Passenger Transportation Specialists Inc et al v. Caterpillar Inc et al
ORDER denying #114 plaintiff Passenger Transportation Specialists Inc., motion for summary judgment; and granting #126 Warren Power & Machinery Inc.'s motion for summary judgment....judgment will be entered in its favor when the case is concluded with respect to all claims and parties. Signed by Honorable Joe Heaton on 10/09/2014. (lam)
IN THE UNITED STATES DISTRICT COURT FOR THE
WESTERN DISTRICT OF OKLAHOMA
SPECIALISTS INC., et al.,
CATERPILLAR INC., et al.,
Plaintiffs, Passenger Transportation Specialists Inc., d/b/a Red Carpet Charters
(“PTS”) and C & J Leasing #1, LLC, sued Caterpillar Inc, (“Caterpillar”), Caterpillar
Financial Services Corporation, d/b/a CAT Financial (“CAT Financial”), and Warren Power
& Machinery, Inc., d/b/a Warren CAT (“Warren CAT”), asserting claims against all
defendants for breach of implied and express warranty, fraudulent misrepresentation, breach
of contract and violation of the Oklahoma Consumer Protection Act. They also assert a
manufacturer’s products liability claim against Caterpillar. Plaintiffs’ claims arise out of
allegedly defective Caterpillar C13 engines that were installed in buses they purchased.
Plaintiffs have moved for summary judgment against Warren CAT and Caterpillar and all
defendants have moved for summary judgment on plaintiffs’ claims against them. Multiple
Daubert1 motions also have been filed. This order addresses the cross-motions for summary
judgment filed by plaintiffs and Warren CAT.
Summary judgment is appropriate only “if the movant shows that there is no genuine
Daubert v. Merrill Dow Pharm., Inc., 509 U.S. 579 (1993).
dispute as to any material fact and the movant is entitled to judgment as a matter of law.”
Fed.R.Civ.P. 56(a). In determining that Warren CAT’s motion should be granted and
plaintiffs’ denied, the court has viewed the evidence and any reasonable inferences that might
be drawn from it in the light most favorable to plaintiffs.
Jeff Polzien founded PTS, a motor coach charter business, in 1986. PTS has offices
in Oklahoma City, Tulsa and McKinney, Texas. C & J Leasing is an Oklahoma limited
liability company that apparently leases buses to PTS. Polzien is the president and sole
owner of PTS. He also owns C & J Leasing. In 2006 and 2007 PTS purchased forty buses
from ABC Bus Companies, Inc.2 The buses were powered by C13 ACERT diesel engines
(“C13 engines”) manufactured by Caterpillar. Van Hool manufactured the bus chassis and
CAT Financial financed some of the purchases. The engines were covered by standard
Plaintiff asserts that, prior to its purchases of the C13 engines, defendants, or the
“CAT Entourage,” actively sought out its business at trade shows and industry events.
Polzien was provided all expense paid trips to Caterpillar’s Peoria, Illinois plant and to
It is unclear why C & J Leasing is involved in this lawsuit. The complaint alleged that
“plaintiffs,” i.e. both PTS and C & J Leasing, bought the 40 buses involved here [Doc. #1, p. 3, ¶9].
But plaintiffs’ summary judgment motion asserts, as a matter of undisputed fact, that PTS bought
the 40 buses. Doc. #114, p. 8, ¶6. If that is so, then it is unclear what, if any, role C & J Leasing
has in this dispute. No basis for a claim by C & J Leasing is apparent. At the very least, there is
no basis shown for summary judgment in its favor on the present submissions. Therefore, and as
plaintiffs’ references to “plaintiffs” appear to mean PTS anyway, this order will refer to “plaintiff,”
meaning PTS, singular.
Belgium for a tour of the Van Hool bus plant. He testified that Caterpillar, CAT Financial
and Warren CAT “as a group” sold him “the package deal” and “acted as one entity to – to
convince [him] that the C13 and ACERT technology was the way to go.” Doc. #144-2, p.
2. Polzien stated he did “not distinguish between those three.” Id.
Plaintiff fails, though, to offer evidence that Warren CAT was present at the various
events where plaintiff contends representatives from the three defendants worked together
to negotiate the sale. See Doc. #114-2, pp. 2-6.3 Plaintiff has submitted evidence that Jeff
Headean, a Caterpillar sales manager, arranged for Polzien to meet with three high level
Warren CAT representatives after he told Headean that,“before [he] would ever spec CAT
engines, [he] would have to have a very good comfort level with Warren CAT.” Doc. #1141, pp. 7-8. The meeting, which lasted approximately one hour, took place sometime in the
summer of 2005. Polzien said he explained during the meeting how important it was to his
business to get any bus that was not working back on the road as quickly as possible. He
stated that, while plaintiff did not get “a written document with Warren CAT,” Warren CAT
representatives assured him they understood the needs of plaintiff’s business and made a
verbal commitment to plaintiff as to priority of service, timeliness of service and quality of
service. Doc. #114-1, p. 7.4 Polzien could not remember the names of the Warren CAT
Page references for briefs and exhibits are to the CM/ECF document and page number. For
example, page 269 of Volume 2 of Jeff Polzien’s deposition, which is Exhibit 2 to plaintiff’s brief
in support of its motion is referred to as Doc. #114-2, p. 5.
