UPU Industries, Inc. v. Total Petrochemicals & Refining USA, Inc.

Filing 70

MEMORANDUM AND ORDER denying 60 Motion for Summary Judgment. Signed by Chief Judge Julie A. Robinson on 5/5/2017. (bw)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS
UPU INDUSTRIES, INC.,
Plaintiff,
Case No. 15-CV-2284-JAR-KGG

v.
TOTAL PETROCHEMICALS & REFINING
USA, INC.,
Defendant.

MEMORANDUM AND ORDER
Plaintiff UPU Industries, Inc. (“UPU”) brings this action against Defendant Total
Petrochemicals & Refining USA, Inc. (“TPRI”), alleging breach of an implied warranty of
fitness for a particular purpose with regards to two lots of polyethylene resin that TPRI delivered
to UPU in February and March 2014. This matter comes before the Court on TPRI’s Motion for
Summary Judgment on Plaintiff’s Claim (Doc. 60). The motion is fully briefed and the Court is
prepared to rule. For the reasons explained more fully below, the Court denies TPRI’s motion
for summary judgment.
I.

SUMMARY JUDGMENT STANDARD
Summary judgment is appropriate if the moving party demonstrates “that there is no

genuine dispute as to any material fact” and that it is “entitled to judgment as a matter of law.”1
In applying this standard, the Court views the evidence and all reasonable inferences therefrom
in the light most favorable to the nonmoving party.2 “There is no genuine [dispute] of material
fact unless the evidence, construed in the light most favorable to the non-moving party, is such

1

Fed. R. Civ. P. 56(a).

2

City of Herriman v. Bell, 590 F.3d 1176, 1181 (10th Cir. 2010).

1

that a reasonable jury could return a verdict for the non-moving party.”3 A fact is “material” if,
under the applicable substantive law, it is “essential to the proper disposition of the claim.”4 A
dispute of fact is “genuine” if “there is sufficient evidence on each side so that a rational trier of
fact could resolve the issue either way.”5
The moving party initially must show the absence of a genuine dispute of material fact
and entitlement to judgment as a matter of law.6 In attempting to meet this standard, a movant
who does not bear the ultimate burden of persuasion at trial need not negate the nonmovant’s
claim; rather, the movant need simply point out to the court a lack of evidence for the nonmovant
on an essential element of the nonmovant’s claim.7
Once the movant has met the initial burden of showing the absence of a genuine dispute
of material fact, the burden shifts to the nonmoving party to “set forth specific facts showing that
there is a genuine issue for trial.”8 The nonmoving party may not simply rest upon its pleadings
to satisfy its burden.9 Rather, the nonmoving party must “set forth specific facts that would be
admissible in evidence in the event of trial from which a rational trier of fact could find for the

3

Bones v. Honeywell Int’l, Inc., 366 F.3d 869, 875 (10th Cir. 2004) (citing Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 248, 255 (1986)).
4

Wright ex rel. Trust Co. of Kan. v. Abbott Labs., Inc., 259 F.3d 1226, 1231–32 (10th Cir. 2001) (citing
Adler v. Wal-Mart Stores, Inc., 144 F.3d 664, 670 (10th Cir. 1998)).
5

Adler, 144 F.3d at 670 (citing Anderson, 477 U.S. at 248).

6

Spaulding v. United Transp. Union, 279 F.3d 901, 904 (10th Cir. 2002), cert. denied 537 U.S. 816 (2002)
(citing Celotex Corp. v. Catrett, 477 U.S. 317, 322–23 (1986)).
7

Adams v. Am. Guar. & Liab. Ins. Co., 233 F.3d 1242, 1246 (10th Cir. 2000) (citing Adler, 144 F.3d at
671); see also Kannady v. City of Kiowa, 590 F.3d 1161, 1169 (10th Cir. 2010).
8

Anderson, 477 U.S. at 256; Celotex, 477 U.S. at 324; Spaulding, 279 F.3d at 904 (citing Matsushita Elec.
Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986)).
9

Anderson, 477 U.S. at 256; accord Eck v. Parke, Davis & Co., 256 F.3d 1013, 1017 (10th Cir. 2001).

2

nonmovant.”10 In setting forward these specific facts, the nonmovant must identify the facts “by
reference to affidavits, deposition transcripts, or specific exhibits incorporated therein.”11
Finally, summary judgment is not a “disfavored procedural shortcut”; on the contrary, it
is an important procedure “designed to secure the just, speedy and inexpensive determination of
every action.”12
II.

