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Agropur, Inc. v. The Scoular Co.

United States District Court, D. Minnesota

August 8, 2017

AGROPUR, INC., Plaintiff,
v.
THE SCOULAR COMPANY, Defendant.

          ORDER

          JOAN N. ERICKSEN UNITED STATES DISTRICT JUDGE

         Plaintiff Agropur, Inc. (“Agropur”) sues Defendant The Scoular Company (“Scoular”) for alleged breaches of express warranty (Count I), implied warranties (Count II), and contract (Count III) in connection with the manufacture and sale of protein beverages that became moldy. See Compl., Dkt. No. 1. Scoular moves for partial dismissal of the Complaint pursuant to Federal Rule of Civil Procedure 12(b). Dkt. No. 20. Scoular also moves for an extension of time to respond to the Complaint, requesting a deadline of 14 days after a ruling on the motion to dismiss. Id.

         A. Motion to Dismiss

         To survive a motion to dismiss, a complaint “must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Neubauer v. FedEx Corp., 849 F.3d 400, 404 (8th Cir. 2017) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). “In a case involving a contract, the court may examine the contract documents in deciding a motion to dismiss.” Stahl v. U.S. Dep't of Agric., 327 F.3d 697, 700 (8th Cir. 2003) (citation omitted); see also Neubauer, 849 F.3d at 403.

         Scoular moves to dismiss Count I “to the extent it depends upon an extra-contractual email (see Compl. ¶¶ 11, 37, 41) . . . .” Scoular Br. 13, Dkt. No. 22. Agropur does not dispute the issue, conceding that the email is not “independently actionable.” Agropur Opp. 17, 18 n.3, Dkt. No. 29. Scoular's narrow request to dismiss part of Count I is therefore granted.

         Scoular also moves to dismiss Count II, which alleges breach of implied warranties, on the ground that the parties' contract disclaimed all implied warranties. Agropur argues that the contract's attempted disclaimer was ineffective under Minnesota law.

         Under Minnesota law incorporating the Uniform Commercial Code, implied warranties of merchantability and fitness may be excluded or modified from a contract for a sales transaction. The statute provides in part:

(2) Subject to subsection (3), to exclude or modify the implied warranty of merchantability or any part of it the language must mention merchantability and in case of a writing must be conspicuous, and to exclude or modify any implied warranty of fitness the exclusion must be by a writing and conspicuous. . . .
(3) Notwithstanding subsection (2)[, ]
(a) unless the circumstances indicate otherwise, all implied warranties are excluded by expressions like “as is, ” “with all faults” or other language which in common understanding calls the buyer's attention to the exclusion of warranties and makes plain that there is no implied warranty . . . .

Minn. Stat. § 336.2-316 (1986) (emphasis added). The statute defines “conspicuous” as “so written, displayed, or presented that a reasonable person against which it is to operate ought to have noticed it.” Id. § 336.1-201, subd. b(10). It further provides that “[c]onspicuous terms include the following:”

(A) a heading in capitals equal to or greater in size than the surrounding text, or in contrasting type, font, or color to the surrounding text of the same or lesser size; and
(B) language in the body of a record or display in larger type than the surrounding text, or in contrasting type, font, or color to the surrounding text of the same size, or set off from surrounding text of the same size by symbols or other marks that call attention to the language.

Id. Statutory commentary explains that “[t]his definition states the general standard that to be conspicuous a term ought to be noticed by a reasonable person.” Minn. Stat. Ann. § 336.1-201, UCC Cmt. 10 (Westlaw through laws of 2017 Reg. & 1st Special Sess.). The word “conspicuous” is meant to express the requirement that a term, to be effective, must be “sufficiently prominent to attract attention to it.” Id., Cmt. to Subsection 1-201(10). The illustrations provided in subsections (A) and (B) simply “set out several methods for making a term conspicuous, ” which are not exhaustive and should not displace the test of “whether attention can reasonably be expected to be called to” the disclaimer. Id., UCC Cmt. 10; see also Agristor Leasing v. Guggisberg, 617 F.Supp. 902, 909 (D. Minn. 1985). Commentary states that “[r]equiring that a term be conspicuous blends a ...


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