Atlantic Waste Services, Inc. v. Mack Trucks, Inc.

Filing 29

ORDER granting in part and denying in part 19 Motion for Summary Judgment. Signed by Judge William T. Moore, Jr on 3/25/2016. (loh)

IN THE UNITED STATES DISTRICT COURT FOR
THE SOUTHERN DISTRICT OF GEORGIA
SAVANNAH DIVISION

ATLANTIC WASTE SERVICES,
INC.,
Plaintiff,
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CASE NO. CV414_21?

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MACK TRUCKS, INC.,
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Defendant.
ORDER

Before the Court is Defendant Mack Truck, Inc.'s
Motion for Summary Judgment. (Doc. 19.) For the following
reasons, Defendant's motion is GRANTED IN PART and DENIED
IN PART. As a result, Plaintiff's claims for breach of the

express warranties will proceed to trial. However,
Defendant is entitled to summary judgment with respect to
Plaintiff's claims for breach of the implied warranty of
fitness for a particular purpose and breach of the implied
warranty of merchantability. Finally, Plaintiff is
precluded from seeking incidental and consequential damages
as the result of Defendant's alleged breach of the express
warranties.

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BACKGROUND
This case stems from Plaintiff Atlantic Waste
Services, Inc.'s purchase of three trucks manufactured by
Defendant Mack Truck, Inc.' (Doc. 21 at 1.) Plaintiff is a
refuse-collection company that utilizes large, front-end
loading garbage trucks to empty dumpsters located at
commercial establishments. (Id. at 3.) In 2008 and 2009,
Plaintiff purchased three trucks from a third-party dealer
for use in Plaintiff's commercial refuse collection
business .2 (Doc. 22 ¶E 4-5.) Plaintiff identifies the trucks
as Unit-26, Unit-27, and Unit-28. (Id. ¶ 5.) With respect
to these trucks, Defendant manufactured the truck chassis,
which included the engine and exhaust system. (Id. ¶ 22.) A

separate entity outfitted the trucks for their use in
refuse collection. (Id.) Each truck included a spark-fired
regeneration system designed to filter toxic substances
from its exhaust. (Doc. 21 at 6.) According to Plaintiff,
the regeneration systems suffered from numerous problems
that would eventually lead to the trucks completely
shutting down. (Id. at 8.)
1

For the purposes of ruling on Defendant's Motion for
Summary Judgment, the Court construes the facts in the
light most favorable to Plaintiff. See Matsushita Elec.
Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 577-78
(1986)
2
Plaintiff purchased two trucks in 2008 and one truck in
2009. (Doc. 22 IT 4-5.)
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Defendant warranted the vehicles for 12 months or
100,000 miles, and the emissions systems for 60 months or
100,000 miles. (Doc. 22 ¶ 36.) The vehicle warranty
provided that
Mack Trucks, Inc. (the "Manufacturer") warrants
each new MACK motor vehicle (the "Vehicle")
to be free from defects in material or
workmanship under normal use and service, its
obligation under this warranty being limited to
repairing or replacing, as hereinafter provided,
at its option, at the Manufacturer's authorized
truck repair facility any part or parts of the
Vehicle found to the Manufacturer's satisfaction
to be defective.
(Id. ¶ 35.) The emission warrant Y3 stated that
Inc.'s obligations under this
Mack Trucks,
warranty is limited to the repair or replacement,
at Mack Truck's option, of any part(s) of the
Emission Control Systems of such engine and/or
vehicle found to be defective upon examination by
Mack.
(Id. ¶ 37.) In addition, both warranties expressly excluded
"any implied warranty of merchantability or fitness for a
particular purpose, and of any other obligation on the part
of the manufacturer, including, without limitation of the
foregoing, consequential and incidental damage." (Id. ¶ 40;
accord ¶I 41-43.)

