On appeal from the Superior Court, Law Division, Cumberland County.
Pressler, Scalera and Stern. The opinion of the court was delivered by Pressler, P.J.A.D.
[229 NJSuper Page 266] Defendant Pathe Computer Control Systems Corp., a designer and manufacturer of sophisticated computer-controlled sewing machinery, contracted with plaintiff Aqua Marine Products, Inc., to produce for it an outline quilting machine at a contract price of $75,000. The contract was subsequently modified to include, at an additional charge of $4,000, a roll-feed attachment. Plaintiff, convinced after some months following the
original contract that defendant lacked the capacity to produce a machine able to satisfactorily perform outline quilting, cancelled the order and demanded return of its $25,000 deposit. Defendant refused, contending that the cancellation was wrongful. Plaintiff sued, and defendant counterclaimed. Following a bench trial, the judge concluded that there were two separate contracts, one for the machine itself and one for the roll-feed attachment, and that while defendant had breached the first, plaintiff had breached the second. Accordingly, the judge set off the $4,000 price for the roll-feed attachment against the deposit plaintiff had made and entered judgment in plaintiff's favor for the difference plus prejudgment interest. Defendant appeals. We reverse.
Defendant raises both substantive and procedural issues. It contends that the trial judge erred in concluding that the parties had entered into two separate contracts and that, in any case, the verdict was against the weight of the evidence. It also contends that the trial judge erred in admitting the telephone testimony of an out-of-state witness not previously known to either party and discovered by plaintiff during trial. We agree with these claims of error and address first the substantive issues.
According to the record, plaintiff, a corporation owned by JoAnne and Loren Pettisani, is a marine supplier selling custom-made textile products, including quilted bedspreads and comforters, to boat owners. One of its speciality items is outline-quilted fabrics, that is, quilting which follows the outline of the design already imprinted on the fabric. At least as of 1984, plaintiff was unaware of any machine capable of automatic outline quilting. It was, rather, an expensive, time-consuming, hand-sewn operation. Pattern quilters, that is, machines which produce a repeated programmed pattern unrelated to the design of the fabric itself, however, were commonly available. In 1984 plaintiff heard that an outline quilting machine might have become available and canvassed quilting-machine manufacturers unsuccessfully until May 1985, when it telephoned
defendant's plant in Irvington and was told it produced such machines. In late May or early June, the Pettisanis visited the plant in Irvington and discussed their needs with defendant's sales manager, Janet Codos, whose brother Richard Codos is the company's chief engineer and was its sole witness. There is disagreement between the parties as to whether at that time defendant demonstrated a pattern quilter or an outline quilter, but both agree that defendant unequivocally represented its capacity to produce an outline quilter. Various conversations between the parties ensued, and finally, on August 16, 1985, plaintiff signed a contract agreeing to purchase a "Pathe Model SDI5000 Computer Controlled Single Needle Quilting Machine" together with a "king size design input digitizer" and "electronics and camera for outlining" at a total price of $75,000. The contract, among its other terms, provided for shipment within 90 to 120 days after payment of the one-third deposit and for retention by the defendant of the deposit as liquidated damages in the event of plaintiff's breach.
According to Loren Pettisani, he decided early in the fall of 1985 that "we would need some device to feed and recover the fabric on a roll." Since the machine as originally contracted for did not have such a device, defendant undertook to design one which would operate as an attachment to and adjunctive to the machine itself. Apparently, substantial negotiations and discussions ensued, culminating in this letter from defendant to plaintiff dated February 4, 1986.
As per our discussion on January 31, 1986, we are proceeding ahead with the fabrication of the Roll Fed Fabric Handling System on your 130 X 130 Quilter. I am enclosing a copy of the finished print that details the attachment. This attachment does not require Thompson Bearings, as per our original print. However, we have added universal joints to the fabric rolls, to make the fabric handling easier. Hence, there has been a trade-off in costs. As per our original quote, the price of this attachment will remain at $4,000.00.
To reiterate one point we discussed, when using the Roll Fed attachment, quilting speed reductions may be necessary, to compensate for the added weight of the fabric rolls.
We expect to be testing the Roll Fed attachment within two weeks. I will ...