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Keywords

damagesliabilitymotionsummary judgmentforce majeuremotion to dismiss
damagesliabilitymotionsummary judgmentforce majeuremotion to dismiss

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Kaiser Aluminum & Chem. Corp. v. Bonjoro

Facts

The dispute arose from a Magnesium Supply Agreement (MSA) between Kaiser and US Mag, effective October 9, 2020, where US Mag agreed to sell magnesium to Kaiser. US Mag declared force majeure on September 29, 2021, citing catastrophic equipment failures, which led to reduced deliveries and failure to provide a safety stock. Kaiser had to purchase cover magnesium at higher prices to meet its obligations to its customers, which included renegotiating supply agreements to account for increased costs.

The dispute arose from a Magnesium Supply Agreement (MSA) between Kaiser and US Mag, effective October 9, 2020, where US Mag agreed to sell magnesium to Kaiser. US Mag declared force majeure on September 29, 2021, citing catastrophic equipment failures, which led to reduced deliveries and failure to provide a safety stock. Kaiser had to purchase cover magnesium at higher prices to meet its obligations to its customers, which included renegotiating supply agreements to account for increased costs.

Issue

The main legal issues were whether US Mag's force majeure declaration was valid and whether Kaiser's claims for consequential and incidental damages, including lost profits, were precluded by the MSA.

The main legal issues were whether US Mag's force majeure declaration was valid and whether Kaiser's claims for consequential and incidental damages, including lost profits, were precluded by the MSA.

Rule

The court applied the Uniform Commercial Code (UCC) principles regarding a buyer's right to cover after a breach and the limitations on a seller's liability as outlined in the MSA, particularly regarding consequential and incidental damages.

The court applied the Uniform Commercial Code (UCC) principles regarding a buyer's right to cover after a breach and the limitations on a seller's liability as outlined in the MSA, particularly regarding consequential and incidental damages.

Analysis

The court analyzed the applicability of the UCC and the MSA provisions, determining that Kaiser's claims for lost profits were not barred by the MSA's liability limitations. The court noted that the pass-on defense raised by US Mag was inconsistent with New York law, which does not allow a breaching party to benefit from costs passed on to third parties.

The court analyzed the applicability of the UCC and the MSA provisions, determining that Kaiser's claims for lost profits were not barred by the MSA's liability limitations. The court noted that the pass-on defense raised by US Mag was inconsistent with New York law, which does not allow a breaching party to benefit from costs passed on to third parties.

Conclusion

The court granted Kaiser's motion for partial summary judgment, allowing it to pursue its claims for lost profits, and denied US Mag's motion to dismiss those claims.

The court granted Kaiser's motion for partial summary judgment, allowing it to pursue its claims for lost profits, and denied US Mag's motion to dismiss those claims.

Who won?

Kaiser Aluminum Warrick, LLC prevailed in the case because the court found that US Mag's pass-on defense was not valid under New York law, allowing Kaiser to recover lost profits.

Kaiser Aluminum Warrick, LLC prevailed in the case because the court found that US Mag's pass-on defense was not valid under New York law, allowing Kaiser to recover lost profits.

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