Title: Bay Lines, Inc. v. Stoughton Trailers, Inc.
Citation: 838 So. 2d 1013
Docket Number: 1001163
State: Alabama
Issuer: Alabama Supreme Court
Date: February 15, 2002

838 So. 2d 1013 (2002)
BAY LINES, INC.
v.
STOUGHTON TRAILERS, INC., et al.
1001163.

Supreme Court of Alabama.
February 15, 2002.
Rehearing Denied June 14, 2002.
*1014 Gilbert L. Fontenot of Fernandez, Ollinger, Combs &amp; Fontenot, L.L.C., Mobile (reply brief filed by Gilbert L. Fontenot of Maples &amp; Fontenot, L.L.P., Mobile), for appellant.
Christopher G. Hume III and Ben H. Harris II of Miller, Hamilton, Snider &amp; Odom, L.L.C., Mobile, for appellee Stoughton Trailers, Inc.
William H. Hardie and Lawrence J. Seiter of Johnstone, Adams, Bailey, Gordon &amp; Harris, L.L.C., Mobile, for appellees Crane Co. and Dyrotech Industries, Inc.
SEE, Justice.
Bay Lines, Inc., a trucking company, leased and then subsequently purchased a number of freight trailers from a dealer who sold trailers built by Stoughton Trailers, Inc. The lease for the first trailers began in July 1991; Bay Lines eventually purchased those trailers when the lease expired in July 1996. A second lease began on May 1, 1992, and Bay Lines subsequently purchased the trailers that were the subject of that lease in May 1997. In *1015 May 1993, Bay Lines purchased several trailers directly from Stoughton.
Stoughton built each trailer using fiberglass reinforced polycore side panels manufactured by Crane Co., through Crane's Dyrotech Industries, Inc., division, which was doing business as Cor Tec Company.[1] Bay Lines alleged that in late 1998 the fiberglass panels on the trailers delaminated, and that it notified Stoughton of the failure at that time. On January 14, 2000, Bay Lines sued Stoughton and Crane, alleging breach of express warranty, breach of implied warranty, negligent or wanton manufacture, Alabama Extended Manufacturer's Liability Doctrine ("AEMLD") claims, breach of a third-party contract, and revocation of acceptance. Stoughton filed a Rule 12(c), Ala. R. Civ. P., motion for a judgment on the pleadings, which the trial court granted. Crane moved to dismiss under Rule 12(b)(6), Ala. R. Civ. P., alleging that Bay Lines had failed to state a claim on which relief could be granted, and the trial court granted Crane's motion. Bay Lines moved for a reconsideration of the Rule 12(b)(6) dismissal; the trial court granted that motion. On April 26, 2000, after further reconsideration, the trial court again dismissed the complaint as to Crane.
Bay Lines amended its complaint, again asserting claims against Crane and Stoughton, and also asserting claims against Dyrotech and Cor Tec (hereinafter referred to collectively as "Dyrotech"). Bay Lines asserted in its amended complaint that "Defendant Dyrotech Industries, Inc.... is a wholly owned subsidiary of Defendant Crane Co. Dyrotech does business as `Crane Cor Tec,' and Dyrotech holds out `Crane Cor Tec' as [its] `division.' " Bay Lines asserted against all of the defendants an AEMLD claim, negligent or wanton manufacture and assembly of the freight trailers, and breach of an express warranty. Bay Lines also alleged against Dyrotech a claim based on the breach of the contract between Dyrotech and Stoughton, arguing that Bay Lines was a third-party beneficiary of any warranties given by Dyrotech to Stoughton. Against Stoughton alone Bay Lines alleged revocation of acceptance.
The amended complaint alleged that the panels manufactured by Dyrotech failed in late 1998 and that Stoughton was informed of the failures. Bay Lines alleged that the panels "contained" warranties, but that these warranties were not delivered to Bay Lines when the trailers were leased or purchased.
Two warranties were included as exhibits to the amended complaint. The "Clad-Tuff" warranty states:
(Capitalization in original.)
