The opinion
MAINE SUPREME JUDICIAL COURT Reporter of Decisions
Decision: 2016 ME 175
Docket: BCD-15-481
Argued: May 3, 2016
Decided: December 1, 2016
Panel: SAUFLEY, C.J., and ALEXANDER, MEAD, GORMAN, JABAR, HJELM, and HUMPHREY, JJ.
ARUNDEL VALLEY, LLC, et al.
v.
BRANCH RIVER PLASTICS, INC., et al.
HUMPHREY, J.
[¶1] This appeal involves a complex construction dispute between
Arundel Valley, LLC, the developer of a facility for a butter manufacturer, and
Branch River Plastics, Inc., a manufacturer and distributor of insulated roofing
panels. After a six-day trial in the Business and Consumer Docket, a jury
found in Arundel Valley’s favor on its claims that Branch River breached
implied warranties by supplying defective roofing panels. Branch River
appeals from the court’s (Horton, J.) denial of its motion for a new trial,
arguing that (1) it was unfairly surprised by certain expert testimony at trial
and (2) the court erroneously declined to adjudicate whether Branch River
had disclaimed implied warranties. Because we agree with Branch River’s
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second contention, we remand the case for the court to determine whether
Branch River’s purported disclaimer of implied warranties was effective.
I. BACKGROUND
[¶2] On December 28, 2012, Arundel Valley and Kate’s Homemade
Butter, Inc., filed a twelve-count complaint in the Superior Court
(York County) against Branch River and other defendants alleging, inter alia,
defects in roofing panels that Branch River had manufactured and supplied to
Arundel Valley for a construction project. Branch River was named as a
defendant in seven counts.1 After the case was transferred to the Business
and Consumer Docket, the court (Horton, J.) ultimately entered summary
judgments in Branch River’s favor on five of those counts.2 Two counts
remained for adjudication at trial, with Arundel Valley as the sole plaintiff and
Branch River as the sole defendant. In those counts, Arundel Valley claimed
that Branch River had breached the implied warranties of merchantability
1 The complaint contained five counts against defendants other than Branch River; each of those
counts was eventually dismissed, and none is at issue on appeal.
2 The court also entered summary judgments in favor of Branch River’s owner on all claims
against him and ruled that Kate’s Butter was not a proper plaintiff in the action.
3
(Count XI) and fitness for a particular purpose (Count XII) by providing
defective roofing panels.3
[¶3] Before trial, pursuant to M.R. Civ. P. 26(b)(4), Arundel Valley
designated James B. DeStefano, a professional engineer, as an expert witness.
At trial, DeStefano testified, on direct examination, about two types of
manufacturing defects in the panels that would affect the roof’s performance:
(1) manufacturing defects that created gaps between the panels,4 and
(2) manufacturing defects involving gaps between foam components inside
each panel.5 Branch River did not object to this testimony.
[¶4] During redirect, counsel for Arundel Valley asked DeStefano about
a “third report,” referring to a letter from DeStefano to an Arundel Valley
representative that described “open joints between sections of [] foam within
the panels.” Counsel for Branch River expressed concern that Branch River
had not received the “third report,” and that it was surprised at DeStefano’s
testimony describing defects inside each panel. Arundel Valley’s attorney
3 The panels at issue are large structural insulated panels, or “SIPs,” each of which is composed
of a flat foam core covered on both sides with oriented strand board sheathing, creating an
insulated sandwich panel designed to increase the energy efficiency of a structure.
4 DeStefano testified, “[T]here’s a gap here between the foam faces. But you’ll notice that the
skins, the [oriented strand board] skins, are in tight contact. So the installer putting this together,
even if he was an expert at it, could not have physically gotten those panels any closer together.”
5 DeStefano testified, “We found that inside each individual panel, there was actually a space or
a gap in between the individual blocks of foam, and there was no adhesive bonding it together.”
4
argued that the letter was attached to a pretrial motion in limine and that
Arundel Valley had otherwise made Branch River aware that DeStefano would
testify about both types of defects. After some discussion, Branch River’s
counsel said, “if you’re going to represent to [the court] that you produced
[the letter] in some fashion, I’ll accept that.”
[¶5] The court suggested that counsel for Arundel Valley clarify with
DeStefano that the letter concerned issues he had already testified about on
direct examination. The letter was not offered as an exhibit or admitted in
evidence. Branch River did not object to DeStefano’s continued redirect
testimony about the “third report” or the defect inside the panels, did not
further address the issue on recross, and did not raise the issue again at trial.
