Salt Lake City Corporation v. Sekisui SPR Americas et al

Filing 213

MEMORANDUM DECISION granting 180 Motion for Summary Judgment - No crossclaims remain against Sekisui; finding as moot 186 Motion to Strike. Signed by Judge Jill N. Parrish on 9/21/21. (alf)

FILED
2021 SEP 21
CLERK
U.S. DISTRICT COURT
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF UTAH
SALT LAKE CITY CORPORATION;
Plaintiff;
v.
SOUTHWEST PIPELINE AND
TRENCHLESS CORP.; SAFECO
INSURANCE COMPANY OF AMERICA,
INC.; and DOES 1–10;

MEMORANDUM DECISION AND
ORDER GRANTING MOTION FOR
SUMMARY JUDGMENT AND FINDING
MOTION TO STRIKE TO BE MOOT
Case No. 2:17-cv-01095-JNP-CMR
District Judge Jill N. Parrish

Defendants.
Salt Lake City Corporation hired Southwest Pipeline and Trenchless Corporation
(Southwest) to rehabilitate a sewer line. Southwest used components supplied by Sekisui Rib Loc
Australia Pty Ltd. (Sekisui Australia) and Sekisui SPR Americas, LLC (Sekisui Americas) to
complete the project. Salt Lake City sued Southwest, alleging that the rehabilitated sewer line was
leaking. Southwest filed a crossclaim for breach of contract against Sekisui Australia and Sekisui
Americas (collectively, Sekisui).
Before the court are Sekisui’s motion for summary judgment on Southwest’s breach of
contract crossclaim, ECF No. 180, and Southwest’s motion to strike an affidavit proffered by
Sekisui, ECF No. 186. The court GRANTS Sekisui’s motion for summary judgment. The court
finds Southwest’s motion to strike to be MOOT because the affidavit does not affect the outcome
of the motion for summary judgment.
BACKGROUND
Southwest repairs and rehabilitates underground pipes. Sekisui sells equipment and
material used to install a liner within existing underground pipes. This “trenchless” method of pipe

rehabilitation avoids the need to dig up and replace the pipe. Southwest entered into a contract
(Contract) with Sekisui to purchase goods and acquire licenses necessary to use Sekisui’s pipe
rehabilitation system. The contract consisted of two main documents: the Customer Specific Terms
and Conditions (Customer Specific Terms or CSTC) and the General Terms and Conditions for
Sale and Delivery (General Terms or GTCSD). 1
The preamble to the Customer Specific Terms stated that the “Buyer [Southwest] wishes
to purchase products and to receive know how from the Seller [Sekisui] and the Seller agrees to
provide to the Buyer products and to license know how and technology to the Buyer.” The Contract
required Southwest to purchase at least one complete set of equipment used to install the
rehabilitation system (installation equipment). CSTC § 5.2. The Contract also contained numerous
provisions establishing the terms and conditions for future purchases of “thermo-plastic profile
strip”—the material used to line the interior of underground pipes (liner material). See GTCSD
§ 1.
The Contract granted Southwest a free, non-exclusive license to use Sekisui’s “technology”
to rehabilitate underground pipes. CSTC § 4; GTCSD § 3. Southwest also had a “preferred status”
within its assigned territory of California, Oregon, Nevada, and Washington, meaning that Sekisui
could issue only one other license to use its rehabilitation system within this territory. CSTC § 7.1.

