In the

United States Court of Appeals
               For the Seventh Circuit

No. 08-2502

S TEVE C ARLISLE, JOHN B USZKIEWICZ, and
T EAM E XCAVATING, INC., individually and
d/b/a Klear Kut Excavating, and d/b/a Klear
Kut Excavating, Inc.,
                                      Plaintiffs-Appellants,
                             v.

D EERE & C OMPANY, d/b/a
Deere Power Systems Group,
                                               Defendant-Appellee.


             Appeal from the United States District Court
      for the Northern District of Indiana, South Bend Division.
              No. 06 CV 00710—James T. Moody, Judge.


        A RGUED M AY 4, 2009—D ECIDED A UGUST 7, 2009




 Before K ANNE and E VANS, Circuit Judges, and D OW,
District Judge.Œ



Œ
  Honorable Robert M. Dow, Jr., United States District Judge for
the Northern District of Illinois, is sitting by designation.
2                                               No. 08-2502

  K ANNE, Circuit Judge. The Beast, manufactured by
Bandit Industries, Inc., is a commercial-grade tree grinder
that weighs approximately 60,000 pounds and is the size
of a semi-trailer. The Beast feeds on logs up to thirty-six
inches in diameter, reducing them to mulch at a rate of
up to one acre’s clearance per day. In 2002, the plaintiffs,
Steve Carlisle and John Buszkiewicz, purchased a Beast,
equipped with a 12.5-liter John Deere engine, for use in
their landscaping and excavating business. Carlisle and
Buszkiewicz soon discovered, however, that their Beast
lacked the muscle befitting its name. The machine failed
to perform as advertised, and the two men sued John
Deere, seeking payment under the terms of an engine
warranty. The district court granted summary judgment
in Deere’s favor, a decision that we now affirm.


                     I. B ACKGROUND
   The Beast in this case was manufactured in 1999 and
purchased by a third party, Kramer Tree Specialists. At
its birth, the Beast contained a different engine than the
one in the present dispute. In May 2000, Kramer Tree
replaced the Beast’s original engine with an engine manu-
factured by Deere; sold to a distributor, Superior Diesel;
and installed in the Beast by West Side Tractor. Kramer
Tree felt that the Beast underperformed with the new
engine and later traded it to Vermeer Midwest, an indus-
trial equipment supplier.
  Enter Carlisle and Buszkiewicz. Together, the two men
operated an excavating business under a variety of titles
and organizational structures, including Klear Kut Mills,
No. 08-2502                                                   3

Inc.; Klear Kut Excavating, Inc.; and Team Excavating, Inc.1
In June 2002, they purchased the Beast from Vermeer
for $125,000, intending to grind the trees and brush they
cleared in their business operations and sell the
resulting mulch for profit.
  According to Carlisle and Buszkiewicz, the Beast
underperformed from the outset. They complained that
the engine lacked power, ran rough, overheated, and
bogged down under a load. They were forced to operate
the machine much slower than they expected, and jobs
that the men thought would take weeks took months. As
a result of the Beast’s poor bite, the duo claims to have
suffered significant financial loss.
  In hopes of improving the Beast’s performance, Carlisle
and Buszkiewicz, acting over a period of years, sought
technical support from several industrial equipment
companies, including Bandit, Vermeer, and West Side
Tractor. In late 2004 or early 2005, Buszkiewicz spoke on
the telephone with an employee at Superior Diesel, the
engine distributor that had sold the Beast’s replacement
engine in 2000. The Superior Diesel employee instructed
Buszkiewicz to inspect the Performance Programming
Connector, or PPC, located in the Beast’s control panel.
  The PPC, which Deere also manufactures but sells
separately from its engines, is the Beast’s brain. The way