UNCONTROVERTED FACTS
The following material facts are uncontroverted, stipulated to for the purposes of

summary judgment, or viewed in the light most favorable to UPU.
TPRI produces a high density polyethylene resin (“HDPE”) identified as HDPE 7195.
UPU produces bale netting using HDPE 7195 by “cutting the HDPE film into slit tape or slitting
it into tapes.” At least some other manufacturers create bale netting by cutting HDPE film into
slit tapes, but there are other processes for making bale netting.
UPU Officers
Todd Whitlock, the Production Superintendent for UPU, is responsible for the blown film
extruders, which are the machines that cut the HDPE film into individual tapes. Plastic resin
extruders like those run by UPU can be attached to various kinds of machines, such as mold
machines, blow mold machines, and casting machines. UPU’s extruders are attached to a blown
film process. Every blown film line is different.
Philip Orr, CEO and President of UPU, was in charge of purchasing HDPE resin for UPU
at all times relevant to this matter. Mr. Orr has been in the “net wrap” business since the 1980s.
Mr. Orr and his father were knowledgeable about running a net wrap manufacturing facility
10

Mitchell v. City of Moore, Okla., 218 F.3d 1190, 1197–98 (10th Cir. 2000) (quoting Adler, 144 F.3d at
670–71); see Kannady, 590 F.3d at 1169.
11

Adler, 144 at 671.

12

Celotex, 477 U.S. at 327 (quoting Fed. R. Civ. P. 1).

3

when they started UPU Limited in the United Kingdom based on their experience as importers,
distributors, and resellers of net wrap in the agricultural field.
Kevin Rodgers is the Plant Manager for UPU.
Contracting for HDPE
When Mr. Orr deals with resin suppliers, he explains generally what he is trying to
achieve and then asks for recommendations as to what grade material they think will work. Mr.
Orr states that he does this because the resin suppliers “don’t provide a specification for me to
even look at or make a half-guess.”13 When purchasing HDPE, Mr. Orr tells resin suppliers that
UPU uses blown film extrusion systems and Karl Mayer knitting machines to make bale netting,
and the weight, extension, and elongation of UPU’s material. Mr. Orr does not believe there is
anything more that the suppliers need to know.
UPU determined that TPRI was the only entity in the United States making the grade of
HDPE that UPU could use. UPU searched other companies’ data sheets and determined that
their grades of HDPE did not have the necessary density and melt flow index—the two factors
that UPU determined commonly indicate its “processability” and the relative weight of the end
product. UPU purchased HDPE from TPRI beginning in 2005 and continuing through 2014.
At least in 2012, TPRI selected lots of HDPE for UPU to use. At some point in time
TPRI changed the name of the resin it supplied to UPU from 7194 to 7195. HDPE 7194 is a
medical grade resin. HDPE 7195 is a textile grade resin that has several different applications.
TPRI has an internal product specification for HDPE 7195, which specifies the gel count for that
resin.

13

Orr Dep. 69:13-24, Ex. B to Pl.’s Resp.

4

TPRI provides a Data Sheet to buyers for its resins, including HDPE 7195. The Data
Sheet for HDPE 7195 states that the product is an extrusion resin and sets forth the resin
properties for HDPE 7195, including the Melt Flow Index, Density, and Melting Point. The
Data Sheet also sets forth the Mechanical Properties, Characteristics, and Applications for HDPE
7195. According to TPRI’s Data Sheet, the Applications for which HDPE 7195 are used are
“Monofilament, Slit Tape, Woven and Knitted Fabrics and Specialty Films.” The Data Sheet also
sets forth the Resin Properties and Mechanical Properties of the resin, including their “Typical
Value,” and advises that the data is “not to be used as a specification, maxima or minima” and
“may deviate from molded and extruded specimens.” The Data Sheet does not contain any
information regarding gel counts or unmelt counts.
Before UPU began using HDPE 7195, UPU reviewed the HDPE Data Sheet. The Data
Sheet for HDPE 7195 either came with the boxes of HDPE when it was delivered for testing, or
when it was purchased and delivered. When looking at a data sheet for a product, Mr. Orr “can
understand it to the point of knowing it will fit [UPU’s] finished product specs or not or if it even
has a chance.”
TPRI assumed that UPU needed resin to make bale-net wrap, that UPU’s process was the
same from one day to the next, that UPU was trying to eliminate variables so it could produce
the same product each time, and that UPU wanted to receive the same product from TPRI to
repeatedly produce the same product. Before sending products to customers, TPRI engaged in
internal QC testing to ensure that the gel count in the material met certain internal product
specifications, which TPRI did not disclose to UPU. As far back as 2008, TPRI told UPU that
TPRI could not determine whether a lot of HDPE would or would not work for UPU until UPU
actually ran the resin.

