KRISTI K. DuBOSE, District Judge.
This matter came before the Court on June 10, 2013 for a hearing on Defendant's Motion for Summary Judgment (Docs. 68-70),
Findings of Fact 2
On May 16, 2012, subcontractor/window installer Plaintiff Tull Brothers, Inc. ("Tull Brothers") initiated this litigation against window designer/manufacturer Defendant Peerless Products, Inc. ("Peerless") for negligence, breach of express warranty, indemnity, and breach of contract, relating to the installation of windows for the Engineering and Computer Science Building ("Shelby Hall") at the University of South Alabama ("South Alabama") in Mobile, Alabama. (Doc. 1). This litigation is rooted in a contract dispute over allegedly negligently/defectively designed windows with a 1-inch (versus 2-inch) high sub-sill "back leg."
Specifically, on August 26, 2009, South Alabama hired General Contractor Elkins Constructors, Inc. ("Elkins") to build Shelby Hall per a Construction Contract Agreement. (Doc. 74-20). On November 25, 2009, Elkins executed a Subcontract Agreement with Tull Brothers, for Tull Brothers to both purchase/supply and install over 800 fixed aluminum windows (for over 200 window openings), an impact curtain wall system, glass and glazing, for Shelby Hall, for the sum of $1,374,000. (Doc. 70-8). Tull Brothers' budget included 1,717 man hours and over $600,000 for the cost of the windows. (Doc. 70-26 at 2).
Tull Brothers, however, did not ultimately purchase and supply the windows to South Alabama. Instead, on October 27, 2010, per an Agency Agreement, Elkins on behalf of South Alabama (Purchaser) purchased the window materials directly from the manufacturer Peerless (Seller), for $623,021.00, per Purchase Order. (Doc. 70-9). The parties agree that this was done "to save on taxes." While Tull Brothers did not supply the windows, it remained Elkins' installation subcontractor and installed the windows that Peerless manufactured.
Each window opening in Shelby Hall consisted of four (4) Peerless fixed windows. (Doc. 70-10). The plans and specifications for the project required that the windows pass strict wind and water (i.e., hurricane) resistance tests. (Doc. 74-23). Specifically, as part of the construction contract documents, the installed windows had to comply with an 8 pound per square foot field water test. This test consisted of an independent testing company (in this case Thompson Engineering, Inc. ("Thompson")) setting up a spray rack outside an installed opening
As of February 25, 2011, Tull Brothers had discussed an issue with the window system back leg with Peerless (that the 1 inch subsill or back leg was too short). (Doc. 70-34 at 25 (Dep. J. Roach at 112)). On March 7, 2011, Tull began installation of the windows. (Doc. 74-3). On March 29, 2011, Peerless assured Tull Brothers that the height of the 1-inch subsill (back leg) was sufficient. (Doc. 70-37 (Dep. F. Tull at 41-46)).
In April and May 2011, initial rounds of window field testing of the four (4) installed openings revealed problems and resulted in "failures." (Docs. 70-2 and 70-3). On April 18, 2011, Thompson's test results revealed that a set of four (4) windows failed "by allowing water into the interior portion of the window sill. The window contractor and manufacturer spent time throughout the day breaking down one of the failed window assemblies to determine possible causes for the water entry. Thompson ... personnel continued testing and was not present to fully observe their investigation." (Doc. 70-2 at 3). These four (4) windows were taken apart, remedial sealants were applied and they were readied for retesting. (Doc. 70-3 at 2).
On May 11, 2011, Thompson's test results revealed that the three (3) of these windows again failed, but at different locations, "by allowing water into the interior portion of the window sill. The window contractor/installers discussed the results of the ... tests and concluded that there was no reason to continue on to the fourth window that had gone through the same remediation attempt as the three (3) previously tested." (Doc. 70-3 at 3; Doc. 70-23). Stephen Ward & Assoc., Inc. (USA's waterproofing expert providing recommendations to USA's representative SAG Group, as a consultant) noted that while the frame joinery was sealed in the shop by Peerless "this seal does not marry with the field seal at the back leg to the frame. This leaves a very narrow metal-to-metal joint open. When the sub-sill fills up with water as it appears to be doing, this narrow joint acts as a `straw' due to the lower interior pressure during testing (or a storm)." (Doc. 70-23 at 1). "[T]he window manufacturer should respond with direction to the installer. Any remedial work that is deemed required for achieving performance shall be fully documented and is applicable to all similar windows." (Id.) SWA also requested a response from Tull Brothers and Peerless on the height of the sub-sill end dams. (Id.)
