § 42a-2-715(2) and defined in the relevant case law, T. Keefe, likewise, did not plead or prove these damages. Under General Statutes § 42a-2-715(2) consequential damages include " any loss resulting from general or particular requirements and needs of which the seller at the time of contracting had reason to know and which could not reasonably be prevented by cover or otherwise; and (b) injury to person or property proximately resulting from any breach of warranty." As this court previously discussed, consequential damages may include sums for lost profits, prospective lost profits, loss of goodwill, lost interest or " losses incurred by the non-breaching party in its dealings, often with third parties, which were a proximate result of the breach, and which were reasonably foreseeable by the breaching party at the time of the contracting." 1 White, Summers et al., supra, 7:22, p. 590. " To establish consequential damages, the buyer must establish: (1) causation, (2) foreseeability, (3) reasonable certainty as to amount, and (4) that it is not barred by mitigation doctrines." Id., § 7:25, p. 593. With respect to causation, " the buyer must show a causal link between the seller's breach and each item of claimed damages . . . and that the seller's breach was a cause in fact of the loss . . . The buyer must also show foreseeability . . . A loss is foreseeable where the parties, at the time of contracting, knew or had reason to know facts that made the loss a foreseeable result of the breach." Id., 594-95. " The buyer must prove the amount of damages with reasonable certainty." Id., 595.
T. Keefe failed to plead or prove damages. T. Keefe's claim for damages is problematic since it accepted and used the goods with knowledge that there were problems, and did not properly notify Metal Perreault of the problems as this court has exhaustively discussed. The evidence T. Keefe submitted in support of its claim for damages is insufficient because first, T. Keefe does not identify which of the metal parts it replaced with the Logan Steel metal parts; there was no evidence submitted that at the time T. Keefe and Metal Perreault entered the contract that Metal Perreault should have foreseen the expenses T. Keefe incurred, particularly when it was not notified that T. Keefe had additional problems with the steel parts for stairs 1 and 4 after the refabrication or that T. Keefe had any problems with the parts for stairs 2, 3, 5, 6 and the structural parts for the roof framing. Finally, T. Keefe failed to prove the amount of damages with reasonable certainty. Thus, even if T. Keefe had properly pled a breach of contract under the UCC, it failed to prove its entitlement to consequential damages pursuant to § 42a-2-715.
(iii)
Buyer's Remedies
Implied Warranties--§ § § 42a-2-314; 42a-2-315
Also of relevance are General Statutes § § 42a-2-314 and 42a-2-315, which respectively address the implied warranty of merchantability and the implied warranty of fitness for a particular purpose. Section 42a-2-314 provides: " (1) Unless excluded or modified as provided by section 42a-2-316, a warranty that the goods shall be merchantable is implied in a contract for their sale if the seller is a merchant with respect to goods of that kind. Under this section the serving for value of food or drink to be consumed either on the premises or elsewhere is a sale. (2) Goods to be merchantable must be at least such as (a) pass without objection in the trade under the contract description; and (b) in the case of fungible goods, are of fair average quality within the description; and (c) are fit for the ordinary purposes for which such goods are used; and (d) run, within the variations permitted by the agreement, of even kind, quality and quantity within each unit and among all units involved; and (e) are adequately contained, packaged, and labeled as the agreement may require; and (f) conform to the promises or affirmations of fact made on the container or label if any. (3) Unless excluded or modified as provided by section 42a-2-316 other implied warranties may arise from course of dealing or usage of trade."
" 'To recover under § 42a-2-314, a plaintiff must [plead] and prove (1) that a merchant sold goods, (2) which were not merchantable at the time of sale, and (3) injury and damages to the plaintiff or his property (4) [were] caused proximately and in fact by the defective nature of the goods, and (5) [that] notice [was given] to the seller of injury.' (Internal quotation marks omitted.) S.K. Lavery Appliance Co. v. Asko, Inc., Superior Court, judicial district of Hartford, Docket No. CV 11 6018268, (June 19, 2011, Wagner, J.T.R.); see also 1 J. White, R. Summers & R. Hillman, Uniform Commercial Code (6th Ed. 2012) § 10.25, pp. 898-900 (listing the elements of a claim for breach of the implied warranty of merchantability). '[U]nless the circumstances indicate otherwise, all implied warranties are excluded by expressions like " as is, with all faults" or other language which in common understanding calls the buyer's attention to the exclusion of warranties and makes plain that there is no implied warranty . . .' General Statutes § 42a-2-316(3)(a)." Nassar v. Wiz Leasing, Superior Court, judicial district of New Haven, Docket No. CV-12-6033894-S, (December 18, 2014, Lager, J.).
