Justia Commercial Law Opinion Summaries

In this litigation arising from a transaction in goods governed by the Uniform Commercial Code (UCC) the Supreme Court affirmed the trial court order denying summary judgment, holding that there remained genuine issues of material fact precluding summary judgment.An agreement governing the sale of forty dump trucks contained a warranty and a one-year limitations period for filing a breach of contract suit. Buyers sued for breach of warranty several years later. The Supreme Court held (1) under the express terms of their agreement, the parties contracted for a future-performance warranty, and any breach of warranty claims did not accrue until the buyers knew, or should have known, of the breach; (2) under the equitable estoppel doctrine, a party's conduct may toll a contractually agreed-upon limitations period; and (3) in the instant case, genuine issues of material fact remained relating to the above two issues, precluding summary judgment. View "Kenworth of Indianapolis, Inc. v. Seventy-Seven Limited" on Justia Law

Yama Seiki, a California manufacturer of machine tools, sent PMT, a Wisconsin corporation, an exclusive letter of dealership, requiring sales of $1,000,000 or 15 machines in a year and stocking one machine on PMT’s showroom floor. PMT rejected the letter, believing it could not reach the sales requirements. Weeks later, PMT offered to take stock of two machines in exchange for an exclusive-dealer agreement. PMT responded with an application for dealership status and a proposal to negotiate further. Wang, a Yama Seiki manager with whom PMT had negotiated, did not address the offer but responded that he was “not sure if you are aware that you are in ‘exclusive’ status.” PMT never took stock of any machines, but it facilitated sales by soliciting customers, negotiating prices, and connecting customers with Yama Seiki,j who paid Yama Seiki under its usual sales terms. PMT was responsible for installation and warranty work. In 2015-2018, PMT derived 74% of its profits from Yama Seiki sales. More than a year after Wang's “exclusive status” statement, PMT discovered that others were selling Yama Seiki machines in Wisconsin. PMT sued, alleging violations of Wisconsin’s Fair Dealership Law. The Seventh Circuit affirmed summary judgment for Yama Seiki. PMT failed to show that it had any dealership agreement with Yama Seiki, much less an exclusive one. PMT never stocked any of its products, collected money for sales, or made more than de minimis use of Yama Seiki’s logos. View "PMT Machinery Sales, Inc. v. Yama Seiki USA, Inc." on Justia Law

Plaintiffs purchased a recreational vehicle (RV) from Vacationland for $26,000.25. When it leaked during a rainstorm, they brought it in for repair. When it leaked again, causing extensive damage, they brought it back. A little more than two weeks after they dropped it off the second time and without a timetable for when the vehicle would be repaired, they told the seller that they no longer wanted the RV and asked for their money back. Plaintiffs sued, citing revocation of acceptance under the Magnuson-Moss Warranty-Federal Trade Commission Improvement Act, 15 U.S.C. 2310(d); breach of implied warranty of merchantability under the Magnuson-Moss Act; revocation of acceptance and cancellation of contract under Illinois’s adoption of the Uniform Commercial Code; and return of purchase price under the UCC. Defendant argued that plaintiffs’ failure to give it a reasonable opportunity to cure was fatal to their claims. The circuit court granted the defendant summary judgment. The appellate court affirmed. Plaintiffs sought review of the revocation of acceptance claim under the UCC (810 ILCS 5/2- 608(1)(b)). The Illinois Supreme Court reversed. The plain language of subsection 2-608(1)(b) does not require that the buyer give the seller an opportunity to cure a substantial nonconformity before revoking acceptance. View "Accettura v. Vacationland, Inc." on Justia Law

