Justice Ericson Lindell, Robert R. Weinstine, Joseph M. Windler, Derek R. Allen, Winthrop & Weinstine, PA, Minneapolis, Minnesota, for Plaintiffs.
Andrew K. Fletcher, Evan A. Bloch, Richard M. Weibley, Pepper Hamilton LLP, Pittsburgh, Pennsylvania, John W. Ursu, Robert J. Gilbertson, Sybil L. Dunlop, Greene Espel PLLP, Minneapolis, Minnesota, for Defendant.
RICHARD H. KYLE, District Judge.
Plaintiff Marvin Lumber and Cedar Company ("Marvin") manufactures windows, doors, and related products. For more than ten years it purchased painted aluminum extrusions (referred to as "lineals") from Defendant Sapa Extrusions, Inc. ("Sapa"),  which it used to make aluminum-clad windows and doors. Customers who installed these products in coastal locations eventually began to complain that the products were losing paint adhesion, and Marvin undertook extensive (and expensive) repairs. It commenced this action against Sapa in 2010, seeking to recoup its repair costs; it asserted breach of contract, breach of express and implied warranties, fraud, and similar claims. Sapa later asserted third-party claims against Valspar Corporation ("Valspar"), its paint supplier, for contribution and indemnity.
The parties undertook extensive discovery lasting more than two years and, with that discovery complete, each moved for summary judgment in whole or in part. The Motions were fully and thoroughly briefed, and the Court heard oral argument on July 18, 2013. Mindful of the parties' preparations for the quickly approaching trial date, the Court issued a short Order (Doc. No. 474) on July 22, 2013, disposing of Marvin's, Sapa's, and Valspar's Motions. In that Order, the Court granted Marvin's and Sapa's Motions in part and denied each in part; the Court now issues this Memorandum Opinion setting forth the reasons for those decisions.
The background in this case has been thoroughly discussed in several prior Orders issued by Magistrate Judge Brisbois and need not be repeated here. Facts are recited below only as necessary to understand the Court's decisions on the currently pending Motions and, where recited, are taken in the light most favorable to the non-moving party.
STANDARD OF DECISION
Summary judgment is proper if, drawing all reasonable inferences in favor of the nonmoving party, there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a); Ricci v. DeStefano , 557 U.S. 557, 586 (2009). The moving party bears the burden of showing that the material facts in the case are undisputed. Torgerson v. City of Rochester , 643 F.3d 1031, 1042 (8th Cir. 2011) (en banc). The Court must view the evidence, and the inferences that may be reasonably drawn from it, in the light most favorable to the nonmoving party. Beard v. Banks , 548 U.S. 521, 529-30 (2006); Weitz Co. v. Lloyd's of London , 574 F.3d 885, 892 (8th Cir. 2009). The nonmoving party may not rest on mere allegations or denials, but must show through the presentation of admissible evidence that specific facts exist creating a genuine issue of material fact for trial. Fed.R.Civ.P. 56(c)(1)(A); Wood v. SatCom Mktg., LLC , 705 F.3d 823, 828 (8th Cir. 2013).
I. Marvin's Motion for Partial Summary Judgment
Marvin moves for summary judgment on three issues. It asks the Court to conclude as a matter of law that (1) Sapa provided Marvin an express ten-year warranty guaranteeing the performance of its lineals (referred to as the "Performance Warranty"); (2) the Terms and Conditions ("T&Cs") Sapa attached to the parties' Firm Metal Contracts ("FMCs") do not apply to the sales of lineals; and (3) in the event the T&Cs do apply, certain provisions are unenforceable.
A. Did Sapa Provide a Performance Warranty?
Marvin alleges Sapa provided it two express warranties and breached both. Sapa acknowledges giving Marvin one of the express warranties but denies giving the other. Sapa agrees that it provided a warranty guaranteeing its lineals would meet Marvin's specifications upon shipment (referred to as the "Warranty of Description"). But it denies providing Marvin the Performance Warranty guaranteeing that the paint on its lineals "would not crack, check, peel, or otherwise lose adhesion because of processing deficiencies for ten years after field installation." (Marvin Mem. (Doc. No. 415) at 17). Sapa contends that any such warranty Marvin received came from Valspar, not Sapa. (Sapa Mem. (Doc. No. 446) at 13-21.) The record reveals factual disputes on the question of the Performance Warranty that preclude summary judgment.
