Dart Industries, Inc. v. Adell Plastics, Inc., EV 79-17-C.

• Decision Date: 31 October 1980
• Docket Number: No. EV 79-17-C.,EV 79-17-C.
• Parties: DART INDUSTRIES, INC., Plaintiff, v. ADELL PLASTICS, INC., Defendant and Third Party Plaintiff, v. VISTRON CORPORATION, Third Party Defendant.
• Court: U.S. District Court — Southern District of Indiana

517 F. Supp. 9

DART INDUSTRIES, INC., Plaintiff, v. ADELL PLASTICS, INC., Defendant and Third Party Plaintiff, v. VISTRON CORPORATION, Third Party Defendant.

No. EV 79-17-C.

United States District Court, S. D. Indiana, Evansville Division.

October 31, 1980.

Ronald E. Elberger, Indianapolis, Ind., Frank A. Shepherd, Miami, Fla., for plaintiff.

William E. Spatham, Stephen H. Thomas, Gaylon Clark, Evansville, Ind., for defendant and third party plaintiff.

Robert H. Hahn, Evansville, Ind., for third party defendant.

MEMORANDUM ENTRY

BROOKS, District Judge.

The allegations of the amended complaint state that in April of 1974 Plaintiff, a Delaware Corporation, placed an order with Defendant, an Indiana Corporation, for the purchase of a certain quantity of a plastic pellet material. Plaintiff used this plastic material to produce a product which was sold to Safe-T-Lawn, Inc. Safe-T-Lawn, Inc., had problems with this product and brought suit against Plaintiff in October of 1976 in the Circuit Court for the Eleventh Judicial Circuit in and for Dade County Florida. This suit was settled in February of 1978. Plaintiff filed its complaint herein on February 1, 1979, and subsequently was granted leave to amend said complaint on April 18, 1980. The amended complaint alleges that the plastic pellet material sold by Defendant to Plaintiff did not conform to the contractual specifications; consequently, Plaintiff asserts that the Defendant is liable to it for the damages paid to Safe-T-Lawn, Inc., pursuant to the settlement agreement.

Counts III, IV, and V of Plaintiff's amended complaint are in issue pursuant to the motion being discussed herein. Count III alleges a material breach of the sales agreement; Count IV alleges a breach of an implied warranty of merchantability; and Count V alleges a breach of an express warranty. The Defendant simply claims that these Counts of the amended complaint should be dismissed because such causes of action are barred by the applicable Indiana statute of limitations.

I.C. XX-X-X-XXX provides in relevant part:

Statute of Limitations in Contracts for Sale.

(1) An action for breach of any contract for for sale must be commenced within four (4) years after the cause of action occurred. By the original agreement the parties may reduce the period of limitation to not less than one (1) year but may not extend it.

(2) A cause of action accrues when the breach occurs, regardless of the aggrieved party's lack of knowledge of the breach. A breach of warranty occurs when tender of delivery is made, except that where a warranty extends to future performance of the goods and discovery of the breach must await the time of such performance the cause of action accrues when it is or should have been discovered.

The Indiana statute governing territorial application of the U.C.C., I.C. XX-X-X-XXX provides in pertinent part:

Sec. 105. (1) Except as provided hereafter in this section, when a transaction bears a reasonable relation to this state and also to another state or nation the parties may agree that the law either of the state or of such other state or nation shall govern their rights and duties. Failing such agreement this Act applies to transactions bearing on appropriate relation to this state.

The Plaintiff has argued that while there is no agreement as to what state law will control, the law of Florida, including its statute of limitations is controlling as Florida has the most significant relationship to the transaction in issue. The Court finds this argument to be without merit.

The states have the right to adopt such rules of conflict of laws as they choose. Wells, Administratrix v. Simonds Abrasive Co., 345 U.S. 514, 73 S.Ct. 856, 97 L.Ed. 1211 (1953); Kryger v. Wilson, 242 U.S. 171, 37 S.Ct. 34, 61 L.Ed. 229 (1916). Furthermore, applying the statute of limitations of the forum to a foreign substantive right is not a denial of full faith and credit. Wells, Administratrix v. Simonds Abrasive Co., supra; See, Order of Commercial Traveler of America v. Wolfe, 331 U.S. 586, 67 S.Ct. 1355, 91 L.Ed. 1687 (1947). The Courts in Indiana have adopted as their conflict of law rule, that a statute of limitations is a procedural matter; consequently, Indiana's statutes of limitation should be applied when an Indiana court is the forum. Albrecht v. Indiana Harbor Belt R. Co., 178 F.2d 577 (7th Cir. 1949); Horvath v. Davidson, 148 Ind.App. 203, 264 N.E.2d 328 (1970). Furthermore, even assuming a statute of limitations is substantive and should be applied in accordance with traditional principles on conflicts of law, Florida law should not be applied herein. The intimate contacts to the 1974 transaction all occurred in Indiana. The contract was entered into in Indiana, the plastic produced in Indiana, and...