CNH Industrial America LLC v. Jones Lang LaSalle Americas Inc

Filing 122

ORDER signed by Judge J P Stadtmueller on 8/15/16 denying 74 Plaintiff's Motion for Summary Judgment. See Order. (cc: all counsel) (nm)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WISCONSIN
CNH INDUSTRIAL AMERICA LLC
formerly known as CNH AMERICA LLC,
Plaintiff,

Case No. 15-CV-981-JPS

v.
JONES LANG LASALLE AMERICAS, INC.,

ORDER
Defendant.
This case arises out of a contract dispute over a national marketing
campaign. (See generally Docket #39). On June 24, 2016, and pursuant to
Federal Rule of Civil Procedure 56, the plaintiff, CNH Industrial America
LLC (“CNH”), moved for summary judgment with respect to: (1) its breach
of contract claim; and (2) the defendant’s, Jones Lange LaSalle Americas, Inc.,
(“JLL”), declaratory judgment counterclaim.1 (Docket #74). That motion is
now fully briefed and ripe for adjudication. (Docket #83, #87, #93).

1

CNH’s claim and JLL’s counterclaim are essentially two sides of the same
coin. On the one hand, CNH claims a breach of contract; on the other hand, JLL
asks the Court to declare that certain obligations under that same contract either:
(1) do not exist; or (2) have been fulfilled. (Docket #39, #14). CNH argues that an
affirmative ruling in its favor with respect to the declaratory judgment claim
necessarily follows if the Court likewise rules in its favor with respect to the breach
of contract claim. (Docket #83 at 6). The Court notes that CNH’s position, in this
regard, is interesting. As described below, CNH argues that any affirmative defense
not pled in JLL’s amended answer is waived under Civil Local Rule 15 and Federal
Rule of Civil Procedure 8. (Docket #93 at 11-15). However, CNH fails to
acknowledge that JLL likewise did not re-plead its declaratory judgment claim in
its amended answer. (Docket #43). However, as neither party raises this issue, and
both parties continue to operate under the assumption that the declaratory
judgment claim remains live in this action, the Court will not address the issue at
this juncture.

As described more fully below, the Court concludes that numerous
disputes of material fact exist in this case. Accordingly, an award of summary
judgment pursuant to Rule 56 is inappropriate, and the Court will deny
CNH’s motion in its entirety. (Docket #74).
1.

BACKGROUND2
1.1

The Parties

CNH is a limited liability company organized and existing under the
laws of the State of Delaware, with its principal place of business located at
700 State Street, Racine. (Docket #39 ¶ 1). It manufactures and sells farming
and construction equipment through a network of dealers under several
name plates, including the New Holland brand at issue in this action. (Docket
#39 ¶ 1).
JLL is a corporation organized and existing under the laws of the State
of Maryland, with its principal place of business located at 200 East Randolph
Drive, Chicago, Illinois. (Docket #39 ¶ 2). It provides property management
and project management services to clients, including clients within the
borders of the Eastern District of Wisconsin. (Docket #39 ¶ 2).
1.2

Undisputed Facts

In 2007, CNH began to undertake a corporate rebranding program for
its New Holland Agriculture line of products (the “Rebranding Program”).
(Docket #95 ¶ 1). The Rebranding Program would involve, among other
things, the manufacture and installation of new signage at more than one
thousand of its dealers in the United States and Canada. (Docket #95 ¶ 1).

2

The facts will generally be taken from the parties’ proposed findings of fact
and the responses thereto. These facts and corresponding responses can be
collectively found at Docket #95. To avoid confusion, the Court will note with
specific notation the facts proposed by JLL. In addition, any disputes of fact will be
noted accordingly.

