IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF OREGON 

MASTERCRAFT FURNITURE, INC., 

an Oregon corporation, 

Plaintiff, 

v. 

SABA NORTH AMERICA, LLC, 

a Michigan limited liability 

company, 

Defendant. 

Renee E. Rothauge 

Adam M. Starr 

Markowitz Herbold PC 

Suite 3000, Pacwest Center 

1211 SW Fifth Avenue 

Portland, OR 97204-3730 

Attorneys for Plaintiff 

Glenn E. Barger 

Barger Law Group, PC 

4949 Meadows Road, Suite 620 

Lake Oswego, OR 97035 

Mark H. Verwys 

Plunkett Cooney 

333 Bridge St. NW, Suite 530 

Grand Rapids, MI 49504 

Attorneys for Defendant 

1 OPINION AND ORDER 

Civ. No. 6:14-01303-AA 

OPINION AND ORDER 

Case 6:14-cv-01303-AA Document 39 Filed 03/31/15 Page 1 of 11
AIKEN, Chief Judge: 

Plaintiff Mastercraft Furniture, Inc. ( "Mastercraft") filed 

suit against SABA North America, LLC ("SABA"), al'leging breach of 

contract and breach of the implied covenant of good faith and fair 

dealing. Plaintiff seeks damages, interest on its damages, and 

declaratory relief. Plaintiff now moves for partial summary 

judgment pursuant to Fed. R. Civ. P. 56 on: (1) plaintiff's first 

claim for breach of contract on the issue of liability only; ( 2) 

plaintiff's second claim for breach of the covenant of good faith 

and fair dealing on the issue of liability only; and (3) 

defendant's fifth affirmative defense, asserting limitation of 

liability. Defendant opposes plaintiff's motion. 

Plaintiff's motion for partial summary judgment on the matters 

listed above is granted. 

I. BACKGROUND 

Mastercraft is a furniture company located in Stayton, Oregon, 

which builds and supplies furniture for companies including IKEA. 

As a part of its agreement with IKEA, Mastercraft must follow 

IKEA' s manufacturing and sourcing requirements, some of which 

prohibit Mastercraft from using products in its furniture that 

contain certain chemicals, including diisobutyl phthalate ( "DIBP") . 

SABA North America, LLC, is a limited liability company 

located in Michigan which is an international manufacturer and 

supplier of adhesive. SABA North America, LLC is a subsidiary of 

2 OPINION AND ORDER 

Case 6:14-cv-01303-AA Document 39 Filed 03/31/15 Page 2 of 11
SABA Internationil BV, which is owned by SABA Dinxperlo BV. 

Sometime during 2012, Mastercraft and SABA entered into 

negotiations for SABA to supply adhesive to Mastercraft, which 

Mastercraft would use when building and supplying furniture to 

IKEA, one of its main customers. On July 2, 2012, SABA presented a 

quote to Mastercraft. On July 17, 2012, Matercraft agreed with the 

quote and signed the Equipment Agreement. Subsequently, SABA signed 

the Equipment Agreement. 

On July 20, 2012, James Turner, the President of SABA, signed 

the IWAY/Mastercraft Vendor Agreement. As part of the agreement, 

SABA received IKEA'S Specifications document, identifying the 

chemical compound and substances that IKEA prohibits the use of in 

its products, including DIBP. SABA Dinxperlo BV signed and 

acknowledged receiving the Specifications document. 

Between August 13, 2012 and March 2013, Mastercraft and SABA 

entered into a series of contracts for the purchase, sale, shipment 

of, and payment for 16 totes of Sababond 3175, the agreed-upon 

adhesive product. The backside of SABA's invoices contained ~Terms 

and Conditions of Sale" in small print. Olson Decl. at 8, Ex. 3. At 

the top of the Terms and Conditions is a paragraph entitled "Offer 

and Acceptance." Olson Decl. Ex. 3; Turner Aff., Ex. 5. The first 

line of that paragraph states, ~seller's [SABA's] offers are made 

strictly on the terms and conditions stated herein and no others. 

