Leprino Foods Co v. Feldmeier Equip Inc Document 74: Response to Motion

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Case 1:03-cv-02461-MSK-MEH Document 74 Filed 08/29/2005 Page 1 of 18 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Civil Action No. 03-cv-2461-MSK-OES LEPRINO FOODS COMPANY, Plaintiff, v.

FELDMEIER EQUIPMENT, INC.,

Defendant.

RESPONSE OF PLAINTIFF TO DEFENDANT FELDMEIER EQUIPMENT, INC.’S MOTION FOR SUMMARY ADJUDICATION (DOCUMENT 69) Plaintiff Leprino Foods Company (“Leprino” or “Plaintiff”), through its counsel, respectfully submits the following as its response in opposition to “Defendant Feldmeier Equipment, Inc.’s Motion for Summary Adjudication” (“Summary Judgment Motion”). The Summary Judgment Motion must be denied for the reasons set forth herein.

I. BACKGROUND

This lawsuit arises, in part, from an Equipment Purchase Agreement entered into between Leprino and Defendant Feldmeier Equipment, Inc.

(“Feldmeier” or “Defendant”), whereby Feldmeier was to manufacture and Leprino was to purchase a vertical, insulated stainless steel silo storage tank and related equipment for use in its dairy manufacturing facility in Waverly, New York. (See, Charles Richard Swetland deposition transcript excerpts at p. 35, ll. 5-23, attached hereto as Exhibit 1, authenticating Equipment Purchase Agreement No. 03273 attached hereto as

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Case 1:03-cv-02461-MSK-MEH Document 74 Filed 08/29/2005 Page 2 of 18 Exhibit 2). The silo arrived at the Waverly facility in a damaged condition on or about July 7, 2000, but was subsequently repaired by Feldmeier. (See, Summary Judgment Motion, Exhibit 1 (sic) at p. 54, ll. 18-22).1 On or about September 25, 2000, Feldmeier and Leprino entered into a limited Settlement Agreement to resolve certain specifically defined “Disputes” between them. (See, Summary Judgment Motion, Exhibit 4 (sic) at Recital B; and Affidavit of Jon B. Alby attached hereto as Exhibit 3 at ¶ 4). The only Disputes the Settlement Agreement resolved between the parties concerning the Waverly facility, were those matters related to Feldmeier’s delay in manufacturing and delivering the silo.2 Id. Pursuant to the express terms of the Settlement Agreement, Feldmeier still was required to fully perform under the Equipment Purchase Agreement and deliver a silo to the Waverly facility that met all contract specifications. (See, Summary Judgment Motion, Exhibit 4 (sic) at ¶ 1; and attached Exhibit 3 at ¶ 4). Feldmeier purported to deliver a silo that complied with all contract specifications to the Waverly facility on or about October 16, 2000.

(See, Summary Judgment Motion, Exhibit 1 (sic) at p. 60, ll. 12-18).

In addition to the storage tank contracted for at the Waverly facility, Leprino engaged Feldmeier to manufacture vertical, insulated stainless steel silo storage tanks and related equipment for other Leprino manufacturing facilities throughout the United States. (See, attached Exhibit 3 at ¶ 5). Because of defects in certain of those other silos manufactured by Feldmeier, Leprino initiated a lawsuit against Feldmeier in the 1 Defendant failed to comply with D.C.COLO.LCivR 56.1C.1. by marking its exhibits using numbers, rather than marking them as A-1 through A-99.

2 Although the Settlement Agreement also resolved certain other “Disputes” in connection with Feldmeier equipment supplied to other Leprino manufacturing plants, those disputes are not at issue in this litigation.

