WHAT HURTS, LLC v. Volvo Penta of the Americas, LLC, No. 2:2022cv00552 - Document 77 (E.D. Va. 2024)

Court Description: OPINION and ORDER: The Court GRANTS in part and DENIES in part Volvo Penta's motion for summary judgment. ECF No. 53. The Court GRANTS Volvo Penta's motion as to Counts I and II. The Court also GRANTS Volvo Penta's motion as to Count III to the extent that it seeks to preclude What Hurts from recovering consequential damages. Otherwise, the Court DENIES Volvo Penta's motion as to Count III. Copies of this Opinion and Order sent as DIRECTED on 1.5.24. Signed by Chief District Judge Mark S. Davis and filed on 1/5/24. (epri, )

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WHAT HURTS, LLC v. Volvo Penta of the Americas, LLC UNITED Doc. 77 STATES DISTRICT EASTERN DISTRICT COURT OF VIRGINIA Norfolk Division WHAT HURTS, LLC, Plaintiff, Civil V. VOLVO PENTA OF THE AMERICAS, No. 2:22cv552 LLC, Defendant. OPINION AND This matter is before the Court a Hurts") filed a response in opposition, ECF No. 61, and Volvo Penta ECF No. What On December 5, 62. For hearing on the matter. Plaintiff the reasons the summary Penta"). 53. of for ("Volvo No. Penta motion filed ECF Volvo on judgment filed a reply, by Defendant ORDER Americas, Hurts, 2023, LLC LLC ("What the Court held a stated below, the Court GRANTS in part and DENIES in part Volvo Penta's motion. I. background! Volvo Penta manufactures marine engines for use in boats that are What designed and built by other companies. record owner of a 60-foot motor yacht (the Hurts Vessel"), is the which was designed and manufactured by Midnight Express, a Miami-based boat provider. Express ^ Unless When What in October otherwise of Hurts purchased 2019, stated, these the the Vessel background Vessel had facts been are from used drawn Midnight for from some the undisputed statements of fact in the parties' summary judgment briefing and the parties' factual submissions at the summary judgment hearing. Dockets.Justia.com period of time and was equipped with four engines Engines") These and engines Marine, LLC, Engines came Penta four and lower lower units Original (the units were all with Seven administered as Shortly after Marine's the owner of Seven the better part of Hurts Seven which Volvo What Hurts Marine.^ issues purchased related Penta tried to a by The Original warranty, the to the Vessel, Original What Hurts reported these issues to Volvo Penta, Volvo Units") manufactured limited Original Pre-Release Agreement What discovered performance Hurts, Lower a company wholly owned by Volvo Penta. A, What (the year. remedy the Ultimately, Engines.** and according to engine problems however, the for attempted repairs were unsuccessful. In early 2021, the parties began negotiating a deal whereby What Hurts would release all possible legal claims related to the Original Engines in exchange for replacement Seven Marine engines.^ At some point during the negotiations, however, What Hurts learned ^ The lower units are the part of the boat motor that transfers the power which moves the and rotation from the engine to the propeller shaft, propeller and consequently moves the boat. ^ Volvo Penta was not involved in the sale of the Vessel, and neither Volvo Penta nor Seven Marine were involved in selecting or installing the Original Engines or Original Lower Units on the Vessel. At the hearing on this motion. What Hurts proffered that the Vessel was not getting up on plane and that water was coming over the stern of the boat. ^ These replacement engines were the same type as 2 the Original Engines. about the existence of DPH-brand lower units, ECF No. the performance of the Vessel. representative, Lee representative, Tony Grammas, Kelleher, units as part of the Later, Kelleher after that then might improve 61-1 H 17. spoke about which with including What Volvo Hurts's Penta's DPH-brand lower settlement agreement. speaking Midnight with Express Midnight Express, advised him to Grammas stick with told the original Seven Marine lower units "because they know it works [and] they never use [d] 6; at ECF No. the 61, at [DPH] system. Volvo 3. // 6 ECF Penta No. 54-5/ ECF representative No. 54, Kelleher responded by text: I've got the DPH tell you we have had a lot of success with Obviously before Volvo Penta bought this was not an option but since then DPH [to] drives. Seven Marine is the standard because the hole shot is better [,] fuel efficiency is better[,] and maneuverability is better particularly at low speed. If it was my Boat I would go with a DPH but it's yours it's your choice I'd advise you to reconsider. ECF No. lower 54-5. After this exchange, What Hurts requested the DPH units. B. On General March 11, Release The Release Agreement 2021, and What Hurts's Confidentiality representatives Agreement (the signed a Release") an affidavit provided by What Hurts, Midnight Express they had not ever used the Upgraded DPH Lower Units on a ECF No. 61-1 1 27. vessel they had built before. ® According indicated to that 3 related agreed to the to Original provide Replacement four Engines") Engines."^ refurbished and Upgraded Lower Units") In the Seven Release, Marine four upgraded DPH for $10,000. Volvo EOF No. Penta {the engines lower 35-2, units at (the These 1. engines would be sent to Man O' War in Florida, an authorized Volvo Penta dealer, Man O' War selection for to Volvo Penta agreed to installation. complete the [for the engines]. " 8 application Id. reviews “work with and And importantly, propeller Volvo Penta agreed to provide a limited warranty for the Replacement Engines and Upgraded Lower Units (the “Limited Warranty"): [F]or 12 months or a maximum of 300 hours of operation from the date of commissioning, whichever occurs first. With the exception of the applicable warranty period, the warranty conditions are based upon the original Commissioning must be [engines] warranty statement. completed no later than April 8, 2021; otherwise, the warranty will commence on that date. Id. In exchange. of action, or unknown What Hurts agreed to waive all actions, and claims whether at law or in equity, causes whether known which may have been caused by or relate to the Original Though the Release does not name What Hurts as a party, it names Grammas Loring is and Brent Loring, who are both representatives of What Hurts, also the sole member of What Hurts, ECF No. 35 1-2. The parties agree ECF No. 54, at 7 n.4; ECF No. that the Release is binding on What Hurts. 61, at 4. ® The parties do not define "application reviews," but it appears to refer to the process of assessing the performance of engines on a vessel and recalibrating the configuration of engines (as needed) to achieve proper performance of the engines on a vessel. By contrast, the parties appear to use the phrase "the application" to refer to the use (more generally) of the Replacement Engines with the Upgraded Lower Units on the Vessel. 4 Id. Engines. be Additionally, responsible to What Hurts purchase Replacement Engines, and pay for haul out, and miscellaneous yard fees, etc. [What Hurts] represents the understand[s] sole and shall be Virginia, deemed agreement, to propeller have an been block, [it] sets will for the launching, and agree[s] Id. that the foregoing obligation of The concludes Release acknowledgement entered into in that the the the Released with a Release Commonwealth of and choice of law and forum provisions.^ C. lay days The Release then provides Id. exclusive Parties under this Agreement. confidentiality that as well as all charges related to the removal and replacement of engines, that "agree[d] Id. at 1-2. Post-Release Agreement The Replacement Engines and Upgraded Lower Units were sent to Man O' War, but shortly after installation, the parties agree that the Replacement Engines and Upgraded Lower Units were not working together on the Vessel as expected. configuration of According to What Hurts, the Replacement Engines with the Upgraded Lower Units was plagued by persistent water pressure issues. No. 61 94, the 103, See ECF 110-14. [a]11 questions concerning the ^ The choice of law provision states that validity, interpretation or performance of any of [the Release's] terms or provisions, or of any rights or obligations of the parties hereto, shall be governed by and resolved in accordance with the laws of the Commonwealth of ECF No. 35-2, at 1-2. The choice of forum provision provides Virginia. that "the sole jurisdiction and venue for any litigation arising from or in any way relating to this Agreement . . . will be in an appropriate federal or state court located in Norfolk, Virginia. 