The four (4) windows were taken apart for a second time after failing the rests, remedial sealants were applied by a window manufacturer's representative, and the windows were made ready for the second round of retesting. (Doc. 70-4 at 2).
On May 18, 2011, Thompson's test results (on the same set of four (4) windows) resulted in a score of "passed" and noted that "[a]fter remediation from a window manufacturer's representative ... all four (4) tested windows passed ... by preventing water from entering into the interior portion of the window sill." (Doc. 70-4 at 2). According to Kevin Ford, Tull Brothers' then glazing-superintendent, these four (4) passed tests showed that the Peerless window system met the contract documents and that Tull Brothers had a good and proper installation of those four (4) windows. (Doc. 70-32 at 17 (Dep. K. Ford at 41)). Barry Smith concluded that these passed tests reflected that Tull Brothers properly installed the windows and the Peerless window system performs to project specifications. (Doc. 70-35 at 24 (Dep. B. Smith at 108)). As such, Tull Brothers — duplicating the steps it took to obtain the passing test score — began full-scale installation of the window systems at Shelby Hall. (Doc. 74-10 (Dep. S. Williams at 47); Doc. 74-12 (Dep. R. Coody, at 56-57, 65, 131, 142)).
Subsequently, Tull Brothers found it very difficult to obtain consistency to pass tests due to a blind seal required at the back leg of the window system. (Doc. 70-37 (Dep. F. Tull at 101, 104)). While Tull Brothers was aware of the blind seal at the back leg as of May 18, 2011, the installers did not realize "the perfection that was going to be required of that sealant until we actually started to install[,]" and "we were assured by Peerless that the system would adequately perform." (Id. (Dep. F. Tull at 104-105)).
On June 9, 2011, Barry Smith of SWA declared that "[f]ield testing shows that the assembly can perform to project water penetration requirements, but only with diligent and specific work." (Doc. 70-25; Doc. 70-35 (Dep. B. Smith at 10, 119-120)). Smith explained that Peerless' window system could meet project specifications only after significant modifications not called for in Peerless' shop drawings and only if Tull Brothers made a perfect seal. (Doc. 70-35 (Dep. B. Smith at 83-84, 124, 153)). Smith described Tull Brothers' sealant at the location of the sub-sill back leg as a critical sealant. (Id. (Dep. B. Smith at 75)). Smith explained that the window could pass the test "if everything is sealed up very very well ... a point of clarification... is that the sealant bead that's shown between the sill member and the subsill that's .... in the shop drawings is intended to be an air seal, not necessarily to be stopping water. That's the reason if it were a taller leg, then ... you'd create the air seal, but you wouldn't have to stop the water. It wouldn't have to be a perfect
On July 20, 2011 Thompson's test results on five (5) windows resulted in a score of "failed" "by allowing water into the interior portion of the window sill within the 15 minute test period. The window contractor commented that the window manufacturer would be called to visit the site again to assist in determining the cause(s) of failure." (Doc. 70-5 at 3). As of July 20, 2011, Tull Brothers had expended 2,896.25 man hours. (Doc. 70-11).
The failing window test resulted in South Alabama and Elkins requiring Tull Brothers to perform certain remedial work over the following months so that the windows would pass the tests — approximately $579,000 in curative work prior to acceptance. It is this remedial work for which Tull Brothers seeks reimbursement from Peerless — as it claims the windows were defectively designed (rather than defectively installed).
Specifically, on August 9th and 10th, 2011, Thompson's test results on eight (8) installed windows — which had recently received a sealant remediation on their interior perimeters — revealed that five (5) of the eight (8) windows failed the test procedure "by allowing water into the interior portion of the window sill within the 15 minute test period." (Doc. 70-6 at 3).
