# Arundel Valley, LLC v. Branch River Plastics, Inc.

> Superior Court of Maine · July 7, 2017

URL: https://www.frixlaw.com/law-library/cases/10811308

## Case

- **Court:** Superior Court of Maine
- **Decided:** July 7, 2017
- **Precedential status:** Unpublished
- **Opinion:** Opinion
- **Judges:** Andrew M. Horton
- **Cited by:** 0 later opinions in the Frix Law Library

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## Opinion text

STATE OF MAINE BUSINESS AND CONSUMER COURT

Cumberland, ss.

ARUNDEL VALLEY, LLC

Plaintiff

v. Docket No. BCD-CV-13-15 . /

BRANCH RIVER PLASTICS, INC.

Defendant

ORDER GRANTING RELIEF FROM JUDGMENT

Defendant Branch River Plastics, Inc. has filed a Motion to Vacate Judgment and

Plaintiff Arundel Valley, LLC has filed an opposition and a Motion for Sanctions in

response. Branch River opposes the Motion for Sanctions. The court elects to decide

the pending motions without hearing. See M.R. Civ. P. 7(b)(7).

It is undisputed that the Judgment After Remand entered March 20, 2017 in

favor of Arundel Valley against Branch River has been satisfied in full. Branch River

wants Arundel Valley to execute a satisfaction ofjudgment, and Arundel Valley refuses

to do so in the form Branch River has requested. Accordingly, Branch River has moved

to vacate the judgment. The Motion to Vacate is made pursuant to M.R. Civ. P.

60(b)( 5), which permits the court to award relief from judgment on the ground that the

judgment has been "satisfied, released, or discharged."

Because unsatisfied judgments of record can have adverse financial consequences

for the judgment debtor, Branch River's request for a satisfaction of judgment that can

be made a matter of record is reasonable. Many judgments are in fact paid by insurers
rather than the nominal judgment debtor, and the court sees no need for the satisfaction

ofjudgment to say anything more than that the judgment has been satisfied.

However, the counterpart federal rule to M.R. Civ. P. 60(b)(5) has been

interpreted not to permit money judgments to be vacated. "Most courts have agreed

that a money judgment does not have prospective application, and that relief from a

final money judgment is therefore not available under the equitable leg of Rule

60(b)(5)." Stokors, S.A. v. Morrison, 147 F.sd 759, 762 (sth Cir. 1998). See also DeWeerth

v. Baldinger, 38 F.3d 1266, 1275 (2d Cir. 1994) ("[I]n practical terms, these standards

mean that judgments involving injunctions have 'prospective application,' while money

judgments do not").

On the other hand, a judgment debtor who has satisfied a money judgment but

has been refused an acknowledgment of satisfaction may be entitled to a different form

of relief-a judicial declaration that the money judgment has been paid and satisfied.

"Under Rule 60(b), a court may relieve a party from a judgment if "the judgment has

been satisfied, released, or discharged ...." Fed. R. Civ. P. 60(b)(5). This authority

encompasses the power to declare a judgment satisfied ..." AIG Baker Sterling Heights,

LLC v. Am. Multi-Cinema, Inc., 579 F.sd 1268, 1273 (11th Cir. 2009), quoting Gibbs v.

Maxwell House, A Div. of Gen. Foods Corp., 738 F.2d 1153, 1155 (11th Cir. 1984).

Branch River's motion is clearly captioned as a Motion to Vacate under Rule

60(b)( 5), but the court has authority to grant any form of relief available under the rule.

Branch River does not need the Judgment After Remand to be vacated in order to

2
obtain the relief it is entitled to. Thus, the relief granted is in the form of a declaration

that the Judgment After Remand has been satisfied.

Based on the submissions, the court cannot clearly assign fault for this

controversy entirely to one party or the other, and awards no sanctions or costs to

either party.

IT IS HEREBY ORDERED AS FOLLOWS:

1. Defendant Branch River's Motion to Vacate is hereby granted in part, to the

extent of this Order and otherwise denied.

2. The court hereby declares that the Judgment After Remand docketed in this

case March 20, 2017 has been satisfied in full. A separate statement to that effect is

issued herein.

3. Plaintiff Arundel Valley's Motion for Sanctions is denied.

Pursuant to M.R. Civ. P. 79(a), the clerk is directed to incorporate this Order by

reference in the docket.

Dated July 7, 2017

. on the Dock~·.
rEntered 7- 7-1 7
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opies s~nt via M;1i1 __ 8ectmn1Ci'Jlly _':"

3
STATE OF MAINE BUSINESS AND CONSUMER COURT

Cumberland, ss.

ARUNDEL VALLEY, LLC

Plaintiff

v. Docket No. BCD-CV-13-15 i/'

BRANCH RIVER PLASTICS, INC.

Defendant

DECLARATION OF SATISFACTION OF JUDGMENT

Based on the parties' post-judgment filings, the court hereby declares that the

Judgment After Remand docketed herein March 20, 2017 has been satisfied in full.

Pursuant to M.R. Civ. P. 79(a), the Clerk is directed to incorporate this

declaration by reference in the docket.

Dated July 7, 2017

A. M. Horton, Justice

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4
,,

Arundel Valley, LLC v. Branch River Plastics, Inc

BCD-CV-13-15

Arundel Valley, LLC
Plaintiffs

Counsel: Timothy Bryant, Esq.
One City Center
PO Box 9546
Portland, ME 04112-9546

Branch River Plastics, Inc
Defendant

Counsel: Catherine Connors, Esq.
Merrills Warf
254 Commercial St
Portland, ME 04101
STATE OF MAINE BUSINESS AND CONSUMER COURT
Cumberland, ss.

ARUNDEL VALLEY, LLC )
)
Plaintiff )
) Docket No. BCD-CV-13-15 I
V. )
)
BRANCH RIVER PLASTICS, INC. )
)
Defendant )

RULING AFTER REMAND ON DISCLAIMER OF IMPLIED WARRANTIES

On Defendant Branch River Plastics, Inc.'s appeal of this court's July 13, 2015

Judgment in this case, the Supreme Judicial Court of Maine, sitting as the Law Court, has

vacated the Judgment as to Plaintiff Ar_undel Valley, LLC' s breach of implied warranty claims.

The Law Court has remanded the case for this court to rule on "whether Branch River's

purported disclaimer of implied warranties was effective." Arnndel Valley, LLC v. Branch Ri·uer

Plastics, Inc., 2016 ME 175, ~ 1, 151 A.sd 938.

The Law Court has framed the issue to be addressed on remand as follows: .

If the court rules, based on the evidence presented at trial, that
Branch River made- n-o legally operitive -cfisclaimer of implied - -- -­
warranties, the court must re-enter judgment on the jt1rf 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.

Id.~ 15, 151 A.3d at_.

After the Law Court mandate issued, this court established a schedule for the parties to

brief the issue, with Branch River filing initially, Plaintiff Arundel Valley, LLC ["Arundel

Valley"] responding, and Branch River filing a reply. Oral argument was held March 9, 2017,

1
and the record on remand was held open for further filings until March 13, 2017, at which

point this court took the matter under advisement. 1

A. Threshold Issues Regarding Scope ef Remand

Through the briefing process, it became apparent that each party is asking this court to

decide issues that are beyond the scope of the Law Court's remand.

Arundel Valley asserts that this court should find and conclude that Branch River

waived the defense of disclaimer of implied warranties in the course of the trial. See Arundel

Valley, LLC's Post-Remand Brief at 2-3, citing Trial Transcript ("TT") 5:111-12, 5:118. 2 For

its part, Branch River asserts that, in addition to the disclaimer of implied warranties issue, this

court should decide that what Branch River claims is an independent limitation on damages is

enforceable against Arundel Valley. See Post-Remand Reply Brief of Defendant Branch River

Plastics, Inc. at 17 ("[E]ven if Branch River never disclaimed its implied warranties (which it

did) Arundel Valley cannot avoid the consequences of the damages limitation."). 3

In this court's view, neither Arundel Valley's waiver issue nor Branch River's limitation

of damages issue is before this court on remand. As noted above, the Law Court has framed

the sole issue on remand as being whether, "based on the evidence at trial," Branch River "did

disclaim the implied warranties of merchantability and fitness for a particular purpose- by way

of an express warranty or otherwise."

1
' .
Arundel Valley's late filing March 16, 2017 is not considered for purposes of this decision.

2 This and similar citations are to volumes and pages of the trial transcript. Each volume corresponds
to a trial day, so volume 5 covers the fifth trial day.

3 Branch River's limitation of damages argument is based on a provision in the document that Branch
River's president, Robert Mayo, identified as the warranty that applied to Branch River's roof SIPs. See
Def Ex. 21; TT 5:30-31.

2
On its face, the answer to that question lies in the evidence presented at trial. Arundel

Valley's contention that Branch River has waived its defense of disclaimer of implied warranties

by failing to present evidence is thus outside the scope of the remand.

Similarly, Branch River's argument that this court should consider the effectiveness of

the purported limitation on damages is outside the scope of the remand. A contractual

limitation on damages is different from a contractual disclaimer of implied warranties and

presents different issues oflaw and fact. The Law Court's remand identifies a single issue for

this court to address, which is whether Branch River effectively disclaimed implied warranties.

Accordingly, the court declines to consider either Arundel Valley's waiver argument or

Branch River's limitation of damages argument. Instead, the court turns to the issues of fact

and law that are encompassed within the ultimate question of whether, based on the evidence at

trial, Branch River effectively disclaimed the implied warranties of merchantability and fitness

for particular purpose with respect to the structural roof panels it provided to Arundel Valley's

project.

B. Findings and Conclusions Regarding Disclaimer cfImplied fVarranties

Based on the entire record, this court hereby adopts the following findings of fact and

conclusions of law, which supersede any and all prior statements or rulings on the same

matters, however clesignated. 4 All affirmative findings are based on a preponderance of the

evidence unless otherwise indicated.

1. In 2011, Arundel Valley hired a construction company, Peachey Builders, to serve as

general contractor and "provide construction administration and management services" and all
I

4 Branch River's post-remand brief arg ues that the court has already decided the disclaimer issue in
favor of Branch River, based on statements made by the court at trial, after the close of the evidence. See
Post-Remand Brief of Defendant Branch River Plastics, Inc., at 1-2, 6-7, citing TT 6:7-10. To the extent
the court's comments constituted rulings, they were explicitly designated as "tentative." TT 6 :9. See
M.R. Ci v. 54(b)(l) (decisions, however des igna ted, are subject to revision at any time prior to entry of
j udgment).

3
"labor, materials, equipment and services necessary" to construct a butter manufacturing

facility for Arundel Valley. Plaintiffs Trial Exhibit ("Pl. Ex.") l; TT 1:171. Arundel Valley

owns the facility; Kate's Butter, Inc., formerly a plaintiff in this case, leases the facility from

Arundel Valley. TT: 1:166; Pl. Ex. 1. (The construction project is referred to hereinafter as

"the Kate's Butter project").

2. During the planning phase for the Kate's Butter project, Peachey Builders and the

project architect recommended that the walls and roof of the facility be constructed using

structural insulated panels, also known as SIPs. TT 1:176-77. Peachey Builders worked with a

third party vendor, House & Sun, to purchase the SIPs. TT 1: 179. House & Sun is a company

that specializes in the sale of SIPs that it historically has obtained from either of two SIP

manufacturers, one of which being Branch River. TT 2:90, 2:93. House & Sun had purchased

SIPs from Branch River approximately seventy times in the eight to ten years prior to trial.

TT 2:91, 2:94, 2: 119.

3. The arrangement was that House & Sun would purchase the wall and roof SIPs

from Branch River, and then re-sell them to Peachey Builders through a separate transaction,

subject to House & Sun's own pricing. TT 2:134. At the request of Peachey Builders "to price

out some [SIPs] on the project," House & Sun reached out to Branch River to prepare a bid for

the Kate's Butter project. TT 1:98-99.

4 . Branch River is a manufacturer of SIPS for residential and commercial projects.

Some of Branch River's SIPS are marketed as Air-Flo SIPS and others are marketed as R­

Control SIPs. TT 1:50-54. "Air-Flo" is Branch River's own brand name, but R-Control is a

designation that identifies the SIP as "code-compliant," meaning that it is recognized to meet

certain standards of manufacturing and performance established and monitored by AFM

Corporation ["AFM"J, the code compliance service that owns the R-Control designation. TT

4
1:50. The term" code-compliant" as applied to a product means that the product complies

with the applicable building code. See TT 1:51.

5. R-Control is a registered trademark of AFM. AFM licenses facilities that

manufacture SIPs to market products under the R-Control brand. Said licensed facilities must

adhere to consistent standards to ensure high quality products. R-Control SIPs are

manufactured under carefully controlled conditions and are certified as per se code compliant.

Branch River has a license to manufacture and sell R-Control products. See TT 1:52-54, 3:259­

60.

6 . Branch River's Air-Flo SIPS are designed and manufactured differently than its R­

Control SIPS: the Air-Flo SIPS have channels cut into the foam core, whereas R-Control SIPs

have a solid foam core. TT 1:52-54. As a result of the difference, the products perform

differently. Id. Also, Branch River's Air-Flo SIPs are not certified by any independent service,

such as AFM, as being "code-compliant." TT 1:52, 1:55.

7. Branc_h River proposed to provide R-Control SIPs for the walls of the Kate's Butter

facility, and to provide Air-Flo SIPs for the roof of the facility. Pl. Ex. 11, 13, Both proposals

contained a critical error-they described the Branch River roof SIPs as R-Control. Id.

Moreover, the twelve invoices that Branch River submitted to House & Sun for payment of the

SIPs also incor_rectly identified the Branch River roof SIPs as being R-Control. See PI. Ex: 28.

8. In fact, while Branch River's wall SIPS are indeed R-Control, Branch River's Air­

Flo roof SIPS are not R-Control. TT 1:52.

