Dishman et al v. Atlas Roofing Corporation
Filing
81
OPINION AND ORDER GRANTING IN PART AND DENYING IN PART (65)/(388) Motion for Partial Summary Judgment and (66)/(389) Motion for Partial Summary Judgment in case 1:13-md-02495-TWT. Signed by Judge Thomas W. Thrash, Jr. on 6/8/18. Associated Cases: 1:13-md-02495-TWT, 1:13-cv-02195-TWT(jkl)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF GEORGIA
ATLANTA DIVISION
IN RE ATLAS ROOFING
CORPORATION CHALET SHINGLE
PRODUCTS LIABILITY LITIGATION
MDL DOCKET NO. 2495
1:13-md-2495-TWT
DIANE DISHMAN, et al.,
Plaintiffs,
v.
CIVIL ACTION FILE
NO. 1:13-CV-2195-TWT
ATLAS ROOFING CORPORATION,
Defendant.
OPINION AND ORDER
This is a multi-district class action arising out of the marketing and sale
of allegedly defective roofing shingles. It is before the Court on the Defendant’s
Motion for Partial Summary Judgment as to the Plaintiffs Diane Dishman and
Rodney Dishman [Doc. 65] and the Defendant’s Motion for Partial Summary
Judgment as to the Plaintiff Anthony Costanzo [Doc. 66]. For the reasons set
forth below, the Defendant’s Motion for Partial Summary Judgment as to the
Plaintiffs Diane Dishman and Rodney Dishman [Doc. 65] is GRANTED in part
and DENIED in part, and the Defendant’s Motion for Partial Summary
Judgment as to the Plaintiff Anthony Costanzo [Doc. 66] is GRANTED in part
and DENIED in part.
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I. Background
The Plaintiffs Diane Dishman, Rodney Dishman, and Anthony Costanzo
own homes containing Atlas Shingles (the “Shingles”).1 The Defendant Atlas
Roofing Corporation designed, manufactured, and sold the Shingles.2 The
Defendant developed the Shingles in the 1990s as a line of “overlay” products
intended to provide an affordable shingle with the look of the more expensive
architectural shingles.3 In 2010, the Defendant discontinued sales of the
Shingles.4 The Plaintiffs allege that the Shingles are defective in design, and
filed this action seeking to represent a class of homeowners who own homes with
the Shingles.
In 2010, Diane and Rodney Dishman hired Crist Roofing & Construction,
Inc. to install the Shingles on their home.5 Crist Roofing showed the Dishmans
a brochure for the Shingles.6 The Dishmans also claim that Crist Roofing
1
It should be noted that – for purposes of this lawsuit –
Chalet/Stratford Shingles are indistinguishable. See Primary Mot. for Class
Cert. [Doc. 57], Ex. Tab 14, Thomas Dep., at 35 under No. 13-cv-02195-TWT.
The differences between the two Shingles relate to aesthetics, not design. Id.
2
Dishmans’ Statement of Additional Material Facts ¶¶ 1-2.
3
Id. ¶ 2.
4
Id. ¶ 21.
5
Def.’s Statement of Material Facts as to the Dishmans ¶ 1;
Dishmans’ Statement of Additional Material Facts ¶ 10.
6
Def.’s Statement of Material Facts as to the Dishmans ¶¶ 2-3;
Dishmans’ Statement of Additional Material Facts ¶ 10. The parties dispute the
contents of this brochure.
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showed them a sample of the Shingles.7 A couple years after the installation of
the Shingles, the Dishmans observed cracking, blistering, and excessive granule
loss on the Shingles.8 They contacted the Defendant regarding these problems.9
On January 11, 2013, the Defendant responded by sending the Dishmans a
letter denying their warranty claim.10 In denying their claim, the Defendant
noted that the blistering, cracking, and granule loss were not manufacturing
defects.11
In 2004, Anthony Costanzo hired a contractor to build a new house in
Douglasville, Georgia.12 The contractor purchased and installed the Shingles in
October 2004.13 The parties dispute whether Costanzo viewed a sample or any
Atlas marketing materials prior to installation of the Shingles. Costanzo does
not recall whether he knew the brand of the Shingles prior to this purchase.14
Furthermore, he cannot recall whether he received or reviewed the Atlas
7
Dishmans’ Statement of Additional Material Facts ¶ 10.
8
Id. ¶ 24.
9
Id. ¶ 26.
10
Id.
11
Id. ¶ 31.
12
Costanzo’s Statement of Additional Material Facts ¶ 10.
13
Def.’s Statement of Material Facts as to Costanzo ¶ 2.
14
Id. ¶ 4.
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Limited Warranty.15 Costanzo noticed that the Shingles had cracking, blistering,
and excessive granule loss.16 Additionally, in May 2010, Costanzo’s home
suffered a water leak that was visible in the ceiling of his kitchen.17 Costanzo
then contacted the Defendant regarding these problems and filed a warranty
claim.18 In his warranty claim, Costanzo noted that his problems included
“blistering, deterioration, leaking.”19 On July 12, 2010, the Defendant denied
Costanzo’s warranty claim.20 The Defendant explained that the “rash blisters”
were not considered a manufacturing defect.21 Later, in 2012, a roofer observed
a second leak at Costanzo’s home.22 After repairs, Costanzo experienced another
leak a year later.23
On July 1, 2013, the Plaintiffs filed the Class Action Complaint. After the
Motion to Dismiss Stage, the Plaintiffs’ remaining claims are for Breach of
Express Warranty (Count I), Breach of Implied Warranty of Merchantability
15
Id.
16
Costanzo’s Statement of Additional Material Facts ¶ 23.
17
Id.
18
Id. ¶ 24.
19
Id.
20
Id. ¶ 25.
21
Id.
22
Id. ¶ 27.
23
Id.
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(Count II), Fraudulent Concealment (Count VI), Bad Faith Litigation Expenses
(Count VII), and Declaratory Relief (Count VIII). The Defendant now moves for
partial summary judgment as to each of the Plaintiffs.
II. Legal Standard
Summary judgment is appropriate only when the pleadings, depositions,
and affidavits submitted by the parties show no genuine issue of material fact
exists and that the movant is entitled to judgment as a matter of law.24 The
court should view the evidence and any inferences that may be drawn in the
light most favorable to the nonmovant.25 The party seeking summary judgment
must first identify grounds to show the absence of a genuine issue of material
fact.26 The burden then shifts to the non-movant, who must go beyond the
pleadings and present affirmative evidence to show that a genuine issue of
material fact exists.27 “A mere ‘scintilla’ of evidence supporting the opposing
party’s position will not suffice; there must be a sufficient showing that the jury
could reasonably find for that party.”28
24
FED. R. CIV. P. 56(a).
25
Adickes v. S.H. Kress & Co., 398 U.S. 144, 158-59 (1970).
26
Celotex Corp. v. Catrett, 477 U.S. 317, 323-24 (1986).
27
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 257 (1986).
28
Walker v. Darby, 911 F.2d 1573, 1577 (11th Cir. 1990).
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III. Discussion
A. Diane and Rodney Dishman
The Defendant first moves for partial summary judgment as to Diane and
Rodney Dishman. The Defendant argues that the Dishmans’ claim for express
warranty based on statements outside the Atlas Limited Warranty fails, that
their fraudulent concealment claim fails due to the lack of the requisite
relationship with the Defendant, that they cannot recover for leak-related
damages, and that they lack standing to pursue claims for declaratory relief.
The Court addresses each of these arguments.
