The Harris Waste Management Group, Inc. v. Hydratech Industries Fluid Power, Inc.
ORDER granting in part and denying in part 42 Motion for Summary Judgment. Signed by District Judge William H. Steele on 12/1/2017. (tgw)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ALABAMA
THE HARRIS WASTE MANAGEMENT)
) CIVIL ACTION 16-0414-WS-N
FLUID POWER, INC.,
This matter is before the Court on the defendant’s motion for summary
judgment. (Doc. 42). The parties have filed briefs and evidentiary materials in
support of their respective positions, (Docs. 43, 44, 46, 47), and the motion is ripe
for resolution. After careful consideration, the Court concludes the motion is due
to be granted in part and denied in part.
According to the complaint, (Doc. 1), the defendant manufactured and sold
to the plaintiff a number of hydraulic cylinders, which the plaintiff incorporated
into industrial recycling balers that it sold to end consumers. At least seventeen of
the cylinders failed to live up to the express and implied warranties accompanying
their sale, and the defendant’s efforts at repair and replacement largely failed, such
that the warranties’ limited remedy failed of its essential purpose. The plaintiff
has suffered over $700,000 in damages in repairing and replacing defective
cylinders. The complaint’s two counts are for breach of express warranty and
breach of implied warranty. The parties agree that Alabama law governs. (Id. at
7; Doc. 43 at 2, 9-11, 13-14).
Summary judgment should be granted only if “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). The party seeking summary judgment bears “the initial
burden to show the district court, by reference to materials on file, that there are no
genuine issues of material fact that should be decided at trial.” Clark v. Coats &
Clark, Inc., 929 F.2d 604, 608 (11th Cir. 1991). The moving party may meet its
burden in either of two ways: (1) by “negating an element of the non-moving
party’s claim”; or (2) by “point[ing] to materials on file that demonstrate that the
party bearing the burden of proof at trial will not be able to meet that burden.” Id.
“Even after Celotex it is never enough simply to state that the non-moving party
cannot meet its burden at trial.” Id.; accord Mullins v. Crowell, 228 F.3d 1305,
1313 (11th Cir. 2000); Sammons v. Taylor, 967 F.2d 1533, 1538 (11th Cir. 1992).
“When the moving party has the burden of proof at trial, that party must
show affirmatively the absence of a genuine issue of material fact: it must support
its motion with credible evidence ... that would entitle it to a directed verdict if not
controverted at trial. [citation omitted] In other words, the moving party must
show that, on all the essential elements of its case on which it bears the burden of
proof, no reasonable jury could find for the nonmoving party.” United States v.
Four Parcels of Real Property, 941 F.2d 1428, 1438 (11th Cir. 1991) (en banc)
(emphasis in original); accord Fitzpatrick v. City of Atlanta, 2 F.3d 1112, 1115
(11th Cir. 1993).
“If the party moving for summary judgment fails to discharge the initial
burden, then the motion must be denied and the court need not consider what, if
any, showing the non-movant has made.” Fitzpatrick, 2 F.3d at 1116; accord
Mullins, 228 F.3d at 1313; Clark, 929 F.2d at 608.
“If, however, the movant carries the initial summary judgment burden ...,
the responsibility then devolves upon the non-movant to show the existence of a
genuine issue of material fact.” Fitzpatrick, 2 F.3d at 1116. “If the nonmoving
party fails to make ‘a sufficient showing on an essential element of her case with
respect to which she has the burden of proof,’ the moving party is entitled to
summary judgment.” Clark, 929 F.2d at 608 (quoting Celotex Corp. v. Catrett,
477 U.S. 317 (1986)) (footnote omitted); see also Fed. R. Civ. P. 56(e)(2) (“If a
party fails to properly support an assertion of fact or fails to properly address
another party’s assertion of fact as required by Rule 56(c), the court may …
consider the fact undisputed for purposes of the motion ….”).
In deciding a motion for summary judgment, “[t]he evidence, and all
reasonable inferences, must be viewed in the light most favorable to the
nonmovant ….” McCormick v. City of Fort Lauderdale, 333 F.3d 1234, 1243
(11th Cir. 2003). “Therefore, the plaintiff’s version of the facts (to the extent
supported by the record) controls, though that version can be supplemented by
additional material cited by the defendants and not in tension with the plaintiff’s
version.” Rachel v. City of Mobile, 112 F. Supp. 3d 1263, 1274 (S.D. Ala. 2015),
aff’d, 633 Fed. Appx. 784 (11th Cir. 2016).
There is no burden on the Court to identify unreferenced evidence
supporting a party’s position.1 Accordingly, the Court limits its review to the
exhibits, and to the specific portions of the exhibits, to which the parties have
expressly cited. Likewise, “[t]here is no burden upon the district court to distill
every potential argument that could be made based upon the materials before it on
summary judgment.” Resolution Trust Corp. v. Dunmar Corp., 43 F.3d 587, 599
(11th Cir. 1995); accord Gennusa v. Canova, 748 F.3d 1103, 1116 (11th Cir. 2014).
Fed. R. Civ. P. 56(c)(1)(A) (“A party asserting that a fact cannot be or is
genuinely disputed must support the assertion by … citing to particular parts of materials
in the record ….”); id. Rule 56(c)(3) (“The court need consider only the cited materials,
but it may consider other materials in the record.”). “[A]ppellate judges are not like pigs,
hunting for truffles buried in briefs,” and “[l]ikewise, district court judges are not
required to ferret out delectable facts buried in a massive record ….” Chavez v.
Secretary, Florida Department of Corrections, 647 F.3d 1057, 1061 (11th Cir. 2011)
(internal quotes omitted).
The Court accordingly limits its review to those arguments the parties have
I. Implied Warranty.
The complaint alleges breaches of implied warranties of merchantability
under Alabama Code § 7-2-314 and fitness for a particular purpose under Section
7-2-315. (Doc. 1 at 7). The defendant argues that all such implied warranties
were effectively disclaimed in accordance with Section 7-2-316.
With qualifications not implicated here:
[T]o exclude or modify the implied warranty of
merchantability or any part of it the language must mention
merchantability and in case of a writing must be conspicuous,
and to exclude or modify any implied warranty of fitness the
exclusion must be by a writing and conspicuous. Language to
exclude all implied warranties of fitness is sufficient if it states,
for example, that “There are no warranties which extend beyond
the description on the face hereof.”
Ala. Code § 7-2-316(2).
The defendant points to the following provision found within the “General
Terms and Conditions of Sale”:
14. EXCEPT AS EXPRESSLY SET FORTH HEREIN,
SELLER MAKES NO WARRANTIES, EXPRESS OR IMPLIED,
INCLUDING, BUT NOT LIMITED TO, ANY IMPLIED
WARRANTY OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE, WHICH ARE EXPRESSLY DISCLAIMED.
CONTENTS OF THE AGREED SPECIFICATION AND ANY
EXPRESSLY AGREED PURPOSE DO NOT CONSTITUTE A
GUARANTEE; THE GRANTING OF A GUARANTEE REQUIRES
A WRITTEN AGREEMENT.
(Doc, 44-1 at 9; accord id. at 16). This language mentions both merchantability
and fitness for a particular purpose, as required by Section 7-2-316(2).
“‘Conspicuous,’ with reference to a term, means so written, displayed, or
presented that a reasonable person against which it is to operate ought to have
noticed it.” Ala. Code § 7-1-201(10). The general terms and conditions of sale
include 24 numbered paragraphs, with each paragraph single-spaced but set off
from the preceding and following numbered paragraphs by double spacing or
more. Of the 24 numbered paragraphs, only four – 11, 13, 14 and 15 –employ all
capitals. The first three of these are found under the boldfaced heading,
“Warranty,” and the last falls under the next boldfaced heading, “General
Restrictions for Liability.” None of these paragraphs is longer than eight lines,
and paragraph 14 is five lines.
“Whether a term is ‘conspicuous’ or not is a decision for the court.” Ala.