9. Based on Branch River's repeated mischaracterization of its roof SIPS as being R­
1 I

Control, Kel House, the owner of House & Sun, was under the mistaken understanding that the

Branch River roof SIPS were R-Control. See TT 2:101, 2:107, 2 :112. It was not until June

2012, well after the Branch River SIPS had been installed at the Kate's Butter project, that

5
Branch River told Mr. House that the Branch River roof SIPS were not, in fact, R-Control. Pl.

Ex. 37, TT 2:113-14.

10. Based on Mr. House's mistaken understanding, House & Sun submitted a budget

estimate to Peachey Builders that mischaracterized the roof SIPS as being R-Control. P. Ex.

15. In December 2011 House & Sun submitted to Peachey Builders Change Order #1 that also

mischaracterized the roof SIPS that House & SLm would be supplying as R-Control. Pl. Ex. 36.

11. Based on House & Sun's characterization of the Branch River roof SIPs, Peachey

and Arundel Valley were led to believe that the Branch River roof SIPS were R-Control. TT

1:196-97, 2:145-46, -154; see Pl. Ex. 20.

12. Pursuant to Peachey Builder's contract with Arundel Valley, Peachey Builders

provided its own material warranty to Arundel Valley and was to "assign to [Arundel Valley]

all warranties received by Contractor on all materials and equipment included in the vVork."

Pl. Ex. 1, § 5.5 .3.

13. In the course of the dealings in 2011-12 among Branch River, House & Sun,

Peachey Builders and Arundel Valley, references were made to the warranty or warranties

applicable to Branch River's wall and roof SIPS. The budget estimates that House & Sun

provided Peachey Builders for the roof and wall SIPS made reference to "a 20 year factory

warranty." Pl. Ex. 12, 18. On November 5, 2011, Branch River's representative provided

House & Sun with a formal proposal for the Kate's Butter project that referenced Branch

River's "Standard Panel vVarranty." Pl. Ex. 21. On December 14, 2011, Peachey Builders sent

House & Sun a signed second "Change Order" for the purchase of SIPs, which referenced a "20
I ,

year factory warranty." Pl. Ex. 22. On January 17, 2012, Branch River provided its final

proposal to sell SIPs to House & Sun, making reference to a "Standard Panel vVarranty'' for

$ 201,330.00 . Pl. Ex. 25.

6
14. Kel House on behalf of House & Sun accepted the Branch River proposal as of

January 23, 2012.

15. The Branch River roof SIPS were delivered to the Kate's Butter project site

between the end of February and the beginning of April 2012 and were installed by Peachey

Builders during the April-June 2012 period. See Pl. Ex. 28 (Branch River invoices reflecting

shipping dates). During March or April 2012, Branch River's sales manager, Kevin Arcand,

visited the site and gave instruction to Peachey Builders on installation of the roof SIPS. TT

16-18.

16. Later in the spring or early summer of 2012, after the roof SIPS had been installed,

Mr. Arcand again visited the site and determined that that the installers had not used SIP tape

as specified. TT 4:18-19.

17. At that point, in May and June 2012, two major issues arose.

18. One issue had to do with the discovery that Branch River's roof SIPS were not in

fact R-Control. As noted above, prior to June 2012, House & Sun, Peachey Builders and

Arundel· Valley all had been led by Branch River's erroneous descriptions to believe that

Branch River's roof SIPS were R-Control. The discovery that the Branch River roof SIPs

were not R-Control raised issues about whether the structure would meet building code

requirements, and ev_entL1ally led Arundel Valley to direct that they be removed and replaced:

19. The other issue had to do with the effect of the improper installation of the roof

SIPs upon the Branch River warranties that had been mentioned in various proposals and

estimates. Mr. Arcand, on behalf of Branch River, advised Kel House that Branch River would

not honor its express warranty of the roof SIPS because they had not been installed properly.

TT 4:23 . Branch River considered the express warranty to have been voided as a result of the

improper installation. TT 5:44-45. S ee also Pl. Ex. 56.

7
20. Eventually, Branch River agreed to "reinstate" the express warranty after certain

remedial measures were taken to address the installation error. TT 1 at 250-51; Pl. Ex. 57. By

that time, Arundel Valley was more concerned with the fact that the roof SIPs were not R­

Control and might have to be removed from the building, and it purported to reject Branch

River's reinstatement of the warranty.

21. There is no evidence in the trial record that any Branch River warranty document

reflected in Defendant's Exhibit 21 was forwarded to House & Sun, Peachey Builders or

Arundel Valley until Branch River offered to "reinstate" the express warranty in June or July

2012, well after the Branch River roof SIPS had been purchased, delivered and installed on the

Kate's Butter structure. No witness other than Robert Mayo, Branch River's president, was

shown Defendant's Exhibit 21. No witness (including Mr. Mayo) testified that Branch River

had furnished the warranty document reflected in Defendant's Exhibit 21 to any of the other

parties-House & Sun, Peachey Builders or Arundel Valley-until after the problem with the

roof SIPS not being R-Control and not properly installed had emerged.

22. The "Limited 20 Year vVarranty" document on which Branch River relies is

designated as being for the Kate's Butter project and bears signature lines for Kate's

Homemade Butter, Peachey Builders and House & Sun, as well as a line for Branch River, but

only Mr. Mayo's signature appears on the document. See Def Ex. 21. There is no Branch

River warranty document signed by House & SLm, Peachey Builders and/ or Arundel Valley in

the trial record.

23. The evidence is conflicting on whether the "Limited 20 Year vVarranty" marked as
' '
Defendant's Exhibit 21 is, in fact, the warranty that was applicable to Branch River's Air-Flo

roof SIPS. Robert Mayo, Branch River's president and owner, testified that the "Limited 20

8
Year vVarranty" reflected in Defendant's Exhibit 21 applied to all of Branch River's SIPs, 5 but

that testimony was contradicted by the testimony of Branch River's sales manager, Kevin

Arcand. Mr. Arcand testified that Branch River had a 20-year warranty for its R-Control

panels but a different warranty-"probably" a IO-year warranty-for its Air-Flo panels, which

were what were installed on the roof of the Kate's Butter structure. TT 4:24. 6 There is no

IO-year warranty document in the trial record. Mr. Arcand was not shown Defendant's

Exhibit 21.

24. Branch River has a standard warranty for its R-Control SIPS, but no standard

warranty for its Air-Flo SIPs. TT 4:36. Thus, the various references to standard warranties in

Mr. Arcand's communications with House & Sun appear to apply to the R-Control wall SIPs,

but not the Air-Flo roof SIPs.

25. Based on House & Sun's extensive dealings with Branch River, it is possible, and

even likely, that House & Sun had seen, at some point, the actual warranty or warranties issued

5 Branch River's president, Robert Mayo, testified as follows:
Q: [The] warranty that you offer. .. Is this the Branch River ·warranty?
(Defendant's Exhibit 21 identified)
A: Yes.
Q: And is this the warranty that applies to the Air-Flo panels?
A: Air-Flo and any other laminate product that would be produced not under our control.
. TT~ 5:S0-S L Mr. Mayo also testified that the Branch River -warranty is "a duplicate · of the same
warranty that's issued by R-Coptrol. Itjus_t: ,says Branch River." TT 5:29.

6 Kevin Arcand, Branch River's sales manager, testified as follows:
Q: And what is the standard warranty for an R-Control panel on a commercial job?
A: Twenty years on the lamination on the R value.

Q: Now tell me about the warranty that came with the Branch River Air-Flo panels; what
do you know about that is it also a 20 year warranty?
A: No, I would say probably 10 years.

Q: Do you at Branch River have standard or standardized warranties?
A: Do we have standardized warranties; we do for the R-Control panel.
Q: What about the Air-Flo panel?
A: No, no.
TT 4:24, 4:S6.

9
by Branch River for various projects. But Kel House, the owner of House & Sun, was not

shown Defendant's Exhibit 21 and was not questioned about the terms of Branch River

warranty for roof SIPs, so the uncertainty created by the discrepancy between Mr. Mayo's

testimony and Mr. Arcand's testimony remains unresolved.

26. Moreover, an e:..mail message dated June 22, 2012 from Gary Peachey to Daniel

Patry of Arundel Valley indicates, '.' Branch River will provide the MFG warranty for your R­

Control wall panels and the Branch River Structural airflow [sic] roof panels," see Pl. Ex. 36

(emphasis added). This message raises doubt about whether, as of June 2012, Branch River

had ever provided the warranty document applicable to the Kate's Butter project to any of the

other parties involved in the project. No witness testified that a1:y warranty document had

been provided previously.

27. vVhat Mr. Mayo identified as the Branch River warranty applicable to the roof

SIPS furnished to the Kate's Butter project contains a disclaimer of warranties in all capital

letters and bold font, as follows:

THE WARRANTY SET FORTH HEREIN IS IN LIEU OF
ALL OTHER GUARANTIES AND/OR WARRANTIES,
EXPRESSED OR IMPLIED, INCLUDING BUT NOT
1

LIMITED TO THE WARRANTIES OF
MERCHANTABIL!.J): __ AND FITNE~S FOR A _. __
PARTICULAR PURPOSE AND THIS WARRANTY SHALL
NOT BE EXTENDED OR ALTERED EXCEPT BY A
WRITTEN INSTRUMENT SIGNED BY BRANCH RIVER
PLASTICS, INC. AND THE OWNER. THERE ARE NO
WARRANTIES AND/OR GUARANTEES WHICH
EXTEND BEYOND THE TERMS AND PROVISIONS SET
FORTH IN THIS WARRANTY.

Def Ex. 21.

28. Based on the absence of evidence that the actual warranty document applicable to

the Branch River roof and wall SIPS was provided in the course of the purchase transactions to

10
either Branch River's purchaser, House & Sun, Inc., or to the subsequent purchasers, Peachey

Builders and Arundel Valley, the evidence is insufficient to enable an affirmative finding that,

prior to when the Branch River roof SIPS were installed at the Kate's Butter project, House &

Sun, Peachey Builders and/or Arundel Valley were made aware of, or were on notice of the

disclaimers of implied warranties contained in the Branch River warranty document.

29. Branch River bears the burden of proving by a preponderance of the evidence that it

effectively disclaimed the implied warranties of merchantability and fitness for a particular

purpose. Cent. Maine Power Co. v. Foster rVheeler Corp., 116 F.R.D. 339, 342 (D. Me. 1987).

30. Implied warranties are created by operation of law but may be disclaimed under

Maine law for non-consumer goods. 11 M.R.S. § 2-316. Maine's enactment of the Uniform

Commercial Code imposes certain requirements for a valid disclaimer of implied warranties.

[T]o exclude or modify the implied vvarranty of merchantability
or any part of it the language must mention merchantability and
in case of a writing must be conspicuous, and to exclude or modify
any implied warranty of fi tness the exclusion must be by a writing
and conspiCLtous. Language to exclude all implied warranties of
fitn ess is sufficient if it states, for example, that "There are no
warranties which extend beyond the description on the face
hereof"

Id.

31. The- warranty document - reflected m Defendant's - Exhibit 21 meets -all

requirements of 11 M.R.S. § 2-316, including the necessary reference to "merchantability." Id.

(dictating that it is a sufficient disclaimer to state "There are no warranties which extend beyond

the description on the face hereof").

32. However, the sufficiency of the "Limitedt20 Year vVarranty" in Defendant's Exhibit

21 for purposes of section 2-.316 does not mean that Branch River's disclaimer of warranties was

effective. To be effective, a warranty disclaimer must be part of the bargain between a buyer

and seller. See S.H. Nevers Corp. v. Husky Hydraulics, Inc., 408 A.2d 676, 680-81 (Me. 1979)

11
(manufacturer of equipment failed to prove that plaintiffs purchase through dealer was subject

to manufacturer's express warranty and disclaimer of implied warranties). See also American

Aerial Servs. v. Terex USA, LLC, 39 F. Supp. 3d 95, 106 (D. Me. 2014) ("under Maine law, a

limitation or disclaimer of warranty is not effective unless it has been received by the buyer

subject to those provisions").

33. The parties disagree about whether Maine law requires the manufacturer to prove

that the disclaimer was part of the ultimate purchaser's transaction-meaning the transaction

between Peachey Builders and Arundel Valley in this case-but the law is clear that Branch

River must prove at least that the disclaimer was part of the transaction between it and House &

Sun. For the reasons set forth hereinafter, the court finds and concludes that Branch River has

failed to meet its burden.

34. As Branch River contends, its voiding of the express warranty in June 2012 affected

only the express warranty and did not affect the disclaimer of implied warranty, but that point

begs the question as to whether the disclaimer was ever effective. If the warranty, including the

disclaimer, was not part of the bargain between Branch River and its immediate purchaser, then
I

the disclaimer was ineffective.

35. For two independent reasons, the court concludes, based on the evidence at trial,

that Branch River has failed to meet its burden to prove by a preponderance of the evidence that

it effectively disclaimed the implied warranties of merchantability and fitness for particular

purpose.

36. First, the evidence is in eqmpo1se as to whether the Limited 20 Year vVarranty
'
reflected in Defendant's Exhibit 21-the only written warranty with disclaimer language in the

record-is, in fact, the warranty applicable to the Air-Flo roof SIPs. Mr. Mayo said that the

Limited 20 Year vVarranty is Branch River's standard warranty for all of its SIPs, but Mr.

12
Arcand said that there is no standard warranty for Air-Flo SIPs and that the warranty period

for those SIPs is shorter. Moreover, in his communications with House & Sun, Mr. Arcand

used terms other than "Limited 20 Year vVarranty" to Branch River's warranty, raising

unanswered questions as to whether the warranty Mr. Arcand was referring to is the one that

Mr. Mayo said is applicable. Because the evidence is in equipoise, the court is unable to make an

affirmative finding that Defendant's Exhibit 21-the only warranty document in the evidentiary

record-applies to Branch River's roof SIPs.

3 7. Second, Branch River failed to proye that the "Limited 20 Year Warranty" reflected

in Defendant's Exhibit 21 was part of the bargain between it and House & Sun. As noted above,

although warranties were referred to by different names in communications between Mr.

