TRI COAST, LLC v. THE SHERWIN-WILLIAMS COMPANY
1:16-cv-03366
D.N.J.Jan 18, 2018Background
- Tri Coast LLC contracted to paint metal roofs at FCI Fairton and purchased a primer (Dura-Plate 235 MP Epoxy) and finish (Envirolastic 840 DTM Urethane) from Sherwin‑Williams.
- Sherwin‑Williams provided product data, application bulletins, and a Schedule Guide (all attached to a single November 10, 2013 email) that included warranty and disclaimer language.
- After application in 2014, the paint system peeled from nearly all roofs; Tri Coast repainted in 2015 using different products and those coatings have not failed.
- Tri Coast sued asserting breach of implied warranty of fitness for a particular purpose, breach of contract, and negligent misrepresentation; Sherwin‑Williams moved for partial summary judgment to dismiss all but the contract claim and to limit damages.
- The court found (1) the UCC disclaimer was conspicuous and effectively disclaimed the implied warranty of fitness, (2) the negligent misrepresentation claim was barred by the economic‑loss doctrine, and (3) the contract’s remedies clause allowed replacement or refund and permits recovery of foreseeable repair costs (e.g., labor and equipment rental).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Sherwin‑Williams effectively disclaimed the implied warranty of fitness for a particular purpose | Disclaimer not sufficiently conspicuous / not specific to the sale | Disclaimer is conspicuous (capitalized/contrasting) and was part of documents sent specifically for Fairton | Disclaimer effective; Count 1 dismissed |
| Whether the disclaimer applied to the specific Fairton sale because the Schedule Guide lacked the disclaimer | The Schedule Guide (sale‑specific) contains a 15‑year warranty and no disclaimer, so implied warranty survives | All relevant documents (including Schedule Guide and product bulletins with disclaimer) were sent together for Fairton; disclaimer applies to the sale | Disclaimer applied to the Fairton transaction |
| Whether negligent misrepresentation claim is barred by the economic‑loss doctrine | No enforceable contract; open account/supply relationship means tort remedies available | Economic‑loss rule bars tort claims that merely seek contract‑style economic recovery in a commercial sale governed by the UCC | Economic‑loss doctrine bars Count 3 (negligent misrepresentation dismissed) |
| Proper scope of recovery under the contractual limitation of remedies (replacement or refund) | Tri Coast seeks labor and equipment rental to remove/replace failed system | Sherwin‑Williams seeks limitation to purchase price only | Remedies clause unambiguously provides replacement or refund; replacement covers foreseeable repair/replacement costs including labor and rental; damages not limited to purchase price |
Key Cases Cited
- Celotex Corp. v. Catrett, 477 U.S. 317 (summary judgment standard and movant burden)
- Anderson v. Liberty Lobby, 477 U.S. 242 (genuine dispute and reasonable jury standard)
- Scott v. Harris, 550 U.S. 372 (court may disregard utterly discredited factual versions)
- Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (summary judgment where record could not lead a rational trier of fact for nonmovant)
- Saltiel v. GSI Consultants, 170 N.J. 297 (economic‑loss doctrine and distinction between tort and contract duties)
- Spring Motors Distributors, Inc. v. Ford Motor Co., 98 N.J. 555 (UCC as exclusive framework for economic loss in sales context)
- Henry Heide, Inc. v. WRH Prods. Co., Inc., 766 F.2d 105 (3d Cir.) (commercial sales dispute: negligent misrepresentation analyzed under UCC/economic‑loss principles)
- Alloway v. Gen. Marine Indus., L.P., 149 N.J. 620 (consequential and economic loss definitions under New Jersey law)