The quoted language is the warranty covering Unit-26 and
Unit-27. (Doc. 22 ¶ 37.) While the language of the warranty
for Unit-28 was slightly different (Id. ¶I 37, 38), the
interpretation of both provisions is identical with respect
to their limitations and exclusions.
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Plaintiff alleges that it began having problems with
the trucks' regeneration systems soon after they were
placed in service. (Doc. 21 at 11.) Plaintiff presented
Unit-26 to an authorized Mack Service Center for repair
under the emission warranty a total of five times during
the warranty period. (Doc. 19, Attach. ]. at 13.) Unit-27
was presented only once, while Unit-28 was presented four
times. (Id.) According to the local Mack authorized service
technician, other customers encountered similar problems
with the regeneration system. (Doc. 21, Attach. A 64:1016.) In addition, the technician stated that he did not
believe Plaintiff's issues with the regeneration systems
were resolved by any repairs performed during the warranty
period. (Id. 64:17-21.)
After the warranties expired, Plaintiff routinely
returned the trucks to the authorized technician for issues
related to the regeneration systems. (Doc. 21 at 12-13.)
Ultimately, Plaintiff disposed of all three trucks, selling
Unit-27 and Unit-28 to another waste disposal company for
$100,000 and $80,000, respectively. (Doc. 22 ¶t 10, 13.)
Unit-26 was destroyed in a fire, resulting in an insurance
payment of $130,000. (Doc. 22 1 7.)
Based on the trucks' poor service history, Plaintiff
filed a complaint in the State Court of Chatham County.

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(Doc. 1, Ex. A.) Defendant timely removed the complaint to
this Court, pursuant to 28 U.S.C. § 1332, based on the
diversity of the parties. (Doc. 1.) In the complaint,
Plaintiff alleges claims for breach of express warranty
(id., Ex. A M1 33-38), breach of the implied warranty of
fitness for a particular purpose (Id. ¶I 39-47), and breach
of the implied warranty of merchantability (id. 11 48-56).
Plaintiff seeks actual, incidental, and consequential
damages (id. H 27-29, 47, 56), as well as attorney's fees
and costs (id. ¶11 57-59)
Following discovery, Defendant filed its Motion for
Summary Judgment. In its motion, Defendant argues that it
did not breach the express warranties because Defendant
successfully remedied any problems with the regeneration
systems each time Plaintiff presented a truck for repair.
(Doc. 19, Attach. 1 at 11-17.) In addition, Defendant
contends that the language of the express warranties
specifically disclaims any implied warranties of fitness
for a particular purpose and merchantability, and limits
Defendant's liability to repair or replacement. (Id. at 1721.) According to Defendant, Plaintiff's implied warranty
claims also fail due to the lack of privity between it and
Defendant. (Id. at 23-24.) Finally, Defendant maintains
that Plaintiff has failed to point to competent evidence in

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the record establishing any measure of damages. (Id. at 2223.)
In response, Plaintiff argues that Defendant breached
the express warranties because Defendant was provided
reasonable opportunities to repair the faulty regeneration
systems, but failed to successfully remedy the systems'
performance issues. (Doc. 21 at 15-19.) Also, Plaintiff
contends that the express warranties failed of their
essential purpose, entitling it to the protections of the
implied warranties of fitness for a particular purpose and
merchantability, along with incidental and consequential
damages. (Id. at 19-22.) In addition, Plaintiff reasons
that the express warranties provided by Defendant establish
the requisite privity necessary to maintain actions for
breach of the implied warranties of fitness and
merchantability. (Id. at 22-23.) Finally, Plaintiff states
that the record contains evidence sufficient to support an
award of damages. (Id. at 23-24.)
ANALYSIS

I. SUMMARY JUDGMENT STANDARD
According to Fed. R. Civ. P. 56(a),

"[a] party may

move for summary judgment, identifying each claim or
defense—or the part of each claim of defense—on which
summary judgment is sought." Such a motion must be granted

