Nebraska Plastics, Inc. v. Holland Colors Americas, Inc.

Full title: NEBRASKA PLASTICS, INC., a Nebraska Corporation, Plaintiff vs. HOLLAND…

Court: United States District Court, D. Nebraska

Date published: Nov 12, 2003

4:01CV603 (D. Neb. Nov. 12, 2003)

Opinion

4:01CV603

November 12, 2003

MEMORANDUM AND ORDER ON DEFENDANTS' MOTION FOR SUMMARY JUDGMENT

WARREN URBOM, Senior District Judge

The plaintiff, Nebraska Plastics, Inc. (Nebraska Plastics), filed a six-count petition in the District Court of Dawson County, Nebraska, alleging that Defendants Holland Colors Americas Inc. (Holland Colors) and OMYA, Inc. (OMYA) breached implied warranties for a particular purpose (Count I), breached implied warranties of merchantability (Count II), breached express warranties (Count III), negligently designed and manufactured certain materials (Count IV), made negligent misrepresentations (Count V), and engaged in fraudulent concealment (Count VI). (See Notice of Removal, filing 1, Attach 1.) The defendants removed the case to this court pursuant to 28 U.S.C. § 1332 and 1441. (See Notice of Removal, filing 1.) Now before me are "Defendant Holland Colors Americas, Inc.'s Motion for Summary Judgment or in the Alternative, Motion for Partial Summary Judgement," filing 101, and "Defendant OMYA, Inc.'s Motion for Summary Judgment or in the Alternative for Partial Summary Judgment," filing 105. For the following reasons, I find that Holland Colors' motion for summary judgment will be denied, and OMYA's motion for summary judgment will be granted in part.

I. BACKGROUND ¹

1 The following facts are presented in the parties' statements of facts, see NELR 56.1, and are taken in a light most favorable to the plaintiff, see Adickes v. S. H. Kress Co., 398 U.S. 144, 157 (1970). I note that some of the parties' facts have not been supported by references to the record. Defendant OMYA has presented several statements of fact that are not accompanied by references to the "specific . . . deposition testimony (by page and line)" that allegedly support the statements. NELR 56.1(b). (See, e.g., Def. OMYA, Inc.'s Amended Mem. in Supp. of Mot. for Summ. J., filing 130, Attach. 1, "Statement of Undisputed Facts" ¶¶ 12, 14-15, 32, 44.) OMYA's statements of fact also refer to discovery materials that are not included in its evidence index, (see, e.g., id. ¶¶ 25, 33), and contain allegations that are not consistent with the evidence cited, (see, e.g., id. ¶¶ 16-17). Nebraska Plastics' statement of facts too contains allegations that are inadequately supported, (see, e.g., Pl.'s Br. in Opp'n to Defs.' Mots. for Summ. J., filing 137, at 8 (citing Dep. of Rob Leversedge at 61:23 and 62:13), as does Holland Colors', (see, e.g., Def.'s Br. in Supp. of Mot. for Summ. J., filing 102, "Statement of Uncontradicted Facts" ¶ 6.) All fact statements that fail to comply with the applicable local rules will be disregarded.

Nebraska Plastics is a Nebraska corporation with its principal place of business in Cozad, Dawson County, Nebraska. (See Notice of Removal, filing 1, Attach. 1 ¶ 1.) At all relevant times, Nebraska Plastics was a manufacturer of plastic products, including rigid polyvinyl chloride (PVC) fencing. (See id.; see also Index of Evid. in Supp. of Pl.'s Opp'n to Defs.' Mots. for Summ. J., filing 138 (hereinafter Nebraska Plastics Index), Ex. 11, Sims Aff. ¶ 2.) Leo Sims, who is Nebraska Plastics' Vice President of Manufacturing, states that Nebraska Plastics' PVC fencing "is made from a combination of raw materials which include PVC resin, a lubricant or wax package which aids in processing, a heat stabilizer which helps the product resist heat through processing and helps weatherability, "CPE," which is an impact modifier that helps impact resistance, chalking titanium oxide (TiO2) in white products and non-chalking or low-chalking TiO2 in colored product, pigment in its colored PVC product, and calcium carbonate in its white PVC products." (Nebraska Plastics Index, Ex. 11, Sims Aff. ¶¶ 1, 6.) These raw materials are purchased from a variety of sources, (see id. ¶ 10), including the defendants. Defendant Holland Colors is a Delaware corporation with its principal place of business in Richmond, Indiana. (See Notice of Removal, filing 1, Attach. 1 ¶ 2.) At all relevant times, Holland Colors designed, manufactured, and sold pigment or colorant for a wide variety of polymers, including PVC. (See id.) Holland Colors' sales agent, Richard Bushart, estimates that he began selling color pigment to Nebraska Plastics for use in certain products in the 1980's. (See Nebraska Plastics Index, Ex. 4, Bushart Dep. at 57:3-58:3.) Defendant OMYA is a Vermont corporation with its principal place of business in Proctor, Vermont. (See Notice of Removal, filing 1, Attach. 1 ¶ 3.) At all relevant times, OMYA designed, manufactured, and sold calcium carbonate products. (See id.) Calcium carbonate acts as a filler and can reduce the cost of a PVC formula, save wear and tear on the processing equipment, and increase the ability of a PVC product to withstand impacts. (Index of Evidence in Support of OMYA, Inc.'s Mot. for Summ. J., filing 108 (hereinafter OMYA's Index), Ex. 1, German Dep. at 172:4-174:5.) John Watson, OMYA's sales representative, indicates that he personally began dealing with Nebraska Plastics in 1987 and that Nebraska Plastics had been using OMYA products prior to that time. (See Nebraska Plastics Index, Ex. 5, Watson Dep. at 21:16-22:9.)

According to Richard Bushart, the "standard procedure" followed by PVC manufacturers and their raw material suppliers is as follows. (See Nebraska Plastics Index, Ex. 4, Bushart Dep. at 44:9-18.)² The raw material supplier first obtains the manufacturer's product formula and presents that formula to its technical group. (See id. at 44:9-18, 48:1-49:8.) After the technical group determines the quantity of raw material that should be added to the formula, the raw material supplier then makes recommendations to the manufacturer based upon the technical group's findings. (See id.) When raw materials are added to a product, the raw material supplier may then conduct tests on the modified product. For example, Holland Colors conducted tests on Nebraska Plastics' PVC compound for weatherability, (see, e.g., id. at 76:10-78:25), and OMYA conducted "impact studies" on the compound, (see Nebraska Plastics Index, Ex. 6, Batiste Dep., Deposition Ex. 92; OMYA's Index, Ex. 2, Sims Dep. at 219:1-220:18).

2 Holland Colors disputes whether this "standard procedure" was followed in this case. (See Reply Br. of Holland Colors Americas, Inc. in Supp. of Mot. for Summ. J., filing 160 (hereinafter Holland Colors' Reply Br.) at 2-3.) Specifically, Holland Colors disputes whether Nebraska Plastics gave its PVC formula, as opposed to a sample of its PVC compound, to Holland Colors as described below. (See id. But see Nebraska Plastics Index, Ex. 4, Bushart Dep. at 69:20-71:9; id., Ex. 11, Sims Aff. ¶¶ 20-22. See also infra.) It seems to me that the precise date of Holland Colors' receipt of Nebraska Plastics' formula must be resolved by the trier of fact, and for the purposes of this memorandum, Nebraska Plastics is entitled to the benefit of the inference that it provided its PVC formula to Holland Colors to develop a colored fencing formula. (See infra.)

Initially, Nebraska Plastics manufactured only white PVC fencing. (See Nebraska Plastics Index, Ex. 2, German Dep. at 6:6-8:10.) From approximately 1993 to 1996, Nebraska Plastics began to develop a line of colored PVC fencing. (See id., Ex. 11, Sims Aff. ¶ 4.) Sims states that in 1994, he had a conversation with Doug Brainard of Holland Colors about colored fencing. (Nebraska Plastics Index, Ex. 1, Sims Dep. at 143:4-6, 147:1-148:3.) According to Sims, Brainard knew that Nebraska Plastics did not have the technical understanding to produce "an outdoor weatherable colored compound," and he assured Sims that Holland Colors could provide the technical expertise needed to develop colored products. (Id. at 9-10; see also id. at 130:18-131:5, 147:1-148:3; Nebraska Plastics Index, Ex. 11, Sims Aff. ¶¶ 19, 21;see also id., Ex. 3, Leversedge Dep. at 59:24-60:16, 61:6-12, 64:18-65:25 (indicating that Holland Colors presented itself as capable of developing and testing a weatherable product).) Holland Colors was made aware that the colored products must comply with Nebraska Plastics' 20-year warranty, (see Nebraska Plastics Index, Ex. 11, Sims Aff. ¶ 19; id., Ex. 1, Sims Dep. at 146:8-21, 148:8-20, 262:25-263:5), and Holland Colors assured Nebraska Plastics that it had the expertise to provide a suitable product, (see id., Ex. 1, Sims Dep. at 148:8-20). There is evidence that Nebraska Plastics believed that it was to receive the benefit of this expertise when it agreed to pursue the development of a line of colored fencing with Holland Colors. (See id., Ex. 11, Sims Aff. ¶¶ 21-22.) Nebraska Plastics provided Holland colors with its compound formula, (see id. ¶ 18), and Holland Colors began to work with Nebraska Plastics to develop and process a colored fencing product that contained Holland Colors' pigment. During the course of this relationship, Mr. Bushart sold new equipment to Nebraska Plastics, including "tricklers" to introduce the pigment into the PVC compound, (see id., Ex. 1, Sims Dep. at 151:16-152:11), and Holland Colors recommended changes to Nebraska Plastics' production process, (see id., Ex. 11, Sims Aff. ¶ 17), and formula, (see id., Ex. 1, Sims Dep. at 253:10-254:1).