The Customer Specific Terms states that the Contract consists of five documents: (1) the
Customer Specific Terms and Conditions, (2) the General Terms and Conditions for Sales and
Delivery, (3) the Global Price List for Rehabilitation Materials, (4) the Charge List for Training
and Technical Support, and (5) the Purchase Contract Proposal for the installation equipment. The
Sekisui defendants represent that they were unable to find copies of the Global Price List for
Rehabilitation Materials, the Charge List for Training and Technical Support, or the Purchase
Contract Proposal, if these documents ever existed.
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Southwest could use the licensed technology outside of its assigned territory only if it obtained
written authorization from Sekisui. CSTC § 7.3; GTCSD § 4.4.
The Contract required Southwest to meet minimum purchase objectives each calendar year.
CSTC § 8.1. If Southwest failed to purchase the minimum dollar amount of installation equipment
and liner material within a particular year, it would lose its preferred status within its assigned
territory and the purchase objective amount would be reduced by 50%. CSTC § 8.2. If Southwest
failed to meet this reduced purchase objective in any subsequent year, Sekisui had the option to
terminate the contract. CSTC § 8.3.
The Contract required Southwest’s employees to complete a two-week training program in
order to become proficient in using the Sekisui technology. CSTC § 9; GTCSD § 3.7. Sekisui was
required to provide the two-week initial training program free of charge at Southwest’s place of
business. CSTC § 9.1. Southwest could also purchase additional training or onsite project support
services from Sekisui. CSTC § 9.2.
After Southwest and Sekisui entered into the Contract, Southwest submitted a bid to
rehabilitate a sewer line in Salt Lake City using Sekisui’s liner system. Southwest won the bid. On
December 31, 2009, Southwest submitted a purchase order to Sekisui for liner material to be used
in the Salt Lake City project. The material cost was $180,137.48. The purchase order also added
Salt Lake City sales tax in the amount of $12,339.42, for a total of $192,476.90. On January 21,
2010, Southwest submitted a second purchase order for $321,239.84 in liner materials for the Salt

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Lake City project. The Salt Lake City sales tax on this amount was $22,004.93, for a total of
$343,244.77. The combined total of the two purchase orders was $535,721.67. 2
In late 2012, Southwest finished the sewer line rehabilitation project. On December 17,
2012, Salt Lake City notified Southwest that it had discovered “a significant defect and leak in the
liner.” Over the next two and a half years, Southwest and the city formulated a number of plans to
fix the leak and Southwest made one unsuccessful attempt to repair the sewer line. On June 22,
2015, Southwest declined to make any further plans to repair the sewer line.
On May 10, 2017, Salt Lake City sued Sekisui. On November 8, 2017, the city amended
its complaint to add claims against Southwest. Meanwhile, Southwest sued Sekisui on October 2,
2017. That lawsuit was consolidated with crossclaims that Southwest had asserted in this lawsuit.
The court previously dismissed all of Southwest’s crossclaims except for its claim that
Sekisui breached two provisions of the Contract: (1) section 9.2 of the Customer Specific Terms,
which permitted Southwest to request additional installation training from Sekisui and (2) section
13.1 of the General Terms, which warranted that the liner material would be free from defects.
Sekisui now moves for summary judgment on Southwest’s breach of contract crossclaim, arguing
that it is barred by the four-year statute of limitations for a contract for the sale of goods. In support
of its motion, Sekisui submitted an affidavit prepared by its COO, Shintaro Shibata. Southwest
moved to strike the Shibata affidavit, asserting that it did not contain admissible evidence and
should be excluded because Sekisui did not designate Shibata as a witness in this case.

Sekisui initially argued that a third purchase order for project support services related to the
Contract. But Southwest cited evidence that this purchase order was associated with a different
product and was, therefore, not governed by the Contract. On summary judgment, the court
resolves this factual dispute in favor of Southwest as the nonmoving party and does not consider
the services purchase order.
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ANALYSIS
I.

