Ruiz Fajardo Ingenieros Asociados S.A.S. v. Flow International Corporation

Filing 42

ORDER granting in part and denying in part Defendant's 32 Motion for Partial Summary Judgment signed by Judge Richard A. Jones. (TH)

1

HONORABLE RICHARD A. JONES

2
3
4
5
6
7
8
9

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF WASHINGTON
AT SEATTLE

10
11
12
13

RUIZ FAJARDO INGENIEROS
ASOCIADOS S.A.S.,

CASE NO. C16-1902 RAJ
ORDER

14

Plaintiff,

15

v.

16
17

FLOW INTERNATIONAL
CORPORATION,

18

Defendants.

19
20
21
22
23
24
25
26

This matter comes before the court on Defendant Flow International Corporation’s
(“Defendant” or “Flow”) Motion for Partial Summary Judgment (“Motion”). Dkt. # 32.
Plaintiff Ruiz Fajardo Ingenieros Asociados S.A.S. (“Plaintiff” or “Ruiz Fajardo”) has
opposed this Motion, and Defendant has filed a Reply. Dkt. ## 34, 37.
Plaintiff has also filed a “Praecipe” to a declaration attached to its Response, and
Defendant filed a Surreply addressing this filing. Dkt. ## 39-41.

27

ORDER- 1

For the reasons stated below, the Court GRANTS IN PART AND DENIES IN

1

2 PART Defendant’s Motion.
I. BACKGROUND

3

Defendant Flow is a Washington-based corporation which manufactures and sells

4

5 industrial waterjet cutting machines. Plaintiff Ruiz Fajardo is a Colombian engineering
6 firm that provides metalworking services including prefabrication, installation, and
7 consulting. Dkt. # 1 at ¶ 8. On November 5, 2012, the parties entered into an agreement
8 (the “Contract”) for the purchase of a Mach 4030c waterjet cutting machine (the
9 “Machine”) for $437,830.00, after Tulio Ruiz, Plaintiff’s principal and legal advisor
10 traveled to Kent, Washington to execute the Contract. Dkt. # 33, Ex. A at 2, 4-5. In
11 January 2013, after Plaintiff agreed to purchase the Machine, but before payment was
12 made, Defendant sent the complete Contract to Plaintiff along with an invoice for the cost
13 of the Machine, which Plaintiff signed after translating the Contract. Id. at Ex. B, 63:514 66:23.
15

The Contract contains three provisions applicable here. First, in paragraph 1(a) in

16 the Terms and Conditions, on page 22 of the Contract, the Contract contains a clause
17 limiting the remedies Plaintiff may pursue, which states:
18
19
20
21

Flow warrants the Equipment to be free from defects in workmanship and
materials for the period specified on the quotation, except that spare parts
shall be warranted for a one-year period…. Flow’s liability is limited to
repair or replacement of the Equipment and the determination regarding
which of these is appropriate shall be at Flow’s sole discretion.

22 Dkt. # 33, Ex. A at 24. Second, in paragraph 2, the contract contains a clause disclaiming
23 warranties other than the one expressly contained in paragraph 1(a):
24

2. LIMITATION OF WARRANTIES

25

EXCEPT AS PROVIDED IN SECTION 1 ABOVE, FLOW MAKES NO
OTHER WARRANTIES TO BUYER, EXPRESS OF IMPLIED, AND
HEREBY EXPRESSLY DISCLAIMS ANY WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.

26
27

ORDER- 2

1 Id. at 25. Finally, in paragraph 9, the Contract limits the damages available to Ruiz
2 Fajardo, and restates the remedy limitation to repair and replacement:
3

9. LIMITATION OF DAMAGES

4

FLOW SHALL NOT BE LIABLE FOR INCIDENTAL OR
CONSEQUENTIAL DAMAGES INCLUDING, BUT NOT LIMITED TO,
LOSS OF PROFITS, LOSS OF USE, LOSS OF PRODUCTION,
DAMAGES TO OTHER EQUIPMENT, COST OF CAPITAL OR
INTEREST. FLOW’S LIABILITY IS LIMITED TO REPAIR OR
REPLACEMENT OF THE EQUIPMENT AND THE DETERMINATION
REGARDING WHICH OF THESE IS APPROPRIATE SHALL BE AT
FLOW’S SOLE DISCRETION.

