Power Control Devices, Inc. v. Orchid Technologies Engineering & Consulting, Inc.

968 F. Supp. 2d 435, 2013 WL 4854483, 2013 U.S. Dist. LEXIS 132121
CourtDistrict Court, D. Massachusetts
DecidedSeptember 12, 2013
DocketCivil Action No. 2011-10697-RBC
StatusPublished
Cited by3 cases

This text of 968 F. Supp. 2d 435 (Power Control Devices, Inc. v. Orchid Technologies Engineering & Consulting, Inc.) 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
Power Control Devices, Inc. v. Orchid Technologies Engineering & Consulting, Inc., 968 F. Supp. 2d 435, 2013 WL 4854483, 2013 U.S. Dist. LEXIS 132121 (D. Mass. 2013).

Opinion

MEMORANDUM AND ORDER ON DEFENDANT’S MOTION FOR SUMMARY JUDGMENT (# 102)

COLLINGS, United States Magistrate Judge.

I. Introduction

The plaintiff, Power Control Devices, Inc. (“Power Control” or “the plaintiff’), [438]*438filed a complaint against the defendant; Orchid Technologies Engineering and Consulting, Inc. (“Orchid” or “the defendant”) in connection with the parties’ contract to design and build four prototypes of an amplifier to control a motor. The plaintiff contends that the prototypes did not meet contractual specifications and so alleges breach of contract and other claims in its complaint filed on April 25, 2011. (# 1) The defendant filed a motion to dismiss (# 5) on May 13, 2011 for failure to state a claim upon which relief can be granted on the grounds that plaintiffs claims were time-barred by the applicable statutes of limitations. Counts II, VI, and VII of the complaint were dismissed as time-barred. (#20) Finding the applicable statute of limitations for the remaining claims to be six years, the claims for breach of contract (Counts I & V), breach of the implied covenant of good faith and fair dealing (Count III), and unjust enrichment (Count IV) were allowed to proceed based on the dates alleged in the complaint. (# 20)

On April 5, 2013, Orchid filed a motion for summary judgment (# 102) together with a memorandum of law (# 103), statement of material facts (# 104), and a declaration with exhibits (# 105) in support thereof. Power Control was thereafter ordered to reply, specifically addressing the question of why the statute of limitations did not start to run at the time the plaintiff was put on notice of the purported defect in the prototypes, i.e., not later than April 4, 2005. (Electronic Order entered 4/23/2013) Thé plaintiff, in response, submitted a memorandum of law in opposition to defendant’s summary judgment motion (# 110) with exhibits (# 112) and statement of material facts (# 111), to which Orchid then filed a reply (# 113) with a second declaration (# 114) and a response to plaintiffs statement of facts (# 115).

The primary grounds for Orchid’s motion for summary judgment is the contention that the applicable statute of limitations bars Power Control’s remaining claims.

II. Factual Background

The facts recited herein are culled from the joint pretrial memorandum (# 79), the defendant’s statement of material facts (# 104) and exhibits (# 105), the plaintiffs statement of material facts in issue (# 111), and the defendant’s response (# 115). The parties agree generally about what events occurred on which dates, but dispute the significance to ascribe to particular events.

On or about June 11, 2004, the parties entered into an agreement whereby Orchid was to design and build four prototypes of an amplifier to drive a motor. (# 79, pp. 1, 3; # 105, Ex. 1) Per the agreement, the defendant submitted prototypes to Power Control on four separate occasions, from January to March of 2005. (# 110, Ex. A; # 115, ¶ 4) Each time the plaintiff received a prototype from Orchid, Power Control tested the prototype “as soon as possible.” (# 105, Ex. 2) Those testing dates were approximately January 18, January 21, January 29, February 8, and February 23, 2005. (# 105, Ex. 2) The conclusion reached by the plaintiff every time it conducted a test was that the design, as evidenced by each prototype, failed to meet all written specifications. (# 105, Ex. 2; #111, ¶ 4)

