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' ·' IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEBRASKA 4:12-CV-3142 FINAL JURY INSTRUCTIONS

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Page 1: District of Nebraska | United States District Court · Web viewIt will be your duty to decide from the evidence whether the plaintiff has proved its claims. From the evidence, you

'

·'

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF NEBRASKA

4:12-CV-3142

FINAL JURY INSTRUCTIONS

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PART I: GENERAL INSTRUCTIONS

INS TRUCTION #1: INTRODUCTION

Ladies and gentlemen of the jury , the evidence has been fully submitted to you. It is now my job to instruct you on the law to apply to this case. In a few minutes, the lawyers will present closing arguments on behalf of their respective clients and afterward, it will then be your duty to begin fully deliberating this case in the jury room.

The instructions I gave you at the beginning of the trial and during the trial remain in effect. I now give you some additional instructions.

You must, of course, continue to follow the instructions I gave you earlier, as well as those I give you now. You must not single out some instructions and ignore others, because all are important. This is true even though some of those I gave you at the beginning of trial are not repeated here.

The instructions I am about to give you now, as well as those I gave you earlier, are in writing and will be available to you in the jury room.

, .I!:'

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PART I: GENERAL INSTRUCTIONS

I N S TRUCTION # 2 : DUTY OF JURY

It will be your duty to decide from the evidence whether the plaintiff has proved its claims. From the evidence, you will decide what the facts are. You are entitled to consider that evidence in the light of your own observations and experiences in life. You may use reason and common sense to draw deductions or conclusions from facts which have been established by the evidence. You will then apply those facts to the law which I give you in these and in my other instructions, and in that way reach your verdict. You are the sole judges of the facts; but you must follow the law as stated in my instructions, whether you agree with it or not.

The law demands of you a just verdict, unaffected . by anything except the evidence, your common sense, and the law as I give it to you. You should not take anything I have said or done during the trial as indicating what I think of the evidence or what I think your verdict should be.

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PART I: GENERAL INSTRUCTIONS

INSTRUCTION #3:. EVIDENCE

I have mentioned the word "evidence." "Evidence" includes the testimony ofwitnesses, documents, and other things received as exhibits.

Certain things are not evidence. I will list those things for you

now:

I. Statements, arguments, questions, and comments by lawyers are not evidence.

2. Objections are not evidence. Lawyers have a right to object when they believe something is improper under court rules. You should not be influenced by the objection. If I sustained an objection to a question, you must ignore the question and not try to guess what the answer might have been.

3. Testimony that I struck from the record, or told you to disregard, is not evidence and must not be considered.

4. Anything you see or hear about this case outside the courtroom is not evidence.

5. Exhibits that are identified by a party but not received in evidence are not evidence.

Finally, some of you may have heard the terms "direct evidence" and "circumstantial evidence." You are instructed that you should not be concerned with those terms. The law makes no distinction between direct and circumstantial evidence. You should give all evidence· the weight and value you believe it is entitled to receive.

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PART I: GENERAL INSTRUCTIONS

IN S TRUCTION # 4 : CREDIBILITY OF WITNES S ES

In deciding what the facts are, you may have to decide what testimony you believe and what testimony you do not believe. You may believe all of what a witness said, or only part of it, or none of it.

In deciding what testimony to believe, consider the witness's intelligence, the opportunity the witness had to have seen or heard the things testified about, the witness's memory, any motives that witness may have for testifying a certain way, the manner of the witness while testifying, whether that witness said something different at an earlier time, the general reasonableness of the testimony, and the extent to which the testimony is consistent with any evidence that you believe .

In deciding whether or not to believe a witness, keep in mind that people sometimes hear or see things differently and sometimes forget things. You need to consider therefore whether a contradiction is an innocent misrecollection or lapse of memory or an intentional falsehood, and that may depend on whether it has to do with an important fact or only a small detail.

Some witnesses, because of education or experience, are permitted to state opinions, and the reasons for those opinions, about matters requiring special knowledge or skill. You should judge this testimony in the same way that you judge the testimony of any other witness. The fact that such person has given an opinion does not mean that you are required to accept it. Give the testimony whatever weight you think it deserves, considering the reasons given for the opinion, the witness's qualifications, and all of the other evidence in the case.

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PART I: GENERAL INSTRUCTIONS

INSTRUCTION #5:BURDEN OF PROOF

You will have to decide whether certain facts have been proved by the greaterweight of the evidence. A fact has been proved by the greater weight of the evidence, if you find that it is more likely true than not true. You decide that by considering all of the evidence and deciding what evidence is more believable.