SEKISUI’S MOTION FOR SUMMARY JUDGMENT
A. Legal Standard
Summary judgment is appropriate when “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 movant bears the initial burden of demonstrating the absence of a genuine dispute of
material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Once the movant has met this
burden, the burden then shifts to the nonmoving party to “set forth specific facts showing that there
is a genuine issue for trial.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986) (citation
omitted).
Summary judgment on a statute of limitations affirmative defense is proper if there are no
genuine disputes of material fact that would preclude the resolution of the statute of limitations
issue. See City of Wichita, Kan. v. U.S. Gypsum Co., 72 F.3d 1491, 1498 (10th Cir. 1996).
B. Predominant Purpose Test
Southwest received notice of the defects in the liner it installed in the sewer line on
December 17, 2012. The court has previously ruled that there is no dispute that the statute of
limitations began to run on Southwest’s breach of contract claims against suppliers of parts for the
sewer rehabilitation project soon after it was notified of the leaks because it had a duty to
investigate any claims arising from the defects. ECF No. 173, pp. 6–7; ECF No. 136, p. 25.
Southwest does not dispute that its breach of contract claim accrued in December 2012.
But the parties disagree as to whether the court may determine which statute of limitations
applies to Southwest’s breach of contract claim at the summary judgement stage of the litigation.
Sekisui argues that the undisputed facts show that the four-year statute of limitations for breach of
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a contract for the sale of goods should govern. See UTAH CODE § 70A-2-725(1). Southwest asserts
that disputes of fact prevent the court from determining whether the Contract was for the sale of
goods governed by the four-year limitations period found in the Utah Uniform Commercial Code
(UCC), or whether the six-year statute of limitations for a written contract should be applied to its
breach of contract claim. See id. § 78B-2-309(1)(b).
The UCC establishes a four-year statute of limitations for “[a]n action for breach of any
contract for sale.” Id. § 70A-2-725(1). “In [the UCC] unless the context otherwise requires
‘contract’ and ‘agreement’ are limited to those relating to the present or future sale of goods.
‘Contract for sale’ includes both a present sale of goods and a contract to sell goods at a future
time.” Id. § 70A-2-106(1). The term “goods” is defined as “all things (including specially
manufactured goods) which are movable at the time of identification to the contract for sale.” Id.
§ 70A-2-105(1). The installation equipment and the liner material at issue in this case are goods
because they were movable at the time that they were identified in the Contract.
Thus, the Contract is at least partially a “contract for sale” as defined by the UCC because
it relates to Sekisui’s sale of goods to Southwest. But the Contract also contains terms that are
unrelated to the sale of goods. For example, the Contract defines the parties’ obligations regarding
training services provided by Sekisui. The Contract also contains clauses granting Southwest a
license to use Sekisui’s technology within a defined territory. Southwest argues that the licensing
portions of the Contract do not relate to the sale of goods. Thus, the Contract is a mixed contract
for both goods and non-goods.
Utah employs the predominant purpose test to determine whether a mixed contract is
controlled by the UCC. Utah Loc. Gov't Tr. v. Wheeler Mach. Co., 199 P.3d 949, 956 (Utah 2008).
Under this test, the court reviews “the factual circumstances surrounding the negotiation,
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formation and contemplated performance of the contract to determine whether the contact is
predominantly or primarily a contract for the sale of goods.” Id. Courts also look to the language
of the contract to determine its primary purpose. BMC Indus., Inc. v. Barth Indus., Inc., 160 F.3d
1322, 1331 (11th Cir. 1998) (“Our starting point is the language of the Contract itself, which
provides a number of indicia that the parties intended a contract for goods rather than services.”);
Insul-Mark Midwest, Inc. v. Mod. Materials, Inc., 612 N.E.2d 550, 555 (Ind. 1993) (“To determine
whether the predominant thrust of a mixed contract is to provide services or goods, one first looks
to the language of the contract in light of the situation of the parties and the surrounding
circumstances.” (citation omitted)); 67 AM. JUR. 2D Sales § 32 (2021) (“In undertaking [a
predominant purpose] analysis, a court first looks to the language of the contract.”). Additionally,
courts consider the cost of the goods and non-goods 3 portions of the contract. De Filippo v. Ford
Motor Co., 516 F.2d 1313, 1323 (3d Cir. 1975) (“If, viewed as a whole, it can be concluded that
the essential bulk of the assets to be transferred qualify as ‘goods’, then it is appropriate to consider
the transaction a ‘contract for the sale of goods’.”); Insul-Mark Midwest, 612 N.E.2d at 555 (courts
examine “the costs involved for the goods and services, and whether the purchaser was charged
only for a good, or a price based on both goods and services”); St. Anne-Nackawic Pulp Co. v.
Research.-Cottrell, Inc., 788 F. Supp. 729, 734 (S.D.N.Y. 1992) (analyzing the total purchase price
attributable to goods and non-goods to determine a contract’s principal purpose). If a court

