Western Recreation Vehicles v. Swift Adhesives

Western Recreation Vehicles, Inc. (Western) (plaintiff) manufactured trailers and other recreational vehicles. In 1979, after consulting with Swift Adhesives, Inc. (Swift) (defendant) about the correct type of adhesive to use, Western began a new process in which it used Adhesive # 47344 (Adhesive), provided by Swift, to bond exterior aluminum sidewalls to the interior components. For a period of approximately five years, Adhesive worked well for Western’s purposes and resulted in an extremely low failure rate. In 1984, Western decided to begin a new manufacturing process using fiberglass sidewalls instead of aluminum. Western consulted with Swift to determine which adhesive would be appropriate for the new process, and after performing some testing, Swift assured Western that it could continue to use Adhesive for manufacturing with the fiberglass sidewalls, making the oral statement: “You can go ahead and use [Adhesive] just like you have on the aluminum.” Western proceeded to use Adhesive in its manufacturing process with the fiberglass sidewalls, but before the end of 1985, Western began to receive numerous complaints about sidewalls becoming delaminated due to failures with Adhesive. More than 20 percent of the fiberglass-sidewall vehicles that Western manufactured with Adhesive required repairs, resulting in substantial costs. On January 17, 1990, Western sued Swift for breach of express and implied warranties. Swift removed the lawsuit to federal district court and argued that the statute of limitations had already run. The district court held that Adhesive did not bond properly with fiberglass, although Swift had expressly warranted that it would. The district court further held that Swift’s statement that Adhesive could be used on fiberglass just like it had on aluminum constituted an explicit extension of the express warranty to future performance, so that the statute of limitations had not run. Swift appealed.