Trans-Spec Truck Service, Inc. v. Caterpillar Inc.

United States Court of Appeals

For the First Circuit

No. 07-1476

TRANS-SPEC TRUCK SERVICE, INC.,

d/b/a TRUCK SERVICE,

Plaintiff, Appellant,

v.

CATERPILLAR INC.,

Defendant, Appellee.

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MASSACHUSETTS

[Hon. Reginald C. Lindsay, U.S. District Judge]

Before

Torruella, Lipez,and Howard,

Circuit Judges.

Christian G. Samito, with whom Nancy M. Reimer and Donovan

Hatem LLP were on brief, for plaintiff-appellant.

John A. K. Grunert, with whom Campbell Campbell Edwards &

Conroy, P.C. was on brief, for defendant-appellee.

April 30, 2008

LIPEZ, Circuit Judge. This case requires us to apply the

accrual and statute of limitations provisions of the Uniform

Commercial Code of Massachusetts to breach of warranty claims

brought by Trans-Spec Truck Service ("Trans-Spec") against

Caterpillar, Inc. Trans-Spec purchased twenty-two heavy-duty,

custom-built trucks powered by Caterpillar engines. More than four

and a half years after it took delivery of the trucks, Trans-Spec

filed suit against Caterpillar, alleging breach of warranty,

violation of Massachusetts's unfair trade practices act, Mass. Gen.

Laws ch. 93A, and negligence, arising from failures in the flywheel

housings in a significant number of the Caterpillar-powered trucks.

Accepting the recommendation of the magistrate judge, the district

court dismissed Trans-Spec's warranty and chapter 93A claims as

time-barred. Caterpillar then won summary judgment on the

remaining negligence count. We affirm.

I.

We draw on the summary judgment record for the relevant

background. In March 1999, Trans-Spec and Sterling Truck

Corporation1 prepared a "specification proposal" for twenty-two

heavy-duty, custom-built trucks that Trans-Spec intended to

purchase from Sterling for use in Trans-Spec's oil delivery and

dump trailer operations. The proposal called for installation of

Caterpillar's C-12 model engines in each of the trucks. Trans-Spec

1

Sterling Truck Corporation is not a party to this suit.

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allegedly decided upon Caterpillar engines after extensive

conversations with Caterpillar's employees and agents regarding

engine specifications and performance, the terms of the warranty,

and which engine manufacturer would "stand behind their warranty

the best." As a non-party witness testified at a deposition,

Caterpillar representatives "bragged that engine up like there was

no tomorrow." After finalizing the agreement, Caterpillar shipped

completely assembled engines to Sterling for installation in the

trucks. In December 1999 and January 2000, Trans-Spec took

delivery of the trucks and put them into service.

By late 2001, serious problems had begun to develop with

the flywheel housing on the Caterpillar engines in several of

Trans-Spec's trucks. The housings loosened and cracked, leading to

disruptions in the use of the trucks and time-consuming repair

efforts. Caterpillar reimbursed Trans-Spec for the cost of the

repairs to the first six trucks that experienced these flywheel

housing failures in 2001 and 2002. When a seventh truck became

inoperable, Caterpillar refused to pay for additional repairs.

Since that time, Trans-Spec avers that an average of six, and as

many as ten, of the twenty-two trucks have been inoperable at any

given time due to engine-related issues. Because Trans-Spec's

business requires all of its trucks to operate six days a week, it

has incurred operating losses as a result of the failure of the

trucks. Trans-Spec made in-house repairs on the trucks, requiring

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it to hire additional mechanics, and in some instances performed

the same repair procedure multiple times on the same truck engine.

Trans-Spec alleges that these engine problems have resulted in

trucks leaking oil in violation of environmental laws. Trans-Spec

also alleges that the failures have lowered the resale value of the

trucks and prevented Trans-Spec from trading them in for newer

vehicles as it normally would.

Trans-Spec claims that the flywheel housing failures were

caused by a major design defect in the C-12 engine, and that

Caterpillar knew or should have known of this defect. Trans-Spec

contends that the housing failures fell under the Caterpillar

warranty and that Caterpillar should have rectified the problems.

Trans-Spec also avers that, at meetings in June and August 2004,

Caterpillar acknowledged responsibility for the flywheel housing

failures and promised to "make [Trans-Spec] whole." In August

2004, apparently unpersuaded by this promise, Trans-Spec filed this

suit against Caterpillar.

Trans-Spec's initial complaint alleged breach of warranty

(Count I) and violations of Massachusetts General Laws chapter 93A

(Count II). Its second amended complaint added a negligence claim

(Count III) as well. Caterpillar moved to dismiss the second

amended complaint on the grounds that Counts I and II were time-

barred and that Count III was barred by the economic loss doctrine.

The magistrate judge recommended that the district court grant the

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motion to dismiss as to Counts I and II and deny the motion on

Count III. The district court accepted these recommendations over

Trans-Spec's objections. Trans-Spec's motion to further amend its

second amended complaint or alter the court's dismissal order was

subsequently denied as well. Caterpillar then moved for summary

judgment on the remaining negligence claim on the basis of a

negligence disclaimer included in one of the Caterpillar warranty

documents. The magistrate judge recommended that the motion be

granted and the district court agreed. The instant appeal ensued,

with Trans-Spec arguing error on each of the adverse rulings below.

II.