Acceptance of Seller's offers [by Mastercraft] is strictly limited 

3 OPINION AND ORDER 

Case 6:14-cv-01303-AA Document 39 Filed 03/31/15 Page 3 of 11
to the terms and conditions stated herein and no others." Id. The 

seventh paragraph of the Terms and Conditions attempts to limit 

damages · for defective adhesive products to the amount of the 

purchase price of the product. Id. Mastercraft, without reading the 

Termi and tonditions, paid for the adhesive and incorporated it 

into its furniture. Olson Decl. at 8. 

In September 2012, IKEA conducted a routine test of 

Mastercraft's furniture and found DIBP in Mastercraft's furniture. 

After further testing, it was determined that SABA was the source 

and cause of the DIBP. On April 11, 2013, Jim Turner, SABA's 

President, sent an email to Mastercraft's President stating that 

some of the adhesive orders shipped by SABA mistakenly contained 

DIBP. On August 14, 2014, plaintiff filed this suit. 

II. STANDARD 

Summary judgment is appropriate "if the movant shows that 

there is no genuine dispute as to any material fact and the movant 

- is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). 

A court may grant judgment to a party on all or part of a claim. 

Id. The substantive law on an issue determines the materiality of 

a fact. T.W. Elec. Serv., Inc. v. Pac. Elec. Contractors Ass'n, 809 

F.2d 626, 630 (9th Cir. 1987). A factual dispute is genuine if the 

evidence is such that a reasonable jury could determine the issue 

in favor of the nonmoving party. Anderson v. Liberty Lobby, Inc., 

477 u.s. 242, 242 (1986). 

4 OPINION AND ORDER 

Case 6:14-cv-01303-AA Document 39 Filed 03/31/15 Page 4 of 11
The moving party has the burden of establishing the absence of 

a genuine issue of material fact. Celotex Corp. v. Catrett, 4 77 

U.S. 317, 323 (1986). If the moving party meets this burden, the 

nonmoving party must go beyond the pleadings and identify facts 

which show a genuine issue for trial. Id. at 324. 

Special rules of construction apply to evaluating summary 

judgment motions: (1) all reasonable doubts as to the existence of 

genuine issues of material fact should be resolved against the 

moving party; and (2) all inferences to be drawn from the 

underlying facts must be viewed in the light most favorable to the 

nonmoving party. T.W. Elec., 809 F.2d at 630. 

III. DISCUSSION 

A. Breach of Contract Claims 

Plaintiff alleges that defendant breached its contract with 

plaintiff and violated the covenant of good faith and fair dealing 

by shipping adhesive product to plaintiff containing DIBP, which is 

a prohibited chemical substance under. the parties' agreement. 

Defendant does not contest this fact and admits that it shipped 

some adhesive product to plaintiff containing DIBP. However, 

defendant argues that there are genuine issues of material fact 

with respect to the causal relationship between its breach and 

plaintiff's claimed damages. Plaintiff argues that defendant 

conflates causation of damages with the amount owed in damages. I 

agree. 

5 OPINION AND ORDER 

Case 6:14-cv-01303-AA Document 39 Filed 03/31/15 Page 5 of 11
Defendant correctly states that ~a breach of contract claim 

requires the ( 1) existence of a valid contract; ( 2) defendant's 

breach of the contract; and ( 3) a proximate cause relationship 

between the defendant's breach and harm to plaintiff." Def.'s Br. 

at 4 (citing Nw. Nat. Gas Co. v. Chase Gardens, Inc., 333 Or. 304 

(2002)). Similarly, defendant correctly states that the elements 

for a ~breach of an implied covenant of good faith and fair dealing 

are: ( 1) existence of a valid contract; ( 2) action by defendant to 

deprive the plaintiff of expected contractual benefits; and (3) a 

proximate cause relationship between the defendant's actions and 

harm to plaintiff." Id. Defendant admits that the statement of 

facts in plaintiff's motion for partial summary judgment is 

~substantially correct and can be conceded for the purposes of 

plaintiff'·s motion." Def.'s Br. at 2. Consequently, defendant has 

admitted its breach of contract by mistakenly shipping adhesive 

containing DIBP, a prohibited chemical, to plaintiff. 

