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H.E.D. Inc v. Konica Minolta Business Solutions U.S.A. Inc.

United States District Court, N.D. Indiana, Hammond Division

September 29, 2017

H.E.D. INC., d/b/a Sounds and Graphics; Plaintiff,
v.
KONICA MINOLTA BUSINESS SOLUTIONS U.S.A. INC.; KONICA MINOLTA PREMIER FINANCE; WILLIAM KOCHANNY; Defendants.

          OPINION AND ORDER

          JAMES T. MOODY, UNITED STATES DISTRICT JUDGE

         I. BACKGROUND

         This case stems from two contracts, a Premier Lease Agreement (“PLA”) and a Maintenance Contract (“MC”), entered into by plaintiff H.E.D. Inc., a printing company doing business as Sounds and Graphics (“H.E.D.”), in connection with its lease of a C8000 Konica printer. (DE # 84-9; DE # 90-2.) On the other side of each of these agreements was one or both of the Konica defendants in this case, Konica Minolta Business Solutions U.S.A. Inc. (“KMBS”) and Konica Minolta Premier Finance (“KMPF”), though as explained in more detail below, precisely who was a party to the PLA is hotly debated. The PLA contained a waiver regarding warranties, a waiver regarding certain types of damages, a proclamation that the lease constituted a “Finance Lease” under the Uniform Commercial Code (“U.C.C.”), and a waiver of certain U.C.C. rights.

         Ultimately, the parties' deal went sour, as H.E.D. claims the C8000 was unable to handle papers of a certain thickness as necessary to fulfill orders placed by H.E.D. customers. (DE # 4 at 3.) H.E.D. sued the Konica defendants for breach of warranty and breach of contract, as well as defendant William Kochanny, an employee of KMBS, who H.E.D. claims made misrepresentations regarding characteristics and capabilities of the C8000. (DE # 4.)

         Before the court are cross-motions for summary judgment, one brought by H.E.D. (DE # 82), and one brought by the Konica defendants and Kochanny (DE # 89). Three related evidentiary motions were filed. (DE ## 91, 106, 108.)[1] After copious, verbose, and often duplicative briefing, the motions are now ready for ruling.[2] For the reasons set forth below, H.E.D.'s motion for summary judgment is denied, defendants' cross-motion for summary judgment is granted, in part, and denied, in part, and the evidentiary motions are denied as moot, because the resolution of the issues raised therein is not necessary for resolution of the motions for summary judgment.

         II. LEGAL STANDARD

         Federal Rule of Civil Procedure 56 requires the entry of summary judgment, after adequate time for discovery, against a party “who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial.” Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). “[S]ummary judgment is appropriate-in fact, is mandated-where there are no disputed issues of material fact and the movant must prevail as a matter of law. In other words, the record must reveal that no reasonable jury could find for the non-moving party.” Dempsey v. Atchison, Topeka, & Santa Fe Ry. Co., 16 F.3d 832, 836 (7th Cir. 1994) (citations and quotation marks omitted).

         The moving party bears the initial burden of demonstrating that these requirements have been met. Carmichael v. Village of Palatine, Ill., 605 F.3d 451, 460 (7th Cir. 2010). “[T]he burden on the moving party may be discharged by ‘showing'-that is, pointing out to the district court-that there is an absence of evidence to support the nonmoving party's case.” Celotex, 477 U.S. at 325. Once the moving party has met his burden, the non-moving party must identify specific facts establishing that there is a genuine issue of fact for trial. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252 (1986); Palmer v. Marion County, 327 F.3d 588, 595 (7th Cir. 2003) (citing Celotex, 477 U.S. at 324). In doing so, the non-moving party cannot rest on the pleadings alone, but must present fresh proof in support of its position. Anderson, 477 U.S. at 248; Donovan v. City of Milwaukee, 17 F.3d 944, 947 (7th Cir. 1994). In viewing the facts presented on a motion for summary judgment, the court must construe all facts in a light most favorable to the non-moving party and draw all reasonable inferences in favor of that party. Chmiel v. JC Penney Life Ins. Co., 158 F.3d 966 (7th Cir. 1998).

         III. DISCUSSION[3]

         Though the parties have filed separate cross-motions for summary judgment, the issues addressed in the motions are nearly identical, as are the responses and replies thereto. It is wasteful and unnecessary to address each motion separately, as they involve significant substantive overlap. Therefore, in the context of this opinion, the court addresses the issues generally, with an eye to the ultimate question of the existence of a genuine issue of material fact, while simultaneously keeping in mind the summary judgment burden-shifting standard and relevant burdens of persuasion.

         A. Parties Subject to the PLA

         At the outset, the court must address a matter critically important to the cross-motions for summary judgment: the identity of the parties subject to the PLA. The importance of this issue is clear from the full page of fine print covering the second page of the PLA: H.E.D. waived a number of its rights vis-a-vis the other party or parties to the PLA, whomever they may be. (DE # 84-9.) Specifically, H.E.D. waived its right to recover consequential, indirect, or incidental damages (id. ¶ 12), “rights under Article 2A (508-522) of the UCC” (id.), and the right to sue for express or implied warranties, including merchantability and fitness for particular purpose (id. ¶ 5). For this reason, the court addresses this question of contract interpretation, first.

         “The goal of contract interpretation is to determine the intent of the parties when they made the agreement.” Tender Loving Care Mgmt., Inc. v. Sherls, 14 N.E.3d 67, 72 (Ind.Ct.App. 2014). This court must examine the plain language of the contract, read it in context and, whenever possible, construe it so as to render every word, phrase, and term meaningful, unambiguous, and harmonious with the whole. Id. Construction of the terms of a written contract generally is a pure question of law. Id. If, however, a contract is ambiguous, the parties may introduce extrinsic evidence of its meaning, and the interpretation becomes a question of fact. Broadbent v. Fifth Third Bank, 59 N.E.3d 305, 311 (Ind.Ct.App. 2016). “A word or phrase is ambiguous if reasonable people could differ as to its meaning.” Id.

         The PLA, a two-page[4] lease agreement, bound H.E.D. to a certain number of payments over a certain term of months in exchange for use of the C8000. (DE # 84-9 at 2.) At the top of the PLA, a “Konica Minolta” logo appears. (Id.) Underneath the logo, it states:

This Premier Lease Agreement (“Agreement”) is written in “Plain English.” The words you and your refers to the customer (and its guarantors). The words Lessor, we, us, and our refer to Konica Minolta Premier Finance, a program of Konica Minolta Business ...

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