Babcock & Wilcox Co. v. Cormetech, Inc., 848 F.3d 754

Background

Babcock & Wilcox (B&W) contracted with Cormetech for SCR catalyst guaranteed to perform 24,000 hours; SCR began operating April 2007.
Early testing (June–Oct 2007) showed elevated ammonia slip and evidence of calcium/phosphorous on catalyst elements; Cormetech investigated and recommended continued monitoring and testing.
B&W notified Cormetech of concerns (Aug 21, 2007); Cormetech continued to investigate and repeatedly assured B&W it could meet the warranty until formal performance test results in Aug–Sep 2008 showed catalyst life failure.
KCP&L separately notified that the SCR did not meet performance guarantees; B&W performed a root-cause analysis (Feb 2009) listing seven contributing factors (none attributed solely to Cormetech) and KCP&L later replaced cyclone burners, which remedied the issue.
B&W settled KCP&L’s claim for $8.5M, sued Cormetech in 2012 (re-filed 2014 after tolling), asserting breach of performance warranty and contractual indemnity for settlement losses; district court granted summary judgment for Cormetech on both claims.
Sixth Circuit vacated summary judgment and remanded, holding genuine factual disputes exist about (1) when the warranty breach accrued and (2) whether Cormetech omitted material design considerations (phosphorous poisoning) that could support indemnity.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
When did breach-of-performance-warranty accrue under Ohio R.C. § 1302.98?	Accrual occurred in Sept 2008 when testing showed catalyst reached end of useful life; suit was timely.	Accrual occurred by Oct 2007 (earlier test results and B&W letters), so suit was time-barred.	Vacated summary judgment — genuine issue exists whether accrual was Oct 2007 or Sept 2008; court must view evidence in plaintiff's favor.
Is B&W entitled to contractual indemnity for settlement losses because of a Cormetech defect or omission?	Cormetech failed to account for phosphorous poisoning in catalyst design — expert and employee testimony create triable issue.	B&W’s employees offered hindsight speculation; root-cause report and expert deposition do not identify a Cormetech omission; indemnity unsupported.	Vacated summary judgment — sufficient evidence (expert report + witness testimony) creates genuine dispute for jury on omission and indemnity.
Proper application of summary judgment standards?	Evidence viewed in light most favorable to nonmovant should create fact questions.	District court weighed evidence and discredited plaintiff testimony.	Sixth Circuit held district court impermissibly weighed evidence and resolved credibility at summary judgment stage.
Effect of discovery rule language in § 1302.98(B) on accrual timing?	Discovery-rule accrual applies when breach is or should have been discovered.	Discovery rule allows accrual when plaintiff should have known earlier.	Court (and concurrence) emphasized accrual when breach itself is discovered; factual dispute remains whether breach was discovered in 2007 or 2008.

Key Cases Cited

Smith v. Perkins Bd. of Educ., 708 F.3d 821 (6th Cir. 2013) (summary judgment standard; view evidence for nonmovant)
Sierra Club v. ICG Hazard, LLC, 781 F.3d 281 (6th Cir. 2015) (mere scintilla or metaphysical doubt insufficient to defeat summary judgment)
Crouch v. Honeywell Int’l, Inc., 720 F.3d 333 (6th Cir. 2013) (materiality definition for summary judgment)
Lutz v. Chesapeake Appalachia, L.L.C., 717 F.3d 459 (6th Cir. 2013) (burden on defendant to prove statute of limitations defense)
Miles v. Kohli & Kaliher Assoc., Ltd., 917 F.2d 235 (6th Cir. 1990) (accrual where a correct identification and communication of the problem put plaintiff on notice)
Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (U.S. 1986) (at summary judgment court may not weigh evidence or assess credibility)
Bell v. Ohio State Univ., 351 F.3d 240 (6th Cir. 2003) (hindsight and speculation insufficient to create genuine issue)