Court Opinion

ID: 172223
Source: CourtListenerOpinion
Date Created: 2010-08-14 18:47:34+00
Date Added: 2024-06-11T17:25:17.994559
License: Public Domain

FILED
                                                            United States Court of Appeals
                                                                    Tenth Circuit

                                                                    June 3, 2009
                      UNITED STATES COURT OF APPEALS
                                                                Elisabeth A. Shumaker
                                   TENTH CIRCUIT                    Clerk of Court

 SANDRA ANGEL, individually and
 on behalf of all similarly situated
 persons,
                                                        No. 08-5076
          Plaintiff - Appellant,             (D.C. No. 07-CV-00462-CVE-FHM)
                                                        (N.D. Okla.)
 v.

 GOODMAN MANUFACTURING
 COMPANY, L.P.,

          Defendant - Appellee.

                              ORDER AND JUDGMENT *

Before KELLY, LUCERO, and HARTZ, Circuit Judges.

      Plaintiff-Appellant Sandra Angel appeals from the district court’s grant of

summary judgment in favor of Defendant-Appellee Goodman Manufacturing

Company, L.P. (Goodman). Angel v. Goodman Mfg. Co., L.P., No. 07-CV-0462-

CVE-FHM, 2008 WL 2673353 (N.D. Okla. June 27, 2008). Plaintiff purchased

an air conditioning unit manufactured by Goodman which she contends is

defective because of the corrosive effect of paint applied to the unit. She filed a

      *
        This order and judgment is not binding precedent, except under the
doctrines of law of the case, res judicata, and collateral estoppel. It may be cited,
however, for its persuasive value consistent with Fed. R. App. P. 32.1 and 10th
Cir. R. 32.1.
class action complaint alleging breach of express warranty. Following discovery,

the district court granted summary judgment in favor of Goodman thereby

rendering class certification moot. Id. at *8. Our jurisdiction arises under 28

U.S.C. § 1291, and we affirm.

                                    Background

      In August 2000, a property management company purchased an air

conditioning unit from an independent distributor for installation in an apartment

complex owned by Sandra Angel. Aplt. App. 198; 428-30. The unit was

manufactured by Goodman and installed shortly after the purchase date. Aplt.

App. 435-38. The warranty stated:

      [T]he parts of air conditioning product(s) . . . is (are) warranted against
      defects in material or workmanship under normal use and maintenance
      (a) for a period of five (5) years from the installation date or (b) for a
      period of sixty-three (63) months from the date of manufacture if the
      installation date cannot be verified. We will exchange any warranted
      defective part upon its[] presentation to our distributor by a certified or
      licensed technician.

Aplt. App. 157. Goodman manufactured the unit in June 2000. Aplt. App. 519-

20 at ¶ 5, 522 at ¶ 11 (Blackham Aff.). Plaintiff filed her initial complaint on

August 27, 2007. Angel v. Goodman Mfg. Co., L.P., 4:07-cv-00462-CVE-FHM,

Doc. 1 (N.D. Okla. August 27, 2007).

      Plaintiff maintains that paint used on some 750,000 units, including hers, is

corroding the aluminum fins and sometimes causes a white rust to appear. Aplt.

                                         -2-
App. 19-20. She also alleges that such corrosion reduces the operating efficiency

of the units. Aplt. App. 19. Plaintiff relies heavily upon a prior lawsuit between

Goodman and its paint supplier, American Coatings, where Goodman sought

damages in excess of $81 million for the corrosive effect of Goodman Black paint

on its air conditioners. Aplt. App. 52, 57. As Goodman clarifies, the parties

settled that case “for less than one percent of its $81 million demand,” Aplt. App.

188, after “it had become apparent that the problem with the paint was not as

widespread as Goodman originally had thought,” Aplt. App. 254. Based on the

claims made by Goodman in the prior case, Plaintiff posits that her air

conditioning unit was defective from the date of purchase, as are all the other

units that have been painted with the corrosive paint. Aplt. App. 25-26. She

further theorizes that she “was injured at the time she purchased the unit because

the unit was already corroded, even if that corrosion was not visible yet to the

naked eye.” Aplt. Br. 5.