[¶6] The jury heard testimony during trial that (1) all Branch River
products came with a “standard” twenty-year warranty; (2) Branch River’s
president had told Arundel Valley it was voiding the “standard” warranty on
the panels after issues with their installation first arose; (3) Branch River later
sent an express warranty document to Arundel Valley, which included a
disclaimer of implied warranties; and (4) Arundel Valley never signed that
document. No document containing the “standard” warranty that Branch
River purportedly voided was ever identified with specificity. Branch River’s
5
Exhibit 21, a document that contains an express warranty and purports to
disclaim any implied warranties, was identified by Branch River’s president as
the express warranty document that he sent to Arundel Valley after voiding
the “standard” warranty.
[¶7] On the fifth day of trial, the court conferred with counsel in
chambers to discuss jury instructions and a verdict form. The court and
counsel placed the results of that conference on the record. After discussing
the jury instructions, counsel for Branch River moved “to enforce the
limitation on damages that is set forth in the . . . written warranty” and moved
to admit the express warranty document. The parties and the court discussed
Branch River’s Exhibit 21, which was eventually admitted in evidence. The
court then specifically asked Branch River whether it was going to argue to
the jury that it had disclaimed implied warranties. Branch River
unequivocally said that it was not going to do so and that Exhibit 21 should
not even go into the jury room. Branch River emphasized that Exhibit 21 was
for the court’s review. In response, the court stated that the disclaimer issue
may require a post-verdict ruling and deferred making a ruling on Branch
River’s motion at that time.
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[¶8] The next substantive discussion on the record about the express
warranty and disclaimer came on the final day of trial after another chambers
conference. At the conclusion of that conference, and just before the jury was
to hear the arguments of counsel and instructions from the court, the court
raised the status of any factual or legal issues regarding the express warranty
and made a “tentative legal ruling” that “Branch River did not have a right to
impose a warranty on Arundel Valley.” The court also stated, “[M]y view of
the evidence is that [the express warranty containing language disclaiming
implied warranties was] not part of the contractual undertaking between the
parties.” The court then added:
The bottom line is I understand counsel have agreed that although
the express warranty is in evidence and can be mentioned,
et cetera, the status of the express warranty is not going to be
argued to the jury. In other words, the only warranty issues and
breach of warranty issues that the jury is going to be asked to
decide are the two implied warranty counts . . . .
(Emphasis added.) The court then asked if any party wished to add anything
further, and the following exchange occurred:
[Branch River]: As we discussed in chambers, our position is that
[as] a matter of law, that the Plaintiff’s . . . acceptance was
irrelevant to the validity of the warranty, the application of the
warranty to this case. Further, it was the Plaintiff . . . that actually
demanded that the warranty be reinstated and then we . . .
accepted that demand and did, in fact, comply with the request.
Under those circumstances . . . we take the position that Arundel
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Valley’s again accepting it is not necessary. And I understand the
[c]ourt’s position.
[Court]: So it’s pretty clear to me that to the extent there are any
factual issues about the status of the reinstatement, the parties
are not asking the jury to decide those issues. Those are left for
the [c]ourt to decide. And I’m not suggesting there are any factual
issues. [Branch River] may be correct, that this is a straight legal
issue. But just so we’re all on the same page, that’s my
understanding, is that—and I’ll put it this way. Any and all issues,
legal or factual about the effect of the disclaimer and the status of
the disclaimer are being left for the [c]ourt to decide. Is that
Plaintiff’s understanding . . . ?
[Arundel Valley]: Yes, Your Honor.
[Court]: And Defendant’s?
[Branch River]: Yes.
(Emphasis added.) Neither party raised the disclaimer issue again at trial.
[¶9] After receiving instructions on the two implied warranty claims,
the jury deliberated and returned a verdict in favor of Arundel Valley, and the
court entered a judgment on the verdict on July 13, 2015.6
[¶10] Two weeks later, pursuant to M.R. Civ. P. 59(a), Branch River
moved for a new trial on multiple grounds, including that (1) it had been
“ambush[ed]” by DeStefano’s trial testimony regarding defects inside each
panel and (2) the court erroneously decided that Branch River had voided the
6 The jury awarded Arundel Valley over $1,000,000 in damages, but the award was reduced by
the amount received from the settling defendants, resulting in a judgment of $660,080.40.
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express warranty containing the disclaimer of implied warranties.7 The court
denied Branch River’s motion, concluding that none of its challenges
warranted a new trial. On the disclaimer issue, the court concluded that
“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.”
The court also stated, “[W]hether 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 this issue, but Branch River
did not request any such instructions.” Branch River timely appealed from the
denial of its motion for a new trial.
