Monarch Brewing Co. v. George J. Meyer Mfg. Co.
MONARCH BREWING CO. v. GEORGE J. MEYER MFG. CO.
- Proceeding
- district
- Area
- civil
- Panel
- Yankwich (author)
Analysis
The court considered the defendant's motion for summary judgment regarding a machinery sale contract that included a waiver of damages. The court granted the motion, ruling that the waiver clause covered all damages, general or special, resulting from the shipment, erection, or operation of the machinery.
| What the court decided | The model |
|---|---|
Defendant's motion for summary judgment is granted.“The motion of the defendant for summary judgment in its favor as to each and every claim asserted against it in the plaintiff’s amended complaint, filed August 9, 1941, and heretofore argued and submitted, is now granted upon the ground that, by the terms of the contract for the sale of machinery, dated February 14, 1938, the plaintiff has waived the damages it now seeks to recover.” | agree with court The court interprets the contract clause 'damages or consequential damages' to cover all damages. It rejects the plaintiff's argument that 'consequential damages' refers only to damages caused by independent third parties (a definition often used in condemnation cases), reasoning that such an interpretation would render the waiver meaningless because a defendant is not liable for acts of third parties. The court applies the canon of construction that contracts should be interpreted to give meaning to all terms. This is a standard approach to contract interpretation where a specific term (consequential) is paired with a general term (damages) in a waiver context, and the specific term's specialized meaning in other contexts (eminent domain) does not fit the commercial context of machinery sales. |
The order itself: sound — The order is sound. The court correctly identifies the ambiguity in the term 'consequential damages' when paired with 'damages' in a waiver clause. It logically rejects the plaintiff's reliance on condemnation case law, which defines consequential damages as those caused by third parties, because applying that definition would make the waiver clause void for futility (waiving liability for acts the defendant did not commit). The court applies the standard rule of contract construction to give effect to the parties' intent to limit liability for damages flowing from the defendant's own acts (shipment, erection, operation).
Opinion — Yankwich
YANKWICH, District Judge (after stating facts as above).
The motion of the defendant for summary judgment in its favor as to each and every claim asserted against it in the plaintiff’s amended complaint, filed August 9, 1941, and heretofore argued and submitted, is now granted upon the ground that, by the terms of the contract for the sale of machinery, dated February 14, 1938, the plaintiff has waived the damages it now seeks to recover.
I am of the view that the phrase “damages or consequential damages” in the waiver clause of the contract was used to cover all damages, general or special, that might result in the “shipment, erection or the operation” of the machinery. See, Luitweiler Pumping Engine Co. v. Ukiah *1002Water & Improvement Co., 1911, 16 Cal.App. 198, 209, 116 P. 707, 712; 25 C.J.S., Damages, § 2, p. 455. To limit the waiver to the words “consequential damages”, and, then, to interpret the damages they cover, as some condemnation cases do (see cases’ below), as “those which are attributable to the interposition of some independent cause other than the acts of the defendant” (to quote the language of counsel for the plaintiff in their last letter-memorandum), would render the waiver clause meaningless.
For, if consequential damages be those caused by other parties, no liability can attach to the defendant on account of them. And, clearly, to interpret the contract of the parties as waiving damages for which the defendant would not, under any circumstances, be liable — they being caused by the acts of others — -would do violence to the rule which bids us to interpret contracts so as to give them meaning rather than to make them meaningless. When parties contract, they do not protect themselves against anticipated liabilities which are not theirs. On the contrary, they seek immunity from possible damage which may flow from their own acts. So did the parties here.
And neither the rule of ejusdem generis nor the special meaning given to the words “consequential damages” in some federal condemnation cases-such as United States v. Chicago, B. & Q. Ry. Co., 7 Cir., 1937, 90 F.2d 161, 166-169; United States v. Chicago, B. & Q. Ry. Co., 8 Cir., 1936, 82 F.2d 131, 136, 137, 106 A.L.R. 942—call for an interpretation which would destroy entirely the meaning of the word “damages”, as used in the waiver.
Hence the ruling above noted.
Cites, in this corpus
- Luitweiler Pumping Engine Co. v. Ukiah Water & Improvement Co. Civ. No. 816. · 1911-05-09