United States District Court, W.D. Oklahoma
RED ROCKS RESOURCES L.L.C., d/b/a Red Rocks Oil and Gas Operating, a Colorado Limited Liability Company, Plaintiff,
TRIDENT STEEL CORPORATION, a Missouri corporation, Defendant and Third-Party Plaintiff,
NORTH AMERICAN INTERPIPE, INC., Third-Party Defendant.
MEMORANDUM OPINION AND ORDER
J. CAUTHRON United States District Judge.
purchased casing from Defendant Trident. According to
Plaintiff, when using that casing while drilling an oil well,
the casing failed due to defects. As a result, the well was
lost. Plaintiff then brought this action against Defendant
Trident asserting claims for defective product, breach of
implied merchantability, breach of the implied warranty of
fitness for a particular purpose, and negligence. Trident has
filed a Motion for Partial Summary Judgment arguing that the
undisputed material facts entitle it to judgment on certain
of Plaintiff's claims.
judgment is appropriate if the pleadings and affidavits show
there is no genuine issue as to any material fact and that
the moving party is entitled to judgment as a matter of law.
Fed.R.Civ.P. 56(c). “[A] motion for summary judgment
should be granted only when the moving party has established
the absence of any genuine issue as to a material
fact.” Mustang Fuel Corp. v. Youngstown Sheet &
Tube Co., 561 F.2d 202, 204 (10th Cir. 1977). The movant
bears the initial burden of demonstrating the absence of
material fact requiring judgment as a matter of law.
Celotex Corp. v. Catrett, 477 U.S. 317, 322-23
(1986). A fact is material if it is essential to the proper
disposition of the claim. Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 248 (1986). If the movant carries
this initial burden, the nonmovant must then set forth
“specific facts” outside the pleadings and
admissible into evidence which would convince a rational
trier of fact to find for the nonmovant. Fed.R.Civ.P. 56(e).
These specific facts may be shown “by any of the kinds
of evidentiary materials listed in Rule 56(c), except the
mere pleadings themselves.” Celotex, 477 U.S.
at 324. Such evidentiary materials include affidavits,
deposition transcripts, or specific exhibits. Thomas v.
Wichita Coca-Cola Bottling Co., 968 F.2d 1022, 1024
(10th Cir. 1992). “The burden is not an onerous one for
the nonmoving party in each case, but does not at any point
shift from the nonmovant to the district court.”
Adler v. Wal-Mart Stores, Inc., 144 F.3d 664, 672
(10th Cir. 1998). All facts and reasonable inferences
therefrom are construed in the light most favorable to the
nonmoving party. Matsushita Elec. Indus. Co. v. Zenith
Radio Corp., 475 U.S. 574, 587 (1986).
first argues that due to the economic loss rule
Plaintiff's tort claims are barred as a matter of law.
Oklahoma adopted the economic loss rule in Waggoner v.
Town & Country Mobile Homes, Inc., 1990 OK 139, 808
P.2d 649. The Oklahoma Supreme Court explained the rule as
follows: “[I]n Oklahoma no action lies in
manufacturers' products liability for injury only to the
product itself resulting in purely economic loss.”
Id. at 1990 OK 139, ¶ 22, 808 P.2d at 653.
Relying on this doctrine, Trident argues that because
Plaintiff's claims are for solely economic loss, it is
entitled to judgment.
response, Plaintiff argues that its claims for damages are
not solely for loss to the property itself. Rather, it argues
it suffered the loss of the well itself as a result of the
defects. In this manner, Plaintiff argues that it has brought
claims broader than those for damage only to the product
itself and thus it is entitled to recover. Indeed, in
Dutsch v. Sea Ray Boats, Inc., 1992 OK 155, 845 P.2d
187, 194, the Oklahoma Supreme Court acknowledged that
Waggoner does not extend beyond situations where the
damage is only to the product itself. If there is damage to
other items, then the economic loss doctrine does not apply.
In its Reply, Trident argues that the loss to the wellbore is
a consequential damage, therefore there is no evidence of
damage to anything other than the product itself, and thus
the economic loss doctrine should apply. However, the cases
on which Defendant relies are distinguishable. In each case,
the allegedly defective product was a part of the overall
product for which loss was claimed. Here, the casing is
separate and distinct from the well. Because Plaintiff seeks
to recover for the loss of that well in addition to the loss
of the defective product, it is seeking to recover damages
for loss to something other than the allegedly defective
product. For this reason, the economic loss doctrine set
forth in Waggoner is inapplicable and
Defendant's Motion for Partial Summary Judgment on this
issue will be denied.
second argument seeks to impose certain limitations found on
the back of an invoice submitted to Plaintiff following
purchase of the casing. These limitations would essentially
eliminate any claim for damages arising from using the
allegedly defective casing. The Court previously addressed a
similar argument related to terms found on the invoices in
denying Defendant Trident's Motion to Dismiss. Trident
argues here that additional facts have been developed which
demonstrate that the contract was not complete at the time
the Court found in its earlier Order. The question that is
determinative on this issue is when the contract between the
parties was formed. In ruling on the Motion to Dismiss, the
Court determined that once Plaintiff accepted Defendant's
price and quantity terms for the sale of casing, the contract
was complete. Later actions such as submitting the invoice or
ultimately paying that invoice were actions taken in
performance of the contract, rather than in acceptance of
additional terms contained in those invoices. In an attempt
to reach a different result, Defendant argues that discovery
has determined that prior to accepting the casing Defendant
hired a third party to inspect it. Defendant then directs the
Court to 12A Okla. Stat. § 2-513 which provides that a
purchaser has a right to inspect goods prior to accepting
them. Trident argues that this inspection was a part of the
acceptance of the contract and therefore the terms and
conditions that arrived with the invoice became part of the
Court finds the additional information learned in discovery
insufficient to warrant a change in the earlier decision.
That Plaintiff inspected the piping after receiving it from
Defendant does not dictate that the contract was not yet
formed. Rather, as the Court previously determined, it is
clear that upon Plaintiff's acceptance of the price and
quantity terms, the contract was complete. Any later
inspection served only to provide a mechanism by which
Plaintiff could reject certain products, which did not meet
the required specifications. The material alteration that
would exist by enforcing the terms argued by Defendant was
never a part of the parties' negotiations and certainly,
there was no meeting of the minds or acceptance by Plaintiff
of that alteration. To the extent Trident argues that the
course of dealings between the parties amounted to an
acceptance of the terms and conditions set forth in the
invoice because Plaintiff never objected to those also fails.
The Third Circuit addressed a similar argument stating,
“[T]he repeated sending of a writing which contains
certain standard terms, without any action with respect to
those terms, cannot constitute a course of dealing which
would incorporate a term of the writing otherwise excluded
under § 2-207.”
Altronics of Bethlehem, Inc. v. Repco, Inc., 957
F.2d 1102, 1108 (3d Cir. 1992) (quoting
Step-Saver Data Sys., Inc. v. Wyse Tech., 939 F.2d
91, 104 (3d Cir. 1991)).
as Plaintiff notes, the Oklahoma Commercial Code and relevant
case law clearly establish that express acceptance is
required before material alterations can occur. Accordingly,
Defendant's Motion for Partial Summary Judgment is denied
on this issue.
reasons set forth herein, Defendant Trident Steel
Corporation's Motion for Partial Summary Judgment (Dkt.
No. 130) is DENIED. ...