Flynn v. CTB, Inc.

MIKE FLYNN, et al., Plaintiffs, v. CTB, INC., Defendant.

Case No. 1:12CV68 SNLJ

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MISSOURI SOUTHEASTERN DIVISION

September 28, 2015

MEMORANDUM AND ORDER

This matter is before the Court on defendant's motion for summary judgment and plaintiffs' motion for class certification. The motions have been fully briefed and are ripe for disposition. For the following reasons, the motion for summary judgment will be granted in part and denied in part. The motion for class certification will be denied.

I. Background

At various times in 2007 and 2008, plaintiffs Mike Flynn, Steve Watkins, and Donnie Underwood d/b/a Underwood Farms each purchased a Brock Harvest-Time Bin Unload System with power sweep (HT sweep) manufactured by defendant CTB, Inc. The system was marketed to unload free-flowing grains. Plaintiffs filed this action on behalf of themselves and a putative class alleging that the HT sweep did not function properly. Plaintiffs allege that the HT sweep cannot maintain sufficient contact with the grain nor move it with sufficient force to sweep the grain into the unloading system beneath the grain bin floor. Workers must push the sweep into the grain, exposing the workers to hazards, causing delays, and decreasing the value of the grain bin.

Plaintiffs claim that defendant has known of the shortcomings of the HT sweep since at least 2006. They allege that defendant has made numerous modifications to the HT sweep to improve its effectiveness, but the changes have not remedied the inherent design limitations. Plaintiffs further allege that the HT sweep cannot move common grains such as corn, rice, wheat, and soybeans. Plaintiffs seek class-wide relief for all purchasers of the HT sweeps in refunds or replacement sweeps. Plaintiffs have pled claims for breach of express warranty, breach of implied warranty, and fraud.

Plaintiffs seek class certification of a breach of implied warranty class with plaintiff Flynn as class representative and a fraud class with plaintiffs Watkins and Underwood as class representatives. Defendant opposes class certification and seeks summary judgment on the claims of Flynn, Watkins, and Underwood. Plaintiff opposes summary judgment on the breach of implied warranty claim of plaintiff Flynn and the fraud claim of plaintiffs Watkins and Underwood. Plaintiffs do not contest the motion on all other claims, including the breach of express warranty claims of all plaintiffs.

II. Motion for Summary Judgment

A. Summary Judgment Standard

Pursuant to Federal Rule of Civil Procedure 56(a), a district court may grant a motion for summary judgment if all of the information before the court demonstrates that "there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law." Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). The burden is on the moving party. City of Mt. Pleasant, Iowa v. Associated Elec. Co-op. Inc., 838 F.2d 268, 273 (8th Cir. 1988). After the moving party discharges this burden,the nonmoving party must do more than show there is doubt as to the facts. Matsushita Elec. Industrial Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). Instead, the nonmoving party must set forth specific facts showing there is sufficient evidence in his favor to allow a jury to return a verdict for him. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986); Celotex, 477 U.S. at 324.

In ruling on a motion for summary judgment, the court must review the facts in a light most favorable to the party opposing the motion and give that party the benefit of any inferences that logically can be drawn from those facts. Matsushita, 475 U.S. at 587; Woods v. DaimlerChrysler Corp., 409 F.3d 984, 990 (8th Cir. 2005). The Court may not "weigh the evidence in the summary judgment record, decide credibility questions, or determine the truth of any factual issue." Kampouris v. St. Louis Symphony Soc., 210 F.3d 845, 847 (8th Cir. 2000). Finally, the court must resolve all conflicts of evidence in favor of the nonmoving party. Robert Johnson Grain Co. v. Chemical Interchange Co., 541 F.2d 207, 210 (8th Cir. 1976).

B. Facts

The Court has reviewed the parties' statements of uncontroverted material facts, the responses, and the supporting documentation, and, where appropriate, will accept facts as supported by appropriate admissible evidence. These undisputed facts are before the Court on this motion. Additional facts are set forth in the discussion.

Defendant's Facts

CTB sells the Brock Harvest-Time Bin Unload System with the power sweep to dealers, who then sell the sweeps to end users. Plaintiffs Mike Flynn, Steve Watkins, andDonnie Underwood d/b/a Underwood Farms are Missouri residents who purchased HT sweeps from Bruce Martin Construction, Inc. (BMCI). For the warranty claims, plaintiffs allege that the HT sweeps they purchased failed to conform to CTB's express warranty that the sweeps would be free of defects in material and workmanship for one year following the date of initial installation by or for the original purchaser. Further, plaintiffs allege that the HT sweeps failed to conform to the implied warranty of merchantability in that they "will not sweep around the grain bin under [their] own power when unloading common grains such as rice, wheat, soybeans and in some cases corn, rendering [them] ill-suited for [their] intended purpose. [They require] a person or persons to be inside the bin to physically push the auger, creating safety risks, consuming labor, and decreasing the value of the bin."