You have probably heard the phrase "proof beyond a reasonable doubt.11

That is a stricter standard than "more likely true than not true.11 It applies in criminal cases, but not in this civil case; so put it out of your mind.

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PART I: GENERAL INSTRUCTIONS

INSTRUCTION #6: OUTLINE OF T HE P ARTIES '

CLAIMS

In order to help you follow the evidence, I will now give you a brief summaryof the parties' claims. This summary is simply to help guide you in your deliberations. As I have already instructed, you are the sole judges of the facts.

Plaintiff Lincoln Composites claims that defendant Firetrace's tubing was defective, and as a result, that certain of Lincoln Composites' Titan Modules' fire protection systems did not function properly, causing Lincoln Composites to incur damages.

Lincoln Composites purchased the tubing from Firetrace in a series of transactions. The parties agree that, through these transactions, they entered into a contract for the purchase and delivery of Firetrace's tubing. However, the terms of the contract are in dispute.

Lincoln Composites claims that the contract consists of the terms and conditions contained on its website and referenced in purchase orders it sent to Firetrace. A contract may contain expressed and implied warranties. Lincoln Composites claims that its contract with Firetrace contained both express and implied warranties, and that Firetrace breached these warranties. You will be provided more instruction later on the difference between express and implied warranties and their significance in this case.

Firetrace denies that Lincoln Composites' terms and conditions form the basis of the contract. Instead, Firetrace asserts that it delivered its own specific terms and conditions, and that Firetrace's terms form the basis of the parties' contract. Firetrace argues that under its terms, any implied warranties were disclaimed and so there were no implied warranties. Firetrace also claims that, while it did provide an express warranty, its warranty only allows Lincoln Composites to have any defective tubing repaired or replaced .

Firetrace also denies that its tubing was defective. And Firetrace asserts that it has already replaced some tubing, and is still ready, willing, and able to replace any tubing that does happen to be defective.

Lincoln Composites asserts that it was damaged as a result of the claimed

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breach of warranties, and it seeks a judgment against Firetrace for these damages. Lincoln Composite contends that it has suffered damages

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PART I:GENERAL INSTRUCTIONS

consisting of the amount it paid Firetrace for all tubing and the travel and labor expenses Lincoln Composites incurred in replacing the tubing.

Firetrace contends that under its terms and conditions, including its express warranty, Lincoln Composites may not recover any of these damages, and is limited instead to repair or replacement of any defective tubing.

Finally, Lincoln Composites claims that, even if Firetrace's terms and conditions apply, and its express warranty did contain a limitation of remedies, that limited remedy has failed of its essential purpose, which would entitle Lincoln Composites to seek the damages described above.

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PART I: GENERAL INSTRUCTIONS

INSTRUCTION #7: GUIDE TO REMAINING INSTRUCTIONS

The parties agree that there was a contract. More specifically, the partiesagree that, through a series of transactions, they entered into a contract for the purchase and delivery of Firetrace's tubing. However, the terms of the contract are in dispute. You must decide the terms of the parties' contract.

To help you make that decision, the remainder of these instructions are divided into several parts. These parts are set forth as a sort of "decision tree" that will guide your analysis. In Part II, I will instruct you generally on how contracts are formed. And using the instructions I give you in Part II, you will determine the terms of the parties' contract.

The decision you reach in Part II will affect how you use the instructions that I give you in Parts III and IV. In Part III, I will instruct you how to decide whether Firetrace breached any express or implied warranties, and if so, whether this caused Lincoln Composites to incur damages. If you decide in Part III that Lincoln Composites did suffer damages, then in P art IV, I will instruct you how to determine the amount of those damages.

Finally, in Part V, I will provide you with instructions that will govern your deliberations in this case, no matter what decision you reach. Be sure to consult these instructions after working through Parts II through IV, no matter the outcome of that process.

For those of you who are visual learners, I have prepared a visual flowchart to help guide you through these instructions. This flowchart has been provided only as an illustrative aid to assist you in using these instructions. You must carefully read these instructions, as they are sole source of the law you must apply in this case.

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PART II:WHAT ARE THE TERMS OF THE CONTRACT?

INSTRUCTION #1: GENERAL RULES OF CONTRACT FORMATION AND T HE ' 'B A T TLE OF THE FORMS "

For there to be a contract, the parties must agree to do something. The agreement may be written , oral, inferred from conduct, or found in some combination of those ways. The agreement usually consists of an offer by one party and an acceptance by the other.

When the terms of the offer and the terms of the acceptance are the same, it is very simple to determine the terms of the parties' contract. But in the world of commerce, things can be more complicated. Often, each party will use a pre-printed form which contains "terms and conditions" which are generally favorable to itself. So, the buyer's form usually contains terms that favor the buyer, and the seller's form contains terms that favor the seller. As a result, the forms often contain terms that do not match.

