Deloach Spray Foam Insulation LLC v. Briggs & Stratton Corp.
| Decision Date | 09 December 2022 |
| Docket Number | Civil 1:19-CV-00572 |
| Parties | DELOACH SPRAY FOAM INSULATION, LLC v. BRIGGS & STRATTON, CORP., ET AL |
| Court | U.S. District Court — Western District of Louisiana |
JOSEPH H.L. PEREZ-MONTES MAGISTRATE JUDGE.
MEMORANDUM RULING
Plaintiff Deloach Spray Foam Insulation, LLC, (“Plaintiff”) filed this lawsuit on March 22, 2019, in the 12th Judicial District Court, Avoyelles Parish, Louisiana. [Doc. 1-2, p 1]. Plaintiff's petition asserted state law redhibition claims against three defendants: (i) Graco, Inc. (“Graco”); (ii) Southwest Air Equipment, Inc. (“Southwest”); and (iii) Briggs & Stratton Corporation (“Briggs & Stratton”) (collectively “Defendants”) stemming from Plaintiff's purchase of an allegedly defective “spray foam” trailer manufactured and sold by Defendants. Defendants subsequently removed the action to this Court on May 2, 2019, on the basis of diversity jurisdiction pursuant to 28 U.S.C. §§ 1332, 1441 and 1446. [Doc. 1].
Two motions are now before the Court: (i) a MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM filed by Southwest; and (ii) a MOTION FOR SUMMARY JUDGMENT filed by Graco (collectively, the “Motions”). [Docs. 72, 73]. After careful consideration, and for the reasons set forth below, the Court DENIES Southwest's Motion to Dismiss and DENIES Graco's Motion for Summary Judgment.
Plaintiff is a Louisiana limited liability company owned by brothers Kelvin and Colin “Dart” Deloach. [Doc. 73-11, p. 3]; [Doc. 1-3, p. 4]. Plaintiff is in the insulation business and is hired by commercial builders to install “spray foam” insulation in buildings undergoing construction. [Doc. 73-11, pp. 3-5; Doc. 1-2, ¶4]. Since its inception in 2018, Plaintiff has performed work exclusively in Louisiana. [Doc. 7310, p. 7]; [Doc. 1-2, ¶2].
Plaintiff's claims arise from the sale of a “Contractor Package” product (“the sale”), which consisted of a customized 16-foot-long cargo trailer retrofitted with various components designed for use in the spray foam industry. [Doc. 1-2, ¶¶3-4]; [Doc. 82-1, p. 1]. Plaintiff purchased the Contractor Package from Southwest, a Texas business specializing in items of this type. [Doc. 1-2, ¶2]; [Doc. 82-1, p. 3]; [Doc. 823, p. 3]. Although Southwest designed and manufactured the completed Contractor Package in its Fort Worth facility, Southwest assembled the finished product using component parts manufactured by Graco and Briggs & Stratton.[1]
Southwest delivered the Contractor Package to Plaintiff in Louisiana in March of 2018. [Doc. 1-2, ¶ 2]; [Doc. 72-1, p. 5].[2] Plaintiff claims that defects manifested in various parts of the Contractor Package soon thereafter. [Doc. 1-2, ¶9]; [Doc. 82-5, p. 8].[3] Although Southwest attempted to repair the Contractor Package using replacement parts provided by Graco and Briggs & Stratton, Plaintiff alleges that its problems with the Contractor Package persisted for nearly a year. [Doc. 82-5, p. 8].
On March 22, 2019, Plaintiff filed redhibition claims against Southwest, Graco, and Briggs & Stratton in Louisiana state district court. [Doc. 1-2, p. 1]. Among other forms of relief, Plaintiff's state court petition sought: (i) rescission of the sale; (ii) return of the purchase price and interest from the date of the sale; (iii) reimbursement for preservation, repair, and insurance expenses; and (iv) lost profits caused by “[forced] downtime and the inability of the ‘contractor package' to function in the intended manner as spray foam insulation equipment[.]” Id. at ¶ 21. Defendants removed the case to this Court on May 2, 2019. [Docs. 1, 32].[4]
Graco and Southwest filed the instant Motions on October 3, 2022. [Doc. 72]; [Doc. 73]. In essence, Graco and Southwest assert in their respective Motions that Plaintiff's claims are governed by the sales law of Texas, not Louisiana, and that under Texas law Plaintiff's claims must be dismissed.[5] Plaintiff opposes both Motions. [Docs. 82, 83]. The Motions are now ripe for ruling.
A court should grant a motion for summary judgment when the pleadings in conjunction with affidavits and documentary evidence, “show that there is no dispute as to any material fact and that the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56; see also Celotex Corp v. Catrett, 477 U.S. 317, 323-24 (1986). In applying this standard, the Court should construe “all facts and inferences in favor of the nonmoving party.” Deshotel v. Wal-Mart Louisiana, L.L.C., 850 F.3d 742, 745 (5th Cir. 2017); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986) (). The party moving for summary judgment bears the burden of demonstrating that there is no genuine dispute of material fact as to issues critical to trial that would result in the movant's entitlement to judgment in its favor, including identifying the relevant portions of pleadings and discovery. Tubacex, Inc. v. M/V Risan, 45 F.3d 951, 954 (5th Cir. 1995). If the movant fails to meet this burden, a court must deny the moving party's motion for summary judgment. Id.