5 Id. at 2. After several months of what adjustments. Hurts decided to remove the Upgraded Lower Units and reinstall the Original Lower Units. Lower According to What Hurts, Units were reinstalled on it was the only after the Original Vessel that it learned Volvo Penta was discontinuing the Seven Marine brand. purportedly "never Seven Marine On had November known 29, that 2021, the equipped with the Replacement fact. Vessel EOF No. was By June of 2022, 61 H 81. taken on a sea trial Engines and Original Lower Units. Volvo Penta considered the sea trial a success, not. Hurts agreed to Replacement Engines from [would have] it What that several months but What Hurts did after the sea trial, What Hurts removed and sold the Replacement Engines and Original Lower Units and replaced them with Mercury brand marine engines. suit This followed. D. Procedural Background On July 27, 2022, What Hurts filed its Complaint in the United States No. 1. U.S.C. ECF No. District Court for the Southern District of Florida. ECF The suit was then transferred to this Court pursuant to 28 § 1404(a) 13 and the forum-selection (citing ECF Nos. 1-2). Once Volvo Penta filed a motion to dismiss, 10 clause the in case was ECF No. 18, the Release. transferred. and What Hurts See ECF No. This work appears to have been completed by Man O' War. 54-9 (showing emails between Volvo Penta and Man O' War regarding What Hurts's decision to reinstall the Original Lower Units); see also ECF No. 54 t 32; ECF No. 61 t 32. 6 thereafter filed an amended complaint, Penta filed an answer, What relief: Hurts's ECF No. Amended Actual Fraud Complaint (Count I); Hurts damages, On October brief three on three (Count III) . prejudgment ECF interest. fees as well as punitive damages. attorneys' all states claims. October November 10, 2023, 11, ECF 31, 2023. 2023, Volvo 61, 62. Penta judgment motion is fully briefed, argued, II, Rule 56(a) of the What costs, and 11. summary judgment LEGAL filed a reply on A summary judgment hearing Accordingly, 2023. at 35. What Hurts filed an opposition 53. and ECF Nos. was held on December 5, Id. of (Count II); No. all Volvo Penta moved for No. theories Fraudulent Concealment Express Warranty on 35, 38. and Breach of seeks to which Volvo ECF No. Volvo Penta's summary and ripe for review. STANDARD Federal Rules of Civil Procedure provides that a district court shall grant a motion for summary judgment if the shows movant that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law. alleged Fed. // factual otherwise R. Civ. P. 56(a) . dispute between properly supported The the motion "mere parties for existence will summary not of some defeat judgment; an the requirement is that there be no genuine issue of material fact. Anderson v. genuine Liberty Lobby Inc., question of material 477 U.S. fact 7 exists 242, 247-48 where. (1986). after n A reviewing the record finder] as a whole, The party, court finds that a reasonable could return a verdict for the nonmoving party. Packaging Corp. V . a of Am., 673 initial burden on but once a summary judgment, F.3d 323, summary movant 330 Dulaney (4th Cir. judgment falls properly presents 2012). on the moving evidence the nonmoving party may not [fact supporting rest upon the mere allegations of the pleadings, but instead must set forth specific facts and sworn in the form of exhibits genuine issue for trial. 322-24 To (1986) . judgment, Celotex Corp. successfully statements v. defeat the nonmoving party must illustrating a Catrett, a 477 U.S. motion rely on more for 317, summary than conclusory allegations mere speculation," or the “existence of a scintilla of Tap of Sc evidence. Materials, (citations the F. Court Supp. is determinations is required to Tolan V. trial. Anderson, Integration, 2d Inc, 668, v. Analytical 671 (E.D. Servs. Va. 2004) omitted). credibility for 330 Inc., Although Court Sys. 477 U.S. at at not the to weigh summary evidence judgment or phase. determine whether there is a genuine Cotton, 572 U.S. 650, When assessing 249). 656 (2014) whether make the issue (quoting there is a genuine issue for trial, the Court must determine whether there is sufficient disagreement to require submission to a [fact finder] or whether prevail [the evidence] as a matter of law. is so one-sided McAirlaids, 8 that Inc, v. one party must Kimberly-Clark Corp., U.S. 756 at F.3d 307, 310 (4th Cir. 2014) (quoting Anderson, In making its determination. 251-52). the district 477 court must view the evidence in the light most favorable to the nonmoving Jacobs V. party. (4th Cir. 2015) N.C. Admin. Off, of must F.3d 562, 568 DISCUSSION Before addressing Volvo Penta's Court 780 (cleaned up). III. the the Cts., consider two this Court's jurisdiction; substantive law apply. summary threshold and Then, (2) judgment arguments. (1) issues: the source of which choice-of-law rules and the Court will consider the parties' summary judgment arguments as they relate to each of What Hurts's claims. A. Though jurisdiction, neither Jurisdiction party has challenged 500, 514 (2006) . but in admiralty. it What Hurts is not Arbaugh v. Y & H Corp., filed its Amended Complaint readily apparent that every claim falls within this Court's original admiralty jurisdiction. summary judgment hearing, is a "maritime contract" jurisdiction claim. Court's the Court has an "independent obligation" to ensure that subject matter jurisdiction exists. 546 U.S. this in admiralty the parties proffered that which provides over the the breach Court of At the the Release with original express warranty The parties agreed that the Court lacks original admiralty jurisdiction over the two fraud claims but asserted that the Court 9 has original over both diversity jurisdiction or supplemental The Court claims. largely agrees with jurisdiction the parties and finds that it has original admiralty jurisdiction over the breach of express warranty claim and supplemental jurisdiction over the fraud claims. Federal courts have original and exclusive jurisdiction [a] ny civil U.S.C. § case of 1333(1); admiralty see U.S. judicial power shall extend maritime courts' matter or maritime Const, to . art. . . Contract Jurisdiction"). jurisdiction. Ill, all § 2, cl. over // 1 28 ("The Cases of admiralty and disputes fall within federal original admiralty jurisdiction if the nature or subject of the contract is maritime. But the boundary between maritime and nonmaritime contracts has long been difficult to draw. Norfolk S. Barna Ry. Co. Conshipping, Abandoned Steel, Contracts vessel which, commerce v. for repair, See Fruit Beaver Enters, 2,000 Co., v. N. Pac. S. U.S. Humphreys 14, Metric 722 was S. Co. 119, Rys., Tons, (4th Cir. or are v. 127-28 731, 23-24 (2004); More Less, of 2011). reconstruction 735-36 Inc., Hall considered Bros. (1918); of a (1961); 719 maritime Marine Ry. & accord Kossick v. F.2d (applying admiralty law to a contract 10 or accord actively engaged in maritime generally 249 U.S. 365 U.S. alteration, such work, navigation, United 543 410 F. App'x 716, Shipbuilding Co., 1983) Kirby, S.L. before or contracts. Cir. v. see also Little 75, 77-78 (4th to replace the steering system of a vessel); Southworth Mach, v. F/V Corey Pride, 994 that F.2d 37, 40 n.3 (1st Cir. 1993) {finding a contract involving the sale and installation of a used engine on a vessel is a maritime or contracts are not vessel at Kossick, 127-29 does contracts to build a ship. involving work performed on a non-maritime maritime. 249 U.S. By contrast, contract). not 365 U.S. at 735; object. see also Hall Bros., (explaining that maritime jurisdiction begin until the vessel has been Any uncertainties launched on navigable waters). over completed that arise a and in distinguishing between repairs on a vessel already in navigation (maritime) and new vessel construction (non-maritime) in favor of admiralty jurisdiction. Purdy, 258 U.S. 96, 99-100 are resolved New Bedford Dry Dock Co. v. (1922). At the summary judgment hearing, the parties confirmed that the Vessel was fully constructed and had been launched in navigable Having been actively waters before What Hurts signed the Release. engaged in maritime navigation, the Vessel was, for purposes of this Court's admiralty jurisdiction, a "vessel" before the Release was executed. See Hall Bros. , 249 U.S. Release involves a waiver of liability, for the modification of considered No. a maritime 2:17cvl09, (contract to 2022 replace a WL See, 4542251, engines at of 11 127-29. Though the it is ultimately a contract and therefore, "vessel. contract. at e.g., *4 vessel it is properly Glover v. (E.D. Va. Hryniewich, 28, Sep. constitutes a 2022) maritime contract); § 3-10 accord 1 Thomas J. (6th ed. However, 2018) the Shoenbaum, Admiralty & Maritime Law (hereinafter "Shoenbaum"). inquiry does not end there as this is not a simple breach of contract action, but rather, an action for breach of an express warranty (Count III) . do a not fall jurisdiction within because contracts, such River S.S. Corp. n.7 (1986) as v. (noting federal they are contracts Ordinarily, court's often for the breach of original grounded sale Transamerica Delaval, that warranty claims of a Inc., warranty admiralty in nonmaritime vessel. 