Duncan Place Owners Association v. Danze, Inc. et al
MEMORANDUM Opinion and Order signed by the Honorable Edmond E. Chang. For the reasons stated in the Opinion, Defendant's motion for summary judgment 89 is granted. A separate AO-450 judgment shall be entered. Civil case terminated. Emailed notice(slb, )
UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
DUNCAN PLACE OWNERS
ASSOCIATION, on its own behalf and as
Assignee of Association members, et al.,
DANZE, INC., f/k/a GLOBE UNION
AMERICAN CORP., GLOBE UNION
GROUP, INC., AND GLOBE UNION
Judge Edmond E. Chang
MEMORANDUM OPINION AND ORDER
Duncan Place Owners Association (for convenience’s sake, call it Duncan
Place) is a condominium association in the State of Washington. The association
and its individual condo owners contend that faucets sold by Danze, Inc. have
failed, causing property damage throughout Duncan Place condos.1 R. 60, Second
Am. Compl. ¶ 46; R. 90, Pl.’s Resp. Br. at 3.2 According to Duncan Place, Danze has
failed to repair or replace the faucets as promised in its written warranty. Second
Am. Compl. ¶ 47. Danze previously moved to dismiss Plaintiffs’ second amended
complaint, R. 61, Def.’s Mot. Dismiss, which was granted in part and denied in part.
R. 74, 6/30/2016 Opinion and Order at 54. Only one claim remains: Duncan Place’s
Court has subject matter jurisdiction over the case under § 1332(a)(2)(A), as
the amount in controversy exceeds $75,000 and the parties are of diverse citizenship.
2Citation to the docket is “R.” followed by the entry number and, when necessary,
the relevant page or paragraph number.
claim for breach of express warranty against Danze. Now, Danze moves for
summary judgment on the breach of express warranty claim, claiming that Duncan
Place cannot show it is in privity with Danze or is a third-party beneficiary to the
faucet’s express warranty. R. 89, Def.’s Mot. Summ. J. ¶ 3. The Court agrees and
grants summary judgment.
In deciding Danze’s motion for summary judgment, the Court views the
evidence in the light most favorable to the non-moving party. Matsushita Elec.
Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). In April 2015, Duncan
Place and then-Plaintiff Phyllis Zisser filed a Class Action complaint regarding the
Danze faucets. R. 21, First Am. Compl.; R. 89-2, Def.’s Statement of Facts (DSOF)
¶ 1; R. 90-1, Pl.’s Resp. to DSOF ¶ 1. Danze’s first motion to dismiss followed, and
this Court dismissed Duncan Place’s breach of implied warranty claims as
untimely. R. 56, 9/15/2015 Opinion and Order at 20-21.
Plaintiffs’ Second Amended Complaint came in September 2015, which still
named Duncan Place and Zisser as plaintiffs, but also included 41 individually
identified condominium owners, as well as an additional singular plaintiff, Daniel
Donnelly. Second Am. Compl. ¶¶ 6-9; DSOF ¶ 4; Pl.’s Resp. to DSOF ¶ 4. Along with
class-action allegations, the Second Amended Complaint alleged six different claims
for relief, including breach of express warranty, breach of warranty of
merchantability, negligence, strict products liability, unjust enrichment, and a
violation of the Illinois Consumer Fraud and Deceptive Business Practices Act.
