Haley v. Kolbe & Kolbe Millwork Co.

• Decision Date: 11 July 2017
• Docket Number: No. 16-3192,16-3192
• Citation: 863 F.3d 600
• Parties: Mary HALEY, et al., Plaintiffs-Appellants, v. KOLBE & KOLBE MILLWORK CO., Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

863 F.3d 600

Mary HALEY, et al., Plaintiffs-Appellants,

v.KOLBE & KOLBE MILLWORK CO., Defendant-Appellee.

No. 16-3192

United States Court of Appeals, Seventh Circuit.

Argued March 28, 2017

Decided July 11, 2017

Kent I. Carnell, Attorney, Lawton & Cates SC, Madison, WI, Michael J. Flannery, Attorney, Cuneo Gilbert & Laduca, LLP, St. Louis, MO, Susana Cruz Hodge, Joseph DePalma, Attorneys, Lite DePalma Greenberg, LLC, Newark, NJ, Katherine W. Van Dyck, Esq., Attorney, Cuneo, Gilbert & Laduca, LLP, Washington, DC, for Plaintiffs–Appellants.

Gordon Davenport, III, Matthew R. Lynch, Megan R. Stelljes, Attorneys, Foley & Lardner LLP, Madison, WI, Susan G. Schellinger, Attorney, Davis & Kuelthau, Milwaukee, WI, for Defendant–Appellee.

Before Flaum, Kanne, and Hamilton, Circuit Judges.

Flaum, Circuit Judge.

Seven pairs of spouses and one individual filed this putative class action against Kolbe & Kolbe Millwork Company, alleging that Kolbe sold them defective windows that leak and rot. Plaintiffs brought common-law and statutory claims for breach of express and implied warranties, negligent design and manufacturing of the windows, negligent or fraudulent misrepresentations as to the condition of the windows, and unjust enrichment. The district court granted partial summary judgment in Kolbe's favor on a number of claims, eventually excluded plaintiffs' experts and denied class certification, and ultimately found that plaintiffs' individual claims likewise could not survive without expert support. We affirm.

I. Background

A. Factual Background

Kolbe is a Wisconsin corporation that designs, manufactures, and sells windows. Plaintiffs-appellants live in Michigan (Mary and Michael Haley, and Terrance and Jean McIver), Florida (Leslie and Hal Banks), Pennsylvania (Annie and Brian Buinewicz, and Susan and Christina Senyk), Ohio (Matthew and Renee Deller), New Hampshire (Patricia Groome and Gary Samuels), and Wisconsin (Marie Lohr); and all had Kolbe windows installed in their homes at different times since 1997.

Also since 1997, Kolbe has issued at least seven different versions of a written window warranty.¹ In addition, certain of the plaintiffs-appellants' Kolbe windows were finished with an optional exterior paint, known as the "K-Kron system," that came with its own warranty. Kolbe has issued at least six different versions of the K-Kron warranty.²

All plaintiffs-appellants experienced one or more problems with some of their windows, including leaking, warping, rotting, or cracking or peeling

paint. Kolbe's responses to plaintiffs' problems varied, ranging from doing nothing (e.g. , with respect to the Haleys and the Senyks) to making recommendations on maintenance and care (e.g. , to the Bankses, the McIvers, the Dellers, Groome and Samuels, and Lohr) to replacing a number of window sashes—that is, the movable panels that form the frame holding the glass pane(s)—(e.g. , for the Bankses, the Buinewiczes, the Dellers, and Lohr). All of the plaintiffs-appellants eventually concluded that Kolbe would not honor its written warranties.

B. Procedural Background

1. Amended Complaint

Plaintiffs-appellants filed this putative class action against Kolbe in February of 2014. Their amended complaint alleged numerous causes of action:

• Breach of express warranties, including Kolbe's written warranties stating that the windows would remain free from defects ("no-defect" written-warranty claims) and that Kolbe would repair, replace, or refund the price of defective windows ("failure-to-honor" written-warranty claims), as well as other warranties allegedly stemming from statements in Kolbe advertising (advertising-warranty claims);

• Breach of implied warranty of merchantability and implied warranty that windows were fit "for their intended use";

• Negligent misrepresentation;

• Negligence;

• Unjust enrichment;

• Violations of Wisconsin's Deceptive Trade Practices Act ("WDTPA"), Wis. Stat. § 100.18 ; and

• Violations of Wisconsin's Home Improvement Practices Act ("HIPA"), Wis. Admin. Code ATCP § 110.