5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22

Id. The Contract also states that “[t]he validity, interpretation and performance of
the Agreement shall be governed by the laws of the State of Washington in effect at the
time of contracting.” Id. at ¶ 14(a).
Plaintiff paid for the Machine, and Defendant shipped the Machine to Plaintiff in
early May 2013. Id. at 2. The Machine was installed by Flow technicians at Ruiz
Fajardo’s facility outside Bogota, Colombia in fall 2013. Dkt. # 33, Ex. F. After
receiving the Machine, Plaintiff contends it began experiencing several significant system
problems with the Machine, including: (1) startup issues, including the failure of the
automatic start mechanism requiring a manual start-up process; (2) software unable to
produce accurate cutting time, requiring Plaintiff to perform simulations within the
Machine itself; (3) a cutting speed that was lower than what Defendant described; and (4)
poor durability of parts. See Dkt. # 34 at 6-7; Dkt. # 35, Exs. 8-14. Plaintiff also
contends that Defendant did not keep any spare replacement parts in South America,
leading to further delays in repairs. Id. 1 Plaintiff describes multiple efforts by Defendant

23
24
1

In support of these claims, Plaintiff submits translated versions of e-mail conversations

25 between the two parties. Dkt. # 35, Exs. 8-14. Plaintiff later submitted a Praecipe attaching
26 affidavits from translators attesting to the accuracy of these translations. Dkt. # 39. Defendant’s
Surreply and motion to strike, which address the reliance on these documents, are addressed
27 below.

ORDER- 3

1 to repair the issues with the Machine, the majority of which were unsuccessful in
2 definitively resolving the issues with the Machine. Defendant’s repair efforts included
3 sending technicians to Columbia to help troubleshoot issues, and delivery of software and
4 replacement parts. Id. According to Plaintiff, it took roughly 15 months to resolve the
5 start-up issues, and the other issues remained unresolved until after the filing of this
6 lawsuit.
7

In February 2016, according to Plaintiff, the Machine stopped working. See, e.g.,

8 Dkt. # 35, Ex. 8. Plaintiff contacted Defendant for technical service, and Defendant sent
9 a representative who confirmed that the actuator needed to be replaced; Plaintiff contends
10 it was not able to obtain this replacement part from Defendant. Id.; Dkt. # 34 at 13.
11 Plaintiff then filed the current lawsuit in December 2016. Dkt. # 1. After the lawsuit
12 was filed, Flow agreed to send technicians to Colombia to inspect the machine and
13 address any issues, which they did during the spring and summer of 2017. Dkt. # 33, Ex.
14 E; Dkt. # 35, Ex. 8. Defendant repaired the Machine in July 2017. Dkt. # 35, Ex. 14.
15 Defendant installed new “Rev J” software and repairs, which Plaintiff contends fixed
16 most issues, though issues with Z-axis cuts still persist. Id. Plaintiff continues to use the
17 Machine as part of its business. Dkt. # 33, Exs. B, G.
II. LEGAL STANDARD

18
19

Summary judgment is appropriate if there is no genuine dispute as to any material

20 fact and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P.
21 56(a). The moving party bears the initial burden of demonstrating the absence of a
22 genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986).
23 Where the moving party will have the burden of proof at trial, it must affirmatively
24 demonstrate that no reasonable trier of fact could find other than for the moving party.
25 Soremekun v. Thrifty Payless, Inc., 509 F.3d 978, 984 (9th Cir. 2007). On an issue where
26 the nonmoving party will bear the burden of proof at trial, the moving party can prevail
27 merely by pointing out to the district court that there is an absence of evidence to support

