Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-alnd-2_03-cv-02903/USCOURTS-alnd-2_03-cv-02903-0/pdf.json

Nature of Suit Code: 365
Nature of Suit: Personal Injury - Product Liability
Cause of Action: 28:1441 Petition for Removal- Product Liability

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1

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ALABAMA

SOUTHERN DIVISION

JAMES C. SULLIVAN, )

)

Plaintiff, )

)

v. ) Civil Action No.: CV-03-PT-2903-S

)

LOWE’S HOME CENTERS, INC., )

d/b/a LOWE’S HOME )

IMPROVEMENT WAREHOUSE, et al., )

)

Defendants. )

MEMORANDUM OPINION

This cause comes on to be heard on the defendants Ames True Temper Hardware’s

(“Ames”) and Lowe’s Home Centers, Inc., d/b/a Lowe’s Home Improvement Warehouse

(“Lowe’s”) Objection to Magistrate’s Report and Recommendation filed on January 14, 2004. 

There is no dispute that the indemnity term which the objectors rely upon followed the

following provision on the first page of the Ames Purchase Order:

The following terms and conditions apply to and are made part of all Purchase

Orders submitted by Ames True Temper, Inc. The Seller, by signing this

Agreement, assents to be bound by the language contained herein. Ames True

Temper, Inc. reserves the right to cancel orders or refuse to place orders with

Sellers who fail to sign and return this Agreement. Acceptance of the offer made

by a Purchase Order must be made on the exact terms contained herein, and if

additional or different terms are proposed by Seller, Seller’s response shall

constitute an acceptance of the offer stated in the Purchase Order and in these

terms, and a proposal as to the additional or different terms. Nothing contained in

a Purchase Order is intended by Buyer as assent by Buyer to any such additional

terms, and unless Buyer’s assent, thereto, is expressed in a separate writing

specifically mentioning such additional terms, Buyer hereby expressly objects to

the inclusion of any such different or additional terms proposed by Seller in

Seller’s acceptance of the offer contained in a Purchase Order. 

FILED

 2005 Feb-15 PM 02:10

U.S. DISTRICT COURT

N.D. OF ALABAMA

Case 2:03-cv-02903-SLB Document 53 Filed 02/15/05 Page 1 of 4
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 It is not presently clear to this court where the “Seller’s” signature would have been put

or which “Agreement” was referenced. There is a reference to “the Attached Order

Acknowledgment.” This court sees no such form; nor an “Acceptance Copy of this Purchase

Order.”

2

It is further undisputed that HWA Fong Rubber (USA), Inc. d/b/a Duro Tire Corporation and

Duro Tire & Wheel (“Duro Tire”) never signed “this Agreement [Purchase Order].”1

Duro Tire’s position that it cannot be bound by any indemnity agreement is based on two

arguments. First, it argues:

The indemnity provision upon which Ames relies does not afford Ames

indemnity if its sole negligence caused Sullivan’s injury. Rather, the provision

requires Ames to show that negligence on the part of Duro Tire caused or

contributed to Sullivan’s injury. Consequently, because Ames cannot prove as a

matter of law that Duro Tire’s negligence cause or contributed to Sullivan’s

injury, Ames is not entitled to summary judgment even if the indemnity provision

is otherwise valid and enforceable, which it is not.

Second, it argues:

Magistrate Judge Davis properly held that because Ames had expressly made

Duro Tire’s signed acceptance a prerequisite to binding Duro Tire to the

numerous “fine print” provisions on the back of the purchase order, Ames could

not then disregard the fact that Duro Tire never provided the necessary signed

acceptance to Ames. As Magistrate Judge Davis properly recognized, Ames’

failure to insist on a signed acceptance of the purchase order by Duro Tire and its

subsequent failure to exercise its right to cancel orders with Duro Tire in the

absence of such an acceptance amounted to a waiver of the indemnity provision. 

