Filed: Mar. 04, 1997
Latest Update: Mar. 02, 2020
Summary: _ No. 96-2099 _ Midwest Printing, Inc., * * Plaintiff/Appellant, * * Appeals from the United States v. * District Court for the * Eastern District of Missouri * AM International, Inc., * * Defendant/Appellee. * _ Submitted: January 15, 1997 Filed: March 4, 1997 _ Before BOWMAN and MURPHY, Circuit Judges, and JONES,1 District Judge. _ JONES, District Judge. Mid-West Printing, Inc. ("Mid-West") purchased an Eagle 5220 printing press from AM International, Inc. ("AM"), and brought this action seeki
Summary: _ No. 96-2099 _ Midwest Printing, Inc., * * Plaintiff/Appellant, * * Appeals from the United States v. * District Court for the * Eastern District of Missouri * AM International, Inc., * * Defendant/Appellee. * _ Submitted: January 15, 1997 Filed: March 4, 1997 _ Before BOWMAN and MURPHY, Circuit Judges, and JONES,1 District Judge. _ JONES, District Judge. Mid-West Printing, Inc. ("Mid-West") purchased an Eagle 5220 printing press from AM International, Inc. ("AM"), and brought this action seekin..
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No. 96-2099
___________
Midwest Printing, Inc., *
*
Plaintiff/Appellant, *
* Appeals from the United States
v. * District Court for the
* Eastern District of Missouri
*
AM International, Inc., *
*
Defendant/Appellee. *
___________
Submitted: January 15, 1997
Filed: March 4, 1997
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Before BOWMAN and MURPHY, Circuit Judges, and JONES,1 District Judge.
___________
JONES, District Judge.
Mid-West Printing, Inc. ("Mid-West") purchased an Eagle 5220
printing press from AM International, Inc. ("AM"), and brought this action
seeking to rescind the sale, alleging that it was fraudulently induced to
enter into the written sales agreement. Mid-West also alleges that there
were breaches of express and implied warranties. The District Court2
granted summary judgment for AM and Mid-West appeals. We affirm.
BACKGROUND
1
The HONORABLE JOHN B. JONES, United States District Judge for
the District of South Dakota, sitting by designation.
The Honorable Edward L. Filippine, United States District
Judge for the Eastern District of Missouri, Eastern Division.
Mid-West alleges that prior to entering into the purchase, AM made
a number of representations through its literature and sales
representatives that the Eagle 5220 would dramatically increase capacity
by producing high-quality two-color jobs in one pass instead of two,
perform in a manner superior to presses of its size, reduce set-up time,
and set new standards for reliability and ease of maintenance. Mid-West
also alleges that AM represented that the Eagle 5220 had more automated
features designed into it than any other press in its class, that each
printing pass would be more productive and profitable, and that AM had full
service that is second to none.
Mid-West was skeptical of purchasing the press based on these
representations, so AM arranged a trip for Mid-West's President and
pressman to go to AM's world headquarters in Chicago to see the Eagle 5220
in operation. This press was a sophisticated machine with electronic
controls and subject to variables such as set up, type and weight of paper,
number of colors, humidity, and operator adjustments. Even though Mid-West
was satisfied with the press after this demonstration, it was still
concerned it might "fall flat on its face" in Mid-West's shop. Mid-West
asserts that its satisfaction was guaranteed and that AM told it that AM
would take back the press if the press would "fall flat on its face."
Mid-West and AM entered into a written sales agreement on December
7, 1990. This agreement provides in bold print on the front that it is
"subject to the Terms and Conditions set forth on the reverse side hereof."
The agreement limits the buyer's remedies to repair or replacement of the
press if it does not perform satisfactorily. Mid-West seeks to avoid these
limitations on the basis that its president did not see the reverse side
of the sheet, and did not get a copy of the sales agreement.
AM delivered the press to Mid-West on March 15, 1991, but AM
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was unsuccessful in getting the press to perform to Mid-West's
satisfaction. Mid-West started keeping a log of its problems with the
press on September 16, 1991 and maintained the log until October 23, 1994.