DSOF ¶ 5; Pl.’s Resp. to DSOF ¶ 5; Second Am. Compl. ¶¶ 54, 71, 80, 91, 97-99, 106,
114. Zisser was dismissed with prejudice, having accepted an Offer of Judgment
under Fed. R. Civ. P. 68. R. 70, Stip. of Dismissal; R. 71, 3/29/16 Minute Entry;
DSOF ¶ 8; Pl.’s Resp. to DSOF ¶ 8. Then, Danze again moved to dismiss the
complaint on various grounds. Def.’s Mot. Dismiss; DSOF ¶ 6; Pl.’s Resp. to DSOF
¶ 6. This Court dismissed the negligence, unjust enrichment, and strict liability
products claims as to all Plaintiffs, as well as Donnelly’s implied warranty of
merchantability claim. 6/30/2016 Opinion and Order; DSOF ¶ 6; Pl.’s Resp. to DSOF
¶ 6. The only surviving claims were for breach of express warranty and Donnelly’s
Illinois consumer fraud claim, each of which was subject to position statements filed
by the Plaintiffs to ensure that each party actually relied on Danze’s warranty
representations. 6/30/2016 Opinion and Order at 54. After Plaintiffs were unable to
allege reliance on Danze’s warranty for the individual condo owners, those claims
were dismissed. R. 84, 10/11/16 Minute Entry; DSOF ¶ 9; Pl.’s Resp. to DSOF ¶ 9.
Plaintiffs also voluntarily dismissed Donnelly. R. 85, 11/16/16 Minute Entry; DSOF
¶ 10; Pl.’s Resp. to DSOF ¶ 10. Thus, in November 2016, only Duncan Place’s claim
for breach of express warranty remained in the case.
Because the prior opinion and orders describe the allegations in detail, only
those still relevant are set forth here. Danze advertises and sells its faucets in the
United States through retailers, wholesalers, and the internet. Second Am. Compl.
¶¶ 12, 21. Danze equips each faucet it sells with a written warranty, which says
that “[a]ll parts of the Danze faucet” will be “free from defects in material and
workmanship” for as long as the consumer owns it. R. 89-1, Def.’s Br., Exh. B ¶¶ B,
Before Duncan Place was formed among condo owners in the Duncan Place
Condominium, another corporation, Duncan Place, LLC, acted as the developer of
the building. Pl.’s Resp. Br. at 2. Duncan Place, LLC hired Kimat Duncan Place,
LLC to install the building’s plumbing, including the now-infamous Danze faucets.
Def.’s Br., Exh. F; DSOF ¶ 26; Pl.’s Resp. to DSOF ¶ 26. In July 2008, Kimat
Duncan Place, LLC—acting as a subcontractor—bought 78 Danze faucets from a
retailer, Keller Supply. R. 90-1, Pl.’s Statement of Facts (PSOF) ¶ 31; R. 91-2, Def.’s
Resp. to PSOF ¶ 31; Def.’s Br., Exh. D, Keller Invoices. Keller Supply had
previously purchased those same faucets directly from Danze. PSOF ¶ 32; Def.’s
Resp. to PSOF ¶ 31; Def.’s Br., Exh. B ¶ A. Kimat Duncan Place then installed the
Danze faucets in each unit in Duncan Place. See Def.’s Br., Exh. F; id. Exh. D.
Construction Agreement at 1.
As the individual condominium units were sold, Duncan Place, LLC ceded
control of the condominium association and common areas to Duncan Place. Def.’s
Br., Exh. H at 16-20. Duncan Place was incorporated in April 2009 as a Washington
state non-profit corporation. DSOF ¶ 27; Pl.’s Resp. to DSOF ¶ 27; Def.’s Br., Exh.
G. Duncan Place, LLC contemplated the creation of an association made up of the
condo unit owners, and solidified Duncan Place Owners Association’s role in the
Condominium Declarations signed by each individual purchaser. Def.’s Br., Exh. H.
Duncan Place has incorporated by reference each of Danze’s exhibits into
its own brief and argument. Pl.’s Resp. Br. at 1 n.1. For clarity, the Court will cite to the
exhibits as marked in Danze’s brief, where they originated in the record.
§ 13.1. The declaration sets out the powers of Duncan Place, which include adopting
regulations, contracting with other entities, and regulating the repair and
replacement of common elements of the condominium building. Id. § 13.4. Initially,
Duncan Place, LLC controlled which members would comprise Duncan Place’s
leadership, and provided for a transition period over which Duncan Place LLC
would relinquish its control as more time went by and units were sold, until
eventually Duncan Place’s leadership and members would be wholly controlled by
the condo owners. Id. §§ 14.1-14.2.
