Court Opinion

ID: 4103693
Source: CourtListenerOpinion
Date Created: 2016-12-01 16:09:42.984194+00
Date Added: 2024-06-11T07:46:04.556746
License: Public Domain

MAINE	SUPREME	JUDICIAL	COURT	                                       Reporter	of	Decisions	
Decision:	 2016 ME 175 
Docket:	   BCD-15-481	
Argued:	   May	3,	2016	
Decided:	  December	1,	2016	
	
Panel:	    SAUFLEY,	C.J.,	and	ALEXANDER,	MEAD,	GORMAN,	JABAR,	HJELM,	and	HUMPHREY,	JJ.	
	
	
                          ARUNDEL	VALLEY,	LLC,	et	al.	
                                      	
                                     v.	
                                      	
                       BRANCH	RIVER	PLASTICS,	INC.,	et	al.	
	
	
HUMPHREY,	J.	

      [¶1]	 	 This	 appeal	 involves	 a	 complex	 construction	 dispute	 between	

Arundel	Valley,	LLC,	the	developer	of	a	facility	for	a	butter	manufacturer,	and	

Branch	River	Plastics,	Inc.,	a	manufacturer	and	distributor	of	insulated	roofing	

panels.	 	 After	 a	 six-day	 trial	 in	 the	 Business	 and	 Consumer	 Docket,	 a	 jury	

found	 in	 Arundel	 Valley’s	 favor	 on	 its	 claims	 that	 Branch	 River	 breached	

implied	 warranties	 by	 supplying	 defective	 roofing	 panels.	 	 Branch	 River	

appeals	 from	 the	 court’s	 (Horton,	 J.)	 denial	 of	 its	 motion	 for	 a	 new	 trial,	

arguing	that	(1)	it	was	unfairly	surprised	by	certain	expert	testimony	at	trial	

and	 (2)	 the	 court	 erroneously	 declined	 to	 adjudicate	 whether	 Branch	 River	

had	 disclaimed	 implied	 warranties.	 	 Because	 we	 agree	 with	 Branch	 River’s	
2	

second	 contention,	 we	 remand	 the	 case	 for	 the	 court	 to	 determine	 whether	

Branch	River’s	purported	disclaimer	of	implied	warranties	was	effective.	

                                          I.		BACKGROUND	

         [¶2]	 	 On	 December	 28,	 2012,	 Arundel	 Valley	 and	 Kate’s	 Homemade	

Butter,	 Inc.,	 filed	 a	 twelve-count	 complaint	 in	 the	 Superior	 Court	

(York	County)	 against	 Branch	 River	 and	 other	 defendants	 alleging,	 inter	 alia,	

defects	in	roofing	panels	that	Branch	River	had	manufactured	and	supplied	to	

Arundel	 Valley	 for	 a	 construction	 project.	 	 Branch	 River	 was	 named	 as	 a	

defendant	 in	 seven	 counts.1	 	 After	 the	 case	 was	 transferred	 to	 the	 Business	

and	 Consumer	 Docket,	 the	 court	 (Horton,	 J.)	 ultimately	 entered	 summary	

judgments	 in	 Branch	 River’s	 favor	 on	 five	 of	 those	 counts.2	 	 Two	counts	

remained	for	adjudication	at	trial,	with	Arundel	Valley	as	the	sole	plaintiff	and	

Branch	River	as	the	sole	defendant.		 In	those	counts,	Arundel	Valley	claimed	

that	 Branch	 River	 had	 breached	 the	 implied	 warranties	 of	 merchantability	

     1		The	complaint	contained	five	counts	against	defendants	other	than	Branch	River;	each	of	those	

counts	was	eventually	dismissed,	and	none	is	at	issue	on	appeal.			
   	
   2	 	 The	 court	 also	 entered	 summary	 judgments	 in	 favor	 of	 Branch	 River’s	 owner	 on	 all	 claims	

against	him	and	ruled	that	Kate’s	Butter	was	not	a	proper	plaintiff	in	the	action.	
   	
