Shipsview Corp. v. Beeche Systems Corp. Aff'd,

125 F.3d 844 (2nd Cir. 1997)

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Nature of the Case

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Facts

Shipsview (P) was a bridge cleaning and painting contractor. P was the low bidder on a bridge painting contract with the State of Connecticut. After getting that contract P talked with Beeche (D) about containment systems. D had a three-part containment system consisting of a platform, attachment apparatus, and tarp enclosures. Approval of the containment system by DOT was required before the beginning of the paint stripping operations. P and D agreed that D would design and deliver a system for one of the bridges for $210,435; delivery 8-10 weeks after initial deposit. The deposit was to be 15% on the order, 10% on April 4, 1994, 10% on April 11 and $15% on April 18. P made some initial deposits but soon thereafter became delinquent. After the agreement was signed and the actual bridge was examined, a design modification was agreed to which increased the price to $269,514 to which both parties agreed. This resulted in a proportionate increase in the required deposit. An additional payment was added on April 25. The April 18 and 25th dates passed with no payment of the respective 15% deposits on those dates. There was $61.110.25 due on the 50% deposit requirement. On May 10, P warned D that work would cease unless the remaining deposit was received; D forwarded $10,000. Various communications were exchanged, and delivery dates were recalculated. A final deposit check was received but the note with it stated that the final delivery date had to be June 7, 1994 and that a failure to make that date would result in cancellation; this language was also on the back of the check. D saw the terms on the back of the check but no further communications took place until the issue of DOT approval was to be addressed. D did not want to proceed without DOT approval unless they got a written waiver from P. P did not respond. Delivery of the system did not occur on June 7. DOT approval had not been obtained as of June 7 and the system was only 90% complete. There was no preparation for delivery at the site on June 7th as the logistics had not been made. P claimed he was at the site waiting for delivery for six hours but admitted under oath that he had access to a phone and had failed to call D. P then canceled the order and demanded a full return of the deposit. Another vendor was obtained. P sued D for the return of the deposit and the $21,200 in additional costs incurred plus interest. D sold the system to another company for the $135,000 it would have received from P. D claimed damages for lost profits of $34,141.92.