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CYCLOPS CORP. v. HOME INS. CO.

January 23, 1975

CYCLOPS CORPORATION, Plaintiff,
v.
The HOME INSURANCE COMPANY, Defendant, v. FISCHBACH AND MOORE, INC., and Allis-Chalmers Manufacturing Company, Third-Party Defendants. CYCLOPS CORPORATION, Plaintiff, v. FISCHBACH AND MOORE, INC., and Allis-Chalmers Manufacturing Company, Defendants


Weber, District Judge.


The opinion of the court was delivered by: WEBER

This case involves a clause in a contract of sale for a large electrical motor manufactured by Defendant Allis-Chalmers and sold by Defendant Fischbach and Moore to Plaintiff Cyclops Corporation.

 The plaintiff's claim here is against the manufacturer and selling agency and is almost entirely for lost profits incurred during the time that the motor was out of service being repaired with a small claim for "direct charges, freight, removal reinstallation, etc." The claim against both manufacturer and distributor is based on the sale of a defective product in breach of warranty, against the distributor it is asserted as breach of contract and against the manufacturer it is based on negligence.

 We have previously determined another claim arising out of the same incident involving the nature of the damage suffered from the event. See Cyclops v. Home Insurance Company et al., 352 F. Supp. 931 (W.D.Pa.1973).

 The defendants have jointly moved for Summary Judgment on the grounds that the written provisions of the sales documents explicitly exclude liability for consequential damages.

 There has been very extensive discovery, production of documents, interrogatories, depositions and requests for admissions as to documents in this case, much of which we now find immaterial to the disposition of the controlling question before us. The parties have been afforded a full exploration of all relevant evidence. As to the controlling question we are convinced that there is no genuine issue of material fact.

 The pertinent contract provisions read as follows:

 
"Company's liability to Purchaser whether in contract or in tort arising out of warranties, representations, instructions, or defects from any cause, shall be limited exclusively to correcting the equipment and under the conditions as aforesaid."
 
"Company shall not in any event be liable for indirect, special, consequential or liquidated damages or penalties."
 
" Conditions of Service.
 
* * *
 
The Company shall in no event be liable for indirect, special, or consequential damages."

 We omit the provisions in the contract documents pertaining to the exclusions of implied warranties and the waiver of statutory warranties because we believe that the sole controlling question is the limitation of damage clauses and their effect under Sec. 2-719 of the Uniform Commercial Code, and not the express or implied warranties under Secs. 2-313 to 2-316 of the Uniform Commercial Code.

 The above recitals are contained in Motion Exhibit 4 which is a Proposal and Contract, No. IS-2255, dated November 23, 1965 from Allis-Chalmers to Fischbach and Moore, which was transmitted to Cyclops by Fischbach and Moore with a letter stating that the motor supplied would be in accordance with Allis-Chalmers specification and warranty. This proposal was accepted by Cyclops in their purchase order No. 4766, dated December 15, 1965 confirming its order for the equipment as specified in Allis-Chalmers Specification IS-2255.

 Fischbach and Moore served as a distributor in this transaction. Title passed through its hands and it served as a contractor for installation. They had served in this capacity in prior transactions between these parties. Cyclops stated that it wished to buy equipment manufactured by Allis-Chalmers. The purchase was made through Fischbach and Moore because that firm would aid in financing the transaction. The transaction was in all other respects a transaction between Allis-Chalmers and Cyclops for equipment as specified by Allis-Chalmers as set forth in the initial letter and specifications sent directly by Allis-Chalmers to Cyclops on October 27, 1965. (Motion Exhibit 33), Cyclops Purchase Order to Fischbach and Moore, dated December 15, 1965 ordered the equipment as specified in Allis-Chalmers' specifications, (Motion Exhibit 2). The warranties of Allis-Chalmers and Fischbach and Moore both run to the benefit of Cyclops, and the limitation of damages ...


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