Amvest Corporation v. Anderson Equipment Company

NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 08-4796
AMVEST CORPORATION,
Appellant
v.
ANDERSON EQUIPMENT COMPANY; TEREX CORPORATION
Appeal from the United States District Court
for the Western District of Pennsylvania
(D.C. Civil Action No. 2-08-cv-01057)
District Judge: Honorable Gary L. Lancaster
Submitted Under Third Circuit LAR 34.1(a)
November 9, 2009
Before: AMBRO, GARTH, and ROTH, Circuit Judges
(Opinion filed: December 22, 2009)
OPINION
AMBRO, Circuit Judge
Appellant Amvest Corporation filed suit against Terex Corporation and Anderson
Equipment Company asserting claims of negligence, breach of express warranty, and
strict liability arising from a fire that consumed a Terex-manufactured truck owned by

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That Court had jurisdiction pursuant to 28 U.S.C. § 1332(a). We have jurisdiction1
under 28 U.S.C. § 1291.
2
Amvest. The District Court granted motions to dismiss filed by Terex and Anderson
based on the one-year suit limitation provision contained in the sales agreement. Amvest
appeals the dismissal of its complaint as to Terex only. For the reasons set out below, we
affirm the decision of the District Court.1
I. Background
In 2005, after several months of negotiation, Amvest purchased a 240-ton Terex
truck from Anderson, an authorized Terex dealer, for use at a mine in West Virginia. The
sales contract consisted of: (1) a one-page double-sided Equipment Sales Agreement; (2)
a proposal on Terex letterhead; (3) a “Two Year Limited Warranty” from Unit Rig, a
division of Terex; (4) a Terex Mining Extended Frame Warranty; and (5) a payment
invoice from Anderson. The reverse side of the Equipment Sales Agreement contained a
one-year suit limitation and the following choice-of-law provision:
The Uniform Commercial Code and, to the extent not inconsistent therewith,
other applicable law of the Commonwealth of Pennsylvania exclusive of
Pennsylvania choice of law provisions in effect on the date of the acceptance
of this offer by Buyer as provided herein, shall apply in interpreting the terms,
conditions and limitations herein and on the face hereof . . . .
On October 21, 2006, within the two-year limited warranty period, the Terex truck
caught fire and was destroyed. Amvest notified Anderson and Terex of the fire in early
November 2006, and the companies conducted a joint inspection in January 2007. In

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Our review of the District Court’s dismissal under Federal Rule of Civil Procedure2
12(b)(6) is plenary. Nami v. Fauver, 82 F.3d 63, 65 (3d Cir. 1996).
Amvest does not challenge the District Court’s conclusion that Terex was an intended3
third-party beneficiary of the Sales Agreement and could enforce its terms.
3
December 2007—14 months after the fire and 11 months after the joint
inspection—Amvest filed suit, alleging that the fire was caused by a defect involving a
battery cable.
The District Court, applying Pennsylvania law (including its Uniform Commercial
Code), held that Amvest’s claims were barred by the one-year suit limitation. It rejected
Amvest’s arguments that the limitation provision was unconscionable, that Terex was not
a third-party beneficiary of the Sales Agreement, and that the “discovery rule” tolled the
accrual date until the January 2007 joint inspection. The Court determined that Amvest’s
cause of action accrued on the date of the fire and that its suit was barred because it was
filed 14 months after that date.
II. Discussion 2
The contractual one-year suit limitation clause provided; “Any suit on any claim
whatsoever brought in law or equity must be filed within one year from the date the cause
of action accrued or be forever barred.” Amvest challenges the District Court’s3
determination that its suit was barred by this provision.
We agree with the Court that the discovery rule did not toll the limitations period
here. In cases involving latent injuries or instances where the causal connection between

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4
an injury and another’s conduct is not apparent, the discovery rule may “toll the statute of
limitations until the plaintiff discovers, or reasonably should discover, that she has been
injured and that her injury has been caused by another party’s conduct.” Wilson v. El-
Daief, 964 A.2d 354, 361–62 (Pa. 2009) (citation omitted). The Pennsylvania Supreme
Court has looked favorably on “tying commencement of the limitations period to actual or
constructive knowledge of at least some form of significant harm and of a factual cause
linked to another’s conduct, without the necessity of notice of the full extent of the injury,
the fact of actual negligence, or precise cause.” Id. at 364 (emphasis added).
Here, while according to Amvest the “precise cause” of the fire was not uncovered
until the joint inspection, it was on “inquiry notice” that the truck was harmed by a fire
that may have resulted from another’s conduct. Id. Amvest through reasonable diligence
could have uncovered its cause at the time of the fire. These circumstances do not
warrant application of the discovery rule. See Fine v. Checcio, 870 A.2d 850, 858 (Pa.
2005) (“As the discovery rule has developed, the salient point giving rise to its application
is the inability of the injured, despite the exercise of reasonable diligence, to know that he
is injured and by what cause.”) (citation omitted).
On appeal, relying on provisions of the model U.C.C. not raised before the District
Court, Amvest presents the alternative argument that Terex breached a “remedial

