Opinion
02-CV-0317E(F)
October 1, 2002
MEMORANDUM and ORDER
This decision may be cited in whole or in any part.
On March 19, 2002 Brainard filed suit, in the New York State Supreme Court, County of Erie, against Freightliner asserting breach of contract and breach of warranty claims stemming from Brainard's purchase of a truck from Freightliner that allegedly failed to perform as warranted. Freightliner removed the action to this Court April 26, 2002. Currently pending is Freightliner's motion for summary judgment of dismissal on the ground that Brainard's claims are barred by the four-year statute of limitations contained in N.Y. U.C.C. § 2-725 ("section 2-725"). For the reasons discussed herein, Freightliner's motion will be granted.
The Complaint is somewhat cryptic in outlining the causes of action being alleged. For example, the first count is referred to as "A Second Cause Of Action" and so on. Accordingly, there appears to be only three causes of action alleged — to wit, causes of action for (1) breach of contract, (2) breach of implied warranties and (3) breach of an undelineated "express limited warranty." Freightliner purportedly interprets the Complaint as containing two counts alleging implied warranty claims and two counts alleging express warranty claims. Def.'s Mem. of Law., at fn1. This Court declines Freightliner's invitation to so construe the Complaint — despite the Complaint's ambiguity. Brainard's breach of contract claim relates to the extended warranty that she purchased, which she alleges to be a contract separate from the sales agreement. See Jeffrey A. Lazroe, Esq.'s Aff. in Opp., at ¶¶ 2, 10; Compl., at ¶¶ 21-23.
The relevant facts are undisputed. On November 6, 1997 Freightliner sold a 1998 Freightliner truck, model FLD120, VIN No. 1FUPCSZB6W913190 (the "Truck") to Freightliner Orlando. Brainard purchased the Truck from Freightliner Orlando and took delivery of it on February 9, 1998. See Compl., at ¶¶ 4, 9. Brainard allegedly experienced mechanical problems with the Truck, which was subsequently repossessed by Freightliner. This litigation ensued.
Rule 56(c) of the Federal Rules of Civil Procedure ("FRCvP") states that summary judgment may be granted only if the record shows "that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." In other words, after discovery and upon a motion, summary judgment is mandated "against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). Summary judgment is thus appropriate where there is "no genuine issue of material fact." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
Of course, the moving party bears the burden of showing that no genuine issue of material fact exists and that it is entitled to judgment as a matter of law. Goenaga v. March of Dimes Birth Defects Found., 51 F.3d 14, 18 (2d Cir. 1995) (citing Adickes v. S.H. Kress Co., 398 U.S. 144, 157 (1970)). If the moving party makes such a showing, the non-moving party must then come forward with evidence of specific facts sufficient to support a jury verdict in order to survive the summary judgment motion. Ibid.; FRCvP 56(e).
With respect to the first prong of Anderson, a genuine issue of material fact exists if the evidence in the record "is such that a reasonable jury could return a verdict for the nonmoving party." Anderson, at 248. Stated another way, there is "no genuine issue as to any material fact" where there is a "complete failure of proof concerning an essential element of the nonmoving party's case." Celotex, at 323. Under the second prong of Anderson, the disputed fact must be material, which is to say that it "might affect the outcome of the suit under the governing law *** ." Anderson, at 248.
See also Anderson, at 252 ("The mere existence of a scintilla of evidence in support of the [movant's] position will be insufficient; there must be evidence on which the jury could reasonably find for the [movant].")
Furthermore, "[i]n assessing the record to determine whether there is a genuine issue as to any material fact, the district court is required to resolve all ambiguities and draw all factual inferences in favor of the party against whom summary judgment is sought." St. Pierre v. Dyer, 208 F.3d 394, 404 (2d Cir. 2000) (citing Anderson, at 255). Nonetheless, mere conclusions, conjecture, unsubstantiated allegations or surmise on the part of the non-moving party are insufficient to defeat a well-grounded motion for summary judgment. Goenaga, at 18.
See footnote 3.
Freightliner contends that all of Brainard's claims are barred by section 2-725, which contains the applicable four-year statute of limitation governing breaches of contracts and warranties with respect to the sale of goods. See e.g., City of Buffalo v. Am. LaFrance, No. 81-CIV-856E, 1986 WL 5928, at *1 (W.D.N.Y. May 22, 1986) (discussing section 2-725). Section 2-725 provides:
"(1) An action for breach of any contract for sale must be commenced within four years after the cause of action has accrued. By the original agreement the parties may reduce the period of limitations to not less than one year but may not extend it.