Arcand and Mr. House, there is no evidence in the record that the Limited 20 Year Warranty

reflected in Defendant's Exhibit 21 was provided to House & Sun, not to mention Peachey

Builders or Arundel Valley, at any time before the roof SIPs had already been installed on the

Kate's Butter structure. Only after the roof SIPS had been purchased, delivered and installed

and the issues regarding R-Control and installation had surfaced does the evidence indicate that

Branch River provided a warranty document to any other party.

38. Because Branch River tendered the Limited 20 Year Warranty reflected in

Defendant's Exhibit 21 only well after all of the purchase tran~a_ctions had been completed, and

after problems had arisen regarding the product, Arundel Valley was not required to accept

Branch River's so-called reinstatement of the Limited 20 Year Warranty with its disclaimers.

39. Each of these grounds independently supports the conclusion that Branch River has
I •

not met its burden of persuasion on the defense of disclaimer of the implied warranties of

merchantability and fitness for particular purpose.

13
C. Conclusion

Defendant Branch River Plastics, Inc. made no legally operative disclaimer of the

implied warranties of merchantability and fitness for particular purpose regarding the roof SIPs

it sold to House & Sun for the Kate's Butter project. Based on that conclusion, the court is

again granting judgment in favor of Plaintiff Arundel Valley, LLC on Counts XI and XII of the

Complaint herein. The Law Court having vacated this court's July 13, 2015 Judgment only as

to Counts XI and XII of the Complaint, the Judgment After Remand entered herewith

addresses only those two counts and the July 13, 2015 Judgment stands as to the other counts

of the Complaint.

Pursuant to M.R. Civ. P. 79(a), the Clerk is hereby directed to incorporate this Ruling

on Remand by reference in the docket. ~
Dated March 20, 2017 ~
A. M . Horton, Justice

Eniered on the Doc!<et:J-- cJ 0~ / {
Copies sent via Mail _ ectf'Onically ~

14
Arundel Valley, LLC v. Branch River Plastics, Inc

BCD-CV-13-15

ArundelValley,LLC
Plaintiffs

Counsel: Timothy Bryant, Esq.
One City Center
PO Box 9546
Portland, ME 04112-9546

Branch River Plastics, Inc
Defendant

Counsel: Catherine Connors, Esq.
Merrills Warf
254 Commercial St
Portland, ME 04101
STATE OF MAINE BUSINESS AND CONSUMER COURT

Cumberland, ss.

ARUNDEL VALLEY, LLC

Plaintiff

v. Docket No. BCD-CV-13-15 ../

BRANCH RIVER PLASTICS, INC.

Defendant

ORDER ON DEFENDANT'S MOTION FOR NEW TRIAL

Defendant Branch River Plastics, Inc.'s Motion for New Trial, together with Plaintiff

Arundel Valley's opposition and Defendant's reply, is before the court. The court elects to

decide the Motion without oral argument. See M.R. Civ. P. 7(b)(7).

This Order addresses the Defendant's argument in the order they appear in the Motion.

1. The Issue ofBranch River's Disclaimer of Implied Warranties

Branch River's first argument is that the court should have granted judgment to Branch

River based on Branch River's disclaimer of the implied warranties of merchantability and

fitness for particular purpose. The evidence at trial included a one-page document purporting

to set forth Branch River's express warranty for its products and a disclaimer of the implied

warranties of merchantability and fitness for particular purpose.

For several reasons, the court disagrees with Branch River's contention.

First, it was clear from the court's summary judgment ruling that Arundel Valley's

implied warranty claims were going to trial. This meant that there were factual issues

regarding: whether Branch River's sale of the roof panels was subject to its purported express

warranty and disclaimer of implied warranties. Arundel Valley denied that it had ever received

Branch River's purported express warranty and disclaimer of implied warranties. This meant
that Branch River had the burden to demonstrate that Arundel Valley's purchase of the Branch

River rnofpanels was in fact subject to the express warranty and the disclaimers of implied

warranties. See S.H. Nevers Corp. v. Husky Hydraulics, Inc., 408 A.2d 676, 680-81 (Me. 1979)

(manufacturer of equipment failed to prove that plaintiffs purchase through dealer was subject

to manufacturer's express warranty and disclaimer of implied warranties). See also American

Aerial Servs. v. Terex USA, LLC, S9 F. Supp. sd 95, 106 (D. Me. 2014) ("under Maine law, a

limitation or disclaimer of warranty is not effective unless it has been received by the buyer

subject to those provisions"). Thus, whether 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 the issue, but Branch River did not request any such instructions.

Next, the evidence indicated that Branch River, in the sales documents it issued to

House & Son as well as in e-mails to House & Son, described the roof panels as being R­

Control, which admittedly they were not. Branch River's mischaracterization of its own

product generated another issue as to the validity of its purported disclaimer of the implied

warranty of merchantability--does a manufacturer's disclaimer of the implied warranty of

merchantability extend to a product sold as something it is not?

Third, the evidence also indicated that Branch River claimed to have "voided" its

warranty, and then requested Arundel Valley, Peachey Builders and House & Sun to sign a

document "accepting" both the express warranty and the disclaimer ef implied warranties.

Branch River's Motion correctly points out that its voiding of the express warranty did not

necessarily void the disclaimer of implied warranties as well. However, Branch River fails to

acknowledge that its request for Arundel Valley to "accept" the disclaimer of implied warranties

along with the express warranty raises issues regarding the status of the disclaimer of

warranty. Did Branch River "void" the disclaimer of implied warranties along with the express

2
warranty? If not, why was Branch River asking Arundel Valley to "accept" the disclaimer

along with the express warranty? The jury could have been instructed to consider these

issues, but no such instructions were requested.

Each and every one of these three areas of evidence generated potential jury issues, and

the jury could have been instructed in detail. The jury was indeed instructed regarding the law

relating to implied warranties, but Branch River requested no jury instructions whatever on

disclaimer of warranty issues.

The evidence was sufficient to support a finding against Branch River on the disclaimer

of implied warranty issue, on three different grounds. The jury could have decided that Branch

River failed to establish that Arundel Valley was on notice of the disclaimer, or that Branch

River's mistaken designation of the roof panels as R-Control established an independent

implied warranty of merchantability and/or fitness for particular purpose, or that Branch River

rescinded ("voided") the disclaimer and Arundel Valley never agreed to Branch River's offer to

reinstate it.

Therefore, 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.

2. Testimony of James DiStefano

Branch River's second ground for requesting a new trial is its claim to have been

"ambush[ed]" by the trial testimony of James DiStefano, an expert witness for Plaintiff.­

specifically his testimony that he had noted gaps between the pieces of Expanded PolyStyrene

(EPS) foam inside the Branch River roof panels. The court does not view the testimony at issue

to be grounds for a new trial.

3
First, Branch River did not object to the testimony. Whether the failure to object was

calculated or inadvertent, the "horse was not [entirely] out of the barn," as Branch River

claims, see Defendant's Motion for New Trial at 10 n.14--there are several steps that the court

could have taken to cure any problem.

However, no curative steps likely were in order: as Arundel Valley's Response in

Opposition to the Branch River Motion elucidates in detail, Branch River was on notice of the

substance of the testimony at issue. The supposedly new opinions and observations to which

Branch River objects had been substantially disclosed. As Arundel Valley points out, the trial

testimony that Branch River now objects to was, in substance, summarized in a July 2013 letter

from Mr. DiStefano that Arundel Valley attached to a motion in limine filed well before trial.

In fact, Branch River's Motion acknowledges that the testimony at issue-about Mr.

DiStefano's third site visit-was so similar to his report of his second site visit that Branch

River's counsel mixed the two up. See id. at 10 n.14.

Thus, Branch River has not shown that Mr. DiStefano's trial testimony furnishes

grounds for a new trial.

3. The Expert Witness Reports efMessrs. DiStefano and Foard

Branch River"s next argument is that the court erred in sustaining Arundel Valley's

objection to Branch River's motion to admit the written reports of two of Arundel's expert

witnesses, James DiStefano and Bo Foard. The reports were used in cross-examining the

witnesses, but the reports themselves were excluded as inadmissible hearsay. See Malenko v.

Handrahan, 2009 ME 96, ~ 35, 979 A.2d 1269, 1276. In theory, it could have been argued that

the reports were admissible as party admissions, see M.R. Civ. P. 80l(d) but the argument was

not made, and even had it been, their admissibility is doubtful.

4
Moreover, Branch River was allowed to, and did, use the report extensively in cross­

examining Messrs. DiStefano and Foard. Anything in the reports could have been read to the

witnesses. Even assuming the reports should have been admitted, Branch River has not

demonstrated any prejudice from the court's decision to exclude the reports.

4. Testimony ofPaul Malko
Branch River moved in limine to exclude the testimony of Paul Malko, and now asks the

court to reconsider its denial of that motion and grant a new trial. Mr. Malko's testimony

about Branch River's process was relevant and admissible, as the court ruled previously.

5. Jury Confusion Regarding Causation

Here Branch River appears to raise, for the first time, an objection to the court's

instruction regarding causation and the court's response to a note from the jury regarding how

the jury should consider "installation errors." The court's response indicated that the jury

could consider the effect of installation errors in determining whether Arundel Valley had

proved that any breach of implied warranty by Branch River was the proximate cause of the

losses claimed by Arundel Valley. As Branch River points out, the jury soon after returned a

verdict in Arundel Valley's favor. Branch River attributes the result to jury confusion, but an

equally plausible explanation--one that is consistent with the verdict-is that the jury decided

that Branch River's breach, not any installation error, was what made it necessary for the roof

to be removed and replaced.

6. Breach ofWarranty ofFitness.for Particular Purpose

Branch River argues that the evidence was insufficient to support the verdict finding it

liable for breach of warranty of fitness for particular purpose. Again, the court disagrees. The

particular purpose Arundel Valley advanced at trial was that it wanted R-Control SIPS for its

roof panels. Perhaps the clearest evidence that Branch River knew of this purpose is that the

5
price quote and invoices it issued for the roof panels to be installed at Arundel Valley's new

facility described the panels, incorrectly, as R-Control. Branch River filed a motion in limine to

exclude the price quote and invoices, but the court denied the motion because they are directly

relevant to both of Arundel Valley's breach of implied warranty claims.

A separate reason why Branch River is not entitled to a new trial based on the verdict

for breach of implied warranty for particular purpose is that the jury also found Branch River

liable on the independent claim of breach of implied warranty of merchantability.

7. Damages

Lastly, Branch River challenges the sufficiency of the evidence to support the entire

damages award to Arundel Valley. It is quite true that Arundel Valley's evidence regarding

damages was thin, at least as to some items claimed as damages. On the other hand, there was

testimony, mainly from Daniel Patry but from other Plaintiffs witnesses also, sufficient to

support the verdict in terms of both causal connection and dollar amount.

Moreover, Branch River made many of the same arguments to the jury that it makes

now in its Motion for New Trial. Clearly, substantial issues as to mitigation of damages and

avoidable costs were generated and pursued at trial, and Branch River also argued to the jury

that Arundel Valley was trying to get an "upgrade" at Branch River's expense. Certainly the

evidence did not compel the jury to make the damages award that it did, but the question at

hand is whether the evidence was sufficient to support the award. Viewing the totality of the

evidence in a light favorable to the verdict, the court concludes that the evidence was sufficient.

For the foregoing reasons, Defendant's Motion for New Trial is denied.

Pursuant to M.R. Civ. P. 79( a), the clerk is directed to incorporate this Order by

reference in the docket.

Dated September 10, 2015

Entered on the Docket: qLa/,{ -/
Copies sent via Mail _ Electrortically 4
6
Arundel Valley, LLC and Kate's Homemade Butter, Inc., Daniel J. Patry and Karen
I. Patry v. Peachey Builders, Inc.; Gary R. Peachey; Kevin Brown Architecture,
LLC; Kevin Brown; Branch River Plastics, Inc.; Robert Mayo; House & Sun, Inc.,
and Kel House

BCD-CV-13-1.5

Arundel Valley, LLC and Kate's Homemade Butter, Inc.
Daniel J. Patry and Karen I. Patry
Plaintiffs/ 3rd Party Plaintiffs

Counsel: Timothy Bryant, Esq.
One City Center
PO Box 9546
Portland, ME 04112-9546

Branch River Plastics, Inc. and Robert Mayo
Defendant

Counsel: Martica Douglas, Esq.
103 Exchange St.
PO Box 7108
Portland, ME 04112-7108
STATE OF MAINE BUSINESS AND CONSUMER COURT

Cumberland, ss.

ARUNDEL VALLEY, LLC

Plaintiff

v. Docket No. BCD-CV-13-15

BRANCH RIVER PLASTICS, INC.

Defendant

ORDER ON COSTS, INTEREST AND EXPENSES

Plaintiff and Defendant Robert Mayo have both submitted bills of costs. Plaintiff's

request for full prejudgment interest is before the court, along with Defendant Branch River's

request for a full or partial waiver of prejudgment interest. Also, Defendant Branch River has

filed a motion for expenses for failure to admit under M.R. Civ. P. S7(c). The court elects to

decide all of these without hearing, see M.R. Civ. P. 7(b)(7).

Prejudgment Interest

Defendant Branch River's request for a full or partial waiver of prejudgment interest is

granted in part. The fact that Plaintiff Arundel Valley sued multiple parties doubtless

prolonged the case, and as Branch River says, other defendants did obtain extensions of the

schedule, albeit without objection by Branch River. Plaintiffs motion for reconsideration

deferred a final ruling on Branch River's motion for summary judgment, although only for

about two months. Branch River's other arguments for a waiver are unpersuasive. For

example, it is not sufficiently clear that any delay by Arundel Valley in providing discovery

materially delayed resolution of the case. Second, Branch River's claim that Arundel Valley

refused to mediate is contested, and in any case, the claim should have been brought up at the

time.
Branch River has shown good cause for a partial waiver of prejudgment interest.

Plaintiff is hereby awarded prejudgment interest for 748 days at $56.42 per day, for a total of

$42,202.16.

Plaintiff's Costs

From Plaintiffs bill of costs, the court awards the following:

$755.24 in recoverable costs under section 1502-B oHitle 14, M.R.S.

