Appeal from the Circuit Court of Cook County. 97 L 2606 Honorable Paddy H. McNamara, Judge Presiding.
The opinion of the court was delivered by: Justice Wolfson
In this case a pipe installation company sued the pipe manufacturer and the "middleman" in the sale for the cost of removing and replacing allegedly defective pipe. The trial court granted summary judgment to both defendants. To determine the rights and responsibilities of the parties we have trekked through the Uniform Commercial Code. We conclude the buyer of the pipe is attempting to walk away from contract provisions that limit its remedies. For that reason, we affirm the trial court.
On March 12, 1996, Robert-James Sales, Inc. (Robert-James), a self-described "middleman" between pipe installers and pipe manufacturers, contacted Bristol Metals, Inc. (Bristol Metals), a self-described "leading manufacturer" of stainless steel pipe, to obtain price information. The next day, Bristol Metals sent Robert-James a two-page fax quotation on 42 lengths of various pipe, including two-inch continuous seam welded stainless steel pipe. The bottom of the second page said, "THE GENERAL TERMS AND CONDITIONS SHOWN ON THE ATTACHED SHEET ARE INCORPORATED HEREIN AND MADE A PART OF THIS QUOTATION." The quotation, as it appears in the record, did not include an attached sheet. But, in an affidavit, Bristol Metals' Chris Blankenship (Blankenship) said Bristol Metals always included a copy of its terms and conditions with each quotation. According to Blankenship, "When a purchaser accepts Bristol's Quote, Bristol then sends a Confirmation confirming the price and quantities accepted."
On March 15, 1996, Bristol Metals sent Robert-James a two-page "ORDER CONFIRMATION" on these 42 pipe lengths. The bottom of the second page again referred to the general terms and conditions on an attached sheet. On the attached sheet, Bristol Metals' general terms and conditions said:
BRISTOL METALS, INC. PRODUCTS ARE WARRANTED TO BE FREE FROM MANUFACTURING DEFECTS WITHIN THE LIMITS OF APPLICABLE SPECIFICATIONS. WE ASSUME NO RESPONSIBILITY FOR SUITABILITY FOR INTENDED USAGE. IF AN ITEM PROVES TO BE DEFECTIVE WITHIN ONE YEAR FROM SHIPMENT, PROVIDED IT HAS BEEN USED AS RECOMMENDED, AND IN ACCORDANCE WITH RECOGNIZED PIPING PRACTICE, AND PROVIDING IT HAS NOT BEEN WORN OUT DUE TO SEVERE CORROSIVE OR ABRASIVE OPERATING CONDITIONS, IT WILL BE REPLACED WITHOUT CHARGE. WE WILL NOT ASSUME LIABILITY FOR LABOR EXPENDED, OR DAMAGES ACCRUING FROM THE USE OF MATERIAL PURCHASED FROM US. IF MATERIAL IS DEFECTIVE, THE LIMIT OF DAMAGE IS THE PRICE OF THE DEFECTIVE MATERIAL. THIS LIMITATION OF RESPONSIBILITY TO THE VALUE OF THE PRODUCT SHIPPED APPLIES TO SPECIAL AS WELL AS STANDARD ITEMS AND BRISTOL METALS, INC. MAKES NO OTHER WARRANTY, EITHER EXPRESS OR IMPLIED."
Blankenship's affidavit continued: "Because it has been a long term, substantial customer, Robert-James has received many copies of Bristol's Terms and Conditions over the years. To Affiant's knowledge, Robert-James never objected to those Terms and Conditions." According to Blankenship, a copy of the terms and conditions was found in Robert-James' file regarding the March 1996 sale.
On March 18, 1996, Robert-James sent Bristol Metals a purchase order for these 42 pipe lengths. It said, "THIS IS CONFIRMATION OF A PRIOR PURCHASE ORDER." Robert-James' purchase order did not mention Bristol Metals' terms and conditions.
In August 1996, Intrastate Piping & Controls, Inc. (Intrastate Piping), an experienced pipe installation company with annual revenues of around $20 million, won a contract to install piping at the Ashland Chemical Company (Ashland Chemical) in Calumet City, Illinois. On August 13, 1996, Intrastate Piping contacted Robert-James for price information on 900 feet of two-inch continuous seam welded stainless steel pipe. According to Robert-James' Robert Baldauff (Baldauff), Robert-James conveyed price information to Intrastate Piping, and Intrastate Piping placed a purchase order over several telephone calls within a few hours. In an affidavit, Intrastate Piping's John Nastav (Nastav) said "*** there was no discussion of any kind as to any limitations of recovery or waiver of warranty by either Robert-James or Bristol Metal." There is no indication in the record any warranties, express or implied, were discussed.
Once Intrastate Piping placed a purchase order, Robert-James generated its August 13 sales order acknowledgment. The front side of this form said, "SEE REVERSE SIDE FOR TERMS AND CONDITIONS OF SALE." The back side, under the heading "Warranties," said: "[Robert-James] shall not be liable for any consequential, incidental, indirect or contingent damages arising from use or failure of any product or otherwise." According to Robert-James' William Barto (Barto), Robert-James generated an acknowledgment "[w]hen the work order is created," and sent the acknowledgment before shipping the pipe. Barto said each acknowledgment included Robert-James' terms and conditions and its remedy limitation, and Intrastate Piping never objected to these terms.
Shortly after its December 1996 installation, a portion of the pipe began to leak. Representatives from Ashland Chemical, Intrastate Piping, Robert-James, and Bristol Metals met at the Ashland Chemical plant on December 29, 1996. The next day, Robert-James and Bristol Metals agreed to supply 900 feet of replacement pipe, more than enough to repair the leaky segments. Over the next six to eight weeks, Intrastate Piping removed the defective pipe and installed the replacement pipe, allegedly incurring over $200,000 in labor costs. Intrastate Piping demanded Robert-James and Bristol Metals reimburse these costs. When they refused, Intrastate Piping filed a complaint against them.
After extensive discovery, all the parties filed summary judgment motions. In a May 5, 1999, MEMORANDUM AND ORDER, the trial court granted summary judgment to Bristol Metals and Robert-James. Intrastate Piping's appeal followed.
Summary judgment should be granted if "*** there is no genuine issue as to any material fact and *** the moving party is entitled to a judgment as a matter of law." 735 ILCS 5/2-1005(c) (West 1998). We review de novo the trial court's decision to grant summary judgment. Murneigh v. Gainer, 177 Ill. 2d 287, 298, 685 N.E.2d 1357 (1997).
Intrastate Piping insists this case involves warranty disclaimers. The trial court reviewed the contract between Bristol Metals and Robert-James and concluded:
"In this case, where the goods provided by Bristol are defective, the terms and conditions of the contract limit recovery to the price of the defective material. This is clearly a limit on remedy rather than a waiver of warranty, since it anticipates that a breach of the warranty against defects has already occurred. It does not attempt to limit the warranty of merchantability by disclaiming ...