American Aerial Services, Inc. v. Terex USA, LLCAmerican Aerial Services, Inc. v. Terex USA, LLC
ORDER ON THE DEFENDANTS’ MOTIONS FOR SUMMARY JUDGMENT
This matter is before the court on the Motions for Summary Judgment filed by the defendants, Terex USA, LLC (“Te-rex”) and The Empire Crane Company, LLC (“Empire”) (ECF Nos. 87 and 89, respectively). After careful review, I conclude that the defendants’ motions should be GRANTED IN PART and DENIED IN PART.
I. INTRODUCTION
The plaintiff, American Aerial Services, Inc. (“American Aerial”) is a Maine company which supplies cranes and labor for the construction of steel buildings and other steel structures, and also rents cranes.
In December 2011, Read contacted Chet Zerrillo, a salesman working for Empire, which is an authorized Terex dealer for the northeast United States, including the State of Maine. ECF No. 93 at 3. Shortly after speaking with Read about the potential purchase of a new crane and his interest in the Terex T-780, Zerrillo emailed Read on December 14, 2011, stating that, “[w]e found 1 T-780. It is at the factory, having just come off the line. I will not know until tomorrow if we can get it (however the dealer that ordered it has gotten many units from us)[.] I will not know the specs, or the price until tomorrow.” ECF No. 95-7 at 2. Zerrillo attached to his email a Terex advertising brochure (the “Data Sheet”) which included the Crane’s various specifications and information about its lifting capacity, which was presented in the form of a “load chart.” ECF No. 93 at 3. Read stated that the Data Sheet was “a primary factor” in his decision to purchase a T-780. Id. at 4. Each page of the Data Sheet containing load chart information also contained a disclaimer at the bottom which read, in small print, “[d]ata published herein is intended as a guide only and shall not be construed to warrant applicability for lifting purposes.” Data Sheet, ECF No. 75-4 at 8-17.
Unknown to American Aerial, and contrary to Zerrillo’s December 14 email, the Crane had not “just come off the line” and was not at the Terex factory, but instead was parked on a nearby storage lot. ECF No. 77-2 at 16. The Crane had actually been built five months earlier in July 2011, when it was purchased by a Terex distributor, Cropac Equipment, Inc. (“Cropac”), and was then parked and stored on Cro-pac’s storage yard awaiting a final purchaser. Id.; ECF No. 77-3 at 48.
On December 16, just two days after Zerrillo sent his email to Read, American Aerial signed a one-page sales contract with Empire to purchase the Crane for $615,000.00. ECF No. 77-1. The contract did not contain any language concerning warranties, warranty exclusions or limitations. Id. Approximately one week later, both parties agreed to a contract modification, whereby Empire agreed to deliver the Crane to American Aerial in Maine “no later than 11:49 pm on December 31, 2011.” ECF No. 95-8 at 2. American Aerial took delivery at its headquarters in Gray, Maine on December 30. ECF No. 93 at 4.
On January 6, 2012, a technician from Empire came to Maine to perform a delivery inspection of the Crane, and determined that the Crane’s engine was 22 quarts low on coolant and had likely been driven from Iowa to Maine in that condition. ECF No. 95 at 5-6, ¶¶20, 22-25. The same day, Read wrote a letter to Zerrillo to announce that he was “revoking the acceptance” of the Crane due to a partially shredded serpentine belt in the engine and the fact that the Crane had apparently been driven 1500 miles without
In late February 2012, Read emailed Zerrillo again, stating that the recently-replaced serpentine belt in the Crane’s engine had disintegrated again and that “the roof of the driver’s cab leaks, the jib will not retract properly, the boom is not fully retracting, fluid leaks under the engine, the boom sheaves slides [sic] side to side during operation causing the cable to fall off the boom and the smell of coolant is wafting through the air as the engine ran [sic].” ECF No. 95-11 at 2. Throughout March, April, and May 2012, Read spoke by telephone with Empire personnel about the Crane’s multiple problems. ECF No. 95 at 8, ¶ 33. In June 2012, Read sent an email to Luke Lonergan, Empire’s owner, regarding “issues that remain unresolved with the [Crane] that I purchased from you,” and stating additional alleged problems with the Crane, including a bent pulley, a faulty driver cab door, and an allegedly defective lock on the crane boom. ECF No. 95-12 at 2.