      Plaintiff depends heavily upon Goodman’s evidence in its prior lawsuit

against American Coatings. First, Plaintiff relies upon the testimony of Dr.

Darlene Brezinski who testified that she “truly believe[d] the degradation process

. . . started in the [Goodman] bake oven.” Aplt. App. 613, at 77. Dr. Brezinski

further agreed with the statement that “all 830,000 units that are in the field that

have been painted with Goodman Black will fail ultimately.” Aplt. App. 614 at

85. Plaintiff also relies upon the testimony of Dr. Lori Streit who testified that

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“[it is] probably true” that “on all of these units corrosion will occur ultimately.”

Aplt. App. 618 at 101.

       In this case, Goodman filed a motion for summary judgment on the grounds

that Plaintiff (1) has no evidence that her warranty claim accrued during the

warranty period on her air conditioning unit, Aplt. App. 472-74, and (2) has

admitted that she did not provide notice of her claim to Goodman prior to filing

suit, Aplt. App. 474-77. The district court then granted summary judgment.

Angel, 2008 WL 2673353, at *8. It relied upon three grounds: (1) Plaintiff’s air

conditioning unit was not defective during the warranty period; (2) Plaintiff did

not provide pre-suit notice of a breach of warranty claim prior to filing her

lawsuit to Goodman or anyone else in the distribution chain; and (3) Plaintiff

failed to comply with the express terms of her warranty by not presenting the air

conditioning unit to Goodman through a certified or licensed technician during

the warranty period. Id. at *4-8.

       On appeal, Plaintiff claims that the district court erred (1) in holding that

her warranty claim was barred because her warranty expired before a defect arose

and (2) in improperly construing the testimony of Goodman representatives Clark

and Whittington. She also challenges the district court’s conclusions that she was

required (3) to have relied upon any warranty extension and (4) to give pre-suit

notice to Goodman. She also questions (5) whether the making of a warranty

claim is a prerequisite to filing suit.

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                                     Discussion

      We review the grant of summary judgment de novo and apply the same

standard as the district court. T-Mobile Cent., LLC v. Unified Gov’t of

Wyandotte County, 546 F.3d 1299, 1306 (10th Cir. 2008) (citing Timmerman v.

U.S. Bank, N.A., 483 F.3d 1106, 1112 (10th Cir. 2007)). Rule 56(c) of the

Federal Rules of Civil Procedure allows summary judgment if “there is no

genuine issue as to any material fact and . . . the movant is entitled to judgment as

a matter of law.” Fed. R. Civ. P. 56(c). In making this determination, we view

the evidence and make all inferences in the light most favorable to the nonmoving

party. Antonio v. Sygma Network, Inc., 458 F.3d 1177, 1181 (10th Cir. 2006).

“[T]he mere existence of some alleged factual dispute between the parties will not

defeat an otherwise properly supported motion for summary judgment; the

requirement is that there be no genuine issue of material fact.” Anderson v.

Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986). “A ‘complete failure of proof

concerning an essential element of the nonmoving party’s case necessarily renders

all other facts immaterial.’” Bruner v. Baker, 506 F.3d 1021, 1025 (10th Cir.

2007) (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986)).

      I. Plaintiff’s Warranty

      As noted above, the express warranty for Plaintiff’s air conditioning unit

protected against defects in material or workmanship for five years from the date

of installation or sixty-three months from the date of manufacture. Aplt. App.

                                         -5-
157. In this case, the record is not clear on the date of installation, but does

establish that the unit was manufactured in June of 2000. Aplt. App. 519-20 at

¶ 5, 522 at ¶ 11 (Blackham Aff.). Therefore, the sixty-three-month time period

applies, and Ms. Angel’s warranty expired in September 2005.