5

Testing
Before purchasing resin to use in UPU’s manufacturing facility, UPU ran the product
through its own testing process. UPU ran trials on the HDPE resin to ensure that UPU could use
the resin to make its products. UPU conducts a melt-flow index test before accepting shipments
of resin from TPRI to confirm that the shipment conforms to the melt-flow number reported by
TPRI. UPU’s melt-flow index test was a precautionary test to ensure that the polyethylene resin
TPRI supplied was in fact polyethylene resin, and not some other kind of plastic resin. There is
no relationship between melt-flow index and gel count, and UPU did not test whether the resin
was capable of producing gel- or unmelt-free film.
UPU spent about one week testing resin in its manufacturing facility before determining
whether the resin would work in UPU’s production process. Thereafter, the finished products
were tested in the field. UPU received about 5 or 6 tons of HDPE from TPRI to test to see if it
would work for UPU. In testing the HDPE and running it through UPU’s machine, UPU was
able to look at the parameters of the raw material and determine the tensile strength and
elongation of the finished product.
Issues with HDPE Resin
UPU had production problems with gels in the film of the HDPE from 2008 through
2014. The big factor for UPU with a high gel-count problem is the run time, because gels stop
UPU’s manufacturing process. Gels stop the knitting machines. Gels cause the individual tapes
of plastic film to break as they run through the knitting machine. Each time a tape breaks, the
machine must stop for the operator to tie the broken ends of the tape back together and restart the
machine.

6

UPU cannot test for gels and does not know what a normal gel count for TPRI’s resin
would be. The data sheet for HDPE 7195 does not include information about gel count, but
TPRI’s internal specifications for some grades of HDPE do include a gel count specification.
TPRI does not provide gel count information to customers like UPU.
In 2012, TPRI advised UPU that two problem lots of HDPE 7194 sent to UPU were
prime and met all of TPRI’s QC requirements and that TPRI was unable to make any
determination as to lots of HDPE 7194 that would perform well at UPU’s facility and lots that
would not. In 2012, TPRI also told UPU that there was nothing wrong with the lots of HDPE
that TPRI supplied to UPU, even though TPRI cited “differences” it observed at UPU’s factory
in its reports. TPRI was never able to provide UPU with a conclusion as to why some lots of
HDPE 7195 worked well for UPU in its processing system and other lots did not.
In June 2014, TPRI sent employees to UPU’s facility to troubleshoot the issues with
HDPE 7195. During that trip, the TPRI employees had full control over UPU’s extrusion
process, suggesting changes to the process which UPU personnel implemented. With control
over UPU’s extrusion facility, the TPRI employees could not make the HDPE 7195 resin run.
The TPRI employees called one of the lots of HDPE 7195 that it had identified and shipped to
UPU “terrible,” with “bad gels.”
III.

DISCUSSION
UPU alleges that TPRI breached an implied warranty of fitness for a particular purpose

with respect to two lots of HDPE 7195 that the parties contracted for and TPRI furnished to UPU
in February and March 2014. An implied warranty of fitness for a particular purpose exists
“[w]here the seller at the time of contracting has reason to know any particular purpose for which
the goods are required and that the buyer is relying on the seller’s skill or judgment to select or

7

furnish suitable goods.”14 Whether or not an implied warranty of fitness for a particular purpose
arises in any individual case is a question of fact to be determined by the circumstances of the
contracting.15 TPRI argues for summary judgment in its favor because UPU has not presented
evidence that would create a genuine dispute of fact as to whether an implied warranty of fitness
for a particular purpose existed in relation to these two lots of HDPE 7195. Specifically, TPRI
argues that UPU has failed to present any evidence that (1) it intended to use the HDPE 7195 for
a particular—as opposed to ordinary—purpose; and (2) it relied on TPRI’s skill and expertise in
choosing among goods to meet that purpose. The Court addresses each argument in turn.
A.

Particular Purpose

A defining characteristic of the implied warranty of fitness for a particular purpose is that
the goods contracted for are used for a particular, rather than ordinary, purpose.16 The warranty
of fitness for a particular purpose is frequently confused with the implied warranty of
merchantability, which covers fitness for ordinary purposes.17 But “[t]he warranty of fitness for
a particular purpose is narrower, more specific, and more precise.”18 Thus, “[w]hen goods are
acquired for the ordinary purposes for which such goods are generally used, no implied warranty
of fitness for a particular purpose arises. A use for ordinary purposes falls within the concept of
merchantability.”19 The comments to K.S.A. § 84-2-315 provide the following guidance as to
this element of an implied warranty of fitness for a particular purpose:
14

K.S.A. § 84-2-315; Golden v. Den-Mat Corp., 276 P.3d 773, 799 (Kan. Ct. App. 2012); CB Lodging, LLC
v. i3tel, LLC, No. 08-2310-JAR, 2008 WL 4717092, at *3 (D. Kan. Oct. 20, 2008).
15

K.S.A. § 84-2-315, cmt. 1; see CB Lodging, 2008 WL 4717092, at *3.