In August 2012, American Aerial hired a third-party vendor, Certified Boom Repair Service Northeast, LLC (“Certified Boom”), to repair damage to the “rooster sheave,” a component of the Crane which bolts to the top of the main telescoping boom. ECF No. 95 at 9, ¶41. In the course of making these repairs, service personnel at Certified Boom informed Read that certain welds on the Crane’s main boom and jib were defective. Id. at ¶ 42. The Crane was then inspected two weeks later by Ed Fleischer, a Terex Technical Support Representative, who met with Read to review all of American Aerial’s complaints about the Crane. Def.’s Stmt. Undisp. Mat. Fact, ECF No. 88 at 13, ¶ 69.
Two days after Fleischer inspected the Crane on behalf of Terex, American Aerial hired its own consultant, Roaring Brook Consultants, Inc. (“Roaring Brook”), to inspect the Crane. ECF No. 95 at 10, ¶ 46. As part of its inspection, Roaring Brook performed a “load test” to determine whether or not the Crane could safely lift the amount of weight for which it was rated. Id at 11, ¶ 50. Paul Roberts, the Roaring Brook inspector, testified that he ended the load test early when the Crane was lifting only 60% of its rated capacity because he was concerned about the Crane rolling over. Roberts Dep., ECF No. 82-1 at 12-13.
In mid-September, Fleischer submitted a written report to Empire regarding American Aerial’s complaints with the Crane. Fleischer Rept., ECF No. 78-11. The report recommended that an authorized dealer of the engine manufacturer replace a fan shroud which covered the engine’s radiator and otherwise “troubleshoot” the Crane’s engine. ECF No. 78-11 at 3 and 10. With regard to the other alleged defects, Fleischer suggested variously that the problem had already been repaired; or that it was the result of “operator error;” or was the result of unspecified “unknown repairs;” some of the asserted defects did not exist; or that the problem could be corrected by “dressing up the bad areas.” See id. at 2-10. In short, the Fleischer report suggested that Cummins, Inc., the manufacturer of the Crane’s engine, should perform work on the Crane and do follow-up troubleshooting, but that there was no corrective work for Terex to perform.
II. SUMMARY JUDGMENT STANDARD
A. Federal Rule of Civil Procedure 56
Summary judgment is appropriate “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a); Ahmed v. Johnson,
The party moving for summary judgment must demonstrate an absence of evidence to support the nonmoving party’s case. Celotex Corp. v. Catrett,
B. Local Rule 56
The evidence that the court may consider in deciding whether genuine issues of material fact exist for purposes of summary judgment is circumscribed by the local rules of this district. See Loe. R. 56. The moving party must first file a statement of material facts that it claims are not in dispute. See Loe. R. 56(b). Each fact must be set forth in a numbered paragraph and supported by a specific record citation. See id. The nonmoving party must then submit a responsive “separate, short, and concise” statement of material facts in which it must “admit, deny or qualify the facts by reference to each numbered paragraph of the moving party’s statement of material facts[.]” Loe. R. 56(c). The nonmovant likewise must support each denial or qualification with an appropriate record citation. See id. The
Local Rule 56 directs that “[f]acts contained in a supporting or opposing statement of material facts, if supported by record citations as required by this rule, shall be deemed admitted unless properly controverted.” Loe. R. 56(f). In addition, “[t]he court may disregard any statement of fact not supported by a specific citation to record material properly considered on summary judgment” and has “no independent duty to search or consider any part of the record not specifically referenced in the parties’ separate statement of faet.” Id.; see also, e.g., Borges ex rel. S.M.B.W. v. Serrano-Isern,
III. LEGAL ANALYSIS
A. Agency Law
In order to rule on Terex and Empire’s respective motions for summary judgment, it is necessary to first address the parties’ arguments for and against the existence of an agency relationship between Terex and Empire.
