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Matched Legal Cases: ['art. 1', 'art. 29', 'art. 33', 'art. 35', 'art. 35', 'art 4', 'art. 19', 'art. 74', 'art. 78']

United States 25 July 2008 Federal District Court [Pennsylvania] (Norfolk Southern Railway Company v. Power Source Supply, Inc.) Go to Database Directory || Go to CISG Table of Contents || Go to Case Search Form || Go to Bibliography CISG CASE PRESENTATION
United States 25 July 2008 Federal District Court [Pennsylvania] (Norfolk Southern Railway Company v. Power Source Supply, Inc.)
[Cite as: http://cisgw3.law.pace.edu/cases/080725u1.html] Primary source(s) of information for case presentation: Case text
DATE OF DECISION: 20080725 (25 July 2008) JURISDICTION: United States TRIBUNAL: U.S. District Court, Western District of Pennsylvania [federal court of 1st instance] JUDGE(S): Kim R. Gibson CASE NUMBER/DOCKET NUMBER: 07-140-JJf CASE NAME: Norfolk Southern Railway Company v. Power Source Supply, Inc. CASE HISTORY: Unavailable
SELLER'S COUNTRY: United States (plaintiff) BUYER'S COUNTRY: Canada (defendant) GOODS INVOLVED: Locomotives Classification of issues present
APPLICATION OF CISG: Yes [Article 1(1)(a)] APPLICABLE CISG PROVISIONS AND ISSUES Key CISG provisions at issue: Articles 4(a) ; 8 ; 19 ; 29(1) ; 33(c) ; 35 ; 74 ; 78 Classification of issues using UNCITRAL classification code
Descriptors: Acceptance of offer ; Counter-offer ; Delivery ; Damages ; Interest Go to Case Table of Contents Case summary
US States 25 July 2008 Federal District Court [Pennsylvania] (Norfolk Southern Railway Company v Power Source Supply, Inc.)
A buyer from Canada and a seller from the USA entered into a contract for the sale of locomotives. The court addressed the following issues (1) counter-offer and acceptance of offer; (2) timeliness of delivery; (3) damages and (4) interest on damages. The Court applied CISG articles 19(1), 33(c), 74 and 78, determining, in relevant part, that (1) the alleged verbal agreement for delivery was never incorporated into the contract; (2) the Plaintiff acted within a reasonable time after the conclusion of the contract to deliver the goods to the Defendant as there was no firm delivery date; (3) the final bill of sale materially altered the purchase order to exclude warranties, thereby constituting a counter-offer which was accepted via performance: (4) as delivery was timely, Defendant was held liable for damages pursuant to Article 74; and (5) Plaintiff was entitled to pre-judgment interest, the rate of which was to be decided by the United States court.
Go to Case Table of Contents Editorial remarks
CITATIONS TO TEXT OF DECISION Original language (English): Text presented below; see also 2008 U.S. Dist. LEXIS 56942 Translation: Unavailable CITATIONS TO COMMENTS ON DECISION Unavailable Go to Case Table of Contents Case text
Norfolk Southern Railway Company, Plaintiff, v. Power Source Supply, Inc., Defendant
Civil Action No. 06-58 J
25 July 2008 [...]
MEMORANDUM OPINION AND ORDER BACKGROUND Power Source Supply (hereinafter Defendant) is
a Canadian corporation whose principal place of
business is Calgary, Alberta, Canada. Document
No. 52 p. 1. It supplies used and rebuilt equipment
to the railroad, oil, and gas industries. Id. Norfolk
Southern Railway Company (hereinafter Plaintiff) is
a Virginia corporation with its principal place of
business in Virginia; it also operates a locomotive
repair facility in Altoona, Pennsylvania. Id. at 2.
On July 29, 2004, Defendant faxed to Plaintiff in
Altoona purchase order # 222147 for twelve
SD40 type locomotives and twenty-four B23-7 type
locomotives at a total price of $1,000,000.[1] Id.;
Document No. 52-2 p. 63. The locomotives had
been inspected by Defendant's agent prior to that
date. Document No. 52 p. 2. In September of 2004
Defendant requested that ten of the twelve SD-40
type locomotives be supplied with "blue cards."[2] Id.