476 U.S. claims See 858, grounded E. 872 in construction or materials contracts are not within federal courts' original admiralty In jurisdiction). this case, however, the parties agreed in the Release to create a new limited warranty as part of their agreement to alter the Vessel's engines. No. 35-2; see also ECF No. Limited Warranty was contract claim (the jurisdiction. V. GE Oil created by Release), properly falls 54 H 24; ECF No. Count within See 1 Shoenbaum & Gas, Inc., 896 F. and is Ill's this Supp. grounded breach Court's § 3-11; of in ECF Because the a maritime express original warranty admiralty see also Berge Helene Ltd. 2d 582, ("Disputes over warranties arising from 61 H 83. See 595 (S.D. [maritime] Tex. 2012) contracts also fall within maritime jurisdiction"). As to the fraud claims, that neither the actual the parties agree, as does this Court, fraud nor the 12 fraudulent concealment claims fall within this Court's original admiralty jurisdiction. put, occurred on navigable waters or neither claim by a vessel on navigable water, within this Court's original B, Inc, Grubart, 534 (1995) v. Great (setting Lakes forth 31 F.4th 178, neither tort Dredge the & test Dock the for Court the fraud claims, original (4th Cir. original 2022) amount the amount over in such [A] (4th Cir. admiralty the Court need not claims. controversy must not presented limited liability company Gen. Tech. Applications, 2004); over 28 For exceed U.S.C. § accord diversity $75,000 and 1332(a). In Plaintiff seeks damages exceeding $500,000, in controversy requirement Penta has members. 527, (if one criterion sufficient is satisfied. facts for determine whether the parties are completely diverse. 11 U.S. both parties assert that the Court has original the Amended Complaint, Volvo Jerome admiralty jurisdiction the parties must be completely diverse. the fall see also Mayor & City Council v. 227 n.l9 lacks jurisdiction jurisdiction, so can See 513 caused other criteria). Though the diversity claim Co., for original admiralty jurisdiction is absent, assess [was] admiralty jurisdiction. jurisdiction over tort claims); BP P.L.C. , so tt Simply Travellers the However, Court 11 is assigned the citizenship of Inc, v. Exro Ltda, 388 F.3d 114, Indem. Co. of Am. v. to its 120 Portal Healthcare Sols., L.L.C., 644 F. App'x 245, 246 (4th Cir. 2016). Though the Amended Complaint posits that all of Volvo Penta's members are Delaware or Virginia citizens, there is no evidence in the summary judgment record upon which the Court can determine the citizenship of Volvo Penta's members. See generally ECF No. 35. 13 Regardless, under 28 U.S.C. § 1367(a), the Court generally may exercise supplemental jurisdiction over any claims that so to original related claims in the action within such are jurisdiction that they form part of the same case or controversy under § Article III of the States Constitution. 28 It U.S.C. Based on the allegations in the Amended Complaint, 1367(a). well as the parties' arise out of as statements in their summary judgment briefing and at oral argument, claims United the Court concludes that What Hurts's the same execution of events the fraud Release and subsequent issues with the Replacement Engines and Upgraded Lower Units - as What Hurts's breach of express warranty claim. What the Hurts's Court Hurts's 725 claims finds share that fraud claims. a it has \\ common nucleus supplemental of Because operative fact, u jurisdiction over What United Mine Workers v. Gibbs, 388 U.S. 715, (1966) . B. Because admiralty. the federal Court Choice has maritime of Law subject matter choice-of-law jurisdiction principles in apply in determining whether to apply federal or state substantive law to the breach of express warranty claim. Lila Shanghai, 39 F.4th 263, 270 Sing Fuels Pte ltd, (4th Cir. 2022). in admiralty will enforce that clause unless compelling public policy reason for not doing so. 14 M/V When parties have included a choice of law provision in their contract, sitting v. courts there Triton is a Marine Fuels Ltd., S.A. V, M/V Pac. Chukotka, 575 F.3d 409, 413 (4th Cir. 2009) . In this case, the parties agreed questions concerning the validity, of the shall Release be in the that all interpretation, and performance governed by and resolved with the laws of the Commonwealth of Virginia. 2 . Release in accordance ECF No. n 35-2, at As both parties agree that this choice-of-law provision should and apply, nothing compelling public in the record policy reason to indicates warrant that there is non-enforcement, a the Court will apply Virginia substantive law to the breach of express warranty claim. to As the fraud a claims. court exercising supplemental jurisdiction over state law claims applies the choice of law rules of the forum (5th Cir. Supp. 2003); 3d 550, case pursuant case, the transferor the Court see also Berlin v. 564 (E.D.N.Y. to 28 U.S.C. court. applies Florida See Florida applies significant relationship Specialty WRS Grp., 73 F. App'x 2, Jetblue Airways Corp., 2020). § Inc., 436 3 F. But when a party transfers a 1404(a), as Volvo Penta has in this transferee court must apply the choice-of-law rules of the claims, See Snow v. state. Paint Co., applying this test, Ferens 389 John Deere Co. Accordingly, choice-of-law principles. the u v. to law the So.2d of the state occurrence. 999, 1000-01 the Court should consider: 15 with Bishop (Fla. As to the V. tort most Florida 1980). In (a) the place where the injury occurred; (b) the place where the conduct causing the injury occurred; (c) the domicile, residence, nationality, place of incorporation and place of business of the parties; (d) and the place where the relationship, if any, between the parties is centered. Grupo Televisa, 1233, 1240 S.A. (11th v. Telemundo Cir. 2007) Commc'n (quoting Grp,, Inc., Restatement In cases involving fraud, of important does play Restatement purposes. What Here, the not Release Hurts had so (Second) known that contractual of Laws Volvo These relationship, for § claims which, by "the place 145, cmt. have Penta's arise its 1; see 90-30138-LAC, also Merriman v. 1993 signed alleged out of terms Virginia and included a Virginia choice of law provision. at f. the was given that the Release was entered into in centered in Virginia, 35-2, of choice-of-law it would not about misrepresentations and omissions. parties' role Conflict is alleging it a F.3d (Second) Conflicts of Laws § 145(2)) . injury 485 WL 989418, Convergent Bus. at *9 (N.D. Fla. ECF Sys., Inc., June 23, No. No. 1993) (applying Florida's substantial relationship test and concluding that the location where the contract was centered had substantial relationship to Plaintiff's fraud claims). is an Ohio LLC, but Volvo Penta's members are the What unknown, most Hurts so the location of the parties does not point more strongly to a location other than Virginia. parties' agreement, ECF No. the Court 35 tH finds 16 1-2. Ultimately, that Virginia has with the the most substantial relationship to What Hurts's fraud claims, Court will apply Virginia substantive law to such claims. C. Counts I and II: Actual Fraud and Fraudulent With jurisdiction and choice of law settled, to the merits Virginia of Supreme easily made . 105 Va. Rogers, law, Volvo Penta's Court . ultimately (4) misled, and 321 (2005) charge a the 53 S.E. theory 6, of 7 (1906) . fraud, the (6) (2) with of a material fact, intent motion. As the of is one fraud Redwood Co. V. plaintiff (1) (quoting Prospect 85, 515 S.E. 2d 291, Va. 324, 327-29, 297 441 270 Dev. (1999)); S.E.2d (5) false reliance by the party Va. 209, Co. v. 218, State Bershader, 209-10 (1994) Farm S.E.2d 316, 618 258 see also Van Deusen v. 207, a must (3) made intentionally and to mislead, Remley, v. Under Virginia resulting damage to the party misled. Ins. 12 the Court turns "prove by clear and convincing evidence: knowingly, Auto. observed, the Concealment [fjraud cannot be presumed. 158, of representation, Mut. [but] 155, regardless has summary judgment and Va. 75, Snead, 24 7 (discussing the same elements with respect to fraudulent concealment). 12 If the Court later determines that it has original diversity jurisdiction What Hurts's fraud claims, this choice of law analysis will be over unchanged, as a federal choice-of-law rules U.S. U.S. of court the sitting forum 64, 78 (1938); see also 487, 496 (1941). state. Klaxon Co. 17 in diversity v. likewise Co. v. Stentor Electric See Erie R. applies Tompkins, Mfg. Co., the 304 313 1. In Count I, fraudulent Count representations clearly briefing, Actual Fraud What Hurts alleges that Volvo Penta made multiple product with no cash. not I: \\ in an ECF No. identify the effort 61, at fraudulent to induce the swap of Though What Hurts did 23. statements at the summary judgment hearing, at issue in its What Hurts identified three alleged misstatements as the basis of its actual fraud claim. These include: (1) Kelleher's statement that he would application review to ensure the an work on separate [the that occasions ECF 61-1 111 22, No. (3) 25, [Upgraded Lower Units] Kelleher's the and particular Vessel [;] See (2) Vessel] [; ] oral application^^ Kelleher's 29; arrange for ECF No. confirmation would text 61, work on two with our on March 2, at would 2021.^^ 23.