With that background in mind, in this lawsuit Duncan Place’s breach of
express warranty claim arises from purported defects in the Danze faucets. Despite
representing that the faucets would be free from defects, Danze faucets potentially
suffer from a defective, steel-braided water supply hose made with an “inferior low
nickel stainless steel alloy,” making each hose “susceptible to stress corrosion
cracking.” Second Am. Compl. ¶¶ 29, 31. As is wont to occur when defective hoses
cannot withstand plumbing needs, some of the Danze faucets installed in Duncan
Place condos corroded and failed, damaging the building, increasing insurance
premiums, requiring the payment of deductible payouts, and causing the need for
replacement faucets. Id. ¶ 47. Now, on its own behalf as the owners association for
Duncan Place Condominiums, Duncan Place seeks relief for Danze’s failure to live
up to its warranty. After the dismissal of the other claims and additional discovery,
Danze now moves for summary judgment, arguing that Duncan Place cannot show
that it was in privity with Danze or that it was an intended third-party beneficiary
of Danze’s warranty. Def.’s Mot. Summ. J. ¶¶ 7-8.
II. Legal Standard
Summary judgment must be granted “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.” Fed. R. Civ. P. 56(a). A genuine issue of material fact exists if “the
evidence is such that a reasonable jury could return a verdict for the nonmoving
party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). In evaluating
summary judgment motions, courts must view the facts and draw reasonable
inferences in the light most favorable to the non-moving party. Scott v. Harris, 550
U.S. 372, 378 (2007). The Court may not weigh conflicting evidence or make
credibility determinations, Omnicare, Inc. v. UnitedHealth Grp., Inc., 629 F.3d 697,
704 (7th Cir. 2011), and must consider only evidence that can “be presented in a
form that would be admissible in evidence.” Fed. R. Civ. P. 56(c)(2). The party
seeking summary judgment has the initial burden of showing that there is no
genuine dispute and that they are entitled to judgment as a matter of law.
Carmichael v. Village of Palatine, 605 F.3d 451, 460 (7th Cir. 2010); see also Celotex
Corp. v. Catrett, 477 U.S. 317, 323 (1986); Wheeler v. Lawson, 539 F.3d 629, 634 (7th
Cir. 2008). If this burden is met, the adverse party must then “set forth specific
facts showing that there is a genuine issue for trial.” Anderson, 477 U.S. at 256.
A. The Text of the Warranty
Under Washington law,4 to establish an express warranty, a seller must
make an “affirmation of fact or promise” that relates to or describes the product at
issue, and that representation must form “the basis of the bargain.” Wash. Rev.
Code Ann. § 62A.2-313 (West 2003); see also Cox v. Lewiston Grain Growers, Inc.,
936 P.2d 1191, 1198 (Wash. App. Ct. 1997). At its core, the claim that Duncan Place
asserts—and its own role in litigating it—depends on the terms of the warranty
itself. Although no particular magic words are necessary to create an express
warranty, Hartman v. Barnes Grain & Feed Co., 284 P. 754, 755-56 (Wash. 1930),
the words used by the seller are determinative as to how it applies. See Fed. Signal
Corp. v. Safety Factors, Inc., 886 P.2d 172, 178 (Wash. 1994). That is because the
“more specific a statement, the more likely it is an affirmation of fact or promise.”
Fed. Signal Corp., 886 P.2d at 178; Cox, 936 P.2d at 1198.