Defendant had not previously raised the issue of blue
cards, and Plaintiff had not factored the cost of
obtaining them into the $1,000,000 purchase price.
Id. at 2-3, Document No. 52-2 at 16-17. Reflecting
this latest phase in the Parties' negotiations, on
September 13, 2004 Defendant faxed a new
purchase order, # 222258, to Plaintiff in "Altuna"
(sic), in which it offered to pay $1.3 million for the
same 36 locomotives described in the previous
purchase order provided that ten of the 12 SD40
locomotives had blue cards.[3] Document No. 52 p.
3; Document No. 52-2 pp. 17, 71. There was no
firm delivery date, although Plaintiff's representative
told Defendant that Plaintiff would "shoot for January
15, [2005]." Document No. 52-2 p. 49.
In November of 2004 Defendant offered to sell
WATCO, a start-up railroad company, the 10 blue-carded SD-40s for $140,000 each and the two
remaining SD-40s, which were to be used for parts,
for $25,000 apiece. Document No. 52 p. 3;
Document No. 52-2 p. 75. On January 13, 2005
Plaintiff mailed Defendant a bill of sale reflecting the
terms agreed upon in September, 2004, which was
then executed by Jamie Crowshaw, President of
PSS. Document No. 52 p. 4.
WATCO subsequently relaxed several of its
requirements, including that ten of the locomotives be
blue-carded, and insisted on a concomitant reduction
in Defendant's sale price to $120,000 apiece for six
locomotives and $100,000 apiece for four
locomotives for a new total of $1,170,000, later
reduced to $1,079, 238.80 to reflect various credits
unrelated to the sale of the locomotives. Id. On
February 6, 2005, after further negotiations between
Plaintiff and Defendant, Defendant sent Plaintiff in
Altoona "Purchase Order # 222258, Revision 1,"
which reduced the number of blue-carded
locomotives from ten to three and reduced the sale
price from $1,300,000 to $1,097,500. Id. at 5;
Document No. 52-2 pp. 87-88. The text of the
"Revision 1" order, although not the price, had been
"cut and pasted" from the WATCO invoice.
Document No. 52 p. 5.
On February 9, 2005, Defendant faxed Plaintiff
in Altoona "Purchase Order # 222258, Final
Revision," in which Plaintiff further reduced the final
purchase price to $1,073,315 to reflect Defendant's
provision of additional equipment to be used with the
locomotives and in compensation for Defendant's
claim that Plaintiff had not met an allegedly agreed-upon delivery deadline. Id.; Document No. 52-2 pp.
31-32, 91-92. WATCO paid Defendant in full on
February 11, 2005 and Crowshaw executed
Plaintiffs final Bills of Sale on February 14, 2005.[4]
Document No. 52 p. 5. Plaintiff avers that at the time
of delivery, all locomotives delivered to WATCO
"were in compliance with the requirements set forth
in the Final [Revision] Purchase Order." Id. at
6; Document No. 43-3 pp. 11-12.
Defendant subsequently sold all twenty-four of
the B23-7 locomotives for a total of $137,500. Id.
To date Defendant has paid Plaintiff $289,000.
Id. Plaintiff filed the instant action on March 13,
2006, pleading breach of contract and in the
alternative unjust enrichment and seeking recovery of
the remainder of the agreed-upon price. Document
No. 1. In its answer Defendant denied liability and
made counterclaims for breach of contract, justifiable
reliance, breach of express warranty, breach of
implied warranty of fitness for particular purpose,
and breach of implied warranty of merchantability.
Document No. 37, pp. 12-15. Plaintiff filed its
motion for summary judgment on October 24, 2007.
Document No. 51. Defendant has filed no response
The Parties' documents are silent as to choice of
law. This action is therefore governed by the United
Nations Convention on Contracts for the
International Sale of Goods (hereinafter CISG),
Delchi Carrier SpA v. Rotorex Corp., 71 F.3d
1024, 1027 n.1 (2d Cir. 1995) (citing CISG
art. 1); see also Chateau des Charmes Wines, Ltd.
v. Satiate USA, Inc., 328 F.3d 528, 530 (9th Cir.