Pursuant to the sales agreement, AM offered to replace the press with
another Eagle 5220 press, but Mid-West refused the offer. Mid-West's
attorney wrote AM on May 15, 1992 asking them to take back the press,
refusing AM's offer to replace the press, and demanding monetary damages.
DISCUSSION
The district court's order granting summary judgment is reviewed de
novo. United States v. Tharp, 973 F.2d 619, 620 (8th Cir. 1992). In
reviewing a grant of summary judgment, the Court considers whether the
record, when viewed in the light most favorable to the non-moving party,
shows no genuine issue of material fact and that the moving party is
entitled to judgment as a matter of law. Walsh v. United States,
31 F.3d
696, 698 (8th Cir. 1994). The non-moving party is given the benefit of all
reasonable inferences that can be drawn from the evidence. Adkison v. G.D.
Searle & Co.,
971 F.2d 132, 134 (8th Cir. 1992).
1. Fraudulent Inducement to Enter the Written Agreement.
Mid-West's basic position is that the written Sales Agreement should
not be enforced in this case because its president did not read the
reference on the front page of the Sales Agreement to the terms and
conditions on the reverse side of the document and was not given a copy of
the Sales Agreement. Mid-West's failure to carefully consider what was
signed, however, cannot be translated into a basis of liability against AM.
Under Missouri law, "a person who has an opportunity to read a document but
signs it without doing so is held to have knowledge of the document's
contents, absent a showing of fraud." United States for Use of Bussen
Quarries, Inc. v. Thomas, 938 F.2d 831, 833 (8th Cir. 1991)
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(citing Mercantile Trust Co. v. Carp, 648 S.W.2d 920, 924 (Mo. Ct. App.
1983)).
Missouri recognizes a cause of action for fraudulent inducement. See
R.W. Murray Co. v. Shatterproof Glass Corp., 697 F.2d 818, 830 (8th Cir.
1983). To withstand AM's summary judgment motion, Mid-West must produce
sufficient evidence to satisfy each of the following elements of a fraud
claim: (1) a representation, (2) its falsity, (3) its materiality, (4) the
speaker's knowledge of its falsity or ignorance of its truth, (5) the
speaker's intent that the representation should be acted upon by the hearer
and in the manner reasonably contemplated, (6) the hearer's ignorance of
the falsity of the representation, (7) the hearer's reliance on the
representation being true, (8) the hearer's right to rely thereon, and (9)
the hearer's consequent and proximate injury. See Emerick v. Mutual Ben.
Life Ins. Co.,
756 S.W.2d 513, 519 (Mo. 1988). The absence of any element
is fatal to a fraud claim.
Id. at 519.
Mid-West does not allege that AM ever represented that the terms of
the written agreement would not be enforced. See Pinken v. Frank, 704 F.2d
1019, 1022 (8th Cir. 1983). Mid-West does claim that AM represented that
if the press fell flat on its face, AM would take the press back. Mid-West
does not assert that AM ever told it that AM would not enforce the repair
or replace provision of the sales agreement but would instead take the
press back and give it a refund of the purchase price.
Furthermore, it is clear that the representations upon which Mid-West
bases its fraudulent inducement claim constitute mere expressions of
opinion or "puffing" which are not actionable representations. See Rich
v. Eastman Kodak Co., 443 F. Supp. 32, 37 (E.D. Mo. 1977), aff'd,
583 F.2d
435 (8th Cir. 1978); McAlpine Co. v. Graham,
320 S.W.2d 951, 955 (Mo. Ct.
App. 1959). Representations such as these that compare the efficiency,
economy or quality of one product to other products may not form the basis
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of a cause of action in fraud. See Rich, 443 F. Supp. at 38 (citing Crown
Cork & Seal Co. v. Hires Bottling Co. of Chicago,
371 F.2d 256 (7th Cir.
1967)).
Mid-West cannot justifiably rely on mere expressions of opinion or
"puffing." See Emerick, 756 S.W.2d at 519 (citing Dillard v. Earnhart,
457
S.W.2d 666 (Mo. 1970) (citing Restatement of Torts § 530 cmts. a and c)).
In any event, Mid-West saw the Eagle 5220 press in operation and was able
to judge for itself the capacity and quality of the printing done by the
press.
