Opinion ID: 171042
Heading Depth: 1
Heading Rank: 8

Heading: Temporary Replacement Batteries

Text: That batteries ordered and delivered in the ordinary course of business between Level 3 and Liebert may constitute Products under the Agreement does not resolve this case. What makes the issue in this case different from the ordinary course of the parties' business are the unusual circumstances surrounding the transaction. These circumstances underscore the relevant ambiguity in the Agreement. Because of an unexpected delay in manufacturing batteries amidst the dot-com boom in 2000, Level 3 had to order two sets of batteries. The first set  the 15-minute batteries  was delayed. Level 3 then asked Liebert to locate batteries that could be delivered close to the original batteries' scheduled delivery date. For the additional set, Level 3 even settled for six-minute batteries instead of its standard specification, which called for batteries with at least 15 minutes of ride-through time. If the replacement batteries were meant as a permanent solution  completely displacing the original batteries and permanently installed together with the original order of UPS systems  then the extrinsic evidence we have already discussed might at least suggest the Agreement applied to the batteries. The case would be analogous to ordering a watch at a jewelry store to be ready in two days, only to find out two days later that the watch is not ready because the store has not received a battery meant to go with the watch. If a customer asks the store to forget the original battery and find a replacement that day (perhaps a battery with slightly different specifications), the customer may be justified in expecting the whole thing, including the replacement battery, to be new. The same applies to replacement UPS system batteries meant to become a permanent replacement. But not so in the case of a temporary solution. To continue with the watch analogy, suppose the store tells the customer that the original battery, although delayed, is sure to arrive within a week. Meanwhile, the customer instead can have a temporary battery with less power installed, which the store will swap for the originally-intended battery in a week. This represents a temporary solution. In this circumstance, it no longer follows that the replacement battery ought to be new. All that the replacement battery is meant to do is enable the customer to enjoy the watch while waiting for the original battery to arrive. The temporary replacement battery, for example, may have only half of its power left. The customer may well not care, so long as the battery contains enough power to last until the original battery arrives. The Agreement is ambiguous on whether batteries, intended as only a temporary solution, would constitute Products. The parties' prior course of dealings does not shed any light on this question, and neither does the quotation sheet listing all of UPS systems' components, which obviously does not anticipate Level 3 having to purchase two sets of batteries. Thus, the district court judge should have let the jury determine the meaning of the Agreement on this issue, with the parties introducing extrinsic evidence. Like Liebert, although at the polar opposite end, Level 3 argues no ambiguity exists, and the Agreement clearly applies to any set of batteries Level 3 purchases from Liebert. We are not persuaded. First, Level 3 argues items need not actually be listed in the P & P Attachment to qualify as Products. The Agreement contains a general provision, instructing that [a]ll listings of items shall not be taken to be exclusive, but shall include other items, whether similar or dissimilar to those listed, as the context reasonably requires. Aplt. App. 73. Level 3 argues that context reasonably requires that any battery purchased from Liebert be considered a Product. This argument fails because a more specific provision in the Agreement  the requirement that Products be described in the P & P Attachment  controls the effect of the general provision on which Level 3 relies. See E-470, 30 P.3d at 801. Moreover, as the relevant context that supposedly requires all batteries to be Products, Level 3 marshals the parties' course of prior dealings. But as we have already explained, that course of dealings does not address the unique situation in this case. Second, Level 3 argues the six-minute batteries must be Products because they were purchased via a purchase order submitted to Liebert. To be sure, the Agreement does say that [a]ll purchases of Products by [Level 3] shall be made by means of purchase orders. Aplt. App. 57. But we cannot logically infer the flip side  that all items ordered via a purchase order are necessarily Products. Lastly, Level 3 argues that all items sold by Liebert to Level 3 are either Products, which the Agreement warrants to be new, or third-party accessories, which under the Agreement receive only the warranty provided by the third party. Because UPS system batteries are not accessories, the argument goes, they must be Products. We agree that UPS system batteries, constituting an essential component of a functioning UPS system, are not accessories, as the word is commonly understood. An item is an accessory only when it represents a thing of secondary or subordinate importance[,] an object or device that is not essential in itself but that adds to the beauty, convenience, or effectiveness of something else. Webster's Third New International Dictionary 11 (2002); see also Black's Law Dictionary 15 (8th ed.2004) (defining accessory as [s]omething of secondary or subordinate importance). Rather than merely adding to the effectiveness of a UPS system, a battery is an essential component, without which there can be no effectiveness. To conclude otherwise would require a strained construction[ ] that in the absence of evidence showing the parties intended such a construction, should be avoided. Allstate, 52 P.3d at 819. But Level 3 is wrong to erect a false dichotomy between Products and third-party accessories, as if no other choices exist. Temporary replacement batteries may well be neither Products nor accessories; the parties, when they entered into the Agreement, may not have contemplated a situation needing a replacement solution ever to arise. We therefore hold the Agreement does not unambiguously answer whether the six-minute batteries should be considered Products. On remand, this question becomes one of fact, to be answered by the jury. 3. Not a Harmless Error We next turn to whether the erroneous jury instruction constitutes harmless error. We conclude it does not. Where an appellate court determines that the district court has given a legally erroneous jury instruction, the judgment must be reversed if the jury might have based its verdict on the erroneously given instruction. Wankier v. Crown Equip. Corp., 353 F.3d 862, 867 (10th Cir.2003) (quotations omitted, emphasis added); see also Dillard & Sons Constr., Inc. v. Burnup & Sims Comtec, Inc., 51 F.3d 910, 916-17 (10th Cir.1995) (noting we must reverse the judgment and remand the case for a new trial if the jury `might' have based its verdict on [an] erroneous instruction). The might have threshold, as its language suggests, requires reversal even if that possibility is very unlikely.  Wankier, 353 F.3d at 867 (quotations and alterations omitted, emphasis added). Only when the erroneous instruction could not have changed the result of the case can we say the error is harmless and does not require reversal. World Wide Ass'n of Specialty Programs v. Pure, Inc., 450 F.3d 1132, 1139 (10th Cir.2006) (quotation omitted). This inquiry is necessarily hypothetical. We do not know precisely how the jury would have resolved a case in the absence of an erroneous instruction. This is why the test is not whether the jury did base its verdict on an erroneous instruction, only whether it might have done so. The jury awarded Level 3 the same amount of damages on its breach of contract, negligent misrepresentation, and fraudulent concealment claims. To determine whether the erroneous jury instruction might have affected the jury's verdict, we must analyze each claim separately. In other words, to conclude the error is not harmless, we must determine the error might have affected the jury's verdict on each of the three claims.