Prolite Bldg. Supply, LLC v. MW Mfrs., Inc.

891 F.3d 256
CourtCourt of Appeals for the Seventh Circuit
DecidedMay 22, 2018
DocketNo. 17-3149
StatusPublished
Cited by32 cases

This text of 891 F.3d 256 (Prolite Bldg. Supply, LLC v. MW Mfrs., Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Seventh Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Prolite Bldg. Supply, LLC v. MW Mfrs., Inc., 891 F.3d 256 (7th Cir. 2018).

Opinion

Easterbrook, Circuit Judge.

Prolite Building Supply bought Ply Gem windows from MW Manufacturers. (The *257parties use "Ply Gem" for both the product and its maker; we do the same.) Prolite resold the windows to residential builders in Wisconsin. Some of the homeowners were not satisfied with the windows, which admitted air even when closed. They complained to the builders, which complained to Prolite, which complained to Ply Gem. Working together under a contract that made Prolite the windows' principal servicer, Prolite and Ply Gem solved some but far from all of the problems. Contractors stopped buying from Prolite, which stopped paying Ply Gem for earlier deliveries.

Prolite and 12 homeowners filed suit in state court. Prolite contended that Ply Gem broke a promise to make the builders and ultimate customers happy. The homeowners made claims under the warranties that accompanied the windows. Ply Gem removed the action to federal court and counterclaimed against Prolite for unpaid bills. It added Andrew Johnson and Michael Newman, Prolite's only two members, as additional parties. (Johnson and Newman had guaranteed payment of Ply Gem's invoices.) Great Lakes Window, a company affiliated with Ply Gem, filed its own federal suit against Prolite, Johnson, and Newman, seeking to collect other invoices. Additional homeowners intervened in the removed suit. The district court consolidated these actions, and the caption that begins this opinion names the main contestants without going into excessive detail.

The district court granted summary judgment to Ply Gem and Great Lakes. 2017 U.S. Dist. LEXIS 220922 (E.D. Wis. Sept. 18, 2017). The judge found that the parties are of diverse citizenship. (Prolite's members are citizens of Wisconsin, so Prolite itself is a citizen of Wisconsin, as are all of the homeowner parties, while Ply Gem and Great Lakes are incorporated in Delaware (Ply Gem) or Ohio (Great Lakes) with their principal places of business in North Carolina.) Prolite's initial claim against Ply Gem comfortably exceeds $75,000; Ply Gem's counterclaim exceeds $180,000; Great Lakes' claim exceeds $260,000. None of the homeowners' claims exceeds $75,000, so none meets the diversity jurisdiction (aggregation of different litigants' claims is not allowed, see Snyder v. Harris , 394 U.S. 332, 89 S.Ct. 1053, 22 L.Ed.2d 319 (1969) ), but the district judge wrote that "the claims of the homeowner plaintiffs are part of the same case or controversy as Prolite's claim against Ply Gem" and come within the supplemental jurisdiction. 28 U.S.C. § 1367(a). We'll return to that question, but we start with the contract claims and counterclaims.

Ply Gem and Prolite had three contracts: a sales agreement, a credit agreement, and a service agreement (the "Service Rebate Obligation"). Prolite concedes that it does not have any defense to the claims for payment by Ply Gem and Great Lakes, which rest on the credit agreement, unless it can show that Ply Gem broke its promises under the service agreement. The service agreement requires Prolite to repair the Ply Gem windows that the contractors installed. In exchange, Ply Gem gave Prolite a 3% discount on the windows' price and promised to furnish needed parts at no cost. Prolite says that it spent about $290,000 trying to fix the troublesome windows but concedes that it received the 3% discount and all the parts it requested. Another portion of the service agreement provides that in the event of "excessive" problems (an undefined term) Ply Gem would furnish additional aid, including complete window reinstallation, for a price to be negotiated. Prolite never asked Ply Gem to replace windows under this clause.

Prolite contends that what Ply Gem should have done was either reinstall all of *258the windows, without specific requests, or design a new line of windows with better attributes and replace the old windows with the new ones, again without requests. Only those two steps could have kept the customers happy, Prolite insists. The problem, as the district judge observed, is that the service agreement does not require Ply Gem to keep the customers happy. (That's the function of the warranties.) Instead the service agreement requires Prolite to keep the customers happy by performing repairs in exchange for a discount. The district court's opinion meticulously discusses the contractual language. It is not necessary to repeat that analysis in the Federal Reporter. Nor need we repeat the district court's convincing resolution of the dispute about expert evidence that Prolite proffered.

The homeowners' claims, by contrast, pose a knotty problem. They can be resolved under the supplemental jurisdiction only if they "are so related to claims in the action within such original jurisdiction that they form part of the same case or controversy under Article III of the United States Constitution." 28 U.S.C. § 1367(a). The statute does not define "case or controversy," nor does Article III. Courts often ask whether the claims share a common nucleus of operative facts. See, e.g., Houskins v. Sheahan , 549 F.3d 480, 495 (7th Cir. 2008). This jiggles the vagueness problem around a little without solving it. The same phrase is used in the law of preclusion. It does real work and can handle many disputes, but not by prescribing an algorithm. It tells us that "enough" commonality makes for a controversy but does not dictate the solution to any case. So, for example, supplemental jurisdiction is appropriate when the supplemental claim involves the same parties, contracts, and course of action as the claim conferring federal jurisdiction. Channell v. Citicorp National Services, Inc. , 89 F.3d 379, 385-86 (7th Cir. 1996) ; Stromberg Metal Works, Inc. v. Press Mechanical, Inc. , 77 F.3d 928, 932 (7th Cir. 1996). Ammerman v. Sween ,

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Bluebook (online)
891 F.3d 256, Counsel Stack Legal Research, https://law.counselstack.com/opinion/prolite-bldg-supply-llc-v-mw-mfrs-inc-ca7-2018.