Millen Industries, Inc. v. Flexo-Accessories Co.

5 F. Supp. 2d 72, 1998 U.S. Dist. LEXIS 10472, 1998 WL 388885
CourtDistrict Court, D. Massachusetts
DecidedJuly 10, 1998
DocketCIV.A. 96-10174-GAO
StatusPublished
Cited by5 cases

This text of 5 F. Supp. 2d 72 (Millen Industries, Inc. v. Flexo-Accessories Co.) is published on Counsel Stack Legal Research, covering District Court, D. Massachusetts primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Millen Industries, Inc. v. Flexo-Accessories Co., 5 F. Supp. 2d 72, 1998 U.S. Dist. LEXIS 10472, 1998 WL 388885 (D. Mass. 1998).

Opinion

MEMORANDUM AND ORDER

O’TOOLE, District Judge.

In February of 1993, the plaintiff, Millen Industries, Inc. (“Millen”), entered into a contract to purchase a specialized printing press from defendant Flexo-Accessories Co., Inc. (“Flexo”) at a cost of $430,365.00. The plaintiff has sued for damages, claiming that the press does not function as promised. The defendant has counterclaimed for breach of contract and for declaratory relief. The matter is currently before the Court on two motions by the defendant — a motion to dismiss Counts VI and VII of the plaintiffs amended complaint pursuant to Fed.R.Civ.P. 12(b)(6); and á motion for summary judgment as to the scope of plaintiffs damages. For- the reasons set forth below, the Court DENIES both motions.

FACTUAL BACKGROUND

The' plaintiff, a manufacturer of folding cartons and shoe boxes, contacted the defendant, a manufacturer of printing presses, in November 1992, seeking to purchase a new press which would print at a speed of 500 feet per minute and enable the plaintiff to complete in-house a job for a particular client which Millen had previously been forced to' outsource. During negotiations between the parties, the plaintiff provided Flexo with details about the type of press it required. After the defendant’s representatives assured Millen that Flexo could produce a press to accommodate Millen’s needs, the parties executed a contract for the purchase of a printing press by Millen at a price of $430,365.00.

The contract provided for a two-phase acceptance test. Phase One would occur at Flexo’s facility in Illinois. If the press failed to satisfy this test, Millen could opt either to extend the acceptance date or declare Flexo in default, terminate the contract, and receive a full refund of any payments made within . thirty days. If the press passed Phase One of the acceptance test, the press would be shipped to Millen’s Massachusetts plant and the test would be repeated there.

In November 1993, the Flexo press failed to satisfy Phase One, and Millen immediately informed the defendant that the machine was unacceptable. 'However, Flexo’s president assured the plaintiff that the' shortcomings could be remedied and, in reliance on this assurance; the plaintiff agreed to have the press installed in its plant and paid a balance of $301,255.00 owed to the defendant at that time.

The press was installed at Millen’s Lawrence facility in December 1993. Since it arrived the press has been unable to print to Millen’s satisfaction. Various technical personnel from Flexo have repeatedly attempted to address and rectify the problems identified by the plaintiff, with no success. To date, the machine has not satisfied the acceptance test provided for in the contract.

Count VI of the Amended Complaint asserts a claim against Flexo for misrepresentation and fraud. It alleges that Flexo’s various statements regarding its ability to manufacture a press that would be able to meet Millen’s requirements were material misrepresentations that were either knowingly or negligently false at the time they were made. Count VII of the Amended Complaint makes out a claim for unfair trade practices under Mass. Gen. L. ch. 93A, §§ 2 and 11 for the fraudulent and/or negligent misrepresentations allegedly made by Flexo.

LEGAL ANALYSIS

1. Count VI:

In order to prove fraud or misrepresentation, a plaintiff must show that-the defendant, “made a false representation of a material fact with knowledge of its falsity for the purpose of inducing-[the plaintiff] to act thereon, and that [the plaintiff] relied upon the representation as true and acted upon it to his damage.” Macoviak v. Chase Home Mortgage Corp., 40 Mass.App.Ct. 755, 667 N.E.2d 900, 904 (1996) (citations omitted). However, “false statements of opinion, of conditions to exist in the future, or of matters *74 promissory in nature are' not actionable.” Pepsi-Cola Metro. Bottling Co. v. Pleasure Island, Inc., 345 F.2d 617, 622 (1st Cir.1965) (citation omitted). A statement which amounts to “nothing more than a kind of self-directed corporate puffery” is not actionable. Shaw v. Digital Equip. Corp., 82 F.3d 1194, 1218 (1st Cir.1996). Liability for fraud or misrepresentation cannot be established where the “alleged misrepresentation concerned a matter of opinion, estimate, or judgment, which was not susceptible of actual knowledge at the time of its utterance.” Logan Equip. Corp. v. Simon Aerials, Inc., 736 F.Supp. 1188, 1199 (D.Mass.1990).

At this stage in the proceedings, it cannot be said, as a matter of law, that the defendant’s statements to Millen regarding the press it would build represent nothing more than nonactionable statements of opinion or conditions to exist in the future. The statements allegedly made by Flexo were specific, referring to a specific client of Mil-len’s, a specific job, and specific benchmarks. Moreover, future-directed statements may be actionable as misrepresentations when “the parties to the transaction are not on equal footing but where one has or is in a position where he should have superior knowledge concerning the matters to which the misrepresentations relate.” Zimmerman v. Kent, 31 Mass.App.Ct. 72, 575 N.E.2d 70, 75 (1991) (citations omitted).

The defendant contends that its statements were not statements of fact which were susceptible of actual knowledge, a requirement in an action for fraud. See Yerid v. Mason, 341 Mass. 527, 170 N.E.2d 718 (1960); Pietrazak v. McDermott, 341 Mass. 107, 167 N.E.2d 166 (1960). However, Flexo supposedly made statements that the press would work properly after the first acceptance test, when the press was substantially complete. These could be understood as statements about the existing configuration of the machine. The plaintiff has adequately stated a claim, and the motion to dismiss Count VI must be denied.

2. Count VII:

Count VII alleges a violation of Mass. Gen. L. ch. 93A, §§ 2 and 11, relying on the fraud and misrepresentations asserted in Count VI. Since the fraud and misrepresentation claims survive the motion to dismiss, so does Count VII.

S. Motion for Partial Summary Judgment to Limit the Scope of Damages:

The defendant has also presented a motion for partial summary judgment as to the scope of plaintiffs damages. According to the defendant, the plaintiffs failure either to declare Flexo in default after the first acceptance test or formally to extend the acceptance test means that a condition precedent to Flexo’s further obligations under the contract has not been met.

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Bluebook (online)
5 F. Supp. 2d 72, 1998 U.S. Dist. LEXIS 10472, 1998 WL 388885, Counsel Stack Legal Research, https://law.counselstack.com/opinion/millen-industries-inc-v-flexo-accessories-co-mad-1998.