^5 Volvo Penta argues that none of the identified statements statements of material fact. But even if some of the are statements are statements of material fact, Volvo Penta argues that What Hurts Consistent with the parties' wording, the Court uses "the application" to refer to the use of the Replacement Engines with the Upgraded Lower Units 13 on 14 the Vessel. Kelleher's March 2, had a lot of success 2021, with text stated: the DPH drives "I've . . . got [to] the hole tell you we shot is better have fuel efficiency is better and maneuverability is better particularly at low speed. If it was my Boat I would go with a DPH but it's yours it's your ECF No. 54-5. choice I'd advise you to reconsider. Though all of the statements at issue were made by Kelleher, neither party contends that any of these statements cannot be properly attributed to Volvo 15 See Jefferson Standard Life Ins. Co. v. Hendrick, 181 Va. 824, 833, 27 S.E.2d 198, 201 (1943) (statements made by an individual as agent and of his employer were actionable against the agent's representative employer). Penta. 18 has identified Penta no knowingly material evidence and demonstrating made a false that Volvo statement of The Court considers each argument in turn. fact. Statement Under Virginia law, a pre-existing 471, of intentionally a. 463, capable fact. 552 Accordingly, Material fraud claims McMillion // S.E.2d an of 364, action V. 368 based \\ Fact must relate to a present or Dryvit Sys., (citations (2001) on Inc., fraud ordinarily 262 Va. omitted). cannot be predicated on statements about future events, or the expression of an Sales opinion. 690 S.E.2d 91, and positive 94 the 293, 467 S.E.2d Co., 109 Va. because, 196, reliance on not 454, action in 343, (1996) 63 w 279 Va. 475, 481, a Servs., (quoting S.E. 423, [person] statements is Inc., Saxby v. of 251 present Va. 289, Southern Land 424 (1909)). This not justified in is placing Id. its S.E.2d a representation, character. 162, 164 // and a failure to perform Patrick (1988). v. Were Summers, the 235 general Va. rule every breach of contract could be made the basis of tort 347, so a mere promise to perform an act in the future is change 369 otherwise, Va. w in a legal sense, does 452, 781 put. Co., are not tr Eng'g [such statements]. Relatedly, it Consultant 198, Housing Expressions of opinion "however strong language may be 778, simply Kecoughtan (2010). Montarino v. fact. not, V. for fraud. H Blair Const., 485 S.E.2d 137, 139 19 (1997) Inc, v. Weatherford, (quoting Lloyd v. an 253 Smith, 150 Va. makes 132, a that, 363, when Supervalu, fact. 368 There 365 (1928)). made, they But have if no a defendant intention of Inc, v. Johnson, 276 Va. 356, 368, 666 (2008) . is bright no representations line constitute Montarino, // S.E. then that promise is considered a misrepresentation of S.E.2d 335, fact. 142 promise performing, present 145, 251 Va. test to ascertain matters of opinion at 467 S.E.2d 293, whether or false statements at 781. of Instead, courts determine whether a representation is a statement of fact taking into consideration the nature of on a case-by-case basis. the representation and the meaning of the language used as applied to the subject circumstances. (quoting matter and Sales, // 279 Packard Norfolk, S.E.2d 207, 211 Measured Kelleher's as interpreted Va. Inc, v. at by 481, the 690 Miller, surrounding S.E.2d 198 Va. at 557, 94-95 562, 95 (1956)) . against statement this that framework, he would the arrange Court for finds an that application review to ensure that the Upgraded Lower Units would work on the Vessel is statement not is an actionable a statement of statement of material future performance. fact. This and accordingly. it is not actionable as fraud unless What Hurts identifies evidence in the record capable of demonstrating statement with no intention of 276 Va. at 368, 666 S.E.2d at that Kelleher made following through. 342. 20 But What Hurts this See Supervalu, has identified evidence (nor made Ford Truck Sales, Inc, v. 91, In no such 94 (1985) . any such Schneider, fact, the allegation) . 228 record Va. is 671, See 677, devoid of Colonial 325 S.E.2d direct or circumstantial evidence suggesting that Kelleher did not intend to follow through on this promise at the time when it was allegedly See Richmond Metro. made. Va. 553, 559-60, Auth. v. 507 S.E.2d 344, Space Adventures Ltd. , McDevitt 348 St. (1998); Bovis, Inc., 256 see also Enomoto v. 624 F. Supp. 2d 443, 454-55 (E.D. Va. 2009) . Accordingly, the Court finds that this statement is not actionable as fraud. Similarly, which said W the portion of Kelleher's text on March 2, [i] f it was my Boat I would go with a DPH, statement of opinion which cannot be actionable as fraud. 54-5; see also Saxby, 109 at Va. 198, 63 S.E. at 2021, 424 IS ECF ("The a No. mere expression of an opinion, however strong and positive the language may be, is no fraud."). What Hurts does not appear to offer any specific argument that this portion of Kelleher's text is a fact rather than an opinion, Kelleher's text b. Having statements Court is not actionable as fraud. Knowing and Intentional Misstatement concluded are and the Court finds that this portion of not that some actionable considers whether What of What statements Hurts has of Hurts's material identified fact, the sufficiently alleged that the remaining statements - portions of Kelleher's text on March 2, 21 2021, and Kelleher's confirmation (twice) that the application would work on the Vessel - were knowingly and intentionally made. What Hurts contends misstatements of because Volvo Penta W Penta made did not want to pay cash to ECF No. swap. 61-1 H 13; these alleged them to be false [What Hurts] see ECF No. and 61, at What Hurts alleges that Volvo Penta was under Additionally, significant Volvo fact knowing and intending for desired a product 24 . that financial pressure to settle, given What Hurts's proffer that it would be entitled to over $600,000 in money damages These assertions, related to the issues with the Original Engines. combined with statements. reasonable intentional fact the are fact that sufficient, finder false // to Penta according to known made What Hurts, infer that Volvo Penta made statements. Volvo Penta, Volvo 16 by contrast, See ECF No. 61, at false for a knowing and 24. asserts that even after extensive discovery. What Hurts has failed to introduce sufficient proof to allow a reasonable fact finder to reasonably conclude by clear and convincing evidence that Volvo Penta made any statement knowing and intending for it to be false. Starting with finds that Volvo Kelleher's Penta has text carried The Court agrees. on March its burden 2, 2021, the to demonstrate Court that no reasonable jury could find that Kelleher's text contains knowing Though a little unclear. What Hurts appears to argue that because Volvo Penta allegedly made false statements, it is inferable without additional proof that it did so knowingly and intentionally. 16 22 and intentional Grammas . . that DPH false Volvo is the had a lot Penta standard because efficiency is better [,] a of introduced an Kelleher success with the hole shot the DPH had used indicating specifically, the same the model that a variety of other vessels see ECF No. What Hurts 54, of that, context Grammas the interpreted specifically to his 61-1 tt 29-30. with introduced no Instead, What Seven fuel ECF No. on engines numerous success. text What has the occasions of evidence his model of relies prior Kelleher's to dispute No. on Grammas's conversations text on March Midnight these on 54-1 2, factual affidavit with Kelleher, 2021, Express vessel. to refer ECF No. into an that understanding does not transform actionable introduced no fraudulent credible statement. evidence that Knowledge Connections, Accordingly, Inc., What 266 Va. Hurts 23 362, has 368, failed Indeed, Kelleher made the statement knowing and intending for it to be false. (2003) . Volvo with ECF n is Though Grammas understood Kelleher's text to refer Kelleher's Hurts \\ information specified that Marine great Hurts specifically to the Vessel, 582 drives at 21. assertions. in this affidavit same model of DPH upgraded lower units V. told is better[,] and maneuverability is better. affidavit More correct. H 23; reminder, In support of its motion for summary judgment, Volvo Penta 54-5 . Penta As statements. 585 to See S.E.2d Cohn 578, demonstrate that Kelleher's elements As text on for actual to Kelleher's March 2, 2021, fact has failed finder to the requisite fraud. repeated verbal to identify conclude that confirmation the application would work on the Vessel, Hurts satisfies sufficient Court facts Kelleher had that finds for that What reasonable a fraudulent the knowledge or What Hurts's brief does not advance any specific arguments intent. concerning Kelleher's knowledge or intent so statements, the Court considers with respect What Hurts's to these generalized arguments concerning knowledge and intent to address whether these background facts could create an inference sufficient to support What Hurts's financial pressure Original Engines; rather These theory. than a (2) cash which statements, to include: settle What conclusory pressure payment; indicates ECF No. Serv., for settle 61, at Inc., statements Hurts has assertions to 677 F. are fraud.") 