ORDER- 4

1 the non-moving party’s case. Celotex Corp., 477 U.S. at 325. If the moving party meets
2 the initial burden, the opposing party must set forth specific facts showing that there is a
3 genuine issue of fact for trial in order to defeat the motion. Anderson v. Liberty Lobby,
4 Inc., 477 U.S. 242, 250 (1986). The court must view the evidence in the light most
5 favorable to the nonmoving party and draw all reasonable inferences in that party’s favor.
6 Reeves v. Sanderson Plumbing Prods., 530 U.S. 133, 150-51 (2000).
7

However, the court need not, and will not, “scour the record in search of a genuine

8 issue of triable fact.” Keenan v. Allan, 91 F.3d 1275, 1279 (9th Cir. 1996); see also,
9 White v. McDonnel-Douglas Corp., 904 F.2d 456, 458 (8th Cir. 1990) (the court need not
10 “speculate on which portion of the record the nonmoving party relies, nor is it obliged to
11 wade through and search the entire record for some specific facts that might support the
12 nonmoving party’s claim”). The opposing party must present significant and probative
13 evidence to support its claim or defense. Intel Corp. v. Hartford Accident & Indem. Co.,
14 952 F.2d 1551, 1558 (9th Cir. 1991). Uncorroborated allegations and “self-serving
15 testimony” will not create a genuine issue of material fact. Villiarimo v. Aloha Island
16 Air, Inc., 281 F.3d 1054, 1061 (9th Cir. 2002); T.W. Elec. Serv. V. Pac Elec. Contractors
17 Ass’n, 809 F. 2d 626, 630 (9th Cir. 1987).
III. DISCUSSION

18
19

As a preliminary matter, Defendant’s Reply includes a motion to strike certain of

20 Plaintiff’s exhibits that did not, in Plaintiff’s original filing, include a translator’s
21 affidavit. Dkt. # 37 at 16. Plaintiff then filed a “Praecipe” after Defendant filed its Reply
22 attaching a number of translators’ affidavits attesting to the accuracy of those translated
23 exhibits. Dkt. Dkt. # 39. This prompted Defendant to follow with a Surreply, arguing
24 the Court should strike this Praecipe. Dkt. # 41.
25

Under W.D. Wash. Local Rule 7(m), if an error is discovered, a party may file a

26 Praecipe with the new documents to support a previous filing which sets forth “why the
27 document was not included with the original filing.” Plaintiff’s Praecipe states it exists to

ORDER- 5

1 provide the Court with translator’s affidavits for several exhibits attached to Plaintiff’s
2 declaration that were translated to English. Dkt. # 39. Plaintiff’s Praecipe does not
3 change the character of the relevant exhibits in Plaintiff’s Declaration. If Defendant had
4 concerns about the accuracy of the translations, it could have raised them in its Reply or
5 Surreply; instead, Defendant focused its efforts on claiming that Plaintiff hadn’t properly
6 authenticated its translations with translators’ affidavits. Dkt. # 37 at 16. Because
7 Defendant has failed to adequately articulate any prejudice that could result from
8 allowing Plaintiff’s Praecipe to stand, the Court DENIES Defendant’s request to strike
9 these exhibits.
10

In its Motion, Defendant argues that it is entitled to summary judgment on specific

11 portions of Plaintiff’s claims. Specifically, Defendant seeks summary judgment on the
12 following: (1) whether the consequential damages limitation contained in the Contract is
13 enforceable; (2) whether the only warranty in which Plaintiff can base its breach of
14 warranty claim is the single express limited warranty contained in the Contract, and if so,
15 whether the terms of the warranty mandate that the warranty extends for only one year
16 after the date of shipment; and (3) whether Plaintiff revoked its acceptance of the
17 Machine. Dkt. # 32 at 5-6. The Court addresses each issue in turn.
18
19