We begin with the district court's determination that

Counts I and II of Trans-Spec's complaint are time-barred. We

review the grant of a motion to dismiss de novo, accepting as true

the factual allegations of the complaint and drawing all reasonable

inferences in favor of the plaintiff. Garita Hotel Ltd. P'ship v.

Ponce Fed. Bank, F.S.B., 958 F.2d 15, 17 (1st Cir. 1992). We

affirm the dismissal if the complaint fails to state facts

sufficient to establish a "claim to relief that is plausible on its

face." Bell Atl. Corp. v. Twombly, 127 S. Ct. 1955, 1974 (2007).

Affirmative defenses, such as the statute of limitations,

may be raised in a motion to dismiss under Federal Rule of Civil

Procedure 12(b)(6), provided that "the facts establishing the

defense [are] clear 'on the face of the plaintiff's pleadings.'"

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Blackstone Realty LLC v. FDIC, 244 F.3d 193, 197 (1st Cir. 2001)

(quoting Aldahonda-Rivera v. Parke Davis & Co., 882 F.2d 590, 591

(1st Cir. 1989)). Where the dates included in the complaint show

that the limitations period has been exceeded and the complaint

fails to "sketch a factual predicate" that would warrant the

application of either a different statute of limitations period or

equitable estoppel, dismissal is appropriate. See LaChapelle v.

Berkshire Life Ins. Co., 142 F.3d 507, 509-10 (1st Cir. 1998);

Blackstone Realty, 244 F.3d at 197.

A. Scope of the Record Subject to Review

Before proceeding to our substantive analysis of the

applicability of the statute of limitations to Counts I and II of

Trans-Spec's complaint, we must first clarify the scope of the

record subject to our review. The controlling pleading is Trans-

Spec's second amended complaint. Appended to this complaint is a

document titled "On-Highway Vehicle Engine Extended Service

Coverage" (hereinafter "ESC"), which Trans-Spec refers to in the

complaint2 and in its opposition to Caterpillar's motion to dismiss

as "the Caterpillar warranty" that forms the basis of its claims.

Neither party disputes that the appended ESC was incorporated into

the complaint and properly considered at the motion to dismiss

stage.

2

Subsequent references to "the complaint" refer to Trans-

Spec's second amended complaint unless otherwise indicated.

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However, Trans-Spec seeks to rely on several additional

documents to defeat the motion to dismiss. First, Trans-Spec

appended documents to its opposition to Caterpillar's motion to

dismiss, including excerpts of deposition testimony and affidavits

that Trans-Spec wished to use to establish that Caterpillar should

be equitably estopped from asserting the statute of limitations.

After the magistrate judge recommended that Caterpillar's motion to

dismiss be granted without considering the additional documents

submitted by Trans-Spec, Trans-Spec's objection to the magistrate

judge's report and recommendation also included as an exhibit a

copy of another document, titled "Caterpillar Limited Warranty."

Trans-Spec referred to this document as the "two-year warranty,"

and asserted, for the first time in its objection to the magistrate

judge's report, that this document formed the basis for an

additional warranty claim that would not be barred by the statute

of limitations. Caterpillar promptly asked the district court to

strike all of the additional documents submitted by Trans-Spec.

The district court deemed this motion moot because both the

district court and the magistrate judge had explicitly disregarded

the appended documents as outside the pleadings, and hence

inapplicable to a Rule 12(b)(6) determination.

Under Rule 12(b)(6), the district court may properly

consider only facts and documents that are part of or incorporated

into the complaint; if matters outside the pleadings are

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considered, the motion must be decided under the more stringent

standards applicable to a Rule 56 motion for summary judgment.

Garita Hotel, 958 F.2d at 18. Exhibits attached to the complaint

are properly considered part of the pleading "for all purposes,"

including Rule 12(b)(6). Fed. R. Civ. P. 10(c); Blackstone Realty,

244 F.3d at 195 n.1. Additionally, we have noted that "[w]hen

. . . a complaint's factual allegations are expressly linked to –

and admittedly dependent upon – a document (the authenticity of

which is not challenged), that document effectively merges into the

pleadings and the trial court can review it in deciding a motion to

dismiss under Rule 12(b)(6)." Beddall v. State St. Bank & Trust

Co., 137 F.3d 12, 16-17 (1st Cir. 1998); see also Clorox Co. P. R.

v. Proctor & Gamble Comm. Co., 228 F.3d 24, 32 (1st Cir. 2000)

(holding that, in ruling on a Rule 12(b)(6) motion, a district

court "'may properly consider the relevant entirety of a document

integral to or explicitly relied upon in the complaint, even though

not attached to the complaint'" (quoting Shaw v. Digital Equip.

Corp., 82 F.3d 1194, 1120 (1st Cir. 1996))).

At the discretion of the district court, a motion to

dismiss may be converted to a motion for summary judgment if the

court chooses to consider materials outside the pleadings in making

its ruling. Fed. R. Civ. P. 12(d); Garita Hotel, 958 F.2d at 18.

However, if the district court chooses, as it did here, to ignore

supplementary materials submitted with the motion papers and

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determine the motion under the Rule 12(b)(6) standard, no

conversion occurs and the supplementary materials do not become

part of the record for purposes of the Rule 12(b)(6) motion.