24; any see Supp, fact, and that Penta claims was related under to Volvo ECF No. Penta made the statements 61, at false were Volvo Noell related Crane 2d 852, to Penta 872 to Sys. was the GmbH (E.D. Va. establish the Volvo Penta points 24 made 24. introduced no evidence beyond its claims as (3) Kelleher's See that insufficient In potential Volvo Volvo Penta wanted to provide a product swap intentionally and knowingly. First, (1) own under financial Original Engines. v. Noell 2009) ("Conclusory elements out, Crane & the necessary original limited warranty restricted Volvo Penta's obligation to repair or replacement of the Though defect. Original this Engines fact in appears the to event of contradict a product What Hurts's general allegation of financial pressure. What Hurts does not make any effort to undercut the See EOF No. limitation. while Second, 35-1, there effect at 1, appears of 4; to this EOF No. be original 62, some at remedy 7. support for What Hurts's assertion that Volvo Penta preferred a product swap, cannot infer reasonably from a mere knowingly and intentionally made Hurts to sign otherwise the appears the that Volvo false statements Indeed, Release. that preference original as 62, more, at are Finally, 7. referenced insufficient proof See Cyberlock Consulting, 2d 672, 681 (E.D. Va. of Inc, v. false knowledge Info. before, it warranty restricted limited allegations of Penta to induce What What Hurts to repair or replacement of the engines. No. one See also ECF statements, without fraudulent intent. or Experts, Inc., 876 F. Supp. 2012) . At the hearing on this motion, What Hurts encouraged the Court to consider conducted the as absence clear and of proof convincing that application evidence that reviews were Kelleher made knowing and intentional misstatements regarding the application of the Replacement Engines However, given the finding each and Upgraded Lower Units on the Vessel. clear and convincing evidentiary standard for element of actual 25 fraud, even considered in combination with What knowledge and Hurts's other the intent, factual Court assertions concludes that regarding one cannot reasonably infer fraudulent knowledge or intent from the ultimate failure to conduct application reviews. Accordingly, because What Hurts has not identified admissible clear and convincing" evidentiary evidence capable of meeting the standard of proof Penta made genuine required to support knowing dispute of and intentional material fact its allegation that Volvo there misstatements. as to whether What Volvo sufficiently alleged its actual fraud claim. is Hurts no has Penta's motion for summary judgment on this claim is therefore GRANTED. 2, Count II: Fraudulent Concealment In Count II, What Hurts alleges that Volvo Penta fraudulently concealed two discontinued; application Units at of (1) facts: (2) and the that that the Volvo Replacement on the Vessel Seven Marine Penta Engines brand had with not the would tested Upgraded or any Midnight Express vessel. be the Lower ECF No. 61, 26-27. Under Virginia law, [c]oncealment of a material fact by one who knows that the other party is acting upon the assumption that the fact does Montreal v. not Signet Bank, Allen Realty Corp. 597 exist {1984)). v. constitutes 193 F.3d 818, Holbert, However, silence 227 827 Va. does 26 actionable {4th Cir. 441, not fraud. 450, // 1999) Bank of (quoting 318 S.E.2d 592, constitute concealment unless there is a duty to disclose, Id. at A duty to disclose 829. ordinarily does not arise when the parties are engaged in an arms But a duty may arise: length transaction. (1) if the fact is material and the one concealing has superior knowledge and knows the other is acting upon the assumption that the fact does not exist; or (2) if one party takes actions which divert the other party from making prudent investigations {e.g., by making a partial disclosure) .... Obviously, the concealment itself cannot constitute one of these diversionary actions — then there would always be a duty to disclose. Id. (citations there is a parties, confidential or information misleading. S.E.2d A duty omitted). if 573, Doe 590 fiduciary would disclosure already // or to disclose may also arise rel. (2021) Doe be v. Baker, (citations between necessary which disclosed, ex relationship would 299 628, If be 656, a 857 plaintiff successfully shows that the defendant had a duty to disclose, the plaintiff still must show reckless non-disclosure F. 2d 631, Supp. 642 Hurts concealment when Closure contends it that failed to Potocksa, of 589 Seven Marine Volvo Penta disclose the to engaged What that 27 Replacement in Hurts fraudulent that and Original Lower Units, would be discontinued. What Hurts claims // 2008). Engines, 26. on V. the at name White Marine, 61, brand Va. then actual intent to conceal a fact [;] insufficient. (E.D. a. What is u the clarify otherwise Va. omitted). to if Engines, Seven Original EOF No. it never would have agreed to settle for Replacement Engines had it known that the brand would be discontinued. Volvo Id. Penta at 27. argues information because it that there is no had no duty evidence that to disclose it knew that this What Hurts was acting upon the assumption that the Seven Marine brand would there ECF No. continue. is no evidence 62, to at Moreover, 8. suggest that it Volvo Penta argues. deliberately withheld information or took steps to prevent What Hurts from asking about or discovering the relevant information. Considering the duty to disclose that the status what Hurts has of not Seven Marine's introduced ECF No. issue future evidence 54, first, was a u at even 22-23. assuming material on which a fact, reasonable n fact finder could rely to find that Volvo Penta had a duty to disclose this Indeed, information. What Hurts has introduced no evidence acting under to suggest that Volvo Penta knew that What Hurts was the assumption // that thus Volvo Penta has Seven Marine would continue to exist. carried its burden and is entitled to and summary judgment on this issue. But even information. if Volvo Penta had a duty to disclose this summary judgment would still be proper because What Hurts has not identified any evidence beyond mere speculation that Volvo Penta disclose" 240, made this \\ a knowing information. 495 S.E.2d 809, 812 and a deliberate See Norris (1998). v. decision Mitchell, not 255 Va. to 235, Nor are there any allegations in 28 the Amended Complaint that Volvo Penta steps 1019 (E.D. Va. summary parties' to conceal See NorthStar Aviation, Marine brand. 3d 1007, took or the closure LLC v. Alberto, In fact, 2018) . the and cessation Accordingly, of Volvo Penta the Seven 332 F. Supp. See ECF 54-3, at 2 of production of Seven Marine engines u sales of briefing the closure had previously been publicly announced several months prior. {announcing the "phasing out judgment and has marketing carried its November in burden to 2020). demonstrate that it is entitled to summary judgment on Count II as it relates to the closure b. of Seven Marine. Failure to Test Replacement Engines with Upgraded Lower Units What Hurts next (1) that contends that Volvo Penta failed to disclose: it had never tested the application of the Replacement Engines with the Upgraded Lower Units on the Vessel or any other Midnight Express vessel; with the original and (2) that Plaintiff would be stuck configuration that already plagued the Vessel // if the Replacement Engines and Upgraded Lower Units did not work well together. ECF No. 61, By way of response, duty to disclose this at 2 6.^'^ Volvo Penta again argues that it had no information. ECF No. 62, at 9. For the same reasons discussed at length above with respect to the closure n The Court observes that these factual assertions are the full extent of What Hurts's argument that it satisfies the elements for fraudulent concealment as to this category of information. See ECF No. 61, at 25-26. 29 of Seven Marine, Volvo Penta has demonstrated there that is insufficient record evidence for What Hurts to establish that Volvo Penta knew that What Hurts acting upon the assumption was the engine application had been tested on the Vessel, would have alternative See unsuccessful. options Bank of if that or that it application the 193 Montreal, tt F.3d at was Nor 827. is there any evidence in the record beyond mere speculation that Volvo Penta made this a knowing and a deliberate decision not to disclose See Norris, information. 255 Va. at 240, 495 S.E.2d at tf 812. Without any evidence to support What Hurts's contention that Volvo Penta had a duty that Volvo Penta the information, burden and is to disclose a knowing made Court concludes entitled to this information. decision to withhold that Volvo Penta has summary judgment as let alone this carried its a matter of law. The Court therefore GRANTS Volvo Penta's summary judgment motion as to Count II. D. In Count Count III: III, What Breach of Hurts Express Warranty alleges that Volvo Penta breached several of the written express warranties contained in the Limited Warranty. ECF No. 61, at warranties, Volvo Penta promised: and Upgraded Lower Units would be 18 Nor, within for that matter, the Volvo Penta Under 27-28. (1) W the challenged written that the Replacement Engines free from defects in material has What Hurts demonstrated that alternative options line did not exist. 