Most of the cases employing the predominant purpose test compare the goods provisions of a
contract to the services provisions of the contract. But “services represent just one example of a
non-good.” Vermillion State Bank v. Tennis Sanitation, LLC, 947 N.W.2d 456, 467 (Minn. Ct. App.
2020), review granted (Sept. 15, 2020). Because Southwest argues that some provisions of the
Contract at issue in this case are not related to either goods or services, the court uses the term
“non-goods” throughout this order.
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determines that the predominant purpose of a contract is the present or future sale of goods, the
UCC—including the four-year statute of limitations—governs the entire contract. Salt Lake City
Corp. v. Sekisui SPR Americas, LLC, 482 F. Supp. 3d 1177, 1188 (D. Utah 2020).
C. Predominant Purpose Analysis
To determine the predominant purpose of the Contract, the court first looks to the language
of the agreement. The terminology used in the Contract indicates that it is primarily a contract
related to the sale of goods. The title of the General Terms and Conditions for Sale and Delivery
emphasizes that the thrust of the Contract is to establish the terms and conditions for the sale and
delivery of the installation equipment and the liner material, both of which are goods. The
Customer Specific Terms and the General Terms repeatedly refer to Sekisui as the “Seller” and to
Southwest as the “Buyer.” These terms connote a contract for the sale of goods. See BMC, 160
F.3d at 1331 (holding that a contract’s title—“PURCHASE ORDER”—and the use of the terms
“Buyer” and “Seller” to refer to the parties of the contract indicated “that the parties had a contract
for goods in mind”); Fab-Tech, Inc. v. E.I. DuPont De Nemours & Co., 311 F. App’x 443, 445 (2d
Cir. 2009) (holding that the use of the terms “Buyer” and “Seller” to refer to the parties of a contract
signaled that the contract was for the sale of goods rather than services).
The terms of the Contract are also centered on the sale of goods. The Contract required
Southwest to immediately purchase at least one set of installation equipment from Sekisui. CSTC
§ 5.2. Southwest was also required to meet minimum annual purchase objectives for installation
equipment and liner materials sold by Sekisui. CSTC § 8.1. The Contract set the terms and
conditions for the sale of these goods to Southwest, including prices; CSTC § 2.1, GTCSD § 5;
the payment of sales taxes; GTCSD § 5.3; the terms of payment; CSTC § 2.4, GTCSD § 6; the
delivery time for the goods; GTCSD § 7; packing, transportation, and insurance for the goods;
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GTCSD §§ 8, 9; Southwest’s duty to inspect the goods upon delivery; GTCSD § 10; and warranties
that the goods would be free from defects; GTCSD §§ 12, 13. In short, the Contract set all of the
terms and conditions for present and future purchases of goods from Sekisui and set minimum
amounts that had to purchased each year. All subsequent purchase orders for specific items
incorporated these terms and conditions. GTCSD § 2.2.
Although the Contract contains provisions related to training and project management
services provided by Sekisui, the terms of the Contract related to the sale of goods clearly
predominate. In order to ensure that Southwest’s employees had sufficient knowledge and skill to
properly install Sekisui’s pipe rehabilitation system, the Contract required the employees to
complete a two-week training program provided by Sekisui. CSTC § 9.1; GTCSD § 3.7. Sekisui
was required to provide the training program free of charge at Southwest’s place of business. CSTC
§ 9.1. Southwest could also pay for additional training or onsite project support services. CSTC
§ 9.2. Viewing the Contract as a whole, these provisions are ancillary to the main focus of the
contract—Sekisui’s sale of goods to Southwest in order to complete underground pipe
rehabilitation projects. One of the key provisions of the Contract required Southwest to make
minimum purchases of goods each year. CSTC § 8.1. The initial training program, on the other
hand, was provided free of charge. Although, Southwest had the option to purchase additional
training and project management services from Sekisui, there is no evidence that it did so.
Comparing the relative costs associated with the services provisions of the contract ($0) with the
cost of the goods purchased just for the Salt Lake City sewer rehabilitation project ($535,721.67),
it is clear that that the goods portion of the contract predominates.
The Contract also contains provisions granting Southwest a license to use Sekisui’s
“Technology,” which the agreement defines as “certain patents, trademarks, and other intellectual
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property rights and know how in respect of the [liner material] and the [installation equipment].”
GTCSD § 1. The Contract granted Southwest “a non-exclusive license to make, use, and sell
products utilizing the Technology within the geographical area specified in the Customer Specific
Terms and Conditions.” GTCSD § 3.1. The Contract stated that no “fee or royalty shall be payable
by the Buyer [Southwest] in respect of the license.” GTCSD § 3.3. Sekisui also agreed that
