## Facts

- The City of Bedford, Virginia contracted in 1967–1968 for James Leffel & Co. to design, manufacture, and install replacement hydroelectric turbines in two generator units at the City’s plant.
- Installation was completed in April 1969.
- After being placed in service, the Unit 2 turbine performed unsatisfactorily; in November 1972 the City discovered the Unit 3 turbine was physically deteriorating.
- From the onset of the problems until March 1975, Leffel recommended remedial measures and participated in repair efforts that did not resolve the defects.
- On August 25, 1974, the City sued in federal court (diversity), alleging breach of contract and breach of implied warranties of merchantability and fitness under Virginia’s U.C.C.

## Issues

1. Whether the City’s contract and warranty claims were barred by Virginia U.C.C. § 8.2-725’s four-year limitations period measured from tender of delivery in 1969.
2. Whether Leffel’s post-delivery repair efforts and related representations could toll the limitations period or equitably estop Leffel from asserting the statute of limitations under § 8.2-725(4).

## Decision

- The court agreed that § 8.2-725 applied and that, absent tolling or estoppel, accrual occurred at tender of delivery and the limitations period would have expired before the City filed suit.
- The court held the district court erred in granting summary judgment because the record raised genuine issues of material fact on tolling and equitable estoppel based on Leffel’s post-installation conduct.
- The court vacated the summary judgment and remanded for further proceedings focused on the tolling/estoppel questions.

## Legal Principles

- Under Virginia U.C.C. § 8.2-725(2), breach of warranty generally occurs at tender of delivery, regardless of the buyer’s lack of knowledge.
- The “future performance” discovery rule applies only when a warranty explicitly extends to future performance; otherwise, tender controls accrual.
- Virginia U.C.C. § 8.2-725(4) preserves state-law doctrines of tolling and equitable estoppel; a defendant may be estopped from asserting limitations if its words or conduct reasonably induced the plaintiff to delay filing.
- A seller’s continued repair efforts and assurances, without notice of an intent to rely on limitations, can support estoppel when the buyer reasonably relies and allows the period to run.
- Because tolling and estoppel turn on fact-specific questions of representations and reasonable reliance, summary judgment is improper where the record shows a genuine dispute on those points.

## Conclusion

The Fourth Circuit treated the turbine transaction as a U.C.C. sale governed by a four-year limitations period running from tender of delivery, but it vacated summary judgment because evidence of the seller’s repair efforts and assurances created factual disputes over tolling and equitable estoppel that required resolution on a fuller record.


City of Bedford v. James Leffel & Co., 558 F.2d 216 (4th Cir. 1977)