Petition — Standard Alliance Industries, Inc. v. Black Clawson Co.
Supreme Court brief1979
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Supreme Court, U. & ‘1
ED
i} FEB 28 1979
HAAR RODAK, JR., CLERK
Supreme Court of the Anite
OCTOBER TERM, 1978
No. 728713338
STANDARD ALLIANCE INDUSTRIES, INC.,
Petitioner,
VS.
THE BLACK CLAWSON COMPANY,
Respondent.
PETITION FOR A WRIT OF CERTIORARI TO THE
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT.
STANLEY M. CHESLEY,
WAITE, SCHNEIDER, BAYLESS
& CHESLEY,
1318 Central Trust Tower,
Cincinnati, Ohio 45202,
Attorney for Petitioner, Standard
Alliance Industries, Inc. —
Of Counsel:
JEROME N. GROARK,
PHILLIP B. ALLEN,
Rooks, Pirts, FULLAGAR AND Pousrt,
208 South LaSalle Street,
Chicago, Illinois 60604.
Gunthorp-Warren Printing Company, Chicago e Financial 6-6565
me
TABLE OF CONTENTS.
PAGE
Chace eche kW Sade utneecessvcvcces 1
EE EES OP ee ee 2
EEE ee 2
Statutory Provisions Involved ..............00.50005 2
EE 2
Reasons for Granting the Writ ..................... 5
1. The Court of Appeals Adopted a Judgment N.O.V.
Standard Which Conflicts with This Court's
Standard and Other Sixth Circuit Decisions .... 5
2. The Court of Appeals Erroneously Invaded the
TE sao dss d wees sereseccccs 7
RE ES EE 11
TABLE OF AUTHORITIES.
Cases.
Brady v. Southern R. R., 320 U. S. 476, 64 S. Ct. 23
EES ESE 7
Dick v. New York Life Ins. Co., 359 U. S. 437, 79 S. Ct.
EIS EE 7
Eastern Air Lines v. McDonnell Douglas Corp., 532 F. 2d
Re Bes wis a 8
Oday v. Webb, 29 Ohio State 2d 215, 280 N. E. 2d 896
ESR AS y 6 dawdidiedesesceseces 6,7
Wolfel v. Sanborn, 555 F. 2d 582 (6th Cir. 1977) ...... 6, 7
Statute.
ee 7,8
IN THE
Supreme Court of the Anited States
OcTOBER TERM, 1978.
STANDARD ALLIANCE INDUSTRIES, INC.,
Petitioner,
VS.
THE BLACK CLAWSON COMPANY,
Respondent.
PETITION FOR A WRIT OF CERTIORARI TO THE
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT.
Standard Alliance Industries, Inc. petitions for writ of cer-
tiorari to review the judgment of the United States Court of
Appeals for the Sixth Circuit in this case.
OPINIONS BELOW.
The opinion of the Sixth Circuit Court of Appeals (“Court
of Appeals”) is reported at 587 F. 2d 813 (6th Cir. 1978) and
is attached as Appendix A (Al-A31). The denial of the petition
for rehearing and petition for rehearing en banc is attached as
Appendix B(A32).
JURISDICTION.
The judgment of the Court of Appeals was entered on
October 20, 1978. A petition for rehearing and a petition
for rehearing en banc were denied on November 30, 1978.
The judisdiction of this Court is invoked under 28 U. S. C.
§ 1254(1).
QUESTIONS PRESENTED.
1, Whether the Court of Appeals adopted a judgment
n.o.v. standard which conflicts with this Court’s standard and
other Sixth Circuit decisions.
2. Whether the Court of Appeals invaded the province
of the jury in granting judgment n.o.v.
STATUTORY PROVISION INVOLVED.
O. R. C. § 1302.65 (UCC 2-607) Effect of acceptance; notice
of breach; burden of establishing breach after acceptance;
notice of claim or litigation to person answerable over.
* * * * *
(C) Where a tender has been accepted:
( 1) the buyer must within a reasonable time after
he discovers or should have discovered any breach
notify the seller of breach or be barred from any
remedy; and
* * * * *
STATEMENT OF THE CASE.
In 1965 the plaintiff, Standard Alliance Industries, Inc. (then
known as Standard Forgings Corporation), decided to improve
its forging technology. The defendant, The Black Clawson Com-
pany, proposed to sell the plaintiff an automatic radial axle
forging machine for the purpose of manufacturing railroad axles.
3
In January, 1965, the defendant sent the plaintiff a proposal
(setting forth among other things the specifications for the
forging press) to manufacture the machine and, after various
meetings, the defendant submitted another such proposal in
May of 1965.
Of critical importance to the plaintiff in negotiating a con-
tract to purchase such a forging facility were the performance
warranties. The performance warranties which became a part
of the contract of purchase dated August 6, 1965, are as follows:
The following express warranties, which relate to
mechanical function only become an adjunct to our con-
tract clause No. 1 page 11 and supersede all references to
warranties that may be contained in the description of
the machine pages 207, either expressed or implied.
Black Clawson warrants that the subject machinery will
perform the following mechanical functions:
1. Press will deliver 1000 ton ram capacity at 150 strokes
per minute, each 4” from bottom dead center.
2. Press will have a maximum speed of 250 strokes per
minute—with a range of 10 to 250 SPM.
3. Rams at bottom of stroke will have a parallelism of
within .005”.
4. Peel and press will trace template within plus or minus
015”.
5. Feed adjustments will have a range up to 0.375” per
second.
6. Peel rotation will have a range of 5 to 100 RPM and
will be designed to lock at the 90° positions.
7. Peel traverse speed will have a range of | ft/minute to
45 ft/minute, and will be designed to lock in position.
8. The mechanical functions can be programmed to
operate in automatic sequence in the specified capaci-
ties and accuracies or may be operator interrupted and/
or commanded as required.
The quality and quantity of production is not the re-
sponsibility of the seller. Page 12 of Quotation No. 2262,
Rev. 2.
4
The express warranties of mechanical function are commonly
referred to as the “Page 12 warranties”.
Following numerous design and manufacturing problems, the
machine was shipped to the plaintiff in October, 1967. From the
time the machine was assembled, the machine did not perform
any of the warranted mechanical functions (the Page 12 war-
ranties). The hydraulic operation of the manipulator jaws was
defective. The peels would not rotate 90° after each forging
blow. The rams would not operate at 250 strokes per minute.
The dies would not lock in position. There was no synchroniza-
tion between the peel rotating speed and ram strokes. The two
rams were not synchronized themselves. The machine never
operated automatically.
Because of these many problems, Standard Alliance with-
held $100,000 of the purchase price and notified the defendant
of the plaintiff's dissatisfaction by a letter dated December 27,
1967. The defendant’s President, Carl Landegger, responded on
January 3, 1968 by letter guaranteeing to the plaintiff that the
defendant would work on the machine “until everyone is
satisfied”.
During the succeeding months, although repair efforts were
made, the machine would not operate. The defendant’s docu-
ments and testimony reveal that its personnel could not get the
machine running during this period. In June, 1968, the de-
fendant discontinued its efforts to repair the machine.
Following the defendant's cessation of repairs in June, 1968,
one of defendant’s engineers, James Gardner, visited the plain-
tiffs plant on June 26-27, 1968, July 8-11, 1968 and in August,
1968. Each visit concerned problems with the machine’s peels.
The machine’s peels had not operated properly since the machine
was first assembled, and their failure to operate had concerned
the plaintiff throughout this period.
On May 30, 1969, the plaintiff filed suit against the defend-
ant in federal court on the basis of diversity of citizenship. The
plaintiff's complaint alleged breach of express warranty, breach
‘
5
of warranty to repair or replace defective parts, breach of
implied warranty, and negligence and made a claim for back-
charges. The defendant counterclaimed for the cost of a spare
ram.
In a bifurcated trial, a jury returned a verdict in favor of
the plaintiff on the breach of express warranty and breach of
the warranty to repair or replace defective parts. The same
jury found that the machine could not be repaired and awarded
the plaintiff $525,000 in damages. The Trial Court directed a
verdict in favor of the defendant as to breach of implied war-
ranty and negligence.
At a separate trial before the Court, the Trial Court found
in favor of the plaintiff in the amount of $807.09 plus interest
on the backcharges. The Court also found in favor of the de-
fendant in the amount of $25,950 plus interest on its counter-
claim.
The Sixth Circuit Court of Appeals reversed the judgment
in favor of the plaintiff entered pursuant to the jury’s verdict.
The Court of Appeals also increased the award in favor of
the plaintiff on its backcharges and affirmed the judgment on
defendant’s counterclaim.
REASONS FOR GRANTING THE WRIT.
1. The Court of Appeals Adopted a Judgment N.O.V. Standard
Which Conflicts with This Court’s Standard and Other Sixth
Circuit Decisions.
This case concerns the invasion by the Court of Appeals of
the province of the jury. It accomplished this fact first by
adopting a judgment n.o.v. standard which conflicts with this
Court’s standard and the Sixth Circuit’s own decisions and
second, when applying this new standard, by selecting seg-
ments of the record which supported its conclusion while
ignoring those portions of the record which supported the jury’s
verdict.
6
At 587 F. 2d 823 (A18), the Court of Appeals set forth its
standard for judgment n.o.v. The Court of Appeals stated:
The standard which defendant must meet is a stiff one.
To grant a directed verdict or J.N.O.V., the evidence
must be “such that there can be but one reasonable con-
clusion as to the proper verdict.” Wolfel v. Sanborn, 555
F. 2d 583, 593 (6th Cir. 1977). Ohio’s standard is the
same. Ohio R. Civ. Pr. 5O0(A). See Oday v. Webb, 29
Ohio State 2d 215, 280 N. E. 2d 896 (1972).
The Court of Appeals failed to state the complete standard
enunciated in these opinions.
In Wolfel v. Sanborn, supra, Judge Phillips gave a more
comprehensive definition of the judgment n.o.v. standard:
In reviewing plaintiff's contentions that the directed ver-
dict on the arrest and search issues were improvidently
granted by the district court, this court must apply the
strict standard that a directed verdict was not proper unless
the evidence is such that there can be but one reasonable
conclusion as to the proper verdict. Reeves v. Power Tools,
Inc., 474 F.2d 375, 380 (6th Cir. 1973). Where there
is conflicting evidence presented sufficient to raise a ma-
terial issue of fact, a directed verdict should not be granted,
and credibility of evidence is not to be considered in making
the determination. Id, at 598. [Emphasis supplied.]
The Court in Oday v. Webb, supra, gave the same complete
definition in setting down the Ohio standard. There the Court
said:
Conversely, it is also the duty of a trial court to with-
hold an essential issue from the jury when there is not
sufficient evidence relating to that issue to permit reason-
able minds to reach different conclusions on that issue.
In other words, if all the evidence relating to an essential
issue is sufficient to permit only a conclusion by reason-
able minds against a party, after construing the evidence
most favorably to that party, it is the duty of the trial
court to instruct a finding or direct a verdict on that issue.
against that party. 280 N. E. 2d at 889-890. [Emphasis
supplied.]
7
This Court’s test is identical to that set forth in Wolfel and
Oday. Brady v. Southern R. R., 320 U. S. 476, 64 S, Ct. 232
(1943).
In determining whether “but one reasonable conclusion as
to the proper verdict” exists, a court must not weigh the
credibility of the witnesses and must view the evidence in the
light most favorable to the plaintiff. The Court of Appeals,
however, subtly ignored this most significant part of the n.o.v.
standard. By eliminating this half of the test, the Court of
Appeals has opened the door for the Court of Appeals to
weigh the evidence and substitute its judgment for the jury’s.
This Court has corrected similar abuses by a court of appeals
in Dick v, New York Life Ins. Co., 359 U. S. 437, 79 S. Ct.
921 (1958). The central point of that case was that the dis-
trict court judge was most familiar with the evidence and the
credibility of the witnesses. He determined that the case should
have gone to the jury. That decision being correct, the Court of
Appeals should not have substituted its decision for the district
judge’s. 359 U. S. at 447, 79 S. Ct. at 927.
The judgment n.o.v. standard established by the Court of
Appeals is at variance with the accepted standard. With this new
test, the Court of Appeals seeks to enlarge its jurisdiction. If
allowed to stand, the Court of Appeals will, as it did in this case,
be permitted to selectively read the record to overturn a verdict
which is contrary to its own view of a case. This standard
must be rejected.
2. The Court of Appeals Erroneously Invaded the Province
of the Jury.
As the first section of this petition contends, the opinion of
the Court of Appeals established a new and improper test for
judgment n.o.v. That the test used by the Court of Appeals
was not inadvertent is proven by its analysis of the evidence in
the case. The Court of Appeals selectively examined the record
8
to dredge up facts which supported its conclusion, while com-
pletely ignoring facts which supported the jury’s verdict.
The focus of the Court of Appeals’ application of its standard
pertains to the issue of notice. The opinion holds that, while the
defendant had knowledge of its breach of warranty, the plaintiff
failed to give the notice as required by § 2-607 of the Uniform
Commercial Code. 587 F. 2d at 824-825 (A20-A22).