16

E.g., Smith v. Stewart, 667 P.2d 358, 361–62 (Kan. 1983) (citations omitted).

17

Int’l Petroleum Servs., Inc. v. S & N Well Serv., Inc., 639 P.2d 29, 37 (Kan. 1982).

18

Id.

19

Stover v. Eagle Prod., Inc., 896 F. Supp. 1085, 1091 (D. Kan. 1995) (citing Smith v. Stewart, 667 P.2d
358, 362 (Kan. 1983)) (emphasis in original).

8

A “particular purpose” differs from the ordinary purpose for which the goods are
used in that it envisages a specific use by the buyer which is peculiar to the nature
of his business whereas the ordinary purposes for which goods are used are those
envisaged in the concept of merchantability and go to uses which are customarily
made of the goods in question. For example, shoes are generally used for the
purpose of walking upon ordinary ground, but a seller may know that a particular
pair was selected to be used for climbing mountains.20
Thus, for an implied warranty of fitness for a particular purpose to arise, the goods must
be used for a particular purpose, and the seller must have reason to know of the buyer’s
particular purpose for the goods.21 The buyer, however, “need not bring home to the seller actual
knowledge of the particular purpose for which the goods are intended or of his reliance on the
seller’s skill and judgment, if the circumstances are such that the seller has reason to realize the
purpose intended or that the reliance exists.”22 “Whether the parties engaged in communication
or otherwise created an implied warranty of fitness for a particular purpose in a given transaction
typically presents a jury question.”23
Several examples help illustrate the line between particular and ordinary purposes. In
Stover v. Eagle Products, Inc., Judge Crow granted summary judgment in favor of the defendant
dog food manufacturer because “using dog food to feed dogs is the ordinary purpose of the
product.”24 Similarly, the Kansas Supreme Court in Smith v. Stewart affirmed dismissal of an
implied warranty of fitness claim, where the plaintiff purchased a boat to use “as a pleasure craft
on an inland lake.”25 The court found that “such usage is well within the ordinary purpose of
such goods,” and that the plaintiff had not alleged that his usage of the boat was for a particular

20

K.S.A. § 84-2-315, cmt. 2.

21

Danaher v. Wild Oats Mkts., Inc., No. 08-2293-DJW, 2011 WL 2969314, at *4 (D. Kan. July 20, 2011).

22

K.S.A. § 84-2-315, cmt. 1; Golden v. Den-Mat Corp., 276 P.3d 773, 799 (Kan. Ct. App. 2012).

23

Golden, 276 P.3d at 799.

24

896 F. Supp. 1085, 1091 (D. Kan. 1995).

25

667 P.2d 358, 362 (Kan. 1983).

9

purpose as opposed to an ordinary purpose.26 Additionally, the Kansas Supreme Court in
International Petroleum Services, Inc. v. S & N Well Service, Inc. found that no implied warranty
of fitness for a particular purpose arose because the oil well equipment at issue was used for an
ordinary purpose.27 The court explained, “[i]n our present case the buyer’s intended use of this
equipment in his business was no different than the use of the equipment in any oil well
servicing business. No specific use by the defendant buyer was envisaged which was peculiar to
the nature of his business.”28
By contrast, in Golden v. Den-Mat Corporation, the plaintiff purchased dental veneers
for the purpose of obtaining “strikingly white teeth,” as opposed to “simply some cosmetic
improvement in the appearance of her teeth.”29 On this basis, the Kansas Court of Appeals found
that the plaintiff had presented sufficient evidence of a particular purpose to avoid summary
judgment on her implied warranty of fitness claim.30 Finally, in CB Lodging, LLC v. i3tel, LLC,
the plaintiff alleged that it sought and accepted a proposal for the installation of a voice over
internet protocol system (“VOIP”) that would conform to certain specifications and would be
“capable of interfacing with a uniquely standardized network.” 31 Because the plaintiff alleged
that the defendant had reason to know that the plaintiff required the VOIP system to satisfy
unique specifications, this Court found that the plaintiff had alleged a particular purpose for the
system.32

26

Id.