1. Express Warranty
First, the Defendant moves for summary judgment as to the Dishmans’
express warranty claim based upon statements made outside the Atlas Limited
Warranty. In the First Amended Complaint, the Plaintiffs allege that the
Defendant made representations concerning the “durability and quality” of the
Shingles in its “Warranty, brochures, and marketing materials.”29 They allege
that the Defendant “represented and warranted that the Shingles conformed to
applicable building codes and certain industry standards.”30 They also allege
that the Defendant “expressly warranted” that “the Shingles purchased by
Plaintiffs and Damages Class members were free from defects that would
29
First Am. Compl. ¶ 78.
30
Id. ¶ 9.
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substantially impair their operation or performance and that they would last at
least 30 years.”31
The Defendant first argues that this claim fails because the Dishmans are
unable to show that they relied upon these alleged representations when they
purchased the Shingles.32 To recover for breach of an express warranty, a
plaintiff must show that the defendant made an affirmation of fact or promise
which relates to the goods and became part of the basis of the bargain.33
According to the Defendant, these representations did not become a part of the
basis of the bargain because the Dishmans cannot show that they relied upon
them in choosing to purchase the Shingles. However, as this Court previously
acknowledged, Georgia law does not require a plaintiff to prove reliance upon
a warranty.
While no Georgia case law directly answers this question or
provides a rule for decision, the Georgia General Assembly adopted
the relevant Uniform Commercial Code (“UCC”) Article 2 provision
verbatim, so the official comments to the UCC should be “given due
consideration in determining the intent” of the legislature. Those
comments indicate that the “whole purpose of the law of warranty
is to determine what it is that the seller has in essence agreed to
sell,” and the goal of the U.C.C. was to reflect “actual practice that
affirmations of fact made by the seller about the goods during a
bargain are regarded as part of the description of those goods;
hence no particular reliance on such statements need be shown in
order to weave them into the fabric of the agreement.” U.C.C. §
31
Id. ¶ 79.
32
Def.’s Mot. for Partial Summ. J. as to the Dishmans, at 4.
33
O.C.G.A. § 11-2-313(1)(a).
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2–313 cmts. 3–4. Any other requirement would eviscerate a
warranty for the typical, busy consumer and protect only those
individuals who, if Defendant's position was adopted, actually read
warranty cards prior to purchase.34
Thus, as long as the Dishmans can show that the Defendant made such an
affirmation of fact during the transaction, they need not show any particular
form of reliance on those statements for the express warranties to be enforceable. Therefore, their claim for breach of express warranties outside of the Atlas
Limited Warranty does not fail due to lack of reliance.
However, this express warranty claim still fails because the Dishmans
have failed to provide evidence that the Defendant ever made the specific
affirmations of fact or promises that allegedly constituted warranties. Although
the Dishmans need not establish that they relied upon the warranties made by
the Defendant, they still must prove the warranties’ existence and provide
evidence showing what the terms of those warranties are.35 The comments to the
U.C.C. state that “the whole purpose of the law of warranty is to determine what
it is that the seller has in essence agreed to sell” and that the goal of the
provisions was to reflect that “[i]n actual practice affirmations of fact made by
34
Horn v. Boston Sci. Neuromodulation Corp., No. CV409-074, 2011
WL 3893812, at *11 (S.D. Ga. Aug. 26, 2011).
35
Grossman v. Brown & Webb Builders, Inc., 255 Ga. App. 897, 900
(2002). There is a distinction between requiring a plaintiff to prove reliance,
such as requiring the Dishmans to show that they relied upon these statements
in deciding to purchase the Shingles, and requiring a plaintiff to show that the
statements constituting a warranty were made at all during the bargain
between the parties.
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the seller about the goods during a bargain are regarded as part of the
description of those goods; hence no particular reliance on such statements need
be shown in order to weave them into the fabric of the agreement.”36 Thus, the
UCC still contemplates that the affirmation of fact be made by the seller during
the bargain.
In a similar context, the Court of Appeals of Georgia explained that
“[p]retermitting whether this circumstantial evidence raises questions of fact
regarding the warranty’s existence, it sheds no light on the terms of the
warranty, which are critical to Grossman’s claim.”37 The court noted that
“[w]ithout some evidence of the warranty’s terms, we do not know which defects
fell within the warranty” and that the evidence provided “offer[ed] no insight
into the warranty’s terms.”38 Ultimately, the court concluded that summary
judgment was appropriate. It explained that:
We recognize that reasonable evidentiary inferences can raise a
sufficient issue of material fact to preclude summary judgment. A
party, however, cannot avoid summary judgment by citing “[a]n
inference based on mere possibility, conjecture, or speculation.”
Here, nothing in the record sets forth the terms of the written
warranty. The evidence simply does not raise a question of fact as
to what the written warranty covered, and it is impossible to infer
that the terms of this warranty might have been breached.
Accordingly, the trial court properly granted Brown & Webb
36
*11-12.
O.C.G.A. § 11-2-313 cmt. 3-4; see also Horn, 2011 WL 3893812, at
37
Grossman, 255 Ga. App. at 900.
38
Id.
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summary judgment on Grossman's breach of express warranty
claim.39
Thus, a party seeking to enforce an express warranty must present evidence,
beyond just an inference based upon mere speculation, establishing the terms
of that warranty. The Dishmans need to prove what statements or affirmations
of fact the Defendant made – otherwise it would be impossible to determine
whether a breach of said warranties occurred. The Dishmans have failed to do
so.
Here, nothing in the record sets forth the terms of the warranties made
in the outside marketing materials. The evidence provided by the Dishmans
does not raise a question of fact as to what these warranties covered, and it is
impossible to infer that the terms of this warranty might have been breached
without knowing these contents. For example, Rodney Dishman’s deposition
testimony highlights these insufficiencies in the evidence. Mr. Dishman, when
asked what statements the Atlas advertising materials made, responded that
“you’re asking me about a conversation that happened, you know -- material
that was read five years ago. I mean -- and I don’t -- you know, I don’t have the
brochure now, so I can’t answer that.”40 He further admitted that he has no
recollection of what the marketing materials looked like.41 Instead, he stated
39
Id.
40
Rodney Dishman Dep. at 38.
41
Id.
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that “[w]e were just looking for a good warranty, and you know, for me to sit
there and pick and choose from five different warranties” and that “we looked
at a lot of warranties, and we looked at a lot of different shingles.”42
Similarly, Diane Dishman’s deposition testimony also fails to sufficiently
establish the terms of the alleged warranties. She stated that their contractor
“brought brochures, where you could see [the Shingles] up on the house.”43 She
testified that the marketing materials “just gave the description that you always
see about products” and that they described the Shingles as “quality” and that
they “held up well.”44 Ms. Dishman did not recall any other statements that the
materials made concerning the Shingles, could not remember any other
statements that the marketing materials included, and admitted that if she saw
these brochures today, she would not be able to recognize them.45
This evidence does not present a question of fact as to what these alleged
written warranties covered, and “it is impossible to infer that the terms of this
warranty might have been breached.”46 Given this lack of evidence of the
warranties made by the Defendant, it would be nearly impossible to know what
the Defendant promised about the Shingles, and whether the Defendant
42
Id. at 39-40.
43
Diane Dishman Dep. at 42.
44
Id. at 43.
45
Id. at 43-44.
46
Grossman, 255 Ga. App. at 900.