Page 2 of 17

CNH chose to retain a project manager for the Rebranding Program.
(Docket #95 ¶ 2). CNH selected JLL for that position (Docket #95 ¶ 2), and,
to that end, CNH and JLL entered into a Service Agreement on April 7, 2008
(“Service Agreement”) (Docket #95 ¶ 3). Under the Service Agreement, JLL
further negotiated agreements with three sign manufacturers—Icon Identity
Solutions, Priority Signs, Inc., and Thomas Sign & Awning Company,
Inc.—pursuant to which each would manufacture and install signs for the
Rebranding Program. (Docket #95 ¶ 4). CNH was a third-party beneficiary
under each of those three agreements. (Docket #95 ¶ 4).
The Service Agreement between CNH and JLL detailed various
obligations on behalf of the parties. As it relates to this case, the Service
Agreement imposed the following obligations on JLL:
a.

To research and document warranty information for all raw
materials and sub components;

b.

To direct control and responsibility of all manufacturing,
including quality control;

c.

To negotiate the “best possible warranty” for the signs and to
disclose all elements of the warranty program to CNH; and

d.

To provide ongoing management services for warranties
one-year from the date of uninstallation.

(Docket #95 ¶ 5).3 The agreement also contains two provisions related to: (1)
the “Acceptance of Deliverables,” which requires a certain procedure be
followed in the event of the delivery of “deficien[t] or nonconform[ing]”

3

Although JLL’s original claim for declaratory relief asserts that the Service
Agreement does not contain some of these terms (Docket #14 ¶¶ 15, 19), JLL also
does not dispute that the obligations described above derive directly from the
language of the Service Agreement itself (Docket #95 ¶ 5). This apparent
inconsistency is not addressed by the parties.

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goods; and (2) a “Limitation on Liability,” which caps damages in the event
of a dispute between the parties. (Docket #95 JLL Proposed Fact ¶¶ 56, 58).4
While the original Service Agreement was to remain in effect until December
16, 2011, the parties decided to extend it by way of various amendments until
its termination on March 31, 2016. (Docket #95 ¶ 6).
Vinyl was an essential component to this sign-manufacturing process.
The company selected to provide the vinyl for the Rebranding Program was
Arlon. (Docket #95 ¶ 7). Specifically, the Arlon Series 2500 vinyl was chosen
as the sole vinyl to be utilized for the project. (Docket #97 ¶ 8). Generally,
five signs were manufactured and installed at each dealer location (one of
which had two sign faces). (Docket #95 ¶ 9). Of those, two signs are owned
by CNH. (Docket #95 ¶ 9). The other three signs are owned by the individual
dealer. (Docket #95 ¶ 9).
Sometime after selecting Arlon as the vinyl supplier, JLL began
negotiating the terms of the Arlon vinyl warranty. (Docket #95 ¶ 13). Though
many factual disputes surrounding this negotiation are unresolved, the
parties agree that the vinyl warranty that ultimately appeared in Exhibit E
to the agreements made between JLL and the sign manufacturers stated:
“Arlon Vinyl Extended Warranty B 7 year warranty on 1st surface. 2nd
surface on exterior sign applications is 9 years. There is no charge for
parts/labor/shipping for 1-year from date of installation.” (Docket #95 ¶ 15).
The parties also agree that the aforementioned language was not drafted by
JLL. (Docket #95 ¶ 16). Rather, Adam Cook (“Mr. Cook”), JLL’s assigned
project manager until approximately the second quarter of 2009, testified that
4

CNH objects to the inclusion of these proposed facts on the grounds that
they are “immaterial.” (Docket #95 JLL Proposed Fact ¶¶ 56, 58). However, as
described further below, the Court will permit JLL to argue its position with respect
to waiver and the Limitation of Liability provision, and, as such, they are relevant.

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he “believed” that the language quoted above was drafted by one of the sign
manufacturers. (Docket #95 ¶¶ 12, 16).
Two problems arose during the course of the sign manufacturing
process. First, in late 2008, the vinyl delivered by Arlon began to check and
crack when applied to the New Holland signs. (Docket #95 ¶ 24). Though the
parties dispute the cause of the 2008 failure and manner in which it was
resolved, it is undisputed that sign fabrication continued thereafter. (Docket
#95 ¶¶ 24-31). Second, in late 2010 or early 2011, CNH began to receive
additional reports from its dealers that signs fabricated and installed for the
Rebranding Program were again failing due to cracking, checking and
fading. (Docket #95 ¶ 31; see also Figures 1 and 2).

