The opinion of the court was delivered by: THOMAS I. VANASKIE
In its amended complaint, filed on February 10, 1992 (Dkt. Entry # 15), Piezo Crystal Company (hereafter "Piezo") asserted contract and fraud claims in relation to its purchase of steel for use in its production of precision timing devices. Jurisdiction exists based upon diversity of citizenship.
On October 7, 1993, defendants moved for summary judgment on all claims asserted in the amended complaint. For the reasons stated below, the motion will be granted in part and denied in part.
Piezo manufactures precision timing devices for use in computers, communications, and testing equipment which have scientific and military applications. Piezo also cuts quartz to detailed specifications for use in their products and by other manufacturers. The quartz, once cut to specification, is called a "crystal wafer." When properly cut, the crystal wafer resonates at pre-determined frequencies from electronic stimulation.
To cut the quartz, Piezo uses a specialized saw, called a slurry saw, equipped with toothless steel blades. These blades must meet very particular metallurgical and mechanical properties. Piezo cuts the blades from steel supplied by manufacturers such as the defendant corporations (hereafter "Uddeholm").
Piezo initiated this action due to production problems it alleges were caused by blades made from Uddeholm steel in thicknesses of ".008," which is eight thousandths of an inch thick, and ".012," which is twelve thousandths of an inch thick (hereafter ".008 steel" or ".012 steel" where applicable).
Piezo purchased .008 steel from Uddeholm throughout the 1970s. Piezo bought .012 steel from Uddeholm in the late 1970s. (Pl.'s Br. Opp. Summ. J. at 6; Defs.' Br. Supp. Summ. J. at 17.) The steel that Piezo purchased from Uddeholm during this period was a grade of steel called "UHB-20" (hereafter "UHB-20 steel"). (Pl.'s Br. Opp. Summ. J. at 6.) Piezo purchased .008 steel and .012 steel from other suppliers during the late 1970s and early 1980s, but continued to purchase other items produced by Uddeholm during these years. (Pl.'s Br. Opp. Summ. J. at 7.)
In April and August of 1985, a sales representative for Uddeholm visited Piezo's manufacturing plant in order to prepare price quotes for Piezo. (Pl.'s Appendix to Br. Opp. Summ. J. at 4, pg. 76.) Quotations associated with the visits specifically described "UHB 20" steel. (Pl.'s Appendix to Br. Opp. Summ. J. at 6, Ex. B.) Piezo resumed purchasing .008 steel from Uddeholm in March, 1986. It resumed purchasing .012 steel in 1989. Between March, 1986, and December, 1990, Piezo placed at least five orders with Uddeholm and received deliveries of either .008 steel or .012 steel from Uddeholm on more than twelve occasions.
The pertinent paperwork involved in these transactions explicitly reflects that Piezo ordered UHB-20 steel. Documents generated by Uddeholm, which include Uddeholm's completed invoices, quotations, work order and order acknowledgment forms, almost uniformly represent that "UHB-20" steel was being sold by Uddeholm. (See copies attached to Pl.'s Appendix to Br. Opp. Summ. J. (Doc. Entry # 82) at Exhibits 6 through 11, 18, 22.) In addition to placing written purchase orders with Uddeholm, Piezo alleges that it placed at least one order for UMB-20 steel by telephone, which is confirmed by Uddeholm's records. (Pl.'s Br. Opp. Summ. J. at 15; Order copy attached to Pl.'s Appendix to Br. Opp. Summ. J. (Doc. Entry #82) at 15.)
Piezo alleges that with each shipment of steel, its employees compared Piezo's purchase orders with Uddeholm's order acknowledgments, work orders and invoices, which, as explained above, represented that UHB-20 steel was delivered. (Pl.'s Br. Opp. Summ. J. at 11.)
Uddeholm, however, did not deliver UHB-20 steel to Piezo. Instead, it delivered a different grade of steel, called "UHB-20C" (hereafter "UHD-20C steel"), the significant difference between UHD-20 steel and UHB-20C steel apparently being that the surface of UHB-20C steel demonstrates "irregularities in the pattern of surface residual stresses" which do not exist in the surface of UHB-20 steel. (Pl.'s Dr. Opp. Summ. J. at 18.) Uddeholm marked the outside of its containers carrying UHB-20C steel with blue tags which stated, inter alia, the description, grade, and order number of the steel. The tags specifically stated that the steel was UHB-20C steel. Containers in which UHB-20 steel had been shipped had been marked with purple tags. The steel that Uddeholm delivered to Piezo between March, 1986, and December, 1990, was marked with blue tags.