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breached the terms of such warranties. This evidence falls far short of
establishing enforceable warranties as to the durability and quality of the
Shingles, or as to the Shingles’ compliance with building codes and industry
standards, as the Plaintiffs allege in the First Amended Complaint. Therefore,
since the Dishmans have failed to produce evidence establishing the terms of the
alleged express warranties in these marketing materials, the Defendant is
entitled to summary judgment on this claim.
In an effort to show a dispute of material fact, the Dishmans offer
statements by Kirk Villar and Anthony Mattina as evidence of express
warranties made by the Defendant in its marketing materials.47 However, this
evidence only describes some of the general marketing techniques employed by
the Defendant over the years to promote Shingles. It does not prove what
specific statements were made to the Dishmans in this particular case that
formed express warranties. For example, Villar, the Defendant’s Vice President
of Sales and Marketing, testified as to the various marketing techniques that
the Defendant employed over the years to promote the Shingles. Villar testified
that between 1998 and 2010, “the consistency of the message was the same,”
although “there were some changes.”48 Villar noted that some of the marketing
materials included references to ASTM and other industry standards, although
47
Dishmans’ Br. in Opp’n to Def.’s Mot. for Partial Summ. J., at 4.
48
Villar Dep. at 58.
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he cannot recall whether reference to these standards were included in all of the
marketing materials.49 Similarly, Mattina, in an affidavit, references an
example of marketing materials distributed by the Defendant, and notes that
“[w]hile Crist did not retain any of the marketing documents regarding the [the
Shingles], [this example] is an accurate representation regarding the marketing
of the [Shingles] that we would have relied upon when recommending the
[Shingles] to Ms. Dishman or any clients.”50 Mattina further stated in this
affidavit that the Shingles “were also marketed as having a thirty (30) year
warranty” and that “[a]s a roofer, I would therefore expect the Shingles to have
a useful service life of thirty (30) years.”
This evidence, however, does not prove what specific statements were
made to the Dishmans in the marketing materials they received. Instead, it only
describes various marketing techniques generally used by the Defendant over
the years. It does not prove what the terms of the alleged warranties are, and
does not assist the fact-finder in determining whether a breach of these
warranties occurred in this particular case. At best, this evidence creates an
inference as to which warranties were contained in the specific marketing
materials the Dishmans reviewed. However, such an inference would constitute
speculation that is insufficient to survive summary judgment. The Dishmans
49
Id. at 113-15.
50
Mattina Aff. ¶ 24.
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need to provide evidence of the statements, promises, or affirmations of fact that
the Defendant made in this transaction – not evidence of the marketing
messages the Defendant used in general. They have failed to do so.
The Dishmans also argue that an express warranty was created when
they viewed a sample of the Shingles.51 However, this argument fails. O.C.G.A.
§ 11-2-313 provides that an express warranty can be created by sample.
Specifically, § 11-2-313(1)(c) states that “[a]ny sample or model which is made
part of the basis of the bargain creates an express warranty that the whole of
the goods shall conform to the sample or model.”52 A sample is an express
warranty that the goods sold and to be delivered “will be of as good quality as
the samples exhibited.”53 The Dishmans have failed to show that the Shingles
delivered were a different or lesser quality than the sample they observed before
purchasing the Shingles. Based upon the evidence offered, the Shingles that the
Dishmans received were the same Shingles that they viewed on the sample
board offered by Crist. This does not constitute a breach of warranty.54 A
51
Dishmans’ Br. in Opp’n to Def.’s Mot. for Partial Summ. J., at 5.
52
O.C.G.A. § 11-2-313(1)(c).
53
Christian v. Knight & Co., 128 Ga. 501 (1907).
See Printing Ctr. of Tex., Inc. v. Supermind Publ’g Co., 669 S.W.2d
779, 784 (Tex. App. 1984) (“Appellee’s witness testified that he was shown a
sample of the newsprint to be used and that the tendered books were not the
same color as the sample. The witness stated the pages of the books were gray
while the sample was white. This testimony is evidence of nonconformity
because any sample which is made part of the basis of the bargain creates an
express warranty that the whole of the goods shall conform to the sample.”).
54
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warranty by sample merely warrants that the good delivered will be the same
or similar to the sample of the good viewed. Here, the Dishmans received the
same type of Shingle as the sample they viewed. Although those Shingles may
have ultimately ended up having problems, and may have breached other
purported warranties, these deficiencies do not establish a breach of warranty
by sample. Since the Dishmans cannot show that the Shingles they received
were of a lesser quality than the sample they viewed, they cannot prove that
there was a breach, which is an essential element of a breach of warranty claim.
Furthermore, the Dishmans’ express warranty claim for warranties
outside of the Atlas Limited Warranty also fails because the Defendant properly
disclaimed all outside warranties in the Atlas Limited Warranty. O.C.G.A. § 112-316 provides for the exclusion or modification of warranties. The Defendant
clearly disclaimed all express warranties outside of the Atlas Limited Warranty.
Under a heading labeled “SOLE WARRANTY,” the Atlas Limited Warranty
provides, in all capitalized letters, that “ATLAS MAKES NO REPRESENTATION OR WARRANTY OF ANY KIND OTHER THAN THE LIMITED
WARRANTY SET FORTH HEREIN.”55 Such a disclaimer is effective and
enforceable.56
55
See [Doc. 65-6] at 3.
56
See Reeb v. Daniels Lincoln-Mercury Co., 193 Ga. App. 817, 819
(1989) (“However, it is clear that appellee disclaimed all warranties, as the
invoice recited that ‘[a]ny warranties on the products sold hereby are those
made by the manufacturer. The seller, [appellee], hereby expressly disclaims all
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The Dishmans argue that the Defendant’s disclaimer of outside
warranties fails because there was no “meeting of the minds” with regard to the
Atlas Limited Warranty.57 However, the Court finds this unpersuasive. The
Dishmans want to have it both ways – they want to assert a warranty claim
under the Atlas Limited Warranty while also disavowing the parts of the
warranty that they do not find favorable (i.e., the disclaimer).58 This they cannot
do. They cannot, on the one hand, argue that the Defendant breached an express
warranty created by the Atlas Limited Warranty, while on the other hand argue
that the disclaimer does not apply because there was no meeting of the minds
warranties, either express or implied, ... and [appellee] neither assumes nor
authorizes any other person to assume for it any liability in connection with the
sale of said products.’”); Stephens v. Crittenden Tractor Co., 187 Ga. App. 545,
548-49 (1988) (distinguishing between cases in which a disclaimer and
inconsistent express warranties are in the same written contract and when they
are not in the same contract, and concluding that a disclaimer was effective
despite inconsistent express warranties outside of the contract); see also
Davenport v. Ford Motor Co., No. 1:05-cv-3047-WSD, 2006 WL 2048308, at *3
(N.D. Ga. July 20, 2006) (“Because an express warranty requires specific written
or verbal statements by the seller about the quality of the vehicle, and the
dealership specifically disclaimed all warranties in the Bill of Sale, Plaintiffs
cannot assert a breach of express warranty claim against the Hutson
Dealership, the seller of the vehicle.”).
57
14.
Dishmans’ Br. in Opp’n to Def.’s Mot. for Partial Summ. J., at 12-
Compare First Am. Compl. ¶ 78 (“Through its Warranty, brochures,
and marketing materials regarding the durability and quality of the Shingles,
Atlas created express warranties that became part of the basis of the bargain
with Plaintiffs and the members of the Damages Class.”) with Dishmans’ Br. in
Opp’n to Def.’s Mot. for Partial Summ. J., at 13 (“The Limited Warranty was
never provided to the Dishmans, and they never signed any warranty card
asserting that they agreed to its terms limiting their rights.”).
