Shapco Printing, Inc. v. MKM Importers, Inc., 0:21-cv-02155

Background

Shapco negotiated with MKM (Marino) to broker purchase of a KBA commercial printing press for $2.1M; MKM provided photos/videos and repeatedly assured the press would be "fully installed and operable," that MKM would "take care of any issues," replace rollers/hoses, and perform installation by contract deadlines.
The written purchase agreement (governed by Connecticut law) set delivery and installation deadlines, contained an "as-is"/no-warranties clause and a disclaimer of buyer reliance, and limited consequential damages.
When the equipment arrived it allegedly was filthy, water- and rodent-damaged, had rusted motors and chewed wiring, cracked hoses, and was poorly packaged; installation was delayed and allegedly performed with insufficient trained installers.
MKM conducted a GATF test without Shapco's consent in July 2021 (the press passed the test) but the press allegedly remained not fully operational or properly installed.
Shapco sued for breach of contract and fraudulent inducement; MKM moved to dismiss only the fraud claim and to bar recovery of lost customers/profits under the contract's damages limitation.
The Court denied MKM's partial motion to dismiss, holding the fraud claim and the damages claim survive at this stage.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether MKM's pre-contract statements were actionable fraud or mere puffery	MKM made specific, concrete representations (installation, replace rollers/hoses, "take care of any issues") and provided photos/videos that induced Shapco	Statements are non-actionable puffery and general opinion	Court: Some statements were puffery, but several were specific and actionable; photos/videos and concrete promises can support fraud claim
Whether statements by third-party Grupp can be imputed to MKM	Grupp acted as MKM's agent in brokering the sale; his statements induced Shapco	Grupp was not alleged to be MKM's agent, so his statements shouldn't be imputed	Court: Shapco adequately alleged agency for purposes of Rule 12(b)(6); issue is fact-intensive and not resolved now
Whether the contract's "no reliance" / "as-is" disclaimers bar fraud claim	Shapco alleges actual fraudulent inducement so disclaimers should not preclude the claim	The written disclaimer precludes reliance-based fraud claims and negates liability	Court: A disclaimer cannot bar a fraud claim where fraud is alleged; "as-is"/no-warranty language does not defeat allegations of misrepresentations about MKM's intent to install/perform
Whether lost customers and lost profits are barred as consequential damages by the contract	Lost profits from equipment downtime are direct damages naturally following the breach, not barred	Contract expressly excludes consequential damages, so lost profits/customers are barred	Court: Lost profits can be direct (equipment downtime) and not necessarily consequential; ambiguity is construed against drafter (MKM); claim survives

Key Cases Cited

Ashcroft v. Iqbal, 556 U.S. 662 (establishing Rule 12(b)(6) plausibility standard)
Bell Atl. Corp. v. Twombly, 550 U.S. 544 (pleading must state a plausible claim)
Peterson v. McAndrew, 125 A.3d 241 (Conn. App. Ct.) (elements of fraudulent inducement under Connecticut law)
NetScout Sys., Inc. v. Gartner, Inc., 223 A.3d 37 (Conn. 2020) (distinguishing puffery from factual warranty by specificity)
Web Press Servs. Corp. v. New London Motors, Inc., 525 A.2d 57 (Conn. 1987) (oral statements more likely characterized as puffery)
Martinez v. Zovich, 867 A.2d 149 (Conn. App. Ct.) (reliance disclaimer ineffective to bar claims of fraud)
City of Milford v. Coppola Constr. Co., 891 A.2d 31 (Conn. App. Ct.) (lost profits may be direct damages when they naturally flow from breach such as equipment downtime)
Cantonbury Heights Condo. Ass’n, Inc. v. Local Land Dev., LLC, 873 A.2d 898 (Conn. 2005) (ambiguities construed against the drafter)