1
   Notwithstanding the use of “Inc.” in their respective titles,
it appears that Klear Kut Mills, Inc. and Klear Kut Excavating,
Inc. were never incorporated under the laws of any state.
According to Carlisle, however, Team Excavating was in-
corporated in the state of Indiana.
4                                              No. 08-2502

the PPC is wired dictates the engine’s performance
by regulating both the engine’s horsepower and its rota-
tions per minute. A PPC is configured by inserting or
omitting wires, as appropriate, into a ten-pin connection
board that features five adjacent terminal pairs, arranged
roughly as follows:



                          A   K

                          B    J

                          C   H

                          D   G

                          E    F



  Wires in the A-K and B-J terminal pairs determine the
engine’s horsepower. Similarly, and importantly for this
case, the presence or absence of a wire in the E-F terminal
pair determines the engine’s maximum rotations per
minute. If a wire is installed in the E-F terminal pair,
the engine activates its isochronous governor, which
limits the engine to 2,100 rotations per minute. Without a
wire in the E-F terminal pair, the engine is allowed to
exceed 2,100 rotations per minute.
  Upon investigating the Beast’s PPC, Buszkiewicz dis-
covered that a wire was installed in the E-F terminal pair.
At Superior Diesel’s instruction, Buszkiewicz cut the
wire. The effect, according to Carlisle and Buszkiewicz,
No. 08-2502                                                  5

was immediate. The Beast roared to life. Carlisle stated
in a deposition that the engine sounded “meaner,” and
Buszkiewicz said that they knew they “had a total [sic]
different machine.” This discovery led the men to believe
that the engine, as originally wired, had been defective.
They now claim that Deere’s inability to identify and
correct this defect was a breach of the engine’s warranty.
  When Carlisle and Buszkiewicz purchased the Beast in
2002, they also inherited the remainder of an extended
warranty on the engine, issued by Deere and originally
purchased by Kramer Tree in September 2001. The war-
ranty covered certain engine components until Septem-
ber 7, 2003, or 5,000 hours of use, whichever came first.
When Carlisle and Buszkiewicz 2 assumed the warranty
on June 2, 2002, the Beast registered 2,010 hours of use,
meaning that the warranty extended for approximately
another 3,000 hours or another fifteen months from
the date of purchase.
  The warranty, which applied “to the engine and to
components and accessories sold by John Deere which
bear its name,” pledged that “[a]ll parts of a new John
Deere engine which is subject to this Extended Warranty,



2
  The warranty was actually transferred from Kramer Tree to
Klear Kut Mills, Inc. As one theory on appeal, Deere argues
that Klear Kut, having never been incorporated under the law,
was a de facto partnership and, as such, the real party in
interest to bring this lawsuit, not Carlisle and Buszkiewicz as
individuals. See Fed. R. Civ. P. 17(a)(1). Because we decide
the case on other grounds, we need not reach this argument.
6                                               No. 08-2502

and which, as delivered to the original retail purchaser,
are defective in materials or workmanship, will be
repaired or replaced, as John Deere elects, without charge.”
The warranty contained numerous exceptions to its
coverage, including “components or accessories which
are not furnished or installed by John Deere” and “[c]on-
sequences of . . . improper application, installation, or
storage of the engine.”
  On September 5, 2005, the two men, both citizens of
Indiana, filed in the circuit court of LaPorte County,
Indiana, a one-count complaint against Deere, a corpora-
tion registered in Delaware with its principal place of
business in Illinois, alleging breach of warranty. Deere
removed the case to the Northern District of Indiana,
where it filed a motion for summary judgment. In an
order dated May 22, 2008, the district court granted
summary judgment in Deere’s favor. It is this decision
that Carlisle and Buszkiewicz now appeal.