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District Court of the City and County of Denver, Case No. 02 CV 8036, styled as Leprino Foods Company v. Feldmeier Equipment, Inc. Id. It was in that case that Leprino’s expert, Larry Mott, investigated and discovered the defects in the venting and overflow arrangement, which are present in the silo Feldmeier delivered to the Waverly facility. Id. Mr. Mott’s report which identifies the defects in the Feldmeier silo at the Waverly facility was dated October 15, 2003, and served on Feldmeier on October 17, 2003. Id. Thereafter, on November 4, 2003, Leprino initiated this lawsuit (filed in state court and removed by Feldmeier to this Court), in part, to seek redress for the defective vent and overflow arrangement in the silo delivered to the Waverly facility, which cannot meet the overflow capacity required by the Equipment Purchase Agreement. Feldmeier tries to avoid liability for its failure to meet its contractual obligations by improperly seeking summary judgment on two of its affirmative defenses, i.e., statutes of limitation and doctrine of release.3 Defendant fails to acknowledge, as well as misapplies, the appropriate legal standards for the accrual of Leprino’s claims and the applicable statutes of limitation. (See, Summary Judgment Motion, pp. 2-3). Defendant also tries to improperly expand the terms of a written release, which is strictly limited on its face to certain defined “Disputes,” none of which are at issue in this litigation. (See, Summary Judgment Motion, pp. 3-5). Defendant’s analysis of its two defenses is flawed on all levels. Additionally, as detailed below, there are material factual disputes that preclude

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Plaintiff is cognizant of this Court’s procedural and formatting rules for motions for summary judgment and responses thereto, including MSK Civ. Practice Standard V.H.3. However, Feldmeier’s Summary Judgment Motion does not entirely conform to those rules and, accordingly, it is difficult for this response to fully comply with those rules as well. Nonetheless, Plaintiff has endeavored to prepare this response so that it complies with those rules.

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Case 1:03-cv-02461-MSK-MEH Document 74 Filed 08/29/2005 Page 4 of 18 summary judgment on Feldmeier’s defenses. In short, Feldmeier has failed to meet its burden of proof as to its affirmative defenses and its Summary Judgment Motion must, therefore, be denied.

II. FELDMEIER’S STATUTE OF LIMITATIONS AFFIRMATIVE DEFENSE FAILS A.

Feldmeier Has The Burden To Prove Its Statute Of Limitations Affirmative Defense And Fails To Do So.

The defense of statute of limitations is an affirmative defense on which Feldmeier has the burdens of pleading and proof by a preponderance of the evidence. Fed. R. Civ. P. 8(c). Feldmeier fails to meet its burden of proof.

B.

Feldmeier Misstates And Fails To Prove The Elements Of Its Statute Of Limitations Affirmative Defense.

1.

Feldmeier’s blanket assertion that the statutes of limitation periods for all of Leprino’s claims in this lawsuit accrued at time of the delivery of the product or the possession of the goods is incorrect, and is DISPUTED by Leprino. Rather, none of Plaintiff’s claims in this action accrued when Feldmeier delivered the silo to the Waverly facility.

Under the Uniform Commercial Code, a cause of action for breach of contract or breach of warranty accrues when the breach occurs, regardless of the aggrieved party’s lack of knowledge of the breach.

C.R.S. § 4-2-725(2).

More particularly, a breach of warranty occurs when tender of delivery is made; except, that where a warranty explicitly extends to future performance of the goods and discovery of the breach must await the time of such performance, the cause of action accrues when the breach is or should have been discovered. Id. Stated another way, in an explicit

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Case 1:03-cv-02461-MSK-MEH Document 74 Filed 08/29/2005 Page 5 of 18 warranty contract, the claim accrues, and the statute of limitations begins to run, when the plaintiff discovers or should have discovered the defendant’s refusal or inability to maintain the goods as warranted in the contract. Smith v. Union Supply Co, 675 P.2d 333, 335 (Colo. App. 1983). As discussed below, Leprino’s First Claim for Relief of Breach of Contract and its Third Claim for Relief of Breach of Implied and Express Warranties arose when Leprino learned of Feldmeier’s failure to comply with the Equipment Purchase Agreement’s warranties of future performance, not at the time of delivery of the silo to the Waverly facility.

Leprino’s Second Claim for Relief of Negligence, Fourth Claim for Relief of Negligent Misrepresentation, and Fifth Claim for Relief of Strict Product Liability for Misrepresentation arose only when the injury, loss, damage or conduct giving rise to the cause of action was discovered or should have been discovered by the exercise of reasonable diligence. C.R.S. § 13-80-108(8). A claim arises when a plaintiff becomes aware of some damage and of the possibility that negligence was involved. See Housing Authority v. Leo A. Daly Co., 35 Colo. App. 244, 247, 533 P.2d 937, 938 (1975).

