Opinion ID: 171042
Heading Depth: 1
Heading Rank: 5

Heading: Both Sets of Batteries Arrive

Text: The six-minute batteries arrived at the Mondo Condo in November and December 2000. Without inquiring why these batteries, unlike batteries in all previous orders from Liebert, did not arrive directly from the manufacturer, Level 3 installed them on the seventh floor. The floor then stood vacant until November 2001, when Level 3 leased it to Lehman Brothers Holdings, Inc. While the floor still stood vacant, in March 2001 the original, 15-minute batteries arrived from the manufacturer. There is no indication these batteries were anything other than brand-new, factory-fresh. Level 3 did not, however, swap the 15-minute batteries for the already-installed six-minute batteries, but instead put them into storage, where they remained through the time of the trial. Lehman Brothers, after leasing the seventh floor of the Mondo Condo, tested the installed six-minute batteries. The test revealed the batteries retained only 68 percent of their rated capacity, well below the 80 percent industry standard. Unsatisfied with the batteries, Lehman Brothers demanded that Level 3 replace them. Level 3, in turn, asked Liebert to pay for the replacement. Liebert refused to accept responsibility for the six-minute batteries.
Level 3 sued Liebert for breach of contract, alleging Liebert failed to provide new batteries and to indemnify Level 3 in connection with the batteries. Level 3 also alleged intentional misrepresentation, fraudulent concealment, and negligent misrepresentation claims against both Liebert and Stillwell-Hansen. Before trial, both Defendants moved for summary judgment on all claims. In ruling against them, the district court concluded, as a matter of law, that the Agreement between Level 3 and Liebert applied to the batteries at issue in the case. In other words, the term Products in the Agreement encompassed batteries as well as UPS systems. Consistent with that interpretation, the district court, over Liebert's objection, instructed the jury as follows: the term `products,' as used in the agreement, included batteries that Liebert sold to Level 3. Therefore, Liebert's obligation to provide ... new and good quality products[ ] applied to the batteries at issue in this case. [2] Id. at 1535. The jury awarded Level 3 damages in the amount of $1,157,000 on breach of contract, fraudulent concealment, and negligent misrepresentation claims. In addition, Level 3 received $525,000 in punitive damages on the fraudulent concealment claim. While finding that Level 3 proved its claim for intentional misrepresentation, the jury concluded Level 3 did not prove that the claim caused damages. Liebert now appeals the jury's verdict on breach of contract, fraudulent concealment, and negligent misrepresentation claims. Level 3 does not cross-appeal on the intentional misrepresentation claim.