The second warranty that Bay Lines alleges applies appears on the reverse side of an invoice from "Cor Tec Company, a division of Dyrotech Industries, Inc.," to Stoughton for 15 sets of panels sold in 1993. That invoice provides:
Stoughton again moved under Rule 12(c), Ala. R. Civ. P., for a judgment on the pleadings as to all claims asserted against it in the amended complaint; that motion was granted. Crane moved to strike the claims against it asserted in the amended complaint on the ground that comparable claims had already been dismissed, and because, it argued, the amended complaint was time-barred. Dyrotech moved to dismiss the claims asserted against it in the amended complaint under Rule 12(b)(6), Ala. R. Civ. P. The trial court granted Crane's motion to strike and Dyrotech's motion to dismiss, and dismissed the action in its entirety as to both Crane and Dyrotech.
Bay Lines appeals from these dismissals, alleging that the trial court erred (1) in determining that the term "original equipment purchaser" in the "Clad-Tuff" warranty was unambiguous, and in its holding that the Clad-Tuff warranty did not cover the claims asserted by Bay Lines; (2) in holding that the Clad-Tuff warranty did not include the future performance of the goods, and that the statute of limitations, § 7-2-725(1), Ala.Code 1975, therefore expired before Bay Lines brought its express-warranty claims against Crane and Dyrotech; (3) in dismissing the express-warranty claim against Dyrotech; (4) in finding that the economic-loss rule prevented Bay Lines from recovering in tort for damage that was only to the product itself; (5) in striking the amended complaint against Crane, when the amended complaint was filed within 10 days of a revised motion to dismiss and added a new claim of third-party breach of contract against Crane; and (6) in dismissing the third-party breach-of-contract claim against Crane and Dyrotech. Bay Lines identifies in the negative the claims as to which it appeals; that is, it lists the claims that it does not appeal, and allows this Court to infer that it is appealing as to all other claims. It appears that Bay Lines appeals as to the express-warranty claims against Dyrotech and Crane, the negligence and/or wantonness claims against Stoughton, Crane, and Dyrotech, and the third-party-contract-beneficiary claims against Dyrotech and Crane.
The decision to grant a motion to strike under Rule 12(c), Ala. R. Civ. P., is proper when the trial court determines that the material facts are not disputed. McCullough v. Alabama By-Products Corp., 343 So. 2d 508, 510 (Ala.1977). This Court reviews de novo a ruling on a motion to strike and views the facts in the complaint in the light most favorable to the nonmoving party. Willis v. Shadow Lawn Mem'l Park, 709 So. 2d 1241, 1242 (Ala.Civ. App.1998).
This Court must review de novo the propriety of a dismissal for failure to state a claim and must resolve all doubts in favor of the plaintiff:
Fontenot v. Bramlett, 470 So. 2d 669, 671 (Ala.1985).
Express warranties are interpreted according to general contract principles. Ex parte Miller, 693 So. 2d 1372 (Ala.1997).
Terry Cove North, Inc. v. Baldwin County Sewer Auth., Inc., 480 So. 2d 1171, 1173 (Ala.1985).
Crane's Clad-Tuff warranty was given to Stoughton when Stoughton purchased the Clad-Tuff panels to build its trailers. The clear and unambiguous language of that warranty is that, "This warranty ... is limited to the original equipment purchaser." The "equipment" discussed in the warranty is the Clad-Tuff panels, as indicated by the repeated references to Clad-Tuff panels in the text of the warranty and also by the heading above the text. The plain meaning of the term "original equipment purchaser" is the person or company that first purchased the Clad-Tuff panels from Crane.
Bay Lines argues that "original equipment purchaser" refers to the party that first purchased the completed trailers; however, that would be true only if Stoughton had issued the warranty to its purchasers. Because Crane undisputedly issued the warranty to Stoughton, the trial court correctly determined that under the plain meaning of the term "original equipment purchaser," Stoughtonnot Bay Lineswas the original equipment purchaser of the Clad-Tuff panels. Bay Lines, therefore, cannot assert a claim under Crane's Clad-Tuff warranty. Moreover, "[a] party claiming to be a third-party beneficiary of a contract must establish that the contracting parties intended, upon execution of the contract, to bestow a direct, as opposed to an incidental, benefit upon the third party." Weathers Auto Glass, Inc. v. Alfa Mut. Ins. Co., 619 So. 2d 1328, 1329 (Ala.1993). Bay Lines presented no evidence indicating that Crane knew, when it sold the panels to Stoughton, that Bay Lines was a purchaser of Stoughton's products, or that Crane intended to protect future customers of Stoughton, such as Bay Lines, when it warranted its products *1019 to Stoughton. Bay Lines, therefore, cannot rely on the warranty to support its claim against Crane.