If the movant satisfies its burden, however, the non-moving party must “designate specific facts showing that there is a genuine issue for trial.” Id. (citing Celotex, 477 U.S. at 323). In evaluating motions for summary judgment, the court must view all facts in the light most favorable to the non-moving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). There is no genuine issue for trial - and a grant of summary judgment is warranted - when the record as a whole “could not lead a rational trier of fact to find for the non-moving party[.]” Id.[6]
Federal courts sitting in diversity must apply the choice-of-law rules of the state in which they sit. Marchesani v. Pellerin-Milnor Corp., 269 F.3d 481, 485 (5th Cir. 2001). Accordingly, Book IV of the Louisiana Civil Code determines whether Texas or Louisiana law applies to Plaintiff's claims. Id. Book IV requires a “fact intensive” and “extensive” analysis that necessitates the consideration of various choice-of-law principles. In re Ford Motor Co. Bronco II Prod. Liab. Litig., 177 F.R.D. 360, 370 (E.D. La. 1997); Nelson Radiology Assocs., L.L.C. v. Integrity Med. Sys., Inc., 2008-0443, p. 12 (La App. 4 Cir. 7/29/09), 16 So.3d 1197, 1206. Where the result would be the same under either state's law, a conflicts analysis is unnecessary and Louisiana law governs by default. Partin v. Dolby, 652 So.2d 670, 675 (La.App. 1st Cir. 1995).[7]
Redhibition actions are contractual in nature. Diaz v. Goodyear Tire & Rubber Co., 2008 WL 4528186, at *5 (M.D. La. Oct. 1, 2008) () (citing Scruggs v. Minton Equipment, Inc., 1998-987 (La.App. 3 Cir. 12/9/98), 722 So.2d 130). As a result, if a conflicts analysis is necessary, La. C.C. arts. 3515 and 3537 govern Plaintiff's claims against both Graco and Southwest. See, e.g., PHI, Inc. v. Apical Industries, Inc., 2021 WL 67726, at *10 (W.D. La. Jan. 7, 2021); Skansi Marine, LLC v. Ameron Intern. Corp., 2003 WL 22852221, at *4 (E.D. La. Dec. 1, 2003).[8] A conflicts analysis under La. C.C. arts. 3515 and 3537 first requires a consideration of the applicable policies underlying the laws of the relevant states. Liberty Mut. Ins. Co. v. Zurich American Ins. Co., 2007 WL 3487651, at *2-3 (E.D. La. Nov. 13, 2007); see also La. C.C. art. 3537, cmt. (d) (“[T]he first step of the process is to identify ‘the relevant policies of the involved states.' ”). Next, a court must weigh the “strength and pertinence” of those policies in light of: (i) the factual contacts each state has to parties and the transaction; (ii) the “nature, type, and purpose of the contract;” and (iii) the policies enumerated by Article 3515, as well as the policies of “facilitating the orderly planning of transactions, of promoting multistate commercial intercourse, and of protecting one party from undue imposition by the other.” Id. (citing La. C.C. arts. 3515 and 3537).[9]
At bottom, a court must determine which state's policies “would be most seriously impaired” if its law were not applied to the issue at hand. La. C.C. arts. 3515 and 3537. This assessment “should not be a mechanical, quantitative process, but should be based on an objective and impartial evaluation of the consequences of the choice-of-law decision on each of the involved states with a view towards accommodating their respective interests rather than selfishly promoting the interests of one state at the expense of others.” R-Square Invs., Inc. v. Teledyne Indus., Inc., 1997 WL 436245, at *4 (E.D. La. July 31, 1997) .
In Louisiana, the warranty against redhibitory defects is implied in every sale unless validly waived. Johnson v CHL Enterprises, 115 F.Supp.2d 723, 728 (W.D. La. 2000); Modicue v. Prince of Peace Auto Sale, LLC, 54,095, p.18 (La.App. 2 Cir. 9/22/21), 328 So.3d 1239, reh'g denied (Nov. 10, 2021), writ denied, 2021-01864 (La. 2/15/22).[10] Although the buyer may limit or exclude a redhibitory warranty, such a waiver must: (i) be written in clear and unambiguous terms; (ii) be contained in the contract; and (iii) either be brought to the attention of the buyer or explained to him. Modicue v. Prince of Peace Auto Sale, LLC, 54,095, p. 18 (La.App. 2 Cir. 9/22/21), 328 So.3d 1239, 1249, reh'g denied (Nov. 10, 2021), writ denied, 2021-01864 (La. 2/15/22). Southwest has not...
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