Opinion
Case No. 1:03-CV-421
April 21, 2004
ORDER
In accordance with the Opinion filed on this date,
IT IS HEREBY ORDERED that Defendant Duff-Norton's Rule 12(b)(6) Motion to Dismiss (docket no. 80) is DENIED IN PART without prejudice due to its reliance on materials beyond the scope of the Complaint. The motion is DENIED with respect to the following bases on which it rests: (1) that Plaintiffs' tort claims are barred by the economic loss doctrine; (2) that Plaintiffs' implied warranty claims are time-barred; (3) that Plaintiffs' implied warranty claims are barred by Duff-Norton's disclaimer; and (4) that Plaintiffs' claim of implied warranty of fitness for a particular purpose fails to assert the necessary allegations.
IT IS FURTHER ORDERED that the Court will defer deciding Duff-Norton's Motion to Dismiss (docket no. 80) with respect to the issue of whether privity of contract is required for Plaintiffs to recover under breach of implied warranty theories. The parties shall submit supplemental briefs on this issue within 30 days of the date of this Order. IT IS FURTHER ORDERED that Plaintiffs' Motion to Strike Evidence Relied Upon by Defendant in its 12(b)(6) Motion to Dismiss or Alternatively to Convert Defendant's 12(b)(6) Motion to a Rule 56(c) Motion for Summary Judgment (docket no. 85) is DENIED as moot.
OPINION
Plaintiffs in this case, S.D. Warren Company, d/b/a/ Sappi Fine Paper of North America ("Sappi"), and Lignin Insurance Company, Ltd., have sued Defendant, Duff-Norton, a division of Yale Industrial Products, Inc., alleging that a defective Duff-Norton rotary joint caused a fire that damaged Sappi's factory. Now before the Court is Duff-Norton's motion to dismiss under Federal Rule of Civil Procedure 12(b)(6). In response, Plaintiffs have filed a motion to strike the evidence relied upon by Duff-Norton in its motion to dismiss, or alternatively to convert the motion to a motion for summary judgment pursuant to Federal Rule of Civil Procedure 56. For the reasons stated below, the Court will deny Duff-Norton's motion to dismiss, except with respect to the privity of contract issue, because the motion relies on materials outside the pleadings. The Court will require the parties to submit supplemental briefs on the privity question, at which time the Court will rule on the motion to dismiss limited to that issue.I. Background
Sappi owns a paper manufacturing mill in Muskegon, Michigan. The manufacturing process involved a hot oil transfer system that used several five-inch Series 2500 rotary union joints manufactured and refurbished by Duff-Norton and sold by various distributors to Sappi. On November 2, 1999, a fire broke out at the mill, causing damage to the facility. Plaintiffs filed this lawsuit based on their claim that one of the Duff-Norton Series 2500 rotary unions failed catastrophically and caused the fire.Plaintiffs' Complaint asserts three counts: negligence, breach of the implied warranty of merchantability, and breach of the implied warranty of fitness for a particular purpose. Duff-Norton moves to dismiss Plaintiffs' claims on the following bases: (1) Michigan's economic loss doctrine bars Plaintiffs' tort claims; (2) Plaintiffs' breach of implied warranty claims are barred by the applicable statute of limitations; (3) Plaintiffs' breach of implied warranty claims are barred by the absence of privity; (4) Plaintiffs' breach of implied warranty claims are barred because Duff-Norton effectively disclaimed all implied warranties; (5) Plaintiffs' Complaint does not state a cause of action for breach of an implied warranty of fitness because Sappi's use of Duff-Norton's product was only ordinary, not particular or peculiar; and (6) Duff-Norton has effectively limited its warranty and excluded any liability for consequential and similar damages.
II. Standard of Review
An action may be dismissed if the complaint fails to state a claim upon which relief can be granted. Fed.R.Civ.P. 12(b)(6). The moving party has the burden of proving that no claim exists. Although a complaint is to be liberally construed, it is still necessary that the complaint contain more than bare assertions of legal conclusions. Allard v. Weitzman (In re DeLorean Motor Co.), 991 F.2d 1236, 1240 (6th Cir. 1993) (citing Schied v. Fanny Farmer Candy Shops, Inc., 859 F.2d 434, 436 (6th Cir. 1988)). All factual allegations in the complaint must be presumed to be true, and reasonable inferences must be made in favor of the non-moving party. 2 Moore's Federal Practice § 12.34[1][b] (Matthew Bender 3d ed. 2003). The Court need not, however, accept unwarranted factual inferences. Morgan v. Church's Fried Chicken, 829 F.2d 10, 12 (6th Cir. 1987). Dismissal is proper "only if it is clear that no relief could be granted under any set of facts that could be proved consistent with the allegations." Hishon v. King Spalding, 467 U.S. 69, 73, 104 S.Ct. 2229, 2 232 (1984) (citing Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 101-02 (1957)).