A similar analysis applies to the "invoice warranty" from Dyrotech to Stoughton. Cor Tec, as a division of Dyrotech, issued the invoice for 15 sets of panels it sold Stoughton in 1993. At most, therefore, the invoice warranty can apply only to the 1993 sales of 15 sets of panels, and not to any previous or subsequent sales. More importantly, Bay Lines claims that this warranty extends to Stoughton's customers and, thus, to Bay Lines. This assertion misconstrues the language of the warranty.
Paragraph 14(b) of the invoice warranty grants a warranty of title to the "Buyer and its customers." Paragraph 14(b) is the only paragraph of the warranty that grants any warranty to a party farther down the distribution chain than the original purchaser from Dyrotech. Bay Lines, however, does not raise a warranty-of-title claim in its amended complaint. Instead, Bay Lines claims defects, not in the title, but in the product itself. Bay Lines' claim, therefore, must arise, not under paragraph 14(b), but under paragraph 14(c) of the warranty, which addresses defects upon delivery to the Buyer. However, paragraph 14(c), unlike paragraph 14(b), does not extend to subsequent purchasers. Therefore, Bay Lines cannot rely on the invoice warranty as the basis for its claims against Crane.
The standard of review for analyzing the granting of a motion to strike is the same as the standard of review for analyzing the granting of a motion to dismiss, a de novo standard in which doubts are to be resolved in favor of the nonmoving party. Under this standard of review, we conclude that the trial court correctly held that neither the Clad-Tuff warranty nor the invoice warranty applies to Bay Lines and that the trial court therefore properly dismissed Bay Lines' warranty claims. We, therefore, affirm the trial court's dismissal of all claims of breach of warranty.
Bay Lines argues that the trial court erred in dismissing its negligence or wantonness claims. "[O]ne cannot recover in tort for negligent manufacture of a product where the only injury is to the product itself. See Dairyland Ins. Co. v. General Motors Corp., 549 So. 2d 44, 46 (Ala.1989)." Ex parte Grand Manor, Inc., 778 So. 2d 173, 178 (Ala.2000)(footnote omitted). This Court has explained:
Lloyd Wood Coal Co. v. Clark Equip. Co., 543 So. 2d 671, 673 (Ala.1989).
Bay Lines claims that defects in the panels caused it to suffer the loss of its *1020 investment in the trailers and an additional loss that resulted from the loss of the trailers, including having to purchase replacement trailers and having to pay its customers for such problems as delayed shipping and damaged freight. Those increased costs of doing business and customer displeasure are precisely the sorts of risks that can be considered before entering into a contract and that can be allocated in the contract. We should refrain from permitting tort actions when the basis for the claims should properly be dealt with between the parties under the law of contracts. Lloyd Wood Coal, supra. Applying the proper de novo standard of review for the dismissal of those claims, we affirm the trial court's dismissal of all the tort claims asserted against Stoughton, Crane, and Dyrotech for the injury claimed here.
Finally, Bay Lines argues that it was error to dismiss its third-party breach-of-contract claims when it filed them within the time required by Rule 78, Ala. R. Civ. P. The trial court did not dismiss those claims solely because they fell outside the 10-day period permitted by Rule 78, but also because they fell outside of the 6-year statute-of-limitations period for contract claims. See § 6-2-34(9), Ala. Code 1975. The contracts to which Bay Lines alleges it was a third-party beneficiary were contracts for the sale of the panels to Stoughton; those contracts were all completed before May 1993. The claims filed in January 2000 were, therefore, more than six years after the dates of the completion of the contracts and were therefore time-barred. "[I]f a [judgment] correctly determines a case, the reasons on which the trial court acted are unimportant and the case will be affirmed." City of Montgomery v. Couturier, 373 So. 2d 625, 627 (Ala.1979), citing Clanahan v. Morgan, 268 Ala. 71, 74, 105 So. 2d 429 (1958). We, therefore, affirm the trial court's judgment dismissing and striking the claims for third-party breach of contract. For the foregoing reasons, the trial court's judgment is affirmed.
AFFIRMED.
MOORE, C.J., and BROWN, HARWOOD, and STUART, JJ., concur.
[1]  Cor Tec is an unincorporated division of Dyrotech. It is not named as a party to this appeal.