The Court of Appeals’ reversal of the jury’s finding that the
plaintiff gave the defendant notice only compounds the Court
of Appeals’ erroneous application of its judgment n.o.v. standard,
because the issue of notice is a jury question. See Official Com-
ments to Section 2-607. The Court of Appeals adopted Eastern
Air Lines, Inc. v. McDonnell Douglas Corp., 532 F.2d 957
(Sth Cir. 1976). That case holds that the issue of notice is
“particularly within the province of the jury.” 532 F. 2d at
973. The Eastern court stresses that the standard for what con-
stitutes notice is not rigid, and the determination of the suf-
ficiency depends upon the fact finder’s examination of the entire
course of conduct of the transaction. 532 F. 2d at 978. The
Court of Appeals, however, paid mere lip service to this im-
portant concept.
The Court of Appeals opinion cited with accuracy some evi-
dence and some exhibits from which the jury could reasonably
infer that the defendant had knowledge of its breach of its duty
to repair the machine. 587 F. 2d at 824 (A20-A21). The
Court of Appeals correctly applied the principle that such an
issue is exclusively within the province of the jury and concluded
that this evidence was sufficient to support a finding by the
jury that the defendant had knowledge of the breach of its duty.
The Court of Appeals, however, did a complete turn-around
in considering the question of whether the defendant had notice
from the plaintiff of the defendant’s breach of its duty to repair
the machine. On this fact question, the Court of Appeals recon-
structed the record, weighed the credibility of the witnesses and
took the evidence in the light most favorable to the defendant.
The Court of Appeals erroneously stated that Black Clawson
9
was never told after June 21, 1968 that anything was wrong.
587 F. 2d 825 (A21). The Court of Appeals concluded, con-
trary to the jury’s verdict, that Black Clawson had no notice.
There is ample evidence, when taken in the light most favor-
able to the plaintiff, from which the jury could have reasonably
concluded the defendant had notice. The record reflects that
a Black Clawson engineer, James Gardner, visited the plain-
tiffs plant a number of times after June 21, 1968. On each such
occasion Gardner’s visits included examination or repair of peel
problems. The peels were a specific subject of express warranty.
Their malfunction was a continuing problem specifically related
to the bending and twisting of the axles. The peel problems
existed immediately upon startup and were never remedied."
Gardner’s next visit after June 21, 1968 was on June 26 and
27, 1968 (Ex. 3700-3701) (A49-A50). During this visit
Gardner attempted to remedy the severe bending condition oc-
curring during forging by programming changes in the peel
action. Gardner next returned from July 8 through July 11,
1968 (Ex. 3720) (A51). Again Gardner attempted to cure the
persistent bending problems caused by the peels. Harold Chall-
man’s testimony highlights the lack of success of Gardner’s July
visit (726a-728a) (A35). The jury was very interested in this
visit and, during its delibe~ations, asked the Trial Court what
prompted Gardner’s visits (1705a) (A37). This question shows
the jury specifically considered the notice issue as instructed
by the Trial Court.
Gardner’s visits did not end in July. Alfred Romagano, de-
fendant’s Vice-President, testified that Gardner returned to the
plaintiff's plant for two weeks in August, 1968 and also was
there in September, 1968 (1235a; Ex. 3757) (A36; A53-A54).
1. The following citations to the record are examples of testimony
concerning the malfunctioning peels. They are reproduced as are
other citations to the record as Appendix C (A33-A55).
403a(A33), 690a-691a(A33-A34), 695a(A34), 706a-708a
(A34), 726a-728a(A35), Ex. 2412(A40), 2462(A41-A42),
3069-70(A43-A44), 3482(A46), 3493-94(A47-48), 3700-01
(A49-A50), 3720(A51), 3731(AS2).
10
Romagano’s August memorandum conceded that the machine
was “malfunctioning” and that Gardner was required to return to
Standard Alliance for “customer relations” purposes (Ex. 3757)
(A53-A54). This evidence belies Romagano’s bald statement
that Black Clawson did not receive any complaints or notice of
customer dissatisfaction after June 21, 1968.
On September 18, 1968, Romagano instructed Mr. Gardner to
dissemble if asked about any discussion of peel problems be-
tween Romagano and Gardner (1229a; Ex. 3832) (A36; A55).
An examination of the cited exhibits and testimony in the light
most favorable to the plaintiff reveals more than slight evidence
from which the clear inference can be drawn that the plaintiff
notified the defendant of its breach. One can infer that Gardner
did not go back to Standard voluntarily. Someone had to call
him back. One can infer that “customer relations” were neces-
sary because Standard had notified Black Clawson that it con-
sidered them to be in breach. The jury could have inferred from
Romagano’s scheme of circumventing any confrontation with
Harold Challman, plaintiff's employee, regarding the failure to
repair the peels that Black Clawson had been notified of its
breach.
Notwithstanding such evidence and the reasonable inferences
that can be drawn from it, the Court of Appeals concluded that
“most” of the contact between the parties after June 21, 1968
was not about defects in the machine. 587 F. 2d at 825, fn. 27
(A21-A22). Implicit in this statement, however, is the conces-
sion that some of the contact did concern the defects in the
machine and the failure to the defendant to repair them. Further,
this characterization of the evidence is itself a weighing process
reserved for the jury.
The Court of Appeals employed a double standard by stating
that the defendant’s knowledge of the defects could be inferred
from the evidence, while notice to the defendant could not be
inferred from the same or additional evidence. The jury was
11
certainly entitled to infer both notice and knowledge from the
same facts. Nowhere did the Court of Appeals’ opinion state,
nor does the Court of Appeals cite any case which holds, that a
properly instructed jury is limited in the conclusions it can draw
from the facts.
The plaintiff does not assert that other inferences cannot be
drawn from the same evidence. However, that is not the test.
The question before the Court of Appeals was whether, viewing
the evidence in the light most favorable to Standard Alliance and
without weighing the credibility of any of the evidence, there
could be but one reasonable conclusion as to the issue of notice.
The plaintiff submits that there was more than one reasonable
conclusion as is evidenced by the jury’s verdict.
The Court of Appeals should not be permitted to ignore evi-
dence supporting the plaintiff's position. Nor should the Court
of Appeals be permitted to ignore the jury’s specific considera-
tion of the notice issue (1705a) (A37). The jury’s finding of
notice to Black Clawson was based upon reasonable inferences
from sufficient evidence. That finding should be reinstated by
this Court.
12
CONCLUSION.
For the reasons stated above, Standard Alliance Industries,
Inc., requests this Court to grant its petition in this case for a
Writ of Certiorari to the United States Court of Appeals for the
Sixth Circuit.
Respectfully submitted,
STANLEY M. CHESLEY,
WAITE, SCHNEIDER, BAYLESS
& CHESLEY,
1318 Central Trust Tower,
Cincinnati, Ohio 45202,
Attorney for Petitioner, Standard
Alliance Industries, Inc.
Of Counsel:
JEROME N. GROARK,
PHILLIP B. ALLEN,
Rooks, PiTTs, FULLAGAR AND Poust,
208 South LaSalle Street,
Chicago, Illinois 60604.
Al
APPENDIX A.
STANDARD ALLIANCE INDUSTRIES, INC.,
Plaintiff-A ppellee,
vs.
THE BLACK CLAWSON COMPANY,
Defendant-Appellant.
STANDARD ALLIANCE INDUSTRIES, INC.,
Plaintiff-A ppellee-Cross-A ppellant,
vs.
THE BLACK CLAWSON COMPANY,
Defendant-A ppellant-Cross-A ppellee.
Nos. 76-2006, 76-2007.
United States Court of Appeals,
Sixth Circuit.
Argued Feb. 13, 1978.
Decided Oct. 20, 1978.
Rehearing and Rehearing En Banc
Denied Nov. 30, 1978.
Robert T. Keeler, Taft, Stettinius & Hollister, Lawrence D.
Walker, Cincinnati, Ohio, for defendant-appellant.
Stanley M. Chesley, Waite, Schindel, Bayless & Schneider,
Cincinnati, Ohio, for plaintiff-appellee.
A2
Before PHILLIPS, Chief Judge, KEITH and MERRITT, Circuit
Judges.
KEITH, Circuit Judge.
This case concerns a machine, a 175 ton “green monster,”?
more formally known as a horizontal automatic radial forging
facility. This machine is the cause of this multi-million dollar
breach of warranty litigation between its manufacturer, the
Black Clawson Company, (Black Clawson), and its purchaser,
Standard Alliance Industries, Inc. (Standard Alliance). After
protracted discovery, three separate trials and an unsuccessful
mandamus petition to this court, this case comes before us
on appeal and cross appeal from the final judgments below.
This litigation principally concerns whether the Black Claw-
son-built machine was in compliance with certain express war-
ranties. After a four-week trial on the liability issue, a jury
found that the machine did not comply with the warranties and,
implicitly, that defendant Black Clawson had adequate notice
of the breach. That same jury, at a separate trial, assessed
damages at $525,000. Finally, at a bench trial, the district
court ruled on two peripheral issues arising from the transac-
tion. Black Clawson appeals from the jury’s verdict on liability,
raising a host of issues. Standard Alliance, although victorious
below, cross appeals, complaining that it did not receive the full
damages to which it was entitled. Black Clawson also appeals
from the damages award. Finally, Standard Alliance appeals
from the judgment of the court below, at the bench trial. We
reverse the judgment of liability entered at the jury trial and
affirm in part, reverse in part, the judgment at the bench trial.
Facts
This saga began in the early 1960's. Plaintiff, Standard Alli-
ance Industries, Inc.,? manufactured railroad car axles, using
1. It was so dubbed by plaintiff's employees.
2. At the time, the company was known as Standard Forgings
Corporation. To avoid confusion, we shall refer to plaintiff as
Standard Alliance throughout.
A3
the drop hammer method of forging, by which the axles were
formed from steel bars by steam hammers. Fearing that its
competitors were forging ahead with more sophisticated manu-
facturing techniques, plaintiff began to actively explore newer
technology.
By 1965 the plaintiff determined that it should automate the
forging process and purchase an automatic forging machine.
There were two manufacturers who could provide such a
machine: one was a European concern, known as the GFM
company,’ the other was the Black Clawson Company. Black
Clawson had never manufactured an automatic forging machine
before, but it did have general experience as a major machine
builder.
The plaintiff was swayed by Black Clawson’s reputation, its
proposed design and its promised fast delivery time.* Serious
negotiations commenced between the two companies in Janu-
ary of 1965. All aspects of the proposed sale were carefully re-
viewed and negotiated. A major stumbling block was the war-
ranty. The seller, Black Clawson, did not wish to warrant the
quality or quantity of the machine’s production. The buyer,
Standard Alliance, insisted on a series of performance guaran-
tees, notably a forging cycle of two minutes and a finished axle
within certain tolerances. Finally, a compromise was reached.
Black Clawson would guarantee that the machine would per-
form a series of mechanical functions but would not guarantee
the quality or quantity of production. A contract was signed on
August 16, 1965, excluding implied warranties,” but containing
certain agreed upor express warranties:
3. GFM stands for Gesellschaft fiir Fertingungstechnik und
Maschinenbau Ges M. B. H. literally translatable as Society of Forg-
ing Engineers and Machine Builders. We shall at all times refer to
this company as GFM.
4. We also note, as did the district judge below, that the GFM
machine was much more costly than the Black Clawson machine.
5. Selling Condition No. 9 states in relevant part: ‘
Any representation, oral or written, any express or implied
warranties including but not limited to warranties of merchant-
(Footnote continued on next page.)
A4
The following express warranties, which relate to
mechanical function only become an adjunct to our con-
tract clause No. 1 page 11 and supersede all references to
warranties that may be contained in the description of the
machine pages 2-7, either expressed or implied. ;
Black Clawson warrants that the subject machinery will
yerform the following mechanical functions:
1. Press will deliver 1000 ton ram capacity at 150
strokes per minute @%4” for bottom dead center.
2 Press will have a maximum speed of 250 strokes
per minute—with a range of 10 to 250 SPM.
3. Rams at bottom of stroke will have a parallel-
ism of within .005”.
4. Peel and press will trace template within plus
or minus .015”.
5. Feed adjustments will have a range up to
0.375” per second.
6. Peel rotation will have a range of 5 to 100
RPM and will be designed to lock at the 90°
positions.
7. Peel traverse speed will have a range of 1
ft/minute to 45 ft/minute, and will be designed
to lock in position.
8. The mechanical functions can be programmed
to operate in automatic sequence in the specified
capacities and accuracies or may be operator inter-
rupted and/or commanded as required.
The quality and quantity of production is not the re-
sponsibility of the seller.
We shall refer to these warranties as the “page twelve” war-
ranties, as do the parties. The contract further limited the sell-
er’s obligations under the warranty to repair or replace defective
parts for a one-year period. Selling Condition 1 states:
(Footnote continued from preceding page.)
ability or fitness for a particular purpose and any terns or
conditions which are not set forth herein are hereby excluded
and shall be of no effect.
NSS
AS
1. Seller warrants the equipment manufactured by it
will be free from defects in workmanship and material.
Equipment manufactured by others than the Seller is sold
exclusively under such warranty as the manufacturer may
give to the Seller and to the extent enforcible by the
Seller. The Seller does not warrant the amount or quality
of production unless expressly stated in the specifications.