27

639 P.2d 29, 37 (Kan. 1982).

28

Id.

29

276 P.3d 773, 799 (Kan. Ct. App. 2012).

30

Id.

31

No. 08-2310-JAR, 2008 WL 4717092, at *3 (D. Kan. Oct. 20, 2008).

32

Id.

10

TPRI argues that UPU has presented no evidence of a particular purpose. Specifically,
TPRI asserts that UPU has not presented any evidence as to the circumstances of contracting for
the HDPE 7195 it purchased in February and March 2014. TPRI also argues that the evidence
here demonstrates beyond dispute that Plaintiff used the HDPE 7195 for an ordinary purpose.
TPRI points to uncontroverted evidence that the data sheet for HDPE 7195 referred to “slit tape”
as one of the “Applications” for the resin. TPRI emphasizes that UPU uses HDPE 7195 for
precisely this purpose, that is, making bale netting by slitting tapes of HDPE film. Additionally,
TPRI notes that other manufacturers use the same slit-tape process to make bale netting. UPU
responds that it uses HDPE 7195 to make bale netting through a particular set up of “blown film
extrusion systems and Karl Mayer knitting machines,” and that it creates netting with unique
weight, extension, and elongation characteristics. UPU contends that TPRI knew UPU was
trying to create the same product repeatedly, and that it needed a consistent product to achieve
that purpose.
The evidence is uncontroverted that UPU used HDPE 7195 to make bale netting by
slitting plastic film into tapes, which is one of the “Applications” of HDPE 7195 and a process
that other manufacturers use. Thus, at first blush it appears that UPU unquestionably purchased
HDPE 7195 for an ordinary purpose. But UPU has presented evidence that it was using a
particular set up of blown film extrusion systems, and that every blown film system set up is
different. Additionally, UPU conveyed particular characteristics of its bale netting to TPRI, and
also conveyed that it needed a consistent product to achieve its goals.
Although TPRI contends that UPU has not presented any evidence of the circumstances
of contracting for the HDPE 7195 it purchased in February and March 2014, the record reflects
that UPU conveyed to resin suppliers that it was using the resin to manufacture bale netting with

11

certain characteristics by slitting HDPE film into tapes through a process of using blown film
extrusion systems and Karl Mayer knitting machines. It is reasonable to assume that UPU
conveyed the same manufacturing processes and bale netting characteristics to TPRI during the
course of the parties’ contracting, and that UPU also communicated that it needed a consistent
product to repeatedly manufacture bale netting.33 Given that the parties continuously contracted
for HDPE resin beginning in 2005, it is also reasonable to infer based on these circumstances
that UPU was planning to use the HDPE 7195 it purchased in February and March 2014 to create
bale netting using the same processes and resulting in the same characteristics it previously
conveyed to TPRI, and that TPRI had reason to know of these processes and characteristics at
the time of the 2014 contracts.34
UPU’s evidence demonstrates that although it used HDPE 7195 to create bale netting by
slitting tapes, in accordance with one of the “Applications” described on the product’s Data
Sheet, UPU used a particular set up of its machines, created bale netting with characteristics that
were unique to its manufacturing process, and conveyed to TPRI that it needed a consistent grade
of resin. Thus, the summary judgment record reflects that UPU’s purpose in using HDPE 7195
to make slit-tape bale netting was generally ordinary, but that the ultimate product and process
were particular to its use. Unlike the buyer in International Petroleum, UPU has presented

33

Indeed, TPRI cites to testimony of Mr. Orr explaining that UPU tells resin suppliers it uses blown film
extrusion systems and Karl Mayer knitting machines, and also tells suppliers the weight, extension, and elongation
of the bale netting. TPRI cites to this testimony to establish the purpose UPU conveyed to TPRI in the course of
purchasing the HDPE in 2014. See Doc. 69 at 19–20.
34

See id.; see also CB Lodging, LLC v. i3tel, LLC, No. 08-2310-JAR, 2008 WL 4717092, at *3 (D. Kan.
Oct. 20, 2008) (explaining that circumstances alleged demonstrated that “at the time of contracting, [the seller] had
reason to know” of the buyer’s particular purpose in purchasing the goods).

12

evidence that its use of HDPE 7195 was different in at least some ways from other manufacturers
of bale netting.35
On the record before it, the Court is unable to determine whether these differences are
material for purposes of whether HDPE 7195 was used for its ordinary purpose in this instance.36
Drawing all reasonable inferences in favor of UPU, it is entirely foreseeable that the differences
in UPU’s manufacturing processes and the variances in its ultimate product from those of other
manufacturers meant that UPU was using HDPE 7195 in a particular, non-ordinary way.
Accordingly, the Court finds that a genuine dispute of fact exists as to whether UPU used HDPE
7195 for a particular purpose.
B.

