International Multifoods Corp. v. National Egg Products

414 S.E.2d 253, 202 Ga. App. 263, 17 U.C.C. Rep. Serv. 2d (West) 777, 1991 Ga. App. LEXIS 1734
CourtCourt of Appeals of Georgia
DecidedNovember 20, 1991
DocketA91A1281
StatusPublished
Cited by13 cases

This text of 414 S.E.2d 253 (International Multifoods Corp. v. National Egg Products) is published on Counsel Stack Legal Research, covering Court of Appeals of Georgia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
International Multifoods Corp. v. National Egg Products, 414 S.E.2d 253, 202 Ga. App. 263, 17 U.C.C. Rep. Serv. 2d (West) 777, 1991 Ga. App. LEXIS 1734 (Ga. Ct. App. 1991).

Opinion

Andrews, Judge.

International Multifoods Corporation (“Multifoods”) appeals the granting of appellee’s cross-motion for summary judgment arising from the following facts. Multifoods manufactures baked good mixes and uses free-flowing egg yolk as a main ingredient in such mixes. National Egg Products, a division of Hudson Foods (“NEPCO”) manufactures and sells free-flowing egg yolks. Multifoods and NEPCO had a continuing relationship for the purchase of free-flowing egg yolk from October 5, 1977 until December 30, 1988.

In 1977 NEPCO provided a guarantee to Multifoods in which NEPCO guaranteed that none of the food sold to Multifoods would be adulterated at the time of delivery. Neither party disputes that such guarantee remained effective through December 1988.

In June 1988 Multifoods and NEPCO contracted for the sale of 75,000 pounds of egg yolk to be shipped at the direction of Multifoods between June and December 1988. In this regard, a confirmation of sale, the same document which the parties had used since March 1977, dated June 3, 1988 for the 75,000 pounds contained the following salmonella guarantee: “The Seller, National Egg Products guarantees that all products covered under this sales confirmation have been sampled by appropriate sampling techniques and have been tested by the recommended Food and Drug Administration testing methods and found to be salmonella negative by test. The buyer has ten days from the date of receipt of the products to test for salmonella and to accept it or notify the seller that all or any part of the shipment is rejected. If the seller has not received notice within ten days that any part of the shipment is rejected, absence of such notice shall be construed by both parties as final acceptance of the product. In any event, when any of the product covered by this confirmation has been used with any other ingredient, such use shall signify final acceptance of such product since the seller exerts no control over any other such ingredient.”

On November 14, 1988, the specific transaction underlying- this appeal occurred when Multifoods purchased 25,000 pounds of the egg yolk. On November 15, 1988 pre-shipment samples, which Multifoods required for the purpose of pre-manufacturing testing, were sent to Multifoods’ quality assurance supervisor. Accompanying the samples was a letter which stated: “This letter covers pre-shipment samples of Egg Yolk Solids Free Flow being forwarded under separate cover to you for Functional Properties and Viscosity evaluation only.” Multifoods was also sent a “Quality Assurance Certificate,” dated November 22, which analyzed and found no salmonella in the sample lot.

*264 NEPCO concluded its testing of the entire lot on November 21, 1988, and a subsequent quality assurance certificate verifying that no salmonella was present in the product was signed on December 1, 1988. The product left NEPCO on the same date and was received by Multifoods on December 5. There is a discrepancy in the record as to whether Multifoods took samples for salmonella testing from the lot on this date or on December 9. In any case, on December 8, before any salmonella test results had returned, Multifoods began adding portions of the lot to its mixes. On December 15, tests were returned which indicated that the lot did contain salmonella. Multifoods advised NEPCO on December 16, 1988, that the lot was adulterated.

After receiving notice that the lot was adulterated, NEPCO requested that the remaining, unmixed portion of the lot be shipped back to it and Multifoods was given credit for the portion which was returned.

Multifoods filed a seven-count complaint for breach of express warranty, breach of implied warranty of merchantability, breach of implied warranty of fitness for a particular purpose, negligence, negligent misrepresentation, breach of contract, and violation of the Georgia Food, Drug & Cosmetic Act. Multifoods claimed damages for the product itself and for the consequential damages it claimed to have incurred by mixing the contaminated egg yolk. NEPCO counterclaimed, alleging that Multifoods was responsible for the losses because of its failure to test prior to mixing, and claimed that Multifoods owed damages for the mixed portion of the product. The parties filed cross-motions for summary judgment. In granting NEPCO’s motion, the superior court stated that “[i]f the Court accepts Multifoods’ argument that NEPCO’s confirmation of sale only deals with Multifoods’ acceptance or rejection of NEPCO’s tender, then the question of whether or not Multifoods discovered the breach as soon as it should have becomes a dispositive issue under O.C.G.A. Sec. 11-2-607 (3) (a).” The trial court concluded that Multifoods did not discover the breach as soon as it should have. The trial court then concluded that the confirmation of sale put Multifoods on notice that once the product was combined with other ingredients, it was deemed acceptéd.

1. Although Multifoods’ sole enumeration of error is that the trial court erred in granting summary judgment, the company sets forth five arguments concerning the trial court’s alleged error in this regard, which we will address separately. In its first argument, Multifoods claims that the trial court overlooked NEPCO’s limitation on the uses to be made of pre-shipment samples when it found that Multifoods should have discovered the contamination from pre-shipment samples. This argument is without merit. It is clear from a reading of the letter accompanying the pre-shipment samples that the statement *265 that such samples were being sent for functional property testing and viscosity use “only” was not a limitation on the uses to which Multifoods could put the samples, but was language used to protect NEPCO. From both evidence in the record and from the letter itself, it is apparent that the meaning of the letter was to distinguish the sample product from that which was sent for other uses.

2. In its second contention, Multifoods argues that the ten-day limitation within which to reject the product in the confirmation of sale constituted a material additional term which did not become part of the contract. This argument is also without merit. Pretermitting the question of whether the provision, which had been used by the parties for 11 years, was part of the contract, there is no indication that the superior court’s decision was based upon this provision. Although the superior court’s order mentioned the limitation, the court’s decision did not hinge on that provision and any alleged error would necessarily be harmless. See generally Merrill v. Eiberger, 198 Ga. App. 806 (403 SE2d 91) (1991).

3. In its third argument, Multifoods claims that the terms of the confirmation of sale do not limit or negate the express warranties given by NEPCO to Multifoods. Again Multifoods’ argument is without merit since it misconstrues the basis of the superior court’s ruling. The trial court’s conclusion regarding the warranty was based on the fact that Multifoods did not give notice within a reasonable time after it should have discovered the breach. The court reached this conclusion without regard to the confirmation of sale, to which it referred regarding acceptance. Accordingly, this contention is without merit.

4. Multifoods argues that its notice of breach 1

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Bluebook (online)
414 S.E.2d 253, 202 Ga. App. 263, 17 U.C.C. Rep. Serv. 2d (West) 777, 1991 Ga. App. LEXIS 1734, Counsel Stack Legal Research, https://law.counselstack.com/opinion/international-multifoods-corp-v-national-egg-products-gactapp-1991.