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Keller v. A.O. Smith Harvestore Products, Inc.

Colorado Supreme Court
819 P.2d 69 (1991)


Facts

Alfred and Martha Keller (plaintiffs) were dairy farmers who bought two Harvestore grain storage systems from A.O. Smith Harvestore Products, Inc. (Smith) (defendant). Prior to the Kellers’ purchase, Smith had engaged in a robust marketing campaign, which involved sending Smith distributors out with marketing materials. The Harvestores, unlike traditional grain silos, were designed to keep oxygen away from the stored grain. According to the marketing materials materials, without the presence of oxygen, the grain could be kept forever without spoilage. Potential buyers were also told that the Harvestores would make protein supplements for dairy cows unnecessary, or at least reduce the need for protein supplements. Based on what the Kellers saw in Smith’s marketing materials, the Kellers signed Smith’s purchase-order agreement to buy two Harvestores. The agreement stated that the purchase order was the final integration of the agreement between the parties. The agreement also stated that the marketing materials did not create any “guarantees” and that the Kellers were not relying on the marketing materials “as such.” The Kellers’ new Harvestores were installed, and the Kellers began using them to store feed for their cows. Soon thereafter, the cows began to suffer from a variety of ailments, and some cows even died. The Kellers sued Smith in federal court for several claims, including negligent misrepresentation. The Kellers argued that the marketing materials contained misrepresentations that unlawfully induced the Kellers to enter the contract. The jury ruled in favor of the Kellers, and Smith appealed. On appeal, the United States Court of Appeals for the Tenth Circuit certified two state-law questions to the Colorado Supreme Court for review.

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Holding and Reasoning (Kirshbaum, J.)

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Dissent (Rovira, C.J.)

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