If any part be found within one year from date of delivery
to have been defective when delivered (any shortcoming
which prevents performance to the specific standards, if
any, set forth * being deemed a defect) and provided im-
mediate notification in writing is given to the Seller, the
Seller will replace or repair such part. The liability of Seller
under this warranty is limited to repair or replacement of
the defective part, all damage claims being excluded.
* on Page 12 hereof
Finally, the contract specifically excluded consequential dam-
ages for any established breach of warranty.°
The contract also contained six pages of technical specifica-
tions for the machine and provided for a delivery time of ten
to twelve months. The parties have stipulated that the total
amount paid for the machine was $571,790.00.
Immediate problems arose. The manufacturing process took
longer than expected and many design changes were made while
the machine was being built. Finally, in July, 1967, Black
Clawson began to ship the machine to Standard Alliance’s East
Chicago, Indiana plant. Installation was completed by October,
1967.
The machine proved troublesome from the start. On Decem-
ber 27, 1967, Standard Alliance sent a letter to Black Clawson
outlining the machine’s problems. The parties met to discuss
the situation on January 2, 1968. In a follow-up letter, on
6. Selling Condition No. 3 states:
The Seller is not responsible for claims based upon down-
time, overhead, labor, damage to machinery, spoilage and loss
of production or profit or for consequential damage for any
cause arising out of or in connection with this agreement.
A6
January 3, 1968, Black Clawson’s president promised that his
company would work with Standard Alliance to fix the ma-
chine. Accordingly, a team of Black Clawson employees was
sent to commence repairs. For over five months, both sides
labored to make the machine operable. On June 21, 1968,
defendant ceased working on the machine and withdrew its
employees.’
On September 30, 1968, plaintiff sold its entire Standard
Forgings Division to a group of buyers termed “the Wiener
Group.” The new purchasers also attempted to get the machine
to function properly, but with no success. An outside consultant
was called in; he pronounced the machine underdesigned and,
as a practical matter, irreparable. The instant action was filed
on May 29, 1969, almost eight months to the day after Standard
Alliance completely disposed of its interests in the machine to
“the Wiener Group.” On July 14, 1969, “the Wiener Group”
began to dismantle and to sell the machine for scrap. Eventu-
ally, a new GFM axle forging machine was brought in and put
into operation.
I. The Liability Trial
Plaintiff originally sued under four different theories:*
1) breach of the page twelve express warranties; 2) breach of
the express warranty to repair or replace defective parts;
3) breach of implied warranties of merchantability and fitness
7. There were two service calls on the machine after June 21,
1968. The first was from July 8 to July 11, 1968, when Black
Clawson’s James Gardner returned to try to improve the quality of
the axles being produced. A memorandum he wrote about the visit
indicated that the machine was functioning properly, although this
was contradicted at trial by Standard Alliance’s Harold Challman.
The second visit Occurred on November 7, 1968, when “the
Wiener Group” attempted to put the machine into production; Black
Clawson was called in to correct a minor electrical! malfunction.
8. . Plaintiff advanced an additional cause of action dealing with
the issue of “back charges.” This, together with the defendant’s
counterclaim, is considered in Part III, infra.
A7
for particular purpose; and 4) negligence in the building and
installation of the machine. These different causes of action
were based on the same factual allegations—despite repair ef-
forts, the machine could not be made to forge axles as it was
supposed to. The judge directed verdicts in favor of the de-
fendant on the negligence and implied warranty claims.’ He
then submitted the remaining two claims to the jury: 1) whether
defendant had breached any of the page twelve performance
warranties in the contract; 2) whether defendant had breached
the ‘warranty”’’ to repair or replace defective parts. The jury
found in favor of the plaintiff on both causes of action. In
reality, the two causes of action are synoaymous;"’ but they
must be separated for purposes of the following discussion.
9. Plaintiff has not appealed from these rulings.
10. Both parties, throughout trial and on appeal, have referred to
defendant’s agreement to repair or replace defective parts as an
express warranty. This provision does appear to meet UCC § 2-313's
definition of express warranties in that it is a “promise made by the
seller to the buyer which relates to the goods and becomes part of
the basis of the bargain . . .” It is perhaps more accurate to term
defendant’s promise to repair or replace defective parts as the remedy:
to be invoked if the mechanical performance warranties are breached.
This is apparently the view taken in UCC § 2-316 which distin-
guishes between excluding or modifying warranties and limiting
remedies for breach of warranty. See also UCC § 2-719. Both parties
agree that the repair or replacement of defective parts agreement is
a warranty; we need not discuss what important distinctions exist
between warranties and warranty remedies. See Lincoln Pulp &
Paper Co., Inc. v. Dravo Corp., 436 F. Supp. 262, 276-77 (D. Me.
1977); Ford Motor Co. v. Reid, 250 Ark. 176, 465 S. W. 2d 80
(1971); J. White & R. Summers, Uniform Commercial Code § 12-12
(1972).
11. Count I alleges that the machine failed to meet the page
twelve warranties. To find liability, however, the jury must also find
that the contract’s exclusive remedy or ¥ oye} the machine did not
or could not cure the defects and thus “failed of its essential purpose.”
UCC § 2-719. Count II alleges that Black Clawson breached its
warranty to repair or replace defective parts. To find a breach, of
‘course, the jury must find that the machine was defective in the
first place.
A8
Defendant Black Clawson does not seriously dispute the ex-
tensive record of the machine’s defects.'? Instead, it claims that
Count I is barred by the statute of iimitations and that Count IT
is barred because Standard Alliance failed to give proper notice
as required by UCC § 2-607(3) (a). We agree that these argu-
ments have merit.
A. The Statute of Limitations and Count I
Chronology is important to a precise understanding of the
issues. The machine was delivered and assembled at Standard
Alliance’s plant in the fall of 1967. The machine proved de-
fective, and Standard Alliance wrote Black Clawson on De-
cember 27, 1967, delineating exactly what was wrong with the
machine and requesting that Black Clawson fix it. Black Clawson
worked on the machine until June 21, 1968, when it abandoned
repair efforts. This suit was filed on May 29, 1969.
The original contract contained a one-year limitations pe-
riod; the minimum allowable under UCC § 2-725(1).1* UCC
12. Both sides kept logs of repair efforts from approximately
January to June of 1968 which detailed the machine’s deficiencies.
Standard Alliance, which had every reason to put the machine into
production, was never able to do so, even with defendant’s help. The
Wiener Group” also tried to get the machine to work right. An
outside consultant they called in concluded that the machine was
underdesigned. The “Wiener Group” concluded that the machine
could not be repaired, so they eventually scrapped it and replaced it
with a GFM machine. Numerous witnesses testified that the machine
was defective. Plaintiff's expert witness testified that the machine was
so poorly designed and constructed that it could not be repaired so
as to meet the page twelve warranties.
13. UCC § 2-725 provides:
(1) An action for breach of any contract for sale must be
commenced within four years after the cause of action has
accrued. By the original agreement, the parties may reduce the
ose ae limitation to not less than one year but may not
extend it.
(2) A cause of action accrues when the breach occurs,
regardless of the aggrieved party’s lack of knowledge of the
breach. A breach of warranty occurs when tender of delivery is
(Footnote continued on next page. )
A9
§ 2-725(1) also provides that the limitations period begins to
run when the cause of action accrues. UCC § 2-725(2)™
explains that a cause of action accrues when a breach occurs.
A breach of warranty is deemed to occur upon tender of de-
livery “except that where a warranty explicitly extends to future
performance of th: goods and discovery of the breach must
await the time of such performance the cause of action accrues
when the breach is or should have been discovered.” UCC
§ 2-725(2). Black Clawson argues that the machine was ten-
dered in the fall of 1967 and that, even granting that the war-
ranty extends to future performance, the cause of action under
Count I accrued no later than December 27, 1967, when
Standard Alliance wrote its letter claiming that the machine
was defective. Standard Alliance makes numerous arguments
in reply. Primarily, we must consider the question of when
breach occurred. This involves analysis of two separate issues;
when tender of delivery was made; whether the warranty ex-
tended to future performance. In addition, we must consider
various estoppel and policy arguments.
Standard Alliance first contends, with some support in the
record, that novel machines like the one here often have long
“shake-down” periods before they can be made to function
(Footnote continued from preceding page.)
made, except that where a warranty explicitly extends to future
performance of the goods and discovery of the breach must
await the time of such performance the cause of action accrues
when the breach is or should have been discovered.
(3) Where an action commenced within the time limited by
subsection (1) is so terminated as to leave available a remedy
by another action for the same breach such other action may be
commenced after the expiration of the time limited and within
six months after the termination of the first action unless the
termination resulted from voluntary discontinuance or from
dismissal for failure or neglect to prosecute.
(4) This section does not alter the law on tolling of the
statute of limitations nor does it avply to causes of action which
have accrued before this Act becomes effective.
14. See fn. 13.
Al10
properly. The import of its argument is that “tender” of a
defective machine should not be deemed to take place until the
machine is made to run properly. Since the machine in the
instant case did not function properly when initially installed in
October of 1967, Standard Alliance argues, tender of delivery
was never really made until June 21, 1968, when Black Clawson
halted its efforts to get the machine going. Thus, even assuming
that the warranty did not extend to future performance, the
earliest a breach could have occurred and a cause of action
accrued, on Standard Alliance’s theory was June 21, 1968.
This argument is plausible, but whithers upon proper
examination of the Uniform Commercial Code. UCC § 2-503
(1) defines “tender of delivery” as requiring “. . . that the seller
put and hold conforming goods at the buyer’s disposition. . . .”
Comment 1 to UCC § 2-503 explains that at times “tender”
means “due tender” meaning “. . . an offer coupled with a pres-
ent ability to fulfill all the conditions resting on the tendering
party [which must be] followed by actual performance if the
other party shows himself ready to proceed.” “At other times
[tender] is used to refer to an offer of goods or documents
under a contract as if in fulfillment of its conditions even
though there is a defect when measured against the contract
obligation.” Id. We think that “tender” as used in UCC § 2-
725(2) is the latter and not the former. A contrary interpre-
tation would extend the statute of limitations indefinitely into
the future since a defect at the time of delivery would prevent
proper “due tender” from taking place until it was corrected.
Under section 2-725, a cause of action accrues upon initial
installation of the product regardless whether it functions prop-
erly or not so long as the warranty does not extend to future
performance. See Val Decker Packing Co. v. Corn Products
Sales Co., 411 F. 2d 850 (6th Cir. 1969).
Secondly, Standard Alliance argues that the page twelve war-
ranties did extend to future performance under section 2-725
(2), and that the statute of limitations thus ran from the date
All
of discovery of the defect. It particularly points to the phrase,
“Black Clawson warrants that the subject machinery will per-
form the following mechanical functions.””* Plaintiff's argument
proves too much. Since all contracts contain future promises,
words of futurity such as “will” are common. When the contract
at issue here was signed, the machine was not yet built; the
word “will” was necessarily used. The proper question is wheth-
er the statute of limitations is meant to run from the day of
delivery or from the day when a defect is found sometime in
the future.
Most courts have been very harsh in determining whether a
warranty explicitly extends to future performance. Emphasizing
the word “explicitly,” they have ruled that there must be specific
reference to a future time in the warranty. As a result of this
harsh construction, most express warranties cannot meet the
test and no implied warranties can since, by their very nature,
they never “explicitly extend to future performance.” See Hold-
ridge v. Heyer-Schulte Corp. of Santa Barbara, 440 F. Supp.
1088 (N. D. N. Y. 1977) (representation of product’s condi-
tion at time of delivery); Raymond-Dravo-Langenfelder v. Mi-
crodot, Inc., 425 F. Supp. 614 (D. Del. 1976) (specifications
for pier construction); Binkley Co. v. Teledyne Mid-America
Corp., 333 F. Supp. 1183 (E. D. Mo. 1971), affd, 460 F. 2d
276 (8th Cir. 1972) (welder performance warranty did not
make reference to future time); Centennial Ins. Co. v. General
Electric Co., 74 Mich. App. 169, 253 N. W. 2d 696 (1977)
(one year warranty to repair or replace defective parts); Voth
v. Chrysler Motor Corp., 218 Kan. 644, 545 P. 2d 371 (1976)
(one year auto warranty to repair/replace defective parts) ;
Beckmire v. Ristokrat Clay Products Co., 36 Ill. App. 3d 411,
343 N. E. 2d 530 (1976) (implied warranty of merchantability
of brick facing) ; General Motors Corp. Vv. Tate, 257 Ark. 347,
516 S. E. 2d 602 (1974) (implied warranty of merchantability
15. This was also the reason why the district court below denied
summary judgment and J.N.O.V. on this issue.
Al2
of automobile) ; Wilson v. Massey-Ferguson, 21 Ill. App. 3d
867, 315 N. E. 2d 580 (1974) (implied warranty of merchant-
ability of tractor).
Two rare examples where express warranties were found to
explicitly extend to future performance are Rempe v. General
Electric Co., 28 Conn. Super. 160, 254 A. 2d 577 (1969)
(product was to “work properly for a lifetime”) and Mittasch v.