Southwest would have a “preferred status” within the defined territory, meaning that Sekisui could
grant only one additional technology license within the region. CSTC § 7.1. In other words, the
Contract created a semi-exclusive sales relationship between Sekisui and Southwest. Upon
termination of the Contract, Southwest would lose the right to “use the Technology, Products,
Know-how and Trademarks.” GTCSD § 20.6.
Southwest argues that the technology license was a non-good and that the Contract’s
primary purpose was to convey the license. Southwest further contends that its preferred status
within its assigned territory was a non-good that conferred a significant competitive advantage by
limiting the number of contractors that could bid for projects using the Sekisui technology.
Southwest asserts that due to the technology license and preferred status provisions, the primary
purpose of the contract was for non-goods. The court disagrees for three reasons.
First, both Utah courts and courts from other jurisdictions have held that contracts defining
a continuing sales relationship are governed by the UCC. The Contract at issue here is akin to a
distributorship agreement. Southwest agreed to purchase liner material from Sekisui, which
Southwest would then install in a customer’s underground pipe. Southwest would charge the
customer for the cost of the liner material and its installation services. The Utah Supreme Court
has held that “[a]lthough a distributorship agreement is more involved than a typical sales contract,
it is subject to Utah’s Uniform Commercial Code.” Quality Performance Lines v. Yoho Auto., Inc.,
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609 P.2d 1340, 1342 (Utah 1980). The Tenth Circuit has also noted that “an overwhelming majority
of . . . jurisdictions have held that distributorship contracts are sales contracts and thus governed
by the UCC.” Pepsi-Cola Bottling Co. of Pittsburg v. PepsiCo, Inc., 431 F.3d 1241, 1255 (10th
Cir. 2005); accord Paulson, Inc. v. Bromar, Inc., 775 F. Supp. 1329, 1333 (D. Haw. 1991) (noting
that sixteen states, including Utah, have held that distributorship contracts are governed by the
UCC). Even distributorship contracts that contain an exclusivity clause are predominantly for the
sale of goods and are governed by the UCC. Sally Beauty Co. v. Nexxus Prod. Co., 801 F.2d 1001,
1005 (7th Cir. 1986) (collecting numerous cases holding that both exclusive and non-exclusive
distributorship contracts are goods contracts controlled by the UCC).
The reasoning of these cases applies to the Contract between Sekisui and Southwest. The
Contract is more complicated than a typical contract concerning a single transaction because, like
a distributorship agreement, it governs an ongoing sales relationship. But the core of the Contract
concerns the sale of goods from Sekisui to Southwest. Additionally, similar to an exclusive
distributorship contract, provisions granting Southwest a semi-exclusive license to use Sekisui’s
products within a defined territory do not alter the essential goods-centric nature of the Contract.
Second, the court disagrees with Southwest’s contention that the technology license and
preferred status provisions of the Contract are non-goods provisions. The technology license was
strictly limited to the application in the field of Pipe
Rehabilitation/Renovation, whereby “Rehabilitation/Renovation”
shall be understood as the in situ (in the pipe) manufacture of all
kinds of shape [sic] of tubular objects, for the renovation, repair,
lining, re-lining, renewal or rehabilitation of culverts, ducts,
pipelines, conduits, tunnels, bores and like structures, including the
provision of any service in connection with these activities
CSTC § 4.1. In other words, the technology license principally gave Southwest permission to use,
within a specific geographic area, the installation equipment and liner material for their intended
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purpose: to rehabilitate underground pipes by installing the liner material inside the existing pipe. 4
The license to use these goods is inseparably intertwined with the physical goods themselves. The
licensing provisions simply convey, with some limitations, the right any purchaser of goods
normally receives—the right to use the good. Because the license is integral to the goods Southwest
purchased from Sekisui, the portion of the Contract conveying this license is not severable from
the goods provisions of the agreement. See Colonial Life Ins. Co. of Am. v. Elec. Data Sys. Corp.,
817 F. Supp. 235, 239 (D.N.H. 1993) (finding that where the main object of a contract was to
provide a license to use a computer software product, which was a good, the predominant purpose
of the contract was the sale of goods); cf. Wheeler, 199 P.3d at 956 (where “hardware and software
elements are combined into a single unit—the computer system—prior to sale[,] . . . the computer
system is predominantly ‘goods’” (alterations in original) (quoting Neilson Bus. Equip. Ctr., Inc.
v. Italo V. Monteleone, M.D., P.A., 524 A.2d 1172, 1174 (Del. 1987)). Thus, the technology
licensing provisions are goods provisions because they are closely related to the sale of equipment
and liner material to Southwest. 5