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"if the movant shows that there is no genuine dispute as to
any material fact and the movant is entitled to judgment as
a matter of law." Id. The "purpose of summary judgment is
to 'pierce the pleadings and to assess the proof in order
to see whether there is a genuine need for trial.' 11
Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S.
574, 587 (1986) (quoting Fed. R. Civ. P. 56 advisory
committee notes).
Summary judgment is appropriate when the nonmovant
"fails to make a showing sufficient to establish the
existence of an element essential to that party's case, and
on which that party will bear the burden of proof at
trial." Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).
The substantive law governing the action determines whether
an element is essential. DeLong Equip. Co. v. Wash. Mills
Abrasive Co., 887 F.2c1 1499, 1505 (11th Cir. 1989).
As the Supreme Court explained:
[A] party seeking summary judgment always bears
the initial responsibility of informing the
district court of the basis for its motion, and
identifying those portions of the pleadings,
depositions, answers to interrogatories, and
admissions on file, together with the
affidavits, if any, which it believes
demonstrate the absence of a genuine issue of
material fact.
Celotex, 477 U.S. at 323. The burden then shifts to the
nonmovant to establish, by going beyond the pleadings, that

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there is a genuine issue as to facts that are material to
the nonmovant's case. Clark v. Coats & Clark, Inc., 929
F.2d 604, 608 (11th Cir. 1991).
The Court must review the evidence and all reasonable
factual inferences arising from it in the light most
favorable to the nonmovant. Matsushita, 475 U.S. at 587-88.
However, the nonmoving party "must do more than simply show
that there is some metaphysical doubt as to the material
facts." Id. at 586. A mere "scintilla" of evidence, or
simply conclusory allegations, will not suffice. See, e.g.,
Tidwell v. Carter Prods., 135 F.3d 1422, 1425 (11th Cir.
1998). Nevertheless, where a reasonable fact finder may
"draw more than one inference from the facts, and that
inference creates a genuine issue of material fact, then
the Court should refuse to grant summary judgment."
Barfield v. Brierton, 883 F.2d 923, 933-34 (11th Cir.
1989)
II. BREACH OF THE EXPRESS WARRANTIES
Defendant argues that it did not breach the express
warranties because it successfully repaired the
regeneration systems each time Plaintiff presented a truck
for repair. (Doc. 19, Attach. 1 at 14-17.) Before a
defendant can be considered in breach of an express

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warranty that limits liability to repair or replacement of
the defective part, the plaintiff must have provided the
defendant with both notice of the alleged defect and a
reasonable opportunity for repair. McDonald v. Mazda Motors
of Am., Inc., 269 Ga. App. 62, 65, 603 S.E.2d 456, 460
(2004). It is only upon a defendant's refusal or failure to
remedy the defect that it becomes liable for a breach of
the express warranty. Id. at 65-66, 603 S.E.2d at 460
(" '[I)t is the refusal to remedy within a reasonable time,
or a lack of success in the attempts to remedy which would
constitute a breach of warranty.' " (quoting Ford Motor Co.
V.

Gunn, 123 Ga. App. 550, 551, 181 S.E.2d 694, 696

(1971))). This conclusion rests on the notion that "if the
defect can be cured, then the purchaser has received what
he bargained for under the terms of the warranty—a product
that would pass in the trade." Id. at 66, 603 S.E.2d at
460. Generally, whether a defendant refused or was unable
to repair a defect is a factual determination left to the
exclusive province of the jury. Id. at 67, 603 S.E.2d at
461 (citing Mulkey v. Gen. Motors Corp., 164 Ga. App. 752,
753, 299 S.E.2d 48 (1982)).

In this case, Plaintiff has identified enough evidence
in the record that would permit a reasonable jury to
conclude Defendant breached the express warranties. First,
there is evidence in the record that Plaintiff presented
each truck to Defendant for warranty repair. Defendant
concedes that Unit-26 was presented for repair five times,
Unit-27 once, and Unit-28 four. (Doc. 19, Attach. 1 at 13.)
Moreover, Plaintiff points to evidence in the record
suggesting that Plaintiff attempted to repair the system by
using its in-house technicians, who received assistance and
direction from the authorized technician. (Doc. 21 at 16.)
On at least two occasions, the authorized technician
travelled to Plaintiff's facility to service the
regeneration systems. (Id.) These efforts failed to produce
an official paper trail of a truck being "presented" for
repair. However, this Court is unaware of any legal
authority requiring a high degree of formality such that
the parties' combined efforts cannot be considered a
reasonable opportunity for Defendant to repair the
regeneration system. The Court is simply unwilling to