Section 42a-2-315 provides: " Where the seller at the time of contracting has reason to know any particular purpose for which the goods are required and that the buyer is relying on the seller's skill or judgment to select or furnish suitable goods, there is unless excluded or modified under section 42a-2-316 an implied warranty that the goods shall be fit for such purpose." " The implied warranty of fitness for a particular purpose is narrower than the warranty of merchantability. See Schenck v. Pelkey, 176 Conn. 245, 254, 405 A.2d 665 (1978). General Statutes § 42a-2-315, comment (2) demonstrates the distinct situations in which the warranties apply: 'A " particular purpose" differs from the ordinary purpose for which the goods are used in that it envisages a specific use by the buyer which is peculiar to the nature of his business whereas the ordinary purposes for which goods are used are those envisaged in the concept of merchantability and go to uses which are customarily made of the goods in question. For example, shoes are generally used for the purpose of walking upon ordinary ground, but a seller may know that a particular pair was selected to be used for climbing mountains.'
" 'To establish a cause of action for breach of the implied warranty of fitness for a particular purpose, a party must establish (1) that the seller had reason to know of the intended purpose and (2) that the buyer actually relied on the seller.' Morin v. Wilton Motors Corp., Superior Court, judicial district of Stamford-Norwalk at Stamford, Docket No. CV-01-0182082-S, (May 23, 2001, D'Andrea, J.). In Morin, the court granted the motion to strike the count claiming breach of warranty of fitness for a particular purpose because the plaintiff did not allege 'that the seller had reason to know of the plaintiff's intended purpose . . . other than for the ordinary purpose.' Id. See Goldwater v. Ollie's Garage, Superior Court, judicial district of New Haven, Docket No. 94 0357372, (June 5, 1995, Hartmere, J.) (motion to strike breach of warranty of a particular purpose was granted because the plaintiff did not allege a particular purpose other than the ordinary purpose). Nevertheless, in Coates v. Rolscreen Co., Superior Court, judicial district of New Haven, Docket No. CV 91 0330146 (January 19, 1996, Licari, J.) [16 Conn.L.Rptr. 35, ], the court denied the motion to strike the count claiming breach of warranty of fitness for a particular purpose because the complaint sufficiently alleged the elements of the action. Specifically, the complaint alleged that the plaintiff 'could reasonably rely on . . . defendant not to create a dangerous and defective condition' and that the goods supplied by the defendant 'were not fit for the particular purpose for which the goods were purchased and for which purpose was known to the [defendant].' Id. The court denied the motion to strike despite the defendant's argument that the plaintiff 'failed to allege what the particular purpose was, that [the defendant] knew of the purpose, and that any injuries sustained by the plaintiff's decedent was caused by the failure of the [good] to perform the particular purpose.' Id. " Hartford Cas. Ins. v. Pure Tech Waters of Amer., LLC, Superior Court, judicial district of Hartford, Docket No. CV-116021419-S, (March 30, 2012, Peck, J.).
Section 42a-2-714(2) provides: " The measure of damages for breach of warranty is the difference at the time and place of acceptance between the value of the goods accepted and the value they would have had if they had been as warranted, unless special circumstances show proximate damages of a different amount."
" [Uniform Commercial Code] [§ 42a-2-314] imposes warranty liability for the protection of buyers. The purpose behind . . . [§ 42a-2-314] is to hold a merchant seller responsible when inferior goods are passed along to an unsuspecting buyer. Thus, whether or not the defects could, or should, have been discovered by the merchant seller, the merchant seller is liable to the buyer whenever the goods are not, at the time of delivery, of a merchantable quality . . . The Uniform Commercial Code is designed to protect the buyer from bearing the burden of loss where merchandise does not live up to normal commercial expectations . . . The implied warranty of merchantability is breached whether or not the seller could have prevented the nonconformity . . . The only practical and logical conclusion is that the warrantor is made liable, although free from moral or personal fault, because society for one reason or another wants to place the burden of harm resulting from nonconforming products upon the warrantor rather than upon the buyer . . . We note, finally, that Connecticut's long history of a very strong public policy in favor of protecting purchasers of consumer goods . . . is in line with the national authorities on the Uniform Commercial Code." (Citations omitted; internal quotation marks omitted.) Krack v. Action Motors Corp., 87 Conn.App. 687, 692-93, 867 A.2d 86, appeal denied 273 Conn. 926, 871 A.2d 1031 (2005).
