Graham et al v. All American Cargo Elevator, LLC et al
Filing
164
MEMORANDUM OPINION AND ORDER granting in part and denying in part Defendant All American Cargo Elevator, LLC's Motion 140 for Summary Judgment. Signed by District Judge Halil S. Ozerden on 09/16/2013 (HM)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF MISSISSIPPI
SOUTHERN DIVISION
SHARON GRAHAM, and
BILLY BOB GRAHAM
PLAINTIFFS
V.
Civil No. 1:12-cv-58-HSO-RHW
ALL AMERICAN CARGO ELEVATOR, and
LEESON ELECTRIC CORPORATION
DEFENDANTS
MEMORANDUM OPINION AND ORDER GRANTING IN PART AND
DENYING IN PART DEFENDANT ALL AMERICAN CARGO ELEVATOR,
LLC’S MOTION [140] FOR SUMMARY JUDGMENT
BEFORE THE COURT is Defendant All American Cargo Elevator, LLC’s
(“All American’s”) Motion [140] for Summary Judgment. Plaintiffs Sharon and
Billy Bob Graham have filed a Response [150] and a Response Memorandum [151],
and All American has filed a Reply [156]. After considering the pleadings on file,
the record, and relevant legal authorities, the Court finds that All American’s
Motion [140] for Summary Judgment should be granted in part and denied in part.
Sharon Graham’s claims for breach of express warranty, breach of the implied
warranty of merchantability, breach of the implied warranty of fitness for a
particular purpose, and punitive damages should be dismissed. Ms. Graham’s
claims for defective design and failure to warn should proceed to trial, as should
Billy Bob Graham’s claim for loss of consortium.
I. BACKGROUND
In 2007, Defendant All American sold Plaintiffs Sharon and Billy Bob
Graham a residential cargo elevator for use in their elevated home in Pearlington,
Mississippi. Dep. of Sharon Graham [140-5] at p. 11-12, 19-20. All American
installed the elevator and serviced it pursuant to a maintenance agreement
purchased by the Grahams. Id. On October 18, 2010, the cargo elevator fell
approximately ten feet to the ground when Ms. Graham stepped onto its platform to
retrieve a three to four pound potted plant. Id. at pp. 48-53, 56, 78. Ms. Graham
descended with the elevator and alleges that she crushed her heel and suffered
other injuries upon impact. Id. at pp. 48-53, 56, 78. The Grahams assert that the
shaft on the gearbox of the elevator’s drawing mechanism sheared, causing the
elevator to free fall. Pls.’ Resp. [151] at pp. 1-2. They allege that All American is
liable because “the cause of product failure was misalignment of the drum which
was undisputedly welded on the Leeson [Electric Corporation] gear box shaft by All
American.” Id. at p. 2.
On October 26, 2011, the Grahams filed a Complaint against All American in
the Circuit Court of Hancock County, Mississippi. Pls.’ Compl. [140-1] at pp. 2-4.
They filed an Amended Complaint on October 31, 2011, and a Second Amended
Complaint, adding the gearbox manufacturer Leeson as a Defendant, on January
20, 2012. Pls.’ Am. Compl. [140-2] at pp. 3-4; Pls.’ Sec. Am. Compl. [140-3] at p. 1.
The action was removed to this Court in February 2012. The Grahams allege
that the product which broke, was designed and/or
manufactured in a defective manner and breached implied
and express warranties and failed to conform to other
factual representations, upon which the Plaintiffs (or CoDefendant, All American) relied upon in electing to use said
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product and;
(1) The defective condition rendered the product
unreasonably dangerous to the user or consumer and;
(2) The defective and unreasonable condition of the product
caused the damages to the Plaintiff which recovery is
sought.
Pls.’ Sec. Am. Compl. [140-3] at p. 2. The Grahams additionally assert “[t]hat the
Defendants failed to adequately warn of possible failure and free fall potential.”
Pls.’ Compl. [140-1] at p. 2; First Am. Compl. [140-2] at p. 2.
The Grahams’ claims against Leeson (now known as RBC Manufacturing
Corporation) have been dismissed. Agreed Order of Dismissal [160]. Now before
the Court is All American’s Motion [140] Summary Judgment.