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ignore the alleged substantial efforts undertaken by
Plaintiff in its attempt to keep the trucks in service.
Second, the record contains evidence that Defendant
failed to repair the alleged defective regeneration system.
Plaintiff has identified numerous attempts to repair the
regeneration system following the expiration of the
warranty period. (Doc. 21 at 12-13.) Indeed, even
Defendant's local authorized technician testified that the
regeneration system issues Plaintiff encountered in its
trucks were common for those model years, and that the
issues with the regeneration systems in Plaintiff's trucks
remained unresolved following any repairs performed during
the warranty period. (Doc. 21, Attach. A 64:10-21.) Because
there is evidence in the record sufficient to raise a
question for the jury whether Defendant failed to repair
the defective regeneration system, Defendant is not
entitled to summary judgment with respect to Plaintiff's
claim for breach of the express warranties.

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III. APPLICABILITY OF THE IMPLIED WARRANTIES OF FITNESS FOR
A PARTICULAR PURPOSE AND MERCHANTABILITY
In its Motion for Summary Judgment, Defendant argues 4
that it expressly disclaimed all implied warranties. (Doc.
19, Attach. 1 at 17-19.) Alternatively, Defendant contends
that any implied warranties must fail due to a lack of
privity between it and Plaintiff. (Id. at 23-24.) Plaintiff
responds that it can seek recovery under the implied
warranties, despite the disclaimer, because the express
warranties failed of their essential purpose. (Doc. 21 at
19-20.) With respect to privity, Plaintiff maintains that
the parties are in privity based the existence of the
express warranties (id. 22-23).
As an initial matter, Defendant's argument concerning
lack of privity can be easily dismissed. In Georgia,
implied warranties only run to parties in privity with the
party against whom the warranty is being asserted. McQueen
v. Minolta Bus. Sol., Inc., 275 Ga. App. 297, 300, 620
S.E.2d 391, 393 (2005) . This limitation normally operates
to preclude the ultimate consumer of a product from

Defendant offers no argument concerning whether it
breached the implied warranties, only that they are
inapplicable to this case.
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asserting implied warranties against a manufacturer. Lee v.
Mylan Inc., 806 F. Supp. 2d 1320, 1327 (M.D. Ga. 2011).
However, privity of contract exists when a manufacturer,
through an authorized dealer, extends an express warranty
to the plaintiff. Id. at 1327-28; see also Chrysler Corp.
v. Wilson Plumbing Co., 132 Ga. App. 435, 437, 208 S.E.2d
321, 323-24 (1974) (holding that privity of contract exists
and implied warranties are applicable "where an automobile
manufacturer, through its authorized dealer issues to a
purchaser of one of its automobiles from such dealer
admittedly as a part of the sale a warranty by the
manufacturer running to the purchaser").
In this case, the parties agree that the trucks were
covered under an express warranty. This warranty was
extended by Defendant to Plaintiff through an authorized
dealer. Accordingly, the parties are in privity of
contract, precluding Defendant from avoiding the implied
warranties on this ground.
As a result, Defendant's only remaining argument with
respect to the implied warranties is that the express
warranties did not fail of their essential purpose. tinder

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O.C.G.A. § 11-2-719, parties to a contract subject to the
Uniform Commercial Code ("UCC") may agree to remedies in
substitution of those provided under the UCC. This section
also provides that the parties may exclude certain types of
damages, including incidental and consequential damages.
O.C.G.A. § 11-2-719(1) (a). However, "where an apparently
fair and reasonable clause because of circumstances fails
in its purpose or operates to deprive either party of the
substantial value of the bargain, it must give way to the
general remedy provision of" the UCC. Id. cmt. n.1.
In this case, there is no evidence that the express
warranties failed of their essential purpose. As this Court
understands it, the crux of Plaintiff's argument is that it
is left without an effective remedy because Defendant was
unable or incapable of repairing the regeneration system.
(Doc. 21 at 19-20.) This ignores, of course, the
possibility that Defendant could have replaced the trucks
or system in question. In addition, Plaintiff has the very
remedy that it is seeking to enforce in this case: filing
suit based on Defendant's alleged breach of the express
warranty. See Fedrick v. Mercedes-Benz USA, LLC, 366 F.

