Title: Camara v. Hill

State: vermont

Issuer: Vermont Supreme Court

Document:

NOTICE:  This opinion is subject to motions for reargument under V.R.A.P. 40
as well as formal revision before publication in the Vermont Reports.
Readers are requested to notify the Reporter of Decisions, Vermont Supreme
Court, 111 State Street, Montpelier, Vermont 05602 of any errors in order
that corrections may be made before this opinion goes to press.


                                No. 90-197



David Camara                                 Supreme Court

     v.                                      On Appeal from
                                             Rutland Superior Court
Bedford W. Hill,
d/b/a B. W. Hill Systems                     February Term, 1991



Frank G. Mahady, J.

Edward L. Winpenny of DeBonis, Wright & Winpenny, P.C., Poultney, for
  plaintiff-appellant

S. Scott Smith of Biederman & Rakow, P.C., Rutland, for defendant-appellee



PRESENT:  Allen, C.J., Gibson, Dooley, Morse and Johnson, JJ.



     JOHNSON, J.   Plaintiff sued defendant seeking recovery of amounts paid
to defendant for a computer system for plaintiff's slate business, conse-
quential damages, and attorney's fees.  Defendant counterclaimed for the
value of time spent developing software.  After a two-day bench trial,
judgment was entered for defendant on plaintiff's claim and for plaintiff on
the counterclaim; plaintiff appealed.  We affirm in part and reverse in
part and remand for further proceedings.
     Defendant submitted an initial proposal to plaintiff on July 27, 1988,
stating as follows:
           Dear Dave [Plaintiff],

               This is a breakdown of the computer system we have
          been discussing.  Most of the vendors that I have talked
          to have told me that shipping times are about one week.
          I'll have this stuff shipped to me and I'll burn it in,
          (test run it) and write the inventory control software
          before I move the system to your office.  If they're
          not as bad a bunch of liars as the slate people, I
          should have Gail [plaintiff's employee] driving you
          crazy with the thing, in about three weeks.

The letter then specified a CCDA 640 kilobyte memory computer for $1,971 and
an "I.coth [sic] Starwriter"  printer for $948.  Promised software included
a "BPI Accounting Package" for $450, a "dBase III plus database" for $649, a
WordPerfect word-processing program for $375, and an operating system
program for $139.  The proposal also included miscellaneous charges of $250,
for a grand total of $4,782.
     Plaintiff agreed to the proposal and paid $4,782 when defendant told
him that the equipment had been shipped.  In subsequently delivering system
components, defendant changed many of the specifications in the July 27,
1988 letter, and the ensuing lawsuit largely concerned whether or not
plaintiff had approved those changes.  The trial court found that plaintiff
approved a different computer with a somewhat smaller memory, since the one
recited in the July 27, 1988 letter was then in short supply.  Instead of a
42-megabyte hard drive, defendant supplied a 30-megabyte drive, which the
court found "was entirely adequate for the system." The court further found
that defendant supplied a printer "which was identical to the Starwriter
except for the nameplate on the machine."  Instead of the BPI accounting
program, defendant supplied a DAK brand substitute, because he concluded the
latter "would be more appropriate to the Plaintiff's needs." It is also
undisputed that defendant provided plaintiff with nonoriginal copies of the
database and word-processing programs described in the July 27, 1988 letter.
     Central to the suit were delays in both the shipment of additional
components and the completion of software customized for plaintiff's
business use.  On October 19, 1988, a computer was delivered to plaintiff,
at which time, according to defendant's testimony, the software was
"probably 25% complete."  On November 23, 1988, defendant installed the
accounting program, but the inventory software remained uncompleted, and as
far as the record indicates, was never completed.  The printer was delivered
on January 17, 1989, but the tractor feed, essential to plaintiff's payroll,
was delivered a year later.
     In February, 1989, plaintiff demanded return of the money paid to
defendant, but did not offer to return the equipment.  When asked why he did
not return the system, plaintiff testified:
          Q. Have you held onto the equipment?

          A. Why I really don't know.  I had gotten a thousand
          dollars into it and I have got a lot of time.  I
          guess that's why I held onto it.

     The court found that while the computer was in plaintiff's possession,
the hard disk was reformatted and the system was used.  The trial court also
found that there were delays in the performance of defendant's undertakings,
but it attributed some of these delays to plaintiff's own lack of cooper-
ation, specifically his failure to make his accountant available to consult
with defendant to aid in designing an accounting system appropriate for
plaintiff's business.
     The court concluded that time was not of the essence in the performance
of the contract and that plaintiff "has received substantially the system
contemplated by the parties, and the Defendant has received the sum set
forth in [the July 27, 1988 letter], which he drafted."  The present appeal
followed.
     Plaintiff argues first that he rejected the entire system as
nonconforming goods, pursuant to the Uniform Commercial Code (UCC),
specifically 9A V.S.A. { 2-601(a).  Defendant responds that the UCC does not
apply to this transaction because "[t]he actual physical goods were
entirely secondary to Plaintiff."  But the trial court made no determination
that the agreement between the parties was predominantly one for services,
rather than goods, and the record strongly supports the opposite conclusion.
The prices set by defendant in the July 27, 1988 letter all related to
goods, not services.  See Triangle Underwriters, Inc. v. Honeywell, Inc.,
604 F.2d 737, 742 (2d Cir. 1979) (where essence of contract for computer
system involved sales, rather than services, the UCC applied);  Austin's of
Monroe, Inc. v. Brown, 474 So. 2d 1383, 1388 (La. App. 1985) (contract,
which had as its predominant objective the obligation to deliver an
operational computer system, was one for sale); cf. Liberty Financial
Management Corp. v. Beneficial Data Processing Corp.,