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Applied Building Technologies, Inc. v. Schneider Electric

March 31, 2010

APPLIED BUILDING TECHNOLOGIES, INC., DOING BUSINESS AS APPLIED BUILDING TECHNOLOGIES, A MICHIGAN CORPORATION, PLAINTIFF,
v.
SCHNEIDER ELECTRIC, D/B/A PELCO, INC., A FRENCH CORPORATION, AND JOHN DOES 1-10, DEFENDANTS.



The opinion of the court was delivered by: Hon. Avern Cohn

MEMORANDUM AND ORDER GRANTING DEFENDANT PELCO'S MOTION FOR PARTIAL SUMMARY JUDGMENT

I. INTRODUCTION

This is a contract case. Plaintiff Applied Building Technologies Inc. (ABT) is a Michigan corporation that sells and installs security surveillance systems. ABT entered into a contract with defendant Pelco, Inc. (Pelco), a California corporation, to purchase video security equipment.*fn1 ABT claims that Pelco breached the contract by supplying defective equipment. ABT alleges that it suffered damages of approximately $180,000 correcting the defects. The complaint includes a single count of breach of contract. Pelco counterclaims, alleging that ABT failed to pay for the video security equipment that is the subject of this dispute.

Now before the Court is Pelco's motion for partial summary judgment.*fn2 Pelco asserts that the parties' rights under the contract are governed by the Warranty and Return Policy which limits liability to the price paid by ABT. Ordinarily the Court would schedule this matter for hearing. Upon review of the Pelco's papers, however, the Court finds that oral argument is not necessary. See E.D. Mich. LR 7.1(e)(2). For the reasons that follow, Pelco's motion will be granted.

II. FACTS AND PROCEDURAL HISTORY

A.

On June 18, 2003 Pelco and ABT entered into a contract entitled a Dealer/Systems Integrator Agreement. Under the contract, Pelco agreed to sell video security equipment to ABT. The contract included two provisions which are relevant to this suit. The first provision is a choice of law clause which states: "This agreement shall be governed and interpreted by the laws of the State of California. The second provision is a limitation of liability clause:

Pelco assumes no risk and shall be subject to no liability for damages of loss resulting from the specific use or application made of the Products. Pelco's liability for any claims, whether based on breach of contract, negligence, infringement of any rights of any part or product liability, relating to the product shall not exceed the price paid by [ABT] to Pelco for such products. In no event will Pelco be liable for any special, incidental or consequential damages (including loss of use, loss of profit, and claims of third parties) however caused, whether by the negligence of Pelco or otherwise.

B.

In 2007 ABT was awarded a contract to install a video/security surveillance system at The Mall at Partridge Creek in Clinton Township, Michigan (Partridge Creek Mall). Pursuant to the contract with Pelco, ABT purchased approximately $70,000 in hardware and software and installed it at the Partridge Creek Mall. ABT alleges that the hardware and software was sold as "plug-and-play" with no programming required.

During installation the Partridge Creek Mall reported problems with the surveillance system. ABT alleges that the problems were due to equipment defects rather than installation error. ABT was forced to send workers to the Partridge Creek Mall to correct the equipment defects. ABT alleges that its personnel spend an additional 1300 hours correcting the defects at a cost of $180,000.

ABT admits that it did not pay Pelco for the equipment that was installed at the Partridge Creek Mall.

C.

ABT filed this action in Michigan state court on February 19, 2009. On March 27, 2009 Pelco removed the case to the United States District Court for the Eastern District of Michigan pursuant to 28 U.S.C. ยง 1332. On April 3, 2009 Pelco answered the complaint ...


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