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Nice-Pak Products, Inc. v. Univar USA Inc.

United States District Court, S.D. Indiana, Indianapolis Division

October 4, 2017

NICE-PAK PRODUCTS, INC., FEDERAL INSURANCE COMPANY, and LONZA, INC., Plaintiffs,
v.
UNIVAR USA INC., Defendant. UNIVAR USA INC., Third Party Plaintiff,
v.
LYONDELL CHEMICAL COMPANY, and EASTERN BULK TRANSPORT, INC, Third Party Defendants.

          ENTRY ON THIRD-PARTY DEFENDANT'S MOTION FOR SUMMARY JUDGMENT

          TANYA WALTON PRATT, JUDGE

         This matter is before the Court on a Motion for Summary Judgment filed pursuant to Federal Rule of Civil Procedure 56 by Third-Party Plaintiff Lyondell Chemical Company (“Lyondell”) (Filing No. 118). Also before the Court is a Motion for Oral Argument on the Motion for Summary Judgment filed by Lyondell (Filing No. 120). For the following reasons, the Court DENIES Lyondell's Motion for Summary Judgment and DENIES the request for oral argument.

         I. BACKGROUND

         The following facts are not necessarily objectively true, but as required by Federal Rule of Civil Procedure 56, the facts are presented in the light most favorable to Third-Party Plaintiff Univar USA, Inc. (“Univar”), as the non-moving party. See Zerante v. DeLuca, 555 F.3d 582, 584 (7th Cir. 2009); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986).

         Plaintiff Nice-Pak Products, Inc. (“Nice-Pak”), is engaged in the business of producing pre-moistened wipe products for cleaning, sanitization, healthcare, cosmetics and personal hygiene. Plaintiff Lonza, Inc. (“Lonza”), is in the business of supplying pharmaceutical and biotechnology industries with biopharmaceuticals. Univar is engaged in the business of distributing chemicals and chemistry related products to its customers.

         On June 23, 2008, Univar and Lyondell entered into a Master Sales Conditions agreement (“the Agreement”), which states “[Lyondell] shall sell and [Univar] shall purchase for resale” certain products manufactured by Lyondell, including propylene glycol USP (“PG”)[1]. (Filing No. 119-2 at 2.) Lonza, one of Univar's customers, entered into a quantity contract with Univar for various products, including PG. On June 8, 2011, Lonza placed an order with Univar for 45, 000 pounds of PG, pursuant to the quantity contract. That same day, Univar placed an order with Lyondell for 45, 000 pounds of PG. Thereafter, Lyondell shipped the PG from its manufacturing facility in Texas to a storage tank at the Bayonne, New Jersey facility of International-Matex Tank Terminals (“International-Matex”). Univar then arranged for Defendant Eastern Bulk Transport, Inc. (“EBT”) to transport the PG from International-Matex to Lonza's facility in Williamsport, Pennsylvania. (See Filing No. 119-5; Filing No. 119-7.)

         On June 17, 2011, Lonza received 45, 160 pounds of PG from Univar. Lonza added the PG it received from Univar to a preservative product that it sold to Nice-Pak for use in manufacturing baby wipes. Following delivery, Nice-Pak discovered the PG exuded an unusual odor. Nice-Pak notified Lonza and Lonza determined the PG was contaminated. On August 1, 2011, Lonza informed Univar of the contamination and, in turn, Univar notified Lyondell and EBT. Thereafter, Lyondell's laboratory tested a sample of PG received directly from Lonza and also found the sample contaminated.

         As a result of the contamination, both Nice-Pak and Lonza suffered damages and Plaintiff Federal Insurance Company (“Federal”) provided insurance coverage to Nice-Pak in an amount in excess of $900, 000.00. On February 12, 2015, Federal, Nice-Pak and Lonza filed a Complaint against Univar, asserting breach of warranties; breach of contract; negligence; and express indemnity. (Filing No. 1-1 at 5-15.) On August 10, 2015, Univar filed a motion to dismiss and alternatively moved to join third-party defendants. (Filing No. 33.) Univar's request was referred to the Magistrate Judge and, on February 12, 2016, the Court entered an Order adopting the Magistrate Judge's recommendation to deny Univar's Motion to Dismiss, but to grant Univar leave to add third-party defendants. (Filing No. 56.) On July 22, 2016, Univar filed an Amended Third-Party Complaint against Lyondell and EBT, seeking indemnification for breach of contract. (Filing No. 94.) Lyondell now moves for summary judgment, asserting it fulfilled its obligation to provide quality PG in accordance with the Agreement, and any contamination to the PG occurred after Univar possessed title and risk of loss. (Filing No. 118.)

         II. SUMMARY JUDGMENT STANDARD

         The purpose of summary judgment is to “pierce the pleadings and to assess the proof in order to see whether there is a genuine need for trial.” Matsushita Electric Industrial Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). Federal Rule of Civil Procedure 56 provides that summary judgment is appropriate if “the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” Hemsworth v. Quotesmith.com, Inc., 476 F.3d 487, 489-90 (7th Cir. 2007). In ruling on a motion for summary judgment, the court reviews “the record in the light most favorable to the non-moving party and draw[s] all reasonable inferences in that party's favor.” Zerante, 555 F.3d at 584 (citation omitted). “However, inferences that are supported by only speculation or conjecture will not defeat a summary judgment motion.” Dorsey v. Morgan Stanley, 507 F.3d 624, 627 (7th Cir. 2007) (citation and quotation marks omitted). Additionally, “[a] party who bears the burden of proof on a particular issue may not rest on its pleadings, but must affirmatively demonstrate, by specific factual allegations, that there is a genuine issue of material fact that requires trial.” Hemsworth, 476 F.3d at 490 (citation omitted). “The opposing party cannot meet this burden with conclusory statements or speculation but only with appropriate citations to relevant admissible evidence.” Sink v. Knox County Hosp., 900 F.Supp. 1065, 1072 (S.D. Ind. 1995) (citations omitted).

         “In much the same way that a court is not required to scour the record in search of evidence to defeat a motion for summary judgment, nor is it permitted to conduct a paper trial on the merits of [the] claim.” Ritchie v. Glidden Co., 242 F.3d 713, 723 (7th Cir. 2001) (citations and quotation marks omitted). “[N]either the mere existence of some alleged factual dispute between the parties nor the existence of some metaphysical doubt as to the material facts is sufficient to defeat a motion for summary judgment.” Chiaramonte v. Fashion Bed Grp., Inc., 129 F.3d 391, 395 (7th Cir. 1997) (citations and quotation marks omitted).

         III. DISCUSSION

         Lyondell contends that there are no genuine issues of material fact regarding the unambiguous language of the Agreement, therefore, Lyondell is entitled to summary judgment on Univar's cause of action for breach of contract and indemnification. The issues before the Court are: 1) whether Lyondell fulfilled its obligations to provide quality PG in accordance with the Agreement, and 2) whether the contamination to the PG occurred after Univar possessed title and risk of loss. The Court notes that all parties agree that Texas law applies.

         A. ...


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