Dusseau Farms, LCC v. Wilbur-Ellis Company
Filing
32
ORDER Granting 24 Defendant's Motion for Summary Judgment. Signed by District Judge Gershwin A. Drain. (Bankston, T)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
DUSSEAU FARMS LCC,
Plaintiff,
Case No. 12-12581
HON. GERSHWIN A. DRAIN
vs.
WILBUR-ELLIS COMPANY,
Defendant.
__________________________________/
ORDER GRANTING DEFENDANT’S MOTION FOR SUMMARY JUDGMENT [#24]
I.
INTRODUCTION
Presently before the Court is Defendant’s Motion for Summary Judgment filed on May
31, 2013. Plaintiff failed to file a Response in the time allowed under Local Rule 7.1(e).
Defendant filed a Motion on July 2, 2013 to preclude Plaintiff from responding, which this Court
granted. Plaintiff filed a Motion for Relief from the Order on July 10, 2013, which this Court
denied. Even if Plaintiff were allowed to respond, it would not change the outcome of the case.
Based on Defendant’s brief, it is apparent that summary judgment must be GRANTED.
II.
PROCEDURAL AND FACTUAL HISTORY
Plaintiff, Dusseau Farms, LCC, is a commercial farm located in Lenawee County,
Michigan. It is owned and operated by Randy, Scott, and Michael Dusseau. Defendant, WilburEllis Company, is a distributor of agricultural products, including chemicals that farmers use on
their crops. In July 2011, Defendant’s representative, Ryan Robinson, recommended that
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Plaintiff spray four chemicals in combination onto its banana pepper crop. These chemicals were
copper, Acephate, Quadris, and R56. Plaintiff chose to utilize the recommendation and placed an
order with Defendant.
Once Plaintiff placed the order, Defendant delivered the products. A delivery tag
accompanied the chemicals, which was signed by a representative of Plaintiff. Defendant also
sent monthly invoices to Plaintiff. This process of ordering chemicals – with a recommendation,
an order slip, a delivery tag, and an invoice – is Defendant’s standard business practice and has
been utilized with Plaintiff on numerous occasions for many years, with the standard language
on the forms unchanged.
After the four chemicals were delivered, Mike Dusseau used a tank sprayer to apply the
mixture to the banana pepper crop. He refilled the sprayer’s tank three times to spray the banana
peppers with the mixture. Each tank sprayed a distinct area, and the three areas did not overlap.
The first two areas sprayed produced a normal growth and yield of banana pepper crop, though
with some mild distortion and scorching on the foliage. The crop in the third area became burned
and damaged. According to Scott Dusseau, the first two tanks did not cause any harm to the
banana pepper crop. However, Scott Dusseau and his brothers deny that they did anything
different with the third tank that resulted in the harm to the third area of the crop.
Scott Dusseau does not claim that any of the chemicals individually caused the damage,
but speculates that the four chemicals mixed together became toxic at a certain temperature and
humidity. Scott Dusseau bases this hypothesis on what Mary Hausbeck from Michigan State
University allegedly told him. A diagnostic report from Michigan State University states that
“the possibility of a phytotoxicity caused by the components in the tank mix cannot be
discounted.” However, it remains inconclusive, stating that “the observation that the damage to
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the crop became more severe as subsequent tank loads were applied is somewhat difficult to
explain.” During deposition, Randy Dusseau, who Plaintiff disclosed in its witness list as an
expert regarding the use of pesticides, herbicides, and fertilizer, conceded that he doesn’t know
why the banana pepper crop was damaged.
III.