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Supp. 2d 1190, 1200 (N.D. Ga. 2005); Atlanta Specialty Food
Distrib., Inc. v. Watkins Leasing Inc., 1982 WL 139732, at
*4 (N.D. Ga. Nov. 8, 1982) (unpublished); Fiat Auto USA,
Inc. v. Hollums, 185 Ga. App. 113, 115, 363 S.E.2d 312, 315
(1987). The parties have not identified, and this Court has
failed to locate, any Georgia case holding that an express
warranty fails of its essential purpose due only to the
inability of a party to successfully repair a product
defect. Cf. Hightower v. Gen. Motors Corp., 175 Ga. App.
112, 115, 332 S.E.2d 336, 338-39 (1985), overruled on other
grounds by Pender v. Witcher, 196 Ga. App. 856, 397 S.E.2d
193 (1990) (noting distinction between "a breach of the
limited warranty to repair or replace" and the "defeat of
the essential purpose of that limited warranty"). Rather,
the more reasonable interpretation of O.C.G.A. § 11-2719(2) and Georgia case law is that an express warranty
only fails of its essential purpose where it leaves a
plaintiff with either no remedy or one illusory in nature.
While Plaintiff may now be unsatisfied with its available
remedy, it must live by the bargain it made with Defendant.
Accordingly, Defendant is entitled to summary judgment with

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respect to Plaintiff's claims for breach of implied
warranties.
IV. DAMAGES
Plaintiff contends that it should be able to recover
incidental and consequential damages because the express
warranties failed in their essential purpose. (Doc. 21 at
22-23.) Even assuming such failures, however, Plaintiff is
still not entitled to incidental and consequential damages.
Georgia courts have routinely recognized that a breach or
failure of a limited warranty does not negate clauses
excluding specific types of damages. See, e.g., Hightower,
175 Ga. App. at 114, 332 S.E.2d at 338-39 ("The breach or
defeat of a limited warranty to repair or replace, of
As part of its argument, Plaintiff grossly misinterprets
Lee v. Mercedez-Benz USA, LLC, 276 Ga. App. 28, 622 S.E.2d
361 (2005), as permitting additional remedies under the UCC
where a seller excludes all limited warranties. (Doc. 21 at
19.) Plaintiff's error appears to stem from its misreading
the phrase "attempting to exclude all express or implied
warranties" to actually mean "attempting to exclude either
all express or all implied warranties." The language in Lee
clearly states that a warranty fails of its essential
purpose where it attempts to exclude all warranties,
whether they are express or implied. See 276 Ga. App. at
29, 622 S.E.2d at 362 ("[O.C.G.A. § 11-2-719(2)] applies in
cases where the seller attempts to exclude all express or
implied warranties."). Therefore, Plaintiff is incorrect in
its understanding that an express warranty automatically
fails of its essential purpose where it excludes all
implied warranties.

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course,

does

not

simultaneously

invalidate

other

limitations of damages contained in the new car warranty
•"); A-larms, Inc. v. Alarms Device Mfg. Co., 165 Ga.
App. 382, 386, 300 S.E.2d 311, 314 (1983) ("[C]onsequential
damages may be excluded or limited unless such would be
unconscionable, and such limitation of damages where the
loss is commercial is not prima facie unconscionable.")

