The Third Party Installation Of A Manufacturer's Component Was Not Covered By Its Express Warranty
CARLISLE v. DEERE & COMPANY (August 7, 2009)
Carlisle and his partner operated an excavating business. In 2002, they purchased a used heavy-duty tree grinder called the Beast. The Beast already had a history. It was originally manufactured and purchased in 1999. The original owner replaced the engine with one manufactured by Deere & Co. From the moment Carlisle purchased the Beast, it was anything but. It lacked power, overheated, and generally underperformed. After many inquiries, Carlisle was eventually told to check the Performance Programming Connector (PPC), a component in the Beast's control mechanism. The PPC is also manufactured by Deere but sold separately from its engines. Carlisle discovered that a wire had been installed that limited the engine's rotations. Carlisle cut the wire with immediate effect -- the Beast was again worthy of its name. Carlisle sued Deere for breach of the warranty it inherited when it purchased the Beast. The district court granted summary judgment to Deere. Carlisle appeals.
In their opinion, Judges Kanne, Evans and Dow affirmed. The issue for the Court on appeal was whether the deficiency noted by Carlisle was covered by the warranty. The warranty covered "defective workmanship" but excluded from its coverage components that were not installed by Deere. Because the PPC is meant to be configured in a number of possible ways depending on the use of the engine it controls, it is manufactured and shipped by Deere in an unconfigured state. The Court concluded, therefore, that the unwanted wire could not be considered defective workmanship. Deere could still be liable if it installed, and configured, the PPC. The only admissible evidence in the record supported Deere's contention that it did not. Carlisle attempted to prove otherwise with his statement that the engine installer had told him that Deere configured the wiring. The Court concluded that the statement was classic hearsay and rejected Carlisle's contention that the installer was either authorized to make the statement or was an agent of Deere's under Rule 801(d).
Gary Mister, an employee of Northeast Illinois Commuter Railroad Corp. ("Metra"), was returning to his parked car on a January day in 2005 when he slipped on the ice and fell. Kirk Kroner, Metra's Safety Officer, investigated the accident. At the hospital, he discussed it with two of Mister's supervisors. According to his written report, a similar incident had occurred at the same location a week prior. At trial, the court excluded the report and all related testimony. After a jury found for Metra, Mister appealed.
G&J Plastering Company is a plastering contractor in the Greater Chicago area. Between 1993 and 2002, three different labor unions represented the plastering employees of G&J, including Local 5 of the Journeymen Plasterers' Protective and Benevolent Society of Chicago. The collective bargaining agreements of each union required G&J to make contributions to various union trust funds. Local 5 required the company to contribute based on an employee’s union, regardless of where the work was performed. One of the other unions required the company to make contributions based on work location, not the employee’s union. A union election conducted in 2002 resulted in the termination of Local 5’s representation of the company. In an exit audit, the company disclosed that it had been making contributions based on union membership rather than work location and had no records showing where work was performed. Given this absence of data, Local 5 instructed its auditors to compute the amount owed based on a set of assumptions and a review of the company’s payroll records. The auditors concluded that the company owed in excess of $800,000. Local 5 filed suit. After a three-day bench trial, the court awarded $1.1 million for unpaid contributions plus interest but disallowed the union's request to recover $45,000 in audit costs. Both sides appeal.