Case Title: Discount Drug v. Honeywell Protec. Serv.

Citation: 303 Pa. Super. 522, 450 A.2d 49

Docket Number: 

State: pennsylvania

Court: Pennsylvania Supreme Court

Date: 1982-08-27T00:00:00Z

Document:
303 Pa. Superior Ct. 522 (1982) 450 A.2d 49 DISCOUNT DRUG CORPORATION, Appellant, v. HONEYWELL PROTECTION SERVICES, DIVISION OF HONEYWELL INC. Supreme Court of Pennsylvania. Argued December 14, 1981. Filed August 27, 1982. *523 Mark D. Turetsky, Norristown, for appellant. Brian Sullivan, Norristown, for appellee. Before McEWEN, JOHNSON and WATKINS, JJ. JOHNSON, Judge: This is an appeal from a summary judgment that dismissed Appellant's complaint against Appellee for breach of warranties and negligence. For the following reasons, we reverse and remand for trial. Appellant leased premises in New York City from a New York corporation (lessor). In a separate agreement, Appellant paid lessor for the use of a burglary alarm system that had been previously installed by Appellee. Appellee was not a party to the aforesaid contract. Later, Appellant requested the lessor to obtain additional security devices, for which Appellant agreed to pay additional money to the lessor. Pursuant to a contract with the lessor, Appellee installed new devices and integrated them into the general alarm system. Appellant alleges, first, that the new devices did not operate properly since their installation, and, second, that Appellee did not make any effort to correct the problem, despite Appellant's numerous calls. Appellant's premises were burglarized a month after the installation of the new equipment, but the alarm remained silent, allegedly because the system was defective. Appellant filed the complaint as a third-party beneficiary of the contract between Appellee and the lessor. After pretrial discovery, Appellee's motion for summary judgment *524 was granted. This is an appeal from the order of April 21, 1981, which granted Appellee's motion and dismissed Appellant's complaint. Appellant raises two issues for our consideration. First, should a summary judgment have been based upon a limitation of liability clause in the contract for installation and service of a burglary alarm system? Second, can a limitation of liability clause bar a claim based on express and implied warranties when the clause neither mentions the warranty nor contains any language which purports to modify or limit any warranties? Because of our disposition of this case, we will discuss only the second issue. Preliminarily, we note that both Appellant and Appellee, as well as the lower court, agree that New York law applies to the instant case. Since the choice of law is not an issue properly presented for our consideration, we cannot discuss this issue sua sponte. We proceed, therefore, to consider the issue concerning the limitation of liability clause, which states: The foregoing disclaimer neither mentions the term, "merchantability," nor employs phrases to indicate that the buyer takes the goods "with all faults" or "as is." Under section 2-316 of the Uniform Commercial Code of New York, an implied warranty of merchantability cannot be excluded unless the foregoing terms are utilized. Likewise, an implied warranty of fitness for a particular purpose cannot be excluded unless the contract employs language to indicate that no warranties exist beyond the face of the agreement. The relevant portions of section 2-316 state: The courts have refused to recognize a disclaimer that fails to comply with the foregoing requirements. See Laudisio v. Amoco Oil Co., 108 Misc.2d 245, 437 N.Y.S.2d 502 (1981). Since the disclaimer of liability in the instant case does not meet the requirements of section 2-316, the implied warranties of merchantability and of fitness for a particular purpose have not been waived. Appellant alleges that the additional equipment, which Appellee installed approximately a month before the burglary occurred, did not function from the time that it was installed. Since Appellant's allegations involve a factual controversy, the case must be remanded for trial. If the finder of fact determines that the equipment was defective, Appellant may have a cause of action against Appellee for breach of warranty of merchantability and/or breach of warranty of fitness for a particular purpose. *527 For the foregoing reasons, the order of April 21, 1981, is reversed; and the case is remanded for trial. [1] N.Y.U.C.C. § 1-101 et seq. (Consol. 62 1/2).