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see also Atlanta Specialty Food, 1982 WL 139732, at *3
("Where an exclusive remedy fails of its essential purpose
it may be ignored but other clauses in the contract which
limit remedies may be left to stand or fall independently
of the stricken clause."). Under such circumstances, a
plaintiff's damages are measured by "the difference at the
time and place of acceptance between the value of the goods
accepted and the value they would have had if they had been
as warranted." Atlanta Specialty Food, 1982 WL 139732, at
*4; accord Hollums, 185 Ga. App. at 115, 363 S.E.2d at 315
(noting limitation of damages in express warranty and
measuring damages as "the difference at the time and place
of acceptance between the value of the goods accepted and
6

Plaintiff does not argue that the damage exclusions are
unconscionable.
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the value they would have had if they had been as
warranted"); see Fedrick, 366 F. Supp. 2d at 1200 ("A
plaintiff in a warranty case must show the difference
between the fair market value of the vehicle as warranted
and its fair market value as delivered in the allegedly
defective condition." (citing references omitted)).
In this case, the express warranties exclude liability
for incidental and consequential damages. As noted above,
this provision remains in force despite either a breach of
the express warranties or failures of their essential
purpose. Accordingly, Defendant is entitled to summary
judgment with respect to Plaintiff's claims for incidental
and consequential damages.
As a final attempt to avoid liability in this case,
Defendant contends that Plaintiff has failed to place in
the record any competent evidence to support a valuation
concerning the trucks. (Doc. 19, Attach. 1 at 22-23.)
Defendant appears to base this argument on a failure to
"identify any witness who would offer opinion testimony"
concerning the issue of damages. (Id. at 22.) Plaintiff,
however, points to its Vice President, Ben Wall, Jr., as

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competent to testify concerning the value of the trucks
both with and without the alleged defects. (Doc. 21 at 23.)
According to Plaintiff, Mr. Wall's significant experience
purchasing Plaintiff's refuse-collection trucks qualifies
him to testify concerning the appropriate measure of
damages. (Id.)
After reviewing the record in this case, the Court
concludes that Mr. Wall's experience qualifies him to
testify concerning the appropriate measure of damages.
Contrary to Defendant's belief, expert testimony is not
required to ascertain damages in a case such as this. In
this respect, Defendant's reliance on the Georgia Court of
Appeal's opinion in Fedrick is misplaced. In Fedrick, the
court merely determined that the plaintiff, whose
experience amounted to that of a mere consumer, was not
qualified to testify concerning the value of the warranted
vehicle in its defective condition and denied her request
for leave to file an expert witness report. 366 F. Supp. at
1195-96. Nothing in that case, or any other cited by
Defendant, leads to the inescapable conclusion that expert

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testimony is required to prove damages in a breach of
warranty case.
Under Georgia law, "the owner of property can be
qualified to state an opinion as to value." Monroe v.
Hyundai Motor Am., Inc., 270 Ga. App. 477, 478, 606 S.E.2d
894, 896 (2004) (citing Dixon v. Williams, 177 Ga. App.
702, 704, 340 S.E.2d 286 (1986)). Unlike the plaintiff in
Fedrick, Mr. Wall is not the occasional purchaser of
automobiles in the consumer context, but routinely engages
in the buying and selling of refuse-collection vehicles in
a commercial setting. Based on this experience, the Court
is satisfied that Mr. Wall can offer competent testimony
concerning any diminution of the trucks' value based on the
alleged defects. Accordingly, Defendant is not entitled to
summary judgment on this ground.
CONCLUSION

For the foregoing reasons, Defendant's Motion for
Summary Judgment is GRANTED IN PART and DENIED IN PART. As
a result, Plaintiff's claims for breach of express warranty
will proceed to trial. However, Defendant is entitled to
summary judgment with respect to Plaintiff's claims for

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breach of the implied warranty of fitness for a particular
purpose and breach of the implied warranty of
merchantability. In addition, Plaintiff is precluded from
seeking incidental and consequential damages as the result
of Defendant's alleged breach of the express warranty.
SO ORDERED this

day of March 2016.

WILLIAM T. MOORE, JR.
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF GEORGIA

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