Evans et al v. Daikin North America LLC et al
Filing
95
Judge Richard G. Stearns: ORDER entered granting in part and denying in part 60 Motion for Summary Judgment; granting 69 Motion for Summary Judgment Daikin AA and Daikin NA's motions for summary judgment on all counts are ALLOWED. DACA Trust's motion for summary judgment is ALLOWED in part with respect to Count I claims of breach of express warranty and breach of implied warranty of fitness for a particular purpose, but is otherwise DENIED. The Clerk will enter judgmen t for Daikin AA and Daikin NA on all claims, and set the remainder of the case for trial to a jury. It is the court's intention to consolidate this case with Egans v. Daikin North America, LLC et al. (17-11630), given the high de gree of similarity of claims and parties. Each party is directed to file, by February 11, 2019, an estimate of the amount of time that they will require to try the case, inclusive of the party's own cross-examination and re-direct, exclusive of opening and closing arguments and jury voir dire. The parties should bear in mind that the court schedules trials to run from 9 a.m. to 1 p.m. each day. (RGS, law1)
UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS
CIVIL ACTION NO. 17-10108-RGS
BRUCE EVANS and BRIDGITT EVANS
v.
DAIKIN NORTH AMERICA, LLC, DAIKIN APPLIED AMERICAS, INC.,
and DACA DELAWARE DISSOLUTION TRUST as Successor-In-Interest to
DAIKIN AC (AMERICAS) INC.
MEMORANDUM AND ORDER ON DEFENDANTS’
MOTION FOR SUMMARY JUDGMENT
February 4, 2019
STEARNS, D.J.
Bruce and Bridgitt Evans brought this lawsuit in Suffolk Superior
Court against Daikin North America, LLC (Daikin NA), and Daikin Applied
Americas, Inc. (Daikin AA), for damages caused by an allegedly defective
HVAC system.1 Defendants subsequently removed the case to the federal
district court on diversity grounds.2 The Amended Complaint sets out three
In their Amended Complaint, the Evans added DACA Delaware
Dissolution Trust (DACA Trust) as a defendant.
1
The Evans are residents of Massachusetts. Daikin AA is a Delaware
corporation with a principal place of business in Minnesota. Daikin NA is a
Delaware LLC with a principal place of business in Texas. Its sole member
is a Delaware corporation with a principal place of business in Texas. Not.
of Rem. (Dkt # 1 ) ¶¶ 10-13. DACA Trust is a statutory trust organized under
2
claims: breach of express and implied warranties (Count I); negligent
misrepresentation (Count II); and intentional misrepresentation (Count III).
Defendants now move for summary judgment on all counts.3 For the reasons
to be explained, Daikin AA and Daikin NA’s motions for summary judgment
will be allowed, while DACA Trust’s motion will be denied, except for the
Count I claims of breach of express warranty and breach of implied warranty
of fitness for a particular purpose, which will be allowed.
BACKGROUND
The facts, viewed in the light most favorable to the Evans as the
nonmoving party, are as follows. In 2008, the Evans began renovating their
home at 7 Commonwealth Avenue in Boston, Massachusetts. In 2009, as
part of the renovation, the Evans purchased a Daikin VRV III heating and
cooling system, which included twenty-one indoor fan coil units (FCUs) and
two compressors.4 The coils are composed of copper coils, aluminum fins,
Delaware law “to preserve and administer the rights and assets of Daikin AC
(Americas) Inc. [(DACA)] and DACA Trust.” Answer (Dkt # 23) ¶ 4.
DACA Trust and Daikin NA filed jointly, while Daikin AA filed
separately and later joined their motion. See Joinder (Dkt # 81).
3
The Evans purchased the system from Stebbins-Duffy, Inc. Daikin AA
Stmt of Facts (ASOF) (Dkt # 70-1) ¶ 22.
2
4
and galvanized header plates.5 A non-conductive Styrofoam drain pan sits
beneath to collect water that drips from the coils.
The Evans hired Allied Consulting Engineering Services, Inc., as their
HVAC engineer. Allied coordinated with the Evans’ architect, Dell Mitchell
Architects, to engineer and design the HVAC system. With assistance from
the general contractor, M.F. Reynolds, Inc., the subcontractor, North
Mechanical Services, Inc., installed the system.
In 2015, the Evans began experiencing problems with the HVAC coils.
