Opinion
No. A03-625.
Filed February 3, 2004.
Appeal from the District Court, Hennepin County, File No. Ct 02-8813.
George W. Soule, Wayne D. Struble, Bard D. Borkon, Ryan L. Nilsen, Bowman and Brooke, Minneapolis, Mn (for appellant).
Michael S. Kreidler, Leo I. Brisbois, Stich, Angell, Kreidler Dodge, Pa, Minneapolis, Mn (for respondent).
Considered and decided by Anderson, Presiding Judge, Klaphake, Judge, and Crippen, Judge.
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2002).
UNPUBLISHED OPINION
This appeal disputes the trial court's summary judgment that conduct of JJJ Specialty Company, a broker of materials, did not cause or contribute to its failure to provide treated wood products, as required by their contract, to plaintiff Scherer Brothers Lumber Company, which manufactures window products. Scherer Brothers's claim against JJJ Specialty is advanced by appellant Bright Wood Corporation, the wood-products provider who paid a breach-of-contract claim made by Scherer Brothers partly in return for an assignment of the remainder of Scherer Brothers' claims against the broker. Because we conclude that there are genuine issues of material fact on the causation issue, we reverse and remand for trial proceedings.
FACTS
Scherer Brothers manufactures windows, using materials provided by various suppliers. Respondent JJJ Specialty is a broker that provides materials, including wood sash components, to Scherer Brothers. Bright Wood is a wood processor that provided sash components to JJJ Specialty beginning in September 1996.
Although JJJ Specialty's contract with Scherer Brothers specified that JJJ Specialty was to provide treated wood components, it was later discovered that the materials furnished to Scherer Brothers in late 1996 and 1997 were untreated. In late 1997 or early 1998, Scherer Brothers began learning that its windows were prematurely rotting, deteriorating, and developing mold. Bright Wood paid on Scherer Brothers' subsequent claim pursuant to a Pierringer release that assigned to Bright Wood the claims of Scherer against JJJ Specialty.
Bright Wood asserted claims in these proceedings that JJJ Specialty contributed to Scherer Brothers' losses by (1) using purchase orders that did not specify treatment during the period when untreated products were furnished, (2) failing to correct Bright Wood's order acknowledgements that omitted reference to treatment and instructed that orders would be manufactured according to the acknowledgments' specifications, and (3) failing to alert Bright Wood early in the course of production of the non-treated products that invoices covering the components omitted reference to treated materials, although other orders in the invoice specified that goods furnished were to be treated.
The trial court concluded that "none of JJJ Specialty's actions, independent of Bright Wood's actions as their agent, caused the breaches of contract and warranty." Similarly, the court observed that JJJ Specialty's failure to specify treatment in the purchase order was immaterial. The court's reasoning was premised on undisputed evidence that JJJ Specialty orally communicated to Bright Wood that the components were to be treated and that the treatment did not occur because Carl Lindgren, Bright Wood's agent who dealt with JJJ Specialty, failed to instruct staff in Bright Wood's mill that the components should be treated.
The trial court also observed that the execution of the Pierringer release extinguished any of Scherer Brothers' claims against JJJ Specialty that were premised on the theory that JJJ Specialty was vicariously liable for conduct of Bright Wood. The trial court did not, in fact, determine that JJJ Specialty had any vicarious liability but merely observed that if that theory were advanced, it would fail. Bright Wood rests its case on the alleged actions that JJJ Specialty itself committed that would constitute a breach of its contract and warranties and does not advance the theory of any vicarious liability of JJJ Specialty. The court did not suggest that the absence of vicarious liability in any way diminished the merits of Bright Wood's claims regarding actual breaches committed by JJJ Specialty. Rather, as to those actions, the court dismissed the case based on its conclusion that no actions by JJJ Specialty caused the breach.
