Maxon Corp. v. Tyler Pipe Industries, Inc., 2-1083-A-389

Decision Date15 September 1986
Docket NumberNo. 2-1083-A-389,2-1083-A-389
Citation497 N.E.2d 570
Parties3 UCC Rep.Serv.2d 52 MAXON CORPORATION and Commercial Union Assurance Companies, Appellants (Plaintiffs Below), v. TYLER PIPE INDUSTRIES, INC., Appellee (Defendant Below), and Tyler Corporation and Tyler Pipe Industries of Texas, Inc., Nominal Appellees (Defendants Below).
CourtIndiana Appellate Court

Jim A. O'Neal, Scott A. Smith, Ice Miller Donadio & Ryan, Indianapolis, for appellants.

William H. Vobach, Julia M. Blackwell, Richard M. Knoth, Locke Reynolds Boyd & Weisell, Indianapolis, for appellee Tyler Pipe Industries, Inc.

SULLIVAN, Judge.

Maxon Corporation and its insurer, Commercial Union Assurance Companies, 1 appeal from the Marion County Superior Court's summary judgment which determined that Tyler Pipe Industries, Inc., Tyler Corporation, and Tyler Pipe Industries of Texas, Inc. 2 were not obligated to indemnify Maxon for payments it made in settlement of a suit by a Tyler employee who was injured by machinery manufactured by Maxon.

On appeal, Maxon presents the following issues:

(1) Whether the trial court erred in concluding as a matter of law that the "Warning and Covenants" section of Maxon's invoice containing an indemnity provision was not a part of Maxon's contract with Tyler; and

(2) Whether the trial court erred in concluding as a matter of law that even if the "Warning and Covenants" section of Maxon's invoice was a part of the parties' contract, it does not state in clear and unequivocal terms that Tyler must indemnify Maxon for Maxon's own culpability.

We affirm.

In early May of 1973 Maxon submitted a price quotation to Tyler Pipe for the sale of two "pre-mix blower-mixer" units for Tyler's Texas plant. Tyler then sent Maxon an order for the purchase of the two units. The reverse side of Tyler's order included the following pertinent terms and conditions:

"1. AGREEMENT No conditions inserted by the Seller in acknowledging and accepting this Order shall be effective if in conflict with terms and conditions herein stated unless such conditions inserted are accepted in writing by the Buyer.

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5. WARRANTIES The Seller warrants that all articles or materials delivered hereunder shall be free from defects of material or workmanship and guarantees all parts will conform strictly to specifications or drawings specified. The warranties of the Seller together with its service warranties and guarantees shall run to the Buyer or its customers. All warranties herein shall be construed as conditions as well as warranties.

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SPECIAL INSTRUCTIONS

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(4) THE SELLER, upon shipment of any or all of the material on this order, agrees to all of the terms, conditions and obligations as set forth." Record at 287.

Having received Tyler's order, Maxon shipped the two units. An invoice, which apparently accompanied the shipment, provided in part:

"WARRANTY SELLER WARRANTS THE GOODS MANUFACTURED BY IT TO BE FREE FROM DEFECTS IN MATERIAL AND WORKMANSHIP AND TO CONFORM WITH THE SPECIFICATIONS IN SELLER'S CURRENT PUBLISHED TECHNICAL DATA, WHEN PROPERLY INSTALLED, CAREFULLY OPERATED AND CAREFULLY MAINTAINED. IF WITHIN ONE YEAR FROM SHIPMENT ANY OF THE GOODS FAILS TO SO CONFORM, OR IS FOUND TO HAVE BEEN DEFECTIVE IN MATERIAL OR WORKMANSHIP WHEN SHIPPED, SUCH DEFECTIVE GOODS SHALL, AT SELLER'S OPTION, EITHER BE REPAIRED OR REPLACED BY SELLER, F.O.B. MUNCIE, INDIANA, OR SELLER SHALL REFUND THE PURCHASE PRICE. (THE WARRANTY PERIOD FOR TRIP RELEASE VALVES AND MAXON-OKADEE VALVES SHALL BE ONE YEAR FROM INSTALLATION, BUT NO LONGER THAN 18 MONTHS FROM SHIPMENT BY SELLER.) IN ANY SUCH EVENT BUYER'S REMEDIES SHALL CONSIST EXCLUSIVELY AND SOLELY OF THOSE ABOVE STATED. THERE ARE NO WARRANTIES, EXPRESSED OR IMPLIED, OF MERCHANTABILITY OR OF FITNESS. SELLER SHALL HAVE NO LIABILITY TO BUYER FOR ANY DIRECT, INDIRECT OR CONSEQUENTIAL DAMAGES OR INJURY RESULTING FROM ANY DEFECTIVE OR NON-CONFORMING GOODS.