Sometimes, the parties do not pay significant attention to the other party's entire terms and conditions. Instead, the buyer and seller focus on the terms that matter at the moment, such as price, quantity of product , and the delivery date. If everything goes smoothly, then once the product is delivered and paid for, the technical terms and conditions do not matter.

But at other times, as happened here, after the goods have been shipped and paid for, a dispute will arise between the parties. That is when the terms and conditions in those forms become important. This situation is known as a "Battle of the Forms." The law has developed a method to determine the actual terms of the parties' agreement under these circumstances.

You must apply that law to decide the terms of the parties' contract.

At some point in the dealings between Lincoln Composites and Firetrace, one party made an offer, which the other party accepted, giving rise to a contract. You will have to decide which party made such an offer and acceptance. Depending upon your answer, you may also have to decide the effect of certain additional terms in that acceptance.

The instructions in this Part II will guide you through this process. Once

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you have determined the terms of the parties' contract, these instructions will guide you to the appropriate instructions in Part III.

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PART II: WHAT ARE THE TERMS OF THE CONTRACT?

INSTRUCTION #2: FIRETRACE'S TERMS OF SALE, DEFINITION OF "OFFER"

Firetrace claims that it delivered its own "Terms of Sale," to Lincoln Composites, which contained the terms and conditions that Firetrace wanted to include in any contract. However , Lincoln Composites denies receiving any copies of Firetrace's Terms of Sale before December 2011. And by December 2011, the Terms of Sale would have arrived too late to have legal effect.

You must decide whether Firetrace did, in fact, provide Lincoln Composites with a copy of Firetrace's Terms of Sale at some time before December 2011. If you find that Firetrace did so, you must also decide whether Firetrace provided Lincoln Composites the Terms of Sale either in connection with, or as part of, an offer to sell tubing to Lincoln Composites.

An "offer" is an expression of willingness to enter into an agreement with another, made in such a way that the other party is justified in believing that its acceptance is invited and will result in a contract. A communication intended only as preliminary negotiation or an expression of willingness to negotiate is not an offer.

If you find that Firetrace did not provide Lincoln Composites with a copy of Firetrace's Terms of Sale before December 2011, or that Firetrace did provide those terms but did not do so in connection with, or as part of, an offer to sell tubing, then you must proceed to Instruction 11-3-A.

·On the other hand, if you find that Firetrace did provide Lincoln Composites with a copy of Firetrace's Terms of Sale before December 2011, and that Firetrace did provide these in connection with, or as part of, an offer to sell tubing, then you must proceed to Instruction II-3-B.

You should feel free, on this instruction and any other, to write on your copy of these instructions to help keep track of your findings. You may find those notations helpful to refer back to later.

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PART II: WHAT ARE THE TERMS OF THE CONTRACT?

INSTRUCTION 3-A:LINCOLN COMPOSITES' TERMS AND CONDITIONS

You should use this instruction if, in Part 11-2, you determined that Firetrace did not provide Lincoln Composites with a copy of Firetrace 's Terms of Sale before December 2011, or that Firetrace did provide these terms but did not do so in connection with, or as part of, an offer.

Based on your finding in Part II-2, Firetrace's terms and conditions are not a part of the parties' contract. The only terms and conditions that apply are those contained in Lincoln Composites' purchase orders. You must decide what those terms were.

Lincoln Composites has presented evidence that it sent purchase orders, for the purchase of tubing, to Firetrace. Those purchase orders stated that Lincoln Composites' terms and conditions would apply, and that a copy of those terms and conditions could be found at Lincoln Composites' website. By referring to that website, the purchase orders incorporated whatever terms and conditions could be found on that website at that time.

You must decide whether Lincoln Composites has proved that its terms and conditions were, in fact, available on Lincoln Composites' website when Firetrace received Lincoln Composites' purchase orders. It does not matter whether Firetrace actually read the terms, so long as it had a reasonable opportunity to do so.

If you find that Lincoln Composites' terms and conditions were, in fact, available in this manner, then you must proceed to Part III, where you will determine if Firetrace has breached any express or implied warranties. If this is your finding, then the parties' contract includes the express warranty and two implied warranties. The express warranty is that which is stated in Lincoln Composites' terms and conditions: that is, Firetrace expressly warranted that its tubing would be free of defects in material and workmanship, and that it would be fit and safe for the purposes for which it was manufactured.