Agency is a fiduciary relationship resulting from “the manifestation of consent by: one person to another that the other shall act on his behalf and subject to his control, and consent by the other so to act.” J & E Air, Inc. v. State Tax Assessor,
Apparent authority is that “which, though not actually granted, the principal knowingly permits the agent to exercise or which he holds him out as possessing.” Steelstone Industries, Inc. v. North Ridge Ltd. Partnership,
American Aerial argues that Empire was the agent of Terex based upon the following alleged conduct: Terex allowed Empire to be an authorized Terex dealer; Terex listed Empire on the “dealer locator” section of its website; Terex allowed Empire to display the Terex name and logo on Empire’s website and in its retail locations; Terex supplied promotional materials such as the Data Sheet for Empire to use in selling its products; and Terex maintained control over warranty
Here, by contrast, there is no such evidence that Terex trained Empire personnel or sold equipment directly to Empire. None of the documents signed by American Aerial’s principal, James Read, featured the Terex logo or even mentioned Terex other than to identify the type of crane being sold. Modified Contract, ECF No. 95-8 at 2. Although Terex did supply Empire with its Data Sheet, which Empire in turn furnished to American Aerial, this alone is not a sufficient basis upon which to reasonably believe that an agency relationship existed, according to American Aerial’s own cited authority. See Malm-berg v. American Honda Motor Co., Inc.,
In addition to Malmberg, American Aerial also cites Azimi v. Ford Motor Company,
Accordingly, I am not persuaded that a reasonable jury could infer from Terex’s conduct that American Aerial reasonably believed Empire to be the agent of Terex on the basis of apparent authority.
B. COUNT ONE: BREACH OF CONTRACT AND BREACH OF WARRANTY
1. Breach of Contract
American Aerial asserts one claim for breach of contract against Empire and Terex, arguing that the contract called for one “new” crane, and that the Crane which was delivered was not “new” due to the fact that it sat on an open-air lot without having been properly stored or maintained for approximately five months before be
The sales contract between Empire and American Aerial states that the equipment sold was a “[n]ew 2011 Terex T780-80 ton Hydraulic Truck Crane.” ECF No. 95-8 at 2. Empire asserts that the Crane was “new” at the time of purchase because there is no evidence that the crane was utilized prior to delivery. ECF No. 89 at 6. Neither party cites any authority or statute to support its definition of the word “new,” although American Aerial does cite Black’s Law Dictionary, which defines “new” as “recently come into being.” Black’s Law Dictionary, 1140-41 (9th ed.2009).
Maine law categorizes a truck crane as “special mobile equipment,” which is defined as “a motor vehicle with permanently mounted equipment not designed or used primarily for the transportation of persons or property.” 29-A M.R.S.A. § 101(70). Unfortunately, the statute does not define “new” special mobile equipment. See generally 29-A M.R.S.A.
Maine’s Motor Vehicle Dealers Act, 10 M.R.S.A. § 1171-1186 (“the Dealers Act”), defines a “new motor vehicle” as “a motor vehicle that has not been previously sold to any person except a distributor, wholesaler or motor vehicle dealer for resale by franchise.” 10 M.R.S. § 1171(13). Although a “motor vehicle” in this context is a vehicle designed or used to transport people or property (a task specifically excluded from the definition of special mobile equipment), this definition nevertheless sheds light on how to distinguish a “new” truck crane from one that is not “new.”
Further guidance can be found in decisions from the federal courts. For example, the United States Environmental Protection Agency (“E.P.A.”) has defined a “new” vehicle for purposes of federal environmental regulation as a “vehicle[ ] ... for which the legal or equitable title ha[s] never been transferred to the ultimate purchaser,” and which has not been “put to use.” Engine Mfrs. Ass’n v. E.P.A.,
In this case, it is undisputed that the entities which purchased the Crane before it was ultimately sold to American Aerial— Cropac and Empire—are both authorized Terex distributors. ECF No. 88, ¶¶ 2, 6, 7, 18, 20, 26, 35; ECF No. 95 at 2, ¶ 6, 9 It is also undisputed that Cropac and Empire purchased the Crane in order to resell it, and that American Aerial purchased the Crane in order to put it to use. Id.; ECF No. 95 at 1, ¶ 2. In light of these undisputed facts, I conclude as a matter of law that the Crane was “new” when Empire sold it to American Aerial. Therefore, the defendants’ motions for summary judgment with regard to American Aerial’s claim for breach of contract are GRANTED.
2. Breach of Warranty
The defendants seek summary judgment as to American Aerial’s warranty claims on several bases.