Garita Hotel, 958 F.2d at 18-19. We review a motion to dismiss

using the "same criteria that obtained in the court below." Id. at

17. As a result, we review only those documents actually

considered by the district court in its Rule 12(b)(6) analysis

unless we are persuaded that the court below erred in declining to

consider the proffered documents. See Coyne v. Cronin, 386 F.3d

280, 286 (1st Cir. 2004).

Trans-Spec does not argue in its opening brief that the

district court abused its discretion by refusing to convert the

motion to dismiss to a motion for summary judgment nor that it

erred by choosing to disregard the documents appended to Trans-

Spec's opposition to the motion to dismiss or included as an

exhibit to Trans-Spec's objection to the magistrate judge's report

and recommendation. Instead, Trans-Spec's opening brief marshals

these documents in support of its argument as if they had been part

of the record considered by the court below in deciding the Rule

12(b)(6) motion. Thus, rather than assigning error to the decision

of the district court to disregard the supplemental documents,

Trans-Spec's opening brief ignores that decision and, by doing so,

misrepresents the state of the record. Caterpillar forcefully

argued this misrepresentation in its responsive brief. Then, in

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Trans-Spec's reply brief and at oral argument, Trans-Spec finally

argued that the district court erred in refusing to consider these

supplemental documents in its review and it argued that we should

consider them in our review. That argument came too late. See

Pignons S.A. de Mecanique v. Polaroid Corp., 701 F.2d 1, 3 (1st

Cir. 1983) ("In preparing briefs and arguments, an appellee is

entitled to rely on the content of an appellant's brief for the

scope of the issues appealed, and appellant generally may not

preserve a claim merely by referring to it in a reply brief or at

oral argument."). Accordingly, in our review of the motion to

dismiss, we will consider, as the district court did, only the

facts and inferences fairly gleaned from the text of Trans-Spec's

second amended complaint and the ESC appended thereto.

We pause further only to emphasize that, even if Trans-

Spec had not waived its argument on appeal, it was well within the

discretion of the district court to refuse to consider the

"Caterpillar Limited Warranty" document, i.e. the so-called "two-

year warranty." Trans-Spec's complaint refers generically to "the

Caterpillar warranty," but then directs the court only to the ESC,

which was attached as an exhibit. If Trans-Spec also wished to

base its allegations on the "Caterpillar Limited Warranty," Trans-

Spec should have also referred the court to it specifically and

attached it to the complaint. Then, the magistrate judge would

almost certainly have treated the additional warranty as integral

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to the complaint, and she would have considered it. But Trans-Spec

did not submit that document to the magistrate judge. Although

Trans-Spec was aware of the "Caterpillar Limited Warranty" from the

outset of the case, Trans-Spec decided to omit it from the

magistrate judge's review.3

The district court is permitted, at its discretion, to

consider materials not before the magistrate judge. 28 U.S.C.

§ 636(b)(1). However, that discretion must be exercised sparingly.

We have previously noted that it would be "fundamentally unfair to

permit a litigant to set its case in motion before the magistrate,

wait to see which way the wind was blowing, and - having received

an unfavorable recommendation – shift gears before the district

judge." Paterson-Leitch Co. v. Mass. Mun. Wholesale Elec. Co., 840

F.2d 985, 991 (1st Cir. 1988). Moreover, "[s]ystemic efficiencies

would be frustrated and the magistrate's role reduced to that of a

mere dress rehearser if a party were allowed to feint and weave at

the initial hearing, and save its knockout punch for the second

round." Id. Accordingly, it was well within the district court's

3

Caterpillar's counsel suggested at oral argument that Trans-

Spec's efforts to base its claims solely on the ESC are a result of

its desire to avoid the consequences of a negligence disclaimer

contained in the "Caterpillar Limited Warranty" document. Whatever

the rationale, the result is the same. The "Caterpillar Limited

Warranty" document was never presented to the magistrate judge, was

not considered by the district court, and is not properly before us

on appeal from the grant of the motion to dismiss.

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discretion to decline to consider the "Caterpillar Limited

Warranty" document in deciding the motion to dismiss.

Thus, in our review of the motion to dismiss, we are

limited to the text of Trans-Spec's complaint and the language in

the ESC. We will not review the deposition testimony, affidavits,

or additional warranty documents that were not considered by the

magistrate judge and the district court.

B. Future Performance

The Uniform Commercial Code ("U.C.C."), as adopted in

Massachusetts, provides that an action for breach of warranty must

be commenced within four years of the date when the cause of action

accrues.4 Mass. Gen. Laws ch. 106, § 2-725(1). The code section

then specifies when the cause of action accrues:

A breach of warranty occurs when tender of

delivery is made, except that where a warranty

explicitly extends to future performance of

the goods and discovery of the breach must

await the time of such performance the cause

of action accrues when the breach is or should

have been discovered.

Id. § 2-725(2). Thus, the default rule in § 2-725(2) is that the

cause of action for breach of warranty is time-barred if brought

more than four years after tender of delivery. However, if the

warranty explicitly extends to future performance, "the four-year

clock begins to tick when the breach is discovered or should have

4

The parties agree that Massachusetts law applies to this

dispute.

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been discovered, or when the explicit time period expires,

whichever occurs first." Barkley Clark & Christopher Smith, The

Law of Product Warranties § 11:4 (2006).

