Parker v. Exterior Restorations, Inc.

653 F.Supp.3d 1105

John H. PARKER, et al., Plaintiffs, v. EXTERIOR RESTORATIONS, INC., et al., Defendants.

CIVIL ACTION 21-0425-WS-B

United States District Court, S.D. Alabama, Southern Division

Signed January 24, 2023

Charles William Daniels, Jr., Christine Burns-Brown, Kenneth Bryant Hitson, Michael Wade Rich, Burr & Forman LLP, Mobile, AL, for Plaintiffs.

M. Warren Butler, Bonnie Branum Minopoli, Starnes Davis Florie LLP, Mobile, AL, for Defendants Exterior Restorations, Inc., Burl Barnett.

John M. Bergquist, Parsons, Lee & Juliano, P.C., Birmingham, AL, for Defendant Sto Corp.

Richard M. Gaal, Thomas Hart Benton, III, McDowell Knight Roedder & Sledge, L.L.C., Mobile, AL, for Defendant Wall And Ceiling Solutions, LLC.

Thomas Hart Benton, III, McDowell Knight Roedder & Sledge, LLC, Mobile, AL, for Defendant Terrance Dittenber.

ORDER

WILLIAM H. STEELE, UNITED STATES DISTRICT JUDGE

This matter is before the Court on a motion to dismiss filed by defendant Sto Corp. ("Sto"), (Doc. 185), and on a motion to dismiss in part filed by defendants Wall and Ceiling Solutions, LLC ("WCS") and Terry Dittenber. (Doc. 186). The parties have filed briefs in support of their respective positions, (Docs. 185-86, 196, 201-02), and the motions are ripe for resolution. After careful consideration, the Court concludes that Sto's motion is due to be granted in part and denied in part and that the motion of WCS and Dittenber is due to be granted.

BACKGROUND

Familiarity with the factual and legal background of this action is assumed. The counts of the seventh amended complaint, (Doc. 174), relevant to the pending motions are:

• Count V breach of warranty

• Count VI Alabama Extended Manufacturer's Liability Doctrine ("AEMLD")

• Count VII negligence

• Count VIII wantonness

• Count IX fraud/suppression

• Count XII fraud/suppression

These are the only counts as to which Sto is a defendant, and it seeks dismissal of all of them. WCS and Dittenber are defendants under multiple counts, but they seek dismissal only of Count XII.

DISCUSSION

"There is no burden upon the district court to distill every potential argument that could be made based upon the materials before it on summary judgment." Resolution Trust Corp. v. Dunmar Corp., 43 F.3d 587, 599 (11th Cir. 1995); accord Gennusa v. Canova, 748 F.3d 1103, 1116 (11th Cir. 2014). The Court applies the same rule to motions to dismiss and accordingly limits its review to those arguments the parties have expressly advanced.

"District courts, including this one, ordinarily do not consider arguments raised for the first time on reply." Arnold v. State Farm Fire and Casualty Co., 268 F. Supp. 3d 1297, 1303 (S.D. Ala. 2017); accord Scott v. ILA Local 140 International Longshoremen's Association, 449 F. Supp. 3d 1270, 1273 (S.D. Ala. 2020). Unless the offending party articulates an adequate reason for its failure to present in its principal brief an argument then available to it, the Court will not grant relief based on arguments first raised in reply. See, e.g., id. at 1273-74 (declining to consider an argument first raised in a reply brief, despite the defendant's assertion that it did not understand the scope of the complaint, because its scope was plain from the face of the pleading).¹

A. Breach of Warranty.

Count V alleges breach of both express and implied warranties. The Court addresses them separately.

1. Express warranty.

The seventh amended complaint alleges that Sto manufactured the stucco that was applied to Parker's house. It also alleges that Dittenber, either once or twice, visited the property and purported to inspect the stucco and its application. The seventh amended complaint continues that Dittenber, with Sto's awareness, held himself out to the plaintiffs as having authority to make assurances regarding Sto's warranty and that he twice promised the plaintiffs that Sto would issue its standard materials warranty "upon completion." (Doc. 174 at 7-9, 14, 19-20).

Sto points out that Count V alleges that "[n]o warranty has been issued by Sto," (Doc. 174 at 20), and it argues that this statement negates the existence of an express warranty and thus a breach of express warranty. (Doc. 185 at 3). The plaintiffs respond that they have merely engaged in permissible alternative pleading,² hedging their bets as to whether Dittenber had authority to bind Sto to its standard materials warranty (in which case the plaintiffs seek to hold Sto liable for breach) or did not (in which case the plaintiffs seek to hold Dittenber and WCS to a warranty by estoppel). (Doc. 196 at 14-15). Count V plainly uses the language of alternatives,³ and Sto in its reply makes no effort to counter the plaintiffs' construction of their pleading or of governing law.