Discovery of the physical manifestations of a defect is not necessarily concurrent with discovery of the defect itself. Criswell v. M.J. Brock & Sons, Inc., 681 P.2d 495, 498-9 (Colo. 1984). Inquiry must be made about when the damage occurred as well as when Leprino discovered or, in the exercise of reasonable diligence should have discovered the defect. Id.

2.

Feldmeier’s assertion that the specific statute of limitations for all claims against manufacturers of products is two years, with the exception being breach of

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Case 1:03-cv-02461-MSK-MEH Document 74 Filed 08/29/2005 Page 6 of 18 warranty claims which is three years, is incorrect, and is DISPUTED by Leprino. Rather, breach of contract claims as well as breach of warranty claims are governed by the contract at issue and the three-year limitary period pursuant to the Uniform Commercial Code.

Leprino’s First Claim for Relief of Breach of Contract and its Third Claim for Relief of Breach of Implied and Express Warranties are governed by a three-year limitary period. C.R.S. §§ 4-2-725(1) and 13-80-101(1)(a). Leprino’s Second Claim for Relief of Negligence, Fourth Claim for Relief of Negligent Misrepresentation, and Fifth Claim for Relief of Strict Product Liability for Misrepresentation are governed by a twoyear limitary period. C.R.S. §§ 13-80-102(1)(a) and (b), and 13-80-106(1). 3.

Defendant’s conclusion that Leprino failed to file its complaint within the two-year or three-year statutes of limitation is utterly wrong, and is DISPUTED by Leprino. As demonstrated by the undisputed facts detailed above and, again, below, Leprino filed this action well within the appropriate statutes of limitation for each of its claims for relief.

4.

Moreover, the Colorado Jury Instructions state the following concerning Feldmeier’s burden to prevail on its affirmative defense of statute of limitations: The defendant, [Feldmeier], is not legally responsible to the plaintiff, [Leprino], on the plaintiff’s claim of [each separate claim] if the affirmative defense of the expiration of the statute of limitations is proved. This defense is proved if you find [the accrual of each claim for relief] occurred before [on or about October 15, 2003]. See, C.J.I. 30:28.

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Material Facts In Dispute As To Each Element Of Feldmeier’s Statute Of Limitations Affirmative Defense Preclude Summary Judgment.

1.

All of Leprino’s claims for relief arose on or about October 15, 2003, when

Leprino’s expert in the Denver District Court case, Larry Mott, prepared his report detailing his investigation and discovery of the defects in the venting and overflow arrangement of the Feldmeier silos. (See, attached Exhibit 3 at ¶ 5). At this point Leprino became aware of the defect and the presence of the defect in the silo delivered to the Waverly facility. Id. Because Leprino had no knowledge of the defect at the time of delivery, the statute of limitations did not begin to accrue when the silo was delivered on or about October 16, 2000. It was not until completion of Mr. Mott’s report that Leprino knew or should have known of the existence of its claims. With regard to Leprino’s First Claim for Relief of Breach of Contract and its Third Claim for Relief of Breach of Implied and Express Warranties, the Equipment Purchase Agreement at issue contains numerous express warranties including, but not limited to, the following:

[a]ll goods, materials and equipment furnished under the Agreement will be fit for the purpose intended, merchantable, of good quality, new, free from faults and defects (whether patent or latent) in material or workmanship and in conformance with this Agreement (which includes all exhibits attached hereto).

(See, attached Exhibit 2 at Section 6.3)(emphasis added). Further, any affirmation of fact or promise made by the seller to the buyer which relates to the goods and becomes part of the basis of the bargain creates an express warranty that the goods shall conform to the affirmation or promise. Loughridge v. Goodyear Tire and Rubber Co.,

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Case 1:03-cv-02461-MSK-MEH Document 74 192 F. Supp. 2d 1175, 1181 (D. Colo. 2002).

Filed 08/29/2005 Page 8 of 18 The contract also contains implied warranties of fitness for a particular purpose and merchantability. In Loughridge, the defendant there argued that the breach occurred at delivery, and since the radiant systems were all installed three years or more prior to the filing of the suit, plaintiff’s claims must be dismissed based upon the statute of limitations.

Loughridge, 192 F. Supp. 2d at 1182.

