Northland Industries, Inc., D/B/A Magnum Fitness , Jhtna Manufacturing, L.L.C., and Johsnon Health Tech North America, Inc. v. Gilbert Kouba, Individually and as Representative of the Estate of Audrey Kouba, Karen Williams and Curtis Kouba, 620 S.W.3d 411

Northland (Seller) manufactured and sold commercial treadmills; JHTNA (Buyer) purchased Northland’s assets and agreed to assume only liabilities and obligations "specifically identified" in the asset‑purchase agreement.
The asset‑purchase agreement expressly identified and attached written product warranties (e.g., the Commercial Treadmill Warranty) and limited assumed product warranty claims to those "arising with respect to and during the time periods set forth in the written warranties."
Audrey Kouba died after a treadmill (sold earlier by Northland) allegedly unexpectedly changed speeds; her heirs sued Buyer for negligence, strict liability, and breach of the implied warranty of merchantability.
Buyer moved for summary judgment arguing it assumed only the specified written repair‑or‑replace warranties and disclaimed bodily‑injury product‑liability obligations; the trial court granted summary judgment on all claims.
The court of appeals reversed as to the implied‑warranty claim, reasoning Buyer’s assumption of written warranties necessarily included the implied warranty of merchantability and construing the excluded‑liabilities language narrowly; the Texas Supreme Court granted review and reversed the court of appeals.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the asset purchaser assumed the seller’s implied warranty of merchantability	Koubas: Buyer’s express assumption of product warranty claims includes implied warranties because implied warranties attach to the original sale and fill gaps in the written warranty	Buyer: Contract limits assumption to product warranty claims "solely" arising with respect to the written warranties specifically attached (repair‑or‑replace only)	Court: Buyer did not assume implied warranty; contract unambiguously limited assumed warranty liability to the written repair‑or‑replace warranties
Whether excluded‑liabilities language excludes only product‑liability claims that allege both bodily injury and property damage (court of appeals’ alternative holding)	Koubas: The exclusion should not bar a claim alleging only bodily injury; court of appeals construed exclusion narrowly	Buyer: Exclusion bars product liability claims unless included among the Assumed Liabilities	Court: Did not decide this issue because disposition on assumption language was dispositive; Court construed assumption clause and reversed on implied‑warranty ground

Lockheed Martin Corp. v. Gordon, 16 S.W.3d 127 (Tex. App.—Houston [1st Dist.] 2000, pet. denied) (discusses the rule that asset purchasers do not assume seller’s liabilities absent agreement)
Columbia Propane, L.P. v. Wis. Gas Co., 661 N.W.2d 776 (Wis. 2003) (recognizes exception when purchaser expressly or impliedly assumes seller’s liabilities)
Coker v. Coker, 650 S.W.2d 391 (Tex. 1983) (contract‑construction principles; interpret parties’ intent from the instrument)
Maryland Arms Ltd. P’ship v. Connell, 786 N.W.2d 15 (Wis. 2010) (principles on giving contractual language its ordinary meaning)
Am. Tobacco Co., Inc. v. Grinnell, 951 S.W.2d 420 (Tex. 1997) (discussion of implied warranties and their nature)
Baker Hughes Process & Pipeline Servs., L.L.C. v. UE Compression, L.L.C., 938 F.3d 661 (5th Cir. 2019) (explains coexistence and modification/displacement of express and implied warranties)