Code. § 7-1-201(10). The plaintiff does not deny that the exclusion of implied
warranties described above is conspicuous, and it is comparable to that found
adequate in Money v. Willings Detroit Diesel, Inc., 551 So. 2d 926, 927-28 (Ala.
1989). Accordingly, the Court concludes the disclaimer satisfies Section 7-2316(2).
The plaintiff argues the defendant has failed to establish that the disclaimer
is identical as to all 22 cylinders the plaintiff purchased between 2011 and 2013.
(Doc. 46 at 12-13; Doc. 46-1 at 3). The affidavit through which the general terms
and conditions were submitted, however, states explicitly that the same general
terms and conditions have governed each sale of a cylinder to the plaintiff, with
the only difference in the form over time being a change in the defendant’s name.
(Doc. 44-1 at 3). The plaintiff ignores this testimony and offers no contradictory
evidence of its own. The defendant’s evidence therefore stands uncontroverted.2
The plaintiff similarly argues the defendant has failed to establish that the
disclaimer is identical as to every repaired cylinder. (Doc. 46 at 13). The plaintiff
has presented evidence that repaired cylinders came “with our standard one-year
The plaintiff objects that the quote to which the general terms and conditions
were attached expired in May 2011 and so could not govern later purchases. (Doc. 46 at
13). The life of the quote, however, is irrelevant; the question is what terms and
conditions governed, and the uncontroverted evidence is that the same terms and
conditions regarding implied warranties, in the same conspicuous format, applied to all
warranty when the repair is completed,” (Doc. 46-1 at 4, 14), and each of the three
attached quotes attaches general terms and conditions. (Id. at 14-29). The
plaintiff therefore has evidence that repaired cylinders were not governed by the
original general terms and conditions accompanying their sale but by new general
terms and conditions accompanying their repair. Moreover, the quote for one such
repair attaches a version of the general terms and conditions that contains a
disclaimer of implied warranties which is patently less conspicuous than the
disclaimer accompanying sales. (Id. at 26-29). The defendant does not in its reply
effectively address the plaintiff’s argument or evidence,3 and without doing so it
cannot meet its burden of showing that it effectively disclaimed implied warranties
as to all repaired cylinders.
Because, under the uncontroverted facts, the defendant effectively
disclaimed any implied warranty as to each sale of a cylinder to the plaintiff, it is
entitled to summary judgment as to this portion of the plaintiff’s implied warranty
claim. However, because the defendant has not shown that it effectively
disclaimed any implied warranty as to each repair of a cylinder it had previously
sold the plaintiff, it is not entitled to summary judgment as to this portion of the
II. Express Warranty.
The only express warranties provided by the defendant are the following:
11. SELLER WARRANTS THAT THE GOODS COVERED
HEREBY WILL AT THE TIME OF SHIPMENT, AND
CONTINUING FOR ONE YEAR FROM SUCH DATE, BE FREE
FROM MATERIAL DEFECTS IN MATERIALS AND
WORKMANSHIP AND WILL CONFORM TO THE DESCRIPTION
AND SPECIFICATIONS, IF ANY, AGREED UPON BY PURCHASER
AND SELLER; PROVIDED THAT THE GOODS ARE INSTALLED
AS SPECIFIED BY SELLER, MAINTAINED PER SELLER’S
The defendant says the most recent general terms and conditions contain “the
same material provisions,” (Doc. 47 at 7 n.1), but it does not address the disclaimer’s
conspicuousness vel non.
INSTRUCTIONS, AND OPERATED STRICTLY WITHIN SELLER’S
(Doc. 44-1 at 9; accord id. at 16). There are thus three warranties: (1) freedom
from defects in materials; (2) freedom from defects in workmanship; and (3)
conformity to agreed specifications.
The defendant addresses the first and second warranties in a single
sentence, asserting that “the evidence does not indicate that the cylinders …
suffered from ‘material defects in materials and workmanship.’” (Doc. 43 at 12).