30 and (2) workmanship that it for Kelleher to ECF No. warranties No. these made a 61-1 M 25, 35-1, of time at 1; stated What ECF No. herein;" such 35 HH 60-68. that 61, and replac[e] Hurts representations law. [or] see ECF No. promises, oral matter of a defective part written several as period repair[] would part or parts. addition the at that alleges became 27; see In express also ECF 29. Volvo Penta argues that it is entitled to summary judgment Count III under for the three Limited obligations (1) reasons: Warranty related to What Hurts's claim does not because the Penta compatibility Engines and Upgraded Lower Units; . 19 adequate notice Volvo or an opportunity (2) to of on arise had no the Replacement warranty What Hurts did not provide cure any alleged breach of warranty; and (3) What Hurts is barred from recovering any damages. Under Virginia a law, plaintiff seeking breach of warranty must ultimately prove: warranty; Corp. V. and Signet Collier v. 19 Initially, become (2) Rice, Volvo effective (1) a breach of that warranty. Bank, 166 233 Va. Penta until F.3d 522, also after the 614, 524-25, argued 624 to the recover that the sea a of a existence Hitatchi (4th Cir. 356 S.E.2d 845, successful for Credit Am. 1999) (citing 847 (1987)). Limited Warranty did trial in November of not 2021. ECF No. 62, at 11. However, at the summary judgment hearing, Volvo Penta conceded, at least for the purpose of summary judgment, that the Limited Warranty began to run on April 8, 2021. See ECF No. 61-2 (highlighting the provision in the Limited Warranty stating that it would begin to run no later than April 8, 2021). 31 Here, assessing the existence of a warranty begins with an analysis of the Release. Because title over price of the Release predominantly concerns certain engines the $10,000, may be the 8.2-105, 106. parties agree that this seller to Under the Virginia UCC, [a] ny affirmation of created by the transfer from Volvo Penta to What Hurts governed by the Virginia Uniform Commercial Code Code §§ the buyer which relates part of the basis of the bargain. Va. is Va. or promise made the Code See a an express warranty fact to for transaction ( "UCC") . of goods § and by becomes 8.2-313(1). This broad language is subject to the limitations set forth in Virginia Code § 8.2-202, In governing the admissibility of parol evidence. light of the parties' dispute over whether certain oral statements allegedly made by Kelleher created an express warranty, the Court will first address whether the parol evidence rule prohibits What Hurts from introducing evidence of oral warranties. In doing so, the Court will determine whether What Hurts's complaints conceivably fall within the scope of what Volvo Penta warranted. Then, the Court will consider Volvo Penta's arguments regarding proper notice and damages. 1. Volvo Penta's Warranty Obligations a. Parol Evidence Section 8.2-202 of the Virginia Code provides that a document intended by the parties as a final expression of their agreement 32 may not be Va. Code § agreement \\ is prohibited, additional also by evidence Though 8.2-202. consistent parties contradicted the terms intended agreement can findings have what extent be of a unless the Court document Id. § to be being written evidence finds 8.2-202(b). without agreement. final introduce legal significance evidence of can the final" prior parties expression of their agreement. an any contradiction u for of that the of the complete Stated simply, "complete. and both for determining whether and to additional terms can be introduced. For example, when an agreement is "final" and "complete" neither party can introduce parol evidence of additional terms. But if the agreement is "final" but not "complete" because some terms remain unwritten. then either party can introduce evidence of additional consistent terms. See id. § 8.2-202. Turning first to finality, is intended to be Anderson on (hereinafter case, the a "final" legally binding. Uniform Commercial See Code agreement is one which David Frisch, § 2-202.37 Lawrence's (3d ed. Anderson on the Uniform Commercial Code"). 2022) In this the parties appear to agree that the Release is the legally binding agreement between the parties. See ECF No. 61, at 19-20, that, if the Court finds that the alleged had they been agreed upon, the parties certainly would have included them in writing, then the Court may not consider proffered evidence of additional consistent terms. Va. Code § 8.2202 cmt. 3. As neither party has invoked this exception, the Court does not address its potential applicability. The exception to additional terms this rule are such is that, 33 ^ 83; ECF No. 54, at 14.21 Moreover, neither party has introduced evidence upon which a reasonable fact finder could conclude that the Release was not intended as the The Court thus concludes parties. final agreement that the Release between the is final, and neither party may introduce parol evidence which contradicts its terms. Though the Release necessarily complete. is final. that does not mean See Va. Code § 8.2-202 cmt. 1(a) it is (explaining that the UCC rejects any assumption that because a writing is final it is necessarily Virginia complete). law does not provide a clear test for determining whether a contract governed by the UCC is considered "complete. In // some cases, the presence of an effective merger clause stating that the contract is the complete agreement between the parties appears to be near-conclusive proof that North an agreement America, is LLC, "complete. 940 F. See // Supp. 2d Hoffman 347, v. 355 Daimler (W.D. Trucks Va. 2013) (finding that parol evidence of oral warranties was not admissible because parties' there was an agreement); Data Systems, statements Inc., [that effectively see 736 F. also King Supp. constituted worded 114, an merger Industries, 118 express clause Inc, (E.D. Va. warranty] v. 1989) would in the Worldco ("[0]ral not be what Hurts notes that the Release may not be binding in the event of fraud, but the Court grants Volvo Penta's summary judgment motion with respect to What Hurts's fraud claims, and What Hurts has advanced no other argument that the Release is not legally enforceable. 21 34 admissible warranties 291 {4th to contradict clause."); Cir. encouraged Hill v. But 1982). to consider ascertain the parties' Aircraft 32 Co., or F.3d vary the disclaimer BASF Wyandotte Corp., even with a merger the totality intent. See, 1126, of 1132-33 696 clause, the e.g., of F.2d 287, courts are circumstances to Betaco, (7th Cir. express Inc, 1994) v. Cessna (explaining that the focus of the inquiry is on the intent of the parties and that courts should consider disclaimer integration clauses. prior the any negotiations. § 2-202.39 the Here, clauses, alleged itself, the nature extrinsic merger and and scope of terms, and the Anderson on the Uniform Commercial sophistication of the parties); Code writing (same). parties have agreed that the Release does not contain a merger clause, and both have taken conflicting positions regarding the completeness of the Release without supporting their assertions by reference to evidence the Court cannot determine as the Release between the reflects parties. the a matter of complete Because in the Volvo and law at exclusive Penta has 22 (for now) simply. this phase that understanding not burden to demonstrate that the Release is complete, consider Put record. carried its the Court will What Hurts's evidence of oral warranties. 22 At the summary judgment hearing, first find evidence. that Volvo Penta argued that the Court must before considering parol ambiguous the Court has found no support in Virginia law for the the However, Release is proposition that a party must first show that a final contract governed by the UCC is ambiguous before introducing evidence of consistent additional 35 b. At the certain Creation of Additional summary statements judgment made by Express Warranties hearing, What (1) Kelleher Hurts that argued the that Replacement Engines and Upgraded Lower Units would work together on the Vessel; and (2) that Kelleher would arrange for an application review to ensure the Upgraded Lower Units would work on the Vessel - became express warranties as a matter of Virginia law. 23-24, 27. Under Virginia Code § 8.2-313, a ECF seller No. 61, at creates an express warranty "that the goods shall conform to the affirmation or promise . . when it makes [a] ny affirmation of fact or promise to the buyer which relates to the goods and becomes part of the basis of the bargain. n Va. Code § 8.2-313 (1) (a) . Ultimately, [t]he issue whether a particular affirmation of fact made by the seller constitutes an express warranty is generally a question of Bayliner Marine Corp. v. fact. 499, 502 Crow, 257 Va. 121, 127, 509 S.E.2d (1999) . In its motion for summary judgment, Volvo Penta argues that it is entitled to summary judgment on Claim III because its primary terras. Indeed, Virginia courts applying the coraraon law parol evidence rule have not required a showing of arabiguity before considering evidence of additional consistent terras, and the Virginia UCC liberalized the coraraon See Jim law parol evidence rule that already permitted this evidence. Potts, 255 Va. 147, 155-56, 495 S.E.2d 828, 833 (1998) Co v. (discussing the partial integration doctrine); see also 1 Sinclair on Virginia Remedies § 36-8 (2022) (explaining that Virginia Code § 8.2-202 "reflects a liberal approach to the introduction of parol evidence to explain or supplement written contracts for the sale of goods than was formerly Carpenter followed in Virginia"). 