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L.P. v. Gregory Mortimer Builders

United States District Court, W.D. Pennsylvania

January 3, 2017

84 LUMBER COMPANY, L.P. Plaintiff/Counter-Defendant
v.
GREGORY MORTIMER BUILDERS, et al. Defendants/Counter-Plaintiffs

          MEMORANDUM OPINION ON DEFENDANT'S MOTION TO RECONSIDER ECF NO. 225

          Lisa Pupo Lenihan United States Magistrate Judge

         I. SUMMATION

         For the reasons set forth below, the Court will deny Defendant's Motion to Reconsider Memorandum Opinion on Contractual Damage Limitations (“Defendant's Motion to Reconsider”) (ECF No. 225), as Defendant (collectively referring herein to Defendant Gregory Mortimer and affiliate Defendants/Counter-Plaintiffs) does not meet the standard required for grant of a Motion to Reconsider. In so holding, the Court briefly observes that it (1) expressly did not determine limitations on contractual damages in this action to be governed by the statutory provisions of the Uniform Commercial Code (“the UCC”); (2) properly analyzed the case under appropriate relevant authority and analogous law, including the general law merchant and decisions applying principles of law and commerce underlying the UCC to both UCC and non-UCC actions; (3) considered, but rejected for reasons fully articulated in its October 11, 2016 Memorandum Opinion on Contractual Damage Limitations (“the Memorandum Opinion”) (ECF No. 214), Defendant's view of the application of the Fourth Circuit's determination of South Carolina law in Waters v. Massey-Ferguson, Inc., 775 F.2d 587 (4th Cir. 1985) to the case sub judice; and (4) did not render a premature determination of potential liability for fraudulent inducement/misrepresentation.

         Finally, although the request for “clarify[ication]” set forth in Defendant's Supplemental Memorandum of Law in Support of Motion to Reconsider (“Defendant's Supplemental Memo”) (ECF No. 229) at 2, is somewhat misplaced in a Motion to Reconsider, the Court will reiterate for the record that it meant what it said, i.e., “the contractual consequential damage limitation provisions at issue stand as to those claims encompassed by their language, i.e., those related to ‘defects in workmanship or materials' and the damages flowing therefrom”. See ECF No. 229 at 2 (quoting ECF No. 214 at 22). See also ECF No. 229 at 2-3 (observing the Court's Pretrial Order reference to the “establishment and valuation of permissible damages for alleged deficiencies/delays in construction work product to standards warranted . . . which claims are subject to the consequential damage limitations provisions”). With regard to Defendant's assertion that newly-asserted theories of liability -stemming from factual allegations of Plaintiff's failure to “provide competent supervision . . ., proper insurance . . . and a site superintendent” - provide grounds for a holding that “paragraph 15's consequential damages limitation does not apply to [Defendant]'s claims for breach of contractual obligations outside the scope of paragraph 15's warranty”, ECF No. 229 at 3, the Court must disagree.

         II. RELEVANT FACTUAL AND PROCEDURAL HISTORY

         The extensively documented factual and legal history in this case arising from disputes between the parties with regard to (a) construction material purchases and (b) sub-contracted construction of housing in Defendants' multi-duplex residential developments - Timberlake Village (hereafter “Timberlake”) and Cedar Creek - located near Deep Creek Lake, in Garrett County, Maryland was again summarized by this Court in its Memorandum Opinion.

         See ECF No. 214. That Opinion held as follows:

