Masonite Corp. Hardboard Siding Prods. Litigation

• Decision Date: 16 September 1998
• Docket Number: Civil Action MDL No. 1098.
• Citation: 21 F.Supp.2d 593
• Parties: In re MASONITE CORP. HARDBOARD SIDING PRODUCTS LIABILITY LITIGATION. This Document Relates to: Civil Action 96-3901 Lennar Homes Inc.
• Court: U.S. District Court — Eastern District of Louisiana

21 F.Supp.2d 593

In re MASONITE CORP. HARDBOARD SIDING PRODUCTS LIABILITY LITIGATION. This Document Relates to: Civil Action 96-3901 Lennar Homes Inc.

Civil Action MDL No. 1098.

United States District Court, E.D. Louisiana.

September 16, 1998.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Steven J. Harper, Michael E. Berg, Matthew T. Regan, John F. Hagan, Jeanne M. Oosting, Kirkland & Ellis, Chicago, IL, Phillip A. Wittman, Steven W. Usdin, Stephanie D. Shuler, Stone, Pigman, Walther, Wittman & Hutchinson, L.L.P., New Orleans, LA, Richard C. Stanley, Stanley & Flanagan, L.L.C., New Orleans, LA, for Masonite Corp.

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 defendant's Motion for Summary Judgment. Masonite seeks summary judgment on all of plaintiff Lennar's claims, including five counts of breach of warranty, one count of common law indemnity, and one count of equitable subrogation. For the reasons that follow, the Motion is GRANTED in part and DENIED in part.

Background

The facts are by now well-known. Between 1983 and 1992, Lennar Homes built thirty-two buildings in a Florida condominium development known as Lakeview Village. Lennar installed Masonite's exterior hardboard siding on the buildings after purchasing the siding from supply stores and subcontractors. Several years after the construction was completed, Lakeview Village residents observed that some of the siding was deteriorating by rotting, buckling, and swelling.

After the Homeowners' Association complained to Lennar, both Masonite and Lennar hired experts to inspect the damage. Lennar repaired the damaged siding and took an assignment of the homeowners' claims against Masonite. In July 1996, Lennar Homes filed 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. Defendant now moves for summary judgment on all claims.

Law and Application

I. Summary Judgment Standard

The Court begins with the familiar summary judgment standard. Federal Rule of Civil Procedure 56 instructs that summary judgment is proper if the record discloses no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. No genuine issue of fact exists if the record, taken as a whole, could not lead a rational trier of fact to find for the nonmoving party. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). A genuine issue of fact exists only "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The mere argued existence of a factual dispute does not defeat an otherwise properly supported motion. See id. Therefore, "[i]f the evidence is merely colorable, or is not significantly probative," summary judgment is appropriate. Id. at 249-50, 106 S.Ct. 2505 (citations omitted).

In addition, if the party opposing the motion fails to establish an essential element of his case, summary judgment is proper. See Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). In evaluating the summary judgement motion, a court must read the facts in the light most favorable to the non-moving party. Anderson, 477 U.S. at 255, 106 S.Ct. 2505.

II. Choice of Law

In this multi-district litigation, the Court is obliged to apply the law that would be applied by the transferor court. In re Masonite Corp. Hardboard Siding Prods. Liab. Litig., 170 F.R.D. 417, 422 (E.D.La. 1997); see also Ferens v. John Deere Co., 494 U.S. 516, 110 S.Ct. 1274, 108 L.Ed.2d 443 (1990). Because this case was transferred from the Southern District of Florida, the Court will apply Florida choice of law rules to this diversity action.

The parties agree, and the Court concurs, that Florida law applies to the indemnity and subrogation claims. See LaFarge Corp. v. Travelers Indemnity Co., 118 F.3d 1511, 1515 (11th Cir.1997). They part ways, however, as to the applicable rules of decision for the warranty claims.¹

Absent an express choice of law provision, a sale of goods transaction that implicates warranty is governed by the law of the state bearing an "appropriate relation" to the transaction. Pulte Home Corp., Inc. v. Ply Gem Indus., Inc., 804 F.Supp. 1471, 1482 (M.D.Fla.1992); Fla.Stat. ch. 671.105. Florida courts also employ the approach of the Restatement (Second) of Conflict of Laws section 188. LaFarge, 118 F.3d at 1515; Pulte Home, 804 F.Supp. at 1482.