Seal Lock Burial Vault, Inc., 42 A. D. 2d 573, 344 N. Y.
S. 2d 101 (1973) (warranty that vault “will give satisfactory
service at all times’’).
It is clear that a buyer anda seller can freely negotiate
to extend liability into the future; that is why specific allowance
was made for warranties “explicitly” extending to future per-
formance, See Raymond-Dravo-Langenfelder v. Microdot, Inc.,
supra at 618; 2 Anderson on the Uniform Commercial Code,
Section 2-725:5, 24 (1970). In the absence of explicit agree-
ment, however, UCC § 725(2), reflecting the drafters’ intention
to establish a reasonable period of time, four years,’* beyond
which business persons need not worry about stale warranty
claims is applicable. This policy consideration underlying § 2-
725 makes it acceptable to bar implied warranty claims brought
more than a specified number of years after the sale; otherwise
merchants could be forever liable for breach of warranty on
any goods which they sold. See Beckmire v. Ristokrat Clay
Products Co., supra; General Motors Corp. v. Tate, supra;
Wilson Vv. Massey-Ferguson, supra. Similarly, an express war-
ranty which makes no reference at all to any future date should
not be allowed to extend past the limitations period. Thus, where
a manufacturer warrants that a welder will meet certain per-
formance warranties, but makes no mention of how long the
16. We are aware that some states have adopted a limitati
period greater than four ow e.g. Wis. Stat. § 402.725 (6 mk
Okla. Stat. tit. 12 A § 2-725 (S years). Ohio, however, follows the
— ee in establishing a four year period. Ohio Rev
e 98. The parties a i is
aan ation. pa gree that Ohio law governs this
Al3
warranties ‘are meant to last; the statute of limitations begins
to run at delivery. See Binkley Co. v. Teledyne Mid-America
Corp., supra. See also Holdridge v. Heyer-Shulte Corp. of
Santa Barbara, supra; Raymond-Dravo-Langenfelder v. Micro-
dot, Inc., supra.
Where, however, an express warranty is made which ex-
tends for a specific period of time, i.e. one year, the policy
reasons behind strict application of the limitations period do
not apply. If a seller expressly warrants a product for a specified
number of years, it is clear that, by this action alone, he is
explicitly warranting the future performance of the product or
goods for that period of time. As J. White & R. Summers Uni-
form Commercial Code 342 (1972), points out, if an auto-
mobile is warranted to last for twenty-four thousand miles or
four years, the warranty should extend to future performance.
If the car fails within the warranty period, the limitations period
should begin to run from the day the defect is or should have
been discovered.
In the case at bar, Black Clawson expressly warranted
the machine for a period of one year. Thus, we hold that the
warranties explicitly extended to future performance for a period
of one year. Therefore, under § 2-725(2) the cause of action
accrued when Standard Alliance discovered or should have dis-
covered that the machine was defective, so long as the defect
arose within the warranty period.”
17. Centennial Ins. Co. v. General Electric Co., supra, and Voth
v. Chrysler Motor Corp., supra, indicated that contractual provisions
to repair or replace defective parts for a period of one year were not
warranties extending into the future for one year, but remedies to be
invoked should something go wrong. We see no conceptual distinc-
tion between saying that a product is warranted for one year against
defects, the remedy limited to repair or replacement and saying that
should a breach be discovered within one year, the seller will repair
or replace defective parts. Both are warranties explicitly extending to
future performance. We recognize that there may be differences
between remedies and warranties, see fn. 10, but we do not believe
that these distinctions make a difference here.
Al4
Unfortunately, this holding does not assist the plaintiff.
Under the contractual limitations period, Standard Alliance had
one year from the date of discovery of defect to bring suit.
Standard Alliance reported the machine’s problems to Black
Clawson by letter on December 27, 1967. At least as of this
date, Standard Alliance had discovered the breach. Since suit
was not brought until over a year later, on May 29, 1969, this
action is barred by section 2-725(2)'*. See Gemeni Typo-
graphers v. Mergenthaler Lino Co., 48 A. D. 2d 637, 368
N. Y. S. 2d 210 (1975).
Plaintiff thirdly argues that Black Clawson should be estopped
from asserting the statute of limitations as defense because
it promised to repair the defects and spent over five months
attempting to do so. In effect, plaintiff contends that it reasonably
relied on the repair efforts, to its detriment. Decisions in other
jurisdictions are split. For cases where alleged reliance on a
seller’s repair efforts did not toll the statute of limitations, see
Binkley Co. v. Teledyne Mid-America Corp., supra (Missouri
law); Bobo v. Page Engineering Co., 285 F. Supp. 664 (W. D.
Pa. 1967), aff'd, 395 F. 2d 991 (3d Cir. 1968) (Pennsylvania
law); Zahler v. Star Steel Supply Co., 50 Mich. App. 386, 213
N. E. 2d 269 (1973). For cases where the statute was tolled,
see MidCity Finance Co. v. Coleman, 232 So. 2d 918 (La.
App. 1970); Mack v. Hugh W. Comstock Assoc., Inc., 225
Cal. App. 2d 583, 37 Cal. Rptr. 466 (1964); Aced v. Hobbs-
Sesack Plumbing Co., 55 Cal. 2d 573, 360 P. 2d 897, 12
Cal. Rptr. 257 (1961); Nowell v. Great Atlantic and Pacific
Tea Co., 250 N. C. 575, 108 S. E. 2d 889 (1959).
We must determine what the Ohio courts would do if con-
fronted with this issue.’* Although we have been unable to
18. This assumes that we agree with Standard Alliance
— pat ane pay a Assuming that the machine was oes
© point, then the failure to give notice of difficulti
would invalidate the claim. See Part wien ae
19. As noted in fn. 16, there i j :
this diversity case. is no dispute that Ohio law controls
Al5
find direct case authority, an examination of the statute is
illuminative. UCC § 2-725(4), as promulgated by the drafters
of the Uniform Commercial Code, states:
“This section does not alter the law on tolling of the
statute of limitations nor does it apply to causes of action
which have accrued before this Act becomes effective.”
(Emphasis added)
Ohio’s version of UCC § 2-725(4) is codified at Ohio Rev.
Code § 1302.98(D). That section provides:
“This section does not alter sections 2305.15 and
2305.16 of the [Ohio] Revised Code on tolling of the
statute of limitations nor does it apply to causes of action
which have accrued before this Act becomes effective.”
(Emphasis added )
Thus, when the Ohio legislature adopted the Uniform Com-
mercial Code, it substituted “sections 2305.15 and 2305.16 of
the [Ohio] Revised Code” for “the law” in the text of UCC
§ 2-725(4). This significant change in the UCC’s wording
requires that we limit our analysis to the two Ohio statutes cited.
An examination of these statutes reveals that the limitation
period is tolled if a defendant has removed himself from the
state, Ohio Rev. Code § 2305.15, or if a plaintiff had suffered
from some type of disability, Ohio Rev. Code § 2305.16.
Neither is applicable here.
It is, of course, quite possible that the Ohio courts would
apply the doctrine of equitable estoppel in a case where an
innocent purchaser has relied to his detriment on a seller's
promises to repair. “The principle that ‘. . . no man may take
advantage of his own wrong’ prevents a defendant whose actions
have induced a plaintiff to delay filing a suit until after the
running of the limitation period from asserting the statute of
limitations as a defense to the action.” Ott v. Midland—Ross
Corp., 523 F. 2d 1367, 1370 (6th Cir. 1975). See Markese v.
Ellis, 11 Ohio App. 2d 160, 229 N. E. 2d 70 (1967). Here,
however, we have two corporate behemoths, well able to look
Al6
out for themselves, and no evidence that one lulled the other
into not suing on time. See Bowman v. Oklahoma Natural Gas
Co., 385 P. 2d 440 (Okl. 1963).
Standard Alliance’s two remaining arguments, unsupported
by any authority, merit only brief mention. Standard Alliance
argues that this Court should toll the running of the limitations
period or otherwise find timely filing because the limitations
period was contractually reduced from four years to one year.
It would also find significant that approximately one-half the
one-year limitations period was spent in attempted repairs.
The one-year limitations period is specifically allowed by
UCC § 2-725(1). We see nothing unfair about this provision
in a negotiated contract between two parties of equal bargain-
ing power. Similarly, we find no prejudice to plaintiff resulted
from the lengthy repair time. Standard Alliance still had time
to file suit on the original breach of warranty claim even after
termination of the repair efforts; it also had a cause of action
under Count II for failure to fulfill the repair or replacement
warranty.”°
B. Notice and Count II
Standard Alliance’s claim against Black Clawson is not
ended by our decision on Count I. In Count II, Standard
Alliance alleges a cause of action for breach of the express
warranty to repair or replace defective parts. This cause of
action, which is virtually identical to Count I,*' was not barred
by the statute of limitations.** Thus, even if Standard Alliance
20. Our disposition of Count I on limitations grounds makes it
unnecessary to consider the interesting question whether notice of
breach had to be given a second time, after repairs failed. Since the
repair or replacement —— is also a remedy to be invoked if the
machine did not meet its ormance warranties, there is certainly
room to argue that UCC § 2-607(3) requires notice that the repair
or replacement remedy has failed “of its essential purpose” under
UCC § 2-719(2).
21. See fn. 11.
22. Black Clawson terminated its repair efforts on June 21,
1968; suit was filed within a vear’s time, on May 29, 1969.
Al7
sued too late on its claim that the machine was defective, it
did sue on time on its claim that Black Clawson failed to repair
the machine.
Black Clawson concedes that suit on Count II was timely
filed, but strongly argues that it had no knowledge that any-
thing was wrong with the machine after it quit work on it and
that plaintiff's failure to report the machine’s defects barred
the suit.
To recapitulate: The machine was installed in October of
1967, and plaintiff's employees attempted to make it operable.
A letter was sent to Black Clawson on December 27, 1967,
fully outlining the machine’s defects. Black Clawson responded
by sending a team of employees to try to fix the machine.
These employees were at Standard Alliance’s plant for over
five months. On June 21, 1968, Black Clawson’s repairmen
left Standard Alliance’s plant, never to return. Plaintiff claims
that this action, constituted knowing abandonment of the un-
repaired machine. Black Clawson claims that it thought that
the machine was satisfactorily repaired and that it knew nothing
about any further problems.
The controlling statute is UCC § 2-607(3)(a) which pro-
vides:
“The buyer must within a reasonable time after he dis-
covers or should have discovered any breach notify the
seller of breach or be barred from any remedy.”
Whether proper notice was given is a question of fact,
Eastern Air Lines v. McDonnell Douglas Corp., 532 F. 2d 957,
973 (Sth Cir. 1976); Lynx Inc. v. Ordinance Products, Inc.,
273 Md. 1, 327 A. 2d 502, 512 (1974); L. A. Green Seed
Co. of Arkansas v. Williams, 246 Ark. 463, 438 S. W. 2d 717,
720 (1969). See E. C. Ernst v. General Motors Corp., 537
F. 2d 105, 108 (Sth Cir. 1976) (applying contract notice pro-
vision); Pritchard v. Liggett & Myers Tobacco Co., 295 F. 2d
292, 298 (3d Cir. 1961) (applying Uniform Sales Act);
Als
Columbia Axle Co. v. America Automobile Ins. Co., 63 F. 2d
206, 208 (6th Cir. 1933) (applying Uniform Sales Act).
See also 2 Anderson on the Uniform Commercial Code § 2-
607:24 (1970).
Moreover, inasmuch as section 2-607 operates as a con-
dition precedent to any recovery, the burden of proof is on
the plaintiff to show that notice was given within a reasonable
time. Ehlers v. Chrysler Motor Corp., 226 N. W. 2d 157, 159
(S. D. 1975); Schnabl v. Ford Motor Co., 54 Wis. 2d 354,
198 N. W. 2d 161 (1972); L. A. Green Seed Co, of Arkansas
v. Williams, supra, 438 S. W. 2d at 719-20.
The district judge submitted the notice issue to the jury,
which found for the plaintiff. The question presented here is
whether the district judge erred when he refused to overrule
the jury’s decision and enter judgment N.O.V. for the de-
fendant.
The standard which defendant must meet is a stiff one.
To grant a directed verdict or J.N.O.V.,% the evidence
must be “such that there can be but one reasonable conclusion
as to the proper verdict.” Wolfel v. Sanborn, 555 F. 2d 583, 593
(6th Cir. 1977). Ohio’s standard is the same.** Ohio R. Civ.
Pro. 50(A). See O’Day v. Webb, 29 Ohio St. 2d 215, 280
N. E. 2d 896 (1972). If the evidence is clear, however, a
court can rule as a matter of law that a party failed to give
proper notice. Clow Corp. v. Metro Pipeline Co., Inc., 442
F. Supp. 583, 588-91 (N. D. Ga. 1977); Cotner v. Int'l
Harvester Co., 260 Ark. 885, 545 S. W. 2d 627 (1977).
23. The standards for the granting of a directed verdict and
judgment N.O.V. are the same. Oneil v. Kiledjian, 511 F.2d 511,
513 (6th Cir. 1975); Holt v. Continental Insurance Co., 325
F. Supp. 283 (E. D. Tenn.), aff'd, 440 F.2d 652 (6th Cir. 1971);
Ohio R. Civ. Pro. 50(A).
