The opinion of the court was delivered by: Aspen, District Judge:
FINDINGS OF FACT AND CONCLUSIONS OF LAW
This cause having come on trial and the Court, having
considered the evidence, oral arguments, and the briefs of the
parties, does hereby make and enter, pursuant to Rule 52 of
the Federal Rules of Civil Procedure, its Findings of Fact and
Conclusions of Law. Any finding of fact which is properly a
conclusion of law and any conclusion of law which is properly
a finding of fact is to be so considered.
1. Custom Automated Machinery ("Custom") is an operating
division of Custom Aluminum Products, Inc., an Illinois
corporation with its principal place of business at 414 West
Division Street, South Elgin, Illinois. Custom was established
as a division of Custom Aluminum Products, Inc. on or about
March, 1978. Custom designs, manufactures and sells
thermoforming machinery. (Agreed Statement of Fact,
hereinafter "ASOF", # 1).
2. Penda Corporation ("Penda") is a Wisconsin corporation
with its principal place of business at 1214 North Fort Road,
Portage, Wisconsin. Penda is in the business of thermoforming
plastic products. (ASOF # 2).
Case No. 79 C 3078: CAM No. 1
3. In early 1978, the president of Penda met with a sales
representative of Custom in Chicago, Illinois. They agreed to
meet again in Wisconsin to discuss the possible purchase by
Penda of thermoforming machinery manufactured by Custom. (ASOF
4. Subsequently, two meetings were held between Penda and
Custom representatives at Penda plants in Wisconsin. During
these meetings, Penda and Custom discussed the capacities of
Custom's thermoforming machinery. Custom estimated that its
machine would operate at a cycle time of 120 cycles per hour
and stated that it could be delivered to Penda within eight to
twelve weeks. (Tr. 90-94, 127).
5. Following these meetings, Custom sent Penda a written
quotation for Penda's purchase of one 6' x 10' four-station
rotary thermoforming machine (hereinafter "CAM No. 1") (ASOF
# 4, Tr. 111-114). Custom stated therein that CAM No. 1 would
have twin-sheet forming capability (Tr. 232) and would be
accompanied by instruction manuals (Tr. 35; Penda Ex. 2).
6. Upon review of Custom's quotation for CAM No. 1, Penda
representatives discovered that several operating requirements
to which Custom had orally agreed were not included.
Consequently, Penda retyped the aforementioned quotation,
adding the operating requirements agreed to earlier as well as
a few minor additional ones, and sent it to Custom on or about
May 18, 1978. (Tr. 119-122).
7. In deciding to purchase CAM No. 1, Penda relied upon
Custom's representations that the machine would be delivered
within twelve weeks of the agreement and that the machine
would be designed so that it could operate at 120 cycles per
hour with an Envirodisc mold. (Tr. 90-94, 122-124).
8. Custom agreed to all of Penda's additions on the
quotation for CAM No. 1.
9. In or about November, 1978, CAM No. 1 was delivered to
Penda's plant in Portage, Wisconsin. (ASOF # 8).
10. CAM No. 1 was installed at Penda's plant by employees
and agents of Custom in or about mid-November, 1978. (ASOF 9).
11. Penda paid to Custom the full purchase price of
$109,464.00 for CAM No. 1. (ASOFs # 7 and # 10).
12. Despite repeated requests by Penda, Custom failed to
deliver to Penda manuals for the operation, start-up, and
maintenance of CAM No. 1. (Tr. 190-91, 248).
13. During the installation of CAM No. 1, numerous problems
with the machine were discovered. The problems with the
installation of CAM No. 1 testified to at trial included
misalignment of the platens, a defective sheet load table, and
improper fan location. (Tr. 242-43). After CAM No. 1 was
installed, Penda personnel attempted to operate it but
encountered a series of mechanical failures and breakdowns.
The plaintiff presented specific evidence of malfunctions,
including shorts in the wiring, sagging frames, and burned-out
motors. (Tr. 250-253). Additionally, the evidence established
that CAM No. 1, as manufactured by Custom, is incapable of
twin-sheet forming. (Tr. 615-616).
14. Penda personnel discussed the problems of CAM No. 1 with
Custom personnel on numerous occasions and, on November 20,
1978, Penda formally notified Custom in writing of the
malfunctioning of CAM No. 1. (Tr. 143-145, ASOF # 18).
15. Despite Custom's numerous service calls to work on CAM
No. 1 between November, 1978 and March, 1979, Custom failed to
repair the machine so that it could operate in accordance with
Penda's needs. (Tr. 145-154, 263, 370-389, 860-875). After
March of 1979, Custom did not perform any further repairs on,
CAM No. 1, nor did it provide any further replacement parts.
(ASOF # 19).
16. The testimony presented at trial indicated that CAM No.
1, as designed and manufactured by Custom, under the contract
description for the machine, was not fit for the ordinary
purposes of thermoforming machinery.
17. In an effort to correct the defects that Custom had
failed to correct and to repair CAM No. 1 so that it could
operate in accordance with Penda's needs, Penda sought
assistance and parts from private contractors, at a cost of
approximately $67,566, (Tr. 298)*fn1 and used parts from its
inventory at a cost of approximately $500 (Tr. 309).
18. It would cost Penda at least $50,000 to modify CAM No.
1 so that the machine will be able to function in the
twin-sheet forming mode (Tr. 616).
19. Due to the abnormal defects, CAM No. 1 was inoperative
for 529 hours between May 30, 1979, and May 31, 1981.*fn2
Penda showed to a reasonable certainty that it suffered
damages for loss of use or the machine in the amount of $43
per hour: $20 for lost operator time and $23 for profit. (Tr.
303-304). Penda also attempted to show an additional loss of
$45 per hour for overhead costs. Penda's proof of this loss,
however, was wholly inadequate. (See Conclusion of Law # 15,
20. The evidence at trial indicated that Penda lost 1,534
hours of CAM No. 1's productive capacity due to the machine's
failure to consistently operate at 120 cycles per hour, 1,343
hours between January 25, 1979 to April 7, 1980 (Tr. 290-293)
and 191 additional hours between April 27, 1980 and May 31,
1981 (Tr. 295).
21. The evidence at trial indicated to a reasonable
certainty that Penda's maintenance employees spent 529 hours,
at a cost of $18 per hour in repairing CAM No. 1 between May
30, 1979 and May 31, 1981. (Tr. 304-305).
Case No. 79 C 1755: CAM No. 2
22. After an agreement had been reached for Penda's purchase
of CAM No. 1, the president of Penda spoke with a sales
representative of Custom concerning the purchase of a second
thermoforming machine. (Tr. 131-132).
23. Subsequent to this conversation, Penda submitted a
purchase order, dated August 4, 1978, for the purchase of a
second 6' x 10' four-station rotary thermoforming machine
(hereinafter, "CAM No. 2"). (ASOF # 7). Attached to the
purchase order for CAM No. 2 was a list of specifications,
prepared by Penda which, except for the deletion of all
references to twin-sheet forming ...