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REACTION MOLDING TECHS. v. GE

UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA


July 18, 1984

REACTION MOLDING TECHNOLOGIES, INC., t/a Rim/Precision
v.
GENERAL ELECTRIC COMPANY

The opinion of the court was delivered by: LORD

Lord, S.J.

 On April 26, 1984, 585 F. Supp. 1097, I wrote an extensive opinion denying plaintiff's and defendant's motions for partial summary judgment and setting forth the law to be applied at trial. *fn1" I have tried the case without a jury. The following constitute my findings of fact and conclusions of law.

 Plaintiff, a Pennsylvania corporation with its principal place of business in Pennsylvania, produces plastic parts by means of a process known as reaction injection molding. Reaction Molding Technologies (Rim) produces the parts from molds. Rim subcontracts to various subcontractors the construction of the molds used by Rim to produce its plastic parts.

 Defendant is a New York corporation with its principal place of business in New York. I have diversity jurisdiction.

 Count I of the complaint alleges that plaintiff and defendant entered into a contract in 1982 for the construction of four molds from which plaintiff would produce plastic parts for defendant to use in the construction of a medical equipment system, the CT 9800. This Count further alleges that defendant breached the agreement by unilaterally terminating the contract.

 The parties agree that a contract existed between them. The only questions at trial as to Count I were the delivery dates of the contract and whether defendant unilaterally breached the agreement.

 I. Count I: Facts

 Throughout 1981, GE requested that Rim prepare numerous quotations for the production of four molds from which parts were to be constructed for defendant. The four molds in question were to produce the covers for the right and left hand support arms, the small desk and the keyboard housing for the CT 9800. In response to the GE requests, Rim prepared various quotations in 1981 for production of the molds. Because of design changes at GE, however, GE never submitted a purchase order in 1981.

 In February of 1982, GE sent to Rim another request for quotations. Rim prepared its quotations (Rim 1b-1e) which were received by GE on March 2 or March 3, 1982. On the bottom of the first page of all four quotations were the following terms:

 

One-third with order; one-third upon notification of mold completion; one-third upon approval of preproduction samples.

 As to delivery of the covers for the right and left hand support arms, the quotations stated:

 

Delivery: Moldmaker's delivery approximately twenty-two weeks; pre-production samples to follow.

 For the small desk and keyboard housing molds, the delivery terms were identical to those in the quotations for the cover parts with the exception that the approximate number of weeks quoted was sixteen and twenty weeks respectively. Cletus Roshak, the buyer for GE on this project, received the Rim quotations and understood that "one-third with order" meant that Rim wanted a one-third deposit. He also understood that Rim was going to subcontract the construction of the molds and that the word "approximately" in the delivery terms meant that the number of weeks quoted for delivery was not precise. On March 3, 1982, GE prepared a material requisition form (Rim 8) in order to obtain approval from the necessary principals at GE for a purchase order. Although the form could have been rushed through the approval process in a week, it was not completed until March 22, 1982.

 On March 22, 1982, Cletus Roshak, then recently hired buyer for GE, called David Michaelis, vice president of Rim, to tell him that GE was ready to submit purchase orders to Rim for the molds. Roshak told Michaelis that he could not give Rim a one-third deposit with the order because the GE system demanded an invoice before a check could be issued, but he promised that he would rush the check. Michaelis told Roshak that normally moldmakers would not begin work before receiving a deposit, and that he would not do anything until he saw the purchase orders. Because Roshak believed that GE could not process the purchase orders with an approximate number of weeks for delivery, but that a specific date was needed to put into the computer, he told Michaelis that he needed a date to put on the purchase orders. Roshak counted the longest approximate leadtime in the quotations -- twenty-two weeks -- from March 22, 1982 and came up with August 20, 1982. He told Michaelis that he would like to see improvement on the August 20 date.

 Roshak prepared the GE purchase orders (Rim 9a-d). He had the following terms typed on the purchase orders:

 

One-third with order; one-third mold completion; one-third upon approval and acceptance of samples.

