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Westport Marina, Inc. v. Boulay

October 25, 2010

WESTPORT MARINA, INC., D/B/A SHIPSTORE.COM, THE COAST DISTRIBUTION SYSTEM, INC., KELLOGG MARINE, INC., AND C.C. MARINE DISTRIBUTORS, INC., PLAINTIFFS,
v.
ADAM BOULAY, THE CLEAN SEAS COMPANY, ABC CORPS 1- 10 (FICTITIOUS ENTITIES), AND JOHN DOES 1-10 (FICTITIOUS INDIVIDUALS), DEFENDANTS.



The opinion of the court was delivered by: Hurley, Senior District Judge

MEMORANDUM & ORDER

By Memorandum and Order dated March 24, 2010, this Court granted in part and denied in part a motion for summary judgment filed by defendant The Clean Seas Company ("Clean Seas") pursuant to Federal Rule of Civil Procedure 56. In that Order, the Court dismissed nine of the twelve claims brought by plaintiffs Westport Marina, Inc., doing business as Shipstore.com ("Westport Marina"), The Coast Distribution System, Inc., Kellogg Marine, Inc., and C.C. Marine Distributors, Inc. ("C.C. Marine Distributors") (collectively, "Plaintiffs"). The Court denied summary judgment, however, as to Plaintiffs' claims for indemnity (Count X of the Second Amended Complaint) and contribution (Count XI) as well as Plaintiffs' request for attorneys' fees and costs (Count XII). Due to the absence of certain information from the record regarding Plaintiffs' claims for indemnity and contribution, the Court granted Clean Seas leave to file a second motion for summary judgment as to those remaining claims.

Presently before this Court is Clean Seas' second motion for summary judgment which seeks dismissal of Plaintiffs' claims for indemnity and contribution. For the reasons set forth below, Clean Seas' motion is GRANTED.

FACTUAL BACKGROUND

The following facts are undisputed unless otherwise noted.*fn1 Clean Seas was a corporation incorporated under the laws of Florida, with its only office in Jacksonville, Florida. (Def.'s 56.1 ¶ 1.) The product at issue in this case (the "Product") was marketed as an enzymatic boat coating designed to inhibit marine growth on boat bottoms. (Id. ¶ 2.) The Product was designed and patented by Clean Seas, manufactured by Suntec, Inc., and sold and distributed to Plaintiffs by Dolphinite, Inc. ("Dolphinite") under Dolphinite's label as "Go Fast Bottom Paint" and "Go Fast Inflatable Bottom Coating."*fn2 (Id. ¶ 3.) Plaintiffs are wholesale distributors of marine products who sold the Product to retail distributors, who in turn sold the Product to end-user customers. (Id. ¶ 4.)

The Product, which was manufactured beginning in February 2003, was first received by end-user customers in or around March 2003. (Order at 3.)*fn3 By April 2003, Dolphinite and Clean Seas had begun to receive complaints from their end-user customers regarding the Product's effectiveness. (Id.) Plaintiffs do not allege that they suffered property damage as a result of applying the Product to boats owned by them. Rather, Plaintiffs allege that the failure of the Product to perform as expected caused them to suffer economic loss. (Id.) In particular: (1) Westport Marina claims it made settlement payments to end-user customers in the amount of $2,981.00, and (2) C.C. Marine Distributors claims it made settlement payments to end-user customers in the amount of $7,620.81. (Def.'s 56.1 ¶ 7.)

Clean Seas contends that the only document in the record that demonstrates the legal "basis for the end-users' claims" against Westport Marina is an October 16, 2003 letter written by Brian C. Bonifant (an "apparent end-user") and addressed to a representative of Westport Marina. (Id. ¶ 8.) In that letter, Bonifant complains about damages he incurred as a result of purchasing and using the Product and states: "I feel your company bears some burden in this issue for distributing a defective product." (Id. (citing Aff. of Robert D. Fischer, Esq. in Supp. of Mot. for Summ. J. ("Fischer Aff."), Ex. C).) Clean Seas further asserts that "[t]here is nothing in the record which specifically states the [legal] basis for the end-users' claims against C.C. Marine Distributors, Inc." (Def.'s 56.1 ¶ 9.) Plaintiffs dispute both of these characterizations of the record and assert that "[i]t is undisputed that the basis for the end-user's claim was the defective Product." (Pls.' 56.1 ¶¶ 8, 9.)

Plaintiffs acknowledge that they are not parties to any contract (written or oral) with Clean Seas. (Order at 3.) In fact, Plaintiffs had no direct contact with Clean Seas representatives prior to receiving complaints from end-user customers. (Id. at 3-4.) Instead, Plaintiffs were introduced to the Product by and purchased the Product from defendant Adam Boulay ("Boulay"), President and owner of Dolphinite. (Id. at 4.)

The labels on the Product included Clean Seas' logo as well as the notation, "With MET Inside," a reference to Clean Seas' patented enzymatic antifouling additive. (Id.) The labels also contained the following statements: "Keeps hull exceptionally clean from marine growth! Increase speed, Reduce drag, Maximize efficiency!" (Id.) Plaintiffs allege, inter alia, that "Clean Seas drafted, designed, and had final approval over... [all statements on the] labels." (Id.) Plaintiffs further allege that they were merely passive parties in the supply chain and, as such, were guilty of no wrongdoing. (Id.) Clean Seas acknowledges responsibility only for the application and storage instructions contained on the Product's labels and denies responsibility for the other statements included on the labels. (Id.) Instead, Clean Seas asserts that Boulay, as president of Dolphinite and not at the direction of Clean Seas, was responsible for placing these statements on the labels. (Id.)

PROCEDURAL HISTORY

Plaintiffs' Second Amended Complaint, which was filed in the Northern District of New York on May 16, 2005, seeks recovery against Clean Seas and Boulay*fn4, as well as ABC Corps 1-10 (fictitious entities) and John Does 1-10 (fictitious individuals). The action was transferred to the Eastern District of New York on September 21, 2006. As noted above, Clean Seas filed a first motion for summary judgment and, by Memorandum and Order dated March 24, 2010, the Court dismissed Plaintiffs' claims for breach of contract, negligence, breach of express warranty, breach of implied warranty of merchantability, breach of implied warranty of fitness for a particular purpose, fraud, negligent and intentional misrepresentation, and strict products liability (Counts I through IX).

The Court denied that portion of Clean Seas motion seeking summary judgment on Plaintiffs' claims for contribution and indemnification, as well as Plaintiffs' request for attorneys' fees and costs (Counts X through XII). In particular, the Court noted:

Given the absence of information in the record on Plaintiffs' claims for contribution and indemnity, most notably, whether any judgments have been rendered against Plaintiffs, whether Plaintiffs entered into any settlements with end-users, and the basis for any such liability, the Court grants Clean Seas leave to file another motion for summary judgment on these claims. (Order at 26-27.) The Court further found that because it had denied Clean Seas' motion for summary judgment with regard to Plaintiffs' contribution and indemnity claims, "Clean Seas' argument that a cause of ...


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