The business relationship between Nebraska Plastics and OMYA was similar to that between Nebraska Plastics and Holland Colors. There is evidence that Nebraska Plastics chose to do business with OMYA based upon the "hands-on" technical support that OMYA provided. (See, e.g., Nebraska Plastics Index, Ex. 11, Sims Aff. ¶ 23;id., Ex. 1, Sims Dep. at 219:14-19, 277:21-24.) Over the years, the technical support group at OMYA reviewed Nebraska Plastics' formula and assisted Nebraska Plastics with manufacturing problems that arose. (See, e.g., id., Ex. 11, Sims Aff. ¶¶ 24-25;id., Ex. 5, Watson Dep. at 31:23-33:17, 42:14-43:22 and Deposition Exhibits 115, 119 at 2 ("We have over the years bent over backwards for Nebraska Plastics with lab data and visits . . . and I believe that Nebraska Plastics appreciates our help."), 121, 124, 133 at "OMYA 242.") OMYA's technical services included studies of the weatherability of Nebraska Plastics non-colored products that contained OMYA's "UFT" calcium carbonate. (See Index of Evidence in Supp. of Nebraska Plastics, Inc.'s Surreply Br., filing 182 (hereinafter Nebraska Plastics' Surreply Index), Ex. B at OMYA 94-102, 230.) In 1991, Nebraska Plastics told John Watson that it was interested in manufacturing colored fencing that would contain OMYA's UFT. (See id., Ex. 5, Watson Dep. at 28:22-30:5.) After Nebraska Plastics began to manufacture its colored fencing product with Holland Colors pigment, OMYA advised Nebraska Plastics to continue to use OMYA's "UFT" in both its white and colored fencing. (See id., Ex. 11, Sims Aff. ¶ 27; id., Ex. 1, Sims Dep. at 282:10-23, 283:6-12.) Indeed, Watson eventually encouraged Nebraska Plastics to increase its "UFT" content from eight parts per hundred to ten parts per hundred, and assured Nebraska Plastics that the quality³ of its fencing would not be affected by this change. (See id., Ex. 5, Watson Dep., Deposition Exhibit 92; id., Ex. 11, Sims Aff. ¶ 28.)

3 There is no evidence that this representation specifically related to weatherability.

In 1996, Nebraska Plastics began to manufacture and sell colored PVC fence that contained both the pigment provided by Holland Colors and the calcium carbonate product provided by OMYA. (See Nebraska Plastics Index, Ex. 11, Sims Aff. ¶¶ 5, 7, 8.) In late 1997 or early 1998, Nebraska Plastics began receiving complaints that its colored fences were showing excessive fading, chalking, or weathering; the fences was fading to a paler color. (Nebraska Plastics Index, Ex. 11, Sims Aff. ¶ 29.) Nebraska Plastics investigated the claims, (see id., Ex. 1, Sims Dep. at 204:6-14), and discovered that the entire fences had "faded" or "chalked," (see id., Ex. 11, Sims Aff. ¶ 30). In March 1998, Nebraska Plastics alerted Holland Colors to a particular customer complaint regarding weathering. (See id., Ex. 3, Leversedge Dep. at 69:7-12, 73:13-17, 81:23-82:7, Deposition Exhibits 6, 7.) A group of Holland Colors' managers met to discuss this complaint and concluded, inter alia, that the "UFT" calcium carbonate filler should be removed from Nebraska Plastics formula. (See id., Ex. 3, Leversedge Dep. at 81:17-82:23, 83:1-10, 85:6-86:22, Deposition Exhibit 5.) Mr. Leversedge, who was Holland Colors' technical manager, sent Nebraska Plastics' formula and photographs of the faded fencing to George Rangos of Cerdec Corporation. (See id., Ex. 3, Leversedge Dep. at 105:3-16, Deposition Exhibit 7.) Leversedge sought Rangos' opinion regarding the cause of Nebraska Plastics' fading problem. (See id., Ex. 3, Leversedge Dep. at 105:3-106:7, Deposition Exhibit 7.) On May 12, 1998, Rangos responded, stating, "[W]e would not recommend the use of any filler in the RPVC compound," (id., Ex. 3, Leversedge Dep., Deposition Exhibit 8), which was consistent with Holland Colors' own conclusions regarding the cause of the fading. However, Holland Colors did not relay its own or Rangos' conclusions to Nebraska Plastics. (See id., Ex. 3, Leversedge Dep. at 107:15-108:24; id., Ex. 11, Sims Aff. ¶ 32.) Instead, on September 22, 1998, Holland Colors sent representatives to Nebraska Plastics' plant, ostensibly to help find a resolution to Nebraska Plastics' color problems. (See id., Ex. 3, Leversedge Dep., Deposition Exhibit 11.)⁴ These representatives recommended that Nebraska Plastics use new equipment to measure color consistency and change its manufacturing process, and Nebraska Plastics adopted those recommendations. (See id., Ex. 11, Sims Aff. ¶ 32; id., Ex. 3, Leversedge Dep., Deposition Ex. 11.) However, Holland Colors still did not inform Nebraska Plastics of its conclusions regarding the cause of the weathering problems. In fact, Mr. Leversedge's memorandum summarizing Holland Colors' visit to Nebraska Plastics states, "* * It should be noted from an industry standpoint that CPE Omyacarb UFT cause negative weathering effects. This was not noted to Nebraska at this point since Dick B. sells CPE." (Id., Ex. 3, Leversedge Dep., Deposition Exhibit 11.)⁵ After Holland Colors' visit to Nebraska Plastics' plant, it continued to perform a variety of technical services to investigate the color problems, even as it continued to receive opinions from consultants stating that calcium carbonate should not be used in outdoor, colored PVC products. (See Nebraska Plastics Index, Ex. 11, Sims Aff. ¶ 33; id., Ex. 3, Leversedge Dep. at 194:16-195:7, Deposition Exhibit 21.)

4 Holland Colors argues in its Reply Brief that "the problem being investigated [did not have] anything to do with 'weathering,'" and suggests that Nebraska Plastics has presented a misleading description of the relevant events. (See Holland Colors' Reply Br. at 5-8.) Although the "problem being investigated" apparently did involve color consistency problems apart from weathering, Holland Colors' argument is not well-taken in view of the fact that "weathering" is mentioned repeatedly throughout the exhibit summarizing Holland Colors' September 22, 1998, site visit. (See Nebraska Plastics Index, Ex. 3, Leversedge Dep., Deposition Exhibit 11 at 1-2.)

5 The reference to "Dick B." in this document refers to Dick Bushart. There is evidence that Mr. Leversedge was instructed by Holland Colors not to disclose the negative weathering effects of CPE and UFT because Bushart sold CPE. (See Nebraska Plastics Index, Ex. 3, Leversedge Dep. at 127:12-22.)

Although Nebraska Plastics did not ask OMYA to test the colored fencing formula for weatherability, (see OMYA's Index, Ex. 12 at 1), there is evidence that sometime in 1998, Nebraska Plastics informed OMYA, through John Watson, that its customers were complaining about color fading, (see Nebraska Plastics Index, Ex. 11, Sims Aff. ¶ 34). In the summer and fall of 2000, Leo Sims twice asked OMYA whether calcium carbonate was the cause of Nebraska Plastics' fencing problems, and twice OMYA replied in the negative. (See id., Ex. 1, Sims Dep. at 212:11-21, 213:10-214:19, 215:5-9, 216:6-16, 220:19-221:7.) In the fall of 2000, Sims again asked John Watson whether calcium carbonate was adversely affecting the weatherability of the fencing. (See id., Ex. 5, Watson Dep., Deposition Exhibit 98.) Watson asked John Batiste, who is OMYA's "manager of paint and plastics technology," (id., Ex. 6, Batiste Dep. at 9:12-19), to respond to Sims' question, (see id., Ex. 5, Watson Dep., Deposition Exhibit 98). When he contacted Batiste, Watson commented that he had previously heard the "message" that calcium carbonate caused chalking in colored products, (id., Ex. 5, Watson Dep., Deposition Exhibit 98), but did not inform Nebraska Plastics of this "message," (see id., Ex. 11, Sims Aff. ¶ 36). Batiste told Sims that calcium carbonate was not the cause of the chalking. (See id., Ex. 6, Batiste Dep. at 92:8-93:8.) Instead, he recommended that Nebraska Plastics "switch to capstock technology."⁶ (Id., Ex. 6, Batiste Dep., Deposition Exhibit 100.)

6 "Capstock technology" is a reference to a "co-extrusion" manufacturing process. (See Nebraska Plastics Index, Ex. 6, Batiste Dep. at 100:18-102:18.) At all relevant times, Nebraska Plastics "mono-extruded" its fencing products. (See id., Ex. 11, Sims Aff. ¶ 13.) Mono-extrusion results in "a solid wall of PVC fencing product," while co-extrusion "involves manufacturing an outer layer of PVC 'veneer' imposed onto an inner layer of PVC." (Id.) In effect, Batiste told Nebraska Plastics that calcium carbonate was not causing its weathering problems, but that to address these problems, it should switch to a new extrusion process in order to coat the fencing in a veneer, or capstock, that contained no calcium carbonate. (See id., Ex. 6, Batiste Dep. at 100:18-102:18, Deposition Exhibit 100.)

Eventually, Nebraska Plastics learned from other sources that calcium carbonate was the cause of its products' fading problems. (See id., Ex. 3, Leversedge Dep., Deposition Exhibit 20; id., Ex. 1, Sims Dep., Deposition Exhibit 52.) It was not until February 2001 that Holland Colors began to insinuate that it "suspected [calcium carbonate] was the cause of the problem." (Id., Ex. 3, Leversedge Dep., Deposition Exhibit 22.) In January 2001, Nebraska Plastics removed all calcium carbonate from its outdoor PVC fencing formulas. (See id., Ex. 1, Sims Dep. at 164:20-24.) It has received no customer complaints regarding weathering or chalking since that time. (See id. at 164:7-19, 173:6-19.) On October 3, 2001, Nebraska Plastics filed the aforementioned six-count petition in the District Court of Dawson County, Nebraska, which was removed to this court pursuant to 28 U.S.C. § 1332 and 1441. (See Notice of Removal, filing 1, Attach 1.) The defendants have answered the petition, (see filings 9, 72), and I note that Holland Colors' Second Amended Answer to the plaintiff's petition includes a counterclaim alleging that Nebraska Plastics owes it $50,722.66 for "certain color concentrates or pigments" supplied between March and June 2001, (see Def. Holland Colors Americas, Inc.'s Second Amended Answer, filing 72, at 3-4). Each of the defendants have filed motions for summary judgment on the plaintiff's petition, (see filings 101, 105), and my analysis of these motions follows.