It appears that Uddeholm did not explain that UHB-20C steel was different than UHB-20 steel.
Furthermore, as noted above, all documentation other than the blue tags represented that "UHB-20" steel was being delivered to Piezo.
Piezo received the first deliveries of UHB-20C steel in March and April of 1986. Between late 1986 and early 1987, significant problems were encountered with the production of the crystal wafers. Piezo investigated several different possible causes for the problems, ranging from human error to the quality of the quartz being cut. (Pl.'s Dr. Opp. Summ. J. at 12-13.) Piezo's investigations, however, were hindered by the fact that the problems, which concerned the angles at which the crystal wafers were cut, did not occur consistently. (Pl.'s Br. Opp. Summ. J. at 45 n. 40.)
Between January and March of 1990, Piezo employees spoke with defendant Randall Yates, a sales representative for Uddeholm, concerning Uddeholm's inability to meet "straightness" specifications for .008 steel and .012 steel Piezo ordered in January, 1990.
The completed order forms for the January, 1990 order involved in these discussions include the specific designation "UHB-20 steel." (See copies attached to Pl.'s Appendix to Br. Opp. Summ. J. (Dkt. Entry # 82) at 15.) Yates' signature appears on Uddeholm's January, 1990 order acknowledgment form, which explicitly references UHB-20 steel. (See copies attached to Pl.'s Appendix to Dr. Opp. Summ. J. (Dkt. Entry # 82) at 18.) Following their discussions, Piezo and Yates subsequently changed the steel order to meet different specifications, and the change order forms also represent that "UHB-20 steel" was being delivered. Yates' signature appears on Piezo's change order forms to verify "Vendor Acceptance." (See copies attached to Pl.'s Appendix to Br. Opp. Summ. J. (Dkt. Entry # 82) at 18.) Yates' signature also appears on Uddeholm's order acknowledgment for the change order, which specifically states, "UHB-20 steel." However, an internal order form to the Uddeholm mill, which Yates initialed, refers to "UHB-20C" steel. (Pl.'s App. to Dr. Opp. Summ. J. (Dkt. Entry # 82) at Ex. 19.) The March delivery to satisfy this change order was Uddeholm's final delivery of UHB-20C steel to Piezo. There is no indication that Yates informed any Piezo employee of any difference between UHB-20 and UHB-20C steel.
On October 30, 1990, a business visitor to Piezo's manufacturing plant, Amos J. Shaler, Sc.D., suggested that Piezo's production problems could be caused by the fact that its saw blades were not made with UHB-20 steel. Piezo alleges that shortly thereafter it purchased steel from another supplier and its production problems disappeared. (Pl.'s Br. Opp. Summ. J. at 17.) Piezo notified Uddeholm in February of 1991 that it believed that Uddeholm steel had been the cause of problems in Piezo's production line. (Pl.'s Appendix to Br. Opp. Summ. J. (Doc. Entry #82) at Ex. 20.)
Piezo filed a complaint on July 24, 1991, maintaining that its production problems were caused by the UHB-20C steel. In a January 21, 1992 Order, Chief Judge Rambo directed Piezo to file an amended complaint (Dkt. Entry # 14), and Piezo complied on February 10, 1992 (Dkt. Entry # 15). Piezo's amended complaint asserts claims of fraud and misrepresentation (Counts I and II), breach of contract (Count IV), and breach of express and implied warranties. (Count V and VI).
On October 7, 1993, following the completion of discovery, the defendants moved for summary judgment, assailing the merits of Piezo's claims and also asserting a statute of limitations defense. (Dkt. Entry # 70.)
MOTION FOR SUMMARY JUDGMENT
Rule 56(c) of the Federal Rules of Civil Procedure provides that summary judgment should be granted when "there is no genuine issue as to any material fact and . . . the moving party is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(c). Thus, summary judgment will not lie "if the dispute about a material fact is 'genuine,' that is, if the evidence is such that a reasonable jury could return a verdict for the non-moving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986). There is no issue for trial unless sufficient evidence exists which favors the non-moving party so that a jury may return a verdict for that party. Anderson, 477 U.S. at 249-250.
A fact is "material" if proof of its existence or nonexistence would affect the outcome of the lawsuit under the law applicable to the case. Id., 477 U.S. at 248. Summary judgment thus should be entered when a party "fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof ...