April 2, 2019
from the United States District Court for the Northern
District of Indiana, Fort Wayne Division. No. l:14-cv-215 -
Theresa L. Springmann, Chief Judge.
Hamilton, Barrett, and Scudder, Circuit Judges.
Scudder, Circuit Judge.
disputes can be messy and present many tangled knots. A year
ago in a similar contractual dispute under Indiana law we
observed that sometimes the harder questions can be avoided
where the evidentiary record shows that the plaintiff
"failed to prove its damages with anything close to
reasonable certainty." Entertainment USA, Inc. v.
Moorehead Communications, Inc., 897 F.3d 786, 797 (7th
Cir. 2018). This same observation and evidentiary shortcoming
resolves this appeal and leads us to affirm the district
court's judgment against SelectSun GmbH in this contract
and warranty dispute over whether the exhaust system on a $1
million yacht manufactured by Porter, Inc. complied with
particular regulatory requirements imposed by the European
is an Indiana company that manufactures boats under the
Formula and Thunderbird trade names. At the center of this
dispute is a 40-foot Formula yacht custom manufactured by
Porter for a German businessman and boat enthusiast, Erich
Schwaiger. Only a general understanding of how the sale and
underlying contract came about is necessary here.
September 2012, Schwaiger attended a boat show in
Friedrichshafen, Germany, and met Alfred Zurhausen, the owner
of Poker-Run-Boats, one of Porter's international dealers
of Formula boats. Impressed with a Formula display model,
Schwaiger expressed interest in ordering a Formula yacht with
supercharged engines and high-end accessories and
furnishings. Shortly thereafter Zurhausen met Schwaiger in
Munich to discuss these options and pricing in more detail.
Those discussions culminated in Schwaiger, through one of his
companies, executing a contract with Poker-Run-Boats on
October 1, 2012. The yacht and a custom-built lift cost
Schwaiger approximately $1 million. Porter, as the
manufacturer, was not a party to the contract. The only
parties were Poker-Run-Boats and (following a substitution)
Schwaiger's company, SelectSun.
terms, the contract required the boat to be "CE
certified/' meaning authorized for operation in the
European Union. Porter did not manufacture the boat to meet
this specification, and the reason seems to be because of
communications during the ordering process that Porter had
with one of its domestic dealers, International Nautic. Based
in Florida, International Nautic had worked with
Poker-Run-Boats (the German dealer) to receive
Schwaiger's order and, in turn, to transmit that order to
Porter. The order conveyed by International Nautic called for
the yacht to come with a switchable exhaust system, one that
would allow the operator to choose to divert exhaust either
above or below the water line. Exhaust diversion above the
water line results in a boat operating with more noise. EU
regulations, however, require exhaust expulsion below the
water line. Porter caught this conflict and explained to
International Nautic that the boat could not be both equipped
with the switchable exhaust system specified in the original
order and CE certified. In the end, and following dialogue on
the issue, International Nautic authorized Porter to proceed
with manufacturing the boat with the originally designed
exhaust system. Apparently Schwaiger knew nothing of
International Nautic's decision and therefore believed
the yacht would come CE certified.
took delivery of the yacht in Germany in May 2013. He used
the boat throughout much of the 2013 season in Europe. (It is
not clear whether he did so believing the boat was CE
certified or knowing that it was not.) During these first few
months, Porter covered a series of minor warranty repairs at
no charge to Schwaiger. By the end of August, however,
Schwaiger appeared fed up with the yacht, complaining to
Poker-Run-Boats of problems with the boat's engines,
steering column, exterior gel coating, and interior
furnishings. Rather than seek repairs, Schwaiger returned the
yacht to Poker-Run-Boats with instructions to sell it. When
the boat did not immediately sell, Schwaiger resorted to
January 2014, Schwaiger's company SelectSun, the party to
the contract with the German dealer Poker-Run-Boats, filed a
complaint against Porter in federal court in New York.
SelectSun amended its complaint a month later to add
International Nautic, Porter's Florida dealer, as a
defendant. On Porter's motion, the district court in New
York then transferred venue to the Northern District of
Indiana, where Porter is headquartered.
claims against International Nautic ended in a default
judgment. This resulted from International Nautic shuttering
its business in January 2015, and from there forward failing
to participate in the litigation. Equally noteworthy is that
Porter's German dealer, Poker-Run-Boats, ceased
operations sometime after this litigation commenced. ...