II. STANDARD OF REVIEW

A motion for summary judgment shall be granted by the court when "there is no genuine issue as to any material fact and . . . the moving party is entitled to a judgment as a matter of law." FED. R. CIV. P. 56(c). A genuine issue of material fact exists when there is sufficient evidence favoring the party opposing the motion for a jury to return a verdict for that party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). In determining whether a genuine issue of material fact exists, the evidence is to be taken in the light most favorable to the nonmoving party. Adickes v. S. H. Kress Co., 398 U.S. 144, 157 (1970). If the moving party meets the initial burden of establishing the nonexistence of a genuine issue, then the burden shifts to the nonmoving party to produce evidence of the existence of a genuine issue for trial.Celotex Corp. v. Catrett, 477 U.S. 317, 323-24 (1986). The nonmoving party "must present affirmative evidence in order to defeat a properly supported motion for summary judgment," Anderson, 477 U.S. at 257, and "may not rest upon mere allegation or denials of his pleading, but must set forth specific facts showing that there is a genuine issue for trial," id. at 256 (citing Federal Rule of Civil Procedure 56(e)).

III. ANALYSIS

Holland Colors and OMYA each raise a number of arguments in support of their respective motions for summary judgment. (See generally Def.'s Br. in Supp. of Mot. for Summ. J., filing 102 (hereinafter Holland Colors' Br.); Def. OMYA, Inc.'s Am. Mem. in Supp. of Mot. for Summ. J. or in the Alternative for Partial Summ. J., filing 130, Attach. 1 (hereinafter OMYA's Br.).)⁷ I shall review each of these arguments in turn, though not necessarily in the order in which the defendants have presented them.

7 OMYA filed a motion to amend its brief in support of its motion for summary judgment to correct an oversight. (See Def. OMYA, Inc.'s Mot. to Amend Mem. in Supp. of Mot. for Summ. J. or in the Alternative for Partial Summ. J., filing 130.) A copy of the amended memorandum is attached to that motion. (See id. at Attach. 1.) I will grant OMYA's motion to amend its brief, and I shall consider the memorandum appearing as the attachment to filing number 130 to be OMYA's brief in support of its motion for summary judgment.

A. Statute of Limitations

1. Holland Colors a. Breach of Warranty Claims.

Holland Colors argues that it is entitled to summary judgment on a number of Nebraska Plastics' breach of warranty claims because "[a] number of the customer complaints on which Plaintiff bases its Complaint arose out of fence sales occurring more than four years before October 3, 2001, the date Plaintiff filed its Petition." (Holland Colors Br. at 7.)

The parties are in agreement that Nebraska Uniform Commercial Code section 2-725 governs the issue raised by Holland Colors' argument. In relevant part, that section states,

(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 limitation 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.

Neb. Rev. Stat. U.C.C. § 2-725. Holland Colors argues that in this case, Nebraska Plastics' causes of action based on breach of warranty, which include Counts I-III, accrued when Nebraska Plastics received shipments of Holland Colors' pigment. If this is true, Holland Colors notes that these causes of action are barred by the four-year statute of limitations set forth in § 2-725(1) to the extent that they are based upon some 15 incidents of fence fading involving fences that were manufactured prior to October 3, 1997. (See Holland Colors Br. at 8-9.) In response, Nebraska Plastics argues that its breach of warranty causes of actions did not accrue when it received Holland Colors' pigment shipments, but instead accrued when Holland Colors' breach was discovered, i.e., when the customer complaints were received.

Nebraska Plastics' response to Holland Colors' argument is based upon the "future performance" exception set forth in Neb. Rev. Stat. U.C.C. § 2-725(2). It seems to me that this exception does not apply to Counts I and II of the petition. As the Nebraska Supreme Court has stated, "the exception applies only to an express warranty and not to an implied warranty." Murphy v. Speltz-Schultz Lumber Co. of Grand Island, 481 N.W.2d 422, 430 (Neb. 1992). Therefore, to the extent that Nebraska Plastics seeks to recover damages under implied warranty theories, any claims arising out of materials delivered by Holland Colors to Nebraska Plastics prior to October 3, 1997, are barred by § 2-725, unless it is determined that Holland Colors is estopped from asserting a statute of limitations defense. The issue of estoppel will be addressed below.

If the "future performance" exception does apply, then Nebraska Plastics may be able to recover damages for claims arising out of customer complaints that were received on or after October 3, 1997, under Count III of its petition.⁸ As noted above, there must be an express warranty in order for the exception to be triggered. See Murphy v. Speltz-Schultz Lumber Co. of Grand Island, 481 N.W.2d 422, 430 (Neb. 1992). Therefore, I begin my analysis by determining whether an express warranty extending to future performance was made to Nebraska Plastics by Holland Colors.

8 Parenthetically, I note that Holland Colors has identified some customer complaints that were made prior to October 3, 1997; specifically, the "Tim McAdoo" claim was received by Nebraska Plastics on August 15, 1997, (see Index of Evid. in Supp. of Holland Colors Americas Inc.'s Mot. for Summ. J., filing 103 (hereinafter Holland Colors Index), Ex. 175), the "Kathy Johnson" claim was received by July 17, 1997, (see id. at Ex. 181), and it appears that the "Armand Smith" claim was made, at least in part, in May 1996, (see id. at Exs. 205, 208, 209). Even if the "future performance" exception applies in this case, these complaints fall beyond the four years allotted under Neb. Rev. Stat. U.C.C. § 2-725.

According to the Nebraska Uniform Commercial Code,

(1) Express warranties by the seller are created as follows:

(a) 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 the goods shall conform to the affirmation or promise.

(b) Any description of the goods which is made part of the basis of the bargain creates an express warranty that the goods shall conform to the description.

(c) Any sample or model which is made part of the basis of the bargain creates an express warranty that the whole of the goods shall conform to the sample or model.

(2) It is not necessary to the creation of an express warranty that the seller use formal words such as "warrant" or "guarantee" or that he have a specific intention to make a warranty, but an affirmation merely of the value of the goods or a statement purporting to be merely the seller's opinion or commendation of the goods does not create a warranty.

Neb. Rev. Stat. U.C.C. § 2-313. A warranty need not be written in order to be "express" within the meaning of § 2-313. See, e.g., Moore v. Puget Sound Plywood, 332 N.W.2d 212, 214 (Neb. 1983).

I find that there is a genuine issue of fact with respect to the existence of an explicit warranty regarding future performance. There is evidence that Holland Colors specifically represented to Nebraska Plastics that it could provide the technical assistance to produce an outdoor, weatherable, colored fencing product, (see Nebraska Plastics Index, Ex. 1, Sims Dep. at 130:18-131:5, 143:4-6, 147:1-148:3;id., Ex. 11, Sims Aff. ¶¶ 19, 21; id., Ex. 3, Leversedge Dep. at 59:24-60:16, 61:6-12, 64:18-65:25), and did, in fact, test the color fencing compound's weatherability upon Nebraska Plastics' request, (see id., Ex. 4, Bushart Dep. at 76:10-78:25). Even if representing that the product will be "weatherable" does not inherently amount to an explicit representation regarding future performance — and I believe it does, based upon my interpretation of Moore v. Puget Sound Plywood, 332 N.W.2d 212, 214-15 (Neb. 1983) — there is evidence that Holland Colors was aware that the fencing must last for 20 years and that it represented that the product would be able to do so. (See Nebraska Plastics Index, Ex. 11, Sims Aff. ¶ 19; id., Ex. 1, Sims Dep. at 146:8-21, 148:8-20, 262:25-263:5.) There is also evidence that Nebraska Plastics relied upon these representations. (See supra Part I.) In view of this evidence, Holland Colors is not entitled to summary judgment on this issue. See Moore, 332 N.W.2d at 214-15 (Neb. 1983); Murphy v. Speltz-Schultz Lumber Co. of Grand Island, 481 N.W.2d 422, 430-31 (Neb. 1992) (distinguishing Moore and citing cases); cf. Marvin Lumber and Cedar Co. v. PPG Industries, Inc., 223 F.3d 873, 878-881 (8th Cir. 2000) (discussing warranty-of-future performance claims under Minnesota's versions of Nebraska U.C.C. §§ 2-725 and 2-313).

Although I have found that there is a genuine issue as to whether an express warranty has triggered the "future performance" exception of § 2-725, I must now consider Holland Colors' argument that any such warranty was disclaimed.

Pursuant to 29 C.F.R. § 1910.1200(g), Holland Colors developed a "material safety data sheet" (MDS) for hazardous chemicals it sold to Nebraska Plastics, and Nebraska Plastics apparently kept these sheets in its possession. The MDS contains several sections, including ones entitled "HAZARDOUS INGREDIENTS/SARA III INFORMATION," "FIRE AND EXPLOSION HAZARD DATA," and "HEALTH HAZARD DATA." (See, e.g., Holland Colors Index, Ex. 61, at 1, 2; see also id., Exs. 239, 240.) At the bottom of page four, which is the last page of the MDS, the following language appears:

NO REPRESENTATION OR WARRANTIES, EITHER EXPRESSED OR IMPLIED, OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR ANY OTHER NATURE ARE MADE HEREUNDER WITH RESPECT TO INFORMATION OR PRODUCT TO WHICH INFORMATION REFERS.

(Holland Colors Index. Ex. 61 at 4; see also id., Ex. 239 at 4 and Ex. 240 at 4.) Holland Colors argues that this language effectively disclaims any express or implied warranties "with respect to pigments it sold to Nebraska Plastics." (Holland Colors Br. at 11.) I disagree. First, I note that although this "disclaimer's" use of the term "hereunder" is awkward in view of the fact that the disclaimer appears at the bottom of the last page of the MDS, it seems clear that the purpose of the disclaimer is to establish that the MDS itself does not make any warranties.⁹ In other words, the disclaimer contained in the MDS, which was most likely delivered to Nebraska Plastics well after the terms of the sale had been negotiated and agreed upon, see 29 C.F.R. § 1910.1200(g)(6) (indicating that an MDS must be provided to purchasers by the time of the shipment), does not, according to its own terms, purport to disclaim any warranties that might have been made when the bargain was negotiated. Second, I agree with Nebraska Plastics that this disclaimer is "ineffectual" as a matter of law because Holland Colors has presented no evidence that Nebraska Plastics assented to this language or can be "charged with knowledge as to the transaction."Pfizer Genetics, Inc. v. Williams Management Co., 281 N.W.2d 536, 539 (Neb. 1979) ("[D]isclaimers or warranty made on or after delivery of the goods by means of an invoice, receipt, or similar note are ineffectual unless the buyer assents or is charged with knowledge as to the transaction."). Evidence that Nebraska Plastics received and maintained copies of the MDS as required by federal regulations does not amount to evidence of assent to the disclaimer's terms. (See Holland Colors Reply Br. at 8.) Third, according to the first comment to § 2-316, an express warranty cannot be disclaimed by subsequent "unexpected and unbargained language," which is precisely what the disclaimer included in the MDS appears to be. For the foregoing reasons, I reject Holland Colors' argument that it effectively disclaimed all express or implied warranties concerning the colored fencing compound at issue in this case.

