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Genesis Health Clubs, Inc. v. Led Solar & Light Co.

United States District Court, D. Kansas

March 26, 2014

GENESIS HEALTH CLUBS, INC., Plaintiff,
v.
LED SOLAR & LIGHT COMPANY, Defendant.

MEMORANDUM AND ORDER

JOHN W. LUNGSTRUM, District Judge.

In this diversity action governed by the Uniform Commercial Code (UCC)[1], plaintiff brings claims for breach of contract and breach of express and implied warranties relating to its purchase of lights from defendant. This matter comes before the Court on defendant's motion for summary judgment (Doc. # 46). For the reasons set forth below, the motion is granted in part and denied in part. The motion is granted with respect to plaintiff's claim for breach of contract and its claims for damages for return of the purchase price and the costs of an electrician, and defendant is awarded judgment on those claims. The motion is otherwise denied.

I. Summary Judgment Standards

Summary judgment is appropriate if the moving party demonstrates that there is "no genuine dispute as to any material fact" and that it is "entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(a). In applying this standard, the court views the evidence and all reasonable inferences therefrom in the light most favorable to the nonmoving party. Burke v. Utah Transit Auth. & Local 382, 462 F.3d 1253, 1258 (10th Cir. 2006). An issue of fact is "genuine" if "the evidence allows a reasonable jury to resolve the issue either way." Haynes v. Level 3 Communications, LLC, 456 F.3d 1215, 1219 (10th Cir. 2006). A fact is "material" when "it is essential to the proper disposition of the claim." Id.

The moving party bears the initial burden of demonstrating an absence of a genuine issue of material fact and entitlement to judgment as a matter of law. Thom v. Bristol-Myers Squibb Co., 353 F.3d 848, 851 (10th Cir. 2003) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986)). In attempting to meet that standard, 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. Id. (citing Celotex, 477 U.S. at 325).

If the movant carries this initial burden, the nonmovant may not simply rest upon the pleadings but must "bring forward specific facts showing a genuine issue for trial as to those dispositive matters for which he or she carries the burden of proof." Garrison v. Gambro, Inc., 428 F.3d 933, 935 (10th Cir. 2005). To accomplish this, sufficient evidence pertinent to the material issue "must be identified by reference to an affidavit, a deposition transcript, or a specific exhibit incorporated therein." Diaz v. Paul J. Kennedy Law Firm, 289 F.3d 671, 675 (10th Cir. 2002).

Finally, the court notes that summary judgment is not a "disfavored procedural shortcut;" rather, it is an important procedure "designed to secure the just, speedy and inexpensive determination of every action." Celotex, 477 U.S. at 327 (quoting Fed.R.Civ.P. 1).

II. Breach of Contract

Defendant seeks summary judgment on plaintiff's claim for breach of contract on the basis that the claim is redundant of plaintiff's warranty claims. See Lohmann & Rauscher, Inc. v. YKK (U.S.A.) Inc., 477 F.Supp.2d 1147, 1153 (D. Kan. 2007) (Lungstrum, J.) (granting summary judgment on a contract claim that was not factually distinct from the plaintiff's warranty claims). In response, plaintiff argues that its contract claim is distinct from its warranty claims because the contract claim includes allegations that defendant breached by failing to deliver the lights in a timely fashion and that defendant breached the covenant of good faith and fair dealing that is implied in every contract. Plaintiff may not assert any such claims for breach of contract, however, because those claims are absent from the pretrial order, which now governs the case. See Youren v. Tintic School Dist., 343 F.3d 1296, 1304 (10th Cir. 2003).

In the pretrial order, plaintiff alleges that defendant "breached the parties' contract by providing defective lighting that often did not work, did not provide the energy savings guaranteed and, as such, impacted [plaintiff's] cash flow (Count I)." These same allegations are encompassed within plaintiff's claims for breach of warranty as set forth in the pretrial order (which also includes claims for breach of warranty relating to color uniformity). Plaintiff also argues that it asserts that defendant breached its contract because the tips of the lights were not sufficient and because lights burned out prematurely. Those allegations merely describe why the lights did not work properly, however. Plaintiff does allege in the pretrial order that the defects in the lights include the fact that the lights would burn out prematurely, and those defects form a basis for both the contract claim and the warranty claims. Accordingly, plaintiff has not shown that its contract claim is factually distinct from its warranty claims, and the Court therefore grants summary judgment on the contract claim in favor of defendant.

III. Breach of Warranty - Energy Savings

A. Implied Warranty of Merchantability

Plaintiff asserts claims for breach of implied and express warranties based on the alleged failure of the lights to produce a certain energy savings in the facility. Defendant seeks summary judgment on plaintiff's claim for breach of the implied warranty of merchantability as it relates to energy savings. Defendant alleges, without citation to authority, that a product's energy savings cannot fall within that implied warranty's scope. As plaintiff points out, however, the relevant statute provides that to be merchantable goods must "pass without objection in the trade under the contract description, " see K.S.A. ยง 84-2-314(2)(a), and the parties' contract provided that defendant warranted "watt for watt exchange a minimum of 35% deduction in wattage consumption." In its reply brief, defendant has not even attempted to explain why an implied warranty would therefore not exist under the statute to the extent of the warranty contained in the contract. Accordingly, plaintiff may pursue a claim for breach of the implied warranty of merchantability to the extent of the 35-percent warranty contained in the contract, and the Court denies this basis for summary judgment.

B. Express Warranty

Plaintiff also pursues a claim for breach of express warranty based on its alleged lack of energy savings from the use of defendant's lights. Defendant does not dispute that it expressly warranted in the contract a "35% deduction in wattage consumption" from the lights alone, [2] but it does argue that it made no warranty regarding either a reduction in wattage for plaintiff's facility generally or a savings of a particular amount of money. Plaintiff claims that defendant, through its agent, Bruce Redinger, did expressly ...


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