                       II. A NALYSIS
  We review de novo the district court’s decision to grant
summary judgment. See Priebe v. Autobarn, Ltd., 

, 587 (7th Cir. 2001). Summary judgment in Deere’s
favor is appropriate if, after reviewing the record as a
whole and drawing all reasonable inferences in favor of
Carlisle and Buszkiewicz, there remains no genuine
issue as to any material fact. See Fed. R. Civ. P. 56(c);
Celotex Corp. v. Catrett, 

, 322 (1986). In other
words, if, on the evidence provided, no reasonable juror
could return a verdict in favor of Carlisle and Buszkiewicz,
No. 08-2502                                                      7

summary judgment against them is warranted. Anderson
v. Liberty Lobby, Inc., 

, 248 (1986).
  When a case is removed from state court based on the
parties’ diverse citizenship, the forum state’s choice-of-law
rules determine the applicable substantive law. Rockwell
Automation, Inc. v. Nat’l Union Fire Ins. Co., 

,
759 (7th Cir. 2008). As such, we apply Indiana law to
the present dispute. See NUCOR Corp. v. Aceros y Maquilas
de Occidente, S.A. de C.V., 

, 581 (7th Cir. 1994)
(noting that Indiana courts apply the “most intimate
contacts” or “most significant relationship” test to deter-
mine applicable law in contract disputes).
  Although the parties present a variety of arguments on
appeal, the decisive issue in this case is whether the
complaints lodged by Carlisle and Buszkiewicz fall
within the terms of Deere’s express warranty.3 The
portion of Indiana’s Uniform Commercial Code that
deals with express warranties reads: “[A]ny affirmation
of fact or promise made by the seller to the buyer which
relates to the goods . . . creates an express warranty that


3
   Although the plaintiffs raised no such argument, the district
court gave plaintiffs “the benefit of the doubt” and considered
whether, in addition to breaching an express warranty, Deere
had breached an implied warranty. Such benefit of the doubt
is no longer necessary. In their briefs to this court, Carlisle and
Buszkiewicz expressly deny making any implied warranty
claims; instead, they rest their arguments solely on Deere’s
purported breach of its express warranty. We cabin our dis-
cussion accordingly and consider only the scope of Deere’s
written warranty.
8                                                      No. 08-2502

the goods shall conform to the affirmation or promise.”
Ind. Code § 26-1-2-313(1)(a). We conclude that because
Deere cannot breach a promise that it did not make,
summary judgment in its favor was appropriate.4
  The written warranty covers “defective workmanship”
performed by Deere. It excludes, however, “components
or accessories which are not . . . installed by John Deere”
and states that the purchaser is responsible for the con-
sequences of “improper application [or] installation.”
Reading these provisions and ignoring for a moment
other issues such as defectiveness and timeliness, we
see three potential outcomes. First, if the wiring resulted
from Deere’s workmanship, the warranty covers the
plaintiffs’ claim. Second, if the wiring was an example


4
  Notwithstanding our agreement with the district court’s
outcome, we part ways in the rationale that we use to arrive
at our conclusion. See Slaney v. Int’l Amateur Athletic Fed’n,

, 597 (7th Cir. 2001) (noting that an appellate
court may affirm a judgment “on any ground supported by the
record, even if different from the grounds relied upon by the
district court”); see also Rubel v. Pfizer, Inc., 

, 1020
(7th Cir. 2004) (“Appellate courts review judgments, not
opinions.”). The district court dispatched the plaintiffs’ argu-
ments relative to the express warranty after finding that
Deere’s warranty covered only the engine, of which the PPC
was not a part. On appeal, however, Deere concedes that the
district court was mistaken: the PPC is a part of the engine, a
concession we believe wise in light of the warranty’s stated
application “to the engine and to components and accessories
sold by John Deere” (emphasis added). This revelation does
nothing to alter our analysis.
No. 08-2502                                                9

of installation and Deere itself performed that installa-
tion, the warranty covers the plaintiffs’ claim. Finally, if
the wiring was the result of third-party installation, the
plaintiffs’ claim falls outside the warranty. Again, these
are broad conclusions to the gateway question of whether
the plaintiffs’ claim falls within the scope of Deere’s
warranty. Only if Carlisle and Buszkiewicz pass through
this gateway need we consider Deere’s other challenges
to their claim, such as whether the PPC’s wiring was
truly defective or whether the plaintiffs made their
claim within the time contemplated by the warranty.