III. Discussion
A. Motion to Dismiss: Reliance on Materials Outside the Pleadings
In deciding a motion to dismiss, a court may consider only the facts alleged in the pleadings, documents attached as exhibits or incorporated by reference in the pleadings, and matters of which the judge may take judicial notice. See 2 Moore's Federal Practice, § 12.34[2] (Matthew Bender 3d ed. 2003). See also Kissinger, Inc. v. Singh, No. 4:03cv19, 2 003 U.S. Dist. LEXIS 23265, at *4n.1 (W.D. Mich. Nov. 25, 2003) ("In deciding a motion to dismiss for failure to state a claim, a court's review is limited to the pleadings.").
Plaintiffs attached no exhibits to their Complaint. However, Duff-Norton attached to and referenced in its motion to dismiss the following documents: (1) the affidavit of Michael G. Miller; (2) three shipping invoices; (3) two documents containing "terms and conditions of sale"; and (4) a shipping acknowledgment form. Duff-Norton argues that the contents of these documents are central to, alluded to, incorporated in, or referenced in the Complaint and therefore may be considered in deciding the motion to dismiss. See Greenberg v. Life Ins. Co. of Virginia, 177 F.3d 507, 514 (6th Cir. 1999) ("Under certain circumstances, however, a document that is not formally incorporated by reference or attached to a complaint may still be considered part of the pleadings. . . . This occurs when a document is referred to in the complaint and is central to the plaintiffs claim.") (internal quotation and citation omitted); Song v. City of Elyria, Ohio, 985 F.2d 840, 842 (6th Cir. 1993) (finding that materials attached to a motion to dismiss were not outside the pleadings when they "did nothing more than verify the complaint," "added nothing new, but, in effect, reiterated the contents of the complaint itself," and "did not rebut, challenge, or contradict anything in the plaintiffs' complaint.").
Courts have some discretion in determining what falls within the pleadings for the purposes of Rule 12(b)(6). See Kelley ex. rel. Mich. Natural Res. Comm'n v. Arco Indus. Corp., 721 F. Supp. 873, 877 (W.D. Mich. 1989). This Court finds that the arguments set forth in Duff-Norton's motion to dismiss, other than the privity issue, require the Court to look beyond the face of the Complaint and analyze documents outside the pleadings that may not be central to Plaintiffs' claims as set forth in the Complaint. Without these external documents, the Court cannot adjudicate the issues presented in Duff-Norton's motion.
If, on a Rule 12(b)(6) motion, a court decides to accept and consider matters outside the pleadings, the motion must be treated as one for summary judgment and disposed of as provided in Rule 56. See Fed.R.Civ.P. 12(b); Sims v. Mercy Hosp. of Monroe, 451 F.2d 171, 173 (6th Cir. 1971) ("A motion under Rule 12(b)(6) is directed solely to the complaint itself and if matters outside the complaint are considered by the court then, under the rules, the motion must be considered as a motion for summary judgment under Rule 56, Rules of Civil Procedure."). When a motion to dismiss is converted to a motion for summary judgment, all parties must be given notice and a reasonable opportunity to present all material made pertinent by Rule 56. Id.; see also Fed.R.Civ.P. 12(b). Here, Plaintiffs have not had a sufficient chance to gather evidence and submit arguments to rebut Duff-Norton's contentions. It would therefore be premature for the Court to rule on Duff-Norton's motion construed as a motion for summary judgment.
B. Breach of Implied Warranties: Privity
Sappi purchased the rotary joint at issue in this case from an intermediary distributor rather than directly from Duff-Norton. (Compl. ¶ 10.) Duff-Norton argues that the resulting lack of privity of contract between it and Sappi bars Plaintiffs' breach of implied warranty claims (Counts II and III). Plaintiffs respond with a brief assertion, set forth in an affidavit accompanying their motion and supported by one case cited in a footnote, that Michigan does not require privity for such claims. The parties agree that the privity issue is a question of law, ripe for decision without discovery. However, the parties, and especially Plaintiffs, have not adequately briefed the issue for the Court to render a decision. Therefore, the Court will defer ruling on Duff-Norton's motion to dismiss with respect to the privity issue pending receipt of supplemental briefs from the parties.
IV. Conclusion
For the reasons stated above, the Court finds that Duff-Norton's motion to dismiss relies on materials external to the pleadings and thus is more properly treated as a motion for summary judgment, to which Plaintiffs have not yet had a reasonable opportunity to respond. Duff-Norton's motion will therefore be denied, except as to the privity of contract issue, without prejudice to Duff-Norton's refiling the motion as one for summary judgment pursuant to Federal Rule of Civil Procedure 56. The parties will submit supplemental briefs on the privity issue.
An Order consistent with this Opinion will be entered.