LAW AND ANALYSIS
1. Standard of Review
Federal Rule of Civil Procedure 56(a) empowers the court to render summary judgment
where there is no genuine issue of material fact and moving party is entitled to judgment as a
matter of law. This is not a disfavored procedural shortcut, as the Supreme Court has affirmed
the court’s use of summary judgment as an integral part of the system. Celotex Corp. v. Catrett,
477 U.S. 317, 327 (1986).
The standard for determining whether summary judgment is appropriate is “whether the
evidence presents a sufficient disagreement to require submission to a jury or whether it is so
one-sided that one party must prevail as a matter of law.” Anderson v. Liberty Lobby, Inc., 477
U.S. 242, 251-52 (1986). The evidence and all reasonable inferences must be construed in the
light most favorable to the non-moving party. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio
Corp., 475 U.S. 574, 587 (1986).
If the movant establishes that there is no genuine issue of material fact and that it is
entitled to judgment as a matter of law, the opposing party must come forward with “specific
facts showing that there is a genuine issue for trial.” First Nat. Bank of Ariz. v. Cities Service
Co., 391 U.S. 253, 270 (1968). A mere scintilla of evidence supporting the non-moving party is
insufficient and will not meet this burden. Anderson, 477 U.S. at 252.
2. Warranties
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In Count 1 of the Complaint, Plaintiff alleges that “Defendants [sic] breached their
implied warranty, pursuant to MICH. COMP. LAWS § 440.2314, and expressed warranty of
merchantability by selling the product that was not merchantable or did not meet industry
standards.” In Count 2, Plaintiff alleges that Defendant breached the express and implied
warranty of fitness “pursuant to MICH. COMP. LAWS § 440.2313,” as “Defendant warranted that
the product sold to Plaintiff was suitable to be used to protect Plaintiff’s pepper crop from
damage.”
Under MICH. COMP. LAWS § 440.2314, “warranty that the goods shall be merchantable is
implied in a contract for their sale if the seller is a merchant with respect to goods of that kind.”
However, implied warranties may be excluded or modified if the seller meets certain
requirements. MICH. COMP. LAWS § 440.2316(2) states:
[T]o exclude or modify the implied warranty of merchantability or any part of it the
language must mention merchantability and in case of a writing must be conspicuous, and
to exclude or modify any implied warranty of fitness the exclusion must be by a writing
and conspicuous. Language to exclude all implied warranties of fitness is sufficient if it
states, for example, that “There are no warranties which extend beyond the description on
the face hereof.
A disclaimer is conspicuous when it is “written, displayed, or presented [so] that a reasonable
person against which it is to operate ought to have noticed it.” MICH. COMP. LAWS § 440.1201(j).
Whether a term or clause is “conspicuous” or not is decided by the court. Id.
Defendant provided Plaintiff with several written documents that excluded the implied
warranties of merchantability and fitness for a particular purpose. The recommendation report
for the four chemicals contained the following “Recommendation Disclaimer,” which is on the
front page, double-spaced, and in all capitals:
NOTICE TO CUSTOMER: ON ACCOUNT OF THE INHERENT NATURE OF ALL
SPRAYS, VARYING SOILS, TREE AND WEATHER CONDITIONS, THE TIME
AND MANNER OF ANY KIND OF APPLICATION, WILBUR-ELLIS COMPANY
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DOES NOT MAKE OR GIVE ANY WARRANTIES (EXPRESS OR IMPLIED),
GUARANTEES OR AGREEMENTS OF ANY KIND OR CHARACTER IN
REFERENCE TO THE RESULTS OF ITS USE OR THE EFFECTS OF ITS USE.
WILBUR-ELLIS COMPANY CANNOT AND SHALL NOT BE IN ANY WAY
RESPONSIBLE FOR THE CROP OR FOR ANY INJURY OR EXPENSE
RESULTING FROM THE USE OF ANY OF THESE SPRAYS QUOTED HEREIN.
NO AGENT OF THIS COMPANY HAS ANY AUTHORITY TO WARRANT OR
GUARANTEE ANY OF THESE SPRAYS OR TO MAKE ANY AGREEMENT
WHATSOEVER IN REFERENCE THERETO.