On the other hand, if you find that Lincoln Composites' terms and conditions were not available in this manner, then you must still proceed to Part III, but you will determine only if Firetrace has breached any implied warranties. If this is your finding, then the parties' contract contained two implied warranties, but no express

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PART II: WHAT ARE THE TERMS OF THE CONTRACT?

warranty. Therefore, your verdict on Lincoln Composites' first claim, for breach of express warranty, must be in favor of Firetrace and against Lincoln Composites. You must record this finding in- favor of Firetrace on Finding 1of the verdict form. In Part III, you will consider only whether Firetrace breached any implied warranties.

After making the finding above, proceed to Part III

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PART II: WHAT ARE THE TERMS OF THE CONTRACT?

INSTRUCTION 3-B:LINCOLN COMPOSITES' TERMS AND CONDITIONS

You should use this instruction if, in Part 11-2, you determined that Firetrace did provide Lincoln Composites with a copy of Firetrace 's Terms of Sale before December 2011, and that Firetrace did provide those terms in connection with, or as part of, an offer to sell tubing.

You have determined that Firetrace's terms and conditions were included as part of an offer to Lincoln Composites. Lincoln Composites has presented evidence that it sent purchase orders to Firetrace. Those purchase orders operated as an acceptance of Firetrace's offer to sell tubing. You must decide what, if any, effect this acceptance had on the terms of the parties' contract. First, you must decide what terms were actually part of Lincoln Composites' purchase orders.

Lincoln Composites' purchase orders stated that Lincoln Composites' terms and conditions would apply, and that a copy of those terms and conditions could be found at Lincoln Composites' website. By referring to that website, the purchase orders incorporated whatever terms and conditions could be found on that website at that time.

You must decide whether Lincoln Composites has proved that its terms and conditions were, in fact, available on Lincoln Composites' website when Firetrace received Lincoln Composites' purchase orders. It does not matter whether Firetrace actually read the terms, so long as it had a reasonable opportunity to do so.

If you find that Lincoln Composites' terms and conditions were, in fact, available in this manner, then they may have been incorporated into the parties' contract. So, you must proceed to Part II-4, where you will receive further instructions on how to determine whether they became a part of the parties' contract.

On the other hand, if you find that Lincoln Composites' terms and conditions were not available in this manner, then the express warranty in the parties' contract is limited to that in Firetrace's Terms of Sale: that is, Firetrace expressly warranted that the tubing would be free from defects in material and workmanship. If this is your finding, then you must proceed to Part III, where you will determine if

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PART II: WHAT ARE THE TERMS OF THE CONTRACT?

Firetrace has breached the express warranty provided in Firetrace's Terms of Sale.

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PART II:WHAT ARE THE TERMS OF THE CONTRACT?

INSTRUCTION 4: SCOPE OF THE EXPRESS WARRANTY, MATERIAL ALTERATION, DEFINED

You should use this instruction if:in Part 11-2, you determined that Firetrace did provide Lincoln

Composites with a copy of Firetrace 's Terms of Sale bef ore December 2011, and that Firetrace did provide those terms in connection with, or aspart of, an offer to sell tubing; and

in Part 11-3-B, you determined that Lincoln Composites ' terms and conditions were available on its website at the relevant time.

You must now decide whether certain additional terms found in Lincoln Composites' terms and conditions became part of the parties' contract. Both parties agree that Firetrace has expressly warranted that its tubing would be 11free of defects in material and workmanship." This term was part of both Firetrace's Terms of Sale and Lincoln Composites' purchase orders.

However, under Lincoln Composites' terms, Firetrace would also have agreed to expressly warrant that its tubing would be 11fit and safe for the purpose for which it was manufactured." This additional warranty will automatically become part of the parties' contract unless you find that this additional warranty would be a 11material alteration" to the contract.

This additional warranty would materially alter the parties' contract if you find that it would result in surprise or hardship to Firetrace if the additional warranty were included in the contract without the express awareness of Firetrace.

To show hardship, Firetrace must show that the additional warranty would impose upon Firetrace a substantial economic hardship.

Surprise includes both an objective element (what a party should have known) and a subjective element (what a party actually knew). To show surprise, Firetrace must show both objective and subjective surprise. So, Firetrace must show that, under the circumstances, a reasonable person in its position would have been surprised to find that the additional warranty was a part of the contract. And Firetrace must also show that it was not, in fact, aware of the additional warranty that Lincoln Composites wanted to include.

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PART II:WHAT ARE THE TERMS OF THE CONTRACT?

If you find that Firetrace has shown, by the greater weight of the evidence, that this additional warranty would materially alter the parties' contract, then the express warranty in the parties' contract is limited to the one provided by Firetrace: that is, Firetrace expressly warranted that the tubing would be free from defects in material and workmanship.