Some of the technology license provisions, on the other hand, permitted Southwest to use the
know how conveyed through the mandatory training program. See GTCSD §§ 1, 20.6. This
licensing of know how is aligned with the services aspect of the Contract and, therefore, is a
non-good. But for the same reasons that the training provisions of the Contract are ancillary to the
goods provisions, the license to use Sekisui’s know how is not the principal purpose of the contract.

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Southwest argues that the licensing provisions predominate over the goods provisions of the
Contract because the goods purchased from Sekisui would be worthless without the license to use
the goods to rehabilitate underground pipes. But the converse is also true. A license to use the
goods would be equally useless without the goods themselves. Thus, Southwest’s argument
demonstrates the close connection between the technology license and the goods themselves and
further bolsters the court’s conclusion that the licensing clauses are goods provisions.
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The preferred status provision is likewise related to the sale of goods. This clause limited
Sekisui’s ability to sell goods to other contractors within the designated territory, creating a
semi-exclusive sales relationship with Southwest. Because this clause defines the parties’ rights
regarding the sale of goods, it is a goods provision.
Third, even if the technology license and preferred status provisions could be considered
non-goods provisions, these clauses would not predominate over the goods provisions of the
Contract. The technology license was provided at no additional charge, GTCSD § 3.3, while the
total cost of the goods ordered for the Salt Lake City project alone was $535,721.67. Moreover,
although Sekisui had the option to provide the exclusive right to use its goods within a territory in
exchange for an “Exclusivity Fee,” GTCSD § 4.1, the parties chose to enter into a semi-exclusive
sales relationship for free. Thus, the comparative costs associated with the goods provisions and
the licensing and preferred status provisions demonstrate that the goods provisions predominate. 6
D. Duchaineau Affidavit
Southwest argues that the affidavit of its President, Justin Duchaineau, creates a dispute of
material fact that prevent the court from determining that the main purpose of the contract was for
the sale of goods. In his affidavit, Duchaineau declares: “The predominant purpose of the
[Contract] was for Southwest to obtain the right to use the Sekisui Technology and to establish

