Anna Ready Mix, Inc. v. NE Pierson Const. Co.

• Citation: 747 F. Supp. 1299
• Decision Date: 16 October 1990
• Docket Number: Civ. No. 88-4066.
• Parties: ANNA READY MIX, INC., Plaintiff/Counter-defendant, v. N.E. PIERSON CONSTRUCTION CO., INC., Defendant/Counter-plaintiff.
• Court: U.S. District Court — Southern District of Illinois

747 F. Supp. 1299

ANNA READY MIX, INC., Plaintiff/Counter-defendant, v. N.E. PIERSON CONSTRUCTION CO., INC., Defendant/Counter-plaintiff.

Civ. No. 88-4066.

United States District Court, S.D. Illinois, Benton Division.

October 16, 1990.

John P. Womick, R. Courtney Hughes, Carbondale, Ill., Larry E. Hepler, Burroughs, Simpson, Hepler, Broom & MacDonald, Edwardsville, Ill., for plaintiff/counter-defendant.

Paul G. Schoen, Rebecca Whittington, Jill E. Adams, Feirich, Schoen, Mager, Green & Associates, Carbondale, Ill., for defendant/counter-plaintiff.

MEMORANDUM AND ORDER

FOREMAN, Chief Judge:

On July 23, 1983, Pierson Construction Company, Inc. (Pierson) and Anna Ready Mix, Inc. (ARM) entered into an agreement for the purchase of concrete. Pursuant to the agreement, ARM was to provide concrete for use by Pierson in constructing grain silos at two sites in Mound City, Illinois. The agreement specified that the concrete, unless otherwise agreed, would have a strength of 3,000 pounds per square inch (p.s.i.) twenty-eight days after being poured and that the concrete was to contain at least 5½ sacks of cement per cubic yard of concrete. Because of cold weather at the time of construction, this requirement was increased to 6 sacks of cement per cubic yard of concrete.

On December 8, 1983, because of a scale malfunction at ARM, the regular scale was removed for repairs and replaced with a temporary electronic scale. On the afternoon of January 6, 1984, ARM determined that the electronic scale was providing inaccurate readouts. Due to the inaccuracy of the scales, the concrete delivered by ARM did not meet the required strength specification. As a result, Pierson was obliged to make various repairs to the silos.

The parties then began this wrangling litigation. ARM sued Pierson for breach of contract; Pierson counterclaimed for breach of warranty. ARM attempted to bring in a variety of third-party defendants; these claims were dismissed. Related litigation was being conducted in state courts.

Currently before the Court are two motions for summary judgment. Pierson has moved this Court for summary judgment in its favor on the issue of liability for breach of warranty. ARM has moved for summary judgment in its favor on the issue of consequential damages. Magistrate Philip Frazier has issued his recommendations. (Documents 182 and 183). The parties have filed numerous objections, responses to objections, and other related pleadings directed towards the Magistrate's reports. This Court must review the Magistrate's reports and make a de novo determination. 28 U.S.C. § 636(b)(1).

I.

A Court may grant summary judgment only if the party seeking summary judgment demonstrates that no genuine issue of fact exists for trial and that the movant is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(e); Wilson v. Chicago, Milwaukee, St. Paul & Pacific R.R. Co., 841 F.2d 1347, 1354 (7th Cir.1988), petition for cert. dismissed 487 U.S. 1244, 109 S.Ct. 1, 101 L.Ed.2d 953 (1988). If that showing is made and the motion's opponent would bear the burden at trial on the matter that forms the basis of the motion, the opponent must come forth with evidence to show what facts are in actual dispute. Celotex Corp. v. Catrett, 477 U.S. 317, 324, 106 S.Ct. 2548, 2553, 91 L.Ed.2d 265 (1986); Donald v. Polk County, 836 F.2d 376, 379 (7th Cir.1988). Where the moving party fails to meet its strict burden of proof, summary judgment cannot be entered even if the opposing party fails to respond to the motion. Yorger v. Pittsburgh Corning Corp., 733 F.2d 1215, 1222 (7th Cir.1984).

When the parties do not dispute the factual basis of a motion for summary judgment, the court's only inquiry is whether judgment should issue as a matter of law. The burden of proof on this matter rests with the moving party. Summary judgment is inappropriate, however, if the parties disagree about inferences reasonably to be drawn from undisputed facts. Bowyer v. United States Dept. of Air Force, 804 F.2d 428, 430 (7th Cir.1986), cert. denied, ___ U.S. ___, 110 S.Ct. 846, 107 L.Ed.2d 840 (1990).