A. Limitation of Consequential Damages
Defendant requests summary judgment on the issue of whether Plaintiff is bound

20 by the Contract’s limitation on seeking consequential damages. Dkt. # 32 at 9-14. Under
21 Washington law, contractual limitations on damages are generally valid unless they are
22 unconscionable. M.A. Mortenson Co. v. Timberline Software Corp., 140 Wash. 2d 568,
23 585, 998 P.2d 305, 314 (2000). Limitations of liability for incidental and consequential
24 damages in purely commercial transactions are prima facie conscionable, and the burden
25 of establishing unconscionability falls on the party attacking the clause. Am. Nursery
26 Prods., Inc. v. Indian Wells Nursery, 797 P.2d 477, 480-81 (1990); Puget Sound Fin.,
27

ORDER- 6

1 L.L.C. v. Unisearch, Inc., 146 Wash. 2d 428, 438 n. 12, 47 P.3d 940, 944 (2002) (noting
2 that exclusionary clauses and liability limitation clauses are subject to the same analysis).
3

Both parties recognize that the Contract contains a limitations on damages clause,

4 and Plaintiff does not contend that this limitation is unconscionable. Rather, Plaintiff
5 contends that it is not bound by this clause because the Contract’s limited repair-or6 replace remedy failed its essential purpose. Dkt. # 34 at 15-20. Washington’s Uniform
7 Commercial Code permits parties to a contract to agree to “limit or alter the measure of
8 damages recoverable under this Article, as by limiting the buyer’s remedies to return of
9 the goods and repayment of the price or to repair and replacement of nonconforming
10 goods or parts.” RCW 62A.2-719(1). This section also provides, however, that “[w]here
11 circumstances cause an exclusive or limited remedy to fail of its essential purpose,
12 remedy may be had as provided in this Title.” RCW 62A.2-719(2). Under the
13 Washington UCC, a limitation of remedy clause is ineffectual when it deprives a party of
14 the substantive value of its bargain. RCW 62A.2–719. Limited remedies clauses fail of
15 their essential purpose when, for instance, “the seller or other party required to provide
16 the remedy, by its action or inaction, causes the remedy to fail.” Marr Enterprises, Inc. v.
17 Lewis Refrigeration Co., 556 F.2d 951, 955 (9th Cir. 1977) (citing with approval cases
18 which hold that a remedy fails of its essential purpose where “the seller fail[s] to replace
19 or repair in a reasonably prompt and non-negligent manner”). Courts in this circuit and
20 others generally hold that whether a limitation fails its essential purpose is an issue of fact
21 for the jury. See, e.g., Tokyo Ohka Kogyo Am., Inc. v. Huntsman Propylene Oxide LLC,
22 35 F. Supp. 3d 1316, 1330 (D. Or. 2014) (citing cases).
23

Here, the Contract limited Plaintiff’s available remedies to “repair or replacement

24 of the Equipment and the determination regarding which of these is appropriate shall be
25 at [Defendant]’s sole discretion.” Dkt. # 33, Ex. A, at p. 25, ¶ 9. The same clause states
26 that Defendant “shall not be liable for incidental or consequential damages including, but
27 not limited to, loss of profits, loss of use, loss of production, damage to other equipment,

ORDER- 7

1 cost of capital or interest.” Id. Plaintiff’s claims are essentially predicated on allegations
2 that Flow’s repair efforts were delayed and deficient. Dkt. # 1 at 12-13. Plaintiff has
3 introduced substantial evidence to this effect in the form of Defendant’s own statements
4 admitting delays in repair and deficiencies in some aspects of the product, such as poor
5 quality parts, and software that was required for the Machine to function properly that
6 was not present until well after the Machine was delivered, despite years of Defendant’s
7 repair efforts. See Dkt. # 35, Exs. 8-13. For instance, Plaintiff has introduced evidence
8 that it took four years for Defendant to provide Plaintiff with the software necessary to
9 resolve the cutting time simulation issue. Dkt. # 35, Ex. 8 at 12. Under Washington
10 State law, a limited repair warranty is deemed ineffective and fails of its essential purpose
11 if the breaching manufacturer is unable to repair a purported defect within a reasonable
12 time. Milgard Tempering, Inc. v. Selas Corp. of Am., 902 F.2d 703, 707-08 (9th Cir.
13 1990). In Milgard, for instance, the Ninth Circuit held that under Washington law, a
14 glass tempering furnace seller’s failure to repair a furnace after two and one-half years
15 made the contractual repair-or-replace remedy provision ineffective and invalidated the
16 contractual consequential damages exclusion. Milgard, 902 F.2d at 703. Similarly, a
17 jury could reasonably find, given this evidence, that Defendant failed to repair the
18 Machine in a reasonable time, and because of this failure the limitations of remedy clause
19 fails its essential purpose – to provide Plaintiff with an adequate remedy in the event
20 repairs were needed. Should the limitations of remedies clause then fail, so too would the
21 limitation on seeking consequential damages.
22