DECISION
Summary judgment is appropriate when there are no genuine issues of material fact and a party is entitled to judgment as a matter of law. Minn. R. Civ. P. 56.03. On appeal from summary judgment, we are to ask whether there are any genuine issues of material fact and whether the trial court erred in its application of the law. State by Cooper v. French, 460 N.W.2d 2, 4 (Minn. 1990). In doing so, we must view the evidence in the light most favorable to the nonmoving party by resolving all factual inferences and doubts against the moving party. Funchess v. Cecil Newman Corp. 632 N.W.2d 666, 672 (Minn. 2001). There is no genuine issue of material fact for trial when the nonmoving party presents evidence that merely creates a metaphysical doubt as to a factual issue and that is not sufficiently probative with respect to an essential element of the nonmoving party's case to permit reasonable persons to draw different conclusions. DLH, Inc. v. Russ, 566 N.W.2d 60, 71 (Minn. 1997).
Appellant maintains that Bright Wood and JJJ Specialty had a shared responsibility to sell "treated" components and that the trial court "ended its analysis too early" by failing to determine whether a reasonable jury could find that JJJ Specialty's actions also constituted breaches of contract and warranty resulting in Scherer Brothers' damages. Causation is a fact issue that is left for the jury in all but unusual cases where the issue may be decided as a matter of law because reasonable minds can arrive at only one conclusion. Gustafson v. Chestnut, 515 N.W.2d 114, 116 (Minn. App. 1994) (citation omitted). Appellant argues that Bright Wood's conduct is not dispositive of whether a reasonable jury could find that JJJ Specialty also caused or contributed to Scherer Brothers' damages.
The trial court concluded that fault rested exclusively on Bright Wood because Lindgren took responsibility for informing Mike Dougherty, Bright Wood's mill-order writer, that treatment was required, and there is no evidence that Dougherty was informed of the requirement. But it is undisputed that Lindgren furnished Dougherty with a purchase order submitted by JJJ Specialty that was silent on treatment. According to the evidence, Dougherty subsequently prepared the mill order that omitted reference to treatment and directly led to the production of untreated components. Under these circumstances, there is adequate evidence to permit a jury to consider whether the absence of the specification of treatment in the purchase order contributed to the preparation of the incorrect mill order.
Although it is unclear when the order acknowledgments were sent in the course of dealings between JJJ Specialty and Bright Wood, the documents imply, on their faces, that production has not yet begun, stating "your material will be produced per details and specifications above. Read carefully and advise by phone promptly of any discrepancies." There is adequate evidence under these circumstances to permit a jury to consider whether JJJ Specialty's failure to respond to the order acknowledgment contributed to the breaches of contract and warranties resulting in Scherer Brothers' losses.
Finally, there is evidence from which it might be found that Bright Wood's invoices were sent approximately two months after the purchase orders were received and approximately 40 days after shipment of the goods. Under these circumstances, there is evidence permitting a jury to conclude that a reporting of error in an early invoice may have had a material impact on production of the components in 1997.
Respondent JJJ Specialty asserts that none of its failures constitutes a breach of contract or warranty because there is no evidence of a specific provision in its contract with Scherer Brothers that called on JJJ Specialty to fulfill specific duties regarding the purchase orders, order acknowledgements, and invoices. But it is evident in the record that JJJ Specialty assumed general responsibility to furnish treated products, and that responsibility could be found to include specific duties in handling documents. In fact, there is evidence in the record that also would permit a jury to find that JJJ Specialty had a general duty to be zealous in assuring that treated products would be furnished.
There is additional, specific evidence permitting findings that the contract called for different performance by JJJ Specialty on each of the three documents in question — the purchase orders, the order acknowledgements, and the invoices. As to the purchase order, evidence indicates that JJJ Specialty deviated from the parties' past practice by failing to specify "treatment" on the purchase order for the wood sash components. Also, Bright Wood's order acknowledgments specifically caution the recipient to "read carefully" and to "advise by phone promptly of any discrepancies." Finally, regarding the invoice, the absence of treatment for the components is in patent contradiction to the other orders in the invoice that specify treatment. All of this evidence is sufficient to permit a jury determination that JJJ Specialty had a duty under its contract to specify the need for treated materials when it dealt with purchase orders, order acknowledgements, and invoices. Reversed.
Respondent JJJ Specialty also claims that its alleged wrongdoing is a claim "sounding in tort," a theory of recovery that would be inappropriate in connection with the furnishing of goods. But JJJ Specialty has failed to produce authority, and there is none, to suggest that conduct constituting a breach is less actionable under a contract theory of law because it occurs as a result of obligor's negligence rather than his intentional acts.