MidAmerica C2L Inc. v. Siemens Energy Inc.
Eleventh Circuit Clarifies Warranty-Disclaimer Enforceability and the Scope of Florida’s Independent Tort Doctrine

1. Introduction

This decision, the third appellate iteration of a sprawling decade-long dispute between Secure Energy/MidAmerica C2L (collectively “Secure”) and Siemens Energy (“Siemens”), addresses four revived claims: breach of the implied warranty of fitness, fraudulent misrepresentation by omission, rescission for fraud, and rescission for lack of consideration. After prior appeals and a remand, the Middle District of Florida again entered summary judgment for Siemens; the Eleventh Circuit now affirms.

The Court’s opinion is significant because it:

• Confirms that a conspicuous, bargained-for disclaimer of “all implied warranties” in a sophisticated, arm’s-length transaction is neither procedurally nor substantively unconscionable under New York law.
• Re-draws the line between contract and tort by holding that fraud-by-omission claims tied to a party’s contractual performance obligations cannot proceed independently under Florida’s “independent tort doctrine.”
• Illustrates post-United States v. Campbell caution: appellate courts must not rescue unbriefed arguments absent exceptional circumstances; instead, they may allow the district court to consider those arguments on remand.

2. Summary of the Judgment

On de novo review the Eleventh Circuit affirms summary judgment for Siemens on all four disputed counts:

1. Breach of Implied Warranty of Fitness (New York law): The parties’ contracts contained a bold, all-caps disclaimer of “ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS.” Secure argued the clause was unconscionable, but provided no evidentiary support. The Court finds no procedural or substantive unconscionability and enforces the disclaimer.
2. Fraudulent Misrepresentation & Rescission for Fraud (Florida law): Because Siemens’s alleged nondisclosures concerned its performance duties under existing contracts, the independent tort doctrine bars the claims. The fraud-in-the-inducement exception does not apply; earlier representations were expressly released in a “Completion Agreement.”
3. Rescission for Lack of Consideration: Secure failed to challenge the district court’s holding that the claim was time-barred under either state’s statute of limitations, thereby abandoning the issue on appeal.

3. Analysis

3.1 Precedents Cited and Their Influence

• N.Y. U.C.C. §§ 2-315, 2-316 – Statutory framework for implied warranty and its disclaimers.
• Simar Holding v. GSC, Gillman v. Chase Manhattan Bank – New York standards for unconscionability (procedural + substantive).
• Haves v. City of Miami, Amy v. Carnival – Summary-judgment review standards.
• HTP, Ltd. v. Lineas Aereas Costarricenses, Allen v. Stephan Co. – Florida’s economic loss and independent tort doctrines.
• United States v. Campbell (en banc, 2022) – Appellate forfeiture framework that prompted the second remand.
• Billington v. Ginn-La Pine Island – Enforceability of contractual releases of pre-contract misrepresentation claims.

3.2 Court’s Legal Reasoning

3.2.1 Implied Warranty Claim

3.2.2 Fraud & Rescission Based on Fraud

3.2.3 Rescission for Lack of Consideration

Secure’s brief forfeited any challenge to the district court’s limitations analysis; applying appellate waiver doctrine (Sapuppo), the Court affirmed.

3.3 Impact of the Judgment

This opinion is unpublished, yet persuasive authority within the Eleventh Circuit and useful nationwide for commercial litigators. Key implications:

• Contract Drafting & Negotiation – Clear, bold warranty disclaimers and merger/waiver clauses remain powerful shields even after allegations of fraud. Parties should ensure conspicuous language and repeated incorporation across related instruments.
• Litigation Strategy – Plaintiffs must marshal concrete evidence of both procedural and substantive unconscionability; conclusory affidavits or pleadings will not suffice at summary judgment.
• Tort vs. Contract Boundary – Florida practitioners should note the Court’s emphasis that omissions tied to performance duties cannot be recast as fraud to obtain tort remedies (punitive damages, etc.).
• Appellate Practice – Post-Campbell, panels are reluctant to decide unbriefed issues sua sponte. Litigants must preserve all alternative grounds in district court and on appeal.

4. Complex Concepts Simplified

• Implied Warranty of Fitness (§ 2-315): A promise that goods will be suitable for a buyer’s specific purpose when the seller knows that purpose and that the buyer is relying on the seller’s skill.
• Disclaimer (§ 2-316): Contract language that negates or limits warranties. To kill an implied warranty, it must be written and conspicuous (e.g., ALL CAPS).
• Procedural vs. Substantive Unconscionability: Procedural addresses bargaining power and surprise; substantive focuses on unfair terms. New York generally requires both to void a clause.
• Independent Tort Doctrine (Florida): Bars tort recovery if the duty breached is wholly derived from a contract. Fraud-in-the-inducement is the main exception because it occurs before the contract forms.
• Fraud by Omission: Liability for intentionally withholding material facts when there is a duty to speak. The duty usually arises from a fiduciary relationship, statute, or contract.
• Merger/Integration Clause: States that the contract “supersedes all prior agreements or representations,” preventing reliance on earlier statements.
• Release Clause: A party expressly waives the right to sue over certain past events; commonly upheld if clear and knowing.
• Summary Judgment (Rule 56): A judgment without trial, granted only when no material factual dispute exists and the movant is entitled to judgment as a matter of law.

5. Conclusion

The Eleventh Circuit’s ruling reinforces two core commercial-law tenets:

1. Bargained-for warranty disclaimers and release clauses will be enforced absent compelling evidence of unconscionability.
2. Florida’s independent tort doctrine sharply limits fraud-by-omission claims when the alleged deception concerns duties memorialized in the contract.

For businesses, the case underscores the importance of meticulous contract drafting, diligent due diligence before signing, and careful preservation of arguments at every litigation stage. For courts, it offers a clear, methodical framework for analyzing unconscionability and the tort/contract divide—guidance likely to resonate well beyond the particular demise of Secure’s coal gasification venture.