Redline Steel LLC v. Nukon Lazer Makine Metal Sanayi Ve Tic, A.S.

• Decision Date: 08 October 2021
• Docket Number: 5:19-cv-01445-MHH
• Parties: REDLINE STEEL, LLC, Plaintiff, v. NUKON LAZER MAKINE METAL SANAYI VE TIC, A.S.; NUKONUS, LLC; and MOORE MACHINE TOOLS, LLC, Defendants.
• Court: U.S. District Court — Northern District of Alabama

REDLINE STEEL, LLC, Plaintiff,
v.
NUKON LAZER MAKINE METAL SANAYI VE TIC, A.S.; NUKONUS, LLC; and MOORE MACHINE TOOLS, LLC, Defendants.

No. 5:19-cv-01445-MHH

United States District Court, N.D. Alabama, Northeastern Division

October 8, 2021

MEMORANDUM OPINION AND ORDER

MADELINE HUGHES HAIKALA, UNITED STATES DISTRICT JUDGE

This case arises from a series of business transactions between Redline Steel, LLC and the Nukon defendants regarding the purchase and operation of industrial laser-cutting machines.^[1] In its complaint, Redline asserts claims for breach of contract, breach of express warranty, breach of statutory warranties, negligent repair, and fraud. (Doc. 30). The Nukon defendants have moved for summary judgment on Redline's claims. (Doc. 38).

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The Nukon defendants assert counterclaims against Redline for breach of contract, unjust enrichment, and slander. (Doc. 14). Redline has moved for summary judgment on portions of its breach of contract and fraud claims, on part of the Nukon defendants' breach of contract counterclaim, and on the entirety of the Nukon defendants' unjust enrichment and slander counterclaims. (Doc. 50). Redline also has filed a motion to strike certain parts of Metin Ertufan's affidavits. (Doc. 64).^[2]

Many of the claims in this matter involve readily-apparent disputes of material fact. Those disputes are genuine, and they must be decided by a jury. This opinion addresses the issues that the Court may resolve as a matter of law.

The opinion is organized in four sections. First, the Court outlines the standard for a Rule 56 motion for summary judgment. Then, the Court provides a

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brief overview of the parties' summary judgment evidence. Next, the Court addresses the Nukon defendants' motion for summary judgment, viewing the evidence in the light most favorable to Redline. Finally, the Court evaluates Redline's motion for partial summary judgment, viewing the evidence in the light most favorable to the Nukon defendants.

I.

A district court “shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). To demonstrate a genuine dispute as to a material fact precluding summary judgment, the party opposing summary judgment must cite “to particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations (including those made for purposes of the motion only), admissions, interrogatory answers, or other materials.” Fed.R.Civ.P. 56(c)(1)(A). “The court need consider only the cited materials, but it may consider other materials in the record.” Fed.R.Civ.P. 56(c)(3).

“[A] litigant's self-serving statements based on personal knowledge or observation can defeat summary judgment.” United States v. Stein, 881 F.3d 853, 857 (11th Cir. 2018); see also Feliciano v. City of Miami Beach, 707 F.3d 1244, 1253 (11th Cir. 2013) (“To be sure, Feliciano's sworn statements are self-serving,

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but that alone does not permit us to disregard them at the summary judgment stage.”). Even if a district court doubts the veracity of certain evidence, the court cannot make credibility determinations; that is the work of jurors. Feliciano, 707 F.3d at 1252 (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986)). When considering a motion for summary judgment, a district court must view the evidence in the record in the light most favorable to the non-moving party and draw reasonable inferences in the non-moving party's favor. White v. Beltram Edge Tool Supply, Inc., 789 F.3d 1188, 1191 (11th Cir. 2015).

Accordingly, when evaluating the Nukon defendants' motion for summary judgment, the Court views the evidence in the light most favorable to Redline and draws all reasonable inferences in its favor. When considering Redline's motion for partial summary judgment, the Court views the evidence in the light most favorable to the Nukon defendants and draws all reasonable inferences in their favor.

II.

Redline Steel, LLC is a manufacturing company that specializes in “the production and sale of home metal décor.” (Doc. 59-1, p. 2, ¶ 3). Colin Wayne Erwin organized Redline in early 2016; he is the entity's sole owner. (Doc. 44, p. 5, tpp. 10-11; Doc. 59-1, p. 2, ¶ 3). Redline sells stock items which the company keeps in inventory and custom items which the company makes to order. (Doc. 59-1, p.

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20, ¶ 82). To create its products, Redline uses industrial fiber laser cutting machines to cut patterns out of sheets of steel. (Doc. 59-1, p. 3, ¶ 5).