Furthermore, Duro Tire’s failure to provide to Ames the required signed

acceptance of the terms contained on the back of the purchase order creates an

issue of fact with respect to whether Duro Tire “knowingly, evenhandedly, and for

valid consideration . . .” agreed to indemnify Ames from the consequences of its

own negligence. Nationwide Mut. Ins. Co. v. Hall, 643 So.2d 551, 555 (Ala.,

1994) quoting, Industrial Tile, Inc. v. Stewart, 388 So.2d 171, 175-176 

(Ala.1980).

Ames’ response to Duro Tire’s second position is primarily, if not wholly premised on an

argument that a “course of dealing” between the parties leads to the necessary conclusion that

Case 2:03-cv-02903-SLB Document 53 Filed 02/15/05 Page 2 of 4
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 Now apparently § 7-1-303. Section 7-2-201 appears to deal more with whether oral

terms are enforceable rather than with whether written terms have been agreed to through

acquiescence. 

3

 Also see § 7-2-208(2). 

3

Duro Tire acquiesced in the pertinent indemnity term even though it did not sign “this

Agreement” as provided in Ames’ Purchase Order.

Interestingly, while the objectors rely on “course of dealing,” they primarily, if not

wholly, rely upon § 7-2-201(3)(c) of the Code of Alabama which deals with the Statute of

Frauds. In their filed objection, the objectors make no reference to Alabama Code § 7-1-205

which was in effect at the pertinent time.2

The relevant version of § 7-1-205(1) states:

A course of dealing is a sequence of previous conduct between the parties to a

particular transaction which is fairly to be regarded as establishing a common

basis of understanding for interpreting their expressions and other conduct.

Ala. Code § 7-1-205(1) (2004) (current version at Ala. Code. § 7-1-303(b)). 

This suggests that “course of dealing” relates to establishing a basis of understanding for

interpreting expressions, not creating expressions. 

Furthermore, § 7-1-205(4) states:

The express terms of an agreement and an applicable course of dealing or usage of

trade shall be construed wherever reasonable as consistent with each other; but

when such construction is unreasonable, express terms control both course of

dealing and usage of trade and course of dealing controls usage of trade.3

Ala. Code § 7-1-205(4) (2004) (current version at Ala. Code. § 7-1-303(e)). The court does not

address the issue of whether the alleged “course of dealing” allegedly at issue here relates to “a

sequence of previous conduct.” See Ala. Code § 7-1-205(1) (2004) (current version at Ala.

Case 2:03-cv-02903-SLB Document 53 Filed 02/15/05 Page 3 of 4
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 “Signed” is defined as including “any symbol executed or adopted by a party with

present intention to authenticate a writing.” Ala. Code § 7-1-201(39) (2004) (current version at

Ala. Code § 7-1-201(b)(37)).

5

 The issue may be whether Duro Tire acquiesced in the term even though it did not sign,

or whether Ames acquiesced in Duro Tire’s not signing. With regard to whether Ames arguably

waived the condition, see Ala. Code § 7-2-208(3) (2004) (repealed 2005). 

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Code. § 7-1-303(b)). There was apparently no “previous conduct” prior to the first Purchase

Order. Would there be a change of interpretation after the second one? The Third one? When?

No term could be more express or clearer than: “The Seller, by signing this Agreement,

assents to be bound by the language contained herein.”4

 At best, from the objectors’ perspective,

there is perhaps an ambiguity resulting from the preceding sentence which says, “The following

terms and conditions apply to and are made part of all Purchase Orders submitted by Ames True

Temper, Inc.” If the next above quoted sentence requiring signing had not been included, there

might be a better argument that Duro Tire had acquiesced in the condition. The fact that there is

a contract between the parties does not necessarily establish that the parties have agreed on all

terms of the contract. See Ala. Code § 7-2-204 (2004). There may be an ambiguity as to whether

acquiescence required the Seller’s signature. If so, there is a question of fact.5

The court does not reach the issue of whether sole fault on the part of Duro Tire must be

established before it can be held to be an indemnitor. 

This 15th of February, 2005.

 

 ROBERT B. PROPST

 SENIOR UNITED STATES DISTRICT JUDGE

Case 2:03-cv-02903-SLB Document 53 Filed 02/15/05 Page 4 of 4