On September 28, 2011, Dow Bark, one of South Alabama's project representatives (SAG Group, LLC), declared that the Peerless windows were non-conforming and the windows "as originally submitted cannot pass the test." (Doc. 74-25). "Dow stated that the owners' position on windows is that they are non-conforming" and that the "windows have been modified significantly from what was originally submitted in order to pass the test" and the modifications "do not appear in any of the installation guidelines[.]" (Id. at 1). And while windows have been installed by both Peerless and Tull Brothers, which have passed and failed testing, "there has been a lack of consistency among the installations that can be looked at as the procedure to `fix' the window and be confident that it would produce a window installation that would effectively pass the testing." (Id.) It was noted that the design of the window sub sill was questioned as contributing to the failures, and "we don't know whether the subsill is an issue." (Id.) It was noted that Elkins did not agree that the windows are non-conforming. (Id. at 2).
On September 30, 2011, Dow Bark signed a letter advising Elkins that "the installed punch windows are non-conforming as per the contract documents" and setting forth a repair methodology submitted by Elkins. (Doc. 70-35 (Dep. B. Smith at 46); Doc. 74-17).
On October 13, 2011, "Plan B" remediation efforts were reduced to writing to save hundreds of already installed windows; this included hiring a waterproofing contractor to install membrane waterproofing (peel-n-stick) as well as instructions for Tull Brothers. (Doc. 74-24). Tull was required to implement remedial measures directed by Elkins and South Alabama on this date. (Doc. 74-12 (Dep. R. Coody at 123-134)).
Tull Brothers asserts that it was in no position to demand a 2-inch back leg "because it did not purchase the windows and because Peerless assured Tull that the windows would adequately perform." (Doc. 70-37 (Dep. F. Tull at 38-47; Doc.
As of November 10, 2011, the parties had agreed to remedial steps regarding the failures of the windows and Elkins concluded specifically, in correspondence to South Alabama, that "we need to guarantee the water stays in the cavity [between the brick and peel and stick] and weeps out" to assure it will not enter the building's interior and so "[w]e have coordinated with all parties and have come to the agreement that we will extend the 12" caulk bead, on the interior of the jamb, the remainder of the way up the window." (Doc. 70-17).
In 2011, Elkins withheld payments to Tull Brothers for the installation work due to the defective windows, and Elkins back-charged Tull Brothers for the costs associated with the Thompson Engineering window tests. (Doc. 74-1 at 3 (Aff. F. Tull at 3)).
On April 30, 2012, Peerless issued a Commercial Limited Warranty to South Alabama for three (3) years against defects in workmanship and materials; for five (5) years against material obstruction to vision from dust or moisture collection between the interior glass surface for its insulated glass units; and warranted the anodized finish. (Doc. 70-12). The warranty does not cover failures caused by damage from installation, by not following Peerless' recommended methods of installation, and does not warrant the installation of the windows. (Id.)
On May 4, 2012, South Alabama executed a Limited Warranty Assignment to Tull Brothers. (Doc. 70-13). Per the terms of the Assignment, South Alabama assigned its warranty rights to Tull Brothers, for the sum of $10.00, for the limited purpose of allowing Tull Brothers to pursue claims it may have for any costs and/or losses that it incurred to cure any defects in the windows Peerless supplied "until the date such windows are accepted by USA." (Id. at 2 at ¶ 2). The Assignment provides further that South Alabama retains all warranty and guarantee rights and did not assign, waive or limit its rights to enforce express or implied warranty obligations owed to it by Peerless to the extent of any cost or losses incurred by South Alabama. (Id. at 2 at ¶ 3). This Assignment stated that it assigned the entirety of the four (4) page Peerless-South Alabama contract (the Purchase Order) for the windows. (Id. at 1 at ¶ 1.a.).
On May 16, 2012, Tull Brothers sued Peerless alleging that the Peerless window system was negligently designed and breached the warranty contained in the Purchase Order. (Doc. 1). As of February 25, 2013, Tull Brothers' "total Peerless window cost impact" was
Motions to Strike 4
Tull Brothers moves to strike the Affidavit of Coby Jones, a Peerless design
As to Peerless' Objections to portions of the Affidavits of Fred Tull (Paragraphs 10-13) and Chris Beers (Paragraphs 5-7) and any "purported evidence offered to provide that the window system's 1-inch subsill back leg was defectively designed." (Docs. 80-81), the Court finds as follows. First, Peerless contends that the referenced portions of the Affidavit of Fred Tull is a "sham affidavit" because statements made in same are "perfectly contrary to the contract documents under which Tull Brothers operated." (Doc. 81 at 5-7).
