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679637 Ontario Ltd. v. Alpine Sign & Printer Supply, Inc.

United States District Court, E.D. Michigan, Southern Division

January 3, 2018

679637 ONTARIO LTD., Plaintiff,
v.
ALPINE SIGN & PRINTER SUPPLY, INC. and MARABU NORTH AMERICA, L.P., Defendants.

          OPINION AND ORDER GRANTING DEFENDANTS' MOTIONS FOR SUMMARY JUDGMENT AND DISMISSING COMPLAINT WITH PREJUDICE

          Honorable David M. Lawson, Judge

         The plaintiff filed a complaint in this Court alleging that an industrial coating sold by the defendants did not hold up. The issues raised in this case are governed by the Sales chapter of the Uniform Commercial Code. Plaintiff 679637 Ontario, Ltd. and its subsidiary make large vinyl advertising banners that are displayed on mobile billboard trucks. The graphics affixed to the banners are protected by a coating applied as a laminate. The coating, which was manufactured by defendant Marabu North America LP and distributed by defendant Alpine Sign & Printer Supply, Inc., did not perform as the plaintiff expected, which generated multiple customer complaints that were expensive to remedy. Plaintiff Ontario filed a complaint alleging warranty and tort claims, and after discovery concluded, both defendants moved for summary judgment. Ontario concedes the tort claims and seeks to proceed on warranty theories. However, because the product label included a valid limitation of remedies, and Ontario did not notify the defendants of the nonconformity of the coating within a reasonable time, it cannot proceed with its claims. The Court will grant the motions for summary judgment and dismiss the complaint.

         I.

         The basic facts of the case are undisputed. Around August 2010, the plaintiff's subsidiary entity, QuickDraw Tarpaulin Systems, Ltd., was looking for a new clear coat laminating solution to use for coating large vinyl advertising banners that it produced to be used on mobile billboard trucks. QuickDraw needed a new coating product because a product it previously had used, known as Neschen Accu-Coat, had been reformulated by the maker and QuickDraw found that the new formula was not suitable for its use.

         QuickDraw eventually settled on a replacement product known as “Clear Shield Star 1020 LL, ” which defendant Marabu North America, Ltd. manufactured and marketed as a laminating solution for vinyl truck banners. QuickDraw tested the solution in its Neschen branded laminating machine and found that the initial results were good. It began placing orders every few weeks for five-gallon cans of Clear Shield Star 1020 LL from defendant Alpine Sign & Printer Supply, Inc., a distribution partner for defendant Marabu. QuickDraw (and subsequently, plaintiff Ontario) made 54 separate purchases of the Clear Shield Star 1020 LL from Alpine, with its last purchase order on March 20, 2015.

         In early 2015, Marabu discontinued the Clear Shield Star 1020 LL product and began selling a replacement known as “Clear Shield for the Star Lam.” The plaintiff's final purchase order from March 2015 was for the replacement “Star Lam” product. The plaintiff's subsidiary, QuickDraw, subsequently executed an assignment of rights of all the claims presented in this action to plaintiff Ontario, which apparently is QuickDraw's commercial parent.

         The complaint alleges that, “[b]eginning in the fall of 2011, customers of [the plaintiff and its affiliates] began to complain that the printed panels laminated with Clear Shield Star 1020 LL absorbed dirt and could not be cleaned.” Compl. ¶ 13 (Pg ID 5). The plaintiff's project manager, James Martel, confirmed at his deposition that starting in 2011, the company received complaints from customers about banners that became soiled and could not be cleaned. The complaint also alleges that the Clear Shield for the Star Lam product “delaminated almost immediately from truck tarpaulins and [the] plaintiff was forced to purchase a new graphics printer at a cost exceeding $500, 000.” Compl. ¶ 16.

         Marabu's sales manager, Charles A. McGettrick, III, attested that, on September 5, 2014, he received an email from QuickDraw about problems with its laminated truck banners picking up dirt, but Marabu never received any communication from QuickDraw before then about problems with the banners. In its responsive brief, the plaintiff asserts that it did not learn of problems with the Clear Shield Star 1020 LL laminated banners until around May 2014, but the only record evidence that it points to in support of that position is an affidavit by Martel, in which he states:

Shortly after I started for work at 679637 Ontario Ltd. in May of 2014, any [sic] Quick Draw customers began to complain about dirty and uncleanable laminated tarpaulins. We made several different attempts to clean dirty tarps and assist customers to clean dirty tarps, all of which were unsuccessful, prompting us to contact Marabu in September 2014 to inform them of the problem and ask for their assistance.

Plf.'s Resp. [dkt. #46], Ex. D, James Martel decl. ¶ 4 (Pg ID 633).

         McGettrick stated that from 2010 to around September 2015, each can of Clear Shield Star 1020 LL featured a product label with the following limitation of remedies clause:

LIMITATION OF REMEDIES AND LIABILITY: If the product is proved to be defective, the exclusive remedy, at the manufacturer's option, shall be refund of the purchase price or replacement of the defective product. Manufacturer shall not otherwise be liable for loss or damages whether direct, indirect, incidental or consequential, regardless of the legal theory asserted, including negligence and strict liability.

Def.'s Mot. for Summ. J. [dkt. #43], Ex. 8, Charles A. McGettrick, III aff. ¶ 3 (Pg ID 470); Ex. 9, Clear Shield Star 1020 LL Product Label (Pg ID 473) (emphasis in original). In 2015, the defendant added to that clause a disclaimer of implied warranties, which was printed on the label of each can of its Clear Shield for the Star Lam product, reading as follows:

LIMITATION OF REMEDIES AND LIABILITY: If the product is proved to be defective the exclusive remedy, at the manufacturer's option, shall be refund of the purchase price or replacement of the defective product. Manufacturer shall not otherwise be liable for loss or damages whether direct, indirect, incidental or consequential, regardless of the legal theory asserted, including negligence and strict liability. Manufacturer expressly disclaims all implied warranties, including the implied warranty of merchantability and the implied warranty of fitness for a particular purpose.

Ex. 10, Clear Shield for the Star Lam Product Label (Pg ID 475) (emphasis in original).

         The plaintiff questions whether the disclaimer language appeared on the product labels attached to the five-gallon containers it received. However, the only specific evidence that the plaintiff submitted was Martel's affidavit testimony that he has “not seen the product label and 679637 Ontario Ltd. did not retain [any] empty container[s].” Martel aff. ¶ 2 (Pg ID 632). Martel also attested that when Ontario received its first shipment of the new Clear Shield for the Star Lam product in early 2015, the plaintiff did not “receive a warning or instruction from either Alpine or Marabu to read or inspect the label(s) affixed to the container for information different than that of the labels affixed to the containers of Clear Shield 1020 LL, ” and that “[n]othing else brought our attention to review any information on the containers of Clear Shield for the Star Lam.” Id. ¶ 3. But Martel testified at his deposition that, before using the Clear Shield product, someone at Ontario would have “read all the instructions on the bucket, ” and he believed that someone at Ontario had done so. Martel dep. at 78-79 (Pg ID 419-20).

         The plaintiff's complaint in this case raises claims for “defective manufacture” and “defective design” against defendant Marabu North America, L.P. only (Count I); “supplier negligence” against defendant Alpine Sign & Printer Supply, Inc. only (Count II); breach of the implied warranties of merchantability and fitness for ordinary purpose against both defendants (Count III); and unjust enrichment against both defendants (Count IV). Each defendant has filed a motion for summary judgment. The Court heard oral argument on November 3, 2017, but then deferred a decision on the motions at the ...


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