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Hungerford & Terry, Inc. v. Waterlink Separations

July 19, 2007

HUNGERFORD & TERRY, INC., A DELAWARE CORPORATION, PLAINTIFF-APPELLANT,
v.
WATERLINK SEPARATIONS, INC., A WHOLLY OWNED SUBSIDIARY OF WATERLINK, INC., AND WATERLINK, INC., A WHOLLY OWNED SUBSIDIARY OF PARKSON CORPORATION, DEFENDANTS,
AND PARKSON CORPORATION, A SUBSIDIARY OF ALEX JOHNSON, INC., JOINTLY, SEVERALLY AND IN THE ALTERNATIVE, DEFENDANT-RESPONDENT.



On appeal from the Superior Court of New Jersey, Law Division, Gloucester County, L-2135-05.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Submitted March 19, 2007

Before Judges Lintner, S.L. Reisner and Seltzer.

Plaintiff, Hungerford & Terry, Inc., appeals from an April 12, 2006, summary judgment dismissing its complaint that alleged breaches of contract and warranty against defendant, Parkson Corporation.*fn1 We affirm.

The facts presented to the motion judge were essentially uncontradicted, the parties disputing only whether those facts could permit a reasonable factfinder to conclude that defendant had made express warranties respecting its water filtration system. The record submitted to the motion judge reveals that plaintiff is a Delaware corporation manufacturing water treatment equipment. Black & Veatch Zachary Power Partners (BVZ) contracted with plaintiff to provide a water treatment system for Sequin, Texas. The treatment system, necessary for use in conjunction with a power plant, was intended to "purify gray water," or secondarily treated waste water, from the city's water supply. The contract specifications called for a continuous sand filtration system to reduce phosphates suspended in the water to a specified level. Because the primary issue before the judge was whether the communications of defendant rise to the level of an express warranty, we recount the evidence of those communications in some detail.

On March 29, 2000, Harold L. Aronovitch, plaintiff's Vice President and Technical Director, inquired of defendant concerning defendant's filtration systems. He provided defendant with a suggested profile of gray water, with flow-rate data, and the expected specification of the water after treatment. Patrick Herrick, defendant's industrial sales manager, authored an April 3, 2000, letter enclosing information on sand filters. The letter included this statement: "Without having feed [total suspended solids] information, it is difficult to estimate what the filter performance will be." The parties continued to communicate and, on April 13, 2000, Herrick faxed to Aronovitch a confirmation of a telephone message. The fax contained the statement: "[W]e are confident that the SuperSand(r) filter can reduce phosphate, as PO4, from 30 mg/l*fn2 to 3 mg/l or less." The comment was qualified immediately: "This is based on the phosphate, as PO4, being capable of effective flocculation. This needs to be determined either by bench testing or on site pilot testing."

On September 7, 2000, Herrick provided plaintiff with a proposal calling for the use of eight filters, which he suggested might be reduced to six. The cover letter, however, cautioned: "We have a concern with the level of phosphate (PO4) in the filter feed water. Our primary concern is that the volume of coagulant required to precipitate the phosphate will generate a solids volume which will overload the filters." He explained that the design was based "on a maximum feed of 10 mg/l of phosphate (PO4)."*fn3

On September 20, 2000, Herrick faxed to plaintiff a response to questions apparently made telephonically and indicated "our proposed system will reduce the phosphate (PO4) level from 30 mg/l down to 10 mg/l," but warned that "[t]his statement is based on the assumption that the required amount of phosphate (PO4) can be made insoluable by precipitation with a coagulant." On September 21, 2000, Herrick provided plaintiff with a proposal for the sale of six filters, specifying filter material, filter media, and other information, but making no reference to the performance of the filters.

On October 17, 2000, representatives of plaintiff and BVZ placed a conference call to Peter Wood, defendant's regional sales manager. Wood's deposition would confirm that performance guarantees were discussed at that meeting. Nevertheless, he insisted that he informed the attendees that defendant could not offer a guarantee of performance without testing samples of the gray water intended to be purified. He was told that samples were not available.

On October 23, 2000, in what the motion judge characterized as "the key letter in the case," Wood wrote to Aronovitch and congratulated him on the contract with BVZ (although that contract had not yet been awarded). Wood expressed defendant's interest in supplying filters for the purification system and included a performance statement in the letter to the effect that the influent PO4 would equal "35-45 ppm" and the effluent PO4 would equal "5 ppm." Thus defendant opined that the filters would be able to reduce the phosphate content of the water from 35-45 parts per million to 5 parts per million. Wood continued that "this application is within reasonable process expectations." However, he conditioned the comment by noting that, "[t]he only remaining area for concern is the total solids generated. . . . We would be happy to conduct bench-scale laboratory testing to determine alkalinity and subsequent reactive solids levels."*fn4

On November 8, 2000, plaintiff sent a purchase order to defendant for six filters and, on December 5, 2000, defendant returned an order package for the six filters. The package contained a product brochure, a letter of compliance, a warranty, and a process guarantee. The warranty information related to the freedom of the product from defects in material and workmanship and contained a disclaimer:

OTHER THAN THE EXPRESS WARRANTIES MADE HEREIN, [DEFENDANT] MAKES NO OTHER WARRANTY OF ANY KIND WHATSOEVER, EXPRESS OR IMPLIED, INCLUDING WARRANTIES OF MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR USE OR PURPOSE. [DEFENDANT] SHALL NOT BE LIABLE FOR INCIDENTAL OR CONSEQENTIAL DAMAGES OR LOST PROFITS ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT.

The process guarantee provided: "A process guarantee cannot be made unless a sample of the influent is tested by [defendant]. Please refer to the attached correspondence ...


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