U.S. Nonwovens Corp. v. Pack Line Corp.

U.S. Nonwovens Corporation (Nonwovens) (plaintiff) contracted with Pack Line Corporation and Nuspark Engineering, Inc. (Nuspark) (defendants) to purchase a machine. The contract required the installation of the machine into Nonwovens’s facility. The machine was delivered to Nonwovens in December 2009; installation was completed in August 2010. According to Nonwovens, Pack Line discovered that the machine was defective upon completing installation. Nonwovens further asserted that it immediately complained about the defective machine to both Pack Line and Nuspark. Nonwovens sued Pack Line and Nuspark, asserting claims under New York law for breach of contract, breach of express and implied warranties, and unjust enrichment. Nonwovens did not assert claims under the United Nations Convention on Contracts for the International Sale of Goods (CISG). Nuspark moved to dismiss Nonwovens’s complaint, arguing that (1) Nonwovens’s state-law claims were preempted by the CISG, (2) the CISG barred Nonwovens’s claims because Nonwovens did not plead that it notified Nuspark about the machine’s alleged defects before suing, and (3) Nonwovens’s contract claims were barred by the statute of limitations because the statute commenced when the machine was delivered in December 2009. Nonwovens conceded that the CISG applied and preempted New York law but argued that it adequately pleaded its contract claims under New York law and the Uniform Commercial Code (UCC) and that the CISG’s substantive requirements for such claims were substantively the same. Nonwovens further contended that it adequately pleaded that it notified Nuspark about the machine’s defects because its complaint alleged that it notified Nuspark and Pack Line about the defects immediately after delivery and that its contract claims were timely because the limitations clock did not commence until the machine was fully installed in August 2010.