BC's Heating & Air & Sheet Metal Works, Inc. v. Vermeer Manufacturing Co.

892 F. Supp. 2d 779, 2012 WL 3811785, 2012 U.S. Dist. LEXIS 125044
CourtDistrict Court, S.D. Mississippi
DecidedSeptember 4, 2012
DocketCivil Action No. 2:11-CV-136-KS-MTP
StatusPublished
Cited by1 cases

This text of 892 F. Supp. 2d 779 (BC's Heating & Air & Sheet Metal Works, Inc. v. Vermeer Manufacturing Co.) is published on Counsel Stack Legal Research, covering District Court, S.D. Mississippi primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
BC's Heating & Air & Sheet Metal Works, Inc. v. Vermeer Manufacturing Co., 892 F. Supp. 2d 779, 2012 WL 3811785, 2012 U.S. Dist. LEXIS 125044 (S.D. Miss. 2012).

Opinion

Memorandum Opinion and Order

KEITH STARRETT, District Judge.

For the reasons stated below, the Court grants in part Defendant Vermeer Manufacturing Company’s Motion for Summary Judgment [228], and grants in part Defendant Vermeer Midsouth Inc.’s Motion for Summary Judgment [280].

I. Background

Plaintiff BC’s Heating & Air and Sheet Metal Works, Inc. (“BC’s”) purchased the drill which is the subject of this case, and Plaintiff Clark Lowery is the president and owner of BC’s. There are two corporate entities remaining as Defendants. Vermeer Manufacturing Company (“Vermeer”) manufactured the drill, while Vermeer Midsouth, Inc. (“Midsouth”) sold it to Plaintiff BC’s. Plaintiffs allege that Defendants made certain representations about the capabilities and performance of the drill prior to the purchase, and that the drill did not perform in the manner that Defendants represented it would.

Plaintiffs brought a variety of claims, and the Court dismissed many of them. Several claims remain, though, including Plaintiffs’ warranty and negligence claims. Each Defendant filed a motion for sum[782]*782mary judgment [228, 230], and all of the parties filed Dauberb motions [223, 226, 232], The Court scheduled a Dauberb hearing, and it intends to wait until after the hearing to resolve some aspects of Defendants’ motions for summary judgment. However, many of the issues raised in the motions are ripe for review, and the Court shall now address them.

II. Standard of Review

Rule 56 provides that “[t]he court shall grant summary judgment 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); see also Sierra Club, Inc. v. Sandy Creek Energy Assocs., L.P., 627 F.3d 134, 138 (5th Cir.2010). “Where the burden of production at trial ultimately rests on the nonmovant, the movant must merely demonstrate an absence of evidentiary support in the record for the nonmovant’s case.” Cuadra v. Houston Indep. Sch. Dist., 626 F.3d 808, 812 (5th Cir.2010) (punctuation omitted). The nonmovant “must come forward with specific facts showing that there is a genuine issue for trial.” Id. (punctuation omitted). “An issue is material if its resolution could affect the outcome of the action.” Sierra Club, Inc., 627 F.3d at 138. “An issue is ‘genuine’ if the evidence is sufficient for a reasonable jury to return a verdict for the nonmoving party.” Cuadra, 626 F.3d at 812.

The Court is not permitted to make credibility determinations or weigh the evidence. Deville v. Marcantel, 567 F.3d 156, 164 (5th Cir.2009). When deciding whether a genuine fact issue exists, “the court must view the facts and the inference to be drawn therefrom in the light most favorable to the nonmoving party.” Sierra Club, Inc., 627 F.3d at 138. However, “[c]onclusional allegations and denials, speculation, improbable inferences, unsubstantiated assertions, and legalistic argumentation do not adequately substitute for specific facts showing a genuine issue for trial.” Oliver v. Scott, 276 F.3d 736, 744 (5th Cir.2002).

III. Vermeer’s Motion for Summary Judgment [228]

A. Plaintiff Lowery’s Derivative Claims

First, Vermeer Manufacturing Company argues that all of Plaintiff Clark Lowery’s derivative claims should be dismissed because he was not a party to the purchase of the drill. In response, Plaintiff Lowery claims that Defendants’ representatives made express representations to him in his “individual capacity,” and he notes that he executed a personal guaranty incident to the transaction at issue. The Court already dismissed a number of Plaintiff Lowery’s claims, but the following ones remain: breach of the implied warranty of merchantability, breach of express warranty, negligence/gross negligence, negligent/intentional infliction of emotional distress, and rescission of the personal guaranty.

“Under Mississippi law, a corporation is an entity separate and distinct from its stockholders.” Bruno v. Southeastern Servs., Inc., 385 So.2d 620, 621 (Miss.1980); see also Burroughs v. McDaniel, 886 So.2d 748, 751 (Miss.Ct.App.2004). Accordingly, this Court has noted:

In Mississippi, an action to redress injuries to a corporation, whether arising in contract or in tort cannot be maintained by a stockholder in his own name, but must be brought by the corporation because the action belongs to the corporation and not the individual stockholders whose rights are merely derivative ... even though the complaining stockholder owns all or substantially all of the stock of the corporation.... An exception to [783]*783this rule arises where the stockholder seeks damages for the violation of a duty owed directly to him, but the exception comes into play only where the wrong itself amounts to a breach of the duty owed to the stockholder personally. The exception has no application merely because the acts complained of resulted in damage both to the corporation and to the stockholder.

Jordan v. United States Fid. & Guar. Co., 843 F.Supp. 164, 175 (S.D.Miss.1993) (punctuation and internal citations omitted); see also Mathis v. ERA Franchise Sys., 25 So.3d 298, 301 (Miss.2009).

It is undisputed that Plaintiff BC’s purchased the drill at issue in this case— not Plaintiff Lowery. Even if Defendants made representations to Lowery, he was not a party to the purchase of the drill. The only transaction to which Lowery was a party was his personal guaranty of BC’s loan from De Lage Landen Financial Services, Inc., but Vermeer was not a party to that transaction. Therefore, Lowery can not seek damages for the violation of duties owed to BC’s pursuant to the purchase transaction, and he has not demonstrated — legally or factually — that Vermeer owed any duty to him personally as a result of the sale.

Accordingly, the Court grants Vermeer’s motion for summary judgment as to all claims asserted against it by Plaintiff Clark Lowery that are merely derivative of BC’s claims. To be clear, it appears that the only claim asserted by Lowery related to duties owed to him personally is the claim for rescission of his personal guaranty of BC’s loan. Therefore, his claims for intentional and negligent infliction of emotional distress, breach of implied warranty of merchantability, breach of express warranty, negligence, and gross negligence are dismissed.

B. Breach of Duty of Good Faith & Fair Dealing

In Mississippi, “[a]ll contracts contain an implied covenant of good faith and fair dealing in performance and enforcement.” Cenac v. Murry, 609 So.2d 1257, 1272 (Miss.1992). “Good faith is the faithfulness of an agreed purpose between two parties, a purpose which is consistent with justified expectations of the other party.

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892 F. Supp. 2d 779, 2012 WL 3811785, 2012 U.S. Dist. LEXIS 125044, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bcs-heating-air-sheet-metal-works-inc-v-vermeer-manufacturing-co-mssd-2012.