"(2) A cause of action accrues when the breach occurs, regardless of the aggrieved party's lack of knowledge of the breach. A breach of warranty occurs when tender of delivery is made, except that where a warranty explicitly extends to future performance of the goods and discovery of the breach must await the time of such performance the cause of action accrues when the breach is or should have been discovered."
Inasmuch as Freightliner construes the Complaint to contain only breach of warranty claims, it did not address Brainard's breach of contract claim relating to the extended warranty, which is ambiguously asserted in count 1 of the Complaint. See fn. 2 supra. Accordingly, her breach of contract claim survives Freightliner's present summary judgment motion and discovery with respect to such may continue.
Under section 2-725(2), a cause of action for breach of a sales contract accrues "when the breach occurs." The Complaint is silent as to when the extended service warranty is alleged to have been breached. Assuming arguendo that Freightliner addressed Brainard's breach of contract action, summary judgment is nonetheless inappropriate at this stage because there is a genuine issue of material fact as to when the extended service warranty was allegedly breached. Accordingly, this Court need not address Brainard's contention that her breach of contract claim is governed by a six-year statute of limitations as opposed to the four-year statute of limitations in section 2-725. Also, the Court does not address the exclusive remedy or limitation of liability clauses contained in the Freightliner Warranty.
With respect to Brainard's breach of warranty claims, Freightliner contends that Brainard's claims are barred by section 2-725 because the Truck was tendered on February 9, 1998 — more than four years before Brainard filed suit on March 19, 2002. Brainard contends that the statute of limitations did not start running until he discovered her breach of warranty claims. Accordingly, Brainard attempts to avail herself of the discovery rule contained in section 2-725(2). Where applicable, the discovery rule extends the accrual date for a breach of express warranty claim from the date of tender of delivery to the date the breach of warranty cause of action was or should have been discovered. See Orlando v. Novurania of Am., Inc., 162 F. Supp.2d 220, 223 (S.D.N.Y. 2001) (discussing section 2-725(2) and noting that the "date of tender rule for determining the accrual date for warranty actions is quite rigid").
Brainard's argument is culled from her attorney's affidavit filed in opposition to Freightliner's motion for summary judgment. Brainard violated Rule 7.1(e) of the Local Rules of Civil Procedure ("LRCvP") by failing to file a memorandum of law in opposition to Brainard's motion. Brainard also violated LRCvP 56 by failing to submit an opposing statement of material facts. Amos v. Quebecor Printing, No. 96-CV-0072E(F), 1997 WL 251471, at *1 n. 1 (W.D.N.Y. Apr. 29, 1997) ("Inasmuch as [plaintiff] failed to submit, as required by [LRCvP 56], an opposing statement of material facts as to which it is contended that there exists a genuine issue to be tried, the facts contained in [defendant's] statement are deemed admitted unless otherwise adequately controverted in the record. It is also noted that, inasmuch as [plaintiff] submitted neither a memorandum of law nor a supporting affidavit, she additionally failed to comply with LRCvP 7.1(e) ***."). Inasmuch as the facts are relatively straightforward, this Court will overlook such inadvertence. Holtz v. Rockefeller Co., 258 F.3d 62, 73-74 (2d Cir. 2001) ("A district court has broad discretion to determine whether to overlook a party's failure to comply with local court rules"). Nonetheless, compliance with the LRCvP is strongly encouraged. See Aetna U.S. Healthcare v. Frazier, No. 00-CV-0454E(SR), 2002 WL 1677700, at *1 n. 2 (W.D.N.Y. July 22, 2002); Harris Corp. v. McBride Associates, Inc., No. 01-CV-0106E(F), 2002 WL 1677695, at *1 n. 1 (W.D.N.Y. July 19, 2002); Bagdasarian v. O'Neill, No. 00-CV-0258E(SC), 2002 WL 1628722, at *1-2 (W.D.N.Y. July 17, 2002). Indeed, noncompliance can result in sanctions. See Samborski v. West Valley Nuclear Services Co., Inc., No. 99-CV-0213E(F), 2002 WL 1477610, at *1-2 (W.D.N.Y. June 25, 2002).
The discovery rule of section 2-725(2), however, is not applicable to implied warranty claims because such, by definition, cannot "explicitly" extend to the future performance of the goods. See Orlando, at 223-224 (holding that the discovery rule is inapplicable to implied warranty claims because the discovery rule exception to section 2-725(2) "speaks to express warranties and not implied warranties"). Consequently, Brainard's implied warranty claims accrued on February 9, 1998 — when the Truck was tendered. Accordingly, her implied warranty claims will be dismissed as time barred under section 2-725. See ibid. (dismissing implied warranty claims as untimely where plaintiff filed suit more than four years after he had purchased the subject boat); Thalrose v. General Motors Corp., 1971 WL 17856, at *1 (Sup.Ct. May 4, 1971) (dismissing implied warranty claim as untimely where suit was filed more than fours years after automobile had been tendered).