$1, 1.38.60 for James DiStefano's time and mileage

$59S for the Rick Dauphinais deposition

$1172 for the John Vargas and Lisa Murphy depositions

$1,483 for the Kevin Arcand deposition

$460.20 for the deposition of Daniel Patry

$500 for preparation and copying of trial exhibits

Defendant Mayo's Costs

Defendant Mayo seeks reimbursement for a motion to dismiss that was later

withdrawn. Although Mr. Mayo did prevail on summary judgment, in the court's view, he

would not have prevailed on a Rule 12(b)(6) motion to dismiss. Moreover, the withdrawal of

the motion means he cannot be deemed to have prevailed as to that issue. His request for costs

is denied.

Defendant Branch River's Motion for Expenses

Branch River seeks reimbursement for the expense of proving the validity of certain

tests conducted by Craig Barnes, P.E. on Branch River's panels. Mr. Barnes's test results were

cited by Arundel Valley's expert and came into evidence through an exhibit, not through Mr.

Barnes's testimony. However, nothing about the jury verdict indicates that the proposition

2
Branch River claims was proved was in fact proved. The verdict indicates that the jury

considered Mr. Barnes's test results either not proven or irrelevant-more likely the latter.

Defendant Branch River's Rule 37(c) Motion for Fees and Expenses is denied.

Pursuant to M.R. Civ. P. 79(a), the clerk is directed to incorporate this Order by

reference in the docket.

Dated September 10, 2015 IS_ _ _ _ _ _ _ _ _ _ __
A. M. Horton, Justice

3
Arundel Valley, LLC and Kate's Homemade Butter, Inc., Daniel J. Patry and Karen
I. Patry v. Peachey Builders, Inc.; Gary R. Peachey; Kevin Brown Architecture,
LLC; Kevin Brown; Branch River Plastics, Inc.; Robert Mayo; House & Sun, Inc.,
and Kel House

BCD-CV-13-15

Arundel Valley, LLC and Kate's Homemade Butter, Inc.
Daniel J. Patry and Karen I. Patry
Plaintiffs / 3rd Party Plaintiffs

Counsel: Timothy Bryant, Esq.
One City Center
PO Box 9546
Portland, ME 04112-9546

Branch River Plastics, Inc. and Robert Mayo
Defendant

Counsel: Martica Douglas, Esq.
103 Exchange St.
PO Box 7108
Portland, ME 04112-7108
STATE OF MAINE BUSINESS AND CONSUMER COURT

Cumberland, ss.

ARUNDEL VALLEY, LLC

Plaintiff

V. Docket No. BCD-CV-IS-15

BRANCH RIVER PLASTICS, INC.

Defendants

ORDER ON MOTIONS IN LIMINE

The remaining parties, Plaintiff Arundel Valley, LLC and Defendant Branch River

Plastics, Inc. have filed a total of eight motions in limine in anticipation of trial. This Order

addresses all such motions beginning with Plaintiffs unopposed motions in limine and

continuing with Plaintiffs opposed motions and then Defendant's motions. The court elects to

decide the motions without oral argument.

I. Plaintiffs Motion In Limine To Exclude Testimony Of Larry Turner: The

Plaintiffs Motion seeks to exclude any testimony by Larry Turner, who at one point was

identified as possible defense witness. The court has previously ruled that any testimony by

Mr. Turner would be limited to non-expert testimony, and the Plaintiffs motion seeks to

exclude him as a fact witness as well. No opposition to the motion was filed. Without

objection, Plaintiffs Motion In Limine To Exclude Testimony Of Larry Turner is granted: It

is ORDERED that Larry Turner is excluded as a witness.

2. Plaintiffs Motion In Limine To Exclude Evidence Of Comparative Fault: This

Motion seeks to preclude the Defendant from presenting any evidence for the purpose of

demonstrating comparative negligence on the part of Plaintiff, see 14 M.R.S. § 156. Given that

there are no negligence or tort claims remaining in this case, as a result of the court's prior
summary judgment ruling, the Motion is appropriate, and perhaps for that reason, was

unopposed. The Plaintiffs Motion In Limine To Exclude Evidence Of Comparative Fault is

granted. It is ORDERED that evidence relevant solely to comparative negligence is excluded.

This ruling does not, in and of itself, bar evidence relevant to other defenses, including failure

to mitigate damages, nor does it preclude Defendant from challenging the necessity or

reasonableness of the steps taken by Plaintiff to address the circumstances that underlie the

claims that are going to trial.

5. Plaintiffs Motion in Limine to Exclude Evidence and Apportioning of the

Settling Defendants' Fault: This Motion, which is also unopposed, seeks to exclude any

evidence of fault on the part of the Defendants who have settled the Plaintiffs' claims against

them, and to preclude any apportionment of fault by the jury, on the ground that Branch River

has elected to have the amount obtained in settlement from the settling Defendants deducted

from any award against this Defendant. See 14 M.R.S. § 165. Given that the Motion is

unopposed, the court infers that the Defendant concurs, and therefore grants the Motion. It is

ORDERED: Branch River Plastics, Inc. may not enter evidence whose sole relevance is to

prove that the settling Defendants were at fault in this matter; and the court will not instruct

the jury to apportion Plaintiffs damages among Defendant Branch River and the settling

Defendants.

4. Plaintiffs Motion in Limine to Exclude Testimony of Craig E. Barnes: This

Motion, which is opposed, seeks to preclude Defendant from calling Craig E. Barnes as a

witness. Mr. Barnes is a professional engineer who participated in testing Branch River

structural insulated panels (SIPs) in the course of the investigation of the Plaintiffs claims that

Branch River's SIPs failed to comply with Plaintiffs specifications. The court has already

ruled that Mr. Barnes will not be permitted to present any expert testimony. See Order On

2
Plaintiffs' Motion In Limine To Exclude Testimony Of Craig Barnes, P.E. And Larry Turner

(Nov. 14, 2014).

Defendant's opposition to the Plaintiffs Motion maintains that Mr. Barnes should still

be considered a fact witness only, not an expert, regarding the testing.

A fact witness's testimony in the form of opinions or inferences is limited to those

opinions or inferences which are (a) rationally based on the perception of the witness and (b)

helpful to a clear understanding of the witness's testimony or the determination of a fact in

issue. M.R. Evid. 70 I. The witness's testimony must be "adequately grounded on personal

knowledge or observation." Chrysler Credit Corp. v. Bert Cote's LIA Auto Sales, Inc., 1998 ME 53,

~ 21, 707 A.2d 1311 (quoting Field & Murray, Maine Evidence 701.1 (4th ed. 1997)).

"[O]pinion testimony that ... is not within the common knowledge of an ordinary person ...

may not be given by a lay witness." State v. Marden, 67S A.2d 1304, 1311 n.5 (Me. 1996); accord

Chrysler Credit, 1998 ME 5S at ~ 22, 707 A.2d at IS 17 (holding that opinion that was "derived

from ... specialized knowledge ... and was not within the realm of the ordinary layperson").

Further, when opinion is derived from ...specialized knowledge ... [it is] not within the realm

of the ordinary layperson. Id.

In this case, Mr. Barnes' testimony must be limited to his personal knowledge of facts

relevant to this case, and any testimony he gives, whether or not in the form of an opinion,

cannot be based on scientific, technical, or other specialized knowledge. This may limit his

admissible testimony drastically, but the court is not prepared to decide that Mr. Barnes has no

admissible testimony at all to offer as a fact witness.

Therefore, the ruling is essentially that Mr. Barnes's status remains as it was

determined to be in the November 14, 2014 Order mentioned above. It is ORDERED:

Plaintiffs Motion in Limine to Exclude Testimony of Craig E. Barnes is granted to the extent

3
that Craig E. Barnes will not be permitted to testify as an expert witness, and is denied as to

any testimony as a fact witness.

5. Plaintiff's Motion In Limine To Exclude Evidence That Arundel Valley Failed

To Mitigate Damages: This Motion, which is also opposed, seeks to preclude Defendant from

offering or eliciting any evidence that Plaintiff failed to mitigate its damages. The basis for the

Motion is that Defendant Branch River has not designated any expert witness to contradict the

Plaintiffs expert evidence that Plaintiff had to take the steps it did in response to the

circumstances underlying Plaintiffs claims.

In Maine, a party who sustains any loss for which another may be liable has a duty to

mitigate damages. See Schiavi Mobile Homes, Inc. v. Gironda, 463 A.2d 722, 724 (Me. 1983); see

also Lindsey v. Mitchell, 544 A.2d 1298 (Me. 1988). In other words, the law requires the injured

party to "use ordinary care and take all reasonable measures within his knowledge and power

to avoid the loss and render the consequences as light as may be; and it will not permit him to

recover for such losses as by such care and means might have been prevented." Schiavi Mobile

Homes, 463 A.2d at 724 (citing Grindle v. E. Express Co., 67 Me. 317,325 (1877)). "The

touchstone of the duty to mitigate is reasonableness. The nonbreaching party need only take

reasonable steps to minimize his losses; he is not required to unreasonably expose himself to

risk, humiliation or expense." Id. at 724-25.

Plaintiff contends its decision to remove the roof relied on the scientific, technical, and

specialized knowledge of its experts. Plaintiff argues that the Defendant, who has not

designated an expert as to the mitigation issue, may not use lay testimony to prove its

mitigation defense.

There is no bright-line rule that requires the affirmative defense of failure to mitigate to

be supported by expert evidence, although "[a] party presenting a failure to mitigate damages

4
defense without expert testimony on causation will do so at his or her own peril." Willis v.

Westeifield, 839 N.E.2d 1179, 1189 (Ind. 2006).

In the court's view, even if Branch River acts at its peril by not presenting expert

evidence to counter the Plaintiffs expert evidence, the Plaintiffs Motion rests on two incorrect

premises-that the only admissible evidence of failure to mitigate would consist of expert

testimony, and that the jury will be compelled to believe Plaintiffs experts. The first premise

is incorrect because, for example, evidence that the Plaintiff removed the Branch River panels

on its own initiative, without any order directing it to do so, clearly could be taken to show

failure to mitigate damages, without any need at all for expert evidence. As to the second

premise, whether or not the Defendant presents expert evidence, Defendant will be permitted

to cross-examine any of Plaintiffs experts on mitigation issues, and this court cannot assume,

before trial, that the jury will credit any expert witness's testimony. It is ORDERED:

Plaintiffs Motion In Limine To Exclude Evidence That Arundel Valley Failed To Mitigate

Damages is denied.

6. Plaintiffs Motion In Limine To Bar Statement That The SIPs Were Not

Defective: This Motion, which is also opposed, seeks an order barring Defendant's counsel

from making any statement or argument to the effective that the SIPs manufactured by

Defendant and installed at the Plaintiffs facility were not defective. The stated ground for the

Motion is that the Plaintiff has developed "ample record evidence," mainly in the form of

opinions from its designated expert witnesses, that the SIPs furnished by Branch River were

defective in various respects. The flaw in this reasoning is that it assumes the credibility and

weight that the jury will assign to that evidence. Thus, in effect, the Motion asks that the

Defendant not be allowed to argue that the jury should reject the Plaintiffs evidence that the

Branch River SIPS were defective, or that the Plaintiff has failed to prove any defect. As

5
Defendant's opposition notes, there is simply no basis for the limitation that the Plaintiff seeks

to impose. Counsel's argument cannot mischaracterize the evidence, but it certainly can

suggest that the opposing party's evidence be discounted or rejected. It is ORDERED:

Plaintiffs Motion In Limine To Bar Statement That The SIPs Were Not Defective is denied.

7. Defendant's Motion In Limine To Exclude Testimony of Paul Malko: This

Motion, which is opposed, seeks to exclude any testimony by Paul Malko, whom Plaintiff has

designated as an expert witness on Defendant's manufacturing process. Defendant's Motion

rests on two grounds: first, that Mr. Malko is not qualified, and second, that his proposed

expert testimony is not relevant.to the warranty claims that remain in this case. Defendant

further notes that Mr. Malko is or was employed by a competitor of Defendant, presumably to

suggest bias. Plaintiff responds to the Defendant's qualification objection by asserting that

Mr. Malko is an engineer with expertise and experience in the manufacture of SIPS. Plaintiff

responds to the relevance objection by asserting that the process by which Defendant's SIPs are

manufactured is relevant to the issue of whether Defendant is in breach of warranty as alleged

in the remaining claims. The court agrees with Plaintiff on both points-assuming the witness

has the background that Plaintiff says he does, the issue becomes one of weight rather than

admissibility. Moreover, the process by which a product is manufactured can be relevant to

whether the product is as warranted. This does not mean that any and all testimony by Mr.

Malko will be allowed, but only that the court is not prepared to exclude the testimony on an in

limine basis. It is ORDERED: Defendant's Motion In Limine To Exclude Testimony of Paul

Malko is denied.

8. Defendant's Motion In Limine Re: Branch River Price Quote and Invoices:

This Motion, which is opposed, seeks to exclude any evidence of a price quote submitted by

Defendant to a former Defendant, House & Sun, for the SIPs furnished by Defendant to

6
Plaintiffs project, as well as Defendant's invoices for those SIPs. The price quote and the

invoices described the SIPs sold by Defendant as "R-Control."

The stated basis for the Motion is that the documents in question are not relevant to

either of the remaining claims for breach of implied warranty of merchantability and breach of

implied warranty of fitness for particular purpose. Defendant's reply to Plaintiffs opposition

correctly notes that there is no express warranty claim in this case, and goes on to argue that

there is no issue ofreliance by Plaintiff.

But the court sees the price quote and invoices as being relevant to indicating exactly

what the Defendant was selling, because exactly what a product purports to be is relevant to

what implied warranties attach to the product, regardless of whether any express warranty is

made.

The implied warranty of merchantability is implicit in a contract for the sale of goods.