For the reasons set forth more fully below, the Court predicts and concludes that, under Maryland law reflecting accord with the general law merchant, the parties' contractual language precluding “any consequential, indirect, exemplary or punitive damages of any type” is an independent provision. And thus under Maryland law, absent unconscionability, a contractual prohibition against consequential damages remains in effect even where the parties' “repair or replacement” provision may fail of its essential purpose. See Patapsco Designs, Inc. v. Dominion Wireless, Inc., 276 F.Supp.2d 472 (D. Md. 2003) (predicting that under Maryland law, as reflected in adoption of UCC, limitation on damages did not fail even if repair and replacement provision failed of essential purpose; rather, damage limitation was freely contracted independent allocation of risk between business parties and remained subject to unconscionability standard). Cf. Waters v. Massey-Ferguson, Inc., 775 F.2d 587 (4th Cir. 1985) (predicting that under South Carolina law and particular circumstances of contract on case-by-case basis, consequential damage limitation did not extend to long-term damages where reasonable repair and replacement was not made by manufacturer and provision failed of essential purpose). Because the contractual damage limitation provisions at issue were not unconscionable under Maryland law, and because they are not forfeited under any of Defendants' alternative rationales, the limitation provisions remain enforceable as to those contract claims encompassed by the parties' clear language, i.e., they limit damages related to/flowing from “defects in workmanship or materials.” See discussion, infra (addressing claims of fraudulent inducement, ratification, and damages proximately caused by specific misrepresentation(s)).

ECF No. 214 at 1-2.

         Currently pending before this Court is Defendant's Motion to Reconsider (ECF No. 225) requesting reconsideration of the Court's determination that the parties' contractual limitation on damages is an independent provision from, and thus - absent other basis for forfeiture not met by Defendant, see supra and ECF No. 214 - stands regardless of a failure of essential purpose of the contract's “repair or replacement” provision. Defendant moved for reconsideration on grounds that (1) “the UCC does not apply” and the Court should not have relied on Patapsco Designs, Inc. v. Dominion Wireless, Inc., 276 F.Supp.2d 472 (D. Md. 2003) which presented analysis of UCC provisions; (2) “this case is factually and legally analogous to Waters”, supra; and (3) it was “premature to limit fraud damages” where the party now alleges he did not discover the “fraud fully until litigation commenced in this case”. See Defendant's Memorandum of Law In Support of Motion to Reconsider (“Defendant's Memo in Support”) (ECF No. 226).

         III. APPLICABLE STANDARD ON MOTION FOR RECONSIDERATION

         As duly noted by Defendant, the purpose of a motion to reconsider under Fed.R.Civ.P. 54(b) is to correct manifest errors of law or fact or to present newly discovered evidence. A motion for reconsideration [Rule 54(b)] must therefore rely on one of three grounds: (1) an intervening change in the law; (2) the availability of new evidence; or (3) the need to correct clear error of law or prevent manifest injustice.” Foster v. Westchester Fire Ins. Co., 2012 WL 2402895, at *4 (W.D. Pa. June 26, 2012). See also Plaintiff's Brief in Opposition to Defendant's Motion to Reconsider (“Plaintiff's Brief in Opposition”) (ECF No. 232) at 2-3 (citing Broadvox-CLEC, LLC v. AT&T Corp., 98 F.Supp.3d 839 (D. Md. 2015)); id. (further noting that “[m]ere disagreement with a court's rulings will not support granting a motion for reconsideration) (citing Lynn v. Monarch Recovery Mgmt., 953 F.Supp.2d 612 (D. Md. 2013)).[1]

         IV. ANALYSIS

         As expressly discussed at some length in the Memorandum Opinion, the Court did not determine this non-UCC case[2] as governed by the provisions of the UCC and, to the contrary, explained that it looked to “the broader presumption underlying and referenced in the analysis of relevant cases decided under the UCC (i.e. a State's adoption thereof) . . . that the failure of essential purpose of a repair or replacement provision does not invalidate a proscription against consequential damages because ‘sophisticated business entities' may want to allocate unknown or undeterminable risks and ‘should be free to allocate [them] as desired, provided the waiver is not unconscionable.'” SeeECF No. 214 at 9-10 (citations omitted). See also Plaintiff's Brief in Opposition, ECF No. 232 at 3-4.[3] The Court concurs with Plaintiff's response to Defendant's contention that because other provisions of the UCC are inapplicable to the analysis of this contractual commercial transaction, the UCC should not be consulted.[4] It further observes that Defendant's assertion that Patapsco, supra, “has no relevance here” because it addressed the interplay of two UCC provisions patently ignores the analysis of Patapsco provided in the Memorandum Opinion. Compare Defendant's Brief in ...


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