Defendant largely does not contest Plaintiff’s allegations of delayed or deficient

23 repairs, but instead relies heavily on two out-of-circuit cases, Lewis Refrigeration Co. v.
24 Sawyer Fruit, Vegetable & Cold Storage Co., 709 F.2d 427, 435 (6th Cir. 1983) and ADT
25 Sec. Servs. Inc v. Envision Telephony Inc., No 07-CV-01234-LTB-CBS, 2008 WL
26 5064268 (D. Colo. Nov. 21, 2008), to argue that regardless of whether the limited remedy
27 in the Contract failed its essential purpose, the limitation on damages remains effective.

ORDER- 8

1 Dkt. # 32 at 10-14. Both cases analyzed Washington law and held that the failure of a
2 contract’s limited remedy does not render a limitation on consequential damages invalid.
3 Lewis Refrigeration, for instance, reasoned that “Section 2–719(3) is meant to allow
4 freedom in excluding consequential damages unless a consumer is involved in the
5 contract.” Lewis Refrigeration, 709 F.2d at 435. Defendant also submits additional cases
6 from other circuits and states following this approach. Dkt. # 32 at 12; Dkt. # 37 at 8.
7 However, the Court is not bound by these cases and does not find them persuasive here.
8 Lewis Refrigeration, for instance, was explicitly disclaimed by the Ninth Circuit in
9 Fiorito Bros., Inc. v. Fruehauf Corp., 747 F.2d 1309, 1314–15 (9th Cir. 1984) (“We are
10 not bound by Lewis Refrigeration, of course, and decline to follow it”). ADT is an
11 unpublished Colorado case, disclaimed key decisions under Washington law, and has
12 never been cited approvingly in this Circuit. Defendant has not submitted compelling
13 Ninth Circuit or Washington authority that would deter this Court from applying the
14 analytical framework set forth by the Ninth Circuit in Milgard. The Court believes,
15 following Milgard, that a case-by-case approach is necessary and proper to determine
16 whether in any given contract the limitations of remedy clause failed it essential purpose.
17 In this case, Plaintiff has submitted sufficient evidence to survive summary judgment that
18 the remedy provisions and Defendant’s repair efforts “caused a loss which was not part of
19 the bargained-for allocation of risk.” Milgard, 902 F.2d at 709. As the Milgard court
20 reasoned, Plaintiff did not pay $437,830 “in order to participate in a science experiment.”
21 Id.
22

Ultimately, the Court finds that there is a genuine issue of material fact as to

23 whether the remedy limitation in the Contract failed its essential purpose, and whether the
24 Contract’s limitation on consequential damages is valid. Accordingly, the Court
25 DENIES Defendant’s Motion on this point.
26
27

ORDER- 9

1
2

B. Limited Warranty
Defendant seeks summary judgment on two additional issues related to Plaintiff’s

3 breach of warranty claim: (1) whether Plaintiff is limited to claiming breach of the
4 express limited warranty contained within the Contract; and (2) whether the Contract’s
5 limited warranty extended only one year after the date of shipment. Dkt. # 32 at 10-12.
6 The Court will address each in turn.
7