Terex argues that American Aerial’s breach of warranty claims must fail because Terex only learned of the Crane’s alleged defects in late August 2012 and did not have the opportunity, to repair the Crane before American Aerial filed its suit for breach of warranty and other claims. ECF No. 87 at 16. However, Terex does not deny that reports about the Crane’s alleged defects were entered into its own Customer Relations Software (“CRM”) starting in January 2012 and continuing through August 2012.
(2) Adequacy of Notice
Where a tender has been accepted, the buyer must within a reasonable time after he discovers or should have discovered any breach notify the seller of breach or be barred from any remedy;
11 M.R.S.A. § 2-607(3)(a) (the “Maine UCC”).
The parties dispute whether American Aerial provided notice to the defendants within a reasonable time as required by § 2-607(3)(a) of the Maine UCC. ECF No. 87 at 16-18; ECF No. 89 at 12. American Aerial argues that § 2-607(3)(a) requires merely that notification “be sufficient to let the seller know that the transaction is still troublesome and must be watched,” ECF No. 96 at 8 (quoting § 2-607 Comment 4), and claims that its notice to the defendants was sufficient because it wrote to Empire on multiple occasions about its dissatisfaction with the Crane beginning in January 2012 and continuing through September 2012. ECF No. 93 at 16-18. American Aerial also points out that Read met with Ed Fleischer, the Terex representative, in August 2012 at American Aerial’s office in Maine, where Fleischer inspected the Crane and spoke at length to Jim Read. Id.; PI. Add’l. Stmt. Mat. Facts, ECF No. 95 at 9-10, ¶¶ 43, 44, 45; ECF No. 96 at 8-9.
The defendants argue that American Aerial’s communications to Empire regarding the alleged problems with the Crane constituted notice of defects only, rather than notice of a claimed breach of warranty, and assert that Read did not consider the warranty breached until September 2012. ECF No. 89 at 12, 13. The defendants argue that this distinction is important because “even if the seller knows of defects in the goods, the buyer must notify the seller of the buyer’s claim that the defects constitute a breach.” ECF No. 87 at 17 (citing M.K Associates v. Stowell Products, Inc.,
Although the question of whether notice was given is one of fact, the question of whether the notice satisfied the UCC is one of law. K & M Joint Venture v. Smith International, Inc.,
Though the defendants rely upon this court’s opinion in M.K. Assoc., the facts of that case are inapposite to the facts here. In M.K. Assoc., the defendant purchased wooden dowels from the plaintiff and noticed that some of the dowels were defective but did not notify the plaintiff for four months.
In this case, by contrast, Read did not merely list the defects with the Crane, as the defendants suggest. See ECF No. 87 at 17-18; ECF No. 89 at 12. Having taken delivery of the Crane on December 30, 2011, Read wrote to Empire seven days later to revoke American Aerial’s acceptance, stating that “it is my expectation that you will recognize that there was a failure to deliver a crane ready for service.” ECF Nos. 95-9. Two days later, Read emailed Chet Zerrillo stating that he sought “to preserve all of the rights of American Aerial Services to ensure that it received what it paid for and to timely notify all concerned parties of the problem.” ECF No. 95-10 at 2. More correspondence regarding American Aerial’s dissatisfaction with the Crane followed over the next six months. See ECF Nos. 95-11, 95-12, 95-13, 95-14, 95-15, 95-16. While several of these emails do indeed amount to a laundry list of alleged defects, when viewed in the aggregate, the Read emails simply are not comparable to the single conversation found to constitute lack of notice in M.K. Assoc. The magic words “breach of warranty” are not to be found in any of the emails discussed above, but nevertheless, I find that Read’s correspondence to the defendants properly and timely put them on notice that American Aerial considered them to be in breach of warranty. Accordingly, I find that Empire’s and Terex’s respective motions for summary judgment should be DENIED with regard to the adequacy of American Aerial’s notice.
(3) Warranty Limitations Contained in the Cropac-Terex Contract
§ 2-318 of the Maine UCC states that:
Lack of privity between plaintiff and defendant shall be no defense in any action brought against the manufacturer, seller or supplier of goods for breach of warranty, express or implied, although the plaintiff did not purchase the goods from the defendant, if the plaintiff was a person whom the manufacturer, seller or supplier might reasonably haveexpected to use, consume or be affected by the goods.