The Eleventh Circuit has articulated the standard for this Court for "sham" affidavits:
Van T. Junkins & Assocs. v. U.S. Indus., Inc., 736 F.2d 656, 657 (11th Cir.1984). Only declarations "inherently irreconcilable" with earlier testimony can be disregarded. Tippens v. Celotex Corp., 805 F.2d 949, 954 & n. 6 (11th Cir.1986). Not every discrepancy will justify a court's refusal to consider contradictory evidence. See Lane v. Celotex Corp., 782 F.2d 1526, 1530 (11th Cir.1986). An affidavit may be stricken as a sham when it directly contradicts, without explanation, a witness's previous sworn testimony. See, e.g., McCormick v. City of Fort Lauderdale, 333 F.3d 1234, 1240 n. 7 (11th Cir.2003). Peerless does not rely upon or even reference prior sworn testimony by Tull, much less such testimony that is "inherently irreconcilable" with the statements in his Affidavit. Thus, the sham affidavit doctrine is wholly inapplicable. As such, Peerless' Objection lacks merit and it is
Second, as to Paul Beers, Peerless contends that Paragraphs 5-7 of his Affidavit contain statements which "flies [sic] in the face" of his deposition and contradict the contract documents. The Court did not rely on Beers' Affidavit on summary judgment review. Thus, Peerless' Objection as to Paul Beers' Affidavit is
Third, that portion of the Objection seeking to exclude all affidavits, depositions and the summary judgment opposition brief purporting to assert design defects opinions, is
Conclusions of Law 5
"The court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." FED.R.CIV.P. 56(a) (Dec. 2010). Rule 56(c) provides as follows:
FED.R.CIV.P. Rule 56(c) (Dec. 2010). Defendants, as the party seeking summary judgment bear the "initial responsibility of informing the district court of the basis for its motion, and identifying those portions of `the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any,' which it believes demonstrate the absence of a genuine issue of material fact." Clark v. Coats & Clark, Inc., 929 F.2d 604, 608 (11th Cir.1991) (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986)). If the nonmoving party fails to make "a sufficient showing on an essential element of her case with respect to which she has the burden of proof," the moving party is entitled to summary judgment. Celotex, 477 U.S. at 323, 106 S.Ct. 2548. "In reviewing whether the nonmoving party has met its burden, the court must stop short of weighing the evidence and making credibility determinations of the truth of the matter. Instead, the evidence of the non-movant is to be believed, and all justifiable inferences are to be drawn in his favor." Tipton v. Bergrohr GMBH-Siegen, 965 F.2d 994, 998-999 (11th Cir.1992) (internal citations and quotations omitted).
Common Law Negligence
Tull Brothers alleges that Peerless "negligently designed the window system provided pursuant to the Purchase Order" due to the presence of a 1-inch back leg (versus a 2-inch back leg) which resulted in the window failures (that the design of the product caused them damage not the product itself). (Doc. 1 at 3). Peerless contends that Tull Brothers' claim fails because: "[i]f Tull Brothers was unable to duplicate after May 18 what it accomplished to pass the four field tests... then that was a problem with Tull Brothers' installation and quality control, not a design defect." (Doc. 69 at 19).
To establish common law negligence, plaintiff must prove: 1) a duty to a foreseeable plaintiff; 2) a breach of that duty; 3) proximate causation; and 4) damage. See, e.g., Brushwitz v. Ezell, 757 So.2d 423, 432-433 (Ala.2000). At the outset, it appears that Berkel and Co. Contractors, Inc. v. Providence Hosp., 454 So.2d 496 (Ala.1984)
Breach of Express Written Warranty
Tull Brothers alleges that Peerless breached the express written warranty it provided for its windows — namely, the warranty in the Purchase Order. (Doc. 1 at 4; Doc. 70-9; Doc. 70-13). Tull Brothers contends the windows were non-conforming because they were defectively designed, triggering the express written warranty in the Purchase Order. (Doc. 74 at 26). In response, Peerless contends that said warranty does not apply as there is no evidence that the windows were defective due to a defect in workmanship or material (versus a defective design), and, because the window system passed the May 18, 2011 field tests. (Doc. 69 at 20-21).