2003) (noting that both the United States and
Canada are "contracting states to the C.I.S.G."), and
the Court has jurisdiction pursuant to 28 U.S.C. �
1331. (granting original jurisdiction over "all civil
actions arising under ... treaties of the United
States"). Since the amount in controversy exceeds $
75,000 and the Parties are "citizens of a State and
citizens or subjects of a foreign state," the Court also
has jurisdiction pursuant to 28 U.S.C. � 1332(a)(2).
Venue is proper pursuant to 28 U.S.C. �
1391(b)(2) since "a substantial part of the events or
omissions giving rise to the claim occurred" in the
Western District of Pennsylvania.
Summary judgment A "principal purpose[] of the summary judgment
rule is to isolate and dispose of factually unsupported
claims or defenses ... and it should be interpreted in
a way that allows it to accomplish [that] purpose."
Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106
S.Ct. 2548, 2553, 91 L.Ed.2d. 265, 275 (1986).
Fed. R. Civ. P. 56 must therefore "be construed with
due regard not only for the rights of persons
asserting claims ... that are adequately based in
fact -to have [them] tried to a jury, but also for the
rights of persons opposing such claims ... to
demonstrate ... prior to trial, that the claims . . have
no factual." Celotex, 477 U.S. at 327, 106 S.Ct at
2555, 91 L.Ed.2d at 276. Summary. judgment
"should be rendered if the pleadings, the discovery
and disclosure materials on file, and any affidavits
show that there is no genuine issue as to any material
fact and that the movant is entitled to judgment as a
matter of law." Fed. R. Civ. P. 56(c).
There is no issue of material fact "[w]here the
record taken as a whole could not lead a rational
trier of fact to find for the non-moving party,"
Matsushita Elec. Indus. Co., Ltd., v. Zenith Radio
Corp, 475 U.S. 574, 587, 106 S.Ct. 1348, 1356,
89 L.Ed.2d 538, 552 (1986) (citation omitted); see
also Anderson v. Liberty Lobby, Inc., 477 U.S.
242, 251-52, 106 S.Ct. 2505, 2512, 91 L.Ed.2d
202, 214 (1986), and summary judgment therefore
must be entered "against a party who fails to make a
showing sufficient to establish the existence of an
element essential to that party's case, and on which
that party will bear the burden of proof at trial."
Celotex, 477 U.S. at 322, 106 S.Ct. at 2552, 91
L.Ed.2d. at 273; see also J.E. Mamiye &
Sons, Inc. v. Fidelity Bank, 813 F.2d 610, 618 (3d
Cir. 1987) (holding that a "plaintiff will be out of
court if he has not adduced sufficient evidence to get
to a jury on every element of his case"). In deciding
a motion for summary judgment, the Court "must
view the facts in the light most favorable to the
nonmoving party and draw all inferences in that
party's favor." Farrell v. Planters Lifesavers Co.,
206 F.3d 271, 278 (3d Cir. 2000) (quoting
Armbruster v. Unisys Corp., 32 F.3d 768, 777
(3d Cir. 1994))
In order to meet its burden, the party moving for
summary judgment need not "produce evidence
showing the absence of a genuine issue of material
fact"; it can instead meet merely "point[] out ... that
there is an absence of evidence to support the
nonmoving party's case." Celotex, 477 U.S. at 325,
106 S.Ct. at 2554, 91 L.Ed.2d at 275. The burden
on the non-moving party is more substantial. Fed. R.
Civ. P. 56(e)(2) states it as follows:
When a motion for summary
judgment is properly made and
supported, an opposing party may not
rely merely on allegations or denials in
its own pleading; rather, its response
must -- by affidavits or as otherwise
provided in this rule -- set out
specific facts showing a genuine issue
for trial. If the opposing party does not
so respond, summary judgment should,
if appropriate, be entered against that
As noted above, Defendant has made no
response to Plaintiff's motion.
The contract a. Delivery
The Parties' agreement went through numerous
iterations prior to delivery of the locomotives and
equipment. Although not required by the CISG, see
CISG art. 29(1), each of these changes was
supported by consideration: when Defendant
required ten locomotives to be blue-carded Plaintiff's
price went up; when Defendant required that only
three locomotives be blue-carded Plaintiff's price
went down; when Defendant claimed that Plaintiff
was dilatory in its delivery Plaintiff further reduced its
It is apparent to the Court that each agreement
between the parties superseded the previous
agreement. See Valero Mktg. & Supply Co. v.
