LLC v. CNC (2009)

MEMORANDUM OF DECISION

I. FACTS

This is a case involving the rebuilding and remachining of certain parts in a Campbell horizontal/vertical precision grinder that was owned by and located at the SKF plant in Hanover, Pennsylvania.   The plaintiff, hereinafter “Cavco,” represented by its solo owner James Cavorely was approached by the defendant CNC Engineering, Inc., hereinafter “CNC” concerning rebuilding the said grinder.   After an exchange between Cavco and CNC as to the scope of work and other terms that were acceptable to both parties [Plaintiff's Exhibit # 1], the defendant CNC issued a purchase order for the proposed work as quoted by the plaintiff in the amount of $98,955.00 under purchase order # 965353 for Job # 6127.

The actual work at the SKF plant on the precision grinder was started towards the end of April 2006 and involved the disassembly and the transporting of certain parts of the said machine back to the Cavco facility for refinishing and machining.   On September 25, 2006, the plaintiff submitted an invoice to CNC for the completed work under the terms of Cavco's proposal requesting payment of one-half of the quoted bid payable in the amount of $49,477.50.

The plaintiff was then requested by the defendant to do further work on the said grinding machine at the SKF plant.   The plaintiff's additional work resulted in an invoice balance of $26,666.26 for work done and invoiced up through November 30, 2006.   The disputed amount ultimately culminated in a certain balance that was not paid on the original contract in the amount of $24,738.75 plus the said $26,666.26 for the additional work done, as well as a claim for interest and legal fees by the plaintiff.

The primary factual issue involves whether the workmanship by the plaintiff was substandard and/or defective thereby causing the defendant to take corrective action at some cost which is the basis of its counterclaim.   The Court finds that there was a breakdown in communications between the two parties relating to the spindles and slides on the said machine.   The factual issue of whether the very tight tolerances required to do the specific type of precision grinding remains open.   There was a further claim that the slides on the said machine were damaged because they had traveled beyond their limits and had been impacted by certain fillet plates at the top of the slide.   That issue remains in dispute as to who actually caused the said damage.

II. LEGAL ISSUES

1. Whether or not there existed an enforceable contract between the said parties as evidenced by the plaintiff's proposal and defendant's purchase order?

2. Whether the plaintiff has met his burden in establishing that the defendant breached any such contract by not paying the invoiced balances?

3. Whether or not there was a breach of contract by the plaintiff concerning its workmanship in the machine rebuilding process resulting in damages to the defendant?

III. ARGUMENT

An “implied contract” is one in which some or all of the terms are inferred from the conduct of the parties and the circumstances which develop between them.  Schreiber v. Connecticut Surgical Group, 96 Conn.App. 731 (2006).   The Court finds that certain obligations have been incurred by each party and that neither party is without fault in executing and carrying out their respective obligations under the contract implied in part and expressed in part through the exchange in documents.   Although the plaintiff has the burden of proof, the Court will look to the equities between the parties to determine who shares the greater degree of fault in breaching the terms and intent of any contract.

The plaintiff never properly engaged an expert to establish whether the work done for the defendant was within the OEM specifications of its proposal.   Nor did the defendant engage anyone to say the contract was breached by some malfeasance or neglect by the plaintiff.   Each party's representatives became their own self-serving experts.   The fact that there were further verbal negotiations and e-mails between the parties concerning other work to be done and the scope of such work to be done by the plaintiff created an open-ended contract, the terms of which were never credibly established either in writing or by clear evidence.   When an ambiguity in a contract arises, “the determination of the parties' intent is a question of fact.”  David M. Sommers & Associates v. Busch, 283 Conn. 396 (2007).

“The existence of a contract is a question of fact to be determined by the trier on the basis of all the evidence ․ To form a valid and binding contract in Connecticut, there must be a mutual understanding of the terms that are definite and certain between the parties ․ To constitute an offer and acceptance sufficient to create an enforceable contract, each must be found to have been based on an identical understanding by the parties.”  (Internal quotation marks omitted.)  Richter v. Danbury Hospital, 60 Conn.App. 280, 288, 759 A.2d 106 (2000) quoting L & R Realty v. Connecticut National Bank, 53 Conn.App. 524, 534, 732 A.2d 181, cert. denied, 250 Conn. 901, 734 A.2d 984 (1999).   The existence of a contract is a question for the trier of fact.   Connecticut Education Ass'n., Inc. v. Milliman USA, Inc., 105 Conn.App. 446, 453, 938 A.2d 1249 (2008).