II. DISCUSSION
A. Summary Judgment Standard
Federal Rule of Civil Procedure 56(a) provides that summary judgment is
appropriate “[i]f 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). The purpose of summary judgment is to isolate and dispose of
factually unsupported claims or defenses. Melton v. Teachers Ins. & Annuity Ass’n
of Am., 114 F.3d 557, 560 (5th Cir. 1997)(citing Celotex Corp. v. Catrett, 477 U.S.
317, 324 (1986)).
To rebut a properly supported motion for summary judgment, the opposing
party must show, with “significant probative evidence,” that there exists a genuine
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issue of material fact. Hamilton v. Segue Software, Inc., 232 F.3d 473, 477 (5th Cir.
2000). In deciding whether summary judgment is appropriate, the Court views
facts and inferences in the light most favorable to the nonmoving party. RSR Corp.
v. Int’l Ins. Co., 612 F.3d 851, 858 (5th Cir. 2010). However, if the evidence is
merely colorable, or is not significantly probative, summary judgment is
appropriate. Cutting Underwater Techs. USA, Inc. v. ENI U.S. Operating Co, 671
F.3d 512, 516 (5th Cir. 2012)(citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242,
249 (1986)). “[M]ere conclusory allegations are not competent summary judgment
evidence, and such allegations are insufficient, therefore, to defeat a motion for
summary judgment.” Eason v. Thaler, 73 F.3d 1322, 1325 (5th Cir. 1996).
“There is no material fact issue unless the evidence is such that a reasonable
jury could return a verdict for the nonmoving party.” RSR Corp., 612 F.3d at 858.
“A fact is ‘material’ if its resolution in favor of one party might affect the outcome of
the lawsuit under governing law. An issue is ‘genuine’ if the evidence is sufficient
for a reasonable jury to return a verdict for the nonmoving party.” Hamilton, 232
F.3d at 477 (citing Anderson, 477 U.S. at 248). “The court has no duty to search the
record for material fact issues.” RSR Corp., 612 F.3d at 858. “Rather, the party
opposing summary judgment is required to identify specific evidence in the record
and to articulate precisely how this evidence supports his claim.” Id.
B.
Analysis
Sharon Graham is pursuing defective design, failure to warn, and breach of
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express warranty claims pursuant to the Mississippi Products Liability Act
(“MPLA”), Mississippi Code section 11-1-63. She is asserting claims for breach of
the implied warranty of merchantability and fitness for a particular purpose
pursuant to Article 2 of the Uniform Commercial Code governing the sale of goods,
as codified in Mississippi Code sections 75-2-314 and 75-2-315. She seeks
compensatory and punitive damages. Billy Bob Graham is pursuing a claim for loss
of consortium. All American contends that summary judgment must be granted in
its favor on all of the Grahams’ claims for a variety of reasons.
1.
Defective Design Claim
To prevail on an MPLA claim, the plaintiff must prove by a preponderance of
the evidence that at the time the product left the control of the manufacturer or
seller, the product had a defective condition, which rendered it unreasonably
dangerous to the user or consumer, and the defective and unreasonably dangerous
condition proximately caused the damages for which recovery is sought. Miss. Code
Ann. § 11-1-63(f). A plaintiff pursuing a defective design claim must also establish
that: (1) the manufacturer or seller knew, or in light of reasonably available
knowledge or in the exercise of reasonable care should have known, about the
danger that allegedly caused the plaintiff damage; (2) the product failed to function
as expected; and (3) there existed a feasible design alternative that would have in
reasonable probability prevented the harm. Miss. Code Ann. § 11-1-63(f). “In other
words, the danger presented by the defect must be reasonably foreseeable, and a
feasible design alternative must have existed.” Hyundai Motor Am. v. Applewhite,
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53 So. 3d 749, 756 (Miss. 2011).
a.