      II. Applicable Law

      Both parties agree that, under a choice of law analysis, Texas law governs

Ms. Angel’s breach of warranty claim. Aplt. App. 13; Angel, 2008 WL 2673353,

at *4 n.2. Texas has adopted the Uniform Commercial Code (UCC), including

UCC Section 2-313(2)(a) in its entirety. The Texas Business and Commercial

Code provides that “[a]ny affirmation of fact or promise made by the seller to the

buyer which relates to the goods and becomes part of the basis of the bargain

creates an express warranty that the goods shall conform to the affirmation or

promise.” Tex. Bus. & Com. Code Ann. § 2.313(a)(1); Compaq Computer Corp.

v. Lapray, 135 S.W.3d 657, 675 (Tex. 2004). Under Texas law, to successfully

bring a breach of express warranty action, a plaintiff must allege: (1) an express

affirmation of fact or promise by the seller relating to the goods; (2) that such

affirmation became a part of the basis of the bargain; (3) that plaintiff relied upon

said affirmation of fact or promise; (4) that the goods failed to comply with the

affirmation of fact or promise; (5) that plaintiff was injured by such failure of the

product to comply with the express warranty; and (6) that such failure was a

proximate cause of plaintiff’s injury. Crosbyton Seed Co. v. Mechura Farms, 875

                                          -6-
S.W.2d 353, 361 (Tex. App. 1994) (stating the elements for breach of express

warranty).

             A. Manifestation of a Defect

      Goodman argues that Ms. Angel attempts to recover for an unmanifested

defect in her air conditioning unit. Aplee. Br. 7. Texas law has yet to recognize a

breach of express warranty claim for unmanifested defects in products with

distinctly limited useful lives. See DaimlerChrysler Corp. v. Inman, 252 S.W.3d

299, 304 (Tex. 2008) (“[T]he law is not well developed on the degree to which

the defect must actually manifest itself before it is actionable.”); Compaq

Computer Corp., 135 S.W.3d at 679, 680 n.15 (noting that Texas law is unclear as

to whether it “permit[s] express warranty claims for unmanifested defects”).

Thus, for such products, a claim for breach of express warranty requires that the

defect manifest itself. See Microsoft Corp. v. Manning, 914 S.W.2d 602, 609

(Tex. App. 1995) (“[If an item has] a distinctly limited usable life[, a]t the end of

the product’s life, the product and whatever defect it may have had pass away. If

a defect does not manifest itself in that time span, the buyer has gotten what he

bargained for.”), abrogated on other grounds by Citizens Ins. Co. of Am. v.

Daccach, 217 S.W.3d 430 (Tex. 2007); see also Gen. Motors Corp. v. Garza, 179

S.W.3d 76, 83 (Tex. App. 2005) (finding that a defective brake system did not

breach a warranty to repair at the time of sale, but rather breach occurred only if a

defect actually arose). The only exception to the general rule that a defect must

                                         -7-
manifest itself under Texas law appears to be when an item has an indefinite

useful life, such as computer software, making the manifestation of defects more

difficult to identify. Microsoft Corp., 914 S.W.2d at 609.

             B. Plaintiff’s Air Conditioning Unit

      Plaintiff argues that the district court improperly granted summary

judgment after holding as a matter of law that no warranty claim accrued during

the warranty period. According to Plaintiff, there is a genuine issue of material

fact as to whether the defect arose during the warranty period. Aplt. Br. 9-10.

Plaintiff maintains that the air conditioning unit was defective at the time of

purchase because Goodman sold the unit with the defective paint. Aplt. App. 25-

26. Plaintiff relies upon the evidence of Dr. Brezinski who opined that the

corrosion process started in Goodman’s bake ovens given the manufacturing

process. Aplt. Br. 9-10. Goodman counters that because there is no actual

evidence of any defect on Plaintiff’s particular unit, the mere use of the paint is

insufficient to amount to a defect. Aplee. Br. 7; Aplt. App. 320-26 (Kinsch Aff.),

409. Further and at best, microscopic corrosion that is not visible and does not

affect how the unit functions is an unmanifested defect. Aplee. Br. 7-8.

      We agree. The useful life of a Goodman air conditioning unit appears to be

anywhere between eight and twenty years–thus the general rule requiring

manifestation of a defect for an express warranty claim applies. Aplt. App. 264,

at 31 (Whittington Dep.) (suggesting a useful life of fifteen to twenty years), 320-

                                         -8-
21 at ¶ 10 (Kinsch Aff.) (suggesting a useful life of eight to ten years). Goodman

warranted “against defects in material or workmanship” for either five years from

the date of installation or sixty-three months from the date of manufacture. Aplt.