Greeni Oy, 242 Fed.Appx. 840, 844-45 (3d Cir.
2007) (finding permissible contract modification
under the CISG where a delivery date extension
accompanied by a price reduction was agreed to by
the parties). None of the agreements included a
written delivery date. Under the CISG, delivery is therefore to be "within a reasonable time after
the conclusion of the contract." CISG art. 33(c).
Defendant, based on Plaintiff's representation on
September 10, 2004, that Plaintiff would "shoot for
January 15th" as a delivery date, argues that
Plaintiff's failure to meet that deadline constituted a
breach of the Parties' agreement and therefore
Defendant owes Plaintiff nothing and, in fact,
Defendant is entitled to recover damages from
Plaintiff. Document No. 37 pp. 12-13; Document
No. 52-2 pp. 48-49.
Even assuming that the words "shoot for" could
create a binding obligation, Plaintiff's final purchase
order is dated February 6, 2005, over three weeks
after the alleged January 15, 2005 deadline. The
CISG requires delivery within a reasonable time
after the conclusion of the contract, not before. Since
the contract could not have been concluded before
the final purchase order was sent, Plaintiff could not
have breached by its failure to deliver on January 15,
Defendant has alleged that Plaintiff breached
both express warranties and the implied warranties
of fitness for a particular purpose and merchantability
and argues that it is therefore not only not liable for further payments to Plaintiff but that Plaintiff is
liable for damages to Defendant. Document No. 37
pp. 14-15. Whether Defendant's assertions are
treated as defenses or counterclaims, Defendant has
the burden of showing that the goods Plaintiff
delivered did not conform to the terms of the Parties'
agreement. See Chicago Prime Packers, Inc. v.
Northam Food Trading Co., 408 F.3d 894, 897-98 (7th Cir. 2005). Defendant argues that Plaintiff's
failure to tender ten blue-carded SD 40 locomotives,
as required by the September 10, 2004 purchase
order, was a breach of an express warranty.
Document No. 52-2 pp. 51-52. In so doing,
however, Defendant ignores the fact that in February
of 2005 it sent Plaintiff a superseding purchase order
that required that only three of the locomotives be
blue-carded, and that this modification of the prior
agreement was accompanied by a reduction in price
of over $200,000. Defendant has offered nothing to
controvert Plaintiff's assertion that three of the
locomotives were blue-carded upon delivery.
Defendant also claims that the "[l]ocomotives ...
required $100,000, U.S. dollars, in repairs
due to unit deficiencies as compared to the original
agreed upon specifications." Document No. 52-2 p.
54. Here, too, Defendant maintains that the original
specification included the superseded requirements
of the September, 2004 purchase order. Regardless
of the specifications involved, Defendant cannot
show that it was damaged by this alleged necessity,
as it admits that WATCO and not Defendant paid
for the repairs and that, at least as of June 14, 2007,
Defendant had not reimbursed WATCO.[5]
Document No. 52-2 pp. 54-56. Defendant has,
moreover, given no explanation as to the nature of
the claimed deficiencies or identified the particular
locomotives that allegedly required repair even
though by the terms of Defendant's final purchase
order four of the ten putatively operable SD40
locomotives, Road Numbers 1617, 1609, 1600 and
3179, were being purchased "complete with all
major components and ... as is where is." Document
No. 52-2 p. 91. Defendant understood "as is"
condition to be "it is what it is"; that "however [the
item] shows up on the day [of] delivery, that's it."
Document No. 52-2 p. 22. A sale in "as is"
condition suggests the possible necessity ] of
repair; it does not exclude it.
Defendant has offered no evidence, either before
or after Plaintiff's motion for summary judgment, that
would allow a rational trier of fact to conclude that it
was more likely than not that the repairs were not
done to (a) improve the condition of one or more of
the "as is" SD40s; (b) to obtain blue cards for any or
all of the seven non-blue-carded but putatively
operable SD40s described in the purchase order; or
(c) because, as suggested by Plaintiff, see Document
No. 43-3 p. 12, WATCO elected to perform
additional maintenance that was not within the scope
of the purchase order. Defendant's counterclaims
relating to the repairs must therefore fail. Indeed, the
information in the record regarding the alleged $
100,000 in repairs does not rise above the level of
"bare assertions, conclusory allegations, or
suspicions," and is therefore insufficient to "show the existence of a genuine issue [of material
fact]." McCabe v. Ernst & Young, LLP, 494 F.3d
418, 436-37 (3d Cir. 2006) (quoting Podobnik v.