Evidence of Misalignment
All American maintains that Ms. Graham’s defective design claim must fail
because her sole expert A.J. McPhate, a mechanical engineer, “provides no objective
evidence that the triggering condition, a drum-shaft misalignment, was present,
merely stating that any misalignment would cause a product failure.” All Am.’s
Mem. [141] at pp. 6-7. All American’s criticism focuses on the following sentence in
McPhate’s initial report: “The rigid connection between the drum and the gearmotor output shaft causes any angular misalignment to induce cyclic bending
stresses in the gear-motor output shaft.” A.J. McPhate’s Exp. Rep. [148-1] at p. 3.
Reading McPhate’s initial report together with his supplemental reports, it is
sufficiently clear that McPhate identified a purported drum-shaft misalignment in
the subject cargo elevator and concluded that it caused product failure. McPhate
supports his conclusion with a diagram of the gearbox shaft depicting “bore hole”
measurements, which he applies to mathematically calculate a purported drumshaft misalignment. Diagram [148-5]. McPhate’s testimony creates a material fact
issue regarding whether the residential cargo elevator was defective. Summary
judgment should not be granted in favor of All American on this basis.
b.
Use of Industry Standards
All American contends that Ms. Graham’s defective design claim must be
dismissed because McPhate does not “cite to any objective standards as to what is
actually required in the industry, as opposed to how he would personally fix the
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problem.” All Am.’s Mem. [141] at p. 8. The Court has already addressed and
rejected this argument in its Memorandum Opinion and Order entered herewith
denying All American’s Daubert Motion to Exclude McPhate as an expert. Mem.
Op. and Order [163] at p. 7. All American’s criticism of the sources and
methodology of McPhate’s opinions affect the weight to be assigned those opinions
rather than their admissibility and should be left for the jury’s consideration.
United States v. 14.38 Acres of Land, 80 F.3d 1074, 1078 (5th Cir. 1996); see Knight
v. Kirby Inland Marine, Inc., 482 F.3d 347, 354 (5th Cir. 2007)(“Where an expert
otherwise reliably utilizes scientific methods to reach a conclusion, lack of textual
support may go to the weight, not the admissibility, of the expert’s testimony.”).
c.
Evidence that Defendant All American Should Have Known
About the Danger
In a defective design case, “[t]he manufacturer or product seller shall not be
liable” unless the plaintiff proves that “at the time the product left the control of the
manufacturer or seller[,]”
[t]he manufacturer or seller knew, or in light of reasonably
available knowledge or in the exercise of reasonable care
should have known about the danger that caused the
damage for which recovery is sought . . . .
Miss. Code Ann. § 11-1-63(f)(i).
All American contends that the Grahams have provided no evidence that All
American knew or should have known about the danger of drum-shaft
misalignment. All Am.’s Mem. [141] at p. 11. In response, the Grahams point to a
Leeson Gear Catalog containing “electrical/mechanical warnings and cautions.”
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Leeson Gear Catalog [150-9]. The Catalog warns that “[o]verhung loads subject
shaft bearings and shafts to stress which may cause premature bearing failure
and/or shaft breakage from bending fatigue, if not sized properly.” Id. at p. 2. The
Grahams also reference a Leeson user’s manual, which states that “[o]verhung load
can be eased by locating a sheave or sprocket as close to the reducer bearing as
possible. In cases of extreme overhung load, an additional outboard bearing may be
required.” Leeson’s 2012 Basic Training Manual [148-6]. The Grahams have
submitted evidence creating a genuine issue of material fact as to whether All
American knew or should have known about the danger of drum-shaft
misalignment. Ms. Graham’s defective design claim should not be dismissed on this
basis.
d.
Whether a Feasible Design Alternative Existed
In a defective design case, “the manufacturer or product seller shall not be
liable” unless the plaintiff proves that “at the time the product left the control of the
manufacturer or seller[,]”
[t]he product failed to function as expected and there existed
a feasible design alternative that would have to a
reasonable probability prevented the harm. A feasible
design alternative is a design that would have to a
reasonable probability prevented the harm without
impairing the utility, usefulness, practicality or desirability
of the product to users or consumers.
Miss. Code Ann. § 11-1-63(f)(ii).
