Forward Industries, Inc. v. Rolm of New York Corp.

Forward Industries, Inc. v. Rolm of New York Corp.

Opinion

 [*374]   [**453]  In an action, inter alia, to recover damages for breach of contract, the defendant appeals from an order of the Supreme Court, Kings County (Aronin, J.), dated September 12, 1985, which denied its motion for summary judgment dismissing the complaint.

Order affirmed, with costs.

The plaintiff, a mail-order company dependent upon telephone service for its sales, entered into an equipment purchase agreement with the defendant, wherein the defendant agreed to deliver and install new telephone equipment on the plaintiff's premises for the total purchase price of $ 90,038. The contract imposed an affirmative duty upon the defendant to "use its best efforts to complete the installation by May 18, 1984, which is the intended Cutover Date" (emphasis supplied). The latter term is defined as "the date on which the customer [the plaintiff] is notified in writing by Rolm that the equipment is installed and is functioning so as to be substantially providing the basic service for which the equipment is intended" (emphasis supplied). According to the verified complaint, the connection of the [***2]  new equipment to incoming or tie-in telephone lines was to occur over "the weekend of May 18-20, 1984" in order to minimize the risk of a  [**454]  disruption of telephone service during this aspect of the installation. American Telephone and Telegraph Company and New York Telephone are assertedly responsible for providing service on the incoming telephone lines. The defendant's representative allegedly assured the plaintiff that the new equipment would be operational by Monday morning, May 21, 1984. However, the equipment was not operational on that date and service was not restored until June 25, 1984. Thereafter, the plaintiff commenced this action against the defendant to recover damages due to the deprivation of telephone service under several theories, including breach of contract, negligence, breach of warranty, and fraud.

The defendant alleges that the delay in the cutover (the date the equipment is installed and functioning), which resulted in a disruption of service, was due to circumstances  [*375]  beyond its control, i.e., the telephone companies' failure to provide operational incoming "WATS" lines. According to the defendant's operational manager, the disruption [***3]  of service was due to the telephone companies' unorthodox linking of "WATS" and "Centrex" lines so that when New York Telephone disconnected the Centrex lines to allow the defendant to install the new equipment, the WATS lines also went dead. The source of the problem was not discovered until a week later, by an engineer at New York Telephone. The plaintiff alleges that if the defendant had exercised reasonable care in conducting an investigation beforehand, rather than after the fact, it would have discovered the problem and could have coordinated its installation work with the telephone companies' work in changing the existing hookup to accommodate the new equipment. Thus, a question of fact exists as to whether the cause was due to the defendant's negligence or breach of its affirmative duty to use its best efforts to install a functioning system by the intended cutover date or was due to circumstances beyond the defendant's control.

Full case includes Shepard's, Headnotes, Legal Analytics from Lex Machina, and more.