Under the Restatement's "significant relationship" test, the Court applies the law of the state that has the most significant contacts with the parties and subject matter of the case. The Court will consider a variety of factors, including the (1) place of contracting, (2) place of negotiation, (3) place of performance, (4) location of the contract's subject matter, and (5) place of incorporation or place of business of the parties. Pulte Home, 804 F.Supp. at 1482 (citing Restatement (Second) of Conflict of Laws § 188).² The place of delivery, which is the place of performance, should be given the highest priority. Id.; cf. Hopkins v. Lockheed Aircraft Corp., 201 So.2d 743, 751-52, on reh'g from 201 So.2d 743 (Fla.1967) (holding that place of accrual of damage, not place of manufacture, determines governing law for warranty claim); Whittington v. Laney, 566 So.2d 599, 599 (Fla.Dist.Ct.App.1990) (holding that action for breach of warranty accrues where goods are delivered).

On balance, these factors weigh in favor of applying Florida law. Both parties have an undeniable relationship with Florida; in contrast, plaintiff and the homeowners have little or no connection with its competitor in this analysis, Mississippi, other than the fact that Masonite siding is manufactured there. Plaintiff admits that defendant unilaterally drafted its express warranty and plaintiff had no opportunity to negotiate a warranty with defendant in Mississippi. To be sure, plaintiff and the homeowners had no relationship, contractual or otherwise, with defendant until the goods were delivered and installed in Florida.

The Court is not persuaded that the place of manufacture should be decisive in this analysis. Assuming all the siding was manufactured in Mississippi, it is equally pertinent that all of the product at issue was shipped to a single state — Florida. Indeed, the location of the homes on which Masonite siding was installed is no more fortuitous than the place of manufacture. Cf. Hopkins, 201 So.2d at 752 (noting that place of accident is fortuitous, but nonetheless of "primary importance"). Moreover, the breach of any warranty could have occurred only where the product deteriorated: Florida, in this case.

Furthermore, plaintiff specifically complains that the siding could not withstand the extreme climate of Florida. The claim that the location of deterioration is merely fortuitous belies the suggestion that defendant should be liable for breaching an implied warranty of fitness for a particular purpose, namely, installation in Florida. Thus, Florida likely has a strong interest in supplying the applicable rules of decision to protect its citizens from products that cannot withstand the state's extreme weather conditions.

Additionally, the warranty claims are somewhat analogous to insurance contracts that protect an insured from risks that are associated with the location of the insured. A warranty similarly might be understood to protect consumers from damages that accrue in the consumers' locale. Cf. Restatement (Second) Conflict of Laws § 188 comments and § 192. Thus, the Court finds that the place of delivery, Florida, has the most significant connection in this setting. See Pulte Home, 804 F.Supp. at 1482 (determining that state with "appropriate relation" to warranty claim was state where homes were located). Accordingly, the Court concludes that Florida law governs the warranty claims.

III. Analysis

A. Warranty

To prevail on its warranty claims, plaintiff must prove five elements: (1) facts respecting sale of a product supporting a warranty, either express or implied; (2) reliance on representations of the seller constituting the warranty; (3) notice of breach; (4) injuries caused by the breach; and (5) damages. Weimar v. Yacht Club Point Estates Inc., 223 So.2d 100, 104 (Fla.Dist.Ct.App. 1969). The first two are pivotal here.

1. Privity

The first element requires that plaintiff demonstrate privity between plaintiff and defendant. Kramer v. Piper Aircraft Corp., 520 So.2d 37, 39 (Fla.1988). Privity is required for both express and implied warranties. Elizabeth N. v. Riverside Group, Inc., 585 So.2d 376, 378 (Fla.Dist.Ct.App.1991) (citing Navajo Circle, Inc. v. Development Concepts Corp., 373 So.2d 689, 692 (Fla.Dist. Ct.App.1979)).

Although plaintiff relies on Manheim v. Ford Motor Co., 201 So.2d 440, 441-42 (Fla. 1967), for the proposition that privity is not required on warranty claims, plaintiff is mistaken. Although not expressly overruled, insofar as the Manheim decision jettisons the privity requirement it has been effectively overruled by Kramer, 520 So.2d 37, and its progeny.

Plaintiff's reliance on Cedars of Lebanon Hosp. Corp. v. European X-Ray Distribs., 444 So.2d 1068 (Fla.Dist.Ct.App.1984) is similarly misplaced. There the court surveyed conflicting jurisprudential developments but concluded that certain facts made "resolution of [the privity] issue unnecessary." Id. at 1072 & n. 4 (finding that the facts...