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PDC Laboratories, Inc. v. Hach Co.

August 24, 2009

PDC LABORATORIES, INC., PLAINTIFF,
v.
HACH COMPANY, DEFENDANT.



The opinion of the court was delivered by: Michael M. Mihm United States District Judge

ORDER

This matter is now before the Court on Defendant, Hach Company's ("Hach"), Motion for Partial Summary Judgment Seeking to Limit Plaintiff's Claims for Consequential Damages and Other Damages Beyond the Amounts Paid for the Goods. For the reasons set forth below, the Motion for Partial Summary Judgment [#6] is GRANTED in part and DENIED in part.

JURISDICTION

The Court has jurisdiction over this matter pursuant to 28 U.S.C. § 1332, as the claims asserted in the Complaint establish diversity jurisdiction. Plaintiff, PDC Laboratories, Inc. ("PDC"), is an Illinois corporation with its principle place of business in Illinois. Defendant, Hach, is a Delaware corporation with its principle place of business in Colorado. The amount in controversy exceeds $75,000.

FACTUAL BACKGROUND

In August 2007, PDC purchased eighty-six packages of m-TEC Modified Agar Plates (the "Plates") from Hach through several online orders. The Plates cost PDC a total of $5,898.71 and were to be used to detect E. coli in recreational waters. A one year express warranty was written on the Plates which required that they be stored between 2 and 8 degrees Celsius. PDC asserts that the Plates were placed into a refrigerator upon receipt from the carrier in keeping with their practice. PDC began using the Plates to analyze river water samples for an environmental contractor, MEC Water Resources, Inc. ("MEC"). During their use in the months of November and December in 2007, the Plates appeared to function properly.

The Plates were next used to test additional river water samples, provided by MEC, that were gathered from sampling during storm events in May, 2008. After using 148 of the Plates, no growth of E. coli occurred. PDC then tested the remaining Plates and found that they would not produce E. coli growth even when exposed to waste water known to contain E. coli. This led PDC to the conclusion that the Plates were defective. Hach was notified of this and performed their own testing on the Plates. Hach also concluded that the Plates were not functioning properly, but claimed that the defect was due to overheating during the shipping process because the Plates were not defective when manufactured. PDC has claimed damages in excess of seventy-five thousand dollars stemming from the use of the Plates.

On February 4th 2009, PDC filed this suit alleging a breach of express warranty, implied warranty of merchantability, and implied warranty of fitness for a particular purpose in the Circuit Court for Peoria County, IL. Hach then removed the case to this Court based on diversity jurisdiction, and PDC did not object. Hach has now moved for partial summary judgment. The matter is fully briefed, and this Order follows.

LEGAL STANDARD

Summary judgment should be granted where "the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c). The moving party has the responsibility of informing the Court of portions of the record or affidavits that demonstrate the absence of a triable issue. Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). The moving party may meet its burden of showing an absence of disputed material facts by demonstrating "that there is an absence of evidence to support the non-moving party's case." Id. at 325. Any doubt as to the existence of a genuine issue for trial is resolved against the moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986); Cain v. Lane, 857 F.2d 1139, 1142 (7th Cir. 1988).

If the moving party meets its burden, the non-moving party then has the burden of presenting specific facts to show that there is a genuine issue of material fact. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986). Federal Rule of Civil Procedure 56(e) requires the non-moving party to go beyond the pleadings and produce evidence of a genuine issue for trial. Celotex, 477 U.S. at 324. Nevertheless, this Court must "view the record and all inferences drawn from it in the light most favorable to the [non-moving party]." Holland v. Jefferson Nat. Life Ins. Co., 883 F.2d 1307, 1312 (7th Cir. 1989). Summary judgment will be denied where a reasonable jury could return a verdict for the non-moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986); Hedberg v. Indiana Bell Tel. Co., 47 F.3d 928, 931 (7th Cir. 1995). Included in the Terms was the agreement that disputes arising under the Plate contract would be resolved using Colorado law. PDC does not contest the use of Colorado law due to the fact that there is no significant conflict or difference between Colorado and Illinois law in this area. Therefore, the Court will apply Colorado law.

DISCUSSION

I. Inclusion of the Terms & Conditions of Sale in the Plate Sale Contract

Hach argues that PDC agreed to the Terms & Conditions of Sale (the "Terms") document in the online order process for the Plates and is thereby bound by its terms. The Terms include a limitation of damages clause allowing only the recovery of the purchase price of the Plates, as well as allowing no warranties except the written express warranty provided by Hach. PDC argues that the Terms were not included due to the fact that ...


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