24. We are bound by state law as to the sufficiency of the
evidence. Chumbler v. McClure, 505 F.2d 489, 491 (6th Cir.
1974).
Ald
The notice requirement of Section 2-607 is explained by
Official Comment 4:
The time of notification is to be determined by applying
commercial standards to a merchant buyer. ‘A reasonable
time’ for notification from a retail consumer is to be judged
by different standards so that in his case it will be extended,
for the rule of requiring notification is designated to de-
feat commercial bad faith, not to deprive a good faith
consumer of his remedy.
The content of the notification need merely be sufficient
to let the seller know that the transaction is still trouble-
some and must be watched. There is no reason to require
that the notification which saves the buyer’s rights under
this section must include a clear statement of all the
objections that will be relied on by the buyer, as under the
section covering statements of defect upon rejection (Sec-
tion 2-605). Nor is there reason for requiring the notifica-
tion to be a claim for damages or of any threatened litiga-
tion or other resort to a remedy. The notification which
saves the buyer’s rights under this Article need only be
such as informs the seller that the transaction is claimed
to involve a breach, and thus opens the way for normal
settlement through negotiation.
Some courts and commentators have taken the liberal view
that almost any kind of notice of dissatisfaction is sufficient.
“Quite clearly the drafters [of the UCC] intended a loose test;
a scribbled note on a bit of toilet paper will do.” J. White & R.
Summers Uniform Commercial Code 347 (1972). See e.g.,
Lewis v. Mobil Oil Corp., 438 F. 2d 500, 509 (8th Cir.
1971); Metro Investment Corp. v. Portland Rd. Lumber Yard,
Inc., 263 Or. 76, 501 P. 2d 312 (1972). Other courts have
required more than minimal notice where both parties were
merchants engaged in on-going transactions. Eastern Air Lines,
Inc. v. McDonnell Douglas Corp., 532 F. 2d 957, 970-980
(1976); Kopper Glo Fuel, Inc. v. Island Lake Coal Co., 436
F, Supp. 91, 95-97 (E. D. Tenn. 1977). See Cotner v. Inter-
national Harvester Co., supra. See also Fischer v, Mead Johnson
Laboratories, 41 A. D. 2d 737, 341 N. Y. S. 2d 257 (1973).
A20
There is no dispute that Standard Alliance gave timely notice
that the machine was not in compliance with the performance
warranties and that Black Clawson then spent over five months
trying to fix the machine. The dispute concerns whether de-
fendant was properly notified that the repairs were inadequate.
Black Clawson’s argument can be conveniently subdivided
into two subparts. First, it contends that it understood the
machine to be operating properly on June 21, 1968, and that
it had no knowledge that the machine was defective after that
date. Second, it contends that it had no notice that Standard
Alliance considered it to be in breach of the warranty to repair
or replace defective parts.
The jury’s implicit finding® that Black Clawson had knowl-
edge that the machine was defective and improperly repaired is
supportable by the evidence. Black Clawson Vice-President
Romagano did testify that he thought that the machine was re-
paired on June 21, 1968, and that he had no idea anything was
wrong afterward. The jury, however, could have disbelieved
this testimony, relying on a June 24, 1968, memo written by
Mr. Romagano which reveals that the machine suffered re-
peated failures on both June 20, 1968, and June 21, 1968. In
addition, the jury could have credited letters written in June,
July and August of 1968 from Mr. Romagano to a Black Claw-
son subcontractor, Reliance Electric Co., complaining about
the failings of the machine’s electric drive, a critical component.
Finally, the jury could have believed expert testimony that the
machine was so poorly designed that it could not be made to
operate in synchronization nor be repaired to meet any of the
express warranties. If so, the jury could have reasonably in-
ferred that defendant was aware that its attempts to repair were
an utter failure. Thus, there exists evidence to support a jury
25. The district judge properly instructed the jury on the notice
issue. At the subsequent trial on damages, the same jury made the
explicit finding that the machine was irreparable.
A21
finding that Black Clawson had knowledge that it was in breach
of the repair or replace warranty.”
The critical issue is whether Black Clawson had notice that
it was considered to be in breach. Black Clawson emphatically
argues that there is no evidence at all that it received notice of
breach after it quit repair work on June 21, 1968, Standard
Alliance directs us to none, and our independent examination
of the record reveals none. Incredible as it may seem, Black
Clawson quit repair work on June 21, 1968 and was never told
anything was wrong until May 29, 1969, when suit was filed.”
26. The evidence is not one-sided, however. The record indicates
that the machine would operate, but was subject to breakdowns and
produced a poor product. Repair efforts at times achieved temporary
success or Offered the hope of success. For example, in a July 15,
1968 internal memorandum, Standard Alliance’s Harold Challman
indicated that with two weeks of certain indicated repairs, the
machine would be ready to make a production run. There thus exists
some basis for Black Clawson’s subjective belief that the machine
was in compliance with the page twelve warranties. Internal Black
Clawson memoranda, notably an October 3, 1968 memo from Vice-
President Romagano to President Landegger support this belief.
This confusion further underscores the need to give clear notice;
especially in a commercial setting where two companies have inter-
acted at different levels, from President to maintenance worker.
27. Black Clawson pressed this issue at trial. Standard Alliance’s
President Erwin Schulze admitted that no written notice was sent; he
did not know whether oral notice was given. Executive Vice-President
William G. Shaw, who at the time was head of Standard Alliance’s
forging division, knew of no communication between the parties
concerning the machine’s_defects after June 21, 1968. Roy W.
Clansky, a Standard Alliance Vice-Chairman of the Board intimately
involved in the machine’s purchase, testified that Black Clawson
never failed to respond when called. He did not recall ever getting
in touch with his counterpart at Black Clawson .to complain about the
machine after January 4, 1968. Russel E. Reum, Standard Alliance’s
purchasing agent, knew of no notice to Black Clawson indicating
dissatisfaction with repair efforts after January of 1968. Black
Clawson Executive Alfred Romagano testified that Black Clawson
never heard a complaint about the machine after June of 1968.
The evidence in the record concerning the circumstances of Black
Clawson’s termination of repair efforts on June 21, 1968, shows an
amicable parting after months of mutual cooperation. Contacts be-
tween the parties after June 21, 1968, were minimal and most had
nothing to do with the machine’s defects. Standard Alliance invited
(Footnote continued on next page.)
A22
Standard Alliance argues that it fully informed Black Claw-
son of the machine’s defects at the beginning and that Black
Clawson abandoned the machine knowing that it was defective
and unrepaired. Under these circumstances, the question pre-
sented is whether it was necessary to give additional notice of
the failure of repair efforts.
We think that notice should have been given. Section
2-607 expressly requires notice of “any” breach. Comment 4
says that notice “need only be such as informs the seller that the
transaction is claimed to involve a breach.” The express language
of the statute and the official comment mandate notice regard-
less whether either or both parties had actual knowledge of
breach. See Cotner v. International Harvester Co., supra.
We also note that this same result would take place under
§ 2-607’s predecessor, section 49 of the Uniform Sales Act.?*
Judge Learned Hand’s oft-quoted words applying section 49
are equally applicable here:
The plaintiff replies that the buyer is not required to give
notice of what the seller already knows, but this confuses
two quite different things. The notice ‘of the breach’ re-
quired is not of the facts, which the seller presumably
knows quite as well as, if not better than, the buyer, but
of buyer’s claim that they constitute a breach. The purpose
(Footnote continued from preceding page.)
Black Clawson to a trade association tour of its plant in September,
1968, and discussed settling “backcharge” claims for repairs. In
addition, two brief service calls were made. Although the record as
to the service calls and backcharge negotiations is sketchy, see fn. 7
and 34, there is no evidence that the issue of breach of warranty was
ever raised directly, and Standard Alliance does not argue that it was.
28. Section 49 provided:
In the absence of express or implied agreement of the parties,
acceptance of the goods by the buyer shall not discharge the
seller from liability in damages or other legal remedy for breach
of any promise or warranty in the contract to sell or the sale.
But, if, after acceptance of the goods, the buyer fails to give
notice to the seller of the breach of any promise or warranty
‘within a reasonable time after the buyer knows; or ought to
know of such breach, the seller shall not be liable therefor.
———
A23
of the notice is to advise the seller that he must meet a
claim for damages, as to which, rightly or wrongly, the law
requires that he shall have early warning.
American Mfg. Co. v. United States Shipping Board E. F. Corp.,
7 F. 2d 565, 566 (2d Cir. 1925), cited with approval in
Columbia Axle Co. v. American Automobile Ins. Co., 63 F. 2d
206 (6th Cir. 1933). See Eastern Air Lines v. McDonnell
Douglas Corp., 532 F. 2d 957, 971-972 (Sth Cir. 1976); Bloch
v. Eastern Mach. Screw Corp., 281 F. 777 (6th Cir. 1922);
Champion Animal Food Co. v. L. B. Reich Distributing Co.,
78 N. E. 2d 180 (Ohio App. 1947).
An examination of the policy reasons which underlie
2-607 further support our view. Notice of breach serves two dis-
tinct purposes. First, express notice opens the way for settlement
through negotiation between the parties. Comment Four, supra;
Eckstein v. Cummins, 41 Ohio App. 2d 1, 321 N. E. 2d 897,
901 (1974). Second, proper notice minimizes the possibility of
prejudice to the seller by giving him “ample opportunity to cure
the defect, inspect the goods, investigate the claim or do what-
ever may be necessary to properly defend himself or minimize
his damages while the facts are fresh in the minds of the parties.”
Note, Notice of Breach and the Uniform Commercial Code, 25
U. Fla. L. Rev. 520, 522 (1973). See Eastern Air Lines v.
McDonnel Douglas Corp., supra, at 972-73. Compare 3 Willis-
ton on Sales (4th Ed.) § 22-11 and J. White & R. Summers,
supra at 344 which identify three policy reasons behind the
notice requirement: 1) To enable the seller to make adjustments
or replacement or to suggest opportunities for cure; 2) To enable
the seller to prepare for negotiation or litigation; and 3) To
give the seller peace of mind from stale claims. See Steel &
Wire Corp. v. Thyssen, Inc., 20 U. C. C. Rep. 892 (E. D. Mich.
1976). See also Mattos, Inc. v. Hash, 279 Md. 371, 368 A. 2d
993, 996 (1977) (protection against stale claims is the purpose
of the statute of limitations, not the purpose of section
2-607 (3)).
A24
We do not know whether this lengthy, acrimonious lawsuit
could have been settled beforehand. We do know that Standard
Alliance’s failure to give notice precluded the possibility of
compromise.
More important, the record contains evidence suggesting the
kind of prejudice which 2-607’s notice requirement seeks to
avoid. After Standard Alliance sold its Forgings Division to
“the Wiener Group” on September 30, 1968, Wiener attempted
to put the machine into operation, When that failed, the ma-
chine lay dormant. On May 28, 1969, the day before suit was
filed, Standard Alliance, in cooperation with Wiener, started the
machine and filmed its malfunctions. On July 14, 1969,a scant
six weeks after suit was filed. Wiener began to dismantle the
machine. Although Black Clawson was informed of the ma-
chine’s sale,*® it never inspected the machine after terminating
repair efforts on June 21, 1968, nor was it aware that the ma-
chine was to be destroyed.
Standard Alliance contends that the destruction of the ma-
chine by a third party was proper and the Black Clawson was
remiss in not seeking to inspect the machine during the six-
week period after suit was filed, but before the machine was
destroyed. This ignores the realities of the litigation process. Six
weeks is an insignificant period of time in a case such as this
which has dragged on for over nine years. In addition, it was
pure chance that the machine was destroyed when it was;
Wiener could have taken the machine apart whenever it wanted.
Had Black Clawson gotten even minimal notice that it was
being held in breach, it might very well have sought inspection
and perhaps even made its own film of the machine.
Measuring the impact of potential prejudice here is, of course,
difficult since Black Clawson was unable to have its own experts
examine the machine. Standard Alliance emphasizes that Black
29. Black Clawson claimed in its brief that it did not know of
the sale to “the Wiener Group.” The record is clear to the contrary
and Black Clawson conceded the point in its reply brief.
A25
Clawson designed and built the machine ane worked on it for
over five months. As the machine’s creator, it arguably did not
need to inspect it. Also, the evidence that the machine was de-
fective was overwhelming. On the other hand, preparing for
litigation is a sui generis task. Black Clawson may have been
able to put on a spirited defense, especially as to damages, had
it gotten early notice and followed up by inspecting the machine. —
Whatever the degree of prejudice to Black Clawson, UCC
§ 2-607’s notice requirement is designed to forestall the very
difficulties which developed here. While we see no justification
for the strong language in defendant’s brief charging a con-
spiracy to hide the facts and destroy the machine, we think that
this case demonstrates the wisdom of section 2-607’s require-
ment of prompt notice.
