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Visual Communications, Inc. v. Konica Minolta Business Solutions U.S.A.

April 27, 2009

VISUAL COMMUNICATIONS, INC., PLAINTIFF
v.
KONICA MINOLTA BUSINESS SOLUTIONS U.S.A., INC., DEFENDANT



The opinion of the court was delivered by: Anita B. Brody, J.

MEMORANDUM

This case arises from two broken color copiers. The defendant Konica Minolta Business Solutions U.S.A., Inc., ("Konica" or "KMBSUS") manufactured the copiers and sold them to IKON Office Solutions, Inc. ("IKON"). The plaintiff Visual Communications, Inc., ("Visual") then leased the copiers from IKON and began using them. However, the copiers malfunctioned so often that Visual rented other copiers to replace them. Visual then sued Konica for breach of an express warranty and for breaches of the implied warranties of merchantability and fitness for a particular purpose under the Pennsylvania Uniform Commercial Code, 13 Pa. Cons. Stat. Ann. §§ 1101-9710. Jurisdiction exists under 28 U.S.C. § 1332.*fn1 Before me now is Konica's motion for summary judgment under Federal Rule of Civil Procedure 56 (Doc. #20).

I. BACKGROUND*fn2

In 2003, Konica and IKON entered into a contract in which Konica agreed to sell copiers to IKON for resale or lease to IKON's customers ("Distribution Agreement"). The contract contains the following provision:

KMBSUS warrants that Product(s) and parts thereof delivered hereunder will meet the applicable Specifications for such Product(s) (attached hereto as Exhibit B) and shall be free from defects in material and workmanship for a period of one hundred eighty (180) days from the date IKON receives the Product(s). If, during such one hundred eighty (180) day period, KMBSUS is notified of any defect in the Product, then KMBSUS shall, within thirty (30) days of notification thereof and at KMBSUS's option, either repair, replace or credit IKON for such Product or component thereof.*fn3 (Pl.'s Ex. A at 4.) The contract also provides that "IKON may pass through and assign any and all warranties, representations and indemnities provided by Konica hereunder to its customers for their benefit." (Pl.'s Ex. A at 5.)

Visual designs and builds exhibits for trade shows, and makes presentations to prospective customers. In June 2005 and May 2006, Konica sold two color copiers to IKON pursuant to the Distribution Agreement. The copier sold in 2005 was the BP 500C, and the one sold in 2006 was the CPP 500. After each purchase, IKON leased the copier to Visual for a five-year term. Both lease agreements between Visual and IKON contain the following provision:

We transfer to you without recourse, for the term of this Agreement, any written warranties made by the manufacturer with respect to the Equipment. Since we are a finance company and neither the manufacturer nor the distributor of the Equipment, WE MAKE NO WARRANTIES, EXPRESS, OR IMPLIED, INCLUDING WARRANTIES OF MERCHANTABILITY OR FITNESS FOR USE OR FOR A PARTICULAR PURPOSE. You acknowledge that you have selected the Equipment you are renting from us based on your own judgment and you hereby affirmatively disclaim reliance on any oral representations concerning the Equipment made to you. (Pl.'s Ex. G-1 at 2; Pl.'s Ex. G-2 at 2.)

In Konica's product literature, the BP 500C and CPP 300 copiers are called the Bizhub PRO C500 model. IKON's proposal to Visual dated June 16, 2005, states that this model "will handle up to 150,000 impressions per month." (Pl.'s Ex. D at 4.) A print-out of Konica's website dated March 14, 2008, also indicates that this model has a "150,000 page monthly duty cycle." (Pl.'s Ex. E at 1.)

Visual used the copiers immediately and found them unreliable from the start. Although Visual made on average fewer than 5 thousand copies per month on one copier and fewer than 14 thousand copies per month on the other one, both copiers often jammed or made poor copies.*fn4

Visual was forced to request service from IKON at least twice each month from January to August 2007.*fn5 But servicing the copiers provided only temporary relief. Ultimately, Visual had to replace them. In September 2007, Visual leased two new copiers from Oce North America and tendered the old copiers to IKON for repossession.

On October 15, 2007, Visual sent an email to IKON alleging breach of implied warranties based on the copiers' malfunctioning. (Pl.'s Ex. I.) Visual also mailed a letter to Konica dated January 25, 2008, that contained the same allegations and included a draft complaint. (Pl.'s Ex. J.) This letter was the first notice that Visual gave Konica about any problem with the copiers.

II. STANDARD

Federal Rule of Civil Procedure 56 provides that a court must grant summary judgment when "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed. R. Civ. Pro. 56(c). Facts are "material" when they might affect the outcome of the case, and a "genuine issue" exists when the evidence would allow a reasonable jury to return a verdict for the non-moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248-52 (1986). The moving party "is entitled to judgment as a matter of law" when the non-moving party fails to make an adequate showing on an essential element for which he has the burden of proof at trial. See Cleveland v. Policy Mgmt. Sys. Corp., 526 U.S. 795, ...


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