Trans-Spec's complaint stated that Trans-Spec accepted

delivery of the trucks containing Caterpillar's allegedly defective

flywheel housing in December 1999 and January 2000. Trans-Spec

filed suit for breach of warranty in August 2004. Thus, on its

face, Trans-Spec's complaint is not timely unless the warranty on

which its claims are based is one that "explicitly extend[s] to

future performance of the goods" and the circumstances are such

that the "'discovery of the breach must await'" the time of the

promised future performance.5 See Coady v. Marvin Lumber & Cedar

Co., 167 F. Supp. 2d 166, 170 (D. Mass. 2001) (quoting Raytheon Co.

v. Helix Tech. Corp., 1999 WL 753483, *3 (Mass. Super. 1999)).

The Supreme Judicial Court of Massachusetts has not

discussed the proper application of the future performance

requirement in § 2-725(2) of the U.C.C. Thus we must make "an

informed prophecy of what the court would do in the same

situation." Blinzler v. Marriott Int'l, Inc., 81 F.3d 1148, 1151

(1st Cir. 1996). In making such a prophecy, we look to analogous

5

Because we determine that the warranty language does not

explicitly extend to the future performance of the goods, we do not

reach the question of whether discovery of the defect "must await"

the time of future performance.

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cases decided by other courts in the forum state, persuasive

reasoning in cases from other states, and learned treatises. Id.

To determine whether a warranty is one of future

performance, we must look to the language of the warranty itself to

determine whether it explicitly guarantees the future performance

of the goods. See Coady, 167 F. Supp. 2d at 170 ("In determining

whether a warranty explicitly extends to future performance, courts

have emphasized the word 'explicitly' . . . ."). For example, if

a warranty states that the product "would be free from defects in

materials and workmanship for a period of five years," it

explicitly extends to the future performance of the goods. See,

e.g., Grand Island Exp. v. Timpte Indus., Inc., 28 F.3d 73, 75 (8th

Cir. 1994); Std. Alliance Indus., Inc. v. Black Clawson Co., 587

F.2d 813, 820-21 (6th Cir. 1978); see also Clark & Smith, supra, §

11:4. If, on the other hand, the warranty states "we promise to

repair the product if it malfunctions within the first five years,"

it does not explicitly guarantee the future performance of the

goods. Clark & Smith, supra, § 11:4; cf. New Eng. Power Co. v.

Riley Stoker Corp., 477 N.E.2d 1054, 1058-59 (Mass. App. Ct. 1985).

This type of repair promise warrants the future performance of the

warrantor, not the goods. Clark & Smith, supra, § 11:4. The

warrantor has not guaranteed that the goods will not malfunction in

the future, but rather that the warrantor will remedy any problems

that arise in a particular way for a limited period of time. Id.;

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see, e.g., Neb. Popcorn, Inc. v. Wing, 602 N.W.2d 18, 23 (Neb.

1999) ("A warranty to repair or replace does not guarantee proper

performance. Rather, it anticipates potential defects and

specifies the buyer's remedy during the stated period."); Flagg

Energy Dev. Corp. v. General Motors Corp., 709 A.2d 1075, 1086

(Conn. 1998) (repair or replacement clause provides buyer only the

relief expressly promised and is not a promise of future

performance of the goods); Tittle v. Steel City Oldsmobile GMC

Truck, Inc., 544 So.2d 883, 889-91 (Ala. 1989) (repair or replace

language does not guarantee that goods will perform free of

defects; rather it anticipates that defects will occur).

The only warranty language properly before us in

considering Caterpillar's motion to dismiss is contained in the

"On-Highway Vehicle Engine Extended Service Coverage" ("ESC")

document, which was appended to Trans-Spec's complaint. The ESC

states: "This service contract . . . provides full components and

labor coverage for covered components failures due to defects in

Caterpillar materials or workmanship under normal use."6 The ESC

6

The ESC also states that "it runs concurrently with the

Caterpillar On-Highway Vehicle Engine Warranty." This sentence

almost certainly refers to the "Limited Warranty" document.

Although Trans-Spec refers to this document as the "two-year

warranty," it actually contains language that could reasonably be

construed as a five-year warranty of future performance on certain

parts, including the flywheel housings: "These parts are warranted

against defects in material and workmanship for 60 months or

500,000 miles or 10,000 operating hours, whichever occurs first

after date of delivery to the first user." Trans-Spec perhaps could

have argued that this language was incorporated by reference as a

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guarantees that "Caterpillar will pay 100% of the components and

labor charges for covered failures, with no deductible charges" for

failures occurring within the first 60 months or 500,000 miles. It

specifies Caterpillar's responsibility to "restore the engine to

its operating condition prior to failure by repairing/replacing

only the defective components and consequential damaged components

necessary to remove/repair/install the defective components."

The ESC thus never guaranteed that Caterpillar's engines

would not fail; it merely warranted that Caterpillar would pay to

repair them if they did fail. As such, the warranty provided in

the ESC is not a warranty that explicitly extends to the future

performance of the goods, and the later accrual date specified in

§ 2-725(2) does not apply. Thus, Trans-Spec's claims are time-

barred by the four-year statute of limitations that began to run on

the date of delivery of the trucks.

In reaching this conclusion, we note that some courts

have interpreted a vehicle manufacturer's promise to repair or

replace defective parts as capable of being breached, not at tender

of delivery, but only in the event that the promised repairs are

refused or unsuccessful. See, e.g., Mydlach v. DaimlerChrysler

Corp., 875 N.E.2d 1047, 1059-60 (Ill. 2007) (holding that a promise

result of this sentence in the ESC referring to the "Limited

Warranty" document and was, as a result, integral to the complaint.

However, Trans-Spec did not make such an argument and does not even

point out the cross-reference in its appellate brief.

Consequently, we will not consider it.

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to repair is not an "express warranty" and thus accrual for breach

of a repair promise is not governed by § 2-725(2), which applies

only to breach of warranty). These courts have held that the cause

of action for breach of a repair promise accrues when the promisor

fails to or refuses to repair the defects. Id. However, this

view does not prevail in Massachusetts.7 In New England Power, the

Appeals Court of Massachusetts rejected the position that a promise

to repair or replace should be viewed as an independent or separate

warranty. 477 N.E.2d at 1058. Instead, the court said that such

promises "are generally viewed as specifications of a remedy" and

that if the promise to repair "is not fulfilled, then the cause of

action is the underlying breach of warranty." Id. The court

describes as "a fallacy" the argument that "by failing to remedy

its first breach, the defendant committed a second breach, giving

rise to a brand new cause of action and starting anew the

limitations period." Id. Thus, the court held that the promise to

repair had no effect on the statute of limitations for the breach

of warranty. See id. at 1058-59.

The ESC appears to be framed as a separate "service

contract," rather than a limitation of remedy on a warranty, and

could perhaps be treated as such. However, Trans-Spec styled its

7

Moreover, Trans-Spec argues that the repair promise contained

in the ESC constitutes a "remedy of first resort" for breach of an

express warranty of future performance. Trans-Spec does not argue

that the repair promise is separately enforceable. Thus, the

argument has been waived.

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complaint as a claim for breach of warranty under the U.C.C., not

for breach of a service contract.8 As such, Trans-Spec's claim is

subject to analysis under § 2-725(2), the U.C.C.'s statutory

provision regarding the accrual of a claim for breach of warranty.

Because Trans-Spec does not allege or even argue that the ESC is a

separate service contract, rather than a U.C.C. express warranty,

we will not treat it as such for the purposes of our analysis. Cf.

Cosman v. Ford Motor Co., 674 N.E.2d 61, 68 (Ill. App. Ct. 1996)

(dismissing a count framed in U.C.C. terms, but sustaining claim

for breach of a promise to repair brought under the Magnuson-Moss

Act because such a claim "cannot ripen until the promise is broken

and has nothing to do with the inherent quality of the goods or

their future performance").9 As a result, any breach of which

Trans-Spec is complaining must stem from an underlying U.C.C.

warranty on the engines themselves. Trans-Spec has not identified,

within the record properly before us, any underlying warranty

guaranteeing the future performance of the goods themselves. The

8

Service contracts, because they are not primarily concerned

with the sale of goods, would fall outside the purview of the

U.C.C.'s statutory scheme and would be governed by the general six-

year statute of limitations and the common law contract principle

that the cause of action accrues at the time the promise is

breached. See Mass. Gen. Laws ch. 106, § 2-102 ("[T]his Article

applies to transactions in goods . . . .").

9

Trans-Spec's complaint also alleges breach of the Magnuson-

Moss Act. See 15 U.S.C. § 2304(a). However, that federal

provision only applies to consumer goods. The Caterpillar engines

in Trans-Spec's trucks are not consumer goods, and the claim was

therefore dismissed below.

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claim for breach therefore accrued on the date of delivery of the

goods and Trans-Spec's suit, which was filed more than four years

after delivery of the trucks, is time-barred.

C. Equitable Estoppel

If Trans-Spec is to escape the consequence of its lack of

diligence in bringing this action, it must do so by averring that

Caterpillar lulled Trans-Spec into the delay. See New Eng. Power,

477 N.E.2d at 1059. Where it appears from the dates and facts

recounted in the complaint that the statute of limitations has run,

the plaintiff has an affirmative burden to plead in its complaint

the facts required to establish estoppel. LaChapelle, 142 F.3d at

509-10. Under Massachusetts law, "estoppel would require proof

that the defendants made representations they knew or should have

known would induce the plaintiffs to put off bringing a suit and

that the plaintiffs did in fact delay in reliance on the

representations." White v. Peabody Const. Co., 434 N.E.2d 1015,

1023 (Mass. 1982). "[H]onest, genuine repair efforts, standing

alone," are not a "sufficient basis for application of the doctrine

of estoppel." New Eng. Power, 477 N.E.2d at 1060. Trans-Spec's

complaint does not allege any representations made by Caterpillar

that induced Trans-Spec to delay filing suit, nor does the

complaint allege that Caterpillar's efforts to repair the trucks

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were insincere or pretextual. Instead, the complaint alleges only

that they were unsuccessful.10 See id.

Having failed to allege any facts predicate to the

estoppel claim in its complaint, Trans-Spec premises its claim on

the deposition transcripts and affidavits attached to its

opposition to Caterpillar's motion to dismiss and its objection to

the magistrate judge's report and recommendation. As we noted

above, Trans-Spec waived its argument that the magistrate judge and

the district judge should have considered these documents, either

by deeming them integral to Trans-Spec's complaint or by converting

Caterpillar's motion to dismiss into a motion for summary judgment.