They bought replacement coils from Daikin NA and replacement
components from Daikin AA, after its technicians inspected the system.
They also hired New England Cooling Towers (NECT) to install shutoff
valves, which allowed them to isolate individual coil failures without
affecting the entire system.
On December 21, 2016, the Evans initiated this lawsuit. They allege
that the HVAC system was defectively designed because the coils were
susceptible to premature corrosion.6
Daikin Industries, Ltd., a non-party to this case, manufactured the
coils. DACA, succeeded in interest by DACA Trust, provided a one-year
warranty for the coils.
5
That is the conclusion of their proffered expert, Dr. Thomas Eagar,
who is a Professor of Materials Engineering and Engineering Management
at the Massachusetts Institute of Technology (MIT), where he received his
3
6
DISCUSSION
Summary judgment is appropriate when, based upon the pleadings,
affidavits, and depositions, “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). “To succeed, the moving party must show that there is an absence
of evidence to support the nonmoving party’s position.” Rogers v. Fair, 902
F.2d 140, 143 (1st Cir. 1990). “‘[T]he mere existence of a scintilla of evidence’
is insufficient to defeat a properly supported motion for summary
judgment.” Torres v. E.I. Dupont De Nemours & Co., 219 F.3d 13, 18 (1st
Cir. 2000), quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252
(1986).
Piercing the Corporate Veil
As a preliminary matter, the Evans contend that all three defendants
are liable for claims stemming from the sale of their HVAC system. While
DACA Trust concedes that it provided a one-year warranty on the HVAC
coils, Daikin AA and Daikin NA dispute their role in the sale. The Evans
maintain that Daikin AA can be held liable for the sale because it “directed”
Stebbin-Duffy’s sale of the system. Opp’n (Dkt # 87) at 1. Specifically, it
bachelor’s and doctorate of science degrees in Metallurgy and has taught for
over forty years. Daikin NA and DACA Stmt of Facts (NSOF) (Dkt # 73), Ex.
U at 1.
4
“employed Stebbins-Duffy as a manufacturer’s representative; distributed
components of the VRV III system to Stebbins-Duffy for sale to the plaintiffs;
and compensated Stebbins-Duffy based on its sale of the VRV III system.”
Id. at 6.
However, as Daikin AA points out, it did not manufacture,
distribute, or sell the Evans’ HVAC system. Further, Stebbins-Duffy had
contracted with F.W. Webb Company to supply Daikin products.7 Daikin
NA, for its part, did not exist until 2013, four years after the Evans purchased
their HVAC system. NSOF (Dkt # 62) ¶¶ 17, 22.
The Evans counter that they are entitled to pierce the corporate veil
and treat the Daikin defendants “as one, intermingled corporation” because,
among other things, Michael Hastings, a Field Support Manager at Daikin
NA, testified that DACA is not a corporation separate from Daikin NA, that
DACA and Daikin NA have the same website, and that Daikin AA is a
representative of Daikin NA.8 Opp’n (Dkt # 72) at 17-20. They rely on Brown
Daikin AA also asserts that it, like Daikin NA, was not incorporated
until 2013, four years after the Evans purchased their HVAC system. ASOF
(Dkt # 70-1) ¶ 34. The Evans, however, seek to strike Daniel Donoghue’s
affidavit supporting that proposition under Fed. R. Civ. P. 37 because Daikin
NA “failed to disclose [his] testimony during discovery.” Opp’n (Dkt # 87) at
13. Daikin AA responds that this request “is unsupported and not properly
before the court.” Reply (Dkt # 93) at 9. The court need not rely on this
affidavit, so it does not reach this issue.
7
Defendants objected to deposition questions regarding their
relationship to one another. Counsel for the Evans acknowledged at the
5
8
v. Daikin Am. Inc., 756 F.3d 219 (2d Cir. 2014), where the court made note
of the intermingling of Daikin corporations. Opp’n (Dkt # 72) at 18. They
also cite Daikin AA’s joinder motion as evidence of the “blurred distinction”
among defendants. Opp’n (Dkt # 87) at 11.
A basic tenet of corporation common law is that corporations are
separate and distinct entities, whatever the relationships that may exist
between or among them. Scott v. NG U.S. 1, Inc., 450 Mass. 760, 766 (2008).
