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Petri Paint Co., Inc. v. OMG Americas

December 29, 2008

PETRI PAINT COMPANY, INC., PLAINTIFF,
v.
OMG AMERICAS, INC., DEFENDANT.



The opinion of the court was delivered by: Greenaway, Jr., U.S.D.J.

FOR PUBLICATION

OPINION

This matter comes before this Court on the motion by Defendant*fn1 , OMG Americas, Inc., ("OMG"), for summary judgment, pursuant to FED. R. CIV. P. 56(c), against Plaintiff, Petri Paint Company, Inc., ("Petri"). For the reasons set forth below, Defendant's motion is granted, in part, and denied, in part.

I. FACTUAL BACKGROUND

The following facts are undisputed unless otherwise noted.*fn2 Petri, a New Jersey corporation, manufactures various polyurethane products, paints, and varnishes, for sale to distributors and dealers. (Certification of Richard A. Reinartz ("Reinartz Cert."), Ex. B; Ex. C ("L. Chernoff Dep."), at 16:8-20; Ex. D ("E. Chernoff Dep."), at 14:21-16:20, 17:23-19:1.) OMG, an Ohio corporation, is a commercial manufacturer and supplier of chemical products and raw materials. (Reinartz Cert., Ex. E.) OMG manufactures a chemical agent known as SKINO #2. (Id.) SKINO #2 may be used as an anti-skinning agent in connection with polyurethane manufacturing, and serves to prevent a topical skin from forming over a canned polyurethane end product. (Id.; L. Chernoff Dep., at 44:9-21, 68:21-25; E. Chernoff Dep., at 39:19-23.) Defendant contends that Petri has been an OMG customer since July 1, 1987. (Reinartz Cert., Ex. E.)

On or about September 14, 2004, Petri placed a verbal order for a 55-gallon drum of SKINO #2 with OMG sales agent Superior Materials, Inc. ("Superior"). (Reinartz Cert., Ex. F; L. Chernoff Dep., 37:16-18; E. Chernoff Dep., 34:10-23, 59:3-18.) Superior is a sales agent of OMG, pursuant to an agency agreement, and transmits orders and other offers to buy OMG products directly to OMG. (Reinartz Cert., Ex. E.)

In response to Petri's order, the following day OMG shipped to Petri, a 55-gallon drum of material labeled "SKINO #2." (Reinartz Cert., Ex. F.) The drum was mislabled, and did not contain SKINO #2, but rather contained a non-conforming calcium dryer product. (See Reinartz Cert., Ex. E; E. Chernoff Dep., at 31:2-7, 65:23-66:4; see also Plaintiff's Affidavit of Eugene Chernoff ("E. Chernoff Aff.")

On September 16, 2004, Petri received the product tender from OMG and remitted full payment, pursuant to OMG's invoice. (L. Chernoff Dep., at 66:7-67:13, 69:16-70:22; E. Chernoff Dep., 71:3-5; Reinartz Cert., Ex. E.) Petri subsequently introduced the non-conforming calcium dryer product to its polyurethane manufacturing process over the course of a three (3) month period. (L. Chernoff Dep., 82:9-85:8.) The product was then shipped to various dealers and distributors, for ultimate purchase by flooring professionals. (E. Chernoff Aff.)

In February 2005, Petri began receiving complaints that the polyurethane product was forming a thick skin. (Certification of Hugh Lucariello, Ex. A, at pp. 83-89.) Petri sent the product to a chemist for analysis. (Id.) The chemist confirmed that the material thought to be SKINO #2, the anti-skinning agent, was not SKINO #2 after all. (Id.)

OMG contends that at no time did Petri attach any terms or conditions of purchase to the verbal purchase order. (Reinartz Cert., Ex. E.) Petri admits that it never expressed any conditions or requests when ordering SKINO #2 from OMG, but explains that it did not do so in reliance "on the 'warranty' and 'guarantee' that the chemical product shipped would perform as required." (Pl. Opp. Br., p. 6.) Plaintiff contends that OMG sent an invoice at a later date "stating that the 'material delivered to the Buyer will meet OMG specifications and standards' and ... in small print, 'Any stenciling, marking or numbering other than that contained on the preprinted OMG label shall not be relied upon ... ". (Id., p. 3 (citing E. Chernoff Aff.).) Plaintiff further contends that "[t]here is no known way to "test" the chemical product ... ". (Id.) Petri states that, as a result of its use of the mislabeled product, it has suffered "complete destruction of ...reputation among flooring professionals," has "lost most of its suppliers/dealers, and has suffered "actual out of pocket damages of $89,244.01 ... and lost business damages of $400,000.00." (Id., p. 6.)

Plaintiff commenced the instant action in the Superior Court of New Jersey, Law Division, Essex County, on August 28, 2006. Defendants filed a Notice of Removal with this Court on October 10, 2006. Jurisdiction is proper with this Court, pursuant to this Court's diversity jurisdiction under 28 U.S.C. 1332(a). Plaintiff's and Defendant's citizenship is diverse, and the amount in controversy exceeds $75,000.00. On January 26, 2007, Plaintiff filed an Amended Complaint with this Court, asserting causes of action for strict liability (Count I), failure to warn (Count II), breach of implied and express warranties (Count III), negligence (Count IV), and violations of the New Jersey Consumer Fraud Act (Count V). Plaintiff's Amended Complaint also alleges what appears to be a claim of loss of reputation (Count VI).*fn3

On May 16, 2008, OMG moved for summary judgment, pursuant to Rule 56(c) of the Federal Rules of Civil Procedure, seeking a ruling limiting the scope of Petri's permissible remedies because a contract for sale was formed pursuant to express written terms and conditions tendered by OMG.

II. STANDARD OF REVIEW

Summary judgment is appropriate under FED. R. CIV. P. 56(c), when the moving party demonstrates that there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Celotex Corp. v. Catrett, 477 U.S. 317, 322-23; Cascara v. Pomeroy, 313 F.3d 828, 832-33 (3d Cir. 2002). A factual dispute is genuine if a reasonable jury could return a verdict for the non-movant, and is material if, under the substantive law, it would affect the outcome of the suit. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986); Justofin v. Metro. Life Ins. Co., 372 F.3d 517, 521 (3d Cir. 2004). This Court views "the facts in the light most favorable to the nonmoving party and draw[s] all inferences in that party's favor." Andreoli v. Gates, 482 F.3d 641, 647 (3d Cir. 2007) (internal citation omitted). "In considering a motion for summary judgment, a district court may not make credibility determinations or engage in any weighing of the evidence." Marino v. Indus. Crating Co., 358 F.3d 241, 247 (3d Cir. 2004) (quoting Anderson, 477 U.S. at 255).

When the moving party has the burden of proof on an issue at trial, that party has "the burden of supporting their motions 'with credible evidence . . . that would entitle [them] to a directed verdict if not controverted at trial.'" In re Bressman, 327 F.3d 229, 237 (3d Cir. 2003) (quoting Celotex, 477 U.S. at 331); see also United States v. Four Parcels of Real Prop., 941 F.2d 1428, 1438 (11th Cir. 1991) ("When the moving party has the burden of proof at trial, that party must show affirmatively the absence of a genuine issue of material fact: it . . . must show that, on all the essential elements of its case on which it bears the burden of proof at trial, no reasonable jury could find for the non-moving party." (emphasis in original) (internal citations omitted)). "[W]ith respect to an issue on which the nonmoving party bears the burden of proof ...


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