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The Limited Warranty states in relevant part:4
In the event any product sold hereunder manufactured by the Seller is defective
on account of workmanship or material, the Seller agrees, at its option, to
replace or repair the product. The agreement, however, is upon condition that
the Buyer promptly notifies the Seller in writing by completing the authorized
Unit Rig claim form for any claim in this respect, setting forth in detail any
such claimed defect and that the Seller is provided a reasonable opportunity to
examine the product and to investigate the claimed defect.
It does not appear that any state has adopted this provision of the model U.C.C.5
5
promise” contained in the Limited Warranty. The model U.C.C. defines a remedial4
promise as “a promise by the seller to repair or replace goods or to refund all or part of
the price of goods upon the happening of a specified event.” U.C.C. § 2-103(1)(n)
(2004). A cause of action for a breach of a remedial promise “accrues when the remedial5
promise is not performed when performance is due.” Id. § 2-725(2)(c). As performance
did not become due here until, at the earliest, the joint inspection in January 2007,
Amvest asserts that its cause of action did not accrue until then. Terex counters that
Amvest failed to raise this argument in the District Court and is improperly attempting on
appeal to recast its breach-of-warranty claim as a breach-of-remedial-promises claim. We
agree with Terex.
“It is well established that failure to raise an issue in the district court constitutes a
waiver of the argument.” Brenner v. Local 514, United Bhd. of Carpenters & Joiners of
Am., 927 F.2d 1283, 1298 (3d Cir. 1991); see also Delaware Nation v. Pennsylvania, 446
F.3d 410, 416 (3d Cir. 2006) (“Absent exceptional circumstances, this Court will not

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Even this connection is dubious, as the sentence was in a subsection of the brief6
devoted to the discovery rule.
6
consider issues raised for the first time on appeal.”) (citation omitted). Amvest concedes
that it did not allege in its complaint a claim for breach of a warranty to repair or replace
or a breach of a remedial promise. See Appellant’s Reply Br. at 4. Instead, it alleged that
the express warranty covered “defects in design and/or workmanship and/or would be
merchantable and/or fit for the particular purpose for which it was sold,” and that the
breach occurred when Terex “provid[ed] the Truck with a hazardous malfunction or
defect.”
Similarly, Amvest focused exclusively on the discovery rule argument in its
opposition briefs to the motions to dismiss. Recognizing this, it relies on the following
sentence buried in four pages of argument: “Arguably, because the vehicle was still under
warranty, the ‘breach’ did not technically occur until Anderson and Terex failed to honor
the terms of the warranty and repair the vehicle.” While this reference could be construed
in hindsight as alleging that the cause of action accrued when Terex failed to repair or
replace the truck, Amvest did not fairly raise the issue in the District Court.6
Accordingly, we will not consider it.
Amvest also asserts that the suit limitation and choice-of-law provisions are
unconscionable because they were not conspicuous and were not mentioned during the
negotiation process. This argument underwhelms.

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7
“‘Unconscionability has generally been recognized to include an absence of
meaningful choice on the part of one of the parties together with contract terms which are
unreasonably favorable to the other party.’” Witmer v. Exxon Corp., 434 A.2d 1222, 1228
(Pa. 1981) (quoting Williams v. Walker-Thomas Furniture Co., 350 F.2d 445, 449 (D.C.
Cir. 1965)). There was no such “absence of meaningful choice” here.
Both parties are sophisticated business entities. After considering other
manufacturers, Amvest engaged in a negotiation process with Anderson lasting several
months, and the final Terex proposal reflected edits by both Amvest and Anderson.
Amvest’s admitted failure to read the contract is no defense. See Standard Venetian
Blind Co. v. Am. Empire Ins. Co., 469 A.2d 563, 566 (Pa. 1983) (“‘[I]n the absence of
proof of fraud, failure to read [the contract] is an unavailing excuse or defense and cannot
justify an avoidance, modification or nullification of the contract or any provision
thereof.’”) (quoting In re Olson’s Estate, 291 A.2d 95, 98 (Pa. 1972)) (alterations in
original). Also unavailing are Amvest’s complaints that Anderson did not specifically
point out each provision to Amvest.
Nor were the provisions substantively unconscionable. “Substantive
unconscionability refers to contractual terms that are unreasonably or grossly favorable to
one side and to which the disfavored party does not assent.” Harris v. Green Tree Fin.
Corp., 183 F.3d 173, 181 (3d Cir. 1999). The subsection of the Pennsylvania U.C.C.
governing “[s]tatute[s] of limitations in contracts for sale” provides that “[a]n action for

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We also reject Amvest’s argument that Anderson’s failure to sign the agreement on7
an indicated line precludes Terex from asserting the limitation provision as a defense to
Amvest’s claims. The parties, after arriving at an acceptable set of terms, indicated their
approval of the contract, and Amvest bases its claims on a warranty created by that very
contract.
8
breach of any contract for sale must be commenced within four years after the cause of
action has accrued. By the original agreement the parties may reduce the period of
limitation to not less than one year but may not extend it.” 13 Pa. Cons. Stat. § 2725(a).
As the Pennsylvania legislature has expressly authorized a one-year period of limitation, it
is not unconscionable. As to the choice-of-law provision, “[i]n general, we respect the
choice of law that parties agree upon to resolve their private disputes.” Gen. Elec. Co. v.
Deutz AG, 270 F.3d 144, 154 (3d Cir. 2001) (citations omitted). We do so here, given
that Pennsylvania has a substantial relationship to Anderson, a Pennsylvania corporation.7
* * * * *
For these reasons, we affirm the District Court’s judgment in favor of Terex.

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