Keiper, LLC v. Intier Automotive Inc., 031312 FED6, 10-1486

Docket Nº:10-1486
Opinion Judge:PER CURIAM.
Party Name:KEIPER, LLC, Plaintiff-Appellant, v. INTIER AUTOMOTIVE INC., d/b/a INNOVATECH SEATING SYSTEMS, Defendant-Appellee.
Judge Panel:BEFORE: BOGGS and WHITE, Circuit Judges; BERTELSMAN, District Judge.
Case Date:March 13, 2012
Court:United States Courts of Appeals, Court of Appeals for the Sixth Circuit
 
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KEIPER, LLC, Plaintiff-Appellant,

v.

INTIER AUTOMOTIVE INC., d/b/a INNOVATECH SEATING SYSTEMS, Defendant-Appellee.

No. 10-1486

United States Court of Appeals, Sixth Circuit

March 13, 2012

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION

ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF MICHIGAN.

BEFORE: BOGGS and WHITE, Circuit Judges; BERTELSMAN, District Judge.[*]

OPINION

PER CURIAM.

Plaintiff-Appellant Keiper, LLC ("Keiper") appeals the district court's grant of summary judgment to defendant on plaintiff's claims for breach of contract and declaratory judgment.

We conclude that the district court improperly allocated the burden of proof at the summary judgment stage and, further, that genuine issues of material fact exist. We, therefore, REVERSE AND REMAND.

I.

A. Keiper and Intier Contract for Seat Recliner Systems

1. Terms and Conditions

Defendant-Appellee Intier Automotive Inc. d/b/a Innovatech Seating Systems ("Intier") is a "Tier I" automotive supplier in the business of assembling powered automotive seats for sale to automobile manufacturers, including Chrysler. (R. 1 ¶ 2). Keiper is a "Tier II" automotive supplier specializing in the manufacture of the components of automobile seat-recliner systems. (Id. ¶ 1).

On September 7, 2004, Intier issued a blanket purchase order to Keiper for the purchase of recliner systems for Intier to use in seats that it had agreed to supply to Chrysler for installation in Chrysler Pacifica vehicles. (R. 64-2, Purchase Orders and Revisions). The Purchase Order was revised on February 15 and 16, 2005; April 1, 2005; April 24, 2006; May 3, 2006; and March 9, 2007. (Id.). The first four Purchase Orders state: "This order is subject to the terms and conditions appearing on the reverse side hereof." Referred to by the parties as the "1998 Terms and Conditions, " these provisions include certain warranties. Specifically, Paragraph 13 states:

Seller expressly warrants that all Goods and Services, including without limitation any special tools, dies, gigs, fixtures, patterns, machinery and equipment obtained at Buyer's expense for the performance of that Order and/or which are to be the property of Buyer, shall conform to all drawings, specifications, samples and other descriptions furnished, specified or adopted by Buyer, shall be merchantable, free from any defects in material and workmanship and free of all liens, claims and encumbrances whatsoever. If Seller knows, or has reason to know, the particular purpose for which Buyer intends to use the Goods or Services, Seller warrants that such Goods or Services shall be fit and sufficient for a particular purpose. Seller's warranties are available to, and for the benefit of, Buyer, Buyer's Affiliates and their respective successors, assigns and customers and users of products containing Goods or Services. These warranties shall be in addition to all other warranties available under applicable law. Seller shall indemnify and save Buyer, Buyer's Affiliates and their respective successors and assigns harmless from any breach of these warranties and, for greater certainty, no limitations on Buyer's remedies in Seller's documents, if any, shall operate to reduce this indemnification. Seller shall also indemnify Buyer from and against all liability or damages (including any lost profits, recall costs or other consequential damages) imposed upon Buyer resulting from acts or omissions of Seller in respect of Goods or Services.

(R. 60 at 6) (emphasis added).

The April 24, 2006, and later Purchase Orders state: "The terms and conditions printed on the back of this purchase order have been superceded1 and do not apply. Buyer's purchase order terms and conditions [] are available via the Internet at www.magna.com." (R. 64-2 at 8).

These "2005 Terms and Conditions" also contain warranties. (R. 64-4, 2005 Terms and Conditions). Paragraph 13, entitled "Warranties Regarding the Goods and the Services, " states:

Seller expressly warrants that the Goods and the Services . . . that are obtained at Buyer's expense for the performance of this Order and/or are or become the property of Buyer . . . shall: (i) conform to all drawings, specifications, samples and other descriptions furnished, specified or adopted by Buyer; (ii) comply with all applicable laws, regulations, rules, codes and standards of the jurisdictions in which the Goods or the Services . . . are to be sold; (iii) be merchantable; (iv) be free from any defects in design, to the extent furnished by Seller or any of its subcontractors or suppliers, even if the design has been approved by Buyer; (v) be free from any defects in materials and workmanship; (vi) be fit, sufficient, and suitable for the particular purpose for which Buyer intends to use the Goods . . ., including the specified performance in the component, system, subsystem and vehicle location and the environment in which they are or may reasonably be expected to perform . . . . For the purposes of clause (vi) above, Seller acknowledges that Seller knows the particular purpose for which Buyer intends to use the Goods . . . .

(Doc. 64-4 at 5) (emphasis added).

Paragraph 13(c) states that "Seller shall indemnify and hold Buyer" and its customers harmless from any damages or claims arising from or as a result of "any breach of the Seller's Warranties." (Id.).

Finally, the 2005 Terms and Conditions contain a "Set-Off, Recoupment" clause:

In addition to any right of set-off or recoupment provided by law, all amounts due to Seller and its subsidiaries and affiliates shall be considered net of indebtedness or obligations of Seller and its subsidiaries and affiliates to Buyer and its subsidiaries and affiliates, and Buyer and its subsidiaries and affiliates may set-off against or recoup from any amounts due or to become due from Seller and its subsidiaries and affiliates to Buyer and its subsidiaries and affiliates however and whenever arising. Buyer may do so without notice to Seller or its subsidiaries or affiliates. If any obligations of Seller or its subsidiaries or affiliates to Buyer or its subsidiaries or affiliates are disputed . . ., Buyer may defer payment of amounts due until such obligations are resolved.

(R. 64-4 at 4).

2. Range of Motion of the Pacifica Seat Recliners

The design drawings for the recliner systems manufactured by Keiper called for a 38-degree range of movement, with the rear stop being at 56 degrees rearward of vertical and the full-forward stop at 18 degrees rearward of vertical, plus or minus two degrees at either end. (R. 70-4, Eupizi Depo. at 18). Intier engineer Corey Webber testified that "the recliners met the technical design specs." (R. 70-3, Webber Depo. at 153).

Intier engineer Frank Eupizi testified that the full-forward position of the Pacifica seat was such that the occupant could be seated normally, in contrast to other vehicles in which the full-forward position is at or forward of vertical, so that the seat's occupant would be "hunched forward" were the seat fully inclined forward. (R. 70-4, Eupizi Depo. 32). Eupizi further testified that...

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