The parties are vague as to what constitutes "issu[ance]" of an express warranty. Sto insists the plaintiffs "did not receive" an express warranty, (Doc. 185 at 3 (emphasis added)), language suggesting it believes such a warranty can be issued only by delivery of a paper or electronic document. Sto offers no authority for the proposition that an express warranty cannot arise by other means, including by promise of the seller or its agent that such a warranty will issue, and the Court will not supply the deficiency.

In its reply brief, Sto argues that there could be no warranty arising from Dittenber's alleged promise because, by its terms, the warranty was contingent upon the stucco subcontractor ("Exterior") completing the project, and the seventh amended complaint alleges that Exterior was fired before finishing. (Doc. 202 at 4). When it filed its principal brief, Sto was perfectly aware that the seventh amended complaint pegs Sto's liability for breach of express warranty to Dittenber's representations, (Doc. 185 at 3), and it fails to explain why it nevertheless failed to assert this challenge to the plaintiffs' theory until its reply brief. Sto's belated argument therefore cannot form the basis of relief.

In any event, the written messages from Dittenber on which the plaintiffs rely do not state that the warranty will issue only if the project is completed by Exterior. The first states that "[u]pon completion Sto will issue our Standard Materials Warranty." (Doc. 174 at 7). The message does not say that the warranty will issue upon completion by Exterior but simply "upon completion." Similarly, the second message says only that "a Materials Warranty will be issued upon completion," without any reference to completion by a particular applicator. (Id. at 9). Sto is free to attempt to prove that the messages incorporate a requirement that Exterior be the one to finish the project, but on motion to dismiss its preferred construction cannot be credited.⁴

2. Implied warranty.

Count V alleges that Sto, as manufacturer of the stucco, warranted that the stucco was "merchantable" and "fit for the ordinary purposes for which it was intended." (Doc. 174 at 19, 20). Count V therefore implicates an implied warranty of merchantability. See Ala. Code § 7-2-314 (an implied warranty that goods are merchantable requires that the goods be "fit for the ordinary purposes for which such goods are used").

Sto offers two arguments against the plaintiffs' implied warranty claim: (1) Sto is not a "seller" under Alabama's version of the UCC; and (2) stucco, once applied to a home, is no longer a "good" to which an implied warranty may run. (Doc. 185 at 4). The Court considers these arguments in turn.

i. "Seller."

Under the UCC, " 'Seller' means a person who sells or contracts to sell goods." Ala. Code § 7-2-103(1)(d). Sto admits that it sells stucco, and it admits that the stucco products it sells are goods when it sells them. (Doc. 185 at 4). Sto nevertheless asserts that it "is a manufacturer rather than a seller or retailer of goods." (Id. (emphasis in original)). A manufacturer, however, is a seller under Section 7-2-103(1)(d), since it meets that straightforward definition. "By its terms, a seller is anyone who sells, including a manufacturer or distributor." Bishop v. Faroy Sales, 336 So. 2d 1340, 1343 (Ala. 1976) (emphasis added).⁵

Only a merchant can provide an implied warranty of merchantability. Ala. Code § 7-2-314. A "merchant" includes "a person who deals in goods of the kind" at issue. Id. § 7-2-104(1). The seventh amended complaint, with its descriptions of the expanse of Sto's distribution and support network, plainly alleges that Sto is a merchant within this definition, and Sto does not effectively deny that it meets the definition. Sto is therefore capable of issuing an implied warranty of merchantability.

Because Sto is alleged to be a merchant, "a warranty that the goods shall be merchantable is implied in a contract for their sale," subject only to exclusion or modification. Ala. Code § 7-2-314. Sto neither asserts the existence of such an exclusion or modification nor argues that the seventh amended complaint fails to adequately allege their non-existence (assuming without deciding that Rule 8 places any such pleading burden on the plaintiffs). Thus, under the seventh amended complaint, a warranty of merchantability arose upon Sto's sale of the subject stucco.

Sto's argument morphs from denying it is a seller to denying it is in privity with the plaintiffs. (Doc. 185 at 4). This is important, because "[a] sellers' [sic] warranty, whether express or implied, extends to any natural person if it is reasonable to expect that such person may use, consume or be affected by the goods and who is injured in person by breach of the warranty." Ala. Code § 7-2-318. The parties agree that this provision prevents the plaintiffs from seeking economic damages for breach of implied warranty. (Doc. 185 at 4; Doc. 196 at 11).

However, because "[a] manufacturer . . . intends the products he sells to eventually arrive in the hands of consumers[, its] warranty would extend to the final buyerconsumer of the product . . . if he is injured in person by the breach of the warranty." Bishop, 336...