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Harbourview Yacht Sales, L.L.C. v. Ocean Yachts

August 20, 2007


The opinion of the court was delivered by: Irenas, Senior District Judge


This case involves the sale of an allegedly defective yacht named the Andrea Grace from a yacht manufacturer, Defendant, to a yacht dealer, Plaintiff.*fn1 From February, 1998, through 2003, Plaintiff, HarbourView Yacht Sales, L.L.C. ("HarbourView"), was an authorized dealer of boats manufactured by Defendant, Ocean Yachts Inc. ("Ocean Yachts"). HarbourView and Ocean Yachts entered into a "Dealer Agreement,"*fn2 effective August 1, 1999, to July 31, 2000.*fn3 Under the Dealer Agreement, Ocean Yachts appointed HarbourView as its dealer to purchase Ocean Yachts' products for retail sale to HarbourView's customers in North Carolina, South Carolina and Georgia. When HarbourView purchased the Andrea Grace there were several problems with it, including a vibration problem and numerous other factory deficiencies.*fn4

Before the Court is HarbourView's motion for partial summary judgment on Ocean Yachts' second affirmative defense, which alleges that the sale of the Andrea Grace is covered by the terms of Ocean Yachts' 5&1 Warranty Protection Program. Ocean Yachts cross-moves for summary judgment on all counts of the Complaint (Counts I, breach of contract; II, breach of implied warranty of merchantability; III, breach of express warranty; and IV, breach of warranty of fitness for a particular purpose).


In early 2000, Ocean Yachts proposed to sell to HarbourView a 70 Super Sport, 2001 model, diesel-powered vessel named the Andrea Grace ("the Boat"). (Compl. ¶ 8). That April, the two co-owners of HarbourView inspected the Boat at Ocean Yachts' Factory in New Jersey. (Compl. ¶ 8). They allege that they discovered various defects while inspecting the Boat, including a severe vibration problem and problems in the cockpit, flybridge and other areas of the Boat. (Compl. ¶ 8). Several days later, Mr. Finney, Ocean Yachts' Vice President of Sales and Marketing, orally represented that the alleged vibration problem had been corrected.*fn5 (Comp. ¶ 10; Def. 56.1 Stat. ¶ 5). At some point prior to May, 2000, HarbourView agreed to purchase the Boat.*fn6

The sale took place in accordance with the Dealer Agreement, which was signed by both HarbourView and Ocean Yachts. The Dealer Agreement contains the mutual responsibilities of Ocean Yachts and HarbourView, and is governed by the Uniform Commercial Code ("UCC"). (Graham Dec. Ex. C ¶3(aa)).

In addition to the Dealer Agreement, Ocean Yachts gave HarbourView a separate two-page document, the Ocean 5&1 Warranty Protection Program ("5&1 Warranty"). (Id. at Ex. G). The second paragraph of the 5&1 Warranty, entitled "Application of Limited Warranty," reads,

Ocean Yachts Inc.'s Limited Warranty is extended solely on new Ocean Yachts sold and delivered to the original purchaser by an authorized Ocean Yachts, Inc. Dealer within eighteen (18) months of manufacture and is transferable to subsequent purchasers during the warranty period. The limited warranty is not extended to an Ocean Yachts used for commercial purposes, and the obligations of Ocean Yachts, Inc. under this Limited Warranty shall cease if the Ocean Yachts is hired, chartered or otherwise placed into commercial usage.

(Id.). The 5&1 Warranty provides a five-year limited structural hull warranty and a one year limited equipment warranty. It also includes disclaimers for express and implied warranties. The last page contains an Ocean Yachts Purchase and Warranty Registration card ("Registration card") that purchasers are required to sign within thirty (30) days of sale/delivery of a boat. Directly above the signature line, the Registration card reads, "my dealer has given, explained, and I have read and hereby acknowledge the above Ocean Yachts, Inc. Warranty." (Graham Dec. Ex. H)(emphasis in original). HarbourView did not complete or sign the Registration card upon purchase, nor did it send the card back to Ocean Yachts.

In May of 2000, HarbourView received the Boat from Ocean Yachts. (Compl. ¶10; Graham Ex. K. at 5-14). Later that month, HarbourView's captain experienced various problems with the Boat, including a vibration problem, when he sailed it to South Carolina for resale. (Compl. ¶ 11). HarbourView reported these problems to Ocean Yachts, which Ocean Yachts did not completely repair until April or May of 2001. (Compl. ¶ 12; Def. R. 56.1 Stat, ¶ 12; Pl. Response R. 56.1 Stat. ¶ 12). HarbourView asserts that it has been unable to sell the Boat because Ocean Yachts took 12 months to repair it, during which time the Boat received a negative reputation.*fn7 (Compl. ¶ 13). Harbourview brought this action on April 21, 2004, seeking damages it allegedly incurred arising out of its purchase of the Boat.


"[S]ummary judgment is proper 'if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.'" Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986) (quoting Fed. R. Civ. P. 56(c)). In deciding a motion for summary judgment, the Court must construe the facts and inferences in a light most favorable to the non-moving party. Pollock v. Am. Tel. & Tel. Long Lines, 794 F.2d 860, 864 (3d Cir. 1986). "'With respect to an issue on which the non-moving party bears the burden of proof, the burden on the moving party may be discharged by 'showing'- that is, pointing out to the district court - that there is an absence of evidence to support the nonmoving party's case.'" Conoshenti v. Public Serv. Elec. & Gas, 364 F.3d 135, 145-46 (3d Cir. 2004) (quoting Celotex). The role of the Court is not "to weigh the evidence and determine the truth of the matter, but to determine whether there is a genuine issue for trial." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986).


In its motion for summary judgment Ocean Yachts claims that its only warranty to HarbourView, the 5&1 Warranty, disclaimed any express warranties as well any implied warranties of merchantability or fitness for a particular purpose. HarbourView argues that this warranty and its limitations apply only to retail customers and moves for summary judgment on Ocean Yachts' second affirmative ...

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