Lennar Homes, Inc. v. Masonite Corp., No. Civ.A. MDL 1098.

CourtUnited States District Courts. 5th Circuit. United States District Court (Eastern District of Louisiana)
Writing for the CourtFeldman
Citation32 F.Supp.2d 396
PartiesLENNAR HOMES, INC. v. MASONITE CORPORATION, et al.
Docket NumberNo. Civ.A. MDL 1098.
Decision Date09 November 1998
32 F.Supp.2d 396
LENNAR HOMES, INC.
v.
MASONITE CORPORATION, et al.
No. Civ.A. MDL 1098.
United States District Court, E.D. Louisiana.
November 9, 1998.
Order Denying Reconsideration December 17, 1998.

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COPYRIGHT MATERIAL OMITTED

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Steven W. Usdin, Phillip A. Wittmann, Stephanie D. Shuler, Stone, Pigman, Walther, Wittmann & Hutchinson, LLP, New Orleans, LA, Micael E. Berg, Matthew T. Regan, Kirkland & Ellis, Chicago, IL, Richard C. Stanley, Stanley & Flanagan, L.L.C., New Orleans, LA, for Masonite Corp.

Cameron Waddell, LeBlanc, Maples & Waddell, LLC, Baton Rouge, LA, Donni Elizabeth Young, Ness, Motley, Loadholt, Richardson & Poole, New Orleans, LA, for Philip Cuccia.

Patricia Howard, Washington, DC, pro se.

ORDER AND REASONS

FELDMAN, District Judge.


Before the Court is plaintiff Lennar Homes' Motion for Reconsideration. Lennar seeks reconsideration of the summary judgment granted in favor of Masonite with respect to the claims for breach of express warranty and subrogation. For the reasons that follow, the Motion is GRANTED.

Background

The facts have been previously stated. In July 1996, Lennar filed this suit against Masonite, alleging claims for (1) breach of express warranty, (2) breach of common law implied warranty, (3) breach of statutory implied warranty of merchantability, (4) breach of statutory implied warranty of fitness for a particular purpose, (5) breach of statutory express warranty, (6) common law indemnity, and (7) equitable subrogation.

By Order dated September 16, 1998, this Court granted summary judgment in favor of Masonite on all counts, save the indemnity claim. Lennar now moves for reconsideration on the claims for breach of express warranty and subrogation.

Law and Application

Federal Rule of Civil Procedure 59(e) provides that a party may move to alter or amend a judgment in order to correct manifest errors of law or fact.1 Lavespere v. Niagara Machine & Tool Works, Inc., 910 F.2d 167, 174 (5th Cir.1990), abrogated on other grounds by Little v. Liquid Air Corp., 37 F.3d 1069 (5th Cir.1994) (en banc). The Court exercises considerable discretion in deciding such a motion, balancing "two competing imperatives: (1) finality, and (2) the need to render just decisions on the basis of all the facts." Edward H. Bohlin Co., Inc. v. Banning Co., Inc., 6 F.3d 350, 355 (5th Cir.1993).

The Court dismissed Lennar's claim for breach of an express written warranty based on the homeowner's admitted non-reliance on the Masonite warranty. The Court concludes, however, that reliance is not necessary to enforce a written warranty under Florida law. Accordingly, the earlier summary judgment must be amended.

1. Reliance

Although at first blush it appears that reliance is required to recover for breach of an express warranty, Spolski Gen. Contractor, Inc. v. Jett-Aire Corp. Aviation Management, 637 So.2d 968 (Fla.Dist.Ct.App. 1995); Weimar v. Yacht Club Point Estates, 223 So.2d 100, 104 (Fla.Dist.Ct.App.1969), the reliance element must be confined under Florida law to cases which do not involve express written warranties. In both Spolski and Weimar, reliance was discussed only in the context of the statutory scenario for transforming a seller's affirmations and representations into a warranty; these cases did not involve written warranties.2

The parties cite no cases, nor has the Court uncovered any, in which Florida courts have grappled with the question of reliance

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in the context of an express written warranty.3 Nevertheless, the Court does not aim to divine the contours of Florida law, but, rather, modestly endeavors to predict how Florida courts would resolve this question. See Centennial Ins. Co. v. Ryder Truck Rental, Inc., 149 F.3d 378, 381-82 (5th Cir.1998). Although other jurisdictions are divided on the issue, the Court discerns certain instructive themes that serve as guideposts in Florida's terra incognita.

Under Florida law, a written warranty is treated as a contract between buyer and seller. Council Bros., Inc. v. Ray Burner Co., 473 F.2d 400, 406 (5th Cir.1973); see also Brennan v. Dow Chem. Co., 613 So.2d 131, 132 (Fla.Dist.Ct.App.1993) (noting that a warranty is "a voluntarily undertaken contractual commitment") (quoting Cipollone v. Liggett Group, Inc., 505 U.S. 504, 526, 112 S.Ct. 2608, 120 L.Ed.2d 407 (1992)). As beneficiaries of the warranty,4 the homeowners need not prove reliance to sustain a breach of contract claim. See Mettler, Inc. v. Ellen Tracy, Inc., 648 So.2d 253, 255 (Fla.Dist.Ct. App.1994) (describing elements of breach of contract claim); Caretta Trucking, Inc. v. Cheoy Lee Shipyards, Ltd., 647 So.2d 1028, 1031 (Fla.Dist.Ct.App.1994) (same, in context of third-party beneficiary).