  A. Was the PPC’s wiring the result of Deere’s “workman-
     ship”?
   The warranty covers Deere engines and components
that are “defective in . . . workmanship.” But we see no
way to interpret “workmanship” to include the PPC’s
wiring. Grant Suhre, who is employed by Deere as a
manager of its field service, stated in an affidavit that
PPCs, which Deere sells and ships separately from its
engines, leave the Deere manufacturing plant “uncon-
figured,” i.e., without wiring in the terminal pairs that
would dictate a particular engine’s ultimate use. The
reason is obvious. Deere’s engines (and, derivatively, its
PPCs) may be used in any number of applications. Deere
does not know a purchaser’s intended use for one of its
engines and therefore leaves the configuration to oth-
ers. Deere’s final product, as it leaves the company’s hands,
is an unconfigured, unwired PPC. This unconfigured PPC
is the end result of, and the conclusion to, Deere’s “work-
10                                              No. 08-2502

manship.” If there were some defect in that product, Deere
would likely be liable under the warranty. What happens
after a PPC leaves Deere’s plant, however, can only be
called “installation.”
   In an attempt to characterize the PPC’s wiring as the
product of Deere’s “workmanship,” Carlisle and
Buszkiewicz cite two cases that deal with that term’s
meaning under Indiana law. See J.M. Foster, Inc. v. Spriggs,

(Ind. Ct. App. 2003); Schultz v. Erie Ins.
Group, 

(Ind. Ct. App. 2001). In J.M. Foster,
Inc., the court stated that “ ‘workmanship’ encompasses
not only the quality of the finished product, but the
manner of construction as determined by the art, skill, or
technique of the 

. The Schultz
court stated that “workmanship” embraces “both ‘process’
and ‘product.’ 

. We have no quarrel
with these definitions. Note, however, that both are tied
to a “product.” Deere’s product, as we just discussed, is
an unconfigured PPC, and against that product the plain-
tiffs have lodged no complaints.
  The plaintiffs’ arguments highlight an important caveat
that the Indiana appellate court discussed in Schultz:
context matters. See 

great extent, the context
of the policy gives meaning to the individual terms.”). As
one’s perspective changes, so does the meaning of terms
such as “workmanship” and “installation.” Consider, for
example, the placement of a battery into vehicle. To the
battery’s manufacturer, its “workmanship” occurs
during the process of creating the battery itself. From that
manufacturer’s perspective, “installation” would be the
No. 08-2502                                              11

process of placing that battery into a particular vehicle,
generally performed by a mechanic. To the mechanic,
however, his “workmanship” is the act of “installation.”
Thus, the same act can be two different things to two
different people or entities, “installation” to one and
“workmanship” to another.
  Applying our analogy to this case, Deere manufacturers
the batteries. It does not install them in the cars. From
Deere’s perspective, the act of wiring the PPC was installa-
tion, not workmanship. As such, the first of our
potential outcomes fails.


  B. The PPC’s wiring was “installed,” but by whom?
  Having decided that the PPC’s wiring was the result
of installation, not workmanship, we must next ascertain
who was responsible for that installation. More precisely,
we must determine whether there is evidence in the
record to suggest that Deere itself installed the PPC’s
wiring. The warranty places on the purchaser the onus
of correcting problems that originate from improper
installation that was not performed by Deere, thereby
providing no protection for errors made by others down
the engine’s supply chain. Carlisle and Buszkiewicz
argue that Deere installed the PPC’s wiring, a contention
with which Deere disagrees. In support, each party
points to evidence in the record; but as we will see, only
Deere’s evidence is admissible, making our decision on
this issue clear.
12                                              No. 08-2502