Furthermore, on the front side, bottom center, of Wilbur-Ellis’ order ticket for the four
chemicals, it states: “SEE REVERSE SIDE FOR ADDITIONAL TERMS AND CONDITIONS
GOVERNING SALE.” The reverse side of the order ticket states in bold:
EXCEPT AS STATED, THE GOODS COVERED BY THIS FORM ARE SOLD AS IS.
SELLER MAKES NO OTHER WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE NOR ANY OTHER EXPRESSED OR
IMPLIED WARRANTY EXCEPT AS STATED HEREIN.
The delivery tag that Defendant sent Plaintiff along with the four chemicals contains the
following language:
ALL WILBUR-ELLIS COMPANY (“COMPANY”) PRODUCTS ARE SOLD ONLY
PURSUANT TO THE TERMS OF THE COMPANY’S EXPRESS LIMITED
WARRANTY AND LIMITATIONS ON REMEDIES, AND ALL OTHER
WARRANTIES, EXPRESS OR IMPLIED (INCLUDING ANY IMPLIED
WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE) . . . ARE EXCLUDED AND DISCLAIMED.
The invoice Defendant sent Plaintiff for the four chemicals also includes the above disclaimer at
the bottom of the front page.
A disclaimer printed in capital letters or language printed in larger or contrasting type or
color satisfies the conspicuous requirement of the statute. See Treadaway v. Damon Corp., No.
03-CV-73650, 2004 WL 3372010, at *3 (E.D. Mich. Sept. 20, 2004). For example, in Parsley v.
Monaco Coach Corp., 327 F. Supp. 2d. 797, 802 (W.D. Mich. 2004), the court held that notice
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on the front in all capital letters and a disclaimer on the back with a heading “warranties and
exclusion” was conspicuous.
Defendant included disclaimers on several forms, including the recommendation report,
order ticket, delivery tag, and invoice. These disclaimers are in writing, conspicuous, and
mention merchantability and fitness for a particular purpose; therefore, they satisfy the
requirements of MICH. COMP. LAWS § 440.2316(2). The location, font, and clarity of the
disclaimers make them conspicuous, as a reasonable person ought to have noticed them. MICH.
COMP. LAWS § 440.1201(j).
Even if Plaintiff attempts to argue that the above disclaimers are not conspicuous, the
disclaimers are effective, as Plaintiff was fully aware of and understood the disclaimers. A
disclaimer of warranties may be enforced notwithstanding the lack of conspicuous language
where there are “other circumstances which protect the buyer from surprise.” Lumber Mut. Ins.
Co. v. Clarklift of Detroit Inc., 224 Mich. App. 737, 742 (Mich. Ct. App. 1997). Plaintiff has
used or received at least 50 order tickets and delivery tags, at least 50 invoices, and at least 25
recommendations over the years with the exact same language. Scott, Randy, and Michael
Dusseau all testified in deposition that they had read and understood the disclaimers. Scott
Dusseau stated that he never objected to the language.
In Counts 1 and 2 of the Complaint, Plaintiff also alleges that Defendant breached
express warranties. However, Plaintiff has shown no evidence that any express warranties were
made by Defendant. Randy Dusseau testified in deposition that neither Defendant nor its
representative Ryan Robinson made any warranties. He testified that the business relationship
encompassed the disclaimers, which (as seen above) state that no express warranties exist.
Michael Dusseau also testified that from the first day he did business with Defendant, he knew
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that Defendant refused to make any warranties regarding the chemicals. Neither Michael
Dusseau nor his brothers ever objected to this relationship.
There is no genuine issue of material fact regarding whether Defendant breached implied
or express warranty of merchantability or fitness for a particular purpose. Defendant effectively
disclaimed all implied warranties, and Plaintiff had full knowledge of the disclaimers. Plaintiff
has shown no evidence of an express warranty. Therefore, summary judgment is granted to
Defendant on this claim.