Requiring reliance for claiming breach of an express written warranty would dissolve Florida's distinction between the tort of misrepresentation and breach of contract. See Gilchrist Timber Company v. ITT Rayonier, Inc., 696 So.2d 334, 337 (Fla.1997) (including reliance among elements of tort of negligent misrepresentation); HTP, Ltd. v. Lineas Aereas Costarricenses, S.A., 685 So.2d 1238, 1239 (Fla.1996). ("Where a contract exists, a tort action will lie for either intentional or negligent acts considered to be independent from acts that breached the contract."). Although tort-contract distinctions are at times doctrinally elusive, the Court ought not import tort principles into the law of contract, blurring the line between tort principles and breach of contract. See Ainger v. Michigan Gen. Corp., 476 F.Supp. 1209, 1224-25 (S.D.N.Y.1979) ("Transporting tort principles into contract law seems analytically unsound. If a party to a contract purchases a promise, he should not be denied damages for breach on the grounds that it was unwise or unreasonable for him to do so."), aff'd, 632 F.2d 1025 (2d Cir.1980).

To be sure, some courts, including Florida courts (Spolski, Weimar), have employed the reliance element in express warranty cases. In these contexts, however, the reliance question mostly relates to the first element of proof in any contract claim — existence of a contract; reliance infers acceptance of the seller's affirmations, forming the basis of the contractual bargain.

Nevertheless, reliance is unnecessary to demonstrate a binding contract if the warranty is memorialized in writing, as the case here. Express warranties are created when any affirmation or promise relating to the goods becomes part of the basis of the bargain; "no particular reliance on such statements need be shown in order to weave them into the fabric of the agreement." Fla.Stat. § 672.313(1) & comment 3 (U.C.C. § 2-313). As one court shrewdly observed, "[w]here the warranty is proved and especially where it is expressly stated in a signed writing[,] the promisor should be allowed to disclaim `the bargain of the parties in fact as found in their language' only in an extraordinary case...." Ainger, 476 F.Supp. at 1225 (quoting N.Y.U.C.C. § 1-201(3)). Accordingly, "[t]he warranty is as much a part of the contract as any other part, and the right to damages on the breach depends on nothing more than the breach of the warranty." Glacier Gen. Assurance Co. v. Casualty Indem. Exchange, 435 F.Supp. 855, 860 (D.Mont. 1977).

Both the Eighth Circuit, applying Minnesota law, and the Tenth Circuit, applying

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Kansas law, have found reliance essential to recovery under an express written warranty. Hendricks v. Callahan, 972 F.2d 190 (8th Cir.1992); Land v. Roper Corp., 531 F.2d 445 (10th Cir.1976). Both cases, however, involved the sale of stock — a transaction beyond the reach of the U.C.C. — and are distinguishable from the present case involving a sale of goods. Indeed, this distinction is supported by considering a pre-Land decision in which the Kansas Supreme Court discarded the reliance element in a sale-of-goods case governed by the U.C.C. Young & Cooper, Inc. v. Vestring, 214 Kan. 311, 521 P.2d 281 (Kan.1974).

Yet other cases have viewed reliance as a question of waiver. Consumers knowing before purchase that facts supporting a warranty are not true might not be entitled to damages; because they did not rely on the warranty to their detriment, they have waived the breach. Galli v. Metz, 973 F.2d 145, 151 (2d Cir.1992); Allegheny & Western Energy Corp. v. Columbia Gas Sys., Inc., 1986 WL 13360, at *6 (S.D.W.Va. June 30, 1986).

By contrast, the homeowners' non-reliance cannot be equated with a knowing waiver of their rights. They did not know that the Masonite siding was allegedly defective. Furthermore, injecting reliance into this recovery model would defeat countless claims by consumers who are not well-versed in the "intricacies of the law of sale," clashing with the public policy favoring liberalized consumers' recovery rights. See Schuessler v. Coca-Cola Bottling Co. of Miami, 279 So.2d 901, 904 (Fla.Dist.Ct.App.1973). Interposing a reliance requirement, no doubt, would render consumer warranties illusory.

The Court imagines that few consumers rely, in the strict sense, on warranties when making purchases. Rather, consumers' reliance materializes only at the moment of disappointed expectations. When an appliance breaks, for instance, one might peruse the owner's manual to discover a little-known warranty buried in the fine print. What matters most is the fact that the buyer has purchased the seller's promises as part of the bargain, see Ainger, 476 F.Supp. at 1225, and now seeks to invoke the promised terms when things have gone awry. Thus, Masonite cannot escape plain contractual terms by arguing that unsophisticated home buyers did not rely on their written promises. See Giuffrida v. American Family Brands, Inc., nos. 96-7062, 96-7256, 1998 WL 196402, at *4 (E.D.Pa. April 23, 1998).