First, the Court agrees with Defendant that the only warranty identified in

8 Plaintiff’s only Complaint (Dkt. # 1) is the limited warranty contained in the Contract.
9 Dkt. # 32 at 15-16. The Court further notes that the limited warranty disclaimed all other
10 warranties other than the limited warranty contained in the Contract. Dkt. # 33, Ex. A at p.
11 24, ¶ 2; see also Dkt. # 1 at p. 3, ¶ 10. Plaintiff responds that the disclaimer contained in the
12 Contract was ineffective, and for the first time on summary judgment states its intention
13 to rely on the implied warranty for fitness for a particular purpose. Dkt. # 34 at 20-24.
14 The Court finds that Plaintiff’s Opposition relies on new facts and legal theories that were
15 not set forth in the Complaint. Plaintiff’s Complaint makes no mention of any implied
16 warranty claim or any pre-contractual discussions between the parties. The Court is
17 disinclined to permit them at this juncture. See Navajo Nation v. U.S. Forest Serv., 535
18 F.3d 1058, 1080 (9th Cir. 2008) (en banc) (when the necessary factual allegations to state
19 a claim are not in the complaint, “raising ... [these allegations] in a summary judgment
20 motion is insufficient to present the claim to the district court”). Defendant also presents
21 evidence that throughout the litigation, the only warranty that Plaintiff asserted would
22 form the basis for its claim was the limited warranty in the Contract. Dkt. # 38-1 at p. 4,
23 ¶ 6. Changing case theories for the first time in summary judgment fails to provide
24 Defendant with reasonable notice and opportunity to take discovery on this new claim,
25 and frustrates the resolution of an already significantly delayed litigation.
26

Even if this Court were to consider Plaintiff’s position, it would be inclined to

27 reject it. “Where the seller at the time of contracting has reason to know any particular

ORDER- 10

1 purpose for which the goods are required and that the buyer is relying on the seller’s skill
2 or judgment to select or furnish suitable goods, there is . . . an implied warranty that the
3 goods shall be fit for such purpose.” RCW 62A.2-315. However, as discussed above, the
4 Contract contains a clause explicitly disclaiming this, and other, implied warranties.
5 Warranty disclaimers are unenforceable enforceable if they are unconscionable. Puget
6 Sound Financial, L.L.C. v. Unisearch, Inc., 146 Wash.2d 428, 438, 47 P.3d 940 (2002).
7 Courts use two different tests to determine whether a warranty disclaimer is
8 unconsciobale in a commercial transaction: (1) the Berg test articulated in Berg v.
9 Stromme, 79 Wash.2d 184, 484 P.2d 380 (1971); or (2) a totality of the circumstances
10 approach. American Nursery Products, Inc. v. Indian Wells Orchards, 115 Wash.2d 217,
11 222, 797 P.2d 477, 481 (1990). Under the stricter Berg test, warranty disclaimers must
12 be both explicitly negotiated and set forth with particularity. American Nursery
13 Products, 115 Wash.2d at 223. However, under the “totality of the circumstances
14 approach,” which applies purely commercial transactions, the presumption is that the
15 limitation is prima facie conscionable unless the party seeking to invalidate the liability
16 limitation shows otherwise. Id. (citing Schroeder v. Fageol Motors, Inc., 86 Wash.2d
17 256, 262, 544 P.2d 20 (1975)). The totality of the circumstances approach applies when
18 there is no evidence of unfair surprise in the business dealing, while the Berg test applies
19 when there is unfair surprise. Id. No unfair surprise exists when negotiations are
20 “between competent persons dealing at arm’s length, with no claim of an adhesion
21 contract, when the contract contains a specific disclaimer and when the contract language
22 is clear.” Id.
23

As Defendant notes, the Berg rule is most properly applied in situations involving

24 non-commercial consumers or unfair surprise, neither of which apply to the present
25 dispute. Dkt. # 37 at 10-11. The record indicates that the Contract was formed between
26 two sophisticated business entities engaging at arm’s length. While Plaintiff argues this
27 clause is unfair, it does not argue it was surprised or did not have an opportunity to

ORDER- 11

1 review the terms before it signed the Contract. Under the totality of the circumstances,
2 the Court finds that Plaintiff has failed to show that the warranty disclaimer in the
3 Contract was unconscionable. Accordingly, Plaintiff’s newly-asserted claim for an
4 implied warranty would be barred by the Contract’s disclaimer.
5