                                                                                                                    3	

(Count	 XI)	 and	 fitness	 for	 a	 particular	 purpose	 (Count	 XII)	 by	 providing	

defective	roofing	panels.3	

         [¶3]	 	 Before	 trial,	 pursuant	 to	 M.R.	 Civ.	 P.	 26(b)(4),	 Arundel	 Valley	

designated	James	B.	DeStefano,	a	professional	engineer,	as	an	expert	witness.		

At	 trial,	 DeStefano	 testified,	 on	 direct	 examination,	 about	 two	 types	 of	

manufacturing	defects	in	the	panels	that	would	affect	the	roof’s	performance:	

(1)	manufacturing	 defects	 that	 created	 gaps	 between	 the	 panels,4	 and	

(2)	manufacturing	 defects	 involving	 gaps	 between	 foam	 components	 inside	

each	panel.5		Branch	River	did	not	object	to	this	testimony.	

         [¶4]		During	redirect,	counsel	for	Arundel	Valley	asked	DeStefano	about	

a	 “third	 report,”	 referring	 to	 a	 letter	 from	 DeStefano	 to	 an	 Arundel	 Valley	

representative	that	described	“open	joints	between	sections	of	[]	foam	within	

the	 panels.”	 	 Counsel	 for	 Branch	 River	 expressed	 concern	 that	 Branch	 River	

had	 not	 received	 the	 “third	 report,”	 and	 that	 it	 was	 surprised	 at	 DeStefano’s	

testimony	 describing	 defects	 inside	 each	 panel.	 	 Arundel	 Valley’s	 attorney	

   3		The	panels	at	issue	are	large	structural	insulated	panels,	or	“SIPs,”	each	of	which	is	composed	

of	 a	 flat	 foam	 core	 covered	 on	 both	 sides	 with	 oriented	 strand	 board	 sheathing,	 creating	 an	
insulated	sandwich	panel	designed	to	increase	the	energy	efficiency	of	a	structure.	
    	
    4	 	 DeStefano	 testified,	 “[T]here’s	 a	 gap	 here	 between	 the	 foam	 faces.	 	 But	 you’ll	 notice	 that	 the	

skins,	the	[oriented	strand	board]	skins,	are	in	tight	contact.		So	the	installer	putting	this	together,	
even	if	he	was	an	expert	at	it,	could	not	have	physically	gotten	those	panels	any	closer	together.”	
    	
    5		DeStefano	testified,	“We	found	that	inside	each	individual	panel,	there	was	actually	a	space	or	

a	gap	in	between	the	individual	blocks	of	foam,	and	there	was	no	adhesive	bonding	it	together.”	
4	

argued	 that	 the	 letter	 was	 attached	 to	 a	 pretrial	 motion	 in	 limine	 and	 that	

Arundel	Valley	had	otherwise	made	Branch	River	aware	that	DeStefano	would	

testify	 about	 both	 types	 of	 defects.	 	 After	 some	 discussion,	 Branch	 River’s	

counsel	 said,	 “if	 you’re	 going	 to	 represent	 to	 [the	 court]	 that	 you	 produced	

[the	letter]	in	some	fashion,	I’ll	accept	that.”	

      [¶5]	 	 The	 court	 suggested	 that	 counsel	 for	 Arundel	 Valley	 clarify	 with	

DeStefano	 that	 the	 letter	 concerned	 issues	 he	 had	 already	 testified	 about	 on	

direct	 examination.	 	 The	 letter	 was	 not	 offered	 as	 an	 exhibit	 or	 admitted	 in	

evidence.	 	 Branch	 River	 did	 not	 object	 to	 DeStefano’s	 continued	 redirect	

testimony	 about	 the	 “third	 report”	 or	 the	 defect	 inside	 the	 panels,	 did	 not	

further	address	the	issue	on	recross,	and	did	not	raise	the	issue	again	at	trial.	