The parties had multiple telephone conferences to discuss the discrepancies in testing methods and signals being tested. (# 115, ¶¶ 45-47) These conferences occurred on February 10, February 24, March 30, and April 14, 2005. (# 115, ¶45) Power Control asserts that during this time Orchid induced the plaintiff to continue making partial payments of the contract price under the promise that the design [439]*439problems would be corrected in the future. (# 111, ¶¶ 30-31) The defendant also provided results from its own testing to the plaintiff on March 4, 2005 and April 29, 2005. (# 105, Ex. 2) Power Control asserts that Orchid’s testing further supported the conclusion that the plaintiffs specifications were not met. (# 105, Ex. 2)

On March 16, 2005, Orchid submitted to Power Control what the defendant represented to be the completed design. (# 79, p. 19; # 104, ¶ 4) This included a documentation package and four prototypes of what Orchid called the completed design. (# 104, ¶ 4) The defendant also enclosed a “formal release letter” with the final prototypes, outlining what was included in the package. (# 105, Ex. 5, Ex. 9) The formal release letter concluded in the following manner: “It has been my pleasure working with you and Richard. We look forward to working with you again in the future.” (# 105, Ex. 9) Power Control acknowledges that Orchid considered this to be the end of the Phase 1 contract, and further admits that it received all the deliverables listed in the Phase 1 contract and formal release letter. (# 105, Ex. 4, Ex. 5) The plaintiff paid its final invoice on April 4, 2005. (# 79, p. 4)

Soon after March 16, 2005, Power Control tested the defendant’s completed design package and found that the prototypes failed to meet the plaintiffs specifications. (# 105, Ex. 2; # 111, ¶ 4) On April 4, 2005, Michael Allmayer, Vice President of Power Control, alerted Orchid by email to the inconsistencies he had found in testing the final design. (# 105, Ex. 3) Mr. Allmayer stated, ‘We took measurements ... which I’ve attached. So far, we haven’t been able to verify the correct gain structure.... Have you been able to externally verify that the unit is producing a current gain of 3 for every volt input command?” (# 105, Ex. 3) The parties continued to discuss the testing issues. (# 115, ¶¶ 45-47)

At the plaintiffs request, Orchid conducted a test of the final prototypes. (# 115, ¶ 18) On April 29, 2005, the defendant produced its results in a document titled Control Discussion and Review (“report”), which Power Control contends revealed the defendant’s breach of contract. (# 111, ¶¶ 32-35) The plaintiff refers to this date in the pretrial memorandum and its complaint as the date of breach. (# 79, p. 8; # 1, ¶¶ 20-23) Orchid disputes this characterization, asserting that the report was not a contractual performance, it reflected the same testing methodology that plaintiff had employed in its own testing, and was merely intended to clarify the issues and defend its design from Power Control’s allegations. (# 113, p. 14; # 115, ¶¶ 19, 33)

The parties had further discussions in the months, following the April 29th report in an attempt to remedy the issues, including four telephone conferences in May 2005 and a visit to Kansas in August 2005 by Mr. Nickelsberg on behalf of Orchid. (# 115, ¶¶ 36-40) During this time, no further invoices were issued after the plaintiffs final payment on April 4, 2005. (# 79, p. 4; # 103, p. 4)

The parties’ contract does not include any provision stating that completion of the contract is contingent upon testing reports or acceptance of the design by Power Control. (#105, Ex. 1; #115, ¶ 29) The contract states that Phase 1 is complete upon “delivery to [plaintiff] of the prototype boards.” (# 105, Ex. 1, ¶ 1.1.3) The defendant’s “Control Discussion and Review” or report is not included in the list of required deliverables specified in the contract. (# 105, Ex. 1, ¶ 5.5)

The plaintiff filed this case against the defendant on April 25, 2011. Orchid seeks

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Bluebook (online)
968 F. Supp. 2d 435, 2013 WL 4854483, 2013 U.S. Dist. LEXIS 132121, Counsel Stack Legal Research, https://law.counselstack.com/opinion/power-control-devices-inc-v-orchid-technologies-engineering-mad-2013.