" '[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.'" Stelco Industries, Inc. v. Cohen, supra, 182 Conn. at 565, 438 A.2d 759. This is a lesser standard than the statutory standard governing revocation of acceptance." Sun Hill Industries, Inc. v. Kraftsman Group, Inc., supra, 27 Conn.App. 695-96. If a buyer seeks to claim damages from breaches of implied warranties, it bears the burden of providing sufficient evidence that the goods at issue were not of merchantable quality or fit for a particular purpose. See e.g., Superior Wire & Paper Products, Ltd. v. Talcott Tool & Machine, Inc., supra, 184 Conn. 19 (" The defendants similarly failed to establish the existence of implied warranties. They have pointed to no evidence that the steel shipped was not of fair average marketable quality, the standard established for an implied warranty of merchantability by General Statutes § 42a-2-314. They failed to persuade the trial court that the plaintiff knew or had reason to know of the special uses to which the defendants' customers intended to put the steel, and thus have not proven an implied warranty of fitness pursuant to General Statutes § 42a-2-315"). Our Appellate Court also has indicated that if determination of merchantability or fitness of the goods at issue in a given case requires knowledge outside the ordinary knowledge of the trier of fact, expert testimony is required. See Sun Hill Industries, Inc. v. Kraftsman Group, Inc., supra, 27 Conn.App. 696-97 (concluding that buyer did not need to present expert testimony to show breach of warranty where it was within judge trial referee's ordinary knowledge that collapsed cardboard display boxes were not of merchantable quality or fit for buyer's intended use).
Again, the defendant's claims for breach of contract under the UCC were stricken by the court and it did not replead those claims. Additionally, any claim that the defendant might have pursuant to § 42a-2-315 is undermined by defendant's use of the metal parts. As previously noted, if a buyer seeks to claim damages from breaches of implied warranties, it bears the burden of providing sufficient evidence that the goods at issue were not of merchantable quality or fit for a particular purpose. See e.g. Superior Wire & Paper Products, Ltd. v. Talcott Tool & Machine, Inc., supra, 184 Conn. 19. Here, T. Keefe submitted no evidence that the metal shipped to it by Metal Perreault was not of fair average marketable quality, the standard established for an implied warranty of merchantability by § 42a-2-314. Despite Metal Perreault having to refabricate the metal parts for stairs 1 and 4, T. Keefe accepted and used the parts to construct the stairs. Likewise, it accepted and used the parts for stairs 2, 3, 5, 6 and breakdown number 10. As the Appellate Court noted in Sun Hill Industries, " if the plaintiff used these 2131 cardboard display cartons in its business, it would be unable to establish that they were nonconforming and unfit for their intended purpose." Sun Hill Industries, Inc. v. Kraftsman Group, Inc., supra, 27 Conn.App. 698. Because T. Keefe used the parts, there is simply not enough evidence from which the court can conclude that the metal parts were not of merchantable quality or unfit for their intended purpose. Thus, the defendant has failed to plead or prove any claims it may have had pursuant to § § 42a-2-314 or 42a-2-315.
(iv)
Buyer's Remedies
Deduction of Damages From Price--§ 42a-2-717
General Statutes § 42a-2-717 provides: " The buyer on notifying the seller of his intention to do so may deduct all or any part of the damages resulting from any breach of the contract from any part of the price still due under the same contract." See Brinker Displays, LLC v. Crew Design, Superior Court, judicial district of Litchfield, Docket No. LLI-CV-09-5005952-S, (October 10, 2013, Pickard, J.) (addressing defendant's claim for deduction of damages pursuant to § 42a-2-717 as set out in defendant's special defense); Tasman Hartford, LLC v. Front Line Apparel Group, LLC, Superior Court, judicial district of New London, Docket No. CV-09-5012300-S, (February 28, 2012, Purtrill, J.) (addressing defendant's claim for damages and deduction from unpaid contract price in amount of alleged damages as set out in defendant's special defense).
