T & S Brass & Bronze Works, Inc. v. Pic-Air, Inc.

Pic-Air Inc. (defendant) produced faucet handles for T & S Brass & Bronze Works, Inc. (Brass) (plaintiff). To facilitate this, Pic-Air took possession of Brass’s tooling and kept it while fulfilling purchase orders. In February 1983, Brass purchased a large number of faucet handles, which were to be delivered in four installments. Brass notified Pic-Air that a large portion of handles in the third installment were scratched and requested return of the tooling. Pic-Air representatives inspected the handles at Brass’s facility, at which time Brass offered to sort through the handles at Pic-Air’s expense or, alternatively, to allow Pic-Air employees to do the sorting. Brass again demanded return of its tooling. Pic-Air informed Brass that the scratches did not warrant rejection and that it was not authorizing Brass to sort through the handles. Pic-Air asked Brass to return the handles that it thought were defective, but Pic-Air did not acknowledge that any of the handles were defective or offer to pay for the sorting costs. Brass declined this offer. Pic-Air eventually proposed that it would determine whether certain handles were defective and replace any that it deemed so. Neither the handles nor the tooling were ever returned. Brass filed an action for conversion against Pic-Air, and Pic-Air counterclaimed for the contract price of the three unpaid installments and the fourth installment that was never shipped. A magistrate found against Pic-Air on the conversion claim and against Brass for its failure to pay for the three shipped installments, with offsets for the costs of the defective handles and the sorting. Pic-Air appealed, arguing that Brass’s failure to return the handles constituted waiver and acceptance, thereby precluding an offset of the costs in the judgment against Brass.