All plaintiffs except Samuels and Groome later voluntarily dismissed their WDTPA claims, and the district court granted Kolbe's motion to dismiss the HIPA claims. The remaining claims were all premised on the allegation that Kolbe windows had common design defects that caused them to rot prematurely.³

2. Partial Summary Judgment

In February 2015, Kolbe moved for partial summary judgment, arguing that a number of plaintiffs' claims were barred by the applicable statutes of limitations and the economic loss doctrine, and that plaintiffs had failed to establish the elements of some of their claims. Plaintiffs challenged Kolbe's statute-of-limitations arguments with respect to their express-warranty and fraudulent-misrepresentation claims, but did not respond as to their claims of breach of implied warranty for six sets of plaintiffs, or to any of the claims for negligence, negligent misrepresentation, or unjust enrichment.

In June 2015, the district court granted summary judgment with respect to the following claims:

• The Buinewicz plaintiffs' express-warranty claims (both "no-defect" and "failure-to-honor"), because the Buinewiczes had first discovered rot in their windows in 2003—six years after the one-year warranty period had ended;

• The McIver plaintiffs' "no-defect" express-warranty claim, because it was barred under the applicable four-year statute of limitations, and the McIvers had not developed arguments justifying the claim's survival;

• All plaintiffs' advertising-warranty claims, because some were barred by the statute of limitations and the remaining ones (for the Haleys and Samuels and Groome) involved statements that were mere puffery or otherwise too vague to support such a claim;

• The Banks, Buinewicz, McIver, Senyk, Deller, and Lohr plaintiffs' implied- warranty claims, both because plaintiffs had abandoned the claims by failing to identify the factual bases, and because the claims were barred under the relevant statute of limitations;

• The Samuels and Groome plaintiffs' fraudulent-misrepresentation claim, because both had testified that their builder had offered only Kolbe windows and that this fact had not influenced their decision to buy their home through that builder; and

• All plaintiffs' negligence, negligent-misrepresentation, and unjust-enrichment claims, because plaintiffs had waived the claims by failing to respond to Kolbe's arguments in its motion for summary judgment.

On October 21, 2015, Groome and Samuels moved for reconsideration of the grant of summary judgment on their fraudulent-misrepresentation claim.⁴ They asserted that they had newly discovered evidence (a 2005 Kolbe email, which plaintiffs had received three months prior to the district court's summary judgment decision) showing that Kolbe had made false representations in its product literature and labeling related to, inter alia , the company's compliance with manufacturing standards and building codes, and its methods for certifying its windows (i.e. , testing only certain "ringer" windows to pass certification).

In November 2015, the district court denied the motion for reconsideration, finding that plaintiffs had still failed to identify the particular representations that they believed Kolbe had made to any member of the public concerning these issues and had not explained how any alleged misrepresentation or false statement had caused pecuniary loss to Groome and Samuels, as the fact that their builder had offered only Kolbe windows had not influenced their decision to buy their home.

3. Discovery Dispute

Meanwhile, by March 2015, when Kolbe's motion for partial summary judgment was still pending, Kolbe had completed rolling productions of eleven of fourteen categories of documents, and had partially completed the other three. In August 2015, plaintiffs moved to reopen discovery and impose sanctions, claiming that Kolbe had "engaged in sandbagging throughout the discovery process, producing prodigious amounts of discovery at disadvantageous times for plaintiffs, dragging its feet on production of discoverable information and generally not cooperating." Kolbe responded that it had "cooperated from the beginning in the production of discovery, but was thwarted by plaintiffs' refusal to narrow their discovery demands."

In a November 2015 text order, the magistrate judge denied plaintiffs' motion to reopen discovery and for sanctions; and, in a February 2016 opinion and order, the district judge found that the record supported Kolbe's view of the discovery disputes and declined to reverse the magistrate judge's decisions. The district judge noted that although the magistrate judge had "told plaintiffs several times to narrow and prioritize their discovery requests ... and [had] suggested ways in which they could do so[,] plaintiffs [had] failed to hone their requests so that the electronic searches of [Kolbe's] electronically stored records would produce more relevant information, as well as take less time." She also observed that Kolbe had sought plaintiffs' agreement about the size, scope, and pace of the production, and had kept them informed of its progress at each stage. Finally, she noted that although plaintiffs complained about Kolbe's "late" disclosure of its experts, Kolbe had in fact produced its expert reports on the day to which plaintiffs had agreed.

In the same order, the district court granted Kolbe's motion to strike a declaration by Joel Wolf, one of plaintiffs' expert witnesses. By way of background: Plaintiffs had agreed to an extended deadline for expert disclosures and had produced on the due date the joint expert report of Wolf and Haskell Beckham. Wolf and Beckham had opined that several design features worked together to cause decay: (1) an inadequate sill slope; (2) an inadequate gap between the sill frame and the bottom of the sash; (3) a weatherstrip gasket on the bottom of the sash that had trapped water on the sill; (4) an exposed wood surface...