Reliance on Seller’s Skill or Judgment to Select Goods

TPRI also argues that UPU has failed to present evidence that it relied on TPRI’s skill or
expertise to select a particular grade of resin. For a warranty of fitness for a particular purpose to
arise out of a transaction, the buyer must rely on the seller’s expertise in furnishing goods
suitable for the buyer’s purpose, and the seller must have reason to know of the buyer’s
reliance.37 To satisfy this requirement, the buyer most show that it actually relied on the seller’s

35

Int’l Petroleum Servs., Inc. v. S & N Well Serv., Inc. 639 P.2d 29, 37 (Kan. 1982) (finding that buyer’s
intended use of the purchased item “was no different than the use of the equipment in any oil well servicing
business. No specific use by the defendant buyer was envisaged which was peculiar to the nature of his business”);
see Golden v. Den-Mat Corp., 276 P.3d 773, 799 (Kan. Ct. App. 2012) (explaining that an implied warranty of
fitness for a particular purpose is “based on a tailored use of the specific goods known to the seller rather than on an
ordinary characteristic or suitability common to goods of that general type”).
36

This case involves a more nuanced determination of purpose than that at issue in the case of a consumer
purchasing a shoe, dog food, or even a boat. See K.S.A. § 84-2-315, cmt. 2; Stover v. Eagle Prods., Inc., 896 F.
Supp. 1085, 1091 (D. Kan. 1995); Smith v. Stewart, 667 P.2d 358, 362 (Kan. 1983). At issue here is a particular
grade of plastic resin that has several applications and was supplied for the purpose of manufacturing a product with
particular characteristics through a series of processes.
37

K.S.A. § 84-2-315; Danaher v. Wild Oats Markets, Inc., No. 08-2293-DJW, 2011 WL 2969314, at *4 (D.
Kan. July 20, 2011) (quoting Lohmann & Rauscher, Inc. v. YKK (U.S.A.) Inc., 477 F. Supp. 2d 1147, 1155 (D. Kan.
2007)).

13

input.38 But as with the buyer’s communication of its particular purpose, the buyer “need not
bring home” or emphasize to the seller the reliance on the seller’s skill in choosing among goods
to meet that purpose, so long as the seller “reasonably should understand the buyer’s special use
and reliance.”39 Whether or not these requirements are met are “basically [questions] of fact to
be determined by the circumstances of the contracting.”40 Thus, the determination of whether
the reliance requirements are met is typically a question for a jury.41
TPRI argues that UPU has not come forward with evidence that it relied on TPRI’s skill
or expertise in selecting a grade of resin, or that TPRI had reason to know of such reliance.
TPRI again argues that UPU has not presented evidence of the “circumstances of contracting”
for the HDPE 7195 it purchased in 2014. Further, TPRI contends that the record demonstrates
UPU did not rely on TPRI’s judgment. TPRI emphasizes that it told UPU throughout the
parties’ contracting relationship that TPRI could not determine whether a given lot of HDPE
would work well until UPU actually used the resin, and that TPRI was never able to provide a
conclusion as to why some lots of HDPE 7195 worked well for UPU and others did not. TPRI
also asserts that the record reflects a lack of reliance in this case based on evidence that UPU
tested each lot of HDPE 7195 before it accepted the lots, that Mr. Orr could look at HDPE Data
Sheets and understand them “to the point of knowing whether [the HDPE would fit UPU’s]
finished product specs,” and that UPU selected TPRI from among several HDPE suppliers based
on UPU’s assessment of two “processability” factors.

38

K.S.A. § 84-2-315, cmt. 1; Golden, 276 P.3d at 799 (citing Circle Land & Cattle Corp. v. Amoco Oil Co.,
657 P.2d 532 (Kan. 1983)).
39

K.S.A. § 84-2-315, cmt. 1; Golden, 276 P.3d at 799 (citing Circle Land, 657 P.2d at 532).

40

K.S.A. § 84-2-315, cmt. 1.

41

See Golden, 276 P.3d at 799 (“As we have noted, whether the parties engaged in communication or
otherwise created an implied warranty of fitness for a particular purpose in a given transaction typically presents a
jury question.”).