Plaintiff Underwood purchased two HT sweeps in spring 2007, and the sweeps were installed in May 2007. Underwood first used the HT sweeps in fall 2007. According to Underwood, when he first used the HT sweeps, the sweep arms would not advance into the grain, and "two or three" people had to enter the grain bin to push the sweep arms manually. Underwood claimed he experienced those problems with both sweeps. Plaintiff Watkins also purchased his HT sweep in 2007, and it was installed the same year. Watkins testified that he used the HT sweep to unload rice between September 2007 and January 2008 and, during that process, the sweep arm failed to advance into the grain. Plaintiffs filed this action on April 25, 2012.

Plaintiffs acquired their HT sweeps from BMCI. A Brock Bin Unload System Assembly and Operations Manual (Manual) accompanied each HT sweep. The following language appears in the Manual:

Brock Manufacturing ("BROCK") warrants each new BROCK® Harvest-Time Bin Unload System manufactured by it to be free from defects in material or workmanship for one (1) year from and after the date of installation by or for the original purchaser. If such defect is found by the Manufacturer to exist within the one-year period, the Manufacturer will, at its option, (a) repair or replace such product free of charge, F.O.B. the factory of manufacture, or (b) refund to the original purchaser the original purchase price, in lieu of such repair or replacement.

* * *

THIS WARRANTY CONSTITUTES THE MANUFACTURER'S ENTIRE AND SOLE WARRANTY AND THE MANUFACTURER EXPRESSLY DISCLAIMS ANY AND ALL OTHER WARRANTIES, INCLUDING, BUT NOT LIMITED TO, EXPRESS AND IMPLIED WARRANTIES AS TO MERCHANTABILITY, FITNESS FOR PARTICULAR PURPOSES SOLD AND DESCRIPTION OR QUALITY OF THE PRODUCT FURNISHED HEREUNDER.

For the fraud claim, plaintiffs allege that defendant CTB failed to disclose certain information regarding alleged performance problems with the HT sweeps to its dealers and that, had such disclosures been made, the dealers would have conveyed that information to their purchasers and the purchasers would have not purchased the HT sweeps. Bruce Martin of BMCI testified that he first learned of performance problems with the HT sweeps in 2006. Specifically, Martin testified that he received information in 2006 that some HT sweeps, in certain circumstances, "wouldn't advance any in the grain and move the grain to the center of the bin." He further testified that, notwithstanding that knowledge, BMCI continued to sell the HT sweeps to customers "throughout 2006, 2007, and 2008[.]" BMCI made no disclosures to plaintiffs regardingthe alleged performance problems. Plaintiffs interacted solely with BMCI in their purchases of the HT sweeps, not with defendant CTB.

Plaintiffs' Facts

The Problems with the HT Sweep¹

Before bringing the HT sweep to market in 2002, CTB conducted limited pre-launch testing in an AGI facility in Canada using wheat and corn, but not rice. The HT sweep is positioned on the backside of center hopper - not in the center. This requires the sweep to push the grain further around the bin floor to deposit it in the hopper. In August of 2004, CTB personnel discussed as an R&D issue the "possibility of developing a kit that would allow a new underfloor tube to be staggered off of center by 6 [inch] and then have a chain and sprocket system to move the sweep gearbox further over the center hopper (centered in the bin). This would allow the rice to fall directly into the center hopper without being pushed (rice does not push and compacts easily)."

On January 29, 2007, a farmer named Robert Schoger faxed CTB about problems with his HTS, including that it had a weak backboard that would drag on the floor. Before launching the HT sweep, CTB and co-manufacturer, AgGrowth International (AGI), had received dealer feedback in 2001 and 2002 that the drive wheel could get snagged on tech screws, reducing its durability. The drive wheel design for the HT sweep was changed five times through October of 2006, and eight times by November30, 2007. Changes included attempts to move its location to avoid the tech screws in the bin, adding weights for traction, and changing the gearbox.

In March 2009, CTB and AGI first tested the durability of the drive wheel material. No specifications for the drive wheel had existed before then. When the wheel was tested, it was found...