Figure 1: Representative New Holland Sign Prior to Failure

Figure 2: Representative New Holland Sign After Failure

Page 5 of 17

As a result of the sign failures, CNH dealers went through a process
of reporting failed signs to either CNH or JLL. (Docket #95 ¶ 34). If the failure
was reported to CNH, then CNH would, in turn, report the failure to JLL.
(Docket #95 ¶ 34). JLL would then initiate a claim with the sign manufacturer
that manufactured the sign, and that sign manufacturer would then contact
Arlon to initiate a warranty claim seeking payment for manufacture of a new
sign face and its installation. (Docket #95 ¶ 34).
At this time, Arlon deemed product failures of the sort at issue to be
failures for which the vinyl warranty would be available. (Docket #95 ¶ 33).
And, until approximately mid-2014, Arlon agreed to pay the full replacement
cost of sign faces on which its failed vinyl was affixed. (Docket #95 ¶ 36). At
no point during this period of time did Arlon refuse to pay for any sign faces
based upon the date of installation, the nature of the failure, or any other
factor. (Docket #95 ¶ 36).
In mid-2014, however, Arlon stopped fully funding the replacement
of sign faces. (Docket #95 ¶ 37). And, in August 2014, Arlon advised JLL that
it would no longer fund remediation of any of the failed signs. (Docket #95
¶ 40). Instead, Arlon offered to fund remediation of additional signs at a
price of $3,000.00 per dealer site. (Docket #95 ¶ 40). CNH did not accept this
offer, and instead entered into a Common Interest Agreement with JLL in
December of 2014 to resolve various issues related to the failed signs. (Docket
#95 ¶¶ 40-41).
Though JLL disputes the propriety of CNH’s data gathering, CNH
estimates that, to date, signs have failed and need to be replaced at 686
dealers across the country. (Docket #95 ¶¶ 42-44). Based on this number and
CNH’s recent sign remediation contract, CNH estimates that correcting the

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remaining failed signs will cost CNH and its dealers no less than
$5,382,875.00. (Docket #95 ¶ 44-45).
2.

LEGAL STANDARD
When a party files a motion for summary judgment, it is their

“contention that the material facts are undisputed and the movant is entitled
to judgment as a matter of law.” Hotel 71 Mezz Lender LLC v. Nat. Ret. Fund,
778 F.3d 593, 601 (7th Cir. 2015) (citing Fed. R. Civ. P. 56(a)). “Material facts”
are those facts which “might affect the outcome of the suit,” and “summary
judgment will not lie if the dispute about a material fact is ‘genuine,’ that is,
if the evidence is such that a reasonable jury could return a verdict for the
nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
Thus, to have a genuine dispute about a material fact, a party opposing
summary judgment “must do more than simply show that there is some
metaphysical doubt as to the material facts,” Matsushita Elec. Indus. Co. v.
Zenith Radio Corp., 474 U.S. 574, 586 (1986); namely, the party in opposition
“must set forth specific facts showing that there is a genuine issue for trial.”
Fed. R. Civ. P. 56(e).
“Where…the movant is seeking summary judgment on a claim as to
which it bears the burden of proof, it must lay out the elements of the claim,
cite the facts it believes satisfies these elements, and demonstrate why the
record is so one-sided as to rule out the prospect of a finding in favor of the
non-movant on the claims.” Hotel 71 Mezz, 778 F.3d at 601. In analyzing
whether summary judgment should be granted, a court must draw all
reasonable inferences from the materials before it in favor of the non-moving
party. Id. When a court denies a motion for summary judgment, it “reflects
the court’s judgment that one or more material facts are disputed or that the

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facts relied on by the motion do not entitle the movant to judgment as a
matter of law.” Id. at 602.
3.

ANALYSIS
In its motion for summary judgment, CNH makes three arguments

that the Court will address herein. (Docket #74). First, CNH argues that it is
entitled to judgment as a matter of law with respect to its breach of contract
claim against JLL. (Docket #74). According to CNH, JLL has breached the
Service Agreement by:
1.

