Wednesday, December 25, 2013

Midwest Grain Products of Illinois, Inc. v. Productization, Inc. and CMI Corp. case brief

Midwest Grain Products of Illinois, Inc. v. Productization, Inc. and CMI Corp. case brief summary
228 F.3d 784 (2000)

CASE SYNOPSIS
Appellant challenged order of United States District Court for Central District of Illinois, Peoria Division, which granted appellee manufacturer judgment as a matter of law on appellant's third-party beneficiary contract claims and denied appellee manufacturer attorney's fees; appellee manufacturer cross-appealed.

FACTS
  • Midwest Grain Products of Illinois, Inc. (P) signed a contract to purchase grain dryers from Productization, Inc. (D) for $1,515,800. 
  • D contracted CMI Corp. (D) to manufacture the dryers. 
  • CMI requested a letter from Midwest in which Midwest agreed to pay for the dryers and make the checks payable to PI and CMI jointly, which Midwest provided. 
  • CMI had no further dealings with Midwest. 
  • CMI’s contract with PI included both an express warranty provision and warranty disclaimer. 
  • Midwest had problems with the dryers and therefore sued PI and CMI for breach of warranty. 
  • Midwest settled with PI. 
  • The district court granted summary judgment in favor of CMI but did not award attorneys’ fees. 
  • Midwest appealed the award, and CMI appealed the ruling of attorneys’ fees to the United States Court of Appeals for the Seventh Circuit.

DISCUSSION

  • The trial court correctly determined that the state law where the grain dryers were manufactured governed the case because the contract between appellee manufacturer and appellee supplier contained a provision concerning which law would apply and even if the provision was not part of the contract, that state was the place of performance. 
  • Appellant was not a third-party beneficiary to the contract between appellees because there was no evidence that appellees intended that the benefits of the contract run to the benefit of appellant. 
  • Even if appellant could bring a claim, it had no right to prevent appellees from modifying their agreement regarding warranties. 
  • Since it was clear that appellees had agreed to modify the agreement to limit the warranties, appellant had no claim. 
  • Appellee manufacturer was not entitled to attorney's fees because attorney's fees were procedural in nature, thus the state law where the case was originally brought applied. 
  • Under that state's laws, attorney's fees were not authorized.

CONCLUSION
Order affirmed because appellant was not third-party beneficiary to contract between appellees and appellee manufacturer was not entitled to attorney's fees under applicable state law.

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