Scotwood Industries, Inc. v. Frank Miller & Sons, Inc.

435 F. Supp. 2d 1160, 60 U.C.C. Rep. Serv. 2d (West) 98, 2006 U.S. Dist. LEXIS 40537, 2006 WL 1676203
CourtDistrict Court, D. Kansas
DecidedJune 16, 2006
Docket05-2180-JWL
StatusPublished
Cited by1 cases

This text of 435 F. Supp. 2d 1160 (Scotwood Industries, Inc. v. Frank Miller & Sons, Inc.) is published on Counsel Stack Legal Research, covering District Court, D. Kansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Scotwood Industries, Inc. v. Frank Miller & Sons, Inc., 435 F. Supp. 2d 1160, 60 U.C.C. Rep. Serv. 2d (West) 98, 2006 U.S. Dist. LEXIS 40537, 2006 WL 1676203 (D. Kan. 2006).

Opinion

MEMORANDUM AND ORDER

LUNGSTRUM, District Judge.

This case involves a contractual dispute concerning the sale of goods by Scotwood Industries, Inc. (“Scotwood”) to Frank Miller & Sons, Inc. (“Miller and Sons”). Scotwood initially sued in Kansas state court for a declaratory judgment and to collect payment for shipments of calcium chloride flake it delivered to Miller and Sons. In response, Miller and Sons removed the action to federal court and asserted counterclaims under the Uniform Commercial Code (“UCC”) for breach of contract based both on theories of rejection and revocation of acceptance, breach of implied warranty of merchantability and breach of express warranty, and under Kansas common law for unjust enrichment and promissory estoppel.

This matter comes before the court on Scotwood’s motion for summary judgment as a matter of law against Miller and Sons’ counterclaims (doc. 44). For the reasons explained below, the motion is granted in part and denied in part. Specifically, the court will grant the motion as to the counterclaims based on the theory of rejection, breach of express warranty, unjust enrichment, and promissory estoppel; the court will deny the motion as to the counterclaims based on revocation of acceptance and breach of implied warranty of merchantability.

Background

As a wholesaler, Scotwood sells calcium chloride flake to suppliers, including Miller and Sons, for use in ice melt products. In 2004, Miller and Sons ordered from Scot-wood a large number of bags of 74-75% calcium chloride flake. 1 In all, from July 19, 2004, until September 3, 2004, Scot-wood delivered 37 shipments of calcium chloride flake to Miller and Sons’ warehouse. Following each delivery, Scotwood forwarded to Miller and Sons an invoice listing numerous “Terms and Conditions,” *1163 including paragraph 8(a), which purports to limit the time for bringing any claims against Scotwood.

Although it paid 35 of the 37 invoices for the 37 shipments it received, Miller and Sons alleges that the calcium chloride flake was substantially defective because, first, the bags it was delivered in were ripped and, second, the calcium chloride flake in the bags was chunked. Calcium chloride is extremely hygroscopic, which means that it will absorb massive amounts of moisture and chunk together if it is exposed. This property makes it vital that packing and storing of the flake is proper; chunking makes calcium chloride flake largely unusable in ice melt products. Miller and Sons alleges that it was forced to conduct the labor-intensive process of sorting the chunked calcium chloride from the usable flakes in the shipments it received from Scotwood. It does admit, however, that it retained the calcium chloride flake and exercised dominion and control by processing much of it for its own use.

Much of the factual record, in fact, is in dispute. The parties dispute the industry standard for a reasonable inspection of calcium chloride flake; they also dispute whether in this case Miller and Sons conducted a reasonable inspection of each delivery. Also, the parties disagree about the timing and the extent of Miller and Sons’ objections regarding the quality of the 37 shipments of calcium chloride flake. Miller and Sons alleges that it made numerous objections regarding the quality of the calcium chloride flake beginning as early as August 2004. Scotwood disputes this, and it also denies giving assurances that it would remedy the alleged defects; it contends that all assurances related to future shipments. Scotwood further alleges that Miller and Sons allowed the quality of the flake to deteriorate while in its possession, but Miller and Sons offers evidence that Scotwood declined to make arrangements to remove the flake from Miller and Sons’ warehouse when repeatedly asked to do so. In sum, there are numerous issues of material fact in dispute, although the parties seemingly agree that an email from Miller and Sons to Scotwood on October 8, 2004, purportedly revoked acceptance of any calcium chloride flake that Miller and Sons had previously accepted from Scot-wood. 2

Standard for Summary Judgment

Summary judgment is appropriate if the moving party demonstrates that there is “no genuine issue as to any material fact” and that it is “entitled to a judgment as a matter of law.” Fed.R.Civ.P. 56(c). In applying this standard, the court views the evidence and all reasonable inferences therefrom in the light most favorable to the nonmoving party. Spaulding v. United Transp. Union, 279 F.3d 901, 904 (10th Cir.2002). A fact is “material” if, under the applicable substantive law, it is “essential to the proper disposition of the claim.” Wright ex rel. Trust Co. of Kansas v. Abbott Laboratories, Inc., 259 F.3d 1226, 1231-32 (10th Cir.2001) (citing Adler v. Wal-Mart Stores, Inc., 144 F.3d 664, 670 (10th Cir.1998)). An issue of fact is “genuine” if “there is sufficient evidence on each side so that a rational trier of fact could resolve the issue either way.” Adler, 144 F.3d at 670 (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986)).

The moving party initially must show the absence of a genuine issue of material fact and entitlement to judgment as a matter of law. Spaulding, 279 F.3d at 904 (citing Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986)). In attempting to meet this stan *1164 dard, a movant that does not bear the ultimate burden of persuasion at trial need not negate the other party’s claim; rather, the movant need simply point out to the court a lack of evidence for the other party on an essential element of that party’s claim. Adams v. American Guarantee & Liability Ins. Co., 233 F.3d 1242, 1246 (10th Cir.2000) (citing Adler, 144 F.3d at 671).

Once the movant has met this initial burden, the burden shifts to the nonmov-ing party to “set forth specific facts showing that there is a genuine issue for trial.” Spaulding, 279 F.3d at 904 (citing Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986)); Anderson, 477 U.S. at 256,106 S.Ct. 2505; Celotex, 477 U.S. at 324, 106 S.Ct. 2548. The nonmoving party may not simply rest upon its pleadings to satisfy its burden. Anderson, 477 U.S. at 256, 106 S.Ct. 2505; accord Eck v. Parke, Davis & Co., 256 F.3d 1013

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Cite This Page — Counsel Stack

Bluebook (online)
435 F. Supp. 2d 1160, 60 U.C.C. Rep. Serv. 2d (West) 98, 2006 U.S. Dist. LEXIS 40537, 2006 WL 1676203, Counsel Stack Legal Research, https://law.counselstack.com/opinion/scotwood-industries-inc-v-frank-miller-sons-inc-ksd-2006.