At oral argument, Southwest cited Newcourt Financial USA, Inc. v. FT Mortgage Companies,
161 F. Supp. 2d 894 (N.D. Ill. 2001) as the best case supporting its contention that disputes of
material fact preclude summary judgment. Newcourt Financial is not binding authority. Moreover,
it is distinguishable. The contract at issue in that case was for both products and services. Id. at
898. But the price schedule provided to that court did not distinguish between products and
services. Without undisputed evidence regarding the specific cost of products and services
provided under the contract, the Newcourt Financial court could not determine whether goods or
services predominated. Id. Here, however, there is no such ambiguity. The purchase orders
provided to the court are unambiguously for goods alone.
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Southwest as a licensed distributor authorized to use the Sekisui Technology . . . .” He further
asserts:
Southwest understood and intended that payment for the right to use
the Technology was through payment for the quantities of liner
material used in the application of the Technology on Southwest
projects. The [Contract] does not break out any specific amount for
payment for the right to use the Technology. Southwest understood
and intended that payment of invoices for the material was
predominantly for use of the Technology because absent the right to
use the Technology, the [liner] material had little or no value to
Southwest.
Based upon this affidavit, Southwest asserts that the predominant purpose of the Contract can only
be determined by the court or the jury after hearing evidence on this issue.
The court disagrees. In light of Utah caselaw holding that distributorship contracts are
governed by the UCC, Quality Performance Lines, 609 P.2d at 1342, Southwest cannot create a
dispute of material fact through an affidavit asserting a party’s understanding as to the predominant
purpose of a contract. Moreover, Duchaineau’s conclusory assertion that the predominant purpose
of the Contract was to obtain a license to use Sekisui’s technology is not sufficient to create a
legitimate dispute of material fact. To determine the predominant purpose of a contract, one of the
factors that courts consider is “the factual circumstances surrounding the negotiation, formation
and contemplated performance of the contract.” Wheeler, 199 P.3d at 956. In other words, evidence
of the parties’ shared understanding of a contract’s principal purpose at the time of its formation is
relevant to this determination. Cf. Nielsen v. Gold’s Gym, 78 P.3d 600, 602 (Utah 2003) (“It is
fundamental that a meeting of the minds on the integral features of an agreement is essential to the
formation of a contract.” (citation omitted)). But the Duchaineau affidavit is devoid of any facts
pertaining to the negotiation, formation, or contemplated performance of the contract that could
shed light on the parties’ mutual understanding of the Contract’s predominant purpose when it was
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formed. His unsubstantiated conclusion regarding the predominant purpose of the contract does
not create a genuine dispute of fact. Cf. Mind & Motion Utah Invs., LLC v. Celtic Bank Corp., 367
P.3d 994, 1005–06 (Utah 2016) (holding that a party to a contract may not prove a latent ambiguity
by submitting a self-serving affidavit setting forth that party’s belief as to what the contract means).
Duchaineau’s conclusory assertion that Southwest understood that payments for goods
supplied by Sekisui were predominantly to compensate Sekisui for the technology license rather
than the goods themselves is similarly unavailing. He does not provide any facts regarding the
negotiation and formation of the Contract that would evidence the parties’ mutual intent regarding
the purported licensing fees. And, in fact, Southwest’s claimed understanding regarding the nature
of the payments for Sekisui’s products is belied by the purchase orders generated by Southwest.
The purchase orders calculate sales taxes based upon the entire purchase price of the goods
ordered, indicating that amount was solely for goods and not partially for licensing fees.
Under applicable caselaw, Duchaineau’s self-serving affidavit does not create a genuine
dispute of material fact as to the predominant purpose of the contract.
E. Conclusion
Analyzing the terms of the Contract and the relative costs associated with the goods and
non-goods provisions, the court concludes that the Contract is principally for the present and future
sale of goods. The economic reality underpinning the Contract is that Sekisui made money selling
its goods to Southwest, which obtained the goods necessary to complete projects, including the
Salt Lake City project. Thus, Southwest’s claim for breach of this Contract is governed by the
UCC’s four-year statute of limitations. Southwest indisputably filed its breach of contract claim
after the UCC statute of limitations had run. Accordingly, Sekisui is entitled to summary judgment
on Southwest’s breach of contract crossclaim.
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II.

SOUTHWEST’S MOTION TO STRIKE
Southwest moved to strike certain statements made in the Shibata affidavit proffered by

Sekisui, asserting that the statements were not admissible and that they should be excluded because
Sekisui did not designate Shibata as a witness in this case. At oral argument, Southwest clarified
that it did not seek to exclude any of the documents attached to the affidavit.
The court did not rely on any of the statements made in the Shibata affidavit in ruling on
the motion for summary judgment. Accordingly, the motion to strike the affidavit is moot.
CONCLUSION AND ORDER
The court orders as follows:
(1) The court GRANTS Sekisui’s motion for summary judgment. ECF No. 180. No
crossclaims remain against Sekisui.
(2) The court finds Southwest’s motion to strike to be MOOT. ECF No. 186.
DATED September 21, 2021.
BY THE COURT

______________________________
Jill N. Parrish
United States District Court Judge

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