11 M.R.S § 2-S 14 (2014). The seller warrants that the goods offered for sale are "fit for the

ordinary purposes for which such [goods] are purchased." Loifano v. Dura Stone Steps, Inc., 569

A.2d 195 (Me. 1990) (citations omitted). The comments to the implied warranty of

merchantability statute indicate:

Goods delivered under an agreement made by a merchant in a given line of trade
must be of a quality comparable to that generally acceptable in that line of trade
under the description or other designation of the goods used in the agreement.
The responsibility imposed rests on any merchant-seller.

11 M.R.S. § 2-S 14 cmt. 2.

The implied warranty of fitness for a particular purpose is narrower than the implied

warranty of merchantability. It requires that:

(1) the purchaser have a particular purpose outside the scope of ordinary purposes; (2)
the seller at the time of contracting has reason to know of the particular purpose; (s) the
seller has reason to know that the purchaser is relying on the seller's skill or judgment
to furnish appropriate goods; and (4) the purchaser must, in fact, rely upon the seller's
skill or judgment.

7
Lorfano v. Dura Stone Steps, Inc., 569 A.2d 195, 197 (Me. 1990).

The price quote and invoices that Defendant seeks to exclude are relevant to both of the

Plaintiffs warranty claims. Plaintiff offers the contested documents into evidence to

demonstrate not only that it had an expectation that R-Control Air-Flo SIPs would be

delivered, but that the Defendant agreed to deliver-and purported to deliver-R-Control Air­

Flo SIPs to Plaintiffs project. Plaintiff contends that the products that were ultimately

delivered, however, were not merchantable as R-Control Air-Flo SIPs and also were not fit for

Plaintiffs particular purpose. The price quote and invoices indicating that R-Control SIPs

would be provided and were provided are thus relevant to whether the Defendant breached the

implied warranties of merchantability and fitness for particular purpose.

Of course, the Defendant remains free to argue that the R-Control designation has no

bearing on the performance of a SIP for purposes of either the implied warranty of

merchantability or the implied warranty of fitness for particular purpose, and that, too, is an

issue in the case. But the question at hand is one of relevance, and under the broad standard of

relevance reflected in M.R. Evid. 401-02, the quote and invoices are relevant and admissible. It

is ORDERED: Defendant's Motion In Limine Re: Branch River Price Quote and Invoices is

denied.

Dated Junes, 2015
A. M. Horton, Justice

8
Arundel Valley, LLC and Kate's Homemade Butter, Inc., Daniel J. Patry and Karen
I. Patry v. Peachey Builders, Inc.; Gary R. Peachey; Kevin Brown Architecture,
LLC; Kevin Brown; Branch River Plastics, Inc.; Robert Mayo; House & Sun, Inc.,
and Kel House

BCD-CV-13-15

Arundel Valley, LLC and Kate's Homemade Butter, Inc.
Daniel J. Patry and Karen I. Patry
Plaintiffs/ 3rd Party Plaintiffs

Counsel: Timothy Bryant, Esq.
One City Center
PO Box 9546
Portland, ME 04112-9546

Branch River Plastics, Inc. and Robert Mayo
Defendant

Counsel: Martica Douglas, Esq.
103 Exchange St.
PO Box 7108
Portland, ME 04112-7108
STATE OF MAINE BUSINESS AND CONSUMER COURT

Cumberland, ss. Location: Portland
Docket No.: BCD-CV-IS-15 ./

)
ARUNDEL VALLEY, LLC et al., )
)
Plaintiffs, )
)
v. )
) ORDER ON DEFENDANTS' MOTION
BRANCH RIVER PLASTICS, INC., et ) FOR SUMMARY JUDGMENT
al., )
)
Defendants. )

I. INTRODUCTION

Defendants Branch River Plastics, Inc., ["Branch River"] and Robert Mayo

[collectively "Defendants"] move for summary judgment with respect to all counts asserted

against them by Plaintiffs Arundel Valley, LLC ["Arundel"] and Kate's Butter, Inc. ["Kate's"].

The Complaint alleges that Branch River is liable--and Mr. Mayo is personally liable--to

Plaintiffs for damages arising out of roof panels supplied by Branch River to Arundel's butter

making facility [the "Facility"] during construction.

II. MATERIAL FACTS

The following facts are undisputed, except where noted:

Arundel owns a butter-making facility in Arundel, Maine. (Supp. S.M.F. ~ l; Opp.

S.M.F. ~ 1.) Kate's leases the premises from Arundel and runs a butter manufacturing

operation. 1 Both companies are owned and operated by Dan and Karen Patry. (Supp. SJvl.F. ~

S; Opp. S.M.F. ~ s.) Dan Patry has authority to make decisions on behalf of Arundel with

1 Kate's was started by the Patrys in the basement of their Old Orchard Beach home. The Patrys sought
to expand their home business into the technologically advanced Facility. (Pls.' Opp. Mot. 1-2 )

1
respect to the design and construction of the Facility. (Supp. S.M.F. ~ 4; Opp. S.M.F. ~ 4.) In

preparation for the construction process, the Patrys hired a team of professionals-including

architect Kevin Browne ("Browne"), general contractor Peachey Builders, and other design

professionals. (Defs.' Addt'l S.M.F. t;[ 3; Opp. Defs.' Addt'l S.M.F. ~ 3.) Mr. Patry intended to

construct an energy efficient facility by utilizing Structural Insulated Panels ("SIPs"). 2 (Supp.

S.M.F. ~ 11; Opp. S.M.F. t;[ 11.); (Defs.' Addt'l S.M.F. t;[ 4.)

Branch River, manufactures "expanded polystyrene building and packing products,"

including SIPs (Supp. S.M.F. t;[~ 6-7; Opp. S.M.F. 1111 6-7.) In September 2011, Arundel

entered into a contract with Peachey Builders to construct the foundation and exterior shell of

the Facility. (Supp. S.M.F. 11 9; Opp. S.M.F. ,I 9.) Under the terms of the contract, the roof

and the walls of the Facility were to be constructed with SIPs. (Supp. S.M.F. 11 10.) Mr. Patry

made clear his intention to utilize SIPs in the construction and gave Peachey Builders the

responsibility of procuring appropriate materials. 5 (Supp. S.M.F. t;[ IS; Opp. S.M.F. t;[ IS.)

Peachey Builders contacted House & Sun, a distributor of solar and green building materials

located in'Brooksville, Maine, to obtain an estimate on the SIPs required for the construction of

the Facility. (Supp. S.M.F. 1) 14.) Peachey Builders gave House & Sun preliminary drawings

prepared by architect Browne. (Supp. S.M.F. t;[ 16.) Thereafter, House & Sun hired Branch

River to prepare drawings depicting a configuration of roof and wall SIPs. 4

2SIPs consist of two pieces oforiented strand board with a core of"expanded polystyrene foam in
between." (Defs. Addt'l S.M.F. ~ 6.) SIPs prevent a "hot roof' and help to prevent ice damming,
accumulation of condensation, and shortening of the lifespan of shingles. (Pls.' Comp!. ,r S5.)

s The contract allowed Arundel to "sign off' on the products procured. (Opp. S.M.F. ,11S.)

4 Arundel denies that any drawings were ever prepared. (Opp. S.M.F. ,r 17.)

2
At the time, Branch River's website is alleged to have indicated that it was licensed to

manufacture R-Control Products from AFM Corporation.5 (Pis.' Opp. Mot. S.) Further,

according to Arundel, Kevin Arcand, an employee of Branch River, indicated to House & Sun

that the SIPs provided would be licensed R-Control products. (Pls.' Opp. Mot. 2.) Branch

River, however, points out that the initial drawings prepared for the project indicated that the

roof would be comprised ofvented SIPs and was labeled "Air-Flo" SIPs, not R-Control Air-Flo

SIPs. Architect Browne reviewed and approved said drawings for general conformance with

the design concept of the project. (Supp. S.M.F.1[ 18; Opp. S.M.F. 1[ 18.)

On January 17, 2012, Branch River submitted a proposal or estimate6 to House & Sun

for the sale of the SIPs to be used in the project. (Supp. S.M.F. 1[ 19; Opp. S.M.F.1[ 19.)

Branch River's proposal or estimate did not indicate that Branch River's SIPs would be R­

Control. On January 28, 2012, Kel House, of House & Sun, accepted Branch River's proposal or

estimate. (Supp. S.M.F. ~ 20; Opp. S.M.F. ~ 20.) Under the Terms & Conditions, Branch

River indicated the materials were subject to a "Standard Panel Warranty." 7 (Supp. S.M.F. ~

21; Opp. S.M.F. ~ 21.) Thereafter, the Panels were delivered directly to the Facility jobsite. 8

Branch River provided instruction to the crew that installed the panels and Branch River's

5 R-Control is a registered trademark ofAFM Corporation. AFM makes its products available to
licensed facilities. Said licensed facilities must adhere to consistent standards to ensure high quality
products. (Pls.' Compl. 11 34.) R-Control SIPs are manufactured under carefully controlled conditions
and are recognized as per se code compliant. They are designed to block wind and moisture for high­
energy efficiency. Branch River has a license to manufacture R-Control products. (Defs.' Addt'l S.M.F.
1f 1f 10-lS.)
6 The parties disagree as to whether there this was a proposal or an estimate.

7 The Plaintiffs never received a copy of the Standard Panel Warranty until after dispute arose between

the parties. (Defs.' Addt'l S.M.F. 1f s l; Opp. Defs.' Addt'l S.M.F 1f s 1.)

s Branch River contends that it never received notice of any problems with the delivered SIPs upon
delivery or installation. (Supp. S.M.F. 1f 24.) Arundel contends that Branch River was aware that "SIP
Tape" had not been delivered with the panels. (Opp. S.M.F. 11 25.)

3
sales manager visited the jobsite to guide Peachey Builders in the installation of the panels.

(Defs.' Addt'l S.M.F. ~ S6; Opp. Defs.' Addt'l S.M.F. 'S6.)

The contract between Arundel and Peachey Builders did not require R-Control SIP

panels, but specified that the SIPs used in constructing the roof and the walls ofthe Facility

should have "built-in airflow channels.'' (Supp. S.M.F, 26; Opp. S.M.F ~ 27.) Branch River

provided vented "Air-Flo" SIPs for the roof. (Supp. S.M.F ~ 27 .) However, these panels were

not licensed "R-Control" SIPs as Arundel had supposedly expected and as Branch River

allegedly represented. 9 (Opp. S.M.F. ~ 27.) After the installation ofthe SIPs provided by

Branch River, Dan Patry designated his son, Chris Patry, a civil engineer, to assist in the

project. (Supp. S.M.F ~ 29; Opp. S.M.F ~ 29.)

Upon speaking with a representative of R-Control, Chris Patry learned that the

installed SIPs were not R-Control Air-Flo SIPs. 10 (Opp. S.M.F. ~ 34.) Thereafter he contacted

Branch River to request proof that the installed SIPs met the structural load capacity required

by the town's Building Code. (Supp. S.M.F. ~ 34) That contact appears to have been the first

direct contact between Arundel and Branch River-Dan Patry and Chris Patry admitted not

having known that Branch River was the manufacturer of the SIPs provided to the project until

after the SIPS had been purchased and installed. (S.M.F. ~~ 28-80)

Branch River contends that while R-Control SIPs were not provided to the Plaintiff, the

Plaintiff was provided with "Air-Flo SIPs." Branch River avers that there is no crucial

9 Arundel contends that the SIPs received were non-R-Control and therefore were not per se code
compliant. Arundel contends that Branch River is not a manufacturer of R-Confrol products as they
represented because they do not have a quality control manager. Such manager is alleged to be required
in order for Branch River to maintain its R-Control license. (Pls.' Opp. Mot. 5.)

10 On May 50, 2012, Chris Patry contacted Kel House to inquire about the factory warranty on what he
thought to be R-control SIPs. (Supp. S.M.F. 1J 51; Opp. S.M.F 11 51.) Chris Patry was concerned that
the absence of SIP tape may void the warranty. House then contacted Bob Mayo, the President of
Branch River, to as whether the warranty on the panels would still be honored. (Supp. S.M.F. 1J 51)
Branch River agreed to maintain the warranty notwithstanding the absence of SIP tape. (Supp. S.M.F. 1J
S2; Opp. S.M.F 11 52.)

4
difference between the two and they are manufactured by using exactly the same process.

Branch River further insists that the only difference between the two is that Air-Flo SIPs have

vents cut into one side of the polystyrene core. (Opp. Defs.' Addt'l S.M.F. , 17.)

However, James Nagle, the Code Enforcement Officer for the Town of Arundel issued a

verbal stop-work order to Peachey Builders and Arundel. (Supp. Addt'l S.M.F., 7; Opp. Defs.'

S.M.F. ~ 27.) The parties dispute the circumstances under which Mr. Nagle issued the stop­

work order. However, the undisputed facts indicate that he directed that work stop until the

load capacity of the installed SIPs could be determined. (Opp. Defs.' Addt'l S.M.F. ~ 27.)

Robert Mayo, the president of Branch River, arranged to have sample Branch River

SIPs tested for load bearing capacity, to demonstrate that the panels were in compliance with

the Building Code. (Supp. S.M.F. ~, 35, 36.) However, Arundel contests the validity of the

test, as the panels tested were not the panels actually installed. (Opp. Defs.' Addt'l S.M.F. ~

S5.) Chris Patry contacted Kevin Chamberlain, a registered professional engineer, who

determined that there was a number of installation and manufacturing deficiencies in the

Branch River SIPs as installed which could diminish the useful life of the roof. (Supp. S.M.F. ,

40; Opp. S.M.F , 40.) As a result of this finding, Dan Patry had the roofremoved from the

Facility and replaced with a roof constructed of SIPs manufactured by Foard Panel. (Supp.

S.M.F. ~ 47; Opp. S.M.F.' 47.)

III. STANDARD OF REVIEW

To survive a motion for summary judgment on a claim, "the [party asserting the claim]

must establish a prima facie case for each element of [its] cause of action." Bonin v. Crepeau,

2005 ME 59, ~ 8, 873 A.2d S46. Summary judgment is appropriate when there is no genuine

issue as to any material fact and the moving party is entitled to judgment as a matter of

law. M.R Civ. P. 56(c). A "material fact" is one that can affect the outcome of the case, and a

5
genuine issue exists when there is sufficient evidence for a fact finder to choose between

competing versions of the fact. See Lougee Conservancy v. CitiMortgage, Inc., 2012 ME 10S, ~ 11,

48 A.sd 774. Although parties may differ as to the legal conclusions to be drawn from the

record, summary judgment is proper where the facts are not in dispute. See S.D. Warren Co. v.