Black Clawson also raises independent objections to the film
and the circumstances of the machine’s destruction, arguing that
it should have had specific advance notice of both the film’s
production and of the machine’s demolition. We need not decide
these issues. We do note, however, that this Court has never
sanctioned the sporting theory of justice. Adherents of the theory
among the bar are reminded that a law suit is a serious matter;
there is no room for games of hide and seek. Neither the federal
rules nor statutory law can anticipate every twist and turn which
can take place in litigation. “Legal” moves by ingenious litigants
will not be countenanced where injustice would result.
These events further demonstrate the merit in those
cases which hold merchants to higher standards of good faith
than consumers. See Eastern Air Lines v. McDonnell Douglas
Corp., supra, at 977; Kopper Glo Fuel, Inc. v. Island Lake Coal
Co., supra at 96. Black Clawson and Standard Alliance worked
together at all times. Black Clawson responded promptly when
informed that the machine was not working properly; commer-
cial good faith mandated that it be told that repair efforts had
failed-and that it was being held in breach. A new car buyer can
be excused for failing, in ignorance and exasperation, to notify a
A26
car dealer of an obvious breach after persistent repair efforts
have ended in failure. A merchant like Standard Alliance cannot
be so excused, it should have met section 2-607’s non-rigorous
notice requirements.
Standard Alliance points to two cases, Ernst v. General Motors
Corp., 482 F.2d 1047 (5th Cir. 1973), appeal following
remand, 537 F.2d 105 (Sth Cir. 1976), and Metro Invest.
Corp. Vv. Portland Rd. Lumber Yard, Inc., 263 Or. 76, 501 P. 2d
312 (1972), for the proposition that proper notice, once given,
is sufficient for all related breaches. Standard Alliance’s position
is that since it concededly gave proper notice that the machine
was defective on December 27, 1967, it did not have to give
notice later on that repair efforts to cure the defects had failed.
We reject this argument. In Ernst, supra, the court merely
concluded that a letter complaining of delays in the start-up of
a construction project could be reasonably construed to encom-
pass problems caused by severe winter working conditions which
would not have occurred but for the delay. Also, the court did
not think that once initial complaint about delay was made, that
additional notice of delay had to be given on a regular basis. In
Metro Invest. Corp., supra, the buyer gave prompt notice of a
defect. The parties met and agreed to wait and see if the defect
improved. The Oregon Supreme Court found that the initial
notice was sufficient, even though no complaint was made for
two years thereafter.
In the instant case, the two warranties are distinct and notice
serves different functions foi each. When the machine was found
to be in breach of the page twelve performance warranties,
notice was necessary so that Black Clawson could come in and
try to fix the machine. When repair efforts failed, and Black
Clawson was allegedly in breach of its warranty to repair or
replace defective parts, notice would alert Black Clawson that
Standard Alliance thought that repairs were defective and that
perhaps litigation was contemplated. At this point, the parties
could have discussed settlement, and Black Clawson could have
A27
sought evidentiary support for its position that the machine was
indeed repaired. Black Clawson was alerted that the machine
was defective, but not alerted that its repair efforts were defec-
tive. We cannot allow notice of one breach to be carried over to
create notice of a subsequent related, but distinct, breach.
We realize that our holding bars what is apparently a meri-
torious claim. Standard Alliance’s inexplicable failure to give any
notice whatsoever that Black Clawson was in breach of its
repair/replace warranty is fatal; underlying standards of com-
mercial good faith, codified in UCC § 2-607, mandate this
result.
Our ruling makes it unnecessary to consider the numerous
other issues raised concerning the liability or the damages trial.
II. Prejudicial Contact with the Jury
Although unnecessary to our decision, an additional issue
warrants mention. As indicated, trial on liability was sepa-
rated from trial on damages; the same jury, however, was to
hear both. The jury returned its verdict on liability on September
12, 1975. Black Clawson contends that immediately after the
liability verdict, Standard Alliance’s counsel improperly ap-
proached two jurors as they were approaching an elevator in
the Federal Courthouse and thanked them for their verdict.*°
Black Clawson claimed improper contact and promptly filed a
motion for mistrial, with accompanying affidavits as to what had
transpired. Instead of summoning the attorneys and interrogat-
ing the jurors on the record or otherwise proceeding to openly
test the validity of the motion, the district court, without notice
to either party, sent his law clerk to interview the jurors about
the alleged incident. The court concluded, on the basis of this
30. It does not appear from the record that the district judge
issued a cautionary instruction to the jury that it not discuss the case
with anyone after it rendered its verdict as to liability. Since the same
jury was to later hear evidence as to damages, such an instruction
would have been in order.
A28
ex parte communication, that any jury contact which had taken
place had been trivial.”
The court might very well have been correct, but the
manner in which it made the determination was improper. The
correct response of a trial judge, when confronted with allega-
tions of improper jury contact, is to give notice to the parties
and to question the jurors on the record about any alleged
incident.*? See Petrycki v. Youngstown & Northern Ry. Co., 531
F. 2d 1363 (6th Cir.), cert. denied, 429 U. S. 860 (97 S. Ct.
161, 50 L. Ed. 2d 138 (1976); United States v. Gay, 522 F. 2d
429 (6th Cir. 1975). See also United States v. Florea, 541 F. 2d
568, 572-73 (6th Cir. 1976), cert. denied, 430 U.S. 945, 97
S. Ct. 1579, 51 L. Ed. 2d 792 (1977).
Ex parte contact between judge and jury raises a pre-
sumption of reversible error. Petrycki v. Youngstown &
Northern Ry. Co., supra, at 1367; United States v. Gay, supra,
at 435. In United States v. United States Gypsum Co., .........
pi Macs os edi , 98 S. Ct. 2864, 57 L. Ed. 2d 854 (1978),
the Supreme Court warned of the dangers of ex parte contact
between a judge and any member of the jury. The court found
reversible error when a meeting between the trial judge and a
foreman, which had been consented to by the parties, was
allowed to drift into what “amounted to a supplemental instruc-
tion to the foreman relating to the jury’s obligation to return a
verdict .. .” at , 98 S. Ct. at 2886. See also Rogers
31. This incident was the subject of a mandamus petition to this
Court, which was dismissed as moot after the damages trial com-
menced.
32. Black Clawson’s affidavits —— a mage _ of
impropriety, sufficient to require a formal inquiry. Cf. Mattox v.
United States, 146 U.S. 140, 13 S. Ct. 50, 36 L. Ed. 917 (1892).
The district judge apparently agreed, because he sent his law clerk
to ask the jurors what had transpired. Under these circumstances, we
need not decide what allegations of improper jury contact are
required before an inquiry must be made or when failure to make
an inquiry is reversible error. See South-East Coal Co. v. Consoli-
dation Coal Co., 434 F.2d 767, 791-92 (6th Cir. 1970), cert.
denied, 402 U.S. 983, 91 S. Ct. 1662, 29 L. Ed. 149 (1971).
eon
Ln ee SO
A29
Vv. United States, 422 U.S. 35, 95 S. Ct. 2091, 45 L. Ed. 2d 1
(1975); Fillippon v. Albion Vein States Co., 250 U.S. 76, 39
S. Ct. 435, 63 L. Ed. 853 (1919). Here, the length and nature
of the law clerk’s contact with the jury is unknown. No record
was kept, no notice was given to the parties. Under these cir-
cumstances, the presumption of prejudicial error cannot be
rebutted. This alone would have required reversal, at least of
the damages verdict rendered by the same jury after the incident
took place.*
III. The Bench Trial
At a separate bench trial, the district court ruled on two
matters which were peripheral to the main suit. The first issue
concerned “back charges.” Selling Condition No. 15 of the
contract provided:
In no event shall any installation, erection, modification, or
corrective work be done by the buyer for the account of the
seller until after full particulars (including an estimate of
material cost, amount, and rate of labor required) have
been submitted in writing to and approved in writing by
the seller. Returned items will not be accepted unless seller
has previously agreed to such return in writing and supplied
written shipping instructions.
Plaintiff, in Count IV of its complaint, claimed that it incurred a
total of $55,247.84 in these charges. The district judge found
that plaintiff had not complied with the contract’s Selling Con-
dition, supra, and allowed only $807.09 of this amount.
We think that the evidence fairly reveals that the parties made
an express oral modification of Selling Condition No. 15, which
operated as a waiver of Black Clawson’s rights under this section
of the contract. Although, under Ohio law, courts must look
carefully at oral modifications of a written contract, White Co.
33. There is no need to discuss Black Clawson’s claim that this
error would require a new trial on the iiability issue as well. See
Gasoline Products Co. v. Champlin Refining Co., 283 U.S. 494, 51
S. Ct. 513, 75 L. Ed. 1188 (1931).
‘A30
v.. Canton Transportation Co., 131 Ohio St. 190, 2 N. E. 2d
501, 505 (1936), if the evidence is clear, a waiver can be found.
See Ohio Farmers Ins. Co. v. Cochran, 104 Ohio St. 427, 135
N. E. 537 (1922). Harold G. Challman, plaintiff's “man in
charge,” testified without contradiction that he and Black Claw-
son employee James Gardner had agreed that Standard Alliance
would keep a running total of expenses incurred while the
machine was being worked on. Two internal memoranda
authored by Black Clawson executive A. P. Romagano support
this testimony.** Standard Alliance and Black Clawson worked
together for over five months trying to get the machine to
perform properly. In light of their almost daily interaction, it
made good sense for Standard Alliance to keep a running tab on
the back charges instead of continually going to Black Clawson
for written approval. This type of good faith conduct by the
parties should be encouraged, not discouraged.*°
34. Mr. Romagano’s memorandum of August 22, 1968 states
that “Standard [Alliance] is going to present us with what I suspect
is a very sizable bill for back charges.” Yet, instead of indicating
that the bill was unenforceable, he requested information from
another company official for bargaining purposes. In an October 3,
1968, memorandum, Mr. Romagano notes that Mr. Challman (of
Standard Alliance) had called him and indicated that back charges
would be between $55,000.00 and $60,000.00. Instead of disclaim-
ing liability, Mr. Romagano said that he thought that the charges
could be settled for between $20,000.00 and $25,000.00.
35. Mutual modification of a contract may also implicate the
hoary preexisting duty rule which invalidates a contractual modifica-
tion made without consideration. See Hariott v. Marine, 96 Ohio
App. 174, 121 N. E. 2d 305 (1953). The rule has been properly
criticized as an artificial obstacle to good faith contract changes, see
Note, The Preexisting Duty Rule of Foakes v. Beer—a Victory by
Default for Stare Decisis, 11 Ariz. L. Rev. 344 (1969), and has been
discarded by the authors of the Uniform Commercial Code, see UCC
§ 2-209. In this case, assuming that the rule applies, we find valid
consideration, because Standard Alliance, by agreeing to keep a run-
ning tab, was precluded from immediately collecting back charges.
This forced forebearance benefitted Black Clawson, as illustrated by
the fact that it was not until October of 1968 that it was even in-
formed of the charges. See Boymer v. Birmelin, 227 So. 2d 358, 362
(Fla. App. 1969); 1 Williston on Contracts § 135 (3rd Ed. 1957).
Cf. DeCicco v. Schweitzer, 221 N. Y. 431, 117 N. E. 807 (1917).
iat
tre Se
A31
Although the district judge, in his findings of fact be-
low, questioned the amount of the charges, we see no need to
remand, Standard Alliance’s unchallenged ledger entries, kept
pursuant to the oral argreement between the parties, are fully
adequate to support its claim.
The second issue decided at the bench trial, dealt with
defendant’s counterclaim. In early 1968, Standard Alliance de-
termined to purchase a spare ram and piston assembly for the
machine. Black Clawson agreed to sell the spare ram to Stand-
ard Alliance for $25,950,000. It is uncontroverted that although
delivered late, the ram was accepted but never paid for. The
district court found no evidence that the ram was unsatisfactory
or what it failed to meet specifications.** Accordingly, we have
no trouble affirming the district judge’s entry of judgment for
Black Clawson on its counterclaim.
In conclusion, we reverse the judgment entered pursuant to
the jury’s verdict on the issue of liability for breach of warranty.
We also reverse the judgment entered by the district court on
Count IV of the complaint and remand with directions to enter
judgment for Standard Alliance for $55,247.84. Finally, we
affirm the judgment entered for Black Clawson on its counter-
claim.
Each party is to bear its own costs.
36. Standard Alliance argues that the parties agreed that if the
ram on the machine failed within one year, there would be no charge
for the replacement ram. This directiy contradicts the purchase order
which provided for 50 percent payment within 90 days, with the
balance due in one year. The district court’s resolution of this
evidentiary clash in favor of Black Clawson was not clearly erro-
neous. Rule 52, F. R. Civ. Pro.
A32
APPENDIX B.
No. 76-2006
No. 76-2007
UNITED STATES COURT OF APPEALS
For the Sixth Circuit
STANDARD ALLIANCE )
INDUSTRIES, INC.,
Plaintiff-A ppellee-Cross-A ppellant,
vs.
THE BLACK CLAWSON COMPANY,
Defendant-A ppellant-Cross-A ppellee. }
ORDER
Before: PHILLIPS, Chief Judge, KEITH and MERRITT, Circuit
Juc ges.