For Danze’s faucets, there is no dispute as to the existence of an express
warranty. The parties have stipulated that there is one. Def.’s Br., Exh. B. Rather,
the dispute centers on who enjoys the benefit of the warranty, and what is the
warranty’s scope. Under a stipulation entered into by the parties, the warranty
reads, “[a]ll parts of the Danze faucet are warranted to the original consumer
purchaser to be free from defects in material and workmanship, for as long as the
consumer purchaser owns it,” id. ¶ C (emphasis added), and that Danze will
explained in the prior opinion, under choice of law principles, Washington law
applies to Duncan Place’s claim for breach of express warranty. 6/30/2016 Opinion and
Order at 23-24. Neither party contests this assessment.
“replace ‘free of charge’, during the warranty period, any part that proves defective
in material and/or workmanship under normal residential application,” id.
Because the warranty says that it protects “the original consumer
purchaser,” the warranty’s text poses an insurmountable problem for Duncan
Place’s claim for coverage. Read in context, “the original consumer purchaser” must
be the first owner of the faucet in a residential setting. ‘First’ because only the
“original” consumer purchaser is covered. Def.’s Br., Exh. B ¶ C. ‘Owner’ because
only a “consumer purchaser” is covered, and the warranty also says that it lasts
only so long as “the consumer purchaser owns” the faucet. Id. (emphasis added).
And ‘residential’ because the warranty only covers the faucet’s usage “under normal
residential application.” Id. This interpretation squares with the affidavit submitted
by the defense, in which Danze’s Vice President of Brand Marketing, Kevin
McJoynt, avers that the “original consumer purchaser” is the “initial residential
purchaser of the individual single family resident/condominium unit” where a
Danze faucet is installed. Def.’s Br., Exh. I ¶ 4. The affidavit, however, is not all
that important, because the plain meaning of the warranty’s terms is what dictates
who is entitled to claim its protection.
In response, Duncan Place argues that if the warranty takes on that
interpretation, then it is “illusory.” Pl.’s Resp. Br. at 8. To Duncan Place’s way of
thinking, the condo owner would never see the warranty, because the builder buys
and installs the faucets. Combine that with the legal proposition that, under
Washington law, the plaintiff invoking the express warranty must at least know
about the warranty at the time of purchase. 6/30/2016 Opinion and Order at 27
(citing Touchet Valley Grain Growers, Inc. v. Opp & Seibold Gen. Constr., Inc., 831
P.2d 724, 731 (Wash. 1992); and Baughn v. Honda Motor Co., Ltd., 727 P.2d 655,
669 (Wash. 1986)). So no one, in Duncan Place’s view, will ever be able to
successfully take advantage of the warranty. There are three problems with this
argument: first, Duncan Place offers no record-evidence support for the factual
premise. It might very well be that some home owners do participate in picking out
fixtures, such as faucets, and would know about the warranty in making those
decisions. Second, it is possible that builders could be considered the agents of home
owners for purposes of knowing about the warranty. In other words, whoever buys
and installs the faucet at the home owner’s direction would be acting as the owner’s
agent, and thus the owner would be deemed to have the requisite knowledge of the
warranty. It is worth emphasizing, however, that Duncan Place has never argued
for this position. See R. 65, Pl.’s Resp. Br. at 11-13 (response to motion to dismiss).
In any event, the third and most important problem with the “illusory” argument is
that the plain meaning of the warranty’s text cannot be stretched to say something
it simply does not. It would be one thing to choose between two competing
interpretations of a word or phrase in the warranty to avoid the result of an illusory
warranty. It is quite another, as Duncan Place in essence proposes, to rewrite the
warranty to cover condominium associations, or even general contractors or
subcontractors. In light of the warranty’s text, there are no words or phrases by
which to arrive at that interpretation.
C. Third-Party Beneficiary
With the text of the warranty foreclosing Duncan Place’s direct path for
coverage, Duncan Place argues that it is a third-party beneficiary of the warranty.