For this proposition, the defendant relies exclusively on five lines from a former
employee’s deposition, but his testimony does not address the first or second
warranty but only the third warranty. (Doc. 44-2 at 45). The defendant thus has
failed to satisfy its threshold burden of pointing to record evidence that either
negates the existence of a material defect in materials and/or workmanship or
demonstrates the plaintiff will be unable to produce at trial any evidence of such a
In its reply brief, the defendant insists it must prevail because the plaintiff
“present[s] no evidence” of a material defect in materials or workmanship. (Doc.
47 at 1, 8-9, 11). The defendant misapprehends the parties’ burden on motion for
summary judgment. As discussed above, until and unless the defendant meets its
initial burden, the plaintiff need not make any showing at all. Because the
defendant has not met its initial burden, “the motion must be denied and the court
need not consider what, if any, showing the [plaintiff] has made.” Fitzpatrick, 2
F.3d at 1116.
As to the third warranty, the defendant focuses on offering evidence that
both parties participated in the cylinders’ design, with the plaintiff providing specs
and/or drawings, the defendant drafting a design based on that information, and
the parties thereafter in consultation until final agreement was reached, with the
approved design later modified at least once, by agreement, in light of real-world
experience. (Id. at 6-7). The plaintiff offers evidence that it looked only for form,
fit and function, did not collaborate in the cylinders’ design, and did not approve
the actual design regardless how defective. (Doc. 46 at 7, 9). Because the
defendant does not explain, and the Court does not perceive, how the plaintiff’s
asserted participation in/approval of the cylinders’ design could defeat its warranty
claim given the language of the warranty, the Court does not consider the matter
The defendant’s argument regarding the third warranty is confined to a few
sentences. (Doc. 43 at 12). The defendant acknowledges there were cylinder
failures,4 but it says they occurred because “the design specifications provided to
[the defendant] did not align with the actual operation of the cylinders in the
field.” (Id.). That is, the defendant claims that the cylinders “conform[ed]” to the
plaintiff’s specifications (thereby satisfying the warranty) but that those
specifications resulted in failure because they did not match the real-world
conditions in which the plaintiff’s buyers operated the cylinders. (Id.).
The defendant identifies two ways in which the plaintiff’s specifications
were out of step with its customers’ usage. (Doc. 43 at 12). First, because the
plaintiff failed to specify that pressure would be applied from both sides, the
defendant used a seal designed to withstand pressure only from one side, which
led to seal failure in two or three cylinders before the design was changed. (Id.;
Doc. 44-3 at 22-23). Second, the plaintiff specified a certain run speed, but the
cylinders in the field ran at faster speeds, which could cause some of the issues
observed. (Doc. 43 at 12; Doc. 44-2 at 10-13; Doc. 44-3 at 22-23).
There are a number of problems with the defendant’s argument. First, the
evidence is that at least a dozen cylinders failed within the warranty period, (Doc.
46-1 at 3), and the defendant has not shown that the two circumstances identified
in the preceding paragraph were in play as to all of them. Second, the defendant’s
According to the plaintiff’s evidence, more than half the 22 cylinders it
purchased during the period covered by this lawsuit failed within the warranty period to
operate to the specifications the plaintiff provided the defendant. (Doc. 46-1 at 3).
According to the complaint, at least seventeen did so. (Doc. 1 at 4).
only evidence of excessive speed comes from an inspection visit to a particular
customer, and the excessive speeds were observed in testing mode (when nothing
is being compressed), not in normal operational mode, when speeds are lower.
(Doc. 44-2 at 10-13; Doc. 46-3 at 32-33). Third, the defendant acknowledges
there were additional warranty issues, which it does not address, including several
instances in which the piston backed off the rod and which damage the defendant
covered under its warranty. (Doc. 43 at 7 n.3). Fourth, while the defendant offers
(scant) evidence the cylinders met the plaintiff’s specifications, (Doc. 44-2 at 45),
the plaintiff offers (equally scant) evidence they did not. (Doc. 46-1 at 3).