11 M.R.S.A. § 2-318.
Terex argues that it excluded implied warranties when it sold the Crane to Cropac, and argues that the terms and conditions from that sale also apply to American Aerial pursuant to § 2-318 of the Maine UCC. ECF No. 87 at 18.
American Aerial, on the other hand, cites the Law Court’s opinion in S.H. Nev-ers Corp. v. Husky Hydraulics,
Therefore, in the absence of factual evidence suggesting that American Aerial actually received or agreed to -the terms and conditions of the sale from Terex to Cro-pac, and in light of the authority cited by American Aerial, the warranty disclaimers contained in the sales contract between Terex and Cropac are not applicable and summary judgment should be DENIED with regard to this issue.
(4) Applicability of Terex’s Limited Product Warranty
The defendants argue that American Aerial is subject to the exclusions and limitations contained in the Terex Limited Product Warranty, which they claim was incorporated into the sale of the Crane based upon a reference contained on the back of the Data Sheet, which states that “[t]he only warranty applicable to our equipment is the standard written warranty applicable to the particular product and sale and Terex makes no other warranty, express or implied.” Terex Br., ECF No. 87 at 19-20 and Empire Br., ECF No. 89 at 12 citing Terex Data Sheet, ECF No. 95-7 at 26. In response, American Aerial argues that it never received a copy of Terex’s Limited Product Warranty and that Maine law requires actual receipt of the warranty disclaimer rather than mere incorporation by reference. ECF No. 93 at 21. (citing S.H. Nevers Corp.,
(5) Implied Warranty of Merchantability
Both defendants argue that by inserting a warranty disclaimer into a block of text appearing on the back page of the Data Sheet, Terex properly excluded the implied warranty of merchantability, 11 M.R.S. § 2-314, which states in pertinent part that:
(1) Unless excluded or modified by section 2-316, a warranty that the goods shall be merchantable is implied in a contract for their sale if the seller is a merchant with respect to goods of that kind....
(2) Goods to be merchantable must at least be such as
(a) Pass without objection in the trade under the contract description; and
(c) Are fit for the ordinary purposes for which such goods are used;
11 M.R.S.A. § 2-314.
The implied warranty of merchantability may be excluded or modified pursuant to § 2-316, which states in pertinent part that:
(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. ...
(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....
11 M.R.S.A. § 2-316.
Conspicuousness, as used in § 2-316, is defined by 11 M.R.S.A. § 1-1201(10), which states that:
“Conspicuous,” with reference to a term, means so written, displayed or presented that a reasonable person against which it is to operate ought to have noticed it. Whether a term is “conspicuous” or not is a decision for the court. Conspicuous 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.
11 M.R.S.A. § 1-1201,
(i) Exclusion of the Implied Warranty of Merchantability, § 2-316(2)
The defendants argue that the Data Sheet excludes the implied warranty
(ii) Exclusion of All Implied Warranties, § 2-316(3)(a)
The defendants also assert that the language contained on the back page of the Data Sheet excludes implied warranties pursuant to § 2-316(3)(a), which allows warranty exclusions when accompanied 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.” § 2-316(3)(a). Because the Data Sheet does not contain either the phrase “as is” or “with all faults,” the defendants assert that the language on the back page constitutes the “other language” described by the statute. ECF No. 87 at 21-22. The defendants also cite authority stating that a warranty exclusion under § 2-316(3)(a) need not be conspicuous, unlike an exclusion under § 2-316(2). Empire Reply Br., ECF No. 104 at 5 (citing DeKalb Agresearch, Inc. v. Abbott,
I am not persuaded that the language on the back page of the Data Sheet constitutes an effective disclaimer of implied warranties pursuant to § 2-316(3)(a). For a warranty exclusion to pass muster, the statute requires commonly used phrases such as “with all faults,” or “as is,” which, due to their widespread usage, are immediately recognized as disclaiming warranties even upon casual perusal by nonlawyers. See § 2-316(3)(a). That the drafters of the UCC also permitted a seller to exclude implied warranties with “other language” left open the possibility that parties could use other terms not specified in the statute, but which convey the same meaning as “with all faults” or “as is.” The language on the back of the Data Sheet states simply that “Terex makes no warranty, express or implied.” ECF No. 75-4 at 23. Nothing about this statement could reasonably be said to constitute a term which “calls the buyer’s attention” to the attempted exclusion of all warranties in the same manner as the phrases “as is” or “with all faults,” and therefore, it does not satisfy § 2-316(3)(a).