Pl.’s Resp. Br. at 6-7. A third-party beneficiary is a person or entity that, though not
a party to a contract, will receive direct benefits from it. Wolfe v. Morgan, 524 P.2d
927, 930 (Wash. App. Ct. 1974); McDonald Constr. Co. v. Murray, 485 P.2d 626,
627-28 (Wash. App. Ct. 1971). Third-party beneficiaries can sue to enforce a
contract, despite not being a signatory party. But to create that entitlement, the
contracting parties must “intend that the promisor assume a direct obligation to the
intended beneficiary at the time they enter into the contract.” Lonsdale v.
Chesterfield, 662 P.2d 385, 389 (Wash. 1983) (quoting Burke & Thomas, Inc. v. Int’l
Org. of Masters, Mates & Pilots, 600 P.2d 1282, 1285 (Wash. 1979)). The intent
required to create a contract for the benefit of a nonparty is “‘not a desire or purpose
to confer a particular benefit upon him,’ nor a desire to advance his interests, but an
intent that the promisor shall assume a direct obligation to him.” Lonsdale, 662
P.2d at 390 (quoting Vikingstad v. Baggott, 282 P.2d 824, 826 (Wash. 1955)). And
how to know whether a promisor intended to take on a direct obligation? The
contracting parties’ intent is determined through an objective test, by “construing
the terms of the contract as a whole, in light of the circumstances under which it
[was] made” to see whether “performance under the contract would necessarily and
directly benefit [a third party].” Postlewait Const., Inc. v. Great American Ins. Cos.,
720 P.2d 805, 807 (Wash. 1986). So, if the terms of the contract “necessarily require
the promisor to confer a benefit upon a third person” then the parties inherently
“contemplate a benefit” to him. Lonsdale, 662 P.2d at 389 (quoting Vikingstad v.
Baggott, 282 P.2d 824, 825 (Wash. 1955)) (some emphases omitted).
Not only must the promisor intend for the contract to benefit third parties,
the specific person claiming a right to enforce the contract must be an intended
beneficiary, as opposed to a merely “incidental” one. See Postlewait Const., 720 P.2d
at 806-07. “An incidental, indirect, or inconsequential benefit to a third party is
insufficient to demonstrate an intent to create a contract directly obligating the
promisor to perform a duty to a third party.” Warner v. Design & Build Homes, Inc.,
114 P.3d 664, 670 (Wash. App. Ct. 2005). If the contract does not confer a direct
benefit to a nonparty, then the nonparty “acquires no rights under the contract.”
Snohomish Cty. Pub. Util. Dist. No. 1 v. Pacificorp, 745 F. Supp. 1581, 1584 (D. Or.
1990) (applying Washington law). Washington courts have adopted the Restatement
(Second) of Contracts on third-party beneficiaries, which is consistent with that
state’s prior precedent on the subject. See Warner, 114 P.3d at 670. The
Restatement explains that a beneficiary gains a right to a promisor’s performance if
that performance is necessary to “effectuate the intention of the parties” and the
surrounding circumstances show the promisor intends to give the benefit of its
performance to the beneficiary. Restatement (Second) of Contracts § 302 (Am. Law
1. Direct Obligation
For Duncan Place to establish itself as a third-party beneficiary of Danze’s
warranty, it must prove (or, to avoid summary judgment, show that there is a
genuine issue) that Danze intended, when it contracted to sell the faucets, to take
on a direct obligation to Duncan Place under the warranty. But there is no
substantive evidence, testimony, or argument that Danze ever intended that a
consumer-purchaser warranty would benefit nonparties, like a condo association,
that do not own or use the product. The direct obligation that Danze takes on is a
“free of charge” replacement of the faucet during the time the original “consumer
purchaser owns it.” Def.’s Br., Exh. B ¶ C. That is not an obligation to a condo
association like Duncan Place.