The court disagreed since the plaintiff provided sufficient evidence of specific oral promises made by the defendant regarding the longevity of the Entran II hose which could be construed as explicit warranties of future performance. Id. The plaintiff also produced evidence that those promises became part of the basis of the bargain and would not have chosen defendant as a manufacturer without them. Id. Here, the evidence has established that Feldmeier made specific warranties of future performance, and these warranties were explicit in the written contract, which undeniably became part of the basis of the bargain, and which created an express warranty that the equipment shall conform to the promises. Additionally, Feldmeier sales representatives touted the “Feldmeier Advantage” to prospective customers including Leprino.

(See, Thurman Blanchard deposition transcript excerpts at pp. 17-18, ll. 5-21, attached hereto as Exhibit 4). The “Feldmeier Advantage” assures customers that Feldmeier’s internal piping/venting and overflow system is the equivalent of, or superior to, an external vacuum breaker which is typically utilized in the silo industry. Id.

A vacuum breaker serves to protect the silo from vacuum induced failures, i.e., explosion or implosion of the sealed silo tank. (See, attached Exhibit 4 at pp. 16-17, ll. 13-7).

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Further, the warranties contained in Section 6.3 of the Equipment Purchase Agreement extend to future performance of the silo and, as such, the accrual of a claim for a breach of those warranties does not begin upon delivery. See, C.R.S. § 4-2-725(2). A warranty of future performance must expressly provide a guarantee that the product will perform as promised in the future. See Smith v. Union Supply Co., 675 P.2d 333, 335 (Colo. App. 1983). In Smith, the contract provided that the roof shall be guaranteed unconditionally for a period of 5 years and if any leakage occurs within that time, the roof shall be promptly repaired and replaced. Smith, 675 P.2d at 335. Thus, the contract contained both a warranty to effect repairs for 5 years and an explicit guarantee as to the future performance of the goods. Smith, 675 P.2d at 335. The court, analyzing and applying C.R.S. § 4-2-725(2), concluded that the Smith contract encompassed a warranty explicitly extending to future performance of goods and, therefore, the statute of limitations begins to run when plaintiff discovers or should have discovered defendant’s breach. Smith, 675 P.2d at 335.

The Equipment Purchase Agreement also provides additional warranties in addition to, and mutually exclusive from, the warranties contained in Section 6.3 of the agreement. Those additional warranties provide, among other things, as follows: [i]n addition to all other warranties made by Seller for the benefit of Leprino, Seller agrees that for a period of twelve months from and after the date of Final Completion, the Equipment is guaranteed to be and remain free from defects in material and workmanship under normal and proper use. If the Equipment (or any portion thereof), fails through defect in material or workmanship during

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Case 1:03-cv-02461-MSK-MEH Document 74 Filed 08/29/2005 Page 10 of 18 such one year period, Seller will repair or replace such defective portion of the Equipment free of charge at the Property.4 (See, attached Exhibit 2 at Section 6.4). The contract at issue, like the Smith contract, contains both a warranty to effect repairs for 12 months and an explicit guarantee as to the future performance of the equipment.

Therefore, the contract encompasses a warranty explicitly extending to future performance and, therefore, the statute of limitations begins to run when Leprino discovered or should have discovered Defendant’s breach, i.e., in or around October 2003.

Finally, it is a general principal that parties may vary certain UCC provisions by agreement. C.R.S. § 4-1-102(3). Here, the parties expressly contracted to include numerous express warranties in Section 6.3, which are explicitly exclusive of the 12-month repair and replace “guarantee” provision in Section 6.4. The future performance warranties provision (Section 6.3) applies no time limitation and, as such, those warranties should last for a reasonable time under the circumstances. The determination of a “reasonable time” for the express warranties “to be fit for the purpose intended, merchantable, of good quality, new, free from faults and defects (whether patent or latent) in material and workmanship” requires the trier of fact to assess the particular facts of the case. Certainly, the reasonable life of a warranty for fitness for the purpose intended of an insulated stainless steel silo system would exceed several years. Thus, since Leprino’s breach of contract and breach of warranty claims did not 4 Section 6.4 further states that “[n]othing contained in this Paragraph shall be construed to establish a period of limitation with respect to other obligations which the Seller might have under this Agreement.” (See, attached Exhibit 2 at Section 6.4).