LS, a trucking company, also operates as a broker of construction trucking services. Under a 2009 oral agreement between LS and Cheema, Cheema purchased a Super Dump Truck, with the understanding that LS would purchase the truck’s detachable box from Cheema. As the box owner, LS would give priority to Cheema in dispatching assignments to Cheema as a subhauler. The parties entered a written “Subhauler and Trailer Rental Agreement” under which Cheema would submit to LS completed freight bills for all hauling that he performed for LS; LS would prepare statements showing the amount billed payable to Cheema, less a 7.5 percent brokerage fee and, if the work was performed with a box owned by LS, a 17.5 percent rental fee. Cheema began providing hauling services. Cheema claimed that because LS failed to pay him the $32,835.09 purchase price of the box, it remained his, and LS was not entitled to deduct rental fees from the payments due him. In June 2010, LS began paying Cheema $1,000 a month for nine months, noting on the checks that the payments were repayment of a “loan.” Cheema recovered damages from L.S. for having been underpaid and untimely payments. The court of appeal affirmed but remanded for calculation of prejudgment interest and penalty interest (Civil Code 3287, 3322.1), rejecting LS’s argument that the parties’ oral agreement for Cheema to sell it the box, justifying its deductions for rental, was enforceable. View "Cheema v. L.S. Trucking, Inc." on Justia Law

Sapa manufactures aluminum extruded profiles, pre-treats the metal and coats it with primer and topcoat. For decades, Sapa supplied “organically coated extruded aluminum profiles” to Marvin, which incorporated these extrusions with other materials to manufacture aluminum-clad windows and doors. This process was permanent, so if an extrusion was defective, it could not be swapped out; the whole window or door had to be replaced. In 2000-2010, Marvin bought about 28 million Sapa extrusions and incorporated them in about 8.5 million windows and doors. Marvin sometimes received complaints that the aluminum parts of its windows and doors would oxidize or corrode. The companies initially worked together to resolve the issues. In the mid-2000s, there was an increase in complaints, mostly from people who lived close to the ocean. In 2010, Marvin sued Sapa, alleging that Sapa had sold it extrusions that failed to meet Marvin’s specifications. In 2013, the companies settled their dispute for a large sum.Throughout the relevant period, Sapa maintained 28 commercial general liability insurance policies through eight carriers. Zurich accepted the defense under a reservation of rights, but the Insurers disclaimed coverage. Sapa sued them, asserting breach of contract. The district court held that Marvin’s claims were not an “occurrence” that triggered coverage. The Third Circuit vacated in part, citing Pennsylvania insurance law: whether a manufacturer may recover from its liability insurers the cost of settling a lawsuit alleging that the manufacturer’s product was defective turns on the language of the specific policies. Nineteen policies, containing an Accident Definition of “occurrence,” do not cover Marvin’s allegations, which are solely for faulty workmanship. Seven policies contain an Expected/Intended Definition that triggers a subjective-intent standard that must be considered on remand. Two policies with an Injurious Exposure Definition also include the Insured’s Intent Clause and require further consideration. View "Sapa Extrusions, Inc. v. Liberty Mutual Insurance Co." on Justia Law

The Supreme Judicial Court vacated the judgment of the district court dismissing Appellant's compliant alleging revocation of acceptance and breach of warranty as time-barred, holding that the court relied upon facts contained in documents that exceeded the scope of the facts that may be considered by the court in the context of a motion to dismiss.Appellant brought this action alleging claims with respect to a bicycle frame that he purchased that was manufactured by Independent Fabrication, Inc. The district court dismissed the complaint as barred by the four-year statute of limitations set forth in Me. Rev. Stat. 11, 2-725. The Supreme Judicial Court vacated the order of dismissal on procedural grounds and remanded for further proceedings, holding that the court's consideration of matters outside the pleadings in granting Independent's motion to dismiss was in error. View "Greif v. Independent Fabrication, Inc." on Justia Law

In this case involving an electronic component, a voltage regulator known as the KA7805, the First Circuit affirmed in part and vacated in part the district court's judgment dismissing Plaintiff's claims against Defendant, holding that the district court erred in dismissing three of Plaintiff's claims.Defendant's subsidiaries manufactured the KA7805. Plaintiff purchased KA7805s from Defendant's agent and then installed them into power supply units (PSU) it subsequently sold. When one of Defendant's subsidiaries began to manufacture a new "shrunk-die" version of the KA7805, problems with the PSUs arose. Plaintiff brought this suit against Defendant and its holding company, asserting several claims. The district court dismissed all claims except those involving breach of implied warranty at the summary judgment stage. After a trial, the district court dismissed the remaining claims. The First Circuit held (1) the district court erred in summarily dismissing Plaintiff's fraudulent misrepresentation claim based on its holding that Plaintiff's reliance on an uncharged part number was unreasonable as a matter of law; and (2) because the district court's basis for dismissal of Plaintiff's fraudulent omission and negligent misrepresentation claim also rested on its erroneous holding, the court erred in dismissing these two claims as well. View "AcBel Polytech, Inc. v. Fairchild Semiconductor International, Inc." on Justia Law