  1.   The Plaintiff’s Evidence: Were West Side Tractor’s
       statements inadmissible hearsay?
  To bolster their contention that Deere installed the
PPC’s wiring, Carlisle and Buszkiewicz refer us to para-
graph forty-six of their Statement of Material Facts in
Genuine Dispute, which reads: “West Side Tractor told
the Plaintiffs that John Deere came to West Side and set
the wiring on the Performance Programming Connector
at the time the engine was installed on The Beast.” The
paragraph cites portions of Steve Carlisle’s deposition.
According to Carlisle, West Side Tractor told him in a
phone conversation that “John Deere’s own people came
out, screwed with it, so . . . on and so on.” West Side
Tractor told Carlisle, “[W]e didn’t screw it up. John
Deere came down. They did this.” Carlisle stated that
West Side Tractor advised him that “the people from
John Deere were messing with the torque curve wires.”
   Unfortunately for Carlisle and Buszkiewicz, however, to
defeat Deere’s motion for summary judgment, they may
rely only on admissible evidence. See Lewis v. CITGO
Petroleum Corp., 

, 704 (7th Cir. 2009); Schindler
v. Seiler, 

, 1010 (7th Cir. 2007). If, as here,
evidence is inadmissible hearsay, we may not consider
it. See, e.g., 

.
  The Federal Rules of Evidence prohibit the admission of
hearsay, see Fed. R. Evid. 802, which is “a statement, other
than one made by the declarant while testifying at the
trial or hearing, offered in evidence to prove the truth of
the matter asserted,” 

first blush, West Side
Tractor’s statements to Carlisle appear to fall squarely
No. 08-2502                                            13

within that definition. West Side Tractor did not provide
these statements, meaning that we must rely only on
Carlisle’s recitation. That, coupled with the fact that
Carlisle and Buszkiewicz present these statements for
their truth—that Deere did in fact install the wiring in
the PPC—implicates the evidentiary rules against hear-
say. Unless an exception applies or the statements
are “nonhearsay,” we may not consider them in our
analysis.
  The evidentiary rules contain a laundry list of excep-
tions to the general prohibition on the admission of
hearsay statements, see 

807, as well as a
category of statements commonly known as “nonhearsay,”
which are also admissible, see 

and
Buszkiewicz characterize West Side Tractor’s statements
as the latter.
  Rule 801(d) classifies a statement as nonhearsay if the
statement is offered against a particular party and (1) is
made by a person “authorized by [that] party to make a
statement concerning the subject,” or (2) is made by
that party’s agent “concerning a matter within the
scope of the agency.” 

and
Buszkiewicz argue that West Side Tractor’s statements
are nonhearsay under either provision. The district court
decided the case on other grounds and never reached
the hearsay question, making ours the first court to con-
sider the issue.
  We turn first to Rule 801(d)(2)(C), under which West
Side Tractor’s statements would be nonhearsay if Deere
had authorized the company to make them. Exactly the
14                                                  No. 08-2502

opposite has happened here. Paragraph F of the warranty
removes from West Side Tractor any authority to make
statements concerning the warranty. It states: “Neither
original equipment manufacturers, engine or equipment
distributors, engine or equipment dealers, nor any
other person or entity, has any authority to make any
representation or promise on behalf of John Deere . . . .”
With this written limitation on West Side Tractor’s au-
thority to speak on Deere’s behalf, Rule 801(d)(2)(C) is
inapplicable.
   Next, we consider whether West Side Tractor was an
agent of Deere, as required for its statement to be
nonhearsay under Rule 801(d)(2)(D). As a general rule, a
dealer is not an agent for manufacturers of the products
it sells. See Bushendorf v. Freightliner Corp., 

,
1026 (7th Cir. 1993). Labels such as “dealer” are not
determinative, however, cf. Dutton v. Int’l Harvester Co., 

, 317 n.2 (Ind. Ct. App. 1987) (“[T]he mere
express denial of the existence of an agency relationship
is not in itself determinative of the matter.”), and it is not
hard to imagine circumstances whereby a dealer could
be a manufacturer’s agent, see, e.g., Thompson Farms, Inc.
v. Corno Feed Prods., 