U.S. Postal Serv., 409 F.3d 584, 594 (3d Cir.
2005)) (internal citations and quotation marks
Regarding the matter of implied warranties,
Plaintiff concedes that although the CISG does not
specifically include the implied warranties of fitness
and merchantability, CISG art. 35 may properly be
read to suggest them. Document No. 41 p. 6 & n.3.
The CISG also allows, however, for their disclaimer.
CISG art. 35(2); John Edward Murray, Jr., Murray
on Contracts � 100, at 633 (41, ed. 2001). The last
documents to be executed in the Parties' transaction
were Plaintiff's bills of sale, which were executed by
Defendant on February 14, 2005. They expressly
disclaimed all warranties except that of marketable
title to the enumerated items with the following
THE EQUIPMENT BEING SOLD ON AN "AS, WHERE IS" BASIS AND WITH ALL FAULTS. EXCEPT AS SET FORTH HEREIN, THE SELLER MAKES NO
WARRANTY, EITHER EXPRESS
OR IMPLIED, AS TO THE
IMPLIED WARRANTY OF
MERCHANTABILITY OR
PARTICULAR PURPOSE, AND
LIABLE FOR LOST PROFITS OR
FOR INDIRECT, INCIDENTAL
COMMERCIAL LOSSES OF ANY
Document No. 52-2 pp. 93, 95. The disclaimer was
on the second page of each of the two-page
documents, in capital letters as above, and in the
same font size as the rest of the text.
The validity of the disclaimer cannot be
determined by reference to the CISG itself. CISG
art 4(a). It is therefore necessary to turn to the
forum's choice of law rules. Geneva Pharm. Tech.
Corp. v. Barr Labs., 201 F.Supp.2d 236, 282-83
(S.D.N.Y. 2002) rev'd on other grounds, 386
F.3d 485 (2d Cir. 2004); see also Zapata
Hermanos Sucesores, S.A. v. Hearthside Baking
Co., Inc., 313 F.3d 385 390 (7th Cir. 2002) (using,
in a CISG case involving an Illinois firm, "choice of
law principles" to determine that the common law of
Illinois applied "to any issues ... not covered in
express terms by the Convention"); Pescatore v.
Pan Am. World Airways, Inc., 97 F.3d 1, 12-13
(2d Cir. 1996) (applying state choice of law rules to
an action brought under the Warsaw Convention).
Under Pennsylvania law, the first step in a choice
of laws analysis is to determine whether "there
is an actual or real conflict between the potentially
applicable laws." Hammersmith v. TIG Ins. Co.,
480 F.3d 220, 230 (3d Cir. 2007). Alberta law
allows disclaimer of implied terms as follows:
Where any right, duty or liability
would arise under a contract of sale by
implication of law, it may be negatived
or varied by express agreement or by
the course of dealing between the
parties or by usage if the usage is such
as to bind both parties to the contract.
R.S.A. 2000, c. S-2, s. 54. Pennsylvania law
requires that the disclaimer be "conspicuous" and, if
the warranty of merchantability is being disclaimed
or modified, the "mention" of the word
"merchantability." 13 Pa C.S.A. � 2316(b). Whether
a disclaimer is conspicuous is a question of law, to
be determined by "whether a reasonable person
against whom the modification or exclusion is to
operate ought to have noticed it." Hornberger v.
Gen. Motors Corp., 929 F.Supp. 884, 889 (E.D.
Pa. 1996) (citations omitted). Under Pennsylvania
law, factors to consider include: "(1) the placement
of the clause in the document; (2) the size of the
disclaimer's print; and (3) whether the disclaimer
was highlighted or called to the reader's
attention by being in all caps ...." Id. Expressions
such as "as is" or "with all faults" are approved by
statute as language of exclusion. 13 Pa C.S.A. �
2316(c)(1).