Alabama law provides that any affirmation of fact or promise made by the seller to the buyer which relates to the goods and becomes part of the basis of the bargain creates an express warranty that
"A manufacturer's liability for breach of an express warranty derives from, and is measured by, the terms of that warranty." Cipollone v. Liggett Group, Inc., 505 U.S. 504, 525-526, 112 S.Ct. 2608, 120 L.Ed.2d 407 (1992). The Purchase Order provides that "Seller agrees to warrant goods provided under this order for a period of one year, or such longer period as may be required in the order or the Prime Contract, against defects in materials or workmanship." (Doc. 70-9 at 4 (emphasis added)). As noted supra, the parties' summary judgment arguments (and this case) are not premised on any purported defective materials or workmanship in the Peerless windows, but instead on the windows' allegedly negligent/defective design. The terms of the Purchase Order express warranty do not include a warranty against defective design — only against defective materials or workmanship. A written warranty against defects in materials or workmanship does not encompass a warranty against defects in design. See, e.g., Bruce Martin Const. Inc. v. CTB, Inc., 2012 WL 6203112, *4 (E.D.Mo. Dec. 12, 2012); Horvath v. LG Elect. Mobilecomm U.S.A., Inc., 2012 WL 2861160, *4-5 (S.D.Cal. Feb. 13, 2012). Tull Brothers' expert states that the windows were "defectively designed" (Doc. 74-1 (Aff. F. Tull at 2)); there has been no evidence presented of defective materials or workmanship. Thus, summary judgment is due to be
Contractual Indemnity 10
Tull Brothers alleges that as a result of the defective and non-conforming windows supplied by Peerless, it incurred damages (due to the costs it incurred to perform curative work on the windows) for which it is entitled to indemnification from Peerless per the hold harmless provision in the Purchase Order (and via assignment).
Express indemnity agreements are contractual provisions in which one party to the contract agrees to pay costs incurred by the other party to the contract as a result of the other party being held liable to a third party or having to defend against a claim filed by a third party. See, e.g., Cochrane Roofing & Metal Co., Inc. v. Callahan, 472 So.2d 1005, 1008 (Ala.1985). To assess the enforceability of an indemnity agreement, courts assess the contractual language, the identify of the draftsman of the language, and the indemnitee's retention
As to what was assigned, on May 4, 2012, South Alabama executed a Limited Warranty Assignment to Tull Brothers. (Doc. 70-13). Per the terms of the Assignment, South Alabama assigned its warranty rights as to Tull Brothers' incurred costs/losses — but not all of its contractual rights — to Tull Brothers for the limited purpose of allowing Tull Brothers to pursue claims it may have for any costs and/or losses that it may have incurred to cure any defects in the window materials Peerless supplied. (Id.) The Assignment provides that South Alabama assigned to Tull Brothers its rights and remedies for recovery of the costs/losses in curing the defects with the windows, as provided for under the Purchase Order including all of the Terms and Conditions thereof (which sets forth the hold harmless provision):
(Doc. 70-13 at 2 at ¶ 1.a). The Assignment thus provides that Tull Brothers was assigned all the Terms and Conditions set forth in the Purchase Order, and thus, the hold harmless provision.
The hold harmless provision — through which Tull Brothers stands in the shoes of the Purchaser and Peerless stands in those of the Seller — provides that the "Seller agrees to indemnify and save harmless the purchaser from any and all liabilities, losses, and expenses including attorney's fees, including but not limited to injury to person or property, proximately resulting from the defective or nonconforming condition of the material and equipment purchased on this order to the extent purchaser is held liable." (Doc. 70-9 at 3 at ¶ H). Tull Brothers asserts that it has been "held liable" because the general contractor, Elkins, has withheld payments from Tull Brothers as well as "back charged" Tull Brothers for the cost of the water field testing conducted by Thompson. (Doc. 74 at 29). This argument is unavailing because the indemnity provision is simply inapplicable. At best, these actions by Elkins suggest a potential for liability some day in another case, not that liability has been incurred by Tull Brothers.
