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Cliffstar Corp. v. Elmar Industries, Inc.

Citations: 254 A.D.2d 723; 678 N.Y.S.2d 222; 37 U.C.C. Rep. Serv. 2d (West) 1031; 1998 N.Y. App. Div. LEXIS 10399

Court: Appellate Division of the Supreme Court of the State of New York; October 2, 1998; New York; State Appellate Court

Narrative Opinion Summary

In a dispute over the sale of a remanufactured filler machine intended for producing bottled fruit juices, the plaintiff sought damages for breach of contract and warranties, while the defendant moved for summary judgment to dismiss the complaint. Conversely, the plaintiff cross-moved for partial summary judgment on liability. The Supreme Court denied both motions, and the order was affirmed without costs. The legal proceedings revolved around the application of UCC Article 2, whereby the plaintiff had options to reject the nonconforming machine, revoke acceptance, or accept it and claim damages for breach. The court found the plaintiff's delay in rejecting the machine unreasonable and insufficient evidence of timely revocation of acceptance. However, the plaintiff's ability to recover damages remained intact if they provided reasonable notice of the breach, which was satisfied by their repeated complaints and service requests. The case presents unresolved factual disputes regarding the machine's conformity and its impact on the plaintiff's damages, warranting further proceedings. Appeals were from the Supreme Court order in Chautauqua County.

Legal Issues Addressed

Notice Requirement under UCC 2-607

Application: The plaintiff's repeated complaints and service requests were deemed sufficient to constitute notice of breach, preserving their right to claim damages.

Reasoning: The plaintiff’s notice only needed to indicate that the transaction was problematic, without requiring a formal claim for damages.

Rejection of Goods under UCC 2-602

Application: The plaintiff failed to prove reasonable rejection of the nonconforming machine as required under UCC 2-602.

Reasoning: The defendant demonstrated that the delay between delivery and the plaintiff’s claim of rejection was unreasonable, fulfilling its burden of proof.

Remedies for Nonconformity under UCC Article 2

Application: The plaintiff retains the right to pursue damages for nonconformity despite failing to reject or revoke acceptance, contingent upon reasonable notification of breach.

Reasoning: The plaintiff’s failure to reject or revoke acceptance does not preclude other remedies under UCC Article 2 for nonconformity (UCC 2-607 [2]).

Revocation of Acceptance under UCC 2-608

Application: The plaintiff did not provide sufficient evidence of unequivocal and timely notice of revocation of acceptance per UCC 2-608.

Reasoning: Additionally, the defendant provided evidence that the plaintiff did not give the necessary 'unequivocal timely notice' of revocation of acceptance as required by UCC 2-608.

Triable Issues of Fact

Application: Both parties presented triable issues of fact regarding the machine's conformity and the causation of damages.

Reasoning: Both parties presented triable issues of fact regarding whether the machine was nonconforming and whether such nonconformity caused the plaintiff's damages.