The opinion of the court was delivered by: WEBER
[EDITOR'S NOTE: The following court-provided text does not appear at this cite in 581 F. Supp.]
In accordance with the accompanying Opinion, the motion of the Third-Party Defendant Phillips Driscopipe, Inc. for Summary Judgment is GRANTED and Counts I and II of the Third-Party Complaint are hereby DISMISSED thereby disposing of all claims against Phillips.
The court finding there to be no just reason for delay hereby directs the entry of a final judgment in accordance with Rule 54 in favor of Phillips Driscopipe with respect to the Third-Party Complaint filed by Pipe Systems, Inc. thereby terminating this action with respect to Phillips Driscopipe, Inc.
The third-party defendant Phillips Driscopipe, Inc. (hereinafter "Phillips") has moved for summary judgment based, in part, upon a limitation provision governing warranty actions found in a distributor's agreement executed jointly with the third-party plaintiff Pipe Systems, Inc. (hereinafter "Pipe Systems").
Pipe Systems is a Missouri corporation who supplied the plaintiff Hammermill Paper Company (hereinafter "Hammermill"), located at Erie, Pennsylvania, with certain effluent pipe liners manufactured by Phillips in May 1981. In December, 1981 and January, 1982 Hammermill discovered a breach in the system resulting in the discharge of effluent. It filed this lawsuit against Pipe Systems on January 3, 1983. On March 23, 1983 Pipe Systems filed a third-party complaint against Phillips for contribution or indemnity based on theories of strict liability in tort and breach of various express and implied warranties. Phillips has moved for summary judgment and the parties have briefed the issues. The matter is now appropriate for disposition.
It is incumbent upon the court in passing upon motions for summary judgment to determine whether there exists a genuine issue as to any material fact, the absence of which would entitle the moving party to judgment in its favor as a matter of law. Fed.R.Civ.P. 56(c). One who moves for summary judgment has the burden of demonstrating that no issue of fact exists, Fairbanks, Morse & Co. v. Consolidated Fisheries Co., 190 F.2d 817, 824 (3d Cir. 1951), and the court must draw all reasonable inferences against the moving party. United States v. Diebold, Inc., 369 U.S. 654, 655, 8 L. Ed. 2d 176, 82 S. Ct. 993 (1962). It is also established that a party opposing such a motion "may not rest upon the mere allegations or denials of his pleading, but his response, by affidavits . . ., must set forth specific facts showing that there is a genuine issue for trial." Fed.R.Civ.P. 56(c).
The court must first determine the question of the applicable state law. We are bound to apply the substantive law of the state to which the forum state, Pennsylvania, would have turned had this suit been filed in a state court. The distributor's agreement executed by Phillips and Pipe Systems states: "This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Texas." A Pennsylvania court would apply Texas law consistent with the agreement of the parties. 13 Pa.C.S.A. § 1105(a) (Supp. 1983), see also, Aluminum Co. of America v. Essex Group, Inc., 499 F. Supp. 53, 59 (W.D. Pa. 1980); Admiral Corporation v. Cerullo Electric Supply Co., 32 F.R.D. 379, 381 (M.D. Pa. 1961). Accordingly, we must enforce the agreement as well and apply Texas law. Klaxon v. Stentor Mfg. Co. Inc., 313 U.S. 487, 85 L. Ed. 1477, 61 S. Ct. 1020 (1941).
Pipe Systems alleges that Phillips breached "specific and general warranties with regard to the quality of the pipe and the fitness of the pipe for the purposes for which it was intended . . . ." An express warranty of merchantability is found in the distributor's Agreement which also contains a provision requiring the commencement of any action for breach of the agreement within a period of one year after the occurrence of the breach.
Paragraph 7 of the distributor's agreement provides:
DISTRIBUTOR agrees that a thirty (30) day period after receipt of the Products is a reasonable time for inspection of the Products and for discovery of any claim whatsoever. Notice of any claim by DISTRIBUTOR must be given in writing within said thirty (30) day period. DISTRIBUTOR further agrees that notice thereafter is not seasonable and that any complaint which is not made in writing shall not be the basis for a claim, counterclaim or setoff; and, without limitation, no defense, counterclaim or setoff shall be asserted against an action for the price where DISTRIBUTOR has failed to give the aforesaid written notice within thirty (30) days of the receipt of the Products. An action for breach of this Agreement (except for nonpayment by DISTRIBUTOR) must be commenced within one (1) year after the occurrence of the breach. All claims relating to shipment handling must be made directly to the carrier by DISTRIBUTOR. No Products will be accepted for return without the prior written authorization of SELLER and unless routed as indicated by SELLER.
Texas law recognizes that the period of limitation for an action based on a contract for sale may be set by an agreement of the parties pursuant to the provisions of Texas UCC Article 2.725.