Marvin points to evidence in the record suggesting that Sapa warranted the performance of the lineals separate and apart from Valspar's warranty, based not on the paint itself but rather Sapa's application of the paint. It notes, for example, that Bob Nolan, the erstwhile head of Sapa's Yankton, South Dakota factory (where the lineals were manufactured), testified in his deposition that "Valspar was standing behind the paint and [Sapa] was standing behind the application." (Nolan Dep. at 26.) He further testified that Sapa provided a "warranty on the paint system, " and "the final product out the door [came under this] warranty." (Id. at 57 (emphasis added); accord, e.g., Nolan Decl. (Doc. No. 424) ¶ 3 (noting the existence of a "ten-year performance warranty from" Sapa).) Other witnesses testified consistently. Gerald Krahn, Marvin's former Director of Purchasing who negotiated the warranty with Nolan, testified that Valspar provided a similar, but entirely separate, warranty from Sapa. (See, e.g., Krahn Dep. at 55, 81 ("[W]e didn't have a pass-through warranty, we had a warranty from [Sapa].").) And Gary Daniels, Marvin's designated corporate representative, testified that the Valspar warranty "was not Sapa's warranty to Marvin." (Daniels Dep. at 19-20.)
But the record also contains evidence to the contrary. In particular, Tim Fox, Sapa's Regional Sales Manager overseeing the Marvin account, expressly denies that Sapa ever provided Marvin with a Performance Warranty. (See Fox Aff. (Doc. No. 448) ¶ 13 ("Sapa did not provide Marvin with a performance warranty."); Fox Aff. (Doc. No. 427) ¶¶ 85-90.).) Documents in the record, too, suggest that the only warranty Marvin received was a pass-through warranty from Valspar. For example, Marvin, Sapa, and Valspar held a "corrosion summit" in late 2000, for which Marvin prepared a PowerPoint presentation. One slide in that presentation described the "Sapa Warranty" as a "[p]ass through warranty from Valspar." (Fox Aff. (Doc. No. 427) Ex. 13.) That document further confirmed "Marvin's understanding of the warranty" was that it was "a pass through warranty from Valspar." (Id. (emphasis added).) In addition, a 2007 e-mail authored by Mike Codega, Marvin's Vice President of Operations, summarized the warranty as "an agreement which passed through Sapa between Valspar and Marvin." (Fletcher Aff. (Doc. No. 447) Ex. 9.) Finally, Sapa points out that the terms of the (alleged) Performance Warranty so closely track those of Valspar's written warranty that they imply Valspar's warranty was, in fact, the only warranty Marvin received.
Generally speaking, "[i]t is a question of fact whether an express warranty arises from the language and circumstances of a transaction." Minn. Forest Prods., Inc. v. Ligna Mach., Inc. , 17 F.Supp.2d 892, 917 (D. Minn. 1998) (Kyle, J.); accord, e.g., Hydra-Mac, Inc. v. Onan Corp. , 430 N.W.2d 846, 851 (Minn.Ct.App. 1988). Here, there are thumbs pressing on both sides of the evidentiary scale. A jury ultimately will have to determine whether Sapa provided Marvin with its own Performance Warranty or only Valspar's warranty.
B. Do Sapa's Terms and Conditions Apply?
Marvin next seeks summary judgment determining, as a matter of law, that the T&Cs Sapa attached to certain FMCs cannot apply to the sale of lineals. Once again, the Court finds factual issues preclude summary judgment on this issue.
Over the course of their relationship, Marvin and Sapa entered into FMCs for certain designated periods of time. Through these contracts, Marvin would commit to ordering a certain amount of "raw" aluminum from Sapa over a specified period of time at a fixed price. The purpose of these agreements was to "lock up" or "hedge" the price of aluminum for the designated period (sometimes a year, other times as short as one month), protecting Marvin from market fluctuations in the price of aluminum. When Marvin purchased lineals from Sapa, one component of the purchase price was the cost of the aluminum used to make them. That price was set by an FMC, if one was in place at the time of purchase.