Accordingly, because Terex’s purported disclaimer is not conspicuous, and because it does not contain other language that would “call the buyer’s attention to the attempted exclusion,” summary judgment in favor of the defendants should be DENIED on the question of whether the implied warranty of merchantability has been properly excluded.
(6) Implied Warranty of Fitness for a Particular Purpose
The implied warranty of fitness for a particular purpose states that
Where the seller at the time of contracting has reason to know any particular purpose for which the goods are required and that the buyer is relying on the seller’s skill or judgment to select or furnish suitable goods, there is, unless excluded or modified under section 2-316, an implied warranty that the goods shall be fit for such purpose.
11 M.R.S.A. § 2-315. The implied warranty of fitness for a particular purpose is narrower than the implied warranty of merchantability. Lorfano v. Dura Stone Steps, Inc.,
A “particular purpose” differs from the ordinary purpose for which the goods are used in that it envisages a specific use by the buyer which is peculiar to the nature of his business whereas the ordinary purposes for which goods are used are those envisaged in the concept of merchantability and go to uses which are customarily made of the goods in question.
§ 2-315, comment 2.
Empire argues that American Aerial did not advise it of a specific purpose or extraordinary use of the Crane. ECF No. 89 at 14. American Aerial counters that Empire knew its particular purpose for the Crane was its equipment rental business, which falls outside the scope of the ordinary purposes for which the Crane would be used because renting a crane “subjected [it] to more frequent and demanding uses than would ordinarily be expected.” ECF No. 96 at 12. However, this is a conclusory statement for which American Aerial has cited no supporting authority or record evidence.
C. COUNT TWO—BREACH OF DUTY OF GOOD FAITH AND FAIR DEALING
This count was dismissed when the court affirmed the recommended decision of the magistrate judge, concluding that “American Aerial’s allegations do not support an inference that any action by Terex or Empire would support a plausible claim of dishonesty or failure to disclose a fact which either defendant had a duty to disclose.” Report and Recommended Decision of the Magistrate Judge, ECF No. 21 at 6; and Order Affirming the Recommended Decision of the Magistrate Judge, ECF No. 32. Accordingly, no further action is required.
D. COUNTS THREE AND FOUR-FRAUD
American Aerial bases its fraud claim against Empire on two alleged misrepresentations. The first alleged misrepresentation is Zerrillo’s email to Read in which he stated that the Crane was “at the factory” and “just ... off the line.” PL’s Opp’n. Brief, ECF No. 96 at 3 (citing ECF No. 95-7 at 2). The second alleged misrepresentation is the fact that Empire provided American Aerial with the Terex Data Sheet, which American Aerial asserts to be a material, intentional misrepresentation of the Crane’s lifting capacity. ECF No. 96 at 4 (citing ECF No. 75-4). American Aerial also asserts that Terex is liable in fraud for the Data Sheet and for Empire’s having provided the Data Sheet as Terex’s alleged agent. ECF No. 93 at 10.
The essential elements of fraud, or fraudulent misrepresentation, are (1) that one party made a false representation; (2) of a material fact; (3) with knowledge of its falsity or in reckless disregard of whether it was true or false; (4) for the purpose of inducing another party to act in reliance upon it; and (5) the other party justifiably relied upon the representation as true and acted upon it to its damage. Flaherty v. Muther,
The economic loss doctrine was adopted by the Law Court in Oceanside at Pine Point Condominium Owners Ass’n, et al. v. Peachtree Doors, Inc.,
[a] situation where the injury suffered is merely the failure of the product to function properly is distinguishable from those situations, traditionally within the purview of tort, where the plaintiff has been exposed, through a hazardous product, to an unreasonable risk of injury to his person or property.