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Case 1:03-cv-02461-MSK-MEH Document 74 Filed 08/29/2005 Page 11 of 18 arise until on or about October 2003, Leprino timely initiated this action on November 4, 2003, well within the three year limitary period from the time the statute began to accrue.

With regard to Leprino’s Second Claim for Relief of Negligence, Fourth Claim for Relief of Negligent Misrepresentation, and Fifth Claim for Relief of Strict Product Liability for Misrepresentation, each are governed by a two-year limitary period. As noted above, those claims for relief do not accrue until the injury, loss, damage or conduct giving rise to the cause of action is discovered or should have been discovered by the exercise of reasonable diligence. A claim for relief does not accrue until plaintiff knows, or should know, in the exercise of reasonable diligence, all material facts essential to show the elements of that cause of action. C.R.S. § 13-80-108(8); see Boyd v. A.O. Smith Harvestore Products, Inc., 776 P.2d 1125, 1128 (Colo. App. 1989) (Buyers’ claims for deceit and negligent misrepresentation arose when they knew or should have know that the damage to their corn was caused by a defect in the silo). Here, Leprino discovered the defects with the vent and overflow arrangement on or about October 15, 2003, when Mr. Mott prepared his expert report in the Denver District Court case, and Leprino timely filed this lawsuit on November 4, 2003. 2.

Leprino initiated this lawsuit well within both the two-year and three-year limitary periods applicable to the claims asserted by Leprino in this action. As noted above, accrual of Leprino’s claims for relief could not have begun until October 15, 2003, when Mr. Mott issued his expert report detailing his discovery of the defects in the venting and overflow arrangements present in the Waverly silo.

11 (See, attached

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Case 1:03-cv-02461-MSK-MEH Document 74 Filed 08/29/2005 Page 12 of 18 Exhibit 3 at ¶ 5). Since this lawsuit was initiated on November 4, 2003, it was filed at nearly the outset of the applicable limitary periods.

3.

Leprino properly filed its complaint well within the timeframes set forth in the applicable statutes of limitation for each of the claims for relief prosecuted in this action and, as such, Defendant’s affirmative defense of the expiration of the statutes of limitation must be dismissed.

Accordingly, Defendant's Summary Judgment Motion must be denied.

III. FELDMEIER’S AFFIRMATIVE DEFENSE OF RELEASE FAILS A.

Feldmeier Has The Burden To Prove Its Affirmative Defense of Release And Fails To Do So.

The defense of release is an affirmative defense on which Feldmeier has the burdens of pleading and proof by a preponderance of the evidence. Fed. R. Civ.

P. 8(c). Feldmeier fails to meet its burden of proof.

B.

Feldmeier Fails To Prove The Elements Of Its Affirmative Defense Of Release.

1.

Feldmeier alleges that Feldmeier and Leprino entered into a Settlement Agreement on or about September 25, 2000, a copy of which is attached to Feldmeier’s Summary Judgment Motion as Exhibit 4 (sic), and which is not disputed by Leprino. 2.

Defendant asserts that it and Leprino were sophisticated parties who were both represented by counsel and who entered into the Settlement Agreement in fairness and good faith, which Leprino does not dispute. However, Jake Feldmeier’s statement in his Second Affidavit whereby he contends the Settlement Agreement resolved all issues concerning the Waverly silo is not made in good faith and is contrary to the

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Case 1:03-cv-02461-MSK-MEH Document 74 Filed 08/29/2005 Page 13 of 18 express wording of that agreement. (See, Summary Judgment Motion, Exhibit 5 (sic) at ¶ 5).

3.

Feldmeier also asserts that Leprino ratified the Settlement Agreement by not rescinding or disaffirming the release within a reasonable period of time. Leprino does not dispute that the Settlement Agreement is binding on both Feldmeier and Leprino.

4.

Defendant’s conclusion that the language of the Settlement Agreement bars all of Leprino’s claims for relief is blatantly wrong and contrary to the express language of that agreement, which limited the settlement to certain defined “Disputes.” Feldmeier’s contention is DISPUTED by Leprino.

5.