IV. FINDINGS

Based on the more credible evidence, the Court finds that there was a contract between the plaintiff and the defendant based on the proposal from the plaintiff and acceptance by way of purchase order from the defendant.   The Court further finds that the work done by the plaintiff as contemplated by the parties within the proposal and purchase order is a valid contract and that any balance due and owing to the plaintiff under the terms of that contract should be paid by the defendant.

“The general rule in breach of contract case is that the award of damages is designed to place the injured party, so far as can be done by money, in the same position as that which he would have been in had the contract been performed.”  Beckman v. Jalich Homes, Inc., 190 Conn. 299, 309, 460 A.2d 488 (1983);  Lar-Rob Bus Corporation v. Fairfield, 170 Conn. 397, 404-05, 365 A.2d 1086 (1976);  Bachman v. Fortuna, 145 Conn. 191, 194, 141 A.2d 477 (1958).   It has traditionally been held that a party may recover “general” contract damages for any loss that “may fairly and reasonably be considered [as] arising naturally, i.e., according to the usual course of things, from such breach of contract itself.”   Hadley v. Baxendale, 9 Ex. 341, 354, 156 Eng. Rep. 145 Page 320.

The supplemental work done by the plaintiff under various so-called service calls 1-3 during October and November of 2006 and invoiced in the total amount of $26,666.26 is subject to the same standards as the original contract.   The question remains as to whether this follow-up work was something that was brought about by faulty workmanship of the plaintiff.   The additional work requested by the defendant was beyond the original contract on the subject machine and prompted by complaints from SKF which was not contemplated by either party.   The underlying facts concerning how the spindles and slides came to be defective or at least not acceptable is not clearly established from the evidence produced by either party.   The tolerances that needed to be maintained relate back in some part to the plaintiff's initial workmanship and possible misapplication and/or improper use by SKF and its employees in the follow-up operation of the said grinding machine.

Although the evidence is hardly clear as to how the plaintiff failed in any specific way to meet the terms of its proposal, it would appear that the warranty issued by the plaintiff in its original proposal assured that alignments, and performance tolerances would meet original equipment manufacturers [OEM] specifications.   The plaintiff failed to provide any credible evidence that those specifications had been met.   Whether that additional work done by the plaintiff for the benefit of the defendant and ultimately SKF without a specific purchase order was corrective or not, has not been established by the plaintiff.   This Court therefore concludes that this additional work under the so-called service calls was corrective in nature which the plaintiff felt obliged to do under the original contract, and therefore, the Court concludes that the plaintiff should not be allowed to collect the balance on those invoices dated November 30, 2007 under invoice # 3212 [Plaintiff's Exhibit 17].

The defendant's counterclaim against the plaintiff alleges that corrective remedial work had to be done by the defendant and its customer SKF in order to correct deficiencies in the work done by the plaintiff on the said machine.   The counterclaim attempts to create a set-off with additional expenses incurred by the defendant in the amount of $40,000.00.   The Court finds that there is no credible evidence to support that any corrective work beyond that done by the plaintiff was necessary and proximately caused by any malfeasance on the part of the plaintiff.   The Court, therefore, finds that the defendant's counterclaim is not supported by credible evidence.

V. CONCLUSION

The Judgment of the Court is that the plaintiff is entitled to the balance owed on the underlying contract in the amount of $24,738.75 plus statutory interest from September 2006 to June 2009 (C.G.S. § 37-3a) and attorneys fees in the amount of $3,000.00.   No other costs or attorneys fees are awarded to either party.

Accordingly, Judgment enters for the plaintiff on the original underlying claim.   All other additional claims by the plaintiff are denied and judgment enters for the plaintiff on the defendant's counterclaim.

BY ORDER OF THE COURT,

Roche, J.

Roche, Vincent E., J.