9 This interpretation is consistent with the definition of the term "information," which appears in the paragraph preceding the disclaimer and states, "the information and recommendations set forth herein (hereafter "Information"). . . ." (Holland Colors Index. Ex. 61 at 4; see also id., Ex. 239 at 4 and Ex. 240 at 4 (emphasis added).)

A genuine issue remains for trial with respect to the existence of an express warranty and, therefore, the "future performance" exception in § 2-725 may bring more of Nebraska Plastics' claims within the statute of limitations. As I noted above, there are claims that do not appear to fall within the statute of limitations even if the "future performance" exception applies. (See supra note 8.) However, Nebraska Plastics has also argued that Holland Colors should be estopped from raising a statute of limitations defense because it "concealed the facts necessary for Nebraska Plastics to discover its causes of action." (Pl.'s Br. in Opp'n to Defs.' Mots. for Summ. J., filing 137 (hereinafter Nebraska Plastics Br.) at 25.) If this estoppel applies, then perhaps the plaintiff may recover damages based upon even the earliest claims identified by Holland Colors in its brief. (See Holland Colors Br. at 8-9.)

As Nebraska Plastics correctly notes, "One who by deception conceals material facts and thereby prevents discovery of the wrong should not be permitted to take advantage of his or her own deceit or concealment by asserting the statute of limitations or repose." Schendt v. Dewey, 520 N.W.2d 541, 548 (Neb. 1994) (citing Muller v. Thaut, 430 N.W.2d 884, 889 (Neb. 1988)). However, "if a plaintiff has ample time to institute his action, after the inducement for delay has ceased to operate, he cannot excuse his failure to act within the statutory time on the ground of estoppel." Luther v. Sohl, 181 N.W.2d 268, 270 (Neb. 1970). In order to invoke this doctrine of equitable estoppel, Nebraska Plastics must prove the following six elements by clear and convincing evidence:

[On the part of the party to be estopped,] (1) conduct which amounts to a false representation or concealment of material facts or, at least, which is calculated to convey the impression that the facts are otherwise than, and inconsistent with, those which the party subsequently attempts to assert; (2) the intention, or at least the expectation, that such conduct shall be acted upon by, or influence, the other party or other persons; [and] (3) knowledge, actual or constructive, of the real facts; [and, on the part of the party asserting estoppel,] (4) lack of knowledge and of the means of knowledge of the truth as to the facts in question; (5) reliance, in good faith, upon the conduct or statements of the party to be estopped; and (6) action or inaction based thereon of such a character as to change the position or status of the party claiming estoppel.

Keene v. Teten, 602 N.W.2d 29, 39 (Neb.Ct.App. 1999).See also Hamilton v. Hamilton, 496 N.W.2d 507, 512 (Neb. 1993);Woodard v. City of Lincoln, 588 N.W.2d 831, 836 (Neb. 1999). As to the first element, I find that Nebraska Plastics has come forward with evidence indicating that Holland Colors concealed material facts; specifically, the negative weathering effects of the calcium carbonate included in the colored fencing compound were concealed despite the special nature of the business relationship between the parties.¹⁰ As to the second element, there is evidence that Holland Colors intended to influence Nebraska Plastics by concealing this information because one of its associates, Richard Bushart, sold a product to Nebraska Plastics that might have contributed to the negative weathering effects. As to the third element, there is evidence that Holland Colors had actual knowledge of the negative weathering effects of calcium carbonate. As to the fourth, there is evidence that Nebraska Plastics did not have knowledge of the truth regarding the negative effects of calcium carbonate, and that it had no means of obtaining this knowledge without reliance upon the expertise of others, such as its raw materials suppliers. As to the fifth element, there is evidence that Nebraska Plastics relied upon Holland Colors' expertise and advice in good faith. Finally, as to the sixth element, there is evidence that Holland Colors did not act to remove the calcium carbonate from its colored fencing products until it discovered, through another source, its negative effects, and that this delay in identifying the problem has placed some of its claims beyond the period covered by the relevant statute of limitations.

10 Citing Upah v. Ancona Brothers Co., 521 N.W.2d 895, 905 (Neb. 1994) disapproved of on other grounds by Welsch v. Graves, 582 N.W.2d 312, 316 (Neb. 1998), Nebraska Plastics argues that because of the "trust or confidential relationship" between itself and Holland Colors, Holland Colors commited fraudulent concealment by "mere silence." (See Nebraska Plastics Br. at 25.) A "trust or confidential relationship" for the purposes of the Upah rule is similar to a fiduciary relationship. See Upah, 521 N.W.2d at 902, 905. According to the Nebraska Supreme Court, "A confidential relationship exists between two persons if one has gained the confidence of the other and purports to act or advise with the other's interest in mind." Bloomfield v. Nebraska State Bank, 465 N.W.2d 144, 149 (Neb. 1991). I find that Nebraska Plastics has come forward with sufficient evidence to show that a "confidential relationship" existed between it Holland Colors. Specifically, there is evidence that proprietary formulas were exchanged, that Holland Colors purported to act and advise Nebraska Plastics with Nebraska Plastics' interests in mind, that Holland Colors had the opportunity to influence Nebraska Plastics, and that Holland Colors had gained Nebraska Plastics confidence. In view of these facts, I agree with Nebraska Plastics that Holland Colors need not have engaged in an affirmative act of misrepresentation in order to have committed fraudulent concealment. However, I note that even if there were no "confidential relationship" between Nebraska Plastics and Holland Colors, there is sufficient evidence to raise a genuine issue for trial with respect to the first element of equitable estoppel.

Although there is sufficient evidence to create a question of fact for trial as to whether the six elements of equitable estoppel have been satisfied in this case, it must be recalled that Holland Colors cannot be estopped from raising its statute of limitations defense if Nebraska Plastics had ample time to file its petition within the limitations period after it discovered Holland Colors' alleged concealment of facts.See Luther v. Sohl, 181 N.W.2d 268, 270 (Neb. 1970). As I noted above, if the "future performance" exception applies in this case, then Nebraska Plastics claims accrued on the date that it received customer complaints regarding fading. As I also noted above, three complaints were received by Nebraska Plastics prior to October 3, 1997: the "Tim McAdoo" claim was received by Nebraska Plastics on August 15, 1997, (see Holland Colors Index, Ex. 175), the "Kathy Johnson" claim was received by July 17, 1997, (see id. at Ex. 181), and one of the "Armand Smith" claims was received on May 7, 1996, (see id. at Exs. 205, 208, 209). Thus, assuming that the "future performance" exception applies, the four-year statute of limitations expired for these claims on August 15, 2001, July 17, 2001, and May 7, 2000, respectively. In view of evidence that Nebraska Plastics learned of the negative effects of calcium carbonate in time to remove completely that compound from its fencing products in January 2001 and that Holland Colors disclosed the calcium carbonate problem by February 2001, it seems to me that there is a question as to whether Nebraska Plastics had ample time to file its petition as to the McAdoo and Johnson claims within the "future performance" exception limitations period despite Holland Colors' alleged concealment. See Luther, 181 N.W.2d at 270 (holding that a "period of approximately 5 months after the inducement of delay ceased to operate and before the statute of limitations expired constituted ample opportunity to sue."). In other words, even if Nebraska Plastics is able to establish that the "future performance" exception applies and that the six primary elements of equitable estoppel are present, under Luther the McAdoo and Johnson claims may prove to be time-barred. This question will remain to be resolved at trial. In the interests of thoroughness, I note that the analysis of the timeliness of Smith claim will be somewhat different. If the "future performance" exception applies, the statute of limitations applicable to this claim expired on May 7, 2000. Since this seems to predate Nebraska Plastics' discovery of Holland Colors' alleged concealment of material facts, theLuther rule does not apply. That is, Nebraska Plastics could not have filed its petition within the limitations period after it discovered the allegedly concealed facts. Instead, the inquiry will be whether Nebraska Plastics filed its petition "within a reasonable time after discovery of the fraudulent concealment." Schendt v. Dewey, 520 N.W.2d 541, 548 (Neb. 1994). As the parties have presented no argument on this point, I find that it would be imprudent to address it further at this time.¹¹ However, I conclude that Holland Colors is not entitled to summary judgment on any of the claims identified on pages 8-9 of its brief because genuine issues remain for trial regarding the relevant limitations period.

11 The parties have also presented no argument as to the fate of the claims identified by Holland Colors on pages 8-9 of its brief in the event that the "future performance" exception does not apply and Nebraska Plastics does successfully prove the six elements of estoppel.

b. Negligent Misrepresentation Claim.

Holland Colors argues that Nebraska Plastics' negligent misrepresentation claim, which I have labeled Count V of the petition, is barred by the applicable statute of limitations. Holland Colors correctly notes that the applicable statute of limitations provides that tort actions must be brought within four years. See Neb. Rev. Stat. § 25-207. Holland Colors states, "Plaintiff's claim is that when it asked for [Holland Colors] to initially provide it pigment, [Holland Colors] should have told it about the problems calcium carbonate could cause. Plaintiff alleges it began producing colored fencing in 1995, so any claim for negligent misrepresentation was barred in 1999." (Holland Colors Br. at 13.)

Section 25-207(4) states that "an action for relief on the ground of fraud" can only be brought within four years, "but the cause of action in such case shall not be deemed to have accrued until the discovery of the fraud. . . ."¹² It appears that the Nebraska Supreme Court has not yet specifically determined whether negligent misrepresentation is a cause of action that sounds in fraud for the purposes of this section. However, there are cases that strongly suggest that a negligent misrepresentation claim accrues when the falsity of a representation is discovered, as opposed to when the representation is made. First, inNECO, Inc. v. Larry Price Associates, Inc., 597 N.W.2d 602 (Neb. 1999), the plaintiff "brought suit for fraudulent and/or negligent misrepresentation" against the defendant, and the district court found that the action was barred by the statute of limitations.See id. at 604. The Supreme Court of Nebraska reversed this determination, citing § 25-207(4) and stating that there were disputed issues of fact concerning the plaintiff's discovery of the alleged fraud. See id. at 607-608. The court held that the "action" was not barred by the statute of limitations, and did not state that its holding applied only to the fraudulent misrepresentation claim.Id. at 608.

