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January 29, 2003


The opinion of the court was delivered by: James F. Holderman, District Judge:


On March 15, 2002, plaintiff Ajax Tool Works, Inc. ("Ajax") filed a four-count first amended complaint against Can-Eng Manufacturing Ltd. ("Can-Eng") alleging breach of express and implied warranties and breach of contract, On December 23, 2002, Can-Eng moved, pursuant to Federal Rule of Civil Procedure 56, for summary judgment. having considered this matter fully, for the reasons stated herein, Can-Eng's motion for summary judgment is denied in part and granted in part.


Plaintiff Ajax, an Illinois corporation, is a manufacturer of chisels, hammers, and other tools. Defendant Can-Eng, an Ontario, Canada corporation, manufactures industrial furnaces, including a fluidized bed furnace, which is at issue in this case. In January 1996, at the request of Lindberg Technical and Management Services, a consulting firm retained by Ajax, Can-Eng submitted a proposal in which it offered to supply a fluidized bed furnace to Ajax. Ajax did not accept this offer. Over the course of 1996, Can-Eng submitted two follow-up proposals to Ajax, neither of which was accepted. On January 27, 1997, Can-Eng sent Ajax a fourth proposal to sell a fluidized bed furnace to Ajax for $90,000. After issuance of the proposal, the parties entered into an agreement whereby Ajax purchased the furnace from Can-Eng. The terms of the January 27, 1997, proposal formed the parties' contract.*fn2

Page 4 of Can-Eng's fourteen-page proposal contained the following relevant terms and conditions:

WARRANTY - CAN-ENG in connection with apparatus sold will repair or replace, at the option of CAN-ENG, f.o.b. our factory, any defects in workmanship or
Further, Ajax quotes from the proposal in support of its breach of express warranty and breach of contract claims (See Count I ¶¶ 17, 18; Count III ¶¶ 18, 19) and attaches the proposal to its complaint. See Fed.R.Civ.P. 10(c) ("A copy of any written instrument which is an exhibit to a pleading is a part thereof for all purposes."). Although Ajax argues in its memorandum in opposition to summary judgment that the proposal provisions do not apply, its judicial admissions withdraw this fact from contention and establish that the terms of the January 27, 1997, proposal were part of the parties' contract and thereby govern this dispute.
material which may develop under proper and normal use during a period of ninety days from date of shipment or completion of installation if installation is undertaken by CAN-ENG. Such repair or replacement shall constitute a fulfillment of all CAN-ENG liabilities with respect to such apparatus. CAN-ENG shall not be liable for consequential damages. This warranty shall not apply if alterations or modifications of any nature are made by the Purchaser or if erection, installation or stating up is not performed under CAN-ENG supervision or under CAN-ENG approved methods. CAN-ENG'S liability for the service of any refractories, alloy or other component parts manufactured by other than CAN-ENG but incorporated in the equipment furnished to Purchaser, shall be limited to the guarantee or liability to CAN-ENG of the manufacturer or supplier of such components. CAN-ENG is not responsible in any manner for operation of the equipment in Purchaser's plant. CAN-ENG'S warranties or guarantees do not cover the process of manufacture or the quality of the product on which this equipment may be used.
OTHER UNDERSTANDINGS - All previous oral or written agreements between the parties hereto which are contrary to or inconsistent with this proposal are hereby abrogated, it being understood that there are no agreements, guarantees or understandings which are in conflict with or inconsistent with this proposal. A purchase order covering the materials, apparatus or equipment specified herein shall be considered by both the Purchaser and CAN-ENG to be merely an acceptance of this Proposal and the Terms and Conditions set forth herein, and any other terms or conditions which may be printed or contained on such purchase order which are in conflict with or inconsistent with this proposal shall be not applicable. This agreement shall be governed by the laws of the Province of Ontario, Canada. Any terms and conditions herein, which may be in conflict with Ontario Law, shall be deleted, however, all other terms and conditions shall remain in force and effect.
Can-Eng shipped the furnace to Ajax on June 26, 1997, and it arrived at Ajax's plant on June 27, 1997. Ajax installed and started the furnace itself. Over the course of the next four years, Ajax experienced problems with the furnace, particularly that the furnace would not attain and hold the selected temperature, used an excessive amount of sand, and did not function properly with compressed air as the atmosphere.*fn3 The parties dispute exactly when and how often Ajax reported these problems to Can-Eng, but viewing the evidence in the light most favorable to Ajax, the non—

moving party, as this court must, this court finds that Ajax lodged a considerable number of complaints with Can-Eng. It appears that all of these complaints were made more than ninety days after installation. In response to many of these complaints, Can-Eng attempted to repair or in some way remedy the problem, some, at least, at no cost to Ajax.

This court now considers Can-Eng's motion for summary judgment.


Under Rule 56(c), summary judgment is proper "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). In ruling on a motion for summary judgment, the evidence of the nonmovant must be believed and all justifiable inferences must be drawn in the nonmovant's favor. Anderson v. Liberty Lobby. Inc., 477 U.S. 242, 255 (1996). This court's function is not to weigh the evidence and determine the truth of the matter, but to determine whether there is a genuine issue for trial.

A party who bears the burden of proof on a particular issue, however, may not rest on its pleadings, but must affirmatively demonstrate, by specific factual allegations, that there is a genuine issue of material fact that requires trial. Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986). There is no issue for trial "unless there is sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party." Anderson, 477 U.S. at 249.

It is not the function of this court to scour the record in search of evidence to defeat a motion for summary judgment; the nonmoving party must identify with reasonable particularity the evidence upon which that the party relies. Bombard v. Fort Wayne Newspapers, Inc., 92 F.3d 560, 562 (7th Cir. 1996). The evidence relied upon must be competent evidence of a type otherwise admissible at trial. Id.


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