K & M Joint Venture V. Smith International Inc‪.‬

In this diversity action the district court awarded damages of $1,492,230 to an Ohio purchaser of equipment from a California seller for breach of an implied warranty of merchantability. The plaintiff-appellee is K & M Joint Venture (K&M) which was formed for the purpose of bidding on a sewer project of the City of Cleveland. After being awarded the contract for the project a principal of K&M contacted an officer of the Calweld Division of defendant-appellant Smith International, Inc. (Calweld) by telephone to learn if he knew of a 12-foot diameter tunnel boring machine (TBM) which K&M might buy for the Cleveland project. K&M eventually bought a 12-foot TBM from Calweld and this lawsuit resulted from that transaction.