On the other hand, if you find that Firetrace has not shown, by the greater weight of the evidence, that this additional warranty would materially alter the parties' contract, then the additional warranty becomes a part of the parties' contract: that is, Firetrace will have expressly warranted that the tubing would be free from defects in material and workmanship, and that the tubing would be fit and safe for the purposes for which it was manufactured.

Your decision above will determine the content of Firetrace's express warranty. You must now go to Part III.

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PART III: WAS A WARRANTY BREACHED?

INSTRUCTION 1 : DEFINITIONS COMMON TO ALL WARRANTY CLAIM S : ' 'PROXIMATE C A U S E" AND " NOTICE

OF B RE A C H "

This instruction will define two concepts, "proximate cause" and "notice of breach" which are common to all warranty claims in this case. In other words, these definitions apply to all of Lincoln Composites' claims: for breach of express warranty, breach of the implied warranty of merchantability, and breach of the implied warranty of fitness for a particular purpose.

A "proximate cause" is a cause that produces a result in a natural and continuous sequence, and without which the result would not have occurred.

Notice of Breach: In order to recover for any breach of warranty, Lincoln Composites must prove that it notified Firetrace of the breach, and that it did so within a reasonable time after it discovered, or should have discovered the breach. You must determine what amount of time is reasonable. In doing so, take into consideration the circumstances shown by the evidence in this case and the nature of the act to be done, that is1 giving notice. The notice may be oral or written. It does not have to be in any particular form and it does not have to use any particular words. Notice is sufficient if it informed Firetrace of the alleged defect or breach of warranty.

You should now go to the next instruction, Part III-2, for details on how to proceed.

l·'

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PART III:WAS A WARRANTY BREACHED?

INSTRUCTION 2:HOW TO PROCEED

In Part II, you made a number of decisions that were intended to help you determine what terms were included in the parties' contract. Now you must determine whether those terms were breached. And that analysis will be a little different depending on what terms you found were included.

If, in Part II-2, you determined that Firetrace did provide Lincoln Composites with a copy of Firetrace's Terms of Sale before December 2011, and that Firetrace did provide these in connection with, or as part of, an offer to sell tubing, then you must go to Part III-3-A to determine if Firetrace breached the applicable express warranty.

On the other hand, if, in Part Il-2, you determined that Firetrace did not provide Lincoln Composites with a copy of Firetrace's Terms of Sale before December 2011, or that Firetrace did provide these terms but did not do so in connection with, or as part of, an offer, then you must follow the appropriate direction below:

1. If, in Part Il-3-A, you determined that Lincoln Composites' terms and conditions were available on its website at the relevant time, then you must go to Part III-3-B to determine if Firetrace breached the applicable express warranty.

2. On the other hand, if in Part II-3-A, you determined that Lincoln Composites' terms and conditions were not available on its website at the relevant time, then you must go to Part III-5 to consider only Lincoln Composites' claims for breach of any implied warranties. (If this was your decision, then there are no express warranties, and you have already been directed to enter your verdict against Lincoln Composites and in favor of Firetrace on Lincoln Composites' claim for breach of express warranty).

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PART III: WAS A WARRANTY BREACHED?

INSTRUCTION 3-A:ELEMENTS: BREACH OF EXPRESS WARRANTY

Use this instruction only if directed to in Part 111-2.

You have previously determined the content of any express warranty in either Part 11-4 or Part 11-3-B. You may have found that Firetrace expressly warranted only that its tubing would be free of defects in material and workmanship. Or you may have found that Firetrace expressly warranted that its tubing would be free of defects in material and workmanship, and would also be fit and safe for the purpose for which it was manufactured.

You may need to refer to Part 11-4 or Part 11-3-B to refresh your memory about what you found the terms of the express warranty to be. Once you have done so, you must use that express warranty in deciding this claim.

In order to prevail against Firetrace on its claim of breach of express warranty, Lincoln Composites must prove, by the greater weight of the evidence:

1. That Lincoln Composites relied upon Firetrace's express warranty;

2. That Firetrace breached that warranty, that is, that the tubing did not conform to that express warranty;

3. That, within a reasonable time after Lincoln Composites discovered the breach, it gave Firetrace notice of the breach;

4. That the breach of this warranty was a proximate cause of some damage to Lincoln Composites; and

5. The nature and extent of that damage.

If you find that Lincoln Composites has proved each of the above elements by the greater weight of the evidence, then you must proceed to Part 111-4, to determine if the limited remedy of repair or replacement has failed of its essential purpose.

