Académique Documents
Professionnel Documents
Culture Documents
No. 11-1427
KLERKS
PLASTIC
PRODUCTS
MANUFACTURING,
Defendants.
Appeal from the United States District Court for the Eastern
District of North Carolina, at Raleigh.
James C. Dever, III,
Chief District Judge. (5:06-cv-00160-D)
Argued:
Decided:
PER CURIAM:
Farrar
&
Farrar
Dairy,
Inc.,
and
Farrar
&
Farrar
Farms
Finding no
I.
Farrar
North
Carolina
Farrar &
Farrar
Farms
&
Farrar
is
Dairy,
North
Inc.,
Carolina
is
partnership
that
owns
the
purchasing
the
assets,
Miller
name Ag-Bag. 1
decided
to
continue
At the
time
of
the
asset
purchase,
Ag-Bag
had
contractual
the
Ag-Bag
bags.
Miller
terminated
that
when
it
Ag-Bags
assets,
Miller
provided
Some
Flat-Folded
Bag
Installation
Instructions,
which
Miller
Accordingly,
that
Miller
several
contacted
of
the
Arthur
bags
had
split.
Miller
Schuette,
Schuette
visited the Farrar farm soon after and visually inspected the
split bags.
However,
he also learned that the type of crop that had been packed was
rye silage, which, in his experience, tended to cause more bag
stretching than a lot of other crops.
J.A. 1028.
For that
1028.
Miller
then
processed
the
bags
also
split.
The
warranty
claims
and
record
does
not
reflect
with
lost
feed,
re-bagging,
disposal
of
spoiled
silage, acquiring new bags and techniques and new silage, and a
Miller,
asserting
claims
of
negligence,
breach
of
In response to a
latter
two
claims.
The
district
court
granted
Millers
II.
Farrar
first
argues
that
the
district
court
erred
in
We disagree.
Fed.
Summary
Credit
judgment
Union,
is
424
F.3d
appropriate
397,
when
405
the
(4th
movant
See EEOC v.
Cir.
2005).
shows
that
Fed.
issue.
the
claims
before
us,
plaintiff
bringing
products
defect
proximately
caused
plaintiff
damage.
Red
Hill
Hosiery Mill, Inc. v. MagneTek, Inc., 530 S.E.2d 321, 326 (N.C.
Ct. App. 2000).
Farrar sought to prove that had Miller exercised reasonable
quality control practices with respect to the silage bags that
it purchased from Hyplast to resell under the Ag-Bag brand, it
would have discovered that they were defectively designed.
moving
for
summary
judgment
on
the
negligence
claim,
In
Miller
independent
evidence
that
lab
many
for
analysis.
other
of
Farrar
Millers
also
customers
pointed
to
experienced
problems with their bags in the summer of 2005, and that several
After this
managers
and
dealers
of
that
information,
and
the
J.A.
1979.
Farrar
evidence,
maintained
it
defectiveness
had
of
that
proffered
the
bags
by
producing
both
in
direct
question
the
above-mentioned
evidence
and
proven
of
the
their
defectiveness
by
showing
(1)
[that]
the
silage
bags
it
negligence
on
J.A. 966.
had
referenced
the
part
of
rise
to
an
inference
manufacturer. 2
the
It
of
further
the
silage
bags,
and
that
reasonable
man
would
have
J.A.
972.
On reply, as is relevant here, Miller argued that much of
Farrars evidence would not be admissible at trial and therefore
could not be considered at the summary judgment stage.
Miller
further
direct
emphasized
that
Farrar
had
not
produced
any
that
the
Farrar
had
negligence
failed
to
element
create
of
its
Miller therefore
a
genuine
negligence
dispute
claim.
Farrar
filed
sur-reply
in
which
it
defended
the
The
court
noted
defectiveness
of
product
evidence
negligence
and
that,
may
can
under
be
Carolina
established
sometimes
North
be
by
inferred
law,
indirect
from
the
present
would
do
evidence
in
similar
that
suggests
what
circumstances.
J.A.
reasonable
2610-11
person
(internal
employ
manufacturing
for
company,
goods
J.A.
manufactured
2612,
the
by
court
an
independent
granted
summary
10
Farrar
first
contends
that
the
district
court
Tire & Rubber Co., 413 F. Supp. 2d 583, 588 (M.D.N.C. 2005)
(explaining
negligence
that
by
products-liability
stacking
inference
plaintiff
upon
may
not
inference).
prove
Farrar
prove
negligence
simply
by
offering
circumstantial
prove
Appellants
product
brief
at
defect
24.
through
That
is
circumstantial
not
the
evidence.
case,
however.
failure
to
exercise
11
reasonable
care
is
quite
another.
alternatively
contends
that
it
presented
direct
Relying on
silage
bags
at
issue,
and
J.A.
1869-70).
