Sheldon v. Kimberly-Clark Corp., 62 N.Y.2d 984 (1984)

A party must plead all matters which, if not pleaded, would likely surprise the adverse party or raise factual issues not appearing on the face of a prior pleading; failure to do so results in a waiver of the defense.

Summary

A bean farmer, Sheldon, sued Kimberly-Clark for breach of contract related to defective seed. Kimberly-Clark counterclaimed for the balance due on the seed. Sheldon attempted to introduce evidence of the seed’s inferior quality and his attempt to reject it, despite not pleading these issues in his reply. The court directed a verdict for Kimberly-Clark on its counterclaim. The Court of Appeals held that Sheldon waived the defense of breach of warranty by failing to plead it, even though Kimberly-Clark was aware of Sheldon’s complaints about the seed’s quality, because the unpleaded allegations raised new factual issues.

Facts

Sheldon, a bean farmer, contracted to purchase “foundation seed” from Kimberly-Clark in 1981 for delivery in spring 1982, tendering a $5,000 deposit.

In spring 1982, Kimberly-Clark informed Sheldon they couldn’t deliver the “foundation seed” but offered “registered seed” at a reduced price, which Sheldon accepted.

Sheldon picked up the “registered seed” and allegedly discovered it was defective, attempting unsuccessfully to return it.

Procedural History

Sheldon sued Kimberly-Clark for breach of contract, seeking damages for loss of customer goodwill.

Kimberly-Clark counterclaimed for $9,500, the balance due on the “registered seed.”

Sheldon replied with a general denial.

At trial, Sheldon offered proof of the seed’s inferior quality and attempted rejection, which weren’t pleaded.

The trial court dismissed Sheldon’s complaint and directed a verdict for Kimberly-Clark on its counterclaim, denying Sheldon’s motion to amend the pleadings.

The Appellate Division modified, reversing the verdict on the counterclaim, but otherwise affirmed the dismissal of the complaint.

The Court of Appeals reversed the Appellate Division’s order regarding the counterclaim and reinstated the Supreme Court’s judgment.

Issue(s)

Whether the offer of proof was sufficient to raise a defense as to the quality of the seed and the attempted rejection where these claims were not otherwise raised in the pleadings.

Holding

No, because the failure to plead these matters results in a waiver which entitles the defendant to summary judgment on its counterclaim.

Court’s Reasoning

CPLR 3018(b) requires a party to plead matters that would surprise the adverse party or raise new factual issues.

While Kimberly-Clark knew about Sheldon’s complaints, the allegations of inferior quality and attempted rejection raised new factual issues not in the pleadings.

The Court cited Surlak v. Surlak, 95 A.D.2d 371, stating that failing to plead these matters results in a waiver.

Sheldon’s general denial was insufficient because it only puts in issue matters Kimberly-Clark had to prove on its counterclaim. The court referenced Hoffstaedter v. Carlton Auto Supplies Co., 203 App. Div. 494, 496 to support this principle.

The court reasoned that permitting Sheldon to introduce these unpleaded defenses would unfairly prejudice Kimberly-Clark by requiring them to defend against claims they were not properly notified of.

This case highlights the importance of proper pleading in litigation. Failing to raise affirmative defenses in the pleadings can result in the waiver of those defenses, even if the opposing party is aware of the underlying facts. The decision reinforces the purpose of pleading requirements, which is to provide notice to the opposing party of the claims and defenses that will be litigated, preventing surprise and ensuring a fair opportunity to respond.