 Under the section labeled "delivery schedule", "8/20/82" was typed and Roshak wrote "or sooner" in longhand. In dark print at the bottom lefthand corner of the first page of the purchase orders was the following:

 

SIGN AND RETURN THE ATTACHED ACKNOWLEDGEMENT PROMPTLY GIVING SHIPPING DATE IF DIFFERENT FROM ABOVE

 The second page of the purchase orders was an acknowledgement form. In bold print was the following:

 

THIS ACKNOWLEDGEMENT COPY IS PART OF OUR PERMANENT RECORD. PLEASE FURNISH DELIVERY DATE. SIGN AND RETURN PROMPTLY.

 Roshak knew that these provisions inviting Rim to set its own delivery schedule were printed on the purchase orders.

 On March 24, after Rim received the purchase orders, Michaelis and Roshak had another phone conversation. Michaelis acknowledged receipt of the purchase orders but told Roshak that he had not received the deposit. He asked that GE rush the deposit check to Rim and said that the moldmakers would not begin construction until the check arrived. Roshak told Michaelis that Roshak would rush the check through the GE system and that Rim could expect to receive the check at the earliest possible date.

 On March 27, 1982, Roshak received a package mailed via Federal Express from W. R. Danien, president of Rim. (Rim 10a). The package included a letter from Danien to Roshak taking exception to certain terms in the purchase orders, and acknowledgements of the purchase orders for the four molds. Rim, as is its usual custom, used its own acknowledgement forms rather than the GE acknowledgement forms included in the GE purchase orders.

 All four of the acknowledgements contained the following terms:

 

One-third with order; one-third upon notification of mold completion; one-third upon approval of preproduction samples.

 The delivery terms for the molds to produce the covers for the right and left hand support arms stated:

 

Approximately twenty-two weeks from receipt of one-third deposit. Note: We will accelerate delivery to every possible extent.

 For the molds to produce the small desk and keyboard housing, the delivery terms were worded identically to those for the cover molds except that the approximate number of weeks was sixteen and twenty weeks respectively.

  Roshak understood that the delivery schedule in the acknowledgements referred to moldmakers' delivery of the molds to Rim rather than Rim's delivery of the parts to GE. *fn2" He testified that he was not concerned about the delivery terms in the Rim acknowledgements because he thought GE would send the deposit check promptly and because of his discussions with Michaelis.

 In his letter objecting to certain of GE's terms, Danien took exception to defendant's requirement that it approve mold drawings and that Rim issue biweekly progress reports. A number of GE personnel including Roshak, met with Jeffrey Hill, Rim's Chicago-based sales agent, on April 2, 1982 to discuss Rim's objections. On April 14, 1982, Roshak wrote to Danien to confirm the agreement reached at the April 2, 1982 meeting. Although the delivery schedule was more important to Roshak than the other objections voiced by Danien in his letter accompanying the Rim acknowledgements, and although it is customary practice in the industry to write a confirming letter if there are variations between the terms in the purchase orders and those in the acknowledgements, Roshak did not include in his letter a confirmation of his understanding of the delivery schedule.

 The week of April 26, 1982, Roshak learned for the first time that GE needed the Rim parts delivered to GE by mid-July.

 The one-third GE deposit for the molds did not arrive at Rim until April 26, 1982. Roshak understood that the moldmakers would not start construction until receipt of the deposit, although he expected them to begin preliminary design work before receipt of the deposit. On April 30, 1982, Roshak spoke to Joseph Pompe, the Rim tooling supervisor. Pompe gave Roshak the mold completion dates for the Rim molds. Those dates and the number of weeks they represent from Rim's receipt of the GE deposit check are as follows: Number of Weeks from April 26, Molds Dates Completed 1982 Small desk 8/30/82 18 Keyboard housing 9/13/82 20 Left hand cover arm 9/20/82 21 Right hand cover arm 10/25/82 26 (See Rim 13)

19840718

© 1992-2004 VersusLaw Inc.



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