Performance Contractors, Inc. v. Great Plains Stainless, Inc., CIVIL ACTION NO. 11-485-JJB
| Decision Date | 02 November 2012 |
| Docket Number | CIVIL ACTION NO. 11-485-JJB |
| Parties | PERFORMANCE CONTRACTORS, INC. v. GREAT PLAINS STAINLESS, INC. |
| Court | U.S. District Court — Middle District of Louisiana |
RULING ON DEFENDANT'S MOTIONS FOR SUMMARY JUDGMENT
Before the Court are Motions for Partial Summary Judgment filed by Defendant Great Plains Stainless, Inc. ("Great Plains") (Docs. 37 and 46). Both motions are opposed. Oral argument is unnecessary.
This suit arises out of the construction of the Plaquemine VCM Plant ("the Project") in Iberville Parish, Louisiana. Performance Contractors, Inc. ("Performance") entered into contract with Shintech Louisiana LLC ("Shintech") calling for Performance to provide pipe fabrication and installation services for the Project. Performance claims it issued Purchase Order No. 45140011 to Louisiana Chemical Pipe Valve and Fitting, Inc. ("Louisiana Chemical") for piping and fittings for the Project. Louisiana Chemical ordered the piping and fittings from Great Plains. Performance claims that Great Plains manufactured and supplied the fittings, and that numerous fittings were marked "GPSS." Great Plains requested the fittings be inspected prior to their shipment from China to the United States. Performance asserts that the fittings failed to comply with the product specifications found on Great Plains' website, the specifications set forth in the applicable purchase order, and other applicable standards including certain ASME, ASTM, and MSS standards. Performance claims Great Plains refused to replace the fittings. Performance filed this lawsuit asserting claims for redhibition and products liability and seekingdamages incurred as a result of the allegedly defective fittings provided by Great Plains. Performance subsequently filed a Supplemental and Amended Complaint (Doc. 29) asserting claims as the assignee of Louisiana Chemical's rights against Great Plains for redhibition, products liability, breach of contract, and bad faith and misrepresentation. All claims in this lawsuit arise under Louisiana law.
Summary judgment is appropriate when "the movant shows that there is no genuine dispute as to any material fact." Fed. Rule Civ. P. 56(a). The party seeking summary judgment carries the burden of demonstrating that there is an absence of evidence to support the non-moving party's case. Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986). When the burden at trial rests on the non-moving party, the moving party need only demonstrate that the record lacks sufficient evidentiary support for the non-moving party's case. Id. The moving party may do this by showing that the evidence is insufficient to prove the existence of one or more essential elements of the non-moving party's case. Id. A party must support its summary judgment position by "citing to particular parts of materials in the record" or "showing that the materials cited do not establish the absence or presence of a genuine dispute." Fed. Rule Civ. P. 56(c)(1).
Although the Court considers evidence in a light most favorable to the non-moving party, the non-moving party must show that there is a genuine issue for trial. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248-49 (1986). Conclusory allegations and unsubstantiated assertions will not satisfy the non-moving party's burden. Grimes v. Tex. Dep't of Mental Health, 102 F.3d 137, 139-40 (5th Cir. 1996). Similarly, "[u]nsworn pleadings, memoranda or the like are not, of course, competent summary judgment evidence." Larry v. White, 929 F.2d 206, 211 n.12 (5th Cir. 1991). If, once the non-moving party has been given the opportunity to raise a genuine factissue, no reasonable juror could find for the non-moving party, summary judgment will be granted for the moving party. Celotex, 477 U.S. at 322.
Great Plains' first Motion for Partial Summary Judgment (Doc. 37) seeks dismissal of Performance's claims on behalf of itself and Louisiana Chemical, which it argues are precluded by a limited liability provision in the sales documentation exchanged between the parties. Great Plains bases its argument on the Louisiana law describing waiver of warranty for redhibitory defects. Great Plains argues that its terms and conditions contain a limitation of liability provision, and that these terms and conditions were contained in every quote, order, acknowledgement, and invoice that it issued to Louisiana Chemical. Great Plains presents evidence that numerous items of sales documentation for the Shintech order were provided to Louisiana Chemical beginning January 19, 2010. Great Plains also presents evidence that it has had a business relationship with Louisiana Chemical for a number years, has filled about fifty orders for Louisiana Chemical in the last five years, and that Great Plains' standard terms and conditions have remained the same throughout the parties' relationship. Great Plains asserts that the limitation of liability provision in question states: "GPS assumes no responsibility for claims of product defects beyond replacement, repair, or refund of payment to be determined solely by GPS."
