## Facts

- Kingston Pipe Industries, Inc. sold prefabricated sprinkler pipe to Champlain Sprinkler, Inc. for installation at a state facility; Bruce Pelkey was Champlain’s president.
- Champlain accepted delivery of the custom pipe but did not pay the contract price.
- Champlain asserted the pipe was nonconforming, including incorrect cuts, improper threads, and misplaced hanger holes, requiring substantial field rework.
- Champlain claimed Kingston’s representative authorized Champlain to perform necessary repairs and submit an itemized bill for the added work.
- Champlain submitted an itemized statement of repair/modification costs it claimed offset (and exceeded) the purchase price.
- Kingston refused to credit the claimed costs and sued for the full price plus attorney’s fees and costs.

## Issues

1. Whether summary judgment for the seller was proper when the buyer produced evidence of defects and repair costs allegedly offsetting the price.
2. Whether a buyer who accepts goods under UCC § 2-607 may still pursue breach-of-warranty/nonconformity damages as a setoff or counterclaim after giving notice.
3. Whether Champlain’s affirmative defenses, statements in the trustee-process hearing, and supporting affidavits were sufficient notice and procedure to raise an offset and defeat summary judgment.

## Decision

- The Vermont Supreme Court reversed the grant of summary judgment to Kingston and remanded.
- The court held that Champlain’s evidence created genuine disputes over breach of express or implied warranties, causation, and damages.
- The court rejected the view that acceptance under UCC § 2-607 required payment of the full price without regard to the buyer’s damages for nonconformity.
- The court held Champlain’s pleadings and submissions were sufficient under notice pleading to present an offset theory at the summary-judgment stage.

## Legal Principles

- On summary judgment, the court must view supported opposing allegations as true and draw reasonable inferences for the nonmoving party; judgment is proper only if no material fact dispute exists and the movant is entitled to judgment as a matter of law.
- A buyer’s acceptance of goods triggers an obligation to pay the contract price under UCC § 2-607, but acceptance does not eliminate remedies for nonconforming goods.
- A buyer who accepts nonconforming goods may recover damages for breach of warranty or nonconformity, including by setoff, if the buyer gives required notice and adequately raises the claim.
- Under Vermont notice-pleading rules, defenses asserting defective materials/failure of consideration, coupled with record statements and evidentiary submissions describing the claimed repair costs, can sufficiently put the seller on notice of an offset claim and preclude summary judgment.

## Conclusion

The court held that Champlain’s evidence of defects and repair expenses, together with its asserted defenses and supporting materials, raised triable disputes over warranty breach and damages; acceptance did not bar setoff, so awarding the seller the full contract price on summary judgment was error.


Kingston Pipe Indus., Inc. v. Champlain Sprinkler, Inc., 857 A.2d 767 (Vt. 2004)