WARNING & COVENANTS THE IMPROPER INSTALLATION OR APPLICATION OF THE GOODS; THEIR USE WITH IMPROPER WIRING, PIPING, OR VENTILATION; IMPROPER SYSTEM DESIGN OR ENGINEERING; INADEQUATE INSPECTION OR TESTING; THE LACK OF REGULAR CAREFUL MAINTENANCE OF BOTH THE GOODS AND ANY EQUIPMENT IN CONNECTION WITH WHICH THE GOODS ARE USED; THE EMPLOYMENT OF INSUFFICIENT OR UNQUALIFIED PERSONNEL; THE LACK OF CAREFUL SUPERVISION, PROPER WARNINGS, OPERATING INSTRUCTIONS, AND SAFETY PRECAUTIONS; THE EXPOSURE OF THE GOODS TO EXCESSIVE HEAT, MOISTURE, DUST, DIRT, CORROSION, OR ANY OTHER DELETERIOUS CONDITION, EACH CONSTITUTES A HAZARD WHICH CAN RESULT IN LOSS OF LIFE, SERIOUS PERSONAL INJURY, HEAVY PROPERTY OR BUSINESS DAMAGE, AND BUYER AGREES WITH SELLER TO ITSELF TAKE AND REQUIRE OTHERS TO TAKE ALL REASONABLE MEASURES TO AVOID EACH SUCH HAZARD. IN THE EVENT OF ANY SUCH LOSS, INJURY OR DAMAGE, BUYER SHALL NOT ITSELF, NOR PERMIT OTHERS TO, DISMANTLE, TEST OR EXAMINE ANY OF THE GOODS WITHOUT GIVING SELLER SUFFICIENT ADVANCE NOTICE TO BE PRESENT AND ALLOWING SUCH PRESENCE. BY ACCEPTANCE OF THE GOODS, BUYER AGREES TO INDEMNIFY SELLER AGAINST ALL LIABILITY, LOSS, COST AND EXPENSE ARISING OUT OF ANY CLAIM OF ANY NATURE INVOLVING THE USE OR MISUSE OF THE GOODS, INCLUDING, BUT NOT LIMITED TO ANY ALLEGED OR ACTUAL NEGLIGENCE, BREACH OF WARRANTY, DEFECT OR DEFICIENCY IN THE GOODS, THEIR DESIGN, OR APPLICATION, OR IN ANY DRAWING, SERVICE SUGGESTION, WARNING, INSTRUCTIONS OR OTHER LITERATURE.