	     [¶6]	 	 The	 jury	 heard	 testimony	 during	 trial	 that	 (1)	 all	 Branch	 River	

products	 came	 with	 a	 “standard”	 twenty-year	 warranty;	 (2)	 Branch	 River’s	

president	had	told	Arundel	Valley	it	was	voiding	the	“standard”	warranty	on	

the	panels	after	issues	with	their	installation	first	arose;	(3)	Branch	River	later	

sent	 an	 express	 warranty	 document	 to	 Arundel	 Valley,	 which	 included	 a	

disclaimer	 of	 implied	 warranties;	 and	 (4)	 Arundel	 Valley	 never	 signed	 that	

document.	 	 No	document	 containing	 the	 “standard”	 warranty	 that	 Branch	

River	purportedly	voided	was	ever	identified	with	specificity.		Branch	River’s	
                                                                                         5	

Exhibit	 21,	 a	 document	 that	 contains	 an	 express	 warranty	 and	 purports	 to	

disclaim	any	implied	warranties,	was	identified	by	Branch	River’s	president	as	

the	 express	 warranty	 document	 that	 he	 sent	 to	 Arundel	 Valley	 after	 voiding	

the	“standard”	warranty.	

      [¶7]	 	 On	 the	 fifth	 day	 of	 trial,	 the	 court	 conferred	 with	 counsel	 in	

chambers	 to	 discuss	 jury	 instructions	 and	 a	 verdict	 form.	 	 The	 court	 and	

counsel	placed	the	results	of	that	conference	on	the	record.		After	discussing	

the	 jury	 instructions,	 counsel	 for	 Branch	 River	 moved	 “to	 enforce	 the	

limitation	on	damages	that	is	set	forth	in	the	.	.	.	written	warranty”	and	moved	

to	admit	the	express	warranty	document.		The	parties	and	the	court	discussed	

Branch	 River’s	 Exhibit	 21,	 which	 was	 eventually	 admitted	 in	 evidence.	 	 The	

court	 then	 specifically	 asked	 Branch	 River	 whether	 it	 was	 going	 to	 argue	 to	

the	 jury	 that	 it	 had	 disclaimed	 implied	 warranties.	 	 Branch	 River	

unequivocally	 said	 that	 it	 was	 not	 going	 to	 do	 so	 and	 that	 Exhibit	 21	 should	

not	even	go	into	the	jury	room.		Branch	River	emphasized	that	Exhibit	21	was	

for	the	court’s	review.		In	response,	the	court	stated	that	the	disclaimer	issue	

may	 require	 a	 post-verdict	 ruling	 and	 deferred	 making	 a	 ruling	 on	 Branch	

River’s	motion	at	that	time.	
6	

	     [¶8]	 	 The	 next	 substantive	 discussion	 on	 the	 record	 about	 the	 express	

warranty	and	disclaimer	came	on	the	final	day	of	trial	after	another	chambers	

conference.		At	the	conclusion	of	that	conference,	and	just	before	the	jury	was	

to	 hear	 the	 arguments	 of	 counsel	 and	 instructions	 from	 the	 court,	 the	 court	

raised	the	status	of	any	factual	or	legal	issues	regarding	the	express	warranty	

and	made	a	“tentative	legal	ruling”	that	“Branch	River	did	not	have	a	right	to	

impose	 a	 warranty	 on	 Arundel	 Valley.”	 	 The	 court	 also	 stated,	 “[M]y	 view	 of	

the	 evidence	 is	 that	 [the	 express	 warranty	 containing	 language	 disclaiming	

implied	warranties	was]	not	part	of	the	contractual	undertaking	between	the	

parties.”		The	court	then	added:	

      The	bottom	line	is	I	understand	counsel	have	agreed	that	although	
      the	 express	 warranty	 is	 in	 evidence	 and	 can	 be	 mentioned,	
      et	cetera,	 the	 status	 of	 the	 express	 warranty	 is	 not	 going	 to	 be	
      argued	 to	 the	 jury.	 	 In	 other	 words,	 the	 only	 warranty	 issues	 and	
      breach	 of	 warranty	 issues	 that	 the	 jury	 is	 going	 to	 be	 asked	 to	
      decide	are	the	two	implied	warranty	counts	.	.	.	.	
	