Thus, the documents are not properly before us and we will not

consider them. As a result, Trans-Spec's estoppel argument fails.11

10

Indeed, Trans-Spec seems to allege that at some point between

2002 and 2004 Caterpillar refused to pay for additional repairs.

This allegation seriously diminishes Trans-Spec's argument that

Caterpillar made representations that lulled it into delay in

filing suit. On the contrary, Caterpillar's actions appear to have

put Trans-Spec on notice that Caterpillar was disputing its

liability for the failures and that Trans-Spec may have to file

suit in order to force Caterpillar to pay. The only

representations by Caterpillar officials that are recounted in the

complaint occurred in June and August 2004. By that date the four-

year statute of limitations had already run. Obviously, no

estoppel claim can arise from representations made by Caterpillar

after the time for filing suit had already passed.

11

To the extent that Trans-Spec's argument is premised on

fraudulent concealment sufficient to warrant statutory tolling

under Massachusetts General Laws chapter 260, § 12, it fails for

the same reason: Trans-Spec's complaint failed to allege any

fraudulent concealment by Caterpillar.

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D. Count II – Chapter 93A Claim

Count II of Trans-Spec's complaint alleges that, by

breaching its warranty obligations to Trans-Spec, Caterpillar

engaged in unfair trade practices in violation of Massachusetts

General Laws chapter 93A. The accrual date of the chapter 93A

claim is the same as the accrual date for the underlying action.

Hanson Housing Auth. v. Dryvit Sys., Inc., 560 N.E.2d 1290, 1295

(Mass. App. Ct. 1990). Accordingly, the four-year statute of

limitations applicable to chapter 93A actions, Mass. Gen. Laws ch.

260, § 5A, had expired when Trans-Spec filed suit in August 2004.

III.

Following the magistrate judge's recommendation that

Caterpillar's motion to dismiss be granted, Trans-Spec filed a

motion to amend the pleadings, which the magistrate judge denied.

We review the denial of a motion to amend the pleadings under an

abuse of discretion standard. O'Connell v. Hyatt Hotels, 357 F.3d

152, 154 (1st Cir. 2004).

Trans-Spec argues that the magistrate judge erred by

failing to apply the "liberal" amendment policy set forth in

Federal Rule of Civil Procedure 15(a), which provides that

pleadings may be amended with court approval and that "[t]he court

should freely give leave when justice so requires." See Fed. R.

Civ. P. 15(a)(2). However, as the magistrate judge correctly

noted, Rule 16(b) establishes a different standard when a motion to

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amend comes late in the case. Rule 16(b) requires that the

district court enter a scheduling order setting the deadlines for

subsequent proceedings in the litigation, including amendment of

the pleadings. Fed. R. Civ. P. 16(b)(1), (3)(A). One purpose of

the rule is "to assure 'that at some point . . . the pleadings will

be fixed.'" O'Connell, 357 F.3d at 154 (quoting Adv. Comm. Notes

to 1983 Amends. to Fed. R. Civ. P. 16(b)). The deadlines

established in the scheduling order may be extended on a showing of

good cause. Id. Our case law clearly establishes that Rule

16(b)'s "good cause" standard, rather than Rule 15(a)'s "freely

give[n]" standard, governs motions to amend filed after scheduling

order deadlines. Id. at 154-55.

Here, Trans-Spec filed its motion to amend eleven months

after the deadline established by the scheduling order. Although

Trans-Spec seeks to justify its delay by pointing to information

discovered at various depositions, none of that information is

relevant to the estoppel theory or the future performance warranty

theory that could allow Trans-Spec's claims to survive the motion

to dismiss. The allegations that Trans-Spec seeks to add to its

amended complaint are based on information that Trans-Spec had or

should have had from the outset of the case.12 The explanation for

12

On the issue of estoppel, any evidence of reliance by Trans-

Spec officials on Caterpillar's representations that it would "make

Trans-Spec whole" would not require discovery. Any such evidence

of reliance would be within the knowledge of Trans-Spec's own

officials. With regard to the so-called "two-year warranty,"

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the delay seems to be simply that Trans-Spec thought that it would

prevail on the motion to dismiss without any need to further amend.

In that, its calculations were wrong. Nonetheless, Trans-Spec must

be bound by the consequences of its litigation strategy. See James

v. Watt, 716 F.2d 71, 77 (1st Cir. 1983) ("[T]he pleadings in this

case were drawn as part of a litigating strategy and plaintiffs

showed the district court no reason why they should not be bound by

the consequences of that strategy."). Accordingly, Trans-Spec's

motion to amend was properly denied.13

IV.

Next, we turn to Trans-Spec's challenge to the district

court's grant of Caterpillar's summary judgment motion with regard

to Count III, Trans-Spec's negligence claim. We review a grant of

summary judgment de novo. Palmieri v. Nynex Long Distance Co., 437

F.3d 111, 113 (1st Cir. 2006). "In conducting such review, we

examine the summary judgment record in the light most friendly to

the summary judgment loser, and we indulge all reasonable

Trans-Spec does not explain when it discovered the existence of

this warranty. As this warranty formed part of the basis for the

bargain for the sale of the trucks, Trans-Spec was or should have

been aware of its existence prior to the filing of its initial

complaint.