58
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with the Atlas Limited Warranty. The Dishmans have consistently asserted that
they purchased the Shingles in large part due to the thirty-year warranty, and
have alleged a claim for breach of express warranty premised upon the Atlas
Limited Warranty. They cannot now disregard the parts of this warranty that
they find inconvenient. Therefore, since the Defendant effectively disclaimed all
outside warranties in the Atlas Limited Warranty, the Dishmans’ express
warranty claim based upon marketing materials and other outside representations fails as a matter of law.
The Dishmans also argue that the warranty disclaimer is inconspicuous,
invalid, and unconscionable.59 The Dishmans argue that the disclaimer is invalid
for the same reasons that they argue that there was no meeting of the minds.
However, as already noted, the Dishmans have brought a claim based upon the
warranty they now seek to disavow – they cannot now argue that this is invalid.
Furthermore, the disclaimer is not inconspicuous. A term is “conspicuous” if it
is “so written, displayed, or presented that a reasonable person against which
it is to operate ought to have noticed it.”60 This includes “[a] heading in capitals
equal to or greater in size than the surrounding text, or in contrasting type, font,
or color to the surrounding text of the same or lesser size” and “[l]anguage in the
body of a record or display in larger type than the surrounding text, or in
59
12, 14-17.
60
Dishmans’ Br. in Opp’n to Def.’s Mot. for Partial Summ. J., at 11O.C.G.A. § 11-1-201(b)(10).
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contrasting type, font, or color to the surrounding text of the same size, or set
off from the surrounding text of the same size by symbols or other marks that
call attention to the language.”61 Here, the Atlas Limited Warranty is named a
“limited” warranty, and under a section titled “SOLE WARRANTY,” the
Defendant disclaims all other warranties in capitalized letters. Such a
disclaimer is not inconspicuous.
Finally, the disclaimer is not unconscionable. The Dishmans argue that
it is unconscionable because the Defendant knew it was selling a defective
product and still chose to disclaim outside warranties.62 However, the case that
the Dishmans rely upon, Mullis v. Speight Seed Farms, Inc., is distinguishable.63
In Mullis, the Court of Appeals of Georgia noted that disclaimers, like other
contractual provisions, are limited by the conscionability requirement.64 The
court then concluded that the defendant’s warranty disclaimer was unconscionable.65 However, the court distinguished between the goods at issue in that case,
seeds, and ordinary consumer goods. It noted that, unlike ordinary consumer
goods, “[o]nce the crop has failed, the farmer’s only recourse is monetary
61
Id.
62
Dishmans’ Br. in Opp’n to Def.’s Mot. for Partial Summ. J., at 14-
63
Mullis v. Speight Seed Farms, Inc., 234 Ga. App. 27 (1998).
64
Id. at 28 (“[W]arranty disclaimers made pursuant to UCC § 2–316
17.
are limited by the conscionability requirement in UCC § 2–302.”).
65
Id. at 30.
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compensation to cover his lost profit and expenditures; replacement and repair
are not viable options.”66 Furthermore, the court emphasized that the disclaimer
at issue in Mullis was procedurally unconscionable because “Mullis purchased
the seed over the telephone during a conversation in which only the seed variety
and price were discussed.”67 Thus, Mullis contained a number of important facts
as to unconscionability that distinguish it from this case. In contrast, Georgia
courts have regularly enforced warranty disclaimers similar to the one in the
Atlas Limited Warranty.68 Therefore, since the Defendant effectively disclaimed
warranties outside of the Atlas Limited Warranty, the Dishmans’ claim for
breach of express warranty based upon marketing materials fails.
2. Fraud
Next, the Defendant moves for summary judgment as to the Dishmans’
fraudulent concealment claim. “The tort of fraud has five elements: (1) a false
representation or omission of a material fact; (2) scienter; (3) intention to induce
the party claiming fraud to act or refrain from acting; (4) justifiable reliance;
and (5) damages.”69 In their Complaint, the Dishmans assert a claim for fraud,
arguing that the Defendant fraudulently concealed the alleged defects and
66
Id.
67
Id.
See, e.g., Reeb v. Daniels Lincoln-Mercury Co., 193 Ga. App. 817,
819 (1989); Davenport v. Ford Motor Co., No. 1:05-cv-3047-WSD, 2006 WL
68
2048308, at *3 (N.D. Ga. July 20, 2006).
69
ReMax North Atlanta v. Clark, 244 Ga. App. 890, 893 (2000).
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misrepresented to potential customers that the Shingles were durable and
conformed to applicable industry standards. “Suppression of a material fact
which a party is under an obligation to communicate constitutes fraud.”70
“However, in a fraudulent concealment action, there must first exist a duty to
communicate the omitted or concealed material fact to the defrauded party.”71
The Defendant argues that it lacked the requisite relationship with the
Dishmans necessary for a duty to disclose to have existed. Under Georgia law,
“[a] party can be held liable for fraudulently concealing a material fact only if
the party has a duty to disclose or communicate the fact.”72 The Dishmans argue
in response that their fraud claim should survive for two reasons. First, they
argue that the Defendant made “pre-sale affirmative misrepresentations,” in the
form of samples and a brochure, to induce them to purchase the Shingles while
knowing that they were defective.73 Second, they argue that the Defendant owed
them a duty to disclose based upon the particular circumstances of this case.
However, both of these arguments fail.
As to their first argument, the Dishmans have failed to provide sufficient
evidence that the Defendant made any type of affirmative misrepresentations
70
O.C.G.A. § 23-2-53.
71
McCabe v. Daimler AG, 160 F. Supp. 3d 1337, 1350 (N.D. Ga.
2015).
Baxter v. Fairfield Fin. Servs., Inc., 307 Ga. App. 286, 293 (2010)
(quoting Lilliston v. Regions Bank, 288 Ga. App. 241, 245 (2007)).
72
73
Dishmans’ Br. in Opp’n to Def.’s Mot. for Partial Summ. J., at 21.
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beyond mere puffery, let alone that they were induced into relying upon these
representations. The Dishmans never had any interaction or communication
with the Defendant. Instead, they depend upon marketing materials shown to
them by their builder to argue that the Defendant made affirmative misrepresentations. The Dishmans argue that they “were presented with sample
Shingles and a brochure touting the quality, aesthetics and longevity of these
30-year warranty shingles.” However, as discussed above, the Dishmans can
only recall this brochure describing the Shingles as “quality” shingles that would
hold up well.74 Statements of puffery such as this cannot form the basis of a
claim for fraud.75 “Misrepresentations are not actionable unless the complaining
party was justified in relying thereon in the exercise of common prudence and
diligence.”76 When a representation merely consists of “general commendations
or mere expressions of opinion, hope, expectation, and the like,” the party to
whom it is made is not justified in relying upon it.77
Furthermore, the sample of the Shingles shown to the Dishmans also fails
74
Diane Dishman Dep. at 43.
75
Randall v. Smith, 136 Ga. App. 823, 824-25 (1975) (“We conclude
that appellant has not shown fraud in the inducement for several reasons. In the
first place, the oral statements made by Smith, that the car was in good
condition and suitable for driving was mere sales ‘puffing.’ The statement was
that of an opinion not a statement of fact. The statement of an opinion cannot
constitute the basis for a claim of fraud.”).
76
Wilkinson v. Walker, 143 Ga. App. 838, 839 (1977) (internal
quotations omitted).
77
Id.
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to form the basis of a fraud claim. As discussed above, the sample of the
Shingles only purportedly represented to the Dishmans what the Shingles would
look like. A reasonable jury could only conclude that the sample represented to
the Dishmans that the Shingles would generally conform to the qualities
exhibited by the sample. It would be unreasonable for the Dishmans to infer
from the sample that the Shingles would last thirty years, that the Defendant
would continue to manufacture the Shingles, or that the Shingles contain any
characteristic or quality outside of what the sample itself shows. Therefore, the
sample shown to the Dishmans cannot be considered a misrepresentation as to
the presence of defects.
The Dishmans also argue that the Defendant made an affirmative
misrepresentation when it denied their warranty claim and stated that there
was no manufacturing defect in the Shingles. However, this argument fails for
two reasons. First, this alleged misrepresentation occurred after the Dishmans
had already purchased and installed the Shingles on their roof – thus, they
could not have relied upon this misstatement in deciding to purchase the
Shingles. Second, the Dishmans also fail to establish reliance because they
admit that they did not believe this claim to be true. Ms. Dishman testified that
“Atlas sent us a letter confirming they had received all of that and that -- just
basically saying that they didn’t think that we had a problem. And we didn’t
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agree.”78 She further stated that “we just didn’t agree with that letter” and that
she “did have reason to believe it wasn’t true.”79 Furthermore, by this time, the
Dishmans had already retained counsel.80 Since the Dishmans did not believe
in the veracity of this claim, they cannot assert that they relied upon the
misstatement or were induced into taking any form of action by it that caused
them harm.
The case that the Dishmans rely upon, Georgia-Carolina Brick & Tile Co.
v. Brown,81 is distinguishable. There, the defendant agreed to sell bricks to the
plaintiff, all of which would be from the same “run” and have the same range of
color.82 However, the defendant shipped bricks from two different ranges of
color, and the bricks laid had different appearances.83 The defendant, when
questioned, repeatedly assured the plaintiff that there were no problems with
the bricks, and that they would look the same once they were cleaned up and
dried.84 The court concluded that the plaintiff established a prima facie case of
fraud. The court noted that the defendant’s assurances that the bricks would
78
Diane Dishman Dep. at 67 (emphasis added).
79
Id. at 68.
80
Id. at 63.
81
153 Ga. App. 747 (1980).
82
Id.
83
Id.
84
Id.
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match when they dry were representations of fact as to the “inherent nature and
quality of the brick,” and “not mere opinions.”85 In contrast, the Dishmans can
only establish that the Defendant represented that the Shingles were “quality”
and would “hold up well.” Furthermore, the Dishmans, unlike the plaintiff in
Georgia-Carolina Brick & Tile Co., cannot show that they relied upon the
Defendant’s assurances in its warranty denial that the Shingles were free from
defects.
The Dishmans also fail to establish that the Defendant owed them a duty
to disclose. “The obligation to communicate may arise from the confidential
relations of the parties or from the particular circumstances of the case.”86 The
Dishmans did not have a confidential relationship with the Defendant, therefore
they must show that the particular circumstances of the case justify imposing
a duty to disclose upon the Defendant. The Dishmans argue that the particular
circumstances of this case warrant imposition of a duty to disclose because the
Defendant knew about defects in the Shingles and took steps to conceal these
defects from consumers such as the Dishmans.87
However, the Court finds no such “particular circumstances” exist in this
case warranting imposition of such a duty. “Those cases where Georgia courts
85
86
O.C.G.A. § 23-2-53.
87
25.
Id. at 748.
Dishmans’ Br. in Opp’n to Def.’s Mot. for Partial Summ. J., at 24-
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have found particular circumstances giving rise to a duty to disclose involve
dependent relationships sufficient to overcome the will of a party.”88 “Absent a
confidential relationship, no duty to disclose exists between parties engaged in
arms-length business transactions.”89 Here, the Dishmans have not established
that they had any “justifiable dependence” on the Defendant.90 In fact, the
Dishmans have not established that they had any pre-purchase communications
or relationship with the Defendant at all, let alone a confidential or dependent
relationship. Instead, this relationship, at most, constituted an arms-length
business transaction.91 The Dishmans never had any direct interaction with the
Defendant prior to purchasing the Shingles, and there was consequently no
reason for them to expect any type of disclosure from the Defendant.
The Dishmans also argue that the Defendant owed them a duty to
Mitchell v. Ford Motor Credit Co., 68 F. Supp. 2d 1315, 1320 (N.D.
Ga. 1998) (citing Cochran v. Murrah, 235 Ga. 304 (1975)); see also McCabe v.
Daimler AG, 160 F. Supp. 3d 1337, 1351 (N.D. Ga. 2015) (“Plaintiffs have failed
88
to cite to a single case in which a court has applied Georgia law to find a duty
to disclose outside of a confidential or special relationship in facts similar to this
case, where there is no evidence that Defendants had direct knowledge of
Plaintiffs' purchases of the vehicles in question and had no apparent
relationship with Plaintiffs.”).
89
Lilliston v. Regions Bank, 288 Ga. App. 241, 244 (2007).
90
Id.
91
The Dishmans did not purchase the Shingles directly from the
Defendant, nor did they have any pre-purchase communications with the
Defendant. Thus, labeling this as an arms-length business transaction may not
even be an accurate description.
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disclose because it actively concealed the defects in the Shingles.92 “Concealment
of material facts may amount to fraud when direct inquiry is made, and the
truth evaded, or where the concealment is of intrinsic qualities of the article
which the other party by the exercise of ordinary prudence and caution could not
discover.”93 However, since the Defendant never interacted with the Dishmans,
it could not have actively concealed these alleged defects from them. In the cases
cited by the Dishmans, the plaintiffs and defendants directly interacted with one
another, and the defendant took some kind of action to conceal the alleged
defects.94 Unlike in Georgia-Carolina Brick, where the defendant actively
attempted to hide the fact that the bricks purchased were from two separate
runs and ranges, the Defendant here never had any form of direct communication or contact with the Dishmans, absent their warranty claim communications.95 Without any actual interaction with the Dishmans, the Defendant never
engaged in conduct that could be considered concealment. Therefore, no duty to
disclose existed.
Finally, the Dishmans argue that whether the particular circumstances
92
Dishmans’ Br. in Opp’n to Def.’s Mot. for Partial Summ. J., at 21.
93
Georgia-Carolina Brick & Tile Co. v. Brown, 153 Ga. App. 747, 755
(1980) (internal quotations omitted).
94
See, e.g., id. at 747-48.
95
See id. at 748.
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of a case give rise to a duty to disclose is a question of fact for the jury.96 While
that is true, the Dishmans have not offered evidence that a jury could rely upon
to conclude that the particular circumstances of the case justify imposition of a
duty to disclose. While in many circumstances this question is appropriate for
a jury to consider, this case presents no dispute of material fact as to this issue.
The evidence, construed in the light most favorable to the Dishmans, has not
established that the Defendant owed the Dishmans a duty to disclose. Therefore,
their fraudulent concealment claim fails as a matter of law.
3. Leak Related Damages
Next, the Defendant argues that the Dishmans have failed to provide
evidence of leak-related damages. The Court agrees. The Dishmans have failed
to show that they have experienced a leak in their roof at all, let alone prove
that such a leak was the result of a defect in the Shingles. As this Court
previously noted, “the alleged defect in the Shingles must have caused a class
member’s injuries in order for that class member to recover.”97 “If the roof fails
due to hail or wind damage or improper installation, the homeowner-class
member has not been damaged.”98 The Dishmans have only provided evidence
that the Shingles experienced cracking, blistering, and excessive granule loss.99
96
Dishmans’ Br. in Opp’n to Def.’s Mot. for Partial Summ. J., at 20.
97
See [Doc. 64] at 34.
98
Id. at 34-35.
99
Dishmans’ Statement of Additional Material Facts ¶¶ 24-27.
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They have not provided any evidence that defects in the Shingle caused some
type of external injury, such as a roof leak. In fact, in her deposition testimony,
Ms. Dishman admitted that no leaks have occurred because of a defect in the
Shingles.100 Even if the Dishmans can prove that the Shingles are defective in
general, they would need to provide evidence of causation and damages to
recover for leak-related injuries. They have failed to do so. Therefore, to the
extent that the Dishmans seek to recover for damages resulting from leaks in
their roof, these claims for damages fail as a matter of law.
4. Declaratory Judgment
Next, the Defendant moves for summary judgment as to the Dishmans’
request for declaratory relief. The Defendant argues that the Dishmans lack
standing to seek declaratory relief, and that declaratory relief would violate the
Defendant’s Seventh Amendment right to a jury trial.101 However, the Court
concludes that the Dishmans’ request for a declaratory judgment can proceed to
the extent that their substantive claims also survive.
The Defendant first argues that the Plaintiffs lack standing because the
requested declarations will not redress their injury.102 To satisfy the constitutional case-or-controversy requirement, a plaintiff must allege personal injury
100
Diane Dishman Dep. at 70.
101
Def.’s Mot. for Partial Summ. J. as to the Dishmans, at 11-16.
102
Id. at 11-13.
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“that is fairly traceable to the challenged action of the defendant and likely to
be redressed by a favorable judicial decision.”103 The Plaintiffs may establish
redressability if they show that the “practical consequence” of the declaratory
relief “would amount to a significant increase in the likelihood that the
[Plaintiffs] would obtain relief that directly redresses the injury suffered.”104
Here, the requested declarations – e.g., that the Shingles are defective – would
make it more likely that the Dishmans would obtain the necessary relief from
the Defendant because it would establish an essential component to liability.
And although the Dishmans’ remaining claims may provide more direct relief,
the Declaratory Judgment Act allows plaintiffs to seek a declaration of rights
“whether or not further relief is or could be sought.”105 Therefore, the Dishmans
do not lack standing as to their request for declaratory relief.
The Defendant also argues that a declaratory judgment would not provide
the Dishmans with relief because the doctrine of res judicata would bar them
from pursuing any claims in the future related to these facts.106 However, a
declaratory judgment in the Dishmans’ favor would establish an essential
component of liability and establish an enforceable right on the part of the
103
Lexmark Int’l, Inc. v. Static Control Components, Inc., 134 S. Ct.
1377, 1386 (2014).
104
105
106
Utah v. Evans, 536 U.S. 452, 464 (2002).
28 U.S.C. § 2201.
Def.’s Mot. for Partial Summ. J. as to the Dishmans, at 15.
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Dishmans relating to this liability. In such a scenario, the Dishmans would not
be asking for a second bite at the apple by seeking to enforce these rights
because they would have already received a favorable adjudication by this
Court. Furthermore, as already noted, the Declaratory Judgment Act does not
require a plaintiff to seek further relief in order to receive a declaratory
judgment. Thus, the prospect of a future suit being barred due to res judicata
should not preclude a declaratory judgment in this action, since the Dishmans
may not ever seek future relief. Therefore, this argument lacks merit.
The Defendant also argues that the Plaintiffs’ declaratory judgment claim
must be dismissed because it abridges the Defendant’s right to a jury trial under
the Seventh Amendment.107 But as the Eighth Circuit Court of Appeals has
explained, “[a] litigant is not necessarily deprived of a jury trial merely because
it is a party to a declaratory judgment action . . . if there would have been a
right to a jury trial on the issue had it arisen in an action other than one for
declaratory judgment, then there is a right to a jury trial in the declaratory
judgment action.”108 Since this action is essentially legal in nature, the
107
Id. at 13.
Northgate Homes, Inc. v. City of Dayton, 126 F.3d 1095, 1098-99
(8th Cir. 1997); see also Beacon Theatres, Inc. v. Westover, 359 U.S. 500, 504
108
(1959) (“[T]he Declaratory Judgment Act . . . specifically preserves the right to
jury trial for both parties.”); Simler v. Conner, 372 U.S. 221, 223 (1963) (“The
fact that the action is in form a declaratory judgment case should not obscure
the essentially legal nature of the action. The questions involved are traditional
common-law issues which can be and should have been submitted to a jury
under appropriate instructions as petitioner requested . . . [and] the courts
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Defendant is still entitled to a trial by jury. Therefore, the Plaintiffs’ claim for
a declaratory judgment does not violate the Seventh Amendment.
B. Anthony Costanzo
Next, the Defendant moves for partial summary judgment as to Anthony
Costanzo. The Defendant argues that: (1) Costanzo’s tort claims fail due to the
economic loss rule; (2) the express warranty claims based on outside statements
fail as a matter of law; (3) Costanzo’s warranty claims are time barred; (4)
Costanzo’s negligence, strict liability, and fraudulent concealment claims are
time barred; (5) Costanzo’s fraudulent concealment claim fails; (6) any claims
for leaked-related damages fail as a matter of law; and (7) Costanzo lacks
standing to pursue claims for declaratory relief. The Court addresses each of
these arguments in turn.109
1. Negligence and Strict Liability
The Defendant first argues that Costanzo’s negligence and strict liability
claims are barred by the economic loss rule.110 “The economic loss rule provides
that absent personal injury or damage to property other than to the allegedly
below erred in denying petitioner the jury trial guaranteed him by the Seventh
Amendment.”).
109
Costanzo does not oppose the Defendant’s Motion for Partial
Summary Judgment with regard to his claim for breach of the implied warranty
of merchantability. See Costanzo’s Br. in Opp’n to Def.’s Mot. for Partial Summ.
J., at 2 n.1. Therefore, the Court deems this claim to be abandoned.
110
Def.’s Mot. for Partial Summ. J. as to Costanzo, at 4-6.
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defective product itself an action in negligence does not lie and any such cause
of action may be brought only as a contract warranty action.”111 This rule applies
to strict liability claims as well.112 At the Motion to Dismiss stage, the Court
dismissed the Dishmans’ negligence and strict liability claims because they only
alleged damage to the Shingles themselves, but allowed Costanzo’s claims to
proceed because he alleged that the defective Shingles caused leaks that
damaged his other property. The Defendant now argues that Costanzo has failed
to produce evidence supporting this allegation. Thus, according to the Defendant, these claims should be barred by the economic loss rule.113 The Court
agrees.
Costanzo’s claims for negligence and strict liability fail because he has not
produced evidence that a defect in the Shingles, as opposed to some other factor,
caused the leak that his roof experienced. As this Court previously noted, “[a]ll
roofs will fail eventually.”114 “If the roof fails due to hail or wind damage or
improper installation, the homeowner-class member has not been damaged.”115
Costanzo points to the opinion of the Plaintiffs’ expert, Dean Rutila, as evidence
111
Holloman v. D.R. Horton, Inc., 241 Ga. App. 141, 147 (1999).