36 obligation under the Limited Warranty was to provide non-defective parts, the and What Hurts has not offered sufficient proof that either Replacement defective. ^3 What Hurts Engines ECF No. has 54, or at introduced the Upgraded 26-27. Instead, evidence that the Lower Units were Volvo Penta argues. Replacement Engines and Upgraded Lower Units did not synchronize correctly, which does not relate to any written provision of the Limited Warranty. Id. However, What Hurts has offered evidence that Volvo Penta may have created an oral warranty that the Engines Replacement and Thus, Upgraded Lower Units would work together on the Vessel. to the extent that What Hurts can demonstrate the existence of an affirmative oral warranty, the remaining Hurts has offered sufficient evidence issue F.3d at introduced issues 23 in 624. various the The Court emails months finds that documenting following whether What (at this stage) See this warranty to survive summary judgment. 166 is it installation Hitatchi has, ongoing of of breach of as What water the Credit, Hurts pressure Replacement what Hurts disputes this characterization and insists that its evidence is indicative of a product defect as well. See ECF No. 61, at 27-28. Though it is unclear to the Court what evidence would support a finding of a product defect, the Court need not decide this issue to resolve Volvo Penta's motion. As stated previously, a seller creates an express warranty when it makes [a] ny affirmation of fact or promise ... to the buyer which relates to Va. Code § 8.2the goods and becomes part of the basis of the bargain. 313 (1) (a). What Hurts's position is that, based on Virginia Code § 8.2313, the alleged statements by Kelleher that the application would work on the Vessel created an express warranty that the Replacement Engines and ECF Upgraded Lower Units would, in fact, perform together on the Vessel. 24 No. 61, at 24, 27. 37 Engines and Upgraded Lower Units. See, e.g. , ECF No. 61-7 (reporting a "low pressure alarm" on one of the engines); ECF No. 61-8 ECF No. (reporting 61-16 constantly fluctuating water pressure"); (reporting ongoing water pressure alarms and that Volvo Penta cannot resolve the issues they are experiencing"). Based on this showing, Volvo Penta has not carried its burden to demonstrate that there is no genuine issue of material fact as to whether What Hurts's claims Penta's warranty obligations. conceivably ECF No. 54, fall at within Volvo 26. Volvo Penta's motion for summary judgment on this basis is therefore DENIED. c. Expert Testimony Volvo Penta separately argues that What Hurts cannot satisfy its burden of proof to establish breach of an express warranty because it did not timely disclose an expert witness and the time to do so has Hurts's naval claims involve architecture interplay of mechanical the [and] hydrodynamics," a prerequisite to establish, engines were defective. has not identified, suggests that According to Volvo Penta, long since passed. a nor has 54, the plaintiff at Court must engineering. making expert testimony among other things, ECF No. 14. However, located, produce that any of the any expert Volvo Penta caselaw 13-14. prove a Moreover, "defect. even nothing if in expert the 38 testimony were record suggests that testimony to See id. establish the elements of breach of an express warranty. at What necessary that to expert testimony would be necessary to prove a synchronization failure. What Hurts, admissions tt for its part, by Volvo argues that the record is "replete with Penta that will establish the elements for its breach of express warranty claim. necessary ECF No. 61, at 17 . Ultimately, demonstrate Volvo that What Penta has Hurts will not carried be unable its to prove burden the to elements of its breach of express warranty claim without expert testimony. The Court accordingly DENIES Volvo Penta's summary judgment motion to the extent that it is predicated on the absence of expert testimony. 2. Volvo Penta next Notice argues that it is entitled to summary judgment on Count III because What Hurts failed to provide adequate notice ECF No. and 54, an at opportunity to cure the Under Virginia 25-26. alleged product Code § 8.2-607, must notify the seller "within a reasonable time" issues with the goods. Va. Code § an adequate opportunity to \\ disputed issues of material (What Hurts) it of Engines the and cure // fact. the buyer of discovering 8.2-607(3)(a). when notice was provided in this case, defects. But whether and and whether Volvo Penta had any defect, See e.g. , plainly ECF No. turns 61, at on 27 (referencing multiple emails to Volvo Penta notifying ongoing water Upgraded Lower pressure Units); 39 issues ECF No. with 54, the at Replacement 25-26 (Volvo Penta) (reflecting the fact that \\ Volvo Penta's internal warranty Accordingly, files do not show any warranty claims made"}. Volvo Penta's motion for summary judgment on Count III based on lack of notice and an opportunity to cure is DENIED. 3, Finally, Volvo Penta Damages seeks a ruling on summary judgment finding that What Hurts cannot recover consequential, incidental. or included direct damages because the seller would disclaimer that incidental or consequential Limited Warranty exclusive parts; the further obligation stated available. // see was repair no ECF that or direct 54, Warranty be damages. ECF No. Under Virginia law, not specified differently, Id.; Limited at responsible No. the 35-1, at seller's replacement of \v a for "any 2. The sole and defective monetary damages would be 28-29. a seller of goods may preemptively limit a buyer's financial recovery by disavowing categories of damages. Va. Code parties' § 8.2-719 (1) (a) . agreed remedies The Court limitations, will but some generally enforce minimum adequate In some sense, there are overlapping damages limitations at issue in this There are the repair/replacement and consequential/incidental limitations in the Limited Warranty, and there are additional "limitations" in the Release itself, where What Hurts has agreed to be responsible for certain costs, See ECF No. 35-1, at 1. Volvo Penta appears to argue that even if the Court finds that certain damages clauses in the Limited Warranty As are unenforceable, the limitations in the Release remain enforceable, 25 case. neither party has argued this point at length, the Court reserves ruling on this issue, However, the Court is skeptical that the same analysis that the Court undertakes with respect to the damages clauses in the Limited Warranty does not apply with equal force to the damages clauses in the Release itself. 40 remedies must // remain available. Id. § 8.2-719 cmt. 1. Accordingly, any clause which limits remedies in an unconscionable manner cause cannot a be limited undermining the enforced. Id. And remedy fail its to adequacy of the if circumstances essential limited Clauses limiting or excluding damages purpose, remedy, cannot enforce that remedy limitation either. are arise then § Id. subject that thereby the Court 8.2-719(2). to different standards depending on the type of damages they deal with. So the Court considers each category of damages in turn. a. Contractual damages are clauses valid unconscionable. Consequential Damages \\ unless Va. n limiting Code deals Unconscionability the § or excluding limitation 8.2-719(3) primarily with consequential or exclusion grossly bargaining power at the time the contract is formed. Corp. V. Halco Eng'g, (1988); Va. see 137, Inc., 170, also (2022) 1 583, 593, 104 S.E. 371, Kent Sinclair, (explaining that 382 (1920) u unequal Envirotech 364 S.E.2d 215, Smyth-Bros.-McCleary-McClellan Co. unconscionable bargain is see 234 Va. added) . ^6 (emphasis a is v. (the 220 Beresford, inequality 128 of an so gross as to shock the conscience"); Sinclair the on principle Virginia of Remedies § 36.8 unconscionability is As defined by the Virginia UCC, consequential damages include (in relevant part) "any loss resulting from general or particular requirements and needs of which the seller [of a product] at the time of contracting had reason to know and which could not reasonably be prevented by cover or otherwise." 26 Va. Code § 8.2-715(2)(a). 41 intended parties, clauses on the to prevent "oppression and unfair surprise to the and that the test for unconscionability is whether the involved are so one-sided" circumstances existing Ordinarily, contract"). contractual at the the time Court must of the making of determine whether a See Here, Motors Corp., even evidence to choice' but after suggest to 883 F.2d 287, discovery, that, accept by the particular facts and circumstances surrounding a transaction. Gen. unconscionable "based the v. is to be unconscionable considering Carlson provision as // What 293 Hurts for example, the limited (4th Cir. has had it Id. persuaded by that shocks under at a 31. the What Hurts's consci[ence] delusion // // bare assertion no because man in the Hurts has disclaimer Accordingly, unconscionable. with n is this is senses ECF Penta's and not No. 61, the Court damages motion Court of grossly formed, consequential Volvo the the disclaimer introduced no evidence of no 'meaningful would agree to such a disclaimer. Because What that no Nor unequal bargaining power when the warranty was finds introduced warrant[y] consequential damages disclaimer included. 