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POSTTAPE ASSOCS. v. EASTMAN KODAK CO.

March 27, 1978

POSTTAPE ASSOCIATES
v.
EASTMAN KODAK CO.



The opinion of the court was delivered by: HUYETT

 HUYETT, J.

 This suit arises out of a sale of motion picture film by defendant Eastman Kodak Co. (Kodak) to plaintiff Posttape Associates (Posttape), a limited partnership formed to produce a documentary film. In the first trial of this case, the jury found that the film had been manufactured negligently and that the parties had not agreed to limit the manufacturer's liability to replacement of the film. We denied defendant's post trial motions. Posttape Associates v. Eastman Kodak Co., 68 F.R.D. 323 (E.D.Pa. 1975). The Court of Appeals for the Third Circuit reversed our denial of defendant's motion for new trial and remanded the case to determine whether the parties had entered into an agreement limiting defendant's liability. Posttape Associates v. Eastman Kodak Co., 537 F.2d 751, 758 (3d Cir. 1976). At the second trial, the jury found that the parties had agreed to limit defendant's liability for negligent manufacture of film and for breach of warranty to the replacement of film. *fn1" Plaintiff has now filed a motion for judgment notwithstanding the verdict or in the alternative for a new trial. For the reasons that follow we will deny the motion.

 Plaintiff has advanced four arguments in support of its motion. In addressing these arguments, we are mindful that the evidence must be viewed in a light most favorable to the party receiving the jury verdict. Thomas v. E. J. Korvette, Inc., 476 F.2d 471, 474 (3d Cir. 1973). The motion for a judgment notwithstanding the verdict can be granted only where the evidence supports but one reasonable conclusion, while the motion for a new trial is entrusted to the sound discretion of the trial court. Id. at 474-75. "If the evidence in the record, viewed from the standpoint of the successful party, is sufficient to support a jury verdict, a new trial is not warranted merely because the jury could have reached a different result." Gebhardt v. Wilson Freight Forwarding Co., 348 F.2d 129, 133 (3d Cir. 1965). With these principles in mind, we turn our attention to plaintiff's specific contentions.

 The parties agree that the provisions of the Uniform Commercial Code (Code), as adopted in Pennsylvania, control the disposition of the motion. Section 1-201(3) of the Code defines "agreement" as the bargain in fact between the parties "as found in their language or by implication from other circumstances including course of dealing or usage of trade . . . ." 12A P.S. § 1-201(3). At trial, defendant attempted to show that the agreement between the parties to the sale of the film included a term limiting the manufacturer's liability for faulty film to the replacement of the raw stock. In addition to relying upon the language printed on the side of film boxes and canisters, *fn2" defendant contended that this term was established by a usage in the commercial film industry. To prove this trade usage, defendant introduced a number of witnesses who testified to the existence of such a practice in the film industry as well as the reasons underlying its adoption. *fn3"

 While defendant's evidence supports a finding that such a limitation was accepted and reasonable, the record does not include any specific instances of negligently manufactured film or the application of the limitation. Indeed, under cross-examination the witnesses were unable to recall any specific applications of the limitation. This absence of record evidence forms the basis for plaintiff's contention that defendant's proof failed as a matter of law to establish a trade usage. Plaintiff argues that the evidence only established Kodak's attempts to impose a limitation of liability. Trade Usage is defined in Section 1-205(2) as follows:

 
A usage of trade is any practice or method of dealing having such regularity of observance in a place, vocation or trade as to justify an expectation that it will be observed with respect to the transaction in question.

 12A P.S. § 1-205(2). Focusing on this definition, plaintiff argues that usage as defined by "practice" and "method" necessarily connotes repeated applications of the limitation. Plaintiff reasons that only through repeated applications of the limitation can a buyer know or be expected to know that a trade usage exists. Before a trade usage could be established under plaintiff's theory, the record would have to reflect the repeated assertion of claims against Kodak and the invocation of the limitation by Kodak in response to these claims. Plaintiff notes that because of the rarity of film problems, there were no instances of application of the limitation on the record. Plaintiff concludes, therefore, that defendant's evidence could not have established a trade usage.

 The definitions ascribed by the plaintiff to the words "method of dealing" and "practice" do not counsel against our view of "regularity of observance." "Practice" or "method of dealing" refer to the exact policy in question and do not in themselves require proof at trial of repeated applications of the usage sought to be invoked.

 In sum, Section 1-205(2) requires that "[the] existence and scope of such usage are to be proved facts." 12A P.S. § 1-205(2). This factual showing may be made by evidence of repeated applications of the term or of recognition and acceptance by members of the particular industry. We conclude that the testimony offered by defendant was sufficient to support a finding by the jury that at the time of the sale of the film to plaintiff there existed a trade usage limiting a commercial buyer's remedy to replacement of the negligently manufactured film.

 II. Exclusivity of the ...


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