14

UPU responds that although it could use the Data Sheet to determine whether the HDPE
would meet the density and melt-flow characteristics it needed to produce its bale netting, it
could not determine what grade of HDPE had an optimal gel count for its manufacturing process.
UPU points to evidence that it was unaware of the gel count information for HDPE 7195, and
that only TPRI had access to this information through its internal product specification. UPU
also highlights Mr. Orr’s testimony that because resin suppliers did not provide these
specifications in their data sheets, he would ask for recommendations as to the grade of material
that they believed would work. Additionally, UPU asserts that it provided information regarding
its manufacturing processes and the characteristics of the bale netting it produced, and that TPRI
selected Lots of HDPE for its use.
As an initial matter, the Court is not persuaded that the record lacks evidence regarding
the “circumstances of contracting” for the HDPE 7195 UPU purchased in 2014. UPU has
presented evidence regarding its communications with TPRI and problems with gels in the
HDPE film throughout UPU and TPRI’s contracting relationship. The parties’ communications
throughout the course of their relationship bear heavily on the circumstances under which the
parties executed the contracts for the shipments of HDPE in February and March 2014, as well
as whether TPRI had reason to know of any reliance on UPU’s part.42
The Court finds that genuine issues of fact remain as to whether UPU relied on TPRI’s
skill and expertise to select grades of HDPE for its use. The record plainly reflects that UPU
could determine whether the density or melt-flow characteristics would meet its production
specifications by looking at a data sheet for a particular lot of HDPE. Indeed, UPU concedes
that it engaged in testing to ensure that the HDPE 7195 would work in its production process

42

See supra Part III.A. at 11–12.

15

before it accepted batches of resin from TPRI. TPRI asserts that these facts show it was UPU—
not TPRI—that had the expertise and skill to determine whether the HDPE would work in its
manufacturing process. The Court recognizes that if density and melt-flow index were the only
variables that affected the selection of the grade of HDPE supplied to UPU, that would be the
end of the story. UPU clearly had the information, means, and expertise to ensure that the grade
of HDPE it received complied with its production requirements with regard to these two
variables. In fact, UPU determined HDPE suppliers other than TPRI could not meet its
requirements as to density and melt-flow index, and Mr. Orr testified that these two factors
commonly indicate HDPE “processability.”
But the Court cannot ignore UPU’s evidence as to a third factor—gel count—that UPU
asserts was determinative of the grade of HDPE it received from TPRI. The record is clear that
only TPRI knew the gel count specification for a given lot of HDPE, and that only TPRI could
test the HDPE to ensure that it met this specification. Thus, if gel count was a factor in
determining which grade of HDPE UPU received, it follows that UPU would have to rely on
TPRI to supply a resin with an appropriate gel count. UPU has presented evidence that TPRI
knew that it was attempting to “eliminate variables” and wanted to produce a consistent product,
that TPRI tested HDPE to determine whether it met gel count specifications before sending the
resin to UPU, that UPU generally asked resin suppliers for recommendations on the grade of
resin because suppliers did not provide “specifications,” and that gel count issues were a factor in
the “run time” of UPU’s manufacturing process. This evidence suggests that although density
and melt-flow index were typically the factors that UPU used to determine the “processability”

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of HDPE, gel count was also an important factor. 43 Additionally, UPU has presented evidence
that TPRI selected which Lots of HDPE to send to UPU at least in 2012.
Drawing all inferences in favor of UPU as the nonmovant, this evidence suggests that gel
count may have been a factor in determining which grades of HDPE UPU received, and that
TPRI selected which grades of HDPE to send to UPU. Although TPRI has presented evidence
that UPU selected TPRI as a resin supplier based on density and melt-flow factors, TPRI has not
presented evidence that UPU selected the specific grade of HDPE it received. In the absence of
evidence regarding who chose to send HDPE 7195 to UPU in February and March 2014, a
reasonable inference can be drawn from the evidence summarized above that TPRI selected the
grade of resin to send to UPU, in part based on the gel count.
TPRI emphasizes two further points throughout its briefings. First, TPRI points to the
fact that it could not determine what grade of HDPE resin would work for UPU before UPU
tested it, and that UPU was aware of this fact.44 It may be that TPRI could not determine what
grade of HDPE would work for UPU until UPU tested the resin. But TPRI was undoubtedly in a
better position to choose from various grades of HDPE based on the gel count factor, even if
TPRI could not determine whether that grade of resin would work for UPU until UPU tested it.
Stated differently, it is possible that neither party was in a position to determine whether the
chosen grade of HDPE would work well for UPU until UPU ran the resin, but that TPRI was in a
better position to select a grade of HDPE with an optimal gel count and UPU relied on TPRI to
do so. UPU has presented sufficient evidence to support this inference.
43

See Fiberglass Component Prod., Inc. v. Reichhold Chems., Inc., 983 F. Supp. 948, 957 (D. Colo. 1997)
(denying summary judgment where buyer was an expert in application and use of resins at issue in buyer’s
production of fiberglass component parts, but where “the expertise in question concerns the low smoke and
flammability characteristics of resins, not the application or use of these resins in fiberglass component production.
The exhibits before me reveal that [the seller] is an expert in low smoke resins.”).
44

Doc. 61 at 2–3, 15–16; Doc. 69 at 2, 18, 25–26.