A "seller warrants the buyer against redhibitory defects, or vices, in the thing sold." La. Civ. Code art. 2520. "[P]arties may agree to an exclusion or limitation of the warranty against redhibitory defects." La. Civ. Code art. 2548. In order to be effective, a waiver of warranty must: (1) be written in clear and unambiguous terms; (2) be contained in the contract; and, (3) either be brought to the attention of the buyer or explained to him. Prince v. Paretti PontiacCompany, Inc., 281 So. 2d 112, 117 (La. 1973); Boos v. Benson Jeep-Eagle Co., Inc., 98-1424 (La. App. 4 Cir. 6/24/98); 717 So. 2d 661, 663-64; Ross v. Premier Imports, 96-2577 (La. App. 1 Cir. 11/7/97); 704 So. 2d 17, 21; Keaty v. Moss Motors, Inc., 93-1452 (La. App. 3 Cir. 6/1/94); 638 So. 2d 684, 687. The seller bears the burden of proving that the buyer waived the warranties. Boos, 717 So. 2d at 664; Pias v. Wiggins, 96-499 (La. App. 3 Cir. 10/09/96); 688 So. 2d 1103, 1106. "Such waivers are strictly construed against the seller." Boos, 717 So. 2d at 664; Guillory v. Morein Motor Company, Inc., 322 So. 2d 375, 378 (La. App. 3 Cir. 1975).
For a waiver's terms to be clear and unambiguous, "the language used must be comprehendible by the average buyer." Jeffers v. Thorpe, 95-1731 (La. App. 4 Cir. 1/19/96); 673 So. 2d 202, 205; Thibodeaux v. Meaux's Auto Sales, Inc., 364 So.2d 1370, 1371 (La. App. 3 Cir. 1978). Great Plains argues the one sentence waiver of warranty provision contains clear language to outline Great Plains' limited responsibility for claims of product defects, that it is not responsible for consequential or other special damages that may occur from a product defect. It argues that the provision is short, concise, and devoid of legalese. Performance argues that the provision is silent in regard to redhibition or implied warranties, and that the provision therefore is not clear and unambiguous.1 Performance cites LaRoche Industries, Inc., v. Affholder, Inc., 1997 U.S. Dist. WL 184834 (E.D. La. 1997), for this proposition. LaRoche Industries held that a waiver which was silent as to redhibition or implied warranties, since it did not expressly address redhibition or implied warranties, was not clear and unambiguous as required by Louisiana Civil Code article 2548. Id. at *3. It distinguished such silence from the circumstances of certainLouisiana cases which enforced a waiver or limitation of implied warranties, noting that the contracts in those cases specifically addressed implied warranties. Id. at *2; Louisiana National Leasing Corp. v. ADF Serv., Inc., et al, 377 So. 2d 92, 95 (La. 1979); FMC Corp. v. Continental Grain Co., 355 So. 2d 953, 956 (La. App. 4 Cir. 1977).
The Court finds LaRoche applicable to the case at hand. As in LaRoche, Great Plains' limitation of liability provision is silent as to redhibition and implied warranties. Accordingly, the provision is not clear and unambiguous as required by law. The Court therefore does not reach the other elements of an effective limitation of liability. As Great Plains cannot prove that the provision is clear and unambiguous, it fails to carry its burden for proving that the limitation of liability provision is effective against Performance as required by the law addressing waiver of warranty for redhibitory defects.
Great Plains' second Motion for Partial Summary Judgment (Doc. 46) moves for summary judgment dismissing Plaintiff's Louisiana Products Liability Act ("LPLA") and bad faith seller redhibition claims which are based on Great Plains' status as the apparent manufacturer of the subject piping and fittings. Great Plains argues that it cannot be the "manufacturer" as that term is defined by applicable industry standards and an agreed definition. This argument is split into three parts: (1) that Great Plains is not a manufacturer according to the industry standards; (2) that the apparent manufacturer doctrine does not apply; and (3) that Performance can provide no evidence that Great Plains can be considered a manufacturer under the "alter ego" definition of "manufacturer."
The Court first addresses Great Plains' argument that it is not a manufacturer according to the ASTM standards, some of the standards applicable to the products that the form the basisof this lawsuit. Great Plains claims Performance agreed these standards would apply to the products in question, and accordingly, these standards apply to determine the definition of manufacturer. Performance claims that it did not agree to the ASTM definition of manufacturer. Great Plains has not carried its burden in asserting that it is not a manufacturer under the ASTM standards. Further, Great Plains fails to adequately explain how the ASTM standards and the ASTM definition of manufacturer affect Performance's claims that Great Plains is a manufacturer under Louisiana law.
The Court next addresses Great Plains'...
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