3. Contract
In Count 3 of the Complaint, Plaintiff alleges that an express contract existed between the
parties, which stated that “Defendant would supply Plaintiff with a tested and proven product
that met industry standards that would protect Plaintiff’s pepper crop.” However, Plaintiff has
provided no evidence of such a contract, either written or oral. In deposition, Randy Dusseau,
who had “primary sales contact” with Defendant, admitted that no express contract existed:
Q:
A:
Q:
A:
Did anybody ever say to you or promise you that they were supplying you with a
quote, “tested and proven product?”
No.
Did they ever say they were supplying you specifically with a product that met
industry standards? Was that ever discussed?
No.
Since there is no evidence that an express contract existed, there is no genuine issue of material
fact as to whether Defendant was in breach of contract, and summary judgment is awarded to
Defendant on Count 3 of the Complaint.
4. Negligence and Misrepresentation
Count 4 of Plaintiff’s Complaint alleges “negligence and gross negligence,” stating that
Defendant breached “a duty [owed] to Plaintiff to provide tested and proven products, which
when used as recommended by Defendant, would protect Plaintiff’s pepper crop in accordance
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with industry standards.” In Count 5, Plaintiff alleges that Defendant made misrepresentations
“that [it] had expertise in recommending products to be used by Plaintiff to protect their crops.”
Negligence, gross negligence, and misrepresentation are tort claims. Claims are barred by
the economic loss doctrine when the claims arise from a commercial transaction in goods and the
plaintiff suffers only economic loss. Neibarger v. Universal Cooperatives. Inc., 439 Mich. 512,
520; 486 NW2d 612, 615 (Mich. 1992). The economic loss doctrine distinguishes between
“transactions involving the sale of goods for commercial purposes where economic expectations
are protected by commercial and contract law” and claims “involving the sale of defective
products to individual consumers who are injured in a manner which has traditionally been
remedied by resort to the law of torts.” Id. at 520-21. Furthermore, “[t]he economic loss doctrine
applies in Michigan even when the plaintiff is seeking to recover for property other than the
product itself.” Citizens Ins. Co. v. Osmose Wood Preserving Inc., 231 Mich. App. 40, 44 (Mich.
Ct. App. 1998).
No claim of personal injury has been made by Plaintiff. There is also no dispute that
Plaintiff and Defendant are sophisticated commercial parties engaged in an arm’s length
transaction. Plaintiff has been in the business of producing and growing vegetables for over
twenty years, and Defendant is a commercial entity. Plaintiff purchased the chemicals for a
commercial purpose (promoting the growth of the banana pepper crop, which it would then sell
to a processor).
Since these claims fall under the economic loss doctrine, they fail as a matter of law and
summary judgment is granted in favor of Defendant on Counts 4 and 5 of the Complaint.
5. Fraud in the Inducement
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In Count 6, Plaintiff alleges that Defendant fraudulently induced Plaintiff to purchase
products. To show fraud in the inducement, the following elements must be shown:
(1) the defendant made a material misrepresentation; (2) the representation was false; (3)
when the defendant made the representation, the defendant knew that it was false, or
made it recklessly, without knowledge of its truth and as a positive assertion; (4) the
defendant made the representation with the intention that the plaintiff would act upon it;
(5) the plaintiff acted in reliance upon it; and (6) the plaintiff suffered damage.
Custom Data Solutions Inc. v. Preferred Capital Inc., 274 Mich. App. 239, 243; 733 N.W.2d 102
(Mich. Ct. App. 2006).
Plaintiff alleges that Defendant made the misrepresentation that it “was an expert as to
the use of sprays to use in regards to Plaintiff’s pepper crop.” However, Plaintiff has not
presented evidence to support this allegation. On the contrary, in deposition, Scott Dusseau
admitted the following:
Q:
A:
Q:
A:
Q:
A:
Q:
A:
Did Ryan [Wilbur-Ellis’s representative] make any representation to you other
than recommending these four chemicals to be used on your pepper crop to
control the various insects and diseases that on the label they said they would
control?