On the other hand, if any of the above elements have not been proved,

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then your verdict must be for Firetrace and against Lincoln Composites on this claim, and on Lincoln Composites' claims for breach of the implied

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PART III:WAS A WARRANTY BREACHED?

warranty of merchantability and the implied warranty of fitness for a particular purpose. In other words, if this is your decision, then you should not consider Lincoln Composites' remaining claims. You must instead proceed directly to the verdict form and record a verdict in favor of Firetrace on Findings 1, 2, and 3. You may then sign and date the verdict form.

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PART III:WAS A WARRANTY BREACHED?

INS TRUCTION 3-B: ELEMENTS : BREACH OF EXPRESS WARRANTY

Use this instruction only if directed to in Part 111-2.

You have previously determined, in Part II-3-A, that Lincoln Composites' version of the express warranty controls in this case; that is, Firetrace expressly warranted that its tubing would be free of defects in material and workmanship, and would be fit and safe for the purpose for which it was manufactured.

In order to prevail against Firetrace on its claim of breach of express warranty, Lincoln Composites must prove, by the greater weight of the evidence:

1. That Lincoln Composites relied upon Firetrace's express warranty;

2. That Firetrace breached that warranty, that is, that the tubing did not conform to that express warranty;

3. That, within a reasonable time after Lincoln Composites discovered the breach, it gave Firetrace notice of the breach;

4. That the breach of this warranty was a proximate cause of some damage to Lincoln Composites; and

5. The nature and extent of that damage.

Ifyou find that Lincoln Composites has proved each of the above elements by the greater weight of the evidence, then your verdict must be for Lincoln Composites and against Firetrace on this claim for breach of express warranty. You must record this finding in favor of Lincoln Composites on Finding 1of the verdict form. Having found a breach of an express warranty, you need not decide Lincoln Composites' remaining claims for breach of the implied warranty of merchantability and the implied warranty of fitness for a particular purpose. You may leave Findings 2 and 3 on the verdict form blank. You should now proceed directly to Part N , where you will determine the amount of damages that Lincoln Composites has incurred.

On the other hand, if any of the above elements have not been proved,then your verdict must be for Firetrace on this claim. You must record this

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PART III:WAS A WARRANTY BREACHED?

finding in favor of Firetrace on Finding 1 of the verdict form. However, you should now proceed to Part 111-5 to consider Lincoln Composites' implied warranty claims.

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PART III:WAS A WARRANTY BREACHED?

INSTRUCTION #4: WHETHER THE REP AIR AND REPLACE REMEDY FAILED OF ITS ESSENTIAL PURPOSE

Use this instruction only if directed to by Part 111-3-A.

You have arrived at this instruction because you previously found that Firetrace's express warranty is part of the parties ' contract. As a result, the parties' contract contains a limitation of remedies clause and a disclaimer of implied warranties. If these clauses are effective, then there are no implied warranties, only the express warranty. Additionally, Lincoln Composites' remedy for any breach of the express warranty is limited to repair or replacement of any defective tubing, at Firetrace's option.

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However, Lincoln Composites contends that this limited remedy has failed ofits essential purpose. If you decide that has occurred, then the disclaimer of warranties and limitation of remedies clause are no longer effective, and are stricken from the parties' contract. As a result, Lincoln Composites would be entitled to assert claims for breach of either or both of the implied warranties, and Lincoln Composites would be entitled to any damages it has incurred as a result of any breach of warranty.

To show that the limited remedy of repair and replacement has failed of its essential purpose,i Lincoln Composites must prove all of the following elements by the greater weight of the evidence:

1. That Lincoln Composites provided Firetrace with a reasonable opportunity to fix the defects in the tubing;

2. That despite Firetrace's attempts to fix the defects or provide replacement tubing, the tubing still failed to function properly ; and

3. That this deprived Lincoln Composites of the substantial value of its contract with Firetrace.

It is for you to decide how many attempts were needed, and what was a reasonable time frame in which to remedy the defect , before the remedy would fail of its essential purpose, if it did.

Ifyou find that Lincoln Composites has proved each of the above elements by the greater weight of the evidence, then your verdict must be for Lincoln

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PART III:WAS A WARRANTY BREACHED?

Composites and against Firetrace on this claim for breach of express warranty. You must record this finding in favor of Lincoln Composites on Finding 1of the verdict form. Having found a breach of an express warranty, you need not decide Lincoln Composites' remaining claims for breach of the implied warranty of merchantability and the implied warranty of fitness for a particular purpose. You may leave Findings 2 and 3 on the verdict form blank. You should now proceed directly to Part IV, where you will determine the amount of damages that Lincoln Composites has incurred.