(Emphasis	added.)		The	court	then	asked	if	any	party	wished	to	add	anything	

further,	and	the	following	exchange	occurred:	

      [Branch	River]:		As	we	discussed	in	chambers,	our	position	is	that	
      [as]	 a	 matter	 of	 law,	 that	 the	 Plaintiff’s	 .	 .	 .	 acceptance	 was	
      irrelevant	 to	 the	 validity	 of	 the	 warranty,	 the	 application	 of	 the	
      warranty	to	this	case.		Further,	it	was	the	Plaintiff	.	.	.	that	actually	
      demanded	 that	 the	 warranty	 be	 reinstated	 and	 then	 we	 .	 .	 .	
      accepted	 that	 demand	 and	 did,	 in	 fact,	 comply	 with	 the	 request.		
      Under	those	circumstances	.	.	.	we	take	the	position	that	Arundel	
                                                                                              7	

    Valley’s	again	accepting	it	is	not	necessary.		And	I	understand	the	
    [c]ourt’s	position.	
    	
    [Court]:	So	it’s	pretty	clear	to	me	that	to	the	extent	there	are	any	
    factual	 issues	 about	 the	 status	 of	 the	 reinstatement,	 the	 parties	
    are	not	asking	the	jury	to	decide	those	issues.		Those	are	left	for	
    the	[c]ourt	to	decide.		And	I’m	not	suggesting	there	are	any	factual	
    issues.		[Branch	River]	may	be	correct,	that	this	is	a	straight	legal	
    issue.	 	 But	 just	 so	 we’re	 all	 on	 the	 same	 page,	 that’s	 my	
    understanding,	is	that—and	I’ll	put	it	this	way.		Any	and	all	issues,	
    legal	or	factual	about	the	effect	of	the	disclaimer	and	the	status	of	
    the	 disclaimer	 are	 being	 left	 for	 the	 [c]ourt	 to	 decide.	 	 Is	 that	
    Plaintiff’s	understanding	.	.	.	?	
    	
    [Arundel	Valley]:		Yes,	Your	Honor.	
    	
    [Court]:		And	Defendant’s?	
    	
    [Branch	River]:		Yes.	
    	
(Emphasis	added.)		Neither	party	raised	the	disclaimer	issue	again	at	trial.	

	       [¶9]	 	 After	 receiving	 instructions	 on	 the	 two	 implied	 warranty	 claims,	

the	jury	deliberated	and	returned	a	verdict	in	favor	of	Arundel	Valley,	and	the	

court	entered	a	judgment	on	the	verdict	on	July	13,	2015.6			

	       [¶10]	 	 Two	 weeks	 later,	 pursuant	 to	 M.R.	 Civ.	 P.	 59(a),	 Branch	 River	

moved	 for	 a	 new	 trial	 on	 multiple	 grounds,	 including	 that	 (1)	 it	 had	 been	

“ambush[ed]”	 by	 DeStefano’s	 trial	 testimony	 regarding	 defects	 inside	 each	

panel	and	(2)	the	court	erroneously	decided	that	Branch	River	had	voided	the	

    6		The	jury	awarded	Arundel	Valley	over	$1,000,000	in	damages,	but	the	award	was	reduced	by	

the	amount	received	from	the	settling	defendants,	resulting	in	a	judgment	of	$660,080.40.	
   	
8	

express	warranty	containing	the	disclaimer	of	implied	warranties.7		The	court	

denied	 Branch	 River’s	 motion,	 concluding	 that	 none	 of	 its	 challenges	

warranted	 a	 new	 trial.	 	 On	 the	 disclaimer	 issue,	 the	 court	 concluded	 that	

“Branch	 River	 was	 not	 entitled	 to	 judgment	 on	 the	 validity	 of	 its	 purported	

disclaimer	of	implied	warranties,	and	its	failure	to	request	jury	instructions	to	

guide	 the	 jury’s	 decision	 on	 whether	 Arundel	 Valley’s	 purchase	 of	 the	 roof	

panels	was	subject	to	the	disclaimer	does	not	justify	overturning	the	verdict.”		

The	 court	 also	 stated,	 “[W]hether	 Branch	 River’s	 disclaimer	 of	 implied	

warranties	 was	 valid	 as	 to	 Arundel	 Valley	 was,	 at	 least	 in	 part,	 a	 question	 of	

fact.		The	jury	could	have	been	duly	instructed	on	this	issue,	but	Branch	River	

did	not	request	any	such	instructions.”		Branch	River	timely	appealed	from	the	

denial	of	its	motion	for	a	new	trial.	