112
See Home Depot U.S.A., Inc. v. Wabash Nat’l Corp., 314 Ga. App.
360, 366 (2012) (“[T]he economic loss rule bars the plaintiff from seeking
recovery under strict liability or negligence theories.”).
113
Def.’s Mot. for Partial Summ. J. as to Costanzo, at 5.
114
See [Doc. 64] at 34.
115
See id. at 34-35.
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that a defect in the Shingles caused his roof leaks. Rutila studied 351 roofs
containing the Shingles, including Costanzo’s roof, and concluded that the
Shingles are defective.116 However, Rutila admits that he was unable to show
that any of the alleged defects in the Shingles, including blisters, cracks, and
loss of granule surfacing, resulted in a leak in any of the roofs he studied.117
Instead, he stated that he believed that the Shingles “will leak” in the future.118
Rutila concedes that he was unable to show that the roofs he studied, including
Costanzo’s roof, had experienced leaks due to defects in the Shingles. Given this
admission, Rutila’s expert opinion is insufficient to prove that a defect in the
Shingles, as opposed to some other factor, caused the roof leaks in Costanzo’s
home. Therefore, since Costanzo has not provided evidence establishing a causal
link between defects in the Shingles and an external injury to his person or
property, his claims for negligence and strict liability are precluded by the
economic loss rule.119
2. Express Warranties Outside of Atlas Limited Warranty
Next, the Defendant moves for summary judgment as to Costanzo’s claim
116
Rutila Dep. at 84-85.
117
Id. at 84-85, 124, 167.
118
Id. at 84-85.
Busbee v. Chrysler Corp., 240 Ga. App. 664, 666 (1999) (“Here,
since it is undisputed that Busbee suffered neither an injury to his person nor
to his property, his attempt to recover under a strict liability theory was
foreclosed absent evidence demonstrating the existence of an exception to the
economic loss rule.”).
119
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for breach of express warranties outside of the Atlas Limited Warranty.
Costanzo asserts that the Shingles did not conform to representations made by
the Defendant in two ways. First, Costanzo claims that he saw a sample of the
Shingles, and that the Shingles installed on his roof did not conform to that
sample.120 Second, Costanzo contends that the Defendant represented that the
Shingles would last for thirty years, which the Shingles on his roof failed to
do.121 The Court finds that the Defendant is entitled to summary judgment as
to each of these claims.
First, Costanzo’s warranty by sample argument fails. As explained above,
O.C.G.A. § 11-2-313 provides that an express warranty can be created by
sample. A sample is an express warranty that the goods sold and to be delivered
“will be of as good quality as the samples exhibited.”122 Here, Costanzo has failed
to show that the Shingles delivered were a different or lesser quality than the
sample he viewed. Even if those Shingles did not live up to the expectations he
had, he still admits that he received the same type of Shingles as the sample he
inspected. This does not constitute a breach of warranty.123 A warranty by
120
Costanzo’s Br. in Opp’n to Def.’s Mot. for Partial Summ. J., at 4.
121
Id.
122
Christian v. Knight & Co., 128 Ga. 501 (1907).
See Printing Ctr. of Tex., Inc. v. Supermind Publ’g Co., 669 S.W.2d
779, 784 (Tex. App. 1984) (“Appellee’s witness testified that he was shown a
sample of the newsprint to be used and that the tendered books were not the
same color as the sample. The witness stated the pages of the books were gray
while the sample was white. This testimony is evidence of nonconformity
123
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sample merely warrants that the good delivered will be the same or similar to
the sample of the good viewed. Costanzo received the same type of Shingle as
the sample he viewed – even if the quality of those Shingles ultimately became
questionable. Since Costanzo cannot show that the Shingles he received were of
a lesser quality than the sample he viewed, he cannot prove that there was a
breach, which is an essential element of a breach of warranty claim.
The Defendant is also entitled to summary judgment as to Costanzo’s
express warranty claims based upon the Defendant’s marketing materials. The
Defendant argues that Costanzo has not shown that he relied upon these
marketing materials. However, as with the Dishmans, Costanzo need not prove
reliance. Instead, he only needs to show that the Defendant did in fact make the
alleged statements constituting warranties. But, Costanzo’s claim fails because
he has failed to produce evidence of these express warranties or their specific
terms. The only evidence Costanzo provides is his deposition testimony
describing a sales brochure that referenced a thirty-year warranty for the
Shingles. During this deposition, Costanzo testified that he could not recall any
statements made concerning the Shingles outside of the brochure that he
viewed.124 Mr. Costanzo stated that “all I recall is what I saw on the . . .
brochure. That’s – there were certain things that stuck out in the brochure that
because any sample which is made part of the basis of the bargain creates an
express warranty that the whole of the goods shall conform to the sample.”).
124
Costanzo Dep. at 22.
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we were looking for in the house, a list of features, what we got with the house.
And that was one of the things that was mentioned. I don’t recall if we had a
conversation about specific shingles or warranties or anything like that.”125
Furthermore, when questioned whether the brochure mentioned a thirty-year
warranty, or whether the brochure stated that the Shingles would last thirty
years, Costanzo responded that “I don’t recall. I just remember seeing the 30
year lasting of the shingles. I don’t remember the exact words, what it said.”126
Thus, Costanzo has offered no evidence that the Defendant warranted to
him that the Shingles complied with industry standards and building codes, or
that they would maintain any other specific quality. Furthermore, the evidence
that Costanzo offers that purports to show that the Shingles would last for
thirty years is also insufficient. The only affirmation of fact or promise made by
the Defendant that Costanzo identifies in support of this allegation is a single
line in a sales brochure offered by a builder mentioning a thirty-year warranty
for the Shingles.127 A reasonable jury could only conclude that this is a reference
to the Atlas Limited Warranty, and not a guarantee that the lifetime of the
Shingles would be thirty years. Costanzo admits that he cannot recall whether
the marketing materials referred to a thirty-year warranty, or a thirty-year
125
Id. at 28.
126
Id. at 27.
127
Id. at 21.
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guaranteed lifetime. Since there are repeated references to the thirty-year Atlas
Limited Warranty, and no concrete evidence that the Defendant ever promised
that the Shingles would last for thirty years, a reasonable jury could only
conclude that the statements Costanzo encountered in these advertising
materials referred to the Atlas Limited Warranty.
The only other evidence Costanzo can offer concerning the other alleged
statements is the evidence of Villar and Mattina describing the range of
statements made in general in advertising materials.128 However, as explained
above, this evidence references statements by the Defendant which were not
made during this transaction, and cannot form the basis of a claim for breach
of express warranty. Therefore, since Costanzo has failed to produce evidence
establishing the existence of these outside warranties, along with the specific
terms of these warranties, his express warranty claim based on marketing
materials fails as a matter of law.
The Defendant also argues that Costanzo’s claims for breach of the
implied warranty of merchantability and breach of the advertisement-based
express warranties are time barred under O.C.G.A. § 11-2-725(2).129 O.C.G.A.
§ 11-2-725 provides that an action for breach of any contract for the sale of goods
128
Costanzo’s Br. in Opp’n to Def.’s Mot. for Partial Summ. J., at 8.
129
Since Costanzo does not oppose the Defendant’s Motion for Partial
Summary Judgment as to his claim for breach of the implied warranty of
merchantability, the Court need not address whether it is time barred.
