Arundel Valley, LLC v. Branch River Plastics, Inc.
| Decision Date | 20 March 2017 |
| Docket Number | Docket No. BCD-CV-13-15 |
| Parties | ARUNDEL VALLEY, LLC Plaintiff v. BRANCH RIVER PLASTICS, INC. Defendant |
| Court | Maine Superior Court |
Cumberland, ss.
BUSINESS AND CONSUMER COURT
On Defendant Branch River Plastics, Inc.'s appeal of this court's July 13, 2015 Judgment in this case, the Supreme Judicial Court of Maine, sitting as the Law Court, has vacated the Judgment as to Plaintiff Arundel Valley, LLC's breach of implied warranty claims. The Law Court has remanded the case for this court to rule on "whether Branch River's purported disclaimer of implied warranties was effective." Arundel Valley, LLC v. Branch River Plastics, Inc., 2016 ME 175, ¶ 1, 151 A.3d 938.
The Law Court has framed the issue to be addressed on remand as follows:
If the court rules, based on the evidence presented at trial, that Branch River made no legally operative disclaimer of implied warranties, the court must re-enter judgment on the jury's verdict in Arundel Valley's favor. If, on the other hand, the court rules that Branch River did disclaim the implied warranties of merchantability and fitness for a particular purpose - by way of an express warranty or otherwise - it must enter a judgment in Branch River's favor on the two implied warranty counts.
After the Law Court mandate issued, this court established a schedule for the parties to brief the issue, with Branch River filing initially, Plaintiff Arundel Valley, LLC ["Arundel Valley"] responding, and Branch River filing a reply. Oral argument was held March 9, 2017, and the record on remand was held open for further filings until March 13, 2017, at which point this court took the matter under advisement.1
Through the briefing process, it became apparent that each party is asking this court to decide issues that are beyond the scope of the Law Court's remand.
Arundel Valley asserts that this court should find and conclude that Branch River waived the defense of disclaimer of implied warranties in the course of the trial. See Arundel Valley, LLC's Post-Remand Brief at 2-3, citing Trial Transcript ("TT") 5:111-12, 5:118.2 For its part, Branch River asserts that, in addition to the disclaimer of implied warranties issue, this court should decide that what Branch River claims is an independent limitation on damages is enforceable against Arundel Valley. See Post-Remand Reply Brief of Defendant Branch River Plastics, Inc. at 17 ().3
In this court's view, neither Arundel Valleys waiver issue nor Branch River's limitation of damages issue is before this court on remand. As noted above, the Law Court has framed the sole issue on remand as being whether, "based on the evidence at trial," Branch River "did disclaim the implied warranties of merchantability and fitness for a particular purpose- by way of an express warranty or otherwise."
On its face, the answer to that question lies in the evidence presented at trial. Arundel Valley's contention that Branch River has waived its defense of disclaimer of implied warranties by failing to present evidence is thus outside the scope of the remand.
Similarly, Branch River's argument that this court should consider the effectiveness of the purported limitation on damages is outside the scope of the remand. A contractual limitation on damages is different from a contractual disclaimer of implied warranties and presents different issues of law and fact. The Law Court's remand identifies a single issue for this court to address, which is whether Branch River effectively disclaimed implied warranties.
Accordingly, the court declines to consider either Arundel Valley's waiver argument or Branch River s limitation of damages argument. Instead, the court turns to the issues of fact and law that are encompassed within the ultimate question of whether, based on the evidence at trial, Branch River effectively disclaimed the implied warranties of merchantability and fitness for particular purpose with respect to the structural roof panels it provided to Arundel Valleys project.
Based on the entire record, this court hereby adopts the following findings of fact and conclusions of law, which supersede any and all prior statements or rulings on the same matters, however designated.4 All affirmative findings are based on a preponderance of the evidence unless otherwise indicated.
1. In 2011, Arundel Valley hired a construction company, Peachey Builders, to serve as general contractor and "provide construction administration and management services" and all"labor, materials, equipment and services necessary" to construct a butter manufacturing facility for Arundel Valley. Plaintiff's Trial Exhibit ("Pl. Ex.") 1; TT 1:171. Arundel Valley owns the facility; Kate's Butter, Inc., formerly a plaintiff in this case, leases the facility from Arundel Valley. TT: 1:166; Pl. Ex. 1. (The construction project is referred to hereinafter as "the Kate's Butter project").