1989). for is not summary judgment is GRANTED to the extent that it seeks to preclude What Hurts from recovering any consequential damages. b. In contrast provisions are not to Incidental Damages consequential damages, expressly addressed 42 in the incidental damage relevant Virginia remedies parties See Va. statute. dispute the Code proper § 8.2-719(3). standard for As a result, determining the whether a clause eliminating recovery for incidental damages is enforceable. Volvo Penta contends that What Hurts must show that the incidental damages disclaimer is unconscionable for the Court to find that it is unenforceable. it must show replacement, ECF only No. that 54, the carried Then, its Warranty Hurts argues remedy, that repair or failed its essential purpose in order for What Hurts unconscionability applies. What 29-30. Limited to recover incidental damages. standard at the burden Court First, or will to demonstrate the Court will address which failure assess that of essential whether it is purpose Volvo entitled Penta to has summary judgment with respect to incidental damages. The ordinary rule for evaluating clauses that purport to limit a buyer's remedies is that such clauses are enforceable unless circumstances cause an exclusive or limited remedy to fail of its Va. essential purpose. rule that, on The relevant its Code § 8.2-719(2) . face, only language [c]onsequential of damages may applies the be But there is a special to consequential Virginia limited or Code damages. provides excluded unless that the In a separate provision of the Virginia UCC, incidental damages are defined as including "expenses reasonably incurred in inspection, receipt, transportation and care and custody of goods rightfully rejected, any commercially reasonable charges, expenses or commissions in connection with effecting cover and any other reasonable expense incident to the delay or 27 other breach. Va. Code § 8.2-715(1). 43 Va. limitation or exclusion is unconscionable. Notably, {emphasis added). referenced in separately this incidental damages are Indeed, language. defines consequential Virginia Code § 8.2-715, Code though and § not expressly the Virginia UCC damages in incidental the legislature chose to reference only consequential damages in Virginia Code § 8.2-719(3). Code § 8.2-713(1)(discussing the consequential damages") Under Virginia unambiguous, language it Va. 96, 104, 639 unless two the 277, 284-85, as intention doing would so of a and (same). statute evidenced result in a Martial Arts World of Richmond, 178 different (2007). terms presumed to mean two different things. Va. language Va. is [is] bound by its plain meaning" and "must S.E.2d 174, uses legislature [w]hen law. Conyers v. absurdity. also incidental availability of legislature's chose See (emphasis added); Id. § 8.2-714(3) [the Court] give effect to the 8.2-719 (3) 355 S.E.2d 319, 323 Furthermore, within the same Klarfeld v. (1987). by the manifest Inc., 273 when the act it is Salsbury, 233 As applied here, the legislature chose to create a higher barrier to invalidation, a finding of unconscionability, for consequential damages provisions alone. that See Va. subsection excluding Code § 8.2-719(3); 3 \\ intended damages as well. cmt. 3 (explaining recognizes the validity of clauses limiting or consequential legislature see also id. for damages") (emphasis this provision to added). apply to Had the incidental it would have so stated by the use of that term. 44 Klarfeld, 233 Va. Virginia Code damages. and there applying the language § at 285, 355 8.2-719(3) has is been as S.E.2d no to subsection demonstrate argument (3) the as to from written only to that The 323. unambiguous would result in a "manifest absurdity. fails at language consequential Volvo Penta consequential Accordingly, // unconscionability applies to incidental damages. of that damages Volvo Penta standard in All other remedy 28 limitations remain valid unless a buyer can show that the exclusive or § limited remedy 8.2-719 (2) . failed its Therefore, essential the Court See purpose. finds that What Va. Code Hurts need only show that the Limited Warranty remedy failed its essential purpose to invalidate the incidental damages disclaimer. With the standard determined, the Court next addresses whether Volvo Penta is entitled to summary judgment on the of incidental fails its damages. essential issue A contractually agreed-to limited remedy purpose when circumstances arising during Volvo Penta argues that Virginia courts have extended the unconscionability requirement to incidental damage limitations as well, but 29 the Court is unconvinced. None of the cases which Volvo Penta cites brief squarely address whether Virginia Code § 8.2-719(3) clauses limiting While recovery for the Court's incidental damages. independent research See in its is applicable to ECF No. 62, at 13-14. reveals divergent interpretations of section 2-719(3) of the Uniform Commercial Code across different jurisdictions, in the absence of on-point Virginia caselaw, this Court, applying Virginia law, is bound by the plain meaning of a statute when its language is unambiguous. See Conyers v. Martial Arts World of Richmond, Inc., 273 Va. 96, 104, 639 S.E.2d 174, 178 (2007); see also Burris Chem., Inc, v. USX Corp., 10 F.3d 243, 247 (4th Cir. 1993) (explaining that a federal court applying state law "rule[s] upon state law as it exists and do[es] not surmise or suggest its expansion"). The Court thus applies the text of Virginia Code § 8.2-719(3) as written to apply only to consequential damages limitations. 45 performance of the agreement" deprive the buyer of the substantial Envirotech Corp., value of its bargain. at 220; see Va. Code § 8.2-719 cmt. 234 Va. at 593, For example, 1. limits a buyer's remedy to repair or replacement, 364 S.E,2d when a seller that remedy may fail its essential purpose when neither repair nor replacement can Hill, return the goods to their warranted condition. at 297; § 13:20 its see also J. {6th ed. essential repair but . . White Summers, F.2d Uniform Commercial Code (explaining that a limited remedy may fail 2023) purpose cannot & R. 696 when perform the the seller repairs is . . willing . and able the because to goods contain a design defect"). Volvo Penta contends that What Hurts cannot prove that the Limited Warranty failed its essential purpose "because Volvo Penta which was an adequate remedy timely supplied replacement engines, ECF No. for any purported breach of warranty. the summary Replacement judgment Engines What hearing. and Upgraded 54, Hurts Lower at 29. argued Units But that could not at the work together on the Vessel due to the Vessel's design, and accordingly, no amount of repair or replacement of the engines could have made both products Limited perform Warranty remedy as warranted. failed its Ultimately, essential whether purpose rests the on disputed issues of material fact, not the least of which includes resolving whether any oral warranties were created, and, whether restore repair or replacement could 46 not, in fact, if so. the Because Volvo Penta fails engines to their "warranted" condition. to demonstrate that of What on Hurts no reasonable this fact Volvo issue, find in finder could Penta's judgment is DENIED to the extent that motion for favor summary it seeks to preclude What Hurts from recovering any incidental damages. c. Finally, any direct limitation Direct Damages Volvo Penta argues However, damages. of remedies to that as \\ Hurts discussed repair unenforceable when that remedy has Va. What or cannot recover above, a seller's may replacement failed its essential be purpose. For the same reasons discussed with respect Code § 8.2-719(2) . to incidental damages, genuine disputes of material fact preclude this Court from determining at this stage that the Limited Warranty remedy did not fail its essential purpose. that the Limited Warranty remedy failed If its What can essential Accordingly, then direct damages may be available. Hurts show purpose, Volvo Penta's motion for summary judgment is DENIED to the extent that it seeks to preclude What Hurts from recovering any direct damages. IV. For the reasons stated CONCLUSION above. the Court GRANTS in part DENIES in part Volvo Penta's motion for summary judgment. 53 . The The Court extent Court also that GRANTS as to Counts GRANTS Volvo Penta's motion as to Count it seeks Volvo to Penta's preclude 47 motion What Hurts from I III and ECF No. and II. to the recovering consequential damages. motion as The Order to IT to Count Clerk all IS is the Court DENIES Volvo Penta's III. REQUESTED Counsel SO otherwise, of to send a copy of this Opinion and Record. ORDERED, /s Mark CHIEF Norfolk, Virginia January S , 2024 48 UNITED S. Davis STATES DISTRICT JUDGE

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