Id. (citing East River S.S. Corp. v. Transamerica Delaval, Inc.,
It is generally accepted that the economic loss doctrine does not extend to claims of fraud where the alleged misrepresentation is independent of the contract, such as claims for fraud in the inducement. Marvin Lumber and Cedar Co. v. PPG Industries, Inc.,
Based upon the foregoing authority and the Oceanside court’s stated rationale for applying the economic loss doctrine in other misrepresentation contexts, I conclude that Maine would extend the economic loss doctrine to claims for fraudulent misrepresentation by a seller to a buyer where the misrepresentation concerns the quality of the goods or product promised in the sales contract. This conclusion is consistent with the purpose of the economic loss doctrine, which is to limit duplicative tort remedies where the alleged harm suffered
Accordingly, American Aerial’s fraud claim is barred by the economic loss doctrine. The defendants’ respective summary judgment motions (ECF No. 87 at 8-13 and ECF No. 89 at 4-9) are GRANTED with regard to Counts Three and Four.
E. COUNT FIVE: PUNITIVE DAMAGES
An award of punitive damages requires evidence that a defendant engaged in tortious conduct and acted with malice, which can take the form of either actual ill will toward the plaintiff or conduct by the defendant that “is so outrageous that malice ... can be implied.” Tuttle v. Raymond,
The grant of summary judgment in the defendants’ favor with regard to American Aerial’s fraud claim, supra, precludes an award of punitive damages because there is no tortious conduct upon which to base such an award. See id. at 1361 (“punitive damages are available based upon tortious conduct only if the defendant acted with malice.”). I conclude, therefore, that the defendants’ respective summary judgment motions (ECF No. 87 at 14 and ECF No. 89 at 9) must be GRANTED as to Count Five as well.
IV. CONCLUSION
For the foregoing reasons, the respective summary judgment motions of Terex and Empire are GRANTED with regard to American Aerial’s breach of contract claim and breach of the implied warranty of fitness for a particular purpose (Count One); GRANTED with regard to American Aerial’s claims for fraud (Counts Three and Four); and GRANTED with regard to American Aerial’s claim for punitive damages (Count Five). The defendants’ summary judgment motions are DENIED IN PART with regard to American Aerial’s breach of the implied warranty of merchantability claim (Count One).
SO ORDERED.
Notes
. A "truck crane” is a self-propelled hydraulic crane that is capable of driving on public roads. The crane's counterweight, boom, and jib are all transported as one unit and do not require disassembly or separate transport. See Read Dep., ECF No. 80-1 at 13.
. American Aerial cites the deposition testimony of Ed Fleischer to establish that Terex used the CRM software, known as "Sales-force,” as its "primary method” for tracking customer complaints and issues related to Te-rex equipment. See ECF No. 95 at 7, ¶ 28. Rather than explicitly deny, this fact, Terex claims that Fleischer’s testimony reveals only that he did not understand the question posed to him by plaintiff’s counsel and therefore does not establish that Salesforce was the “primary method to manage customer relations.” ECF No. 103 at 9, ¶ 28. This distinction is of little consequence because whether Salesforce was the primary method or a secondary method of managing customer relations, Terex does not deny that reports of problems with the Crane found their way into its system as early as January 2012.
. Terex failed to cite the Sales Order Acknowledgment which contains the warranty exclusion and limitations on damages and other remedies. It can be found in ECF No. 77-2 at 7, ¶¶ 7, 8.
. Maine courts do generally regard the Official Commentary as an official source of guid-anee in the interpretation of the UCC. McNally v. Nicholson Mfg. Co.,
. Furthermore, the decisions cited by the defendants for the proposition that an exclusion need not be conspicuous are not controlling under the circumstances presented here. To hold otherwise would allow § 2-316(3) to function as a loophole for the conspicuousness requirement of § 2-316(2), rendering that section of the statute a nullity. Additionally, there is contradictory persuasive authority from other jurisdictions stating that "[cjourts have generally read subsection (2)’s conspicuousness requirement into subsection (3).” Scientific Leasing, Inc. v. Morris,
. American Aerial cites its Additional Statement of Material Facts, ECF No. 95 at 3, ¶ 10, which merely states that Zerrillo visited American Aerial’s offices in Maine on several occasions and would have seen a "conspicuous sign" outside the entrance to the office and upon American Aerial’s vehicles which stated "American Aerial Crane Rental, Steel Erection and Welding Services.” Id. This does not constitute evidence that American Aerial’s cranes were put to more frequent and demanding uses than would ordinarily be expected.
. In barring the plaintiff’s fraud claim, the Werwinski court "held that Pennsylvania's common law economic loss doctrine trumped Pennsylvania's statutory consumer protection statute.” O’Keefe v. Mercedes-Benz USA, LLC,