, 10-12 (Ind. Ct. App. 1977)
(discussing in detail the circumstances leading to
its conclusion that an implied agency existed between
a dealer and a principal).
  Under Indiana law, an agency exists if the principal
manifests consent to the agency, the agent acquiesces, and
the principal exerts control over the agent. See Leon v.
Caterpillar Indus., Inc., 

, 1333 (7th Cir. 1995). The
No. 08-2502                                              15

principal’s control over the purported agent’s day-to-day
operations is of paramount importance. 

could include such things as personnel deci-
sions, bookkeeping and financial matters, and buying
and selling inventory and supplies. See 

cf.
Salingue v. Overturf, 

, 1104 (Ill. App. Ct.
1995) (noting that the existence of an agency relation-
ship “depends on a number of facts, including the
manner of hiring, the right to discharge, the manner and
direction of the work of the parties, the right to terminate
the relationship, and the character of the supervision of
the work done”). It is uncontested that Deere did not
exert such overarching control over West Side Tractor.
  Instead, Carlisle and Buszkiewicz advance a narrower
argument, contending that West Side Tractor was Deere’s
agent only “for purposes of claims made under the ex-
tended warranty.” They direct us to Paragraph B of the
warranty, which contains instructions for both the pur-
chaser seeking service under the warranty and to the
authorized Deere service outlets providing such service.
Specifically, Paragraph B informs Deere’s service
providers (1) that they are to use only new or
remanufactured parts, and (2) that Deere will reimburse
up to $300 in the service providers’ travel expenses.
This language, however, is insufficient to establish an
agency relationship, even on a more limited basis.
  We conclude that West Side Tractor’s out-of-court
statements fail to satisfy any of the nonhearsay definitions
contained in Rule 801(d)(2) and, accordingly, constitute
inadmissible hearsay. We refuse to consider them
16                                                 No. 08-2502

further and turn now to Deere’s evidence regarding
whether it installed the wiring in the PPC.


  2.   The Defendant’s Evidence: Deere did not install the PPC’s
       wiring.
  Deere has presented substantial admissible evidence
that it did not wire the Beast’s PPC. We return to the
affidavit filed by Grant Suhre, a Deere manager. Speaking
generally, Suhre said that Deere “does not configure or
wire the PPC of a control wiring harness sold to an
engine distributor.” He continued, “Deere is not involved
in the manufacturer’s determination, or decision-process,
regarding the proper setting of the PPC for that manufac-
turer’s equipment. As such, Deere would not change
the PPC wiring configuration selected by the manu-
facturer of the equipment in which an engine is installed
as a component part.” Turning to the particular engine
and PPC now before us, Suhre stated that “[t]here is
nothing in Deere’s records to show that Deere installed
[or configured] the PPC or Engine in the [Beast].”
  Suhre also suggested that Bandit Industries, not Deere,
installed the PPC. He said that the Beast’s 2000 engine
replacement—resulting in the installation of the current
engine—did not require replacement of the Beast’s original
PPC, which the Beast’s manufacturer, Bandit Industries,
had installed when the Beast was built in 1999. Said
Suhre: “Installation of the Engine into the [Beast] in 2000
should not have required anyone to touch or replace the
original PPC installed with the [Beast’s] first engine since
the engine is installed in, and connected to, the [Beast]
No. 08-2502                                            17

independent of the PPC.” Thus, the only admissible
evidence in the record supports Deere’s claim that it did
not install the wiring in the PPC.


                    III. C ONCLUSION
  We conclude that the Performance Programming Connec-
tor’s wiring was not the result of Deere’s workmanship or
installation. As such, the wiring was not included under
the terms of the warranty. We cannot hold Deere liable for
breaching a promise it never made. See Ind. Code § 26-1-2-
313(1)(a). Because Deere’s warranty did not cover a third-
party’s wiring of the PPC, we A FFIRM the district court’s
order granting summary judgment in Deere’s favor.




                          8-7-09