McDonald Bros., Inc. v. Tinder Wholesale, LLC

• Decision Date: 06 April 2005
• Docket Number: No. 1:03CV00817.,1:03CV00817.
• Citation: 395 F.Supp.2d 255
• Court: U.S. District Court — Middle District of North Carolina
• Parties: MCDONALD BROTHERS, INC., Plaintiff, v. TINDER WHOLESALE, LLC, Defendant.

395 F.Supp.2d 255

MCDONALD BROTHERS, INC., Plaintiff, v. TINDER WHOLESALE, LLC, Defendant.

No. 1:03CV00817.

United States District Court, M.D. North Carolina.

April 6, 2005.

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Thomas M. Van Camp, Pinehurst, NC, for Plaintiff.

Brenda Straub McClearn, Greensboro, NC, for Defendant.

MEMORANDUM OPINION and ORDER

OSTEEN, District Judge.

Plaintiff McDonald Brothers, Inc. ("McDonald"), a North Carolina corporation with its principal place of business in Moore County, North Carolina, brings this diversity action against Defendant Tinder Wholesale, LLC ("Tinder"), a Virginia limited liability company with its principal place of business in Warrenton, Virginia. Plaintiff brings claims against Defendant for breach of the implied warranty of merchantability; breach of the implied warranty of fitness for a particular purpose; breach of express warranty; indemnity; and unfair and deceptive trade practices, N.C. Gen.Stat. § 75-1.1 (" § 75-1.1"). This matter is now before the court on Defendant's second motion to dismiss, or in the alternative, for summary judgment, with exhibits and affidavits in support.

For the reasons set forth herein, Defendant's motion to dismiss will be granted in part and denied in part.

I. PROCEDURAL BACKGROUND

After Plaintiff instituted this diversity action, Defendant filed a Motion to Dismiss or, in the Alternative, for Summary Judgment in lieu of an answer. Defendant filed the affidavit of W. Michael Tinder, Sr., the manager and president of Defendant, and exhibits in support of its motion. Plaintiff responded by filing a Motion to Allow Discovery Prior to Ruling on Defendant's Dispositive Motions, pursuant to Rules 12(b) and 56(f) of the Federal Rules of Civil Procedure. Contemporaneously therewith and in support of its motion, Plaintiff filed affidavits of Angus A. McDonald, Jr., president of Plaintiff corporation, and Thomas M. Van Camp, attorney for Plaintiff, both of whom outlined issues requiring discovery. Notwithstanding its motion to allow discovery, Plaintiff subsequently filed a brief in opposition to Defendant's motion¹ along with six affidavits and supporting exhibits. Shortly thereafter, Plaintiff amended its complaint. Defendant then filed a second motion to dismiss or, in the alternative, for summary judgment. All motions before the court are now fully briefed.

The court must first decide whether Defendant's motion should be treated as one for dismissal or summary judgment. Rule 12(b) of the Federal Rules of Civil Procedure ("Rule 12(b)") provides:

If, on a motion asserting the defense numbered (6) to dismiss for failure of the pleading to state a claim upon which relief can be granted, matters outside the pleading are presented to and not excluded by the court, the motion shall be treated as one for summary judgment and disposed of as provided in Rule 56.

Fed.R.Civ.P. 12(b). Whether to accept the submission of any material beyond the pleadings that is offered in conjunction with a Rule 12(b)(6) motion, and therefore whether to convert a motion under Rule 12(b)(6) to one under Rule 56, is within the discretion of the court. Pueschel v. United States, 369 F.3d 345, 353 n. 3 (4th Cir.2004). The court's discretion, however, is not limitless. As a general rule, summary judgment is only appropriate after adequate time for discovery. Evans v. Technologies Applications and Serv. Co., 80 F.3d 954, 961 (4th Cir.1996). The court does not have the authority "to completely deny a party all opportunity to take depositions or to get affidavits essentially needed to get a fair trial of [its] case." First Nat'l Bank of Ariz. v. Cities Serv. Co., 391 U.S. 253, 306, 88 S.Ct. 1575, 1601, 20 L.Ed.2d 569 (1968). Even if the court were to conclude that it should consider "matters outside the pleading," the court would be required to give the parties a "reasonable opportunity to present all material made pertinent to such a motion by Rule 56." Fed.R.Civ.P. 12(b); see Fed.R.Civ.P. 56(f); see also Gay v. Wall, 761 F.2d 175, 177-78 (4th Cir.1985) (holding trial court's treatment of motion to dismiss as one for summary judgment was an abuse of discretion where plaintiff was not given a reasonable opportunity for discovery).