Town efStandish, 1998 ME 66, ~ 9, 708 A.2d 1019. The court views the evidence in the light

most favorable to the non-moving party. Webb v. Haas, 1999 ME 74, ~ 18, 728 A.2d 1261.

IV. DEFENDANTS' MOTION

The Motion for Summary Judgment of Defendants Branch River and Robert Mayo

seeks summary judgment on all of the seven counts of the Plaintiffs' Complaint that pertain to

Branch River and Mr. Mayo. The moving Defendants contend that the claims contained in

Counts V through VIII (negligence, tortious interference, negligent misrepresentation, and

intentional misrepresentation) of the Plaintiffs' Complaint are barred by the economic loss

doctrine. They contend that Count X (unjust enrichment) is barred by the availability oflegal

remedies, and that Counts XI and XII (breach of warranties of merchantability and fitness for

particular purpose) are barred because the Plaintiffs failed to meet conditions necessary to

trigger Branch River's liability on its warranty for the panels.

Defendants further contend that notwithstanding the economic loss doctrine, the

Plaintiffs' tort claims fail because Plaintiffs' have not made a primafacie showing that either

Defendant is liable for any of the tort claims asserted. (Defs.' Supp. Mot. 1, 7) (citing Davis v.

R.C. Sons Pavin, Inc. 26 A.sd 787, 790 (Me. 2011 )). Specifically, the Defendants contend that

relief is provided for tortious interference of contract "wherever a person, by means of fraud or

intimidation, procures, either the breach of a contract or the discharge of a plaintiff, from an

employment, which but for such wrongful interference would have continued." MacKerron v.

Madura, 445 A.2d 680, 68S (Me. 1982) (citing Perkins v. Pendleton, 90 Me. 166, 176, S8 A.96, 99

6
( 1897). The Defendants argue there is no factual basis for claiming that plaintiffs were forced

to breach a contract as a result of fraud or intimidation by Branch River. (Defs.' Supp. Mot. 8.)

Defendants also contend that Plaintiffs fail to meet the elements of both negligent and

intentional misrepresentation as well as an equitable claim for unjust enrichment. Defendants

aver that there is no basis for the Plaintiffs' claim against Robert Mayo personally as Plaintiffs

cannot identify facts sufficient to state a plausible basis for imposing personal liability on

Robert Mayo for damages associated with deficiencies in products manufactured and sold by

the corporation. The court analyzes these arguments below.

Defendants also challenge the Plaintiffs' removal of Branch River's SIPs as being

unnecessary and unjustified. They point out that the DeStefano & Chamberlain report

recommended that the roof be repaired due to serious installation errors, not because of any

product defect. (Defs.' Supp. Mot. 11.) The Defendants contend that the Plaintiffs lack

evidence to prove that their decision to remove the roof was reasonable or necessary because of

a product defect. (Defs.' Supp. Mot. 12.)

The Defendants next argue that Kate's is an improper party to this action, because

Kate's is not the owner of the subject Facility and did not enter into a contractual relationship

with the Defendants.

Branch River further argues that its warranty obligations are controlled by its 20-year

factory warranty ["Warranty"]. Branch River contends that it sold the SIPs to House & Sun

pursuant to a purchase order which provided that the standard Warranty applied. (Defs.' Supp.

Mot. 9.) Said Warranty expressly warrants that the SIPs "will be free from defects in materials

and workmanship on the date of final delivery to the Owner or Owner's representative." Id.

However, Branch River asserts that said its liability on its Warranty was subject to conditions

7
that the Plaintiffs failed to fulfill. 11 Branch River argues that the Plaintiffs failed to have

sampling and testing conducted in accordance with specified ASTM Test methods. Further,

the Warranty was conditioned upon installation of the SIPs in strict accordance with SIP

specifications and guidelines in effect at the time ofinstallation. 12

The Defendants contend they are entitled to summary judgment on the warranty claims

asserted in Counts XI and XII of the Plaintiffs' Complaint "because the express condition

pursuant to which Mayo agreed to maintain the Warranty was not fulfilled and because no

approved testing was conducted by or at the behest of plaintiffs to demonstrate that the panels

did not meet warranty value." (Defs.' Supp. Mot. 10.) Thus, if the Plaintiffs are permitted to

proceed with their warranty claims, Branch River argues that its liability should be limited only

to the original purchase price of the SIPs.

V. DISCUSSION

Economic Loss Dodrine

The Maine Law Court wiequivocally adopted the economic loss doctrine in the matter

Oceanside at Pine Point Condominium Owners Assn. v. Peachtree Doors, 659 A.2d 267 (Me. 1995).

In Peachtree, the Law Court defined economic loss as "damages for inadequate value, costs of

repair and replacement of defective product, or consequent loss ofprofits -without claim of

personal injury or damage to other property.'' Id. at 270 n.4 (quoting Moorman Mfg. Co. v. Nat'l

Tank Co., 4S5 N.E.2d 44S, 449 (Ill. 1982)). Thus, absent evidence ofpersonal injury or

property damage, "[c]ourts generally ... do not permit tort recovery for a defective product's

11 The warranty language indicated that ifthe SIPS failed to meet Warranty value after sampling and
testing, Branch River would deliver replacement SIPs or a refund of the original purchase. However,
the values of the refund shall not exceed the original purchase price of the SIPs. (Defs.' Supp. Mot. 10.)

12 In this case, while the Plaintiffs failed to utilize SIP tape in the installation of the roof, Mayo agreed

that an alternative sealing procedure could be utilized to maintain the warranty. (Defs.' Supp. Mot. 10.)

8
damage to itself" Id. at 273; see also In re Hannaford Bros. Co. Customer Data Security Breach

Lltzg., 61S F. Supp. 2d 108, 127 (D. Me. 2009).

The Law Court in Peachtree further determined "[d]amage to a product itself ...

means simply that the product has not met the customer's expectations, or, in other words, that

the customer has received 'insufficient product value."' Peachtree, 659 A.2d at 270. The

doctrine requires courts to "distinguish between a situation where the injury suffered is merely

the 'failure of the product to function properly ... [and] those situations, traditionally within

the purview of tort, where the plaintiff has been exposed, through a hazardous product, to an

unreasonable risk of injury to his person or property."' Fireman's Fund Ins. Co. v. Childs, 52 F.

Supp. 2d 139, 142 (D. Me. 1999) (applying Maine law) (citing East River S.S. Corp. v.

Transamerica Delaval, Inc., 476 U.S. 858, 868 (1986)).

The applicability of the economic loss doctrine is examined in the context of

the particular tort claims asserted by the Plaintiffs.

Plaintiffs' Negligence Clazm

In Count V of Plaintiffs' Complaint, Plaintiffs allege the Defendants were negligent in

supplying the appropriate R-Control Air-Flo SIPs. The Plaintiffs contend that Defendant

Branch River held itself out as capable of producing R-Control Air-Flo SIPS and subsequently

breached any duty owed by failing to provide the appropriate SIPs. 13 (Pls.' CompJ. ~~ 126-27.)

Branch River contends that Plaintiff.<;' negligence claim is barred by the economic loss doctrine

15 ''Negligent act" has been defined by the Maine Law Court as:

[A] violation of the duty to use reasonable care toward another .... To sustain a cause of action
in negligence, the plaintiff must prove (1) that the defendant owed plaintiff a duty of care, (2)
that the defendant breached that duty, and (S) that the breach was an actual and legal cause of
the injury suffered by the plaintiff.

Alibert~ LaRochelle & Hodson Eng'g Corp. v. F.D.I.C., 844 F. Supp. 8S2, 844 (D. Me. 1994) ( citing Wing v.
Morse, SOO A.2dd 491, 495-96 (Me. 197S); Parker v. Harriman, 516 A.2d 549, 550 (Me. 1986)).

9
because it is based solely on the assertion that Branch River failed to provide the goods

allegedly requested and because Arundel faces only wholly economic damages.

A decade ago, the Federal District Court for the District of Maine applied the economic

loss doctrine to preclude recovery in tort where parties to commercial contracts sought to

recover in both tort and contract. See Me. Rubber Int'l v. Envtl. Mgmt. Grp., Inc., 298 F. Supp. 2d

133, 138 (D. Me. 2004). However, Plaintiffs raise an argument that makes the application of

the economic loss doctrine less clear. Plaintiffs contend that no contractual relationship exists

between the parties. Rather it was Peachey Builders, Arundel's general contractor, who

negotiated with Branch River to obtain the SIPs. To date, the law in Maine is unsettled as to

whether the economic loss doctrine will bar a claim in tort when the damage is wholly

economic, and when there is no contractual relationship between the parties. Fireman's Fund,

52 F. Supp. 2d at 143-44; Banknorth, N.A. v. BJ's Wholesale Club, Inc., 394 F. Supp. 2d 283 (D.

Me. 2005).

A few courts in the United States hold "that since the principle behind the economic loss

doctrine is to prevent tort law's unreasonable interference with principles of contract law, the

economic loss doctrine does not apply where there is no contractual relationship, and thus no

privity between the parties." Pwurde Sand & Gravel v. JG! E., Inc., 917 A.2d 1250, 1254 (2007)

(citing Trinity Lutheran v. Dorschner Excavating, 710 N.W.2d 680, 683 (Wis. 2006); Indemnity

Ins. Co. v. Am. Aviation, 891 S0.2d 532, 534 (Fla. 2004)). However, a majority ofjurisdictions

that have decided the issue hold that "[p]rivity of contract is not an element of the economic

loss doctrine," based on the rationale is that "commercial disputes ought to be resolved

according to the principles of commercial law rather than according to tort principles .... A

disputant should not be permitted to opt out of commercial law by refusing to avail himself of

10
the opportunities which that law gives him." Miller v. U.S. Steel Corp., 902 F.2d 57 S, 57 5 (7th

Cir. 1990). 14

The Plaintiffs argue that this court should follow the contractual relationship analysis

and decline to apply the economic loss rule because the Plaintiffs are not in privity with the

Defendant and therefore cannot recover its economic loss in an action for breach of contract. 15

However, this argument ignores the fact that there was no privity of contract between the

plaintiff condominium association and the defendant window manufacturer in Peachtree, and the

Law Court nonetheless applied the economic loss doctrine to bar the association's tort claims.

Injecting negligence liability into what is fundamentally a breach of warranty case not

involving any damage to person or property would be inappropriate, because it would displace

predictable contractual and warranty liability defined in the course of the transaction in favor of

tort liability determined after the fact. The world of contract depends on large part on

predictability ofrights and obligations. Clearly, when a product causes personal injury or

property damage, the harm can legitimately be viewed as a breach of a societal duty sounding

in tort, as well as a breach of contractual and warranty duty, and tort remedies come into play,

but when the product simply fails to perform as expected or guaranteed, there is no reason to

depart from contractual and warranty remedies. This is essentially the basis for the Peachtree

decision, and the court is constrained to follow it.

For these reasons, Defendants will be granted summary judgment on Plaintiffs'

negligence claim in Count V.

1"' See also East River S.S. Corp. v. Transamerica Delaval, Inc., 476 U.S. 858, 875 ( 1986); Rardin v. T & D

Machine Handling, Inc., 890 F.2d 24, 28; Anderson Electric, Inc. v. Ledbetter Erection Corp., 50.9 N.E.2d 246,
249 ( 1986).

15 The rationale behind the Plaintiffs' argument is that the Defendant likely knew or should have known

the effect of its negligence on the Plaintiff.

11
Plaintiffs' Negligent Misrepresentation Claim
In Maine a party will be held liable for negligent misrepresentation "if in the course of

his business he supplies false information for the guidance of others in their business

transactions, and the other party justifiably relies upon it to his pecuniary detriment." Guiggey

v. Bombardier, 615 A.2d 1169, 117S (Me. 1992) (citing Chapman v. Rideout, 568 A.2d 829, sso

(Me.1990)); see also Restatement (Second) ofTorts§ 552.

In this case, the Plaintiffs identify the following bases for their misrepresentation claim:

Branch River was aware that the SIPs provided were to be used in the construction of Kate's

butter-making Facility. Branch River represented directly to Peachey Builders and other

agents ofArundel that the SIPs provided would be R-Control Air-Flo SIPs. (Pls.' Opp. Mot.

10.) Branch River knew or should have known that the SIPs provided were not in fact R­

Control Air-Flow SIPs. Because the SIPs were not as allegedly promised, Arundel had to

remove the SIPs at great expense. 16 (Pls.' Opp. Mot. 11.)

There is a divide among jurisdictions concerning whether the economic loss doctrine

permits recovery for wholly economic losses resulting from negligent misrepresentation on the

part of the contracting parties or their agents. See Gannett v. Pettegrow, Civ.OS-CV-228-B-W,

2005 WL 2170S6 (D. Me. Jan. 28, 2005) report and recommendation adopted sub. nom. Gannet v.

Pettegrow, Civ.os-CV-228-B-W, 2005 WL 763276, at *7 (D. Me. Feb. 17, 2005). However, in

Peachtree, the Law Court applied the economic loss doctrine to negligent misrepresentation

claims in products liability cases not involving personal injury or damage to property other

than the product itself Oceanside at Pine Point Condo. Owners Ass'n v. Peachtree Doors, Inc., 659

1s Arundel contends that that Branch River represented itself as a seller ofR-Control products and

understood Arundel's project as requiring R-Control panels. Arundel asserts that Branch River knew
or should have known that what they supplied to the project was not in fact R-Control materials.

12
A.2d 267,273 (Me. 1995) (affirming the trial court's grant of summary judgment on a negligent

misrepresentation claim); see al.so Maine Rubber, 298 F. Supp. 2d at 1S6.