Nothing but the written recommendation.
In fact, the various documents that you would get . . . they all tell you read the
label. It’s your only recommendation. Don’t they?
Um-hum.
Okay. As you sit here, do you have any facts or is there anything that you can
think of that Ryan said or did that misled or tricked you into buying –
No.
-- these products or entering into this agreement?
No.
Randy Dusseau also supported his brother’s testimony that there was no misrepresentation:
Q:
A:
Is there anything specifically that Ryan said about himself that caused you to buy
things from him?
No. We just went with the nature of buying chemicals that they offered a scouting
service.
On the order ticket, it states that the “ONLY RECOMMENDATION” was for Plaintiff to
“READ THE LABEL!” and apply the chemicals as stated on the label.
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Furthermore, Plaintiff has not presented evidence that any representation Defendant made
was untrue, or that Defendant knew it was not true, as is required to make a claim for fraud in the
inducement.
Also, the fraud that gives rise to a claim of fraud in the inducement must be extraneous to
the contract. Huron Tool & Eng’g Co. v. Precision Consulting Servs. Inc., 209 Mich. App. 365,
374 (Mich. Ct. App. 1995). Misrepresentations relating to the breaching party’s performance of
the contract do not give rise to an independent action in tort. Id. at 373. The alleged fraud in the
instant case is not extraneous to the contract.
Fraud in the inducement further involves a misrepresentation regarding future conduct.
Samuel D. Begola Servs. Inc. v. Wild Bros., 210 Mich. App. 636, 639 (1995). In the instant case,
Plaintiff only alleges that Defendant made a misrepresentation regarding then-existing
circumstances (Defendant’s alleged expertise). Plaintiff cannot make a claim of fraudulent
misrepresentation that is not premised on a promise of future conduct.
Plaintiff has not shown evidence supporting its claim of fraud in the inducement. Plaintiff
must show specific facts that there is a genuine issue for trial; mere allegations in its pleadings
do not meet the burden. Anderson, 477 U.S. at 248. The alleged fraud also is not extraneous to
the contract, and did not involve a misrepresentation regarding future conduct. For these reasons,
summary judgment is granted on Count 6.
6. Michigan Consumer Protection Act
In Count 7, Plaintiff claims that Defendant violated the Michigan Consumer Protection
Act (MCPA). This act states that “unfair, unconscionable, or deceptive methods, acts, or
practices in the conduct of trade or commerce are unlawful.” MICH. COMP. LAWS § 445.903
(2010). However, the MCPA does not supply protection “if an item is purchased primarily for
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business or commercial rather than personal purposes.” Zine v. Chrysler Corp., 236 Mich. App.
261, 273; 600 N.W.2d 384 (Mich. Ct. App. 1999). In Zine, for example, the court held that the
MCPA did not apply where the plaintiff’s purchase of a truck was primarily for business
purposes. Id. at 275.
It is undisputed that Plaintiff’s claim arises out of the purchase of goods primarily used
for a business or commercial purpose. Plaintiff is a commercial farming operation, and bought
the chemicals to promote the growth of the banana pepper crop. Plaintiff sold most of these
peppers to a processor that, in turn, packaged the peppers to be used in restaurants. Therefore,
Plaintiff’s claim is outside the scope of the MCPA, and Count 7 is dismissed.
IV.
CONCLUSION
For the reasons stated above, Defendant’s Motion for Summary Judgment [#24] is
GRANTED.
SO ORDERED.
Dated: July 29, 2013
S/Gershwin A. Drain
GERSHWIN A. DRAIN
UNITED STATES DISTRICT JUDGE
CERTIFICATE OF SERVICE
Copies of this Order were served upon attorneys of record on
July 29, 2013, by electronic and/or ordinary mail.
S/Tanya Bankston
Deputy Clerk
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