Ny Drilling, Inc. v. Tjm, Inc. LLC

573 F.Supp.3d 854 (2021)

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Nature of the Case

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Facts

D is the exclusive distributor of HDE's drilling rigs in the United States. When HDE sold the rigs at issue to D, the purchase agreements accompanying the rigs contained a one-year 'warranty agreement' between HDE and D (that is, between manufacturer and distributor). P is a construction company that purchased two drilling rigs from D in July and November of 2018 - both times pursuant to written contracts. HDE was not a party to either purchase document. The purchase contract contains a warranty disclaimer: D MAKES NO REPRESENTATION OR WARRANTY OF ANY KIND, EXPRESS OR IMPLIED, WITH RESPECT TO THE EQUIPMENT, AND AGREES THAT NO WARRANTY IS IMPLIED WITH RESPECT TO THE CONDITION, MERCHANTABILITY, OR FITNESS FOR A PARTICULAR PURPOSE. NO OTHER TERMS AND CONDITIONS SHALL SUPERSEDE THIS PROPOSAL. BY ORDERING ANY ITEMS ON THIS PROPOSAL WITH OR WITHOUT SIGNING THIS YOU AND YOUR COMPANY HEREBY UNDERSTAND AND AGREE TO THE TERMS AND CONDITIONS STATED HERE IN. THIS PARAGRAPH MAY NOT BE MODIFIED, AMENDED, DISCHARGED OR TERMINATED EXCEPT IN WRITING AND SIGNED BY THE PARTIES HERETO. The rig malfunctioned shortly after delivery. The 'entire front of the machine collapsed.' D delivered replacement parts and repaired the machine. It then 'failed' again a few months later. D then replaced the rig with another rig from HDE. The parties executed a separate contract for the second machine on November 28, 2018. It included the same warranty disclaimer in the same location as the first. The second machine malfunctioned on a number of occasions, and D made at least two repairs. P notified D that 'a section of the mast was failing[,] which would cause a full structural failure.' D 'picked up' the rig at the end of August. D had not repaired or returned the machine as of September 2021. P sued D alleging a breach of the implied warranty of merchantability; (2) breach of the implied warranty of fitness; (3) that, as a result of D's breach of the implied warranties, D owes P $93,000 in replacement and repair costs; and (4) breach of warranty agreement between D and HDE. P alleges that the warranty agreement between D and HDE extended to P as a third-party beneficiary and that D breached that warranty agreement by performing inadequate repairs. P seeks $369,155.00 in damages for this breach. D moved to dismiss.