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Nucor Corp. v. General Electric Co.5/9/1991
This is a complex case with an even more complex history. On July 13, 1977, a warehouse roof at General Electric Company's Appliance Park in Louisville, Ky., partially collapsed causing substantial damage to the warehouse and numerous appliances stored in the warehouse. In August, less than a month later, another partial roof collapse occurred to the same warehouse resulting in further damage. Both failures occurred because the joist girders, or trusses, manufactured by Nucor Corporation and intended to support the roof, failed to do so. Through an error in the manufacturing process, the trusses were fabricated to only one half the design strength required by the specifications.
General Electric had employed Garst-Receveur Construction Company as principal contractor to construct the warehouse. Garst-Receveur entered into a purchase order contract with Harman & Conway, Inc., the manufacturer's representative for Nucor in the Louisville area, which required Harman & Conway to furnish "all steel joint and joist girders" for the roof support system. Harman & Conway then entered a standard purchase order with Nucor.
General Electric filed suit in February 1979, naming Nucor, Garst-Receveur, and Harman & Conway as defendants. The Complaint alleged theories of liability in negligence, breach of warranty and strict liability in tort for a defective product. All these alternative theories were based on a single premise: General Electric had contracted for the construction of the warehouse with Garst-Receveur who used defective joist girders manufactured by Nucor and supplied by Harman & Conway.
At the close of the proof, Nucor moved to dismiss General Electric's breach of warranty claim as barred by the Uniform Commercial Code statute of limitations, KRS 355.2-725, which requires suit "commenced within four (4) years after the cause of action has accrued." KRS 355.2-725(2) further specifies the "cause of action accrues when the breach occurs, regardless of the aggrieved party's lack of knowledge of the breach." This meant limitations had run on General Electric's breach of warranty claim at the time of substantial completion of the structure, which was more than five years before suit was filed. Nucor had failed to perform according to the written contract specifications for the joist girders and this contract and its breach were part of the evidence.
The joist girders admittedly failed to meet specifications and were defective; who was responsible for the loss and the amount of damages were in dispute until conclusion of the trial in January of 1987. At the close of the evidence the trial court: (1) dismissed the breach of warranty claims because the statute of limitations had run before suit was filed, but then permitted General Electric to amend to a breach of contract based on the same evidence; and then (2) directed a verdict for General Electric against Nucor, Garst-Receveur and Harman & Conway on the products liability theory and also (3) entered a directed verdict against Garst-Receveur for breach of contract. Later, the final judgment provided that Garst-Receveur and Harman & Conway were each entitled to indemnity against Nucor for the products liability recovery, but, as we will discuss, it is not clear whether it provided for indemnity for the separate judgment awarded for breach of contract.
The trial court decided there was a factual issue as to whether and to what extent General Electric was at fault and should share responsibility for the damages occasioned by the second roof collapse. This issue was submitted to the jury to decide based on findings of "actual knowledge as to t
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