ENTIRE AGREEMENT ANY DOCUMENT SUBMITTED BY BUYER MODIFYING, ADDING TO, OR INCONSISTENT WITH THE TERMS AND PROVISIONS HEREIN CONTAINED, SHALL BE DEEMED ACCEPTED BY SELLER ONLY ON THE CONDITION THAT THE LIABILITIES OF SELLER SHALL BE DETERMINED SOLELY BY THE TERMS AND CONDITIONS ABOVE SET OUT, AND IN CONSUMMATING

ANY SUCH ORDER, SELLER SHALL BE DEEMED NOT TO HAVE CHANGED, ENLARGED, OR MODIFIED ITS LIABILITIES OR OBLIGATIONS AS ABOVE SET OUT. THIS DOCUMENT CONTAINS THE ENTIRE AGREEMENT BETWEEN THE PARTIES AND SUPERSEDES ALL PRIOR STATEMENTS OF ANY KIND BY OR BETWEEN THE PARTIES. ACCEPTANCE OF THE GOODS SHALL CONSTITUTE CONCLUSIVE ACCEPTANCE OF THESE TERMS AND CONDITIONS." Record at 11 (emphasis in original).

After Tyler installed the two "pre-mix blower-mixer" units, one of them exploded, injuring a Tyler employee. The employee sued Maxon in the Federal District Court for the Eastern District of Texas, 3 and though Tyler was not named as a party to the action, Tyler did have notice of the suit and declined to defend. Maxon and its insurer then filed this suit seeking indemnification from Tyler for their $600,000 settlement with the injured employee. 4

Following pre-trial discovery, Tyler filed a summary judgment motion. After a hearing on Tyler's motion, both parties were granted leave to file additional authority in support of their positions. 5 The trial court's judgment in favor of Tyler stated in pertinent part:

"ENTRY

This cause was submitted for hearing on May 16, 1983 on the motion of defendants Tyler Pipe Industries Inc. and Tyler Pipe Industries of Texas, Inc. for summary judgment. The parties appeared by their respective counsel and argument was heard. The court having considered the pleadings, answers to interrogatories, admissions, affidavits, arguments and briefs of counsel, and having taken the matter under advisement, finds certain facts undisputed and capable of only one inference, and states its conclusions of law thereon as follows:

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11. That the shipment of the two pre-mix blower-mixers on June 27, 1973, constituted an acceptance by Maxon of the offer extended by Tyler Pipe through its purchase order.

12. That regardless of whether or not Invoice No. 73-10014 became a part of the contract between Tyler Pipe and Maxon, the term and condition titled 'Warning and Covenants' on the reverse side of the invoice constituted a proposed additional term which materially altered the terms and conditions of Tyler Pipe's offer.

13. That the term and condition titled 'Warning and Covenants' did not become a part of the contract between Tyler Pipe and Maxon.

14. That regardless of whether or not the term and condition titled 'Warning and Covenants' became a part of the contract between Tyler Pipe and Maxon, the language contained therein which is the basis for Maxon and Commercial Union's claims for indemnification, does not state in clear and unequivocal terms that Tyler Pipe is to provide indemnity to Maxon for Maxon's own culpability.

15. That Tyler Pipe did not agree to indemnify Maxon for Maxon's own culpability in connection with the purchase and sale of the pre-mix blower-mixers.

16. That there was no course of dealings between Maxon and Tyler Pipe Industries of Texas Inc. sufficient upon which to base a claim for indemnity by Maxon and Commercial Union.

17. That the law is with the defendants Tyler Pipe Industries Inc. and Tyler Pipe Industries of Texas Inc. and against the plaintiffs Maxon Corporation and Commercial Union Assurance Companies.

18. That there are no genuine issues as to any material fact, and there being no just reason for delay, defendants Tyler Pipe Industries Inc. and Tyler Pipe Industries of Texas Inc. are entitled to a final judgment as a matter of law." Record at 381-384.

From the facts summarized it is clear that in some respects this is a classic "Battle of the Forms." On the other hand, in light of the singular nature of the "contractual" clause at issue, it is also a case of first impression for this court. At the outset, however, we are compelled to address a more mundane topic--the applicable standard for granting a summary judgment motion.

Indiana Rules of Procedure, Trial Rule 56(C) states in part:

"The judgment sought shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits and testimony, if any, show that there is no genuine issue as to any material fact and that the...

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