Rollstock, Inc. v. SupplyOne, Inc.

660 F.Supp.3d 809

ROLLSTOCK, INC., Plaintiff, v. SUPPLYONE, INC., Defendant.

Case No. 4:21-cv-00395-RK

United States District Court, W.D. Missouri, Western Division

Signed March 8, 2023

Bruce A. Courtade, Pro Hac Vice, Mark Greidanus, Pro Hac Vice, Laura Kane, Pro Hac Vice, Rhoades McKee PC, Grand Rapids, MI, William C. Odle, The Odle Law Firm, LLC, Parkville, MO, for Plaintiff.

Allison Brauns Spors, John S. Kingston, Layla Husen, Shaun Craig Broeker, Thompson Coburn LLP, St. Louis, MO, for Defendant.

ORDER

ROSEANN A. KETCHMARK, JUDGE

Before the Court is the motion for summary judgment filed by Plaintiff Rollstock, Inc. ("Rollstock") seeking summary judgment on (1) Count I (breach of contract) of its first amended complaint, and (2) Counterclaim I (breach of contract) filed by Defendant SupplyOne, Inc. ("SupplyOne"). (Doc. 57.) Additionally, Rollstock argues (1) it is entitled to summary judgment on SupplyOne's Counterclaim II (fraud), and (2) that Supply One's Counterclaim III (unjust enrichment) is barred by the existence of a contract between the parties. (Doc. 58.) The motion is fully briefed. (Docs. 58, 61, 66, 67, 69, 70.) For the reasons below, Rollstock's motion for summary judgment (Doc. 57) is GRANTED as to SupplyOne's Counterclaim II (fraudulent omission) and Counterclaim III (unjust enrichment) and DENIED in all other respects.

Background

This case arises from a contract between Rollstock, Inc. and SupplyOne, Inc. Rollstock manufactures and sells packaging systems. SupplyOne supplies packaging systems to its customers. Under the contract between Rollstock and SupplyOne, SupplyOne purchased an RC-300 Rotary Chamber machine ("machine") from Rollstock. The machine was for its customer ALL Holding Company, LLC's ("ALL") pork plant facility. ALL, who is not a party, was going to use the machine to vacuum pack pork in bags sold by SupplyOne.

The parties disagree as to (1) which documents embody the terms of the contract, (2) whether Rollstock misrepresented that the machine was new when SupplyOne claims it was in fact used and ten years old, and (3) whether either party breached the contract—Rollstock by supplying a defective machine it could not repair, or SupplyOne by not making payments owed under the contract.

PROPOSAL 1: January 28, 2019

In early 2019, SupplyOne contacted Rollstock and indicated that one of its customers, ALL, was interested in acquiring the machine, to be used in a conveyor and packaging system in ALL's "fresh cut room" in its pork plant in Pennsylvania.¹,² (Doc. 58 at ¶¶ 7-8.) Rollstock submitted a proposal ("Proposal 1") dated January 28, 2019, to SupplyOne for the machine that SupplyOne was contemplating purchasing for ALL as part of a secondary independent agreement with ALL. (Id. at ¶ 12; Doc. 58-1 at 155-158.) Proposal 1 provided that Rollstock would be paid $458,098 for the machine and related equipment according to the following terms (the "Payment Terms"): 50 percent of the machine price as a "Deposit with contract,"³ 40 percent of the machine price "5x days prior to shipment," and the remaining 10 percent of the machine price "30x days after shipment." (Doc. 58 at ¶ 13.) Proposal 1 included a limited one-year warranty (the "Warranty"), as follows:

ROLLSTOCK LIMITED WARRANTY

ROLLSTOCK INC makes the following LIMITED WARRANTIES. These LIMITED WARRANTIES extend to the original purchaser of this ROLLSTOCK INC product and to no other purchaser or transferee.

ROLLSTOCK INC warrants your ROLLSTOCK INC product against defects in materials or workmanship for a period of one (1) year from the date of installation or one (1) million cycles - a cycle being one (1) complete rotation of all six (6) chambers, or whichever comes first.

Warranty may be voided by use of unauthorized and/or modified parts, or the use of non[ ] ROLLSTOCK INC certified technicians.

THIS WARRANTY IS EXCLUSIVE. ROLLSTOCK INC MAKES NO OTHER WRITTEN OR VERBAL WARRANTIES OF ANY KIND WHATSOEVER. ALL OTHER WARRANTIES, EXPRESS OR IMPLIED INCLUDING, BUT NOT LIMITED TO WARRANTIES OF MERCHANTABILITY AND/OR FITNESS FOR A PARTICULAR PURPOSE ARE HER[E]BY DISCLAIMED AND EXCLUDED FROM THIS AGREEMENT BY ROLLSTOCK INC.

(Id. at ¶ 14.) The Warranty also included an exclusive remedy provision (the "Exclusive Remedy"), stating as follows:

Exclusive Remedy. Upon verification of any defect in materials or workmanship, ROLLSTOCK INC will repair your ROLLSTOCK INC product and/or replace any nonconforming or defective parts and materials without charge. In the event that your ROLLSTOCK INC product cannot be repaired, ROLLSTOCK INC will refund an equitable portion of your purchase price upon return of your ROLLSTOCK INC product. THESE REMEDIES SHALL BE YOUR SOLE AND EXCLUSIVE REMEDIES AGAINST ROLLSTOCK INC. YOUR REMEDIES SHALL NOT INCLUDE, AND ROLLSTOCK INC SHALL NOT BE LIABLE FOR, ANY CONSEQUENTIAL DAMAGES OR ANY SPECIAL INCIDENTAL DAMAGES, LOSS OR EXPENSE.