                                          II.		DISCUSSION	

A.	      Unfair	Surprise	

	        [¶11]		Branch	River	contends	that	the	court	erred	by	denying	its	motion	

for	 a	 new	 trial	 because	 DeStefano’s	 trial	 testimony	 regarding	 the	

manufacturing	 defect	 that	 caused	 problems	 inside	 each	 panel	 “constituted	

unfair	surprise.”		“Because	the	trial	court	is	in	the	best	position	to	assess	the	

     7		Branch	River	does	not	challenge	the	court’s	decision	that	other	grounds	asserted	in	the	motion	

did	not	warrant	a	new	trial.	
                                                                                           9	

jury’s	reactions	and	motivations,	we	review	its	decision	to	deny	a	motion	for	

.	.	.	 a	 new	 trial	 deferentially.”	 	 Seabury-Peterson	 v.	 Jhamb,	 2011 ME 35,	 ¶	 14,	

15 A.3d 746;	see	State	v.	Daluz,	2016 ME 102,	¶	46,	143 A.3d 800 (noting	that	

such	review	is	deferential	based	on	“the	trial	court’s	unique	ability	to	view	the	

fairness	of	the	proceedings”).		We	therefore	review	the	denial	of	a	motion	for	a	

new	 trial	 for	 a	 “clear	 and	 manifest	 abuse	 of	 discretion.”	 	 Seabury-Peterson,	

2011 ME 35,	¶	14,	15 A.3d 746 (quotation	marks	omitted).	

	      [¶12]	 	 The	 trial	 court	 determined	 that	 Branch	 River	 did	 not	 object	 to	

DeStefano’s	 testimony	 at	 trial;	 that,	 if	 Branch	 River	 had	 objected,	 the	 court	

could	have	taken	steps	short	of	ordering	a	new	trial	to	cure	any	problem;	and	

that,	 in	 any	 event,	 no	 curative	 action	 would	 have	 been	 necessary	 because	

Branch	River	“was	on	notice	of	the	substance	of	the	testimony	at	issue.”		These	

determinations	are	supported	by	the	record.		Although	there	may	have	been	

some	 confusion	 among	 the	 parties’	 lawyers	 regarding	 the	 different	 types	 of	

manufacturing	defects	about	which	DeStefano	would	testify,	the	trial	court	did	

not	err	by	concluding	that	the	record	of	pretrial	proceedings	did	not	support	

Branch	 River’s	 contention	 that	 the	 substance	 of	 DeStefano’s	 testimony	

represented	an	intentional	or	unfair	surprise.		Under	these	circumstances,	we	

cannot	conclude	that	the	trial	court	abused	its	discretion	when	it	decided	that	
10	

Branch	 River’s	 argument	 regarding	 DeStefano’s	 testimony	 was,	 first,	

unpreserved;	 and	 second,	 unpersuasive	 as	 a	 ground	 for	 ordering	 a	 new	 trial	

pursuant	 to	 M.R.	 Civ.	 P.	 59(a).	 	 We	 therefore	 do	 not	 disturb	 the	 trial	 court’s	

decision	on	that	issue.	

B.	    Disclaimer	of	Implied	Warranties	

	      [¶13]	 	 If	 Branch	 River	 effectively	 disclaimed	 all	 implied	 warranties,	

either	 through	 a	 “standard”	 warranty	 with	 disclaimers	 that	 was	 part	 of	 the	

parties’	 initial	 contract,	 or	 through	 the	 “express”	 warranty	 identified	 as	

Exhibit	21,	it	could	not,	as	a	matter	of	law,	be	held	liable	on	the	two	claims	at	

issue	at	trial:	breach	of	the	implied	warranty	of	merchantability	and	breach	of	

the	 implied	 warranty	 of	 fitness	 for	 a	 particular	 purpose.	 	 See	 11	 M.R.S.	

