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

United States District Court, D. Kansas

May 20, 2014

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

MEMORANDUM AND ORDER

JOHN W. LUNGSTRUM, District Judge.

This matter comes before the Court on plaintiff's motion (Doc. # 52) for reconsideration of certain rulings contained in the Court's Memorandum and Order of March 26, 2014, by which the Court granted in part defendant's motion for summary judgment. For the reasons set forth below, the Court denies the motion for reconsideration.

I. Governing Standards

Plaintiff seeks reconsideration of the Court's summary judgment order pursuant to Fed.R.Civ.P. 59(e). See D. Kan. R. 7.3(a) (party seeking reconsideration of dispositive order must do so pursuant to Rule 59(e) or Rule 60). Grounds "warranting a motion to reconsider include (1) an intervening change in the controlling law, (2) new evidence previously unavailable, and (3) the need to correct clear error or prevent manifest injustice." See Servants of Paraclete v. Does, 204 F.3d 1005, 1012 (10th Cir. 2000) (citing Brumark Corp. v. Samson Resources Corp., 57 F.3d 941, 948 (10th Cir. 1995)). Thus, a motion for reconsideration is appropriate where the court has misapprehended the facts, a party's position, or the controlling law. See id. It is not appropriate to revisit issues already addressed or advance arguments that could have been raised in prior briefing. See id. (citing Van Skiver v. United States, 952 F.2d 1241, 1243 (10th Cir. 1991)).

II. Rejection or Revocation of Acceptance of the Goods by Plaintiff

Plaintiff argues that the Court misapprehended the facts and the law in granting defendant summary judgment on plaintiff's claim for damages in the amount of the purchase price of the goods at issue. The Court based that ruling on its conclusion that plaintiff failed to produce evidence that it rejected the goods or revoked its acceptance of the goods pursuant to the Uniform Commercial Code (UCC). The Court reasoned as follows:

In opposing summary judgment, plaintiff does not dispute that it must have rejected or revoked acceptance of the lights in order to recover the purchase price. Plaintiff argues, however, that it did reject or revoke acceptance in this case. Specifically, plaintiff argues that once the lights were determined to be defective, it gave notice of defendant's breach in accordance with K.S.A. § 84-2-607(3)(a), which provides that "[w]here a tender has been accepted... the buyer must within a reasonable time after he discovers or should have discovered any breach notify the seller of breach or be barred from any remedy." See id. Plaintiff argues that it communicated with defendant concerning the breach and allowed defendant the opportunity to cure the breach, and that when defendant failed to effect a cure, it began to return the lights and revoked or rejected at that time. Plaintiff has not pointed to any evidence, however, that it actually did revoke its prior acceptance of the lights. Plaintiff has provided evidence of communications between the parties concerning alleged defects in the lights; but plaintiff has not provided any evidence of any communication in which it stated that it was canceling the contract or rejecting acceptance of the lights or revoking prior acceptance of the lights.
K.S.A. § 84-2-606 provides that acceptance of goods occurs when the buyer fails to make an effective rejection after a reasonable opportunity to inspect the goods, or when the buyer does any act inconsistent with ownership of the goods by the seller. See id. A buyer may reject goods within a reasonable time of delivery with notice to the seller. See K.S.A. § 84-2-602(1). The Court concludes as a matter of law that plaintiff did not reject the lights delivered by defendant. Plaintiff has cited no evidence that it gave any notice to defendant that it was rejecting the goods. In fact, plaintiff's argument that it gave notice of breach under K.S.A. § 84-2-607(3)(a) supports the conclusion that plaintiff accepted the lights, as that subsection addresses notice of breach after acceptance. See id. Moreover, plaintiff does not dispute that it used and continues to use some of the lights, and such use without compensation to defendant is inconsistent with ownership of the lights by defendant. See K.S.A. § 84-2-606.
The Court also concludes as a matter of law that plaintiff did not effectively revoke acceptance of the lights. Revocation of acceptance requires notice of the revocation to the seller. See K.S.A. § 84-2-608(2). Again, plaintiff may have notified defendant of a breach, but it did not notify defendant that it was revoking acceptance and canceling the contract, and the comments to section 84-2-608 indicate that mere notice of a breach under the preceding section is generally not sufficient to effect revocation of acceptance. See id. cmt. 5; id. Kan. cmt. 3 (referring to Official Comment 5 for the required contents of the notice of revocation); see also 1 Barkley Clark, supra, § 7:14 (more is required for revocation of acceptance than simple notice of breach; imposition of separate notice-of-breach requirement in section 2-607 shows intent of drafters for something more in section 2-608(2)); James J. White & Robert S. Summers, Uniform Commercial Code § 9-4, at 433 (6th ed. 2010) (mere notification of breach under section 2-607(3) is not enough to effect revocation of acceptance). Nor does plaintiff's return of a small portion of the lights constitute revocation of acceptance. See K.S.A. § 84-2-608 Kan. cmt. 3 (citing to Delhomme Indus. Inc. v. Houston Beechcraft, Inc., 735 F.2d 177 (5th Cir. 1984), for the proposition that a buyer who "resells" goods back to the seller has not revoked acceptance).
In short, plaintiff has not pointed to any evidence indicating that it did more than try to obtain conforming lights from defendant or return a few of the lights, and that it instead chose specifically to cancel the contract and to reject or revoke acceptance of the lights. Accordingly, plaintiff may not recover the purchase price of the lights, and defendant is awarded summary judgment on that claim by plaintiff.

See Genesis Health Clubs, Inc. v. LED Solar & Light Co., 2014 WL 1246768, at *7-8 (D. Kan. Mar. 26, 2014).

Plaintiff argues that it did present evidence of rejection or revocation in opposition to summary judgment, and that the Court therefore erred in holding that plaintiff did not reject or revoke as a matter of law. In support of that argument, plaintiff points to five pieces of evidence that it submitted with its summary judgment opposition. Plaintiff argues that that evidence, viewed in its favor, shows that it did reject or revoke in communications with defendant in which plaintiff did not merely notify defendant of a breach of warranty and the non-conforming nature of the goods, but also arranged for the return of all of the goods to defendant for a refund. The evidence identified by plaintiff may be summarized as follows:

a. A representative of plaintiff, Ryan Brooks, testified in his deposition that the parties agreed that plaintiff could return all of the defective lighting, in stages, with plaintiff getting refunds to buy replacement lights; that plaintiff returned $3, 777 worth of lights to defendant; that defendant did not pay that refund; and that plaintiff did not send any more lights back to defendant.
b. In his affidavit, Bruce Redinger, the alleged agent of defendant, stated that defendant agreed to a refund if the lights were shipped back; that defendant knew that plaintiff needed to purchase new lights before removing them all; that plaintiff shipped a portion of the lights back to ...

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