For example, defendant admits that 6 of the 16 adhesive orders 

snipped by SABA to Mastercraft mistakenly contained DIBP I even 

though SABA was aware that DIBP was forbidden by IKEA and, in turn, 

Mastercraft. Olson Decl. Ex. 4. Additionally, in an email from SABA 

to Mastercraft, SABA's President wrote: ~unfortunately it was found 

that the initial shipments, and several later shipments, were 

indeed batches of the old formulation which contained DIBP. I 

cannot give a concrete explanation as to how this occurred." Id. 

6 OPINION AND ORDER 

Case 6:14-cv-01303-AA Document 39 Filed 03/31/15 Page 6 of 11
Despite this admission, defendant argues that plaintiff has 

not shown there is no genuine issue of material fact as to the 

element of proximate cause, i.e., that its breach caused 

plaintiff's claimed damages. Defendant argues specifically that 

plaintiff has not proffered pleadings, depositions, answers to 

interrogatories, admissions and affidavits proving that defendant's 

admitted breach caused the amount of damages claimed by plaintiff. 

Def.'s Br. at 7. Defendant states that questions of fact remain, 

including when plaintiff first learned about the DIBP in its 

furniture, why plaintiff waited over seven months to inform 

defendant of the DIBP in the adhesive, and how and when IKEA 

suspended production of plaintiff's furniture. Id. at 8. Defendant 

thus argues that plaintiff's motion is premature since discovery 

has not been conducted by either party. 

In response, plaintiff argues that even after discovery, there 

will be no change in the fact that defendant's actions caused some 

damage to plaintiff by the defendant's breach of the parties' 

contract, which has already been admitted by defendant. Pl.'s Rep. 

Br. at 2. I agree. Defendant conflates proving causation of damages 

with proving the amount of damages; plaintiff need only show that 

defendant caused some amount of damages for purposes of this motion 

and does not need to show the exact amount of damages caused. 

Plaintiff correctly argues that defendant has not shown a 

question of fact as to whether the damages it incurred as a result 

7 OPINION AND ORDER 

Case 6:14-cv-01303-AA Document 39 Filed 03/31/15 Page 7 of 11
of defendant's breach equals 

Nassimi, 2010 WL 4286192 at *8 

zero. Chamberlain Grp. , Inc. v. 

(W.D. Wash. Oct. 25, 2010). To the 

contrary, plaintiff presents Mr. Olson's declaration stating that 

plaintiff suffered damages as a result of the contaminated 

adhesive. Olson Decl. at 11. At a minimum, plaintiff incurred 

testing costs of its furniture, and it could not sell the furniture 

that had been built utilizing the adhesive with the prohibited 

chemical in it. Id. Defendant has not shown that plaintiff's 

damages are equal to zero, and I find that plaintiff has satisfied 

the damages element for the purposes of its current motion. 

However, after further discovery, defendant is not foreclosed from 

challenging the amount of damages claimed to be proximately caused 

by its breach. 

Accordingly, partial summary judgment on Counts I and II as to 

liability is granted. 

B. Defendant's Fifth Affirmative Defense 

Plaintiff also moves for summary judgment on defendant's fifth 

affirmative defense, which claims that plaintiff is barred from 

recovering damages due to the limitation of liability in 

defendant's terms and conditions on its invoice form. Plaintiff 

argues that this is a classic "battle of the forms" case which is 

governed by UCC section 2-207. 

Oregon has codified this section of the UCC as Or. Rev. Stat. 

§72.2070 which states: 

8 OPINION AND ORDER 

Case 6:14-cv-01303-AA Document 39 Filed 03/31/15 Page 8 of 11
(1) A definite and seasonable expression of acceptance or 

a written confirmation which is sent within a reasonable 

time operates as an acceptance even though it states 

terms additional to or different from those offered or 

agreed upon, unless acceptance is expressly made 

conditional on as sent to the additional or different 

terms. 

(2) The additional terms are to be construed as proposals 

for addition to the contract. Between merchants such 

terms become part of the contract unless: 

(a) The offer expressly limits acceptance to the 

terms of the offer; 

(b) They materially alter it; or 

(c) Notification of objection to them has already 

been given or is given within a reasonable time 

after notice of them is received. 