The trial court's decision in Tasman Hartford, LLC provides a succinct discussion on how § § 42a-2-714, 42a-2-715, and 42a-2-717 interconnect. The court provided the following analysis: " Article 2 of the Uniform Commercial Code governs contracts between parties involving the sale of goods. General Statutes § 42a-2-102. Pursuant to article 2, the parties' rights and liabilities are largely determined by the extent to which the contract has been executed. When a buyer elects to accept nonconforming goods, the buyer is liable to purchase the goods from the seller at the contract price; General Statutes § 42a-2-607(1); and bears the burden of establishing the nonconformity of the goods. General Statutes § 42a-2-607(4). Upon giving timely notice of breach to the seller; General Statutes § 42a-2-607(3)(a); a buyer accepting nonconforming goods has a remedy in damages 'as determined in any manner which is reasonable.' General Statutes § 42a-2-714. The buyer may exercise this remedy by deducting all or part of his claimed damages from the unpaid contract price due to the seller. General Statutes § 42a-2-717.
" The damages arising from the acceptance of nonconforming goods are typically measured by the difference between the value of the goods accepted and the value of the goods if they had been as warranted. General Statutes § 42a-2-714(2). Courts, noting that '[t]his standard is notoriously more difficult to apply than to state, ' have found that '[r]easonable costs of repair may furnish a reasonable approximation of diminished value.' Johnson v. Healy, 176 Conn. 97, 106, 405 A.2d 54 (1978). See Stelco Industries, Inc. v. Cohen, 182 Conn. 561, 566, 438 A.2d 759 (1980) (noting costs of repairs may be used to compute damages pursuant to General Statutes § § 42a-2-714(3) and 42a-2-715).
" [In Tasman ], the defendant accepted the nonconforming leather provided by the plaintiff, and therefore, the defendant is liable to purchase the leather from the plaintiff at the remaining contract price of $49,723.25. The defendant also satisfied its burden of establishing that the leather was not fit for the specific purposes sold. The evidence further indicates that the defendant notified the plaintiff of the breach within a reasonable time upon discovering that the delivered leather was nonconforming. As a result, the defendant has a remedy in damages that he may deduct from the unpaid contract price due to the plaintiff to be determined by the court 'in any manner which is reasonable.' General Statutes § 42a-2-714. The aforementioned case law has found that measuring such damages by the costs of repair is reasonable. The additional costs the defendant incurred as a result of reworking the nonconforming leather is $49,676.00. The plaintiff is entitled to the unpaid contract price less the defendants' damages in the amount of $49,676.00." Tasman Hartford, LLC v. Front Line Apparel Group, LLC, supra, Superior Court, Docket No. CV-09-5012300-S, .
Here, the court simply cannot award the defendant damages for claims it did not plead. As the court stated at the outset, the defendant's answer was poorly drafted and it did not replead its counterclaim for damages that was stricken by the court. The defendant failed to plead that Metal Perreault breached the contract under the UCC in that Metal Perreault tendered nonconforming goods which the defendant effectively rejected pursuant to § 42a-2-602; or that if it accepted nonconforming goods, it effectively revoked its acceptance pursuant to § 42a-2-608; or that if it did not effectively revoke acceptance it is still entitled to damages under § § 42a-2-607(3), 42a-2-714; 42a-2-715 or 42a-2-717. Nor did the defendant allege a cause of action for breach of any of the implied warranties.
Further, the defendant provided no evidence that it notified Metal Perreault of its intention to deduct expenses from the contract price as required under § 42a-2-717. The two emails dated November 27, 2007, and December 3, 2007, from the defendant to Metal Perreault regarding the amount due and owing under the contract simply state that " [w]e do not agree with the amount you are showing as outstanding by T. Keefe and Son." Def. Exs. M, N. These emails do not indicate that the defendant intended to deduct any expenses from the contract price, and what those expenses were, nor do the emails state the reasons why the defendant did not agree with the amount due and owing. Again, the defendant failed to plead or prove its claim for damages under § 42a-2-717.
G
Special Defense--Accord and Satisfaction
The defendant's sole special defense that it interposed in this case is accord and satisfaction in which it alleges that it " paid all sums due under the contract."
