DIAMOND FRUIT GROWERS, INC. V. KRACK CORP. 794 F.2d 1440 (9th Cir. 1986) CASE BRIEF

DIAMOND FRUIT GROWERS, INC. V. KRACK CORP.

794 F.2d 1440 (9th Cir. 1986)

NATURE OF THE CASE: This was an appeal from a judgment on an indemnification clause. Krack (P), supplier and third party plaintiff, appealed from a judgment for Metal Matic (D) third party defendant manufacturer on P third-party complaint against D for selling it allegedly defective tubing, which it used to manufacture a cooling unit that it sold to Diamond (P).

FACTS: Over the course of 10 years, Krack (P) ordered tubing from Metal Matic (D) pursuant to an exchange of purchase orders and acknowledgment forms sent by both parties. D's forms contained a disclaimer of liability to P for any incidental damages caused by any defect in the tubing and made its assent expressly conditional to P's assent to this term. P's purchase order did not contain this provision and P never formally assented. At one time, P's purchasing manager objected to D's liability limitations, but both parties continued to do business. Diamond (P) used one of the cooling units and sued Krack (P) for damages to its fruit caused by a toxic leak in the tubing manufactured by D. P filed a third party complaint against D. D used the disclaimer clause as its defense to P's third party action. The trial court denied D's motion for a directed verdict. D was found to be 30% responsible. D moved for judgment n.o.v. and the court denied that. D appealed.

ISSUE:

RULE OF LAW:

HOLDING AND DECISION:

LEGAL ANALYSIS:

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