Failing to document the warranty terms for the vinyl supplied
by Arlon;

2.

Failing to negotiate the “best possible warranty” from Arlon;

3.

Failing to satisfy quality control obligations with respect to
Arlon’s provision of vinyl; and

4.

Failing to properly administer the Arlon warranty.

(Docket #74). As a result of these four breaches, CNH argues that it is entitled
to judgment as a matter of law against JLL in the amount of $5,382,875.00.
(Docket #74). Second, for the same reasons that it prevails on the
aforementioned breach of contract claim, CNH argues that the Court should
dismiss JLL’s declaratory judgment counterclaim. (Docket #74).5 Finally,
CNH argues that any defenses purportedly raised by JLL—namely, waiver
and the Limitation of Liability provision—are waived under the local and
federal rules of procedure because they were not properly pled in JLL’s
amended answer. (Docket #93).

5

CNH fails to acknowledge that certain duties referenced in JLL’s
declaratory judgment claim differ from the duties that CNH now asserts that JLL
breached for purposes of summary judgment. (Compare Docket #14 with Docket
#74).

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In response, JLL argues that factual disputes underlying both CNH’s
contract claim and its own declaratory judgment counterclaim preclude the
entry of summary judgment in CNH’s favor. (Docket #87). Moreover, JLL
argues that its affirmative defense of waiver, and the Limitation of Liability
provision appearing in the parties’ Service Agreement, preclude, if not cap,
CNH’s recovery in this case. (Docket #87).
For the reasons described below, the Court concludes that: (1) genuine
issues of material fact preclude the grant of summary judgment in CNH’s
favor; and (2) that JLL may argue the defense of waiver and the applicability
of the Limitation of Liability provision, despite its failure to plead these
positions in its amended answer.
3.1

Breach of Contract and Declaratory Judgment Claim

As described above, CNH’s breach of contract claim and JLL’s
declaratory judgment claim raise similar, though not identical issues. At this
juncture of the litigation, however, the Court is satisfied that a large body of
disputed fact precludes the entry of judgment as a matter of law for CNH on
either of the claims.
“The elements for a breach of contract in Wisconsin are familiar; the
plaintiff must show a valid contract that the defendant breached and
damages flowing from that breach.” Matthews v. Wisconsin Energy Corp. Inc.,
534 F.3d 547, 553 (7th Cir. 2008) (citing Northwestern Motor Car, Inc. v. Pope,
51 Wis.2d 292, 296, 187 N.W.2d 200 (Wis.1971)).6 Here, there is no question
that CNH and JLL were bound by the Service Agreement. However, issues

6

The parties agree that this Court, sitting in diversity, must apply the law of
the State of Wisconsin. (Docket #83, #87). Having no independent basis from which
to disagree, the Court will apply Wisconsin law to this case.

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of material fact run through each of CNH’s theories of breach, and, therefore,
the Court will only highlight the most salient disputes below.7
3.1.1

Failure to Document and Negotiate the “Best
Possible” Vinyl Warranty8

CNH claims that JLL breached the Service Agreement by failing to
properly negotiate and document Arlon’s vinyl warranty. However, much
is unknown and disputed regarding the development of the terms of the
warranty, and, more importantly, the parties dispute the actual terms of the
warranty itself. (Docket #95 ¶¶ 13-23).
Regarding the vinyl warranty negotiations, the parties do not agree
on the extent to which various actors were and/or should have been involved
in the process. While on the one hand Mr. Cook testified that he “believed”
that one of the sign manufacturer’s drafted the warranty language, he does
not remember the “details” of the negotiations. (Docket #95 ¶¶ 13, 16, 23).
According to his testimony, the only portion of the negotiations that Mr.
Cook remembers relates to a comparison of Arlon’s warranty to 3M’s
warranty. (Docket #95 ¶ 13). Thus, because: (1) the parties did not provide
the Court with any other testimony regarding the warranty’s negotiations;
and (2) there is no documentary evidence that catalogues or re-counts those
negotiations, trial will serve to elucidate who participated in the negotiation

7

The parties debate the extent to which causation comprises an element of
a breach of contract claim in Wisconsin. (See Docket #83, #93). However, as
described above, issues of fact underlie each of CNH’s theories of breach. As a
breach of the Service Agreement is undisputedly an element of CNH’s breach of
contract claim, the Court need not address this side dispute.
8

As the same facts are offered in support of the duty to negotiate and duty
to document theories of breach, the Court will address both of these theories, and
the factual disputes corresponding to them, together.