12 The Nebraska Supreme Court has stated that a fraud action accrues when "there has been a discovery of the facts constituting the fraud, or facts sufficient to put a person of ordinary intelligence and prudence on an inquiry which, if pursued, would lead to such discovery." NECO, Inc. v. Larry Price Associates, Inc., 597 N.W.2d 602, 607 (Neb. 1999) (emphasis added).

Second, in Agri Affiliates, Inc. v. Bones, 660 N.W.2d 168 (Neb. 2003), the Nebraska Supreme Court stated,

This court has concluded that the difference between fraudulent misrepresentation and negligent misrepresentation is the duty required in each claim. In fraudulent misrepresentation, one becomes liable for breaching the general duty of good faith or honesty. However, in a claim of negligent misrepresentation, one may become liable even though acting honestly and in good faith if one fails to exercise the level of care required under the circumstances. There is, however, a similarity between the two in that a necessary element of both is a showing that the statement was false. As a result, the initial inquiry into whether the statement by Johnson was a misrepresentation is the same under either a negligent or a fraudulent misrepresentation framework, and we will consider them together.

Bones, 660 N.W.2d at 175 (citation omitted). In view of this statement, it is clear that negligent misrepresentation and fraudulent misrepresentation claims are treated similarly to a meaningful degree. In addition, I note that when citing NECO, the court described its holding as "reversing summary judgment in favor of vendor, finding that genuine issues of material fact existed as to whether statute of limitations had expired on buyer's claims of fraudulentand negligent misrepresentation with regard to whether building would contain complete sprinkler system[.]" Bones, 660 N.W.2d at 174 (emphasis added). This language seems to confirm that pursuant toNECO, the statute of limitations for negligent misrepresentation claims begins to run upon discovery of the false statement, just as it does in fraudulent misrepresentation claims.

In view of the foregoing, I find that the statute of limitations applicable to Nebraska Plastics' negligent misrepresentation claim did not begin to run until the falsity of Holland Colors' representations was discovered. Therefore, Holland Colors is not entitled to summary judgment on Nebraska Plastics' negligent misrepresentation claim on the ground that the statute of limitations had expired prior to the filing of the petition.

2. OMYA a. Breach of Warranty Claims.

Like Holland Colors, OMYA argues that "all claims based on vinyl fence extruded prior to October 3, 1997 are barred by operation of § 2-725 and Omya is entitled to Summary Judgment on all such claims." (OMYA's Br. at 24.) Again, Nebraska Plastics responds that under the "future performance" exception set forth in § 2-725, its causes of action did not accrue until it received its customer complaints.

For the reasons stated above, (see supra Part III.A.1.a.), I note that the future performance exception does not apply to Counts I and II of the petition, see Murphy v. Speltz-Schultz Lumber Co. of Grand Island, 481 N.W.2d 422, 430 (Neb. 1992), and therefore any claims under those counts arising out of materials delivered by OMYA to Nebraska Plastics prior to October 3, 1997, are barred by § 2-725, unless it is determined that OMYA is estopped from asserting a statute of limitations defense. Before turning to the issue of estoppel, I must first determine whether an express warranty extending to future performance within the meaning of § 2-725 was made to Nebraska Plastics by OMYA. See Neb. Rev. Stat. U.C.C. § 2-313 (describing the creation of express warranties); Moore v. Puget Sound Plywood, 332 N.W.2d 212, 214 (Neb. 1983) (indicating that express warranties need not be written). If so, then the "future performance" exception in § 2-725 may apply to Count III of the petition.

I find that there is no evidence raising a genuine issue for trial with respect to the existence of an express warranty by OMYA that extends to future performance. The evidence on this point appears on page 12 of Nebraska Plastics' brief, and includes the following statements: (1) "Mr. Watson also knew Nebraska Plastics fencing had to be weatherable, and that Nebraska Plastics had a twenty-year warranty for its products"; (2) Watson was familiar with Nebraska Plastics formula; (3) at some point, Sims asked someone at OMYA whether it was inappropriate to use calcium carbonate in a colored vinyl formula, and OMYA replied in the negative, (see Nebraska Plastics Index, Ex. 1, Sims. Dep. at 283:6-12); and (4) "Mr. Watson repeatedly assured Nebraska Plastics [in 2000] that the quality of its products would not be sacrificed by the inclusion of the greater amounts of UFT in the formula." Parenthetically, I question the adequacy of the foundation for the statements made in paragraph 26 of Mr. Sims affidavit, which is cited in support of the first statement of fact cited above.¹³ However, even if I grant Nebraska Plastics the benefit of all of the inferences that may be drawn from the foregoing statements, there is no evidence of an "affirmation of fact or promise made by the seller to the buyer which relates to the [future performance of the] goods." Neb. Rev. Stat. U.C.C. § 2-313. In other words, there is no evidence that OMYA specifically represented to Nebraska Plastics that fencing containing OMYA's product would be weatherable or would perform up to the standards of the warranty. (See, e.g., Nebraska Plastics Index, Ex. 1, Sims Dep. at 280:15-18.) As a result, there is no genuine issue for trial, and I find that the "future performance" exception in § 2-725 is inapplicable to the claims against OMYA.

13 That paragraph states, "John Watson also knew Nebraska Plastics fencing had to be weatherable, and that Nebraska Plastics had a twenty-year warranty for its products. John Watson was very familiar with the Nebraska Plastics formula, and, while there may have been minor formulation changes over the years, OMYA was aware that the standard Nebraska Plastics' white and colored fencing contained eight parts per hundred of OMYA's calcium carbonate." (Nebraska Plastics Index, Ex. 11, Sims Aff. ¶ 26.)

Although the "future performance" exception does not apply to the OMYA claims, it remains to be determined whether OMYA may be estopped from raising the statute of limitations as a defense by virtue of the fact that it "concealed the facts necessary for Nebraska Plastics to discover its causes of action." (Nebraska Plastics Br. at 25.) I have set forth the elements of equitable estoppel above. (See supra Part III.A.1.a. (citing Schendt v. Dewey, 520 N.W.2d 541, 548 (Neb. 1994); Luther v. Sohl, 181 N.W.2d 268, 270 (Neb. 1970);Keene v. Teten, 602 N.W.2d 29, 39 (Neb.Ct.App. 1999);Hamilton v. Hamilton, 496 N.W.2d 507, 512 (Neb. 1993)).) First, Nebraska Plastics must show that OMYA engaged in "conduct which amounts to a false representation or concealment of material facts, or, at least, which is calculated to convey the impression that the facts are otherwise than, and inconsistent with, those which the party subsequently attempts to assert." Keene, 602 N.W.2d at 39. I find that there is a genuine issue as to this element, because there is evidence that OMYA falsely represented to Nebraska Plastics that calcium carbonate was not the cause of its fading problems and that other OMYA customers were using eight parts of UFT per hundred in their colored formulas. (See Nebraska Plastics Index, Ex. 1, Sims Dep. at 209:18-210:4, 212:11-21, 213:10-214:19, 215:5-9, 216:6-16, 220:19-221:7, 222:5-11; id., Ex. 5, Watson Dep., Deposition Exhibit 98; id., Ex. 6, Batiste Dep. at 92:8-93:8, Deposition Exhibit 100; id., Ex. 11, Sims Aff. ¶ 36.)¹⁴ Second, Nebraska Plastics must show that OMYA had "the intention, or at least the expectation, that such conduct shall be acted upon by, or influence," Nebraska Plastics. Keene, 602 N.W.2d at 39. A reasonable trier of fact could find that this element has been established, as there is evidence that OMYA did not merely desire to continue selling its product to Nebraska Plastics, but also hoped to convince Nebraska Plastics to increase the calcium carbonate content of its fencing formula. The third element of equitable estoppel requires Nebraska Plastics to show that OMYA had "knowledge, actual or constructive, of the real facts." Keene, 602 N.W.2d at 39. There is evidence that John Watson had heard that calcium carbonate caused chalking in colored products sometime prior to Sims' discovery of that information, (see Nebraska Plastics Index, Ex. 5, Watson Dep., Deposition Exhibit 98), and I believe Nebraska Plastics is also entitled to the benefit of the inference that OMYA had knowledge as to the alleged falsity of its claim that customers other than Nebraska Plastics were using relatively high concentrations of UFT in their colored compounds. Fourth, Nebraska Plastics must create a genuine issue as to its "lack of knowledge and of the means of knowledge of the truth as to the facts in question." Keene, 602 N.W.2d at 39. It seems to me that Nebraska Plastics did not lack knowledge of the negative weathering effects of calcium carbonate at the time that Batiste made his "capstock" recommendation. (See Nebraska Plastics Index, Ex. 5, Watson Dep., Deposition Exhibit 98; id., Ex. 6, Batiste Dep. at 92:8-93:8, Deposition Exhibit 100.) However, there is a genuine issue as to whether Nebraska Plastics lacked this knowledge at the time of OMYA's initial denials of the negative weathering effects of calcium carbonate. In addition, there is a genuine issue as to whether Nebraska Plastics knew or had means to know that none of OMYA's other customers used a relatively high amount of calcium carbonate in their colored products. As to the fifth element of equitable estoppel, there is evidence that Nebraska Plastics relied on OMYA's representations until it discovered the harmful effects of calcium carbonate from another source and began to eliminate calcium carbonate from its formula. (See, e.g., Nebraska Plastics Index, Ex. 5, Watson Dep., Deposition Exhibit 98 (indicating that Nebraska Plastics learned of the negative weathering effects from another source).) See also Keene, 602 N.W.2d at 39. Sixth, Nebraska Plastics must present evidence of "action or inaction based [upon OMYA's conduct or statements] of such a character as to change [its] position or status." Keene, 602 N.W.2d at 39. Since I cannot say that the evidence is insufficient to support a finding that OMYA's actions delayed Nebraska Plastics from commencing legal action, I conclude that this element has been satisfied for the purposes of this memorandum. Finally, it remains to be determined whether Nebraska Plastics had ample time to institute its action within the time allotted under the statute of limitations after OMYA's alleged inducement for delay ceased. See Luther v. Sohl, 181 N.W.2d 268, 270 (Neb. 1970).