Found in a variety of contracts, a contractual provision to "hold harmless" is an agreement to indemnify — the promisor assumes liability for all injuries and damages upon the occurrence of a contingency, thus relieving another of liability. See, e.g., Goodyear Tire & Rubber Co. v. J.M. Tull Metals Co., 629 So.2d 633, 639 (Ala.1993). See also Black's Law Dictionary (9th Ed. 2009) (defining "hold harmless" as "[t]o absolve (another party) from any responsibility for damage or other liability arising from the transaction; INDEMNIFY[,]" and a "hold-harmless agreement" as "[a] contract in which one party agrees to indemnify the other"). The contingent term of the hold harmless provision is for Tull Brothers to have been "held liable." Tull Brothers has submitted no evidence indicating that it has been sued by a third-party and/or that it has had to defend
Accordingly, Peerless' motion for summary judgment on the contractual indemnity claim (Doc. 68-70) is
Breach of Contract
Tull Brothers alleges that: 1) it stands in the shoes of South Alabama regarding the Purchase Order and that Peerless breached that contract; and (in the alternative) 2) because the Purchase Order was created for the benefit of Tull Brothers to install the window system, Tull Brothers was the intended third-party beneficiary. (Doc. 1 at 4-5). In response, Peerless contends that Tull Brothers lacks privity to the Purchase Order because Tull Brothers was not a party to same, the subsequent Assignment assigned only the warranty rights, and Tull Brothers was not an intended third-party beneficiary.
The Court first addresses Tull Brothers' third-party beneficiary claim. Privity is not required for Tull Brothers to be a third-party beneficiary, as this is an exception to the rule that "one who is not a party to a contract or in privity with a party cannot sue for breach of contract." Cook v. Trinity Universal Ins. Co. of Kansas, 297 Fed.Appx. 911, 914 (11th Cir. 2008). See also Dunning v. New Eng. Life Ins. Co., 890 So.2d 92, 97 (Ala.2003) (holding that standing to sue under a contract requires plaintiff to be in privity or be an intended third-party beneficiary). A party claiming to be a third-party beneficiary of a contract must establish that the contracting parties intended, upon execution of the contract, to bestow a direct, as opposed to an incidental, benefit upon the third party. See, e.g., Dunning, 890 So.2d at 97; Weathers Auto Glass, Inc. v. Alfa Mut. Ins. Co., 619 So.2d 1328, 1329 (Ala.1993). "[W]e look to the complaints and the surrounding circumstances of the parties to ascertain the existence of that direct benefit." Locke v. Ozark City Bd. of Educ., 910 So.2d 1247, 1250 (Ala.2005). Specifically, for Tull Brothers to recover as a third-party beneficiary of the Purchase Order, it must show three (3) elements: 1) the contracting parties Peerless and South Alabama intended, at the time the contract was created, to bestow a direct benefit upon Tull Brothers; 2) Tull Brothers was the intended beneficiary of the contract; and 3) the contract was breached. See, e.g., Bernals, Inc. v. Kessler-Greystone, LLC, 70 So.3d 315, 320 (Ala.2011).
Turning to the first requisite element, the evidence indicates that the Purchase Order merely acknowledges Tull Brothers' involvement by: noting that the $603,379.00 cost for the window materials was "per TULL BROTHERS Approved version of Peerless Quote" and "Description per Tull Brothers & Per approved submittals & shop drawings." All invoices were to be sent directly to Elkins and billed to South Alabama "care of the subcontractor — Tull Brothers." The parties also agreed that Tull Brothers would be responsible for "all material handling and protection of materials upon removal from the truck at final destination." Tull has not presented any evidence that Peerless intended, at the time the contract was created, to bestow a direct benefit upon Tull Brothers. As one of the contracting
As to Tull Brothers' second claim that, post-assignment, it stands in the shoes of South Alabama regarding the Purchase Order, this claim is
Accordingly, as set forth herein, it is