Westport Marina Inc. v. Boulay

• Decision Date: 24 March 2010
• Docket Number: Civil Action No. 06–CV–5569.
• Citation: 783 F.Supp.2d 344,71 UCC Rep.Serv.2d 780
• Parties: WESTPORT MARINA, INC., d/b/a Shipstore.Com; the Coast Distribution System, Inc.; Kellogg Marine, Inc.; and C.C. Marine Distributors, Inc., Plaintiffs,v.Adam BOULAY; the Clean Seas Company; ABC Corps 1–10 (fictitious entities); and John Does 1–10 (fictitious individuals), Defendants.
• Court: U.S. District Court — Eastern District of New York

783 F.Supp.2d 344

71 UCC Rep.Serv.2d 780

WESTPORT MARINA, INC., d/b/a Shipstore.Com; the Coast Distribution System, Inc.; Kellogg Marine, Inc.; and C.C. Marine Distributors, Inc., Plaintiffs,

v.Adam BOULAY; the Clean Seas Company; ABC Corps 1–10 (fictitious entities); and John Does 1–10 (fictitiousindividuals), Defendants.

Civil Action No. 06–CV–5569.

United States District Court, E.D. New York.

March 24, 2010.

Bennett, Giuliano, McDonnell & Perrone, LLP, by Joseph J. Perrone, Esq., Matthew J. Cowan, Esq., New York, NY, for Plaintiffs.Chance & McCann, LLC, by Michael J. Fioretti, Esq.(Pro Hac Vice), Robert D. Fischer, Esq.(Pro Hac Vice), Bridgeton, NJ, for DefendantClean Seas Company.

MEMORANDUM & ORDER

HURLEY, Senior District Judge:

I.INTRODUCTION

Presently before the Court is a motion for summary judgment filed by defendantClean Seas Company(“Clean Seas”) pursuant to Federal Rule of Civil Procedure 56.Plaintiffs' Second Amended Complaint seeks recovery against Clean Seas on the following twelve counts: (I) Breach of Contract, (II) Negligence, (III) Breach of Express Warranty, (IV) Breach of Implied Warranty of Merchantability, (V) Breach of Implied Warranty of Fitness for a Particular Purpose, (VI) Common Law Fraud, (VII) Negligent Misrepresentation, (VIII) Intentional Misrepresentation, (IX) Defective Product (Strict Products Liability), (X) Indemnity, (XI) Contribution, and (XII)Request for Attorneys' Fees and Costs.Clean Seas' motion for summary judgment targets all twelve counts.For the reasons stated below, Clean Seas' motion is GRANTED in part and DENIED in part.

II.FACTUAL BACKGROUND

The following facts are undisputed unless otherwise noted.¹Clean Seas was a corporation incorporated under the laws of the State of Florida, with its only office in Jacksonville, Florida.(Def.'s LocalCiv. R. 56.1Statement of Undisputed Material Facts (“Def.'s 56.1”)¶ 1.)The product at issue in this case(the “Product”) was marketed as an enzymatic boat coating designed to inhibit marine growth on boat bottoms.(Pls.'Resp. to Def.'s LocalCiv. R. 56.1Statement of Undisputed Material Facts (“Pls.'56.1”)¶ 41.)The Product was designed and patented by Clean Seas, manufactured by Suntec, Inc., and sold and distributed to Plaintiffs by Dolphinite, Inc.(“Dolphinite”) under Dolphinite's label as “Go Fast Bottom Paint” and “Go Fast Inflatable Bottom Coating.”(Def.'s 56.1 ¶ 3.)The Product was manufactured beginning in February 2003 and was first received by end-user customers in or around March 2003.(Pls.' 56.1¶ 54.)By April 2003, Dolphinite and Clean Seas had begun to receive complaints regarding the effectiveness of the Product.(Pls.' 56.1¶ 55.)Dolphinite filed for bankruptcy in 2004 and is no longer conducting business.(Def.'s 56.1 ¶ 5;see alsoPls.' RevisedDecl. of Deps. Ex. A, Vol. 1, 16:17–20.)Clean Seas terminated its business operations in September 2005.(Def.'s 56.1 ¶ 4.)

Plaintiffs are wholesale distributors of marine products who sold the Product to retail distributors, who in turn sold the Product to end-user customers.(Def.'s 56.1 ¶ 6.)Plaintiffs do not allege that they suffered property damage as a result of applying the Product to boats owned by them.(Def.'s 56.1 ¶ 7.)Rather, Plaintiffs allege that the failure of the Product to perform as expected caused them to suffer economic losses in excess of $985,000.(Def.'s 56.1 ¶ 36;see alsoSecondAm. Compl. 16–17.)Plaintiffs acknowledge that they are not parties to a contract with Clean Seas, either written or oral.(Pls.' Mem. in Opp'n to Mot. forSumm. J. 16.)Indeed, Plaintiffs had no direct contact with Clean Seas representatives prior to receiving complaints from end-user customers.(Def.'s 56.1¶¶ 13, 15, 20, 21, 22 & 27.)²Instead, Plaintiffs were introduced to the Product by and purchased the Product from Adam Boulay(“Boulay”), President and owner of Dolphinite.(Def.'s 56.1¶ ¶ 8, 18, 19 & 26.)

