Premix-Marbletite Mfg. Corp. v. Skw Chemicals Inc.

• Court: U.S. District Court — Southern District of Florida
• Writing for the Court: Highsmith
• Citation: Premix-Marbletite Mfg. Corp. v. Skw Chemicals Inc., 145 F.Supp.2d 1348 (S.D. Fla. 2001)
• Decision Date: 24 April 2001
• Docket Number: No. 99-3138CIV.,99-3138CIV.
• Parties: PREMIX-MARBLETITE MANUFACTURING CORP., Plaintiff, v. SKW CHEMICALS, INC., Defendant.

145 F.Supp.2d 1348

PREMIX-MARBLETITE MANUFACTURING CORP., Plaintiff, v. SKW CHEMICALS, INC., Defendant.

No. 99-3138CIV.

United States District Court, S.D. Florida.

April 24, 2001.

COPYRIGHT MATERIAL OMITTED

Michael Shannon, Wallace, Bauman, Legon, Fodiman, Ponce & Shannon, Miami, FL, for Plaintiff.

Michael Kreitzer, Fowler, White, Burnett, Hurley, Banick & Strickroot, Miami, FL, for Defendant.

ORDER

HIGHSMITH, District Judge.

THIS CAUSE is before the Court upon Defendant SKW Chemical, Inc.'s ("SKW") motion for partial summary judgment. For the reasons that follow, SKW's motion is granted with respect to Plaintiff Premix-Marbletite Manufacturing Corp.'s ("Premix") common law tort claims and denied in all other respects.

I. SUMMARY JUDGMENT STANDARD

The purpose of summary judgment is to assess the evidence to determine whether there is an actual need for a trial. Mulhall v. Advance Security, Inc., 19 F.3d 586, 590 (11th Cir.1994); see also Fed.R.Civ.P. 56(e) advisory committee's notes (stating that "[t]he very mission of the summary judgment procedure is to pierce the pleadings and assess the proof in order to see whether there is a genuine need for a trial"). Summary judgment is proper when "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue of material fact." Fed.R.Civ.P. 56(c). If no material issue of fact exists, summary judgment avoids the needless delay and expense of a trial. See 6 James Wm. Moore et al., Moore's Federal Practice § 56.04(1) (2d ed.1996).

What the material facts are in a particular case is determined by the substantive law to be applied in the case. Mulhall, 19 F.3d at 590. "Material facts are those that might affect the outcome of the suit under the governing law." Id. Thus, the mere existence of a factual dispute will not preclude summary judgment. To avoid summary judgment, the factual question must be one that could determine the case.

The party moving for summary judgment is charged with the initial burden of demonstrating the absence of any question of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323-24, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Once the moving party has made such a showing, the party opposing summary judgment is afforded an opportunity to refute that showing. Id. at 324, 106 S.Ct. 2548. Rule 56 states:

When a motion for summary judgment is made and supported as provided in this rule, an adverse party may not rest upon the mere allegations or denials of the adverse party's pleadings, but the adverse party's response, by affidavit or as otherwise provided in this rule, must set forth specific facts showing that there is a genuine issue for trial.

Fed.R.Civ.P. 56(e). Thus, the party opposing summary judgment cannot create a question of fact by simply denying the sworn evidence supporting the moving party's motion.

II. BACKGROUND

This commercial dispute arises from a business relationship between Premix and SKW, whereby Premix regularly purchased chemical compounds from SKW. More specifically, Premix purchased one of the elements utilized to produce its product Poolcote Marcite ("Poolcote") from SKW.¹ Poolcote is marketed to swimming pool contractors as an exterior coating for outdoor pools. Though this action, Premix alleges that SKW's chemical compound, Melement F245 ("F245"), was defective in that it caused discoloration of Poolcote and, consequently, pools finished with Poolcote. Premix's amended complaint asserts causes of action for: (1) breach of implied warranty; (2) breach of express warranty; (3) violation of Florida's Deceptive and Unfair Trade Practices Act, Fla. Stat. § 501.201 et seq.; (4) fraud in the inducement; and (5) negligent misrepresentation. SKW has moved for partial summary judgment, arguing that (a) Premix's claims for fraud in the inducement and negligent misrepresentation are barred by Florida's economic loss rule and (b) Premix's breach of warranty claims are controlled by the provisions contained in SKW's invoices. The motion has now been fully briefed and is ripe for adjudication.

III. UNDISPUTED MATERIAL FACTS

Premix is a Florida corporation, engaged in the business of manufacturing and distributing various construction products. Among the products manufactured and sold by Premix is Poolcote. Poolcote is marketed to contractors as an exterior coating for outdoor pools. Beginning in 1994, Premix purchased from SKW, a Delaware corporation with its principal place of business in Georgia, chemical additives used in the production of Poolcote. Originally, Premix purchased from SKW the chemical additive Melement F10 ("F10"). In 1996, SKW began to advertise to its customers, including Premix, F245 as an alternative to F10. In April of 1997, Premix for the first time placed an order with SKW for F245 rather than F10.² That order was filled by SKW, and Premix continued to order F245 from SKW periodically for about a year. During that time, Premix ceased ordering F10. Premix stopped ordering F245 from SKW, when it began to receive complaints that Poolcote made with F245 was becoming discolored (i.e., turning pink).