Some exceptions to the rule have been identified in certain limited circumstances in

Maine trial court decisions. For example, in Pendleton Yacht Yard, Inc. v. Smith, the Superior

Court declined to apply the economic loss doctrine to a negligent misrepresentation claim

where conduct by the defendant arose outside the scope of the contract. In Pendleton, the

plaintiff had a contract with Marine Design & Survey, Inc. for an audio-gauging inspection to

be completed on a landing craft the plaintiff considered purchasing. 200S WL 21714927, at * I

(Me. Super. Mar. 24, 200S). The defendant, who was an accredited and certified marine

surveyor, performed the requested services under the contract. 17 Id. However, it was alleged

that the defendant made further observations and rendered opinions as to the condition and

value of the boat that induced the plaintiff into purchasing the vessel. The court noted that any

conduct by the defendant outside of the scope of the contract "would give rise to an action in

tort notwithstanding the economic loss doctrine." Id. at 5.

In a Maine Business & Consumer Court case, the court also recognized an exception to

the economic loss doctrine. Camden Nat. Bank v. D & F Properties, LLC, BCD-WB-RE-10-16

(Bus & Consumer Ct. Oct. s, 2011, Nivison J.). In Camden, the Bank funded the

defendants/ counterclaim plaintiffs' purchase of commercial real estate in Monmouth, Maine

where the defendants operated a convenience store and gas station known as the Pit Stop. The

defendants relied on the professional expertise of a loan representative on behalf of the Bank.

The representative promised that that the defendants would be timely funded by the Bank. In

reliance on the representative's statements, the defendants began spending operating capital on

17 The court noted, "[T]he circumstances surrounding the contract may give rise to an independent

duty to exercise due care or similar duty in tort, in which case a breach may be actionable under both
tort and contnict theory." Pendleton, 2003 WL 217 H927, at *S.

13
renovations for the Pit Stop. Id. at S. Ultimately, as a result of delay in funding, the defendants

defaulted on their loans and had to close the business. The Bank seized the defendants'

accounts and instituted foreclosure proceedings. Given this set of facts, the court refused to

apply the economic loss doctrine, noting "the doctrine does not apply appl[y] to claims of

misrepresentation." Id. at 4.

While both of the above mentioned cases hint that there might be an exception to the

economic loss doctrine as it applies to claims of misrepresentation, this view has yet to be

adopted by the Law Court. As noted above, among the claims that the Law Court held in

Peachey to be barred by the economic loss doctrine was a claim for negligent misrepresentation.

Further, neither Pendleton nor Camden involved a product as opposed to a service, and

can be distinguished from the facts in Peachtree and in this case on that ground alone. As in

Peachtree and Maine Rubber, "the critical issue here ... is value and quality of what was

purchased," and there is no reason not to limit the Plaintiffs to their remedies provided under

the product warranties that apply. Thus, the Plaintiffs' negligent misrepresentation claim is

barred by the economic loss doctrine. Defendants are entitled to summary judgment on the

negligent misrepresentation claim in Count VII of the Complaint.

Plaintiffs' Intentional Misrepresentation Claim

The applicability of the economic loss doctrine to a claim of intentional

misrepresentation is an open question under Maine law. See American Aerial Servs. v. Terex

USA, LLC., No. 2:12-cv-OOS61-GZS (D. Me. May 7, 201S). In Maine, fraudulent

misrepresentation and intentional misrepresentation have been treated as the same tort.

Camden Nat. Bank v. D & F Properties, LLC., BCD-WB-RE-10-16 (Bus. & Consumer Ct. Oct. S,

2011, Nivison, J) (equating intentional misrepresentation and fraud). To prevail on a claim of

fraudulent/intentional misrepresentation, the plaintiff must show:

14
(1) that [the Defendant] made a false representation (2) of a material fact 18 (S) with
knowledge of its falsity or in reckless disregard of whether it is true or false (4) for the
purpose of inducing plaintiff to act in reliance upon it, and (5) plaintifl[s] justifiably
relied upon the representation as true and acted upon it to [their] damage.

Mariello v. Giguere, 667 A.2d 588, 590 (Me. 1995) (citing Guiggey v. Bombardier, 615 A.2d 1169,

l l 7S (Me. 1992)). 19 In the case at hand, Arundel contends the Defendants misrepresented that

the SIPs provided were R-Control SIPs and that said SIPs were per se code compliant. Branch

River allegedly knew that the SIPs provided were not R-Control as represented and as a result

of Plaintiffs' reliance on the misrepresentations the Plaintiffs sustained pecuniary losses.

While the economic loss doctrine typically bars tort claims for wholly economic losses,

Maine courts have held that the economic loss rule is inapplicable to fraud claims because in

such claims "Plaintiffs injury is sustained at the time he makes the purchase in reliance on

Defendant's purposeful misrepresentation." Everest v. Leviton Mfg. Co., 2006 Me. Super. Lexis

12, at *5-*6 (Jan IS, 2006). Further, sister states have also recognized that the economic loss

doctrine does not apply in instances where the tort is intentional. First Choice Armor & Equip.,

Inc. v. Toyobo Am., Inc., 717 F. Supp. 2d 156, 16S (D. Mass. 2010) ("Although the economic loss

doctrine bars recovery for pure economic loss in negligence and strict liability cases, it does not

apply in instances where the tort is intentional.").

Arundel's fraud claim is based on alleged misrepresentations Branch River made to

induce it to buy its products, independent of any breaches of warranty. In essence, the

Plaintiffs allege that Branch River intentionally represented its SIPs to be R-Control SIPS

when in fact they were not, and that Arundel purchased the SIPs in reliance on that

18 "To be material, the false or fraudulent representation must 'not only influence the buyer's judgment
in making the purchase but also must relate to a fact which directly affects the value of the property
sold."' Mariello, 667 A.2d at 590 (citing Bolduc v. Therrien, 147 Me. S9, 4S, 8S A.2d 126, 129 ( 1951)).

19Each of the above elements must be proved by clear and convincing evidence. Butler v. Poulin, 500
A.2d 257, 260 n. 5 (Me. 1985).

15
misrepresentation. Their contention regarding a misrepresentation is supported by statements

on the Branch River website. They also contend that a Branch River employee told an

employee of House & Sun that Branch River's SIPS would be R-Control. However, the

remainder of the allegation-reliance on the alleged misrepresentation-lacks support in the

record.

Nothing in any written contract or proposal in the record required Branch River to

supply R-Control SIPS. There is no evidence that Branch River or Mr. Mayo represented to

Plaintiffs before the purchase that Branch River would be supplying licensed R-Control SIPS to

the Facility, or that Plaintiffs sought any assurances to that effect. There is also no evidence

that either of the Plaintiffs dealt with Branch River or relied on the Branch River website.

Moreover, even assuming, as the court does in taking disputed facts in a light most favorable to

the Plaintiffs, that a Branch River employee told a subcontractor that Branch River SIPS would

be R-Control SIPS, Branch River's failure to provide what was supposedly promised does not

equate to a valid claim of fraud or intentional misrepresentation.

In fact, the Complaint undercuts Arundel's claim by alleging, on information and belief,

that the parties that did deal directly with Branch River-Peachey, House and Browne--knew

that the SIPS to be provided by Branch River to the Facility were not R-Control SIPS. See

Complaint ~~ 168-71.

Finally, because there is no mention of R-Control being a requirement in any contract

or proposal in what appears to have been an extensively documented project, the record

evidence suggests that R-Control did not become a concern, much less a requirement, until

well after the installation process was underway.

16
Thus, Plaintiffs have not made out a prima facie showing of fraud or intentional

misrepresentation, much less proffered any clear and convincing evidence of such, on anyone's

part, and Defendants are entitled to summary judgment on Count VIII of the Complaint.

Plaintijfs' Tortious Interference with Contract Claim

Maine law is silent on whether the economic loss doctrine will bar a claim for tortious

interference with contract. However, a majority of states recognize that the economic loss

doctrine normally does not bar recovery for tortious interference. 20 In Maine, to establish a

claim for tortious interference with contractual relations, a plaintiff must prove the following:

"( 1) that a valid contract or prospective economic advantage existed; (2) that the defendant

interfered with that contract or advantage through fraud or intimidation; and (S) that such

interference proximately cause damages.'' 21 Currie v. indus. Sec., Inc., 2007 ME 12, ~ SI, 915

A.2d 400 (quoting Rutland v. Mullen, 2002 ME 98, ~ IS, 798 A.2d. 1104). Under Maine law, a

tortious interference claim requires either a valid contract or prospective economic advantage.

Id.

In this case, Plaintiffs had a valid contract with Peachey Builders for the planning and

construction of the Facility. The design submittals presented to Arundel under the contract

20 See general!J Bankers Risk Mgmt. Services, Inc. v. Av-Med Managed Care, Inc., 697 So. 2d 158, 161 (Fla.

Dist. Ct. App. 2d Dist. 1997) ("The economic loss rule has not eliminated causes of action based upon
torts independent of the contractual breach even though there exists a breach of contract action. Where
a contract exists, a tort action will lie for either intentional or negligent acts considered to be
independent from acts that breached the contract."); Reengineering Consultants, Ltd. v. EMC Corp., 2009
WL 113058 (S.D. Ohio 2009) (the economic loss doctrine is limited to negligence, and therefore does
not apply to intentional interference with contractual relations); Kayser v. McClary, 87 5 F. Supp. 2d 1167,
1176 (D. Idaho 2012) ("[F]irst, a claim for tortious interference with contract is intended to protect a
party's economic interest in contractual relations. Accordingly, economic losses must be recoverable and
it would not be sensible for the tort to be recognized under Idaho law on one hand, and then effectively
eviscerated by application of the Economic Loss Doctrine on the other hand.").

21"Intimidation is not restricted to frightening a person for coercive purposes, but rather exists
wherever a defendant has procured a breach of contract by making it clear to the party with which the
plaintiff had contracted that the only manner in which that party could avail itself of a particular benefit
of working with defendant would be to breach its contract with plaintiff."
Currie, 2007 ME 12, ~ SI, 915 A.2d 400 (quoting Pombriant v. Blu.e Cross/Blue Shield efMaine, 562 A.2d
656,659 (Me. 1989)) (citations omitted).

17
required that SIPs be used in the construction of the Facility. While Plaintiffs expected the

SIPs to be R-Control SIPs, the contract did not specify that R-Control SIPs be used. Plaintiffs

contend that in order to save money on the transaction, Branch River knowingly provided SIPs

that were not R-Control. 22 However, the Plaintiffs have failed to present evidence that Branch

River's failure to provide the expected SIPs interfered with the contract through fraud or

intimidation. Because the Plaintiffs have not met the requisite elements necessary to sustain

claim for tortious interference with contract, the court will grant summary judgment on this

claim.

Plaintiffs' Uniust Enrichment Claim

"An unjust enrichment claim is brought to recover the value of the benefit retained

when there is no contractual relationship, but when, on the grounds of fairness and justice, the

law compels performance of a legal and moral duty to pay." U.S. Bank, Nat. Ass'n v. Thomes,

201S ME 60, ~ 14, 69 A.sd 411 (citing Estate efMiller, 2008 ME 176, ~ 29,960 A.2d 1140)

(quotation marks omitted); see also Pajfhausen v. Balano, 1998 ME 47, 708 A.2d 269.

"To pursue unjust enrichment in equity, the plaintiff must lack an adequate remedy at

law. A remedy at law is adequate ifit '(1) is as complete, practical and as efficient to the ends of

justice and its prompt administration as the remedy in equity, and (2) is obtainable as of right."'

Wahlcometrqflex, Inc. v. Baldwin, 2010 ME 26, ~ 22,991 A.2d 44, 49. Here, only Arundel, and

not Kate's, arguably conferred a benefit on Branch River, but Arundel has an adequate remedy

for breach of warranty that, if proved, could compensate Arundel for some or all of what it paid

for Branch River's SIPs. The unjust enrichment claim in Count X of the Complaint explicitly

112 Plaintiffs argue that as a direct and proximate consequence of Branch River's interference with
Arundel's contract with Peachey Builders, Plaintiffs have been unable to obtain the benefit of the
contract.

18
relies on the same set of facts that the Plaintiffs' previously pleaded claims rely upon.

Defendants are entitled to summary judgment on Count X of the Complaint.

Plainti"tfs' Breach qf Warran'ty Claims

With respect to Plaintiffs' warranty claims in Counts XI and XII of the Complaint,

Branch River first argues that when Peachey Builders failed to properly install the SIPs, it

offered to maintain the 20 Year Warranty, 29 so long as Peachey Builders undertook special and

specific measures outlined by Branch River. These conditions were never met as the roof was

ultimately removed. (Defs.' Mot. 10.) However, Branch River contends that if the Warranty is

found by this court to apply, then Branch River's "maximum liability for warranty claims shall

not exceed the original purchase price of the SIPs.'' 24

In response to this cap on damages Arundel argues first that the Warranty document

does not apply to Arundel's claim; second the provision in the Warranty does not apply because

Arundel is seeking direct damages and not consequential damages; and third, the provision

should not apply here as Arundel was allegedly supplied with a product different than what was

originally contracted for by its alleged agent Peachey Builders. Arundel further contends that

Branch River breached the implied warranty of merchantability and the duty of fitness for a

particular purpose.

Arundel has made a prima fade showing that Branch River knew for what purpose the

SIPS it supplied would be used, and that they were not suitable for that purpose, although

Branch River clearly has some responses to Arundel's evidence that the fact finder could find

persuasive. It is also not clear on this record that Arundel is limited to an express warranty

113 Branch River contends that generally all SIPs, like the ones installed in the Facility, are subject to

Limited 20 Year Warranty that the SIPs are "free from defects in materials and workmanship on the
date of final delivery to the Owner or Owner's representative." (Defs.' Mot. 9.)

2+ This limits damages to $111,010, the ultimate cost of the Air-Flo SIPS installed at the Facility.

19
claim. Even Arundel were so limited, there are issues of fact regarding whether Arundel

complied with the conditions set forth in the express warranty. The court also declines Branch

River's invitation to rule that Arundel's warranty damages are limited to what is provided in its

express warranty. Branch River has multiple defenses to Arundel's warranty claims, but the

validity of the claims and defenses are for a fact finder to decide.