See also Zielinski v. Alfa-Laval, Inc., No. 86-CIV-296E, 1989 WL 29482, at *2-3 (W.D.N.Y. Mar. 27, 1989) (discussing section 2-725 and noting that "[i]nasmuch as an implied warranty by definition embodies no `explicit' guarantees — the plaintiff's two implied warranty causes of action necessarily accrued as a matter of law at about the time of tender of delivery of the milking equipment ***. ") (citation omitted); Port Auth. Of N.Y. N.J. v. Allied Corp., 914 F. Supp. 960, 962-963 (S.D.N.Y. 1995) (holding that section 2-725 is inapplicable to implied warranty claims).
Notably, Novurania distinguishes the three cases Brainard cites for the proposition that the discovery rule applies to her warranty claims — although Brainard does not distinguish between her implied warranty claims and her express warranty claims. Id. at 224. Indeed, the cases cited by plaintiff are inapplicable to her implied warranty claims because they all involve application of the discovery rule to express warranty claims. See Warren W. Scott Son v. Am. Bldg., 93 A.D.2d 987 (4th Dep't 1983); Parzek v. New England Log Homes, Inc., 92 A.D.2d 954 (3d Dep't 1983); Mittasch v. Seal Lock Burial Vault, Inc., 42 A.D.2d 573 (2d Dep't 1973). Such cases are also inapplicable to Brainard's express warranty claims inasmuch as they all involved express claims of future performance.
Moreover, the discovery rule does not apply to Brainard's express warranty claims because Freightliner's express warranties do not "explicitly extend to future performance" of the Truck. The Freightliner New Vehicle Limited Warranty provided in relevant part:
Rosen v. Spanierman, 894 F.2d 28, 31 (2d Cir. 1990) (holding that warranty claims were barred as untimely because "[i]t would be inappropriate to expand [the discovery rule] exception [of section 2-725] beyond its plain terms by dispensing with the condition that, to take advantage of the exception, the warranty explicitly extend to future performance.").
"Freightliner warrants that each new Freightliner vehicle (truck, tractor, or glider kit), with the exception of certain excluded components and parts, will be manufactured to the specifications agreed upon and will be free from defects in material and workmanship which appear under normal use and service, subject to different time and distance limitations for specific components and parts as set fourth [sic] in the previous graph.
The Warranty sets forth various time and distance limitations. For example, the Basic Vehicle warranty provides coverage for one year or 100,000 miles, whichever occurs first. Such is irrelevant because "[w]arranty repairs do not constitute an extension of the original warranty period." Freightliner Owner's Warranty Information, at 7. Consequently, the need to apply the Warranty's time and distance limitations is obviated by this Court's finding that Brainard's warranty claims are time-barred.
* * * * *
"Purchaser must notify Freightliner, within the applicable warranty period, of any failure of the vehicle to comply with this limited warranty and Purchaser must, at Purchaser's expense, promptly return the vehicle, component or part to an authorized Freightliner dealer for inspection of any defect in material or workmanship occurring within the applicable time or distance limits.
"Freightliner's sole obligation shall be the repair or replacement, at Freightliner's option, of any defective component or part thereof. All components and parts are covered by the Basic Vehicle Warranty unless specifically covered by other descriptions, or otherwise excluded herein. Such repair or replacement shall be without cost to Purchaser when performed within the time or distance limits, whichever occurs first.
"On expiration of Freightliner's obligation for the cost of parts and labor in accordance with the time and distance limits stated herein, all liabilities of Freightliner to Purchaser under this limited warranty shall terminate. Warranty repairs do not constitute an extension of the original warranty period for the vehicle or for any specific component or part.
"The foregoing limited warranty is exclusive and in lieu of all other warranties whether written, oral or implied including, but not limited to any warranty of merchantability or fitness for purpose.
"This limited warranty specifically excludes any other warranties or conditions provided for by law, whether statutory or otherwise. See Freightliner Owner's Warranty Information, at 7 (emphasis added).
Accordingly, the Warranty is a "repair or replace" warranty — as opposed to a warranty extending to future performance. Indeed, under New York law,
"[a] warranty of future performance is one that guarantees that the product will work for a specified period of time. Warranties to repair or replace the product in the event that it fails to perform, without any promise of performance, do not constitute warranties of future performance." See St. Patrick's Home for Aged Infirm v. Laticrete, Int'l, 264 A.D.2d 652, 657 (1st Dep't 1999) (citations omitted).