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process and the manner in which the negotiations proceeded. (Docket #95
¶¶ 14, 17, 19).
Moreover, CNH provides the Court will no definition or comparative
representation of what constitutes the “best possible warranty” for the vinyl
at issue in this case. According to JLL, Mr. Cook engaged in at least some
comparison of other company’s warranties, i.e., that of 3M’s; and, according
to JLL, Arlon’s vinyl price and proposed warranty terms were superior to
that of Arlon’s competitors. (Docket #95 ¶ 13; Docket #95 JLL Proposed Fact
¶¶ 9-10, 19). Thus, without resolution as to a standard and/comparison for
industrial vinyl warranties, the Court cannot fairly determine whether JLL
breached its duty to negotiate in this regard.
Even more to the point, the parties disagree on the ultimate outcome
of the vinyl warranty negotiations. At bottom, the only documented
language evidencing the warranty’s negotiations is a thirty-three word
statement that appeared in Exhibit E to the sign manufacturer’s contracts
with JLL. (Docket #95 ¶ 14). That language reads:
Arlon Vinyl Extended Warranty B 7 year warranty on 1st
surface. 2nd surface on exterior sign applications is 9 years.
There is no charge for parts/labor/shipping for 1-year from
date of installation.
(Docket #95 ¶ 15).
The parties actively dispute whether this statement accurately and
completely describes Arlon’s vinyl warranty. On the one hand, CNH has
presented testimony from Arlon’s Rule 30(b)(6) representative suggesting
that the language does not contain standard warranty terms that are issued
by the vinyl company. (Docket #95 ¶ 18). For its part, JLL’s employees have
offered three separate articulations of what the Arlon warranty’s terms were,
none of which correspond exactly to the quoted language above. (Docket #95
Page 11 of 17

¶ 20). CNH also proffers a different interpretation of the warranty and its
coverage for replacing and repairing failed signs. (Docket # 95 ¶¶ 15, 22).
To be sure, with so many disputed facts about the terms of the
underlying warranty itself, the Court is satisfied that the grant of summary
judgment with respect to JLL’s duties to “negotiate” and “document” the
same is inappropriate at this juncture.
3.1.3

Failing to Satisfy Quality Control Obligations

Next, CNH claims that JLL failed to satisfy its quality control
obligations under the Service Agreement. At the heart of this theory are
certain actions that were allegedly taken in response to an early failure in
Arlon’s vinyl in 2008. (Docket #95 ¶¶ 24-30).
In 2008, the Rebranding Program experienced an early interruption
due to checking and cracking of the vinyl being placed on the New Holland
signs. (Docket #95 ¶¶ 24-25). According to CNH, the 2008 vinyl failure is
particularly critical because the testimony from former Arlon employees
suggests that: (1) the issues underlying the 2008 vinyl failure also caused the
systemic sign failures in dispute in this case; and (2) that certain employees
from Arlon were aware of the defective vinyl all along and continued to sell
it anyway. (Docket #95 ¶ 28). The parties dispute the extent to which JLL was
aware and/or could have prevented this purportedly continuing vinyl
failure. (Docket #15 ¶ 27).
While neither of the parties dispute that some sort of vinyl failure
occurred in 2008 (Docket #95 ¶24), they do not agree as to the cause or nature
of this failure. (Docket #95 ¶ 24). The parties also dispute what actions JLL
took in response to the 2008 failure. (Docket #95 ¶25). While CNH asserts
that JLL failed to make any inquiry of Arlon as to the cause of the failure, and
simply accepted Arlon’s assurance that the problem was found and cured,
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JLL maintains that it continued to monitor the manufacturing and fabrication
process to ensure the signs did not demonstrate any failures. (Docket #95
¶ 25). Moreover, assuming JLL failed to intervene in the 2008 failure to the
extent CNH now expects, Mr. Cook’s testimony suggests that such actions
may have been motivated by cost and/or time saving measures. (Docket #95
¶ 25). CNH’s knowledge of and/or involvement in the 2008 failure are facts
neither of the parties address.9
Without resolution as to the circumstances of the 2008 failure, the
actions taken by the parties in response to the 2008 failure, and whether the
same problems underlying the 2008 failure actually caused the sign failures
that began in late 2010 or early 2011, summary judgment on this theory of
breach will not be granted.
3.1.4