Here, the court is convinced of the present inappropriateness of summary judgment. The court has not yet issued a pretrial order and the parties have had no opportunity for discovery, either formal or informal. Additionally, Plaintiff has filed affidavits complying with Rule 56(f) of the Federal Rules of Civil Procedure. The affidavits identify the need for discovery on factual issues, such as the execution of certain documents, course of conduct between the parties, handling and alteration of the products in question, and representations and conduct of Defendant after notification of the product defects. (Van Camp Aff. ¶ 5.) Plaintiff asserts compelling arguments that the determination of these factual issues, and more, affect the disposition of its claims and any relevant defenses. Under the circumstances, and finding no prejudice to Defendant, the court sees little reason to address summary judgment at this time and will address Defendant's arguments for dismissal of Plaintiff's amended complaint.

II. FACTUAL BACKGROUND

The following facts are presented in the light most favorable to Plaintiff, as alleged in Plaintiff's amended complaint.²

Plaintiff McDonald is in the business of selling building products and materials to contractors and other retail customers in and around Moore County, North Carolina. Plaintiff purchases products from numerous sellers, manufacturers, and distributors, including Defendant Tinder, a Virginia-based wholesale seller and distributor of lumber products. Plaintiff began purchasing lumber products from Defendant in late 2001 or early 2002.³

When purchasing building materials from Defendant, Plaintiff would place an order and the product would be shipped to Plaintiff's place of business in Moore County, North Carolina. The shipments would be accompanied by a delivery ticket, which identified the product, but not the price, of the lumber shipped. Approximately 10-20 days after the product was received, Plaintiff would receive an invoice from Defendant. The invoice would include the product sold, quantity, and price, among other information. The reverse side of the invoice was pre-printed with eleven "Terms and Conditions." These terms and conditions included, inter alia, provisions for a payment schedule, default, handling charges, finance charges, governing law, and limitations of liability. The terms and conditions did not, however, exclude the warranties of merchantability or fitness for a particular purpose, and did not state the product was being sold "as is." (Am.Compl.¶ 16.)

From May 2002 to September 2002, Plaintiff purchased from Defendant finger-jointed trim boards used in home construction. Plaintiff purchased trim boards of various dimensions. The trim boards were originally purchased by Defendant from Tumac Lumber Co. ("Tumac"), a wood products sourcing and marketing company located in Redding, California. Once acquired from Tumac, Defendant applied a primer coat to the trim boards and resold the boards to Plaintiff. Plaintiff, in turn, sold the trim boards to several contractors in Moore County, North Carolina, including Bowness Construction ("Bowness"). Bowness later installed the trim boards on several large residential homes constructed in 2002 and 2003, including the Bahner and Hardinger jobs.

In the early fall of 2002, Bowness notified Plaintiff that some of the trim boards had failed in numerous places at both the Bahner and Hardinger jobs. More particularly, the trim boards had separated at the finger joints due to improper or insufficient application of glue or adhesive. Plaintiff immediately notified Defendant of the defect. In October 2002, Ken Rogerson, one of Defendant's representatives, visited the job sites and acknowledged the problem. Defendant subsequently indicated, as it had done on several prior warranty claims regarding other products, it would honor Plaintiff's warranty claim and instructed Plaintiff to replace the defective trim.

In February 2003, Plaintiff received another complaint from Bowness regarding failure of the trim boards. Plaintiff again immediately notified Defendant of the defect. Defendant sent Stan Hedgecock, another of its representatives, to the Moore County job site on March 4, 2003 and March 27, 2003. Mr. Hedgecock took samples of the trim boards for testing and evaluation.

On March 31, 2003, Walter Jones, Defendant's sales manager, emailed Mr. McDonald regarding the trim board failure. Mr. Jones stated Defendant needed to investigate the problem in order to determine the "origin of the affected product." (Am. Compl. ¶ 22.) Mr. Jones said once Defendant had determined the origin, Defendant would be able to "address the questions of product failure, job site conditions, and installation." (Id.) Defendant indicated to Plaintiff if the product was proven to be defective, Defendant would honor Plaintiff's warranty claim and pay for the cost of repair.

On April 28, 2003, Mr. Jones again emailed Mr. McDonald. Mr. Jones requested Mr. McDonald provide Defendant with information as to "what you are looking for to fix the problem" and requested estimates of material and labor to repair the problem. (Id. ¶ 23.) Bowness subsequently provided Plaintiff a repair estimate of $150,000 for labor and materials to replace the defective trim boards. Plaintiff submitted that estimate to Defendant.

Plaintiff also retained Howard Rigsby, an engineer with Accident Reconstruction located in Raleigh, North Carolina, to inspect and test the trim boards on two of the homes constructed by Bowness, as well as to test boards which Plaintiff retained at its retail facility. Mr. Rigsby determined, after completing his tests, that the trim boards did not...