13

Trans-Spec's motion to amend its complaint also contained a

motion to alter or amend the court's order dismissing Trans-Spec's

breach of warranty claims "to correct clear legal error and to

prevent manifest injustice." As we have explained above, we find

no legal error in the district court's granting of Caterpillar's

motion to dismiss. As a result, the district court did not err in

denying Trans-Spec's motion to alter or amend the order.

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inferences in that party's favor." Nat'l Amusements v. Town of

Dedham, 43 F.3d 731, 735 (1st Cir. 1995). We affirm the grant of

summary judgment if we conclude that "there is no genuine issue as

to any material fact and that the movant is entitled to judgment as

a matter of law.” Fed. R. Civ. P. 56(c); Rochester Ford Sales,

Inc. v. Ford Motor Co., 287 F.3d 32, 38 (1st Cir. 2002). The

moving party has the initial burden of demonstrating the absence of

an issue of material fact necessitating a trial. Anderson v.

Liberty Lobby, Inc., 477 U.S. 242, 256 (1986). If the moving party

successfully carries this burden, the party opposing the motion

must present affirmative evidence "sufficient to deflect brevis

disposition." Mesnick v. Gen. Elec. Co., 950 F.2d 816, 822 (1st

Cir. 1991). In meeting these burdens, "[n]either party may rely on

conclusory allegations or unsubstantiated denials, but must

identify specific facts derived from the pleadings, depositions,

answers to interrogatories, admissions and affidavits to

demonstrate either the existence or absence of an issue of fact."

Magee v. United States, 121 F.3d 1, 3 (1st Cir. 1997).

At the summary judgment stage, our review is no longer

limited to the parties' pleadings. Thus, although the "Caterpillar

Limited Warranty" (the so-called "two-year warranty") was not part

of the record for the purposes of the motion to dismiss, it was

properly before the magistrate judge when she considered

Caterpillar's subsequent motion for summary judgment on the

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remaining claims, and it is properly part of the record we now

review. The "Caterpillar Limited Warranty," which both parties

agree was part of the contract governing Trans-Spec's acquisition

of truck engines from Caterpillar, contained the following language

in bold-faced, capital letters:

CATERPILLAR EXCLUDES ALL LIABILITY FOR OR

ARISING FROM ANY NEGLIGENCE ON ITS PART OR ON

THE PART OF ANY OF ITS EMPLOYEES, AGENTS, OR

REPRESENTATIVES IN RESPECT OF THE MANUFACTURE

OR SUPPLY OF GOODS OR THE PROVISION OF

SERVICES RELATING TO THE GOODS.

Caterpillar argues that this language effectively bars Trans-Spec's

claim of negligence against Caterpillar for the design,

development, assembly, manufacture, inspection, testing, marketing,

advertising, and distribution of the truck engines. We agree.

It is well established that "under the law of

Massachusetts in the absence of fraud a person may make a valid

contract exempting himself from any liability to another which he

may in the future incur as a result of his negligence or that of

his agents or employees acting on his behalf." Sharon v. City of

Newton, 769 N.E.2d 738, 744 (Mass. 2002) (internal quotation marks

and ellipses omitted). Exculpatory clauses14 permit parties to make

"sensible business judgments" allocating risk. Minassian v. Ogden

Suffolk Downs, Inc., 509 N.E.2d 1190, 1192 (Mass. 1987). As a

14

An "exculpatory clause" is "[a] contractual provision

relieving a party from liability resulting from a negligent or

wrongful act." Black's Law Dictionary 608 (8th ed. 2004).

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result, Massachusetts courts typically enforce such clauses

according to their terms, particularly in a business context. Id.;

see also Deerskin Trading Post, Inc. v. Spencer Press, Inc., 495

N.E.2d 303, 307 (Mass. 1986) ("Limiting damages . . . where the two

parties are sophisticated business entities, and where

consequential damages . . . could be extensive, is a reasonable

business practice . . . .").

Exculpatory clauses are rendered void if they are

unconscionable. See Mass. Gen. Laws ch. 106, § 2-302(1) ("If the

court as a matter of law finds the contract or any clause of the

contract to have been unconscionable at the time it was made the

court may refuse to enforce the contract, or it may enforce the

remainder of the contract without the unconscionable clause, or it

may so limit the application of any unconscionable clause as to

avoid any unconscionable result."). Under Massachusetts law,

"unconscionability must be determined on a case by case basis,

giving particular attention to whether, at the time of the

execution of the agreement, the contract provision could result in

unfair surprise and was oppressive to the allegedly disadvantaged

party." Zapatha v. Dairy Mart, Inc., 408 N.E.2d 1370, 1376 (Mass.

1980) (citation omitted). The inquiry into unfair surprise is

"focused on the circumstances under which the agreement was entered

into." Id. The question of oppression is, in turn, "directed to

the substantive fairness to the parties of permitting the

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[exculpatory] provisions to operate as written." Id. at 1377.

Thus, this two-part inquiry "involves a search for components of

'procedural' and 'substantive' unconscionability." Id. at 1377

n.13.

The clause excluding liability for negligence in this

case does not have the components of either procedural or

substantive unconscionability. Neither opaquely worded nor hidden

in small print, the exculpatory clause would not support a finding

of unfair surprise. Moreover, both Caterpillar and Trans-Spec are

sophisticated commercial parties who negotiated the contract for

the sale of the truck engines at arm's length.

