An All or Nothing Approach Causes the Sun to Set in Indiana
SelectSun GmbH[1] v. Porter Inc., No. 18-3149, 2019 U.S. App. LEXIS 18851, 2019 WL 2587836 (7th Cir. June 25, 2019).
By: Cameron Robichaux
Thecase out of the Seventh Circuit arises from a contract between SelectSun,purchaser, and Poker-Run-Boats, seller, to buy a yacht and custom-built lift.Poker-Run-Boats is a vendor for Porter, defendant, which designs andmanufactures boats in Europe. The specific boat SelectSun requested was to meetEU standards. However, because of a design choice for a switchable exhaustsystem, which allows for exhaust either above or below the water line, it didnot meet these standards. EU regulations only allow for underwater expulsion. SelectSunalso complained to Poker-Run Boats about problems with the boat's engines,steering column, exterior gel coating, and interior furnishings.
Afterthe initial claim ended in default judgement, Poker-Run-Boats went out ofbusiness. This left warranty claims against Porter as the manufacturer of theyacht. Yet, as determined by the district court, Porter was not in privity ofcontract with SelectSun nor was bound by terms of apparent authority.
Notably,SelectSun also claimed unjust enrichment and plead for the full one million dollarsfor the yacht, the lift, and related financials to be paid back with no otherremedy. To hold Porter liable, SelectSun argued that Poker-Run-Boats acted as amandate for Porter in negotiating the contract for sale and to build. The court did not reject this idea butdeclined to analyze it because repairs to make the yacht EU compliant wouldonly cost two thousand dollars.
TheSeventh Circuit explained that under Indiana law, a breach of contractclaim requires showing theexistence of a contract, the defendant's breach, and damages. Accordingly,undoing the sale is not possible regardless of the contractual relationship ornot because the damages are not sufficient. Therefore, all the other elementswere moot. The Seventh Circuit affirmed the district court’s judgment againstSelectSun.
[1] Gesellschaft mitbeschraenkter Haftung, which translates to company with limited liability.
