True North Composites, LLC v. Trinity Industries, Inc.

True North Composites, LLC (TNC) (plaintiff) and Trinity Industries, Inc. (Trinity) (defendant) agreed to develop and build composite railcars. Under the agreement, TNC would produce the carbodies, Trinity would manufacture steel undercarriages with wheels and a platform, and TNC would mount the carbodies to the undercarriages. The agreement, entitled “Carbodies Supply Agreement,” stated that it set forth the rights and obligations regarding the production and sale of carbodies. The pricing and invoicing provisions, delivery and release schedules, and allocation of overhead costs were on a carbody basis. The termination provisions were based on Trinity’s failure to deliver carbodies or TNC’s failure to pay for carbodies. After cost overruns and disputes on final specifications, TNC sued Trinity, alleging that Trinity breached the agreement by refusing to negotiate on the final carbody specifications, refusing to purchase carbodies on the required terms, and ordering TNC to stop producing carbodies. Trinity argued that the contract was predominantly for goods and governed by the Delaware version of the Uniform Commercial Code (UCC). The district court held that the agreement was predominantly a services contract and denied Trinity’s motion for judgment as a matter of law that the agreement was within the UCC. Trinity appealed.