## Facts

- American Aerial Services, Inc., a Maine crane and steel-erection company, sought to buy a new truck crane to replace two existing cranes.
- American Aerial negotiated through Empire Crane Company, LLC, an authorized Terex dealer, for a Terex Model T-780 manufactured by Terex USA, LLC.
- Empire’s salesperson emailed that a T-780 had “just come off the line” and attached a Terex brochure (“Data Sheet”) containing specifications and load charts; American Aerial relied on it as a primary factor in purchasing.
- The Data Sheet included small-print load-chart language stating the data was “a guide only” and should not be construed as a warranty for lifting purposes; additional “no express or implied warranties” language appeared in embedded, non-highlighted text.
- Although described as newly produced, the crane had been stored for months before delivery; after delivery, American Aerial reported multiple defects and performance problems, including lifting capacity issues.
- American Aerial sent written communications to Empire and Terex reporting problems and stating it intended to preserve its rights and notify the parties; it later revoked acceptance, asserting substantial nonconformities despite repair efforts.

## Issues

1. Whether the crane was “new” as a matter of law despite extended storage before delivery.
2. Whether Empire acted with actual or apparent authority as Terex’s agent such that Terex could be liable for Empire’s representations.
3. Whether American Aerial gave timely and sufficient notice of breach under U.C.C. § 2-607(3)(a).
4. Whether the brochure language effectively disclaimed implied warranties, particularly the implied warranty of merchantability, under U.C.C. § 2-316.
5. Whether an implied warranty of fitness for a particular purpose arose under U.C.C. § 2-315.
6. Whether fraud and punitive-damages claims were barred by Maine’s economic loss doctrine when only economic damages were sought for alleged product-quality misrepresentations.

## Decision

- The court granted summary judgment that the crane was “new” because it had not been previously sold to an end user or placed into service; storage alone did not make it “used.”
- The court granted summary judgment for Terex on agency/apparent-authority theories, finding insufficient evidence that Terex manifested authority for Empire to bind Terex through representations.
- The court denied summary judgment on lack-of-notice defenses, holding American Aerial’s written communications gave adequate, timely notice of the alleged breach.
- The court denied summary judgment on the implied warranty of merchantability claim, concluding the purported disclaimers in the brochure were not conspicuous and did not effectively exclude merchantability.
- The court granted summary judgment against the implied warranty of fitness for a particular purpose claim, finding no distinct “particular purpose” and insufficient proof of reliance on seller judgment beyond ordinary crane use.
- The court granted summary judgment on fraud and punitive damages, holding the economic loss doctrine required contract/warranty remedies for alleged misstatements about the goods’ quality and performance where damages were purely economic.

## Legal Principles

- Goods may be “new” for sales-law purposes if they have not been previously sold to an end user or placed in service; storage time alone does not convert new goods into used goods.
- Apparent authority requires manifestations by the principal and reasonable reliance; “authorized dealer” status alone does not establish a dealer’s power to bind the manufacturer by representations.
- U.C.C. § 2-607(3)(a) notice focuses on substance: a buyer preserves remedies by timely communicating that the transaction is claimed to involve a breach, without formalistic wording.
- Under U.C.C. § 2-316, exclusion of the implied warranty of merchantability must be conspicuous and must clearly communicate the disclaimer; small-print or embedded brochure language may be ineffective.
- An implied warranty of fitness for a particular purpose requires a purpose distinct from ordinary use and reliance on the seller’s skill or judgment to select suitable goods.
- Maine’s economic loss doctrine bars tort recovery (including fraud and related punitive damages) for purely economic losses arising from alleged misrepresentations about the quality or character of goods covered by a sales contract.

## Conclusion

On summary judgment, the court limited the dispute largely to U.C.C. remedies by dismissing agency-based theories, the fitness-for-particular-purpose claim, and tort claims barred by the economic loss doctrine, while allowing the implied warranty of merchantability claim to proceed because the brochure’s disclaimers were not effective under the U.C.C. and the buyer provided sufficient notice of breach.


American Aerial Services, Inc. v. Terex USA, LLC, 39 F. Supp. 3d 95 (D. Me. 2014)