Counsel for Standard Alliance has filed a Petition for Re-
hearing with Suggestion for Rehearing en banc. No judge of this
Circuit having voted for en banc consideration, the Petition has
been referred to the hearing panel. Also before us is a Petition
for Rehearing filed by Black Clawson.
We believe that the issues raised in both petitions were ade-
quately dealt with in our opinion. Nor are we inclined to disturb
our determination that each party bear its own costs. Further,
we see no need to change the wording of this court’s judgment.
The petitions are in all respects denied.
Entered by Order of the Court
/s/ John Hehman
Clerk
November 30, 1978
A33
APPENDIX C.
Excerpts from Joint Appendix.
Q. I believe I was asking, Mr. Challman, about the syn-
chronization of this machine and then you were explaining and
I didn’t mean to interrupt you. Could you tell me, sir, was there
a problem with the synchronization of this machine? First of all,
was there a problem relative to keeping the peels and rams in
synchronization? A. Yes, that is what I have been explaining.
The peels, when they are under load, could not synchronize and
turn 90 degrees between every impact to the ram.
Q. Was that a constant problem? A. That was a con-
stant problem and sometimes it would revolve enough so that
it would eventually turn into a round, but as I have said, we
kept reducing the speed of the rams, but the machine could
have been and was set up to operate at twice that speed.
(P. 403a)
Q. Mr. Challman, you indicated that the Black Clawson
engineer gave you permission to do this or made this program.
Could you tell us, sir, who that person was? A. He was
the one that instigated it, that was Jim Gardner.
Q. He was an employee of the Black Clawson Company?
A. He was employed by Black Clawson. °
Q. Tell me, sir, during this period of time, the latter part of
’67 and beginning of 1968 and during this period, was he on the
job at Standard Forging Company in East Chicago? A. Peri-
odically he was on the job at East Chicago.
Q. _ And could you tell us, sir, what some of the things were
that he was doing or attempting to do in relation to this machine,
particularly in early 1968? A. Well, we had various prob-
A34
lems, as I have mentioned, with the peels. And the rotation of
the peels when under load would never rotate 90 degrees be-
tween impacts.
And to do proper forging this is the way that that machine
was supposed to operate.
And in talking about this to Jim Gardner, he gave me one
explanation of why it would not do this, that the peel was so
large and there was so much massive weight out away from the
center line, that it was too much weight plus the weight of the
billet to have the peel rotate and pick up enough speed to
rotate 90 degrees between every impact of the hammer or of the
press dies.
And I could see it was the same thing when the dies came
together to stop the peel, that the peel would keep turning be-
cause of this excess weight, and this created a twist in the outer
surface of the steel, which was very, very pronounced.
(pp. 690a-691a)
Q. Were the peels ever able to go 62 and a half per minute?
A. But not under load, but they did turn that speed when they
were running idle—not running idle—but when they had no
load in the peels, they were able to rotate at that speed when
they were just running by themselves.
(p. 695a)
Q. Now, sir, I will ask you, sir, if you would describe just
briefly what some of the problems were during this period com-
mencing on March 20th, 1968 up through and including May
the 10th, 1968? A. Well, it’s similar to problems, to what we
had earlier, and that is we still could not get the peel to rotate
properly with a billet in it. And there was various problems that
cropped up at different times. And there was—as mentioned
here on the 28th, we had problems with the rotation of the peel
stopping at right angles, which I have already talked about
earlier. And—
A35
(pp.706a-707a)
Q. Now, I want to direct your attention to the conclusion
of Mr. Gardner’s report, and it certainly could be wished that he
would write a little better than he does, but down at the con-
clusion, would you please direct your attention to that part of
the report where he talks about the program appearing satis-
factory and the decision being made to heat up the furnace and
run axles on July 10. Do you see that? A. Yes.
Q. Now, Mr. Gardner says, Mr. Challman, here that a total
of eight billets were run and all appeared to be straight and
reasonably to size. A. That is the part that I take exception
to. I did not get this memorandum, and I am not agreeing with
that statement. We still had a swing or a bent axle, and we still
had vibration in the machine, which was also causing this con-
dition.
Q. Did you make a report on July the 10th or July the 11th
to indicate that Mr. Gardner is not stating the fact that would
help us? A. Ido not recall, because I do not remember ever
seeing this memorandum when we were in production, or trying
to make axles.
Q. How about the rest of Mr. Gardner’s statements after
that, “No bending could be directed during the pre-form or
body finish passes and shock on the peels appears less than
normal. The ends were cut off and the eight axles were centered
and checked in a iathe for runout. Two of the eight had some
runout, but it was suspected that these were bent during un-
loading.” That would leave six apparently that weren’t bent.
Do you recall checking them in the lathe and doing all that?
A. No, I do not. And two would not be bent by handling
after they had been—when they were brought over to the other
side.
Q. If Mr. Gardner had given you this report at the time you
would have said, “That’s not the way it was, Jimmy, that’s not
true”; is that right? A. That is correct.
A36
(pp. 726a-728a)
Q. And, your Honor, I will ask that that memorandum be
given again to Mr. Romagano which is No. 3832.
(Exhibit handed to the witness. )
Directing your attention, sir, to the last paragraph of that
memorandum of 9/18/68 from you, Mr. Romagano, to Mr.
Gardner, I direct your attention to the last paragraph in which
it is stated: “Should a question arise relative to peel modifica-
tions, respond that Romagano had nothing to say about this
and Gardner had not discussed it specifically with Romagano.”
Do you remember writing that, sir? A. Yes.
(p. 1229a)
Q. Sir, you were talking about Mr. Gardner. You indicated
that you never went back to the plant after June 21; is that
correct, sir, of 1968? A. That's right.
Q. Mr. Gardner went back, didn’t he? A. Yes.
Q. He went back in July, August and September? A. Ap-
proximately July and August. Perhaps September. I am not
sure.
b
Q. And, sir, aside from the call report that was shown to
the jury dated July 13 or 14, you don’t have any memorandum,
do you, of Mr. Gardner’s trips in either July, August or Septem-
ber to the Standard Forgings Company of 1968? A. I think
we have some July reports, have we not?
Q. That was the one that was a flimsy or a transparency
that was shown to the jury of July, I believe, 8 to 11. I am
asking you, sir, aside from that one were there any others?
A. I believe there is a November report.
Q. November 1. My question, sir, was directed to July,
August and September. A. Other than that one in July and
November, we have seen no others. Mr. Gardner was in the
plant assisting on programming in that period which he had
reported,
A37
(p. 1235a)
8:50 P.M.
September 12, 1975.
(Chamber conference. )
The Court: We have received this question from the jury:
“We would like the notification that prompted the visit by Jim
Gardner of Black Clawson to Standard Forgings that is de-
scribed in Exhibit 3720.” We have brought in Exhibit 3720.
(p. 1705a)
A38
HAMILTON DIVISION
Date: 3/27/67
M. McCarthy, R. Muck,
J. Gardner, C. Mulcahey
Industrial Products Sales File
From: A. P. Romagano
Standard Forge File Ref. C-164-67
The following will summarize the points covered and actions
to be taken resulting from our session held this morning on the
open items to be completed for the Standard Forge job:
1. Hydraulic System
a. Hydraulic vendor to be in Wednesday to check pump
and piping to determine what has to be done relative
to the pump.
b. Hydraulic system to be checked out and made operative
by the shop with coordination through Gardner.
c. It appears that the one pump on the hydraulic system
will have to be replaced.
2. Skirts for ram
a. Engineering must design skirts to cover the rams at the
center forging section of the press. This skirting arrange-
ment must be such as to protect the oil from the fall of
slag and water. Some manner must be determined to seal
ail possible any water getting into the ways, etc. so as
to not foul the lubrication system.
3. Revise lubrication system
a. We are to design and construct complete revision to the
lube system consisting of two tanks and pumps. One is
to be at either end of the press serving the entire lubri-
ain ene
4. Oil
A39
cation of that half of the press. The pumps are 400 psi
duty at 5.7 gallons per minute. The system requires a
heat exchanger to handle a requirement of an 80 degree
temperature drop at 6 gallons per minute. If at all pos-
sible a standard heat exchanger should be used so that
we can expedite the completion of this system.
a. Shop to pump out oil and return to vendor for the
Cc.
inclusion of additives to make the oil suitable for 150
degree operation. That is the viscosity characteristics will
not be changed at this temperature.
Check with the oil vendor to determine a standard brand
of oil commercially available which will have essentially
the same physical and operational characteristics as the
present oil being used. [Ex. 2411]
Check the flash point of the present oil.
5. Tape System
c.
It has now been determined that it is an absolute require-
ment that the peels be synchronized in their rotation.
Accordingly it is necessary to order these changes to the
peel.
Engineering to check the tape response with black tape
to determine whether or not the tape system is operative
or is there a potential problem.
Engineering to coordinate with the shop to check out
the tapes on the operation and rotation of the turrets.
6. Lubrication system drawings
a. Have Fletcher get into the shop and draw up schematics
of a lubrication system. Rather than copying exactly
what we have, we should clean up some of the manifolds
and other hodge podge of make shift piping arrange-
ments,
A40 A41
b. It has been decided that we will re-pipe this job prior to | , :
shipment in order to clean up the system. HAMILTON DIVISION
bet ss Date: 4/21/67
a. At the request of Challman of Standard Forge we will “
order bigger pumps in order to speed up the operation of M. F. McCarthy, R. E. Muck,
the peel jaws. This is to be a charge to Standard Forge. C. W. Mulcahey,
Gardner is to look up a price and give this information J. Gardner
to Dawson of the Sales Department. Sales should then R. K. Dawson
get off a formal quotation and letter to Mr. Challman Standard Forge
so that this matter can be cleared up. From: A. P. Romagano
8. Load Test File Ref. D-188-67
a. Shop will continue to test the rubber bumpers under the The following summarizes the various points covered and
static press roll. Hydraulic press to determine whether or actions to be taken resulting from our review of current job
not the rubber bumpers will adequately handle the test status held the evening of April 20.
involved on the forging press.
There is a possibility that the rubber will heat up and
create a problem. It is for this reason that the synthetic
1. Tape control system
The following items are remaining problem areas to be
Fabrecka substitute. Vendor advised us that the material COEREE OH Sy Ole Dates: eepoteentetive:
suggested by Mr. Challman will not work under the (a) Shut height
proposed service required for testing the press, (b) Swing arm solenoid problem
[Ex. 2412] (c) Die turre-—SCR to be replaced—Affects reversal of
one turret.
(d) Determine status of the peel rotation synchronization.
This work requires new engineering and component
parts from Datex. This whole subject was discussed
with Reliance some weeks ago.
(e) Correct counter on peel longitudinal movement along
the track (Gardner to supply information).
(f) Conduct a final total check on all the tape systems to
be assured that everything is functioning properly be-
fore the Datex representative leaves.
(g) Check the swing arm circuit on the No. 1 arm. Be
assured that this is functional since there was a prob-
2.
3.
4.
A42.
lem on the circuit for swing arm No. 2. This should be
able to be done without a complete installation of the
No. 1 arm.
(h) Determine the peel stock position relative to the square
billet and swing arm jaws to the peel jaws (Check
with Gardner).
Reliance System
(a) Reliance to make a final adjustment and synchroniza-
tion at 250 strokes per minute.
Lubrication
(a) Bill Hill to supply information relative to fire retardant
oil.
(b) Mr. Challman to be supplied with specifications on
fire retardant oil.
Mechanical
(a) Modify rings on peel No. 1 main cylinder. This cove-
the drilling of the rings to improve rotation of pezi.
Check with engineering to determine how far we go
with the drilling. If no definite conclusion and de-
cision forthcoming from engineering advise McCarthy.
McCarthy will then call in Shartie hydraulic engi-
neers if necessary.
[Ex. 2462]
A43
STANDARD FORGINGS
80 East Jackson Boulevard, Chicago, Illinois (Illegible)
(Illegible)
December 27, 1967
Mr. Ray Dawson
Black-Clawson Company
2nd & Vine Streets
Hamilton, Ohio 45011
Dear Mr. Dawson:
On December 21, 1967, a meeting was held with your Mr.
Gardner and Mr. Mulcahy to discuss some of the problems we
continue to have with the Axle Forging Press. Representing
Standard Forgings were Messrs. Oaklund, Challman, Bryzgalski,
Gruca, Langer, and the writer.
The points covered at this meeting were:
1. The ram cylinder controls are not reliable. We only have
a reading on the No. 1 ram and must assume that No. 2
will be identical which is not necessarily true. There
should be a read-out for each individual ram.
2. The press has not been run at full potential of 250 cpm.
This should be done on a continuous basis for at least
8 hours.
3. We are experiencing a considerable amount of mis-
synchronization of machine functions which are directly
attributable to the electrical system.
4. Present manner of presenting forging stock to No. | Peel
lacks enough accuracy for true line-up with press forging
dies.
5. Swing arms should also have positive anchoring to over-
come misalignment of stock. Positive stops should be
provided for opening and positioning of swing arms.
[Ex. 3069]
A44
6. The clamping action of the peel is much too slow. Peel
rotating pressure is too extreme and should be reduced
to eliminate twisting of stock.
7. Press frame should be re-inforced for more rigidity, both
in the structure and at the foundation.
