Southern Illinois Stone Co. v. Universal Engineering Corp.

446 F. Supp. 900, 1978 U.S. Dist. LEXIS 19734
CourtDistrict Court, E.D. Missouri
DecidedFebruary 3, 1978
DocketNo. 75-791C(B)
StatusPublished
Cited by1 cases

This text of 446 F. Supp. 900 (Southern Illinois Stone Co. v. Universal Engineering Corp.) is published on Counsel Stack Legal Research, covering District Court, E.D. Missouri primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Southern Illinois Stone Co. v. Universal Engineering Corp., 446 F. Supp. 900, 1978 U.S. Dist. LEXIS 19734 (E.D. Mo. 1978).

Opinion

MEMORANDUM AND ORDER

REGAN, District Judge.

By this diversity action Southern Illinois Stone Company (hereinafter Stone Company) seeks to recover substantial damages based on alleged breaches of express and implied warranties in connection with its purchase of new machinery and equipment from Machinery, Inc. (Machinery) and Universal Engineering Corporation (Universal) for use in its new rock crushing plant in Illinois. Defendants have counterclaimed for the unpaid balances of the purchase prices. The Uniform Commercial Code (which has been adopted in Illinois) is applicable.

Prior to the execution of the purchase orders, representatives of Stone Company had a number of discussions with representatives of Machinery and Universal respecting the construction of the proposed plant which was to replace Stone Company’s existing but smaller rock crushing plant. Universal agreed to design and engineer the new plant. Some of the components were to be purchased from Universal and some from Machinery. In addition, some of Stone Company’s existing equipment then being used in its smaller plant was also to be utilized. The culmination of the negotiations was the execution of two separate (but interrelated) purchase orders, one with each defendant.

The actual construction work was to be done by Stone Company, although Universal was to and did provide supervision and advice. From time to time there were delays in the shipment of component parts of the plant. On occasions it became necessary for Stone Company to incur costs for labor to correct some of Universal’s shop errors (for example, mismatched bolts) and to purchase a number of bolts, nuts and washers, which should have (but did not) come with the equipment when delivered. Defendants do not dispute the foregoing facts and concede that plaintiff is entitled to credit for such costs and expenditures.

The first issue is whether, as alleged by plaintiff, defendants warranted that the plant as designed and engineered by Universal and built by Stone Company and using the equipment and machinery sold by defendants would produce an average of 1000 tons of crushed stone per hour on a sustained, continuing basis. Defendants contend that they warranted only that the plant would have a capacity of 1,000 tons [903]*903per hour. The evidence shows that in order to achieve a production of 1,000 tons of crushed rock per hour it would be necessary for the plant to have a capacity to produce between 1,200 to 1,400 tons per hour.

To establish the alleged warranty of production Stone Company offered parol testimony which was taken subject to defendants’ objections that plaintiff was seeking to vary the written agreements. In arriving at our decision we have taken into consideration the parol evidence on this issue but find it unnecessary to rule defendants’ objections thereto.

We have concluded, in light of all the facts and circumstances in the case, that plaintiff was fully informed and knew in advance of the execution of the purchase agreements that the actual production capabilities of the plant as designed by Universal with the equipment to be installed therein would be less than its warranted capacity. We find that as the result of the discussions between the parties it was agreed, on the basis of Universal’s recommendation, that a 5165 Impact Crusher with a rated capacity of 750 tons per hour would be installed, with the understanding that with a grizzly feeder to be used in conjunction with the Impact Crusher the total capacity of the plant would be at least 1,000 tons per hour.

We find as a fact on the basis of the evidence as a whole that what defendants warranted was simply that the plant as designed and engineered by Universal with the equipment and machinery contracted to be installed therein would have a capacity to produce up to 1,000 tons of rock per hour, not that the plant would or could produce such amount of crushed rock on a continuing, sustained basis under any operating conditions. Plaintiff could not have been misled inasmuch as it knew that a rock crushing plant cannot possibly operate at its rated capacity on a continuous basis, and that capacity is merely the maximum production capability of the equipment that can be handled at any given period of time and under the most favorable operating conditions.

The next issue is whether the plant as designed and engineered by Universal accorded with good engineering design and practice, whether there were defects in the component parts sold by defendants, and whether defendants breached their warranty of capacity.

The construction of the plant was substantially completed by plaintiff on August 3,1972. On August 19,1972 one of the legs on the conveyer system buckled, as a result of which it became necessary to reinforce the legs during a four day plant shutdown. The cause of the buckling was undoubtedly too much pressure from rock in the surge pile. We find that defendants should have either designed the legs to withstand the stress of the rock or notified plaintiff in advance that it was necessary to backfill before building the surge pile. Accordingly, we find that defendant Universal is liable for the cost of reinforcing the legs. We do not award any additional sum for loss of production during the four days, taking into account both the absence of proof of damage resulting therefrom as well as plaintiff’s repeated assertions that “in our claim we have disregarded the first four weeks of operation up to September 1, 1972 to allow for a normal shake-down period.”

There is a sharp conflict in the evidence concerning the other alleged deficiencies in the design of the plant and the adequacy of its component parts. There is no question but that Stone Company was caused to shut down the plant on a number of occasions and that at least many of the shutdowns were necessitated by the breaking or replacement of parts of the equipment or by subsequent modifications of the plant. Where the parties differ is with respect to the casual relationship between any alleged breaches of warranty and the shutdowns.

With respect to the allegedly improper design of the plant, the major contentions of Stone Company relate to the rock box, the primary conveyer system, and the Impact Crusher. There is evidence supportive of plaintiff’s claim that the rock box [904]*904both as originally designed and as later modified was of improper- size as being too narrow and too short to accommodate the 50 ton trucks which Universal was aware were intended to be used by Stone Company. However, we find against Stone Company on this claim and hold that the greater weight of the credible evidence supports our finding that the rock box was properly designed and in accord with the agreement of the parties. We also find that the primary conveyer system was properly designed and adequate for the purposes for which it was designed and engineered.

We consider next plaintiff’s contention that the 5165 Impact Crusher, together with the grizzly feeder, did not have the capacity to produce 1,000 tons per hour of crushed rock. Defendants do not seriously controvert the fact that more than the normal number of breakdowns of the plant occurred during the period the 5165 Impact Crusher was used. Stone Company constantly complained to Universal respecting its operating problems. Finally, in April, 1973, Universal agreed to (and did) substitute a larger (6185) Impact Crusher for the 5165 at no additional cost except for the cost to Stone Company of the labor for installation.

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Cite This Page — Counsel Stack

Bluebook (online)
446 F. Supp. 900, 1978 U.S. Dist. LEXIS 19734, Counsel Stack Legal Research, https://law.counselstack.com/opinion/southern-illinois-stone-co-v-universal-engineering-corp-moed-1978.