Nor is there anything in the contract between Danze and any purchaser that
necessarily requires that Danze confer a benefit to condo associations, homeowners
associations, or the like. Even a nonparty with a more direct claim for benefits does
not qualify for third-party beneficiary status under Washington law. Take, for
example, Snohomish Cty. Pub. Util. Dist. No. 1 v. Pacificorp, in which energy
distributors had entered into an agreement with a conglomerate of municipalities
that planned on generating electricity via nuclear energy. 745 F. Supp. 1581, 158283 (D. Or. 1990) (applying Washington law). The plaintiff, a local utility district,
Washington cites to the Restatement on third-party beneficiaries, this
Court researched other states that also have adopted the Restatement on that subject. But
no cases were directly on all fours with this case.
had hoped to reap lower energy costs and entered into an agreement to buy
electricity from the energy distributors. Id. at 1583. When it appeared that the
energy distributors were going to breach the agreement with the conglomerate—not
with the plaintiff—the local utility district brought suit for the anticipatory breach.
Id. at 1583. The district court held, however, that the utility district was not a
third-party beneficiary to the other agreement, as that agreement did “not name
Snohomish as a beneficiary, nor [was] there any indication from any of the contract
terms or circumstances pleaded that any of the parties intended to give local utility
districts rights or direct benefits under the contracts.” Id. at 1584. The “benefit of
lower rates” from the energy distributors’ “participation” in the agreements did not
make the plaintiff a third-party beneficiary; it was only an incidental one. Id. So too
here. Danze’s replacement of a faucet under the warranty does not “necessarily and
directly” benefit Duncan Place. See Warner, 114 P.3d at 670 (Wash. App. Ct. 2005);
Snohomish, 745 F. Supp. at 1584. The necessary and direct beneficiary of the
warranty is the consumer purchaser who owns and uses the faucet, not Duncan
incidental beneficiary status of Duncan Place is further illustrated in an
example in the Restatement. It describes:
A contracts to erect a building for C. B then contracts with A to supply lumber
needed for the building. C is an incidental beneficiary of B’s promise, and B is an
incidental beneficiary of C’s promise to pay A for the building.
Restatement (Second) of Contracts § 302 cmt. e. (Am. Law Inst. 1981). Here, Duncan Place
is akin to C, and just an incidental beneficiary to Danze’s promise to supply goods for the
construction of the building.
2. The Subcontract
Duncan Place’s final road to claim coverage as a beneficiary of the warranty
requires a multi-step path to coverage: to succeed (1) Kimat Duncan Place, LLC, the
plumbing subcontractor, must be entitled to coverage under the warranty; (2)
Duncan Place, LLC (the developer) must be a third-party beneficiary of the
warranty; and (3) Duncan Place (the condominium association) must be the
successor to all of the rights of Duncan Place, LLC. Pl.’s Resp. Br. at 4; R. 90-1, Pl.’s
Statement of the Facts (PSOF) ¶¶ 39-41. But this path breaks down at each step.
First, as explained above, the warranty only covers the first owner of the faucet in a
residential setting, and not a plumbing subcontractor like Kimat Duncan Place,
Second, even if Kimat Duncan Place, LLC (the plumbing subcontractor)
qualified as a purchaser covered by the warranty, Duncan Place, LLC would not be
a third-party beneficiary of the warranty. If anything, the condo’s residential owner
would be the beneficiary of the installation and of the faucet—not the developer of
the condo project. Duncan Place points to the Construction Agreement between
itself and Kimat to support the contention that Duncan Place, LLC qualifies as the
beneficiary. It is true that, as between Kimat Duncan Place, LLC and Duncan
Place, LLC, those two parties did enter into a Construction Agreement that says
that the work performed by Kimat is for the “direct benefit” of Duncan Place LLC:
Further, Subcontractor specifically agrees and acknowledges that the
performance of the Work shall also be for the direct benefit of the
Construction Manager and of Duncan Place, LLC and its managers, members
and/or any successor owners of the Project (collectively “Owners”).