Massachusetts is especially strict in respecting the corporate form. Birbara
v. Locke, 99 F.3d 1233, 1238 (1st Cir. 1996). Under Massachusetts law, “[a]
veil may be pierced [only] where the parent exercises ‘some form of pervasive
control’ of the activities of the subsidiary ‘and there is some fraudulent or
injurious consequence of the intercorporate relationship.’” Scott, 450 Mass.
at 767, quoting My Bread Baking Co. v. Cumberland Farms, Inc., 353 Mass.
614, 619 (1968).
Here, even accepting Hastings’ testimony in its entirety, there is
insufficient evidence to overcome the reluctance of the Massachusetts courts
outset of Hastings’ deposition that “[t]o the extent he cannot answer them . . .
we have agreed to subsequently handle [them] by written interrogatory.”
NSOF (Dkt # 86), Ex. 4 at 219:9-12. Defendants argue that the Evans cannot
now rely on his testimony because they never submitted the interrogatories.
Reply (Dkt # 85) at 10. The court need not reach this issue for the reasons
that follow.
6
to authorize a piercing of the corporate form. See Spaneas v. Travelers
Indemnity Co., 423 Mass. 352, 354 (1996) (“Only in rare instances, in order
to prevent gross inequity, will a Massachusetts court look beyond the
corporate form.”). Although the Evans accurately list the twelve factors that
Massachusetts courts consider when evaluating an attempt to pierce the
corporate veil, see Opp’n (Dkt # 72) at 17-18; see also Pepsi-Cola Metro.
Bottling Co. v. Checkers, Inc., 754 F.2d 10, 14-16 (1st Cir. 1985) (describing
the twelve factors), they do not apply them to the facts here. Instead, they
reaffirm their reliance on the Second Circuit’s decision in Brown, where the
court held that the plaintiff’s employment discrimination claim sufficiently
alleged that Daikin America, Inc., and Daikin Industries, Ltd., were his joint
employer because they “conducted interrelated operations, had common
ownership, and were subject to centralized control of labor relations.” 756
F.3d at 228. But the Evans’ reliance is misplaced. Brown necessarily applied
New York and not Massachusetts law; involved two different Daikin entities
that were in a parent-subsidiary relationship (not the constellation of three
subsidiaries here); and applied the “single-employer test” under Title VII,
and not a veil-piercing test similar to the one adopted in Massachusetts. Id.
at 226-227.
In short, the Evans have been unable to produce enough
evidence to pierce the corporate veil. Therefore, before proceeding to the
7
merits of each claim, the court concludes that only DACA Trust, as trustee
for DACA, can be held liable for alleged warranties and representations
relating to the sale of the HVAC system.9 See NSOF (Dkt # 62), Ex. A ¶ 12
(“DACA is the only entity to provide a warranty to Plaintiffs.”).
Breach of Express Warranty
An express warranty may be created by “[a]ny affirmation of fact or
promise made by the seller to the buyer which relates to the goods and
becomes part of the basis of the bargain.” Mass. Gen. Laws ch. 106, § 2313(1)(a). The Evans allege that defendants breached a number of express
warranties, including that the HVAC system could “be installed practically
anywhere,” could “perform flawlessly in any climate,” and came with “one of
the best warranties in the business.” NSOF (Dkt # 73) ¶¶ 68-69, 76. But
DACA Trust, for its part, is not liable for any express warranty claim because
the warranty on the coils was for one year and it had long expired (the Evans
While the Evans aver that Daikin AA “directed Stebbins-Duffy to
provide plaintiffs’ contractors with brochures containing material
misrepresentations and express warranties,” Opp’n (Dkt # 87) at 7, the
relevant two brochures in the record are labeled as “Daikin AC,” supporting
the reasonable inference that DACA, not Daikin AA, produced them. See
ASOF (Dkt. # 88), Ex. R.
9
8
do not allege any problems with their 2009 HVAC system prior to 2015).10
See Cook v. Cullen, 2007 WL 4946161, at *4 (Mass. Super. 2007) (finding
that a plaintiff’s breach of express warranty claim “was barred by the oneyear restriction stated in the warranty”); Boston Helicopter Charter, Inc. v.
Agusta Aviation Corp., 767 F. Supp. 363, 371 (D. Mass. 1991) (“Having
determined that the warranty had already expired at the time of the crash, it
is clear that plaintiff’s claims based on express warranty are barred absent
evidence that the one year durational limitation was inapplicable.”).
Breach of Implied Warranty of Merchantability
A seller breaches its warranty obligations when a product that is
“defective and unreasonably dangerous” for the “ordinary purposes” for
which it is intended causes injury. Haglund v. Philip Morris, Inc., 446 Mass.
741, 746 (2006) (citations omitted). Under Mass. Gen. Laws ch. 106, § 2314, a plaintiff bears the burden of proving “a defect in the product or an
unreasonably dangerous condition which existed at the time the product left
the [manufacturer’s] control.” Enrich v. Windmere Corp., 416 Mass. 83, 89
(1993). “Warranty liability may be premised either on the failure to warn . . .
Having so concluded, the court need not reach DACA Trust’s
alternative argument that it is not liable because the express warranty
excluded coverage for “corrosive environments.” Mem. (Dkt # 61) at 9.
9
10
or, as here, on defective design.” Haglund, 446 Mass. at 747 (citation
omitted).
In evaluating the adequacy of a product’s design, the fact-finder is to
consider “‘the gravity of the danger posed by the challenged design, the
likelihood that such danger would occur, the mechanical feasibility of a safer
alternative design, the financial cost of an improved design, and the adverse
consequences to the product and to the consumer that would result from an
alternative design.’” Back v. Wickes Corp., 375 Mass. 633, 642 (1978),
quoting Barker v. Lull Eng’g Co., 20 Cal. 3d 413, 431 (1978). “An essential
element of such a design flaw claim is that there be a safer alternative
design.” Gillespie v. Sears, Roebuck & Co., 386 F.3d 21, 26 (1st Cir. 2004).
“[T]here is a case for the jury if the plaintiff can show an available design
modification which would reduce the risk without undue cost or interference
with the performance of the machinery.” Uloth v. City Tank Corp., 376 Mass.
874, 881 (1978).
Here, the Evans allege that defendants breached the warranty of
merchantability by selling a defectively designed HVAC system and
replacement coils. In his report, Dr. Eagar opines that “[t]he cause of the
corrosion failure is the unit design and manufacturing introducing dissimilar
metals into a continually wet environment.” NSOF (Dkt # 73), Ex. U at 14.
10
He contends that the installation of a pump “to periodically empty the catch
basin” in the Styrofoam drain pan was inadequate because “the pump cannot
drain the basin dry and some moisture is always present during the air
conditioning season,” which, in turn, creates “an ideal environment for
accelerated corrosive attack.” Id. at 13.
Defendants counter that HVAC systems function by definition in a
“continually wet environment.” They instead identify improper installation
as the actual cause of the premature corrosion. They rely on the report of
their expert, Engineering Systems, Inc. (ESI), and its conclusion that “the
few failures detected within the FCUs . . . resulted from environmental
exposure and not from Daikin’s design and manufacturing.”11 NSOF (Dkt #
62), Ex. J at 48. Proper installation requires insulation and ductwork,
including both supply and return ducts.12 However, Allied and Dell Mitchell
Defendants also note that Evans’ original expert, Altran, reached the
same conclusion that “[t]he root cause of failure for these fan-cooled units is
likely environmental, not process-related.” NSOF (Dkt # 62) ¶ 48. Altran
opined that while “[t]he analysis did not reveal any manufacturing defects or
deficiencies,” “localized damage . . . may indicate a combination of conditions
in this area such as environment and operating conditions led to the
failures.” Id. Defendants, in turn, argue that this report should be binding
on the Evans because Altran conducted “destructive testing,” which allegedly
led to “substantial spoliation of key evidence.” Opp’n (Dkt # 61) at 5. The
court disagrees that this report is binding.
11
The supply duct blows air into the room from the FCU, while the
return duct returns air from the room to the FCU.
11
12
did not design, nor did North Mechanical Services install, return ducts in
several areas of the property. Without return ducts, return flows are pulled
through open spaces between the floors and ceilings. Id., Ex. G at 30:1-31:24.
