Loeffel Steel Products, Inc. v. Delta Brands, Inc.

379 F. Supp. 2d 968, 58 U.C.C. Rep. Serv. 2d (West) 579, 2005 U.S. Dist. LEXIS 15278, 2005 WL 1802094
District Court, N.D. Illinois·Decided July 28, 2005·No. 01-C-9389·Published·Cited by 5 cases

Opinion

MEMORANDUM OPINION AND ORDER

COLE, United States Magistrate Judge.

Plaintiff Loeffel Steel Products, Inc. (“Loeffel”) purchased from defendant Delta Brands Inc. (“DBI”) a rotary shear multi-blanking line (“the Line”) — a machine that cuts and stacks sheets of steel. According to Loeffel, the machine did not perform up to the specifications DBI had promised in the sales contract. It filed suit alleging breach of contract, breach of express warranty, breach of implied warranty of merchantability, breach of implied warranty of fitness for a particular purpose, and fraud.

On February 25, 2004, Magistrate Judge Keys denied DBI’s motion for partial summary judgment, concluding that there existed a number of genuine issues of material fact. A year later, Loeffel has now moved for partial summary judgment on the issue of liability against DBI on all but the claim for fraud. As Local Rule 56.1 (“LR”) requires, it supported the motion with a statement of undisputed material facts, 134 paragraphs long, supported by a record of over 350 pages, the greater portion of which comprised excerpts from the depositions of ten individuals, including *971 both Loeffel and DBI employees. DBI responded with its LR 56.1 offerings, which included a 15-page, 48-paragraph statement of additional facts. These were supported by a 450-page record, the majority of which was comprised of deposition excerpts from over a dozen witnesses. Loeffel’s reply was supported by an additional 150 pages of materials. In response, DBI filed a 54-page motion to strike Loeffel’s reply to DBI’s additional facts, which was in reality a surreply, which is not contemplated by Local Rule 56.1. 1 Loeffel responded to that. Hardly an auspicious beginning for a case where Loeffel claimed there were no disputed factual issues and it was entitled to judgment as a matter of law.

After a careful review of the complex and voluminous materials submitted by both sides, I find myself in much the same position as did Judge Keys, and like Judge Keys, I have concluded that the current motion for summary judgment should be denied. There are still present sharply divergent recollections of what was said, of what was meant, of what certain parts of the contract mean and do not mean, whether the Line performed satisfactorily, and if not, why not, and other related issues. Although this time the motion is the plaintiffs and although this time Count V is not part of the analytical mix, a host of genuine issues of disputed fact predominate, thereby precluding the granting of summary judgment.

Judge Shadur’s recent article, Trials Or Tribulations (Rule 56 Style) ?, 29 LITIGATION 5 (Winter 2003) should be must reading for everyone contemplating a motion for summary judgment. He concluded that a meaningful cost benefit analysis would tend to favor not filing the motion in the first place. In his view, “trials not only are more fun but also are more consistent with most lawyers’ preferred self image than the sterile Rule 56 path (strewn as it is with paper and nothing but paper).” Id. at 66. (Parenthesis in original). Hence, he concludes, “trials are indeed often better than tribulations (Rule 56 style). Counsel (particularly defense counsel) regularly should be urged by judges to consider — and that counsel should do so — the ultimately conservative alternative of trial before they proceed down the summary judgement path.” Id. (Parenthesis in original).

I.

BACKGROUND

A

The Parties’ Differing And Disputed Versions Of The Facts

The Negotiations And The Ultimate Agreement

Loeffel is in the business of slitting and cutting raw steel into various lengths and *972 widths in accord with its customers’ orders. DBI is in the business of designing and manufacturing multi-blanking machines, which are designed to process coils or rolls of sheet steel. The Line’s “leveler” flattens the coiled steel as it unrolls and removes surface defects. The line can then cut the steel length-wise into sections; it can also slit the steel into strips — called “blanks” or “mults” — of various widths. As these tasks are accomplished, the “stacker” component sorts and stacks the sheets into a stacker bay.

In late 1999, Loeffel was shopping for just such a machine, and its founder, Maurice Loeffel, came across an article about DBI and its multi-blanking line in a trade publication. Coincidentally, at about the same time, DBFs vice president of sales and marketing, Gautum Mahtani, contacted Loeffel to gauge its interest in a multi-blanking line. The parties embarked upon negotiations that included a visit to a facility to observe one of DBI’s similar machines, although it was a heavier gauge line — running .250-inch thick steel as opposed to .125-inch — and only cut steel to length as opposed to “multi-blanking” or “slitting.”

Mr. Mahtani provided Loeffel with a quotation describing the features and components of DBFs multi-blanking line. DBI claims that Mr. Mahtani made it clear to Loeffel that the machine was the first of its kind (Defendants’ Statement of Additional Facts (“Def.St.”), ¶ 12), but his deposition testimony indicates he is not so sure that was actually discussed. (Plaintiff’s Response to Def.St. (PLResp., Ex. 2, at 81-82)). Mr. Mahtani did say, however, that he discussed bringing other customers to Loeffel’s facility for demonstrations once the Line was installed. (Id.). Over the course of their negotiations, the parties exchanged five revisions of the purchase agreement before finally executing a contract on March 1, 2000, whereby DBI would deliver a rotary shear multi-blank-ing line to Loeffel by May 31, 2000, at a cost of $1.5 million. (Pl.St, Ex. B).

The contract between the parties can be broken down into sections. The first is captioned, “Introduction,” and is 0 pages in length. In setting forth the technical advantages of the Line “versus Roll Feed Technology,” DBI promises that there will be minimum down time, lower equipment costs and longer equipment life with dependable performance. After lauding the Line, there is this rhetorical question: “Is this not a lot better than having to purchase a new line with twice the cost and equipment and installation and double personnel requirement and cost.” Id. at 2. (Emphasis supplied). 2 The pages of the Introduction are numbered 2 and 3, page 1 being the cover page.

Next comes that part of the contract captioned, “Equipment Summary and Price and Delivery Schedule.” It runs from pages 4-6. At the bottom of page 6 are the signatures of Delta and Loeffel’s Presidents. Immediately above their signatures is this instruction: “ * See Annex A — which is an integral part of this agreement.”

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Loeffel Steel Products, Inc. v. Delta Brands, Inc., 379 F. Supp. 2d 968, 58 U.C.C. Rep. Serv. 2d (West) 579, 2005 U.S. Dist. LEXIS 15278, 2005 WL 1802094 (N.D. Ill. 2005).

379 F. Supp. 2d 968 (Loeffel Steel Products, Inc. v. Delta Brands, Inc.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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