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Lane Enterprises, Inc. v. L.B. Foster Co.

Superior Court of Pennsylvania
700 A.2d 465 (1997)


Facts

L.B. Foster Co. (Foster) (defendant) was to manufacture and supply steel components for the construction of a bridge in Ohio. Foster entered into an agreement with Lane Enterprises, Inc. (Lane) (plaintiff) for Lane to clean and coat the bridge components for Foster in two separate orders. The agreement was confirmed by Foster’s purchase order, which also specified that the coating must meet the standards of and gain approval from the applicable state department. After Lane completed its first coating process, the state inspector found contaminants under the coating but allowed shipment pending approval and re-application of the coating. Lane informed Foster of the contaminants and inquired whether Lane should begin on the second order or whether Foster would be hiring a different company for the second order. Lane then re-coated and delivered the parts, but the state inspector again found contaminants on the parts and informed Lane that the coating procedure did not meet the state's standards for approval. The state department rejected the parts but indicated that it would accept the parts if Lane performed field repairs. Foster sent Lane a letter indicating that it would withhold payment until the corrections were made. The bridge company subcontracted with another company to perform the field repairs at Lane's expense, and the parts were then presumably approved by the state department. Lane requested payment from Foster. Foster sent a letter to Lane asking whether it intended to perform the coating under the second order. Foster also informed Lane that it would not pay under the first order unless Lane assured that it would commit to performing the second order. Lane responded that it would not commit to the second order until it was paid for the first order. Foster sent a second request for assurances, and Lane again responded that it would not commit until Foster paid for the first order. Foster eventually hired another company to complete the coating under the second order. Foster initiated an action against Lane, and Lane also filed suit. The trial court consolidated the actions. After a bench trial, the court found in Lane’s favor and awarded it the outstanding amount for the first order. Foster appealed.

Rule of Law

Issue

Holding and Reasoning (Cirillo, J.)

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