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CNH Industrial America LLC. v. Jones Lang Lasalle Americas, Inc.

United States District Court, E.D. Wisconsin

August 15, 2016



          J.P. Stadtmueller U.S. District Judge.

         This case arises out of a contract dispute over a national marketing campaign. (See generally Docket #39). On June 24, 2016, and pursuant to Federal Rule of Civil Procedure 56, the plaintiff, CNH Industrial America LLC (“CNH”), moved for summary judgment with respect to: (1) its breach of contract claim; and (2) the defendant’s, Jones Lange LaSalle Americas, Inc., (“JLL”), declaratory judgment counterclaim.[1] (Docket #74). That motion is now fully briefed and ripe for adjudication. (Docket #83, #87, #93).

         As described more fully below, the Court concludes that numerous disputes of material fact exist in this case. Accordingly, an award of summary judgment pursuant to Rule 56 is inappropriate, and the Court will deny CNH’s motion in its entirety. (Docket #74).


         1.1 The Parties

         CNH is a limited liability company organized and existing under the laws of the State of Delaware, with its principal place of business located at 700 State Street, Racine. (Docket #39 ¶ 1). It manufactures and sells farming and construction equipment through a network of dealers under several name plates, including the New Holland brand at issue in this action. (Docket #39 ¶ 1).

         JLL is a corporation organized and existing under the laws of the State of Maryland, with its principal place of business located at 200 East Randolph Drive, Chicago, Illinois. (Docket #39 ¶ 2). It provides property management and project management services to clients, including clients within the borders of the Eastern District of Wisconsin. (Docket #39 ¶ 2).

         1.2 Undisputed Facts

         In 2007, CNH began to undertake a corporate rebranding program for its New Holland Agriculture line of products (the “Rebranding Program”). (Docket #95 ¶ 1). The Rebranding Program would involve, among other things, the manufacture and installation of new signage at more than one thousand of its dealers in the United States and Canada. (Docket #95 ¶ 1).

         CNH chose to retain a project manager for the Rebranding Program. (Docket #95 ¶ 2). CNH selected JLL for that position (Docket #95 ¶ 2), and, to that end, CNH and JLL entered into a Service Agreement on April 7, 2008 (“Service Agreement”) (Docket #95 ¶ 3). Under the Service Agreement, JLL further negotiated agreements with three sign manufacturers-Icon Identity Solutions, Priority Signs, Inc., and Thomas Sign & Awning Company, Inc.-pursuant to which each would manufacture and install signs for the Rebranding Program. (Docket #95 ¶ 4). CNH was a third-party beneficiary under each of those three agreements. (Docket #95 ¶ 4).

         The Service Agreement between CNH and JLL detailed various obligations on behalf of the parties. As it relates to this case, the Service Agreement imposed the following obligations on JLL:

a. To research and document warranty information for all raw materials and sub components;
b. To direct control and responsibility of all manufacturing, including quality control;
c. To negotiate the “best possible warranty” for the signs and to disclose all elements of the warranty program to CNH; and
d. To provide ongoing management services for warranties one-year from the date of uninstallation.

(Docket #95 ¶ 5).[3] The agreement also contains two provisions related to: (1) the “Acceptance of Deliverables, ” which requires a certain procedure be followed in the event of the delivery of “deficien[t] or nonconform[ing]” goods; and (2) a “Limitation on Liability, ” which caps damages in the event of a dispute between the parties. (Docket #95 JLL Proposed Fact ¶¶ 56, 58).[4]While the original Service Agreement was to remain in effect until December 16, 2011, the parties decided to extend it by way of various amendments until its termination on March 31, 2016. (Docket #95 ¶ 6).

         Vinyl was an essential component to this sign-manufacturing process. The company selected to provide the vinyl for the Rebranding Program was Arlon. (Docket #95 ¶ 7). Specifically, the Arlon Series 2500 vinyl was chosen as the sole vinyl to be utilized for the project. (Docket #97 ¶ 8). Generally, five signs were manufactured and installed at each dealer location (one of which had two sign faces). (Docket #95 ¶ 9). Of those, two signs are owned by CNH. (Docket #95 ¶ 9). The other three signs are owned by the individual dealer. (Docket #95 ¶ 9).

         Sometime after selecting Arlon as the vinyl supplier, JLL began negotiating the terms of the Arlon vinyl warranty. (Docket #95 ¶ 13). Though many factual disputes surrounding this negotiation are unresolved, the parties agree that the vinyl warranty that ultimately appeared in Exhibit E to the agreements made between JLL and the sign manufacturers stated: “Arlon Vinyl Extended Warranty B 7 year warranty on 1st surface. 2nd surface on exterior sign applications is 9 years. There is no charge for parts/labor/shipping for 1-year from date of installation.” (Docket #95 ¶ 15). The parties also agree that the aforementioned language was not drafted by JLL. (Docket #95 ¶ 16). Rather, Adam Cook (“Mr. Cook”), JLL’s assigned project manager until approximately the second quarter of 2009, testified that he “believed” that the language quoted above was drafted by one of the sign manufacturers. (Docket #95 ¶¶ 12, 16).

         Two problems arose during the course of the sign manufacturing process. First, in late 2008, the vinyl delivered by Arlon began to check and crack when applied to the New Holland signs. (Docket #95 ¶ 24). Though the parties dispute the cause of the 2008 failure and manner in which it was resolved, it is undisputed that sign fabrication continued thereafter. (Docket #95 ¶¶ 24-31). Second, in late 2010 or early 2011, CNH began to receive additional reports from its dealers that signs fabricated and installed for the Rebranding Program were again failing due to cracking, checking and fading. (Docket #95 ¶ 31; see also Figures 1 and 2)

         Image Omitted.

         As a result of the sign failures, CNH dealers went through a process of reporting failed signs to either CNH or JLL. (Docket #95 ¶ 34). If the failure was reported to CNH, then CNH would, in turn, report the failure to JLL. (Docket #95 ¶ 34). JLL would then initiate a claim with the sign manufacturer that manufactured the sign, and that sign manufacturer would then contact Arlon to initiate a warranty claim seeking payment for manufacture of a new sign face and its installation. (Docket #95 ¶ 34).

         At this time, Arlon deemed product failures of the sort at issue to be failures for which the vinyl warranty would be available. (Docket #95 ¶ 33). And, until approximately mid-2014, Arlon agreed to pay the full replacement cost of sign faces on which its failed vinyl was affixed. (Docket #95 ¶ 36). At no point during this period of time did Arlon refuse to pay for any sign faces based upon the date of installation, the nature of the failure, or any other factor. (Docket #95 ¶ 36).

         In mid-2014, however, Arlon stopped fully funding the replacement of sign faces. (Docket #95 ¶ 37). And, in August 2014, Arlon advised JLL that it would no longer fund remediation of any of the failed signs. (Docket #95 ¶ 40). Instead, Arlon offered to fund remediation of additional signs at a price of $3, 000.00 per dealer site. (Docket #95 ¶ 40). CNH did not accept this offer, and instead entered into a Common Interest ...

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