Moreover, the Colorado Jury Instructions state the following concerning Feldmeier’s burden to prevail on its affirmative defense of release: The defendant, [Feldmeier], is not legally responsible to the plaintiff, [Leprino], on the plaintiff’s claim of [each separate claim] if the affirmative defense of release is proved. This defense is proved if you find all of the following: 1. After the defendant and the plaintiff entered into the (claimed) contract being sued on in this case, and after the defendant’s (claimed) failure to [timely deliver the silo], the defendant and the plaintiff entered into another contract, referred to as a “release”; 2. In this second contract, or “release,” the defendant and plaintiff agreed that if the defendant would [among other things, deliver a silo that conformed to the specification in the contract documents on or before October 20, 2000], the plaintiff would release or discharge the defendant from any legal responsibility the defendant might otherwise have to the plaintiff for the defendant’s (claimed) failure to [timely deliver the silo]; and 3. The defendant has fully performed [its duties] under the release. See, C.J.I. 30:31.

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Document 74 Filed 08/29/2005 Page 14 of 18 Material Facts In Dispute As To Each Element Of Feldmeier’s Affirmative Defense of Release Preclude Summary Judgment.

1.

On or about September 25, 2000, Feldmeier and Leprino entered into a limited Settlement Agreement to resolve certain known claims, which were specifically defined as the “Disputes.” (See, Summary Judgment Motion, Exhibit 4 (sic) at Recital B; and attached Exhibit 3 at ¶ 4).

The only Disputes the Settlement Agreement resolved between the parties concerning the silo Feldmeier delivered to Leprino’s Waverly facility, were those damages caused by Feldmeier’s delay in manufacturing and delivering the silo, and certain other delivery issues related to other Feldmeier equipment supplied to other Leprino facilities. Id.

2.

In consideration for the Settlement Agreement, Feldmeier agreed that it will, among other things, “deliver the Equipment described in, and will otherwise fully perform in accordance with, Equipment Purchase Agreement No. 03273 for Leprino’s Waverly, New York facility.” (See, Summary Judgment Motion, Exhibit 4 (sic) at ¶ 1). As its consideration for the Settlement Agreement, Leprino agreed to, among other things, tender $51,595.00 to Feldmeier upon the delivery to the Waverly facility of a Feldmeier silo that conformed to the requirements of the Equipment Purchase Agreement. (See, Summary Judgment Motion, Exhibit 4 (sic) at ¶ 2). 3.

Leprino complied with and otherwise fulfilled all of its obligations under the terms of the Settlement Agreement. However, Feldmeier did not fully perform all of its duties under the Settlement Agreement, thus breaching the Settlement Agreement, by among other things, delivering a silo with a defective vent and overflow arrangement. Upon discovery of the latent defects in the silo delivered to the Waverly facility, Leprino

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Case 1:03-cv-02461-MSK-MEH Document 74 Filed 08/29/2005 Page 15 of 18 notified Feldmeier of the defects by providing a copy of Mr. Mott’s expert report on or about October 17, 2003. (See, attached Exhibit 3 at ¶ 5).

4.

Feldmeier refuses to admit or fails to comprehend the plain, express and unequivocal language of the Settlement Agreement, which is limited to certain defined “Disputes.” All of the claims asserted by Leprino in this action are unaffected by the release contained in the Settlement Agreement.

First, the release is not even applicable to the claims in this case. The Settlement Agreement states that, “[t]his Settlement is a full settlement, accord and satisfaction of any and all of the Disputes.” (See, Summary Judgment Motion, Exhibit 4

(sic) at ¶ 5(c)). The agreement defines Disputes by stating, “[d]isputes have arisen in connection with Feldmeier’s performance under the Agreements, a summary of which is attached as Exhibit B (“Disputes”).” (See, Summary Judgment Motion, Exhibit 4 (sic) at Recital B). Additionally, it states that, “[t]he parties desire to resolve the Disputes that have arisen and are executing this Settlement to achieve that purpose.” (See, Summary Judgment Motion, Exhibit 4 (sic) at Recital C). A review of Exhibit B to the Settlement Agreement, which identifies the “Disputes,” clearly shows that the only dispute encompassed by the Settlement Agreement concerning the silo provided to the Waverly facility is a “Delay Claim” for damages for Feldmeier’s delay in manufacturing and delivering the silo. (See, Summary Judgment Motion, Exhibit 4 (sic) at Exhibit B thereto).

