Sintel, Inc. v. Budget Systems, Unpublished Decision (6-17-1999)

CourtOhio Court of Appeals
DecidedJune 17, 1999
DocketNo. 74249
StatusUnpublished

This text of Sintel, Inc. v. Budget Systems, Unpublished Decision (6-17-1999) (Sintel, Inc. v. Budget Systems, Unpublished Decision (6-17-1999)) is published on Counsel Stack Legal Research, covering Ohio Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Sintel, Inc. v. Budget Systems, Unpublished Decision (6-17-1999), (Ohio Ct. App. 1999).

Opinion

Defendants-appellants Budget Systems and Rich Liss appeal the trial court's decision granting judgment to the plaintiff-appellee Sintel, Inc. After a trial to the bench, the court issued its opinion and order. The court entered judgment for the appellee for the sum of $16,335.00. The appellee filed this action on an account and sought damages for breach of contract. The dispute arises out of appellants order for binder bins, office furniture, from the appellee. Essentially, the appellants argue that the bins were non-conforming goods which were rejected and/or revoked. The appellee asserts that the bins were manufactured as ordered.

Sintel, Inc. is a custom metal fabricator which makes over 4,000 different parts for 140 different customers (T. 84). The president of Sintel is Dennis Dornbrush. Appellant Budget Systems is in the office refurbishing industry. Rich Liss testified that he operated Budget Systems. The appellant ordered 256 binder bins from the appellee at a cost of approximately $60.00 per bin. Binder bins are attached to an office furniture panel. These panels are manufactured by several major companies, including Steelcase and Haworth. The appellee contracted to custom fabricate these binder bins for the Budget Systems.

Rich Liss and his wife Becky Liss visited the appellee's plant to look at their products. At that time they were shown a Haworth prototype of a "flipper door unit" which is a binder bin with a door that flips up over the top of the unit when it is opened. On October 1, 1993, the appellants placed an order for the bins with locks, and ordered the merchandise to be shipped unpainted. The appellants asserted at trial that the bins viewed at the appellee's facility and subsequently ordered were units whose door opens to the inside of the bin.

Upon receipt of the purchase order, the appellee faxed the appellant, questioning the order for unpainted units. Sintel received a telephone call from Budget Systems indicating that they wanted the units unpainted. Since the binder bins were to be attached to panels, the appellee subsequently sent a letter requesting dimension specifications. In 95 to 98% of its business, Sintel manufactures a product by using prints given by the purchaser (T. 85). A telephone call was received from Mr. Liss indicating that the latest version of the Steelcase 9000 and the Steelcase movable wall should be used. Dornbush testified that the binder bin shown to Liss was the binder bin shipped to Budget Systems (T. 74).

The job was completed in mid December 1993. Budget Systems was contacted and sent a truck to pick up one-third of the units on December 22, 1993. The rest was shipped. In the middle of January 1994, Liss contacted Dornbush. As a result, Budget Systems paid for Dornbrush to visit Cleveland and examine the binder bins at the warehouse. During this visit, most of Dornbrush's time was spent with Liss, but Paul Ward, an employee of the appellant, was present for a few minutes.

Dornbush observed the employees improperly cleaning and painting the units. The appellant had also altered the panel to which it was attempting to attach the units. The appellants had placed fiberglass across the front, approximately 1 1/2 inches thick, and had wrapped it with fabric (T. 28). This made installation of the units difficult. The appellant wanted the edges of the units smoothed out instead of sharp and wanted the units painted.

As a result of this meeting, the appellee agreed to properly prepare the bins for painting, round the back edges, and make new clips for mounting. The freight was to be paid by Budget Systems. This agreement was memorialized in a letter from Dornbush to Liss. The bins were to be painted by a separate company partially owned by Dornbush. Subsequently, approximately 175 of the units were shipped back to Michigan for painting. The record also contains a letter from Dornbush to Mr. Ward with an address for shipping.

The bins were shipped and the painting was completed on Feb. 10, 1994. The appellee contacted the appellants for shipping instructions and was told that the appellants did not want the product returned (T. 35). The bins were shipped to the appellee's plant and placed in storage. Up until this point the appellee had no indication that the appellant would not accept the product. Dornbush made numerous attempts to contact Liss, but Liss would neither accept nor return his telephone calls. He was given the name of Paul Ward as someone to contact to resolve the problem.

In mid April 1994, after several telephone calls, Ward and Mike Grady went to visit the appellee's plant in Michigan. These two men believed they could persuade Liss to accept the product. Dornbush testified that he was told by Ward and Grady that Budget Systems had cash flow problems and requested that payment be made in two installments. This was reduced to writing by Dornbush and sent to Liss in the form of a letter with a space for his signature at the bottom. Liss never signed the letter. Dornbush telephoned several times, but in August or September 1994 was told by Ward that Liss would not accept the product. Ward indicated that Liss had purchased other product.

The bins ordered by Budget Systems were stored on the Sintel lot in storage trailers. The storage company is notorious for mailing invoices which are incorrect and for mailing the invoices late (T. 60). Sintel never paid any of the finance charges and did not pay the amounts which were billed, but not incurred by Sintel (T. 60).

Dornbush explained that the manufacturers of office furniture, such as Haworth, Steelcase, Trendway, and Herman Miller, distribute their products through dealers. Sintel has contracts with the manufacturers for modifications of their products. Dornbush testified that Sintel could not resell the unused Budget Systems binder bins to the dealers without losing its contracts with all of the manufacturers (T. 81, 82). Since he made the decision to stay in business, the only option available was to sell the bins to a refurbisher. A refurbisher is a company which obtains office furniture from business discarding their furniture. This furniture is then repainted or, recovered and then sold. Dornbush obtained two estimates from refurbishers as to the price they would give for the unused bins. Dornbush testified that a refurbisher will pay 10 or 11 cents on the dollar for the products it purchases (T. 42). A Haworth unit would sell for $129.60, discount included, and a Steelcase unit would sell for $125 with the discount.

Paul Ward testified that he had no authority to bind Budget Systems in a settlement of the account with Sintel. Although he traveled to Michigan and spoke with Dornbush, he never represented that he had the authority to settle the dispute. Ward also testified as to some of the difficulties Budget Systems had with the product manufactured by Sintel. Ward stated that the difference between what Budget Systems ordered, a unit having a door which opened inside the bin, and what was received, a unit with a door flipping over the top, was immense and that no one in the business would make such a mistake. Ward testified that units were not cleaned with gasoline and that Budget Systems does not keep gasoline at its facilities. Budget Systems had difficulty painting the units, the hooks received from Sintel were too shallow, and the units did not hang properly. Telephone calls between the two companies resulted in Sintel manufacturing larger hooks, but the hooks were not a standard size so some worked and some did not. The difficulty painting was just the beginning of the problems, the more the units were worked with, the more problems Budget Systems discovered. Ward testified that Budget Systems did not receive assembly instructions for the units.

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Sintel, Inc. v. Budget Systems, Unpublished Decision (6-17-1999), Counsel Stack Legal Research, https://law.counselstack.com/opinion/sintel-inc-v-budget-systems-unpublished-decision-6-17-1999-ohioctapp-1999.