II. DISCUSSION
A. Unfair Surprise
[¶11] Branch River contends that the court erred by denying its motion
for a new trial because DeStefano’s trial testimony regarding the
manufacturing defect that caused problems inside each panel “constituted
unfair surprise.” “Because the trial court is in the best position to assess the
7 Branch River does not challenge the court’s decision that other grounds asserted in the motion
did not warrant a new trial.
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jury’s reactions and motivations, we review its decision to deny a motion for
. . . a new trial deferentially.” Seabury-Peterson v. Jhamb, 2011 ME 35, ¶ 14,
15 A.3d 746; see State v. Daluz, 2016 ME 102, ¶ 46, 143 A.3d 800 (noting that
such review is deferential based on “the trial court’s unique ability to view the
fairness of the proceedings”). We therefore review the denial of a motion for a
new trial for a “clear and manifest abuse of discretion.” Seabury-Peterson,
2011 ME 35, ¶ 14, 15 A.3d 746 (quotation marks omitted).
[¶12] The trial court determined that Branch River did not object to
DeStefano’s testimony at trial; that, if Branch River had objected, the court
could have taken steps short of ordering a new trial to cure any problem; and
that, in any event, no curative action would have been necessary because
Branch River “was on notice of the substance of the testimony at issue.” These
determinations are supported by the record. Although there may have been
some confusion among the parties’ lawyers regarding the different types of
manufacturing defects about which DeStefano would testify, the trial court did
not err by concluding that the record of pretrial proceedings did not support
Branch River’s contention that the substance of DeStefano’s testimony
represented an intentional or unfair surprise. Under these circumstances, we
cannot conclude that the trial court abused its discretion when it decided that
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Branch River’s argument regarding DeStefano’s testimony was, first,
unpreserved; and second, unpersuasive as a ground for ordering a new trial
pursuant to M.R. Civ. P. 59(a). We therefore do not disturb the trial court’s
decision on that issue.
B. Disclaimer of Implied Warranties
[¶13] If Branch River effectively disclaimed all implied warranties,
either through a “standard” warranty with disclaimers that was part of the
parties’ initial contract, or through the “express” warranty identified as
Exhibit 21, it could not, as a matter of law, be held liable on the two claims at
issue at trial: breach of the implied warranty of merchantability and breach of
the implied warranty of fitness for a particular purpose. See 11 M.R.S.
§§ 2-314, 2-315, 2-316 (2015). Branch River argues that the court withdrew
from the jury the issue of whether there was an effective disclaimer of implied
warranties, failed to rule on that issue before the case went to the jury, and
then denied the motion for a new trial because Branch River had failed to
move to instruct the jury on that issue.
[¶14] Although the transcript is not entirely clear, we conclude that the
court gave the parties the impression that it, not the jury, would decide any
legal or factual issues concerning the purported disclaimer of implied
11
warranties. Contrary to Branch River’s contention, however, the appropriate
relief in this case is not to order a new trial—Branch River asked the court to
make a ruling on the disclaimer issue on the evidence already before it, and a
ruling on the purported disclaimer does not require a new jury verdict. We
therefore vacate the judgment as to Count XI (breach of implied warranty of
merchantability) and Count XII (breach of implied warranty of fitness for a
particular purpose) and remand the case to the trial court to rule on “[a]ny
and all issues, legal or factual[,] about the effect of the disclaimer and the
status of the disclaimer,” which is the ruling the court gave the impression it
would make. The court may, in its discretion, entertain further argument
from the parties on this issue.
[¶15] If the court rules, based on the evidence presented at trial, that
Branch River made no legally operative disclaimer of implied warranties, the
court must re-enter the judgment on the jury’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.
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The entry is:
Judgment vacated as to Count XI (breach of
implied warranty of merchantability) and Count
XII (breach of implied warranty of fitness for a
particular purpose). Remanded for further
proceedings consistent with this opinion.
Judgment affirmed in all other respects.
On the briefs:
Catherine R. Connors, Esq., and Michael J. Daly, Esq., Pierce
Atwood LLP, Portland, for appellant Branch River Plastics,
Inc.
Timothy J. Bryant, Esq., and Jonathan G. Mermin, Esq., Preti
Flaherty Beliveau & Pachios, LLP, Portland, for appellee
Arundel Valley, LLC
At oral argument:
Catherine R. Connors, Esq., for appellant Branch River
Plastics, Inc.
Timothy J. Bryant, Esq., for appellee Arundel Valley, LLC
Business and Consumer Docket docket number CV-2013-15
FOR CLERK REFERENCE ONLY