The Supreme Court reversed the order of the district court denying Plaintiffs' motion for summary judgment in this case alleging a violation of Article 9A of Montana's adopted version of the Uniform Commercial Code (UCC), holding that the district court erred when it concluded that Article 9 no longer applied to the agreement between the parties.Plaintiffs and Defendants entered into an installment sale contract and security agreement to buy a mobile home. When Plaintiffs continually missed payments on the mobile home Defendants sent a notice of default and then demanded the outstanding balance on the agreement. Plaintiffs moved out of the mobile home and voluntarily returned it to Defendants. After Defendants sold the mobile home to a new buyer Plaintiffs brought suit alleging that Defendants violated provision of Article 9A. The district court denied Plaintiffs' motion for summary judgment and entered judgment in favor of Defendants. The Supreme Court reversed, holding that there were no genuine issues of material fact as to Defendants' UCC violations, and Plaintiffs were entitled to judgment as a matter of law on that issue. View "Christman v. Clause" on Justia Law

The Supreme Court reversed the order of the district court granting summary judgment on Plaintiff's claim to an accounting and recovery of surplus proceeds on the resale of her mobile home after she returned it to RJC Investment, Inc. holding that the district court erred in holding that Article 9 of the Uniform Commercial Code (UCC) was inapplicable in this case.Plaintiff entered into an installment sale contract and security agreement to purchase a mobile home. The contract was assigned to RJC. Plaintiff later allowed RJC to take possession of the mobile home and signed a full release of contract relinquishing all rights to the mobile home. After RJC resold the mobile home RJC failed to provide an accounting of the sale and did not refund any surplus to Plaintiff. Plaintiff sued RJC. The district court granted summary judgment for RJC. The Supreme Court reversed, holding (1) the release between Plaintiff and RJC did not terminate application of the UCC's requirement for an accounting and surplus after RJC sold the collateral; (2) the district court erred in granting RJC summary judgment on the ground that RJC satisfied the elements of the acceptance of collateral in full satisfaction pursuant to Mont. Code Ann. 30-9A-620; and (3) RJC was not entitled to summary judgment on other grounds. View "Hutzenbiler v. RJC Investment, Inc." on Justia Law

Sanchelima contracted to serve as Walker’s exclusive distributor of silos in 13 Latin American countries. Walker agreed not to sell silos directly to third parties in those countries. The contract contained a limited remedies provision and a damages disclaimer and was subject to Wisconsin law. Walker assigned a representative to work with Sanchelima, but otherwise did not market its products in the relevant countries. In 2014, Walker nonetheless sold silos for a factory in Mexico and to a Nicaraguan company. In 2015, Walker sold silos to a Mexican plant; in 2017, Walker sold tanks to a Mexican company. Sanchelima notified Walker that it considered the sales a breach of the agreement, then filed suit. Walker terminated the agreement without cause. Sanchelima sought lost profits of more than $600,000. Walker cited the limited remedies provision as an affirmative defense. It explicitly precludes recovery of “any lost profits … arising out of or in connection with the Distributor Agreement.” The district court held that provision violates Wisconsin’s version of the UCC 2‐719, Wis. Stat. 402.719: Where circumstances cause an exclusive or limited remedy to fail of its essential purpose, remedy may be had as provided in chs. 401 to 411... Consequential damages may be limited or excluded unless the limitation or exclusion is unconscionable. Because the limited remedy provision provided no relief for Walker’s breach of the exclusivity provision, the court held it failed of its essential purpose and awarded Sanchelima $778,306.70. The Seventh Circuit affirmed. The Wisconsin Supreme Court has interpreted UCC's limited remedy provisions; other states have interpreted those provisions differently. The Seventh Circuit declined to overturn state precedent as inconsistent with modern trends, “until and unless the Wisconsin Supreme Court decides to overturn it.” View "Sanchelima International, Inc. v. Walker Stainless Equipment Co., KKC" on Justia Law