On the other hand, if any of the above elements have not been proved, then your verdict must be for Firetrace and against Lincoln Composites on this claim, and on Lincoln Composites' claims for breach of the implied warranty of merchantability and the implied warranty of fitness for a particular purpose. In other words, if this is your decision, then you should not decide Lincoln Composites' remaining claims. You must instead proceed directly to the verdict form and record a verdict in favor of Firetrace on Findings 1, 2, and 3 of the verdict form. You may then sign and date the verdict form.

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PART III:WASA WARRANTY BREACHED?

INSTRUCTION 5:ELEMENTS:BREACH OF IMPLIED WARRANTY OF MERCHANTAB ILI TY

Lincoln Composites claims that Firetrace has breached the implied warranty of merchantability. This instruction will provide you with the elements of that claim.

Before Lincoln Composites can prevail against Firetrace on its claim of breach of the implied warranty of merchantability, Lincoln Composites must prove all of the following elements by the greater weight of the evidence:

1. That, at the time the Firetrace tubing was delivered by Firetrace, it was not merchantable;

2. That, within a reasonable time after LincolnComposites discovered the breach, it gave Firetrace notice

of the breach;

3. That the breach of this warranty was a proximate cause of some damage to Lincoln Composites; and

4. The nature and extent of that damage.

To be "merchantable," goods must be fit for the ordinary purposes for which such goods are used; and within the variations permitted by the contract, must be of even kind, quality, and quantity, within each unit and among all of the units involved.

Ifyou find that Lincoln Composites has proved each of the above elements by the greater weight of the evidence, then your verdict must be for Lincoln Composites and against Firetrace on this claim for breach of the implied warranty of merchantability. You must record this finding in favor of Lincoln Composites on Finding 2 of the verdict form. Having found a breach of the implied warranty of merchantability, you need not decide Lincoln Composites' claim for breach of the implied warranty of fitness for a particular purpose. You may leave Finding 3 on the verdict form blank. You should now proceed directly to Part IV, where you will determine the amount of damages that Lincoln Composites has incurred.

On the other hand, if any of the above elements have not been proved, then your verdict must be for Firetrace and against Lincoln Composites on this claim. You must record this finding in favor of Firetrace on Finding 2 of

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PART III:WAS A WARRANTY BREACHED?

the verdict form. However, you must still proceed to Part 111-6, to consider Lincoln Composites' claim for breach of the implied warranty of fitness for a particular purpose.

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PART III:WAS A WARRANTY BREACHED?

INSTRUCTION 6:ELEMENTS:BREACH OF IMPLIED WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE

Lincoln Composites claims that Firetrace has breached the implied warranty of fitness for a particular purpose. A "particular purpose" refers to Lincoln Composites' intended use of the tubing. A particular purpose differs from the ordinary purpose for which the tubing is used in that it anticipates a specific use by Lincoln Composites which is peculiar to the nature of its business, as opposed to the ordinary purposes for which the tubing is customarily used.

Before Lincoln Composites can prevail against Firetrace on its claim of breach of the implied warranty of fitness for a particular purpose, Lincoln Composites must prove all of the following elements by the greater weight of the evidence:

1. That, when the contract for the sale of tubing was made, Lincoln Composites purchased Firetrace tubing to detect the presence of fire in its Titan Modules, and Firetrace had reason to know of that purpose;

2. That, when the contract of sale was made, Lincoln Composites was relying on Firetrace's skill or judgment to select tubing suitable for that particular purpose, and Firetrace had reason to know of this reliance;

3. That, at the time the tubing was delivered by Firetrace, it was not fit for the particular purpose in question;

4. That, within a reasonable time after Lincoln Composites discovered that the Firetrace tubing was not fit for the particular purpose in question, it gave Firetrace notice of breach;

5. That the breach of this warranty was a proximate cause of some damage to Lincoln Composites; and

6. The nature and extent of that damage.

In deciding whether Firetrace had reason to know of any particular purpose that Lincoln Composites had for the tubing, you should consider the following: if Lincoln Composites has proved that it disclosed its needs to Firetrace, and Firetrace had reason to know of Lincoln Composites' reliance,

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PART III: WAS A WARRANTY BREACHED?

then Firetrace should have inquired further as to Lincoln Composites' particular wants and intended use of the tubing before representing that the tubing could be provided.

If you find that Lincoln Composites has proved each of the above elements by the greater weight of the evidence, then your verdict must be for Lincoln Composites and against Firetrace on this claim for breach of the implied warranty of fitness for a particular purpose. You must record this finding in favor of Lincoln Composites on Finding 3 of the verdict form. You will determine the amount of damages that Lincoln Composites has incurred in Part IV. You must proceed to Part IV now.