8. Peel rails should be more positively secured to the press
frame. At present, there is not sufficient provision for
anchoring.
9. Extreme vibration has resulted in loosening of practically
all fasteners in the equipment. Shakeproof or nylon in-
sert type fasteners should be considered.
10. Repair of the leak in the ram by a plugging method is
questionable. What provision will be made for replace-
ment?
We wish to point out our comments are observations and we
would certainly be inclined to think your engineers that have
been in attendance here to see the machine operated, have also
noted areas of design and detail requiring modification and re-
work.
Naturally, with the considerable amount of time having
elapsed since the inception of our purchase order, we are
gravely concerned about placing the equipment into profitable
production on a continuing schedule.
In view of all the problems we are experiencing we feel a
meeting of company representatives is definitely in order and
request this be held on January 4, 1968 at our plant. Mr.
Romangano should be in attendance as he was present at a
similar meeting with our company president’s, Mr. Clansky
and Mr. Landegger. The importance of the meeting is of mutual
benefit to accomplish the operation of the press as intended.
May we hear from you promptly verifying the meeting date?
Yours very truly,
Russell E. Reum
General Purchasing Agent
[Ex. 3070]
A45
STANDARD FORGINGS
A Division of Standard Alliance Industries, Inc.
Indiana Harbor, Ind.
May 1, 1968
In Reply Please Refer to
To: Mr. R. Oaklund
Subject: Axle Forming Machine
—Page 2—
Friday
April 26, 1968
Finished installing the booster on No. 2 peel. Installed the
positive stops on No. 2 swing arm, Decided to forge axles and
fired up furnace at 10:00 A.M. Four pieces of stock placed in
furnace. There was no time to add stops to die turrets and we
could operate without them by manually placing the dies in their
starting position. Tried the first piece in late afternoon and the
press went out of synchronization when forging the body. Tried
the next piece with the furnace temperature at 2400°F. When
forgoing the first journal, it would not revolve fast enough and
this journal was not properly formed. After the trial it was de-
cided to change the type and rotate faster. Finished new tape
about 1:00 A.M.
Saturday
April 27, 1968
Held furnace at about 1800°, so an axle could be tried early
in the morning. Tried the new tape on several dry runs. Made
one axle up to the body forging operation, when an overload
of 200% occurred per Reliance man, and the press again went
out of synchronization. We made a new tape No. 108, which
has more reduction in the preforming operation on the body
of the axle. Tried the tape about 6:15 P.M. and then the un-
A46
loading swing arm was not acting properly. On the next dry
run, the No. 1 peel did not stop when the probe was hit and
this bent the probe rod suppert. This all showed the Datex
was erratic. Shut down furnace at 7:15 P.M. Per Reliance serv-
ice man, he stated the numerical control units had to be kept
warm. The door was closed and after some time had elapsed,
we again made several dry runs with a log and it seemed to work
properly. Started furnace at 10:30 P.M. with eight pieces in the
furnace. Tried to forge first piece at 1:20 A.M. and on the pre-
form the rotation stopped and bent the stock. On the second
piece of stock, the operation was erratic and started to revolve
on the No. 1 transfer before the corners had been rounded.
They called and tried to get Datex service man and then we
shut down for the night.
H. G. Challman
HGC:nr
ce.
W. B. Schulze
R. W. Clansky, Jr.
J. P. Lynch
R. E. Reum
W. Gruca
E. Bryzgalski
J. Gardner—Black Clawson
[Ex. 3482]
A47
THE BLACK CLAWSON COMPANY
Hamilton Division
Date: 5/13/68
Memo to the File
From: A. P. Romagano
Standard Forge/Action Program
File Ref. E-48-68
The following items were reviewed with Gardner, Mulcahey
and Protzman Saturday, May 11 for immediate follow up at the
Standard Forge job site:
1. Set the rams at “O” synchronization mechanically.
2. Swing arms
(a) Dowel the swing arm side plates on the No. 1 swing
arms
(b) Adjust the valves on both swing arms
(1) Speed up action of swing arms—open orifice holes
in valves
(2) Install Viton seals
3. Vertical posts on end peel rails—Mulcahey to get construc-
tion started immediately at Hamilton. He is then to review
_ how the posts can be secured in the concrete floor at the
job site.
4. Billet drop guard at dies—Mulcahey to start manufacture
at Hamilton immediately.
5. Peel
(a) Check bypass valves—getting sluggish—probably a seal
problem
(b) Check accumulators for peel rotation shock absorber—
Whitworth suggested that the accumulators may be
installed wrong side up. Gardner to check.
A48
(c) Braces for hydraulic lines which ride on peels—Gardner
to check the feasibility of adding a few braces at critical
spots on the peels to minimize the vibration on the
hydraulic lines.
(d) Repair leaks at the leather boots in the peel which serve
as the longitudinal movement shock absorber.
(e) Add a second finger to the rear end of each peel (rota-
tion stops)
(f) Add longer springs to No. 1 peel
(g) Order several sets of Viton seals for Schaeffer cylinders
. Press
(a) Must develop a means to reduce oil splashing at the
center of press at the dies. Possibly some form of shield
for the dies that are not in operation might suffice.
[Ex. 3493]
(b) Tighten electrical box on the No. 1 turret.
. Reliance Drives
Drives appear to lose synchronization under load and are
not meeting specifications as far as synchronization of No. 1
and No. 2 rams are concerned.
. Challman agreed to relieve the journal dies at one end. This
should tend to minimize the overload condition somewhat.
[Ex. 3494}
A49
[The following is a transcription of Exhibits 3700, 3701 and
3720 which are Black Clawson engineer, James Gardner’s
handwritten “Call Reports” with reference to the axle forging
machine. Portions of the handwriting are unclear. These are
marked with a—.]
BLACK CLAWSON HAMILTON DIV.
SALES CALL REPORT
Customer: Standard Forgings
Address: 3444 Dickey Rd.
East Chicago, Ind.
Phone: 397-6600 (219)
Contacts: H.Challman
W. Gruca
Summary of call: The following tapes were tried with the
intent of eliminating or reducing axle bending encountered
during body forging: (6-27-68)
1. Tape No. 126 at 120 SPM time 10:30 a.m. (Tape
125 is identical to tape 125 except all body forming
operations are done while pushing rather than pulling)
Results: Bending was more pronounced. The “dog-leg”
appeared during the plunge, and more bending occurred
along the pre-form. The program was. stopped just after
the body forming due to lack of clearance.
2. Tape No. 125 at 180 SPM time 11:00 a.m. (An at-
tempt to establish a speed vs. bending correlation) Results:
the normal bend occurred at the pre-form and possibly
slightly less occurred at the body forming. There appeared
to be no significant relation between—speed and bending
(con’t. sht. 2).
[Ex. 3700]
A50
BLACK CLAWSON HAMILTON DIV.
SALES CALL REPORT
Customer: Standard Forgings Corp.
Summary of call: (Con’t., from sht. 1)
3. Tape No. 129 at 120 SPM 3:45 p.m. Tape 129
rounds in ‘normal manner, forms No. 1 journal, transfer to
No. 2 peel and then forms body (pulling) with 3 passes
with body finish die, and forms No. 2 journal. The No. 1
peel clamps the free end at the end of the last body pin
to attempt to straighten. Results: the No. 1 journal end
remains straight and pre-forming and body finishing per-
form satisfactorily, however the resulting “dog-leg” at the
No. 2 end was not straightened by the No. 1 peel jaws.
4. Tape No. 128 at 120 SPM 4:15 p.m. (tape 128 is
identical to 125 with an additional pass over the body and
wheel rest with the roughing die). Results: the “dog-leg”
bend re-appeared while passing over the body but to a lesser
degree. The finished forging was straightr (sic).
[Ex. 3701]
ASI
BLACK CLAWSON HAMILTON DIV.
SALES CALL REPORT
Customer: Standard Forgings Corp.
Address: 3444 Dickey Rd.
East Chicago, Ind.
Phone: (219) 397-6600
Contacts: H.Challman
W. Gruca
E. Oakland
Summary of call: Subject—Axle Forging Press The purpose
of this call was to try an alternate forging program in an at-
tempt to eliminate bending of the product. (Challman elected
to delay any runs during this week of 7-1 due to the holiday
and their shvtdown on 7-5). The program involves turning the
No. 1 peel with the No. 2 peel while both grip the product.
The installation of a two-way valve was necessary to allow
the No. 1 peel to free-wheel. This work was completed on 7-9
(Tues.) and some dry runs were made to check the tapes and
the free-wheeling action. The program appeared satisfactory
and so a decision was made to heat up the furnace and run
axles on 7-10 Wed.). A total of 8 billets were run and all ap-
peared to be straight and reasonably to size. The bending could
be detected dring the pre-form or body finish process and shock
on the peels appeared less than normal. The ends were cut
off and the 8 axles were centered and checked (last line un-
clear).
[Ex. 3720]
A52
-
STANDARD FORGINGS DIVISION
Chicago, Illinois
July 15, 1968
To: W. H. Murphy
B. Oaklund
Subject: Axle Forging Press
The following details should be taken care of and worked
upon, so that a production run can be made.
1. Bevel the peel jaws so stock will have easier entry into
the jaws.
2. Add brackets on top of the peels on traverse hydraulic
line and on 4-way valves to reduce vibration.
3. Check and correct if necessary, the peel jaw alignment.
No. 1 peel with square stock and No. 2 peel with round
stock to eliminate possible bending of finished axle.
4. Install oil boots on both peels. (Shipment promised 7-19
out of Milwaukee. )
5. Install proper seals in peel pumps and inspect other
hydraulic items for seal leakage.
Check hydraulic fittings on the Shut Height Mechanism.
Reinstall the Reliance Cooling Fan in Panel.
Clean scale out of furnace.
Install positive mechanism for dumping the stock off of
the furnace cart.
7 PPP
10. Install sump pump in the scale pit.
11. Hook up the water cooling lines.
12. Install a safety rail around the center die opening on the
top of the machine.
(Ex. 3731]
Wee BR. ek et Oe
AS3
THE BLACK CLAWSON COMPANY
Hamilton Division
From. A. P. Romagano
To: Byron Long
Subject: Standard Forge Field Service
Date 8/22/68
File Ref. H-172-68
Byron, in the event that I don’t have an opportunity to dis-
cuss this with you beforehand, please go back through the
record and determine how many days Jim Gardner has been
at Standard Forge since all of us returned to Hamilton some-
time in May. I don’t recall the specific timing. But there was a
certain break point at which we stopped in order to have the
major rework done, the installation of beams and some other
work which Standard Forge themselves wanted to have done
at that time. You will recall that it took them three, four or
five weeks to accomplish all of this work due to the slowness
with which they approached it. While we had not achieved
100% success at this particular time, we were certainly very
far along.
Now the thought occurs to me that Standard Forge is going to
present us with what I suspect is a very sizeable bill for back-
charges. Therefore I would like to have all-of the ammunition
of additional charges that I can get my hands on which are rea-
sonable and legitimate. As you and I have discussed a number
of times, we took entirely too much time in the field but the
facts being as they are, this was the result of the machine mal-
functioning. However, it seems to me that since I returned from
Standard Forge in May we have had Gardner up there many,
many days, most of which feli into the category of customer
relations in the first place, and secondly into the category that
AS4
these people never really bothered to get an operator to learn
how to run the machine. For example, these last two weeks is
completely unrealistic as far as what should be expected of us.
In any event, I don’t really think that I will collect any money
for this but I certainly would like to have a bil for “x” thousand
dollars for field service plus expenses to counteract any numbers
which Standard Forge has. Accordingly, please check the days
that Jim has been there since May using our field service charge,
I think it is a $100 or $125 a day, then add up all of his ex-
penses in that same period. We can then have what amounts to
an invoice prepared even though it is not my intent to send it
yet. In this way I will have some figures to work on in any
discussion with Standard Forge. The reason this comes to my
mind is that as things are now developing, I rather feel that
Gardner is going to have to be at Standard Forge next week
because they still haven’t finished their own work on this thing.
Please get this together as soon as you can.
‘ (Ex. 3757]
APR/ai
ASS
THE BLACK CLAWSON COMPANY
Hamilton Division
Date: 9/18/68
File Ref. I-18 1-68
To: Jim Gardner
From: A. P. Romagano
Subject: Standard Forge
Please call Mr. Challman of Standard Forge and tell him the
following:
1. Romagano called Gardner and requested he call Challman
since Romagano is tied up with budget meetings in New
York and was unable to call Challman directly.
2. Romagano thanks Mr. Challman for his offer to permit
Black Clawson to join in the forging institute tour being
conducted at Standard Forge but Romagano unfortu-
nately is tied upon on the corporate budget review and
cannot make it to Chicago on Thursday.
3. Mr. Muck already had other appointments set up and
similarly will be unable to attend. Mr. Muck will be in the
general area and will make every effort to get in Thurs-
day afternoon but it is so indefinite that it is better for
Mr. Challman to plan that we will not be there at all.
Should a question arise relative to peel modifications, respond
that Romagano had nothing to say about this and Gardner had
not discussed it specifically with Romagano.
(Ex. 3832]
APR/ai
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.