§§	2-314,	2-315,	2-316	(2015).		Branch	River	argues	that	the	court	withdrew	

from	the	jury	the	issue	of	whether	there	was	an	effective	disclaimer	of	implied	

warranties,	 failed	 to	 rule	 on	 that	 issue	 before	 the	 case	 went	 to	 the	 jury,	 and	

then	 denied	 the	 motion	 for	 a	 new	 trial	 because	 Branch	 River	 had	 failed	 to	

move	to	instruct	the	jury	on	that	issue.	

	      [¶14]		Although	the	transcript	is	not	entirely	clear,	we	conclude	that	the	

court	 gave	 the	 parties	 the	 impression	 that	 it,	 not	 the	 jury,	 would	 decide	 any	

legal	 or	 factual	 issues	 concerning	 the	 purported	 disclaimer	 of	 implied	
                                                                                          11	

warranties.		Contrary	to	Branch	River’s	contention,	however,	the	appropriate	

relief	in	this	case	is	not	to	order	a	new	trial—Branch	River	asked	the	court	to	

make	a	ruling	on	the	disclaimer	issue	on	the	evidence	already	before	it,	and	a	

ruling	 on	 the	 purported	 disclaimer	 does	 not	 require	 a	 new	 jury	 verdict.	 	 We	

therefore	vacate	the	judgment	as	to	Count	XI	(breach	of	implied	warranty	of	

merchantability)	 and	 Count	 XII	 (breach	 of	 implied	 warranty	 of	 fitness	 for	 a	

particular	 purpose)	 and	 remand	 the	 case	 to	 the	 trial	 court	 to	 rule	 on	 “[a]ny	

and	 all	 issues,	 legal	 or	 factual[,]	 about	 the	 effect	 of	 the	 disclaimer	 and	 the	

status	of	the	disclaimer,”	which	is	the	ruling	the	court	gave	the	impression	it	

would	 make.	 	 The	 court	 may,	 in	 its	 discretion,	 entertain	 further	 argument	

from	the	parties	on	this	issue.	

	      [¶15]	 	 If	 the	 court	 rules,	 based	 on	 the	 evidence	 presented	 at	 trial,	 that	

Branch	River	made	no	legally	operative	disclaimer	of	implied	warranties,	the	

court	 must	 re-enter	 the	 judgment	 on	 the	 jury’s	 verdict	 in	 Arundel	 Valley’s	

favor.		If,	on	the	other	hand,	the	court	rules	that	Branch	River	did	disclaim	the	

implied	 warranties	 of	 merchantability	 and	 fitness	 for	 a	 particular	 purpose—

by	 way	 of	 an	 express	 warranty	 or	 otherwise—it	 must	 enter	 a	 judgment	 in	

Branch	River’s	favor	on	the	two	implied	warranty	counts.	
12	

         The	entry	is:	

                            Judgment	 vacated	 as	 to	 Count	 XI	 (breach	 of	
                            implied	warranty	of	merchantability)	and	Count	
                            XII	 (breach	 of	 implied	 warranty	 of	 fitness	 for	 a	
                            particular	 purpose).	 	 Remanded	 for	 further	
                            proceedings	 consistent	 with	 this	 opinion.		
                            Judgment	affirmed	in	all	other	respects.	
	
	     	     	       	   	       	
	
On	the	briefs:	
	
      Catherine	R.	Connors,	Esq.,	and	Michael	J.	Daly,	Esq.,	Pierce	
      Atwood	 LLP,	 Portland,	 for	 appellant	 Branch	 River	 Plastics,	
      Inc.	
      	
      Timothy	J.	Bryant,	Esq.,	and	Jonathan	G.	Mermin,	Esq.,	Preti	
      Flaherty	 Beliveau	 &	 Pachios,	 LLP,	 Portland,	 for	 appellee	
      Arundel	Valley,	LLC	
	
	
At	oral	argument:	
	
      Catherine	 R.	 Connors,	 Esq.,	 for	 appellant	 Branch	 River	
      Plastics,	Inc.	
      	
      Timothy	J.	Bryant,	Esq.,	for	appellee	Arundel	Valley,	LLC	
	
	
	
Business	and	Consumer	Docket	docket	number	CV-2013-15	
FOR	CLERK	REFERENCE	ONLY