All American contends that summary judgment should be granted in its favor
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on Ms. Graham’s defective design claim because McPhate “completely fails to
explain how his proposed solution to the problem would meet the statutory
requirement of a feasible design alternative which would reasonably prevent the
harm, beyond ‘conceptualizing possibilities.’” Am.’s Mem. [141] at p. 10. In his
reports, McPhate agrees with the gearbox manufacturer’s instruction that
“[o]verhung load can be eased by locating a sheave or sprocket as close to the
reducer bearing as possible.” A.J. McPhate’s Exp. Rep. [150-6] at p. 2. McPhate
opines that proper alignment was especially important with regard to the
residential cargo elevator at issue because “the outboard bearing is so far from the
gearbox.” A.J. McPhate’s Exp. Rep. [148-6] at p. 3. A triable issue of fact exists as
to whether the sizing adjustments suggested by McPhate constitute a feasible
design alternative under the MPLA. Summary judgment should not be granted in
All American’s favor on this basis.
2.
Failure to Warn Claim
The MPLA provides that
[i]n any action alleging that a product is defective because
it failed to contain adequate warnings or instructions
pursuant to paragraph (a)(i)2 of this section, the
manufacturer or seller shall not be liable if the claimant
does not prove by the preponderance of the evidence that at
the time the product left the control of the manufacturer or
seller, the manufacturer or seller knew or in light of
reasonably available knowledge should have known about
the danger that caused the damage for which recovery is
sought and that the ordinary user or consumer would not
realize the dangerous condition.
Miss. Code Ann. § 11-1-63(c)(i).
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The MPLA defines an “adequate warning or instruction” as one that “a
reasonably prudent person in the same or similar circumstances would have
provided with respect to the danger and that communicates sufficient information
on the dangers and safe use of the product, taking into account the characteristics
of, and the ordinary knowledge common to an ordinary consumer who purchases the
product[.]” Miss. Code Ann. § 11-1-63(c)(ii). All American contends that Ms.
Graham’s failure to warn claim must be dismissed for two reasons: (1) because All
American provided adequate warnings; and (2) because Ms. Graham has not
supported her claim with expert testimony, which All American contends is
required to support all MPLA failure to warn claims. All Am.’s Mem. [141] at pp.
12-13; All Am.’s Reply [156] at pp. 6-7.
At the time of purchase, Sharon Graham signed a Hold Harmless Agreement,
which informed her that the elevator was “designed for the transportation of cargo
only [and] not designed to be used for the transportation of persons.” All Am.’s
Mem. [141] at p. 13; Hold Harmless Agreement [150-11]. The elevator was marked
“Cargo Elevator Only,” and a warning provided: “CAUTION: No Riders Permitted.”
All Am.’s Mem. [141] at p. 13. The Grahams submit that these warnings were not
adequate because, in order to use the cargo elevator for its intended purpose, a
person is required to step onto the platform to place and retrieve cargo. They
contend that an ordinary user or consumer would not understand from All
American’s warnings that stepping onto the elevator was improper, as stepping onto
the elevator to retrieve cargo is not the same as riding the elevator. Pls.’ Resp.
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Mem. [151] at p. 8. The issue of whether All American’s warnings were adequate is
a factual one and should be resolved by the jury. Wyeth Labs., Inc. v. Fortenberry,
530 So. 2d 688, 692 (Miss. 1988).
The failure to warn claim may proceed, even though McPhate did not
expressly address warnings in his reports. “The adequacy of a warning . . . may fall
into the category of issues requiring expert testimony” when “the issue presented
requires scientific, technical or other specialized knowledge.” Id. at 692. “Where
the adequacy of the warning is not obvious to the ordinary layperson it is necessary
to have expert testimony as to this issue.” Id. There is no “categorical rule”
requiring expert testimony to support every failure to warn claim. Weatherspoon v.
Nissan N. Am., Inc., No. 3:07cv24-DPJ-LRA, 2010 WL 606561, *10 n.3 (S.D. Miss.
Feb. 17, 2010). All American has not presented authority supporting the conclusion
that Ms. Graham’s failure to warn claim is one so complex that it must be
supported by expert testimony. Summary judgment should not be granted on Ms.
Graham’s failure to warn claim.
3.