Premix and SKW conducted their transactions in a fairly standard commercial manner. That is, orders for additives by Premix from SKW would proceed in the following way: (a) Premix would place an order, via telephone, from its Miami, Florida offices to SKW's Atlanta, Georgia offices at an agreed price; (b) Premix would follow the phone order with a written invoice for the order; (c) SKW would ship the additives from its Atlanta, Georgia offices to Premix's Miami, Florida offices, within a day or two of receiving the phone order (thus, before receiving Premix's written invoice sent via mail); (d) SKW would follow the shipment of the additives with its own written invoice covering the transaction; and (e) after receiving the shipment, Premix would forward SKW payment. These procedures were followed with respect to both the orders for F10 and the orders for F245. Utilizing these procedures, Premix purchased, through three separate shipments, 7,425 pounds of F245 from SKW.

In fine print, on the bottom of each invoice sent by SKW to Premix, the following sentence appeared: "This contract is subject to all terms and conditions on the face and reverse side hereof." The reverse side of each invoice was captioned "TERMS AND CONDITIONS OF SALE" and set forth a comprehensive list of specifications of the sale. Among those terms was a choice of law provision, designating the "law of the State of Delaware" as applying to "matters arising under the Agreement." Also included in the terms of the sale on the reverse side of each invoice was a provision titled "WARRANTIES LIMITATION OF LIABILITY." That provision purported to, inter alia, (a) warrant that the products sold were free of any defects in workmanship and material when delivered, (b) limit SKW's liability for breach of that warranty to replacing, repairing, or reconditioning the defective product, and (c) disclaim all other warranties whether expressed or implied. In addition to the warranties provision on the reverse side of each invoice, the face of each invoice contained the following language:

SKW CHEMICALS WARRANTS THAT THE CHEMICAL COMPOSITION OF THE PRODUCTS LISTED ABOVE CONFORMS TO THE CHEMICALS' DESCRIPTION LISTED ON THE LABEL AFFIXED TO THE PRODUCT. PURCHASER AGREES, THAT IN THE EVENT OF DAMAGES ARISING FROM THE USE OF ANY PRODUCT LISTED ABOVE, TO ACCEPT A REPLACEMENT OF THE PRODUCT OR A REFUND OF THE PURCHASE PRICE OF THE PRODUCTS AT THE SELLER'S OPTION, AS FULL DISCHARGE OF SKW'S LIABILITY. NO ONE IS AUTHORIZED TO MAKE ANY OTHER WARRANTY OR OFFER ANY OTHER DIRECTIONS CONCERNING THESE PRODUCTS. SKW SHALL

NOT BE LIABLE IN ANY EVENT FOR PURCHASER'S LOSS OF PROFITS OR OTHER CONSEQUENTIAL DAMAGES.

The invoices that Premix sent to SKW, by contrast, supplied no terms or conditions of sale, other than quantity and price.

IV. DISCUSSION

A. The Choice of law Question

As noted above, Premix has asserted breach of warranty claims, common law tort claims, and a statutory claim for deceptive trade practices against SKW. In response to SKW's motion for summary judgment, Premix has raised the question: what state's law should govern the breach of warranty claims? There are three conceivable answers: (1) Florida, where SKW delivered the chemicals to Premix; (2) Georgia, where Premix placed the orders; or (3) Delaware, which is designated by SKW's invoices. All three states have adopted the Uniform Commercial Code (the "UCC"); therefore, the question is largely academic. See European Am. Bank & Trust Co. v. Starcrete Int'l Ind., Inc., 613 F.2d 564, 565 n. 1 (5th Cir.1980).³ The Court will, nonetheless, undertake the choice of law analysis because state law enactments and interpretations of the UCC vary⁴ and, according to Premix, the choice of law could be outcome determinative.

Under the rule announced in Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941), the Court must apply the choice of law rules of the state in which it sits when jurisdiction is based upon diversity of the parties. Florida's enactment of the UCC gives effect to choice of law provisions contained in contracts. See Fla. Stat. § 671.105(1) ("when a transaction bears a reasonable relation to this state and also another state or nation, the parties may agree that the law either of this state or such other state or nation will govern their rights and duties").⁵ Thus, if the terms and conditions contained on the reverse side of SKW's invoices were part of the parties' agreement, Delaware law would apply to the breach of warranty claims. As explained infra Part IV(B)(1), though, those terms and conditions, under UCC principles, were not effectively incorporated into the parties' agreement for the sale of F245.

In the absence of a binding choice of law provision,...