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COLE ENERGY DEVELOPMENT v. INGERSOLL-RAND

February 9, 1988

COLE ENERGY DEVELOPMENT COMPANY, A CORPORATION, PLAINTIFF,
v.
INGERSOLL-RAND COMPANY, A CORPORATION, DEFENDANT.



The opinion of the court was delivered by: Mills, District Judge:

OPINION

Partial summary judgment allowed.

Here are the facts.

Cole Energy Development Company ("Cole Energy") leased two gas compressor units from Ingersoll-Rand Company ("Ingersoll-Rand") for use in its business of developing gas fields and in the pumping, selling, and distribution of natural gas. A lease agreement for an ESH gas compressor was entered into by the parties on December 5, 1983, and a lease agreement for a KOA gas compressor was entered into by the parties on August 11, 1984. The terms and conditions of both agreements are identical. (Hence, when we refer to the agreement in the singular, it is applicable to both leases.) Ingersoll-Rand's motion for partial summary judgment concerns the enforceability of certain terms of the lease agreement.

Paragraph 18 of the lease agreement states inter alia:

  The liability of lessor under this agreement shall be
  limited to the amount of payments made under this
  agreement. In no event shall any special, indirect,
  or consequential damages be allowed to lessee because
  of actions or default by the Lessor through
  negligence or malfunction of the equipment . . .

Paragraph 17 states:

  WARRANTIES. Lessor will deliver to lessee the factory
  warranty for each new unit manufactured by
  Ingersoll-Rand Company to enable lessee to obtain
  customary warranty service furnished on such units.
  Other than delivering said factory warranty, Lessor
  makes no other representations, promises, statements
  or warranties, expressed or implied, AND THERE ARE NO
  IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR
  A PARTICULAR PURPOSE CONTAINED HEREIN.

Ingersoll-Rand asks this Court to find as a matter of law that these provisions are enforceable. If the provisions are enforceable, Cole Energy's maximum recovery under the agreement would be limited to the amounts paid under the lease. No consequential damages would be recoverable and the count alleging a breach of the implied warranty would be dismissed. We now address these questions.

Summary Judgment

Under Rule 56(c), summary judgment should enter "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). Unquestionably, in determining whether a genuine issue of material fact exists, the evidence is to be taken in the light most favorable to the nonmoving party. Adickes v. S.H. Kress & Co., 398 U.S. 144, 158-59, 90 S.Ct. 1598, 1609, 26 L.Ed.2d 142 (1970). Nevertheless, the rule is also well established that the mere existence of some factual dispute will not frustrate an otherwise proper summary judgment. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986). Thus, the "preliminary question for the judge [is] not whether there is literally no evidence, but whether there is any upon which a jury could properly proceed to find a verdict for the party producing it, upon whom the onus of proof is imposed." Id. 106 S.Ct. at 2511, quoting Improvement Co. v. Munson, 14 Wall. 442, 448, 20 L.Ed. 867 (1872); see also Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 2553, 91 L.Ed.2d 265 (1986). In other words, the Court must consider the evidence "through the prism of the substantive evidentiary burden" in deciding Defendants' motion. Anderson, 106 S.Ct. at 2513; Carson v. Allied News Co., 529 F.2d 206, 210 (7th Cir. 1976). Applying this standard, the Court now turns to the case at bar.*fn1

Law and Analysis

I. Consequential ...


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