Breach of Express Warranty Claim
To prevail on a breach of express warranty claim under the MPLA, a plaintiff
must establish that “[t]he product breached an express warranty or failed to
conform to other factual representations upon which the claimant justifiably relied
in electing to use the product . . . .” Miss. Code Ann. § 11-1-63(a)(i)4. All American
asserts that Ms. Graham’s express warranty claim should be dismissed because
“[t]here is no evidence that [All American] made an express representation about
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the elevator or that Plaintiffs relied on any such information.” All Am.’s Mem. [141]
at p. 13. In response, Ms. Graham references the “Hold Harmless Agreement”
signed by her, which states that “[t]he hoist is designed for cargo that does not
exceed 800 pounds.” Hold Harmless Agreement [150-11]. Ms. Graham asserts that
All American is liable for breach of an express warranty because it assured her that
“the elevator would tolerate 800 pounds which it failed to do.” Pls.’ Resp. Mem.
[151] at p. 8. The Court agrees with All American’s argument that Ms. Graham is
attempting “to stretch a warranty for cargo into a warranty for the safety of
person[s] . . . .” All Am.’s Reply [156] at p. 10. By its clear terms, the “800 pounds”
provision in the Hold Harmless Agreement expressly relates to cargo only. Ms.
Graham’s breach of express warranty claim should be dismissed.
4.
Breach of Implied Warranty of Merchantability Claim
Article II of the UCC, as codified in Mississippi Code section 75-2-314,
provides for an implied warranty of merchantability. “[A] warranty that the goods
will be merchantable is implied in a contract for their sale if the seller is a
merchant with respect to goods of that kind.” Miss. Code Ann. § 75-2-314(1). The
Grahams contend that the cargo elevator was not merchantable because it was not
“fit for the ordinary purpose for which such goods are used . . . .” Miss. Code Ann. §
75-2-314(2)(c). All American contends that even if Ms. Graham could prove that a
defect in the cargo elevator caused the accident, she cannot recover for an alleged
breach of the implied warranty of merchantability because the Grahams failed to
afford All American a reasonable opportunity to cure the elevator’s alleged defect.
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All Am.’s Mem. [141] at p. 14.
Mississippi Code section 75-2-608 provides:
(1) The buyer may revoke his acceptance of a lot of
commercial unit whose nonconformity substantially impairs
its value to him if he has accepted it
(a) on the reasonable assumption that its
nonconformity would be cured and it has not
been seasonably cured; or
(b) without discovery of such nonconformity if
his acceptance was reasonably induced either
by the difficulty of discovery before acceptance
or by the seller’s assurances.
(2) Revocation of acceptance must occur within a reasonable
time after the buyer discovers or should have discovered the
ground for it and before any substantial change in condition
of the goods which is not caused by their own defects. It is
not effective until the buyer notifies the seller of it.
....
Miss. Code Ann. § 75-2-608.
The record suggests that the Grahams’ acceptance of the cargo elevator may
have been reasonably induced by the difficulty of discovering the elevator’s alleged
defect and thus that the Grahams had grounds for revocation. Miss. Code Ann. §
75-2-608(1)(b). However, section 75-2-608(2) provides that revocation is not
effective until the buyer notifies the seller of it. A buyer must provide notice to the
seller of the revocation of acceptance prior to filing suit for breach of the implied
warranty of merchantability and thereby afford the seller an opportunity to cure.
Gast v. Rogers-Dingus Chevrolet, 585 So. 2d 725, 729 (Miss. 1991); see Watson
Quality Ford, Inc. v. Casanova, 999 So. 2d 830, 834 (Miss. 2009). No evidence has
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been presented to the Court indicating that the Grahams provided All American
notice and an opportunity to cure prior to filing suit. Accordingly, Ms. Graham’s
claim for breach of the implied warranty of merchantability should be dismissed.
5.
Breach of Implied Warranty of Fitness for a Particular Purpose Claim
Mississippi Code section 75-2-315 provides for an implied warranty of fitness
for a particular purpose “where 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 furnish suitable goods . . . .”