Although plaintiff states in its brief that the Warren CAT representatives “assured the
Plaintiffs again,” Doc. # 114, p. 7, ¶4 (emphasis added), there is no evidence that Warren CAT had
previously provided plaintiff with any assurances.
employees who attended the meeting. That is all plaintiff offers to show Warren CAT played
a “role in selling the C-13 engines to Plaintiffs.” See Doc. #144, p. 7.
Plaintiff asserts that over a six year operating period the forty charter buses powered
by the C13 engines experienced 344 incidents that resulted in costly downtime and loss of
use of the buses. Plaintiff claims “[t]he subject engines were defective at the time they
entered the market,” Doc. #114, p. 11, ¶ 24, and that repeated repairs were required “[d]ue
to systematic failures associated with the C-13 ACERT diesel engines.” Id. at 9, ¶8. Warren
CAT performed both service and repairs on the Caterpillar C13 engines in plaintiff’s buses.
In accordance with the service repair warranty that appeared on the back of each invoice,
Warren CAT warranted its service repairs against defective workmanship for ninety days
from the repair date. The warranty is noted on the front of the invoice and subject to certain
conditions, included the following:
(1) This warranty extends only to defective workmanship by Warren CAT.
Performance failures or any other operational difficulties whatsoever caused
by or related to defects in new or rebuilt parts are warranted only in
accordance with, and only to the extent of, any warranties given with respect
to such parts by the manufacturers or suppliers thereof. No independent or
additional warranty with respect to such parts is made or given by Warren
(6) Owner must notify Warren CAT immediately following the occurrence of
any performance failure or other operational difficulty subject to this warranty.
Failure to give such immediate notification will operate to release Warren
CAT from any liability under this warranty.
(8) THIS WARRANTY IS EXPRESSLY IN LIEU OF ANY OTHER
GUARANTEES OR WARRANTIES, EXPRESS OR IMPLIED,
INCLUDING ANY WARRANTY OF MERCHANTABILITY OR FITNESS
FOR A PARTICULAR PURPOSE. LIABILITY UNDER THIS WARRANTY
IS EXPRESSLY LIMITED TO THE COST OF REPAIR OR
REPLACEMENT LIABILITY. LIABILITY FOR ANY OTHER DAMAGES,
WHETHER CONSEQUENTIAL, DIRECT, INDIRECT OR OF ANY
NATURE WHATSOEVER, IS EXPRESSLY EXCLUDED.
Doc. #126-7, p. 3.
In 2009 Caterpillar withdrew its C13 and C15 diesel engines from the market.5
Plaintiff asserts that after that happened, “[t]he performance of Warren CAT further
diminished, as the timeliness of repairs greatly declined.” Doc. #114, p. 9, ¶ 10. Plaintiff
also complains that, despite completing numerous repairs to the buses, Warren CAT “never
cured the defects,” but just kept “putting a Band-Aid on the problems.” Id at ¶ 11. Instead
of investigating why the parts kept failing, plaintiff contends Warren CAT followed
Caterpillar’s instructions and repeatedly made the same repairs. Plaintiff asserts that Warren
CAT knew it was replacing defective parts with defective parts that would not permanently
fix or solve the problems.
Plaintiff asserts claims against Warren CAT for breach of contract, breach of implied
and express warranty, fraudulent misrepresentation and violation of the Oklahoma Consumer
Breach of Contract and Warranties
Plaintiff does not distinguish in its complaint between defendants but rather, with the
Warren CAT disputes that Caterpillar withdrew “all” C13 and C15 engines from the
market. The difference is immaterial for purposes of resolving the parties’ motions.
exception of the manufacturer’s products liability claim, asserts all claims against all
defendants. Similarly, in its brief plaintiff essentially makes the argument that the defendants
are jointly liable for any problems it incurred as a result of its purchase of the C13 engines.
Plaintiff admits that it did not enter into a written contract with Warren CAT, but
attempts to hold Warren CAT liable based on its agreement with ABC Bus Company, the
“third party distributor.” Doc. #114, p. 17. Plaintiff asserts that:
The signing of the papers, with ABC Bus Company, also constituted an
acceptance and full performance of a separate oral contract with Warren CAT.