Trans-Spec argues that the clause is unconscionable

because Caterpillar "affirmatively misrepresented the capabilities

and reliability of its [engines] and failed to disclose its

negligent design and manufacture," depriving Trans-Spec of any

meaningful choice in negotiating the contract. In support of its

contention that Caterpillar "affirmatively misrepresented" the

engines, Trans-Spec cites the deposition testimony of a non-party

witness who reported that Caterpillar "bragg[ed] that engine up

like there was no tomorrow." This testimony recounts classic

seller's talk, which is not actionable as a misrepresentation.

Moran v. Levin, 64 N.E.2d 360, 362 (Mass. 1945). Trans-Spec also

cites a Caterpillar-owned patent for an improved flywheel housing,

U.S. Patent No. 6,065,757 (filed July 2, 1998), as evidence that

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Caterpillar failed to disclose the "negligent design and

manufacture" of the engines sold to Trans-Spec, which included an

earlier flywheel housing design. However, as the district court

aptly explained, "Caterpillar's effort to improve on a piece of

equipment can not be viewed as evidence that unimproved equipment

was negligently designed or manufactured." See Fed. R. Evid. 407.

Accordingly, Trans-Spec's contention that the exculpatory clause is

unconscionable as a result of either misrepresentation or

concealment of negligent design fails because it is unsupported by

evidence in the record.

Next, Trans-Spec argues that enforcing the exculpatory

clause to foreclose a negligence claim would be unconscionable

because it would leave Trans-Spec without "a fair quantum of

remedy." Mass. Gen. Laws ch. 106, § 2-719 cmt. 1. We disagree.

If Trans-Spec finds itself without an adequate remedy here, it is

because, as we describe above, Trans-Spec did not assert its

contract remedies in a timely fashion. Trans-Spec may not be

rewarded for this delay through the revival of tort remedies that

were explicitly excluded by agreement.

Trans-Spec also argues that because the warranty remedies

failed of their essential purpose, the negligence exclusion clause

is invalid. In support of this argument, Trans-Spec cites

Massachusetts General Laws chapter 106, § 2-719(2), which provides

that "[w]here circumstances cause an exclusive or limited remedy to

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fail of its essential purpose, remedy may be had as provided in

this chapter." Even assuming that the warranty remedies failed of

their essential purpose in this case, the cited language does not

result in the invalidity of the negligence disclaimer. The chapter

referred to by the language of § 2-719(2) contains the Uniform

Commercial Code, which sets forth contractual remedies, see, e.g.,

Mass. Gen. Laws ch. 160, § 2-715 (defining incidental and

consequential damages for breach of contract), not tort remedies.

Accordingly, even if the warranty remedies did fail of their

essential purpose, the effect of this failure would be to revive

other contractual remedies, if they had not been time-barred.15

Such a revival would have no effect on the exclusion of tort

liability by means of a negligence disclaimer. See Tokio Marine &

Fire Ins. Co. v. McDonnell Douglas Corp., 617 F.2d 936, 941 (2nd

Cir. 1980) (holding that U.C.C. § 2-719(2) could not be used to

"construct a remedy in tort" where the plaintiff's cause of action

for breach of warranty was barred by the statute of limitations).

Trans-Spec further argues that the ESC contains no

exclusion of liability for negligence and thus Trans-Spec may be

held liable for its failure to perform repairs in a workmanlike

manner. Although Trans-Spec's complaint alleges a litany of

15

The four-year statute of limitations in § 2-725(1) applies

to all claims brought under the U.C.C., not just to warranty

claims. As such, all of Trans-Spec's potential contractual claims

are time-barred.

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negligent conduct by Caterpillar ("negligent design, development,

assembly, manufacture, inspection, testing, marketing, advertising,

and distribution"), the complaint does not allege negligent repair.

Accordingly, we see no need to consider this argument further.16

Finally, Trans-Spec asserts that the negligence exclusion

clause was orally waived by Caterpillar. As record evidence of

this waiver, Trans-Spec cites testimony that Caterpillar's agents

and employees promised to "make [Trans-Spec] whole." Under

Massachusetts law, to prove waiver of a contractual provision, a

party must cite "clear, decisive and unequivocal conduct . . .

indicating that [the other party] would not insist on adherence" to

that provision. See D. Federico Co., Inc. v. Commonwealth, 415

N.E.2d 855, 858 (Mass. App. Ct. 1981) (quoting Glynn v. City of

Gloucester, 401 N.E.2d 886, 892 (Mass. App. Ct. 1980)). The vague

promise made by Caterpillar does not implicate any specific

contractual provision either directly or indirectly. As a result,

it falls short of the standard necessary to establish waiver.

In short, Trans-Spec makes no compelling argument and

cites no specific facts that would invalidate the negligence

16

Similarly, Trans-Spec argues that it has a viable claim for

negligent misrepresentation and that the "district court should

have inferred Trans-Spec's negligent misrepresentation claim from

its negligence claim and denied Caterpillar's Motion for Summary

Judgment." Trans-Spec had ample opportunity to amend its

pleadings; indeed, the negligence claim itself was not in Trans-

Spec's original complaint. Thus, we fail to understand why the

district court would be required to infer a claim that Trans-Spec

failed to assert in its pleadings.

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exclusion clause. Thus, we conclude that the district court

correctly granted Caterpillar's motion for summary judgment as to

Count III of Trans-Spec's complaint.

Affirmed.

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