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must be commenced within four years.130 It further provides that a breach of
warranty occurs when delivery is tendered, unless the warranty extends to
future performance of the goods:
A cause of action accrues when the breach occurs, regardless of the
aggrieved party's lack of knowledge of the breach. A breach of
warranty occurs when tender of delivery is made, except that
where a warranty explicitly extends to future performance of the
goods and discovery of the breach must await the time of such
performance the cause of action accrues when the breach is or
should have been discovered.131
Under this four-year statute of limitations, Costanzo’s sample-based breach of
warranty claim is time barred. The Shingles were installed on Costanzo’s house
in October 2004, and Costanzo testified that he viewed a sample board of
shingles before choosing to purchase the Shingles.132 Therefore, any breach of
this warranty would have occurred in October 2004, when delivery of the
Shingles was tendered. This warranty by sample does not explicitly extend to
the future performance of the Shingles – it warrants that the Shingles delivered
would be the same as the Shingles viewed. Therefore, Costanzo’s breach of
warranty by sample is time barred. However, Costanzo’s claim based upon the
express warranty that the Shingles would last thirty years would not be subject
O.C.G.A. § 11-2-725(1); see also McCabe v. Daimler AG, 948 F.
Supp. 2d 1347, 1361 (N.D. Ga. 2013) (“Georgia has adopted the UCC’s four-year
statute of limitations in relation to contracts for the sale of goods . . . .”).
130
131
O.C.G.A. § 11-2-725(2).
132
Def.’s Statement of Material Facts as to Costanzo ¶¶ 2-3;
Costanzo’s Statement of Additional Material Facts ¶ 30.
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to this statute of limitations, since such a warranty allegedly extended to the
performance of the Shingles, i.e., that they would last for thirty years.
Nonetheless, as explained above, this warranty claim still fails because
Costanzo has failed produce evidence that the Defendant ever made such a
promise concerning the longevity of the Shingles.
3. Fraudulent Concealment
Next, the Defendant moves for summary judgment as to Costanzo’s
fraudulent concealment claim. The Defendant argues that this claim fails for
two reasons. First, the Defendant argues that this claim is time barred.133
Second, it contends that the claim also fails on the merits because the Defendant
did not owe Costanzo a duty to disclose.134 The Court concludes that this claim
fails because Costanzo has not shown that the Defendant owed him a duty to
disclose. The Court therefore finds it unnecessary to address whether this claim
is time barred.
As noted above, to succeed on a fraudulent concealment claim, a plaintiff
must show that the defendant was under a duty to disclose.135 The Defendant
argues that it could not have owed Costanzo a duty of disclosure since it never
133
134
Id. at 15-16.
135
2015).
Def.’s Mot. for Partial Summ. J. as to Costanzo, at 11.
McCabe v. Daimler AG, 160 F. Supp. 3d 1337, 1350 (N.D. Ga.
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had any pre-purchase communications with him.136 Costanzo makes two
arguments in response. First, he argues that the Defendant made pre-sale
affirmative misrepresentations, including a sample Shingle and a thirty-year
warranty, that induced him to purchase the Shingles. Second, he contends that
the “particular circumstances” of the case justify imposition of a duty to disclose
upon the Defendant because it actively concealed the defects in the Shingles
from him.137 However, as with the Dishmans, these arguments fail.
First, the Defendant’s purported affirmative misrepresentations to
Costanzo fail to constitute a basis for a fraud claim. As to the thirty-year
warranty, Costanzo has not shown that this was a misrepresentation – the
Defendant did in fact offer a thirty-year warranty with the Atlas Limited
Warranty. Costanzo also seems to contend that the Defendant represented that
the Shingles would last thirty years, which constitutes an actionable misrepresentation.138 However, as discussed above, Costanzo admitted in his deposition
that he could not recall whether such representations promised a thirty-year
warranty, or that the Shingles would last for thirty years. Given that no other
evidence suggests that the Defendant ever promised that the Shingles would
last for thirty years, and that the evidence contains repeated references to the
136
Def.’s Mot. for Partial Summ. J. as to Costanzo, at 16.
137
Costanzo’s Br. in Opp’n to Def.’s Mot. for Partial Summ. J., at 19.
138
Id. at 20.
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thirty-year Atlas Limited Warranty, no reasonable jury could conclude that the
Defendant represented that the Shingles would last for thirty years. Instead, a
reasonable jury could only conclude that such statements referenced the Atlas
Limited Warranty. Thus, this alleged misrepresentation cannot provide the
foundation for Costanzo’s fraud claim.
Likewise, with regard to the sample Shingle, Costanzo has also not shown
that this is a misrepresentation at all. As discussed above, the sample merely
represented to Costanzo that he would receive Shingles of similar quality to the
sample. The sample intended to convey that it was representative of the type of
Shingles that Costanzo would receive. As noted above, Costanzo has not shown
that the Shingles he received were different than the sample he viewed.
Costanzo alleges that the Shingles were inherently defective – but that does not
mean that the sample Shingle was not representative of the Shingles he
received. Therefore, for the same reason that Costanzo’s warranty by sample
claim fails, the sample also cannot constitute a basis for his fraud claim.
Second, Costanzo also fails to establish that the Defendant owed him a
duty to disclose based upon the particular circumstances of the case. Like the
Dishmans, Costanzo entered into an arms-length transaction with the
Defendant.139 He did not purchase the Shingles under circumstances sufficient
139
In fact, it may be a stretch to classify this as an arms-length
transaction, since Costanzo did not purchase the Shingles from the Defendant.
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for the Defendant to overcome his will.140 Therefore, the ordinary reasons for
imposing a duty to disclose do not exist here. And, as with the Dishmans,
Costanzo has not shown that the Defendant actively concealed the defects from
him. The Defendant must have taken some type of concrete action to have
actively concealed the defect.141 The Defendant could not have taken such an
action or engaged in conduct considered active concealment when it never had
any form of contact or interaction with Costanzo. Therefore, no duty to disclose
existed. Since Costanzo has failed to establish a prima facie case of fraud, the
Court finds it unnecessary to address whether this claim is time barred.
4. Declaratory Judgment
Finally, the Defendant moves for summary judgment as to Costanzo’s
request for a declaratory judgment. The Defendant argues that Costanzo lacks
standing to seek a declaratory judgment, and that such a judgment would
violate the Seventh Amendment.142 However, for the same reasons that the
Dishmans’ declaratory judgment claim can survive, Costanzo’s claim for a
declaratory judgment can also proceed.
Mitchell v. Ford Motor Credit Co., 68 F. Supp. 2d 1315, 1320 (N.D.
Ga. 1998) (citing Cochran v. Murrah, 235 Ga. 304 (1975)).
140
141
Cf. Paws Holding, LLC v. Daikin Indus., Ltd., CV 116-058, 2017
WL 706624, at *15 (S.D. Ga. Feb. 22, 2017) (“Notably, ‘[c]oncealment of the
cause of action must be by positive affirmative act and not by mere silence.’”).
142
Def.’s Mot. for Partial Summ. J. as to Costanzo, at 17-21.
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IV. Conclusion
For the reasons stated above, the Defendant’s Motion for Partial
Summary Judgment as to the Plaintiffs Diane Dishman and Rodney Dishman
[Doc. 65] is GRANTED in part and DENIED in part, and the Defendant’s
Motion for Partial Summary Judgment as to the Plaintiff Anthony Costanzo
[Doc. 66] is GRANTED in part and DENIED in part.
SO ORDERED, this 8 day of June, 2018.
/s/Thomas W. Thrash
THOMAS W. THRASH, JR.
United States District Judge
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