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B&P Process Equipment and Systems, LLC v. Applied Industrial Technologies, Inc.

United States District Court, Eastern District of Michigan, Northern Division

February 3, 2015

B&P PROCESS EQUIPMENT AND SYSTEMS, LLC, Plaintiff,
v.
APPLIED INDUSTRIAL TECHNOLOGIES, INC., Defendant and Third-Party Plaintiff,
v.
GLOBAL BEARINGS AND P T INC, Third-Party Defendant.

ORDER DENYING MOTION FOR JUDGMENT ON THE PLEADINGS AND CANCELLING HEARING

Honorable Thomas L. Ludington, Judge

On July 8, 2014, Plaintiff B&P Process Equipment and Systems, LLC (“B&P”), filed suit against Defendant Applied Industrial Technologies, Inc., for breach of contract and indemnity. B&P claims that Applied Industrial sold counterfeit bearings in violation of the terms of the purchase order.[1]

On December 19, 2014, Applied Industrial filed a motion for judgment on the pleadings, asserting that the applicable statute of limitations had run on B&P’s claim. Because B&P has sufficiently pleaded fraudulent concealment of its claim, the statute of limitations does not bar B&P’s breach of contract claim. Therefore Applied Industrial’s motion for judgment on the pleadings will be denied.

I

On January 9, 2008, B&P issued a purchase order to Applied Industrial for four bearings. Compl. Ex. 2, ECF No. 1. The purchase order requested four spherical roller thrust bearings and specified their size, load limits, and manufacturer identification-SKF part No. 29480. Id. The purchase order further stated: “ACCEPT NO SUBSTITUTIONS”. Id.

Applied Industrial shipped two bearings on March 4, 2008, and two bearings on April 1, 2008. Mot. J. Pleadings Ex. 1, Ex. 2. Each invoice identified the bearings shipped as “Part Number 29480EM”-the part number requested in B&P’s purchase order. Id. On April 30, 2008, B&P issued a check for $96, 306.74 to Applied Technologies pursuant to the purchase order.

B&P incorporated the bearings into industrial mixers known as Ko-Kneaders and sold the mixers to a third party, Emirates Aluminum Company, Limited in Abu Dhabi, United Arab Emirates. Compl. ¶ 9.

In December 2013, B&P received a call from Emirates Aluminum Company seeking repairs to one of the Ko-Kneaders mixers. B&P determined that the Ko-Kneader had malfunctioned because of failed bearings. Emirates Aluminum Company paid B&P a total of $309, 399.19 to replace the failed bearings and for B&P’s service time and travel. Compl. Ex. B.

After repairing the Ko-Kneader, B&P forwarded the failed bearing to the supposed manufacturer, SFK, for analysis. Compl. ¶ 12. SFK determined that it did not manufacture the failed bearing and the bearing in question was counterfeit. Id. ¶ 13.

Emirates Aluminum Company has demanded a refund of the $309, 399.19 it paid to B&P in the mistaken belief that the Ko-Kneader failure was attributable to ordinary wear and tear, rather than a counterfeit bearing. Compl. ¶ 14. Moreover, B&P is expected to replace the remaining bearing in Emirates Aluminum Company’s other Ko-Kneader, which B&P estimates would cost $42, 918.70. Id. ¶ 15.

On July 8, 2014, B&P filed this breach of contract action against Applied Industrial for selling the counterfeit bearings. B&P seeks to recover $352, 317.89 to (1) reimburse Emirates what it paid to repair the Ko-Kneader mixer and (2) retrofit the other machines that contain the counterfeit bearings that have not yet failed.

II

Motions for judgment on the pleadings under Federal Rule of Civil Procedure 12(c) are analyzed under the same standard as motions to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6). As set forth in Albrecht v. Treon, 617 F.3d 890, 893 (6th Cir. 2010), a district court must construe the complaint in the light most favorable to the plaintiff, accept all well-pleaded factual allegations as true, and determine whether the complaint states a plausible claim for relief. “However, the plaintiff must provide the grounds for its entitlement to relief” and that “requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action.” Id. (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). “A plaintiff must ...


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