(3) Conduct by both parties which recognizes the 

existence of a contract is sufficient to establish a 

contract for sale although the writings of the parties do 

not otherwise establish a contract. In such case the 

terms of the particular contract consist of those terms 

on which the writings of the parties agree, together with 

any supplementary terms incorporated under any other 

provisions of the Uniform Commercial Code. Or. Rev. Stat. 

§72.2070 (emphasis added) 

Plaintiff argues that the terms and conditions did not become 

part of the agreement when UCC §2-207 is applied. Defendant 

contends that it did not receive enough information to be able to 

respond properly to plaintiff's argument that defendant's terms and 

conditions regarding liability did not become part of the parties' 

contract. I do not agree. 

Here, plaintiff was the offeror and stated its requested 

quantity and price in its purchase orders to defendant. Pl.'s Mot. 

Part .. Sum. J. at 8. In response, defendant attempted to impose 

additional terms and conditions regarding liability, in the "Terms 

OPINION AND ORDER 

Case 6:14-cv-01303-AA Document 39 Filed 03/31/15 Page 9 of 11
and Conditions of Sale" section of its invoice. As plaintiff points 

out, defendant's invoice essentially operates as a counteroffer; if 

assent is given by plaintiff, then these terms become a part of the 

contract. Diamond Fruit Growers v. Krack Corp, 794 F.2d 1440, 

1443 (9th Cir. 1986) If no assent is given, then the parties' 

contract is limited to the terms that both parties agreed upon to 

be in the contract. Id. at 1443; Or. Rev. Stat. §72.2070(3). 

Plaintiff contends that it did not assent to the terms and 

conditions of defendant's invoice, and they are not binding. 

Under the Ninth Circuit's ruling in Diamond Fruit Growers, a 

party must ~specifically and unequivocally assent" to new terms of 

a contract. Diamond Fruit Growers, 794 F.2d at 1445; See also 

Textile Unlimited, Inc. v. A .. BMH & Co., Inc., 240 F.3d 781, 787 

(9th Cir. 2001) (same). Here, defendant attempted to impose new 

terms upon plaintiff through its invoice statements, and defendant 

presents no evidence that plaintiff ~speci~ically and unequivocally 

assented" to those new terms. Id. 

Generally, a buyer's silence is not considered ~assent" to 

additional terms in a seller's acknowledgment. Smith & Loveless, 

Inc. v. Caicos Corp., 2005 WL 1533116, at *3 (D. Kan. June 29, 

2005) (~plaintiff's theory of 'assent by silence' would not 

withstand judicial scrutiny"); see also Altronics of Bethlehem, 

Inc. v. Repco, Inc., 957 F.2d 1102, 1108 (3d Cir. 1992) (rejecting 

argument that ~buyer's continued performance with constructive or 

10 OPINION AND ORDER 

Case 6:14-cv-01303-AA Document 39 Filed 03/31/15 Page 10 of 11
actual knowledge of the disclaimers demonstrated their acceptance 

of the new terms"); McJunkin Corp. v. Mechanicals, Inc., 888 F.2d 

481, 488 (6th Cir. 1989) (assent must be explicit); Dorton v. 

Collins & Aikman Corp., 453 F.2d 1161, 1168 (6th Cir. 1972) 

(rejecting silence as assent to additional or different terms). 

Defendant does not dispute that in this case a contract was 

formed. Under Or. Rev. Stat. §72.2070(3), the terms of the contract 

are those upon which . the parties agreed, consisting of price, 

quantity, and place of delivery; and do not include such terms to 

which both parties' did not agree, such as the limited liability 

clause. See Textile Unlimited, 240 F.3d at 787 (so stating). 

Accordingly, plaintiff's motion for partial summary judgment 

is granted with respect to defendant's fifth affirmative defense 

regarding limited liability under the terms and conditions in the 

invoice. 

CONCLUSION 

Therefore, plaintiff's motion for partial summary judgment 

(doc. 29) is GRANTED as to liability on plaintiff's contract claims 

and defendant's fifth affirmative defense, with the amount of 

defendant's damages to be determined at ·trial or upon further 

motion. IT IS SO ORDERED. 

:21~ Dated this G2L_ day of March, 2015. 

a~ W~vU Ann Aiken 

United States District Judge 

11 OPINION AND ORDER 

Case 6:14-cv-01303-AA Document 39 Filed 03/31/15 Page 11 of 11