14 Furthermore, I agree with Nebraska Plastics' argument that a "confidential relationship" existed between OMYA and Nebraska Plastics, such that OMYA's mere silence would have amounted to fraudulent concealment, even in the absence of an affirmative act of misrepresentation. (See supra Part I (discussing the nature of the business relationship between OMYA and Nebraska Plastics); see also supra note 10 (discussing Upah v. Ancona Brothers Co., 521 N.W.2d 895, 902, 905 (Neb. 1994) disapproved of on other grounds by Welsch v. Graves, 582 N.W.2d 312, 316 (Neb. 1998), Bloomfield v. Nebraska State Bank, 465 N.W.2d 144, 149 (Neb. 1991)).)

In sum, the future performance exception set forth in Neb. Rev. Stat. U.C.C. § 2-725 does not apply to Nebraska Plastics' express warranty claims against OMYA, but a genuine issue remains for trial as to whether OMYA is estopped from raising a statute of limitations defense.

B. Negligence Claims.

OMYA asserts that Nebraska Plastics' negligent misrepresentation and negligent design and manufacture claims are also governed by § 2-725. (See OMYA's Br. at 21.) This assertion is unsupported by any argument or authority, and as § 2-725 states explicitly that it applies to actions for breach of contracts for sale, I reject OMYA's argument.

B. "Merger" of the Negligence and Warranty Claims

1. Holland Colors

Citing, inter alia, Trailways Finance and Acceptance Corp. v. Euro-Flo Tours, Inc., 572 F. Supp. 1227 (D. N.J. 1983),The Prudential Insurance Co. of America v. Jefferson Associates, Ltd., 896 S.W.2d 156 (Tex. 1995), and Roth v. Bill Heard Chevrolet, Inc., 305 S.E.2d 31 (Ga. 1983), Holland Colors argues that Nebraska Plastics' "claims of misrepresentation and fraud are merely attempts to circumvent the disclaimer of warranty of which Nebraska Plastics was fully aware," and that there is no need to address those claims because they should be "deemed merged into the concept of warranty." (Holland Colors Br. at 7.) Holland Colors' argument is without merit. The cases it cites are inapplicable to the instant matter because Holland Colors has not come forward with any evidence that Nebraska Plastics agreed to purchase goods from Holland Colors "as is" and without any expressed or implied assurances as to their value or condition; nor has Holland Colors established that there has been an effective disclaimer of express and implied warranties. (See supra Part III.A.1.a.) As a result, Holland Colors is not entitled to summary judgment on Counts IV-VI of the petition on the ground that there has been an effective disclaimer of warranties.

2. OMYA

It its reply brief, OMYA states that it "incorporates by reference the argument of defendant HCA with respect to warranty disclaimers." (Def. OMYA' Inc.'s Reply Br. in Supp. of Its Mot. for Summ. J. or in the Alternative for Partial Summ. J., filing 163 (hereinafter OMYA's Reply Br.), at 17.) Nebraska Plastics has moved to strike this portion of OMYA's reply brief, arguing, inter alia, that it is improper for OMYA to raise this new argument in its reply brief. (See Pl.'s Mot. to Strike Portion of Def. OMYA, Inc.'s Reply Br., filing 167.) I agree with Nebraska Plastics. Since OMYA did not argue in support of its motion for summary judgment that there had been an effective disclaimer of express or implied warranties,¹⁵ Nebraska Plastics' motion to strike will be granted, and section III.A. of OMYA's reply brief will not be considered.

15 In opposition to Nebraska Plastics' motion to strike, OMYA argues that it "fully set forth its sales warranty and disclaimer" in its original brief in support of its summary judgment motion. (OMYA, Inc.' Br. in Opp'n to Pl.'s Mot. to Strike, filing 192, at 1.) Although it is true that OMYA provided a copy of this "warranty" in its original brief and evidence index, OMYA did not argue that this language disclaimed any express or implied warranties. Instead, OMYA presented this "warranty" in support if its argument that it made no warranty extending to future performance of the goods within the meaning of Neb. Rev. Stat. U.C.C. § 2-725. (See OMYA's Br. at 21-24.) Incidentally, OMYA prevailed on its argument that there is no evidence of a warranty extending to future performance, although I did not resort to OMYA's "warranty" to support my finding on this point. (See supra Part III.A.2.a.) At any rate, merely presenting its "warranty" in support of its "future performance" argument is not sufficient to shift the burden of establishing that the "warranty" was not a valid disclaimer of all express and implied warranties to the plaintiff. In sum, OMYA's original brief did not include any argument concerning the effect of its "warranty" as a disclaimer of express or implied warranties, and its belated attempt to raise such an argument in its reply brief is inappropriate. In addition, OMYA's attempt to submit additional evidence in support of this new argument by appending it to its brief in opposition to the plaintiff's motion to strike is not well-taken. (See OMYA, Inc.' Br. in Opp'n to Pl.'s Mot. to Strike, filing 192, at 3-4, Attach A.)

C. Holland Colors' Argument That Its Pigment Was Not Defective

On page 5 of its brief, Holland Colors argues that there is no evidence that the pigment it supplied to Nebraska Plastics was defective. (See Holland Colors' Br. at 5.) Although Holland Colors supports this argument with citations to the record, it has not argued that this evidence and argument entitle Holland Colors to judgment as a matter of law on any of Nebraska Plastics' causes of action. Since Holland Colors' argument cannot support a summary judgment, it will be disregarded.

D. Count I: Breach of Implied Warranty for a Particular Purpose

In Count I of its petition, Nebraska Plastics alleged that Holland Colors and OMYA "impliedly warranted to Nebraska Plastics that the materials provided to Nebraska Plastics would be fit for a particular purpose, namely that they would weather properly,"(Notice of Removal, filing 1, Attach 1 ¶ 13), and that these materials in fact caused unacceptable weathering in Nebraska Plastics' fencing, (see id. ¶ 15). OMYA, but not Holland Colors, argues that it is entitled to summary judgment on this count. (See OMYA's Br. at 17-19.)

Neb. Rev. Stat. U.C.C. § 2-315 states,

Where the seller at the time of contracting has reason to know any particular purpose for which the goods are required and that the buyer is relying on the seller's skill or judgment to select or furnish suitable goods, there is unless excluded or modified under the next section an implied warranty that the goods shall be fit for such purpose.

In order to recover under a warranty of fitness for a particular purpose, Nebraska Plastics must show that (1) OMYA had reason to know of Nebraska Plastics' particular purpose in buying the goods, (2) OMYA had reason to know that Nebraska Plastics was relying on OMYA's skill or judgment to furnish appropriate goods, and (3) Nebraska Plastics, in fact, relied upon OMYA's skill or judgment. See Laird v. The Scribner Coop, Inc., 466 N.W.2d 798, 803 (Neb. 1991). OMYA argues that Nebraska Plastics cannot satisfy the third of these requirements because OMYA did not perform any weathering tests for Nebraska Plastics and "Nebraska Plastics exercised its own skill and judgment in selecting the calcium carbonate it purchased from OMYA." (OMYA's Br. at 18.)¹⁶ In response, Nebraska Plastics argued that there is a genuine issue for trial with respect to each element of its claim.

16 In its reply brief, OMYA adds an argument that Nebraska Plastics cannot establish the second element of its claim. (See OMYA's Reply Br. at 27.)

First, I agree with Nebraska Plastics that there is evidence to support a finding that OMYA knew that Nebraska Plastics was interested in using UFT in a new colored fencing product. (See, e.g., Nebraska Plastics Index, Ex. 5, Watson Dep. at 28:22-30:16.)¹⁷ This satisfies the first element of the plaintiff's claim. As to the second and third elements, OMYA argues that it is entitled to summary judgment because "Nebraska Plastics exercised its own skill and judgment in selecting the calcium carbonate it purchased from OMYA," and "Nebraska Plastics 'ordered what it wanted and was provided what it ordered.'" (OMYA's Br. at 18-19 (quoting O'Keefe Elevator Co., Inc. v. Second Avenue Properties, Ltd., 343 N.W.2d 54, 57 (Neb. 1984)).) However, Nebraska Plastics has submitted evidence of a long-standing relationship between Nebraska Plastics and OMYA wherein Nebraska Plastics relied on OMYA's expertise — not only to provide suitable raw materials, but also to ensure that Nebraska Plastics' final products would meet Nebraska Plastics' requirements — and there is evidence that OMYA was aware of Nebraska Plastics' reliance. (See, e.g., Nebraska Plastics Index, Ex. 11, Sims Aff. ¶¶ 24-25; id., Ex. 5, Watson Dep. at 31:23-33:17, 42:14-43:22 and Deposition Exhibits 115, 119 at 2 ("We have over the years bent over backwards for Nebraska Plastics with lab data and visits . . . and I believe that Nebraska Plastics appreciates our help."), 121, 124, 133 at "OMYA 242-43.") Since there is a genuine issue as to whether OMYA had reason to know of the particular purpose for which UFT was required (i.e., use in a colored fencing product that would be exposed to the weather) and of Nebraska Plastics' reliance upon OMYA's skill or judgment in furnishing suitable goods, OMYA is not entitled to summary judgment on Count I of the petition.

17 I believe too that there is sufficient evidence of the articulation of a "particular purpose" within the meaning of § 2-315, comment 2, to support a jury finding. See Stones v. Sears, Roebuck and Co., 558 N.W.2d 540, 547 (Neb. 1997) ("A 'particular purpose' differs from the ordinary purpose for which the goods are used in that it envisages a specific use by the buyer which is peculiar to the nature of his or her business whereas the ordinary purposes for which goods are used are those envisaged in the concept of merchantability and go to uses which are customarily made of the goods in question." (quoting Neb. Rev. Stat. U.C.C. § 2-315, comment 2)).

E. Count II: Breach of Implied Warranty of Merchantability

In Count II of its petition, Nebraska Plastics alleged, inter alia, that "[Holland Colors] and OMYA breached the implied warranty of merchantability by providing materials that were not merchantable." (Notice of Removal, filing 1, Attach 1 ¶ 20.) OMYA, but not Holland Colors, argues that it is entitled to summary judgment on Count II.

[A] warranty that the goods shall be merchantable is implied in a contract for their sale if the seller is a merchant with respect to goods of that kind. . . .

(2) Goods to be merchantable must be at least such as

(a) pass without objection in the trade under the contract description; and

(b) in the case of fungible goods, are of fair average quality within the description; and

(c) are fit for the ordinary purposes for which such goods are used; and

(d) run, within the variations permitted by the agreement, of even kind, quality and quantity within each unit and among all units involved; and

(e) are adequately contained, packaged, and labeled as the agreement may require; and

(f) conform to the promises or affirmations of fact made on the container or label if any.

