Lykes Bros. Steamship v. Waukesha Bearings Corp.
United States District Court for the Eastern District of Louisiana
502 F. Supp. 1163 (1980)
- Written by Serena Lipski, JD
Facts
Lykes Bros. Steamship Co., Inc. (Lykes) (plaintiff) owned a ship named the Almeria Lykes. Lykes purchased a stern-tube sealing mechanism from Waukesha Bearings Corporation (Waukesha) (defendant) and installed it in the Almeria Lykes. Waukesha designed the stern-tube sealing mechanism, and Union Carbide Corporation (Union Carbide) (defendant) developed the ceramic liner. In purchasing the mechanism, Lykes relied on Waukesha’s and Union Carbide’s innocent misrepresentations in promotional materials claiming that they had substantially improved the mechanism. Both Waukesha and Union Carbide disclaimed warranties and excluded liability for consequential damages. Waukesha also disclaimed liability for gross negligence. The ceramic lining on the stern-tube mechanism failed, and the Almeria Lykes needed to be dry-docked and repaired. Lykes sued Waukesha and Union Carbide in federal district court, seeking consequential damages, among other things. The court held that Union Carbide’s warranty disclaimer and limitation of liability were valid, but Waukesha’s were not because they disclaimed liability for gross negligence. The court then considered whether Lykes could recover consequential damages from Waukesha.
Rule of Law
Issue
Holding and Reasoning (Cassibry, J.)
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