In its reply brief, the defendant again charges the plaintiff with failing to
produce evidence supporting its claim. (Doc. 47 at 1, 8-9, 11). As before, given
the defendant’s failure to satisfy its initial burden of pointing to record evidence
either negating a breach of warranty or of showing the plaintiff cannot produce
evidence of breach at trial, the defendant’s motion must be denied regardless of
the strength or weakness of the plaintiff’s showing.
Based on the parties’ limited and somewhat cryptic briefing and evidentiary
submissions, the defendant’s motion for summary judgment as to the express
warranty claim is due to be denied.
III. Limitation of Remedy.
The complaint alleges that the plaintiff has “suffered damages in excess of
$700,000 in repairing and replacing defective cylinders.” (Doc. 1 at 2). The
defendant argues that it effectively limited the plaintiff’s remedy to repair,
replacement or refund, such that the plaintiff cannot recover the claimed damages.
(Doc. 43 at 2, 12, 14-15).
“Remedies for breach of warranty can be limited in accordance with the
provisions of this article on … limitation of damages and on contractual
modification of remedy (Sectio[n] … 7-2-719).” Ala. Code § 7-2-316(4). “The
agreement … may limit or alter the measure of damages recoverable under this
article, as by limiting the buyer’s remedies to return of the goods and repayment of
the price or to repair and replacement of nonconforming goods or parts ….” Id. §
7-2-719(1)(a). “Consequential damages may be limited or excluded unless the
limitation or exclusion is unconscionable[, and] [l]imitation of [consequential]
damages where the loss is commercial is not … prima facie unconscionable.” Id.
§ 7-2-719(3). “Resort to a remedy as provided is optional unless the remedy is
expressly agreed to be exclusive, in which case it is the sole remedy.” Id. § 7-2719(1)(b).
The general terms and conditions provide as follows:
13. PURCHASER’S EXCLUSIVE REMEDY AND SELLER’S
LIABILITY HEREUNDER, EITHER FOR BREACH OF WARRANTY
OR FOR NEGLIGENCE, IS EXPRESSLY LIMITED, AT THE
OPTION OF SELLER: (A) TO THE REPLACEMENT AT THE
AGREED POINT OF DELIVERY OF THE PRODUCTS; (B) TO THE
REPAIR OF SUCH PRODUCTS OR WORK; OR (C) TO THE
REFUND OR CREDITING TO CUSTOMER OF THE PRICE OF
SUCH PRODUCTS OR WORK. THE REMEDY OF PURCHASER
CONTAINED HEREIN SHALL BE EXCLUSIVE OF ANY OTHER
REMEDY OTHERWISE AVAILABLE TO PURCHASER.
15. SELLER’S LIABILITY, WHETHER IN CONTRACT, IN
TORT, UNDER WARRANTY, IN NEGLIGENCE OR OTHERWISE,
SHALL NOT EXCEED THE PURCHASE PRICE OF THE GOODS
SOLD, AND UNDER NO CIRCUMSTANCES SHALL SELLER BE
LIABLE FOR ANY SPECIAL, INDIRECT, INCIDENTAL OR
CONSEQUENTIAL DAMAGES INCLUDING, BUT NOT LIMITED
TO, DEMURRAGE CHARGES, COST OF SHIPMENT, DOWNTIME,
LOST PROFITS, OR LOST SALES.
(Doc. 44-1 at 9; accord id. at 16). The plaintiff does not dispute that this language
is adequate under the provisions of Section 7-2-719 quoted above to limit its
remedies to repair, replacement or refund. Instead, the plaintiff invokes an
exception to the validity of such limitations: “Where circumstances cause an
exclusive or limited remedy to fail of its essential purpose, remedy may be had as
provided in this title.” Ala. Code § 7-2-719(2).