Moreover, a "tort action does not arise from a breach of contract
unless the basis of the tort is a duty that is 'superimposed by operation
of law as an incident of the relationship between the parties rather than
the contract.'" Pandjiris, Inc. v. Sunshine Stainless Tank & Equip. Co.,
655 F. Supp. 473, 474 (E.D. Mo. 1987) (quoting General Dynamics Corp. v.
Selb Mfg. Co.,
481 F.2d 1204, 1216 (8th Cir. 1973)). In Pandjiris, a buyer
of certain equipment filed a counterclaim based theories of fraudulent
misrepresentation and breach of warranty against the equipment
seller. 655
F. Supp. at 474. The district court found that the buyer's allegations of
fraudulent misrepresentation "constitutes no more than a recasting of its
claim for breach of contract as a tort."
Id. The court granted summary
judgment to the seller because the seller had no duty, aside from that duty
established in the contract, to deliver functional equipment to the buyer.
Id. Similarly, AM had no duty to Mid-West other than that which arose
pursuant to the Sales Agreement.
Therefore, the trial court's determination that Mid-West did not
produce evidence which created a jury issue on fraudulent inducement and
thereby enable it to avoid the terms of the written sales agreement is
correct and will be affirmed.
2. Breach of Express and Implied Warranties under the Sales
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Agreement.
Because Mid-West did not establish a fraudulent inducement claim, it
is bound by the terms of the written Sales Agreement. The Sales Agreement
limits the warranty on the press to "defects in material and workmanship"
and explicitly disclaims "ALL OTHER WARRANTIES OF ANY KIND WHATSOEVER,
EXPRESS IMPLIED OR STATUTORY." In particular, the Sales Agreement provides
that "ALL IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE WHICH EXCEED THE AFORESAID OBLIGATIONS ARE HEREBY
DISCLAIMED BY SELLER AND EXCLUDED FROM THIS AGREEMENT." Furthermore, the
Sales Agreement specifically limits the remedies available to the purchaser
under the warranty "solely to the repair or, at Seller's option,
replacement of equipment or parts which Seller determines to be defective."
Under Missouri law, the disclaimer of warranties in a contract document is
effective to bar a claim based on express warranty. See Karr-Bick Kitchens
& Bath, Inc. v. Gemini Coatings, Inc., 932 S.W.2d 877, 879 (Mo. Ct. App.
1996); Clevenger and Wright Co. v. A.O. Smith Harvestore Products, Inc.,
625 S.W.2d 906, 909 (Mo. Ct. App. 1981). As to any implied warranties, the
language in the Sales Agreement complies with the requirements of Mo. Rev.
Stat. § 400.2-316(2) (that is, it was in writing, conspicuous, and mentions
merchantability) and thus effectively disclaims all implied warranties.
See
Karr-Bick, 932 S.W.2d at 879. Because its claims for breach of express
warranty and breach of implied warranty are barred by the terms of the
Sales Agreement, the trial court's decision granting AM summary judgment
on the breach of warranty claims is correct and will be affirmed.
3. Whether Remedies Failed of Their Essential Purpose.
Mid-West's final position was that the remedies set out on the
reverse side of the Sales Agreement failed of their essential purposes.
Missouri law limits the rights of parties to contractually limit available
remedies "[w]here circumstances cause
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an exclusive or limited remedy to fail of its essential purpose." Mo. Rev.
Stat. § 400.2-719(1)(b). If Mid-West had accepted AM's offer to replace
the Eagle press, and the replacement press had the same deficiencies that
Mid-West complains of in the original press, this position would have
validity. However, we will never know whether the replacement press
offered by AM would have complied with the warranties made. Mid-West's
refusal to accept AM's offer to replace the press precludes Mid-West from
recovering on this theory. Cf., e.g., Transport Corp. of America, Inc. v.
International Bus. Machs., Inc., 30 F.3d 953, 959 (8th Cir. 1994) (applying
Minnesota law) (holding that remedy of repair and service did not fail of
its essential purpose when seller provided warranty service on the product
and accomplished repair).
The Court has carefully considered Mid-West's other arguments and
finds them to be without merit.
CONCLUSION
The trial court's decision granting summary judgment to AM is
affirmed in all respects.
A true copy.
Attest:
CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.
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