Failure to Properly Administer Arlon Warranty

Finally, with respect to its fourth theory of breach, CNH argues that,
once the signs began to systemically fail across the country, JLL breached its
duty to properly administer Arlon’s vinyl warranty. (Docket #95 ¶¶ 31-41).
For obvious reasons, many of the factual disputes related to what the actual
terms of Arlon’s warranty were are relevant to this theory of breach. As an
example, CNH argues that JLL failed to accurately inform CNH that Arlon’s
warranty did not require a full refund and replacement of failed signs for a
full seven years. (Docket #95 ¶ 38). For its part, JLL maintains that CNH had
access to the same warranty language that it argues control this case, namely,

9

JLL does not dispute that it did not obtain written confirmation from Arlon
that, should the same issue underlying the 2008 failure arise again, that Arlon
would cover all costs associated with the remediation. (Docket #95 ¶ 26). However,
as noted by JLL, CNH fails to point to the language in the Service Agreement that
required such an action and/or how the quality control provision mandated this
specific action. The Court expresses no opinion on this matter, but simply
highlights what appears to be an unaddressed gap in CNH’s theory.

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that which was contained in Exhibit E to the sign manufacturer’s contracts.
(Docket #95 ¶ 38). The ultimate terms of the warranty and how/whether
those terms were communicated among the parties are still open questions
in this case.
CNH also posits that JLL failed to inform CNH of the warranty’s
approaching expiration date, despite JLL’s ability to do so. (Docket #15 ¶ 39).
As JLL highlights, it is unclear whether this fact supports CNH’s theory of
breach, as it does not appear that the Service Agreement explicitly required
JLL to give advance notice of warranty expirations. (Docket #95 ¶ 39).
Nonetheless, CNH maintains that JLL’s failure to provide advance warning
of the warranty’s expiration undermined CNH’s ability to take appropriate
steps to avoid being left without warranty coverage for the failed signs.
(Docket #95 ¶ 39).
In sum, because the facts outlined above, in conjunction with the
actual terms of the Arlon warranty itself, are disputed, the Court will defer
their resolution for trial.10
3.2

Defenses: Waiver and Limitation of Liability

Apart from the breach of contract claim, CNH also argues that JLL is
not entitled to assert: (1) the defense of waiver; and (2) that CNH’s damages
should be capped in accordance with the Limitation of Liability provision
articulated in the Service Agreement. (Docket #93). The Court concludes,
however, that excluding further argument on these issues is not appropriate
under the circumstances.

10

Because the Court concludes that each of CNH’s four theories of breach
rest on a large body of disputed fact, the Court will also pend the resolution of
damages for trial.

