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AQUASCENE, INC. v. NORITSU AMERICAN CORP.

September 22, 1993

AQUASCENE, INC., Plaintiff,
v.
NORITSU AMERICAN CORPORATION, Defendant.



The opinion of the court was delivered by: THOMAS A. WISEMAN, JR.

 I

 At issue here is the effect of two Tennessee code provisions on contractual warranty limitations. Section 47-2-719 of the Tennessee Code provides the following exceptions to the general rule that contractual limitations on warranties are valid:

 
(2) Where circumstances cause an exclusive or limited remedy to fail of its essential purpose, remedy may be has as provided in chapters 1-9 of this title.
 
(3) Consequential damages may be limited or excluded unless the limitation or exclusion is unconscionable. Limitation of consequential damages for injury to the person in the case of consumer goods is prima facie unconscionable but limitation of damages where the loss is commercial is not.

 This question is before the court because the plaintiff, Aquascene, Inc., alleges that the limited contractual warranty provided to it by the defendant, Noritsu American Corp., for photographic processing equipment failed of its essential purpose and that breach of warranty and consequential damages should thus be recoverable. The relevant contractual clauses provide:

 
[Noritsu's] sole and exclusive liability under this warranty shall be that it will provide new or rebuilt replacement parts and labor to correct defects in the equipment covered by this warranty which are reported to [Noritsu] during the first ninety (90) days following the date initial installation of the equipment is completed and will provide new or rebuilt replacement parts necessary to correct defects in the equipment covered by this warranty which are reported to [Noritsu] during the first year following such date.
 
 
EXCEPT AS HEREIN EXPRESSLY STATED, THERE ARE NO WARRANTIES, EXPRESS OR IMPLIED, BY OPERATION OF LAW OR OTHERWISE, APPLICABLE TO THE EQUIPMENT. [NORITSU] DISCLAIMS ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR PARTICULAR PURPOSE. IN NO EVENT SHALL THE COMPANY BE LIABLE FOR ANY INCIDENTAL, INDIRECT, SPECIAL, OR CONSEQUENTIAL DAMAGES.

 The plaintiff initially pled a strict liability claim, but this court granted the defendant summary judgment on this claim because the plaintiff failed to provide any evidence that the product in question--a photographic "mini-lab" for rapid film developing--was "unsafe" or "dangerous" as defined by Tennessee law and as required for success on this claim. *fn1" The plaintiff was therefore left only with a breach of warranty claim. *fn2" Accordingly, the plaintiff now seeks to establish, through a motion for reconsideration and clarification of this court's earlier opinion, whether both "benefit of the bargain" and consequential damages, notwithstanding the contract exclusion on the latter, are recoverable if a breach of warranty is proven. The defendant, in opposition to the motion for reconsideration/clarification and on motion for summary judgment, seeks to establish that consequential damages are not recoverable.

 II

 A. Reconsideration of Prior Rulings

 Plaintiff renews its attempt to institute a strict liability claim against the defendant by arguing that equipment provided by the defendant was "defective" and as a result it damaged property of the plaintiff--paper and chemicals. This attempt is flawed, for the same purposes as the original attempt. Although the equipment in question may have been "defective" as that term is commonly understood, Tennessee law gives this term a very specific meaning within the realm of product liability actions. Specifically, defective is defined to be a "condition of a product that renders it unsafe for normal or anticipatable handling or consumption." Tenn. Code Ann. § 29-28-102(2). The plaintiff provides no evidence that the product in question was "defective" ...


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