United States District Court, D. Massachusetts
J. Casper United States District Judge
Vigilant Insurance Company (“Vigilant”) has filed
this lawsuit against Defendant Energy Savings Products, Ltd.
(“Energy Savings”) alleging negligence and breach
of the implied warranty of merchantability in the sale and
installation of a heating, ventilation, and air conditioning
(“HVAC”) unit that was placed into the residence
of Vigilant's insured. D. 1. In turn, Energy Savings has
filed a third-party complaint against Custom Coils, Inc.
(“Custom Coils”), the manufacturer of a component
of the HVAC unit, alleging contribution (Count I), breach of
contract (Count II), indemnification (Count III), breach of
the implied warranty of merchantability and fitness for usage
of trade (Count IV) and breach of the implied warranty of
merchantability for a particular purpose (Count V). D. 10.
Custom Coils has now moved for summary judgment. D. 36.
Vigilant has also moved for leave to file an amended
complaint to assert claims directly against Custom Coils. D.
35. For the reasons stated below, the Court DENIES Custom
Coils's motion for summary judgment and GRANTS
Vigilant's motion for leave to file an amended complaint.
Standard of Review
judgment is proper if the movant shows that “there is
no genuine dispute as to any material fact and the moving
party is entitled to judgment as a matter of law.”
Ahmed v. Johnson, 752 F.3d 490, 495 (1st Cir. 2014).
“A dispute is genuine if “the evidence about the
fact is such that a reasonable jury could resolve the point
in favor of the non-moving party.'” Johnson v.
Univ. of P.R., 714 F.3d 48, 52 (1st Cir. 2013) (quoting
Thompson v. Coca-Cola Co., 522 F.3d 168, 175 (1st
Cir. 2008)). “A fact is material if it has potential to
determine the outcome of the litigation.” Id.
(quoting Maymi v. P.R. Ports Auth., 515 F.3d 20, 25
(1st Cir. 2008)).
determining whether a movant has met its burden, the court
must view the record in the light most favorable to the
nonmoving party and give that party the benefit of all
reasonable inferences in its favor. Johnson, 714
F.3d at 52. Once the moving party has made a preliminary
showing that no genuine issue of material fact exists, the
nonmovant must produce “specific facts, in suitable
evidentiary form, to establish the presence of a trialworthy
issue.” Fed.R.Civ.P. 56(c); Brooks v. AIG
SunAmerica Life Assur. Co., 480 F.3d 579, 586 (1st Cir.
2007) (quoting Clifford v. Barnhart, 449 F.3d 276,
280 (1st Cir. 2006)). “As to any essential factual
element of its claim on which the nonmovant would bear the
burden of proof at trial, its failure to come forward with
sufficient evidence to generate a trialworthy issue warrants
summary judgment to the moving party.” In re
Spigel, 260 F.3d 27, 31 (1st Cir. 2001) (citation and
internal punctuation omitted).
following facts are drawn from Custom Coils's Rule 56.1
statement of material facts (included in its motion for
summary judgment), D. 36-1, Energy Savings's response to
Custom Coils's statement of material facts, D. 40, and
supporting documents, all of which are undisputed unless
November 1, 2013, a property owner insured by Vigilant
sustained property damage as a result of water discharge from
an Energy Savings HVAC unit, Model Number HE-70H (the
“unit”). D. 36-1 at 1; D. 40 ¶ 1. The unit
was installed at the insured's vacation home located at
45 Point Road, North Falmouth, Massachusetts (the
“Property”), at some point in 2010. D. 36-1 at 1;
D. 40 ¶ 2. Following the water leak, the unit was
inspected and a substantial dent and crack was found in the
header pipe of the unit's hot water coil. D. 36-1 at 1-2;
D. 40 ¶ 3.
damaged coil was originally manufactured by Custom Coils in
2008 and had been ordered by Energy Savings for installation
in the unit pursuant to a purchase order and invoice for
ninety-six model #20-5303 coils. D. 36-1 at 2-3; D. 40
¶¶ 6, 7, 23. The coil was made by assembling copper
tubes and manifolds according to particular specifications
provided to Custom Coils by Energy Savings. D. 36-1 at 2; D.
40 ¶ 11. That is, Custom Coils produced this coil
specifically for Energy Savings. Id.
to shipment to Energy Savings, Custom Coils inspected and
tested each coil. D. 36-1 at 2; D. 40 ¶ 9. Per standard
operating procedure, coil shipments arriving at Energy
Savings's facility-including the one that contained the
coil at issue here-are inspected by Energy Savings employees.
D. 36-1 at 3; D. 40 ¶¶ 16, 17. The coils were
removed from their containers and then visually inspected for
any abnormalities such as “dings, dents, or
misformations.” D. 36-1 at 3; D. 40 ¶ 16. If a
coil passes inspection, Energy Savings then installs it into
an HVAC unit. D. 36-1 at 3; D. 40 ¶ 20. Energy Savings
has stated that, had it received a coil in the condition
found in the incident HVAC unit, it would not have installed
the coil and would have instead returned it to Custom Coils.
D. 36-1 at 3; D. 40 ¶ 21. Thus, both parties agree that
the mechanical damage that was observed on the coil at issue
here occurred at some point after manufacturing, leak
testing, assembly and inspection. D. 36-1 at 4; D. 40 ¶
26. Following the initiation of this lawsuit, the incident
coil and exemplar coils were subject to various tests to
determine the cause of the leak. D. 36-9; D. 40-2; D. 40-3;
D. 40-4. These tests included nondestructive and destructive
examination of the subject coil and an exemplar coil, as well
as metallurgical testing. D. 36-9; D. 40-2; D. 40-3; D. 40-4.
The various experts retained by the parties have come to
conflicting theories of liability pertaining to the
leak's origin. See D. 36-9; D. 40-2; D. 40-3; D.
instituted this action on April 1, 2015. D. 1. Energy Savings
filed its third-party complaint against Custom Coils on June
26, 2015. D. 10. Vigilant has now moved for leave to file an
amended complaint and Custom Coils has moved for summary
judgment as to the third-party claims against it. D. 35; D.
36. The Court heard the parties on the pending motions on
March 16, 2017 and took these matters under advisement. D.
Breach of Warranty
Coils argues that there is insufficient proof that any
actions on its part caused the coil failure that led to the
unit's leak and, therefore, summary judgment in its favor
is warranted as to Energy Savings's breach of warranty
claims. D. 36-1 at 7. Custom Coils maintains that, after
leaving its possession, an impact of unknown origin dented
and cracked the joint. Id. According to this theory,