(3) Unless excluded or modified (section 2-316) other implied warranties may arise from course of dealing or usage of trade.

Neb. Rev. Stat. U.C.C. § 2-314. OMYA does not dispute that it is a "merchant" within the meaning of this section, and, although there is evidence that it provided various services to Nebraska Plastics, there is no dispute that the principal purpose of the agreement between the parties was the sale of calcium carbonate. See, e.g.,Mennonite Deaconess Home and Hospital, Inc. v. Gates Engineering Co., Inc., 363 N.W.2d 155, 160-61 (Neb. 1985). Therefore, § 2-314 is applicable here. However, OMYA argues that there has been no breach of the implied warranty of merchantability in this case because there is no evidence that the calcium carbonate supplied by OMYA was inherently defective. (See OMYA's Br. at 13.)

OMYA's argument is not without support under Nebraska law:

We have stated that in order to recover for breach of an implied warranty of merchantability, there must be proof that there was a deviation from the standard of merchantability at the time of sale and that such deviation caused the injury. A breach of warranty has been found to exist where the item sold failed to perform adequately because of a lack of quality inherent in the item itself. . . . Thus, under our law, a plaintiff seeking to recover under a breach of implied warranty theory is seeking to recover for what is essentially an alleged manufacturing defect or design defect.

Freeman v. Hoffman-LaRoche, Inc., 618 N.W.2d 827, 843 (Neb. 2000) (citations omitted). However, the Supreme Court of Nebraska has also explicitly rejected the argument that a good must bedefective in order for § 2-314 to apply. In Mennonite Deaconess Home and Hospital, Inc. v. Gates Engineering Co., Inc., 363 N.W.2d 155, 162 (Neb. 1985), a hospital purchased a "'roofing system,' designed, manufactured, and supplied by [the defendant] and installed by persons approved by [the defendant] under its supervision." It was undisputed that "the failure of the roof was the result of poor installation and not defective material."Id. Nevertheless, because the defendant failed to supply a "roof which would not leak when installed," the plaintiff established a "breach of merchantability within the meaning of § 2-314."Id. at 163-64.

Nebraska Plastics argues that under Gates,¹⁸ its claim based upon a breach of the implied warranty of merchantability is viable despite the fact that there is no evidence that the calcium carbonate supplied by OMYA was defective. However, I find that Gates is distinguishable from the instant case in a key respect. In Gates, the court noted that "[t]he hospital was not purchasing raw material. It was purchasing a roofing system which was partially dependent upon proper installation."Mennonite Deaconess Home and Hospital, Inc. v. Gates Engineering Co., Inc., 363 N.W.2d 155, 163 (Neb. 1985). In the instant case, the undisputed evidence shows that OMYA is a raw materials supplier for Nebraska Plastics, who is the manufacturer of the colored PVC fence at issue. I am mindful of the fact that OMYA did more than simply provide raw materials to Nebraska Plastics; it also provided weathering and impact studies and made recommendations to Nebraska Plastics regarding the calcium carbonate content in its PVC formula and its manufacturing process. However, the fact remains that the defendant in Gates was to provide a finished product — a "roof which would not leak when installed," Gates, 363 N.W.2d at 163-64, while in the instant case, there is no evidence that OMYA was to provide Nebraska Plastics with a formula for colored PVC fencing that would not fade when exposed to the weather, or a "system" for producing such a product.

18 Nebraska Plastics also relies upon an unpublished opinion from the Superior Court of Connecticut for the proposition that "[a] seller of a component part, not alleged to be defective by itself, can be held liable for any defects in the final product once the non-defective component part is incorporated into the final or finished product." (See Nebraska Plastics Br. at 37 (citing Kokoff Feed, Inc. v. Agway, Inc., No. 522748, 1995 WL 12529 (Conn.Super.Ct. 1995)).) Parenthetically, I note that the name "Kokoff" is spelled "Kofkoff" throughout the text of the court's opinion, suggesting a spelling error in the title of the opinion. In any event, even if Nebraska Plastics' reliance on this case were appropriate, I would conclude that it is inapplicable to the present issue. Kokoff Feed involved a claim that a component product breached the implied warranty of fitness for a particular purpose. See id. at *1, 3-5. I am presently concerned with a breach of the implied warranty of merchantability, which is a separate issue under Nebraska law. See, e.g., Stones v. Sears, Roebuck and Co., 558 N.W.2d 540, 547 (Neb. 1997) ("Liability under § 2-315 lies only when goods do not fulfill the specific need for which they were purchased, and not when the goods in question are defective per se or fail to meet their ordinary purpose.").

"To establish a breach of implied warranty of merchantability, there must be proof that there was a deviation from the standard of merchantability at the time of sale and that such deviation caused the plaintiff's injury." Mennonite Deaconess Home and Hospital, Inc. v. Gates Engineering Co., Inc., 363 N.W.2d 155, 163 (Neb. 1985). OMYA has submitted uncontradicted evidence that Nebraska Plastics had no problems with the quality of the calcium carbonate sold to it by OMYA. (See OMYA's Index, Ex. 7, Fox Dep. at 303:3-8.) Under the circumstances, I find that there is no genuine issue for trial, and OMYA is entitled to summary judgment on Count II of the petition.

F. Count III: Breach of Express Warranty

In Count III of its petition, Nebraska Plastics alleged that "[Holland Colors] and OMYA expressly warranted that the materials provided to Nebraska Plastics, when incorporated into Nebraska Plastics' colored vinyl fencing, would weather properly," and that these materials "failed to perform as warranted." (Notice of Removal, filing 1, Attach 1 ¶¶ 24, 26.) Holland Colors and OMYA argue that they are entitled to summary judgment on Count III.

1. Holland Colors

Holland colors argues that there is no evidence that it made an express warranty to Nebraska Plastics, that there is no evidence of an express warranty that its pigment would be compatible with calcium carbonate, and that its Material Safety Data Sheets disclaimed all express warranties. (See Holland Colors Br. at 10-13.) However, I have determined that there is a genuine issue for trial with respect to the existence of an express warranty, made by Holland Colors to Nebraska Plastics, which concerned the future performance of the goods. (See supra Part III.A.1.a.) As a result, Holland Colors is not entitled to summary judgment on Count III of the petition.

2. OMYA

I have concluded that there is no genuine issue for trial with respect to the existence of an express warranty that extended to the future performance of the goods that OMYA sold to Nebraska Plastics. (See supra Part III.A.2.a.) However, it does not necessarily follow that OMYA made no express warranties whatsoever. Therefore, further analysis of this issue is in order.

To refresh,

(1) Express warranties by the seller are created as follows:

(a) 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 the goods shall conform to the affirmation or promise.

. . . .

(2) It is not necessary to the creation of an express warranty that the seller use formal words such as "warrant" or "guarantee" or that he have a specific intention to make a warranty, but an affirmation merely of the value of the goods or a statement purporting to be merely the seller's opinion or commendation of the goods does not create a warranty.

Neb. Rev. Stat. U.C.C. § 2-313. It must also be recalled that a warranty need not be written in order to be "express" within the meaning of § 2-313. See, e.g., Moore v. Puget Sound Plywood, 332 N.W.2d 212, 214 (Neb. 1983).

Evidence has been cited to me that refers to an "affirmation of fact or promise made by [OMYA] which relates to the goods." Neb. Rev. Stat. U.C.C. § 2-313(1)(a). First, Sims' deposition states, "[E]very time I asked [OMYA] whether it was inappropriate to use calcium carb in a colored vinyl compound formula, they said no, it was not." (Nebraska Plastics Index, Ex. 1, Sims Dep. at 283:9-12.) The only other evidence on point consists of OMYA's efforts to encourage Nebraska Plastics to increase its "UFT" content from eight parts per hundred to ten parts per hundred, which was accompanied by an assurance that the quality of the fencing would not be affected by this change. (See id., Ex. 5, Watson Dep., Deposition Exhibit 92; id., Ex. 11, Sims Aff. ¶ 28.) However, all of this evidence concerns statements made in the summer of 2000, approximately five or six years after Nebraska Plastics first began making colored vinyl fencing containing OMYA's UFT. (See id., Ex. 5. Watson Dep., Deposition Exhibit 92; id., Ex. 1, Sims Dep. at 283:6-284:7.) Thus, there is no evidence that these representations became "part of the basis of the bargain" between OMYA and Nebraska Plastics until the summer of 2000. Neb. Rev. Stat. U.C.C. § 2-313(1)(a). In other words, Nebraska Plastics did not rely on OMYA's representations until well after it began producing colored vinyl fencing. See Hillcrest Country Club v. N.D. Judds Co., 461 N.W.2d 55, 61 (Neb. 1990) ("This court has held that '[s]ince an express warranty must have been "made part of the basis of the bargain," it is essential that the plaintiffs prove reliance upon the warranty.'" (quoting Wendt v. Beardmore Suburban Chevrolet, 366 N.W.2d 424, 428 (Neb. 1985))).

In view of the foregoing, it seems to me that Nebraska Plastics can recover damages from OMYA based upon an express warranty theory only if it can demonstrate that its damages resulted from its reliance upon the affirmations and promises made by OMYA in the summer of 2000. However, since there remains a genuine issue as to whether Nebraska Plastics can make this showing, OMYA's motion for summary judgment on Count III must be denied.

G. Count IV: Negligent Design and Manufacture

In Count IV of its petition, Nebraska Plastics alleged that "[Holland Colors] and OMYA were negligent in failing to develop, design and supply Nebraska Plastics with materials appropriate for use in weather-tolerable, colored vinyl fencing," and that this negligence caused Nebraska Plastics to suffer damages. (Notice of Removal, filing 1, Attach 1 ¶¶ 31, 32.) OMYA argues that it is entitled to summary judgment on this count.