Subcontractor agrees Construction Manager and Owners are third party
beneficiaries of each and every term and condition contained within this
Agreement and each Addendum and Exhibit thereto (collectively, the
Def.’s Br., Exh. D, Construction Agreement at 1.7 The Construction Agreement sets
forth Kimat’s responsibility to perform the plumbing installation for Duncan Place,
LLC. Id. That contract acknowledges that the “performance of the Work” is for the
direct benefit of Duncan Place, LLC (and its successors). Id. The Construction
Agreement goes on to say that Duncan Place, LLC is a third-party beneficiary of
“each and every term and condition contained within this Agreement.” Id.
But the Construction Agreement is not the proper source of third-party
beneficiary status under the warranty. By pointing to the Construction Agreement,
if anything, Duncan Place is really arguing that Kimat assigned its right to enforce
the warranty to Duncan Place, LLC. But Duncan Place offers no Washington case
law or other authority for the proposition that the express warranty, which limits
the coverage to the original consumer purchaser, can be assigned in that way. In
any event, there is no “term” or “condition” in the Construction Agreement that
refers to the Danze warranty, or even to warranties more broadly. See Def.’s Br.,
Exh. D, Construction Agreement at 1. At best, Duncan Place says that the warranty
is incorporated by reference, because the plumbing proposal included descriptions of
Danze products. Pl.’s Resp. Br. at 4-5; Def.’s Br., Exh. F. But the description—which
consists of a single notation to “Danze Parma D22158 lav faucets”—does not
actually specify that there is a warranty or that a warranty is being conferred on
agreement went into effect on September 12, 2007. Construction Agreement at
Duncan Place, LLC. Def.’s Br., Exh. D, Keller Invoices at 1-2. Nor do the invoices for
the faucets mention the warranties, not even in boilerplate text. Id.
Third and last, even if Kimat Duncan Place, LLC was entitled to invoke the
warranty, and even if in turn Duncan Place, LLC was entitled (through Kimat) to
invoke the warranty, still Duncan Place’s path to coverage would fail because it is
not the “successor owner” of Duncan Place, LLC. Construction Agreement at 1.
According to Duncan Place, the “very documents establishing the successor
relationship” are its certificate of incorporation and the condominium declaration
that all new owners sign upon purchase. Pl.’s Resp. Br. at 4; see Def.’s Br., Exhs. G,
H. But neither document identifies Duncan Place as the “successor owner,” the
term used in the Construction Agreement, of Duncan Place, LLC. For one, the
certificate of incorporation merely shows that the owners association did in fact
create a corporation—not that it succeeds the developer. Id. Exh. G. The
condominium declaration is insufficient too. Yes, the declaration does describe the
formation of an owners association with certain powers and responsibilities. Id.
Exh. H at 16-20. It does not, however, say anything about becoming the “successor
owner” of Duncan Place, LLC. Remember that, in the Construction Agreement
between Kimat and Duncan Place, LLC (to which Duncan Place pins its third-party
beneficiary claims), the “Project” is defined as the entire 63-unit Duncan Place
Condominium project, and the beneficiaries specifically are “any successor owners of
the Project.” Def.’s Br., Exh. D, Construction Agreement at 1 (emphasis added).
Duncan Place offers no evidence that it is the owner of the development project
itself, rather than the nonprofit corporation-association that simply helps
coordinate the owners, as authorized by Washington’s Condominium Act, Wash.
Rev. Code § 64.34; Def.’s Br., Exh. H, Condo Decl., Art. 13 (defining the Duncan
Place Owners Association). So this third link in Duncan Place’s chain of reasoning
For the reasons discussed, Danze’s motion for summary judgment must be
granted. No reasonable jury could find that Duncan Place is covered by the express
warranty. Summary judgment is entered against Duncan Place’s express-warranty
claim. Because that was the sole remaining claim, final judgment shall be entered
in favor of Danze and against Duncan Place.
s/Edmond E. Chang
Honorable Edmond E. Chang
United States District Judge
DATE: November 15, 2017
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