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At bottom, CNH argues that both of JLL’s purported defenses—i.e.,
that of waiver and the Limitation of Liability provision—must fail because
they were not properly pled in JLL’s amended answer. (Docket #93). More
specifically, with respect to waiver, CNH points out that JLL failed to comply
with Civil Local Rule 15 by failing to re-plead the affirmative defense in its
amended answer. See Civ. L. R. 15(a) (“Any amendment to a pleading,
whether filed as a matter of course or upon a motion to amend, must
reproduce the entire pleading as amended, and may not incorporate any
prior pleading by reference.”). In addition, because CNH argues that JLL’s
assertion of the Limitation of Liability provision is an affirmative defense,
CNH claims that JLL violated Federal Rule of Civil Procedure 8(c) by failing
to properly plead them.
Nonetheless, many courts facing similar technical violations have
declined to impose such a harsh sanction as CNH proposes. See, e.g.,
Pensacola Motor Sales Inc. v. E. Shore Toyota, LLC, 684 F.3d 1211, 1222 (11th Cir.
2012) (“[I]f a plaintiff receives notice of an affirmative defense by some means
other than pleadings, the defendant’s failure to comply with Rule 8(c) does
not cause the plaintiff any prejudice. When there is no prejudice, the trial
court does not err by hearing evidence on the issue.”) (internal citations
omitted); Moore, Owen, Thomas & Co. v. Coffey, 992 F.2d 1439, 1445 (6th Cir.
1993), as amended on denial of reh'g (Aug. 31, 1993) (“It is well established,
however, that failure to raise an affirmative defense by responsive pleading
does not always result in waiver.”); Charpentier v. Godsil, 937 F.2d 859, 863 (3d
Cir. 1991) (“It has been held that a ‘defendant does not waive an affirmative
defense if [h]e raised the issue at a pragmatically sufficient time and [the
plaintiff] was not prejudiced in its ability to respond.’ ”) (quoting Lucas v.
United States, 807 F.2d 414, 418 (5th Cir. 1986)); see also 5 Charles A. Wright
Page 15 of 17

& Arthur R. Miller, Fed. Practice and Procedure: Civil 2d § 1278. Instead of
such a rigid approach, most courts ruling on motions to strike or related
arguments consider both the notice-oriented purpose of Federal Rule of Civil
Procedure Rule 8(c) and whether the failure to comply with the procedural
requirement has caused undue prejudice. See MCI Telecommunications Corp.
v. Ameri-Tel, Inc., 881 F. Supp. 1149 n.21, 1158 (N.D. Ill. 1995) (collecting
cases).
In this case, the Court concludes that the wiser exercise of discretion
is to allow JLL to argue waiver and the Limitation of Liability provision.11
With regard to waiver, CNH cannot fairly argue that it was not placed on
notice of JLL’s intent to assert this defense. Not only did JLL plead this
defense in its original answer (Docket #14), but the Acceptance of
Deliverables provision—which outlines the notice procedure for defective or
non-conforming goods—is plainly a part of the contract upon which CNH
is now suing. (Docket #95 JLL Proposed Fact ¶ 56). So too with respect to the
Limitation of Liability provision. (Docket #95 JLL Proposed Fact ¶ 58). Even
though JLL did not assert the liability provision in its answer, CNH cannot
fairly say that it was not on notice of a provision that plainly existed in the
very agreement that it now seeks to enforce. Moreover, in its reply brief,
CNH provides the Court will no argument as to why and/or how it would
be unduly prejudiced by allowing JLL to further these positions henceforth

11

Case law is not clear on the issue of whether a contractual limitation on
damages—such as the limited liability provision at issue here—should be construed
as an affirmative defense. See Carter v. United States, 333 F.3d 791, 796 (7th Cir. 2003)
(citing cases). Moreover, none of the Wisconsin cases relied upon by CNH
conclusively hold that such a contractual term must be pled as an affirmative
defense. (Docket #93 at 14). Nonetheless, even assuming the provision is properly
considered an affirmative defense, the Court will allow it for the reasons stated
above.

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in the litigation. (Docket #93). Accordingly, the Court will allow JLL to
present its arguments related to waiver and the Limitation of Liability
provision at trial. See MCI Telecommunications Corp., 881 F. Supp. at 1149 n.21
(concluding that “it would be manifestly unfair to permit [a party] to invoke
certain provisions of the [contract] while crying surprise with respect to
others”).
4.

CONCLUSION
In sum, the Court concludes that genuine issues of material fact

preclude the granting of summary judgment in CNH’s favor. In addition, the
Court will permit JLL to address its waiver and Limitation of Liability
arguments at trial.
Accordingly,
IT IS ORDERED that CNH’s motion for summary judgment (Docket
#74) be and the same is hereby DENIED.
Dated at Milwaukee, Wisconsin, this 15th day of August, 2016.
BY THE COURT:

J.P. Stadtmueller
U.S. District Judge

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