The coils are thereby subjected to corrosive agents, including sulfur from the
drywall and other “contaminants from construction materials.” Id., Ex. J at
3.13 Defendants also point out that two FCUs in the Evans’ kitchen were
improperly stacked on top of each other, NSOF (Dkt # 62), Ex. V, that the
HVAC system worked for the first six years, and that the “replacement rate
of the coils in question is vanishingly low,” Reply (Dkt # 85) at 1. See Miller
v. J & Q Auto., Inc., 2010 Mass. App. Div. 41 (Dist. Ct. 2010) (“A breach of
the implied warranty of merchantability requires proof that the vehicle was
defective at the time of sale, and the mere later appearance of a defect is not
such proof.”).
The Evans also rely on Dr. Eagar’s opinion in offering an alternative
feasible design for the HVAC system. Dr. Eagar states that “[b]etter draining
design would have greatly extended the life of these units.” NSOF (Dkt # 73),
Ex. U at 14. He contends that had defendants used a metal drain pan similar
to one Mitsubishi uses in its units, instead of one made of Styrofoam, the
Dr. Eagar, however, asserts that “[t]here is no scientific basis for the
statement made by Daikin that drywall will cause pitting of copper.” NSOF
(Dkt # 73), Ex. W ¶ 12.
12
13
HVAC system would have been “much more effective in allowing the
corrosion electrons to exit the unit without causing further damage.” Id., Ex.
W ¶ 9.14 Defendants, for their part, point out that a vast majority of FCUs are
composed of the same combination of materials as Daikin’s. NSOF (Dkt
# 62) ¶ 5. But ultimately, whether Dr. Eagar’s contentions are to be credited
is a question of fact to be resolved by the jury. See Daubert v. Merrell Dow
Pharms., Inc., 509 U.S. 579, 596 (1993) (“Vigorous cross-examination,
presentation of contrary evidence, and careful instruction on the burden of
proof are the traditional and appropriate means of attacking shaky but
admissible evidence.”).
That said, the Evans’ primary claim, as supported by their expert, is
that the HVAC system was defectively designed. This necessarily implicates
DACA Trust, but it does not involve Daikin NA or Daikin AA. Nor does Dr.
Eagar’s report support the Evans’ additional claim that Daikin NA and
Daikin AA breached the warranty of merchantability by selling defectively
designed replacement coils. See Pina v. Children’s Place, 740 F.3d 785, 795
(1st Cir. 2014) (“Although we will draw all reasonable inferences in the
The court recognizes that this exhibit, Dr. Eagar’s Affidavit, was not
signed “under penalty of perjury that . . . [its contents were] true and correct”
per 28 U.S.C. § 1746, but elects to consider it as a supplement to his report
for purposes of summary judgment.
13
14
nonmovant’s favor, we will not ‘draw unreasonable inferences or credit bald
assertions, empty conclusions, rank conjecture, or vitriolic invective.’”)
(emphasis in original), quoting Cabán Hernández v. Philip Morris USA,
Inc., 486 F.3d 1, 8 (1st Cir. 2007). While Dr. Eagar found that the coils
corroded prematurely, he traced the problem to the Styrofoam drain pan, not
the coils themselves.15 Neither Daikin NA nor Daikin AA can, therefore, be
held liable for breach of implied warranty of merchantability.
DACA Trust further argues that it did not breach any implied
warranties because any such warranties were conspicuously disclaimed in
the express warranty.16 See Theos & Sons, Inc. v. Mack Trucks, Inc., 431
Mass. 736, 739 (2000) (“[A] warranty of merchantability is implied in the
sale of goods by a merchant unless properly disclaimed.”), citing Mass. Gen.
Laws ch. 106, § 2-314(1). However, Mass. Gen. Laws ch. 106, § 2-316A
Further, while the Evans assert that Daikin’s NA’s replacement coils
failed, neither the citations nor the evidence supports that assertion. See
Opp’n (Dkt # 72) at 4. Similarly, there is no evidence that the spare parts
provided by Daikin AA failed or were defective. See Reply (Dkt # 93) at 4-5.
15
The express warranty provides in capital letters that it “IS THE SOLE
AND EXCLUSIVE WARRANTY FOR [DACA TRUST], AND IS IN LIEU OF
ALL OTHER WARRANTIES EXPRESS OR IMPLIED, IN LAW OR IN FACT”
and “SPECIFICALLY DISCLAIMS ALL OTHER WARRANTIES EXPRESS
OR IMPLIED, INCLUDING BUT NOT LIMITED TO ALL IMPLIED
WARRANTIES OF MERCHANTABILITY AND OF FITNESS FOR A
PARTICULAR USE OR PURPOSE.” NSOF (Dkt # 62), Ex. M at 5.