Second, the Court also agrees with Defendant that by its terms, the warranty

6 contained in the Contract extends only one year from the date in which the Machine was
7 shipped, as Plaintiff concedes that it did not send any representative to participate in a
8 system maintenance course per the terms of the Contract, which by its terms would have
9 extended the warranty another year. Dkt. # 33, Ex. A (Contract) at 1-2. Plaintiff does not
10 contest the fact that it did not attend the training that would have extended the warranty;
11 rather, Plaintiff contends that both parties operated under the assumption that the
12 warranty period would not start until Defendant delivered the Machine in good working
13 order, and that holding otherwise would run counter to the intent of the parties. Dkt. # 34
14 at 23. Whether Plaintiff’s position is supported by the record or not is essentially
15 immaterial to the narrow question that is apparently before the Court, which is if the
16 Contract’s limited warranty, by its terms, is restricted to one year from the date of
17 shipment. The answer to that question is yes. The question of whether Defendant’s post18 contractual representations or conduct had the effect of waiver of this provision, or if the
19 warranty failed for some other reason, is not one that is the subject of Defendant’s
20 Motion. Plaintiff also fails to provide any legal authority explaining how these
21 representations would affect the term of the limited warranty, and how they would affect
22 the Contract’s integration clause. Dkt. # 33, Ex. A at p. 27, ¶ 15(b).
23

Accordingly, the Court GRANTS on Defendant’s Motion on these points. The

24 Court finds that the only warranty upon which Plaintiff bases its breach of warranty claim
25 is the limited warranty contained in paragraph 1(a) of the Terms and Conditions of the
26 parties’ Contract. The Court also concludes that by its terms, the limited warranty
27 extended one year from the date of shipment of the Machine.

ORDER- 12

1
2

C. Revocation of Acceptance
Defendant seeks summary judgment on the issue of whether Plaintiff revoked

3 acceptance of the Machine. Dkt. # 32 at 12-14. Here, there is no dispute that Plaintiff
4 accepted the Machine. However, acceptance of goods by the buyer does not of itself
5 impair any other remedy provided by the statute for nonconformity. RCW 62A.2-607(2).
6 Where goods have been accepted, the buyer must notify the seller of any breach within a
7 reasonable time after he or she discovers or should have discovered the breach. RCW
8 62A.2-607(3). The notice of revocation of acceptance is not a requirement for a breach
9 of warranty claim under the UCC. Aubrey’s RV Ctr. v. Tandy Corp., 46 Wn. App. 595,
10 600-601, 731 P.2d 1124 (1987). A buyer who fails to revoke his acceptance in
11 accordance with the UCC must still pay the contract price of the goods, even though the
12 buyer may thereafter recover damages. Kysar v. Lambert, 76 Wn. App. 470, 491, 887
13 P.2d 431, review denied, 126 Wn.2d 1019 (1995).
14

A revocation of acceptance “must inform the seller that the buyer does not wish to

15 keep the goods.” Allis-Chalmers Corp. v. Sygitowicz, 18 Wash. App. 658, 662, 571 P.2d
16 224, 226 (1977) (citations omitted). As Defendant notes, after filing the Complaint,
17 Plaintiff continues to own, operate, and advertise the Machine, and has had the Machine
18 it its sole possession since it was initially delivered. Dkt. # 32 at 18-19. In doing so,
19 Defendant argues that Plaintiff continues to maintain “dominion” over the Machine, an
20 act that is inconsistent with revocation. Hays Merch., Inc. v. Dewey, 78 Wash. 2d 343,
21 349, 474 P.2d 270, 273 (1970) (“Even if the notice of revocation had been given in early
22 December and if this were considered timely, the buyer’s subsequent acts of dominion
23 over the goods are inconsistent with such claimed revocation. The buyer’s acts of pricing,
24 displaying, advertising and selling were for his own account and were not in keeping with
25 his duty to use reasonable care in holding the goods at the seller’s disposition for a
26 reasonable time.”). Based on the current record, the Court agrees with Defendant that
27 Plaintiff did not inform Defendant that it wished to return the Machine.