Preliminarily, I note that the parties dispute whether Nebraska Plastics' "negligent design and manufacture" claims should be merged with its implied warranty claims. OMYA argues that pursuant to Freeman v. Hoffman-La Roche, Inc., 618 N.W.2d 827, 842-44 (Neb. 2000), Nebraska Plastics' negligent design and manufacture claims should be dismissed for the same reasons that supported the dismissal of the plaintiff's implied warranty claims. (See OMYA's Br. at 19.) This argument is consistent with Freeman, which favors the merger of implied warranty claims with design and manufacturing defect claims. Furthermore, as will be demonstrated below, it is true that Nebraska Plastics' basis for its negligent design and manufacture claims mirrors the basis for its implied warranty of merchantability claim. However, Freeman is problematic when applied to the facts of this case because I have concluded that OMYA is entitled to summary judgment on Nebraska Plastics implied warranty of merchantability claim, but not its implied warranty of fitness for a particular purpose claim. Freeman provides no clear guidance as to whether the analysis of a design or manufacturing defect claim merges with the analysis of an implied warranty claim based upon merchantability or fitness for a particular purpose.¹⁹ Further complicating matters is the distinction between strict liability design and manufacturing defect claims, which are not at issue in this case, and negligent design and manufacturing defect claims. Although Freeman's discussion of the merger of defect and warranty claims includes some discussion of negligence, see Freeman, 618 N.W.2d at 842-43, the court apparently did not consider all of the plaintiff's negligence claims to be merged with her warranty claims, see id. at 845 (noting that the plaintiff failed to allege specific factual allegations of negligence).

19 The court quoted a discussion appearing in the Third Restatement of Torts concerning the desirability of a consistent definition of "defect" in claims based upon tort theories and an implied warranty of merchantability theory, but in the case before the court, a claim based upon an alleged breach of the implied warranty of fitness for a particular purpose was merged with claims of design and manufacturing defects. See Freeman v. Hoffman-LaRoche, Inc., 618 N.W.2d 827, 842-44 (Neb. 2000).

It seems to me that in Freeman the court did not purport to resolve definitively all of the potential issues surrounding the merger of tort and contract theories of recovery, nor did it hold that this merger would be appropriate in all cases. At the end of its opinion, the court stated that "in this case, we merge the theories of breach of implied warranty with the theories of design and manufacturing defects." Freeman v. Hoffman-LaRoche, Inc., 618 N.W.2d 827, 846 (Neb. 2000) (emphasis added). This case-by-case view of the merger question is consistent with the court's subsequent decision inStahlecker v. Ford Motor Company, 667 N.W.2d 244, 252 (Neb. 2003), wherein the court determined that it would take the same approach set forth in Freeman to analyze the plaintiff's implied warranty and defect claims. In view of the potential for conflicting outcomes in Nebraska Plastics' implied warranty claims, I do not find that it would be useful for me to hold simply that "Nebraska Plastics' negligent design and manufacture claims are merged with its implied warranty claims." Therefore, further analysis of the negligent design and manufacture claims is necessary.

OMYA argues that it is entitled to summary judgment on the negligent design and manufacture claims because there is no evidence that the calcium carbonate it provided to Nebraska Plastics was defective. (See OMYA's Br. at 19.) I agree. It is undisputed that in order to prevail on its negligent design or manufacture claims, Nebraska Plastics must establish that OMYA owed it a duty; that this duty was breached; and that this breach of duty caused Nebraska Plastics to suffer damages. It is also well-established that evidence that a product is defective amounts to evidence — though not conclusive evidence — of a breach of duty. See Morris v. Chrysler Corp., 303 N.W.2d 500, 503 (Neb. 1981). Nebraska Plastics has come forward with no law in support of the converse proposition, i.e., that a defendant may be held liable on either a design defect or manufacturing defect claim when uncontradicted evidence shows that the plaintiff did not have any problem with the quality of the defendant's product. (See OMYA's Index, Ex. 7, Fox Dep. at 303:3-8.) Indeed, Nebraska Plastics does not advance such an argument directly, and it seems to me that Nebraska law on this point would weigh strongly against it. See, e.g., Freeman v. Hoffman-LaRoche, Inc., 618 N.W.2d 827, 833 (Neb. 2000) (describing design and manufacturing defect claims as two "notion[s] of a defective product" (emphasis added) and discussing the distinction between claims based upon negligence and strict liability).²⁰ Instead, Nebraska Plastics argues that OMYA's negligence is based not on the quality of its calcium carbonate, but on OMYA's "failure . . . to provide a system that included materials which would weather in an outdoor colored product." (Nebraska Plastics' Br. at 39.) This argument mirrors Nebraska Plastics' argument in support of its implied warranty of merchantability theory, and for the reasons stated above, I reject the notion that OMYA was responsible for the design or manufacture of a finished color fencing product. (See supra Part III.E.) In short, there is no evidence that OMYA had the duty to provide such a "system." Therefore, I find that there is no genuine issue for trial, and OMYA is entitled to summary judgment on Count IV of the petition.

20 I note that if Nebraska Plastics negligent design and manufacturing claims were deemed to have merged with its implied warranty of merchantability claim, the analysis of this issue would be complicated by the Supreme Court of Nebraska's holding in Mennonite Deaconess Home and Hospital, Inc. v. Gates Engineering Co., Inc., 363 N.W.2d 155, 162 (Neb. 1985), which rejected the notion that a good must be defective in order to support a violation of the implied warranty of merchantability. (See also supra Part III.E.)

H. Count V: Negligent Misrepresentation

In Count V of its complaint, Nebraska Plastics alleged, inter alia, that "[Holland Colors] and OMYA represented to Nebraska Plastics that Nebraska Plastics' colored vinyl fencing would weather properly when their materials were incorporated into Nebraska Plastics' fencing," and that "[t]his representation was false." (Notice of Removal, filing 1, Attach 1 ¶¶ 34, 35.) Negligent misrepresentation is defined, in part, as follows:

One who, in the course of his business, profession or employment, or in any other transaction in which he has a pecuniary interest, supplies false information for the guidance of others in their business transactions, is subject to liability for pecuniary loss caused to them by their justifiable reliance upon the information, if he fails to exercise reasonable care or competence in obtaining or communicating the information.

See Gibb v. Citicorp Mortgage, Inc., 518 N.W.2d 910, 921-22 (Neb. 1994) (adopting definition of negligent misrepresentation set forth in the Restatement (Second) of Torts § 552); see also Agri Affiliates, Inc. v. Bones, 660 N.W.2d 168, 175 (Neb. 2003). Holland Colors and OMYA argue that they are entitled to summary judgment on this count. However, it is clear that Nebraska Plastics has come forward with evidence sufficient to raise a genuine issue for trial with respect to each component of the above definition and with respect to each defendant. First, there is evidence to support a finding that, while engaged in business dealings with Nebraska Plastics, Holland Colors supplied false information to Nebraska Plastics by recommending the use of new equipment to measure color consistency and changes to Nebraska Plastics manufacturing process instead of informing Nebraska Plastics of the likely cause of its fading problems. Also, there is evidence that Nebraska Plastics justifiably relied upon Holland Colors' representations in view of its business relationship with Holland Colors and Holland Colors' expertise. Finally, the evidence is sufficient to support a finding that Holland Colors failed to exercise reasonable care or competence in communicating the information it possessed regarding the weathering effects of calcium carbonate.

Similarly, the evidence could support findings that OMYA supplied false information to Nebraska Plastics concerning the appropriateness of calcium carbonate in colored fencing and concerning the calcium carbonate content of similar products produced by OMYA's other customers; that Nebraska Plastics justifiably relied on this information in view of the parties' previous course of dealings and OMYA's expertise; and that OMYA failed to exercise reasonable care or competence by not correctly obtaining or communicating information concerning the weathering effects of calcium carbonate and its other customers' use of that product.

In sum, I conclude that genuine issues of material fact preclude summary judgments in favor of Holland Colors and OMYA on Count V of Nebraska Plastics' petition.

I. Count VI: Fraudulent Concealment

Count VI of the petition alleges that the defendants fraudulently concealed the fact that calcium carbonate would cause colored vinyl fencing to weather improperly. (See Notice of Removal, filing 1, Attach 1 ¶¶ 39-47.) Holland Colors and OMYA argue that they are entitled to summary judgment on this count; however, for the reasons stated above, I find that genuine issues of material fact preclude summary judgment in favor of either defendant. (See supra Part III.A.1.a, 2.a.)

J. Holland Colors' Counterclaim Against Nebraska Plastics

Holland Colors' answer to Nebraska Plastics' petition includes a counterclaim for the balance due on a number of shipments of "color concentrates or pigments" that were sent to Nebraska Plastics between March and June 2001. (See Def. Holland Colors Americas, Inc.'s Second Am. Answer, filing 72, at 3-4.) Holland Colors also claims that it is owed "reasonable attorney's fees in collection of this sum." (See id. at 4.)

Nebraska Plastics admits that Holland Colors supplied the "color concentrates or pigments" as alleged in the counterclaim. (See Answer of Pl. Nebraska Plastics, Inc. to Counterclaim of Holland Colors Americas, Inc., filing 52, ¶ 3.)²¹ However, Nebraska Plastics argues that "there is a genuine issue of fact as to whether [Holland Colors] breached its contract during the time these invoices were issued," because "Nebraska Plastics was purchasing a pigment technology system from [Holland Colors] to provide colored PVC fencing — not just the raw materials," and Holland Colors failed to provide the proper technical services. (Nebraska Plastics Br. at 39.)

21 Holland Colors was granted leave to amend its amended answer, and it filed its second amended answer on May 6, 2003. (See filings 71, 72.) It appears that no changes were made to Holland Colors' counterclaim in the second amended answer. (Compare filing 45 with filing 72.) Although Nebraska Plastics did not file an answer to the counterclaim set forth in the second amended answer, I shall consider Nebraska Plastics' original answer to the counterclaim to be responsive to the counterclaim set forth in the "operative" answer.

Neither party has provided evidence concerning the terms of the agreement that led to the shipments of pigment memorialized in the invoices supplied by Holland Colors, (see Holland Colors Index, Ex. 242), although I note that there is evidence that Holland Colors was to provide technical services to assist Nebraska Plastics in the development of a colored fencing product. (See supra Part I.) Under these circumstances, I must conclude that Holland Colors has failed to show that there is no genuine issue of material fact and that it is entitled to judgment as a matter of law, and therefore its motion for summary judgment on its counterclaim must be denied.

IT IS ORDERED that:

1. Defendant Holland Colors Americas, Inc.'s motion for summary judgment and request for oral argument, filing 101, is denied;

2. Defendant OMYA, Inc.'s motion for summary judgment, filing 105, is granted in part;

3. Defendant OMYA, Inc. is entitled to summary judgment on Counts II and IV of Nebraska Plastics' petition, but its motion for summary judgment is otherwise denied;

4. Defendant OMYA, Inc.'s motion to amend its brief, filing 130, is granted; and

5. Nebraska Plastics, Inc.'s motion to strike a portion of Defendant OMYA, Inc.'s reply brief, filing 167, is granted.