14
16
prohibits a seller of consumer goods from “exclud[ing] or modify[ing] any
implied warranties of merchantability and fitness for a particular purpose.”
Defendants contend that this section is not applicable because “a custombuilt HVAC system purchased, designed, and installed by professionals is
‘equipment,’ not a ‘consumer good.’” Reply (Dkt # 85) at 4.17 I disagree.
Consumer goods are those “used or bought for use primarily for
personal, family, or household purposes.” Mass. Gen. Laws ch. 106, § 9-102.
Equipment indicates “goods other than inventory, farm products, or
consumer goods.” Id. Here, the HVAC system is a consumer good because
the Evans purchased it to heat and cool their home. Compare Jacobs v.
Yamaha Motor Corp., U.S.A., 420 Mass. 323, 328 (1995) (finding that a
plaintiff’s motorcycle was a consumer good), with Baba v. Hewlett Packard
Co., 2012 WL 5336971, *5 (N.D. Cal. 2012) (applying Massachusetts law and
holding that the plaintiff’s laptop was equipment, not a consumer good,
Defendants also contend that § 2-316A does not apply because the
disputed sale was “a commercial transaction,” Theos & Sons, 431 Mass. at
738 n.2, among corporations: DACA, North Mechanical Services, and Allied,
the latter two of which are listed as the HVAC purchaser or customer on
various materials. NSOF (Dkt # 86), Exs. 5-9. But in Theos & Sons, the
Supreme Judicial Court went on to explain that § 2-316A was inapplicable
because “[t]he sale was a commercial transaction between two corporations
and did not involve consumer goods.” 431 Mass. at 738 n.2 (emphasis
added). Therefore, the only relevant inquiry is, as discussed above, whether
the Evans’ HVAC system is a consumer good.
15
17
because it was used for “business purposes”). DACA Trust’s disclaimer of
any implied warranties is therefore unenforceable.
Breach of Implied Warranty of Fitness
The warranty of fitness for a particular purpose is akin to the warranty
of merchantability, but applies only when a buyer specifies a use for the
product “which is peculiar to the nature of his business.” Mass Gen. Laws
ch. 106, § 2-315 cmt. 2; see Fernandes v. Union Bookbinding Co., 400 Mass.
27, 35-36 (1987). The Evans contend that defendants breached their implied
warranty of fitness for a particular purpose because the HVAC system was
used to heat and cool “their rather unique property: a four-story, 10,799
square-foot home.” Opp’n (Dkt # 72) at 11. That assertion fails as a matter
of law. See Laspesa v. Arrow Int’l, Inc., 2009 WL 5217030, at *4 (D. Mass.
2009) (“When the buyer plans to use the product for its ordinary purpose,
the only implied warranty is the warranty of merchantability . . . .”). Since it
is undisputed that an HVAC system is used to heat and cool a home and the
Evans used it for that very purpose, they cannot claim a breach of the implied
warranty of fitness. See Hannon v. Original Gunite Aquatech Pools, Inc.,
385 Mass. 813, 821 (1982) (finding no breach under § 2-315 where a buyer
used the swimming pool for no purpose other than to swim).
16
Negligent and Intentional Misrepresentation
To sustain a claim of misrepresentation, “a plaintiff must prove 1) the
defendant made a false statement of a material fact, 2) to induce the plaintiff
to act thereon and 3) the plaintiff reasonably relied on the statement to his
detriment.” Ruggers, Inc. v. U.S. Rugby Football Union, Ltd., 843 F. Supp.
2d 139, 145-146 (D. Mass. 2012), citing Zimmerman v. Kent, 31 Mass. App.
Ct. 72, 77 (1991). To support a negligent misrepresentation claim, the
plaintiff must show that the defendant failed “to exercise reasonable care or
competence in obtaining or communicating the information.” Nota Const.
Corp. v. Keyes Assocs., Inc., 45 Mass. App. Ct. 15, 20 (1998). For an
intentional misrepresentation claim, the plaintiff must show that the
defendant knew that the statement was false when made. Zuckerman v.
McDonald’s Corp., 35 F. Supp. 2d 135, 144 (D. Mass. 1999).
