Bennett Air Conditioning, Incorporated v. Warren Manufacturing Company, Incorporated, and Automatic Equipment Sales of Washington, Incorporated

23 F.3d 399, 1994 U.S. App. LEXIS 18428, 1994 WL 146024
CourtCourt of Appeals for the Fourth Circuit
DecidedApril 26, 1994
Docket92-2318
StatusPublished
Cited by1 cases

This text of 23 F.3d 399 (Bennett Air Conditioning, Incorporated v. Warren Manufacturing Company, Incorporated, and Automatic Equipment Sales of Washington, Incorporated) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fourth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Bennett Air Conditioning, Incorporated v. Warren Manufacturing Company, Incorporated, and Automatic Equipment Sales of Washington, Incorporated, 23 F.3d 399, 1994 U.S. App. LEXIS 18428, 1994 WL 146024 (4th Cir. 1994).

Opinion

23 F.3d 399
NOTICE: Fourth Circuit I.O.P. 36.6 states that citation of unpublished dispositions is disfavored except for establishing res judicata, estoppel, or the law of the case and requires service of copies of cited unpublished dispositions of the Fourth Circuit.

BENNETT AIR CONDITIONING, INCORPORATED, Plaintiff-Appellant,
v.
WARREN MANUFACTURING COMPANY, INCORPORATED, Defendant-Appellee,
and
AUTOMATIC EQUIPMENT SALES OF WASHINGTON, INCORPORATED, Defendant.

No. 92-2318.

United States Court of Appeals, Fourth Circuit.

Argued Feb. 9, 1994.
Decided April 26, 1994.

Appeal from the United States District Court for the Eastern District of Virginia, at Alexandria. Claude M. Hilton, District Judge. (CA-92-376-A)

Argued: Raymond Donald Battocchi, McLean, VA, for appellant.

Dabney Jefferson Carr, IV, Mays & Valentine, Richmond, VA, for appellee.

On Brief: John Lloyd Rice, Willard L. Boyd, Miller & Chevalier, Chartered, Washington, D.C., for appellant.

Gary J. Spahn, Mays & Valentine, Richmond, VA, for appellee.

E.D.Va.

AFFIRMED IN PART, REVERSED IN PART, AND REMANDED.

Before WIDENER, WILKINSON, and MICHAEL, Circuit Judges.

OPINION

PER CURIAM:

Heating and cooling system components manufactured by Appellee Warren Manufacturing Company, Inc. (Warren) were sold by Warren's distributor, Automatic Equipment Sales of Washington, Inc. (AES), to Appellant Bennett Air Conditioning, Inc. (Bennett). Bennett, alleging serious defects, sued Warren and AES for breaches of express and implied warranties. Bennett sought replacement and repair costs from both Warren and AES and settled with AES prior to trial.

A jury trial on Bennett's claims against Warren began on September 15, 1992. At the close of Bennett's two-day case, the district court granted Warren's motion for judgment as a matter of law on both the replacement and repair costs issues. Bennett then filed this appeal. We affirm the district court's ruling on replacement costs, but reverse and remand for a new trial on repair costs.

I. Background

In 1987, Bennett was chosen as the mechanical subcontractor for a new office building project in Virginia called Enterprise One. (We refer to both the building and its owner, Enterprise One Limited Partnership, as Enterprise One.) Warren was very interested in supplying Bennett with variable air volume boxes (boxes) for the heating and cooling system at Enterprise One.1 In early 1988, Warren demonstrated the boxes to Bennett representatives. Thereafter, on March 24, 1988, Warren's president, Roy Kelley, wrote to Bennett's president, Art Bennett, as follows:

Please be assured that Warren has a total corporate commitment to these products and will live up to all the associated obligations, including the correction of chronic or latent defects which might possibly occur....

JA 41. Art Bennett was not satisfied. He proposed on April 8, 1988, that Warren agree to the following:

[Warren] will, at its option, repair or replace [the boxes, should problems occur,] at no cost to [Bennett]. Should Warren elect repair and the results not be satisfactory to the building owner, they will pay all costs associated with the replacement of the boxes with those of another manufacturer.

JA 43 (emphasis added).

Warren would not accept Bennett's proposed language, and Kelley explained why at trial: Warren could not agree to guarantee the satisfaction of a building owner it did not know and who might be unreasonable. On April 11, 1988, Kelley responded to Bennett's proposal of April 8 and promised to pay the costs of replacing the boxes with those of another manufacturer if the boxes failed to comply with job requirements. Bennett still refused to buy the boxes. Kelley then wrote Bennett a letter on June 2, 1988, with the following promise:

In the event of chronic or inordinate problems with Warren VAV units used on your projects, Warren will either repair or replace said units at no cost to Bennett Air Conditioning, Inc. Should such replacement or repair not result in satisfactory operation, Warren will pay all costs associated with the replacement of the units with those of another manufacturer.

JA 49. Following this letter, Bennett agreed to buy 118 Warren boxes for $45,364.50.2 Art Bennett said he would not have purchased the boxes without Warren's June 2, 1988, promise.

Bennett installed the boxes in Enterprise One under a subcontract with Nardi Construction, Inc. (Nardi) around October 1988. Nardi paid Bennett in full for completing the contract. Bennett then entered into annual service contracts with Enterprise One's lessee, Government Technology Services, Inc. (GTSI). While there is some dispute, it appears the service contracts did not cover the boxes. Bennett also gave Enterprise One a one-year warranty to cover all costs associated with the installed mechanical products.

As soon as Enterprise One opened, the boxes began to fail and malfunction. The problems were so serious that Warren's president, Kelley, visited the building. Warren performed continuous repairs throughout 1989, apparently to no avail. During four months in early 1990, the boxes' failure rate was estimated at 47 percent. Even Kelley acknowledged that a reasonable failure rate would be no higher than one to two percent. Serious problems with the boxes apparently continued up to the time of trial.

It is denied by Warren, but Bennett claims that Warren also agreed in December 1988(i) that Warren (with Bennett's help) would repair the boxes so they would operate to specifications by January 1989, and (ii) that, if Bennett thereafter experienced problems in more than five percent of the boxes, Warren would replace them as promised in the June 2, 1988, letter. In any event, Warren did not comply with several demands by Bennett to replace the boxes under the June 2 letter. Although Bennett has repeatedly demanded compliance with the June 2 letter, neither Enterprise One (the building owner) nor Nardi (the general contractor) has ever sought replacement of the boxes.

On March 16, 1992, Bennett filed a three-count complaint against Warren and AES alleging that the failure of the boxes resulted in breaches of implied warranties of fitness and merchantability and breach of express warranty. Bennett sought both repair and replacement costs. Bennett settled with AES before trial.

At trial, a Bennett expert testified it would cost over a quarter of a million dollars to replace the boxes with those of another manufacturer.

On repair costs, Bennett offered considerable proof on the damages it had suffered due to the allegedly defective boxes. In the four years following installation, Bennett employees visited Enterprise One over 200 times and attempted to repair over 300 failures on the Warren boxes. These failures were apparently in addition to those dealt with by Warren.

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