Defendant Branch River's Motion for Summary Judgment is denied as to Counts XI and

XII of the Complaint.

Personal Liability ofRobert Mayo

Although the foregoing rulings grant summary judgment as to all claims against

Robert Mayo (the only remaining claims being those against Branch River only, in Counts XI

and XII), Defendants have shown an independent ground for granting Mr. Mayo summary

judgment. Defendants' Motion argues that the Plaintiffs cannot identify facts sufficient to state

a plausible basis for imposing personal liability against Mayo for damages associated with the

products manufactured and sold by Branch River. In Maine, there is strong public policy

holding corporations as separate legal entities with limited liability. Johnson v. Exclusive

Properties Unlimited, 1998 ME 244, ~ 5, 720 A.2d 568. "As such, courts are generally reluctant

to disregard the legal entity and will cautiously do so only when necessary to promote justice."

Anderson v. Kennebec River Pulp & Paper Co., 433 A.2d 752, 756 n.5 (1981). However, a court

will pierce the corporate veil "when equity so demands, and may disregard the corporate entity

'when used to cover fraud or illegality, or to justify a wrong."' Id. (quoting Me. Aviation Corp. v.

Johnson, 160 Me. 1, 5, 196 A.2d 748, 750 (1964)).

The Law Court has set forth two common elements that Plaintiffs must establish to

disregard the legal entity. First, "some manner of dominating, abusing, or misusing the

corporate form. Johnson, 1998 ME 144, ~ 6, 720 A.2d 568. Second, there must be an unjust or

20
inequitable result that would arise if the court recognized a separate corporate existence. 25 Id.

In determining whether a shareholder has abused the privilege of a separate corporate entity

the courts will examine a series of factors. For example:

(1) common ownership; (2) pervasive control; (s) confused intermingling ofbusiness
activity[,] assets, or management; (4) thin capitalization; (5) nonobservance of
corporate formalities; (6) absence ofcorporate records; (7) no payment of dividends; (8)
insolvency at the time of the litigated transaction; (9) siphoning away of corporate
assets by the dominant shareholders; ( 10) nonfunctioning of officers and directors; ( 11)
use of the corporation for transactions of the dominant shareholders; [and] (12) use of
the corporation in promoting fraud.

Id.~ 7.
However, piercing the corporate veil is not the only theory for holding corporate

employees or agents individually liable to third parties. Corporate officers may be liable for

their own tortious conduct and conduct amounting to an unfair trade practice. See Advanced

Const. Corp. v. Pilecki, 2006 ME 84, ~ 1S, 901 A.2d 189; see also Mariello v. Giguere, 667 A.2d

588, 590-91 (Me. 1995). Here, Plaintiffs argue that Robert Mayo was personally responsible

for the misleading representations on Branch River's website. However, as noted above, the

Plaintiffs have not shown evidence that either they or their contractor, architect or roof

supplier actually relied on the website. Perhaps the clearest proof of this is the fact that the

contract that Arundel chose to enter into with Peachey, the general contractor, did not specify

that the SIPS had to be R-Controlled.

Plaintiffs have not made a prima facie showing that Robert Mayo can be held personally

liable on either of the two bases for imposing such liability. Plaintiffs have not demonstrated a

basis on which a fact finder might hold Mr. Mayo personally liable, either on a veil-piercing

basis or based on his own tortious acts. He will be granted summary judgment on all claims

against him

25 In establishing this test, the court seeks to balance the policy of encouraging business development
with the policy of protecting patrons of the business. Johnson, 1998 ME 144, ~ G, 720 A.2d 568.

21
PlaintiffKate's Butter as a Proper Plaintiffto this Action

Branch River contends that Kate's Butter is not a proper party to this suit. In support

of this assertion Branch River contends Kate's is not the owner of the Arundel Facility. Rather,

Kate's merely leases the Facility from Arundel. Further, Kate's has no contractual relationship

with any of the Defendants. In response, Kate claims to have been damaged as a result of

Branch River's failure to supply R-Control SIPS. Kate's claim presumably is one for delay

damages--clearly a form of consequential damages.

The only remaining claims of those pleaded in the Complaint against Branch River are

the claims for breach of warranty in Counts XI and XII. Although breach of warranty claims

do not require privity of contract and may be enforceable by the ultimate consumer, the

consumer still must be a purchaser of the product. The SIPs are goods, and the Uniform

Commercial Code remedies for breach of implied warranty run to buyers. See 11 M.R.S. § 2­

714, 2-715.

VI. CONCLUSION

The entry will be: Defendants' Motion for Summary Judgment is GRANTED as to

Counts V, VI, VII, VIII and X of the Complaint, and to all counts asserting personal liability

against Robert Mayo. Said Motion for Summary Judgment is DENIED as to Branch River

with respect to Counts XI and XII.

Pursuant to M.R. Civ. P. 79(a), the Clerk is hereby directed to incorporate this Order by

reference in the docket.

Dated: November 5, 2014 s/ A. M. Horton

A.M. Horton, Justice
Business & Consumer Court

Entered on the Docket: //. &z ·/ '-/
Copies sent via Mail_Electronically1
22
Arundel Valley, LLC and Kate's Homemade Butter, Inc., Daniel J. Patry and Karen
I. Patry v. Peachey Builders, Inc.; Gary R. Peachey; Kevin Brown Architecture,
LLC; Kevin Brown; Branch River Plastics, Inc.; Robert Mayo; House & Sun, Inc.,
and Kel House

BCD-CV-13-15

Arundel Valley, LLC and Kate's Homemade Butter, Inc.
Daniel J. Patry and Karen I. Patry
Plaintiffs / 3rd Party Plaintiffs

Counsel: Timothy Bryant, Esq.
One City Center
PO Box 9546
Portland, ME 04112-9546

Peachey Builders, Inc. and Gary R. Peachey
Defendant

Counsel: David Ray, Esq.
100 Middle St
PO Box 9729
Portland, ME 04104-5029

Kevin Brown Architecture, LLC and Kevin Brown
Defendant

Counsel: Rebecca Farnum, Esq.
Three Canal Plaza
PO Box 4630
Portland, ME 04112-4630

Branch River Plastics, Inc. and Robert Mayo
Defendant

Counsel: Martica Douglas, Esq.
103 Exchange St.
PO Box 7108
Portland, ME 04112-7108

House & Sun, Inc., and Kel House,
Defendant

Counsel: L. J. Topchick, Esq.
477 Congress St 5th Floor
Portland, ME 04101
STATE OF MAINE BUSINESS AND CONSUMER COURT

Cumberland, ss. AMtl-CMM- \-tY.-15
ARUNDEL VALLEY, LLC and
KATE'S HOMEMADE BUTTER, INC.,

Plaintiffs

v. Docket No. BCD-CV-13-15 t/'

PEACHEY BUILDERS, INC.; GARY R. PEACHEY;
KEVIN BROWN ARCHITECTURE, LLC; KEVIN BROWN;
BRANCH RIVER PLASTICS, INC.; ROBERT MAYO;
HOUSE & SUN, INC., and KEL HOUSE,

Defendants

DANIEL J. PATRY and KAREN I. PATRY,

Third-Party Defendants

CASE MANAGEMENT SCHEDULING ORDER NO. 3

A status conference was held in this case January 12, 2015, with attorneys Bryant
and Piper representing the Plaintiffs; attorney Douglas representing Defendant Branch
River Plastics, Inc., and attorney Williams representing Kevin Brown and Kevin Brown
Architecture, LLC. As a result, it is ORDERED as follows:

1. Discovery: Discovery is complete except with regard to two potential defense
witnesses, Larry Turner and Craig Barnes. Branch River's counsel will advise Arundel
Valley's counsel by January 20, 2015 whether either witness will be called, whether as a fact
witness or expert witness. If either will be called, Arundel Valley may take the depositions
upon oral examination ofthat witness.

2. Settling Defendants: The Defendants in this case other than Branch River and
Robert Mayo have reached a settlement with the Plaintiffs. Pursuant to 14 M.R.S. § 164,
Branch River has elected to have the value of the consideration obtained by Plaintiffs for
the settlement deducted from the amount of any judgment rendered against Branch River.
Branch River's counsel has been made aware of the terms of the settlements. The settling
Defendants will be dismissed from this case on motion,

S.Motion for Reconsideration: The Plaintiffs have filed a Motion for
Reconsideration of certain rulings in the November 5, 2014 Order on Defendants' Motion
for Summary Judgment. The primary focus of the Motion to Reconsider is Plaintiffs'
negligent misrepresentation claim.

Plaintiffs point out that the negligent misrepresentation on which they rely predates the
actual purchase of the product here, and that the misrepresentation goes to the very nature of
the product, not merely to the quality of the product. Those are distinctions without a
difference. In essence, the principle underlying the economic loss doctrine is that when the
claim is that a product is not as promised or warranted, and when there is no personal injury or
property damages, the plaintiffs remedy lies in the sphere of contract and warranty, not in tort
recovery. Here, the essential claim is that Branch River sold a product that was not what
Branch River represented it to be, and that therefore was not suitable for Plaintiff Arundel
Valley's purposes and had to be removed. Thus, the claim presents a classic breach of express
and/ or implied warranty of fitness for particular purpose. The court remains persuaded that
the Law Court's decision in Oceanside at Pine Point Condominium Owners Assn. v. Peachtree
Doors, 659 A.2d 267 (Me. 1995) precludes a negligent misrepresentation claim in an action for a
defective or improper product, not involving personal injury or damage to other property.

That said, the Plaintiffs may still be able to present the same evidence on the remaining
warranty claims that they would have presented on a negligent misrepresentation claim in
terms of both liability and damages. Those issues have yet to be determined. Plaintiffs' other
contentions in their Motion to Reconsider do not require discussion here.

Plaintiffs' Motion for Reconsideration is denied.

4. Judicially Assisted Settlement Conference: As the initial Case Management
Scheduling Order indicated might occur, the court is scheduling a judicially assisted settlement
conference before another judge. Unless specifically excused from attending in advance by the
presiding judge, at least one officer of each Plaintiff and of Branch River are hereby ordered
attend throughout, in person, and an adjuster for any insurer who might be liable to indemnify
Branch River will also attend in person unless excused in advance. The Judicial Scheduling
Secretary will contact counsel regarding dates for the conference.

5. Trial Venue and Dates: The parties have agreed to a transfer of venue to
Cumberland County for purposes of jury trial, in light of the likely delay associated with
scheduling a jury trial in York County. See BCD Standing Order On Transfer of Venue.
http:!lwww.courts. maine.govlrules_adminorders/adminorders/so_JB-07-J.html Trial is
hereby scheduled as follows: Jury selection with trial to follow immediately at 8:30 a.m.,
Monday, June 22, 2015 at the Cumberland County Court House. The court is
allocating five days for trial.

6. Conference of Parties and Joint Final Pretrial Statement: On or before June
17, 2015, the parties shall file a Joint Final Pretrial Statement, based on a conference
between the parties, which shall comply in all respects with M.R. Civ. P. 135. Counsel for
the Plaintiff shall have primary responsibility for coordinating the conference and filing the
Joint Final Pretrial Statement and related material. If counsel for the Plaintiff is unable
timely to comply with this requirement, counsel shall notify the court in writing of the
reasons therefor and request a status conference.

2
7. Exchange ofWitness and Exhibit Lists.

(a) At or before the conference of the parties, the parties shall meet to mark all exhibits
to be offered at trial, and to attempt to stipulate to the authenticity of exhibits without
waiving objections to their admissibility at trial, and shall inspect and attempt to agree
to all exhibits to be used as demonstrative or visual aids.

(b) The parties shall each submit a list of witnesses and exhibits with the Joint Final
Pretrial Statement. Exhibits not pre-marked and included on the exhibit list are
subject to exclusion upon objection or the court's own motion.

8. Pretrial Conference: The pretrial conference will be held at 1 p.m. Thursday,
June 18, 2015 at the Cumberland County Court House. At the pretrial conference, all
parties must be prepared and authorized to discuss the matters identified in M.R. Civ. P.
136 and in the Joint Final Pretrial Statement.

9. Previous Orders: Except to the extent inconsistent with this Order, the
previous Case Management Scheduling Orders in this case remain in effect.

Pursuant to M.R. Civ. P. 79(a), the clerk is hereby directed to incorporate this order
by reference in the docket. ~'/!~ h, ,h_
DatedJanuaryiS,2015 ~
A.M. Hor on
Justice, Business and Consumer Court

En!E7red on the Docket j " / 1.{ ,_ I ~
Cop1es sent via Mail ·- _Electronically Z

3
Arundel Valley, LLC and Kate's Homemade Butter, Inc., Daniel J. Patry and Karen
I. Patry v. Peachey Builders, Inc.; Gary R. Peachey; Kevin Brown Architecture,
LLC; Kevin Brown; Branch River Plastics, Inc.; Robert Mayo; House & Sun, Inc.,
and Kel House

BCD-CV-13-15

Arundel Valley, LLC and Kate's Homemade Butter, Inc.
Daniel J. Patry and Karen I. Patry
Plaintiffs f 3rd Party Plaintiffs

Counsel: Timothy Bryant, Esq.
One City Center
PO Box 9546
Portland, ME 04112-9546

Peachey Builders, Inc. and Gary R. Peachey
Defendant

Counsel: David Ray, Esq.
100 Middle St
PO Box 9729
Portland, ME 04104-5029

Kevin Brown Architecture, LLC and Kevin Brown
Defendant

Counsel: Rebecca Farnum, Esq.
Three Canal Plaza
PO Box 4630
Portland, ME 04112-4630

Branch River Plastics, Inc. and Robert Mayo
Defendant

Counsel: Martica Douglas, Esq.
10 3 Exchange St.
PO Box 7108
Portland, ME 04112-7108

House & Sun, Inc., and Kel House,
Defendant

Counsel: L. J. Topchick, Esq.
4 77 Congress St 5th Floor
Portland, ME 04101

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10811308. Public record. Not legal advice.