The “CAT Family” was merely seeking a commitment to the engines from the
Plaintiffs, in return for their promise of a quality product, financing, as well as
prompt and reliable repair service from Warren CAT; they were not seeking
direct payment from Plaintiffs. . . . This is evidenced from Defendants
awareness that Plaintiffs planned to obtain the engines through “third parties.
Doc. #114, p. 19. Plaintiff does not support this argument with any citation of authority or
meaningful analysis. All plaintiff has offered is evidence that Polzien met once with some
Warren CAT representatives and they promised to provide plaintiff with quality and timely
service. While such promises might have helped persuade plaintiff to purchase the buses,
they are not a basis for a claim against Warren CAT if the engines turned out to be defective.
There simply is no evidence in the record on which a reasonable jury could hold Warren
CAT liable to plaintiff for anything to do with the C13 engines other than their maintenance
Indeed, plaintiff’s response brief seems in places to concede this: “Furthermore, it is not
disputed by either party that Defendant was not responsible for the design, manufacture, or
distribution of the subject engines.” Doc. #144, p. 10.
The only plausible contract claims plaintiff has against Warren CAT are based on
Warren CAT’s alleged failure to comply with its oral agreement to provide plaintiff with
timely and quality repair service, Doc. #1, ¶ 64, and Warren CAT’s alleged breach of its
service repair warranty, referred to in the complaint as “the implied warranty of good and
workmanlike performance applicable to the repair service of the engines.” Id. at ¶ 29.
To establish breach of contract, plaintiff must prove that (1) the parties formed a valid
contract, (2) defendant breached the contract, and (3) damages resulted from the breach.
Digital Design Grp., Inc. v. Info. Builders, Inc., 24 P.3d 834, 843 (Okla.2001).7 Although
it disputes it entered into an oral contract with plaintiff in the summer of 2005, Warren CAT
asserts that, if it did, the statute of frauds bars plaintiff’s oral contract claims as to most of
the buses. The court agrees.
Under Oklahoma law, an oral agreement that by its terms is not to be performed
within a year from its making is barred by the statute of frauds. 15 Okla. Stat. 136. Thirtytwo of the forty buses were not delivered until more than a year after plaintiff contends the
parties met and entered into their contract.8 Therefore, plaintiff’s oral contract claim as to
those buses is barred. However, even if the statute of frauds did not apply, plaintiff’s claim
as to the thirty-two buses would still fail for the same reason it fails as to the remaining eight
This is a diversity action so state law applies. As the parties cite Oklahoma law in their
briefs with respect to all claims and there is no apparent reason why the law of another state would
apply, Oklahoma law will be applied to plaintiff’s claims.
While Warren CAT raised the statute of frauds defense in its response brief, plaintiff could
have addressed the issue in a reply brief but did not. Under the local rules, leave of court is not
required to file a reply brief.
buses – a lack of proof that Warren CAT failed to perform timely or quality repairs.
The only evidence plaintiff offers that Warren CAT did not perform timely service
consists of Polzien’s testimony, in which he states: “The already poor performance at Warren
as far as timeliness of repairs got even worse. There was just absolutely no commitment.
I remember times driving by Warren CAT – which I don’t get by there very often. It’s not
a direction I go. But I can remember driving by there on a couple of occasions and thinking
it was my parking lot there was so many buses parked back there.” Doc. 114-1, p. 13. The
problem is plaintiff does not give any examples of the “already poor performance.” It also
did not offer any other basis from which a reasonable jury could conclude that Warren CAT
was dilatory when it worked on plaintiff’s buses. The only other evidence plaintiff cites
consists of the testimony of its damages expert relating to losses resulting from downtime.
That does not show, though, that the downtime was the result of unreasonable delay
attributable to Warren CAT.9
Similar evidentiary deficiencies exist with plaintiff’s claim that Warren CAT failed
to service and repair plaintiff’s C13 engines in a workmanlike manner. As Warren CAT
points out, plaintiff’s complaint really is not about the repair work that was done. Rather,
plaintiff’s argument is that, despite making numerous repairs to the buses, Warren CAT
“never cured the defects of the buses.” Doc. #114, p. 9, ¶11. Plaintiff again is attempting
to hold Warren CAT liable for the asserted defects in the C13 engine, rather than for the
Plaintiff also relies on the affidavits of Richard Hunt. Those affidavits have been stricken
by separate order. See Doc. #160.
repair work it performed.