2. During the planning phase for the Kate's Butter project, Peachey Builders and the project architect recommended that the walls and roof of the facility be constructed using structural insulated panels, also known as SIPs. TT 1:176-77. Peachey Builders worked with a third party vendor, House & Sun, to purchase the SIPs. TT 1:179. House & Sun is a company that specializes in the sale of SIPs that it historically has obtained from either of two SIP manufacturers, one of which being Branch River. TT 2:90, 2:93. House & Sun had purchased SIPs from Branch River approximately seventy times in the eight to ten years prior to trial. TT 2:91, 2:94, 2:119.
3. The arrangement was that House & Sun would purchase the wall and roof SIPs from Branch River, and then re-sell them to Peachey Builders through a separate transaction, subject to House & Sun's own pricing. TT 2:134. At the request of Peachey Builders "to price out some [SIPs] on the project," House & Sun reached out to Branch River to prepare a bid for the Kate's Butter project. TT 1:98-99.
4. Branch River is a manufacturer of SIPS for residential and commercial projects. Some of Branch River's SIPS are marketed as Air-Flo SIPS and others are marketed as R-Control SIPs. TT 1:50-54. "Air-Flo" is Branch River's own brand name, but R-Control is a designation that identifies the SIP as "code-compliant," meaning that it is recognized to meet certain standards of manufacturing and performance established and monitored by AFM Corporation ["AFM"], the code compliance service that owns the R-Control designation. TT1:50. The term" code-compliant" as applied to a product means that the product complies with the applicable building code. See TT 1:51.
5. R-Control is a registered trademark of AFM. AFM licenses facilities that manufacture SIPs to market products under the R-Control brand. Said licensed facilities must adhere to consistent standards to ensure high quality products. R-Control SIPs are manufactured under carefully controlled conditions and are certified as per se code compliant. Branch River has a license to manufacture and sell R-Control products. See TT 1:52-54, 3:259-60.
6. Branch River's Air-Flo SIPS are designed and manufactured differently than its R-Control SIPS: the Air-Flo SIPS have channels cut into the foam core, whereas R-Control SIPs have a solid foam core. TT 1:52-54. As a result of the difference, the products perform differently. Id. Also, Branch River's Air-Flo SIPs are not certified by any independent service, such as AFM, as being "code-compliant." TT 1:52, 1:55.
7. Branch River proposed to provide R-Control SIPs for the walls of the Kate's Butter facility, and to provide Air-Flo SIPs for the roof of the facility. Pl. Ex. 11, 13: Both proposals contained a critical error—they described the Branch River roof SIPs as R-Control. Id. Moreover, the twelve invoices that Branch River submitted to House & Sun for payment of the SIPs also incorrectly identified the Branch River roof SIPs as being R-Control. See Pl. Ex. 28.
8. In fact, while Branch River's wall SIPS are indeed R-Control, Branch River's Air-Flo roof SIPS are not R-Control TT 1:52.
9. Based on Branch River's repeated mischaracterization of its roof SIPS as being R-Control, Kel House, the owner of House & Sun, was under the mistaken understanding that the Branch River roof SIPS were R-Control. See TT 2:101, 2:107, 2:112. It was not until June 2012, well after the Branch River SIPS had been installed at the Kate's Butter project, thatBranch River told Mr. House that the Branch River roof SIPS were not, in fact, R-Control. Pl. Ex. 37, TT 2:113-14.
10. Based on Mr. House's mistaken understanding, House & Sun submitted a budget estimate to Peachey Builders that mischaracterized the roof SIPS as being R-Control. P. Ex. 15. In December 2011 House & Sun submitted to Peachey Builders Change Order #1 that also mischaracterized the roof SIPS that House & Sun would be supplying as R-Control. Pl. Ex. 36.
11. Based on House & Sun's characterization of the Branch River roof SIPs, Peachey and Arundel Valley were led to believe that the Branch River roof SIPS were R-Control. TT 1:196-97, 2:145-46, -154; see Pl. Ex. 20.
12. Pursuant to Peachey Builder's contract with Arundel Valley, Peachey Builders provided its own material warranty to Arundel Valley and was to "assign to [Arundel Valley] all warranties received by Contractor on all materials and equipment included in the Work." Pl. Ex. 1, § 5.5.3.
13. In the course of the dealings in 2011-12 among Branch River, House & Sun, Peachey Builders and Arundel Valley, references were made to the warranty or warranties applicable to Branch River's wall and roof SIPS. The budget estimates that House & Sun...
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