To satisfy the reliance element, the Evans allege that they relied on
Daikin’s statements that the HVAC system could “address any design
challenge,” “be installed practically anywhere” and “seamlessly crafted into
any design,” and “perform flawlessly in any climate,” with assured reliability
and “constant operation.” NSOF (Dkt # 73) ¶¶ 67, 69, 73, 76. The Daikin
literature did not, however, warn about installation near drywall or note the
17
need for ductwork.18 The Evans contend that these representations were
materially false because defendants now claim that the coils cannot be safely
installed around drywall or without ducting.
They also assert that the
representation that a homeowner could “control each room individually . . .
[and] even shut down operations in zones or rooms that are not in use,” id. ¶
77, was materially false because they had to independently hire NECT to
install shut-off values to achieve that feature.
Having previously concluded that only DACA, not Daikin NA or Daikin
AA, made the alleged representations, only DACA Trust can be held liable.
DACA
Trust,
in
turn,
argues
that
these
statements
are
not
misrepresentations but mere puffery. See Saint Consulting Grp., Inc. v. E.
Ins. Grp., LLC, 2015 WL 2062202, at *12 (Mass. Super. 2015) (“[P]romises
to provide a ‘superior’ insurance program for [plaintiff] and to do ‘an
outstanding job” for all of [plaintiff’s] insurance needs are common
‘puffery . . . .’”); Gemini Inv’rs, Inc. v. Ches-Mont Disposal, LLC, 629 F. Supp.
2d 163, 169 (D. Mass. 2009) (“[Plaintiff’s] sales pitch with respect to its
superior ‘skill sets’ is no more than comparable corporate puffery.”);
Greenery Rehab. Grp., Inc. v. Antaramian, 36 Mass. App. Ct. 73, 75 (1994)
The installation manual provides that the coils should not be
installed “[w]here corrosive gas, such as sulfurous acid gas, is produced.”
NSOF (Dkt # 62) ¶ 30.
18
18
(noting that the statements “solid” and “good as gold” are “so general as to
amount to puffery”). Puffery “‘is exaggerated advertising, blustering, and
boasting upon which no reasonable buyer would rely.’” Clorox Co. Puerto
Rico v. Proctor & Gamble Commercial Co., 228 F.3d 24, 38 (1st Cir. 2000)
(citation
omitted).
But
whether
these
statements
are
material
misrepresentations or mere puffery is a question of fact for the jury, for it
cannot be said that they “‘are so obviously unimportant . . . that reasonable
minds cannot differ on the question of materiality.’” Marram v. Kobrick
Offshore Fund, Ltd., 442 Mass. 43, 58 (2004) (citation omitted).
DACA Trust also disputes the Evans’s reliance on the alleged
misrepresentations. The Evans testified that, to the best of their recollection,
they did not recall visiting a Daikin website or communicating with a Daikinnamed entity. ASOF (Dkt # 53) ¶¶ 12-15. The Evans purchased the HVAC
system primarily based on the recommendation of their engineer Allied,
which had described the Daikin system as “a superior system to
Mitsubishi . . . [that] is more efficient and provides a higher [seasonal energy
efficiency ratio].” NSOF (Dkt # 62) ¶ 43. Bruce Evans specifically recalls
Allied stating that “the Daikin system would be well suited for [his] home.”
Id. ¶ 39. However, Bruce Evans also testified that he relied, in part, on the
Daikin literature in deciding to purchase the Daikin HVAC system. NSOF
19
(Dkt # 73) ¶ 61. Whether the Evans reasonably relied on these alleged
misrepresentations is similarly a question of fact for the jury. See Marram,
442 Mass. at 59 (“Reliance normally is a question for a jury.”); Nota Const.
Corp., 45 Mass. App. Ct. at 20 (“A claim for negligent misrepresentation is
ordinarily one for a jury, unless the undisputed facts are so clear as to permit
only one conclusion.”).
ORDER
For the foregoing reasons, Daikin AA and Daikin NA’s motions for
summary judgment on all counts are ALLOWED. DACA Trust’s motion for
summary judgment is ALLOWED in part with respect to Count I claims of
breach of express warranty and breach of implied warranty of fitness for a
particular purpose, but is otherwise DENIED. The Clerk will enter judgment
for Daikin AA and Daikin NA on all claims, and set the remainder of the case
for trial to a jury.
SO ORDERED.
/s/ Richard G. Stearns
_____
UNITED STATES DISTRICT JUDGE
20
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