App. 157. Plain and simple, the air conditioning unit at issue required no service

or repair during the warranty period. Moreover, upon inspection of the unit, no

evidence of deterioration or corrosion due to the use of Goodman Black paint

existed. Aplt. App. 320-26 (Kinsch Aff.). Instead, the inspection revealed only

minimal oxidation and weathering consistent with the unit’s age and lack of

cleaning. Aplt. App. 320 at ¶ 9, 321 at ¶ 12 (Kinsch Aff.). The inspector

concluded that the unit “looks to be in normal condition for a condenser of this

quality and age.” Aplt. App. 320 at ¶ 9 (Kinsch Aff.).

      The record clearly establishes that no defect arose on Plaintiff’s particular

air conditioning unit during her five-year warranty period. Without any evidence

of a defect, the mere use of the paint is insufficient. Plaintiff’s unit remained free

from defect during its warranty period, and therefore she received precisely what

she bargained for. Given no actual breach of express warranty vis-à-vis the paint,

the district court properly granted summary judgment on this ground.

      Plaintiff additionally argues that two Goodman executives extended her

five-year warranty period through statements made in Goodman’s prior litigation

with American Coatings. Aplt. Br. 11-17; Aplt. App. 623 at 11 (Clark Dep.);

Aplt. App. 626 at 30 (Whittington Dep.). Specifically, Plaintiff contends that the

                                         -9-
deposition testimony of Gary Clark and Richard Whittington extended her

warranty period by indicating that the Goodman Black paint situation was

“catastrophic,” and that Goodman would waive the standard five-year warranty

period for affected air conditioning units. Aplt. Br. 11-13; Aplt. App. 623 at 11

(Clark Dep.); Aplt. App. 626 at 30 (Whittington Dep.).

      Mr. Gary Clark, Vice President of Marketing for Goodman, testified as

follows on August 20, 2003:

      In the case of catastrophic failures . . . [l]et’s say a failure at
      greater than five — or let’s just use — it’s a gray area and it
      varies. But let’s just say a failure rate greater than five percent,
      we would tend to call that catastrophic, at which point we would
      put service policies into place that would enhance the standard
      warranty in these cases where we have known defects.

Aplt. App. 623 at 11 (Clark Dep.).

      Mr. Richard Whittington, another Goodman employee, testified in the

American Coatings litigation regarding the warranty period for the air

conditioning units affected by the corrosive paint. In response to the question “Is

there any contemplated plan or do you have a contemplated plan in place that

after five years . . . you’ll stop [any remediation plans] because you’ll be out of

the warranty period?”, he stated,

      No. It becomes kind of an individual consideration at that point
      in time. What is a likely scenario is you have a 150 unit or a 63
      unit complex with these units in them. Let’s say they are in year
      seven, and they are having significant failure rates on these, the
      fins are deteriorating. We are going to step up to the plate and
      take care of the customer. . . .

                                       - 10 -
Aplt. App. 626 at 30 (Whittington Dep.).

      We agree with the district court that no reasonable reading of these

responses to a hypothetical situation resulted in a global extension of the warranty

period. While a court is required to construe summary judgment evidence in the

light most favorable to the non-movant, the construction and resulting inferences

must be reasonable and allow for a verdict in the non-moving party’s favor. See

Scott v. Harris, 550 U.S. 372, 380 (2007); Anderson, 477 U.S. at 249-52. This

evidence falls far short. Goodman’s decision to accommodate an individual

customer from time to time and go beyond the warranty, Aplt. App. 536, in no

way suggests that Plaintiff’s warranty was extended or that the district court

somehow resolved credibility issues. Thus, as no defect arose in the five-year

warranty period, the district court correctly entered summary judgment for

Goodman. It is unnecessary to reach the remaining issues on appeal.

      AFFIRMED.

                                       Entered for the Court

                                       Paul J. Kelly, Jr.
                                       Circuit Judge

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