On the other hand, if any of the above elements have not been proved, then your verdict must be for Firetrace and against Lincoln Composites on this claim. You must record your finding in favor of Firetrace on Finding 3 of the verdict form. You should nonetheless proceed to Part IV to determine the amount of damages, if any, that Lincoln Composites has incurred on any of its other claims.

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PART IV: WHAT ARE LINCOLN COMPOSITES' DAMAGES?

INS TRUCTION 1: MEAS URING LINCOLN COMPOSITES' DAMAGES

If you find in favor of Lincoln Composites on any of its claims, then you must determine the amount of Lincoln Composites' damages. These instructions will explain how you should measure those damages. This instruction applies to each of Lincoln Composites' claims. That is, the same way of measuring damages is used , whether you are measuring damages for breach of express warranty, breach of the implied warranty of merchantability, or breach of the implied warranty of fitness.

However, you must separately determine the amount of damages for each claim. The amount you determine may be the same or different, depending upon your view of the evidence and the damages, if any, caused by the breach of the particular warranty you are considering.

Lincoln Composites is entitled to recover the following:

1. The difference between the value of the tubing as delivered to Lincoln Composites and the value of the tubing if it had been as warranted;

2. Plus any reasonable expenses Lincoln Composites incurred or will be required to incur in replacing the tubing, as a result of any breach of warranty, including reasonable travel and labor expenses.

Remember, throughout your deliberations you must not engage in speculation, guess, or conjecture, and you must not award any damages under this instruction by way of punishment or through sympathy.

Although Lincoln Composites has brought multiple claims, it is only entitled to one recovery of damages. So, once you have determined the amount of damages, if any, for each claim, select the highest amount, as that will be the amount of damages Lincoln Composites may recover. Do not add together the damages from separate claims.

Once you have determined the total amount of Lincoln Composites' damages, you must write that amount in the blank provided on the verdict form.

You should not interpret the fact that I have given instructions about Lincoln Composites' damages as an indication in any way that I believe

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that Lincoln

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4:12-cv-03142-JMG-CRZ Doc # 88 Filed: 10/23/14 Page 34 of 36 - Page ID # 2158

PART IV:WHAT ARE LINCOLN COMPOSITES' DAMAGES?

Composites should, or should not, win this case. It is your task first to decide whether Firetrace is liable. I am instructing you on damages only so that you will have guidance in the event you decide that Firetrace is liable and that Lincoln Composites is entitled to recover money from Firetrace.

You should now proceed to Part V.

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PART V

ELECTION OF FOREPERSON AND RULES FOR DELIBERATION

In conducting your deliberations and returning your verdict, there are certain rules you must follow. I shall list those rules for you now.

First, when you go to the jury room, you must select one of your members as your foreperson. That person will preside over your discussions and speak for you here in court.

Second, it is your duty, as jurors, to discuss this case with one another in the jury room. You should try to reach agreement if you can do so without violence to individual judgment , because your verdict must be unanimous. Each of you must make your own conscientious decision, but only after you have considered all the evidence, discussed it fully with your fellow jurors, and listened to the views of your fellow jurors . Do not be afraid to change your opinions if the discussion persuades you that you should. But do not come to a decision simply because other jurors think it is right, or simply to reach a verdict.

Third, if you need to communicate with me during your deliberations, you may send a note to me through the courtroom deputy, signed by one or more jurors. I will respond as soon as possible either in writing or orally in open court. Remember that you should not tell anyone, including me, how your votes stand numerically.

Fourth, your verdict must be based solely on the evidence and on the law which I have given to you in my instructions. The verdict, whether for the plaintiff or defendant, must be unanimous. Nothing I have said or done is intended to suggest what your verdict should be-that is entirely for you to decide.

Finally, the verdict form is simply the written notice of the decision that you reach in this case. You will take this form to the jury room, and when each of you has agreed on the verdict, your foreperson will fill in each page of the form, sign and date it, and advise the courtroom deputy that you are ready to return to the courtroom. If you do not agree upon a verdict by 5:00 p.m. on any given day, you may separate and return for deliberation at 8:30 a.m. on the next business day. If you desire to deliberate after 5:00 p.m., you may do so but please notify the courtroom deputy if that is your intention.

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PAR.T V

Please be admonished that if you separate at any time during your deliberations, you are, during such separation, not to talk to anyone about this case or to talk among yourselves about this case. All your deliberations should be conducted as a group in the confines of the jury room. Please also remember and follow all of the other admonitions I have given you throughout this trial for your conduct during recesses. All such instructions also continue to apply during any separations which may occur after you commence deliberations.

Thank you for your service.

Dated this 23rd day of October, 2014.

Submitted

BY THE COURT:

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