United States District Court, D. Vermont
H. HIRSCHMANN, LTD., Plaintiff,
GREEN MOUNTAIN GLASS, LLC, and ADCO PRODUCTS, LLC, Defendants.
OPINION AND ORDER RE: MOTION TO DISMISS FOR FAILURE
TO STATE A CLAIM AND MOTION TO CERTIFY QUESTION TO VERMONT
SUPREME COURT (DOCS. 38, 48)
Geoffrey W. Crawford, Judge United States District Court
warranty claim arises out of the sale of a sealant used in
the production of insulated windows. Defendant ADCO Products,
LLC ("ADCO") is the manufacturer. Defendant Green
Mountain Glass, LLC ("GMG") is the purchaser. GMG
used the sealant in fabricating windows for its customer
Plaintiff H. Hirschmann, Ltd. ("Hirschmann").
Pending before the court is Defendant ADCO's Motion to
Dismiss for Failure to State a Claim (Doc. 38) and Plantiff s
Motion to Certify Question to Vermont Supreme Court (Doc.
48). The court heard argument on April 25, 2016. Counsel was
allowed to file supplemental briefing and the motions were
taken under advisement on May 2, 2016. For the reasons
discussed below, Defendant's Motion to Dismiss is DENIED,
and the Motion to Certify Question is DENIED as moot.
court accepts as true the allegations of the First Amended
Complaint. (Doc. 37.)
is a Vermont corporation engaged in the design and
manufacture of high-end custom wood windows and doors. (Doc.
37 at ¶ 2.) On February 1, 2010, Hirschmann contracted
with Bulley & Andrews, LLC to supply 2, 000 custom-made
insulated windows, doors, and related products for a
construction project in Chicago, Illinois ("the
project"). (Id. at f 13-14.)
subcontracted with GMG to make insulated glass units for the
project. GMG is a New Hampshire corporation with a principal
place of business in Charlestown, New Hampshire.
building the insulated glass units, GMG ordered and used a
sealant manufactured by ADCO. (Id. at ¶ 24.)
ADCO is a Delaware corporation with its principal place of
business in Michigan. (Id. at ¶ 6.)
the windows failed after installation due to problems with
the sealant. (Id. at ¶ 23.)
filed suit against GMG. GMG then filed a third-party action
for indemnity against ADCO. On February 16, 2016, the court
granted Hirschmann's motion to amend the complaint to add
its own claim against ADCO. ADCO now moves to dismiss this
claim on the grounds that Hirschmann's claim against it
fails for lack of contractual privity.
parties disagree about which state's substantive law
governs the privity issue. Hirschmann seeks to apply the law of
Michigan or New Hampshire. These states permit implied
warranty claims in cases involving economic loss, even in the
absence of contractual privity. ADCO seeks to apply the law
of Vermont because privity remains a requirement for implied
warranty cases not involving personal injury. See Long
Trail House Condo. Ass 'n v. Engelberth Constr.,
Inc., 2012 VT 80, ¶¶ 30-35, 192 Vt. 322, 59
A.3d 752 (holding that implied warranties of habitability and
good workmanship do not extend to subsequent purchaser of
real property who lacked contractual relationship with
diversity case, the federal court applies the conflict of law
rules of the forum state. See Klaxon Co. v. Stentor Elec.
Mfg. Co., 313 U.S. 487 (1941). The sale of the sealant
by ADCO to GMG is governed by the Vermont Uniform Commercial
Code ("UCC") which applies to "transactions in
goods." 9A V.S A. § 2-102. The UCC's choice of
law provision provides: "In the absence of [a
contractual choice of law provision], this title applies to
transactions bearing an appropriate relation to this
state." 9A V.S.A. § 1-301(b). "A law bears a
reasonable relation to a transaction when a significant
portion of the making or performance of the contract occurs
in that jurisdiction." 1 White, Summers, & Hillman,
Uniform Commercial Code § 1.19 n.4 (6th ed.
determining whether Vermont substantive law concerning the
requirement of privity of contract has a sufficient relation
to this transaction to require its application, the court
turns to the Restatement (Second) of Conflicts (the
"Restatement"). See Elhannon LLC v. The F.A.
Bartlett Tree Expert Co., No. 2:14-cv-262, 2015 WL
5097244, at *4 (D. Vt. Aug. 28, 2015) ("When contractual
parties have not specified the state law to be applied in a
given case, Vermont uses the test laid out in Restatement
(Second) Conflict of Laws ... to determine which state has
the most significant relationship to the transaction and the
parties." (citations omitted)). The court begins with
the Restatement's most general provision and ends with
its most specific.
Section 6 of the Restatement
6 of the Restatement provides an analytical framework for
conflict issues of any description. In the absence of a
specific statute, § 6 sets out seven policy factors to
guide courts in choosing the law of one forum over another.
See Restatement (Second) of Conflicts § 6;
see also Id. at § 188 ("The rights and
duties of the parties with respect to an issue in contract
are determined by the local law of the state which, with
respect to that issue, has the most significant relationship
to the transaction and the parties under the principles
stated in § 6."). The court considers each § 6
factor in turn.
The Needs of the Interstate and International System
factor does not apply to this case. The sale of goods can
occur with or without the application of a privity
requirement. As this case demonstrates, states differ in
their policies on this issue, and products and commerce
continue to move under either regime. New Hampshire and
Michigan have eliminated privity as a defense; Vermont has
retained it. All three states continue to participate in the
national economy. There is no systemic demand for one rule
The Relevant ...