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Second, TPRI contends that the gel count issue is not material because “information
known to TPRI and unknown to UPU is immaterial and has no relevance to . . . whether UPU
relied on TPRI to select resin for UPU’s use.”45 The fact that the gel count specification was
unknown to UPU does not mean that UPU did not rely on TPRI to select a grade of resin with an
optimal gel count specification. UPU has presented evidence that it told TPRI that it wanted to
“eliminate variables” and that it asked resin suppliers for recommendations because UPU did not
receive “specifications” from these suppliers. This suggests that UPU understood that the gel
count specification was a factor in which grade of HDPE resin to select, but that it did not
receive these specifications from resin suppliers. It would make sense that UPU would rely on
TPRI to select a grade of HDPE with an ideal gel count specification even though UPU did not
know the specific gel count properties of the HDPE with which it was presented. Indeed, it
seems that reliance on a seller is especially appropriate where a buyer knows that a given
variable is a factor that plays into a choice from among several products, but where the seller has
superior knowledge or expertise as to the specific properties of the variable.46 Here, there is
sufficient evidence to create a genuine dispute of fact as to whether UPU knew that the gel count
specification was an important factor but relied on TPRI to select a grade of HDPE with an
optimal gel count, or whether UPU simply did not consider gel count relevant and therefore did
not rely on TPRI to choose a resin with a gel count that would work.
In sum, the record demonstrates that whether UPU relied on TPRI’s skill and judgment to
select a grade of HDPE with an optimal gel count, and whether TPRI had reason to know of this
45

Doc. 69 at 9–13, 22, 28.

46

See Fiberglass Component Prod., Inc., 983 F. Supp. at 957 (holding that genuine dispute of fact existed
as to buyer’s reliance on resin supplier, where evidence existed of supplier’s expertise and superior knowledge
regarding low smoke and flammability characteristics of resins); 67A Am. Jur. 2d Sales § 685 (“Because reliance on
the seller’s skill and judgment is an essential predicate for the implication of the warranty of fitness for a particular
purpose, the seller must have skill and knowledge. Thus, the comparative knowledge of the parties is significant in
determining the existence of reliance.”).

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reliance, are open questions. Certainly, UPU was capable of testing the HDPE to determine
whether the density and melt-flow index factors met its requirements. But only TPRI knew the
gel count specification for each batch of resin, and UPU was unable to test for this factor or to
determine what gel count specification would be acceptable for its purposes. TPRI has presented
evidence suggesting that UPU did not consider gel count as a factor in considering which grade
of HDPE to purchase. By contrast, UPU has presented evidence suggesting that it knew gel
count was an important factor in choosing a grade of HDPE and in the efficiency of its
manufacturing process, and that it sought recommendations from resin suppliers because it did
not have gel count information. This opposing evidence creates genuine disputes of material
facts as to whether UPU relied on TPRI to select a grade of HDPE, and whether TPRI had
knowledge of such reliance. This factual dispute should be submitted to a jury.
IV.

CONCLUSION
Although UPU used HDPE 7195 for one of its listed “Applications,” the record reflects a

factual dispute as to whether the differences between UPU’s manufacturing processes and
characteristics in the resulting bale netting and other manufacturers constituted a particular
purpose. Additionally, UPU has come forward with sufficient evidence to create a factual
dispute as to whether UPU, although it was capable of testing HDPE for density and melt-flow
index, relied on TPRI to supply a grade of HDPE with an optimal gel count specification.
Because genuine disputes of fact exist as to these two material elements of UPU’s claim, the
Court denies TPRI’s motion for summary judgment.
IT IS THEREFORE ORDERED BY THE COURT that Defendant Total
Petrochemicals & Refining USA, Inc.’s Motion for Summary Judgment on Plaintiff’s Claim
(Doc. 60) is denied.

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IT IS SO ORDERED.
Dated: May 5, 2017
S/ Julie A. Robinson
JULIE A. ROBINSON
UNITED STATES DISTRICT JUDGE

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