ORDER- 13

1

Plaintiff argues that the filing of the Complaint constitutes revocation of

2 acceptance, asserting that Washington law holds that filing a complaint, “without more,”
3 constitutes revocation of acceptance. Dkt. # 34 at 24-27. The Court disagrees. This
4 argument misinterprets the holding of Aubrey’s and Fenton, where the buyers did far
5 more than file a lawsuit. See Aubrey’s, 46 Wn. App. at 598-99 (1987) (rejecting buyer
6 sending letter expressly asking for rescission of the contract and return of the purchase
7 price before filing its lawsuit) and Fenton v. Contemporary Dev. Co., 12 Wn. App. 345,
8 348, 529 P.3d 883 (1974) (holding that both filing lawsuit and refusing to allow repairs
9 after the lawsuit together constitutes revocation of acceptance). Unlike the buyer in
10 Fenton, for instance, who refused to allow the sellers to perform repairs on the trailer she
11 purchased, here Plaintiff allowed Defendant to perform repairs on the Machine to bring it
12 back to operation and for future use. Moreover, the noncommittal wording of Plaintiff’s
13 Complaint, which never actually states that Plaintiff is revoking, will revoke, or has
14 revoked acceptance of the Machine, at best implies that revocation of acceptance is a
15 potential theory of liability. Dkt. # 1. As Defendant notes, Plaintiff’s Complaint presents
16 revocation of acceptance and breach of warranty as two competing theories of liability,
17 and does not clarify which version it definitively seeks. Dkt. # 1 at 11-13. Although
18 Plaintiff’s Complaint may indicate a desire to potentially seek legal remedies in
19 connection with alleged breaches of contract and warranty, it does not evidence or allege
20 an intent to return the Machine. Instead, Plaintiff’s conduct both before and after filing
21 its Complaint indicates that it wishes to keep the Machine and sue for damages incurred
22 in the delays associated with Defendant’s repair efforts. See Dkt. # 1. While Plaintiffs
23 are allowed to plead in the alternative, Plaintiff gives no authority for why it should be
24 allowed to do so and claim that this disjunctive pleading style constitutes adequate
25 revocation of acceptance under Washington law.
26

Plaintiff further contends that the fact it continued using the Machine does not

27 necessarily vitiate its purported revocation of acceptance. Dkt. # 34 at 25. While this is

ORDER- 14

1 theoretically true, in the facts of this case Plaintiff’s conduct compels the opposite
2 conclusion. For instance, it is undisputed that Plaintiff continued to fill orders using the
3 Machine and advertise the Machine to its customers. It is also undisputed that after filing
4 this lawsuit, Plaintiff welcomed representatives from Defendant who performed repairs
5 on the Machine, which Plaintiff continues to use as part of its business. These actions are
6 inconsistent with a revocation of acceptance.
7

Ultimately, outside of the loosely-worded Complaint, the Court finds little

8 indication that Plaintiff gave any proper notice to Defendant that it intended to revoke
9 acceptance or return the Machine. Plaintiff’s actions, as shown in the record, indicated
10 that it intended to maintain dominion over the Machine. Accordingly, the Court
11 GRANTS Defendant’s Motion on this point. The Court finds that Plaintiff has not
2
12 revoked its acceptance of the Machine.

IV. CONCLUSION

13
14

For the reasons stated above, the Court GRANTS IN PART AND DENIES IN

15 PART Defendant’s Motion for Partial Summary Judgment. Dkt. # 34.
16

Dated this 27th day of December, 2018.

17
18
19

A

20
21

The Honorable Richard A. Jones
United States District Judge

22
23
24
25
2

Because this Court finds that Plaintiff has not revoked acceptance, it need not address
the parties’ arguments of whether Plaintiff waited an unreasonable amount of time before
27 revoking acceptance.

26

ORDER- 15