Initially, Redline used plasma tables to create its products. (Doc. 43, p. 4, tp. 9; Doc. 44, p. 5, tpp. 11-12). Plasma tables are industrial machines which cost approximately $20, 000 and are used to cut steel. (Doc. 44, p. 5, tp. 11; Doc. 59-1, p. 4, ¶ 10). Their production capacity is limited. (Doc. 59-1, p. 4, ¶ 11). Industrial lasers offer “massive differences of cut speed, cut quality, the amount of slag and just stuff on the back of pieces.” (Doc. 44, p. 5, tp. 11). As Redline grew, an employee, Brad Ferch, approached Mr. Erwin about upgrading the equipment to Nukon fiber lasers. (Doc 44, p. 7, tpp. 19-21; Doc. 59-1, p. 4, ¶ 13). Nukon fiber lasers cost approximately $500, 000. (Doc. 46, p. 2). Mr. Erwin decided to make the significant investment to increase production capacity and potentially increase sales. (Doc. 59-1, pp. 4-5, ¶ 13).

Nukon Turkey, a Turkish company, manufactures laser machines. (Doc. 42, pp. 4-5, tpp. 16-17). The company does not keep machines in stock; it builds each machine to order. (Doc. 42, p. 7, tp. 27). Nukon Turkey has distributors in each country where it does business. (Doc. 42, p. 4, tp. 14).

Nukon Turkey manufactures industrial steel-fabrication equipment in Turkey and sells and delivers the equipment to buyers in the United States through Nukon US, Nukon Turkey's exclusive U.S. distributor. (Doc. 20-1, p. 2 - SEALED). Matt

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Moore is the CEO of Nukon US. (Doc. 49-9, p. 14, tp. 13). Mr. Moore also is the CEO of Moore Machine Tools, LLC. (Doc. 49-9, p. 14, tp. 13). Nukon Turkey provides marketing materials to Nukon U.S. and technical support to Nukon US's customers. (Doc. 42, p. 6, tpp. 22-24). When a customer reports a problem with a Nukon laser, Nukon U.S. troubleshoots the problem and resolves some problems independently. Nukon Turkey handles more serious technical issues. (Doc. 42, p. 7, tpp. 25-26).

Redline bought two fiber lasers and a compact lift load/unload automation system with a ten-shelf tower from Nukon US. (Doc. 30, p. 4, ¶ 18). Redline bought the fiber lasers to cut sheets of steel for Redline products. Redline referred to the first fiber laser as “Alpha” and to the second as “Bravo.” (Doc. 44, p. 7, tp. 20). Redline bought the “Tower” to make production more efficient and orderly. (Doc. 42, pp. 15-16, tpp. 60-63).

There is no single purchase agreement between Redline and the Nukon defendants for the equipment. Instead, the “purchase agreement” involves a series of emails, invoices, and verbal agreements. (Doc. 43, p. 8, tpp. 23-24). The parties contest the terms of the “purchase agreement, ” and Redline contests the extent to which the Nukon defendants fulfilled those terms. Redline complains that it experienced post-installation issues with both lasers, (Doc. 30, pp. 8, 10, ¶¶ 47, 67), and that the Nukon defendants were responsible for and failed to remedy the

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operating issues, (Doc. 30, p. 15, ¶ 101). The Nukon defendants attribute Redline's problems with the lasers to Redline's purportedly improper electrical infrastructure, lack of maintenance, and untrained employees. The Nukon defendants contend that they addressed Redline's complaints to the extent required by the terms of the parties' contractual relationship. (Doc. 46, pp. 2-3).

III. Moore Machine Tools

Mr. Moore is the CEO of both Nukon U.S. and Moore Machine Tools. (Doc. 49-9, p. 14, tp. 13). By design, Nukon U.S. is a distinct entity from Moore Machine Tools. (Doc. 49-9, pp. 20-21, tpp. 19-20). Nukon U.S. subcontracts its employees through Moore Machine Tools; Mr. Moore is the only employee on Nukon US's payroll. (Doc. 49-9, p. 21, tp. 20).

Redline has named Moore Machine Tools as a defendant in this action and has asserted a fraud claim against the company. (Doc. 30, p. 24). Redline alleges that “[a]t all relevant times, [Mr.] Moore was acting in his capacity as National Sales Manager for NukonUS, agent for Nukon Turkey, and Managing Member of [Moore Machine Tools].” (Doc. 30, p. 24, ¶ 166). In their brief in support of their motion for summary judgment, the Nukon defendants argue that Mr. Moore's statements on behalf of Nukon U.S. are not attributable to Moore Machine Tools. (Doc. 46, p. 21). Redline disagrees, arguing that Mr. Moore communicated with Redline from his

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Moore Machine Tools email address, that “invoices from Nukon Turkey for Alpha and Bravo expressly reference [Moore Machine Tools] as the recipient of the lasers, rather than NukonUS, ”...