Universal Builders Corp. v. United Methodist Convalescent Homes of Connecticut, Inc.

508 A.2d 819, 7 Conn. App. 318, 1 U.C.C. Rep. Serv. 2d (West) 763, 1986 Conn. App. LEXIS 966
CourtConnecticut Appellate Court
DecidedMay 6, 1986
Docket3963
StatusPublished
Cited by1 cases

This text of 508 A.2d 819 (Universal Builders Corp. v. United Methodist Convalescent Homes of Connecticut, Inc.) is published on Counsel Stack Legal Research, covering Connecticut Appellate Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Universal Builders Corp. v. United Methodist Convalescent Homes of Connecticut, Inc., 508 A.2d 819, 7 Conn. App. 318, 1 U.C.C. Rep. Serv. 2d (West) 763, 1986 Conn. App. LEXIS 966 (Colo. Ct. App. 1986).

Opinion

Spallone, J.

This case arises out of the sale of building materials and supplies. The plaintiff seller, Universal Builders Corporation (Universal), contracted with the defendant, J. H. Hogan, Inc. (Hogan), to supply roof trusses and gables to Hogan for the construction of several buildings on property allegedly owned by the named defendant, United Methodist Convalescent Homes, Inc. (United Methodist). The plaintiffs original complaint was brought against United Methodist to foreclose a mechanic’s lien which the plaintiff had placed on the property involved. Hogan was added as a defendant while the foreclosure action was pending, and the plaintiff amended its complaint to allege, in a second count, that Hogan owed it $7024 for materials and supplies it delivered to Hogan. Subsequently, Hogan filed a bond with the plaintiff in substitution for the mechanic’s lien, and the plaintiff amended the first count of its complaint to reflect this fact.

Hogan counterclaimed alleging that the plaintiff had breached the contract in that it failed to deliver all the supplies in a reasonable time with the result that Hogan had to purchase substitute supplies elsewhere at a price $16,779 in excess of the contract price. Universal filed several special defenses to Hogan’s counterclaim, alleging unconscionability, impossibility and rescission, and also alleging that Hogan had canceled the parties’ agreement.

The trial court concluded that no pleadings or evidence were submitted with regard to the first count [320]*320and found the issues on that count in favor of United Methodist.1 The court found the issues in favor of the seller, Universal, on the second count of Universal’s complaint in the amount of $7024, and in favor of the buyer, Hogan, on Hogan’s counterclaim in the amount of $16,779, having concluded that the plaintiff failed to prove its special defenses to the counterclaim. It, therefore, rendered a judgment in favor of Hogan for $9755 plus interest.

The plaintiff has appealed and claims essentially2 that (1) the legal bases employed by the trial court in awarding damages to the defendant were erroneous, (2) the defendant’s demand for the delivery of materials to be supplied by the plaintiff was unconscionable and thereby terminated the parties’ agreement, and (3) the trial court erred in concluding that no pleadings or evidence were submitted in regard to the first count of the complaint, and therefore erred in not considering the allegations contained in that count.

The plaintiff’s first claim of error challenges generally the legal bases for awarding damages to the defendant. There exists no dispute as to the fact that the parties contracted to supply and to purchase a number of roof trusses and gables. The parties’ agreement called for the “fabrication and delivery [of such materials] as required by [Hogan’s] project superintendent. ...” The testimony of Universal’s secretary-treasurer was that orders for materials pursuant to the parties’ agreement were to be phoned into Universal as they were required. Hogan placed its ini[321]*321tial order for fifty-eight trusses in late February, 1983. The trusses were ultimately delivered in the middle of March, 1983, and were paid for by Hogan at that time. Hogan placed a second order for 102 trusses during the second week of April, 1983. Delivery of those trusses was received by Hogan during the last week of May, 1983. Universal claims that no additional orders were placed. Hogan claims, however, that its project superintendent, as well as other employees, made numerous telephone calls to Universal to stress Hogan’s need for a continuous supply of materials. Joseph Wolfer, Hogan’s project superintendent on the United Methodist project, testified that while Hogan received the delivery of 102 trusses at the end of May, 1983, this amount was only one-half of their requirements at that point. Wolfer testified that Hogan required 100 additional trusses by the middle of June, 1983, and that he telephoned Universal several times during this period in order to express his dissatisfaction regarding the slowness of deliveries. John Wolanik, Universal’s plant superintendent, testified to receiving telephone calls from Hogan personnel during this period, and that the subject of those calls concerned schedule coordination problems between Hogan and Universal.

Having experienced these scheduling and delivery difficulties, and being in need of materials, Hogan, at one point in May, 1983, sought quotes for and obtained trusses from another supplier.3 The additional trusses were, at this time, sought in an effort to restore a measure of continuity to the United Methodist project which had become severely backed-up. On June 28, 1983, Frank P. Gillon, Hogan’s president, sent Universal a letter which expressed Hogan’s frustration over [322]*322Universal’s course of performance. The body of the letter stated in its entirety: “For the past seven weeks, we have attempted to have your firm deliver wood trusses under our order numbered 1805.6.2. Your continued excuses and delays have severely handicapped us in expediting this project. Unless a minimum of 200 trusses are delivered by July 5,1983, you may consider your order cancelled.”

Universal contends that the effect of this letter was to terminate the purchase order. Hogan contends that the letter was intended to obtain Universal’s undivided attention and to identify the specific needs and problems of Hogan. Gillon testified that he did not intend to waive any damage claims to which Hogan was ultimately entitled. Upon receipt of Hogan’s letter, Universal deemed the order canceled. Universal considered it impossible for it to manufacture 200 trusses within the time specified. Thereafter, having received no further deliveries from Universal, Hogan purchased its remaining material requirements for the United Methodist project from other suppliers.

Under the Uniform Commercial Code, “[w]hen reasonable grounds for insecurity arise with respect to the performance of either party the other may in writing demand adequate assurance of due performance . . . . ” General Statutes § 42a-2-609 (1). As “[bjetween merchants the reasonableness of grounds for insecurity and the adequacy of any assurance offered shall be determined according to commercial standards.” General Statutes § 42a-2-609 (2). See, e.g., Kunian v. Development Corporation of America, 165 Conn. 300, 312-13, 334 A.2d 427 (1973). A party's failure to provide such assurance of adequate performance within a reasonable time is a “repudiation of the contract”; General Statutes § 42a-2-609 (4); after which the aggrieved party may resort to any remedy provided in the event of a breach. General Statutes § 42a-2-610.

[323]*323Applying these provisions to the present action, we conclude that the letter Hogan sent to Universal demanding 200 trusses by a specific date expressed properly Hogan’s insecurity with respect to Universal’s performance, and that Hogan thereby availed itself of its right to seek adequate assurance of that performance pursuant to General Statutes § 42a-2-609. “The right to such assurance is premised on reasonable grounds for insecurity. Whether a buyer has reasonable grounds to be insecure is a question of fact. AMF, Inc. v. McDonald’s Corporation, 536 F.2d 1167, 1170 (7th Cir.

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Cite This Page — Counsel Stack

Bluebook (online)
508 A.2d 819, 7 Conn. App. 318, 1 U.C.C. Rep. Serv. 2d (West) 763, 1986 Conn. App. LEXIS 966, Counsel Stack Legal Research, https://law.counselstack.com/opinion/universal-builders-corp-v-united-methodist-convalescent-homes-of-connappct-1986.