Travelers Insurance Companies v. Demarle, Inc. USA, 2003-527

• Decision Date: 04 May 2005
• Docket Number: No. 2003-527,2003-527
• Citation: 878 A.2d 267
• Parties: Travelers Insurance Companies and Greyston Bakery, Inc. v. Demarle, Inc., USA.
• Court: Vermont Supreme Court

878 A.2d 267

Travelers Insurance Companies and Greyston Bakery, Inc. v. Demarle, Inc., USA.

No. 2003-527, December Term, 2004

Supreme Court of Vermont

May 4, 2005

ENTRY ORDER

In the above-entitled cause, the Clerk will enter:

¶ 1. Plaintiffs Travelers Insurance Companies and Greyston Bakery, Inc. appeal the superior court's order granting defendant Demarle, Inc., USA summary judgment and dismissing plaintiffs' lawsuit alleging that Demarle sold Greyston defective baking mats that contaminated Greyston's food products. The trial court concluded that plaintiffs failed to allege facts from which they could prove that defective or warranted mats caused the contamination. We affirm.

¶ 2. Greyston is a New York corporation that manufactures baked goods and sells them to other companies, primarily Ben & Jerry's Homemade, Inc., for incorporation into other products such as ice cream. In early October 1997, Ben & Jerry's noticed small fibers in brownies that it had purchased from Greyston. After notifying Greyston of the problem, Ben & Jerry's disposed of approximately 47,000 gallons of potentially contaminated ice cream and yogurt worth an estimated $600,000. Greyston's ensuing investigation revealed that the silicon-based baking mats it used to keep the brownies from sticking to its oven pans had caused the contamination. Greyston had been purchasing the baking mats, called Silpats, from Demarle since 1993. During the first week of October 1997, after discovering the contamination, Greyston disposed of its entire stock of Silpats. On October 22, Greyston informed Demarle that Ben & Jerry's had found fibers from the Silpats in Greyston's brownies. Eventually, Greyston and its insurer, Travelers Insurance Companies, paid Ben & Jerry's over $450,000 in exchange for an assignment of any rights the ice cream manufacturer had against Demarle. Plaintiffs then sued Demarle based on claims of products liability, breach of warranty, negligence, and indemnity and contribution. The superior court granted Demarle's motion for summary judgment and dismissed plaintiffs' claims, ruling that (1) with respect to the products liability and breach-of-warranty claims, plaintiffs failed to demonstrate that they would be able to prove by a preponderance of the evidence that defective or warranted mats caused the contamination; (2) the negligence claim was foreclosed by the economic-loss rule; and (3) the indemnity and contribution claims were dependent on the other causes of action that had been dismissed.

¶ 3. On appeal, plaintiffs do not challenge the superior court's dismissal of their negligence claim, but argue that they presented genuine issues of material fact creating a jury question as to whether Demarle breached express and implied warranties by selling Greyston defective Silpats. The issue for this Court, then, is whether the superior court erred by ruling, as a matter of law based on plaintiffs' alleged facts, that plaintiffs would be unable to prove causation by a preponderance of the evidence. In an appeal from a summary judgment ruling, we apply the same standard as that applied by the trial court; therefore, we must determine whether genuine issues of material fact exist and, if not, whether any party is entitled to judgment as a matter of law. Carr v. Peerless Ins. Co., 168 Vt. 465, 466, 724 A.2d 454, 455 (1998). If we conclude that there are "genuine issues of material fact, within the meaning of V.R.C.P. 56(c), we must reverse the decision granting summary judgment." Messier v. Metro. Life Ins. Co., 154 Vt. 406, 409, 578 A.2d 98, 99 (1990). In deciding whether there are genuine issues of material fact, we regard the facts asserted in opposition to summary judgment as true as long as they are supported by affidavits or other evidentiary material. Pierce v. Riggs, 149 Vt. 136, 139, 540 A.2d 655, 657 (1987). The moving party has the burden of proof, and the opposing party is " 'given the benefit of all reasonable doubts and inferences in determining whether a genuine issue [of material fact] exists.' " Messier, 154 Vt. at 409, 578 A.2d at 100 (quoting Weisburgh v. Mahady, 147 Vt. 70, 72, 511 A.2d 304, 305 (1986)).

¶ 4. Here, to the extent that warranties existed,¹ the parties agree that Demarle warranted the Silpats for one year (or 1000 to 2000 uses) based on Greyston's anticipated needs. The trial court ruled that, accepting plaintiffs' alleged facts as true, plaintiffs would be able to show, at best, only a mere possibility that the contamination was caused by mats that had been in use for less than one year. The court arrived at this conclusion based on the following facts: (1) the "system" that Greyston employed to detect and remove worn-out mats from its manufacturing process was nothing more than a sporadic visual inspection that did not track the age or use of any individual mat used in production; and (2) Greyston destroyed all of the mats in both production and reserve immediately after Ben & Jerry's discovered the contamination, so that neither plaintiffs nor defendant could identify the age and condition of the mats in production at the time of the contamination. According to the court, no Greyston employee offered any personal knowledge linking fibers to mats that were in use for less than one year, and Greyston's hit-or-miss visual inspection replacement system could suggest only the possibility that the contamination resulted from mats that had been used for less than one year. Further, the court rejected Demarle's mathematical probability argument, which presumed that mats in use for less than one year had caused at least some of the contamination because Greyston had only approximately 400 mats in production at any given time and had purchased over 1700 mats in the four years preceding the contamination, including 500 mats shortly before the contaminated brownies were manufactured. In the court's view, this argument again raised only a mere possibility that mats in use for less than one year had caused the contamination, and a mere possibility was insufficient to support a judgment based on a showing of causation by a preponderance of the evidence.

¶ 5. On appeal, plaintiffs contend that they alleged facts from which a rational jury could conclude that the mats in use in September 1997, when the brownies were contaminated, had been in use for less than one year. The principal piece of evidence that plaintiffs rely on is a single sentence in a so-called "chronology of events" purportedly written by Greyston's president and CEO in the fall of 1997 and apparently attached to deposition testimony that was submitted to the trial court in opposition to Demarle's summary judgment motion. For a variety of related reasons, we conclude that plaintiffs may not rely on this statement on appeal to demonstrate that a genuine issue of material fact exists.

¶ 6. Under V.R.C.P. 56(c)(2), the party opposing summary judgment must include, along with an affidavit and memorandum, "a concise statement of the material facts as to which it is contended that there exists a genuine issue to be tried." All statements made by the moving party are "deemed to be admitted unless controverted by the statement required to be served by the opposing party." Id. The reason for requiring a concise statement of disputed material facts "is to focus more directly the arguments on motions for summary judgment by requiring specifications by the parties as to the facts that they contend either are or are not in dispute." Reporter's Notes, 1995 Amendment, V.R.C.P. 56. Further, affidavits opposing...