After examining the final, executed bills of sale,
Document No. 52-2 pp. 93-96, under the standards
set forth above, the Court finds the disclaimer to be
valid under either the laws of Pennsylvania or
Alberta. There is no conflict, and hence no need for
a conflict of laws analysis.[6] Hammersmith, 480
F.3d at 230.
There remains, however, the question of whether
the Final Revision of the purchase order, which does
not exclude any warranties for six of the SD 40
locomotives, or the final bill of sale, which
excludes implied warranties for all items, is the final
manifestation of the Parties' agreement. This battle of
the forms must be resolved by reference to CISG
art. 19, which reads as follows:
(1) A reply to an offer which
purports to be an acceptance but
contains additions, limitations or other
modifications is a rejection of the offer
and constitutes a counter- offer.
(2) However, a reply to an offer
which purports to be an acceptance
but contains additional or different
terms which do not materially alter the
terms of the offer constitutes an
acceptance, unless the offeror, without
undue delay, objects orally to the
discrepancy or dispatches a notice to
that effect. If he does not so object,
the terms of the contract are the terms
of the offer with the modifications
contained in the acceptance.
(3) Additional or different terms
relating, among other things, to the
price, payment, quality and quantity of
the goods, place and time of delivery,
extent of one party's liability to the
other or the settlement of disputes are
considered to alter the terms of the
offer materially.
Since the disclaimer in the bill of sale related to
both the quality of the goods and Plaintiff's
liability to Defendant, the Court finds that the bills of
sale materially altered the terms of the purchas e
order and that therefore the bills of sale constituted
a rejection its terms. The bills of sale instead
constituted a counter-offer by Plaintiff which
Defendant accepted by its execution of the bills of
sale on February 14, 2005. As such, the final
agreement between the parties included no implied
warranties of any sort.
Damages There is no outstanding issue of material fact in
this case. The Court finds as a matter of law that
Plaintiff fully performed the final iteration of the
Parties' agreement and is entitled to Defendant's full
performance in turn. Pursuant to CISG art. 74,
which is "designed to place the aggrieved party in as
good a position as if the other party had properly
performed the contract," Delchi, 71 F.3d at 1029
(citation omitted), Plaintiff is therefore due the
outstanding balance on the contract of $784,315.
Plaintiff is not, however, allowed attorneys' fees
under Article 74 or any other part of the CISG.
Zapata, 313 F.3d at 388-89.
CISG art. 78 entitles Plaintiff to prejudgment
interest, but the CISG is silent regarding
determination of the rate. Chicago Prime
Packers, Inc. v. Northam Food Trading Co., 320
F.Supp.2d 702, 715 (N.D. Ill. 2004). United States
case law provides little guidance. In Chicago Prime
Packers, the court focused on its diversity
jurisdiction, and applied Illinois' choice of law
principles, as it would have in any other diversity
case, to determine that the rate should be set by
Illinois law. Id. at 716 (citations omitted). By
contrast, Guang Dong Light Headgear Factory
Co., Ltd. v. ACIIntern., Inc., No. 03-4165-JAR,
2008 WL 1924948, 2008 U.S. Dist. LEXIS
35392, at * 14-15 (D. Kan. Apr. 28, 2008) treated
a dispute governed by the CISG as a federal
question and found that the calculation of pretrial
interest "rests firmly within the sound discretion of the
trial court." In Delchi Carrier, SpA v. Rotorex
Corp., No. 88-CV-1078, 1994 WL 495787, at *7,
1994 U.S. Dist. LEXIS 12820, at *17 (N.D.N.Y.,
Sept. 9, 1994), aff'd in part & rev'd in part by 71
F.3d 1024, the court, apparently employing the
same reasoning as in Guang Dong, used its
discretion to award prejudgment interest according
to the post judgment rate set by 28 U.S.C. �
1961(a). The Second Circuit affirmed the award of
interest without comment. Delchi, 71 F.3d at
This Court will treat the instant dispute as a
federal question, which it indisputably is, and apply
its "broad discretion" to set a rate of prejudgment
interest sufficient to compensate Plaintiff "for the true
costs of [the] money damages incurred. . .."
Skretvedt v. E.I. DuPont De Nemours, 372 F.3d
193, 208 (3d Cir. 2004) (citing Sun Ship, Inc. v.