(Id. at 15.) Proposal 1 also provided: "This quote is valid for 30x days from the date created[.]" (Id. at ¶ 16.)

Approximately two days later, on or about January 30, 2019 (after removing Rollstock's logo from Proposal 1 and replacing it with its own logo), SupplyOne emailed a copy of Proposal 1 to ALL's General Manager that included, without further modification, Rollstock's Payment Terms, Warranty and Exclusive Remedy provisions. (Id. at ¶ 18.) SupplyOne did not accept Proposal 1 within 30 days.

PROPOSAL 2: May 9, 2019

Approximately three months later, on May 9, 2019, Rollstock submitted an "updated" proposal ("Proposal 2") to SupplyOne. (Id. at ¶ 22.) Proposal 2 modified the machine price (reducing it from $458,098 to $430,598 due to changes in what Rollstock was being asked to provide), but otherwise contained the same Payment Terms, Warranty and Exclusive Remedy provisions, and language providing that the "quote is valid for 30x days" as in Proposal 1. (Id. at ¶ 23; Doc. 58-1 at 161.) SupplyOne did not accept Proposal 2 within 30 days.

PROPOSAL 3: October 15, 2019

Instead, several months later, after further negotiations resulted in additional changes to the machine specifications, Rollstock submitted a third proposal on October 15, 2019 ("Proposal 3") to SupplyOne. (Doc. 58 at ¶ 24.) Although the machine price in Proposal 3 remained the same as Proposal 2 ($430,598), Proposal 3 added a provision that Rollstock would provide a single "scheduled service tech visit after 4 wks of machine install date" and offered a "5% discount on all spare parts for a year." (Id. at ¶ 25.) Proposal 3 otherwise contained the same Payment Terms, Warranty and Exclusive Remedy provisions, and "quote is valid for 30x days" provision as in Proposals 1 and 2. (Id. at ¶ 26.) SupplyOne did not accept Proposal 3 within 30 days.

Performance Guarantee Negotiations: January 2020

In January of 2020, SupplyOne's Food Packaging Specialist Dave Schell⁴ communicated with Rollstock's president, Erik Bauer, regarding SupplyOne's purchase of the machine and the terms of the contract. (Doc. 58 at ¶¶ 38-41; Doc. 58-1 at 209, 215-220.) The last email in the thread, from Mr. Schell to Mr. Bauer, sent January 24, 2020, at 8:19 am read:

When we spoke on the phone, you mentioned a timeframe that the contract would cover (2 years), and the remedy if the machine does not operate to the expectations as laid out (I believe you said Rollstock would want a chance to make it right and if you couldn't you would take the machine back and refund the cost). Neither of these items are mentioned and there are likely other details that should be covered. This is going to need a little more meat in order to present it to [ALL].

(Id. at 209.)

EMAILS: February 21, 2020, February 24, 2020, February 25, 2020

On February 21, 2020, Mr. Schell emailed Mr. Bauer that "SupplyOne will be purchasing the equipment and you should see a PO [(purchase order)] for that early next week." (Doc. 58-1 at 167.)

The following business day, February 24, 2020, Mr. Schell emailed other SupplyOne personnel to issue the purchase order as soon as possible. (Doc. 58 at ¶ 45; Doc. 58-1 at 98.) The email had Proposal 3 attached. (Doc. 58 at ¶ 46; Doc. 58-1 at 111-113.) The email noted the Payment Terms from Proposal 3, indicated an understanding that SupplyOne would be "paying the sales sheet price minus 10% (10% was our rebate)[,]" and that "[t]here is no warranty noted" and SupplyOne and ALL would be "going out to KC in the next couple of weeks to meet with Rollstock and discuss/agree to a performance guarantee warranty." (Doc. 58-1 at 98.) Mr. Schell and Mr. Bauer continued communicating regarding SupplyOne's site visit and testing of the machine at Rollstock. (Id. at 192.)

PURCHASE ORDER: February 27, 2020

SupplyOne issued a purchase order, dated February 27, 2020, ("Purchase Order") and assigned "P/O Number 169243" to the document. (Doc. 58-1 at 43-45.) The Purchase Order indicated the price for the machine, parts, and start-up and training totaled $387,538.20. (Id.) The Purchase Order stated the order was to be purchased from Rollstock, Inc. and would be shipped to ALL in Pennsylvania. (Id.) The Purchase Order issued by SupplyOne to Rollstock described the "terms" of the payment due by SupplyOne to Rollstock as "NET 30 DAYS." (Doc. 58 at ¶ 56; Doc. 58-1 at 43-45.) The Purchase Order contained no warranty provision; made no provision or requirement for Rollstock to make any service technician site visits to ALL's facilities; but, provided that Rollstock would provide a maximum of 5 days "start-up and training"; and set forth a "5/14/20" product due date. (Id.)

PROFORMA INVOICE and PAYMENT: March 3, 2020

Four days later, on March 3, 2020, Rollstock issued a Proforma Invoice ("First Invoice") to SupplyOne. (Doc. 4-1 at 11.) The Proforma Invoice referenced SupplyOne's Purchase Order by "P.O. Number 169243"; set forth "50% Payment due with machine order"; and listed the "TOTAL AMOUNT DUE" pursuant to the Proforma Invoice at $193,769.10. (Id.)

On that same day, SupplyOne paid...