It appears from the record that beginning in 1996, Sapa appended "standard" T&Cs to the parties' FMCs. (See, e.g., Fox Aff. (Doc. No. 427) ¶¶ 16-17 & Ex. 1.) The T&Cs contained two terms critical to the instant dispute. First, they purported to disclaim any express or implied warranties from Sapa to Marvin, except for the Warranty of Description discussed above. Second, they provided that Sapa's liability, and Marvin's "exclusive" remedy, was limited to the purchase price paid by Marvin for the lineals, and in no event would Sapa be liable for consequential damages. If applicable, therefore, the T&Cs could provide Sapa with defenses to many of Marvin's claims.
Marvin contends that the FMCs, to which the T&Cs were attached, were "entirely separate" from its purchases of painted lineals, which were transacted through purchase orders and invoices exchanged between the parties. (Marvin Mem. (Doc. No. 415) at 11.) Because the T&Cs were not attached to those documents, and because the FMCs were intended only to "hedge the price of raw aluminum" and Marvin "did not purchase anything" under those agreements, it argues that the T&Cs apply (at most) only to the purchase of "raw aluminum." (Id. at 9-11.) Hence, it seeks summary judgment determining that the T&Cs "do not apply to finished products"-that is, the lineals-it purchased from Sapa.
This argument is not without support in the record. For instance, Frank Norling, the Marvin "purchasing agent" responsible for "hedging" the price of aluminum, states that Marvin and Sapa attempted to negotiate a "formal supply agreement" in 2006, to no avail. (Norling Decl. (Doc. No. 422) ¶ 19.) "As part of the negotiations, Sapa tried to convince Marvin to accept the Terms and Conditions as being applicable to... Marvin's purchase of painted lineals. " (Id. (emphasis added).) Yet, if the T&Cs were already applicable to those purchases, there would have been no reason for Sapa to seek Marvin's agreement in 2006. Furthermore, Marvin asserts that, despite years of discussions concerning the paint problems at issue in this case and extensive negotiations between the parties to resolve them, Sapa never held up the T&Cs as limiting or otherwise impacting its potential liability to Marvin. This "course of performance, " argues Marvin, belies Sapa's contention that the T&Cs became part of the purchase of finished lineals.
But the terms of the FMCs themselves undermine Marvin's argument. For instance, nearly all refer to the purchase of "finished product" from Sapa. (Fox Aff. (Doc. No. 427) Exs. 19-49.) On their faces, therefore, the FMCs appear to contemplate the purchase of something beyond simply "raw aluminum." Furthermore, portions of the T&Cs would be stripped of any obvious meaning if applied only to "raw aluminum." By way of example, the T&Cs contain a clause providing that Marvin "will release, hold harmless, indemnify and defend [Sapa] from any liability... arising out of or relating to the design of goods supplied hereunder... if such goods... are made in compliance with [Marvin's] design or specifications. " (Id. Ex. 2 (emphases added).) The terms "design" and "specifications" have no apparent application to raw aluminum, and Marvin has not proffered any explanation of how those terms would apply in this context.
Nor does Marvin's argument make sense in light of the parties' relationship. The record is abundantly clear that the reason Marvin and Sapa were transacting business was because Marvin wanted to buy painted aluminum lineals from Sapa. There is absolutely no evidence to suggest that Marvin ever purchased-or intended to purchase-"raw" aluminum from Sapa. The only plausible reason for hedging the price of aluminum was to prevent increased costs for later orders of lineals, which were made from the "raw" aluminum. (See Norling Decl. (Doc. No. 422) ¶ 3 ("The FMCs were a benefit to Marvin because we were able to lock in' favorable pricing on raw aluminum. The price of aluminum was meaningful to Marvin because it was one of many components that made up the price of the finished pretreated and painted aluminum lineals that Marvin purchased from Sapa. ") (emphasis added); Marvin Mem. (Doc. No. 415) at 9 ("The purpose [of the FMCs] was to allow Marvin to hedge the price of raw metal to be used in Finished Products it might later purchase from Sapa.") (emphasis added).) So even if Marvin did not actually commit to any specific purchases under the FMCs, when it later issued purchase orders to Sapa, the price of the aluminum in those orders was set by the FMCs.
In summary, therefore, the record does not ineluctably lead to the conclusion that the T&Cs apply-or do not apply-to Marvin's finished lineal purchases from Sapa. Accordingly, the Court cannot determine that Marvin is entitled to judgment as a matter ...