## Facts

- Bigge Power Constructors, LLC contracted to supply two large derricks for a nuclear power-plant project.
- Bigge contracted with Rexnord Industries, LLC to manufacture and deliver 28 specialized steel castings for the derricks for about $4.5 million.
- Rexnord delivered the castings; Bigge accepted all 28 and incorporated them into the derricks delivered to the project owner.
- Bigge withheld roughly $1 million allegedly due to Rexnord and asserted counterclaims alleging (1) late delivery and (2) failure to perform an agreed “root-cause analysis” related to casting performance problems.
- Bigge claimed about $1.6 million in damages, including consultant expenses to conduct a root-cause analysis and other costs (personnel/equipment) allegedly tied to delay and performance issues.
- The contract contained a limitation-of-liability clause excluding “special, consequential or incidental damages.”

## Issues

1. Whether, under the UCC and the parties’ limitation clause, Bigge’s claimed losses were direct damages or barred incidental/consequential damages.
2. How Bigge’s acceptance and use of the castings affected the damages analysis under the UCC.
3. Whether Rexnord breached the contract (late delivery and/or failure to perform a root-cause analysis) and what categories of damages could be recovered given the limitation clause.

## Decision

- The court held Rexnord breached the contract by failing to meet the agreed delivery schedule.
- The court ruled that Bigge’s consultant expenses for a root-cause analysis could constitute direct damages and therefore were not barred by the contract’s exclusion of consequential and incidental damages.
- The court declined to classify, on the summary-judgment record, Bigge’s other claimed expenses (including certain personnel and equipment costs) as direct or consequential damages.
- The court granted in part and denied in part the summary-judgment motions, leaving unresolved damages categories for further proceedings.

## Legal Principles

- Under the UCC, a buyer that accepts goods may still recover direct damages caused by the seller’s breach.
- Commercial parties may contractually exclude incidental and consequential damages; such exclusions generally do not eliminate liability for direct damages unless the contract clearly limits direct remedies.
- Direct damages are losses that flow naturally from the breach in the ordinary course of events; consequential damages depend on the buyer’s special circumstances known or reasonably foreseeable at contracting.
- Classification of claimed losses as direct or consequential may require a fact-specific record, making summary judgment inappropriate where the evidence does not establish how such costs ordinarily arise from the type of breach alleged.

## Conclusion

The court enforced the contract’s exclusion of incidental and consequential damages but refused to treat it as a bar to all of Bigge’s claimed losses, holding that root-cause analysis consultant costs could be recoverable as direct damages and that other delay-related expense categories required further factual development.


Rexnord Indus., LLC v. Bigge Power Constructors, LLC, 947 F. Supp. 2d 951 (E.D. Wis. 2013)