When the parties dispute the facts, the parties must produce proper documentary evidence to support their contentions. The parties cannot rest on mere allegations in the pleadings, Boruski v. United States, 803 F.2d 1421, 1428 (7th Cir.1986), or upon conclusory allegations in affidavits. First Commodity Traders v. Heinold Commodities, 766 F.2d 1007, 1011 (7th Cir.1985). The Court must view the evidence and any permissible inferences from the materials before it in favor of the non-moving party, Matsushita Elecs. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 588-89, 106 S.Ct. 1348, 1356-57, 89 L.Ed.2d 538 (1986), as long as the inferences are reasonable. Davis v. City of Chicago, 841 F.2d 186, 189 (7th Cir.1988). The non-moving party must show that the disputed fact is material; that is, it must be outcome-determinative under the applicable law. Wainwright Bank & Trust Co. v. Railroadmens Fed. Sav. & Loan Ass'n, 806 F.2d 146, 149 (7th Cir.1986).

II.

Pierson has filed a motion for summary judgment in its favor on Counts I, II, III and IV of its counterclaim against ARM. Pierson argues, in essence, that there is no genuine dispute that the concrete supplied by ARM contained less than 6 bags of cement per cubic yard. Since the contract called for concrete containing 5½ sacks of cement per cubic yard, later increased to 6 sacks per cubic yard, ARM breached its contract.

Magistrate Frazier recommends that Pierson's motion be denied. In his recommendation, Magistrate Frazier notes several disputed questions of fact, any of which would preclude summary judgment. For example, there is a question of whether concrete mixed with as few as 3 bags of cement per cubic yard could reach the desired strength of 3,000 p.s.i. Another disputed question of fact is the effect of cold weather at the construction site. Cold weather, apparently, can cause concrete to weaken. The parties dispute whether the weakened condition of the concrete was due to cold weather and whose responsibility it was to protect the concrete from the cold. There is also a dispute whether Pierson knowingly accepted the concrete knowing that it contained less than 6 sacks of cement per cubic yard.

In its objection to the Magistrate's report, Pierson emphasizes that Magistrate Frazier wrote that "technically, ARM probably did breach the contract when less than 5½ sacks per cubic yard concrete was delivered to the job site." Magistrate's Report and Recommendation at 2 (April 6, 1990) (Document 183). Pierson insists that since Magistrate Frazier found that the concrete contained less than six sacks of cement per cubic yard, this necessarily shows that ARM breached its contract. Therefore, Pierson argues, summary judgment should issue in Pierson's favor with regard to ARM's liability on the counterclaims.

Even if this Court were to find that the concrete delivered to the job site by ARM contained less than 6 sacks of cement per cubic yard, it would not be able to grant summary judgment on the issue of liability in Pierson's favor. A breach of a technical requirement of a contract does not necessarily imply a breach of warranty. Moreover, ARM has raised several affirmative defenses relating to the issue of acceptance. See Ill.Rev.Stat. ch. 26, ¶ 2-606. These defenses, if proved, may result in a finding of no damages for the breach of the contract and warranty¹. There exist genuine factual disputes over these defenses. Therefore, summary judgment on the issue of ARM's liability is DENIED.

III.

ARM has also moved for summary judgment on the issue of consequential damages. Magistrate Frazier recommended that summary judgment be granted in ARM's favor on this issue. Pierson has objected. The main grounds for Pierson's objection is that the existence of a provision in the contract requiring ARM to purchase $1,500,000 of insurance creates a genuine issue of fact whether the parties reasonably foresaw that ARM would be liable for consequential damages up to $1.5 million. This argument was never raised in front of Magistrate Frazier; thus, ARM has filed a motion to strike these arguments.

A.

The United States Magistrate Act, 28 U.S.C. §§ 631 et seq., was passed to help district courts deal with an ever increasing workload. Among its provisions is one allowing district judges to designate magistrates to conduct hearings, including evidentiary hearings, and to submit to the judge proposed findings of facts recommendations for the disposition of a pretrial motion. 28 U.S.C. § 636(b)(1). After a magistrate issues his recommendation, the parties have ten days in which to file objections to the recommendations. Id. If objections are properly filed, the district judge must make a de novo determination of those portions of the report which are objected to. Id; Delgado v. Bowen, 782 F.2d 79, 82 (7th Cir.1986).

Congress extended this provision to include pretrial dispositive motions in 1976. Pub.L. 94-577, 90 Stat. 2729. Magistrates were given this authority in order to allow district court judges to spend more of their time on the adjudication of a case at trial. H.R.Rep. 1609, 94th Cong.2d Sess. 7, reprinted in 1976 U.S.Code Cong. and Ad. News 6162, 6167.

Congress explained the requirements for a de novo determination:

The use of the words "de novo" determination is not intended to require the judge to actually conduct a new hearing on contested issues. Normally, the judge, on application, will consider the record which has been developed before the magistrate and make his own determination on the basis of that record, without being bound to adopt the findings and conclusions of the magistrate. In some specific instances, however, it may be necessary for the judge to modify or reject the findings of the magistrate, to take additional evidence, recall witnesses, or recommit the matter to the magistrate for further

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