The labels on the Product did, however, include Clean Seas' logo and the notation, “With MET Inside,” a reference to Clean Seas' patented enzymatic antifouling additive.( SeePls.' Revised Decl. of Documentary ExhibitsEx. 1, 2 & 5.)The labels also contained the following statements: “Keeps hull exceptionally clean from marine growth!Increase speed, Reduce drag, Maximize efficiency!”(Pls.' Revised Decl. of Documentary ExhibitsEx. 1.)Plaintiffs allege, inter alia, that “Clean Seas drafted, designed, and had final approval over ... [all statements on the] labels.”(Pls.' Mem. in Opp'n to Mot. forSumm. J. 9.)Plaintiffs further allege that they were merely passive parties in the supply chain and, as such, were guilty of no wrongdoing.(Pls.' Mem. in Opp'n to Mot. forSumm. J. 17–18.)Clean Seas acknowledges responsibility only for the application and storage instructions contained on the Product's labels and denies responsibility for the statements, “Keeps hull exceptionally clean from marine growth!Increase speed, Reduce drag, Maximize efficiency!”(Def.'s Resp. to Pls.'56.1 ¶¶ 60 & 61.)Instead, Clean Seas asserts that Boulay, as president of Dolphinite and not at the direction of Clean Seas, was responsible for placing these sanguine statements on the labels.( See, e.g.,Def.'s 56.1¶¶ 9 & 30.)

III.PROCEDURAL HISTORY

This action was originally filed in the United States District Court for the Northern District of New York, and later transferred to the Eastern District.Plaintiffs' original Complaint, filed in the Northern District on January 12, 2004, sought recovery against the following defendants: Dolphinite, Inc.; Adam Boulay; The Clean Seas Company; Brook Venture Fund, LP; Brook Venture Partners, LLC; Suntec Paint, Inc.;ABC Corps. 1–10(fictitious entities); and John Does 1–10 (fictitious individuals).( See Compl.)The Northern District's docket sheet indicates that the action was terminated as against Dolphinite on June 2, 2004.On that date, Plaintiffs filed their First Amended Complaint, which omitted Dolphinite, an entity “now in bankruptcy,” as a party.(FirstAm. Compl. 2.)The Northern District's docket sheet also indicates that the action was terminated as against Brook Venture Fund, Brook Venture Partners, and Suntec Paint on October 12, 2004.On that date, the Northern District granted Suntec Paint's motion to dismiss for lack of personal jurisdiction, and granted Brook Venture Fund and Brook Venture Partners' motions to dismiss for failure to state a claim.( SeeCt.'s Order (Hurd, J.)at 1, Oct. 12, 2004;see also Tr. of Proceedings Before Hon. David N. Hurd, Nov. 1, 2004.)The Northern District's docket sheet further indicates that Plaintiffs moved for an entry of default against Boulay on November 18, 2004, and that the Clerk of the Court noted Boulay's default on November 19, 2004.( See Req. for Entry of Default, Nov. 18, 2004; Entry of Default, Nov. 19, 2004.)However, there is no indication that a default judgment was ever entered against Boulay.

Plaintiffs' Second Amended Complaint was filed in the Northern District on May 16, 2005, and seeks recovery against the following defendants: Adam Boulay; The Clean Seas Company; ABC Corps 1–10 (fictitious entities); and John Does 1–10 (fictitious individuals).( See Second Am. Compl.)The action was transferred to the Eastern District on September 21, 2006.( SeeCt.'s Order (Hurd, J.)at 1–2, Sept. 21, 2006.)

IV.SUMMARY JUDGMENT STANDARD

Summary judgment pursuant to Federal Rule of Civil Procedure 56(“Rule 56”) is only appropriate where admissible evidence, in the form of affidavits, deposition transcripts, or other documentation, demonstrates both the absence of a genuine issue of material fact and one party's entitlement to judgment as a matter of law.See, e.g., Major League Baseball Props., Inc. v. Salvino, Inc.,542 F.3d 290, 309(2d Cir.2008);Viola v. Philips Med. Sys. of N. Am.,42 F.3d 712, 716(2d Cir.1994).The relevant governing law in each case determines which facts are material; “only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment.”Anderson v. Liberty Lobby, Inc.,477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202(1986);see alsoSCR Joint Venture L.P. v. Warshawsky,559 F.3d 133, 137(2d Cir.2009);Coppola v. Bear Stearns & Co.,499 F.3d 144, 148(2d Cir.2007).No genuine issue of material fact exists when the movant demonstrates, on the basis of the pleadings and submitted evidence, that no rational jury could find in the non-movant's favor.See, e.g., Warshawsky,559 F.3d at 137;Chertkova v. Conn. Gen'l Life Ins. Co.,92 F.3d 81, 86(2d Cir.1996)(citingFed.R.Civ.P. 56(c)).In deciding a summary judgment motion, a court must resolve all factual ambiguities and draw all reasonable inferences in favor of the non-movant.See, e.g., Donahue v. Windsor Locks Bd. of Fire Comm'rs,834 F.2d 54, 57(2d Cir.1987).

To defeat a summary judgment motion properly supported by affidavits, depositions, or other documentation, the non-movant must offer similar materials setting forth specific facts that show there is a genuine issue of material fact to be tried.See, e.g., Rule v. Brine, Inc.,85 F.3d 1002, 1011(2d Cir.1996).The non-movant must present more than a “scintilla of evidence,”Del. & Hudson Ry. Co. v. Cons. Rail Corp.,902 F.2d 174, 178(2d Cir.1990)(quotingAnderson,477 U.S. at 252, 106 S.Ct. 2505), or “some metaphysical doubt as to the material facts,”Aslanidis v. U.S. Lines, Inc.,7 F.3d 1067, 1072(2d Cir.1993)(quotingMatsushita Elec. Indus. Co. v. Zenith Radio Corp.,475 U.S. 574, 586–87, 106 S.Ct. 1348, 89 L.Ed.2d 538(1986)), and “cannot ... rely[ ] on the allegations in his pleading, or on conclusory statements, or on mere assertions that affidavits supporting the motion are not credible,”Gottlieb v. County of Orange,84 F.3d 511, 518(2d Cir.1996)(citations omitted).Affidavits submitted in opposition to...