The plaintiff’s evidence describes the following pattern, consisting of three
repeating elements. First, the plaintiff would purchase a new cylinder, incorporate
it into a baler, and sell the finished product to a customer. In less than a year, the
cylinder would fail to operate to agreed specifications and require repair. The
plaintiff would return the cylinder to the defendant for repair, leaving the customer
without a functioning baler. To get the baler running while the cylinder was being
repaired, the plaintiff would send the customer a new cylinder. This would be a
cylinder the plaintiff had purchased from the defendant for incorporation into a
new baler, such that its diversion to an existing customer would prevent the
plaintiff from filling new orders. (Doc. 46-1 at 3-4).
Second, the defendant would inspect the returned cylinder and provide the
plaintiff a quote or invoice reflecting the cost to repair the cylinder, which could
be $20,000 or more, for what the defendant called “custom repair” but which
really was warranty work.5 To keep its customers satisfied, the plaintiff would
pay the requested amount and the defendant would perform the repairs. (Doc. 461 at 3-4, 15, 22, 27).
Third, the repaired cylinders would be returned to a customer (not
necessarily the original customer), where they would within a year again fail to
operate to agreed specifications. Likewise, the new, replacement cylinders would
similarly fail within a year. As to one baler, five cylinders failed in the space of
barely two years. (Doc. 46-1 at 4-5).
It appears unlikely the plaintiff can avoid the limitation on remedies by
resort to the first scenario. The warranty gave the defendant the option of repair,
replacement or refund, and it chose repair. Repairs take time, such that a
necessary consequence of that remedy is the consumer’s loss of use of the product
for the period of repair. The plaintiff understandably elected to assist its
While the defendant offers evidence that it performed warranty work for free
and charged the plaintiff only for upgrades to the design current when the repairs were
performed, on motion for summary judgment the Court must accept the plaintiff’s
version of the evidence.
customers by sending them replacement cylinders so as to minimize their
downtime, but it acted merely in response to what it at all times knew, or should
have known, would be the unavoidable result of a cylinder needing repair. It
would seem improbable in the extreme that the remedy of repair could fail of its
essential purpose (that is, repair) simply because the process of repair necessarily
causes downtime and/or the cost of avoiding downtime. The plaintiff advances no
argument to the contrary.
Less clear is whether the remedy of repair failed of its essential purpose
because the defendant required the plaintiff to pay for repairs that should have
been covered for free by the warranty. More problematic still is whether the
remedy failed of its essential purpose because the repaired cylinders again failed to
operate up to agreed specifications or because a succession of new cylinders failed
to do so. See, e.g., Barko Hydraulics, LLC v. Shepherd, 167 So. 3d 304, 311 (Ala.
2014) (“Given the numerous attempts at repair over the extended period, the jury
could properly have concluded that the 495L loader had not been repaired and that
the warranty had failed of its essential purpose.”); id. at 311 n.4 (citing cases
regarding repeated failures to repair). None of the cases cited by the defendant
address circumstances remotely akin to those presented here, and the Court will
not search for more relevant precedents on the defendant’s behalf.6
The defendant argues in its reply brief that the plaintiff must track the
history of each cylinder separately and show that the remedy failed of its essential
purpose as to that particular cylinder. (Doc. 47 at 10). The suggestion is not
implausible but, because the defendant offers no authority in support of the
assertion, the Court does not embrace it. Even were the Court to do so, however,
it would not assist the defendant. Again, this is the defendant’s motion for
summary judgment, so it bears the initial burden. Because the defendant has
To the uncertain extent the defendant suggests that a remedy fails of its essential
purpose only if the seller “refuses” to provide the remedy, the Court rejects the
suggestion as incompatible with numerous precedents, including Barko.
failed to trace the history of any particular cylinder, it has neither negated a failure
of essential purpose as to any particular cylinder nor shown that the plaintiff
cannot prove such a failure as to any particular cylinder.
For the reasons set forth above, the defendant’s motion for summary
judgment is granted with respect to the plaintiff’s claim for breach of implied
warranty, to the extent that claim is based on a warranty accompanying the
original sale of any cylinder. In all other respects, the defendant’s motion is
DONE and ORDERED this 1st day of December, 2017.
s/ WILLIAM H. STEELE
UNITED STATES DISTRICT JUDGE
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?