Matson Navigation Co., 785 F.2d 59, 63 (3d Cir.
1986); Ambromovage v. United Mine Workers
ofAm., 726 F.2d 972, 981-82 (3d Cir. 1984)). The
Court finds that interest at the rate of 6 per cent per
annum from the date of breach will be sufficient.[7] So
far as the Court can determine, Defendant breached
on April 20, 2005, see Document No. 52-2 p. 103,
and interest will accrue from that day until entry of
Upon entry of judgment, pursuant to 28 U.S.C.
� 1961(a) interest shall accrue "at a rate equal
to the weekly average 1-year constant maturity
Treasury yield, as published by the Board of
Governors of the Federal Reserve System, for the
calendar week preceding" the date of judgment. In
the case sub judice that rate is 2.21 per cent per
annum. Board of Governors of the Federal Reserve System, <http://www.federalreserve.gov/releases/h15/data/Weekly_Friday_/H15_TCMNOMY1.txt> (scroll down to 07/18/2008) (last visited July 22,
CONCLUSION For the reasons given above, Plaintiff's motion
for summary judgment will be granted and
Defendant's counterclaims dismissed. Damages will
be awarded Plaintiff in the amount of $784,315 plus
interest at 6 per cent per annum from April 20, 2005
until entry of judgment. Interest at the rate of 2.21
per cent per annum, compounded annually, shall
accrue on the total amount of damages from entry of
judgment until the judgment is paid. An appropriate
ORDER AND NOW, this 25'h day of July, 2008, the
Court having considered Plaintiffs Motion for
Summary Judgment, (Document No. 51), it is
HEREBY ORDERED that the motion is
Judgment shall be entered in favor
of Plaintiff in the amount of $
937,997.76, consisting of $
784,315.00, the amount due on the
Parties' contract, and $153,682.76 in
interest at 6 per cent per annum from
April 20, 2005, the date of breach, to
July 25, 2008, the date of entry of
Interest on the amount of the
judgment shall accrue at the rate of
2.21 per cent per annum, compounded
annually, from July 25, 2008, the date
of entry of judgment, until the judgment
Defendant's counterclaims for
breach of contract (Count I), justifiable
reliance (Count II), breach of express
warranty (Count III), breach of implied
warranty of fitness for particular
purpose (Count IV), and breach of
(Count V) are DISMISSED with
Plaintiff's Motion to Dismiss
Counts II, IV, and V of Defendant's
Counterclaims, (Document No. 40), is
1. All prices are in U.S. dollars.
2. The term "blue card" refers to the Federal Railroad Administration's Form FRA
6180-49A, which documents various
inspections and tests performed on the
locomotives. Document No. 52 p.2. A
locomotive must have a blue card before it
may legally be used to haul freight. Document
No. 52-2 pp. 15, 69-70.
3. The other two SD40s were to be used to
"help rebuild" the ten locomotives to be blue-carded. Document No. 52-2 p. 20.
4. One bill of sale was for the locomotives
only and a second was for ancillary
equipment that was part of the same
transaction. Document No. 55-2 pp. 93-96.
5. Had Defendant reimbursed WATCO at a
later date, it could have supplied that
information in a response to Plaintiff's motion
for summary judgment. Instead, Defendant
chose to make no response at all, and the
Court must therefore decide the motion on
the basis of the unsupplemented record
6. The Court is aware that the disclaimer also
repudiates any express warranties not
otherwise set forth in the bill of sale.
However, since Alberta's Sale of Goods
Act,. R.S.A. 2000, c. S-2 et seq., does not
address the disclaimer of express warranties,
and since the issue of express warranties
could be resolved without reference to the
disclaimer, the Court has elected to avoid the
further forays into Canadian law necessary to
determine whether there is a conflict of law
regarding the validity of the bill of sale's
disclaimer of express warranties.
7. This is, coincidentally, the default rate of
interest under Pennsylvania law. 41 P.S. �
202. The Court notes that "[u]sing the forum's
interest rate is a common choice in CISG
cases ...." Chicago Prime Packers, 320
F.Supp.2d at 716 (citing Tom McNamara,
U.N. Sale of Goods Convention: Finally
Coming of Age?, 32-FEB Colo. Law. 11,
19 (Feb. 2003)).