The distinction between "repair or replace" warranties and warranties extending to future performance is well recognized. See Imperia v. Marvin Windows of N.Y., Inc., 2002 WL 31013046, at *2 (2d Dep't Sept. 9, 2002); H. Sand Co., Inc. v. Airtemp Corp., 738 F. Supp. 760, 770-771 (S.D.N.Y. 1990), aff'd in part and rev'd in part on other grounds, 934 F.2d 450 (2d Cir. 1991); Hull v. Moore's Mobile Homes Stebra, Inc., 214 A.D.2d 923, 924 (3d Dep't 1995); Liecar Liquors Ltd. v. CRS Bus. Computers, Inc., 613 N.Y.S.2d 298, 299 (3d Dep't 1994); Shapiro v. Long Island Lighting Co., 71 A.D.2d 671, 671 (2d Dep't 1979); Niagara Mohawk Power Corp. v. Ferranti-Packard Transformers, Inc., 597 N.Y.S.2d 884, 887 (Sup.Ct. 1993) ("a repair and replacement warranty is a promise to repair and replace during the warranty period only. It is not a warranty that the goods will never fail. It does not extend the basic four year warranty or any shorter time agreed to by the parties."), aff'd, 201 A.D.2d 902 (4th Dep't), leave to appeal denied by 1994 WL 131347 (4th Dep't), and leave to appeal dism'd by 83 N.Y.2d 953 (1994); cf. Ontario Hydro v. Zallea Sys., Inc., 569 F. Supp. 1261, 1266 (D.Del. 1983) ("the key distinction between these two kinds of warranties is that a repair or replacement warranty merely provides a remedy if the product becomes defective, while a warranty for future performance guarantees the performance of the product itself for a stated period of time"); cf. also Thalrose, at *1 (construing implied warranty claims and noting that "warrants granted with respect to automobiles are not prospective in nature, even though they represent that the car will work well for two or five years. That merely constitutes a representation of the present condition of the product and that it will be capable of enduring use for that period of time").
The Warranty does not guarantee that the truck will work for a specified period of time; it merely provides that Freightliner will repair or replace covered items subject to certain time and distance limitations — i.e., one year or 100,000 miles for the Basic Vehicle Warranty. Such time and distance limitations are merely limitations on coverage — not guarantees of future performance. See Broe v. Oneonta Sales Co., Inc., 100 Misc.2d 1099, 1100-1101 (Sup.Ct. 1978) (finding that "repair or replace" warranty for a truck was subject to time and distance limitations of one year or 50,000 miles and noting that such warranty language constitutes "a limitation of the time within which a claim must be asserted under the warranty"); Abraham v. Volkswagen of Am., Inc., 795 F.2d 238, 250 (2d Cir. 1986) (citing Broe for the proposition that the "general rule is that an express warranty does not cover repairs made after the applicable time or mileage periods have elapsed."). Consequently, the discovery rule of section 2-725 is inapplicable and Brainard's claims for breach of express warranty accrued on February 9, 1998 — the date of tender of delivery of the Truck. See ibid.; Castillo v. Iveco Truck Repair, No. 86-CIV-5155(WK), 1989 WL 551113, at *6 (S.D.N.Y. Oct. 3, 1989) (recommending dismissal of plaintiff's breach of warranty claims as untimely under section 2-725 because truck was tendered more than four years before suit was filed), adopted sub nom. Castillo v. Jackson, 1992 WL 77627, at *1 (S.D.N.Y. 1992).
See also Gianakakos v. Commodore Home Sys., Inc., 285 A.D.2d 907, 908 (3d Dep't 2001) (construing manufactured home warranty as subject to one year time limitation and holding that it "is expressly limited to repair or replacement and did not guaranty performance in the future, i.e., that the product would work for a specified period of time").
See also Constable v. White Motor Corp., 65 Misc.2d 195, 196 (Sup.Ct. 1970) (applying section 2-725 and finding breach of warranty claims accrued when the tractor truck was delivered).
Accordingly, it is hereby ORDERED that defendant's motion for summary judgment is granted, that plaintiff's breach of warranty claims are dismissed, that discovery may continue with respect to plaintiff's breach of contract claim, and that counsel shall appear before Part III of this Court on October 16, 2002 at 4:15 p.m. for a FRCvP 16(b) conference.
The conference may be conducted by telephone if pre-arranged by October 11, 2002 in writing with all parties agreeing as to who will initiate the conference call.