The defendant claims that because the plaintiff failed to plead responsively to its special defense of accord and satisfaction, the plaintiff has admitted the defendant's " Defense of Payment or Accord and Satisfaction." " 'According to the law of pleading, what is not denied is conceded.' Casey v. Galli, 94 U.S. 673, 679, 24 L.Ed. 168, 24 L.Ed. 307 (1877); 71 C.J.S. 242, supra, § at 193 ('material allegations of the complaint and material matters properly pleaded which are not denied . . . in the answer stand admitted'). Consistent with that principle, Practice Book § 10-19 requires that '[e]very material allegation in any pleading which is not denied by the adverse party shall be deemed to be admitted, unless such party avers that he or she has not any knowledge or information thereof sufficient to form a belief.' See also Commissioner of Social Services v. Smith, 265 Conn. 723, 736, 830 A.2d 228 (2003) ('the failure of a party to deny the material allegations contained in an adversary's pleading operates as an implied admission of that allegation') . . . Birchand v. City of New Britain, 103 Conn.App. 79, 84, 927 A.2d 985 (2007).
" In response to each allegation of a complaint, a defendant has three options. It may admit, deny, or plead that it 'has not any knowledge or information thereon sufficient to form a belief.' Practice Book § 10-19; see also 1 E. Stephenson, Connecticut Civil Procedure (3d Ed. 1997) § 82(c), p. 237 ('[e]very material allegation in the complaint which is not denied or answered by a plea of " no knowledge" will be deemed admitted'); W. Horton & K. Knox, 1 Connecticut Practice Series: Practice Book Annotated (4th Ed. 1998) § 10-19, authors' comments, p. 343 (same)." Id., 85. The defendant has alleged in its special defense that it " paid all sums due" under the contract. The plaintiff concedes that it did not reply to that allegation, however, the plaintiff claims that it has already denied that the defendant has paid all sums by virtue of the allegations contained in paragraphs 3 and 4 of the complaint, in which it alleges that the plaintiff's assignor sold and delivered goods to the defendant the value of which is $189,500 which the defendant refuses to pay and which remains outstanding. This court agrees with the plaintiff that it has effectively denied in paragraphs 3 and 4 of its complaint that the defendant has " paid all sums due under the contract."
Secondly, with respect to its special defense, the defendant has failed to plead and prove accord and satisfaction. " When there is a good faith dispute about the existence of a debt or about the amount that is owed, the common law authorizes the debtor and the creditor to negotiate a contract of accord to settle the outstanding claim . . . An accord is a contract under which an obligee promises to accept a stated performance in satisfaction of the obligor's existing duty . . . Upon acceptance of the offer of accord, the creditor's receipt of the promised payment discharges the underlying debt and bars any further claim relating thereto, if the contract is supported by consideration . . . Although the case law presents the more usual use of accord and satisfaction as a defense by the debtor against the creditor, it is evident that accord and satisfaction equally applies to both parties. Accord and satisfaction is a method of discharging a claim whereby the parties agree to give and accept something other than that which is due in settlement of the claim and to perform the agreement . . . Indeed, a validly executed accord and satisfaction precludes a party from pursuing any action involving the original, underlying claim . . . The defendant bears the burden of proving accord and satisfaction when it is pleaded as a special defense . . . A contract of accord and satisfaction is sufficiently supported by consideration if it settles a monetary claim that is unliquidated in amount . . ." (Citations omitted; internal quotation marks omitted.) Associations Resources, Inc. v. Wall, 298 Conn. 145, 187, 2 A.3d 873 (2010).
" The defense of accord and satisfaction requires the defendant to allege and prove a new contract based upon a new consideration . . . There must be a new agreement with a new consideration." (Citations omitted; internal quotation marks omitted.) Crucible Steel Co. v. Premier Mfg. Co., 94 Conn. 652, 656, 110 A. 52 (1920). The proponent must be able to show that there was a meeting of the minds, and that the offer by the debtor was clearly tendered as full satisfaction of the debt and that the payment was knowingly accepted. Id.; Gillis v. Gillis, 21 Conn.App. 549, 552, 575 A.2d 230, 231-32, cert. denied, 215 Conn. 815, 576 A.2d 544 (1990).
The defendant has neither pled nor proven the defense of accord and satisfaction. The defendant did not allege any facts in its special defense to support the defense of accord and satisfaction and failed to introduce any evidence that it entered into a contract with either Metal Perreault or with the plaintiff for the settlement of the debt assigned by Metal Perreault to the plaintiff. Accordingly, the defendant has failed to prove by a fair preponderance of the evidence its special defense of accord and satisfaction.
VI
CONCLUSION
For the foregoing reasons, the court finds in favor of the plaintiff on the complaint and enters judgment in favor of the plaintiff for the full amount of $189,500 plus taxable costs. It is so ordered.