Miss. Code Ann. § 75-2-315. A “particular purpose” is a special use which is
particular to the buyer, as opposed to the “ordinary purpose” which is contemplated
by the warranty of merchantability. Watson, 999 So. 2d at 835. “[N]o claim for
breach of the implied warranty of fitness for a particular purpose will lie when a
product is to be used for its ordinary purpose.” Id. (citing Ford Motor Co. v. Fairley,
398 So. 2d 216, 219 (Miss. 1981)).
All American asserts that Ms. Graham’s breach of implied warranty of fitness
for a particular purpose claim must be dismissed because the Grahams purchased
and used the cargo elevator for its ordinary use and not a particular use. All Am.’s
Mem. [141] at p. 15. The Grahams have offered no evidence that the residential
cargo elevator was purchased or used for anything other than its ordinary purpose.
Ms. Graham’s breach of the implied warranty of fitness for a particular purpose
claim should be dismissed.
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6.
Billy Bob Graham’s Loss of Consortium Claim
All American argues that because Ms. Graham’s claims must be dismissed,
Mr. Graham’s loss of consortium claim must also be dismissed because it is a
derivative claim. All Am.’s Mem. [141] at p. 16. For the reasons already stated, Ms.
Graham’s claims for defective design and failure to warn will proceed to trial.
Therefore, Mr. Graham’s loss of consortium will also proceed.
7.
Noneconomic Damages
The Grahams seek $2,000,000 in compensatory damages. Pls.’ Sec. Am.
Compl. [140-3] at pp. 2-3. All American requests an order “precluding an award
over the amount of one million dollars” for noneconomic damages pursuant to
Mississippi Code section 11-1-60(2)(b). All Am.’s Mem. [141] at p. 16. The Grahams
acknowledge that section 11-1-60(2)(b) provides a cap on noneconomic damages.
Pl.’s Resp. Mem. [151] at p. 10. No order is needed on this issue. The parties agree
that section 11-1-60(2)(b) controls.
8.
Punitive Damages
“Punitive damages may not be awarded if the claimant does not prove by
clear and convincing evidence that the defendant against whom punitive damages
are sought acted with actual malice, gross negligence which evidences a willful,
wanton or reckless disregard for the safety of others, or committed actual fraud.”
Miss. Code Ann. § 11-1-65(1)(a). “When deciding whether to submit the issue of
punitive damages to a trier of fact, the trial court looks at the totality of the
circumstances, as revealed in the record, to determine if a reasonable, hypothetical
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trier of fact could find either malice or gross neglect/reckless disregard.” Bradfield
v. Schwartz, 936 So. 2d 931, 936 (Miss. 2006). “Mississippi law does not favor
punitive damages[,] . . . and [they] are allowed with caution and within narrow
limits.” Warren v. Derivaux, 996 So. 2d 729, 738 (Miss. 2008)(internal citations
omitted). “An award of punitive damages is an extraordinary remedy, reserved for
the most egregious case, and designed to discourage similar misconduct.” T.C.B.
Constr. Co., Inc. v. W.C. Fore Trucking, Inc., No. 2010-CT-00177-SCT, — So. 3d —,
2013 WL 718628, * 2 (Miss. Feb. 28, 2013).
The Court, having considered the totality of the circumstances as revealed in
the record, finds that the allegations and proof presented, even when viewed in the
light most favorable to the Grahams, would not support a finding by clear and
convincing evidence of conduct on All American’s part that warrants the
extraordinary remedy of punitive damages. Ms. Graham’s punitive damages claim
should be dismissed.
III. CONCLUSION
IT IS, THEREFORE, ORDERED AND ADJUDGED that, Defendant All
American Cargo Elevator, LLC’s Motion [140] for Summary Judgment is
GRANTED IN PART AND DENIED IN PART. Plaintiff Sharon Graham’s
claims for breach of express warranty, breach of the implied warranty of
merchantability, breach of the implied warranty of fitness for a particular purpose,
and punitive damages are DISMISSED WITH PREJUDICE. Plaintiff Sharon
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Graham’s claims for defective design and failure to warn will proceed to trial, as
will Billy Bob Graham’s claim for loss of consortium.
SO ORDERED AND ADJUDGED, this the 16th day of September, 2013.
s/ Halil Suleyman Ozerden
HALIL SULEYMAN OZERDEN
UNITED STATES DISTRICT JUDGE
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