Polzien testified that Warren CAT repeatedly made the same repairs without finding
out why the parts kept failing. However, the written warranty disclaims liability for defective
parts. It provides: “Performance failures or any other operational difficulties whatsoever
caused by or related to defects in new or rebuilt parts are warranted only in accordance with,
and only to the extent of, any warranties given with respect to such parts by the
manufacturers or suppliers thereof. No independent or additional warranty with respect to
such parts is made or given by Warren CAT.” Doc. #126-7, p. 3. As Warren CAT notes,
plaintiff’s repeated assertion that “[t]he subject engines were defective at the time they
entered the market” Doc. #114, p. 11, ¶24, is inconsistent with its claim that Warren CAT
is liable for failing to perform repair services in a workmanlike manner.
Plaintiff has not offered any argument which would avoid the impact of the disclaimer
language in the warranties, nor has it offered evidence sufficient to create a justiciable
question as to breach of the alleged oral contract.10 There is no admissible evidence from
which a reasonable jury could conclude Warren CAT failed to repair the buses in a timely
and adequate manner. Plaintiff’s motion for summary judgment on its breach of contract
claims will be denied and Warren CAT’s motion for summary judgment on those claims will
Plaintiff did not address Warren CAT’s argument regarding the contractual limitation of
remedy provision included in its service warranty. That provision limits recovery to the cost of
repair or replacement. While it would preclude most of the damages plaintiff seeks, it would not
completely bar plaintiff’s claims, if plaintiff could establish the other elements of its breach of
contract claims. See generally Elsken v. Network Multi-Family Sec. Corp., 49 F.3d 1470, 1473-75
(10th Cir. 1995).
The elements of fraudulent misrepresentation under Oklahoma law are: “1) a false
material misrepresentation, 2) made as a positive assertion which is either known to be false
or is made recklessly without knowledge of the truth, 3) with the intention that it be acted
upon, and 4) which is relied on by the other party to his (or her) detriment.” Bowman v.
Presley, 212 P.3d 1210, 1218 (Okla.2009). Each element must be “proved by clear and
convincing evidence.” Id. While there are several reasons why plaintiff’s fraudulent
misrepresentation claim fails, only one need be discussed. Plaintiff relies on the same
evidence to support both its breach of contract and its fraudulent misrepresentation claims.
For the reasons discussed earlier, plaintiff did not present sufficient evidence from which a
reasonable jury could conclude that Warren CAT failed to deliver on its promise to deliver
timely and quality repair service. Therefore plaintiff has not come forth with evidence
sufficient to create a fact question as to whether Warren CAT made a false material
representation regarding its intention to provide such service. Plaintiff’s motion for summary
judgment on its fraudulent misrepresentation claim will be denied and Warren CAT’s motion
for summary judgment on that claim will be granted.
Oklahoma Consumer Protection Act
To recover under the Oklahoma Consumer Protection Act (“OCPA”), a consumer
must show: “(1) that the defendant engaged in an unlawful practice as defined at 15 O.S.
(1991), § 753; (2) that the challenged practice occurred in the course of defendant's business;
(3) that the plaintiff, as a consumer, suffered an injury in fact; and (4) that the challenged
practice caused the plaintiff's injury.” Patterson v. Beall, 19 P.3d 839, 846 (Okla. 2000).
An unlawful practice includes “a misrepresentation, omission or other practice that has
deceived or could reasonably be expected to deceive or mislead a person to the detriment of
that person. Such a practice may occur before, during or after a consumer transaction is
entered into and may be written or oral.” 15 Okla. Stat. §§ 752(13); 753(20). Plaintiff bases
his OCPA claim against Warren CAT on its being part of the CAT entourage that “acted as
one entity to – convince me [Polzien] that the C-13 and ACERT technology was the way to
go,” its “awareness of the defective nature of the engines,” its continuing “to make the same
repairs time and time again” and it never having had “any intention in making the Plaintiffs
a top priority.” Doc. #114, pp. 22, 23. In other words, plaintiff relies on the same theory and
evidence to support this claim as he relies on for his other claims. For the same reasons
stated above it, too, fails. Plaintiff’s motion for summary judgment on its Oklahoma
Consumer Protection Act claim will be denied and Warren CAT’s motion for summary
judgment on that claim will be granted.
Accordingly, the motion for summary judgment filed by plaintiff Passenger
Transportation Specialists Inc., d/b/a Red Carpet Charters and C & J Leasing #1, LLC [Doc.
#114] is DENIED. The motion for summary judgment filed by Warren Power & Machinery,
Inc., d/b/a Warren CAT [Doc. #126] is GRANTED. Judgment will be entered in its favor
when the case is concluded with respect to all claims and parties. Fed.R.Civ.P. 54(b).
IT IS SO ORDERED.
Dated this 9th day of October, 2014.
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