It is clear and unequivocal that the Settlement Agreement only released Leprino’s claims for delay damages relating to the silo at the Waverly, New York facility; no other claims or disputes as to that silo were released. Defendant’s argument fails.

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Case 1:03-cv-02461-MSK-MEH Document 74 Filed 08/29/2005 Page 16 of 18 Second, even if the Court were to adopt Feldmeier’s strained and unsupported interpretation that the claims asserted in this litigation had been released pursuant to the Settlement Agreement, Feldmeier cannot prevail because it breached the Settlement Agreement by manufacturing and delivering to Leprino a silo that is defective and fails to conform to the requirements in the contract documents. Feldmeier’s failure to comply with those specifications is at the very heart of this litigation. Thus, summary judgment on that defense is precluded.

The Settlement Agreement is unambiguous and the Court need not go beyond its four corners to determine that is does not implicate the claims brought by Leprino in this lawsuit. However, if for some reason, the Court was to consider the extent of the release as ambiguous then it may consider extrinsic evidence like the intentions of the parties. According to the Affidavit of Jon B. Alby, with respect to the silo delivered to Leprino’s Waverly facility, the release and settlement was limited only to the damages caused by Feldmeier’s delay in manufacturing and delivering the silo to the Waverly facility. (See, attached Exhibit 3 at ¶ 4).

Moreover, Feldmeier’s own actions do not support its position that the Release operated as a release of all claims between the parties.

The Settlement Agreement was entered into on or about September 25, 2000.

Leprino filed its complaint in the Denver District Court action on November 18, 2002, and then proceeded through a two week trial regarding the deficiencies of other Feldmeier silos manufactured for other Leprino facilities around the country. However, Feldmeier never raised the Settlement Agreement as a defense to Leprino’s claims in that case. Even in

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this litigation, Feldmeier did not assert the Settlement Agreement as a defense of release in its initial answer filed on May 27, 2004. It was not until April 18, 2005, that Feldmeier filed its Defendant’s Motion to Amend Answer to raise that defense. Although Leprino opposed that amendment, the Court granted Defendant’s Motion to Amend Answer on June 1, 2005. If the Settlement Agreement was truly a release as to all claims between the parties or even a release as to all claims concerning the Waverly silo, as Defendant dubiously asserts, Feldmeier would not have waited and/or neglected to raise it as a defense until April 2005.

Further, Defendant’s Summary Judgment Motion improperly argues that the paragraph in the Settlement Agreement concerning after acquired facts somehow expands the scope of the “Disputes” that are settled. (See, Summary Judgment Motion, Exhibit 4 (sic) at ¶ 6). It is axiomatic that such language is only to preclude the parties from arguing or asserting a claim of after acquired evidence to escape a valid release; it cannot expand the scope of the claims encompassed by that release, especially when the release is specific in identifying known issues and only releasing such known issues.

Clearly, Feldmeier’s affirmative defense of release is inapplicable and, as such, it must be dismissed. Accordingly, Defendant's Summary Judgment Motion must be denied.

IV. CONCLUSION

For all of the foregoing reasons, Leprino requests that this Court deny Feldmeier’s Summary Judgment Motion in its entirety.

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Case 1:03-cv-02461-MSK-MEH Document 74 Filed 08/29/2005 Page 18 of 18 Respectfully submitted this 29th day of August, 2005.

CAMPBELL BOHN KILLIN BRITTAN & RAY, LLC

By:

s/ Bret M. Heidemann Michael G. Bohn Bret M. Heidemann 270 St. Paul Street, Suite 200 Denver, Colorado 80206 Telephone: (303) 322-3400 Facsimile: (303) 322-5800 mbohn@campbellbohn.com bheidemann@campbellbohn.com ATTORNEYS FOR PLAINTIFF LEPRINO FOODS COMPANY CERTIFICATE OF SERVICE I hereby certify that on the 29th day of August, 2005, I electronically filed the foregoing RESPONSE OF PLAINTIFF TO DEFENDANT FELDMEIER EQUIPMENT, INC.’S MOTION FOR SUMMARY ADJUDICATION (DOCUMENT 69) with the Clerk of Court using the CM/ECF system which will send notification of such filing to the following email addresses:

Catherine A. Tallerico, Esq. at c_tallerico@fsf-law.com s/ Cori Atteberry Cori Atteberry, Legal Assistant