2. Assignment/ Subrogation

Masonite has not challenged the home-owner's assignment of claims to Lennar. Thus, in light of a valid assignment of their warranty claims, there...

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11 practice notes
  • McCabe v. Daimler AG & Mercedes-Benz United States, LLC, Civil Action No. 1:12–cv–2494–TCB.
    • United States
    • United States District Courts. 11th Circuit. United States District Courts. 11th Circuit. Northern District of Georgia
    • June 7, 2013
    ...contains a known latent defect then any warranty limits may be unconscionable.” Id. at *10 (citing Lennar Homes, Inc. v. Masonite Corp., 32 F.Supp.2d 396, 401 (E.D.La.1998)). However, as an unreported decision, Barnext has limited precedential value. Moreover, a closer look at the authority......
  • Weitz Co. v. Lexington Ins. Co., No. 4:10–cv–00254.
    • United States
    • United States District Courts. 8th Circuit. United States State District Court of Southern District of Iowa
    • November 13, 2013
    ...assignments, such assignments do not add anything to Weitz's subrogation claim in equity. See Lennar Homes, Inc. v. Masonite Corp., 32 F.Supp.2d 396, 400 (E.D.La.1998); see also In re Ted True, Inc., 94 B.R. 423, 427 (Bankr.N.D.Tex.1988) (“Where a right to subrogation exists, the general ru......
  • Bailey v. Monaco Coach Corp., Civil Action File No. 1:04-CV-40-TWT.
    • United States
    • United States District Courts. 11th Circuit. United States District Courts. 11th Circuit. Northern District of Georgia
    • November 10, 2004
    ...of attempts. See Typographical Service, Inc. v. Itek Corp., 721 F.2d 1317, 1320 (11th Cir.1983); Lennar Homes, Inc. v. Masonite Corp., 32 F.Supp.2d 396, 401 (E.D.La.1998) (applying Florida law); cf. 15 U.S.C. § 2304(a)(4) (Magnuson-Moss Act requires that a warrantor be given a reasonable nu......
  • In re Mathis, Bankruptcy No. 97-35722-BKC-SHF.
    • United States
    • United States Bankruptcy Courts. Eleventh Circuit. U.S. Bankruptcy Court — Southern District of Florida
    • April 27, 2004
    ...Mach. & Tool Works, 910 F.2d 167 (5th Cir.1990) overruled on other grounds as Page 914 stated in Lennar Homes, Inc. v. Masonite Corp., 32 F.Supp.2d 396 (E.D.La.1998). Courts construe motions for reconsideration as motions to alter or amend judgment pursuant to Rule 59(e) if the motions are ......
  • Request a trial to view additional results
11 cases
  • McCabe v. Daimler AG & Mercedes-Benz United States, LLC, Civil Action No. 1:12–cv–2494–TCB.
    • United States
    • United States District Courts. 11th Circuit. United States District Courts. 11th Circuit. Northern District of Georgia
    • June 7, 2013
    ...contains a known latent defect then any warranty limits may be unconscionable.” Id. at *10 (citing Lennar Homes, Inc. v. Masonite Corp., 32 F.Supp.2d 396, 401 (E.D.La.1998)). However, as an unreported decision, Barnext has limited precedential value. Moreover, a closer look at the authority......
  • Weitz Co. v. Lexington Ins. Co., No. 4:10–cv–00254.
    • United States
    • United States District Courts. 8th Circuit. United States State District Court of Southern District of Iowa
    • November 13, 2013
    ...assignments, such assignments do not add anything to Weitz's subrogation claim in equity. See Lennar Homes, Inc. v. Masonite Corp., 32 F.Supp.2d 396, 400 (E.D.La.1998); see also In re Ted True, Inc., 94 B.R. 423, 427 (Bankr.N.D.Tex.1988) (“Where a right to subrogation exists, the general ru......
  • Bailey v. Monaco Coach Corp., Civil Action File No. 1:04-CV-40-TWT.
    • United States
    • United States District Courts. 11th Circuit. United States District Courts. 11th Circuit. Northern District of Georgia
    • November 10, 2004
    ...of attempts. See Typographical Service, Inc. v. Itek Corp., 721 F.2d 1317, 1320 (11th Cir.1983); Lennar Homes, Inc. v. Masonite Corp., 32 F.Supp.2d 396, 401 (E.D.La.1998) (applying Florida law); cf. 15 U.S.C. § 2304(a)(4) (Magnuson-Moss Act requires that a warrantor be given a reasonable nu......
  • In re Mathis, Bankruptcy No. 97-35722-BKC-SHF.
    • United States
    • United States Bankruptcy Courts. Eleventh Circuit. U.S. Bankruptcy Court — Southern District of Florida
    • April 27, 2004
    ...Mach. & Tool Works, 910 F.2d 167 (5th Cir.1990) overruled on other grounds as Page 914 stated in Lennar Homes, Inc. v. Masonite Corp., 32 F.Supp.2d 396 (E.D.La.1998). Courts construe motions for reconsideration as motions to alter or amend judgment pursuant to Rule 59(e) if the motions are ......
  • Request a trial to view additional results

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