United States District Court, D. Minnesota
Eric. J. Nystrom, Esq. and Bryan R. Freeman, Esq., Lindquist & Vennum PLLP, counsel for Plaintiff.
Mark J. Feinberg, Esq., Nicholas A. Dolejsi, Esq., and Thomas B. Caswell, III, Esq., Zelle Hofmann Voelbel & Mason LLP, counsel for Defendant.
MEMORANDUM OPINION AND ORDER
DONOVAN W. FRANK, District Judge.
This matter is before the Court on a Motion for Summary Judgment brought by Defendant HDI-Gerling America Insurance Company ("Defendant" or "HDI-Gerling"). (Doc. No. 31.) For the reasons set forth below, the Court grants the motion.
Plaintiff Ritrama, Inc. ("Ritrama") manufactures and sells pressure sensitive flex films and cast vinyl adhesives that are used in labels for various products. (Doc. No. 34 ("Caswell Aff."), Ex. A ¶ 3; Doc. No. 40 ("Hanzal Decl.") ¶ 2.) For example, Ritrama manufactures cast vinyl films for various applications, including signage and decals for use on recreational vehicles ("RV"s). (Hanzal Decl. ¶¶ 2, 3.)
Burlington Graphics Systems, Inc. ("Burlington") is a company that, among other services, manufactures decals for customers in the RV industry. ( Id. ¶ 3.) Burlington, which is not a party to this lawsuit, is a former customer of Ritrama. ( Id. ) Between 2006 and July 2010, Burlington purchased cast vinyl film products coated with adhesive from Ritrama, which were then used with decals that were placed onto RVs. ( Id. ¶ 3; Caswell Aff., Ex. A ¶ 4.)
Keystone RV Company ("Keystone") is a customer of Burlington and contracted with Burlington to place Ritrama vinyl adhesive products onto the sides of their RVs. (Caswell Aff., Ex. O at 2-3.) In December 2007, Keystone notified Burlington of a "field failure" involving Ritrama's cast vinyl adhesive products. ( Id. at 8.) Burlington then notified Ritrama that it had received complaints from customers regarding the decals manufactured using the adhesive products it purchased from Ritrama. (Caswell Aff., Ex. B ¶ 7.)
On February 27, 2008, a representative of Burlington sent an e-mail to Daryl Hanzal, President of Ritrama, discussing the ongoing issues with the adhesive:
There has been little info from Ritrama lately on the ink delam[ination] issue. That greatly concerns me. We are not going to let this just pass by- we still want to know the root cause and the corrective action to insure [sic] this never again occurs. The problem has damaged our reputation in the RV industry, and we need to be sure that the issue is resolved. This is a serious issue, and I am concerned that you have not participated in the recent followup [sic] calls. The problem is of a magnitude that we will seek an alternate supplier if this is not definitively resolved.
(Caswell Aff., Ex. E.)
On July 8, 2008, representatives of Ritrama and Burlington met to discuss the problems with the adhesive. (Caswell Aff., Ex. H.) After the meeting, Ritrama's National Accounts Manager detailed his notes of the meeting in an e-mail to Mark Edwards, the President of Burlington:
Mark will be meeting with Keystone next Thursday or Friday to update them on the 530 and where we are going with the claims. Mark indicates that Keystone is taking a clean-cut approach of "moving on". Ritrama will discuss the Keystone claims Monday [sic] during conference call. [Burlington] intends to establish an agreement of an hourly charge for re-work with Keystone. Mark will be compiling a summary of the re-work claims submitted to them since April of 2007. Mark has requested that Ritrama provide information as to what they will need to review all material pertaining to the claim....
( Id. )
On September 9, 2008, Burlington sent an e-mail titled "Subject: RV Claims" to Ritrama attaching a spreadsheet for "3 of the RV claims" and describing claims for monetary damages totaling $53, 219.37 resulting from Ritrama's defective cast vinyl adhesive product. (Caswell Aff., Exs. I & J.) A representative of Ritrama responded to Burlington's e-mail in part as follows:
I know we have been playing a bit of phone tag over the past two weeks. Our group discussed the original $53k claim that was submitted to me. I need to know how much of this claim pertains to "re-work/labor" and "material costs". We would like an idea of how this breaks out. If you can provide this information with a percentage breakdown, that would be helpful. I also need to know a bit more on [Burlington's] expectation as to how much Ritrama should share in this claim. We are concerned about these claims growing further on the $$$ side of things.... Ritrama is interested in establishing a resolution here as well as some closure to the entire case....
(Caswell Aff., Ex. I.) Ritrama and Burlington communicated with each other about Ritrama's responsibility for claims relating to the cast vinyl adhesive product failures, as well as future claims arising from the same product failures. ( Id. ) During these discussions, Ritrama referred to these complaints as the "RV Claims." (Caswell Aff., Exs. I & K.)
In a letter dated October 10, 2008, Ritrama's Technical Director, Bill Stalker, presented Burlington President, Mark Edwards, with a settlement proposal:
[B]urlington is receiving claims from Keystone for defective graphics. Included in these claims are: material costs, removal costs, cleaning cost, application cost, etc. To date Burlington has communicated this claim value to be $53, 219.37.
In light of the above, we would like to offer a reasonable settlement proposal of 50% of the $53, 219.37, or an immediate credit issued to Burlington in the amount of $26, 609.69. When this credit is issued, Ritrama will consider this claim closed.
(Caswell Aff., Ex. L.) On November 5, 2008, Bill Stalker of Ritrama sent Mark Edwards of Burlington another offer:
In regards to the Keystone Complaint, Burlington  has received $53, 219.37 in claims plus an additional $26, 000 (approximately) that recently came in. Though more claims are likely, the rate ...