Facts

In December 2002, Ne-Mo's Bakery agreed to bake cinnamon rolls for Holiday Inn Express' located throughout the United States. The rolls were deep frozen and shipped via UPS. Ne-Mo's hired defendant Stone Plastics Inc. to make the plastic trays and lids for the cinnamon rolls. In September 2003, plaintiff Unisource Worldwide Inc. replaced Stone Plastics as the tray and lid supplier. Unisource provided trays and lids purchased from defendant Global Manufacturing Solutions Inc.

Due to a shortage, Unisource obtained Ne-Mo's permission to purchase 256,000 trays and lids from Stone Plastic, who agreed to supply the exact type of tray and lid it had previously sent to Ne-Mo's Bakery. Stone Plastics required the purchase order to include a provision relieving the company of any liability arising from defective trays and lids. Unisource agreed and sent three purchase orders.

A high percentage of the trays shattered during shipment, lending to safety concerns. Unisource subsequently resumed packaging rolls with Global Manufacturing trays, but these trays also had a large percentage of breakage. In July 2004, Unisource lost Ne-Mo's account. On July 16, 2004, a child reportedly choked on a plastic piece of broken tray at a Holiday Inn Express.

Unisource filed suit against Stone Plastics and Global Manufacturing alleging breach of oral contract, breach of express warranties and implied warranties of fitness as well as merchantability for defective trays.

PLAINTIFF'S CONTENTIONS:
The plaintiff contended that Stone Plastic's trays shattered prior to use and thus, were defective in light of their intended and specialized usage. Further, the trays supplied to Unisource were not made of the same material as that previously supplied to Ne-Mo's Bakery. Lastly, the trays were faulty due to substandard thermoforming. Plaintiff claimed that the release of liability applied only to ordinary breakage during shipping.

DEFENDANTS' CONTENTIONS:
Stone Plastics did not deny that the trays were defective, but alleged that plaintiff knew that the type of plastic provided would fail for its intended purpose. Moreover, Stone Plastics contended that Unisource agreed that Stone Plastics would not be held responsible for defects. Global Manufacturing denied all of plaintiff's allegations.

Further, defense argued that the trays broke because of a chemical reaction between the cinnamon and the plastic, not because the tray itself was defective. During cross, plaintiff's chemistry expert conceded this could be a possibility.

Settlement Discussions

Unisource demanded $400,000 from Stone Plastics. Stone Plastics offered $200,000.

Damages

Plaintiff claimed $528,000 future loss of profits, $392,000 for incidentals, $697,000 for the indemnity claim, plus other damages.

Result

Defense verdict. The court granted a nonsuit for the breach of oral contract claims, finding no oral contract was made.

Deliberation

nine hours

Poll

12-0 (defense for Stone Plastics), 12-0 (defense for Global Manufacturing)

Length

19 days