Farrars
warranty
warranty
that
Pesik
did
not
claims
based
on
the
determined,
characterization
misstates
viable
covered
defects
testify
that
in
Miller
losses
under
material
and
tested
each
the
limited
workmanship.
bag,
and
he
certainly did not testify there was any defect in the bags
design.
existence
judgment
In
of
any
event,
this
motion
in
because
testimony
the
in
district
Farrar
did
opposing
court,
not
rely
Millers
the
court
on
the
summary
was
not
Md., 933 F.2d 1246, 1251 (4th Cir. 1991) ([H]earsay evidence,
12
its
of
contents.
the
Farrar
presentation
argues
would
fall
conclusorily
under
the
that
business
Miller
inspection
failed
of
approximately
problems.
Farrar
to
the
six
silage
months
Appellants
asserts
perform
that
bags
and
reply
Miller
an
to
adequate
or
issue
warn
its
at
27.
brief
learned
investigation
of
recall
customers
In
this
problem
of
or
for
the
regard,
with
its
241
n.6
(4th
1999)
(claim
13
not
properly
raised
in
this same argument on the bases that (1) the record lacks any
information as to quality control mechanisms that distributors
generally
employ
manufacturing
for
company
goods
and
manufactured
(2)
neither
by
an
Millers
independent
awareness
of
nor
the
fact
that
Miller
contemplated
sending
J.A. 2612.
In
its reply brief, Farrar simply argues that the district court
erred in concluding that Farrar failed to create a jury issue
with this theory without addressing, or even acknowledging, the
basis for the district courts ruling.
brief at 25-29.
reason as well.
14
III.
Farrar
next
maintains
that
the
district
court
erred
in
We disagree.
Under
Farrar
North
could
Carolinas
recover
implied
the
warranty
difference
of
between the value of the goods accepted and the value they would
have had if they had been as warranted.
2-714(2).
consequential
damages
recovered.
N.C.
statutory
remedy
law
Gen.
also
available
under
in
Stat.
permits
the
[ 25-2-715]
25-2-714(3).
written
event
of
may
North
also
Carolina
warranties
to
however,
breach;
be
limit
the
when
15
should the damaged bag require the farmer to rebag the feed,
Miller would provide two replacement bags.
treated
this
remedy
and
the
remedies
under
North
accepting
additional
replacement
remedy
under
bags,
N.C.
it
Gen.
was
Stat.
not
entitled
25-2-714.
to
any
As
for
that
Millers
warranty
failed
of
its
essential
buyer
agreed.
with
the
remedy
to
which
the
parties
16
49,
55
(Mich.
Ct.
App.
2005)
(internal
quotation
marks
omitted); see Stutts v. Green Ford, Inc., 267 S.E.2d 919, 926
(N.C.
Ct.
App.
1980)
(holding
that
warranty
fails
of
its
repaired
within
warranty).
reasonable
period
as
required
by
the
that it did not receive the remedy that Miller had promised.
Miller provided replacements for the defective bags within a
reasonable period of time, just as its warranty contemplated.
Although at least one of the replacement bags also ended up
splitting, Farrar offers no evidence that the replacement bag
was not also promptly replaced.
In
failed
the
of
end,
its
Farrar
seems
essential
to
purpose
suggest
that
because
the
Miller
warranty
did
not
loss
in
milk
production
due
to
Farrars
inability
to
Of
course, though, the fact that Farrar was not compensated for
those
losses
consequential
simply
damages.
reflected
It
is
to
Millers
the
disclaimer
effectiveness
of
of
that
17
[N.C.
Gen.
Stat.
25-2-316(2),
mention merchantability.
and
the
warranty
does
not
However, as
Here,
warranty,
but
the
remedy
for
breach
of
the
warranty.
N.C.
Section 25-2-719, in
First,
it
contends
that
Farrar
had
contends
that
when
manufacturer
is
no
meaningful
In this regard,
aware
that
its
ability
substantial
to
detect
disparity
in
the
problem,
the
18
parties
there
is
relative
perforce
bargaining
power.
Motors
Corp.,
883
F.2d
287,
296
(4th
Cir.
1989)).
Farrar
not
much
help
to
Farrar,
That fact is
however.
When
Farrar
that
that
several
summer
of
of
the
other
bags
split.
customers
who
Although
had
Miller
experienced
of
possible
problem
as
well.
Thus,
there
was
no
also
contends
that
Millers
consequential-damages
We
but
in
transaction
between
business
entities,
loss
is
not
prima
facie
19
unconscionable);
Stan
D.
Bowles Distrib. Co. v. Pabst Brewing Co., 317 S.E.2d 684, 690
(N.C. Ct. App. 1984) (Courts rarely find limitation clauses in
transactions
between
experienced
businessmen
exclusion
because
at
of
least
consequential
one
of
the
damages
was
replacement
unconscionable
bags
that
Miller
In any event,
issue of unconscionability.
Pines, Inc., 652 S.E.2d 701, 712 (N.C. Ct. App. 2007) (The
question of unconscionability is determined as of the date the
contract was executed.).
For all of these reasons, we conclude as a matter of law
that the consequential damages exclusion was valid and that the
court
properly
granted
summary
judgment
on
Farrars
warranty
claims.
IV.
In
sum,
we
affirm
the
district
courts
order
granting
20